Hello. Good evening, everyone. It's 6:00 P.M. here in Torino. I would wait another couple of minutes in case there are some late joiners, and then we can start with the presentation of Q3 results. Thank you. Okay. I would say we can start with the presentation of the figures. As you know, this morning, the board of directors of BasicNet has gathered to review the figures of the period ending September 30, figures which we're going to be presenting today, plus a few other topics in the agenda. We had the chance to review the numbers and the performance of this Q3, and then we will go more in detail, but I think we can say it has been a positive quarter under commercial standpoint. Our brands then with different and mixed performances among the brands have been performing and they delivered.
Then we will go a little bit more deeply. It's been a very intensive quarter in terms of activities we carried on to work on the profitability both of this year and of the future years, to make sure that the structure of BasicNet is properly in shape. It's not specifically within the presentation, but I will also share a few details of what happened, and I'm sure all of you had the chance to read through the newspapers the disaster happening on retail stores across Europe, especially Italy and France, which has marginally touched also our group. Starting with the usual indicators we comment in our meeting, the aggregate sales of licensees, meaning the sum of the sales of commercial licensees, production licensees, and our direct sales have all in all been positive, with, of course, a contribution from the new brands, Woolrich and Sundek.
When we have a look at the various brands and the geographies, I would say that the most important and the most reassuring figure is that we are still growing double digit in Europe, which is by far a more important market and the one that we are directly operating for most of our brands. I would say basically now all of the brands but Kappa where we still have some significant licensees across the continent. In terms of performance of the single brand, we've had some marginal changes compared to last year in Kappa and K-Way. Superga, as we commented already in the half year call, is clearly suffering under a commercial standpoint. We put in place several actions for the turnaround of the brand, but we'll come back on that as we comment the direct sales.
Sebago is performing extremely well under all point of views, so in terms of global performance and direct performance as well. It's clearly benefiting from the current status of the market, so the current consensus around Ivy League style, and so our loafers and the dockside, but it's still growing around its bread and butter, expanding the lines, the core products, and the apparel, which was completely new when we bought the brand. In addition to that, as I was mentioning, and we don't have any licensees, so all the performance here is driven by our direct sales. Woolrich and Sundek combined for a little bit over EUR 70 million in sales, and Sundek has basically performed how we expected it to. Woolrich had a rougher start of the year, but Q3, I would say that especially in terms of wholesale deliveries has been absolutely positive.
These trends basically translate to the consolidated revenues, which are the sum of direct sales of goods, royalties that we collect from our licensees, and for a small portion, the third party's real estate revenues. The year-over-year performance in direct sales has been around +30%. Even when we take out Woolrich and Sundek, we would still be growing. Here the growth is mostly driven by Sebago. It's not completely for like in terms that we switched some indirect markets that were previously generating royalties into direct markets. Namely, we're talking about France and Benelux mostly, but still with an absolutely impressive performance. As I was mentioning, Q3 and, as you know, our calendar, which is the one of the sector, is the quarter of wholesale deliveries, which have been absolutely good and positive for all of the brands.
It's never easy and we can never take it for granted that we are able to deliver everything timely and satisfactory, which was the case. That's extremely important because it also gives us the possibility to be there for reassortments for our customers through Q4. E-com has kept working positively. The trend we commented in Q1, Q2 went on the same way. We kept investing. We recently released the new Sebago website. Other than the front end, which is the one you might know as users, there is a lot of work and investments on the back end and on the team, which is definitely paying back. On the retail channel, on the other hand, I have to say we had some disappointment, and it's mostly driven by the weather.
It's no secret we are a strong Q3, Q4 group and especially with K-Way and then in a marginal way also for Woolrich. Of course, very, very high temperatures meant a lower retail activity, lower traffic in the stores, higher conversion, but much lower traffic in the stores both in Italy and especially in France. We saw a very, very positive turnaround since, I would say, the beginning of October. Especially the last couple of weeks had been extremely positive until last weekend. We can speak about that now. Last weekend, as you know, there have been riots in a few Italian cities, especially Milan, I would say, it's the one with the most damage. A lot of damage has been done in French cities, and this was basically across whole France. In Italy, luckily, we didn't report any direct damage.
We had to shut down a few stores. On Monday, we were asked by the police, let's say warmly suggested by the police, to close down early as some protesters were approaching the area of the stores, and this is for both the K-Way stores. But no damage was carried out. Whereas during the weekend, we had to close down earlier the Sundek store, which is exactly a flagship store, is right in front of Duomo. That was the very, very hot area, but the store's windows were not touched or nothing else. Funny thing is, Sebago store is basically just behind the corner. It kept working. Actually, it reported some very, very good figures. Apparently there were rioters on the square and just two streets away, there were people shopping quite easily.
In France we managed to close the Sebago stores before any damage was done. So basically what happened is we lost, I would say, last Saturday of sales, then we see what is going to happen next weekend. Nothing occurred to Woolrich or Sundek stores, so nothing to report. On K-Way, we had some damage. I wouldn't say serious, but still some damage. Six stores were attacked with different outcome, but basically all of them reported damages to the windows. All of them reported some damages to the furniture and the goods within the stores were stolen. Basically everything which was on display, plus in a couple of stores also the warehouse was emptied completely. Overall, the amount of damage, we still don't have an exact figure. Shouldn't be huge.
Then, of course, we have our insurance company and our broker is already working on the case. So hopefully we're going to recover it. But still, we had some issues, some business interruptions. We can reasonably expect others to come in the next weeks. Then, of course, we hope this is not going to be the case. Going back to the figures, EBITDA is still at EUR 38 million. I go back to a remark I also made during Q2 call, just to be extremely clear. This figure is adjusted by extraordinary one-offs, and also the comparable period, so nine months of 2025. Extraordinary one-off, that means mostly, for this year, the breakage costs we had in Woolrich to terminate some agreements, some leases, and all the severance for the employees that decided not to move from the historical headquarters in Bologna to Torino.
Whereas last year, the highest adjustment was related to September, to the costs borne in relation to the sale of a portion of K-Way. What we do not adjust, so it's still within that EUR 38 million, and lowering the amount, is those costs which will not be replicated in future periods. Meaning, if we go back to the severance of Woolrich employees, we are still expending here their wages. We just took away the one-off severance. So if we further adjust this 38 to give an adjusted ATAN rate, this figure is closer to EUR 44, EUR 45 million. Then moving to the net financial position, we landed at EUR 174 million. Here, the comparison is a bit complicated.
We got a slide later on that probably helps a little bit reading the figures due to the number of extraordinary things that happened or occurred over the last, I would say, 18 months. So basically last year, we still had all the proceeds coming from the K-Way operation. September historically, so if we clean the extraordinary impacts in both ways, so positive and negative, September together with October is always the month where we have the highest stretch. That's due to our course of the business. As you know, we receive the goods for winter starting from April, May. We deliver starting from June, July. So that means that in September, October, basically we've paid, or we have refinanced through import financing all the payables for the goods for the season. We still have to cash in the receivables from wholesalers and distributors.
We start cashing in October basically, but that mostly goes into November, and we still have to perform the retail sales. The largest portion of D2C is clearly November to December. This is all to say we are at EUR 174 million. Of course, this figure is expected to decrease to the end of the year. I would skip the comments which are basically what we already said. In terms of aggregate sales, just a couple of remarks. The increase of ASL, which mean sales of commercial licenses and our direct sale, basically benefit from Woolrich and Sundek than with the other brands offsetting each other. Whereas in the case of aggregate sales of sourcing center, and here we basically report the same phenomenon we've seen at Alfier. We do not have any contribution from Woolrich and Sundek. Okay?
Here we only report the purchases of brand, which generates sourcing commissions from their purchases indeed. Okay? In case of Woolrich and Sundek, we decided we don't have the strength at this point, so there was not the chance to implement sourcing commission or the intention to do it with our suppliers. We are comparing the same perimeter as last year in terms of purchase. This reduction from 240 to 200 is related to three brands, which are Kappa, K-Way, and Superga. In the case of Superga, we've been working over the last couple of years, for a big rationalization of inventory. You know the brand, and how much carryovers are important.
In a period of low sales, there is no need to make significant purchases, and as we tend to repeat every time, we avoided and we'll still avoid to be commercially aggressive when we know that this would damage the brand. We will not push goods on the market just for the sake of completing a positive quarter, preferring to have a mid- to long-term view, and having several brands allows us to do so. Basically, to be very concrete, Sebago performing very well and growing gives us the chance not to push Superga on distribution channels we don't like just to keep revenues up. As per the other brands, in the case of K-Way, actually, we had in 2025 an exceptional bulk of purchases.
After our sale to Permira, the new management team implemented a never out-of-stock program, so deciding to make extraordinary purchases of the carryover items. There was no need to repurchase this year. In that case, it's rather 2025, which is extraordinary, rather than 2026 to be at a low level of purchase. In terms of geographies, as I was mentioning, Europe is growing. It's our main market, and its relative weight against the other markets, it's always more important. Whereas for the Americas, which is the market with the most negative sign, we are always sharing the same comment. As you know, we terminated the previous agreement we had for Kappa. Again, we are suffering in Argentina due to the economic situation of the country.
Here, again, the decision was not to rush and pick some other licensee just for the sake of having one. We are working to find the right partner and make sure to build a long-lasting relationship. Then a quick snapshot on the communication and branding activities we made in Q3. Basically, this is the quarter of music festivals, so we had several activities across the different brands. Plus, this is the quarter when we make the launch of the new sports kit, and this is especially the case for Kappa. In terms of festival, you know how deeply and strongly Kappa is associated with the FuturFestival, so the techno music festival here in Torino, which has become one of Europe's, but I would say one of world's, leading electronic music festivals. Kappa replicated with this association with the festival, Les Ardentes.
In terms of collab, we joined forces with Live Fast Die Young, and this is a part of the collabs we work on to make sure we somehow intercept younger consumers, so tomorrow's Kappa's consumers. Then when we move to sports, so the true DNA of Kappa, we presented the kit of several teams, which are those we sponsor. You know, Genoa, Nice, Fiorentina, Kaizer Chiefs, Cadiz, Partizan, among the others. Then Kappa presented back, this is something we hadn't had for quite a time, a new football shoe. This is a return to the past.
For Superga, as we were probably commenting in one of our previous meetings, we are trying to make small, smart moves, so avoiding big commercial investment, but rather seeding with cool brands, even small niche brands like Chaumont and Pasqua, which are the two we worked with in this quarter. Then the celebrity seeding continued. You know that we have some unpaid celebrity like Meghan Markle rather than Princess Kate, who are Superga enthusiast buyers and who've been for a long time. Other than that, we keep working with people we want to be associated as a cool and very feminine brand. K-Way as well, worked with some festival, within the expansion plan in the U.K., which also saw the opening of a new store in London. We've been present at All Points East. Then, with regard to Italy, we've been at Polifonic here in Puglia.
Whereas in terms of product collabs and collection, we presented the new fall-winter collection, the collab with Leonardo Fioravanti, so our longtime brand ambassador and world number one surfer. We recently presented the new collab with Sœur, so you probably know it's a super cool and very feminine Parisian brand. We've been working together for a long time now. Sebago completed the boat tour. We saw our shoe boat navigating in Florence at Pitti, in London, in Amsterdam, and in Milan, and then it came to Torino in occasion of the Sebago Rowing Cup, which gathered some of the most prestigious colleges and rowing teams here in Torino. Then we had some activity in Saint-Tropez, where we opened a store which actually presents, as you can see in the picture, three of our brands, so K-Way, Sebago, and Sundek.
That was also the chance to collab with Le World de Saint-Tropez. In terms of collabs, we also presented the collaboration with Westerlind, and these came along a pop-up in their New York store. Last with Woolrich and Sundek. Woolrich presented this photographic project called The Great Outdoors, which is dedicated basically to its roots, so where Woolrich really comes from. In terms of events, we made a partnership with the Festival Genesis here in Italy, and then we had the presentation of the fall-winter collection. As per Sundek, we had some activation activity in Ibiza. We have a couple of mono-brand stores over there, and so it is always a very important market both for the commercial standpoint and also for the image and branding point. Then moving into the interim result.
We already briefly commented the consolidated revenues, so here just replicated them in a graphic way. You can easily see that in terms of direct sales, basically the change of the period that we somewhat set with other brands is related to Woolrich and Kappa. The reduction in net royalties is partly due to some changes in model. As I was saying before, some Sebago licensees that switched into direct distribution, the reduction of sourcing commission following our lower purchases, also in view of an optimization of trade working capital and thus of cash, and then some actual lower activity from commercial licensees. When we have a look at the EBITDA, we are comparing these nine months with roughly EUR 40 million in 2025. Basically, what we did in the last nine months is pretty much summed up in this slide.
We purchased and we add some additional, almost EUR 60 million consolidated margins that comes from Sundek, Woolrich, the new markets in Sebago, plus an increase in marginality across, I would say, all brands, which we expect to further improve next year considering the dollar we have hedged. Part of these margins we purchased converting royalties, so giving up royalties. These margins brought with them additional structural costs. The good news is we expect the margins and the revenues, and thus the margins to be at least stable. Actually, we see them and of course, we hope to see them growing. Whereas on the cost side, we have already worked a lot and we start seeing the result.
As I was mentioning before, in between labor and G&A, we already part of this if you sum the two together, it is EUR 41 million, seven of which will not be there at run rate. This is just related to Woolrich. Then we put in place a lot of activities in Kappa as well to improve the retail distribution. So we terminated or we did not renew several franchise stores, which were at lower profitability. Basically, we were either losing money or not making money and having too much distribution and too much need for inventory, which was not making sense under any standpoint. We closed a few direct stores, especially outlet. Again, we closed those which were not profitable or where profitability was not satisfactory. Then we worked to exploit the efficiency with the new brands.
That means that several people were moved from Kappa to the other brands. Of course, to fill in the places of people who decided not to move from Bologna here to Torino. The same was done for retailer. We already spoke a few times in regard to Woolrich about the former flagship store in Milan, which has been closed and sold. We will be reopening in the premises which are currently Kappa and Superga, with a dramatic saving in terms of rent cost, and we expect the commercial performance to be the very same, if not better. Same thing we are doing in Rome, also converting a Kappa store into Woolrich. There is no Woolrich flagship store right now in our capital. It was there until a couple of years ago when the previous owner of Woolrich decided to close it because it was not profitable.
Then very quickly, I think some of you already made the calculation. I know EBITDA unluckily doesn't explain the whole performance, and we have to go down to EBIT. Still, if we compare the performance quarter by quarter, Q3 alone has been all but disappointing when we see what we made in Q3 2025. Basically, if we are lagging behind on the nine months, it's basically due to a poor Q2. This gives us very good confidence again. We still need to see what is going to happen in the market, what is going to happen in the streets, because if we have protesters and looters every day and every weekend, of course, that is going to affect our Q4 performance, and we cannot hide that, and this is going to happen for everybody in the sector.
Still, we tend to believe these tells us we are working the right direction, and implementing what we were saying ourselves that had to be done when acquiring two important new brands. In terms of net financial position, as we were saying at the beginning, we worsened by basically EUR 100 million, EUR 30 million of which come from the operating cash flow, and this is mostly trade working capital. This is very typical and occurs every year with the fact that we have two additional brands, and one of those brands, Woolrich, had at the beginning a very low level of working capital, so we had to refund it basically from zero. Also, in these nine months, we have not been shy in terms of CapEx, which doesn't mean we've been throwing money out of the window.
But we've kept investing on things that we believe are strategic in the next 10, 20, and 30 years, meaning the real estate. We bought a new building nearby our headquarters. We renovated the headquarters to host here the Woolrich team moving from Bologna, actually. Not many people moved, but we created the space for the Woolrich team, and we kept working on the IT infrastructure. In terms of acquisition, we have not updated compared to Q2. You remember we paid the last installment we had for K-Way France earn-out, and we had a settlement of the balance for the purchase of Sebago France. The next payment will be due Q1 2027. I don't see any acquisition happening from now till year-end, hopefully. Other than that, also in terms of dividend, there has been no further distribution.
You remember we paid EUR 7.5 million, EUR 7.6 million to our shareholders, plus there has been a distribution from K-Way that has partly stayed within the group. It has gone to BasicNet, and partly has gone to the other shareholders. It is the EUR 2 million portion you see here. Lastly, in terms of treasury shares, we kept buying, but still at a lower rate compared to previous periods. Here, I will try to explain this slide just to put in very graphic terms what happened about our net financial position over the last year. We started 2024 in a very similar position. We started 2025, and we closed 2024 in a very similar position at the beginning of this year, so with a negative position of EUR 90 million. Then K-Way operation brought extraordinary cash in for EUR 170 million.
We just put any other cash flow just to make it as simple as possible, not to overcomplicate it. All the other cash flow brought to the zero position we see in the comparison at the end of September 2025. Then Q4, again, was affected by heavy extraordinary items, and we had the impact on net financial position of our acquisitions, and this is, of course, the sum of what we paid plus the debt that we assumed, which was already within Sundek and Woolrich. Apart from that, we had a positive cash flow of nearly EUR 45 million in Q4 2025. This is actually a net figure. This is a free cash flow, so operating cash flow, which was exceeding EUR 50 million. The negative cash flow, so the payments made for CapEx activity and the negative cash flow for the purchase of treasury shares.
The net figure went up to 45. That is basically then I will let you draw the conclusions. That is basically the normal cash flow we expect in a Q4 with normal wholesale deliveries and retail activity working as usual. I think we have been through all the figures. I will stop presenting. Wait, if I just manage to find. Okay, very good. If you have questions, I will be very glad to answer. Sorry, just needed a little sip of water. I see Stefano with the hand raised. Stefano, please, I would let you begin with the questions.
Hi, Marco. I start with some questions. I start with Q4. Let us start from sales in general. If I do remember well, the organic growth for the consolidated sales organic in the first half, the trend was around up 5%, while this time, after nine months is -2% means that the organic trend in Q3 was negative. Apart from the indications, I would like to know some comment, let us say, on it. You mentioned already the unfavorable weather.
and more than decent start, if I understood well, in October, before the riot issue. If we can go back to this point, just to better understand the slowdown in Q3.
Okay. Actually that's the main explanation by far, and the key explanation, and it's related to K-Way. You know how important K-Way is, and the amount of investments we have made on the brand to see over the last years. Unfortunately, what we still don't manage to fully control is to be a brand which is not subject to weather, and this is, of course, one of the big challenges of our new management team, definitely. Making the brand available also when it's not raining, and also when it's not extremely cold, which is really not the case. Q3 has been, I can say, definitely disappointing in terms of retail for K-Way, and the retail of K-Way in general terms went through ups and downs over the whole year.
We started very positive in January, February, then we suffered a bit, then the stores started working again. Then Q3 was absolutely negative, and then in October, shops were already working, right now are working at a positive rate. Okay? Apart for what happened this last weekend. I know that explanation sounds over-simplistic, but that's really the case. We had dramatically low traffic in K-Way stores in Q3, and that translated in very low sales, which on the other hand, I'm staying on the same brand, in order not to mix different things. Wholesale deliveries have been extremely good. Basically retailers were eager to receive the goods, we didn't have no cancellations, returns, or whatsoever. It's just that right now, K-Way is a brand that sells when there is the rain. There is a direct relationship which is- Objective.
Okay, that's just it. We've spent, I would say at least one month, after the summer sales, hoping and praying for the rain every single morning, which unfortunately didn't happen. Here the point is, of course, we know we have to work on this. One, I don't know whether I already had the chance to mention it, probably not, but I should. In early September, the new CEO of K-Way joined. It's Mr. Pierre-Arnaud Grenade. He's a former A.P.C. and ba&sh. He's a very well-known and appreciated manager in the sector. I would say that his number one priority is product. Within the product, there is of course, the product being appealable, desirable, fashionable, and whatever adjective you want to use, but also being a product which is sold 12 months long.
Okay. Thank you. I move to sales of sourcing center. Obviously, I heard your indications. After nine months, they are negative in a way, which is 15%, so slightly less negative than in first half. The point is that, even if I look to the slide number six, we have to go back to the COVID period to have a worse number than the current one. My question is, as the sales all in all are positive or not bad, let's say, do you think that it is quite imminent, let's say, the timing of a rebound, or is there something that we have to understand better, let's say?
A few things together. Probably the post-COVID figures were not realistic, meaning, it doesn't just relate to us and our licensees, but the whole world purchased too much right after COVID. There was this huge scare that the world could close down again, and we might end up without having goods. Probably we had, in 2022, that's really clear. You see the figures, it doesn't make any sense in any historical line. Everybody was over-purchasing, and then partially also translated into 2023. For many licensees, that has meant a huge financial burden, as you can imagine, because of course you have the relationship with our group, but some of our licensees are small entrepreneurs. Not all of them are necessarily big international groups.
In many cases, it's a family entrepreneurial business, a small one, where purchasing goods is the most stressful part of their job, and funding the trade working capital is the most stressing part. I have to say, across the network, there is much more attention at how much they purchase. I would say also with regard to ourselves, we've been purchasing with much, much more attention, other than I would say 2025, the only exception was K-Way, where we had this never out-of-stock program, and probably, it's always easy to say it after you made a choice, and you never know whether it's going to pay or not. Probably at the end of the day, we over-purchased some EUR 10 million in K-Way stock, which was not necessary. Okay.
This is translating in lower purchases this year because, as you can imagine, the Le Vrai blue in blue color, L size, it's always the same. So when you got 10,000 pieces, you really don't need to purchase anymore. Do we expect purchasing level to go back at COVID? Not at all. Not at all. We expect them to stabilize. I would say probably that a 2023, 2024 range, so that EUR 220 million-EUR 230 million is something much more realistic. Then it also depends a little bit on how we go on managing the markets because, the fact that we purchased back so many markets, I'm talking basically, for Sebago, Superga, we bought back all European markets. That means that there is just one company which has to purchase and it can purchase much better.
Or at least we tend to believe we can purchase much better rather than having one licensee in France, one licensee in Spain, one in Greece, with all separated inventory. So what you immediately see here is the lower sourcing commission. What you don't see is the efficiency on the inventory, on the working capital.
Thank you. Well, moving on margin. There are many moving parts here. There has been obviously significant improvement in Q3 versus first half. First, I want to check if I understood well something you mentioned before. You mentioned something like EUR 7 million, let's say, improvement in the cost structure. I wonder first if I understood well, and if this EUR 7 million is, well, imagine 2027, 12 months, the cost base of Woolrich will be EUR 7 million lower than the beginning of second half or than the beginning of 2026. So is it EUR 7 million more with respect to what we already experienced after nine months or something was already realized in this last Q3?
Okay. I got the question. So I try to put it as simple as possible. If we restart 2026 now with the current cost structure, employees we have, agreements with suppliers we have, stores we have, instead of EUR 38 million, EBITDA is EUR 45 million. All these actions have already been implemented in full. Okay? This is just what we made for Woolrich and just what we made up until the end of September. It's, of course, the largest portion, I would say, of right-sizing or however you want to call it. There are different terms to make things look sexy but, whatever. We have other actions that we will implement from here till year-end. Some actions on all brands. But this is the most important bulk, fully implemented. So we expect to see the saving from 1st of January 2027, and indeed already in Q4.
Okay. So on top of this virtual seven, let's say, we have further action-
Yes
that we are going to implement between the end of the year and the beginning of the next one.
Yep. Exactly.
Okay. When it comes to net financial positions there are two ways I can put my question. First, maybe let's start from the easiest. If I took the slide 18, how much of that EUR 44.8 million other cash flow positive in Q4 2025? Can you remind me if there was something that was extraordinary positive in that figure?
No. There was nothing
Extraordinary positive or lucky, let's say.
No. That 45 is over 50 of operating cash flow. It's because Q4, we cash in all the receivables of the wholesale for winter, plus all the retail. Unfortunately for us, probably we should change the calendar year of the financial statements because Q4 is, at least in terms of cash, so much better than the rest of the year. I understand that there's also a level of volatility linked to retail, but it was a recurring figure, so nothing extraordinary there.
Okay. It's difficult to do forecast, but can we say that in a normal Q4 in 2026 you expect to generate, I don't know, at least 30?
It is very reasonable to say. Yes. Absolutely.
Okay. For the moment, thank you very much.
I appreciate you, Stefano, to say it for the benefit of everybody else here in the call, so I did not have to.
Okay. Thank you.
Is there any other question from anyone else? Okay. If there are no other questions, I remind you that you can find my contacts on the corporate website. If you have follow-up questions, feel free to reach out to me. Otherwise, we will be meeting and speaking again after the next board of directors, which will be held on February 12, 2027. On that occasion, the board will review the preliminary figures related to 2026. Then we will have a subsequent board of directors in March for the formal approval of the figures and the proposal to the shareholders' meeting of the dividend. Thank you again for your presence, attention today, and have a good evening, everyone.