Sales up a strong 14.5% at constant exchange
rates
Annual targets confirmed
- Further improvement in quarterly
organic growth to 3.9%
- Successful innovations and stepped-up
consumer marketing
- Swift momentum in the United States and
fast-growing countries
- Integration of major acquisitions
proceeding in line with objectives
Regulatory News:
Essilor International (Paris:EI), the world leader in ophthalmic
optics, today announced that consolidated revenue for the third
quarter of 2014 totaled €1,415 million, representing an increase of
14.5% excluding the currency effect.
Consolidated revenue – third quarter
2014
In € millions
Q3 2014
% Change(reported)
% Change(like-for-like)
Change in thescope
ofconsolidation
Currencyeffect
Lenses and Optical Instruments 1,274
+14.3% +5.5% +9.0% -0.2% North America
527 +19.8% +7.1% +13.2%
-0.5% Europe
409 +8.7%
+0.3% +7.7% +0.7% Asia/Pacific/Middle East/Africa
234 +12.9% +8.0% +5.0%
-0.1% Latin America
104 +14.2%
+13.3% +3.5% -2.6%
Equipment
46 -12.5% -10.1% -2.3%
-0.1%
Sunglasses & Readers 95
+35.0% -10.5% +44.4% +1.2%
TOTAL
1,415 +14.4% +3.9%
+10.6% -0.1%
“Everywhere in the world, the eyecare market continues to enjoy
strong demand for visual health,” said Hubert Sagnières, Chairman
and Chief Executive Officer of Essilor. “The third-quarter
performance attests to the ability of our teams and strengthened
management organization to carry out Essilor’s mission and execute
a clear strategy aimed at increasing market share in all of its
businesses, i.e. ophthalmic lenses, sun lenses and online sales.
The dynamic we set in motion is really paying off and allowing us
to approach the end of the year as well as 2015 with
confidence.”
Third-quarter revenue driven by an acceleration in the Lenses
and Optical Instruments division
Like-for-like growth in the third quarter (3.9%) was led by the
Lenses and Optical Instruments division, which saw a 5.5%
like-for-like revenue increase, its strongest rate of expansion
since the second quarter of 2012.
This performance was underpinned by a variety of factors:
- Vigorous sales of value-added products,
including the Crizal®, Varilux®, Transitions® and Xperio®
lenses.
- The positive impact of consumer
marketing campaigns.
- An excellent performance in the United
States and Canada.
- 11.2% like-for-like growth in
fast-growing countries, which account for about 22% of consolidated
sales.
Newly acquired companies increased reported revenue for
the period by 10.6%, which reflected the 3.8% positive impact of
bolt-on acquisitions1, primarily due to strong growth achieved by
sun lens businesses Xiamen Yarui Optical (Bolon®) in China and
Costa Inc. in the United States (see Sunglasses & Readers
below), and the 6.7% positive impact of strategic acquisitions.
Strategic acquisitions included Coastal.com, the integration of
which is proceeding in line with the objective to return to profit,
and Transitions Optical, which is enjoying sustained momentum in
sales to third-party lens casters and continuing to help unlock
synergies, thereby providing the resources to fund the ramp-up of
Essilor’s consumer marketing initiatives.
The currency effect was negligible, reducing revenue by
just 0.1% for the quarter. In fact, the gradual rise in the U.S.
dollar over the period had a positive impact on revenue toward the
period-end.
Revenue by region and division
Sales in North America continued to grow very rapidly (up
7.1% like-for-like) in a dynamic market. In Canada, sales continued
to advance at a satisfactory pace. In the United States, Essilor
led an assertive consumer communication strategy to support growth
in sales of its flagship brands Varilux®, Crizal®, Transitions® and
Xperio® among independent optometrists and to speed the deployment
of high value-added progressive, antireflective, photochromic and
polarized lenses. Growth was also lifted by managed care
organizations and large optical chains, the healthy performance of
retail operations and the uptick in online sales from Frames Direct
and EyeBuyDirect.
Sales in Europe were slightly higher (up 0.3%
like-for-like), with successful sales to key accounts and the
effects of consumer advertising offsetting the still significant
impact of a sales contract lost in the second half of 2013.
Conditions varied from country to country. Growth was led by the
ongoing recovery of the Southern European countries. Following the
example of Spain, where growth was in the double digits, sales in
Italy were stimulated by promotional campaigns. The United Kingdom
and the Eastern European countries went from strength to strength.
The situation remained more difficult in Germany and in Northern
Europe.
Asia-Pacific/Middle East/Africa operations (up 8%
like-for-like) were buoyed by swift momentum in fast-growing
countries. In China, the positive impact of the consumer media
campaign focusing on Crizal® UV and the E-SPF UV protection index,
coupled with strong demand for Transitions® photochromic lenses,
drove double-digit growth in the domestic market, which offset a
flat performance in the export business.
India saw double-digit growth in both the domestic and export
markets, against a backdrop of economic recovery. The increase was
mainly driven by Varilux® progressive lenses and antireflective
lenses, enabling Essilor to strengthen its positions particularly
in the mid-range. Growth improved in Southeast Asia, whereas the
situation in South Korea was more nuanced. South Africa witnessed a
sharp acceleration.
Performances by developed economies in the region were mixed.
Japan’s relatively weak performance was offset by Australia’s
robust growth, helped by the performance of the Crizal® UV lens,
which was endorsed by Cancer Council Australia for its protective
action against harmful UV rays.
Despite more difficult economic conditions in the region, growth
accelerated in Latin America (up 13.3% like-for-like), where
consumer demand for better vision remained strong. In Brazil,
Essilor reaped the rewards of the nationwide media campaign
promoting the Crizal® brand and the successful launch in the
southern part of the country of Kodak®-brand lenses, which
are the new standard-bearers in the mid-range segment.
Colombia continued to deliver very strong growth, driven by all of
Essilor's brands. For its part, Chile benefited from the ramp-up of
a contract with a major regional optical chain. Performances were
less favorable in Mexico and Argentina.
In Sunglasses & Readers, the strategy to expand
internationally and move the sunglasses range up market is being
carried out as planned. Recent acquisitions continued to drive high
levels of growth. These mainly corresponded to Costa, a major
player in the high-performance sunglasses segment in the United
States, and Xiamen Yarui Optical, which is leveraging the growing
success of the Bolon® brand in China. In addition, deployment of
the FGX lineup outside North America continued smoothly, with solid
performances achieved in Latin America and Europe.
The 10.5% like-for-like decline in sales for the division was
therefore exclusively linked to FGX’s operations in the North
American market. Despite higher sales of its products to end
consumers, its revenue was affected by the inventory drawdown
policies implemented by certain customers as well as the
postponement of programs to renew eyewear collections, which
normally lift growth. Facing these headwinds, FGX introduced a
series of new measures to revitalize its sales. A significant
improvement in performance is expected in the fourth quarter.
The Equipment division (down 10.1% like-for-like) was
hurt by an unfavorable basis of comparison and by a weak backlog at
the beginning of the quarter that reflected the slowdown in demand
for digital surfacing machines, particularly in the United States
and Europe. Note that the strategy of acquiring prescription
laboratories has a negative impact on the division’s reported level
of growth, as sales of machines and consumables to new partners are
recognized as intra-group revenue. The division’s performance
should however improve over the coming quarters based on the
success of surfacing microlines in Latin America and the new green
alternative to the traditional alloy ophthalmic blocking
process.
Nine-month consolidated revenue up
13.2% at constant exchange rates, in line with the annual
target
In € millions
2014 (9 months)
% Change(reported)
% Change(like-for-like)
Change in thescope
ofconsolidation
Currencyeffect
Lenses & Optical Instruments 3,693
+8.3% +4.2% +7.4% -3.3% North America
1,511 +11.6% +5.1% +10.1%
-3.6% Europe
1,235 +4.8%
-0.2% +4.9% +0.1% Asia/Pacific/Middle East/Africa
667 +8.4% +8.3% +6.0%
-5.9% Latin America
280 +6.6%
+9.8% +7.4% -10.5%
Equipment
131 -9.4% -5.6% -1.7%
-2.2%
Sunglasses & Readers 371
+44.1% -3.9% +50.5% -2.6%
TOTAL
4,195 +10.0% +3.3%
+9.9% -3.2%
Acquisitions and partnerships
In Russia, Essilor acquired a majority stake in Company Grand
Vision, a major distributor of ophthalmic lenses and contact
lenses that generates annual revenue of around €29 million. Company
Grand Vision will continue to be led by its current management team
and will help to strengthen Essilor’s multi-network strategy in
Russia, where the Essilor and BBGR brands have been on the market
for several years. The acquisition confirms the strategic nature of
this market of more than 140 million people, where less than a
third of the population is equipped with corrective eyewear and
where growth is driven by strong demand for value-added products
such as progressive and high-index lenses.
In China, Xiamen Yarui Optical (Bolon®), a 50%-held subsidiary
over which Essilor exercises control, signed an agreement subject
to certain conditions precedent, to become a majority shareholder
in the company that owns the Prosun® brand. Prosun®, which
generated revenue of about €7 million in 2013, designs,
manufactures and sells sunglasses in China’s fast-growing mid-range
segment. The second best-known local sunglasses brand in China
after Bolon®, Prosun® mainly specializes in sunglasses for men and
children, and will therefore enhance Essilor’s current offering
under the Bolon® and Molsion® brands.
Cash and cash equivalents
Cash generated over the period allowed Essilor to engage in the
process of reducing its net debt. At September 30, net debt stood
at around €2,048 million, versus €2,166 million at June 30.
Outlook
Essilor confirms its annual target to achieve revenue growth of
over 13% excluding the currency effect and an adjusted2
contribution from operations of around 18.6% of revenue, for a
significant increase on 2013.
A conference call in English will be held today at 10:00 a.m.
CEST.
Please dial-in at the following numbers: +33(0)1 76 77 22 27 or
+44(0)20 3427 1904 (access code: 1186950)
The call will be available for later listening at:
http://hosting.3sens.com/Essilor/20141024-381DA1C5/en/
Investor calendar
The 2014 annual results will be released on February 19,
2015.
About Essilor
The world’s leading ophthalmic optics company, Essilor designs,
manufactures and markets a wide range of lenses to correct and
protect eyesight. Its corporate mission is to improve vision to
improve life. 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®,
Transitions®, Definity®, Xperio®, Optifog™, Foster Grant®, Bolon®
and Costa®. It also develops and markets equipment, instruments and
services for eyecare professionals.
Essilor reported consolidated revenue of over €5 billion in 2013
and employs more than 55,000 people. It distributes its products in
some 100 countries with 28 plants, more than 450 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 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.
Appendix: Consolidated Revenue by
Quarter (€ millions)
2014
2013 First Quarter
Lenses and Optical Instruments
1,160 1,149
467 463
400 402
- Asia/Pacific/Middle East/Africa
211 205
82 79
Equipment
39 42
Sunglasses &
Readers 124 85
TOTAL First Quarter 1,323
1,276 Second Quarter
Lenses and Optical
Instruments 1,259
1,148
518 452
426 400
- Asia/Pacific/Middle East/Africa
222 203
94 93
Equipment
46 50
Sunglasses &
Readers 152 102
TOTAL Second Quarter 1,457
1,300 Third Quarter
Lenses and
Optical Instruments 1,274
1,114
527 439
409 376
- Asia/Pacific/Middle East/Africa
234 208
104 91
Equipment
46 52
Sunglasses &
Readers 95 71
TOTAL Third Quarter 1,415
1,237 Fourth Quarter
Lenses and Optical
Instruments
1,095
416
394
- Asia/Pacific/Middle East/Africa
197
88
Equipment
60
Sunglasses & Readers
97
TOTAL Fourth Quarter
1,252
1 Acquisitions or local partnerships2 Adjusted for non-recurring
items mainly related to the acquisitions of Transitions Optical,
Costa, Coastal.com and Xiamen Yarui Optical.
Investor Relations and Financial CommunicationVéronique
GilletSébastien LeroyAriel BauerPhone: +33 (0)1 49 77 42
16orCorporate CommunicationsLucia DumasPhone: +33 (0)1 49 77
45 02orPressMaïlis ThiercelinPhone: +33 (0)1 49 77 45 02
Eurogas (CSE:EI)
Historical Stock Chart
From Nov 2024 to Dec 2024
Eurogas (CSE:EI)
Historical Stock Chart
From Dec 2023 to Dec 2024
