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Safilo Group — Investor Presentation 2018
May 9, 2018
4328_rns_2018-05-09_3ab935d1-3071-4fff-ae5d-6472f6a7306a.pdf
Investor Presentation
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Q1 2018 Trading Update
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.
Q1 2018 – BUSINESS AND ECONOMIC HIGHLIGHTS
- SIGNIFICANT BUSINESS RECOVERY AGAINST A VERY DIFFICULT START TO THE YEAR IN 2017:
- STRONG SALES GROWTH IN THE EUROPEAN AND EMERGING MARKETS, LAST YEAR HEAVILY AFFECTED BY THE CHALLENGING GO-LIVE OF THE NEW INFORMATION SYSTEM IN THE PADUA DC
- NORTH AMERICA HIT BY UNFAVOURABLE FOREX, WHILE UNDERLYING PERFORMANCE REMAINED SOFT
- POSITIVE LAUNCH OF NEW LICENSES, MOSCHINO, LOVE MOSCHINO AND RAG&BONE
- POSITIVE OPERATING PERFORMANCE AND OVERHEAD PRODUCTIVITY PLAN IN PROGRESS
- SEASONAL CASH ABSORPTION
% change vs Q1 2017
+16.9% @ constant forex, excl. Gucci business* +15.4% @ constant forex (+16.2% Wholesale)
Q1 2017 DELIVERIES TO EUROPE AND EMERGING MARKETS WERE AFFECTED BY THE CHALLENGING GO-LIVE OF THE NEW INFORMATION SYSTEM IN PADUA DC
| NORTH AMERICA |
EUROPE | ASIA-PACIFIC | ROW | ||
|---|---|---|---|---|---|
| Wholesale -5.5% |
+26.8% | +44.3% | +95.2% | ||
| Retail +1.4% | +31.1%* | ||||
| Wholesale -4.1%* |
|||||
| • SOFT TRADING ENVIRONMENT |
• OVERALL POSITIVE UNDERLYING |
• UNDERLYING PERFORMANCE CONFIRMING DOUBLE-DIGIT |
|||
| PERSISTING IN DEPARTMENT STORES AND | PERFORMANCE, DESPITE UNFAVOURABLE | GROWTH IN ASIA AND REST OF THE WORLD | |||
| SOME CHAINS | START TO THE SUN SEASON IN MARCH | • | BROAD-BASED BRAND AND MARKET GROWTH, WITH BRAZIL, | ||
| RESILIENT PERFORMANCE OF THE • |
MEXICO, INDIA AND SAUDI ARABIA THE MOST DYNAMIC COUNTRIES | ||||
| INDEPENDENT OPTICIAN CHANNEL AND |
• SMITH FACING CHALLENGING COMPS
THE CANADIAN MARKET
Q1 2018 GROSS MARGIN PERFORMANCE
in millions of Euro and % on total net sales
Gross margin drivers:
- Negative FX impact
- Improved mix effect
- Lower obsolescence costs and higher industrial cost efficiencies
Q1 2018 ADJ.1 EBITDA PERFORMANCE
In millions of Euro and % on total net sales
Adjusted1 EBITDA drivers:
- Negative FX impact
- Cost savings from overhead productivity plan
- Improved operational leverage
Q1 2018 GROUP NET DEBT
in millions of Euro
Net Debt drivers:
- Seasonal cash flow absorption compared to the end of the year
- Continued reduction of inventories
AMONG THE MOST FEATURED EYEWEAR WORLDWIDE
Appendices
Economic results
in millions of Euro and % on net sales
| Q1 2018 |
% | 20172 Q1 |
% | Change % |
|
|---|---|---|---|---|---|
| sales Net |
250 9 |
100 0 |
234 6 |
100 0 |
+6 9% |
| Gross profit |
127 5 |
50 8 |
116 8 |
49 8 |
+9 1% |
| EBITDA | 11 4 |
4 5 |
(9 5) |
(4 1) |
n.s. |
| Adjusted1 EBITDA |
13 1 |
5 2 |
(6 2) |
(2 7) |
n.s. |
Notes to the presentation
1 In Q1 2018, the adjusted EBITDA excludes non-recurring costs for Euro 1.7 million, mainly related to the CEO succession plan, and it includes an income of Euro 9.8 million, as pro-rata portion of the accounting compensation for the early termination of the Gucci license, equal to Euro 39 million for the full year 2018.
In Q1 2017, the adjusted EBITDA excluded non-recurring costs for Euro 3.3 million, mainly related to the reorganization of the Ormoz plant in Slovenia and other overhead cost saving initiatives, and it included an income of Euro 10.8 million, as pro-rata portion of the accounting compensation for the early termination of the Gucci license, equal to Euro 43 million for the full year 2017.
2 The new accounting standard IFRS 15 regarding "Revenue from contracts with customers" entered into effect starting from 1 January 2018. Following the fully retrospective approach chosen by the Group, the first application of the principle to the first quarter of 2018, had an adjustment effect on the sales and cost of goods sold of the first quarter of 2017 equal to Euro 2.7 million, with a neutral effect on the gross profit. Consequently, Q1 2017 total net sales were adjusted to Euro 234.6 million (compared to Euro 237.3 million reported last year), while gross profit remained equal to Euro 116.8 million.
Net sales performance
in millions of Euro
| Net sales by geographical area |
Q1 2018 |
% | 20172 Q1 |
% | Change % |
Change % (*) |
|---|---|---|---|---|---|---|
| Europe | 123 5 |
49 2 |
98 5 |
42 0 |
25 5% |
26 8% |
| North America |
94 8 |
37 8 |
114 5 |
48 8 |
-17 2% |
-4 7% |
| Asia Pacific |
14 3 |
5.7 | 11 1 |
4.7 | 29 3% |
44 3% |
| Rest of the world |
18 2 |
7.3 | 10 6 |
4.5 | 72 1% |
95 2% |
| Total | 250 9 |
100 0 |
234 6 |
100 0 |
6 9% |
15 4% |
| Net sales by channel |
Q1 2018 |
% | 20172 Q1 |
% | Change % |
Change % (*) |
| Wholesale | 239 1 |
95 3 |
221 2 |
94 3 |
8 1% |
16 2% |
| Retail | 11 8 |
4.7 | 13 4 |
5.7 | -12 2% |
1 4% |
| Total | 250 9 |
100 0 |
234 6 |
100 0 |
6 9% |
15 4% |
(*) Sales performance at constant exchange rates
Exchange Rates
| As | of | (Appreciation)/ Depreciation |
Average | (Appreciation)/ Depreciation |
|||
|---|---|---|---|---|---|---|---|
| Currency | Code | March 31 2018 , |
December 31 2017 , |
% | March 31 2018 , |
March 31 2017 , |
% |
| Dollar US |
USD | 1.2321 | 1.1993 | 2 .7% |
1.2292 | 1.0648 | 15.4% |
| Hong-Kong Dollar |
HKD | 9 6696 |
9 3720 |
3 2% |
9 6216 |
8 2641 |
16 .4% |
| Swiss Franc |
CHF | 1.1779 | 1.1702 | 0 .7% |
1.1653 | 1.0694 | 9 0% |
| Canadian Dollar |
CAD | 1.5895 | 1.5039 | 5.7% | 1.5540 | 1.4101 | 10 2% |
| Japanese Yen |
YEN | 131 .1500 |
135 0100 |
-2 9% |
133 .1662 |
121 0139 |
10 0% |
| British Pound |
GBP | 0 8749 |
0 8872 |
-1.4% | 0 8834 |
0 8601 |
2 .7% |
| Swedish Krown |
SEK | 10 2843 |
9 8438 |
4.5% | 9 9712 |
9 .5063 |
4.9% |
| Australian Dollar |
AUD | 1.6036 | 1.5346 | 4.5% | 1.5632 | 1.4056 | 11.2% |
| South-African Rand |
ZAR | 14.6210 | 14.8054 | -1.2% | 14.7102 | 14.0814 | 4.5% |
| Russian Ruble |
RUB | 70 8897 |
69 3920 |
2 2% |
69 9291 |
62 .5218 |
11.8% |
| Brasilian Real |
BRL | 4.0938 | 3 9729 |
3 0% |
3 9887 |
3 3468 |
19 2% |
| Indian Rupee |
INR | 80 2960 |
76 6055 |
4.8% | 79 .1264 |
71.2842 | 11.0% |
| Dollar Singapore |
SGD | 1.6158 | 1.6024 | 0 8% |
1.6210 | 1.5080 | 7.5% |
| Malaysian Ringgit |
MYR | 4.7658 | 4.8536 | -1.8% | 4.8239 | 4.7341 | 1.9% |
| Chinese Renminbi |
CNY | 7.7468 | 7.8044 | -0 .7% |
7.8154 | 7.3353 | 6 .5% |
| Korean Won |
KRW | 1,310 8900 |
1,279 6100 |
2 .4% |
1,317 6456 |
1,227 2891 |
7.4% |
| Mexican Peso |
MXN | 22 .5249 |
23 6612 |
-4.8% | 23 0372 |
21 6167 |
6 6% |
| Turkish Lira |
TRY | 4.8976 | 4.5464 | 7.7% | 4.6899 | 3 93781 |
19 .1% |
| Dirham United Emirates |
AED | 4.5249 | 4.4044 | 2 .7% |
4.51429 | 3 90887 |
15.5% |
Brands Portfolio
| SAFILO | Dior | ELIE SAAB | BOSS HUGO BOSS |
havaianas ® |
|---|---|---|---|---|
| MADE IN ITALY DAL 1934 | MARC JACOBS | BANANA REPUBLIC | ||
| CARRERA | GIVENCHY PARIS |
kate spade NEW YORK |
MOSCHINO | rag & bone NEW YORK |
| FOSSIL | LOVE | Juicy Couture BLACK LABEL |
||
| Exercid | FENDI | TOMMY INILFIGER | MOSCHINO | los angeles |
| OXYDO | swatch | BROWN BOBBI |
Liz claiborne | |
| MaxMara | the o eyes | MAX&Co. | Falu i Foenue Foenue |
|
| SMITH | JIMMY CHOO | HUGO BOSS | pierre cardin PARIS |
JACK SPADE |