2019 adjusted profit drops at Safilo, revenues up 3.1 percent

Safilo said that it closed 2019 with the net sales at 939 million euros (1,060.4 million dollars), up 3.1 percent at current exchange and 0.9 percent at constant exchange rates. In the fourth quarter, Safilo’s net sales equalled to 230.4 million euros (260.2 million dollars), down 2.8 percent at current exchange and 4.3 percent at constant exchange rates due to expected decline of the business related to the supply agreement with Kering.

Commenting on the company’s performance, Angelo Trocchia, Safilo’s Chief Executive Officer, said in a statement: “Our economic results for the year were supportive, in line with the targets we had given ourselves and shared with the market, thanks to a strong execution plan to recover top line growth in our wholesale business and restore a mid-single digit adjusted EBITDA margin through a strict cost optimization plan. After a very promising start to the new year for all our own core brands and key licenses, we are now facing the challenges posed by the outbreak and spread of coronavirus, the impacts of which we are closely monitoring while planning for mitigation actions.”

2019 wholesale revenues rise 5.2 percent at Safilo

In 2019, the wholesale revenues increased by 5.2 percent at current exchange rates and by 2.8 percent at constant exchange rates, with the latter performance driven by the positive trends recorded in Europe, up 3.2 percent, while North America remained slightly negative by 0.6 percent, despite the business recovery achieved in the 4th quarter. The company said that the year marked significant business progress in Asia, up 19.2 percent at constant exchange rates, while sales in the rest of the world recorded an improvement of 1.1 percent, driven by a mid-single digit growth in Latin America.

The wholesale performance, Safilo added, was driven by the good results achieved by the group’s own core brands Carrera, Polaroid and Smith, overall growing by 5.7 percent at constant exchange rates, and by the positive performance of the main licensed brands.

In the fourth quarter, the wholesale revenues were up 1.8 percent at current exchange and 0.1 percent at constant exchange rates, reflecting on one side the recovery of the North American business, up 4.2 percent at constant exchange rates, and the ongoing strength of Asia-Pacific, up 8.9 percent, on the other a decrease of 4 percent in Europe. Sales in the rest of world declined by 3.4 percent at constant exchange rates, driven by some business deceleration in Mexico after the strong performance posted in the first nine months of the year.

Safilo posts 9.6 percent drop in adjusted EBITDA

The company further said, 2019 gross profit grew by 5.3 percent to 477.2 million euros (538.9 million dollars), with the margin on sales increasing to 50.8 percent from 49.8 percent in the previous year. Excluding nonrecurring item, 2019 gross profit increased by 6.8 percent, while the margin improved by 170 basis points compared to 2018. The adjusted EBITDA reached 51.8 million euros (58.4 million dollars) and a margin on net sales of 5.5 percent, recording a decline of 9.6 percent, while the adjusted operating result equalled 4.2 million euros and a margin on net sales of 0.5 percent, recording a decline of 68.6 percent.

In the fourth quarter, adjusted EBITDA equalled 7.9 million euros (8.9 million dollars), with the margin on sales at 3.4 percent compared to 13.3 million euros reported in the fourth quarter of 2018, which however included the income of 9.8 million euros for the early termination of the Gucci license. Excluding such income from the comparative period, Q4 2019 adjusted EBITDA margin improved by 190 basis points compared to Q4 2018.

For 2020, the company expects net revenues of 960 to 1,000 million euros, adjusted EBITDA margin at around 6 percent of sales and a financial leverage of 1-1.5x. The group’s estimate includes the acquisition of Blenders, signed and communicated on December 8, 2019 but does not include the acquisition of Privé Revaux, signed and simultaneously closed on February 10, 2020.

The company said, 2020 estimates furthermore do not include any potential impact deriving from the current COVID-19 (coronavirus) outbreak and spread.

Picture:Facebook/Carrera