Good evening, and welcome to the presentation of Full Year '2024 Results of the fashion house Brunello Cucinelli. The speakers will be Brunello Cucinelli, Executive Chairman and Creative Director, Luca Lisandroni, CEO, Riccardo Stefanelli, CEO, Dario Pipitone, CFO, Moreno Ciarapica, Co CFO Senior and Pietro Arnaboldi, Investor Relations and Corporate Planning Director. [Operator Instructions]. Now I would like to give the floor to Brunello Cucinelli. Please, the floor is yours.

Good evening and thank you. So, it is great now. The bells are ringing and it's always the right time of the day to hear the bells tolling away. So, it is always a personal pleasure to hear from you again and welcome analysts, investors and journalists. As you said, there is always so much to take away from these calls if one has the courage to listen. This morning, we had a wonderful Board of Directors meeting where we first discussed the high-level 10-year plan from 2024, 2033, a high-level one, where we focused on high craftsmanship and tailoring and also the production because this is an important topic. And we ended our Board meeting by saying that we, see great opportunities in the offering for our brand for the coming three years and beyond. As always, we are all gathered here. I have to say that 2024 has, ended on a high note. One thing that we are certain about, we are convinced of what we must not do because it's important to always outline what someone has should never do. What we must do, on the other hand, always stays unchanged. We must uphold the value of exclusivity and craftsmanship product wise, and it needs to be contemporary because otherwise the company does not function. And then we need to manage growth. This is a crucial point for the life of our company. We need to manage growth. If we are able to do that, then our company could last more than a century. Then perhaps it will not happen, but we won't. We are set for that. So, I will read out the press release, then Dario, our CFO, will go into the details. Riccardo will discuss artisanal and tailoring productions, factory expansion, employee numbers and demographics. I will take the floor again to comment on the 2024 closure and then we will begin discussing 2025 where we are the first quarter is drawing to an end. And then we'll talk about taste, overall style. And so, let me read out the press release. Revenues EUR1,278.5 billion with an excellent growth of 12.2% at current exchange rate and 12.4% constant exchange rate. As usual, for us, current and constant are always very close. Then we have EBIT EUR211.7 million growing by 12.9% with a margin of 16.6% compared to 16.4% in 2023. Net profit of EUR128 million up by 19.5% to 2023 net of the effects of an extraordinary capital gain last year with a sales incidence of 10.1%. Major investments amounting to EUR109 million, EUR109.5 million to be precise. And 2024 marked the beginning of a three-year period of significant investments focused on expanding our factories, facilities here and also the other factories and everything is expected to be completed by 2026. And this project is part of the major ten-year plan 2024, 2033 aimed at doubling the production, that and this will cater for 2033. Solid financial structure with a net financial debt of EUR103 million, more or less. So, the Board of Director will submit to the general assembly scheduled general meeting scheduled for April 2025, distribution of a dividend of EUR0.94 per share, payout ratio of 50%. Now very, very positive sales in the nearly completed first quarter along with an excellent order intake for the fall winter 2025 collection and the strong enthusiasm we perceive around our brand. All this allows us to confirm for 2025 an expected revenue growth of approximately 10%. We also anticipate equally healthy balanced and sustainable growth of around 10% also for 2026. Of course, we always like to highlight this number 10%. The British Fashion Council will honor Brunello Cucinelli, will honor me with the prestigious Outstanding Achievement awards next December in London during the Fashion Awards 2025. And my comment was the following, another year has come to close, one which we have described as enchanting for our fashion house with revenue growth of 12.4% and profit growth of 19.5% compared to 2023. It has been a pivotal year for our brand's image crowned by the prestigious American Awards called WWD John Fairchild Honor. And, the reason why we were granted this accolade for Wolfers' constant dedication to mastery, creativity, craftsmanship, exclusivity, and human dignity. The reason why we were granted this accolade for Wolfers' constant dedication to mastery, creativity, craftsmanship, exclusivity, and human dignity. I have to say that it's always very pleasant to receive accolades like this. Then 2025, first thing first, I would like to mention that in December, on December 1st, I will receive from the British Fashion Council, I will receive the prestigious outstanding achievement awards that has been previously awarded to great fashion figures such as Karl Lagerfeld, Ralph Lauren, Miuccia Prada, Giorgio Arbani, Tommy Hilfiger, Valentino Garavani, who is always very kind. He always asks for a discount in my stores, and then Tom Ford. But here too, please do listen for the reason why this, awards was granted to me for the innovation in the world of cashmere and for how the Solomeo-based fashion house has transformed the industry's possibilities alongside its ethical vision of humanistic capitalism and sustainable humanity, setting a model for the fashion industry and business at large. So, this is what they wrote about us. So thus, we see 2025 as a particularly important year. We have concluded our fall winter 2025 men's and women's sales campaign with excellent results, and this is also key. We have closed it with highly flattering reviews from the international press regarding our style and lifestyle vision. So, the first quarter of the year is also wrapping up with very in about 10 days with very, very strong results. And by the way, spring summer 2025 collections last September were met with great appreciation because when the collection is beautiful, you broach the semester with a different attitude regardless what happens across the market. So, for 2025, we see significant commercial opportunities ahead and with gracious awareness, we want to reaffirm and restate the importance of managing growth to ensure a healthy plus 10% revenue increase for the current year as well as for 2026. Now, Dario, go ahead. You are not used to being translated, so please read slowly.

Good evening everyone and thank you Brunello. I would like to start with the analyst presentation starting off from slide 25, analyzing the performance economic and financial performance of 2024. So, the revenues values confirm the preliminary results presented on January 13 with an increase of revenues at current exchange rate of 12.2% constant 12.4%. Now I'd like to move on to the other items in the income statement. On Slide 27, this confirms a balanced margin and cost structure with EBIT at the end of 2024 rising by 12.9% vis-a-vis 2023 and margins that move from 16.4% to six up to 16.6%. The first margin raised by 15.4% and it accounts for 74.5% of revenues vis a vis 72.5% last year. This increase which basically confirms what had already been said about the half-year figures, in this 2024, it can be ascribable to the positive contribution from the sales mix in terms of geographies, channel mix, and product mix, but it is also down to the increase in in house production and expansion of production as I was saying. And by that, we mean the start of in-house production targeted at making suits and outerwear and menswear jackets, jackets like the ones we make in Penne and Gubbio that will start opening the second they started opening second half of 2023 and 2024. So, this outsourcing of some workmanship is reducing external production costs which is offset by the increase in some operating costs mainly the staff-related or personnel-related costs. Now moving on to the operating costs we can say that the increase by 17.8% in these costs mirrors the in-sourcing process as well as the target growth of our network, the development of new commercial and technological initiatives as well as the significant investments in communication. On Slide 29, we basically provide the income statement highlights and also, we dwell on the personal costs, the investments in communication and the rent-related costs. So, the first item personal cost EUR233.5 million up by 19.8% with an incidence of 18.3% vis a vis 17.1% incidence on sales vis a vis last year. As of 31st December, 24, the number of human resources amounted to 3,101 full-time equivalents plus 478 FTEs, which is 50% down to the strengthening of laborers linked to the increase in in-house artisanal production and especially down to the development in our commercial network as to the investments in communication, EUR92.3 million up by 17% with an incidence on sales of 7.2% slightly higher than 6.9% the previous year. The cost of rents net of the IFRS 16 amounts to EUR183.2 million 14.3% up by 18.2% vis a vis the EUR155 million and 13.6% relating to the previous year. This increase is mainly down to the new selected openings, the contract renewals and the extensions that were performed during the year. And then finally still on the income statement highlights, D&A amounted to EUR153 million vis a vis EUR138.8 million last year. As a result of all this EBIT went up amounted to EUR211.7 million up by 12.9% with operating margin amounting to 16.6% compared to 16.4% last year. And now I would comment the total net financial expense details on Slide 30. As of December 31, 2024, the financial charges were EUR51.1 million versus EUR14.1 million last year. 2023 was sharply affected by the extraordinary capital gain of about EUR20 million, which was due to our selling of the minority stake in Lanificio Carriaggi to Chanel. The total breakdown shows a component which we can call ordinary and recurring which is EUR27 million of charges which is separated from the component which is more strictly connected to exchange rate fluctuations. The ordinary recurring component shows an increase of EUR4.8 million which is mainly due to financial charges on leasing liabilities from EUR12.9 million to EUR20.2 million because of our underwriting new rental agreements which pertain both to new select openings and to the renewal of contracts of existing source. The exchange rate fluctuation component decreased by EUR3 million and it includes the unrealized effects of profits and losses from exchange rate fluctuations. To complete the analysis, of, our income statement, tax rate was 28.5%, which is pretty much in line with, 28.6% the year before, which is a healthy level for an Italian company and net profit as Brunello said stands at EUR128.5 million i.e. 10.1% of revenues. Slide 31 and the following pages show some comments about our main items in the financials. So, in particular, we'll talk about net working capital investments and net financial debt. The net working capital is EUR246.3 million with an impact on turnover of 19.3% versus 15.7% last year. If we look at the individual items that make it up, the inventory is EUR370 million with percentage of 28.9% of sales, which we consider to be ordinary for our group, which is manufacturing 85% ready to wear. As of December 31st 2023, the unsold inventory was EUR287.3 million. I.E. 25.3% of the sales level and this level is really limited also thanks to the great sales performance we achieved during the year, which is actually even higher than we originally expected. Trade payables are increasing slightly by EUR3.9 million in absolute terms even though we have excellent results for the wholesale channel 8.8%. And we have a healthy profile with credit losses that are really, really limited and less than 1.1% of the overall turnover. The turnover grew by double-digit and the trade receivables increased slightly by 1.8% last year from EUR176 million to sorry EUR166 million to EUR169 million with payment terms that have not changed. Other net credits and debits have negative balance of EUR33.6 million, which is higher than EUR20.9 million last year and this variation is mainly due to the assessment at fair value of derivatives to hedge exchange risks. As to investments, Slide 32, they account for EUR109.5 million which is about 9% of sales, 8.6% versus about 7% last year and this is connected to the major investments we've made to support the image of our Casa di Moda and its contemporary feel and the boutiques and their locations. We also invested the loss in technology and in the consolidation as Brunello said of our artisanal production capacity within the ten-year plan which will lead us up to 2033. To conclude, the characteristic net financial debt, Page 33, is EUR103.6 million as of December 31st 2024 versus EUR6.1 million the year before. This is due mainly to the good economic performance of the last 12 months, the variations of the net working capital and investments we just described and the payout of dividends for a total of EUR66.1 million with a payout ratio which was confirmed to be 50%. So, thank you all for your attention Brunello, that's all for me and the floor is back to you.

Thank you. Now Riccardo will give us a general picture and then I'll do some conclusions.

Thank you, Brunello. Good evening, everyone. I'll try and give some color to the five year or the ten-year plan that we've discussed so far. I'll start with the general principles. As you know, this is our guiding light and it will be in the future too and we basically have five guiding principles. The first most important one is we hold true to the rule by which if we need to produce twice as many products, we need twice as many tailors and production capacity. So, this is our fundamentals. There's no way out for this top-quality production it takes time it takes manual skills every single project we manufacture has over 60 of its content which is handmade which is not replaceable by any kind of machine. Secondly, artisan skills need to be protected and nurtured. So, our big challenge is not really who are we going to sell to, but who is going to manufacture these garments with this quality and made in Italy. Another important principle for us is, that if you want to do beautiful products, you need places of work that are just as beautiful and the right working conditions and salary conditions. Another principle is to get a quality product, it takes time. We all know that to train a tailor properly, it takes anywhere between three and five years, and it takes competencies and skills. We do have them in Italy, but many times these competencies and skills are concentrated in specific local clusters, and, they can only be found there. And this is a big asset for the country. Another very important final principle is we do not want to change our production system. It is based on our in-house factories and, of course, this is always very important for us but also, it's based on those 400 small artisanal companies in Italy that employ 8,000 people so the average is 20 to 22 artisans per small company. With those people we do have a direct relationship, an authentic one, it's never intermediated by any kind of platform and this is absolutely very important for us and they do a healthy profit too Brunello. So, three years of imports and investments 9%, 2024, '25 and '26 are going to be years of major investments so that we can really consolidate our artisan production capacity which will lead us all the way up to 2033. So, what is this consolidation plan all about? First of all, we are doubling the size of our Solomeo factory. Also, we'd like you to know that in August this year we're going to open the first part of this and the second part will be open during 2026 and so we hopefully it will be enough for us up until 2033. Then we have another project which is the Penne production factory. It's currently operating in 2024 as you know. But here again during, August this year, we're going to open its extension. And, I have to say that, as far as Penne is concerned, we now understand how deeply rooted and strong the knowhow and competencies on, shoulder pieces and men's suits and just, quite rare and unusual. We also have another factory in Carrara. I want to mention it here because it's not just a precious production factory, but it's also, an example of how we can really revamp and redevelop a very old industrial factory and make it very functional and contemporary. So, this is another important class of men's suits. Finally, recent investment in Gubbio. It opened in 2024 and there we are already completing an extension which will be fully finished by 2026. So, to recap these three years of big investment will allow us to finalize two big projects in 2025, the first major expansion and extension of Cerro Mayo and Penne and in 2026 we'll finalize two projects which is the final enlargement of Cerro Mayo and the extension of Gubbio. So, we believe these places will represent the ideal place for us to, host the growth of the amount of artisans who will work for us in the next five years, which is perfectly in line with what you know very well, which is our project to grow gradually and sustainably over time. I'd like to say a couple of things about our third-party suppliers we are not going to change our production system we have our suppliers we have in house production facilities, of course, but, the connection with our suppliers is very robust and solid. We keep reviewing them. They actually are robust in their own right, so they are in good shape, in good health, as Brunello said. We also believe they have, fair and just profit and healthy profit. We have a direct connection. There's no platform in between. The average age, which we think is important, is the average age of the owners of our production suppliers is 49 years old, which means that many of them have completed generation handover already. And the average age of the artisans working for them is 43 years, which also shows quite well and clearly that the hands that process our products are young and experienced at the same time. Another important and interesting piece of information I'd like to share with you is that we keep communicating our knowledge and teaching artisans through our academies. As we speak this is actually the main source where we find and hire and train new artisans. We started a lot of young people off on these professional skills. Many of them now work for our Casa di Moda whereas others decided to become, entrepreneurs, by themselves. So, we do believe these activities are going to grow progressively and proportionally to accompany the growth of the company itself. One comment on prices as Brunello anticipated, we believe that this year the price increase is going to be 3.5%. So, it's natural organic increase of costs that will be mirrored in price increases and the second component of the price increase which we are pretty happy with since we are 100% Italian, so, is that we actually accommodate the salary increases that have been negotiated as a collective bargaining procedure. So, for six years nothing much has changed, don't worry now we have a fairer and a bit higher salary for our Artisans and Factory workers. So, it hasn't changed for six years and now it's been updated. As Dario said we closed 2024 with 3,100 FT the average age is 38. It's pretty stable over time. We are a key reference for many young people who actually join the group and the Casa di Moda but also, we like to point out there is a continuous relationship and continuous side by side teaching and learning between the younger people and the masters so we can actually see them conveying their know how very, very practically. It's not something you read in the books, you need to live and breathe it day in day out. Now to complete our pricing, when Europe is 100, America is 121, in Asia it's 128 and we consider this is a well-balanced price proportion. So that's all from me. Brunello, back to you.

So how to, conclude 2024? So, this this mark, the first year of a five-year plan '24, '28, and it actually has been a very, very important year where we enjoyed strong revenue growth of around 10%, healthy EBIT between 16% and 17%, healthy net profits around 10%, healthy inventory at 29%, which is consistent with our history. We have healthy debt levels that are proportionate to the major investments we are performing. Important communication investments at around 7% because now it is the norm in modern times. So, every year we have been investing 7% but this '24, '25 and '26 we will, rise up to 9%because this project will be about because of the project that has been mentioned before. Then by the, October, we will also be online with our new AI-powered website. Yes. Applied to the online boutique. That's what we mean. So, we will double, our factory, and so this will should, cater secure production workspace needs until 2033. By 2027, investment levels will return to normal around 7%. Then we pay we have a dividend payout ratio of at 50%, and we think we can keep this. So, before my final, thoughts on 2024, we would like to highlight the importance of product creativity and contemporaneity. And this is something that really, ranks high in on our agenda because there is the value of the brand and the value of the product. Sometimes the brand is thriving, but the product is not or vice versa, whatsoever in acquisitions because our focus remains on a special focus on quality craftsmanship and exclusivity and the Brunello Cucinelli brand management. And we want to really always dwell on these items’ quality, craftsmanship and exclusivity. So now let's talk about 2025, this is the end of the first quarter. We are very pleased. Luca?

So, let's start from reading out 2024 final results as a premise for the new year. So, besides the results that we described, what about last year? So, for us, well, we are placed right positioned right at the top of the luxury pyramid, so we have to talk about markets. And 2024 marked a very healthy market. On overall, in 2024, we grew by 12%. I have to say that forex had a negligible effect during the year and as well as in this first quarter of 2025, and we grew by 80% in the U.S., 7% Europe, 12% Asia, and 11% in China. So, for us, the markets are doing, well. Then we closed 2024 with 130 direct boutiques, which is an exclusive network if you take a look at the number. It is a young network, and we have the feeling that it is also very fresh. As to our distribution, as you know, there are also 400 very important multi brand accounts, which basically, represent our deepest they're deeply rooted in the different geographies At the end of 2024 as well, we have a number of final customers that is on the rise constantly due to the combined effect of the loyalty of existing customers and the, attract the appealing factor for the new customers. And this does testify to the soundness of this brand. But as Brunello was saying, perhaps the most important feeling we have about 2024 is that we have a strong product on the one hand and brand appeal on the other hand. And it is not always the case that in the life of businesses, these two factors go hand in hand, product and brand. So, for all these reasons, we have the feeling that we have started 2025 with, in the best way possible. And we feel that we are experiencing a momentum, a time of great opportunities. As Brunello was saying, between 2019 and 2024, we doubled our revenues, but we have the feeling that today there is still room for growth. Yes. We doubled our revenues, but you should still bear in mind that there was the pandemic in between. Yes. We keep focus. We see a lot of attention around our brand. All the awards and accolades that Brunello is being bestowed upon testify to this, but this brand inspires trust and we are receiving a range of important location proposals in the main luxury high streets and also in in Asia and this is really unprecedented. And this offers us a huge privilege meaning the ability to pick and choose where to implement our growth. And as Brunello was saying, we can manage our growth accordingly. So now talking about the first quarter 2025 very important highlights. The first one, the sales in the first quarter were very satisfactory. Growth for us is very balanced, we believe, in the three continents, America, Europe, and Asia. And there is an excellent contribution coming from both retail and wholesale channels. And we're also very pleased with this continuity also because the first quarter 2024 had been a time when we had delivered a growth of 16.5%, so pretty solid. Then second highlight, the end of the fall-winter twenty-five sales campaign was extremely good for men's and women's both alike. And this bodes well for the second half of the year for our direct network. And taking a look at the results of the sales campaign, what becomes apparent is that we have a large number of multi brand accounts that we consider the true guardians of the brand, and they are allotting to us growing, spaces. You should know that at this moment in time, we have the feeling that the specialty store, atmosphere in particular well, this atmosphere, this ambiance is very modern and up to date because by nature, these are stores where you perceive more proximity and closeness to the customers and also the way in which they mix and match Brunello adds innovation and existing brands. Now let's take a look at this scenario. What about the market in 2025? We see continuity there. We envisage a market that is as demanding and, receptive as it has been in 2024. Continuity also in the striking distinction between absolute luxury and the rest of the market between brands that are healthy and thriving and others that are not so much. And it's always been the case, Brunello says. And so, the markets are very strongly correlated and perhaps we will go back to this later and all customers regardless of geography they all seem to look for emotions and experiences. Today we very much focus on the execution of our plan and we would like to describe it to you. First of all, we reconfirm our openings and the planned openings that we had already anticipated in October. So, we one store in Asia, one in Middle East Abu Dhabi, one in North America Vancouver, two important extensions in Europe Geneva and Vienna and also the Mexican branch. An important novelty is the opening of a boutique by the end of the year in a beautiful building in Rue Saint-Honoré in Paris and this is one of the most apparent examples like Geneva last year of the opportunities we mentioned before that are being really supplied to us and offered to us. Another important element for us when planning the year are the, Cali events. So, this year, we have the following. In May, I mean, there will be an event in Miami with the Formula 1. In June, there will be a great, summer party in Forte dei Marmi, attracting friends from all over the world. In July at Harrods with the Wimbledon, tennis tournament. And then in October, we will go towards the East. This year, we have an event in Japan, one in Korea and something we really appreciate to travel the world, be close to our staff, our customers, and across all the different geographies. And then the year will end with a beautiful celebration in London with the awards that Brunello will be presented with from the British Fashion Council, and it is very likely that some more surprises will be in store for you. So, we are very confident that in the 2025, it will mark yet another year full of satisfaction for brands. So, we are very confident that in the 2025, it will mark yet another year full of satisfaction for brands and for our staff. Now three minutes with conclusions and then that will be it. So, we are really experiencing a very good momentum. The product is being considered extremely young, fresh, high-quality. That's what, that was the comment at Pitti Uomo and Milan. We have important orders and important feedback. And I have to say that this is also confirmed by all the gifts or awards, in the past few years. And, actually, they always mention the idea of style and way of working, and perhaps these are precisely the most important thing that we need to safeguard. We have to safeguard our style, not because we need to change to sell more. We have 85%, apparel, and this was the same in 2019. So, revenues have doubled, but not the percentage. Well, of course, the brand, bears my name, and this, also adds a lot. And another thing I want to mention is in April, I will be, presented with an honorary PhD in architecture, and my daughters tease me about this. But truth in at the Vambitelli faculty university in Naples, Vamitelli was the architect who designed the Reggia Di Caserta warehouse in Caseta. And I'm honored because they say, well, I've always maintained that Vitruvius, the architect, said that every building you make must be a sound, view useful, and beautiful. And that's what we have tried to do also for our factory to make it sound robust and solid, to make it useful, and to make it, beautiful. And then in December, we will celebrate my, this prize which is somehow the fashion, academy awards for fashion, you see, because the British always bestow important awards. And then in a couple of months, we will also announce something nice, beautiful that we can't disclose today. So, before we end, what about the 2025 forecast? So, we can anticipate today, as usual, our growth project is of around 10% revenue growth with a slightly improved EBIT and a healthy net profit of around 10%. The currency impact remains negligible. This has always been the case for us. And then at the end of it all, what really matters is the current figures. So, to conclude, of course, the brand bears my own name and all this goes to support the brand itself. And then last but not least we work with balance and serenity and we really want to make that clear to you because this really impacts the creativity because human beings can be creative when everything is in balance around them. Let's now open to the Q&A Do not worry. It's quarter to seven. We still have time. One last thing. In April, we will have the, figures of we will communicate together with Moncler on the very same day. So, we will hold our call at 05

45 and Remo Ruffini at 06

30. So, we want to thank Remo Ruffini and Moncler for, postponing their call by half an hour. Thank you. So here we are.

Thank you. This is the Chorus Call operator. We will now start the Q&A session. [Operator Instructions]. The first question will be asked by Andrea Randone of Intermonte.

Thank you very much. Good evening.

Thank you. Andrea, please.

Your presentation is always very rich in details, but I'd like to go back for a second to The United States. Some players said there is some volatility on the market which doesn't necessarily mean a negative impact, but I'd like to know whether you noticed some volatility too? Second question about the U.S. again, I'm thinking of what the Wall Street Journal wrote about Saks. They asked for different payment terms for longer payment terms in particular. You've shown numbers that are totally under control from this viewpoint. So, I'd like to know how you manage that? And my third question more generally is about taste. You are so full of surprises at least every single day we actually see eventful changes. I'm wondering whether that is also mirrored by any kind of change in taste. Do you see any new trends emerging?

Andrea, this is Luca answering you. So as far as the U.S. is concerned, I have to tell you we have very beautiful results there. We're really satisfied with the work we're doing there. And as I told you, we expect the first quarter to be very good with a very good balance between different regions. Now speaking of Saks and NIMENS, we met them for lunch at home and, the idea is that Saks, Nieman, Gutmans are the best players globally in real luxury. We discussed with them. We see no big challenges and then also because Mark Daniels is a friend, Jeff Bezos is there. So, you know there's, the truth is that at times they want to maybe review and rediscuss payment terms and so on and so forth but frankly there's no problem there and also the projects they're embarking on it are really irrelevant. Now, Andrea, you were asking about taste. Well, I think as far as taste is concerned, we are moving towards a taste which is refined and chic, but we need very special products to accompany that. So, if collections are a bit too basic or repetitive, then then maybe you do have some problems with that. That's for sure. At this moment in time, style and design do really have a great value. We worked a lot on it. We came up with our collections and apparently or actually that's shown by numbers the price, like them and the buyers are liking them too. So, I think that for the next few years, we see a lot of sophisticated, beautiful, refined, very fine products. So, you remember when we first heard about Quiet Luxury, people were a bit perplexed and they said, what is it? Well, it's a fashion. It's, the key fashion of the time, I should say. So, sophistication, elegance, the color, palettes, the shapes, all these things are really, really important. So, we are very positive about our style and design. You need to be brave but, we never have evergreen so the even men's jackets may be one centimeter and a half shorter than the wear last year. So, it's not the same jacket. It is different anyway even though it's still a blue jacket. Evergreen will lead you to, your grave. I mean, you end there, so you need to invest in product design, product development all the time because you may get it ranking marketing and that's okay. But if you get the product wrong, that's much, much worse. So, product comes first, and it's our key, resource. Thank you very much.

Thank you. The next question comes from Oriana Cardani of Intesa Sanpaolo.

Good evening. Thanks for receiving my question. I have one first question about the order collection for fall winter 2025. So, you said collection order collection is good and well balanced within the three main geographies Europe, America and Asia. So, I was wondering inside Europe within Europe, is it a well-balanced distribution here again or do you have some European markets that I may be showing some signs of slowdown whereas others are more brilliant?

Well, in the end, things are going very well. Of course, maybe Germany is doing more reorders, so they're buying a bit less for the first order. So, what that means is that deliveries are extremely important. Instead of buying plus seven, they buy plus four. And if they start selling well, we need to be ready with reorders and deliveries. So, Oriana, please remember that everything you reorder has a sellout ratio of nearly 100%, so it's really, really important to do reorders properly. They tend to sell to their own domestic clients, so the atmosphere is pretty good, but of nearly 100%. So, it's really, really important to do reorders properly. They tend to sell to their own domestic clients, so the atmosphere is pretty good. But of course, products must be innovative and, quite new. Even in men's, many times we say men's is more difficult than women's fashion because a jacket is a jacket and to look different, it needs different details like, I don't know, buttons or sizes or whatever. So, we certainly saw a lot of research. As soon as people get to the showroom, they all look for something really special, really creative. They look for design and, sophistication and, being exclusive is very, very important because if you are wealthy and, you see, Oriana, you don't want to buy and wear what anybody else can buy and wear. I hope it was clear enough.

Absolutely. Thank you. I have a second question if I may. On the launch of the six new fragrances you did in November. Also, in quality terms, how are they performing? Did you notice any results?

Well, they're almost too successful, Oriana, to tell you the truth. Now, you know, these fragrances, they are top quality fragrances. Our first two fragrances, the two, let's say, basic ones are performing very well. We're happy. They're well positioned, and they're positioned just like our cashmere products. And then every year, we'll add three, four, five new fragrances. Now these are performing very, very well, and we think they kind of mirror our, customer's taste because there again, it is important for fragrances to mirror the taste of a brand. I've always, been in love with my master, Ralph. But even today, I have to say that Ralph's taste is his own taste. So, it's very recognizable, very clear. And we should never lose sight of that, Ariana. Yesterday, I was interviewed by the New York Times on, the value of light colors and so that means we should never lose our taste. Taste and positioning, which is another very important thing. When we speak of governing our growth, managing our growth that's what we mean. Exactly, we won't have any prices. We never do that. This is not what we do. Ariana, we have more or less 400,000 customers. It may be 10,000 more or a few more. We don't know them all because some are served by multi brands, but we know more or less how many people we hire. And we have to become less well known than yesterday in a way. So, we that means we'll be more exclusively sophisticated and chic and so on. We always have to be refined. Never lose sight of that. So, I realize we've been praising ourselves a lot but this is a constant fight Ariana never lose your identity. The collection is the same everywhere from San Francisco to Shanghai I mean it's exactly the same collection, the sizes may be different but the collection is always the same. And this is important too. So, we can say that difficulties and challenges are in virtually proportional to growth but actually we had a thousand pieces in our collections four years ago and we still have today because we have a single brand a single positioning and that's what we do that's what we're all about We do believe in beautiful things, Arianna.

Next question from Melania Grippo of BNP Paribas. Please.

Good evening. I have one question on the gross margin. It increased by about 200 bps. So, can you give us more details on how much of that is due to vertical integration and how much is due to the value mix in channels? And what can we expect for 2025 in terms of its improvement? Thank you.

Melania, this is Ricardo. I'll answer your question. As Dario said earlier, we certainly had an increase in the gross margin, which is due mainly to the effect of bringing production in house, those factories I was talking about earlier. And this also I was talking about earlier. And this also meant, that the cost of personnel increased at the same time. So, when we said that the amount of FTEs at the end of 2024 is 30,100, it's because the increase versus last year is due to opening new factories. So, 260 of these new 400 people are those that used to work with us with outside suppliers before. So, this is the main effect. As far as our expectations for 2025 are concerned, full in line with the forecasts and guidelines we have already disclosed, we expect EBIT to improve slightly. Thank you.

Thank you very much. Next question from James Grzinic of Jefferies. Please.

Good evening, everyone. Good evening, Brunello. Congratulations on your fragrances. I did try Brezza Gentile, the Gentle Breeze. It's fantastic. I love it. Well, that's a sponsorship, isn't it?

Yes, it sounds like it.

Now I have a simple question. It's a bit philosophical perhaps. Now if we think of this three-year investment plan to expand production capacity from '24 to '26 and we still have the capability to expand operating margin in a well-managed way. So, once we've laid the foundations for local expansion of production. Can we possibly think of having more leverage on operating margin?

No, no, not really. No, let me explain this to you. So, the issue of operating leverage is, we start off from a basic point of view. So, I'm persuaded that many people, young people in particular, do not want to buy if you make an outrageous amount of money on what to do. So, I have to be very frank with you here. So, people are a bit tired. They're not tired of luxury, but they're tired of some exaggerated prices whether we like it or not. They are annoyed. They're fed up. So, with every day, anywhere between 16%, 17%, a net profit of 10% for an Italian company. So, we think we can certainly do a good job there because we do, actually make a nice amount of money, but our factory workers may make EUR2300 per month and that makes a difference. So, should we have a higher profit, don't you think we could increase prices by 10%, 15%? So, would you pay a Cucinelli suit $6,000 or $6,500 it wouldn't change much, but we do have a basic decision there. So, these prices that are slightly high, you're a bit younger than us, but 15 years or 20 years ago, the top designers of Italian fashion did a everyday in the region of 17%, 18%, 19%. So, we don't want to lose that kind of noble attitude towards our job, our work. Then if we do have 20 basis points more, which did happen, that's fine. But don't expect us to do anything really differently from what we do because younger people, younger consumers, we're not prepared to buy. We're not be happy to buy. I wouldn't be happy to buy. I mean, if your profit is exaggerated in my eyes, I would not be happy to buy from you. And this feeling is really strong, and it's, it's becoming even stronger as we go. So, we found the right balance in our profits. We found the right balance with our salaries for factory workers.

And, someone asked me, why are you so much loved and appreciated? Well, perhaps because we turn a fair profit. Because if you, buy a coat in Vicuna, $27,000 and then you see that my profit was 35%, 40% EBIT. Well, do you think you would be happy with that?

I don't think so. So, we do not want to really judge be judgmental on other brands' strategies. But I, for example, buy Vacheron Constantin because 270 years of heritage, and they only make 30,000 units per year, and they make a healthy profit. Once again, I repeat it 270 years of heritage. But if you the fair profit is the key. So, I do not want to go to a restaurant and pay a $830. This is not what I'm looking for. So, the thing is that we have struck a right balance. Then, of course, if we do have 10 basis points more, we are pleased, but that should not be the aim and purpose because the youth are different. And very clear and consistent. Thank you. There is a lot of sensitivity about this you know and I would say that the, fashion industry, has had some issues because of that. Because, say, if you are a Chinese shopper, you buy your product that cost 40 times, more. And you see many Chinese customers, they say, why is it 140 for me and 100 a Milanese? Why do would I have to queue to step into a store when there's nobody there? You see all these attitudes. I don't want to do that. So, this is some type of sometimes people, have funny attitudes in in stores. I wanted to step into a store in Milan of another brand, and they made me wait for, 10 minutes because that's the way it is. We should find the balance again.

Thank you. Thank you very much.

Next question from Chris Huang, UBS.

Hello. Hi. Thanks for taking my question. I have three, if I may. So, the first one is just on your currently Q1 trends. I mean, you commented that you're very satisfied with the performance so far, but if we look at the different channels, starting with retail, can you just give a little bit more color on whether or not the channel is still growing double digit? And moving on to wholesale, you had of course a very strong Q1 last year. So just trying to think about what kind of level of growth should we expect for Q1? That's my first question. Secondly, coming back to the U.S, I just wanted to confirm, are you seeing any signs of weakness in perhaps the traffic in the U.S. or the mood in the U.S. Consumers? I'm asking this because I would imagine the high-end consumers are very sensitive to the stock market in general and as you can see it hasn't been doing so well year to date. So very curious to hear what you're seeing there. And last but not least, coming back to the gross margin actually, if we look at your historical gross margin trends, we can usually observe a higher gross margin in H2 versus H1, due to the product nature you have in the fall winter seasons. But if we look at 2024, you actually had two halves of gross margin in line with one another. So, are there any one off impacts you had in H2 and you can elaborate a little bit more on that? Thank you.

So, Chris, starting off from your last question on the gross margin, you should also consider that last year in the first half, we grew by 14% and then 10% in the second half, and this effect of this kind of growth actually impacts the margin. Then it is true what you say that the effect of the start of the, in of the insourcing of production weighs more in the first half rather than the second, but the main effect of the change in margin between the first and the second half has to do with the sales performance. As far as The U.S. is concerned, we see no difficulty or challenges. But, Chris, bear this in mind, we are talking about exclusivity and absolute luxury segment. This really is key. So, we see, you have to design beautiful, collections and be a stay exclusive. So that's for sure. And the last question had to do with the first quarter. Yes, Chris. So today, we say that this is some sort of quarterly, call or call of the first quarter because there are just two weeks busy. But we want to grow in a healthy manner. We already have the results of the first quarter. You can expect a good first quarter, let me say that, a good healthy first quarter results.

Okay. Thank you. Have a good evening.

So, I'm sure you will like this, a good healthy first quarter results. And we can say, as Luca was saying, across all the different continents across the world we can say, in the different geographies.

Next question from the English conference call by Natasha Bonnet, Morgan Stanley.

Hey, Good evening. Thank you for taking my question. And the first one just on China. I mean, obviously, you outperformed the market last year and you had a big event in October 2024. Can you tell us what your teams on the ground are telling you regarding brand momentum of Cucinelli in China and where you expect the incidence of China could be in the next two to three years? And then my second question would just be, if The U.S. Were to impose tariffs on EU imports, do you believe you could offset that fully with pricing? Thank you very much.

So, Natasha, first thing first, thank you for what you wrote. You wrote so many beautiful things that we are really honored. So, and so we'll talk about tariffs, last. But you see, China. Honestly, we think the following. The Chinese people, they are all very much online and connected. Whenever I have interviews with them, they're surrounded by, devices, iPads, and mobile phones. So, in China, you have to be known just a fair amount, not too overly known. Otherwise, you lose out on exclusivity. And in China, we are viewed as an exclusive brand, and we love that. As you can see, we open one store a year. So, in China, I have to say that it is very easy to run the risk of having your brand overly distributed to commoditize. And so, for us it is quite a good time in China. We're enjoying quite a good time. As to the figure the tariffs, I would like to say the following. In our case, in '96, 1997, there was the so-called banana war because there were some problems between banana and cashmere and but then everything went ended up well. But now you see 121 is the price in The U.S. and hundred is in Europe. This is the proportion. So, I think that all countries in the world are so strictly intertwined and interconnected that this tariffs issue can be solved and settled as it happened in the past. Then if you think ahead, we have 400,000 customers and 250,000 of them. They have three or four mansions across the world. When there was the problem with the war in Russia, this was offset by the other geographies, the drop in Russia like Dubai, U.K. And even if there was to be a tariff that impacts us, I would regret it and I would find consider it unfortunate, but actually selling a suit for $6,000 instead of $6,500 does not change much for our customers. I think that what really matters is taste and exclusivity in order to maintain our positioning. We can't lose out on this. If we lose out on exclusivity, which means that we lose out on a lot. I always give, the usual example of when I was modeling for a LS number one in the world in 1982, '1984. They stopped selling, and the owner called me and said, Brunello, you are young. What's wrong with this collection? Why are we not selling? And I said, well, the problem is they do not want to see the logo less. So, well, Moreno, you were working as a CFO there. You know this. You see, there's a time when the product the brand is okay and the product is not and vice versa. So, I attach a lot of importance to product and exclusivity, Natasha. And then, in a nutshell, I do want to thank you for, what you wrote to such a nice coverage, beautiful, thoughts. But if we think of our company in the coming decades, I all I see a balance between the three geographies, U.S., China, and Europe. We still need to be exclusive in China. Otherwise, the brand becomes too commoditized. It would be no longer exclusive.

That's for sure.

Yes, you can count on that. Thank you, Natasha, for everything that you wrote.

Next question, Adrien Duverger, Goldman Sachs.

Hi, good evening. Thank you very much for taking my questions. So, the first question would be on the wholesale channel. Could you please comment on the confidence level across the wholesale partners and how you would compare this compared to when you last spoke in January? And could you also please comment on the order book and if there are any timing issues to be aware of in 2025? And my second question would be with regards to your manufacturing investments. So, thank you very much for all the comments on the progress regarding the new facilities and the construction. If I understood correctly, we should expect most of them to be completed between August 2025 and in 2026. And I was wondering how do you expect the additional supply to evolve over the next three years given the progress on the construction? Thank you very much.

As to the wholesale channel, you see in, we in history, we've always had 40% wholesale. In history, we've only less than 0.1% of our revenues, which means we lost nothing. We had no losses there, and we have the 400 best accounts in the world. We attach a lot of value to them because they we call them the true guardians of taste because no one will ever convince me of the opposite. The wholesale channel, they know exactly what a good and fresh collection is. They know for sure. So, you should always consider that we are great and firm support staunch supporters of the wholesale channel. Then as to the deliveries well truth be told very often, brands, they tend to serve their retail stores better than the wholesale channel. And they, say to the wholesale well, sometimes they some brands reduce the wholesale channel then they say they do not pay, but it's not absolute it's not true at all. The top brands, wholesale brands, they are extremely serious. We never lost any single penny in 45 years of history.

Then thank you for your question. As to so as we said on the investments, so these three years of investment will, end next year 2026, and there will be a doubling of space of, square foot square feet. But then up to 2023, there will be a gradual doubling of our production capacity because these are the spaces we are so it's not that when you expand the factory, you can expand it by 10% a year. Factories, you redo them every ten years and that's it. So, this factory we think that that everything the new spaces will cater for our needs until 2033. But you should remember that it takes three to five years to train a tailor. So, we believe that at the end of 2026, we will have a production capacity and facilities that will be super robust. In line, we have a governed measured growth and that's important. It's seven points in volume and 3% in pieces and but since we have not changed, model, we have 400 small, subcontractors, artisan subcontractors that enable us to respond immediately and on time whenever the demand increases. And also, at the same time, we have managed growth. Adrian, you are young, but since February year February on average, we grew by 12.1%. And since our listing on the stock exchange 2012, we grew by 12% to 12.2% so let's if you forget these post pandemic years because this is our plan so if we wanted to, we could open 30 beautiful stores. But since we like to abide by our plan, we do it only when it is worth the while as it was in Paris or Geneva.

So, we may spend a lot and invoice more, but this is not exactly what we want to do. We want to comply with our plans.

Next question will come from the Italian conferencer Paola Carboni of Equita. Please

I have one question on the pricing, if increases, which you said is going to be 3.5% this year. So, can you give us a comment on what you expect in terms of mix, which I think will be added to that price increase? And I have another question on the expansion of production capacity. So, could you please remind us of the mix between in-house production and outsourced production today? And is that going to change as you progressively expand your in-house production capacity and on a steady state basis once you get to the end of your projects. For wholesale, I have a technical question. The fourth quarter was slightly weaker. So, should we think that deliveries are going to be concentrated in the first quarter this year? Maybe that is partially why the first quarter is particularly strong. And then speaking of the first quarter of 2025, again, I think the idea is that I've obtained in a very well-balanced growth in the three main geographies. Normally, we are used to see that North American APAC grow more than Europe in this part of the year. So, are you also looking at well balanced growth for the whole group? Do you think there's an extra contribution from wholesale in this quarter or looking at retail, Europe is picking up speed and falling in line with the growth rates of other geographies?

Paula, this is Riccardo. I'm going to answer you on pricing. 3.5% is the average price increase, and we believe that we'll have another three or four points from the mix. Then production capacity. Well production capacity, we really focused on men's jackets because it is a very difficult product to manufacture and it takes three to five years to educate tailors. For the rest we have no problem at all. For the facilities we have created to manufacture men's jackets between today and 2026, we'll be happy with our production capacity till until, at least 2032 or '33. Then for wholesale, well, of course, there may be some swings because, there may be deliveries that change quarter depending on the timing, but it's, it's a very, very slight difference. But there are two big seasons, for wholesale, two halves of the year. Yeah. We want to be very punctual and very exhaustive. You know, Paula, deliveries are a very serious matter. People understand them better if they have a wholesale background. So, if you deliver seven days or 10 days late when, multi-brand stores have already prepared, their store windows with other brands, they're not going to change, their windows because, your stock has arrived. See what I mean? This is a very delicate issue. I mean, deliveries are very, very important for wholesale customers in particular. And since we come from a wholesale background, we are pretty well organized as far as deliveries go. But this deliveries organization is, very beneficial because it means that as soon you feel a product is really taken off, you can do reorders, you can manufacture more. So, what happened in 2020, we slightly, what we just took some time because we didn't really know what to expect in 2023. Actually, in 21, '22, and a part of 2023, there wasn't much product available on the market so we were very reactive and proactive too. But if your gross project is 5% to 6% to 7% in terms of units then Paola it's relatively easy to manage that but if you need to manage growth which is 25% to 30% with pretty high sales so things become much more challenging. So, if you ask me about my big concern, it's design. But if you are brave enough to listen, then, you can sort design out. So, I spent four days in, PTI. I talked to 300 multi-brand, accounts, and, we look at them viewing our collections. And so, if they don't seem too satisfied, then you have to go back home and say maybe we should take a color off or add another or whatever. It's a bit difficult to just, listen to criticism. We all know that. We don't like it in general. But if you listen to criticism, you are at least two years ahead of everybody else in intercepting new trends as they come up. But if you only listen to your store managers and, they always tell you we're the best, we're so good, but I understand them because they only see the products we have in our stores where multi brand accounts see 300 collections 6 months ahead. So that's a big issue.

What about growth in different geographies?

Well, for the first quarter, it's really well balanced. I mean, they're nearly pretty much the same everywhere. Very, very well balanced and we like it. It's maybe too balanced in a way. We still have two weeks to go.

May I ask a follow-up question? Can you comment on three, four points of increase from the mix? What kind of products are becoming more peculiar and popular? Is it men's suits or knitwear?

Well, first of all, you know, we do 50% men, 50% women. Yeah, let me go back to what Brunello was saying earlier creativity is the name of the game. This is what really brings the right mix. We always try to do things even more manually and in more artisanal way. And also, the wealthy consumers in the world are looking for creativity and quality. They're looking for content. They need to be satisfied by the way products feel and not just look. So, all of those contents are things we are very satisfied with. Also, our creative teams here in Solome are very good at doing this. We are a product company to begin with. Paula, if one year, the trousers are very wide and long, of course, they're more expensive than tighter pants. If one year, a longer coat is more popular than the bomber jacket, of course, it will cost a bit more. So, these are the key differences that may vary from year to year, and this is where you have to be lucky enough to get the taste right.

Thanks a lot

There are no further calls there are no further questions. So then thank you very much. Thank you to you all and talk to you in about one month. We'll only be talking about revenues at the next conference call, so we'll have time to discuss other topics too. Thank you very much. Bye-bye. Goodbye everyone.

This is the chorus call operator; the conference is now over you can disconnect your phones. Thank you.