The Italian fashion group Ermenegildo Zegna NV announced its medium-term financial ambitions and its ESG goals and strategies on Tuesday.
Accordingly, the group has set a medium-term sales target of at least 2 billion euros and an adjusted pre-tax result of at least 15 percent of sales.
ESG goals include traceability of materials, traceability of climate targets and equal employment opportunities. These obligations are monitored by the Board of Directors. Starting this year, long-term stock participation plans granted to eligible executives will also be linked to the achievement of these goals.
“I am very much looking forward to welcoming our investors and financial analysts to Oasi Zegna today. This special place embodies our roots, values and culture and is an integral part of our past and future. It is also the cradle of our centuries-long commitment to the nature around us, to our employees and to our communities. The ESG goals announced today reaffirm our commitment to a path of responsible growth and lead us boldly into the future. We have anchored our financial goals in our values, which gives me confidence in our ability to achieve the goals outlined in our business strategy,” said Ermenegildo Zegna, Chairman and CEO of the Group.
ESG goals
Specifically, later this year the group will complete the submission of targets to reduce greenhouse gas emissions in line with the Science-Based Targets initiative. By early 2023, she will appoint a Diversity, Equity and Inclusion Officer (DE&I) to oversee the implementation of the DE&I strategy.
By 2024, the group intends to use an innovative and open digital platform that will enable supplier companies to share their data on energy sources, water, chemicals and emissions as well as product certifications covering at least 30 percent of their supply volume.
The group also aims to source 100 percent of its electricity in Europe and the US from renewable sources by 2024, and by 2027 this is to be extended to all sites (Scope 2).
By 2026, more than 50 percent of the top-priority raw materials used in Zegna Group products should be traceable to their place of origin, and by 2030 even more than 95 percent.
Starting next year, the group will plant 10,000 trees, called Zegna mini-forests (Oasi Zegna), in every city where it opens or relocates Zegna boutiques.
financial strategy
In the medium term, the Group expects that the increase in productivity in the stores and the continued positive development of the price/supply ratio will be the main drivers of sales, which together with a favorable operational leverage will have a positive impact on profitability.
These improvements should more than offset increased marketing investments planned in support of Zegna’s rebranding and overall growth strategy, along with capital expenditures, which currently represent approximately 5 percent of Group sales, the Group said.
Ermenegildo Zegna was able to exceed its expectations in the 2021 financial year and increase its turnover by 27 percent. The group, which completed its initial public offering in December 2021, which was announced in the summer, also reported a good start for the first quarter of the current financial year.