Revenue up very sharply by 25.4%
Annual targets confirmed
- Good momentum in the United States and
in Europe
- Success of the Crizal®, Varilux® and
Transitions® consumer brands
- Continuation of synergy plan with
Transitions Optical and Coastal.com
- Strengthening in Latin America and in
the Sun segment
Regulatory News:
Essilor International (Paris:EI), the world leader in ophthalmic
optics, today announced that consolidated revenue for the first
quarter of 2015 totaled €1,659 million, representing an
increase of 12.7% excluding the currency effect.
Consolidated revenue – first-quarter
2015
€ millions
Q1 2015
Change (reported)
Change
(like-for-like)
Changes inthe scope of
consolidation
Currency effect
Lenses and Optical Instruments
1,454 +25.3%
+4.4% +9.0%
+12.0% North America
650
+39.2% +4.5% +13.4%
+21.3% Europe
441
+10.4% +2.5% +7.0%
+1.0% Asia/Pacific/Middle East/Africa
267
+26.4% +5.6% +4.9%
+15.9% Latin America
96
+16.3% +10.0% +4.3%
+2.0%
Sunglasses & Readers
163 +31.4% +1.8%
+9.6% +20.0%
Equipment 42 +9.3%
-2.1% -2.4%
+13.7% TOTAL 1,659
+25.4% +4.0% +8.7%
+12.8%
Commenting on these figures, Hubert Sagnières, Chairman and
Chief Executive Officer of Essilor, said: "This first-quarter 2015
performance confirms our strong growth potential, which is
benefiting from the broadening of our playing field and the
extension of our geographical reach to meet the multiple eyesight
correction and visual protection needs around the world. Excluding
Japan, mature markets picked up pace while fast-growing markets
remained vibrant despite the lackluster economic environment in
certain countries. Business momentum should continue to accelerate
throughout the year on the back of the ramp-up of the media
campaigns and recent contract wins for our different businesses, as
well as the contribution of new local partnerships. That is why we
are confident that our full-year 2015 targets will be met."
Revenue trends
Like-for-like growth of 4.0% in the first quarter was driven
by:
- Like-for-like revenue growth of 4.4%
for the Lenses and Optical Instruments division, driven by dynamic
performances in the United States and in Europe, and the strong
increase in sales of high value-added lenses Crizal®, Varilux® and
Transitions®.
- Domestic growth of almost 12% in
fast-growing countries (all businesses combined).
- Strong sales growth for Bolon® and
Costa® sunglasses in China and the United States,
respectively.
- An anticipated decline in FGX sales in
North America, which are expected to rebound as from the second
quarter of the year.
The 8.7% positive impact from changes in the scope of
consolidation mainly reflects the 6.8% positive impact of strategic
acquisitions, comprising Transitions Optical and Coastal.com, whose
synergy plans remain well on track, as well as the 1.9% positive
impact of bolt-on acquisitions1.
The sharp increase against the euro of the main billing
currencies in the first quarter, notably the US and Canadian
dollars, the Chinese yuan, the British pound and the Indian rupee,
had a significant 12.8% positive currency effect on consolidated
revenue. The strength of the US dollar, a solid operating
performance as well as contributions from recent acquisitions
raised the proportion of revenue generated in North America (all
divisions combined) to more than 47% in the first quarter of the
year.
Revenue by region and division
Lenses and Optical Instruments
Sales in North America continued to advance rapidly in a
dynamic market, despite the highly adverse weather conditions. In
the United States in particular, business with independent eyecare
professionals was up sharply. The Crizal® and Xperio® brands posted
double-digit growth, while sales of Varilux® lenses also rose
strongly and online sales registered yet another quarter of very
strong organic growth. These trends are expected to carry over into
the coming quarters, powered by the ramp-up of consumer marketing
campaigns.
Like-for-like growth in Europe came out at its highest
level in three years, driven by good performances under integrated
supply-chain contracts with key accounts, the positive impact on
Varilux® sales of the advertising campaign promoting a quality
second pair in France, as well as momentum in Spain, Italy, the
United Kingdom, Eastern European countries and Russia. Sales
of instruments to eyecare professionals also trended upward during
the period.
Asia/Pacific/Middle East/Africa operations enjoyed
double-digit domestic growth in the region's fast-growing
countries, although this was partly offset by a softer performance
in export revenue (due mainly to currency fluctuations) and in
Japan. India's very strong growth trend continued thanks to the
success of its consumer brands and growing presence in an
environment where demand is shifting from glass to plastic lenses.
Sales in China were driven by the strong success of the Essilor
network brands, especially Crizal®. The Gulf countries, South
Africa and Southeast Asia all recorded double-digit advances. In
Southeast Asia, the success of Energeyes
(www.energeyes-eyewear.com), a range of non-prescription eyewear
designed to fight eye fatigue and protect against harmful blue
light, attests to the exciting potential of the non-prescription
visual protection segment. Among the region's developed countries,
Japan was affected by a particularly tough comparison base while
Australia enjoyed strong sales impetus.
Sales growth was satisfactory across the Latin America
region. Despite a flat Brazilian economy, Essilor consolidated its
position through the successful roll-out of Kodak® lenses, solid
results from its high value-added products and a competitive cost
base thanks to its local manufacturing facilities. Colombia went
from strength to strength, helped by the development of Servi
Optica. The initial benefits of the consumer advertising campaigns
launched in late February in these two countries began to feed
through right at the end of the quarter. Meanwhile, performances
improved in Mexico and Argentina.
In the Sunglasses & Readers division, growth was
driven by the vigorous expansion of Essilor brands in China –
Bolon®, Molsion® and Prosun®. Bolon® was especially buoyed by the
very promising launch of its communications campaign featuring new
brand ambassador Sophie Marceau, as well as the extension of its
distribution network to the duty free channel. In the United
States, Costa® sunglasses benefited from the expansion of their
geographical coverage. FGX continued to be held back by inventory
drawdowns and shrinkage in retail space among certain major
accounts in North America, and is expected to perform significantly
better as from the second quarter thanks to major distribution
contract wins in the United States and the ramp-up of Multifocus™
reading glasses, which enjoyed a very encouraging launch.
Revenue growth for the Equipment division tailed off
slightly following a dynamic final quarter of 2014. As in the
preceding quarters, the division's performance continued to be
penalized by the recognition of sales to recently-acquired
companies as intra-group revenue. However, business momentum was
strong in Asia, while revenue in Europe advanced modestly owing to
the delivery of several medium-sized generators. In
North America, flat demand for digital surfacing and coating
machines was partially offset by the continued success of the green
alternative to the traditional alloy ophthalmic blocking
process.
Acquisitions and partnerships
Since the beginning of the year, Essilor has pursued its
strategy of forging local partnerships, with five additional
transactions representing combined revenue in the region of around
€90 million on a full-year basis.
During the first quarter of the year, FGX International
acquired the entire share capital of Fabris Lane, a leading
mid-tier eyewear designer and marketer in the United Kingdom
that generates full-year revenue of around GBP 14 million. Fabris
Lane markets sunglasses either under proprietary brands, including
Freedom Polarised® and Suuna®, or under license, including
French Connection® and Karen Millen®. This acquisition successfully
rounds out the FGX offering in the United Kingdom, and strengthens
Essilor's offering aimed at department stores, drugstores,
pharmacies and eyecare professionals, as well as travel retail.
In Brazil, Essilor acquired a majority interest in
Segment, an ophthalmic lens manufacturer and distributor
based in São Paulo state with revenue of around €4 million. Segment
is a major player in the manufacture and distribution of
consumables, and is the leading maker of medium and high-index
ophthalmic lenses in Brazil. It also has expertise in low-vision
equipment as well as instruments for laboratories and eyecare
professionals, including for lens tinting and specialty coatings
such as the mirror effect.
Since April 1st, Essilor has acquired a majority
stake in Grupo Vision, an integrated laboratory and
distributor based in Costa Rica and Nicaragua. Grupo
Vision is a long-standing Essilor client with a headcount of 865
and revenue of approximately US$40 million in 2014. This
partnership will allow Essilor to significantly strengthen its
presence in Central America, a region of 44 million inhabitants
with significant growth potential in terms of both volume and
value.
In Turkey, Essilor has entered into an agreement to
acquire a majority stake in optical product distributor
Merve, which is based in Istanbul. Merve owns a portfolio of
proprietary sunglass frame brands, including Ossé and Mustang,
which enjoy excellent brand recognition in Turkey. The completion
of this acquisition is subject to the approval of the Turkish
anti-trust authorities.
Lastly, in South Korea, the lens manufacturer and Essilor
partner, Chemiglas, acquired the entire share capital of
Optimax, its long-standing distributor in the regions of
Daejeon and Chungcheong. This acquisition will allow Chemiglas to
speed up product penetration among opticians.
Outlook
After a good start to the year – especially in terms of
profitability – Essilor goes into the second quarter with added
momentum generated by the increase in media spend, the execution of
contracts with major accounts and a solid upward trend in developed
countries.
Essilor confirms its full-year 2015 targets of revenue growth of
between 8% and 11% (excluding the currency effect and barring new
strategic acquisitions), including revenue growth in excess of 4.5%
on a like-for-like basis and a contribution from operations2
excluding new strategic acquisitions of at least 18.8% of
revenue.
A conference call in English will be held today at 10 a.m.
CEST.
Please dial-in at the following numbers: +33(0)1 76 77 22 25 or
+44(0)20 3427 1903 (access code: 2996095)
The call may also be heard later at:
http://hosting.3sens.com/Essilor/20150421-13EB220E/en/
Investor calendar
The Annual Shareholders' Meeting will be held on May 5, 2015 at
Palais des Congrès in Paris.
The 2015 first-half results will be released on July 30,
2015.
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 mission is to improve lives by improving
sight. To fulfill it, Essilor allocates more than €180 million to
research and innovation every year, in a commitment to continuously
bringing new, more effective products to market. Its 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 nearly €5.7 billion in
2014 and employs 58,000 people. It markets its products in more
than 100 countries and has 33 plants, 490 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.
Appendix: Consolidated
Revenue by Quarter (€ millions)
2015 2014 First
Quarter Lenses and
Optical Instruments 1,454 1,160
650 467
441 400
- Asia/Pacific/Middle East/Africa
267 211
96 82
Equipment 42
39
Sunglasses & Readers 163
124
TOTAL First Quarter
1,659 1,323 Second Quarter
Lenses and Optical
Instruments 1,259
518
426
- Asia/Pacific/Middle East/Africa
222
94
Equipment
46
Sunglasses & Readers
152
TOTAL Second Quarter
1,457 Third
Quarter Lenses and
Optical Instruments 1,274
527
409
- Asia/Pacific/Middle East/Africa
234
104
Equipment
46
Sunglasses & Readers
95
TOTAL Third Quarter
1,415 Fourth
Quarter Lenses and
Optical Instruments 1,277
527
418
- Asia/Pacific/Middle East/Africa
231
101
Equipment
66
Sunglasses & Readers
132
TOTAL Fourth Quarter
1,475
1 Local acquisitions or partnerships2 Contribution from
operations corresponds to revenue less cost of sales and operating
expenses (research and development costs, selling and distribution
costs, other operating expenses).
Investor Relations and Financial CommunicationVéronique
GilletSébastien LeroyAriel Bauer+33 (0)1 49 77 42 16orCorporate
CommunicationLucia Dumas, +33 (0)1 49 77 45 02orMedia
RelationsMaïlis Thiercelin, +33 (0)1 49 77 45 02
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