BUSINESS: Financial Safilo Group Approves Q4 and Year End 2013 Financial Results By Staff Friday, March 7, 2014 12:23 AM PADUA, Italy--The board of directors of Safilo Group S.p.A. (SFL:MI) has approved the company’s consolidated financial statements for the fourth quarter and year end 2013. “We are satisfied with our 2013 performance,” said Luisa Delgado, CEO of the Safilo Group. “The priority has been to grow organically so as to replace as much as possible the Armani licenses through broad based organic growth, focus on the profitability of our business, and consolidate the group's financial strength. We have achieved these objectives, showing that our portfolio of brands is highly diversified and competitive, our organization agile and resilient, and our opportunities for further business development many.” Net sales during the last three months of the year amount to €279.7 million, compared with €312.9 million in the same period of 2012, a decrease of 10.6 percent. Net sales in the wholesale division totaled €261.5 million, compared with €293.7 million in the same quarter of 2012, a decrease of 10.9 percent. Solstice store sales were €18.2 million, a decrease of 5.3 percent compared with the same quarter of 2012. Net profit for the fourth quarter more than doubled with respect to the same period of 2012, rising to €11.7 million from €5.0 million for 2012. Sales in the core sunglass and prescription frame segments, excluding the sales of the Armani brands not renewed at the end of 2012 and the Polaroid business recorded in the first quarter of 2013, saw organic growth the company said. The Group’s net sales for the full year totaled €1,121.5 million for 2013, compared with €1,175.3 million in 2012, a decrease of 4.6 percent. Net sales in the wholesale business were down 4.8 percent to €1,041.5 million from the €1,094.6 million recorded in 2012; while the Solstice retail business in the U.S. recorded stable sales of €80 million. Net profit for the year amounted to €39.0 million, up 50.7 percent on 2012’s €25.9 million. According to the company, Safilo recorded significant organic growth over the year, allowing the company to effectively counter the two dominant themes, one being the negative impact of exchange rates and the other the phase-out of brands in 2012, which had generated a particularly high volume of sales in the fourth quarter of that year. Additionally, the group’s operating result for 2013 was affected by non-recurring expenses of €10.1 million, including €6.2 million due to the change in senior management in October 2013 and €3.9 million for a number of restructuring initiatives in Europe. Group net profit also reflects provisioning for tax liabilities resulting from disputes arising in Italy in relation to the years of assessment from 2007 to 2011, totaling €14 million, reported in VMail on March 3. A geographical analysis shows that total revenues for North America in the fourth quarter amount to €108.4 million, compared with the €125.0 million of 2012, a decrease of 13.3 percent, which reflects the positive performance of organic sales in the North American market, accompanied by a slowdown in Latin American countries. Total revenues in the North America for the full year amount to €457.9 million, compared with €488.7 million in 2012, down 6.3 percent. Safilo specifically pointed to their leading brands in the high-end category, Gucci and Dior, as those that particularly excelled, while brands such as Jimmy Choo and Céline made strong progress across all countries. In the fashion segment the Tommy Hilfiger, Boss Orange and Marc by Marc Jacobs collections boosted their penetration in the major chains and in new markets, while Carrera’s strong performance was driven by development of the prescription frame segment in all the leading countries, according to the company. Safilo’s net debt at the end of 2013 amounts to €182.5 million, substantially in line with the figure for the end of September (€180.7 million) and down approximately €33 million from Dec. 31, 2012 at €215.3 million. Finally, following a two-year transition period, during which the group said it “succeeded in effectively and resolutely redefining the scope of their business,” 2014 will be a year of continuity and further expansion of the brand portfolio, recently enriched by the launch of the Fendi brand in their principal international markets, said Safilo.