Italian eyewear group Safilo reported it is turning the business around, after the extensive overhaul begun last year. In the third quarter, the gross margin for the Italian manufacturer owned by Dutch investment fund Hal was €169.4 million, equivalent to 58.8% of sales, growing by 1.1% compared to the same period in 2015. Over the first nine months of this year, gross margin has instead fallen by 2.3%, to €564 million.
EBITDA grew by 27.6% to €18.8 million in the third quarter, while it slumped by 5.4% to €71 million in the nine months up to 30th September. The group explained that over the first nine months of the year its EBITDA has been impacted by extraordinary restructuring costs.
Between January and September 2016, Safilo sales declined by 2.2% (-1% at constant exchange rates), reaching €939.1 million. However, there was a marked improvement in the third quarter, with sales for €288 million, equivalent to a 1.1% increase (+1.7% at constant exchange rates) over the same period in 2015.
Kering’s decision at the end of 2014 to end its licence contracts with Safilo, including the profitable Gucci licence, which the eyewear manufacturer operated for 20 years, is beginning to have less of an impact on Safilo’s results.
Sales for those brands which have been regularly part of the group’s portfolio grew by 3% at constant exchange rates in the third quarter, and by 4.7% over nine months. The group has, however, stated in a press release that taking into account, “the negative impact of those brands which are no longer part, or will no longer be part of Safilo’s portfolio,” the group’s sales between January and September fell by 2.2% (-1% at constant exchange rates).
Safilo’s European sales rose by 5.9% to €107 million in the third quarter, and by 5.5% over nine months. All other regions have slumped over nine months. In the third quarter instead, while USA sales fell by 5%, those for Asia-Pacific rose by 4.5%, and the rest of the world’s by 12.3%.
Over nine months, financial debt increased by 8.5%, reaching €111.5 million, compared to €102.8 million as of 30th June.
In the press release, Safilo also announced a restructuring around three entities: the holding company, Safilo Group plc, the strategic operations company Safilo plc, managing the business and the brands, and new entity Safilo Industrial ltd, a company controlled by Safilo plc, concentrating on manufacturing and comprising the group’s factories.
Safilo is producing and distributing in licensing the eyewear collections of Dior, Celine, Givenchy, Jimmy Choo, Fendi, Max Mara etc.
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