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SAFILO GROUP S.P.A. REPORTS FULL YEAR  2017 PRELIMINARY1 SALES

Full year 2017 Net Sales at Euro 1,047 million. 

Euro 155 million decline due to the Gucci license change into supply  agreement.

Going Forward Portfolio Net Sales decline driven by IT system  implementation in Padua DC.

 

Padua, January 30,  2018 – The Board of Directors  of Safilo Group S.p.A. has today examined the preliminary1 total net  sales of the Group for the financial year ended December 31st, 2017.  The full year annual results will be approved by the Board of Directors on  March 13th, 2018.

Preliminary1 figures indicate that full year sales were Euro  1,047.0 million, declining  by Euro 194 million at constant currency compared to 2016.

The reduction of sales was caused both by the  change of the Gucci license into a supply agreement, representing Euro 155  million (-12%), and by the implementation  of the new Order-to-Cash IT system in the Padua DC early in the year. That  event negatively affected deliveries, and while operationally recovered from  mid-year, impacted order taking and thus reduced sales and profit up to including  the fourth quarter, and in addition caused exceptional external costs of  approximately Euro 4 million.

Dior collections experienced a decline after several years of extraordinarily  strong growth. The total of all other licenses, as well as the Own Core Brands,  grew single digits.

The net sales of the Going Forward Brand  Portfolio decreased by 3.9% at constant exchange rates.

In the fourth quarter of 2017, Safilo’s preliminary1 total net  sales equaled Euro 249.2 million, contracting by Euro 53 million at constant  currency compared to 2016. The net effect of exiting the Gucci license and  entering the supply agreement accounted for Euro 44 million of the decrease,  while net sales of the  Going Forward Brand Portfolio declined by 3.7% at constant currency (-5.2%  excl. retail).

On the one hand, the Emerging Markets2 continued  their post Padova DC turnaround started in the third quarter, up again high double  digits. The North of Europe started its turnaround in the fourth quarter, now  also up double digit. On the other hand, the South of Europe still suffered  from the tail-end of the Padua DC issues with Fall/Winter collection sell-in  restrained by the late deliveries of the Spring/Summer collection. North  America declined driven by the Wholesale business, while the performance of the  Solstice stores in the United States showed a significant improvement (+2.7%  same store sales performance at constant exchange rates).

Safilo is expecting profitability for the year to  be impacted by the somewhat larger decline in sales than planned in the fourth  quarter leading to an adjusted3 preliminary full year EBITDA of Euro  38-40 million. 

Safilo informs that in the context of the  presentation of its full year 2017 results to the financial community, to be  held in Milan on March 14th, 2018, the Group will also provide an  update of its long-term Strategic Plan.

In the context of the natural expiration of its  Revolving Credit Facility in July 2018, the Group has started to discuss the  refinancing with its key lenders.   

Preliminary1 net sales by geographical area:

1 Preliminary net sales for 2017 are unaudited.

2 Emerging Markets comprise the regions of India Middle East & Africa  and Latin America (reported within Rest of the World), Central Eastern Europe (reported  within Europe), and Greater China and APAC (reported within Asia Pacific).

3 The adjusted EBITDA excludes certain non-recurring costs and includes  the accounting compensation for the early termination of the Gucci license.


About Safilo  Group
  Safilo Group is the fully  integrated Italian eyewear creator and worldwide distributor of quality and  trust, leader in the premium sector for sunglasses, optical frames and sports  eyewear. Design inspired and  brand driven, Safilo translates extraordinary design into excellent products  created thanks to superior craftsmanship expertise dating back to 1878. With an  extensive wholly owned global distribution network in 40 countries – in North  and Latin America, Europe, Middle East and Africa, and Asia Pacific and China –  Safilo is committed to quality distribution of its products all around the  world. Safilo’s portfolio encompasses Carrera, Polaroid, Smith, Safilo, Oxydo,  Dior, Dior Homme, Fendi, Banana Republic, Bobbi Brown, BOSS, BOSS Orange, Elie  Saab, Fossil, Givenchy, havaianas, Jack Spade, Jimmy Choo, Juicy Couture, kate  spade new york, Liz Claiborne, Love Moschino, Marc Jacobs, Max Mara,  Max&Co., Moschino, Pierre Cardin, rag&bone, Saks Fifth Avenue, Swatch,  and Tommy Hilfiger.

Listed on the Italian Stock  Exchange (ISIN code  IT0004604762, Bloomberg SFL.IM, Reuters SFLG.MI), in 2016 Safilo recorded net  revenues for Euro 1,253 million.

Contacts:

Safilo Group  Investor Relations
  Barbara Ferrante
  Ph. +39 049 6985766
  http://investors-en.safilogroup.com

Safilo Group Press Office
  Antonella Leoni
  Milan – Ph. +39 02 77807607
  Padua – Ph. +39 049 6986021

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Last updated: November 30, 2018

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