(Press Release)
PADUA – Safilo Group’s board of directors has reviewed and approved the company’s financial results for the first half of 2016.
The first half of the year was one of improving overall momentum as the period progressed, in particular from sales of the going-forward brands in Europe, North America and Rest of World, namely IMEA, and in the cost saving and operational improvement programs.
Net sales for the first six months of 2016 registered a decline of 3.5 percent at current exchange rates and of 2.1 percent at constant currencies while sales of the going-forward brands portfolio increased by 5.3 percent. Business recovered momentum during the second quarter, with revenues broadly flat at current exchange rates (-0.3 percent) but growing 2.0 percent at constant exchange rates. This reflected the improved sales performance of the going-forward brands portfolio, increasing in the second quarter by 9.0 perecent at constant exchange rates and more than offsetting the negative impact of the brands that the Group stopped/will stop servicing. Progress was particularly evident in Europe as well as in the Group’s core business in North America and in IMEA, while Asia remained subdued.
In the first half of 2016, the gross profit margin was substantially in line with the same period of 2015, at 60.6 percent of sales. In the second quarter of the year, gross profit margin stood at 60.2 percent of sales compared to 60.9 percent in the second quarter of 2015.
At the operating level, H1 2016 adjusted EBITDA margin of 8.9 percent was 40 basis points lower than in the first half of 2015, but it recorded an improvement of 90 basis points in the second quarter, to 9.5 percent of sales, thanks to higher costs savings and better operating leverage.
In the first six months of 2016, the Group’s adjusted net result increased 130.6 percent, mainly reflecting positive dynamics in net financial charges.
At the end of June 2016, Group net debt stood at Euro 102.8 million, improving from the position of Euro 110.1 million at the end of June 2015.
Luisa Delgado, CEO, commented:
“In the first six months, our going forward brands portfolio made good progress, growing by 5.3 percent at constant exchange rates, thanks to the broad based positive trends across the different market segments in which we are active. In the second quarter, we achieved sales acceleration, recovering a considerable part of the first quarter performance driven by the service shortfalls that had prevented us to fully leverage the sales opportunities of our order book.
Our gross margin was in line with last year while we progressed our supply network modernization focused on in-sourcing production into our own worldwide plant network and reshoring back to Italy, and simplifying our manufacturing and logistic flows. At the operating level, we progressed with the implementation of our cost savings program to improve our overheads productivity.
We continued to sharpen our focus on our own core brands, by concluding the integration of Polaroid with the closure of the Vale site, qualifying our stylistic direction for Carrera, while Smith built market share despite a difficult sports market environment in North America.”