Welcome to the SMCP 2024 Full Year Results Conference Call. My name is Alan, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. If you require assistance at any time, please press star zero, and you'll be connected to an operator. I will now hand you over to your host, Amélie Dernis, Head of Investor Relations, to begin today's conference. Thank you. Thank you. Good evening, everyone. Thanks for being with us today for the publication of our full year results. I'm here with our CEO, Isabelle Guichot, and our CFO, Patricia Despointes. You can listen to the publication via the usual conference call, or you can connect to the webcast to have the presentation displayed. As usual, we can go through the presentation, and then we'll have the Q&A session. Before I hand it over to Isabelle and Patricia, I invite you to go through our usual disclaimer on page two, and I think we can start now. Thank you, Amélie. Good evening, everyone. Thank you all for joining us today for the 2024 full year results. I think we all agree that 2024 was a very special year, year of multiple elections in many countries, year of the Olympics in Paris, year of very complex context in Asia, etc. So before going in detail with facts and figures, it's worth taking some time to share a few qualitative highlights on what 2024 was for us. This has been a transitional year for our business with strong decisions made, which we think will set the stage for sustainable growth, long-term profitability, and cash generation. Three main messages on this slide. First one, despite the challenging macroeconomic context and our ongoing network optimization, we've achieved a resilient sales performance across most of our regions. We also saw a consistent quarter-on-quarter improvement of the trend, demonstrating the strength of our four brands and the desirability of our collections, even in the face of external challenges. Second point to note is that this year has been transitional for our profitability, which improved in H2. We have implemented essential measures for the future to streamline our network, improve our cost efficiency, optimize our production processes, and accelerate on sustainability. While we're seeing some expected short-term costs now, we're confident that these efforts are an investment and will yield significant returns in the next months and years. I want to highlight our focus on cash management. We executed a strong set of cash protection measures that allowed us to generate significant free cash flow. This is a key achievement, enabling us to reduce our net debt quite substantially and creating a solid foundation for future growth, ensuring we're in a sound, strong financial position to meet our strategic goals and drive long-term profitability. Let's move on to page five, where we go a bit more granular on our full year figure, sales figure. They came at EUR 1,212 million, a slight decrease by 1.5% at constant foreign exchange rate versus last year and -3% like-for-like. Excluding China, the group records a sound fiscal year performance with a growth of sales by 2.3%, driven by Sandro Maje good performances in the other geographies. We saw an improvement quarter after quarter, notably in H2, and then with positive like-for-like performance in Q4. Other points worth mentioning are the following. We stick to our full price strategy, which is almost an obsession in our four brands, with a two-point decrease of discount rate in season despite good comps in discount level in 2023 and a challenging environment. Our digital share remains at a satisfactory level at circa 20%. You can consider that this level is a normative threshold today. As expected, the network decreased by 68 POS this year with the implementation of our network optimization plan that we also already presented during the mid-year results in China and for Claudie Pierlot in Europe, and with the expansion of our network mainly through our partners. Page six now, you'll see a detailed bridge of sales evolution between 2023 and 2024. Although the decrease comes from the like-for-like network in China, no big surprise there. The other region's like-for-like performance is slightly positive, driven mostly by Sandro and Maje in France and Europe. The network optimization in China and for Claudie Pierlot accounts for a loss of EUR 16 million of sales, EUR 60 million compared to last year. More than 80% of this amount comes from China. The evolution of the rest of the network is positive, coming from the effect of 2023 and, to a smaller extent, 2024, openings and relocations, especially in America. And finally, wholesale revenues increased by EUR 5 million, aligned with our strategy. Moving on to page seven now, you will find here the performance by region. Patricia will get into more granular detail in the presentation, but no big surprise there. By region, Europe gained two points versus last year. France and America gained one point, each resulting from resilient performance in the region. Symmetrically, APAC decreases by four points from a very challenging economic context. By brand, a good performance for Sandro and Maje, who are showing their resilience in all weather. By channel, wholesale increases by one point, in line with our strategy. Retail network remains the largest part of our business with 91% contribution. Within retail channel, Corners performed particularly well this year. Page eight now, let's do a little bit of a focus on China, as this has been a main focus of our strategy this year. Our strategic roadmap in China has been written to address the challenging context and strengthen our strategy and positioning. Network optimization was the first key step. We closed 65 less profitable stores, allowing us to focus our resources on ensuring the best experience to our customers in the remaining store, more clienteling activity, more marketing activations. In parallel, we have continued discussion with [landlords] to strengthen our business relationships and be ready to see the future opportunities of growth. We also reorganized and aligned the HQ team accordingly. For 2025, we plan to finalize the optimization of the network with a few remaining closings in H1. We want to be more local in our marketing actions, work on clienteling, and improve discount rate. From Q4 2024, we started to see some first encouraging signs in retail KPIs, such as like-for-like sales improvement, like-for-like being now the key metrics we will be carefully following for China. In parallel, we worked on customer strategy, and we can see the first signs of improvement in conversion rate, directly linked to a better experience in our stores. We also managed to reduce inventory from old collections. Despite the closure plan that we executed in 2024, we keep a large network in mainland China, with Sandro and Maje having each of them roughly a bit over 60 stores in 30 different cities, which is a large footprint. Page nine now, some key figures on P&L and cash. Additional details and bridges following the course of the presentation, obviously. I will just insist on three messages. Gross margin ratio remains at a high level, a sound improvement by 0.6 points versus last year. This is a translation of our strategy to focus on full price sales. Adjusted EBIT at EUR 53 million, representing 4.4% of sales. This year was impacted by one-offs, especially in H1, and macroeconomic factors partly compensated by cost optimization action plan. We saw also an encouraging improvement in the second half, where you see that EBIT comes at 5.5% of sales in H2. A strong free cash flow generation of circa EUR 50 million, leading to a decrease of debt by the same amount. Net debt stands at EUR 237 million. This is a very good achievement in a particular adverse context. This achievement results from tight management of inventories and strict control of investments. So this is a little bit for the big picture internal figures. Let's move on to page ten. I'm pleased to share with you the progress we've made in our commitment to sustainability. You know that it's a key issue for the group and something that we really all very focused on. I will not come into detail on our three P's of our strategy because you know them perfectly. I just focused maybe on two main achievements this year. First one on the planet side, this year we took a major step forward with the adoption of a Biodiversity Strategy. Our commitment includes ambitious goals such as achieving zero deforestation by 2025 and supporting Regenerative Agriculture projects. This effort is central to our long-term vision of contributing to a healthier planet and a more virtuous industry. On the people side, a major step was the deployment of a new worldwide parental policy based mainly on French rights. This policy reflects our commitment to supporting our employees in balancing their professional and personal lives, regardless of where they are located. By ensuring equal parental rights across all our locations, we're fostering a more inclusive and supportive workplace where employees feel valued and empowered both at work and at home. I will move now forward to brand initiatives and products, starting with collections. The four brands have seen an encouraging start of the new collection that was introduced in store at the end of 2024, the spring summer collection. It's been really well received by our clients. We can already see some bestsellers selling out, and some of them are featured on that slide. Sandro continues to register strong performance with both women and men's collections. At Maje, we can underline the Russel dress, which is an amazing success, which was injected with a new knit and fresh knit in the dress category, animated in several materials, colors, and lengths this season. We continue to have strong results of the Miss M bag, which is just pictured above the dress with a new animation this season. I take also the opportunity to mention that Maje has a little bit reframed its logo, which is a little bit more bold and round. At Claudie Pierlot, the positive reaction on the pieces of this campaign, such as the very cute cardigan on this slide, shows that the realignment of product image and commercial results is progressing, and we're really proud of that. Finally, Fursac, the good results of some pieces of elegant casual wear is also in line with the enlargement of the offer beyond formal wear. We can also note the success of the first runway show that took place earlier in January. Now, key initiatives of the last quarter, the capsule. You know, usually the Q4 is a good season to launch some capsules to animate the end of the season. On Sandro, you had the Winter Escape collection that was shot in the French Alps. Quite beautiful and sleek scenery was an amazing set to showcase those products. Maje, which is a brand that loves to party, you have the picture of the Party Capsule that was introduced in store for the year-end, which is the occasion for gifting and partying. Claudie Pierlot, a few pictures of the presentation of the Spring/Summer Collection that took place during the autumn, blending the codes of the brand with the summery feeling. It was a very big success. Fursac presented a collaboration with Mephisto, the shoe company around the Dribbler, the Dribbler shoe, which is famous for skaters. It was a big success, especially on digital in the U.S., combining style and comfort. Page 14 now, we always work on engaging more with our consumers, especially on the social networks. So an elevated KOL strategy with a very interesting KOL, such as Damiano David, the leader of the Måneskin rock group, or Clara Luciani, the famous French singer. And on Fursac, Rufus Sewell from the White Lotus series, as well as Pete Doherty, who's a close friend of the brand, has been featured recently. Q4 openings with retail partners. You know that increasing the retail partner activity is also a key strategic axis for our group. And we opened some interesting stores in South Korea, in Kazakhstan, which is a new country for the group, and in Riyadh for Sandro, for instance, as well as we already anticipated last year, the first openings in India that took place in January for Sandro and Maje. And with this new country, we have now officially reached a presence in 50 countries around the world, which is also for us a strength to be very well developed worldwide and to be able to balance geography for our brands. I will now leave it to Patricia to go more into detail in the figures. Thank you, Isabelle. Good evening, everyone. So let's start with more details on sales on slide 18. With France first, sales at EUR 418 million, progressing 1% versus last year, with a strong performance of Sandro and Maje, outperforming market indices. The second semester was initially impacted by the organization of the Olympic Games during the summer, which disrupted a bit the activity, particularly in Paris, before a recovery in the fourth quarter driven by an increase in store traffic and a higher influx of tourists, contributing to a return to like-for-like growth. The network remains roughly stable with two net openings. In EMEA now, with sales at EUR 403 million, progressing 3% organic, driven by like-for-like, which was positive in almost all our retail markets. The growth was supported by increased traffic and a continued reduction of discounts. This performance was particularly strong in corners. Partners also reported strong results, especially in the Middle East. The region recorded 19 net closures during the year, mainly reflecting Claudie Pierlot's network optimization strategy. In America, on page 19, sales at EUR 183 million are growing 6% organic versus 2023. This growth remained consistent and quite strong throughout the year. In a highly promotional environment, the group maintained strict pricing discipline with more than two points improvement in the average discount rate. In the U.S., like-for-like sales grew, particularly in physical stores. In Mexico, sales showed strong performance. Finally, the network is growing in North America with 11 net openings. In Asia, sales stood at EUR 208 million, minus 18% organic. In China, we were heavily impacted by a decline in traffic, as you know, as well as by store closures, in line with the strategy to optimize the network. The group closed 65 less profitable stores, as explained earlier by Isabelle. Our action plan also aims at revitalizing sales in the country by focusing on enhancing the desirability of brands and improving retail execution and in-store clienteling experience. This led to a trend which is still negative in Q4, but much less than Q1 to Q3, as you can see on the right in the graph. In the rest of the region, sales remain resilient in several markets. We can mention Singapore, Vietnam, Malaysia, or Thailand. On page 20, you will find a bridge of EBIT between 2023 and 2024. This is not the easiest exercise, and there are a lot of boxes, but it is important to understand the dynamic of the P&L. As you know, we had to face in this year 2024 some exogenous factors. You can see two of them in the first two brown blocks in the graph: a decrease of volumes coming mostly from soft consumption in China and a continued inflation, notably on rents and salaries. We implemented an action plan to mitigate those impacts, thanks to our tight management of gross margin, which remained at a high level and even progressed. Thanks to our action plans and cost optimizations linked to operating costs, including store costs, notably from closures and indirect purchases, we managed to compensate to a large extent those external factors, as you can see from the bar in the middle. Despite all those efforts, we were exposed to some other adverse impacts. Some are one-offs and will not affect 2025 P&L, in particular restructuring costs, especially in China. Others are the result of specific market conditions, such as the relative outperformance of channels with variable costs, corners and e-corners, which resulted in higher expenses. For those impacts, it was not possible to compensate. This is how we get to an Adjusted EBIT of EUR 53 million. If we move on to slide 21, you can see the evolution of the rest of net results versus 2023. The significant variances are from EBIT, but we just talked about it. And also non-recurring expenses, but you can see that the biggest part was booked in H1. H2 brought only minor changes. The total amount of those non-recurring expenses for the year is nearly 100% explained by non-cash impairments. The biggest part was on goodwill for EUR 22 million on Claudie Pierlot brand booked in H1, plus some stores impairments, notably in China. As far as other lines are concerned, the increase of financial expenses is mostly explained by a level of market interest rates and spreads, which remain quite high throughout the year. But to be noted that interest expenses started to decrease in H2. More generally, you can notice a strong improvement of net results in H2 compared to H1, starting from EBIT, which is nearly twice as big in the second semester compared to the first one, and leading to a positive net result in H2 at EUR 4 million published, and even EUR 8 million excluding impairments with no cash impacts. On page 22 now, let's talk about balance sheet and cash in more detail. We are very happy with our free cash flow generation in 2024, especially in the second semester at EUR 58 million, leading to a full year generation of EUR 49 million, supported by a strict control of costs, inventories, and CapEx. All our actions to manage the evolution of the key drivers of cash are bearing fruit. On the bottom of the page, you can see that the decrease of inventories contributed to an improvement of EUR 22 million, sorry, and CapEx reduction contributed to EUR 15 million improvement. Page 23, the exact mirror of the previous page, the EUR 49 million free cash flow generation results logically in a decrease of net debt by the same amount, leading to a level of debt at EUR 237 million at the end of the year. It's a very material reduction, a sound one, since you can see in the detail on the right that we have reduced our gross debt while maintaining the exact same level of cash equivalent, meaning that the cash we generated enabled us to meet debt reimbursements. Finally, debt to EBITDA ratio remains nearly stable compared to 2023, which shows that we fully managed to compensate the reduction of EBITDA thanks to a reduction of net debt. Isabelle, I leave it to you to conclude. Thank you, Patricia. A few words of conclusion. 2024 has been definitely a transitional year for us. While we've faced some short-term challenges, we're encouraged by the strong decrease of debt that we have achieved thanks to robust cash protection measures. Sales have proven resilient, with quarter-over-quarter improvements reflecting the strength and desirability of our brands. We've also launched a series of action plans that are already well underway. These initiatives drove short-term cost in EBIT, obviously, but we remain confident that these efforts will deliver growing benefits in 2025, with the full effects expected to be realized in 2026. Our approach is focused on delivering long-term value, even if it means navigating some temporary expenses along the way. Looking ahead, we remain confident in the strength of our brands and in our business model, which will continue to deliver profitable growth. For 2025, we're focused on two main areas, like-for-like growth, as I mentioned earlier, and a continued push through our partners. These priorities will be critical in driving our success in the near term and supporting our trajectory towards our midterm goals. While it's very difficult to commit on the level of sales for 2025, given the geopolitical and economic uncertainty, we reaffirm our midterm targets of Adjusted EBIT margins of circa 10% and free cash flow generation of EUR 50 million. We're confident to achieve the circa 10% Adjusted EBIT margin in the second half of 2026, with an improvement in 2025 and an acceleration in 2026. Our current level of cash generation shows that we can be confident also on the target of EUR 50 million free cash flow in 2026. So to put it short, 2025 is on the path of 2026 ambitious. In conclusion, we're confident in the resilience of our business. Our strategic initiatives are progressing well, and we are positioned to meet our goals. We thank you for your attention. Just one point. We'll now take your question, obviously, but before, I'll give you a quick update on the legal proceedings in Singapore, because I know some of you might raise the question between GLAS and Dynamic Treasure Group. We understand that the decision following the hearing that took place early February is expected somewhere between the end of March and early April. Thank you, Isabelle. So thank you, everyone. Thank you. So I think we can start the Q&A session now. Thank you. If you'd like to ask a question or make a contribution to today's call, please press star one on your telephone keypad. To withdraw your question, please press s tar two. You'll be advised when to ask your question. We'll pause for just a quick moment to allow everyone an opportunity to signal for questions. Maybe while people get prepared to ask some questions and don't be shy, we have the first one now. Recent questions. So there was the question on Singapore, which Isabelle has already answered. There is another one on current trading in January and February. Could you please elaborate on the trends by geographies for the beginning of the year? It's no secret that the market is not very supportive currently, nor are we, due to the uncertainty that prevails from geopolitics and from the macroeconomic situation, obviously. That being said, in this complex environment, we continue to work on the best retail execution possible. The four brands had an encouraging start of their respective spring-summer collections. From what we see in retail panels, we continue to gain market shares in France. We continue to be positive in EMEA, and we're starting a stabilization of like-for-like in China. I think that's what we can say at this stage, and that's what we can say at this stage, yes. Thank you, Isabelle. We have another question from Marie Line from Bernstein. In China, do you see any positive signs of recovery? Could you elaborate on first encouraging KPIs in China mentioned in the presentation? To answer to that, Marie Line, I would say that it's always difficult to comment on China at the beginning of the year because the timing of Chinese New Year changes every year, so you never have really very faithful comps in this time of the year. Let's say that it's in line with the last week of December. We're starting a stabilization of the like-for-like network and improvement of the like-for-like. We're now tracking it as the only relevant KPI. What is interesting is that we see that improvement month after month, and that clearly is the result of the contraction of the network. And I think we did it probably earlier than the competitors, so I think we maybe are seeing the fruits earlier than competitors. But that being said, we have closed 65 stores, so obviously, there is an impact. The few remaining stores to be closed will be still in H1, but going forward, I mean, after that final wave of closing, we will have a rational basis for like-for-like to be monitored. Thank you, Isabelle. We have another one from Marie Line. At the group level, the network optimization cash sales by EUR 16 million in 2024 should be the same magnitude in 2025? Yes, slightly. I think we can assume that this figure is a good proxy of the impact in 2025. There is another question from Marie Line about the impact of tariffs on the business in the USA. There is everyday news on that part. I can answer for the time being on the Chinese tariffs to start with. It's something that we had anticipated even before the results of the election. So I would say that it won't have a big impact on 25 because we have already a big part of the spring-summer collection ready and a big part of the fall-winter collection that has been already in the process. We have only part of our production in China, and so we've been monitoring the situation both by negotiating with our main suppliers in China to mitigate that risk by a few price adjustments if needed. So somehow, it's a risk that we really have mitigated, and that should be very limited. Thank you, Isabelle. We have another one. So what is the precise amount of restructuring one-off costs in 2024 factors in your OpEx? Well, Marie Line, on this one, if you go back to the slide with the bridge, you will see that the bar with the total one-off impact is about EUR 10 million. I would say that EUR 4 million-EUR 5 million is the restructuring amount in OpEx, and the rest is mostly in D&A. Thank you, Patricia. We have another one on stock. So how did you manage to reduce your stock in 2024? I would say that there are different ways of strict control of the level of stock. You have the work that has been done on the old collection, so we've been able to deplete some of our old collection, whether it was in China or in other geographies. But for the rest, for the present, for the ongoing collection, I think it's a global work that has been done by the brands, by the production, the supply chain team about better monitoring of the forecast, better demand planning, better clustering of our stores to make sure that we have the right level of merchandise in the right place at the right price in the right store. And I would say that this global and collective work has paid off and is showing today in our ability really to monitor our level of inventory. I know it's usually a big concern of the financial community, and we can now prove with that result that we've been really able to manage it in a very careful way. Thank you, Isabelle. There is a second part of the question or link, even though it's asked by someone else. So how can we expect an improvement of the working capital in 2025? i.e., can we still improve inventory? Florent, I would say that we are already at a level of inventory which we consider quite satisfactory on a worldwide basis. I would say that we will try to optimize in some areas or some brands, but it will be more optimization rather than a significant decrease. So we don't expect the same decrease at all compared to 2024, much more an optimization of the inventory, just like we are trying to achieve every year. Thank you, Patricia. We have another one on partners. What are your ambitions for 2025? Do you plan to open new countries through partnerships? Just to make it clear for everyone, partners is meaning it's a company that we work with in certain geographies where we don't want to operate directly. The most important ones are Korea, the Middle East, Mexico, for instance. To get this activity, the partners, it's an activity that we want to strengthen because we think we have some untapped potential in a lot of geographies. The partner sales gained circa one point in 2024, reaching 9% of our total sales. Sales continue to grow in 25, driven by Sandro and Maje, for whom we have really a lot of interest and interesting developments in the Middle East, Saudi Arabia, for instance, in the Balkans, in India, where we opened our first two stores in January, Southeast Asia, and soon South America. In that wholesale sales line, we also aggregate some off-price depletion sales, and those will probably decrease this year because it's also the mirror of our good control of our inventory level and the qualitative aspects of our inventory. We think that this decrease of off-price sales will be compensated by pure wholesale activities with partners that I mentioned earlier that are more contributive and showing the strength of our brands on new territories. The smaller brands are also benefiting from that, but of course, in a more marginal way. Thank you, Isabelle. We have another one on the network. Can you give us more details on the closings by area? I will take it. About the store network evolution, to recap a little bit, we have a -68 units for 2024, which is a -18 in directly operated stores and a +12 in partners. Partners, Isabelle just talked about this way of operating in some countries. Regarding the overall network, the bulk was, of course, in China, 65 out of 68 net closures, mostly for Sandro and Maje, a few also for Claudie Pierlot. The rest of the closures were mostly at Claudie Pierlot in Europe, about 15 stores. And for the rest of the directly operated network, it's, let's say, roughly stable with a few pluses in America and a few minuses in Europe. Thank you, Patricia. We have another one. So it's from [Florent]. It seems that you are now more cautious about the 10% EBIT margin target, which is now expected in H2 2026 instead of 2026 previously. Is there any specific reason for this increased caution regarding margin improvement? Well, I can take this one as well. [Florent], I would say it's prudence rather than cautiousness to introduce a little bit of subtle nuance between the two words. I think we come from a year 2024, which has been subject to many, many exogenous factors, and Isabelle introduced about that. 2025 is also quite uncertain, so we prefer to be prudent. The target does not change at all, and I hope you will recognize that this nuance in H2 is quite subtle as well. So we don't change our target. We just precise it, but it's the goal we want to achieve, and we reaffirm it the same way we reaffirm the goal to do a EUR 50 million free cash flow per year. And this one, we are pretty confident to do it for the whole year 2026. Thank you, Patricia. So I think we are done with the questions now, so we wish you a good evening, and we thank you for your attention. Thank you. Thank you. Thank you for joining today's call. You. You.