Puig Brands, S.A.

Good evening and thank you for joining us this evening as we discuss our sales update for the first quarter of the fiscal year that ended on March 31st, 2025. 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 also be able to access a replay of this recording also on our website after the event.

Good evening, everyone. It is good to speak to you all at the first call for the fiscal year 2025. We are pleased to report that we have delivered record Q1 sales and a strong start to the year. Let's turn to the details of the update. We have delivered a strong performance for the first quarter of 2025, which has resulted in record net revenue of €1.2 billion. This represents 7.5% like-for-like growth and a 7.5% increase on a reported basis, in line with our 2025 outlook and well ahead of the premium beauty market. This was due to outperformance in our largest segment, fragrance and fashion, supported by a strong and consistent performance in skincare. From a geographical standpoint, the business grew in all regions. We had a mildly positive impact of 0.3% due to foreign exchange, largely due to the US dollar at the beginning of 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 performance in the first quarter. with revenues of up plus 10.4%, both on a like-for-like and reported basis, reaching 896 million euros in sales. This is our largest segment, representing 74% of our total sales. This growth was led by a very strong performance in the Americas, with the US growing double-digit. We continue to drive growth at scale with particularly strong performances across our three largest prestige fragrance brands, Rabanne, Carolina Herrera, and Jean Paul Gaultier. This was complemented by strong growth across our niche fragrances brands as well, where it is worth highlighting the performance of Vairedo in particular. Our brands continue to build upon their success through existing lines as well as newness. In fashion, Dries Van Noten started a new chapter with the widely acclaimed first collection of Julian Klausner as creative director, which was presented in March. In Q1 2025, the make-up segment represented 14% of putsch net revenues in the period and recorded net revenue of €165 million. This is a decrease of 4.2% on a reported basis, 6% on a like-for-like basis versus Q1 2024. We continue to see softness in premium makeup, which is impacting overall sales. During Q2, our largest brand in the segment, Jalo Tilbury, is entering Mexico, marking the entry of the brand into the large Latam market. We are excited by the prospects of the brand with our consumers in this region. In Q1 2025, the skincare segment delivered 144 million euros in net revenue. This represents 12% of putsch total net revenue, an increase of plus 7.8% on a reported basis, and plus 7.2% like for like growth. DERBO COSMETICS continued its steady performance with URIASH, the largest brand in this segment, continuing to lead growth through its core franchises and newer lodges. From a geographical standpoint, in Q1 2025, the EMEA region achieved net revenue of €644 million, up 4.3% reported and 3.8% on a like-for-like basis. This remains our largest region, representing 53% of net revenue during this quarter. Fragrance and skincare were the main drivers for this performance. This region saw slower growth in Q1 when compared to Q4 of 2024 following a healthy holiday period. We still see strength in some of our core European markets, however, we saw not worth the slowdown in markets such as France. We continue to invest in this region and recently opened a new subsidiary in Sweden on the 1st of April 2025. The Americas achieved €451 million in net revenue for Q1 2025, representing 37% of putsch net revenue in the period. This implies double-digit growth of 11.5% in reported terms and 11.8% like-for-like, performance driven by the strength of our prestige frequencies across both North America and Latin America. We will be building upon our presence in the Latin region further with the introduction of Charles Tilbury. In Q1, APAC, which represented 9% of net revenues with €111 million in sales, posted strong overall performance with plus 14.5% reported and 13.2% like-for-like growth versus Q1 of 2024. This was fueled by strong performances in South Korea and Japan, where we continue to see the benefits of the subsidiaries that were opened over 2023 and 2024. We also continue to build upon our strategic initiative with our niche brands in the region, particularly Baerido. A noteworthy example was the opening of a Baerido flagship store in Japan in March. Putsch is the home of creativity and Q1 saw some exciting innovation from our brands. Across our prestige portfolio, we launched range extensions such as the Elixir version of Very Good Girl, Le Male Absolue, and Phantom. We continued with our collections-based approach in niche with the launch of Blanche Absolue, offering consumers even greater sophistication aligned with a well-loved line. We recently opened the Charlotte Tilbury Beauty Wonderland in Covent Garden, which offers two immersive floors to discover the full experience of the brand, including the first-ever skin spa. In skincare, we continue our steady innovation with the launch of the Uriage Rosaline Anti-Redness and Anti-Aging Serum, which is suitable for sensitive skin. We continue to innovate and create across our brands, and there is much more to come over the rest of the year, particularly in the second half. We are encouraged by the early positive feedback from the trade for our upcoming launches. We continue to feel encouraged by our consolidated performance across our complementary brands and segments, which balance different and evolving market dynamics. In spite of the uncertainties, we maintain our 2025 outlook of like-for-like revenue growth in the 6% to 8% range. Further, we maintain our expectation for adjusted EBITDA margin improvement in line with that of 2024. This outlook factors in the impact of US tariffs at currently expected levels. In uncertain times like the one we are living in, we benefit from participating in a resilient industry with a large and diversified brand portfolio. Our P&L has the flexibility and our highly experienced teams have the tools that allow us to be agile and responsive in such situations. With another very strong quarter behind us, we remain proud of the strength of our brands and our ability to execute and win with consumers in this environment.

Thanks, Marc. With that, we come to the end of our prepared remarks and we will begin Q&A. As you know, there has been power outage today in Spain that can affect communications. With that, we thank you for your understanding and patience today.

The next question comes from Patrick Folan from Barclays. Please go ahead.

Hi, thanks for taking my questions. Just on maybe the makeup segment, can we just maybe unpack the performance there in terms of was there the impact from Charlotte Tilbury in terms of getting back on shelf from the withdrawal we saw in December? And should we see, you know, an uplift in Q2 from the product launch you did in March there coming through as quick as Q2? And I guess the softness within the premium makeup market, is there anything you can kind of comment on there by GEO? We should be thinking about looking ahead for the rest of the year. And just secondly, related to EMEA, where are we seeing kind of maybe a softer consumer sentiment, and is that something that kind of worsened from January to March. Thank you.

Thank you, Patrick. Yes, in terms of makeup, the softness in the Q1 was particularly in the U.S. That's where the reposition of the setting spray, in the case of Charlotte Tilbury particularly, took longer, and it was not until the end of February that we saw the shelves filled. So the first quarter was softer. as well as we still are suffering or, you know, impacted by the effects of the dupes. As we mentioned in our last call, we have a strategy to respond for this phenomenon. And throughout the year, we expect the makeup category to improve progressively. And until the end of the year, our projection is in the, range that we have presented for the year, most likely in the lower range.

Thank you. Just anything on the helpful.

In terms of the different geographies, EMEA last year was a very strong performance and we're seeing softness more in EMEA than in the other two geographies. And probably this will, we project that this will last along the year. Particularly in EMEA, the southern countries seem to be performing well, but we see softness in France, which is one of the largest markets in EMEA for us.

Okay, thank you.

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

Thank you. Good afternoon, Mark. My question first is on fragrances and fashion. Very strong performance. Can you tell us about what your best guess is about your sell-in versus sell-out at the division level? And then if you look into the U.S., what was the performance? And here as well, have you seen any specific discrepancy in terms of the selling ahead of the tariff implementation? In fact, you also reiterated your guidance for margin on the premise that you are going to raise prices. Can you talk about how is that going to happen and what kind of price you need to achieve in the U.S.? ? And then maybe following up on the makeup market, Sue, did I understand correctly that your division underperformed the makeup market? And if so, can you give us as well an idea of what the market growth in makeup, what is it that you see right now? Because you talk about softness in demand. and where is it that you are seeing that? Thank you.

Thank you, Celine. In terms of fragrance and fashion category, we don't see a challenge, let's say, in terms of selling and sell-out differences. Our levels of stock in the channel seem to be aligned with our sell-out performance, so in that sense, we don't see much of a problem. You mentioned whether, you know, the tariffs, when we, I don't know if I understood well the question, but when we, it is true that in order to face the scenario of tariffs, we did send product to the U.S. in advance, but it's not in our, you know, within our own perimeter, so it's not, an increase in sales that we see in a consolidated basis. But given that we have tried to prepare the scenario of tariffs for this year, we think that the impact that we may have will be already compensated by this extra inventory that we have in our warehouses in the U.S., plus certain price increases that we will be implementing during the year once the stocks are depleted. I think that answers the question for fragrance and fashion. In terms of makeup, In fragrance, our market share is big enough or material enough, let's say, so that we do monitor the performance of the category and very closely our market share. In the other categories, our penetration is lower, so we are more affected, let's say, by the performance of the different brands. And it's true that, in general, fragrance has been performing better along these last quarters, more than makeup and skincare. So, we've seen softness, particularly in the U.S., for makeup and skincare. And in our case, we have been, on top of that, more affected by the dupes that, in some cases, were very narrowly directed to our brands, but as I mentioned before, the responses that we have prepared for this dupe phenomena, we will be seeing the, that's our projection, we're seeing the improvement throughout the year as these initiatives are implemented.

Thank you. And can I just follow up on the first point around, you know, fragrance? You said that you monitor the category. What do you think the category growth has been? And with the strong start to the year, what should we expect in terms of momentum as we look in the upcoming quarters?

Yeah, when we... When we did the IPO at the time of the IPO a year ago, we were saying that the category for fragrance, we expected the category to grow between 6 and 7 percent. And in 2024, it did grow faster than that until Christmas when we mentioned that in estimation it had normalized, meaning it had gone down to or back to the six, seven percent that we had mentioned at the beginning of the year. For this year, we see the category normalizing, meaning that this mid-single digit growth rate is what we're expecting for the category, for fragrance and fashion. In some cases, for instance, we see growth in the U.S., in our case, because we still have a lower market share in the U.S. than we have in the rest of the world, and we think that there is a possibility for us to progressively close this gap, and that's likely probably one of the reasons that we have seen our growth still faster than others in that market.

Thank you.

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

Hi, thanks for taking my questions. I have two clarification questions. The first one, in terms of make-up roles, is it right that we assume that make-up in quarter one has reached the trough? And then given, you know, the entering, Charlotte Tilbury is entering Mexico in Q2, So should we expect from Q2 the growth to be in the positive territory, including Q3 and Q4 for the rest of the year? And related to that, Mark, I remember last time you mentioned for the 68% range, So basically makeup is going to determine whether we are landing in lower half of the range and the fragrance is going to determine whether we are landing the upper half of the range. I just want to check with your current knowledge and also with all the moving parts that we've seen in the market right now. How confident are you to reach the upper end of the half of the guidance range? Is it similar kind of confidence compared with the when we lost both end of that or is there any risk that we should be bearing in mind. The second classification is quickly on the U.S. tariff. So in your guidance you mentioned and outlook factors in the impact of your parents at currently expected levels. Can I just clarify what you mean by currently expected levels. Is it the 10 percent or is it the you know 20, potentially 20% back, you know, in discussion after the 90-day pause. Just more color on that will be very helpful. Thank you.

Thank you, Damping. First of all, makeup growth. We do expect positive growth in Q2 and for the rest of the year. Mexico, in terms of critical amount, is not necessarily a big amount. The way Charlotte, in this case, enters a market is normally through an exclusive distribution agreement with a retailer, and so we normally launch in a market with a, you know, a step by a step. The important thing is that we have started to, have in Latin America, which up to this point was no present in not a single market. So I think that's the good news is we're starting the presence of that brand in Latin America. Regarding whether we are confident about the 6%, 8% that we mentioned in the last call, we are more in like for like. because the evolution of the foreign exchange, particularly the U.S. dollar, is more uncertain. So, in terms of euros, like for like, we are confident on this range. As we mentioned in the past call, you know, the upside is for us the fragrance category, or the higher, you know, the higher side of the 6.8% for the fragrance category, and probably the lower side for makeup. But that's, we're confident on the range. And regarding tariffs, the currently, what we are mentioning is that we expect the 20% of tariff for euro, to be maintained and the 10% of the rest. So 20% post 90 days. If there was a change in that, then we will see. But our scenario at this point is that the 20% will be maintained after the 90-day margin or window that was mentioned by the U.S. administration.

okay may I just follow up in terms of the six to eight percent the upper end or lower end of the range so basically since we last spoke end of February is there anything over the past two months that would you know make achieving the upper end of the range even harder or we are still in the same sort of expectation

I mean, it's true that what we have seen over the past recent months is uncertainty, and we have seen the confidence of the consumer to decrease, and, you know, in different reports that we have seen over this period. In spite of that, we see still healthy demand for fragrances, which is our stronger category. and we think we have good plans for both the makeup and the skin care for the rest of the year. So we're still confident on this 6.8 percent, as I said, like for like growth given the uncertainty that we are seeing in some of the currencies, particularly the U.S., which is the most important for us.

Okay, thank you. That's very clear.

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

Good evening. I'm wondering if you could give us any directional color on the components of the light-to-light growth in fragrances and fashion, i.e., sort of volume, price, mix, if you could give us any directional color on the components of that in B1 light-to-light. Thank you.

Jeff, we heard you with little interferences. I understood, if I'm not wrong, that you're asking for like-for-like price impact for this year, no? So, so far, for the first quarter, Q1, there's not yet impact, but we are planning for the year low single-digit increases, including for Q1, sorry. So low single-digit increases. Yes, go ahead. Yeah, sorry, Jeff. You know that we have some problems in Spain at this point with the electricity network, and maybe that was the reason for the broken message. In the first quarter, the price increase has been low single-digit for frequencies as well as for other categories. So low single-digit price increase for the first quarter. which is what we'll do for the rest of the year.

That was our last question. Thank you all for your questions today. We will be hosting our first annual general meeting as a public company on May 28th, 2025, and we will also be presenting our Q2 sales update during the week of July 16th. We look forward to speaking again then. Thank you very much.