Safilo: the latest economical results

Safilo closed the third quarter of 2018 with total net sales of Euro 221.5 million, 9.0% lower at current exchange rates and 8.4% at constant exchange rates. Business trends in North America and Europe remained soft, similar to those reported in the first half of the year, while emerging markets turned negative, also due to a challenging comparison base.
On the other hand, the group progressed on the cost saving initiatives outlined in its business plan, with the economic performance of the period benefitting of higher efficiencies at the industrial level and of the ongoing savings in overhead expenses which helped to counterbalance a negative operating leverage and impact from foreign exchanges.
In the third quarter, gross margin equaled 50.7% of net sales, up 120 basis points compared to the 49.5% recorded in the same period of last year (+180 basis points at constant exchange rates), while adjusted1 EBITDA margin stood at 5.4% of net sales, down 90 basis points compared to 6.3% in the third quarter of 2017 (in line with last year at constant
exchange rates).

Overall, in the first nine months of 2018:
– Net sales equaled Euro 713.7 million, 9.7% lower at current exchange rates and 5.6% at constant exchange rates, compared to Euro 790.5 million in the first nine months of 2017;
– Gross profit reached Euro 366.5 million, 10.1% lower compared to Euro 407.6 million in the same period of 2017. Gross margin stood at 51.3% of net sales compared to 51.6% in the first nine months of 2017;
– Excluding Euro 4.4 million of non-recurring costs, adjusted1 EBITDA equaled Euro 37.2 million (5.2% of net sales) compared to Euro 43.2 million (5.5% of net sales) in the first nine months of 2017;
– At constant exchange rates, 9M 2018 gross margin and adjusted1 EBITDA margin were up 20 basis points compared to the first nine months of 2017;
– Safilo’s net debt stood at Euro 144.2 million, including the third and last compensation payment of Euro 30 million from Kering received at the end of September 2018. Net debt compared to Euro 135.9 million at the end of September 2017 and Euro 171.1 million at the end of June 2018.

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