Brunello Cucinelli Spa

good evening and welcome to the presentation of the first half results 2026 h126 results of the fashion house Brunello Cucinelli speakers will be Brunello Cucinelli Executive Chairman and Creative Director Luca Lisandroni CEO Riccardo Stefanelli CEO Dario Pipitone CFO Moreno Ciarapica Co-CFO Senior and Pietro Arnaboldi Investor Relations and Corporate Planning Director In order to receive help from an operator during the conference call you can press star followed by zero. Now I'd like to give the floor to Brunello Cucinelli. The floor is yours. So here we are. Good evening. It's slightly hot here. Actually, we are pushing 40 degrees Celsius. So good evening and welcome to all of you. I'm sure you're all a bit exhausted because it's been a full week of reporting, but I'm particularly pleased in general. It is the first time we are presenting the full half year results. as of 30th of July, because we've always broken down in two, but we were able to do so and we are particularly pleased. So I want to thank the team who made this possible. So the call will play out as follows. I will take you through the key highlights. Dario, our CFO, will provide more details, more colours. Then I will share a detailed view on the final outlook for 2026 together with good visibility on 2027 as we have almost completed the Spring Summer 2027 menswear and womenswear order collection. and honestly it concluded with excellent results. Luca will then provide you with a global overview of our markets, Riccardo will speak to you briefly about our factories, they are all fully operational and also he will talk about the new European regulations concerning the disposal of end-of-life garments. Finally, I will discuss our wonderful e-commerce project and our Calimacus platform, in which my friend Mark Benioff at Salesforce has invested, describing it as innovative and capable of rethinking digital experiences through AI. Let me read out. So excellent results, which allow us to slightly raise our revenue growth estimates for the full year. We therefore expect growth at constant exchange rates of between plus 10% and plus 11% in 2026 compared to an initial estimate of 10%. In the first half, the very significant increase in revenues is accompanied by an improvement in profitability and by the confirmation of a solid balance sheet structure. Revenues as of 30th of June are equalling 749 million euros up 13.3% at constant exchange rates and 9.5% at current exchange rates retail channel up 19.3% at constant exchange rates with a double digit increase across all reference markets and a very positive second quarter plus 18.6% constant exchange rates The wholesale channel also confirms a solid trend in both quarters, with a rise of 2.7% at constant exchange rates as of 30th of June 26th. Growth widespread across all geographies, with revenues at constant exchange rates up by 20%. Sorry, 20.6%. I said that I would not read the decimals, but I'm reading them. With a 20% 0.6% in America, 5.3% in Europe, plus 14.1% in Asia, and particularly significant the contribution of China. Well, China is 13%, mind you. This is very important to remember. EBIT equaling 128.2 million, up 12.6% compared to the first half of 2025, with a margin of 17.1%, rising from 16.6% as of 30 June last year. Net profit equaling 78.2 million euros, plus 2% compared to 30 June, with an incidence of 10.4% on revenues. Investment standing at 57.2 million with an incidence of 7.6% compared to 63.5 million last year, incidence of 9.3%. Commercial investments are on the rise, whereas production investments decrease following the full completion at the end of 2025 of the new factories and of the expansion of the Solomel headquarters. The greater part of the investment plan envisaged for 2026 was carried out in the first six months of the year. net financial debt for the core business equaling 225.1 million euros compared to 197 in the 30th 25. We confirm the expectation of a quite a significant reduction in debt by the end of the year compared to the levels of 31st December 25. supported by the cash generation expected in the second part of the financial year and by the timing of the 2026 investment plan concentrated mainly in the first part of the year. Then, sales campaign. This is another important point. So, spring-summer 2027 sales campaign. The collection of orders for men's is close to completion and that for women's is currently underway with extremely positive feedback for both collections. So, aware of the solidity of our business model and of the pleasant atmosphere that we continue to feel around our brand, we envisage a healthy revenue growth of around 10% for 2027. Significant recognition of the technological value on the international development potential of the artificial intelligence platform developed by Solomei AI. called Callimachus with important investment by Salesforce, world leader in AI-based CRM solutions. Now, my quote... so we close the first half of the year with results that we view as truly truly outstanding we have the impression that the brand is enjoying exceptionally favorable momentum across the world with our boutiques embodying our stylistic identity our way of working and also our way of engaging with others and the lifestyle in which we have all The extremely rewarding way of working allows us to experience the variety of true luxury to which we have always aspired. Exclusive yet gracious, a luxury defined by products and outstanding quality, exceptional craftsmanship and genuine exclusivity. Order intake for men's and women's spring-summer 27 collections has been excellent. Equally encouraging has been the start of sales for the fall-winter 26 collections. now available in our boutiques. Encouraged by these highly positive indicators, we are raising our guidance for full year 2026, increasing our expected growth from 10% to 10-11%. We also remain highly confident about 2027 when we anticipate delivering healthy growth of around 10%. Now, Dario will give you the finest details. Thank you Brunello. So I would use the analyst presentation, analyzing the main financial economic performance in the first half. As already anticipated by Bonello when commenting on the press releases, revenues amounted to 749.4 million euros, up 13.3% at constant exchange rates and 9.5% at current exchange rates. We reported very solid growth across all geographies and across both distribution channels. thanks to the strong revenue performance, and Luca will comment this more in detail later, the income statement on slide 17 shows an overall balanced structure in terms of margins and costs, with EBIT increasing by 12.6%, growing more than proportionally compared to revenues and reaching 128.2 million corresponding to a margin of 17.1% of revenues net profit 78.2 million euros or 10.4% margin of revenues the first margin at 75% of revenues increased by 50 basis points compared to the previous in terms of revenue incidences. Improvement is mainly attributable to the sales mix achieved during the period. As to the channel mix, we refer to the positive contribution of the growth of the retail business whose incidence in the two time periods went from 63.7 in 25 to 66.7 in June 2026. As far as geographies are concerned, the positive contribution mainly comes from the growth reported in America and Asia, which are the regions characterized by a markup structure that is more supportive of the first margin. It is, however, important to underline that this effect becomes neutral at EBIT level due to the related commercial costs, which in these same regions are also proportionally higher Operating costs, excluding depreciation, increased by 8.7% compared to the first half of the previous year and reflect the continued growth of our fashion house. So slide 19 to have more colour on the main costs, rent, personnel and communication. So we can say that personnel costs as of 30 June 2036 amounted to 138.4 million, representing an increase of 10.2% with an incidence in line with 30 June 2025, 18.5%. Human resources amounted to 3,543 full-time equivalents, an increase of 260 FTEs compared to June last year. This increase is down both to the targeted expansion of the retail network following the opening of new stores, store expansions, and case Cucinelli realized from the second half of last year until June 30th, and to the development of our production structure, both in terms of direct manufacturing personnel and the teams managing and coordinating our extensive network of artisans and suppliers of precious raw materials. Rental costs, net of the effects, deriving from the application of IFRS 16, amounted to €117.3 million, up 12%, compared to €104.7 million of last year. This increase is mainly ascribable to the new and selected openings as well as expansions carried out during the second part of the year and some contract renewals. And then to conclude, communication investments amounted to €49.8 million up 3.1% compared to €44.4 million last year, with an incidence that went from 6.1% of revenues last year to 6.5% this year. The planning of our marketing activities foresees, as Brunello was saying, a greater concentration of events in the second half of the year. Therefore, we expect the related incidence of revenues at year-end to be higher compared to the figure reported in the first half. To conclude with depreciation and monetization, as a result of all this, EBIT amounted to 128.2 million euros, up 12.6%, with an operating margin of 17.1% compared to 16.6% last year. following this improvement operating profitability and after financial management showing net financial charges of 18.4 million euros due to a significant reduction in foreign exchange gains together with a tax rate of 28.8% which we consider a healthy level for an Italian-Italy based company net profit during the 30th 2026 amounted to 78.2 million euros 10% of revenues Before completing the income statement, I would like to briefly return to the comment on financial management with the support of slide 20, where we have included the usual breakdown highlighting The component that we could define as recurring, which is the basis on which we can project our expectations for the year, a component related to the foreign exchange fluctuations, and an additional component including the effects deriving from hedging activities and equity investments. The ordinary and recurring component amounted to 20.1 million euros and showed a slight increase compared to the previous year. 17.3 million, mainly due to higher net financial charges related to the characteristic net financial debt, which we will comment on in more detail later. Now, slide 21. Now, I will comment the main balance sheet items, some comments on net working capital, investments and net financial debt. networking capital including net current other current assets and liabilities amounted to 317.6 million euros corresponding to 21.6 percent of rolling last 12 months revenues as of June 30th 2026 compared to 22.6 last year and 22.2 last year June and this 22.2 this time about 2025. Looking at the individual components trade receivables show a slight increase of 6.8 percent mainly ascribable to the natural evolution of the business and the timing of some shipments related to the fall winter 2026 collection. We consider our trade receivables to be extremely healthy both thanks to the quality of our overdue receivables, with the level of receivables outstanding beyond 90 days showing a significant reduction compared to both December and June, and due to the very limited levels of losses recognised in the income statement, which were virtually negligible during the first half of the year. Payment terms towards suppliers, collaborations and external consults remained unchanged, with trade payables amounting to €171.6 million, slightly lower compared to previous periods. Inventory incidence on rolling last 12 months revenues stood at 28.6% substantially in line with both June 30th and December 31st 2025 . This is a level that we view as healthy and consistent with the ordinary requirements of our business model. Net and other current assets and liabilities showed a negative balance of 42.4 million euros at June 30th 2026 compared to 9.7 million at December 31st 2025. This change is mainly ascribable to the fair value measurement of derivative instruments used to hedge foreign exchange risk and related fluctuations as well as changes in the balance of tax receivables and tax payables. Moving on on investment on slide 22. As of 30th of June 2015, 7.6% of our revenues, vis-à-vis 9.3% of the previous year, and represent the majority of the investment plan expected for full year 2026. They amounted to 57.2 million euros. In detail, 38 million in significant commercial investments, increasing compared to 32 million last June. Then 11.6 million in industrial investments, showing a significant reduction compared to 25.2 million June 30, 2025, mainly as a result of the completion of the 2024-2025 two-year investment plan, aimed at strengthening our highly artisanal production capacity. And this plan will provide us with the production spaces and premises required to cater for our growth over the next 10 years, the remaining approximately 8 million almost entirely related to important technology investments. To conclude, Characteristic net financial debt on slide 23 amounted to 225.1 million euros vis-à-vis 197.2 million euros last year. The increase is down to the changes in net working capital during the first half of the year together with the concentration in the first half of the year of the investment plans for 2026 as previously mentioned and the payment of dividends mainly carried out during the second quarter for a total amount of 73.7 million euros.

Thank you very much for your attention.

Brunello, you have the floor. Thank you.