Good day, and thank you for standing by. Welcome to the Prada SPA H1 20 21 Results Presentation. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Alessandra Cozzani.
Please go ahead.
Thank you. Good afternoon, everybody, and thank you for joining Prada First Half twenty twenty one Financial Results Conference Call. Results Conference Call. I am Alessandra Cozzani, the Group CFO. And with me today, there are Mr.
Patrizio Bertelli, our CEO and Founder of the company and Mr. Lorenzo Bertelli, Marketing Director and Head of Corporate Social Responsibility. During the call, Mr. Bertelli will give us an overview on what happened in the semester, and then I will go through the numbers. Afterwards, Lorenzo Vertelli will update you on our marketing and communication projects as well as some ESG project that we had done during the semester.
Finally, Mr. Battelle will share with us some remarks before the end of the presentation. After the presentation, we all will be pleased to take your questions as usual. Now I would like to hand over to Mr. Bertelli.
Good afternoon, and welcome to the presentation of the results for the first half of twenty twenty one of the private group. Despite pandemics and the continuous restrictions globally, the results recorded in the first half have been satisfactory, and they show that the strategic decisions we adopted have started a positive cycle for our group. We worked to improve brand equity through different actions. The cancellation of markdowns, a selective policy in wholesale sales, All these actions have improved sales in our stores and margins. Today, the group controls directly about 90% of its revenues through direct and digital sales network.
We keep up our commitment in transforming the points of sale in a location where the relation with consumers stays at the core of an experience that reaches beyond buying products. Our SOAR staff have As far as sustainability is concerned, we are convinced that it will still guide the choices of consumers. For this reason, we integrated sustainability principles in our strategy and our daily actions confirm this journey that we will continue to adopt in line with our identity. Retail sales kept increasing in the last 6 months and they have achieved levels that are higher than 2019 with a major acceleration in the Q2. We have achieved these results without extending our distribution network, which means we are improving the productivity of individual stores.
America, Asia, Middle East and Russia have recorded very good results. In Europe, the trend improved after reopenings with excellent response from local customers. Japan instead has suffered more than other countries, the health emergency and the restricted policies adopted by the local government to preserve the Olympic Games. However, Japan is already showing good signs of recovery and hopefully after the Olympics, the market will reopen. Gross margin has reached the highest level since we went public in 2011, Thanks to a more favorable channel mix to the cancellation of markdowns and our strategy to requalify offer in the individual product categories to We kept managing operating expenses very carefully and to effectively plan production cycles, Considering and controlling inventory levels that are now lower than they were at December 31, 2020.
All this allowed us to achieve an EBIT which is better than in 2019, both in absolute terms as a percentage of revenues and to substantially improve our net financial position, which now stands at BRL102 1,000,000 as against the EUR 311,000,000 as of December 31, 2020. Let me now hand the floor to Alessandra Cozzani, who's going to illustrate
Thank you, Mr. Bertelli. As Mr. Bertelli just mentioned, we are very pleased to present these remarkable results achieved despite ongoing restriction and uncertain macro environment. In this presentation today, You are going to see every comparison versus 2020 and versus 2019 as we believe it's more meaningful to compare the underlying performance of this year versus 2019, it has the pre pandemic level.
In this slide, I would like to draw your attention on 3 very important financial metrics to better appreciate the strong progression we made in the period. Net revenues for the 1st 6 months of the year reached 1 point €5,000,000,000 with retail revenues that marked a huge growth compared to 2020, 60% and a very good plus 8% compared to 2019. EBIT reached EUR 166,000,000 or 11.1% on sales, above the pre pandemic 2011 when it was €150,000,000 at 9.6 percent on sales. Not to mention the comparison with last year when EBIT was negative at €196,000,000 Operating cash flow reached €316,000,000 an impressive number and also the highest value of the last 4 semesters. The net financial position improved significantly.
At the end of the period, it stood at 100 and €2,000,000 much lower than the beginning of the year. Net sales by channel. Now let's turn to look at our sales by channel. I have already mentioned the strong progress of the retail channel, plus 60% versus 2020 and +8% versus 2019. These results have been reached despite around 70% of the store network closed during the period and in absence of tourists.
I would like also to point out that we have seen a strong acceleration trend in the 2nd quarter, which registered triple digit organic growth versus 2020 and double digit organic growth versus 2019. Our direct e commerce business also showed an extremely strong performance in all regions during the period, growing sales by triple digit on a 2 year stack. Lorenzo will give you more insights on how we have achieved these impressive results. Wholesale was down 37% at constant currency compared with 2019. These results are consistent with our strategic decision to reduce the exposure to this channel with the aim to preserve the brand positioning.
Retail sales trends. This slide shows quarterly sales trends of the retail channel, which demonstrates what I have just mentioned before, very strong sequential improvement versus 2019 and the sharp acceleration in the Q2 of the period from single digit sales growth in Q1 to double digit growth in Q2 despite around 22% 13% of store closed in Q1 and Q2 respectively. These remarkable trends demonstrated the very strong momentum of our We are very pleased to say that this encouraging trend is continuing in July. Retail sales by geography. Looking at the retail sales by geography, we were seeing sequential strong improvement with sales performance In Europe, retail sales were still impacted on the one hand by lack of tourism and on the other hand by prolonged lockdowns with around 36% of the stores closed during the semesters.
However, we were seeing a robust Asia Pacific continued its strong momentum and marked a 65% improvement in sales versus first half of twenty twenty and plus 35% growth compared with the same period of 2019. Demand was very strong when comparing with the first Half of 2019, especially in China and Taiwan, we registered plus 77% and plus 74% sales growth, respectively, And Korea also showed triple digit growth trend. In Americas, trend was really buoyant And sales show a remarkable performance in the first half of the year with triple digit sales growth versus 20 and up 53% versus 2019. All countries recorded a strong progress. In Japan, retail sales remain impacted by prolonged lockdown imposed by local government ahead of Olympic Games.
Not to forget, WOMAN and Saipem that are still closed. Important to mention that in July, we have seen a very good recovery. Strong sales momentum also saw in the Middle East region, driven mainly by local consumption and some recovery sales from tourists. Retail sales by product. The strong improvement we achieved in the first half was also seen across all product categories.
Sales trend of leather goods was very good, thanks to new launches and the ongoing success of iconic products. Some of the new collection were very well received by the market and an ad hoc digital advertising campaign is spreading significantly Galleria handbag visibility. Ready to wear performance was very strong for both Prada and Miu Miu brands, registered strong double digit growth Compared with the same period of 2020 2019, sales performance for footwear was also very positive With successful reception of new lifestyle collection, which supported the sales trend in the first half of the year. With robust double digit growth in the 1st semester compared with 2020 2019 accelerating in Q2. This remarkable result that was driven by all product categories demonstrates the very strong momentum of the Prada brand.
Highly acclaimed spring, summer and fallwinter fashion show continue to grow visibility. Sales performance for Miu Miu was very encouraging, up 43% on 2020 with a double digit growth in ready to wear on a 2 year stock. Recent collaboration with Levi's was very successful and drove sales recovery during the period. Sales performance for churches was impacted by the geographical exposure with the vast majority of Stores located in Europe and thus more exposed to tourism and penalized by the various lockdowns. Gross margin reached a very high level at 74.3 percent in the first half of the year, improved by almost 400 basis points versus Same period of 2020 and 260 basis points versus the first half of twenty nineteen.
The strong improvement was mainly driven by a more favorable channel and geographical mix and the product offer announcements. Let's move to the operating costs. Total operating expenses were at 9 €49,000,000 up 14% at constant exchange rate versus the 1st semester of 2020 and broadly flat versus the same period of 2019. In the comparison with 2019, we have prioritized cost Meanwhile, we are still benefiting from cost optimization activities implemented last year. Capital expenditure was at €75,000,000 supporting know how and long term retail growth.
Even though the retail network did not change in terms of number of Our investments were mainly allocated to the network with 76 project dedicated to renovation and relocations. During the period, in light of our strong cash generation, we made a real estate investment and to secure the key location of our Prado store in Athens. Another improvement was net operating working capital that decreased compared to December 2020. Thanks to our efficient control of the supply chain and the strength of our logistic platform, We had effectively managed the level of our stock, which saw a decrease of about 6%. Net financial position.
The strong operating cash flow generation allowed us to fully finance capital expenditure, to pay dividend and improved significantly the net financial position compared to last year ended negative at €102,000,000 versus €311,000,000 in 2020. This is an excellent result in this adverse environment. Now I would like to hand over to Lorenzo Verpelli.
Thank you, Alessandra, and good afternoon to everyone. Our e commerce channel continued to deliver great results. We saw triple digit percentage sales grow in the first half of the year compared to the same period in 2020. And the channel has now been growing strongly for 5 quarters in a row. Sales on our own brand, Website and via market pay rose to 7% retail sales.
We have strengthened our online presence, including creating successful new partnership with some of the world's largest line retailers. Our focus has been on improving our client centric experience to provide an enhanced omni channel customer journey. By leveraging improving storytelling strategies, we're offering customers better engagement and more opportunities to relate to our brand values. This investment is combined customer target and experience improvement is delivering better conversion rates. We have experienced strong and growing levels of brand visibility across social and online throughout the period.
This confirms our strategy is Effective and the ever growing brand heat of Prada and Miu Miu continues to build. As you can see on the slide, our engagement rate on Instagram has strongly improved over the period. Prada gained 2 position in H1 2021 compared to H1 2020, while Miu Miu won and the line traffic grew tremendously during the period on both Prada and Miu websites. There was an excellent reception for our most recent Prada and Miu digital shows And they were great contributors to our increasing visibility, which has become stronger and stronger since we had to move our shows online. The latest Prada Men SS 22 show generated almost 3,000,000 views, up 53% compared to last year's shows, Thank you.
First, in reach and engagement rate of all the shows in both Milan and Paris men's fashion weeks. The Miu Miu shows also received an amazing reception on social platforms I will talk about our ESG project in more detail in the following slides, but I wanted to highlight how the respect The communities in which we operate is embedded in all our activities, even the smaller ones. For example, part of the last Prada Mans show was filmed in Sardinia And in appreciation of and thanks to the community, we decided to support the MedCi Foundation in its project to restore local marine ecosystems. Similarly, for the Niu for winter 2021 show in Cortina, we adopted a sustainable approach to building the show set and in collaborating with locals. Ensuring that the world's diversity is represented through our talent is key to us.
This is one of the main factors that has contributed to a further accelerating of growth in Prada's share of voice across the world online community. The Prada Cup was Another important element to the increasing brand heat seen during the period and it was the phase of the tournament, which generated the most ESG is an increasingly important focus for us and essential element that will support the generation of future growth. I look forward to unveiling a detailed sustainability roadmap this autumn, which will guide our initiatives and track our progress over the next years. Let me mention a few projects we worked on this semester. In May, we announced a substantial investment in educational and talent advancement programs to continue Last month, we launched the 2nd edition of our SeaBeyond project, The education program on marine preservation in partnership with UNESCO, which is supported by a percentage of the proceeds from the sales of Finally, upcycled by Miu Miu continues to be a success.
In April 2021, we unveiled a new collaboration with Levi's that gives new Live to Predelove, attending. Thank you. I will now hand over to Mr. Bertelli for the outlook section of the presentation.
We have closed a very positive first half and we're confident we will continue in the same way in the 2nd part of the year too. Hopefully, there are going to be no traumatic situations like the ones we had in 2020. Our industrial capabilities is Fundamental for continuous update of the products in individual markets. Control, direct control of the supply chain is still a very important competitive edge that allows us to preserve our know how and to guarantee quality in each individual phase in the production process. Sustainability principles We will become increasingly integrated in our growth strategy, and I see this opportunity to announce that we will disclose them to the market We tried with a major effort to keep up with our commitments, And we are confident in our growth perspective.
Hopefully, there are going to be no further pandemic crisis like the ones that we had in 2020. Thank you. We'll now receive your questions.
Thank you. Your first question comes from the line of Susie Gabaldi of UBS. Please ask your question.
Hi. Good afternoon, everyone. My first question would be on the very Some acceleration that you have seen at retail in the second quarter. Can you share any color in terms of Whether this acceleration has also continued in the month of July and what are your expectations on the top line for the retail channel. Secondly, I would be interested to know when it comes to the nationalities, If you can mention which nationalities are growing the fastest as of H1 2021.
And lastly, on EBIT. You had a very strong EBIT margin in the first half of the year. Can you discuss a little bit more in detail the various drivers of this margin? I would imagine that you are seeing already from operating leverage within your retail store network. So it will be very helpful if you can give any details on Store productivity or sales densities, that would be very helpful.
And also, if you can give us an indication of how you the second half of the year to be in terms of profitability. So maybe a broad ballpark View of the full year EBIT margin, what we could expect there would be very helpful. Thank you.
Thank you. Your next question comes from Thomas Chauvet of Citi. Please ask your question.
Good afternoon. I have two questions, please. The first one maybe for Alessandra on the gross margin. Can you reconfirm Your gross margin ambition by, I don't know, 23%, 24% of 78%, you're a little bit ahead in H1 versus Expectations, if we assume 75% gross margin as the 2021 base, what will be the 300 bps Gross margin improvement that come from I mean considering some tailwinds of this year will normalize whether that's channel mix, Full price sales or higher ASP, how do you go from 75 to 78 in the next 2, 3 years, what will be the main drivers? And secondly, on wholesale, 37% revenue decline in H1 versus 2 years ago.
How much of that in percentage of cash terms was due to the wholesale Closures, traditional wholesale disclosures and cleanup, what do you expect in H2? And could you give us An idea of how much of that $196,000,000 wholesale revenue is now made of traditional wholesale partners,
Thank you. Your next question comes from Thomas Shaveh of Citi. Please ask your question.
Okay. I was already on the in the queue. I don't know if
Hello, can you hear me?
Yes.
There was a problem because we would like to reply each person by each person. So it's exactly as usual. So we want to receive questions from 1 analyst, then we want to have the time to reply
and then to take
the other question from the other analysts. Thank you.
Thank you. Please continue.
Mrs. Susie Tibaldi, there has been a bit of confusion, and so we hope we will be able to answer All your questions because rather than having to answer each question, one At the time, we received further questions, so there has been an overlap. Let's try to go back to your questions, therefore. If I understood correctly, You asked us which are the countries, the geographies that mainly contributed to our performance. Those were the U.
S, China, Korea, Russia and local Customers, then you asked us for the EBIT per square meter. Usually, we are not used to Providing this number, but there's been a stronger improvement because we didn't open any new stores. So obviously, The performance level improved. We have to take into account that stores in Europe were closed 37 Sentizim and those are the biggest stores that we have. So the results would be unbalanced if I gave you the EBIT As for the end of year EBITDA, well, the trend we are seeing ever Since the beginning of July is a positive trend that continues after the first half.
And so if we won't Have to meet critical situations connected with the pandemic. We think we can continue along the same trend for the second half of the year. I guess I answered all your questions, but I'd like to know from you whether you actually received all the answers you wanted.
I hope my line is open and you can hear me. So I guess, yes, Just on the comment on geographies, I was actually interested also in the nationalities for the consumer clusters, so Japanese, Americans or Europeans, if you can, let's say, rank them in terms of Which ones are you seeing the strongest growth compared to 2019 would be very helpful? And then on the EBIT margin,
would you
be able to give an indication of where you expect Full year to end, so full year 'twenty one EBIT, roughly, very rough indication. Basically, if you think In Q in H2, you can still have this level of elevated margin or you expect to maybe spend a little bit more Marketing or adding initiatives, that means the margin may be a bit lower compared to H1. If you can just give us the way H1 versus
Now as far as EBIT It's concerned, I can tell you it's expected to stay stable or improve. Of course, we'll see as the season continues. As far as nationalities are concerned, the nationalities I told you are mainly people shopping locally. I mean, China, it was Chinese Shoppers in the U. S.
It was American shoppers, in Russia the same, Korea the same and even in the Gulf region it was the local customers Shopping there. So all markets are local right now. There are no, Let's say, interferences from tourism, people are not traveling. So all markets tend to serve local customers right now.
Okay. Thanks
a lot.
We can now reply to the question coming from
Good afternoon. This is Mr. Bertheli speaking. So if I got your questions right, so the first question was about gross margin. So what we expect gross margin to be in the second half, so our objective is that of complying with 70 5%, so 74.8% to 75% throughout the second half.
Then you were also asking about cash flow and the main drivers. So of course, there were many factors, many drivers involved. So I could number them out as follows. So the first Driver as we already disclosed in 2018 2019, we canceled markdowns. And so Full price sales improved our margins substantially.
Secondly, we wanted the Prada identity to Be more focused on luxury products, which means a higher average price. Then we reduced our sales to the wholesale channel. This is something else we had disclosed already, and we kept with that line of thinking. And the EUR 196,000,000 we sold Through wholesale, we're not done through any kind of digital platform, but I would say 99% was done through, Let's say classic sales, stores buying our products. So am I answering
Your next question comes from the line of Helena Mariana of Morgan Stanley. Please ask your question.
Hi, good afternoon. Thanks for taking my questions. Apologies, I need to go back to the current trading question because I did not fully understand your answer. So what I would like to understand is whether The 1st weeks of July, you have observed retail trends that are accelerating further versus the 12%, 13% sales versus 2019 that you have observed in Q2. I'm asking this because it was highlighted by some of your peers.
So I was curious to understand whether you have seen this further acceleration. Question number 2 is on your gross margin again. I was interested in understanding a little bit more How much of the improvement in your gross margin was due to the geographical mix? And how much that was due to the full price mix? I was Trying to make up some math to understand what's the different gross margin by geography and how much that might have contributed versus the channel mix?
And then my third question is about your profitability over the medium term. Clearly, you are on a very good track right now. You're already back to a low double digit EBIT margin. And I know you have been quoted in Based on your internal budget or view, when do you think that would be Possible is this a 5 year target, 10 year target? And how much revenue would you need in terms of scale to go back to that level of profitability.
Thank you.
Good afternoon. As for July, the month of July, yes, we have also noticed A further acceleration, more than 12%, 13%, and we will see what will happen at a later stage. As for the gross Margin, you asked whether how it is made up. Well, it's the same for all countries, I need to say, both in terms of product mix and geographic There are countries that contribute more than others because our policy was strongly based on brand identity. So products that are present in one country are As for your last question, the one that has to do with the possibility of reaching a plus 20% EBIT in terms profitability, well, this is a very delicate issue, of course.
And we might say that we can work and we are working to further develop our businesses in the next 3 years, but telling you exactly what our final target will be in 3 years' This time is something which I consider premature. Let's say that we're working really hard to try and reach higher revenues than
Just a small follow-up. So Basically, your point is that in terms of gross margin improvement, the vast majority of the improvement was due to the full price sales So the cut off discounting this quarter and much less by a geographical mix, I. E. Gross margin higher in a specific region versus another one? Thank you.
Yes, yes. I repeat once again. Yes, full price, obviously, because we already So we have already eliminated markdowns and we've cut as much as possible on Private sales were almost down to 0. As for the geographic mix, well, we try not to have Differentiated product mix amongst the different geographies because we Don't want to negatively or positively influence gross margin with specific geographies. Was I clear enough?
Yes. Thank you. Thanks very much.
Thank you. Your next question comes from the line of Thomas Chauvet of Citi. Please ask your question.
Yes, apologies for coming back. I'll try to ask the rest of my question. It seems the operator had some difficulties We're managing the queue. So if it doesn't work, it's fine. I'll take this offline with Alessandra and Alberto.
So my question, Alessandro and Mr. Batele, on the gross margin was back in February, you gave a very ambitious Gross margin target of 78% in the next 2, 3 years, pretty high. If we assume 75% for this year, What will be the drivers of that 300 bps improvement considering that some tailwinds of this year will normalize the channel mix, Full price sales, the higher ASP. So what is this incremental 300 bps? Where is it coming from?
And the second question I had, Sorry to repeat it again. On the wholesale side, you've reduced some traditional wholesale doors. You've closed some of them. Wholesale was down nearly 40% on a 2 year basis. What kind of outlook do you expect in H2?
Will the wholesale cleanup be over
So can I take your second question first about the wholesale business in 2021? Now of course, In the recovery of the Brada brand is now pushing the wholesale market towards Brada in general. We have budgeted a specific number and we want to comply with it. And so we don't think we'll see major changes as compared to our wholesale So when it comes to wholesale, we have to be very careful and not confuse sales through classic stores, physical Stores and platforms, e platforms. And I should say that actually Lorenzo Bertelio would be the right person to talk about digital wholesale.
Then, of course, yes, we said in February, we would like to achieve a gross margin of 78%. And actually, this year, we actually did The first increase from 71.6 percent to 74.6 percent, so increased by 3 percentage points Because we actually started working on that quite substantially, so we're not necessarily going to do that by the end of 2021. This is an For the next 3 years or so, so how should we do that? Well, we have already defined some strategies There are improvement of the relationship with the markets, with VICs, with everything that goes with The in-depth analysis of individual geographies and of products that better represent Prada's identity in the luxury market.
Thank you. Your next question comes from the line of Luca Solca of Bernstein. Please ask your question.
Yes, hello And thank you for taking my questions. We see that ready to wear seems to be your best foot forward, followed by leather goods. Do you anticipate that in the coming future handbags could play more important role In supporting your revenues. Connected to that is my second question about retail Productivity, in a way, we are back to square 1. We are back to a situation pre COVID when we look at the first half of 21, how satisfied are you with your sales per square foot?
And what is the ambition you have to improve that. Certainly, when we look at the smaller brands, if we look at Church And possibly also Miu Miu, they seem to be 1 or 2 steps Behind Prada, what are your plans on those brands? And do the smaller brands make sense in the portfolio at this stage? Thank you.
Let's Start with your first question, the one concerning the fact that ready to wear Increased strongly because and this is due to the fact that we think that ready to wear today is Fundamental for the development of our brand and of brands in
general, not
that we don't believe in leatherwear for this, Obviously, it would have been easier to grow with ready to wear given its invincidencia. So we grew by 5, 6 points incidentally. As for the retail position, I said this before, we're partially satisfied, but we have to take into account that very Stores were closed in the first half, 17% of stores were closed. And so it's a huge number in terms of square meters. We're partially satisfied as I was saying, because in different conditions, we would have further improved our retail sales.
As instead for your question having to do with Church's and Miu Miu brands, Well, I'd make a general remark. Miu Miu is actually going through a proper turnaround as we did for Prada. We are adapting the product identity to the different requirements coming from the market and we especially in the last 3 months have increased Because in these last three months, we've actually started with this turnaround activity. Miu Miu has a huge potential to And we strongly believe in New Year for 2022. As for churches, which
I mean, We have to
be aware of the fact that we've defended this brand also in terms of know how and industrial capabilities. We kept the factory in Northampton and we kept all workers working there. Certainly, what has happened given that this is a brand that used to sell 90% of Products in Europe, well, obviously, it suffered more than other brands because of its geography and because of the fact that UK stores were for a long period of time. So we really think that after this difficult situation, the pandemic will be able to go back to pre COVID revenues levels. As for the fact of having smaller brands in our portfolio, well, I don't think this is a fundamental factor to be examined, frankly speaking, because I mean, also the small brands require know how, which is often very, very useful to be then translated into other and more significant brands.
So they are incorporated also And their know how is incorporated in bigger brands?
I have a little follow-up, if I may, On retail sales, I fully appreciate that not all of the stores were open and retail sales in total Could have been higher had the stores been open and they will be open down the road, we all hope, as COVID-nineteen It's managed. But what about sales per square foot or sales per square meter And productivity, how do you anticipate that irrespective of the stores being open, You have the right tools in place to drive sales per square meter higher.
Yes.
It's a very simple Answer, to improve sales, you have to improve your products and you have to improve product positioning, More specificities, what you need in the last 3 months, even less than that. In the last 2 months, we've introduced Jewelry, more into our stores, but we're right at the beginning. So jewelry's positioning is something we will assess at the end of the year and 2022 and then we're also changing the presentation of products, the display of products within stores in a more active manner. And then another activity we've started with great success is related to pop ups. Everybody believes a pop up is something You do outside your stores.
Instead, we started doing pop ups in our large stores, started displaying Our products as pop ups and this has been extremely successful. We've Did it in Nooyama and in other important stores? And this is another important aspect that makes us Believe that the retail sales per square meter will increase. Obviously, the market requires Continued attractions and unfortunately we went through a period of time which was too This is Rune Why. We've made radical changes and we will certainly see the results very soon.
Thank you.
Thank you so much. Thank you very much.
Thank you. That does conclude this conference for today. Thank you all for participating. You may all disconnect.
Okay, the last question. Thanks.
Thank you. Your next question then comes from the line of Paolo Karbony of Equita SIM. Please ask your question.
Yes. Hi. Good afternoon, everybody. Can you hear me?
Hello? Yes, we can hear you.
Okay. Hi, Alessandra. So my first question was about a sentence from you. You were referring to the fact that you are still benefiting from some cost optimization Profitability in H1 and whether this is going to last across H2 or should we think about those actions as also partly temporary in nature. The second question is about Miu Miu.
You appear I'll be very confident on the prospects of the blend. I was wondering what are your plan here for the future, your expectation in terms of Contribution of Miu Miu going forward, your ideal size of the brand and the profitability, which could ideally Miu Miu reach in the next 3, 4 years with your growing focus. And second, I come back on another question, which was prior than me. And I didn't catch your answer. Honestly, if you can come back, you were asked what the Okay.
Ideally, the size that you would need in terms of revenues to come back to a 20%, 25% EBIT margin in the future? Thank you very much.
Thanks, Paola. I will take And then the new question will be taken by In terms of cost optimization, if you look at the slide where we have Presented the general expenses bridge, you will find easily the amount of the action. What we have done In 2020, has been a set of saving initiatives. So most of these initiatives can continue to benefit also this year and probably the year after because We have already taken some decision. Talking about the Possible they mentioned that we need to reach 2020, 2025 EBIT margin.
It's Not an easy question. For sure, we need to reach at least 4,000,000,000
As far as Niu Miu is
concerned, Ms. Caiboni, this is Patrizio Bertelli speaking. So let May I remind you that on the various markets, in particular China and Korea, we are extremely successful with our new actions and Numio is particularly successful in Markets. So we are working to extend the same positive experience we're gathering there to other markets as well. And of course, Right now, the most complicated market is the European market for all Well known reasons.
So for the second half of the year, well, by the way Miu Miu has reached breakeven point in the first half already. So we are in territory already as we speak, and then we see exactly what kind of results we'll obtain with Niu Miu in the next 2 years. But definitely, Enjoy its substantial position also on the profitability level. Thank you.
Thank you for joining us. Apologize for the confusion that we had at the beginning of the call. And we are looking forward to see you hopefully in person during the autumn for our Capital Market Day. Thank you.
Thank you. That does conclude this conference for today. Thank you for participating. You may now disconnect.