MILAN — Italian eyewear maker Safilo SpA on Thursday presented a five-year strategic plan that aims to put the company on a path of 6 to 7 percent annual sales growth and increase margins to 15 percent of revenues by 2015.
In a statement released before chief executive Roberto Vedovotto presented the plan to the financial community in Paris, Safilo said it would also eliminate net debt by the end of the period and that earnings before interest, taxes, depreciation and amortization would hit 210 million euros, or $286 million at current exchange, up from an estimated 150 million euros, or $204 million, (12.5 percent of expected sales) in 2013. Total revenues are expected to reach 1.4 billion to 1.45 billion euros, or $1.9 billion to $1.97 billion, in 2015.
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All of the objectives, Safilo said, “assume the renewal of all the licenses expiring during the strategic plan, excluding possible upside projects, such as new licensing agreements and/or an acquisition in the eyewear branded sector.”
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As regards the key Armani Group license, which expires in 2012 and which Italian newspaper La Repubblica recently speculated Safilo might lose to rival Luxottica, Safilo said the renewal negotiations are “presently ongoing and the outcome is still uncertain.” According to analysts, the Armani license generates some 150 million euros, or $204 million, in annual sales for Safilo.
For the current year, the producer of eyewear for brands including Armani, Marc Jacobs and Valentino — as well as house brands Safilo and Carrera — said it expects net sales of about 1.1 billion euros, or $1.5 billion at current exchange, with an EBITDA margin of 11 percent. Net debt for 2011 is expected to “remain in line” with the 240 million euros, or $348 million at average exchange, reached at the end of the first half.
To achieve its goals, the company said it will focus on the core wholesale business and a balanced portfolio of licensed and own “power brands,” as well as push increasingly into emerging markets, like Russia, Asia and Latin America. In the U.S. and Canada, the company aims for “dual speed growth” through independent opticians and its Solstice retail channel. The company is also implementing “efficiency projects” to reduce complexity in “all areas of [the] value chain.”
Over the period of the plan, the company will invest roughly 165 million euros, or $224.3 million, “mainly dedicated to the maintenance and development of the manufacturing plants and the implementation of new information systems,” Safilo said.