Safilo Announces Significant Recovery and Introduces Sunglasses Made With Ocean Waste Plastic

As anticipated by Safilo in their press release dated October 1st, in the third quarter of 2020 the company's sales and economic results recorded a significant recovery compared to the severe downturn experienced in the first half of the year following the coronavirus pandemic and the subsequent, extensive lockdown measures.

Q3 2020 net sales reached Euro 219.1 million, growing by 3.0% at current exchange rates and 6.0% at constant exchange rates compared to the same quarter of last year, with the key positive drivers represented by the significant rebound experienced by the wholesale market in North America, and the full-quarter contribution deriving from the recent acquisitions of Blenders Eyewear and Privé Revaux. The latter, together with the continuing progress recorded by Smith's D2C sales and by the Group's business generated through internet pure players, propelled Safilo's total online sales to around 16% of Group total turnover.

In the third quarter, the positive sales development and the ongoing implementation of the Group's cost saving actions and contingency measures allowed Safilo to return to a positive adjusted1 EBITDA of Euro 14.3 million, up 9.3% compared to the same quarter of 2019.

Angelo Trocchia, Safilo Chief Executive Officer, commented: "After we were heavily impacted by the Covid-19 outbreak and the consequent global lockdowns between the first and the second quarters of the year, in the third quarter our business had a positive reaction reflecting, on one side, the sales rebound recorded in July as an expected catch-up effect after the strong H1 pandemic impacts, and, on the other side, a dynamic US market continuing into August and September, making North America the main driver of our recovery. It is also important to note that in the third quarter, all our core markets and channels recorded an improvement compared to the first half of the year, from an outstanding growth in China to more positive results in some of the main European markets such as Italy, Germany and France, while the IMEA countries, Latin America and the travel retail channel remained key hurdles to a full recovery. As we continue to progress on the strategies set out in our Group Business Plan, seizing the additional opportunities provided by the current market environment, in the third quarter our direct-to-consumer strategy gained additional speed and relevance. This was thanks to the ongoing success of our Smith e-com business, and to the strength of our recent acquisitions, Blenders Eyewear through its advanced e-com platform, and Privé Revaux leveraging on its social marketing skills to expand its reach offline and online. The work on our digital transformation strategy progressed also with the launch in August of our new B2B platform in Europe and of a new Customer Relationship Management system in November. These are the first two execution waves of a significant mid-term project which goes in the direction of reshaping and enhancing the relationship, the engagement and the way we do business with our many European opticians, improving after-sales-service and client satisfaction, to ultimately increase the share of our B2B business. We had two other important objectives to achieve in this still very complex period and we are thus very pleased with their positive outcome. On one side, we secured additional liquidity for the Group with a new term loan facility of Euro 108 million guaranteed by SACE, and, on the other, in line with our industrial plan to optimize the production footprint we sold the Italian plant in Martignacco to a local entrepreneur, an important step not just for us to recover a sustainable economic profile, but also for the workers and the local communities. The third quarter delivered promising sales growth and the recovery of a satisfactory level of adjusted EBITDA, and while September results were relatively slower than the trends during the summer, business development in October was positive, again mainly driven by the solid performance of the US market and the online business. There are again significant uncertainties in front of us due to the Covid-19 pandemic and the business environment, as we enter November and the very important holiday season with a new wave of infections emerging in several countries. Once again, therefore, a very complex business context in which our most important priority remains that of preserving the health of all the people who work at our offices and sites, guaranteeing, at the same time, the widest possible use of smart-working. We therefore continue to maintain a very prudent stance for the remainder of the year, and we remain committed to providing timely updates to all our stakeholders on the evolution that the business will have in the coming months."

Safilo also announced their first eyewear product from recycled plastic especially made for The Ocean Cleanup, the well-known Dutch non-profit environmental organization that develops advanced technologies to extract plastic pollution from the oceans.

The Ocean Cleanup sunglasses are made with injected plastic deriving from the Great Pacific Garbage Patch (GPGP), using an innovative upcycling process able to include types of plastic that have traditionally been more difficult to recycle, turning them into a high-quality and safe material.

Available in limited-edition, each pair of sunglasses will carry a unique QR code that directly connects the user to background information about the product, the project, and the specific place where the marine plastic pollution was removed from. Each pair of sunglasses is estimated to enable cleaning an equivalent of 24 football fields worth of the GPGP and when every pair from the first batch is claimed, that will equate to approximately 500,000 football fields of clean-up in the GPGP. The sunglasses will be available exclusively on The Ocean Cleanup website, and 100% of the proceeds will go to the continuation of the clean-up mission.

"I am very proud of this new project which we have developed in conjunction with The Ocean Cleanup," commented Angelo Trocchia, CEO of Safilo Group. "More than a year ago, Boyan called us and explained the project he had in mind, and we felt honoured to be part of this mission to give a second life to the plastic collected from the ocean. Our design team worked hard to combine our long history of eyewear manufacturing with material innovations to ensure the high quality, stylistic content and uniqueness of this final product. Our investment in using recycled materials is aligned with our continued efforts towards promoting a responsible business and is part of Safilo's commitment to People, Product and Planet."

"We are happy to have joined forces with Safilo, one of the top global eyewear companies, for the creation of our first product made from the trash we collected in the Great Pacific Garbage Patch. It's important that we team up with reliable brands, so I'm happy to see them added as another reputable name on our list of most valued partners," said Boyan Slat, Founder and CEO of The Ocean Cleanup. "The partnership with Safilo proved crucial in transforming the plastic we removed from the ocean into useful, durable products: these beautiful sunglasses. The proceeds from this product will help fund our mission, and we hope they serve as another way to increase global awareness of the urgent need to remove plastic from our aquatic ecosystems."