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Safilo Group S.P.A. Reports Preliminary Full Year 2021 Key Performance Indicators

2021 net sales grow by 7.5% vs 2019 at constant currencies (+26.3% vs 2020) thanks to 10% organic2 sales growth, an effective brand portfolio overhaul strategy and online sales reaching 13.4% of total sales

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(PRESS RELEASE) PADUA — The Board of Directors of Safilo Group S.p.A. has examined the Group’s preliminary key performance indicators for the financial year ended December 31, 2021. The full year annual results will be approved by the Board of Directors on March 15, 2022.

In 2021, Safilo’s preliminary net sales amounted to Euro 969.6 million, up 26.3% at constant exchange rates and 24.3% at current exchange rates compared to Euro 780.3 million recorded in 2020, a year heavily penalized by the lockdowns and business restrictions imposed to contain the Covid-19 pandemic.

This strong business rebound also allowed the Group to significantly exceed the net sales registered in 2019, recording a growth of 7.5% at constant exchange rates and of 3.3% at current exchange rates. Organic sales2 represented the main growth driver compared to the pre-pandemic business levels, up around 10% at constant exchange rates versus 2019, while the brand portfolio overhaul strategy implemented over the last two years enabled the Group to effectively compensate the business decline deriving from licenses terminated at the end of 2020 and at the end of June 2021 with new proprietary and licensed brands in the portfolio.

In 2021, the share of the Group’s total business deriving from online channels equalled 13.4% of sales, up from 12.7% in 2020 and 3.9% in 2019.

Preliminary net sales performance by geography in the full year 2021:
Safilo Group S.P.A. Reports Preliminary Full Year 2021 Key Performance Indicators

In the fourth quarter of 2021, the Group’s preliminary net sales amounted to Euro 232.2 million, showing a substantial stability compared to the business levels recorded in the same period of 2020 (-0.7% at constant exchange rates and + 2.9% at current exchange rates). Q4 2021 instead increased by 3.8% at constant exchange rates and by 0.8% at current exchange rates compared to Q4 2019, thanks to the double-digit growth posted by the majority of the Group’s core brands, from Carrera and Kate Spade to Tommy Hilfiger and Hugo Boss, driving organic1sales up around 10% at constant exchange rates.

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In the second half of 2021, Safilo’s preliminary net sales grew by 7.3% at constant exchange rates compared to the corresponding period of 2019, recording an organic2 business improvement of around +13%, in acceleration compared to the improvement of 8.3% posted in the first half of the year compared to the same period in 2019.

Preliminary net sales performance by geography in Q4 2021:
Safilo Group S.P.A. Reports Preliminary Full Year 2021 Key Performance Indicators

In an economic environment which saw the fourth quarter once again impacted by renewed restrictions following the spread of the Omicron variant of Covid-19, the performance of Safilo business by geographical area continued to be driven by the expansion of the North American market, in which the Group achieved the sixth, consecutive quarter of growth, both compared to the previous year and to 2019. 2021 was a record year for Smith, which also in Q4 2021 contributed to the significant organic2 growth posted by the Group in the United States, thanks to the strength of its products and the significant progress of the brand in its online channel, enhanced at the beginning of the year with the launch of its new e-commerce site. In North America, Q4 net sales performance continued to benefit from the growth in organic2 sales of sunglasses and prescription frames in the main distribution channel of independent opticians, while the acquisitions of Blenders and Privé Revaux, alongside the new licensed brands in the portfolio, allowed for an important dimensional jump of the business compared to 2019 pre-pandemic levels. The strong Q4 organic2 sales growth continued to contribute to the Group’s full year growth in the region.

In Q4 2021, Safilo’s preliminary net sales in Europe just slightly increased compared to Q4 2020, while remaining below Q4 2019 levels due to a market environment overall restrained by the uneven path of recovery recorded by the main economies of the area, where the Group continued to more markedly suffer from the challenging comparison bases due to the terminated licenses. In the quarter, organic2 sales in Europe instead rebounded compared to 2020 driven by continuous progress in the optical frames business and by the recovery, initiated in the third quarter, of sunglasses, particularly in markets such as Italy, France and the UK.

On the emerging markets front, Q4 2021 preliminary net sales in Asia and the Pacific were still affected by the negative impact of the terminated licenses, while the organic2 business registered a meaningful progress both compared to 2020 and 2019, notwithstanding the lockdowns still in place in many countries of the area. Finally, the fourth quarter was a two-speed period for Safilo in the Rest of the World, where on the one hand, sales growth continued in Brazil and Mexico compared to both 2020 and 2019, while on the other, Middle East markets and India experienced a temporary slowdown, which did not however affect their overall positive performance for the year.

On a preliminary basis, Safilo closed the full year 2021 with an adjusted3 EBITDA margin on sales of 8.7%, a performance which marked an exponential recovery compared to the break-even recorded in 2020 and an improvement of 170 basis points compared to the 7.0% margin posted in 2019.

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On a preliminary basis1, the Group’s net debt as at 31 December 2021 reduced to around Euro 94 million, compared to Euro 222.1 million in 2020. This reduction reflected the successful completion of the Group’s capital increase at the beginning of November 2021.

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