LETTER FROM THE CEO
I am delighted to introduce Salvatore Ferragamo’s Annual Report for FY 2022, my first as CEO.
Ferragamo has an extraordinary heritage of innovation and creativity, and through close to a century of history has become a reference in the global luxury industry. I am honored to lead this wonderful organization and excited by the brand’s development potential.
The luxury market is rapidly evolving: younger consumers who want to be surprised and constantly in touch through different forms of engagement and interaction, product casualization, demand for constant innovation and creativity, digital increasingly driving purchases, and a growing attention to sustainability and social equity.
In May we outlined our mid-term strategy to re-energize the brand leveraging on our core values: creativity, craftsmanship, attention to people, the planet and its resources, as well as constant inspiration from our fabulous heritage.
The evolution of the product is at the heart of the strategy to recruit new audiences. In March we welcomed Maximilian Davis as Ferragamo’s new Creative Director. Maximilian is one of the most brilliant talents of his generation, with a powerful aesthetic, exceptional clarity of vision and level of execution. His debut fashion show in September generated strong endorsement from trade, press and celebrities alike. Since September, we revealed our new branding with a new logo set between classicism and modernity, an iconic, distinctive red color, and a complete new set of packaging.
We evolved the way we communicate with our customers, building a sense of community by updating our language, establishing a bold, clear creative vision and tone of voice to translate across all touchpoints, providing impactful, digitally driven content. With digital innovation and engagement as a clear priority, in August we finalized an important agreement with Farfetch, to strengthen significantly our digital capabilities and target a new, young clientele. Farfetch is the ideal partner to boost Ferragamo’s digital prowess and omnichannel innovation, fueling our plans to accelerate our growth.
A major enabler of our strategy is our people, and a great focus is placed on the enhancement and development of our precious human capital. Throughout the year we have developed existing talents and attracted new ones, built a strong management team, while fostering a result-oriented and talent-based culture. We have modeled the organization to the strategy and to the focus on luxury consumers and a strong management team is now in place to lead in all geographies and sectors of activity.
Significant progression on all ESG dimensions is a key component of the strategy. Reduction of carbon emissions, the introduction of more sustainable materials, circular economy, and the acceleration of our D&I journey are the key pillars on which we will focus our efforts.
FY 2022 PERFORMANCE
I am satisfied with the results achieved this year, both in terms of revenues and profitability. Notwithstanding our strategic refocusing, 2022 has been another year of growth in revenues, amid a complex and volatile macroeconomic environment.
Our focus this year was to start investing to re-energize the brand, prioritizing the quality of sales and gross margin and optimizing the WHL channel, while accelerating investments in the second part of the year, especially in marketing and communication.
• Total Revenues reached 1,252 million Euro, up 10.2% at current exchange rates (+5.7% at constant exchange rates) vs. Full Year 2021.
• Gross Profit increased by 15.4% vs. FY 2021, to 901 million Euro, with incidence on Revenues up 320 basis points, moving to 72.0%, from 68.8% in FY 2021.
• Operating Costs amounted to 773 million Euro, +21.3% at current exchange rate vs. FY 2021, with marketing and communication expenses reaching 92 million Euro vs. 66 million Euro in FY 2021 (+38.7%), at 7.4% of Revenues from 5.8%.
• The Operating Profit (EBIT) was 128 million Euro vs. 143 million Euro in FY 2021 and the Net Profit for the period, including the Minority Interest, was 65 million Euro vs. 81 million Euro in FY 2021.
In 2022 we have laid out our strategy and worked at pace to build the platform for growth acceleration and are fully on track with our strategic priorities.
2023 will see the introduction in the market of our newly designed collections which will progressively increase their share of the total product offer.
I am particularly encouraged by the early results of the Spring-Summer’23 collection, launched in our stores in February, and excited about the success of our Fall-Winter’23 Fashion Show which has made a giant leap in the definition of our new, modern identity.
I wish to thank all our employees and partners for their passion, commitment, and the invaluable contribution to the project. I am very proud of what we have done so far and ever more excited about the opportunity which lays ahead.
Salvatore Ferragamo S.p.A.
Managing Director and General Manager