On Holding AG

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the on holding AGQ1 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, Simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Jarrett Peter, Head of Investor Relations. Please go ahead.

Good afternoon. Good morning to our investor community. Thank you for joining on 2025 First Quarter Earnings Conference Call and Webcast. With me today on the call are ONF Executive Co-Chairman and Co-Founder Jasper Capete, and CFO and Co-CEO Martin Hoffman. Before we begin, I'll briefly remind everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20F filed with the SEC on March 4th for a detailed discussion of such risks and uncertainties. We will further reference certain non-IFRS financial measures, such as adjusted EBITDA and adjusted EBITDA margin. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for reconciliation to the most comparable IFRS measures. We will begin with CASPER, followed by Martin, leading through today's prepared remarks, after which we're looking forward to opening the call for a Q&A session. Before I hand it over, allow me to close the introduction on a personal note. I'm very excited to announce that I will be taking on a new role within ON following this quarterly cycle, and therefore today will mark my last earning for this capacity. It has been an incredible privilege and honor to represent ON to our research and investor community over the past years, and I hope many of our paths cross again in the future. Thank you so much for all your trust and support.

With that, I'm now happy to turn over the call to Kasper Thank you and welcome everyone to our first quarter 2025 earnings call. We're excited to have kicked off the year with continued exceptional brand momentum, clearly reflected in the numbers we're presenting today. Net sales exceeded 725 million Swiss francs, reflecting a year-over-year growth of 40% on a constant currency basis. The strength of our direct-to-consumer business and its increased share resulted in an increased gross profit margin of 59.9%. We are proud to see our focus on premium execution and operational efficiency result in an even higher margin expansion on the adjusted EBITDA line, reaching 16.5% in the quarter. The results speak for themselves. Demand for ON remains incredibly strong. Our brand promise to ignite the human spirit through movement, along with ON's positioning as the most premium global sportswear brand in the marketplace, are resonating with our fans, allowing us to capture market share and drive on success. We are committed to this premium brand and product promise and see it as a differentiator in our space. And we are confident that it provides us with the tools to navigate the uncertainty that comes with operating a global business and supply chain in the current environment and beyond. Marcin will elaborate further on this later on this call. You can rest assured that all decisions we are taking are first and foremost a reflection of our long-term strategy and brand position, setting ourselves up for continued success in the future as the most premium global sportswear brand. Beyond our financial results in the first quarter, we have seen this vision come to life over recent months. We're rapidly expanding brand awareness and reaching new audiences through innovative products strategic partnerships, and cultural moments that resonate deeply. Early in the quarter, the concept of soft wins took center stage with Alma and Roger Federer, generating significant buzz around the on-brand and ripple effect across social and traditional media alike. This momentum continued into a larger soft wins running campaign with the new CloudSurfer 2 at the forefront. The second generation of one of our most beloved models has already gained strong global traction. cementing its position as a key running franchise in our portfolio. Among other new launches in the quarter, a true highlight for me personally was certainly the launch of the Cloud6. As on the largest product launch ever, we're thrilled to see the cloud once again tying us closer with existing customers while also reaching new audiences or discovering it for the first time. After a few years of focus on diversifying our product portfolio, The whole ON team has been patiently waiting for this opportunity to ignite our icon with renewed energy and once again share the story of the cloud with the world. The cloud also serves as a strong example of how we continuously refine and elevate new launches to deliver more premium product. Introduced at a price point above its predecessor, the Cloud6 reflects how our premium positioning enables pricing power without compromising consumer demand. Beyond consistent and continuous product innovations, authentic partnerships are key to growing ON's cultural relevance. In April, we introduced our latest movement lifestyle campaign with Zendaya. The fictional film trailer set in space reflects ON's continued commitment to pushing the boundaries of visual storytelling and cultural connection. The campaign highlights key products from our spring-summer collection, including ON's sleek new low-profile model, the Cloud Zone, designed for consumers seeking a refined lifestyle look. Even more importantly, the campaign reinforces our focus to build ON from the feet up by introducing our fans to ON's apparel and accessories at every touchpoint. Ahead of any impact from ONN's most recent campaign, we have continued to observe the meaningful acceleration within our apparel business, with net sales almost doubling during the first three months of the year. While our product franchises continue to fuel strong commercial momentum, we believe transformational innovations like Light Spray will truly allow ONN to provide a differentiated offering and define the future of sportswear. 2025 will be a key year for testing and optimizing this technology, as we lay the foundation for global scalability in the future. At the same time, pop-ups in key global locations, such as Boston during Marathon Week, are already bringing this innovation closer to runners and fans of the on-brand. We hope some of you had the chance to try the CloudBoom Strike light spray at our Boston pop-up, Looking ahead to later in the year, we're continuing our global tour to further connect innovation with our core communities, engaging directly with runners in cities like Berlin, Zurich, and Tokyo during the World Athletics Championships. Light spray represents a radical shift in materials, automation, supply chain, and production, as well as steps towards circularity. And we're incredibly honored to have been recognized by Fast Company as the number one most innovative company in the design category with this groundbreaking technology. We are now laser focused on unlocking its full potential. That's why we're actively building a future facing team, hiring computational engineers, robotics specialists, and plant engineers to support this next phase. I've had the privilege to personally visit some of the production sites that we are currently exploring. And it became apparent that what we are setting up is quite literally the future. Clean, efficient, and fully automated manufacturing combined with high site flexibility. A step change for the industry and for On, a major leap toward a more resilient and locally diverse supply chain. While light spray is undoubtedly a key part of the future, our relentless focus on innovation and excellence across our operations and supply chain remains central to our vision. The numbers that we are sharing today reflect 12 to 18 months of focused execution driven by improved capabilities in planning, production, supply chain, and order management. We have also added strength in key leadership roles and deepened in-house capabilities to support long-term scalability. Together, these efforts are enabling us to do a much better job at having the right product at the right place at the right time. Finally, I want to take a moment to reflect on the recent leadership evolution we announced a few weeks ago. On behalf of the board, I want to sincerely thank Mark for his incredible leadership over the past 12 years. Mark, your dedication, vision, and passion have left an unforgettable mark on ON. And we're all better for having walked, or precisely, for having run this path with you. Mark will continue as co-CEO through the end of June and then transition into an advisory role for the board. Looking ahead, we're fortunate to have Martin stepping into the role of sole chief executive officer from July 1st. has full confidence in Martin's ability to serve as CEO and lead on together with us founders as the incredible ON team. Together, we will continue to deliver ON's strategy of sustained growth and profitability while continuing to foster the strong culture that makes every ON office such a unique and inspiring place to step in every day. On a separate note, we're looking forward to next week's annual shareholder meeting where Helena Helmerson is standing for election to our board. Elena brings extensive experience from her leadership at H&M, and her expertise in operations and retail will be incredibly valuable as we scale. We appreciate your support for her and the other proposals put forward by the board. With that, over to you, Martin.