The board of directors of Safilo Group s.p.a. approves the financial results at 30th September 2009

11/11/2009
Key highlights of the first 9 months of 2009:
• Net Sales at Euro 774.7 million
• EBITDA from ordinary activities at Euro 55.0 million, 7.1% margin
• Net financial debt at Euro 586.3 million

Recapitalisation Plan
• Only 1.03% extra of the Safilo Notes have been tendered at Early Bird date
• HAL pays 60 cts per Note up to November 18
• If Tender Offer on Notes fails, the company will be in a hugely leveraged situation


Padova, 11th November 2009 – The Board of Directors of SAFILO GROUP S.p.A. today approved the results for the first 9 months of 2009.

During the third quarter net sales have decreased by 7.0% at current exchange rates (-7.7% at constant exchange rate).

During the third quarter Europe registered a slight improvement, whilst the US market has remained stable in comparison with the other quarters of the year. Asia remains the region where we suffer the most, Japan not showing any signs of recovery yet.

During the third quarter the wholesale channel (90% of sales) has decreased by 9.5% at current exchange rates (-10.4% at constant exchange rate) whilst sales of the retail operations grew slightly due to new openings (comp growth was negative by 15.5%)

The first 9 months results have been impacted by non-cash, non-recurring items amounting to Euro 128.1 million, related to the industrial reorganization and the write-off of the goodwill associated with certain Cash Generating Units. In addition, the completion of the proposed transaction with HAL (and specifically the disposal to HAL of the non-strategic retail network) would result in additional non-cash, non-recurring losses amounting to approximately Euro 28 million.

Recapitalisation

On October 19th the Board of Directors approved the recapitalization plan in co-operation with HAL Holding to strengthen Safilo’s capital structure and we expect to have a cash inflow for a total amount of Euro 283 million, which will provide the necessary financial flexibility in the long term.

Condition precedent to the overall recapitalization plan is, amongst others, the successful completion, by November 18th, 2009, of the cash tender offer launched by HAL for the outstanding Safilo Notes 2013. The company has been informed by HAL that only 1.03% has been tendered at the Early Bird date (in addition to the 38.76% committed prior to the Tender Offer by existing Note-holders). The company has also been informed that currently HAL does not own any of the Safilo Notes itself. As a result, the chance that the tender will not be successful cannot be neglected.
In such event, the overall recapitalization plan might not take place and the company would again be in a highly leveraged situation and will, in all likelihood, default under its banking facilities by year-end.

Shareholders’ meeting

The Board of Directors has resolved to re-call the shareholders’ meeting, already called for 23rd, 24th and 30th November 2009 (in first, second and third call), for 14th, 15th and 16th December 2009 (in first, second and third call) to deliberate the same items already in the agenda, given that antitrust clearance in connection with the possible acquisition of the control of the company by HAL is only expected to be received just before these dates.
The retraction of the previous call and the notice of the new call will be published tomorrow, 12th November 2009, in a national newspaper and will be made available on the Company’s internet website at www.safilo.com/en/investors.html.


Last update: 12/11/2009, 09:01