Marcolin Group Notes Impact of COVID-19 on First-Quarter Sales

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LONGARONE, Italy—Marcolin Group reported results for its first quarter that indicated the impact of the coronavirus on its business operations over the three-month period ending March 31. Marcolin, a well-established company based here in the Italian eyewear district, said sales in the first quarter totaled €93.5 million, which compares with €129.9 million for the first three months of 2019 (a decline of 28 percent over the comparable periods). At constant exchange rates, net sales in the first quarter totaled €92.8 million, a decrease of 28.6 percent, according to the group’s announcement on Friday.

The company also noted that its EBITDA result was €10.75 million in the most recent quarter, a decrease of 33 percent compared with €16.16 million for the three months of 2019.

In addition, Marcolin reported that its revenues in the domestic Italian market decreased 31.3 percent in the first quarter compared with the same period of 2019, “due to volumes reductions after the stop of the business occurred in Italy in March 2020 for the Covid-19 health emergency,” according to the announcement.

In the rest of Europe, revenues dipped 21.5 percent to €38.3 million at current exchange rates. Major decreases occurred in Spain, Portugal and France since such countries, like Italy, experienced the stop of the business for the Covid-19 health emergency starting from March 2020, the announcement noted. Other European countries were less impacted by Covid-19 government restriction, smoothing the overall negative impact on net sales in the Europe area.

In the Americas area, net sales showed a decrease of 29.3 percent at current exchange rates. This geographic area is impacted by weak results in Latin America and the U.S. due to the initial spread of Covid-19 in this geographic area.
The first quarter results in the U.S. market were also affected by the discontinuation of some brands that occurred at the end of 2019’s first quarter, Marcolin noted.

As VMAIL reported, Marcolin's former chief executive and general manager Massimo Renon resigned from his role as of April 14. Until the assignation of the new role of CEO, Marcolin has adopted a proxy system in order to entrust other directors and group manager all powers to manage group activities, the company noted.

In its financial report last week, Marcolin said that its first quarter had been "highly impacted by the COVID-19 outbreak. January and February 2020 were modestly impacted by the shutdown of its Chinese suppliers, which are now back to normal activity levels. "However, our business started to deteriorate more rapidly in the second half of March, with complete lockdowns across Europe, the U.S. and many other markets," Marcolin stated. "During 2Q 2020, we expect performance to deteriorate even further compared to the corresponding period of the prior fiscal year, especially in the months of April and May due to the persistence of the lockdowns across most markets."

The company noted that it founded a new company in Singapore in 2019 and Australia in early 2020. “By setting up direct affiliates there, it aims to assist the group's growth in the Asia-Pacific (APAC) region and to enhance the marketing synergy with the regional office operating in Hong Kong,” the announcement noted. The objective is to strengthen the sales and marketing activities and offer a dedicated customer service to best meet the demands of Singapore, Malaysia, Southeast Asia and Australia.