Secoo Holding Limited

Good afternoon, everyone, and welcome to SECO's H1 2025 results and business update. Before I hand over to your host today, please be advised there will be an opportunity to ask questions at the end of the presentation. In order to do so, please use the raise hand function on your screen or for those landing in, it's star nine on your keypad. I now have pleasure handing over to Clarence Nahan, SECO's Head of Investor Relations. Please go ahead, Clarence, the floor to you.

Thank you very much. So good afternoon, everyone, and thank you very much for joining us today for what should be a very exciting earnings call. As usual, our CEO, Max Mowery, will share with you a detailed update on our business. And before that, Lorenzo Mazzini, our CFO, will cover the key items of our financial results. First, let me briefly take you through the key takeaways from the past six months. Our operating performance reflects yet another period of solid execution and progress for our company. In the first six months of the year, net sales reached 98.4 million euros, an increase of 3% year on year. Notably, the second quarter alone delivered €51.2 million of revenues above our guidance and a sequential 9% increase over Q1. CLIA revenues to that €12 million, contributing 12% to our overall topline, Our gross profit margin improved year on year to 53.4%, remaining well above our guidance, and our adjusted EBITDA reached 20.1 million euros, steadily maintaining a margin above 20%. As we maintained a strong focus on working capital efficiency and cash generation, We closed June with a stable net debt position just north of 50 million euros. On the innovation and launch pipeline, we have also made important strides. CLIA 2.0 presents a major upgrade to our embedded operating system, becoming a key part of our software framework. We have also launched our Application Hub, a new digital marketplace designed to accelerate the deployment of AI Edge application, and our Developer Center, a centralized portal to simplify access to product and service documentation. Looking ahead, we remain on track to deliver on our full year guidance, We expect to exceed 200 million euros in revenues at constant FX, while maintaining a profitable growth with gross margins above 50%. Let me now hand over to Lorenzo to review these numbers in details.

Thank you, Clarence, and good afternoon to all. On this page, you can see the key highlights on first half 2025 financial KPIs. Starting with net sales, we closed the semester up a 3% compared to first half 2024. But consider that excluding the German region featured by a slower recovery on the 2024 overstocking market context, The growth registered was of 40%. The positive note is that starting from this quarter, we are seeing the first time of recovery of that region, so German too. Software revenues contributing 12% of the total revenues, we then increased by 6% for the recurring portion versus the first half of 2024. For what concerns growth profit margin, a strong performance far above 20% were registered thanks to the contribution of software sales and a positive sales mix in profitability terms. Really important for us is the eBTDA margin performance recorded in the second quarter of 2025 with 21% results, which bring the eBTDA margin in the semester at 20.5%. plus four percentage points and 27% year-on-year in growth compared to the first half 2020 eBTDA results. The key driver for this performance was the reduction by 2.5 million euros of OPEX respect to the first half of 2024, and this despite higher sales. This reduction was made impossible due to a lower use of our sources and so an increase of in-house production. For what concerns adjusted net income, we feature by an important increase compared to the first half of 2024, primarily as a result of the ABTDA performance. However, I want to point out the reduction of interest expenses in the period by €0.2 million. Financial income decreased in the period compared to the first half 2024 by 1 million due to the dividend distribution of our control company Fanal executed in the same period of 2024. So an extraordinary item. Passing to comment the sales breakdown, it's important to point out the significant recovery and expansion after the stocking context of all geographical areas, recording year-on-year growth by more than 20% in all markets, with the exception of Germany. However, as I highlighted before, the first sign of rebound is now also coming in the German market. On the software part of the business, the important item is the increase of recurring revenue from 32% up to 37% of total software revenues in the first half of 2025 with respect to the first half of 2024. Passing to eBTDA, adjusted eBTDA performance in the first half of 2025, we recorded a 20.5% in profitability terms, with a strong 21% in Q2 2025. Other than sales and GM, and gross margin, the main driver of this result is for sure the fact that we were able to reduce outsourcing expenses for external manufacturing by 1.6 million with stable direct production personnel cost. This brings the group to an important exploitation of operating leverage and getting back on a stronger profitability result. On adjustment, these alpha are almost all represented by stock option actuarial value. For what concern net financial position, this increase in the alpha respect to 2024 year end by Euro 9 million, primarily explained by the increase in trade receivables. This growth is driven by the rise of sales and by a sales mix effect over primer terms across the different geographies. The first half of 2025 close with a really good leverage ratio, which is standing to reach one times eBTDA. Thank you very much for your kind attention. I pass the talk to Max to continue with our presentation.