Safilo Group H1 sales rise 4.7 percent

REPORT_ In the second quarter, Safilo registered an increase in sales at constant exchange rates of 7.4 percent, taking

the first six months to 4.7 percent. In terms of economic results, the first half saw an improvement in the gross profit margin, which exceeded 63 percent for the period, while the gross profit margin for the quarter was confirmed at the highest levels achieved by the Group. There was a slight reduction in the adjusted EBITDA, accompanied by an improvement in the adjusted Group net profit, which was up approximately 23 percent both in the second quarter and the first half.

During the period under review, Safilo created a globally integrated Commercial Operation organized by worldwide key markets, channels and accounts, and re-focused business units in Latin America and China.

Commenting on the results, Luisa Delgado, CEO of Safilo Group, said, “This first semester of 2014 offers important early confirmation that we are on the right track towards mid-term sustainable profitable growth, centered on quality of product, sales & distribution, and operations. ”

For the second quarter of 2014, the Group total turnover amounted to 313.1 million euros (419.1 million dollars), up 3.9 percent. The quarterly performance has enabled to achieve a positive performance also for the first six months of the year as a whole, with net sales of 606.3 million euros (811.5 million dollars), up 1.3 percent.

Turnover for the wholesale segment increased by 4.3 percent in the second quarter of 2013, with exchange rate movements reducing growth by 3.4 percent. Wholesale turnover for the first six months of the year was up 1.6 percent. An analysis of sales by geographical area shows continuing positive sales momentum in Europe, accelerating with respect to the first three months of the year, and a recovery in the North American market after the downturn linked to bad weather in the first quarter.

In the first case, Germany and France were the best performing markets for Safilo’s wide-ranging brand portfolio as a whole, whilst the recovery in Spain and Portugal again led the way amongst the main sunglass markets, with the performance resulting above all from growth in the Polaroid brand. In the US, the quarter saw growth in the sunglass segment and a good performance from the department store channel, with Polaroid, Fossil and Boss Orange, as well as Fendi, Bobbi Brown and Jack Spade, making the most important contributions. Like-for-like sales through the 130 directly operated Solstice stores also returned to growth, rising 1.7 percent.

In the principal emerging markets in which Safilo operates sales growth was close to 18 percent, with Brazil, China and Turkey recording the highest rates of improvement. In the European market, the Group’s quarterly sales were up 9.5 percent at constant exchange rates. In the first six months of the year, overall growth in this area was 6.3 percent.

Quarterly sales in the American market were bogged down by exchange rate movements reducing growth by over 6 percent. Growth in this area was equal to 1.5 percent at current exchange rates, over 7.7 percent at constant exchange rates. In the first half, this market registered a slight downturn of 1.6 percent at current exchange rates, whilst ending the period up 4 percent at constant exchange rates. Retail sales in the US were down 0.9 percent at current exchange rates, below 2.7 percent for the first half at current exchange rates. In Asia, turnover for the second quarter was down 5.7 percent and 4.1 percent in the first half, at current exchange rates.