Puig Brands, S.A.

Good evening, and thank you for joining us this evening as we discuss our sales update for the full year and fourth quarter that ended on December 31st, 2024. Today, we have with us our Chairman and CEO, Mark Butch, and our CFO, Joan Albiol. Mark will share some brief remarks, and then we will open up the line for Q&A. You will find this presentation and the press release on our website, and you will be able to access a replay of this recording shortly, also on our website. As a reminder, this is a sales update only and Putsch will report the full year 2024 financial update and outlook on February 27th after the market closes.

Good evening, everyone. Before we dive into the sales update, 2024 was a historic year for Putsch in which we celebrated our 110th anniversary and became a publicly listed company. Once again, we delivered record sales, driven by the exceptional performance of our Cork fragrance business and our Cork geographies, EMEA and the Americas. We also continued developing our makeup and skincare segments, achieving meaningful milestones, such as the acquisition of Dr. Barber's term and the extension of our partnership agreement with Charlotte Tilbury till 2031. The desirability of our brands and the strength of our geographic footprint have enabled us to outperform the premium beauty market as well as our mid-term revenue growth guidance. With that, let's turn to the details of the update. We have delivered a strong performance for the full year 24, driven by exceptional growth in our fragrance and fashion business, which has resulted in record net revenue of 4.8 billion euros. This represents double-digit growth, plus 10.9% like-for-like growth, and 11.3% increase on a reported basis, ahead of our high single-digit like-for-like growth, medium-term revenue guidance provided at IPO, and well ahead of the premium beauty market. This was due to a further acceleration in Q4 versus the prior nine months with 14.1% like-for-like growth in net revenue and 14.3% on a reported basis. In our fourth quarter, putsch delivered record sales of 1.36 billion euros. In light of this strong performance, we are confident that our results for the full year 24 will be in line with our overall midterm guidance. We will share details of the full year results on the 27th of February and address our mid-term guidance then. Turning to the drivers of this performance. The 4.8 billion euro of net revenues were a result of 10.9% like-for-like growth, 1.2% from the acquisition of Dr. Barbara Stern, and a negative 0.8% impact from foreign exchange. The key driver was the exceptional performance from our core business, frequency and fashion, in both EMEA and the Americas. With our digit growth in this segment, we continued gaining market share in our core business. Our like-for-like growth benefited from a positive impact of 1.1% due to the hyperinflation adjustment of the Argentine peso as anticipated. In 2023 we had a negative impact, whereas in 2024 we had a positive impact, which has therefore resulted in a favorable comparison. The strong growth in fragrance was partially offset by the low single-digit percentage negative performance for the year in the make-up category. This was a result of specific sell-in-sell-out dynamics, which slowed the segment over the course of the year, and the voluntary withdrawal of the airbrush, flawless setting spray, as we have previously disclosed. Further, we saw incremental organic growth from our skincare segment, in addition to the contribution from Dr. Barberstone. If we have a look at the evolution of growth of this year, we saw a clear acceleration in Q4 versus the first three quarters of 2024. This last quarter, we delivered 14.1% like-for-like growth. The change of perimeter contributed an additional 1% increase, partially offset by a negative foreign exchange impact of minus 0.9%, resulted in reported growth of 14.3%. The hyperinflation adjustment due to Argentina resulted in 4% favorable uplift to the like-for-like growth for the quarter. Let me share some more color on the performance of each of our business segments. The fragrance and fashion segment continued its strong momentum in the fourth quarter with revenues up plus 21%, driven by EMEA and the Americas. Excluding the impact of the hyperinflation adjustment due to Argentina, growth for this segment was 15.3%. Prestige continued to drive double-digit growth. This was complemented by double-digit growth across all of the niche fragrance brands as well. We're pleased to see the successful acceleration of Vairedo, which further led growth within niche. For the full year 2024, fragrance and fashion, which remains our largest business segment, generated net revenue of 3,538,000,000, representing 73% of putsch net revenue. This is an increase of plus 13.6% on a reported and constant perimeter basis versus 2023. Among the 24 highlights, Jean-Paul Gaultier, Puig's fastest growing brand, completed an outstanding year. In 2024, it entered the top 10 fragrance line rankings for the first time in its history, while it is estimated that Le Male has become the number three masculine fragrance line worldwide. Good Girl Carolina Herrera had a consistently strong performance throughout the year, and we see that it has maintained its status as the second feminine fragrance line worldwide. And we are delighted to see that Good Girl, for the first time, has achieved the significant milestone of becoming the number one feminine fragrance line in the US. Niche brands continue to show compelling growth, with particularly strong performances from Penhaligon's L'Artisan Parfumeur and Dries Van Noten, which showed double-digit growth over the course of the year. Our fashion business, which remains a lighthouse of creativity for our brands, continues to perform well, while still representing less than 5% of net revenues for 2024. For the fourth year, 2024, the make-up segment represented 16% of putsch net revenue in the period and recorded net revenue of 763 million euros. This is a decrease of minus 1.3% on a reported and constant perimeter basis against 2023. Our largest contributor to make-up, Charlo Tilbury, posted a flat performance in the segment versus 23. This was the result of several factors, including a tougher comparison with a strong performance, further impacted by specific selling and sell-out dynamics, But in spite of softer net revenue growth, Charo Tilbury maintained its number one ranking in the UK and achieved a number three ranking among makeup brands for the full year in the US, having gained two positions versus 2023. The brand continued to drive innovation in the category with successful launches such as the Unreal Skin Foundation Stick. The segment was also impacted in 2024 by a quicker performance across some of our smaller makeup offerings. In Q4, makeup revenues fell by 7.2%, affected by the voluntary withdrawal of select batches of Child Delivery Airbrush Flawless Sighting Spray in December. This had a mid-single-digit percentage negative impact. Importantly, the situation has been managed and Charlotte Tilbury have begun reshipping the product to retailers. As anticipated, the segment was also affected by the selling pipeline related to the entry of Charlotte Tilbury into Ulta at the end of 2023. In December, Butch also announced the extension of his partnership with Charlotte Tilbury. While makeup performance this year has been muted, we remain excited by the prospects for the Charlotte & Louis brand for the long term. Together with Charlotte, we are committed to continue growing this beauty brand. It has been nearly five years since the beginning of our partnership, and we have created significant progress together, including growing the brand to over three times its size at the beginning of our partnership. We have now extended our strategic agreement until the end of 2030, She will continue playing an active role in driving the brand's long-term success and will retain a minority stake. Putsch will progressively assume full ownership until the beginning of 2031. For the full year 24, the skincare segment delivered 516 million euros in net revenue, representing 11% of Putsch's net revenue. This represents an increase of plus 19.8% on a reported basis and plus 7.4% at constant perimeter against the same period of 2023. In particular, dermocosmetics continue to perform strongly, with URIASH delivering double-digit organic growth supplemented by successful launches and hero franchise accelerations. Putsch continued its expansion and diversification in the segment with the incorporation of Dr. Barbara's term, which reinforces Putsch's ultra-premium skincare offerings. In Q4, skincare showed plus 11.7% sales growth on a reported basis and plus 2.1% at constant perimeter compared to the same period in 2023. As anticipated, the skincare segment faced a tougher comparative base primarily due to the impact of the pipelining of Charlotte Tilbury into Ulta and meaningful launches in H2 2023 such as Charlotte Tilbury Magic Water Cream. In 2024, the EMEA region achieved net revenue of 2.2 billion 620 million, up 12.8% reported, and plus 11.6% at constant perimeter compared to 23. This remains Puig's largest region, representing 55% of our net revenue in the full year. This performance was driven by strength across all business segments. EMEA also represented putsch largest region in the fourth quarter, up 13.1% on a reported basis and plus 12.4% at constant perimeter. The Americas achieved 1,750,000,000 in net revenue for the full year 2024, up 11.1% reported and up plus 9.5% at constant perimeter compared to the same period in 2023. The region represented 36% of which net revenue in the period. The Americas also delivered a standout performance in Q4 with plus 18.1% reported growth and plus 16.1% growth at constant perimeter, fueled by a continued strong momentum in fragrances. As anticipated, we saw two impacts in this region with opposite effects. Reported growth in Q4 benefited significantly from a positive impact of 13.3% due to the hyperinflation adjustment of the Argentine peso, As anticipated, this provided a favorable comparison versus 2023, wherein the impact was negative. This was offset by the tougher comparable due to the pipelining of child delivery into ALTA in Q4 2023. In APAC, put smallest region in terms of revenue contribution, representing 10% of net revenue in 2024, sales increased by plus 3%, plus 3.7% for the year amid continued market challenges. In Q4, APAC posted strong overall performance with plus 10.2% reported and constant perimeter growth versus 2023. While China remains subdued, Pudge benefited from the newly created subsidiaries in Korea, Japan, and India. Closing remarks. We manage a diversified and curated portfolio of brands, and our first priority is to continue maintaining their desirability for their long-term success. We continue to feel encouraged by our consolidated performance across our complementary brands and segments, which balance different and evolving market dynamics. Overall, our business has delivered an excellent performance in 2024, led by our performance in our core business with good momentum through the holiday period. Based on our preliminary estimations, the Christmas campaigns allowed for the overall market was healthy, although it represents some moderation in growth versus the rest of 2024. Our brands showed strength through this period with their outperformance. While this year we have had some challenges in makeup, We have also had an outstanding performance in fragrance and we have seen good growth in skincare. This has allowed us to deliver on our promises and we remain very confident in our ability to deliver for fiscal year 2024 in line with our midterm guidance.

Thanks, Marc. With that, we come to the end of our prepared remarks and we will begin Q&A.

The next question comes from Celine from JPM. Please go ahead.

Thank you very much. Good evening, Mark. Good evening, everyone. So my first question is on growth acceleration in fragrances. If you could give us a bit of a flavor of where was that coming from. You also mentioned, Marc, that growth moderated during Christmas. Is it possible to have an understanding of what is your estimate of market growth maybe in the fourth quarter versus the rest of the year? And what does that mean in terms of potential weakness or return in the first quarter of 2025? That's my first question. My second question will be on Charlotte Makeup, clearly you mentioned the issues that were faced in the fourth quarter. Can you talk about the sellout data for Charlotte Tilbury in the U.S. and in Europe, if you have it? And are we now past all those issues of selling sellout from Q1 of 2025? Thank you.

Thank you, Celine. In terms of, you mentioned group acceleration. It's true that when you see the evolution of the different quarters, we have seen versus the second, third, and fourth quarter an acceleration. We believe that it's a result of some of the good performance of some of our brands. When we've seen Good Girl, for instance, in the U.S. becoming number one feminine fragrance line for the first time ever in our history that you know and being Christmas the most important time of the year it has helped us accelerate sales for the quarter you also mentioned whether any expectations for first return given stock levels in the retailers in the channel our our projection at this point is that we have adequate stock levels and so we shouldn't see surprises in that sense. And regarding makeup, During the third quarter call, we did mention that our scenario was that by the end of the year, we would have better gap. We had closed the gap between selling and sell-out so that the stock levels would be in line, except maybe in some markets in Asia, but they were not as material. And the only thing that has happened is given the challenges we have had with setting a spray, we may have a little delay in closing this gap. So that's our expectation at this point. I hope I answered your questions.

Can I just ask a follow-up? Yeah, I just want to clarify, is it possible to have an understanding when you mention a bit of a slowdown in Christmas, what it means for the market? And am I right to understand that Putsch has really driven more market share gain during that period?

Yeah, well, look at that. Our sense is that we don't have yet the final numbers for the Christmas season. But our understanding at this point is that The market has, you know, it continues to be strong and healthy. But if anything, there has been a deceleration on the growth rate during the year. And, you know, given that in our case seems to have gone the other way around, we probably have gained market share and when we have a better understanding you know probably in the next weeks hopefully during the end of February when we present the results for the year we'll be able to give a little bit more clarity in what's our position there excellent thank you very much thank you

The next question comes from Jose Rito from CaixaBank. Please go ahead. The next question comes from Dan Ping Liu from Citi. Please go ahead.

Hi. Thanks for the presentation and thank you for taking my question. My first one is a quick follow-up on the inventory level. Mark, I think you mentioned that you see adequate stock level with retailers at this moment. My question is, do you see a potential de-stocking in the first half of 2025 if, let's say, the sale of the fragrances during Christmas wasn't as fast as we would expect? And also, related to that, have you seen, how are the performance of the new launches in Raban and I think Nina Ricci that launched in quarter three, have you seen much repeat purchase during Christmas or in January post the holiday season? So that's my first question. My second question just, A quick clarification on the Charlotte Tilbury spray product withdrawal. Is it right from the prepared remark, Mark, that you mentioned that shipping has been back to normal? Sorry, I think I didn't fully capture your remark there. So basically, just could you give us an update on the progress of this withdrawal and the potential headwind we will see in the first half of 2025? If I can add one more question on the America's performance. So if we remove the hyperinflation benefit, we see a 3% constant parameter growth in America. And I think you mentioned in the press release, U.S. was really strong. Could you comment on LATAM? I don't know whether you guys quantified the LATAM. the headwind so just give us a little bit flavor in terms of apart from us how the rest of the markets in america perform in quarter full thank you so much thank you i'll try to respond to all the questions

First one, inventory level in the stores. As we said, when we said adequate inventory level, it's because we believe that the sell-out was in line with the expectations and that we have ended the campaign with the appropriate, adequate stock level, so there shouldn't be any impact on the first half due to that. That's our best read at this point. When we mention the new launches for Rabanne and Ninarichi, they have performed according to plan. And we don't see normally, it takes a few months for usage of a fragrance before you start seeing repeat business. So at this point, we cannot, we have not seen, according to plan, that's how we can best assess the evolution of these two launches. Regarding the setting spray withdrawal at Charlotte Tilbury, yes, we have started to ship normally, which means because the challenges we had, now we know that the products we ship do not have that problem anymore. The only comment is that in some cases when in some of the US retailers or you go to Oceania, because it takes some time for the product to reach the point of sale, we may have some weeks of empty shelves before those products reach the point of sale, which is not the case in Europe, and it's not the case closer to where we start shipping. In that sense, overall, the shipping is back to normal. There may be some delays on filling all the point of sale that have been left without product. And regarding Americas and Latin America, we have seen more commercial competition and aggressiveness than we had expected. We have a very high penetration of our market share is the highest that we have in the world. And the business has been not as strong in terms of growth than we've seen in the US. But overall, we continue having a very strong position in that territory. I hope I answered the different questions. Thank you.

Yes, that's helpful. Thank you.

The next question comes from Molly Wilenzek from Jefferies. Please go ahead.

Good evening, everyone. Thanks for taking the question. Can I follow up on the Americas question with the 3% underlying growth, but more from a category perspective? So, you know, we understand that makeup and skincare were impacted by the Ulta launch or pipeline sale last year. sort of underlying fragrances, growth, if you can give us any sort of color, mid-single digit, high-single digit, something like that would be really helpful. Thank you.

Yeah, as you know, thank you, Molly. If I understand well, you know, it's true that given the, in the Americas, given the impact that we mentioned we were expecting to have because of the comparison of this, of the Alta launched in 2023, both makeup and skincare growth has been, impacted, which means that most of the growth comes from the fragrance category, which clearly we have had a very strong season. Yes.

The next question comes from Jeff Stent from BNP Paribas Exane. Please go ahead.

Good evening, and I appreciate this question may be a little bit premature because, you know, you still have limited data, but you commented on the fragrance category slowing down somewhat over Christmas. And I just wondered if you could shed any color on why you think that may be the case, you know, what may be changing. Thank you.

Well, we don't have yet, Jeff, we don't have yet the full disclosure of and granularity of the evolution of the sales during Christmas. Clearly, I have seen or we have seen some reports from some of our peers. We still don't have the full picture. And it seems that the growth rate that we have been seeing since COVID is... somehow slowing down still in very healthy and attractive rates but maybe it seems to be slowing down a little bit now so it's in terms of you know relative growth may be slowing you know but when you see our evolution we have seem to follow the contrary because if anything we have been accelerating during the year. So that's why we have some contradictory information, but our best guess at this point, without having the hard numbers yet, is that the growth rate may have been slowly diminishing over the year.

Okay, thank you.

Thank you.

The next question comes from Mariano Schachtman from Santander. Please go ahead.

Yes, good evening and congratulations on the results. My first question, could you please share more color on Jean-Paul Gaultier? I'm particularly interested in the strategy behind the success, if you could share it with marketing efforts, its innovation. And then what is the prospect for this brand, given I believe it may be less than half the size of Rabanne or Herrera? And my second question is on the skincare performance. Other than the Ulta and Charlotte Tilbury one-off effects, are you seeing any softening in demand in this category or in any particular brand? Thank you very much.

Yeah, thank you, Mariano. You know, the evolution of Jean-Paul Gaultier is quite interesting because most of the, you know, this brand has what we call pillars, two pillars, Le Mal Classic, which were lines launched in 93 and 95, if I'm not mistaken. And it is the ability, we believe, that reinforce the image of this brand, of the values that this brand has been embracing since it was launched you know in the 80s is what has been captured by the imagination of the young people so it's it's it's how we have been able to translate this idea of all shapes all sizes all you know all all sexes um that has been embraced by particularly the youth and it's a brand you know in our case we're very proud of our ability to keep the desirability of our brands and to keep innovating and in a way that there is always one brand or one product or one that really stands out. And we think that we are good at this because since for the last 20 years, we have been able to capture market share consistently. Our best estimation back 20 years ago is that we had 3% market share now in frequencies, in prestige frequencies. And now we have... more than 11%. But if you look at our trajectory, it has been a consistent ability to capture market share in a category that is very volatile and can be difficult to predict for one brand or one line. But when you look at the way we do things, I believe we are good at disrupting, innovating, and the results of evolution of Jean-Paul Gaultier this last year is a proof of that. Okay. Second question regarding skincare, our most important presence in skincare is through Derma. Besides Barbara Storm, which this year we had a transition year, we already said when we bought the brand that there were some distribution that we felt the brand had expanded that might or should have not expanded. So if anything, this year we have been Reducing distribution and so the evolution of the sales are below the last year by design let's say. In terms of Derma it continues to perform a double digit growth and that's what we said in our statement. So it's consistent day in day out business that is very in our case predictable let's say.

Great, thank you.

Thank you.

The next question comes from David Damaya from CIC. Please go ahead.

Hi, good evening. I have a follow-up question on Gucci. Sorry, I missed your answer. So obviously it was 2024, an outstanding year for for the brand. But have you raised your ambitions for this brand, which seems to, as you said, have created a kind of very special connection with the Gen Z consumers, notably thanks to a strong presence in social media? So do you think now Gautier can also become a billionaire brand in the medium term?

Thank you, David. There are some questions that are easier to answer than others. Evidently, we believe that Jean-Paul Gaultier has done many things to make this brand attractive for the Gen Y, and particularly the new entrants in the fragrance category, which is the young male consumer. And the question is, is this social media frenzy that we have been able to create continue in the future? Will it stabilize or will it have a negative effect? And the truth is we don't know. We believe that we have the right ingredients for this brand to continue growing and you know it has entered the top 10 for the first time. Now we have three brands in the top 10. Gotier being the smallest of the three but still the fastest growing. So our expectation is that will continue growing but there is more uncertainty with this type of evolution that what we can have with others. I hope that answered your questions. And I know that this, yeah, it's more. Yeah. Oh, sorry. Go ahead.

The next question comes from Joffrey Bella-Chameller from BAFA Securities. Please go ahead.

Yes, good evening Marc and thank you very much for taking my question. I was wondering firstly if you have an explanation as to why your fragrance growth is accelerating through 2024 when you seem to be saying that the market is somewhat slowing down is my first question. Is it like linked to maybe increased marketing spend through the second half of the year? And then the second question is around pricing. Can you remind us how much pricing you took in the fragrance category in 2024? And if you have any views as to what pricing you might take in 2025? Thank you very much.

Yeah, thank you, Geoffrey. Maybe the second question will be... quicker to answer. Pricing on average for the 2024 was about 4% increase. And going forward, we believe that, you know, there were some pressures since COVID because of the increase in materials and ingredients that force all of us to translate that into pricing. But we believe now that's, you know, going forward will be in line with inflation. There's no surprises in that regard. Why have we grown faster? Remember when we presented the first half results, there were some questions because it seemed in the way the marketing span had been divided in the first half versus the second half. our first half expenses in percentage terms was higher than the overall year. The answer is we have not spent more in the second half than what we had planned to do. The reason why we have grown or seems to have grown more than others, evidently is probably that we have gained market share. At the end of the day, As I said before, we have a history of being able to capture market share. I do believe it's because of the way we have been able to disrupt, to innovate, to surprise the consumers with what we do. the projecting the fragrance you know the success of a fragrance launch or it's not easy because it's a very it's like a little bit like I always compare it with a movie industry you know it's not easily predictable but because we have a portfolio of brands we have a sufficient critical mass we are able to compensate and you know some some flops let's say or some successes and failures in a way that as a whole we believe that we have a way of doing that there's no reason for us to believe that we cannot continue any market share and 2024 seems to have not been happy not difference

hope that answers your question thanks mark and sorry we haven't yeah it does um we'll have time for them maybe okay uh uh yeah just quickly is it possible to to carve out what would be the drivers of your uh out performance if the market continues to slow down uh in 2025 do you have any fragrance launches that you want to flag that can help you gain further market share well we have a you know

we have a pipeline of innovations and the way we work, we always have more innovations than what we believe the market can or the organization can digest. So we do that in case some of the innovations do not perform as well as we thought, et cetera, et cetera. At this point, what we have in the pipeline for 2025 is we feel very comfortable with and probably in order to be more specific maybe by the end of February when we present the results for the year we can be a little bit more specific on our view for that year, for 2025. David, I thought I answered your question. And I think we have time for one last question. That's what they tell me.

The next question comes from Fernando Abril Martorell from Elantra. Please go ahead.

Thank you very much for the presentation. Just one quick question. It's about the issue you had with the setting spray. So I don't know if you have experienced in the past similar issues with other products or was this an isolated incident? Thank you.

Yeah Fernando no the answer is no we have not had issues like this in the past and we believe this is an isolated case that has been resolved now so yeah. Okay, thank you very much. Thank you.

That was our last question. Thank you all for your questions today. We look forward to speaking again when we present our full 2024 results on February 27th. Thank you very much.