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Q3 and First 9 Months of 2019 Trading Update


Q3 2019  continues the Group’s positive momentum in sales and cost reduction

Highlights  in the first 9 months of 2019:

  • Net sales of the  continuing operations reached Euro 708.7 million, up 5.2% (+2.7% at constant  exchange rates), with the wholesale revenues1 up 6.4% (+3.7% at  constant exchange rates);
  • Adjusted2 EBITDA  (pre-IFRS 16) of the continuing operations stood at Euro 43.9 million, with a  margin on sales of 6.2%. This result is in line with that recorded in the first  9 months of 2018 which however included the income of Euro 29.3 million for the  early termination of the Gucci license.

Padua, November 12 2019 – The Board of Directors of Safilo  Group S.p.A. has today reviewed and approved Q3 and first 9 months 2019  economic and financial key performance indicators.

Angelo Trocchia, Safilo Chief Executive Officer, commented:

“In the third quarter of the year, we continued the  improvement of our results, working with determination on those priorities aimed  at enhancing our Group’s assets, in particular strengthening our commercial capabilities  and enhancing our digital agenda, two areas in which our strategy is focused on  the customer and on a continuous and ever closer connection with the final  consumer. Meanwhile, we progressed also with actions to improve the efficiency of  our production processes and overhead cost structures.
  The quarter brought significant  results, we renewed two strategic partnerships relating to the Boss and Hugo  licenses and the supply agreement with Kering Eyewear, and we prepared for the  launch of our new licenses David Beckham, Levi’s and Missoni.
  While we move into a complex  business and industry context in which we plan for the medium and long term to  build top and bottom line, the quarter is indeed a further confirmation of the quality of the work  we undertook, both in terms of top line, with our core wholesale1  business improving by 2.8% at constant exchange rates, as well on the economic  front, achieving an adjusted2 EBITDA of Euro  9.7 million.
  We look at the current year as a transition year for building the foundation  to face the challenges and opportunities that lie ahead.”   

Safilo closed the first 9 months of 2019 with the  net sales of the Continuing Operations at Euro 708.7 million, up 5.2% at  current exchange rates and 2.7% at constant exchange rates. The performance was  positively influenced by a 3.2% growth of the European market, and by the  recovery of the main emerging markets, particularly significant in Asia Pacific  which ended up 22.5%. Turnover was down 2.0% at constant exchange rates in  North America.
  The wholesale1 business increased by  6.4% at current exchange rates and by 3.7% at constant exchange rates, with  Europe up 5.6%.


In the 3rd quarter of 2019, the net  sales of the Continuing Operations equaled Euro 212.8 million, up 2.2% at  current exchange rates and substantially in line with the same period of last  year at constant exchange rates (+0.1%).

The quarterly performance of the top line was  influenced by the expected decrease, starting from the second part of the year,  of the business relating to the production agreement with Kering, while the  wholesale1 revenues recorded a growth of 5.2% at current exchange  rates and of 2.8% at constant exchange rates. The latter result was driven by a double-digit revenue growth in Europe,  supported by a double-digit growth also of the main distribution channels in Asia  and core markets in Latin America.
  The North American business, on the other hand,  recorded a 7.7% drop at constant exchange rates, mainly reflecting the consolidation  of all the North American logistic activities in the new Denver warehouse, a start-up  temporarily affecting the performance of Smith sport products.
The quarterly performance also confirmed the  good growth of the Carrera and Polaroid brands and the positive trends of the  main licensed brands.


2019 Group’s results are commented on a pre-IFRS 16 basis in order to support  the transition and to allow proper comparison with the previous periods.



On a pre-IFRS 16 basis, Safilo closed the first  9 months of 2019 with an adjusted2 EBITDA  of the Continuing Operations of Euro 43.9 million, in line with the result  recorded in the first 9 months of 2018 which however included the income of Euro  29.3 million for the early termination of the Gucci license.
  During the period, the gross profit reached Euro 375.1 million, with a margin on sales of  52.9% and an increase of 8.8% compared to the same period of the previous year.
  The industrial margin improved by 170 basis  points thanks to higher production efficiencies, while over 200 basis points were  recovered at the operating level, thanks to the expected reduction of overhead costs.  In the same period, the Group continued to increase its investments in marketing  and sales activities to support the development of its brands.

On a pre-IFRS 16 basis, in the 3rd  quarter of 2019 the adjusted2 EBITDA  of the Continuing Operations equalled Euro 9.7 million, with a margin on  sales of 4.6%. This performance compared to Euro 13.7 million recorded in the  same quarter of 2018, a result which however included the income of Euro 9.8  million for the early termination of the Gucci license.
  On an organic basis, the Group’s operating  performance therefore recorded another significant progress, which reflected some  improvement of the gross profit, up 3.7% to Euro 109.0 million and a further  recovery in terms of lower overhead costs.

On a pre-IFRS 16 basis, the Group net debt at the end of September 2019 equalled  Euro 24.3 million compared to Euro 32.9 million at the end of December 2018 and  to Euro 3.9 million recorded at the end of June 2019. At the end of September  2019 the financial leverage stood at 0.5x.

  The  Company aims to present a new Group Business Plan on December 11, 2019 during a  presentation to the financial community.



1 The wholesale business excludes the business of the  production agreement with Kering, reported within the geographical area of  Europe.

2 In the first 9 months of 2019, the  adjusted EBITDA of the Continuing Operations excludes non-recurring costs for Euro 10.4  million (Euro 5.4 million in Q3 2019) due to restructuring expenses related to the  ongoing cost saving program.

In the first 9 months of 2018, the adjusted EBITDA of the Continuing  Operations excluded non-recurring costs for Euro 4.4 million (Euro 1.0  million in Q3 2018) mainly  related to the CEO succession plan and reorganization costs in North America, and  included an income of Euro 29.3 million  (Euro 9.8 million in Q3 2018) for the early termination of the Gucci license.

3 In the first 9 months of 2019,  the adjusted EBITDA of the Total Operations also excludes non-recurring costs for Euro  1.3 million related to the retail  discontinued operations on July 1, 2019.






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 adding to the Operating profit, depreciation  and amortization;
  • The net debt is  the sum of bank borrowings and short, medium and long-term loans, net of cash  in hand and at bank.

Conference Call

Today,  at 6.15 pm CET (5.15pm GMT; 12:15pm EST) a conference call will be held with  the financial community during which the 3rd quarter and first 9  months 2019 trading update will be discussed.
  It  is possible to follow the conference call by calling +39 06 87502026, +44 844 5718892,  +33 1 76700794 or +1 631 5107495 (for journalists +39 06 87500896) and entering the access code: Safilo.
  A  recording of the conference call will be available from November 12 until November  14, 2019 on +39  06 99721048, +44 844 5718951 or +1 917 6777532 (access code: 6484256).
  The  conference call is also available via webcast:

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