Safilo Group S.p.a. · MIL:SFL
Safilo — Q1 2020 Earnings Presentation
21 slides from Safilo's earnings presentation, May 6, 2020
Slide 1: Q1 2020 Trading Update
Q1 2020 TRADING UPDATE May 6, 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: A Period of Unprecedented Challenges
A PERIOD OF UNPRECEDENTED CHALLENGES In these extraordinary circumstances, we have been focused on: PROTECTING THE HEALTH AND SAFETY OF ALL OUR PEOPLE Immediate and rigorous implementation of all the safety and prevention regulations provided by government protocols SUPPORTING OUR COMMUNITIES AND ME
Slide 4: A Positive Start to the Year
A POSITIVE START TO THE YEAR… January and February up mid-single digit, driven by: ➢ the double-digit performance of Carrera, Polaroid, Smith and core licenses; ➢ the launch of our new partnerships – Beckham, Levi’s and Missoni 3
Slide 5: Abruptly Interrupted in March by the Coronavirus Pandemic
…ABRUPTLY INTERRUPTED IN MARCH BY THE CORONAVIRUS PANDEMIC After Italy, from mid-March, the spread of Covid-19 escalated across Europe and the USA, with the most severe measures of national lockdowns and halt of business heavily impacting the last two weeks of the month and the overall Q1 performanc
Slide 6: Economic and Financial Highlights (post-IFRS 16)
ECONOMIC AND FINANCIAL HIGHLIGHTS (post-IFRS 16) 5
Slide 7: Net Sales
NET SALES in millions of Euro and % change vs Q1 2019 Q1 2019 Q1 2020 ➢ Drop of volumes, while price/mix and forex slightly positive ➢ Wholesale business1 -10.8% • Own core brands -3.4% 247.3 221.1 • Online business up +25% NET SALES -10.6% cur.FX -11.5% const.FX • Tommy Hilfiger, Hugo Boss and Jimm
Slide 8: Net Sales by Geography
NET SALES BY GEOGRAPHY in millions of Euro and % change vs Q1 2019 Q1 2020 ➢ Wholesale business1 -12.2%; EUROPE ➢ Italy,Spain and France, first markets to suffer the 107.7 health emergency and stop of business activities; 48.7% of net sales ➢ Sales in Germany, North Europe and East Europe less -13.5
Slide 9: Net Sales by Geography
NET SALES BY GEOGRAPHY in millions of Euro and % change vs Q1 2019 Q1 2020 ASIA PACIFIC ➢ Halt of tourism and early shut down of stores impacted travel 6.7% of net sales 14.9 retail channel, business to chains and fashion house boutiques; -15.9% cur.FX ➢ Sales to independent stores in China, relativ
Slide 10: Gross Profit
GROSS PROFIT Inefficient supply chain dynamics due to production interruptions and sourcing activities in China in millions of Euro, % on sales, %/bps change vs Q1 2019 Q1 2019 Q1 2020 ➢ Subdued factory results on lower production 130.2 109.4 volumes and supply chain disruption; GROSS PROFIT 52.7% 4
Slide 11: Adjusted EBITDA (post-IFRS 16)
ADJUSTED2 EBITDA (post-IFRS 16) Disproportionate contraction of Group operating performance due to operating deleverage in millions of Euro, % on sales, %/bps change vs Q1 2019 Q1 2019 Q1 2020 ➢ Strong operating deleverage in March as one ADJUSTED2 20.0 5.8 of the highest months for sales and market
Slide 12: Group Net Debt (post-IFRS 16)
GROUP NET DEBT (post-IFRS 16) Higher Group Net Debt reflecting acquisition of Privé Revaux in February 2020 in millions of Euro Mar.31, 2019 Dec.31, 2019 March 31, 2020 ➢ Weak economic results GROUP ➢ Strict WC management, with seasonal absorption lower than same period last NET DEBT year, following
Slide 13: Business Update in Relation to the Covid-19 Pandemic
BUSINESS UPDATE IN RELATION TO THE COVID-19 PANDEMIC ➢ Further significant deceleration of business activity in April, reflecting the almost complete shutdown of the various distribution channels in which the Group sells its products. Online business the exception, together with the significant impr
Slide 14: #United4EyeCare
#UNITED4EYECARE Safilo #united4eyecare is Safilo’s global corporate initiative that embraces all the activities put in place in different countries by Safilo and its brands for the production and donation of safety glasses, goggles and face shields for health care professionals. Eyesight care and pr
Slide 15: Brand initiatives supporting healthcare workers
Polaroid MLL Sau Hs eyewear In efforts to support local and national personal protective equipment (PPE) shortages across the US in the wake of COVID-19, Smith joins the Goggles For Docs movement to provide new and used ski goggles to healthcare workers who currently have no eyewear protection while
Slide 16: Appendices
Safilo Appendices 15
Slide 17: Notes to the presentation
Notes to the presentation 1. The wholesale business excludes Kering supply business, recorded within the geographical area of Europe. 2. In Q1 2020, the adjusted EBITDA excludes non-recurring costs for Euro 2.4 million, due to restructuring expenses related to the ongoing cost saving program. In Q1
Slide 18: Net Sales by geographic area
Net Sales by geographic area % Change % Change (Euro million) Q1 2020 % Q1 2019 % at current forex at constant forex Europe 107.7 48.7% 124.6 50.4% -13.5% -13.5% North America 84.4 38.2% 88.9 36.0% -5.1% -7.8% Asia Pacific 14.9 6.7% 17.7 7.2% -15.9% -17.5% Rest of the world 14.1 6.4% 16.1 6.5% -12.5
Slide 19: Economic highlights
Economic highlights Q1 2020 Q1 2019 % Change (Euro in millions) Net sales 221.1 247.3 -10.6% Gross profit 109.4 130.2 -16.0% % on net sales 49.5% 52.7% EBITDA 3.4 18.9 -82.0% % on net sales 1.5% 7.6% Adjusted2 EBITDA 5.8 20.0 -70.8% % on net sales 2.6% 8.1% IFRS 16 impact on EBITDA 3.1 3.4 18
Slide 20: Exchange Rates
Exchange Rates (Appreciation)/ (Appreciation)/ As of Average for Depreciation Depreciation March 31, December 31, March 31, March 31, Currency Code % % 2020 2019 2020 2019 US Dollar USD 1.0956 1.1234 -2.5% 1.1027 1.1358 -2.9% Hong-Kong Dollar HKD 8.4945 8.7473 -2.9% 8.5686 8.9116 -3.8% Swiss Franc C
Slide 21: Brand Portfolio
Brand Portfolio ** * from 2021 ** signed and communicated on December 8, 2019 and still to be closed at the present date 20