- Group hosts second Capital Markets Day at the New York Stock
Exchange and announces medium term financial outlook.
- Group aims for compounded average annual growth1 of revenues
over 10% and of Adjusted EBIT of around 20%, and a strong Cash
Surplus.
- Group sees positive momentum across brands and shares the
business strategy for Tom Ford Fashion, where it expects revenues
to grow at a compounded average rate1 of over 10% in the medium
term.
Ermenegildo Zegna N.V. (NYSE:ZGN) (“Zegna Group,” “the Group,”
or “the Company”) today will host its second Capital Markets Day at
the New York Stock Exchange where the Group will unveil the next
iteration of its strategy and its updated medium-term financial
objectives, including its ambitions for Tom Ford Fashion. A new
chapter in Our Road To Tomorrow strategy.
Ermenegildo “Gildo” Zegna, Chairman and CEO of the Zegna Group,
said: “Almost two years ago, we stood in this same historic place
to ring the Opening Bell and begin our life as a public company as
the very first Italian luxury fashion company to be listed on the
New York Stock Exchange. It was a proud moment for me, for my
family, and for the entire Group – the culmination of a personal
dream, and the starting point of an exciting new phase for the
Group and of Our Road To Tomorrow.
Several months later, at our first Capital Markets Day held at
Oasi Zegna in May 2022, we shared our medium-term financial
outlook. I am pleased to say that today we are ahead of the plans
we presented back then.”
He added: “Our financial performance today paints a very clear
picture: we are a stronger, more thriving company than ever before
– we achieved these results while strengthening our brands, and
this despite the challenging geopolitical and macroeconomic
conditions over the past two years.
Our goals – strategic and financial – have always been rooted in
our values. Earlier this year we have added another incredible name
to our portfolio: TOM FORD FASHION, which has become the third
pillar of the Group. Our results so far demonstrate our ability to
execute on the ZEGNA and Thom Browne strategies. This is why, as we
start to execute on TOM FORD FASHION, I am confident in our ability
to deliver on the objectives we are sharing today for the Group as
part of our business strategy, building on the strong portfolio of
our three complementary luxury brands and on the different stages
in their growth cycles.”
As part of the update being provided today, the Group has set
the following strategic goals and financial outlook:
- At the Group level, beginning in FY 2023, the goal is to
deliver over 10% compounded annual revenues growth (“CAGR”) in the
medium term, with Adjusted EBIT CAGR of around 20%. This will
generate significant cash surplus even while taking into
consideration higher, targeted investments in marketing and capital
expenditure to enhance brand desirability and drive growth.
- ZEGNA expects further store productivity increases and
market share gains globally, building on the strong results
achieved through the successful implementation of the ZEGNA One
Brand strategy and a product offering that meets the continued
strong consumer demand for quiet luxury. Store productivity at
ZEGNA is expected to grow by almost 50% in 2023 from the 2021
baseline, ahead of our May 2022 medium term guidance. It is
projected to further increase at a ca. 10% CAGR in the medium term
compared with 2023.
- Thom Browne, building on its 20 year anniversary,
expects a high teens compounded average growth in DTC revenues in
the next years, with a streamlined wholesale distribution.
- Tom Ford Fashion expects to grow its revenues by over
10% compounded annual growth rate in the medium term2, capitalizing
on the potential of the brand, whose strength today is much larger
than its business, and by leveraging Group synergies to fuel its
growth.
Capital Markets Day Live Stream
A live stream of the event and a copy of the presentation will
be made available at ir.zegnagroup.com on Tuesday, December 5,
2023, at 8am EST / 2pm CET. An online archive of the broadcast will
be available on the website after the live call and will be
available for twelve months.
Non-IFRS Financial Measures
Zegna's management monitors and evaluates operating and
financial performance using several non-IFRS financial measures,
among which adjusted earnings before interest and taxes ("Adjusted
EBIT") and Net Financial Indebtedness/Cash Surplus. Zegna's
management believes that these non-IFRS financial measures provide
useful and relevant information regarding Zegna's financial
performance and improve the ability of management and investors to
assess and compare the financial performance of Zegna with that 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.
Adjusted EBIT
Adjusted EBIT is defined as profit or loss before income taxes
plus financial income, financial expenses, exchange losses/(gains),
result from investments accounted for using the equity method,
impairments of 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.
Zegna’s management uses Adjusted EBIT for internal reporting to
assess performance and as part of the forecasting, budgeting and
decision-making processes as it provides additional transparency
regarding 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 and among segments.
Zegna’s management also believes that Adjusted EBIT 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 EBIT provides useful
information to third party stakeholders in understanding and
evaluating Zegna’s operating results.
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 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 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.
***
Capital Expenditure
Capital expenditure is defined as the sum of cash outflows that
result in additions to property, plant and equipment and intangible
assets.
***
Next Scheduled Announcement
The next scheduled announcement will be the full year 2023
preliminary revenues on January 31, 2024. 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 a 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
revenues of approximately €1.5 billion.
***
Forward Looking Statements
This presentation contains forward-looking statements that are
based on beliefs and assumptions and on information currently
available to us. In particular, statements regarding future
financial performance and the Group’s expectations as to the
achievement of certain targeted metrics, including revenues,
Adjusted EBIT, Adjusted EBIT Margin, Net Financial
Indebtedness/Cash Surplus, store productivity, number of stores and
capital expenditures at any future date or for any future period
are forward-looking statements. In some cases, you can identify
forward-looking statements by the following words: “may,” “will,”
“could,” “would,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” “ongoing,” “target,” “seek,” “aspire,”
“goal,” “outlook,” “guidance,” “forecast,” “prospect” or the
negative or plural of these words, or other similar expressions
that are predictions or indicate future events or prospects,
although not all forward-looking statements contain these words.
Any statements that refer to expectations, projections or other
characterizations of future events or circumstances, including
strategies or plans, are also forward-looking statements. These
statements involve risks, uncertainties and other factors that may
cause actual results, levels of activity, performance or
achievements to be materially different from the information
expressed or implied by these forward-looking statements, and, as
such, undue reliance should not be placed on them. Actual results
may differ materially from those expressed in forward-looking
statements as a result of a variety of factors, including: the
recognition, integrity and reputation of our brands; our ability to
anticipate trends and to identify and respond to new and changing
consumer preference; the COVID-19 pandemic or similar public health
crises; international business, regulatory, social and political
risks; the conflict in Ukraine and sanctions imposed onto Russia;
the occurrence of acts of terrorism or similar events, conflicts,
civil unrest or situations of political instability; developments
in Greater China and other growth and emerging markets; our ability
to implement our strategy; recent and potential future
acquisitions; disruption to our manufacturing and logistics
facilities; risks related to the sale of our products through our
direct-to-consumer channel, as well as through points of sale
operated by third parties; our dependence on our local partners to
sell our products in certain markets; fluctuations in the price or
quality of, or disruptions in the availability of, raw materials;
our ability to negotiate, maintain or renew our license or
co-branding agreements with high end third party brands; tourist
traffic and demand; our dependence on certain key senior personnel
as well as skilled personnel; our ability to protect our
intellectual property rights; disruption in our information
technology, including as a result of cybercrime; the theft or
unauthorized use of personal information of our customers,
employees or other parties; fluctuations in currency exchange rates
or interest rates; the level of competition in the industry in
which we operate; global economic conditions and macro events,
including inflation; failures to comply with applicable laws and
regulations; climate change and other environmental impacts and our
ability to meet our customers’ and other stakeholders’ expectations
on environment, social and governance matters; the enactment of tax
reforms or other changes in tax laws and regulations; and other
risks and uncertainties, including those described in our filings
with the SEC. Most of these factors are outside our 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 us and our directors,
officers or employees or any other person that we will achieve its
objectives and plans in any specified time frame, or at all. The
forward-looking statements in this presentation represent our views
as of the date of this presentation. Subsequent events and
developments may cause that view to change. However, while we may
elect to update these forward-looking statements at some point in
the future, we disclaim any obligation to update or revise publicly
forward-looking statements. You should, therefore, not rely on
these forward-looking statements as representing our views as of
any date subsequent to the date of this presentation.
_______________________ 1 Starting from FY2023 pro-rated on a 12
month basis 2 Starting from FY2023 pro-rated on a 12 months basis.
The Tom Ford Fashion business is consolidated in the Zegna Group’s
financial statements as of April 29, 2023, following completion of
the acquisition of Tom Ford International.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231205610824/en/
Investor Relations/Group Communications/Media Francesca
Di Pasquantonio / Clementina Tito ir@zegna.com /
corporatepress@zegna.com
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