On Holding AG

And gentlemen, thank you for standing by. Welcome and thank you for joining the On Holding AG Q2 2022 results. Throughout today's call, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-down telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Derek Peter, Head of Investor Relations. Please go ahead, sir.

Good afternoon, good morning, and thank you for joining ONCE 2022 Second Quarter Earnings Conference Call and Webcast. With me today on the call are Executive Co-Chairman, Co-Founder Kasper Kopetti, CFO and Co-CEO Martin Hoffmann, and Co-CEO Marc Maurer. For the first part, Kasper and Martin will lead through the prepared statements after which we are looking forward to opening the call for Q&A session. Before we begin, I would like to remind everyone that the remarks during today's call may contain forward-looking statements regarding future events and financial performance within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only, and such statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20F filed with the Securities and Exchange Commission on March 18th for a detailed discussion of the risks that could cause actual results to differ materially from these expressed or implied in any forward-looking statements made today. Please further note that this call will also contain certain non-IFRS financial measures, such as adjusted EBITDA and adjusted EBITDA margin. While the company believes these non-IFRS financial measures will provide useful information for investors, The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in courts with IFRS. Please refer to today's release for reconciliation of non-IFRS financial measures to the most comparable measures prepared in accordance with IFRS. With that, I will turn over the call first to Kasper, followed by Martin for the prepared remarks.

A warm welcome to all of you joining us today. I hope that you have been able to spend some quality time over the summer with your families and friends. We are excited to discuss Onn's performance in the second quarter of 2022 with you, share some big milestones, and give you some color on how we look at Onn's continued growth trajectory in the current macro environment. This is our fourth earnings call post-IPO, and on behalf of the whole Onn team, we are very proud to present another record quarter. Consumer demand for the ON brand remains very high. ON grew 67% overall in the second quarter of 22, and many key markets had outstanding growth rates, such as the US and Japan, which doubled, or the UK and Australia, which grew by more than 60%. All geographies, channels, and categories contributed strongly to this outstanding result, confirming ON's tried and tested strategy of maintaining a well-balanced product and distribution portfolio. ON is winning with consumers and also on the racetrack. As a result of this strong growth, ON is making significant market share gains in the specialty and high-end distribution channels that we choose to play in. The growth comes from both established as well as new product franchises, and I would like to call out some of these new products that have become instant fan favorites. On's promise to runners is to run on clouds, and we are doubling down on this with more underfoot protection and ultralight comfort. This spring, we have introduced the Cloud Monster for maximum cushioning and the Cloud Runner for ultimate all-round comfort and performance. The Cloud Monster is already amongst the best sellers in our own distribution, and it has given us access to an additional consumer and first-time purchaser of our brand. The Cloud Runner, introduced early in Q2, jumped straight to being one of ON's most successful performance running shoes when looking at the combined run specialty and general sporting goods channels. In performance outdoor, the Cloud Vista, which also launched in Q2, is quickly rising to the top of the leaderboard. And last but not least, the Cloud 5, which we launched earlier this year, is continuing its winning streak in performance all day. But we also have new styles in this category. If you're looking for a light summer shoe for your August getaway, we can recommend the Cloud Easy with its ultralight slip-on knit upper. On the apparel side, Q2 saw the entry into a new product category with the launch of our Active Bra and Performance Bra. Both have received great feedback from customers, been covered by numerous media channels, and both bras are now among the best-selling apparel items in On's e-commerce. Now let's move on to our fastest products and to racetrack. You will remember that we introduced you to On's Lightning program at our last quarterly update. This includes a dedicated team that works on making the fastest shoes to unleash our athletes' full potential. What we didn't expect is that we would be able to stand here only three months later and talk to you about On's first track and field Diamond League victory, On's first Commonwealth Games victory, and ON's first World Championship medal as well. You most likely have never heard of Dominic Lovallu from South Sudan. Well, you're in good company. Neither had the elite field in the 3,000 meters of the Stockholm Diamond League meeting, where Dominic came first, ahead of the favorite who would go on to win three medals at the World Championships at the Commonwealth Games. Stockholm was Dominic's first elite race, for the simple fact that he's a refugee and does not have a passport. ON has supported him for some years now, first through the Athlete Refugee Team and now here in Switzerland, and we are very happy for him and this incredible achievement. Only a couple of weeks ago, ON athlete Helno Beery added another huge milestone by winning ON's first track and field world championship medal in Eugene, Oregon. And OFC founding member Olly Hoare took the 1,500 meters gold at the Commonwealth Games in Birmingham. We are not just winning on the track, but also making strong progress on sustainability. First, I would like to give you an update on our circularity program, Cyclone. The shoe that you will never own and is only available through a subscription called Cloud Neo. Circularity and the use of lower impact materials are a big part of ON's mission to decouple ON's resource consumption from our strong growth. One of ON's core company values is the survivor spirit, and it stands for innovating our way to a more sustainable future. Over the past weeks, our very first community of cyclone subscribers in the US and Switzerland received the CloudNEO, and we look forward to giving more and more people around the world the opportunity to run and exploring ONN's most sustainable product to date. This very special launch has brought ONN a step closer towards our sustainability mission to lower ONN's carbon footprint by designing products made for circular systems and engineered with fossil-free materials. As you observe the consumer behavior in connection with Cloud Neo and a subscription model, we are not resting in our push to more sustainable products on all fronts in the short term as well. For example, we have significantly increased the level of recycled polyester in some of our more recently launched running products. The CloudVista, CloudMonster, and CloudRunner contain 74%, 84%, and even 90% recycled polyester, respectively. In comparison, in our spring-summer 21 range, the level had been at 16% on average. We are on a steep learning curve and fast implementation cycle. And some of the learnings from the groundbreaking Cloud Neo have already found their way into other products. The newly launched sneaker Cloud Easy is made with only 15 pieces, about half of what a regular On uses. Less parts mean less impact and higher recyclability. This combined with a new half speed board made from injected TPU and the full-knit upper made of 100% recycled polyester leads to significant waste reduction without any compromise on performance nor comfort. We also believe that what gets measured gets done. ONHAV sets ambitious, clear sustainability targets, and we are committed to transparently reporting on our progress towards them, which brings me to the pleasure of making you aware of the upcoming publication of ONN's latest impact progress report. Not only will we be updating on our goals and progress, you will also find a number of fascinating case studies on projects our teams have been passionately working on over the past months and years. In sum, while looking back from the halfway mark of our 2022 race, half year one has been incredibly strong for ONN. Despite the supply challenges and macro headwinds, We have achieved new record numbers, launched well-resonating products, and reached new milestones together with our exceptional team and athletes. At the same time, we have plenty of energy and stamina for the second half of the race. While we're staying vigilant and financially prudent as always, all indicators show that demand for the on-brand will stay very high. This puts on in the privileged situation to consciously select which of the levers we want to pull at which point in time to deliver durable and controlled growth. With that, let me pass over to Martin for the Q2 financial review and the outlook for the rest of the year.