Q1 2024 Brunello Cucinelli SpA Corporate Sales Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrea Randone - Intermonte SIM S.p.A. - Analyst : (interpreted) Thank you. Good evening. Good evening, everyone in Brunello. I have four quick questions. The first is an update about the penne factory and on men's ready-to-wear in general. Second question, your wholesale channel is, of course, a very beautiful one and says so. So you were talking about a meeting in Milano. So can you comment how you see their business? So the people you work with, how are they performing apart from the business they do with you? I think they're doing pretty well. Is there a lot of confidence in the sector? My third question is just a curiosity because we've seen beautiful pictures about tennis fashion and the [Guadagnino] film on tennis and so on. So it's a curiosity. I mean, there are some films which were not typically yours to begin with, but do you see an enthusiastic response from the customers there? I think you do. And final question, you just talked about fragrances earlier. Can you please repeat your standing on fragrances? Maybe I lost connection for a second and I didn't quite understand what you said about that.

Question: Andrea Randone - Intermonte SIM S.p.A. - Analyst : (interpreted) Thank you very much, Brunello, and thank you, Riccardo, as well. Goodbye. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2024 / 4:00PM, BCU.MI - Q1 2024 Brunello Cucinelli SpA Corporate Sales Call

Question: Oriana Cardani - Intesa Sanpaolo - Analyst : (interpreted) Good evening. Thank you. Good evening, Brunello and everyone. I have two questions. So the first is about this little acquisition of Sartoria Eugina that you have announced. Could you please comment on that transaction? And can we expect anything else similar to this to happen again? And my second question is about Japan. So I'm thinking of what the Witton Group said yesterday, that they saw a huge effect of growth because of Chinese tourists traveling to Japan, especially recently. So can you please remind us of the overall impact of Japan on social revenues for you? And even though tourist flow is maybe not that relevant for you, do you also know some positive impact from that trend?

Question: Melania Grippo - BNP Paribas - Analyst : (interpreted) Hello. Good evening. I have two questions. One question on the performance of Europe, so plus 9%. I'd like to know whether there are any significant differences between and among the European countries, or whether this performance is uniform throughout Europe? If not, can you tell me which is the best performing country? And what about the strong growth in wholesale? Are there any one-off effects? And can we quantify them?

Question: Melania Grippo - BNP Paribas - Analyst : (interpreted) Thank you.

Question: Liwei Hou - CICC - Analyst : Good evening from Hong Kong everyone and good evening Mr. Brunello Cucinelli, congratulations on great results. I have two questions. The first one is on our adjacent business. So we have launched the fragrance business around last year and also launched the eyewear business last month. So I wonder when we will be able to see royalties income in our revenue breakdown and how meaningful it will be for our total revenue in the mid to long term. That is the first question. And the second one is if I look at our retail boutiques, it increased only 2% in terms of points of sales year on year but we delivered 15% retail revenue growth which is remarkable. So I believe we have increased our retail density significantly. I wonder what do you think will be the maximum headroom we will have in terms of retail density before we have reached the saturation point and we will be forced to open more stores to ensure the customer experience. Thank you very much.

Question: Louise Singlehurst - Goldman Sachs - Analyst : (interpreted) Hi, good evening everyone. Thank you for taking my question and thank you also for the comments so far, particularly the philosophy around pricing which is very clear. I wondered if you could just answer one question for me on the US. That had a very strong development in Q1 and I wondered if there was a large space contribution as well as very strong underlying momentum and if there's any commentary you might be able to share with regards to the US consumer purchasing behavior and any changes you've seen in the period. Thank you.

Question: Chris Wong - UBS - Analyst : Hi, it's Chris from UBS. I have three questions, please. Firstly, can you just maybe comment a little bit on the Q2 trends? I know we're only two to three weeks into the quarter, but we'll be very interested to hear what you've been seeing so far of the American, European, and Chinese consumers. That's my first question. Secondly, on the 2024 guidance, you gave 10% sales growth for the year. I caught the comment that you did fall-winter collection of price increase of 1% to 2%, and previously mix was said to be an even bigger driver than pure pricing. So just keen to understand what is your underlying assumption of this 10% if we kind of break it down into pure pricing, the mix, and the volume's growth. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2024 / 4:00PM, BCU.MI - Q1 2024 Brunello Cucinelli SpA Corporate Sales Call And last but not least, on even margin, you very helpfully gave a range of 16.6 to 16.7 for the full year, which is roughly 20 to 30 basis points expansion year-over-year. So on this, can you comment if you are expecting the expansion to be balanced across the two halves, or is it going to be H1 or H2 weighted? Thank you very much.

Question: Paola Carboni - Equita SIM S.p.A - Analyst : (interpreted) Good evening, Brunello. I have two questions. I hope I will be quick. So the first question is about the Chinese. Can you elaborate a little bit more on that? And yesterday with the LVMH numbers where we show that they are now driving the growth, do you also see that different pace compared to the other nationalities? And then we mentioned, we explained your distribution model, which is based on the monobrand and specialty stores, so it's a bit different. But what's the situation now, and what opportunities do you see in the years ahead? The second question is on wholesale. Can you give us a bit more color on the markets and on the geographies that are driving the strong results that we saw in the first queue? And moving on, apart from the store openings in the monobrand network, have you ever thought of converting some hot shops, so as you did in the past years? Are there any opportunities in some geographies? But first of all, I'd like to know whether you see any differences between the performance of wholesale in Europe and the performance of the wholesale in the US.? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2024 / 4:00PM, BCU.MI - Q1 2024 Brunello Cucinelli SpA Corporate Sales Call