Angelo Trocchia, Safilo Group CEO
PADOVA, Italy—The Board of Directors of Safilo Group S.p.A. (Reuters SFLG.MI) yesterday reviewed and approved the results of the Group for the first half of 2021, during which Safilo reported a strong year-over-year rebound to reach €510.7 million, with constant currency sales growth of 59.2 percent versus 2020 and an increase of 77 percent compared to the first half of fiscal 2019. For the second quarter, in constant currency, the Group reported sales growth of 137.1 percent vs 2020 and an increase of 9.4 percent vs 2019. During that quarter, Safilo’s net sales of €259.4 million more than doubled, compared to €114.5 million posted in the second quarter of 2020, the one most heavily weighed down by the Covid-19 pandemic. in North America, Safilo reported  Q2 2021 net sales were €121.0 million, almost tripling compared to the same period of 2020, a 198.9 percent change at constant exchange rates. Compared to Q2 2019, Safilo's net sales in the region accelerated, up 60.3 percent at constant exchange rates.

Also in the second quarter, Safilo said its sales performance continued to reflect the successful rebalancing of the Group’s brand portfolio, with the contribution provided by the new proprietary and licensed brand additions—from Blenders and Privé Revaux, to Levi’s, David Beckham, Missoni, Ports, Isabel Marant and Under Armour—effectively compensating the licenses terminated at the end of 2020. The organic sales performance delivered by the Group’s comparable brands was very positive, up high-single digits at constant exchange rates versus Q2 2019, driven by each brand’s specific exposure to key markets, channels and product categories. Net sales in the period were also driven by strong momentum in prescription frames and sport products, reflecting on one hand the sustained business activity of optical stores in the different marketplaces, on the other the surge of outdoor activities boosting Smith’s business in its traditional distribution and more significantly through its renewed direct to consumer (DTC) channel. Sales of sunglasses than doubled year-on-year in the second quarter. Adjusted EBITDA also improved for the quarter and the first half.

Angelo Trocchia, Safilo's CEO, commented: “We are very pleased that the second quarter continued the solid sales and profitability momentum of the first three months of the year, allowing us to close the first half of 2021 with a significant year on year rebound and well above H1 2019. In the period, we continued to seize the business opportunities that our renewed brand portfolio provided us in our key markets. We benefited from the significant organic growth achieved by our core brands already in the portfolio, as well as from the full offset of the brands terminated at the end of 2020 with our Blenders and Prive Revaux acquisitions and the successful introduction of new licenses. Our path of recovery was certainly supported by the magnitude of the rebound in consumption experienced in the United States, and again by the vigorous business progression recorded in China, Australia and most of the Middle-East countries."
Trocchia continued, "Also in Q2, sales growth came from the strong progression recorded in all markets by prescription frames, particularly sustained for us in the independent opticians channel, and from the surge of outdoor activities boosting our Smith sport products business. Sales of sunglasses, which were in the period still held back by the pandemic-related restrictions in many markets, benefitted, on the other hand, from the strength of our online channel, which grew double-digit also in the second quarter, thanks to the sustained business momentum of internet pure players and to the direct-to-consumer sales of Blenders and Smith."
Trocchia said, "We are satisfied with our cash flow as our net debt remained substantially stable compared to the end of last year. This result was achieved despite the cash out in the period relating to the definitive closure of the Ormož production site, with which we took another significant step forward in the execution of our industrial restructuring plan.
"At the same time, we continued the rebalance of our brand portfolio, with targeted additions that will allow us to gain a leading position in the various eyewear segments and reference markets. After having signed with Dsquared2 in May, a few weeks ago we announced a new partnership with Carolina Herrera, a strong brand, valued worldwide for the extreme elegance and femininity of its products, which will allow us, starting from January 2022, to immediately strengthen our women's proposition."
The company reported that results "reflected the benefits of the recovery of operating leverage led by the strong top-line growth, the now leaner overheads structure which the Group continued to manage with disciplined cost control, and cost of goods sold efficiencies."
In H1 2021, Safilo’s structural costs savings amounted to around €13 million, while the contingency measures still in place in relation to the Covid-19 emergency resulted in an estimated cost avoidance of € 4 million.
Trocchia noted, "H1 2021 results and the continuation of positive trends into the beginning of the third quarter allow us to look with optimism at the growth prospects for the current year, consolidating our ambition to exceed already in 2021 the pre-pandemic business levels of 2019.”