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Safilo expects to break even in 2020 as H2 recovery offsets earlier losses

Jan 27 (Reuters) - Italian eyewear maker Safilo expects a second-half recovery in earnings to fully offset earlier losses linked to the coronavirus pandemic, allowing the company to break even in the full year, it said on Wednesday.

In 2019 Safilo reported adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of 51.8 million euros ($62.8 million).

Sales in the fourth quarter of last year were up 3.0% at constant currencies, bringing the drop in full-year sales to 780.3 million euros, down 15.2%.

2021 will be the first year Safilo will be without its most lucrative licence, for LVMH’s Dior brand, while further lockdown measures threaten to further dent earnings.

The Dior licence is the second out of five brand licences from LVMH Safilo has lost, after the French luxury group bought a 10% stake in rival Marcolin as part of a partnership.

Safilo in 2016 saw its 350 million euro Gucci licence turned into a four-year production deal, later extended to 2023, after Gucci owner Kering set up its own eyewear business to obtain more control over distribution and pocket rich profit margins.

$1 = 0.8266 euros Reporting by Silvia Recchimuzzi in Gdansk; Editing by Jan Harvey

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