Safilo: Eyewear Maker Poised for Turnaround Under New Leadership

Adam Crocker of Logbook Investments presented his in-depth investment thesis on Safilo Group (Italy: SFL) at European Investing Summit 2018.

Thesis Summary:

Safilo is the world’s second-largest eyewear manufacturer, operating a portfolio of owned (25%) and licensed (75%) brands, generating nearly €1 billion in annual revenue. The company is poised for a turnaround under new leadership, whose operational skills are well-suited to the needs of the business. New management has identified €70 million in annual cost savings in a company with a recent €310 million enterprise value. On a normalized basis, Adam estimates that the business trades at less than 5x EV/EBIT and less than 3x EV/EBITDA. This compares favorably to competitors, which trade at 15-20x EBIT. Adam expects value to be realized as a pending recapitalization stabilizes the balance sheet and operational improvements are implemented.

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About the instructor:

Adam Crocker, CFA is Founder and Chief Investment Officer of Logbook Investments, a value fund with core positions based on insights from books. Logbook launched in 2016 and is seeded by his former employer. Prior to Logbook, Adam was a co-manager at Metropolitan Capital Advisors, a long/short equity fund founded in 1992. Before joining Metropolitan, he was an analyst at Morgan Stanley Investment Management conducting research on behalf of growth and value investment teams. He began his career in Leveraged Finance investment banking at JPMorgan. Adam is a 2005 graduate of the Value Investing Program at Columbia Business School and has an undergraduate degree in Economics from Columbia University.