Essilor: First-Half 2013 Results

Thu Aug 29, 2013 12:30am EDT

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Essilor: First-Half 2013 Results

3.7% Sales Growth at Constant Exchange Rates

Contribution from Operations of 18.3%

  • Success of New Products
  • Sustained Demand in Major Fast-Growing Markets
  • Strong Momentum in the Acquisition Strategy
  • High Prior-Year Comparatives

Regulatory News:

The Board of Directors of Essilor International (Paris:EI) met yesterday to approve the Company’s financial statements for the six months ended June 30, 2013. The auditors have performed a limited review of the consolidated financial statements. Their report does not include any observations.

Key metrics

                         
In € millions       First-half 2013       First-half 2012       Change
Revenue       2,576       2,530       + 1.8%
Contribution from operations((a))       472       454       + 4.0%

(% of revenue)

     

18.3%

     

17.9%

     

+ 40 bp

Profit attributable to Group equity holders       310       301       + 3.2%
Earnings per share (in €)       1.48       1.45       + 2.0%
Cash flow(b)       473       445       + 6.3%

(a) Operating profit before compensation costs for share-based payment plans, restructuring costs, other income
and expense, and goodwill impairment.

(b) Net cash from operating activities before change in working capital requirement.

Commenting on these results, Hubert Sagnières, Chairman and Chief Executive Officer of Essilor, said: “Our first-half results reflect Essilor’s ability to implement operations worldwide while maintaining high margins. The Company’s profitability improved thanks to new products and manufacturing efficiency, despite the impact on sales growth of high prior-year comparatives."

During the first half, in a sluggish overall economic environment, Essilor deployed its new products region by region and strengthened its geographical presence through new partnerships.

The ramp-up of important innovations like the Varilux® S series, growth in the Xperio® polarized lens category and, more generally, increasingly vibrant demand across all regions and divisions helped to drive stronger sales throughout the period. In the second quarter, combined growth in revenue at constant exchange rates (like-for-like and bolt-on acquisitions) came to 5.3%, a clear improvement over the first quarter (up 1.9%).

Overall, Essilor posted revenue growth at constant exchange rates of 3.7% in a first half that was adversely affected by high prior-year comparatives and an unfavorable operating environment. However, the Company’s profitability improved considerably, with a contribution margin of 18.3%.

The highlights of the first half were:

  • The success of the Crizal® UV antireflective lens and the Varilux® S series progressive lens, two major innovations.
  • Strong sales momentum in the main fast-growing markets (Brazil, China and India).
  • Acceleration in bolt-on acquisitions1 with new operations in Colombia and Chile, two dynamic Latin American economies.
  • A sharp improvement in gross margin (up 70 basis points) reflecting Essilor’s ability to capture the value of innovations, enhance the efficiency of production resources and integrate acquisitions.
  • A 6.3% increase in cash flow and maintenance of a solid balance sheet.

1 Acquisitions or local partnerships

Outlook

In the second half, Essilor will pursue its innovation strategy, in particular with the launch of Crizal Prevencia, the first lens that selectively filters harmful rays from blue light. The Company will also deploy a large number of mid-range products to take advantage of growth in this segment. Lastly, the acquisition dynamic underway since the beginning of the year should accelerate. For full-year 2013, revenue growth (like-for-like and bolt-on acquisitions) should be close to 7%, with profitability confirmed at a high level.

Over the longer term, the growth drivers in the optics market remain powerful and worldwide demand for improved visual health is expected to create many opportunities. Essilor will continue to position itself in fast-growing segments, as evidenced by the recently signed agreement to acquire Transitions Optical, the world leader in photochromic lenses.

Practical information

A meeting with analysts will be held in Paris today, August 29, at 10:00 a.m. CEST

The meeting will be available live and recorded for later listening at:

http://hosting.3sens.com/Essilor/20130829-BFA07417/en/

The presentation will be webcast at:

http://www.essilor.com/en/Investors/Pages/PublicationsDownloads.aspx

Regulatory Information:

The interim financial report is available at www.essilor.com by clicking on: http://www.essilor.com/en/Investors/Pages/PublicationsDownloads.aspx

Investor calendar

Third-quarter 2013 revenue: October 24, 2013

About Essilor

The world’s leading ophthalmic optics company, Essilor designs, manufactures and markets a wide range of lenses to improve and protect eyesight. Its corporate mission is to enable everyone around the world to access lenses that meet his or her unique vision requirements. To support this mission, the Company allocates more than €150 million to research and innovation every year, in a commitment to continuously bring new, more effective products to market. Essilor’s flagship brands are Varilux®, Crizal®, Definity®, Xperio®, OptifogTM and Foster Grant®. It also develops and markets equipment, instruments and services for eyecare professionals.

Essilor reported consolidated revenue of approximately €5 billion in 2012 and employs around 50,700 people. It operates in some 100 countries with 22 plants, more than 400 prescription laboratories and edging facilities, as well as several research and development centers around the world.

For more information, please visit www.essilor.com.

The Essilor share trades on the NYSE Euronext Paris market and is included in the Euro Stoxx 50 and CAC 40 indices.

Codes and symbols: ISIN: FR0000121667; Reuters: ESSI.PA; Bloomberg: EI:FP.

Essilor
Investor Relations and Financial Communication
Véronique Gillet – Sébastien Leroy – Ariel Bauer, +33 (0)1 49 77 42 16
or
Corporate Communication and Press
Maïlis Thiercelin, +33 (0)1 49 77 45 02

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