On Holding AG

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to on holding AGQ2 2025 results. 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 this time, simply press star followed with 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 Liv Reglinger, head of investor relations. Please go ahead.

Good afternoon and good morning to our investor community. Thank you for joining ONN's 2025 second quarter earnings conference call and webcast. With me today on the call are ONN's executive co-chairman and co-founder, David Allerman, and CEO and CFO, Martin Hoffman. Before we begin, I will 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 annual report on Form 20F for the 2024 fiscal year filed with the SEC on the 4th of March 2025 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 accounting standards. Please refer to today's release for a reconciliation of the most comparable IFRS measures. We will begin with David, followed by Martin, leading through today's prepared remarks, after which we are looking forward to opening the call for a Q&A session. With that, I'm very happy to turn the call over to David.

A very warm welcome to our second quarter 2025 results call. We hope you are having an enjoyable summer. This past quarter, our story of growth continued with incredible momentum. Our results show that what we are building is robust and truly transformative. We grew net sales by 38% on a constant currency basis to a record of 749.2 million Swiss francs, beating our expectations. But this wasn't just about growth. It was about our premium positioning, which drove further expansion in our cross-profit margin to 61.5% and our adjusted EBTA margin to 18.2%. What I'm most proud of is that this momentum was broad-based. We saw strength across every region, channel, and product category. This broad-based resilience is the very definition of the athlete spirit in our business, setting the stage for long-term growth. The strong numbers we just reported are a direct reflection of something deeper. Today, I want to talk about one of the core values at ON, the athlete spirit. This spirit is all about resilience and balance. It's about waking up ready to trade, regardless of whether you won or lost yesterday. It's about playing the long game, not chasing a fast win. We're building resilience everywhere, in our product portfolio and our channel mix, in the strength of our global footprint and fan base, and in our founder-led leadership. It's building our future for years to come. For me, everything starts with the product. What truly excites me is that we're not just creating footwear, we're building iconic franchises. Today we have nine distinct footwear franchises, each contributing more than 5% to our top line. That kind of balance isn't an accident. It's the result of a years-long focused strategy to build resilience into our portfolio. We're building iconic franchises like the CloudSurfer and CloudMonster, and we're also seeing fresh momentum with the newly launched Cloud6. These are product brands in their own right. But our vision goes far beyond footwear. Our apparel business is expanding very fast and with it our relevance as a full sportswear brand. We recently previewed our spring summer 26 collection during Paris Fashion Week and launched new apparel with Zendaya, which will further elevate awareness. What connects footwear and apparel is on strife in technological innovation and our roots in Swiss engineering and design. This allows us to show up pole to head connected with a broader audience and build a truly resilient portfolio. But our product resilience is about more than just footwear and apparel. It's our commitment to win in multiple sports. We started in running, but we successfully expanded to trail outdoor tennis and training, moving us closer to our vision of being the most premium holistic sportswear brand. For example, fans saw Igor Sviatek win an incredible Wimbledon final a few weeks ago. And Ben Shelton captured his first Masters 1000 title at the 2025 Canadian Open, climbing to world number six. And now fans can wear the styles of these athletes both on and off the tennis court. Or they can shine in the training capsule collection we just launched with FTA Twigs. While ON is fundamentally a sports brand, the cultural shift towards sport as the new uniform and fashion means we're also a lifestyle brand, unlocking a much larger addressable market. Our hugely successful collaboration with Loewe on the Cloud Tilt, which sold out almost entirely within days, retailing at US$590, perfectly illustrates this intersection. The seed for the most premium global multi-sports brand is planted. The result of all this is what we call consumer resilience. What we're seeing is that we are no longer just for early adopters. We are now resonating with a much wider audience from established runners to the very young. Our brand strength is over-indexing with Gen C consumers. In the US, we have previously shared that awareness has more than doubled in a single year. making On one of the top wanted athletic shoe brands among teats. They love the soft wins campaign with Elmo for the cloud surfer. We're also seeing this broad appeal powered by diverse sports and franchises like the cloud, which has grown from a running shoe into an everyday essential. For us, it feels like we've reached a tipping point. We are converting broad communities who are buying On's premium sports product again and again. Our channel strategy is another dimension of resilience and balance. Wholesale reminds a vital channel, and we're incredibly successful with over 11,000 doors globally, from the biggest players to local running specialty. At the same time, our direct-to-consumer business, both online and in physical retail, is a key highlight with a particularly strong performance. We now operate 54 ONN stores worldwide, and these aren't just places to transact. They are spatial experiences where product, brand, community, and storytelling come together. With robust productivity growth in existing ONN retail doors, we are confident to scale ONN retail to create further balance between ONN's wholesale and D2C channels. Next up are high-profile openings in Palo Alto, Stockholm, and sales. This global footprint has been a priority for us since the very beginning. As founders of a young Swiss brand from a small home market, what do you do? We went to Europe in our first year, to the US in our second, and to Asia, to Japan, in our third. That global mindset has led to a significant business in the world's most important sports market, the US, where we continue to see strong growth. At the same time, we are seeing rapid demand acceleration in Europe, with France, Italy, and Spain showing lots of untapped potential for run. And the continued triple digit growth in Asia as a whole is nothing short of amazing, including new expansions for our brand into Singapore and Thailand. All of this is leading to a beautifully balanced global portfolio. We are bringing this global mindset to manufacturing and supply. And it's this focus that recently earned us a major recognition. Fast Company named on one of the world's 50 most innovative companies of 2025, thanks to our light spray technology. This ultralight opera is sprayed, not built, in a one-step process, automated by a robotic arm in just three minutes. A few weeks ago, we launched our first light spray factory in Zurich with four robotic arms. It's a path to the future of manufacturing, faster, less labor intensive in various locations with a much simpler supply chain that's closer to consumer demand. It's all about the long game and the company that is innovating on product manufacturing beyond the product itself. Our financial profile mirrors our vision to be the most premium global sportswear brand and enables us to build for the long term. Powerful top-line growth and our premium positioning mean we can consistently invest in important multi-year projects, striking a balance between near-term success and long-term growth drivers. Our ambition of constant innovation means we dedicate significant time and financial investment into projects like LightSpray, knowing they will only fully unfold over several years and require consistent focus and patience. As I noted earlier, it's these long-term commitments that support and strengthen our resilience. It's a virtuous circle. Our leadership philosophy builds a company that is here to stay for a very long time. As a founder-led business, Kasper, Olivier and myself, with Martin as CEO, operate together with our senior leadership team like athletes in a team sport. We sometimes lose together and we often win together. We have the bandwidth to play both defense and offense at the same time. And we give each other very direct feedback once in the locker room after the game. Our deep bench of talent is the ultimate source of our resilience. We hire for an exceptional balance, the right mindset aligned with the five spirits of ON combined with a unique skill set. Our diverse team comprises over 100 different nationalities, operates from 15 global locations and attracts 200,000 job applications a year, all in pursuit of finding exceptional talent. This deep bench of talent and our global structure bring in critical perspectives from around the world to ensure we build a global brand with local sensibility. Our mission, Dream On, speaks to the growth mindset at ON. We dream daring dreams that create resilience, balance, and opportunity, now and in the future, because we firmly believe the best days are ahead of ON. We could not be more excited that Time Magazine sees it the same way, and in June this year, named ON one of the 100 most influential companies globally. You just heard me share my excitement for the long game vision of ONN. But the vision is only as strong as its execution. It's my great pleasure to now hand the baton over to my partner and our CEO, Martin, to walk you through the details of a quarter that proves our vision is becoming a reality. So Martin, please.