[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 ...

Financial Data and Key Metrics Changes - The company reported an adjusted EBIT of EUR 184 million for FY 2024, down from EUR 220 million in 2023, reflecting a challenging sector environment [21][22] - Revenues for FY 2024 were confirmed at USD 1,947 million, up 2% year-on-year, driven by organic growth in the Zegna brand [15] - Gross profit rose by 230 basis points to USD 1,297 million, with a gross margin of 66.6% [16] - The effective tax rate increased to 30% from 20% in the prior year, primarily due to high non-taxable changes [24] Business Line Data and Key Metrics Changes - The Thom Browne segment experienced a 21% organic revenue decline, significantly impacting adjusted EBIT performance [22] - The Tom Ford Fashion segment reported a loss at the adjusted EBIT level, with the second half of 2024 slightly above breakeven [22] - The Vena segment generated an adjusted EBIT slightly up by 14%, reflecting strategic project pursuits despite a challenging market [23] Market Data and Key Metrics Changes - The company noted a challenging environment in Greater China, expecting a negative trend for the overall region in 2025 [12][34] - In contrast, the company reported strong performance in Europe, particularly in the Emirates, with no signs of deterioration [39] - The U.S. market showed resilience, with positive traction for both Zegna and Tom Ford brands [32] Company Strategy and Development Direction - The company is focusing on direct-to-consumer (DTC) strategies, with expectations for DTC revenues to reach 80% of branded revenues [44] - There is a commitment to sustainability and community care, with ongoing investments in traceable raw materials and diversity initiatives [11] - The company plans to continue reducing its wholesale footprint across all brands, particularly at Thom Browne [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the U.S. market, despite concerns about consumer slowdown [32] - The outlook for 2025 remains cautious, with expectations of low single-digit growth in revenue and adjusted EBIT [13] - Management emphasized the importance of maintaining long-term investments in marketing and CapEx despite current challenges [110] Other Important Information - The company proposed a dividend distribution of EUR 0.12 per ordinary share, totaling approximately EUR 13 million [25] - CapEx for 2025 is expected to remain in the range of 6% to 7%, with significant investments in the new factory in Parma [106] Q&A Session All Questions and Answers Question: Trends in Q1 and U.S. market outlook - Management noted resilience in the U.S. market, with good traction for Zegna and Tom Ford, while expressing concerns about Canada and Greater China [32][34] Question: EBIT margin and DTC growth - Management confirmed that DTC is expected to be the growth engine, with a shift from 73% to 78% in branded revenues [44] Question: Updates on Thom Browne product adjustments - Management indicated significant improvements in product evolution and a more commercial approach to the brand [48] Question: Growth opportunities in China - Management remains positive about China, expecting gradual improvement, particularly among high spenders [60][64] Question: Integration of Tom Ford Fashion - Integration is progressing well, with positive reactions from customers and wholesalers [67] Question: Wholesale channel rationalization - Management confirmed ongoing rationalization, with expectations of continued declines in wholesale across brands [71] Question: CapEx and supply chain updates - CapEx for 2025 is projected to be between 6% and 7%, with the new factory in Parma expected to be operational in the second half of next year [106]

Financial Data and Key Metrics Changes - In Q4 2024, revenue grew by 3% both organically and reported, driven by the Zegna brand's 7% organic growth and an 8% organic growth in the consumer channel at the group level [4][5] - The Zegna segment recorded a 4% organic growth, while TOM FORD FASHION also achieved a 4% revenue growth [26][27] - The overall performance in Q4 showed a sequential improvement compared to previous quarters, particularly in the Americas, which saw a 15% organic growth [30][31] Business Line Data and Key Metrics Changes - The Zegna brand's performance was strong, particularly in luxury leisurewear and shoes, contributing significantly to growth [27][129] - Thom Browne's revenue showed improvements, although it is still transitioning to a DTC-driven model, with a noted 4% organic growth in DTC [14][28] - TOM FORD FASHION reported a 9% organic growth in the DTC channel, indicating a positive trend driven by strong commercial organization efforts [40][41] Market Data and Key Metrics Changes - The Americas accounted for 27% of full-year revenues, with a strong sequential acceleration in Q4, particularly in the U.S. market [29][30] - EMEA recorded a 5% organic growth in Q4, driven by double-digit growth in Zegna and TOM FORD FASHION [29] - Greater China region revenues declined by 11% in Q4, although this was an improvement from a 22% decline in Q3 [31][32] Company Strategy and Development Direction - The company is focusing on long-term strategies, including enhancing CRM and personalization efforts, particularly for the Zegna brand [6][8] - There is a clear emphasis on integrating corporate functions across brands to drive efficiency and cohesion [7][8] - The company aims to strengthen its community of brands and consolidate Zegna's leadership in timeless luxury [12][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing uncertainties in the sector but expressed optimism about the positive trends in the U.S. and Middle East markets [21][22] - The company is cautious about the Chinese market, anticipating volatility in 2025 but noting some positive signs in early 2025 [106][112] - Management emphasized the importance of a personalized approach to customer engagement and the need to adapt to changing market dynamics [109][110] Other Important Information - The company is investing in its integrated Italian supply chain, which provides a competitive advantage in terms of excellence and innovation [18][19] - A new shoe factory is planned to be operational by 2026, further enhancing production capabilities [18] Q&A Session Summary Question: Thoughts on TOM FORD's performance in 2025 - Management expects 2025 to be a transition year, focusing on brand legacy and product consistency across collections [48][51] Question: Performance of the top 5% clientele for Zegna - The top 5% of clients contribute 40% of Zegna's revenues, with this segment showing solid double-digit growth, particularly in the Americas [53][54] Question: Growth prospects for the Americas and product assortment - Management is optimistic about continued growth in the U.S. market, driven by strong merchandising and customer engagement strategies [76][78] Question: Insights on the performance of the Triple Stitch franchise - The Triple Stitch family is expected to account for around 15% of sales in 2024, with a focus on exclusivity and controlled distribution [134][145] Question: Pricing strategy and AUR trends - Average unit rates have increased due to a focus on higher-end products, with low-single-digit price increases implemented to offset inflation [140][142]

FY/Q4 2024 PRELIMINARY REVENUES Unaudited figures January 27, 2025 1 Disclaimer Non-IFRS Financial Measures The Group's management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: revenues on a constant currency basis (constant currency) and revenues on an organic growth basis (organic growth or organic). The Group's management believes that these non-IFRS financial measures provide useful and relevant information regarding the Group's financial ...

Company and Industry Overview * **Company**: Ermenegildo Zegna N.V. (NYSE:ZGN) * **Industry**: Luxury fashion and accessories * **Timeframe**: H1 2024 * **Key Challenges**: Deep normalization phase in the luxury sector, volatile and challenging global environment Core Points and Arguments * **One Brand Strategy**: Zegna is doubling down on its One Brand strategy, focusing on targeted audience engagement, evolving clientele experience, and transforming collections into iconic products. * **VILLA Zegna New York**: Launched to celebrate Zegna's heritage and engage with value customers through immersive experiences and exclusive events. * **Thom Browne**: Significant changes and reinforcement of the management team, with a focus on strengthening the organization in China, headquarters, and other regions. * **Tom Ford**: Haider Ackermann appointed as new Creative Director, expected to contribute to the brand's long-term ambition. * **Filiera**: Continued investment in Filiera to strengthen production capacity and resilience. * **China**: Challenging and volatile environment, but with positive traction from potential and loyal customers. Plans for store development and expansion are being reconsidered. * **Financial Results**: 6% revenue growth year-over-year driven by Zegna brand and Tom Ford consolidation. Gross profit margin improved by 220 bps to 66.4%. Adjusted EBITDA down 33% compared to H1 2023 due to top-line decline at Thom Browne and costs at Tom Ford Fashion. * **Investments**: Continued investment in key projects, including the new shoe factory in Parma, Italy, and store network expansion. Other Important Points * **Channel Mix**: Direct-to-consumer (DTC) revenue generated 76% of branded revenues, up from 72% a year ago. * **Inventory Management**: Improved inventory management contributed to the gross profit margin improvement. * **Marketing Expenses**: Increased to 7% of revenues due to events and fashion shows in the first half of the year. * **Capital Expenditures (CapEx)**: Reached EUR60 million in H1 2024, with a focus on store network expansion and production investments. * **Trade Working Capital**: Reached EUR476 million at the end of June, with stable trade receivables and inventory levels. * **Net Financial Indebtedness**: Reached EUR66 million at the end of June due to the acquisition of a stake in Thom Browne and the Korean businesses in Zegna and Thom Browne.

Financial Performance - Revenues for the six months ended June 30, 2024, were €960,122 thousand, an increase of 6.3% compared to €903,059 thousand in 2023[13] - Profit for the same period decreased to €31,332 thousand from €52,116 thousand in 2023, reflecting a decline of 39.9%[13] - Adjusted EBIT for the first half of 2024 was €80,910 thousand, down 32.5% from €119,904 thousand in 2023[13] - Operating profit for the six months ended June 30, 2024, was €73,081 thousand, representing a margin of 7.6%, down from €116,509 thousand or 12.9% in 2023[18] - The Group's profit before taxes for the six months ended June 30, 2024, was €48,550 thousand, compared to €78,278 thousand in 2023, reflecting a decrease in profitability[18] - The Group's profit for the six months ended June 30, 2024, was €31.3 million, a decrease from €52.1 million in the same period of 2023, representing a decline of 39.9%[116] - Adjusted EBIT for the same period was €80.9 million, down from €119.9 million in 2023, reflecting a decrease of 32.6%[116] - Adjusted EBITDA for the six months ended June 30, 2024, was €189.5 million, compared to €206.9 million in 2023, a decrease of 8.4%[120] - Adjusted Profit for the first half of 2024 was €37.2 million, down from €54.9 million in 2023, a decline of 32.4%[124] Revenue Breakdown - The TOM FORD FASHION segment generated revenues of €148,493 thousand, an increase of €84,478 thousand or +132.0% compared to €64,015 thousand in 2023, benefiting from a full six months contribution following the TFI Acquisition[21] - The ZEGNA brand reported revenues of €566,067 thousand, an increase of €24,748 thousand or +4.6%, primarily driven by strong growth in the Direct to Consumer (DTC) channel[21] - Thom Browne revenues decreased by €40,230 thousand or -19.4%, reflecting the decision to streamline the wholesale business[22] - Revenues for the Thom Browne segment decreased to €166,935 thousand, a decline of €41,024 thousand or -19.7% from €207,959 thousand in 2023[71] - Zegna segment revenues for the six months ended June 30, 2024 were €660,538 thousand, an increase of €16,228 thousand or +2.5% compared to €644,310 thousand in 2023[66] - Revenues for the Tom Ford Fashion segment increased by €84,466 thousand or +131.9% to €148,493 thousand for the six months ended June 30, 2024, compared to €64,027 thousand in the same period of 2023[78] Cost and Expenses - Selling, general and administrative expenses increased by €81,820 thousand or +19.7% to €497,612 thousand, with expenses as a percentage of revenues rising from 46.0% to 51.8%[39][41] - Marketing expenses for the six months ended June 30, 2024, increased by €19,221 thousand or +40.4% to €66,751 thousand, with marketing expenses as a percentage of revenues rising from 5.3% to 7.0%[45] - The Group's financial expenses decreased to €29,267 thousand, down from €44,592 thousand in the previous year[18] - Cost of sales for the six months ended June 30, 2024, was €322,678 thousand, with cost of sales as a percentage of revenues decreasing to 33.6% from 35.8%[33][34] Cash Flow and Liquidity - Net cash flows from operating activities increased by €12,865 thousand to €120,448 thousand for the six months ended June 30, 2024, compared to €107,583 thousand in the same period of 2023[84] - Net cash flows used in investing activities amounted to €81,741 thousand for the six months ended June 30, 2024, compared to net cash flows from investing activities of €60,958 thousand in the same period of 2023, a negative change of €142,699 thousand[86] - Cash and cash equivalents at the end of the period decreased to €225,316 thousand from €255,040 thousand in the same period of 2023, a decrease of €29,724 thousand[83] - Net Financial Indebtedness increased to €65,509 thousand at June 30, 2024, compared to €10,810 thousand at December 31, 2023, primarily due to negative Free Cash Flow and cash used for acquisitions[96] - Cash and cash equivalents decreased by 24.0% to €225,316 thousand at June 30, 2024, from €296,279 thousand at December 31, 2023[107] Strategic Initiatives - The TFI Acquisition, completed on April 28, 2023, allows the Group to expand its luxury offerings in both men's and women's fashion and accessories[5] - The Group's strategy includes enhancing its position in the luxury womenswear and leather goods segments through acquisitions and brand development[10] - The Group's unique supply chain, Filiera, provides a competitive advantage by integrating high-end textile production with luxury manufacturing capabilities[12] - The Group's management emphasizes the importance of safeguarding brand integrity and responding to changing customer preferences as part of its strategic outlook[7] Market Performance - Revenue growth in the Americas was €55,934 thousand or +29.4%, driven by strong performance of the ZEGNA brand and 9 net store openings, with a total of 64 DTC stores as of June 30, 2024[29] - The Greater China Region experienced a revenue decline of €40,511 thousand or -13.2%, attributed to challenging conditions in the luxury sector[31] - EMEA revenues increased by €13,911 thousand or +4.3%, primarily due to high double-digit growth of the ZEGNA brand[29] - Rest of APAC revenues rose by €27,800 thousand or +33.8%, driven by double-digit organic growth in Japan[29] Financial Risks and Management - The Group's financial risks include exposure to foreign currency exchange rates, interest rates, and liquidity risks[150] - The Group's management uses several non-IFRS financial measures to assess performance, including Adjusted EBIT, Adjusted EBITDA, and Adjusted Profit, which provide insights into underlying operational performance[112] - The Group's financial performance is impacted by significant costs related to severance, legal disputes, and transaction costs associated with acquisitions[123] Store Operations and Expansion - The Group operates a total of 437 direct-to-consumer stores, including 279 ZEGNA, 102 Thom Browne, and 56 TOM FORD FASHION stores as of June 30, 2024[13] - The Group opened 36 net new stores for Thom Browne as of June 30, 2024, compared to the previous year, reflecting ongoing expansion efforts[73] - New store openings in the Zegna segment included locations in EMEA, Greater China, and APAC, while Thom Browne and Tom Ford Fashion segments also expanded with new stores in key regions[92][94] Other Notable Information - A new Creative Director, Haider Ackermann, was appointed for TOM FORD on September 4, 2024, following Peter Hawkings' departure[152] - The Group's interest in Consorzio Re.Crea was reduced from 15.5% to 15.4% due to a capital increase, reflecting ongoing adjustments in its investment portfolio[188] - The average exchange rate for the U.S. Dollar for the six months ended June 30, 2024, was 1.081, compared to 1.105 at December 31, 2023, indicating a strengthening Euro[181]

Financial Data and Key Metrics Changes - In H1 2024, the Group reported €960 million in revenue, reflecting a 6% growth reported and 8% at constant currency [21][28] - Q2 contributed €497 million, up 5% year-on-year, with improved underlying organic growth from minus 5% in Q1 to flat in Q2 [21][28] - On an organic basis, Group revenues in H1 were down 2.7%, with Q2 organic growth at minus 0.4% [10][21] Business Line Data and Key Metrics Changes - The Zegna segment recorded positive organic growth in Q2 despite a flat performance in the textile business [10] - Thom Browne revenues in Q2 reached €88 million, down 18% in organic terms, showing improvement from minus 35% in Q1 [11] - TOM FORD FASHION revenues reached €83 million in Q2, with a DTC contribution close to 60% of brand revenues [17] Market Data and Key Metrics Changes - The Americas region recorded a 5% organic growth in Q2, driven by Zegna's strong performance [13] - Greater China region revenues declined by 10% organically in Q2, showing slight improvement from minus 13% in Q1 [13] - Japan showed strong double-digit organic growth for both Zegna and Thom Browne in Q2 [14] Company Strategy and Development Direction - The company aims to create a stronger, more global, and diversified luxury business, focusing on expanding TOM FORD into women's wear and leather goods [22] - The VILLA Zegna initiative aims to enhance customer engagement through immersive experiences [6][7] - The company is working on upscaling the sales team and improving merchandising, particularly in China [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current global consumer environment as difficult to read, with rising volatility and uncertainty [26] - The company is focused on cost control while maintaining product authenticity and desirability [26] - Management remains optimistic about the potential for growth in the TOM FORD brand despite recent leadership changes [3][66] Other Important Information - The company integrated TOM FORD FASHION into its operations since April 29, 2023, impacting revenue reporting [9] - The textile performance was influenced by decreased demand from non-captive brands, leading to a decline in third-party brand revenues [12] Q&A Session All Questions and Answers Question: Can you comment on the organic performance in June versus the quarter and July trading, especially with the Chinese cluster? - Management indicated that the exit rate in July is not materially different from the average for Q2, with similar patterns observed across regions [36][68] Question: What are the implications of Peter Hawkings stepping down as Creative Director of TOM FORD? - Management confirmed that a successor will be announced soon and emphasized confidence in the ongoing leadership of TOM FORD FASHION [66] Question: How do you see the performance of Thom Browne in the coming quarters? - Management noted that the trend of Q2 is more reasonable for projecting the second half, with expectations for improved performance [73] Question: What is the outlook for Zegna in Greater China regarding traffic and sales? - Management confirmed that traffic is the primary driver of the decline, with good results in other retail metrics [104]

| --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|---------------|-------------------|-------|------------------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | July 25, 2024 | Unaudited figures | | H1 2024 PRELIMINARY REVENUES | | 1 Disclaimer Non-IFRS Financial Measures The Group's management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: revenues ...

Core Viewpoint - The analysis compares Ermenegildo Zegna N.V. (ZGN) and Deckers (DECK) to determine which stock represents a better value investment opportunity for investors interested in the Retail - Apparel and Shoes sector [1]. Group 1: Zacks Rank and Earnings Outlook - Ermenegildo Zegna N.V. has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Deckers has a Zacks Rank of 3 (Hold) [3]. - The Zacks Rank system emphasizes companies with strong earnings estimate revisions, suggesting that ZGN is likely experiencing a more favorable earnings outlook compared to DECK [3]. Group 2: Valuation Metrics - ZGN has a forward P/E ratio of 24.37, significantly lower than DECK's forward P/E of 35.57, indicating that ZGN may be undervalued relative to DECK [5]. - The PEG ratio for ZGN is 2.18, while DECK's PEG ratio is 3.64, further suggesting that ZGN offers better value considering its expected EPS growth rate [5]. - ZGN's P/B ratio is 5.17, compared to DECK's P/B of 13.14, reinforcing the notion that ZGN is more attractively priced based on its book value [6]. Group 3: Overall Value Assessment - Based on various valuation metrics, ZGN holds a Value grade of B, while DECK has a Value grade of C, indicating that ZGN is currently the superior value option [6].