Ermenegildo Zegna Group Reports First Half 2025 Revenues of €928 Million With Profit at €48 Million and Adjusted EBIT at €69 Million

MILAN--( BUSINESS WIRE)--Ermenegildo Zegna N.V. (NYSE:ZGN) (the “Company” and, together with its consolidated subsidiaries, the “Ermenegildo Zegna Group” or “the Group”) today announced Profit of €47.9 million in H1 2025 compared to €31.3 million in H1 2024. In H1 2025, Adjusted EBIT was €68.7 million compared to €80.9 million in H1 2024. 3

Ermenegildo “Gildo” Zegna, Group Chairman and CEO, said: “Our first-half 2025 results reflect the Group’s strategic decision to invest in the DTC store network and capabilities across our three brands, while continuing to support projects that fuel our long-term growth ambitions.

In this context, we are pleased with the operating results reported by the Zegna segment where stronger operating leverage and disciplined execution led to an improvement of the Adjusted EBIT margin by 150 basis points. This strong performance helped balance the impact of the strategic transformation underway at Thom Browne and Tom Ford Fashion.

With the strength of our Filiera, the authenticity of our brands, and—above all—the clarity of our vision and the talent of our team, we remain on track to achieve our 2027 targets, despite sector and currency headwinds.”

1 Throughout this press release, results for the first half of 2025 and 2024 are unaudited.

2 Revenues on an organic growth basis (organic or organic growth) and on a constant currency basis (constant currency), are non-IFRS financial measures. Constant currency growth is calculated excluding foreign exchange. Organic growth is calculated excluding (a) foreign exchange, (b) acquisitions & disposals, and (c) changes in license agreements where the Group operates as a licensee. See the non-IFRS financial measures section starting on page 14 of this press release for the definition and reconciliation of non-IFRS financial measures.

3 Throughout this press release, results for the first half of 2025 and 2024 are unaudited.

Results of Operations

For the six months ended June 30,

(€ thousands, except percentages)

2025

Percentage of revenues

2024

Percentage of revenues

Revenues

927,690

100.0%

960,122

100.0%

Costs of sales

(301,658)

(32.5%)

(322,678)

(33.6%)

Gross profit

626,032

67.5%

637,444

66.4%

Selling, general and administrative expenses

(501,804)

(54.1%)

(497,612)

(51.8%)

Marketing expenses

(62,882)

(6.8%)

(66,751)

(7.0%)

Operating profit

61,346

6.6%

73,081

7.6%

Financial income

21,207

2.3%

12,106

1.3%

Financial expenses

(25,408)

(2.7%)

(29,267)

(3.0%)

Foreign exchange gains/(losses)

10,214

1.1%

(7,684)

(0.8%)

Result from investments accounted for using the equity method

659

0.1%

314

0.0%

Profit before taxes

68,018

7.4%

48,550

5.1%

Income taxes

(20,116)

(2.2%)

(17,218)

(1.8%)

Profit

47,902

5.2%

31,332

3.3%

Half Year 2025 Key Financial Highlights

Revenues

In H1 2025 the Group recorded revenues of €927.7 million, -3.4%YoY and -2.0% organic. DTC channel revenues outperformed (+4.2% YoY and +6.1% organic), while the streamlining of the wholesale channel across the three brands led to a decrease in revenues of the channel of 27.1% YoY and 26.5% organic.

In the first six months of 2025, the ZEGNA brand recorded revenues of €570.4 million, +0.8% YoY (+2.6% organic). Thom Browne revenues were €129.2 million, -22.5% YoY (-21.7% organic). TOM FORD FASHION recorded €152.7 million of revenues, +2.8% YoY (+3.8% organic), while Textile revenues were €67.1 million, -6.6% YoY (-6.3% organic).

Gross Profit, Operating Profit and Profit

Gross profit in H1 2025 reached €626.0 million (compared to €637.4 million in H1 2024), with a gross profit margin of 67.5% compared to 66.4% in H1 2024. This improvement was driven mainly by the channel mix, with the proportion of DTC revenues reaching 82% of branded group revenues in H1 2025, up from 76% in H1 2024.

Selling, general, and administrative (SG&A) expenses were €501.8 million (54.1% of revenues) in H1 2025, compared to €497.6 million (51.8% of revenues) in H1 2024. The higher SG&A incidence on revenues largely reflects investments in the expansion of the DTC distribution network, only partially offset by actions taken to contain discretionary costs across brands.

Marketing expenses in H1 2025 were €62.9 million with a 6.8% incidence on revenues, substantially in line with the 7.0% incidence recorded in H1 2024.

As a result, the Group reported an operating profit of €61.3 million compared to €73.1 million in H1 2024.

In the first six months of 2025, the sum of financial income, financial expenses, and foreign exchange gains and losses, were a positive €6.0 million, compared to a negative €24.8 million in H1 2024. This improvement was largely driven by the fair value remeasurement of liabilities for put options held by non-controlling interests as well as a positive foreign currency exchange impact (driven by the depreciation of the U.S. Dollar compared to the Euro).

Consequently, the Group reported a profit of €47.9 million, 53% higher compared to €31.3 million in H1 2024. H1 2025 profit margin was 5.2% compared to 3.3% in H1 2024.

Adjusted EBIT and Adjusted EBIT Margin

The table below shows the reconciliation of profit to Adjusted EBIT and the calculation of the profit margin and the Adjusted EBIT Margin in H1 2025 and 2024. Adjusted EBIT is the main performance metric used by the Group’s management at the consolidated and reporting segment level.

For the six months ended June 30,

(€ thousands, except percentages)

2025

2024

Profit

47,902

31,332

Income taxes

20,116

17,218

Financial income

(21,207)

(12,106)

Financial expenses

25,408

29,267

Foreign exchange (gains)/losses

(10,214)

7,684

Result from investments accounted for using the equity method

(659)

(314)

Operating profit

61,346

73,081

Adjustments:

Net impairment of leased and owned stores

6,101

4,979

Severance indemnities and provisions for severance expenses

903

1,436

Legal costs for trademark dispute

320

1,388

Transaction costs related to acquisitions

—

Adjusted EBIT

68,670

80,910

Revenues

927,690

960,122

Profit margin (Profit / Revenues)

5.2%

3.3%

Adjusted EBIT Margin (Adjusted EBIT / Revenues)

7.4%

8.4%

Analysis by Segment

In H1 2025, Adjusted EBIT for the Zegna segment was €94.4 million compared to €84.7 million in H1 2024. Adjusted EBIT for the Thom Browne segment was €4.5 million, compared to €20.2 million in H1 2024. The Tom Ford Fashion segment reported an Adjusted EBIT of negative €19.4 million, compared to negative €11.9 million in H1 2024.

For the six months ended June 30,

Change

(€ thousands, except percentages)

2025

2024

2025 vs 2024

Organic

Revenues

Zegna

660,319

660,538

(219)

0.0%

1.6%

Thom Browne

129,462

166,935

(37,473)

(22.4%)

(21.6%)

Tom Ford Fashion

152,715

148,493

4,222

2.8%

3.8%

Intersegment eliminations

(14,806)

(15,844)

1,038

n.m. (*)

n.m.

Total revenues

927,690

960,122

(32,432)

(3.4%)

(2.0%)

(*)

Throughout this section “n.m.” means not meaningful.

Intersegment eliminations include revenues from sales of Textile and Other product lines (which are both included in the Zegna segment) to the Group’s brands.

For the six months ended June 30,

Change

(€ thousands, except percentages)

2025

2024

2025 vs 2024

Adjusted EBIT

Zegna

94,390

84,695

9,695

11.4%

Thom Browne

4,482

20,186

(15,704)

(77.8%)

Tom Ford Fashion

(19,430)

(11,913)

(7,517)

63.1%

Corporate

(10,673)

(11,965)

1,292

10.8%

Intersegment eliminations

(99)

(93)

(6)

(6.5%)

Total Adjusted EBIT

68,670

80,910

(12,240)

(15.1%)

Adjusted EBIT Margin

Zegna

14.3%

12.8%

Thom Browne

3.5%

12.1%

Tom Ford Fashion

(12.7%)

(8.0%)

Total Adjusted EBIT Margin

7.4%

8.4%

Zegna segment

In H1 2025, the Zegna segment (which includes the ZEGNA brand, Textile and Other product lines) generated revenues of €660.3 million compared to €660.5 million in H1 2024.

Adjusted EBIT for the Zegna segment was €94.4 million in H1 2025 with an Adjusted EBIT Margin of 14.3% compared to 12.8% in H1 2024. This 150 bps Adj. EBIT margin improvement has been driven by positive operating leverage and discretionary cost control initiatives.

Thom Browne segment

In H1 2025, the Thom Browne segment generated revenues of €129.5 million compared to €166.9 million in H1 2024.

Adjusted EBIT for the Thom Browne segment was €4.5 million in H1 2025, with an Adjusted EBIT Margin of 3.5% compared to 12.1% in H1 2024. The decrease was led by a negative operating leverage resulting from the decrease in revenues in the period and higher initial costs related to the newly opened DTC stores, which have not yet reached their run-rate efficiency.

Tom Ford Fashion segment

In H1 2025, the Tom Ford Fashion segment generated revenues of €152.7 million compared to €148.5 million in H1 2024

Adjusted EBIT for the Tom Ford Fashion segment in H1 2025 was negative €19.4 million, compared to negative €11.9 million in H1 2024, primarily due to investments in the expansion of the store network and in new talents, IT and the corporate and retail structure to build the platform and support the expansion of the business.

Capital Expenditure, Trade Working Capital, Net Financial Indebtedness/(Cash Surplus) and Free Cash Flow

Capital expenditure

For the six months ended June 30,

(€ thousands)

2025

2024

Payments for property, plant and equipment

42,051

47,926

Payments for intangible assets

11,907

12,151

Capital expenditure

53,958

60,077

Capital expenditure (capex) in H1 2025 was €54.0 million compared to €60.1 million in H1 2024. H1 2025 capex was mainly related to the expansion of the DTC store network across the three brands and to a portion of the investments for the new shoe production plant in Parma (Italy).

Trade Working Capital

(€ thousands)

At June 30, 2025

At December 31, 2024

At June 30, 2024

Trade Working Capital

441,784

460,034

475,642

of which trade receivables

209,462

248,790

216,670

of which inventories

505,681

521,015

540,791

of which trade payables and customer advances

(273,359)

(309,771)

(281,819)

Trade Working Capital was €441.8 million at June 30, 2025 compared to €460.0 million at December 31, 2024. The decrease mainly resulted from a better inventory management and a reduction in receivables driven by the streamlining of the wholesale business.

Net Financial Indebtedness/(Cash Surplus)

(€ thousands)

At June 30, 2025

At December 31, 2024

At June 30, 2024

Net Financial Indebtedness/(Cash Surplus)

92,140

94,225

65,509

Net Financial Indebtedness was €92.1 million at June 30, 2025, substantially in line with €94.2 million at December 31, 2024.

Free Cash Flow

For the six months ended June 30,

(€ thousands)

2025

2024

Net cash flows from operating activities

105,714

120,448

Payments for property, plant and equipment

(42,051)

(47,926)

Payments for intangible assets

(11,907)

(12,151)

Payments for right-of-use assets

(1,800)

—

Payments of lease liabilities

(73,065)

(66,950)

Free Cash Flow

(23,109)

(6,579)

In H1 2025 Free Cash Flow was negative €23.1 million compared to negative €6.6 million in H1 2024. The higher absorption in H1 2025 was primarily driven by the lower cash flow generation from operating activities.

Upcoming events

Next financial releases

To receive email alerts of the timing of future financial news releases, as well as future announcements, please register at https://ir.zegnagroup.com.

Conference Call

As previously announced, the Group will host a live webcast and conference call today at 8:00 a.m. ET (2:00 p.m. CET).

To access the webcast please visit our website ( https://ir.zegnagroup.com/financial-calendar/events).

To participate in the call, please dial:

Italy: +39 06 9450 1060

United States: +1 646 233 4753

United Kingdom: +44 20 3936 2999

Access Code: 069369

Webcast link: https://events.q4inc.com/attendee/485951116

An online archive of the broadcast will be available on the website shortly after the live call and will be available for twelve months.

About Ermenegildo Zegna Group

Founded in 1910 in Trivero, Italy, the Ermenegildo Zegna Group (NYSE:ZGN) is a global luxury company with a leading position in the high-end menswear business. Through its three complementary brands, the Group reaches a wide range of communities and market segments across the high-end fashion industry, from ZEGNA’s timeless luxury to the modern tailoring of Thom Browne, to seductive elegance with TOM FORD FASHION. The Ermenegildo Zegna Group is internationally recognized for its unique Filiera, owned and controlled by the Group, which is made up of the finest Italian textile producers fully integrated with unique luxury manufacturing capabilities, to ensure superior excellence, quality and innovation capacity. The Ermenegildo Zegna Group has more than 7,100 employees and recorded revenues of €1.95 billion in 2024.

Forward Looking Statements

This communication contains forward-looking statements that are based on beliefs and assumptions and on information currently available to the Company. In particular, statements regarding future financial performance and the Group’s expectations as to the achievement of certain targeted metrics at any future date or for any future period are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek”, “aspire,” “goal,” “outlook,” “guidance,” “forecast,” “prospect” or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. Any statements that refer to expectations, projections or other characterizations of future events or circumstances, including strategies or plans, are also forward-looking statements. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements, and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in forward-looking statements as a result of a variety of factors, including: the recognition, integrity and reputation of our brands; our ability to anticipate trends and to identify and respond to new and changing consumer preference; pandemics or other public health crises; international business, regulatory, social and political risks; restrictions on trade and the imposition of tariffs among countries; political instability, geopolitical tensions or conflicts and the imposition of sanctions (including armed conflicts, such as the war in Ukraine and the conflict in the Middle East, and sanctions imposed onto Russia); the occurrence of acts of terrorism or similar events, conflicts or civil unrest; existing or future disputes, proceedings or litigation; future sales of our securities in the public market; our ability to maintain compliance with applicable listing standards; volatility in our share price; our ability to implement our strategy; recent and potential future acquisitions; disruption to our manufacturing and logistics facilities, as well as our directly operated stores; risks related to the sale of our products through our direct-to-consumer channel, as well as through points of sale operated by third parties in the wholesale channel; our dependence on our local partners to sell our products in certain markets; fluctuations in the price or quality of, or disruptions in the availability of, raw materials; our ability to negotiate, maintain or renew our license or co-branding agreements with high end third party brands; tourist traffic and demand; our dependence on certain key senior personnel as well as skilled personnel; our ability to protect our intellectual property rights; any malfunction or disruption in our information technology and networks, including as a result of cybercrime; the theft or unauthorized use of personal information of our customers, employees or other parties; fluctuations in currency exchange rates or interest rates; credit risk; the high level of competition in the industry in which we operate; global economic conditions and macro events, including inflation; changes in, or failures to comply with, applicable laws and regulations, or actions taken by regulatory authorities; climate change and other environmental impacts and our ability to meet our customers’ and other stakeholders’ expectations on environment, social and governance matters; the enactment of tax reforms or other changes in tax laws and regulations; and other risks and uncertainties, including those described in our filings with the SEC.

Most of these factors are outside the Company’s control and are difficult to predict. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company and its directors, officers or employees or any other person that the Company will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this communication represent the views of the Company as of the date of this communication. Subsequent events, factors and developments may cause that view to change, and it is not possible to assess the impact of such event, factor or development on the Company’s and the Group’s business. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company disclaims any obligation to update or revise publicly forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing the views of the Company as of any date subsequent to the date of this communication.

First Half 2025 - Group Revenues Tables

REVENUES BY SEGMENT (Unaudited)

H1 2025 vs H1 2024

Q2 2025 vs Q2 2024

(€ thousands, except percentages)

2025

2024

Organic

2025

2024

Organic

Zegna

660,319

660,538

0.0%

1.6%

327,026

335,638

(2.6%)

1.0%

Thom Browne

129,462

166,935

(22.4%)

(21.6%)

65,080

87,869

(25.9%)

(23.9%)

Tom Ford Fashion

152,715

148,493

2.8%

3.8%

85,237

83,473

2.1%

4.1%

Intersegment eliminations

(14,806)

(15,844)

n.m. (*)

n.m.

(8,474)

(10,015)

n.m.

Total revenues

927,690

960,122

(3.4%)

(2.0%)

468,869

496,965

(5.7%)

(2.6%)

(*)

Throughout this section “n.m.” means not meaningful.

Intersegment eliminations include revenues from products that the Textile and Other product lines (included in the Zegna segment) sold to the Group’s brands.

REVENUES BY BRAND AND PRODUCT LINE (Unaudited)

H1 2025 vs H1 2024

Q2 2025 vs Q2 2024

(€ thousands, except percentages)

2025

2024

Organic

2025

2024

Organic

ZEGNA brand

570,409

566,067

0.8%

2.6%

277,493

283,197

(2.0%)

2.2%

Thom Browne

129,154

166,721

(22.5%)

(21.7%)

64,931

87,514

(25.8%)

(23.7%)

TOM FORD FASHION

152,715

148,493

2.8%

3.8%

85,237

83,473

2.1%

4.1%

Textile

67,061

71,836

(6.6%)

(6.3%)

37,140

38,593

(3.8%)

Other (1)

8,351

7,005

19.2%

19.3%

4,068

4,188

(2.9%)

(2.5%)

Total revenues

927,690

960,122

(3.4%)

(2.0%)

468,869

496,965

(5.7%)

(2.6%)

(1)

Other mainly includes revenues from agreements with third party brands.

REVENUES BY DISTRIBUTION CHANNEL (Unaudited)

H1 2025 vs H1 2024

Q2 2025 vs Q2 2024

(€ thousands, except percentages)

2025

2024

Organic

2025

2024

Organic

Direct to Consumer (DTC)

ZEGNA brand

504,501

486,561

3.7%

5.6%

253,706

246,946

2.7%

7.1%

Thom Browne

92,639

89,976

3.0%

5.0%

46,351

45,257

2.4%

6.6%

TOM FORD FASHION

100,895

93,062

8.4%

9.9%

52,844

49,361

7.1%

10.7%

Total Direct to Consumer (DTC)

698,035

669,599

4.2%

6.1%

352,901

341,564

3.3%

7.5%

As a percentage of branded products (1)

82 %

76 %

83 %

75 %

Wholesale branded

ZEGNA brand

65,908

79,506

(17.1%)

(15.4%)

23,787

36,251

(34.4%)

(31.1%)

Thom Browne

36,515

76,745

(52.4%)

18,580

42,257

(56.0%)

(55.8%)

TOM FORD FASHION

51,820

55,431

(6.5%)

(6.3%)

32,393

34,112

(5.0%)

(5.3%)

Total Wholesale branded

154,243

211,682

(27.1%)

(26.5%)

74,760

112,620

(33.6%)

(32.5%)

As a percentage of branded products

18 %

24 %

17 %

25 %

Textile

67,061

71,836

(6.6%)

(6.3%)

37,140

38,593

(3.8%)

Other (2)

8,351

7,005

19.2%

19.3%

4,068

4,188

(2.9%)

(2.5%)

Total revenues

927,690

960,122

(3.4%)

(2.0%)

468,869

496,965

(5.7%)

(2.6%)

(1)

Branded products refer to the products sold under the three brands that the Group operates, through the DTC or wholesale branded distribution channels.

(2)

Other mainly includes revenues from agreements with third party brands.

REVENUES BY GEOGRAPHIC AREA (Unaudited)

H1 2025 vs H1 2024

Q2 2025 vs Q2 2024

(€ thousands, except percentages)

2025

2024

Organic

2025

2024

Organic

EMEA (1)

328,908

336,591

(2.3%)

(1.9%)

174,819

180,029

(2.9%)

(1.9%)

Americas (2)

262,714

246,046

6.8%

9.3%

137,743

131,869

4.5%

9.8%

Greater China Region

223,101

266,324

(16.2%)

(14.7%)

99,841

126,925

(21.3%)

(17.1%)

Rest of APAC (3)

111,508

109,990

1.4%

3.4%

55,658

57,556

(3.3%)

(1.0%)

Other (4)

1,459

1,171

24.6%

24.8%

808

586

37.9%

38.6%

Total revenues

927,690

960,122

(3.4%)

(2.0%)

468,869

496,965

(5.7%)

(2.6%)

(1)

EMEA includes Europe, the Middle East and Africa.

(2)

Americas includes the United States of America, Canada, Mexico, Brazil and other Central and South American countries.

(3)

Rest of APAC includes Japan, South Korea, Singapore, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries.

(4)

Other revenues mainly include royalties.

Group Monobrand (1) Store Network at June 30, 2025

At June 30, 2025

At December 31, 2024

At June 30, 2024

Stores

ZEGNA

Thom Browne

TOM FORD FASHION

Group

ZEGNA

Thom Browne

TOM FORD FASHION

Group

ZEGNA

Thom Browne

TOM FORD FASHION

Group

EMEA

102

Americas

120

113

Greater China Region

129

130

128

Rest of APAC

121

122

Total Direct to Consumer (DTC)

286

120

472

281

116

461

279

102

437

EMEA

Americas

105

106

120

Greater China Region

—

Rest of APAC

Total Wholesale

115

199

118

203

130

225

Total

401

141

129

671

399

137

128

664

409

126

127

662

(1)

Monobrand store count includes our DOSs (which are divided into boutiques and outlets) and our Wholesale monobrand stores (including also monobrand franchisees).

Ermenegildo Zegna N.V.

SEMI-ANNUAL CONDENSED CONSOLIDATED STATEMENT OF PROFIT

for the six months ended June 30, 2025 and 2024

(Unaudited)

For the six months ended June 30,

(€ thousands)

2025

2024

Revenues

927,690

960,122

Cost of sales

(301,658)

(322,678)

Gross profit

626,032

637,444

Selling, general and administrative expenses

(501,804)

(497,612)

Marketing expenses

(62,882)

(66,751)

Operating profit

61,346

73,081

Financial income

21,207

12,106

Financial expenses

(25,408)

(29,267)

Foreign exchange gains/(losses)

10,214

(7,684)

Result from investments accounted for using the equity method

659

314

Profit before taxes

68,018

48,550

Income taxes

(20,116)

(17,218)

Profit

47,902

31,332

Attributable to:

Shareholders of the Parent Company

43,083

25,085

Non-controlling interests

4,819

6,247

Basic earnings per share in €

0.17

0.10

Diluted earnings per share in €

0.17

0.10

Ermenegildo Zegna N.V.

SEMI-ANNUAL CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at June 30, 2025 and at December 31, 2024

(Unaudited)

(€ thousands)

At June 30, 2025

At December 31, 2024

Assets

Non-current assets

Intangible assets

552,184

614,363

Property, plant and equipment

201,689

204,806

Right-of-use assets

614,020

581,437

Investments accounted for using the equity method

20,249

19,690

Deferred tax assets

162,451

166,029

Other non-current financial assets

39,355

41,486

Total non-current assets

1,589,948

1,627,811

Current assets

Inventories

505,681

521,015

Trade receivables

209,462

248,790

Derivative financial instruments

32,169

1,711

Tax receivables

34,069

32,505

Other current financial assets

71,329

77,269

Other current assets

124,684

105,742

Cash and cash equivalents

159,896

219,130

Total current assets

1,137,290

1,206,162

Total assets

2,727,238

2,833,973

Liabilities and Equity

Equity attributable to shareholders of the Parent Company

885,350

916,120

Equity attributable to non-controlling interests

67,085

66,767

Total equity

952,435

982,887

Non-current liabilities

Non-current borrowings

174,418

196,401

Other non-current financial liabilities

118,560

146,448

Non-current lease liabilities

554,825

518,728

Non-current provisions for risks and charges

21,853

23,550

Employee benefits

30,117

34,945

Deferred tax liabilities

73,279

78,129

Total non-current liabilities

973,052

998,201

Current liabilities

Current borrowings

174,235

177,166

Current lease liabilities

131,497

142,957

Derivative financial instruments

5,132

15,138

Current provisions for risks and charges

17,522

16,792

Trade payables and customer advances

273,359

309,771

Tax liabilities

33,588

32,389

Other current liabilities

166,418

158,672

Total current liabilities

801,751

852,885

Total equity and liabilities

2,727,238

2,833,973

Ermenegildo Zegna N.V.

SEMI-ANNUAL CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the six months ended June 30, 2025 and 2024

(Unaudited)

For the six months ended June 30,

(€ thousands)

2025

2024

Operating activities

Profit

47,902

31,332

Income taxes

20,116

17,218

Depreciation, amortization and impairment of assets

128,422

113,527

Financial income

(21,207)

(12,106)

Financial expenses

25,408

29,267

Foreign exchange (gains)/losses

(10,214)

7,684

Provisions for obsolete inventory

14,974

7,775

(Releases)/Accruals for other provisions

(5,963)

1,450

Result from investments accounted for using the equity method

(659)

(314)

Other non-cash expenses, net

18,575

36,124

Change in inventories

(26,689)

(21,568)

Change in trade receivables

26,533

21,286

Change in trade payables including customer advances

(17,479)

(28,354)

Change in other operating assets and liabilities

(52,628)

(42,268)

Interest paid

(20,653)

(19,587)

Income taxes paid

(20,724)

(21,018)

Net cash flows from operating activities

105,714

120,448

Investing activities

Payments for property, plant and equipment

(42,051)

(47,926)

Payments for intangible assets

(11,907)

(12,151)

Payments related to right-of-use assets

(1,800)

—

Proceeds from disposals of non-current financial assets

287

—

Payments for purchases of non-current financial assets

(540)

(1,319)

Proceeds from disposals of current financial assets and derivative instruments

10,572

15,707

Payments for acquisitions of current financial assets and derivative instruments

(4,250)

(21,444)

Business combinations, net of cash acquired

—

(14,608)

Acquisition of investments accounted for using the equity method

(355)

—

Net cash flows used in investing activities

(50,044)

(81,741)

Financing activities

Proceeds from borrowings

139,926

154,713

Repayments of borrowings

(166,500)

(174,223)

Repayments of other non-current financial liabilities

(110)

—

Payments of lease liabilities

(73,065)

(66,950)

Payments for acquisition of non-controlling interests

—

(23,502)

Deferred payments for business combinations

(4,673)

—

Dividends paid to non-controlling interests

(1,703)

(1,444)

Contribution from non-controlling interests

583

—

Net cash flows used in financing activities

(105,542)

(111,406)

Effects of exchange rate changes on cash and cash equivalents

(9,362)

1,736

Net decrease in cash and cash equivalents

(59,234)

(70,963)

Cash and cash equivalents at the beginning of the period

219,130

296,279

Cash and cash equivalents at the end of the period

159,896

225,316

Non-IFRS Financial Measures

The Group’s management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: adjusted earnings before interest and taxes (“Adjusted EBIT”), Adjusted EBIT Margin, Net Financial Indebtedness/(Cash Surplus), Trade Working Capital, Free Cash Flow, revenues on a constant currency basis (Constant Currency) and revenues on an organic growth basis (organic or organic growth). The Group’s management believes that these non-IFRS financial measures provide useful and relevant information regarding the Group’s financial performance and financial condition, and improve the ability of management and investors to assess and compare the financial performance and financial position of the Group with those of other companies. They also provide comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other strategic and operational decisions. While similar measures are widely used in the industry in which the Group operates, the financial measures that the Group uses may not be comparable to other similarly named measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS Accounting Standards. A definition, explanation of relevance and a reconciliation of each non-IFRS financial measure to the most directly comparable measure calculated and presented in accordance with IFRS Accounting Standards are set out below.

Adjusted EBIT and Adjusted EBIT Margin

Adjusted EBIT is defined as profit or loss before income taxes plus financial income, financial expenses, foreign exchange gains and losses, and the result from investments accounted for using the equity method, adjusted for income and costs which are significant in nature and that management considers not reflective of underlying operating activities, including, for one or all of the periods presented and as further described below, net impairment of leased and owned stores, severance indemnities and provisions for severance expenses, legal costs for trademark dispute and transaction costs related to acquisitions.

Adjusted EBIT Margin is defined as Adjusted EBIT divided by revenues of the applicable period.

The Group’s management uses Adjusted EBIT and Adjusted EBIT Margin for internal reporting to assess performance and as part of the forecasting, budgeting and decision-making processes as they provide additional transparency regarding the Group’s underlying operating performance. The Group’s management believes these non-IFRS financial measures are useful because they exclude items that management believes are not indicative of the Group’s underlying operating performance and allow management to view operating trends, perform analytical comparisons and benchmark performance between periods and among segments. The Group’s management also believes that Adjusted EBIT and Adjusted EBIT Margin are useful for investors and analysts to better understand how management assesses the Group’s underlying operating performance on a consistent basis and to compare the Group’s performance with that of other companies. Accordingly, management believes that Adjusted EBIT and Adjusted EBIT Margin provide useful information to third party stakeholders in understanding and evaluating the Group’s operating results.

The following table presents a reconciliation of Profit to Adjusted EBIT and the calculation of the Profit Margin and the Adjusted EBIT Margin for the six months ended June 30, 2025 and 2024:

For the six months ended June 30,

(€ thousands, except percentages)

2025

2024

Profit

47,902

31,332

Income taxes

20,116

17,218

Financial income

(21,207)

(12,106)

Financial expenses

25,408

29,267

Foreign exchange (gains)/losses

(10,214)

7,684

Result from investments accounted for using the equity method

(659)

(314)

Operating profit

61,346

73,081

Adjustments:

Net impairment of leased and owned stores (1)

6,101

4,979

Severance indemnities and provisions for severance expenses (2)

903

1,436

Legal costs for trademark dispute (3)

320

1,388

Transaction costs related to acquisitions (4)

—

Adjusted EBIT

68,670

80,910

Revenues

927,690

960,122

Profit margin (Profit / Revenues)

5.2%

3.3%

Adjusted EBIT Margin (Adjusted EBIT / Revenues)

7.4%

8.4%

(1)

Relates to the net impairment of leased and owned stores for the six months ended June 30, 2025 and 2024.

For the six months ended June 30,

(€ thousands)

2025

2024

Right-of-use assets

4,046

3,036

Property, plant and equipment

2,016

1,943

Intangible assets

—

Total net impairment of leased and owned stores

6,101

4,979

(2)

Relates to severance indemnities of €903 thousand and €1,436 thousand for the six months ended June 30, 2025 and 2024, respectively.

(3)

Relates to legal costs of €320 thousand and €1,388 thousand for the six months ended June 30, 2025 and 2024, respectively, in connection with a legal dispute between Adidas AG and Thom Browne, primarily in relation to the use of trademarks.

(4)

Relates to transaction costs of €26 thousand for the six months ended 2024, primarily for consultancy and legal fees related to the Group’s acquisition of the ZEGNA business in South Korea.

Net Financial Indebtedness/(Cash Surplus)

Net Financial Indebtedness/(Cash Surplus) is defined as the sum of financial borrowings (current and non-current) and derivative financial instrument liabilities, net of cash and cash equivalents, derivative financial instrument assets and securities (recorded within other current financial assets in the semi-annual condensed consolidated statement of financial position).

The Group’s management believes that Net Financial Indebtedness/(Cash Surplus) is useful to monitor the level of net liquidity and financial resources available to the Group. The Group’s management believes this non-IFRS financial measure aids management, investors and analysts to analyze the Group’s financial position and financial resources available, and to compare the Group’s financial position and financial resources available with that of other companies.

The following table sets forth the calculation of Net Financial Indebtedness/(Cash Surplus) at June 30, 2025 and at December 31, 2024:

(€ thousands)

At June 30, 2025

At December 31, 2024

Non-current borrowings

174,418

196,401

Current borrowings

174,235

177,166

Derivative financial instruments — Liabilities

5,132

15,138

Total borrowings, other financial liabilities and derivatives

353,785

388,705

Cash and cash equivalents

(159,896)

(219,130)

Derivative financial instruments — Assets

(32,169)

(1,711)

Other current financial assets (Securities)

(69,580)

(73,639)

Total cash and cash equivalents, other current financial assets and derivatives

(261,645)

(294,480)

Net Financial Indebtedness/(Cash Surplus)

92,140

94,225

Trade Working Capital

Trade Working Capital is defined as current assets less current liabilities adjusted for derivative assets and liabilities, tax receivables and liabilities, cash and cash equivalents, borrowings, lease liabilities, and certain other current assets and liabilities.

The Group’s management uses Trade Working Capital to understand and evaluate the Group’s liquidity generation/absorption. The Group’s management believes this non-IFRS financial measure is important supplemental information for investors in evaluating liquidity in that it provides insight into the availability of net current resources to fund our ongoing operations. Trade Working Capital is a measure used by management in internal evaluations of cash availability and operational performance.

The following table sets forth the calculation of Trade Working Capital at June 30, 2025 and at December 31, 2024:

(€ thousands)

At June 30, 2025

At December 31, 2024

Current assets

1,137,290

1,206,162

Current liabilities

(801,751)

(852,885)

Working capital

335,539

353,277

Less:

Derivative financial instruments - Assets

32,169

1,711

Tax receivables

34,069

32,505

Other current financial assets

71,329

77,269

Other current assets

124,684

105,742

Cash and cash equivalents

159,896

219,130

Current borrowings

(174,235)

(177,166)

Current lease liabilities

(131,497)

(142,957)

Derivative financial instruments - Liabilities

(5,132)

(15,138)

Current provisions for risks and charges

(17,522)

(16,792)

Tax liabilities

(33,588)

(32,389)

Other current liabilities

(166,418)

(158,672)

Trade Working Capital

441,784

460,034

of which trade receivables

209,462

248,790

of which inventories

505,681

521,015

of which trade payables and customer advances

(273,359)

(309,771)

Free Cash Flow

Free Cash Flow is defined as net cash flows from operating activities less payments for property, plant and equipment (net of proceeds from disposals), intangible assets, right-of-use assets and lease liabilities.

The Group’s management believes that Free Cash Flow is a useful metric for management, investors and analysts to evaluate and monitor the Group’s ability to generate cash, including in comparison to other companies. Free Cash Flow is not representative of residual cash flows available for discretionary purposes.

The following table sets forth the Free Cash Flow for the six months ended June 30, 2025, and 2024:

For the six months ended June 30,

(€ thousands)

2025

2024

Net cash flows from operating activities

105,714

120,448

Payments for property, plant and equipment

(42,051)

(47,926)

Payments for intangible assets

(11,907)

(12,151)

Payments for right-of-use assets

(1,800)

—

Payments of lease liabilities

(73,065)

(66,950)

Free Cash Flow

(23,109)

(6,579)

Revenues on a constant currency basis (Constant Currency)

In addition to presenting our revenues on a current currency basis, we also present certain revenue information on a constant currency basis (Constant Currency), which excludes the effects of foreign currency translation from our subsidiaries with functional currencies different from the Euro.

We calculate Constant Currency revenues by applying the current period average foreign currency exchange rates to translate prior period revenues of foreign subsidiaries expressed in local functional currencies different than the Euro.

We use revenues on a Constant Currency basis to analyze how our underlying revenues have changed between periods independent of the effects of foreign currency translation.

Revenues on a Constant Currency basis are not a substitute for revenues on a current currency basis or any IFRS-related measures, however we believe that revenues excluding the impact of foreign currency translation provide additional useful information to management and to investors in analyzing and evaluating our revenues and operating performance.

Revenues on an organic growth basis (organic or organic growth)

In addition to presenting our revenues on a current currency basis, we also present certain revenue information on an organic growth basis (organic or organic growth). Organic growth is calculated as the change in revenues from period to period, excluding the effects of (a) foreign exchange, (b) acquisitions and disposals and (c) changes in license agreements where the Group operates as a licensee.

In calculating organic performance, the following adjustments are made to revenues:

We believe the presentation of revenues on an organic basis is useful to better understand and analyze the underlying change in the Group’s revenues from period to period on a consistent perimeter and constant currency basis.

Revenues on an organic basis are not a substitute for revenues on a current currency basis or any IFRS-related measures, however we believe that revenues excluding the effects of (a) foreign exchange, (b) acquisitions and disposals and (c) changes in license agreements where the Group operates as a licensee provide additional useful information to management and to investors in analyzing and evaluating our revenues and operating performance.

The tables below show a reconciliation of reported revenue performance to Constant Currency, excluding the effects of foreign exchange, and to organic performance, which excludes also acquisitions and disposals and changes in license agreements where the Group operates as a licensee, by segment, by brand and product line, by distribution channel and by geographic area for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 (H1 2025 vs H1 2024) and for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 (Q2 2025 vs Q2 2024). Revenues on an organic growth basis for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, and for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, are equal to Constant Currency since there is no impact from acquisitions and disposals or changes in license agreements where the Group operates as a licensee.

Segment

H1 2025 vs H1 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

Zegna

0.0%

(1.6%)

1.6%

—%

1.6%

Thom Browne

(22.4%)

(0.8%)

(21.6%)

—%

(21.6%)

Tom Ford Fashion

2.8%

(1.0%)

3.8%

—%

3.8%

Total

(3.4%)

(1.4%)

(2.0%)

—%

(2.0%)

Q2 2025 vs Q2 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

Zegna

(2.6%)

(3.6%)

1.0%

—%

1.0%

Thom Browne

(25.9%)

(2.0%)

(23.9%)

—%

(23.9%)

Tom Ford Fashion

2.1%

(2.0%)

4.1%

—%

4.1%

Total

(5.7%)

(3.1%)

(2.6%)

—%

(2.6%)

Brand and product line

H1 2025 vs H1 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

ZEGNA brand

0.8%

(1.8%)

2.6%

—%

2.6%

Thom Browne

(22.5%)

(0.8%)

(21.7%)

—%

(21.7%)

TOM FORD FASHION

2.8%

(1.0%)

3.8%

—%

3.8%

Textile

(6.6%)

(0.3%)

(6.3%)

—%

(6.3%)

Other

19.2%

(0.1%)

19.3%

—%

19.3%

Total

(3.4%)

(1.4%)

(2.0%)

—%

(2.0%)

Q2 2025 vs Q2 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

ZEGNA brand

(2.0%)

(4.2%)

2.2%

—%

2.2%

Thom Browne

(25.8%)

(2.1%)

(23.7%)

—%

(23.7%)

TOM FORD FASHION

2.1%

(2.0%)

4.1%

—%

4.1%

Textile

(3.8%)

—%

(3.8%)

—%

(3.8%)

Other

(2.9%)

(0.4%)

(2.5%)

—%

(2.5%)

Total

(5.7%)

(3.1%)

(2.6%)

—%

(2.6%)

Distribution channel

H1 2025 vs H1 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

Direct to Consumer (DTC)

ZEGNA brand

3.7%

(1.9%)

5.6%

—%

5.6%

Thom Browne

3.0%

(2.0%)

5.0%

—%

5.0%

TOM FORD FASHION

8.4%

(1.5%)

9.9%

—%

9.9%

Total Direct to Consumer (DTC)

4.2%

(1.9%)

6.1%

—%

6.1%

Wholesale branded

ZEGNA brand

(17.1%)

(1.7%)

(15.4%)

—%

(15.4%)

Thom Browne

(52.4%)

—%

(52.4%)

—%

(52.4%)

TOM FORD FASHION

(6.5%)

(0.2%)

(6.3%)

—%

(6.3%)

Total Wholesale branded

(27.1%)

(0.6%)

(26.5%)

—%

(26.5%)

Textile

(6.6%)

(0.3%)

(6.3%)

—%

(6.3%)

Other

19.2%

(0.1%)

19.3%

—%

19.3%

Total

(3.4%)

(1.4%)

(2.0%)

—%

(2.0%)

Q2 2025 vs Q2 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

Direct to Consumer (DTC)

ZEGNA brand

2.7%

(4.4%)

7.1%

—%

7.1%

Thom Browne

2.4%

(4.2%)

6.6%

—%

6.6%

TOM FORD FASHION

7.1%

(3.6%)

10.7%

—%

10.7%

Total Direct to Consumer (DTC)

3.3%

(4.2%)

7.5%

—%

7.5%

Wholesale branded

ZEGNA brand

(34.4%)

(3.3%)

(31.1%)

—%

(31.1%)

Thom Browne

(56.0%)

(0.2%)

(55.8%)

—%

(55.8%)

TOM FORD FASHION

(5.0%)

0.3%

(5.3%)

—%

(5.3%)

Total Wholesale branded

(33.6%)

(1.1%)

(32.5%)

—%

(32.5%)

Textile

(3.8%)

—%

(3.8%)

—%

(3.8%)

Other

(2.9%)

(0.4%)

(2.5%)

—%

(2.5%)

Total

(5.7%)

(3.1%)

(2.6%)

—%

(2.6%)

Geographic area

H1 2025 vs H1 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

EMEA (1)

(2.3%)

(0.4%)

(1.9%)

—%

(1.9%)

Americas (2)

6.8%

(2.5%)

9.3%

—%

9.3%

Greater China Region

(16.2%)

(1.5%)

(14.7%)

—%

(14.7%)

Rest of APAC (3)

1.4%

(2.0%)

3.4%

—%

3.4%

Other (4)

24.6%

(0.2%)

24.8%

—%

24.8%

Total

(3.4%)

(1.4%)

(2.0%)

—%

(2.0%)

Q2 2025 vs Q2 2024

Revenues Growth

less

Foreign exchange

Constant

Currency

less

Acquisitions and disposals

less

Changes in license agreements where the Group operates as a licensee

Organic

EMEA (1)

(2.9%)

(1.0%)

(1.9%)

—%

(1.9%)

Americas (2)

4.5%

(5.3%)

9.8%

—%

9.8%

Greater China Region

(21.3%)

(4.2%)

(17.1%)

—%

(17.1%)

Rest of APAC (3)

(3.3%)

(2.3%)

(1.0%)

—%

(1.0%)

Other (4)

37.9%

(0.7%)

38.6%

—%

38.6%

Total

(5.7%)

(3.1%)

(2.6%)

—%

(2.6%)

(1)

EMEA includes Europe, the Middle East and Africa.

(2)

Americas includes the United States of America, Canada, Mexico, Brazil and other Central and South American countries.

(3)

Rest of APAC includes Japan, South Korea, Singapore, Thailand, Malaysia, Vietnam, Indonesia, Philippines, Australia, New Zealand, India and other Southeast Asian countries.

(4)

Other revenues mainly include royalties.

Capital expenditure

Capital expenditure is defined as the sum of cash outflows that result in additions to property, plant and equipment and intangible assets.

The following table shows a breakdown of capital expenditure by category for the six months ended June 30, 2025 and 2024.

For the six months ended June 30,

(€ thousands)

2025

2024

Payments for property, plant and equipment

42,051

47,926

Payments for intangible assets

11,907

12,151

Capital expenditure

53,958

60,077