Safilo Group S.p.a. · MIL:SFL
Safilo — H1 2022 Earnings Presentation
36 slides from Safilo's earnings presentation, Aug 3, 2022
Slide 1: H1 2022 Results
H1 2022 Results August 3, 2022
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 H1 2022 Re
Slide 3: CEO quote on second quarter development
“We are pleased with the development of our business in the second quarter. Our strategic objective to build a Safilo with a strong and balanced portfolio of brands, geographies, products and channels is progressing well. We closed the first half of the year with solid sales growth and an even more
Slide 4: Q2 and H1 2022 Highlights: top line momentum
Q2 AND H1 2022 HIGHLIGHTS Q2 TOP LINE MOMENTUM +11.2%, +4.0% @cFX +9.8% organic1 resulting in H1 SALES GROWTH AT +11.8%, +6.2% @cFX +12% organic1 1 ORGANIC SALES PERFORMANCE INCLUDES ONLY THE SALES OF BRANDS PRESENT IN BOTH OF THE COMPARED PERIODS 3
Slide 5: Q2 and H1 2022 Highlights: margins and net result
Q2 AND H1 2022 HIGHLIGHTS STRONG Q2 GROSS MARGIN AT 56.5% driving H1 adj.2 EBITDA MARGIN AT 11% +130 bps vs 2021 RECORD HIGH H1 adj.2 NET RESULT 33.7 €M 2 ON AN ADJUSTED BASIS, EXCLUDING NON-RECURRING ITEMS 4
Slide 6: Our key business drivers
Q2 AND H1 2022 HIGHLIGHTS OUR KEY BUSINESS DRIVERS by REGION ✓ Bounce back of Europe, Latin America and IMEA markets continued also in Q2, while North America organic1 business flattened against strong comps and a tougher economic environment in the United States by PRODUCT ✓ Organic1 sales of sungl
Slide 7: Stronger brands for a stronger portfolio: Polaroid
Q2 AND H1 2022 HIGHLIGHTS STRONGER BRANDS FOR A STRONGER PORTFOLIO Double-digit upside vs 2021 BACK TO GROWTH also vs 2019 Polaroid new POP-UP Store in Roma Stazione Termini 6
Slide 8: Stronger brands: Carrera rebound
Q2 AND H1 2022 HIGHLIGHTS STRONGER BRANDS FOR A STRONGER PORTFOLIO Second, consecutive rebound for Carrera H1 2022 ca +30% vs 2019! 7
Slide 9: Stronger brands: Smith growth
Q2 AND H1 2022 HIGHLIGHTS STRONGER BRANDS FOR A STRONGER PORTFOLIO Another strong double-digit growth, which more than double Smith’s H1 sales vs 2019! 8
Slide 10: Stronger brands: Blenders soft Q2
Q2 AND H1 2022 HIGHLIGHTS STRONGER BRANDS FOR A STRONGER PORTFOLIO Soft Q2 for Blenders, running against its last 2Y exponential e-com growth 9
Slide 11: Stronger brands: licensed brand launches
Q2 AND H1 2022 HIGHLIGHTS STRONGER BRANDS FOR A STRONGER PORTFOLIO BOSS, Tommy Hilfiger, Kate Spade, David Beckham, Carolina Herrera, Isabel Marant, all recording Safilo’s best ever solid progress launch! 10
Slide 12: H1 2022 Sales Performance by Geography
H1 2022 SALES PERFORMANCE BY GEOGRAPHY
Slide 13: H1 2022 Sales Performance by Geography: Europe, North America
H1 2022 SALES PERFORMANCE BY GEOGRAPHY Europe North America 41.5% 45.3% H1 2022 vs 2021 @cFX +6.2% +14.1% -2.2% 570.9 €M +12.0%1 +22.7%1 +2.4%1 Q2 2022 vs 2021 @cFX +4.0% +12.1% -5.1% 288.3 €M +9.8%1 +20.7%1 -0.6%1 Dynamic business environment, driven by a return of Sales performance in North Americ
Slide 14: H1 2022 Sales Performance by Geography: Rest of World, Asia Pacific
H1 2022 SALES PERFORMANCE BY GEOGRAPHY Rest of World Asia & Pacific 8.7% 4.4% H1 2022 vs 2021 @cFX +6.2% +26.1% -8.9% 570.9 €M +28.1%1 +4.1%1 +12.0%1 Q2 2022 vs 2021 @cFX +24.9% -8.5% 288.3 €M +4.0% +9.8%1 +26.4%1 +5.9%1 Significant sales growth continued in Brazil, Mexico and Reported performance i
Slide 15: H1 2022 Economic Performance
H1 2022 ECONOMIC PERFORMANCE
Slide 16: Drivers of H1 2022 economic performance: gross profit
DRIVERS OF H1 2022 ECONOMIC PERFORMANCE Q2 WAS A QUARTER OF FURTHER MEANINGFUL PROGRESS AT THE GROSS PROFIT AND MARGIN LEVEL Positive price/mix effects and structural COGS savings of around €6m in H1, more than offset inflationary pressures and forex headwinds Q2 2022 vs Q2 2021 vs Q2 2021 ADJ.2 H1
Slide 17: Adjusted EBITDA and EBIT
DRIVERS OF H1 2022 ECONOMIC PERFORMANCE ROBUST IMPROVEMENT OF THE OPERATING PERFORMANCE ADJ.2 EBITDA AND EBIT In Q2, we kept stepping up marketing & advertising activities following the business peak season and its positive momentum IFRIC SaaS costs, still capitalized in H1 ’21, impacting EDP expens
Slide 18: Record high H1 net profit
DRIVERS OF H1 2022 ECONOMIC PERFORMANCE REACHING A RECORD HIGH H1 NET PROFIT Below the operating line, we recorded a significant reduction of net financial charges, plus a gain due to lower liabilities for options on non-controlling interests following the increase of our controlling stake in Privé
Slide 19: H1 2022 Financial Performance
H1 2022 FINANCIAL PERFORMANCE
Slide 20: Free cash flow absorption due to seasonality
H1 2022 FINANCIAL PERFORMANCE FREE CASH FLOW ABSORPTION DUE TO BUSINESS SEASONALITY Significant increase of trade receivables reflecting sales growth, while small increase of trade payables and inventories offsetting each other. Strong and healthy cash collection, although short of 10 €M due to anti
Slide 21: Group net debt as of June 30, 2022
H1 2022 FINANCIAL PERFORMANCE GROUP NET DEBT AS OF JUNE 30, 2022 June 30, 2022 Dec. 31, 2021 GROSS DEBT 184.2 193.0 IFRS-16 effect 42.1 41.2 Shareholder Loan for the acquisitions - - Term Loan facility, guaranteed by SACE 107.6 107.5 “TL & RCF 2018” facility 34.5 44.3 Cash Position (78.7) (99.0) GRO
Slide 22: 2022 Business Developments
2022 BUSINESS DEVELOPMENTS
Slide 23: 2022 Outlook
2022 OUTLOOK Based on the results we recorded in the first half of 2022 and the current visibility into the third quarter, we are confident about already reaching in 2022 the economic targets set out in the 2024 business plan, envisaging net sales at around Euro 1 billion and the adjusted EBITDA mar
Slide 24: Our sustainability journey: Safilo joins The Fashion Pact
OUR SUSTAINABILITY JOURNEY SAFILO JOINS THE FASHION PACT TO SUPPORT COLLECTIVE ACTION FOR POSITIVE ENVIRONMENTAL IMPACT Becoming a signatory of The Fashion Pact is part of Safilo’s purpose-led strategy based on three sustainability pillars: planet, product, and people, and it represents a further st
Slide 25: Q&A
Q&A H1 2022 Results August 3, 2022
Slide 26: Appendices
Appendices H1 2022 Results August 3, 2022
Slide 27: Notes to the presentation
NOTES TO THE PRESENTATION 1. Organic sales include only the proprietary brands and not terminated licenses, present in both of the compared periods, excluding the business attributable to the production supply contract with Kering Eyewear. 2. In H1 2022, the adjusted economic results exclude net non
Slide 28: H1 2022 Net Sales by Geographical Area
H1 2022 NET SALES BY GEOGRAPHICAL AREA Change at Change at current forex constant forex 1 (Euro million) H1 2022 % H1 2021 % Reported Reported Organic North America 258.7 45.3 240.1 47.0 +7.7% -2.2% +2.4% Europe 237.1 41.5 208.2 40.8 +13.9% +14.1% +22.7% Asia Pacific 25.1 4.4 25.9 5.1 -2.9% -8.9% +4
Slide 29: H1 2022 Net Sales Performance by Product
H1 2022 NET SALES PERFORMANCE BY PRODUCT Sunglasses Prescription frames Other 51.5% 38.9% 9.6% H1 2022 vs 2021 @cFX +6.2% +2.2% +6.4% +33.7% 570.9 €M +13.9%1 +5.0%1 +33.6%1 +12.0%1 Q2 2022 vs 2021 @cFX 288.3 €M +4.0% -0.4% +4.5% +48.6% +9.8%1 +9.2%1 +4.6%1 +48.2%1 1 ORGANIC SALES PERFORMANCE INCLUDE
Slide 30: Q2 2022 Economic Trading Update
Q2 2022 ECONOMIC TRADING UPDATE % on % on % Change Key Economic highlights - in Euro million Q2 2022 net sales Q2 2021 net sales 2022 vs 2021 Net sales 288.3 259.4 +11.2% Reported at cFX +4.0% Organic1 at cFX +9.8% Gross Profit 162.8 56.5% 135.6 52.3% +20.0% EBITDA 33.3 11.6% 37.7 14.5% -11.5% Adjus
Slide 31: H1 Income Statement
H1 INCOME STATEMENT (Euro in millions) H1 2022 % H1 2021 % % Change Net sales 570.9 100.0 510.7 100.0 11.8% Cost of sales (252.6) (44.2) (248.5) (48.7) -1.6% Gross profit 318.3 55.8 262.2 51.3 21.4% Selling and marketing expenses (219.0) (38.4) (188.1) (36.8) -16.4% General and administrative expens
Slide 32: Balance Sheet as of June 30, 2022
BALANCE SHEET AS OF JUNE 30, 2022 (Euro in millions) June 30, 2022 December 31, 2021 Change Net working capital 291.9 214.9 77.0 Tangible, Right of Use, and Intangible fixed assets 293.4 294.2 (0.8) Goodwill 35.8 32.9 3.0 Non-current assets held for sale 2.3 2.3 0.0 Other assets / (liabilities), net
Slide 33: Working Capital as of June 30, 2022
WORKING CAPITAL AS OF JUNE 30, 2022 (Euro in millions) June 30, 2022 December 31, 2021 Change Trade receivables 241.1 173.5 67.6 Inventories 252.7 234.4 18.3 Trade payables (202.0) (193.1) (8.9) Net working capital 291.9 214.9 77.0 % on net sales 28.3% 22.2% 26
Slide 34: H1 2022 Cash Flow Statement
H1 2022 CASH FLOW STATEMENT (Euro in millions) H1 2022 H1 2021 Cash flow from operating activities before changes in working capital 52.0 19.5 Changes in working capital (55.6) (9.4) Cash flow from operating activities (3.6) 10.1 Cash flow for organic investment activities (6.2) (9.8) Cash payments
Slide 35: Exchange Rates
EXCHANGE RATES (Appreciation)/ (Appreciation)/ As of Average for Depreciation Depreciation June 30, December 31, First semester First semester Currency Code % % 2022 2021 2022 2021 US Dollar USD 1.0387 1.1326 -8.3% 1.0934 1.2054 -9.3% Hong-Kong Dollar HKD 8.1493 8.8333 -7.7% 8.5559 9.3551 -8.5% Swis
Slide 36: Brands Portfolio
By BRAN DS PORTFOLIO Safilo ‘SEE THE WORLD AT ITS BEST BOSS SMITH MOSCHINO Polaroid B EYEWEAR by DAVID BECKHAM @D MISSONI PRIVE REVAUX Juicy Couture JIMMY CHOO ISABEL MARANT TOMMY SBHILFIGER DSQUARED2 CHIARA FERRAGNI kate spade New Yore TOMMY JEANS: HUGO pierre cardin an CAROLINA HERRERA MARC JACOBS