- First Half 2023 profit1of €52.1 million, profit margin of
5.8%, and Adjusted EBIT2 of €119.9 million demonstrate broad-based
strength.
- Adjusted EBIT Margin2 increased by 200 basis points to 13.3%
thanks to a remarkable improvement in ZEGNA store productivity, and
despite higher costs for growth.
- Group reaffirms its mid-term targets.
- Capital Markets Day to be held in New York on December 5,
2023.
Ermenegildo Zegna N.V. (NYSE:ZGN) (“Zegna Group,” “the Group,”
or “the Company”) today announced profit of €52.1 million and a
profit margin of 5.8% for the six months ended June 30, 2023, off
revenues of €903.1 million for the same period, as announced on
July 27, 2023. The Group recorded Adjusted EBIT of €119.9 million
for the six months ended June 30, 2023, an increase of 45.0%
year-over-year compared to €82.7 million in the first six months of
2022, and an Adjusted EBIT Margin of 13.3%, an increase of 200
basis points compared to 11.3% in the first six months of 2022.
Adjusted Profit for the six months ended June 30, 2023, was €54.9
million, an increase of €32.1 million, or 140.5%, compared to €22.8
million for the first six months of 2022.
Ermenegildo “Gildo” Zegna, Chairman and CEO, said: “Throughout
the first half of the year, Zegna Group’s unique capabilities have
been on full display, contributing to continued and strong revenue
growth. This is particularly evident in the outstanding performance
in the United States and EMEA, as we communicated back in July, as
well as in our significant progress towards growing profitability.
Our performance during this six-month period again confirms the
successful execution of our strategy, including our ZEGNA One Brand
strategy – which is driving remarkable improvements in productivity
across our direct-to-consumer stores, and our commitment to
continue investing in marketing and advertising, as well as the
expansion of distribution across all our brands. Our Made in Italy
Luxury Textile Laboratory Platform, which directly benefit our
group brands, continues to be an important part of our growth
blueprint.”
“As we progress in the second half of the year, we continue to
be extremely attentive on executing our plan, with a major focus on
working alongside the new leadership team at TOM FORD FASHION to
further develop and position the brand as an icon in ultra-luxury
while also supporting the further expansion of the Thom Browne
footprint. In this dynamic operating environment, we are encouraged
by the strong growth we are seeing in the United States and EMEA
but also acknowledge the impact of a milder recovery in Greater
China. I am proud of our exceptional leadership team, and we are
confident in the steps we have taken to position our portfolio of
brands in the more resilient ultra-luxury segment and to strengthen
the Group’s own retail network and achieve a more balanced
geographical presence. There is rich and exciting potential for the
Group’s three brands, and we look forward to continuing to execute
our strategy to enhance their performance even further.”
_________________________ 1 Profit refers
to profit of the Group (including profit attributable to
non-controlling interests).
2 Adjusted Profit, Adjusted EBIT, Adjusted
EBIT Margin, Adjusted Diluted Earnings per Share, and Net Financial
Indebtedness/(Cash Surplus) are non-IFRS financial measures. See
the Non-IFRS Financial Measures section starting on page 11 of this
press release for the definition of such non-IFRS measures and a
reconciliation of such non-IFRS measures to the most directly
comparable IFRS measures.
Key Financial Highlights for the First
Half of 2023
For the six months ended June
30,
Change
(€ thousands, except percentages and per
share data)
2023
2022
2023 vs 2022
%
Revenues
903,059
728,993
174,066
23.9%
Operating profit
116,509
81,367
35,142
43.2%
Profit
52,116
21,021
31,095
147.9%
Profit margin
5.8%
2.9%
Adjusted EBIT
119,904
82,678
37,226
45.0%
Adjusted EBIT Margin
13.3%
11.3%
Adjusted Profit
54,885
22,823
32,062
140.5%
Diluted earnings per share in €
0.19
0.06
Adjusted Diluted Earnings per Share in
€
0.20
0.07
Revenues by segment
Zegna
651,755
552,966
98,789
17.9%
Thom Browne
207,959
185,769
22,190
11.9%
Tom Ford Fashion
64,027
—
64,027
n.m.(*)
Eliminations
(20,682)
(9,742)
(10,940)
n.m.
Total Revenues
903,059
728,993
174,066
23.9%
Adjusted EBIT and Adjusted EBIT Margin by
segment
Zegna
100,498
67,997
32,501
47.8%
15.4%
12.3%
Thom Browne
31,521
31,562
(41)
(0.1%)
15.2%
17.0%
Tom Ford Fashion
3,676
—
3,676
n.m.
5.7%
n.m.
Corporate
(15,626)
(16,881)
1,255
(7.4%)
Eliminations
(165)
—
(165)
n.m.
Total Adjusted EBIT
119,904
82,678
37,226
45.0%
______________________________________
(*) Throughout this document “n.m.” means
not meaningful.
(€ thousands)
At June 30, 2023
At December 31, 2022
June 30, 2023 vs December 31,
2022
Net Financial Indebtedness/(Cash
Surplus)
17,033
(122,153)
139,186
Adjusted Profit, Adjusted EBIT, Adjusted EBIT Margin, Adjusted
Diluted Earnings per Share, and Net Financial Indebtedness/(Cash
Surplus) are non-IFRS financial measures. See the Non-IFRS
Financial Measures section starting on page 11 of this press
release for the definition of such non-IFRS measures and a
reconciliation of such non-IFRS measures to the most directly
comparable IFRS measures.
Review of First Half 2023
Financials3
Revenues
As reported on July 27, 2023, the Group recorded revenues of
€903.1 million for the first half of 2023, up 23.9% year-over-year
thanks to the strong double-digit growth seen in the Zegna (+17.9%,
or 23.8% organic growth) and Thom Browne (+11.9%, or 13.6% organic
growth) segments. These also include revenues of €64.0 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 can be found in the Semi-Annual Report for the six months
ended June 30, 2023, published today, and in the press release
issued on July 27, 2023.
Profit, Adjusted Profit and Profit Margin
The Group’s profit for the first half of 2023 was €52.1 million,
up 147.9% year-over-year from €21.0 million in the first half of
2022. Adjusted Profit for the first half of 2023 was €54.9 million,
up 140.5% year-over-year from €22.8 million in the first half of
2022. The Group recorded a profit margin of 5.8% for the first half
of 2023, compared to 2.9% for the first half of 2022. For
additional information regarding Adjusted Profit, which is a
non-IFRS financial measure, please see page 15.
Additional Financial Highlights
- Cost of Sales for the first half of 2023 was €323.2
million, up 15.4% year-over-year from €280.2 million in the second
half of 2022. The increase was due to the impact of Tom Ford
Fashion, including €3.6 million related to the partial effects of
the purchase price step-up of the fair value of the acquired TFI
inventory that was sold subsequent to the acquisition, as part of
the acquisition method of accounting. Higher sales volumes were
also a contributing factor to the cost of sales increase.
- Gross profit for the first half of 2023 was €579.8
million, up 29.2% year-over-year from €448.8 million in the second
half of 2022. As a percentage of revenues, gross profit increased
to 64.2% from 61.6% in the first half of 2022, mainly driven by a
higher proportion of direct-to-consumer (“DTC”) sales. Price
repositioning, the reduction of end-of-season sales as part of the
ZEGNA One Brand strategy, which started with the rollout of the
Fall/Winter 2022 collection in the prior year, the higher incidence
of Essentials products and the higher absorption of industrial
fixed costs also drove the increase in gross profit as a percentage
of revenues. In addition, gross profit in the first half of 2023
reflects costs of €3.6 million related to the partial effects of
the purchase price step-up of the fair value of the acquired TFI
inventory that was sold subsequent to the acquisition, as part of
the acquisition method of accounting.
- Selling, general, and administrative expenses for the
first half of 2023 were €415.8 million, compared with €332.9
million in the first half of 2022, up 24.9% year-over-year and
slightly higher as a percentage of sales at 46.0% compared with
45.7% for the six months ended June 30, 2022. Expenses related to
the Tom Ford International acquisition, variable rents, and higher
personnel costs to reinforce the Group’s corporate governance and
Thom Browne store expansions were the main drivers of the
increase.
- Marketing expenses for the first half of 2023 were €47.5
million, compared with €34.6 million for the first half of 2022, up
37.4% year-over-year and representing 5.3% of revenues, compared
with 4.7% in the first half of 2022, reflecting the continuation of
the Group’s strategy to increase marketing expenses announced its
Capital Markets Day in May 2022.
Adjusted EBIT and Adjusted EBIT Margin
The Group’s Adjusted EBIT for the first half of 2023 was €119.9
million, up 45.0% year-over-year from €82.7 million in the first
half of 2022. Adjusted EBIT Margin was 13.3%, up from 11.3% in
2022. The increase in Adjusted EBIT Margin was driven by the
execution of our ZEGNA One Brand strategy, which, among other
factors, drove an increase in store productivity, more than
offsetting costs to support the growth of the business, an increase
in costs to expand the Thom Browne DTC network and the effects of
integrating the Tom Ford Fashion business, for which we pay
royalties and which was affected by the amortization of the license
agreement.
_________________________ 3 Starting with
the six months ended June 30, 2023, the Group presents the
semi-annual consolidated statement of profit and loss by function.
For additional information see Note 2 — Basis of preparation,
within the Semi-Annual Condensed Consolidated Financial Statements
included within the Semi-Annual Report.
Adjusted EBIT and Adjusted EBIT Margin by Segment
Zegna: Adjusted EBIT for the Zegna segment was €100.5
million for the first half of 2023, a 47.8% year-over-year
increase, with an Adjusted EBIT Margin of 15.4%, compared to 12.3%
in the same period in 2022. The Adjusted EBIT increase reflected
the segment’s higher revenues, the pricing repositioning in line
with the ZEGNA One Brand strategy, an overall improvement in our
DTC store productivity, and higher absorption of industrial fixed
costs in the supply chain. This was partially offset by increases
in personnel costs as well as higher advertising and marketing
expenses, in line with the Group’s marketing strategy announced at
its Capital Markets Day in May 2022.
Thom Browne: Adjusted EBIT for the Thom Browne segment
was €31.5 million for the first half of 2023, substantially in line
with the same period in 2022. The segment’s Adjusted EBIT Margin
was 15.2%, compared to 17.0% for the same period in 2022. Despite
recording higher revenues, Adjusted EBIT Margin was restrained by
costs related to the DTC store network expansion, with thirteen net
store openings in the twelve months since June 30, 2022, which
brought on an increase in personnel. In addition, an increase in
advertising and marketing costs was in line with the Group’s
marketing strategy announced at its Capital Markets Day in May
2022, including costs for the debut of the Thom Browne Haute
Couture collection in Paris.
Tom Ford Fashion: The Tom Ford Fashion segment recorded
Adjusted EBIT of €3.7 million and Adjusted EBIT Margin of 5.7% for
the six months ended June 30, 2023. The Adjusted EBIT figure
reflects costs of €4.4 million relating to the preliminary purchase
price allocation process resulting from the TFI Acquisition,
primarily related to inventory as noted above.
Corporate costs
Corporate costs amounted to €15.6 million in the first half of
2023 compared with €16.9 million in the first half of 2022.
Net Financial Indebtedness/(Cash Surplus), Trade Working
Capital, and Capital Expenditure
Net Financial Indebtedness was €17.0 million as of June 30,
2023, compared to a Cash Surplus of €122.2 million at December 31,
2022, and €103.1 million Net Financial Indebtedness at June 30,
2022, primarily reflecting the impact of the TFI Acquisition and
capital expenditures, mainly to develop the Group’s store
network.
Trade Working Capital was €465.4 million as of June 30, 2023,
compared to €317.1 million at December 31, 2022, and €331.0 million
at June 30, 2022, primarily as a result of higher inventories and
trade receivables, reflecting the overall increase in operations to
support the growth in sales and production volumes. The increase
also reflects the consolidation of TFI’s Trade Working Capital of
€85.9 million at June 30, 2023, including €3.6 million related to
the partial effects of the purchase price step-up of the fair value
of the acquired TFI inventory that was sold subsequent to the
acquisition, as part of the acquisition method of accounting. As
previously communicated, the increase in inventories also reflects
the buildup of inventory of the Essentials collections, in line
with the ZEGNA One Brand strategy, which is expected to normalize
in the second half of 2023.
Fiscal Year 2023 and Medium-Term
Outlook
On May 17, 2022, at its first Capital Markets Day, the Group
announced its financial goals for the medium term, defined as the
end of fiscal year 2025. Within that time frame the Group is
anticipating revenues to exceed €2 billion and Adjusted EBIT to
reach at least 15% of revenues, excluding the Tom Ford Fashion
segment. The Group’s revenues for the first half of 2023, reported
on July 27, 2023, showed that the Group was on this trajectory, and
the full 1H 2023 results comfortably confirm that. The medium-term
targets assume no further future escalation of the war in Ukraine,
no significant macroeconomic or financial market deterioration, no
further disruption linked to the COVID-19 pandemic in the Greater
China Region (GCR) or elsewhere, and no other unforeseen
events.
Capital Markets Day
The Group will host a Capital Markets Day on December 5, 2023,
at New York Stock Exchange (NYSE) in New York, where it expects to
unveil its updated medium- to long-term financial goals, including
the Tom Ford Fashion segment.
Conference Call
As previously announced, at 7a.m. ET (1p.m. CET), the Group
plans to host a webcast and conference call. A live webcast of the
conference call will also be available on the Company’s website at
ir.zegnagroup.com. To participate in the call, please dial:
United States (Local): +1 646 307 1963
Italy (Local): +39 06 9480 0113 United Kingdom (Local): +44
20 3481 4247
Access Code: 6262821
An online archive of the broadcast will be available on the
website shortly after the live call and will be available for
twelve months.
***
Next Scheduled
Announcement
The next scheduled announcement will be on October 24, 2023, in
connection with the release of the Group’s 3Q 2023 revenues. 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 leading global luxury group. The Group is the
owner of the world-renowned ZEGNA and Thom Browne brands, and
operates TOM FORD FASHION through an exclusive long-term license
agreement with The Estée Lauder Companies Inc. The Group also
manufactures and distributes the highest quality fabrics and
textiles through its Luxury Textile Laboratory Platform. At the
Group’s core is a uniquely vertically integrated supply chain that
brings together the best of Italian fine craftsmanship.
Responsibility towards people, community and the natural world has
been at the heart of the Ermenegildo Zegna Group’s belief since its
founding. At the end of 2022, Ermenegildo Zegna Group had more than
6,000 employees and for the year ended December 31, 2022 had
revenues of approximately €1.5 billion.
***
Forward Looking Statements
This communication, including the section “Outlook”, contains
forward-looking statements that are based on beliefs and
assumptions and on information currently available to the Company.
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” 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. Although
the Company believes that it has a reasonable basis for each
forward-looking statement contained in this communication, the
Company cautions you that these statements are based on a
combination of facts and factors currently known and projections of
the future, which are inherently uncertain. In addition, risks and
uncertainties are described in the Company’s filings with the SEC.
These filings may identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
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 Zegna as of the date of this
communication. Subsequent events and developments may cause that
view to change. However, while Zegna 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.
***
First Half 2023 - Group Revenues
Tables
Group Revenues by
Segment
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
H1 2022
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
Q2 2022
Reported Revenues
Constant Currency
Organic Growth
Revenues
903,059
728,993
23.9%
24.7%
21.5%
474,747
351,414
35.1 %
37.4 %
24.5 %
Zegna
651,755
552,966
17.9%
18.4%
23.8%
332,431
269,443
23.4 %
25.2 %
28.2 %
Thom Browne
207,959
185,769
11.9%
13.6%
13.6%
94,708
87,641
8.1 %
10.8 %
10.8 %
Tom Ford Fashion
64,027
—
n.m.
n.m.
n.m.
64,027
—
n.m.
n.m.
n.m.
Eliminations
(20,682)
(9,742)
n.m.
n.m.
n.m.
(16,419)
(5,670)
n.m.
n.m.
n.m.
Group Revenues by Product
Line
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
H1 2022
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
Q2 2022
Reported Revenues
Constant Currency
Organic Growth
Total revenues
903,059
728,993
23.9%
24.7%
21.5%
474,747
351,414
35.1%
37.4%
24.5%
Zegna branded products
541,319
425,252
27.3%
28.4%
28.4%
269,430
201,273
33.9%
37.0%
37.0%
Thom Browne
206,951
185,166
11.8%
13.4%
13.4%
94,399
87,229
8.2%
11.0%
11.0%
Tom Ford Fashion
64,015
—
n.m.
n.m.
n.m.
64,015
—
n.m.
n.m.
n.m.
Textile
73,072
68,968
6.0%
5.2%
5.3%
39,254
38,724
1.4%
0.3%
0.6%
Third Party Brands
15,477
47,341
(67.3%)
(68.1%)
(4.4%)
6,567
22,939
(71.4%)
(71.8%)
(30.7%)
Other
2,225
2,266
(1.8%)
(2.3%)
(2.1%)
1,082
1,249
(13.4%)
(13.1%)
(12.7%)
Group Revenues by Sales
Channel
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
% of Revenues
H1 2022
% of Revenues
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
% of Revenues
Q2 2022
% of Revenues
Reported Revenues
Constant Currency
Organic Growth
Revenues
903,059
100.0%
728,993
100.0%
23.9%
24.7%
21.5%
474,747
100.0%
351,414
100.0%
35.1%
37.4%
24.5%
Direct to
Consumer (DTC)
Zegna branded products
465,710
361,850
28.7%
30.3%
30.3%
236,114
177,941
32.7%
36.2%
36.2%
Thom Browne
82,924
66,174
25.3%
30.6%
30.6%
40,075
31,993
25.3%
33.7%
33.7%
Tom Ford Fashion
34,751
—
—%
n.m.
n.m.
34,751
—
—%
n.m.
n.m.
Total Direct to Consumer (DTC)
583,385
64.6%
428,024
58.7%
36.3%
38.6%
30.4%
310,940
65.5%
209,934
59.7%
48.1%
52.8%
35.8%
Wholesale
Zegna branded products
75,609
63,402
19.3%
17.9%
17.9%
33,316
23,332
42.8%
43.0%
43.0%
Thom Browne
124,027
118,992
4.2%
4.2%
4.2%
54,324
55,236
(1.7%)
(1.5%)
(1.5%)
Tom Ford Fashion
29,264
—
n.m.
n.m.
n.m.
29,264
—
n.m.
n.m.
n.m.
Third Party Brands and Textile
88,549
116,309
(23.9%)
(24.9%)
4.2%
45,821
61,663
(25.7%)
(26.7%)
(3.8%)
Total Wholesale
317,449
35.2%
298,703
41.0%
6.3%
5.5%
7.6%
162,725
34.3%
140,231
39.9%
16.0%
15.6%
6.0%
Other
2,225
0.2%
2,266
0.3%
n.m.
n.m.
n.m.
1,082
0.2%
1,249
0.4%
n.m.
n.m.
n.m.
Group Revenues by Geographical
Area
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
H1 2022
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
Q2 2022
Reported Revenues
Constant Currency
Organic Growth
Total revenues
903,059
728,993
23.9%
24.7%
21.5%
474,747
351,414
35.1%
37.4%
24.5%
EMEA (1)
322,680
260,627
23.8%
24.2%
21.4%
172,572
126,171
36.8%
37.9%
24.5%
of which Italy
151,464
125,996
20.2%
20.0%
16.8%
77,030
61,905
24.4%
24.1%
14.3%
of which UK
28,823
23,544
22.4%
24.2%
21.5%
18,442
12,574
46.7%
48.0%
24.3%
of which UAE
31,906
21,745
46.7%
45.1%
44.0%
15,506
10,377
49.4%
53.1%
50.8%
North America (2)
174,376
135,275
28.9%
25.7%
16.3%
108,742
73,472
48.0%
46.6%
16.2%
of which United States
156,747
124,291
26.1%
22.9%
12.5%
98,712
67,358
46.5%
45.3%
13.9%
Latin America (3)
15,736
12,525
25.6%
16.5%
16.5%
8,963
6,860
30.7%
23.9%
23.9%
APAC (4)
389,025
318,825
22.0%
25.4%
24.3%
183,772
144,009
27.6%
33.3%
28.7%
of which Greater China Region
306,835
247,193
24.1%
27.7%
27.2%
142,309
105,213
35.3%
42.0%
40.0%
of which Japan
39,597
30,240
30.9%
37.8%
32.6%
20,942
16,101
30.1%
36.8%
23.9%
Other (5)
1,242
1,741
(28.7%)
(28.9%)
(33.6%)
698
902
(22.6%)
(22.7%)
(31.9%)
_______________________
(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 as of June 30, 2023
As of June 30, 2023
As of December 31,
2022
As of June 30, 2022
Stores
Zegna
Thom Browne
Tom Ford Fashion
Group
Zegna
Thom Browne
Group
Zegna
Thom Browne
Group
EMEA (2)
69
10
4
83
65
10
75
69
10
79
Americas (3)
55
7
11
73
53
7
60
51
5
56
APAC
122
49
36
207
121
46
167
122
38
160
Total Direct to Consumer (DTC)
246
66
51
363
239
63
302
242
53
295
EMEA (2)
59
7
12
78
57
6
63
85
5
90
Americas (3)
63
3
51
117
64
4
68
68
3
71
APAC
35
33
7
75
35
32
67
33
30
63
Total Wholesale
157
43
70
270
156
42
198
186
38
224
Total
403
109
121
633
395
105
500
428
91
519
_________________________
(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
June 30, 2023 or at December 31, 2022 (14 Wholesale stores in EMEA
at June 30, 2022). Although some stores may still be operating at
June 30, 2023, they have not been supplied by Zegna since February
2022 and have therefore been excluded from Zegna's store count.
(3)
Americas include North America and Latin
America.
Ermenegildo Zegna N.V.
SEMI-ANNUAL CONDENSED
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
for the six months ended June
30, 2023 and 2023
(Unaudited)
For the six months ended June
30,
(€ thousands)
2023
2022(*)
Revenues
903,059
728,993
Cost of sales
(323,228)
(280,182)
Gross profit
579,831
448,811
Selling, general and administrative
expenses
(415,792)
(332,854)
Marketing expenses
(47,530)
(34,590)
Operating profit
116,509
81,367
Financial income
15,601
15,901
Financial expenses
(44,592)
(41,965)
Foreign exchange losses
(7,003)
(9,893)
Result from investments accounted for
using the equity method
(2,237)
2,661
Profit before taxes
78,278
48,071
Income taxes
(26,162)
(27,050)
Profit
52,116
21,021
Attributable to:
Shareholders of the Parent Company
45,967
14,038
Non-controlling interests
6,149
6,983
Basic earnings per share in €
0.19
0.06
Diluted earnings per share in €
0.19
0.06
________________________
(*)
Starting with the six months ended June
30, 2023, the Group presents the semi-annual condensed 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 is consistent with international
practice. In order to conform to this new presentation, the
information for the six months ended June 30, 2022 has been
reclassified compared to what was previously presented by the
Group.
Ermenegildo Zegna N.V.
SEMI-ANNUAL CONDENSED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at June 30, 2023 and at
December 31, 2022
(Unaudited)
(€ thousands)
At June 30, 2023
At December 31, 2022
Assets
Non-current assets
Intangible assets
543,896
455,908
Property, plant and equipment
148,420
126,139
Right-of-use assets
528,747
375,508
Investments accounted for using the equity
method
12,743
22,648
Deferred tax assets
139,351
124,627
Other non-current financial assets
37,614
36,240
Total non-current assets
1,410,771
1,141,070
Current assets
Inventories
545,176
410,851
Trade receivables
217,208
177,213
Derivative financial instruments
17,985
22,454
Tax receivables
17,734
15,350
Other current financial assets
109,918
320,894
Other current assets
99,680
84,574
Cash and cash equivalents
255,040
254,321
Total current assets
1,262,741
1,285,657
Total assets
2,673,512
2,426,727
Liabilities and Equity
Equity attributable to shareholders of the
Parent Company
761,953
678,949
Equity attributable to non-controlling
interests
52,966
53,372
Total equity
814,919
732,321
Non-current liabilities
Non-current borrowings
112,747
184,880
Other non-current financial
liabilities
151,712
178,793
Non-current lease liabilities
463,552
332,050
Non-current provisions for risks and
charges
16,621
19,581
Employee benefits
28,134
51,584
Deferred tax liabilities
63,907
60,534
Total non-current liabilities
836,673
827,422
Current liabilities
Current borrowings
283,077
286,175
Other current financial liabilities
23,373
37,258
Current lease liabilities
121,761
111,457
Derivative financial instruments
2,186
2,362
Current provisions for risks and
charges
15,458
13,969
Trade payables and customer advances
296,965
270,936
Tax liabilities
46,928
25,999
Other current liabilities
232,172
118,828
Total current liabilities
1,021,920
866,984
Total equity and liabilities
2,673,512
2,426,727
Ermenegildo Zegna N.V.
SEMI-ANNUAL CONDENSED
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended June
30, 2023 and 2022
(Unaudited)
For the six months ended June
30,
(€ thousands)
2023
2022
Operating activities
Profit
52,116
21,021
Income taxes
26,162
27,050
Depreciation, amortization and impairment
of assets
86,983
88,204
Financial income
(15,601)
(15,901)
Financial expenses
44,592
41,965
Foreign exchange losses
7,003
9,893
Write downs and other provisions
962
654
Write downs of the provision for obsolete
inventory
19,292
10,856
Result from investments accounted for
using the equity method
2,237
(2,661)
Gains arising from the sale of fixed
assets
—
(1,511)
Other non-cash expenses, net
18,839
11,776
Change in inventories
(79,454)
(51,806)
Change in trade receivables
(26,851)
(3,341)
Change in trade payables including
customer advances
3,710
(2,014)
Change in other operating assets and
liabilities
2,870
(69,396)
Interest paid
(13,480)
(10,974)
Income taxes paid
(21,797)
(25,440)
Net cash flows from operating
activities
107,583
28,375
Investing activities
Payments for property plant and
equipment
(25,699)
(15,824)
Proceeds from disposals of property plant
and equipment
—
3,253
Payments for intangible assets
(8,801)
(12,715)
Proceeds from disposals of non-current
financial assets
—
796
Payments for purchases of non-current
financial assets
(585)
—
Proceeds from disposals of current
financial assets and derivative instruments
221,869
31,040
Payments for acquisitions of current
financial assets and derivative instruments
(6,023)
(21,204)
Business combinations, net of cash
acquired
(108,575)
—
Acquisition of investments accounted for
using the equity method
(11,228)
—
Net cash flows from/(used in) investing
activities
60,958
(14,654)
Financing activities
Proceeds from borrowings
65,000
—
Repayments of borrowings
(173,407)
(76,687)
Repayments of other non-current financial
liabilities
—
(3,919)
Payments of lease liabilities
(59,115)
(64,641)
Warrant redemption
4,409
—
Capital contribution
—
10,923
Sales of shares held in treasury
3,654
3,390
Dividends paid to non-controlling
interests
(6,068)
(4,147)
Net cash flows used in financing
activities
(165,527)
(135,081)
Effects of exchange rate changes on cash
and cash equivalents
(2,295)
8,452
Net increase/(decrease) in cash and
cash equivalents
719
(112,908)
Cash and cash equivalents at the
beginning of the period
254,321
459,791
Cash and cash equivalents at the end of
the period
255,040
346,883
Non-IFRS Financial Measures
Zegna’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, adjusted earnings before interest,
taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted
Profit, Adjusted Diluted Earnings per Share, Net Financial
Indebtedness/(Cash Surplus), Trade Working Capital, revenues on a
constant currency basis (Constant Currency) and revenues on an
organic growth basis (Organic Growth). Zegna’s management believes
that these non-IFRS financial measures provide useful and relevant
information regarding Zegna’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 Zegna 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 Zegna operates, the financial measures that
Zegna 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. An explanation of the relevance of each of
the non-IFRS financial measures, a reconciliation of the non-IFRS
financial measures to the most directly comparable measures
calculated and presented in accordance with IFRS and a discussion
of their limitations 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, costs related to the Business Combination,
severance indemnities and provisions for severance expenses, legal
costs for trademark disputes, special donations for social
responsibility, net income related to lease agreements and net
impairment of leased and owned stores.
Adjusted EBIT Margin is defined as Adjusted EBIT divided by
revenues of the applicable period.
Zegna’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 Zegna’s underlying
operating performance. Zegna’s management believes these non-IFRS
financial measures are useful because they exclude items that
management believes are not indicative of Zegna’s underlying
operating performance and allow management to view operating
trends, perform analytical comparisons and benchmark performance
between periods and among segments. Zegna’s management also
believes that Adjusted EBIT and Adjusted EBIT Margin are useful for
investors and analysts to better understand how management assesses
Zegna’s underlying operating performance on a consistent basis and
to compare Zegna’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 Zegna’s operating results.
The following table presents a reconciliation of Profit to
Adjusted EBIT and the calculation of the profit margin and the
Adjusted EBIT Margin for the six months ended June 30, 2023 and
2022:
For the six months ended June
30,
(€ thousands, except percentages)
2023
2022
Profit
52,116
21,021
Income taxes
26,162
27,050
Financial income
(15,601)
(15,901)
Financial expenses
44,592
41,965
Foreign exchange losses
7,003
9,893
Result from investments accounted for
using the equity method
2,237
(2,661)
Transaction costs related to acquisitions
(1)
4,975
—
Costs related to the Business Combination
(2)
1,059
1,090
Severance indemnities and provisions for
severance expenses (3)
738
912
Legal costs for trademark disputes (4)
649
—
Special donations for social
responsibility (5)
100
1,000
Net income related to lease agreements
(6)
(4,126)
(5,000)
Net impairment of leased and owned stores
(7)
—
3,309
Adjusted EBIT
119,904
82,678
Revenues
903,059
728,993
Profit margin (Profit /
Revenues)
5.8%
2.9%
Adjusted EBIT Margin (Adjusted EBIT /
Revenues)
13.3%
11.3%
_________________________
(1)
Relates to transaction costs of €4,975
thousand for the six months ended June 30, 2023 for consultancy and
legal fees related to the TFI Acquisition and the acquisition of a
25% in Norda.
(2)
Costs related to the Business Combination
of €1,059 thousand and €1,090 thousand for the six months ended
June 30, 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.
(3)
Relates to severance indemnities of €738
thousand and €912 thousand for the six months ended June 30, 2023
and 2022, respectively.
(4)
Relates to legal costs of €649 thousand
for the six months ended June 30, 2023 in connection with a legal
dispute between Adidas AG (“adidas”) and Thom Browne, primarily in
relation to the use of trademarks.
(5)
Relates to donations to support
initiatives related to humanitarian emergencies in Turkey for the
six months ended June 30, 2023 (€100 thousand) and in Ukraine for
the six months ended June 30, 2022 (€1,000 thousand).
(6)
Net income related to lease agreements of
€4,126 thousand for the six months ended June 30, 2023 relates to
the derecognition of lease liabilities following a change in terms
of a lease agreement in Hong Kong and for the six months ended June
30, 2022 relates to proceeds of €5,000 thousand received from a new
tenant in order for Zegna to withdraw from an existing lease
agreement of a commercial property.
(7)
Net impairment of leased and owned stores
for the six months ended June 30, 2022 includes impairment of
€2,764 thousand for right-of-use assets, €530 thousand for
property, plant and equipment and €15 thousand for intangible
assets.
Adjusted EBITDA
Adjusted EBITDA is defined as profit or loss before income taxes
plus financial income, financial expenses, foreign exchange losses,
depreciation, amortization and impairment of assets 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, costs related to the Business Combination, severance
indemnities and provisions for severance expenses, legal costs for
trademark disputes, special donations for social responsibility and
net income related to lease agreements.
Zegna’s management uses Adjusted EBITDA to understand and
evaluate Zegna’s underlying operating performance. Zegna’s
management believes this non-IFRS financial measure is useful
because it excludes items that management believes are not
indicative of Zegna’s underlying operating performance and allows
management to view operating trends, perform analytical comparisons
and benchmark performance between periods. Zegna’s management also
believes that Adjusted EBITDA is useful for investors and analysts
to better understand how management assesses Zegna’s underlying
operating performance on a consistent basis and to compare Zegna’s
performance with that of other companies. Accordingly, management
believes that Adjusted EBITDA provides useful information to third
party stakeholders in understanding and evaluating Zegna’s
operating results.
The following table presents a reconciliation of Profit to
Adjusted EBITDA for the six months ended June 30, 2023 and
2022:
For the six months ended June
30,
(€ thousands)
2023
2022
Profit
52,116
21,021
Income taxes
26,162
27,050
Financial income
(15,601)
(15,901)
Financial expenses
44,592
41,965
Foreign exchange losses
7,003
9,893
Depreciation, amortization and impairment
of assets
86,983
88,204
Result from investments accounted for
using the equity method
2,237
(2,661)
Transaction costs related to acquisitions
(1)
4,975
—
Costs related to the Business Combination
(2)
1,059
1,090
Severance indemnities and provisions for
severance expenses (3)
738
912
Legal costs for trademark disputes (4)
649
—
Special donations for social
responsibility (5)
100
1,000
Net income related to lease agreements
(6)
(4,126)
(5,000)
Adjusted EBITDA
206,887
167,573
_________________________
(1)
Relates to transaction costs of €4,975
thousand for the six months ended June 30, 2023 for consultancy and
legal fees related to the TFI Acquisition and the acquisition of a
25% in Norda.
(2)
Costs related to the Business Combination
of €1,059 thousand and €1,090 thousand for the six months ended
June 30, 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.
(3)
Relates to severance indemnities of €738
thousand and €912 thousand for the six months ended June 30, 2023
and 2022, respectively.
(4)
Relates to legal costs of €649 thousand
for the six months ended June 30, 2023 in connection with a legal
dispute between adidas and Thom Browne, primarily in relation to
the use of trademarks.
(5)
Relates to donations to support
initiatives related to humanitarian emergencies in Turkey for the
six months ended June 30, 2023 (€100 thousand) and in Ukraine for
the six months ended June 30, 2022 (€1,000 thousand).
(6)
Net income related to lease agreements of
€4,126 thousand for the six months ended June 30, 2023 relates to
the derecognition of lease liabilities following a change in terms
of a lease agreement in Hong Kong and for the six months ended June
30, 2022 relates to proceeds of €5,000 thousand received from a new
tenant in order for Zegna to withdraw from an existing lease
agreement of a commercial property.
Adjusted Profit
Adjusted Profit is defined as Profit adjusted for income and
costs (net of related tax effects) which are significant in nature
and that management considers not reflective of underlying
activities, including, for one or all of the periods presented and
as further described below, transaction costs related to
acquisitions, costs related to the Business Combination, severance
indemnities and provisions for severance expenses, legal costs for
trademark disputes, special donations for social responsibility,
net income related to lease agreements and net impairment of leased
and owned stores, as well as the tax effects of the adjusting
items.
Zegna’s management uses Adjusted Profit to understand and
evaluate Zegna’s underlying performance. Zegna’s management
believes this non-IFRS financial measure is useful because it
excludes items that management believes are not indicative of
Zegna’s underlying performance and allows management to view
performance trends, perform analytical comparisons and benchmark
performance between periods. Zegna’s management also believes that
Adjusted Profit is useful for investors and analysts to better
understand how management assesses Zegna’s underlying performance
on a consistent basis and to compare Zegna’s performance with that
of other companies. Accordingly, management believes that Adjusted
Profit provides useful information to third party stakeholders in
understanding and evaluating Zegna’s results.
The following table presents a reconciliation of Profit to
Adjusted Profit for the six months ended June 30, 2023 and
2022:
For the six months ended June
30,
(€ thousands)
2023
2022
Profit
52,116
21,021
Transaction costs related to acquisitions
(1)
4,975
—
Costs related to the Business Combination
(2)
1,059
1,090
Severance indemnities and provisions for
severance expenses (3)
738
912
Legal costs for trademark disputes (4)
649
—
Special donations for social
responsibility (5)
100
1,000
Net income related to lease agreements
(6)
(4,126)
(5,000)
Net impairment of leased and owned stores
(7)
—
3,309
Tax effects on adjusting items (8)
(626)
491
Adjusted Profit
54,885
22,823
_________________________
(1)
Relates to transaction costs of €4,975
thousand for the six months ended June 30, 2023 for consultancy and
legal fees related to the TFI Acquisition and the acquisition of a
25% in Norda.
(2)
Costs related to the Business Combination
of €1,059 thousand and €1,090 thousand for the six months ended
June 30, 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.
(3)
Relates to severance indemnities of €738
thousand and €912 thousand for the six months ended June 30, 2023
and 2022, respectively.
(4)
Relates to legal costs of €649 thousand
for the six months ended June 30, 2023 in connection with a legal
dispute between adidas and Thom Browne, primarily in relation to
the use of trademarks.
(5)
Relates to donations to support
initiatives related to humanitarian emergencies in Turkey for the
six months ended June 30, 2023 (€100 thousand) and in Ukraine for
the six months ended June 30, 2022 (€1,000 thousand).
(6)
Net income related to lease agreements of
€4,126 thousand for the six months ended June 30, 2023 relates to
the derecognition of lease liabilities following a change in terms
of a lease agreement in Hong Kong and for the six months ended June
30, 2022 relates to proceeds of €5,000 thousand received from a new
tenant in order for Zegna to withdraw from an existing lease
agreement of a commercial property.
(7)
Net impairment of leased and owned stores
for the six months ended June 30, 2022 includes impairment of
€2,764 thousand for right-of-use assets, €530 thousand for
property, plant and equipment and €15 thousand for intangible
assets.
(8)
Includes the tax effects of the
aforementioned adjustments, calculated as the current and deferred
tax effects of pre-tax items excluded from Adjusted Profit using
the statutory tax rates related to the jurisdiction that was
impacted by the adjustment, after considering if such items are
deductible or taxable, the impact of any temporary differences and
the ultimate recoverability of deferred tax assets, if
applicable.
Adjusted Diluted Earnings per Share
Adjusted Diluted Earnings per Share is defined as diluted
earnings per share adjusted for income and costs (net of related
tax effects) which are significant in nature and that management
considers not reflective of underlying activities, including, for
one or all of the periods presented and as further described below,
transaction costs related to acquisitions, costs related to the
Business Combination, severance indemnities and provisions for
severance expenses, legal costs for trademark disputes, special
donations for social responsibility, net income related to lease
agreements and net impairment of leased and owned stores, as well
as the tax effects of the adjusting items and excluding the impact
of non-controlling interests on the adjusting items.
Zegna’s management uses Adjusted Diluted Earnings per Share to
understand and evaluate Zegna’s underlying performance. Zegna’s
management believes this non-IFRS financial measure is useful
because it excludes items that it does not believe are indicative
of its underlying performance and allows it to view operating
trends, perform analytical comparisons and benchmark performance
between periods. Accordingly, management believes that Adjusted
Diluted Earnings per Share provides useful information to third
party stakeholders in understanding and evaluating Zegna’s
operating results.
The following table presents a reconciliation of Profit to
Adjusted Diluted Earnings per Share for the six months ended June
30, 2023 and 2022:
For the six months ended June
30,
(€ thousands)
2023
2022
Profit
52,116
21,021
Transaction costs related to acquisitions
(1)
4,975
—
Costs related to the Business Combination
(2)
1,059
1,090
Severance indemnities and provisions for
severance expenses (3)
738
912
Legal costs for trademark disputes (4)
649
—
Special donations for social
responsibility (5)
100
1,000
Net income related to lease agreements
(6)
(4,126)
(5,000)
Net impairment of leased and owned stores
(7)
—
3,309
Tax effects on adjusting items (8)
(626)
491
Adjusted Profit
54,885
22,823
Impact of non-controlling interests
(9)
6,231
6,990
Adjusted Profit attributable to
shareholders of the Parent Company
48,654
15,833
Weighted average number of shares for
diluted earnings per share
246,313,241
238,930,441
Diluted earnings per share in €
0.19
0.06
Adjusted Diluted Earnings per Share in
€
0.20
0.07
_________________________
(1)
Relates to transaction costs of €4,975
thousand for the six months ended June 30, 2023 for consultancy and
legal fees related to the TFI Acquisition and the acquisition of a
25% in Norda.
(2)
Costs related to the Business Combination
of €1,059 thousand and €1,090 thousand for the six months ended
June 30, 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.
(3)
Relates to severance indemnities of €738
thousand and €912 thousand for the six months ended June 30, 2023
and 2022, respectively.
(4)
Relates to legal costs of €649 thousand
for the six months ended June 30, 2023 in connection with a legal
dispute between adidas and Thom Browne, primarily in relation to
the use of trademarks.
(5)
Relates to donations to support
initiatives related to humanitarian emergencies in Turkey for the
six months ended June 30, 2023 (€100 thousand) and in Ukraine for
the six months ended June 30, 2022 (€1,000 thousand).
(6)
Net income related to lease agreements of
€4,126 thousand for the six months ended June 30, 2023 relates to
the derecognition of lease liabilities following a change in terms
of a lease agreement in Hong Kong and for the six months ended June
30, 2022 relates to proceeds of €5,000 thousand received from a new
tenant in order for Zegna to withdraw from an existing lease
agreement of a commercial property.
(7)
Net impairment of leased and owned stores
for the six months ended June 30, 2022 includes impairment of
€2,764 thousand for right-of-use assets, €530 thousand for
property, plant and equipment and €15 thousand for intangible
assets.
(8)
Includes the tax effects of the
aforementioned adjustments, calculated as the current and deferred
tax effects of pre-tax items excluded from Adjusted Diluted
Earnings per Share using the statutory tax rates related to the
jurisdiction that was impacted by the adjustment, after considering
if such items are deductible or taxable, the impact of any
temporary differences and the ultimate recoverability of deferred
tax assets, if applicable.
(9)
Represents the Profit attributable to
non-controlling interests plus the impact of non-controlling
interests on the adjusting items.
Net Financial Indebtedness/(Cash Surplus)
Net Financial Indebtedness/(Cash Surplus) is defined as the sum
of financial borrowings (current and non-current), derivative
financial instrument liabilities, loans and certain other financial
liabilities (recorded within other non-current financial
liabilities in the semi-annual condensed consolidated statement of
financial position), net of cash and cash equivalents, derivative
financial instrument assets, securities and financial receivables
(recorded within other current financial assets in the semi-annual
condensed consolidated statement of financial position).
Zegna’s management believes that Net Financial
Indebtedness/(Cash Surplus) is useful to monitor the level of net
liquidity and financial resources available to Zegna. Zegna’s
management believes this non-IFRS financial measure aids
management, investors and analysts to analyze Zegna’s financial
position and financial resources available, and to compare Zegna’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 June 30, 2023 and at December 31,
2022:
(€ thousands)
At June 30, 2023
At December 31, 2022
Non-current borrowings
112,747
184,880
Current borrowings
283,077
286,175
Derivative financial instruments —
Liabilities
2,186
2,362
Total borrowings, other financial
liabilities and derivatives
398,010
473,417
Cash and cash equivalents
(255,040)
(254,321)
Derivative financial instruments —
Assets
(17,985)
(22,454)
Other current financial assets(1)
(107,952)
(318,795)
Total cash and cash equivalents, other
current financial assets and derivatives
(380,977)
(595,570)
Net Financial Indebtedness/(Cash
Surplus)
17,033
(122,153)
_________________________
(1)
Includes (i) the Group’s investments in
securities amounting to €105,752 thousand and €316,595 thousand at
June 30, 2023 and December 31, 2022, respectively, and (ii) a
financial receivable from an associated company of €2,200 thousand
at both June 30, 2023 and December 31, 2022.
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.
Zegna’s management uses Trade Working Capital to understand and
evaluate Zegna’s liquidity generation/absorption. Zegna’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 June 30, 2023 and at December 31, 2022:
(€ thousands)
At June 30, 2023
At December 31, 2022
Current assets
1,262,741
1,285,657
Current liabilities
(1,021,920)
(866,984)
Working capital
240,821
418,673
Less:
Derivative financial instruments
17,985
22,454
Tax receivables
17,734
15,350
Other current financial assets
109,918
320,894
Other current assets
99,680
84,574
Cash and cash equivalents
255,040
254,321
Current borrowings
(283,077)
(286,175)
Current lease liabilities
(121,761)
(111,457)
Derivative financial liabilities
(2,186)
(2,362)
Other current financial liabilities
(23,373)
(37,258)
Current provisions for risks and
charges
(15,458)
(13,969)
Tax liabilities
(46,928)
(25,999)
Other current liabilities
(232,172)
(118,828)
Trade Working Capital
465,419
317,128
of which trade receivables
217,208
177,213
of which inventories
545,176
410,851
of which trade payables and customer
advances
(296,965)
(270,936)
***
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 Zegna 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 Zegna
operates as a licensee – Revenues generated from license agreements
where Zegna 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 Zegna 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, sales 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 Zegna 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
Zegna operates as a licensee, by segment, by product line, by sales
channel and by geography:
- for the six months ended June 30, 2023 compared to the six
months ended June 30, 2022 (H1 2023 vs H1 2022);
- for the three months ended March 31, 2023 compared to the three
months ended March 31, 2022 (Q1 2023 vs Q1 2022); and
- for the three months ended June 30, 2023 compared to the three
months ended June 30, 2022 (Q2 2023 vs Q2 2022).
Segment
H1 2023 vs H1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna
17.9 %
(0.5) %
1.4 %
(6.8) %
23.8 %
Thom Browne
11.9 %
(1.7) %
— %
— %
13.6 %
Tom Ford Fashion(*)
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
23.9 %
(0.8) %
8.8 %
(5.6) %
21.5 %
_________________________
(*)
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.
Q1 2023 vs Q1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna
12.6 %
0.7 %
— %
(7.8) %
19.7 %
Thom Browne
15.4 %
(0.7) %
— %
— %
16.1 %
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
13.4%
0.3%
—%
(5.8%)
18.9%
Q2 2023 vs Q2 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna
23.4%
(1.8%)
2.7%
(5.7%)
28.2%
Thom Browne
8.1%
(2.7%)
—%
—%
10.8%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
35.1%
(2.3%)
18.4%
(5.5%)
24.5%
Product line
H1 2023 vs H1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna branded products
27.3%
(1.1%)
—%
—%
28.4%
Thom Browne
11.8%
(1.6%)
—%
—%
13.4%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
6.0%
0.8%
(0.1%)
—%
5.3%
Third Party Brands
(67.3%)
0.8%
(0.1%)
(63.6%)
(4.4%)
Other
(1.8%)
0.5%
(0.2%)
—%
(2.1%)
Total for Zegna Group
23.9%
(0.8%)
8.8%
(5.6%)
21.5%
Q1 2023 vs Q1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna branded products
21.4%
0.6%
—%
—%
20.8%
Thom Browne
14.9%
(0.7%)
—%
—%
15.6%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
11.8%
0.3%
—%
—%
11.5%
Third Party Brands
(63.5%)
1.1%
—%
(129.0%)
64.4%
Other
12.4%
1.8%
—%
—%
10.6%
Total for Zegna Group
13.4%
0.3%
—%
(5.8%)
18.9%
Q2 2023 vs Q2 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna branded products
33.9%
(3.1%)
—%
—%
37.0%
Thom Browne
8.2%
(2.8%)
—%
—%
11.0%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
1.4%
1.1%
(0.3%)
—%
0.6%
Third Party Brands
(71.4%)
0.4%
—%
(41.1%)
(30.7%)
Other
(13.4%)
(0.3%)
(0.4%)
—%
(12.7%)
Total for Zegna Group
35.1%
(2.3%)
18.4%
(5.5%)
24.5%
Sales channel
H1 2023 vs H1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Direct to
Consumer (DTC)
Zegna branded products
28.7%
(1.6%)
—%
—%
30.3%
Thom Browne
25.3%
(5.3%)
—%
—%
30.6%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total Direct to Consumer (DTC)
36.3%
(2.3%)
8.2%
—%
30.4%
Wholesale
Zegna branded products
19.3%
1.4%
—%
—%
17.9%
Thom Browne
4.2%
—%
—%
—%
4.2%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Third Party Brands and Textile
(23.9%)
1.0%
(0.1%)
(29.0%)
4.2%
Total Wholesale
6.3%
0.8%
9.7%
(11.8%)
7.6%
Other
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
23.9%
(0.8%)
8.8%
(5.6%)
21.5%
Q1 2023 vs Q1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Direct to
Consumer (DTC)
Zegna branded products
24.8%
0.2%
—%
—%
24.6%
Thom Browne
25.4%
(2.4%)
—%
—%
27.8%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total Direct to Consumer (DTC)
24.9%
(0.2%)
—%
—%
25.1%
Wholesale
Zegna branded products
5.5%
1.8%
—%
—%
3.7%
Thom Browne
9.3%
0.1%
—%
—%
9.2%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Third Party Brands and Textile
(21.8%)
1.1%
—%
(38.2%)
15.3%
Total Wholesale
(2.4%)
0.9%
—%
(12.3%)
9.0%
Other
12.4%
1.8%
—%
—%
10.6%
Total for Zegna Group
13.4%
0.3%
—%
(5.8%)
18.9%
Q2 2023 vs Q2 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Direct to
Consumer (DTC)
Zegna branded products
32.7%
(3.5%)
—%
—%
36.2%
Thom Browne
25.3%
(8.4%)
—%
—%
33.7%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total Direct to Consumer (DTC)
48.1%
(4.7%)
17.0%
—%
35.8%
Wholesale
Zegna branded products
42.8%
(0.2%)
—%
—%
43.0%
Thom Browne
(1.7%)
(0.2%)
—%
—%
(1.5%)
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Third Party Brands and Textile
(25.7%)
1.0%
(0.2%)
(22.7%)
(3.8%)
Total Wholesale
16.0%
0.4%
20.8%
(11.2%)
6.0%
Other
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
35.1%
(2.3%)
18.4%
(5.5%)
24.5%
Geographical area
H1 2023 vs H1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
EMEA (1)
23.8 %
(0.4) %
8.7 %
(5.9) %
21.4 %
of which Italy
20.2 %
0.2 %
6.3 %
(3.1) %
16.8 %
of which UK
22.4 %
(1.8) %
20.7 %
(18.0) %
21.5 %
of which UAE
46.7 %
1.6 %
— %
1.1 %
44.0 %
North America (2)
28.9 %
3.2 %
23.3 %
(13.9) %
16.3 %
of which United States
26.1 %
3.2 %
23.3 %
(12.9) %
12.5 %
Latin America (3)
25.6 %
9.1 %
— %
— %
16.5 %
APAC (4)
22.0 %
(3.4) %
2.9 %
(1.8) %
24.3 %
of which Greater China Region
24.1 %
(3.6) %
1.0 %
(0.5) %
27.2 %
of which Japan
30.9 %
(6.9) %
9.1 %
(3.9) %
32.6 %
Other (5)
(28.7) %
0.2 %
4.7 %
— %
(33.6) %
Total for Zegna Group
23.9 %
(0.8) %
8.8 %
(5.6) %
21.5 %
Q1 2023 vs Q1 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
EMEA (1)
11.6 %
— %
— %
(7.0) %
18.6 %
of which Italy
16.1 %
0.2 %
— %
(3.4) %
19.3 %
of which UK
(5.4) %
(2.0) %
— %
(21.4) %
18.0 %
of which UAE
44.3 %
6.2 %
— %
— %
38.1 %
North America (2)
6.2 %
4.4 %
— %
(14.5) %
16.3 %
of which United States
1.9 %
4.3 %
— %
(13.3) %
10.9 %
Latin America (3)
19.6 %
11.5 %
— %
— %
8.1 %
APAC (4)
17.4 %
(1.5) %
— %
(1.7) %
20.6 %
of which Greater China Region
15.9 %
(1.3) %
— %
(0.6) %
17.8 %
of which Japan
31.9 %
(6.9) %
— %
(4.0) %
42.8 %
Other (5)
(35.2) %
0.3 %
— %
— %
(35.5) %
Total for Zegna Group
13.4 %
0.3 %
— %
(5.8) %
18.9 %
Q2 2023 vs Q2 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
EMEA (1)
36.8 %
(1.1) %
18.1 %
(4.7) %
24.5 %
of which Italy
24.4 %
0.3 %
12.7 %
(2.9) %
14.3 %
of which UK
46.7 %
(1.3) %
38.6 %
(14.9) %
24.3 %
of which UAE
49.4 %
(3.7) %
— %
2.3 %
50.8 %
North America (2)
48.0 %
1.4 %
43.7 %
(13.3) %
16.2 %
of which United States
46.5 %
1.2 %
44.0 %
(12.6) %
13.9 %
Latin America (3)
30.7 %
6.8 %
— %
— %
23.9 %
APAC (4)
27.6 %
(5.7) %
6.3 %
(1.7) %
28.7 %
of which Greater China Region
35.3 %
(6.7) %
2.5 %
(0.5) %
40.0 %
of which Japan
30.1 %
(6.7) %
16.7 %
(3.8) %
23.9 %
Other (5)
(22.6) %
0.1 %
9.2 %
— %
(31.9) %
Total for Zegna Group
35.1 %
(2.3) %
18.4 %
(5.5) %
24.5 %
_________________________
(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 each of the six months ended June 30, 2023 and
2022.
For the six months ended June
30,
(€ thousands)
2023
2022
Payments for property, plant and
equipment
25,699
15,824
Payments for intangible assets
8,801
12,715
Capital expenditure
34,500
28,539
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230913135111/en/
Investor Relations / Group Communications / Media
Francesca Di Pasquantonio / Clementina Tito ir@zegna.com /
corporatepress@zegna.com
Ermenegildo Zegna NV (NYSE:ZGN)
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Ermenegildo Zegna NV (NYSE:ZGN)
過去 株価チャート
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