The following is a summary of the Ermenegildo Zegna N.V. (ZGN) Q4 2023 Earnings Call Transcript:
Financial Performance:
Ermenegildo Zegna N.V., reported a revenue of €1.9 billion in 2023, a rise of 28% and an organic rise of 19%.
Their adjusted EBIT reached €220 million with an 11.6% margin, a 100 basis points increase from 2022.
The net profit doubled compared to 2022.
The company experienced an increased trade working capital in 2023 to €449 million, which was 23.6% of revenues, mainly driven by increased business and investment in continuity collections.
Zegna generated €72 million in free cash flow last year due to improved operating profit results.
The company plans on improving their gross margin by managing the price lever and increasing retail presence, particularly in North America.
Business Progress:
The company enriched their brand portfolio with the acquisition of TOM FORD FASHION.
Sustainability commitments set for 2023 were achieved, including signing on 87% of their employees on DE&I topics and using 97% renewable energy in their European operations.
Zegna One brand strategy was used successfully, with a focus on customer base expansion in Greater China.
The SECONDSKIN collection was launched globally and showcased across many regions, including China.
Thom Browne, another brand under the company's umbrella, had a growth rate of 26% since the brand's incorporation into the group.
Zegna is working to strengthen its Direct-to-Customer channel further and manage its wholesale distribution more directly.
The company opened two new stores and completed successful retail conversions.
Thom Browne plans to expand its footwear and accessories sectors through its wholesale accounts, with Japan leading this growth.
More details: Ermenegildo Zegna NV IR
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