OVS SpA Q3 2024 Earnings Call Transcript

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

Question: Francesco Brilli - Intermonte - Analyst : Good evening. Thanks for taking my question. Can you hear me?

Question: Francesco Brilli - Intermonte - Analyst : Sorry. Yeah. Three questions from my side. The first one is on investments and CapEx for the year. I was expecting something -- higher run rate in the nine months. So if you can provide the full amount you think you will land at the end of the year in terms of investments? The second one is on the working capital, also given the EUR30 million stock in transit we saw in the presentation on the inventories. Can we consider the working capital is a normal level at the end of the year and it will be absorbed, or it will be still in the fourth quarter, this effect? And the third question is on M&A. If you can provide some additional indications on the ongoing discussions for that portion of the Conbipel network and then the possibility of adding some stores of those dismissed by Benetton. So if you can provide a rough number in how many stores do you think are worth to be taking into consideration? And in case how much time do you think it will take to put them up and running once you will acquire them? And I was curious also, if you have already an idea on how many revenues could be made out of these stores? Thank you.

Question: Francesco Brilli - Intermonte - Analyst : That's very clear. Thank you very much.

Question: Daniele Alibrandi - Stifel - Analyst : Congrats for the results. I have three questions. My first question is on current trading. Can you remind us the relative importance of the months of December and January for your trading on a normalized basis? Because my impression is that the flattish or slightly positive growth which is embedded in your guidance and consensus is a bit, I'd say, the worst case scenario, but maybe I'm wrong. The second question regards the shares cancellation and also the potential opportunity to restart the buyback later next year or in the coming years. Just wondering if maintaining a portion of the shares in your book is something that is of your interest as you can use it as an exchange paper in a deal or not? Last question is a little bit more high level. Because the group has clearly changed for the better in the last few years, basically has evolved from a pure vertical value apparel retailer to a multi-brand platform. You mentioned to relaunch the, say, overlooked brands. Your positioning now is more clear. You have also the leverage of the financial structure. So I was curious to hear from you, what do you expect for the company in the next 2 years, I'd say? And 2026 from a growth point of view, expansion opportunities and also from a leverage point of view, given the opportunities that you highlighted before? Thanks.

Question: Daniele Alibrandi - Stifel - Analyst : Also, as we are. We are active with -- Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 17, 2024 / 2:00PM, OVS.MI - Q3 2024 OVS SpA Earnings Call

Question: Daniele Alibrandi - Stifel - Analyst : Thank you so much. Just a follow-up. The growth we've seen in Stefanel is this was the case also in Germany? More related to Italy? Thanks.

Question: Daniele Alibrandi - Stifel - Analyst : Okay. Thank you so much. Happy Christmas and keep it up.

Question: Andrea Bonfa - Banca Akros - Analyst : Hello, good afternoon to everybody. Most of my questions have already been answered. Stefano, if I may, I got just some, let's say, curiosity in the sense that as far as the potential for growth into next year, in your ranking, how would you list the main element? Will it be the easier comparison on the first half, which is for sure, the month of May? The consolidation of Goldenpoint or the potential like-for-like growth from all your assortment initiatives, if I can summarize all your efforts in your product range. Thank you very much.

Question: Andrea Bonfa - Banca Akros - Analyst : Thank you very much. And Stefano, if I may. How is Goldenpoint doing? I mean we potentially might be a strong element of growth. So in the first year or, let's say, in 2025, if you consolidate that asset for six months and potentially EUR50 million to EUR60 million sales, will the asset be with a positive EBITDA? Thank you very much.

Question: Andrea Bonfa - Banca Akros - Analyst : Very clear. Thank you very much, again.

Question: Domenico Ghilotti - Equita - Analyst : Good afternoon. I have a question on the cost base. So starting from a review of Q3 numbers or nine months. So what was the underlying trend for the personnel costs, in particular for the gross margin in Q3? And if we look into the Q4, you are suggesting flattish sales and flattish EBITDA. I'm wondering why the additional -- so the cost inflation that we are seeing in Q3 is not translating into Q4. Is this a matter of phasing? And what should we expect also going forward in 2025 in terms of intake price and labor inflation?

Question: Domenico Ghilotti - Equita - Analyst : Okay. And if I may, on the shareholder remuneration, just to have the feeling on what is your preferred capital allocation. If I look at the free cash flow generation between buybacks or resuming the buyback after the cancellation or increasing the dividend payment. So do we have any preference that you can share at the moment?

Question: Domenico Ghilotti - Equita - Analyst : Okay. My last question is just a follow-up on Stefanel. So can you help me or remind me, so what is the size today of the Stefanel, so this year, let's say, or the Stefanel and the level of profitability you are starting in 2024?

Question: Domenico Ghilotti - Equita - Analyst : Okay. Thank you.