Good afternoon, good morning, and thank you for joining On's 2021 Inaugural Conference Call and Webcast For Our Third Quarter 2021 Results. With me today on the call are Executive Co-Chairman and Co-Founder, Caspar Coppetti, CFO and Co-CEO, Martin Hoffmann, and Co-CEO, Marc Maurer. For the first part, Caspar and Martin will lead through the prepared statements. Afterwards, we are looking forward to open the call for a Q&A session. Before we begin, I would like to remind everyone that the remarks during today's call may contain forward-looking statements regarding future events and financial performance within the meaning of the federal securities laws. These forward statements reflect our current expectations and beliefs only, and such statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our final prospectus filed with the SEC relating to the company's IPO on September 16, 2021, for a detailed discussion of the risks that could cause an actual result to differ materially from those expressed or implied in any forward-looking statement made today. Please further note that this call will also contain certain non-IFRS financial measures, such as Adjusted EBITDA and Adjusted EBITDA margin. While the company believes these non-IFRS financial measures will provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for a reconciliation of non-IFRS financial measures to the most comparable measures prepared in accordance with IFRS. With that, I will turn the call over first to Caspar, followed by Martin for the prepared remarks. A warm welcome to all of you joining us today. We're excited to share with you On's first quarterly results as a public company, and we thank you very much for joining this first call following On's successful IPO. We are very pleased to announce that Q3 has been the strongest quarter in the history of the company in terms of net sales, gross profit, and Adjusted EBITDA. Global consumer demand for the On brand continued to strongly accelerate, as expressed by the fact that all channels, regions, and product categories are contributing significantly to On's hyper growth. Who would have thought that our brand, which started 12 years ago with the first prototype consisting of cut pieces of a garden hose glued to the sole of an old running shoe, would develop into a company that generated net sales of CHF 280 million in this past quarter, Q3 2021. We see our recent IPO as a stepping stone in our mission to serve more and more people around the world and have them move with us. We invite everyone to join us on this mission to ignite the human spirit through movement, or in short, Dream On. We will continue to discover and explore new frontiers to do things differently and build long-term enduring value for all our partners and stakeholders. Given that this is our first earnings call and some of you may be new to On, we will start with a brief introduction to our foundation and history, our core strengths and growth strategy, and shed light on how we made progress in the past quarter. We will then deep dive into our quarterly performance and conclude with an outlook and guidance before opening it to Q&A. On is an innovation company. On was born in the Swiss Alps with one goal, to revolutionize the sensation of running based on the radical idea of soft landings followed by explosive takeoffs, or as we call it, running on clouds. On is an innovation company at heart, and we focus our efforts on the three main areas, performance, design, and positive impact. We aspire to increase performance for athletes and everyday consumers by applying smart, distinct, and sustainability-focused designs to our products. We are happy to report that in the past quarter, On has made strong progress on all three fronts. First, we are proud to have been the official outfitter for the Swiss Olympic and Paralympics teams at the Olympic Games in Tokyo. The visibility across the globe, especially of our apparel, led to an increased demand and brand awareness. A personal highlight was watching the women's cross-country mountain biking event, where Swiss athletes won gold, silver and bronze and seeing a full podium in On gear. The Swiss went on to win 27 medals, the best in almost 100 years. We are also proud that 17 athletes competed in On products in Tokyo, including five athletes from the On Athletics Club, founded only a year ago and based in Boulder, Colorado, along with four athletes from the Refugee Olympic Team. To enable our athletes to compete on the highest level in long distance road running and triathlon, we introduced the Cloudboom Echo shortly before the games, both to competitors and consumers. This shoe is the pinnacle of our performance running range, featuring CloudTec and ultralight Super Foam and a carbon speedboard. We have already seen many great results by our athletes in this product, including the third place by Helen Tola at the Berlin Marathon this past September. In the performance running segment, On was able to wow consumers and capture market share with the new Cloudstratus and with the Cloudflyer, which continues to have very strong momentum. Second, On's outstanding design continues to turn heads and our rapid growth in performance all day, as we call our lifestyle business, is driven by two recently added franchises, The Roger Federer's signature, and Cloudnova. Roger Federer's signature footwear line is developing very well, and Roger personally unveiled a limited edition recently at the Laver Cup in Boston, only to see it completely sell out within hours. Both The Roger and Cloudnova are attracting a younger, urban and fashion-conscious consumer to On and are key pillars in our ambition to be a global tastemaker brand. Third, more and more consumers are shopping for full On outfits, including our apparel and accessories. In Q3, net sales from apparel products grew more than twice as fast as sales from shoes, and we have seen a strong demand for exciting new products like the Relaxed-Fit Parka for weather protection all season, our new hoodie, active pants, and climate jacket. All of them reflect our passion for technology, design, and sustainability. Last but not least, we are ready to introduce exciting new footwear and apparel products in performance running, performance outdoor, and performance all day in Q1 next year. Now let's shed some light on the third focal point of On's innovation efforts: sustainability. We are highly committed to decoupling our growth from the footprint that we leave on our planet, and we have committed to some of the most ambitious sustainability targets in the industry. On climate, for example, we are working with Science Based Targets to cut our carbon emissions by 55% through 2030 per product that On produces. We are also one of the first sporting goods brands to join the Science Based Targets for Nature pilot program, going beyond climate and including land, water, forest, and biodiversity. We aspire to be both a thought and action leader for our industry. During the climate summit, COP26 in Glasgow last week, On announced a very ambitious new material, CleanCloud. CleanCloud takes carbon emissions and turns them into EVA foam. This technology, which we have developed over the last four years, has the potential to be used in the majority of On's products. We are now working together with Lanxess and Borealis to make the first pairs and scale the technology for mass production. This is a long-term initiative and one of several technologies that On will build on in our quest to move away from fossil-based materials. What sets On apart is our global footprint. Coming from a very small home market in Switzerland, we needed to expand globally from the very beginning. We believe this early global expansion has been instrumental in driving our net sales CAGR of 85% since inception, making On one of the fastest growing scaled athletic sports companies in the world. We believe this global presence positions us extremely well for future growth within the large global footwear and apparel markets. Over the past 12 years, we have built a passionate global community of fans across more than 60 countries. We believe we have opportunities for continued market share gains across the globe. We are in a growth phase in almost all of our international markets and have significant potential to expand our geographic footprint through controlled multi-channel growth. We have historically been extremely successful when entering new markets. For example, we entered the United States in 2013 and have grown net sales to CHF 136 million in the first nine months of 2020, and CHF 265 million in the nine-month period ended September 30, 2021. We entered China in 2018 and grew our net sales in the region by 199% from CHF 1.8 million in 2019 to CHF 5.5 million in 2020. In the nine months ended September 30, 2021, this number is already at CHF 13.7 million. We are seeing continued very strong growth. During Singles' Day last week, On products sold on Tmall and JD increased by over 500%. Complementary D2C and wholesale in distributing these products, we seek to meet runners wherever they are. After starting off selling on our own website and in specialty running stores, On products are now also available in some of the most reputable general sporting, outdoor fashion, and lifestyle retailers in the world through over 8,100 stores and value-adding online retailers across more than 60 countries. In Q3, we continued to strengthen our partnership with some of the best global retailers. At Harrison London, for example, On launched our first ever trade execution of a new premium On retail concept, featuring a mini version of our own retail store concept. On the lifestyle side, we successfully piloted our collaboration with Foot Locker and with JD at very selective prime locations. Both pilots have proven that our products strongly resonate with an even younger consumer group, and we are excited to continue both partnerships while maintaining On's premium distribution. The wholesale channel accounted for 64% of our net sales for the nine-month period ended September 30, 2021. With On's community and brand awareness growing globally, we have further began to organically scale our D2C channel through onrunning.com and have increased our D2C sales significantly. In September, we have opened our biggest owned and operated On store in Shenzhen. Our D2C channel as a whole, which includes our e-commerce site, a flagship store in New York City, and six retail stores in China, represented 36% of our net sales for the nine-month period ending September 30, 2021. We cannot emphasize enough that we consider our D2C and wholesale channels highly complementary and brand enhancing, and we will continue to invest in the expansion across both channels. A review of the Q3 highlights would not be complete without mentioning the great pleasure of running to the New York Stock Exchange together with our team to ring the opening bell and celebrate our initial public offering on September 15th. It's an honor to now hand over to the person who did most of the heavy lifting for this event, On's CFO and Co-CEO, Martin. Thank you, Caspar. Let's move on to reviewing our financials for the third quarter of 2021. As we mentioned at the beginning of today's call, we see an accelerating demand for our brands globally. Our Q3 results are the strong combination of growth and profitability and a further validation of our business model and our long-term targets. Net sales for the quarter were CHF 218 million, up by 67.6% compared to the third quarter last year, when running had already been on fire and many COVID-19 restrictions had been lifted temporarily. We maintained our strong growth on this elevated level. It is driven by the continued success of On's core strategies, including increasing brand awareness, multi-channel geographic expansion, and the broadening of the product portfolio driven by innovation, design, and sustainability. Year to date, we achieved net sales of CHF 533.5 million, a 77.2% increase compared to the first nine months last year, and a 70.1% CAGR over the past two years, which further validates the strong continued strength of our brand. The demand for our products accelerated across both the wholesale and the direct-to-consumer channel, as well as all regions and all product categories. As Caspar mentioned, we consider our direct-to-consumer and wholesale channel highly complementary. In Q3, we see the strategy being validated by the strong demand in both channels. D2C grew 93% to CHF 75.7 million, and wholesale net sales increased by 56.7% to CHF 142.3 million. Despite the full reopening of retail stores in most key geographies, we see a very strong continued engagement of existing customers and the growth of new customers in our D2C channel. For example, in North America, D2C grew 129% and in Asia Pacific, 152%. Overall, the contribution of net sales from the direct-to-consumer channel grew to 34.7% for the quarter versus 30.2% in the same period last year. We continue to invest in our brand and community by building partnerships with premium wholesale partners. In Q3 2021, consumer demand for the On brand in the wholesale channel increased even further and led to strong growth rates in many of our key and field accounts. Across both channels, we are seeing a strong demand globally, with growth rates in all geographic regions exceeding 50%. North America continues to be the growth engine with a net sales increase of 82.6%, resulting in United States and Canada being responsible for 51.5% of total net sales. The continued acceleration of the demand in North America is best reflected in the fact that D2C sales grew twice as fast as wholesale. As previously mentioned, we see China as one of the key regional growth drivers, which was showcased with strong triple-digit sales growth in the third quarter. The Asia Pacific region in total grew by 71.4%, with the significant growth in China being somewhat offset by a slowdown in Australia's wholesale market as local lockdowns continued into Q3. Also in Europe, most markets continue to grow strongly with an overall regional growth of 50.3%. Here, it is important to highlight that different from most other regions, many European markets had lifted COVID restrictions in Q3 2020, which had driven higher wholesale sales in the same period last year. The growth across our distribution network is fueled by the successful expansion and development of our innovation-driven products. Across all our product categories and all key franchises, the demand is accelerating. Net sales in Q3 2021 increased 65.2% for shoes, 133% for apparel, and 41.5% for accessories. For the first time, apparel contributed more than CHF 10 million in one quarter to our overall net sales. Consumer demand is clearly there, and in On's own stores in China, apparel already contributes approximately 20% of the sales. Gross profit in the third quarter was CHF 131.3 million, compared to CHF 70.8 million in Q3 2020. Our gross profit margin increased year over year from 54.5% in Q3 2020 to 60.2% in Q3 2021. This is broadly in line with the strong results we have seen in previous two quarters and another validation of our long-term targets. The increase primarily reflects lower customs costs related to the free trade agreement between Vietnam and Europe, lower sourcing costs, and a very low share of air-freighted products in Q3. In the first nine months of 2021, gross profit increased by 90.9% to CHF 318.5 million, reflecting an improvement of our gross profit margin from 55.4% - 59.7%. If we leave our share-based compensation for the moment, SG&A expenses as a percentage of net sales were 48.5% for Q3 2021, compared to 39.6% for the same period last year. More comparable year-to-date SG&A expenses without share-based compensation were 48.7% of net sales for 2021, compared to 45.3% for the same period last year. This increase is mainly driven by higher investments in digital customer acquisition and demand creation expenses, and the resumption of investment in grassroots activities post COVID-19 pandemic lockdowns. In addition, we incurred CHF 7.3 million IPO transaction costs. Moving on to share-based compensation, which is worth looking at in an isolated way, in a bit more detailed manner. Share-based compensation expenses in Q3 2021 decreased to CHF 2.4 million, or 1% of net sales, from CHF 5.3 million or 4.1% of net sales in the prior year period. This change is primarily due to a one-off transaction in 2020. Driven by the strong growth acceleration in the past years and by the successful IPO, we expect to grant approximately 7.5 million additional stock-based awards under our existing equity plan in Q4 2021. Due to the timing of such plans, this impact is not included in our Q3 numbers. Adjusted EBITDA, which excludes share-based compensation and one-off transaction costs related to the IPO, was CHF 37.9 million for the three-month period ended September 30, 2021, up from CHF 22.6 million in the prior year period. The EBITDA margin remained consistent YoY for the three-month period at 17.4%. Year to date, Adjusted EBITDA increased by 121% from CHF 38.6 million to CHF 85.2 million. As a percent of net sales, Adjusted EBITDA increased year to date from 12.8% to 16% and validates our commitment to simultaneously grow net sales and profitability. Shifting to our balance sheet and cash flow. On September 15th, and prior to the end of our third quarter, we completed our initial public offering at the New York Stock Exchange, in which we and certain selling shareholders sold an aggregate of 35,765,000 Class A ordinary shares at a share price of $24. The net proceeds from the IPO for On were CHF 616 million or $662 million. This has led to a very strong position of net cash and cash equivalents of CHF 672.1 million, which will enable us to pursue our ambitious growth plans. Now let's look ahead. We are confident that demand for our products will remain very strong across all regions, all channels, and all product categories. Before we detail out our financial outlook, and in order to provide a better understanding of the expected financial performance, we would like to share the recent developments and our short-term outlook of the situation in Vietnam and throughout the supply chain. There are two challenges that are connected and that will impact our financial performance in the upcoming quarters. Most significantly, we expect supply constraints and the higher air freight expenses as a result of the recent factory closures in the south of Vietnam. The quantification and mitigation of this impact is being accentuated by a very volatile freight and distribution costs, driven by higher freight and shipping charges and higher warehouse labor expenses. During Q3 2021, our production partners in the south of Vietnam were affected by government-mandated closures to combat the spread of COVID-19. The impacted factories represent about 70% of our production capacity. The closure started in July 2021, and factories remained closed as of 30th of September 2021. As of beginning of October, we have seen a gradual reopening and ramp up. Our key message today is that all factories are open since early November, and as of this week, operate at more than 80% of our planned production capacity. To put this number into perspective, it is very important to highlight the fact that our planned production capacity was based on the anticipation of a continued hypergrowth in 2021 as well as in 2022. Versus those goals until today, the cumulative loss of capacity in the affected region is approximately 12 weeks. To mitigate the impact on our business, we continue to take actions, including the reallocation and prioritization of products across all factory partners and the use of air freight to balance inventory levels against the strong demand. In addition, already as of Q1 next year, we secured a significant amount of additional production capacity at two new factory partners in Indonesia. We expect to use air freight to be a headwind to our gross margin of approximately 900 basis points - 1,000 basis points in Q4 2021 and in Q1 2022. In addition, we are working closely with our retail partners to maximize the number of products available to our end consumers. These measures include a holistic management of all available inventory and the adjustment of launch dates for new products. We are confident that the supply chain disruptions in Vietnam are temporary and that our pricing power will allow us to compensate increased freight and distribution costs in the mid to long term with selective price increases. Turning now to our financial outlook. As this is our first time to provide financial guidance to the public market, we would like to briefly explain how it should be interpreted. Philosophically, we aim to provide prudent, yet aspirational guidance that appropriately balances our optimism in the business with potential risks or headwinds we face. We will provide guidance for the full year, not on a quarterly basis, as this is mirroring the way we steer the business internally, and it allows us to take a long-term growth perspective. For Q4 2021 and H1 2022, we are expecting our financial results to be constrained by the mentioned supply chain challenges. We see the demand clearly above the available supply. Given the current uncertainties in the supply chain, we will prioritize top line over profitability in order to protect our retail partners and our long-term growth. Now, for the full year 2021, we expect net sales of CHF 710 million, representing 67% YoY growth. Our outlook reflects the supply restrictions that we foresee in the last three months of the year. We have started to air freight selected products from factories after reopening to fulfill the demand. Nevertheless, we are still expecting limited product availabilities in the fourth quarter. Independent of the supply chain disruptions, we have taken the strategic decision to shift the launch of our spring/summer season products from Q4 into Q1, which will result in a general shift of our seasonality. We expect Adjusted EBITDA of CHF 92 million, representing an Adjusted EBITDA margin of 13% and a YoY growth of 85%. We will continue to air freight products throughout Q4. In addition, we will drive investment in brand building with strong investment into returning physical global major running events, like the New York City Marathon, into upper funnel marketing during the holiday season, but also continue investments into our team. As earlier indicated, we expect to grant additional stock-based compensation awards under our existing share-based compensation plans. These awards will vest at the grant date and therefore, we will record a material share-based compensation charge of approximately CHF 173 million in the fourth quarter of 2021, and consequently, significantly impact our Q4 unadjusted net profit. As of 2022, we expect an annual dilution from our equity plans of approximately 1.5%. Looking beyond 2021, we are very confident that the supply chain challenges, especially the supply chain constraints, are temporary, and that we should fully focus on our long-term growth opportunities. Especially in H1, we expect net sales to be adversely impacted and final product availability depends on the continued factory ramp-ups and availability and cost of air freight capacity. Currently, we expect a return to strong hypergrowth in the second half of the year, and we expect at least CHF 960 million net sales, even though our internal ambition is higher than that. We expect to have better visibility in the new year on how quickly we can get additional capacity, and we will revisit the guidance then. To be very clear again, we are experiencing a transitory supply shortage, not a demand issue. This is not a new situation for On. Over the last decade, the strong demand for the On brand has regularly outpaced supply, and we have experience in turning this into an advantage for On by tightly controlling distribution to ensure sustainable quality growth. In the first half of 2022, we will face supply shortages on certain products that are higher than what we would like, and not all consumers will have the ability to buy exactly the product they are looking for. However, we believe in the long run, it will only increase this, the desirability of the On brand. A tight control of the increase of our SG&A cost base in the first half year will allow us to partially mitigate higher freight and distribution expenses. Consequently, we expect Adjusted EBITDA of CHF 125 million and to maintain our Adjusted EBITDA margin of 13%. As said before, to mitigate the disruptions across the international supply chain, we will prioritize net sales growth over profitability. In conclusion, we are very proud of our recent performance and excited for the opportunities ahead. Most important, we are extremely proud of our team all around the world for their passion to grow On at such an incredible speed and for all the hard work that is required to adapt to the fast-changing environment. Thank you so much. For the future, we have the right team of talent in place to drive innovation and to develop exciting products, to engage with our customers in wholesale, online, and our own retail, to continue building a premium brand globally, to make the world a better and more sustainable place, to use our voice to build a more diverse and inclusive run community together with our industry partners, all with the goal to deliver on our mission, to ignite the human spirit through movement and to dream On as a team. With that, Caspar, Marc, Florian, and I would like to open up the session to your questions. Thank you for your continued support and trust. Operator, we are ready to begin the Q&A session. Thank you. If you would like to ask a question on today's call, please press star followed by one on your telephone keypad. If you do change your mind, please press star followed by two and ensure that you are unmuted locally when you go to ask your question. We'll be taking our first question today from Kimberly Greenberger of Morgan Stanley. Kimberly, over to you. Great. Thank you so much. Good afternoon and congratulations on the fantastic quarter, right here, out of the gate. I wanted to ask about your expansion of factory capacity. I know you were working on diversifying your sourcing base even prior to COVID. If you just sort of step back and think about the goals that you've got for the business over the next two, three, four years, what's your philosophy about how to develop additional factory capacity and diversify your sourcing base in order to maybe at least partially shield from some of the volatility we're seeing concentrated in Vietnam right now? Thanks so much. Yes, welcome everyone also from my side. This is Marc Maurer speaking, and thank you so much, Kimberly, for your question. I think, you know, what we already started doing some time ago is we started to prioritize agility over efficiency. That really has allowed us now also to deliver the quarter that we delivered and to navigate through some of the challenges that we saw over the last years on the demand side, but also on the supply side. We will continue to build a very agile and nimble sourcing environment and supply chain environment. What that means is, first, we'll try to diversify into more countries. Ideally also countries that are closer to the consumer, or some of our consumers, for example, in Europe or closer to North America, as long as the capabilities are there and it is meaningful for us to do so, and we have pilots running in certain countries. The second thing that we continue to do is we will continue to dual source our key styles and key materials. This is another reason why we were able to move volume around pretty quickly and why basically as soon as the factories reopened, we could start full speed right out of the gate because the materials and the components were there. We wanna create and continue to create redundancies on the supply chain side, so we can react to very, very fast changing environment that we basically see there. I think, you know, third, obviously, we feel that labor will continue to be a very constrained resource and even become more constrained over time. We're working heavily with all our partners to reduce the dependency on labor, be it in warehouses, but also be it on the factory side and to make sure we are able to automate more and more parts of the processes. That is very clear, Marc. Thank you so much. I wanted to ask about wholesale as well, if I could. The wholesale revenue this quarter came in well above our expectations. I'm wondering if you can talk about the additional expansion in wholesale, any new partners you brought on here this year and what you're seeing in terms of demand in that channel. Thanks so much. Thank you, Kimberly. I'm also gonna answer that one. On, you know, on the wholesale side, so in the end, the demand that we're seeing, we're seeing that coming from end consumers in the key segments that we're in, running outdoor and performance all day. These end consumers shop on our own website and through our own channels, but also with our most important wholesale partners. The wholesale partners are looking at that demand very, very positively. The orders and the order book that we're seeing for the next six months, spring, summer is way above basically kind of what we could have expected. Again, we have supply constraints for the first month, and we're right now taking orders for the second half of the season. What this allows us to do with this very strong demand is have a very, very, thought through approach on how to expand our wholesale channels, take the right decisions and work with the right partners at the right time. As part of that, we're doing certain trials. We've piloted 32 Foot Locker doors in the U.S. We've piloted 10 JD doors in the U.S. and 10 JD doors in Europe, and we're seeing very, very strong results. We will take wholesale decisions that allow us to basically, you know, go after our mission and some of our key targets, one of it being in the end, you know, the number one brand on runner's feet. You can expect us to expand wholesale in a way we can be very successful, for example, with runners in the U.S. and around the globe. Terrific. Thanks so much and good luck here. Thank you, Kimberly. We'll be taking our next question today from Grace Smalley of Morgan Stanley. Grace, please go ahead. Hi. Thank you. This is Grace Smalley. Thank you for taking my question. I guess firstly, just given the current supply constraints that you are seeing, how are you prioritizing the product allocation between your wholesale partners and your direct to consumer channels? You mentioned your pricing power and potential selective price increases in the medium or long term. Can you comment on whether you're planning any price increases for next year and also any cost pressures as we've heard from some of your competitors? Thank you. I'll quickly speak to the first one, and Martin will speak to the pricing question. You know, we spoke about that a few times in the past as well, and it's very important to understand that On is a true omni-channel brand. With that, we're taking a consumer perspective. We wanna have the product available for the consumer that wants that product through the channel of the consumer's choice. What that means is basically when you look at our running products, we will treat our key running partners and our own D2C business on the same level when it comes to product prioritization. We will do the same on outdoor and the same on the performance all day side. Now, as you know, there's a very, very strong demand on the direct to consumer side, and that product prioritization is reflected accordingly in the outlook that we gave. Just one additional comment, which is important here. We also feel that kind of the next couple of months are a great opportunity to continue to build shelf space with some of our key partners, and that's also one of the reasons why we prioritize top line, so we can, you know, gain additional shelf space with some of our key partners and can, you know, through that kind of take that into 2022, 2023 as well. Grace, focusing on the price increase question. On is a premium brand, and we have significant pricing power. We have also made it in this premium price level, especially also versus our competitors. We are planning selective price increases in spring 2022. They will focus on North America, and they will be relevant for about 40% of our volume. Great. Thank you. If I may just follow up with a broader question on the industry. It seems that running footwear seems to be a bright spot across all brands currently. Just wondering what your thoughts are on what is driving the category strength. Clearly it benefited during COVID, but it seems to have gone from strength to strength even as economies reopen. Thank you. Thank you, Grace. This is Caspar. Yeah, I mean, you mentioned some of the factors. You know, running is a habit, and many of On this call are probably runners. You know, once you get to the point where you can run twice, three, four times a week, it's hard to let go because it gives you a very good sensation. Those habits that were formed during the pandemic are definitely still in play. Let's also not forget, you know, while, when consumers now go back to their gyms, a lot of people do running in gyms on treadmills as well. We're a little bit less exposed as an industry to the return to gyms because running is now a part of every workout. Yes, participation in the sport is up and we are in a lucky position that we can not only just grow with the industry but we can take significant market share, given the way we have been able to manage our supply and plan for hypergrowth going into 2022. Perfect. Thank you all very much. Thank you, Grace. We're now going to move over to Michael Binetti of Credit Suisse. Michael, please go ahead. Hey, thank you guys. Thanks for all the detail and congrats on your first quarter here at public. I just wanted to ask you maybe on the new distribution. You mentioned a few stores with Foot Locker and a few with JD, and I know that you guys have had product in Foot Locker in the past. I think it was a long time ago, and I think at the time the thinking on why that didn't go forward a while ago was because you needed probably to bring more of a fashion component to it. You mentioned a few references to lifestyle early on. I know you've been investing in the design team and in some of the assets needed to push farther on the lifestyle side. I'd be curious to hear where you feel like you are on that and how much opportunity there is in retailers like Foot Locker and JD in the near term. Is that something that we could see start to accelerate significantly here as you know, driven by some of the lifestyle stuff you guys have been working on? Thank you for the question. You know, as you can imagine, over eight years, On has evolved as a brand since we were in Foot Locker at the last time. You know, the reason why we feel working with partners like Foot Locker and JD is beneficial. Just want to point out a few, right? First of all, we're starting from a consumer perspective, and we feel On has an opportunity to target even younger consumer than we already have. Foot Locker and JD are great channels to target that younger consumer, and we do have the product for that consumer. This is what the tests are showing. The product, especially the Cloudnova, is resonating extremely well with that consumer base. We very much feel this is an opportunity to capture that additional opportunity. Second topic is On is attracting a very female consumer as well, and we are able to bring a more female consumer into some of these channels, which they very much appreciate. We're creating kind of a win-win situation in there. Probably third one, you know, we're working a lot on tiering the product. JD and Foot Locker have a very differentiated product assortment to, for example, Fleet Feet or some of our own specialty retailers. We feel On has a size and has an assortment, so we can efficiently target several consumer segments through different partners with a very, very detailed tiering, always staying premium in terms of who we partner with, but also in terms of pricing. First trials show that this is successfully working and you can expect On to take additional moves but always you know really, really thought through and slow making sure we're taking the right steps at the right time. Thanks. If I could ask a follow-up. As you look at next year, I thought it was interesting that you were able to guide us to stable 13% EBITDA margins. Frankly, that's not far off what we heard as we talked with you through the IPO process about where you thought the business would be next year. You did point to some very heavy gross margin pressure from air freight. I know that starts in the fourth quarter and into the first quarter. I think that makes it very impressive that you're able to still guide to flat EBITDA margins next year. Maybe could you help us think about maybe some of the how to think about SG&A versus gross margin next year? How you're building to that in your model, and maybe even first half versus second half so that we understand what some of the dynamics are gonna be here as you guys go through the supply constraint that you pointed to? Yeah, happy to, Michael. So I think looking at our Q3 results, that validates our long-term targets that we discussed and given. For Q4 now and also for half year one next year, we expect that those long-term goals are impacted by higher and above average air freight cost, which is the key driver for lower gross profit margin and also EBITDA margin. This impact is in the end reflected in the 13% guidance that we have given both in 2021, which foresees the impact in Q4 and then for 2022, which foresees the impact in half year one. We also considered in there the upsides from the price increases and also as we are always committed to grow top line and profitability in line. Of course, we will also grow our SG&A cost base carefully and under consideration of the current circumstances and the higher freight cost. We also mentioned it on the call, especially in the next two quarters, we will clearly prioritize our top line versus profitability, because for us, it's super important that our consumers can buy our products, that our retailers have sufficient amount of product that we keep our shelf space. This has been also considered in the 900 basis points - 1,000 basis points impact from the air freight that we foresee in Q4 and Q1. Okay, very helpful. Congrats again, guys. Thank you. Thank you, Michael. Thank you. Thank you, Michael. We'll now be taking our next question from Jay Sole of UBS. Jay, please proceed with your question. Great. Thank you so much. Would it be possible to elaborate a little bit on the growth you saw in Europe in the quarter? You know, was the strength concentrated in some of your, you know, the countries like Germany and Switzerland, where, you know, the company has a strong base? I mean, was the growth broad-based? Are you seeing increasing momentum in some of the other countries across Europe? Thank you. Thank you. Thank you for the question. The good thing is, I mean, we're seeing the growth is very much distributed across many countries. It's also on the wholesale side, definitely impacted by some kind of lockdowns that we still saw happening not in the third quarter, but beforehand. What we're seeing in the U.K. is very strong. The U.K. is still comparably a bit smaller to some of the other markets, and we're investing heavily. This has been very, very positive. Germany, Switzerland, as well as Austria continue to basically deliver strong results. We see that we have a lot of opportunity still in France, for example. We're putting kind of, you know, lots of pieces in place so we can capture that. The other thing I want to point out, which we didn't talk about yet, is that it's not only footwear that has delivered to it. Especially also apparel has been very strong in some of our European markets and has delivered a very, very strong growth rate there. Great. If I can ask you know, just about the fiscal 2022 guidance. You know, based on what you've seen from the you know, the stores that you have opened, I mean, what is your thought about store growth as we, you know, think about, you know, the model for 2022 and also e-commerce? You know, what e-commerce capabilities will you add to be able to enhance the e-commerce growth that you'll have all over the world? Thank you. Let me quickly start on store growth. Maybe Caspar, you can elaborate a bit more on the e-commerce side. On the store side, the biggest part of the stores will definitely come from China as we're continuing to build our network of stores in China. We're already at eight stores as of today, and they're all working very well and you know, together with Tmall and JD, really shaping that environment. At the same time, we'll continue to roll out On experiences in the key cities across the globe. We're planning to roll out to, for example, Tokyo and London as some of the next locations. You can also expect some of the key cities in the U.S. to get a fully owned On experience. You know, away from retail partners, we have the opportunity to bring On to life in a very, very differentiated way together with them. We spoke about Harrods. You know, we're having a concept that we're starting to roll out with Nordstrom, for example, that has delivered very, very strong results, especially also on the apparel side. We'll definitely continue to build this all-encompassing brand experience. Happy to follow up on the DTC question. We're seeing very, very strong demand across all regions, and a lot of that demand is converted in our own DTC website. You know, if you look at the mix, the ratio between new customers and existing customers roughly stays the same, which means that we still bring a lot of new people to the On brand. At the same time, you know, the elevated brand awareness that we're seeing, especially in the U.S. now through the IPO, drives more consumers to our website on their own terms. This is something that when you look into the next year, we will continue to explore how do we find ways or continue to find ways where we're not too reliant on the two big online ad providers, but we have many channels that lead consumers to our website. We're also investing in our own data capture, our analytics on our own website. We're planning to bring a new web store online in the second half next year. There are a number of initiatives that will continue to drive our DTC push and will continue that the DTC channel is growing faster than the wholesale channel. Terrific. Thank you so much. Thank you, Jay. Taking our next question, we're gonna move over to Jim Duffy of Stifel. Jim, the line's yours. Thank you. Hello, everyone. Terrific quarter and outlook given the challenging backdrop. I'm hoping you guys can speak in more detail about the product pipeline looking into 2022, both key new franchises and important updates to look for from existing franchises. Can you maybe touch on the influence of manufacturing disruption on the new release calendar? I'm happy to talk about the new franchises, and then Marc, you can probably take the question on the release calendar. You know, we have the three business units: the running, outdoor and lifestyle side. In running, our goal is to be the number one brand on runner's feet. We're actually adding three very exciting franchises next year that will help us get broader acceptance even and hopefully push our market share well above 10%. The first one is the Cloudrunner, which will be launched in spring. It's a supportive, well-cushioned shoe at $150. The second one is the Cloudgo, which is the neutral version of that, the same price point that we expect to be our biggest franchise once it gains, you know, enough distribution, and we get it enough people's feet. The Cloudmonster is our most cushioned product to date, so really this max cushioning segment that's sitting on top of the Cloudstratus, which is already, I think, one of the top spots in current distribution that we launched only in July. That's on the running side. On the outdoor side, we have an update of our hiking boot, which has already taken quite some market share, especially here in Europe, in the Alps, but also resonates well with stores like an REI in North America. We're adding a multifunctional outdoor product, where it's called the Cloudwander, the kind of like a mid-cut product, that will be very, very popular for people that are not going to the extreme outdoors, but are looking for a waterproof shoe that protects them well. On the performance all day or lifestyle segment, we're adding two silhouettes that we have just now presented in our global meeting last week. Two very easy to wear. One is called the Cloudeasy, basically an ultralight slip-on product. Also quite interesting from a sustainability point of view because it's made out of only six parts versus like an average 30 or 35 parts that we construct our products of. Last but not least, the Cloudrift, which is kind of like inspired by track heritage, and brings a new silhouette to the lifestyle channel. Thank you, Caspar, for the overview on the footwear side. Please let me reiterate again that, you know, our apparel growth this quarter was 133%, so there's also a lot of apparel launches coming up next year, and we foresee all of those to happen as planned. There's no impact on the apparel side from a production perspective. Now, when it comes to launch dates, let's probably just quickly look at the first quarter because that's the quarter that's most impacted by it. We will launch the next iteration of the Cloud in the first quarter as planned. We're able to go ahead with that launch as planned. We're also able to go ahead with the launch of the Cloudmonster as planned in the first quarter. The main impact is gonna happen on the Cloudrunner, and that's gonna launch slightly delayed, and we will communicate to our most important retail partners that launch date as soon as it is available. Again, our philosophy is to make sure that the product that is most relevant to the consumers, and they already know it, is available. We will prioritize existing products over new launches as they're also contributing a huge part of revenues. Excellent. Thanks for that detailed overview of the pipeline, guys. Caspar, a really exciting announcement around CleanCloud™. Can you speak more about that development process for CleanCloud™, availability, timing, and the lead you believe that provides you relative to competitors in the marketplace? Absolutely. I'm glad that you're as excited as we are. Look, we have a long-term vision of moving away from petrol-based raw materials and to full circularity. You know, with the view of taking our product back and making new ones out of them. The timeline, as you can imagine, is challenging, and it will be a little bit of a moving target. But we hope to get there, you know, say majority of our products are no longer petrol-based. We should get there well before the end of the decade. And circularity will depend on how quickly we can build the return networks. And there we're also looking into not just doing our own system, but partnering with the industry and retailers and what have you. Now, when it comes to CleanCloud™, this is a project that started about four or five years ago, and it came from the insight that there were some biofuels available where companies started capturing carbon from the air and turning it into, for example, jet fuel. That was basically, hey, if you can make jet fuel, you can make plastics, and you can make the stuff that we make our product from. It was a very challenging time. We followed maybe three or four leads on technologies during this time. Without going into too much detail, one of them entailed actually building a chemical processing plant here somewhere in a small valley in the Alps in Switzerland that had access to hydropower because some of these processes are quite energy intense. Whenever we kind of felt like yeah now we're there, another hurdle came up. With this latest announcement, we feel that we're very close to bringing this to scale. We found two very strong partners. Borealis had already been a partner for four years, helping us develop the compound, and we've already tested it. This compound is performant enough to hit most, potentially more than half of our product range. Lanzatec really providing a very efficient way of capturing carbon monoxide at the exhaust pipe of a cement factory, and also providing large enough quantities of it. They also use an efficient process that is not as energy-intensive by using enzymes to turn it into ethanol, and ethanol is the base for most of the products that we make. Currently we're making the first foams that we hopefully can showcase later. I would say by the middle of next year. A shoe fully made out of captured carbon. We're negotiating currently with both Lanzatec and Borealis how quickly we can scale this up. This requires major investment on their part and ours. Basically, we have to build a plant to process this. At the same time, I think it's important to state that we're not just banking on one technology. We have about three or four technologies that we're looking at that are non-fossil based. Some of them, for example, are post-consumer waste. Just to make sure that the, you know, we will have multiple supply chains available and also can get to scale. This is, as you know, very dear to our hearts at On. We don't wanna show concepts to the world. We wanna show a way of how can we move this to scale quickly. That's what we're working on together with these two partners at the moment. Outstanding stuff. Thank you. Very exciting. Thank you, Jim. We're now gonna move on to our question from Jonathan Komp of Baird. Jonathan, please go ahead. Yeah, thank you very much. I wanna ask about 2022. I know you're guiding revenue to grow 35%, despite the headwinds in the first half. I'm wondering if it's possible to comment on the growth you might be able to achieve for the year if it weren't for the constraints that you mentioned on the supply chain. When you think about the second half of 2022, is it possible to maybe highlight the most important drivers that you see to the strong growth that you're guiding to? Starting with this, with the second part, Jonathan, I think Marc Maurer was mentioning that we are now in the discussions with our key accounts about their fall/winter orders, so it's effectively the order for the second half of the year, with a lot of very strong feedback from their side. We have our orders for the first half of the year where we will face the supply constraints and we will be able to fulfill the full demand. This is where we get the confidence from. As demand on our direct to consumer channel, Caspar Coppetti was mentioning that where we still see strong growth rates of new customers, of repeat customers. As we pointed out, we see that in the second half of the year, we will return to hyper growth, so in the range of 40%-50%. Respectively in the first half, our number is constrained by the supply. Given the feedback that we get from our retail partners, we would have seen a similar growth rate in the first half as well. Yeah, that's very helpful. Thank you. One bigger picture question. When you look at your business across the main categories, running, outdoor and performance all day or lifestyle, how do you think about the long-term dynamic between those categories and even sort of what your business might look like longer term if you roughly split across those broad categories? Yeah, look, Look, On is an innovative company. Sorry, Caspar, go. Okay. You know, most of the segments that we're in are heavily inspired by performance and that's the foundation of our brand. We're an innovation company at heart and we bring technologies and solutions to all segments that help consumers have a better experience. In running, that means they run faster, injury-free, lighter. In outdoor and lifestyle, basically they just feel better. They're able to move more effortlessly. They will sweat less. These are mega trends that we're banking on. You know, we're not really looking or we don't even steer. Do we have a growth goal for lifestyle versus running? We feel that, you know, the consumers now expect versatile products. Most of our products can live in one or two of the eight, maybe sometimes three, of these worlds. That's what's been driving some of the success of the brand, that we're not just making kind of like a very narrow use case product. That makes sense. Very helpful to hear. It's very important to me. On is, as Casper pointed out, you know, an innovation company at heart, and it's rooted in running. We'll make sure that they, from a communication and also a brand perception perspective, very much rooted in running. This will also drive the, for example, that we're That's great. Thanks again. Thank you, Jonathan. We're now gonna take a question from Cristina Fernández of Telsey. Cristina, over to you. Good afternoon and congratulations on a good first quarter. You know, I wanted to see if for next year, can you help us think about growth for the different regions, you know, any puts and takes, you know, based on inventory, distribution and also some of the initiatives you have with your wholesale partners. Let's look at the three main regions, I think, which is basically North America, Europe, and APAC. If you look at North America, North America will continue to be the key growth driver of On next year as well. In terms of absolute number, but also in terms of the growth that we're seeing, and very much also driven by our direct-to-consumer channel. When you look at Europe, there is markets where On is already a bit more established like Switzerland, Austria, and some parts of Germany. There's a lot of opportunity to continue to grow, for example, in the U.K. and France as we already elaborated. Europe will continue to have growth momentum, but it will be a little bit slower. We're expecting it to be a little bit slower than in the U.S. Then Asia-Pacific, very much driven, more and more by China, which sees incredible momentum. You've heard in the statement upfront also on some of the Q3 events that we had that on double eleven. Very strong momentum that we're seeing there, and we assume that the strongest percentage growth number will come from Asia-Pacific or specifically China. Now inventory, luckily again, we are, you know, we are working very hard on having a very nimble and agile supply chain. That also means that we can react to market differences very, very fast. This is also what you saw reflected in our 2020 results on the demand side as we were basically maneuvering between different markets that had accrued COVID lockdowns. We are confident that we can make sure that the inventories in the warehouse are according to the demands that we're foreseeing and planning. Thanks. Very helpful. Then a second question, maybe just bigger picture. On the marketing message, you know, as you launch new products, should we think about, you know, the marketing being, you know, different, maybe spread out more, you know, across more categories and products, and is it still kind of 12%? Is that a good absolute dollar spend as a percentage of sales that we should think about over the next, you know, 2022 and the next couple of years? Yeah. Happy to take that. We mentioned this, that with the growth, we will have more opportunities to also invest into upper funnel marketing and into brand build, put more in the build. We indicated and our brand igniting human spirit through movement. We also had a great activations around our new concept of point two at the New York Marathon in London. At the same time, of course, we see physical events returning, and we will be present at those events as well to work with our community and present the brand there. In conclusion, we expect that our spending on marketing will stay in a similar range today. First, we will have more money available for upper funnel brand building investments. Of course, also, in our direct to consumer channel, heavily spending on the digital side. Thank you. Thank you, Cristina. We'll take our last question today from Sam Poser of Williams Trading. Sam, please go ahead. Thank you very much for taking my question. I'm just wondering about how you allocate product specifically, versus, you know, you talk a lot about what the customers want and what the demand is. But, I mean, how are you planning to keep that supply below demand once the supply chain eases? And are possibly any of the big order backlog that you're seeing the results, because we're hearing this from other people that retailers are writing a lot of orders just because they know they're not gonna get what they want. Demand may be overstated because of the supply chain disruption. Yes. Thank you. Thank you for the observation. I mean, On has been built over the last 11 years as a premium brand, and part of that has been consistently keeping basically supply below demand. That has been very, very important to us. When we're taking decisions on how to grow the business, we're always doing that with that framework in mind. We don't foresee right now for the foreseeable future that demand is slowing down to an extent that you know we wouldn't kind of or we would have too much supply. With that, in order to make that statement, I think it's very important for us to have access to in-stock basically reports from all our retailers and sell-out data. We know very, very well, kind of what their sellout looks like, and we understand for a large part of our business, what the product is that is in the market. We're very much steering the business also from that perspective. Please imagine when we do a sell-in with the retailer, we're not just selling products. We're looking at what is the right product for them to sell out, and then we're planning basically the business accordingly. This is very much how we're looking at it. Did I miss- Thank you very much. Was there a second part, I think? Does that answer your question? That answered my question. Thank you. Perfect. Thank you. Thank you. Thank you very much. Thanks for your time and for your questions, and speak soon again. Have a great day, everybody. Thank you very much. Goodbye.