Severely impacted by the Covid-19 pandemic, the Marcolin Group reported a 30.1 percent year-on-year dive to €340 million in revenues for its financial year 2020, representing a 28.3 drop in constant currencies. The group does not communicate sales by product categories but the strong focus of its portfolio on sunglasses certainly had a negative effect as well, as this segment of the market has been less resilient than sales of prescription eyewear in the context of the sanitary crisis.
After a difficult start of the year, with sales declining by 28 percent and 62 percent respectively in Q1 and Q2 as compared to the same period in 2019, the company had managed to recover partly during Q3 when the sales’ decrease was limited at 4 percent, but revenues plunged again in Q4, reporting a 21 percent drop.
Marcolin suffered significant revenues’ decreases in all markets. Sales in Italy, which account for about 7 percent of the group’s business, went down by 29.9 percent to €24.6 million in 2020 as compared to 2019 due to the lockdown restrictions in the country, in particular in the early spring. The company said that domestic sales started to recover in May and even grew in the second half of the year, even after the government introduced new restrictions.
|Marcolin Group - Revenues - Thousand euros|
|2020||2019||Change constant FX|
|Rest of Europe||131,872||169,239||-22.1%|
In the rest of Europe, revenues were down by 22.1 percent year-on-year to €131.8 million, overperforming the other regions thanks to the relatively positive performance in Germany, Switzerland and the Nordic countries.
Sales in the America region decreased by 29.0 percent to €143.5 million in reported terms as compared to 2019, and by 25.3 percent on a constant currency basis. According to Marcolin, the revenue drop in the region was mostly caused by an unfavorable comparison basis with 2019 when the group discontinued some of its licensed brands. On the Covid-19 front, the company said that its business in the region during the third and fourth quarters of last year was very positive.
Europe and the Americas together represented close to 90 percent of Marcolin’s revenues in 2020 while Asia, a region that has been relatively less impacted by the pandemic, accounted for only 4 percent. The eyewear company’s sales in Asia, however, plunged by 62.5 percent year-on-year and in constant currencies, to €13 million. Beyond the strong impact of Covid-related lockdowns in Q1, Marcolin’s sales in the region were also hindered last year by a change of distributor in South Korea and the restructuration of the Chinese subsidiary, after the group acquired the non-controlling interests in the company.
Annual revenues in the rest of the world declined by 39.9 percent in constant currencies to €27 million in 2020. In the first quarter of last year, Marcolin opened a subsidiary in Australia. As it did in China, the company also took the full control of its Russian subsidiary in the course of 2020.
Despite the negative effects in indirect production costs and provisions, the group managed to keep a relatively stable gross margin, down by less than 2.8 percentage points to 55.4 percent, thanks to a good control of product costs and a steady pricing policy.
|Marcolin Group - Key figures - Million euros|
|Gross Margin||55.4%||58.2%||-2.8 pp|
|Adj. Operating Margin||5.9%||10.5%||-4.6 pp|
Marcolin’s reported EBITDA nosedived to €5 million last year, from €48 million in 2019. However, after elimination of extraordinary costs, which consisted mostly of Covid-19 emergency measures, regional reorganizations, renegotiations with suppliers and the adoption of the IFRS16 accounting norm, the group posted an adjusted EBITDA of €20 million in 2020 versus €51 million in 2019, resulting in a 4.6 percentage points drop in operating margin to 5.9 percent.
The company said that it mitigated the impact of the loss in revenues by a tighter control of costs, in particular through the diminution of selling and marketing expenses, which went down by 43.0 percent year-on-year to €146 million in reported terms. Other cost control operations included the suspension of non-crucial investments, renegotiations with suppliers and landlords, the reduction of the managers’ compensation and the implementation of governmental measures in regards to employees’ furlough, among others.
Marcolin reported a negative net result of €57 million last year, as compared to a loss of €15 million in 2019. At the end of 2020, the group reported a net debt of €339, roughly €50 million higher than one year before.
The group said that it would focus in 2021 on the development of its business in China and on the continuation of its digitization projects in the e-commerce and B2B channels.