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Safilo Group Updates Business Outlook Due to COVID-19 Pandemic

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PADUA, Italy—In response to the COVID-19 pandemic, Safilo Group has issued a statement saying that the 2020 outlook provided by the Company on Dec. 10, 2019, in relation to the release of its Group Business Plan for 2020-2024, is no longer valid. Due to the pandemic, Safilo’s net sales are now expected to decline by 11 percent to 13 percent at constant exchange rates compared to the same quarter in 2019. The company management has developed a mitigating action plan, which involves "focusing on minimizing discretionary expenditures and Capex, adjusting marketing plans to the new consumption scenario and implementing an effective working capital and cash protection management," the company said in a statement.

So far, Safilo's stock has not been significantly affected by the pandemic and business closures. Sufficient stock levels at the end of 2019 meant the company was able to manage the temporary shutdown of its Chinese plant in Suzhou. The Chinese plant has now reopened and is working at almost full capacity. In addition, most of Safilo's key Chinese suppliers are back to normal activity levels.

Safilo also recorded a positive mid-single digit increase in net sales in the first two months of 2020. The company said this was expected to flatten out by the end of Q1, based on data and information collected in early March, after the COVID-19 outbreak in Italy.

Despite an expected decrease in net sales, Safilo said in a statement the company "remains committed to continue pursuing the key strategies outlined in the Group Business Plan 2020-2024 presented on Dec. 10, 2019." VMAIL outlined this business plan in December

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