PUMA SE (PUM) Earnings Call Transcript & Summary

Hi, everyone. Thanks for taking the journey to the beautiful Herzogenaurach to enjoy the day with us today. It's a great pleasure to have you here. And of course, I would also like to thank everyone who's following us online through the webcast. My name is Gottfried Hoppe, and I'm heading Investor Relations here at Puma. And on behalf of the entire Management Board as well as of our senior executives, I would like to welcome you officially to the Capital Markets Day 2024. It's not that often that we do a Capital Markets Day. It's been actually quite a while since we have had the last one. It was in London in 2018. And back then, we promised to you guys that we would hold the next one at our headquarters in Herzogenaurach. And as we like to deliver on promises, here we are today. We are super excited to welcome you to our campus and to show you and make you familiar with the spirit of our amazing PUMA culture. And as we consider ourselves to be a people-first company, I would like to start with introducing the speakers to you first. We have the entire management team with Anne, Arne, Hubert, [indiscernible] and Maria presenting to you. And we also -- as every successful company is being steered and managed on a daily basis by a very strong management team, we have our senior executives for the key functions being with us today and tomorrow. Let's start with Richard first, who drives and pushes the brand and marketing elevation strategy forward. We have [ Dietmar ], who runs the people organization function on our end, which you might know as an HR function. From the markets, we have Bob and Shirley being responsible for the U.S. and China. And of course, we also have our product experts, namely [ Matthias, Aaron, Max and Lionel ], who are responsible for the BUs: Team Sports, Running, Training, Basketball and Sportsstyle. And of course, we wouldn't be PUMA if we wouldn't have some very special guests with us today and tomorrow. So stay tuned on this one. Now let me turn to the agenda and explain to you on what you can expect from us during the next 2 days. So let's start to look at Day 1 first. The first part of the day, we'll be focusing on our strategic triangle on brand, product and distribution. After the [ why ] coming, Arne will kick it off with the Capital Markets Day with a strategy update, which will be followed up by Richard talking about the brand elevation strategy as well as Maria talking about product strategy. Arne will complete the strategic triangle by speaking about the distribution. After 30 minutes break, we'll continue with regional deep dives by Bob and Shirley speaking about China as well as the U.S. and the opportunities we have in these markets. And finally, and this is what we are all here for, Hubert will talk you through how this all translates into the financials and give you an update in a more granular detail. The agenda of the first day will conclude by a Q&A session by the management team. And after that, we all will enjoy a dinner in our PUMA restaurant. On the second day, for the sporty among us and for those which don't need to write the reports in the early morning, we'll kick it off with a morning run at 7:00. And here, you will have the opportunity to test out our infamous NITRO running shoes. The run starts at 7:00 a.m. at the Novina Hotel, and you should have all the necessary information for this event. If not, then please let myself and the team know. As you can see, the official part of day 2 will start at 9 a.m. and it will be very much focused on product, sustainability and people. Aaron will kick the day off with a presentation on running, followed by [ Lionel ] presenting the strong opportunities which we have on the lifestyle side. Then we'll shift the focus for a moment from -- on [ Alor ] speaking about the backbone of our organization, here specifically, the sourcing and the sustainability topics. [ Dietmar ] will then speak about people and people centricity on what it actually means for PUMA. We'll then take a short break. And after the break, we'll hear more from [ Matias ] and [ Max ] talking about football and basketball and how we broke through in these 2 categories and the opportunities which we have ahead of us. To bring all this excitement from the presentations to the physical product, and let's be honest, this is the second reason why we are here for. You will be invited to join our showroom rotations for about 1.5 hours. The showroom rotations are going to start at 12. And you will see the basketball, the football, the running, the sports and the smaller sports showrooms during these sessions. Of course, I don't need to mention that all those people which are following us online won't be able to attend the showroom rotations. So they will have a 1.5 hour strike approximately. After the showroom rotations, the Management Board will be again ready to take your questions. And then we'll finally conclude the event with an optional lunch around 2:30. I know it's a pretty sporty agenda, but I also know that we've equipped you well with the right shoes to get this job done. And when it comes to getting the job done, we all know that you love stats. So over the next 2 days, you will hear from speakers with more than 200 years of experience, combined PUMA experience, which is on average 14 years. But that's not the reason how we like to start meetings at PUMA. Actually, the best way to start a meeting is with our brand anthem video. So now enjoy. [Presentation]

I hope you all enjoyed the little energy injection after the lunch. It's a huge pleasure for me to welcome you here at our headquarters in Herzogenaurach. I know it's not the most convenient place to travel to, but it's so important that you come to really get the full experience of PUMA, of the amazing brand, our fantastic product and people. So thank you for coming. For the next 24 hours, if there's one message I'd like to get across is that PUMA is the challenger. In the next 24 hours, I invite you to see the game like we do. The way we see it is that we're only scratching the surface of our potential. We see significant opportunities ahead of us. And the next 24 hours is all about what they are and how we will realize them, and we will show you also the confidence how we will realize them. And the biggest unlock for these opportunities lays in our brand elevation. So for the next 2 hours before the coffee break, let me guide you through the brand DNA. You need to understand what's special about the PUMA brand, how we've progressed and what are our ambitions. And then I will have Richard and Maria on stage to talk about the brand and the product side before I talk about the distribution and our road to 2025. Let's get started with the brand. This company was founded in 1948, 75 years ago or 76 now, here at Herzogenaurach by Rudolf Dassler. And this gentleman recognized that it's not good enough to call the brand Ruda. Because that was actually the first name he gave to the company. But he said, "I need to give the company a name which also inspires the athletes to become a better version of themselves." So he called the company PUMA, to be fast, nimble and agile. That's exactly the attributes we wanted to give the athletes by wearing the PUMA products. And still today, there are two important principles the PUMA team lives up every single day. There is no quality without passion. We have 20,000 employees who really are super passionate to bring this company to the next level. And the second one, servicing our athletes. We are born based on the idea to create product to make our athletes better and faster, and this is still the same at service attitude which we are carrying forward when we work together with our clubs and athletes. And I promise you, speak to anybody in the industry out there, be it the athlete or player or a club, I think our level of service just sets the standard. When I look at the 75 years of PUMA, there are a few moments which really inspire me and drive me every single day I come to work. Let me share them with you. When I look at PUMA, PUMA stands for me for driving groundbreaking innovations like we did in the '50s, developing the first [indiscernible] for football. PUMA stands for me for standing up for social justice and human mankind as [indiscernible] in the '60s. PUMA stands for me for celebrating the beauty of the game with some of the best football players of all time, Maradona, Pele, or Johan Cruyff. And PUMA stands for me for trying new things. Together with [ Klite ], we developed the whole segment of sports culture, recognizing that sport is going beyond the court and there's a culture that we celebrated it. And of inventing Sportstyle, the whole segment of sports as we know today was born in the '90s because we tried something very progressive, partnered up with Thunder and brought fashion into sports. And about challenging convention. Who said that a kit needs to be 2 pieces? So we challenged that convention. Unfortunately, authorities and regulations didn't allow us. But still, we went that way. And finally, PUMA is about signing athletes [indiscernible] who are perfectly embodying the brand. And there's nobody else like Usain Bolt himself who represents our brand as well as us. Because he stands for values being brave, confident, determined and at the same time be joyful. He always had that twinkle of the eye enjoying the victory. I think when you look at these 75 years, it is clear our superpower as PUMA is speed, starting in 1948 with the naming of the company, PUMA. So we are forever faster. And forever faster means also the way we are working. We're developing the fastest product for the fastest athletes. It's also describing the way we're working with our partners, being very fast in how we service them, but it's also describing our internal mindset, faster decision-making, faster in innovating, faster in reacting to trend. So fast describes our attitude to continue to push forward sports and sports culture and forever is our responsibility to be inclusive, to give everybody the opportunity to play who wants to play. So I think when you look at these 75 years, it is clear that we have an unmatchable DNA as the fastest sports brand in the world and as the challenger in sports and sports culture. Let's look at the journey of the challenger. How have we progressed? This is our field of play. We have 6 global sports which we are pursuing. We have football, basketball, running, training, motorsport and golf. But as we are also being very focused on winning locally, we're complementing it with regional sports with cricket to win in India or netball to win in Australia and South Africa. And all these cultures of sports we're then celebrating in sports style, taking the inspiration from the respective sport turning into very compelling product propositions for the lifestyle consumer. Let me take you through the main field of plays, and as I said, it's a journey of the challenger. And for me, that journey started in 2018 when we said we need to break through in football as well as in basketball. Let's say you start with football. Why are we in football? Not only because the whole company was founded in football, but it is the most popular sport worldwide. More than 4 billion people are viewing football every single week around the globe, has the higher viewership among all the sports. And how have we progressed from that sport? In 2018, we started to challenge the market with a new product proposition, a new focus. What was our market share globally? Mid-single digit in some regions, even low single digit. Look at where we are today. 17%, 19%, in U.S. alone, 13%. We've added 3 to 5 percentage points in these regions in 2023 alone. And there is no free lunch in this one. Competition did not move one single inch. This is probably marketing and innovation-wise, the most competitive battlefield in the industry. So how have we succeeded? Because we first -- put product first. Product is king. You need to have one of the best products out there in terms of innovation and design to succeed. And we also focus a lot on building equity, equity in our franchises in the consumer's mindset. And today, we see the consumer is not looking for PUMA football shoe to anymore. They're looking for the PUMA future. We have built equity in the mindset of the consumer. And we partnered up with great players and clubs to get the visibility and credibility of the pitch. But most importantly, we put our consumer first, exactly understanding who is this football-obsessed team? How are they -- what kind of ecosystem are they living? How are we reaching them? And we focused a lot on talking to them on social media, especially on TikTok. And obviously, we could not be successful without the excellent relationship and partnership with our wholesalers. And despite us being already so successful in football, the biggest opportunities are still ahead of us. When you look into the football footwear segment, the biggest segment is the speed silo. And here, Autumn/Winter '24, we will start to attack this one. We have the fastest boot out there and will go beyond the market leader. On the apparel side, team wear, we now have a fantastic credibility. The best club in the world is a PUMA club. Within every single league, and #1, #2 and #3 club. It gives us the credibility that all these clubs playing in amateur football, want to wear PUMA so we can service them. And then look at the success in the U.S. -- in Latin America and Europe, 17% to 19% market share in the probably two leading, most important football markets. We can bring that success internationally. Let's talk about basketball. Why are we in basketball? Because it's the sports with the biggest cultural impact. It's so important to win in basketball to win also in the U.S. Again, what was the journey of the challenger? 2018, we started it. We have been out of the business for decades. In only 6 years, we grew from 0 to 10% market share. In the signature and the performance side, we are now a top 3 brand there. Then this is so essential, you need to build that pinnacle first. You need to have the credibility in the performance and signature shoe business that you can also then tackle on the culture space in basketball later on. However, we succeeded. Again, product is king, Fully focused on creating the best shoes in terms of technology as well as design having the fantastic players on pitch like [indiscernible] [ Graham Stuart ], representing us on the court. But also understanding again from a consumer perspective, basketball goes significantly beyond the court. Understanding that culture and speaking also to our consumer in that lens has been the reason for success. And when you look, let's say, again, from a distribution perspective, we did an excellent job. I think the interesting part is our market shares are even higher with a younger consumer. We get that Gen Z and next-generation consumer. We see that exactly on the size runs. So what are the opportunities ahead of us? Signature and performance is important. This is our credibility. But from a market size, it's only 10%. So what's the other 90%? The other 90% is the basketball culture space with basketball-inspired shoes. And obviously, you first need the credibility, the authenticity that you are a true basketball brand before you can have a significant role there. So we see a significant opportunity now to expand our proposition off-court. We've seen strong growth in the U.S. with basketball. Rightfully, it was our first focus to win in the U.S. -- in the NBA because the NBA is the most influential basketball league. But now we can take that success also internationally. And we started it this year with taking LaMelo -- sorry, last year, with LaMelo Ball to Europe to build also the popularity and scream also about our role in basketball. And then that success, which we have is currently built on 50% door penetration in the U.S. Competition is at 85% to 90%. So we have also opportunity to further open doors in that field. Let's talk about our youngest venture, Running. It's very important to read the lowest line here since 2021. I've been with PUMA since 2011. And that decade between 2011 and to 2021, we did not have a credible running shoes. I know that. I'm a runner myself, And it's the first time I really feel very confident about our product proposition. Why do we want to win and running? Because it's the sports with the highest participationship and also the most versatile product usage. People are not only taking running shoes for running, but also for lifestyle purposes, walking, shopping, just for leisure or just for style. So whatever we achieved in 3 years, we were out of this market completely. In 3 years only, we reentered, became a top 10 brand again, and most importantly, are the brand which is growing the fastest in the industry. So how will we continue to break through in running? Again, full focus is on product. Product is the king. And here, we are very lucky because we have the NITRO foam, which is regarded as one of the best foam technologies out there in the market. But the reason or the recipe to succeed in running is different. You don't have the [indiscernible] or LaMelo Ball or cities in running. It's more grassroot. You need to be where the runners are. So that's why we significantly started to be more present at the races all over the world and invested it more into the tech reps to be present where the runners are at the point of sale. So I'm very happy with the success which we have done already in the 3 years. And I think everybody at Puma feels and in the industry, we're just getting started it. It's going to be a marathon but we will get there. Let us talk about the biggest opportunity ahead, sport side prime. For us, it's the biggest opportunity because it's the most desirable and the biggest market itself. When I and the team will talk about sports side prime, we talk about the business which we are realizing in JD Sports, Foot Locker, Snipes and fantastic partners all over the world. Just to give you a dimension how big is a big, The sports side prime segment is 7x bigger than the football footwear market in Europe. It is even 20x bigger than the football market in the U.S. And the football market in Europe and the U.S. actually since last year is pretty much the same size. We have double-digit market share in football, 17% in Europe, 12% in U.S. In prime, we have low single-digit market share. So obviously, we have not succeeded it to that extent yet in prime. So it's time to shape the focus and really focus on cracking down in sports side prime. And we also need to understand that sports side follows a different pattern than performance. Illustratively I showed you, let's say, here, how trend dependent sports side is. If you go 8 years back, there was a tennis trend. Recently, it was more basketball-inspired shoes. And now we see that a more football-inspired shoes in skate shoes coming up. And while we are catering for the current trends with great offerings like PALERMO, [indiscernible] for the skate trend, the real interesting question is what's next? Because we all know that trend cycles, will this last another 12 months, maybe even 18 months? But the more interesting question, what's next? When I look at PUMA, I believe we have everything it takes to succeed. We have the product, we have the authenticity, we have the richness of stories. And most importantly, we are multiple category. There are a lot of players out there who have credible offer on tennis. Maybe someone skates, but there are only a very, very few brands who can talk to every single trend there because they have the authenticity and the legacy in multiple sports. And there's all the propositions we can talk to. So with low single-digit market share, and that's historically been in the last years I've been in PUMA, so more than 13 years, we need to change the strategy. And that means, let's say, it always starts with the consumer first. We need to better understand the sports side prime consumer, the same relevance to say we were able to build up with a kit in football or in basketball. At the end, it's the same consumer. We became a hot brand in football. Every fifth consumer is already buying us on the football side because we are building up relevancy and heat with them. But we have not done yet on the consumer side yet on the prime side. But also on the product side, we need to change the game. We've been very fast, always reacting in trend. And also to be fair, on [indiscernible] and on skate, we just have dropped our shoes in November with the Palermo and in January, February with the Suede XL. Competition has been faster. So we also need to focus now a lot of attention on making sure we're incubating, taking the time and the patience already to sell and say, "Look, what is the next thing which we can build up?" And these are also the things which I shared with you during the earnings call. We're putting now already a lot of attention on what is the next big thing to come. And we believe this is a low profile. And then in terms of franchise equity, we need to multi seasonally manage that better. Because we know if we are building up this equity with the consumer and we see that on the performance side, the success is more sustainable even, let's say, after a trend, you're finishing on a higher level. It is a more stable business. So we've been great in reacting and we need to get better into building that franchises going forward. And again, look at football as our prime example how we build the equity there. We have our VP, Sportstyle, Leo, who will guide you through tomorrow exactly through our strategy what's in the pipeline to succeed. Let me also just briefly talk about one opportunity, the training apparel. Training apparel is a focus area which we really want to tackle into 2025 because we need to reshape here the product offering to make sure we are taking that one. I mean, you know it yourself, There are companies out there doing significant business only in training apparel, actually only sometimes with one gender only. And we're not participating on that business, on that cake yet sufficiently. Again, we have everything what it takes to participate and have a bigger share of that business because it's the biggest sports apparel market in the world with great margins also. But I think you knew that. So what have I guided you through in the last 10 or 15 minutes? There was a journey of the challenger. In 2018, we started to challenge football and basketball and you see where we are in 2023. In 2021, we started to challenge running and you know where we're getting. And now it's time to take the biggest market, prime, and the biggest apparel market, training. So I need to sum it up. We have broke in football and basketball. We are starting to break through in running and we will break through in sports side prime and training. Let me take you through our ambition and strategy. Again, I've been here since 2011 and it's clear we had strong commercial success, no doubt. And the EUR 8.6 billion would have been even a EUR 9 billion if it wasn't for the headwinds from the currencies, which cost us EUR 400 million on the top line. And when I look at these, it has been 3 phases so far for me. The first phase was about the turnaround. We are a $3 billion company hardly earning any money. Then there was a phase of commercial success, where we had significant growth and also good profitability of up to 8%. And then was the year of the COVID catalyst, where I think also the agility of our company very lean, fast in decision-making played into our card to capture a lot of market shares. I think when you also look at these years, it is clear that we have outperformed the competition, and 2023 was another contribution to that one as growing fastest both on the top line as well as on the profitability. But again, the most important question is what's next? And I believe the next chapter all needs to be about sustainable growth to create the foundation for accelerated market share gains in the future. Why do I say that? You have seen, let's say, the volatility of our business both in China and in the U.S., and we will talk about that in a second further. But let's say the volatility has been -- we have been growing strong but also saw a decline. So we need to make sure when we are growing, it's sustainable, and we will talk about how we achieve this. And what means sustainability for me in terms of growth means that in the markets where we are, we have a healthy share of performance business. You cannot be a global sports brand without having that healthy share performance business in every single market. It's always about the local consumer because that's the ecosystem in which they live. It's about also having a sufficient market share in the sports side prime distribution and it's also making sure we are realizing our full prices. In the markets where we are already #2 or #1 even, we all have that in place. But this is not true for every single country and it shows the opportunity which we have. And sustainable growth also means for me being more disciplined, taking less opportunistic businesses which are not in line with our brand position. So how do we unlock that next potential, the next chapter? It will be our strategy, which I already showed you last year. It's around the brand elevation, product excellence and distribution quality. And if these 3 factors come together, you have sustainable growth. And it's all built on our foundational pillars of putting our people first, evolving our sustainability leadership and our infrastructure. So the top 3 priorities: elevating the brand, must win in the U.S. and must win in China. Let's talk about the brand elevation. It's the biggest opportunity for us. Why do I say so confidently? Let's look at our brand funnel. The brand funnel measures our brand strength across different categories. When we talk about -- and let me guide you through. When we talk top of the funnel, we talk about the foundation. What is the awareness which we have with the consumer? How much do they know PUMA? We are very strong. The foundation is there. We have a similar strength as the competition. When we go down further the funnel, it's about consideration. It's about the familiarity about the distinctiveness, the clarity. So how clearly is the brand associated in the consumer mindset? To make it simple, you can always, let's say, simplify and say a brand as a friend. How well do you know that person? Do you have a clear understanding who he or she is and what he stands for? Here, we are falling short versus the competition, which is then also resulting into lower purchase intent. The great news is already in 2023, we were able to do progress. And Richard will talk about this to improve our brand funnel going forward. But what is the main root cause for this? The main root cause is that our communication awareness is lower. Okay, let's talk that through. Communication awareness means how good can the consumer recall our messaging which we have sent out? Because that is important, that you are building exactly that clarity, that familiarity in the consumer mindset. How are we tackling this? There are 4 things we will do differently. Number one, is, we need to communicate more emotional. If you reflect yourself what is the last campaign, the last advertising, you recall, I'm betting it will be an emotional message which was relating to you. We need to focus more on distinctiveness, the clarity of what we are standing for. And there are also some executional things which need to do differently. We need to focus on achieving a minimum reach. Because if you're not reaching that reach, you're actually wasting money, wasting money in the production of all the creatives but also the message gets lost because there's a lot of media noise out there. And finally, it is also adjusting your mix, not only focusing on product campaigns, which we have done for the last 10 years. Having a healthy combination of brand campaigns and product campaigns. Why is that important? Product campaigns are great. They're focused on the product to drive commercial success of that product. If you want to build a substantial foundation for this one, you also need to invest into brand campaigns, and that will help you to increase the strength of your equity for the sustainable success. What we've done in 2023 as first steps? Maybe I should mention that because it's important for you. This is not about spending more. This is about spending differently, more efficiently and effectively on marketing. So what have we achieved in 2023? It always starts in life with having the right people, the best team there. And here in the mid of last year, we did a reorganization, put global marketing, global brand management, [indiscernible] under new leadership with Richard, who will join me later on stage. Because it's so important for me. It's my #1 priority that they can work with Richard every single day on this one. Secondly, it's about the consumer centricity and understanding how we reach them and how we influence them. And yes, we are going after the Gen Z and the next generation, and it's a lot about an influencer strategy especially driven on social media. And finally, it is about the effectiveness, making sure we are consistent and emotional when we are talking to them. I'm very happy that it's only 2 months now and then we will show you the first brand campaign. But as you all came, we already show you a first teaser of our campaign in Richard's presentation. Let's talk about buzz winning in the U.S. I already mentioned to you, we have seen a certain volatility in our business. We have grown strong in 2021 and 2022, but our business has softened in 2023. Of course, there were external factors. There was a certain softness in the U.S. market. But we were challenged more than others in the industry. So the stability of the business was differently, and that's if I say the sales grew faster than I believe the brand strength has its win because the performance credibility and substance in terms of share in our business still needs to be elevated. And we also took some of that opportunistic business opportunities which are commercially fine but not in line with our overall brand positioning. So where are we today in the U.S.? We're #8 brand with less than 3% market share. We also see that there are 2 European companies ahead of us. The rest is dominated by American companies. So we believe to succeed in the U.S. We need to drive a US-first strategy. And in 2023, we already took the first steps to reset our operations to make sure we can attack again in this important market. So we focused on clearing our inventory. We focused on strengthening our performance credibility. And in that very soft market 2023, we grew our football shares, we grew our basketball shares, we grew our golf shares, we grew our performance running shares, which I think was the right step to create the foundation. And we strengthened our organization to execute against that strategy of elevation, elevating the game with a new Head of Sales and a new Head of Merchandising which is product. So we have a US-specific game plan fully in line with our global game plan to elevate the brand, enhance the product excellence and optimize the distribution quality. And Bob, our President for North America, will this afternoon guide you through that session. And I said we need to must win in China. When you look at the volatility of our business, it's a bit similar. It's a very strong growth in the years '19, '20, '21. And then when we had also China-specific headwinds, again our business was more challenged, more challenged than competition. Why? Again, it's the same. When you grow your business, you need to always make sure you're growing your brand equity, your brand strength at the same level. Otherwise, it's only commercial focus, but you also need to have that brand strength. And we are currently lacking performance credibility in the Chinese market. Then we can become exchangeable. All the 75 years of sports history, the consumer does not know about this one. We can become exchangeable. Let's look how we are currently performing in the Chinese market. We are somewhere in the #15, #16, We have 1 -- around 1% market share. It's not the question if international companies can succeed in China. There are 9 international companies who are bigger than us. The question is, well, we need to do differently in China to unveil the same strength which we have done? Because in other markets, we are the #3, #2 or the #1. And you all know about the attractiveness of the Chinese market, especially when it comes from a growth dynamic and a profitability. So with our new GM, Shirley, we said we need a new China for China strategy, and as always, the first year is about a reset. And in that reset here, we first cleared our inventory, which -- humongous amount of inventory which you needed to clear to set a healthier basis for a better 2024. We rebuilt the organization with a new local GM, new local sales, new local marketing, new local merchandising. Complete front phase, is new, all driven by very experienced local Chinese leaders now. And we believe we need to focus on social commerce and live commerce in China because in digital-first China, so much things are happening online. So that's also why we entered the partnership with Tencent. Due to, let's say, our lower base, we are already able in 2023 to return back to growth in 2023. We have a complete strategy set up for China for China, and I'm very happy that Shirley is today here with us from Shanghai to talk you through our strategy in this afternoon. But all this triangle and the strategy could not be executed without one and the most important factor, which is the team. I'm very proud to work with this amazing amount of people, which show all one attitude. Despite all the success which we have shown in the last year, there's one thing which we all have in common next to passion, is the attitude of 0% complacency. And now let me hand over to the most -- least complacent marketing director in the industry, Richard Teyssier. Thank you.

Yes, Brand elevation is key. Everybody says so. Consumer engagement will improve and then all metrics will improve, the market share, the pricing power, the margin, the EBIT. So the brand is key. But why is it such an opportunity now for PUMA? I'll now talk about that but let me give you one first indication. You probably knew PUMA before you came, right? I hope so. Most of the people you know, knows PUMA, 80% to 95% depending on the country. Latin America, 95%. But do they know what PUMA stands for? Or do they even remember the last PUMA commercial they saw? Probably not. I'm Richard Teyssier, the new Marketing VP for PUMA, and it is my pleasure today to share with you my plan to elevate the brand and make sure next year, you will answer yes to these questions. First of all, I want to strengthen what works. We have a fantastic performance momentum. So I want to continue to push in this direction. Then as we speak, I am currently implementing two structural changes. I am currently building the best marketing team of the industry and I want to make PUMA a customer-centric company. Then there are two areas where we must win: Influence and brand communication. I will come back to that later, but let me give you some element of context first. So first of all, how lucky I am. It's a dream job for marketing -- for a marketeer, sorry, to lead such a brand as PUMA. The industry is fun and attractive. The consumer is young and versatile. I am here or at home when I said it to my teenager son. But the most important part is the brand has such a potential today. It's super exciting for me to be the one to bring it to the next level. The second good news is we have a great logo, probably the best logo of the industry. A beautiful cat which can create a unique emotional connection with the consumer. We're going to use this cat much more and with more consistency in the near future. The third good news is we are doing great in the performance area. We are gaining market share in all performance category in nearly all countries which, by the way, it's a good news for sports brand. The way we do that, obviously, is because we deliver a great product and we have a great distribution. But as marketing, we have a key contribution there as well. We know the formula. We're going to continue to apply this formula. To illustrate what I mean here, I wanted to share with you the best example I have what we did in football in 2023. Let's have a look. [Presentation]

So we know the formula, a great crew of assets, players and team and the best-in-class activation in social media. Look at the numbers, EUR 24 billion rich, but more importantly, 19% of engagement. The good engagement rate is around 5%. What we do in football is outstanding. So we know the formula. We just need to continue to apply it in all performance category, and we will. Now we know as well that we have some room for improvement. When we look at the brand funnel from awareness to loyalty, we can see that, first of all, we're improving '23 versus '22. I like to believe this already the results of the job of my team did. But more importantly, we can see that we have significant gaps versus the main competitors, specifically, when it comes to the brand consideration. So we have decided to target this one for 2024. You can see that we have a significant gap when we compare it to the 2 main competitors, I don't need to name them. So as usual, you have multiple explanations for this situation. But I believe there is one main root cause, which is a lack of communication awareness. You see the gap here with the two main competitors even greater. But the good news, this is in our hands to improve it. And when we look at what we did in the past, we can see that we had a fragmented and low emotional communication. And we can see as well that we have a weak connection with Gen Zs in Sportstyle. These 2 issues define our main priorities, our main opportunities for the future. We need to reconnect with the Gen Zs in Sportstyle and we need a consistent and emotional communication when it comes to the brand. These 2 priorities define my strategy in 4 pillars. I already described it during the intro. But again, as we speak, we are creating the best marketing team of the industry. And we are doing of PUMA a consumer-centric company, and there are 2 areas where we must win: master influence and brand communication. The team first. As you probably already know, we have consolidated the whole leadership of marketing here at the heart of the company, close to the product creation engine. The second task was to clarify the organization, which is done now. So on the left side, you see the category leaders. They are in charge of defining the communication strategy per category. On the right side, you see what we call the functional experts. They are here to support the category leaders and deliver excellence in execution in all key areas of marketing. And then we have created two new functions. We said brand elevation is priority #1. So we now have a team completely dedicated to brand strategy. And then on top of it, we are, as we speak, creating a team of expert when it comes to consumer insight. Because we do believe consumer-centricity will be instrumental in creating a great future for the brand, and that's why that's the second pillar of this strategy. So when it comes to consumer centricity, we started by creating the brand tracker, to track every key metrics for the brand every quarter. Every quarter, we can measure from awareness, top of mind, to purchase intent, loyalty. Every quarter, we have 26,000 consumers giving us feedback on the brand in 29 different countries in the world. And we will continue to expand. This tool is very important for us. It's a compass to define the key directions for the future. On top of it, we need to run ad hoc researches. So that's why we are, as we speak a team of expert to do that, and influence product creation and communication strategy. But we know already our key consumer. We know our core target. It's not the easiest one. These are the Gen Zs. You know the teenagers. You may have some at home. How difficult they are, how difficult they are to attract seduce, convince. When it comes to marketing, the way they consume media is very different from the previous generation, and you know that. You probably need to frame the way they use therefore. The most important part is they are the first true digital generation. And as such, they are the first generation of content creators, which is a challenge for our brand to manage, but at the same time, create opportunities to connect differently with them. And the way to connect with Gen Zs is influence. That's why influence is the third pillar of the strategy. You probably can feel it intuitively. There is no way we're going to convince Gen Z on the way to style with the commercial. The way to interact with the Gen Z is influence. We need to be a lot more subtle than only having commercials. So that's why, as we speak, we are creating an operating model to cover the whole ecosystem, 365 days a year. And the way we do that, we have tiered the level of influence and the level of influencers and content creators. We know that at PUMA, we are pretty good at Tier 0 level with Rihanna, Skepta, ASAP Rocky, Dua Lipa. But we know as well with the local team that we need to complement our crew of influencers and content creators with Tier 1 to Tier 3 influencers. It's going to make us more locally relevant and more impactful. To delve even deeper, we know that some social media channel now like TikTok give us the opportunity to use the consumer as a content creator for the brand. And we are doing that at the moment and we're going to continue to be at the forefront of this evolution in the future. And just as a proof of concept, if you look at the number of followers we have on TikTok today,and you compare it to our two main competitors, you will see that we are very close to them. Our share of voice in TikTok is by far bigger than our share of market, preparing the future. Now to be a bit more concrete about our new influence strategy and the proof of concept is what we do today with [indiscernible] I'll talk about speed cut in a minute. So we are designing specific activity for each of the life cycle of the product. For example, in a simplified way for Mostro and [indiscernible] will talk about that later on what we did in June 2023. So we were part of the cat walk of high-end fashion partners to showcase the product. The product wasn't available to the consumer. And then in Q4 2023, we used our main celebrities to increase the reach and the visibility of the product with Skepta and ASAP Rocky. The product was still not available to the consumer. And then in January 2024, we launched a product in selective distribution. And in Feb, we have created a specific cat walk during the New York Fashion Show in New York with a very strong impact. But before I comment the impact we had, let's have a look at this catwalk. [Presentation]

That was a very nice demonstration that we can make sport fashionable. So we had a massive impact. We are stealing all the headlines during the New York Fashion Show, 500 million impression on more than 50 million impressions in social media. I'm very proud to say that we have reached a large number of consumers. We have tripled our Google Search. And we have now customers calling every day, asking for the product. So it has been a very large success. And it is now the right time for us to expand even more the reach and the visibility of the franchise, to create even more demand for the product. We are following the same kind of sequence when it comes to Speedcat. With the same kind of success, Speedcat is already identified as a very big hit in the sports side market in the coming weeks and months. I am now very confident that Speedcat and Mostro will be commercial successes. And this is obviously because we come on trend on time with great product. But this is as well because we have now a very clear strategy of influence and a high discipline in implementation to make sure we maximize the demand for the product. Let's go now on the fourth pillar of my strategy, probably the most important, the brand campaign. For the first time in the last 10 years, and with the biggest investment ever, we're going to launch in April 2024, our brand campaign. The biggest investment ever, and for the first time in the last 10 years. That's a big event for us. To make sure we were going to be successful, we have defined a few rules. That was part of the brief. I'm going to share that with you. So first of all, some creative rules. So we know that we need to be creative and emotional, Arne mentioned it. Emotional advertising are at least 8x more efficient than nonemotional ones. If you think of it for a minute, again, as Arne said, what is the last one you remember? Probably highly emotional. The second one is distinctiveness. So it's a long-lasting discussion between marketers, why we should do differentiation of distinctiveness? We have now clear evidence that distinctiveness, sorry, is by far more efficient. But what does it mean exactly? Distinctiveness mean that we need to be relevant, consumer insight, unique linked to the bond, and we need to repeat the message with consistency. And that's what we're going to do with the brand campaign. And we have defined 2 new roles of investments as well. We know, and Arne mentioned it as well that to be remember, a campaign needs to be seen at least by 75% of the target 3x. That's a very expensive strategy. That's the only way to be remembered. And it doesn't mean, again, that we're going to invest more, we're going to invest differently. And that brings us to the second rule, 60-40. Looking at 600 brands during 20 years, we saw a pattern. We know that the optimum investment is 40% on short term, 60% on long term. Short term being product launches, building a franchise, conversion activities. 60% is highly emotional communication designed to engage the consumer. This is what we're going to do for the first time in the brand history. We're going to invest 60% of our media money into the brand. We are not going to spend money only to sell product, we're going to invest into the brand value. Now let's have some fun. Let's talk about the campaign. I think you have heard of it many times now already. So we believe we own speed as a brand. We believe it is in our DNA. We believe it is engaging for our core target. We believe fast offers a new perspective of the game. We believe when you go faster, you see the game differently, you can anticipate the next move. And as a consequence, we win. That's the unique point of view we're going to express during this campaign, that's the main theme, speed and the way we see it. In terms of creative direction, we're going to use all the codes of the superheroes. Why is it so? Because we believe it is relevant with the brand message, and we believe it is highly engaging for the Gen Zs, the teenagers. So you probably know that as well. How many times did you have to go to the movie theater to see this kind of movie. I did. So again, creative direction, superhero, very engaging for the core target. And we have a very clear call-to-action, see the game like we do. See is an invitation. The consumer in general and the Gen Zs in particular, they don't like orders. They like invitation. By the way, we tested this call-to-action in -- very successfully. And probably this is the main reason why, because it is an invitation. The game is on pitch and off pitch. The way we see the game is further faster. Very consistent with the bond mantra, very consistent with the brand positioning. You see here the first edit of our out-of-home campaign. You can see the athletes with a superhero posture. You can see in the background the lenticular effect to reinforce the speed and then a very big cat for branding and distinctiveness. Same creative for football, same creative direction, and we do the same for basketball here. For the first time ever in the brand history, we're going to have the same creative direction for all performance categories. And we're going to do that during the whole year of 2024, because we're going to launch the main film in April 2024 and then we're going to design spinoff for each of the main event of the year, year sport. Europe, Copa America, Olympics and the back to the NBA seasons in October. So again, for the first time in the brand history, we're going to have one campaign covering the whole year for all categories with one creative direction or one message. That's a big change. So after this film intro, I'm going to present you a trailer of this campaign. So it's not the campaign in itself. So you're going to see the -- some of the footage we're going to use and then the trailer is going to explain the whole concept. Let's go. [Presentation]

So we're going to use a big bunch of celebrities. I hope you liked it because apparently, the consumer does. So I didn't plan originally to share that with you, but I have to. So 2 weeks ago, we have decided to test a rough 30-second edit of this campaign. The original intention was just to look at what we could adjust and improve. The way we tested it was with System One, which is one of the gold standard in advertising testing. The way they do it is benchmarking. So they have more than 170,000 advertising in their database. So they benchmark on everything. And they have 2 main rating: One, it is long-term impact of the campaign and one it is short-term impact, what they call star rating and spike rating. And seriously, the reason why I'm presenting that to you today is because the results are going above expectations. Already with a rough cut, again without any post production, without any VF effect, without any color treatment, compared to polished advertising. So the one which are finished. We are already in the top 20% long term and on the top 15% on short term. It means that it's highly probable once we have done the adjustment, the post production, the VF effect, that we're going to be into the top 10 or top 5% of the whole advertising database. So that's really a great achievement for the team and a great news for the brand. In summary and to finish, what we are doing now to elevate the bond is we are pushing hard on the performance momentum and will continue to do so. We are reconnecting with the Gen Z through influence, and we are investing into the brand with a brand campaign. I believe it's a winning strategy, and that's only the first chapter of our new marketing at Puma. That's it for me for today. Thank you for your attention, and I'll leave it now to Maria to talk about the product.

Product is the center of every daily conversation. It is our core, our heart, actually is the main reason why we exist. For that reason, it was really an honor to put the vision and strategy of product. Our common understanding of product excellence. I'm Maria Valdes. I'm the CPO of this lovely brand. I've been working in the product organization for 13 years now, and actually was leading the biggest business unit as my previous role. Being a product dinosaur actually allows me not only to know what worked or didn't work the last years, I know very well the processes, how we build products and have a lot of ideas of how to actually reshape this role. The last months I've been focusing in 3 main areas: first of all, strengthening our product organization. During 2023, we reinforced our creative teams. We build up an apparel innovation team. And actually, we spend a lot of time with the different business unit leaders, shaping our strategy and defining our business opportunities. Second, we sharpen our identity and DNA. We are a sports company first, but we live in the beautiful spot between sports and culture. We have 75 years of history that will always allow us to double in ourselves and in the past, while creating products for the future. And last but not least, very important, was to drive a lot of newness and innovation. We have done a lot of newness and innovation, but we need to change the approach. Arne briefly mentioned, it's not about just putting a shoe on the shelf, it's also about how we are building equity in our franchises and how we are building franchises brand. The CPO organization or the product organization, actually, it's in 3 main sites. We have creative direction, we have innovations, as well as 7 different business units. We embrace the beauty of being based in different parts of the world, and while we have golf, basketball and running training based in U.S., we have the rest of the business units sitting here in Herzo. In addition, the creative direction and the integration team follows that structure, having part of the team in the U.S., but having the leaders here in headquarters. During the last years, actually, we have also been creating our original creation centers. Our local entities should allow the different teams locally to either support local sports or actually be reacting a bit faster when it comes to the sports side of the business. With this approach, actually, we have, yes, enhanced local product creation. We have been shortening our time length and being faster, being very honest with our mantra forever faster, but also allow us to really build local knowledge and also have much more local talents. Today, we have different teams around the world, all of them doing product creation. Shanghai, Ho Chi Minh, Bangalore, Boston, just to name some of them, have allowed us to reinforce our local strategy and react faster to new circumstances that the markets are showing us. Today, I'm very happy to announce our new product location that will continue to help us specifically align to our strategy to help us in the U.S., and that has to do with our new product creation center in LA. We call it the Puma Studio. It will be a dedicated space where not only our product teams, but also marketing teams are having creative ideas to life. We're going to have a location that brings creativity, environment where it's going to be workshops. Shanghai has tools to actually experiment, inspiring new ideas, focus in U.S. thinking first. It's a charity where we not only have amazing ambassadors, creating product with us, but it's also an area we took to get closer with the local talent, in a very relevant cultural territory. But what will always put us together as a team is that our DNA. We're 100% sports company in all the categories. Here, you can see in a very simple way how we structure our business, with 2 main insiders. Sports and performance. Even aligned with our mantra forever faster. While in sports, we will continue to push culture first -- forward, sorry, in the performance side, we will continue to push sports forward. Actually, you can see that through in our DNA. No matter what's the sport, basketball, Here, you can see it. With the performance side as well as the [indiscernible] inspiration. In the world of motorsport, where we can see the joy of the race is getting new territories and fast. Today, the world of motorsport is welcoming celebrities, fashion icons and many, many new fans. And the world of football. But I think by now, we all know that football is so much more than the minutes on the field. No matter what is going to be our starting point, is going to be sports. And authenticity in sport will give us the credibility to win in sports. But the task of each segment is slightly different. While in sports hub we will definitely address the sports trends, either through our archives and bring back or creation of new progressive designs. In the performance side, we will continue through innovation, push our ports forward. Let's take a look first on the performance side. Actually, we believe that our winning formula is in 3 main silos or 3 main drivers: building franchises brand, focusing continuous innovation, as well as introducing newness. And but I mean newness, is either new franchises after new territories or newness by our tech updates to make our franchise every day better. What do I mean by franchisees brand? First of all, future probably -- not -- future is -- not probably, is the best example that we have in our brand. For the last 6 years, it has been an outstanding journey, how every single version has been a better version of itself. Here, you can see when we started in 2019, a brand-new franchise that was focusing in the perfect fit, in the perfect touch and in the perfect agility, allowing really the players to be a genius in the field. Our journey consists in finding improvements with each version we release through either technology updates or really amazing design updates. Our goal is to create a boot packed of innovation, where actually our players can play phenomenal on the pitch, and this is where really -- where the pinnacle of innovation meets product. That formula, we applied in our main silos in the different sports categories. If we start with football, we base our business in 3 main hero franchises: future, with a clear USP of speed, touch and agility; ultra, after speed and lightweight; and king, with touch and comfort. But we don't stop just in football. Here, when we move into running, we base our offering, our biggest technology, Nitro, a leading form in the industry. Our hero franchises as well are focusing 3 clear benefits: deviate speed, velocity, cushioning as well as forever run stability. And the approach translates now into basketball. We're currently in the third generation of our signature model, LaMelo Ball, and we introduced our first performance basketball when it comes to All-Pro Nitro, having already a great success in North America, and with tremendous opportunities in the rest of the world. But we also -- we take her very seriously. We need to build performance ratability also for her. And our investment is really defining that equity also in the women's side. Our performance have been very clearly leading in the marketplace. And we have been able to provide women's fit in football, specific women's fit in our main franchises in running and actually having the first [indiscernible] model in a decade when it comes with the creation of [indiscernible] in North America. Our commitment with her doesn't stop there. And actually, last week, we announced our partnership with F1 Academy. These partnerships really underscore our commitment to motorsport, and actually supports our vision that whoever wants to play can play. We will continue to build products specifically for her. And here, we just have some examples in the pipeline. While we're doing specific collections in training under shape locks, with the customer's fit. We're going to continue creating collections, modest active wear, empowering the movement as well as making sure we support her in the maternity range, 4 different lifestyles for her. But our offer in performance relies on innovation. Our investment innovation is key for the future success. And first and foremost, it's important that we empower innovation, giving them a clear focus, but at the same time, giving the freedom of constant exploration of the new territories. We made the efforts to center most of our focus in 80% technology, 20% sustainability research, having a clear team when it comes to footwear and apparel and making sure we have a global presence, not only very close to the team but also very close to our sourcing entities. But who better than the leader of our innovations team, Roman, to talk us about what it means. [Presentation]

Our approach when it comes to innovation is very simple, but effective. First, we want to facilitate. It's important that we support and lead visionary technology and projects, not only internally within the brand, but also with our athletes. We need to incubate and validate, and that means it is important that we do research, test the technology, and that sometimes takes time, design long-term visions of where we take the next generation of our offer, and actually inspire. We need to make sure that our product teams feel that there is someone taking care of the future, making sure that we have light out projects or tests and trials that can further learn and help us to develop our commercial proposition. Innovation is all about collaboration and actually collaborations in many different ways. It's clear that the best collaboration we have now with our athletes. And tomorrow, Erin will say amazing stories how we have been developing products together with them. But it's also collaboration to how we're doing with our vendors. We can have great ideas, but we need to make them happen. And at the same time, yes, we're expert in one field, but there are so many experts out there in different fields that can help us to create and collaborate together. But the magic really happens when we connect the dots of research, development and define. Let me show you just a couple of examples. For the ones who are here, you might going to have the opportunity later today to take a look to this shoe, actually, the Fast-RB, the next level of bounce. When we say we empower innovation, we're really telling them no limits. And here is the example. They tell us we can put 1 plate, we put 3. They told us we can only put 40 millimeters, we put 60 millimeters. They put us no limits in the upper and we [indiscernible]. The RB stands for rule breaker. And actually, developing the shoes have helped us learn massively about how construction shoes, and you will see how this experimentation took us to new generations of Nitro and applications of many technologies. But let me tell you another one a bit more tangible. Here, a great example of a shoe only launched a couple of weeks ago. The Fast-R 2. The second generation of a high-speed proposition. This is made for our race date competition. It's really made to conquer your personal best. So I encourage you, for all the runners out there they are looking for a personal best, I promise you that this will definitely help you guys. It offers Nitro Elite technology, an unbeatable cut at speed and cushioning. So make sure you take a look later on our rotations. But actually, performance needs newness and its newness in areas where we're going after new territories when we're building franchise and in it's constant newness is updating its innovation. Let me show you some of the stuff that we have been doing the last month and what's coming. First of all, in football we introduced a third silo only last year, with King in 2023. Control never fits this comfortable. We introduced a silo that offers touch, comfort and stretch resistance. The king is back this time with variable design and innovative material. We move away from kangaroo leather and this time, we're introduced with K-leather, much better for the player, but also much better for the environment. A new King actually for a new generation. Here another example of a new franchise where we were after a new territory. In the basketball, we introduced the Scoot franchise, the first rookie signature ship. Inspired Ibrahim and his journey, have very disruptive and visible offer in the marketplace, in a slightly lower proposition than most of the signature models out there. Velocity. Here, we went with an update on the technology. We are in Velocity 3. Our intention here is to offer you speed and comfort. If I'm not wrong, it's the shoe that you got for running tomorrow. So I'm going to be the first one together with Erin to get all your fit and insights of that cushioning and speed. We promise you out there that is the perfect partner for you all and to running an everyday proposition. But newness, not always has to do with creating new franchise or tech update. Newness also had to do how we connect with the consumer, how we -- excitement with different things. And the fourth key -- and the approach that we have had, for example, here in football has been something that we have a very, very positive results. We ignited the beginning of the year with a 4 limited editions of the Manchester City Jersey with a Lunar proposition, but we also collaborate with the Pleasures, a more street wear brand to reinforce the fashion point of view of AC Milan. Both had impressive solid results, not only the performance side of the business but also in the nonperformance side of the business. I'll round up the newness with another way of bringing excitement to the party, a new collaboration with Hyrox, the sports of fitness racing. The beauty of this is 50% running, 50% training. For the ones who are not familiar, this is a very, very, very trendy execution. For the ones who haven't read the latest results, only for 2024, they already committed to 200,000 participatings in 63 different places in the world. And this is the perfect combination, as I mentioned of running and training. Erin also will touch base later tomorrow and actually in the rotations how our offer perfect complements all the different needs for the sports. And if that was not enough, an exciting year of product pipeline for 2024. This is the year of sports. This is the year of speed, and what a great year to update and come with a new ultra carbon in football for newness of speed, a new Deviate 3 and Deviate Elite in running, and come back together with the NBA season start with a new generation of LaMelo Ball 4. Performance credibility will always start with exceptional product, and we will always double down in product excellence. We are committed to this franchise and bringing consistency to this franchise. We're focusing on consumer testing and feedbacks and finding areas of improvement for the next generation of each of them. Here, you can see that the journey haven't started all at the same time. We started 6 years ago with football, we grant then with running, and we just started with basketball. Let's take a look at the other side of the business, sports style. When we talk about sports style, the intention is not that different. We need to build franchises brand, we need to focus on innovation, but mainly on design innovation, and we need to make sure that we bring newness to the marketplace, specifically on the path of trends. What is clear when it comes to franchisees' brand is, first, we don't want to become a fashion brand. It's our responsibility to make actually sports on trend. We have seen lately how sports is influencing every part of the world, and we have a unique opportunity, especially in this year sports, how to continue to influence. But it's important that we know what makes unique to Puma? What we have that other brands cannot really take? First, we have an amazing heritage. We have 75 years of history that will always allow us to inspire in ourselves, have reference from our self, have a starting point of sport of ourself, while actually making sure we're building [indiscernible]. Second, we are sports culture. We were the ones pioneering, believing that sport is much more than the minutes that you're playing in the field, and how that has merged into really different positions in the marketplace. And last but not least, we're not afraid to cross the border into the fashion. We have been pushing that border through our history, and we will continue to do that always with in sports. But it's important, when we're analyzing also, to identify what are those sports that are in trend. Today, low profile with the inspiration of motorsport is in trend. Today, when it comes to the bulkiness of certain shoes of skates, it's on trend as a look. And we also see [indiscernible]. It's really actually on trend. All areas where we can have a very active role on play. But when we are building franchises brand, it's crucial that we combine all those different elements, be unique, identify the sports trends and be very strategic with the life cycle of how you're doing. There's no one cohesive or ideal month of those life cycles. Some trends are faster, some trends are slower. But we need to be there, agile and nimble, to make sure that we are pioneers, and also we are direct into the trends. Create the trend, on trend and on time, has been something that we will continue to do. We need to acknowledge, especially when it comes to sports style, we haven't been pioneered creating the trends. We have been a brand that has been mainly on trend or capitalized in the trends. I truly believe that, that time is over. We believe that we have a role in the industry to also create the trend, take our set of time and invest influence in the next generation, especially when we see the trend coming in our direction when it comes to low profile. Let's start with the create the trend. And here with the example of Mostro. As Richard already mentioned, yes, we started already beginning of last year, incubating our low profile in different fashions, Ottolinger and Coperni are just 2 examples of what we put out there. We needed to make sure that we also invest in media and in seating, you need to educate the consumer, make everyone know how to sell it, how to wear it and make sure that you have it visible in the right influencers and media to make that happen. At the same time, yes, A$AP Rocky supported the look in the most visible event of Q4, Las Vegas, making sure that he also not only bring it back, but also in style, a progressive look to outstanding. And if that was not enough, yes, 2 weeks ago, we did a fashion show of 56 different looks, so that everybody doesn't know how to sell it, you have multiple ideas and dimensions of how to bring that up. It's a life. But who better than our Creative Director to show us a bit of that journey and how we got into the fashion show. [Presentation]

So clearly, the Mostro is reawaking and it really puts us in a [indiscernible] situation to start leading the next generation of the trend low profile. The journey just started. It just landed available for consumers in the last weeks. And we have an incredible pipeline that will come through the year '24. Let's move to the second chapter, on trend. We see today the skate trend, actually very visible in the marketplace, not really as a sport, more as a style. Oversized silhouettes, bulky silhouettes. So what a great opportunity for one of our biggest icons to come in a more XL version. Only some weeks ago, we relaunched Suede XL in a very iconical way. With a unisex appeal trend, we see this franchise selling very hot this year and the opportunity to scale it in the next months. In addition, we complement our Suede XL offer with some collaborations in the direction of skate. RIPNDIP or Pleasures allow us to bring credibility in that space, and we will have other collaborations during this year, making the same for us. If that was not enough, we brought the queen back, Rihanna. Since the day we announced Rihanna, beginning of the year, we have thousands of requests of bringing the icon, the Creeper back. We will have bring it back, what a better way to influence the skate look with a much more bulky oversize and fat laces to bring an edginess to this generation. If we talk about maximizing trends, definitely, we see [indiscernible] leading in this direction. It's the most visible trend out there, and probably only 2 brands can tell this story. We will definitely -- we just launched at end of last year, we'll make sure, with the strong pipeline that we have, that we will generate also some buzz in the marketplace. Our proposition, we kick it off end of last year with Dua Lipa, and what a better way to launch it together with her a video clip of [indiscernible]. We went with a female proposition first, much more colorful proposition and the opportunity to scale it also in different parts of the world in a very credible way. Either we use football superhero like Jack to amplify it on the men's side, or for local through Ivy in Korea with great successes. You will see a lot of that from our side during 2024, because we see we have an amazing credibility and actually opportunity to even scale it further. As here you can see just create the trend on turn or maximize the trend. Trends come and go. The important is that we are very close to the life cycle, and we spend not only timing on trend and maximizing the trend, as a brand we need to also make sure we invest on creating new trends to have a little proposition on that. However, we haven't been in the forefront of owning those trends. We have also have biggest credibility in the commercial side of it. But despite not owning those big trends in the past, if a house allow us to build a foundation to carry our business in very -- a lot of good sellers instead of one best sellers, that actually we can all agree is a very good risk -- very good for risk mitigation. But actually, when it comes to innovation in the nonperformance side, in the sports style side, design is very important. For that, we're extremely lucky. We're extremely lucky because we have a beauty for local and a great comeback for exploration when it comes to design. We have a strong branding. We have a strong heritage. We have a multi-category proposition as a brand, a multi-division. We can offer you the 360 look. Big part of the Puma DNA and the design aesthetic, it starts in these teams, making sure that Puma is always recognizable and have a unique identity in the marketplace. How we bring [indiscernible] and design is also a big part of collaboration. We collaborate with different brands to join together, going to new territories. We collaborate with different [indiscernible], our own designers to create a common specific language. But we also need to make sure that we collaborate with our supply, with our factories to make sure that all those ideas come to reality of first prototypes. But very important when it comes to the sports style side of the business is also to bring newness, to bring newness that is at the pace of the trend. And here, I'm going to guide you through a couple that will definitely will ignite year '24 and beyond. First of all, it's going to be another one in the low profile, because there's no better commercial answer to low profile than Speedcat. It's a Puma icon inspired in the world of motorsports, it's a classic ratio. But this time, we're going to bring it back to the new generation for the taste makers. We started this journey in Korea only some weeks ago, where we see that the trend is moving faster, and the launch event really and the first set of results confirm us that the consumer is really ready for the next step. In addition to Speedcat, we're going to have Inhale, also progressive runner, slightly lower to the ground. This time under umbrella by A$AP Rocky, under the umbrella of inspiration of Formula One and the different races, we will have the opportunity to go out there and come with a unique proposition in the marketplace, showing not only a new progressive look, but a new very iconical proposition of our brand. Continuing with newness and actually more in this scale direction. We're going to come with La France, a new franchise. The first signature of court model in a very long time. We still believe that after his generation on the bus that he had generated in the performance side, he's ready to go into the off court. And we are really looking forward how it's going to look in the different channel works towards the NBA games. Lastly, the evolution of the [indiscernible] trend. We believe [indiscernible] is the perfect commercial proposition to continue capitalizing this trend, restabling a classic today for the whole family. Here, you can see the path of our franchises in the sports style side of the business, having more classic proposition but also progressive proposition. Again, here, we're committed to stay consistent on these franchises and looking for the evolution of them always considering the trend, the uniqueness and the path of the marketplace. So as you can see, forever faster as a summary, we summarize with sports style and performance, pushing culture and sports further every time. Having a pipeline in both sides of the silos, extremely strong when it comes to always on, but a lot of newness that was integrated in '23, lot of newness coming in '24 and a lot of technical updates coming as well in a fantastic year of sports. We continue to build and improve innovation in both technology and design is crucial for our success. And no doubt, we're going to have a pipeline full of newness and excitement to make sure to keep engaged to our consumer. Thank you very much.

Okay. Let me bring that triangle home. We talked about brand strategy, brand elevation. We talked about the product excellence. Now let's talk about improvement of the distribution quality. When we talk about distribution, we always talk about consumer first. When I, let's say, also listened in the last years always about the whole conversation around DTC, I thought it was a very strange conversation. When you talk about a channel, you are not talking about the consumer, you are talking -- let's say, you're putting yourself, let's say, your own channel over the consumer, which is never a good idea. We are born as a product and brand company. This is how we were born in 1948. We're not born retailers, and we don't want to be retailers. Brand and product, that's our core competency. To reach the consumers, wholesale, our best partners because we believe they can deliver the best service to our consumers. I think that slide is probably the best description of our consumer-first strategy and how wholesale plays a integral part of reaching them. They have the distribution reach as born retailers, their core competency. They have an amazing service excellence, also with all the -- huge footfall, they know exactly the consumers inside out, and they are a valuable partner for us of giving us input in our co-creation of the products. And finally, they play a curator role, a source of credibility for the consumer to reassure them in their purchasing behavior. I think when you look at that slide, I think it simplifies quite nicely the role of a curator, because our industry is very broad. We have the beauty of playing in the very technical sports specialist field, general sporting goods, family footwear, athletic exposure, the up to premium when we talk about any kid-size and sneakers and stuff, playing along a huge amount of price points, starting at entry price propositions and family footwear, $50, $60 up to $200 when you talk on the sports specialist side or premium side. And if you want, let's say, if you imagine the consumer sport specialist, somebody who really wants, let's say, to improve their skills on the pitch, they go to the specialist like [indiscernible] Unisport or Prodirect to get the right consultation on their purchase. If they want, let's say, to understand what is the best price value meeting my need, they go to our partners with [indiscernible], or they want to know what the latest on trend, they go to our athletic specialty partners or premium partners. These are important roles for our wholesale partners. And this is also a role which we don't want and also cannot play. This is not our role as brand and product company. So when we talk about our wholesale partnership model, I mean, it's clear that we are not only nice guys, which we are. But that's also -- the whole relationship is built based on trust, agility, and reliability. And I think also with our market share or sales share of 25% in DTC only, which has the complementary role, there's nobody else who can play that role as credible as we can. And the whole relationship is also built on co-creation. Let us understand your consumer insight, turn that into a product proposition to excite your consumer. It's about integrating our businesses further. We're establishing the EDIs, APIs to exchange data to understand, let's say, how we can realize more real time the business opportunity. And for me, also the future is that we are integrating more of our inventories. Because if we are really having the same objective of putting consumer first, offering the most seamless service we, as a brand and product company, should not be obsessed with the idea that we close the sales. It's about the consumer who should wear Puma and have the best experience in doing so. Now I could talk a lot about wholesale as our partners, but we thought it's the best we let our customers speak. So let's have a view. [Presentation]

All right. So I mean it was a nice roster of different customers, sports, sports specialty, general sporting goods as well as on the athletic specialty side and the premium side. I think it's clearly it's a -- with fantastic opportunities with our partners, and they're reconfirming, I think, our momentum, which we have on the performance side. I think it's also very encouraging on the sports specialty side -- athletic specialty side that the customers already feel that we are changing to focus on their consumer. And they were starting to do things differently, and that is I think a big encouragement for only 12 months being back. What's the role of DTC? DTC has a complementary role to play. We will take side, but also service the consumers. And we do that around 3 pillars. DTC needs to play the home of the brand. We want to create demand via storytelling, say specifically not we are chasing the revenues here. We want to create the demand. Our outlets keep the market clean. There's no single better way to liquidate inventory and then also, a mono-branded markets where wholesale is not existing or has gaps in all the different channels which I had, DTC needs to fill that gap. So we are also complementing distribution points, which our wholesale partners are currently not fulfilling. On the brick-and-mortar side, the home of the brands flagship stores play an important role. We need space, and you will see that when you walk the showrooms tomorrow, it's an amazing product out there. To tell the story, we need to go into big flagship stores. Otherwise, we cannot show the full strength of our assortment and our products. So far, we only have 1 flagship store, which really deserves the name of a flagship store. Bigger than 1,000 square meter. New York Fifth Avenue. We are doubling down. We are finally and Shirley was very quick on this one when we gave her the brief. We're finally opened the first flagship store in Shanghai, Huaihai road. We're further extending our flagship stores in Las Vegas being fully on this trip, amazing traffic fully, let's say, also situated very well for the F1 formula. And finally, we have been looking at the full year 2023 for the perfect location. Only last week, I was able to sign the lease. We are also finally with a real flagship store in Europe, the first one, Oxford Street, I believe, the best location with the best facade. So we look very, very strong. As a home of the brand, we also need to deliver online, excite the consumer in the digital journey. The ambition is, we are an integral touch point in the consumer's journey and the journey from discovery to purchase. So we want to be the face of the brand and drive the engagement. It needs to be the source where we're learning more about the consumer, providing the consumer insight Richard was talking about, understanding to feed our product as well as marketing engine and also to provide a seamlessly tech offering to make sure they have a great experience. One important part is the PUMA app, which we have rolled out further in the year 2023, we're now live at least 6 years and the KPIs are very encouraging for us. We see higher conversion, higher ATVs and a higher session duration. And this session duration is also so important because then the consumer can further engage together with the PUMA brand. Now we take the learnings and further upgrading our technology, the ambition to have an even better performance, easier maintenance and faster deployment. And then in the second half of this year we will start to roll out with an increased speed. I talked about the outlets. I also play an important role. They keep the market. There is no better way to clear the excess inventory. It's completely on brand and with the self-service opportunities and the way they are located it, they also provide a great source of profit for us. And then I talked about the third role of DTC, complementing the wholesale landscape, where there are gaps. India is a great example for this one because it's completely monobranded, but also, as I said, in Latin America, there are certain gaps which we are fulfilling. To talk also further about these 2 important markets, let me invite first, our Managing Director, Carlos Laje on stage. Thanks, Carlos. Coming all the way from Santiago to Chile to join us today. Carlos, you have been 25 years with the company.

26 years, this March. This month.

Okay. Fantastic. Since, I think, more than 20 years, you're Mr. PUMA Latin America, the founding father, even from, let's say, some of the subsidiaries in that region. I mean, tell us, let's say, you've been in the market for 20 years. How do you see the opportunities in the Latin American market?

Thank you. Well, basically, Latin America, it's a young region and definitely a sports-oriented region. So basically, there is a very tight connection between sports, where we are obviously very strong at and the natural culture of our region. So there's a lot of opportunities not only because of the future growth and a big middle class that we have there, but also in the expansion of the lifestyle side of our business, basically to that strong connection between sports and the culture of the region. Additionally to that, after COVID, after the pandemic, there was a big increase in the practice of sports and that put us in a very good position in order to continue our growth because we have a very good basis to start with.

Now I think we are a very strong brand in Latin America, which is also reflected. I mean we are in 5 markets in Latin America and 2 of them, you're already the #2. And the third one, you are already scratching the surface to become #2. Tell us a bit, let's say, about the strength of the brand in Latin America and its legacy?

Well, we have a long history particularly in the region based -- it is -- Latin America is a very football oriented region, and we have a long history of athletes and ambassadors in the region. So basically, we can have this opportunity of building up the brand based on a solid foundation. In Latin America, for instance, we have a 95% of aided awareness. So we -- we again, we have the foundation to build upon the future growth of the brand.

And I mean, how do you make sure we are staying relevant to the consumer today?

Well, basically, in addition to the history that we have, we have a very good portfolio of athletes that play together with international assets that we have. In each one of our countries, starting with Brazil, with Palmeras or [indiscernible] in Mexico, we do have a good representation in each one of the markets. One of the key things we would like to mention is that in this year, we started the relationship with CONMEBOL, the South American Football Association by which we're going to be the official technical sponsor of all the clubs and national tournaments. And that means that we will be the technical sponsor of the Future Cup America and the United States, but also Copa Libertadores and Copa Sudamericana among other tournaments.

I mean we are also short to the financial community. I mean you had amazing strong growth, I mean, along the -- especially in the last 2 years. And I mean we have been also working for a long time together. Tell us, I'd say a bit about the sustainability of the growth which we have seen.

Well, basically, there was a continuous of our continuum in the history of the evolution of the sale of Latin America that was in parallel with our evolution of top of mind. Top of mind meaning the first brand that comes to mind when you ask -- when you ask a consumer to mention athletic brands. So fortunately or as a consequence of that, we feel that there is a consistency in the growth that could be maintained forward because they go together with the evolution of the strength of the brand.

Just to make sure everybody understands. So top of mind is a simplified KPI of the whole brand funnel, which we have shown. And when we talk about sustainable growth, making sure commercial success and brand strength is at the same level. This is what we are talking about. Carlos, tell us a bit, let's say, I mean, with that's a strong growth trajectory, let's say, what are the biggest challenges or risks which you are seeing?

Well, fortunately, we've been growing very aggressively in 2019. We defined that we wanted to double our business by 2025, and we managed to do it by 2022, which is a good thing. Bad thing that comes with that is that it generated a lot of stress in our distribution system. We grew much faster than what we expected.

Distribution system, you might...

Meaning the warehouse -- sorry. In our warehouses. So we tackled that issue, and we are opening a new big project in Mexico this year and another one in Chile. So we do have a lot of orders. We do have a lot of growth potential. Unfortunately, during this transition, we might have a tough time delivering those orders. So we expect for this year to have a much softer Q1 and a first semester that will be a little bit softer and picking up with a much stronger second semester after we can capitalize all the growth that we have in our hands.

I think that's always the flip side of success that we need to also grow the capacities at the same time. Tell us, let's say, about, let's say, the long-term success formula for LatAm.

Well, basically, we're sporting goods companies, so we are anchored in sports. We have a very strong performance DNA, which we mentioned a little bit of some of the historical athletes, but we do have also a strong portfolio of athletes and events in all the performance categories. In addition to that, we managed to be very focused in the way we approach our histories. So the whole idea of you're bigger, better, you can see and the consistency in which we are extremely visible in each one of the stories that we tell. Additionally to that, we found a very good balance between international ambassadors and local ambassadors. So you will see that each one of the countries have a very solid portfolio of local ambassadors that complement the job of the international ones. There's another key thing that we've been doing in the past years, which is franchise management. So the way we manage our product life cycle gives us a toolbox to be able to have in hand and ready the right of shoe, the right products in order to catch every possible future trend.

And if I may add on this one. I think the low single-digit market share, which I mentioned for Sportstyle Prime, which is true for Europe and U.S., that's something you cannot relate to Latin America because of the brand strength, which you have already unveiled there.

No. Fortunately, we -- we're already in the high double digits in Latin America and that is the consequence of exactly this product life cycle management. We feel that we have a good portfolio of silhouettes that are very strong, and we are handling very closely to make sure that they have enough longevity.

Great. I believe as you couldn't bring your customers, you at least brought some videos, let's check that out. [Presentation]

Thank you, Carlos, for bringing that presentation along.

Thank you very much. And we have the team, we have everything to continue winning. So we're very confident about the future.

Thank you very much.

As we know that India is always of a special interest, we also asked Karthik, our Managing Director, India to join us for today. Karthik, please join me on stage. Karthik, maybe as a quick introduction to the group. You've been one of the founding members back in the days from PUMA India. Since last 10 years, we have worked very closely here in DTC together on -- when we were the Global Head of DTC. Now you're back in India, since it's almost 1 year, tell us a bit, let's say, how you have seen that the Indian market has changed after 10 years, you have been away.

Yes, correct. First of all, good day, and hello to you all. Yes, I left India about a dozen years back and I think, when I left India it was a very exotic place to be from I think today, it's one of the most exciting places to be at. And I think as maybe a bit of context, I think as a country, we have stumbled our way from, let's say, a reckless political experiment, giving universal franchise, everybody as a large nation to now what I consider to be also one of the greatest economic transformations of our time, okay? So fastest-growing large economy. We had a large nation. We are a young nation, the largest number of Gen Zs in the world. And we're an aspiring nation. Actually, it's first generation that's tasting wealth, and that's tasting success. So there's a huge runway ahead of us. I think the second point, I think Indians are waking up to the fact that sports not only helps you look good, feel better, but it has the profound power to really to shape and to change the social fabric of our country. Actually, 20% of all medals that we won in the Olympics has come in the last -- in all the history of Olympics has come in the last one. Asian games, first time we won 100 medals. So I think this is fueling a deep desire to participate in sport and to make this an integral part of life. And I think for the first time, in our young -- let's say, history, the 3 forces have come together: society, economics, political change. They're all converging at the same time. And this is really helping us because it is really fueling both the demand side of economics as well as the supply side. So very simply, the way you need to think of India, I always say this is think of us as a sliver of Europe at the top. I think of us as a burgeoning Asia in the middle and very large Africa and aspiring Africa at the bottom, right? So yes, we're a juggernaut. We are unstoppable. I think this is really India's decade. And yes, it's going to work.

Karthik, now we are the #1 brand in India, but I mean, this doesn't come let's say for free. I mean we were, let's say, a late entrant into the market when you -- when you found it, it's together with the rest of the team, India. Tell us, let's say, how we can late say from a late entrant to the market leader?

Exactly. A lot of if has to do with the challenge attitude that we spoke of being hungry is 0% complacency. We entered 10 years late and we have been #1 since the last 4 years, minimum. And I think before we go into reasons why we are #1, but I think it's very important to state that we've all been grounded in the belief that India needs an India-specific, right? I mean, it is -- in most cases, it's the final frontier. It always turns the global order upside down for most global companies. So I think it's been like 3 primary areas where we've excelled and where we've been very, very strong. So as supply chain and product, we are not only a commercial subsidiary, we're a commercial and design subsidiary. So we design source and produce considerable portion of our assortment locally, which also enables us to be fast. I think we've heard a lot about speed being super power. We are very, very fast there. I think the second thing has been our brand and marketing. We have the strongest and the widest roster of athletes and ambassadors in the market and we've always managed to stand out with our very, very high decibel campaigns which are relevant, which are meaningful and engaging. I don't know how many of you are aware but, for example, I'm wearing the same jacket. Last year, we ran a campaign which is shattering a gender bias. So I'll also encourage all of you to open your phones and look at Google. Type in, for example, in Germany, the Germany football captain and you would now get the men's captain as well as the women's captain, social experiment where we kind of forced Google to change it's algorithm. And the last is, I think, Arne mentioned in the absence of developed wholesale network. We established the largest distribution network, and we did this off-line, but we didn't do this the expense of online. We're also the largest brand online. So I think, yes, these are the main reasons why we won.

And Karthik, I mean, when we talk about the local production and local footprint, I mean, maybe you talk a bit about the BIS legislation and standards coming into play and how this affecting footwear market in India?

Good question. I think BIS is very short. I mean, it's India's Make and India's agenda. So we are deeply committed to partnering with the government to achieve that. We will continue to strengthen and deepen our sourcing capabilities in India. They want to position India as in a very attractive destination for a China [ plus one ] strategy for most global corporations and essentially starting January 1, all footwear that is being -- let's say, produced has to be BIS certified. And we have a head start there compared to the rest.

It's always good to hear. I mean you don't have that slide with you, but I mean when we look, let's say that the brand funnel overall, I mean India was a #1 country is, let's say, where we see let's say, there is no gap. There is no gap between, let's say, us and the competition. Again, let's say, showing what sustainable growth means. Tell us, let's say, how you will continue to win as a #1 in that market?

Yes. So I think, obviously, competition is there. They have seen our success. They have also come to join the party, and we actually welcome it because we see it as 2 benefits, right? One is it will grow the market and the second is it helps us to get better. So we're very open to that. But at the same time, we're very confident of not only defending, but also extending our turf and primarily because I think -- we will continue to invest in the brand, strength in our roster, especially on the sports side. We're just a new team -- IPL team. We will announce our first federation very soon. We always have exciting and engaging ways to engage with our consumers. Local sourcing, I think we spoke about it, we have a headstart. Most brands are just starting on the journey. So I think, it's going to take them many quarters to replicate it. And I think it would -- must mention this, I think we honestly -- and since, this is not lip service, but we have the best team in the industry. We have created and cultivated a culture that thrives. We have been recognized as the top 5 employees in the market. Yes, we have the stability. We have the skills, we have the challenger attitude, not only challenge competition, but challenge ourselves and keep pushing for the next level. So in short, we're bullish in India -- we're extremely bullish on Team India.

Thank you very much, Karthik, for joining us today.

Thank you.

So Carlos and Kartik are around for the full 2 days. So please always approach them if you have any questions regarding to Latin America and India. But I think, let's say, when there's one thing also, there's a common theme, which you got when you listen to Carlos as well as Karthik, I mean the way PUMA is succeeding in, the way we are working is that we put a lot of emphasis on the local entrepreneurship making sure we have the competence in the countries to execute against local strategies. And for these local strategies, we're banking on local talent. I'm super proud that all of our countries are led by locals because I really believe that they you need to be ingrained into the culture to understand also the consumer and how to influence them. And I think our P&O team has done an outstanding job of really growing that strong pipeline of future leaders in every single country. And I think it is our lean structures. The way they can communicate with global is direct, and that gives us the speed, direct access to Richard and his marketing team, direct access to Maria and her product team. So we cut out all that bull shit and have straight lines, what do you need, what do we need to deliver. Now let me bring it home. I said, it was our road to 2025 and beyond. You know our financial ambitions, which we already communicated in 2018 being a EUR 10 billion company and making 10% EBIT. We also communicated that already in 2018, the important assumptions that the currencies need to be at [ 1.15 ] for the U.S. dollar and euro exchange rate. Hubert and myself already explained to you during the earnings call on Tuesday that we see significant headwinds from the currencies. It's EUR 400 million in 2023, another EUR 200 million coming in 2024. So that's EUR 600 million as a headwind on the top line. And also on the gross profit margin, it's 170 basis points, which we are expecting for 2025. I think the math is very simple. We take USD 3 billion in hedge, which we need to hedge because we bought it from Far East and we are $0.06 below where we need to be and do the math, and then you add the 170 basis points. So in that adverse environment, which is also very volatile, we need to focus on our controllables. We need to focus on sustainable growth so our journey until 2025 is that we want to grow high single digit as a CAGR. And that will put us in a position as we see the market is growing with mid-single digit, and we're continuing to grab market share. But in a more sustainable way, which is not showing the volatility as we have been exposed to in the last years especially in China, and in the U.S. The building blocks to this one, and I mentioned already during on Tuesday on the call is we see, let's say, that our emerging markets are continuing to contribute more over proportionately to that growth, and we see single-digit growth in North America as well in Europe. So the arrows mean single-digit and double-digit growth. Due to that trajectory of the regions, also we believe direct-to-consumer is continuing to grow faster. I explained it to you in these countries, DTC has a heavier role to play because there are gaps in the wholesale environment. So it's not a change in strategy. It's a result of the regional trajectories of the emerging markets. So for 2025, we believe we will be at the 8% to 8.5% profitability. The 170 basis point is the gaps to the 10%, which we are targeting. With that increased profitability, we also believe that our cash flow will get significantly stronger. And by 2025, we should have 6% to 7.5% free cash flow in percent of net sales. And with that, new cash flow, which we have available, we reviewed the priorities for our cash allocation. Number 1 priority remains our sustainable -- investing into our sustainable and profitable growth but allowed us, as you saw and read this morning to also revisit our strategy on the shareholder payout. So for the sustainable and profitable growth, the priorities are continuing to invest in direct-to-consumer continuing to open distribution center, modernize them to have the capacity. We heard it from Nicolas earlier with, let's say, his strong growth, we need to also increase the warehouse capacity to have the foundation for future growth and make sure we have also the system infrastructure to enable that growth. On the DTC side, we're expecting to open 1 to 2 flagship stores per year, and I already showed you, let's say, what is on our agenda for 2024 and 2025. And that means, let's say, for the commercial stores, the distribution points which where we need to complement wholesale will be around 50 per annum. And then on the technology side, I already talked you through. So our cash allocation strategy for our shareholders is changing from payout, which was previously 25% to 35% with our strong improvement in cash flow. We are revising that and it's up to 50% now with the core pillar being the distribution of dividend, which will always be 25% to 40% of our net core income. And then we complement that with a component of share buybacks accounting for 10% to 25% of net income. As you have read this morning, we still had a resolution from the AGM, which puts us into a position to announce the first tranche. The resolution ends or in 14 months, so that's why we have announced only a first tranche of EUR 100 million, which we'll execute immediately as we speak. Obviously, we'll go to the AGM and ask for approval for the extension of the share buyback. Let us wrap up, let's say, the last, what is it now? 2 hours 15 minutes. I hope you all are clear that PUMA is the challenger, and I hope you see the game as we do, which is that we have significant opportunities out there. In Sportstyle Prime, you also heard our wholesale customer here. They see that we are starting to focus on their consumer. They start to see that we're doing things differently. And we have already there consumer on the performance side. It's the same kit we already, let's say, considers PUMA as their first choice in performance, in football, in basketball. Now we need to transition that relevance also on the Prime side. In running, we're the fastest growing brand in Europe. After 3 hours, we have only -- we have already entered the top 10, for the strongest growth trajectory. And one of the most interesting biggest markets, also from apparel side, the training apparel side is almost white canvas for us. U.S. only 3% market share. China, only 1 percentage market share. Humongous opportunity for us to unveil our strength, which we have shown in all other markets globally. The biggest unlock is the brand elevation. I think Richard was very clear on our, strategy how we will win and make sure that this gives us the sustainability of our growth. So now I need to complement the picture I showed you earlier. I believe the next phase of PUMA is that sustainable growth to have that substance get that volatility out of our big swings, which we saw in the markets and then I believe that, with that brand strength, which we are building, where we're seeing market share, we can accelerate our market share gains again in 2026 and beyond. As we cannot only rely on our currencies to bounce back for the 10%, the brand elevation will also be key to improve our profitability because if we strengthen the brand, we will win in Sportstyle Prime that has the highest product margins in the industry. We can now have the -- can focus on training, we can participate at the high apparel margins in that segment. The brand elevation will lead that we can have higher full price realization and with our new strategy in China can also unlock so that China becomes a higher share of our sales mix. We are significantly lower than competition about the weight China has in our sales mix. And finally, brand elevation will build the foundation for accelerated gains, accelerated growth, which will have then the opportunity to realize an operational leverage. I think you heard me, you heard the other team just speak. There's a significant confidence in our ability to execute. We all see we have an amazing brand with great product with the best partners in the industry and the way we are working fast, lean and agile gives us a significant competitive edge and you have a team, which is the hungriest out there. So thank you very much. Talking about hungry. I think, it's a very good moment in time to get a coffee. We will meet again here at 4. As Gottfried has said, we have a very special guest. And as we just -- I mean, obviously, the special guest comes for you. But we also want our PUMA family to join us because it's a very special guest. So you will see at 4:00 p.m., a few PUMA family members joining us for that session. It's 30 minutes and then we go back to our normal agenda. So enjoy your coffee, and let's meet again here at 4. Thank you very much. [Break]

All right, everybody. It feels good to have some energy in this room. Now the PUMA family members are a bit privileged because they already know who's coming on stage with me, the investors, the capital market participants not yet, so let's check this out on the video. [Presentation]

All right. Hi, [ Pepco ] Great to have you here. Thank you for coming. I know today is your free day, but you made it possible to join us today for the Capital Market Day and the first time also you're meeting the PUMA family.

Look, Pep. This morning, we talked about the morning. I mean after the first afternoon session, we talked about the capital market about our ambition -- continued ambition to be the challenger -- to challenge the world of sports and sports culture. I mean is that something you can relate to? I mean you have always been on the top champion everywhere where you played and also where you have coach. Is that the role you can relate to be the challenger?

Yes, I think all of us, we are -- first of all, it's a pleasure to be here for the first time. So for many years, we are together, but never got the chance for the calendar for never was possible. And I'm happy -- absolutely delighted to be here. And like you are in the sports, I would say, world to most of you working in this environment. So the challenge always that's in front of you. Always is there. So it's just to -- it doesn't matter what happened in the past, what they have done, good or bad. Always you have the opportunity, I would say, with the next target, that's what we are living right now.

I mean now you have been leading all the clubs to become the champions. I mean, Manchester City with Bayern Munich, FC Basel. The only coach have made it to win 2 triples in history. So I mean how are you challenging yourself to -- what's the next ambition you have now?

What is the highest mountain?

Mount Everest.

It's always there. Always just have to go there. But to ride there, you have to see which is next one. So started the season on the media or people talk, how many seasons went through, forget about it, forget about it, it's not about that. It's what's next. Next was yesterday 2 years ago, [ Utah ] tomorrow will be United. That is the only challenge. You're much far away, you're distract. You cannot be focused. At the end, the competition has to be in the right moment, the right tempo, be ready and we are distract for the far away in the stupid things.

Always only focus on the next step.

Next one. It's not a genius sentence to say, that's one. It's the real truth.

It seems to work.

I would say it works me, for us perfectly. So as a manager. So be scared to lose the game, be scared that is not going too well. That's why the warning is always ready and work a lot, work a lot, as much you know your team, as much you know your opening, as much you process like something, the formation. And after, all I think, arrived here or here and after you take the decision. And that rarely, you fail it, rarely.

Tell us a bit, I mean how you have led, let's say, all clubs to the top. I mean, what is it, let's say, your secret sauce? How do you get the best out of the players? And even more importantly, not only how do you make, let's say, all the ingredients work that the best players become the best team?

I would say it's a process, as not to say, is a mechanic thing that you say something that this player work for this club, and how many players works in one way in one environment, and go to the other environment and it doesn't work for the managers the same. So if you relate to it that success, it's quite, quite similar. It's the power clubs, the Barcelona, Bayern Munich and Manchester City, they are financially, I would say. Without that, you cannot have the best players. And that time, the manager can be good, but success to win titles, titles is no way, impossible. And after I would say that the all clubs we have, have the higher Q1 vision before for the CEO in the same path, the Sport Director, the manager the players. When everyone is in the same path, sooner or later in the big clubs, you have success. The problem is when the guys from there said, "oh, I would like to play that way, we have a grandmother like to play that way and the Sport Directors do not agree, the CEO go another way and the manager want to play in one way that the Sport Directors don't believe and they buy me the players that I cannot use him for way I want to play in after that. It's impossible to have success.

But this is on what I recognize whenever I'm with you guys in a city that I mean it feels like you're one big family, the way you're working. I mean, also together with [ Ferhan ] and [indiscernible], you -- I mean everybody let's stay, so tight, fully aligned.

A part of that, we are like in City because for [indiscernible] our Sport Director. We met each other from -- whether 20 years, 25 years -- I play with [indiscernible] my sport director, our families, we know each other. We were holidays together. So -- and we are not here to blame, you make a mistake. I make a mistake. It's just, okay, it's not going well, what is the solution? So in the beginning of the season, never ever we expect everything will be of flowers roads and incredible comfortable environment, always we will have a problem for sure, and that is nice. So that challenge is said, how you handle the chaos. This is the most important thing in a [indiscernible]. So you have to be aware the problems are here with one player or players, opponents, injures and your bad moods and all this kind of stuff. And that is, okay, that's why I am here, that's why we are here. If it was easy, another person will be in my position. That's for sure. Like it's not easy. That's why we're here. We have to find the way to find a solution the right time to make, okay, the problem is not lose the game, how you work on that situation. And this is being with people our friends is much easier.

I think that's really, let's say, the values and also the way we are working, I think that's -- there are a lot of similarities between Manchester City, because I think, as we talk internally about the PUMA family, really build, let's say, on the cost integrity. And yes, there's no b*********** on, really they're working closely together.

No, I would say here, all the people working here, and they are not happy every day coming here to work. My advice go and go another way, and play in another way. You cannot -- no, that's true.

Is there anybody not happy here?

A lot.

Okay. No, we're in good hands.

No, it is the truth. So you're right, okay, you have to another option, you have to stay. But the best of yourself, I said many times to the players in the beginning of the transfer winter in summertime and winter time and times for winters said, You are not happy. You have to go, right to leave. I cannot give -- you cannot give me. You cannot give to the club the better view, if you are not fine going every day, knowing that there are days that you are sad. Yes, of course. So one of the most difficult thing to understand is when you fight against your mood ahead your feeling. When you are sad, you're sad, that it's not a terminal. So tomorrow, it will be better. So when you are happy, so okay, you are happy. So don't fight against your feelings, it's just part of that. But going to work and been -- yes, I'd like to be here -- that is the best.

I think you always talk about the attitude and I think, you're just saying, again, the attitude of the player. And so that -- the attitude is more important, to say, than the physical conditions or the technical -- the attitude is what makes the champion?

There is one process. I do every single time when after the game, I review our game to see it happen what we -- the plan of the game happen or it didn't happen or whatever. And when I assume my later with a wide angle, I see all the players, 22 players, even the bench players. One of the things I pay a lot of attention, apart of tactic decisions. I know about a good decision inside of them is the body language. How they behave in a good action and bad action, how they celebrate a block for a player like it's a goal and how the people at the bench are involved in the game or not, this kind of stuff, and we talk a lot about that. And in football, in life, so the best -- the most important action in football is next one. Is the next one. So the action is done. This cannot -- is the next one. And you cannot do it better. If your body language is not proper. Your body language is negative, he is talent like that. When you highlight that. It's impossible, do it well, impossible. How we celebrate the goals, how we all this kind of ridiculous stuff is massively, massively important in a team because, of course, you'll need to make a bad action, what is the problem? So the problem is how you react and the best goal for us, the best tennis players, the best individual at sports. Is they know we're going to miss, but how? Not forget, because forget is there is how, okay, they are ready for the next one. And this in football in all the sports is massively important.

I can fully relate to this one. Look, we've been working together multiple years in our partnership. Ken and I mean, you have worked also with the different partners, when you had were with [indiscernible] or with Bayern Munich. What would you consider, let's say, as the strength in our partnership between Manchester City and PUMA?

Well, I'm a lucky guy. I've been in Nike, when I was in Barcelona. Barcelona, I was in Nike. I've been in Adidas when I was in the Bayern Munich. With that and now for many years, I was with PUMA even before when Manchester City was Nike. And I will not say bad words about Nike or Adidas with the people I work. But I had the feeling here for the people is are closer -- they are for the little details, it's like -- I don't know. I don't want to talk...

We also don't want you to talk about it.

Don't misunderstand me. But it's like the proximity that I felt here from the day 1. It was a little bit different. I had the feeling feel right now, which I know how the last period the investment that PUMA has done to come on getting better, getting better, getting better, what I said. So -- at the end, Manchester City all the time was in the middle of the table bottom of the table. And one people from Abu Dhabi, our owner and Chairman, invest a lot in club facilities, you know that facilities and are started to good managers, I'm sorry, good players and -- and from there, the embedment start to grow up, grow up, grow up. So always not a process for 1 year, 2 years or 3 years enough that will happen. We have become the best team in the world because we want all the best. So Puma had that feeling. So it's like building something in road and as much you are committed, you feel it at the end you will get it.

That's what we called sustainable growth. And I think what is very important for me, and I think you said it, I mean, I always tell the team, I mean, our company was born in 1948 by the idea to service the athlete and also the clubs. And I think, that's something which is really true to our DNA, that service attitude, let's say, talking with you understanding your needs. And at the end, I think, we can learn so much from the professionals helping us to design better shoes and develop better shoes. Look, I think there are probably a lot of questions also from our investors. I think you have a unique opportunity. I think we have time for 2 or 3 questions here? In the earnings calls. Yes, you asked me a lot of questions. Okay. Here we go. Here we go.

Maybe just -- I mean, you are super successful. [ Javier Lonzo ] is now making his way through the ranks and becoming a very successful manager. What do you think it is about the Spanish DNA and where you come from that is making a lot of Spanish coaches super successful in the world of football?

Well, that's a good question. I don't think -- I'm not agree with that the Spanish people manager are different that Italian or Germany or Brazil or Argentina, I think like we travel a lot, or I travel a lot and realized that and everywhere there are -- we are the same. We have everyone have mom and dad and have good things, about things, the same desire, wishes, good moment, bad moment. So -- and nothing is different. Particularly, you say why this manager's special talent is good. I was fortunate to have him Bayern munich, 1.5 year. Yes, 1.5 years, 2 years. And I remember, arriving in -- after the game playing Saturday and after you have Champions League on Wednesday or Winter's League or [indiscernible] Wednesday. And in the corridor, how they play? Which system. They play 4 in the back, 5 in the back. I saw the winger coming more inside than outside and I said, guy, this guy asking question is our manager. They are holding midfielder, they're holding midfielder is completely like a winger, so only Kingsley Coman is here. He will be here then. So it's not about holding midfield guys, to have the vision, Harry, what happened? Holding midfielder has not to play good has to let them play the team good and [indiscernible] the curiosity to learn and the position you played. You had the feeling that we'll help what he's doing. It's really impressive so arrived last season, he was in the bottom, Leverkusen. And qualify for up in NAFTA. This isn't only team in the whole [indiscernible]. So really, really good. I'm happy for him.

Do you have one more question? Here we go.

Good afternoon. How often did you change your game system or strategy depending on the different players and different resources you have?

Yes, tell me how the opponent is going to play, and I'm going to tell you the way I'm going to defend you, I'm going to attack you.

With the players I have?

Because it's different when the players play opponent play 4 in the back or 5 in the guard, and man marking, zonal marking, it's complete long ball make a buildup from the keeper, a bit different. That is nice. We'll be so boring our job doing the same. And then what they're going to do for and after to try to defend that way they do and to attack what they defend, that is what is nice and after, of course, adjust for the quality of the players. So I'm going to do this to bring them the ball there with the guy has to dribble his mate, his opponent. And the guy hasn't the quality to dribble. So there's no sense, so after there is a little quality of the skills. But in general, is like that, tell me how you defend and they're going to try how we'll attack you.

Can you talk a little bit about how you work with the product team and the feedback that you give them, how that's been implemented in the past and especially the shoes would be helpful?

Especially shoes? The feedback? I have to go and talk with the players. I don't play. I think I'm a classic man, I won't be able to discuss of that. In our younger generation, it was completely black. With those -- now to find a black shoe, it is impossible. It's a different colors. And so look that picture. Look, everyone, except the manager. So truth, so -- but if you know better than me. Now the son of my brother is a little boy and the new shoes for that play. I wanted, I wanted, I wanted.

Maybe add on the question. I mean Manchester City has amazing facilities, where we can do, let's say, studies together, especially on the women's fitted together. Let's say, a whole team, which has studied -- let's say, professional coaches that we then work together on this one. Pep, we talked about, let's say, also earlier, I mean, Puma Super Power is speed. We have for the faster, who is the fastest player you have to work with or coached?

In our team?

I mean in the 3 teams, you have managed.

The small distance, for example, now Jérémy Doku is so fast. Coman was so fast in the short space as well. Lerory Sané, in a biggest speed he was too. So yes, but [indiscernible] I say. So speed and speed without accuracy is a crash. So -- and that is not the fact. So the people say, the best drivers is not who go faster, who stop the car better.

I think talking about speed and accuracy. I think we have one more person to join us. Let's see who that is. Can we have the video? [Presentation]

Hello, everyone. I just want to say that behind closed door, you told me, you are the fastest I ever had. Here it's not the same.

Because there was a time both of you, yes, not play together, coach together. When was that exactly?

Was a really nice experience for me. I always say this is one of the best, if not the best coach I ever had and to have it as a first coach like when I really start to play a lot and as a first experience as a winger was like unbelievable.

And Pep talked earlier, a lot about the attitude and the body language. That some lessons you took away from working together with Pep.

Yes, I totally agree with him. I think that when you are motivated, when you are positive, when you show that you want to learn and give everything. Obviously, you have more chance to achieve what you want.

Was he one of the hard working players back in the days?

No. No, Kingsley, it was so nice because there are too many risk in that moment explained to me that we have an incredibly 4 [indiscernible] months, months ago. We've seen before you know France and the 21 in that moment you were there, it was when you entered into the [indiscernible], and said that, I wasn't -- I didn't see him before not even one second. So, and [indiscernible] okay, if I rely on lot of him and I said, okay, you bring him and then spend nothing, few days for us with clips and some games and more ever and as I said, okay, he's a proper winger. I love to play with winger. And the biggest quality, as I said that, that is incredible what I said before about the fans, he's got the ability to go Kingsley over 100% and immediately stop to 0, the opponent to 0, it's started a 100% in 2 seconds and this is unstoppable. One had the ability to stop another arrive. And when he arrive has to compete against 2 legends and 2 incredible top players like [indiscernible]. So it was not easy for him. But I love him so much and he play, he play, lovely guy. I mean he is only 27 but have already won 28 trophies, is that correct? And I think since your professional career in 12 consecutive rows, you've always won the league title. I think an unbelievable achievement. So what's next? I hope not to lose because this year is really tight. Last year was really tight as well we have was -- I think is always giving everything. Obviously, it is team effort and I mean the staff, the trainers, the players, the funds. It's not just you, I think we are all pushing in one direction. Obviously, as a player, you have more impact because you're on the pitch. But yes, it is not just my work, it is a work of everyone and I was also lucky to be in those teams.

Great. I mean both of you are amazingly successful when you are at this high level, are there still anybody, let's say, you are looking up to any godfather, let's say, who inspires you?

In sports, I don't really have. I love [indiscernible] for the way he was playing before. I think now a days it is really hard to perform and to play a way that make people dream. It's a bit different, but he was really the player that I was looking to because outside of the performing part and winning the game was like making my eyes like what.

And who would that be for you?

Here without -- in my life, I met Johan Cruyff was my -- I would say my manager during 6 years and after I would say he promoted me or his advisers for the President from Barcelona to select me as a manager in 1000-mile and Johan Cruyff, will not be here.

Can you remind me -- I mean what kind of shoes he played?

Puma?

One of our big Kings for sure.

Yes, it is for sure.

Look, I would like to open up again for one last question. Otherwise, I think we need to go back to business. No. Otherwise, I take the last question, okay? I mean both of you are probably slightly biased when it comes down to the Euros 2024. So I don't ask, let's say who will win the Euros, but who will be the biggest surprise team for the Euros happening now in Germany?

I don't know. So I would say, French to say that? I don't know. So always in Europe before star was the biggest candidate as you know, as everybody knows our plan. And that competition, the Euros arrived with a really, really, really long run season for the players in the clubs and as to go there, and it still depends how they feel physicality, mentally, how the environment national team is positive. So I don't know, big, big collapse. So everything can happen, I would say.

You guess I think the biggest surprise would be Germany for sure.

You think so?

With both ways. If I win would be a crazy surprise and if I lose early as well so.

All right. All right. Remind you a bit [indiscernible]. I think we, let's take one opportunity. So you also leave with a nice souvenir. I think why don't you come on stage for one second. But I think to make the picture even more nicer, I think you brought something along, that's why we have this thing there. You forgot it or you brought?

No, I brought it. I brought it, but Kingland doesn't know what it doesn't mean that, but I think he can start to do it. You don't need to take a picture. We take a picture of you. You come on stage. Yes. You came on stage, everybody. And then we take a picture together with Pat Kingsley and the Premier League Cup. Sorry, this doesn't mean, let's say -- sorry for you guys. All right. Thank you very much. So big shout out to Pat Kingsley for joining us today. Thank you very much. Thank you team for coming. [Presentation]

So let me hand over to Shirley, as we said, we need to win in China and we have a new China for China strategy. And there's no better person to talk us through the China for China strategy, and Shirley Li, our new GM, who just joined us one year ago. Shirley, please go on stage.

Good afternoon, everyone. I just realized that after last exciting session, it's pretty challenged task for me to present but anyway, we are challenger, lets go. Okay. My name is Shirley. Thanks for your introduction from Ane. I joined Puma one year ago. I'm Managing Director for Puma China. So today, in the next 30 minutes, I will share with you about China market, China consumer and of course, specifically our Puma China plan. So today, I will cover basically 3 parts. Firstly, overall market in the industry. Secondly, what's about our Puma China's vision and objective. Last but not most important is our winning formula and our game plan. Let's start with the overall market. As we all know that in the last 10 years, China experienced fast growth. The GDP growth was around 8% CAGR. Last year, even though we faced a lot of economic volunteer, we still have the 5.2% GDP growth. In the next 5 years, by IMF forecast, China GDP growth will still be around 4%. We see that our addressing market is still growing. Actually, the up middle and high-income household number keep increasing. By 2025, this number will hit EUR 200 million. Why? By 2030, this number will further go up to EUR 260 million. Talking about high-income cities in China, same trend actually by 2025, we will have 82% high-income cities, while this number going up to 93% by 2030. Back to our industry, we foresee that our China market will still be one of the faster-growing markets worldwide with around 10% CAGR growth. Talking about our consumer, we observed during and after pandemic, there are some key changes in the key trends from consumer. Firstly is about omni-channel, seamless omni-channel online and offline offer us not only a lot of touch points with the consumer, which offer not only the brand connection value, but also the consumer commercial opportunity. Secondly, it's about sports participation. Actually, around 10 years ago, this participation ratio was 20%. By last year, this number went up to 50%. Actually compare some other countries, 70% or 75%, we do see big potential to further growing. Chinese are more and more interested in care about health and awareness. This is definitely a trend. Last but not least, is about consumption polarization. We do see that last year in these 2 years, the market is still volatile. Under this situation, we realized that there are 2 trends one side, the high-income consumer still willing to pay and buy the product with the preferred brand if they share the same value. But on other side, we do see that the ordinary people looking for value for money, the whole market is also quite promotionally. So this is the general trend from consumer. We realized recent years. In the later game plan, I will also come back to share with you how Puma China respond this consumer trend. You probably see this chart from Arne already. The key part is, in our industry, this market and competition is so intensified. In the top 20 key players, there are 13 from International brands and there are 7 from domestic brands, which grew rapidly last few years. Local brands share in 2018 is around 35% and why by last year, this year going up to over 50%, which is making the competition even more fierce is also from the International brands, almost all International brands play hardly and actively in this market. We can see Puma in this intensive and highly competitive market today, we see very small, 1% market share. It means also the huge opportunity ahead of us. This chart shows Puma China's share within our group. Actually, in the last 3 years, we faced the unproportionally hit in our share. In 2022, this share was 6% all-time low. Last year, after one year reset this year went up to 7%. While this year 2024, we forecast that our share will go up to further 1% and by 8% of the group. Of course, we will not stop the progress. I personally have ambition to further grow this number to be more double-digit percentage share. If we look at our key competitor, in a good year, the China market share is very high. One is around 6% and another one is even over 20%. Even recent years, their China share is still mid-double-digit percentage. I will say that for us, we don't have any reason to be complacent in the biggest reason and motivation for us to further grow our market. Last year, with a lot of efforts, we are happy to achieve 19.2% top line net sales growth. You can see that these results is we are the one of the highest brand among the market, including some International brands, but also local brands. We are very happy about this result. Meanwhile, we also realize that it is a journey, again just started. The confidence is not only from ourselves, it also come from our wholesale partner. As we know probably, Top Sports in Baoxian is our top 2 key wholesale partners. Mr. Yu is CEO of Top Sports. He shows high confidence to our brand and quoted by him, he do see that we are the most potential faster-growing brands in the coming years. And also, he has high confidence to our leadership team. Mr. Huang is the CEO from Baoxian Group. Let's see what he said about. [Presentation] Okay. Next chapter, let's talking about our ambition and objectives. Overall speaking, we aim to be a well-recognized global sports brand. What does it mean concrete speaking? It means that we want to outgrow the market average. And in long-term perspective, as I mentioned already, internally, our share in the group will be over 10%. Our ranking in the local market aimed to be top 5, and our share want to be 5%. Last but not least, we want to be one of the most profitable market in our group. Of course, we all know that today, we are still very small. Room will not be built overnight. So what's the game plan to achieve that goal from a long-term perspective. Actually, the momentum starting from last year already. We introduced our 3-year strategic plan. Last year is a year of reset. This year, we call year of ignite and the next year is a year of unleash. Let me talking about last year first, actually, many, many things happened in last year. If I may call out a few progress, I will say, firstly, liquidation inventory. From year beginning last year, actually, we are sitting in very high inventory, almost around 10 months stock turn. By end of last year, after 1-year effort, this number going down dramatically to 4.5, which gives us a healthy and healthy start for this year growth and going beyond. Secondly, we also build a brand-new organization team. In the following chart, I will also come back with more detail. Most important thing is we also reset our strategy and set up a reboot game plan. Meanwhile, you probably already heard that digitalization is also one of our key strategy. I will also elaborate a little bit more in the following charts. So overall, you can see that we back to growth starting from last year. Then let me come to our winning recipe and our game plan in the next few years. Before I'm talking about every pillar, I just still want to emphasize that we are not only talking about one market. Today, we are really shifting our approach to local for local with real sense with high speed and flexibility. I came from other competitor and I can do feel that flexibility in the full authorization from global to enable us to grow in the market is really winning recipe and advantage for our Puma Group. With that, let me go one by one with our growing pillar. Start with brand. Some key points on the brand strategy, I will call out today, sports, celebrity, digital and social. Let's start with sports. As we mentioned already, our brand was born because of sports. So no doubt, we focus our marketing investment into performance category to strengthen our sports brand DNA is first priority in China market. We already started this journey. We are building our strong connection with sports through assets, through events and through communities. Beyond our global performance ambassador, we also signed our local performance ambassador. We have some key player from national basketball team and a national soccer team. Zhao Jiwei and Zhang Ru is from National Basketball team, and Yao Wei is from National Football team. They are all key players in the team. Meanwhile, we also sponsored some of the sporting events such as early of this year, we sponsored Shanghai Run The Track running event to really connect those runner in this area. And also community is a very important area for us. So we work with different running club and other performance club and also collaborate with some universities such as Fudan and Tsinghua to connect those students and young consumers to really spread our sports Sprint. As said, Zhang Ru is our newly signed performance ambassador. Let's also hear what she talked about. [Presentation] Beyond the sports, let's talk about celebrity. In China today, collaboration with celebrity is still quite important, which can help us to connect those sports fashion consumer and a build up our street credential. This is Cecilia Cheung. She is a famous actress in China. We started to collaborate with her from December last year with our Palermo campaign, which achieved a great sales results. Today, I'm also so exciting to announce with you that from April this year, we will have another celebrity. He is Henry Lau, he's artist. He's a musician. He is a producer and the even more better is he's a real fashion icon with large fan base. So we firmly believe that with collaboration with Henry, we can further elevate and sharpen our brand image. Apart from celebrity, influencer is also a very important part to work with, which can further increase the visibility in the street culture for us particularly in the paid media and social commerce. This is the key important area for Puma to play with. We will also double down our investment in this area. To ride on this trend, as I said, we will heavily invest in our digital marketing and social commerce, such as WeChat, such as TikTok, and the Little Red Book. Just to share you one number, our bread hit on TikTok last year increased over 200% in terms of both search volume and search users. This gives us high confidence to further continue this momentum and strengthen our brand. Sorry? It doesn't -- okay. Thank you. Okay. After our brand part, let's come to another important part, which is product. Some keywords, I will say to be easy remember, one is local for local. Second is speed. Last but not least, is our focused category with fewer big better. Let me start with local for local. You probably heard many words about local for local. In China, today, local for local, in terms of the design and the production today, we already achieved 80% of the product produced in China among China range. And we achieved 40% of the products are locally designed through our strong local design center. Another important strategy is a core speed model. This is such important, which can help us to close to the market and the consumer. And it is really related with our business model. In the past, you probably know that we are sitting in a future order model. Normally speaking, starting from very beginning, design and planning to the product delivery in the end, the life cycle overall will take around 1 year. Starting from last year, we have our speed business model, try in our DTC channel in both e-comm and the brick and model stores. The share of the quick order or we call it immediate order being 8% last year. What you can see from this chart this year, this year will be dramatically increased to 35%. Actually, in the midterm and the long term, we are aiming to further improve this immediate order share to around 50%. We are not talking about the coverage only, we are talking about the real lead time in the fast. Last year, the immediate order lead time is around 6 to 7 months. While you can see this year, list lead time already shortened to 1.5 to 4 months, depends on different products in the order volume as well. In the mid- and long term, actually, we will further closely work with our PGS colleague and down to 1, 2, 3 months. We believe that this new business model is really important. It really changed the business model from a push model to a real pool model from market and consumer. It can help us to really close to the consumer close to the trend in the market. Last but not least, it will also help us to build up agile inventory management, which can help us to be better OpEx management and improve our margin as well. You heard about polarization trend from very beginning. Actually, in line with our global strategy, we also have the clear rent segmentation to cater to this trend. The whole triangle segmentation clearly shows from top pinnacle level to the bottom commercial level, we have every solution in each segmentation. Take sports style as an example. In a pinnacle level, we have select, which we will big investment in the future to further premiumize our brand positioning. Meanwhile, given the whole market is still quite promotional and volatile, the people, consumer looking value for money still. So we will also emphasize the commercial level, which is our core area and some essential products to meet this part of the consumer. In addition, actually, starting from this year, another local for local solution is from sizing and fitting for both footwear and apparel, which can greatly adapt to local consumer needs. After speed and the local for local, let's talking about our focused category in China market. Of course, we are the brand with multiple categories, same in China. But today, I just want to call out a few key category, which has untapped potential for us and a great opportunity ahead of us, which is running key for franchise select and kids. As we know that our first priority is to further enhance the performance category. Actually, talking about football, we already achieved greater results in China market, top 3 in this category. Talking about our profitable category. We also gained a lot of momentum in both signature shoes but also performance shoes. So for us, we will keep this momentum in these 2 category. With that saying, running is the untapped area for us, but with huge commercial opportunity in China. Just to give you a number, you can also make a guess how many marathon event was held last year in China. 400, which means that every day, even more than one marathon was organized in China in different places, big or small. So for us, we firmly believe that we have the best technology, Nitro and we will also have a lot of effort, including increased distribution, including seating that elite runner and the sponsoring some of the key running events. We with all of these efforts, we believe that we will play a key role in this category market as well. In line with global strategy, actually, key franchise life cycle management is also such important thing in China market as well. Just a name few model here as an example. Slide is our iconic model, which we will maximize the commercial opportunity. Palermo is our answer to the trend -- to the talents trend, which is also quite unique compared to our competitor. We will further commercialize. Easy Rider is another emerging trend we will ignite from second half this year in China, while Speed Cat is the low profile trend, we will start to incubate in China from second half of this year as well. We believe one by one with all the integrated plan. We have a tremendous growth potential to have in the years to come. Then let's talking about Select. Select sitting in the premium clinical level of our segmentation. It is one of our good weapon to premiumize our brand image and connect with this fashion sports consumer. We believe that also with our strong local RCC team, we can build up our speed and faster respond to the local trend and the consumer needs. Last but not least, kids. To be very frank with you, today, kids Puma in China is almost none in terms of business scale. However, this market is still massive. Last year, in terms of retail sales, only kids market has EUR 6 billion market pretty good, big cake in front of us. So no any reason to stop there. For us, in the next 3 years, we have ambition plan to grow our kids category. In retail sales, we will have 5x bigger than today in this category to capture this opportunity. Okay. Let's start with our third pillar, which is distribution. Here, I will mainly talking about 3 parts as well. First, new retail format. Second, our store portfolio in brick-and-motor network, last, e-commerce. Start with new retail format. Starting from last year, we have a new retail format called Future Rider play and we started to roll out this format already. With a lot of innovative elements in this new format, this format has already well recognized in the market. The productivity with this new format also increased 15% to 20%. As you probably heard from Arne, starting from this year, we will also pilot another new format we call it Shoebox. It is mainly to the sports fashion consumer in our stylish part. Actually, even though we haven't opened the first store yet, when we communicate the whole design with our landlord and the wholesale partners, they already feel so exciting about [indiscernible] and AG design. So we are very looking forward the fresh store open around the mid of this year in Shanghai. You also heard the importance of the flagship store, which can really elevate our brand image. So for China this year, we will also open a real flagship store in Huahai Road in Shanghai. That's the real AAA location. So we firmly believe that this is the right thing to sharpen our brand image. Talking about our footprint, brick and model the store. The only key word I will describe in the next 3 years is acceleration. By last year, we have around 200,000 square meters including DTC and wholesale partners. We aim to increase this number by 50% and hit 300,000 square meter by '26. Apart from the offline stores, actually, you heard already, social commerce and e-com is such important to play field in China market as well. So for us, one side, we still have a very big traditional e-comm platforms such as Tmall and Jing Dong, we will maintain the business growth over there. Another side, we have uprising social commerce platform, such as TikTok, WeChat. We will double down our effort particularly in this social commerce platform to ride on the trend. And our ambition in the next 3 years is in WeChat and the TikTok stores, we will triple our net sales over there. After the distribution, let me share more about digitalization. Actually, digitalization is a quite general and a big word. It can be reflected in many areas. Today, here, what mean digitalization for Puma China. The keyword is first, digital retail; second, the Tencent partnership. Third, member hub. As you know that China market is quite advanced in the whole digital ecosystem, it offers a great opportunity to reach our consumer at anytime and anywhere. This is a trend. This is opportunity. In the meanwhile, it call a new approach for us to really manage our retail business and engage our consumer. January this year, we started our strategic partnership with Tencent. Tencent is a well-known Internet service provider in China. We are so exciting to partner with them and with their digital tool and the infrastructure, it will enable us to build a real digital hub, a real member hub. What does it mean? Actually, it means that we will have a real data-driven consumer insights, and it means that we will have the real tailor-made content and the merchant to approach our consumer. And it means that we will develop a real omni-channel operation online and offline integration. Just to give you a concrete example to better understand what we are doing right now. Actually, in the past, we don't have too much consumer data on hand, to be honest. It's all scattered in different places in the store, a little bit online. Even in a different platform, we also have a little bit and the even with some platform, we cannot own the consumer data by ourselves because platform claims they own the data. So in the future, our ambition is really create a centralized data pool and they really have the Puma approach to our consumer with the savvy data insights. Last but not least, let's talking about people, everything, every plant, every execution starts from people. This is our new organization chart. As you already know, I'm newly joining Puma China from one year ago. Meanwhile, we also newly hired several key functional leader, including sales, marketing, merchandise, buying and as well, we set up one of the new function called digital retail. These people are very, very experienced in the respective functional area. And more importantly, it's not about experience. I will say this team is highly committed, high passion and play to win. In closing, if I can sum it up I will say our ambition is to reignite brand kit and a quick response to the consumer needs with our speed business model. We will be more digitalized with digital retail with omni-channel integration and with member hub setup. Last but not least, we will have the people a winning team to help us to achieve all the goal. So I will say that the engine has been really ignited. We are keen to win. We will win. Thank you very much. [Presentation]

Hello, everybody. My name is Bob Philion. I'm the President of Puma North America, and I'm excited to be here today to talk about the U.S. market. And specifically, talk about the strategies that Arne, Richard and Maria talked about earlier and how they translate to America. It's an exciting time to be with the brands full of opportunities. So let's get started. Over the next 30 minutes, I'll be speaking to 3 things: first, the U.S. market and the opportunity that we see. Secondly, I'll talk about our ambitions for the U.S. market and our elevation strategy. Thirdly, I'll outline our U.S. first game plan and speak specifically about how we'll win in this competitive market. First, let's start with the market opportunity. And here, let's start what we already heard from Arne that we must win in the U.S. market. The markets at the center of our growth strategies for 2 main reasons. First, the U.S. market is the largest in the world for athletic footwear and apparel. One out of every 3 pair of athletic shoes are bought in the U.S. and 1.2 out of every 3 sports apparel items are purchased in the U.S. And it's a market that's expected to grow over the midterm. So clearly, in an impactful market for its size and we must win here to win globally. Secondly, the U.S. market is important to win in due to its significant influence in other markets, often referred to as global Hollywood, things like music, entertainment, sports, popular culture and style trends. often set the pace for other markets around the world. Being strong in the U.S. is not only important for our business here and connecting with the American consumer, but also allows us to export that energy around the world. If there's one takeaway I'd like you to have from my presentation, it's this word, opportunity. Yes, it's a big and influential market. And today, I'll be speaking about what opportunities we see here at Puma. And importantly, how we'll plan to untap those opportunities in the coming years. So let's look at our momentum. Here, we've seen very strong growth in the past 4 years with North American sales over 50% with a 12% CAGR. Battling through 2020 in the pandemic, we experienced tremendous acceleration in '21, followed by continued growth in '22. And this was fueled by our forever faster mentality, reacting to trends quickly, working closely with our key partners and being nimble in our approach. But if there's one word to describe the past 4 years in the U.S., it certainly would be volatility and '23 was no different. The industry stalled during the pandemic with stimulus boosted acceleration through '21, and that led to an overheated market in '22 and into '23, compounded by hyperinflation. Most U.S. retailers talked about '23 as a reset year. So let's look at 4 key trends that the market faced in '23. First of all, starting with the consumer, which was squeezed. 58% of Americans now say they're living paycheck to paycheck. Consumers are trading down, postponing purchases and in some cases, trading off. After huge spending in sports and athleisure coming out of COVID in '23, consumers spend on experiences, like travel, concerts and dining out. And that's led to 30 consecutive months of unit declines as reported by Circana. Inventory levels came into '23 extremely high and retailers work throughout the year to reduce those positions. Due to that elevated inventory, we saw higher levels of discounting across the industry. That included Puma. Our business was overproportionately challenged, mainly by the overdependence we have in the off-price channel. Due to that inventory and the availability of excess stock, which had our retailers chasing availability from some of our competitors. And despite improving trends, retailers continue to be cautious both in terms of their open to buy as well as their outlook for the year. Here, you see our market shares of the top 12 brands for athletic footwear and a few key points to note. First, you can see that U.S. brands dominate 9 of the top 12 positions. You can see that Puma is positioned at #8, with just under 3% share with 2 other European brands currently outperforming us. And you can see how close the shares are between positions #5 and #9 with only 60 basis points separating those 5 positions. For this, we see a tremendous opportunity to break out of that crowd. Puma is the #1, #2 or #3 brand in most other markets. And we're currently #8 in the U.S. With all the tools you see on the screen, the commitment to win in the U.S., the right U.S. first game plan with sustainable growth as our ultimate goal, I'm confident that we'll be able to capitalize on this amazing opportunity. Said another way, Carpe diem. I believe the opportunity is now to seize the day given the market and the competitive dynamics and the strategies and determination we have here at Puma to win in the U.S. Secondly, let me talk about our ambition and the elevation strategies to unlock the market potential in the U.S. First, our ambition is to elevate the brand to become a strong #4 in the U.S. over the long term. We have a clear strategy to elevate the brand, which we see in 3 phases, like many, '23 was a reset year. In '24, we'll return to growth due to a more normalized marketplace but also stealing share in key segments. We see acceleration in '25 and beyond, which is just starting as we're talking to retailers more on that in a little bit. And it should give you in this room some confidence that our track record is similar to this. As the market reset in 2020, we had huge acceleration coming out of that reset year. There's 3 important areas that we focused on as we prepared to return to growth in '24. First of all, we had to clean up our inventory. We entered the year with over 40% more goods than we had the previous year. We ended at down 34%. Secondly, we reset our distribution, so we reduced our reliance on the off-price and the value channels. And we strengthened our organization with new additions in the area of sales and merchandising. All 3 of these moves were key to get us ready to return to growth and win in the U.S. The strategic priorities in the U.S. are similar as Arne showed globally. To win in the U.S., we must elevate the brand, enhance our product excellence, improve the quality of our distribution, all on the foundation of our people, sustainability in our infrastructure. Following those strategic priorities as said by Arne, my final section, I'll speak to specific actions within the U.S. first game plan. And to win in the competitive U.S. market, we believe we must have a U.S. first game plan. I'll speak to specific strategies in the areas of brand, product distribution and organization, all with a common denominator of elevating the brand in the U.S. First, let's talk about the brand. Here, our first strategy is to strengthen our performance credibility in the U.S. market. Here, we're blessed with a strong legacy in U.S. sports from American football, baseball as well as basketball. Some of the greatest athletes ever have performed at their best in PUMA, like Joe Namath, Clyde Frazier, Reggie Jackson. So whether it's track and field, tennis or these 3 top American sports, PUMA has been there and been there and that history and authenticity is so important to today's consumer. Today, PUMA is on the attack with a new generation of sport, disruptive in their own way, led by world-class performance with an attitude and a swagger that sets them apart from the competition. Pulisic, Melo, Rickie, Stewie, Molly are just a few of the faces that define our brand today in sports in the U.S. And we know that sports is our gateway to move culture forward and is our secret sauce to winning in the U.S. Through this credibility and sport, we can bring on the game in sportstyle. Madonna, Selena, Kyle, the Weeknd are examples of influencers that have worn PUMA off the court and has influenced -- had an influence globally. Now we feel like we have the right faces to move our culture forward in America, the return of Rihanna, the addition of ASAP Rocky and athletes that cross over like Melo, Kuzma and Scoot Henderson. We have the best ambassador roster we've ever had across sport and sport culture with the U.S. lens. And we're working with some of the best brands to collaborate to find local relevant partners that are impactful to our consumers. This drives brand heat and is critical to our U.S. first game plan. Select partners like Noah and Pleasures, our kids-only successful collab with L.O.L, Cheetos launch. An example, just a couple of weeks ago at the NBA All-Star Game around Rookie sensation, Scoot Henderson. We'll continue these partnerships to introduce the PUMA brand to new consumers in creative ways. And we must win with influential consumers that are among -- are moving in the market and will drive our business for years to come. And this starts with deep insights. We've identified 3 specific consumer groups, the sport obsessed, women and Hispanics. So some stats on sport obsessed consumer. 70% of Americans are fans of sport. This isn't just about the game anymore. 80% of Gen Z follow a professional athlete online and look to them for products they promote. 30% of millennials and Gen Z are now engaged in sports betting, which continues to explode. These consumers are fertile ground for us here at PUMA to connect with the U.S. consumer. Secondly, women's empowerment, make up 50% of the population and control 85% of the consumer spending. Here, we've made great strides in sport with Stewie and Hoops, our women's specific football collection, Lexi in golf and new initiatives in sportstyle led by Rihanna, among many. Here, we're just scratching the surface. But it's clear when we win at PUMA, we win with her. In our third consumer group, Hispanics. They are the growth engine and a tremendous opportunity with PUMA. With a consumer where we currently over-index, as you heard from Carlos, 90% of the U.S. population today are Hispanic, with 25% of athletic footwear purchasers and 50% of future population growth in Hispanics will come from new immigration from Latin America, where PUMA is strong, again, as you heard earlier. Now let's look at the product specific strategies to win in the U.S. Here, importantly, it's about fewer, bigger, better. This is about doubling down our most important initiatives and cutting through to make the biggest difference for our business. This is about making hard choices, more disruptive than we've ever been. At the top of our pyramid on sportstyle, we'll lead with Classics and later fire with Rihanna and the Fenty brand. On the sports side, we'll lean into our history and heritage in basketball and the opportunities headlined by Lamelo, the strong success we've had in our market and the impact he's had on our consumer. And speaking of doubling down, I want to start with the sports side and speak to our 4 performance categories where we are today and importantly, where we're going in our key strategies to dimensionalize basketball, pounce on the football opportunities, nurture our performance running business and innovating in golf. Let me start with basketball. And here, I say we're just getting restarted. Launching back into the category in 2018 after nearly 2 decades away from the sport. Now we're the fastest growing in this space. In just a short time with the U.S. first game plan, including U.S.-based product creation and ambassadors were top 3 brand in footwear with over 10% market share. We've been -- we've done this with a disruptive approach to our product and our marketing, which has resonated with the U.S. consumer, and importantly, with the lucrative youthful team. Here, we see an opportunity dimensionalize by adding the culture pillar to our existing business of signature and performance. A big piece of basketball is the off-court segment, tremendous opportunity to take advantage of our current momentum. Here, we want to grow the locker of all those consumers that we resonate with today. There's 3 key strategies to dimensionalizing our basketball business. The first one is all about the Melo brand. Here, we'll be adding a signature lifestyle pillar in the second quarter of this year. It's like nothing else in the marketplace, and it's super relevant to our consumer. Secondly, we'll play ball with more consumers. As Arne mentioned, we're in only 50% of the doors as we build our foundation. There's plenty of room to grow and maintain heat and demand. Thirdly, we'll invest in grassroots to connect with players in fans at all level, TBT, Nexpro, Venice Beach League are all examples on the investments that we're making to continue to grow Puma Hoops, consumer as well as doing that through the NITRO franchise. Next, and important, the growing sport of football, where we will [ pounce ] on the opportunities ahead, and there is plenty of them. We're a top 3 brand that's doubled our market share in the past year to over 12%, tripling from 2020 and again, being the fastest growing in the sport. Here, we have the same formula as basketball. Great product, strong ambassadors and a focused strategy. We will use the faces of American soccer in addition to our international stars to connect with more players and fans. We have Captain America and Christian Pulisic, the U.S. Men's Player of the Year in '23, which has opened tremendous opportunities for us here at Puma. We also [ espionage ] Yunus Musah and soon to be announced new player that will give us top strikers on the U.S. national team. These players have big talents on the pitch, but importantly, have big followings off of it as well. And speaking to those amazing opportunities, we have our top European clubs coming to the U.S. this summer. We have 3 pinnacle events, all happening in the U.S. with Copa America, Club World Cup and the FIFA World Cup in '26. The expected impact of these events is remarkable. Think about this $10 billion is the expected value and economic impact of those 3. $5 billion alone is the expected economic impact of the '26 World Cup. In each World Cup cycle, there's 32 million people that come to the sport. Many of those will live in the U.S. and kick a ball for the first time. Next, our third sport performance running. And here it's by far the largest market and our biggest opportunity. Here, we can truly say we're just getting started with a reentry into the market in 2021. We're less than 1% share. But we're fast growing in the running specialty channel, which is where we build credibility. Our strategy is to nurture the performance running business. And as Arne mentioned, it's a marathon and not a sprint. Our presence in performance was on display at the recent U.S. Olympic Marathon trials with Fiona winning and Dakotah finishing third. The very center of our strategies is Bronze Olympic Medalist Molly Seidel, the first American woman to medal in the Olympic Marathon in nearly 20 years. That's proof that NITRO technology and PUMA running can compete at the highest level and win. I can tell you this, we can't wait for the Paris Olympics. There's 3 key strategies to nurture the running opportunity, knowing that 4 out of every 10 shoes in America are running. First, we'll invest in grassroots. This is about tech reps, trials, events, education, and it's critical to build the foundation with specialty accounts and teams that sell our products. Secondly, we'll grow distribution. As you heard, we're only in 1 out of every 10 specialty shops today. We also have a strong opportunity for growth in sporting goods, which is currently almost nonexistent. And third, we'll sponsor local run clubs and races for brand presence and to connect with real runners to help us spread the word. Our Force for Golf. Here, it's all about innovate or die. And we have an amazing lineup that continues to take share from our competitors. With a premium performance positioning, we have the highest average price of any business unit, and it's attracting a different in an incremental consumer to the PUMA brand. Cobra is a top 5 brand in the hard goods side, and PUMA Golf is the top 3 on the soft goods side. Both are major players that are stronger together with a 360 approach that we can service the entire golf shop today. Since launching PUMA Golf in 2006, it's all been about those 4 key words: being inclusive, stylish, colorful and fun. Game enjoyment is our mantra, and it is woven through everything that we do, from tour pros to everyday golfers to people just teeing off for the first time. Cobra PUMA Golf makes golf inclusive and fun, and that's a sweet spot for business. We have 3 key strategies to win in golf. It starts in Carlsbad, California. The heartbeat of the industry with dedicated focus to a specialty category in hard goods and soft goods, which we see as a competitive advantage. We've got a fast start to 2024 with the dark speed collection of clubs from Cobra as well as the Phantomcat NITRO with FLEXSPIKE traction technology. We have key partners like Rickie Fowler and Lexi Thompson as well as collage with the Arnold Palmer collection, Volition America and the Palm Tree Crew. And thirdly, we'll invest in green grass in our custom business. It's important to be strong where the game is played and really tap into the customization trend that is driving club purchases today. Shifting from sport, let's now talk about the U.S. first game plan on the other side of our business, Sportstyle. As I mentioned previously, here, we'll Light the Fire with Rihanna and the Fenty brand, one of the most iconic females on the planet that resonates big time in the U.S. Here, we were extremely successful starting with Rihanna 8 years ago, and we're excited that she's back now with more fans and as a mom opening up tremendous opportunities for us. We're just scratching the surface. There's another half to the power couple that sets trends and influences consumers across America and around the world, and that's ASAP Rocky, with a totally new partnership that's just beginning, our first project in Motorsport where he's our Creative Director. Here's a quick video of the impact he had in Vegas as well as the broader PUMA takeover in our first-ever F1 Grand Prix event last November. Let's run that. [Presentation]

Pretty cool, right? The event was incredible and a perfect example of car culture, meeting motorsport community of fans. It's what our consumers and our retailers are asking for right now. It's new, it's creative, it's exciting, it's innovative, and PUMA has been there in the sport for over 20 years. The Netflix hit Drive to Survive has brought the American fan to the track. Just think 1 out of every 2 new Formula 1 fans live in the U.S. and 1 out of 3 are female. PUMA dominated in Vegas, but we expect to do that 4 times a year with new events in the North American market, Miami; Montreal; Austin, Texas; and Las Vegas. Another key piece of our game plan in sportstyles are U.S. first partnerships. We made the decision to invest in and double down on U.S. relevant collaborations and partners, things like Beavis and Butt-Head, Cheetos, Joshua Vides, Squishmallow, Mixtape and TMC, all super relevant to the U.S. consumer. And we've seen success bringing product creation closer to the market, our consumer and our customers. We already do this in Boston with basketball and running in our new HQ, which opened in 2021. And as Maria mentioned, we're building up the PUMA studio in California, expanding to meet locally relevant needs of the fast-moving U.S. lifestyle consumer. I believe this is going to be a game changer for our business. Our ability to react quickly to U.S. trends and have a bigger and more meaningful business. I want to shift now into how we show up and tell those stories in ways that matter. Richard referenced this earlier. I'm excited about the social culture approach, 4 tiers of influencers that match the right people with the right products. And there's 3 simple components: one, social first approach to media; two, giving access, making sure that we're given behind-the-scenes access to culture, entertainment and sports events; and third, [ BC ] moments, elevating and authenticating key styles to increase awareness, visibility and be in the conversation. And a key piece of our product strategy in sportstyle is franchise management, how we build heat while also scaling franchises over time from icons like the Suede, to creating the low profile shoes in the Mostro, to on trend with a skate inspired Suede XL and to the current tariffs trend in Palermo, all important to the U.S. How we manage and market our key franchises is key to us winning in the U.S. Speaking of trends and opportunity, I was able to attend the amazing Mostro show in New York Fashion Week. It was a perfect display of PUMA's fashionability and what sets us apart from our competition with innovative low-profile shoe from the past. The hype continues to build, not just for the Mostro but low profile, whether it's the Speedcat or the Mostro and early deliveries have evaporated at most influential trend accounts like CIF in New York City. Now let's speak to our distribution piece of our U.S. first game plan. You've heard us say many times that we want to be the best partner for our retail accounts, and the U.S. certainly is no exception. We believe in a multi-brand approach with the best accounts being able to tell our story and get our product to the consumer. We're wholesale led in the U.S. with 75% of our business coming from our accounts, 25% coming from D2C, which we see retail as complementary of being the best expression of the brand. So let's look at the distribution pyramid. Our goal here is simple, to rebalance the quality of our distribution, prioritizing elevated channels that are most important to our brand image. Our objective here, manage the growth in the off-price channel while growing the other segments of our distribution. There's a couple of key pieces of our distribution pyramid that I'd like to speak about. Starting with specialty. On the sportstyle side, this is our select business, and it's all about partnerships, storytelling and consumer connectivity. On the sports side, it's about investing in grassroot, fittings, personalization and dedicated sales reps in running. Both areas here, we have low single-digit shares today. We see tremendous opportunities to elevate. In the larger athletic specialty and sporting goods business, here we're also low single digits with tremendous upside potential by telling fewer, bigger, better stories, managing our franchise life cycles and playing up our crossover DNA from sport to sportstyle. In a foundational channel in the U.S. known as Shoe Chains are often referred to as the family channel. Here, we have our highest shares at high single digits with strong momentum on which to build. To win here, it's all about having tremendous price value in product delivering newness that resonates with the consumer and excelling at in-store execution to be seen, all areas of focus moving forward. While it's nice for me to talk about our potential across distribution channels, let's hear from some of the best retailers. What they see with PUMA now as well as opportunities in the future. [Presentation]

I hope it's clear that our partnerships are strong with the most important accounts in the U.S. The last piece of distribution I'd like to talk about is our D2C business. Here, we want to elevate the consumer experience and increase our full-price presence, both in-store and online. We want to elevate the experience at our flagship in New York and our soon to be open flagship in Las Vegas in November. We want to elevate our website and our PUMA app, which launched just over a year ago and is nearing 20% of our e-com business and growing. And we've got to elevate our experience in a very profitable outlet channel where assortment and service are paramount. That brings me to the last piece of our U.S. first game plan, which is organization and our most important asset, which is our people. Previously, I mentioned key additions to our leadership team. The first one is elevating the merchandising function, helping us get the right product to the right consumers. Here, we're led by Alexa Anderson, a strong track record from Nike, Adidas, most recently, Lululemon, with a holistic view of the North American market across D2C as well as wholesale. She'll also lead our important product heat department for locally relevant partnerships and collaborations. Secondly is a powerhouse to help us elevate the quality of distribution led by Andrew Rudolph, affectionately known in the industry as Rudi. With 25 years experience with another German brand, the last 12 being in the U.S. His experience in retail connections are second to none. Rudi will bring added focus to the elevated distribution channels through a disciplined strategy and marketplace management. I'm excited to have both these strong new additions, and I love the immediate impact they've made in our business already. To put Rudi and Alexa into context, here's my leadership team for North America. On the left side, you see our front office team. On the right are supporting functions. Also in Boston, our regional creation center, part of Maria's team that we work with closely to address locally relevant product needs. And of course, on bias, I feel like we have the best team in the business, all with tremendous experience and passion for the PUMA brand and who are hungry for more. Our strong growth over the past has been based on hustle, being nimble, quick, humble and hungry. I believe these are competitive advantages. And I believe they're the same attributes that will help us accelerate our growth in the U.S. in the future. So let me close and leave you with 3 important thoughts on why we will win in the U.S. market. First is the opportunity. I've spoken about how it's the largest market, most influential, highly competitive, but one where we're poised for growth. We're a top 3 brand in other markets. We're #8 in the U.S. There's no disputing the massive opportunity we have in the U.S. Secondly is our brand. From our early roots in U.S. sports that gives us credibility and authenticity to play both in performance and nonperformance arenas. While attacking 3 specific consumers, the Sport-obsessed, Women and Hispanics, we are set up to win from a brand perspective. And while opportunity and brand has been there, we now have the right strategy with our U.S. first game plan under Arne's leadership with specific actions to dimensionalize Hoops, pounce on football opportunities, nurture performance running, and innovate and golf, while lighting the fire and sportstyle with the best ambassadors and U.S.-based product creation in Boston and the new studio setup in L.A. Plans are in place and momentum is building on elevating our distribution with sustainable growth as our North Star, and we have a passionate and determined team on the leadership side to make it happen. So thanks for your time and attention. I think now I'm going to turn it over to Hubert. Thank you.

Yes. Now it's time for finance. Welcome. It's a great pleasure to have you here in our beautiful headquarter in Herzogenaurach. And I hope you were already able to feel breathe our culture, our spirit and the energy of the PUMA family. For sure, the fantastic PUMA family is the foundation for future growth. As you know, we had a successful year 2023. We're looking confident into 2024. And now it's my pleasure to give you a little bit more deep dive into the financial update until 2025. As Arne explained earlier, we want to open the next chapter for our great brand with a key focus on sustainable growth. We have 3 focus areas: we want to elevate the brand; we want to enhance product excellence, and we also want to improve our distribution quality to lay the foundation for accelerated share gains going forward. You have seen this slide already. And as Arne mentioned, we want to achieve a high single-digit CAGR growth until 2025. So let's have a quick look into the underlying assumptions for this growth. In general, we can see -- we assume the currency are at the current level. We expect unchanged macroeconomic environment compared to 2023. We have also a normalization of the inflation rates to a level of 2% to 3% for our top 10 markets. And we also expect for the whole sector a mid-single-digit CAGR growth until 2025. We have also a special assumption for the hyperinflation economies that helped us a lot in the year 2023. And we expect that we will be able to compensate the impact from inflation with the price increases in these markets. Let's have now a deeper look into the business environment. We do not expect further escalation of our geopolitical conflicts in the Ukraine and Palestine. And we see continued macroeconomic headwinds going forward, muted consumer sentiment in the first half year '24. In terms of the regional split, we see the Chinese economy to gradually improve over the next 2 years and the unchanged situation for the U.S. market and also for the European market. If we look into currencies, we can see that we see an ongoing adverse currency effect for the year 2024 in particular, and for 2025, basically unchanged situation as well. As currencies were a major threat in the year 2023, they are also creating headwinds for '24. I would like to add here a little bit more color. As you know, currencies are impacting us mainly in 3 areas, and let's start with the most important one that's sales. In sales, we talked mainly the translation impact from the local currencies into the euro, our group currency. And we're applying here, of course, average rates. And if you look at the impact, it was a massive impact in 2023 and in 2024. It will also have an impact. '23, we talked EUR 400 million of negative impact on our top line and in 2023, we talked EUR 400 million and '24, we talked EUR 200 million additional impact. So this is a significant drag on our profitability. If we talk gross profit margin, we can see that we have here mainly the impact from the U.S. dollar hedging on our cost of goods. PUMA is applying a 12 months hedging policy. So we had 12 months before we moved the [ dollars ] into our P&L, and that is creating then the respective impact, and we have also smaller impact from other currencies. '23, we had an impact of minus 250 basis points. So on top of the sales impact, a huge negative impact on our profitability. And Arne explained that also in the intro, this is causing a gap versus the original expected 10% EBIT target. For '24, we see also certain negative impacts, and this is another 100 basis points on our profitability. There is also a third one, and that is OpEx. And here, we're talking mainly the currency mix. And let me explain that a little more. We're talking approximately 75% of our sales are in foreign currency, 25% is euro. In the OpEx, we have approximately 45% of the total OpEx in euro and 55% in foreign currency. So if sales and currencies are against us, we see an additional negative impact on our profitability. Talking '23, approximately 20 basis points, and in '24, another 20 basis points depending on the mix of the currencies and the OpEx related to the countries where the currency is fluctuating. So overall, quite a negative impact from currencies in 2023, which we could compensate. And also for '24, we plan to compensate these negative impacts, given the strength of our brand. Let's now have a look at the building blocks of our top line. If we look into the breakdown of channel, regional product division, as Arne said already, we see stronger growth in the emerging markets in Latin America, in the emerging markets in Asia, but of course, as well in China, like Shirley explained. In Europe, we see a mid-single-digit growth based on a strong product, especially in performance and also the newness in the lifestyle category. Given the muted consumer sentiment right now and the macroeconomic situation we have, especially in U.K., Germany, we expect a mid-single-digit growth. In EMEA, we expect the mid- to high single-digit growth because we have certain markets where we are performing better. North America is expected to turn around in 2024, as mentioned, and we want to accelerate, as you have heard from Bob, the growth in '25. So overall, over the 2 years, a mid-single-digit growth. In Latin America, we expect further strong growth given the strength of the brand. And here, we foresee a mid-teens growth for the 2 years, '24 and '25. In Greater China, we expect also a mid- to high teens growth, given the positive traction we have right now in the market and also given the strong order book and the feedback of our accounts. The other countries in APAC are also expected to grow at the high single digit to low double digit. Looking into the channel mix, we see that wholesale is expected to grow in the mid-single-digit to high single-digit territory. And in D2C, we expect a mid-teens growth with e-com growing faster than our stores. But of course, we want to translate the sales growth also in an improvement of our operating performance. But let's have look at our P&L before we deep dive into more details on the P&L and the operating performance. In sales, we want to achieve, as said, high single-digit CAGR until 2025. We expect the gross profit margin to improve 100 to 200 basis points to a level of 47.3% to 48.3%. We expect the OpEx ratio to improve -- to go up 20 to 120 basis points to 39.3% to 40.3%, mainly due to the channel mix. And the focus is also to continue to invest into marketing, but gaining leverage in the other OpEx areas. Overall, we target 80 to 130 basis points improvement on the operating margin. The net margin, we expect to show a similar change than the operating margin. And now let's have a look into the building blocks of the operating performance until 2025. As you know, business environment overall is very volatile and currencies created a significant headwind in 2023. In this environment, we were able to deliver underlying operating results above the level of '22. But of course, we want to improve further. Therefore, we will have 2 major areas where we want to increase and improve our operating performance, profitability and cash flow. And as a result, we also want to improve and increase our shareholder return. Let's first have a look at the profitability, for sure, the most important part. Here, we want to focus on gross profit margin improvement and on OpEx control. Overall, as said, we want to improve the gross profit margin by 100 to 200 basis points until 2025. Let's have a look more into the details. As said before, currencies are expected to be slightly negative in 2024 and flattish in 2025. Promotions will improve steadily until 2025. In 2024, we had the reduction of the promotion compared to '23, where we had to clean up a lot of stock. But in 2025, we foresee further improvements because we want to realize higher full price sales. This improvement is connected to the elevation of the brand. On top, we want to further improve also our inventory levels going forward because even if we have appropriate level, right now, we feel we can do more. This improvement will also contribute. Looking into the pricing, we expected to see a beneficial trend in '24 and '25, also driven by the elevation of the brand. Sourcing costs are expected to be flattish. Because wages are increasing in the sourcing countries, we are investing in sustainability, and we will compensate this effect by efficiency gains. In the area of freight, we consider the negative surcharges from the situation in the Red Sea in '24. Nevertheless, we expect for the first half year '24 better rates than in '23 because the basis with our contract was lower, so the surcharges are still not bringing us to the '23 level, still a tailwind from that area. And only 30% of our global shipping volumes are routed through the Red Sea. So overall, in the H1, still a benefit. For the second half, we foresee a negative trend, and this is mainly because of the current situation, we also expect '24 second half, higher rates than in our second half year '23. So overall, a flat expectation for the freights. Talking about the regional mix. In '24, we see a slight positive impact here because China is growing faster than other markets. But in '25, we do not expect a further positive impact from the regional mix. And this is because we expect the U.S. market to accelerate the growth, and this is neutralizing other impacts in the regional mix. In the channel mix, we constantly provide -- or the channel mix, we'll constantly provide tailwind as the slower gross in the D2C will support us on the gross profit margin side. And this is in '24 and in '25. So overall, we foresee, as mentioned, 100 to 200 basis points gross profit margin improvement over the next 2 years. To sum it up, the 100 to 200 basis points margin improvement are because of the channel mix, because of pricing and because of the promotion. And in '24, we expect certain negative impact from the currency, and we will be able to compensate that. So overall, a strong trend which we foresee, and this is also because of our strategy to elevate the brand. Let's have now a look into the OpEx. In the OpEx area, we will continue to apply a strict control. The channel mix is expected to create a negative impact on the overall OpEx ratio because D2C is carrying a higher OpEx ratio than wholesale. This is an offset to a certain degree because we have, of course, the benefit on the gross profit margin side. The negative impact from inflation, especially due to increasing wages as well as ramp-up costs, which we have in '24, we have heard it before, we have new DCs starting to operate and also our SAP system in certain regions will go live, which is creating a certain depreciation have to -- will have a negative impact on '24 as well as the FX impact. We compensate that by gains in efficiency. In total, we expect the OpEx to be up 20 to 120 basis points until end of 2025. And that leads us to a total OpEx ratio of 39.3% to 40.3%. If we look into the breakdown, we can see that marketing as a percentage of net sales will remain flat. The channel mix will provide a slight deleverage in the years '24 and '25. And in the other OpEx, we expect for the period until 2025 certain leverage, and we will be able to compensate the ramp-up cost in 2024. In the area of OpEx, I will also give a little bit more color on the 3 areas, meaning marketing, D2C and other OpEx. Let's first have a look into marketing. We always said around 10% ratio in marketing is the right level to drive growth. Based on the 10%, we are able to add significant marketing budget in euro terms. On top, as had explained, we will focus on the elevation of the brand and target to optimize the communication efficiency. So these are the 2 major areas in marketing. Let's have now a little bit more deep dive into what are we doing and what the 10% means to us. If we look into the years 2019 until 2023, we significantly improved our marketing portfolio with athletes, brand ambassadors and clubs based on approximately EUR 50 million increment in marketing per year. '24 and '25, based on the 10% OpEx ratio in marketing, we will be able to increase our marketing budget by approximately EUR 70 million per year. Due to this increment, we feel confident that we will be able to improve the portfolio further, and this will also help to elevate the brand. We have added 1 first club [indiscernible] and we are confident that we can add more brand ambassadors going forward. Together with a higher marketing efficiency, we feel optimistic that this is enough to drive growth going forward. The second very important part is OpEx in the D2C. We continue to see strong results in the D2C channel overall. Therefore, we will continue to invest. This leads to a dilution of the overall OpEx ratio as mentioned before due to the channel mix. Right now, we do not see a material difference in the profitability of the wholesale and the D2C channel. But it is clear we want to also improve our efficiency in the D2C channel and improve the channel profitability further. We have here 2 major drivers. We want to gain economy of scale and improve in-store excellence. And we also want to increase the average size of our stores, especially in the outlets, which will also add profitability. In the other OpEx, and this is including warehousing, selling and the general admin area, we want also to focus on efficiency gains. We have, in all our markets, existing organizations and setups, which are sufficient to carry much more business. We clearly see the potential for economy of scale here, and this will help to drive efficiency going forward. We also want to elevate our operational excellence in our distribution centers and in the warehousing due to automation, especially in 2024, we will go live in the U.S. with a new DC center in Phoenix, we will have a new DC center also in Mexico. This is also necessary to increase the capacity because we are at the limit right now. And we have also a new warehouse in Europe, in France, also necessary to increase capacity in this market. On top, we started to accelerate automation of processes due to the implementation of digital tools, including AI, and this will add efficiency, especially in areas like accounting. So overall, a key focus in the other OpEx areas on the gain of efficiency to drive profitability. So if we summarize, we can see -- we want to improve the operating margin until 2025, and this is a clear focus. The focus is on EBIT improvement to reach that target. And we have here, as an underlying basis, the high single-digit growth and the gross profit margin improvement. We expect no dilution of the operating margin due to the channel mix. And with the U.S. dollar at [ 1 15 ], the gap to our long-term ambition of 10% EBIT margin would have been closed. Of course, our long-term ambition stays at 10%. But we do not only focus and count on the FX tailwind, we also see further organic upside to close the gap. Through our strategy to elevate the brand, we want to unlock this further potential. And this would lead to improvement, especially in gross profit margin in the sports side prime area because here, we have higher ASPs and consequently also higher gross profit margins. We want to unlock the potential in training because we carry here higher margins in the apparel. We want to improve our full price realization in D2C and in wholesale, which is driving profitability in both channels also for our partners. We want to grow further in China because it is one of the most important and most profitable markets in the whole world. And of course, we will also continue to focus on cost control to gain leverage and based on stronger growth going forward, we foresee also an increase in leverage. The second area we want to focus is cash flow. Here, I would like to start with the working capital management. And we set the target that we want to improve our working capital ratio as a percentage of net sales towards 13%. We want to further improve our inventory management with a focus on demand planning excellence as a success factor. We have not invested enough in the past in our systems, in the processes in this area, and we started here with a new project to integrate and synchronize the planning of the countries with our global supply chain better. This will add further improvement on the inventory levels. We want to focus on the receivable management on the DSO improvement, especially in countries where we have, in general, longer payment terms like EMEA and Latin America and in the area of payables, we expect a stable trend. Let me now give you some more details for our assumption on the CapEx side. You can see overall, we want to continue to invest into our brand. And in general, we expect a CapEx ratio of 3% to 3.5% of sales with a focus on 3 pillars. The first pillar is direct-to-consumer. We're representing the brand here, especially in our flagship stores and we want to complete the wholesale business. Second pillar, our distribution centers. Here, we want to invest because we need to lay the foundation for growth and we also want to gain efficiency because of automation in the DCs. The third area, digital infrastructure is the backbone of our organization and is also extremely important to drive further growth because we need the systems and the tools in that area. So let's have a look how much we want to invest in the different pillars. If we look into D2C, as Arne said, we plan to open approximately 50 stores per year until 2025. In addition, we want to add 1 to 2 new flagship stores with a focus on large cities, which are making the difference in the respective market. And we have here already certain stores in the pipeline, as you have seen. The second area is the D2C area. Here, we will invest 1/3 of our CapEx, and we already kicked off projects in Phoenix asset in Mexico and in Europe, but we foresee that also in '25, we need to invest in certain DCs in order to drive growth. But we also want to elevate the efficiency and we want to benefit from the latest technologies in the area of intralogistics. Within our digital infrastructure, we see huge potential to gain efficiencies, and we want to use here the possibilities of AI and robotics. But of course, most important is our EBP rollout, the S/4 HANA solution as an ERP system to our regions as we have to replace some outdated and old solutions in the countries and regions in order to not limit our growth going forward. To sum it up, we want to invest into our growth while we are aiming to gain efficiency by using new technology and a solid infrastructure. Let's have now a look at the free cash flow, how the free cash flow will develop until 2025. As you can see here, since 2019, we saw ongoing deterioration of the free cash flow. But with our actions in '23, we were able to turn around this trend. And this positive trend, we want to continue until 2025 and we want to reach free cash flow ratio as a percentage of net sales between 6% and 7.5%. The improved free cash flow is also the foundation for improved cash out to our shareholders and the share buyback. Let's have a quick look on our balance sheet KPIs. By the end of 2023, we had a very strong balance sheet with no debt and a strong equity ratio of 39%. On top, we had a very solid financing structure with approximately EUR 1 billion of unutilized committed bank lines and credit lines. And with the free cash flow generation, we will be able to support a higher payout to our shareholders. Future cash flow and the strong balance sheet are the foundation for the higher shareholder return in the future. So let's talk quick about the shareholder payout. Given the balance sheet structure and the free cash flow improvement, we decided to change our payout ratio from the original status, which we had 25% to 35% as a dividend going forward with today's announcement. And we want to distribute in the future 25% to 40% as a dividend. And on top, we added, as announced, a 10% to 25% share buyback as a percentage of net income. So overall, the goal is to distribute up to 50% of the net income to the shareholders going forward. So what do we do? We start with the first tranche of approximately EUR 100 million until May 2025, which is based on the shareholder resolution, which we got at the AGM 2020. And of course, after 2025, we will continue with the share buyback. At the next AGM, we asked for the approval to continue the share buyback as we want to keep the 50% payout ratio going forward. Very important for us, we want to achieve and fund the share buyback from the operational cash flow and not financing the share buyback. So also, this is a signal of the strength of the brand and the company as we will be able to fund the share buyback from the operating cash flow. So to sum it up, we are committed to deliver sustainable growth until 2025. We want to increase our profitability to 8% to 8.5% of sales. And as a consequence, we will be also able to increase our payout to up to 50% of our net income. But most important, we want to create the foundation for accelerated market share gain beyond 2025. We are the challenger. We want you to see, view the game like we do and we believe with our strategy for the next 3 years and the related framework, we are 100% convinced that we are on the right track for long-term success. I feel we have the right balance between managing current volatility of the market, provided short-term improved profitability and shareholder return but most important, laying the foundation for long-term success and a higher shareholder return going forward. Thank you very much. I think before we move into the Q&A session, there is a 10-minute break and then we start with the Q&A. [Break]

Well, first of all, thank you very much to every one of you for being patient, for listening to us. I hope you enjoyed all the sessions. I hope you enjoyed the session also with [ Pat ] and [ Kingsley ]. Now it's about the time to turn this session over to the Q&A. I think we should have about 40 minutes to do a Q&A session with all of you. In order to allow as many people as possible to ask questions, I would like to limit the questions, first of all, to one. And then once we've made the round, we'll open up for a second one. Those of you who have questions, please raise the hand. My colleague, David will come over and give you the mic and then we just go on. We have Maria, Arne and Hubert on stage, obviously, our presenters from today handling the questions. And with that, so please be free to ask. Who wants? So Jurgen from Kepler, please.

I think you said 5 questions per person, right? One, I'm sorry. Okay. Very impressive, all the new franchises that you're launching. The 1 question that just comes up from my part, and I think I counted like 7 new franchises just in the sports style category. How do you manage the complexity here? I understand you need more warehouses that seems to be in your numbers. What about personnel complexity in terms of systems that all really goes in the right direction?

Thank you, Jurgen. Maybe I take that question, Maria can add on. I think when you talk about complexity, I think you will get tomorrow when we walk the showrooms a better sense, let's say, about the width of our product assortment and 7 is not a complexity at all. And I think, let's say, what is very important to see, they all follow a different life cycle, some about incubation, some are about igniting and others are about maximizing. And so let's say, to make sure that everything at stage, we have the appropriate offer, we need to have, let's say, multiple franchises in the pipeline. And I think when you walk around the showrooms tomorrow, I think you can see that say there's neither the -- yes, there's no -- the tendency to further reduce the line because we think we have a very compelling line, but we also don't have the ambition to further extend it because you see, let's say -- or you will see that they are significantly more attractive product currently in the showrooms than we have shelf space in the distribution.

So who's next? Richard.

Yes. It was a quick question on China. I think you talked about the fields of play, a new format, which is giving you good sales uplifts. Could you give us some sense as to how you're going to get through the store portfolio over there in terms of what pace of refit you're going to go through? Is it just new stores? Or are you doing it throughout the whole chain? And is it back-end loaded? Or how should we think about the phasing of that over the next 3 years?

Yes. I mean, obviously, every single store, which we will open will be in the new format. And then we are looking, let's say, in China, roughly, let's say, at every 5th year, let's say, latest we would renovate the stores because the Chinese environment is very demanding in the sense of having a very fresh environment. And then we would have that rollover basically.

I think Sunil had a question from Deutsche Bank.

So I have a question on the U.S. and the slides on distribution. I mean you've seen new entrants coming to the market like [indiscernible] on running. And it feels like the U.S., the wholesale channel is a lot more competitive. How do you make sure that your products are really the ones which are the first you see and the ones that the retailers are getting behind when everyone is kind of chasing that same space in that wall space in what looks like an increasingly competitive space?

You were a bit soft to understand, but I think it's about the presence at point of sales in a hypercompetitive market like U.S.?

Yes. And especially in the wholesale channel, you talked about Foot Locker DICK's and just with so many brands all trying to do the same thing and be successful in the course. How do you make sure it's your product, it's PUMA.

I mean I think even more so, it is very important, let's say, that we are very clear what kind of franchises we would like to push because that allows us to do a few bigger, better, to get, let's say, the money behind both on the marketing campaign, but also on the POS level. So you will, let's say, see also going forward, that we have more consistent representation of our key franchises in the key stores.

And if I can add to that, our relationship when we are building product creation is very close to our key accounts. There's multiple interactions in different phases. So we are constantly going back and forth and that help us to understand the trend of those franchises are, how we are, in many cases, how other competitors are playing so that close communication with our accounts while we're building the product. This will help us as well as a lot.

The next one is from Piral.

Piral from RBC. Can I just ask a follow-up to the store question first? So you said 50% increase in the store footprint, 200,000 to 300,000 square feet. What does that look like in terms of expansions versus new store openings? And where does the total like point-of-sale count go? I think it's around 3,000 today?

Yes, it is slightly less than that. It is, I think, more around 2,500. Honestly, it really depends door by door that -- I mean, great locations, we're looking, let's say, to further expand. And then especially in Tier 1 and Tier 2 cities, we think we have a lot of opportunities to open more doors.

That was the follow-up question. My true question is on China profitability just to stay on the same topic. I think Shirley said that the ambition is to make China one of the most profitable regions, right? Okay. What does that look like? I think that the peak into 2019 was 30% or just above 30%. So where do you think you can get China profitability to -- would it be a bit lower than that historical level? Have you got a number in mind?

I mean I think from an overarching dynamics, I mean, first, let's say, we see opportunity in the gross profit margin a, let's say, because in the past year, let's say, they were reduced due to higher level of promotions. And b, also the stronger we are as a brand, the higher the ASPs can be and the higher also our gross profit margin. So they will be the driving factors. And the second one on the OpEx side, we always said that say, look, we need to have an organization in place, which is able to rebound very quickly. And this is, let's say, what we said, so we never cut with every personnel in our China operations also when we had a down trend. I think that we are, as you know, let's say, so far still away from our historic profitability, which was around 30%. So I think we will take it step-by-step to go into that direction but from an overall market dynamics, I don't see, let's say, that the underlying profitability has really changed in the market. It depends, let's say, on the strength of the brand, the ability to realize full price sales with a healthy margin. And then, let's say, with that growth, we will realize the operational leverage. And I think also on the warehousing side, as Shirley has explained, I mean when you have this humongous amount of inventory, then it's also a big drain on your warehousing costs, which will then also let's say, that cleanest in the inventory get healthier.

I think Zuzanna from UBS has a question.

And congratulations to the team for very well organized...

Can you speak a bit louder, please.

Yes, yes. So I just have 1 question, I'll stick to the rule. I guess it's about the guidance. So when I look at the guidance, it either implies that it's very much sort of back-end loaded, given your guidance for 2024. So it would imply, I guess, sort of double-digit sales growth in 2025 and sort of over 100 basis points EBIT margin improvement or I guess the other option is that maybe you're conservative for this year? So I guess that's kind of the first part of the question. And if it is more back-end loaded, can you maybe explain to us what gives you the confidence? Is it the market improving? Is it all of the product you have in the pipeline? Is it the feedback you have from wholesale, DTC expansion, just to sort of give us the confidence because especially, I think this year is also meant to be a little bit more H2 weighted? And within all of that, if you could maybe also share with us how you see the dynamic in wholesale? Because investors are a little bit worried about increasing competition in wholesale channel, given some of the bigger brands being very loud about them returning to it.

Okay. I counted a bit more than 1 question, but let me see. I'll take them one by one. I think that the first part of the question was around 2024 and the shape of this one. And I think also when you look at the whole industry, I think everybody is expecting a softer H1 than H2. So I think it's about the consumer sentiment, which is not great. The remaining elevated, I said, remaining elevated inventory in the trade. And then obviously, some weather complications also in January did not help in countries like the U.S. So -- and then in the second half of the year, I mean, it has always been also when I was with the retailers last day, they all said, let's say, until end of Q1, let's say they believe, let's say, we need the time to liquidate the remaining inventory. We'll continue to stay promotional, but was very consistent that everybody was saying, as of Q2, the retailers feel there should be increased traction again in the market. That is also then reflected appropriately in our order book, which gives us the confidence on the shape. I think what [ Carlos ] mentioned earlier, I mean that's probably a PUMA specific element to the shape that in H1, in 2 out of the 5 countries, we are moving warehouses and warehouse moves do go along, let's say, with a certain inefficiency of ramp-up and so on. But we have planned that also together with our customers accordingly. So again, when you look at Latin America, that will have a different shape for this year because of these 2 important warehouse moves, but if you just grow and are 2 years ahead of your midterm plan, you just really need to hustle to make sure you are getting the capacities you need to do also to deliver. 2025, I think there was a second question on backloading, on the expectations. I mean we already see, let's say, that the different work which we are doing, and you heard, let's say, from our prime accounts, they are seeing that we are moving in the direction. You heard let's say they talk about -- we are starting to focus on the consumer, we are starting to do things differently. And obviously, that will just take some more time that we are able to deliver and build up that relevancy with that consumer. I think we have shown. And again, I mean, if you just think about the same kid who's buying our football shoe, we just, let's say, need to build up the same relevance now on the prime solution because currently, he's not picking up that shoe when he goes maybe do [ snipe ] from ours, but said that he is picking up that shoe when he goes to Unisport directly when he buys our shoes. So I think that, let's say, makes me say very confident about the trajectory which we go. And I forgot your third question, because I don't have anything to write. What was that? On the wholesale side, yes, again, I think I understand your perspective. But again, I think you're talking a lot about the channel and what we are obsessed with, let's say, building the connection with the consumer and creating that pull effect. And I think you also heard them talk about -- it's all about sell-through and when PUMA works for the wholesale, we could certainly say improving our sell-through, sell-in, you can have very fast success but they can be very temporary if you push in a lot of things, but they are not selling through. And I think that is the most sustainable way working together with our wholesalers exactly understanding, let's say, the dynamic.

And maybe 1 topic, D2C continues to show very good traction. So the product is checking in the environment. And on top of that, we can also see that in '23, we had to clear a lot of product in our own outlets. In '24, we can stay fresh with product, which is very efficient, especially in the outlet area. So this gives additional tailwind.

Zuzanna, I wasn't expecting anything different than sneaking in some extra questions. Anne-Laure from HSBC.

My question is about the marketing spending. You talk a lot about efficiencies, but also at the same time, investing more. But you will keep this marketing-to-sales ratio stable. So why not stepping up in a year of key sports events when you have a lot of new products, a lot of newness as you showed us, and also when the competition is getting fiercer. So basically investing a bit more at the expense of the profitability short term in order to fuel your long-term growth.

I think let's say, we have quite well explained that we currently see there's a lot of efficiency in the way we are spending money because we spend a lot of money, let's say, on producing things and spending it on media, but it never reached the consumer because, let's say, we were not adherent to this media sufficiency concept, which Rich and I explained that of our target consumer needs to see it at least 3x. So if you start, let's say, to bundle that and focus really on getting that message across, I think that is where we will start to get more efficient and really make sure that our messaging are cutting through. So it's both more effective as well as more efficient. So currently, let's say, with all, let's say, that opportunity, which we have to use our 10% significantly more efficient and effective, it would be for me, let's say, the wrong priority for that to increase the spend. And I think when you look, let's say, at the journey which we have taken, that we are, let's say, the partner of the best football team in the world, some of the best athletes, have some of the highest well-recognized entertainment assets or ambassadors like Rihanna on ASAP Rocky, I think you can see that we can work very well with that spend.

And I think also to add that if we compare with 2019 in a situation where we had quite a good growth, we have continued to add and extend our roster and we had EUR 50 million increment. Now we're talking EUR 70 million increment based on the higher efficiency. So we feel really confident that we have everything we need in order to drive growth further.

David, there is another David from Bank of America who wants to ask a question in the last row.

Hubert, do you mind just clarifying what goes into the assumption for freight. You noted a very limited impact on gross margin in '24 and '25. But does that assume that freight rates actually come down between now and midyear when they reset?

No. What we have assumed is that in the first half year '24, we see the up charges on top of our contract because due to the extraordinary situation, the Red Sea, the forwarders, Maersk, in our case, is asking for an upcharge. So that is considered. For the second half year, we expect that we do not see a lot of change compared to a first half year because even if the underlying contract was cheaper, we see that the situation is not getting back to the level we had in the second half year '23. So we expect elevated levels year-over-year in the second half year. And this was the underlying assumption for the freight rate.

I think we have Geoff.

Geoff Lowery, Redburn. Just 1 question as per instruction. What is your full price realization now in your view as in full price as a percentage of revenue? What has it been? And what does it need to be for you to your gross margin expectations around promotions in 2025?

Yes. I mean I think it's a very difficult question because you're asking, let's say, across all countries, across all channels. But I do believe, let's say, that also coming out of the year of 2023, which was over promotional that we do have, let's say, some opportunities to increase our full price realization across the board. But I cannot give you an exact number, let's say, what do we believe is the right number to be. But I think looking at where we are today, I think there's a good potential to realize further full price.

I think Monique had a question from Citi.

I just had a question on U.S. basketball. So Arne, you mentioned that you're only in 50% of doors and that you could get or the competition was at 80% to 90%. So just wondering, do you think you can reach that 80% to 90% and when? And what sort of conversations are you having with your wholesale partners on the basketball side, particularly given you mentioned the launch of [ LaMelo sports ] style later in the year.

Bob, do you want to take that question because you're in daily contact with the retailers?

Yes, we do believe we can expanding up with those, have been in conversations with our retailers because we're selling 2025, we're just starting to show some of those new products. So as I kind of outlined, we have new pillars of our business that are expanding and we are having those conversations about expanding that distribution. I think importantly, when we started out, we really wanted to generate heat and get the consumer looking at PUMA basketball first, and then we'll expand after that but you mentioned [ LaMelo lifestyle pillar ] that is the key one that is right in front of us here in the next 100 days.

And I think you can also, let's say, make a certain parallel between basketball and running. And I think you also saw that let's say that we have humungous amount of opportunities still open doors on the running side. And it always starts out, let's say, brand product distribution that you first execute very, very well. And when you see, let's say, a certain traction, then you have a model to further expand. The worst thing is what you can do is just, let's say, try to go all in with various partners. And this is why we are taking that incremental approach. And I think with the success we have shown, I think we are very well poised to expand the door count.

And you think you could get to that sort of 80% to 90%?

I think so. Bob?

Sorry, it won't be overnight. We'll get there, for sure. But we wanted -- to Arne's point, we want to pace that, make sure that we keep the demand on our side. There is incredible demand right now to go all the way, and we just want to make sure that we pace that, make sure that we're getting that pull business.

I have Olivia from JPMorgan.

Just going back to gross margin bridge that you showed, the pricing contribution. Is that more or less than you've done in the past? And how would that be achieved, set, mix or peer pricing?

Yes. If we talk about the pricing, of course, this is different country-by-country because you have seen from the past couple of years that it is in the country also driving the price increases. If you look, for example, at the moment into countries like Japan, they have a huge pressure from the FX side. So that is driving prices up. We have to compensate FX impact to the extent, but we're not doing that on comparable styles. We're trying to do that with newness as well because comparable styles, it's very easy to recognize that this shoe is EUR 10 higher than the season before, so people getting reluctant if a new product drops into the market, then, of course, there is no reference and this is part of the strategy. The second part of the strategy is, of course, elevation of the brand. So we want to sell at a higher price, selling more in the range of EUR 80 to EUR 90, EUR 100 to EUR 110 or even above and this is then carrying higher margins, and this is exactly the prime strategy we're talking about to get into a higher distribution into a higher segment. And that's what we're focusing over the strategy that will drive also profitability. And you can see that in the pricing in general. And of course, then it's all about balancing the respective markets and the needs. And of course, if we're not pricing higher, it drives also volume. That's for sure. So we try always to find the right balance between driving gross profit margin and driving volume to maximize the old volume impact.

Fantastic. I think Philip from [indiscernible] is the next one.

Actually, you mentioned the potential in sports apparel, for lifestyle apparel, particularly, I guess, on the women's side. And I guess this opportunity is very obvious and what has held you back in the past to realize that? And what are you seeing as a key execution risk for realizing this potential?

Just to clarify again, did you say on sports apparel or sports style apparel?

Sports style apparel, sports lifestyle apparel.

I mean, we truly believe that a big part of the total look of the direction of the trend is pretty much driven through the clothes. I mean I think a big part of making a catalog 2 weeks ago was to show ourselves as a total brand, as a 360 outfit. If we are today embracing a trend, and we truly believe low profile will be a next trend, we need to educate the consumer at that total look and a total look that comes from us and not from someone else. We believe that not only in the female side, we believe that in both genders, I think we have today a very attractive sports that allow us to influence that. And we also see that sports today, it's definitely influencing the fashion out there, so we have even more credibility to gain the space there. Specifically to sports style. Yes, today, definitely, there's a lot of accounts looking to us as a more fashionable or more daring, let's say, brand that is willing to try new things, and we're definitely getting that traction as well in that side of the business.

And just, let's say, in terms of priorities, I mean, we were born as a footwear company, and that is also our #1 priority. And I think when you look, let's say, at the journey, I think it's also becoming clear, let's say, okay, I mean, focus-by-focus, priority-by-priority topics, we are trying to break through. And let's say footwear is always the foundation in our business. And this is, let's say, why I think we still have a lot of untapped opportunities in the apparel space, both on the sports side as well as on the sports style side.

Grace?

Great. Just following up on the pricing strategy, and you've obviously spoken a lot today about brand elevation. When you've done your kind of brand research on pricing, if you look at your price positioning versus your peers and the gap in price points, how has that trended historically? What does that look like today? And how do you expect that gap in terms of price positioning to evolve going forward. And I guess related to that, given you have this like brand elevation strategy, have you done any work on kind of does the consumer buy PUMA because of price and because of value and how kind of this brand elevation strategy could potentially impact that?

Yes. I mean, look, I think the overall pricing strategy where we are, as the challenger has not changed that we are saying, let's say, on the same price point, we're providing more value or let's say, we are at the same value, 1 price point below and I think when I say so, obviously, a brand elevation would always lead, let's say that you can also have more flexibility on the pricing. When we look, let's say, at currently the consumer, I think it's also strongly correlated, let's say, with the different channels. I mean we have amazing success, as you heard, let's say, on the basketball side. I mean, these are our shoes significantly north of $100. We had significant success in football shoes, which is also significantly north of EUR 100, the main price points which we are selling. And let's say, also as Bob has alluded to, we have a very strong success on the sports style side, more on the family level. And on the family level, it's more price sensitive there, where we had not, let's say, such a success yet, the low single-digit market share is in the prime segment where we are selling, let's say, sports shoes at elevated price points because yes, we have opportunity to build up a higher brand equity and relevance with our target consumer. And that will -- they come. Because again, I mean if you sell your football shoes for up to $250, that means you are providing a lot of brand value to the consumer because also competition does a great product. That's clear. But we are not only delivering a fantastic product, but also that brand heat to the consumer.

Thank you. I think we have Wendy before we kick off with the second round.

I have a follow-up question on China and on profitability. If I look at your 2023 numbers, I think China's margin is roughly 15%. What is the underlying margin then for you in 2026 when you come up with your guidance of 8% to 8.5%, the underlying margin in China. And then given that the market is now more competitive with local brands, that means that you are going to invest more in marketing. And that probably will also dilute margins in China?

Yes, of course, with the factors Arne explained, increasing gross profit margin, but also getting leverage because of growth, we expect also higher profitability overall in China. And there is, of course, between the 8% and 8.5% always a certain flex. So there is no nail down number until 2025 because you asked about '26 and we believe that the potential on top of that is much larger talking the historical numbers of 30%. We are in our plan still away from that because we respect, of course, a current situation in the market. And we also want to continue to invest in the market to drive long-term sustainable growth. So we're not assuming that we are already at the top level. We're assuming gradual improvement considering further investments in China because we want to get away from where we are in terms of market share.

And I think 1 message is clear, and I hope that also came across in Shirley's presentation, what Hubert just answered. I mean when you're at 1% roughly market share, your objective cannot be, let's say, to optimize profitability in the short term. I mean your objective needs to become that 5% market share. That's the objective. And then obviously, with that economies of scale coming, also the profitability will come. But you can expect, let's say, for under 2025 that I mean, both top and bottom line, there's a contribution coming from China, which is bigger than today.

With Cedric from Stifel, please.

You had a presentation on India and all companies are not mentioning India that much or not focusing as much on India, which seems to be the next big thing. So my question is quite simple just to have a better understanding, as the market growth and the potential you have, what would be, in your view, is the size of the market, how you do asset, you gave some elements. And do you think the conditions are there to have the same kind of profitability than in China a few years ago?

Can I try it first? Take a try and you add on? Look, I mean, I think as [indiscernible]said, I mean, it is a market which is poised to grow high single digits. I mean the market information in India, I think we also need to be honest, is less reliable than we got, let's say, from [indiscernible] on Europe, but that is I say, internal best guesstimate, which we have that the market is currently growing at high single digits. It is a market which is more price competitive, especially, let's say, also, yes, it's an open footwear market where you also sell a lot of sandals which have a lower price points, but still a decent margin. But I think let's say, with the economy growing and also the middle class is growing, and also, let's say, the sport participation is growing, we do foresee, let's say, that also, that should be contributing to improved profitability. But I don't -- I cannot foresee at where we are today that it can reach, let's say, this 30% profitability of China that's -- I don't see at the current environment.

[Technical Difficulty]

Until we see what?

Before India moves the needle for the big picture of your company in terms of KPIs, it's 3 years, 5 years, 10 years, what -- maybe to start with, what's the weight of India in your total sales as a starting point?

You mean what kind of share has India...

What is India sales versus PUMA sales, what's the weight and where can it go in 5 years?

No, I think we answered this one. Yes. I mean it is roughly, let's say, around 4% to 5% of our net sales mix today. And as we said, it should continue to grow at an accelerated rate higher than the high single digit. I think we just need to be aware and I want to explain it one more time that 2024 will be a very interesting time for India, where BIS certification comes into play, where everybody is currently chasing local manufacturing capacity on the footwear side. Again, we are best poised to use that because we have the most capacity in that country. But what that means for the consumer and the consumer demand is yet to be seen. But again, I remain very confident that we are best set up to use 2024, again, to further strengthen our market position because we are best suited in terms of local design, local development and local sourcing and in increasing more protective environment.

Good. We have Antoine have a question.

Just 1 question on the flat sole's trends that you have talked about. You talked about early positive signals in Korea with an early launch. Do you have signals in the Western markets already that it's starting sort of to take off? Or do you have to educate the consumer altogether? And related to that, do you have competitors on this very specific space? I think not. It's good not to have competition, but sometimes, it's also good to have competitors sort of to broaden the trend. So happy to get your thoughts on that.

So of course, we see -- and we have facts because we did our first pop-up event in Korea with the Speedcat and yes, we have the figures of very strong sell-through, that give us the confidence that Asia, specifically Korea might be advancing the trend as it has been in other trends as well. So it's not something that is new in the marketplace of sneaker heads. At the same time, we already did the first drop of the Mostro and we have many accounts sold out, not only in Europe but also in the U.S. and in other parts of the world that I think more details, [ Lionel ] will share with you guys tomorrow. In addition to that, we see this trend popping up quite, let's say, in many influencers, and we see that through multiple insights, either customer insights, accounts insights, being [ touch ] stores calling us and asking, et cetera. And as you mentioned, competition, we know that competition will tackle low profile. They might not take us and influence the same sport, they will definitely maybe pick others sports to lower to the ground they influence, and we see them coming just off for us as well.

Good. I think we are reaching quarter 2 past almost. Maybe 1 or 2 last questions for today. So are there any other questions? Jurgen?

You laid out in detail how you think to get to this 8% to 8.5%, long term 10%. What needs to go right in order to get to this 10%. Is that just an external factors in terms of currencies that need to go into your interior direction? Or what would be longer term, the building blocks? And do you think you can run this business on a 10% basis on a sustainable basis, i.e., top line growth, 10% margin? And then just...

Thank you, Jurgen. I mean, I think the messages we wanted to convey is that, I mean, this 1.7 basis percentage points on gross profit margin, we cannot bank on this one. And nobody knows that when the currencies are recovering, what is our control is to get to 10%. And then these 5 factors, which we have laid out, the way how we can get to this 10% by elevating the brand, by, let's say, tackling the most profitable business segments, which are still more or less white canvas for us. So everything which else then comes, let's say, is more or let's say, a tailwind on top.

And maybe to add on that, because it created a certain frustration, I have to say that we had to realize that. But beginning of '23, the forecast for the U.S. dollar was 115 and now we're at 108 and that's the situation. Of course, you cannot change that from one day to another. You cannot compensate that from one day to another. So to compensate that on an organic basis, takes a little longer because if the U.S. dollar would be at the desired 115, of course, all the potentials we are laying out are on top of currency. And this is what we want to explain. No matter what we believe 10% is the right target for long-term growth also to grow beyond what we showed to you.

Just to reiterate what you said. I mean in Q1, you remember, we still posted a reported was equal to constant currency. There was no headwind and then 9 months later, I mean, we are closing there with 5 percentage points in headwind costing us EUR 400 million top line. I mean, there was not -- we were not able to project that based on also the forecast which we had available at that time.

Yes, Zuzanna?

It's a very short one. I really promise. You mentioned quite a few times in the presentation the Lifestyle business, I guess, both on the footwear side but also on the upper side. Is there any way you can maybe show us the percentage of your total business, if you were to split it between performance and lifestyle?

Yes. I think that when you talk about, let's say, our performance business units which are football, running, basketball, and then golf, you would always be, let's say, around -- on a group level, yes, that we are around 1/3 of our revenue, which comes from that segment. Again, I think what -- let's say, there's a pinch of salt, I mean you know that the running shoes are also used for lifestyle purposes, less [ cleated ] shoes from our football business unit. But -- so this is why we always say it's more, let's say, the category split of the business units there. And then again, I think our market share in family footwear is very solid. We are significantly stronger there. We have a very compelling price value relationship. And I think when you think about this one, it also makes sense on what we said because the family footwear is, let's say, less trend savvy. So let's say, we were able, let's say, with our quick reaction to trend, possibility to have, let's say, the right things in that channel and trends are changing slower in that channel. But let's say, the strategy which needs to be adjusted is on the higher end, so that we are creating that heat moment incubating at the right moment in time with partners like and where you see a changed perception of the way we work together. All right. I think I need the clicker. We're going to have 2 more pages. Are the pages set up? They are set up. Okay. So let me see if that works. All right, who is joining me tomorrow morning for the morning run? All right. Fantastic. That's I like that. Because there's 1 more person joining us for the morning run. [ Mouly Sider ] came over. So she will be the pace it up for tomorrow morning. So we took a picture who raised hands. So we make you accountable for this one. Next one, I mean, we not only have award-winning shoes, but we also have award-winning people. And one of our special people taking care of us tonight is Massimo. Massimo has officially been becoming Germany's best pizza maker. There's a contest going on, and he will take care of you tonight. So we will meet upstairs in the canteen. And that's why you see, let's say, so many happy people around because they get the best pizza in Germany here in [indiscernible]. Thank you very much for day number one. I think you don't know your way up. When are we meeting upstairs?

10 minutes.

In 10 minutes. I think, David, you're taking care that we all move up, and then we will meet over and then eat the pizza there. So thank you very much.