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Good day and thank you for standing by. Welcome to the Prada Group 2026 half-year results conference call and webcast. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session please press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be aware that we'll take and answer one question at a time before moving to the next question. And please also note that today's conference is being recorded. I would now like to turn the conference over to Mr. Andrea Bonini, Group CFO. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining Prada Group's first half 2026 results call. This is Andrea Bonini, Group C Financial Officer, and I'm delighted to be with you again. I'm joined by Mr. Andrea Guerra and Mr. Lorenzo Bertelli. The agenda for today's session is on page 4 and as always it will be followed by Q&A. As a reminder during today's call we may discuss forward-looking statements which are subject to risks, uncertainties and factors beyond our control that could cause the actual outcome and returns to differ materially from such statements. Please refer to the disclaimers including on slide 2 of our presentation. With that I will hand over to Mr Guerra.

Hello and welcome from my side as well. With the end of 2025, for sure we have completed a fantastic cycle of constant growth and expansion for our Prada Group. I think we have been all very pleased for this long journey and I think that we also paved and created the foundations for the new cycle. In 2026, as we already talked about it earlier in the year, We are building a new cycle. And a new cycle which is pretty simple and is made of a constant solid growth for Prada, a normalized but substantial growth for Miu Miu, and a new brand and creative journey through important milestones for Versace. I think that these are very important objectives and also very simple ways of saying that we want to build again this new cycle of growth on our three main brands. At the end of these first semesters, we have been able to accomplish our fundamental objectives on all three brands, I would add Church included. So we are Happy of this first six months and ready for the next. In details, this means that the group overall growth at constant FX first half has been 16%. Organic without Versace and at constant FX at 5% with an acceleration in Q2 at plus 7% on a 6% of a year ago. Going to the brands. Prada. Solid growth and maybe something more. Since January we have seen an acceleration on all important KPIs regarding new clients, regional spread, average price. We have been dynamic. We've offered a number of different projects to the market that have been appreciated. We have grown all categories. and always keeping in mind that Middle East is reducing our 6% growth in Q2 by 100 bps. Miu Miu, we had to normalize, we normalized. We're yet today normalizing but with great desirability and love for a brand. This is something that it's there and will continue to be there. and this will remain our North Star without shortcuts. We had to adapt mentally to a new way of doing in a new world of normalized growth. Took some weeks, maybe some months between the end of the year and beginning of the year. I think that today we are ready and committed. We delivered a positive 3% on a 40% of a year ago. On top of this, I think that we are also well equipped for the second half with a complete new collection of leather goods that I think can really help us in maintaining the rhythm. Middle East impact In Q2 has been something around 300 basis points. So I Would say that the mu mu effect from the Middle East has been quite big Versace First six months of the year in line with expectations top online and bottom line Having said so This means that we worked hard on many different things in these first six months. Organizations, synergies, costs, journey, commercial milestones. It's a long journey, but I think that we started it. Since July the 1st, Peter Muglieri is on board and we are extremely happy about it. Now we have another tough six months with no show And we need to fight. We need to get all the right opportunities and not burn any of them. We are all working on it. So even for the Versace brand, these first six months have been in line with our desires. Thank you. Now, Lorenzo, you can take it from here and I will be back for our closing remarks.

Thank you Andrea and good afternoon. The first six months of the year have shown once again that Prada is much more than a fashion brand. It's a creative platform where fashion, culture and innovation continuously reinforce one another. Everything starts with creativity. Our fashion shows and campaigns continue to express a distinctive point of view on contemporary society while exploring new artistic and cultural territories. Pradrenilon, Days of Summer and the Spring Summer 26 campaign were certainly among the highlights of this first half of the year. Beyond fashion initiatives such as Prada Mode and Prada Frames fostered dialogue across disciplines and creative communities while the presentation in New York of the latest chapter of our partnership with Action Space further reinforces Prada's unique positioning and intersection of design, advanced production development and high performance materials. We also continue to elevate the brand experience through landmark destinations. The announcement of Prada Galleria project in Milan, which will officially unveil in September, reflects our ambition to create immersive spaces where hospitality, culture and retail come together to express the Prada universe in every region and more engaging ways. Prada's ability to connect product, culture and experience remains one of the brand's defining strengths.

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Throughout the semester, fashion show campaigns and special projects such as Mimù of Cycle continue to shape a distinctive vision of femininity, while signature culture initiatives including Summer Reads, Women's Days and 30 Blizzards further strengthen Mimù's unique voice in contemporary culture. For the reopening of Ginza Flagship in Tokyo, Mimù debuted with the Chats Club, a celebration of a brand's long-standing connection with Japan through a unique cultural format promoting creative exchange. Moreover, collaborations such as the one with tennis player Coco Goff continue to engage new communities, extending the brand's relevance well beyond fashion. Numeo's lure continues to lie in its ability to evolve and expand its reach, attracting new audiences without ever compromising on its free-spirited identity. Moving now to a brief update on Versace. As you remember, we have discussed in more detail the strategy priorities during our call in March. Those objectives are confirmed and so is the action timeline. During the first six months of the year, the brand has performed in line with expectations as we set the basis for a gradual improvement of the quality of top line. Retail execution continues to be a key area of focus alongside the rationalization of the network with selected closures of non-strategic stores. Most importantly, the arrival of Peter Muller as new creative director marked the beginning of the brand's aesthetic repositioning. We welcome Peter's visionary talent and we wish him good luck with this exciting journey. In regards to our ESG target, over the past six months we have continued to make tangible progress across our key sustainable priorities. We advanced our transition to lower-impact raw materials, achieved ZDHC accelerator status in recognition of our commitment to responsible chemical management, strengthened the collaboration to accelerate supply chain decarbonization, and further embraced circularity through the latest Relylon collection. At the same time, we continue to invest in our people by advancing our D&I agenda and promoting gender equity, Expanding trade initiatives and launching a global no-violence awareness journey to foster a culture of respect. Finally, through See Beyond and our educational partnership, we expanded our positive impact by engaging students and children in environmental education, constantly promoting initiatives aimed at inspiring awareness and empowering future generations. I will now leave it to Andrea Bonini to walk you through the financial review section. Thank you.

Thank you, Lorenzo. The group reported net revenues in excess of 3 billion euros, up 16% versus H1-25 at constant effects. On an organic basis, revenues grew 5% year on year, with Q2 accelerating to plus 7%. This performance marks the 22nd consecutive quarter of organic growth at group level. Exchange rates had a negative impact of 490 points on revenues, and increase at current exchange rates is therefore plus 11%. Retail sales for the period totaled euro 2.6 billion euros up 3% organic versus H125 at constant effects against double digit comps of plus 10 last year. EBIT adjusted was steady year on year on an organic basis as greater marketing investments were offset by efficiencies and cost discipline in other areas including corporate, retail and industrial. Including Versace and EFX Impact, EBIT adjusted reached 530 million euros with a margin of 17.4%. Net cash flow improved year on year, even in reported terms, and we closed the semester with a net debt position of 693 million. Moving to slide 14, net revenues by channel, the group recorded net revenues of 3 billion euros in the first half of the year, up 16% at constant effects, plus 5% organic. At retail level, sales reached 2.63 billion euros, up 12% at constant effects, plus 3% organic, against plus 10 in H125. The second quarter saw an acceleration to plus 5 from plus 1 in Q1, despite the greater impact of the conflict in the Middle East. The region had a negative impact of approximately 1.5 percentage points on retail organic performance for the semester. Wholesale was up 40% over the semester, plus 20% organic, sustained by both independent wholesale and duty-free. You may remember H125 was impacted by some negative phasing effects on deliveries and year-on-year growth benefits of that this year, but our selective strategy remains unchanged. Trends were positive on royalties, up 73% at constant effects, plus 12% organic, supported by both eyewear and beauty. Retail sales by brand Prada reported retail sales up 3% in H1, strengthening to plus 6% in the second quarter, a very positive performance underpinned by like-for-like full-price sales. The improvement was broad-based across regions, with notable strength in Americas, Japan and APAC. Miu Miu remained highly desirable, continuing to show positive trends. Retail sales were up 3% in the semester, on plus 49% in H125, with Q2 performance in line with Q1. The Middle East had a negative impact of 3 percentage points on Miu Miu's performance in the six months, as the brand has higher than groups average exposure to the region. As for Versace, We are pleased with the performance which was in line with expectations with the brand contributing 219 million euros to retail sales in H126 Moving to the next slide, retail sales by geography Asia-Pacific continued to show strength growing at plus 15% at constant effects plus 6% organic Prada made further progress in Q2 supported by solid execution and positive trends across the region and Miu Miu's growth remained robust throughout the period. Performance in Europe was up 5%, down 4% organic, with Q2 showing signs of improvement supported by a recovery in both tourist spending and local demand. The Americas remained buoyant, up 37% constant effects, plus 17% organic, with Q2 accelerating on higher local demand. Both Prada and Miu Miu continue to benefit from strengthened organizations and investments. Positive performance in Japan, up 6% in H1, plus 2 organic, with Q2 showing improving trends supported by solid local consumption and increased traveler demand. Finally, the prolongment of the conflict continued to weigh on Middle East, with the region down 24% in the semester. Local demand remained relatively resilient over the period, improving quarter on quarter. Turning to next slide, underlying profitability was steady year on year, measured on organic basis. Efficiencies, cost discipline and operating leverage helped offsetting higher marketing investments, in part due to phasing. Factoring in Versace and FX, EBIT adjusted margin landed at 17.4% or 530 million euros. Of the roughly 500 basis points of dilution versus the organic EBIT adjusted margin two-thirds come from Versace and one-third from FX Moving to slide 18 CAPEX for the first half of 2026 was 226 million euros In retail we balanced capital allocation across new openings, renovations and relocations and we also progressed with the planned store closures Strengthening the industrial platform and advancing the digital transformation journey continue to be the other key area of focus. As a reminder, we expect CAPEX as a percentage of sales to start reducing from the current fiscal year. Moving to the next slide, net working capital reached 956 million euros including Versace and remained stable at 15% of net sales in organic terms, reflected continued effective working capital management. Lastly the group retains a solid balance sheet closing the semester with a net debt position of 693 million euros after a capex cash out of 247 million and dividend payments of circa 400 million. With that I will hand over to Andrea Guerra for his closing remarks.

Closing remarks. Our storyline for this year is very clear and I would say also simple and I will stress it again and I will try to describe a few things that we're doing and I really think that these are vital going forward so on one side top tier consumers drive the market and they're even stronger than before and I think that we have been delivering and we will continue to deliver and even this huge epicenter of Milan Galleria will help on this I think that we are ready to Thank you very much. When we talk about brands, credibility and desirability are the two mantras. I think that being credible in this world is half of the job, being desirable in this world is the other half of the job. The equation is clear, and I think that with our creativity, our creative directors, Thank you very much. that even if there is no obvious growth patterns in some areas of the world, there is still huge opportunities for us. This is what we're doing. I said it at the beginning. What are the objectives for Prada? What are the objectives for MiuMiu? And what are the objectives for Versace? And we will continue working around them. Grazie. We can now switch to your questions and comments.

Thank you. As a reminder to ask a question please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 1 again. Once again please press star 1 1 on your telephone and wait for your name to be announced. Please be aware that we will take and answer one question at a time before moving to the next question. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. Once again, please press star 1 1 to ask a question. We are now going to proceed with our first question. The questions come from the line of Lucas Oka from Bernstein. Please ask your question.

Yes, hello. My first question is about retail space productivity. You have developed Miu Miu very significantly in the past few years, but you also increased The Retail Network. Could you give us a sense of how the sales per square foot would compare across the three main brands that you have, Prada, Miu Miu and Versace?

Ciao. Hello. You're asking obviously a question that we will not answer. But I will give you some flavor around it. So I think Miu Miu is top of the industry considering the size and considering basically in five years the growth we had and at the end we basically enlarged the network by 10 stores. So I think it's top of the industry. As we all know, Prada had to recover. So we knew it, I think, has been one of the first topics we discussed four years ago. And if you look at Prada since 2021, 22, 23, 24, 25, 26, everything you have seen is basically, no, not basically, it's like for like. So, did we improve? Yes, we improved. Are we with the best? No, I think there is yet a journey to be done. On Versace, I wouldn't begin today the conversation. Next year, we can begin the conversation.

Of course. Grazie, Andrea. My second question is about Miu Miu. Some of your peers At some point, with smaller brands, at some point, very significant success, except they couldn't maintain it. This was on the back of the brand becoming very hot or a product becoming very popular or whatever. I could name names, but I would abstain from that. What safeguards and what actions are you planning in order to avoid that this sort of marked normalization turns into fading? What can you potentially field in order to maintain this level and continue to grow as you stated your ambition, the Miu Miu remit? Thank you very much.

So first of all I think there is a mathematical thing to be taken in consideration that is we have grown very significantly from a low baseline. So yes we have grown significantly. We have reached a significant level of revenue just shy of the 2 billion euros but we were starting from 450 five years ago. It means that those percentage growth were there. I think that one basic thing happened. We tried our best not to take shortcuts and to keep things as simple as we could. What do I mean by that? Six years ago, five years ago, we had, maybe I go wrong by some units, 155 stores and today we got 165 stores. So we didn't follow success and opened wherever people were offering whatever to open and we did not even increase significantly the square footage of our stores. We didn't enter new categories that were not really part of our core brand You know how many times people have been asking us to enter MEN, to enter licenses or to enter whatever you can think about. When you have success, the only thing you should be able to say is no to basically 90% of the proposals that are done to you. So this is what we are trying to do and Believe me, if you were asking me, let me include Middle East in the equation. Andrea, would you sign to be at plus five, plus six on Miu Miu in 2026 on a plus 40% of 2025? I would have signed. Understood.

Lastly, if I may ask another question, this has to do with pricing. We have seen a significant like-for-like price inflation in subselectory. And when we look at the growth, again, in the broader market, looking at your peers, we see that those that are resisting sort of adjusting their mix and coming to engage with the middle-class aspirational consumers other ones growing the least so I wonder you have shown remarkable ability to increase prices but at the same time we are facing a polarized market with the top spenders spending on the front foot and the aspirational consumers struggling what is your thinking and your actions or your plans about Maintaining the engagement of aspirational middle class consumers who are nevertheless 55% or so of the total market.

Let me put it this way. The biggest opportunity, we're talking about Prada now, the biggest opportunity we have is with top spenders. I mean, if you look to our price range, We have always been pretty shallow with our price range. We can discuss our entry price. I'm pretty comfortable in mid-2026 with most of our new entry prices in many different product categories from ready-to-wear to leather goods. And the real challenge we have, the real opportunity is to satisfy and the unbelievable demand from top spenders Prada has that somehow we have been in our history reluctant to satisfy. I think that we are proving ourselves that we can play in different segments. I don't want to talk about Hermes price points, okay? But I'm ready to talk about Thank you Andrea. Next question please.

We are now going to take our next question and the questions come from the line of Anne Lowe-Bismuth from HSBC. Please ask your question.

Yes, hi, I have two questions please. The first one is on the Prada brand so would it be possible to have an idea of what was the split of the growth between volume, price and mix and which category did perform best in Q2? and I assume the Q2 already reflects the good reception of the new on-bag line that has been launched recently. Thank you.

So you mixed a message I was giving, the new bag line was Miu Miu was not Prada.

Yes, you have a new on-bag line for the Prada one recently.

I mean... I was referring to Miu Miu, but obviously we have been launching new Prada lines on bags during this first semester, yes. So I would say we were slightly positive on volume and then it was more a mix effect rather than a price effect. In terms of categories, we were on all categories positive men and women on shoes we were very shy negative okay and my second question is regarding the marketing

So the marketing to sales ratio was a bit more elevated in H1. Can you remind me what was linked to and should we expect a marketing to sales ratio that is similar to last year for the full year? Thank you.

Hi Andrea Bonini, no change in marketing vis-à-vis what we said before in the sense that I mean we would expect it to be the incidence at the end of the year in line with last year or maybe slightly above that and so yes we in in the first half there was a bit of a phasing effect but no changes otherwise. Any other question? Okay, next question then, thank you.

We are now going to proceed with our next question. And the questions come from the line of Erwan Ambo from Goldman Sachs. Please ask your question.

Yeah, hi there. I hope you can hear me. I'd like to squeeze in three if I can. Erwan Ambo from Goldman Sachs. So first, on Versace, now that you run the brand, I don't know if you can share maybe some positive or negative surprises since you are took over the management of that and linked to Versace. I think, Andrea Bonini, you mentioned that dilution in the EBIT margin in H1 was about two-thirds of the 520 basis points, so about 350 basis points. Do you envisage the dilution from the integration to be in H2, please?

So, thank you. Your first part of the question is Lorenzo speaking.

So, negative surprise? No.

We find out what we were expecting during the period of the acquisition. I would say Positive, the people, the environment, everybody is super engaged, there is good energy, nice energy, especially from July when Peter joined the group, so there is a lot of excitement and positive energy, and so this is the positive. Rather than that, I would say no negative surprise, and that's it. Andrea.

Hi, Duat. Not significantly different for Fulia versus H1.

Okay, meaning 350 basis points of dilution possible?

Yeah, thereabouts. Okay, okay.

So thank you. So my second question is on, so it's obviously quite surprising to see the Prada brand growing at a faster pace than Miu Miu this quarter, but obviously we know what the base is, so it doesn't mean much, but Prada is going at a faster pace very clearly than the market, so I'm wondering What are you doing right and how can this market share gain momentum sustain?

So obviously the growth of Miu Miu has been very visible. It's now five years that Prada is growing above the market. So and again a repeat like for like. So I think it's... It's a question of positioning, it's a question of credibility and I think even a little bit of proactivity to the market with ideas, projects and things that can allow us to engage different segments of consumers. I mean, I think this is what we have been able to do so far. Obviously now we need to go forward, we need to keep it on and we need to continue to fight.

Okay, great. Thank you. And then maybe the last short question, and maybe I missed this, I'm sorry, during the presentation, but wholesale business underlying is growing 20%. Is there a one-off in there? And how do you think about sustainable growth in that channel?

I mentioned it because more than this year was last year with a bit of a negative one-off in the sense that it was phasing with some deliveries more delayed and therefore we benefit of that this year so growth year-on-year is higher but no changes in terms of underlying strategy and therefore also expectation year-end.

How much would you imagine the channel to grow on a full year basis?

You look at the past couple of years and the approach remains selective.

Okay, great. Thank you.

Thank you. Next question, please.

We are now going to proceed with the next question. And the questions come from the line of Oriana Cardani in Tesa San Paolo. Please ask your question.

Yes, good afternoon. Thank you for taking my two questions. The first one regards the Chinese cluster. Can you tell us the performance of this cluster in second quarter for Prada? And if there were any differences in trends between mainland China and greater China region? And in general, what is your opinion on the trading environment in China and your outlook for the second part of the year? Thank you.

Hi Andrea Bonini, I'll go beyond that in the sense that I'm sure that you know the question will come so in addition to Chinese I'll give you also some flavor around you know the other other nationalities so for for Chinese it was it was very positive the second the second quarter it was up double digit so it further improved versus Q1 and it was positive both in terms of you know local spending but also what they spent abroad having said that it's not easy I mean it's not without challenges in the sense that I mean we continue to see from a traffic point of view industry-wide at least I mean is what we pick up a challenging environment in terms of traffic so it's again it's it's a it's a challenge day in day out but the team did a great job and you know they managed to achieve a very good result Europeans is it was flattish in Q2 slightly improving North Americans is clearly you know the very positive note so very positive demand and and further accelerating quarter on quarter Domestic consumption and also it was flat for Japanese clients.

Understood. Thank you. And my second question is on the gross margin. Do you expect gross margin in the second part of the year to be similar to that of the first part?

Yes.

Okay, thank you very much.

Thank you. Next question, please.

We are now going to proceed with our next question. And the questions come from the line of Natasha Bonet from Morgan Stanley. Please ask your question.

Hi, good afternoon, and thank you for taking my questions. I have three, if that's all right. So the first, Andrea, regarding Miu Miu, which grew 3% in the first half. At the start of the year, you mentioned, you know, potentially growing double-digit for the full year. Do you think that's still feasible? And then also, you know, can you give us maybe the spacing contribution in H1 from Miu Miu? And then you also mentioned that, you know, the Q2 growth of plus three was a normalized level. Obviously, that includes the 300 basis point impact from the Middle East. Would you say that mid single digit growth is a good proxy for 2027 from Miu Miu as a normalized level?

you know if whatever they say then you will tell me that I said something so I think that Miu Miu has has an opportunity to grow between the five and the ten long term I've got no doubts about this look into this specific year I really thought that we would have seen an industry improvement during the year that we are not exactly seeing in terms of traffic. So we will continue to fight. We were at plus six in Q2. We were in plus three in Q1. So we have seen that kind of improvement that I was talking about. Obviously, going forward, we have a part of the world I would say that the plus six is with a like for like zero minus one.

Thank you. And then my second question would be on Prada, which obviously has seen an impressive reacceleration in the second quarter. Can you give us any more KPIs of what has really driven this reacceleration? I know you said full price sales are really strong. I mean, do you expect this to continue? And are there any regions where the brand is resonating particularly well?

I think I mean if we go back it's it's a long story I mean we knew that we had to catch up in United States we are catching up I think we are growing and we are really doing what we have to do and I think that that is yet a long journey in China for sure again we needed to go back to our fair share and I think that we are In Europe, most probably it's where we have grown the fastest in the last four or five years and this year in some cities we are not performing as we would love. I think the industry is not far away from what we have achieved and Japan remains one of our places of the world where Prada is loved and as soon as there is an opportunity with local clients we are taking it and we will always take it home.

Thank you. And then my last quick question would just be, it was hopeful if you could update us on the group's latest thoughts regarding potentially a dual listing with Milan.

Nothing to say. Nothing to add. Next question, please.

We are now going to proceed with our next question. And the questions come from the line of Daria Naschal-Tisciva from Bank of America. Please ask your question.

Hi, this is Daria from Bank of America, and thank you for taking my questions. I have three, if I can go one by one. For Versace, you have already closed 10 stores, if I'm correct, since the end of last year. How many stores are you planning to close, rationalize over the next 12 months? If you could provide any color on that.

Hi, I'm Lorenzo taking the question. Yes, there is a rationalization of the network. So we will have closure and openings. I think in the next year we'll see more downtrend around other tent. and also for looking for better location and also you know and you think from 2028 when there is more clearness on the market of Peter collection then we will look at again looking at the better location but let's say we will have another slightly smaller network next year and then from 2028 we will look at opportunities of better location.

Perfect. Thank you very much. And if I can ask on profitability, you have kindly helped us frame the effects impact on EBIT margin in the first half. Could you please provide any indication for the second half and respectively the full year? How are we thinking about effects?

Andrea Bonini, I'm not going to be specific because I think that FX has proven volatile and rather unpredictable considering also the evolution Thank you so much. And my last one, if I can try.

Could you please share any color on trading so far in July particularly for Prada brand and how should we be thinking about the second half revenue progression also considering a more challenging comparison base not just for yourself but for the industry as well if you could share some thoughts on the outlook thank you so first of all we have seen last week of June and a couple of weeks of July which were soft

and then we went back to a good rhythm so it looked like a little bit our January and it's very complicated I have to tell you to answer in a proper manner to your question I mean there are so many things happening so I do not know I mean as I said at the beginning of the year we have to prove That Prada can have a solid growth throughout quarters, throughout the years. So we are doing everything we can to achieve that. That's it. Let's see how the world goes. I mean, we all thought that what happened in Middle East and Iran was finished and then restarted all at once. Let's see what happens in October. Let's see what happens in Israel. It's very complicated. I don't want to make it too macro, but at the end, everything is influencing everything. The market which is less readable today is China. It's much dependent on events, on activities, on holidays, on moments of tourism. So that is the less readable market today. But as I said, it's the market where Prada has the biggest opportunity in market share gaining.

Thanks a lot.

Next question, please.

We are now going to proceed with our next question. And the questions come from the line of Chiara Battistini, JP Morgan. Please ask a question.

Thank you very much. Good afternoon, everyone. My first question, going back on the growth margin, please. I'm guessing that excluding the Versace consolidation growth margin might have been up. Am I right, first of all? And second, also considering the channel mix, I guess, was negative, given the strength of wholesale. Can you talk about the underlying drivers of the growth margin on an organic basis, please? Thank you.

Andrea Bonini, you're right slightly up excluding the impact of Versace. I'll say that from an underlying point of view, pretty much unchanged and various effects as you say compensating each other. But also, I mean, we talked before, you know, if I have one, you know, you mentioned wholesale, but if I have to make an example on the, you know, with the opposite side, I mean, we talked before about, you know, the performance of Prada being better in full price rather than in outlet and so there's various factors. But the underlying is pretty much unchanged. And then, you know, there are some accounting effects and others that helped a bit, but it's slightly up.

Great, thank you. The second question on South Korea, unless I missed it, I don't think you've commented on the performance there, so I was wondering if you could give us an update on your performance during the quarter, both with locals and with tourists, please.

Very positive. Again, another bright note in terms of performance and split I can tell you local better and stronger and traveler slightly subdued.

Okay, thank you. And finally, maybe anything you can share on your next projects on stores for Prada and Miu Miu in H2 and possibly any glimpse into next year, please. Thank you. Store openings.

I think that we have a huge milestone coming for Prada, which is September, where we are opening this multi-floor, cultural, artistic, fashion, art, retail, food experience. over six or seven floors in Galleria in Milano mid-September and I think that this will become the epicenter of the epicenters this will become the place where to host all our friends of the world all our clients of the world and to allow anyone to really enter Thank you very much. The biggest, largest, huge milestone we have.

That's great. Thank you.

Next question, please.

We will now take our next question. And the questions come from the line of Thomas Chauvet from City. Please ask your question.

Good afternoon, thank you. I have three, please. The first one on the Prada brand, Andrea, you said China was the most difficult market to apprehend. You kindly provided, Andrea Bonini, the performance by nationality, the biggest growth improvement. sequentially came from the Chinese cohort. So can you explain perhaps what is happening for the Prada brand in China with the Chinese consumer? Why is it resonating so well now in a very difficult market?

I'll say it again. I think in the most humble manner we're doing our homework. I mean We are underrepresented in China and the team is doing an unbelievable job. I think that we are managing our stores differently. We are managing our relationship with our clients differently. We are today attracting new clients to the brand. Rongzai, our Chinese epicenter is working 360 degrees from the Art Foundation to our marvelous cafe Michang to our apartment for our top clients so we are offering a 360 degrees experience to our clients but it's a tough environment it's a very tough environment I have to tell you

Thank you, Andrea. Secondly, on the Middle East, which deteriorated a little bit quarter on quarter, can you perhaps comment on what you saw in June and July in the region, particularly with locals?

It deteriorated because it's the impact of having three months of impact rather than one month in Q1 but in terms of underlying trends it was actually improving and so at some point we were seeing local demand Patrizio Bertelli

So you're close to flat in June or July?

It was at some point. I mean, we've had weeks where it was close and then, you know, some other weeks where we're still seeing a negative number, you know, but it was more in the, you know, call it minus 10, minus 20 rather than minus 40, minus 50 as, you know, at the beginning of the conflict.

Thank you. And just finally on Versace, just trying to get a bit more color on the numbers. Thanks for the disclosure already. But could you comment perhaps on the Versace performance in H1, particularly in retail? and then are you still comfortable with an EBIT loss for the year I think you had said in line with last year at around 80-90 million if my calculation is correct I think the loss was 90 million already in the first half were there any restructuring charges in H1 or maybe they'll be in H2 beyond the impact of the 10 store closures that you did

So on I'll start from this last point and no we're very far from the minus 90 so I you know happy on the back of this call I mean with the team of course I mean they can help you sort of you know figure it out where the misunderstanding is but you know is is way less than half than that in in in the first half therefore yes it's very much in line with our expectation as we said at the beginning of the year to keep it in the two digits on EBIT and look on top line it was also in line with our expectations and so if you remember that we provided also some you know indication of what the contraction because we do expect a contraction on top line at the end of the year might be and it is tracking in that way I would leave it at that One point, sorry, and I want to clarify because I may have misunderstood Chiara's question earlier because when I answered about the split of local traveller it was with reference to the nationality because I was following up on my previous answer if the question was related to Korea and not Koreans Clearly, you know, local are positive, but traveler spending in Korea is also and way much stronger than local. Hopefully that clarifies if there was a misunderstanding.

Tomas, sorry back to you if you've got anything else. Thank you. No, thanks Andrea. I'll follow up with the team because You said the EBIT margin for the first half was in line with last year, excluding Versace. So if you strip out the sales of Versace and you keep whatever 22.5% EBIT margin, you get an implied loss for Versace of about 90 million. So I must have missed something. but about what you define as organic EBIT margin but I'll go offline.

Okay fine maybe it's effects related because as I said I mean there's two components and so but as you say I mean I think probably makes sense to follow up later. Thank you. Thank you. Next question please.

We are now going to proceed with our next question and the questions come from the line of Charles Louise Scotti from Kepler Chivalry. Please ask your question.

Good afternoon, thank you for taking my questions. Just a follow-up question on Versace. Could you please explain why the brand is weighing so heavily on the working capital? And do you see meaningful scope to improve Versace working capital over time? And thank you for the clarification on the loss at Versace in H1. Could you give us also an indication on the potential free cash flow burn also of the brand in the first half and the expected burn on a full year basis?

What I would say is that let's start with this because also I think it will help addressing two points with one answer but the reality is We don't actually see weighting that much in terms of cash flow absorption from Working capital and from CapEx as well from Versace was very limited. Therefore, cash flow is not too far away from EBIT, what I can say. And indeed, I mean, for what is the rest? I mean, if you look at the organic working capital is also stable.

Okay, thank you. I have a follow-up question on Versace. Could you please also give us an indication of the timeline for Peter Muller's first fashion shows and the expected cadence for the arrival of his collection in stores? And more broadly, how many seasons or collections do you think it will take before the product assortment is fully refreshed under this new creative direction? This will help us better model the potential timing for the top line inflection.

So the first collection of Peter will be La Vacanza, so it will be launched in May next year. So to have just this collection in all the stores, end of second half, 28, but I would say every store is 28.

Okay, thank you. And just one final question, if I may. More financial question rather than operational. When I look at Prada Group, you continue to deliver best-in-class growth and profitability, and yet the stock trades at one of the lowest valuation multiples in the sector. Does this disconnect make you consider launching a share buyback, for example, or Another significant capital allocation initiative that could unlock some shareholder value, particularly given that balance sheet remains very strong even after the Versace acquisition.

What I would say is, you know, answer a similar question before on that vein and, you know, if we had something to announce or to disclose, I mean, we would do it, but at the moment there is nothing to disclose. Okay, I understand. Thank you. Last question, please.

Yes, we are now going to proceed with one last question. And the questions come from the line of Chris Gao from CLSA. Please go ahead.

Hi, management. Thanks for taking my question. I have two quick follow-ups. The first one is about the performance by cluster for Miu Miu brand. You talk about the performance by cluster of product whole brand, and we are very happy to see you've been getting very strong growth among Chinese cluster. I want to understand for Miu Miu by cluster, do you see any difference versus what you see from product whole brand trends, like Chinese, Americans, Europeans? So anything to highlight here?

Hi, Chris, Andrea, Bonini. Plus and minuses compared to Prada because also bear in mind that they reflect different journeys in the past years and different also presence in the different geographies, different contribution from the different geographies already. What I would say and sort of point out is we've seen weaker trends with Chinese and Europeans. Stronger Trends with Japanese, and I'll leave it at that.

Thank you very much. This is very helpful. My second question is also regarding your store-level investments. So we're happy to see the very strong China-Chinese growth, and we understand that during our channel chat we see both your same-store sales in China and your enlarged and renovated store performance are also very good. So basically we believe what you do in your store investment has been helped a lot regarding the acceleration for product whole brand. So basically I just want to understand in the mid-term, could you please provide us some more color regarding how many more renovations or enlargement projects as a percentile of your total stores are in your plan because we do see it's helping the brand's performance. Thank you.

You know, I think this is a trend that we are having since some time and I would consider nothing changes in the mid-term. Most probably we will cut some stores in China in the next couple of years in being second or third stores in some and I don't think that those second or third store are valuable anymore so most probably we will continue to innovate in some cases enlarging to host proper apartments but on the other side most probably we're going to cut two or three stores a year for the next two or three years I understand, thank you very much

So this concludes the question and answer session. I'll now hand back to you for closing remarks.

Thank you. Thank you to all of you and hope to see you soon. Grazie.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.