Good afternoon. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the TOD'S Full Year 2023 Consolidated 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 Ms. Cinzia Oglio, Investor Relations of TOD'S. Please go ahead, madam. Hello. Hi. Thank you. Good evening to everybody. Today I'm not in the call, as you have noticed, replacing Emilio, who, unfortunately, has been called in a last-minute meeting, so he's very sorry, but unfortunately he cannot be with us tonight. Before starting the call, I also want also to underline that obviously I cannot answer questions about the tender offer launched by L Catterton, and so please, I ask you the courtesy not to ask questions about it. You know that all the information on the offer will be released, in the so-called issuer statement and in the press release that the board will be released, in due time. So now, starting to comment 2023 results, you have already seen in January that sales were EUR 1,127 million approximately, up 11.9% from 2022. The impact of currencies was negative by more than EUR 20 million, so at constant rates the growth of sales would have been up 14%. After a very strong first half of the year and the slowdown of Q3, revenues accelerated their growth in Q4, also helped by easier comparison basis mainly in China. All brands grew double-digit at constant rates in 2023, and their individual performance reflected also the geographical mix and channel mix of their sales. You have seen that TOD'S grew by approximately 13%, Roger Vivier grew by more than 19% at constant rates. Both of them were helped in Q4 by their higher exposure to Greater China, where you know the comparison basis was easier in Q4. Hogan grew by approximately 10%, and Fay grew by approximately 13%. On the contrary, the performance of these two brands was influenced in Q4 by their higher exposure to Europe and to the wholesale channel. By product categories, you see that all the product categories grew double-digit during the year, with an outperformance of leather goods and accessories in line with our strategy. Revenues grew in all geographical areas, with particularly brilliant results in the group's main markets. The domestic and European markets confirmed double-digit growth in the retail channel thanks to the strength of the local demand and also to the important contribution of tourists. But the total performance appears to be a bit weaker due to the unfavorable phasing of wholesale shipments in Q4. Sales in the American market grew by 3.5% in the year, with a sequential acceleration in Q4. In line with the trend of the industry, the Chinese market, has shown a lot of volatility during the quarters due to the different basis of comparison in 2022. In the year, revenues from this area, anyway, recorded a solid double-digit growth, also when compared to 2021. The performance of the rest of the world area was also positive, driven by the excellent results of Japan. By distribution, again, all the channels recorded excellent results during the year. In Q4, as we have already commented, the growth was driven by the retail channel, while the wholesale performance was affected by the different timing of shipments. Now, coming to, what's new today, so the profit and loss, we start to comment, as you have seen, that the group improved significantly the profitability during the year, confirming the soundness of the strategy that we are now following. So the revenue growth has translated into a significant improvement in terms of production, logistics, and distribution efficiencies. Gross margin improved by more than 100 basis points. However, we have seen that cost for services increased as well due to higher competition in the industry and also the inflationary environment. We have seen that the incidence on sales increased to 29.2% compared to 27.8% in 2022. In this line, you know that we have also communication, and you know that we had this year higher investment in communication compared to last year. Rental costs increased in absolute terms, but their incidence on sales decreased from 6.5% to 6.1% of sales. Personal costs had a similar dynamic. Again, the incidence on sales decreased, in this case by approximately 60 basis points, despite the increase in absolute terms related to the increase of the group's headcount. In 2023, EBITDA amounted to approximately EUR 254 million, with a margin on sales of 22.5%, which is approximately 200 basis points higher than last year. At constant exchange rates, EBITDA would have been EUR 258 million, with the same margin on sales. Depreciation and amortization totaled EUR 158 million, or 14% of sales, compared to 14.7% of last year. This line includes the item amortization of right-of-use assets, which is EUR 113.5 million this year compared to approximately EUR 105 million of last year. The group's EBIT was almost EUR 95 million, with a margin on sales equal to 8.4%. That means 260 basis points higher than in 2022. The impact of currency was neutral at EBIT level. Net of the results of financial operation, results before taxes, was positive for EUR 68.3 million, more than double the results of last year. Net of current and deferred taxes, the group's net income was exactly EUR 50 million, more than twice again the value of 2022. The operating working capital totaled EUR 363 million, approximately, with an incidence of sales of 32.2%, much higher than last year. However, we are not worried about this increase, considering that the growth in inventory is mainly driven by the increase in finished products of Spring/Summer 2024 collection, which were already shipped to customers and to our stores during the months of January and February. This is due to a different timing of shipments related to higher efficiency in production. In 2023, CapEx totaled approximately EUR 56 million, up EUR 10 million from last year. As always, the most of these investments were related to the expansion and renovation of the DOS network, while the rest of the investments are related to the modernization at industrial and corporate structure level, with great emphasis on digital. In compliance with IFRS 16, the group accounted for lease liabilities of EUR 522.5 million compared to EUR 484 million of last year. Excluding these liabilities, the net financial debt was approximately EUR 90 million compared to approximately EUR 71 million of last year. At the end of the year, the group's shareholders' equity was EUR 1.091 billion compared to EUR 1.041 billion as of December 2022. Finally, net cash flow from operating activities showed a positive balance of EUR 133 million, broadly similar to last year. Net of investment and of financing, the net cash flow was negative for EUR 82 million, which compares with a negative balance of EUR 55 million of 2022. Before giving you the opportunity to ask more questions, I want to underline what we have also written in the press release, that we have changed the date of the release of Q1. In fact, due to the significant change that is planned for the board of directors in compliance with the agreement taken for the tender offer, we have considered more appropriate to delay the date of the approval of Q1 figures in order to give the new directors the possibility to have more opportunity to look at the documents that they will have to approve. And so instead of releasing on the 24th of April, we will release on the 15th of May. Now, this is all for my presentation, so, I give you the opportunity to ask more questions. Thank you. 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 touch-tone telephone. To remove yourself from the question queue, please press star and two. We kindly ask to use handset when asking questions. Anyone who has a question may press star and one at this time. The first question is from Chris Huang of UBS. Please go ahead. Hi. Thanks for taking my questions and congratulations on the results. I have three questions, if I may. Firstly, starting with the year-to-date trends in 2024. We've been 2, 2.5 months into the year, so can you just share some thoughts on how are you thinking, how is the year shaping up, how are trends by consumer nationality on the Chinese, the American, and European consumers? That's my first question. Secondly, if we focus on the EBIT margin for the group, it reached a nice 8.4% in 2023. Just wanted to hear what you think about, the return to double-digit margins. Is it possible, perhaps, in 2024 or, or more in 2025? Last but not least, on, communication expense within your costs for services line, costs for services was around 29% of sales in 2023. Can you just maybe help us understand a little bit more in terms of how much of this 29% comes from communication marketing? Is it around, let's say, 7%, 8%, or any quantification you can give on that? Thank you so much. Okay. Ciao, Chris. Thank you for your questions. So, starting with the first one on current trading, again, I want to make a sort of caveat, meaning that, again, due to the tender offer, I'm not allowed to make too many comments on 2024. Anyway, I can comment what happened in January and February because it's history. But, for example, I'm not ready to give you further indication on, let's say, what's happening going forward. Anyway, starting with the current trading, in line with the industry, we can say we had a soft month of January, but mainly due to the different timing of the Chinese New Year. But February was completely different, so it was much better. If we just take only February, we had a growth compared to 2023. So, only February was positive. And this growth was, we can say everywhere with the exception of China. So in February, we had still some weakness in Greater China, so not only mainland China, but also Hong Kong and Macau was not so brilliant. But all the other regions were positive. I think this is really in line with the industry. In terms of, I can say, the guidance, the only thing that I can say is that I can confirm what we said during our conversation in January, so after the release. So the situation is that, again, speaking about the industry, not only our group, everybody knows that this year, the growth rate will be, you can say, much lower, so very different from last year. So, the expectation, as an average, are something in the region of mid-single-digit growth. And so you understand that with the mid-single-digit growth, also the improvement of profitability, is not granted. So all in all, what we can say is that to have flattish profitability this year compared to last year will be, I think, a very good result. But again, and now I go to your second question, EBIT this year, you're right, was very, very good. We cannot comment on what it will be. The only thing we can comment is that for sure, these results are confirming the soundness of our strategy, as we have also written in the press release. So we think that the investment that we did and that we continue to do in communication, in people, in stores, so what we already said in the past, are starting to be effective and so to give results. So this is, we can say, really the maximum that I can say in terms of, in terms of, yes, future. Also considering that, you know, there is a very low visibility on the year and mainly related to China that, you know, is for sure the most important region for the luxury industry. And so obviously, if China is slowing down, I think that the growth rate of the industry will be for sure affected. And I don't remember the third question. If you can, Yes. Yeah. Yeah. So it's, my third question is on marketing spend. Can you quantify. Marketing. How much? Yes. Yeah. Yeah. Marketing as a percentage on sales is approximately 10%. So we are still above what was our historical idea of 9%, which we know is something high compared to the rest of maybe two other peers. But you know that we have four brands. And again, you know that we are investing in the development of our brand. Okay. Thank you, Cinzia. That's super helpful. Just to follow up on the first question, you were commenting that January was impacted by the timing of Chinese New Year. February was much better. But you also commented that February, China was weak. So just wanted to make sure I'm understanding correctly because Chinese New Year this year was February. So I would expect, you know, overall, February trends to be more positive than January. And also, can you comment, together if we look at January and February, is it positive, flattish, or negative? Thank you so much. Yes, Chris. No, you understood correctly, meaning that China was negative in January, improved in February, but remained negative. So all in all, what is true is that China is still slightly negative for us in as year-to-date, so January and February together. I think that this is something that is again not so uncommon in the industry this year, meaning that I know that there are some brands that are very, very positive also in China. But the most of the comments that I have seen from the peers seem to confirm that the situation in China is for sure below the expectation that everybody had a few months ago. So China is true that it's slowing down for the entire industry in terms of also different, maybe, attitude of the Chinese clients that prefer maybe to, to travel, to make experience, but they are not so addicted to just, shopping or to luxury shopping. And so I can confirm that the environment in China is much more competitive than in the past. And for this reason, the competition also for the luxury brands is tougher in China. And so we are not surprised, at the end of the day, to see also internally some weakness for, for our brands. The maximum maybe I can tell you is that, anyway, I don't know if you can tell you. I was maybe just saying that, for Hogan, that is relatively newer in, in China, we are in way positive. So, the other two brands are slightly negative. Hogan is, is positive. So altogether, the group is slightly negative. But anyway, Hogan, I think, is due to the fact that it's very, very low in terms of volumes. And so it's also easier for the brand to somehow outperform the growth rate of the industry. Okay. Thank you. That's super clear. And have a great evening. You're welcome. The next question is from Charles Scotti of Kepler. Please, please go ahead. Yes. Good evening. Thank you for taking my question. Actually, it's a follow-up question on the current trading. Sorry to insist on this topic. But I think some of your peers commented on a strong recovery of Chinese tourism activity since the beginning of the year, which probably, you know, may explain the weakness of the business in Greater China. Do you have a view on the current trading by cluster, notably with the Chinese, including their spending in Greater China and their spending overseas, which will then, you know, neutralize this pickup in tourism activity from a very easy comps? My second question is on your wholesale business. Could you share with us the level of your wholesale backlog at this stage into the year and how it compares to last year at the same period? And thirdly, well, you said that you can't comment on the offer. I won't ask a question on the offer. But just looking at the press release sent on February 11th, if I'm not mistaken, it was written that L Catterton will submit the offer document to the CONSOB within 20 calendar days from the date of the press release, which was February 11th. But I haven't seen anything so far. So, can you make any comment or give us any indication about the timing of the offer? Thank you. Yeah. Okay. So, starting with the situation of Chinese people, I confirm that Chinese people are buying outside of China. So for sure, if we put together the performance not the performance, but the purchase is made by them, not only in China but also outside of China, the situation is improving. And so, our, you can say, negative performance translates into a positive performance. I would add also that the most of the Chinese people are, in a way, traveling in the region, so maybe Japan, Korea, Australia, Australia. We are not seeing them back to Europe, at least not meaningfully. So a few of them are already coming back to Europe, but the most of them are now, buying in, we can say, rest of Asia. So anyway, I confirm that the cluster is, is positive also, also for us. Coming to, I'll say, backlog. I'm sorry, but I cannot give you the results of the season also because we have not yet finished it to collect the orders. You remember that here in Milan, we had the fashion week last week. And after the presentation of the collection, we still have a sort of second step of the orders backlog. Anyway, this is included in the, we can say, the future that I cannot comment. So I'm sorry, but what I can tell you maybe helps is that the current season, the spring-summer season, has started with a positive mood in the stores. So this is in a way related to spring-summer. I think you were mentioning you were asking for a full winter collection. So this is the maximum I can comment on the year. Coming to the tender offer, I confirm that, as of today, you have not seen any document on the tender offer because, according to the time frame expected by the law, so according to the Italian regulation, Catterton has supplied a sort of draft of documents. But this draft has to be approved by CONSOB. And so, we still have to wait until the approval of CONSOB, something that, obviously, we cannot know exactly when happens. But I think that the maximum number of days is one month. So in theory, until the end of March, CONSOB has the possibility to continue to consider and to evaluate the documents. So, we are completely in line with the law time frame. Thank you very much. The next question is from Antoine Belge of BNP Paribas. Please go ahead. Yeah. Hello. Good evening, Cinzia. I've got three questions. First of all, so in Q4, let's take the retail sales of the group, probably a bit more meaningful. That That wholesale that can have more volatility. So it was +12%. And we knew that the comps in China were quite easy. So, taking into account what you said about January negative and then February better, I mean, at the end of February, I mean, are you in the sort of mid-single-digit, you know, camp? Would that be a fair assumption? My second question relates to the American markets where, you know, back in Q4, you were at actually like mid-teens, 14% to be precise. So what's your view on the US markets at the moment? Also, are there, you know, in terms of brands, some brands for which you intend to open stores in the U.S. in 2024? And finally, regarding the margin, I know you don't like to comment on margins by brands. But I mean, I think Emilio, you know, at least in the sort of last year or so, said that Roger Vivier had higher margins. Is it fair to say that compared to the 8%, you know, group margin, maybe the Roger Vivier brand would be, I don't know, between 15%-20%? Thank you. So Antoine, thank you for your question. So, I'm not sure if I've completely understood your first question on Q4. What I confirm is that for sure, Q4 was much better in retail than in wholesale due to, we can say, sort of timing issues. But in terms of retail, you know, we are not disclosing exactly by region. So, for sure, I think. Not Not for sure. I think that the basis of comparison has somehow helped the situation of China because you remember last year, China was closed for half of the period. So, we had a growth for sure in China. But we continue to have very good results also in Italy and in Europe. In the press release, we have explained that the apparent weakness of Italy and Europe is only due to wholesale. But in terms of retail, the situation was very, very similar to what we had seen in Q3. So a lot of resiliency in terms of local demand and in terms of tourism. For Q4 in the Americas, you remember that we had some help, we can say, from the accounting of what we define the hybrid model, meaning that in the department stores, we had the opportunity to somehow have a retail formula for our sales, meaning that we have done agreement with these department stores, in order to manage the inventory and the cost of the stores. And so these revenues are accounted for as retail revenues. So this is one of the reasons for the, we can say, the boost of retail in the US in Q4. I hope that this is the answer to your first question. Can you confirm? Yeah. So I mean, on the first question, actually, it was more to try to understand if you at the end of February, accumulating January and February, you would be, you know, in the mid-single-digit region, you know, we I would say at the back of the slowdown coming from different comparison basis. No. Now, you're referring to January and February this year. Yeah. No. On this, really, I don't want, really, to give too many figures. What I can tell you, as I already told you, is that if we consider together January and February, so, we can say with a sort of normalization of the basis, we can say that all the regions are growing with maybe the exception of Greater China, which is slightly negative. But really, I cannot give you exactly all the breakdown and all the growth rate in the different regions. And the same answer is for your last question. So, you know, we are not commenting margin-by-brand. And I'm not starting now to do it. Sorry. All right. Thank you very much. The next question is from Andrea Randone of Intermonte. Please go ahead. Thank you. Good evening, Cinzia. Just a couple of questions. The first one is about rental. I mean, especially in the second half, the number is decreasing, also in absolute terms. So if you can elaborate on this trend, also mentioning the net number of openings or closures in your retail network, if this is a reason. And the second question is about your online business. Again, if you can provide us a comment on this line. Thank you. Okay, Andrea. So starting with, I'm checking because the number of the stores, I think you're right. So the difference maybe quarterly, even if you remember that it's really not meaningful just to try to understand line by line the quarterly performance because it's really something that is really volatile. Anyway, looking at the number of the openings, I confirm that in Q4, the net number was only 1, meaning that we opened 5 and we closed 4 stores. So the net addition was only 1, while, for example, in Q3, the net addition was 8. So for sure, there is a sort of deceleration in terms of number of openings that I think can explain your this sort of quarterly difference in terms of rental costs. In terms of, on the contrary, in terms of IFRS, so depreciation, I have to remind you that the total number is higher this year compared to last year by approximately EUR 10 million. Your second question was on e-commerce. So e-commerce is included, you know, in the retail channel. Also, e-commerce was positive, was growing, we can say, very nicely in the year. And we think that it is also due to the fact that we have invested a lot in, also in this channel. You remember that, after the creation of what can be defined the omnichannel distribution, we have a close relationship between the physical stores and the e-commerce. And so we, for sure, have obtained a lot of efficiency in terms of, for example, inventory, in terms of, so improving of the sell-through of the stores and of the channel. We have also completely improved our website for TOD'S and for Hogan. And now, I don't know if you have tried, but also the experience as a customer really confirms that, for example, you can have more because you understand that to buy online a pair of shoes is not easy. But, for example, we have done something like a sort of possibility to try your shoes online. It's like if you put your foot and a sort of image of the shoe appears on your foot. So you can imagine how you will fit the kind of shoes. So we have improved also the experience in our website. And thanks to this situation, we have also improved the sales online. On top of this, consider that, for example, in the US, online is very helpful also to cover the region, the cities sorry, the cities where we don't have a physical distribution. So all in all, we can say that online has increased, we can say, in line with what you see for the retail performance. And now, online is approximately a bit more than 9% of our sales if we consider only the direct online. This figure increased to even 14%-15% if we can add also what we are selling online into the multi-brand platform. Thank you, Cinzia, for your comments. Bye. You're welcome. The next question is from Chiara Battistini of JP Morgan. Please go ahead. Thank you. Ciao, Cinzia. Hello. First question. First, follow up on the comments you made on current trading. That was very helpful on the Chinese. I was just wondering if we could follow up on the Europeans, actually, and what you're seeing with the Europeans and your comment on Europe being up year-to-date. Is that driven by tourists or also Europeans basically performing well? Second question, and I'm not sure if it's for 2024 or not. I'll try. On the price increases for 2024, can you remind us what has been planned and any difference by product category and by brand? And finally, can I please ask you to remind us how much of your supply chain is in-house versus outsourced, by brand, possibly? Thank you. Okay. So, Chiara. Oh. So, Europe, the situation is similar to Q4. So we have the contribution of both the components, meaning that we have really a resilient basis of local clients, what we define our loyal clients that really continue to buy and continue to come back in the stores every season to see what's new and to buy what's new. So we have local demand. But also, it's true that we have the contribution of other tourists, not Chinese, but people coming from Japan, America. America maybe this year less than in last summer. But anyway, they are still here in Italy. We have a lot of, we can say, intra-Europe clients, Middle Eastern people, Japanese, people coming also from Africa. For example, sometimes we have people really coming and buying a lot of shoes just to make their travel effective. I don't know. No, anyway, we have both the components. And so, you remember that we have a really loyal basis of clients, really loyal to the brands since many years. And they are still there. In terms of pricing, what we did this year is the normal inflation recovery. You remember that last year, we did an important, an important increase of prices. This year, we have not repeated it. So just the regular, we can say, 2%-3%. In terms of supply chain, the difference is not by brand, but it's more by product category, meaning that for shoes, we are producing in-house approximately 45%, so a bit less than half of our production. For leather goods, approximately one-third of our production. And for apparel, we are producing in-house zero. All the production of ready-to-wear is made in outsourcing, obviously, because the know-how and the heritage of the group is not in ready-to-wear but is, in the world of leather. Great. Thank you very much, Cinzia. You're welcome. As a reminder, if you wish to register for a question, please press a star and one on your telephone. The next question is from Paola Carboni of EQUITA SIM. Please go ahead. Yes. Hello, everybody. Hi. Ciao, Cinzia. Hi. I have just a question on profitability, not forward-looking but just on 2023. The EBIT that you recorded is apparently a bit above what you and also Emilio suggested in our latest conversations. So I was wondering what was better than you were expecting, and if you can flag any, any specific driver on this. Thank you very much. Okay. Ciao, Paola. I think that the main reason for this, we can say, surprise on EBIT was related to what can be defined as the line cost for services. For example, we had, in our plan, a big event in China for Tod's that we have postponed to beginning of this year. We had also other events, pop-up, so other marketing expenses that we have decided somehow to delay by a few months. So, the most of them is related in cost for services. So we have not made any cost-cutting. But it's also a matter of delaying some projects. And again, it's the result of some efficiencies that we have gained in our supply chain. Okay. Thank you very much. You're welcome. I think so that if there you have not additional question, we can say that, maybe we will talk again in May. No, sorry. I say maybe. I'm joking. So, obviously, it depends on how the calendar of the tender offer will be. Anyway, we have confirmed our financial calendar in the website. And we have already put on the website the documents of tonight, even if the complete report of the financial results will be released in due time, it means by the end of March. And, obviously, you will see as because we will give, we will issue a press release, as soon as we will have these documents available. So thank you to everybody. And good evening to everybody.