Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the OVS Full Year 2022 Financial Results and Strategy Update 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. Stefano Beraldo, CEO of OVS. Please go ahead, sir. Thank you, good afternoon to everybody. Thank you for attending this conference call regarding the full year 2022 results. As usual, we have a presentation for you. I would hand the word to Francesco Leoncini to illustrate the main financial results, which has been already disclosed to you and to the market. I would like to take some time to describe the main ideas that we are working on regarding our strategic update. I hand the word to Francesco to start. Thank you, Stefano. The first chapter of this call is dedicated to comment the very good results of 2022. On page number four, you can see a snapshot of the main figures. Sales, above EUR 1.5 billion, and growing by 11% versus last year. In even higher growth, percentage-wise in terms of EBITDA from EUR 147 million last year to EUR 180 million this year, driven by the capacity of the company to keep and even slightly increase the gross margin despite the pressures on raw material costs and on supply chain in general, and by the operating leverage of the growing sales. The particularly good is a result of the Q4, with EUR 56 million EBITDA in the quarter. This leads to a net income of almost EUR 80 million, EUR 78 million, growing 75% versus 2021, and to a cash flow of EUR 64 million after having reinvested a significant portion of, let me say, the profit from the P&L into investments that set the ground for even further growth and operations improvement in the coming years. The net debt is landing at EUR 162 million. That is a leverage ratio below 1, 0.9, and would have been even better excluding from this calculation, as you will see, the impact of dividend distribution and shares buyback. In that case, we would have landed at EUR 126 million with a leverage ratio of 0.7. We, given this scenario, we will propose to the shareholder meeting a dividend distribution of EUR 0.06 per share, which is an increase of 50% versus last year. Other elements important in the daily life of the company are sustainability, which is at the heart of the heart of everything we do, as we say. The company deserved the title of most transparent company in the world for the second year in a row by the Fashion Transparency Index. Moving to the current trading to the start of 2023, we had a very positive start. Like-for-like sales are growing by more than 10% for all the brands of the company. This, we will comment also afterwards, give us some positive outlook also for the 2023. I would move forward trying also to focus mostly on the key elements. As said, the Q4 sees an increase in sales of almost 12% in line with the performance of the full year and had a very important operating leverage impact with EBITDA growing by 30% from EUR 43 million last year to EUR 56 million this year. Next page is the view on the total year we commented, infrastructure slide. Again, all numbers with double digit growth, growing, of course, towards the net income. On page number seven, we have some details by channel and by brand. On this a couple of, with all signs positive, but a couple of them are of particular interest. The first one is in the sales by channel, the growth of franchising, which is above 20%, which is a sort of a constant year-over-year. We are managing to find new partners that are willing to couple with us in order to share their business. This is also very profitable for us because it requires close to 0 investments in term of CapEx. The other element I would like to comment is the EBITDA% of the two brands, with OVS brands already at 13.3, which is a standard high for the retail industry, and Upim which is still close to 10%, also given the smaller size, and that has in front of it a potential for further improvement, as long as it managed to exploit the operating leverage. Moving to next slide, we have, we move to the balance sheet view, so on the net working capital. Couple of comments. The first one that needs some specification is inventory. Here we see a significant growth versus last year, is mainly due, as commented also in the previous calls, by the decision to anticipate the Spring/Summer 2023 shipments, in order to avoid any risk of late deliveries, that on the contrary, affected a little bit the Spring/Summer 2022 last year. This brings some increase, some relevant increase also in the trade payables, that overall the impact is very limited. Considering also the other assets and liabilities, we had on one side an increase of EUR 150 million on sales, and on the other, just EUR 5 million, that is 3%, 3.5% increase in terms of net working capital. A good balance between the growth and the capital absorption from the operations. Moving next, we have a quick view on the investment that are said are still relevant, EUR 80 million, but in line with the previous year and with some shifts from new openings to the refreshment of our stores that proved to be very positive for the like-for-like trend, and investments in IT and logistics, especially the automation of our main distribution center in Pontenura, in Piacenza, that will lead, of course, some cost reduction from 2024 onward. Going ahead, we have the cash flow statement. As said, the flow of the year is EUR 64 million, which is in line with the results, the pre-COVID result of fiscal year 2029 of EUR 65 million. With investment in the future, in the CapEx, much higher compared to the previous season. We decided to balance the extra profit from the EBITDA and the limited absorption in the working capital on one side, of course, to funnel the distribution of dividends, and on the other, to invest in the future of the company. We are to the last slide that summarize the financial position and the debt leverage ratio, which I said is declining further from 1.3 last year to 0.9 this year. You also have a graph of what took place in the last few years when we suffered a little bit for the COVID up to 0.55 leverage ratio as of January 31, 2021. Now we are, let me say, in a very, very solid situation of balance between cash and debts, EBITDA and debts. Of course, I leave for the next, for the final session of Q&A, if you have any question, and I give back to Stefano the word for the main topic of today, which is the strategy update of the company. Thank you. Thank you, Francesco. No, my point is that we believe, we feel, after many, many years during which we have played with most of the external condition adverse to our business, we believe that after many changes and challenging changes, which also impacted our industry, we are conscious that our equity story now is quite interesting, as many of the aspects which were acting against us are finally turning in our favor. We believe that the combination of our business model, which has been recently successfully updated and evolved on one side, and the other, and the trend, many trends, which most of the external conditions are undertaking, are again positioning OVS in the sweet spot. On one side, the business model. The business model has evolved in the last three years from a pure vertical into a more hybrid concept, more versatile, where we are becoming a platform aiming to, call it, emphasize and leverage our core competence. Which are being among the best and the biggest sourcing platform in Europe, being the strongest retailer in a parallel domestic market. At group level, this means enabling us to develop the best possible merchandising at different price point from value to premium, utilizing also different brands when appropriate, like PIOMBO or Stefanel or Les Copains, and now recently acquired or Everlast, inside or outside our main formats. This makes OVS clearly different from most of the other companies which are playing in a similar playground, in our playground. On the other side, it means to be able to distribute all this brand through our different brands and channels, leveraging our ability as the biggest Italian retailer. Finally, this enable us to invite brands inside our format, and the formats being mainly OVS and Upim. We believe that every time we believe they can be complementary to our house brand and/or to our product segments. I believe that all this ecosystem is offering us great opportunities that are already generating value, and that's why we are increasing sales and profitability in a market which is modestly growing, but not at the pace that we are experiencing in our like-for-like sales in the last 18 to 24 months. On the other side, also the external factors, which, in most of the 17 years during which I'm managing the company, have impacted negatively in our industry, are finally becoming either neutral or positive. The inflation. Many times I receive the question, I wonder about the effect of inflation. Is inflation a danger for our industry? My answer is no. After many years of declining retail prices, which determined a constant challenge in profitability as several costs couldn't be reduced, basically, now finally, with prices which start becoming higher, from one side, we have customers which are forced to trading down and to find inside OVS a new perfect answer to their needs, the needs are quality at affordable prices. With a new brand like PIOMBO and many others, even if they are vertical. Verticals, clearly, to avoid the mistake, means that we develop everything like it is a private label, like it is our own business. A new brand, a new windows, new logo, new store or heavily refurbished store, new advertising efforts, because we increased advertising, are all playing in favor of our repositioning and enabling us to attract more demanding customers. On the other side, the market trend. Market per se, which has lost more than 30% of its size in the last 15 years, now finally, in our opinion, and also in some observer opinion, is subject to change the trend. After the technical rebound in 2021, 2022 and 2023 are seeing the market in a positive side. According to NielsenIQ, there are expectation for the market in Italy, apparel market in Italy, to grow by 4%, it means that, in my opinion, the era of a constantly declining market is over. The impact of e-commerce has stabilized. We are not suffering any more erosion of our physical sales from e-commerce. In Italy, I believe there has been a sort of new balance between e-commerce and physical store. Supply chain and cost in general are reducing. Raw material are down, logistic is reducing, energies are reducing, more than compensating what we expect to be the salary increase. Finally, even competition, which has been fierce during the last, at least the first, 10 or 12 of the last, 15 or 17 years, with the entrance of players like Inditex, H&M, Mango, is much less aggressive than in the last decade. Within this framework, we believe that our strategy and our position is not that bad, and we believe that we have many actions to be implemented in order to take advantage of this new situation. In Page 13, we have described what we feel to be like a platform. We have proprietary brand, we have designer proprietary brand, which enable us to play also with a higher margin in some case, like PIOMBO or higher price point, like Stefanel or Les Copains. We have concession brand, so famous brand like Everlast or unknown brand, but really nice brand like Nina Mendoza, working well, on which we have a pure concession model. There is a mistake with Everlast. I beg your pardon. Everlast is not a concession. It's a vertical where we pay a royalty. We have a brand which we are working with as a pure retailer, like Gap or Jansport, which is part of the VF Group. Having said that, regarding the platform, I believe that, contrarily to what we did for most of the 17 years, where we focused our efforts to create value in opening new stores, because in a constantly declining market, the idea to generate like-for-like positive sales was very challenging and also risky because it might have implied an excess of inventory in the effort of filling the store with goods. Now, finally, the time has arrived in order to enable us also to project and to make project in order to sustain like-for-like growth. Differently from the past, we are structuring our strategy not only with the main effort to act in a defensive mode with new projects in order to protect our like-for-like from a negative direction, but also to generate product with the aim of sustaining positive like-for-like. Obviously, without forgetting that still there is room for our group to grow in term of number of our point of sales, particularly under Upim brand in this moment. Also, we believe that the strong improvements we are making in term of digital transformation and operation will be the correct basis for in order to support our like-for-like. We don't forget the people because once traffic is lower, and now traffic is lower, even if strongly increasing compared to last year, but is still lower compared to year 2019, and this has a lot to do with the new balance between e-commerce and the physical sales. But also when conversion rate is getting much higher than in the past, and average ticket is becoming higher, the importance of people in order to transform also the store manager into a personal shopper becomes more and more important. Because with higher prices and higher conversion, we need to have our people more trained in order to act as a real sales consultant. We are making important actions in order to make it happen. I try to be faster in term of a new product, our pipeline of new ideas is full. After we successfully launched the PIOMBO Adult, Man and then Woman, we are introducing in this Spring/Summer, PIOMBO Kids. The scope of it is to make happy also those demanding customer which are buying a PIOMBO Adult, and now they can find a more a more pricey and more qualitative offer also for kids. We are increasing our attention paid to the younger generation, in particularly the girl, the young woman. We are investing in growing and giving more space and more intake of product to Baby Angel, which is now about to be called the B.Angel, which has been founded many years ago with Elio Fiorucci, which is targeting the same customer that normally are looking at Stradivarius, Bershka, and things like that. We have a new team in place. We will have a new harder corner inside of the store to make the shopping experience very clear. We are already experiencing in this last two and a half months of the year, impressive like-for-like growth in this segment, which means new generations are visiting OVS store. We have Les Copains. We just acquired Les Copains, and the scope of this is not to develop an independent network of store. The scope of it is to provide Upim, to make a gift to Upim, if I can, giving this brand with the same logic that we used with PIOMBO in OVS. Harder corner with Les Copains will be set up inside the Upim stores, so no CapEx will be involved, no risk will be undertaken. We have a market research that tells us that the brand has a strong reputation in the 50-plus-years-old customer base women. We believe that this will make will exercise a great appeal for Upim customers, is a kind of a trading up in this case. Finally, but not finally, we have many others, which we try to illustrate you maybe the most important ones. We are about to start the launch of a capsule of denim, which has been elaborated in collaboration with Adriano Goldschmied, which is the creator of the denim culture. He founded together with Renzo Rosso, Diesel, he is a strong advocate of sustainability and waterless. We will launch a waterless collection, man and woman. The combination of these activities will generate, in our opinion, at least EUR 40 million, EUR 35 million to EUR 45 million, maybe EUR 50 million net of the overlapping. An incremental EUR 40 million to EUR 50 million will be generated by these activities. Another important aspect of our project regards the beauty and personal care. You, some of you might have been noticed that the beauty market, the personal care market is in strong expansion. Most of the analysis are expecting that this expansion will continue for the next coming years. We are aware that we never dedicated the full focus to this segment. We basically created the brand and the merchandising of Shaka seven, eight years ago. It has been successful, but we never really considered it as a strategic part of our assortment. Now we are realizing that the customer which are visiting OVS are more and more inclined to buy makeup. By the way, we have also put in place a very promising collaboration, cooperation with the more successful and iconic blogger and entrepreneur, digital entrepreneur in the makeup activity, which is Clio MakeUp. She was having a business model based only on digital sales. She decided to see in two OVS the preferred partners for trying to open also physical stores. We opened in the last 12 months four corners, the last has been opened two weeks ago in Rome. They are hard corner, and the sales density generated by Clio MakeUp is unbelievable. Even five or six times higher than the normal sales density of the beauty care area, which is already more than 50% higher than the average of the apparel. We are experiencing the capacity to attract the new customer and to increase conversion also in our beauty and proprietary beauty. That's why we are conceding to increase the space that we will dedicate to perfumery. There will be another about 20,000 square meter dedicated to perfumery because the sales density is higher, at least 50% higher than the rest of the assortment. We expect that we will have at least a EUR 50 million to EUR 60 million incremental turnover from these initiatives. A similar thing will happen on accessories. Also in accessories, mostly jewelry, we are experiencing a stronger growth. I forgot to mention that in perfumery we are experiencing, even now in the first three months of the year, a growth of about 30% to 40% like-for-like. That's why we are convinced that it worth pay more and more attention to this segment. Similar things are happening, similar trend are interesting, the accessories and particularly jewelry. Even in this segment, we didn't focus properly, maybe over focus or properly focus in managing this segment. We are experiencing good results from what we are doing now. We will dedicate another 10, 15 thousand square meters to this segment, whose sales density again is higher than 50% compared to apparel product. The margins are very high. We will, we expect to increase another maybe EUR 50 million turnover thanks to this category. Both the perfumery and jewelry basically are not overlapping other category, if not because they are utilizing part of the space that was used by apparel. We expect that the net, the net increase of sales will be very material here in the range of EUR 100 million in total. Another project where we are moving our first steps is the sport. In Italy, there is basically a market which is dominated by one player in the value segment. We believe, we hope we will try to challenge this player with the entrance of this segment. We have identified three main sector. One is the hiking and trekking, which is also the most important in term of market size. One is cycling, and the other one is paddle and tennis. We will utilize a reputed brand like Slazenger in tennis, where we pay a royalty. It will be vertical. We make, we develop, we source, and we pay royalty or proprietary brand like Altavia for hiking and trekking or Urban Rider for biking. On this activity, we believe we will take advantage from being a resident in Veneto, where many successful companies are having headquarters like Tecnica, Rossignol, and many, many others. It is becoming very easy to find, to attract good know-how and competencies from this region, which is basically a strong district for these kind of items. We don't forget, and we believe that we still have room to continue growing our network, particularly with utilizing the Upim brand. We will open full format stores in the main catchment areas, mostly Upim, but we have another about 30, 40 locations already identified also for OVS. We will continue opening small format stores under franchising. Already Francesco told you something about it, and we believe that we will continue with opening, uh, at least seventy, eighty, one hundred store per year in the next, three years. And we will continue refurbishing store because, in the last, three years, uh, we have refurbished, uh, more than one hundred store, and, the results, in term of sales increase are about a s- between seven and eight percent on average. So we will continue to renew our network. And it's important for the one of you that doesn't know OVS, that the new format is really beautiful. Floor and furniture are in recycled wood. T here is a warmer lighting, there are bigger, bigger fitting rooms. The customer can find an easier customer journey with corners dedicated to the brand or corners dedicated to functions like chino, denim, knitwear. Another area of expansion is underwear. Underwear has been a segment where in the last four year, we increased our effort to dedicate a specific team and to improve the quality of our range. We have evidence that the good work which has been done translates into a much higher sales density in underwear compared to four years ago. Our sales density increased by about 20%. Now we believe we are ready to enter in a bigger challenge, which is also to opening standalone store. We have in this moment about seven, eight independent standalone store across Italy as a test. The test is doing well. We are now thinking to expand this opportunity, backed by our wide number of franchisee, which are asking for new business opportunity, and we feel that we are ready now to roll out this product. We are only thinking in these weeks if utilizing a reference to OVS as a brand like OVS underwear or a specific brand. We are halfway in the internal process of a decision. A few words about international expansion. We have renovated the team. We gave the mandate to manage the team of international to the same person which is in charge of Italy. Thus, basically, making every decision process more effective and simpler, and we have already evidences that this is working. We believe that we are now prepared to enter in a, what we consider to be a new wave of international expansion. Thanks to the fact that for the first time in 17 years, in the last three seasons, women is performing better than men and better than kids, which means that the main decision maker, which is the women, is getting much happier about OVS offer than in the past. PIOMBO as a brand, the women in general doing better, and our operations which are improving, thanks also to this new organizational structure that we put in place, make us confident that we can try to restart considering seriously our possibility to expand our sales out of Italy. In some markets, we are experiencing the success of a new business formula, transforming from a pure franchising into royalties mechanism. That makes all the operations leaner, simpler, and the impact of a custom duty strongly reduced. Finally, as a retailer, we also are considering that we can leverage our ability of being the biggest apparel retailer in Italy in favor of other brand. The first that we decided to onboard in this challenge is Gap. Not because we like Gap full assortment, but we believe that Gap Kids in Italy can be another segment to be added to our kids culture, positioning the product brand of Gap in a higher price range, and basically competing only with the only player, which is finding playing in this playground, which is Original Marines. We have been working with the Gap headquarter. I was in New York two weeks ago to finalize an agreement with them because we are aware that in order to be successful with their assortment, we need to be able to increase the merchandising mix, to improve the merchandising mix of the Gap Kids in certain segments like beachwear, for instance, which is missing, or underwear. They approved our idea, so they enable us to improve their assortment with our products, and we feel ready to push the bottom. Even in this case, we will utilize the more than 200 franchisee partner, which are ready and asking for new businesses for their activities. Few words about e-commerce. We recently put in place an important achievement. It took one year to arrive there, what we call the extended availability or ship from store. In Italian, we call it disponibilità allargata. It means that basically since two weeks, every order that is generated by the e-commerce, instead of looking only to the central warehouse dedicated to e-commerce, can grab, can pick the product from every store of our network, utilizing an algorithm and a system that makes the research super fast. This is reducing the stock out, which is very frequent in the middle of the season, from 20% to 30%, basically virtually to zero. We are already experiencing in the last two weeks an important result from this new achievement. Also, the new website will be delivered in June 2023 with much higher and better graphics and functionality, making also the store journey much faster and easier. We believe that we will try to take advantage from one strategic situation. We have mostly a turnover generated by physical stores in Italy. We are lucky because Italy is a market where the e-commerce didn't grow so much. We would like to utilize this point of strength to play the other way out of Italy. Basically, instead of opening many stores out of Italy, we are considering that we have to invest maybe some marketing activity in a marketplace like Zalando in order to exploit the high potential of certain markets that doesn't require the brand to open physical store, but can justify an effort to become material only or mostly thanks to the digital, like in Germany or in Austria. As a matter of fact, the sales, the e-commerce sales of Stefanel in Austria and Germany, which has been the first market where we opened the Stefanel website, are already material and growing very fast. Finally, a few words about digital transformation. We already mentioned some of those, which is impacting the efficiency of the digital sales. We are improving our automated warehouse system with the scope of making faster and seamless the activity of distributing product and enabling us also to distribute in season a single product instead of inner of product which was compromising the efficiency. We are also rolling out the implementation of the new digital POS, which will provide more information and will help to increase conversion rate. The rollout is expected to be finalized for the Spring/Summer 2024. Couple of words about people. As I said, we are experiencing an increase of average ticket from 19 to today of more than 20%. This means that customers are more careful also to the information that they need in order to decide to spend more. That's why we believe that the people is more important than ever, and we are entering and providing training program in order to provide a better know-how to our population and also to attract talent and increase retention. Having said that, we believe that we have in front of us strategically, then obviously every time something can happen that can endanger any good strategy. We believe that after having played for 17 only with the headwind, we feel that for all the reason which I said, maybe we can have some tailwind finally, and we are ready to enjoy and to take advantage of them. We believe that our positioning is better than years ago. We are still able to talk with the customer, which are looking prices and low prices, but we are also attracting, and this is one of the most important thing, new categories of customer, and we have full evidence from the CRM data that we attract a new customer because most of new customers has more PIOMBO or other brand ticket than the old historical customer. This is a clear evidence that we have new customers, and also the increase of average ticket is another evidence that we are a bit changing the profile of our average customer with positive consequences in our sales. That's it for my side. I think that the other slides are mostly financial and technical, and you had probably time to read them. We are happy to answer to your questions. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. We kindly ask you to use the handset when asking questions. Anyone who has a question may press star and one at this time. The first question is from Francesco Brilli from Intermonte. Please go ahead. Yes, good evening. Francesco Brilli from Intermonte. Thanks for taking my questions, thank you for the very interesting presentation you gave us. I have three questions from my side, which are related each other. If you can help us just to understand if you have internal targets or what are you expecting from these activities in terms of additional revenues and the timeframe in which you are expecting this evolution. I think you mentioned EUR 45 million to EUR 50 million additional revenues for some activities. Not sure for these all. If you can also provide some color on the profitability of this project, some indication on how much you are expecting from these activities in terms of accretion on group's profitability. The third one is on the level of CapEx we should expect for the rollout of all these projects. Thank you. Okay. Thank you. I go one by one. I cannot give you a precise answer on the first question because we have not kind of approved a three-year business plan. I tried to give you like a broader color about it. I already mentioned that the square meter that will be dedicated to beauty and accessories will be like 35,000. We have a sales density which is 50% plus higher than the average. You can determine that about EUR 100 million of turnover is expected to be generated by these activities, which are overlapping very little, very poorly, which are basically not overlapping the apparel. The profitability is gonna be higher than the average profitability. Here you can assume two kind of accretive effect. One, the simple fact that we are utilizing in a better way the same space, so without increasing proportionally the store cost, so that's operating leverage. Second, the EBITDA per square meter, but also the gross margin per square meter of those two activity is higher than the apparel EBITDA per square meter. In this way, I answer also to the second question about accretive effect. On sport, I prefer not to make any assumption. If successful, there will be at least EUR 100 million, but the level of visibility in term of being successful in launching this sport segment is lower because we never did it on a material way, compared to the high level of visibility that I can have in perfumery and accessories, where we are already present in those segments, and we are only basically improving our know-how and operating attention to those. How big can be the opening the store, for instance, of Gap or the underwear, we are speaking about hundreds of stores. If successful, there will be hundreds of store, maybe 100 Gap, maybe 100 underwear. But if underwear will be successful, they will be more than 100. Assuming that they are in total 200, just to be reasonable, Gap and underwear, each of those could generate EUR 300,000, EUR 400,000, EUR 500,000, call it EUR 300,000 to be prudent. We are talking about EUR 60 million turnover, maybe, with a good profitability in the range of 12%-13%. Basically, I think that I tried in this way to give you an idea. We believe that all these initiatives will be indispensable also to sustain the like-for-like. The combination of like-for-like generated by PIOMBO Kids, by Baby Angel, by Goldschmied, the denim, et cetera, we generate another EUR 30 million to EUR 40 million. Clearly, this is not a number that I can put as a project. This is an idea of size. We believe that without sport, we have in mind at least EUR 150, EUR 200, north of EUR 200 million turnover here with good profitability. CapEx, the CapEx will not be very high because the opening of a Gap or the opening of underwear will be made mostly under franchising agreement. The opening of the harder corner of beauty or jewelry will basically be done with very, very low CapEx because they will be done internally to our existing stores. We will continue with our EUR 80 to EUR 85 million CapEx also in the next coming years. Thank you very much. Just a quick follow-up in terms of a timeframe, just roughly, you are thinking of developing this project in the next couple of years or in the next five years? Yeah. Yeah. No, no. In the next couple of years. The number which broadly I gave you as my personal, call it managerial, undertakings, which doesn't mean that they are written on the stone, but they are the number on which we will try to achieve our result, our goal, will imply a plan developed under two years. Basically, those number might be the run rate at the end of second year. Thank you very much. Thank you. The next question is from Domenico Ghilotti from Equita. Please go ahead. Good afternoon. Good afternoon. A couple of questions. The first is, the focus on your updated strategy, in particular on your projects in entering several niches, I would say, in which there are sector specialists. You are not sector specialist, you are trying to get a bit of that market. Don't you think that so you risk to be perceived as, having an offer that is too light or not being able really to attract customers and to get that part of the market and maybe to lose some of your focus on the parallel? In general, more in general, what are the main risks that you see in the implementation of these projects? Okay. On the first question, I think that the risk of being perceived as losing focus, in my opinion, is not material. All competitors are utilizing jewelry and accessories. Someone is doing better than us, like Inditex is doing shoes and bags better than OVS. H&M or department stores are doing jewelry, department store much more widely, H&M similarly to us. When we speak about jewelry and accessories, the answer is definitively no. They are part and basically, they are very impulse driven, and the customer doesn't look for really a specialist there. Unless when you speak about spending EUR 200 for a for a silver ring. In that case, this is not our game. We are talking about average prices, which are from EUR 5 to EUR 30 maybe. No, I don't think, because also the competitors are doing the same. The only thing is that we want to do it better, but we are already doing. In perfumery, that might have this risk, and that's why in the past, I didn't exploit too much this segment. But the behavior of our customer is demonstrating that they are happy of buying and cross merchandising perfumery and Baby Angel, so apparel and small jewelry or flip-flop, et cetera. We have already evidences that doing this better doesn't mean to do it from a professional point of view. We are not the best skincare maker. We are not the best hair repair brand. Most of the beauty will be makeup, and makeup is very close to accessories and to the pleasure of improving your aspect. That's why we don't feel this risk. I take the point, but I hope my answer is for you sufficient. For sure, we have evidence that this risk is not taking place. Regarding the second question, was it about the CapEx involved in this? No. What is the main risk, so from your perspective, so when you look at this project? Yeah, yeah. Okay, what are your, t he main risks that you perceive? Honestly, not that much because we know those two business. The different answer once we move to the sport. That's why in beauty and jewelry, I'm a bit aggressive in feeling that we are not taking risk, and it is only an opportunity. Do it better doesn't mean to enter in different playgrounds. We already are. We have EUR 50 million turnover in perfumery in OVS and EUR 20 million turnover in Upim and growing hugely. We know how to do it. The question is that we put in place a much better operational model, thanks to a couple of year of hard work in order to improve. We have a new layout, we have a new furniture, we have also new brand populating this, we have a very solid and expert manager doing in charge of it. The risk in jewelry is even lower because those are two activities that we are already doing and working with internally to our store. Different story for the sport. Here, the risk is higher, what is the risk? That maybe we don't, we are not able to attract our customers, so they will continue to buy Quechua or the other the other brand of of Italia, help me, the leader in the market. I'm done. Decathlon. Decathlon. Basically, we believe that Decathlon has invaded the market. They are super good. One limit of Decathlon is that they are so good and so distributed that some human can get bored of dressing Decathlon because it is like a uniform. We, we hope, we believe that the rationale behind it is that our customer are already buying Decathlon because we are playing in the similar price range. Why not offering them the possibility to buy a different windbreaker, a soft shell or a trouser for working inside OVS? The risk is not that big. If it will not work, we have not spent CapEx on it. Maybe we will sell out the unsold stock, the next coming season, and that's it. Okay. Thank you. I hope to have been helpful. Sure. Thank you. As a reminder, if you wish to register for a question, please press star and 1 on your telephone. The next question is from Federico Belluati from Kepler Cheuvreux. Please go ahead. Good afternoon, everyone, and congratulations for your results. I have just one question, and it's regarding your own shares, because now you have almost 6% of own shares. I'm asking you if you have some M&A deals or something like that in your pipeline right now. Thank you. Nothing on the desk now. Basically, in this moment, we believe that part of the share will be utilized in order to sustain an equity plan in favor of things like stock option plan, et cetera. The remaining ones, in this moment, will be subject to the decision of the board. In this moment, we have no visibility on extraordinary activity. Because we have so many internal initiatives that we try to describe you that we are happy with what we have. We have to develop Stefanel. We have to develop internally to open Les Copains. We have to develop this new idea with the Gap Kids store, we have to develop all the projects that I described. Okay. Thank you. Thank you. The next question is from Luca Bacoccoli from Intesa Sanpaolo. Please go ahead. Hello. Good afternoon, everyone. Can you hear me? Hello? Yes, yes, I do. Sorry. Okay, good. Good. Few questions from my side. First of all, on the strategy update and more specifically on the new product proposition. I wanna go back to the sports activity because the main competitor is much larger than you. What is the competitive advantage you're relying on in order to steal few percentage point of market share? The second question is again, a sort of, you know, follow-up in the sense that in the last two years, you have pushed a lot for giving more surface in the stores to PIOMBO, first of all, men, then women, and then now kids, and also to the other third party brands. Now you are introducing jewelry, perfumery and this new products which are basically stealing surface commercial surface to the OVS DNA original sales. Don't you see any risk of losing the traditional OVS customers in in in this in this way? The other question is a clarification on the EUR 160 million-EUR 200 million of additional sales that you expect in the next to get by the end of two years. If this is the target I understood correctly, that's what we should expect increasing sales? Can you repeat the last question, Bacoccoli? I'm not sure to have captured the last question. Yeah. I'm referring to the additional sales that you, I don't wanna say the guidance, but you hope to get from all those initiatives. You mentioned EUR 160 million-EUR 200 million of additional sales with a higher EBITDA margin, of course. Is that the right number? I got it correctly? Okay. Number one question, which is the competitive advantage of OVS in doing all the things that I described. First of all, the size of our network, and second, the brand credibility. I think that OVS is enjoying the fact that people is paying attention to the quality of our stores, the quality of our strategy, the quality of our advertising, the quality of our sustainability and transparency policy. I think that OVS is getting more and more institutional in the eyes of our customers, so they trust us. We have to continue to try to operate in a way that they will continue to trust us. This, I think, is an important competitive advantage. They know that we are offering them a very appropriate price to quality ratio. We are not over pricing our product. Finally we have stores. We have existing stores, and there is a huge comeback to stores in this moment. We believe that this is another important element of a competitive advantage. To open 100 Clio stores, which I didn't mention, but it might happen maybe, it is easier for us than for anyone else because we already have the space. With reference to the space, which is your second question, I remember that I spoke about, I think 30,000, something like that, square meter. We have in OVS, only in OVS, we have more than 500,000 square meter, maybe 600,000 square meters. We are talking in any case about a limited amount of space. You have to consider that in the last 15 years, the market decrease of 30%, has also been paid by OVS, because OVS sales has been forced to decrease like-for-like several years. We have space to increase sales density without enlarging our stores. PIOMBO space will not suffer because of this activity regarding enlarging space to be dedicated to accessories and other items. One, regarding the, maybe the confusion that seems to me that your question is similar to the one of your colleague, Ghilotti, as I said, I don't see this risk. It is already there. If you enter Zara, if you enter OVS, if you enter, y ou might have read last week that H&M declared to be willing to invest heavily in expand their perfumery worldwide. Basically this is a trend, and I don't see this risk at all. OVS is better placed than others because OVS is already becoming like a platform. The format of OVS is becoming more hybrid than the others. Apparently what makes our customers super happy is that in the new format, they find much more answers and solutions to their needs than before. Finally, regarding the number, I don't want really. I cannot and I don't want. I not only cannot because of Consob rules, but I cannot because I'm illustrating you ideas, project, which in some case are very solid, like the perfumery and accessories, other that must resist to the proof of evidence of working well. In principle, all these projects can generate numbers, which, if all successful, can be much higher than the one that I mentioned. I think I gave you a number just to make clear that we are not talking about EUR 30 million, EUR 40 million, EUR 50 million in total. We are talking about much higher numbers. The size of this number will depend upon the success of the project. Okay. Thank you. Thank you. The next question is from Luca Orsini, from Fondi Antares. Please go ahead. Thank you, Stefano, for taking my question. I just wanted to understand on your buyback, whether the intention beside the stock option plan is then to cancel the shares. I don't know, Luca. Really, I don't know. I don't. I have no answer here. We didn't discuss with the board about it. I think it will also depend very much from which will be the behavior of the share price. We have assisted in certain period to an excess of volatility, to the presence of short investors. The buyback is also and has also been used somehow also to create a stock of shares and also to help the market to find a kind of small stabilization effect. We will convene again with the board after the general shareholder meeting, and we will decide. Basically the request, of keeping in place the stock option, the buyback activity is just to give the company an ammunition to activate. We believe it's gonna become appropriate. In this moment, I have no visibility. Okay. Thank you, Stefano. Keep up with the good work and a lot of projects. Thank you. Thank you. The next question is a follow-up from Domenico Ghilotti from EQUITA. Please go ahead. I have a couple of additional questions. One is on the cost structure. You were mentioning that, okay, the inflationary pressure on some items is clearly decreasing from raw materials, logistics, to energy. In general, I'm trying to figure out what can be overall your really your operating cost growth in 2023. What is the kind of pace that we should expect, considering also personnel and rents? The second question. In particular, sorry. On, just to complete on this, I was curious on marketing costs. It's not a big item for you, but how much has been invested in 2022 and what should we expect in terms of trend for 2023? Because I think that there are also some really We have to build some brand awareness on some initiatives. The second question is on the market share. If I'm not wrong, in 2022, at the end, your performance has been quite similar to the market. So it's not been a big jump in market share. I was curious if the strong current trading is also in your view. I don't know if you have numbers reflected also in the market trend. In general, how do you see the consumer? Because I was frankly surprised by the resiliency of the consumer, not only in your business, despite some inflation and some maybe switching spending to other segments. I tend to get your comment on this resiliency. Okay. on cost, it's not easy for me to give you a precise number of the operating cost because I can describe the different e lements. That's right. You know the profit and loss as I do or even better than I do, and you can calculate the effect. In the cost of goods sold, the most important aspect is the cost of the raw material, the cotton and all the other. Cotton represents 70% of our sourcing cost, those costs are drastically decreasing. Exactly, for the similar amount of what they increased last year. We have about a 20% decrease, sometimes even more. I am flying to Forlì today, just to screw, if I can say, the vendor to talk to my team of sourcing and procurement, because in this moment, it is extremely important to be aggressive with the vendors after three years during which we paid to the vendors probably more than was supposed to be paid. The reduction of international trips from our buyer, for instance, coupled with all the tension in the logistic supply chain, put the vendors in the position to be very rude sometime. Now to say, "This is the price. If you want it, you have to buy it, because otherwise I have plenty of requests because there is a shortage of everything." Now the situation is over. There is also a certain margin of personal capacity. Every company has its own techniques in order to be effective here. All in all, we are assisting to a drastic reduction of raw material cost. We have a material reduction of logistic cost, but this is less impacting on us because we already have been able to minimize the logistic cost increase, the container cost increase, because we hedged the logistic cost years ago, and the hedging is over basically now. We are expecting a small reduction of logistic cost. Most important will be the reduction of logistic cost, thanks to the investments in our new automated logistics system. This will be visible next year, not in 2023, but in 2024. Energy has been a very important negative impact in the 2021 and 2022 P&L. They will be a positive effect. What will happen to the energy, you are better positioned than me. It seems that the prices were supposed to go down very materially. Now, they have gone materially down compared to the peak, but they remain much higher than three years ago before the crisis. We expect that they will remain lower compared to last year, but still more material than in the past. In any case, they will act in favor of our profitability. The only cost that we assume to be modestly growing will be cost of labor. Here we have an interesting equation. One side, I want to pay more my team also because, as I said, I need to gradually transform them into sales assistant. The other, there has been a reduction in volume. You might remember that last year we increased our sales like-for-like by more or less 5%. The price increase has been more or less 10%, and the volume decrease has been more or less 5%. This volume decrease makes basically possible to avoid increasing salary in absolute term because I need some headcount less than the year before, and I can pay a bit more according to the likely increase that we will experience due to the inflation impact. All in all, we see positive effect. I don't have a number that I can tell to you in terms of saying how much, but I think that talking more deeply with my team, with Enrico, with Nicole, et cetera, you can achieve your own well-informed conclusion about what will be the global effect. Regarding marketing, I asked to my team, I think we are in the range of EUR 18 million-EUR 19 million. We increased the marketing cost in the last two years. We don't need to increase materially next year because most of the marketing cost has been devoted to the creating knowledge and reputation for PIOMBO. Now PIOMBO is known, very well known, and I think that we will continue investing but a bit less compared to what we invested in the last two years because we don't need to make this that according to our standard, has been an important investment to make PIOMBO more aware in our public. I don't expect a big increase. This year we will have a small decrease of marketing cost. Market share. Market share has remained more or less stable in the last 12 months only because of one reason. We had very late deliveries in kids. We suffered very late deliveries in the first half of the year because of the tail of the logistic disruption that has been suffered by the worldwide supply chain in 2021. That's the main reason why we have not increased compared to the market. Because our market share in the size of kids in our, in our brand is much higher than the market, we couldn't continue increasing market share. If I take man and woman, I can tell you that in man and woman, OVS market share in 2022 has increased again. That means that we are in good health. In the first three months, we have evidence of the figure since a few days ago. The new figure has been released by Sita Nielsen, I think, last week, and we are. We declared that we are growing double digit. I cannot tell you more because we decided not to give too much precise number now, but we know that we are increasing market share materially in the first quarter of this year. We are again recovering market, gaining market share compared to the others. The fourth question was about. No. You partially answered. Part of the performance is a company specific, so the market is not performing as you are. It's not a more general positive trend, stronger trend in the consumer. I was surprised by the consumer resiliency or even more than resiliency. Consumer spending more, apparently in every category from travel to restaurant to apparel. No, you're right. What market trend tells you is that market is growing in the first quarter. We are growing more than the market is growing. I think that many reasons are behind this consumer habits. The country culture is also changing a bit. Maybe we are becoming more similar to Americans, which are spending in consumer goods even before having savings to be used to compensate the expenditures. Maybe the boost generated in the economy by the super bonus has been higher than expected. It's true, we are experiencing this. From my point of view, I think that what is important is that, as I said, I believe that after a structural decrease in the apparel market, in favor of other segment of expenditures, technology, TV, music, gym, travel, etc, I think that finally this structural drop of the market is over. At the end of the story, apparel is a commodity like food. People need to dress. Italian like to dress, and they are discovering OVS as an alternative also when they continue to spend, but they cannot continue to spend at the same price level that they were used to do. There will be brand which will suffer more and brand or companies which will be taking advantage of this. Okay. Thank you. Thank you. The next question is from Charlotte Barry from JP Morgan. Please go ahead. Hi there. Thanks very much for your presentation. You actually began talking on the topic just now, but I wondered if you could give any more detail on current trading, whether the really positive trend that you've seen has been consistent through February, March and April so far? We've seen other retailers commenting on the weather and the impact of that. Whether that's something that's made demand a bit more volatile over the past couple of months? Thank you. Thank you for the question. What we are experiencing is a positive trend in all our segments and all our geographies. Like-for-like is largely positive in OVS. Like-for-like is positive, largely positive for Upim. Like-for-like is largely positive for Stefanel and also for Gap. Each of them, to be honest, is experiencing kind of discontinuity in the offer because in Stefanel, finally, we believe that we are finding the right path to profitability because after two collections, which we did basically without any understanding of the history, now we start having a sort of history track record, and we can correct the mistake. In Gap, we put in place an internal organization of buyers. This season, Gap is not delivering what they want to deliver to their partner, which is us. We are selecting items like we are a pure buyer, excluding what we believe is not working because of our knowledge of the market. OVS has introduced an enlarged offer of Baby Angel and PIOMBO Kids, and is benefiting from the beauty trend. The super performance of OVS is driven by, again, discontinuities, which partially depend from the market, like beauty, partially depend from our internal actions. Upim is basically improving his collection with a renovated team, and is benefiting from the perfumery. Basically, PIOMBO is doing super well. Baby Angel is doing super well. Upim is doing very well. Perfumery is doing hyper well. Clearly there is a market that must be positive, otherwise, it's gonna be impossible that we perform well everywhere. We believe that we have plenty of good activities which create a further reason why we are doing better than the others, at least in this moment. We expect that from the point of view of seasonality, we received also a good support from the seasonality because weather has been appropriate with a mild March month of March, not difficult, with a decent first half of April, then has been worse. Also we have to take in mind, to be honest, that last year in the first quarter, there was also the effect of the psychological consumer concern about the starting of the war. We experienced negative sales in the first quarter. Being so positive is okay, but means also that there is a technical recovery and a lot of things might become more challenging in the next coming months. I don't, I don't expect a double-digit growth in like-for-like for the next coming months, for sure. I hope to have been able to answer. Thank you very much. to your question. Thank you. The next question is a follow-up from Luca Bacoccoli from Intesa Sanpaolo. Please go ahead. Yes, thank you for taking my question this in this very long Q&A session. But it's a simple one on your commercial strategy. I'm referring to the prices given the relevant savings that you expect on raw mats and the other OpEx. Are you planning to retain 100% of those savings or partially to pass on to the final consumers, reducing prices? I will pass part of the advantages to the consumers in the second part of the year. The year will be twofold. The first part of the year is being characterized by still higher prices because the cost in the first part of the year are still reflecting the increase of cost that was present seven, eight months ago. The orders has been placed half of last year when the prices were still higher. This is common to all my competitors. The positive thing is that some competitor, like H&M, for instance, they didn't increase prices last year, nevertheless, they didn't increase market share. They have been forced to increase prices this year more suddenly, and in the second half, I guess they will be forced to continue to increase prices because they didn't increase any price last year. I think that, I will be a little bit advantaged. What happened to some of my competitors. To give a short answer to your question, in the second half, when I'm experiencing a strong cost reduction, I will pass part of it to my customers, especially in kids, and part will be retained. Okay. Thank you. Thank you. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Okay. Thank you. Thank you to all. Hope to, not to see, but to talk with you again in the next coming conference call to be expected for the first quarter results. Thank you. Thank you to all. Thank you. Bye.