PADOVA, Italy—The Safilo Group S.p.A. (SFLG.MI) reported growth in sales and profits for the third quarter, as its board yesterday reviewed and approved results for the three months and the first 9 months of 2022 key performance indicators. Safilo’s net sales in Q3 2022 amounted to €260.4 million, up 14.9 percent at current exchange rates and 4.6 percent at constant exchange rates compared to €226.6 million recorded in Q3 2021. In Q3, Safilo’s sunglass sales continued to enjoy positive momentum, up 7.1 percent, as did the Group’s prescription frames business, up 4.6 percent on a challenging comparison with Q3 2021 for the Group.

Adjusted EBITDA in Q3 2022 stood at €22.6 million, up 18.6 percent compared to Q3 2021, with the adjusted EBITDA margin increasing by 30 basis points, from 8.4 percent to 8.7 percent of sales.

Angelo Trocchia, Safilo Group's CEO, stated, “Q3 marked another quarter of growth of our sales and profits, driven by the strength of our new collections, the investments behind our brands and a continued effort to increase the breadth of the services we offer to our clients. In Q3, our net sales increased by 14.9 percent, thanks to the solid pace of growth posted by the organic business, up 5.6 percent at constant exchange rates, and further boosted by the tailwind of a strong U.S. dollar.

"Our performance in the period reflected the continued strength of Europe, Latin America and the Middle East markets, the first significant business rebound of Asia, and the North American market holding up versus another tough period of comparison and logistic delays in the shipment of sports products in the U.S. Sunglasses remained our best performing product category, boosted by a strong summer season, and sales of prescription frames were solid in all our key markets," Trocchia said.

The company also reported that sales of Carrera and Polaroid continued to record double-digit growth, while the progress of Smith was more moderate in the quarter due to some logistic delays in sports products shipments. In the Group's licensed brands portfolio,Tommy Hilfiger, HUGO BOSS, David Beckham, Under Armour and Isabel Marant were cited as other key drivers of the positive organic performance, while the licenses of Carolina Herrera, Chiara Ferragni and Dsquared2, introduced this year, added significant new business.

The company said that Q3 2022 "saw the significant return of consumers to stores, giving Safilo the opportunity to further advance the development and adoption of its B2B platforms, in particular in Europe, where the "You&Safilo" business increased by approximately 40 percent compared to the same period of 2021.

Trocchia added that in the third quarter, Safilo's growth was enabled by the successful launch of new collections and marketing campaigns.

"We continued to focus on projects of great impact and visibility, ranging from Carrera’s partnership with Ducati, to the new ‘Back to School’ campaign of Polaroid, to the launch of Smith’s new eyewear campaign, focused on both sun and prescription, to finish in September with an exciting new partnership of Blenders with Oracle Red Bull Racing, which officially kicked off at the Gran Premio d’Italia in Monza. The third quarter confirmed another double-digit improvement in gross profit and adjusted EBITDA, which reached 53.8 percent and 8.7 percent of sales respectively, keeping us on track to reach our full year goals.”

In North America, net sales in Q3 2022 amounted to €124.7 million, up 8.4 percent at current exchange rates, thanks to the further strengthening of the dollar against the Euro which occurred in the period, while at constant exchange rates sales, the business declined by 7.4 percent on a reported basis and by 1.2 percent at the organic level versus another tough comparison with last year.

The company noted, "On one hand, sales in the United States continued to register positive momentum in the upper part of Safilo’s portfolio and a softer performance in the entry and mid-tier price points. On the other, sales of Smith sports products were temporarily constrained by logistic delays in some deliveries expected to be made by the end of the quarter."

For the third quarter, in Europe, net sales in Q3 2022 rose to €95.7 million, up 15.5 percent at current exchange rates and up 14.1 percent at constant exchange rates compared to Q3 2021. Italy, Spain, France, Germany and some Eastern European countries such as Turkey and Poland, remained Safilo’s best performing markets, the company noted. In Asia and Pacific, net sales in Q3 2022 reached €16.2 million, for the first time in the year recording a significant recovery over 2021.

The improvement, equal to an increase of 43.3 percent at current exchange rates and 31.6 percent at constant exchange rates, reflected a marked acceleration of the organic sales, up 46.1 percent, In the Rest of the World, net sales in Q3 2022 equaled €23.9 million, showing a double-digit growth of 36.9 percent at current exchange rates and 21.8 percent at constant exchange rates compared to Q3 2021.

For the nine months of the year, Safilo reported the Group's net sales reached €831.3 million, up 12.7 percent at current exchange rates and +5.7 percent at constant exchange rates compared to €737.4 million recorded in the first 9 months of 2021. Adjusted EBITDA in the first 9 months of 2022 stood at €85.3 million, up 24.0 percent compared to the adjusted EBITDA of €68,8 million recorded in the first 9 months of 2021.

The company reported net debt was €115.4 million compared to €105.6 million at the end of June 2022 versus €94.0 million as at December 2021.

Safilo will host a Capital Market Day in order to provide an update of its medium-term economic and financial targets, within the first quarter of 2023.