Birkenstock Holding plc Ordinary Shares

Good morning and thank you for standing by. Welcome to Birkenstock's fourth quarter and fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. The company allocated 60 minutes in total to this conference call. I would like to remind everyone that this conference call is being recorded. I will now turn over the call to Megan Kulik, Director of Investor Relations.

Hello, and thank you everyone for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding, TLC, and Chief Executive Officer of the Birkenstock Group, and Eric Mosman, Chief Financial Officer of the Birkenstock Group. Klaus Baumann, Chief Sales Officer, David Kahn, President of the Americas, Niko Boyakov, President of EMEA, and Alexander Hoff, Vice President of Global Finance, will also join us for the Q&A. Today, we are reporting the financial results for our fiscal fourth quarter and full year ending September 30th, 2024. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website, Birkenstockholding.com. We would like to remind you that some of the information provided during the call is forward-looking and accordingly is subject to the safe harbor provision of the federal security laws. These statements are subject to various risks, uncertainties, and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as in our filings with the SEC, which can be found on our website at birkenstockholding.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During the call, all revenue growth rates will be cited on a constant currency basis unless otherwise stated. We will also reference certain non-IFRS financial information. We use non-IFRS measures as we believe they represent the operational performance and the underlying results of our business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of the IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings. Before I turn it over to Oliver, I want to draw your attention to the note in our press release in 20F regarding the change in our segment reporting beginning in fiscal 2025. In our fiscal years up to and including 2024, our three reporting segments were the Americas, Europe, and APMA, which was comprised of two operating segments, Asia Pacific, and Middle East, Africa, and India. During the first quarter of fiscal 2025, we have changed our internal organization to merge the Middle East and Africa region with the European operating segment under the leadership of Niko Boyaka to create a new reporting segment, Europe, Middle East, and Africa, or EMEA. While the India region has been merged with the Asia Pacific operating segment to create a new segment, APAC, which will continue under the leadership of Klaus Bauman. The change was due to the operational advantages and complimentary benefits between the regions. No changes were made to the composition of the Americas operating segment. As a result, starting with fiscal 2025, the company has three operating as well as reportable segments, Americas, EMEA, and APAC. Our first quarter 2025 results will be reported under this new segment structure. Prior to the release of our first quarter 2025 results, we will issue a 6K with the 2024 quarters and fiscal year and the full fiscal year 2023 recast under the new segment reporting structure to aid in your year-over-year comparison. With that, I'll turn it over to Oliver.

Good morning, everybody, and thank you for joining today's call. We are proud to report a very strong fiscal 2024 result, which came in ahead of our expectations. We are delivering on the commitments we made during our IPO by expanding profitably into the wide space of opportunities we identified. Under penetrated product categories, such as closed-door silhouettes, orthopedics, professional, outdoor, and the important up my region and own retail. In our first full fiscal year since we completed our IPO in October 23, we delivered 22% revenue growth in constant currency, extending our decade-long track record of 20% plus compounded annual revenue growth, driven by continued growing demand for our products across all segments, channels, and categories. And we are growing profitably. Our 2024 adjusted EBITDA margin was 30.8%, beating the high end of our expectations. In fiscal year 2024, revenue from closed-toe silhouettes grew at over twice the rate of the overall group and increased share of business to about one-third. In 2024, about half of our top 20 selling silhouettes were closed-toe. Our APMA business grew at 42%, nearly double the pace of the overall business. Our own retail revenue grew over two times the pace of the overall business as we continued to add to our own store's fleet, opening 20 new doors globally in fiscal 24. Leveraging the investments we made in our new Paseback factory, we launched our newest orthopedic innovations. The blue footbed for sneakers expanded and relaunched our professional line, including the fully certified Bilky Air 2.0 and expanded our water-ready outdoor sorbents. We also made additional investments in solids at Daruka, allowing us to increase production capacity to meet the growing global demand for all our products. We increased pairs sold by 14% in fiscal 24, while maintaining disciplined distribution to ensure scarcity and strong full-price realization of over 90% globally. ASP for the year was up 8%, driven by product mix and targeted price increase. We grew our wholesale business by 23% in fiscal 24. Over 90% of the growth came from existing doors as our partners continue to allocate more shelf space to the Birkenstock brand, increasing order size and adding new categories and usage occasions. As consumers are becoming increasingly selective and more intentional in their spending, we are taking share and gaining the attention of our key retail partners and their shoppers. Our DTC business grew 21% and penetration of approximately 40% was consistent with last year. We ended the fiscal year with 67 stores globally, up from 47 at the end of fiscal 23. We grew our membership base by over 30% during the year to over 8 million loyal members who shop more frequently and spend, on average, 30% more than non-members. We continue to balance growth between B2B and D2C to meet the growing global demand, achieve our profitability goals, and maximize our reach, especially into the new targeted consumer group. Now let's move to a brief discussion of segment performance for the year. Within our largest segment, the Americas, we experienced strong consumer demand for our brand throughout the year. Revenue in the region was up 19% compared to fiscal 23. We saw a noticeable return to in-person shopping at multi-brand retailers in the second half of the year. As such, our B2B strengthened throughout the year as many of our strategic partners allocated more space to Birkenstock and experienced very strong back-to-school sell-through. We have emerged as a must-carry brand within our strategic retailer. We believe their significant reach with both door count and social media impressions has amplified our consumer demand beyond what we may achieve on our own. In the Americas, DTC channel, which is almost entirely digital, we delivered revenue growth in the mid-teens. We expanded our physical retail presence, opening four new stores during fiscal 24. We recently opened our first Boston store and plan to add several additional stores later this year. In Europe, we delivered exceptional growth of 21%, which was growth-based across all countries and channels. In the first full year since the completion of our transformation initiatives in the region, we clearly see the benefits of the improved quality in our distribution with double-digit unit and ASP growth. While both closed-toe and sandals grew at double digits for the year, closed-toe grew at over two and a half times faster than sandals, driving ASP higher. We have gained shelf space in strategic retail partners and our brand awareness increased an average of 400 basis points in the key markets since we began our transformation in 2022. We saw strength in both the DTC and B2B channels in Europe. Our focus on better alignment with key strategic retail partners led to increased orders and elevated sell-through performance from these targeted accounts. Our partners continue to widen their business of assortment to meet the expanding consumer demands. In our B2B order book for autumn-winter 24, we doubled share of business in shoes compared to last year. Our European B2C business grew at a similar pace as B2B. After several years of retail consolidation in the region, we embarked on our retail expansion strategy in 24. We opened three new stores in the region, including our first store in Paris. We have identified several additional locations throughout Europe for additional owned retail stores in 25. The Abma region was our fastest growing segment in fiscal 24, growing 42%, nearly double the pace of the overall business. We continue to make progress towards penetrating this significant white space for the Wittenstock brand. Still at only 12% for our overall revenue mix, we see substantial opportunity for growth and will continue to invest in the segment. Aligned with our roadmap and commitment to the region, we added 13 new own retail stores, bringing our total to 25 in the AAPMA region. Additionally, the launch of our online store in the Philippines and the strong performance throughout our digital channel is supporting strong regional DTC growth. We also expanded our strategic partnerships, increasing our monobrand partner doors by approximately 20%, which drives B2B growth in the region. Greater China made up mid-teens' share of Abenari. We are still in the early stages of our market role out there, but are steadily building brand awareness and demand through our increased retail and online presence. We opened our first own store in Chengdu in October and will turn our successful pop-up store in Shanghai into a permanent store later this year. I will now turn it over to Eric to discuss our financial results in more detail. Thanks, Oliver, and good morning, everyone.