Safilo Group S.p.a. · MIL:SFL
Safilo — H1 2024 Earnings Presentation
25 slides from Safilo's earnings presentation, Aug 1, 2024
Slide 1: H1 2024 Results
H1 2024 RESULTS AUGUST 1, 2024
Slide 2: Disclaimer
// 2 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 fa
Slide 3: CEO statement on first semester
// 3 “This first semester ended by confirming the main market dynamics and trends by brand recorded in Q1. In the second quarter, sales performance was more negatively impacted by the Jimmy Choo exit, while benefitting from the significant growth of Carrera and David Beckham. Notwithstanding a business
Slide 4: Business Highlights
// 4 BUSINESS HIGHLIGHTS • IN H1, EUROPE HELD UP DESPITE Q2 SLOWDOWN DUE TO POOR WEATHER CONDITIONS • IN NORTH AMERICA, THE EYEWEAR BUSINESS IMPROVED COMPARED TO Q1, WHILE SMITH SPORTS BUSINESS WAS STILL WEAK • STRONG MOMENTUM OF CARRERA AND DAVID BECKHAM CONTINUING • SHARE OF BUSINESS FROM HOME BRA
Slide 5: Net Sales Performance
// 5 N E T S A L E S P E R F O R M A N C E H1 2024 Q2 2024 532.0 €M 254.8 €M -3.3% reported -3.1% reported -2.4% @cFX -3.1% @cFX weather conditions • IN Q2, JIMMY CHOO ’S EXIT IMPACT WEIGHED MORE THAN IN Q1 • CARRERA AND DAVID BECKHAM UP DOUBLE-DIGITS • CAROLINA HERRERA AND MARC JACOBS CONFIRMED POS
Slide 6: Sales Performance in Europe
// 6 SALES PERFORMANCE IN EUROPE H1 2024 Q2 2024 239.1 €M 113.8 €M +1.4% reported -0.3% reported +3.4% @cFX +0.8% @cFX • IN Q2, EUROPE DECELERATED V S Q1 DUE TO POOR WEATHER CONDITIONS IN CORE MARKETS AND HIGHER IMPACT FROM JIMMY CHOO EXIT • CARRERA, DAVID BECKHAM CONTINUED TO OUTPERFORM • POLAROID
Slide 7: Sales Performance in North America
// 7 SALES PERFORMANCE IN NORTH AMERICA H1 2024 Q2 2024 217.6 €M 103.2 €M -6.0% reported -3.4% reported -5.9% @cFX -4.4% @cFX • NET OF JIMMY CHOO EXIT, PERFORMANCE IN NA IMPROVED FROM MID-SINGLE DIGIT NEGATIVE IN Q1 TO FLAT IN Q2 • INITIAL RECOVERY OF THE EYEWEAR BUSINESS, WITH INDEPENDENT OPTICIANS
Slide 8: Sales Performance in Asia & Pacific
// 8 SALES PERFORMANCE IN ASIA & PACIFIC H1 2024 Q2 2024 26.4 €M 14.5 €M -7.5% reported -12.1% reported -5.6% @cFX -11.3% @cFX weather conditions • TOUGH COMPARISON WITH Q2 2023 (+38% VS Q2 2022) • STILL POSITIVE MOMENTUM IN CHINA DRIVEN BY PORTS AND POLAROID • WEAK SALES TREND AT DISTRIBUTORS IN SO
Slide 9: Sales Performance in the Rest of the World
// 9 SALES PERFORMANCE IN THE REST OF THE WORLD H1 2024 Q2 2024 48.8 €M 23.3 €M -10.2% reported -8.9% reported -11.3% @cFX -9.6% @cFX weather conditions • CHALLENGING TRAVEL RETAIL IN LATIN AMERICA • POSITIVE TRENDS IN MIDDLE-EAST AND AFRICA • SALES IN INDIA NORMALIZING AFTER STRONG GROWTH LAST YEAR
Slide 10: Economic Performance: Gross Margin
// 10 E C O N O M I C P E R F O R M A N C E Gross Margin H1 2024 Q2 2024 60.0% 60.1% +120 bps +100 bps weather conditions • HIGHER PRODUCTION EFFICIENCY DUE TO 2023 INDUSTRIAL RESTRUCTURING • POSITIVE PRICE/MIX EFFECT • LOWER DILUTION FROM PHASE-OUT SALES IN Q2
Slide 11: Economic Performance: Adj. EBITDA Margin
// 11 E C O N O M I C P E R F O R M A N C E Adj.1EBITDA Margin H1 2024 Q2 2024 10.8% 10.1% +40 bps +60 bps weather conditions • NORMALIZATION OF IT INVESTMENTS AND MARKETING EXPENSES • STILL UNFAVOURABLE OPERATING LEVERAGE
Slide 12: Economic Performance: Adj. Net Results
// 12 E C O N O M I C P E R F O R M A N C E Adj.1Net Results H1 2024 2 4 . 2 €M vs 6.9 €M weather conditions • NET OF THE DIFFERENT DYNAMICS OF THE PUT & CALL OPTIONS ON MINORITY INTERESTS, NET RESULT IMPROVED BY CA +50% • LOWER NET FINANCIAL CHARGES DUE TO LOWER AVERAGE NET DEBT
Slide 13: Financial Performance: Free Cash Flow
// 13 F I N A N C I A L P E R F O R M A N C E Free Cash Flow H1 2024 - 19 . 0 €M vs 9.9 €M weather conditions • IN H1, CASH FLOW FROM OPERATING ACTIVITIES TO 27.3 €M F R O M 21.1 €M • IN Q2, POSITIVE CASH FLOW FROM OPERATING ACTIVITIES OF ̴ 21 €M DRIVEN BY SOLID ECONOMIC PERFORMANCE AND POSITIVE WC
Slide 14: Financial Performance: Group Net Debt
// 14 F I N A N C I A L P E R F O R M A N C E Group Net Debt as at June 30, 2024 1 0 0 . 4 €M vs 82.7 €M at Dec.31, 2023 62.6 €M pre IFRS-16 vs 43.7 €M Financial leverage, also pre-IFRIC SaaS, of 0.7x
Slide 15: Q&A
Q&A
Slide 16: Appendices
Appendices
Slide 17: Notes to the Presentation
// 17 NOTES TO THE PRESENTATION 1 In H1 2024, the adjusted economic results excluded non-recurring costs for Euro 7.0 million at the EBIT and EBITDA level mainly due to the costs related to a terminated license agreement and some special projects. In Q2 2024, the adjusted economic results exclude no
Slide 18: Net Sales by Geographical Area
// 18 NET SALES BY GEOGRAPHICAL AREA Change at Change at (Euro million) H1 2024 % H1 2023 % current forex constant forex North America 217.6 40.9 231.5 42.1 -6.0% -5.9% Europe 239.1 44.9 235.7 42.8 +1.4% +3.4% Asia Pacific 26.4 5.0 28.6 5.2 -7.5% -5.6% Rest of the world 48.8 9.2 54.4 9.9 -10.2% -11.
Slide 19: Q2 2024 Trading Update
// 19 Q2 2024 TRADING UPDATE % on % on Key Economic highlights - in Euro million Q2 2024 net sales Q2 2023 net sales % Change Net sales 254.8 263.0 -3.1% Performance at cFX -3.1% Gross Profit 153.0 60.1% 150.8 57.3% +1.5% 1 Adjusted Gross Profit 153.0 60.1% 155.3 59.1% -1.5% EBITDA 22.5 8.8% 15.3 5.
Slide 20: H1 2024 Income Statement
// 20 H1 2024 INCOME STATEMENT % on % on % Change Key Economic highlights - in Euro million H1 2024 net sales H1 2023 net sales 2024 vs 2023 Net sales 532.0 550.1 -3.3% Performance at cFX -2.4% Gross profit 319.2 60.0% 318.6 57.9% +0.2% Adjusted 1 Gross profit 319.2 60.0% 323.6 58.8% -1.4% EBITDA 50
Slide 21: Balance Sheet as of June 30, 2024
// 21 BALANCE SHEET AS OF JUNE 30, 2024 June 30, 2024 December 31, 2023 Change Net working capital 273.9 260.0 13.9 Tangible, Right of Use, and Intangible fixed assets 259.1 230.9 28.3 Goodwill 34.8 33.7 1.1 Other assets / (liabilities), net (43.3) (46.0) 2.7 Net invested capital 524.5 478.5 46.0 Ne
Slide 22: Working Capital as of June 30, 2024
// 22 WORKING CAPITAL AS OF JUNE 30, 2024 June 30, 2024 December 31, 2023 Change Trade receivables 239.3 203.1 36.2 Inventories 197.4 229.0 (31.6) Trade payables (162.8) (172.1) 9.3 Net working capital 273.9 260.0 13.9 % on net sales 27.2% 25.4%
Slide 23: H1 2024 Free Cash Flow
// 23 H1 2024 FREE CASH FLOW Free Cash Flow - in Euro million H1 2024 H1 2023 Cash flow from operating activities before changes in working capital 37.4 35.8 Changes in working capital (10.1) (14.7) Cash flow from operating activities 27.3 21.1 Cash flow for organic investment activities (41.1) (6.2
Slide 24: Exchange Rates
// 24 EXCHANGE RATES (Appreciation)/ (Appreciation)/ As of Depreciation Average for Depreciation Currency Code June 30, 2024 December 31, 2023 % H1 2024 H1 2023 % US Dollar USD 1.0705 1.1050 -3.1% 1.0813 1.0807 0.1% Hong-Kong Dollar HKD 8.3594 8.6314 -3.2% 8.4540 8.4709 -0.2% Swiss Franc CHF 0.9634
Slide 25: Strong Brand Portfolio
// 25 STRONG BRAND PORTFOLIO TO REACH A BROAD AUDIENCE OF TARGET CONSUMERS • The right offer for all distribution channels, for all customer types • Centered on contemporary segment where the highest demand of eyewear is • Broad based offer across genders, ages, categories & price segments • Appeali