OVS SpA Q2 2025 Earnings Call Transcript

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

Question: Andrea Bonfa - Banca Akros - Analyst : I got a couple of, let's say, small questions. One is related to the impact of openings, if it was material in H1. And the second one, for what I remember anyway on this point, openings should have been more relevant in H2, but please correct me if I'm wrong. And the second one, you mentioned that the first half results were helped by lower purchases costs. And I'm wondering if this lower purchase costs REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 1:00PM, OVS.MI - Q2 2025 OVS SpA Earnings Call are an anticipation of what you mentioned for '26, thanks to the US dollar and, let's say, the difficulties of your traditional Far Eastern supplier? Or how shall we, let's say, interpret this aspect?

Question: Andrea Bonfa - Banca Akros - Analyst : That's clear. If I may, is it possible to quantify, let's say, the amount of shops maybe in square meters or percentage-wise that you are, let's say, refurbishing on a rolling basis or in particular this year versus last year. So, is that 5% of your surface, is that 10%, just to have an idea.

Question: Francesco Brilli - Intermonte SIM SpA - Analyst : A couple of questions from my side. First of all, if you can describe the movement in the change in net debt compared to the end of last year, I mean, below the operating free cash flow and the -- what we should expect going forward for the second half of the year? And the second one is more on the international sales you mentioned, which are performing well. If you can add some color on the performance by geography and the plans you have at outside Italy going forward?

Question: Luca Orsini Baroni - Orsa SRL - Analyst : One question. You have made a fantastic 60% gross margin in this first part of the year. Do you think that this 60% gross margin is a level that you can sustain for the entire year and also in 2026 because it's very high.

Question: Luca Orsini Baroni - Orsa SRL - Analyst : Okay. Then I have a second question on the business. You have highlighted these three new shops of Upim. Can you just tell us a bit more what you're trying to achieve with -- what is the difference? And what are you trying to achieve with these new shops?

Question: Luca Orsini Baroni - Orsa SRL - Analyst : Okay. That's very interesting. And keep up with the good work and that's all for me.

Question: Gian Marco Gadini - Kepler Cheuvreux SA - Analyst : I have a quick follow-up on the gross margin again, particularly the gain you booked in the first half. So we understand that nearly 70 basis points out of the 100-basis points gain were linked to the like-for-like performance. And with a ballpark estimate, if I'm not mistaken, we can infer a channel impact derived from DOS performance compared with franchising that is impacting, I think, around 20 basis points. So it leaves around the 50 basis points that I cannot explain. You mentioned before the pricing of Les Copains and PIOMBO. Is this the main reason behind this gain or there is more behind that? And if so, if you can maintain this pricing power going forward?

Question: Gian Marco Gadini - Kepler Cheuvreux SA - Analyst : Yes. That was super helpful. And if I may, tell us how was the impact of the beauty sales as a percentage of the total sales?

Question: Gian Marco Gadini - Kepler Cheuvreux SA - Analyst : Or maybe 8?

Question: Paola Carboni - Equita SIM SpA - Analyst : Actually, I'm a colleague of Domenico, it's Paola Carboni still from Equita. I'm going with a few questions. My first one is about revenue growth. If you can share with us your growth target for revenues, excluding Goldenpoint for the year and where are you now versus your expectation, your budget? And at the same time, what we should expect as a contribution from Goldenpoint from July onwards? Is it maybe some EUR70 million a reasonable amount? So I don't know where do you see kind of a pro forma, let's say, amount of revenues for Goldenpoint for the full-year 2025. Another question is about inventories. If you can come back on your comments at the beginning about the impact of the inventory still, let's say, linked to the Suez Canal issue. And let's say, how long should it take for this to normalize? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 1:00PM, OVS.MI - Q2 2025 OVS SpA Earnings Call And also whether do you see any risk of extra inventories more linked to the business? And my third question, if you can comment or update us, let's say, about the M&A opportunities you see. There has been probably on the press the name of Kasanova. So I don't know if you have any specific comment on that or a more general comment on the opportunities for you in the future.

Question: Luca Bacoccoli - Intesa Sanpaolo IMI Securities Corp - Analyst : Okay. Good. So a few questions from my side. The first one is a follow-up on the free cash flow. You said that this year should be above last year's EUR69 million. I was wondering if this target includes Goldenpoint or not? And what should we expect from Goldenpoint on a stand-alone basis in terms of free cash flow generation? The second question is the guidance on the CapEx because it seems that you're still investing, as you explained, on refurbishment of the network. So what is the guidance for the full year for the total CapEx because we were expecting to see a quite sharp drop starting from 2026? The other one is on hedging. If you can provide us an update on the hedging strategy as of today, and based on what you already done, what lower cost should we expect in 2026 through the gross margin?

Question: Luca Orsini Baroni - Orsa SRL - Analyst : On the buyback, what is your target for this year and next? And when are you going to cancel the shares again?

Question: Francesco Brilli - Intermonte SIM SpA - Analyst : Just a follow-up on the gross margin mainly for the next year. So on top of the benefits you just mentioned, and we will see from the hedging on ForEx. What's the scenario? What are you seeing on raw materials and so on the sourcing side? So are you seeing some opportunities and already you already had the possibility to tackle some of these in terms of lower costs of raw materials. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 1:00PM, OVS.MI - Q2 2025 OVS SpA Earnings Call And if there are some lower -- some raw materials, which the price is getting lower and lower. So we will see, excluding ForEx, some additional advantage for the cost of the inventory next year.