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Safilo posts profit in the first half, sales rise 6.5 percent

By Prachi Singh

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Business

For its first half period, Safilo Group S.p.A. reported net sales from the continuing operations of 495.9 million euros (551.7 million dollars), up 6.5 percent at current exchange and 3.9 percent at constant exchange rates compared to the same period of 2018 with the wholesale business showing an improvement of 4.1 percent. The company posted profit of 8.7 million euros (9.6 million dollars) compared to a net loss of 4.3 million in H1 2018. In the second quarter, Safilo net sales equalled to 248.6 million euros (276.6 million dollars), growing by 9.7 percent at current exchange and 7.4 percent at constant exchange rates with 7.5 percent increase in the wholesale business.

Commenting on the results, Angelo Trocchia, Safilo Chief Executive Officer, said in a statement: “The results we achieved in the first six months showed a positive sales progression. The performance of the second quarter was solid. A first half of the year that confirms our expectations for a positive 2019, reflecting a careful execution of our top and bottom line plans and where the sale of the Solstice store chain, completed at the beginning of July, further enables us to free up focus and resources to pursue existing and new strategic projects.”

Review of Safilo’s H1 and Q2 performance

The company said, first half sales trends reflected the positive progression recorded by the group's brands in the main European and North American markets, where the portfolio grew by respectively 3 percent and 1 percent at constant exchange rates. The recovery was strong in Asia-Pacific, up 27.9 percent at constant exchange rates, driven in particular by the travel retail channel and China, while sales in the Rest of the World turned slightly positive by 0.8 percent. H1 2019 performance was particularly positive for the group’s own core brands, with Polaroid, Smith and Carrera which recorded overall growth of around 8 percent at constant exchange rates. On the licensed brands portfolio, the company added, Dior, Hugo Boss, Tommy Hilfiger and Max Mara continued to stand out as key positive drivers.

In the second quarter, the recovery in sales was higher in the European markets, while business performance in North America improved at the independent opticians’ channel and in chains. At constant exchange rates, sales in Europe and North America increased respectively by 4.8 percent and 2.7 percent. Sales in Asia-Pacific grew by 36.2 percent, while net sales grew 14 percent in Rest of the World, mainly driven by the positive business trends recorded in the Latin American markets of Brazil and Mexico.

H1 gross profit of the continuing operations grew by 11 percent to 266.2 million euros (296.2 million dollars), with the margin on sales up by 220 basis points, from 51.5 percent to 53.7 percent. On a pre-IFRS 16 basis, H1 adjusted EBITDA of the continuing operations grew by 12.9 percent to 34.2 million euros (38 million dollars), with the margin on sales at 6.9 percent. On a pre-IFRS 16 basis, Q2 2019 adjusted EBITDA of the continuing operations equalled 17.7 million euros (19.7 million dollars), with the margin on sales standing at 7.1 percent.

Picture:Facebook/Polaroid Eyewear

Safilo