Safilo Group S.p.a. · MIL:SFL
Safilo — FY2020 Earnings Presentation
35 slides from Safilo's earnings presentation, Mar 11, 2021
Slide 1: 2020 Results
Safilo 2020 RESULTS March 11, 2021
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 year of unprecedented challenges due to the Covid-19 pandemic
A YEAR OF UNPRECEDENTED CHALLENGES DUE TO THE COVID-19 PANDEMIC “2020 presented the most challenging market conditions we have ever experienced and I want to express my utmost gratitude to all our people, in the plants and in our offices around the world, for their dedication and the excellent job a
Slide 4: After Q3 rebound, recovery of sales and earnings continued in Q4
AFTER Q3 REBOUND, RECOVERY OF SALES AND EARNINGS CONTINUED IN Q4 …NOTWITHSTANDING RENEWED EXTERNAL CHALLENGES DUE TO THE SECOND WAVE OF COVID-19 INFECTIONS ➢ FULL CONTRIBUTION OF OUR RECENT ACQUISITIONS: • Strong online business continuing in a lower seasonal quarter ➢ SEQUENTIAL IMPROVEMENT OF OUR
Slide 5: 2020 Economic and Financial Highlights
2020 ECONOMIC AND FINANCIAL HIGHLIGHTS FY RESULTS REFLECT BUSINESS REBOUND POST H1 AND DECISIVE COST AND NWC INTERVENTIONS (in millions of Euro, % change vs same periods of 2019/value change vs Dec.19) FY 2020 H2 2020 Q4 2020 Q3 2020 H1 2020 NET SALES 780.3 444.7 225.6 219.1 335.6 % change @constant
Slide 6: Advancing our medium-term strategic agenda
ADVANCING OUR MEDIUM-TERM STRATEGIC AGENDA WE REMAINED FOCUSED ON THE KEY STRATEGIES OF OUR 2019 GROUP BUSINESS PLAN RENEW OUR BRANDS/ CHANNELS/ PRODUCT MIX ✓ Launch Levi’s, David Beckham, Missoni, Ports ✓ Prepare Isabel Marant and Under Armour for 2021 ✓ Phase-out of Dior ✓ Blenders, Privé Revaux a
Slide 7: Sales Performance
2020 SALES PERFORMANCE
Slide 8: Total Net Sales
2020 SALES PERFORMANCE TOTAL NET SALES (in millions of Euro and % change vs same period of 2019) H2 SALES REBOUND DRIVEN BY ACQUISITIONS AND THE SEQUENTIAL IMPROVEMENT OF THE ORGANIC1 BUSINESS FY 2020 of which H2 2020 of which Q4 2020 of which M&A ORGANIC1 M&A ORGANIC1 M&A ORGANIC1 NET SALES 780.3 6
Slide 9: Our Total Online Business
2020 SALES PERFORMANCE OUR TOTAL ONLINE BUSINESS (% change vs 2019) AS CONSUMERS SHIFT TO DIGITAL/SOCIAL AND D2C ECOMMERCE, OUR TOTAL ONLINE BUSINESS SHARPLY GREW IN 2020, REACHING CA €100M OR 13% OF TOTAL NET SALES SAFILO’S TOTAL ONLINE BUSINESS Pro-forma performance4 of our acquisitions +175.5% 10
Slide 10: North America
2020 SALES PERFORMANCE NORTH AMERICA (in millions of Euro and % change vs same period of 2019) UNITED STATES OUR BEST PERFORMING REGION BEHIND THE SIGNIFICANT H2 REBOUND DRIVEN BY ACQUISITIONS & OUR ORGANIC1 BUSINESS. LEVERAGING A DYNAMIC MARKET AND STRONG CAPABILITIES TO BETTER SERVE OUR WHOLESALE
Slide 11: Europe
2020 SALES PERFORMANCE EUROPE (in millions of Euro and % change vs same period of 2019) BUSINESS RECOVERY IN EUROPE SLOWER, IMPACTED BY SECOND WAVE OF THE COVID-19 PANDEMIC. Q4 STILL DRIVEN BY LOW SUNGLASSES AND TRADING IN BOUTIQUES AND TRAVEL RETAIL, WHILE IPP AND OPTICAL BUSINESS OUTPERFORMED. FY
Slide 12: Asia Pacific
2020 SALES PERFORMANCE ASIA PACIFIC (in millions of Euro and % change vs same period of 2019) HEALTHY INTERNAL CONSUMPTION AND LAUNCH OF NEW BRANDS SUPPORTED SURGE OF BUSINESS IN CHINA. FY PERFORMANCE ALMOST COMPLETELY DRIVEN BY COLLAPSE OF TRAVEL RETAIL ACTIVITIES DUE TO BANS ON TRAVEL. FY 2020 H2
Slide 13: Rest of the World
2020 SALES PERFORMANCE REST OF THE WORLD (in millions of Euro and % change vs same period of 2019) MILDER BUSINESS DECLINE IN Q4 SUPPORTED BY BRAZIL AND MEXICO AND FIRST SIGNS OF RECOVERY IN IMEA MARKETS. FY 2020 H2 2020 Q4 2020 Q3 2020 H1 2020 NET SALES 46.8 28.4 17.5 10.9 18.4 % change @current FX
Slide 14: Economic Performance
2020 ECONOMIC PERFORMANCE
Slide 15: 2020 Key Drivers of Our Operating Results
2020 ECONOMIC PERFORMANCE 2020 KEY DRIVERS OF OUR OPERATING RESULTS 1) OPERATING LEVERAGE STRONGLY IMPACTED BY SALES SETBACK IN H1, NORMALIZING IN H2 BEHIND BUSINESS RECOVERY 2) STRUCTURAL OVERHEAD COST SAVINGS OF €15M, OUT OF THE GROUP’S MEDIUM-TERM PLAN OF €20M 3) ONE-TIME COVID-19 RELATED SAVINGS
Slide 16: Industrial Performance
2020 ECONOMIC PERFORMANCE INDUSTRIAL PERFORMANCE (in millions of Euro, %/bps change vs same period of 2019) H2 GROSS MARGIN STARTING TO RECOVER AFTER H1 IMPACT, REFLECTING A STRUCTURAL DECLINE IN D&A AND ACCRETIVE D2C ACQUISITION IMPACT. Q4 CONSTRAINED BY NEGATIVE SALES MIX AND NON-RECURRING COSTS F
Slide 17: Adjusted Operating Performance
2020 ECONOMIC PERFORMANCE ADJUSTED2 OPERATING PERFORMANCE (in millions of Euro, %/bps,pps change vs same period of 2019) IN H2 2020, SG&A EXPENSES BENEFITTED FROM LOWER ROYALTIES AND MARKETING CONTRIBUTIONS OFFSETTING ADDITIONAL COSTS ASSOCIATED WITH ACQUISITIONS, AND HIGHER LOGISTICS COSTS FY 2020
Slide 18: Adjusted Net Performance
2020 ECONOMIC PERFORMANCE ADJUSTED2 NET PERFORMANCE (in millions of Euro, %/bps,pps change vs same period of 2019) BELOW THE ADJUSTED2 OPERATING LINE, SAFILO’S ADJUSTED2 NET RESULT REFLECTED: 1. HIGHER NET FINANCIAL CHARGES DUE TO NEGATIVE EXCHANGE RATES DIFFERENCES AND HIGHER AVERAGE GROSS DEBT; 2.
Slide 19: Financial Performance
2020 FINANCIAL PERFORMANCE
Slide 20: Free Cash Flow
2020 FINANCIAL PERFORMANCE FREE CASH FLOW (in millions of Euro) STRICT WORKING CAPITAL CONTROL - REDUCTION OF INVENTORIES AND NORMALIZATION OF CASH COLLECTION/ PAYABLES - DROVE FY POSITIVE OPERATING CASH FLOW. CASH ABSORPTION (EX M&A) STRONGLY IMPACTED BY THE COVID-19 PANDEMIC. FY 2020 FY 2019 CASH
Slide 21: Group Net Debt
2020 FINANCIAL PERFORMANCE GROUP NET DEBT (in millions of Euro) KEY COMPONENTS OF THE GROUP DEBT Dec.31, 2020 Dec.31, 2019 GROSS DEBT 311.0 139.0 - IFRS-16 effect 43.1 47.0 - Shareholder Loan for the acquisitions 93.5 - - Term Loan facility, guaranteed by SACE 108.0 - - “TL & RCF 2018” facility 65.0
Slide 22: Business Evolutions After the Year-End
BUSINESS EVOLUTIONS AFTER THE YEAR-END
Slide 23: Further Actions of Our Industrial Plan
INDUSTRIAL PLAN UPDATE FURTHER ACTIONS OF OUR INDUSTRIAL PLAN IN LINE WITH THE BUSINESS OBJECTIVE OF IMPROVING THE EFFICIENCY OF THE GROUP MANUFACTURING FOOTPRINT, TO ENABLE GROSS MARGIN RECOVERY AND THE GROUP ECONOMIC & FINANCIAL SOLIDITY REALIGNING OUR MANUFACTURING CAPACITY TO THE CURRENT AND FUT
Slide 24: Business Update in Relation to the Covid-19 Pandemic
BUSINESS UPDATE IN RELATION TO THE COVID-19 PANDEMIC ✓ The business environment at the beginning of 2021 remained affected by the containment actions still in place in many countries to halt the spread of Covid-19 and the uncertainties over the scale and timing of the expected rebound in consumer de
Slide 25: Q&A
Q&A
Slide 26: Full Year 2020 Appendices
FULL YEAR 2020 APPENDICES
Slide 27: Notes to the Presentation
NOTES TO THE PRESENTATION 1 The organic business excludes the acquisitions of Privé Revaux and Blenders Eyewear, reported in the geographical area of North America, and the impact of exchange rates. In 2020, Safilo Group consolidated the above businesses as per the respective acquisition dates of Fe
Slide 28: Net Sales by Geographic Area
NET SALES BY GEOGRAPHIC AREA % change % change % change % change (Euro in millions) FY 2020 % FY 2019 % (Euro in millions) H2 2020 % H2 2019 % at current forex at constant forex at current forex at constant forex Europe 330.4 42.3 448.8 47.8 -26.4% -25.9% Europe 165.4 37.2 202.5 45.7 -18.3% -17.3% N
Slide 29: Income Statement
INCOME STATEMENT (Euro in Millions) 2020 % 2019 % % Change H2 2020 % H2 2019 % % Change Net sales 780.3 100.0 939.0 100.0 -16.9% 444.7 100.0 443.1 100.0 0.4% Cost of sales (417.8) (53.5) (462.1) (49.2) -9.6% (230.8) (51.9) (232.4) (52.4) -0.7% Gross profit 362.5 46.5 476.9 50.8 -24.0% 213.9 48.1 210
Slide 30: Q4 Economic KPIs
Q4 ECONOMIC KPIs (Euro in Millions) Q4 2020 % Q4 2019 % % Change Net sales 225.6 100.0 230.4 100.0 -2.1% Gross profit 101.3 44.9 101.8 44.2 -0.4% EBITDA 5.7 2.5 (17.9) (7.8) n.s. 2 Adjusted EBITDA 15.0 6.6 11.1 4.8 34.5% 23
Slide 31: Balance Sheet
BALANCE SHEET (Euro in Millions) December 31, 2020 December 31, 2019 Change Net working capital 188.5 250.8 (62.3) Tangible, Right of Use, and Intangible fixed assets 316.5 240.6 76.0 Goodwill 30.3 0.0 30.3 Non-current assets held for sale 6.6 5.5 1.0 Other assets / (liabilities), net (133.5) (80.1)
Slide 32: Net Working Capital
NET WORKING CAPITAL (Euro in Millions) December 31, 2020 December 31, 2019 Change Trade receivables 172.6 188.2 (15.5) Inventories 197.3 235.8 (38.5) Trade payables (181.4) (173.1) (8.3) Net working capital 188.5 250.8 (62.3) % on net sales 24.2% 26.7% 25
Slide 33: Free Cash Flow
FREE CASH FLOW 2020 2019 (Euro in Millions) Cash flow from operating activities before changes in working capital (41.6) 36.8 Changes in working capital 42.5 (10.2) Cash flow operating activities 0.9 26.5 Cash flow investing activities (21.4) (30.6) Cash flow from repayment principal portion of IFRS
Slide 34: Exchange Rates
EXCHANGE RATES (Appreciation) (Appreciation) As of Average for /Depreciation /Depreciation December 31, December 31, Currency Code % 2020 2019 % 2020 2019 US Dollar USD 1.2271 1.1234 9.2% 1.1422 1.1195 2.0% Hong-Kong Dollar HKD 9.5142 8.7473 8.8% 8.8587 8.7715 1.0% Swiss Franc CHF 1.0802 1.0854 -0.5
Slide 35: Brands Portfolio
Safilo BRANDS PORTFOLIO CARRERA cVewean aimee tase BOSS ISABEL MARANT MISSONI FENDI SMITH JIMMY CHOO MOSCHINO P@RTS ELIE SAAB . GIV ENC HY Polaroid TOMMY SEHILFIGER B kate spade rag tone THE _.@... # TOMMY REBECCA MINKOFF warc JACOBS Fuicpy Couture MISSONT A Levis | pierre cardin uz claiborne FOSSIL