Moncler S.p.A.

Thank you and good evening everybody. Thank you for joining our call today on Moncler Group first half 2021 financial results.

Before leaving as usual the floor to our Chairman and CEO, Remo Ruffini let me briefly introduce you to the other two speakers on today's call; Roberto Eggs, Moncler Group Chief Business Strategy and Global Market Officer; and Luciano Santel, Moncler Group Chief Corporate and Supply Officer. In addition we also have today with us Carlo Rivetti Stone Island Chairman and CEO; Gino Fisanotti, Moncler Chief Brand Officer; and Andrea Tieghi, Moncler Group Senior Director of Retail Worldwide.

As usual, before starting the presentation, I need to remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on Moncler's current expectations and projections about future events.

By their nature forward-looking statements are subject to risks uncertainties and other factors that could cause results to differ even materially from those expressed in or implied by these statements many of which are beyond the ability of Moncler to control or estimate. Let me also highlight that given the nature of our business, interim results can be influenced by seasonal effects and therefore, cannot be taken as a proxy for full year trends or results.

And finally, I just highlighted that press has been invited to participate in this call in a listen-only mode. Let me now hand over to our Chairman and CEO, Mr.

Remo Ruffini.

Good evening everyone and thank you. Thank you for attending Moncler Group first half conference call.

Tonight is a bit later than usual so I will try to be short and focused. First of all, you might have noticed that I said Moncler Group.

I am excited because this is the first time Moncler results include Stone Island. Now, we are a family and a very busy family.

I'm absolutely happy with many things done in the six months. We started to set the pillars to feed Stone Island future development, in particular in the DCT channels and international markets.

Meanwhile, at Moncler, we continue working on the many other projects we have on the table. In May, we have successfully internalized the e-commerce in EMEA.

I have to say that I was a bit scared that something could go wrong. But once again my people did not disappoint me.

And in July, we also internalized Japan. Last but not least, I'm extremely proud of the results that the group reported in this still very challenging environment.

Let me comment revenues compared to 2019 which I believe should help you understand better the underlying trend. In the first semester, group revenues rose by 11% with Moncler standalone showing Class 1 in acceleration in Q2 which rose by 5%.

July started very well with a further improved trend compared to Q2. EBIT reached €93 million with a 15% margin, better than our own expectation.

In addition very importantly, we continue to have a solid net cash position even after the Stone Island deal and the payment of the dividend. And now look into the future.

Unfortunately, the sanitary situation remain uncertainties. I believe this is a reality we have to coexist with, but we are ready.

We have two brands. We have the product, the ideas, the project, flexibility, and even more the people to make it happen.

And talk about people, I ask Gino Fisanotti, Moncler new Chief Brand Officer who joined this call to introduce his himself. As you know building a strong brand has always been my obsession.

I'm sure with this newly created roles, we will make the Moncler brand even stronger. Working together with Gino, we'll have the opportunity to go even deeper in our own office of becoming a consumer-centric organization.

The obsession in connect and engaging with the consumer through an extraordinary product and with a unique experience will allow us to bring Moncler to the new high, while exploring and influencing beyond the traditional approach for the luxury industries. I think Moncler is set and ready for future ready to redefine luxury as we create a new phase of brand engagement and business growth.

This is why I believe that Gino with Roberto and Luciano will become key in driving Moncler's next phase. Thank you and I leave the floor to Gino.

Please. Thank you.

Okay. Thank you, Mr.

Ruffini, and thank you very much for the nice words, and hello to everyone. So before we jump into this quarter results I just wanted to take the opportunity to say hello to everyone and share a few words knowing that this is my very first call with all of you.

I have to start saying that I'm extremely happy to be part of this family as I learned to call it here. But more importantly, I'm really excited about the incredible potential of this brand.

And I have to say this is definitely was and is the main reason why I have decided to join the Moncler Group. And I have to say that after 50 days with the organization with the company, I can clearly see, but more importantly feel the opportunities ahead.

It's very clear how much this team have done in prepping this brand for the next phase of growth. For a more personal note, I personally hope I can bring my very best to this company leveraging my consumer product marketing.

And I have to say visual experience all of my many years at Nike before, but more importantly around the globe working in markets from China to emerging markets from Europe to the United States to really help this brand to do the next step. As Mr.

Ruffini said, creating a new phase for the brand engagement and business growth while defining what modern luxury is and stands for. In short, I really cannot wait to be part of the next phase of this incredible brand more importantly to this incredible family.

Now I think it's time to truly go what truly matters for today which is Roberto and Luciano will share with you the latest results of the Moncler Group. Thank you very much.

Thank you, Gino and welcome into the family. Let me come back to the results of the H1 starting with the 2021 H1 key facts.

I would like to highlight three main facts of the first half of the year on which we have been working. The first as mentioned by Remo is Stone Island as we have started to consolidate the results since the 1st of April.

The second where we are actively working and supporting the Stone Island, the team of Luciano and my team too is the integration process that is ongoing mainly focusing at the start on the IT finance and supply chain. But we also had a kickoff of the retail excellence project that started last week.

So it's the premises of something that is very promising. Second point also highlighted by Remo, which is the Moncler e-commerce.

He said, he was fearing to move their website from one app into our own website. I think we were a little bit scared too, especially because EMEA is a much more complex reality than the US market that was internalized last September.

First of all, because we cover close to 30 countries with the internalization of the EMEA, 22 different payment methods to warehouse now that we have also the let's say the presence in the UK with the Brexit. And we have also to do cross-border which was something that we are not doing in the US.

So a complexity that was very high plus the launch of the new website that we successfully did. We are going to come back probably on this but all the key metrics have improved double digits -- on double-digit base since we went for the internalization.

Finally, a very important deal for us is the Moncler Genius Project where we had four launches let's say pre launches during the first half 1952 in January, JW Anderson in March and Craig Green in April and we decided to postpone the launch of Fragment that was initially planned for June into July. Two main reasons for that.

First, we wanted to have also something strong to support the launch of the e-commerce in Japan, which we did. And we launched it with the launch of Fragment.

And secondly, the stores in Japan which is the main market for the Moncler Fragment launch were closed during the weekends, during the month of June especially in Mosaic and in Tokyo. So we decided to postpone the launch by one month.

So we did it at the beginning of July. Let's move to the results of the H1 with the key highlights.

First, on the revenue side, we reached €621 million for the first half of the year which is a plus 57% at constant exchange rate versus 2020 and plus 11% versus 2019 in acceleration as we did a plus 34% in Q2. If we look also at the result of Q2 versus 2020 we reached 178% growth in -- during the second quarter.

Revenues of Moncler, they reached €565 million plus 43% at constant exchange rate versus 2020 plus 1% for -- versus 2019 for the first semester. But in Q2 we reached plus 5%.

Revenues of Stone Island that are integrated and consolidated since the 1 of April, reached €56.2 million also double-digit growth during the quarter for Stone Island. The EBIT reached €92.8 million with a margin on sales at 14.9% versus an EBIT loss of €35 million in H1 2020.

Net profit reached €58.9 million with a margin on sales of 9.5% versus a net loss of €31.6 million in H1 2020. And finally the net financial position reached €233.9 million of net cash versus the €855.3 million that we had at the end of 2020.

But this is of course integrating the acquisition of Stone Island. If we move to the results of Moncler only, only the Moncler brand by geography, the H1 2021 revenues reached €565 million, which is a plus 43% versus 2020, a plus 1% versus 2019.

Q2 accelerated with the plus 5% versus 2019, driven by Americas, Chinese Mainland, Korea and EMEA. EMEA reached a fantastic minus 11%, knowing that we didn't have what is usually making 50% of the business during Q2, which are the tourists.

It's really let's say a result that is really, really encouraging. Local clientele continued to grow solid double-digits.

Asia, which includes APAC, Japan and Korea has been best-performing area with a plus 9% versus Q2 2019. And in Q2, the Chinese Mainland accelerated.

They almost doubled versus 2019, while Japan has been negatively impacted as already mentioned by the reinforce measure of COVID 2019 with the closure of the stores during the weekend. Korea continued to post outstanding growth and it has been the region that has been growing month after month double-digits since January 2020.

EMEA revenues has been penalized by the lack of travelers, partially offset, as I was mentioning by the growth in local demand. We had a plus 47% in the growth of local demands in Europe.

In Q2, EMEA revenues decreased by 11% versus 2019. UK, Germany and Spain outperformed.

Italy in Q2 reached €21 million, which is a minus 9% versus 2019 and the Americas strongly accelerated in Q2 in all channels with revenues up 40% versus 2019. If we move to the revenues by channel, this is the new denomination that we are using now internally and that we also have changed in what we are reporting.

We call it DTC. DTC that was previously called retail is now integrated results of retail plus our own online.

DTC revenues reached €418.4 million in H1 2021, which is a plus 44% versus 2020 and a minus two versus 2019. In quarter two, DTC revenues have been supported by improved local demand but penalized by the worsened performance in Japan and by the planned postponement of June to the launch of July, which is also contributing to the very good start that we have had in the months of July.

Comp rose 41% in H1 2021. Online continued to strongly outperform with a very strong triple-digit growth versus 2019.

The EMEA e-commerce internalized in May, Japan in July, new website launched worldwide also in May 2021. Wholesale revenues rose by €147 million in H1 2021, which is a plus 42% versus 2020 and a plus 10% versus 2019, driven by an outstanding request of reorders mainly from the US market but not only and from retailers.

The level of sales through is also higher this year than the one we had in 2019, so it's a very sound growth. In Q2, wholesale rose by 29% versus 2019, driven by some growth in particular in North Americas.

To conclude with Stone Island, Stone Island revenues rose by €56.2 million in Q2 2021. The result of the Q1 2021 that are not consolidated but that we have reported are €88.1 million, EMEA contributing to 77% of total revenues with Italy accounting for some 20% followed by the most important markets for the brand, which are UK, Germany and the Netherlands.

Stone Island wholesale business contributed to 72% of the total revenues. Direct-to-consumer performance has been driven by some openings and good organic growth.

Spring/summer 2022 sales campaign shows very strong results. This is a comment I'm making for Stone Island, but is absolutely valid as we have increased our results in the spring/summer campaign 2022 for Moncler versus the one we had in 2019, which was the campaign spring/summer 2020.

To conclude with some highlights on key projects on Stone Island, as I was mentioning at the beginning, the focus for 2021 has been to set the basis for delivering compelling long-term results with integration that has started by corporate function. We focus on IT, logistics and finance and also with distribution, where we have been or started to work with the agent and importers that we have in the UK and in Korea to plan to go and manage it more directly, as we were mentioning already in the call in December last year.

In terms of total number of stores, we had until the 31st of March 2021 just -- were just reporting the stores of Moncler, which we have 2021 stores for the retail part and 63 shop in the shop for Moncler. In the meantime, we have been opening three new stores with Moncler in China with Ningbo Hankyu and with Hong Kong, Ocean Terminal on top of Dalian Olympia 66.

And regarding Stone Island, they have already opened the five doors they have planned for this year. We source in Paris with Galeries Lafayette, [indiscernible] but also stores in China with IAPM and Tianjin.

The total reported now is 244 retail stores, 224 for Moncler, 30 for Stone Island and 119 shop in the shopm 63 for Moncler and 56 for Stone Island. I'm leaving the floor to Luciano to comment the financial results.

Okay. Thank you Roberto, and good afternoon everybody and thank you for attending our call today.

We are now at page 11 where we report a slide with a bridge between our income statement reported and the income statement adjusted. The adjustments are associated with the Stone acquisition and specifically to part of the Purchase Price Allocation that affects the income statement for €6.4 million and some of the transaction costs for €3.6 million.

For the information, we report Page 20 the detail of the Purchase Price Allocation. Specifically for this slide, I would leave the technical explanations of this item to your initial questions.

I would comment the adjusted income statement that is reported at the following page, at Page 12, where we report as usual the results of the first half of this year as compared to the first half of 2020. The top line as Roberto said and commented was €622 million, with 54 growth as compared -- 54% growth as compared to last year.

Gross margin was 75.2%. The comparison with last year is not particularly meaningful because you may remember that last year we posted a €30 million extraordinary write-down of our inventory after the excess of inventory associated with the spring/summer of last year due to the lockdown.

If we look at gross margin, we reported in 2019 gross margin was in 2019 first half 76.7%. Gross margin we reported this year is slightly lower, but it's totally due to the contribution of the Stone Island business.

In the first quarter, we consolidated that business. So a business that is mostly a wholesale business with a lower gross margin due to their business model.

If should we look at the gross margin for Moncler only, gross margin for Moncler is totally in line with 2019. Selling expenses 37%, not particularly meaningful the comparison with last year in 2019.

Selling expenses were 36.3%. So we are a little higher, but still because of the closures that affected our retail business in Europe almost in the first quarter of this first semester and the impacts in the second quarter.

G&A 17.2%; in 2020 19.8%; in 2019 about 15%. G&A are higher than few years ago, but this is due to the fact that over the past two years as you know we invested a lot and we are still investing a lot in our organization.

All these expenses are associated with investments in human capital in all of the most critical departments of our rest of digital, because only a few years ago our retail department was made of adjusting for people. And now in order to face globalization online business that Roberto and Ruffini mentioned before we needed and we developed a pretty solid organization, of course, with additional cost and also with some double counting expenses due to the fact that we started to invest in the organization way before the go-live of the internalization.

But not only digital we are actually investing in our technical department, because of the essence of our product of our production and of course in information technology which is needless to say a section for our development. Having said that, the 17.2% is a higher a couple of points than 2019, but we expect this incident to slow down a little bit in the second half of the year.

Marketing 6.1%. Our guidance of 7% for the year-end is still there.

And we are spending less than last year, which again is not particularly meaningful, but also a little bit less than 2019. The reason is that the most important chapter of our marketing budget is -- will be the digital event that until last year was held in February and this year for the first time will be held in September.

So, the delay of these expenses will be reported in the second half on the year. Overall, our operating margins EBIT is 14.9% in line with our plan.

Financial, nothing to say are totally associated with the area for IFRS 16 and the 29.1% tax rate, unfortunately back to normal, back to normal because in 2019 we still had the benefit of the patent box. And last year, not in the first half, but in -- at the end of the year, our tax rate was 13.1% because we have the benefit of the alignment of our trademark cost.

So 29% is more or less also our expectation for the year-end. Okay.

We can move now to page 13 where we report CapEx. CapEx at the end of the first half were close to €50 million with an 8% easiness on revenues, higher in absolute value than last year.

But again, last year we made a decision right after the pandemic situation to cut 30% our budget of CapEx. The €50 million we are spending, we spent in the first half of the year are again associated mostly to the retail network, to the stores that have been opened and mostly to the stores that are still not open, but will be open in the second half of the year some are important stores.

And for 2018, we owe that to our information technology infrastructure the online project we already discussed about and logistics infrastructure. Page 14, we report net working capital.

Net working capital shows a 9.6% higher than last year and higher also than two years ago, but this is because of the contribution of the Stone Island business. So that again is mostly wholesale business model.

And as a consequence, a significant part of the revenues we reported have been generated in June in the wholesale channel for the upcoming fall and winter season and been translated into receivables that make the receivable line significantly higher than in the past. All the other items even though specific and accounts payable are totally in line with the year before in 2019.

And let's move now to page 15. We reported the financial position, financial position that as already mentioned by Roberto is €234 million positive cash, of course much lower than the €855 million we reported in December.

But in the first half of the year, in March specifically, we had the cash out for additional transaction net of €551 million. Okay.

Let's move now to page 16 where we reported the balance sheet statement that normally I don't comment. But at this time for the first time that means very important, it's important to comment a couple of lines.

The intangible assets that you may see last year there were €400 million and now we report €1.7 billion and this is totally due to the purchase price allocation to the Stone Island brand for €775 million. And Stone Island, the goodwill for €447 million net of €222 million of deferred taxes that are reported in the other non-current liabilities.

Page 17, now cash flow statement. Nothing to add.

All the numbers I already commented during the presentation only a comment on the change in other liabilities that is negative as much as last year more or less, but much more negative than in 2019 when we still had the cash benefit of the patent box. Free cash flow, nothing to add.

Below the free cash flow of course two important items on dividends that we paid this year for €118 million and nothing last year. As you may remember, we made a decision to withdraw the dividend payment and again the Stone Island transaction cash out for €551 million.

Okay. Let's move now to the page 18, last page, but probably most important also for the future of the brand, let me say for the word I mean which is the sustainability chart, where first of all, I have to comment the integration that is we are implementing with the Stone Island, because from now on starting from the year-end, we will report our sustainability plan, including only one set of objectives for Moncler and for Stone Island.

The activity to work together with the smaller team is very productive. I mean, we found a very -- a lot of passion on this matter and also competencies.

So we are very confident to develop great work together in the new family. We then report our five pillars and the five pillars are still associated to Moncler brand only.

But again, very soon by the year end these pillars related to both brands. First is climate change.

We have our target to the carbon neutrality at Scope one this year, and also to increase the energy coming from renewable sources up to 70% again by -- circularity is something very important to highlight is that, we have implemented technology together with a technology firm, German technology firm to recycle our finished products and to extract down -- certified down that is being recycled into the new product into the new down jacket the new outerwear we are producing. So this is a very, very exciting project's.

Also, we are using more than before the scraps and iron scraps from our production process. And also something important to highlight that we have implemented a service a repair service for our customers.

They are invited to return their product -- to bring their product their older jackets that maybe broken for several different reasons. And we offer the service to repair these jackets.

I mean, we don't aim to change the world with this service, but for sure it's something very nice to highlight. And then, I mean our protocol DIST protocol that is being expanded to social and environment not only to the animal welfare.

And that includes Council that as you know has been implemented at the beginning of this year. We have then implemented an activity and the survey with the help of McKinsey in order to understand to monitor the perception of our people with this very important topic.

And the last but not least, we are proud to say that, we have offered to the community 1,600 hours of our people mostly dedicated to the vaccine hub in Milan that has been helped and supported by Moncler. So many topics and we are now ready for your questions.

Thank you.

Operator, you can open up the Q&A questions. Thank you.

Hi. Good evening, everybody, and welcome to the Stone Island team.

A couple of questions from me. The first one is a quick one, and it's about the comment you've made on July.

You said that, July started well with the trends improving versus the second quarter. Is this true for both retail and wholesale?

And what are the key drivers of these, I mean, which geographies which nationalities? And how should we think about the development of revenues in the third quarter?

Question number two, even Stone Island. I just wanted to understand a little bit better the seasonality of the business.

I mean, we're still familiarizing with it so, how should we think about the development of sales and EBIT in a normal year? So leaving COVID aside, because I've seen that you had a pretty meaningful change in direction between Q1 and Q2.

So how should we think about Q3 and Q4 in a normal year? And thirdly, have you started already to develop a retail rollout plan for Stone Island?

So how are you thinking about the brand strategically? And how should we expect the revenues and retail network to develop over the next two to three years?

Thank you.

Good evening, Elena. Thank you for the question.

I will answer two questions number 1 and 3 and then we'll leave Luciano to answer the seasonality of Stone Island. Regarding the key drivers, clearly the fact that now we are up and running with our own e-commerce is definitely helping.

So, we can expect a strong growth from the e-commerce coming from the quarter 3. And especially also the launch of Fragment has been very helpful to support the launch of the new website.

So I think we can expect the online to perform well. We can expect from the retail side to continue performing in Americas because it has been -- Q2 has been a very good quarter and is continuing not only in retail, but also very much on the retail side where we had a lot of reorders.

We can expect also China continue to outperform. Maybe we'll come back to China later on, but Q2 has been extremely good for China and we have strong development plan for our Chinese market.

Korea continued to perform very well and also fragmented a collection that is very well appreciated and we are now going to launch the second theme of the -- for winter collection. So in all these regions we are confident.

We see also in Europe a return -- a small return of the travelers intra-Europe. Of course, we don't see a lot of travelers or let's say, visitors coming from Asia, but we start seeing also a little bit of Americans in Europe.

So I'm more -- even more confident for Europe for the third quarter and especially for the fourth quarter because fourth quarter we know that is not really depends, -- much less dependent from tourists. Usually the weight of tourist is only 30% and we have seen last year a strong rebound in the fourth quarter with our local clients.

So these are the drivers that we see for the month of July and also with let's say the expansion of the fall/winter collection with the different things that are going to come now in July, August and September I think we are confident. And again, for wholesale the results of this are extremely good better than 2019.

So there is a strong appetite for our product coming -- being requested by our wholesale account. The part of the E-tailers is also performing very, very well in line with the performance of our e-commerce.

So this also -- it's another positive sign and we see the strong request. Regarding the rollout plan for Stone Island, I think we have first to fix or adjust some of the let's say, the way to operate stores.

And this is why we launched the retail excellence project with a pilot that is supposed to start in Q4 of this year in Germany and then with the rollout phase for 2022. And we're also working on enhanced projects and design for our stores with Stone Island.

So, we are getting prepared. But the opening for 2021 for Stone Island are done and we are working already on the plan for 2022.

Okay. So Elena, thank you for your question about the seasonality of Stone Island which is needless to say, but important to highlight significantly different from the additional item there for two reasons.

First, because product is different, but also because the business model of Moncler is as you know mostly retail business model of Stone Island is still mostly wholesale. So just as a rule of thumb of course, I'll take these numbers as an overall guidance.

But you can assume that the first half represents -- may represent about 45% of the total business within about 30% first quarter 15% in the second quarter. And the second half 35% in Q3 and 20% in Q4.

More or less, this is an overall assumption you can make. Of course, we don't have the precise numbers but this is a reasonable assumption you can make.

Thank you. And also -- sorry just one quick follow-up.

Yes.

No. Because your question was also about operating margins.

So that's -- yes. So I imagine more or less follow the seasonality over the top line.

So, you can make this assumption. Of course take this as an assumption, but that is a reasonable assumption.

Thank you. Yes.

And just one very small follow-up in terms of current trading. So, is it fair to assume that in the third quarter so far, you've turned positive on a 2-year stack basis in retail because from my calculations in Q2 and also H1 you were still low single digits down on a 2-year stack basis?

No. Elena we are still very young in the Q3.

So I think we have the Q3 that is in front of us. But so far yes, your assumption is correct.

We need to confirm it in August and especially in September which is usually where we see an acceleration of our retail business.

Understood. Thank you very much everybody.

Have a good evening.

Yes. Hi.

Good evening. I have two questions actually.

Just to come back from Elena, a question about the retail rollout for Stone Island. I was wondering if you can comment about the normal run rate of store for Stone Island, what we could expect going forward.

The second question is about the CapEx budget for this year. And finally, a third question is about the online exposure in H1, if you can give us the exposure to online H1 that would be great.

Thanks very much.

Sorry, the second question was on budget referring to --

The investment, the CapEx budget for this year.

Okay. Sure.

Yes. Good evening, Anne.

First of all on the number of Stone -- the number of stores for Stone Island as I mentioned, we are now fixing the new concept and working in parallel to develop the Retail Excellence project where we think that we will be able to start with the rollout of the Retail Excellence project by H1, let's say, the end of H1 2022. This year we had five openings for Stone Island, mainly on the first half of the year while for Moncler it's usually a little bit more going in quarter three for the openings.

We want to be ready more for the full winter season. With Stone Island it has been anticipated.

I think the rate of openings, we can expect, and I will give you a very broad, let's say, a range because we are still -- we are working on it. But I think between five to 10 openings year-on-year, it's something that seems to be reasonable once the concept and the Retail Excellence will be ongoing.

Okay. On your second question, CapEx budget for this year.

We expect a total amount of €130 million, probably something more totally, of course, we are talking about up now. But honestly, the vast majority of this amount is associated -- still associated with Moncler.

But overall, you can assume €130 million with €135 million of total CapEx with the contribution of the two main chapters we discussed about in the first half. So, retail network and infrastructure.

Third question was regarding the online. Well, I don't think we usually give a very precise number, but let me tell you that it was far above 50%.

And we believe that this is a figure that we can plan for the full year.

Clearly in terms of growth.

Yes, in terms of growth.

Okay. Thank you.

Good evening. I have two questions.

The first one on for winter deliveries in key markets. How are you planning about this, particularly I'm thinking about China, we are going to have the early timing of Chinese New Year.

You have obviously the Winter Olympics that I think Moncler should probably capitalize on. How is that going to impact Q3 Q4 particularly in China?

And secondly, a question for Roberto, but also maybe for Gino Fisanotti, given his background in the sportswear industry. Do you feel the pandemic now that you've digested maybe some of the learnings the conclusion of changing consumer behavior that the pandemic is giving Moncler brand here further opportunities to grow the business in product categories that may have benefited from the lockdown situation, whether loungewear type of products whatever you call it.

I can't find a better word. Obviously sportswear and athleisure, which have benefited from the urge of many of us to go out when it was allowed and practice sports and that Moncler obviously in that spring kind of summer business quite small.

Any idea maybe from you, Roberto or Gino? Thank you.

Thank you, Thomas for the question. I will maybe enlarge a little bit your question to better answer on the -- maybe on the approach we are currently having on the Chinese market.

And I will leave Gino more for the second part of the consideration. As you know we have -- the timing for the deliveries of the full winter season are starting quite early for Moncler.

We usually start with the pre-collection already end of May and we go then with a different theme, and the delivery done to the market are usually there by October, latest the market they have the full collection already. Then of course we sell the full winter season a little bit longer than the spring/summer season.

So until March, especially for the retail store they still sell of course for winter season until March, April. And then, that moment the spring/summer is becoming more relevant.

For China and for the Olympics, we have planned a series of pop-up that are going to be present from January to February 2022. So we will increase the visibility of the grown-up collection for that period.

But, let's say, the strategy there that we have for China is much broader and larger than just capitalizing on some of the event, even if they are super important and super relevant, especially for that market. We mentioned some of them, like the Chinese New Year, but also 11.11 or what we call the St.

Valentine for China. And here we have developed a strategy in five folds.

One, to capitalize on this specific moment with capsule or dedicated collection to push also all our clienteling and certain activities. Secondly, we have also worked -- been working a lot and increased the presence of Moncler on the social media side, with the different channels that are specific and peculiar to the market.

So I’ll give you some example. We have start now to sell with the WeChat mini program on the Chinese market.

And we are using the different social media channels to express and with different targets. So we use Weibo to increase the awareness.

We use Red [ph] to increase the KOL visibility and to drive to store and we will do it for the branding. So we have defined a clear reason to be for each one of these channels.

On top, we're going to sell -- we're going to start launching our own website with the new visual identity by October this year. So this is very important for us.

And in the plan, we have Tmall that is planned for H2 2022. So this is the second pillar.

The third pillar, we still believe in retail. We don't believe that retail is dead.

And we have seen, especially on the Chinese market. Last year after the lockdown of February and March that started from April, there were a lot of people coming back to the store.

And we know that here we have an upgrade to do in the stores that we have in China. This does not mean a lot of new stores, but increasing the visibility and the size of the existing store.

We see around there some specific projects. So this year we have one important project in Chengdu in [indiscernible] with a store that is going to be a flagship store, a new concept, much younger with much more digital elements inside.

And we are going to develop this concept also in Sanlitun in Beijing. We have then signed also a very good deal with the Group 66.

So we have four openings in the next two years with Group 66, one within Wuhan with plant that is going to be also a global store. Another one in Shenyang Forum 66 and Dalian Olympia 66 this year, plus visibility in Shanghai with PLAZA 66 starting from 2022.

So this is another very important pillar. Fourth pillar is the developer of the services.

So the omnichannel services, especially the distant sales that are now a common practice in Moncler in terms of sales and also, what we call, private appointment that accounted globally for the first half of 2021 to 13% of the total sales. So more than, not only in China, but globally 44 private appointments have been driving 13% of the total turnover of Moncler.

And finally, I think we cannot forget the [indiscernible] part but especially in Hainan. In Hainan, we have now a project of development with two openings that are planned for next year.

One in Haikou, in the northern part of the Haidan Island and the other one in Sanya Airport. So these are going to be important openings, together also with two other airports in China.

One, which is the one of Chengdu and the last one in Pudong. So with this, I think, we are going to maximize the potential that we have with the travelers inside China.

Okay. Thomas, thank you for the question again.

Nice to meet you. Again, a few things.

I think through the pandemic, I will say, yes, a few things change. I think many others have accelerated, right?

And I think Mr. Ruffini mentioned this at the beginning about how we can keep working on becoming a more consumer-centric brand.

I think by doing so, I think, there's a few things that hopefully you will see us doing, which is a further acceleration into digital and believe that we are a brand that will focus on relationship over transactions. And this is something that will unlock further growth for both the brand in terms of engagement and business as well.

And then, I think, yes, of course, there is a lot of great opportunities. I mentioned this about the potential of this brand.

I think, for us, moving forward, being more specific about the different -- the complementary offers we can drive in terms of serving multiple consumers through multiple dimensions of the brand will become another critical factor about how we’ll drive the brand and the business to new heights. So, again, of course, we can go into more details into the future.

But I think definitely, the pandemic have been helping us to accelerate some of the decisions that will help us to unlock the future phase and the future growth of Moncler Group and Moncler the brand specifically.

So this would mean more new categories, potentially, that would, in a way, rebalance perhaps a little bit Moncler’s business into spring summer, lighter type of clothing whether into wearable or other categories?

I think -- again, I think, definitely Moncler is a brand that will -- again, if we talk about it connecting with consumers and engaging with consumers and serving consumers of course we will be obsessing every detail to become an all-year round brand for sure. And then, -- if you look into details of what the brand is today, you can see that we delivered from very high-performance product with Grenoble all the way down to luxury with the Moncler collection and some incredible collaborations and being more useful through.

So, again you already have some of the answers by looking into the details of what the brand is behaving today. What we want to do is reinforce those behaviors and go deeper into the things that make us a very strong brand today.

Sorry, but Gino was here ready to introduce himself. So I think we have already a lot.

So thank you so much Gino for all what you said.

Yes. Thank you very much indeed for taking my questions.

I was wondering, how you think about brand heat and the need to continue to innovate to remain top of mind and maintain top-of-mind recognition with consumers. I see that Gino has been put on the spot already, but I wonder, how he sees the transition from playing within the largest brand in its segment to playing more of a gorilla warfare being smaller and having to embed this slingshot a number of times to attract consumer attention against mega brands.

And then, a second question is really a detailed question and refers to Stone Island. We see that there's a significant difference in the first quarter and in the second quarter.

I assume that this is due to the schedule of wholesale deliveries, but if you could give us a confirmation on that, that would be very useful. And then, anything else, you could say on the exit rate?

I see that in comparison to 2019 you moved from 1% in the semester to 5% in the second quarter, so a significant acceleration. I think that it's a fair assumption that this comparison to two years back would continue to increase in the third quarter.

Thank you very much.

Okay. Thank you, Luca.

So I think I have to pass on to Gino again for the first question. So I'll leave to Gino to answer the question on, and then, to Roberto Luciano for the second and third one.

Luca thank you. Again, I think there is no secret that the brand has been delivering strong work especially in terms of brand heat and desire in the past few years.

I think what we're looking forward is to even increase that doubling down in terms of how we can become even more meaningful and more disruptive in the way we tell stories and how we go with this. I think you hear already from Luciano about how we have been prepping ourselves through the pandemic getting out of this to invest more into the second half of the year.

I think you will see some strong work happening from -- coming from the brand in terms of brand heat. I think we believe that we can be a very distinctive meaningful and authentic brand in everything we do and everything we say and that will be what we keep pushing.

I think the other big thing to your point in terms of brand heat is not only about the way we will connect with consumers and we acquire if you want consumers in. It's about how we start leveraging our digital platforms to retain those consumers and build bigger communities around the brand.

So for us the idea of becoming a more digital-first organization well and brand in terms of how we connect is not only the acquisition and the desire and the heat. It's about, how we can become more effective and efficient in the way of how we leverage those connections to drive the business forward.

Regarding the Stone Island seasonality, Luca the point is exactly that. I think we have started the delivery of the fall/winter season but we wanted to push the level of sales through a little bit higher full price.

As you know that this is the philosophy that we like. So we wanted to have the spring/summer present a little bit longer and we expect a very good third quarter for Stone Island in terms of wholesale.

There have been also reorders that have been asked for the spring/summer, so very happy about the current trend for both the retail and the wholesale business on Stone Island, Luciano for the exit rate.

The last question from Luca was if we believe, there will be an improvement in the two year-stack as we have seen between Q2 compared to Q1 if this is going to continue into play?

Yes. So this is a little bit of a mature Luca to predict, but I mean, so far so good.

I mean, it started well. So we have had the most important month for our business Q3 and mostly impacted by wholesale.

And wholesale is quite predictable and should deliver good results, retail less predictable, it will depend of course on the overall situation of the pandemic. But in any event we expect the second half of the year I mean let's say in line with the expectations of the market.

And if I may add Luca, the point is that as we are less dependent on travelers for the end of the year if there are no lockdowns and we are more relying on locals. I think it makes it also a little bit more predictable.

And on this we are confident again provided that there will be no further lockdown for the end of the year.

Indeed. That is what we all hope, absolutely.

Thank you very much indeed for the answers. Thank you.

Hi, good morning. Thanks for taking my question.

First one on Stone Island, I wanted to check if you can comment on the level of growth that you are seeing if we think pre-COVID in terms of top line the business was growing somewhere in the mid-20s. Is this a reasonable level to expect for this year, or are some of the initiatives that you have that you're implementing maybe already having a positive impact to the growth could be even stronger than that?

And secondly on the second half margin. We -- I mean in H1, you had about 5% gap versus 2019 level.

Then, of course, last year H2 was very, very strong. So just wondering if you can comment a little bit on what we can expect for the second half.

Obviously dependent on top line, but if there is anything internally in terms of cost or anything that you can control that we should be aware of? And then thirdly, just curious to hear from Roberto as to how his role is going to change now that Mr.

Fisanotti has joined the company and then whether he will spend more time of key Stone Island. Thanks.

Thanks a lot.

Susy, sorry, your first question on Stone Island growth, but I didn't get it fully if you refer to which period. Can you just repeat it?

Yes, just for the -- in general just to understand what, kind of, top line growth the brand is seeing. And so in terms of full year, if we can expect the growth to go back to pre-COVID levels somewhere in the mid-20s or potentially even more.

And I'm thinking about the brand overall for the full year not just the nine months. Just trying to characterize the level of top line growth?

Yes, the brand being Stone Island okay. That's right.

Yes, the Stone Island.

Yes.

I will start Susy and maybe I'll let also Luciano give some complement to the answer. I think Stone Island being more dependent on the wholesale business for the time being, so also more related to locals.

We can expect a significant growth compared to 2019 probably higher than the one of Moncler that is much more exposed to tourism. So this makes it a more predictable business and we -- as it is also dependent as 75% on wholesale we have also have the orders of the spring summer campaign.

So we can predict quite well the result for the second half of the year. So we are very confident on the Stone Island business.

The business also in retail, which is mainly a business that is in Europe, in UK, and in Korea is also targeting more of a local consumer and is less exposed to tourists than Moncler. So on this we can also -- we are also confident on the results of the second half.

If I understood well also, you were wondering what my role is now in the company. What I'm going -- what the role I'm going to play, I think these are discussions we have had last year with Remo with the acquisition of Stone Island where we were seeing on one hand the need to have somebody fully focused on the Moncler brand in terms of communication.

And at the same time having more resources available to develop to the Stone Island brand and be more focused on the results on the region. So as my gut is saying we are focusing on the business strategy of both Moncler and Stone Island and focusing also to bring Stone Island in terms of retail excellence and wholesale excellence and online excellence to the level of Moncler.

Moncler we -- it took us quite some few years to bring it to the level we are now. The objective with Stone Island is to do it in half of the time, we use for Moncler.

So leveraging on all the know-how but making it very specific to the brand is not a copy paste. It's taking the recipe but then cooking with the Stone Island ingredients.

And I think how related that is in making yes with the head. So I think this is going to be the focus for the next two to three years.

Thank you.

Yes Susy about the Stone Island growth if I can understand a thing. I mean, it's something that we normally don't disclose but simply because we don't know.

But in this case based on what I said before considering that first half of Stone Island business we said before may represent about 45% and considering that last year the 12 months sales were in the region of €220 million to €230 million. We can assume that this year we should do a 30% growth rate.

Again, it's not a forecast, but it is simply based on the let's say, thinking process we developed together before. About margins, yes the second half of is of course, I guess, you were referring to the group.

I mean Stone Island contribution to operating margins, will not change materially the Moncler operating margins. So we don't expect we will be dilutive or accretive but should be more or less in line with Moncler for the year-end because of course the first half and second half may be different for the seasonality.

Point I have before. Having said that, at the beginning of the year we said that 2021 will not -- or we don't expect will be back to 2019 to what it was normal before COVID.

But operating margins will be in the middle between 2020 and 2019. So I mean this is our guess our assumptions are still valid for the time being.

Based on our feasibility we may do better yes but it will be imprudent and definitely very much were to anticipate further improvement. So for the time being, we can assume an operating margins in the middle between 2020 that's 26%; and 2019 that was at 30% so in the region of 28%.

Again any better news will be communicated later. Thank you.

Okay. Thanks a lot.

So, good evening, everyone. I have three quick questions.

The first one just -- is it possible to get a sense of the evolution of the like-for-like on a sequential basis and on a two-year stack basis Q2 versus Q1? Should we consider that, I mean it's broadly the same trend as the two-year trend for the whole of retail i.e.

roughly the same two-year like-for-like growth Q1 versus Q2 on a two-year basis? So that's my first question.

The second question is for Mr. Fisanotti.

I just wanted to understand should read anything in your background at Nike, in terms of your sneakers knowledge? Does it mean in your view that Moncler could become a bit more ambitious in this space going forward?

And also from the group perspective I understand that Stone Island also has a collaboration with New Balance. So for the group do you think this is a category that could be interesting?

And my last question, is just on e-commerce. I remember that in the past you have said that e-commerce from a margin perspective was broadly neutral versus physical.

Is it a comment that this still stand or do you think that with e-commerce gaining scale this could become a margin accretive in the medium term? Thank you.

Thank you, Antoine. Then I'll leave Roberto, for the first one.

Yes I'll start with that. Antoine, regarding the evolution of the comp what we have seen over the last one year is that definitively for us now an improvement let's say quarter-after-quarter but that was mainly linked to -- not an effect of seasonality but more linked if this was a quarter where the store were open or not and if it was a quarter dependent relying more on tourism or not.

So clearly we have what we have in front of us for the end of the year, are two quarters the third quarter, where there is still an importance and the relevance of tourism and the fourth quarter that is much more focused on the local. So what we can expect is an improvement of the comp as the store are now almost all open we only have three stores that are still closed two airports plus one store in Australia.

Of course, there are still the possibility for other to close but so far so good. So we expect an improvement, in terms of comp for the third and for the fourth quarter especially, with the fact that we are there usually at more than 70% relying on the local business.

Regarding the margin on e-commerce I'll let Luciano, comment. But just on the KPI since we launched the new website what we have seen was a strong improvement in all the KPIs related to the new website in terms of conversion rates.

In terms of less return we have 2.5 points less return and this has an impact also on the profitability of the channel. As I mentioned better convention, less also bounce rate -- bounce rate is this figure that we are following.

These are the people the consumers that are coming on the website that are leaving the website after having visited the first page. And here we have had a dramatic decrease in terms of people leaving the website.

So they found a website interesting. They stay 30 seconds -- on average 30 seconds more than before.

And what we have seen is an increase in the basket, what they have been buying and less returns. So I don't know what Luciano is going to really say in terms of profitability of the channel.

But definitely, with the new website, I think we can expect even to improve it in the future.

About e-commerce just a brief comment, I mean, the profitability of the e-commerce channel was already very good before the internalization. The strategic reason why we decided that to so that, the business was not to further improve our gross margin, but to take advantage on the full the big high potential of that channel for Moncler to fully take advantage of the opportunities to increase that business.

Profitability maybe might be higher than before as Roberto said. But honestly, it's not our target for this year and it's not our target for next year.

The target is to have a full in place totally up and running, a powerful machine to take advantage of this potential. Margins may be better -- even better in the future but we don't anticipate anything now, because again, they were already very good before.

I'll leave it to Gino to answer on the question on shoes and sneakers.

Antoine, thank you for the question. I think the short answer to your question will be, yes, probably, I will go even a bit further.

I would say Moncler has already kind of a healthy sneaker business in place. And I think both brands have done the work in the past few years to authenticate themselves into this segment, right?

And I think that's what you're alluding to the New Balance deal that indeed even with Nike before as well and things that add. So I think the work was done.

I think definitely the opportunity ahead is for us to unleash this opportunity, and not only to unleash this opportunity from the business perspective. I think I truly believe that footwear sneakers is a critical component in terms of engaging with consumers with youth as well.

And I believe that, this will help us to unlock some critical markets around the globe. So the answer is -- the short answer is yes.

The longer answer is, we start on that journey to unleash our footwear sneaker opportunity.

Thank you very much.

Good evening. It's Melania Grippo from Exane BNP Paribas.

Thanks for taking my two questions. My first question is could you please comment on your growth by nationality cluster compared to 2019 for your key nationalities?

And my second question is, if you could please elaborate on your performance in the USA your very strong performance. Have you seen an increasing number of new and young customers?

Or if you've been driven in particular by a category? Thank you.

Yes. Good evening.

Thank you. Thank you for the question.

Regarding the result by nationalities. In terms of performance what we have seen is definitively a very strong performance of our Chinese market growing almost triple digit, the same for the Americans.

If we take the Americans, we thought a while we felt why we have been penalized. But we thought a why the Americans nationality has been growing very, very strongly compared to 2019.

And we've seen also Korean growing -- also Korean have been growing triple digits compared to -- in the second quarter compared to 2019. And then we have the Japanese performing not so good, but this is mainly linked to the fact that they have not been traveling and on top that part of the store were closed.

So in brief, this has been the performance that we have seen and regarding the North American market. The surprising result was the fact that, we usually -- we have always been looking at the sun -- what we call the Sun Belt.

So these are all the stores that are in the southern part of the Americas as being a little bit more difficult for us. It's true that we are now currently selling the spring/summer season that is definitely helping.

But we have had very, very good performance on that part. We opened a store in Houston that is performing very well, and also the wholesale business has had a lot of reorders on the spring/summer, and was clearly demand -- more demanding, and clearly -- sorry, demanding more products to be sold.

So we have excellent level of sell through both in terms of online, but also with the wholesale accounts that have been performing very well. In terms of typology of clients, slightly younger than before on the North American market, but not significantly different than before.

Clearly, what is going to happen now is the sales of with Fragment. We know that usually we target, and we reach a younger consumer with this type of continuous launch, but this has not been reflected in the result of the second quarter as we have decided to launch it in July.

Also, the launch of Converse with Fragment has been very, very good, especially in North America, in Europe and in Japan.

Thank you.

Sorry. Thank you, but my question was already answered.

Thank you.

Hi, thank you. Three quick questions from me please.

Number one, on Stone Island, can I just check, are you in the process of doing channel clear out at the moment? Because I'm finding very significant markdowns on the products.

So I was just wondering whether that's part of the process pre-relaunch. Question number two, are you comfortable -- this is more to do with Moncler obviously.

Are you comfortable with your current pricing architecture and a price gap and differential between the different geographies? And do you think that's sustainable for the time being?

And number three, if I'm not wrong at the beginning, I think you said Andrea Tieghi was there as well. So I thought I'd wake him up and ask some questions on location.

And specifically, if it's possible to have a little bit more granularity on how many locations have been secured, specifically for Moncler, but I guess from Stone Island as well. I know Stone Island you're very active in Asia Pacific.

I believe you have an outlet open as well. And you did touch on certain openings that you have forthcoming in China for Moncler.

But I wonder if we could have a sort of a quick overview of where we stand today so over the next 18 months 24 months or something? And if you're seeing more challenges in the sense that, you are clearly looking for more expensive, more prime locations compared to before in larger stores.

You are of course much more of an anchor brand compared to a few years ago. But are you still finding it relatively comfortable to secure the locations that you're looking for?

Thank you.

So Flavio, I can confirm that Andrea was awakened. So he will be pleased already before your answer.

Just on the two first points on the China clearance for Stone Island. As you know, this is -- and this has been in the past, the normal practice for Stone Island to go on sale at the end of the season.

I must say that this is not exactly what we like in Moncler. So, we are working with the Stone Island team to progressively maybe evolve the business model.

but I think this is something that needs to be prepared especially with the weight of the wholesale business. But that, I must say that looking at the figures that are on my desk on a daily basis and the level of sales through that Stone Island is having, I don't think that this is going to be a step that is impossible to do.

It's requiring some time and preparation. It needs to -- we need to convince and not to impose it, but I think that is definitely something that is going to be on the plan.

And I see Carlo that is making yes with the head. So currently, we are having some clearance on the wholesale channel and in the retail, but we have decided to hand it prior to what we had usually with Stone Island.

So by the end of the month, it should be over already, while in the past, it was more going until mid of August. So, I think it's the first positive sign that we're going and aiming at the same direction.

Regarding the pricing architecture, I think we commented or maybe not, the fact that we didn't do some price adjustments for the current season, but we are planning to have some price adjustments for the next season. So, we are going to see a reduction of the price gap with the Spring/Summer 2022 with mainly the Asian market.

But I must say that, the big part of the job was done in these past years. And if you remember Flavio, we had with Asia, with Japan five years ago a price gap that was between 80% and 90% is now below 50%.

So starting with four and we're working with Luciano and the team to have it with something starting by 30% in the course of the next couple of years. So we are working on it.

The spring/summer will be a further step in the price reduction with Asia, but also now with less people traveling, I think is a little bit less of an issue, but it remains high on the agenda.

Hi. This is Andrea Tieghi.

Thank you, Flavio for waking me up. I'm kidding I was quite interested in the call.

For secure location, if you refer to this year of course, they're all secure because, as you know, we are planning to open quite a few in the third quarter and fourth quarter. So for that, I can assure you that these are well ongoing and we will be opening at this location by year-end.

Considering -- regarding your question, regarding if we are comfortable in finding new location, I think it's very important, because we are looking to gain more visibility and to enhance the store experience. So most of the projects that we look in the future would be also regarding relocation or expansion and this is very important.

And basically, we are quite well-positioned. There is a lot of demand when I discussed with the landlords.

Moncler's now like you said, it's an anchor. So it's quite -- I'm not saying it's easy, but it's much more comfortable than before.

We talked many times at the beginning how difficult was to position Moncler back a few years ago. But today it's -- we have a lot of opportunities going.

So it's basically if you -- even if you look at 2022, there are quite a few nice projects on the pipeline, but would be not already secure, but I believe they will be secured in the short time.

So, thank you. So, can you just quickly remind us how many locations have been secured at this time?

15. 1-5.

1-5. Sorry, I didn't -- I forgot to mention.

1-5.

Thank you.

Thank you. And operator if there is we will take just the last question.

But if there are no I think it's already time to -- for everybody to stop it. Just let us know.

Good. Okay.

So thank you to everyone. As usual I remind you that Q3 will be on October 28 and our silent period starts on September 29.

If you need any follow-up we are here, Alice Carlotta and myself. And in the meantime, we wish to all of you a very nice summer break.

Thank you. Thank you everybody for all the nice questions.