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Safilo Group Interim / Quarterly Report 2021
4328_rns_2021-11-09_f6485dcd-dc7b-4c4d-be93-a09ef8d548a2.pdf
Interim / Quarterly Report
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Q3 and 9 months 2021 Trading Update
November 9, 2021
Q3 and 9 months 2021 Trading Update
November 9, 2021
DISCLAIMER
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 the third quarter of 2021, positive consumer trends in our key markets and product categories allowed us to close another strong quarter of recovery and growth despite the dampening effect of a still complex environment in a number of countries and our challenging comparison bases in the midst of our brand portfolio overhaul…"
Angelo Trocchia, CEO
…COMPARED TO 2019
- ✓
- Double-digit organic2 sales growth driven by our main markets, with USA again very solid and Europe picking up
- Prescription frames and sport products the leading categories, while sunglasses back to growth ✓
- Online business at ca 13% of total business, and progressing with our direct-to-consumer strategy ✓
- ✓
✓
- Effective portfolio rebalance, with new business surpassing the decline of terminated licenses
- Progress in structural savings supporting significant recovery of operating performance
…CONFIRM SALES AND PROFITS ABOVE 2019 AND 2020
Q3/9M 2021 SALES PERFORMANCE
9M 2021 ONLINE BUSINESS AT 13% OF THE GROUP'S TOTAL NET SALES
- ✓ BLENDERS' DTC SALES DOUBLING vs 2019 AND ca +20% vs 2020, ON A PROFORMA BASIS3
- ✓ SMITH'S DTC SALES ca +80% vs 2019, +30% vs 2020
- ✓ SALES THROUGH IPPs ca +86% vs 2019, +23% vs 2020
(% of online business on Group's total net sales)
Q3/9M 2021 NET SALES PERFORMANCE BY REGION
@constant FX
Q3/9M 2021 ECONOMIC AND FINANCIAL PERFOMANCE
Q3 DELIVERED A MORE MEANINGFUL RECOVERY OF GROSS MARGIN
- ✓ ACCRETIVE ONLINE BUSINESS OFFSETTING IMPACT OF TERMINATED LICENSES
- ✓ STRUCTURAL COGS SAVINGS AND PRICE ADJUSTMENTS OFFSETTING HIGHER INBOUND TRANSPORT COSTS
SOLID IMPROVEMENT OF THE OPERATING PERFORMANCE
✓ STRUCTURAL RECOVERY OF OPERATING LEVERAGE AND DISCIPLINED COST CONTROL
GROUP NET DEBT SUBSTANTIALLY STABLE
- ✓ SOLID ECONOMIC PERFORMANCE AND SUPPORTIVE WORKING CAPITAL
- ✓ 9 MONTH CASH OUT OF CA €13M MAINLY IN RELATION TO THE CLOSURE OF THE ORMOZ PLANT IN SLOVENIA
BUSINESS DEVELOPMENTS
A MULTI-YEAR GLOBAL LICENSING AGREEMENT WITH
100% SUBSCRIPTION OF THE NEW SHARE CAPITAL
- ✓ Shareholder Loan already repaid, to provide us with a more cost-efficient financial structure, considerably limiting financial charges for the next five years
- ✓ Strengthened capital structure, further enabling our growth strategy with additional resources
- ✓ On a proforma basis, the Group Net Debt at the end of September, recalculated for the net proceeds of the share capital increase, stood at around Euro 96 million (Euro 57 million pre-IFRS 16)
Q3 underlying trends, phasing of deliveries and current order portfolio confirm previous management expectations on H2 overall business trading and full year guidance:
- 2021 Net Sales, up mid-single digits at constant exchange rates compared to 2019
- 2021 adjusted EBITDA to surpass 2019
Expectations are based on the assumption of a stable business environment in relation to the Covid-19 pandemic
Q3 and 9 months 2021 Trading Update
November 9, 2021
Q3 and 9 months 2021 Trading Update
November 9, 2021
Appendices
1In the first 9M 2021, the adjusted EBITDA excludes non-recurring costs for Euro 17.4 million (Euro 10.2 million at the gross profit level), mainly related to the announced closure, starting from June 2021, of the Ormož production plant in Slovenia, and also a non-recurring income of Euro 17 million due to the release of a provision for risks and charges booked in 2015 to cover a potential estimated liability in relation to an investigation by the French Competition Authority. The release is a result of the positive outcome, without sanctions, of this investigation.
In Q3 2021, the adjusted EBITDA excludes non-recurring costs for Euro 1.7 million (Euro 1.8 million at the gross profit level).
In the first 9M 2020, the adjusted EBITDA excluded non-recurring costs for Euro 11.8 million, due to restructuring expenses related to the cost saving program. In Q3 2020, the adjusted EBITDA excluded non-recurring costs for Euro 1.5 million.
In the first 9M 2019, the adjusted EBITDA excluded non-recurring costs for Euro 10.4 million, due to restructuring expenses related to the cost saving program. In Q3 2019, the adjusted EBITDA excluded non-recurring costs for Euro 5.4 million.
2 Safilo Group's sales, excluding the acquisitions of Blenders and Privè Revaux made in 2020 and considering only the comparable brand portfolio (i.e. without the sales attributable to the production supply contract with Kering Eyewear and the license agreements that have expired or initiated between 2020 and September 2021.
3 Blenders' proforma performance is calculated on the brand's full comparable basis.
| % change 2021 vs 2020 |
% change 2021 vs 2019 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Euro million) | 9M 2021 |
% | 9M 2020 |
% | 9M 2019 |
% | current forex |
constant forex |
current forex |
constant forex |
| North America |
355.2 | 48.2 | 241.5 | 43.5 | 249.4 | 35.2 | +47.0% | +55.8% | +42.4% | +51.2% |
| Europe | 291.0 | 39.5 | 244.3 | 44.0 | 341.8 | 48.2 | +19.2% | +19.5% | -14.8% | -14.1% |
| Asia Pacific | 37.2 | 5.0 | 39.6 | 7.1 | 61.0 | 8.6 | -6.1% | -5.6% | -39.0% | -38.1% |
| Rest of the world |
54.0 | 7.3 | 29.3 | 5.3 | 56.5 | 8.0 | +84.4% | +90.8% | -4.5% | +9.9% |
| Total | 737.4 | 100.0 | 554.7 | 100.0 | 708.7 | 100.0 | +32.9% | +37.3% | +4.0% | +8.7% |
| % change 2021 vs 2020 |
% change 2021 vs 2019 |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Euro million) | Q3 2021 |
% | Q3 2020 |
% | Q3 2019 |
% | current forex |
constant forex |
current forex |
constant forex |
|
| North America |
115.1 | 50.8 | 113.1 | 51.6 | 79.9 | 37.6 | +1.8% | +1.5% | +44.0% | +52.3% | |
| Europe | 82.8 | 36.6 | 79.3 | 36.2 | 95.5 | 44.9 | +4.5% | +3.7% | -13.3% | -12.8% | |
| Asia Pacific | 11.3 | 5.0 | 15.9 | 7.2 | 17.5 | 8.2 | -28.9% | -31.4% | -35.6% | -35.5% | |
| Rest of the world |
17.4 | 7.7 | 10.9 | 5.0 | 19.8 | 9.3 | +60.4% | +55.4% | -12.0% | +1.6% | |
| Total | 226.6 | 100.0 | 219.1 | 100.0 | 212.8 | 100.0 | +3.5% | +2.6% | +6.5% | +11.1% |
| 2021 vs 2020 | % change | % change 2021 vs 2019 |
% change 2021 vs 2020 |
% change 2021 vs 2019 |
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Euro million) | Q1 2021 |
% | Q1 2020 |
% | Q1 2019 |
% | current forex |
constant forex |
current forex |
constant forex |
(Euro million) | Q2 2021 |
% | Q2 2020 |
% | Q2 2019 |
% | current forex |
constant forex |
current forex |
constant forex |
| North America | 119.1 | 47.4 | 84.4 | 38.2 | 88.9 | 36.0 | +41.1% | +53.8% | 34.0% | 41.8% | North America | 121.0 | 46.6 | 44.1 | 38.5 | 80.6 | 32.4 | +174.6% | +198.9% | 50.1% | 60.3% |
| Europe | 101.5 | 40.4 | 107.7 | 48.7 | 124.6 | 50.4 | -5.8% | -5.0% | -18.5% | -17.8% | Europe | 106.7 | 41.1 | 57.2 | 50.0 | 121.7 | 48.9 | +86.5% | +87.5% | -12.3% | -11.4% |
| Asia Pacific | 13.0 | 5.2 | 14.9 | 6.7 | 17.7 | 7.2 | -13.0% | -10.8% | -26.8% | -25.3% | Asia Pacific | 12.9 | 5.0 | 8.8 | 7.7 | 25.7 | 10.3 | 46.4% | 49.6% | -49.8% | -48.5% |
| Rest of the world | 17.8 | 7.1 | 14.1 | 6.4 | 16.1 | 6.5 | +26.6% | +40.6% | 10.7% | +26.5% | Rest of the world | 18.7 | 7.2 | 4.4 | 3.8 | 20.6 | 8.3 | +330.3% | +340.4% | -9.1% | +4.9% |
| Total | 251.4 | 100.0 | 221.1 | 100.0 | 247.3 | 100.0 | +13.7% | +20.0% | +1.7% | +6.0% | Total | 259.4 | 100.0 | 114.5 | 100.0 | 248.6 | 100.0 | +126.6% | +137.1% | +4.3% | +9.4% |
| (Euro million) | Q3 2021 |
Q3 2020 |
Q3 2019 |
% Change 2021 vs 2020 |
% Change 2021 vs 2019 |
(Euro million) | 9M 2021 |
9M 2020 |
9M 2019 |
Change % 2021 vs 2020 |
Change % 2021 vs 2019 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | 226.6 | 219.1 | 212.8 | +3.5% | +6.5% | Net sales | 737.4 | 554.7 | 708.7 | +32.9% | +4.0% |
| Gross profit % on net sales |
118.7 52.4% |
112.6 51.4% |
109.0 51.2% |
+5.4% | +8.9% | Gross profit % on net sales |
380.9 51.7% |
261.2 47.1% |
375.1 52.9% |
+45.8% | +1.5% |
| EBITDA % on net sales |
17.4 7.7% |
12.8 5.8% |
7.7 3.6% |
+35.8% | +125.8% | EBITDA % on net sales |
68.4 9.3% |
(25.8) (4.6%) |
43.9 6.2% |
+365.3% | +55.6% |
| Adjusted1 EBITDA % on net sales |
19.1 8.4% |
14.3 6.5% |
13.1 6.2% |
+33.3% | +45.9% | Adjusted1 EBITDA % on net sales |
68.8 9.3% |
(13.9) (2.5%) |
54.3 7.7% |
+593.1% | +26.6% |
| IFRS 16 impact on EBITDA | 3.0 | 3.2 | 3.4 | IFRS 16 impact on EBITDA | 8.7 | 9.2 | 10.4 |
| (Euro million) | Q1 2021 |
Q1 2020 |
Q1 2019 |
% Change 2021 vs 2020 |
% Change 2021 vs 2019 |
|---|---|---|---|---|---|
| Net sales | 251.4 | 221.1 | 247.3 | +13.7% | +1.7% |
| Gross profit % on net sales |
126.6 50.4% |
109.4 49.5% |
130.2 52.7% |
+15.7% | -2.8% |
| EBITDA % on net sales |
13.4 5.3% |
3.4 1.5% |
18.9 7.6% |
+293.1% | -29.0% |
| Adjusted1 EBITDA % on net sales |
25.8 10.3% |
5.8 2.6% |
20.0 8.1% |
+342.8% | +29.4% |
| IFRS 16 impact on EBITDA | 2.9 | 3.1 | 3.4 |
| (Euro million) | Q2 2021 |
Q2 2020 |
Q2 2019 |
% Change Q2 2021 vs Q2 2020 |
% Change Q2 2021 vs Q2 2019 |
|---|---|---|---|---|---|
| Net sales | 259.4 | 114.5 | 248.6 | +126.6% | +4.3% |
| Gross profit % on net sales |
135.6 52.3% |
39.2 34.2% |
135.9 54.7% |
+246.3% | -0.2% |
| EBITDA % on net sales |
37.7 14.5% |
(42.0) (36.7%) |
17.4 7.0% |
+189.7% | +116.6% |
| Adjusted1 EBITDA % on net sales |
23.8 9.2% |
(34.1) (29.8%) |
21.2 8.5% |
+169.9% | +12.2% |
| IFRS 16 impact on EBITDA | 2.8 | 3.0 | 3.6 |
EXCHANGE RATES
| Currency | of As |
(Appreciation)/De preciation |
for Average |
(Appreciation)/De preciation |
|||
|---|---|---|---|---|---|---|---|
| Code | September 30 , 2021 |
December 31 , 2020 |
September 30 , 2021 |
September 30 2020 |
, % |
||
| % | |||||||
| Dollar US |
USD | 1 1579 |
1 2271 |
-5 6% |
1 1962 |
1 1250 |
6 3% |
| Dollar Hong-Kong |
HKD | 9 0184 |
9 5142 |
2% -5 |
9 2912 |
8 7273 |
6 5% |
| Swiss Franc |
CHF | 1 0830 |
1 0802 |
0 3% |
1 0904 |
1 0680 |
2 1% |
| Canadian Dollar |
CAD | 1 4750 |
1 5633 |
-5 6% |
1 4968 |
1 5218 |
-1 6% |
| Japanese Yen |
YEN | 129 6700 |
126 4900 |
2 5% |
129 8320 |
120 9108 |
4% 7 |
| British Pound |
GBP | 0 8605 |
0 8990 |
-4 3% |
0 8636 |
0 8851 |
-2 4% |
| Swedish Krown |
SEK | 10 1683 |
10 0343 |
1 3% |
10 1528 |
10 5582 |
-3 8% |
| Australian Dollar |
AUD | 6095 1 |
5896 1 |
3% 1 |
5770 1 |
6627 1 |
2% -5 |
| South-African Rand |
ZAR | 17 5629 |
18 0219 |
-2 5% |
17 4226 |
18 8094 |
-7 4% |
| Ruble Russian |
RUB | 84 3391 |
91 4671 |
-7 8% |
88 5335 |
79 9599 |
10 7% |
| Brasilian Real |
BRL | 6 2631 |
6 3735 |
7% -1 |
6 3765 |
5 7100 |
7% 11 |
| Indian Rupee |
INR | 86 0766 |
89 6605 |
-4 0% |
88 0420 |
83 4946 |
5 4% |
| Dollar Singapore |
SGD | 1 5760 |
1 6218 |
-2 8% |
1 6020 |
1 5635 |
2 5% |
| Malaysian Ringgit |
MYR | 4 8475 |
4 9340 |
8% -1 |
4 9414 |
4 7613 |
8% 3 |
| Chinese Renminbi |
CNY | 7 4847 |
8 0225 |
-6 7% |
7 7376 |
7 8659 |
-1 6% |
| Korean Won |
KRW | 1 371 5800 , |
1 336 0000 , |
2 7% |
1 354 3097 , |
1 349 7389 , |
0 3% |
| Mexican Peso |
MXN | 23 7439 |
24 4160 |
8% -2 |
24 0772 |
24 5232 |
8% -1 |
| Turkish Lira |
TRY | 10 2981 |
9 1131 |
13 0% |
9 7104 |
7 59911 |
27 8% |
| Dirham UAE |
AED | 4 2524 |
4 5065 |
6% -5 |
4 39312 |
4 13168 |
6 3% |
BRAND PORTFOLIO
* in Safilo's portfolio from January 2022