Good evening, everybody, and thank you for joining our call today on Geox Full Year Result 2023. This is Luca Amadini speaking. Let me introduce you today to the call speaker, Mr. Andrea Maldi, Geox Group CFO. I need to remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on the group's current expectations and projections about future events. By their nature, forward-looking statements are subject to risk, uncertainties, and other factors that could cause results to differ even materially from those expressed in or implied by these statements, many of which are beyond the ability of the group to control or estimate. Let me now hand over to our CFO, Mr. Andrea Maldi.
Good evening, everybody, and thanks for joining our financial year 2023 results. I think that we will use our standard presentation to drive you through the results and the main highlights of the achievement that we have in 2023. I would suggest to move to page five with our Executive Summary where we can get the highlights of the financial 2023 results. First of all, we are moving in a range of, let's say, EUR 720 million, which are a little bit down 2.2% compared to last year. We will see during the presentation, but we need to take into consideration the strong impact of the perimeter reduction that has been determined by rationalization of our retail stores together with an effect which is coming from the FX rate, which is still quite important because it's in the range of EUR 17 million.
On the other side, the gross margin, which is set at 50.7%, with a nice increase compared to the 47% of the year 2022. The EBIT raises from 82 to EUR 15.6 million, 2% of the net sales, starting from 2022 in which it was set at EUR 4.3 million. Good news is still connected to the net financial position, which is moving at EUR 93.1 million. If we look at the financial position from the net bank debt, it is EUR 91.1 million. The difference, EUR 3 million, is basically determined by the fair market value of the derivatives. And the net working capital, which is now stable in the range of EUR 160 million, set at 16.2% of the net sales.
A quick snapshot of the current trading, which is mainly referred to our DOS performance, to our retail network, which is going pretty well, giving us a lot of strong results in the first two years of 2024 with an average of 9.4% compared to 2023. The quick reflection on the guidance, which, as you know, during today's session of the board of directors, we have been working around the approval of the budget for 2024. We are outlining a microeconomic scenario market, which is driving us to use a lot of prudence in our forecast for 2024. We believe to be quite flat compared to the year 2023, mainly related to the sales, but at the same time, we will be able to deliver further improvement in our industrial margin, gross margin, in the range of the 50 basis point.
I would start to the business update in page 7. We've looked at our market condition, market environment. With the slide on page 7, we'd like to provide you with a quick snapshot of the main market trends in order to have a comparison based to the Geox performance that we'll present later on this presentation. First of all, the inflation rate and the interest rate environment experienced in this recent year deeply influenced the family spending power. Sourced from the Association of Assocalzaturifici, our domestic reference market delivered a significant decline driven by a reduction of spending in terms of shoes by more than 3%. You can see that in the graph on the right side of the page.
In addition, we would like to highlight that also in the Italian shoes, in the export, we have been impacted by a double-digit decrease along with a peak of 21% in the semester September-October, so the last part of the year 2023. So clearly, it's evident that market conditions are experiencing a deterioration, and the purchasing power of the families, which is forecasted to be in 2024, doesn't seem to get better. If we move to page 9, quick snapshot on sales. As we already mentioned, despite we have a decrease on the sales moving from EUR 736 million in 2022 to EUR 720 million in 2023, we have been able to deliver a strong industrial margin with a strong improvement of our EBIT. The EBIT moved from EUR 4.3 million, which was the result of 2022, to EUR 15.6 million in 2023.
That means that we have been able to drive our P&L with an efficiency improvement, mainly coming from our industrial margin, but also through the cost control that we have applied during the year 2023. Still worth to remind that the decline in sales has been affected by a strong perimeter effect. It's EUR 18.7 million, out of which EUR 70 million is coming from the DOS retail perimeter, and EUR 1.7 million is coming from the franchising structure. At the same time, we have also experienced a negative currency impact by EUR 18 million as well. So clearly, two important, let me say, considerations when we look at the sales volume that are important to consider the fact that out of this kind of consideration, we would have been better than the results of 2022 sales.
If we move to page 11 and we start to have a deep dive on the sales, first of all, we have a sort of segmentation between physical, brick-and-mortar, and online. The brick-and-mortar is substantially flat with clearly within wholesale that experiences a good performance of 5 + 8.7% in 2023 compared to 2022, while franchising has been underperforming respectively by 5.3% and 6.7%. The online channel, despite if we look at the e-commerce, seems to be negative 4.3%, but we have two kinds of speed because we have suffered quite an important decrease in the wholesale business with 7.1%, given the fact that, as you know, on the market, there's been a lot of platforms that collapse and they are underperforming compared to their own expectation.
At the same time, we are pretty let's say pretty proud of the delivery of the results coming from our Web DOS online, which is overperforming by 4.2% and is continually we are experiencing this kind of overperformance even in the current trade of the first two months of 2024. I would now move to still to the deep dive on the sales on the business side and looking more at the sales channel. As you usually where we're trying to report our sales between wholesale, franchising, and DOS, as you can see, the wholesale is pretty much flat compared to the previous year with a +0.6%.
The franchising is instead experiencing a decline where we have already commented the fact that we moved from EUR 64 million to EUR 60 million, and the perimeter effect in this kind of evaluation has been quite important because we're looking at about EUR 1.7 million due to the loss of doors into the franchising channel. At the same time, we are experiencing a kind of slight decline, 5.9%, in the year-on-year performance in the DOS. Clearly, we have again to consider mainly on the DOS side the perimeter effect, which is impacting by EUR 17 million, almost 6.7%. On the other side, we have another speed on the online, which has been positive by 4.2%, which is clearly coming from a very strong performance in the second part of the year and mainly in the last quarter of 2023.
We now would like to report to you on page 15 the breakdown of the sales by region. As you can see, clearly, Italy is still one of our main markets, which is counting almost 30% of our business. Italy delivered quite a good progress, 3.1%, in a different context and environment of market. And this 3.1% is coming from a double-digit positive from the wholesale and at the same time has been impacted negatively, but it has been able to offset clearly by the reduction of the perimeter of our DOS and franchising businesses. When we look at Europe, clearly, we have been suffering a little bit. Our performance has decreased by 7.1%.
There's been an important market, which is mainly the DACH market of Germany, Austria, and Switzerland, which is clearly down compared to our expectation and down compared to last year, clearly impacted by the perimeter as well, but also by the collapse of the important line of wholesale business, which in this country was quite strong in the past. We have been able to deliver quite a flat or consistent, how to say, in any case, better than the previous year results in terms of sales in the rest of the world.
We are in the kind of world we have been able to close many agreements with new countries, mainly with the licensing opportunity, which are clearly driving for us the improvement of the doors, the number of doors, and the number of possibilities to expand our business in geographic areas, which are clearly difficult to penetrate from the very beginning. But our strong brand positioning together with our proposition to work abroad in the foreign market is helping us to position Geox in the best way in this kind of area, which are, as we said, not quite let's say it's not so easy to penetrate this kind of market. Last but not least, I will move to page 14 where we have clearly we can experience our breakdown of sales in between footwear and apparel.
Substantially, the break between the two lines is pretty similar, pretty consistent with last year. We are still in the range of 10% of apparel businesses. Despite 2023 as being a year of stable sales and that kind of line, this is representing for us an opportunity because we believe that apparel business is going to represent an opportunity for growth in the future. I think that it's almost all for the business review. I will move to page 16. On page 16, we have a detailed break of the P&L from sales to the bottom line, EBIT and EBIT. We already commented deeply the sales, EUR 720 million compared to the EUR 735 million of year 2022. I think that it's quite important to align here the improvement that we did in our margin.
As you can see, we moved from 47.5% of the previous year to 50.7% in 2023, which has been we have been able to deliver this kind of improvement to the rationalization, optimization of the supply chain and transportation cost, which are a kind of key areas in which we have opportunity for improvement even in the next future. If we look at the cost structure, the cost structure despite it seems to increase from 46.9% to 48.5% has been an area of strong control and strong focus. Mainly, if we look at the difference between line by line, we can highlight the fact that we have been investing a little bit more into the marketing cost, which are up from 4.1% to 4.6%, from EUR 30 million to 42.8%. We consider this kind of investor strategical for our proposition and brand announcement in the year.
That's why we are representing an increase on that line. The EBIT—still worth to remind that—has been a very successful story, moving from the 2022 results of EUR 4.3 million to 15.6%, again an improvement in our capability to be efficient and announcement of productivity. If we look at it, I would suggest to move directly into page 18. There is clearly a summary of the main important points of our balance sheet. As we already commented, our net financial position, which has been already disclosed in our previous board with the previous communication, is moving at EUR 93 million, and EUR 19 million is the real net bank net debt from banks, which is slightly higher compared to previous year, which was set at EUR 75 million.
As you can see, this is mainly coming from the fact that in 2023, we have been able to realign our supply chain normal trend in terms of purchasing and delivery of the collections, Spring/S ummer and Fall/W inter. So we have been able to realign the normal trend of payment. This has resulted in an increase of payment in 2023, in which we have to clearly regain the confidence paying the 2023 collection at the same time closing our payments on the last semester of 2022. This has clearly impacted our working capital, which moved from 77.1%, 10.5% of the net sales, to 116.7%, which is much better, stable, and much sustainable working capital compared to the previous year.
It's setting probably Geox to be quite in line with the benchmark and with the best performing in terms of percentage of working capital against sales. Quick snapshot on page 20 on our 2024 target. We do believe that 2024 will be a year of steady stabilization for Geox. We will be focused on maintaining our market position, setting the. We're having an expectation of sales pretty flat compared to the year 2023. At the same time, we will focus our attention and start driving internal efficiency and improving further our gross margin, mainly focusing on our supply chain. We are expecting to have an improvement of 50 basis points. We will continue as it did in the past with a strong focus on our cost structure, seeking for further opportunity, and trying to deliver a good bottom line.
But we do not expect significant change compared to the year 2023. I think that from my point of view, we have completed our presentation. We give you the flavor of 2024 and a good analysis on sales and the cost structure for 2023. We welcome your Q&A session.
Excuse me. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove your question, please press star and two. Please pick up the receiver when asking questions. The first question comes from Andrea Bonfa of Banca Akros.
Hi. Good evening to everybody, and thank you for taking my question. Hi, Andrea.
I just read that I mean, Livio is not anymore the CEO of the company, and you'll just be on board for a couple of months more or less. But I would like to have your skin sensation. What are the first actions that you want to, let's say, take in order to improve the profitability of Geox in a context where top line will not likely help you in 2024? Just a strategic idea or a kind of initial direction if it's possible. Thank you very much.
Okay. Thank you, Andrea, for your question. So first of all, you are driving your attention to one of the key points of the matter of today's board of direction, which is clearly being the fact that Livio, our historical CEO, has agreed with the company to quit the role.
At the same time, we are onboarding, as you can see, a new managing director, which is going to be in place since today. I think that the first activity that we will be focused on will be the preparation of a new business plan. The new business plan will address the period of 2024-2026, plus probably an outlook of 2027 and 2028. And we do believe that this kind of plan will be focused on the internal efficiency. This is giving me the chance to start answering to your second question, which is how do we think to with the flat sales to drive we do believe that we have some chance to improve our profitability in the supply chain together with our logistic structure. Clearly, this will be an area that we think to take all from the very beginning.
I'm not expecting to completely deliver performance in 2024, but we do expect to set a trend which is going to deliver results in 2025, 2026, and 2027. Clearly, it's a very complex area, the logistics and supply chain. I think that we have a significant portion of our cost allocated to the area, and improvement of the supply chain is one of the key pillar of the activity that we will focus on 2024, and we will be able to drive efficiency. As well, this will go in parallel with the simplification of our structure, internal structure. We will review our processes. We will focus on the brand proposition. We do think to continue investing strongly in our brand. So we are not thinking to cut our investment on brand and marketing because we believe that it's strategic for the growth and for 2024 results.
But we do believe that we have opportunity in our internal processes, mainly related to the production and merchandising proposition.
Thank you very much.
The next question comes from Oriana Cardani of Intesa Sanpaolo.
Yes. Good evening. Thank you for taking my questions. I've got three questions, if I may. The first one is on the order intake for the winter 2024 collection. So can you provide some color on the trend that you see? My second question is about logistic cost. Some companies say that they expect logistic cost to increase in first quarter of this year. So are you seeing a similar pressure, and what trend do you factor in your guidance of gross margin? And finally, I have got a question regarding Penélope Cruz, which is part of your brand's repositioning strategy towards the premium segment.
I was wondering if in Q4 of last year, there was an increase in the weight of women's collection on total sales and what level it reached. Thank you.
Thank you for your question. I will try to address the point in order. The first one, I think that you are referring to the backlog on our orders for winter collection. So far, we are going to close our sales campaign in the next couple of weeks, close to the end of March. And we are now thinking to have a forecast which is quite good because we are thinking to move in the range of the -5% compared to the previous year results.
I know that clearly, this is not representing a growth, but it's still representing a strong positioning, maintaining our position in a market condition that we have set at the very beginning of this call is not going to be easy in 2024. From the logistics point, the logistics cost, clearly, this is an area in which we are all experiencing in the industry significant issues. The main one is, as you know, is the issues that we have with Suez. As you know, we are thinking that this kind might represent in our supply chain cost an increase that is in the range of 30-40 basis points, which is an average of EUR 3 million, and it is mainly going to be potentially affected for winter inbound cost given the fact that the spring summer has been already delivered.
So this is for us an area still of opportunity. We are monitoring carefully the actual situation. But at the same time, we are already providing a contingency approach on the for winter proposition in our budget 2024. The fourth one, I think that is the on the third question, we are referring to our results on the investment on the gender, our gender mix. As you know, we have been focusing a lot with the Penélope Cruz investment as our ambassador, which is giving us a lot of very good and positive results. On the retail side, we are moving on the like-for-like. So when you look at our performance from 3% of 7% of the growth of the women collection improvement compared to the other gender.
And on the wholesale side, on the mix, the women's collection weight is improving from 41.6% of our previous year results sales to a better position, 33%. Clearly, this kind of improvement on the different weight on the wholesale is also to be read also connected to the fact that the wholesale business is still suffering, as we know, in the fall/winter and spring/summer collection.
I understand. Thank you very much.
The next question is from Francesco Di Lui from Intermonte.
Good evening. Thanks for taking my question. A couple of questions from my side that follow up on marketing costs for 2024.
Is it fair to assume a similar weight on sales and marketing costs also for 2024, or do you have just—I mean—streamlining a little bit the investment on this cost line for this year and preparing for the new three-year plan starting from 2025? And the second one is a more general one on the CapEx level envisaged in your plan. You say that you will be focusing on supply chain and logistics. I know that these two points were also key focuses of the previous plan. So I think some investments have already been made during the last years. Just some color if you think that you are going into a next round of investments on these matters, or it will be just a normal investment base compared to the past. Thank you.
Okay. Thank you for your question.
I start to pick on the first one, which is connected to the market expense. We are forecasting a market expense with a little bit of fine-tune on 2024, but we can say that consistently, we are going to be flat with the same kind of investment level that we have experienced in 2023. As we said in the previous one, we do believe that this kind of cost are strategical for our brand announcement and premiumization strategy of our brand. On the investment side, starting from the CapEx, as we said from the very beginning, we do believe that 2024 is going to be another year of stabilization. We need to go through 2023, which is already done, and 2024 as another year of preparation and stabilization compared to our initial plan.
So we do not expect to have a significant investment, if not on the CapEx investment related to the opening of few retail doors just in the key area. We are not going to do through a new campaign of retail repositioning, but simply, we are going to be tactically approaching the opportunity that we will offer in the key city and the key areas where we see a trend of consumer goods that are going to represent for us an opportunity of investment. So therefore, we do not expect to have a CapEx trend which is going to be dramatically not dramatic, which is going to be flat compared to 2023.
At the same time, we will take the chance to go through some of the restyling that we need in some of our stores, but again, with a very tactical approach, always measuring the balance between the close of shops for restyling, loss of sales compared to the opportunity of redirecting sales in a short period. So that's our position in terms of investment. As we know, we are driving, I said, a trend of driving another further improvement of our gross margin. That is one of the points that you are mentioning. And we do expect in the future plan to drive a further improvement on the gross margin side. Now, we are thinking to have a 2024 in the area of the 50%. I think that we are improving a lot our purchasing power.
We are reviewing our complexity in terms of SKUs and reference, and we are thinking to drive further profitability in the K&O area with this kind of action.
Thank you. Thank you very much. If I may, a quick follow-up on the perimeter you touched upon. Just can we consider already done just the action on the—I mean, on the bulk of the perimeter streamlining for the next year or so?
Yes. Yes. I think that the 2023 represented the year in which we made the last strong perimeter revision. We have cut about another 60 doors. We are still planning in our idea in 2024 a further reduction, which is going to be verified on a case-by-case. It's going to be very light because we consider to have finished the strong reduction.
And also, with the like-for-like performance that we are expecting from our retail door structure in 2024, we do believe to be able to, in any case, offset the perimeter effect for the first year, so to be overall positive within the retail channel.
Thank you very much.
Thank you.
Excuse me, sir. As a reminder, if you wish to register for a question, please press star and one on your touch-tone telephone. I think that's it. Any questions?
Just for if we don't have a further specific question on the financial, we would take a few minutes to reinforce and to better spend our comment on the appointment of our new CEO that happened today with the board of directors. As you know, Enrico Mistron has been appointed today. He's a board he's going to be the managing director and the CEO of the company.
Enrico is coming from Luxottica, where he has spent almost 25 years of his career. He consolidated a lot of supply and executive role within Luxottica, starting from the controllership and M&A activity more on the financial side and moving to executive role within supply chain, digitalization. These are experiences that have been evaluated by our board with key areas or key skills to be able to drive the second chapter or the new chapter of the GEOX, which is going to start from today and which is going to impact the period from 2024-2027. So we are really the board, we welcome Enrico in his new role, and we all wish him, let's say, the best for the new adventure that he's going to take in GEOX.