Safilo reports 4.3 percent net sales decline in H1

In the first half of 2018, Safilo Spa said in a statement that the performance reflected the decline of the European sunglass sales in Q2 and the continuing weakness of the business in North America, while growth in emerging markets and in the prescription eyewear business were positive highlights. Net sales of 492.2 million euros (570 million dollars), were down 4.3 percent at constant exchange rates compared to H1 2017. Adjusted EBITDA margin at 5.1 percent of sales, was the company said, was in line with the margin recorded in H1 2017, while adjusted Group net loss was 10.4 million euros (12 million dollars) compared to 6.6 million euros (7.6 million dollars) last year.

Commenting on the first half trading, Angelo Trocchia, Safilo’s Chief Executive Officer said: “Our objective is to improve the performance of our company, focusing on few, very clear, priorities. We have revised our overall expectations for 2018 and in the second half of the year we will work on making the required adjustments and changes to reignite the engines of growth, while executing our cost saving initiatives.”

Safilo’s Q2 revenues decline 19.1 percent

In the second quarter, Group total net sales equalled 241.3 million euros (279.4 million dollars), down 19.1 percent at constant exchange and 22.8 percent at current exchange rates. Gross profit in the quarter equalled 126.6 million euros (146.6 million dollars), down 25.7 percent and gross margin equalled 52.5 percent of sales compared to 54.5 percent in Q2 2017. Adjusted EBITDA was 12.1 million euros (14 million dollars), down 64.5 percent, with the adjusted EBITDA margin moving to 5 percent of sales from 10.9 percent in Q2 2017.

Safilo expects business trends to improve in the second half, while the company said, business seasonality prevents full recovery. 2018 outlook now expects a decline in net sales of approximately 3 percent at constant exchange rates compared to 2017, and an adjusted EBITDA margin of 4 percent- 5 percent of net sales compared to 4 percent in 2017.

Updating the 2020 plan, Safilo added that it expects moderate sales growth compared to 2018 and strong recovery of profitability, mainly through adjusting the Group cost structure. Net sales are expected to grow by approximately 2 percent in 2019 and 2020, while EBITDA margin is expected to increase, reaching 8 percent-10 percent of sales in 2020.

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