Good afternoon. Good morning. And thank you for joining ON's 2022 Q1 earnings Conference Call and Webcast. With me today on the call are Executive Co-Chairman and Co-Founder, Caspar Coppetti; CFO and Co-CEO, Martin Hoffmann; and Co-CEO, Marc Maurer. [Technical Difficulty] financial performance within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only. And such statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20-F filed with the Securities and Exchange Commission on March 18 for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please further note that this call will also contain certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin. While the company believes these non-IFRS financial measures will provide useful information for investors, the presentation of this information is not intended to be considered in isolation, or as a substitute for, the financial information presented in accordance with IFRS. Please refer to today's release for a reconciliation of non-IFRS financial measures to the most comparable measures prepared in accordance with IFRS. With that, I will turn the call over first to Caspar, followed by Martin, for the prepared remarks.

A warm welcome from my side as well. And thank you for joining our call today. We're happy to report that ON had an excellent start into the year, and that we were able to further build on the momentum from last year, with CHF 236 million of net sales, a growth of 68% versus Q1 2021. We have exceeded even our own high expectations. As anticipated, Q1 was still constrained by the supply shortages that have been affecting our industry, but our teams along the supply chain have done a phenomenal job navigating the challenges, helping us to reach yet another record quarter. Let's have a look at some of the key takeaways from this quarter. ON is winning market share at an accelerated pace, with a combination of very strong consumer demand for the ON brand and better-than-anticipated supply led to significant market share gains in our key markets. ON aims to be the number one brand on runners feet and the accelerated pace of market share gains mean that we are making good progress towards this goal. ON's new products are resonating with customers. In spring 2022, ON has launched a number of key new running styles that are already seeing significant traction with consumers, both online and with our retail partners. In March, we introduced the Cloudmonster, which is ON's most cushioned model to date. Sales on our ecommerce platform during launch week were the second largest in history, only behind the launch of the Roger Centre Court. In April, the first consumers were able to buy the long anticipated Cloudrunner, which at US$140 offers mid-level cushioning and support and reaches a very wide audience of runners. The Zero Jacket underlines our ambition to expand our apparel business. As the name suggests, it weighs close to…

Thank you, Caspar. As you mentioned, net sales for the first quarter of CHF 235.7 million and the strong net sales growth of 67.9% were well above our plan. But they represent so much more than just financial success or the continued strong demand that we see for the ON brand globally. They stand for an exceptional effort by our whole team, from operations to sales to happiness delivery to master the impact from the challenging supply chain and factory closures last year. They stand for our ability to airfreight the right product into the right warehouse and to efficiently manage the order book. And the numbers stand for the flexibility and understanding we have experienced from our retail partners and direct-to-consumer customers. All together makes us extremely grateful and proud. Even with these great numbers, our supply shortage had still limited our ability to fulfill demand. For some products, the gap between demand and supply even widened during the quarter as a result of the strong feedback from our fans. At the same time, we were able to provide more of our new products to our customers than anticipated. Q1 2022 has been the strongest quarter in the history of ON. In March, we generated our highest ever monthly net sales. And for the first time, we shipped more than 1 million pairs of shoes in a single month. Both of our channels, hotels and DTC, grew at the same strong growth rate of 68%. As discussed in our Q4 earnings call, we have permanently shifted the launch of our spring summer footwear collection from Q4 into Q1, which drives part of the wholesale growth and the catch up effect versus what had been a slightly lower wholesale growth in Q4 2021. Combining Q4 and Q1, our wholesale channel…

[Operator Instructions]. First question is from the line of Jonathan Komp from Baird.

I want to start by following up on the point you made about accelerating market share. And I'm curious what you think are the main drivers when you look at the business and some of the improvements in brand awareness, the product innovation, the internal execution or any other factors that you think are the biggest drivers of the market share trends you're seeing?

You know this space very well. I think it's a combination of factors. First of all, we're just gaining traction in the major geographies. So, in 2021, [Technical Difficulty] consumers have probably heard of ON for the very first time in their lives through the IPO or through a friend that has a pair of ON. So, they're either getting a second pair and are talking to their friends. So, this is a very grassroots-driven uptake of the brand. At the same time, there are now more options available from ON that compete with some of the best-selling styles from other brands. And so, this combination of having a relevant product and then having a brand that you're interested is extremely powerful. So, this market share gain comes mostly from penetrating our existing channels more and gaining market share there.

When you look for it at the initiatives that you have in the pipeline, what gets you most excited about the ability to keep driving the performance you're seeing? First of all, we have new products. We just launched the Monster, Runner and Vista, which we said before, and they're resonating super, super well. So, more consumers will discover those products. So, we're very excited about that. On top of that, we're launching the Cloudgo. This summer, we're relaunching the Cloudflyer. We have additions on the roster with the mid top, the additions on the Nova [indiscernible] coming there. So, very strong lineup from a product perspective. And I feel the topic of sustainability is just so important to us and it's important to our consumers, and we see that it resonates. So, we spoke about the Cloudneo, but we also spoke about how all of our products are increasing the recycled material share, and that resonates with consumers. And then, we have and we're adding channels. So, we're expanding doors, we're expanding doors in many geographies. And we spoke about how the performance [indiscernible] we were able to elevate that with our Lightning initiative. And consumers are discovering that more and more. So we really feel we have so many aspects coming together from product and brand and distribution perspective. And that's what really excites us for the next 6 to 12 months.

Just one last one for Martin. If I could follow up on the gross margin performance, it looks like you offset a fair amount of the freight pressure that you saw in the first quarter, maybe 200 basis points or more. I'm curious what drove some of the positive offsets to the freight? And then, when you think about the path back to the long-term target of 60% gross margin, how should we think about the timing to get there, especially given some of the comments Caspar made about pricing and using that as a strategic lever?

I think we spent exactly what we were planning to spend on airfreight. But we were much more efficient and this is really thanks to the team that has done this great job in converting the product that we flew directly into sales and really bringing the right products into the right warehouse at the right time. And this has led to a higher net sales number than what we had expected. And therefore, you see that, in the end, this relative impact from the airfreight is lower than what we had based on the lower revenue number. So, for second quarter, we will still fly, but it will be less absolute amount. And therefore, the impact will be lower. And then, we expect that, as of the third quarter, we will be able to come down to a normal airfreight share that we have also seen in the past. So, I think it's very important that really the impact that we have seen on gross margin is coming from airfreight. And if we take this out, we would have been at about 60%, and so in line with our long-term goal. And then, the price increases that Caspar mentioned, they will put us in the position then also to react in 2023 on potential increases that we may see on the supply chain, on sourcing, but also in our cost and also be able to direct on the salary side, which of course is super important. So, this is the situation on the gross margin.

Next question is from the line of Cristina Fernández from Telsey. Cristina Fernández: I wanted to follow up on the upside in the first quarter to sales and your comments about being able to deliver more products. So, is it fair to say that perhaps on the wholesale side or maybe on both channels, there was a little bit of a pull forward to the first quarter from the second quarter relative to your prior expectations?

There's very little timing effects in here. But the majority of the upside really comes from the ability to work with our retail partners in order to ship the product that we had in the warehouse and then also to really plan very efficiently what products are we flying. We've also seen, especially on the Cloud where we launched the new Cloud 5 that we were able to continue selling a lot of the Cloud 3. And we kept it at full price also on our website, which added to the Cloud 5 sales. And therefore, in total, we're able to convert more of the demand in actual sales. Cristina Fernández: As a follow-up, any change in consumer sentiment or anything you can point out by region, if you look at sort of demand in Europe versus the US based on the macro conditions to what you had seen on the last call.

We don't really observe that also when we're looking into the preorders for spring, summer 2023 that we're writing right now. I think we're also playing in a category that is very resilient. It's about movement. And that definitely helps us. And again, you're not in the incremental game of plus/minus a few percentages. We really feel that we can continue to gain a lot of market share. And we feel the brands that have strongest demand are in the best position over the next two to three years. And that's what we're observing. And I think, here, I also want to point out that, for example, in a market like Japan, where we had a little bit slower growth rates over the last two years, we're seeing that with the store opening that we had with additional investments in the brand. Now posting 148% growth, I think shows that this consumer sentiment is global and it's not bound to one specific market.

Next question is from the line of Michael Benetti from Credit Suisse.

Congrats on a really nice quarter. And I know you don't focus on first quarter for a long time since Vietnam issues [indiscernible]. A couple from us. I guess, on the gross margin, I think you said you'd be at 60% right now, excluding the freight headwinds. And that was the long-term goal. Does that imply the underlying margins in the businesses are now at parity with where you saw them? It seems, longer term, there should still be some channel mix advantages, et cetera? Or do you think there's an opportunity to kind of relook at that long-term target as you guys work through the freight situation right now?

I feel that the 60% is still the right number to look at. I think we all need to learn how inflation will play into this. As mentioned, I think we take this very proactively by adjusting the prices. So, we'll be in the position to digest higher cost with all the negative margin impact, which I think is super important. Then I think we need to monitor the freight costs post shipping and ocean and air freight and see where this goes. If there's a slowdown in economy, the rates may become better. Otherwise, they may stay where they are. So, we feel there are many uncertainties. So, the 60% is something that we have proven that this is realistic in a non-challenged environment. But I wouldn't go higher at the moment.

If I could follow that, I guess, on the OpEx or SG&A plan for the year, maybe how that's changed since the last update. I think you said gross margin beat by about 800 basis points of air freight. And you said that the airfreight EBITDA margin would have been up about the same 800 basis points. So, it seems like you – I think in the prepared remarks, you said you reinvested some of the revenue upside in 1Q, but commented that the rest of the year maybe you would flow through more of the upside at a higher rate to EBITDA. If I got that right, can you speak to what you reinvested in in 1Q and why not continue to plow back any upside through the year given strong long-term growth opportunities that we're seeing quarter to quarter here?

I think what you see in the numbers is that we very cautiously managed our cost side in order to digest part of the additional airfreight in order to achieve a positive EBITDA, which was super important for us. But at the same time, continued investing into the business, so we didn't slow down on hiring. We were talking about travel, investing in IT, completing our ERP project, also strengthening our distribution network. If you look at the marketing line with 12%, this is certainly where we would see additional investments if we overachieve and then be able to achieve higher net sales than where we currently guide [Technical Difficulty] in strategic fields of the business via, as I said, especially on hiring the right talent, to maintain the growth and to secure the growth in the future has not slowed down and penalized by the airfreight.

Next question is from the line of Jim Duffy from Stifel.

Great quarter. Demand strength very evident in the numbers. Guys, the inventory is still super tight, however. Can you speak more about plans to scale capacity? Are there any notable bottlenecks to growth through the remainder of 2022? Are you seeing any impact of material or components supply resulting from the China lockdowns? And then also, could you speak about plans to scale capacity into 2023 to both ensure supply, but also manage risk?

Let's start with basically the material situation. So, what we've done over the last years is basically we are dual sourcing all major materials and we've localized it. So, we basically have one material supplier that is in China. And so, we're not expecting – and that's not a huge one. So, we're not seeing a negative impact from that and we're quite confident on that. On the capacity side, over the last years, we've invested a lot in building capacity with our key partners. I was just in Vietnam where we opened a new factory that has the capability to produce certain million pairs a year and it's going to go live next spring. So we're very confident about the capacity situation for apparel and footwear for the next years to come. As you know, we're working with some of the biggest partners, like Dean Shoes or Huali. And I think the results that you're seeing now in Q1 also is a testament to how much they believe in ON and how they're prioritizing ON because they feel we can build something very big in the long term. And then, to add to Martin's point, on the freight side, so what we're definitely seeing is that a lot of capacity has been built and is being built because demand was very, very strong. And now, with kind of some recession potentially looming in the US, we'll see how that impacts the whole industry. So, I'm not worried with ON. We feel that ON is a very, very strong brand and, again, we feel that we can gain a lot of market share and we're very confident that there is enough capacity available.

Next question is from the line of Jay Sole from UBS.

I want to ask about the 87% growth in North America. Obviously, tremendous growth. Can you maybe just talk to where you're seeing that growth come from? Is it new retail partners? Is it more doors with your existing partners, more shelf space with your existing retail partners, and maybe talk a little bit about how you're seeing the DTC business develop in North America?

Good news is coming from everywhere. So, let me give you a few examples. So, B2C grew very, very strong, grew over proportionally in the US. It was a very strong quarter. And I think what is especially important for us, it was successful quarter at very high efficiency, so we didn't need to spend a lot of money to get that volume, which speaks to the brand strength. So, we basically had higher roll-offs than we had last year on the B2C side. And then, when you look at retail, so, yes, we're increasing market share in existing channels. So, let me give you an example from Fleet Feet. We had 8% market share by the end of last year, and now we're standing at 13%. So, this is existing door growth, but we also added doors. We spoke about Footlocker, we spoke about JD, and in – basically, we're at 94 JD doors now, we are 68 Footlocker doors. So, that's additional doors that we're adding and the product is resonating with the consumers. The sell-through is very, very strong. So we really across the board, across all channels, very, very positive momentum.

Next question is from the line of Kimberly Greenberger from Morgan Stanley.

This is Alex Straton on for Kimberly Greenberger. Thanks so much for taking the question. I just want to touch on inventory quickly. How do you guys feel about the current levels and the composition? Do you anticipate normalization still sometime in the back half? And then, just finally, how are you prioritizing distribution against kind of some of the constraints that you still have?

A couple of things on the inventory side. I think we feel very confident with – it's a big question of, do you have the right products at the right place, right, which was a key ingredient for our Q1. So, we were able to actually foresee the product that is really, really resonating with the consumer. And we feel very confident about that. So, we feel we have the right product at the right place. We feel confident, especially on Europe now as well, that we will have more product available for Q2, we have good availability in the US for Q2. So, as Martin already pointed out, some additional airfreight will be needed, but on a very different level than in Q1. Then what's a little bit an unknown or where everyone still faces some difficulties is really – there's lots of port contraction still happening, there's a lot of inventory on sea that is not in the warehouses. So, it's a bit hard to exactly maneuver kind of the inventory to the minute, which makes it then hard to deliver the product exactly on time to the retailer. And that's also where sometimes you'll see you some shifts between months and potentially between quarters as containers are going in and out.

Kimberly, to your question of how do we prioritize whom we ship, of course, we have a very strong B2C business. They're excellent at forecasting because they see, of course, what is selling through, and so we try to make that available. And then, it's really by the quality of the account. And by that, we mean, which consumers do they serve? So you want the right product to show up in the right channel. And so, that's been a big focus. Also, we're seeing less of it. But there was definitely a time when retailers tried to hoard a little bit the inventory. And we were very strict about really aligning what they can sell with what we ship to them.

Next question is from the line of Grace Smalley from J.P. Morgan.

I think you referenced earlier that the category is sort of relatively more resilient in an inflationary environment. Are there any sort of specifics about ON consumer demographics and price points that you think might make ON relatively more resilient to some of the other brands in the category? Or how do you think about that?

In the 12 years of ON, we've seen a crisis or two in different markets. Generally speaking, the sporting goods category, and especially running that is not dependent on a lot of equipment and availability of gyms and so on, is usually gaining in those crisis, as you've probably seen from earlier crisis. Especially, we have to also – even ON is a premium brand within the category. We're maybe 10%, 15% over our competitors. So, we're not a luxury product. So, we feel that, even if consumer spending or disposable income would go down, we would still be in a good position because people would probably defer a car purchase or a vacation over deferring buying something like a running product. So, we're not overly concerned. But as Marc said earlier that we also see this as an opportunity because when people have to make more considerate choices, which brands do they want to buy? Typically, our history has shown that the ones that are most desirable will win most.

Grace, maybe adding one point. We were speaking now a lot about the Cloudrun and the Cloudgo. So, two products that we are now bringing to the market or have just launched that are at the lower end of our price points of US$140. So, they also give the more price sensitive customer a choice to buy an ON product and basically experience the technology of the brand. So, probably the right product at the right time there.

Next question is from the line of John Stansel from Berenberg Capital Markets.

I was hoping to get a bit of an update on wholesale door expansion in 2022 versus the last call. How are you seeing that track? I know you mentioned JD and Footlocker expanding? And then, a little bit broader than that, as you think kind of longer term, how do you see wholesale door expansion changing by geography?

We're trying to have a very consistent strategy over a long period of time. So, the answer is going to be very similar to three months ago. Again, I think we are opening doors, A, in consumer segments where we feel we can gain additional share. So, this is the Footlocker and JD discussion. I can give you some numbers where we approximately feel we want to be by the end of the year. So, in Footlocker, we're talking about roughly 130 doors globally. In JD, we talk about roughly 150 doors globally. I spoke about the 68 to 94 where we are right now. So, this gives you a bit of feeling for it. As such, we're opening with December and the first test doors. So, this is kind of – especially to JD and Footlocker, going into new consumer segments than within our more the run segment that we have been in in the past, it's definitely very much also a geographical gain. So, lots of countries like France, like UK, like Italy, we spoke about LatAm, we're on it. It's still at a very, very kind of – we're just getting started basically. And then, I think something we want to highlight here is, what we're seeing is that if we're able to bring apparel to life in the best possible way, which means we need to shop in shop and we need to work with partners that understand how to sell apparel, it's doing really, really well. And really, really well means, for us, it has roughly a 20% to 25% to 30% sometimes share in that store as part of the ON range. And that's definitely a focus for us. So when we look at door expansion, is how can we add doors that are really, really good at selling apparel. And just want to highlight there, we opened two beautiful shop in shops, one with Cardoway [ph] in Germany and one with Sport Chek. Basically, out of the gate, we achieved the 20% share. So, that's going to be a big focus to just get higher share in the existing stores with more of ON's product through an even better execution.

Next question is from the line of Tom Nikic from Wedbush Securities.

I just wanted to ask about the, I guess the shape of the revenue growth for the rest of the year? I think you're just up 68%. And the full-year guide would suggest you'd be I think high 30s for the rest of the year. Is there anything like constraining revenues in Q2 or like how do we kind of think about your Q2 growth versus the second half of the year?

If you look at Q1, at the 68%, especially in wholesale, and then I mentioned it on the call, if you combine Q4 and Q1 together, 54%. Because this is eliminating the impact that we have seen from shifting our start of the spring summer season from November basically to January. So, 68% in wholesale is not the like-for-like jump off base. Then in Q2, on top of what Marc mentioned is we expect that we are still seeing supply constraints on some products, much better positioned than in the first quarter. But it's still there. We have the situation in China that we were mentioning, and then we want to follow our philosophy of providing a prudent outlook. And we said, hey, our aspiration is higher than that. At the same time, also want to take into consideration the macroeconomic environment and the uncertainties there, then also to protect our profitability. And all of this together is put into the full year guidance that we have given.

There are no further questions at this time. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye