Hello, everyone, and welcome to the Ermenegildo Zegna Group Full Year 2022 Results. My name is Bruno, and I'll be the operator of today. [Operator Instructions]. I will now hand over to your host, Francesca Di Pasquantonio. Please go ahead.

Hello, everyone, and thank you for joining us as we share our full year results for 2022. I'm here today with Ermenegildo Zegna, Group Chairman and CEO; as well as our COO [indiscernible] and Rodrigo Bazan, CEO of Thom Browne. We have filed today our 20-F form, and we've also filed [indiscernible] form, which is the customary conversion from the previous F1 form. Before we begin, I need to point out that we may make certain forward-looking statements during today's call. Our actual results may be materially different from those expressed or implied by these forward-looking statements. All such statements are subject to a number of risks and uncertainties, including those discussed in our SEC filings. I refer you to the Safe Harbor statement, which is included on Page 2 of today's presentation. And of course, this call will be governed by such language. I'm pleased to now hand over to Gildo.

Thank you, Francesca, and hello to everyone. I'm very happy to share that we ended another strong year. And our results for '22 reflect a strong momentum and desirability of Zegna and Tom Browne brands as well as the soundness and success of our strategy and execution. Last year, we kicked off the rebranding of Zegna, unveiling the ZEGNA One Brand strategy, which has seen excellent success with customers so far around the world. We are still early in the rebranding journey and we just launched our second season. And, however, we have a number of initiatives to continue building on Zegna success and reinforce its position as one of the world's top luxury brand and the leader in menswear. Tom Browne, continues to show strong performance also. And besides the numbers, we are very proud of the great reaction Thom Browne Paris and New York shows that has been received last year as well as this year from customer, the media and influencers. And of course, no discussion of our '22 is complete without mentioning our very exciting partnership with the Estee Lauder companies for the TOM FORD Fashion business. We expect the deal to close in a few weeks, at which time we'll be able to share more about our plans for this top brand. So far, ‘23 has been off to a very encouraging start, with very solid double-digit performance across our retail network for Zegna and Thom Browne. I'm optimistic that the reopening of the Greater China region, combined with the positive response we are seeing from customer to our collection across our global network and in particular, European and American customers, we’ll continue to drive our growth this year, and we are particularly excited by the progress of our Made to Measure business, which is…

Thank you. Thank you, Gildo. Similar to the world of Zegna and although we come from different histories and different backgrounds and different amount of years in the market, we have an equally important customer centricity at Thom Browne. So, we continue to strengthen our client value management program, which is the key tool and the key program that we're looking to expand not only the exceptional high level clients that we have, the additional new visitors to the brand that have very significant initial purchases as well as the walk-in and initial transactions. We're very, very focused on this. Our main goals going forward are two. One is big expansion of an awareness, and secondly, a big significant expansion on clients. In order to support that, we do believe that we have an exceptional product, an exceptional client, and we have to have exceptional tool suite. So we are completing at the end of this month the rollout of the sales force tool for Clienteling marketing and customer service. We'll be having a similar solution for China later in the year as well as for Korea as soon as we take over the business in July. As the brand continues to grow in consolidated expenses, we're also keeping our marketing investment to expand significantly our customer base. We have been extremely pleased for the reception of our shows, both in New York and Paris, over the past nine months. And starting from this summer, we'll be celebrating 20 years of Thom brand, which allows us to have a fantastic opportunity to celebrate globally with events, including Thom in different parts of the world over the following 12 months. And with this, I would just like to pass back to Gildo Zegna.

Yes. Thank you, Rodrigo. And I must add that '22 also saw a continual journey of caring for our employees, the environment and the world around us. People was a key theme during '22. We're keeping up with the commitments we announced at our Capital Markets Day in May, we developed a number of DE&I and talent management strategies, including higher our first DE&I officer. During the year, we have also launched a welfare initiative for our most vulnerable employees. And as I anticipated earlier, we are also investing in our Accademia dei Mestieri as part of our approach to preserve and valorize our traditional, our manufacture excellence and our Italian know-how while extending professional opportunities to young people. When it comes to care for the environment, we met a number of our commitments last year. First, we submitted our net zero target to the Science-Based Target Initiative, a big step in ensuring that we are fulfilling our own to combat the climate crisis. We launched Oasi Cashmere, and we are committed to having all cashmere used in all the cashmere collection be fully change by next year as certified by the sustainability Fiber Alliance. This is one of many steps on our road to Traceability, leading to our long-term commitment of having at least 50% of our raw materials trade for the geography comparing from a lower impact sources by 2026. Finally, we know that having sustainability as I heard of everything we do is not just about what we do at the group about what professional industry guests collectively. Meanwhile, we joined a number of partners to spearhead among others to industry sustainability project last year. First, we joined the Camera Nazionale della Moda Italiana and number of other foreign luxury brands and launched the Re.Crea Consortium to…

Rodrigo?

Yes, I'm here. Sorry. Yes, we saw the return of Thom Browne in the year fashion week. We saw an exceptional 2023 collections, both in the showroom and in the show itself, which has a great opportunity with the show having a very significant coverage in terms of attendance and in terms of press. We would like also to give this opportunity to congratulate Thom on this great collection and the return two-year fashion weeks, supporting it being by now the Chairman of the CFDA. In respect to the lawsuit filed by Adidas in the U.S., Thom Browne faced a jury trial in January in New York whose outcome has been posted Thom Browne did not infringe on any of the trademarks of Adidas America. This was a jury decision that came out within a very short amount of time right after almost a couple of weeks of trial. Another exciting development in Thom Browne, in line with the continued worldwide growth, is the agreement with the Korean partner of two years, which is Samsung C&T Corporation. Through which Thom Browne will directly operate the Korean business. And as of July 1, Thom Browne Korea will assume directly responsibility, productivity in Korea, which is 17 direct Liberty stores, turning to 18 direct Liberty stores later this year. So we will be fully owning the business in Korea, and we will continue the partnership with Samsung, which is a very innovative, we believe retail management agreement with Samsung. We have never had such an agreement. And in a nutshell having one of the most exciting markets in the plan, which is South Korea today run by one of the most -- one of the strongest talent teams in Korea, which is the Samsung C&T team running the business. They have done an exceptional job bringing our business right now we fully own it. And with that, I'll pass the word to Gianluca to go through the financials this year.

Thank you, Rodrigo, and thank you all for joining us today. Page eight, let me start by reminding briefly where we stand in terms of revenues. As we disclosed in January, revenues for the year were slightly under €1.5 billion, an increase of 15.5% over '21 in actual terms and 11% in constant currency. Both Zegna and Thom Browne segments continue to show good momentum despite the COVID well-known disruption in China of the second and fourth quarters. This disruption have generated a kind of 2-speed world in our business last year, and we want to point out our pleased 42% growth year-over-year out of Greater China, with this benefit from the success of the brands and the expansion of the footprint, especially on the Thom Browne side. We remind you also that the fourth quarter of 2022 saw the impact of the termination of the distribution license on menswear with Tom Ford, which also affects part of 2023, until the integration of the TOM FORD Fashion business will take place with the closing, which, as Gildo was mentioning before, is expected to happen in the second quarter of this year. At that point, this decline of the termination of distribution will be compensated by the line-by-line integration of Tom Ford. Moving to Page 9, profitability. The adjusted EBIT for the year was up 5.8% from 2021 to reach €157.7 million compared to an adjusted EBIT of last year it was 90 basis points higher. And this year, so we get to 10.6%. The decrease in the margin was due to the following factors: First, the step-up in marketing costs for both brands, which we anticipated in the Capital Markets Day, which will slightly continue also this year. It's a journey. Second, an increase in what we call and you…

Thank You, Gianluca. It's a very clear explanation. Finally, let me share a quick update on our dividends. And subject to the acquired approvals, we tend to make a dividend distribution of €0.10 per share, it's €0.10 per share to the holders of ordinary shares, It's also of approximately €25 million. This will be decided to our next AGM, which is currently expected to be held on June 27. Now I'd like to talk briefly about our outlook for '23 and beyond. And at our Capital Markets Day last May, as you recall, we shared our medium-term target for the group, excluding the integration of TOM FORD Fashion, of course, which was mainly revenue of €2 billion overall and adjusted EBIT margin of at least 15%. As I shared at the top of the call, we now define medium term as the end of fiscal year 2025. For '23, we are encouraged by the start of the year, which is well above our expectation with broad-based strength, a very dynamic Made to Measure, business, which well exceeds the prior record level of both '22 and 2019. And our return towards the Europe and key Asian hubs like Hong Kong and Macau, which I think is very important. We expect that our 2023 results will show comfortably that we are on the trajectory to meet our ambitious goal by the end of '25, again, excluding the integration of Tom Ford. This is acknowledging the ever-changing environment with macro and financial markets volatility by assuming a further significant geopolitical, macroeconomic or financial market deterioration. No further disruption linked to the COVID-19 pandemic and no other unforeseen events. And with that, we are ready to answer any questions you might have. Thank you.

Thank you, Gildo. Bruno, we are ready for the Q&A session.

[Operator Instructions] We have our first question. It comes from Susy Tibaldi from UBS. Susy, your line is now open, please go ahead.

Thank you so much for taking my question, and congratulations on another strong year. On your comments that you had a very good start of the year 2023 and that Q1 is expected to grow double-digit with a very broad-based strength. Could you give a little bit more detail in terms of the growth that you're seeing by region in China? I'm sure you're seeing a very strong rebound. If there is any way you can help us understand what kind of rebound you're seeing there? Maybe give some number, it would be quite helpful? And also, you said this strength is really broad-based. We are hearing from some of your peers that in the U.S., there is a little bit of weakening in consumer sentiment. Is this something that you're seeing as well? And also comment on Europeans would be super helpful. And my second question would be, when you're thinking about the investment that you're planning for 2023, is there any kind of step-up in investment that we should think about? Is there any specific areas that you feel like if necessary to keep investing? And if there is any project that you have planned for 2023? Thank you.

Hi, Susy, Gianluca here. So in terms of numbers, we cannot anticipate what we are going to disclose at the end of the month and we disclose Q1. But anyway, I give you the flavor. As we said, we are seeing double-digit growth at a group level. If we isolate since you were asking for a geographical split, if we isolate retail, retail overall is solid double digits. Solid double-digit, of course, then becomes double-digit when you also take into consideration the Tom Ford the fact, which slows down the number because last year, we were still distributing Tom Ford in Q1. So looking at retail is solid double-digit across the regions. We are seeing solid performance everywhere, also in U.S., which I'm fully aware, someone is not seen. We are not having this feeling. Our performance is solid throughout Q1 in retail for Zegna, mainly for Zegna, mostly for Zegna brand. And so that is the picture I'm going to give you In terms of investment, we expect 2023 to be slightly higher than 2022 in terms of amount. This, of course, becomes with the continuous footprint expansion of Thom Browne. We are seeing some perimeter opportunity in Zegna, which is piece of news because so far, we took advantage of rationalizing the network in Zegna also with the discontinuation of Zegna. Now it's time for us, and we see the opportunity of expansion in North America, in parts of Europe, in some parts of Europe. In China, still some tactical growth. So we will make a step up in terms of CapEx in 2023. And as I said before, also the investments in the supply chain. We believe that our supply chain is a strength for us. We are investing -- we have been investing in '22, but we continue investing in '23 in expanding our internal capacity in some product lines. And so this will become a further driver of investment, together with IT investments in the direction of digitalization, as we have anticipated the tool of configure which will be presented directly to the community in a few days. that will be also in a direction of investment for the group.

Well. We surely are, I would say, positive by the result of the fourth quarter that quite unexpected as far as because the Board said. But I think there is a reason, just not organic growth. I think that all our tries to become a sophisticated retailer in terms of product, merchandising, in terms of marketing, in terms of personalization, in terms of digitalization, a new way to reach out the customer is bringing some good results, and we are extremely pleased about this outreach new process we have, which has become a part of the costs our retail method, which is quite extensive. So if last year, we had some regions where already pretty ahead and others that were behind. Now we can see that they are very consistent across the board and the customer is reacting to the newer branding, to the new merchandising offer of Zegna, and it's -- we are getting really good traction, both by the large customer Made to Measure being with Made to Measure is basically on fire, the Made to Measure the level of '19, which were quite at the peak, I mean, it's quite positive both on the tailoring side and also on the leisure side, and then all the accounting development is bringing the results. So if you just visit our store and you see more and more of a difference. So I think that every season this is the second season of our branding add a bit to it, and we are moving in that direction. So the engine is there, we just have to make the engine to go faster, but we are very pleased about the execution so far of what we have put together last year.

Susy, does it answered?

Yes. Yes, that's great. Thank you so much. And we look forward to the Tom Ford integration as well.

We do as well.

We are a few weeks away, hopefully.

[Operator Instructions] Okay, we do have a couple of questions coming in, first question is from Louise Singlehurst from Goldman Sachs. Louse, your line is now open, please go ahead.

Hi, good afternoon everyone. Thanks for taking my questions. Just following up on the China question from earlier. I wondered if you can help…

Please raise your voice, sorry? We hear you very far away, sorry.

Apologies. Is that a little bit better?

Yes.

Do you hear me now?

Yes, thank you.

I was just going to follow up with a question with regards to China, and thank you for the information so far. But can you help us think about the attitude of the Chinese customers that you know, which are already shoppers at the brand, the appetite for spending? I suppose what we're all trying to think about is the reopening and the appetite of the consumer to spend versus save in terms of a luxury environment. I wonder if there's any color that you can give us on the customers that you know well at Zegna? And then secondly, just on the broader the rebranding and the new initiatives. Can you help us think about the number of like new customers that you think that you're getting to your customer base from the to the digitalization initiatives that we're seeing in the store? Presumably, that's been a very big driver of new customers to the brand? Thank you.

Yes. Okay. I'll start with the China since they have been twice already and probably I'm going to be there at the third site probably before the summer. Listen, the biggest surprise is on Cog Macau, which it was not given, to be honest with you, during the first visit, but it was after a second where I got to understand the Chinese were finally free to move around also inside their boundaries and the Hong Kong and Macau would have been the first destination for sure. Then I remember on the list, Japan was told you some on the list, Bangkok and Singapore. And we see this happening. This is literally it's what's going on. Now predicting whether this trend will hold on for the rest of the year, whether they will be traveling also abroad outside the foundries, even more so of Asian territory, I don't know. We played that they would stay in Asia. So we think that we will see them more for sure, ‘24. We are ready for that. But right now, we arrived the results in the greater China region and in some territories in Asia. Now in terms of more color, listen, I think they liked our color. They like the new car of the brand, and they go big open newness. I mean I just can tell you we just came out with a lineal short collection, and it's branding these days on the market, and we just over that. We just shipped the first shot of note shoes and they just are on fire. So whatever newness you send to them the response. And I tell you, I mean, we're talking not only about loyal customer, we're talking about newness. And I can tell you in the iconic product, I would…

The area where we see general high an area where we see, of course, the new clients coming into the brand are definitely the new iconic products. So especially definitely an entry door is becoming an important entry door to the brand network, whether it's cashmere or cashmere and or the new network. It's becoming an important entry door and over shirts are the new, they constructed whether it's a shirt or a jacket you decide, but those new items are becoming an attractive hook for new clients to explore Zegna as a new brand for them.

Does it answer, Louise?

That's perfect. Thank you very much for the color. Very helpful.

Thank you. Bruno, can we move to the next question, please?

I think we currently have no further questions. So I would like to hand over back to you.

Okay. So thank you very much, everyone, for listening to the call. Our next reporting is going to be the first quarter that's on the 20th of April and will not be the conference call because we have just given you the flagship update. But I will be available for -- to discuss the press release of the first quarter results, together with the management that should you need to ask questions. Happy holidays and speak soon.

Ladies and gentlemen, this concludes today's call. You may now disconnect your lines. Thank you.

Thank you, Bruno.