Ermenegildo Zegna(US:ZGN)2026-03-20 11:01Financial Performance - The Ermenegildo Zegna Group reported a profit of €109.5 million for FY 2025, representing a 20% increase year-on-year compared to €90.9 million in FY 2024[3][6]. - Group revenues for FY 2025 were €1,916.9 million, down 1.5% year-on-year, but up 1.1% on an organic basis[6][8]. - The gross profit margin improved to 67.5%, up 90 basis points from 66.6% in FY 2024[6][10]. - Adjusted EBIT for FY 2025 was €163.0 million, including a €10 million provision for expected losses related to Saks Global, compared to €184.0 million in FY 2024[6][18]. - Operating profit declined to €139,480 thousand in 2025 from €166,852 thousand in 2024, reflecting a decrease of 16.4%[60]. - Profit attributable to shareholders increased to €98,582 thousand in 2025, up from €77,083 thousand in 2024, representing a growth of 28%[60]. - Basic earnings per share rose to €0.38 in 2025 from €0.31 in 2024, marking a 22.6% increase[60]. - Profit for 2025 increased to €109,487 thousand from €90,861 thousand in 2024, representing a growth of 20.5%[71]. - Profit margin improved to 5.7% in 2025 from 4.7% in 2024[71]. Revenue Breakdown - The Zegna brand generated revenues of €1,181.6 million, reflecting a 1.5% increase year-on-year and a 4.7% increase on an organic basis[8][20]. - The Thom Browne segment experienced a revenue decline of 14.6% year-on-year, totaling €268.9 million[8][24]. - Total revenues for FY 2025 were €1.92 billion, a decrease of 1.5% from €1.95 billion in FY 2024, with organic growth of 1.1%[49]. - The ZEGNA brand generated revenues of €1.36 billion in FY 2025, a slight increase of 1.1% from €1.35 billion in FY 2024, with organic growth of 3.7%[49]. - Thom Browne revenues fell by 14.6% to €268.9 million in FY 2025, down from €314.8 million in FY 2024, with an organic decline of 12.1%[49]. - Direct to Consumer (DTC) revenues increased by 4.2% to €1.45 billion in FY 2025, representing 82% of branded products sold[53]. - Revenues in the Americas increased by 7.9% to €566,069 thousand, while revenues in Greater China decreased by 14.6% to €435,173 thousand[55]. - EMEA region revenue growth was 0.5%, with organic growth at 1.4%[95]. - Americas region revenue growth was 7.9%, with organic growth at 12.0%[95]. - Greater China region experienced a revenue decline of 14.6%, with organic growth at (11.9%)[95]. - Rest of APAC region revenue growth was (0.5%), with organic growth at 3.8%[95]. - Other revenues, mainly from royalties, grew by 30.2%, with organic growth at 31.2%[95]. Cash Flow and Financial Position - The cash surplus at the end of FY 2025 was €52 million, an improvement from a net financial indebtedness of €94 million at the end of FY 2024[6][10]. - Cash Surplus reached €52.09 million at December 31, 2025, compared to a Net Financial Indebtedness of €94.2 million in 2024, reflecting improved Free Cash Flow generation[30]. - Free Cash Flow increased significantly to €82.1 million in FY 2025, up from €10.1 million in FY 2024, driven by higher operating cash flows and improved working capital management[33]. - The Group's net cash flows from operating activities improved to €335,559 thousand in 2025, compared to €279,129 thousand in 2024, an increase of 20.2%[65]. - Net Financial Indebtedness improved to a cash surplus of €(52,093) thousand in 2025 compared to €94,225 thousand in 2024[76]. Capital Expenditure - Capital expenditure for FY 2025 was €102.9 million, down from €125.5 million in FY 2024, with approximately 60% allocated to the store network[28]. - Capital expenditure for 2025 was €102,896 thousand, down from €125,529 thousand in 2024[99]. - Capital expenditure as a percentage of revenues decreased to 5.4% in 2025 from 6.4% in 2024[99]. - Payments for property, plant, and equipment were €80,504 thousand in 2025, compared to €100,104 thousand in 2024[99]. - Payments for intangible assets were €22,392 thousand in 2025, down from €25,425 thousand in 2024[99]. Strategic Focus and Management - The Group aims for disciplined growth and strong cash generation despite uncertainties in the market environment[5]. - The management remains focused on achieving 2027 targets despite uncertainties in the global economic outlook due to geopolitical tensions[34]. - A new leadership structure was implemented effective January 1, 2026, with Ermenegildo "Gildo" Zegna as Group Executive Chairman[35].