In a difficult year marked by the Covid-19 pandemic, Fedon, the Italian specialist in eyewear cases and leather goods, reported a sharp decrease in revenues but managed to keep positive EBITDA figures. Total sales of the Italian group fell by 34 percent year-on-year to 42.3 million euros in 2020, a drop that the company attributes to the exceptional sanitary crisis and the related lockdowns imposed by governments in many regions of the world.
In its core and historical eyewear cases’ business unit, Fedon’s sales to eyewear manufacturers fell to €35.9 million in 2020, representing a 30.3 percent decrease from the previous year. However, these revenues still account for 86 percent of the company’s topline. The more recently launched wholesale segment, which includes the sale of cases to optical stores’ chains, saw its revenues fall by 28.0 percent year-on-year to €5.2 million last year. Overall, the core business decreased by 30 percent to €41.1 million, a result that Fedon considers satisfactory in the context of the pandemic. The company also told us that its sales have started to recover in the first months of 2021, thanks in part to the launch of new eco-friendly products.
The leather goods’ business of the group was most severely impacted by the general drop in international travel. Revenues in the category plunged by 73 percent from €5.5 million in 2019 to €1.2 million in 2020. In this context, the company had to close a total of nine unprofitable shops last year, out of the 16 distributed between airports and outlets. In 2021 Fedon will close all its remaining retail units located in airports, keeping only three outlet stores.
By reducing costs, including a 33 percent decrease in material supply, and taking advantage of Covid-19-related support plans by the Italian government, the group managed to limit the impact of the revenues’ drop on its EBITDA figures. Although, EBITDA fell from €7.2 million in 2020 to €4.1 million in 2019, the reduction in EBITDA margin, from 11.2 percent in 2019 to 9.7 percent in 2020, was relatively limited. However, the company ended last year with a net loss of €1.7 million, as compared to a net income of €196,000 in the previous year.
Net financial debt fell in one year from €8.4 million to €7.1 million. The balance sheet was also improved with an increase in liquidity from €3 to €14 million, thanks to yet unused bank loans guaranteed by the Italian government as part of its Covid-19 industry support plan. The management of the company told us that it has comforted its cash-flow position by the activation of more of these credit lines since the start of the current year.