SAFILO GROUP S.P.A. APPROVES RESULTS AT SEPTEMBER 30, 2014
The third quarter of 2014 confirms growth in sales and a better bottom line thanks to an effective product mix and quality distribution The Board of Directors of Safilo Group S.p.A. – the Milan Stock Exchange listed Italian creator of totally integrated eyewear and reliable, top quality distribution – approved the results of the third quarter and first nine months of 2014. In the third quarter, Safilo confirmed the 7.4% growth in revenues at constant exchange rates already recorded in the second quarter, performance that improved the bottom line by 5.5% in the first nine months of the year. Financial results are also in line with business dynamics that characterized the first part of the year, with gross industrial margin 62.3% of billings for the first nine months thanks to continued progression in return on investment in the third quarter compared to the previous year. The lower gross operating margin (EBITDA) was again linked to investments in new commercial structures and marketing, while the bottom line for the third quarter and the first nine months was a decided improvement in the Group's net income which increased by 37.9% and 24.0% (adjusted), respectively. At end September, net financial indebtedness was 158,9 million euros, with leverage adjusted 1.3 times. Luisa Delgado, Managing Director of Safilo Group, commented: "This quarter's financial results confirm that we are taking the right strategic and operational direction that focuses on our product. It is precisely product quality and creative design that distinguishes our latest collections, as witnessed, for example, by iconic and trendsetting Dior sunglasses and the completed transformation of Fendi eyewear, the latest license in our portfolio. The quarter confirmed a very sound sales trend and we have accelerated the new commercial approach that focuses on the quality of distribution. A leap in quality with regard to leadership and expertise was accompanied by the introduction of different commercial and communication strategies for each brand. This enabled us to systematically balance markets and brand portfolios, owned and licensed brands and brands under license. In particular, the desired result has been achieved in our priority markets, with the Iberian peninsula, Germany, North America, Brazil and China leading growth while new managerial abilities are being constructed in southeast Asia. Our owned brands have responded well and Polaroid has continued to develop strongly, Smith is preparing its global expansion and we are preparing to drive Carrera further next year. Lastly, our licensed brands responded well, in particular Dior, Celine, Jimmy Choo, Boss, Max Mara, Tommy Hilfiger and Kate Spade, and we are preparing to welcome potential licenses in the future. The product mix and the quality of the distribution channels were again the main reasons for the improvement in gross industrial margins, which stood at 62.3% for the first nine months of the year. We are making significant new investments in modernizing our organization structures, primarily for standardizing and simplifying electronic sales, commercial and industrial planning, the ability to construct and enhance a brand. We are about to begin the global revision of the global supply network and the organization of product development. In this context, we are pleased to record an increase in the Group's net income for the quarter and the first nine months of the year; this was also thanks to significant improvement in financial management. We will concentrate on and confidently proceed with mid-term transformation that will achieve continued financial growth based on our plans."
