Q1 2015 Results
Disclaimer This presentation may contain forward looking statements based on current expectations and projects of the Group in relation to future events. Due to their specific nature, these statements are subject to inherent risks and uncertainties, as they depend on certain circumstances and facts, most of which being beyond the control of the Group. Therefore actual results could differ, even to a significant extent, with respect to those reported in the statements. Notes in the presentation 1 Q1 2015 adjusted economic results do not include non-recurring items related to commercial restructuring costs in the EMEA region for Euro 1.2 million 2 In Q1 2015, the net debt does not include the option component embedded in the equity-linked Bonds and the fair value of the other derivatives financial instruments 1
Introduction Luisa Delgado, CEO 2
Focused on our long-term journey for sustainable growth Q1 2015 Results ORGANIC SALES GROWTH AND OPERATING RESULTS IN LINE WITH PLAN: Positive/further continuation of core trends and strategic projects: North America Europe Latin America Licensed brand portfolio rebalancing Kick-off of proprietary brand new campaigns Key 2014 interventions progress for back-end year impact: Commercial leadership & business model across Asia Supply network re-invention 3
Focused on our long-term journey for sustainable growth Q1 2015 Results ORGANIC SALES GROWTH AND OPERATING RESULTS IN LINE WITH PLAN: Sales 324.3M +10.6% (+0.8% at constant FX rates) Revenue growth while business transformation continue Adjusted 1 EBITDA 32.6M -8.2% (10.0% of net sales) Strong comp base vs 14; supply network efficiencies skewed to H2 Net Debt 128.3M -38.2% vs. Q1 14 Net Debt/adjusted 1 EBITDA LTM at 1.1x Free Cash Flow 32.1M positive for the first time in Q1 beyond Euro 30M compensation from Kering Adjusted 1 Net Income +2.3M Driven by option valuation in bond and net negative financial charges 4
Q1 2015 Results Gerd Graehsler, CFO 5
Economic and Financial Performance in millions of Euro Q1 2015 Q1 2014 % Change (*) Total sales 324.3 293.2 +10.6% +0.8% Gross profit 196.6 184.0 +6.8% EBITDA 31.4 35.4-11.5% Adjusted 1 EBITDA 32.6 35.4-8.2% EBIT 22.1 26.8-17.5% Adjusted 1 EBIT 23.3 26.8-13.1% Group net result Adjusted 1 Group net result 16.5 1.4-91.2% 2.3 16.5-86.3% Group Net Debt 128.3 207.5-38.2% Free Cash Flow 32.1 (24.6) (*) at constant exchange rates 6
Our sales performance by region SALES AT 324M +9.8% FOREX +0.8% AT CONSTANT EXCHANGE RATES NA +5.3%CN Latam +23.4%CN Europe +2.8%CN APAC -22.9%CN +26.9% reported +30.1% reported +2.6% reported -9.8% reported 4% 41% Asia 15% 12% 41% 1. Strong across key channels 2. Increasing door productivity 1. Broad-based across the continent 1. Iberia, Germany and North Europe 2. Italy off to a strong start 1. Comp Base Period pre-turnaround -> Korea and ASEAN markets 2. Challenging environment in China/HK 3. Australia positive, Japan early good signs 7
Adjusted 1 EBITDA Key operating drivers: -240bps Adjusted 1 EBIDA margin 1. -220 bps Gross margin, from 62.8% to 60.6% Savings projects in Q1 trailing cost inflation 12.1% -210bps 10.0% inventory obsolescence provision different phasing of plant costs 2. +10 bps SG&A Q1 2014 Q1 2015 8
Adjusted 1 Group Net result Beyond operating performance: Adjusted 1 Group net margin 1. -360 bps Net negative FX differences in fin. charges 2. -130 bps Fair value valuation of the equity-linked bonds 5.6% -490bps 0.7% Q1 2014 Q1 2015 9
Cash Flow and Net Debt highlights Key Cash Flow drivers: 1. Lower absorption from working capital Q1 2015 Q1 2014 Improved DSO ratio Cash Flow from operating activities 37.1 (17.0) Inventory flow broadly in line Cash Flow for investing activities (5.0) (7.6) 2. Euro 30m first compensation payment from Kering Free Cash Flow 32.1 (24.6) % 3. Capex improvement of plants and investments into IT Net Debt 128.3 2 207.5-38.2 10
Conclusion Luisa Delgado, CEO 11
Innovation is our Point of Difference... since 1878 12
Leading INNOVATION to build trust in an untapped market - KIDS NEW KIDS BY SAFILO EYEWEAR COLLECTION Conceived for children s needs, powered by children Designed together with the world s leading medical experts BUILDING A BRAND OF TRUST Through the collaboration with SIOP (Società Italiana di Oftalmologia Pediatrica) and WSPOS (World Society of Paediatric Ophthalmology and Strabismus), Safilo created a unique product with the adoption of a medical-scientific approach to meet the key eyewear needs of children 13
Leading INNOVATION to reach new consumers - BEAUTY BOBBI BROWN EYEWEAR GOES GLOBAL Meet Bobbi Brown and preview her new eyewear collection available exclusively at Liberty (London) 28 th April Kick-off also in Mexico and Asia coming soon 14
Leading INNOVATION through unexpected Design - Bespoke ICONS Fendi IRIDIA Dior Soreal Fendi Orchidea Dior Tecnologic 15
OUT THERE, now! 16
Safilo Product School to train the future Masters of our Craft Thank You! 17
Appendices 18
Economic results in millions of Euro Q1 2015 % Q1 2014 % % Change Net sales 324.3 100.0 293.2 100.0 10.6% Cost of sales (127.7) (39.4) (109.2) (37.2) 17.0% Gross profit 196.6 60.6 184.0 62.8 6.8% Selling and marketing expenses (133.4) (41.1) (119.5) (40.8) 11.6% General and administrative expenses (40.4) (12.5) (37.7) (12.9) 7.0% Other operating income/(expenses), net (0.7) (0.2) 0.0 0.0 n.s. Operating profit 22.1 6.8 26.8 9.1-17.5% Interest expenses and other financial charges, net (18.8) (5.8) (2.3) (0.8) n.s. Profit before taxation 3.3 1.0 24.5 8.3-86.3% Income taxes (1.9) (0.6) (7.9) (2.7) -76.4% Net profit 1.4 0.5 16.6 5.6-91.0% Net profit attributale to minority interests 0.0 0.0 0.1 0.0-58.8% Net profit attributable to the Group 1.4 0.4 16.5 5.6-91.2% EBITDA 31.4 9.7 35.4 12.1-11.5% ECONOMIC INDICATORS PRE NON-RECURRING ITEMS Adjusted 1 EBIT 23.3 7.2 26.8 9.1-13.1% Adjusted 1 EBITDA 32.6 10.0 35.4 12.1-8.2% Adjusted 1 Net profit attributable to the Group 2.3 0.7 16.5 5.6-86.3% 19
Net sales performance in millions of Euro Net sales by geographical area Q1 2015 % Q1 2014 % % Change % Change (*) Europe 132.9 41.0 129.6 44.2 +2.6 +2.8 North America 132.9 41.0 104.7 35.7 +26.9 +5.3 Latin America 12.5 3.9 9.6 3.3 +30.1 +23.4 Asia Pacific 39.2 12.1 43.5 14.8-9.8-22.9 Rest of the world 6.8 2.1 5.8 2.0 +17.9 +16.0 Total 324.3 100.0 293.2 100.0 +10.6 +0.8 Net sales by business Q1 2015 % Q1 2014 % % Change % Change (*) Wholesale 304.6 93.9 276.7 94.4 +10.1 +0.9 Retail 19.7 6.1 16.5 5.6 +19.8-1.5 Total 324.3 100.0 293.2 100.0 +10.6 +0.8 (*) at constant exchange rates 20
Balance Sheet in millions of Euro March 31, 2015 December 31, 2014 Change Net working capital 334.9 303.1 31.8 Tangible and intangible fixed assets 898.9 841.2 57.7 Financial fixed assets 8.6 7.6 1.0 Other assets / (liabilities), net (39.1) (14.4) (24.7) Net invested capital 1,203.3 1,137.5 65.8 Net financial position (128.3) (163.3) 35.0 Group Shareholders' equity (1,072.0) (971.5) (100.5) Non-controlling interests (3.0) (2.7) (0.3) 21
Net Working Capital in millions of Euro March 31, 2015 March 31, 2014 Change Trade receivables, net 289.6 272.7 16.9 Inventories 259.1 213.8 45.3 Trade payables (213.8) (191.0) (22.8) Net working capital 334.9 295.5 39.4 % net sales LTM 27.7% 26.4% 22
Free Cash Flow in millions of Euro Free cash flow Q1 2015 Q1 2014 Net result and other charges 27.1 28.2 Change in working capital 10.0 (45.2) Cash flow operating activities 37.1 (17.0) Cash flow investing activities (5.0) (7.6) Free cash flow 32.1 (24.6) 23
Exchange Rates As of (Appreciation)/ Depreciation (*) Avg. for the quarter (Appreciation)/ Depreciation (*) Currency Code March 31, 2015 December 31, 2014 % 2015 2014 % US Dollar USD 1.0759 1.2141-11.4% 1.1261 1.3696-17.8% Hong-Kong Dollar HKD 8.3422 9.4170-11.4% 8.7339 10.6287-17.8% Swiss Franc CHF 1.0463 1.2024-13.0% 1.0722 1.2237-12.4% Canadian Dollar CAD 1.3738 1.4063-2.3% 1.3957 1.5107-7.6% Japanese Yen YEN 128.9500 145.2300-11.2% 134.1206 140.7978-4.7% British Pound GBP 0.7273 0.7789-6.6% 0.7434 0.8279-10.2% Swedish Krown SEK 9.2901 9.3930-1.1% 9.3800 8.8569 5.9% Australian Dollar AUD 1.4154 1.4829-4.6% 1.4313 1.5275-6.3% South-African Rand ZAR 13.1324 14.0353-6.4% 13.2283 14.8866-11.1% Russian Ruble RUB 62.4400 72.3370-13.7% 70.9608 48.0425 47.7% Brasilian Real BRL 3.4958 3.2207 8.5% 3.2236 3.2400-0.5% Indian Rupee INR 67.2738 76.7190-12.3% 70.0867 84.5794-17.1% Singapore Dollar SGD 1.4774 1.6058-8.0% 1.5273 1.7379-12.1% Malaysian Ringgit MYR 3.9873 4.2473-6.1% 4.0772 4.5184-9.8% Chinese Renminbi CNY 6.6710 7.5358-11.5% 7.0231 8.3576-16.0% Korean Won KRW 1,192.5800 1,324.8000-10.0% 1,240.1602 1,465.3425-15.4% Mexican Peso MXN 16.5124 17.8679-7.6% 16.8275 18.1299-7.2% Dirham United EmiraAED 3.9496 4.4594-11.4% 4.1354 n.a. n.a. (*) Appreciation (figures with a minus sign in the table above) indicates an increase in the value of the currency against the Euro. 24
Safilo Group Brands Portfolio Proprietary brands Licensed brands 25
Safilo Group Licensed brands Brand Expiry Date 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 26
Safilo Group Licensed brands Brand Expiry Date 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 27