Ermenegildo Zegna N.v. · NYSE:ZGN
Ermenegildo Zegna — SPAC Merger (September 2021)
64 slides from Ermenegildo Zegna's SPAC merger presentation, September 2021
Slide 1: Investor presentation September 2021
CONFIDENTIAL Investor presentation September 2021
Slide 2: A leading, modern and integrated group
CONFIDENTIAL A LEADING, MODERN AND INTEGRATED GROUP… ZEGNA SEGMENT THOM BROWNE SEGMENT The Group at a glance Branded Products 1 Branded Products1 Other2 Textile & 1% ▪ At the forefront ▪ “Create something of the modern man that people want, an idea, €1.2bn Strategic Alliances 13% THOM BROWNE. commit
Slide 3: Positioned in the structurally attractive luxury market
CONFIDENTIAL …FIRMLY POSITIONED IN THE STRUCTURALLY ATTRACTIVE LUXURY MARKET Personal Luxury Goods Market Evolution (€bn) Key Drivers of Market Growth % Global Market1 15% 23% 23-26% 30-33% 380 Casualisation Digital & Direct Contact 360 295 281 250 217 China Emotions & Experientiality 76 Point of Vi
Slide 4: Table of contents
CONFIDENTIAL TABLE OF CONTENTS 1. What makes Ermenegildo Zegna Group different 2. Focus on Zegna 3. The Thom Browne factor 4. Key financials overview 5. Transaction structure 3
Slide 5: Our vision
CONFIDENTIAL OUR VISION …AND LET ME TELL YOU WHY WE WERE ALL WEARING A SUIT, AND TODAY I’M NOT… SECTION 1 4
Slide 6: Ermenegildo Zegna Group
Ermenegildo Zegna Group My name is Ermenegildo «Gildo» Zegna. What am I doing in New York? ———nmy y eet Exgpenepiide
Slide 7: Zegna FW 2021 collection
CONFIDENTIAL Zegna FW 2021 collection 6
Slide 8: Strong footprint in Greater China
CONFIDENTIAL Strong footprint in Greater China Shenzhen MixC Hong Kong Peking Road Hangzhou MixC 7
Slide 9: Thom Browne FW 2021 collection
CONFIDENTIAL Thom Browne FW 2021 collection 8
Slide 10: Craftsmanship excellence
CONFIDENTIAL Craftsmanship excellence 9
Slide 11: The team
CONFIDENTIAL THE TEAM ERMENEGILDO GIANLUCA EDOARDO RODRIGO ALESSANDRO THOM ANTONIO (GILDO) ZEGNA TAGLIABUE ZEGNA BAZAN SARTORI BROWNE GATTI Group CEO Group COO Chief Marketing, Digital and Thom Browne Zegna Thom Browne IIAC Advisor and CFO Sustainability Officer CEO Artistic Director Founder & Chief
Slide 12: What makes Ermenegildo Zegna Group different
1. What makes Ermenegildo Zegna Group different CONFIDENTIAL A UNIQUE OPPORTUNITY IN THE LUXURY SPACE 1. HERITAGE AND SUSTAINABILITY AT THE CORE 4. A NATURAL PLATFORM FOR GROWTH IN THE LUXURY SPACE (ZEGNA & THOM BROWNE) 2. THE MADE IN ITALY LUXURY LABORATORY PLATFORM 5. AN EXPERIENCED MANAGEMENT TEA
Slide 13: Heritage and sustainability at the core
1.1 What makes Ermenegildo Zegna Group different CONFIDENTIAL HERITAGE AND SUSTAINABILITY AT THE CORE ACTIONS SPEAK LOUDER THAN WORDS * *Oasi Zegna will be demerged as part of the real estate business disposition that is expected to occur prior to the consummation of a potential transaction 12
Slide 14: Made in Italy luxury laboratory platform
1.2 What makes Ermenegildo Zegna Group different CONFIDENTIAL THE MADE IN ITALY LUXURY LABORATORY PLATFORM OUR UNIQUE STORY OF VERTICAL INTEGRATION FROM SHEEP TO SHOP, FROM MEN TO TERRITORY, FROM FACTORY TO PEOPLE This is the original dream of our founder, a fully integrated structure connecting ani
Slide 15: Our own luxury laboratory
1.2 What makes Ermenegildo Zegna Group different CONFIDENTIAL THE MADE IN ITALY LUXURY LABORATORY PLATFORM OUR UNIQUE STORY OF VERTICAL INTEGRATION OUR OWN LUXURY LABORATORY ~250 people dedicated to R&D1 Serving proprietary brands ✓ Privileged procurement of finest fibres and fabrics Potential new a
Slide 16: Key innovation initiatives
1.2 What makes Ermenegildo Zegna Group different CONFIDENTIAL THE MADE IN ITALY LUXURY LABORATORY PLATFORM OUR KEY INNOVATION INITIATIVES #UseTheExisting Made-to-Measure Digitalization of the garment making the dream of zero waste possible the king of services from design, to sampling and customer c
Slide 17: A global group and pioneer in China
1.3 What makes Ermenegildo Zegna Group different CONFIDENTIAL A GLOBAL GROUP AND PIONEER IN CHINA Zegna Group presence in Greater China Zegna brand performance in China vs. Selected Peers3 Zegna Group 2021E Apparel & Accessories revenue1 split by region (€m) Brand Awareness Rest of APAC 92% Gen Z aw
Slide 18: Natural platform for growth in luxury space
1.4 What makes Ermenegildo Zegna Group different CONFIDENTIAL A NATURAL PLATFORM FOR GROWTH IN THE LUXURY SPACE The benefits of the WHY THOM BROWNE? Platform: • Increase exposure to a new younger customer base (Revenues, US$m)1 ✓ Fully-fledged • Established iconic brand ~2x “modular” luxury laborato
Slide 19: Focus on Zegna
CONFIDENTIAL Focus on Zegna SECTION 2 18
Slide 20: Zegna belongs to today: the (re)set
2. Focus on Zegna CONFIDENTIAL ZEGNA BELONGS TO TODAY THE (RE)SET FROM STATUS… …TO COMFORT 2016A 2019A 2023E May 2021 YTD Luxury Leisurewear @ 51% ZEGNA LUXURY LEISUREWEAR 38% 45% 53% ZEGNA LEATHER ACCESSORIES1 15% 14% 17% ZEGNA FORMALWEAR 44% 38% 27% as a % of revenues2 At the forefront of the mode
Slide 21: Zegna belongs to today: the (re)set
2. Focus on Zegna CONFIDENTIAL ZEGNA BELONGS TO TODAY THE (RE)SET In order to retain its relevance, strengthen positioning and attract new customers, we believe a brand needs to… A B …create iconic products C …focus on being recognized visually …attract new customers that define you ONE BRAND ONE ME
Slide 22: The new era: one brand
2.A Focus on Zegna CONFIDENTIAL ZEGNA BELONGS TO TODAY THE NEW ERA TODAY TOMORROW ONE BRAND A STRONG SINGLE BRAND, WITH A NEW SIGNIFIER EXPECTED TO BE LAUNCHED IN Q4 2021 Source: Company information 21
Slide 23: Creating icons: the Triple Stitch
2.B Focus on Zegna CONFIDENTIAL ZEGNA BELONGS TO TODAY CREATING ICONS The Triple Stitch: a successful iconic product delivering superior growth Triple Stitch sneakers have been extremely successful, as demonstrated by the superior growth they generated across channels despite COVID-19 Triple Stitch
Slide 24: Attracting new customers: Zegna x Fear of God
2.C Focus on Zegna CONFIDENTIAL ZEGNA BELONGS TO TODAY ATTRACTING NEW CUSTOMERS The ZEGNA X FEAR OF GOD collaboration - Some data points on a successful recent initiative Key KPIs Collection revenues split Best selling items By region (%)1 REST OF APAC EMEA 10% 10% AMERICAS 18% GREATER CHINA 62% By
Slide 25: The Thom Browne factor
CONFIDENTIAL The Thom Browne factor SECTION 3 24
Slide 26: Distinctive modern luxury: the Thom Browne team
3. The Thom Browne factor CONFIDENTIAL DISTINCTIVE MODERN LUXURY The Thom Browne Team Sources: Company information 25
Slide 27: Distinctive modern luxury: Thom Browne growth
3. The Thom Browne factor CONFIDENTIAL DISTINCTIVE MODERN LUXURY Womenswear 26% 30% 38% as % of revenues ~15% CAGR ~25% 361 CAGR 271 Revenues 139 (US$m)1 Before acquisition Today Tomorrow (2018A) (2021E) (2023E) +~4% +~4% Adj. EBIT as % of ~10%2 14% 18% revenues +44 +25 Total retail network3 32 76 1
Slide 28: Distinctive modern luxury
3. The Thom Browne factor CONFIDENTIAL DISTINCTIVE MODERN LUXURY A creative, thought-provoking designer with a strong tailoring aesthetic, Thom Browne is recognized for creating and establishing a new silhouette in menswear Sources: Company information 27
Slide 29: Craftmanship
3. The Thom Browne factor CONFIDENTIAL DISTINCTIVE MODERN LUXURY Craftmanship Sources: Company information 28
Slide 30: Brand awareness
3. The Thom Browne factor CONFIDENTIAL DISTINCTIVE MODERN LUXURY Brand awareness Cardi B Danai Gurira Maisie Williams Janelle Monàe OBJ Timothée Chalamet Pusha T Cole Sprouse Brie Larson Xiao Wen Ju Kristen Stewart Liu Wen LaKeith Stanfield Lee Pace LeBron James BTS Sources: Company information 29
Slide 31: Thom Browne store design
Rodrigo Bazan to review 3. The Thom Browne factor CONFIDENTIAL CONFIDENTIAL DISTINCTIVE MODERN LUXURY The store is unexpected, yet designed to feel like the interior of a home; always protected from view with either venetian blinds or a marble façade Sources: Company information 30
Slide 32: How we will grow the Thom Browne brand
3. The Thom Browne factor Company/Rodrigo to review CONFIDENTIAL HOW WE WILL GROW THE THOM BROWNE BRAND Womenswear Expansion & Accessories of clients Brand awareness • Continue the successful • Pursue a very significant • Expand significantly development of our expansion of clients, brand awareness
Slide 33: Key financials overview
CONFIDENTIAL Key financials overview SECTION 4 32
Slide 34: Zegna Group's numbers at a glance
4. Key financials overview CONFIDENTIAL ZEGNA GROUP’S NUMBERS AT A GLANCE 2021E 2021E Core revenues1 Greater China share of Apparel & Accessories revenues2 €1,207m 51% (vs. 41% in 2019) 2021E 2021E Core Adj. EBITDA DTC3 share of Apparel & Accessories revenues2 €264m 77% (vs. 74% in 2019) 2021E 2021E
Slide 35: Key business plan growth levers
4. Key financials overview CONFIDENTIAL ZEGNA GROUP’S KEY BUSINESS PLAN GROWTH LEVERS Key positive market tailwinds Key growth levers Detail by brand 1 Luxury Leisurewear & Leather Accessories PRODUCT CATEGORIES Womenswear and accessories Casualisation + 2 Retail footprint optimization & digital acc
Slide 36: Key financials
4. Key financials overview CONFIDENTIAL ZEGNA GROUP KEY FINANCIALS Core revenues (€m) Core Adj. EBIT (€m) +11% (23%) +20% +11% +10% 9% 9% 2% 9% 11% 12% including Thom Browne 12 months contribution1 1,476 173 1,271 1,306 1,342 1,207 142 1,173 1,005 1091 112 111 24 2018A 2019A 2020A 2021E 2022E 2023E
Slide 37: Current trading (2021 vs 2019)
4. Key financials overview CONFIDENTIAL ZEGNA GROUP CURRENT TRADING (2021 vs 2019) (8%) Core revenues (€m, at actual currency) 1,306 1,207 • Q1 21 at -4% vs Q1 19 • Apr-May 21 in acceleration: flat performance vs Apr-May 19 (2%) 508 497 2019A 2021A 2019A 2021E May-YTD Full Year Sources: Company info
Slide 38: Core revenues evolution by product category
4. Key financials overview CONFIDENTIAL ZEGNA GROUP (€m) CORE REVENUES EVOLUTION BY PRODUCT CATEGORY (€M) +3.1% CAGR CAGR 2019A-23E growth mostly driven by knitwear, outerwear, jersey, “new jackets” and “new trousers” growth mostly driven by sneakers 76 28 4 1,476 1,306 45 12 9 54 19 (14%) 95 180 12
Slide 39: Core revenues evolution by geography
4. Key financials overview CONFIDENTIAL ZEGNA GROUP CORE REVENUES EVOLUTION BY GEOGRAPHY (€m) (€M) +3.1% CAGR CAGR 28 4 1,476 2019A-23E 45 88 19 44 54 (14%) 1,306 180 60 126 +4% Textile & 18 1,207 Strategic 97 15 200 (2%) Alliances 110 151 75 76 • return to pre-COVID levels 206 • Americas decline vs
Slide 40: Core Adj. EBIT evolution
4. Key financials overview CONFIDENTIAL ZEGNA GROUP CORE ADJ. EBIT EVOLUTION From 2019A to 2020A Adj. EBIT From 2020A to 2021E Adj. EBIT From 2021E to 2023E Adj. EBIT Dec-YE COVID-19 Breakup Recovery Phase Expansion Phase 2019A 2020A 2021E Starting Core Adj. EBIT €112m 9% €24m 2% €111m 9% ∆ revenues
Slide 41: Focus on Zegna segment key financials
4. Key financials overview CONFIDENTIAL FOCUS ON ZEGNA SEGMENT1 KEY FINANCIALS Core revenues (€m) Core Adj. EBIT (€m) (0%) (28%) +18% +10% +9% 9% 8% n.m. 8% 9% 10% 1,153 1,150 1,179 119 1,082 108 985 97 96 834 80 (5) 2018A 2019A 2020A 2021E 2022E 2023E 2018A 2019A 2020A 2021E 2022E 2023E x% Core rev
Slide 42: Focus on Thom Browne segment key financials
4. Key financials overview CONFIDENTIAL FOCUS ON THOM BROWNE SEGMENT KEY FINANCIALS Revenues (€m) Adj. EBIT (€m) +37% 1 +12% +28% +17% +14% n.m. 10%2 16% 14% 17% 18% 306 268 55 230 46 including Thom Browne 12 months contribution3 180 161 31 117 29 • 2 Thom Browne consolidated 16 since 30-Nov-18 19 1
Slide 43: Transaction structure
CONFIDENTIAL Transaction structure SECTION 5 42
Slide 44: Transaction structure and valuation
5. Transaction structure and valuation CONFIDENTIAL TRANSACTION STRUCTURE Sources & Uses Key Transaction Highlights Sources ($m) Uses ($m) Headline Valuation Existing Shareholders Rollover Equity 1,554 Existing Shareholders Rollover Equity 1,554 $3,156m ~18x Cash in Trust 403 Primary Proceeds5 261 C
Slide 45: Thank you
THANK YOU 44 CONFIDENTIAL
Slide 46: Appendix
Appendix 45 CONFIDENTIAL
Slide 47: Zegna Group's key financials
CONFIDENTIAL ZEGNA GROUP’S KEY FINANCIALS (€m) 2021E 2021E 2021E 2021E 2021E 2021E Core revenues1 Greater China share of Apparel DTC3 share of Apparel & Core Adj. EBITDA Core Adj. EBIT Core net financial & Accessories revenues2 Accessories revenues2 indebtedness4 €1,207m 51% 77% €264m €111m €84m (vs
Slide 48: Core revenues evolution by channel
CONFIDENTIAL ZEGNA GROUP (€m) CORE REVENUES EVOLUTION BY CHANNEL (€M) +3.1% CAGR CAGR 2019A-23E 74 28 4 1,476 164 54 19 1,306 (14%) 180 Textile & 126 +4% 18 1,207 driven by Thom Browne Wholesale growth and Zegna recovery Strategic 97 15 (close to 2019 levels); Travel Retail as a key factor in APAC A
Slide 49: Core net financial indebtedness
CONFIDENTIAL ZEGNA GROUP CORE NET FINANCIAL INDEBTEDNESS1 • including €11m impact from acquisitions announced in 20212 • total impact of one-off cash outflows of €92m • includes impact of one-off cash outflows such as: €43m purchase price and related charges for the acquisition of 50% of the New 84
Slide 50: Core adj. operating cash flow
CONFIDENTIAL ZEGNA GROUP CORE ADJ. OPERATING CASH FLOW (MANAGEMENT ESTIMATES)1 81 64 4 2018A 2019A 2020A Core net cash flows from operating activities2 256 239 136 Core operating capex (57) (57) (33) Core payment of lease liabilities (117) (118) (98) Source: Company information and estimates Notes:
Slide 51: Glossary
CONFIDENTIAL GLOSSARY METRIC DEFINITION The “core” measures included in this presentation are unaudited. Such measures exclude certain businesses of the Company that are expected to be divested (by way of one or more demergers or other transfers) prior to the consummation of the Transaction (such di
Slide 52: Summary non-IFRS core financials (1/2)
CONFIDENTIAL SUMMARY NON-IFRS CORE FINANCIALS (1/2) Key income statement items (€m) €m 2018A1 2019A 2020A 2021E 2022E 2023E Zegna Segment core revenues 1,153 1,150 834 985 1,082 1,179 Thom Browne Segment revenues 19 161 180 230 268 306 Eliminations between Segments (0) (6) (8) (8) (8) (9) Core reven
Slide 53: Summary non-IFRS core financials (2/2)
CONFIDENTIAL SUMMARY NON-IFRS CORE FINANCIALS (2/2) Key balance sheet and cash flow items (€m) €m 2018A 2019A 2020A Core Net Financial Indebtedness1 10 18 32 Core IFRS16 lease liabilities 556 546 443 Core inventories 310 308 320 Core trade receivables 164 178 140 Core trade payables and customer adv
Slide 54: IFRS reconciliations (1/6)
CONFIDENTIAL IFRS RECONCILIATIONS (1/6) Core revenues reconciliation (€m) €m 2018A 2019A 2020A Zegna Segment Core revenues 1,153 1,150 834 Thom Browne Segment revenues 19 161 180 Eliminations between Segments (0) (6) (8) Core revenues 1,173 1,306 1,005 Disposition reversal 10 16 10 Revenues (IFRS) 1
Slide 55: IFRS reconciliations (2/6)
CONFIDENTIAL IFRS RECONCILIATIONS (2/6) Core Adj. EBIT reconciliation (€m) €m 2018A 2019A 2020A Zegna Segment Core Adj. EBIT 108 97 (5) Thom Browne Segment Adj. Ebit 1 16 29 Core Adj. EBIT 109 112 24 Disposition Reversal (3) (5) (4) Adj. EBIT 105 107 20 Adjustments / Reconciling Items1 (10) (19) (43
Slide 56: IFRS reconciliations (3/6)
CONFIDENTIAL IFRS RECONCILIATIONS (3/6) Core Adj. EBITDA reconciliation (€m) €m 2018A 2019A 2020A Core Adj. EBITDA 262 282 193 Disposition reversal (2) (7) (7) Adj. EBITDA 260 275 186 Depreciation and amortization (154) (168) (166) Adjustments / Reconciling Items1 (10) (19) (43) Operating profit (IF
Slide 57: IFRS reconciliations (4/6)
CONFIDENTIAL IFRS RECONCILIATIONS (4/6) Key balance sheet items reconciliation (€m) €m 2018A 2019A 2020A Core Net Financial Indebtedness1 10 18 32 Disposition reversal (26) (28) (25) Net Financial Indebtedness (16) (10) 7 Core IFRS16 lease liabilities 556 546 443 Disposition reversal (8) (38) (35) I
Slide 58: IFRS reconciliations (5/6)
CONFIDENTIAL IFRS RECONCILIATIONS (5/6) Key balance sheet items reconciliation – focus on Core Net Financial Indebtedness (€m) €m 2018A 2019A 2020A Non current borrowings 620 514 559 Current borrowings 143 106 106 Derivative financial instruments 12 14 13 Other non current financial liabilities (Bon
Slide 59: IFRS reconciliations (6/6)
CONFIDENTIAL IFRS RECONCILIATIONS (6/6) Key cash flow items reconciliation (€m) €m 2018A 2019A 2020A Net cash flows from operating activities 193 174 71 Cash-out of interest add-back 20 27 21 Cash-out of income taxes add-back 33 31 36 Net cash flows from operating activities, excluding income taxes
Slide 60: DOS network evolution
CONFIDENTIAL DOS NETWORK EVOLUTION Zegna Branded Products1 (# DOS2) Thom Browne (# DOS2) at year end at year end 238 6 (1) (6) 7 244 [ ] 5 68 46 3 39 3 9 19 9 71 65 38 16 4 46 45 6 13 34 82 88 15 2020A Greater Rest of EMEA Americas 2023E 2020A Greater Rest of EMEA Americas 2023E China APAC China APA
Slide 61: Investindustrial Acquisition Corp. overview
CONFIDENTIAL INVESTINDUSTRIAL ACQUISITION CORP. OVERVIEW Team Overview Investindustrial Overview Advisory Board Investindustrial Acquisition Corp. Leadership European leader with strong presence in Southern Europe • Founded in 1990 with backing from an industrial conglomerate, active since the late
Slide 62: Risk factors
CONFIDENTIAL RISK FACTORS All references to "Zegna" refer to the business of Ermenegildo Zegna Holditalia S.p.A. and its consolidated subsidiaries. The risks presented below are certain of the general risks related to the business of Zegna and to the contemplated business combination and such list i
Slide 63: Disclaimer (1/2)
CONFIDENTIAL DISCLAIMER (1/2) Confidentiality and Disclosures This presentation (the “Presentation”) is provided for information purposes only and has been prepared in connection with a possible business combination (a “Transaction”) involving Ermenegildo Zegna Holditalia S.p.A. (the “Company”) and
Slide 64: Disclaimer (2/2)
CONFIDENTIAL DISCLAIMER (2/2) Non IFRS Financial Measures The document includes certain non-IFRS financial measures (including on a forward-looking basis), such as Adjusted EBIT, Adjusted EBITDA, Net Financial Indebtedness, Operating Capex and Adjusted Operating Cash Flow. These non-IFRS measures ar
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