Kontoor Brands, Inc. (KTB) Earnings Call Transcript & Summary

All right. Good afternoon to all of those who are joining us here in Oslo. And to those that are on the webcast, good morning, and good evening. Welcome to Helly Hansen's 2026 Investor Day. We are so glad that you're here. My name is Erinn Murphy and I lead finance and operations for Helly and Corporate Investor Relations. I joined Kontoor a few months ago, and some of you have already asked, what were the things that made you join and the answer has been very simple. It is 3 things. It's been about the team, which I know you spent time with this morning. It's the culture, and it's the opportunity. And my hope is that today, you come away with a deeper understanding of all 3 of those things. But before we get going, and as a matter of formality, I need to remind everyone that the following presentation includes forward-looking statements that are based on the information available to Kontoor and subject to risks and uncertainties that could cause actual results to differ materially from the information presented today. In addition, the presentation will reference certain non-GAAP financial measures. Please see Contour's investor website for a full reconciliation of GAAP to non-GAAP financial measures. And unless otherwise stated, the numbers you will see in the presentation today are for the Helly Hansen brand on a stand-alone basis and exclude Musto. So with that out of the way, we've got a full agenda this afternoon. In the first hour, you're going to hear the clear purpose that Helly Hansen fits within the broader Kontoor brands portfolio. Our leaders will then share more about the Helly Pason brand, our DNA and our heritage our product and innovation engine as well as our consumer. Following a brief break, we will discuss the commercial drivers of both the sport as well as the workwear business. And we will wrap our prepared remarks with the levers that underpin our 2030 financial plan. We will then conclude by inviting all of our peers to the stage for a Q&A session. As important as the plan is the team here behind the plan. I know you've had an opportunity to meet everyone in the last couple of days but I am particularly proud to introduce the Helly Hansen leadership team, Borre, Tor and Patrick, who collectively have been here for 60 years. And so for those in the room before we get going, just a reminder to silence your cell phones no applause in between sections. And so at this time, I would like to welcome to the stage, Joe Alkire, Kontoor's President and Chief Financial Officer. Joe?

Well, thank you, Erinn, for that warm introduction. Good afternoon, everybody. Welcome to Norway and what a beautiful day for an Investor Day. Good morning to those of you joining us on the webcast from the U.S., and good evening to our audience in Asia Pacific. Today is a very exciting day for Kontoor Brands and for Helly Hansen. This is a day we've been looking forward to for some time. We're thrilled to be here and to have the opportunity to share with you our long-term strategy and growth plan for the Helly Hansen business over the next 5 years. And what an honor to be able to do so from Oslo, the heartbeat and soul of the Helly brand and its people, a place our Helly colleagues call Paradise and the more time that we've spent here as a Kontoor management team, the more we're beginning to appreciate why. We've got a great agenda for today. And over the next few hours, I believe you'll have a better appreciation for why we have so much confidence in this team here at Helly, the business we're building together and the tremendous growth and value creation opportunity that we have right in front of us. But before we dive in to Helly Hansen, I want to spend a few minutes on Kontoor the enterprise. What's been accomplished over the past several years and the way we see the evolution of our strategy shaping our business moving forward. Kontoor has delivered exceptional outcomes since the spin-off in 2019. We've delivered an annualized total shareholder return of 15%. And over the past 3 years, our total returns have been even stronger at over 20%. We've generated over $1.8 billion of cumulative free cash flow. And we've returned over $1 billion to shareholders through a combination of share repurchases and dividends. And with our planned ASR in the fourth quarter, our capital returns will approximate $1.5 billion. We've significantly improved the profitability of the business. We've delivered 600 basis points of gross margin improvement, 300 basis points of operating margin improvement. And we further improved our return on invested capital to close to 30%, which remains among the highest in our sector. These numbers reflect the operational discipline the execution excellence and the disciplined capital stewardship that have become hallmarks of Kontoor brands. And our performance is something that we're incredibly proud of. In addition to our financial performance, we've evolved the Kontoor portfolio, and we continue to strengthen the business. Over the past several years, we've sold noncore and other underutilized assets. such as the Rock & Republic brand, a portion of our manufacturing operations in Mexico. We announced the acquisition of Helly Hansen and the divestiture of Lee, significantly improving our financial profile and the growth outlook of a more focused portfolio anchored by Wrangler and Helly Hansen. We executed the first iteration of our Project Genius transformation program, delivering more than $100 million of gross annualized savings. We greatly simplified our organizational structure and our operating model to enable faster, more streamlined decision. And we've significantly increased the level of investment behind our business. While much has been accomplished, our work is not done. In fact, we think we're at the beginning of a step change in our growth in TSR algorithm. And with the unveiling of our growth plan for Helly Hansen today, you're going to see a significant piece of our go-forward Mosaic. So where do we go from here? The moves we've made over the past several years have been very deliberate steps to position Kontoor for more accelerated growth and investment and stronger returns moving forward. Our strategy has evolved, and we're building from a position of strength. We're building from the Bedrock foundation that's been established. And the acquisition of Helly Hansen was a key pillar on our journey and a significant piece of our go-forward value creation potential. All right. The guiding principles that fuel our success I'd like to spend a few minutes on this because it's important context for the approach we took to the strategy and provide some insight into the core tenets we hold true as a management team and how they influence the way in which we run the company. The first is our culture. Our culture is a competitive advantage. It's part of our magic. We will go to great lengths to protect it and to preserve it. What we have at Kontoor, what we have at Helly Hansen is not easy to create, and we believe it's something that differentiates us. The importance of the TAM and in category leadership we believe strongly in the addressable markets in which we operate. We've anchored our portfolio around 3 foundational categories: denim, outdoor and workwear. These markets are large, have attractive growth characteristics. And our brands are well positioned to continue to capitalize on growth opportunities within these markets. We believe in the power of a multi-brand portfolio and in the importance of brand strength. This is a model when managed with focus and resource allocation discipline that can deliver superior long-term shareholder returns. And acquisitions in our core categories will play an important role in our long-term strategy. We have an unwavering commitment to becoming a more growth-oriented organization and to our transformation. Our growth and transformation strategy is bold it will require us to move out of our comfort zone and push the boundaries of what's possible, while at the same time, respecting the foundation that's been built and acknowledging that what got us here won't get us to where we want to go. Disciplined capital stewardship. The strength of our balance sheet and our cash flow are competitive advantages. We've put ourselves in an enviable position to play offense when the majority of our industry is on its heels. The cash flow component of our TSR delivery model and the healthy balance between earnings growth and cash flow, capital returns is a differentiator. Talent is a big part of our strategy. Our people are our #1 asset. We're committed to elevating our talent, developing our talent and empowering our talent. Our people will drive and enable the success of our strategy. And lastly, operating with transparency. This is part of our culture. We operate with a high degree of transparency and integrity. That's both within our organization as well as the institutions we partner with outside of our organization, including our investors. We've earned credibility for consistent execution and maintaining a high say-do ratio, which in turn leads to a high degree of trust in our leadership team. As part of our growth acceleration and transformation, we've defined a new North Star for Kontoor brands. Our iconic brands are woven together by a deep authority in the denim, outdoor and workwear categories. We empower consumers to pursue their passions with confidence and authenticity through innovative design, exceptional products and compelling performance. These words were chosen very carefully. And by 2030, we aspire to be recognized not only for our financial performance, and our operational excellence. But for category leadership with inspiring products, compelling consumer experiences and world-class capabilities. We have sharpened our portfolio focused around 3 core categories: denim, outdoor and workwear. Each is large, growing and supported by tailwinds such as casualization, Western outdoor lifestyle and cultural relevancy driving denim. Increased skilled trade participation and safety requirements driving workwear. And the continued shift to more active lifestyles and wellness driving outdoor. We are planting our flag in categories where our brands are authentic, have deep authority and have earned the credibility and a differentiated right to win. We're also being more prescriptive about the role each of our brands play within our portfolio, and each of our brands have a distinct role to play in the future of Kontoor. Helly Hansen is our growth engine. The mandate is clear, expand aggressively in the U.S., in the Alps, grow in technical outdoor and workwear, 2 categories where we have massive opportunity relative to where we are today. Double-digit revenue growth, significant revenue or gross margin and operating margin expansion supported by increased investment. Wrangler is our balanced grower. The mandate is also clear: protect and build upon the core business, and accelerate growth in women's, DTC and adjacent non-denim categories, mid-single-digit revenue growth, gross margin expansion, increased brand investment and strong and durable cash generation. A focused multi-brand portfolio managed with resource allocation discipline can deliver superior long-term shareholder value. When we're clear about what each brand stands for, invest where we have a differentiated right to win and build shared enterprise capabilities that make brands better by being part of the same company. Kontoor brings deep expertise and platform capabilities as a more synergistic brand owner of Helly Hansen. Kontoor's deep expertise and capability set at scale, are key enablers of a more efficient growth model for Helly Hansen moving forward. This is one of the reasons this acquisition was so compelling. Kontoor's capability set, and we've highlighted a representative set here. These capabilities were immediate unlocks for the Helly business. And these capabilities not only benefit Helly Hansen, but position Kontoor as a more advantaged acquirer of additional assets in the future. All right. The growth strategy you're going to see from the Helly team today is focused, and it's anchored on 3 key pillars: Supercharge, the U.S., a large and highly attractive market with significant headroom for growth, expand in technical outdoor, including trail running, hiking, backpacking and climbing and power the workwear category globally. Technical outdoor and workwear are 2 key aspects of our business where we have massive opportunity have earned credibility and a differentiated right to win. These 3 initiatives account for the overwhelming majority of the growth in our 5-year plan. We expect our plan to deliver strong financial results. We expect revenue to grow to over $1.1 billion over the next 5 years, reflecting a 10% CAGR with even stronger growth in 2028 and beyond as the benefits of our early investments begin to scale. We will drive operating profit to approximately $165 million. Reflecting a mid-teen operating margin driven by significant gross margin expansion, operational discipline and increased brand investment. We also expect Helly Hansen to contribute over $500 million of cumulative cash from operations, supporting our balanced TSR delivery and capital allocation optionality. Our plan is not only financially attractive, but we believe it's one of the most exciting growth stories in all of consumer. So with that overview, it is now my pleasure to introduce the global head of Helly Hansen, Borre Hegbom. Borre is a former Norwegian professional skier and athlete. He's been with the brand for more than 20 years and has been a critical part of the brand's growth and success during that time period. He's also the first Norwegian leader of the brand in decades. Borre's leadership through the acquisition of Helly has been exceptional. He's been a strong partner to me in the broader Kontoor organization, and this is something that was evident since the first day we met it. Borre's tenacity, his passion and his commitment are unmatched. We have an incredible amount of confidence in Borre's leadership and there is no better person to honor the legacy of Helly and be a steward of the brand into the future. Borre?

Thank you. Thank you, Joe. Thank you a lot. That was a nice introduction, wasn't it? It's going to trigger some salary discussions, I can tell you. Okay. Yes, like Joe said, I'm Borre. I've been in the company for 22 years. Before that, I was 8 years in Nike. So I guess you can call me a veteran, I'd probably look like that, too. So I had the pressure of leading Scandinavia first. And then I did Europe and the last 10 years, I've done sport globally, both wholesale and D2C. What I'm going to do now, I'm going to introduce you to the brand, a little bit where we are today and where we're going forward. And I'm coming back another time later today. So let's jump into it. Helly Hansen is a Norwegian brand born and raised here in Norway, founded by a sea captain who was tired of being wet. What he did was that he made his own waterproof jacket that started to sell. That's how it all started. Next year, we're celebrating 150 years. We are one of the very few brands that has more than 100 years. We're one of the oldest brands in this industry today. And we've been here now for 150 years. Our mission is very simple. We make professional grade gear to help people stay and feel a lot. You're going to hear professionals during the whole day today. We have 150 years of innovation. The reason why Helly Hansen has been so successful over the years is 3 things: product, innovation, and Scandinavian design. That is something to remember Scandinavian design. And that will remain core to who we are going forward too. We will not drop the ball on product. The company has a long history of innovation, as I said. We were the first brand launching the synthetic midlayer and we -- in the 60s, and we came with the first synthetic base layer in the 70s. Tor, my colleague, is going to come back and talk more about the innovation and product later. What's unique with Helly Hansen and separates us from the competition is where we play. Most other brands have been on the South Pole, North Pole and Mont Everest, so have we. But we are one of the very few brands operating on the toughest conditions in the world, the ocean. It's a completely different ball game. It's not rain and snow. That is the problem. It's waves of saltwater coming over you. So we make one of the most advanced products in this industry today. My point is if we can keep these guys protected and dry, we can keep the end consumer dry anywhere. We are trusted by professionals. We work with athletes fishermen, search and rescue companies, Mountain guides, yes, you name them. We have a long-standing partnership as an example with a lot of ski resorts around the world. The products they have, you can't find in a store or online. They are customized for their needs. The jacket, the blue jacket that you see over there, that's for the Norwegian Alpine team this year. That jacket specifically is designed and developed together with the athletes of the team. That's how we work with the professionals. Culture. There is a reason why I've been in this company for 22 years. It's a good place to be. We have a very unique culture in Helly. We're very passionate. We're open. We're honest, result-oriented, we are winning, and we're having a lot of fun. I think it's very important when you go to work, it has to be fun to go to work. I've had the pleasure of working with colleagues in this company that has built this -- the revenue 10x since we started, more than 10 times. Today, there's around 250 people in the company that has been here more than 10 years. I think that's -- that is something that we are proud of and it's very unique. So where did we end 2025? We ended at USD 675 million. We doubled the business since 2016. 25% of the total business is D2C. We have 1,300 employees around the world. We operate in 50 countries, and we have 115 brand stores around the world. That is very important to note, ex China, which I'm going to come back to. We have scaled the Helly Hansen brand over multiple owners. The majority of the owners that I have worked under has been private equity companies, owners with a limited approach to investments. Despite that, we have managed to grow this business high single digits over the last 17 years. And this is an important slide that you need to remember. What is different on the Kontoor? They understand this business. We speak the same language. They can really help us in the U.S. marketplace, they are U.S. experts. We will have access to Kontoor's multi-brand platform. That is a big upside for us, and they understand that we need to invest to accelerate growth. This is truly -- and this is honest, I've been here for 22 years. This is truly a game changer of Helly Hansen and the people in this company. It's a new world for us. So one of the first things that we're doing under Kontoor, we are separating workwear and sport into 2 distinct organizations. Today, sport represents 75% of the revenue. Workwear represents 25% of the revenue. We have separated Workwear and Sport in Scandinavia more than 10 years ago. The revenue is equally the same. It shows the potential of Workwear. So pay attention to Workwear here. We're going to go from a specialist European brand in ski sale and Workwear over to a leading premium technical brand globally. Three things to remember after today, we're going to go more into details on this. But one, we're going to supercharge U.S., 60% of the growth will come from the U.S. Two, we will be in an outdoor. Keep in mind also, we have a very strong position today in ski and sailing. And with the separation of Sport and Workwear, we will power Workwear and give power -- give Workwear, the resources they need to grow the business. With that, I'm handing over to a guy who has just been for 21 years. been managing product for a long time, done a great job. And here is to Jenssen. Welcome. Thank you very much.

Thank you, Borre.

There you go.

Hello, everybody. Like Borre said, my name is Tor Jenssen. I'm heading up product merchandising at Helly Hansen. I've also only been here for 21 years. And who knows what I did that first year, but I can tell you the last 21 years have been quite a journey. When I started, I thought it was a category manager for sailing. Business back then was about $6 million. I quickly took it down to around $3 million. But since then, we've grown that business more than 30x like 30 types. So like I said, quite a journey. Today, I'd like to talk a little bit more about our long history of innovation, how we have a professional-driven innovation engine and also how we have a playbook for entering technical categories. But first, Allow me to just take a step back and anchor this on our long history and also our brand platform. Our purpose is to connect people and the power of nature. The outdoors is really our cames. That's where we work, that's where we play, that's where we spend our time, and that's where we charge our batteries. We get up every morning with a mission to create professional grade gear to help people stay alive in harsh conditions and help people stay alive in hard conditions and feel alive and safe in the outdoors. In this work, we are guided by our values. And of course, quality is one of the most important values we have. Meeting consumer expectations with quality product is really the foundation for our company. Another important value for us is responsibility. Being a Scandinavian brand coming from Scandinavia, being responsible is reflected in everything we do, also in our product. And as you have probably already noticed, we are passionate. We are very passionate about this brand, our product, our teams being part of Kontoor and also passionate about our future opportunities. I think you've already seen this both in the team, also from Kontoor management, and I hope you will see this in the rest of our discussions. Another thing we are very, very passionate about is innovation. This is the most important value for this company and this brand. And it's also one of the most important things for our future success. This brand has a long legacy of innovation and being at the forefront in our industry. If you go back to 1878, that's the first year of this company, this company won an award for product excellence at the World Trade Fair in Paris. So since then, innovation has been in our blood and propelling us forward. Ever since launching the first water roof jacket in 1877, later launching more waterproof technologies, and then we launched the world's first synthetic mid-layer, the pile fleece. Some years later, we launched the first synthetic base layer, the LIFA base layer. We actually started the technical base layer category by launching these products. Some years later, we launched the waterproof breathable technology, Helly Tech. That was the basis for introducing the 3-layer system, meaning you dress with a base layer next to skin for moisture management, you have a synthetic midlayer as insulation, and you have a protective waterproof breathable layer on the outside. This system has later been copied by most brands, but we did it first. Another aspect, not to be underestimated is how we use visually distinct and differentiated designs. Our design language is really rooted delay in our Scandinavian heritage. The bold color stories, the bright colors is what you can find in the Scandinavian outdoors. This is also a very important safety feature because you have to be visible when the weather suddenly turns bath and the weather in this part of the world can turn back really quickly, I can tell you. We also take inspiration from Workwear, from professionals and add more visible elements like Hi-Vis hoods, shoulders, detailing just to make sure you are as visible as possible when you are in the outdoors. For these reasons, we are continuously being recognized for innovation in our sport in our industry. Sorry. We have an amazing group of talented people working in this company. And every year, every team, every category is bringing out new products with new technologies, new constructions or new materials and these products go on to win awards. Here are some examples of the awards we've been winning lately. Lately, we've also seen worker receiving the same kind of recognition for their work on innovation and products. This is not luck. This is something we do repeatedly and successfully. Why can I say this with such confidence? Well, we have 3 big sources for our innovation. The 1 -- the first and the most obvious one, of course, is consumer insights. We've always been a consumer-centric company. You will hear later from Erinn, my colleague on just how well we know our markets and our consumer. Another very important innovation source for us is our long-standing relationships we have with suppliers and manufacturers. Combining our consumer insights with manufacturing capabilities and new materials, has allowed us to design, develop and launch a lot of world firsts to the market together with that. But the one thing that really sets Helly apart on innovation is how we work with professionals. If you look at sport, we play in a lot of different technical categories. If you look at Workwear, you will see the same. We work in highly technical categories. When you put this together, you can see that we are an expert in sport, we're an expert in Workwear, and we play in both of these categories. And in the middle sits what we call professionals. At the intersection of sports and Workwear, we have professionals. These are the people that don't get to choose their day. They have to go out there, whatever the weather, whatever the situation. These are the PROs. Like mentioned, they are search and rescue. They are skiers, they're ski petrol, they're coast guard, sometimes their athletes and we work very closely with this group of people. We have a separate team that is only dedicated to servicing these professionals with unique products, dedicated designed to their needs. On a global basis, we have more than 55,000 professionals that go to work every year in our uniforms and this is not including Workwear. This we believe it's a strategic and defendable advantage to Helly Hansen. The professionals are our most valued source of innovation, of testing and validating our products and concepts before we launch to consumers. Let me give you some quick examples. Like Borre mentioned, we work very closely with the Norwegians key team. When they rase, they use a race suit. But everything they do in between, they need warm comfort and protection. So we sat down with them and developed a jacket and a pant, and that's outfit in the light blue, you can see next to the screen over there. They needed specific details, a lot of extra features, and you would also be surprised that how important good looks are to them. We sat down with them, work for a long time and the end result is this outfit. It ended up winning a lot of awards and also turned into a commercial winner. Another example is how we work with ski resorts. We work very closely with Ski patrol. And what we found out is that their needs is very similar to the needs of free ride skiers. So on ski petrol, you would be surprised. This is a small thing, but to them is really important. You'd be surprised at how many pockets they need for a full day on the mountain. They need because for their own gloves, maybe a radio, some food, for someone else's gloves, maybe some more food. These learnings are something we have put into our in-line collections. That is partly one of the reasons we've been successful. In sailing, we work with a lot of the best ocean racers in the world. Like Borre said, that's the harshest conditions you can have. like there are tons of water coming over the boat. We are building products, technical products for them that are unique to their needs. They need double costs for extra protection against water. They need a higher color they need a face wiser. They need a more advanced hood. They need fully waterproof pockets for safe storage and they also need a high visibility hood and reflective elements for safety if they fall in the water. These bombproof designs are very different from a ski or a mountain jacket. And even from other selling products like for Americas Cup, they will need something that is highly breathable, flexible and aerodynamic just as an example to how different the needs of these professionals can be. Over the last decade, we've started working with Mountain guides and search and rescue. Here, we are taking the exact same approach as we have done in ski and selling. We're building technical products to the specifications of professionals and then we're doing testing, testing and testing making sure the product concepts are trusted by professionals before we launch it to consumers. So why are we trusted by professionals? Well, we are very proud to say that we're trusted professionals and there's a lot of different reasons why. One of the most important reasons is that we have proven technologies that gives us a competitive edge. We also have quite a few unique to Helly Hansen Technologies. One of those technologies is Helly Tech. This is our waterproof, breath and windproof technology. This technology has been developed over the last 40 years and refined and refined and refined. It is a system that enables us to design and construct really waterproof products for ocean racing highly breathable products for the mountains or highly flexible products for athletes. With Helly Tech, we can basically design to the use case. And this is one of the key learnings from working with professionals. There is no one technology to solve all problems. Another key technology to Helly Hansen is LIFA. LIFA is the warmest, driest and lightest fiber you can find out there, but it's also very, very hard to work with because of its low melting point. This is something Helly Hansen has mastered over the last 50 years. It's also a very good example of how we scale technologies to more use cases. What really started as a next to skin-based layer has later been developed to be found in a wide range of product types and different use occasions. Our latest LIFA innovations include introducing LIFA into insulation making it warmer and lighter than anything else we have in the collection. We've also been putting it into membranes and out the fabric using the unique properties of the fiber for water shedding and creating waterproof breathable membranes without the use of chemical treatments. You can expect to see more innovation coming in this area. Today, we play in multiple categories. And this is an important point for me to make. We are not a cross-category generalists. We are a multi-category specialist. So what does this mean Well, in all of these technical categories, as you know, we go up against other specialist brands. Still, we are the #1 technical sailing brand in the world. We are a leader in winter sport and ski in North America. We're a leader in Workwear in Europe and we're trusted by professionals all around the world. With our existing playbook from ski and selling, working with professionals, creating consumer-centric collections, aligning our resources with our strategic priorities, storytelling through the lens of professionals and continuous innovation we are very, very confident that we will win in Technical Outdoor and e-worker. Our success has been anchored in careful category management. First, building for professionals, then extending in a good, better, best approach ending up for the full range of commercial products. This is exactly what we did in selling. First, we designed and developed the Ægir collection with input from professionals. From the same professionals, we got a lot of input for a midlayer jacket. This jacket later turn into our best-selling franchise, the Crew jacket. It meets and exceeds the needs of ordinary sailors, and it still brings a lot of the same technical aspects and technology you find in the Ægir collection. This is the exact same model we are currently running in outdoor. At the Pinnacle end, you have the olding concept for mountain guides and search and rescue. Beneath it sits Verglas. This is targeting the nonprofessional hikers and this is the assortment we expect to grow and expand our pressing in the hiking business. This is the model. We always build first for professionals extend that credibility to reach more consumers and meet more needs. In the near term, our growth will be driven by scaling what works, building awareness and distribution for the categories that are already strongest. For the first part of the plan, that's where we expect to see the growth. This is commercial work, putting more excellent products in front of more consumers in new markets. At the same time, we are investing in technical outdoor to broaden the assortment and extend our technical credibility. These products have longer development cycles. So this opportunity will build over time as we launch more and more products. In our plan, we expect Technical Outdoor to be the biggest growth driver in the last half of the plan. So let me finish where I started. We have a long history of innovation, and we're being recognized for that. We have a professional-driven innovation engine that I believe is truly unique. We have a proven playbook of how to enter these technical categories and expanding the business. If you add the operating platform from Kontoor, we can remove the typical hurdles to quick acceleration. And if you add significant investments in brand, product, people and marketing at levels we at Helly Hansen have never seen before. We are very, very confident that we will win in technical Outdoor and work. And with that, I want to say thank you for listening, and I want to hand it over to my colleague, Erinn, who's going to teach you more about our consumers and our products -- sorry, about our consumers and our markets.

Great. Thank you, Tor. And for those just tuning in online, I'm Erinn Murphy, and I'd love to spend the next 10 minutes grounding us in 3 key areas. First, where we play today across both sides of our business; second, what we have learned about our consumer that gives us the right to win. And finally, how we have used these consumer insights in the foundation of our plan. So as Joe mentioned, we play across 2 large addressable markets. The outdoor market is over $300 billion, but we are myopically and specifically focused on the premium segment that sits just north of $60 billion. And within Workwear, the $85 billion global market we are focusing on disrupting the North American business and scaling the European segment. So stepping into the technical outdoor market, there are several structural tailwinds that are fueling this market. First, this is a category that is steeped with innovation, has premium pricing, and we expect premium margins over time. Second, it's an activity-based market. You are seeing the rising tide of participation in several outdoor activities, whether it's hiking or rock climbing or trail running. These activities are becoming a global movement and ultimately create a sticky and recurring consumer base. Third, this is the fastest-growing part of the market and is projected to grow at a compounded annual growth rate of 6% and each and every year through 2030. And finally, this is a segment that allows us to extend the wearing occasions gear around and create deeper relationships with our consumers. Our team has done extensive consumer research here in Europe as well as in the United States. And I'd like to share a little bit more about who our consumer is. We have recruited a highly engaged active consumer, 20% of Helly Hansen core consumer have discovered our brand through a professional. And as you just heard from Tor, we work with 55,000 professionals year in and year out. We also have a performance-driven consumer. In fact, the top purchasing criteria for our consumer is technical performance. Not surprisingly, our consumer is an enthusiast they ski an average of 16 plus days a year. And finally, they are already active year-round. 75% of our core consumer participate in at least technical outdoor activities. What you're going to hear throughout the day is that we are supercharging the U.S. And so I wanted to share a little bit more about who our consumer is within the United States. Our consumer leans mail, but we have amassed a healthy portion of females as well. 73% of our consumer sits under the age of 43 and they are high category spenders. On average, they spend $1,500 in the winter sport category on a 2-year basis. But beyond who they are, we wanted to better understand what drives their purchase decisions. and we surveyed U.S. winter sport consumers who had purchased in the category over the last 24 months. And what we learned and what you will see here is that there are 4 top attributes that these consumers care most about when purchasing in the category. It's technical performance, being a trusted brand, warmth and weather protection. And what you're going to see on the next series of slides illustrates how consumers of these leading outdoor brands, which we denote as A through D, along the bottom, how they rate individual brand performance across each of these 4 attributes. So this is how consumers of brand A, Rate Brand A, against these purchase criteria. This is how consumers of Brand B rate Brand B against the same criteria. This is how consumers have brand fee, rate brand C. And this is how consumers of Brand D, rate Brand D. We also asked Helly Hansen consumers create us against the same criteria. Our consumers rate us the highest across technical performance as a trusted brand and in the warmth category. And so the bottom line to us is clear. While our brand is smaller than many of these multibillion-dollar brands. Our consumers already give us disproportionate credit in the most important purchase drivers in the category, and this is our right to win. So that brings us to what we believe is one of the most compelling parts of the opportunity ahead. We have an opportunity to drive deeper brand awareness and bring more consumers into the top of the funnel. Today, our aided awareness sits at roughly 30% in the U.S. which is well below that of leading global peers in the same category. And in fact, when you look at unaided awareness, we sit at just 3%. So how are we going to scale? In the first part of our 5-year plan, we will accelerate growth by reaching new consumers within our core category. This is where we have a stronghold today and deep consumer credibility and yet, we are just scratching the surface. We will also grow through expanding share of wallet for our existing consumers as we play deeper within Technical outdoor. As I mentioned, our core consumer is already active and participate in several outdoor activities. 5% of our core consumer are already hikers and over 50% are trail runners. Our consumer is telling us we have permission to extend into these categories and create that deeper long-term relationship with them. And what you will see on this slide is the opportunity gets so much larger as we expand. There are 2.5x more hikers in the U.S. than there are winter sport participants. So I'd like to shift gears and talk a little bit more about the Workwear market. I know everyone here got to see the work for showroom today, which was very exciting. But the category, as I mentioned, is an $85 billion category, and we are focused on the North American and the European parts of that and is projected to grow at 6% over the next 5 years. We have already built credit in the harshest climate in the world, which is here in the Nordics. And equally as exciting as the tailwinds powering outdoor are the tailwinds powering the Workwear market. We all read the same headlines, but this is an industry, particularly in the U.S. that is being reimagined each and every day. The cost of higher education is driving more and more consumers to choose an alternate path away from university. As a result, you're seeing multiyear wait lists at trade and vocational programs. and the construction sector is booming. So our opportunity is to lean into these tailwinds and further disrupt the market, particularly in the U.S. And when you look at the U.S. consumer base for Workwear, it sits at 35 million consumers, and we are but a spec of that base. So before we take a brief break, I'd like to close my section on how we plan to get after this opportunity. Our 5-year plan intends to double the marketing spend through 2030 but as important as the dollars that we are putting behind this plan are how we plan to deploy those dollars. So we are moving from what has been more of a performance-led marketing approach to a brand-led marketing approach. Prior to Kontoor's ownership of Helly, on average, we spend about 70% of our marketing dollars on performance, and we are flipping that paradigm. We're also moving more from a fragmented approach across multiple categories and multiple products towards a category-specific storytelling approach. And finally, we're moving from what has been a centralized marketing team to distinct sport and Workwear marketing teams. So to wrap up, we have a passionate base of consumers. They're active. They're big spenders in the category, and they're outdoor enthusiasts. The Helly brand has already created deep credibility in consumer trust. We also expect to grow from recruiting new consumers in our core category and extending the wallet share of existing consumers as we go deeper into technical outdoor and we intend to build brand awareness as we double marketing and more tactfully deploy those marketing dollars. And so I'd like to thank you all for your attention. We are going to take a brief break but for those on the webcast, please be back in about 10 minutes. Thank you. [Break]

Hello again. I'm back. I need to do it twice. It's hard to remember all these slides, but trying to do my best. In this section, I will talk more about the sport business and a little bit of deeper into the U.S. After me, Patrik is going to come and talk about Workwear. He's going to go a little bit deeper into the details that I'm doing here right now. So -- but for you to understand the Workwear business a little bit better. So let's start with sport. Today, sport is 75% of the company's revenue, Helly's revenue. Back in 2015, we did a reset of the strategy. We focused. We focused on 2 categories, ski and sailing. We focused in 5 countries: U.S., Canada, U.K., Norway and Sweden. Since then, we have more than doubled the sports business. This strategy worked. Keep also in mind that in 2022, we exited Russia. At the time, when we exited Russia, we had 49 brand stores in Russia and a solid wholesale business. The revenue was approximately USD 40 million and very profitable. So it was a big one for us. This gives you a flavor of our global footprint in sport. 30% of the revenue today is the U.S. Rest of the world represents 70%. Majority of the 70% is in Europe. We operate, like I said, in 50 countries today, 22, we do operate directly. The rest are distributors, mainly in Asia and South Africa, Australia, et cetera. The plan is to grow U.S. deposits. I've been overseeing the U.S. business over the last 10 years from this building. Now we're hiring a dedicated GM that knows this market inside out in the U.S. marketplace. That's a big difference for us. His name -- he is here today. C.J. King, welcome to the family. You will love it here. So a little bit more about the U.S. The U.S. business today is USD 150 million. It's already our largest and fastest-growing country. Keep also in mind, and this is important that you pay attention to. We are already one of the most successful European outdoor brands in the U.S. marketplace. That said, we are relatively small versus the big guys in the U.S. That is something that we now are going after. We have a very healthy bench channel mix in the U.S. 55% of the business today is wholesale and 45% is D2C. Very important to note again, we're not planning to change that balance. We expect both wholesale and D2C to continue to grow. Over the last 10 years since we did a reset, we focused on growing the specialty business in the U.S. We will continue to build and protect that business. But we need to start accelerating the key account business, too. Like Erinn mentioned, to be successful with the key accounts in the U.S., we need to increase brand awareness. That is something that we're starting already this fall. We are already in many of the key accounts in the U.S. today, but in limited number of doors. The plan is to increase the number of doors going forward to 25% to 35% penetration. The intention is not to be in all doors but to be in the right doors. We're planning to build the e-commerce business. We plan to double business by 2030. We will elevate hellyhansen.com as a premium full price destination. That job, we started already end of '25. We will build a seamless omnichannel experience, and we'll deepen capabilities to drive retention, loyalty and customer lifetime value. E-commerce is very important for us the U.S. marketplace and is already our biggest region in terms of e-commerce. Like I said, e-commerce is already driving stronger quality of sales. We established basically protected our core franchises like the Cruiser that you guys have seen here and Alfelia and Alfa series, less discounts on them. And so we have seen an increase in AUR by 12% year-to-date. Retail, we will -- we have today 12 retail stores in the U.S. marketplace, mainly located in ski and sailing location. The plan is not to roll out a ton of stores in the U.S., but to roll out a handful amount of stores in the right locations. So to sum it up in the U.S., we expect 45% to 50% of the growth to come from wholesale and 50% to 55% to come from D2C. But there is a world outside the U.S., too. That's important to remember. What I said 70% of the business today is outside the U.S. and then mainly Europe. We see big opportunities in Europe, too, and especially in the ALPs since we are so strong, especially in the ski category. So why are we focusing on the ALPs? It's Europe's largest outer market with a poor season opportunity that fits us perfectly well. It's already the largest ski market in Europe and we have a very strong position in Ski. Germany, as an example, is today our biggest country in terms of e-commerce. And to confirm that we just started these investments, we just opened up a flagship store in Munich a month ago. So that work has already started. Then China. China is an interesting one. I'm always getting impressed when I'm down there, learning a lot. It goes fast. We -- the business in China is already very impressive. We have a premium position down there -- sorry, this was wrong. We entered the market through a 50-50 JV with a strong local partner called Youngor. They have a strong expertise in the China marketplace. We ended the market actually via the sailing category. Now we're starting up with outdoor and we're launching footwear Summer '27. We have a premium position in China. It's priced 30% to 40% higher than here in Europe, mainly because they use more expensive fabrics. The business started to take off in '23. In 2025, we ended those to 90 doors and a revenue of around USD 100 million. First half, we have delivered 80% growth this year. The plan is to open up another 40 stores this year, and we are on track doing that. It goes fast down there. So to sum it up on sport before I hand it over to Patrik. We already have a very strong position today and especially in ski and sailing. Now it's time to bring it to the next level. There is still a significant growth potential, both in Europe and U.S. in ski and sailing and also to accelerate the outdoor business. The growth, like I said, will be driven by wholesale and D2C and we expect all markets and regions to continue to grow, but we expect U.S. and the ALPs to grow faster. With that, I'm going to hand it over to a legend in the Workwear industry. He has built this business -- Workwear business from $25 million to $175 million. So it's impressive what he has done with his keen [indiscernible] bring on Patrik and welcome to the stage.

Thanks, Borre. Thanks for the nice introduction.

Yes. Good luck.

Thank you I'm Patrik Falkenby, and I'm heading up the great, great Helly Hansen Workwear division and have done so the latest 17 years. I actually signed up for 5 years. And now it's 17. So you can all understand that it has been a great and enjoyable journey. Part of the Joy has obviously been to 7 double turnover since done. So the last 17 years with Helly, but actually this year, I have been in the Workwear business for 40 years, believe it or not. 40 years since 1986. And I can already now tell you, Workwear is a fantastic business to be in. The development of Workwear since I started is almost like going from a T Ford to a Formula One car, I think maybe some of you in the showroom before. So some of the Formula One cars. Since I started, it has been this great development. And I always say to my colleagues and to my friends, worker might not be as sexy in the lack of a better word as Sport or fashion, but it is a financially very sexy business, and we all like that. So you heard what Borre said before. Everything started with Workwear back in 1877. And this gives us this great heritage that almost no other brand can claim. That heritage creates authenticity. Authenticity, all brands want authenticity. We already have it. And again, authenticity builds credibility. And that credibility gives us the undisputable right to participate in all the categories we are present in, and then most obviously Workwear. So we are participating in this large growing worker market, lobby. And as Erin mentioned, the addressable market is $85 billion. Only looking at both America and Europe, it's $40 billion. So it's a huge market where today have a tiny market share. So we have just scratched the surface. There is a massive headroom for us to grow. And the Workwear market, as Erinn also mentioned, is predicted to have a 6% CAGR through 2030. The good thing here is that there is a growing demand for high-performance Workwear, and we are sitting in the premium sector of this market. The premium sector is growing faster than the entry part of the market. So it is the right place to be. We could actually have grown a lot faster if we wanted to tap into that entry part of the market, but we have been unwilling to compromise the premium brand positioning. So as I mentioned, as I've been in this business for a long time, and I realize that a lot of you people here and people in general don't walk around thinking about Workwear every day. I guess, but I have done that every day, the latest 40 years. So I would like to share with you some of my experience some of my insights and some of my accumulated conclusions in the Workwear business. So first of all, it is a very, very consistent business. We won't wake up one day and Workwear is out of style. Nobody wants Workwear. That won't happen. It's up to us to develop what the end users and companies needs at all times. So in that sense, we can control our own destiny. It is a recurring high -- recurring business with high order volumes. That means that we can get in an order from any country in Europe today for GBP 100, GBP 3,000 or GBP 5,000 and they expect us to deliver that within 1 week. So it is a high demand on quick deliveries at this and [ ASAP ] business. The Workwear market, as I said, is very consistent and we are here in control of our own destiny, and customer doesn't want to wait if they need the product, they need it now. I mean, how often do you see a worker at work without pants. That doesn't happen that often, right? And if you see a worker without pants, they are probably in a very special industry. I'm thinking about swimming teachers and lifeguards and et cetera. We have very long product life cycles. They are between 5 to 10 years, sometimes even longer. And that gives the stability in the assortment, and we also have a very stable color pallet which is an advantage. And we will most likely never have that the color of the season in Workwear is purple. We introduced between 5% and 10% novelty per year, which means that plus 90% are carryovers. And actually, our customers doesn't want us to change too often. If it works, it works and they will keep it for a long time. Lastly, we have a year-round demand with limited seasonality. It's almost 50-50 across the year, first half, second half. We also have some structurally great category dynamics. In Workwear, there is a very, very high brand loyalty both as an end user, but also as a company or employer, if you like. If the end user is satisfied with our product and service, they can actually be brand loyal for all of their working life. I guess that is kind of a man thing, but still it's the truth. And if the company is satisfied with our products, they doesn't want to change either because switching brand in the company creates often creates a lot of noise, and they don't want to have that noise. They want to be able to focus on their core business. So if you can win them, you will keep them for a long time. There is also an increasing safety focus in the world, as we all know. If you go in and look at big companies websites, you can clearly see 0 excellent policies. They state that safety goes before even productivity and 0 fatality programs and more. Safety is in focus. And the industry is getting more and more regulated towards different standards which allows us to sell more premium regulated certified products at higher price points. Safety is priceless. And I guess that is one of the reasons why we, since plus 10 years back to a significant business with the mining industry in Chile. For them, they want to maximize the safety for the workers and they buy the best Workwear and most safe Workwear as an insurance, if something happens. In Workwear, there is also for obvious reasons, a high wear and tear rate on both Workwear and safety footwear due to have usage, of course. This gives us a very high purchasing value per end user per year. And they also will need to repurchase frequently. And that is a big advantage for us as well compared with many other businesses. I would like to spend a couple of words about some different types of customers that we have. We have employers, individual buyers and wholesale customers. So let's start with employers. In Europe, it's very common that the employer is the buyer. And that is a big advantage because the purchase decision for that company is most often taken by one person or a small group. And if you manage to convince that one person that Helly Hansen Workwear is value for money, then that person can buy for 100, 1,000 or even plus 10,000 users. So you get that lever. In my former company, I did contracts like this with companies with plus 30,000 users. So that is a great advantage. As you know, in many other consumer businesses, there is one person taking the purchasing decision for themselves, buying 1 or 2 units. We have that as well, of course. We have those individual buyers going into a physical store or to an e-com site, buying for themselves. And by the way, the e-comm channel will be a very, very important channel for us going forward. And of course, even more so in the U.S., where there is a lot of contracting, and it's not that common that the employer is the buyer. That might change over time. And from consumer research, we can see that 87% of our existing Helly Hansen worker users have a repeat purchase intent which means that they are satisfied with our product. The third type is not consumers, but dealers. These are our wholesale customers and we sell and distribute through their stores. For them, it's, of course, really important that we provide them with attractive products that they can sell through. And it's also very important that we have a very structured and simple to understand product offering, and I will come back to that. Lastly, we have tenders going back to employers again. That is a business within the business. Very large companies with plus 10,000 users, you often get through tenders. And we have just started to build up in-house tender department within Helly Hansen Workwear, and I have big expectations on what they can achieve. This will, of course, then allow us to participate in tenders directly with big end users, but also via our existing key accounts with our facilitation. Just to give you a picture of the potential in tenders. A couple of years ago, we participated in a tender called the Nordic Combat uniform. The total value of debt tender was USD 2.8 billion, one tender, USD 2.8 billion. So that shows a little bit the potential of tenders and building up an in-house tender department. We have this great opportunity to capitalize on this growing and maturing market and being in this industry for so long time, I have been traveling around in almost all countries. And I've noticed that the maturity level in the different countries and regions are very, very different. The Nordics is the most mature market followed by Europe and then -- and Canada, of course, almost a little bit the same as Europe, then Eastern Europe, U.S. and rest of the world. All regions are maturing. But I have not still been in one country where the development is going in the opposite direction that they are requesting lower quality less functionality. They don't care about comfort and fit. It's no regulation. That has not happened. So all the regions and markets are maturing in the same direction, but in different speed. So just to be clear here, what is then the definition of a maturing market. It is that end users and the companies are requesting better quality, increased functionality, more technical materials, increased focus on comfort and fit and increased demands, of course, on products being developed towards local regulations and safety standards. That all again leads to an increased acceptance for higher price points, safety price lists, remember. For the younger generations, actually design also plays an important role. They still want to look good even if they are at work. So as you all know, we have the headquarters in the most mature region -- Workwear region in the world. And we have had great success here. So we have proven that our playbook actually works, and we are effectively sitting on the answer to what less mature markets or regions will request going forward over time. And that is, of course, a great advantage as well. So how are we doing in this market? Pretty well. I would say myself. We more than doubled the business since 2016, and we intend to double the business again until 2030. And we have done so with very, very, very limited investment. We've had between 2% marketing spend per year, actually on an average between 1.8% and 1.7% and 1.8% the last 10 years. That is going to change now with KTB as an owner. Understanding brand, first of all, but also understanding huge, huge opportunity within Workwear and they are willing to invest behind it. That never happened before. During my 17 years here and with the 3 former owners, as Borre alluded to, Workwear has always gone under the radar. Now we are on the radar and now we will utilize the full power of worker and go full potential. So it feels a little bit like Christmas Eve for me here. And it has already started. With approval from KB, we already this year, started to invest heavily in the sales organization. We are also, as I said before, separating the front end of our business between sport and Workwear, which will be great. And we have started the search also for a General Manager of Workwear North America. And again, establishing this in-house tender department will obviously will be great for us. These are actually things we have been talking about the latest last 10 years. And now it's finally happening. So what is our foundation for success. It is a great brand. It's a great product, and it's great people with the culture we have been talking about before. This is the very strong foundation we build everything on, both sport and Workwear. I believe a lot in focus. So we have been focusing on 3 core categories, that is trades, highways and footwear. To explain trades a little bit more, that's everything from residential and commercial construction, like carpenters, plumbers, electricians to HVAC and more. High visibility speaks for itself, of course, safety road workers, railways, et cetera. But also here in the Nordics, as you might have seen, walking around here, a lot of people within trades actually needs to use high visibility for safety reasons. And then footwear, of course, which is used across all jobs. We are focused on these 3 categories, and we have done that with a great success. And why did we focus on these 3 categories? Because it is within these 3 categories, you build credibility as a Workwear brand. When I joined Helly Hansen back in 2009, we did not have that credibility. Now we have built that. And if you can succeed within these 3 categories, you can succeed anywhere within Workwear. So that has been really important for us. And how are we doing? We set the bar that 70% of sales should be consisting of these 3 core categories. We have succeeded really well in the Nordics, in the rest of the world. but we are not really there yet in the U.S. And there is a very simple reason for that. Helly Hansen footwear used to be licensed out through another company. So we first launched Helly Hansen Workwear footwear in the U.S. fall winter 25. So I expect us to catch up to the 70% pretty quickly in the U.S. We believe that footwear in the U.S. as well is a fantastic opportunity for us. And then you might wonder what other means here in this chart. That is our other strong supporting categories. And here, you can see just a few examples, like base layer, like mid layer, like rainwear. And the good thing is, if you win end users within trades, as an example, they will, over time, also need base layer or mid-layer. When it gets cold, for instance, they will need rainwear when it rains. So they start to buy within their category and then they tap into the supporting categories. I would like to spend some words about concept. For those of you who was in our showroom before, we were talking a little bit about concepts. And within each category, we build concepts or families, if you like, where all the products belongs together. When I joined Hell, we had an extremely fragmented product offering. It was a lot of freestanding style with no connection whatsoever. Now we build and develop everything in concept. And the idea is, obviously, that you get attracted by one of the concept and you buy within that concept. So instead of buying 1 unit, you might buy 2 or 3 than that concept. And here, you can see a couple of examples. Magni is our pinnacle trade concept. ICU is our volume driver within highways or cash cow, if you like. And then we have a newly developed Magni TRx within footwear. and building our product line with this concept thinking has actually been a big part of our success. So if you can look in to concepts within trades as an example. We try to make a very simple to understand product offering. So again, we start with concept trades within trades, we build concept. Within this concept, we structure them in a very, very simple to understand letter. As you can see on the Y axis technical performance on the x-axis price. So it's a good, better, best offering. So it's very easy to understand both as an end user and as a company, of course. This structure is what makes it easy for us or possible to sell into regions with different maturity level. And you can see below the maturity levels I was talking about before for the different regions. So if you are in the Nordics, you probably are more to the right if you are in a less mature market, you probably look into the concept more to the left. This makes it also possible for us to sell into both smaller companies and bigger companies with different readiness to spend. If you are 20, 30, 40 people, you might have readiness to spend on our pinnacle concept Magni. But if you are a company with 5,000 users and every cent matters, you probably look more to the left of this structure. And of course, when we get our customers in one of the lower levels here, we always, over time, try to sell up to a more premium concept. And talking about maturity levels again. what we consider as our good offering here in the Nordics is probably considered as best in the U.S., as an example. And it looks the same throughout all categories. category, concept and placed in this letter with good, better, best offering. And again, this makes it very easy to understand for end users, for purchasers and companies and for our dealers. So I would just like to spend a few words about our pinnacle concept within trades Magni. Some years ago, we decided to disrupt the worker market. And we wanted to develop something that had never existed before in the worker market. So we developed this Magni concept. Normally, in our product development process, we have a very, very strict RRP price that we target on each style. That gives us a very, very strict target FOB price. With Magni, we decided to do the total opposite. We said, we don't care about or the RRP, we just developed the best product ever existed in the market. And we did that, and we'll charge the price at costs. The main purpose of this concept was to push price points north and to prepare the way for other concepts that we were going to launch shortly after to make them appear more affordable and of course, also to build brand image. The pants were priced at almost $300 never seen before. Never ever. And as always, sales did their suggested 12 months forecast, and they came up with 3,000 pieces for the pad specifically. I thought we could do a little bit more. So I put 5,000 pants in for the coming 12-year period. We were sold out after 2 to 3 months. After 15 months, we've sold 23,000 units of that path. So what did we learn? We totally, including myself with 40 years in business, we totally underestimated the end users' willingness to pay for highly technical, comfortable, high-performance and well-designed Workwear. And I always say, we should send an invoice to all of our competitors because we raised the price bar for all the other brands as well. They were following along over time. So we set a new level for the most expensive path. I have still sent that invoice, but we might do. And just a few words about pants because pants are very, very important for us and alone stand for 40% revenue in our core categories. Everybody wears pants in all seasons or most people, as I alluded to before, so it is an all year around business that very well contributes to our limited seasonality. I also want to mention that consumer insights and innovation is really important and has been really important for Helly Hansen Workwear as well. As we are testing most of the products we develop with our professionals. Here, you can see some of our developers out in the field, getting feedback from our professionals to be able to maximize the functionality and the performance of our products before launch. This gives us this plus 2-year development calendar to actually have time to do these types of testing because they test 1 time, the developer goes back and improve the product back again and test the product, and that takes time. That gives us a plus 2-year development calendar, as I said. So now our developer has finalized Fall Winter '28 and have started to work on spring/summer '29. So they are well ahead. Also want to show, as you saw in the showroom, one of our innovations launched a couple of years ago called HH Connect system. In short, is a specialized detachable, interchangeable pocket system that gives you the possibility to build your own path, customized towards your needs. Different pockets for different types of works, which makes you more efficient during your workday. Talking about innovation. This is just a few examples. We have a lot going on in the coming 5 years. We have a 5-year product road map and everything is laid out. Recently, this year, we launched a concept called Nord. That is developed for extreme weather protection for coastal workers. And you might have seen it down in the hallway. One of the professional groups that participated in the development of this concept was workers within the fish farming industry. Working in wet environment all around the clock, all year round. Very well received by the way. In 2027, we will launch our PROVIS H2O cooling garment concept, reducing heat stress. That is developed, obviously, for warmer regions, but also taking into consideration the climate change. And of course, it's also UV protection. Then maybe the most exciting of all new developments from a financial perspective is that with 2028 we'll tap into a completely new category for Helly Hansen Workwear. It's called industry service in Workwear language. What is that then? That is products developed for manufacturing, logistics, facility management, repairment installers, operators, et cetera, huge target group. And that is based on a very comfortable 4-way fabric approved for industrial wash. And that might not sound important for people who are not in the business, but that is a must if we are going to tap into that business. It has to be approved for industrial wash. So it's going to be really interesting to see what we can do within that category industry service. U.S. with KTB, we have now, for the first time, set a very, very clear strategy with a significant and dedicated investment behind for how to win in the U.S. market. U.S. will play a very important role in our future growth. People. We will invest in building a dedicated U.S. organization across sales, e-commerce and marketing. Product, we will scale our existing assortment in the U.S. and also invest in a tailored product development concept, especially developed for the U.S. Distribution. We will accelerate e-commerce. As I said, it's going to be really important for us in a B2C-led market and grow at the same time, strategic wholesale key accounts to reach more individual users in that B2C-led market. And behind all of this, of course, we've got a significantly increased brand and performance-led marketing and you will get more concrete figures from Mike in a while. And as icing on the cake, I'd like to say we have those current tailwinds that Erinn was talking about like Gen Z is becoming the tool belt generation or more young people are considering a career within trades, right? So it seems to be the right timing for us. I just wanted to show you that we actually have the product to scale in the U.S. market today. This is an already -- this is just an example of a few styles within a concept in the U.S. that is very well received called Oxford. So we are not starting from scratch. We already have an existing well-working assortment that we will continue to invest additionally in the product offering in the U.S. Key takeaways. We are participating in this large, fast-growing Workwear market. It's a highly consistent business with deep consumer loyalty. We have a focused product strategy anchored by differentiated technologies applied in a wide range of products. We have built a scaled worker business with very, very limited investment to date. We will scale our existing European credibility through a tailored U.S. strategy with significant investments behind. And remember, all the great category dynamics I was talking about before. And I couldn't be more excited about the opportunity ahead. When we now finally will utilize the full potential of Workwear and go full potential. And with that, I'll hand over to Mike Karapetian, Global Brand and Operations Finance and actually our Norway ambassador. He will talk more about our massive headroom for future growth and the strategy for how to exploit this in the best possible way. Thank you. Mike?

Thank you, Patrik. That was excellent. And thank you all for joining us today. This has been a day I've been looking forward to for 2 years. For much of that time, I've had the privilege of living here in Norway with my family, and I can say firsthand it has been the experience of a lifetime to live and work with this incredible group. For the rest of our time together, I'm going to cover 4 topics: First, Helly Hansen's business complexion and why we consider it to be among the most compelling assets in the space. Second, I will discuss how we intend to leverage our shared platform to unlock investment capacity and fuel margin expansion. Third, I'll discuss what sits behind the plan and the focused investments that support our growth ambitions. And lastly, I will discuss how the strategy you heard today drives accelerating growth and profitability and ultimately, stronger value creation for our shareholders. So let's start with the business. As you've seen today, we operate 2 distinct business segments. Our sport business is approximately 75% of global revenue. Our success in apparel is a direct reflection of the focused strategy we initiated 10 years ago driving 2 categories, ski and sailing in our top markets around the world. The balance of our business, accessories and footwear, which represents a meaningful opportunity as part of our win premium outdoor strategy. Workwear is approximately 25% of our global revenue. We lead with apparel, with our focus on the trades and high visibility setting a strong foundation. Footwear is 20% of our revenue and primarily reflects safety footwear, protective toecap, puncture-resistant sole and a variety of proprietary and branded technologies. The Workwear business is wholesale led today with significant room to grow our direct-to-consumer business as we expand the U.S. market. Despite their differences, in one area, they are the same, significant white space in the largest markets in the world. This is incredibly rare for brand with nearly 150 years of heritage and a rich history of product innovation first. In the U.S., we have only 1% share of the premium outdoor market. and we're just getting started in the $15 billion Workwear market. Within sport, our innovation platforms and unique design language brings newness to a mark that is already benefiting from increased consumer demand for outdoor based activities. And within Workwear shortages of skilled trade workers, rising cost of higher education and increasing safety standards are all contributing to increasing enrollment in the trades. This does not mean we do not expect growth outside of these areas, the ALPs region in Europe, South America and new markets in Asia are all opportunities. but we believe strongly in focus and focus on what has the potential to generate the greatest returns. For these reasons, hopefully, you now see a strong rationale to acquire Helly Hansen. As we've discussed, M&A has a high bar. It needs to be immediately accretive, leverage our strengths in operating model and play in structurally attractive addressable markets. and some things are must-haves. And at the top of that list is a strong cultural fit. But as you've seen today, Helly Hansen checks all of the boxes and will be the growth engine for Kontoor for the many years to come. Now let's walk through the how, how we are creating the investment capacity to fuel growth and drive margin expansion. There are 3 drivers, and let's start with our multi-brand platform, which creates several streams of value. First, Healthy Hansen directly benefits from our supply chain and sourcing capabilities to add scale efficiencies. Second, we expect to expand synergies as the business plugs into our support pillars in areas just finance and operations. And we also expect system and process improvements to drive greater working capital efficiency. This has been the earliest contributor to the margin improvement we have delivered to date. Next, accretive mix. We expect product mix benefits as we scale outdoor driven by the higher-margin base layer business and better unit costs as we scale volumes with our vendor base. We also expect channel mix benefits. Sport will be more modest as we'll be balanced across both wholesale and direct-to-consumer growth. Workwear will more meaningfully contribute as we accelerate our global e-commerce business. Further, we expect the combination of revenue growth and disciplined expense management to drive scale leverage. And finally, we expect benefits at the enterprise level as we plug Helly Hansen into our advantaged tax platform. So how we deploy this capacity for our growth ambitions. There are 4 strategic pools of reinvestment. Number one, as you've heard today, we are establishing dedicated sport and Workwear organizations to create a step function increase in focus and accountability. We're also investing in product development and innovation, leveraging our flywheel professionals, consumer insights and material science to create the next generation of product franchises. These first 2 create the foundation and where we have biased our investments over the last 12 months. We are now ready to move to the right, starting with brand marketing. Within sport, we will readdress the balance between performance and brand marketing as we lean into upper funnel investments to drive increased brand awareness. And within Workwear we will increase marketing from just 2% of revenue to 7% of revenue by 2030. Within commercial expansion, we are making leapfrog investments to elevate our e-commerce and retail platforms. And we're also investing to expand wholesale distribution within key accounts as well as growing our specialty business. Let's review how the strategy is working thus far. Relative to our plan, performance has exceeded our expectations by every measure. Revenue is tracking ahead with upside in every quarter as part of Kontoor and gross and operating margin upside being driven by the factors we have just discussed. Finally, we've generated more than $100 million in cash from operations, driven by stronger profitability and inventory management. This is essential to our investment philosophy, create the oxygen in the P&L over the first 12 months and now deploy that capacity to accelerate growth. Finally, a few words on our China JV. As you heard earlier, our partnership is strong, and the business is performing at a high level. Our acquisition thesis was fortified by multiple pathways to create value. And we believe our unique China JV structure provides a compelling source of additional upside over the balance of our plan. Now let's discuss how the strategy heard drives accelerating growth. There are numerous vectors available to Helly Hansen to drive growth. But again, we believe strongly in focus. And our strategy prioritizes the investments in the big ideas that can generate the biggest returns. The cornerstone of this strategy is supercharging the U.S. both sport and Workwear, laser-focused on the largest market in the world. We expect to build our U.S. business to at least $500 million, with strong contributions from both premium outdoor and Workwear. Let's start with outdoor. As I mentioned, 10 years ago, we focused our sport business on 2 categories: winter sports and sailing. The strategy worked. Today, we have 1% and 4% share, respectively, and are a category leader of each. We are now ready to build the third leg of the stool. We are using our proven strategy. win with the professionals to win the consumer. The compelling factor here is the relative size of the technical outdoor market at roughly 3x the size of the winter sports market, relatively small share gains here result in relatively large revenue gains. In fact, just adding 1% of incremental market share in the technical outdoor category would equate to more than $400 million of incremental revenue or almost the entirety of our global plan. So let's review this opportunity against our investment framework. It starts with talent. As Borre mentioned earlier, we are thrilled to welcome C.J. as the newest member of our team to lead our North American business as General Manager. We are also investing in the organization more broadly to expand capabilities. We're also investing in product to create the next generation of franchises to serve both our professional and consumer communities. We're also investing in marketing. Over the near term, we will flex marketing spend higher as we drive brand awareness before settling back to more normalized levels in the back half of our plan window. And we will also thoughtfully expand both wholesale and direct consumer, including modest store growth and digital investment. The sequencing here is critical. Talent and product leads marketing, which in turn leads distribution. Let's move to Workwear. By now, hopefully, you see why we are so bullish on our Workwear opportunity. And our success in the Nordics offers a compelling blueprint. Where we have dedicated focus, we have increased penetration. In fact, in the Nordics, both our sport and Workwear businesses are largely the same size. We will replicate this structure globally, starting in the U.S., where relatively small share gains can result in large revenue gains. Similar sport, it starts with talent. We are establishing a dedicated Workwear organization. We are also investing behind a U.S. tailored product line to augment our global concepts, we're scaling our marketing investment, and we're expanding our digital platform. Taken together, we expect to grow the U.S. business to at least $500 million by 2030 or more than 20% annual growth with the rest of the world contributing mid-single-digit growth. Within sport, our core categories of winter sports and sailing driving the majority of the near-term growth with technical outdoor accelerating as we scale new product franchises. And within Workwear, we expect measured growth over the next few years as we scale organizations and execute against our innovation road map. So for the balance of our time together, let's review how this strategy creates a stronger contour. And let's begin with the overall shape of the plan. There is an intentional sequencing that underpins our strategy, create the investment capacity first, invest in the foundation and then drive accelerating growth. Over the front half of the plan, value creation will be biased towards increasing profitability. This work is already underway, and we are ahead of our planned profit improvement, driven by better-than-expected gross and operating margin expansion. As we transition to the back half of the plan window, revenue growth accelerates as we realize the benefits from our investments. Moving to gross margin. We're off to a strong start with gross margin expansion driven by the benefits of our multi-brand platform, synergies as well as improved sales quality as a result of better channel and inventory management. Moving forward, we expect channel and product mix, ongoing benefits from our shared platform. and synergies to drive gross margin expansion to the mid- to high 50s. Extending this to operating margin, again, we are off to a strong start. And moving forward, we expect to achieve mid-teens operating margin. driven the gross margin drivers I just discussed, our multi-brand platform, scale and leverage. This will more than offset the investments in both sport and Workwear. This is our playbook in action. Putting this together, by 2030, we expect more than $1.1 billion of revenue, mid- to high 50s gross margin, mid-teens operating margin and a significant increase in our cash generation. That cash generation from Helly will be driven by scale, profitability and working capital discipline, more than doubling what it replaces from the Lee divestiture. And finally, our financial plan is supported by multiple pathways to create value. including new markets and expanding distribution. We also expect only a modest incremental benefit from our China JV with rumor upside as the business scales. Before moving to Q&A, let me close with a few comments. Earlier, you heard what makes Helly's culture unique. From my point of view, let me add 2 more, authenticity and curiosity. Curiosity drives our innovation. Authenticity keeps us true to our roots. This combination has contributed the incredible pipeline of product that has been a driving force for the last 150 years. This also means the organization knows it's strengths and has been open to learn about Kontoor's strengths. Both organizations are helping each other and a big reason why the integration has been so successful. And finally, let me close with how I started. It is incredibly rare for 1 business with 2 distinct segments to have white space in the largest market in the world and significant runway to increase profitability. This combination of growth and margin expansion is powerful and why we are so confident our best days are ahead. I want to thank you all again for joining us today. We're going to take a very short pause and then we're going to bring all of our speakers on stage for your questions. Thank you.

Right. We'll go ahead, and we can take questions from the audience some questions from our webcast as well. Any takers in the room? Adrienne?

Adrienne Yih from Barclays. So thank you very much for doing this. It was really enlightening, great to be here on the ground. I guess at the high level, we've rarely -- to everything that you said. We rarely see white space in 2 parts of the market, premium in the sportswear but also in the Workwear. They seem to be an opposite end perhaps of the perceptual kind of premiumization and price point. So can you talk about how your approach will be to making sure that those stay at polar opposites in terms of the mindset of the consumer as you go into the market. And then for Mike, for you, if you can talk about for the 9.3% to the 15%, a lot of different drivers in there. If you can help us with prioritization, give us the basis points that you rank order, which are the drivers or maybe Joe, whichever one that falls into.

So why don't we start with the going down here on the first question from a premium standpoint. You guys go ahead, and then we'll chime in then Mike, you and Joe get the second part.

Yes, sure. From a worker perspective, obviously, as I said, U.S. is a less mature market. And we are as I also said, developing a product offering specifically for the U.S. We already have an existing 1 that we're going to scale. That is developed for the maturity level of the current maturity level of the market, but we expect the maturity level to increase. So over time, we will be able to sell in, as I also said, up in the higher scale of the latter. But of course, we are not going to compromise again our premium brand positioning. We still believe that there is a pretty big niche and the development is going in the right direction for us. to be able to price our products more premium because we then have arguments like double durability is half the price. Superior functionality, increased safety levels and many other arguments for why our perhaps might be a little bit more expensive, but we cannot be too far away because the step cannot be too big, right? So that's why we have that latter, the offering going from good to best. So you can buy where you want within that letter.

But also, what we've seen is that, that marketplace right now has become very popular for young folks to get into write the trades. They're seeing less college graduates, less people entering college and more people getting into the trades. And we find that, that group that's entering wants to look better and feel better about the product that they're wearing versus what the folks before them were. And they didn't have much of an opportunity to folks before them. We're going to give them that opportunity make it a step change, and so they can work their way into it. But we really think that, that's really going to be the win relative to who's entering that market in a significant way right now with all of the investment that's going into the trade schools, and the trades in the United States right now. It's pretty significant. [ Start ]?

Yes. I'll start. So if you think about those various buckets, let's start with the multi-brand platform and synergies. That's the largest driver of the 3, and that's where you've seen a lot of the benefits that we've driven over the last 15 months, in fact, through the first half of we've seen operating margins expand by about 600 basis points. And a lot of that has been driven by the platform as well as synergies. We also expect channel and product mix. That's about 50 basis points of benefit per year. That will scale as we move through the balance of the planned window, particularly as technical outdoor grows as well as the Workwear e-commerce business. And then the balance of that will be fixed cost leverage. And those combined will more than offset the investments, as I mentioned, in both the growth in both the sport and Workwear businesses.

Brooke. Get you a microphone.

Brooke Roach from Goldman Sachs Bank so much for hosting us today. I was hoping that we could dive a little bit deeper into the brand awareness opportunity see in the U.S., particularly for Helly Hansen Sport. That seems to be 1 of the big underpinnings of the opportunity at both D2C and wholesale. Can you talk a little bit more about what we should expect to see you think those opportunities are for brand awareness? And then how that's going to play in with distribution expansion beyond the initial test that you have at 1 key partner this fall? And then maybe just one follow-up for Joe. You talked a lot about the power of the portfolio at the beginning of the discussion. Could you tell us a little bit more about the key milestones or markers that we should be on the lookout for to understand at what point you might be interested in expanding the portfolio further? And any key guardrails that we should keep in mind?

Why don't you start and then we'll help and then Joe, you can take the second part of that.

Yes. Regarding the brand awareness part, we are aware that there is an upside on building the brand awareness. We are starting that already now fall winter '26 with a bigger brand campaign this fall and upper funnel brand marketing. We will also open up stores, like I mentioned, that would also help to build the brand awareness. And maybe Erinn can add.

Yes. The only thing I would add is that when we think about how consumers are learning about our brand, we talked about first, it's professionals. But if you look at the second and third, it's through word of mouth as well as social. So as we think about kind of these more brand-specific campaigns, again, we're leaning in the fall of this year, we have further opportunities as we go after a 150-year anniversary, there's very specific channel ways of kind of further reaching that consumer. But I think the important piece is we already have credibility where it matters the most. It's in the product. It's in the technical performance it's already as a brand that's being trusted. We just need more consumers to learn about us.

And Brooke, I would tell you that it's been so dry. I mean we have just not had a voice there at all, and we haven't invested in that and the previous company didn't invest in it just wasn't important to them. But if you look at what we did at Kontoor relative to -- we took 2 brands that were dry, no investment, no voice really at all, and we created that through a period of time, and it took building blocks to do that. We're looking at this opportunity in the exact same way. And we've got a real nice playbook relative to how we went through that before, how we're going to go through it again. And I think we're in a really good place. And we're making the investments initially now. It's happening throughout the organization. They're really working well together. We're bringing our expertise to the North American market to this team and helping them. And then, of course, the addition of C.J., who's here today. So all of those things embedded together with the knowledge that we have in the marketplace is really, really important for how this is going to evolve over time. And Joe, do you want to talk about...

Yes. So I'd say, look, strategically, we do see M&A as playing a role in the long-term strategy, and I would underscore long term. as we think about the plan that we've laid out today, the opportunity set is pretty significant, right? And you're going to see Wrangler's version of that over the next handful of months. So frankly, our balance sheet will be ready by the end of this year as we get the Lee transaction closed and turn the corner into '27, but the bar is pretty high in the return profile on the plan that we just presented for us to bring something else in from an execution risk standpoint, those returns need to be quite meaningfully higher than what we're staring at organically. So that's how we think about it in terms of just framework.

But I would say, too, that it took 7 years for us to make that first acquisition, and we looked at a lot of things. And we weren't getting the calls inbound before, but now we get every call that's coming inbound to us. And one of the things that I think is really important for our organization that we're hearing that we've never heard before was they really want to talk to you from investment bankers. They really want to make sure that you're in the process. They really want you to take a look at this because they know we can do it. They know we have the expertise. But we're also hearing that culture were to, that they've heard about the culture that you have there, and they like to be part of it. So I think we're going to have choices that we can make. I think we can be extremely selective. We're not worried about the financial aspect because of our strong balance sheet. So we're in a really good position. But I think Joe was perfect in saying we've got a couple of things that we need to do. As you know, we're finishing up right now our integration. We just have IT really that's left with the Helly integration, which, by the way, has gone really, really smooth. And then the second piece of that is that we've got our divestiture that we haven't really talked about. But we're finishing that up too. The partner that we chose to do that with has worked with us exceptionally well. It's been a really good process from both partners. Joe has been leading that for us. It's gone better than I even thought it would go and we'll finish that up before the end of the year also. So then we can kind of focus on what we need to do as far as the most important thing is really growing Helly in North America and doing everything that we said today that we would do and then continuing that really strong focus and lens with Wrangler, which now Wrangler is going to get a lot more attention than they got before because remember, we're down to 1 jeans wear group right now, and that's Wrangler. So it will be a lot of fun for us in the next couple of years relative to the 2 big brands that we have.

Thanks so much for the time today. Great presentation. So I wanted to see, first of all, you could share any more color on the relative profitability of Workwear versus sport. And then I know you guys mentioned a pretty large investment in marketing in Workwear. I don't know if you could provide any kind of similar detail in sport or maybe even across the regions as well, just that marketing investment. And then...

Mike, do you want to take that?

Yes, we can start there.

Yes. So today, they're relatively similarly profitable, slight differences between gross margin and operating margin, but relatively similar. So going forward, it's really the drivers that I previously articulated around the whether it's accretive mix, the shared platform, synergies, scale leverage, that's really going to be the largest driver versus the mix between sport and Workwear.

And then within the U.S. Sport, can you talk about the opportunity within winter ski outdoor and lifestyle, especially like how do you see difference in those opportunities throughout the U.S. over the next few years?

So over the -- since -- what I said is that since 2005, when we did the reset, we really focused on building the specialty business. There is in massive opportunity to build the ski business -- continue to build the ski business, too. And the outer market, I mean, is the biggest category in the industry, right? We're already doing significant business there today, but we strongly believe that, that can grow a lot faster going forward.

Think about the ski business and think about how many mountains are we on in North America? I don't know exactly, but it it's significant.

Mostly on everyone, I think.

Mostly on everyone. If you think about all of that and all the advertisement we're getting from that, right, and all the people and all the users, we need to take that down the mountain now and make sure that the people that are skiing are using our product and take full advantage of that. Those are the programs that we can bring to life that just haven't gotten the light of day before in the past. And we understand how to do that and it should be a lot of fun doing it.

And I would also say that since the reset, we've really been successful. We've really been happy. Keep in mind, we're a European brand being successful in the U.S. marketplace, right? We're one of the few ones. And the focus that we did back in 2015 that has really worked really paid off. So we're really happy with the results that we have already today, but there are still massive opportunity to grow like I mentioned.