Ermenegildo Zegna Group Delivers Strong Performance in FY 2023 With Profit Doubling to €136 Million
- Revenue increased by 27.6% YoY in FY 2023, with organic growth of 19.3%.
- Gross profit margin improved to 64.3% in FY 2023 from 62.2% in FY 2022.
- Adjusted EBIT for Zegna and Thom Browne segments showed significant improvements compared to FY 2022.
- The Group's profit margin increased to 7.1% in FY 2023 from 4.4% in FY 2022.
- Capital expenditure rose to €77.9 million in FY 2023 with an incidence on revenues of 4.1%.
- Trade Working Capital increased to €448.9 million at December 31, 2023, with a 23.6% incidence on revenues.
- Net Financial Indebtedness was €10.8 million at December 31, 2023, compared to a Cash Surplus of €122.2 million at December 31, 2022.
- Positive Free Cash Flow of €71.8 million was generated in FY 2023.
- None.
Insights
The reported financial performance of Ermenegildo Zegna N.V. demonstrates a robust year-over-year growth, with revenues increasing by 27.6% and profit surging by 107.8%. The organic growth rate of 19.3% is particularly impressive, indicating that the company's expansion is not just due to acquisitions but also due to an increase in core business activities. This is a strong signal to investors of the company's market position and operational efficiency.
The gross profit margin improvement from 62.2% to 64.3% suggests effective cost management and a beneficial product mix. The proposed dividend increase of 20% reflects confidence in the company's cash flow and is likely to be well-received by shareholders. However, investors should be mindful of the capital expenditure which, despite a decrease as a percentage of revenues, signifies ongoing investments in expansion that could affect short-term cash flows.
Ermenegildo Zegna Group's performance indicates a strong demand for luxury goods, particularly in the absolute luxury menswear segment. The growth in the Zegna and Thom Browne segments, both organically and through the acquisition of Tom Ford Fashion, shows a well-received brand proposition. The emphasis on direct-to-consumer sales and reduced end-of-season sales indicates a shift towards more controlled and profitable distribution channels.
However, the increase in trade working capital as a percentage of revenues could suggest inventory management challenges or strategic stockpiling to mitigate supply chain risks. Investors should consider the balance between growth and the efficiency of capital use in assessing the company's long-term value creation potential.
The Group's fulfillment of its sustainability targets for FY 2023, including commitments to traceability, diversity, inclusion and renewable energy adoption, enhances its brand image and aligns with the growing consumer and investor interest in corporate responsibility. The integration of sustainability into the business model may provide a competitive edge and could lead to cost savings and risk mitigation in the long term.
However, the actual impact of these initiatives on financial performance should be monitored, as the costs associated with implementing sustainable practices can be significant. Investors should also look for transparency in reporting and the potential for these initiatives to open up new markets or improve operational efficiencies.
-
Revenues of
€1,904.5 million , up27.6% from FY 2022 (+19.3% organic growth1)
-
Gross profit of
€1,224.3 million with a gross profit margin of64.3% (62.2% in FY 2022)
-
Profit of
€135.7 million , up107.8% from FY 2022 with a profit margin of7.1% (4.4% in FY 2022)
-
Adjusted EBIT1 of
€220.2 million with an Adjusted EBIT Margin of11.6% (10.6% in FY 2022)
-
Proposed dividend per ordinary share of
€0.12 (+20% from FY 2022)
- Group’s sustainability targets for FY 2023 achieved
MILANMILAN--(BUSINESS WIRE)--
Ermenegildo Zegna N.V. (NYSE:ZGN) (the “Company” and, together with its consolidated subsidiaries, the “Ermenegildo Zegna Group” or “the Group”) today announced profit of
Adjusted EBIT rose to
Ermenegildo “Gildo” Zegna, the Group’s Chairman and CEO, said: “2023 has been a milestone year for our Group. We delivered outstanding results, including more than doubling our profit from 2022 to reach
2023 was also an important year for the Thom Browne and ZEGNA brands. Thom Browne celebrated its twentieth anniversary reaffirming the brand as a symbol of modern luxury tailoring. ZEGNA continued a well-defined journey to ensuring its place as one of the strongest brands in absolute luxury menswear. As a Group, we continued to invest in our Filiera, our in-house supply chain, which includes some of the finest and most important Italian high-end textile producers fully integrated with our unique luxury manufacturing capabilities. We recently announced the latest addition to the Filiera, a new state-of-the-art footwear and leather goods production facility in
Looking ahead, I see a clear and defined path forward for our Group. In the volatile world we live in, we must continue to be increasingly responsive, flexible and authentic to who we are. The Ermenegildo Zegna Group is a guardian of brands, and while short-term results are important, our top priority must always be their overall trajectory. What we should do is well defined; there will be challenges, but we know how to tackle them and how important it is to plan for the long term.”
1 Revenues an organic growth basis (Organic Growth), revenues on a constant currency basis (Constant Currency), Adjusted EBIT, Adjusted EBIT Margin, Trade Working Capital, Net Financial Indebtedness/(Cash Surplus) and Free Cash Flow are Non-IFRS Financial Measures. See the Non-IFRS Financial Measures section starting on page 14 of this press release for the definition and reconciliation of Non-IFRS Financial Measures.
Note on Group Financials Starting FY 2023
Starting from the year ended December 31, 2023, the Group presents its consolidated statement of profit and loss by function (previously presented by nature), which is the most representative of the way management views the business and is consistent with international practice. To conform to this new presentation format, the information for FY 2022 and 2021 has been reclassified compared to what was previously presented by the Group. The table below sets forth our consolidated statement of profit and loss for FY 2023, 2022 and 2021 (as reclassified for FY 2022 and 2021 to conform to the new presentation by function).
|
For the years ended December 31, |
||||||||||||||||
(€ thousands, except percentages) |
2023 |
|
|
Percentage of revenues |
|
2022 |
|
|
Percentage of revenues |
|
2021 |
|
|
Percentage of revenues |
|||
Revenues |
1,904,549 |
|
|
100.0 |
% |
|
1,492,840 |
|
|
100.0 |
% |
|
1,292,402 |
|
|
100.0 |
% |
Cost of sales |
(680,235 |
) |
|
(35.7 |
%) |
|
(564,832 |
) |
|
(37.8 |
%) |
|
(495,702 |
) |
|
(38.4 |
%) |
Gross profit |
1,224,314 |
|
|
64.3 |
% |
|
928,008 |
|
|
62.2 |
% |
|
796,700 |
|
|
61.6 |
% |
Selling, general and administrative |
(901,364 |
) |
|
(47.3 |
%) |
|
(695,084 |
) |
|
(46.6 |
%) |
|
(822,897 |
) |
|
(63.7 |
%) |
Marketing expenses |
(114,802 |
) |
|
(6.0 |
%) |
|
(85,147 |
) |
|
(5.7 |
%) |
|
(67,831 |
) |
|
(5.2 |
%) |
Operating profit/(loss) |
208,148 |
|
|
10.9 |
% |
|
147,777 |
|
|
9.9 |
% |
|
(94,028 |
) |
|
(7.3 |
%) |
Financial income |
37,282 |
|
|
2.0 |
% |
|
13,320 |
|
|
0.9 |
% |
|
45,889 |
|
|
3.6 |
% |
Financial expenses |
(68,121 |
) |
|
(3.6 |
%) |
|
(54,346 |
) |
|
(3.6 |
%) |
|
(43,823 |
) |
|
(3.4 |
%) |
Foreign exchange losses |
(5,262 |
) |
|
(0.3 |
%) |
|
(7,869 |
) |
|
(0.5 |
%) |
|
(7,791 |
) |
|
(0.6 |
%) |
Result from investments accounted for using the equity method |
(2,953 |
) |
|
(0.2 |
%) |
|
2,199 |
|
|
0.1 |
% |
|
2,794 |
|
|
0.2 |
% |
Profit/(Loss) before taxes |
169,094 |
|
|
8.9 |
% |
|
101,081 |
|
|
6.8 |
% |
|
(96,959 |
) |
|
(7.5 |
%) |
Income taxes |
(33,433 |
) |
|
(1.8 |
%) |
|
(35,802 |
) |
|
(2.4 |
%) |
|
(30,702 |
) |
|
(2.4 |
%) |
Profit/(Loss) |
135,661 |
|
|
7.1 |
% |
|
65,279 |
|
|
4.4 |
% |
|
(127,661 |
) |
|
(9.9 |
%) |
Fiscal Year 2023 Key Financial Highlights
Revenues
In FY 2023 the Group recorded revenues of
Full details of the Group’s revenues are included in the Annual Report on Form 20-F for the year ended December 31, 2023, which will be published today.
Gross Profit, Operating Profit and Profit
Gross profit in FY 2023 reached
Selling, general, and administrative expenses in FY 2023 were
Marketing expenses in FY2023 were
As a result of the above, the Group reported an operating profit of
Group’s profit in FY 2023 was
Adjusted EBIT and Adjusted EBIT Margin
The table below shows the reconciliation of Profit/(Loss) to Adjusted EBIT and the calculation of the Profit/(Loss) Margin and the Adjusted EBIT Margin in FY 2023, 2022 and 2021. Adjusted EBIT is the main performance metric used by the Group’s management at the consolidated and reporting segment level.
|
For the year ended December 31, |
|||||||
(€ thousands, except percentages) |
2023 |
|
|
2022 |
|
|
2021 |
|
Profit/(Loss) |
135,661 |
|
|
65,279 |
|
|
(127,661 |
) |
Income taxes |
33,433 |
|
|
35,802 |
|
|
30,702 |
|
Financial income |
(37,282 |
) |
|
(13,320 |
) |
|
(45,889 |
) |
Financial expenses |
68,121 |
|
|
54,346 |
|
|
43,823 |
|
Foreign exchange losses |
5,262 |
|
|
7,869 |
|
|
7,791 |
|
Result from investments accounted for using the equity method |
2,953 |
|
|
(2,199 |
) |
|
(2,794 |
) |
|
|
|
|
|
|
|||
Transaction costs related to acquisitions |
6,001 |
|
|
2,289 |
|
|
— |
|
Severance indemnities and provisions for severance expenses |
4,002 |
|
|
2,199 |
|
|
8,996 |
|
Legal costs for trademark dispute |
2,168 |
|
|
7,532 |
|
|
— |
|
Costs related to the Business Combination |
2,140 |
|
|
2,137 |
|
|
205,059 |
|
Net impairment of leased and owned stores |
1,782 |
|
|
1,639 |
|
|
8,692 |
|
Special donations for social responsibility |
100 |
|
|
1,000 |
|
|
— |
|
Net (income)/costs related to lease agreements |
(4,129 |
) |
|
(6,844 |
) |
|
15,512 |
|
Other |
— |
|
|
— |
|
|
4,884 |
|
Adjusted EBIT |
220,212 |
|
|
157,729 |
|
|
149,115 |
|
|
|
|
|
|
|
|||
Revenues |
1,904,549 |
|
|
1,492,840 |
|
|
1,292,402 |
|
Profit/(Loss) Margin (Profit/(Loss) / Revenues) |
7.1 |
% |
|
4.4 |
% |
|
(9.9 |
%) |
Adjusted EBIT Margin (Adjusted EBIT / Revenues) |
11.6 |
% |
|
10.6 |
% |
|
11.5 |
% |
Adjusted EBIT in FY 2023 was
Analysis by Segment
|
For the years ended December 31, |
|
Increase/(Decrease) |
|||||||||||||||||
(€ thousands, except percentages) |
2023 |
|
|
2022 |
|
|
2021 |
|
|
2023 vs 2022 |
|
% |
|
2022 vs 2021 |
|
% |
||||
Revenues by segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Zegna |
1,322,045 |
|
|
1,176,706 |
|
|
1,035,175 |
|
|
145,339 |
|
|
12.4 |
% |
|
141,531 |
|
|
13.7 |
% |
Thom Browne |
380,287 |
|
|
330,891 |
|
|
264,066 |
|
|
49,396 |
|
|
14.9 |
% |
|
66,825 |
|
|
25.3 |
% |
Tom Ford Fashion |
235,544 |
|
|
— |
|
|
— |
|
|
235,544 |
|
|
n.m. |
|
n.m. |
|
n.m. |
|||
Eliminations |
(33,327 |
) |
|
(14,757 |
) |
|
(6,839 |
) |
|
(18,570 |
) |
|
n.m. |
|
(7,918 |
) |
|
n.m. |
||
Total Revenues |
1,904,549 |
|
|
1,492,840 |
|
|
1,292,402 |
|
|
411,709 |
|
|
27.6 |
% |
|
200,438 |
|
|
15.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adjusted EBIT and Adjusted EBIT Margin by segment |
|
|
|
|||||||||||||||||
Zegna |
193,466 |
|
|
141,513 |
|
|
131,929 |
|
|
51,953 |
|
|
36.7 |
% |
|
9,584 |
|
|
7.3 |
% |
14.6 |
% |
|
12.0 |
% |
|
12.7 |
% |
|
|
|
|
|
|
|
|
|||||
Thom Browne |
58,969 |
|
|
48,077 |
|
|
38,097 |
|
|
10,892 |
|
|
22.7 |
% |
|
9,980 |
|
|
26.2 |
% |
15.5 |
% |
|
14.5 |
% |
|
14.4 |
% |
|
|
|
|
|
|
|
|
|||||
Tom Ford Fashion |
(1,741 |
) |
|
— |
|
|
— |
|
|
(1,741 |
) |
|
— |
% |
|
n.m. |
|
n.m. |
||
(0.7 |
)% |
|
n.m. |
|
n.m. |
|
|
|
|
|
|
|
|
|||||||
Corporate |
(30,423 |
) |
|
(31,861 |
) |
|
(20,911 |
) |
|
1,438 |
|
|
(4.5 |
%) |
|
(10,950 |
) |
|
52.4 |
% |
Eliminations |
(59 |
) |
|
— |
|
|
— |
|
|
(59 |
) |
|
n.m. |
|
n.m. |
|
n.m. |
|||
Total Adjusted EBIT |
220,212 |
|
|
157,729 |
|
|
149,115 |
|
|
62,483 |
|
|
39.6 |
% |
|
8,614.00 |
|
|
5.8 |
% |
Zegna segment
In FY 2023, the Zegna segment (which includes ZEGNA branded products, Textile and Third Party Brands) generated revenues of
2 Before inter-segment eliminations.
Adjusted EBIT for the Zegna segment was
Thom Browne segment
In FY 2023, the Thom Browne segment generated revenues of
Adjusted EBIT for the Thom Browne segment was
Tom Ford Fashion segment
In FY 2023, the Tom Ford Fashion segment generated revenues of
Corporate costs
Corporate costs amounted to
Capital Expenditure, Trade Working Capital, Net Financial Indebtedness/(Cash Surplus) and Free Cash Flow
Capital expenditure
|
For the years ended December 31, |
|||||||
(€ thousands, except percentages) |
2023 |
|
|
2022 |
|
|
2021 |
|
Payments for property, plant and equipment |
57,034 |
|
|
49,114 |
|
|
79,699 |
|
Payments for intangible assets |
20,843 |
|
|
24,185 |
|
|
14,627 |
|
Capital expenditure |
77,877 |
|
|
73,299 |
|
|
94,326 |
|
|
|
|
|
|
|
|||
Revenues |
1,904,549 |
|
|
1,492,840 |
|
|
1,292,402 |
|
As a percentage of revenues |
4.1 |
% |
|
4.9 |
% |
|
7.3 |
% |
Capital expenditure in FY 2023 rose to
Trade Working Capital
|
At December 31, |
|
|
|||||
(€ thousands, except percentages) |
2023 |
|
|
2022 |
|
|
Change |
|
Trade Working Capital |
448,909 |
|
|
317,128 |
|
|
131,781 |
|
of which trade receivables |
240,457 |
|
|
177,213 |
|
|
63,244 |
|
of which inventories |
522,589 |
|
|
410,851 |
|
|
111,738 |
|
of which trade payables and customer advances |
(314,137 |
) |
|
(270,936 |
) |
|
(43,201 |
) |
|
|
|
|
|
|
|||
Revenues |
1,904,549 |
|
|
1,492,840 |
|
|
|
|
As a percentage of revenues |
23.6 |
% |
|
21.2 |
% |
|
|
Trade Working Capital was
Net Financial Indebtedness/(Cash Surplus)
|
At December 31, |
|
|
|||
(€ thousands) |
2023 |
|
2022 |
|
|
Change |
Net Financial Indebtedness/(Cash Surplus) |
10,810 |
|
(122,153 |
) |
|
132,963 |
Net Financial Indebtedness was
Free Cash Flow
|
For the year ended December 31, |
|||||||
(€ thousands) |
2023 |
|
|
2022 |
|
|
2021 |
|
Net cash flows from operating activities |
275,382 |
|
|
146,398 |
|
|
281,155 |
|
Payments for property, plant and equipment |
(57,034 |
) |
|
(49,114 |
) |
|
(79,699 |
) |
Proceeds from disposals of property, plant and equipment |
— |
|
|
— |
|
|
3,791 |
|
Payments for intangible assets |
(20,843 |
) |
|
(24,185 |
) |
|
(14,627 |
) |
Payments of lease liabilities |
(125,732 |
) |
|
(121,633 |
) |
|
(100,611 |
) |
Free Cash Flow |
71,773 |
|
|
(48,534 |
) |
|
90,009 |
|
In FY 2023 the Group generated positive Free Cash Flow of
***
Conference Call
As previously announced, today, at 8a.m. ET (2p.m. CET), the Group will host a live webcast and conference call. To access the webcast please visit our website (https://ir.zegnagroup.com/events-and-presentations/events). To participate in the call, please dial:
Access Code: 807709
An online archive of the broadcast will be available on the website shortly after the live call and will be available for twelve months.
Upcoming Announcements
The Ermenegildo Zegna Group’s next scheduled announcements are:
- April 23, 2024 Q1 2024 Revenues (*)
- July 25, 2024 H1 2024 Preliminary Revenues (*)
- September 18, 2024 H1 2024 Financial Results (*)
- October 22, 2024 Q3 2024 Revenues (*)
______________________________________
(*) Unaudited figures
To receive email alerts of the timing of future financial news releases, as well as future announcements, please register at https://ir.zegnagroup.com.
***
About Ermenegildo Zegna Group
Founded in 1910 in Trivero,
***
Forward Looking Statements
This communication contains forward-looking statements that are based on beliefs and assumptions and on information currently available to the Company. In particular, statements regarding future financial performance and the Group’s expectations as to the achievement of certain targeted metrics at any future date or for any future period are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek”, “aspire,” “goal,” “outlook,” “guidance,” “forecast,” “prospect” or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. Any statements that refer to expectations, projections or other characterizations of future events or circumstances, including strategies or plans, are also forward-looking statements. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements, and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in forward-looking statements as a result of a variety of factors, including: the recognition, integrity and reputation of our brands; our ability to anticipate trends and to identify and respond to new and changing consumer preference; the COVID-19 pandemic or similar public health crises; international business, regulatory, social and political risks; the conflict in
Most of these factors are outside the Company’s control and are difficult to predict. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company and its directors, officers or employees or any other person that the Company will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this communication represent the views of the Company as of the date of this communication. Subsequent events and developments may cause that view to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company disclaims any obligation to update or revise publicly forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing the views of the Company as of any date subsequent to the date of this communication.
***
FY 2023 - Group Revenues Tables
Revenues by Segment
|
For the years ended December 31, |
|
Increase/(Decrease) |
|||||||||||||||||||||||||||||
(€ thousands, except percentages) |
2023 |
|
|
2022 |
|
|
2021 |
|
|
2023 vs 2022 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
|
2022 vs 2021 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
||||||||
Zegna |
1,322,045 |
|
|
1,176,706 |
|
|
1,035,175 |
|
|
145,339 |
|
|
12.4 |
% |
|
13.8 |
% |
|
19.5 |
% |
|
141,531 |
|
|
13.7 |
% |
|
9.3 |
% |
|
8.4 |
% |
Thom Browne |
380,287 |
|
|
330,891 |
|
|
264,066 |
|
|
49,396 |
|
|
14.9 |
% |
|
18.3 |
% |
|
17.8 |
% |
|
66,825 |
|
|
25.3 |
% |
|
20.6 |
% |
|
20.6 |
% |
Tom Ford Fashion |
235,544 |
|
|
— |
|
|
— |
|
|
235,544 |
|
|
n.m.(*) |
|
n.m. |
|
n.m. |
|
— |
|
|
n.m. |
|
n.m. |
|
n.m. |
||||||
Eliminations |
(33,327 |
) |
|
(14,757 |
) |
|
(6,839 |
) |
|
(18,570 |
) |
|
n.m. |
|
n.m. |
|
n.m. |
|
(7,918 |
) |
|
n.m. |
|
n.m. |
|
n.m. |
||||||
Total revenues |
1,904,549 |
|
|
1,492,840 |
|
|
1,292,402 |
|
|
411,709 |
|
|
27.6 |
% |
|
29.7 |
% |
|
19.3 |
% |
|
200,438 |
|
|
15.5 |
% |
|
11.0 |
% |
|
10.4 |
% |
______________________________________
(*) Throughout this section “n.m.” means not meaningful
Revenues by Product Line
|
For the years ended December 31, |
|
Increase/(Decrease) |
||||||||||||||||||||||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2021 |
|
2023 vs 2022 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
|
2022 vs 2021 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
||||||||
ZEGNA branded products |
1,109,491 |
|
923,942 |
|
847,311 |
|
185,549 |
|
|
20.1 |
% |
|
22.3 |
% |
|
22.3 |
% |
|
76,631 |
|
|
9.0 |
% |
|
4.1 |
% |
|
4.1 |
% |
Thom Browne |
378,410 |
|
330,014 |
|
263,397 |
|
48,396 |
|
|
14.7 |
% |
|
18.0 |
% |
|
17.5 |
% |
|
66,617 |
|
|
25.3 |
% |
|
20.6 |
% |
|
20.6 |
% |
TOM FORD FASHION |
235,531 |
|
— |
|
— |
|
235,531 |
|
|
n.m.(*) |
|
n.m. |
|
n.m. |
|
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|||
Textile |
150,986 |
|
136,769 |
|
102,244 |
|
14,217 |
|
|
10.4 |
% |
|
9.4 |
% |
|
9.5 |
% |
|
34,525 |
|
|
33.8 |
% |
|
35.4 |
% |
|
32.7 |
% |
Third Party Brands |
25,343 |
|
97,792 |
|
74,957 |
|
(72,449 |
) |
|
(74.1 |
%) |
|
(74.2 |
%) |
|
(17.4 |
%) |
|
22,835 |
|
|
30.5 |
% |
|
27.9 |
% |
|
86.1 |
% |
Other |
4,788 |
|
4,323 |
|
4,493 |
|
465 |
|
|
10.8 |
% |
|
11.6 |
% |
|
15.4 |
% |
|
(170 |
) |
|
(3.8 |
%) |
|
(7.5 |
%) |
|
(7.5 |
%) |
Total revenues |
1,904,549 |
|
1,492,840 |
|
1,292,402 |
|
411,709 |
|
|
27.6 |
% |
|
29.7 |
% |
|
19.3 |
% |
|
200,438 |
|
|
15.5 |
% |
|
11.0 |
% |
|
10.4 |
% |
Revenues by Distribution Channel
|
For the years ended December 31, |
|
Increase/(Decrease) |
||||||||||||||||||||||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2021 |
|
2023 vs 2022 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
|
2022 vs 2021 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
||||||||
Direct to Consumer (DTC) |
|||||||||||||||||||||||||||||
ZEGNA branded products |
945,313 |
|
772,505 |
|
712,862 |
|
172,808 |
|
|
22.4 |
% |
|
25.4 |
% |
|
25.4 |
% |
|
59,643 |
|
|
8.4 |
% |
|
2.9 |
% |
|
2.9 |
% |
Thom Browne |
183,422 |
|
145,702 |
|
138,567 |
|
37,720 |
|
|
25.9 |
% |
|
34.1 |
% |
|
19.7 |
% |
|
7,135 |
|
|
5.1 |
% |
|
(1.5 |
%) |
|
(1.5 |
%) |
TOM FORD FASHION |
136,291 |
|
— |
|
— |
|
136,291 |
|
|
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|
— |
% |
|
— |
% |
|
— |
% |
||||
Total Direct to Consumer (DTC) |
1,265,026 |
|
918,207 |
|
851,429 |
|
346,819 |
|
|
37.8 |
% |
|
42.1 |
% |
|
24.5 |
% |
|
66,778 |
|
|
7.8 |
% |
|
2.2 |
% |
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wholesale |
|||||||||||||||||||||||||||||
ZEGNA branded products |
164,178 |
|
151,437 |
|
134,449 |
|
12,741 |
|
|
8.4 |
% |
|
7.0 |
% |
|
7.0 |
% |
|
16,988 |
|
|
12.6 |
% |
|
10.6 |
% |
|
10.6 |
% |
Thom Browne |
194,988 |
|
184,312 |
|
124,830 |
|
10,676 |
|
|
5.8 |
% |
|
6.0 |
% |
|
15.7 |
% |
|
59,482 |
|
|
47.7 |
% |
|
46.6 |
% |
|
46.6 |
% |
TOM FORD FASHION |
99,240 |
|
— |
|
— |
|
99,240 |
|
|
n.m. |
|
n.m. |
|
n.m. |
|
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|||
Third Party Brands and Textile |
176,329 |
|
234,561 |
|
177,201 |
|
(58,232 |
) |
|
(24.8 |
%) |
|
(25.5 |
%) |
|
5.8 |
% |
|
57,360 |
|
|
32.4 |
% |
|
32.2 |
% |
|
38.6 |
% |
Total Wholesale |
634,735 |
|
570,310 |
|
436,480 |
|
64,425 |
|
|
11.3 |
% |
|
10.7 |
% |
|
9.6 |
% |
|
133,830 |
|
|
30.7 |
% |
|
29.4 |
% |
|
30.8 |
% |
Other |
4,788 |
|
4,323 |
|
4,493 |
|
465 |
|
|
n.m. |
|
n.m. |
|
n.m. |
|
(170 |
) |
|
(3.8 |
%) |
|
(7.5 |
%) |
|
— |
% |
|||
Total revenues |
1,904,549 |
|
1,492,840 |
|
1,292,402 |
|
411,709 |
|
|
27.6 |
% |
|
29.7 |
% |
|
19.3 |
% |
|
200,438 |
|
|
15.5 |
% |
|
11.0 |
% |
|
10.4 |
% |
Revenues by Geographical Area
|
For the years ended December 31, |
|
Increase/(Decrease) |
||||||||||||||||||||||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2021 |
|
2023 vs 2022 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
|
2022 vs 2021 |
|
Reported Revenues |
|
Constant Currency |
|
Organic Growth |
||||||||
EMEA (1) |
658,694 |
|
520,226 |
|
380,325 |
|
138,468 |
|
|
26.6 |
% |
|
27.7 |
% |
|
18.8 |
% |
|
139,901 |
|
|
36.8 |
% |
|
36.2 |
% |
|
39.3 |
% |
of which |
281,793 |
|
224,342 |
|
158,722 |
|
57,451 |
|
|
25.6 |
% |
|
25.6 |
% |
|
18.4 |
% |
|
65,620 |
|
|
41.3 |
% |
|
41.8 |
% |
|
42.1 |
% |
of which |
70,191 |
|
53,970 |
|
37,682 |
|
16,221 |
|
|
30.1 |
% |
|
31.7 |
% |
|
14.7 |
% |
|
16,288 |
|
|
43.2 |
% |
|
42.2 |
% |
|
51.6 |
% |
of which |
68,729 |
|
50,926 |
|
32,944 |
|
17,803 |
|
|
35.0 |
% |
|
38.2 |
% |
|
30.9 |
% |
|
17,982 |
|
|
54.6 |
% |
|
38.4 |
% |
|
39.6 |
% |
|
417,352 |
|
294,686 |
|
191,283 |
|
122,666 |
|
|
41.6 |
% |
|
40.4 |
% |
|
11.4 |
% |
|
103,403 |
|
|
54.1 |
% |
|
43.2 |
% |
|
41.4 |
% |
of which |
384,544 |
|
270,312 |
|
176,059 |
|
114,232 |
|
|
42.3 |
% |
|
40.9 |
% |
|
10.4 |
% |
|
94,253 |
|
|
53.5 |
% |
|
42.1 |
% |
|
39.9 |
% |
|
37,538 |
|
29,889 |
|
19,971 |
|
7,649 |
|
|
25.6 |
% |
|
16.2 |
% |
|
16.2 |
% |
|
9,918 |
|
|
49.7 |
% |
|
33.4 |
% |
|
33.4 |
% |
APAC (4) |
788,007 |
|
644,802 |
|
696,344 |
|
143,205 |
|
|
22.2 |
% |
|
27.3 |
% |
|
23.7 |
% |
|
(51,542 |
) |
|
(7.4 |
%) |
|
(11.6 |
%) |
|
(11.8 |
%) |
of which Greater
|
595,515 |
|
494,110 |
|
588,876 |
|
101,405 |
|
|
20.5 |
% |
|
25.7 |
% |
|
24.2 |
% |
|
(94,766 |
) |
|
(16.1 |
%) |
|
(20.6 |
%) |
|
(20.6 |
%) |
of which |
84,990 |
|
65,445 |
|
55,479 |
|
19,545 |
|
|
29.9 |
% |
|
39.8 |
% |
|
28.3 |
% |
|
9,966 |
|
|
18.0 |
% |
|
23.7 |
% |
|
24.3 |
% |
Other (5) |
2,958 |
|
3,237 |
|
4,479 |
|
(279 |
) |
|
(8.6 |
%) |
|
(8.3 |
%) |
|
(25.6 |
%) |
|
(1,242 |
) |
|
(27.7 |
%) |
|
(29.6 |
%) |
|
(29.6 |
%) |
Total revenues |
1,904,549 |
|
1,492,840 |
|
1,292,402 |
|
411,709 |
|
|
27.6 |
% |
|
29.7 |
% |
|
19.3 |
% |
|
200,438 |
|
|
15.5 |
% |
|
11.0 |
% |
|
10.4 |
% |
________________________________________
(1) EMEA includes
(2)
(3)
(4) APAC includes the
(5) Other revenues mainly include royalties.
***
Group monobrand(1) store network at December 31, 2023 and 2022
|
At December 31, |
||||||||||||
|
2023 |
|
2022 |
||||||||||
# Stores |
ZEGNA |
|
Thom Browne |
|
TOM FORD FASHION |
|
Group |
|
ZEGNA |
|
Thom Browne |
|
Group |
EMEA |
71 |
|
9 |
|
4 |
|
84 |
|
65 |
|
10 |
|
75 |
|
59 |
|
7 |
|
12 |
|
78 |
|
53 |
|
7 |
|
60 |
APAC |
123 |
|
70 |
|
35 |
|
228 |
|
121 |
|
46 |
|
167 |
Total Direct to Customer (DTC) |
253 |
|
86 |
|
51 |
|
390 |
|
239 |
|
63 |
|
302 |
EMEA (2) |
55 |
|
7 |
|
14 |
|
76 |
|
57 |
|
6 |
|
63 |
|
63 |
|
3 |
|
50 |
|
116 |
|
64 |
|
4 |
|
68 |
APAC |
33 |
|
15 |
|
6 |
|
54 |
|
35 |
|
32 |
|
67 |
Total Wholesale |
151 |
|
25 |
|
70 |
|
246 |
|
156 |
|
42 |
|
198 |
Total |
404 |
|
111 |
|
121 |
|
636 |
|
395 |
|
105 |
|
500 |
________________________________________
(1) Monobrand store count includes our DOSs (which are divided into boutiques and outlets) and our Wholesale monobrand stores (including also monobrand franchisees).
(2) Does not include any stores in
(3)
***
Ermenegildo Zegna N.V. CONSOLIDATED STATEMENT OF PROFIT AND LOSS for the years ended December 31, 2023, 2022 and 2021 |
||||||||
|
For the years ended December 31, |
|||||||
(€ thousands, except per share data) |
2023 |
|
|
2022(*) |
|
2021(*) |
||
Revenues |
1,904,549 |
|
|
1,492,840 |
|
|
1,292,402 |
|
Cost of sales |
(680,235 |
) |
|
(564,832 |
) |
|
(495,702 |
) |
Gross profit |
1,224,314 |
|
|
928,008 |
|
|
796,700 |
|
Selling, general and administrative expenses |
(901,364 |
) |
|
(695,084 |
) |
|
(822,897 |
) |
Marketing expenses |
(114,802 |
) |
|
(85,147 |
) |
|
(67,831 |
) |
Operating profit/(loss) |
208,148 |
|
|
147,777 |
|
|
(94,028 |
) |
Financial income |
37,282 |
|
|
13,320 |
|
|
45,889 |
|
Financial expenses |
(68,121 |
) |
|
(54,346 |
) |
|
(43,823 |
) |
Foreign exchange losses |
(5,262 |
) |
|
(7,869 |
) |
|
(7,791 |
) |
Result from investments accounted for using the equity method |
(2,953 |
) |
|
2,199 |
|
|
2,794 |
|
Profit/(Loss) before taxes |
169,094 |
|
|
101,081 |
|
|
(96,959 |
) |
Income taxes |
(33,433 |
) |
|
(35,802 |
) |
|
(30,702 |
) |
Profit/(Loss) |
135,661 |
|
|
65,279 |
|
|
(127,661 |
) |
Attributable to: |
|
|
|
|
|
|||
Shareholders of the Parent Company |
121,529 |
|
|
51,482 |
|
|
(136,001 |
) |
Non-controlling interests |
14,132 |
|
|
13,797 |
|
|
8,340 |
|
|
|
|
|
|
|
|||
Basic earnings per share in € |
0.49 |
|
|
0.22 |
|
|
(0.67 |
) |
Diluted earnings per share in € |
0.48 |
|
|
0.21 |
|
|
(0.67 |
) |
_________________
(*) Starting with the year ended December 31, 2023, the Group presents the consolidated statement of profit and loss by function, which is most representative of the way the Chief Operating Decision Maker and management view the business, and therefore it provides reliable and more relevant information and is consistent with international practice. In order to conform to this new presentation, the information for the year ended December 31, 2022 and 2021 have been reclassified compared to what was previously presented by the Group.
Ermenegildo Zegna N.V. CONSOLIDATED STATEMENT OF FINANCIAL POSITION at December 31, 2023 and 2022 |
|||
|
At December 31, |
||
(€ thousands) |
2023 |
|
2022 |
Assets |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
572,274 |
|
455,908 |
Property, plant and equipment |
159,608 |
|
126,139 |
Right-of-use assets |
533,952 |
|
375,508 |
Investments accounted for using the equity method |
18,765 |
|
22,648 |
Deferred tax assets |
160,878 |
|
124,627 |
Other non-current financial assets |
33,898 |
|
36,240 |
Total non-current assets |
1,479,375 |
|
1,141,070 |
Current assets |
|
|
|
Inventories |
522,589 |
|
410,851 |
Trade receivables |
240,457 |
|
177,213 |
Derivative financial instruments |
11,110 |
|
22,454 |
Tax receivables |
31,024 |
|
15,350 |
Other current financial assets |
90,917 |
|
320,894 |
Other current assets |
95,260 |
|
84,574 |
Cash and cash equivalents |
296,279 |
|
254,321 |
Total current assets |
1,287,636 |
|
1,285,657 |
Total assets |
2,767,011 |
|
2,426,727 |
Liabilities and Equity |
|
|
|
Equity attributable to shareholders of the Parent Company |
840,294 |
|
678,949 |
Equity attributable to non-controlling interests |
60,602 |
|
53,372 |
Total equity |
900,896 |
|
732,321 |
Non-current liabilities |
|
|
|
Non-current borrowings |
113,285 |
|
184,880 |
Other non-current financial liabilities |
136,556 |
|
178,793 |
Non-current lease liabilities |
471,083 |
|
332,050 |
Non-current provisions for risks and charges |
19,849 |
|
19,581 |
Employee benefits |
29,645 |
|
51,584 |
Deferred tax liabilities |
73,885 |
|
60,534 |
Other non-current liabilities |
9,689 |
|
— |
Total non-current liabilities |
853,992 |
|
827,422 |
Current liabilities |
|
|
|
Current borrowings |
289,337 |
|
286,175 |
Other current financial liabilities |
22,102 |
|
37,258 |
Current lease liabilities |
122,642 |
|
111,457 |
Derivative financial instruments |
897 |
|
2,362 |
Current provisions for risks and charges |
16,019 |
|
13,969 |
Trade payables and customer advances |
314,137 |
|
270,936 |
Tax liabilities |
41,976 |
|
25,999 |
Other current liabilities |
205,013 |
|
118,828 |
Total current liabilities |
1,012,123 |
|
866,984 |
Total equity and liabilities |
2,767,011 |
|
2,426,727 |
Ermenegildo Zegna N.V. CONSOLIDATED CASH FLOW STATEMENT for the years ended December 31, 2023, 2022 and 2021 |
||||||||
|
For the years ended December 31, |
|||||||
(€ thousands) |
2023 |
|
|
2022 |
|
|
2021 |
|
Operating activities |
|
|
|
|
|
|||
Profit/(Loss) |
135,661 |
|
|
65,279 |
|
|
(127,661 |
) |
Income taxes |
33,433 |
|
|
35,802 |
|
|
30,702 |
|
Depreciation, amortization and impairment of assets |
194,952 |
|
|
173,521 |
|
|
163,367 |
|
Financial income |
(37,282 |
) |
|
(13,320 |
) |
|
(45,889 |
) |
Financial expenses |
68,121 |
|
|
54,346 |
|
|
43,823 |
|
Foreign exchange losses |
5,262 |
|
|
7,869 |
|
|
7,791 |
|
Write downs and other provisions |
(1,168 |
) |
|
14 |
|
|
19,487 |
|
Write downs of the provision for obsolete inventory |
31,850 |
|
|
28,561 |
|
|
29,600 |
|
Result from investments accounted for using the equity method |
2,953 |
|
|
(2,199 |
) |
|
(2,794 |
) |
(Gains)/Losses arising from the disposal of fixed assets |
— |
|
|
(1,124 |
) |
|
1,153 |
|
Other non-cash expenses, net |
66,641 |
|
|
23,063 |
|
|
230,812 |
|
Change in inventories |
(72,770 |
) |
|
(103,112 |
) |
|
(27,554 |
) |
Change in trade receivables |
(51,022 |
) |
|
(15,623 |
) |
|
(12,294 |
) |
Change in trade payables including customer advances |
11,670 |
|
|
43,511 |
|
|
31,426 |
|
Change in current and non-current provisions for risks and charges |
(6,720 |
) |
|
(29,102 |
) |
|
(5,498 |
) |
Change in employee benefits |
(2,566 |
) |
|
(8,676 |
) |
|
(13,456 |
) |
Change in other operating assets and liabilities |
(20,479 |
) |
|
(38,216 |
) |
|
38,927 |
|
Interest paid |
(29,166 |
) |
|
(24,938 |
) |
|
(17,487 |
) |
Income taxes paid |
(53,988 |
) |
|
(49,258 |
) |
|
(63,300 |
) |
Net cash flows from operating activities |
275,382 |
|
|
146,398 |
|
|
281,155 |
|
Investing activities |
|
|
|
|
|
|||
Payments for property, plant and equipment |
(57,034 |
) |
|
(49,114 |
) |
|
(79,699 |
) |
Proceeds from disposals of property, plant and equipment |
— |
|
|
— |
|
|
3,791 |
|
Payments for intangible assets |
(20,843 |
) |
|
(24,185 |
) |
|
(14,627 |
) |
Proceeds from disposals of non-current financial assets |
2,345 |
|
|
2,585 |
|
|
1,536 |
|
Payments for purchases of non-current financial assets |
(2,623 |
) |
|
(111 |
) |
|
(4,431 |
) |
Proceeds from disposals of current financial assets and derivative instruments |
270,317 |
|
|
46,487 |
|
|
92,021 |
|
Payments for acquisitions of current financial assets and derivative instruments |
(36,956 |
) |
|
(32,412 |
) |
|
(76,058 |
) |
Business combinations, net of cash acquired |
(117,686 |
) |
|
(585 |
) |
|
(4,224 |
) |
Acquisition of investments accounted for using the equity method |
(15,734 |
) |
|
— |
|
|
(313 |
) |
Net cash flows from/(used in) investing activities |
21,786 |
|
|
(57,335 |
) |
|
(82,004 |
) |
Financing activities |
|
|
|
|
|
|||
Proceeds from borrowings |
204,424 |
|
|
— |
|
|
123,570 |
|
Repayments of borrowings |
(306,150 |
) |
|
(159,719 |
) |
|
(160,210 |
) |
Repayments of other non-current financial liabilities |
— |
|
|
(3,919 |
) |
|
(4,287 |
) |
Payments of lease liabilities |
(125,732 |
) |
|
(121,633 |
) |
|
(100,611 |
) |
Proceeds from the exercise of warrants |
4,409 |
|
|
— |
|
|
— |
|
Proceeds from capital contribution from Monterubello |
— |
|
|
10,923 |
|
|
— |
|
Sales of shares held in treasury |
3,654 |
|
|
3,390 |
|
|
6,343 |
|
Purchase of own shares |
— |
|
|
— |
|
|
(384 |
) |
Dividends to owners of the parent |
(25,031 |
) |
|
(21,852 |
) |
|
(102 |
) |
Dividends paid to non-controlling interests |
(6,068 |
) |
|
(4,187 |
) |
|
(548 |
) |
Purchase of own shares from Monterubello |
— |
|
|
— |
|
|
(455,000 |
) |
Proceeds from issuance of ordinary shares upon Business Combination |
— |
|
|
— |
|
|
310,739 |
|
Proceeds from issuance of ordinary shares to PIPE Investors |
— |
|
|
— |
|
|
331,385 |
|
Payments of transaction costs related to the Business Combination |
— |
|
|
— |
|
|
(48,475 |
) |
Cash distributed as part of the Disposition |
— |
|
|
— |
|
|
(26,272 |
) |
Payments for acquisition of non-controlling interests |
— |
|
|
— |
|
|
(40,253 |
) |
Net cash flows used in financing activities |
(250,494 |
) |
|
(296,997 |
) |
|
(64,105 |
) |
Effects of exchange rate changes on cash and cash equivalents |
(4,716 |
) |
|
2,464 |
|
|
7,454 |
|
Net increase/(decrease) in cash and cash equivalents |
41,958 |
|
|
(205,470 |
) |
|
142,500 |
|
Cash and cash equivalents at the beginning of the year |
254,321 |
|
|
459,791 |
|
|
317,291 |
|
Cash and cash equivalents at the end of the year |
296,279 |
|
|
254,321 |
|
|
459,791 |
|
Non-IFRS Financial Measures
The Group’s management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: adjusted earnings before interest and taxes (“Adjusted EBIT”), Adjusted EBIT Margin, Net Financial Indebtedness/(Cash Surplus), Trade Working Capital, Free Cash Flow, revenues on a constant currency basis (Constant Currency) and revenues on an organic growth basis (Organic Growth). The Group’s management believes that these non-IFRS financial measures provide useful and relevant information regarding the Group’s financial performance and financial condition, and improve the ability of management and investors to assess and compare the financial performance and financial position of the Group with those of other companies. They also provide comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other strategic and operational decisions. While similar measures are widely used in the industry in which the Group operates, the financial measures that the Group uses may not be comparable to other similarly named measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS. A definition, explanation of relevance and a reconciliation of each non-IFRS financial measure to the most directly comparable measure calculated and presented in accordance with IFRS are set out below.
Adjusted EBIT and Adjusted EBIT Margin
Adjusted EBIT is defined as profit or loss before income taxes plus financial income, financial expenses, foreign exchange losses and the result from investments accounted for using the equity method, adjusted for income and costs which are significant in nature and that management considers not reflective of underlying operating activities, including, for one or all of the periods presented and as further described below, transaction costs related to acquisitions, severance indemnities and provisions for severance expenses, legal costs for trademark dispute, costs related to the Business Combination, net impairment of leased and owned stores, special donations for social responsibility, net (income)/costs related to lease agreements and certain other items.
Adjusted EBIT Margin is defined as Adjusted EBIT divided by revenues of the applicable period.
The Group’s management uses Adjusted EBIT and Adjusted EBIT Margin for internal reporting to assess performance and as part of the forecasting, budgeting and decision-making processes as they provide additional transparency regarding the Group’s underlying operating performance. The Group’s management believes these non-IFRS financial measures are useful because they exclude items that management believes are not indicative of the Group’s underlying operating performance and allow management to view operating trends, perform analytical comparisons and benchmark performance between periods and among segments. The Group’s management also believes that Adjusted EBIT and Adjusted EBIT Margin are useful for investors and analysts to better understand how management assesses the Group’s underlying operating performance on a consistent basis and to compare the Group’s performance with that of other companies. Accordingly, management believes that Adjusted EBIT and Adjusted EBIT Margin provide useful information to third party stakeholders in understanding and evaluating the Group’s operating results.
The following table presents a reconciliation of Profit/(Loss) to Adjusted EBIT and the calculation of the Profit/(Loss) Margin and the Adjusted EBIT Margin for the years ended December 31, 2023, 2022 and 2021.
|
For the year ended December 31, |
|||||||
(€ thousands, except percentages) |
2023 |
|
|
2022 |
|
|
2021 |
|
Profit/(Loss) |
135,661 |
|
|
65,279 |
|
|
(127,661 |
) |
Income taxes |
33,433 |
|
|
35,802 |
|
|
30,702 |
|
Financial income |
(37,282 |
) |
|
(13,320 |
) |
|
(45,889 |
) |
Financial expenses |
68,121 |
|
|
54,346 |
|
|
43,823 |
|
Foreign exchange losses |
5,262 |
|
|
7,869 |
|
|
7,791 |
|
Result from investments accounted for using the equity method |
2,953 |
|
|
(2,199 |
) |
|
(2,794 |
) |
|
|
|
|
|
|
|||
Transaction costs related to acquisitions (1) |
6,001 |
|
|
2,289 |
|
|
— |
|
Severance indemnities and provisions for severance expenses (2) |
4,002 |
|
|
2,199 |
|
|
8,996 |
|
Legal costs for trademark dispute (3) |
2,168 |
|
|
7,532 |
|
|
— |
|
Costs related to the Business Combination (4) |
2,140 |
|
|
2,137 |
|
|
205,059 |
|
Net impairment of leased and owned stores (5) |
1,782 |
|
|
1,639 |
|
|
8,692 |
|
Special donations for social responsibility (6) |
100 |
|
|
1,000 |
|
|
— |
|
Net (income)/costs related to lease agreements (7) |
(4,129 |
) |
|
(6,844 |
) |
|
15,512 |
|
Other (8) |
— |
|
|
— |
|
|
4,884 |
|
Adjusted EBIT |
220,212 |
|
|
157,729 |
|
|
149,115 |
|
|
|
|
|
|
|
|||
Revenues |
1,904,549 |
|
|
1,492,840 |
|
|
1,292,402 |
|
Profit/(Loss) Margin (Profit/(Loss) / Revenues) |
7.1 |
% |
|
4.4 |
% |
|
(9.9 |
%) |
Adjusted EBIT Margin (Adjusted EBIT / Revenues) |
11.6 |
% |
|
10.6 |
% |
|
11.5 |
% |
__________________
(1) Relates to transaction costs of
(2) Relates to severance indemnities of
(3) Relates to legal costs of
(4) Costs related to the Business Combination of
(a)
(b)
(c)
(d)
(e)
(f)
(g)
These amounts are recorded within (i) “selling, general and administrative expenses” for
(5) Net impairment of leased and owned stores for 2023, 2022, 2021 includes (i) impairment of
(6) Relates to donations to support initiatives related to humanitarian emergencies in
(7) Net (income)/costs related to lease agreements include:
(a) in 2023:
(b) in 2022: (i) proceeds of
(c) in 2021: (i)
These amounts are recorded within “selling, general and administrative expenses” in the consolidated statement of profit and loss.
(8) Other adjustments in 2021 include
Net Financial Indebtedness/(Cash Surplus)
Net Financial Indebtedness/(Cash Surplus) is defined as the sum of financial borrowings (current and non-current), and derivative financial instrument liabilities, net of cash and cash equivalents, derivative financial instrument assets, securities and financial receivables (recorded within other current financial assets in the consolidated statement of financial position).
The Group’s management believes that Net Financial Indebtedness/(Cash Surplus) is useful to monitor the level of net liquidity and financial resources available to the Group. The Group’s management believes this non-IFRS financial measure aids management, investors and analysts to analyze the Group’s financial position and financial resources available, and to compare the Group’s financial position and financial resources available with that of other companies.
The following table sets forth the calculation of Net Financial Indebtedness/(Cash Surplus) at December 31, 2023 and 2022.
|
At December 31, |
||||
(€ thousands) |
2023 |
|
|
2022 |
|
Non-current borrowings |
113,285 |
|
|
184,880 |
|
Current borrowings |
289,337 |
|
|
286,175 |
|
Derivative financial instruments — Liabilities |
897 |
|
|
2,362 |
|
Total borrowings, other financial liabilities and derivatives |
403,519 |
|
|
473,417 |
|
Cash and cash equivalents |
(296,279 |
) |
|
(254,321 |
) |
Derivative financial instruments — Assets |
(11,110 |
) |
|
(22,454 |
) |
Other current financial assets(1) |
(85,320 |
) |
|
(318,795 |
) |
Total cash and cash equivalents, other current financial assets and derivatives |
(392,709 |
) |
|
(595,570 |
) |
Net Financial Indebtedness/(Cash Surplus) |
10,810 |
|
|
(122,153 |
) |
________________________________________
(1) Includes (i) the Group’s investments in securities amounting to
Trade Working Capital
Trade Working Capital is defined as current assets less current liabilities adjusted for derivative assets and liabilities, tax receivables and liabilities, cash and cash equivalents, borrowings, lease liabilities, and certain other current assets and liabilities.
The Group’s management uses Trade Working Capital to understand and evaluate the Group’s liquidity generation/absorption. The Group’s management believes this non-IFRS financial measure is important supplemental information for investors in evaluating liquidity in that it provides insight into the availability of net current resources to fund our ongoing operations. Trade Working Capital is a measure used by management in internal evaluations of cash availability and operational performance.
The following table sets forth the calculation of Trade Working Capital at December 31, 2023 and 2022.
|
At December 31, |
||||
(€ thousands) |
2023 |
|
|
2022 |
|
Current assets |
1,287,636 |
|
|
1,285,657 |
|
Current liabilities |
(1,012,123 |
) |
|
(866,984 |
) |
Working capital |
275,513 |
|
|
418,673 |
|
Less: |
|
|
|
||
Derivative financial instruments - Assets |
11,110 |
|
|
22,454 |
|
Tax receivables |
31,024 |
|
|
15,350 |
|
Other current financial assets |
90,917 |
|
|
320,894 |
|
Other current assets |
95,260 |
|
|
84,574 |
|
Cash and cash equivalents |
296,279 |
|
|
254,321 |
|
Current borrowings |
(289,337 |
) |
|
(286,175 |
) |
Current lease liabilities |
(122,642 |
) |
|
(111,457 |
) |
Derivative financial instruments - Liabilities |
(897 |
) |
|
(2,362 |
) |
Other current financial liabilities |
(22,102 |
) |
|
(37,258 |
) |
Current provisions for risks and charges |
(16,019 |
) |
|
(13,969 |
) |
Tax liabilities |
(41,976 |
) |
|
(25,999 |
) |
Other current liabilities |
(205,013 |
) |
|
(118,828 |
) |
Trade Working Capital |
448,909 |
|
|
317,128 |
|
of which trade receivables |
240,457 |
|
|
177,213 |
|
of which inventories |
522,589 |
|
|
410,851 |
|
of which trade payables and customer advances |
(314,137 |
) |
|
(270,936 |
) |
Free Cash Flow
Free Cash Flow is defined as net cash flows from operating activities less payments for property, plant and equipment (net of proceeds from disposals), intangible assets and lease liabilities.
The Group’s management believes that Free Cash Flow is a useful metric for management, investors and analysts to evaluate and monitor the Group’s ability to generate cash, including in comparison to other companies. Free Cash Flow is not representative of residual cash flows available for discretionary purposes.
The following table sets forth the Free Cash Flow for the years ended December 31, 2023, 2022 and 2021:
|
For the year ended December 31, |
|||||||
(€ thousands) |
2023 |
|
|
2022 |
|
|
2021 |
|
Net cash flows from operating activities |
275,382 |
|
|
146,398 |
|
|
281,155 |
|
Payments for property, plant and equipment |
(57,034 |
) |
|
(49,114 |
) |
|
(79,699 |
) |
Proceeds from disposals of property plant and equipment |
— |
|
|
— |
|
|
3,791 |
|
Payments for intangible assets |
(20,843 |
) |
|
(24,185 |
) |
|
(14,627 |
) |
Payments of lease liabilities |
(125,732 |
) |
|
(121,633 |
) |
|
(100,611 |
) |
Free Cash Flow |
71,773 |
|
|
(48,534 |
) |
|
90,009 |
|
Revenues on a constant currency basis (Constant Currency)
In addition to presenting our revenues on a current currency basis, we also present certain revenue information on a constant currency basis (Constant Currency), which excludes the effects of foreign currency translation from our subsidiaries with functional currencies different from the Euro.
We calculate Constant Currency revenues by applying the current period average foreign currency exchange rates to translate prior period revenues of foreign subsidiaries expressed in local functional currencies different than the Euro.
We use revenues on a Constant Currency basis to analyze how our underlying revenues have changed between periods independent of the effects of foreign currency translation.
Revenues on a Constant Currency basis are not a substitute for revenues on a current currency basis or any IFRS-related measures, however we believe that revenues excluding the impact of foreign currency translation provide additional useful information to management and to investors in analyzing and evaluating our revenues and operating performance.
Revenues on an organic growth basis (Organic Growth)
In addition to presenting our revenues on a current currency basis, we also present certain revenue information on an organic growth basis (Organic Growth). Organic Growth is calculated as the change in revenues from period to period, excluding the effects of (a) foreign exchange, (b) acquisitions and disposals and (c) changes in license agreements where the Group operates as a licensee.
In calculating Organic Growth, the following adjustments are made to revenues:
(1) Foreign exchange – Current period average foreign currency exchange rates are used to translate prior period revenues of foreign subsidiaries expressed in local functional currencies different than the Euro.
(2) Acquisitions and disposals – Revenues generated by businesses and operations acquired or disposed in the current year or prior year are excluded from both periods. Additionally, where a business or operation was a customer prior to an acquisition, the related pre-acquisition revenues are excluded from the current and prior periods.
(3) Changes in license agreements where the Group operates as a licensee – Revenues generated from license agreements where the Group operates as a licensee that are new or terminated in the current year or prior year are excluded from both periods (except if the effects are already included in acquisitions and disposals). Additionally, revenues generated from license agreements where the Group operates as a licensee that experienced a structural change in the scope or perimeter in the current year or prior year are excluded from both periods, including changes to product categories, distribution channels or geographies of the underlying license agreements.
We believe the presentation of Organic Growth is useful to better understand and analyze the underlying change in the Group’s revenues from period to period on a consistent perimeter and constant currency basis.
Revenues on an Organic Growth basis are not a substitute for revenues on a current currency basis or any IFRS-related measures, however we believe that revenues excluding the effects of (a) foreign exchange, (b) acquisitions and disposals and (c) changes in license agreements where the Group operates as a licensee provide additional useful information to management and to investors in analyzing and evaluating our revenues and operating performance.
The tables below show a reconciliation of revenue growth to organic growth, excluding the effects of foreign exchange, acquisitions and disposals and changes in license agreements where the Group operates as a licensee, by segment, by product line, by distribution channel and by geography for the year ended December 31, 2023 compared to the year ended December 31, 2022 (FY 2023 vs FY 2022).
Segment
|
FY 2023 vs FY 2022 |
|||||||||||||
|
Revenues growth |
|
less Foreign exchange |
|
less Acquisitions and disposals |
|
less Changes in license agreements where the Group operates as a licensee |
|
Organic Growth |
|||||
Zegna |
12.4 |
% |
|
(1.4 |
%) |
|
— |
% |
|
(5.7 |
%) |
|
19.5 |
% |
Thom Browne |
14.9 |
% |
|
(3.4 |
%) |
|
0.5 |
% |
|
— |
% |
|
17.8 |
% |
Tom Ford Fashion(*) |
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|||||
Total for the Group |
27.6 |
% |
|
(2.1 |
%) |
|
16.2 |
% |
|
(5.8 |
%) |
|
19.3 |
% |
________________________________________
(*) Throughout this section considered not meaningful (n.m.) as the Group began operating the Tom Ford Fashion segment following the TFI Acquisition, which was completed on April 28, 2023, therefore there is no comparison figure for the period.
Product line
|
FY 2023 vs FY 2022 |
|||||||||||||
|
Revenues growth |
|
less Foreign exchange |
|
less Acquisitions and disposals |
|
less Changes in license agreements where the Group operates as a licensee |
|
Organic Growth |
|||||
ZEGNA branded products |
20.1 |
% |
|
(2.2 |
%) |
|
— |
% |
|
— |
% |
|
22.3 |
% |
Thom Browne |
14.7 |
% |
|
(3.3 |
%) |
|
0.5 |
% |
|
— |
% |
|
17.5 |
% |
TOM FORD FASHION |
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|||||
Textile |
10.4 |
% |
|
1.0 |
% |
|
(0.1 |
%) |
|
— |
% |
|
9.5 |
% |
Third Party Brands |
(74.1 |
%) |
|
0.1 |
% |
|
— |
% |
|
(56.8 |
%) |
|
(17.4 |
%) |
Other |
10.8 |
% |
|
(0.8 |
%) |
|
(3.8 |
%) |
|
— |
% |
|
15.4 |
% |
Total for the Group |
27.6 |
% |
|
(2.1 |
%) |
|
16.2 |
% |
|
(5.8 |
%) |
|
19.3 |
% |
Distribution channel
|
FY 2023 vs FY 2022 |
|||||||||||||
|
Revenues growth |
|
less Foreign exchange |
|
less Acquisitions and disposals |
|
less Changes in license agreements where the Group operates as a licensee |
|
Organic Growth |
|||||
Direct to Consumer (DTC) |
|
|
|
|
|
|
|
|
|
|||||
ZEGNA branded products |
22.4 |
% |
|
(3.0 |
%) |
|
— |
% |
|
— |
% |
|
25.4 |
% |
Thom Browne |
25.9 |
% |
|
(8.2 |
%) |
|
14.4 |
% |
|
— |
% |
|
19.7 |
% |
TOM FORD FASHION |
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|||||
Total Direct to Consumer (DTC) |
37.8 |
% |
|
(4.3 |
%) |
|
17.6 |
% |
|
— |
% |
|
24.5 |
% |
Wholesale |
|
|
|
|
|
|
|
|
|
|||||
ZEGNA branded products |
8.4 |
% |
|
1.4 |
% |
|
— |
% |
|
— |
% |
|
7.0 |
% |
Thom Browne |
5.8 |
% |
|
(0.2 |
%) |
|
(9.7 |
%) |
|
— |
% |
|
15.7 |
% |
TOM FORD FASHION |
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|||||
Third Party Brands and Textile |
(24.8 |
%) |
|
0.7 |
% |
|
(0.1 |
%) |
|
(31.2 |
%) |
|
5.8 |
% |
Total Wholesale |
11.3 |
% |
|
0.6 |
% |
|
14.9 |
% |
|
(13.8 |
%) |
|
9.6 |
% |
Other |
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|
n.m. |
|||||
Total for the Group |
27.6 |
% |
|
(2.1 |
%) |
|
16.2 |
% |
|
(5.8 |
%) |
|
19.3 |
% |
Geographical area
|
FY 2023 vs FY 2022 |
|||||||||||||
|
Revenues growth |
|
less Foreign exchange |
|
less Acquisitions and disposals |
|
less Changes in license agreements where the Group operates as a licensee |
|
Organic Growth |
|||||
|
|
|
|
|
||||||||||
EMEA (1) |
26.6 |
% |
|
(1.1 |
%) |
|
15.4 |
% |
|
(6.5 |
%) |
|
18.8 |
% |
of which |
25.6 |
% |
|
— |
% |
|
13.0 |
% |
|
(5.8 |
%) |
|
18.4 |
% |
of which |
30.1 |
% |
|
(1.6 |
%) |
|
30.7 |
% |
|
(13.7 |
%) |
|
14.7 |
% |
of which |
35.0 |
% |
|
(3.2 |
%) |
|
7.3 |
% |
|
— |
% |
|
30.9 |
% |
|
41.6 |
% |
|
1.2 |
% |
|
41.3 |
% |
|
(12.3 |
%) |
|
11.4 |
% |
of which |
42.3 |
% |
|
1.4 |
% |
|
42.6 |
% |
|
(12.1 |
%) |
|
10.4 |
% |
|
25.6 |
% |
|
9.4 |
% |
|
— |
% |
|
— |
% |
|
16.2 |
% |
APAC (4) |
22.2 |
% |
|
(5.1 |
%) |
|
5.5 |
% |
|
(1.9 |
%) |
|
23.7 |
% |
of which |
20.5 |
% |
|
(5.2 |
%) |
|
2.1 |
% |
|
(0.6 |
%) |
|
24.2 |
% |
of which |
29.9 |
% |
|
(9.9 |
%) |
|
15.9 |
% |
|
(4.4 |
%) |
|
28.3 |
% |
Other (5) |
(8.6 |
%) |
|
(0.3 |
%) |
|
17.3 |
% |
|
— |
% |
|
(25.6 |
%) |
Total for the Group |
27.6 |
% |
|
(2.1 |
%) |
|
16.2 |
% |
|
(5.8 |
%) |
|
19.3 |
% |
________________________________________
(1) EMEA includes
(2)
(3)
(4) APAC includes the
(5) Other revenues mainly include royalties.
***
Capital expenditure
Capital expenditure is defined as the sum of cash outflows that result in additions to property, plant and equipment and intangible assets.
The following table shows a breakdown of capital expenditure by category for the years ended December 31, 2023, 2022 and 2021:
|
For the years ended December 31, |
||||
(€ thousands) |
2023 |
|
2022 |
|
2021 |
Payments for property, plant and equipment |
57,034 |
|
49,114 |
|
79,699 |
Payments for intangible assets |
20,843 |
|
24,185 |
|
14,627 |
Capital expenditure |
77,877 |
|
73,299 |
|
94,326 |
***
View source version on businesswire.com: https://www.businesswire.com/news/home/20240405271564/en/
Investor Relations / Group Communications / Media
Paola Durante / Clementina Tito
ir@zegna.com / corporatepress@zegna.com
Source: Zegna Group
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