Good evening, and thank you for joining us this evening as we discuss our results for the full year that ended on December 31, 2024. Today, we have with us our Chairman and CEO, Marc Puig, and our CFO, Joan Albiol. Marc and Joan will share some brief remarks on the performance, financial results, and outlook. We will then open up the line for Q&A. You will find this presentation, the press release, and other supporting regulatory documents on our website. You will also be able to access a replay of this recording shortly, also on our website.
Good evening, everyone. We're pleased to report a strong 2024, where we continue to deliver on our commitments and have outperformed the premium beauty market. A few weeks ago, we discussed our sales performance, driven by exceptional growth in our fragrance and fashion business, which resulted in record net revenues of EUR 4.8 billion. This represents double-digit growth, 10.9% like-for-like and 11.3% reported growth, ahead of our high single-digit like-for-like growth, medium-term revenue guidance provided at IPO, and well ahead of the premium beauty market. We achieved this while delivering a strong gross margin position, which was 74.9% for 2024, 20 basis points improvement over 2023, and reflects well the desirability of our brands, the continued elevation of our portfolio, and our strong execution capabilities at scale. Our Adjusted EBITDA of EUR 969 million implied a margin of 20.2%, slightly ahead of our guidance of 20% for 2024.
Our margin was 20 basis points higher than 2023. Our adjusted net profit was EUR 551 million, or 11.5% of sales, implying 40 basis points of improvement versus 2023 and EUR 1.02 of adjusted earnings per share. Reported net profit was a record EUR 531 million, growing 41.1% over 2023. Further, we delivered exceptional free cash flow generation, resulting in a 65% conversion on adjusted EBITDA, much improved versus 2023, and we also significantly reduced our leverage to 1.1 times net debt versus adjusted EBITDA. Joan will discuss our financial performance further detail later in the presentation. To quickly recap our sales performance, which we discussed in detail a few weeks ago, the EUR 4.8 billion net revenues were a result of 10.9% like-for-like growth, 1.2% growth from the acquisition of Dr. Barbara Sturm, and a negative 0.8% impact from foreign exchange.
The key driver was the exceptional performance of our largest segment, fragrance and fashion in both EMEA and the Americas. With double-digit growth in this segment, we continued gaining market share in our core business. Our like-for-like growth benefited from a positive impact of 1.1% due to the hyperinflation adjustment of the Argentine peso. In 2023, we had a negative impact, whereas in 2024, we had a positive impact, which has therefore resulted in a favorable comparison. Looking back at the evolution of growth over the quarters, we saw in 2024 that our performance accelerated in the second half of the year. This was because our pipeline of innovation was skewed towards the second half. We saw strong interest from retailers in our brands, which was reflected in our net revenues during this period, and we were also lapping easier comps versus 2023.
We have already discussed our segmental net revenue performance a few weeks ago, but I would like to make a few incremental comments on each of these business segments. The fragrance and fashion segment continued its strong momentum, with EUR 3.5 billion in net revenues, up plus 13.6% for the full year 2024, driven by EMEA and the Americas. According to our estimates, this year, we had three brands among the top 10 globally, with Jean Paul Gaultier joining Rabanne and Carolina Herrera for the first time. This means two things: it shows our ability to achieve and maintain positions in top rankings, while also making it clear that there is opportunity to advance further in the rankings. As a result, in 2024, we have strengthened our market share globally, having achieved a record 11.5% value market share in selective fragrances, according to our estimates, improving versus 2023 market share.
We gained market share in all of our geographies except Latin America, where we continue to defend a very strong number one market share position, while not compromising with promotional activity, which we have seen accelerated in this region from our competitors. Among the 2024 highlights, we want to showcase the performance of some of our best-performing fragrance lines. What we refer to as fragrance lines are the franchises within our prestige lines. Based on the most recent sell-out information, we are delighted to inform you that our estimates confirm that Carolina Herrera Good Girl has become the number one feminine fragrance line worldwide for the first time, in addition to become the number one feminine fragrance line in the U.S. This is no easy feat, and we are incredibly proud of this accomplishment.
Puig's fastest-growing brand was Jean Paul Gaultier, and Le Male became the number three masculine fragrance line worldwide. Within our EUR 1 billion brand, the franchise 1 Million was the number four masculine fragrance line worldwide. With this, we had three franchises in the top five masculine and feminine franchises worldwide. For the full year 2024, the makeup segment represented 16% of Puig's net revenue in the period and recorded net revenue of EUR 763 million. This is a decrease of 1.3% on a reported and constant perimeter basis against 2023, reflecting some of the specific challenges we navigated this year in the segment. Our largest contributor to makeup, Charlotte Tilbury, posted a flat performance in the segment versus 2023.
In spite of softer net revenue growth, Charlotte Tilbury maintained its number one ranking in the U.K. and achieved a number three ranking among makeup brands for the full year in the U.S., having gained two positions versus 2023. The brand continues to drive innovation in the category. The segment was also impacted in 2024 by several factors, including a weaker performance across some of our smaller makeup offerings, a tougher comparison with a strong 2023 performance, and was further impacted by specific sell-out dynamics. We are in the early days of building the makeup proposition for core fragrance and fashion-led brands. We are learning that it takes a long period of investment to build these, even with large and established brands.
Puig operates by brand, and when we look at the P&L and the opportunities that the build-out of the makeup proposition brings to brands like Rabanne and Carolina Herrera, it makes strategic sense. But it is challenging from a reporting standpoint because these investments are then reflected in the makeup segment. Gaps in the sell-in and sell-out, along with the impact of dupes and the withdrawal of the Airbrush Flawless Setting Spray, slowed growth in this category this year. For the full year 2024, the skincare segment delivered EUR 560 million in net revenue, or 11% of Puig's net revenue. This represents an increase of 19.8% on a reported basis and plus 7.4% at constant perimeter against 2023. In particular, dermocosmetics continued to perform strongly, with Uriage delivering double-digit organic growth supported by successful launches and hero franchise accelerations.
Puig continued its expansion and diversification in the segment with the incorporation of Dr. Barbara Sturm in 2024, which adds an ultra-premium brand to Puig's portfolio. To quickly recap the performance of the geographical segments, which we discussed in detail a few weeks ago, we delivered strong growth in our core regions of EMEA and Americas, and while APAC performance was more moderate, we delivered growth in this region as well, and we began to see the benefits of the implementation of newer subsidiaries in the region. We continue to make progress toward our ambition of being at the forefront of ESG practices in our industry. During this year, our targets were verified by SBTi. We have aligned our strategy and commitments with the most recognized international standards, certifications, ratings, and initiatives.
To call out a couple of examples, we were recognized on CDP's A-list for climate change, and we were awarded a 20.9 score by Sustainalytics, which is number 10 in the household product industry out of 104. With this, I will hand it over to Joan, who will walk you through the details of the financial performance.
Thank you, Marc. We would like now to spend more time on Puig's financial performance during the fiscal year 2024. As Marc summarized a few minutes ago, we are very proud of the financial performance of Puig during this past year. We showed strong growth ahead of the market and slightly above the target we set forth in our medium-term guidance. We improved our EBITDA generation while continuing to have a healthy investment level behind our brands. Our cash conversion increased significantly, leaving our leverage position well below our guidance threshold. Finally, after the IPO and the updated agreements with our partners, our capital structure with respect to future commitments has improved significantly. Now, let's go into the details.
I would like to start providing you with a summary of our income statement, where I would like to highlight our net revenue increased to a record of EUR 4.8 billion, which represents a year-on-year growth of 11.3%, of which 10.9% was like-for-like growth. That, as mentioned, positions us well ahead of the beauty market. Our gross margin grew to 74.9%, one of the highest in the industry. We delivered adjusted EBITDA of EUR 969 million, which, at 20.2%, is also an improvement of 20 basis points ahead of last year and also above guidance for 2024. Finally, our adjusted net profit was EUR 551 million. Our growth in adjusted net profit for the period has been 15.5%, which is 4 percentage points faster than our top-line reported growth. Our key indicator for operational profitability, the adjusted EBITDA margin, has evolved positively to 20.2%. Let's review the drivers of this increase.
First, we continued improving our gross margin to 74.9%. Our gross margin would have been even higher if it wasn't for the performance of the makeup business segment, which, due to the events explained, generated higher inventory losses. Our distribution costs generated savings of 50 basis points, benefiting from the normalization versus early 2023 level. Due to our superior growth, we leveraged our SG&A expenses, now weighing 40 basis points less of our net revenues than last year. On the positive impacts, D&A, as a percentage of net revenue, also increased 50 basis points, following the increase of CapEx investment over the recent years to drive growth. This positive impact allowed us to increase our A&P investment by 1.3 percentage points. In 2024, we invested 32.4% in A&P, behind our brands in line with the levels deployed in recent years.
We believe that this investment allowed us to continue to fuel growth and maintain the viability of our brands to go ahead of the premium beauty market. Moving to operating profit, we demonstrate growth of 9.5% versus 2023. Our operating profit margin reduced slightly by 0.3 percentage points, which, as we just explained, is a result of an increase in A&P to support our brands. Analyzing the profitability of our business segments, the results of 2024 have differed by category. Our core fragrance and fashion business, which remains the largest and most profitable segment, increased its profitability by 0.3 percentage points to reach 19.2% operating profit margin. The business segment benefited from the strong positioning of our brands, which led to prestige fragrance rankings globally. We were able to deliver this improvement despite the increase in the A&P levels already mentioned.
Our makeup segment, which had a challenging year, saw a reduction in its profitability to reach a 5.8% margin. Several factors contributed toward this. The first factor was the growth of the segment, which was lower than expected. Performance this year was affected by the negative sell-out dynamics and the increased impact of dupes, slowing the growth and therefore limiting our ability to better leverage the structure and A&P. The second factor was that we maintained elevated A&P levels to support our smaller offering in this segment. We have been learning that the extension of brands across categories to build multi-axis brands will take longer than initially expected. Finally, as announced in December, the voluntary withdrawal of the Airbrush Flawless Setting Spray had a negative impact on Charlotte Tilbury, a brand that otherwise demonstrated healthy profitability levels.
Lastly, our skincare segment, at 7.2% operating profit margin, was impacted by the integration of Dr. Barbara Sturm, which had a dilutive impact. As anticipated, 2024 has been a year where we voluntarily reduced the distribution of the brand to ensure that it gets the right setup for future growth. Over time, as we gain scale in makeup and skincare, we believe that the profitability of these two businesses will have the potential to converge with the group level. Focusing on the bottom line, we delivered a double-digit growth in our reported net profit in Puig to reach EUR 531 million in 2024, mostly driven by the increase in operating profit, as we just discussed, but also impacted by other items. Let me go through the main ones.
In 2024, the financial result improved significantly due to the reassessment of the earnouts related to the acquisition of Charlotte Tilbury and Byredo that had been accounted conservatively. The second impact is the reduction in non-controlling interest following the increased stakes in Byredo and Charlotte Tilbury during this year. We had a lower than previously anticipated tax rate that impacted us positively. And to finalize, offsetting these positive impacts, as we mentioned during our first half results, this year we had an extraordinary impact generated by the IPO award, IPO cost, and M&A expenses, the most relevant of them being the extraordinary cash award granted to all Puig employees that amounted to EUR 94 million.
Adjusting for this extraordinary IPO and M&A expenses, and also for the positive financial impacts of the reassessment of the earnouts, resulted in an adjusted net profit of EUR 551 million, with a margin of 11.5%, 40 basis points better than last year. 2024 has been a very positive year in terms of cash flow generation. We have been able to advance on our targets of improvement in cash conversion, delivering significant results. Adjusted operating cash flow of EUR 825 million was an increase of EUR 263 million versus 2023, benefiting from the increase in profitability and significant improvement in working capital, driven largely by improved inventory levels and improved liabilities management. After adjusting for CapEx in line with our expectations at 4% of net revenue for the year, free cash flow from operations stands at EUR 634 million, with a conversion over adjusted EBITDA of 65%, achieving our objective earlier than announced.
Incorporating the cash impacts of extraordinary items, largely the IPO award and cost, operational cash flow was EUR 549 million. Before we discuss the evolution of our capital structure, we would like to recap the key events of 2024 that had a direct impact on it. In January 2024, we acquired a 65% stake in Dr. Barbara Sturm. On May 3rd, we listed on the Spanish Stock Exchange, raising primary proceeds of EUR 1.4 billion for Puig. At the same time, we accelerated the buyout of the remaining ownership of Byredo. Also, consequently, with the IPO, we acquired the minority stake held by the financial partner in Charlotte Tilbury. And after the execution of the planned partial put/call with Charlotte in July, our stake in Charlotte has increased from 55% at the end of 2023 to 78.5%.
Also, with Charlotte Tilbury, we extended our strategic agreement with her this past December until 2031, with a better distribution of the timing of the puts and calls over the next five years. Our net financial leverage improved significantly over 2024 and currently stands at 1.1 times net debt to adjusted EBITDA, which is comfortably below our two-times medium-term threshold, allowing us to maintain both operating and financial flexibility. Let's quickly recap the key impacts. First is the remarkable improvement of cash flow that contributed to a reduction of EUR 549 million of leverage. EUR 1.1 billion have been invested in M&A, which include the cash outflow related to the acquisition of Dr. Barbara Sturm and cash paid for the stakes of Byredo and Charlotte Tilbury, acquired over the course of the year. This was offset by the EUR 1.4 billion of primary proceeds.
During 2024, we paid EUR 186 million of dividends to shareholders corresponding to full-year 2023 performance. And finally, the EUR 222 million of outflows related to the financial interest and leases. As a result, we finished 2024 with a significantly strengthened capital structure. We would like also to reflect on the evolution of our future commitments and liabilities from business combinations and provide an analysis of how these have evolved through 2024, reducing significantly from EUR 2.4 billion at the end of 2023 to EUR 1.1 billion at the end of 2024. Let's quickly recap the events. Following the acquisition of Dr. Barbara Sturm, we recorded EUR 161 million liability on our balance sheet related to the 35% put/call option for the remaining stake that we don't already own. As mentioned, we increased our ownership in Byredo to 100% and Charlotte Tilbury to 78.5%, reducing our liabilities in EUR 1.25 billion.
Furthermore, every December, we reassess the value of the remaining liabilities in our balance sheet. These liabilities relate to Charlotte Tilbury, Byredo, Loto del Sur, and Kama Ayurveda. The reassessment is based on several factors: changing foreign exchange and discount rates, changing expectations of business performance of the brands where we have commitments, and any update of the condition of our agreements, and in this case, it's worth mentioning that we agreed with Charlotte Tilbury in December 2024 with respect to the remaining stake and was extended to 2031. Based on the combined effect of these three factors, the liabilities from business combinations further reduced by EUR 205 million in 2024. To wrap up our financial remarks, we would like to provide also a view on how the timing of expected cash outflow related to these liabilities from business combinations is scheduled.
As you can see in the calendar, out of the EUR 1.1 billion of liabilities, the largest cash outflow is expected to happen more than five years from now, in 2031 to be precise. This is a significant change with respect to last year, where the expected concentration of outflows was in 2026. Taking into consideration the current levels of financial leverage, the reduction in the amounts of liabilities, and the adjustment of the calendar, we would like to highlight the reinforced capital position of Puig, allowing for complete flexibility in the coming years. I now pass it back to Marc, who will comment on Puig's outlook. Thank you, Joan. Now let's talk about the future. We feel confident that given the strength and desirability of our brands, we will be able to outperform the premium beauty market.
With this, we maintain the medium-term guidance that we provided with IPO, high single-digit like-for-like revenue growth. Given that we have seen some moderation in the market momentum, particularly in makeup and skincare, we wanted to provide a more specific outlook for 2025. For this coming year, we expect net revenue like-for-like growth to be in the 6%-8% range. There are a couple of factors which could determine the upside for risks to grow for the year. One, the first factor is the momentum in fragrances. As we mentioned a few weeks ago, 2024 was another strong year for the fragrance market. Even though we saw some moderation of growth during the holiday season, these levels remain healthy and are consistent with our hypothesis at IPO. We remain very confident in the prospect of fragrances for 2025.
The second factor is the momentum for prestige makeup and the impact of dupes. We have seen mixed momentum in this category, some of which has been driven by the proliferation of dupes in the category. We are responding to this through innovation, education, and creativity, along with legal measures. Coming to Adjusted EBITDA, we continue to see upside potential for margin in the medium term, as always allowing for virtuous reinvestments into our brands. We will continue to prioritize growth over margin improvement, and therefore we will maintain healthy levels of A&P investment. We aim to drive margin improvement in 2025 in line with 2024. With the strength of our brands and our healthy gross margins, we're able to cope with tariffs to some extent. This outlook took into consideration a potential level of tariffs that was lower than what we heard overnight.
If this level of tariffs is finally implemented, we would need to reassess the potential impact to adjusted EBITDA margin for the year. We continue to monitor this situation. We made significant progress this year with respect to our capital structure, as Joan described a few minutes ago. We continue to manage our balance sheet conservatively, and while we are comfortably below the threshold that we established for ourselves, we will continue to make sure we have ample room for strategic flexibility with net debt versus adjusted EBITDA ratio not exceeding two times. We maintain our intention for a 40% dividend payout ratio in line with our historical practices. The first dividend since our IPO of EUR 212 million will be paid in June 2025 with respect to the full year 2024, subject to the approval at our annual general meeting.
Lastly, we continue to maintain a highly selective approach to M&A. Due to our character as a home of creativity, we have some great initiatives for 2025. While it would be impossible to discuss all of them, we can say that we are excited by the long pipeline of innovation ahead of us. In fragrances, we have a major and exciting prestige launch lined up for the second half of 2025. In niche, we continue to expand our collections-based offerings through newness that we plan to deliver throughout 2025. In makeup, and specifically in Charlotte Tilbury, we have a longer pipeline of innovation in 2025 than we did last year, with multiple new launches in the most relevant categories over the course of the year, also skewed towards the second half. In skincare, we have a steady pipeline of launches over the course of the year across our brands.
In closing, I want to reiterate how proud we are of our 2024 results. This is a testament of the strength of our brand portfolio and our teams that make Puig the home of creativity and deliver on our commitments. Overall, we are energized by all the great initiatives we have planned for 2025, and we look forward to another year of continued execution. Thanks, Marc. With that, we come to the end of our prepared remarks, and we will begin Q&A.
The next question comes from Mariano Schachmann from Santander. Please go ahead.
Yes, good evening, and thanks for taking my question. So my question is on the guidance. If you could provide more color on the growth guidance, how should we think in terms of price, volumes, and mix?
And also, if you could share some information of the pipeline of innovations, if it is more skewed towards the first half of the year or the second half of the year. Thank you.
Thank you, Mariano. In terms of guidance, we expect, in terms of pricing, as we have mentioned in the recent past, that most of the inflation-related price increases that we had seen in the prior year post-COVID effect had finished. So our intention for the future is basically inflation or one point above inflation. That's in terms of pricing. Regarding the pipeline, we have called Puig the home of creativity. We have a pipeline of innovation that we are very excited with. And regarding a little bit skewed towards the second half for 2025, that's our plan. I hope that answered your questions.
Great. Thank you.
And if I may, a quick follow-up on the A&P increase. How should we think going forward? Yeah, thank you.
If I understand well, you are asking regarding the A&P increase for what's going to happen next year. Basically, what we have said is that our intention is to prioritize growth versus margin improvement. And it's true that last year there was an increase when you compare 2024 versus 2023 on A&P. Sometimes it goes because there is more emphasis on launches or there are certain activities that, whether it's prestige versus whether it is niche, there might be not necessarily the same level of A&P for all the different business models. So that's why there's been sometimes volatility changes in the percentage. And our expectation is to be between the 31% and 32.5% levels that you have seen in the last few years.
That's great. Thank you very much.
The next question comes from Molly Wylenzek from Jefferies. Please go ahead.
Hi, good evening. I just have a question on the M&A outlook. It feels like, given the changes for liabilities for business combinations, that the integration mode that you talked about during the IPO for the next few years might be shifting a little bit. Do you agree with that?
Thank you, Molly. I'm not sure I got the whole question. You're talking about M&A, but can you clarify again the specific question?
Yes. Yeah. So thinking about the company, I think at the time of the IPO, you were talking about the next few years being more integration mode rather than going out and seeking new opportunities. Given the cash budget that you published this evening and the changes in the maturity account changing.
Okay.
It's true that the modifications, the changes you've seen in the balance sheet over the past year gives us more flexibility going forward, but we have always mentioned that we are going to be very careful because we have what we believe is a curated portfolio, and only when the circumstances happen to bring us the possibility of a brand that we think fits with our portfolio, that it has the right profile, then we'll be proactive in that sense. In the last, I think, remarks, we did mention that we wanted to make sure that the different companies that we have been partnering with in the last few years are well integrated and we run them efficiently. At the same time, we do look at things. On average, every year, we have like 100 possibilities of opportunities that come to our table.
And if the right opportunity comes, then we will be proactive. But at this point, we're more focused on continuing this progressive integration of the different brands that we have been partnered with lately. I hope that answers your question.
Excellent. Thank you.
The next question comes from Jeff Stent from BNP Paribas Exane. Please go ahead.
Good evening. You said that your guidance includes an assumption with respect to tariffs. Could you please tell us what your guidance would be if there were no tariffs and also if there were the proposed 25% tariffs? Thank you.
Yeah, we mentioned that in our guidance, we had contemplated a scenario where eventually we might have tariffs that were mentioned originally in this year that were below the 25%.
Because in that sense, tariffs do not affect us much as may affect other industries, given our gross margin and given the flexibility that we have had in the past to pass the small tariffs increases into the prices. Now, what we heard last night or yesterday about the 25%, that's a bigger impact that we have not contemplated in our guidance, and now we'll have to see whether these tariffs are implemented, whether it affects our product categories, if they happen, when are they implemented, and then we will be able to assess if there is an impact in our business.
The next question comes from Danping Liu from Citi. Please go ahead. Yes, thanks for the question and thanks for taking my question. I have a question on the phase of growth in 2025.
I appreciate you talked about the launch pipeline, and it seems to be H2's field again in 2025, which is similar to 2024. But considering last year we had an easy comp in H1, so how should we think about the growth trajectory this year? Is it more balanced between H1, H2? And if I can just squeeze in, which is also related to the phasing, how should the start of 2025 be in terms of selling and sell-out? Thank you.
Yes, thank you, Danping. In terms of selling and sell-out, we have minimized the gaps that we had seen last year, particularly in makeup. And so we are not expecting these gaps happening this year. In terms of growth, we can say that the first weeks we have up to now, the growth we've seen is consistent with our guidance for the year.
But in any case, some of the launches or innovation is skewed towards the second half. It's true that last year we saw something similar, and maybe this year will be in that same trend. Thank you, Danping.
The next question comes from José Rito from CaixaBank. Please go ahead.
Yes, hi, good afternoon. So in terms of top-line growth outlook, the 6%-8%, could you mention if the evolution should be more or less similar across the different divisions? So the products, just makeup and skincare. Also because last year, well, we know that makeup has lower than expected performance due to channel delivery. So going into 2025, how do you see this evolving the makeup division? Thank you.
Yeah, thank you, José.
When we mentioned the guidance and our outlook for the year, we did mention that there were a couple of factors that could affect either positively or negatively throughout the year. On the positive side, we felt that if the momentum in fragrances continues, then there is an opportunity for an upside in that category because we still see the category having a healthy behavior. On the contrary, particularly in makeup and our main brand in makeup, the impact of dupes is something that we are counter-assessing, as we mentioned, with innovation, creativity, education, and legal measures, legal protections of the IP. But we have to see whether this plan really helps us counterbalance the dupes in the way we think. So that's why we have some upside opportunities and also some risks that we have mentioned. Hope this answered the question, José .
The next question comes from Fernando Abril-Martorell from Alantra. Please go ahead.
Yeah, thank you.
Fernando, do you have a question for us?
The next question comes from Ankur Ragan.
Yes, sorry, I wasn't able to hear. Thank you. Yeah, only one question with regards to the..
question was cut at the beginning, and we cannot hear you.
Good evening. Good evening. I have a question about the fragrance industry. So you said the momentum continued to be good. Could you give us an idea of what? All right. I hope you can hear me. I wanted to understand on the fragrance industry, what kind of growth are you seeing or expecting for 2025? You were talking about moderation at the end of last year. How do you feel about your inventory in the trade as you start the year?
In terms of the launch that you are talking about in perfume, can you talk about, I mean, which brands are these going to be for? I think you were super successful with Jean Paul Gaultier in 2024. I just wanted to understand what innovation you have for that brand specifically. And then just maybe, can you clarify on the tariff? You mentioned 25%. Is that from Europe to the U.S. that you expect 25%? Thank you.
I'll try to answer the different questions. I'm going to start from the end, go to the beginning. I mentioned 25% because last night we heard the U.S. mentioning the possibility of applying tariffs of 25% for products coming from Europe to the U.S. Now, this was only a possibility, and there was no mention of which products, what timing, and etc., etc.
There was the mention of 25%, and that's why the question is arising. That's very recent news from yesterday. In terms of growth, I think you mentioned growth of Jean Paul Gaultier. Jean Paul Gaultier brand has been growing at very significant levels over the past few years. Two years ago was a brand that grew the most, as last year. So we believe that this is a brand that has momentum and may continue growing. So that's a brand with momentum, let's say. You mentioned whether I could specify what launches or from what brands. We have not presented those launches yet in the market, so I would prefer to maintain this information confidential if you don't mind.
And regarding the fragrance industry growth, at the time of our IPO, we did say that our projections for growth of the industry were going to be, for the next few years, was going to be between 6% and 7%. And at that time, we're also seeing that all of the three categories were going to have this growth because that was the projection that some statistical companies had presented to us. Now, the reality is that one year after, we have seen the fragrance market grow faster in 2024, but this growth has moderated or normalized towards this growth rate that we had anticipated during the IPO during the Christmas season. That's why we said the Christmas season was healthy, but had moderated its growth by the end of the year.
Going forward, we believe that the fragrance market will continue growing at this level that we had anticipated during the IPO. And I believe you have also the question regarding inventory at retailers. We think that we have not seen this stocking that we have heard others mention. So we feel we're comfortable in that regard. I hope that answers all your five questions.
The next question comes from Fernando Abril-Martorell from Alantra. Please go ahead.
Thank you.
Yes, hello, do you hear me?
Yes, we hear you, Fernando.
Okay. Sorry about that. Just a quick question with regards to the free cash flow generation in H2, particularly with regards to the working capital evolution, so big improvement in H2.
My question is, do you see room for further improvements during the inventory management or not going into 2025?
Thank you. Hello, Fernando. Yes, as we said during the IPO and in previous calls, we identified that our level of inventory was not optimal at the time of the IPO. So we have done a significant improvement of these levels during 2024. We have reduced EUR 78 million the inventory, but we still think we have some room to improve these levels. That answers your question.
Okay, thank you very much.
That was our last question. Thank you all for your questions today.
Yeah, thank you.
We look forward to speaking again when we present our sales update for Q1 2025 on April 28th. Thank you very much.