Eyewear group Safilo’s revenue down by 9% in Q3
Italian eyewear group Safilo had a tough third quarter, posting a revenue of €221.5 million, down 9% at current exchange rates compared to the same period in 2017. The situation was similar over the first nine months of the year, with revenue down 9.7% to €713.7 million, compared to €790.5 million in 2017.
In the third quarter, operating margin was 50.7% of net sales, an improvement of 120 basis points over the 49.5% margin recorded in the same period the previous year (+180 basis points at constant exchange rates), while adjusted EBITDA was 5.4% of sales, for a loss of 90 basis points compared to the figure of 6.3% recorded in the third quarter 2017.
“In the third quarter, we accelerated the important work on the fundamentals on which we aim to build our new 2020 business plan. In Europe and North America, where we aim to bolster the business, we are progressing in stepping up core capabilities in the areas of customer care and service levels, and we are seeing an improvement in the business performance trends since beginning of September,” said Safilo CEO Angelo Trocchia.
“The work is also ongoing in Asia and Latin America, where in each of the regions we recently appointed new, seasoned leaders with industry experience, who will help us to develop a more effective operating model in important markets like Brazil, China and Japan. On the cost savings front we are progressing well, both at the COGS level and in the area of our overhead expenses. In the quarter, this allowed us to improve the gross margin, and to hold up well at the adjusted EBITDA level where at constant exchange rates we were in line with last year,” added Trocchia.
Looking at the results by geographical area, sales in Europe were down 8% at current exchange rates in the first nine months of 2018, reaching €331.6 million, and were down 7.1% in Q3, to €91.7 million. North America struggled too, posting a 13.8% downturn over nine months (€280.3 million) and a 6.7% one in Q3 (€96.6 million).
Asia-Pacific instead grew, generating a revenue of €47.9 million (+5%) over nine months, though this region too suffered in Q3, posting a -7.7% result (€15.4 million). As for the rest of the world, sales over nine months were €53.9 million (-8.9%), and those in Q3 were worth €17.9 million, down 26.8%.
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