Brunello Cucinelli — Earnings Release 2024

Jul 11, 2024

Informazione Regolamentata n. 1264-28-2024	Data/Ora Inizio Diffusione 11 Luglio 2024 17:36:35		Euronext Milan
Societa'	:	BRUNELLO CUCINELLI
Identificativo Informazione Regolamentata	:	193312
Utenza - Referente	: BRUNECUCIN04 - Leonardi
Tipologia	:	REGEM
Data/Ora Ricezione	:	11 Luglio 2024 17:36:35
Data/Ora Inizio Diffusione	:	11 Luglio 2024 17:36:35
Oggetto	:	Preliminary Revenues 1H 2024
Testo del comunicato

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Press Release

CASA DI MODA BRUNELLO CUCINELLI: the Board of Directors has examined the preliminary turnover figures for the first half of 2024.

• Revenues of €620.7 million, with great growth in sales of +14.1% at current exchange rates (+14.7% at constant exchange rates) compared to the first half of 2023;
• All geographical areas are very, very positive: Americas +19.4%, Europe +9.0%, Asia +14.3%;
• Significant increase in revenues in both sales channels: retail +14.7%, wholesale +13.1%;
• The particularly significant results for the first half of the year and the very promising order book for Fall-Winter 24 mean we can confirm expectations of very solid growth in turnover of around +10% for 2024, with fair, balanced and sustainable profits;
• The very important project to double our factory in Solomeo, which will end in 2025, continues, with significant investments in the two-year period 2024-2025, which will guarantee production capacity for the next decade and will support the plan of doubling of turnover expected by 2030;
• Among the important events of the first semester we like to highlight "II° Universal Symposium on Soul and Economics in Solomeo": after the first edition in 2019, Solomeo saw some of the leading international exponents in the field of Artificial Intelligence, technology and science meet again to enter into dialogue on the great theme of the relationship between technology and humanism; attendees included Reid Hoffman, a world-renowned entrepreneur acknowledged as one of the founding fathers of generative artificial intelligence.

Brunello Cucinelli, Executive Chairman and Creative Director of the Casa di Moda commented:

The first half of the year closed reporting excellent results in terms of turnover, and given the quality of sales, we expect the same in profits. We feel that the brand is experiencing a very positive momentum in terms of global image. This leads us to confirm our 2024 projected sales growth of around 10%, as well as adequate profits.

After three years of meticulous work, in a few days we will present our new corporate website to the world press in Milan, a project imagined and built together with Artificial Intelligence, which is probably one of the first in the world. For us it is something extraordinary that will enable our employees to look at Artificial Intelligence with excitement, confidence and familiarity.

As the men's spring summer 2025 sales campaign is almost over and the women's has started, given the orders in our portfolio and the excellent Spring Summer 2024 sell-outs, we envisage for 2025 a healthy growth of around 10%.

Solomeo, 11 July 2024 – The Board of Directors of Brunello Cucinelli S.p.A. – an Italian Casa di Moda operating in the luxury goods sector, listed on the Italian Stock Exchange (Euronext) – today reviewed its preliminary turnover for the first half of 2024, in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.

The first half of 2024 ended with extremely positive results, which fill us with gratitude towards our customers, partners and human resources, with a turnover of €620.7 million, up 14.1% at current exchange rates (+14.7% at constant exchange rates).

***

The sales results enabled us to achieve revenues of €312 million in the second quarter, up on €309 million in the first quarter.

These encouraging figures represent a clear signal of the sustainability and concreteness of our plans for growth in 2024, which we expect to be at around +10%. In the second half of 2024, we carefully consider the significant comparative basis of 2023, when we had reported the highest revenue ever in the second half of the year.

A solid and balanced contribution was made in all geographical areas (Americas +19.4%, Europe +9.0%, Asia +14.3%) and distribution channels (Retail +14.7%, Wholesale +13.1%).

We believe we can say that these impressive results clearly confirm how our Casa di Moda is perceived overall in every geographical area as a Ready to Wear company but also as a lifestyle company, with a positioning in the highest segment of the luxury sector, with exclusive offerings that meet the demand for rare products of the highest quality.

We are honoured by clients', journalists' and multi-brands' appreciation of our concept of "gentle luxury, a symbol of beauty within measure", which we attempt to infuse into all our creations, from ready-towear lines to accessories, seeking a balance of style between contemporaneity and sober taste.

We found a growing appreciation from new clients who, together with those already loyal to the brand, contributed to the structural increase in demand for exclusive, special, contemporary products, with balanced distribution in all markets: Americas, Asia, Europe.

The importance of local client is confirmed, with the positive contribution of tourism, characterised by a greater diversification of nationalities. Especially in Europe, there is a steady presence from US customers, as well as an increase in Asian customers.

The sell-out for the Spring-Summer 2024 collections were very positive, with major deliveries at the beginning of the year and reassortments during the season, which affected both the retail and wholesale channels. The new Fall-Winter 2024 collections are also witnessing very encouraging results, making a considerable contribution in H1 2024.

We believe that clients for luxury goods, when they comment that prices and profits are not always justified, are paying more and more attention to the level of profits generated, to companies' behaviour, to their manufacturing practices, to the conditions for manual workers from a moral perspective, to wage levels and to conditions in the workplace.

These aspects form some of the foundations for our idea of Humanistic Capitalism and Human Sustainability, which we imagine will also gain increasing relevance in the coming years.

Doubling of the Solomeo factory and opening of new manufacturing facilities in Italy

We believe it is essential to accompany growth plans for the medium to long term with a solid project that will enable us to increase artisan production further, with major investments in the two-year period 2024-2025, guaranteeing manufacturing capacity for the next decade and supporting the plans to double turnover, as expected by 2030.

The investment plans consist primarily of doubling of the Solomeo factory, by adding a new facility that will be built on the outskirts of the Borgo, in a former industrial complex that has been fully recovered and redeveloped.

This major restoration work will ensure we do not use untouched land, in line with our Casa di Moda's vision of preserving the environment and protecting the landscape, while strengthening the relationship with the community.

Further major investment is focused on opening new manufacturing facilities in Italy to produce men's outerwear and tailored suits, within hotbeds of excellence in artisan tailoring: the factories in Penne, Abruzzo and recently Gubbio in Umbria, commented as follow by Brunello Cucinelli:

"…in Gubbio, too, we will build a small factory with a splendid view of the medieval citadel, where it is possible to work in harmony with Creation. I am very confident in the value of beautiful, well-made, Made in Italy garments that can be handed down as a legacy. Perhaps in the near future the issue will not be who will buy these special garments, but rather whose skilful hands will make these small masterpieces".

In our opinion, welcoming new specialist figures in manufacturing excellence is a prerequisite to face the long-term balanced growth plan with integrity and solidity, while maintaining the essential traits that we believe distinguish us on the market for great attention to quality, craftsmanship and taste.

The investments in artisan production highlight the absolute importance and fundamental role we have always attributed to Italy, where our approximately 400 artisan workshops (small craft enterprises) are based. Together with our directly managed manufacturing units, they contribute to the creation of our collections offering.

By enhancing the creativity of the product, the quality of the goods, and the reliability and timeliness of deliveries, these artisan workshops contribute to achieving a complement of about 60% genuine manual skills in our collections (with needle, thread and scissors), which has increased even further in recent years.

Our small craft enterprises are true partners, fully integrated into our manufacturing process, and can breathe life into the collections we develop in-house with our team of creatives and workers.

In recent months, we have further strengthened this manufacturing capacity by means of dimensional growth of the workshops we currently collaborate with, also through new hires of young people favored by our company, by increase in the share of work reserved for us by that part of the façonists who operate under a multi-commissioning regime, and finally thanks to new highly specialized laboratories that are beginning to work together with us.

In the last year, our numbers of small craft enterprises have therefore increased, as have the number of artisans working there, 75% of which are located in Umbria with the remaining 25% in other districts of excellence around Italy, specifically selected for their individual production.

II° Universal Symposium on Soul and Economics in Solomeo

From 23 to 25 May this year, the Second Universal Symposium on Soul and Economics was held in Solomeo, in continuity with the first edition in May 2019.

The three days were an opportunity to return to reflect in depth on the relationship between ethics and artificial intelligence, and between humanism and technology.

The meeting involved a large group of leading international experts in artificial intelligence and other fields such as humanism, art, science, nature.

Attendees included Reid Hoffman, a world-renowned entrepreneur acknowledged as one of the founding fathers of generative artificial intelligence, who was awarded an honorary PhD in Human Sciences by the University of Perugia for: "the fundamental contribution he has made to the development of this new technological frontier of humanity".

Once again, we would therefore like to thank all the attendees, including Laurene Powell Jobs (US philanthropist;; founder and president, Emerson Collective), Nicholas Thompson (CEO, The Atlantic), James Manyika (SVP, Google Technology and Society), Fei-Fei Li (Co-Director, Stanford Institute for Human-Centered Artificial Intelligence), Refik Anadol (world-renowned artist), Michael Evans (President, Alibaba), Arvind Krishna (CEO, IBM), Uzodinma Iweala (prominent African writer), Kevin Scott (CTO, Microsoft), Pieter van der Does (CEO, Adyen), Jacqueline Novogratz (prominent US philanthropist; CEO, Acumen).

Brunello Cucinelli commented on the event as follows:

"The three-day 'Second Universal Symposium on Soul and Economics in Solomeo' was a memorable experience. Our beloved hamlet hosted some of the top international experts in AI and other fields such as humanism, art, science and nature, such as Laurene Powell Jobs, who we welcomed as a kind of godmother of the Symposium, and many other esteemed friends […]. I believe that these days will be remembered forever by all attendees as an experience fostering their human and spiritual growth; and I hope that this Symposium will enlighten those who will read the Charter summarising its contributions. As often reiterated, technological innovation is a blessing from Creation, and if we know how to combine it with humanistic values, I think it will help us to increase the fruitfulness of the expressions of human creative genius".

***

Revenues by Geographical Area

	1H 2024	% on	1H 2023	% on	YoY
	Eur '000	on total	Eur '000	on total	Change %
Italy	68,118	11.0%	60,888	11.2%	11.9%
Europe (excl. Italy)	152,955	24.6%	141,881	26.1%	7.8%
Total Europe	221,073	35.6%	202,769	37.3%	9.0%
Americas	225,644	36.4%	189,007	34.7%	19.4%
Asia	173,996	28.0%	152,166	28.0%	14.3%
Revenues	620,713	100.0%	543,942	100.0%	14.1%
YoY Change at constant exchange rates					14.7%

Europe: revenues of €221.1 million, up 9.0% on H1 2023, with a weighting of 35.6%.

All markets in Europe show very solid demand for top-end luxury, with a constant presence of local and tourists, both American and Asian, taking place both in the main luxury capitals and in the most exclusive resort locations.

In Italy important inauguration of the new location of our boutique in Venice, within the beautiful setting of the historic Palazzo della Borsa and Chamber of Commerce, a space designed to create a stimulating dialogue between the timeless taste of art and the contemporary elegance of our brand's style.

Americas: revenues of €225.6 million, up 19.4% compared to the first six months of 2023, accounting for 36.4%.

The dynamics recorded in the period throughout North America – one of the reference markets for our brand – were very positive, with confirmation of the rising demand for exclusive products, of great quality and a very high level of craftsmanship.

We have noted this increasing trend in the major cities of the continent, but also in resort locations and provincial cities, where the uptick in customer numbers in the exclusive Luxury Departments in which we hold concessions stand out most of all.

Asia: sales of €174.0 million, up 14.3% compared to H1 2023, accounting for 28.0%.

The half-year result throughout the Asian market was highly significant, with very solid results in all areas, including China, Japan, South Korea and the Middle East.

Very nice confirmation of the growth trend in China that, from one period to the next increasingly establishing itself as an important market with very high potential for our Casa di Moda. We are proud to note rising loyalty among local customers to the brand's taste and identity, strengthening a bond that increasingly confirms the identification of the Brunello Cucinelli style with an exclusive positioning in the highest end of the market.

Revenues by Distribution Channel

	1H 2024	% on	1H 2023	% on	YoY
	Eur '000	on total	Eur '000	on total	Change %
Retail	395,227	63.7%	344,648	63.4%	14.7%
Wholesale	225,486	36.3%	199,294	36.6%	13.1%
Revenues	620,713	100.0%	543,942	100.0%	14.1%
YoY Change at constant exchange rates					14.7%

Retail channel: revenues of €395.2 million, up 14.7% compared to Q1 2023, with a relative weighting of 63.7%.

The Retail channel saw positive H1 results in all geographical areas, with solid growth in Q2 confirming the upward trend of the first part of the year.

The number of retail boutiques on 30 June 2024 was 126, compared to 125 on 31 December 2023, with the important opening in the Miami Design District in May (there were 124 boutiques on 30 June 2023).

Wholesale channel: revenues of €225.5 million, up 13.1% compared to H1 2023, with a relative weighting of 36.3%.

Very attractive sales results for the entire half year; positive contribute in the second quarter of reassortments and sell-outs of the Spring-Summer 2024 collections, on top of important sales in the first part of the year.

Strongly supportive feedback from multibrand partners for the Fall-Winter 2024 season, with significant delivery requests and initial sell-outs highlighting end-customer appreciation.

The presentation of the Spring-Summer 2025 collection, during Pitti Uomo in June and the following Men's Fashion Week in Milan, attracted very positive comments from the specialized press, which anticipated a very satisfying sales campaign for the wholesale channel.

***

Our expectations:

The very good sales in the first half of the year, order intake and initial sell-outs for Fall-Winter 2024 make the forecast of a nice sales growth in 2024 around +10% very concrete, with a fair, balanced and sustainable profit, which has always belonged to the philosophy of our Casa di Moda.

The half-year ended with orders starting to be taken for the new Spring-Summer 2025 Menswear Collection, after the presentations at Pitti Uomo in Florence and during Milan Fashion Week.

We are very grateful for the considerable positive feedback from multibrand partners and specialized press; our growth plans for 2025 also seems increasingly realistic, aiming at an increase in turnover of approximately +10%.

Finally, as part of our long-term growth plans, we expect turnover to double by 2030.

This intention is accompanied by a significant investment plan for the expansion of artisan production capacity; specifically, in the two-year period from 2024 to 2025, further investments will be focused on doubling the size of our Solomeo factory and opening new manufacturing facilities in Italy, guaranteeing production capacity for the next decade.

***

Appointment of Vice-Presidents of the Board of Directors

Today, the Board of Directors, following the amendments to the Articles of Association approved by resolution of the Extraordinary Shareholders' Meeting of 23 April 2024, appointed Camilla Cucinelli and Carolina Cucinelli as Vice-Presidents of the Board of Directors, granting them the powers set out in the Articles of Association.

Co-opting of a new Director and additions to the membership of the Control and Risk Committee and Remuneration and Appointments Committee

The Board of Directors of Brunello Cucinelli S.p.A., with the favourable opinion of the Remuneration and Appointments Committee and with a resolution approved by the Board of Statutory Auditors, pursuant to Art. 2386 of the Italian Civil Code and Art. 14.8 of the Company Bylaws and in compliance with gender quotas, has co-opted Ms Katia Riva as the Company's new non-executive Director, to replace the independent non-executive Director Emanuela Bonadiman who resigned on 13 June 2024. It is recalled that, on the occasion of the renewal of the Board of Directors which took place with the shareholders' resolution of April 27, 2023, Ms. Bonadiman was appointed from the minority list presented by some institutional investors under the aegis of Assogestioni. With the appointment of Ms. Katia Riva, the Company's Board of Directors has accepted the invitation made by the Assogestioni Managers Committee which, with a letter dated July 1, 2024, submitted the relevant candidacy for its independent evaluation.

The Board of Directors has ascertained that there are no grounds for the ineligibility or incompatibility of Ms Katia Riva and that she meets the requirements of integrity and independence laid down in current legislation and in the Corporate Governance Code. It was also ascertained that Director Katia Riva possesses adequate knowledge and experience in accounting, financial, risk management and remuneration policies.

Ms Katia Riva has accepted the appointment and will remain in office until the next Shareholders' Meeting.

To the best of the Company's knowledge, Director Katia Riva holds no shares in Brunello Cucinelli S.p.A.

The new Director's CV can be consulted on the Company's website, here.

In addition, following the resignation of Ms Emanuela Bonadiman (former Chair of the Remuneration and Appointments Committee, and a former member of the Control and Risk Committee), the Board of Directors of Brunello Cucinelli S.p.A., with the support of the Remuneration and Appointments Committee, appointed Ms Katia Riva as a member of the Control and Risk Committee and of the Remuneration and Appointments Committee; Ms Chiara Dorigotti was also appointed as Chair of the Remuneration and Appointments Committee.

The Company's Control and Risk Committee therefore consists of the independent Directors Maria Cecilia La Manna (Chair), Chiara Dorigotti and Katia Riva; in turn, the Remuneration and Appointments Committee consists of the independent Directors Chiara Dorigotti (Chair), Ramin Arani and Katia Riva.

***

Pursuant to and for the purposes of Article 154-bis(2) of Legislative Decree No. 58 of 1998, the Financial Reporting Officer, Dario Pipitone, hereby declares that the information contained in this press release corresponds to the documented results, as well as accounting books and records. It should be noted that the turnover figures in this press release have not been audited.

This press release may contain forward-looking statements concerning future events and operating, economic and financial results of the Brunello Cucinelli S.p.A. Group. These forecasts have by their very nature a component of risk and uncertainty, as they depend on the occurrence of future events and developments.

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Brunello Cucinelli S.p.A. is an Italian Casa di Moda founded in 1978 by the eponymous designer and entrepreneur and is listed on the medium and large companies stock exchange (MTA) of Borsa Italiana. Long rooted in the medieval Umbrian hamlet of Solomeo, the company is guided by an entrepreneurial philosophy that focuses on the major themes of "Harmony with Creation", respect for the dignity of every living being, and the pursuit of balanced growth in full accordance with the ethical values embodied in the founding principles of Humanistic Capitalism and Human Sustainability.

Initially specialising in the production of cashmere of the highest quality, the brand has expanded to include a lifestyle and ready-to-wear and casual chic offer, expressing a refined, discreet, yet versatile and everyday style. The collections seek to interpret the most authentic spirit of the Italian way of life, recreating with passion and ethics a taste perpetually balanced between elegance, creativity, contemporaneity and craftsmanship, one rooted in the values of tailoring and high craftsmanship peculiar to the Italian tradition and the Umbrian region, and deftly combined with an emphasis on innovation and contemporary style. Through a path of healthy, fair and sustainable development, the company seeks to generate profits with integrity and harmony, while respecting the moral and economic dignity of everyone who works for our company.

***

Investor Relations & Corporate Planning Pietro Arnaboldi Brunello Cucinelli S.p.A. Tel. +39 075/69.70.079 Media Vittoria Mezzanotte Brunello Cucinelli S.p.A. Tel. +39 02/34.93.34.78 Corporate website: www.brunellocucinelli.com

Fine Comunicato n.1264-28-2024	Numero di Pagine: 10
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