REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Not applicable |
The | |
(Translation of Registrant’s name into English) |
(Jurisdiction of incorporation or organization) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Emerging growth company |
U.S. GAAP ☐ | |
Other ☐ | ||||
by the International Accounting Standards Board ☒ |
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ITEM 4A |
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ITEM 15 |
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ITEM 16A |
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ITEM 16B |
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ITEM 16G |
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ITEM 17 |
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ITEM 19 |
144 |
• | the impact of COVID-19 or similar public health crises on Zegna’s business; |
• | disruptions arising from political, social and economic instability, geopolitical tensions or civil unrest, including the current conflict in Ukraine; |
• | the effect of the consummation of the Business Combination on Zegna’s business, cash flows, financial condition or results of operations; |
• | the ability of Zegna to safeguard the recognition, integrity and reputation of its brands and to identify and respond to new and changing customer preferences; |
• | the ability of Zegna to successfully implement its strategy; |
• | disruptions to Zegna’s manufacturing and logistics facilities, as well as DOSs, including as a result of the COVID-19 pandemic; |
• | risks related to the operation of Zegna’s DOSs, including as a result of difficulties in renewing the existing lease agreements, an increase in rental charges or a decline in sales, and the operation of points of sale by third parties in the wholesale channel; |
• | fluctuations in the price or quality of, or disruptions in the availability of, raw materials used by Zegna for its products, which could cause Zegna to incur increased costs, disrupt its manufacturing processes or prevent or delay Zegna from meeting its customers’ demand; |
• | the ability of Zegna to negotiate, maintain or renew license agreements with high end third party brands; |
• | shifts in travel patterns or declines in travel volumes, including as a result of the COVID-19 pandemic; |
• | the ability to attract and retain key senior personnel and preserve craftmanship skills; |
• | Zegna’s ability to protect its intellectual property rights; |
• | disruptions or breaches compromising Zegna’s information technology systems or the personal information of Zegna’s customers; |
• | Zegna’s ability to maintain Zegna’s securities’ listing on the NYSE; |
• | the fact that the market price of Zegna’s securities may be volatile due to a variety of factors; |
• | the ability to develop and maintain effective internal controls; |
• | material weaknesses have been identified in Zegna’s internal control over financial reporting and if Zegna fails to remediate these material weaknesses or maintain an effective system of internal controls, it may not be able to produce timely and accurate financial statements or comply with applicable laws and regulations; |
• | changes in local economic, business, regulatory, social and political conditions, as well as changes in general economic conditions and in demand for luxury goods; |
• | exchange rate fluctuations, interest rate changes, credit risk and other market risks; |
• | the high levels of competition in the luxury goods market; |
• | compliance with laws, including laws and regulation related to intellectual property, competition, product safety, packaging and labeling, import and processing of certain raw materials and finished goods, data protection, limits on cash payments, worker health and safety and the environment; |
• | changes in trade policy, the imposition of tariffs, the enactment of tax reforms and other changes in laws and regulations; and |
• | other factors discussed elsewhere in this report in the section “ Item 3.D—Risk Factors |
ITEM 1 |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2 |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3 |
KEY INFORMATION |
• | changes in the industries in which we and our customers operate; |
• | variations in our operating performance and the performance of our competitors in general; |
• | material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy; |
• | actual or anticipated fluctuations in our annual or interim operating results; |
• | publication of research reports by securities analysts about us or our competitors or our industry; |
• | the public’s reaction to our press releases, other public announcements and filings with the SEC; |
• | our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; |
• | additions and departures of key personnel; |
• | changes in laws and regulations affecting our business; |
• | commencement of, or involvement in, litigation involving us; |
• | changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of Ordinary Shares available for public sale; |
• | general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism; and |
• | the other factors described in this “ Item 3.D—Risk Factors |
ITEM 4 |
INFORMATION ON THE COMPANY |
• | on the Closing Date prior to the Effective Time, Zegna implemented the Conversion and became a Dutch public limited liability company ( naamloze vennootschap |
• | in connection with the Conversion, Zegna underwent a share split such that immediately following the Closing (including the Share Repurchase) the then-existing shareholders of Zegna would hold 155,400,000 Ordinary Shares (excluding any Ordinary Shares purchased in connection with the PIPE Financing); |
• | on the Closing Date following the Conversion and prior to the Effective Time, the FPA Purchaser purchased from IIAC and IIAC issued to such FPA Purchaser 22,500,000 Class A Shares for an aggregate purchase price of €191.8 million; |
• | immediately following the consummation of the Forward Purchase, at the Effective Time, Zegna Merger Sub merged with and into IIAC, with IIAC being the Surviving Company in the Merger; |
• | in connection with the Merger, (a) each share in the capital of Zegna Merger Sub issued and outstanding immediately prior to the Effective Time was automatically cancelled and extinguished and converted into one ordinary share in the share capital of the Surviving Company, (b) each Class A Share and Class B Share of IIAC issued and outstanding immediately prior to the Effective Time (excluding shares tendered for redemption) remained outstanding as one ordinary share of the Surviving Company for further contribution as a contribution in kind, immediately following the Effective Time, to Zegna in consideration for one Ordinary Share, (c) each IIAC Ordinary Share held immediately prior to the Effective Time by IIAC as treasury shares was cancelled, and no consideration was paid with respect thereto, (d) each outstanding IIAC Public Warrant automatically ceased to represent a right to acquire one Class A Share and automatically was converted and represented, at the Effective Time, a right to acquire one Ordinary Share on the same contractual terms and conditions as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement, and (e) 5,900,000 IIAC Private Placement Warrants that were outstanding immediately prior to the Effective Time were exchanged, at the Effective Time, for the issuance by Zegna of a Private Placement Warrant representing a right to acquire one Ordinary Share on the same contractual terms and conditions as those of the IIAC Private Placement Warrants as were in effect immediately prior to the Warrant Agreement Amendment, while the remaining 800,000 IIAC Private Placement Warrants were transferred by the FPA Purchaser to Zegna pursuant to the Business Combination Agreement, and Zegna issued a corresponding number of Private Placement Warrants to certain of its directors, namely the directors who were members of the Zegna Board prior to the Conversion, the Lead Non-Executive Director and the chairperson of the Audit Committee; |
• | immediately following the Effective Time, Zegna consummated the PIPE Financing and the Offset PIPE Financing; |
• | after the consummation of the PIPE Financing and the Offset PIPE Financing, the Surviving Company distributed an amount of cash equal to the Capital Distribution Amount to Zegna by way of the Capital Distribution; and |
• | promptly following the Capital Distribution, Zegna completed the Share Repurchase, acquiring 54,600,000 Ordinary Shares from Monterubello in exchange for a promissory note in the amount of the Cash Consideration. Such promissory note was repaid by Zegna on December 21, 2021. |
Increase/(Decrease) |
||||||||||||||||||||
Years ended December 31, |
2021 vs. 2020 |
2020 vs. 2019 |
||||||||||||||||||
( € thousand, except percentages) |
2021 |
2020 |
2019 |
% Actual |
% Actual |
|||||||||||||||
EMEA (1) |
380,325 | 315,879 | 431,384 | 20.4 | % | (26.8 | )% | |||||||||||||
of which Italy |
158,722 | 121,202 | 140,676 | 31.0 | % | (13.8 | )% | |||||||||||||
of which United Kingdom |
37,682 | 32,985 | 58,012 | 14.2 | % | (43.1 | )% | |||||||||||||
North America (2) |
191,283 | 131,049 | 233,327 | 46.0 | % | (43.8 | )% | |||||||||||||
of which United States |
176,059 | 114,818 | 205,744 | 53.3 | % | (44.2 | )% | |||||||||||||
Latin America (3) |
19,971 | 12,915 | 25,404 | 54.6 | % | (49.2 | )% | |||||||||||||
APAC (4) |
696,344 | 551,650 | 626,059 | 26.2 | % | (11.9 | )% | |||||||||||||
of which Greater China Region |
588,876 | 438,193 | 458,294 | 34.4 | % | (4.4 | )% | |||||||||||||
of which Japan |
55,479 | 61,523 | 90,240 | (9.8 | )% | (31.8 | )% | |||||||||||||
Other (5) |
4,479 | 3,240 | 5,153 | 38.2 | % | (37.1 | )% | |||||||||||||
Total |
1,292,402 |
1,014,733 |
1,321,327 |
27.4 |
% |
(23.2 |
)% |
(1) | EMEA comprises Europe, the Middle East and Africa. |
(2) | North America includes the United States of America and Canada. |
(3) | Latin America includes Mexico, Brazil and other Central and South American countries. |
(4) | APAC includes Greater China Region, Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other South East Asian countries. |
(5) | Other includes royalties fees, certain sales of old seasons products, and exchange rate impact deriving from hedging transactions on revenues. |
Years ended December 31, |
||||||||||||
( € thousand, except percentages) |
2021 |
2020 |
2019 |
|||||||||
Zegna segment |
1,035,175 | 843,318 | 1,165,911 | |||||||||
Thom Browne segment |
264,066 | 179,794 | 161,200 | |||||||||
Eliminations |
(6,839 | ) | (8,379 | ) | (5,784 | ) | ||||||
Total |
1,292,402 |
1,014,733 |
1,321,327 |
• | continue the successful development of Thom Browne products, focusing on growth of Thom Browne’s womenswear and accessories; |
• | significantly expand Thom Browne’s customer base while maintaining the loyalty of its existing customers by taking actions to increase the brand awareness and continuing to maintain a creative, thought-provoking design style with strong tailoring aesthetics; |
• | continue to grow Thom Browne’s direct distribution channels, both through physical locations and e-commerce platforms; and |
• | maintain a limited-volume presence in the wholesale distribution channel as a platform to increase the brand’s visibility and awareness. |
• | the Zegna Branded Products product line; |
• | the Textile product line; and |
• | the Third Party Brands product line (formerly known as the Strategic Alliances product line). |
• | Ermenegildo Zegna, the iconic, legendary heart of the brand; |
• | Z Zegna, combining activewear and tailoring with a strong focus on technical innovation and performance fabrics; and |
• | Ermenegildo Zegna XXX, the boldest expression of Zegna, which reimagines contemporary style with couture-level tailoring and fabrics. |
For the years ended December 31, |
||||||||||||
( € thousand, except percentages) |
2021 |
2020 |
2019 |
|||||||||
Raw materials |
(108,442 | ) | (108,130 | ) | (139,965 | ) | ||||||
Finished goods |
(161,731 | ) | (130,006 | ) | (141,512 | ) | ||||||
Consumables |
(12,951 | ) | (10,909 | ) | (14,067 | ) | ||||||
Change in raw materials, consumables and finished goods |
(24,822 | ) | 131 | (9,991 | ) | |||||||
Other |
(1,663 | ) | (1,655 | ) | (4,266 | ) | ||||||
|
|
|
|
|
|
|||||||
Total cost of raw materials and consumables |
(309,609 |
) |
(250,569 |
) |
(309,801 |
) | ||||||
|
|
|
|
|
|
• | Franchisees |
• | Department stores and multibrand specialty stores re-sale in their stores, sometimes in specific Zegna branded wall units. The contractual arrangements with this type of customers vary based on the relevant store’s standard terms. |
• | Online multibrand stores |
Location |
Use |
Approximate Square Meters | ||
Italy, Sagliano Micca, Via della Libertà 16 |
Factory, storage and offices | 5,500 | ||
Italy, Molvena di Colceresa, Via dell’Artigianato |
Factory, storage and offices | 10,000 | ||
Italy, Fossoli di Carpi, Italy, via Budrione Migliarina 2/A |
Factory, storage and offices | 11,470 | ||
Italy, Novi di Modena, fraz. Rovereto sul Secchia, via Foscolo 11 |
Factory, storage and offices | 975 |
ITEM 4A |
UNRESOLVED STAFF COMMENTS |
ITEM 5 |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Euro |
387,251 | 344,288 | 447,231 | |||||||||
Chinese Renminbi |
501,824 | 375,359 | 342,962 | |||||||||
U.S. Dollar |
185,944 | 114,065 | 206,536 | |||||||||
Japanese Yen |
49,966 | 48,605 | 73,490 | |||||||||
Pound Sterling |
30,101 | 28,826 | 50,551 | |||||||||
Hong Kong Dollar |
17,168 | 27,182 | 72,472 | |||||||||
United Arab Emirates Dirham |
31,534 | 13,614 | 18,180 | |||||||||
Other currencies |
88,614 | 62,794 | 109,905 | |||||||||
|
|
|
|
|
|
|||||||
Total |
1,292,402 |
1,014,733 |
1,321,327 |
|||||||||
|
|
|
|
|
|
2021 |
2020 |
2019 |
||||||||||||||||||||||
At December 31 |
Average |
At December 31 |
Average |
At December 31 |
Average |
|||||||||||||||||||
U.S. Dollar |
1.133 | 1.183 | 1.227 | 1.142 | 1.123 | 1.119 | ||||||||||||||||||
Swiss Franc |
1.033 | 1.081 | 1.080 | 1.070 | 1.085 | 1.113 | ||||||||||||||||||
Chinese Renminbi |
7.195 | 7.629 | 8.023 | 7.874 | 7.821 | 7.735 | ||||||||||||||||||
Pound Sterling |
0.840 | 0.860 | 0.899 | 0.890 | 0.851 | 0.878 | ||||||||||||||||||
Hong Kong Dollar |
8.833 | 9.193 | 9.514 | 8.857 | 8.747 | 8.772 | ||||||||||||||||||
Singapore Dollar |
1.528 | 1.589 | 1.622 | 1.574 | 1.511 | 1.527 | ||||||||||||||||||
United Arab Emirates Dirham |
4.160 | 4.344 | 4.507 | 4.194 | 4.126 | 4.111 | ||||||||||||||||||
Japanese Yen |
130.380 | 129.877 | 126.490 | 121.832 | 121.940 | 122.021 |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||||||||||||||
2021 |
As a % of Revenues |
2020 |
As a % of Revenues |
2019 |
As a % of Revenues |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
|||||||||||||||||||||||||||||||
Raw materials |
(108,442 | ) | (8.4 | %) | (108,130 | ) | (10.7 | %) | (139,965 | ) | (10.6 | %) | (312 | ) | (0.3 | %) | 31,835 | 22.7 | % | |||||||||||||||||||||
Finished goods |
(161,731 | ) | (12.5 | %) | (130,006 | ) | (12.8 | %) | (141,512 | ) | (10.7 | %) | (31,725 | ) | (24.4 | %) | 11,506 | 8.1 | % | |||||||||||||||||||||
Consumables |
(12,951 | ) | (1.0 | %) | (10,909 | ) | (1.1 | %) | (14,067 | ) | (1.1 | %) | (2,042 | ) | (18.7 | %) | 3,158 | 22.4 | % | |||||||||||||||||||||
Change in raw materials, consumables and finished goods |
(24,822 | ) | (1.9 | %) | 131 | 0.0 | % | (9,991 | ) | (0.8 | %) | (24,953 | ) | n.m. | (*) | 10,122 | 101.3 | % | ||||||||||||||||||||||
Other |
(1,663 | ) | (0.1 | %) | (1,655 | ) | (0.2 | %) | (4,266 | ) | (0.3 | %) | (8 | ) | (0.5 | %) | 2,611 | 61.2 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total cost of raw materials and consumables |
(309,609 |
) |
(24.0 |
%) |
(250,569 |
) |
(24.7 |
%) |
(309,801 |
) |
(23.4 |
%) |
(59,040 |
) |
(23.6 |
%) |
59,232 |
19.1 |
% |
(*) |
Throughout this section “n.m.” means not meaningful. |
(Euro thousands) |
For the years ended December 31, |
|||||||||||||||||||||||
2021 |
Percentage of revenues |
2020 |
Percentage of revenues |
2019 |
Percentage of revenues |
|||||||||||||||||||
Revenues |
1,292,402 | 100.0 | % | 1,014,733 | 100.0 | % | 1,321,327 | 100.0 | % | |||||||||||||||
Other income |
8,260 | 0.6 | % | 5,373 | 0.5 | % | 7,873 | 0.6 | % | |||||||||||||||
Cost of raw materials and consumables |
(309,609 | ) | (24.0 | )% | (250,569 | ) | (24.7 | )% | (309,801 | ) | (23.4 | )% | ||||||||||||
Purchased, outsourced and other costs |
(353,629 | ) | (27.4 | )% | (286,926 | ) | (28.3 | )% | (371,697 | ) | (28.1 | )% | ||||||||||||
Personnel costs |
(367,762 | ) | (28.5 | )% | (282,659 | ) | (27.9 | )% | (331,944 | ) | (25.1 | )% | ||||||||||||
Depreciation, amortization and impairment of assets |
(163,367 | ) | (12.6 | )% | (185,930 | ) | (18.3 | )% | (177,068 | ) | (13.4 | )% | ||||||||||||
Write downs and other provisions |
(19,487 | ) | (1.5 | )% | (6,178 | ) | (0.6 | )% | (1,017 | ) | (0.1 | )% | ||||||||||||
Other operating costs |
(180,836 | ) | (14.0 | )% | (30,399 | ) | (3.0 | )% | (49,034 | ) | (3.7 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (Loss)/Profit |
(94,028 |
) |
(7.3 |
)% |
(22,555 |
) |
(2.2 |
)% |
88,639 |
6.7 |
% | |||||||||||||
Financial income |
45,889 | 3.6 | % | 34,352 | 3.4 | % | 22,061 | 1.7 | % | |||||||||||||||
Financial expenses |
(43,823 | ) | (3.4 | )% | (48,072 | ) | (4.7 | )% | (37,492 | ) | (2.8 | )% | ||||||||||||
Foreign exchange (losses)/gains |
(7,791 | ) | (0.6 | )% | 13,455 | 1.3 | % | (2,441 | ) | (0.2 | )% | |||||||||||||
Result from investments accounted for using the equity method |
2,794 | 0.2 | % | (4,205 | ) | (0.4 | )% | (1,534 | ) | (0.1 | )% | |||||||||||||
Impairments of investments accounted for using the equity method |
— | 0.0 | % | (4,532 | ) | (0.4 | )% | — | 0.0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss)/Profit before taxes |
(96,959 |
) |
(7.5 |
)% |
(31,557 |
) |
(3.1 |
)% |
69,233 |
5.2 |
% | |||||||||||||
Income taxes |
(30,702 | ) | (2.4 | )% | (14,983 | ) | (1.5 | )% | (43,794 | ) | (3.3 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss)/Profit for the year |
(127,661 |
) |
(9.9 |
)% |
(46,540 |
) |
(4.6 |
)% |
25,439 |
1.9 |
% |
( Euro thousands ) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Zegna branded products |
847,311 | 636,478 | 919,545 | 210,833 | 33.1 | % | (283,067 | ) | (30.8 | )% | ||||||||||||||||||
Thom Browne |
263,397 | 179,490 | 160,595 | 83,907 | 46.7 | % | 18,895 | 11.8 | % | |||||||||||||||||||
Textile |
102,244 | 87,615 | 108,513 | 14,629 | 16.7 | % | (20,898 | ) | (19.3 | )% | ||||||||||||||||||
Third Party Brands |
74,957 | 82,273 | 91,720 | (7,316 | ) | (8.9 | )% | (9,447 | ) | (10.3 | )% | |||||||||||||||||
Agnona |
1,191 | 12,389 | 17,691 | (11,198 | ) | (90.4 | )% | (5,302 | ) | (30.0 | )% | |||||||||||||||||
Other |
3,302 | 16,488 | 23,263 | (13,186 | ) | (80.0 | )% | (6,775 | ) | (29.1 | )% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
1,292,402 |
1,014,733 |
1,321,327 |
277,669 |
27.40 |
% |
(306,594 |
) |
(23.20 |
)% |
(Euro thousands) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Direct to Consumer (DTC) - Zegna branded products |
712,862 | 527,972 | 743,012 | 184,890 | 35.0 | % | (215,040 | ) | (28.9 | )% | ||||||||||||||||||
Direct to Consumer (DTC) - Thom Browne branded products |
138,567 | 85,268 | 61,045 | 53,299 | 62.5 | % | 24,223 | 39.7 | % | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Direct to Customer (DTC) |
851,429 |
613,240 |
804,057 |
238,189 |
38.8 |
% |
(190,817 |
) |
(23.7 |
)% | ||||||||||||||||||
Wholesale Zegna branded products |
134,449 | 108,506 | 176,533 | 25,943 | 23.9 | % | (68,027 | ) | (38.5 | )% | ||||||||||||||||||
Wholesale Thom Browne branded products |
124,830 | 94,222 | 99,550 | 30,608 | 32.5 | % | (5,328 | ) | (5.4 | )% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Wholesale Third Party Brands and Textile |
177,201 | 169,888 | 200,233 | 7,313 | 4.3 | % | (30,345 | ) | (15.2 | )% | ||||||||||||||||||
Wholesale Agnona |
1,191 | 12,389 | 17,691 | (11,198 | ) | (90.4 | )% | (5,302 | ) | (30.0 | )% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Wholesale |
437,671 |
385,005 |
494,007 |
52,666 |
13.7 |
% |
(109,002 |
) |
(22.1 |
)% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other |
3,302 |
16,488 |
23,263 |
(13,186 |
) |
(80.0 |
)% |
(6,775 |
) |
(29.1 |
)% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
1,292,402 |
1,014,733 |
1,321,327 |
277,669 |
27.4 |
% |
(306,594 |
) |
(23.2 |
)% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
EMEA (1) |
380,325 |
315,879 |
431,384 |
64,446 |
20.4 |
% |
(115,505 |
) |
(26.8 |
)% | ||||||||||||||||||
of which Italy |
158,722 |
121,202 |
140,676 |
37,520 |
31.0 |
% |
(19,474 |
) |
(13.8 |
)% | ||||||||||||||||||
of which UK |
37,682 |
32,985 |
58,012 |
4,697 |
14.2 |
% |
(25,027 |
) |
(43.1 |
)% | ||||||||||||||||||
North America (2) |
191,283 |
131,049 |
233,327 |
60,234 |
46.0 |
% |
(102,278 |
) |
(43.8 |
)% | ||||||||||||||||||
of which United States |
176,059 |
114,818 |
205,744 |
61,241 |
53.3 |
% |
(90,926 |
) |
(44.2 |
)% | ||||||||||||||||||
Latin America (3) |
19,971 |
12,915 |
25,404 |
7,056 |
54.6 |
% |
(12,489 |
) |
(49.2 |
)% | ||||||||||||||||||
APAC (4) |
696,344 |
551,650 |
626,059 |
144,694 |
26.2 |
% |
(74,409 |
) |
(11.9 |
)% | ||||||||||||||||||
of which Greater China Region |
588,876 |
438,193 |
458,294 |
150,683 |
34.4 |
% |
(20,101 |
) |
(4.4 |
)% | ||||||||||||||||||
of which Japan |
55,479 |
61,523 |
90,240 |
(6,044 |
) |
(9.8 |
)% |
(28,717 |
) |
(31.8 |
)% | |||||||||||||||||
Other (5) |
4,479 |
3,240 |
5,153 |
1,239 |
38.2 |
% |
(1,913 |
) |
(37.1 |
)% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
1,292,402 |
1,014,733 |
1,321,327 |
277,669 |
27.4 |
% |
(306,594 |
) |
(23.2 |
)% |
(1) |
EMEA includes Europe, the Middle East and Africa. |
(2) |
North America includes the United States of America and Canada. |
(3) |
Latin America includes Mexico, Brazil and other Central and South American countries. |
(4) |
APAC includes the Greater China Region, Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries. |
(5) |
Other revenues mainly include royalties and certain sales of old season products. |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Other income |
8,260 | 5,373 | 7,873 | 2,887 | 53.7 | % | (2,500 | ) | (31.8 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||||||||||||||
2021 |
As a % of Revenues |
2020 |
As a % of Revenues |
2019 |
As a % of Revenues |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
|||||||||||||||||||||||||||||||
Raw materials |
(108,442 | ) | (8.4 | %) | (108,130 | ) | (10.7 | %) | (139,965 | ) | (10.6 | %) | (312 | ) | (0.3 | %) | 31,835 | 22.7 | % | |||||||||||||||||||||
Finished goods |
(161,731 | ) | (12.5 | %) | (130,006 | ) | (12.8 | %) | (141,512 | ) | (10.7 | %) | (31,725 | ) | (24.4 | %) | 11,506 | 8.1 | % | |||||||||||||||||||||
Consumables |
(12,951 | ) | (1.0 | %) | (10,909 | ) | (1.1 | %) | (14,067 | ) | (1.1 | %) | (2,042 | ) | (18.7 | %) | 3,158 | 22.4 | % | |||||||||||||||||||||
Change in raw materials, consumables and finished goods |
(24,822 | ) | (1.9 | %) | 131 | 0.0 | % | (9,991 | ) | (0.8 | %) | (24,953 | ) | n.m. | (*) | 10,122 | 101.3 | % | ||||||||||||||||||||||
Other |
(1,663 | ) | (0.1 | %) | (1,655 | ) | (0.2 | %) | (4,266 | ) | (0.3 | %) | (8 | ) | (0.5 | %) | 2,611 | 61.2 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total cost of raw materials and consumables |
(309,609 |
) |
(24.0 |
%) |
(250,569 |
) |
(24.7 |
%) |
(309,801 |
) |
(23.4 |
%) |
(59,040 |
) |
(23.6 |
%) |
59,232 |
19.1 |
% |
(*) |
Throughout this section “n.m.” means not meaningful. |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Purchased, outsourced and other costs |
(353,629 | ) | (286,926 | ) | (371,697 | ) | (66,703 | ) | (23.2 | )% | 84,771 | 22.8 | % | |||||||||||||||
Purchased, outsourced and other costs as % of Revenues |
(27.4 | )% | (28.3 | )% | (28.1 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Personnel costs |
(367,762 | ) | (282,659 | ) | (331,944 | ) | (85,103 | ) | (30.1 | )% | 49,285 | 14.8 | % | |||||||||||||||
Personnel costs as % of revenues |
(28.5 | )% | (27.9 | )% | (25.1 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Depreciation and amortization |
(154,195 | ) | (166,205 | ) | (168,210 | ) | 12,010 | 7.2 | % | 2,005 | 1.2 | % | ||||||||||||||||
Impairment of assets |
(9,172 | ) | (19,725 | ) | (8,858 | ) | 10,553 | 53.5 | % | (10,867 | ) | (122.7 | )% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Depreciation, amortization and impairment of assets |
(163,367 |
) |
(185,930 |
) |
(177,068 |
) |
22,563 |
12.1 |
% |
(8,862 |
) |
(5.0 |
)% | |||||||||||||||
Depreciation and amortization as % of Revenues |
(11.9 | )% | (16.4 | )% | (12.7 | )% | ||||||||||||||||||||||
Impairment of assets as % of Revenues |
(0.7 | )% | (1.9 | )% | (0.7 | )% | ||||||||||||||||||||||
Depreciation, amortization and impairment of assets as % of Revenues |
(12.6 | )% | (18.3 | )% | (13.4 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Write downs and other provisions |
(19,487 | ) | (6,178 | ) | (1,017 | ) | (13,309 | ) | (215.4 | )% | (5,161 | ) | (507.5 | )% | ||||||||||||||
Write downs and other provisions as % of revenue |
(1.5 | )% | (0.6 | )% | (0.1 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Operating costs |
(180,836 | ) | (30,399 | ) | (49,034 | ) | (150,437 | ) | n.m. | 18,635 | 38.0 | % | ||||||||||||||||
Operating costs as % of revenue |
(14.0 | )% | (3.0 | )% | (3.7 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Financial income |
45,889 | 34,352 | 22,061 | 11,537 | 33.6 | % | 12,291 | 55.7 | % | |||||||||||||||||||
Financial income as a % of revenues |
3.6 | % | 3.4 | % | 1.7 | % | ||||||||||||||||||||||
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Financial expenses |
(43,823 | ) | (48,072 | ) | (37,492 | ) | 4,249 | 8.8 | % | (10,580 | ) | (28.2 | )% | |||||||||||||||
Financial expenses as % of revenues |
(3.4 | )% | (4.7 | )% | (2.8 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Exchange (losses)/gains |
(7,791 | ) | 13,455 | (2,441 | ) | (21,246 | ) | (157.9 | )% | 15,896 | 651.2 | % | ||||||||||||||||
Exchange (losses)/gains as % of revenue |
(0.6 | )% | 1.3 | % | (0.2 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Result from investments accounted for using the equity method |
2,794 | (4,205 | ) | (1,534 | ) | 6,999 | 166.4 | % | (2,671 | ) | (174.1 | )% | ||||||||||||||||
Impairments of investments accounted for using the equity method |
— | (4,532 | ) | — | 4,532 | 100.0 | % | (4,532 | ) | 0.0 | % | |||||||||||||||||
Result and impairments of investments accounted for using the equity method as % of Revenues |
0.2 | % | (0.9 | )% | (0.1 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
(Increase)/Decrease |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Income taxes |
(30,702 | ) | (14,983 | ) | (43,794 | ) | (15,719 | ) | (104.9 | )% | 28,811 | 65.8 | % | |||||||||||||||
Income taxes as % of revenue |
(2.4 | )% | (1.5 | )% | (3.3 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Zegna segment |
1,035,175 |
843,318 |
1,165,911 |
191,857 |
22.8 |
% |
(322,593 |
) |
(27.7 |
)% | ||||||||||||||||||
Thom Browne segment |
264,066 |
179,794 |
161,200 |
84,272 |
46.9 |
% |
18,594 |
11.5 |
% | |||||||||||||||||||
Eliminations |
(6,839 |
) |
(8,379 |
) |
(5,784 |
) |
(1,540 |
) |
18.4 |
% |
(2,595 |
) |
44.9 |
% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
1,292,402 |
1,014,733 |
1,321,327 |
277,669 |
27.4 |
% |
(306,594 |
) |
(23.2 |
)% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Zegna segment |
111,018 |
(8,981 |
) |
91,385 |
119,999 |
n.m. |
(100,366 |
) |
(109.8 |
)% | ||||||||||||||||||
Thom Browne segment |
38,097 |
28,994 |
15,889 |
9,103 |
31.4 |
% |
13,105 |
82.5 |
% | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
149,115 |
20,013 |
107,274 |
129,102 |
645.1 |
% |
(87,261 |
) |
(81.3 |
)% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Revenues |
1,035,175 | 843,318 | 1,165,911 | 191,857 | 22.8 | % | (322,593 | ) | (27.7 | )% | ||||||||||||||||||
Adjusted EBIT |
111,018 | (8,981 | ) | 91,385 | 119,999 | n.m. | (100,366 | ) | (109.8 | )% |
(Euro thousands, except percentages) |
For the years ended December 31, |
Increase/(Decrease) |
||||||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
% |
2020 vs 2019 |
% |
||||||||||||||||||||||
Revenues |
264,066 | 179,794 | 161,200 | 84,272 | 46.9 | % | 18,594 | 11.5 | % | |||||||||||||||||||
Adjusted EBIT |
38,097 | 28,994 | 15,889 | 9,103 | 31.4 | % | 13,105 | 82.5 | % |
(Euro thousands, except percentages) |
At December 31, |
Increase/(Decrease) |
||||||||||||||||||
2021 |
2020 |
2019 |
2021 vs 2020 |
2020 vs 2019 |
||||||||||||||||
Net cash flows from operating activities |
281,155 | 70,906 | 174,122 | 210,249 | (103,216 | ) | ||||||||||||||
Net cash flows (used in)/from investing activities |
(82,004 | ) | 92,572 | 83,961 | (174,576 | ) | 8,611 | |||||||||||||
Net cash flows used in financing activities |
(64,105 | ) | (49,052 | ) | (267,486 | ) | (15,053 | ) | 218,434 | |||||||||||
Effects of exchange rate changes on cash and cash equivalents |
7,454 | (7,761 | ) | 1,698 | 15,215 | (9,459 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase/(decrease) in cash and cash equivalents |
142,500 |
106,665 |
(7,705 |
) |
35,835 |
114,370 |
||||||||||||||
Cash and cash equivalents at the beginning of the year |
317,291 | 210,626 | 218,331 | 106,665 | (7,705 | ) | ||||||||||||||
Cash and cash equivalents at end of the year |
459,791 | 317,291 | 210,626 | 142,500 | 106,665 |
• | an increase in Adjusted EBIT of €129,102 thousand (see “—Non-IFRS Financial Measures’’non-IFRS measures); |
• | €33,875 thousand from a positive change in cash flows from Trade Working Capital, consisting of €69,911 thousand from the change in trade payables including customer advances driven by higher volumes in 2021 compared to 2020, which was impacted by the COVID-19 pandemic, and €11,932 thousand from the change in inventories, partially offset by €47,969 thousand from the change in trade receivables, reflecting an increase in trade receivables driven by higher volumes; |
• | €30,004 thousand from a positive change in cash flows from other operating assets and liabilities, |
• | higher taxes paid of €26,875 thousand |
• | a decrease in profit/(loss) for the year prior to income taxes, financial income, financial expenses, exchange gains/losses and depreciation, amortization and impairment of assets, mainly driven by the adverse impacts of the COVID-19 pandemic, including the temporary suspension of production and stores closures mainly during the first half of 2020; |
• | higher inventories of €39,486 thousand in 2020 related to unsold stock due to COVID-19 adverse effect on Zegna sales (compared to an increase in inventories of €5,400 thousand in 2019); and |
• | lower trade payables including customer advances due to contraction of the activities; |
• | a decrease in trade receivables of €35,675 thousand in 2020, driven by lower revenue volumes especially in the wholesale channel, compared to an increase of €8,377 thousand in 2019. |
(Euro thousands) |
||||
Proceeds from issuance of ordinary shares upon Business Combination |
310,739 | |||
Proceeds from issuance of ordinary shares to PIPE Investors |
331,385 | |||
Purchase of own shares from Monterubello |
(455,000 | ) | ||
Payments of transaction costs related to the Business Combination |
(48,475 | ) | ||
|
|
|||
Net cash proceeds from the Business Combination |
138,649 |
(Euro thousands) |
At December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Payments for property, plant and equipment |
79,699 | 27,630 | 46,113 | |||||||||
Payments for intangible assets |
14,627 | 11,524 | 13,392 | |||||||||
|
|
|
|
|
|
|||||||
Capital expenditure |
94,326 |
39,154 |
59,505 |
(Euro thousands) |
Contractual cash flows |
|||||||||||||||||||
Carrying amount at December 31, 2021 |
Within 1 year |
Within 2 Years |
Within 3 years |
Beyond |
||||||||||||||||
Derivative financial instruments |
14,138 | 14,138 | — | — | — | |||||||||||||||
Trade payables and customer advances |
223,037 | 223,037 | — | — | — | |||||||||||||||
Borrowings |
628,938 | 161,550 | 283,736 | 135,541 | 56,414 | |||||||||||||||
Lease liabilities |
438,052 | 112,713 | 98,101 | 69,827 | 186,951 | |||||||||||||||
Other current and non-current financial liabilities |
201,371 | 33,984 | 29,816 | — | 137,571 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
1,505,536 |
545,422 |
411,653 |
205,368 |
380,936 |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Non-current borrowings |
471,646 | 558,722 | ||||||
Current borrowings |
157,292 | 106,029 | ||||||
Derivative financial instruments - Liabilities |
14,138 | 13,192 | ||||||
Other non-current financial liabilities (bonds and other)(*) |
7,976 | 8,065 | ||||||
|
|
|
|
|||||
Total borrowings, other financial liabilities and derivatives |
651,052 |
686,008 |
||||||
Cash and cash equivalents |
(459,791 | ) | (317,291 | ) | ||||
Derivative financial instruments - Assets |
(1,786 | ) | (11,848 | ) | ||||
Other current financial assets (securities) ( ** ) |
(334,244 | ) | (350,163 | ) | ||||
|
|
|
|
|||||
Total cash and cash equivalents, other current financial assets and derivatives |
(795,821 |
) |
(679,302 |
) | ||||
|
|
|
|
|||||
Net Financial Indebtedness/(Cash Surplus) |
(144,769 |
) |
6,706 |
(*) |
Includes only the bonds and other components of the “Other non-current financial liabilities” line item from Zegna’s consolidated statement of financial position. |
(**) |
Includes only the securities component of the “Other current financial assets” line item from Zegna’s consolidated statement of financial position. |
(Euro thousands) |
Interest rates (bps) |
Amount |
2022 |
2023 |
2024 |
2025 |
2026 |
|||||||||||||||||||||
Fixed |
0.00% - 1.25% (*) |
210,685 | 75,013 | 85,007 | 4,618 | 33,978 | 12,069 | |||||||||||||||||||||
Variable |
0.60% - 1.75% (*) |
418,253 | 82,279 | 196,041 | 129,934 | 9,999 | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
628,938 |
157,292 |
281,048 |
134,552 |
43,977 |
12,069 |
* | Represents the spread over the variable component of the interest rate, which is generally based on Euribor. |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||
Notional Amount |
Positive Fair Value |
Negative Fair Value |
Notional Amount |
Positive Fair Value |
Negative Fair Value |
|||||||||||||||||||
Foreign currency exchange risk |
||||||||||||||||||||||||
Forward contracts |
550,734 | 1,786 | (11,726 | ) | 347,679 | 11,848 | (4,918 | ) | ||||||||||||||||
Deal-Contingent Option |
109,244 | — | — | — | — | — | ||||||||||||||||||
Interest rate risk |
||||||||||||||||||||||||
Interest rate swaps |
323,816 | — | (2,412 | ) | 274,336 | — | (5,515 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total derivatives – Hedging |
983,794 |
1,786 |
(14,138 |
) |
622,015 |
11,848 |
(10,433 |
) | ||||||||||||||||
Elah Dufour Option |
— | — | — | — | — | (2,759 | ) | |||||||||||||||||
Total trading derivatives |
— | — | — | — | — | (2,759 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total derivatives instruments - Asset/(Liabilities) |
983,794 |
1,786 |
(14,138 |
) |
622,015 |
11,848 |
(13,192 |
) |
(Euro thousands, except percentages) |
At December 31, |
Increase/(Decrease) |
||||||||||||||
2021 |
2020 |
2021 vs 2020 |
% |
|||||||||||||
Cash on hand |
1,651 | 535 | 1,116 | 208.6 | % | |||||||||||
Bank balances |
458,140 | 316,756 | 141,384 | 44.6 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents |
459,791 |
317,291 |
142,500 |
44.9 |
% |
(Euro thousands, except percentages) |
At December 31, |
Increase/(Decrease) |
||||||||||||||
2021 |
2020 |
2021 vs 2020 |
% |
|||||||||||||
Securities |
||||||||||||||||
Fair value through profit and loss |
||||||||||||||||
Insurance contracts |
113,919 | 107,188 | 6,731 | 6.3 | % | |||||||||||
Fixed income |
68,947 | 88,011 | (19,064 | ) | (21.7 | )% | ||||||||||
Real estate funds |
32,898 | 29,073 | 3,825 | 13.2 | % | |||||||||||
Equity |
25,408 | 24,843 | 565 | 2.3 | % | |||||||||||
Hedge funds |
41,483 | 36,511 | 4,972 | 13.6 | % | |||||||||||
Private equity |
15,925 | 10,583 | 5,342 | 50.5 | % | |||||||||||
Private debt |
7,945 | 6,894 | 1,051 | 15.2 | % | |||||||||||
Money market funds |
2,007 | 19,223 | (17,216 | ) | (89.6 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total fair value through profit and loss |
308,532 |
322,326 |
(13,794 |
) |
(4.3 |
)% | ||||||||||
Fair value through other comprehensive income |
||||||||||||||||
Floating income |
20,687 | 22,663 | (1,976 | ) | (8.7 | )% | ||||||||||
Fixed income |
5,025 | 5,174 | (149 | ) | (2.9 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total fair value through other comprehensive income |
25,712 |
27,837 |
(2,125 |
) |
(7.6 |
)% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total securities (recorded within other current financial assets) |
334,244 |
350,163 |
(15,919 |
) |
(4.5 |
)% |
C. |
Research and Development, Patents and Licenses |
D. |
Trend Information |
E. |
Critical Accounting Estimates |
• | Terminal value: determined using the perpetuity method at a long-term growth rate which represents the present value, at the last year of projection, of all expected future cash flows; |
• | The growth rate used to calculate the terminal value was 1.5%, which has been determined according to the diverging inflation and GDP outlook in related geographical areas; |
• | The rate used to discount cash flows was calculated using the weighted average cost of capital (WACC). For the year ended December 31, 2021, the WACC used for discounting purposes ranged between 6.40% and 10.65% (between 6.02% and 17.45% at December 31, 2020). The WACC was calculated ad hoc for each CGU subject to impairment, considering the parameters specific to the geographical area: market risk premium and sovereign bond yield. |
• | Discount rates; |
• | Growth rates used to extrapolate cash flows beyond the forecast period; |
• | EBITDA growth rate over the explicit period of the business plan, which has been assessed taking into consideration the effects of the COVID-19 pandemic on the 2021 performance of the Group. |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
(Euro thousands) |
For the year ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
(Loss)/Profit for the year |
(127,661 |
) |
(46,540 |
) |
25,439 |
|||||||
Income taxes |
30,702 | 14,983 | 43,794 | |||||||||
Financial income |
(45,889 | ) | (34,352 | ) | (22,061 | ) | ||||||
Financial expenses |
43,823 | 48,072 | 37,492 | |||||||||
Exchange losses/(gains) |
7,791 | (13,455 | ) | 2,441 | ||||||||
Result from investments accounted for using the equity method |
(2,794 | ) | 4,205 | 1,534 | ||||||||
Impairments of investments accounted for using the equity method |
— | 4,532 | — | |||||||||
Costs related to the Business Combination (1) |
205,059 | — | — | |||||||||
Costs related to lease agreements (2) |
15,512 | 3,000 | — | |||||||||
Severance indemnities and provision for severance expenses (3) |
8,996 | 12,308 | 9,777 | |||||||||
Impairment of property, plant and equipment and right-of-use (4) |
8,692 | 19,725 | 8,858 | |||||||||
Other (5) |
4,884 | 7,535 | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBIT |
149,115 |
20,013 |
107,274 |
(1) | Costs related to the Business Combination include: |
a) | €114,963 thousand relating to share-based payments for listing services recognized as the excess of the fair value of Zegna ordinary shares issued as part of the Business Combination and the fair value of IIAC’s identifiable net assets acquired. This amount is recorded within the line item “other operating costs” in the consolidated statement of profit and loss and it is related to Zegna segment. |
b) | €37,906 thousand for the issuance of 5,031,250 Zegna ordinary shares to the holders of IIAC class B shares to be held in escrow. The release of these shares from escrow is subject to achievement of certain targets within a seven-year period. This amount is recorded within the line item “other operating costs” in the consolidated statement of profit and loss and it is related to Zegna segment. |
c) | €34,092 thousand for transaction costs related to the Business Combination incurred by Zegna, including costs for bank services, legal advisors and other consultancy fees. This amount is recorded within the line item “purchased, outsourced and other costs” in the consolidated statement of profit and loss and it is related to Zegna segment. |
d) | €10,916 thousand for the Zegna family’s grant of a one-time €1,500 gift to each employee of the Zegna group as result of the Company’s listing on NYSE completed on December 20, 2021. This amount is recorded within the line item “personnel costs” in the consolidated statement of profit and loss and it is related to Zegna segment for €10,120 thousand and to Thom Browne segment for €796 thousand. |
e) | €5,380 thousand relating to grant of performance share units, which each represent the right to receive one Zegna ordinary share, to the Group’s Chief Executive Officer, other Zegna directors, key executives with strategic responsibilities and other employees of the Group, all subject to certain vesting conditions. This amount is recorded within the line item “personnel costs” in the consolidated statement of profit and loss and it is related to Zegna segment for €5,141 thousand and to Thom Browne segment for €239 thousand. For additional information please refer to Note 42 - Related party transactions |
f) | €1,236 thousand related to the fair value of private warrants issued, pursuant to the Business Combination, to certain Zegna non-executive directors. This amount is recorded within the line item “personnel costs” in the consolidated statement of profit and loss and it is related to Zegna segment. |
g) | €566 thousand related to the write-off of non-refundable prepaid premiums for directors’ and officers’ insurance. This amount is recorded within the line item “personnel costs” in the consolidated statement of profit and loss and it is related to Zegna segment. |
(2) | Costs related to lease agreements for the year ended December 31, 2021, are related to Zegna segment and include (i) €12,192 thousand of provisions relating to a lease agreement in the US following an unfavorable legal claim judgment against the Group (recorded within “write downs and other provisions” in the consolidated statement of profit and loss), (ii) €1,492 thousand of legal expenses related to a lease agreement in Italy (recorded within “other operating costs” in the consolidated statement of profit and loss) and (iii) €1,829 thousand in accrued property taxes related to a lease agreement in the UK (recorded within “write downs and other provisions” in the consolidated statement of profit and loss). Costs related to lease agreements for the year ended December 31, 2020 include €3,000 thousand for legal expenses related to a lease agreement in the UK, incurred in the second half of 2020 (recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss). |
(3) | Zegna incurred costs for severance indemnities of €8,996 thousand, €12,308 thousand and €9,777 thousand for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts are recorded within the line item “personnel costs” in the consolidated statement of profit and loss and are related to Zegna segment. |
(4) | Primarily includes impairments of right-of-use right-of-use COVID-19 pandemic on the Group’s operations. |
(5) | Other adjustments for the year ended December 31, 2021 are related to Zegna segment and include €6,006 thousand related to losses incurred by Agnona subsequent to the Group’s sale of a majority stake in Agnona in January 2021, for which the Group was required to compensate the company in accordance with the terms of the related sale agreement, as well as €144 thousand relating to the write down of the Group’s remaining 30% stake in Agnona (both of which are recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss), partially offset by other income of €1,266 thousand relating to the sale of rights to build or develop airspace above a building in the United States (this amount is recorded within the line item “other income” in the consolidated statement of profit and loss). Other adjustments for the year ended December 31, 2020 are related to Zegna segment and include (i) donations of €4,482 thousand to charitable organizations in Italy and abroad to support initiatives related to the COVID-19 pandemic (this amount is recorded within the line item “other operating costs” in the consolidated statement of profit and loss), (ii) impairment on assets held for sale of €3,053 thousand in 2020, of which €988 thousand is recorded within the line item “write downs and other provisions” and €2,065 relates to the write down of inventories and is recorded within the line item “cost of raw materials and consumables” in the consolidated statement of profit and loss. |
(Euro thousands) |
For the year ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
(Loss)/Profit for the year |
(127,661 |
) |
(46,540 |
) |
25,439 |
|||||||
Income taxes |
30,702 | 14,983 | 43,794 | |||||||||
Financial income |
(45,889 | ) | (34,352 | ) | (22,061 | ) | ||||||
Financial expenses |
43,823 | 48,072 | 37,492 | |||||||||
Exchange losses/(gains) |
7,791 | (13,455 | ) | 2,441 | ||||||||
Depreciation, amortization and impairment of assets |
163,367 | 185,930 | 177,068 | |||||||||
Result from investments accounted for using the equity method |
(2,794 | ) | 4,205 | 1,534 | ||||||||
Impairments of investments accounted for using the equity method |
— | 4,532 | — | |||||||||
Costs related to the Business Combination (1) |
205,059 | — | — | |||||||||
Costs related to lease agreements (2) |
15,512 | 3,000 | — | |||||||||
Severance indemnities and provision for severance expenses (3) |
8,996 | 12,308 | 9,777 | |||||||||
Other (4) |
4,884 | 7,535 | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
303,790 |
186,218 |
275,484 |
(1) | Costs related to the Business Combination include: |
a) | €114,963 thousand relating to share-based payments for listing services recognized as the excess of the fair value of Zegna ordinary shares issued as part of the Business Combination and the fair value of IIAC’s identifiable net assets acquired. |
b) | €37,906 thousand for the issuance of 5,031,250 Zegna ordinary shares to the holders of IIAC class B shares to be held in escrow. The release of these shares from escrow is subject to achievement of certain targets within a seven-year period. |
c) | €34,092 thousand for transaction costs related to the Business Combination incurred by Zegna, including costs for bank services, legal advisors and other consultancy fees. |
d) | €10,916 thousand for the Zegna family’s grant of a one-time €1,500 gift to each employee of the Zegna group as result of the Company’s listing on NYSE completed on December 20, 2021. |
e) | €5,380 thousand relating to grant of performance share units, which each represent the right to receive one Zegna ordinary share, to the Group’s Chief Executive Officer, other Zegna directors, key executives with strategic responsibilities and other employees of the Group, all subject to certain vesting conditions. For additional information please refer to Note 42 - Related party transactions |
f) | €1,236 thousand related to the fair value of private warrants issued, pursuant to the Business Combination, to certain Zegna non-executive directors. |
g) | €566 thousand related to the write-off of non-refundable prepaid premiums for directors’ and officers’ insurance. |
(2) | Costs related to lease agreements for the year ended December 31, 2021, include (i) €12,192 thousand of provisions relating to a lease agreement in the US following an unfavorable legal claim judgment against the Group (recorded within “write downs and other provisions” in the consolidated statement of profit and loss), (ii) €1,492 thousand of legal expenses related to a lease agreement in Italy (recorded within “other operating costs” in the consolidated statement of profit and loss) and (iii) €1,829 thousand in accrued property taxes related to a lease agreement in the UK (recorded within “write downs and other provisions” in the consolidated statement of profit and loss). Costs related to lease agreements for the year ended December 31, 2020 include €3,000 thousand for legal expenses related to a lease agreement in the UK, incurred in the second half of 2020 (recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss). |
(3) | Zegna incurred costs for severance indemnities of €8,996 thousand, €12,308 thousand and €9,777 thousand for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts are recorded within the line item “personnel costs” in the consolidated statement of profit and loss. |
(4) | Other adjustments for the year ended December 31, 2021 include €6,006 thousand related to losses incurred by Agnona subsequent to the Group’s sale of a majority stake in Agnona in January 2021, for which the Group was required to compensate the company in accordance with the terms of the related sale agreement, as well as €144 thousand relating to the write down of the Group’s remaining 30% stake in Agnona (both of which are recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss), partially offset by other income of €1,266 thousand relating to the sale of rights to build or develop airspace above a building in the United States (this amount is recorded within the line item “other income” in the consolidated statement of profit and loss). Other adjustments for the year ended December 31, 2020 includes (i) donations of €4,482 thousand to charitable organizations in Italy and abroad to support initiatives related to the COVID-19 pandemic (this amount is recorded within the line item “other operating costs” in the consolidated statement of profit and loss), (ii) impairment on assets held for sale of €3,053 thousand in 2020, of which €988 thousand is recorded within the line item “write downs and other provisions” and €2,065 relates to the write down of inventories and is recorded within the line item “cost of raw materials and consumables” in the consolidated statement of profit and loss. |
(Euro thousands) |
For the year ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
(Loss)/Profit for the year |
(127,661 |
) |
(46,540 |
) |
25,439 |
|||||||
Costs related to the Business Combination (1) |
205,332 | — | — | |||||||||
Costs related to lease agreements (2) |
15,512 | 3,000 | — | |||||||||
Severance indemnities and provision for severance expenses (3) |
8,996 | 12,308 | 9,777 | |||||||||
Impairment of property, plant and equipment and right-of-use (4) |
8,692 | 19,725 | 8,858 | |||||||||
Gain on Thom Browne option (5) |
(20,675 | ) | — | — | ||||||||
Impairment of investments accounted for using the equity method (6) |
— | 4,532 | — | |||||||||
Other (7) |
4,884 | 7,535 | — | |||||||||
Tax effects on adjusting items (8) |
(19,758 | ) | (5,312 | ) | (1,027 | ) | ||||||
|
|
|
|
|
|
|||||||
Adjusted Profit/(Loss) |
75,322 |
(4,752 |
) |
43,047 |
(1) | Costs related to the Business Combination include: |
a) | €114,963 thousand relating to share-based payments for listing services recognized as the excess of the fair value of Zegna ordinary shares issued as part of the Business Combination and the fair value of IIAC’s identifiable net assets acquired. |
b) | €37,906 thousand for the issuance of 5,031,250 Zegna ordinary shares to the holders of IIAC class B shares to be held in escrow. The release of these shares from escrow is subject to achievement of certain targets within a seven-year period. |
c) | €34,092 thousand for transaction costs related to the Business Combination incurred by Zegna, including costs for bank services, legal advisors and other consultancy fees. |
d) | €10,916 thousand for the Zegna family’s grant of a one-time €1,500 gift to each employee of the Zegna group as result of the Company’s listing on NYSE completed on December 20, 2021. |
e) | €5,380 thousand relating to grant of performance share units, which each represent the right to receive one Zegna ordinary share, to the Group’s Chief Executive Officer, other Zegna directors, key executives with strategic responsibilities and other employees of the Group, all subject to certain vesting conditions. For additional information please refer to Note 42 - Related party transactions |
f) | €1,236 thousand related to the fair value of private warrants issued, pursuant to the Business Combination, to certain Zegna non-executive directors. |
g) | €566 thousand related to the write-off of non-refundable prepaid premiums for directors’ and officers’ insurance. |
h) | €273 thousand related to the deal contingent option entered in November 2021. The amount was recorded within the line item “foreign exchange gains/(losses)” in the consolidated statement of profit and loss. |
(2) | Costs related to lease agreements for the year ended December 31, 2021, include (i) €12,192 thousand of provisions relating to a lease agreement in the US following an unfavorable legal claim judgment against the Group (recorded within “write downs and other provisions” in the consolidated statement of profit and loss), (ii) €1,492 thousand of legal expenses related to a lease agreement in Italy (recorded within “other operating costs” in the consolidated statement of profit and loss) and (iii) €1,829 thousand in accrued property taxes related to a lease agreement in the UK (recorded within “write downs and other provisions” in the consolidated statement of profit and loss). Costs related to lease agreements for the year ended December 31, 2020 include €3,000 thousand for legal expenses related to a lease agreement in the UK, incurred in the second half of 2020 (recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss). |
(3) | Zegna incurred costs for severance indemnities of €8,996 thousand, €12,308 thousand and €9,777 thousand for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts are recorded within the line item “personnel costs” in the consolidated statement of profit and loss. |
(4) | Primarily includes impairments of right-of-use right-of-use COVID-19 pandemic on the Group’s operations. |
(5) | Reflects the financial income relating to options related to a gain of €20,675 thousand recognized following the purchase of an additional 5% of the Thom Browne Group on June 1, 2021. This amount is recorded within the line item “financial income” in the consolidated statement of profit and loss. |
(6) | Relates to an impairment of €4,532 thousand in the Group’s investment in Tom Ford, which was recognized following a reported net loss by TFI that management considered as an indication of impairment. |
(7) | Other adjustments for the year ended December 31, 2021 include €6,006 thousand related to losses incurred by Agnona subsequent to the Group’s sale of a majority stake in Agnona in January 2021, for which the Group was required to compensate the company in accordance with the terms of the related sale agreement, as well as €144 thousand relating to the write down of the Group’s remaining 30% stake in Agnona (both of which are recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss), partially offset by other income of €1,266 thousand relating to the sale of rights to build or develop airspace above a building in the United States (this amount is recorded within the line item “other income” in the |
consolidated statement of profit and loss). Other adjustments for the year ended December 31, 2020 includes (i) donations of €4,482 thousand to charitable organizations in Italy and abroad to support initiatives related to the COVID-19 pandemic (this amount is recorded within the line item “other operating costs” in the consolidated statement of profit and loss), (ii) impairment on assets held for sale of €3,053 thousand in 2020, of which €988 thousand is recorded within the line item “write downs and other provisions” and €2,065 relates to the write down of inventories and is recorded within the line item “cost of raw materials and consumables” in the consolidated statement of profit and loss. |
(8) | Includes the tax effects of the aforementioned adjustments. |
(Euro thousands) |
For the year ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
(Loss)/Profit for the year |
(127,661 |
) |
(46,540 |
) |
25,439 |
|||||||
Costs related to the Business Combination (1) |
205,332 | — | — | |||||||||
Costs related to lease agreements (2) |
15,512 | 3,000 | — | |||||||||
Severance indemnities and provision for severance expenses (3) |
8,996 | 12,308 | 9,777 | |||||||||
Impairment of property, plant and equipment and right-of-use (4) |
8,692 | 19,725 | 8,858 | |||||||||
Gain on Thom Browne option (5) |
(20,675 | ) | — | — | ||||||||
Impairment of investments accounted for using the equity method (6) |
— | 4,532 | — | |||||||||
Other (7) |
4,884 | 7,535 | — | |||||||||
Tax effects on adjusting items (8) |
(19,758 | ) | (5,312 | ) | (1,027 | ) | ||||||
|
|
|
|
|
|
|||||||
Adjusted Profit/(Loss) |
75,322 |
(4,752 |
) |
43,047 |
||||||||
Impact of non-controlling interests (9) |
8,669 | 4,063 | 3,720 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Profit/(Loss) attributable to shareholders of the Parent Company |
66,653 |
(8,815 |
) |
39,327 |
||||||||
Weighted average number of shares for basic earnings per share |
203,499,933 | 201,489,100 | 201,561,100 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Basic Earnings per Share |
0.33 |
(0.04 |
) |
0.20 |
||||||||
Weighted average number of shares for diluted earnings per share |
204,917,880 | 201,489,100 | 201,561,100 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Diluted Earnings per Share |
0.33 |
(0.04 |
) |
0.20 |
(1) | Costs related to the Business Combination include: |
a) | €114,963 thousand relating to share-based payments for listing services recognized as the excess of the fair value of Zegna ordinary shares issued as part of the Business Combination and the fair value of IIAC’s identifiable net assets acquired. |
b) | €37,906 thousand for the issuance of 5,031,250 Zegna ordinary shares to the holders of IIAC class B shares to be held in escrow. The release of these shares from escrow is subject to achievement of certain targets within a seven-year period. |
c) | €34,092 thousand for transaction costs related to the Business Combination incurred by Zegna, including costs for bank services, legal advisors and other consultancy fees. |
d) | €10,916 thousand for the Zegna family’s grant of a one-time €1,500 gift to each employee of the Zegna group as result of the Company’s listing on NYSE completed on December 20, 2021. |
e) | €5,380 thousand relating to grant of performance share units, which each represent the right to receive one Zegna ordinary share, to the Group’s Chief Executive Officer, other Zegna directors, key executives with strategic responsibilities and other employees of the Group, all subject to certain vesting conditions. For additional information please refer to Note 42 - Related party transactions |
f) | €1,236 thousand related to the fair value of private warrants issued, pursuant to the Business Combination, to certain Zegna non-executive directors. |
g) | €566 thousand related to the write-off of non-refundable prepaid premiums for directors’ and officers’ insurance. |
h) | €273 thousand related to the deal contingent option entered in November 2021. The amount was recorded within the line item “foreign exchange gains/(losses)” in the consolidated statement of profit and loss. |
(2) | Costs related to lease agreements for the year ended December 31, 2021, include (i) €12,192 thousand of provisions relating to a lease agreement in the US following an unfavorable legal claim judgment against the Group (recorded within “write downs and other provisions” in the consolidated statement of profit and loss), (ii) €1,492 thousand of legal expenses related to a lease agreement in Italy (recorded within “other operating costs” in the consolidated statement of profit and loss) and (iii) €1,829 thousand in accrued property taxes related to a lease agreement in the UK (recorded within “write downs and other provisions” in the consolidated statement of profit and loss). Costs related to lease agreements for the year ended December 31, 2020 include €3,000 thousand for legal expenses related to a lease agreement in the UK, incurred in the second half of 2020 (recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss). |
(3) | Zegna incurred costs for severance indemnities of €8,996 thousand, €12,308 thousand and €9,777 thousand for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts are recorded within the line item “personnel costs” in the consolidated statement of profit and loss. |
(4) | Primarily includes impairments of right-of-use right-of-use COVID-19 pandemic on the Group’s operations. |
(5) | Reflects the financial income relating to options related to a gain of €20,675 thousand recognized following the purchase of an additional 5% of the Thom Browne Group on June 1, 2021. This amount is recorded within the line item “financial income” in the consolidated statement of profit and loss. |
(6) | Relates to an impairment of €4,532 thousand in the Group’s investment in Tom Ford, which was recognized following a reported net loss by TFI that management considered as an indication of impairment. |
(7) | Other adjustments for the year ended December 31, 2021 include €6,006 thousand related to losses incurred by Agnona subsequent to the Group’s sale of a majority stake in Agnona in January 2021, for which the Group was required to compensate the company in accordance with the terms of the related sale agreement, as well as €144 thousand relating to the write down of the Group’s remaining 30% stake in Agnona (both of which are recorded within the line item “write downs and other provisions” in the consolidated statement of profit and loss), partially offset by other income of €1,266 thousand relating to the sale of rights to build or develop airspace above a building in the United States (this amount is recorded within the line item “other income” in the consolidated statement of profit and loss). Other adjustments for the year ended December 31, 2020 includes (i) donations of €4,482 thousand to charitable organizations in Italy and abroad to support initiatives related to the COVID-19 pandemic (this amount is recorded within the line item “other operating costs” in the consolidated statement of profit and loss), (ii) impairment on assets held for sale of €3,053 thousand in 2020, of which €988 thousand is recorded within the line item “write downs and other provisions” and €2,065 relates to the write down of inventories and is recorded within the line item “cost of raw materials and consumables” in the consolidated statement of profit and loss. |
(8) | Includes the tax effects of the aforementioned adjustments. |
(9) | Represents the (Loss)/Profit for the year attributable to non-controlling interests plus the impact of non-controlling interests on the adjusting items. |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Non-current borrowings |
471,646 | 558,722 | ||||||
Current borrowings |
157,292 | 106,029 | ||||||
Derivative financial instruments - Liabilities |
14,138 | 13,192 | ||||||
Other non-current financial liabilities (bonds and other)(*) |
7,976 | 8,065 | ||||||
|
|
|
|
|||||
Total borrowings, other financial liabilities and derivatives |
651,052 |
686,008 |
||||||
Cash and cash equivalents |
(459,791 | ) | (317,291 | ) | ||||
Derivative financial instruments - Assets |
(1,786 | ) | (11,848 | ) | ||||
Other current financial assets (securities) (**) |
(334,244 | ) | (350,163 | ) | ||||
|
|
|
|
|||||
Total cash and cash equivalents, other current financial assets and derivatives |
(795,821 |
) |
(679,302 |
) | ||||
|
|
|
|
|||||
Net Financial Indebtedness/(Cash Surplus) |
(144,769 |
) |
6,706 |
(*) |
Includes only the “bonds” and “other” components of the “Other non-current financial liabilities” line item from Zegna’s consolidated statement of financial position. |
(**) |
Includes only the “securities” component of the “Other current financial assets” line item from Zegna’s consolidated statement of financial position. |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Current assets |
1,384,531 | 1,239,156 | ||||||
Current liabilities |
(702,316 | ) | (535,454 | ) | ||||
|
|
|
|
|||||
Working capital |
682,215 |
703,702 |
||||||
Less: |
||||||||
Derivative financial instruments |
1,786 | 11,848 | ||||||
Tax receivables |
14,966 | 15,611 | ||||||
Other current financial assets |
340,380 | 350,163 | ||||||
Other current assets |
68,773 | 66,718 | ||||||
Cash and cash equivalents |
459,791 | 317,291 | ||||||
Assets held for sale |
— | 17,225 | ||||||
Current borrowings |
(157,292 | ) | (106,029 | ) | ||||
Current lease liabilities |
(106,643 | ) | (92,842 | ) | ||||
Derivative financial liabilities |
(14,138 | ) | (13,192 | ) | ||||
Other current financial liabilities |
(33,984 | ) | — | |||||
Current provisions for risks and charges |
(14,093 | ) | (8,325 | ) | ||||
Tax liabilities |
(28,773 | ) | (33,362 | ) | ||||
Other current liabilities |
(124,356 | ) | (76,637 | ) | ||||
Liabilities held for sale |
— | (16,725 | ) | |||||
|
|
|
|
|||||
Trade Working Capital |
275,798 |
271,958 |
||||||
of which trade receivables |
160,360 |
138,829 |
||||||
of which inventories |
338,475 |
321,471 |
||||||
of which trade payables and customer advances |
(223,037 |
) |
(188,342 |
) |
ITEM 6 |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Name |
Year of Birth |
Position | ||
Ermenegildo Zegna di Monte Rubello | 1955 | Chairperson, Chief Executive Officer and Executive Director | ||
Andrea C. Bonomi | 1965 | Non-Executive Director | ||
Angelica Cheung | 1966 | Non-Executive Director | ||
Domenico De Sole | 1944 | Non-Executive Director | ||
Sergio P. Ermotti | 1960 | Non-Executive Director | ||
Ronald B. Johnson | 1958 | Non-Executive Director | ||
Valerie A. Mars | 1959 | Non-Executive Director | ||
Michele Norsa | 1948 | Non-Executive Director | ||
Henry Peter | 1957 | Non-Executive Director | ||
Anna Zegna di Monte Rubello | 1957 | Non-Executive Director | ||
Paolo Zegna di Monte Rubello | 1956 | Non-Executive Director |
• | Ermenegildo Zegna di Monte Rubello as Chief Executive Officer; |
• | Gianluca Ambrogio Tagliabue as Chief Operating Officer and Chief Financial Officer; |
• | Alessandro Sartori as Zegna Artistic Director; |
• | Franco Ferraris as Head of Textiles; |
• | Rodrigo Bazan as Chief Executive Officer of Thom Browne; and |
• | Thom Browne as Founder and Chief Creative Officer of Thom Browne. |
• | Historical Compensation for the 2021 Financial Year: details the remuneration features during the 2021 financial year and actual remuneration received by or awarded to each executive and non-executive director and the senior management team. |
• | Remuneration Policy: details our current remuneration policy (which is available on our corporate website), as adopted by the Zegna General Meeting on December 17, 2021. Our remuneration policy, which governs compensation for both executive and non-executive directors (with regard to the latter as of January 1, 2022), provides a structure that aligns remuneration of the Zegna Board with successful delivery of Zegna’s long-term strategy and long-term value creation with the goal of ensuring that the directors’ interests are closely aligned to those of Zegna’s stakeholders, including its shareholders. |
Name |
Office Held |
Fixed Compensation |
Variable Compensation (€) |
Stock Awards (€) |
Option Awards (€) |
Other Compensation (€) |
Total (€) |
|||||||||||||||||||||||
Annual Fee (€) |
Fringe Benefits (€) |
|||||||||||||||||||||||||||||
Ermenegildo Zegna di Monte Rubello |
Chairperson, Chief Executive Officer and Executive Director |
|||||||||||||||||||||||||||||
Realized |
1,863,000 |
(1) |
85,000 |
(2) |
2,695,000 |
(4) |
— |
4,114,000 |
(7) |
— |
8,757,000 |
|||||||||||||||||||
Non-Realized |
— |
3,242,000 |
(3) |
6,138,000 |
(5) |
2,047,000 |
(6) |
234,000 |
(8) |
— |
11,661,000 |
|||||||||||||||||||
Total – Sole Executive Director |
1,863,000 |
3,327,000 |
8,833,000 |
2,047,000 |
4,348,000 |
— |
20,418,000 |
|||||||||||||||||||||||
Andrea C. Bonomi (9) |
Non-Executive Director | — | — | — | — | — | — | — |
||||||||||||||||||||||
Angelica Cheung (10) |
Senior Non-Executive Director | — | — | — | — | — | 98,000 | (11) | 98,000 |
|||||||||||||||||||||
Domenico De Sole |
Non-Executive Director | 40,000 | — | — | (812,000 | ) (12) |
155,000 | (13) |
190,000 | (14) |
(427,000 |
) | ||||||||||||||||||
Sergio P. Ermotti (15) |
Non-Executive Director | — | — | — | — | 155,000 | (13) |
— | 155,000 |
|||||||||||||||||||||
Ronald B. Johnson |
Non-Executive Director | 80,000 | — | — | — | 155,000 | (13) |
— | 235,000 |
|||||||||||||||||||||
Valerie A. Mars |
Non-Executive Director | — | — | — | — | 155,000 | (13) |
— | 155,000 |
|||||||||||||||||||||
Michele Norsa |
Non-Executive Director | 80,000 | — | — | — | 155,000 | (13) |
— | 235,000 |
|||||||||||||||||||||
Henry Peter |
Non-Executive Director | 199,000 | (16) |
9,000 | (17) |
— | 186,000 | (18) |
155,000 | (13) |
100,000 | (19) |
649,000 |
|||||||||||||||||
Angelo Zegna di Monte Rubello (20) |
Non-Executive Director | 6,000 | — | — | — | — | — | 6,000 |
||||||||||||||||||||||
Anna Zegna di Monte Rubello |
Non-Executive Director | 189,000 | 43,000 | (17) |
480,000 | — | 155,000 | (13) |
— | 867,000 |
||||||||||||||||||||
Paolo Zegna di Monte Rubello (21) |
Non-Executive Director | 523,000 | (22) |
27,000 | (17) |
600,000 | — | 155,000 | (13) |
— | 1,305,000 |
|||||||||||||||||||
Renata Zegna di Monte Rubello |
Non-Executive Director | 20,000 | 5,000 | (17) |
— | — | — | — | 25,000 |
|||||||||||||||||||||
Total – Non-Executive Directors |
1,137,000 |
84,000 |
1,080,000 |
(626,000 |
) |
1,240,000 |
388,000 |
3,303,000 |
(1) | The amount reported is comprised of (i) the base salary earned by Mr. Zegna as Chief Executive Officer of Zegna (€880,000) and (ii) €983,000 for his services as a director of Zegna Group companies. |
(2) | The amount reported represents post-employment benefits in the form of mandatory social contributions for Ermenegildo Zegna di Monte Rubello. |
(3) | The amount reported represents the accrued value of the indemnity payable to Mr. Zegna on termination of his employment. |
(4) | The amount reported represents short term variable compensation, determined as described above. |
(5) | The amount reported represents the long term variable compensation, calculated as described above. |
(6) | The amount reported represents the IPO Performance Bonus share awards to which Mr. Zegna is entitled, subject to the satisfaction of certain conditions described above. |
(7) | The amount reported is comprised of (i) the gain incurred by Mr. Zegna from the exercise of his right to purchase 15,832 shares of Zegna, as discussed above and (ii) the gain incurred by Mr. Zegna from the exercise of his right to purchase 6,352 shares of Zegna, as discussed above. |
(8) | The amount reported represents the expense that was recorded by Zegna for 2021 in connection with Mr. Zegna’s right to purchase shares, pursuant to the executive agreement restated as of July 15, 2021 and the remuneration policy, as discussed above. |
(9) | Andrea C. Bonomi was nominated to the Zegna Board by the IIAC Sponsor effective as of, and has been a Zegna Director since, December 17, 2021. |
(10) | Angelica Cheung has been a Zegna Director since December 17, 2021. |
(11) | Ms. Cheung received €98,000 for consulting services provided to Zegna. |
(12) | The amount reported represents 16,237 Zegna treasury shares assigned to Domenico De Sole on July 4, 2021 with a fair market value of €6,051,530 for a purchase price of €2,216,351. Such Ordinary Shares were purchased pursuant to the right under the agreement between Zegna and DDS and Associates LLC, as discussed above under “— Share Purchases |
(13) | Represents the Zegna Warrants granted to certain Zegna Directors, as discussed above. |
(14) | DDS and Associates LLC (an entity beneficially owned by members of Mr. De Sole’s family), received €190,000 for consulting services provided to Zegna. Mr. De Sole has disclaimed any pecuniary interest in DDS and Associates LLC. |
(15) | The table does not include any remuneration received by Sergio P. Ermotti for his service to IIAC. Mr. Ermotti was the chairman of the board of directors of IIAC until December 17, 2021. |
(16) | The amount reported includes €99,000 earned by Henry Peter for services as a director of a Zegna subsidiary. |
(17) | Includes post-employment benefits in the form of mandatory social contributions earned for services as a director of Zegna. |
(18) | The amount reported, which is non-realized compensation for 2021, represents the accrual for 2021 of the IPO Performance Bonus to which the Zegna Director shall be entitled, subject to the conditions described above. |
(19) | Mr. Peter received €100,000 for services provided to Zegna in connection with the Business Combination. |
(20) | The amount reported for Angelo Zegna di Monte Rubello was received in connection with his service to Zegna prior to his death in August 2021. |
(21) | Paolo Zegna di Monte Rubello was the chairman of the Zegna Board until December 17, 2021. |
(22) | The amount reported includes €30,000 earned by Paolo Zegna di Monte Rubello for services as a director of a Zegna subsidiary. |
• | Ermenegildo Zegna di Monte Rubello as Chief Executive Officer; |
• | Gianluca Ambrogio Tagliabue as Chief Operating Officer and Chief Financial Officer; |
• | Alessandro Sartori as Zegna Artistic Director; |
• | Franco Ferraris as Head of Textiles; |
• | Rodrigo Bazan as Chief Executive Officer of Thom Browne; and |
• | Thom Browne as Founder & Chief Creative Officer of Thom Browne. |
1. | The remuneration of the board follows the pay-for-performance |
2. | The remuneration is appropriately balanced between fixed and variable remuneration components, aiming to ensure long-term value creation and alignment of Zegna Directors’ interests with Zegna’s strategic objectives; |
3. | The remuneration of the board is competitive in relation to the market in which Zegna operates, the relative size of the business, the specificity of Zegna’s governance structure and the duties and responsibilities of the board resulting therefrom; |
4. | The remuneration is predominantly long-term in character, with long-term equity incentives linked to the delivery of Zegna’s strategic objectives in the highly competitive industry Zegna operates in; |
5. | The remuneration of the Zegna Non-Executive Directors is designed to attract and retain non-executive directors who have the talent and skills to foster the long-term value creation of Zegna while respecting its core values; |
6. | The remuneration of the Zegna Non-Executive Directors consists of cash payments and equity awards in order to enable Zegna to limit the cash component of the non-executive director remuneration and to ensure structural alignment of the Zegna Non-Executive Directors’ interests with the interests of Zegna’s stakeholders, including its shareholders; and |
7. | The Zegna Non-Executive Directors will evaluate the objectives and structures of the remuneration policy at regular intervals, to ensure it is fit for its intended purpose. The Zegna Non-Executive Directors will be assisted by Zegna’s Compensation Committee. |
1. | Be decreased or eliminated if such grant, award or actual payment were to be unacceptable according to principles of reasonableness and fairness; and |
2. | Clawed back if such grant, award or actual payment took place on the basis of incorrect data (including data that has been maliciously altered and therefore, is incorrect). |
• | Audit Committee - €30,000 (chairperson), €15,000 (other members) |
• | Compensation Committee - €20,000 (chairperson), €10,000 (other members) |
• | Governance and Sustainability Committee - €20,000 (chairperson), €10,000 (other members) |
As at December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
White Collars |
3,814 | 3,897 | 4,095 | |||||||||
Blue Collars |
2,016 | 2,201 | 2,132 | |||||||||
Temporary employees |
219 | 151 | 313 | |||||||||
|
|
|
|
|
|
|||||||
Total |
6,049 |
6,249 |
6,540 |
As at December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
EMEA |
3,957 | 4,217 | 4,347 | |||||||||
North America |
369 | 327 | 366 | |||||||||
Latin America |
117 | 125 | 139 | |||||||||
APAC |
1,606 | 1,580 | 1,688 | |||||||||
|
|
|
|
|
|
|||||||
Total |
6,049 |
6,249 |
6,540 |
ITEM 7 |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Beneficial Owner |
Number of Ordinary Shares |
% of Outstanding | ||||||
>5% holders |
||||||||
Monterubello s.s.(1) |
149,734,550 | 61.8 | % | |||||
Strategic Holding Group S.à r.l. (2) |
36,184,446 | (3) |
14.6 | % | ||||
Zegna Directors |
||||||||
Ermenegildo Zegna di Monte Rubello |
5,246,800 | (4) |
2.2 | % | ||||
Andrea C. Bonomi |
— | — | ||||||
Angelica Cheung |
— | — | ||||||
Domenico De Sole |
120,000 | (5) |
(*) | |||||
Sergio P. Ermotti |
1,469,688 | (6) |
(*) | |||||
Ronald B. Johnson |
120,000 | (7) |
(*) | |||||
Valerie A. Mars |
120,000 | (8) |
(*) | |||||
Michele Norsa |
120,000 | (9) |
(*) | |||||
Henry Peter |
420,000 | (10) |
(*) | |||||
Anna Zegna di Monte Rubello |
150,000 | (11) |
(*) | |||||
Paolo Zegna di Monte Rubello |
240,000 | (12) |
(*) | |||||
Zegna Senior Managers |
||||||||
Gianluca Ambrogio Tagliabue |
30,000 | (13) |
(*) | |||||
Rodrigo Bazan |
— | — | ||||||
Thom Browne |
200,000 | (14) |
(*) | |||||
Franco Ferraris |
— | — | ||||||
Alessandro Sartori |
30,000 | (15) |
(*) |
(*) | Less than 1% of the shares outstanding. |
(1) | Monterubello is an Italian società semplice whose quotas are currently held by members of the Zegna family. The directors of Monterubello, as of the Closing Date, were Ermenegildo Zegna di Monte Rubello (chairman of the board of directors), Paolo Zegna di Monte Rubello (vice chairman of the board of directors), Renata Zegna di Monte Rubello, Anna Zegna di Monte Rubello, Giovanni Schneider, Stefano Aimone and Alessandro Andrea Trabaldo Togna. |
(2) | Based on filings with the SEC (Schedule 13G filed on February 8, 2022, File No. 005-93353): Strategic Holding Group S.à r.l. is governed by a five-member board of managers, which at the time of the SEC filing included Kamel Aliat, Amélie Flammia, Marvin Martins, Alex Browning and Natalie Ramsden; action by the five-member board of managers is by simple majority vote; and no individual manager on the board of managers has voting or dispositive control over the reported securities and, therefore, no individual manager has or shares beneficial ownership of such securities. |
(3) | Includes 3,490,000 PIPE Shares and 5,230,000 Ordinary Shares issuable upon exercise of an equal number of Private Placement Warrants that are exercisable within 60 days of March 30, 2022. Excludes 4,276,563 Escrowed Shares which will be held in escrow until the satisfaction of the relevant release conditions or lapse of the prescribed period of time. As long as any such Escrowed Shares are held in escrow Strategic Holding Group S.à r.l.’s voting and economic rights shall be restricted. |
(4) | Includes 420,000 PIPE Shares. Excludes 600,000 Ordinary Shares which may be granted upon vesting of the performance-based share awards which were granted following the closing of the Business Combination. |
(5) | Represents 120,000 PIPE Shares. |
(6) | Includes 120,000 PIPE Shares and 670,000 Ordinary Shares issuable upon exercise of an equal number of Private Placement Warrants that are exercisable within 60 days of March 30, 2022. |
(7) | Represents 120,000 PIPE Shares. |
(8) | Represents 120,000 PIPE Shares. |
(9) | Represents 120,000 PIPE Shares. |
(10) | Represents 420,000 PIPE Shares. |
(11) | Represents 150,000 PIPE Shares. |
(12) | Represents 240,000 PIPE Shares. |
(13) | Represents 30,000 PIPE Shares. |
(14) | Represents 200,000 PIPE Shares held by Thom Browne Revocable Trust. |
(15) | Represents 30,000 PIPE Shares. |
• | Transactions with Tom Ford related to (i) a licensing agreement for the production and worldwide distribution of luxury men’s ready to wear and made to measure clothing, footwear and accessories under the Tom Ford label, (ii) financial assets related to loans to Tom Ford, and (iii) financial guarantees provided to Tom Ford in relation to its payment obligations under a bank loan for an amount of $7,500 thousand issued to Tom Ford in 2020 and maturing in March 2025. |
• | The purchase of raw materials, in particular carded yarns from Filati Biagioli Modesto |
• | The purchase of raw materials, in particular of wool, from Gruppo Schneider S.p.A. |
• | The purchase of industrial services, in particular of fabrics’ finishing, from Finissaggio e Tintoria Ferraris S.p.A. |
• | The purchase of industrial services from Pettinatura di Verrone S.r.l. |
• | Transactions with PKB Privatbank AG relating to an interest-bearing loan amounting to Euro 5,000 thousand expiring in March 2022. |
• | The Disposition of certain of its businesses, through the statutory demerger under Italian law to a new company owned by its existing shareholders. The Disposition included, inter alia, Zegna’s real estate business, consisting of Zegna’s former subsidiary EZ Real Estate, which directly and indirectly holds substantially all of the real estate assets formerly owned by the Zegna group, as well as certain properties previously owned by Lanificio Zegna. Most of the real estate properties directly or indirectly owned by EZ Real Estate were, and continue to be, leased to Zegna also following the Disposition. Zegna pays rent to EZ Real Estate or its subsidiaries under lease agreements. In addition, following the Disposition, Zegna has entered into arrangements whereby Oasi Zegna provides licensing, marketing and other sustainability-related services to Zegna. |
• | As part of the Disposition, on January 14, 2021, the Group sold 70% of its equity stake in Agnona to a related party for consideration of Euro 1 and as a result Agnona was deconsolidated from the beginning of the year and became a related party of the Group. The Group subsequently disposed of the remaining 30% stake in Agnona during September and October 2021 for total consideration of Euro 500 thousand. Following the initial disposal of Agnona, the Group sold products and recharged costs for services to Agnona, as well as compensated amounts related to losses incurred by Agnona subsequent to the Group’s sale of a majority stake in accordance with the terms of the related sale agreement. |
• | Following the Disposition, the payment of rent to EZ Real Estate or its subsidiaries under lease agreements for the use of properties. |
• | Support to the activities of Fondazione Zegna, a charitable organization which provides an opportunity for charitable work on the part of the Zegna family and Group employees. Fondazione Zegna supports and funds projects in cooperation with non-profit organizations operating in various fields and different parts of the world. |
• | Put contracts entered into as part of the Group’s investments in Thom Browne and Lanificio Zegna whereby the Group has been required to, and may in the future be required to, purchase all or a portion of the remaining non-controlling interests in Thom Browne and Lanificio Zegna. For additional information relating to the put contracts please refer to Note 34 - Other non-current financial liabilities |
• | The repurchase by Zegna of 54,600,000 of its own shares from Monterubello for total consideration of Euro 455,000 thousand. |
• | The issuance of 800,000 private warrants to certain Zegna non-executive directors, for which the Group recognized personnel costs of Euro 1,263 thousand and an offsetting increase to other reserves within equity for the year ended December 31, 2021. |
• | The grant of equity-settled share-based payments to key management. |
ITEM 8 |
FINANCIAL INFORMATION |
ITEM 9 |
THE OFFER AND LISTING |
ITEM 10 |
ADDITIONAL INFORMATION |
• | after holding a number of Ordinary Shares for an uninterrupted period of five years following the registration of such number of Ordinary Shares in the Loyalty Register, and without such number of Ordinary Shares being de-registered from the Loyalty Register in such period, each Zegna Special Voting Share A corresponding to such number of Ordinary Shares will automatically be converted into a Zegna Special Voting Share B; and |
• | after holding a number of Ordinary Shares for an uninterrupted period of ten years following the registration of such number of Ordinary Shares in the Loyalty Register, and without such number of Ordinary Shares being de-registered from the Loyalty Register in such period, each Zegna Special Voting Share B corresponding to such number of Ordinary Shares will automatically be converted into a Zegna Special Voting Share C. |
• | each Zegna Special Voting Share A will entitle its holder with one extra vote; |
• | each Zegna Special Voting Share B will entitle its holder with four extra votes; and |
• | each Zegna Special Voting Share C will entitle its holder with nine extra votes. |
• | making a proposal to the Zegna General Meeting concerning any amendment of the Zegna Articles of Association which adversely affects the rights of the IIAC Sponsor specifically (as opposed to its rights arising from the ownership of Ordinary Shares or Zegna Special Voting Shares that are shared on a pro rata basis by the other holders of the same class); |
• | cessation or material alteration of the principal business of Zegna, including a material change to its corporate purpose, or change of jurisdiction of organization; |
• | expansion of the Zegna Board to more than fifteen members without granting the IIAC Sponsor the right to nominate an additional Zegna Director to preserve its proportional representation; |
• | dissolution or termination of any standing committee of the Zegna Board; |
• | deregistration of Zegna or delisting of the Ordinary Shares from the NYSE; and |
• | making a proposal to the Zegna General Meeting for the appointment or removal of Zegna’s independent auditors, but only if the replacement is not from among Deloitte, Ernst & Young, KPMG or PricewaterhouseCoopers. |
• | Paolo Zegna di Monte Rubello and Anna Zegna di Monte Rubello are both representatives of Monterubello and are appointed as Zegna Non-Executive Directors. Because of their affiliation with Monterubello, Zegna does not comply with best practice provision 2.1.7(iii) of the DCGC that requires that there is at most one Zegna Non-Executive Director who can be considered to be affiliated with a Shareholder who holds more than 10% of the Ordinary Shares. Zegna believes that it and all of its stakeholders benefit from both affiliates of Monterubello, especially in respect of their expertise and valuable knowledge of Zegna’s business and the industry Zegna operates in, which outweighs any perceived disadvantage of non-independence; |
• | the Chief Executive Officer has also been granted the title Chairperson but does not qualify as the chairperson within the meaning of the DCGC (for example best practice provision 2.3.6). In accordance with the Zegna Articles of Association and the Zegna Board Regulations, the Zegna Board has granted an independent Zegna Non-Executive Director the title Lead Non-Executive Director. The Lead Non-Executive Director serves as the chairperson of the Zegna Board under Dutch law and within the meaning of the DCGC (for example best practice provision 2.3.6). Consequently, Zegna is compliant with best practice provision 2.1.9 that requires the chairperson of the Zegna Board to be independent within the meaning of best practice provision 2.1.8 of the DCGC; |
• | pursuant to the Zegna Articles of Association, the Zegna Directors are appointed for a term ending at the close of the first annual Zegna General Meeting following his or her appointment. Given these annual appointments, Zegna does not prepare a retirement schedule as referred to in best practice provision 2.2.4 of the DCGC; |
• | the Zegna Board has granted or intends to grant options and/or performance shares to the Chief Executive Officer as part of his remuneration. In deviation of best practice provision 3.1.2 of the DCGC, the options may be exercised within the first three years of their grant date, and the performance shares to be awarded to the Chief Executive Officer will not be subject to a five years holding period. Although in deviation of the DCGC, the foregoing is market practice among companies listed on the NYSE. As regards the Zegna Non-Executive Directors, it is envisaged that their remuneration will be payable 50% in cash and 50% in shares subject to a lock-up period of two years. The remuneration in the form of Ordinary Shares is in accordance with market practice among companies listed on the NYSE, although in deviation from suggested governance provision 3.3.2 of the DCGC; and |
• | the management services agreement of the Chief Executive Officer provides for (i) a severance payment in excess of one year base salary and (ii) a severance payment if such agreement is terminated, among other things, at the initiative of the Chief Executive Officer. These severance provisions are considered consistent with US market practice, although in deviation from suggested governance provision 3.2.3 of the DCGC. |
• | Financial institutions; |
• | Insurance companies; |
• | Mutual funds; |
• | Pension plans; |
• | S corporations; |
• | Broker-dealers; |
• | Traders in securities that elect mark-to-market |
• | Regulated investment companies; |
• | Real estate investment trusts; |
• | Trusts and estates; |
• | Tax exempt organizations (including private foundations); |
• | Investors that hold Ordinary Shares or Warrants as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive ownership transaction,” “constructive sale” or other integrated transaction for U.S. federal income tax purposes; |
• | Holders that have a functional currency other than the U.S. dollar; |
• | U.S. expatriates; |
• | Investors subject to the U.S. “inversion” rules; and |
• | U.S. Holders owning or considered as owning (directly, indirectly or through attribution) 5% measured by vote or value) or more of Zegna’s Ordinary Shares; and |
• | Person who received any of Zegna’s stock or warrants as compensation. |
• | An individual who is a U.S. citizen or resident of the United States; |
• | A corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof or the District of Columbia; |
• | An estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | A trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons (within the meaning of the U.S. Tax Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury Regulations to be treated as a U.S. person. |
• | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Ordinary Shares or Warrants; |
• | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of Zegna’s first taxable year in which Zegna is a PFIC, will be taxed as ordinary income; |
• | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder. |
(i) | is an individual and the holder’s income or capital gains derived from the Zegna Shares and/or Warrants are attributable to employment activities, the income from which is taxable in the Netherlands; |
(ii) | has a substantial interest ( aanmerkelijk belang fictief aanmerkelijk belang Wet inkomstenbelasting 2001 ITA winstbewijzen |
(iii) | is an entity that, although it is in principle subject to Dutch corporate income tax under the Dutch Corporate Income Tax Act 1969 ( Wet op de vennootschapsbelasting 1969 CITA vrijgestelde beleggingsinstelling |
(iv) | is an investment institution ( beleggingsinstelling |
(v) | is required to apply the participation exemption ( deelnemingsvrijstelling paid-up share capital in Zegna; or |
(vi) | is entitled to the dividend withholding tax exemption ( inhoudingsvrijstelling Wet op de dividendbelasting 1965 DWTA paid-up share capital in Zegna. |
(i) | a Dutch Resident Individual (as defined below) or a Dutch Resident Corporate Entity (as defined below); or |
(ii) | a Non-Dutch Resident Individual (as defined below) or a Non-Dutch Resident Corporate Entity (as defined below) that derives profits from an enterprise, which enterprise is fully or partly carried on through a permanent establishment (vaste inrichting vaste vertegenwoordiger |
(i) | distributions of profits in cash or in kind, whatever they be named or in whatever form; |
(ii) | proceeds from the liquidation of Zegna or proceeds from the repurchase of shares by Zegna, other than as a temporary portfolio investment ( tijdelijke belegging paid-in capital recognized for Dutch dividend withholding tax purposes; |
(iii) | the par value of the Zegna Shares issued to a holder of Zegna Shares or an increase in the par value of the Zegna Shares, to the extent that no related contribution, recognized for Dutch dividend withholding tax purposes, has been made or will be made; and |
(iv) | partial repayment of paid-in capital, that is |
• | not recognized for Dutch dividend withholding tax purposes, or |
• | recognized for Dutch dividend withholding tax purposes, to the extent that Zegna has “net profits” ( zuivere winst |
(i) | a person other than the holder of Zegna Shares wholly or partly, directly or indirectly, benefits from the dividends; |
(ii) | whereby this other person retains or acquires, directly or indirectly, an interest similar to that in the Zegna Shares on which the dividends were paid; and |
(iii) | that other person is entitled to a credit, reduction or refund of Dutch dividend withholding tax that is less than that of the holder of Zegna Shares. |
(i) | individuals who are resident or deemed to be resident in the Netherlands (“ Dutch Resident Individuals |
(ii) | entities or enterprises that are subject to the CITA and are resident or deemed to be resident in the Netherlands (“ Dutch Resident Corporate Entities |
(i) | an enterprise from which a Dutch Resident Individual derives profits, whether as an entrepreneur ( ondernemer co-entitled (medegerechtigde |
(ii) | miscellaneous activities, including activities which are beyond the scope of active portfolio investment activities ( meer dan normaal vermogensbeheer |
(i) | from 1.82% over the first EUR 50,650 of such positive balance; |
(ii) | to 4.37% over any excess positive balance between EUR 50,650.01 up to and including EUR 962,350; and |
(iii) | to a maximum of 5.53% |
(i) | individuals who are not resident and not deemed to be resident in the Netherlands (“ Non-Dutch Resident Individuals |
(ii) | entities that are not resident and not deemed to be resident in the Netherlands (“ Non-Dutch Resident Corporate Entities |
(i) | the Non-Dutch Resident Individual derives profits from an enterprise, whether as entrepreneur or by being co-entitled to the net worth of this enterprise other than as an entrepreneur or shareholder and this enterprise is fully or partly carried on through a permanent establishment (vaste inrichting vaste vertegenwoordiger |
(ii) | the Non-Dutch Resident Individual derives benefits from miscellaneous activities carried on in the Netherlands in respect of the Zegna Shares and/or Warrants, including activities which are beyond the scope of active portfolio investment activities; or |
(iii) | the Non-Dutch Resident Individual is entitled to a share—other than by way of securities—in the profits of an enterprise, which is effectively managed in the Netherlands and to which the Zegna Shares and/or Warrants are attributable. |
(i) | the Non-Dutch Resident Corporate Entity derives profits from an enterprise, which is fully or partly carried on through a permanent establishment (vaste inrichting vaste vertegenwoordiger |
(ii) | the Non-Dutch Resident Corporate Entity is entitled to a share—other than by way of securities—in the profits of an enterprise or a co-entitlement to the net worth of an enterprise, which is effectively managed in the Netherlands and to which the Zegna Shares and/or Warrants are attributable. |
(i) | the holder is resident, or is deemed to be resident, in the Netherlands at the time of the gift or death of the holder; |
(ii) | the holder dies within 180 days after the date of the gift of the Zegna Shares and/or Warrants and was, or was deemed to be, resident in the Netherlands at the time of the holder’s death but not at the time of the gift; or |
(iii) | the gift of the Zegna Shares and/or Warrants is made under a condition precedent and the holder is resident, or is deemed to be resident, in the Netherlands at the time the condition is fulfilled. |
• | “ CITA |
• | “ EEA State |
• | “ Finance Act 2017 |
• | “ Finance Act 2018 |
• | “ Finance Act 2019 |
• | “ Finance Act 2020 |
• | “ Finance Act 2021 |
• | “ IRES |
• | “ IRAP |
• | “ Italian White List |
• | “ Non-Qualified Holdings |
• | “ Qualified Holdings |
• | “ Transfer of Qualified Holdings |
• | 40% of the amount of the dividends paid out of profits formed until the fiscal year that was current on December 31, 2007; |
• | 49.72% of the amount of the dividends paid out of profits formed after the fiscal year that was current on December 31, 2007 and until the fiscal year that was current on December 31, 2016; |
• | 58.14% of the amount of the dividends paid out of profits formed in the fiscal year that was current on December 31, 2017. |
(i) | The tax return regime ( regime della dichiarazione Non-Qualified Holdings before 2019 should be allowed to offset capital gains realized on Transfers of Qualified Holdings as of 2019. The tax return method is mandatory if the taxpayer does not choose one of the two alternative regimes mentioned in (b) and (c) below. |
(ii) | The non-discretionary investment portfolio (risparmio amministrato società di intermediazione mobiliare Non-Qualified Holdings before 2019 should be allowed to offset capital gains realized on Transfers of Qualified Holdings as of 2019. Under this regime, the holder is not required to report capital gains in the annual income tax return. |
(iii) | The discretionary investment portfolio regime ( risparmio gestito Non-Qualified Holding. |
(i) | the Ordinary Shares have been uninterruptedly held as of the first day of the twelfth month prior to the transfer, treating the shares acquired on the most recent date as being transferred first (on a “last in first out” basis); |
(ii) | the Ordinary Shares have been booked as fixed financial assets in the first financial statement closed during the holding period. In case of holders that draft their financial statements according to IAS / IFRS international accounting standards, the Ordinary Shares are deemed as fixed financial assets if they are not accounted as “held for trading”; |
(iii) | residence for tax purposes of the participated entity in a Country other than those with a privileged tax regime in accordance with the criteria set out in Article 47- bis |
(iv) | the participated entity carries out a commercial business activity according to the definition set forth in Article 55 CITA; however, this requirement is not relevant for shareholdings in companies whose securities are traded on regulated markets (as for the Ordinary Shares). This requirement must be met at the time when the capital gain is realized, without interruption, from at least the beginning of the third tax period preceding the one in which the gain is realized. |
• | at a rate of 4% in case of transfers made to the spouse or relatives in direct line, on the portion of the global net value of the transferred assets, if any, exceeding, for each beneficiary, €1,000,000.00. |
• | at a rate of 6% in case of transfers made to relatives up to the fourth degree or relatives-in-law |
• | at a rate of 8% in any other case. |
• | If the transfer is made in favor of persons with severe disabilities, the tax applies on the value exceeding €1,500,000.00 at the rates illustrated above, depending on the type of relationship existing between the deceased or donor and the beneficiary. |
ITEM 11 |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |
ITEM 12 |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13 |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14 |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15 |
CONTROLS AND PROCEDURES |
ITEM 16A |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B |
CODE OF ETHICS |
ITEM 16C |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
(Euro thousands) |
For the years ended December 31, |
|||||||
2021 |
2020 |
|||||||
Audit fees (1) |
8,214 |
1,768 |
||||||
Audit-related fees |
195 |
395 |
||||||
Tax fees |
412 |
308 |
||||||
All other fees |
154 |
669 |
||||||
|
|
|
|
|||||
Total |
8,975 |
3,140 |
(1) |
The Audit fees in 2021 include (i) the PCAOB audit for the years ended December 31, 2020, 2019 and 2018 for Euro 4,900 thousand in connection with the preparation of the consolidated financial statements as of and for the three years in the period ended December 31, 2020 for the purpose of Zegna’s Registration Statement on Form F-4 filed in connection with the Business Combination and (ii) the PCAOB audit for the year ended December 31, 2021. |
• |
Audit fees are the aggregate fees charged by the Deloitte Entities for the audit of our annual consolidated financial statements, the review of our interim consolidated financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements. |
• |
Audit-related fees are the aggregate fees charged by the Deloitte Entities for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” This category comprises fees for agreed upon procedures engagements and other attestation services subject to regulatory requirements. In 2021, approximately €120 thousand of audit-related fees were incurred in relation to the listing process. |
• |
Tax fees are the aggregate fees charged by the Deloitte Entities for services related to tax compliance, tax advice and tax planning. |
• |
All other fees are the aggregate fees charged by the Deloitte Entities for non-audit services rendered which are not listed above. |
ITEM 16D |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G |
CORPORATE GOVERNANCE |
• |
NYSE listing standards generally require a majority of board members to be “independent” as determined under the NYSE listing standards. While the DCGC, in principle, also requires that a majority of board members be “independent”, the definition of “independent” under the DCGC differs in its details from the corresponding definition of “independent” under the NYSE listing standards. In some cases, DCGC requirements are stricter; in other cases the NYSE listing standards are stricter. Currently, a majority of the members of the Zegna Board are independent under the NYSE listing standards (6 out of 11 members) and the DCGC (7 out of 11 members). |
• |
NYSE listing standards require that when an audit committee member of a U.S. domestic listed company serves on four or more audit committees of public companies, the listed company should disclose (either on its website or in its annual proxy statement or annual report filed with the SEC) that the board of directors has determined that this simultaneous service would not impair the director’s service to the listed company. Dutch law does not require the Company to make such a determination. |
• |
NYSE listing standards applicable to U.S. companies require that external auditors be appointed by the audit committee. The general rule under Dutch law is that external auditors are appointed by the Zegna General Meeting. In accordance with the requirements of Dutch law, the appointment and removal of our independent registered public accounting firm must be resolved upon at a Zegna General Meeting. Our Audit Committee is responsible for determining the process for selecting and determining the remuneration of the independent registered public accounting firm and oversees and evaluates the work of our independent registered public accounting firm. |
• |
NYSE listing standards require a U.S. listed company to have a compensation committee and a nominating/corporate governance committee composed entirely of independent directors. As a foreign private issuer, we do not have to comply with this requirement, although we do have a Compensation Committee and a Governance and Sustainability Committee. The charter of our Compensation Committee states that more than half of the members of the Compensation Committee (including the chairperson) are independent under the DCGC. Currently, all three members of our Compensation Committee are independent under the DCGC and two members are independent under the NYSE listing standards. The charter of our Governance and Sustainability Committee states that more than half of the members of the Governance and Sustainability Committee are independent under the DCGC/ Currently all three members of our Governance and Sustainability Committee are independent under the DCGC and two members are independent under the NYSE listing standards. |
• |
Under NYSE listing standards, shareholders of U.S. companies must be given the opportunity to vote on all equity compensation plans and material revisions to those plans, with limited exceptions set forth in the NYSE listing standards. As a foreign private issuer, we are permitted to follow our home country laws regarding shareholder approval of compensation plans. Under Dutch law such approval is only required in relation to members of the board of directors if the articles of association of a company ( i.e. naamloze vennootschap sub-plans under an equity incentive plan that has been approved by the general meeting does not require separate approval of the company’s general meeting, provided, however, that such sub-plans are adopted within the framework and limits of the equity incentive plan as approved by the general meeting. Approval by the general meeting is also not required in respect of equity compensation plans for employees, provided, however, that (i) such employees are no members of the board of directors and (ii) the general meeting has authorized the board of directors to issue shares and/or rights to subscribe for shares. |
ITEM 16H |
MINE SAFETY DISCLOSURE |
ITEM 16I |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 17 |
FINANCIAL STATEMENTS |
ITEM 18 |
FINANCIAL STATEMENTS |
ITEM 19 |
EXHIBITS |
Exhibit Number |
Description | |
1.1 |
||
1.2 |
||
2.1 |
||
2.2 |
||
2.3 |
||
2.4 |
||
2.5 |
||
4.1 |
||
4.2 |
||
4.3 |
||
4.4 |
||
4.5 |
||
4.6 |
||
4.7 |
||
4.8 |
||
4.9† |
Exhibit Number |
Description | |
4.10 |
||
4.11 |
||
8.1 |
||
12.1 |
||
12.2 |
||
13.1 |
||
13.2 |
||
15.1 |
||
101 |
Interactive Data File | |
104 |
Cover Page Interactive Data File |
† |
Certain of the exhibits and schedules to this exhibit have been omitted in accordance with the Instructions as to Exhibits of Form 20-F. The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
ERMENEGILDO ZEGNA N.V. | ||||||
April 6, 2022 |
By: |
/s/ Ermenegildo Zegna di Monterubello | ||||
Name: Ermenegildo Zegna di Monterubello | ||||||
Title: Chairperson and Chief Executive Officer |
F-2 | ||
F-6 | ||
F-7 | ||
F-8 | ||
F-9 | ||
F-10 | ||
F-11 |
• | We evaluated management’s ability to accurately forecast future cash flows by comparing actual results to management’s historical forecasts. |
• | We evaluated the consistency of management forecasts prepared at the DOS level to management’s segments-level forecasts. |
• | We evaluated the reasonableness of management’s estimated future cash flows, including management’s basis and approach for considering the impacts of changes in market conditions and economic events, by: |
- | Inquiring of the Company’s executives to understand the business initiatives supporting the assumptions in the future cash flows, and |
- | Comparing the forecasts to (1) historical revenue and operating results; (2) internal communications regarding the Company’s business plan and strategy; and (3) industry and market conditions. |
• | With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates used in the impairment analysis by testing the source information used to select appropriate discount rates and the mathematical accuracy of the discount rate calculations. |
• | We evaluated management’s ability to accurately forecast revenues and profit of the Thom Browne Group by comparing actual revenue and profit results to management’s historical forecasts. |
• | We evaluated management’s assumptions related to future revenues and profits by: |
- | Inquiring of the Company’s executives to understand the business initiatives supporting the assumptions in the future revenues and profits, and |
- | Comparing the forecasts to the current and past performance of the Thom Browne Group and to external market and industry data. |
• | With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates used in the valuation of the Thom Browne put option liability by testing the source information underlying management’s selection of a discount rate and testing the mathematical accuracy of the discount rate calculations. |
(Euro thousands) |
For the years ended December 31, |
|||||||||||||
Notes |
2021 |
2020 |
2019 |
|||||||||||
Revenues |
7 | |||||||||||||
Other income |
8 | |||||||||||||
Cost of raw materials and consumables |
9 | ( |
) | ( |
) | ( |
) | |||||||
Purchased, outsourced and other costs |
10 | ( |
) | ( |
) | ( |
) | |||||||
Personnel costs |
11 | ( |
) | ( |
) | ( |
) | |||||||
Depreciation, amortization and impairment of assets |
12 | ( |
) | ( |
) | ( |
) | |||||||
Write downs and other provisions |
13 | ( |
) | ( |
) | ( |
) | |||||||
Other operating costs |
14 | ( |
) | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||||
Operating (Loss)/Profit |
( |
) |
( |
) |
||||||||||
Financial income |
15 | |||||||||||||
Financial expenses |
15 | ( |
) | ( |
) | ( |
) | |||||||
Foreign exchange (losses)/gains |
15 | ( |
) | ( |
) | |||||||||
Result from investments accounted for using the equity method |
21 | ( |
) | ( |
) | |||||||||
Impairments of investments accounted for using the equity method |
21 | ( |
) | |||||||||||
|
|
|
|
|
|
|||||||||
(Loss)/Profit before taxes |
( |
) |
( |
) |
||||||||||
Income taxes |
16 | ( |
) | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||||
(Loss)/Profit for the year |
( |
) |
( |
) |
||||||||||
Attributable to: |
||||||||||||||
Shareholders of the Parent Company |
( |
) |
( |
) |
||||||||||
Non-controlling interests |
||||||||||||||
Basic earnings per share in Euro |
17 | ( |
) | ( |
) | |||||||||
Diluted earnings per share in Euro |
17 | ( |
) | ( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||||||
Notes |
2021 |
2020 |
2019 |
|||||||||||||
(Loss)/Profit for the year |
( |
) |
( |
) |
||||||||||||
Other comprehensive income/(loss): |
||||||||||||||||
Items that will be subsequently reclassified to the statement of profit and loss: |
||||||||||||||||
Foreign currency exchange differences arising from the translation of foreign operations |
( |
) | ||||||||||||||
Net (loss)/gain from cash flow hedges |
( |
) | ( |
) | ||||||||||||
Net gain from financial instruments measured at fair value |
||||||||||||||||
Items that will not be subsequently reclassified to the statement of profit and loss: |
||||||||||||||||
Net actuarial (loss)/gain from defined benefit plans |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Total other comprehensive income/(loss) |
31 | ( |
) |
|||||||||||||
|
|
|
|
|
|
|||||||||||
Total comprehensive (loss)/income for the year |
( |
) |
( |
) |
||||||||||||
Attributable to: |
||||||||||||||||
Shareholders of the Parent Company |
( |
) |
( |
) |
||||||||||||
Non-controlling interests |
(Euro thousands) |
At December 31 |
|||||||||
Notes |
2021 |
2020 |
||||||||
Assets |
||||||||||
Non-current assets |
||||||||||
Intangible assets |
18 | |||||||||
Property, plant and equipment |
19 | |||||||||
Right-of-use |
20 | |||||||||
Investments at equity method |
21 | |||||||||
Deferred tax assets |
16 | |||||||||
Investment property |
22 | |||||||||
Other non-current financial assets |
23 | |||||||||
|
|
|
|
|||||||
Total non-current assets |
||||||||||
Current assets |
||||||||||
Inventories |
24 | |||||||||
Trade receivables |
25 | |||||||||
Derivative financial instruments |
26 | |||||||||
Tax receivables |
||||||||||
Other current financial assets |
27 | |||||||||
Other current assets |
28 | |||||||||
Cash and cash equivalents |
29 | |||||||||
|
|
|
|
|||||||
Assets held for sale |
30 | |||||||||
|
|
|
|
|||||||
Total current assets |
||||||||||
|
|
|
|
|||||||
Total assets |
||||||||||
|
|
|
|
|||||||
Liabilities and Equity |
||||||||||
Share capital |
31 | |||||||||
Retained earnings |
31 | |||||||||
Other reserves |
31 | ( |
) | |||||||
|
|
|
|
|||||||
Equity attributable to shareholders of the Parent Company |
||||||||||
Equity attributable to non-controlling interest |
32 | |||||||||
|
|
|
|
|||||||
Total equity |
||||||||||
Non-current liabilities |
||||||||||
Non-current borrowings |
33 | |||||||||
Other non-current financial liabilities |
34 | |||||||||
Non-current lease liabilities |
35 | |||||||||
Non-current provisions for risks and charges |
36 | |||||||||
Employee benefits |
37 | |||||||||
Deferred tax liabilities |
16 | |||||||||
|
|
|
|
|||||||
Total non-current liabilities |
||||||||||
Current liabilities |
||||||||||
Current borrowings |
33 | |||||||||
Other current financial liabilities |
34 | |||||||||
Current lease liabilities |
35 | |||||||||
Derivative financial instruments |
26 | |||||||||
Current provisions for risks and charges |
36 | |||||||||
Trade payables and customer advances |
38 | |||||||||
Tax liabilities |
||||||||||
Other current liabilities |
39 | |||||||||
|
|
|
|
|||||||
Liabilities held for sale |
30 | |||||||||
|
|
|
|
|||||||
Total current liabilities |
||||||||||
|
|
|
|
|||||||
Total equity and liabilities |
||||||||||
|
|
|
|
(Euro thousands) |
For the years ended December 31, |
|||||||||||||||
Notes |
2021 |
2020 |
2019 |
|||||||||||||
Operating activities |
43 | |||||||||||||||
(Loss)/Profit for the year |
( |
) | ( |
) | ||||||||||||
Income taxes |
||||||||||||||||
Depreciation, amortization and impairment of assets |
||||||||||||||||
Financial income |
( |
) | ( |
) | ( |
) | ||||||||||
Financial costs |
||||||||||||||||
Exchange losses/(gains) |
( |
) | ||||||||||||||
Write downs and other provisions |
||||||||||||||||
Write downs of the provision for obsolete inventory |
||||||||||||||||
Result from investments accounted for using the equity method |
( |
) | ||||||||||||||
Impairments of investments accounted for using the equity method |
||||||||||||||||
Losses arising from the sale of fixed assets |
||||||||||||||||
Other non-cash expenses/(income), net |
( |
) | ( |
) | ||||||||||||
Change in inventories |
( |
) | ( |
) | ( |
) | ||||||||||
Change in trade receivables |
( |
) | ( |
) | ||||||||||||
Change in trade payables including customer advances |
( |
) | ( |
) | ||||||||||||
Change in other operating assets and liabilities |
( |
) | ( |
) | ||||||||||||
Interest paid |
( |
) | ( |
) | ( |
) | ||||||||||
Income taxes paid |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows from operating activities |
||||||||||||||||
Investing activities |
43 | |||||||||||||||
Payments for property plant and equipment |
( |
) | ( |
) | ( |
) | ||||||||||
Proceeds from disposals of property plant and equipment |
||||||||||||||||
Payments for intangible assets |
( |
) | ( |
) | ( |
) | ||||||||||
Payments for investment property |
( |
) | ||||||||||||||
Proceeds from disposals of non-current financial assets |
||||||||||||||||
Payments for purchases of non-current financial assets |
( |
) | ( |
) | ||||||||||||
Proceeds from disposals of current financial assets and derivative instruments |
||||||||||||||||
Payments for acquisitions of current financial assets and derivative instruments |
( |
) | ( |
) | ( |
) | ||||||||||
Acquisition of Investments at equity method |
( |
) | ||||||||||||||
Business combinations, net of cash acquired |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows (used in)/from investing activities |
( |
) |
||||||||||||||
Financing activities |
||||||||||||||||
Proceeds from borrowings |
||||||||||||||||
Repayments of borrowings |
( |
) | ( |
) | ( |
) | ||||||||||
Repayments of non-current financial liabilities |
( |
) | ||||||||||||||
Payments of lease liabilities |
( |
) | ( |
) | ( |
) | ||||||||||
Purchase of own shares from Monterubello |
( |
) | ||||||||||||||
Proceeds from issuance of ordinary shares upon Business Combination |
||||||||||||||||
Proceeds from issuance of ordinary shares to PIPE Investors |
||||||||||||||||
Payments of transaction costs related to the Business Combination |
( |
) | ||||||||||||||
Cash distributed as part of the Disposition |
( |
) | ||||||||||||||
Payments for acquisition of non-controlling interests |
( |
) | ||||||||||||||
Sale of shares held in treasury/(Purchase of own shares) |
( |
) | ( |
) | ||||||||||||
Dividends paid to non-controlling interests |
( |
) | ( |
) | ( |
) | ||||||||||
Dividends to owners of the parent |
( |
) | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Net cash flows used in financing activities |
( |
) |
( |
) |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||||||
Effects of exchange rate changes on cash and cash equivalents |
( |
) |
||||||||||||||
|
|
|
|
|
|
|||||||||||
Net increase/(decrease) in cash and cash equivalents |
( |
) | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at the beginning of the year |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents at the end of the year |
||||||||||||||||
|
|
|
|
|
|
(Euro thousands) |
Other comprehensive income |
|||||||||||||||||||||||||||||||||||||||
Share capital |
Retained earnings |
Other reserves |
Currency translation difference |
Cash flow hedge reserve |
Remeasurement of defined benefit plans |
Financial assets at FVOCI reserve |
Total equity attributable to shareholders of the Parent Company |
Total equity attributable to non-controlling interests |
Total equity |
|||||||||||||||||||||||||||||||
At January 1, 2019 (Restated) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
Profit/(Loss) for the year |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income/(loss) |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
Dividends |
— | ( |
) | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Other changes |
— | ( |
) | ( |
) | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At December 31, 2019 |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
(Loss)/Profit for the year |
— | ( |
) | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Other comprehensive income/(loss) |
— | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Dividends |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Other changes |
— | ( |
) | ( |
) | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At December 31, 2020 |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||
(Loss)/Profit for the year |
— | ( |
) | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Other comprehensive income/(loss) |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||
Dividends |
— | — | ( |
) | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Capital increase related to the Business Combination |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Purchase of own shares from Monterubello |
— | — | ( |
) | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Capital contribution from Monterubello |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of shares held in treasury |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Assignment of treasury shares |
— | ( |
) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Acquisition of non-controlling interests |
— | — | — | — | — | — | ( |
) | — | |||||||||||||||||||||||||||||||
Acquisition of Ubertino |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Share-based payments |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Disposition |
— | ( |
) | — | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At December 31, 2021 |
( |
) |
( |
) |
• | Ermenegildo Zegna Holditalia S.p.A. implemented a cross-border conversion whereby it, by means of the execution of a Dutch notarial deed of cross-border conversion and amendment of its articles of association, converted into a Dutch public limited liability company (naamloze vennootschap) Conversion |
• | In connection with the Conversion, Zegna underwent a share split of Share Split |
• | Zegna Merger Sub merged with and into IIAC, with IIAC being the surviving entity in the merger (the “ Merger |
a. | each share of Zegna Merger Sub was converted into one IIAC ordinary share; |
b. | a total number of |
c. | |
d. | |
e. | The issuance of Escrow Shares Share-Based Payment |
• | Pursuant to certain agreements between Zegna and IIAC, the private investment in public equity investors (“ PIPE Investors |
• | Zegna repurchased Monterubello |
• | Transaction costs incurred by the Group in relation to the Business Combination amounted to Euro |
(Euro thousands) |
||||
Proceeds from issuance of ordinary shares upon Business Combination |
||||
Proceeds from issuance of ordinary shares to PIPE Investors |
||||
Purchase of own shares from Monterubello |
( |
) | ||
Payments of transaction costs related to the Business Combination |
( |
) | ||
|
|
|||
Net cash proceeds from the Business Combination |
• |
the consolidated statement of profit and loss is presented by nature, in line with internal reporting processes and business operations; |
• |
the consolidated statement of comprehensive income is presented as a separate statement and, in addition to presenting the components of profit and loss recognized directly in the consolidated statement of profit and loss during the period, presents the components of profit and loss not recognized in profit or loss as required or permitted by IFRS; |
• |
the consolidated statement of financial position presents assets and liabilities by current and non-current items. Current items are those expected to be realized within 12 months from the reporting date or to be sold or consumed in the normal operating cycle of the Group; |
• |
the consolidated cash flow statement has been prepared using the “indirect method”, as permitted by IAS 7 — Statement of Cash Flows (“IAS 7”), and presents cash flows by operating, investing and financing activities; |
• |
the consolidated statement of changes in equity presents the movements in shareholder’s equity. |
• | changes to contractual cash flows – a company will not be required to derecognize or adjust the carrying amount of financial instruments for changes required by the interest rate benchmark reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate; |
• | hedge accounting – a company will not have to discontinue its hedge accounting solely because it makes changes required by the interest rate benchmark reform if the hedge meets other hedge accounting criteria; and |
• | disclosures – a company will be required to disclose information about new risks that arise from the interest rate benchmark reform and how the company manages the transition to alternative benchmark rates. |
2021 |
2020 |
2019 |
||||||||||||||||||||||
At December 31 |
Average |
At December 31 |
Average |
At December 31 |
Average |
|||||||||||||||||||
U.S. Dollar |
||||||||||||||||||||||||
Swiss Franc |
||||||||||||||||||||||||
Chinese Renminbi |
||||||||||||||||||||||||
Pound Sterling |
||||||||||||||||||||||||
Hong Kong Dollar |
||||||||||||||||||||||||
Singapore Dollar |
||||||||||||||||||||||||
United Arab Emirates Dirham |
||||||||||||||||||||||||
Japanese Yen |
Company |
Registered office |
Share capital (functional currency) |
Held directly by |
% Group |
||||||||||||
At December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Companies consolidated on a line-by-line |
||||||||||||||||
Parent company |
||||||||||||||||
Italian subsidiaries |
||||||||||||||||
|
||||||||||||||||
S.r.l. |
||||||||||||||||
|
||||||||||||||||
Foreign subsidiaries |
||||||||||||||||
Minato-Ku-Tokyo |
||||||||||||||||
|
||||||||||||||||
S.A. |
||||||||||||||||
Far-East Pte LTD |
||||||||||||||||
Far-East Pte LTD |
||||||||||||||||
Far-East Pte LTD |
||||||||||||||||
Company |
Registered office |
Share capital (functional currency) |
Held directly by |
% Group |
||||||||||||
At December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Investments valued using the equity method of accounting |
||||||||||||||||
Italian associates and joint arrangements |
||||||||||||||||
Foreign associates and joint arrangements |
||||||||||||||||
Other investments valued at fair value |
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
(*) |
Disposed of as part of the Disposition, which was completed on November 1, 2021 (See Note 1 - General information, for additional details). |
(**) |
Reclassified as current assets held for sale in 2020 and sold in 2021 (See Note 30 - Assets and liabilities held for sale, for additional details). |
• | On January 14, 2021, the Group sold in two tranches during September and October 2021; |
• | On February 16, 2021 the Group incorporated Ermenegildo Zegna Czech s.r.o., primarily to manage a franchised store in Prague that the Group converted to a DOS; |
• | On June 1, 2021 the Group acquired an additional non-controlling interests in the amount of Euro non-controlling interests was reduced by Euro |
• | On June 4, 2021 the Group acquired Business combinations |
• | On July 14, 2021 the Group acquired |
• | On July 28, 2021, the Group acquired an additional non-controlling interests in the amount of Euro non-controlling interests was reduced by Euro |
• | On September 2, 2021 the Group finalized the purchase of the single purpose company London Blue LLC, which holds a real estate property in London, England (previously |
• |
On September 28, 2021 the Group sold a |
• | On October 1, 2021 EZ Service S.r.l. (“EZ Service”), a limited liability company based in Italy and fully owned by Ermenegildo Zegna Holditalia S.p.A., was incorporated. A branch of Ermenegildo Zegna Holditalia S.p.A. was transferred to EZ Service effective November 1, 2021. EZ Service provides a range of corporate services to both Group subsidiaries and third parties, including, among others, services related to administration, tax, legal, design, marketing, retail management and information technology; |
• | As part of the activities contemplated by the Business Combination, on November 1, 2021, Zegna completed the Disposition (as defined in Note 1 - General information |
• | As part of the activities contemplated by the Business Combination, in December 2021 EZ Cayman, a wholly-owned subsidiary of Zegna that was incorporated in 2021 for the purposes of the Business Combination, was merged with and into IIAC, with IIAC being the surviving entity, as a result of which IIAC became a wholly-owned subsidiary of Zegna. For additional information relating to the Business Combination please see Note 1 - General information . |
Category of Property, Plant and Equipment |
Depreciation rate |
|||
Buildings |
% | |||
Plants and machinery |
% | |||
Industrial and commercial equipment |
% | |||
Other tangible assets |
% |
Category of Intangible assets with a finite useful life |
Depreciation rate |
|||
Concessions, licenses, trademarks and patents |
% | |||
Software |
% | |||
Know how |
% | |||
Development costs and other intangibles |
% |
1. | Financial assets at amortized cost; |
2. | Financial assets at fair value through other comprehensive income, with subsequent recycling of cumulative gains and losses to the statement of profit and loss (“FVOCI”); or |
3. | Financial assets at fair value through profit and loss (“FVPL”). |
a. | there is an economic relationship between the hedged item and the hedging instrument; |
b. | the effect of credit risk does not dominate the value changes that result from that economic relationship; and |
c. | the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. |
a. | hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedge). Where a derivative financial instrument is designated as a hedge against the fluctuation in fair value of a recognized asset or liability (fair value hedge), the gain or loss for re-measuring the hedging instrument at fair value is recognized in the statement of profit and loss together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Consistently, the hedged items are adjusted to consider changes in fair value of the hedged risk. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognized in the statement of profit and loss. The gain or loss relating to the ineffective portion is recognized in the statement of profit and loss. Changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk are recognized in the statement of profit and loss. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest rate method is used is amortized to the statement of profit and loss over the period to maturity. |
b. | hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge). Where a derivative financial instrument is designated as a hedge of foreign exchange rate or interest rate in relation to future cash flow (cash flow hedge), the effective portion of any gain or loss on the derivative financial instrument is recognized directly in other comprehensive income within equity. The gain or loss associated with an ineffective portion of a hedge is recognized in the statement |
of profit and loss. The cumulative gain or loss is removed from equity and recognized in the statement of profit and loss at the same time in which the hedged transaction affects the statement of profit and loss (as an adjustment to the caption of the statement of profit and loss affected by the hedged cash flows). The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognized in the statement of profit and loss. The gain or loss relating to the effective portion of forward foreign exchange contracts hedging export sales is recognized in the statement of profit and loss within ‘revenues’. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of profit and loss. |
• | the service costs are recognized in the consolidated statement of profit and loss in the personnel cost line item; |
• | the net interest expense on the defined benefit liability is recognized in the consolidated statement of profit and loss within financial expenses; |
• | the remeasurement components of the net obligation, which comprise actuarial gain and losses, are recognized immediately in other comprehensive income. These remeasurement components are not reclassified in the consolidated statement of profit and loss in a subsequent period. |
4. |
Use of estimates |
5. |
Business combinations |
(Euro thousands) |
At acquisition date |
|||
Consideration paid |
||||
Contingent consideration |
||||
|
|
|||
Total consideration |
||||
|
|
(Euro thousands) |
Fair value at acquisition date |
|||
Cash and cash equivalents |
||||
Trade receivables |
||||
Inventories |
||||
Other current assets |
||||
Property, plant and equipment |
||||
Intangible assets |
||||
Account payables |
( |
) | ||
Other current liabilities |
( |
) | ||
Employee benefits |
( |
) | ||
Deferred tax liabilities |
( |
) | ||
|
|
|||
Net identifiable assets acquired |
||||
|
|
|||
Less: Non-controlling interests |
( |
) | ||
|
|
|||
Goodwill |
||||
|
|
|||
Net assets acquired including goodwill |
||||
|
|
At acquisition date |
||||
Consideration paid |
( |
) | ||
Cash and cash equivalents acquired |
||||
|
|
|||
Net cash outflow - Investing activities |
( |
) | ||
|
|
6. |
Segment reporting |
1. | Zegna Segment — Includes all activities related to the Zegna Branded Products, Textile and Third Party Brands (previously referred to as Strategic Alliances) product lines. |
2. | Thom Browne Segment — Includes all activities related to the Thom Browne brand. |
(Euro thousands) |
For the year ended December 31, 2021 |
|||||||||||||||
Zegna |
Thom Browne |
Intercompany eliminations |
Group Consolidated |
|||||||||||||
Revenues with third parties |
— | |||||||||||||||
Inter-segment revenues |
( |
) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Revenues |
( |
) |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
( |
) | ( |
) | ( |
) | ||||||||||
Adjusted EBIT |
— |
|||||||||||||||
Costs related to the Business Combination (1) |
( |
) | ||||||||||||||
Costs related to lease agreements (2) |
( |
) | ||||||||||||||
Severance indemnities and provision for severance expenses |
( |
) | ||||||||||||||
Impairment of property, plant and equipment and right-of-use (3) |
( |
) | ||||||||||||||
Other adjustments ( 4 ) |
( |
) | ||||||||||||||
Financial income |
||||||||||||||||
Financial expenses |
( |
) | ||||||||||||||
Foreign exchange gains/(losses) |
( |
) | ||||||||||||||
Result from investments accounted for using the equity method |
||||||||||||||||
|
|
|||||||||||||||
Loss before taxes |
( |
) |
(1) |
Costs related to the Business Combination include: |
a) |
Euro |
b) |
Euro |
c) |
Euro |
d) |
Euro |
e) |
Euro Related party transactions . |
f) |
Euro non-executive directors. This amount is recorded within the line item “personnel costs” in the consolidated statement of profit and loss. |
g) |
Euro write-off of non-refundable prepaid premiums for directors’ and officers’ insurance. This amount is recorded within the line item “personnel costs” in the consolidated statement of profit and loss. |
(2) |
Costs related to lease agreements for the year ended December 31, 2021, include (i) € |
(3) |
Includes impairment relating to the Group’s DOSs. |
(4) |
Other adjustments for the year ended December 31, 2021 include € |
(Euro thousands) |
For the year ended December 31, 2020 |
|||||||||||||||
Zegna |
Thom Browne |
Intercompany eliminations |
Group Consolidated |
|||||||||||||
Revenues with third parties |
||||||||||||||||
Inter-segment revenues |
( |
) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Revenues |
( |
) |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
( |
) | ( |
) | — | ( |
) | |||||||||
Adjusted EBIT |
( |
) |
||||||||||||||
Donations related to the COVID-19 pandemic |
( |
) | ||||||||||||||
Costs related to lease agreements |
( |
) | ||||||||||||||
Impairment of property, plant and equipment and right-of-use |
( |
) | ||||||||||||||
Severance indemnities and provision for severance expenses |
( |
) | ||||||||||||||
Impairment on held for sale assets |
( |
) | ||||||||||||||
Financial income |
||||||||||||||||
Financial expenses |
( |
) | ||||||||||||||
Foreign exchange gains/(losses) |
||||||||||||||||
Result from investments accounted for using the equity method |
( |
) | ||||||||||||||
Impairments of investments accounted for using the equity method |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Loss before taxes |
( |
) |
(Euro thousands) |
For the year ended December 31, 2019 |
|||||||||||||||
Zegna |
Thom Browne |
Intercompany eliminations |
Group Consolidated |
|||||||||||||
Revenues with third parties |
— | |||||||||||||||
Inter-segment revenues |
( |
) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Revenues |
( |
) |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
( |
) | ( |
) | — | ( |
) | |||||||||
Adjusted EBIT |
||||||||||||||||
Impairment of property, plant and equipment and right-of-use |
( |
) | ||||||||||||||
Severance indemnities and provision for severance expenses |
( |
) | ||||||||||||||
Financial income |
||||||||||||||||
Financial expenses |
( |
) | ||||||||||||||
Foreign exchange gains/(losses) |
( |
) | ||||||||||||||
Result from investments accounted for using the equity method |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Profit before taxes |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
EMEA (1) |
||||||||
of which Italy |
||||||||
North America (2) |
||||||||
of which United States |
||||||||
Latin America (3) |
||||||||
APAC (4) |
||||||||
of which Greater China Region |
||||||||
of which Japan |
||||||||
|
|
|
|
|||||
Total non-current assets (other than financial instruments and deferred tax assets) |
(1) |
EMEA includes Europe, the Middle East and Africa. |
(2) |
North America includes the United States of America and Canada. |
(3) |
Latin America includes Mexico, Brazil and other Central and South American countries. |
(4) |
APAC includes the Greater China Region, Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries. |
7. |
Revenues |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Zegna branded products |
||||||||||||
Thom Browne |
||||||||||||
Textile |
||||||||||||
Third Party Brands |
||||||||||||
Agnona |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Direct to Consumer (DTC) - Zegna branded products |
||||||||||||
Direct to Consumer (DTC) - Thom Browne branded products |
||||||||||||
|
|
|
|
|
|
|||||||
Total Direct to Customer (DTC) |
||||||||||||
Wholesale Zegna branded products |
||||||||||||
Wholesale Thom Browne branded products |
||||||||||||
Wholesale Third Party Brands and Textile |
||||||||||||
Wholesale Agnona |
||||||||||||
|
|
|
|
|
|
|||||||
Total Wholesale |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
EMEA (1) |
||||||||||||
of which Italy |
||||||||||||
of which UK |
||||||||||||
North America (2) |
||||||||||||
of which United States |
||||||||||||
Latin America (3) |
||||||||||||
APAC (4) |
||||||||||||
of which Greater China Region |
||||||||||||
of which Japan |
||||||||||||
Other (5) |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues |
(1) |
EMEA includes Europe, the Middle East and Africa. |
(2) |
North America includes the United States of America and Canada. |
(3) |
Latin America includes Mexico, Brazil and other Central and South American countries. |
(4) |
APAC includes the Greater China Region, Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries. |
(5) |
Other revenues mainly include royalties and certain sales of old season products. |
8. |
Other income |
9. |
Cost of raw materials and consumables |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Raw materials |
( |
) | ( |
) | ( |
) | ||||||
Finished goods |
( |
) | ( |
) | ( |
) | ||||||
Consumables |
( |
) | ( |
) | ( |
) | ||||||
Change in raw materials, consumables and finished goods |
( |
) | ( |
) | ||||||||
Other |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total cost of raw materials and consumables |
( |
) |
( |
) |
( |
) |
10. |
Purchased, outsourced and other costs |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Consultancy fees and corporate bodies fees |
( |
) | ( |
) | ( |
) | ||||||
Advertising and marketing expenses |
( |
) | ( |
) | ( |
) | ||||||
Lease expenses |
( |
) | ( |
) | ( |
) | ||||||
Outsourcing of production |
( |
) | ( |
) | ( |
) | ||||||
Freight, insurance and selling expenses |
( |
) | ( |
) | ( |
) | ||||||
Utilities |
( |
) | ( |
) | ( |
) | ||||||
Maintenance costs |
( |
) | ( |
) | ( |
) | ||||||
Royalties |
( |
) | ( |
) | ( |
) | ||||||
Other services |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total purchased, outsourced and other costs |
( |
) |
( |
) |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Rent reductions |
— |
|||||||||||
Variable lease payments |
( |
) |
( |
) |
( |
) | ||||||
Expenses relating to short-term leases |
( |
) |
( |
) |
( |
) | ||||||
Expenses relating to low value leases |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Total lease expenses |
( |
) |
( |
) |
( |
) |
11. |
Personnel costs |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Wages and salaries |
( |
) | ( |
) | ( |
) | ||||||
Social contributions, pension plans and indemnities |
( |
) | ( |
) | ( |
) | ||||||
Share-based payments |
( |
) | — | — | ||||||||
Severance indemnities |
( |
) | ( |
) | ( |
) | ||||||
Other long-term benefits |
( |
) | — | — | ||||||||
Uniforms |
( |
) | ( |
) | ( |
) | ||||||
Insurances and other benefits |
( |
) | ( |
) | ( |
) | ||||||
Other payroll expenses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total personnel costs |
( |
) |
( |
) |
( |
) |
12. |
Depreciation, amortization and impairment of assets |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Depreciation and amortization |
( |
) | ( |
) | ( |
) | ||||||
Of which: |
||||||||||||
Right-of-use |
( |
) |
( |
) |
( |
) | ||||||
Property, plant and equipment and investment property |
( |
) |
( |
) |
( |
) | ||||||
Intangible assets with a finite useful life |
( |
) |
( |
) |
( |
) | ||||||
Impairment |
( |
) |
( |
) |
( |
) | ||||||
Of which: |
||||||||||||
Right-of-use |
( |
) |
( |
) |
( |
) | ||||||
Property, plant and equipment |
( |
) |
( |
) |
( |
) | ||||||
Intangible assets |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total depreciation, amortization and impairment of assets |
( |
) |
( |
) |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Provision for legal expenses |
( |
) | ( |
) | ||||||||
Agnona disposal and write downs |
( |
) | ( |
) | — | |||||||
Provision for restoration obligations for leased stores |
( |
) | ( |
) | ( |
) | ||||||
Reversal/(Loss) allowance on trade receivables |
( |
) | ( |
) | ||||||||
Other provisions |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total write downs and other provisions |
( |
) |
( |
) |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Costs related to the Business Combination |
( |
) | — | — | ||||||||
Bank fees |
( |
) | ( |
) | ( |
) | ||||||
Travel expenses |
( |
) | ( |
) | ( |
) | ||||||
Indirect taxes |
( |
) | ( |
) | ( |
) | ||||||
Gifts, associations and donations |
( |
) | ( |
) | ( |
) | ||||||
Stationary and other materials |
( |
) | ( |
) | ( |
) | ||||||
Losses on disposals of assets |
( |
) | ( |
) | ( |
) | ||||||
Other operating co s ts |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total other operating costs |
( |
) |
( |
) |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Financial income |
||||||||||||
Options - Changes in fair value |
||||||||||||
Fixed-income securities |
||||||||||||
Hedging operations |
||||||||||||
Interest on financial other assets |
||||||||||||
Interest on financial receivables/loans |
||||||||||||
Derivative financial instruments |
||||||||||||
Other financial income |
||||||||||||
|
|
|
|
|
|
|||||||
Total financial income |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses |
||||||||||||
Options - Changes in fair value |
( |
) | ( |
) | ( |
) | ||||||
Hedging operations |
( |
) | ( |
) | ( |
) | ||||||
Interest and financial charges for lease liabilities |
( |
) | ( |
) | ( |
) | ||||||
Warrants - Changes in fair value |
( |
) | — | — | ||||||||
Fixed-income securities |
( |
) | ( |
) | ( |
) | ||||||
Interest on bank loans and overdrafts |
( |
) | ( |
) | ( |
) | ||||||
Interest expenses on interest rate swaps |
( |
) | ( |
) | ( |
) | ||||||
Derivative financial instruments |
( |
) | ||||||||||
Other financial exp e nses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total financial expenses |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange (losses)/gains |
( |
) |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
Current taxes |
( |
) |
( |
) |
( |
) | ||||||
Deferred taxes |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Income taxes |
( |
) |
( |
) |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
(Loss)/Profit before taxes |
( |
) | ( |
) | ||||||||
Theoretical income tax benefit/(expense) - tax rate |
( |
) | ||||||||||
Tax effect on: |
||||||||||||
Non-deductible costs |
( |
) | ( |
) | ( |
) | ||||||
Patent box impact |
— | |||||||||||
Differences between foreign tax rates and the theoretical applicable tax rate and tax holidays |
( |
) | ( |
) | ||||||||
Taxes relating to prior years |
( |
) | ( |
) | ||||||||
Deferred tax assets not recognized |
( |
) | ( |
) | ( |
) | ||||||
Withholding tax on earnings |
( |
) | ( |
) | ( |
) | ||||||
Other tax items |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total tax expense, excluding IRAP |
( |
) |
( |
) |
( |
) | ||||||
Effective tax rate, excluding IRAP |
( |
)% | ( |
)% | % | |||||||
Italian regional income tax expense (IRAP) |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total income tax |
( |
) |
( |
) |
( |
) |
(Euro thousands) |
At December 31, 2020 |
Recognized in profit and loss |
Recognized in comprehensive income |
Exchange differences and other |
Disposition |
At December 31, 2021 |
||||||||||||||||||
Deferred tax assets arising on: |
||||||||||||||||||||||||
Employee benefits |
— | ( |
) | |||||||||||||||||||||
Property plant and equipment |
— | — | ( |
) | ||||||||||||||||||||
Right-of-use |
— | — | ||||||||||||||||||||||
Intangible assets |
( |
) | — | — | — | |||||||||||||||||||
Provision for obsolete inventory |
— | — | ||||||||||||||||||||||
Tax provisions |
( |
) | — | — | ||||||||||||||||||||
Financial assets |
— | — | — | |||||||||||||||||||||
Tax losses |
— | — | — | |||||||||||||||||||||
Other |
( |
) | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total deferred tax assets |
— |
( |
) |
|||||||||||||||||||||
Deferred tax liabilities arising on: |
||||||||||||||||||||||||
Property plant and equipment |
— | ( |
) | — | ||||||||||||||||||||
Right-of-use |
— | ( |
) | |||||||||||||||||||||
Intangible assets |
— | — | ||||||||||||||||||||||
Financial assets fair value |
— | — | ||||||||||||||||||||||
Other |
( |
) | — | — | ||||||||||||||||||||
Total deferred tax liabilities |
( |
) |
( |
) |
(Euro thousands) |
At December 31, 2019 |
Recognized in profit and loss |
Recognized in comprehensive income |
Exchange differences and other |
At December 31, 2020 |
|||||||||||||||
Deferred tax assets arising on: |
||||||||||||||||||||
Employee benefits |
( |
) | ( |
) | ||||||||||||||||
Property plant and equipment |
— | ( |
) | |||||||||||||||||
right-of-use |
— | ( |
) | |||||||||||||||||
Intangible assets |
— | — | ||||||||||||||||||
Provision for obsolete inventory |
— | |||||||||||||||||||
Tax provisions |
— | — | ||||||||||||||||||
Financial assets |
— | — | ||||||||||||||||||
Tax losses |
— | ( |
) | |||||||||||||||||
Other |
( |
) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deferred tax assets |
( |
) |
||||||||||||||||||
Deferred tax liabilities arising on: |
||||||||||||||||||||
Property plant and equipment |
( |
) | — | |||||||||||||||||
Right-of-use |
— | — | ||||||||||||||||||
Intangible assets |
( |
) | — | ( |
) | |||||||||||||||
Financial assets fair value |
( |
) | — | — | ||||||||||||||||
Other |
— | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deferred tax liabilities |
— |
( |
) |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Expiry within 1 year |
||||||||
Expiry 1-5 years |
||||||||
Expiry over 5 years |
||||||||
No expiration |
||||||||
|
|
|
|
|||||
Total tax losses carried forward |
17. |
Earnings per share |
(Euro thousands) |
For the years ended December 31, |
|||||||||||
2021 |
2020 |
2019 |
||||||||||
(Loss)/Profit for the year attributable to shareholders of the Parent Company |
( |
) |
( |
) |
||||||||
Weighted average number of shares for basic earnings per share |
||||||||||||
Weighted average number of shares for diluted earnings per share |
||||||||||||
|
|
|
|
|
|
|||||||
Basic earnings per share in Euro |
( |
) |
( |
) |
||||||||
Diluted earnings per share in Euro |
( |
) |
( |
) |
(Euro thousands) |
Goodwill |
Brands with an indefinite useful life |
Concessions, licenses, trademarks and patents |
Other intangible assets |
Intangible assets in progress |
Total |
||||||||||||||||||
Historical cost at January 1, 2020 |
||||||||||||||||||||||||
Additions |
— | — | ||||||||||||||||||||||
Disposals |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Exchange differences |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Reclassifications to assets held for sale |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Other movements and reclassifications |
— | — | ( |
) | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2020 |
||||||||||||||||||||||||
Additions |
— | — | ||||||||||||||||||||||
Disposals |
— | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Exchange differences |
||||||||||||||||||||||||
Business combinations |
— | — | — | |||||||||||||||||||||
Disposition |
— | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Other movements and reclassifications |
— | — | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2021 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization at January 1, 2020 |
— |
— |
( |
) |
( |
) |
— |
( |
) | |||||||||||||||
Amortization |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Disposals |
— | — | — | — | ||||||||||||||||||||
Exchange differences |
— | — | — | |||||||||||||||||||||
Reclassifications to assets held for sale |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2020 |
— |
— |
( |
) |
( |
) |
— |
( |
) | |||||||||||||||
Amortization |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Disposals |
— | — | — | |||||||||||||||||||||
Impairment |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Exchange differences |
— | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Disposition |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2021 |
— |
— |
( |
) |
( |
) |
— |
( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount at: |
||||||||||||||||||||||||
January 1, 2020 |
||||||||||||||||||||||||
December 31, 2020 |
||||||||||||||||||||||||
December 31, 2021 |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Zegna |
||||||||
Thom Browne |
||||||||
|
|
|
|
|||||
Total goodwill |
• | Terminal value: determined using the perpetuity method at a long-term growth rate which represents the present value, at the last year of projection, of all expected future cash flows, and the growth rate used to calculate the terminal value was |
• | Discount rate: the rate used to discount cash flows was calculated using the weighted average cost of capital (WACC). For the year ended December 31, 2021, the WACC used for discounting purposes ranged between |
• | EBITDA: See table below for the EBITDA CAGR assumptions utilized to calculate the expected future cash flows. |
• | Discount rates |
• | Growth rates used to extrapolate cash flows beyond the forecast period |
• | EBITDA CAGR rate |
(Euro millions) |
Existing assumption |
Sensitivity effects on headroom |
||||||||||||||||||||||||||
Headroom |
Discount rate (bps) |
Growth rate (bps) |
EBITDA CAGR (%) vs. 2021 |
WACC +/-100 bps |
Growth rate +/- 50 bps |
EBITDA +/-500 bps |
||||||||||||||||||||||
Thom Browne Group |
+ |
% | / | / | / 6 | |||||||||||||||||||||||
Gruppo Dondi S.p.A. |
+ |
% | / | / | / | |||||||||||||||||||||||
Bonotto S.p.A. |
+ |
% | / | / | / | |||||||||||||||||||||||
In.Co. S.p.A. |
+ |
% | / | / | / | |||||||||||||||||||||||
Tessitura Ubertino S.r.l. |
+ |
% | / | / | / |
(Euro thousands) |
Land and buildings |
Plant and machinery |
Industrial and commercial equipment |
Leasehold improvements |
Other tangible assets |
Tangible assets under construction and advances |
Total |
|||||||||||||||||||||
Historical cost at January 1, 2020 |
||||||||||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||
Disposals |
— | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||
Exchange differences |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Reclassifications to assets held for sale |
— | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2020 |
||||||||||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Exchange differences |
||||||||||||||||||||||||||||
Disposition |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Business combinations |
— | — | ||||||||||||||||||||||||||
Reclassifications |
— | ( |
) | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2021 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation at January 1, 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
— |
( |
) | |||||||||||||||
Depreciation |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Impairment |
— | ( |
) | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||
Disposals |
— | — | ||||||||||||||||||||||||||
Exchange differences |
( |
) | ( |
) | — | |||||||||||||||||||||||
Reclassifications to assets held for sale |
— | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
— |
( |
) | |||||||||||||||
Depreciation |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Disposals |
— | — | ||||||||||||||||||||||||||
Impairment |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||||||||
Exchange differences |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||||
Disposition |
— | |||||||||||||||||||||||||||
Reclassifications |
( |
) | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2021 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount at: |
||||||||||||||||||||||||||||
January 1, 2020 |
||||||||||||||||||||||||||||
December 31, 2020 |
||||||||||||||||||||||||||||
December 31, 2021 |
• | Discount rates |
• | Growth rates used to extrapolate cash flows beyond the forecast period |
• | Revenue compounded annual rate of growth (“CAGR”), which has been assessed taking into consideration the effects of the COVID-19 pandemic on the 2021 performance of the Group. |
(Euro thousand) |
Existing assumption |
Sensitivity effects on impairment |
||||||||||||||||||||||||||
Impairment |
WACC (%) |
Growth rate (%) |
Revenues CAGR (%) vs. 2021 |
WACC +/-100 bps |
Growth rate +/-50 bps |
Revenues +/-250 bps |
||||||||||||||||||||||
Zegna Segment DOS |
( |
) | % | % | + |
% | ) / ( | ) | ( | ) / () | ( | ) / () | ||||||||||||||||
The following table details the sensitivity of the 2021 impairment testing to reasonably possible changes in assumptions previous detailed related to the Thom Browne Segment: |
| |||||||||||||||||||||||||||
(Euro thousand) |
Existing assumption |
Sensitivity effects on impairment |
||||||||||||||||||||||||||
Impairment |
WACC (%) |
Growth rate (%) |
Revenues CAGR (%) vs. 2021 |
WACC +/-100 bps |
Growth rate +/-50 bps |
Revenues +/-250 bps |
||||||||||||||||||||||
Thom Browne Segment DOS |
— | % | % | + |
% | ( | ) / -- / ( | ) | - / ( | ) |
• | Discount rates |
• | Growth rates used to extrapolate cash flows beyond the forecast period |
• | EBITDA growth rate over the explicit period of the business plan |
(Euro millions) |
Existing assumption |
Sensitivity effects on headroom |
||||||||||||||||||||||||||
Headroom |
Discount rate (bps) |
Growth rate (bps) |
EBITDA CAGR (%) vs 2021 |
WACC +/-100 bps |
Growth rate +/- 50 bps |
EBITDA +/-500 bps |
||||||||||||||||||||||
CGU Zegna Segment |
9 | 0 | + |
% | / | / |
/ |
|||||||||||||||||||||
CGU Thom Browne |
3 | 0 | + |
% | / |
/ |
/ |
(Euro thousands) |
Land and buildings |
Industrial and commercial equipment |
Plant and machinery |
Other tangible assets |
Total |
|||||||||||||||
Historical cost at January 1, 2020 |
||||||||||||||||||||
Additions |
— | |||||||||||||||||||
Disposals |
( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||
Exchange differences |
( |
) | — | — | ( |
) | ( |
) | ||||||||||||
Reclassifications to assets held for sale |
( |
) | — | — | ( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2020 |
||||||||||||||||||||
Additions |
||||||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Exchange differences |
— | — | ( |
) | ||||||||||||||||
Disposition |
( |
) | — | — | — | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2021 |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization at January 1, 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
Amortization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Impairments |
( |
) | — | — | — | ( |
) | |||||||||||||
Disposals |
— | |||||||||||||||||||
Exchange differences |
— | — | ||||||||||||||||||
Reclassifications to assets held for sale |
— | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2020 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
Amortization |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Impairments |
( |
) | — | — | — | ( |
) | |||||||||||||
Disposals |
||||||||||||||||||||
Exchange differences |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Disposition |
— | — | — | |||||||||||||||||
Reclassifications and other |
( |
) | — | — | — | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2021 |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount at: |
||||||||||||||||||||
January 1, 2020 |
||||||||||||||||||||
December 31, 2020 |
||||||||||||||||||||
December 31, 2021 |
(Euro thousands) |
Pelletteria Tizeta S.r.l. |
Tom Ford International LLC |
Achill Station Pty Ltd |
Filati Biagioli Modesto S.p.A. |
Total investments at equity method |
|||||||||||||||
At January 1, 2019 |
— | — | ||||||||||||||||||
Net income /(loss) |
( |
) | — | — | ( |
) | ||||||||||||||
Dividends |
( |
) | — | — | — | ( |
) | |||||||||||||
Translation differences |
— | ( |
) | — | — | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2019 |
— |
— | ||||||||||||||||||
Additions |
— | — | ||||||||||||||||||
Impairment |
— | ( |
) | — | — | ( |
) | |||||||||||||
Net income /(loss) |
( |
) | ( |
) | — | ( |
) | |||||||||||||
Dividends |
— | — | — | — | — | |||||||||||||||
Translation differences |
— | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2020 |
— | |||||||||||||||||||
Additions |
— | — | — | |||||||||||||||||
Disposition |
— | — | ( |
) | — | ( |
) | |||||||||||||
Net income /(loss) |
— | |||||||||||||||||||
Translation differences |
— | ( |
) | — | — | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2021 |
— |
(Euro thousands) |
Pelletteria Tizeta S.r.l. |
Tom Ford |
Filati Biagioli Modesto S.p.A. |
|||||||||
Total assets |
||||||||||||
Total liabilities |
||||||||||||
Total equity |
( |
) | ||||||||||
Net revenues |
||||||||||||
Net income/(loss) |
( |
) |
(Euro thousands) |
||||
Historical cost at December 31, 2019 |
||||
Exchange differences |
( |
) | ||
|
|
|||
Balance at December 31, 2020 |
||||
Additions |
||||
Exchange differences |
||||
Disposition |
( |
) | ||
|
|
|||
Balance at December 31, 2021 |
||||
|
|
|
|
|
Accumulated depreciation at December 31, 2019 |
( |
) | ||
Depreciation |
( |
) | ||
Exchange differences |
||||
|
|
|||
Balance at December 31, 2020 |
( |
) | ||
Depreciation |
( |
) | ||
Exchange differences |
( |
) | ||
Disposition |
||||
|
|
|||
Balance at December 31, 2021 |
||||
|
|
|
|
|
Carrying amount at: |
||||
December 31, 2019 |
||||
December 31, 2020 |
||||
December 31, 2021 |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Guarantee deposits |
||||||||
Investment held in Elah Dufour S.p.A. |
||||||||
Financial loans to related parties |
||||||||
Financial loans to Tom Ford |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total other non-current financial assets |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Raw materials, ancillary materials and consumables |
||||||||
Work-in-progress |
||||||||
Finished goods |
||||||||
|
|
|
|
|||||
Total inventories |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Trade receivables |
||||||||
Loss allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total trade receivables |
(Euro thousands) |
Loss allowance |
|||
At January 1, 2020 |
( |
) | ||
Provisions |
( |
) | ||
Utilizations |
||||
Exchange differences and other |
||||
|
|
|||
At December 31, 2020 |
( |
) | ||
Provisions |
( |
) | ||
Utilizations |
||||
Releases |
||||
Disposition |
||||
Exchange differences and other |
||||
|
|
|||
At December 31, 2021 |
( |
) |
(Euro thousands) |
For the years ended December 31, |
|||||||
2021 |
2020 |
|||||||
EMEA (1) |
||||||||
of which Italy |
||||||||
North America (2) |
||||||||
of which United States |
||||||||
Latin America (3) |
||||||||
APAC (4) |
||||||||
of which Greater China Region |
||||||||
|
|
|
|
|||||
Total trade receivables |
(1) |
EMEA includes Europe, the Middle East and Africa. |
(2) |
North America includes the United States of America and Canada. |
(3) |
Latin America includes Mexico, Brazil and other Central and South American countries. |
(4) |
APAC includes the Greater China Region, Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries. |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||
Notional Amount |
Positive Fair Value |
Negative Fair Value |
Notional Amount |
Positive Fair Value |
Negative Fair Value |
|||||||||||||||||||
Foreign currency exchange risk |
||||||||||||||||||||||||
Forward contracts |
( |
) | ( |
) | ||||||||||||||||||||
Deal-Contingent Option |
||||||||||||||||||||||||
Interest rate risk |
||||||||||||||||||||||||
Interest rate swaps |
( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total derivatives – Hedging |
( |
) |
( |
) | ||||||||||||||||||||
Elah Dufour Option |
( |
) | ||||||||||||||||||||||
Total trading derivatives |
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total derivatives instruments - Asset/(Liabilities) |
( |
) |
( |
) |
(Euro thousands) | For the years ended December 31, |
|||||||
2021 |
2020 |
|||||||
USD |
||||||||
CHF |
||||||||
CNY |
||||||||
GBP |
||||||||
HKD |
||||||||
JPY |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total notional amount |
(Euro thousands, except percentages) |
Notional amount at December 31, |
Fair value at December 31, |
||||||||||||||||||||||
Contract |
Maturity date |
Fixed interest rate |
2021 |
2020 |
2021 |
2020 |
||||||||||||||||||
IRS 1 |
% | ( |
) | |||||||||||||||||||||
IRS 2 |
% | ( |
) | ( |
) | |||||||||||||||||||
IRS 3 |
% | ( |
) | ( |
) | |||||||||||||||||||
IRS 4 |
% | ( |
) | ( |
) | |||||||||||||||||||
IRS 5 |
% | ( |
) | ( |
) | |||||||||||||||||||
IRS 6 |
% | ( |
) | ( |
) | |||||||||||||||||||
IRS 7 |
( |
%) | ( |
) | ||||||||||||||||||||
IRS 8 |
% | |||||||||||||||||||||||
IRS 9 |
% | ( |
) | ( |
) | |||||||||||||||||||
IRS 10 |
% | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
( |
) |
( |
) |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Securities |
||||||||
Guarantee deposits and others |
||||||||
|
|
|
|
|||||
Total other current financial assets |
At December 31, 2020 |
Investments |
Disposals |
Fair value adjustments |
Realized gains/(losses) |
Exchange rate gains/(losses) |
At December 31, 2021 |
||||||||||||||||||||||
(Euro thousands) | ||||||||||||||||||||||||||||
FVPL |
||||||||||||||||||||||||||||
Insurance contracts |
||||||||||||||||||||||||||||
Fixed income |
( |
) | ( |
) | ||||||||||||||||||||||||
Hedge funds |
( |
) | ||||||||||||||||||||||||||
Real estate funds |
( |
) | ||||||||||||||||||||||||||
Equity |
( |
) | ||||||||||||||||||||||||||
Private equity |
( |
) | ||||||||||||||||||||||||||
Private debt |
||||||||||||||||||||||||||||
Money market funds |
( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total FVPL |
( |
) |
||||||||||||||||||||||||||
FVOCI |
||||||||||||||||||||||||||||
Floating income |
( |
) | ||||||||||||||||||||||||||
Fixed income |
( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total FVOCI |
( |
) |
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total securities |
( |
) |
At December 31, 2019 |
Investments |
Disposals |
Fair value adjustments |
Realized gains/(losses) |
Exchange rate gains/(losses) |
At December 31, 2020 |
||||||||||||||||||||||
(Euro thousands) | ||||||||||||||||||||||||||||
FVPL |
||||||||||||||||||||||||||||
Insurance contracts |
( |
) | ||||||||||||||||||||||||||
Fixed income |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Hedge funds |
( |
) | ( |
) | ||||||||||||||||||||||||
Real estate funds |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Equity |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Money market funds |
( |
) | ||||||||||||||||||||||||||
Private equity |
( |
) | ( |
) | ||||||||||||||||||||||||
Private debt |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total FVPL |
( |
) |
( |
) |
||||||||||||||||||||||||
FVOCI |
||||||||||||||||||||||||||||
Floating income |
( |
) | ||||||||||||||||||||||||||
Fixed in c ome |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total FVOCI |
( |
) |
( |
) |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total securities |
( |
) |
( |
) |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Cash on hand |
||||||||
Bank balances |
||||||||
|
|
|
|
|||||
Total cash and cash equivalents |
(Euro thousands) |
At December 31, 2020 |
|||
Intangibles assets |
||||
Property plant and equipment |
||||
Right-of-use |
||||
Other non-current financial assets |
||||
Deferred tax assets |
||||
Inventories |
||||
Trade receivables |
||||
Tax receivables |
||||
Other financial assets |
||||
Other current assets |
||||
Cash and cash equivalents |
||||
|
|
|||
Total assets |
||||
Employee benefits |
||||
Deferred tax liabilities |
||||
Lease liabilities |
||||
Derivative financial instruments |
||||
Other current liabilities |
||||
Provision for risks and charges |
||||
Tax liabilities |
||||
Trade payables and customer advances |
||||
|
|
|||
Total liabilities |
||||
|
|
|||
Assets and liabilities held for sale |
||||
|
|
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Italian statutory reserve |
||||||||
Addition paid-in capital |
— | |||||||
Reserve for treasury shares |
( |
) | ( |
) | ||||
Other comprehensive income reserve (OCI) |
( |
) | ( |
) | ||||
Share-based payments reserve |
— | |||||||
Non-controlling interests options reserve |
( |
) | ( |
) | ||||
Other reserves |
( |
) | ||||||
|
|
|
|
|||||
Other reserves, including OCI |
( |
) |
• | a translation reserve for the translation differences arising from the consolidation of subsidiaries with a functional currency different from the Euro; |
• | a cash flow hedge reserve for the changes in the fair value of derivative financial instruments held by the Group designated as a hedge of the exposure to variability in currency exchange rate and interest rate risk; |
• | gains and losses on the remeasurement of defined benefit plans for actuarial gains and losses arising during the period which are offset against the related net defined benefit liabilities; |
• | the financial assets at FVOCI reserve which arises from changes in the fair value of debt instruments held by the company under a hold to collect and sell business model, which will be reversed when the investment is derecognized or impaired. |
(Euro thousands) |
||||
Escrow Shares |
||||
PSUs 2022, 2023 and 2024 |
||||
CEO Stock Options |
||||
Remuneration in shares |
||||
CEO IPO LTI |
||||
Management IPO LTI |
||||
Management Stock Options |
||||
Cash-settled share based payments |
||||
|
|
|||
Total share-based payments |
At and for the year ended December 31, 2021 |
||||||||||||||||||||||||||||||||
(Functional currency thousands) |
Group’s percentage interest |
Non- controlling interest percentage |
Functional currency |
Total assets |
Total equity |
Net revenues |
Net income / (loss) |
Dividends paid to non- controlling shareholders |
||||||||||||||||||||||||
Company |
||||||||||||||||||||||||||||||||
% |
% |
|||||||||||||||||||||||||||||||
% |
% |
( |
) |
( |
) |
|||||||||||||||||||||||||||
% |
% |
( |
) |
|||||||||||||||||||||||||||||
% |
% |
( |
) | |||||||||||||||||||||||||||||
% |
% |
( |
) |
|||||||||||||||||||||||||||||
% |
% |
|||||||||||||||||||||||||||||||
% |
% |
|||||||||||||||||||||||||||||||
% |
% |
( |
) |
|||||||||||||||||||||||||||||
% |
% |
|||||||||||||||||||||||||||||||
% |
% |
At and for the year ended December 31, 2020 |
||||||||||||||||||||||||||||||||
(Functional currency thousands) |
Group’s percentage interest |
Non- controlling interest percentage |
Functional currency |
Total assets |
Total equity |
Net revenues |
Net income / (loss) |
Dividends paid to non- controlling shareholders |
||||||||||||||||||||||||
Company |
||||||||||||||||||||||||||||||||
% | % | |||||||||||||||||||||||||||||||
% | % | ( |
) | |||||||||||||||||||||||||||||
% | % | ( |
) | ( |
) | |||||||||||||||||||||||||||
% | % | ( |
) | |||||||||||||||||||||||||||||
% | % | ( |
) | ( |
) | |||||||||||||||||||||||||||
% | % | ( |
) | |||||||||||||||||||||||||||||
% | % | ( |
) | ( |
) | |||||||||||||||||||||||||||
% | % | ( |
) | ( |
) | |||||||||||||||||||||||||||
% | % | n.a. | n.a. |
(Euro thousands) |
2021 |
2020 |
||||||||||||||||||||||
Committed Loans |
Other financial loans |
Total borrowings |
Committed Loans |
Other financial loans |
Total borrowings |
|||||||||||||||||||
At January 1, |
||||||||||||||||||||||||
Repayments |
( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | |||||||||||||
Proceeds |
||||||||||||||||||||||||
Other |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
At December 31, |
||||||||||||||||||||||||
Of which: |
||||||||||||||||||||||||
Non-current |
||||||||||||||||||||||||
Current |
(Euro thousands) |
At December 31, 2021 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 and beyond |
||||||||||||||||||
Committed loans |
||||||||||||||||||||||||
Other financial liabilities |
— |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total borrowings |
(Euro thousands) |
At December 31, 2020 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 and beyond |
||||||||||||||||||
Committed loans |
||||||||||||||||||||||||
Other financial liabilities |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total borrowings |
At December 31, 2021 |
||||||||||||||||
Borrower |
Interest rate |
Terms |
Expiry date |
of which current portion |
of which non-current portion |
|||||||||||
(Euro thousands) |
||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
|
|
— | ||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
— | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
||||||||||||||||
of which fixed |
||||||||||||||||
of which variable |
At December 31, 2020 |
||||||||||||||
Borrower |
Interest rate |
Terms |
Expiry date |
of which current portion |
of which non-current portion |
|||||||||
(Euro thousands) |
||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
— | ||||||||||||||
|
|
|
|
|||||||||||
Total |
||||||||||||||
|
|
|||||||||||||
of which fixed |
||||||||||||||
of which variable |
34. |
Other current and non-current financial liabilities |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Written put options on non-controlling interests |
||||||||
Cash-settled share-based payments |
||||||||
Bonds |
||||||||
Other |
||||||||
|
|
|
|
|||||
Other non-current financial liabilities |
||||||||
|
|
|
|
|||||
Warrant liabilities |
||||||||
|
|
|
|
|||||
Other current financial liabilities |
||||||||
|
|
|
|
|||||
Total |
• | at a price of USD |
• | at a price of USD |
35. |
Lease liabilities |
(Euro thousands) |
2021 |
2020 |
||||||
At January 1, |
||||||||
Interest expense |
||||||||
Repayment of lease liabilities (including interest expense) |
( |
) | ( |
) | ||||
IFRS 16 lease amendment: lease renegotiation |
( |
) | ( |
) | ||||
Additions due to new leases and store renewals |
||||||||
Decrease of lease liabilities due to store closures |
( |
) | ( |
) | ||||
Reclassifications to liabilities held for sale |
— | ( |
) | |||||
Disposition |
( |
) | — | |||||
Translation differences |
( |
) | ||||||
|
|
|
|
|||||
At December 31, |
||||||||
Of which: |
||||||||
Non-current |
||||||||
Current |
(Euro thousands) |
At December 31, |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Beyond |
||||||||||||||||||
2021 |
||||||||||||||||||||||||
2020 |
36. |
Provisions for risks and charges |
(Euro thousands) |
Legal and fiscal risks |
Leased store restoration |
Refund liability returns |
Other provision |
Total provisions |
|||||||||||||||
At January 1, 2020 |
||||||||||||||||||||
Of which current |
— |
— |
||||||||||||||||||
Of which non-current |
— |
|||||||||||||||||||
Provisions |
||||||||||||||||||||
Releases |
( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||
Utilizations |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2020 |
||||||||||||||||||||
Of which current |
— |
— |
||||||||||||||||||
Of which non-current |
— |
|||||||||||||||||||
Provisions |
||||||||||||||||||||
Releases |
( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||
Utilizations |
( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||
Exchange differences |
( |
) | — | |||||||||||||||||
Reclassifications and other |
— | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
At December 31, 2021 |
||||||||||||||||||||
Of which current |
— |
|||||||||||||||||||
Of which non-current |
— |
37. |
Employee benefits |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Italian leaving indemnities (TFR) |
||||||||
Other leaving indemnities |
||||||||
Post-employment benefits |
||||||||
Other long-term employee benefits |
||||||||
Termination benefits |
||||||||
Total defined benefit obligations |
||||||||
Other long-term payables to employees |
||||||||
|
|
|
|
|||||
Total employee benefits |
(Euro thousands) |
2021 |
2020 |
||||||
At January 1, |
||||||||
Changes through statement of profit and loss |
||||||||
- of which: Service cost |
||||||||
- of which: Financial charges |
||||||||
Changes through statement of comprehensive income |
( |
) | ||||||
- of which: Actuarial loss/(gain) |
( |
) | ||||||
- of which: Translation differences |
( |
) | ||||||
Benefits paid |
( |
) | ( |
) | ||||
Change in scope of consolidation and reclassifications to assets held for sale |
( |
) | ||||||
|
|
|
|
|||||
At December 31, |
At December 31, 2021 |
At December 31, 2020 | |||||||||||
Italy |
Spain |
China |
Italy |
Spain |
China | |||||||
Discount rate |
- |
- |
||||||||||
Inflation rate |
||||||||||||
Salary increase rate |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||||||||||
+ |
- |
+50 bps |
-50 bps |
+ |
- |
+50 bps |
-50 bps |
|||||||||||||||||||||||||
Employee benefit obligations |
Service costs |
Employee benefit obligations |
Service costs |
|||||||||||||||||||||||||||||
Discount rate |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Inflation rate |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Turn-over rate |
( |
) | ( |
) | ( |
) | ( |
) |
38. |
Trade payables and customer advances |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Trade payables |
||||||||
Customer advances |
||||||||
|
|
|
|
|||||
Total trade payables including customer advances |
39. |
Other current liabilities |
(Euro thousands) |
At December 31, |
|||||||
2021 |
2020 |
|||||||
Due to employees |
||||||||
VAT and other taxes |
||||||||
Accrued expenses |
||||||||
Social security institutions |
||||||||
Deferred income |
||||||||
Other current liabilities |
— | |||||||
|
|
|
|
|||||
Total other current liabilities |
40. |
Fair value measurement |
(Euro thousands) |
At December 31, 2021 |
|||||||||||||||||||||||||||||||
Financial assets |
Fair value Level |
|||||||||||||||||||||||||||||||
FVPL |
FVOCI |
Amortized cost |
Total |
Note |
1 |
2 |
3 |
|||||||||||||||||||||||||
Derivative financial instruments |
26 | |||||||||||||||||||||||||||||||
Cash and cash equivalents |
29 | |||||||||||||||||||||||||||||||
Trade receivables |
25 | |||||||||||||||||||||||||||||||
Other non-current financial assets |
23 | |||||||||||||||||||||||||||||||
Other current financial assets (*) |
27 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Financial assets |
(*) | The following table provides an additional breakdown for other current financial assets at December 31, 2021: |
(Euro thousands) |
At December 31, 2021 |
|||||||||||||||||||||||||||
Financial assets |
Fair value Level |
|||||||||||||||||||||||||||
FVPL |
FVOCI |
Amortized cost |
Total |
1 |
2 |
3 |
||||||||||||||||||||||
Insurance contracts |
||||||||||||||||||||||||||||
Fixed income |
||||||||||||||||||||||||||||
Hedge funds |
||||||||||||||||||||||||||||
Real estate funds |
||||||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||
Money market funds and floating income |
||||||||||||||||||||||||||||
Private equity |
||||||||||||||||||||||||||||
Private debt |
||||||||||||||||||||||||||||
Guarantee deposits and others |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total other current financial assets |
(Euro thousands) |
Fair value Level 3 |
|||
At December 31, 2020 |
||||
|
|
|||
Investments |
||||
Disposals |
( |
) | ||
Fair value adjustments |
||||
Realized gains |
||||
Exchange rate gains |
||||
At December 31, 2021 |
||||
|
|
(Euro thousands) |
At December 31, 2020 |
|||||||||||||||||||||||||||||||
Financial assets |
Fair value Level |
|||||||||||||||||||||||||||||||
FVPL |
FVOCI |
Amortized cost |
Total |
Note |
1 |
2 |
3 |
|||||||||||||||||||||||||
Derivative financial instruments |
26 | |||||||||||||||||||||||||||||||
Cash and cash equivalents |
29 | |||||||||||||||||||||||||||||||
Trade receivables |
25 | |||||||||||||||||||||||||||||||
Other non-current financial assets |
23 | |||||||||||||||||||||||||||||||
Other current financial assets (*) |
27 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Financial assets |
(*) | The following table provides an additional breakdown for other current financial assets at December 31, 2020: |
(Euro thousands) |
At December 31, 2020 |
|||||||||||||||||||||||||||
Financial assets |
Fair value Level |
|||||||||||||||||||||||||||
FVPL |
FVOCI |
Amortized cost |
Total |
1 |
2 |
3 |
||||||||||||||||||||||
Insurance contracts |
||||||||||||||||||||||||||||
Fixed income |
||||||||||||||||||||||||||||
Money market funds and floating income |
||||||||||||||||||||||||||||
Hedge funds |
||||||||||||||||||||||||||||
Real estate funds |
||||||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||
Private equity |
||||||||||||||||||||||||||||
Private debt |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total other current financial assets |
(Euro thousands) |
At December 31, 2021 |
|||||||||||||||||||||||||||||||
Financial liabilities |
Fair value Level |
|||||||||||||||||||||||||||||||
FVPL |
FVOCI |
Amortized cost |
Total |
Note |
1 |
2 |
3 |
|||||||||||||||||||||||||
Derivative financial instruments |
26 | |||||||||||||||||||||||||||||||
Non-current borrowings |
33 | |||||||||||||||||||||||||||||||
Current borrowings |
33 | |||||||||||||||||||||||||||||||
Other non-current financial liabilities |
34 | |||||||||||||||||||||||||||||||
Other current financial liabilities |
35 | |||||||||||||||||||||||||||||||
Trade payables and customer advances |
38 | |||||||||||||||||||||||||||||||
Lease liabilities – Current / Non-current |
35 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Financial liabilities |
(Euro thousands) |
At December 31, 2020 |
|||||||||||||||||||||||||||||||
Financial liabilities |
Fair value Level |
|||||||||||||||||||||||||||||||
FVPL |
FVOCI |
Amortized cost |
Total |
Note |
1 |
2 |
3 |
|||||||||||||||||||||||||
Derivative financial instruments |
26 |
|||||||||||||||||||||||||||||||
Non-current borrowings |
33 |
|||||||||||||||||||||||||||||||
Current borrowings |
33 |
|||||||||||||||||||||||||||||||
Other non-current financial liabilities |
34 |
|||||||||||||||||||||||||||||||
Trade payables and customer advances |
38 |
|||||||||||||||||||||||||||||||
Lease liabilities – Current / Non-current |
35 |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Financial liabilities |
41. |
Qualitative and quantitative information on financial risks |
• | financial market risk (principally relating to foreign currency exchange rates, interest rates and commodity prices; |
• | liquidity risk relating to the availability of funds and access to credit, if required, and to financial instruments in general; |
• | credit risk relating to counterparties failing to repay amounts owed or meet contractual obligations. |
(Euro thousands) |
Not yet due |
0-90 days overdue |
90-180 days overdue |
>180 days overdue |
Total |
|||||||||||||||
Trade receivables, gross |
||||||||||||||||||||
Loss allowance |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total trade receivables at December 31, 2021 |
||||||||||||||||||||
Trade receivables, gross |
||||||||||||||||||||
Loss allowance |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total trade receivables at December 31, 2020 |
(Euro thousands) |
Contractual cash flows |
|||||||||||||||||||
Carrying amount at December 31, 2021 |
Within 1 year |
Within 2 Years |
Within 3 years |
Beyond |
||||||||||||||||
Derivative financial instruments |
||||||||||||||||||||
Trade payables and customer advances |
||||||||||||||||||||
Borrowings |
||||||||||||||||||||
Lease liabilities |
||||||||||||||||||||
Other current and non-current financial liabilities |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
(Euro thousands) |
Contractual cash flows |
|||||||||||||||||||||
Carrying amount at December 31, 2020 |
Within 1 year |
Within 2 Years |
Within 3 years |
Beyond |
||||||||||||||||||
Derivative financial instruments |
— |
|||||||||||||||||||||
Trade payables and customer advances |
— |
|||||||||||||||||||||
Borrowings |
||||||||||||||||||||||
Lease liabilities |
||||||||||||||||||||||
Other non-current financial liabilities |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||
Trade receivables and trade payables in functional currency |
+500 bps |
-500 bps |
Trade receivables and trade payables in functional currency |
+500 bps |
-500 bps |
|||||||||||||||||||
Currency |
Impact on profit before tax |
Impact on profit before tax |
||||||||||||||||||||||
USD |
( |
) | ( |
) | ||||||||||||||||||||
JPY |
( |
) | ( |
) | ||||||||||||||||||||
CNY |
( |
) | ( |
) | ||||||||||||||||||||
HKD |
( |
) | ( |
) | ||||||||||||||||||||
GBP |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
SGD |
( |
) | ( |
) | ||||||||||||||||||||
CHF |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
( |
) |
( |
) |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||
Notional amount |
+500 bps |
-500 bps |
Notional amount |
+500 bps |
-500 bps |
|||||||||||||||||||
Currency |
Impact on profit before tax |
Impact on profit before tax |
||||||||||||||||||||||
USD |
( |
) | ( |
) | ||||||||||||||||||||
JPY |
( |
) | ( |
) | ||||||||||||||||||||
CNY |
( |
) | ( |
) | ||||||||||||||||||||
GBP |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
HKD |
( |
) | ( |
) | ||||||||||||||||||||
CHF |
( |
) | ||||||||||||||||||||||
SGD |
( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
( |
) |
( |
) |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||
Notional amount |
+500 bps |
-500 bps |
Notional amount |
+500 bps |
-500 bps |
|||||||||||||||||||
Currency |
Impact on hedge reserve |
Impact on hedge reserve |
||||||||||||||||||||||
USD |
( |
) |
( |
) | ||||||||||||||||||||
CHF |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
JPY |
( |
) |
( |
) | ||||||||||||||||||||
HKD |
( |
) |
( |
) | ||||||||||||||||||||
GBP |
( |
) |
( |
) | ||||||||||||||||||||
CNY |
( |
) |
||||||||||||||||||||||
SGD |
( |
) |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
( |
) |
( |
) |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||
Notional amount |
+500 bps |
-500 bps |
Notional amount |
+500 bps |
-500 bps |
|||||||||||||||||||
Currency |
Impact on profit before tax |
Impact on profit before tax |
||||||||||||||||||||||
USD |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
( |
) |
( |
) |
( |
) |
( |
) |
(Euro thousands, except percentages) |
||||||||||||||||||||||||||
At December 31, 2021 |
||||||||||||||||||||||||||
Amount |
Total interest rate (*) |
Interest expense |
-20% |
Impact on profit before tax |
+20% |
Impact on profit before tax |
||||||||||||||||||||
10,000 | % | % | % | |||||||||||||||||||||||
15,000 | % | % | % | |||||||||||||||||||||||
18,750 | % | % | % | |||||||||||||||||||||||
50,000 | % | % | % | |||||||||||||||||||||||
10,000 | % | % | % | |||||||||||||||||||||||
45,000 | % | % | % | |||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||
148,750 |
* |
The overall rate indicated is compounded of the fixed spread plus the variable rate (+-20% is on the variable rate). |
(Euro thousands, except percentages) |
||||||||||||||||||||||||||
At December 31, 2020 |
||||||||||||||||||||||||||
Amount |
Total interest rate (*) |
Interest expense |
-20% |
Impact on profit before tax |
+20% |
Impact on profit before tax |
||||||||||||||||||||
Non-current |
||||||||||||||||||||||||||
80,000 | % | % | % | |||||||||||||||||||||||
10,000 | % | % | % | |||||||||||||||||||||||
45,000 | % | % | % | |||||||||||||||||||||||
31,250 | % | % | % | |||||||||||||||||||||||
10,000 | % | % | % | |||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
176,250 |
||||||||||||||||||||||||||
Current |
||||||||||||||||||||||||||
17,500 | % | % | % | |||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
17,500 |
* |
The overall rate indicated is compounded of the fixed spread plus the variable rate (+-20% is on the variable rate). |
42. |
Related party transactions |
• |
Transactions with Tom Ford related to (i) a licensing agreement for the production and worldwide distribution of luxury men’s ready to wear and made to measure clothing, footwear and accessories under the Tom Ford label, (ii) financial assets related to loans to Tom Ford, and (iii) financial guarantees provided to Tom Ford in relation to its payment obligations under a bank loan for an amount of $ |
• |
The purchase of raw materials, in particular carded yarns from Filati Biagioli Modesto |
• |
The purchase of raw materials, in particular of wool, from Gruppo Schneider S.p.A. |
• |
The purchase of industrial services, in particular of fabrics’ finishing, from Finissaggio e Tintoria Ferraris S.p.A. |
• |
The purchase of industrial services from Pettinatura di Verrone S.r.l. |
• |
Transactions with PKB Privatbank AG relating to an interest-bearing loan amounting to Euro |
• |
The Disposition of certain of its businesses, through the statutory demerger under Italian law to a new company owned by its existing shareholders. The Disposition included, inter alia, Zegna’s real estate business, consisting of Zegna’s former subsidiary EZ Real Estate, which directly and indirectly holds substantially all of the real estate assets formerly owned by the Zegna group, as well as certain properties previously owned by Lanificio. Most of the real estate properties directly or indirectly owned by EZ Real Estate were, and continue to be, leased to Zegna also following the Disposition. Zegna pays rent to EZ Real Estate or its subsidiaries under lease agreements. In addition, following the Disposition, Zegna has entered into arrangements whereby Oasi Zegna provides licensing, marketing and other sustainability-related services to Zegna. |
• |
As part of the Disposition, on January 14, 2021, the Group sold |
• |
Following the Disposition, the payment of rent to EZ Real Estate or its subsidiaries under lease agreements for the use of properties. |
• |
Support to the activities of Fondazione Zegna, a charitable organization which provides an opportunity for charitable work on the part of the Zegna family and Group employees. Fondazione Zegna supports and funds projects in cooperation with non-profit organizations operating in various fields and different parts of the world. |
• |
Put contracts entered into as part of the Group’s investments in Thom Browne and Lanificio whereby the Group has been required to, and may in the future be required to, purchase all or a portion of the remaining non-controlling interests in Thom Browne and Lanificio. For additional information relating to the put contracts please refer to Note 34 - Other current and non-current financial liabilities . |
• |
The repurchase by Zegna of |
• |
The issuance of Zegna ordinary shares to the PIPE Investors, which include certain of Zegna’s related parties (including certain directors and officers and affiliates of Monterubello), in exchange for cash consideration. |
• |
The reimbursement to Zegna by Monterubello of a special gift to all employees of the Group for an amount of Euro |
• |
The issuance of non-executive directors, for which the Group recognized personnel costs of Euro |
• |
The grant of equity-settled share-based payments to key management, as further described below. |
(Euro thousands) |
For the year ended December 31, |
|||||||||||||||||||||||||||||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
Costs (1) (2) |
Personnel costs |
Write down and other provisions (3) |
Financial income (expenses) |
Revenues |
Costs (1) (2) |
Personnel costs |
Financial income (expenses) |
Revenues |
Costs (1) (2) |
Personnel costs |
Financial income (expenses) |
||||||||||||||||||||||||||||||||||||||||
Associates |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Tom Ford |
— | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Filati Biagioli Modesto S.p.A. |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Pelletteria Tizeta S.r.l. |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total associates |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||||||
Companies controlled by Monterubello or its shareholders, Zegna directors or senior management |
||||||||||||||||||||||||||||||||||||||||||||||||||||
G. Schneider S.p.A. |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Agnona S.r.l. |
( |
) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Disposition entities (4) |
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other companies controlled by Monterubello or its shareholders, Zegna directors or senior management (5) |
— | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total companies controlled by Monterubello or its shareholders, Zegna directors or senior management |
— |
( |
) |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||||||||||||||||||
Other related parties connected to directors and shareholders |
— |
— |
— |
( |
) |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total transactions with related parties |
( |
) |
||||||||||||||||||||||||||||||||||||||||||||||||||
Total for Zegna Group |
( |
) |
( |
) |
(1) |
Costs with Tom Ford include royalties amounting to Euro |
(2) |
Includes cost for raw materials and consumables, purchased, outsourced and other costs. |
(3) |
Includes Euro was required to compensate the company in accordance with the terms of the related sale agreement, as well as Euro |
(4) |
Disposition entities includes Alan Real Estate S.A., EZ Real Estate S.r.l and 61 West 23rd Street LLC |
(5) |
Includes transactions with Fondazione Zegna, Finissaggio e Tintoria Ferraris S.p.A., PKB Privatbank AG and Pettinatura di Verrone S.r.l. |
(Euro thousands) |
At December 31, 2021 |
At December 31, 2020 |
||||||||||||||||||||||||||||||||||
Trade receivables |
Other financial assets |
Other current assets (1) |
Financial liabilities (2) |
Other liabilities (3) |
Trade receivables |
Other financial assets |
Financial liabilities (2) |
Other liabilities (3) |
||||||||||||||||||||||||||||
Associates |
||||||||||||||||||||||||||||||||||||
Tom Ford |
— | — | — | |||||||||||||||||||||||||||||||||
Filati Biagioli Modesto S.p.A. |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total associates |
— |
— |
— |
|||||||||||||||||||||||||||||||||
Monterubello and companies controlled by Monterubello or its shareholders, Zegna directors or senior management |
||||||||||||||||||||||||||||||||||||
Monterubello |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
G. Schneider S.p.A. |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Agnona S.r.l. |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
PKB Privatbank AG |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Disposition entities (4) |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other companies controlled by Monterubello or its shareholders, Zegna directors or senior management (5) |
— | — | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total Monterubello and companies controlled by Monterubello or its shareholders, Zegna directors or senior management |
— |
|||||||||||||||||||||||||||||||||||
Other related parties connected to directors and shareholders |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total originating from related parties |
||||||||||||||||||||||||||||||||||||
Total for Zegna Group |
(1) |
On December 20, 2021, the Group announced that the Zegna family decided to grant |
(2) |
Includes non-current borrowings at December 31, 2021 and non-current borrowings and other non-current financial liabilities at December 31, 2020. |
(3) |
Includes trade payables and customer advances, employee benefits and other current liabilities. |
(4) |
Disposition entities includes Alan Real Estate S.A., EZ Real Estate S.r.l and 61 West 23rd Street LLC |
(5) |
Includes transactions with Finissaggio e Tintoria Ferraris S.p.A., Achill Station Pty Ltd., and Pettinatura di Verrone S.r.l. |
(Euro thousands) |
Key Management Personnel |
Outstanding Balance |
||||||||||||||||||||||||||||||||||||||
Short-term employee benefits (1) |
Post- employment benefits |
Other long- term benefits |
Share-based payments |
Dividends |
Purchase of investments (2) |
Employee benefits |
Other non- current financial liabilities(3) |
Other current liabilities |
Non-current financial assets |
|||||||||||||||||||||||||||||||
2021 |
||||||||||||||||||||||||||||||||||||||||
2020 |
( |
) | ||||||||||||||||||||||||||||||||||||||
2019 |
(1) |
Includes corporate bodies fees, consultancy fees and personnel compensation. |
(2) |
Relates to the acquisition of Thom Browne. |
(3) |
Primarily relates to liabilities on put contracts entered into as part of the Group’s investments in Thom Browne and Lanificio. |
a. | |
b. | The right to buy a maximum number of |
a. | Up to a maximum of PSUs |
b. | The right to buy a maximum number of CEO Stock Options |
c. | The right to convert all or part of the CEO’s fixed remuneration in the Company’s shares (“ Remuneration in shares |
d. | CEO IPO LTI |
• | |
• | |
• | |
• | |
43. |
Notes to consolidated cash flow statement |
44. |
Subsequent events |