Safilo Group S.p.a. · MIL:SFL
Safilo — Q3 2020 Earnings Presentation
27 slides from Safilo's earnings presentation, Nov 3, 2020
Slide 1: Q3 and 9M 2020 Trading Update
Q3 AND 9M 2020 TRADING UPDATE November 3, 2020
Slide 2: Disclaimer
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,
Slide 3: Our Continued Priorities
OUR CONTINUED PRIORITIES PROTECTING THE HEALTH AND SAFETY OF ALL OUR PEOPLE AND SUPPORTING OUR COMMUNITIES Rigorous implementation of all safety and prevention regulations provided by government protocols, and supporting the fight against the Covid-19 epidemic PROTECTING CASH Minimize all discretion
Slide 4: Our Continued Progress
OUR CONTINUED PROGRESS WE PROTECTED OUR PEOPLE HEALTH AND SAFETY ➢ Extensive smart-working now the new normal in our HQ and in all our regions WE PROTECTED OUR CASH, SECURING ADDITIONAL LIQUIDITY TO THE GROUP ➢ New term-loan facility of euro 108M, guaranteed by SACE WE MOVED FORWARD WITH OUR GROUP B
Slide 5: Q3 Business Rebound After H1 Pandemic Impacts
Q3 BUSINESS REBOUND AFTER H1 PANDEMIC IMPACTS KEY BUSINESS DRIVERS OF THE THIRD QUARTER: ➢ FULL-QUARTER CONTRIBUTION OF NEWLY ACQUIRED PRIVÉ REVAUX & BLENDERS EYEWEAR ➢ ORGANIC* BUSINESS RECOVERY SUPPORTED BY : ➢ Strong rebound of US independent 3Os channel ➢ Outstanding growth of Mainland China ➢ I
Slide 6: Q3 and 9M Key Economic and Financial Highlights
Q3 BUSINESS REBOUND AFTER H1 PANDEMIC IMPACTS Q3 AND 9M KEY ECONOMIC AND FINANCIAL HIGHLIGHTS in millions of Euro, % of sales, % change vs same periods of 2019 H1 2020 Q3 2020 9M 2020 335.6 219.1 554.7 NET SALES -32.3% @current FX +3.0% @current FX -21.7% @current FX -32.7% @constant FX +6.0% @const
Slide 7: Sales and Economic Highlights
SALES AND ECONOMIC HIGHLIGHTS 6
Slide 8: Net Sales by Geography
NET SALES BY GEOGRAPHY in millions of Euro and % change vs same periods of 2019 Q3 2020 9M 2020 TOTAL 219.1 554.7 NET SALES +6.0% @constant FX -21.1% @constant FX -6.7% organic* -27.8% organic* 113.1 241.5 NET SALES in +45.9% @const.FX -3.0% @const.FX NORTH AMERICA ➢ Full-quarter contribution of the
Slide 9: Net Sales by Geography
NET SALES BY GEOGRAPHY in millions of Euro and % change vs same periods of 2019 Q3 2020 9M 2020 TOTAL 219.1 554.7 NET SALES +6.0% @constant FX -21.1% @constant FX -6.7% organic* -27.8% organic* 79.3 244.3 -16.4% @const.FX -28.3% @const.FX NET SALES in EUROPE 44% of Wholesale2 -15.2%: total 9M net sa
Slide 10: Net Sales by Geography
NET SALES BY GEOGRAPHY in millions of Euro and % change vs same periods of 2019 Q3 2020 9M 2020 TOTAL 219.1 554.7 NET SALES +6.0% @constant FX -21.1% @constant FX -6.7% organic* -27.8% organic* NET SALES in 15.9 39.6 ASIA PACIFIC -6.4% @const.FX -34.6% @const.FX 7% of total 9M net sales ➢ Significan
Slide 11: Sequential Acceleration of Our Online Business
SEQUENTIAL ACCELERATION OF OUR ONLINE BUSINESS THE GLOBAL PANDEMIC HAS FURTHER ELEVATED THE IMPORTANCE OF THE DIGITAL BUSINESS ➢ OUR ORGANIC* ONLINE BUSINESS +94% IN Q3, FROM +38% IN Q2, DRIVEN BY: • Smith’s D2C business, almost tripling • Internet pure players customers, ca +75% ➢ Q3 TOTAL ONLINE B
Slide 12: Economic Performance
ECONOMIC PERFORMANCE Q3 POSITIVE SALES DEVELOPMENT AND THE CONTINUED IMPLEMENTATION OF STRUCTURAL SAVINGS AND CONTINGENCY MEASURES SUPPORTED HIGHER GROSS PROFIT AND BETTER OPERATING LEVERAGE 11
Slide 13: Industrial Performance
INDUSTRIAL PERFORMANCE in millions of Euro, % on sales, % and bps change vs same periods 2019 Q3 2020 9M 2020 112.6 +3.3% 261.2 -30.4% 51.4% +20 bps 47.1% -580 bps GROSS PROFIT & MARGIN ➢ Lower provisions for obsolescence thanks to tight control of inventories; ➢ Growth of accretive online business;
Slide 14: Operating Performance
OPERATING PERFORMANCE in millions of Euro, % on sales, % and bps/pps change vs same periods 2019 Q3 2020 9M 2020 14.3 +9.3% -13.9 n.s. 6.5% +30 bps -2.5% -10.2 pps ADJUSTED1 EBITDA & MARGIN ➢ Organic SG&A expenses, ex M&A and D&A, down ca 14% vs last year, thanks to structural costs savings & contin
Slide 15: Group Net Debt
GROUP NET DEBT in millions of Euro GROUP NET DEBT WELL UNDER CONTROL, SLIGHTLY ABOVE END OF JUNE LEVEL Dec.31, 2019 June 30, 2020 Sept. 30, 2020 NET DEBT 74.8 188.5 201.7 ➢ Higher Working Capital needs in line with management’s expectations; ➢ New Term Loan facility of 108M finalized. NET DEBT pre I
Slide 16: Business Update in Relation to the Covid-19 Pandemic
BUSINESS UPDATE IN RELATION TO THE COVID-19 PANDEMIC ➢ Business activity in October showed a continuation of some of the positive trends recorded in Q3, confirming in particular positive organic growth in North America and solid business developments in Mainland China and some other Asian markets; ➢
Slide 17: Moving Forward Our Group Business Strategy
MOVING FORWARD OUR GROUP BUSINESS STRATEGY Our new B2B e-commerce platform, designed with opticians for opticians New STEP CHANGING CUSTOMERS’EXPERIENCE B2B ECOSYSTEM CUSTOMER FACING DIGITAL SHIFT OFFERING A COMPELLING D2C-LIKE NEW B2B E-COMMERCE PLATFORM IMPROVES Redesign of our Sales and OMNICHANN
Slide 18: Moving Forward Our Group Business Strategy
MOVING FORWARD OUR GROUP BUSINESS STRATEGY Launched in August to react faster to the complex market environment NEW DESIGN Simple, immediate, pleasant to surf NEW FEATURES Search optimization & detailed product pages MORE USER FRIENDLY Renewed shopping experience & After-sales management 17
Slide 19: Moving Forward Our Group Business Strategy
MOVING FORWARD OUR GROUP BUSINESS STRATEGY 18
Slide 20: Moving Forward Our Group Business Strategy
MOVING FORWARD OUR GROUP BUSINESS STRATEGY ✓ In 2020 America’s Best expanded the partnership with Privé Revaux to all its retail locations nationwide; ✓ launch came after a successful pilot program in 2019; ✓ Privé Revaux awarded Product of the Year 19
Slide 21: Safilo's Commitment to People, Product, Planet
MOVING FORWARD OUR GROUP BUSINESS STRATEGY SAFILO’S COMMITMENT TO PEOPLE, PRODUCT, PLANET THE OCEAN CLEANUP SUNGLASSES are made with injected plastic deriving from the Great Pacific Garbage Patch (GPGP), using an innovative upcycling process able to include types of plastic that have traditionally b
Slide 22: Appendices
Safilo Appendices 21
Slide 23: Notes to the presentation
Notes to the presentation 1 In the first 9 months of 2020, the adjusted EBITDA excludes non-recurring costs for Euro 11.8 million, due to restructuring expenses related to the ongoing cost saving program. In Q3 2020, the adjusted EBITDA excludes non-recurring costs for Euro 1.5 million. In the first
Slide 24: Net Sales by geographic area
Net Sales by geographic area % Change % Change (Euro million) Q3 2020 % Q3 2019 % at current forex at constant forex Europe 79.3 36.2 95.5 44.9 -17.0% -16.4% North America 113.1 51.6 79.9 37.6 +41.5% +45.9% Asia Pacific 15.9 7.2 17.5 8.2 -9.4% -6.4% Rest of the world 10.9 5.0 19.8 9.3 -45.2% -35.6%
Slide 25: Economic highlights
Economic highlights Q3 2020 Q3 2019 % Change (Euro in millions) Net sales 219.1 212.8 +3.0% Gross profit 112.6 109.0 +3.3% % on net sales 51.4% 51.2% EBITDA 12.8 7.7 +66.3% % on net sales 5.8% 3.6% 1 Adjusted EBITDA 14.3 13.1 +9.3% % on net sales 6.5% 6.2% IFRS 16 impact on EBITDA 3.2 3.4 9M 2020 9M
Slide 26: Exchange Rates
Exchange Rates (Appreciation)/ (Appreciation)/ As of Average for Depreciation Depreciation September 30, December 31, September 30, September 30, Currency Code % % 2020 2019 2020 2019 US Dollar USD 1.1708 1.1234 4.2% 1.1250 1.1236 0.1% Hong-Kong Dollar HKD 9.0742 8.7473 3.7% 8.7273 8.8074 -0.9% Swis
Slide 27: Brand Portfolio
Brand Portfolio Safilo SMITH Polaroid evewean * from 2021 BOSS TOMMY SBHILFIGER * 4 UNDER ARMOUR elasta ~ CHESTERFIELD’ —eveweat— ADENSCO MISSONI HUGO rag & bone NEW YORK ISABEL MARANT FENDI Juicy Couture JIMMY CHOO GIVENCHY PARIS P@®RTS B CD FOSSIL TOMMY SRBJEANS ELIE SAAB THE MARC JACOBS DIOR LOVE