The 2019 of Safilo
The Board of Directors of Safilo Group S.p.A. has approved the company’s consolidated financial statements for the year ended 31 December 20191 and examined the separate financial statements for the year ended 31 December 20191, which will be submitted for approval by the shareholders at the Annual General Meeting to be held in a single call on April 28, 2020.
Net sales totaled 939.0 million euros, up 3.1% at current exchange rates and 0.9% at constant exchange rates. Revenues from the wholesale business grew by 2.8% at constant exchange rates.
Adjusted EBITDA was 51.8 million euros (5.5% of sales), compared with 57.3 million euros in 2018, while adjusted net profit was a loss of 4.0 million euros, compared with a loss of 14.0 million euros in 2018 (the 2018 results include a gain of 39 million euros from the early termination of the Gucci licensing agreement).
Group net debt of total assets amounted to €27.8 million compared to €32.9 million in 2018.
Angelo Trocchia, Safilo Chief Executive Officer, commented: “In 2019 we continued the work started in 2018, consolidating the business foundations to develop our medium term strategies and ambitions. Our efforts and projects focused on strengthening the customers’ trust in Safilo, strenuously improving customer care and service levels, while reshaping the commercial organization around relevant eyewear competences and strong local accountability. 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 wholesale2 business and restore a mid-single digit adjusted EBITDA margin through a strict cost optimization plan. In 2019, our wholesale revenues grew by 2.8% at constant exchange rates, also thanks to the positive contribution of all our core own brands Carrera, Polaroid and Smith, together posting a sales growth of 5.7% at constant exchange rates. This result is for us particularly encouraging and supportive of the strategic choice to sharpen commercial execution, focusing skills and investments in fewer, more brand-relevant markets. 2019 was a meaningful year also for our licensed portfolio, a year rich of important renewals, from Tommy Hilfiger and Kate Spade, to Hugo Boss and Marc Jacobs, and the signing of four exciting new partnerships, namely Missoni, Levis, David Beckham and Under Armour.
We consider all what we achieved last year a significant statement and confirmation of Safilo’s relevance in the eyewear licensing business, where we remain strongly committed to playing a leading role. At the profit level, we landed where we wanted to be, with an adjusted3 EBITDA margin of our Continuing Operations4 at 5.5% thanks to the savings in the costs of goods sold and to our actions to reduce overhead expenses. Our balance sheet remained strong as we closed 2019 with a net debt position of Euro 27.8 million at the end of December and an adjusted4 financial leverage of 0.5x. 2019 can be considered a transformational year for Safilo, in which we decided to exit the retail business, selling the Solstice chain in the USA on July 1st 2019, a year in which we were confronted with the LVMH decision to internalize its eyewear business, and in which we took the decision to pursue more decisively a digital transformation strategy, initiating the acquisition of new, relevant brands and capabilities. December 2019 was a turning point for our Group, when we announced the acquisition of Blenders, a fast-growing digitally native California brand, which will become part of our own core brand portfolio and the most important building block to support the development of our Direct-to Consumer capabilities and business.
The latter is a key pillar of the new Group Business Plan 2020-2024 we presented in the same month of December, which also had to give a new course to our manufacturing footprint, rescaling its Italian capacity to the future production needs of the Company, safeguarding our competitiveness and financial solidity for the long term. 2020 has started under the banner of our new strategic direction, with the acquisition in February of a new brand, Privé Revaux, another enrichment of our proprietary brand portfolio and a strong fit with our millennial-focused digital strategy aimed at strengthening a marketing model strongly focused on the consumer.
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”.