Moncler S.p.A.

Thank you. Thank you and good evening.

Good evening to everybody. And thank you for being here today on the Moncler fully year 2021 financial results.

As usual, I will introduce the speakers on today’s call, Moncler’s Chairman and CEO, Mr. Remo Ruffini; Roberto Eggs, Chief Business Strategy and Global Market Officer; Gino Fisanotti, Moncler Brand Officer; and Luciano Santel, Chief Corporate and Supply Officer.

With us tonight there is also Carlo Rivetti, Stone Island CEO. Before starting the presentation, sorry, some boring part, I need to remind you that said -- that we -- this presentation may contain 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.

And now, I leave the floor to our Chairman and CEO. Thank you.

Good evening, everyone, and thank you for attending our call tonight. 2021 has been another remarkable year, a year in which even in the pandemic has continued to shape our life on our way to do business.

We have not only delivered strong results, but we have completed important projects that have reinforced our group and our brains. This is the moment in which I’d like to share with you some of our achievements, but even more our many future projects.

Talking about achievement. First of all, let me say that, I am extremely proud that in 2021 Moncler Group passed the €2 billion revenues and generated €550 million of free cash flow.

Both our brand delivered revenues results well above the pre-pandemic level with a strong acceleration in the last three months. I am also proud on how the Moncler brand is continued its strong momentum increasing its size.

But on this I will leave Gino after to comment. And I am also satisfied on how the integration with Stone Island is proceeding, not only our corporate function has been integrated but also from January 1st this year we have started managing directly the Korean market, while we have launched many projects to spread the direct-to-customer culture.

And I am happy to see that Stone Island brand continues to maintain an extraordinary bite, not only supported by some activities and events, but even more important by the strength of product, 2022 collections have been very well received. In particular for winter 2022, sales campaign started in January and we are extremely happy with the feedbacks and orders, while keeping them tight and selected.

But above all, I am really proud this year on how the Group is integrated sustainability in all action, in all projects and in any division. In 2021 we further reinforced our efforts as a result.

I believe that the team is doing an amazing job, not only for all the projects, all the important recognize have received, but even more because I do believe that the sustainability division has been able to truly spread the sustainability culture in the old Group. We feel all very commitment.

We have huge challenge ahead of us and only united as a company and as a sector, we can move Moncler. Moving to 2022, my first thought will goes to the today events, situation that is touching all of us and for which we hope for a prompt and peaceful resolution.

We know that this year uncertainly remain high. But we are ready to face them.

We have unique talents, some of them joined recently in Moncler and those in Stone Island. And more importantly, we have a solid vision.

We want to shape the future of our Group knowing that communities, sustainability and digital are the core of our actions to continue to keep our customers are the air of our world. You know that in our Group, we always push for right peeks and we have a deep pipeline of projects for 2022, some of them also help to celebrate important anniversaries for both of our brands.

However, I will not anticipate too much tonight, because we have -- we are going to have a Capital Market Day. The first with also Stone Island on May 5th.

So don’t try to get us anticipating much. We will keep all secret until May.

Now I leave the floor to Gino to more details on Moncler brands. Thank you.

Thank you, Mr. Ruffini.

Good afternoon to everyone. We are moving to slide or page number four and I will touch base on some of the brand highlights.

I have to say, this quarter was an incredible quarter for the brand on top of the great results we got and we shared with you in Q3 regarding on the Genius, right? So few things I want to highlight.

From here, of course, the first one is the announcement and the launch of the partnership with Inter Milan, which got an incredible positive sentiment across consumers, especially here in Europe. And of course, we have the opportunity to get not only a strong reaction from media, but on the back of that we were able to launch product exclusively at moncler.com, which were sold out in just two weeks.

The other big -- among many other stories, the other important stories, we were able to be back on the communication of our Moncler Collection, which is our -- one of our core businesses with the launch of the We Love Winter campaign, which was feature across key markets around the globe with very, very strong success, not only in terms of engagement and the visibility of the campaign, but of course, in driving the business to new heights as well. Last but not least on this slide, I just want to comment on the Born to Protect, something that Mr.

Ruffini just mentioned, in terms of our commitment to sustainability. We just did what we believe is a great brand statement, and more importantly, we are extremely proud to start backing up our sustainability plan, not only from all the actions we are taking internally, but all the commitments that we are pushing out on the communications we are doing around it.

We move to the next slide. Just a few other comments.

Of course, on top of everything, I mentioned, few other things happen in terms of the world of Moncler Genius. First of all, we were able to launch a new project with ALYX and Matthew Williams regarding Moncler 6 and these include a some work that we did around a fortnight as well in terms of skins, which provides a lot of learnings for us in terms of how we can keep finding new ways to connect with customers and communities around the globe.

Secondly, we launched the Palm Angels collection during Miami Art Basel and then after that, around key markets with another strong success around this collection, not only again, in terms of just the revenue we are able to see, but the impact in terms of how this is connecting multiple markets around the globe. Last comment from my end on the brand highlight is around the introduction of the House of Genius, something that we work in partnership with David Fischer, which is the Founder and Chief Editor for Highsnobiety.

And these include multiple executions, including some Pop Up retail like -- spaces like Selfridges in London or collaborations with Hoka footwear, which was very successful in terms of the sell-through when we launched this project. So these are just some of the highlights.

What I want to do now is leave the floor to Mr. Roberto Eggs, who will talk a bit about the financial results.

Just one comment maybe also on Stone Island brand and what has been done. There are too many events that were featured at the end of Q4.

One was a music event with a lineup of musician as part of the Stone Island Sound Program in London and Milano, and second one an art-meets-motocross performance in Miami during Art Basel. Regarding the full year revenue of Moncler, Remo already preempted the fact that we reached for the first time to €2 billion mark for Moncler and Stone Island together.

The results of the fourth quarter were really good and they were further accelerated above the pandemic level, so with this plus 30% compared to 2019. If we look at the detail of these €2,046 million that we did, this is a plus 44% compared to 2020 and plus 28% compared to 2019.

And during the last quarter, I would like to highlight here especially the growth that we had compared to 2019, which is a plus 40%. Moncler as brand, for the full year revenue 2021, €1,824 million, which is a plus 28% compared to 2020 and plus 14% compared to 2019.

Last quarter has seen an acceleration with a growth rate of plus 30% compared to 2019. Regarding Stone Island nine months consolidated revenue starting from 1st of April were €222 million and the last quarter €66 million.

If we move to the Moncler revenues by geography, I will comment, the performance compared to 2019 as we believe that is more relevant benchmark for us and that constant exchange rates. In Q4 Moncler brand further accelerated reaching double-digit growth in all region.

Chinese Mainland continued to be the main growth driver, followed by Korea and North America. Asia which includes Asia-Pacific, so Mainland China, Greater China, Japan and Korea represents 49% of the full year revenues, with an acceleration in Q4 and reach a plus 39% growth, driven by exceptional local demand in all markets, including Japan.

In Q4, Mainland China and Korea continue to post outstanding results. Japan returned to solid double-digit growth in the last part.

EMEA revenues stood -- which represent today one-third of the total revenues of Moncler posted a significant acceleration in Q4, rising well above pre-pandemic level with the plus 16%, driven by strong local demand and outstanding performance of the direct online. We have seen also return of the tourist intra-region.

Americas 17% of the full year revenues, continue its exceptional results with a plus 31% in Q4, with the positive contribution of four channels, and of course, DTC and the online outperforming the total revenues. If we look at the Moncler revenues by channel.

Moncler brands DTC revenues represented 78% of total, so back to kind of normal -- similar to 2019, with a total turnover of €1,429 million, which represent a plus 16% compared to 2018. The fourth quarter direct-to-consumer revenues strongly accelerated up to 31% versus 2019.

The comp growth in 2021 was plus 23% versus 2020 and plus 1% compared to 2019. Direct online channel almost doubled, so plus 100%, also boosted by the successful internalization of the dotcom that started in 2019 with Korea and was completed last year.

In 2021 Moncler opened eight new stores. Among them the most important one in the last part of the year were Milano Galleria and Chengdu Swire.

Wholesale revenue 22% of the total sales reached €395 million, so new record for Moncler, which represented plus 15% compared to 2020 and plus 8% compared to 2019. In Q4, wholesales rose 19% versus 2019.

I passed the word to Gino for the online.

Okay. So, as Robert mentioned, I think, the results we get into our dotcom business have been very strong.

We were able to double our business against 2019. The total online business reached 15% of the total revenues.

But I think, more importantly, I think, one of the things that we want to really measure against is the level of engagement we are finding against consumers, right? It’s not just about reaching those numbers and I think those numbers were a consequence of the great work that team was able to do in terms of engaging and bringing consumers into our platform.

So that’s why we were able to see an increase in traffic by 30% versus the previous year, again, just as a comment in terms of engagement and the way the team was working campaigns like We Love Winter were able to bring 1 million people traffic at the week of the launch and that was for us unprecedented. The other big thing for us to start looking at memberships, something that I think we are starting to showcase for first time, which is login customer.

So those are able to join us in a way and for us being able to understand them better and serve them better more one-on-one. And then, of course, the other big thing for us in terms of engagement is to see a 60% increase in terms of the product page view, which is people are spending more time than standard in understanding the story and they are coming to the product and engaging with our platform way longer.

Last but not least, we always discuss in the past few calls about our focus in China. I think we are starting to see a really strong performance on WeChat.

But more importantly, we are planning our Tmall launch on Q3 2022. So more news there.

And then, of course, we will keep improving and going deeper in terms of our social media presence around, of course, Western and Asian channels moving forward. So, with that said, I will go back to Roberto.

Thank you. I am sure that you are eager to hear more about Stone Island and the revenues for the first year with Moncler.

Stone Island, as you know, consolidated figures started from 1st of April, 2021 and contributed to €222 million to the full year Group results, including the unconsolidated first finance. So from January to March 2021, the total full year revenues of Stone Island reached €410 million, which would present a 35% growth compared to 2020 and plus 26% compared to 2019.

In full year 2021, consolidated EMEA results accounted for 77% of total revenues and Italy, the most important market in EMEA contributed to more than a third of the total revenues of the region, followed by U.K. and Germany.

Wholesale business contributed to 78% of total revenues of Stone Islands, which is the opposite of Moncler, Moncler 78% in retail and D2C and 22% in Wholesale, here we have still a business that is still very much wholesale business. But direct-to-consumer performance has been driven by solid organic growth and some new openings.

Direct online remains strong and accounted for some 30% of total direct-to-consumer. Main openings for Stone Island during the year are in Paris Galeries Lafayette, Bloomingdales, New York City and Shanghai IAPM.

If we look at the total number of stores for the Moncler Group, we have now 267 stores at the end of December 2021, 237 are Moncler stores, 30 are Stone Island stores. What are the change that occurred in Q4, Moncler opened four new stores, most important are Milano Galleria, Copenhagen; Zurich Globus, and Chicago.

And we had also some important relocation like Roma Piazza di Spagna with an expansion where we doubled the size of the store. Stone Island openings were unchanged, but we have been working hard during the last quarter of the year.

We are working on the joint venture for the Korean markets that we have signed and that is effective since the 1st of January, 2022 and we switched 23 mono-brand stores that were handled by our partner and importer into retail. So we are currently in the stage of financial retail excellence in Korea and we have now 24, 23 more mono-brand stores with Stone Island in the network.

For people having visibility of the presentations, here a picture of the store, fully renovated store, Piazza di Spagna, which was [inaudible] to one of the stores with the highest density in the network. So we hope that this is going to get new stuff for us and the other ones the relocation of Chicago, which is now a flagship store of 380 square meter that we opened at the end of the year.

Thank you.

Okay. Thank you.

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

We are now at page 15, where we report as we did at the end of the first half of the year a bridge between the income statement reported and adjusted. The adjustments are totally related to the Stone Island transaction and regarding a small portion of the purchase price that has been allocated to the order [inaudible] order backlog and released during the year for €20 million and some legal cost for safety associated with the transaction were €3.6 million.

We believe that the adjusted income statement more properly reflects our businesses and it is a more fair comparison for the upcoming 2022 results that we report this year. On page 16, we reported the income statement of 2021 as compared with 2020 as usual, but also, as we did for this year with 2019, that is more meaningful fiscal year.

The topline has already been presented in detail by Roberto and Gino, and we reported 42% growth rate, with the 76.6% gross margin, a little bit lower than the 77.7% we reported in 2019. But again, this is due to the inclusion in our perimeter of a Stone Island business, which is, as we said, a wholesale business model company with a lower gross margin of about 60% as Moncler has in later wholesale business.

So the weighted average makes this number a little bit lower. But just to let you know, even if we don’t report the results for each brand, I can tell you that, Moncler brand only gross margin was higher in 2021 than in 2019.

The other side of our business model is included in the selling expenses that are lower than in 2019 for the same reason, Stone Island being -- was a business model that has a lower selling expenses that are normally more business model. Again, just to let you know, Moncler brand only reported selling expenses total in line with the 2019.

So with a smaller improvement, which report better retail business productivity this year than in 2019. G&A, G&A 11.4%, lower than last year, but significantly higher, 1 point higher than in 2019.

Again, this is something that I would normally tell you, I mean, we want the organization to become a stronger, stronger to face all the challenges and the complexity of our business. And specifically important to remind you that in 2021 we in-sourced ensure, we internalized our online business and over the past two years we have invested a lot to build a stronger digital organization.

This is an example, but of course, we have invested and keep investing in the supply chain, in logistics, information technology, retailers, so all of the different areas of our business. We keep investing in talent and in people needed to make this result to happen.

Marketing, marketing is slightly below the 7% of 2019, but this is again only because Stone Island still has or still had 2019 a much lower marketing budget, that’s to be clear and that’s why we do the marketing expense of Moncler brand only was even higher than 7% in 2021. For the upcoming years, 2022 and after as you know, as we said lot of times, we plan to increase Stone Island marketing budget, and at the end, to reach a 7% that will be still is our, let’s say, golden rule.

EBIT 29.5%, slightly lower than 30.2% we reported in 2019, but much higher than what we planned and expected at the beginning of the year, when we said, we should end up between 25% and 30%. So we did better.

We are very happy about that. Only one comment on tax rate simply because you may see and I am sure you did see a 29%, much higher, I mean, back to normal.

So it is also a good indication for the future. A much higher than what we reported last year, the year before, when we still had the tax benefit of the patent box in 2019 and the tax benefit in 2020 coming from the tax realignment of Moncler trademark.

Okay, let’s move now to page 17, where we report CapEx. CapEx, I mean, nothing particular to highlight, I mean, €125 million, 6.1% and so better than what we did in 2019.

Better, I mean, we invested a little bit more also due to the fact that we reported this number up to €6.5 million of Stone Island CapEx, is not a big amount and it’s something more important to come in the future than 2021. For 2022, we claim a total CapEx budget of €160 million, more or less, and the CapEx budget for Stone Island will be much higher in the region of €20 million, €25 million.

So, of course, we will start to invest more and mostly in the distribution, in the retail -- in the retail channel, that is, of course, a part of our strategy, as you know. Let’s move now to page 18, where we reported net working capital with very, very low net working capital, a very, very few times, because considering that in this number, we report also Stone Island, but again, since it is wholesale business model, normally reports higher net working capital.

This 7% is a low, I mean, the lowest ever. This is for a couple of reasons.

So there are some reasons associated to business. I wanted to highlight and to celebrate, because we still have a very efficient inventory management.

We still have a very strong credit control. Also something important to highlight is that, thanks to the internalization of our e-commerce business.

We have an improvement of our receivables, because in the past we had the receivable, so that was vain out. Now we cash directly, we collected directly cash when we sell the product online.

So I mean, altogether, receivables and inventory are very good. Something quite unusual is payable, that is about €30 million higher than what it should be -- normally it should be, because we shifted some payments to our suppliers from December and January in part because of some different cycle and different timing of the processional cycle.

So their net working capital will be about €50 million higher still, honestly, very, very good, but not so much. Next page, page 19, of course, Roberto what has said, cash we reported at the end of the year was €730 million, even if you take out of the €30 million, I told you before that extraordinary, still €700 million cash.

So that is much better than what we planned at the end of the year. And honestly, I think, much better than what the market, the financial markets expected.

And only one comments about the dividends, because today the Board approved the proposal at the meeting to distribute €0.60 of pressure, which is about 40% payout. Next page please, balance sheet, honestly, I don’t have anything to say, unless you have questions later.

So we can move directly to page 21, where we report the cash flow statement, with an amazing cash generation, we do amazing free cash flow and let me highlight amazing and not just because we wanted to celebrate our business success, but also because I wanted to mitigate the market expectations for the future. This cash generation has been over our expectations, but also because you know that, the cash flow is the comparison of two pictures of the financial situation in 2020 and 2021.

2021 was very strong, 2020 was very weak, because everything you know. And that’s why we generated a lot of cash in net working capital, €50 million [ph], which is quite unusual.

This is why we generated €52 million in other assets liability, which is quite unusual. So, I mean, I am ready to answer your question regarding about these two lines that are quite extraordinary.

But just to let you know that, again, the €150 million of the results are not only have a very strong business results, but also have some unusual, let’s say, balance sheet items. Okay, corporate up data.

I mean, just to comment on some important projects and events, Stone Island integration. I mean, we keep working together as a team, as a family, with Stone Island, as a family with LGBT family, and with very good results.

One important result that Roberto already highlighted is the internalization of our distribution in Korea. So the joint venture that is up and running since January 22, and also the integration of our informational systems.

So that is on plan for this year, I mean, the informational systems associated with distribution, for sure this year, and the rest for next year. Information technology and important update about, unfortunate event that you all know, and right before Christmas, so we suffer the manual attack, as you probably know, we had a temporary outage of our information technology systems, with exception of the systems in-store and e-commerce that fortunately continued to operate.

The data systems have been activated in a few days, starting from, of course, their systems are more associated with their businesses, of course. So I mean, it’s been a very unfortunate event, but in any way, now we know the systems are up and running again since early January.

About Moncler production capacity, something important to update to you, I mean, it is something we already discussed about, which is the new facility, virtual facility we are building in Romania in the same area where we already have our production facility. This will be ready in Q3 of this year, and up and running starting from September, October, with the final goal, final ambition to double our own production capacity in that area, in that facilities.

Okay, page 24, sustainability, I mean, many, many projects, many activity and I want to highlight only a couple, actually I like, I personally like a more one is that we have almost eliminated all single-use plastic. The other one is about Born to Protect.

I mean and this is the first of the second bullet point, 30% of our Moncler Genius collection is made entirely of sustainable fabrics under the label Moncler Born to Protect. And other one I like, I personally like very much is the project to recycling of certified down.

I mean, we take all of the leftover garments, we extract, we take the down, we clean it, we generate later down and then we will use the same down the new product and this is happening now and will be in our collection in the fall/winter, upcoming fall/winter 2022. Okay, I think, with that, we have done.

Thank you very much and I am ready to answer your questions.

Yeah. So, Operator, we can open to the question-and-answer session.

Thank you.

Good evening, everyone. This is Melania Grippo from Exane BNP Paribas.

I have two questions. First is, of course, you had a very strong Q4, and I was wondering, since the year started.

Have you seen any changes in the environment, any -- in any particular countries? Is there anything to call out?

I mean, have you seen changes in customer behavior willingness to spend? And my second question is actually a clarification, you mentioned during your presentation, the CapEx sports goods Stone Island and Moncler, if you could please repeat, because I did not capture?

And also, if you read in your presentation there was quite a few Pop Up in 2021, can you say how many and if you intend to open them in 2022 and in case online? Thank you very much.

Good evening, Melania. Start maybe with the trend at the end of the year and the start of 2022.

As we said, strong acceleration in Q4, especially strong months were October, November. And overall, it was a growth that was double-digit in all markets, including Europe, where we even had a positive comp compared to 2019 in Europe, driven by the return of the local tourists, especially in city, in capitals and touristic areas in Europe.

And strong also growth in China, strong rebound also in U.S. market, and Japan, that did suffer a little bit in, due to some closure of stores in the Q3, had also a good end of the year and a good start of 2022.

And if I just give an indication for the start of this year, we are on average for January, February, to a similar growth rate that we have experienced during Q4 for Moncler and similar also for Stone Island.

Okay. Hi, Melania.

About -- your question about CapEx, of course, I think, you refer to 2022 and our total CapEx budget is €160 million. We planned for Stone Island about €20 million, €25 million, which is 3 times what we spent for Stone Island in 2021.

So, much more, but still much less than what we have spending for Moncler, this is due to the fact that, again, this year we will start to invest in a new stores, but the year after and 2023, it is premature to comment 2023. But of course, with expansion of the retail network, we will spending CapEx more for Stone Island than what we spent last year and this year.

I think I answer your question.

Yeah. I think, there was a question also regarding the Pop Ups.

We have roughly 10 Pop Ups that were opened during to sustain the big event, the Moncler Genius of September and a similar number of what we call Pop In which are dedicated areas in a key flagship stores for Moncler Genius also at the end of the year.

Yes. Excuse me, just so one thing, just to our clarification on your January, February trend, are you -- when you said that similar to Q4, is this year-on-year?

Yes. In terms of growth rate.

Yes.

Thank you very much.

Hi. Good evening, gentlemen, and Paola.

First of all, congratulations on your €2 billion sales milestone, that’s impressive. I have got a few questions for you.

The first one is, your view on the U.S. market.

We have been discussing a lot about the U.S. with investors and with companies, and I was very keen to get your view, particularly given the sequential acceleration that you have seen for the fourth quarter.

We have heard that there is a new consumer emerging, a new consumer that is very focused on your [inaudible], but at the same time, there are key risks to see a slowdown or at lease growth normalization. So what is your view on this market and how sustainable do you think these demand is going to be going forward?

That’s question number one. And question number two is on China.

I was very curious to know whether you think you have benefited from the Chinese Olympics. I am not talking about really the specific last few weeks, but everything that you have done with the brand, the collaborations with Pop Up.

And so do you think that this has helped you over the past few months when it comes to brand awareness and do you see the Chinese getting closer to winter sportswear and do you see this as continuing going forward? And then my final question is for Mr.

Ruffini, and I mean, this sector is becoming more and more consolidated. There was a lot of cash being generated and we will know about the sector dynamics.

In terms of long-term vision, would you see yourself as a larger brand aggregator, perhaps, expanding your portfolio to diversify into footwear or other complementary brands and categories or do you see the current pairing mature of the group as the right one for the long-term and I am not talking about the next couple of years, I know you are very busy with Moncler and Stone Island, but what’s your ambition for the long-term for the Moncler Group? Thank you.

Okay. Let’s start -- thank you, first of all.

Thank you very much for the question. We will start with a U.S.

comment. I think, again, definitely, we are seeing a strong reaction from that market.

We agree with your comment in terms of the opportunities we have there. I think we start seeing a lot of strong connection with banner especially on the East and West Coast.

Key markets, I will say, especially New York, but then we are seeing some strong results in other cities as well. So this is something that for us we are focusing on and you will see us working heavily towards that market as well.

And the opportunity to even open up to this new luxury consumer that you were mentioning that that is super strong in the U.S.

Yeah. To complement the answer of Gino, I think, what we have seen interesting is the growth on the younger generation, generations that and millennials that are being one of the strongest, together with Europe and the Chinese market.

So I think this is -- I think the way we communicate the product that we are offering and the way we position the brand is really getting into the trend that is currently working very strongly on the U.S. market.

Also a very strong and positive reaction to the new website, where we have been able to generate strong triple-digit growth compared to 2019. So I think in terms of conversion is one of the markets where the fact that offers managing direct and having a different look and feel and to the way to communicate on the website has been a real success.

And we see also that in terms of demand of clients coming back to stores is has been very strong, with the opening of the new Los Angeles flagship store that we have, with the opening of Chicago and the project that we have for this year in Miami District, Detroit and Dallas. We see a potential for Moncler Group.

Ultimately, we have only 26 stores currently in the U.S. plus 10 shopping -- the shops statistics for quite a large market.

I think there is the potential to grow to invest on the market. Ad we have also developed a very strong relationship and bond with the department stores and we see their possibility probably in the future to move some of the business that working well in wholesale into retail concession business or part of the e-commerce business that is becoming very, very important for the department store.

So I see a lot of positive signs coming from these markets.

I continue maybe one last comment…

Yeah.

We were just discussing, as we were hearing, Roberto talking about the U.S. as well.

I think the other thing that we are seeing strong signs from customers is around footwear in the U.S. as well.

And that’s another opportunity for us that we believe is very important for the brand and very important for the U.S. market as well.

So that’s another important topic that we wanted to add at the end on North America.

The second question was regarding China and we were all very excited about these -- the trend -- this trend is new that China is showing lots winter sports globally. I think the Winter Olympics have been a kind of accelerator, but the trend was already there, probably, because they were preparing to the Olympics, so we see more and more people that are interesting by ski and we believe that we are probably one of the most legitimate brands to communicate on this, because we were born in the mountains.

We have for 2022 a strong plan for the end of the year in terms of Pop Ups to join the previous question of Melania. Strong activation that is foreseen for the end of 2022, also big event that we are preparing for the 2022, 2023 collection.

Thank you.

So talking about cash -- the cash usage, I think, since ever we are looking forward to have a very, very solid company. And having said that, we just make a big acquisition for us, amazing brands that at Stone Island.

We have a lot of thing to do. Stone Island is super successful brand especially for the young generation.

But we will - as Roberto say we want to really turn company into direct-to-customer approach means we need really time to redesign the organization, as Carlos always say, there is not -- it’s not a revolution, but is really an evolution of what they did in the last 40 years, means that we have a lot of thing to do, and we are really confident that we can go straight to the customer to not feel to between us in the market that we can build really a very strong brand. This is for sure is the mid-term.

For the long-term, I don’t know, again, we would not plan to make any acquisition. But last year, for example, Stone Island happen, but really in our mind is really to concentrate to build up a strong family.

As I said, we have two fantastic brand, and we have really lot to do. Thank you.

Understood. Thank you.

Thank you very much.

Hi. Thanks for taking the question.

Good evening. My first question was on your inventory.

We know that you have a very strict management of inventory. And you always say you prefer to end with two little rather than with too much.

So I was just wondering in Q4, the demand has been really exceptional. And we know firsthand that you brought into stores many products, didn’t have a lot of sizes left.

So I mean, do you think that’s, I mean, obviously, the demand was clearly ahead of what you had planned in terms of supply? Is this something that you can look at - how quickly can you adapt to the kind of demand that you see in the market?

And then is it fair to assume that perhaps you also held back a little bit of inventory, because you were thinking about the upcoming Chinese New Year. Secondly, on the space expansion.

This year, space was up 10% year-over-year, and it was higher than you initially indicated at the start of the year I believe. And I think already for two years to have spaced always tends to end up the year a little bit stronger than we usually expect.

Which is great, because it means that I mean, you are doing really great. The brand is evolving and expanding.

So how should we think about the space component going forward? And also, it seems we are moving more towards this idea of opening the flagships, where consumers can really, really experience the brand very well.

So it will be great to have an update there. And perhaps just one last question on your EBIT margin.

This year ended below the 2019 level, which is something that you were already very upfront in saying that was going to be the case. And how should we think about the margin going forward?

Your like-for-like has returned to us exceeded three pandemic levels. You have ecommerce, which is accretive.

There is upcoming price increases coming as well. Should we expect all these positive factors to benefit the margins in 2022, or are we in a situation where you actually at this stage you prefer to really invest in Moncler and also Stone Island, and so your priority is your top line rather than your profitability?

Thank you.

Okay. Thank you.

Thank you for your questions. It was about inventory.

Of course, as usual, we may run out of some bestsellers and this is the case for everyone. And this was also the case in Q4 in December.

Having said that, I mean, we ended up with about 60% of sales later than December. That means that we still had another 40% available for January, February.

January, February business as we said before is doing very well. Of course, January and February business is driven not only by fall winter events, but also by the new spring summer inventory to support.

It is really vital that honestly I think we are in a good stock position to face our business demands. But again, of course, this is something important to reiterate, even if I am sure you know that, but we prefer scarcity.

We prefer to run out of inventories other than having an end of the season too much inventory. So this is part of our strategy or philosophy if you want.

About space growth, I mean, of course, needless to say our space growth strategy has been driven over the past years, and we have been living in an extra future more by expansion of our existing store. So, then a new openings in this very important from the strategic point of view.

Having said that, we estimate them in a single-digit of space contribution in the growth rate. Talking about operating margin...

Can I just add something under philosophy of expanding our direct-to-consumer business? Yes, the tendency over this past couple of years has been to do experiment that has been very successful in getting larger space, and you have seen that we have been able despite the increase of the space to increase from 2020, and we are getting very close to 2019, which is the record year in terms of density.

To open larger store, where we can express the brand differently and having the space that is not only a transactional space where you come and basically you buy, but where you leave a different experience for Moncler I think Champs has been one place of experiment for Moncler, where we are introducing new concepts like personalization immersive rooms and clienteling location in the store that we call [inaudible] is something that we have been experimenting now also in China in Chengdu with a store that is much more digital and very connected to consumers, and something that we would like to pursue, not everywhere. But when things make sense, for us, it will be a way to develop a different experience that is aligned with what we are doing digitally.

And we have some flagship store that are planned for this year. Most of the openings will take place as usual between July and September.

But we have this flagship store planned in Europe with Madrid Dusseldorf, we are also flagship store in China in Chengdu. We have also some important relocation expansion in Macau.

We already talked about Chicago. We have the project of Miami and other flagship stores.

I think in all these stores, we are going to blend this digital experience with an enhanced client experience in the store. But ultimately, the consequence of it will be a higher sales density, but also an attachment to the brand that is going to become bigger and bigger.

And yes, as Luciano said, we have for this year more plan for relocation and expansion than openings.

Yes. Susy, about your comment and your question about the EBIT margin.

First of all, let me say that we believe that 50% in it is very, very good. And our job, our mission in what we do all the day is to protect this 50% EBIT forever rather than the chasing 35 or 54 or whatever percent in one or two years.

This is important because behind this simple and obvious word, there is a stronger and a very clear strategy. And he said that, of course, so you are right, we are increasing prices, but -- why we are increasing 10% prices fully inserted because we face as everyone important production cost increases in raw material, mostly but not only, also in labor cost.

So this 10% price increase will not translate into additional margin. About online, you are right -- in theory, you are right and because of course in the online business and may be profitable even -- if -- even a little better than the physical business.

But again, we are not chasing margins improvements. We are chasing a huge opportunities.

We see in the online business, which is not the business only, which is communication, talking with our communities, building a brand stronger and stronger. And of course, increasing our top line that is growing very nicely, but again, with a much, much higher potential.

Thank you.

Okay. Thank you.

And so I just want quick technical clarification. Your online sales, they do not go into like-for-like.

The like-for-like is only for the physical stores, is it correct?

Comp store sales includes, of course, online direct online, as usual, direct online only, of course.

Okay. Understood.

Thanks.

Yes. Hi.

Good evening, and not as much as, three questions, please. The first one is on U.S.

I was wondering if it would be possible to have an indication of the percentage of sales that has been done with new customers. The second one is on the store.

So I have heard you comment that you are planning to do more relocation and expansion this year than store openings, but can you give us the number of stores that you are planning to open this year. And finally about production, so you are building this new facility in Romania, but can you refresh my mind about what is the percentage of production that is done internally and what it would imply with this new production facility?

Thank you very much.

Good evening. And first question regarding U.S.

and the new customer. It’s roughly two-third of the sales has been done with 60%, 63%, 64% with new customer.

But what has been driving the performance of the U.S. market is that we have also increased royalty of the existing one.

So, we have been able to attract new customer and I was referring before to the fact that is one the IS vision in terms of generation Z and Millennials. So very positive on this side.

And on top one of the market where the return of existing customers, the royalty rate has been increasing. So we have been selling more to existing customers that have been returning more to the store and we have been able at the same time to recruit new clients.

In terms of store openings, we have secured roughly 15 openings for this year. And we have a number of relocation that is slightly higher than that.

Yes. The new production plant we are building in Romania.

I mean May in the next year to double the capacity we have in building. Important to highlight, just to make sure I understand your question, that in Romania overall total in our facility, but also with some very important and historical production passes, we do the majority of our production.

What we do in our own factory right now represents about 15% with the new building and we will exceed that the 20% with an ambition to achieve and about a 30% while the facility will be 100% up and running with all the production lines. So these are the 15 now, over 20% next year, up to 60%.

Hopefully a couple of years in our own facility, but Romania is the vast majority of our overall production.

Thank you very much.

Hello. Hello.

Yes. Sorry.

Good evening. Three questions, please.

Firstly, question perhaps on sales productivity for the Moncler brand. If my calculation is correct, you have returned close to €36,000 per square meter for 2021, so in line with 2019 and 2018 level.

So could you confirm this is that case? And maybe Roberto provide some information on how retail metrics have evolved in ‘21 relative to ‘19 in the past.

You kindly provide the average store size, traffic, evolution, conversion, UPT average basket, that would be very useful. Secondly, on the price increase of around 10%, you said back in Q3 -- this would be for the fall winter collection, given what’s going on in the industry, some competitors have already passed on price increase very early in the year around the magnitude that you reconsider your pricing strategy for this year, particularly on the spring summer collection, or is it’s too late now.

And finally, following up on the question on the e-com and LFL, and how you computing this for ‘21 and for the year ahead. When do the internalized ecommerce operation, entering the same-store sales calculation.

So, for instance, the U.S. and Canada were internalized in October 2022, do they start to hit the LFL after 12 months, so in October ‘21, so Q4, and so on for Europe, China and Japan later this year.

Thank you.

Sorry, Roberto just on this one very quickly. It’s true that we internalize the e-commerce business because it was run by WinApp before and now is done internally.

But remember that even under the WinApp, it was already retail businesses. So it has always been included in the retailer DTC and comp calculation.

Only if we open a new market in terms of online like we did a few years ago with Japan. In this case, the revenues generated online in Japan was not comparable for one year, but this is only decade.

Understood. Thanks, Paola.

Good evening. On the top productivity we dream to be already back to 2019, which is of course, obviously our ambition we were at plus 20%, compared to 2020.

As a reminder was €26,000 per square meter. We increased slightly more than 20% at 31,400, which is a significant improvement especially taking into account that some of the store were closed during the first-half of the year.

So if I am just looking at the productivity that we had at the end of the year in Q4, it was -- the comp was positive, it was similar to the one we had in 2019. But for the full-year, we have still been impacted by the closure that we have had during the first-half of the year.

Regarding KPIs, let me give you some metrics. The averages, store surface increased by 2% last year.

So we are now at 180 square meter. For Moncler, we are at 134 Stone Island, but on Stone Island, we are working on a new concept that we are planning to open mid of this year in Chicago.

And probably there also we are going to look for stores with a slightly bigger surface to be able to express better the values of the brand. As I mentioned, sales density increased slightly more than 20%.

The traffic was up 7%, compared to 2022. The conversion was double-digit, conversion increase compared to 2020.

These are good because usually as you know there is a strong correlation between traffic and conversion usually when you increase traffic may have a small impact on conversion. You we have been able to do both increase traffic and increase conversion.

And overall, the average selling price UPT and average transaction value increased by 1%.

Thank you.

About price increase - we - I mean reference prices the following 2022. In this calendar spring summer, we didn’t increase prices I mean we keep adjusting prices, you know but not significantly as we do - we did the for the following ‘22, of course.

So, we decided to do prices when we faced the impact of the raw material cost increase take into account the stock position not only our stock position, but also the stock position of our suppliers you know that in this circumstances there is a some kind of longer way may delay the impact depending on the amount of stock that is in the supply chain. So there is a way we waited to increase prices.

Of course, we did increase again in the fall winter 2022. And we will increase the prices more or less the same amount in the next spring summer 2023.

So this is the overall picture. We didn’t see any reason, any need to increase prices in this spring summer 2022.

Thank you, Luciano.

Okay. Given the time we have a space of few other questions, but I would ask people to keep them maybe a little bit to one, maximum two, because we have few people on the line.

So thank you.

Hi. Good evening, everyone.

Thank you for taking my question. I will keep to one.

I thought it was really interesting commentary in terms of the distribution and potential channel mix, if I think about the store numbers that you are highlighting for the U.S. and the potential opportunity in the market, and I presume very similar for China.

Can you just help us think about the views of channel mix going forward and the benefit of online? I presume now you have got the businesses integrated.

You are getting quite excited about the online mix going forward. And relative to that target that you talked about for the online mix by 2023, I think you talked about 20% of the group sales when you were internalizing the business, when you announced that a couple of years ago now.

If you could give us an update, that would be fantastic.

Hi, Louise. Thank you for the question.

Yes, we -- it’s a one of the strong focus, not only because we believe in it, but because I think the consumer behavior has changed and they are looking more and more to buy online. What has been surprising is that -- during the pandemic is that, yes, there was a trend where younger consumer were used to go and buy online, what we have seen, especially in Europe, and more mature countries like Japan and Korea is that even people from that -- that are a little bit more up in the edge are also looking to buy now and that getting used to buy online.

So yes, in the focus that we have, we see potential to grow on the DTC globally, on the retail side, especially in the U.S. market and on the Chinese market.

But most importantly, we foresee a growth rate over proportional on the online business for years to come. This is the horizon which we are working and that will be probably what we are going to disclose during the Capital Market Day.

But yes, we foresee a growth rate on the online that is much stronger than what we can see on the retail part. What we see also is the trend on the wholesale is to have more and more conversion to go more directly, even when we talk about retailers to go some moving part of the business from e-tail from wholesale into concession to be able to better master the communication and the flow of product and the supply chain, this is increasing the client experience and also as a result, the level of sales and the sales through.

So these are the two big trends we are seeing. Gino, do you want to add something?

No, no, the only comment I will make is and something that even Roberto, I think, mentioned before, which is how we are looking after -- again, I think, Luciano sorry mentioned this before, how digital is helping us to go deeper in terms of the relationship and the engagement with consumers. And this is something that even Roberto and myself were working about how we can even further connect our physical and digital experience for the brand.

So truly create experiences both in the physical world to what Roberto was mentioned before and individual world, so we can have a different level of engagement, because we believe that at the end, the relationships are super important to then drive into commercial aspect of it. So this area of relationship over transaction is something that will guide us in terms of how we can create deeper connection with communities around the globe.

And can I just ask one quick follow up in terms of the benefits versus the brand.com will be the priority, but what are the benefits of the concessions? Is it attracting like a new cohort to the brand?

Obviously, we will hear on May the 5th, but thank you.

Well, first of all, there is a much higher level of communication on which product to push giving them more insight like they were one of the -- of our source on what are the activities. So, all the, let’s say, the connection and communication between the e-tailers and the brand are completely of a different level.

We are planning specific action together. We are planning to develop specific capsule for them, and of course, they enter into our, what we call, auto replenishment system that we have for our stores.

So this is also improving the product availability, so at the end also delivering a better service to the consumers. These are the main advantages that we see and also a bit better knowledge from our side on to whom we are saying.

So with the end consumer at the end, which is another factor that is very important and that this knowledge is at the end what is driving the growth of the company.

Remo, thank you. Gino, thank you.

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

It’s the first day of war in Europe today in the Ukraine. It’s difficult to grasp how this will evolve and what implications this can have.

I wonder how you are thinking about the risks inherent in this situation on two areas I would ask one, your dependence on Eastern European and Russian clients in Russia and in the rest of Europe specifically, and two, your operations on the ground in Romania if my geography is right, your factory is towards the west, but I wonder if you have any subcontractors in the eastern part of Romania in Transnistria, or if you expect any potential disruption because of refugees or any other things going the wrong way in that area, and if you are preparing any contingency plans. Thank you very much.

Good evening, Luca. Very, very sad news even if somewhere it was maybe even a little bit expected, but we were all hoping that this will not happen.

So we have been in very close contact with our team on the ground in Kyiv. We have one store in Kyiv.

We a team, the store, the store is closed. Regarding the impact that we see potentially to the business, I don’t know if it’s more maybe related to increase of the price on oil and so on that may have an impact on increase of raw materials.

But if I am purely looking at the dependence on the local market, meaning Russia and Ukraine is represents roughly 2% of our business. So, not really material, this was our seeing that till a couple of weeks ago more as an area for potential growth for us, but we are not as dependent as other luxury brands on these two countries.

Yes. Luca, about the supply chain.

First of all, we don’t make any production in Transnistria, you mentioned, important to say that. About Romania is difficult to predict.

Of course Romania is not very far from Ukraine. It’s a difficult to predict.

Honestly, I can’t give you an answer. Our thoughts now are very close to people who were suffering for this situation.

Honestly, I can’t predict. Honestly, I don’t see any impact on our supply chain in Romania.

Honestly, I don’t know why we should have any impact about, of course, anything may happen. This situation is very, very sad.

Thank you very much indeed. Thank you both.

Hi. Good evening, everybody.

I have two short questions. The first one just to rebound on Thomas question on sales densities, Roberto, you mentioned that back 4Q you were already back at the 2019 levels, given the solid start of the year and price increases in the second half.

I mean, do you see any reasons for sales densities not to be back to the 2019 levels in 2022? That’s my first question.

The second question is just on marketing and events. What do you plan?

I mean, you had the big Genius event end of last year, which has been super successful, given you plan still to spend quite a lot in terms of A&P. Can you tell us basically what you are planning for this year?

Would there be another Genius event or something big in the second half of the year? Thanks.

Good evening, Antoine. I will dream to be back at 2019 levels, but you just heard the question of Luca.

So I think there is still some unpredictability during the year. The COVID is not over.

And you know that we usually over performing demands that are the strongest for us even if we have a good start is very encouraging. We have still 10 months in front of us with many uncertainties.

So we are going to work very hard to be as close as possible as the record year of 2019 in terms of sales density, but this will be influenced of a lot of factor, no closure, no restriction, a little bit of reopening of the travel and the travel retail. But let’s say that we are confident that we will be able to improve the results of 2021, on this we are committed to.

Yes. Antoine, regarding, again, your question about marketing, I think, again, as you have seen in the past few months, we have ramping up a lot of our efforts.

I think we are super excited about the plans we have for the future. I think I need to respect what Paola said at the beginning about some of the news we will hold it for the Capital Market Day and this will be some of those.

So, again, I will ask just to be a bit patient few more months, but we will showcase there a little bit of -- and we will be able to answer to your question, but I can tell you internally we are super excited about the year ahead.

Okay. Thanks.

Good evening, everyone. Thanks for taking my question.

Could you just talk about recent category trends for outwear versus knitwear and other non-outwear categories? Anything to call out in terms of standout performing categories aside from the strong growth for footwear in the U.S.

or was the growth momentum relatively uniform across categories? Thank you.

Thank you, Rogerio, for the question. What we have seen is the first half of the year where the non-outerwear category, were performing really well.

And as usual when we come back to the fall/winter season, the very good metrics that have been of results that have been explaining the KPIs that have been given before are explained by an excellent performance of the outerwear. So, overall, we are still at 75% an outerwear company.

I think what is interesting this year is that we recently launched for Grenoble an activewear collection that is more or less spring/summer collection. So with this we have new categories that we are pushing.

The cut and sewn and the knitwear have been performing extremely well. They represent today roughly 15% of the total.

The part of the soft accessory is developing very well with an enlarged size of stores who will have additional capacity to display these products, I am confident that they are going to over perform the outerwear category in the years to come. And finally, I think it’s the point and one very strong focus from Gino I don’t know if it’s linked to his past, but is focusing a lot on footwear and we all believe that there is a bright future for Moncler on the shoe wear category, especially the sneaker for men and the boots for women.

So, these are categories that have been performed extremely well in the U.S., but also that are starting to pick up in Asia and that is the encouraging factor that we are getting strong demand now also from the Chinese market.

Thank you very much.

Hi. Good evening.

Also two quick questions for me. Number one, did you experience any real supply chain issues in Q4 because it was kind of a recurring refrain if you go into these stores based in Europe and then the U.S.

You keep hearing all -- I wish we had more of that, we should have more of that, not sure that’s coming in. So I was just wondering whether that’s just a phenomenal sellout for whether there was any supply chain issues at all.

And number two on Stone Island, because we are not mentioning Stone Island. Can you give us an update in terms of the internalization of the distribution here?

What the targets are at this time? Thank you.

Hi. Hi, Flavio.

About the supply chain issues, honestly , I mean, and smiling, we faced issues with supply chain all the day long. Having said that a big issues because I think this is what you are referring, honestly, no.

Honestly, no. I mean, our supply chain has been running in 2020, in 2021 notwithstanding the situation, of course, issues are associated with contagious that make a percentage much higher than before.

So sometimes our factories have to stop some production lines. So it’s not normal as in the past.

But in any event we never stopped our production and so honestly looking at all of these problems from far away not big issue, not big issues frankly. Of course, and there are issues associated with transportation that make our shipments longer.

I mean, we take longer to reach our regions, because again the transportation issue is not only associated with the cost increase, which is 3, 4, 5 times higher than before, but at least associated with the lack of transportation, I mean, because all the civil flights are not there anymore and 80% of our transportation in our sector is through civil flights. So again, this is something of course we face all the days and not bigger problems, but for sure delays mostly due to this logistics issue.

Yes. Flavio, regarding Stone Island and is more direct-to-consumer push that we really believed in.

We have started to follow pilots for retail excellence, where we have defined a new customer experience with the store managers and also the client promise. We have started the pilot in Germany.

This started at the end of 2021, around November, December, now planning to roll out in Europe, starting from Italy in April this year. And in parallel we are working for Korea, because as we have now moved the Korean market into a joint venture with direct control on the stores, we have moved now to these 23 stores under our direct management.

We have a new GM that is there that is absolutely backed up and held by the local Moncler organization. And we are going -- we are planning to have the rollout of the oldest systems, the clienteling app and retail excellence in the Korean market in the course of the first six months of the year.

Regarding the other internalization Japan and China are foreseen for 2023. And as you know, U.S.

market is already a direct market there. So it’s a matter of implementing the system, but there is already direct management.

So these are the main focuses we are having. The situation in the UK, which is the other important market, we have a longer contract that is ending at the end of 2024, but we will be able to handle the online path starting from next year.

So these are discussions we have started with our partner locally and we are working hand in hand with them. Regarding wholesale, we have planned reduction of the number of agents, so taking control of some of the wholesale agent that we have.

We had -- when we took over Stone Island, 29 agents were working to reduce these, but these needs to be done. Also hand in hand with the agent to give continuity to the business, but it’s something where we have started to work on.

Thank you very much and keep up the good job in winter. Thank you.

We know you are a big fan.

The last one…

Yes. Hi.

Good evening everybody. I just wanted to, it’s possible to have some anticipation on what you have planned for the 70 year anniversary, I don’t know if you can spare something or whether we have to wait until the Capital Market Day for that as well.

And secondly, as far as Stone Island is concerned, if you can comment about the retail performance of Stone Island, at least for the oldest stores where you can give us a sense of the two year stack comp growth. And also the kind of growth you have experienced on the order backlog, which you commended is very good for the full winter collection.

Thank you very much.

So, Paola, thank you for the question. I will be quick on the first one.

Unfortunately, I will have to give you the same answer as before. This is part of the conversation we will have in just few weeks and in the Capital Market Day and we will be able to share plans and within that some of the things that you were mentioning to.

So I will ask you for some patience there and I will let Roberto answer the other questions.

Okay.

Paola, good evening. Regarding the retail KPIs, I think, we will be able to give you some more interesting figures at the end of 2022, honestly, it’s far too early.

We are currently putting in place the Moncler system there that have been adapted to the experience we want to deliver to the consumer. But the metrics that we have now -- we are not ready to share them, I think we need also to give more -- have more direct access to end consumer data, because the data collection was not up to the level we have in Moncler and so on.

And so we are currently working to do the setup, to do the training, because it’s not only about putting the system, but is convince people that is the best way to operate and train them, train them for this. It’s about finding also the right profile of store managers that we have in most of the case, but when they need to be trained to have the -- for the staff the right attitude in the stores to redesign the incentive scheme.

So all what we have been able to put in place in the retail excellence project in Moncler that took us three years, We would like to do it, let’s say, in half of the time in one year and a half, but you need to give us a little bit more time to give the answer as precise as the one we have for Moncler because we need first to do the setup and start from there.

And as far as the order backlog…

Regarding -- yes, just on the order backlog, the campaign just ended at the end of last week. It was very, very positive.

So we count on a good double-digit growth for the next fall/winter season with a strong demand from our wholesale clients. Even to the point that we had to cut down a little bit the demand because like for Moncler, we want to be able to sell less than what is really demanded by the end consumer.

So we are tightening a little bit the demand, but the demand and the way the collection was received was very, very positive. So, of course, it’s only selling and the proof will come from the sellout on the market, but we are very confident.

Okay. Thank you very much.

I think with that -- great, Paola. I think that with this answer, we end tonight’s session, which has been even a little bit longer than normal.

I thank you all of you. I just remind you that next week we will publish the management report, which will give you some more information compared to what you can find on the press release and the presentations, ahead clearly of the report that will be published in due time.

And we are here for any follow up questions. So thank you very much.

Good evening to everybody. Thank you.