Safilo: 2018 financial results
The Board of Directors of Safilo Group S.p.A. has approved the company’s consolidated financial statements for the year ended 31 December 20181 and examined the separate financial statements for the year ended 31 December 20181, which will be submitted for approval by the shareholders at the Annual General Meeting to be held in a single call on April 30, 2019.
The Board of Directors has decided not to propose the payment of a dividend to the next Annual General Meeting.
As anticipated on January 30, 2019, net sales for 2018 equaled Euro 962.9 million, down 4.0% at constant exchange rates and 7.0% at current exchange rates compared to Euro 1,035.3 million in 20172.
In 2018, the wholesale business3 declined by 4.9% at constant exchange rates, with the key drivers being:
i) the exit of the Céline license, just partially counterbalanced by the launch of the new Moschino, Love Moschino and rag & bone licenses;
ii) the overall positive results of the group’s own core brands, driven in particular by a strong season of Polaroid in Spain and the good progress of the brand Safilo in the optical business;
iii) the broadly positive performance of the licensed brands in the contemporary and premium segment;
iv) the weak performance of sunglasses in the fashion luxury segment.
In the fourth quarter of 2018, Safilo’s net sales equaled Euro 249.1 million, up 1.3% at constant exchange rates and 1.8% at current exchange rates compared to the same period of 20172. The performance of the wholesale business3 was negative by 3.3% at constant exchange rates.
In 2018, Safilo’s economic results improved thanks to the Group’s progress on its cost saving initiatives.
2018 adjusted4 EBITDA stood at Euro 47.5 million, up 15.5% compared to Euro 41.1 million in 2017, with the margin increasing by 90 basis points from 4.0% to 4.9% of net sales.
In the fourth quarter of 2018, the adjusted4 EBITDA equaled a profit of Euro 10.3 million compared to the loss of Euro 2.1 million recorded in the same quarter of 2017.
Safilo closed the year with an adjusted4 Group net loss of Euro 26.7 million compared to an adjusted4 net loss of Euro 47.1 million in 2017.
This press release may use ‘alternative performance indicators’ not foreseen by the IFRS-EU accounting standards (EBITDA, Net debt and Free Cash Flow), and whose meaning and contents are illustrated in the specific section of the press release and in accordance with the CESR/05-178b recommendation published on 3rd November 2005.
Angelo Trocchia, Safilo Group Chief Executive Officer, commented: “The year closed substantially in line with our expectations, with a mid-single digit decline in net sales and first signs of improvement at the operating and net result level.
The second half of 2018 was a key moment for Safilo as we started to implement the new 2020 plan and we secured our financial structure through a capital increase and a new debt financing.
This was also a period in which we intently focused on shaping a new commercial organization in all our key markets, bringing back capabilities and leadership from the industry, with the aim of improving our go to market execution and putting customer service at the heart of what we do.
An intense year in which we renewed our partnership with important brands like Banana Republic, Fossil, Havaianas and Tommy Hilfiger, and we signed new agreements first with Missoni and with Levi’s® at the very beginning of 2019. In 2019, we envisage the opportunity to recover top line growth and above all a sustainable level of profitability, reflecting the progress of our cost saving projects.”