Safilo Group (SFL) H2 2024 earnings summary

Executive summary

• 2024 was marked by economic and geopolitical uncertainty, impacting global eyewear demand, but resilience was shown through dynamic brand management, targeted investments, and expansion of home brands, notably Carrera and David Beckham, now about 50% of sales.

• Sustainability initiatives advanced, with 95% renewable electricity, Scope 1 & 2 emissions down 19%, Scope 3 down 5%, and 23% of new collections using recycled or bio-based materials.

• All margins improved: gross margin at 59.7% (+100 bps), adjusted EBITDA margin at 9.4% (+40 bps), and adjusted net result at €34.2M, more than doubling year-over-year.

• Strong cash generation with operating cash flow at €76.2M and free cash flow at €16.7M, despite investments and share buyback.

Financial highlights

• Net sales for 2024 were €993.2M, down 3.1% at current FX and 2.3% at constant FX; Europe +1.6%, North America -5.2%, Asia Pacific -2.1%, Rest of World -5.9%.

• Gross margin improved to 59.7% of sales (+250 bps reported, +100 bps adjusted); adjusted EBITDA reached €93M (9.4% margin, up 40 bps); adjusted net result was €34.2M vs €14M in 2023.

• Free cash flow for the year was €16.7M (vs €29.1M in 2023); operating cash flow at €76.2M (vs €47.7M prior year).

• Net debt stable at €82.7M, with financial leverage at 0.48x.

• No dividend proposed for 2024; new share buyback program for up to 15M shares (~3.6% of share capital) announced.

Outlook and guidance

• 2025 outlook remains cautious amid macroeconomic and geopolitical uncertainties, with focus on margin improvement, cash generation, and strategic investments in core brands.

• Early 2025 shows positive trends in Europe and North America, but March is pivotal for confirming market sentiment.

• Strategic priorities include Carrera Woman expansion, Carrera Sport Collection launch, and Polaroid's ATP Tour partnership.

• Marketing investments will be tightly managed, with flexibility to adjust based on market developments.

• Price mix expected to improve in 2025 as negative effects from Jimmy Choo phase-out subside.