Italian eyewear specialist Safilo Group has posted net sales of €492.2 million in the first half of 2018, a -4.3% year-on-year decrease at constant exchange rates.
Gross profit in the first half fell -11.5% to €254.1 million, and adjusted EBITDA was €25.1 million, a -9.5% decrease.
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Safilo said the first half performance reflected the decline of the European sunglass sales in the second quarter and the continuing weakness of the business in North America. The company picked out growth in emerging markets and in the prescription eyewear business as first half highlights.
Safilo expects business trends to improve in the second half, but said business seasonality would prevent a full recovery.
The company now expects a decline in net sales of approximately -3% at constant exchange rates in 2018 compared to 2017, and an adjusted EBITDA margin of between -4% and -5% of net sales compared to -4% last year.
“Our objective is to improve the performance of our company, focusing on few, very clear, priorities,” stated Safilo Chief Executive Officer Angelo Trocchia. “First and foremost, we need to return to grow our top line, exploiting more and better the core strengths of the group. [These are] our product creation and development capabilities, our 140 years of eyewear manufacturing experience, and our deep worldwide distribution network.
“We need to focus on our go to market execution, combining commercial capabilities, brand execution and customer service and leveraging our strong portfolio of brands. [In] regards to which I am glad to announce the renewal of the Fossil licence (until 2023) and the extension of the Kate Spade licence (until 2020).”
Trocchia said Safilo would work on “reigniting the engines of growth” in the second half. “We are in the process of creating a leaner organisation and therefore an agile, performance-based and customer-centric culture.
“[We must be] able to respond more effectively to key opportunities and risks, and as a consequence significantly align our cost structure to the scale of the group, to restore an adequate and sustainable level of profitability.”
