It's 2 minutes past 6. Good evening everybody.

Thank you for for joining the call. Just to inform everybody, the the call will be recorded as as usual for our internal purposes.

We will be presenting BasicNet half-year results as reviewed and approved by the board of directors this morning here in Torino. I will be sharing the presentation, which is already available on our website.

Okay. Before getting into into the details, the the semester we will be commenting today has been, as you can understand and imagine, a very peculiar one.

It's the first semester in which we integrate our latest acquisitions, Woolrich and and Sundek, whose integration process is is still underway. The group now has a very, very different face, which which is not yet the the landing one.

We are in the in the middle of an integration process, which of course we we expected and and forecasted. We we expect to see the results from the end of this year.

Very in short, the the semester we we will present and comment together today has been characterized by a strong and a positive commercial activity, especially compared to the environment we move inside. Also it also reports a a lower marginality than than usual, for basically for for the reason I was mentioning before.

We are still in between a process which is actually been a little bit faster than than we expected in the actions we put in place. This of course also resulted with an increase of debt, which comes from from our strong seasonality.

For those who are familiar with the group and know the group in in general, our brands so, I'm talking about those pre-acquisition are mostly H2 brands, and especially K-Way, as you can imagine, is a very strong winter, fall/winter brand. Kappa has a very, very strong back-to-school and a sport component, which comes in commercial perspective in in Q3.

Sebago and Superga still relatively small brands. Woolrich is definitely a very H2 brand, and Sundek is is a summer brand.

Summer brand, which means its commercial activity is focused across Q2 and Q3 for the the retail activity, especially the the brick and mortar. Getting into the figures, the aggregated sales of licensees together with our direct sales have been up 15% compared to to last year, here including also so, this is not a totally like-for-like comparison, because we started integrating the sales from from Woolrich and and Sundek as well, which together combine for roughly €39 million in in in the first semester.

That goes equally for the consolidated revenues, which are the combination of our direct sales, royalties coming from commercial licensees, sourcing commissions coming from the production licensees, and a a very small portion of the real estate revenues that comes from third parties. EBITDA, as I as as as I mentioned as a first thing, is down compared to to last year.

Here, we're comparing two pro forma figures, both for 2026 and 2025. In 2025, as you may remember, our P&L included several costs, I would say transaction costs related to the K-Way transaction, our sale of 40% circa of of the shares in K-Way to Permira, which for comparison purposes were were eliminated in a pro forma view.

Whereas this year, we do we do exclude in the pro forma the one-off non-recurrent non-recurring costs related to the the severance of a high number of people from Woolrich headquarter will not move here in Torino from from Bologna, the costs of leaving the the headquarter itself. Whereas in here, we we we preferred not not to pro forma, and so to leave the the costs here, we still have some costs which will not be repeated in a run rate.

Basically the the the current costs for all these resources and the the same goes for for the building, and the store we closed, the showroom we closed is still within the EBITDA, okay? On a run-rate basis, this figure is significantly higher.

Net financial position, the the comparison with with H1 last year is a is a bit complicated. Last year, we had just completed the the K-Way transaction, which brought €170 million within BasicNet Group, and none of the acquisitions, which were all focused through year-end, across November to December, meaning Woolrich, Sundek, and also Sebago France, our our big licensee for for Sebago brand in France.

Over over the semester, we also kept investing with with a large portion of of investments, and thus the the cash-out on the real estate, as we've been renovating the building here in Torino also for for the integration of the new brands requiring requiring additional space, plus we purchased a a new building just across the the road, the one where basically our president started his entrepreneurial life, plus we we kept investing on the the retail on the retail channel with openings, especially for K-Way and Sebago. When getting into each of these indicators, the aggregated sales have reported a varied performance across different brands and different geographies.

Europe is steadily our most relevant market. That that was the case before the acquisitions.

As in the case of Woolrich, we only own the IP for the European market, which of course even increases the the the weight of Europe on our overall overall revenues. Whereas for Sundek, we do have worldwide rights, but again, the activity is mostly focused in Italy, France, and and Spain.

In in terms in terms of performance, we we had overall a positive performance from from Kappa, especially from its European licensees, a growth from K-Way, which basically comes from our direct activity as as as you probably remember, we basically directly manage all of Europe. Sebago has reported an extremely positive growth, I would say basically a double-digit in all the markets we are in, partly thanks to to the market conditions.

You've certainly seen all brands putting on the market boat shoes and loafers, which is our bread and butter, the brand clearly had a benefit from these general conditions, plus we tend to believe several activities we put in place to make it appetible for for the consumers. Then, as I was saying before, Woolrich, Woolrich and Sundek contribute together €39 million.

In in in in the case of consolidated revenues, we we report direct sales of €189 million and royalties of €27 million. Royalties include both royalties from commercial licensees and sourcing commission from our production licensees.

In the case of of royalties, we have a a slight decrease from Kappa, mostly related to to one licensee who will have its activity mostly in H2 for this year. Whereas for K-Way, we had some discontinuation on the Asian market, causing a a little reduction in in the royalties stream.

When it comes to sourcing commission, again we have a small a small negative sign, partly due to K-Way. You probably remember that last year we we ended the year, and especially at a certain point in Q3, we ended up with a a big trade working capital, mostly inventory, because for K-Way, we put in place some exceptional purchases related to carryover styles and within a program of never-out-of-stock, which and this program was clearly not repeated, wasn't not necessary this year.

Our lower purchases, which are positive on inventory on the inventory of the brand, on the other hand, did not did generate lower sourcing commissions. Whereas Kappa has a slightly reduced sourcing commission mostly due to a different calendar in terms of purchases.

EBITDA, as I was saying before, at €9.1 million. This has been cleaned of the the exceptional costs.

Out of these exceptional costs, we are basically talking about €7 million in in Woolrich including all the one-off activities related to moving the headquarters from Bologna to Torino, closing the the labor contracts with more than 90 employees who will not move here, whereas circa 20 people will move into our headquarters starting from September. We we closed down the flagship store in in Milan, and and actually we made it's also part of the performance, we we didn't leave it here in the EBITDA.

We made a little profit from the sale of of this contract. Here, just to mention it, we're not just closing a store leaving the brand without a POS, but we are moving the activity into another store, which is already within within the group.

Then last not the least, we we closed the the agreement for the showroom in Milan, since as we we have the BasicVillage Milano, it was redundant, not necessary. We already have the space with no incremental cost within the group.

In terms of, well, net financial position, we probably mostly discussed, I will leave it for later on as we go through the change in in net financial position. Okay.

Moving to the network activity, we already spoke about the sales of commercial licensees, which we reported as a first figure. As a in in previous call, we received this comment from some of you that it it was more interesting to see just the aggregated sales of licensees without those of sourcing centers.

Anyway, here for information purposes, we still reported the the the decrease in aggregated sales of sourcing centers, which as as I said before, basically comes from a combination of Kappa, different purchasing calendar, and K-Way, lower purchases by BasicNet itself. Other than that, sales of direct our direct sales and sales of commercial licensees are up even without the contribution of Woolrich and Sundek, which we tend to believe is a very good commercial result given given the condition, the overall condition of the market.

In terms of of markets and geographies of our presence, you you can clearly see what I was saying before, the relative importance of Europe and the relative weight of Europe over all all geographies. Here just to give a little bit more color on on the various signs, the plus and the minus, in Europe, we had good performances in in Kappa from several countries.

I would mention Poland, Germany, Russia, and from the new eyewear license. We we had a positive performance on our directly operated market for both K-Way and Sebago, plus the contribution of the new brands.

Americas suffered a bit from the the lower performance in Argentina you you will understand and imagine the the market scenario and Brazil. In Middle East and Africa, the the positive sign comes from a a very good and probably a little bit unexpected performance from our Middle East licensee, despite the let's say the political situation, it it still managed to report a growth compared as compared to to last year.

In Asia again, we had a very good performance from Kappa in Vietnam. Then just to to go quickly into what we believe is a key to our brands to foster the the growth on the the mid and and the long term, which is the the the marketing and promotional activities.

Kappa has been active over the semester with a with a few collabs. Here we decide to to mention and report Hollister, Snipes, and and then Budweiser.

Especially for Hollister and Snipes, we believe these are two key brands to associate with thinking about younger consumers. The brand was at the World Cup with Tunisia national team, I mean the the result was probably not not the best, but still the the brand had its visibility.

Then for for those of you who might be a little bit more into fashion, you might have seen that Junya Watanabe brought the Banda back for its fashion show. The Banda was back on on the catwalk, which also makes us very positive on the fact that, the Banda has its cycle, maybe we are back at when it comes on the market for for all brands.

Superga, which is still going a a deep rethinking process, and again when we talk about cycle, Superga is probably the brand which has the the strongest one. We we are still in a moment when canvas is definitely not booming.

We think it will be back soon, and also seeing how other brands are moving, this makes us pretty confident, and we prepared ourself basically getting into a direct distribution on all markets worldwide other than really a couple of licensees which have been left. In in the meanwhile, we we we had some some activities to to keep the brand liked by by its diehard followers.

We had several activations related to the 1925, the the shoe totally made in Italy, which basically sets the standard we we see for the brand, a higher brand with a better positioning, maybe for a more niche market, but with a higher price and better materials and a better and selected distribution. K-Way has been extremely active as as as always.

In in relation to Italy, we just reported the the various activation done across Salone del Mobile, as K-Way was one of its official sponsors, and so we put installations across Milan, bringing the colors of K-Way around town. Then a a few activities in in London, as the brand is is now working hard for its expansion in the UK.

You will remember we opened the the first store in King's Road, and it's a store that K-Way shares with with Sebago and partially with with Superga. The the second store has been opened, and so the the first activation that you see flogged together is related to to the King's Road store.

We we opened the second one in Carnaby Street, which is already working, and in addition to its commercial activity, it has a very, very strong promotional meaning, as you can imagine. We are now underway to open in the next months with an another London store in Covent Garden, and then we will move in Manchester, okay?

To to have a retail presence in in the streets that we believe can foster and support also the wholesale business, adding credibility to the brand. The the the second activation reported here, Chelsea in Bloom, is has been done with Petersham Nurseries, which for those of you more familiar with with London is close to Covent Garden.

Then a few activities related to the marine world. We had we signed a partnership with Wake Paradise in Milan, plus we had a a strong activation in Marseille, where we had a a store relocation.

In in addition to that, this is not a new activity, but some of you might have seen that our endorsee, our historical endorsee now, Leonardo Fioravanti, has become the the number one surfer in the world, according to the the the world rankings. Then Sebago has celebrated, is celebrating its 80th anniversary, and this was celebrated in several ways.

The boat tour has touched a a few towns, you could you might have seen our shoe boat either in Milan on the Navigli, in Amsterdam, in Florence for Pitti, or in Paris, where we had the the final event on the Seine. Then we we presented and we put in stores a Made in USA capsule to to bring the the brand back to its roots with, of course, a Docksides, the our most iconic shoe, plus a few accessories.

Other than that, we we went on with a a few small and selected co-brandings, with brands we really want to associate ourselves in, small, niche, and very cool brands, plus the the retail activity has has going on. In the next quarter, you will see new Sebago stores in Catania and Bologna in addition to those which are already operating.

For Woolrich and Sundek, we probably already mentioned, because these activities were being prep- prepared at the time, during our Q1 call, we were with a very good response in in Pitti for both brands, where Spring/Summer '27 collections, the the first collection we actually worked on, were presented and collection which are having a good commercial response now as we we are during the sales season. Woolrich has worked on the Mountain Blankets project, clearly the homeware category is potentially a very strong one, and so we started associating with some luxury, key alpine destinations.

Sundek, after the shooting we probably talked about in Q1 that was made in in California, back where the brand was born, had a new one in Costa Rica, again working on the aesthetics of the brand that we want to bring back. Then moving into our interim results, we already spoke about the the well, this the the three components that make up our consolidated revenues: direct sales, net royalties, and real estate revenues, with a a very positive direct activity, which is always the the first thing we look at and we tend to believe the most important one on the on the mid and long term, also because this was achieved in a very careful way, avoiding any activity that can that could harm the the brands.

On the other hand, doing the the very opposite, being always extremely selective with our customers, improving the distribution network, working on on the retail. Here, a big work of rightsizing optimization has been done.

We we have closed down a a few stores, especially for Kappa, willing to focus on those which we believe are are more profitable or more in line with the image that we want that we want for the brand. We we kept relocations in K-Way, especially in France, to have bigger stores where to put the the full line on display.

As I was saying before, we opened a few new locations with Sebago, but always going for the right stores and not just opening for the sake of. On top of that, we reported a very, very strong performance on e-com.

Of course, here the contribution of the new brands and especially Woolrich has been has been massive, but still on on the other brands and on all the other brands, we have a a double-digit growth on all of those. This was achieved strengthening our team here, working on front-end, back-end, and operational marketing, and all the activities around around the channel.

All of these translated, as you as you can see and probably have already seen, on a a strong contribution in terms of consolidated margins. We achieved an additional €36 million.

Royalties, and here we have all together the decrease of royalties in and also royalties out, the the royalties we basically pay to to teams. Of course, fulfillment costs, all the variable costs, increasing the activity have also have also increased.

Whereas in term in terms of labor, the the increase is partially on the on the new perimeter. A little bit less than €13 million out of that has been brought by the new brands.

As I was mentioning at the beginning of the call, this is not the the run-rate cost, because a significant portion of Woolrich workforce will not move here in Torino, whereas we have basically already enrolled all all the new people we will need to run the brand. We have in in several cases a a double cost for a for several positions in in H1, which will not be there in in H2, certainly not in Q4, and most in most of the cases not for Q3.

On sponsorship and marketing, we have we reported different figures compared to the brand, we had a net saving overall despite the addition of Woolrich and Sundek. This was mostly achieved with a very careful activity performed on on Kappa, especially on the sponsorship agreement, in order, so, to focus on those which are which not only grant the visibility of the brand, but also a reasonable marginality, or a reasonable reasonable cost.

You will remember we we closed the relationship with the USA ski team after the Olympics, and now we we are moving to the French national team. Then when it comes to G&A, that is mostly related to to the new brands.

Again, we we see an important saving coming into Q3 with the with the progressive integration of Woolrich. In terms of changes in net financial position, as we normally report, H1 tends to absorb cash, and this mostly because of trade working capital, because as we were speaking before, our business, our commercial activity, is mostly H2.

That means that at the end of H1, we need to have already collected the goods that are either and mostly, I would say, in our inventory or on a boat to to Europe, and we still have not delivered if not for a very, very small portion, and even for that we clearly and certainly have not cashed in yet. The sign here will significantly dramatically change in H2.

In terms of CapEx of the period, I mentioned we bought a building here in via Padova, it's just across the road from here. We still need to complete the site what it will become, if we're using it for internal purposes, rent rent out a part of it, but we thought it was a very a very good deal to complete and to consolidate.

We have basically completed the renovation works at BasicVillage, and those required almost a €4 million investment, and another couple were invested in our retail expansion across the several brands. We had then a couple of cash-outs linked to acquisitions that we that were made in the the previous years.

We paid the last installment of the K-Way France earn-out, it was a €5.3 million, and that relates to the performance of K-Way France in 2025 plus a portion of its performance in the in the previous years. Plus we paid the settlement, the the number on on closing figures of Sebago France.

On that one, we we still have an earn-out which which is based on the 2026 performance of Sebago in France, which is being very positive, our expectation is that we will be paying in full the the €1 million due to the previous shareholders. Then skipping IFRS 16 payments, so that that that's basically rents being paid out.

We we also had the payment of dividend, and here in this figures, this 9.6, actually we put two different payments. One is actually BasicNet payment of dividend, and it's the the 7.6.

On top of that, a distribution made by K-Way. K-Way paid a dividend of €5 million.

60% of that stayed within BasicNet Group, it went to to to our parent company, and €2 million were paid out to to to the other shareholders. Okay.

I think we've been through all the significant figures. Now if if there are questions from your side, I will be happy to reply.

I I see Mr. Lustig raising his hand, I would let Stefano begin with the questions.

Hi, good evening Marco. I have to go back to something you already mentioned.

The first element is a strong decrease in sales of sourcing centers. It looks like the worst performance since the COVID crisis.

I would like to better understand the dynamic there. The second question, if you want, it's a complicated to understand for me, also because at the same time direct sales are quite strong.

Organic, if I'm not wrong, is up 9%. Theoretically, they should drive, let's say, orders, maybe later on, but you will tell me.

If about this point, if I can ask you, the 9% is the organic in the first half. Can I ask you if it was positive in the second quarter, the organic direct sales dynamic?

Then the third is on the €7 million extraordinary costs. Just to be sure to understand that the meaning is that the reported EBITDA could have been, let's say, €7 million better.

Actually, there are these costs, we cannot avoid to consider them. Let's say some of them for a portion of €7 million in the semester will not be present in second half, which is the result of the action you are doing in implementing a reorganization of the two new companies.

Okay. May I go with the answer?

Thanks. First for the sales of sourcing centers, just to be clear, there are no sales to Woolrich and Sundek, okay?

We are comparing just let's say the old brands, okay? When you look at the chart, maybe I can put it back on the screen so that makes it a little bit easier.

Okay. When we look at that column of 141, this is just the old brands, okay?

It's a fully comparable to last year and to the years before. Here, I would say the decrease is basically Kappa and K-Way, okay?

It's very limited to these two brands, it's also quite easy to read about. As I mentioned, K-Way purchased €10 million less than last year, and it's our purchases.

It's not affecting in any negative way the commercial activity. On the other hand, revenues at K-Way are still growing.

It's rather 2025 which was extraordinary in purchasing, okay? We ended 2025 with a high level of inventory because we purchased a lot, especially in France and then at a lower extent in Italy.

It's just a matter of our own inventory absorption. For Kappa, it's a mixed one, it's a portion of our slightly reduced purchases, same reasons, we have inventory, we didn't push purchases just to generate a few sourcing commissions, and a couple of big licensees which made strong purchases in 2025.

It's again and another one who had a different purchasing calendar, it was very strong in purchasing H1 2025 and not in 2026, and the deliveries will be in H2. If I have to look at it in not even the long term, but in the mid term, and if that's your question, do we need to worry that there is less product, we will have lower revenues, that's not the case, okay?

It's rather a matter of a rationalization of inventory, okay? It was just combined for two brands, and our two biggest brands in the same year.

Other than that, it's actually dynamics that we always had in the past. It's just that in some way, they always offset each other, whereas this year, we had the same sign for both K-Way and Kappa in the very same direction.

In terms of organic growth, you are right with the math, I can confirm the positive performance of the brands. Probably you were asking why it didn't translate in a higher marginality.

Am I right, Stefano, or

No, sorry. Just to understand first if this 9%, which is for the semester, is possible to determine what was Q1 and Q2 dynamic, if it was positive the Q2 dynamic, too.

I don't have the figure here to calculate, but it was positive. Yes, I don't have the exact one.

I will tell you later on. It's a positive one, yet.

Yes.

Okay. Then

the third

the €7 million,

yes. The third question it was on the €7 million extraordinary.

Here I go back to the EBITDA. Okay.

The €7 million are not in here, okay? They have been taken out.

If we were to leave the €7 million cost, that would be a lower amount.

Okay.

Okay? What we left in this €9 million is all So, and the seven is the one-off.

It's the severance payment to close the contract. You probably remember we talked about that at the time of the acquisition

that

we were negotiating with the labor unions and, of course, the workers themselves to give a different compensation basically based on the role, their seniority and their seniority within the company, okay? Actually, before acquisition, we had even factored a higher than that amount.

The €7 million is not in the nine, you would have actually a two. What's in the nine is the cost of labor of all these people, all these resources in H1.

Even though we already enrolled here at BasicNet the additional people we will need to keep the brand working in H2, as most of Woolrich Bologna workforce leaves the company, okay? That's the one that at run rate we wouldn't have.

It's a little bit lower than €7 million, but when we put the labor cost and the G&A, we are not far from there.

Okay. The €9 million is a sort of adjusted, let's say?

It's a light adjusted, okay, I would say.

Yes.

So

Otherwise, it would be more similar to two, but let's say action already planned could make savings not far from €7 million in the second half.

Exactly.

Okay. Can I

Please go ahead,

Stefano. I go back to the issue of sourcing center.

Theoretically, if the top line will confirm a decent or more than decent trend, we should experience an acceleration, even a remarkable acceleration of sourcing center in the coming quarter.

That's a very reasonable expectation.

Okay. Talking about that, can we have some color on about the beginning of Q3?

Actually the beginning of Q3, I would say has been positive. Especially last year, we were I'm thinking about all the brands.

We were a bit slow with the delivery of our wholesale. Especially K-Way started out very slow, whereas this year we are very, very far ahead compared to last year.

We're reviewing this morning. I would say that we already delivered some €7 million more than we did in July last year just for K-Way, okay?

It's just one brand. Actually that we think that that's extremely positive, not just in terms of phasing of the revenue, because at the end of the day, what's important is delivering the full season.

In under a certain point of view, delivering in July or August of September doesn't make a huge difference. The big difference, I would say, stays in the fact that when you are the first to come in the store, you are the one with the highest chances to get a repurchase from the retailers and so to be there for the consumer.

That's been very positive. Stores have been working.

Then thinking about all the brands, Sundek is clearly a very summer-exposed brand in terms of retail, and it did good in line with expectations. Sebago kept the very good pace.

K-Way, a little bit slower. We have not been helped by the weather, as you can imagine, and also by the fact that we are not in shopping malls.

Over the last couple of weeks, people clearly preferred going in places with the AC, whereas e-com has kept working for all brands at the same pace we had in H1. All in all, putting all brands together, it's a good vibe, and also we were reviewing during the board it's still not closed yet, but the trend of the sales campaign for Spring/Summer '27, which is also very encouraging in terms of commercial performance.

Okay. A final question on profitability.

We are commenting a sort of light adjustment, let's say, with an EBITDA margin single-digit. I would have some calculation, but what is your opinion, let's say, on the evolution, let's say?

Do you feel on track of going back at least to, let's say, low double-digit, and we are commenting the first semester, which is not the strongest one, but in what I mean is that do you feel on track on gaining a regular profitability, let's say, here?

I would say definitely. In a certain way, we put ourselves, and this was our decision, in the position to accelerate all the activities, especially in the case of Woolrich, to have it fully integrated, moved here.

If we were looking just at short-term profitability, we could have made different decisions, both in terms of moving people, closing down offices, and so on, but also in terms of commercial decisions on what to sell, at which discount, through which channels. Basically, and also we had factored almost 2 years to complete the integration of Woolrich, and by the end of September, it will be basically done, okay?

It's been a very, very busy semester. We don't see if we look the full year at the backlog we have, and we have some really massive and huge deliveries to be made over the next 3 months, for our colleagues in operations, it will be a busy summer.

We don't see ourselves far away from last year overall.

Yes. If I'm not wrong, last year in 2025, EBITDA margin was something like 8%, 9%, something like that?

We will have probably a slightly lower marginality. In absolute terms, we will be there, okay?

Yes. If we do a sort of hard adjustment

to this

2026, we are almost there,

but

with a starting point which is very negative, the one of Woolrich. The point is that we are not that far, theoretically, with a hard adjustment,

but

we just started.

That's it.

Okay. Thank you very much.

Welcome, Stefano. If there is any other question?

Okay. If there are no other questions, I would like to thank everybody for being with us this evening.

Good holidays to everyone. Hope you can enjoy the summer, and we will catch up again end of October for Q3 presentation.

Thank you, everyone.