Good evening, and thank you for joining us this evening as we discuss our results for the first half of 2025 that ended on June 30th. 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 our replay of this recording shortly, also on our website.
Good evening, everyone. We're pleased to report a strong first half of 2025, where we have continued to deliver on our commitments and outperformed the premium beauty market. In July, we discussed our sales performance. We delivered net revenues of €2.3 billion. This represents a +7.6% like-for-like and +5.9% reported growth, in line with our 6% to 8% like-for-like growth outlook for 2025. We achieved this while delivering a strong gross margin position of 75.8% for the first half of 2025, which reflects the desirability of our premium brands and our strong ability to execute at scale. Our adjusted EBITDA of €445 million implied a margin of 19.4%, which is a 0.5 percentage point improvement versus the comparable period in the prior year, and puts us on track to deliver on our outlook for fiscal year 2025, in line with the margin improvement in 2024.
Our adjusted net profit was €247 million, or 10.8% of sales, implying an increase of 3.9% versus 2024, and reported net profit was €275 million, or 12% of sales, growing +78.8% over 2024. In 2024, reported net profit was impacted by one-off costs incurred at the time of the IPO. Further, we continued to improve our free cash flow generation and had leverage of 1.4 times net debt adjusted EBITDA, comfortably below our stated threshold. Joan will discuss our financial performance in further detail later in the presentation. To quickly recap our sales performance, which we discussed in detail previously, the €2.3 billion of net revenues were a result of +7.6% like-for-like growth, with a negative 1.7% impact from foreign exchange.
This was a result of a few factors: a healthy performance in our fragrance and fashion segment, an encouraging improvement in our makeup segment in Q2, and robust delivery from our skin care segment throughout the first half of 2025. We saw growth across all of our regions, with a noteworthy double-digit like-for-like growth in the Americas and Asia-Pacific. This performance is consistent with the like-for-like growth in Q1 and Q2 of 7.5% and 7.7%, respectively. We have already discussed our net revenue performance per segment, but I would like to make a few incremental comments on each of these business segments. The fragrance and fashion segment delivered another solid performance, with €1.7 billion in revenues up +8.6% like-for-like for the first half of 2025, in spite of some moderation in underlying growth, which was particularly evident in Q2.
Three of our brands, Rabanne, Carolina Herrera, and Jean Paul Gaultier, continued holding rankings within the top-10 fragrance brands globally. This underscores our ability to achieve and maintain leadership positions, while also highlighting the continued opportunity for further advancement. Niche grew double-digit, led by Byredo. In H1 2025, we achieved a value market share of 10.9% in fragrances, reflecting our ability to execute in an increasingly competitive and promotional market. We continued to maintain strong market shares across regions, with global travel retail showing standout share gain. Latam, where we continue to defend a very strong No. 1 market share position, continued to show tough competition from promotional activity. In the first half of 2025, the makeup segment recorded net revenue of €339 million, with growth of 2% like-for-like and 1.4% reported. We saw an encouraging improvement in momentum in the second quarter.
Our largest contributor to makeup, Charlotte Tilbury, maintained its No. 1 ranking in the UK and No. 3 ranking among makeup brands in the U.S. The brand continues to drive innovation in the category, with the Super Nudes collection and the expansion of the Unreal franchise being key highlights. The skincare segment delivered revenue of €276 million in H1 2025, representing +8.6% like-for-like and +8.1% reported year on year. In particular, dermacosmetics continued to perform strongly, with Uriage delivering double-digit organic growth, supported by successful launches and hero franchise accelerations. This was complemented by a strong contribution from Charlotte Tilbury Skincare, which drives the premium component of this segment. To quickly recap the performance of our geographical segments, which we discussed in detail a few weeks ago, we saw growth across all of our regions. In particular, we delivered strong like-for-like growth in the Americas and Asia-Pacific.
While our EMEA performance was more moderate, we saw particular improvement in skincare and makeup in this region. We continue to make progress toward our ambition of being at the forefront of ESG practices in our industry, with further improvements to our scores. To call out a couple of examples, we maintain our position on CDP's A-list for climate change. We were awarded an improved score of 19.8 by Sustainalytics, promoting us to low risk, which is No. 10 in the household product industry, out of 101, and also improved our EcoVadis score to 80 out of 100, an improvement from 70 last year, retaining gold medal status and putting us in the 98th percentile. With this, I will hand it over to Joan, who will walk you through the details of the financial performance.
Thank you, Marc. We'd now like to spend more time on Puig's financial performance during the first six months of the fiscal year 2025. We are very proud of the financial performance of Puig during the first half of 2025. We showed strong growth ahead of the market and in line with our outlook for 2025. We improved our EBITDA generation while continuing to maintain a healthy investment level behind our brands. We continued to improve our cash flow management. Finally, our capital structure remains robust, with net debt comfortably below our threshold, providing significant flexibility for future commitments. Now, let's get into the details.
I would like to start by providing you with a summary of our income statements for the first half of 2025, where I would like to highlight our net revenues like-for-like growth of 7.6%, our gross margin of 75.8%, maintaining its position as one of the highest in the industry. The positive contributions from the premiumization of the portfolio, as our niche brands scale, were offset by negative impact due to foreign exchange. We delivered an adjusted EBITDA of €445 million, which at 19.4% is also an improvement of 0.5 percentage points compared to the prior year, and puts us on track to deliver on our outlook for full year 2025, where we expect 20 basis points of improvement for the year. Finally, our adjusted net profit was €247 million. This represents a modest increase of 3.9% compared to the prior year.
While operating profit margin was aligned with first half 2024, adjusted net profit was negatively impacted by foreign exchange differences in the financial results and a lower income from associates, resulting in a margin decrease of 0.2 percentage points to 10.8%. Our key indicator for operational profitability, the adjusted EBITDA margin, has increased to 19.4%. Let's review the drivers of this increase. First, we continue to maintain a strong gross margin at 75.8%. Our distribution costs improved by 20 basis points. We continued to leverage our SG&A expenses, improving 1.3 percentage points over the first half of 2024. As we have continued to invest in CapEx over the recent years, and our own stores count has increased, our depreciation and amortization, as a percentage of sales, increased 0.4 percentage points. These effects were partially offset by our continued AMP investment, which increased by 1.4 percentage points.
In first half 2025, we invest in AMP to support sustainable long-term growth. As you know, we launched Million Gold by Rabanne in second half 2024, but only launched in the U.S. in first half 2025. This market tends to be an AMP-intense region, which drove this as well. While we saw an increase of 140 basis points in the first half of 2025, we do not expect the same level of increase in AMP as a % of sales for the full year 2025. Moving to operating profit, we demonstrate growth across all our segments in first half 2025. Our total operating profit reached €332 million, an increase from €330 million in the prior year, with an overall operating profit margin of 14.5%, which remains stable versus last year. Analyzing the profitability of our business segments, we have seen varied contributions and dynamics.
Our core fragrance and fashion business show an increase in operating profit to €299 million in first half 2025, compared to €294 million in the prior year. This reflects the growth of the segment at the scale. The operating profit margin showed a small decline to 17.8% from 18.6% in first half 2024. This slight decrease in margin is a result of continued strategic AMP investment to support brand equity in key strategic regions, like the U.S., as we just mentioned a few moments ago, demonstrating our commitment to long-term brand building. The makeup segment showed an improvement in operating profit, rising to €12 million in first half 2025, compared to break-even in first half 2024. This resulted in an operating profit margin of 3.6%. This improvement reflects enhanced profitability across our makeup initiative, including the smaller exercise.
Our skincare segment also delivered a strong performance, with operating profit increasing to €21 million from €18 million in first half 2024. The operating profit margin improved by approximately 40 basis points to 7.6%. This improvement was driven by the continued scaling of our larger skincare offerings, Uriage and Charlotte Tilbury. We continue to believe that as we gain scale in the makeup and skincare segments, their profitability will have the potential to converge with the group level. Focusing on the bottom line, we delivered a solid performance in our reported net profit for Puig in first half 2025, reaching €275 million.
While operating profit margins improved slightly above the first half of last year, we saw the negative impact of a couple of items below the line, which were an increase in costs due to foreign exchange impacts and a decrease in the income from associates, which impacted adjusted net profit negatively. While last year we had a negative impact from one-off in our reported net profit due to the IPO, this year we have made an adjustment to our net profit to reflect our reduction in the provision for outstanding earnouts, reflecting the current environment. Moving on to cash flow, as we have previously outlined in our business, in order to serve the heavier demand during the holiday season in the second half of the year, the business required an increase in working capital during the first half.
During the first half of 2025, our free cash flow from operations improved markedly to -€116 million, compared to -€173 million in the first half of 2024. Although it remains negative, this represents an improvement in line with the seasonal working capital bill typically observed ahead of the second half. This improvement was primarily driven by better working capital management. Our CapEx remained in line with expectations as a percentage of net revenues. Operational cash flow improved to -€116 million compared to -€257 million in the first half of 2024, which was significantly impacted negatively by non-recurrent IPO-related cash flows. Our net financial leverage currently stands at 1.4 times net debt to adjusted EBITDA, which is comfortably below our 2 times medium-term threshold, allowing us to maintain both operating and financial flexibility. Net debt was €1,426 million, and this reflects the seasonality of our operating cash flow.
Payment of €202 million in dividends, with another €10 million in tax liabilities, which will be paid by the end of the year. With less material, we increased our stake by a further 12.5% in Kama Ayurveda in April 2025 for €13 million, bringing our ownership to 97.5%. There was a small impact from financial flows and leases. We finished first half 2025 with leverage levels 0.3 times lower than those on June 30, 2024, reflecting our strengthened capital structure and continued financial flexibility. Liabilities from business combinations stood at €907 million, a decrease from €1,088 million from last year. In the six-month period of 2025, this decrease was mainly due to changing the market multiples, to which the put-call options are linked, as well as to translation difference and updated business projections to reflect recent performance.
This also reflects the impact of our strategic decisions to increase our stake in Kama Ayurveda. Based on the combined effect of these three factors, the liabilities from business combinations were further reduced by €181 million over the last six months. I now pass it back to Marc for a few closing comments.
Thank you, Joan. We feel confident that based on the strength and desirability of our brands, we will be able to outperform the premium beauty market. For the full year 2025, we reaffirm our outlook. We continue to expect net revenue like-for-like growth to be in the 6% to 8% range, albeit expecting to land in the lower side of the range. For the second half of the year, we're seeing a further moderation of growth in fragrances, our largest business segment, where we expect outperformance in makeup and skincare. Coming to adjusted EBITDA with a head start in the first half of 2025, and while remaining cautious about the impact of foreign exchange and potential impacts from tariff implementation, we continue to aim for margin improvement in 2025 in line with 2024.
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, maintaining the threshold of two times net debt adjusted EBITDA. We maintain our intention for a 40% dividend payout ratio in line with our historical practices. The first dividend since our IPO was paid in June 2025 with respect to the full year 2024. Lastly, we continue to maintain a highly selective approach to M&A. True to our character as a home of creativity, we have some great initiatives for the second half of 2025. Of these innovations, we are most excited about the launch of Carolina Herrera La Bomba. We pre-launched this in very selective points of sale in June, with the official launch in EMEA and LATAM that will take place in September.
We will be making a worldwide presentation in Madrid on the occasion of the Carolina Herrera Fashion Show, which will be taking place there. As always, you will see the rollout of extensions with our prestige fragrance brands. We continue with our collection-based approach with launches in niche. The Cat from Penhaligon's, Havana Gold from Dries Van Noten, and Alto Astral from Byredo are a few examples. While Charlotte Tilbury is a very well-known brand, its distribution, even in some of its largest markets, remains well below some of its comparable makeup brands. In Q3, we expect to roll out Charlotte Tilbury on Amazon in the U.S., which is increasingly becoming a channel of importance for the makeup shopper in this region.
In fashion, we strengthened our portfolio with the appointment of Duran Lantink as permanent Creative Director of Jean Paul Gaultier, marking a shift in strategy after five years of revolving guest designers. His first ready-to-wear collection for Jean Paul Gaultier will be presented in early October 2025. In skin care, we have a steady pipeline of launches over the course of the year across our brands. We continue innovating on Uriage, H-Up Sève, Line, and Chemos. I also want to share an organizational update with you today. I have made the decision, together with the Puig board, to create the role of Deputy CEO. I am pleased to announce the appointment of José Manuel Alvesa to this position, in charge of all divisions and reporting directly to me. As Deputy CEO, he will drive the delivery of Puig's vision and strategy across the business.
He will also continue in his role as President of the Beauty and Fashion Division. I remain fully committed to my role as Chairman and CEO of Puig. I have worked closely with José Manuel since 2004, and I can attest that his passion, deep understanding of Puig's story, and exceptional talent as a brand builder and leader have been instrumental in our transformation to becoming the global premium beauty player we are today. He was instrumental in repositioning Rabanne, Carolina Herrera, and Jean Paul Gaultier, transforming them into three of the world's top-10 fragrance brands. I wish him every success in this expanded position. Before I close, I want to reiterate how proud we are of our results. They are a testament to our ability to be a true home of creativity and our commitment to deliver on our promises.
We are energized by all the great initiatives we have planned for the rest of the year.
Thanks, Marc. With that, we come to the end of our prepared remarks, and we will begin Q&A.
The next question comes from Patrick Fowland from Barclays. Please go ahead.
Hi, good evening, everyone, and thanks for taking my questions. Just Marc, touching on your new appointment of José to Deputy CEO, which is a new role. I guess, what is the reason behind this new role and appointment? I guess, how should we think of José's role over the medium term? Will he be joining results calls, or will he be not as public-facing? My second question is just on margin phasing. You said AMP won't increase at the same level for the full year as we saw in the first half. Should the second half AMP as a % of sales be broadly similar to levels we saw in the second half last year? Thank you.
Thank you, Patrick. Look, the reason for the nomination of the Deputy CEO is since I was appointed the CEO nearly 20 years ago, the company has grown more than six times. The complexity and the challenges we have made us, together with the board, decide to reinforce with the appointment of José Manuel Alvesa. At this point, you know that we are starting to work with him in this position. You know that's as much as I can share with you because that's what we have decided so far. Whether he will be joining the calls maybe later on early next year or at the end of this year, we probably will also ask him to join us so that he can answer some of the questions that will be posed for him. Regarding the second question, the margin call, basically, Joan wanted to answer that question.
Yeah, I think, Patrick, you are right. I think we're expecting the second half of the year similar AMP that we had last year. What we are saying is, overall, we are not expecting the increase we have had in the first half to stay at the same level for the full year.
Thank you, Patrick.
Thank you.
The next question comes from Mariano Sackman from Santander. Please go ahead.
Hi, Marc. Good afternoon, everyone. My first question is on fragrance demand. Could you please comment on the summer trends? Have you noticed any material change from what was seen in the first half? If you could expand on the comment on the moderation here, that would be helpful. My second question is on fragrance and fashion margin. The decline in year-on-year margin, to understand, is this almost exclusively due to the Rabanne Million Gold campaign, or is it increased investments in most of the fragrance brands? Thank you.
Thank you, Mariano. Regarding the fragrance demand, during the first half, our best estimation of the growth of the category as a whole, it was in the mid-single-digit number. Over the past couple of months, we're seeing moderation even from this growth. We expect the second half to be more in the low single digit. It's still maybe too early because in fragrance, the most important season is Christmas. We still don't have yet the feedback from retailers in terms of open to buy, nor do we have yet all the answers, let's say, from the consequences of some of the impacts of the tariffs, for instance. It's still a little too early.
Since we have seen a moderation over the last couple of months, we expect the second half to be in the lower single-digit % versus, let's say, mid-single digit in the first half for the category as a whole. I hope this responds to your question. For the second question, I'm going to pass to Joan.
Yes, Mariano. I think related to advertising and promotion, it is related to fragrances more overall. Rabanne Gold plays an important role indeed. With this, what we are saying is that AMP has been growing in the first half, but we don't expect the same level of increase in the second half of the year. It's more related to the seasonality of the launches. I hope I have answered your question.
Yes, perfect. Thank you.
That was our last question. Thank you all for your questions today. We look forward to speaking again when we present our sales update for Q3 of 2025 at the end of October. Thank you very much.