On Holding AG

Hello, my name is Ellie and I will be your operator for today. Welcome to the on holding AG first quarter 2026 results call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star and then one on your telephone keypad. Thank you. I'd now like to hand the call over to Liv Redlinger, Head of Investor Relations, please go ahead.

Good afternoon and good morning to our investor community. Thank you for joining on First Quarter Earnings conference call and webcast. With me today on the call are Caspar Capetti, founder and co-CEO, Martin Hoffman, outgoing CEO and CFO, and Frank Floos, our new CFO as of May 1st, David Alleman, founder and co-CEO, will also join us for the Q&A session. 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 20S for the 2025 fiscal year filed with the SEC on 3rd March 2026 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 to the most comparable IFRS measures. Lastly, we prevent certain metrics in US dollars during this call using the exchange rate as set forth in the H10 statistical release of the Federal Reserve Board as of March 31st, 2026, solely for the convenience of our investors. We begin with Kasper, followed by Martin and Frank, leading through today's prepared remarks, after which we are very much looking forward to opening the call for a Q&A session. With that, I'm very happy to turn the call over to Kasper.

Thank you, and a very warm welcome, everyone, to our first quarter 2026 earnings call. It is a great pleasure to share more on an outstanding quarter. The year is off to an extremely strong start, Net sales exceeded 830 million Swiss francs, the first time we have crossed the 800 million mark, growing 26.4% at constant currency. At the same time, On's disciplined focus on premium execution delivered exceptionally strong gross profit and adjusted EBITDA margins, a clear reaffirmation of our premium strategy. Demand is incredibly broad-based. Our strategy is resonating across regions categories, and channels, reaching more fans than ever before. You see it in our numbers, strong constant currency double-digit growth in the Americas, in EMEA, and in APEC, and well over 50% constant currency growth in apparel globally as we continue our strategy of growing toe-to-head. These are numbers we are extremely proud of, and as our business becomes more global and more multidimensional, Our vision to be the most premium global sportswear brand is only becoming clearer, and we are even more committed to continuing to chart our own course. You see it in the products we create, the innovation we bring to market, and the communities we build. The energy around the brand was clear everywhere this quarter, whether it was the electric atmosphere when Flavio Coboli won his first hardcore ATP 500 title, or the palpable excitement at the Tokyo On Squad Race. or the bus at the openings of our new stores in Seoul, Shenzhen, and London. It was clear. Our mission and strategic execution is reaching far and wide. For me, nothing captured this better than LightSpray. What began as one of the boldest ideas we've ever had is today proving itself on the world's most competitive stages. This spring, Yeman Kripa won the Paris Marathon in a prototype of the next generation of CloudBoom Strike. And at the London Marathon, Helen O'Berry posted her most recent personal best, the second fastest time ever recorded in a female-only marathon. And all importantly, we're also making huge strides in building out the technology into a true commercial engine for ON. In February, we increased our production capacity for light spray 30-fold when we opened our light spray factory in Busan, South Korea. The quarter also saw us bringing light spray closer to a much larger community of runners, From Los Angeles to Boston to London, thousands of fans saw the robot in action, watched the shoe move from filament to asphalt in just minutes, and then felt the product for themselves. The Light Spray Clown Monster Hyper sold out quickly across many of our channels, with particular strong demand in Asia Pacific and the U.S. In the opening week of our new Boston store, Light Spray represented close to 20% of footwear net sales. We are currently selling several hundred pairs a day in our D2C channels alone. For a technology still at the starting line of its commercial journey, this is an exceptional indicator of demand. During the quarter, LightSpray also played a significant role in one of our Blockbuster franchise's product launches, the CloudMonster 3. The top-of-the-line LightSpray CloudMonster Hyper, sprayed in Busan, brings our revolutionary technology to a broader consumer base for the first time. The entire franchise update resonated strongly with consumers and is outpacing its predecessor across all regions. At the same time, LifeSprite is only one part of our innovation pipeline. Zorio on SuperFoam for Everyday Runner is another major step forward. Compared with industry standard EVA, it weighs roughly half as much but provides 60% to 70% more energy returns. Having achieved the combination of super forms with the structural engineering cushioning of CloudTech represents a generational shift in running technology, not just for ON, but for the industry. Surreal will debut with CloudSurfer 3 this October and roll out at a rapid pace across the key everyday running franchises in 2027. We will present these products at the inaugural ON Global Run Summit in Paris, where we will host our top 100 global run accounts. All of this matters because consumers are choosing to spend where products are truly differentiated, exactly where we are built to win. ON innovates at the intersection of performance, design, and sustainability. In that sweet spot, we create an unmistakable high-quality experience for our customers, an experience that we can build on and protect through every channel and every touchpoint as we grow for the long term. This is what we mean when we say that we aim to be the most premium brand in sports. And we see this play out in the commercial results and in consumer perception data. Our Q1 brand track shows a sharp increase in run awareness, especially in the U.S. In Q1, we grew nearly 30% with our run special accounts in Europe. At the same time, we continue to bring new customers in everyday running through our closer relationships with leading sports retailers in markets, including the U.S., Japan, and Europe. Running is where we continue to prove the power of our innovation and our great product with authentic communities. And it continues to open doors far beyond running, creating deep engagement, growing our relationship with the movement class. As you heard from David last quarter, this new ageless consumer sees health as their new wealth and sportswear as identity, not utility. They want to buy into a brand that has strong cultural relevance, and truly sits at the intersection of performance and lifestyle. Accordingly, we continue to see exceptional momentum in the quarter in lifestyle. We are being extremely intentional here. Products like CloudTilt are designed for sneaker taste, with the comfort, design language, and premium feel that young consumers are looking for. The proof is in the numbers. In Q1, CloudTilt and CloudTilt Remix saw exceptional growth in all regions, with CloudTilt becoming the number one styled footlocker in Europe by wide margin in March. Additionally, partnerships with leaders in the sneaker space are helping us acquire new young consumers at attractive margin profiles while continuing to enhance our premium positioning. The highly sought-after recent CloudSwift relaunch with KISS and the female-led head-to-toe silhouette launch with Zendaya show how we are building credibility with new communities through design, culture, and premium product. The broader impact is already visible in our data. In Q1, 18 to 24-year-olds significantly increased their share of our D2C customer base, the largest increase we have seen since our data began, and this trend has accelerated into early Q2. Our Q1 brand tracker also showed strong progress in both performance and style cues. We have engaged with and converted new communities successfully before. When we entered tennis, it was a new community for us. Today, it is one of our most engaged audiences, our highest growth apparel vertical, and continues to deliver outstanding results in footwear. Training is also bringing thousands of new customers to the brand every quarter. And in outdoor, the CloudSoma trail running franchise has had a very strong debut, giving us another platform for product-led expansion. For us, this is all part of the same ambition. to build the most premium global sportswear brand with the breath to resonate across communities, genders, categories, and generations. As our reach grows, we are protecting and strengthening our brand. In an increasingly promotional market, we are even more committed to our full-price strategy. We are reaching new consumers, but we are doing it with quality and discipline. Our results represent this strategy. Sustainable premium growth the kind that builds the brand for years and decades to come. So when I look at Q1, I see much more than a strong quarter. I see a brand scaling with momentum, a team executing with clarity, and a strategy that gives us even greater conviction. And we are charting our own course. We are as ambitious as ever, and we believe the next chapter on can be even better. On that note, I'm very pleased to confirm that we will host an Invest Today in Zurich on September 21 and 22, 2026. It has been three years since our last Invest Today in 2023, and we have made tremendous progress since then. We look forward to sharing with you all the things we have dreamed about in this next phase of our journey and how we will continue to deliver on our vision to become the most premium global sportswear brand in years to come. This brings me to a moment of gratitude. To you, Martin, I want to express our deep and heartfelt thank you for an incredible run together over the last 13 years. You have been one of our closest partners on this incredible journey. Together, we have built, challenged, debated, pushed, and celebrated a true team. You have left an indelible mark as a strong leader the last five years as CEO and CFO, who ensured we had the financial thanks of pressure, rigor, and clarity to make our dreams real. We are deeply grateful for your leadership, your friendship, and your commitment. We wish you the very best for all your future endeavors, and we are pleased you will continue to support us all as an advisor into next year. David and I are thrilled to continue to lead our incredibly talented global team at ON. In this next chapter, serving as co-CEOs. The two of us built on together with our co-founder, Olivier, from an idea into a business 16 years ago, setting the foundation for what you see today. We then led it through over a decade of hyperscaling and our IPO, after which we continued to work hands-on as executive chairman in partnership with our senior leadership team, shifting on premium vision and strategy, product and channel innovation, as well as defining and building our growth engines across the business. It is in this spirit of continuity that David and I see it as an immense privilege to further help forge on the path in these new roles. We're also very pleased to have Scott Maguire step into an expanded role as president and COO and to have welcomed our new CFO, Frank Slois, at the beginning of this month. They both completed our broader leadership team of both long-serving executives and newer additions as we continue our growth at global scale. So we're not changing direction. We follow the same strategy, the same values, and the same conviction that have guided us over the past 16 years since we founded the business. Our strategic growth pillars, premium positioning, and innovation-led approach remain the path forward. As co-CEOs, David and I will ensure our strategic intent is fully aligned with decisive execution as we continue to grow in size. With that, I'm honored for one final time on this call to hand over to my great friend and partner, Martin, for the financial review.