Ermenegildo Zegna N.V. Ordinary Shares

Hello everyone and thank you for standing by. The Managerial Dozania Group Q3 2025 Revenues Call will be beginning in just a few minutes time. We thank you for your patience and we will begin shortly. Good afternoon, good morning, everyone. Thank you for joining the Amena Gildo Xenia Group Q3 2025 Revenues Call. Please note that today's material and presentation are available under the xeniagroup.com website. Joining us today, the Xenia Group Senior Management Team, including Gianluca Tagliabue, Group CFO and COO, and Paola Durante, Chief of External Relations. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. the group actual results may be materially different from those expressed or implied by these forward-looking statements. Also, these statements are subject to a number of risks and uncertainties, including those described in our SEC filings. Please refer to the forward-looking statements cautionary statement included at page two of today's presentation. I'll now hand over to Paola Durante.

Thank you, thank you operator and good morning also from myself and good afternoon to everybody. Welcome to our group. Q3 and nine months 2025 revenues call. As usual, for Q1 and Q3 revenues, today's call is led by Gianluca Tagliabue and myself. Alice Poggioli is absolutely here with us. Our CEO, Mr. Gildo, will attend the February call on full year 2025 revenue. Let's then move to page seven of the presentation. where we comment revenue trends. You know that to comment revenue trends, we want to focus on organic performance, which excludes foreign exchange impacts, and therefore it is better to reflect the underlying business dynamics. This approach actually is particularly relevant this year, given the sharp appreciation of the euro against the key currencies, such as the US dollar and the Chinese renminbi, among the others. And I have to say even more in this quarter and the next one. In Q3 2025, our group reported €398 million in revenues, up 4% organic, with a sequential acceleration of the DTC channel, which was up 9% in the quarter, with, I have to say, remarkable results across the three brands. Nine months revenues were €1.3 billion. Let's then move to page 8 and let's go directly to comment on the performance by brand. In Q3, Zegna Brand recorded revenues of 249 million euro with a 6% growth. This performance was led by a solid performance in the DTC channel, particularly in EMEA and Americas. Tom Brown revenues of 48 million euros in Q3. The brand, although remaining slightly negative in the quarter, showed a sequential improvement in both channels. Anthem for Fashion, which reported 66 million euros in revenues, was up 4% organic, which was driven by the DTC channel, also supported by the good reception of the Fall-Winter 25 show collection. Last, Textile was flat in the quarter, while other revenues that you know are today a marginal part of our business and relates to the finished product ready-to-wear garments that we produce for third party brands reported a 12% growth. Moving now to page 9 and commenting the by geographic area revenues. Starting from EMEA, represented in the first nine months, 36% of the group total revenue. It's the first region of our group. Revenues in the quarter were up 3%, thanks to a very solid performance in the DTC channel, particularly at Zegna Tonfo Fashion, which was partially obsessed by the negative contribution of the wholesale. America's second region, contributing to 29% of the nine-month revenue, recorded in the quarter a 13% growth, driven by the solid DTC performance across the three brands. And with the US as the market, which is also the largest market, leading the performance. But let me say that also LATAM, even if still a relatively small contributor to the region, continued to show robust double-digit growth. Commenting on cluster, I know that this is a question you normally ask after. Considering Zegna brand US customers cluster continue to grow sound double digit. So the Zegna US customers were growing both domestically and abroad. Moving to the Greater China region, which in the first nine months accounted for 23% of total revenues. In the quarter, revenues were down 7%, showing a sequential improvement across the three brands, with Tom Brown leading the trends. Finally, on the rest of APAC, 12% of nine-month revenues, the quarter showed a 3% growth driven by strong performances recorded in Singapore, of course, of a smaller basis, but nice Performance and some improvements in mainly in Korea. Page 10. I won't really go much in details because as as you know, I prefer to comment. We prefer to comment on the bright brand by channel performance. Only two numbers I would like to highlight. The first one is the 9% DTC growth in the quarter and the second one that DTC in the first nine months accounted at the group level for 82% of our revenues. So let's then move to page 11, Xenia, commenting on Xenia. third quarter xenia dpc revenues grew seven percent um equal to 87 percent of the brand's nine months revenues this seven percent growth in the quarter was led by america a a solid double digit growth in emea and americas the greater china region revenues trend remained negative but showed some signs of improvement compared to the second quarter You know, so thanks to a easier or slightly easier base of comparison in in this quarter. The performance in the region remains volatile. I have to say remains volatile and still difficult to read, but commenting on the cluster. The the the cluster improved in the quarter sequentially, and was a negative high single digit compared to the double digit we reported, you remember, previously. In Zegna, in the third quarter, closed a fourth store, and these were mainly actually in GCR. Briefly on the wholesale performance for Zegna, revenues were down 3% or 11% in the nine months. I ask you, in particular for the wholesale performance, to consider or to look more into the year-to-date, in this case the nine-month performance, which better reflects the underlying business. Sometimes quarterly performance can be affected by different timing of deliveries. In particular for Zegna also for the drop strategy that as you know can cause different deliveries to our wholesale customers. For year end we confirm the indication for Zegna of an wholesale down in the mid teens because as we commented already, Several times we are increasing control in the distribution of iconic products, and we also did some conversion of wholesale point of sales in retail concessions. OK, now page 12 Tom Brown. Tom Brown BTC revenues were up 10% in the third quarter, showing a sequential acceleration which was driven by the American region, because of the new openings, as well as this some sequential improvement in GCR and rest of APAC. Thom Browne opened four doors in the quarter, including an important concession at Selfridges Women in London and Kyoto Isetan. The wholesale, in line with expectation, was down 37% in the quarter and 50% in the first nine months. Let's then move to Tom Ford Fashion. I would say, I can say last but not least, page 13. Tom Ford Fashion reported in the third quarter a 16% growth in the DTC channels, which has been driven by the successful reception of the Fall-Winter 25 collection in stores across all regions and also by some new store openings. Of course, Also, the work that has been done in this month in terms of people and training and talent in stores is also bearing some results. But we know that we are just at the beginning of the journey to strengthen the brand in the fashion business, in particularly in the DTC important channel. The path ahead of us is clear, is defined. we need to follow it step by step and we just start doing the first step into it. That said, we are absolutely encouraged by the client's positive feedback on the collection. Tom Ford Fashion didn't open any store in the quarter and the wholesale was down 19%, 10% in the first nine months. Again, some timing differences we confirm here by year end and wholesale performance negative in the region of 10%. I finished my comment showing on page 14 the nice facade of the very beautiful Zegna store in the Miami Design District. Miami, you know, is a vibrant city, not only in the US, and in December Zegna will host an event during the Art Basel Miami. As you know, art has always been part of Zegna identity and legacy since our founder, Ermenegildo Zegna. Early this year, we signed a multi-year partnership with Art Basel, which offers a global platform to celebrate art that resonates with Zegna customers and Zegna values. So in early December we will have this nice event with our customers in Miami. And on page 15, moving to page 15, you find just our store network. No comments to be made here. You just need to see the numbers, I think. And before leaving the floor to Gianluca, on page 16, we have published the financial calendar for 2026. You can find it here in our press release and also on our website. Please mark your agenda for next year. And with this, I now hand over to Gianluca for some final remarks before your Q&A.

Thank you, Paola. So before adding to the Q&A session, I would like to share a few final remarks. let me begin by highlighting the exceptional fashion shows presented by both tom ford fashion and tom brown in paris in this october both received enthusiastic recognition from the press and from our clients reflecting continued progress along the past set for this brand talking about tom ford fashion in particular as paula noted the first eider ackerman collection for winter 25 arrived in the store at end of August and was well received and contributed to our quarterly results. Of course, these are early signs and while we are pleased to see such a positive start, we are aware that the journey to fully unlock Tom Ford fashion potential is still ahead of us and that it might not be a straight line. We must continue anyway building this momentum. On Thom Browne, let me highlight the recent events also held to celebrate the opening of the Ginza store in Tokyo. The brand hosted a series of curated experiences from a screening of the Thom Browne documentary presented by GQ Japan to a cocktail party, an intimate dinner with celebrities and friends of the brand, and the presence of Thom himself. These moments reflect the brand's emotional connection with its audience. We'll see more of this unfolding on Thom Browne's social media channels in the coming weeks. Finally, turning to Zegna, we have already touched on the success of Drop 2, which saw an activation on September 1st and was launched alongside the campaign It's Not a Suit, It's a Zegna. With this collection, Zegna celebrated its heritage and the ongoing pursuit of excellence and innovation embodied by bellozare, the finest wool. Bellozare means golden fleece. The Zegna Torino suit draws directly from our founder's personal wardrobe, recalling the days he would drive to his Torinese tailor to craft suits with a unique, defined, and unmistakable style. Rooted in heritage, yet forward-looking, the Torino style bridges the past and the future. This campaign reaffirmed Zegna's role in shaping contemporary style, while the collection's results confirmed the strength of the brand's vision and the robustness of its execution. Let me remind also you that on October the 1st, we celebrated the reopening of the fully renovated store in Dubai Mall, which now includes Il Salotto, the brand's exclusive by appointment only private space. a space that is truly and exceptional. I invite you whenever you pass in Dubai to visit. I will now share a few general closing remarks. Currency fluctuations, as Paul anticipated, continue to present a headwind for the sector. We have seen that in Q3 it was between three and four points. And the base of comparison in this regard will be even stronger in the fourth quarter when the impact of currency might be between four and five from organic to reported. The volatility of consumer demand remains a defining factor, particularly in certain regions, starting with China, which we expect to remain volatile in the coming months. As Gildo noted in the prior calls, China remains a corner store for the sector and for us. But we see it settling into a new normal, which we expect to lead into balanced growth rates in the coming years. That's the way we put ourselves, the mindset we had towards budget, towards open to buy. In this environment, we know how important it is to stay sharply focused on the key priorities we have defined for each of the three brands and to deliver on them. The direction is clear. The projects in our pipeline are being implemented with discipline. This gives us a solid base to remain cautiously confident as we navigate the period ahead of us. And with that, let me open the Q&A session.