Safilo Q1 sales increase 2.9 percent

The Board of Directors of Safilo Group reviewed and approved the results of the first

quarter of 2013. The results showed an improvement of all key performance indicators reflecting an increase of consolidated net sales of 2.9 percent.

Growth was led by the contribution of both organic business performance and Polaroid’s sales which more than compensated the termination of the brands phased out in 2012, allowing Safilo to improve its industrial and economic profile. In the quarter, the EBITDA was 11.7 percent of sales, while the Group net profit was up 12.1 percent. At the end of March, the net debt totalled 220.4 million euros, confirming financial leverage at 1.9 times.

Commenting on the results, Roberto Vedovotto, CEO of Safilo Group said, “We started 2013 with positive results, ending the first quarter with a significant increase in our organic business. This was driven by the double-digit sales growth of the go-forward brands coupled with the strengthening of the overall performance in our key markets. On top of this, we were able to manage effectively the final exit of the Armani licences improving Safilo's economic and capital structure with no impact at top line level. In a still volatile market, we are glad with the results we are achieving, testifying the strength of our long term strategy.”

In the first quarter of 2013, Group net sales totalled 297.0 million euros compared to 288.7 million euros in the same period of 2012. Turnover in the wholesale business increased by 3.0 percent to 279.6 million euros, compared to 271.5 million euros in first quarter of 2012.

Despite the difficult economic environment in Europe, Group net sales went up 8.3 percent both at current and constant exchange rates. In particular, such results were driven by the Polaroid sales and the positive trend in organic sales confirmed by the key brands in the licensed portfolio, Gucci, Dior, Marc Jacobs, Hugo Boss and Tommy Hilfiger. The Northern European area progressed well owing to the good performance of the travel retail and key account channels while Southern regions still experienced a negative trend, mainly due to the persisting weakness of the Italian and Spanish markets. In the period, Safilo continued to achieve double-digit sales growth in the emerging markets of the area, with Russia increasing organically around 18 percent.

The American market confirmed also in this quarter a positive trend, with a wholesale turnover up 1.0 percent at current exchange rates and 2.5 percent at constant exchange rates, and retail sales at Solstice directly operated stores increasing by 1.7 percent at constant exchange rates. For Safilo, the year started positively also in the Asian markets, where go-forward brands were up double digit even though total sales were down 5.9 percent. The gross profit increased by 3.2 percent, in first quarter of 2012, while the incidence on sales improved to 60.5 percent from 60.3 percent. The operating profit (EBIT) went up 11.4 percent and the operating margin improved by 70 basis points to 8.7 percent of sales (8.0 percent in the first quarter of 2012).

The first quarter of 2013 therefore closed with Group net profit, increasing by 12.1 percent to 13.4 million euros compared to 12.0 million euros in the first quarter of 2012.