Safilo Group (SFL) H1 2024 earnings summary

Executive summary

• H1 2024 sales remained soft, mainly due to the Jimmy Choo exit, but strong growth in Carrera and David Beckham brands drove resilience and now represent about 50% of sales.

• 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.

Financial highlights

• H1 2024 net sales: €532.0M, 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) and 60.1% in Q2 (+100 bps), driven by production efficiency and positive price/mix.

• Adjusted EBITDA margin H1: 10.8% (up 40 bps); Q2: 10.1% (up 60 bps).

• Adjusted net result H1: €24.2M, up from €6.9M, aided by lower financial charges and absence of prior year one-off costs.

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

Outlook and guidance

• No meaningful change in market dynamics seen in July; U.S. eyewear improving, sports shop channel remains weak.

• Aim to remain cash positive in H2 and achieve positive full-year free cash flow.

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

• Price mix expected to remain a positive lever in H2, mainly from previously implemented actions.

• Management expects continued focus on brand portfolio development and operational efficiency.