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Q1 2016 TRADING  UPDATE

 

Padua, May 10, 2016 – The Board of Directors of Safilo Group S.p.A. has today reviewed and  approved Q1 2016 economic and financial KPIs.

As already communicated, following the entry into  force on March 18, 2016 of the Italian Legislative Decree no. 25 of 15 February  2016, which eliminates, in accordance with the European Union’s Transparency  Directive, the obligation to publish interim management statements, Safilo has  decided to release on a voluntary basis a trading update for its first quarter  and third quarter economic and financial KPIs.

 

Economic  and financial highlights

In the first quarter of 2016, Safilo’s net  sales reached Euro 301.6 million, down 7.0% at current exchange rates and 6.6%  at constant exchange rates, compared to Euro 324.3 million in the first quarter  of 2015.

Sales performance reflected on one side the  negative impact of the brands that the Group stopped/will stop servicing, on  the other the positive trends of the going forward brands portfolio, up 1% at  constant exchange rates, reflecting solid performance in core markets and a  mixed performance among emerging markets.

 

 

 

 

Net sales by geographical area

Q1 2016 sales in Europe equaled Euro 130.1 million compared to Euro 132.9 million in  the first quarter of 2015, down 2.1% at current exchange rates and 1.7% at  constant exchange rates. In the period, sales of the going forward brands  increased by 3.6% at constant exchange rates.

Q1 2016 sales in North America were Euro 127.2 million compared to Euro 132.9  million in the first quarter of 2015, down 4.3% at current exchange rates and  5.6% at constant exchange rates.
  In the period, sales in the 121 Solstice stores  in the United States (132 stores at the end of March 2015) remained weak,  falling by 15.2% at current exchange rates and by 17.0% at constant exchange  rates.
  The North America wholesale business equaled  Euro 110.4 million compared to Euro 113.1 million in the corresponding period  of last year, down 2.4% at current exchange rates and 3.6% at constant exchange  rates. Sales performance of the going forward brands portfolio was positive by  3.1% at constant exchange rates.

Q1 2016 sales in Asia totaled Euro 26.7 million compared to Euro 37.5 million in the  first quarter of 2015, down 28.7% at current exchange rates and 28.3% at  constant exchange rates. In the period, sales performance of the going forward  brands in the region was down 14.6% at constant exchange rates.

Q1 2016 sales in the Rest of the World were Euro 17.6 million compared to Euro 21.1  million in the first quarter of 2015, down 16.3% at current exchange rates and 6.0%  at constant exchange rates. In the period, sales performance of the going  forward brands in the region was positive by 2.8% at constant exchange rates.

 

Q1 2016 Gross  Profit was Euro 184.2 million, down 6.3% compared to Euro 196.6 million in  the first quarter of 2015. Gross margin increased to 61.1% of net sales  compared to 60.6% in the first quarter of 2015.

In the period, Group’s EBITDA was affected by  non-recurring, restructuring costs of Euro 5.4 million, related mostly to the  Group’s overhead cost saving initiatives announced in March.

Excluding these items, Q1 2016 adjusted1 EBITDA was equal  to Euro 25.2 million, down 22.6% compared to the adjusted1 EBITDA of  Euro 32.6 million in the first quarter of 2015. In the first quarter of 2016,  adjusted1 EBITDA margin stood at 8.4% of net sales compared to 10.0%  in the same period of 2015, mainly reflecting the negative operating leverage  stemming from the declining sales.

 

 

At the end of March 2016, Safilo’s Net Debt stood at Euro 109.7 million,  down 14.5% compared to Euro 128.3 million at the end of March 2015, while  increasing by 22.0% compared to the end of December 2015 for the normal  seasonality of the business.

 

 

Notes:

1 Q1 2016 adjusted EBITDA does not include non-recurring  costs for Euro 5.4 million of which Euro 4.2 million related to overhead cost  saving initiatives, such as for example the planned integration of Vale of  Leven (Scotland) Polaroid lens production into Safilo’s China based corporate  supply network, and Euro 1.2 million related to commercial restructuring costs  in the EMEA region.

Q1  2015 adjusted EBITDA did not include non-recurring costs for Euro 1.2 million  related to commercial restructuring costs in the EMEA region.

 

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.

Disclaimer

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.

Conference Call

Today,  at 6.00 pm CET (5.00pm GMT; 12.00pm EDT) a conference call will be held with  the financial community during which Q1 2016 trading update will be discussed.
  It  is possible to follow the conference call by calling +39 06 45217063, +44 203 4271914 o  +1 212 4440481 (for  journalists +39 06 87500876) and entering  the access code 8202244.
  A  recording of the conference call will be available until May 12, 2016 on 39 06 45217196, +44 203  4270598 or +1 347 3669565 (access code: 8202244).
  The  conference call can be followed also via webcast at http://edge.media-server.com/m/go/Safilo_Q12016.

 

 

 

 

 

 

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