Good afternoon, this is the conference operator. Welcome, and thank you for joining the FILA Full Year 2024 Results Web Call. All participants are in listen-only mode, and after the presentation, there will be a Q&A session. For operator assistance via web call, please press the headset icon on the bottom left side of your screen. Via telephone, press zero star zero. Today's conference call is hosted by Mr. Massimo Candela, Chief Executive Officer; Mr. Luca Pelosin, COO; and Cristian Nicoletti, CFO. Mr. Nicoletti, please go ahead. Good afternoon, everyone. I am Cristian Nicoletti, CFO of FILA Group, and we are very satisfied with our results for 2024. Core sales coming at EUR 612.6 million, less 2.8% on organic base. The decrease in revenues was largely due to one-off factor: the implementation of SAP EWM in North America and unfavorable currency effects in South America, coupled with macroeconomic drops in the last part of the year. One more positive note: Europe performed well through the year, coming back to growth. EBITDA increased to EUR 180 million in financial year 2024, plus 7.2% versus 2023 level, with an impressive acceleration of 41.5% in Q4 alone. The performance is the result of continued focus on industrial efficiency and optimization of our product mix. Group reported net profit at EUR 81.8 million in financial year 2024, which includes DOM placement and significant decline in financial expenses. Adjusted net profit grew by 32.3% versus 2023 level to EUR 40.9 million. Free cash flow to equity was particularly strong, reaching EUR 16 million, which is EUR 8 million higher than in financial year 2023 and well above our expectations. The net financial position at EUR 181.1 million at the end of 2024, with EUR 122.3 million net reduction versus financial year 2023, despite EUR 36.5 million of dividends in 2024, thanks to the strong cash flow generation and disposal of stake in DOMS. Net bank debt EUR 124.5 million in financial year 2024 versus EUR 229.5 million in Financial Year 2023. The board proposed to distribute EUR 40.9 million ordinary dividend with higher payout compared to the guidance, thanks to the strong free cash flow and asset placement of 4.57% stake in DOMS. We are confirming our guidance for 2025, with expected low to middle single-digit revenue growth, mid-single-digit adjusted EBITDA growth, assuming constant currency and tariff, and free cash flow to equity between EUR 40 million and EUR 50 million range. Our dividend payout ratio will remain in the range of 20% and 40%. These slides provide a visual summary of our financial performance for the year. I want to highlight a few key points. Core business is at EUR 612.6 million, negative 2.8% on organic base. As already mentioned, on organic base decreased revenue, mainly due to SAP EWM rollout. The impact on foreign exchange fluctuation was negative by a few percentage points, mainly due to the devaluation in Argentina pesos and Turkish lira. EBITDA increased to EUR 180 million in financial year 2024, plus 77.2% versus 2023 level. Please note the EBITDA margin jumped from 17.1% in 2023 to 19.3% in 2024, more than two percentage points to current results. Group net profit at EUR 81.8 million financial year 2024. These results clearly include the economic benefits from disposal of 4.75% in DOMS. Adjusted net profit grew to EUR 40.9 million in 2024 from EUR 30.9 million in 2023, an increase of more than 10% to 30%. Related to the NFP, we highlighted a decrease of EUR 122.3 million after EUR 36.5 million as dividend. Free cash flow to equity at EUR 67.7 million, and cash in from DOMS EUR 80.7 million. The core businesses in the last five years show an increase of 1.9% and adjusted EBITDA of plus 3.2%, more than proportional, and free cash flow to equity over EUR 240 million as cumulative free cash flow to equity. We are available for any questions about the results of FILA 2024. Thank you. We will now begin the question and answer session. To enter the queue for questions, please click on the Q&A icon on the left side of your screen and then press the raise your hand button. Please do not mute your microphone locally and make sure you turn on your webcam in the pop-up window. Via telephone, press star and one for questions. The first question is from Niccolò Storer, Kepler Cheuvreux. Please go ahead. [Foreign language] [Foreign language] Hello, hello, hello, hello. hello. Two questions for now. The first one is if you can comment on your evolution of North American and European sales in Q4. Apparently both regions have deteriorated sequentially. Europe probably moved into the negative territory. So what has driven such a deceleration and what is the entry speed into 2025 that you have been experiencing? The second question is on tariffs. You basically confirmed your guidance at same tariffs, but in reality we know that tariffs from US, China to sorry, from Mexico and China to the US are already a reality. So what's the situation, what's your exposure, and what is the EBITDA at risk here? Thank you. Hello Niccolò, thanks for your questions. We don't have particular comments on the sales of Q4 because I think, in particular in North America, when you have election period, you have always a kind of instability. Everybody was waiting the results, the consequences. So I think that after the good first three quarters, we simply have not pushed farther for a better year, and everybody was more interested in what was happening in 2025. We know that we have such important customers that their decisions on stocking and destocking can have a huge impact. In the fourth quarter, I would say it was a kind of a neutral year. The first quarter 25, we can anticipate to you that we are going to have a very positive first quarter, but in total transparency, we have to neutralize the effect of last year. If you probably recall, in March 2024, we had the implementation of the new warehouse management, so new software. We had six weeks' problems, so from the first week of March until the second week of April. We already see that our first quarter will be very strong, but for the moment, we can comment that the year is looking like our expectations. Concerning the questions, and the same, by the way, for Europe. Concerning the tariffs, first of all, I cannot agree with your comment. When you say that Mexico and Canada, the tariffs are already in place, I do not agree. Frankly speaking, my personal opinion is that tariffs with Mexico and Canada will not be confirmed, but this is just personal. In turn, we have confirmed the guidance so far for two reasons. Number one, as I mentioned several times, we have a very complex supply chain, and we always said that this was a strong competitive advantage from FILA. That cost, by the way, but give us a certain kind of flexibility. We do confirm that we will be ready in a few months as soon as we will understand the final strategy of the new president. We will be ready to adjust our cost structure so we do not expect really negative consequences or just minor. In terms of 2025, we have confirmed the guidance because you probably remember that we have an important seasonality. As of the 2nd of April, the majority of our products are already in-house. Really, the impact on 2025 will be minor and probably only after August when we will have the replenishment. That's the reason why for the moment we feel confident that we will not have an impact on our margins. Different is that if we see some initial signs of weakness of the US economy, if this will be confirmed, I would rather see a weak last quarter for 2025 while we have already good visibility on the second and third quarter that are the most important. This quarter confirms our positive view. The back to school is looking positive for 2025. Thank you. Maybe a very quick follow-up. When you say that you're ready to adjust your cost structure in a few months, it means that you are basically moving production out of Mexico to India. That is one option, of course, not the only option. Please remember that Mr. Trump is talking of proportional tariffs. I think he's still questioning also the tariffs that are in place in India against US goods, while, for example, in Mexico, there are no tariffs against US goods and the same for Canada. I repeat that India is our first option. By the way, the company is growing and is supporting us more and more. It will become the most important hub we have worldwide. But I repeat, I don't think that with Mexico and Canada we will experience tariffs. Okay, okay. Perfect. Thank you. The next question is from Alessandro Cecchini, Equita. Please go ahead. Hello everybody, and thank you for taking my questions. The first one, actually, it's on financial charges. You had very, very good work on this. At, I mean, P&L level, we can say that we had EUR 26 million of financial charges while at cash flow EUR 23 million, including the IFRS 16 cash out. Given your leverage, that is very good. Can you provide maybe a sort of indication for net financial charges reduction in 2025? This is my first question. My second question is instead about still India. First of all, I would like to better understand how much was the sourcing from India on total group sales in 2024. I mean, out of EUR 600 million of sales, how much coming from India? What are your expectations, the ramp-up in 2025? It's not about this, but it's strictly related to the fact that when you expect to start to sell DOMS products in Europe to increase your offer. Instead, my third question is instead still about free cash flow. You were very successful in reducing net working capital sales below 40%. I would like that was a target that some years ago probably was something very difficult to reach, but you were able to do that. I would like to understand if this is something that you can continue to do over the next two years. Finally, it's just a technical question. You had the D&A that in the last quarter was minus $15 million versus a rate of $10 million in the third quarters, first third quarters of the year. I would like to understand if you had some special extraordinary write-down, etc., just to understand this pickup in the fourth quarter. Thank you. [Foreign language] thanks for your question. If I propose to analyze, my hands were using the cash flow at page 11. Hello? No, just a moment because we are not. Okay. The 2024, we analyze the free cash flow to equity over the performance of the last year. As you analyze it correctly, we have a positive cash generation in working capital. Our expectation for 2025 is a stable generation in working capital, considering that FILA at the moment is in a reorganization phase. Relating to net financial expenses, we have a decline of EUR 8.3 million for interest related to our senior facility agreement. It's a great result. I confirm that at the end of 2024, FILA has no external credit line. At the moment, FILA is using all proceeds received by the placement of DOMS to work to efficiency of our working capital and in some cases to have a positive cash flow for interest for these proceeds. Our attention for 2025 is to continue this trend. Our expectation is a further decline of between EUR 3 and EUR 5 million of euro interest lower than the results of 2024. With regards to India, we repeated many times, India, we have many opportunities from this very big hub. At the moment, we are not sourcing too much from DOMS. Let's say we are approximately at 5% of our costs. The ramp-up for the future is related to your second question. I mean, DOMS introduction in the country covered by FILA Group. We are introducing the selected DOMS product line in Europe during this year. We are preparing everything for the US for 2026. We expect sales for the current year not to be relevant because the timing of the customer selection is normally between May and September at the latest for the following year. So we expect much stronger sales next year. Clearly, the volume we purchase from is related also to how much we will be able to sell for DOMS product, in addition to other production relocations that are still ongoing and on pipeline. I do confirm our target is to reach step by step the purchases from DOMS and the value also related to our commercial success in DOMS introduction. With regards to working capital, we have been working very well. I believe this is my opinion during the last two years, despite all the challenges. Indeed, if you consider in 2024, we improved the working capital despite sales have been down compared to 2023. There are other actions to do better, but at the same time, due to DOMS introduction and the planned entrance in other minor markets, there will be working capital and inventories which will be needed to boost the sales in the projects we are developing. So all in all, plus and minus, our expectation is to have a stable working capital. Alessandro, can you repeat the fourth question because we did not get it? Yes, of course. It was on the depreciation and amortization that for the full year was $45 million. So basically, the fourth quarter, we had $50 million D&A, rather important pickup versus minus $10 million roughly during the first three quarters. So just to understand if you had special extraordinaries on write-down, etc., just to account these and to consider to better analyze, estimate what could be the number for regular numbers. Thank you. Yes. In the last quarter of 2024, we have an extraordinary write-off due to some intangible assets for more or less EUR 4 million. EUR 4 million. More or less, yes. Okay. You will have all the pieces about the nature of them in our financial statement that will be published at the end of next week. Okay. Thank you. And finally, more strategic, if I may, on capital allocation, you are paying some extraordinary dividend thanks to the very good free cash flow and cashing from India. I would like to understand if you think that you can in the future also consider something regarding buyback more evident than, of course, the 1% that you have in the price of the capital. And maybe what is the M&A market at the moment if you see something in the merger market, something that you can add to your portfolio to increase maybe exposure to fast-growing markets and so on. Thank you. Alessandro, if you read the different press, we have given now an indication on dividend policy. We have given an indication also of buyback, which means that it's not one or the other, but it's going to be both. Thanks to the fast deleverage, I think FILA, it's a little bit in the features of our business. One day, we start looking again into M&A opportunities. I don't think nothing will happen in short term because, as I mentioned several times, today, the price expectation of the sellers are not realistic. I would like to add that there is too much uncertainty related to tariff strategy in the United States that for us counts 55% of the global revenues. I think that M&A will come back to be a priority immediately after our leverage will go towards zero, and we will have more clear idea on the tariff strategy. What is important is that if we go back three years ago when we had our business plan and we gave as a priority the deleverage, we can fortunately say that we are even in advance versus our projections. The company is continuing targeting a strong deleverage in order to be ready to take the opportunities that in two, three years will come, for sure will come. The business is definitely too fragmented. And for sure, there will be important opportunities in the future three, five years. Okay. Many thanks to all. Thank you. The next question is a follow-up from Niccolò Storer, Kepler Cheuvreux. Please go ahead. Hello. Thank you. Quickly on DOMS governance. I read some documents from DOMS with some details on your shareholders' agreement. It seems that you do not need to remain necessarily at the current level to name the chairman of the company. Also, if we look at other rights, such as being entitled to an affirmative vote on certain matters, you need just 20% and not 25% of the capital. So my question is, do you think that with this in mind, it's possible to imagine FILA further lowering its stake in DOMS towards 20%? Thank you. Thanks, Niccolò. First of all, let me highlight that we have 26.1% and not 25%. Today, 1% of DOMS is more than $20 million. So I do not forget one. Second, you are right. The shareholder agreement will be completely published after the shareholder meeting in May because it's an Indian law that the shareholder agreement has to be approved by the board and immediately after by the shareholders. So we started to publish the main contents because the board has given its approval. I do confirm that the relevant participation is 20% and not 26.1%. I will be nominated Chairman of the company. So theoretically, we have the possibility to dispose of this 6%. Practically, Practically, as you probably have seen, there is one of the important synergies we have with DOMS is that in the future, we could make synergies also in M&A. There are important targets in which they can have industrial synergies, while FILA can have commercial synergies. Until the strategy will not be completely clear, I would say in the next two, three years, I think to have a relevant percentage in DOMS can be extremely important. In the future, I think the two companies will be more and more connected. The strategy will be more and more overlapped. We will see if we want to take the opportunity to dispose of that share. For sure, the combination of FILA and DOMS in this moment represents an exception in the world market because we are in the most competitive market in the world in terms of production. A country that just recently signed a good agreement with Europe, to produce in India will be extremely efficient. Same for the United States. The United States has a very positive approach with India. Just in the last two weeks, they have substantially reduced the tariffs from the United States in cars. This will be followed by other businesses. Modi has clearly said that he does not want a trade war with the United States. The fact that we are very well established in India is definitely a competitive advantage. I think that what we have done so far, it's an important step, but there is going to be much more in the future. Only when the strategy will be clear, we can dispose of this 6%. [Foreign language] The next question is from Isacco Brambilla, Mediobanca. Please go ahead. Hi. Good afternoon, everybody. Thanks for taking my questions. I have two. The first one is on Capex, which was again quite limited this year. Should we assume a similar level in 2025? Well, last year, actually. Should we assume a similar level in 2025 or maybe some increase of some million euros compared to the EUR 13 million of 2024? Second question is on gross margin. You had a significant help to your profitability from this item. After the good results of 2024, is this incidence of COGS sustainable for this year? What are you assuming in your margin guidance for 2025 from this item? Thanks. With regards to CapEx, this year, we will recover some investments we didn't implement in the last year. So for 2025, we do expect to invest up to EUR 20 million. The majority of this CapEx are intended to improve the efficiency in combination, in some cases, to have FILA Group more sustainable, which means sustainability which is going together with efficiency, I mean, cost efficiency or cost reduction. Concerning question number two, gross margin, Isacco, first of all, you have to know that the budget of this year is by definition difficult to be completely predicted because when you invoice 55% of your turnover in North America, that has a historical level of uncertainty, it's definitely a difficult homework. At budget level, in order not to make mistakes, we have put a stable gross margin. In reality, after the 2nd of April, there are scenarios in which our supply chain can have an important competitive advantage. Just let me make an example. Today, if you make the picture of what is happening in North America, we have two times 10% from China, zero from India, zero from Mexico, and zero from Canada. So we produce in Canada, in Mexico, and in India. Our competition is in China. If the situation will remain like it is today, we are going probably to beat the budget, and we are going probably to increase gross margin. After the 2nd of April, we can be more precise. We have budgeted, I repeat, a stable gross margin because from one side, we have already imported a substantial amount of products for the Back to School 2025. And second, we have enough flexibility to move and to manage the problem that tariffs will create in order to keep our gross margin stable. I hope my answer was clear. Yes, that's very helpful. Thanks. Once again, if you wish to ask a question, please press Q&A on the left side and send your request, or press star and one on your telephone. The next question is a follow-up from Alessandro Cecchini, Equita. Please go ahead. Thank you. Talking about Mexico, I mean, you had a very, very good 2023 performance. 2024 was, I mean, maybe lower than usual. Could you better highlight the current framework in Mexico, considering that probably maybe I am wrong, but probably Mexico is imposing tariffs to Chinese products for the local market? So for you, it could be nice to have these. So just to understand what you are seeing in the market, current dynamics, and in terms of orders and Back to School, but also in terms of competitive landscape. Thank you. Thanks a lot for the question. It's very interesting because Mexico is becoming a very important portion of our cake. So far, so good. Mexico is performing well also in 2025. What you just described, so the possibility that Mexico will impose duties on China is for FILA, of course, the ideal scenario. Why is the ideal scenario? Because we almost do not have competition from the domestic market. We are a strong leader. Our competition comes exclusively from China. But here we have to make two comments. Number one is the official import, in which if Mexico establishes this 20%, definitely we are going to be in a very comfortable position. Probably we will be able to increase our margin. Second, the unofficial import, that is huge. Huge so far. I mean, this is historical. This is not now or last year. By the way, this is the main reason why Trump has threatened the tariffs with Mexico. Trump is tired of Chinese products invested in Mexico. Unofficial import in our business is a huge percentage. The positive thing is that the new president, Claudia, has promised us during a meeting with our organization, the business organization of stationery manufacturers, has promised that she will start fighting illegal imports and illegal retailers and illegal market. This is starting. It's not only a problem of the 20%, but also it's a political problem. If really Mexico starts to fight illegal imports, we are definitely in a very nice position. The next few weeks will be crucial because if Mexico finds an agreement with Trump and with Canada in order, as Claudia has mentioned, a strong unified central North American market, we are in the perfect position. Everything else, we need to see what will happen. For sure, in the first two months of 2025, our customers in Mexico have recorded this attack against illegal imports. This is helping us tremendously because they know we are very well established. We are solid. We produce in Mexico. So it's a very interesting development of the history. Hopefully, we will enjoy the situation. Okay. And in gross, your stable gross margin expectation, what is your assumption for pulp, that pulp price that so I don't know, but it's extremely volatile. But what is the context for this raw material that could be interesting for you, of course, important for you? Sorry. For sure, as of now, consumption is weak in a difficult macroeconomic situation. So if pulp is volatile because the suppliers try to speculate on the price, it's difficult they are able to sustain. But I can ask Luca what we budgeted for pulp. Luca? At the moment, we are below our budget assumptions. Despite in the last three months, indeed, suppliers have been able to raise by $50, $60 per ton each month. As Massimo said, consumption mainly in Europe is weak. So they are leveraging or better. There are still some logistic issues which are helping suppliers. Someone is closing the facility for maintenance. But as I said, we budgeted this cost increase. At the moment, we are, I cannot say well below budget, but we have still a lot of margin to close the year within our budget assumptions. Okay. Many thanks. Luckily, we use more short fibers compared to long fibers. The price pressure, luckily, is more on long fibers. Thank you. Are there any further questions? Please press Q&A on the left bar and raise your hand or press star and one on your telephone. Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks. If there are no further questions, I thank you for attending this call. I think we are going to meet soon in different opportunities and places. Thanks. Enjoy this weekend. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your devices.