Safilo has been making eyewear products for 80 years, designing manufacturing and distributing high-quality prescription frames, sunglasses and sports eyewear under licensing agreements for leading luxury and premium brands as well as under its own brands.
Safilo directly controls the entire business cycle and it is strongly oriented towards product development and design. through its team of designers, who ensure the continual stylistic and technical innovation that has always been a distinguishing feature of the Group.
Based in Padua, Italy, Safilo is the second-largest manufacturer of eyewear products worldwide in terms of turnover and the world leader in the luxury eyewear segment. It is also one of the top three sports eyewear manufacturers and distributors.
On 19th October 2009 the Board of Directors approved a recapitalization plan for the Company which was executed in connection with an investment agreement underwritten by HAL Holding N.V., Only 3T S.p.A and Safilo. In March 2010, with the positive conclusion of the plan, Multibrands Italy B.V. (a subsidiary of HAL Holding N.V.) became the reference shareholder of Safilo Group, with 37.23% of its share capital.
In April 2012, Multibrands Italy B.V.'s stake in the share capital of the Company increased from 37.2% to 42.2%, following the underwriting of a reserved capital increase, part of the financial support deal following which Multibrands Italy B.V. has provided Safilo with around two thirds of the financial means to fund the acquisition transaction of the Polaroid Eyewear business.
In January 2019, Multibrands Italy B.V.'s stake in the share capital of Safilo increased to 49.8% following the subscription of its option rights relating to the capital increase approved by the Shareholders' Meeting on October 30, 2018, as well as the subscription of the ordinary shares which remained unsubscribed at the end of the rights auction, which ended on 28 December 2018, in compliance with the commitment undertaken on 26 September 2018.
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 2017. In 2018, the wholesale business* 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 2017. The performance of the wholesale business* 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 adjusted** 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 adjusted** 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 adjusted** Group net loss of Euro 26.7 million compared to an adjusted** net loss of Euro 47.1 million in 2017.
At the end of December 2018, Safilo's Net DebtfIn January 2019, Multibrands Italy B.V.'s stake in the share capital of Safilo increased to 49.8% stood at Euro 32.9 million compared to Euro 131.6 million at the end of December 2017, with a leverage ratio of 0.7x adjusted** EBITDA.
The significant decrease in Net Debt reflected the proceeds from the share capital approved by the Extraordinary Shareholders' meeting on 29 October 2018, and launched on 3 December 2018. It excludes the portion of Euro 17.7 million received on 2 January 2019.
* The performance of the wholesale business excludes the business of the production agreement with Kering and sales of the Solstice retail chain in the USA. The Kering production agreement is reported within the Europe geographical area.
** In 2018, the adjusted economic results exclude non-recurring costs for Euro 5.8 million, mainly related to the CEO succession plan and reorganization costs in North America and Europe, and include an income of Euro 39.0 million, annual portion of the total Euro 90 million accounting compensation for the early termination of the Gucci license.
In Q4 2018, the adjusted EBITDA excludes non-recurring costs for Euro 1.3 million and includes an income of Euro 9.8 million, as pro-rata portion of the annual accounting compensation for the early termination of the Gucci license.
In 2017, the adjusted economic results excluded an impairment charge on the goodwill allocated to the Group's cash generating units for Euro 192.0 million and non-recurring costs for Euro 15.3 million (Euro 15.2 and 12.5 million, respectively on EBITDA and Net result) related to the reorganization of the Ormoz plant in Slovenia, cost saving and restructuring initiatives, and to some legal litigations. Adjusted results included an income of Euro 43 million, as accounting compensation for the early termination of the Gucci license.
In Q4 2017, the adjusted EBITDA excluded non-recurring costs for a total of Euro 10.9 million related to cost saving and restructuring initiatives and to some legal litigations and included an income of Euro 10.8 million, pro-rata portion of the annual accounting compensation for the early termination of the Gucci license.