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The Board of Directors approves the results of the First Half of 2015



Positive sales momentum in core markets, partly offset  by expected softness in Asia

Strong Free Cash Flow generation and record low Net  Debt

Good progress on 2020 Initiatives – Investing for the  Future


Padua, August 4,  2015, h. 6.05pm - The Board of Directors of  Safilo Group S.p.A. – the fully integrated Italian eyewear creator, listed on  the Milan Stock Exchange – has today reviewed and approved the results of the second  quarter and first half of 2015.

Net sales for the first six months of 2015 grew by 11.3% on a reported  basis and by 1.0% at constant currencies, with the business recording an improvement  in the second quarter, up 12.0% (+1.2% at constant currencies).
  The main growth contributors were key Western European countries, North  America, MEA and Latin America.

In the first half of 2015, gross profit grew by  6.9%, having increased by 7% in the second quarter.
  Gross margin equalled 60.7% of sales in the  first six months and 60.9% in the second quarter. The contraction compared to  the comparable periods last year (63.3% and 63.7% respectively in H1 and Q2  2014), continued to be mainly driven by cost inflation increases not yet  recovered through industrial efficiencies, as the Group continues to ramp up  its cost savings initiatives.

At the operating level, adjusted1 EBITDA was down 12.6%  in the first half and 16.9% in the second quarter, with profitability reflecting the margin performance recorded  at the gross profit level.
  In the second quarter, the adjusted1  EBITDA margin also reflected the Group’s continuing investments in  the new global advertising, product campaigns and strengthening of managerial  capabilities, all of which will benefit the Group going forward.

Safilo’s adjusted1 Group’s  net result in the first six months of 2015 declined by 68.5%, impacted by financial  charges behind the net negative exchange rate differences recorded in the first  quarter and the effects of the fair value valuation of the equity-linked bonds.  In the second quarter, the adjusted1 Group’s  net result mainly reflected the operating dynamics described above.  

In  the period, Safilo generated Free Cash Flow of   Euro 51.6 million helped on the one hand by the first of three  compensation payments of Euro 30 million received in January from Kering, and  on the other hand by the ongoing improvement of net working capital management  driven by a reduction in inventory days on hand and accounts receivable DSO  (days of sales outstanding). At the end of June 2015, Group net debt further  declined to Euro 110.1 million, improving the adjusted1 financial leverage at 1.0x.  


Luisa Delgado, CEO, commented:
  “We continue on our path of investment as we  reinvent ourselves to deliver sustainable growth and higher margins.

The lower gross margin result achieved in the  first half, impacted by cost inflation, is a key focus area for our cost  savings and efficiency interventions going forward. On balance, we are  satisfied with the progress of the strategic initiatives that we are  implementing in line with our 2020 strategic plan.
  Our key geographies are recording good growth, namely  our core markets of North America and key Western European countries, as well  as the new regions of LA and MEA that we established last year, while our Asia  capability re-set is progressing to plan with a slowing decline in the second  quarter.

Our licensed brand portfolio is developing  positively following the brand re-balancing roadmap of 2020. Our marketing and  product interventions on Carrera, Polaroid and Smith including its further integration  into Safilo, are showing early results in countries where we have executed with  excellence such as Carrera in North America and Polaroid in Spain, and our  focus is on now accelerating the roll out.  

We are progressing with our supply &  distribution network re-invention focused on cost savings, inventory reduction  and consolidation of our logistics network. Reductions of inventory days-on  hand are starting to be visible, while the overall savings program is ramping  up for the second half of the year, and we have announced the first regional distribution  centres’ consolidation in the US. Finally, we are progressing well on the  capability front and are adding expert knowledge in key business areas including  Product, Supply Chain, Brand and Commercial to drive and sustain our strategic  transformation.”            

Economic and financial  highlights


H1 2015

In the first half of  2015, Group total net sales totaled  Euro 674.9 million, up 11.3% compared to Euro 606.3 million recorded in the  same period of 2014. At constant exchange rates, turnover increased by 1.0%.

H1 2015 Gross profit was Euro 409.9 million,  up 6.9% compared to Euro 383.5 million in the first half of 2014, while the gross  margin moved to 60.7% from 63.3%.

H1 2015 adjusted1 EBITDA was Euro 62.7 million, down 12.6% compared to the adjusted1 EBITDA of Euro 71.7  million recorded in the same period of 2014. Adjusted1 EBITDA  margin was 9.3% of net sales in H1 2015, compared to 11.8% in H1 2014.  

H1 2015 adjusted1 EBIT was Euro 43.1 million, down 21.0% compared to the adjusted1 EBIT of Euro 54.5  million registered in H1 2014. Adjusted1 EBIT margin was 6.4% of net sales in H1 2015, compared to 9.0% in H1  2014.

Total net financial  charges increased to Euro 22.7 million from Euro 4.5 million in H1 2014 due to  the negative impact of exchange rates differences of Euro 9.9 million in the  first semester (positive impact of Euro 3.4 million in H1 2014) and the effects  of the fair value valuation of the option component embedded in the  equity-linked bonds for Euro 4.9 million.
  In H1 2015, net  interest charges slightly increased Euro 4.2 million from Euro 4.0 million in H1  2014.

H1 2015Group adjusted1net result equaled  a profit of Euro 9.9 million, down 68.5% compared to the adjusted1 net result of Euro 31.5 million recorded in H1  2014.


Q2 2015

In Q2 2015, Safilo reported total net sales of Euro 350.6 million,  up 12.0% compared to Euro 313.1 million recorded in the same quarter of 2014,  supported by a weaker Euro. At constant exchange rates, turnover increased by 1.2%.

Q2 2015 Gross profit equaled Euro 213.4  million, up 7.0% compared to Euro 199.5 million in the same quarter of 2014. Gross  margin moved to 60.9% of net sales from 63.7%.

Q2 2015 adjusted1 EBITDA was Euro 30.2 million, down 16.9% compared to the adjusted1 EBITDA of Euro 36.3  million recorded in the same period of 2014. Adjusted1 EBITDA  margin was 8.6% of net sales in Q2 2015, compared to 11.6% in Q2 2014.  

Q2 2015 adjusted1 EBIT was Euro 19.8 million, down 28.7% compared to the adjusted1 EBIT of Euro 27.7  million registered in Q2 2014. Adjusted1 EBIT margin was 5.6% of net sales in Q2 2015, compared to 8.8% in Q2  2014.

Total net financial charges  moved to Euro 3.9 million from Euro 2.2 million in Q2 2014. Net exchange rates  differences turned slightly positive in the quarter, to Euro 0.7 million  (positive for Euro 2.4 million in Q2 2014) while  net interest charges declined to Euro 1.9  million from Euro 2.2 million in Q2 2014.

Q2 2015Group adjusted1net result equaled  a profit of Euro 7.7 million, down 49.0% compared to the adjusted1 net result of Euro 15.0 million recorded in Q2  2014.


Key Cash Flow data


In H1 2015, Free Cash Flow improved  to Euro 51.6 million compared to a negative flow of Euro 6.4 million in H1 2014  and an outflow of Euro 12.4 million at the end of 2014. This result included  the first of three compensation payments of Euro 30 million received in  January from Kering, without which free cash flow remained nonetheless positive.
  Net working capital management continued to improve in the second  quarter, freeing Euro 22.9 million compared to Euro 3.6 million in the same quarter of last year. Inventories in  the quarter decreased by Euro 9.5 million, with the inventory days on hand, on  a constant currency basis, down markedly. As far as trade receivables are  concerned, the ratio of days of sales outstanding continued to improve, recording  a sizeable decrease compared to the same period of last year.
  In H1 2015, Cash Flow for investing activities was Euro 15.4 million compared  to Euro 18.1 million in H1 2014, driven by product supply upgrades and IT  investments.

At the end of June  2015, Group net debt stood at Euro 110.1  million, down 14.2% compared to Euro 128.3 million at the end of March 2015 and  33.7% compared to Euro 166.1 million at the end of June 2014.



  H1 2015 net sales in  Europe were up 4.4% (+4.1% at constant exchange rates) to Euro 276.7 million  compared to Euro 265.0 million in H1 2014.
  Sales momentum  accelerated in Q2 with key markets like Italy, Iberian countries, Germany and  France proving increasingly solid.
  In the second  quarter, net sales reached Euro 143.8 million, up 6.1% compared to Euro 135.4  million in Q2 2014 (+5.4% at constant exchange rates). Reflecting domestic  economic conditions, Russia remained weak, excluding which second quarter European  constant currency growth amounted to 6.4%.

North America
  H1 2015 net sales in  North America reached Euro 270.5 million compared to Euro 216.1 million in H1  2014, growing by 25.1% on a reported basis and 2.9% at constant exchange rates,  thanks to broad based positive trends across the different market segments and  channels in which Safilo plays.  
  In the second  quarter, the region showed a solid and resilient performance against a more  challenging comparable period last year, with the wholesale business growing by  25.2% on a reported basis and by 2.4% on a constant forex basis.

Latin America
  H1 2015 net sales in  Latin America were Euro 25.6 million, up 8.2% compared to Euro 23.7 million in H1  2014 (+ 5.9% on a constant forex basis). The regional business experienced some  softness in the second quarter, with net sales at Euro 13.1 million, down 6.9% compared  to Euro 14.1 million in Q2 2014 (-6.0% on a constant forex basis), mainly  driven by phasing of deliveries between the two quarters.

  H1 2015 net sales in  Asia were Euro 86.7 million compared to Euro 89.6 million in the same period of  last year (-3.2% at current exchange rates, -18.0% at constant exchange rates).  Net sales in the second quarter equaled Euro 47.5 million compared to Euro 46.1  million in the quarter of last year (+3.0% at current exchange rates, -13.4% at  constant exchange rates), marking a deceleration of the decline vs. the first  quarter as the Group continued its interventions to create sustainable business  models in every Asian market.
  The capability  re-set of Greater China and Asia Pacific, and the continued subdued trading environment  in Greater China, Hong Kong and Korea, continued to weigh on the regional  performance, while growth momentum continued in Australia and South East Asian  distributor markets posted a growth in the quarter.

Rest of the world
  Net sales in the  rest of the world were Euro 15.4 million in the first six months of 2015 and  Euro 8.6 million in the second quarter, up 28.9% and 41.3% respectively at  constant exchange rates. The marked improvements compared to the same periods  last year are driven by Safilo’s strengthened presence in the Middle East  markets where investments were made in 2014 with the opening of a fully owned  subsidiary in Dubai.



1 In the first half of 2015,  the adjusted economic results do not include non-recurring items related  to commercial restructuring costs in the EMEA region for Euro 1.2 million and other  non-recurring costs for Euro 1.2 million mainly related to the consolidation  of the Group’s North American distribution network into its Denver facility.

In the first half of 2014, the adjusted economic results did not include non-recurring expenses  for Euro 3.0 million related to the voluntary exit incentives recently signed  with employees and trade unions, as the solidarity contracts come to an end,  and to some reorganization costs.


Statement by the manager responsible for the  preparation of the company’s financial documents

The  manager responsible for the preparation of the company’s financial documents,  Mr. Gerd Graehsler, hereby declares, in accordance with paragraph 2 article 154  bis of the “Testo Unico della Finanza”, that the accounting information  contained in this press release corresponds to the accounting results,  registers and records.


This  document contains forward-looking statements, relating to future events and  operating, economic and financial results for Safilo Group. Such forecasts, due  to their nature, imply a component of risk and uncertainty due to the fact that  they depend on the occurrence of certain future events and developments. The  actual results may therefore vary even significantly to those announced in  relation to a multitude of factors

Alternative Performance Indicators

The  definitions of the “Alternative Performance Indicators”, not foreseen by the  IFRS-EU accounting principles and used in this press release to allow for an  improved evaluation of the trend of economic-financial management of the Group,  are provided below:

  • Ebitda (gross operating profit) is calculated by  Safilo by adding to the Operating profit, depreciation and amortization;  
  • The net debt is for Safilo the sum of bank  borrowings and short, medium and long-term loans, net of cash in hand and at  bank;
  • The net capital employed for Safilo is the sum of  current assets and non-current assets net of current liabilities and non-current  liabilities, with the exception of the items previously considered in the net  debt;
  • The Free Cash Flow for Safilo is the sum of the  cash flow from/(for) operating activities and the cash flow from /(for)  investing activities.

Conference Call

Today,  at 6.15 pm CEST (5.15pm BST; 12.15pm EDT) a conference call will be held with  the financial community during which the results of Q2 and H1 2015 will be  discussed. 

It  is possible to follow the conference call by calling +39 06 99749000, +44 203 4271918 o  +1 646 2543365 (for  journalists +39 06  87500876)  and entering the access code 3022192.

A  recording of the conference call will be available until August 6, 2015 on 39 06 45217196, +44 203  4270598 o +1 347 3669565 (access code: 3022192).

The  conference call may be followed via webcast at  The presentation is available and may be downloaded from the Company’s website.

Financial statement as of June 30, 2015
  Please note that the  half-yearly financial report as of June 30, 2015 - containing the half-year  condensed financial statements, interim directors' report and the declaration  pursuant to article 154-bis subsection 5 of 'T.U.F.' (Testo Unico sulla Finanza  or Italy's Financial Markets Consolidation Act) – will be made available to the  public at the company's registered offices, at the central storage of regulated  information and will be published on the company's internet website, at the  address
  Furthermore, the  Auditors' report and any eventual observations made by the Board of Statutory  Auditors will be made available to the public in the same way, as soon as they  are available and in accordance with the law.

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