Safilo Group (SFL) H1 2024 earnings summary

Executive summary

• H1 2024 net sales were €532.0 million, down 3.3% year-over-year (2.4% at constant exchange rates), mainly due to the exit of Jimmy Choo, with strong growth in Carrera and David Beckham brands offsetting declines.

• Positive operating cash flow exceeded last year and was reinvested in brand portfolio development.

• European market remained resilient despite weather-related slowdowns; North America eyewear improved, but sports shops and Smith business lagged.

• Carrera and David Beckham now represent about 50% of sales, marking a strategic milestone.

Financial highlights

• H1 2024 net sales: €532.0 million, down 3.3% reported and 2.4% at constant FX; Q2 revenues down 3.1% year-over-year.

• Gross margin improved to 60.0% in H1 (+120 bps), reaching 60.1% in Q2 (+100 bps), driven by production efficiency and positive price/mix.

• Adjusted EBITDA margin in H1 was 10.8% (up 40 bps), with adjusted EBITDA at €57.6 million (+0.5%).

• Adjusted net result for H1 was €24.2 million, up from €6.9 million in H1 2023, reflecting improved operating performance and lower financial charges.

• Free cash flow for H1 was -€19.0 million, mainly due to the €41.1 million investment for the perpetual David Beckham license.

Outlook and guidance

• Management expects continued focus on brand portfolio development and operational efficiency amid a challenging environment.

• U.S. eyewear is improving month by month, but sports shop channel remains weak; price mix expected to remain a positive lever in H2.

• Jimmy Choo's negative impact expected to be much lower in H2 than H1.

• No material events post-June 2024, except for the launch of a share buyback program to service stock option plans.