- On track with objectives: First-half like-for-like growth1 of 4.0%, including 4.8% in Q2, and contribution from operations2 at 18.4% of revenue
- Major brands and new products driving growth
- Gross margin expansion fueling continued investments in future growth
Charenton-le-Pont, France (July 26, 2018 – 6:30 am) – The Board of Directors of Essilor International (Compagnie Générale d’Optique) met yesterday to approve the financial statements for the six months ended June 30, 2018. The auditors have performed a limited review of the consolidated financial statements.
Commenting on these results, Hubert Sagnières, Chairman and Chief Executive Officer of Essilor, said: “Essilor delivered solid results in all regions and divisions in the first half of 2018, while at the same time preparing for its proposed combination with Luxottica. This performance reflects the mobilization of our teams around a powerful and unique mission: “Improving lives by improving sight”. This translates into a clear growth strategy with an aim to improve and protect the vision of more than 7 billion people around the world with solutions for consumers with any level of means. Our innovations are particularly appreciated in many countries where needs remain significant, from the United States and China to Brazil and elsewhere. This allows us to continue investing more in the future well-being of populations, and increases our confidence in the future.”
First-half operating highlights
Consolidated revenue reached €3,726 million in the first half of 2018, an increase of 4.4% at constant exchange rates including 4.0% in like-for-like1 terms. Contribution from operations2 amounted to 18.4% of revenue. Excluding currency effects, adjusted6 earnings per share rose by 4.5%. Free cash flow5 reached €263 million.
Other highlights of the first half were:
– Revenue growth of 4.1% in constant currency at the Lenses & Optical Instruments division, of which 3.6% like-for-like1, including:
- An improved product mix driven by the success of new branded lenses, notably Varilux® X series™ in the United States, Crizal® Sapphire™ 360° in the United States and in Europe and Eyezen™ around the world;
- Close to 6% volume growth for Transitions® sales through the Company’s own distribution networks. Concurrently, the decline in sales volumes to third-party lens makers slowed markedly;
- Strong momentum in the US and in e-commerce;
- Very promising trends in fast-growing markets9, including a sales rebound in Brazil.
– Robust performance at the Sunglasses & Readers division, which delivered 8.1% like-for-like1growth;
– Delivering on the Company’s ambition to eradicate poor vision by providing vision solutions to some 4 million new wearers, notably through the extension of inclusive business models in new countries;
– Good profitability after additional investments in the most attractive distribution channels and market segments;
– A gradual resumption of the acquisitions and partnerships strategy, leading to the acquisition of majority stakes in four companies representing combined full-year revenue of around €27
Encouraged by strong results for the first six months and the many sales initiatives planned for the second half, Essilor confirms its full-year 2018 targets, calling for like-for-like1 revenue growth of around 4% and a contribution from operations2 greater than or equal to 18.3%7 of revenue.
Proposed combination of Essilor and Luxottica
Efforts continued in the first half of 2018 to complete the proposed combination of Essilor and Luxottica. On March 1st, the proposed combination was approved without conditions by the European Commission and the US Federal Trade Commission. On June 29, Essilor and Luxottica announced the extension to
July 31, 2018 of the deadline of both the Combination Agreement and Contribution Agreement signed between Essilor and Delfin, Luxottica’s majority shareholder. Essilor and Luxottica are finalizing discussions with the Chinese competition authority and are confident to obtain its approval by the end of July. In parallel, the two companies are progressing in their discussions with the Turkish antitrust authority and evaluating the timing for the closing of the transaction.
A conference call in English will be held today at 10:30 a.m. CEST.
The meeting will be available live and may also be heard later at:
The interim financial report is available at www.essilor.com, by clicking on:
- Like-for-like growth: Growth at constant scope and exchange rates. See definition provided in Note 2.4 to the consolidated financial statements in the 2017 Registration Document.
- Contribution from operations: Revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses).
- Bolt-on acquisitions: Local acquisitions or partnerships.
- Operating cash flow: Net cash from operating activities before working capital requirement.
- Free cash flow: Net cash from operating activities less purchases of property, plant and equipment and intangible assets, according to the IFRS consolidated cash flow statement.
- Adjusted for expenses accounted for in the financial statements in the context of the proposed combination with Luxottica.
- Excluding any new strategic acquisitions.
- The group has applied IFRS 15 related to revenue recognition since January 1st, 2018. The 2017 statement of income has been restated accordingly.
- Fast-growing countries include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America.
Véronique Gillet – Sébastien Leroy
Ariel Bauer – Alex Kleban
Tel.: +33 (0)1 49 77 42 16
Tel.: +33 (0)1 49 77 45 02
Tel.: +33 (0)1 49 77 45 02