OVS S p A : RISULTATI FINANZIARI FY23 Presentazione

FY 2023 Financial results

17 April 2024

A conference call with analysts and investors will take place on the 18th April 2024, at 3:00 pm local time, during which the main results for the financial year ended 31 January 2024 will be presented.

The conference call may be joined by dialing [phone] from Italy, [phone] from the UK and [phone] from the USA.

Disclaimer

This presentation is being provided to you solely for information only and may not be reproduced or redistributed to any other person.

This presentation may contain certain forward-looking statements that reflect the current views of the Company's management with respect to future events and the financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on OVS S.p.A.'s current expectations and projections about future events. Since the latter are subject to risks and uncertainties, actual future results or performances may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are outside the control of OVS S.p.A. or beyond its projection. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as at the date of this presentation.

OVS S.p.A. shall not be under any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.

Any reference to past performance or trends or activities of the OVS S.p.A. shall not be taken as a representation or indication that such performance, trends or activities will continue in the future.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy OVS's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto, or constitute a recommendation regarding the securities of OVS. OVS's securities referred to in this document have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The manager in charge of preparing the corporate accounting documents, Nicola Perin, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the accounting figures, books and records.

This investor presentation contains measures that were not prepared in accordance with IAS/IFRS. The information presented in this document has not been audited.

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FY 2023 Financial results, 17 April 2024

AGENDA

FY 2023 Financial results

Outlook and current trading

Appendix

FY 2023 Financial results

Sales and EBITDA increase, solid cash flow. Dividend proposal of €0.07 per share. Current trading up by 5%.

Net sales

€1,536m

+1.5% vs. 2022

Adjusted EBITDA

€182.2m

+€2.0m vs. 2022

Net cash flow

€64.3m

Adjusted Net debt

€145.5m

vs. €162.0m as of 31 Jan 23

Proposed dividend

€0.07

per share

• Net Sales €1,536m, +1.5% compared to 2022, despite exceptionally unfavorable weather that penalized the apparel market in the initial periods of both seasons;
• Best Q4 ever, with net sales of €433.1m and adjusted EBITDA of €60.7m;
• Adjusted EBITDA €182.2m, 11.9% on net sales. Revenue growth and a gross margin of 57.3% on sales more than offset inflationary pressures on SG&A costs;
• Reported net income €52.4m, up significantly from last year; Adjusted net income €75.9m;
• Net cash flow €64.3m, after significant investments in special projects;
• Adjusted Net debt and leverage ratio continue to improve, reaching €145.5m and 0.80x, respectively;
• Proposal of a dividend distribution of €0.07 per share. Considered together with the Feb 2024 dividends distribution, the dividend yield calculated on current share price is 4.6%.
• Positive current trading, with year-to-date sales growing around 5% compared to the already strong performance recorded in the same period of 2023.
• Buyback plan extension for an additional €20m.

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FY 2023 Financial results, 17 April 2024

FY 2023 Net sales and EBITDA seasonality

Strong Q1 and best Q4 ever resulted in a FY 2023 EBITDA growing vs. last year, despite the exceptionally unfavorable weather in Q2 and Q3

	Q1	Q2	Q3	Q4
			-1.9%		+1.7%
			-3.5%
	+12.2%			425.9 433.1
	405.9 398.4	381.0 367.6
Net sales		336.5
299.9
€m
			-3.2		+4.6
EBITDA	+7.3	62.2	59.0	-6.7	56.0	60.7
				41.8 35.1
€m	20.1	27.5
FY 2022			May-June	Sept-Oct
		exceptionally	extraordinarily	Good holiday
FY 2023	Strong start of	colder than	prolonged	season and
	FY2023	average	summer	robust margin
5 FY 2023 Financial results, 17 April 2024

Full-year

+1.5%
1,535.6	•
1,512.7
	•
+2.0
182.2
180.2

4Q 2023 Net sales €433.1m,

+1.7% compared to the already strong performance in 4Q 2022, thanks to sales growth during the Christmas season;

4Q 2023 EBITDA €60.7m,

+€4.6m compared to 4Q 2022, thanks to the operational leverage in a context of improved sales at increasing gross margin.

FY 2023 Key income statement items

Revenue growth and a gross margin of 57.3% on sales more than offset inflationary pressures on SG&A costs

€m	FY 2023
Adjusted
Net Sales	1,535.6
Gross Margin	879.4
GM%	57.3%
EBITDA	182.2
EBITDA%	11.9%
EBIT	119.1
EBIT%	7.8%
PBT	101.3
Net Income	75.9

FY 2022		Change	Change %
Adjusted		Adjusted	Adjusted

1,512.7	22.8	1.5%
863.9	15.5	1.8%
57.1%			+16ppt
180.2	2.0	1.1%
11.9%			(4ppt)
120.1	(1.0)	(0.8%)
7.9%			(18ppt)
106.1	(4.8)	(4.5%)
78.4	(2.5)	(3.2%)

• Net Sales €1,536m, +1.5% compared to 2022, mainly thanks to the

like-for-like performances of direct stores, despite exceptionally

unfavorable weather;

• Strong growth of women's segment, in particular thanks to the

collections dedicated to young women, as B-Angel brand and beauty

products. Piombo brand continues to perform very well.

• Gross margin at 57.3% on net sales vs 57.1% of 2022, thanks to the

normalization of the product costs started from the second half of

the 2023;

• EBITDA €182.2m, 11.9% on net sales. Revenue growth and an

improved gross margin more than offset inflationary pressures on

SG&A costs;

Adjusted results do not reflect the application of IFRS16 and non recurring items.

• Net income €75.9m. Higher EBITDA and a better tax rate were

counterbalanced by growing depreciation and increasing financial

charges.

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FY 2023 Financial results, 17 April 2024

FY 2023 Sales and EBITDA performance

All brands reported growing results. Slight decline in franchising sales due to some delivery delays in Jan 2024

						Net Sales €m
			Dos&On Line	+1.5%
			Franchising&Marketplace	1,535.6
Aggregated performance		1,512.7
	1,205.8	+2.9%	1,240.3
		306.9	-3.8%	295.2
					FY 2022		FY 2023

	Performance Brandsmainby		+1.3%
		1,125.1	1,140.1
							+1.4%
					345.5	350.3
			FY 2022	FY 2023		FY 2022	FY 2023

EBITDA €m

	+1.1%
180.2	182.2

11.9%	11.9%
FY 2022	FY 2023

+2.3%

149.2152.6

			+1.8%
		34.0	34.6
13.3%	13.4%	9.8%	9.9%
FY 2022	FY 2023	FY 2022	FY 2023

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FY 2023 Financial results, 17 April 2024

31 January 2024 Trade working capital

Significant improvement in trade working capital

€m	31 January 2024							31 January 2023		Change
Trade Receivables	80.1	87.5	(7.4)
Inventory	461.0	477.6	(16.7)
Trade Payables	(405.4)	(414.0)	8.6
Trade Working Capital	135.7	151.1	(15.5)

Trade Working Capital does not reflect the application of IFRS 16 and Trade receivables are net of IFRS 15 provision.

Net Working Capital at 31 January 2024 improved by €15.5m versus last year:

• Net trade receivables: fully absorbed the payment extension granted to our franchisee partners in October following the difficult Q3;
• Inventory reduction is mainly due to good sales in Q4 and to the above-mentioned delays in deliveries;
• Reduction in Trade Payables as the combination of lower debt on goods and increase in payables for services.

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FY 2023 Financial results, 17 April 2024

FY 2023 Capital expenditures

Increase in capex following the constant focus on refurbishing the existing network and investments in special projects that will be completed in 2024, as the new logistics automation systems, which enable optimized goods distribution to each store, and new smart point of sales, designed for a full integration between physical stores and digital systems

New Openings

OVS Refurbishments and in-store projects

IT and Digital Trasformation

Logistic, HQ and other

Total

Capital expenditures FY 2022 - FY 2023, €m

18.4

13.4

30.9

38.1

13.3

18.0

18.2

24.9

OVS Rome

Refurbished store

FY 2022

FY 2023

New point of sales

80.8

94.4

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FY 2023 Financial results, 17 April 2024

FY 2023 Cash flow statement

For the third year in a row the company delivered a Net cash flow above €60m, demonstrating a solid cash generation even in sub-optimal conditions and extraordinary capex

€m		FY 2023		FY 2022

EBITDA Adjusted		182.2		180.2
Non recurring items	(3.6)	(8.1)
Change in Trade Working Capital	15.5	(8.2)
Other changes in Working Capital	(1.2)	2.1
Capex	(94.4)	(80.8)
Operating Cash Flow		98.5		85.2
Financial charges	(16.2)	(13.1)
Taxes & others	(18.0)	(8.0)
Net Cash Flow	64.3	64.1
excluding buyback and dividends

The table shows the adjusted cash flows in order to represent the Group's operating performance net of non- recurring and non-operating events, net of the application of IFRS 16 and reclassifying the liabilities for returns under IFRS 15 among the components of Working Capital.

• Full year cash flow results allows for a better comparison vs. infra-annual closings, absorbing all seasonality-linked fluctuations;
• FY2023 cash generation benefits from the increase in EBITDA and from the reduction of extraordinary items as business returned to normal after the pandemic;
• Very good management of working capital, with €15.5m cash generation despite the bad weather in both season starts;
• Increase in capital expenditures for the peak of the investments in supply chain and digitalization;
• Slightly higher financial charges due to higher interest rates and increase in taxes cash-out (one year time lag after profitability normalization in 2022).

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FY 2023 Financial results, 17 April 2024