Ermenegildo Zegna N.v. · NYSE:ZGN
Ermenegildo Zegna — H1 2022 Earnings Presentation
39 slides from Ermenegildo Zegna's earnings presentation, Aug 26, 2022
Slide 1: 1H 2022 Results
1H 2022 RESULTS August 26, 2022 1
Slide 2: Disclaimer
DISCLAIMER 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 Profit/(Loss), Adjusted Basic Earnin
Slide 3: Chairman & CEO quote on Real Madrid partnership
“I am particularly excited about our recently announced partnership with football club Real Madrid – one of the most recognizable brands in the world with a loyal and enthusiastic fanbase. This partnership will be a tremendous amplifier of our One Brand strategy” 3 Gildo Zegna, Chairman & CEO
Slide 4: 1H 2022 Financial Highlights
1H 2022 FINANCIAL HIGHLIGHTS REVENUES ADJUSTED EBIT* AND ADJUSTED EBIT € millions MARGIN* € millions and % of revenues 1H22 729 1H22 82.7 11.3% 1H21 603 1H21 66.8 11.1% ADJUSTED BASIC EARNINGS PER NET FINANCIAL INDEBTEDNESS/ € € millions SHARE* (CASH SURPLUS)* 1H22 0.07 30-Jun-22 (103) 1H21 0.11 31-
Slide 5: A Leading, Modern and Integrated Group
A LEADING, MODERN AND INTEGRATED GROUP ZEGNASEGMENT THOM BROWNE SEGMENT ZEGNABRAND:LEADER IN GLOBAL ONE-OF-A-KIND MADE IN ITALY DISTINCTIVE MODERN LUXURY LUXURYMENSWEAR* LUXURY TEXTILE LABORATORY PLATFORM NOTE: All numbers in this page are for the Financial year ended 31 December 2021 * Refers to Ze
Slide 6: 1H 2022: Our Road Key Highlights
1H 2022: “OUR ROAD” KEY HIGHLIGHTS ZEGNA: OUR ROAD TO ICONICITY THOM BROWNE: OUR ROAD TO 2X • Launch of Zegna One Brand strategy in July • A unique, iconic brand with museum-like design appeal • Store rebranding: 130 stores with the new logo since launch of the • Stepping up visibility One Brand str
Slide 7: 1H 2022: Our Road Key Highlights
1H 2022: “OUR ROAD” KEY HIGHLIGHTS MADE IN ITALY TEXTILE PLATFORM: OUR ESG: OUR ROAD TO SUSTAINABLE ROAD TO EXCELLENCE AND TRACEABILITY GROWTH • One-of-a-kind craftsmanship, servicing our own brands • Sustainability strategy disclosed May 17 at our Capital Markets and major global luxury players Day
Slide 8: 1H 2022: Our Road Key Highlights
1H 2022: “OUR ROAD” KEY HIGHLIGHTS CONTINUED EXECUTION OF “OUR ROAD” STRATEGY - ON TRACK TO ACHIEVE MID-TERM TARGETS Diversified global presence and broad-based strength • Excellent 1H despite a still disrupted global environment ~2.0 • Global revenues, ex-GCR*, showed an acceleration in 2Q, with a
Slide 9: Key Strategic Priorities
KEY STRATEGIC PRIORITIES ZEGNA THOM BROWNE • Continue to execute on One Brand strategy • Continue to execute on the growth roadmap • Further capitalize on luxury leisurewear repositioning, distinctive • Double number of (end) clients while increasing engagement with strengths and building blocks str
Slide 10: 1H 2022: Financial Highlights
1H 2022: FINANCIAL HIGHLIGHTS STRATEGIC PROGRESS DELIVERED STRONG FINANCIAL RESULTS Zegna segment +19%, driven by organic growth 1H22 Thom Browne segment +30%, with mix of new space and organic growth Revenues World ex-GCR Group revenues +53% in 1H22 vs 1H21 with an acceleration in 2Q: +59% vs
Slide 11: Group Revenues
1H 2022 GROUP REVENUES € millions 729.0 • Revenues of €729.0 million, +21% y-o-y • Continued growth momentum for both Zegna and Thom Browne • US, EMEA and other regions more than offset impact of Covid-related measures in GCR • Revenues acceleration (excluding GCR) in 2Q 2022 at 59% from 48% in 1Q 2
Slide 12: Group Revenues by Segment
1H 2022 GROUP REVENUES BY SEGMENT Δ% vs 1H (Euro thousands in Actual FX) 1H 2022 1H 2021 2021 Revenues 728,993 603,340 +20.8% • Zegna segment 552,966 465,899 +18.7% • Thom Browne segment 185,769 142,553 +30.3% • Eliminations (9,742) (5,112) n.m. Both segments growing double-digit in 1H22 • Zegna Seg
Slide 13: Group Revenues by Geography
1H 2022 GROUP REVENUES BY GEOGRAPHY (Euro thousands in Actual FX) 1Q 2022 1Q 2021 Δ% vs 1Q 2021 2Q 2022 2Q 2021 Δ% vs 2Q 2021 1H 2022 1H 2021 Δ% vs 1H 2021 Revenues 377,579 301,194 +25.4% 351,414 302,146 +16.3% 728,993 603,340 +20.8% EMEA 1 134,456 96,812 +38.9% 126,171 85,719 +47.2% - 260,627 182,5
Slide 14: Group Revenues by Product Line
1H 2022 GROUP REVENUES BY PRODUCT LINE (Euro thousands in Δ% vs 1Q Δ% vs 2Q Δ% vs 1H 1Q 2022 1Q 2021 2Q 2022 2Q 2021 1H 2022 1H 2021 Actual FX) 2021 2021 2021 All product lines grew by double digits Revenues 377,579 301,194 +25.4% 351,414 302,146 +16.3% 728,993 603,340 +20.8% • Zegna branded product
Slide 15: Group Revenues by Channel
1H 2022 GROUP REVENUES BY CHANNEL GCR Retail Skew Impact, all other markets strong Δ% vs 1Q Δ% vs 2Q Δ% vs 1H (Euro thousands in Actual FX) 1Q 2022 1Q 2021 2Q 2022 2Q 2021 1H 2022 1H 2021 2021 2021 2021 • DTC +13% in 1H 2022, 2Q at +4%: Revenues 377,579 301,194 +25.4% 351,414 302,146 +16.3% 728,993
Slide 16: Group Profitability
1H 2022 GROUP PROFITABILITY Sound profitability despite increase in costs • Adjusted EBIT of €82.7 million, +24% y-o-y • Adjusted EBIT margin of 11.3% vs. 11.1% in 1H 2021 • Top line growth • Positive pricing and richer product content • Higher sell-through, up double-digits (ex-GCR) • Scale effect
Slide 17: Results – Zegna Segment
1H 2022 RESULTS – ZEGNA SEGMENT 17
Slide 18: Results – Zegna Segment
1H 2022 RESULTS – ZEGNA SEGMENT For the six months ended June 30, Increase/(Decrease) € million 2022 2021 2022 vs 2021 % Revenues 553.0 465.9 87.1 18.7% Adjusted EBIT 51.1 39.0 12.1 31.1% Adjusted EBIT Margin 9.2% 8.4% • Strong revenue growth in Zegna segment, +19% y-o-y • Adjusted EBIT at €51.1 mil
Slide 19: Results – Thom Browne Segment
1H 2022 RESULTS – THOM BROWNE SEGMENT 19
Slide 20: Results – Thom Browne Segment
1H 2022 RESULTS – THOM BROWNE SEGMENT For the six months ended June 30, Increase/(Decrease) € million 2022 2021 2022 vs 2021 % Revenues 185.8 142.6 43.2 30.3% Adjusted EBIT 31.6 27.8 3.7 13.4% Adjusted EBIT Margin 17.0% 19.5% • 1H 2022 revenues at €185.8 million, +30% y-o-y • Adjusted EBIT €31.6 mil
Slide 21: Results – Group
1H 2022 RESULTS – GROUP 21
Slide 22: Results – Summary Figures
1H 2022 RESULTS – SUMMARY FIGURES (Euro Million in Actual Fx) 1H22 1H21 Δ € vs 1H21 Δ % vs 1H21 Revenues 729.0 603.3 +125.7 +21% - Zegna segment 553.0 465.9 +87.1 +19% - Thom Browne segment 185.8 142.6 +43.2 +30% Reported Profit 21.0 32.2 (11.2) (35%) Basic earnings per share in Euro 0.06 0.14 (0.08
Slide 23: Results – Income Statement Highlights
1H 2022 RESULTS – INCOME STATEMENT HIGHLIGHTS Consolidated Statement of Profit & Loss (reported) (Euro Million in Actual Fx) 1H22 1H21 Δ€ vs 1H21 Δ% vs 1H21 Revenues 729.0 603.3 +125.7 +21% Costs growing slower than revenues, Other income 6.0 5.4 +0.7 +12% of which Cost of raw materials and consumab
Slide 24: Net Financial Indebtedness/(Cash Surplus)
NET FINANCIAL INDEBTEDNESS/(CASH SURPLUS) Lower Cash Surplus vs December 2021 – Trade Working Capital: temporary impact on inventories from One Brand FW22 July launch and GCR – Real Estate Settlements: reflect discipline and focus on store footprint optimization – Dividends paid to minorities Un
Slide 25: Capex & Trade Working Capital
CAPEX & TRADE WORKING CAPITAL Investing in Retail, IT and Industrial Platform One brand impact on TWC Capital Expenditure (€ millions) 4% TWC=€331M 23.3 % 21.3 % 4% TWC=€276M 15.5 13.6 13 11 1H22 % of revenues 1H21 % of last 12 months rolling revenues 30-Jun-2022 31-Dec-2022 Store Network Other • Pl
Slide 26: FY 2022 Guidance Raised
FY 2022 GUIDANCE RAISED • Monitoring and adapting to complex environment • Geopolitical turmoil and resurgence of Covid-19 pandemic, especially in China • Dynamic retail, solid order collection and positive pricing for FW22 and SS23 • FY22 Revenues Guidance raised: from low-teens to mid-teens revenu
Slide 27: FY 2022 Guidance Raised
FY 2022 GUIDANCE RAISED BY GEOGRAPHY BY PRODUCT LINE BY CHANNEL REVENUES ADJUSTED EBIT Upgraded from Low-teens to Mid-teens Growth From Improvement to Solid Improvement Compared to 2021 27
Slide 28: Ermenegildo Zegna Group
Ermenegildo Zegna Group
Slide 29: Appendix
Ermenegildo Zegna Group ~” APPENDIX we
Slide 30: Monobrand Store Network
MONOBRAND1 STORE NETWORK Thom Browne increasing DTC points-of-sale, Zegna streamlining its footprint as of June 30th , 2022 as of December 31 st, 2021 as of June 30th , 2021 THOM THOM THOM # Stores ZEGNA GROUP ZEGNA GROUP ZEGNA GROUP BROWNE BROWNE BROWNE EMEA 69 10 79 69 9 78 70 7 77 Americas 51 5 5
Slide 31: Non-IFRS Financial Measures
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 Profit/(Loss), Adjusted Basic Earnings per Shar
Slide 32: Non-IFRS Financial Measures
Non-IFRS Financial Measures Adjusted Profit represents Profit adjusted for income and costs (net of 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, i
Slide 33: Non-IFRS Financial Measures: Adjusted EBIT
Non-IFRS Financial Measures Adjusted EBIT For the six months ended June 30, (€ thousands) 2022 2021 Profit 21,021 32,234 Income taxes 27,050 32,284 Financial income (15,901) (32,531) Financial expenses 41,965 16,685 Exchange losses 9,893 2,728 Result from investments accounted for using the equity m
Slide 34: Non-IFRS Financial Measures: Adjusted Profit/(Loss)
Non-IFRS Financial Measures Adjusted Profit/(Loss) For the six months ended June 30, (€ thousands) 2022 2021 Profit 21,021 32,234 Impairment of leased and owned stores(1) 3,309 4,261 Costs related to the Business Combination(2) 1,090 — Special donation to the UNHCR(3) 1,000 — Severance indemnities a
Slide 35: Non-IFRS Financial Measures: Adjusted EPS
Non-IFRS Financial Measures Adjusted Basic Earnings per Share and Adjusted Diluted Earnings per Share For the six months ended June 30, (€ thousands) 2022 2021 Profit 21,021 32,234 Impairment of leased and owned stores(1) 3,309 4,261 Costs related to the Business Combination(2) 1,090 — Special donat
Slide 36: Non-IFRS Financial Measures: Net Financial Indebtedness
Non-IFRS Financial Measures Net Financial Indebtedness/(Cash Surplus) (€ thousands) At June 30, 2022 At December 31, 2021 Non-current borrowings 306,178 471,646 Current borrowings 246,470 157,292 Derivative financial instruments - Liabilities 21,483 14,138 Other non-current financial liabilities (ot
Slide 37: Non-IFRS Financial Measures: Trade Working Capital
Non-IFRS Financial Measures Trade Working Capital (€ thousands) At June 30, 2022 At December 31, 2021 Current assets 1,342,331 1,384,531 Current liabilities (835,741) (702,316) Working capital 506,590 682,215 Less: Derivative financial instruments 11,135 1,786 Tax receivables 18,956 14,966 Other cur
Slide 38: Glossary and Definitions
Glossary and Definitions (1) y-o-y: used to refer to year-on-year growth rate. All growth rates are at actual currency (2) Growth rates in this presentation are year-on-year unless specified differently (3) FX: means foreign exchange or currency (4) M: may be used to refer to million (5) d-d: means
Slide 39: Investor Relations Contact
INVESTOR RELATIONS CONTACT Investor Relations Francesca Di Pasquantonio francesca.dipasquantonio@zegna.com +39 335 5837669 Media Domenico Galluccio domenico.galluccio@zegna.com +39 335 538 7288 39