Safilo has reported an adjusted net profit of €22.9 million in the first half of 2016, representing a +130.6% increase. The result was largely because of “positive dynamics in net financial charges”, the company said.
Net sales declined -3.5% to €651.1 million at current exchange rates and -2.1% at constant currencies, although sales of the company’s going-forward brands portfolio increased +5.3%.
Adjusted EBITDA was down -7.0% to €58.3 million. The adjusted EBITDA margin of 8.9% was 40 basis points lower than the 9.3% posted in the first half of 2015, primarily due to lower sales.
Adjusted operating profit decreased -12.8% to €37.5 million.
Safilo financial results for the first half of 2016
The second quarter saw a total net sales decline of -0.3% to €349.5 million at current exchange rates but +2.0% growth at constant exchange rates. Safilo said this reflected the improved sales performance of its going-forward brands portfolio, which increased +9.0% in the quarter at constant exchange rates. The company said this offset the negative impact of the brands that it has stopped or will stop servicing.
“Progress was particularly evident in Europe as well as in the Group’s core business in North America, while Asia remained subdued,” the company stated. Travel retail was described by Safilo as a “key restrainer” in Asia.
In the first half of 2016, the company’s gross profit declined -3.7% to €394.6 million. Its gross profit margin of 60.6% of sales was largely in line with the same period in 2015. In the second quarter of the year, gross profit margin stood at 60.2% of sales compared to 60.9% in the second quarter of 2015.
Safilo financial results for the second quarter of 2016
“In the first six months, our going forward brands portfolio made good progress, growing by +5.3% at constant exchange rates, thanks to the broad based positive trends across the different market segments in which we are active. In the second quarter, we achieved sales acceleration, recovering a considerable part of the first quarter performance driven by the service shortfalls that had prevented us to fully leverage the sales opportunities of our order book,” said Safilo CEO Luisa Delgado.
“Our gross margin was in line with last year while we progressed our supply network modernisation [which is] focused on insourcing production into our own worldwide plant network and reshoring back to Italy, and simplifying our manufacturing and logistic flows. At the operating level, we progressed with the implementation of our cost savings programme to improve our overheads productivity.”
Safilo net sales by geographic area in the first half of 2016
