Safilo’s fourth-quarter revenues rose by 3.0 percent at constant exchange rates thanks to strong gains in North America and Asia-Pacific, while European sales were hit by Covid-19-related lockdowns and a lack of tourists. On a reported basis, however, the company’s sales were down by 2.1 percent to €225.6 million.
During the quarter, the wholesale division recorded a 1.6 percent drop at constant currency rates, marking an improvement from the 5.5 percent decline experienced in the third quarter. Privé Revaux, bought on Feb. 10, 2020, and Blenders Eyewear, acquired on June 1, also contributed a combined €14.1 million to Safilo’s North American business during the quarter. Overall, the company’s second-half sales grew by 4.5 percent at comparable currency rates.
In Europe, fourth-quarter sales totaled €86.1 million, down by 19.4 percent at current exchange rates and by 18.0 percent at constant rates. Wholesale revenues, which exclude a production agreement with the French fashion house Kering for the production of Gucci eyewear, fell by 16.0 percent on a currency-neutral basis. Online sales generated through pure players registered “strong progress” during the quarter, which also saw a recovery in orders from large optical chains.
In North America, sales reached €100.9 million, up by 19.2 percent on a reported basis and by 27.0 percent at constant exchange rates. The wholesale business enjoyed an 8.9 percent increase in organic revenues in local currencies. Safilo noted that the contribution of Privé Revaux and Blenders was more moderate than in the previous two quarters for seasonal reasons.
In Asia-Pacific, turnover rose by 24.1 percent to €21.1 million. At constant currency rates, the increase reached 28.1 percent, compared with a 6.4 percent drop in the third quarter, thanks to a strong acceleration in China, where sales more than tripled in the final quarter, as well as a significant improvement in Australia.
In the rest of the world, sales decreased by 19.7 percent to €17.5 million. In local currencies, the decline was limited at 6.5 percent, underpinned by positive performances in Brazil and Mexico and the first signs of a recovery in the Middle East.
In the fourth quarter, online sales represented about 12 percent of revenues, compared with 4.5 percent a year earlier, thanks to the contribution of Blenders and Privé Revaux’s e-commerce businesses and to a 60.9 percent growth in organic digital sales, at constant exchange rates, driven by Smith’s direct-to-consumer online sales as well as Safilo’s sales generated through internet pure players.
The company noted that during the quarter demand focused on prescription frames, a product category which it sees as a “strategic priority”.
In the full year, Safilo’s revenues totaled €780.3 million, down by 16.9 percent at current exchange rates and by 15.2 percent at constant rates. Europe represented 42.3 percent of the top line, receding from 47.8 percent in 2019. North America rose to become the company’s main market with 43.9 percent of group sales, against 35.6 percent last year. The company generated 7.8 percent of its revenues in Asia Pacific and 6.0 percent in the rest of the world.
Organic sales were down by 21.9 percent in local currencies, with the wholesale business dropping by 21.5 percent. Blenders and Privé Revaux contributed €61.8 million to the top line. On a pro forma basis, the two American companies grew a combined 66 percent. Group online sales totaled 13 percent of sales against 4 percent in 2019.
In the second half of 2020, Safilo posted a positive adjusted Ebitda, which offset the loss in the first part of the year and allowed the company to be at breakeven for the full year. The company estimated its net debt at around €179 million, excluding IFRS 16 accounting rules, at the end of December against €155.8 million at the end of September.