Ermenegildo Zegna N.V. (ZGN) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing ea ...

Core Viewpoint - The acceptance of traditional advertising is declining, while the demand for "good content" is increasing, leading to the rise of scenario-based marketing [2][4]. Group 1: Understanding Scenario-Based Marketing - Scenario-based marketing involves analyzing the specific context of consumers to provide them with relevant information or products, ultimately driving transactions [2][4]. - It requires creating a specific "atmosphere" that attracts consumers to experience and purchase products [2][4]. - Key components of scenarios include "time," "place," and "event," reflecting the personalized demands of consumers [2][4]. Group 2: Misconceptions in Scenario Marketing - Misconception 1: Building a scenario is more important than understanding the user. The essence lies in understanding the "scenario profile" of consumers [5][6]. - Misconception 2: Quality of the scenario is prioritized over effectiveness. Scenario marketing should focus on continuous, interactive engagement rather than one-time displays [8][9]. - Misconception 3: Providing emotional value is sufficient for good advertising. Effective scenario marketing requires a deep understanding of consumers' emotional needs and long-term engagement [11][13]. Group 3: Key Steps in Establishing Scenario Marketing - Step 1: Observe life to identify existing specific scenarios linked to products, rather than creating scenarios in isolation [18][19]. - Step 2: Engage the senses and provide multi-scenario services to meet individual emotional needs, enhancing consumer experience [20][22]. - Step 3: Create a value perception that is slightly elevated from ordinary life, ensuring that marketing does not disrupt consumers' established routines [23][26]. Group 4: Case Studies and Examples - The Hong Kong Tourism Board's collaboration with Whale Energy demonstrated effective scenario marketing by repeatedly appearing in various consumer life scenarios, leading to increased tourist visits [11][9]. - ZEGNA's targeted marketing efforts focused on high-value customers, utilizing data to create precise consumer interactions and achieve significant engagement [19][26]. - The success of Yili's "Baby's First MV" campaign showcased how emotional engagement through personalized content can resonate deeply with consumers [20][22].

VILLA ZEGNA DUBAI June 2025 2 A TIMELESS LEGACY 3 4 FOCUS ON RECOGNIZABILITY AND DESIRABILITY 5 ROAD TO ZEGNA FRIENDS PERSONALISATION ZEGNA FRIENDS NEW CONSUMER A TIMELESS LEGACY Edoardo Zegna 6 ROAD TO ICONICITY: BUILDING ICONIC PRODUCT FAMILIES OASI CASHMERE OASI LINO TRIPLE STITCH IL CONTE VELLUS AUREUM MOCASSIN 7 IL CONTE 8 SHOE PLATFORM EVOLUTION Our approach cross categories 9 VELLUS AUREUM: UNMATCHED PRODUCT INNOVATION WITH UTMOST QUALITY AND EXCLUSIVITY 10 10 CREDIBILITY IN NEW COMMUNITIES 12 PARTNE ...

Ermenegildo Zegna N.V. (NYSE:ZGN) Q1 2025 Earnings Conference Call April 24, 2025 8:00 AM ET Company Participants Paola Durante - Chief of External Relations Gianluca Tagliabue - COO & CFO Conference Call Participants Oliver Chen - TD Cowen Chris Huang - UBS Anthony Charchafji - BNP Paribas Natasha Banoori - Morgan Stanley Daria Nasledysheva - Bank of America Merrill Lynch Louise Singlehurst - Goldman Sachs Group Operator Good afternoon. Good morning, everyone. Thank you for joining the Ermenegildo Zegna Gr ...

Ermenegildo Zegna (ZGN) Q1 2025 Earnings Call April 24, 2025 08:00 AM ET Company Participants Paolo Zegna - Non Executive DirectorGianluca Ambrogio Tagliabue - COO and CFOOliver Chen - Managing Director - Retail, Luxury, New Platforms Sector HeadAnthony Charchafji - Equity Research Associate - Luxury GoodsDaria Nasledysheva - Vice President Equity ResearchLouise Singlehurst - Managing DirectorAlice Poggioli - Investor Relations Director Conference Call Participants Chris Huang - AnalystNatasha Bonnet Banoor ...

Ermenegildo Zegna (ZGN) Q1 2025 Earnings Call April 24, 2025 08:00 AM ET Company Participants Paolo Zegna - Non Executive DirectorGianluca Ambrogio Tagliabue - COO and CFOOliver Chen - Managing Director - Retail, Luxury, New Platforms Sector HeadAnthony Charchafji - Equity Research Associate - Luxury GoodsDaria Nasledysheva - Vice President Equity ResearchLouise Singlehurst - Managing DirectorAlice Poggioli - Investor Relations Director Conference Call Participants Chris Huang - AnalystNatasha Bonnet Banoor ...

PART I [ITEM 3: KEY INFORMATION](index=7&type=section&id=ITEM%203:%20KEY%20INFORMATION) This section outlines key risks including brand reputation, global events, strategy execution, supply chain, currency, and internal control weaknesses [Risk Factors](index=7&type=section&id=D.%20Risk%20Factors) The Group faces diverse business, operational, strategic, and financial risks, including brand integrity, global events, acquisition integration, currency volatility, and internal control weaknesses - The Group's business highly depends on the recognition, integrity, and reputation of its brands (ZEGNA, Thom Browne, TOM FORD FASHION), vulnerable to unmet customer expectations, negative publicity, or supplier misconduct[76](index=76&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - The company may not successfully implement its strategy, including strengthening the ZEGNA brand, expanding TOM FORD FASHION, and reinforcing Thom Browne's DTC channel, potentially adversely affecting results[95](index=95&type=chunk)[96](index=96&type=chunk) - The Group faces acquisition risks, such as the TFI Acquisition, including undetected liabilities, integration difficulties, and failure to achieve expected synergies[100](index=100&type=chunk) - **26% of 2024 revenues** from the Greater China Region exposes the Group to economic slowdowns, geopolitical tensions, and consumer behavior changes in that market[88](index=88&type=chunk)[89](index=89&type=chunk) - Material weaknesses in internal control over financial reporting could lead to material misstatements and impact investor confidence[70](index=70&type=chunk)[207](index=207&type=chunk) - The Group faces currency exchange risk due to Euro-denominated expenses and revenues in other currencies like Chinese Renminbi and U.S. Dollar, with U.S. Dollar appreciation potentially causing unrealized losses on U.S. Dollar liabilities[149](index=149&type=chunk)[152](index=152&type=chunk) - Controlling shareholder Monterubello holds approximately **60.5% of Ordinary Shares** and **74.2% of voting power**, enabling control over shareholder meeting outcomes and potential prevention of favored changes of control[203](index=203&type=chunk) [ITEM 4: INFORMATION ON THE COMPANY](index=29&type=section&id=ITEM%204:%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business model, strengths, and strategy, focusing on its luxury brands, integrated supply chain, and global operations [History and Development of the Company](index=29&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Established in 1910, the Group evolved into a global luxury entity through international expansion, strategic acquisitions, and a 2021 NYSE listing - The Group was established in **1910** in Trivero, Italy, by Ermenegildo Zegna and has been led by the Zegna family for three generations[214](index=214&type=chunk)[217](index=217&type=chunk) - In **2018**, the Group acquired an **85% interest** in Thom Browne, increasing its holding to **92%** by June 2024[224](index=224&type=chunk) - On April 28, **2023**, the Company completed the acquisition of Tom Ford International (TFI), becoming the long-term licensee for the TOM FORD FASHION business[225](index=225&type=chunk) - The company's Ordinary Shares began trading on the NYSE on December 20, **2021**, following a Business Combination[228](index=228&type=chunk) [Business Overview](index=32&type=section&id=B.%20Business%20Overview) The Group is a global luxury menswear leader with three brands, a vertically integrated supply chain, and a balanced global presence, focusing on brand elevation and DTC expansion Consolidated Revenues by Segment (FY 2022-2024) | Segment | 2024 Revenues (€M) | 2023 Revenues (€M) | 2022 Revenues (€M) | | :--- | :--- | :--- | :--- | | Zegna | 1,348.8 | 1,322.0 | 1,176.7 | | Thom Browne | 314.8 | 380.3 | 330.9 | | Tom Ford Fashion | 314.5 | 235.5 | 0.0 | | *Intersegment eliminations* | *(31.5)* | *(33.3)* | *(14.8)* | | **Total** | **1,946.6** | **1,904.5** | **1,492.8** | Consolidated Revenues by Geographic Area (FY 2022-2024) | Geographic Area | 2024 Revenues (€M) | 2023 Revenues (€M) | 2022 Revenues (€M) | | :--- | :--- | :--- | :--- | | EMEA | 680.3 | 658.7 | 520.2 | | Americas | 524.8 | 454.9 | 324.6 | | Greater China Region | 509.4 | 595.5 | 494.1 | | Rest of APAC | 229.9 | 192.5 | 150.7 | | **Total (excl. royalties)** | **1,944.3** | **1,901.6** | **1,489.6** | - The Group's strategy focuses on nourishing ZEGNA, rebalancing Thom Browne's distribution to DTC, aligning TOM FORD FASHION, and pursuing sustainable development via its Made in Italy platform[268](index=268&type=chunk) - The Group operates **461 Directly Operated Stores (DOSs)** as of December 31, 2024, accounting for **71% of consolidated revenues** in 2024[265](index=265&type=chunk) - The global personal luxury goods market was estimated at **€363 billion** in 2024, a **2% decrease** from 2023, but is projected to grow to **€460-500 billion** by 2030[246](index=246&type=chunk)[252](index=252&type=chunk) [Organizational Structure](index=48&type=section&id=C.%20Organizational%20Structure) Ermenegildo Zegna N.V. is the Group's parent company, with significant subsidiaries detailed in Exhibit 8.1 of the report - Ermenegildo Zegna N.V. is the parent company of the Group, with significant subsidiaries listed as an exhibit in the report[370](index=370&type=chunk) [Property, Plants and Equipment](index=48&type=section&id=D.%20Property,%20Plants%20and%20Equipment) The Group operates global owned and leased properties, with total PP&E at **€204.8 million** in 2024, and plans a new Italian production facility by 2026 - The Group operates manufacturing facilities in Italy, Switzerland, and Turkey, leasing most of its **461 directly operated stores (DOSs)** worldwide[101](index=101&type=chunk)[371](index=371&type=chunk)[376](index=376&type=chunk) - The total carrying value of property, plant and equipment increased to **€204.8 million** at December 31, 2024, from **€159.6 million** at December 31, 2023[378](index=378&type=chunk) - The Group plans a new luxury footwear and leather goods production and R&D facility in Sala Baganza, Italy, expected to be completed by end of **2026** and employ over **300 people** by **2027**[377](index=377&type=chunk) [ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=50&type=section&id=ITEM%205:%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides a detailed financial review for FY2022-2024, covering operating results, segment performance, liquidity, capital resources, and non-IFRS financial measures [Operating Results](index=50&type=section&id=A.%20Operating%20Results) Revenues grew **2.2%** to **€1,946.6 million** in 2024, but profit decreased to **€90.9 million** due to higher SG&A despite improved gross margin Key Financial Performance (2022-2024) | Metric (€ thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Revenues | 1,946,647 | 1,904,549 | 1,492,840 | | Profit | 90,861 | 135,661 | 65,279 | | Adjusted EBIT | 184,020 | 220,212 | 157,729 | | Adjusted Profit | 97,776 | 145,235 | 73,629 | Revenues by Brand and Product Line (2024 vs 2023) | Brand/Product Line | 2024 Revenues (€M) | 2023 Revenues (€M) | Growth % | Organic Growth % | | :--- | :--- | :--- | :--- | :--- | | ZEGNA brand | 1,163.7 | 1,109.5 | 4.9% | 5.5% | | Thom Browne | 314.7 | 378.4 | (16.8%) | (20.5%) | | TOM FORD FASHION | 314.5 | 235.5 | 33.5% | (0.7%) | | Textile | 138.2 | 151.0 | (8.5%) | (7.5%) | | Other | 15.5 | 30.1 | (48.4%) | (32.1%) | | **Total** | **1,946.6** | **1,904.5** | **2.2%** | **(1.9%)** | - Gross profit margin increased to **66.6%** in 2024 from **64.3%** in 2023, driven by higher sales from the DTC channel, which reached **77.6%** of branded product sales[467](index=467&type=chunk)[403](index=403&type=chunk) - SG&A expenses rose by **11.9%** to **€1,008.3 million** in 2024, due to TOM FORD FASHION's full-year impact and expansion, and growth of ZEGNA and Thom Browne DTC networks[475](index=475&type=chunk)[476](index=476&type=chunk)[477](index=477&type=chunk) - Revenues in the Greater China Region decreased by **14.5%** in 2024, reflecting challenging luxury market conditions impacting all Group brands[451](index=451&type=chunk) [Liquidity and Capital Resources](index=81&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Net cash from operations was **€279.1 million** in 2024, but increased capital expenditures of **€125.5 million** led to **€94.2 million** net financial indebtedness Summary of Cash Flows (2022-2024) | Cash Flow Activity (€ thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 279,129 | 275,382 | 146,398 | | Net cash flows (used in)/from investing activities | (126,014) | 21,786 | (57,335) | | Net cash flows used in financing activities | (234,534) | (250,494) | (296,997) | | **Net (decrease)/increase in cash** | **(77,149)** | **41,958** | **(205,470)** | - Capital expenditure increased significantly to **€125.5 million** in 2024 from **€77.9 million** in 2023, with **€77 million** for the store network and **€25 million** for production[582](index=582&type=chunk) Net Financial Indebtedness/(Cash Surplus) Calculation | (€ thousands) | At Dec 31, 2024 | At Dec 31, 2023 | | :--- | :--- | :--- | | Total borrowings, other financial liabilities and derivatives | 388,705 | 403,519 | | Total cash and cash equivalents, other current financial assets and derivatives | (294,480) | (392,709) | | **Net Financial Indebtedness/(Cash Surplus)** | **94,225** | **10,810** | - At December 31, 2024, the Group had committed revolving credit lines of **€335 million**, with **€40 million** drawn down, and certain lines linked to ESG targets[597](index=597&type=chunk) [Critical Accounting Estimates](index=91&type=section&id=E.%20Critical%20Accounting%20Estimates) Key accounting estimates involve impairment testing of non-current assets, goodwill, brand valuation, derivatives, inventory provisions, and deferred tax asset recoverability - Key accounting estimates include impairment testing of non-current assets, goodwill, and indefinite-lived brands, relying on assumptions about future cash flows, growth rates, and discount rates[1387](index=1387&type=chunk)[1388](index=1388&type=chunk) - The valuation of the put option liability for the remaining **8%** non-controlling interest in Thom Browne is a critical estimate, based on future profitability (EBITDA) forecasts and discount rates[1400](index=1400&type=chunk) - Provisions for obsolete inventory are a significant estimate, based on collection age and probability of sales through secondary channels like outlets[1394](index=1394&type=chunk)[1395](index=1395&type=chunk) - The recoverability of deferred tax assets is assessed based on the probability of generating sufficient future taxable profits across various jurisdictions[1397](index=1397&type=chunk) [ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=105&type=section&id=ITEM%206:%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the Board and Senior Management composition, 2024 compensation, board practices, and employee statistics, noting growth to **7,395** employees [Directors and Senior Management](index=105&type=section&id=A.%20Directors%20and%20Senior%20Management) The Company has an eleven-member one-tier board, including the Chairman & CEO, and a Senior Management Team comprising key brand and functional leaders Board of Directors | Name | Position | | :--- | :--- | | Mr. Ermenegildo Zegna di Monte Rubello | Chairperson, Chief Executive Officer and Executive Director | | Mr. Andrea C. Bonomi | Non-Executive Director | | Ms. Angelica Cheung | Non-Executive Director | | Mr. Domenico De Sole | Non-Executive Director | | Mr. Sergio P. Ermotti | Lead Non-Executive Director and Non-Executive Director | | Mr. Ronald B. Johnson | Non-Executive Director | | Ms. Valerie A. Mars | Non-Executive Director | | Mr. Michele Norsa | Non-Executive Director | | Mr. Henry Peter | Non-Executive Director | | Ms. Anna Zegna di Monte Rubello | Non-Executive Director | | Mr. Paolo Zegna di Monte Rubello | Non-Executive Director | - The Senior Management Team includes the CEO, COO/CFO, Zegna Artistic Director, Head of Textiles, and the CEOs of Thom Browne and TOM FORD FASHION[739](index=739&type=chunk)[746](index=746&type=chunk) [Compensation](index=112&type=section&id=B.%20Compensation) This section details FY2024 Board and Senior Management compensation, including a new 2025-2027 executive agreement for the CEO with long-term equity incentives Board of Directors Compensation for FY 2024 (€) | Name | Office Held | Total Compensation | | :--- | :--- | :--- | | Mr. Ermenegildo Zegna di Monte Rubello | Chairperson, CEO & Executive Director | 4,685,292 | | Mr. Andrea C. Bonomi | Non-Executive Director | 164,961 | | Ms. Angelica Cheung | Non-Executive Director | 180,838 | | Mr. Domenico De Sole | Non-Executive Director | 160,873 | | Mr. Sergio P. Ermotti | Lead Non-Executive Director | 181,094 | | Mr. Ronald B. Johnson | Non-Executive Director | 175,873 | | Ms. Valerie A Mars | Non-Executive Director | 190,873 | | Mr. Michele Norsa | Non-Executive Director | 185,873 | | Mr. Henry Peter | Non-Executive Director | 321,521 | | Ms. Anna Zegna di Monte Rubello | Non-Executive Director | 163,089 | | Mr. Paolo Zegna di Monte Rubello | Non-Executive Director | 199,021 | - A new executive agreement for the CEO for **2025-2027** includes a **€2.0 million** base salary, a short-term incentive up to **200% of base**, and a long-term equity incentive targeting **300% of base salary**, tied to TSR, EPS, and net financial position[778](index=778&type=chunk)[779](index=779&type=chunk) - The Senior Management Team (excluding CEO) received **€8.2 million** in fixed pay, **€2.8 million** in short-term cash incentives, and **€7.1 million** related to long-term incentive plans for FY2024[786](index=786&type=chunk)[787](index=787&type=chunk)[789](index=789&type=chunk) [Board Practices](index=121&type=section&id=C.%20Board%20Practices) The Board has three standing committees: Audit, Compensation, and Governance & Sustainability, each with a charter and independent majority, overseeing key governance areas - The Board has three standing committees: Audit, Compensation, and Governance and Sustainability[819](index=819&type=chunk) - The Audit Committee, chaired by Valerie A. Mars, oversees financial reporting integrity, internal controls, and the independent auditor relationship[821](index=821&type=chunk)[823](index=823&type=chunk) - The Compensation Committee, chaired by Henry Peter, determines executive compensation and reviews remuneration structures[824](index=824&type=chunk)[826](index=826&type=chunk) - The Governance and Sustainability Committee, chaired by Michele Norsa, handles board nominations, performance assessments, and oversight of the Group's sustainability policies and reporting[827](index=827&type=chunk)[828](index=828&type=chunk) [Employees](index=123&type=section&id=D.%20Employees) The Group's employee count increased to **7,395** in 2024, driven by Tom Ford Fashion expansion, new store openings, and IT/marketing reinforcement Employee Headcount by Year | Category | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | :--- | | White Collars | 4,997 | 4,734 | 3,953 | | Blue Collars | 2,188 | 2,191 | 2,077 | | Temporary employees | 210 | 276 | 226 | | **Total** | **7,395** | **7,201** | **6,256** | - The increase in employees in 2024 was mainly due to Tom Ford Fashion expansion, new Thom Browne and Zegna retail stores, and hiring in Group IT and marketing[830](index=830&type=chunk)[834](index=834&type=chunk) [ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=124&type=section&id=ITEM%207:%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's ownership structure, with Monterubello as controlling shareholder, and arm's-length related party transactions reviewed by the Audit Committee [Major Shareholders](index=124&type=section&id=A.%20Major%20Shareholders) As of March 14, 2025, Monterubello s.s. is the controlling shareholder with **60.5%** of Ordinary Shares and **74.2%** voting power via loyalty program Beneficial Ownership as of March 14, 2025 | Beneficial Owner | % of Ordinary Shares | % of Voting Power | | :--- | :--- | :--- | | Monterubello s.s. | 60.5% | 74.2% | | Strategic Holding Group S.à r.l. | 12.1% | — | | Ermenegildo Zegna di Monte Rubello | 3.4% | 3.4% | - Monterubello is the controlling shareholder, with voting power enhanced by the loyalty voting structure assigning Special Voting Shares A to long-term shareholders[836](index=836&type=chunk) [Related Party Transactions](index=125&type=section&id=B.%20Related%20Party%20Transactions) The Group conducts arm's-length commercial and financial transactions with related parties, including associates and Zegna family-controlled entities, reviewed by the Audit Committee - All related party transactions are conducted on normal commercial terms and are reviewed and approved by the Audit Committee[843](index=843&type=chunk)[844](index=844&type=chunk) - Key transactions include raw material purchases from associates like Filati Biagioli Modesto and from shareholder-controlled companies like Schneider Group[1600](index=1600&type=chunk) - The Group leases key real estate properties, including manufacturing facilities and offices, from EZ Real Estate S.r.l., an entity connected to the Zegna family[372](index=372&type=chunk)[1600](index=1600&type=chunk) - UBS Group AG is now a related party, providing banking, credit, and hedging services to the Group following Sergio Ermotti's appointment as CEO[1601](index=1601&type=chunk) [ITEM 8: FINANCIAL INFORMATION](index=127&type=section&id=ITEM%208:%20FINANCIAL%20INFORMATION) This section includes audited Consolidated Financial Statements, details legal proceedings like the Thom Browne/Adidas trademark dispute, and outlines the dividend policy [Consolidated Statements and Other Financial Information](index=127&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) This section includes audited financial statements, details the Thom Browne/Adidas trademark dispute, and outlines the dividend policy targeting **25-30%** payout - Thom Browne, Inc. is involved in ongoing trademark infringement legal proceedings with Adidas AG, with initial rulings favorable to Thom Browne but some appeals pending[855](index=855&type=chunk)[856](index=856&type=chunk)[857](index=857&type=chunk) - The company's dividend policy targets a payout ratio of **25% to 30%** of profit attributable to shareholders[859](index=859&type=chunk) - For FY2024, the company intends to propose a dividend of **€0.12 per share**, totaling approximately **€30 million**, subject to 2025 annual General Meeting approval[865](index=865&type=chunk) [ITEM 10: ADDITIONAL INFORMATION](index=129&type=section&id=ITEM%2010:%20ADDITIONAL%20INFORMATION) This section details the company's corporate structure, share capital, loyalty voting, board powers, shareholder meetings, and material Dutch and Italian tax considerations [Memorandum and Articles of Association](index=129&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) Governed by Dutch law, the company has a one-tier board and a loyalty voting structure rewarding long-term shareholders with additional voting rights - The company has a loyalty voting structure granting Special Voting Shares A, B, and C for 2, 5, and 10 years of Ordinary Share holding, providing 1, 4, and 9 extra votes per share respectively[924](index=924&type=chunk)[925](index=925&type=chunk) - The Board is authorized to issue shares and limit or exclude pre-emptive rights for five years from the Business Combination Closing Date[881](index=881&type=chunk)[885](index=885&type=chunk) - The IIAC Sponsor has the right to nominate one Non-Executive Director, provided it maintains a minimum holding of **5%** of outstanding Ordinary Shares[905](index=905&type=chunk)[36](index=36&type=chunk) - Major corporate decisions, including business transfers or acquiring at least one-third of assets, require General Meeting approval[918](index=918&type=chunk) [Taxation](index=142&type=section&id=E.%20Taxation) This section details U.S., Dutch, and Italian tax considerations for shareholders, including dividend and capital gains taxation, PFIC status, and loyalty voting share treatment - For U.S. tax purposes, the company does not expect to be classified as a Passive Foreign Investment Company (PFIC), though this is an annual determination[984](index=984&type=chunk)[986](index=986&type=chunk) - The U.S. federal income tax treatment of receiving, owning, and disposing of Special Voting Shares from the loyalty program is uncertain[998](index=998&type=chunk) - The company obtained a Dutch tax ruling (valid until December 31, 2026) confirming distributions will not be subject to Dutch dividend withholding tax, as it is exclusively tax resident in Italy[1019](index=1019&type=chunk)[185](index=185&type=chunk) - For Italian tax purposes, dividends to non-resident individuals are generally subject to a **26%** withholding tax, potentially reduced to **1.2%** for qualifying EU/EEA corporate entities or by tax treaties[1062](index=1062&type=chunk)[1065](index=1065&type=chunk) - Capital gains realized by non-Italian resident holders on the sale of non-qualified listed shares are generally not subject to Italian taxation[1098](index=1098&type=chunk) [ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS](index=166&type=section&id=ITEM%2011:%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISKS) This section refers to Note 35 of the Consolidated Financial Statements for detailed disclosures on market risks, including foreign currency, interest rate, and credit risk - Detailed disclosures about market risks, including foreign currency, interest rate, and credit risk, are provided in Note 35 to the Consolidated Financial Statements[1128](index=1128&type=chunk) PART II [ITEM 15: CONTROLS AND PROCEDURES](index=167&type=section&id=ITEM%2015:%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and ICFR were ineffective as of December 31, 2024, due to material weaknesses, primarily affecting Tom Ford Fashion, with a 2025 remediation plan - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures and internal control over financial reporting (ICFR) were not effective[1136](index=1136&type=chunk)[1149](index=1149&type=chunk) - Material weaknesses were identified in COSO's Control Activities and Information & Communication components, primarily due to issues at the newly acquired Tom Ford Fashion business, including ineffective segregation of duties[1153](index=1153&type=chunk)[1154](index=1154&type=chunk) - The material weakness related to the Monitoring component, identified in 2023, was successfully remediated during 2024[1146](index=1146&type=chunk) - A remediation plan for 2025 is in place to address remaining material weaknesses, focusing on designing and implementing controls, including segregation of duties, at Tom Ford Fashion[1156](index=1156&type=chunk) - Deloitte & Touche S.p.A. issued an adverse opinion on the company's internal control over financial reporting as of December 31, 2024[1163](index=1163&type=chunk)[1218](index=1218&type=chunk) [ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES](index=172&type=section&id=ITEM%2016C:%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) This section details fees paid to Deloitte & Touche S.p.A., totaling **€6.011 million** in 2024, categorized by service, with Audit Committee pre-approval for independence Principal Accountant Fees (€ thousands) | Fee Category | 2024 | 2023 | | :--- | :--- | :--- | | Audit fees | 5,318 | 5,972 | | Audit-related fees | 251 | 127 | | Tax fees | 374 | 356 | | All other fees | 68 | 28 | | **Total** | **6,011** | **6,483** | - The Audit Committee pre-approves all audit and non-audit services from the independent registered public accounting firm to ensure independence[1178](index=1178&type=chunk) [ITEM 16G: CORPORATE GOVERNANCE](index=173&type=section&id=ITEM%2016G:%20CORPORATE%20GOVERNANCE) As a foreign private issuer, the company's corporate governance differs from NYSE standards, particularly in board independence and auditor appointment, following 'comply or explain' - The company follows Dutch corporate governance practices, differing from NYSE standards for U.S. domestic companies, especially in board independence definitions and committee composition[1184](index=1184&type=chunk) - Under Dutch law, the external auditor is appointed by the General Meeting, unlike NYSE standards requiring audit committee appointment[1184](index=1184&type=chunk) - The Compensation Committee is not required to be entirely independent; currently, two out of three members are independent[1184](index=1184&type=chunk) [ITEM 16K: CYBERSECURITY](index=174&type=section&id=ITEM%2016K:%20CYBERSECURITY) The Group manages cybersecurity risk via an integrated framework, overseen by the Audit Committee, with no material incidents in the last three fiscal years - Cybersecurity risk is managed through a Group-wide framework, with the Board's Audit Committee providing oversight[1191](index=1191&type=chunk)[1200](index=1200&type=chunk) - The governance structure includes a CISO for each operating segment and a central Cybersecurity Committee for significant incident management[1200](index=1200&type=chunk)[1202](index=1202&type=chunk) - The Group uses external consultants for services, penetration testing, and incident response, and maintains a Group-wide cybersecurity insurance policy[1192](index=1192&type=chunk)[1196](index=1196&type=chunk) - The company experienced a ransomware attack in August 2021 but has not had any material cybersecurity incidents in the last three fiscal years[1199](index=1199&type=chunk) PART III [ITEM 18: FINANCIAL STATEMENTS](index=176&type=section&id=ITEM%2018:%20FINANCIAL%20STATEMENTS) This section presents the audited Consolidated Financial Statements for 2022-2024, including the independent auditor's report with an unqualified opinion on financials and an adverse opinion on ICFR [Consolidated Statement of Profit and Loss](index=183&type=section&id=Consolidated%20Statement%20of%20Profit%20and%20Loss) Profit decreased to **€90.9 million** in 2024 from **€135.7 million** in 2023, despite revenues increasing to **€1,946.6 million**, due to higher SG&A Consolidated Statement of Profit and Loss Summary (€ thousands) | Line Item | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Revenues | 1,946,647 | 1,904,549 | 1,492,840 | | Gross profit | 1,296,560 | 1,224,314 | 928,008 | | Operating profit | 166,852 | 208,148 | 147,777 | | Profit before taxes | 130,608 | 169,094 | 101,081 | | **Profit** | **90,861** | **135,661** | **65,279** | Earnings Per Share (€) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Basic earnings per share | 0.31 | 0.49 | 0.22 | | Diluted earnings per share | 0.30 | 0.48 | 0.21 | [Consolidated Statement of Financial Position](index=185&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets increased to **€2,834.0 million** at December 31, 2024, with equity growing to **€982.9 million**, driven by higher non-current assets Consolidated Statement of Financial Position Summary (€ thousands) | Line Item | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **2,833,973** | **2,767,011** | | Total Non-current assets | 1,627,811 | 1,479,375 | | Total Current assets | 1,206,162 | 1,287,636 | | **Total Equity and Liabilities** | **2,833,973** | **2,767,011** | | Total Equity | 982,887 | 900,896 | | Total Liabilities | 1,851,086 | 1,866,115 | [Consolidated Cash Flow Statement](index=186&type=section&id=Consolidated%20Cash%20Flow%20Statement) Net cash decreased by **€77.1 million** in 2024, with **€279.1 million** from operations, **€126.0 million** used in investing, and **€234.5 million** used in financing Consolidated Cash Flow Statement Summary (€ thousands) | Line Item | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 279,129 | 275,382 | 146,398 | | Net cash flows (used in)/from investing activities | (126,014) | 21,786 | (57,335) | | Net cash flows used in financing activities | (234,534) | (250,494) | (296,997) | | **Net (decrease)/increase in cash and cash equivalents** | **(77,149)** | **41,958** | **(205,470)** | [Notes to the Consolidated Financial Statements](index=188&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes provide detailed accounting policies and breakdowns for segment reporting, revenue, intangible assets, PP&E, leases, borrowings, related parties, and business combinations - The Group operates in three segments: Zegna, Thom Browne, and Tom Ford Fashion, with Zegna being the largest at **€1.35 billion** in 2024 revenues before intersegment eliminations[1406](index=1406&type=chunk)[1411](index=1411&type=chunk) - Goodwill and indefinite-lived brands totaled **€448.8 million** at year-end 2024, primarily allocated to the Thom Browne CGU (**€415.5 million**), with no impairment found[1466](index=1466&type=chunk)[1471](index=1471&type=chunk) - The April 2023 TOM FORD FASHION acquisition involved recognizing a license agreement as an intangible asset with a fair value of **€99.3 million** and a **30-year** useful life[1472](index=1472&type=chunk)[1662](index=1662&type=chunk) - The Group has a put option liability for the remaining **8%** non-controlling interest in Thom Browne, valued at **€127.1 million** at December 31, 2024, with exercise price based on future EBITDA[1539](index=1539&type=chunk)[1541](index=1541&type=chunk) - Total borrowings were **€373.6 million** at December 31, 2024, down from **€402.6 million** in 2023, with **€335 million** in committed revolving credit lines[1530](index=1530&type=chunk)[1537](index=1537&type=chunk)

[Ermenegildo Zegna Group Full Year 2024 Results](index=1&type=section&id=Ermenegildo%20Zegna%20Group%20Full%20Year%202024%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) The Group achieved €184 million Adjusted EBIT in a challenging 2024, driven by ZEGNA's performance and strategic brand integrations, maintaining a cautious 2025 outlook - The ZEGNA brand led the Group's performance, driven by its competitive edge and a disciplined focus on key projects and cost control[5](index=5&type=chunk) - Strategic actions in **2024** included streamlining Thom Browne's wholesale channel to enhance its Direct-to-Consumer focus and continuing the integration of TOM FORD FASHION[5](index=5&type=chunk) - The Group's Filiera (supply chain) is emphasized as a core R&D powerhouse and a key driver of innovation for all its brands[6](index=6&type=chunk) - The outlook for **2025** is cautious, with a primary focus on protecting brand identity through discipline, agility, and focused execution[7](index=7&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) FY **2024** revenues grew **2.2%** to **€1,946.6 million**, but profit declined to **€90.9 million** and Adjusted EBIT to **€184.0 million** FY 2024 Key Financial Metrics | Metric | FY 2024 | FY 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | €1,946.6M | €1,904.5M | +2.2% | | Profit | €90.9M | €135.7M | -33.0% | | Adjusted EBIT | €184.0M | €220.2M | -16.4% | | Gross Profit Margin | 66.6% | 64.3% | +2.3 p.p. | | Profit Margin | 4.7% | 7.1% | -2.4 p.p. | - The Group proposes a dividend of **€0.12** per ordinary share[8](index=8&type=chunk) - Profit performance was impacted by a normalized effective tax rate of **30%** in FY **2024**, compared to a lower **20%** rate in FY **2023**[8](index=8&type=chunk)[16](index=16&type=chunk) - Strategic investments in talent, store network, and marketing continued throughout the year to build a foundation for sustainable growth[8](index=8&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) [Results of Operations](index=2&type=section&id=Results%20of%20Operations) FY **2024** revenues grew **2.2%** to **€1,946.6 million** with gross margin at **66.6%**, but increased SG&A and tax rates reduced net profit to **€90.9 million** Consolidated Income Statement Summary (FY 2024 vs FY 2023) | Metric (€ thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Revenues | 1,946,647 | 1,904,549 | | Gross profit | 1,296,560 | 1,224,314 | | Operating profit | 166,852 | 208,148 | | Profit before taxes | 130,608 | 169,094 | | Profit | 90,861 | 135,661 | - The gross profit margin improved to **66.6%** from **64.3%**, primarily due to the increased proportion of Direct-to-Consumer (DTC) revenues, which reached **78%** of branded product sales[12](index=12&type=chunk) - SG&A expenses increased to **€1,008.3 million** (**51.8%** of revenues) from **€901.4 million** (**47.3%** of revenues) in FY **2023**, reflecting investments in talent, the store network, and organizational structure[13](index=13&type=chunk) - The decrease in profit was partly due to the effective tax rate normalizing to **30%** from **20%** in the prior year and a **€6.1 million** increase in foreign exchange losses[16](index=16&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) In FY **2024**, Zegna revenues grew **2.0%**, Thom Browne declined **17.2%**, and Tom Ford Fashion grew **33.5%**, with segment profitability impacted by strategic investments Revenues by Segment (FY 2024 vs FY 2023) | Segment (€ thousands) | 2024 | 2023 | Change % | | :--- | :--- | :--- | :--- | | Zegna | 1,348,839 | 1,322,045 | +2.0% | | Thom Browne | 314,818 | 380,287 | -17.2% | | Tom Ford Fashion | 314,514 | 235,544 | +33.5% | Adjusted EBIT & Margin by Segment (FY 2024 vs FY 2023) | Segment | Adj. EBIT 2024 (€M) | Adj. EBIT Margin 2024 | Adj. EBIT 2023 (€M) | Adj. EBIT Margin 2023 | | :--- | :--- | :--- | :--- | :--- | | Zegna | 187.6 | 13.9% | 193.5 | 14.6% | | Thom Browne | 27.3 | 8.7% | 59.0 | 15.5% | | Tom Ford Fashion | (10.1) | (3.2%) | (1.7) | (0.7%) | - The Thom Browne segment's Adjusted EBIT margin decline was a consequence of lower revenues and investments made to reinforce its retail organization[23](index=23&type=chunk) - The Tom Ford Fashion segment's operating loss widened due to investments in talent, store network, and reinforcement of business functions like compliance and IT to support future growth[24](index=24&type=chunk) [Financial Position and Cash Flow](index=5&type=section&id=Financial%20Position%20and%20Cash%20Flow) FY **2024** saw increased capital expenditure to **€125.5 million** and a shift from net cash surplus to **€94.2 million** net financial indebtedness due to M&A, with Free Cash Flow at **€10.1 million** Key Financial Position & Cash Flow Metrics (FY 2024 vs FY 2023) | Metric (€ thousands) | At Dec 31, 2024 | At Dec 31, 2023 | | :--- | :--- | :--- | | Capital Expenditure | 125,529 | 77,877 | | Trade Working Capital | 460,034 | 448,909 | | Net Financial Indebtedness/(Cash Surplus) | 94,225 | 10,810 | | Free Cash Flow | 10,051 | 71,773 | - The increase in capital expenditure is mainly attributable to the expansion of the DTC channel for all brands, IT infrastructure reinforcement, and initial investments in a new shoe production plant[27](index=27&type=chunk) - The shift to a Net Financial Indebtedness position primarily reflects cash-out for M&A transactions, including acquisitions of Korean businesses for Thom Browne and ZEGNA[29](index=29&type=chunk) - Despite lower operating profit and higher capex, the Group maintained positive Free Cash Flow generation of **€10.1 million**[31](index=31&type=chunk) [Outlook and Corporate Information](index=6&type=section&id=Outlook%20and%20Corporate%20Information) [Mid-term Targets and Subsequent Events](index=6&type=section&id=Mid-term%20Targets%20and%20Subsequent%20Events) The Group updated its **2027** targets to **€2.2-€2.4 billion** revenues and **€250-€300 million** Adjusted EBIT, proposing a **€0.12** per share dividend Updated Mid-Term Targets (2027) | Metric | Target Range | | :--- | :--- | | Revenues | €2,200 - €2,400 million | | Adjusted EBIT | €250 - €300 million | - The Board of Directors proposed a dividend of **€0.12** per share, subject to shareholder approval at the AGM on June **26**, **2025**[32](index=32&type=chunk) [Corporate Overview and Investor Information](index=6&type=section&id=Corporate%20Overview%20and%20Investor%20Information) Ermenegildo Zegna Group, a global luxury company with ZEGNA, Thom Browne, and TOM FORD FASHION brands, will host a conference call on March **27**, **2025**, with key financial releases scheduled throughout the year - The Group will host a conference call and webcast on March **27**, **2025**, to discuss the financial results[34](index=34&type=chunk) Upcoming Financial Releases in 2025 | Date | Event | | :--- | :--- | | April 24, 2025 | Q1 2025 Revenues | | July 30, 2025 | H1 2025 Preliminary Revenues | | September 5, 2025 | H1 2025 Financial Results | | October 23, 2025 | Q3 2025 Revenues | [Appendix: Detailed Financial Tables](index=9&type=section&id=Appendix%3A%20Detailed%20Financial%20Tables) [Detailed Revenue Breakdowns](index=9&type=section&id=Detailed%20Revenue%20Breakdowns) FY **2024** revenues of **€1,946.6 million** saw ZEGNA grow **4.9%**, Thom Browne decline **16.8%**, and TOM FORD FASHION grow **33.5%**, with DTC at **77.6%** of branded sales Revenues by Brand and Product Line (FY 2024 vs FY 2023) | Brand/Product Line (€ thousands) | 2024 | 2023 | Change % | | :--- | :--- | :--- | :--- | | ZEGNA brand | 1,163,722 | 1,109,491 | +4.9% | | Thom Browne | 314,712 | 378,410 | -16.8% | | TOM FORD FASHION | 314,514 | 235,531 | +33.5% | | Textile | 138,153 | 150,986 | -8.5% | Revenues by Geographic Area (FY 2024 vs FY 2023) | Geographic Area (€ thousands) | 2024 | 2023 | Change % | | :--- | :--- | :--- | :--- | | EMEA | 680,259 | 658,694 | +3.3% | | Americas | 524,790 | 454,890 | +15.4% | | Greater China Region | 509,378 | 595,515 | -14.5% | | Rest of APAC | 229,877 | 192,492 | +19.4% | - Direct-to-Consumer (DTC) revenues grew **9.9%** to **€1,390.7 million**, now accounting for **77.6%** of branded product sales, up from **73.4%** in **2023** Conversely, wholesale branded revenues declined by **12.2%**[45](index=45&type=chunk) - The total number of monobrand stores increased to **664** at the end of **2024** from **636** at the end of **2023**, with growth primarily in the DTC channel[50](index=50&type=chunk) [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) The FY **2024** consolidated financial statements show profit declined to **€90.9 million**, total assets grew to **€2,834.0 million**, and a net cash decrease of **€77.1 million** Consolidated Statement of Profit and Loss (FY 2024) | Metric (€ thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Revenues | 1,946,647 | 1,904,549 | | Operating profit | 166,852 | 208,148 | | Profit | 90,861 | 135,661 | | Basic earnings per share | €0.31 | €0.49 | Consolidated Statement of Financial Position (at Dec 31) | Metric (€ thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total assets | 2,833,973 | 2,767,011 | | Total equity | 982,887 | 900,896 | | Total liabilities | 1,851,086 | 1,866,115 | Consolidated Cash Flow Statement (FY 2024) | Metric (€ thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash flows from operating activities | 279,129 | 275,382 | | Net cash flows (used in)/from investing activities | (126,014) | 21,786 | | Net cash flows used in financing activities | (234,534) | (250,494) | | Net (decrease)/increase in cash | (77,149) | 41,958 | [Non-IFRS Financial Measures Reconciliation](index=17&type=section&id=Non-IFRS%20Financial%20Measures%20Reconciliation) This section reconciles non-IFRS measures including Adjusted EBIT, Net Financial Indebtedness, and Free Cash Flow, and details Constant Currency and Organic Growth revenue calculations - Adjusted EBIT of **€184.0 million** was calculated by adjusting operating profit (**€166.9M**) for items including **€11.2M** in net store impairments and **€4.9M** in severance indemnities[66](index=66&type=chunk) - Free Cash Flow of **€10.1 million** is derived from net cash from operating activities (**€279.1M**) less payments for property, plant & equipment (**€100.1M**), intangible assets (**€25.4M**), and lease liabilities (**€143.5M**)[82](index=82&type=chunk) Reconciliation of Reported to Organic Revenue Growth (FY 2024) | | Reported Growth | less FX | Constant Currency | less Acq. & Disp. | less License Chg. | Organic Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Group** | **2.2%** | **(1.2%)** | **3.4%** | **5.7%** | **(0.4%)** | **(1.9%)** | | Zegna Segment | 2.0% | (1.4%) | 3.4% | 0.7% | 0.2% | 2.5% | | Thom Browne | (17.2%) | (0.8%) | (16.4%) | 4.4% | — | (20.8%) | | Tom Ford Fashion | 33.5% | (0.8%) | 34.3% | 35.0% | — | (0.7%) |

Ermenegildo Zegna (ZGN) Q4 2024 Earnings Call March 27, 2025 09:00 AM ET Company Participants Ermenegildo Zegna - Chairman and CEOGianluca Ambrogio Tagliabue - COO and CFOPaola Durante - Chief of External RelationsAdrien Duverger - Equity Research AssociateOliver Chen - Managing Director - Retail, Luxury, New Platforms Sector HeadMelania Grippo - Equity Research - European Luxury Goods Conference Call Participants Chris Huang - Analyst Operator Good afternoon and good morning, everyone. Thank you for joinin ...

Ermenegildo Zegna (ZGN) Q4 2024 Earnings Call March 27, 2025 09:00 AM ET Company Participants Ermenegildo Zegna - Chairman and CEOGianluca Ambrogio Tagliabue - COO and CFOPaola Durante - Chief of External RelationsAdrien Duverger - Equity Research AssociateOliver Chen - Managing Director - Retail, Luxury, New Platforms Sector HeadMelania Grippo - Equity Research - European Luxury Goods Conference Call Participants Chris Huang - Analyst Operator Good afternoon and good morning, everyone. Thank you for joinin ...