Welcome, and thank you for joining the Intercos Group Full Year 2024 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Renato Semerari, Chief Executive Officer of Intercos Group. Please go ahead, sir. Thank you very much. Good evening, everyone. I'm glad to say that Fiscal 2024, which had such a rough start due to the cyber attack of February 2024, has ended in a strong way, with quarter four confirming our double-digit pace for the third quarter in a row. This allowed us to cross the bar of EUR 1 billion for the first time. Let me start by summarizing our key results. In terms of net sales, we closed at EUR 1.65 billion, which is a + 8% growth over a year ago, confirming our capacity to grow faster than market, almost twice the pace of the market. The second point which I would like to underline is our performance in Asia. We've been growing in the fiscal by + 24%, with both China and Korea performing at exceptional rates, + 28% and + 31%, respectively, which you would recognize is quite an exception in our industry this year. Third, our EBITDA landed at EUR 143 million, + 4% versus a year ago, with a margin on value-added sales, so without the cost of packaging, gaining 13 basis points versus a year ago, despite the fact that in quarter one we had a very rough start with EBITDA - 30 versus the previous year. In the second semester of the year, our EBITDA margin on value-added sales gained 90 basis points. Fourth, our adjusted net income ended at EUR 57 million, overall in line with a year ago due to a favorable tax mix by country. Fifth, the net debt was below EUR 100 million, further reducing our leverage to 0.68 of our adjusted EBITDA. Excluding the debt related to IFRS 16 accounting principle, our real debt is at EUR 55 million. Sixth point, we will propose to our shareholder assembly the distribution of EUR 19 million in dividends, equal to about 39% of our consolidated net profit. Let's now go deeper into the results, turning page. I would like to underline the business trend by quarter. The first point that I would like to underline is the fact that we had double-digit growth in both top and bottom line since quarter one. Quarter one, as I said, was a rough start. From there on, we've been growing double-digit in both top and bottom line. Second point, which I think is important to underline, is that the sales pace accelerated throughout the year, quarter after quarter. We've been gaining traction, ending the fourth quarter with a 14.5% growth over a year ago. The third point is that if we look at the growth pace of EBITDA in the nine months, it has been growing slightly faster than our top line. By now, you've seen our quarter four posted at + 14%, both in terms of top line and adjusted EBITDA. It is worth underlining the difference in marginality between the EBITDA on sales and the EBITDA on value-added sales. As you can see, in the year, we have a contraction of our EBITDA on net sales. Conversely, when we look at it on value-added sales, as I said, we have 13 basis points of gain, thanks to the second semester where we recorded this 90 basis points improvement in marginality on value-added sales. This gives you a clue, an immediate clue on the entity of shift towards full service, so sales that include packaging in our business, which creates a significant variability in our overall marginality. Let's now look at sales by business units. The fourth quarter was led by double-digit growth of both air and body and makeup, while skin suffered due to high comps of the year ago. Going more in detail, makeup, which represented at the end of the year 58% of our total sales, grew 13.4% in the quarter, thanks to the strong performance of Asian and European clients, both multinational and emerging brands, with also prestige clients showing significant expansion. This allowed makeup to end the year slightly positive, a + 3%, despite the big drop of the beginning of the year due to the cyber attack. In terms of skincare, which represented 16% of our total turnover, the fourth quarter was negative by EUR 6 million, bearing in mind that last year, the fourth quarter for skincare saw an increase of 40%, so very high comps for this business unit in the last quarter of the year. In the fiscal, skincare grew by 6%, mostly driven by local Asian brands. Last but not least, air and body, representing 26% of our total turnover, grew also in the fourth quarter at a very fast pace, + 39%, thanks again to the traction of the fragrance segment and also deodorants, and ended the fiscal at + 20%. Second year in a row where we see air and body growing at a very, very fast pace. Looking at the sales results by region, the fourth quarter was pushed by Asia and European, actually EMEA, double-digit progression, with America turning to a slight positive result. This brought us to close the year with Asia and EMEA at double-digit rates. Looking one by one every region, EMEA represented 52% of our sales, increased by 23% in the fourth quarter, and this was thanks to both multinationals in makeup and emerging brands in air and body, and ended the year at + 10%, a very strong performance in the European market. America's 28% of our sales has been the difficult area for us this year. It closed the quarter at +2%, mainly thanks to multinationals in makeup, and the year ended at 9.6%, paying a heavy toll for the cyber attack, which affected especially this region, but also a market that has been slightly declining in volume since 18 months now. Asia, 20% of our sales, scored once more in the fourth quarter a double-digit increase of +13%, and ended the year at +24%, mostly thanks to local clients, despite the fact that throughout the year, the China market, as you well know, has been slightly declining. Last, let's see sales by customer cluster. Emerging brands have been the engine of growth since years, but in the fourth quarter, I'm glad to say that also multinationals had a comeback, while retailers kept struggling throughout the year, including the fourth quarter. The fiscal at the end was exclusively led by emerging brands, with multinationals flat and retailers down. Looking at them a bit more in detail, multinationals represented 45% of our sales for the first time, clearly below the weight of emerging brands. In the quarter, multinationals grew 7%, and this allowed us to close the fiscal more or less in line with the previous year. Emerging brands represented 48% of our sales, and yet another strong quarter growing 28%, and this allowed us to increase by almost EUR 100 million in the year versus the previous year, with a growth of 24%. Retailers was down once more double-digit. This was, in a large proportion, driven by the difficulties, the financial difficulties of one client that was very important till 2023, and we saw a decline of 11% in the fourth quarter, which led to a total year of 18%. This part of the business is shrinking over time and now represents only 7% of our total sales. I now pass the mic to Stefano, our CFO, to go deeper into our financial results. Good evening. Thank you, Renato. Good evening, everybody. Just a few charts to draw your attention on some financial highlights, summarizing the main results in 2024. After looking at the P&L, after a double-digit growth in 2023 that was + 20%, in 2024, the company continued its expansion path, recording an equally significant revenue growth of around 8%, a growth that doubled the market growth rate. Intercos then reached a new sales record, surpassing the EUR 1 billion mark, also thanks to the strong performance of our Asian subsidiaries in China and Korea, as we have already discussed and presented by Renato. Regarding the EBITDA, the revenue growth in sales translated into an EBITDA increase of over 4%, reaching EUR 143.3 million adjusted, whereas the reporting number is EUR 133.8 million, and the EBITDA adjusted is equal to 13.5% of the group's net revenue, rising to 17.5% when compared to the value-added sales, which better reflects the added value generated by sales. For a clearer evaluation of the EBITDA results, it is important to highlight the specific dynamics it experienced throughout the year. As commented early in this call, after the first quarter, in which the company saw a negative trend compared to the previous year, it was - 30% due to reasons unrelated to normal operational management. The next three quarters showed a double-digit growth, allowing the company to recover most of what was lost earlier. Aside from the impact of the cyber attack, the EBITDA margin was slightly lower than the previous year by 45 basis points, partly due to the increased share of packaging in the revenue mix that customers requested our company to manage, and due to a significant increase in the business from the air and body business unit, which in any case contributed very positively to the creation of corporate profits. Coming to the net income, during 2024, the company revised its financial structure by renegotiating some trading lines to secure the necessary liquidity for its ongoing investment program. As a consequence, the financial management generated net financial expenses for about EUR 7.9 million, with an average financial debt of EUR 128 million. Given then a group tax rate of 32%, the final net income result was EUR 56.7 million after adjustment for some extraordinary income components of EUR 7.9 million. Coming to the EBITDA flow by business, results by business unit, we see here positive performances for the skincare, + 6%, mainly driven by the performance of local brands in Asia and the contribution of multinationals in the US. The performance of air and body business unit, + 25%, was also very positive, continuing to benefit from the strong performance in the fragrance market and the personal care, mainly deodorant. The adjusted EBITDA of the makeup business unit stood at EUR 83 million, slightly lower compared to last year. It is worth noting that the makeup division was the most affected by the cyber attack, largely recovering in the second half of the year, as mentioned, which caused significant operational efficiency, now resolved. As for the lower profitability, it was mainly due to the higher share of full service revenue model compared to the pre-issue revenue model. Let's have a look then at the cash flow and the net debt. The positive economic dynamics just mentioned translated into an operating cash flow of EUR 57.1 million after capital expenditure of EUR 65.1 million, which has shown an increase of EUR 10 million compared to 2023 due to the expansion project at the production plants in China and Korea. We see also positive changes in the net working capital of EUR 1.7 million. To note that the components of the trade working capital show the improved turnover ratio compared to the last year, with ESO at 52 days and DPO at 110 days. Finally, the net cash flows stood at EUR 2.5 million after dividend distribution of EUR 18 million, positively contributing to the net financial position, which ended the year at EUR 55.1 million before the effect of IFRS 16, where the latter, with an impact of EUR 42.6 million, brings the total net debt to EUR 97.7 million. To conclude, it is worth noting that the leverage ratio of 0.68 times EBITDA was lower than the figure recorded at the end of 2023, which was 0.73, despite an increase in investment aimed at supporting industrial expansion plans and thus long-term revenue growth. Renato? Thank you, Stefano. Let's now look forward. First of all, let me draw a bit of a picture of the global market. In general, the global market didn't start very well in fiscal 2025. In general, China is not showing signs of pickup or recovery. The U.S. also is still showing slightly downward trends from volume retail numbers, although the last reading is actually showing the stabilization of this trend, but let's say in general is still not picking up the way we would like it to see it. Europe, which has been the most resilient region across 2024, has moved from the beginning of 2024 from double-digit numbers to low single-digit growth rates. In general, the market is not at its best. We think that the second semester will be better, but the beginning of the year clearly doesn't show any drumbeat, let's say. On top of that, you all know and we are all reading and following what is happening in the geopolitical situation and the trade wars, and also this is adding uncertainty in the market, which is certainly not helping. After I have been gloomy enough in my summary, let me say that despite all this, we remain optimistic about the future, and we do for three key reasons. The first is that we have proven the ability to beat the market trend consistently over the years, and also in 2024, we have clearly done that. Second, we know that the key clients, in general, during crisis periods tend to look for innovation even more than during the normal times because gaining market share becomes the name of the game during these periods, and also during crises, there are more, let's say, outsourcing interests in general from brands. This could lead to some nice opportunities. The third is that in terms of protection from the trade wars, we believe that having a global footprint puts us in a much better position than most of our competitors, but also most of our clients. We think that our global footprint is going to be a competitive edge in a period of trade wars. We're convinced that diversification, which has been a key strategy for the company so far, will be even more important in 2025 and even farther than that, especially the geographic diversification that I was just now mentioning. Based on all this and based on the projections we see for the market, we expect the total year for the beauty industry at +4%. Based on that and what we expect, despite the fact that since IPO, our company has grown 50%, we believe firmly that we will grow faster than the market also in 2025. As such, we are giving a guidance in terms of net sales between 5%-7% in terms of growth. Now, moving to the order intake, as you can see, the last by month, January, February showed the post a new all-time high with EUR 144 million of order entry for makeup and skincare. I remind all of you that in this, we do not have air and body, which is working on a rolling forecast basis. The other good point is to underline the fact that the driver of this growth is makeup, which, as you know, is our bread and butter. We're very happy to see makeup posting a new record in terms of order entry. This has led the rolling 12 months growth of +6% over the previous 12 months. Clearly, period after period, we are growing our average order entry, which is pretty natural because you've seen our top lines going in that direction as well. In terms of order portfolio, it's a bit of a tricky comparison here. It is a very strong portfolio. It is slightly below the one a year ago, but this is easily explained by the fact that last year, the portfolio was inflated by the month of February, where we recorded orders but did not push out sales because we were stuck with the cyber attack. It is as if we are comparing ourselves this year with a year where we had one month more in the portfolio because we could not ship what we had digested. This said, I'm also telling you that this is the last time we show you and we give visibility on the order entry for some, I think, good reasons. We are the only ones in the market doing it. By doing it, we are exposing ourselves to unnecessary competitive tensions because we are telling everybody what's coming for us. We do not see the ones of our competitors. Also, from time to time, we've been confronted with some negotiations with clients that are linked to the disclosure of our data that is not necessarily helping us in negotiating with important clients, placing important orders. I do believe that in the past four years, you've lerned, you've had the opportunity to know us better, and I hope that you have a sufficient level of trust to believe in the guidance we're giving to the market, and we hope you understand our reasoning behind this decision. That would be all on our side, and we would be ready to take your questions. Thank you. This is the COSCO Conference Operation. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Anna Frontani of Berenberg. Please go ahead. Hi, guys. Thanks for the presentation. I have, let's say, two and a half questions. The first one relates to the packaging impact on profitability. What are your expectations for 2025? If we want to put it in another way, will the incidence of full-service sales be lower in 2025 compared to 2024? The half question, which is sort of related to the first one. If I'm not wrong, the ENG contract should sort of change at the end of 2025. If this is the case, what kind of impact are you anticipating? Probably lower contribution to sales, but better profitability. The last question, Renato, you touched it during the presentation on the outsourcing trends. In 2024, we've seen Estée Lauder transitioning to use some of their production of cosmetic powders that they were producing internally. Have you seen this happening with other clients? Generally, how is the outsourcing trend going? Thank you. Anna, thank you very much for your questions. First of all, what is going to be the trend in terms of packaging, full service, and all that? It is very difficult to predict. I must say that I am not expecting good news in the sense that I think that there will be stability in terms of split of sales because, in reality, the clients that gained traction in the past two years are using that business model, and I do not see major changes to that, with the exception of Dolce & Gabbana that starts—I am bridging to your second question—that starts buying some components on its own. It is moving from a, let's say, complete full-service model to a hybrid system where they buy certain components and ask us to buy the remainder still. That will probably have a slightly positive impact, but it's not that massive to show a big difference in the total numbers on a yearly basis, to be honest. Coming to the last point, are we seeing outsourcing opportunities? Yes. There is nothing that is closed, let's say. There are lots of discussions. There are clients that are at different stages of their reflection of what to do next and whether to move with a certain type of outsourcing. No one is kicking tires to go full blast into outsourcing, but by segment, yes, there are interests. There are a couple we are actively working with, but we do not know yet whether they will end up taking that decision or not. It's a bit soon to assess, but it's interesting to see that the move of Estée Lauder has triggered curiosity on the topic, and there are others that are analyzing the opportunity. Thank you very much. Thank you, Anna. The next question is from Tilly Eno of Morgan Stanley. Please go ahead. Hi, good evening. Thanks for taking my question. I just had two. The first one is you mentioned in makeup that sales to prestige customers were up significantly. Could you just clarify, does that refer to Q4 specifically, or is it just sort of a normalization of lapping last year's prestige destocking? Otherwise, what is driving that? The second point, just on the expansion of your plants in South Korea and China, could you just update us on the impact of increased capacity? Is there any near-term impact on profitability that you would expect as you ramp up scale within those plants? Thanks very much. Tilly, thank you for your questions. The expansion we've seen in makeup from prestige clients, it's certainly a bit of a mix of the two. We have seen an expansion of business with prestige clients. Obviously, the fact that the base was not at its very best helped also in percentage terms. As you've seen from the order entry, there is fraction in this moment for us in makeup. In general, the trend is good, and we hope it's going to continue. It's coming from different parts. It's both European, American, prestige clients, and it is related to, in a good chunk, it's related to foundations, to the complexion category, where I had announced to you—I don't know whether you have that long memory because you see a lot of different companies—but I told you that we were putting a significant effort in R&D, especially in Korea, to develop new formulations. We are now harvesting the fruits of this effort. It is coming from that, and it is both related to Asian assortments for products like cushion and more, let's say, global product forms in the foundation category. It is a good pace. I hope it is going to continue, and you can bet on the fact that we will continue pushing in that direction. Korea and China plant expansion, there will be, obviously, from the increased capacity, there could be a slight impact, but it is going to be negligible in the global scheme of things. First of all, because having more square meters does not mean that we are going to keep and hire people and move all that kind of things. That will be done progressively when we get the orders to be produced. There will be a bit more heating because it is a larger surface and lighting, probably, but it is not going to be a massive cost increase. You can trust us that the cost increase will be going hand in hand with the sales increase that are needed for those plants. If there is a slight extra cost related to those plants, it should be offset by many other productivity projects we are working on. I hope I answered your questions, Tilly. Yes, great. Thank you very much. The next question is from Kate Rusanova of UBS. Please go ahead. Good evening, Renato, Stefano, and Andrea. My first question relates to your growth outlook for the year. I appreciate the beauty market is slowing this year, but given the easy basis of comparison in Q1 and the fact that many brand owners are signaling a clear pickup in their innovation rate this year, I was surprised not to see the upper end of your guidance being at 8%, which I think is where the consensus currently stands. Can you maybe explain the relative caution for the year? Is it mainly due to the lack of visibility in the second half of the year? My second question is related to your margin guidance. It would be great if you can explain some of the key moving parts that will shape your margin performance this year, and I guess on which of these moving parts you do not have good visibility right now. I appreciate you already talked about the packaging contribution, but maybe you can provide some context to the 90 basis points of expansion on value-added sales margin in H2. Lastly, on the contraction of your skincare business in Q4, I understand the comparison was tough, but then your order intake in recent months is also lower versus last year. It would be helpful if you can update us on your market share progression in this business and any other factors that we need to be aware of for 2025. Thank you. Thank you, Kate. Let's start from your first question about the outlook. As I said, the entry point, which is the data points we have today, are not so encouraging in terms of market trends. We hope second semester will be better, but who knows? To be honest, the one thing that worries me the most is the short-term impact and the volatility of the market that may be triggered by schizophrenic U.S. political behavior. Sorry, I'm not masking too much that I'm not a big Trump fan, but the way he started his administration, it's not leading to an easy way to manage business, especially for industrial companies like us. We need to be cautious because the environment, it's what it is. It is true that we have a first quarter that has easy comps. It is also true that it's the smallest quarter in every single year. Unfortunately, it's not an easy comp on an important quarter. It's true that we've had the second semester of this year was yet another very, very strong quarter. I would be very happy to be wrong once more, and I would be very happy to be able to push, in the course of the year, the guidance a bit up, but we need to be transparent and honest in what we think is realistic at this point in time in terms of growth. Again, please remember that since we listed the company, which is three years ago. Yeah, end of 2021. Yeah, we've been growing 50%, so way above any market rate. I said it at the end of 2023 that we should be expecting a few years of growth, but more moderate growth. We cannot think that we're growing super fast every single year. There must be some consolidation at certain points in time. Now, if the upper end of our range is seven and eight or eight, frankly speaking, I have no clue and there isn't such a difference. The moment we see that the horizon gets clearer and we have better visibility, we'll update everyone on what we think is becoming possible. Margin performance, the key trigger here is, and you've seen it in the course of the past year, the mix plays a super important role. In 2024, we had a strong year in terms of productivity projects. Aside from quarter one, which was a complete mess, we did super well from that point of view, but the mix has been a major factor so far. I think that we have yet another list of projects in terms of productivity that will certainly bring benefits, and I'm ready to bet on them. What I cannot bet on is the mix. I hope it's going to turn more in favor of us, but this is something that it's a bit too early to say. Last point you raised is on skincare. You're absolutely right. We have kind of flattened a bit out in terms of trend, and order entry shows it a little bit. Again, skincare, we've been coming from many years of growth, including 2020. Skincare was the only business unit that displayed growth of 8%, if I remember correctly. Here, what we are seeing is Asia is continuing to be a strong region for our skincare. We have a bit flattened our trends in the western part of the world. To really make significant moves in terms of market share in skincare, I think that we need to solve our never-ending U.S. dilemma. We need to have a plant in the U.S. to go grab the business that is there coming from emerging brands in skincare. I expect 2025 to continue seeing growth of skincare, so I expect an acceleration in the coming months. It is true that we had a moment of pause in the western part of the world with our skincare, and we need to reignite a bit of energy there. Thank you very much, Renato. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Thank you very much. Thank you, everybody. Have a good evening. Thank you. Thank you. Goodbye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.