- Revenues of €1,904.5 million, up 27.6% from FY 2022 (+19.3%
organic growth1)
- Gross profit of €1,224.3 million with a gross profit margin
of 64.3% (62.2% in FY 2022)
- Profit of €135.7 million, up 107.8% from FY 2022 with a
profit margin of 7.1% (4.4% in FY 2022)
- Adjusted EBIT1 of €220.2 million with an Adjusted EBIT
Margin of 11.6% (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
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 €135.7 million for FY
2023, up 107.8% from €65.3 million in FY 2022, and a profit margin
of 7.1% compared to 4.4% in FY 2022.
Adjusted EBIT rose to €220.2 million with an Adjusted EBIT
Margin of 11.6%. Adjusted EBIT for both the Zegna and Thom Browne
segments improved significantly compared to FY 2022. In FY 2023,
Adjusted EBIT for the Zegna segment reached €193.5 million, up
36.7% compared to FY 2022, while Adjusted EBIT for the Thom Browne
segment rose to €59.0 million, +22.7% compared to FY 2022.
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 €136 million. We have also fulfilled our 2023
sustainability commitments including those focused on traceability,
diversity and inclusion, and in renewable energy adoption. We are
on track with the integration of the TOM FORD FASHION business,
which is enriching our unique proposition in luxury glamour.
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 Parma, Italy, expected to be
completed by the end of 2026.
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 €1,904.5 million, +
27.6% YoY, or +19.3% organic growth, driven by excellent results in
the Zegna segment (+12.4% YoY, +19.5% organic growth) and Thom
Browne segment (+14.9% YoY, +17.8% organic growth). FY 2023
revenues include €235.5 million contributed by the Tom Ford Fashion
segment following the acquisition of Tom Ford International (“TFI”)
completed on April 28, 2023 (the “TFI Acquisition”).
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 €1,224.3 million compared to
€928.0 million in FY 2022 (gross profit margin of 64.3% compared to
62.2% in the prior year). This improvement was driven by three main
factors: a) channel mix, given the increasing proportion of
direct-to-consumer (“DTC”) revenues, b) lower incidence of end-of
season sales, in particular for the ZEGNA brand, as part of both
the One Brand Strategy and the increasing penetration of Essentials
(continuative products) and c) the higher absorption of industrial
fixed costs. Gross profit in FY 2023 also includes the negative
impact of €15.6 million on cost of sales, from the purchase price
allocation (“PPA”) related to the TFI Acquisition.
Selling, general, and administrative expenses in FY 2023 were
€901.4 million (47.3% of revenues) compared to €695.1 million
(46.6% of revenues) in FY 2022. The higher incidence on revenues
also reflects the royalty costs in connection with the license
related to the TOM FORD FASHION business, which was partially
offset by improved retail store productivity.
Marketing expenses in FY2023 were €114.8 million (6.0% of
revenues) compared to €85.1 million (5.7% of revenues) in FY 2022,
+34.8% YoY, in line with the Group’s strategy to invest in its
brands to enhance equity value.
As a result of the above, the Group reported an operating profit
of €208.1 million, +40.9% YoY.
Group’s profit in FY 2023 was €135.7 million, up 107.8% YoY from
€65.3 million in FY 2022. The Group recorded a profit margin of
7.1% in FY 2023 compared to 4.4% in 2022.
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 €220.2 million compared to €157.7
million in FY 2022 (Adjusted EBIT Margin of 11.6% compared to 10.6%
in the prior year). The increase in Adjusted EBIT was largely
driven by an improved gross profit margin which more than offset
the higher incidence on revenues of marketing costs, the
investments made to strengthen the organization and the integration
cost of the TOM FORD FASHION business.
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
€1,322.0 million2, +12.4% YoY (+19.5% organic growth).
2 Before inter-segment eliminations.
Adjusted EBIT for the Zegna segment was €193.5 million in FY
2023, +36.7% YoY, with an Adjusted EBIT Margin of 14.6% compared to
12.0% in FY 2022. This significant improvement was primarily driven
by improved productivity of the ZEGNA DTC stores and higher
absorption of industrial fixed costs, partially offset by a planned
increase in marketing expenses to continue to boost the brand’s
equity value.
Thom Browne segment
In FY 2023, the Thom Browne segment generated revenues of €380.3
million, +14.9% YoY (+17.8% organic growth).
Adjusted EBIT for the Thom Browne segment was €59.0 million in
FY 2023, with an Adjusted EBIT Margin of 15.5% compared to 14.5% in
FY 2022, largely driven by improved gross profit margin.
Tom Ford Fashion segment
In FY 2023, the Tom Ford Fashion segment generated revenues of
€235.5 million and a negative Adjusted EBIT of €1.7 million, which
is primarily attributable to the €15.6 million one-off charges
related to the PPA, classified within cost of sales. Adjusted EBIT
for the Tom Ford Fashion segment was also impacted by the
PPA-related amortization of the TFI license agreement with the
Estée Lauder Company Inc. (ELC) (approximately €3 million on a
yearly basis) and the impact of royalty costs.
Corporate costs
Corporate costs amounted to €30.4 million in FY 2023 compared to
€31.9 million in FY 2022.
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 €77.9 million with an
incidence on revenues of 4.1% compared to 4.9% in FY 2022. Capital
expenditure in FY 2023 was mainly related to the expansion of the
DTC stores’ network for all brands and, in particular, for the
ZEGNA brand.
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 €448.9 million at December 31, 2023,
compared to €317.1 million at December 31, 2022, with a 23.6%
incidence on revenues in FY 2023 (from 21.2% in the prior year).
This increase is the result of higher inventories to support
business growth and incorporates the effects of the newly acquired
TOM FORD FASHION business, which contributed to revenues for eight
months of 2023 only starting from the completion of the TFI
Acquisition on April 28, 2023.
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 €10.8 million at December 31,
2023, compared to a Cash Surplus of €122.2 million at December 31,
2022, reflecting the net cash outflows from the investments in
subsidiaries and associates (mainly related to the TFI Acquisition)
and the dividend distribution, partially offset by positive Free
Cash Flow generation.
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 €71.8
million compared to a negative Free Cash Flow of €48.5 million in
the prior year, primarily driven by an increase in operating profit
excluding non-cash items.
***
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:
United States (Local): +1 646 787 9445 United
Kingdom (Local): +44 20 39362999 Italy (Local): +39 06 94501060
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, Italy, the Ermenegildo Zegna Group
(NYSE:ZGN) is a global luxury company with a leading position in
the high-end menswear business. Through its three complementary
brands, the Group reaches a wide range of communities and market
segments across the high-end fashion industry, from ZEGNA’s
timeless luxury to the modern tailoring of Thom Browne, to luxury
glamour with TOM FORD FASHION. The Ermenegildo Zegna Group is
internationally recognized for its unique Filiera, owned and
controlled by the Group, which is made up of the finest Italian
textile producers fully integrated with unique luxury manufacturing
capabilities, to ensure superior excellence, quality and innovation
capacity. The Ermenegildo Zegna Group has more than 7,000 employees
and recorded revenues of €1.9 billion in 2023.
***
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 Ukraine and sanctions imposed onto Russia;
the occurrence of acts of terrorism or similar events, conflicts,
civil unrest or situations of political instability; developments
in Greater China and other growth and emerging markets; our ability
to implement our strategy; recent and potential future
acquisitions; disruption to our manufacturing and logistics
facilities; risks related to the sale of our products through our
direct-to-consumer channel, as well as through points of sale
operated by third parties; our dependence on our local partners to
sell our products in certain markets; fluctuations in the price or
quality of, or disruptions in the availability of, raw materials;
our ability to negotiate, maintain or renew our license or
co-branding agreements with high end third party brands; tourist
traffic and demand; our dependence on certain key senior personnel
as well as skilled personnel; our ability to protect our
intellectual property rights; disruption in our information
technology, including as a result of cybercrime; the theft or
unauthorized use of personal information of our customers,
employees or other parties; fluctuations in currency exchange rates
or interest rates; the level of competition in the industry in
which we operate; global economic conditions and macro events,
including inflation; failures to comply with applicable laws and
regulations; climate change and other environmental impacts and our
ability to meet our customers’ and other stakeholders’ expectations
on environment, social and governance matters; the enactment of tax
reforms or other changes in tax laws and regulations; and other
risks and uncertainties, including those described in our filings
with the SEC.
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 Italy
281,793
224,342
158,722
57,451
25.6
%
25.6
%
18.4
%
65,620
41.3
%
41.8
%
42.1
%
of which UK
70,191
53,970
37,682
16,221
30.1
%
31.7
%
14.7
%
16,288
43.2
%
42.2
%
51.6
%
of which UAE
68,729
50,926
32,944
17,803
35.0
%
38.2
%
30.9
%
17,982
54.6
%
38.4
%
39.6
%
North America (2)
417,352
294,686
191,283
122,666
41.6
%
40.4
%
11.4
%
103,403
54.1
%
43.2
%
41.4
%
of which United States
384,544
270,312
176,059
114,232
42.3
%
40.9
%
10.4
%
94,253
53.5
%
42.1
%
39.9
%
Latin America (3)
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
China Region
595,515
494,110
588,876
101,405
20.5
%
25.7
%
24.2
%
(94,766
)
(16.1
%)
(20.6
%)
(20.6
%)
of which Japan
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 Europe, the Middle East and Africa.
(2) North America includes the United States of America and
Canada.
(3) Latin America includes Mexico, Brazil and other Central and
South American countries.
(4) APAC includes the Greater China Region, Japan, South Korea,
Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New
Zealand, India and other Southeast Asian countries.
(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
Americas
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
Americas (3)
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 Russia at December 31, 2023
or at December 31, 2022. Although some stores may still be
operating at December 31, 2023, they have not been supplied by the
Group since February 2022 and have therefore been excluded from the
Group’s store count.
(3) Americas include North America and Latin America.
***
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 €6,001 thousand and €2,289
thousand in 2023 and 2022, respectively, primarily for consultancy
and legal fees related to the TFI Acquisition and, for 2023 only,
also to the acquisition of the Thom Browne business in South Korea
and the acquisition of a 25% interest in Norda. These amounts are
recorded within “selling, general and administrative expenses” in
the consolidated statement of profit and loss.
(2) Relates to severance indemnities of €4,002 thousand, €2,199
thousand and €8,996 thousand in 2023, 2022 and 2021, respectively.
These amounts are recorded within “selling, general and
administrative expenses” in the consolidated statement of profit
and loss.
(3) Relates to legal costs of €2,168 thousand and €7,532
thousand in 2023 and 2022, respectively, in connection with a legal
dispute between adidas and Thom Browne, primarily in relation to
the use of trademarks. These amounts are recorded within “selling,
general and administrative expenses” in the consolidated statement
of profit and loss.
(4) Costs related to the Business Combination of €2,140 thousand
and €2,137 thousand in 2023 and 2022, respectively, relate to the
grant of equity awards to management in 2021 with vesting subject
to the public listing of the Company’s shares and certain other
performance and/or service conditions. Costs related to the
Business Combination in 2021 include:
(a) €114,963 thousand relating to share-based
payments for listing services recognized as the excess of the fair
value of the Company ordinary shares issued as part of the Business
Combination and the fair value of IIAC’s identifiable net assets
acquired.
(b) €37,906 thousand for the issuance of
5,031,250 the Company ordinary shares to the holders of IIAC class
B shares to be held in escrow. The release of these shares from
escrow is subject to achievement of certain targets within a
seven-year period.
(c) €34,092 thousand for transaction costs
related to the Business Combination incurred by the Group,
including costs for bank services, legal advisors and other
consultancy fees.
(d) €10,916 thousand for the Zegna family’s
grant of a one-time €1,500 gift to each employee of the Group as
result of the Company’s listing on NYSE completed on December 20,
2021.
(e) €5,380 thousand relating to grant of
performance share units, which each represent the right to receive
one ordinary share of the Company, to the Group’s Chief Executive
Officer, other directors of the Group, key executives with
strategic responsibilities and other employees of the Group, all
subject to certain vesting conditions.
(f) €1,236 thousand related to the fair value
of private warrants issued, pursuant to the Business Combination,
to certain non-executive directors of the Group.
(g) €566 thousand related to the write-off of
non-refundable prepaid premiums for directors’ and officers’
insurance.
These amounts are recorded within (i)
“selling, general and administrative expenses” for €2,034 thousand,
€2,099 thousand and €200,961 thousand in 2023, 2022 and 2021,
respectively, (ii) “cost of sales” for €106 thousand, €38 thousand
and €4,086 thousand in 2023, 2022 and 2021, respectively, and (iii)
“marketing expenses” for €12 thousand in 2021.
(5) Net impairment of leased and owned stores for 2023, 2022,
2021 includes (i) impairment of €832 thousand, €2,369 thousand and
€6,486 thousand related to right-of-use assets, respectively, (ii)
impairment of €915 thousand, reversals of impairment of €756
thousand and impairment of €2,167 thousand related to property,
plant and equipment, respectively, and (iii) impairment of €35
thousand, €26 thousand and €39 thousand related to intangible
assets, respectively. These amounts are recorded within “selling,
general and administrative expenses” in the consolidated statement
of profit and loss.
(6) Relates to donations to support initiatives related to
humanitarian emergencies in Turkey in 2023 (€100 thousand) and in
Ukraine in 2022 (€1,000 thousand). These amounts are recorded
within “selling, general and administrative expenses” in the
consolidated statement of profit and loss.
(7) Net (income)/costs related to lease agreements include:
(a) in 2023: €4,129 thousand for the
derecognition of lease liabilities following a change in terms of a
lease agreement in Hong Kong;
(b) in 2022: (i) proceeds of €6,500 thousand
received from new tenants in order for the Group to withdraw from
existing lease agreements of commercial properties and (ii) €950
thousand for reversals of previously recognized provisions in
respect of a legal claim related to a lease agreement in the US,
partially offset by (ii) €606 thousand for losses related to a
sublease agreement in the US;
(c) in 2021: (i) €12,192 thousand of
provisions relating to a lease agreement in the US following an
unfavorable legal claim judgment against the Group, (ii) €1,492
thousand of legal expenses related to a lease agreement in Italy
and (iii) €1,829 thousand in accrued property taxes related to a
lease agreement in the UK.
These amounts are recorded within “selling,
general and administrative expenses” in the consolidated statement
of profit and loss.
(8) Other adjustments in 2021 include €6,006 thousand related to
losses incurred by Agnona subsequent to the Group’s sale of a
majority stake in Agnona in January 2021, for which the Group was
required to compensate the company in accordance with the terms of
the related sale agreement, as well as €144 thousand relating to
the write down of the Group’s remaining 30% stake in Agnona,
partially offset by other income of €1,266 thousand relating to the
sale of rights to build or develop airspace above a building in the
United States. These amounts are recorded within “selling, general
and administrative expenses” in the consolidated statement of
profit and loss.
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 €85,320 thousand and €316,595 thousand at December 31, 2023 and
2022, respectively, and (ii) a financial receivable from Filati
Biagioli Modesto S.p.A., an associated company of the Group, of
€2,200 thousand at December 31, 2022. In July 2023, the receivable
was converted to equity as a capital contribution.
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 Italy
25.6
%
—
%
13.0
%
(5.8
%)
18.4
%
of which UK
30.1
%
(1.6
%)
30.7
%
(13.7
%)
14.7
%
of which UAE
35.0
%
(3.2
%)
7.3
%
—
%
30.9
%
North America (2)
41.6
%
1.2
%
41.3
%
(12.3
%)
11.4
%
of which United States
42.3
%
1.4
%
42.6
%
(12.1
%)
10.4
%
Latin America (3)
25.6
%
9.4
%
—
%
—
%
16.2
%
APAC (4)
22.2
%
(5.1
%)
5.5
%
(1.9
%)
23.7
%
of which Greater China Region
20.5
%
(5.2
%)
2.1
%
(0.6
%)
24.2
%
of which Japan
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 Europe, the Middle East and Africa.
(2) North America includes the United States of America and
Canada.
(3) Latin America includes Mexico, Brazil and other Central and
South American countries.
(4) APAC includes the Greater China Region, Japan, South Korea,
Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New
Zealand, India and other Southeast Asian countries.
(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
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