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Safilo Group Interim / Quarterly Report 2020
4328_rns_2020-05-06_c7ee3a75-92bf-4fa3-bba2-38f666de1906.pdf
Interim / Quarterly Report
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Q1 2020 TRADING UPDATE
May 6, 2020
DISCLAIMER
1
This presentation may contain forward looking statements based on current expectations and projects of the Group in relation to future events. Due to their specific nature, these statements are subject to inherent risks and uncertainties, as they depend on certain circumstances and facts, most of which being beyond the control of the Group. Therefore actual results could differ, even to a significant extent, with respect to those reported in the statements.
In these extraordinary circumstances, we have been focused on:
PROTECTING THE HEALTH AND SAFETY OF ALL OUR PEOPLE
Immediate and rigorous implementation of all the safety and prevention regulations provided by government protocols
SUPPORTING OUR COMMUNITIES AND MEDICAL WORKERS INVOLVED IN THE COVID-19 EMERGENCY #UNITED4EYECARE, our global corporate initiatives, supporting the fight against the Covid-19 epidemic
MAINTAINING BUSINESS CONTINUITY
Do everything possible to support our customers, ensuring seamless operations
PROTECTING CASH
Minimize all discretionary expenditures and investments, tight WC management
ACCELERATING ON THE KEY DRIVERS OF OUR GROUP BUSINESS PLAN
New programs, actions and tools to more effectively address the new business context
A POSITIVE START TO THE YEAR…
January and February up mid-single digit, driven by:
- ➢ the double-digit performance of Carrera, Polaroid, Smith and core licenses;
- ➢ the launch of our new partnerships – Beckham, Levi's and Missoni
…ABRUPTLY INTERRUPTED IN MARCH BY THE CORONAVIRUS PANDEMIC
After Italy, from mid-March, the spread of Covid-19 escalated across Europe and the USA, with the most severe measures of national lockdowns and halt of business heavily impacting the last two weeks of the month and the overall Q1 performance
Q1 2020 economic and financial highlights (post-IFRS 16)
in millions of Euro, % on sales, %/bps change vs Q1 2019
ECONOMIC AND FINANCIAL HIGHLIGHTS (post-IFRS 16)
NET SALES
in millions of Euro and % change vs Q1 2019
NET SALES BY GEOGRAPHY
in millions of Euro and % change vs Q1 2019
NET SALES BY GEOGRAPHY
in millions of Euro and % change vs Q1 2019
GROSS PROFIT
Inefficient supply chain dynamics due to production interruptions and sourcing activities in China
in millions of Euro, % on sales, %/bps change vs Q1 2019
- ➢ Subdued factory results on lower production volumes and supply chain disruption;
- ➢ Obsolescence provision increased at the end of March;
- ➢ Favourable mix effect due to lower weight of Kering supply business
ADJUSTED2 EBITDA (post-IFRS 16)
Q1 2019 Q1 2020
Disproportionate contraction of Group operating performance due to operating deleverage
in millions of Euro, % on sales, %/bps change vs Q1 2019
GROUP NET DEBT (post-IFRS 16)
Higher Group Net Debt reflecting acquisition of Privé Revaux in February 2020
in millions of Euro
| Mar.31, 2019 | Dec.31, 2019 | March 31, 2020 | ||
|---|---|---|---|---|
| GROUP NET DEBT & ADJUSTED2,3 LEVERAGE |
105.7 0.5x |
74.8 0.5x |
135.5 1.6x |
Weak economic results ➢ Strict WC management, with seasonal ➢ absorption lower than same period last year, following decrease in inventories Feb. 10, 2020 acquisition of Privè Revaux ➢ for 61.6m Net Debt in line with end of 2019, ex M&A ➢ |
| IFRS-16 impact | 79.3 | 47.0 | 45.5 |
- ➢ Further significant deceleration of business activity in April, reflecting the almost complete shutdown of the various distribution channels in which the Group sells its products. Online business the exception, together with the significant improvement of sales trends in China;
- ➢ Very gradual and patchy re-start of sector activities between May and June driving Safilo's expectation for a more significant net sales decline and negative operating results in Q2;
- ➢ Outlook for the full year 2020 still impossible to provide given the still high level of uncertainty surrounding the Covid-19 pandemic and the future recovery of economies worldwide.
Appendices
-
- The wholesale business excludes Kering supply business, recorded within the geographical area of Europe.
-
- In Q1 2020, the adjusted EBITDA excludes non-recurring costs for Euro 2.4 million, due to restructuring expenses related to the ongoing cost saving program.
In Q1 2019, the adjusted EBITDA excluded non-recurring costs for Euro 1.1 million, due to restructuring expenses related to the ongoing cost saving program.
- The adjusted financial leverage is calculated on pre-IFRS 16 Net Debt and excluding the Euro 30 million subordinated loan provided by Safilo's reference shareholder, Multibrands Italy B.V., controlled by HAL Holding N.V., for the acquisition of Privé Revaux.
| (Euro million) |
Q1 2020 |
% | Q1 2019 |
% | % Change forex at current |
% Change forex at constant |
|---|---|---|---|---|---|---|
| Europe | 107 7 |
48 7% |
124 6 |
50 4% |
13 5% - |
13 5% - |
| North America |
84 4 |
38 2% |
88 9 |
36 0% |
5 1% - |
7 8% - |
| Asia Pacific |
14 9 |
6 7% |
17 7 |
7 2% |
15 9% - |
17 5% - |
| of the world Rest |
14 1 |
6 4% |
16 1 |
6 5% |
12 5% - |
10 5% - |
| Total | 221 1 |
100% | 247 3 |
100% | -10 6% |
5% -11 |
| millions) (Euro in |
Q1 2020 |
Q1 2019 |
% Change |
|---|---|---|---|
| Net sales |
221 1 |
247 3 |
10 6% - |
| profit Gross % sales net on |
109 4 49 5% |
130 2 52 7% |
16 0% - |
| EBITDA % sales net on |
3 4 1 5% |
18 9 7 6% |
82 0% - |
| Adjusted2 EBITDA % sales net on |
5 8 2 6% |
20 0 8 1% |
70 8% - |
| IFRS 16 impact EBITDA on |
3 1 |
3 4 |
Exchange Rates
| As | of | Average for |
(Appreciation)/ Depreciation |
||||
|---|---|---|---|---|---|---|---|
| March 31 , |
December 31 , |
March 31 , |
March 31 , |
||||
| Currency | Code | 2020 | 2019 | % | 2020 | 2019 | % |
| US Dollar |
USD | 1 0956 |
1 1234 |
-2 5% |
1 1027 |
1 1358 |
-2 9% |
| Hong-Kong Dollar |
HKD | 8 4945 |
8 7473 |
-2 9% |
8 5686 |
8 9116 |
-3 8% |
| Swiss Franc |
CHF | 1 0585 |
1 0854 |
-2 5% |
1 0668 |
1 1324 |
-5 8% |
| Canadian Dollar |
CAD | 1 5617 |
1 4598 |
7 0% |
1 4819 |
1 5102 |
-1 9% |
| Japanese Yen |
YEN | 118 9000 |
121 9400 |
-2 5% |
120 0973 |
125 0835 |
-4 0% |
| British Pound |
GBP | 0 8864 |
0 8508 |
4 2% |
0 8623 |
0 8725 |
-1 2% |
| Swedish Krown |
SEK | 11 0613 |
10 4468 |
5 9% |
10 6689 |
10 4187 |
2 4% |
| Australian Dollar |
AUD | 1 7967 |
1 5995 |
12 3% |
1 6791 |
1 5944 |
5 3% |
| South-African Rand |
ZAR | 19 6095 |
15 7773 |
24 3% |
16 9479 |
15 9206 |
6 5% |
| Ruble Russian |
RUB | 85 9486 |
69 9563 |
22 9% |
73 8205 |
74 9094 |
-1 5% |
| Brasilian Real |
BRL | 5 7001 |
4 5157 |
26 2% |
4 9167 |
4 2775 |
14 9% |
| Indian Rupee |
INR | 82 8985 |
80 1870 |
3 4% |
79 9096 |
80 0720 |
-0 2% |
| Dollar Singapore |
SGD | 1 5633 |
1 5111 |
3 5% |
1 5281 |
1 5388 |
-0 7% |
| Malaysian Ringgit |
MYR | 7330 4 |
5953 4 |
3 0% |
6094 4 |
6466 4 |
-0 8% |
| Chinese Renminbi |
CNY | 7784 7 |
8205 7 |
-0 5% |
6956 7 |
6635 7 |
0 4% |
| Korean Won |
KRW | 341 0300 1 , |
296 2800 1 , |
3 5% |
316 2813 1 , |
278 5949 1 , |
2 9% |
| Mexican Peso |
MXN | 26 1772 |
21 2202 |
23 4% |
22 0918 |
21 8057 |
3% 1 |
| Turkish Lira |
TRY | 2063 7 |
6 6843 |
8% 7 |
6 74284 |
6 11018 |
10 4% |
| Dirham UAE |
AED | 0236 4 |
1257 4 |
-2 5% |
04952 4 |
17112 4 |
-2 9% |
Brand Portfolio
* from 2021
** signed and communicated on December 8, 2019 and still to be closed at the present date