Ermenegildo Zegna N.V. Ordinary Shares

Good afternoon, good morning everyone. Thank you for joining the Ermenegildo Zegna Group first half 2026 preliminary revenues earnings call. Please note that today's material and presentation are available under the ZegnaGroup.com website. 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 those 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 statement cautionary statement included at page two of today's presentation. I'll now hand over to Paola Durante, Chief of External Relations and Sustainability.

Thank you. Thank you, operator, and good morning, good afternoon, everyone, and welcome to today's call. As usual, Gianluca Tagliabue, Group CEO, will share the call, while I will begin with a brief comment on our second quarter revenue results, before handing over to Gianluca for some final comments on key events of the quarter that you can see also highlighted in the opening page of the presentations and for some closing remarks. I remind you that, as always, when commenting on revenue strengths, I will and we will focus on organic performance, which exclude foreign air exchange impacts and therefore better reflects the underlying business dynamics. Let's skip the first pages and move directly to page 12 of the presentation. In the second quarter of the year 2026, our group revenues reached 517 million euro, up 11%, marking a sequential acceleration compared to the previous quarter. Zegna Brand continued to outperform, recording €324 million revenues, with a 70% growth, also in sequential acceleration, driven by a strong DTC channel performance across all regions. Thom Browne reported €65 million in second quarter revenues, up 3% organic, with a positive double-digit growth in the DTC channel, partially offset by the ongoing rationalization of the wholesale. On top of fashion, the business reported €89 million in second quarter revenues plus 7% organic with the solid performance of the DTC supported by the very good reception of the spring-summer collections. And finally, on second quarter textile performance that was down 3% is largely due to different phasing of deliveries. I will not comment much on other revenues, which, as you know, related to ready-to-wear garments produced for third-party brands, because this is now a marginal business, so changes are really not meaningful. So let's move now to page 13 of the presentation, where we look at the revenues by geographic areas. Starting with EMEA. EMEA, which in the first half of this year represented 33% of the group's revenues, in the second quarter was up 2% organic, with DTC, direct to consumer, up solidly across all the three brands, counterbalanced by the reduction in the wholesale, which reflects the group's strategic decision to prioritize a retail-first business model. Also, the Middle East will turn positive in the second quarter. The Americas, which represented 31% of group revenues in the first half, recorded a very good 22% growth, making another quarter of sequential accelerations supported by double digit growth across the three brands in the DTC channel. Greater China Region, which in the first half of this year accounted for 24% of total revenues. In the second quarter, it was up 9% organic with further accelerations compared to what we achieved, what we reported in Q1 this year. And finally, the rest of APAC, which contributed to 12% of Group H1 revenues in the second quarter, reported a 19% organic growth with all markets contributing, especially Korea and Japan. I will skip really commenting page 14 of the presentation since we will look in details at the trend by channel for each brand. Let me just highlight one number. In the second quarter of this year, DTC accounted for 86% of groups' branded revenue. You know that branded revenues exclude the textile and other revenues, which are by definition and by nature B2B businesses. So let's go to page 15 and let's concentrate on Zegna brand revenue by distribution channel. In the second quarter, Zegna DTC which reached 90% of the brand's H1 revenue, sequentially accelerated compared to the previous quarter and posted 18% organic growth, a growth entirely comp-driven, with all the regions contributing to this performance. The Americas continued to be very strong, revenues in Greater China region improved sequentially, and the rest of APAC continued to strengthen. Europe also performed good, very good, and the Middle East, as I said, improved sequentially during the quarter and returned to a positive growth despite the disruption caused by the war. The brand's network remained unchanged. In the wholesale channel, revenue was down 3% organic as we continue to focus on the direct-to-consumer model based on exclusive customer experience. We confirm here the indication of a low double-digit decline by year-end. So moving to page 16 and commenting Thom Browne. In the second quarter, Thom Browne reported a solid BTC momentum, plus 16%, driven by the Americas, Korea, and Japan. Thom Browne BTC performance was also helped by space contribution. In terms of retail network, in the quarter, the brand opened three net-dos including Chicago and Vancouver. The wholesale channel reported a minus 29% organic performance, reflecting both the decision to streamline the channel and the conversion of the distribution in Hong Kong. We confirm that by year end, this channel wholesale, which I underline is increasingly less relevant for the brand in the first half was only 17% of the brand revenues, will be negative in the minus 30% area. Let's now move to page 17 and let's talk about Tom Ford fashion. DTC revenues for Tom Ford fashion grew 13% organic in the second quarter, which was led primarily by the Americas. Also, rest of APAC in the quarter outperform. This performance was exclusively driven by the comp store sales growth. which is a further proof of the client appreciation of the spring-summer collections. In terms of store networks, Tom Ford Fashion closed one boutique during the quarter. Looking at the wholesale, the wholesale was down 3%, reflecting also in this case the group's retail-first strategy. The performance in the quarter benefited from some anticipated deliveries of the full collections, which has been driven by better and good production timing. By year-end, the channel should be down low mid-single digit, and this is a confirmation of what we already said in past calls. Moving now to page 18, as usual, here you can find the summary of the group store network. And with this, I completed my hopefully short presentation, and I will hand over to Gianluca for his important remarks.

Thank you, Paola. Good morning, good afternoon, everybody. Let me share a few final remarks on some important brand initiatives and on our business. First, as Paola also mentioned, I would like to celebrate once again the extraordinary event that Zegna Brand hosted in Los Angeles this June, which we call the La Villeggiatura. In Los Angeles, We told another chapter of the Zegna story. This time the story was rooted in the Italian tradition of villeggiare, which means to spend the summer in a villa. We brought to life the Zegna family summer villa inspired by a time in the 70s when the entire family would spend the summer together in a house always open to relatives and friends. This is what we did in Los Angeles at Chateau Marmont Hotel. We welcomed friends of the brand to discover exclusive collections and we invited them to experience the runway presentation on the Malibu Pier while living the Zegna legacy. Those were memorable five days delivering results in terms of coverage, recognition and client interest that exceeded our expectations. I want to express again my sincere congratulations to the entire Zegna brand team. starting with Eduardo and Angelo Zegna and Alessandro Sartori for the focus, creativity and quality brought to this project and for the outstanding execution that made these results possible, all underpinned by Gildo's vision, guidance and unwavering encouragement to keep the set, to keep the bar always high. But Villa Zegna Los Angeles was not the only major initiative the brand pursued in the quarter. At Art Basel in June, the Zegna brand continued to champion art as a force for responsible progress through its support of artists who engage directly with communities, society and the environment. This initiative reflects a belief that has long been part of the Zegna brands and overall of our group's identity, that business, culture, people and nature can create lasting value when they evolve together, just as our founder envisioned more than a century ago with the creation of Aussie Zegna. As you can see, everything Zegna does is part of a coherent vision. Every ingredient is already there. Written in the Zegna family book, we simply have to open it and bring to life its values, culture and way of living. That's how we express what makes Zegna unique, an authentic Italian lifestyle that goes far beyond products. Let's now return to Italy where we proudly welcomed Thom Browne for his first ever show during June Men's Fashion Week in Milan. This debut was a powerful expression of the brand's tailoring heritage and commitment to craftsmanship. At the same time, it demonstrated Thom's ability to continue to evolve is iconic creative codes introducing a broader color palette and exploring a sophisticated range of fabrics, textures, and techniques. We were very pleased with the show, which attracted significant positive attention from industry, media, and clients. At the same time, Sam Lobman, the CEO of Thom Browne, is making progress on the brand's objective to drive a stronger retail-first culture across the organization. This includes investing in talent at every level, ensuring that the brand's creativity and merchandising stories are effectively brought to life in the stores. There is still important work ahead, but we believe that the team is moving in the right direction. Moving now to Tom Ford Fashion, the recent 26 Met Gala and Canfield Festival in May marked two defining moments for the brand. Through a curated celebrity presence at both events, the creative and marketing teams contributed to enhance global visibility while driving significant earned media coverage. Combined with increasingly focused collections and with improved CRM capabilities, these efforts are supporting the development of the retail business as shown by recent sales performance in the directly operated stores. Lelio Gavazza, the CEO of Tom Ford Fashion and his team continue to work actively across all these levers, marketing, merchandising, CRM, selected new openings to drive future growth of the business. Indeed, we believe that Tom Ford Fashion ongoing success will come from a combination of comparable store growth, new space contribution, Development of existing clients and acquisition of new ones. Today, our priority is to selectively expand the retail network while deepening our relationship with existing customers. Over the medium term, the focus is also to drive comp store growth, also through new customer acquisition. Before taking your questions, let me conclude highlighting that the strong performance we saw over the last quarter is the result of actions we began implementing years ago and which are bearing their fruits now. We know we have much more to do as important projects remain underway. These projects will continue to require resources before delivering sustainable value, but they are strategic and relevant for our future. As we enter the second half of the year, let me offer a few general observations on what we are seeing across our business. While we are only a few weeks into Q3, and therefore we have yet limited visibility, what we are seeing today is that the underlying DTC trend of the business remains very solid. That said, it is important to recognize that Q2 benefited from some specific initiatives that are not expected to be repeated in the same way in the remainder of the year. For instance, Villa Zegna Los Angeles and the ASICS launch for Thom Browne. The momentum we continue to see reflects the work undertaken over the past several years to strengthen the Zegna brand. While at Thom Browne and Thom Forde Fashion, it reflects the early progress of the initiatives we have put in place, fully aware that we are still in the early stages of the journey and many things remain to be done. As a final remark, our commitment to investors remain unchanged. We remain focused on delivering our 2027 targets. The second part of the year might be a bit more challenging in terms of comparison. However, we are confident that 2026 full year consensus is reasonable. With that, we will now open the Q&A session.