The board of directors approved the results for fiscal year 2024

The main brands, OVS and Upim, recorded an excellent performance. Stefanel also showed solid growth, with an accelerating second half thanks to the new stylistic direction. Excellent results were achieved in both clothing, particularly women's wear, and in beauty, which continues to maintain double-digit growth.

The increase in sales and the improvement in the gross margin at 58.2% (+90 bps compared to 2023) generated an adjusted EBITDA for the full year of €195.3 million, an increase of €13.0 million. Adjusted net profit amounted to €77.9 million.

Over the three-year period, the company generated a cash flow of nearly €200 million, despite significant investments in technological innovation projects aimed at improving operations.

The new collections have been well received by customers, and sales in the first quarter 2025 are in line with the excellent performance of 2024.

The Board of Directors has resolved to propose to the Shareholders' Meeting a dividend of €0.11 per share, a 57% increase compared to the dividend on the 2023 results. Furthermore, it has approved the continuation of the current share buyback program for additional €10 million.

Fiscal year 2024

Fiscal Year 2024 marked an acceleration of growth in terms of sales and profitability.

After a first half characterized by very unfavorable weather conditions, which nevertheless recorded an increase in sales, the second half of the year saw growth of almost 9%. The fiscal year therefore concluded with sales up by 6.2%.

Both OVS and Upim, the group's main brands, achieved excellent results: the former with a 6% increase in sales, mainly achieved on a like-for-like basis, the latter with growth of over 8%, also benefiting from new openings.

Stefanel's contribution was positive, with strong growth in the second half of the year. International activities also generated an increase in sales and margins. E-commerce recorded strong growth in terms of top line and profitability, also thanks to the new technological infrastructure becoming operational.

In the apparel, the main growth driver was once again confirmed as the offering aimed at women, with particular appreciation for collections targeting young women, as demonstrated by the excellent performance of the B-Angel brand. Turnover and margins also increased for men's and kids' clothing. For the second consecutive year, the beauty segment maintained a double-digit growth trend and confirms its importance as a cross-selling lever thanks to the interest generated among the female customers.

The sales margin rose to 58.2% in 2024, up 90 basis points, mainly due to the better purchase cost of spring-summer 2024 collection compared to 2023.

The combination of higher sales and improved margin led to an increase in the year's EBITDA of

€13 million, despite inflationary pressures on indirect costs, particularly the increase in personnel costs due to the renewal of the national collective labour agreement.

EBITDA was also negatively impacted by over €4 million related to write-downs of receivables from financially distressed customers and reversals of previous "Research and Development" tax benefits that affected most companies in the fashion sector. The magnitude of these events, for which provisions had already been made during the year, has only recently become greater than reasonably foreseeable.

The fiscal year saw investments of €95 million, including approximately €15 million for the completion of significant technological innovation projects. In particular, the plant for the re of garments in a circular economy perspective in Puglia was activated, and the installation of the new smart Point of sale was completed, allowing for full integration between physical stores and digital systems, a personalized shopping experience, and more streamlined and interconnected store operations. Cash generation increased by 7% compared to 2023.

Outlook

The current macroeconomic context, characterized by uncertainties and increased costs for households, could translate into a slowdown in consumption.

OVS is well positioned and objectively capable of attracting consumer segments from higher price points.

Regarding tariffs on exports to the USA, the absence of sales in the American market means that OVS has no exposure. In parallel, the tariffs imposed on Asian countries are leading to a greater production availability from suppliers towards European customers, creating more favourable sourcing opportunities. The strengthening of the Euro against the Dollar is working in our favour.

In 2025, OVS will continue to expand its offering dedicated to women, a key segment that accounts for over half of the market and where OVS still has significant growth potential. Part of this strategy is the recent launch of the Les Copains collection, which started with excellent results and is appreciated for its contemporary style and ability to enhance femininity, and the strengthening of the beauty segment, which will also expand with the launch of a program of dedicated store openings, the first of which has been delivering excellent results for many months. The numerical and qualitative strengthening of the OVS and Upim networks will continue.

Some new commercial relationships with international partners are proving very promising.

The expected increase in sales, resulting from product and network development projects, reinforced by the expectation of a return to normal weather conditions compared to the anomaly of May-June last year, is the main driver of the EBITDA growth forecast in 2025, despite the impact of increases in personnel costs linked to the renewal of the national contract, which will also affect the current year.

2025 cash flow will benefit from the reduction in non-recurring investments. No improvement related to the Suez Canal blockage has been foreseen yet.

Current trading

For the apparel sector, the months from February to April traditionally represent the period with the lowest sales, as mainly composed by the final winter sales and weather that only in April encourages spring purchases.

The new 2025 collections have been well received by customers, and sales in the first quarter are in line with the excellent performance of 2024, which recorded strong growth compared with the same period of 2023, supported by a particularly favourable start of the month of April.

Buyback

Considering the importance of this instrument, especially in the current context of high volatility in the financial markets, it is considered appropriate to continue the share buyback program for an additional allocation of €10 million.

Consistently, the Board of Directors proposes to the Shareholders' Meeting the approval of a new authorization to proceed with new buyback plans.

€m

31 Jan 2024

Adjusted

GM%

EBITDA%

EBIT%

57.3% +91ppt

11.9% +10ppt

7.8% +15ppt

The table shows the main economic and financial results adjusted to represent the group's operating performance net of non-recurring events which are unrelated to ordinary operations and the effects of the adoption of IFRS 16.

See the Appendix section of the document for details on the reconciliation items between reported and adjusted results

Net sales for the 2024 financial year, amounting to €1,631.4 million, were generated by a 7.1% growth in directly operated stores and a 2.4% increase in the franchising channel.

In the 2024 financial year, the group generated an adjusted EBITDA of €195.3 million, up €13.0 million compared to €182.2 million of 2023, representing 12.0% of sales.

OVS's EBITDA came in at €162.8 million, up €10.2 million compared with 2023, while Upim's EBITDA exceeded €40.1 million, up €5.5 million.

This result was impacted by over €4 million of one-off write-downs.

Adjusted net profit increased to €77.9 million, an improvement driven by the higher EBITDA, net of an increased tax rate due to international as national regulatory changes.