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.

Well, now let's come to the final 2026 outlook. And I'd like to remind you that we always would like to focus on absolute luxury segments and what we're going to say pertains to this segment. In light of our first half results, which exceeded our expectations and considering the excellent momentum of our brand, we are raising our year-end estimates and we expect growth at a constant exchange rate to be between 10% and 11% compared to an initial guidance of 10%. foreign exchange as of the end of the year it is expected to be around 1% but throughout our history as a listed company since 2012 the average impact both positively and negatively has been approximately 0.5% EBIT is expected to improve reaching around 17% Investments are expected to be around 6% as all of our production related investments have now been completed and this is going to be true for the next 3 year period. Investments in image and communication will remain consistently between 6 and 7% per year Over the next two years, however, we will be presenting the movie in many different countries. However, the full production cost of the film was entirely expensed over the previous three-year period, and we're very happy with that. Net financial position is improving, accounting for 11-12% of revenues compared to 14% in 2025. Let's now move to the outlook for 2027. We provide you with this outlook because we already have collected orders. Anticipating what Luca and Riccardo will share with you soon, we'd like to give you our initial view for 2027. having almost completed the menswear and womenswear order collection with excellent results and having received the feedback and the collection both from our valued multi-brand partners as well as from national and international press we expect another year of healthy growth of around 10% but clearly assuming no change in our strategy as you can well understand for the time being we are very happy now Luca has the floor Thank you very much. I welcome you all. As Dario said, we believe we've just closed another very good quarter. Sales growth has remained very consistent throughout the individual months with a well-balanced performance, both across geographies, product categories, and for a perfect balance between menswear and womenswear. and these are factors that reinforce our confidence that our growth is solid and sustainable. I can also say that sales in July have continued to follow this very positive trend Luca, pay attention to your pace for the translation. As we review our first half results and mindful of all the recent announcements made over the past few days, I will try to be even more concise than usual so I still need more time for your questions. I'd like to draw your attention onto three figures that are particularly meaningful to us. Well, first, retail performance plus 19% in the first half and plus 18% in the second quarter, excluding the impact of the Middle East that the two quarters were virtually identical, both delivering very strong performances. Second, the outstanding results achieved by our online boutique following the launch of the website and 7% of total revenues. Again, thanks to Calimacus. We see direct e-commerce business that accounts for approximately 7% of total revenues. and we also see an indirect effect on brick and mortar stores with an increasing number of existing and new customers coming to the store with pictures drawn from our website. And then we have the performance of China and the Americas, both of which recorded growth of more than 20%. Let's now get into the details of that. Well, as far as retail is concerned, this season has been truly important for us. The collection had an outstanding quality, as we said earlier this year. The retail network remains young and dynamic, both in terms of locations and people, and which in our view continues to offer significant and healthy potential for organic growth. Comparable store sales were very strong. as for new store openings and store expansions will they have fully met our pre-opening expectations and I'm referring not only to the openings completed early this year but also to those taking place in 2025 which have had a more meaningful impact on this first half performance Among these, I'd like to highlight the Paris and Los Angeles boutiques that have quickly established and have become the most important stores in our network. Then as a reminder, the new website has created a significant value. The new functionalities have made a strong contribution, delivering an experience. that is increasingly effective, engaging, and aesthetically refined for our visitors. All key performance indicators have been positive. The number of visits continues to increase. The average time spent on the site has nearly doubled. The number of orders has increased, and the average opening value has increased as well, with our digital customers' purchasing behavior becoming increasingly similar to that of customers shopping in our physical boutiques. Let's come to geographies now. China first, as you know. China accounts for approximately 13 to 14 percent of our total revenues however the absolute contribution of our retail business in the region is becoming increasingly material quarter after quarter reaching levels that are comparable with those of our major geographies Well, we also believe that this is a particularly important moment for us in China for three reasons. First, according, well, apparel is growing at roughly twice the pace of accessories and there is article business for fashion and a study carried out by McKinsey and in this report this report highlights that Chinese luxury customers that are increasingly seeking high quality products that are recognizable only to a small and knowledgeable audience so they are focusing on high quality products but for A small audience, very exclusive. If we look at ourselves, at our brand, we think that our brand remains perhaps more than anywhere else young, fresh and synonymous with authentic luxury. So we believe that the coming decade will be very important for us in China. We have often spoken about significant opportunities that we see in this market that start materializing in this country. Our focus continues to be on China, so 2026 is the year of Shanghai for the opening of Casa Cucinelli in September. and for the expansion of our boutique at Plaza 66, which is already one of our most important stores in Asia. And in 2027, we will instead strengthen our positioning in Beijing with the expansion of our China World boutique and another important opening. Let's now come to America. There are three trends. Well, an increase in average spending on luxury, a growing concentration of spending at the very top end of the luxury segment, and the emergence of new luxury destination with a broadening up of footprint. We opened new boutiques in Nashville and Naples, reflecting the trend of the American luxury market becoming increasingly widespread and locally driven. From a strategic viewpoint, these opportunities are very attractive because it enables us to serve new groups of customers while strengthening our high-end brand positioning and the relationships with our customers. Our boutiques continue to perform very well across North America. Neiman Marcus Sachs and Bergdorf have definitely moved beyond the period of financial uncertainty. With them, we closed a very positive first half, both in terms of our sell-in performance and, more importantly, our sell-out performance to end customers. The second quarter was stronger than the first, supported by a gradual increase Improvement in product availability across the stores and especially thanks to customer loyalty that is very strong across all the three department stores. And so we are confident about the central role that these department stores play within the US luxury market. Payments on time, operations smooth. So these are the three major highlights. Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa further confirming the strategic importance and the strength of this region within our business. 2.7% growth for wholesale in the six-year period in line with our expectations and in line with our idea of creating value over the long term. and our customers are in good shape. They are modern and fully understand how strongly we believe in the contribution they make to the long-term strength and longevity of our brand. And so they are equally aware of the high standards we expect from them, both in the physical stores and on the digital platforms. One final important piece of information as far as sales are concerned. So it's a good growth, both value-wise and in terms of volumes. If we focus on the value wise growth, well we see that the search for high quality garments, exclusive garments on the one hand is important and also the recognition of our brand in this high end segment. When we look at our product offering, there are some categories like menswear and womenswear, tailoring, made to measure, outerwear, dresses, couture, knitwear and pants. Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa as you can see the increase in the first margin outpaced of the growth in rent and personnel costs and so this confirms that gradual investments released the growth in revenues thus managing costs so we think our company has become stronger but at the same time has remained lean then the foreign exchange impact 1.5% in the second quarter and we aim at reaching full neutrality in the second half. We look at the second half with confidence. We said July has been very successful. We are very confident in the products offering that will be delivered to the stores in the second part of the year. and we also had very positive feedbacks on the fall-winter collections upon presentation. We also have a store opening planned besides Casa Cucinelli and the expansion of the Plaza 66. We will open the Grove in Abu Dhabi and we will expand Geneva Boutique for events. where we will go on with family events, which are a special occasion for us. We will also have important events, three. One in September, the official opening of the Santinorè boutique in Paris, accompanied by the French premiere of the film. In October, Shanghai, with the screening of the film. following the enthusiastic reception that Brunello received at the Shanghai International Film Festival and last but not least in December at Brunello's tribute to the world of cinema in Los Angeles. We will also go to Tokyo in October. So well with that I'd like to say that we really look forward to closing another record year for our company so record high revenues but a year which is also rich in value and meaning for our brand thank you very much thank you Ricardo, I will be very brief. I have three updates for you. So, well, over the past few days, we've successfully completed the delivery of our full winter 26 collections. with outstanding punctuality and exceptional level of craftsmanship that has always distinguished our work and this is thanks to the efforts by the creative team workshops and in-house tailoring workshops and the 400 Italian artisan workshops employing approximately 9,000 people With them we have a direct relationship without any intermediaries and we work with them on a daily basis. During our daily interactions we meet them twice a year and in mid-September we will once again meet them to share our production plans for 2027. and this takes place during every season. This confirms production model with a high level of craftsmanship and we have great flexibility and speed. You know how important speed is, especially in replenishment. was for the replacement of important items. Second update, as far as the industrial investments are concerned, we included everything in 2025. We're very happy and we are extremely pleased with the workplaces that we've created, designed around people and around the quality of their work. These spaces will provide us with the production capacity required for the next decade. and you know that we are particularly pleased to continue receiving job applications for manufacturing workforce and this confirms that the place of work and fair consideration are the key elements for blue collars. last but not least a short reflection on the new European legislation and we are favorable because well the new regulation prohibits companies in the textile industry from destroying the unsold garments we embrace this regulation with great conviction not so much because it changes the way we operate but rather because it recognizes a principle that is deeply rooted in our values that is the idea that a garment has a value that must be preserved. Well, historically we've always allocated approximately 2-3% of our production to donations in support of people in need throughout the world. Building relationships with small organisations around the world, even small organisations, this is very important. during the COVID pandemic. We did something particularly meaningful and special by donating the unsold products from our boutiques. We launched the Brunello Cucinelli for Humanity project. This initiative continues today and currently accounts for 4% of our garments. In addition, a further 45% has always been allocated to purchases by our employees and their families and we offer a significant discount of the retail price giving them the opportunity to wear products that they would otherwise not be able to purchase. so here too we are strongly convinced that a high quality garment should continue to be experienced, worn and passed down over time so we're very pleased with this new European regulation which must be an important step towards a culture of quality, responsibility, product longevity, values that belong not only to our Casa di Moda but also to the culture of Italian craftsmanship. Thank you very much.

Well, I believe we still have five minutes, so at least we have five minutes, 15 minutes for questions. So, this Calimacris is very important, a very important project for us. We held a conference, a press conference the other day, and Calimacris is a platform that redefines the digital experiences in the AI era. and we basically signed an important investment agreement from Salesforce in Italy and Europe. It's an important investment for them. But I'd like to read what Mark Benioff said, the chair and CEO of Salesforce. So... Cucinello has always believed that technology should elevate humanity and this belief is at the heart of Callimachus. We like this very much. The team has developed an innovative platform that reimagines through AI the digital experiences combining conversational capabilities, business context and real-time personalization to create entirely new ways for companies to engage with their customers. So we are proud to collaborate with Brunello and the Solome AI team in paving the way for a new generation of artificial intelligence powered experiences. Then, of course, the transaction falls within the scope of the Italian Golden Power and needs to be submitted to the Presidency of the Council of Ministers. Now, to summarise, we believe that our brand is currently experiencing a very positive tempus, a moment of great global momentum. Perhaps we can say that at this particular moment our brand is truly cool and, you know, this is the way fashion works. We are positioned in true luxury and you should never, this is important, you should never expect us to introduce entry-level, entry-price products. Everything continues to revolve around the single brand Brunello Cucinelli. No second brand, third brand acquisitions or anything. So now I would like to talk about luxury for a minute. When I started this journey 48 years ago and until approximately 25 years ago, the market was traditionally divided into luxury, the number two upper middle segment, middle segment and lower segment. Then, during one of the first meetings of luxury held in Milan, about 25 years ago, attended by my esteemed Sergio Loro Piana, a stylish friend who is no longer with us, Pupi Solari, a wonderful owner of the wonderful boutique on Pia Monte Napoleone, and another Italian entrepreneur and myself, and the topic was luxury. at one point this entrepreneur took the floor and said that he had acquired a knitwear factory in Umbria producing sweaters at 20 euros and he defined this as accessible luxury you see myself and the other attendees we basically looked at each other a bit puzzled but that's the way he called it from that day onwards the discussion revolves around three different categories absolute luxury, aspirational luxury, accessible luxury always with this pyramid that is sometimes very questionable. So, to conclude on this extremely important topic, we believe that true luxury is a product that is of exceptional quality, the result of outstanding craftsmanship and exclusive in its distribution, and I believe that the theme of exclusivity is central for the future. Finally, the image of Spoloneo is of the utmost importance to us. as it embodies our vision of how to live and work and we hope it conveys a sense of authenticity, simplicity and spirituality. A place, company where one can enjoy an experience that is above all deeply human. You should consider that we have about 14-15 thousand visitors every year and you see I'm busy even on Saturdays and Sundays I see them strolling through the village So before concluding, I would like to recall that during our April call, we spoke of the wonderful atmosphere felt throughout Milano, Correzioni, you know, shared by buyers and journalists alike. And because there was this desire about these new proposals across many brands following the 26 collections, now, You know, we all discussed this topic. After this busy week of half-year results presentations, which have given us energy and renewed conviction, we have the feeling, and we want to share it with you, that overall we're moving towards a positive phase, one that lifts our spirits and gives us fresh momentum. So how do we work and what about our current situation? Our total focus must be on the product always and this product must be new, contemporary, modern and youthful. And it needs to have a right balance between price and value while fully acknowledging that we create garments that are costly and at times very costly. Everything goes out of fashion quickly. It has always been written so, in every dictionary, even those dating back to the 1750s. And as you know fully well, we do not believe in evergreen products, because even the navy blazer this season is one and a half centimetre longer than the previous season, and it is not an evergreen. With this awareness, we will make focus an equal serenity. Knowing that true creativity arises from mutual esteem, respect for others, the courage to listen or to differing views. If there is this, we can definitely say that that's where true creativity is for.

We can now open the floor for questions.

You should also know that we never adopted the work from home or remote working mode because we believe that otherwise you lose collective creativity. There is a blurred boundary between private and business and work life and young people do not learn at all. And now we have time for questions. Carlos Coloperator speaking. We will now start the Q&A session. Whoever wants to ask a question, please press star followed by 1 on your phone. In order to exit the booking list, press star followed by 2. Please ask your questions speaking into your microphone. Whoever wants to ask a question, press star followed by 1 now. The first question is from Chiara Battistini, JP Morgan.

Thank you and good evening.

So my first question is on the update of the guidance up to 10-15% for the year. Given how the first half performed, does it show a slowdown in the second half of the year? And also given the positive comments in the industry, I was wondering How did you come up with this guidance and how is the second half of the year going to perform?

The second question

on the second quarter performance in Asia because in my calculations I see a slowdown in growth 11% without considering the impact of Clorox it was 18% in the first quarter I heard the comment on China that is still growing so can we have some colour about this slowdown and the third question is a a higher level question about your discount policies, especially on third party platforms. So I was wondering if you can share with us how you monitor the goods sold at a discount in order to counter excessive discounts. Thank you. So as to the first question, you see there is the war. As for Asia, we should consider the effect of the war and we see no slowdown in the rest of the Asian continent. You should consider that as far as the Middle East is concerned, it gave a positive contribution in the first quarter and it couldn't do it so in the second quarter, but we did see in the second quarter there was a good progress towards a recovery also favored by a higher and spending of the local customers as to the platforms whenever issues the floor it is an old story because you see we have the multi brands that maybe what they throw a platform is you may be from five thousand three thousand euros for a excise place up what is important is that even if you sell one of our items at a discount it always ranges very high so never sell something for 100 euros 200 euros always a very tiny discount so the number of pieces at a discount is very scanty and since we believe the multi brands are the true guardians of our brands we I will never step back we are because our multi-brands are, generally speaking, 110 years in heritage, which means that you see multi-brands are much more long-lived than our retail stores. Thank you.

Next question by Andrea Randone, Inter Montesim.

Brunello, you have given a lot of useful details. I have two curiosities. The first one is on the deal with Halimachus. What I'm interested in, have you already envisaged possible improvements for the solution you devised and whether your new partner can also represent a help in adding a technology content or if you have any plans in this regard the second question if you can go going back to the US strong numbers there and at group level you talked about new customers developing an interest in the brand and new cities if you can give us an idea because you're already quite well positioned but do you still see room for growth in the coming 12 months so I'll answer your question on Kalinicus telemetry has been a disruptively positive change in how you approach to our product has changed and the image has changed it has been a game changer you see they are number one in the world for the website you see eight people team worked on this website and so we told Mark if you want this website we can help you doing visual merchandising but if you can um Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa We are not too widely distributed, this is important. I think that America is the greatest example of this because it is a market historically very important for us and we keep growing in a very continuous manner. they very much appreciate the high rate of craftsmanship because always in you see in a knitwear we have a couture knitwear but on average it's 15,000 euros for a retail item so this entails quality style and then there is a very undivided attention to where you manufacture your goods how you behave in your stores and for us Andrea is an important thing So we see a bright future ahead of us. Of course, we have to, you see, the best future in the next three, five years is China. We currently have 15.5%.

We have just a handful of schools, so there is room for growth there.

Well, you know, I always say you should speak slowly, but I did not. Next question from the English conference, Maria Meita Bernstein, please.

Good afternoon, and thank you for taking my questions. I have two. First is a follow-up from the previous question on the Americas. I was wondering if you could break down the growth coming from existing compared to new customers. in the first half of the year versus last year. And then second, obviously the movie has now been made available across more geographies. Have you or your wholesale partners seen any immediate impact on brand momentum or visibility in the geographies where the movie was already launched? Or is it more of a long-term umbrella effect for the brand? Thank you very much.

Thank you, Maria.

Let me start from the movie.

Well, we won the first Golden Globe and, unfortunately, I have to travel the world, but it seems as if, well, in Shanghai it went well, then Canada, America. Well, the success is even higher than we expected because, clearly, Well, the movie describes a very important topic, the topic of work, of respect and also the topic of the origins and poverty as well. So the movie has given us a lot of advantages and as we said earlier, Well, the costs have been already paid across the past three years and so we will benefit from it in the following three years. As for customers, we are at about 400,000-500,000 customers. very few and we have a lot of younger customers a lot of 40 year old men and women so people who want to dress well and you know very important personalities we do not sponsor anyone they are just friends buying garments We are very happy with that development. Well, of course, I do not share this idea of quiet luxury. It's not quiet at all because you have to combine, mix and match colors in different places.

So we are very happy. Thank you.

Please note, if you want to ask a question, please press the star followed by one on your phone.

There are no further questions.

There is a question from the English conference, Natasha Bolnet, Morgan Stanley, please.

Hi, thank you for taking my questions and congratulations on the great set of results. The first is, Regarding your H1Q2 results, can you quantify the spacing contribution versus like for like in the first half? And then just maybe give us an update on your store opening plans for the second half and next year. I believe you're converting five Neiman Marcus stores to retail in the second half. And then my second question would be, please, if you could give us some color on order books and what your wholesale guidance is for this year and next.

Thank you. Natasha, go ahead with your questions again.

Again, because we cannot hear the translation, so go ahead with the English questions. Can you repeat the questions, please?

Sure. I was asking if management could quantify the spacing contribution in the first half versus like-for-likes and then update us on the store opening plans for the second half of this year and next year. and I believe they are converting five Neiman Marcus stores into retail in the second half of this year. And then my second question was asking about to have some color on order books and what the wholesale guidance is for this year and 2027, please.

The next question from the Italian conference, Paola Carboni, Equita. Yes, we also would like to ask a question. Good evening. As for the wholesale channel,

that shows a significant gap compared to Retain also knife-for-like so considering the more rigid approach that you have at discounts and the management of unsold garments will this lead to a decrease in the channel I was wondering or where we are in terms of target and when can we expect this wholesale funnel to grow again into a single digit? Well, the spring-summer collection is already growing very significantly. However, most importantly, Paola, the judgment of the collection by them is very important because the fact of knowing that the collection has been judged is still fluctuating

Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa Cucinelli Spa

Well, for the winter collection, we asked for paying a bit more attention to the network. Although, again, we don't think you will find garments of ours for 200 or 300 euros on the net, so we're very happy. But, as I said earlier, our multi-brand stores have a network page exceeding 100 years. and I believe our brands will not survive 100 years. I don't know, Paola, if I've been exhaustive. Yes, a follow-up question. Compared to the total growth guidance of 10%, 11% at constant exchange rates, how do you see the wholesale channel by the end of the year?

And...

Can you give us more details on the conversion plans for spaces? No, there are no such processes. We just asked, well, it's better to buy 1% less than being on the network. and also the guidance that we provide is consistent. We cannot hide the fact that things are going very well for us, but we shall not forget that we're in another country at all, so we have to be sincere and serene in working in a certain manner. Thank you. Next question from the English conference, Charles-Louis Scotti . Please.

Yes, good evening. Do you hear me? Because it seems that there is some...

Okay, cool.

Thank you very much. Three questions for me, please. The first one, I'm sorry in advance, but I will focus on the region that is seeing the slowest growth. But over the past few quarters, Europe seems to have been lagging behind the U.S. and Asia. Could you confirm that this is purely due to the wholesale business and that the ETC trends are actually just as strong in Europe as they are in the US and Asia? My second question is on margins. The margin improves significantly in the first half. Can we extrapolate the 50 bps improvement to the full year? And if I remember correctly, you had also booked an 8 million euro provision related to SAX last year. what is the current status of that provision and what should we expect in terms of its impact on the H226 margins and finally regarding leverage could you provide a bit more detail on the pace of the expected debt reduction embedded in your budget and how quickly do you expect the net debt to decline over the coming years thank you very much thanks a lot Charles starting by Europe we are a

As I told you before, extremely confident about the health of our business in Europe. We are growing retail plus 10% and we consider a very good achievement. Considering that we have a predominant part of the European demand that is related to domestic customers, and in any case, we have in the first semester a positive add-on brought by the international tourism. Regarding the provision for Saksa, Cucinelli Spa Cucinelli Spa Cucinelli Spa

Well, clearly, we've concluded, we've closed big industrial investments for 10 years. So in the next 5 to 10 years, we are expected to collect money because in the past few years, we also invested 9 to 10%. yeah but six percent doesn't mean that you're not going to invest that much so it's again quite a good amount but we no longer have the investment investment and that's why we think and we expect the following five years to be years of collection so that is going to decrease by nature thank you very much For further questions, please press star followed by one on your phone.

Next question, Melania Grippo, BNP Paribas.

Good evening everyone I have just one question so as I understood the space has contributed to the performance of retail in the first half of the year what about the second half of the year can we expect a similar the space might count in the light of the new openings I think we have an opening plan that is pretty balanced. We had a contribution from new openings in this first half that was higher than expected. And of course, now we are going towards a half where we believe that we have a great balance between organic growth and rest. Yes, you see, the opening is always the same, two, three, four, the year, three, four expansions, that's it. We would like to try and survive for the next 100 years. I don't know whether we will achieve that but we do plan for the longest of times because we do not believe in extreme speed. and we want to safeguard and preserve exclusivity because for us is that is this that's what really is the key feature thank you Melania thank you and have a good holiday thank you so have a nice holiday for those of you who are doing a holiday we are very pleased and we had this call at this time I'm very, very, very delighted with the reporting system in general in our industry. I'm very, very pleased because truth be told I am very pleased. You can tell that there is a recovery, there is positivity there. You see there was the lockdown, there was also in the reporting season, Cucinelli Spa

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