Ermenegildo Zegna N.v. · NYSE:ZGN
Ermenegildo Zegna — FY2022 Earnings Presentation
36 slides from Ermenegildo Zegna's earnings presentation, Apr 6, 2023
Slide 1: FY 2022 Financial Results
FY 2022 FINANCIAL RESULTS April 6, 2023 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 earnings before interest, taxes, dep
Slide 3: Chairman and CEO statement
Ermenegildo Zegna Group “We remain focused on executing our strategy to further strengthen our market-leading position and our Made in Italy manufacturing platform, while managing opportunities and challenges on Our Road to achieving our medium-term ambitions. We will do all of this without compromi
Slide 4: Key Financial Highlights for Fiscal Year Ended December 31, 2022
KEY FINANCIAL HIGHLIGHTS FOR FISCAL YEAR ENDED DECEMBER 31, 2022 Robust FY 2022 results in line with strategic plan Revenues €1,492.8 million Profit +15.5% YoY €65.3 million +11.0% cFX 1,2 +42% YoY excluding GCR3 Adjusted EBIT2 Cash Surplus2 €157.7 million €122.2 million (10.6% Adjusted EBIT Margin2
Slide 5: FY 2022 Highlights
FY 2022 HIGHLIGHTS Continued Growth and Profitability Despite Challenging Global Environment and Covid-19 related disruptions in GCR € millions and % of revenues Adjusted EBIT & Adjusted EBIT Margin * € millions Revenues 2022 158 10.6% 2022 1.493 2021 1.292 2021 149 11.5% 2020 1.015 2020 20 2.0% € A
Slide 6: FY 2022 Select Highlights
FY 2022 SELECT HIGHLIGHTS ZEGNA One Brand Thom Browne Accelerated Sustainability & ESG • Proven success of One Brand launched in July 2022 • 11 new directly operated stores (net) • DE&I and talent management strategies; Diversity, • Increased demand for iconic products and luxury • Strengthened clie
Slide 7: Recent Events
RECENT EVENTS ZEGNA Thom Browne Group • 16 January: Fall / Winter 2023: Oasi Cashmere and • 12 January: Adidas litigation: Thom Browne wins • 26 January to 28 February: Warrants redemption The Elder Statesman trademark case • led to total number of outstanding shares • 23 January: Announcement of ac
Slide 8: FY 2022 Revenues
FY 2022 REVENUES • Revenues of €1,493 million, +15.5% YoY, +11.0% YoY at cFX* • Continued growth momentum for both Zegna and Thom Browne Revenues • Zegna Segment +13.7% YoY +15.5% • Thom Browne Segment +25.3% YoY year-over-year 1.493 • Both were impacted by Covid-19-related disruptions in the GCR th
Slide 9: FY 2022 Profitability
FY 2022 PROFITABILITY • Profit of €65.3 million in FY 2022, compared to a loss of (€127.7) million in FY 2021, which included the impact of the Business Combination • Impacted by higher net financial charges and higher taxes Adjusted EBIT Margin* • Effective tax rate 35.4% • Adjusted profit of €73.6
Slide 10: FY 2022 Income Statement
FY 2022 INCOME STATEMENT (Euro Million in Actual Fx) 2022 2021 Δ€ vs 2021 Δ% vs 2021 Revenues 1,492.8 1,292.4 +200.4 +16% Other income 13.9 8.3 +5.7 +69% Cost of raw materials and consumables (311.3) (309.6) (1.7) (1%) Purchased, outsourced and other costs (437.9) (353.6) (84.3) (24%) Personnel cost
Slide 11: FY 2022 Profitability by Segment
FY 2022 PROFITABILITY BY SEGMENT April 6, 2023 11
Slide 12: Profitability by Segment: Zegna Segment
PROFITABILITY BY SEGMENT Zegna Segment • Adjusted EBIT* for the Zegna segment was €141.5 million in 2022, up 7% from €131.9 million in 2021 • Adjusted EBIT Margin* for the Zegna segment was 12.0%, down from 12.7% in 2021 • Improvements were driven by the repositioning as part of the ZEGNA One Brand
Slide 13: Profitability by Segment: Thom Browne Segment
PROFITABILITY BY SEGMENT Thom Browne Segment • Adjusted EBIT* for the Thom Browne segment was €48.1 million in 2022, up 26.2% from €38.1 million in 2021 • Adjusted EBIT Margin* for the Thom Browne segment was 14.5%, up from 14.4% in 2021 • Investing for growth, yet improvement came from scale benefi
Slide 14: Corporate
CORPORATE Corporate Costs • Newly introduced approach to segment reporting, including costs for certain corporate functions not attributable to individual segments • Costs attributed to Corporate Costs as of December 31, 2022, had previously been attributed to the Zegna segment • In FY 2022, Corpora
Slide 15: FY 2022 Net Financial Indebtedness / (Cash Surplus), Capital Expenditure and Trade Working Capital
FY 2022 NET FINANCIAL INDEBTEDNESS / (CASH SURPLUS), CAPITAL EXPENDITURE AND TRADE WORKING CAPITAL April 6, 2023 15
Slide 16: FY 2022 Net Financial Indebtedness / (Cash Surplus)
FY 2022 NET FINANCIAL INDEBTEDNESS / (CASH SURPLUS) • €122.2 million Cash surplus* on December 31, 2022, down Trade Working Capital (€ millions) 16% from €144.6 million at December 31, 2021; with the 21.3% on 21.2% on decline a result of, among others sales sales • €26 million in dividends ^ €317 mi
Slide 17: Dividend, Outlook, and Guidance
DIVIDEND, OUTLOOK, AND GUIDANCE April 6, 2023 17
Slide 18: Dividend and AGM
DIVIDEND AND AGM • The Group intends to make a dividend distribution of €0.10 per share to the holders of Ordinary Shares * • This corresponds to a total dividend distribution to shareholders of approximately €25 million • AGM currently expected to be held on June 27, 2023 April 6, 2023 * Subject to
Slide 19: Outlook
OUTLOOK • On May 17, 2022, at its first Capital Markets Day, the Group announced its financial goals for the medium term • Medium term now defined as 2025 • The Group is aiming for annual revenues to exceed €2 billion and for Adjusted EBIT Margin to reach at least 15% of revenues by 2025 • Excluding
Slide 20: 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 earnings before interest, taxes, depreciation a
Slide 21: Non-IFRS Financial Measures: Adjusted EBITDA
Non-IFRS Financial Measures Adjusted EBITDA Adjusted EBITDA is defined as profit or loss before income taxes plus financial income, financial expenses, foreign exchange losses/(gains), depreciation, amortization and impairment of assets and the result from investments accounted for using the equity
Slide 22: Non-IFRS Financial Measures: Adjusted Profit/(Loss)
Non-IFRS Financial Measures Adjusted Profit/(Loss) Adjusted Profit/(Loss) is defined as Profit/(Loss) 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 per
Slide 23: Non-IFRS Financial Measures: Adjusted EPS
Non-IFRS Financial Measures Adjusted Basic Earnings per Share and Adjusted Diluted Earnings per Share Adjusted Basic Earnings per Share and Adjusted Diluted Earnings per Share are defined as basic earnings per share and diluted earnings per share adjusted for income and costs (net of related tax eff
Slide 24: Non-IFRS Financial Measures: Net Financial Indebtedness/(Cash Surplus)
Non-IFRS Financial Measures 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 n
Slide 25: Non-IFRS Financial Measures: Constant Currency Information
Non-IFRS Financial Measures Constant Currency Information In addition to presenting our revenues on a current currency basis, we also present certain revenue information on a constant currency basis, which excludes the effects of foreign currency translation from our subsidiaries with functional cur
Slide 26: Adjusted EBIT and Adjusted EBIT Margin
Non-IFRS Financial Measures Adjusted EBIT and Adjusted EBIT Margin See explanatory notes on slides 32-33 April 6, 2023 26
Slide 27: Adjusted EBITDA
Non-IFRS Financial Measures Adjusted EBITDA See explanatory notes on slides 32-33 April 6, 2023 27
Slide 28: Adjusted Profit/(Loss)
Non-IFRS Financial Measures Adjusted Profit/(Loss) See explanatory notes on slides 32-33 April 6, 2023 28
Slide 29: Adjusted Basic and Diluted Earnings per Share
Non-IFRS Financial Measures Adjusted Basic Earnings per Share and Adjusted Diluted Earnings per Share See explanatory notes on slides 32-33 April 6, 2023 29
Slide 30: Net Financial Indebtedness/(Cash Surplus)
Non-IFRS Financial Measures Net Financial Indebtedness/(Cash Surplus) (*) Primarily relates to loans from a related party that were outstanding at December 31, 2021 and fully repaid in the first half of 2022. (**) Includes (i) the Group’s investments in securities amounting to €316,595 thousand and
Slide 31: Trade Working Capital
Non-IFRS Financial Measures Trade Working Capital April 6, 2023 31
Slide 32: Explanatory Notes
Non-IFRS Financial Measures Explanatory Notes 1) Relates to legal costs of €7,532 thousand incurred in 2022 by the Thom Browne Segment in connection with a legal dispute between adidas and Thom Browne, primarily in relation to the use of trademarks. This amount is recorded within the line item “purc
Slide 33: Explanatory Notes
Non-IFRS Financial Measures Explanatory Notes 6) Relates to a donation of €1,000 thousand in 2022 to the United Nations High Commissioner for Refugees (UNHCR) to support initiatives related to the humanitarian emergency in Ukraine. This amount is recorded within the line item “other operating costs”
Slide 34: Capital Expenditure
Capital Expenditure Capital expenditure is defined as the sum of cash outflows that result in additions to property, plant and equipment and intangible assets. (€ thousands) At December 31, 2022 2021 2020 Payments for property, plant and equipment 49,114 79,699 27,630 Payments for intangible assets
Slide 35: 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) cFX growth: means growth at constant currency. For the description of constant currency calcu
Slide 36: Investor Relations Contact
INVESTOR RELATIONS CONTACT Investor Relations Investor Relations/Group Communications Francesca Di Pasquantonio francesca.dipasquantonio@zegna.com +39 335 5837669 Clementina Tito clementina.tito@zegna.com Media Brunswick Group Brendan Riley / Daria Danelli / Marie Jensen briley@brunswickgroup.com /