International Design Group SpA

Overview Key strengths Key risks Portfolio of well-known owned brands including Flos, Louis Poulsen, B&B Italia, and the licensed business Fendi Casa. Fragmented and competitive high-end design market, subject to discretionary spending. Premium price positioning translating into an ability to manage inflationary pressures and preserve S&P Global Ratings-adjusted EBITDA margin at 21% in 2022. Limited product diversity of sales, concentrated in the high-end lighting segment, accounting for 60% of total sales as of 2022. Expanding direct-to-consumer channel (46% of total sales in 2022), thanks to new store openings and e-commerce penetration also through recent acquisitions. Execution risk behind growth initiatives, such as the management of the new license business, direct-to-consumer expansion, and diversification in Asia-Pacific. Well diversified geographic footprint in

...S&P Global Ratings expects International Design Group SpA (IDG) will post revenues growth of 2%-4% to 860 million-880 million in 2023 and organic growth of 4%-6%, starting in 2024. IDG's sales should benefit from the full effect of price increases implemented in 2022, some backlog for high-end furniture and lighting products in the residential segment, and retail network expansion with new mono-brand and new directly operated store openings together with the development of Fendi Casa-licensed business in the attractive Asian market. Our 2023 top line projections also consider the full contribution from Designers Company A/S (DC), which the group acquired in May 2022. However, we believe that weakening macroeconomics and decreasing consumer confidence in Europe will negatively affect the group's growth prospects this year, and especially impact those brands that are significantly exposed to the Nordics region, such as Menu, by Lassen, and Louis Poulsen, the latter down 25.1% quarter-on-quarter...

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