- Revenue: Up 6.7% at constant exchange rates, up 3.1% like-for-like
- Robust growth in the United States and e-commerce activities
- Adjusted contribution from operations: 18.3% of revenue
- Healthy free cash flow generation
Charenton-le-Pont, France (March 1, 2018 – 6:30 am) – The Board of Directors of Essilor International met on February 28, 2018 to approve the financial statements for 2017. These statements have been audited and the auditors are in the process of issuing their report.
“Essilor continued its mission to improve vision across the globe in 2017, and delivered another year of earnings growth. Our ambition to eradicate poor vision drives a development strategy that is supported more than ever by our powerful innovation capacity, our acquisition model and the quality of our governance, in which an increasing number of group employees are involved. The momentum created by the rollout of new products, notably in the fourth quarter, together with the numerous transformative initiatives undertaken in 2017, allow us to look ahead to 2018 with confidence.
Once completed, the combination with Luxottica will open a new chapter for us, allowing us to grow in a way that benefits consumers and the optical industry” commented Hubert Sagnières, Essilor Chairman and CEO.
In 2017, Essilor continued to provide an ever-growing number of solutions to respond to unmet visual needs by pursuing a strategy of expanding its scope of operations in sunwear and online sales.
In prescription lenses, a strategy geared to innovation, consumer marketing, partnerships and new, inclusive business models led to launches in all price ranges of a variety of products for correcting and protecting eyesight and preventing visual health risks. Custom services were also developed for a growing number of eyecare professionals, and the Company continued to expand geographically.
The rollout of Essilor’s portfolio of sunwear brands continued, particularly in China, and the Company boosted its presence and organization in online retailing.
More importantly, Essilor began writing a new chapter in its history in 2017 with the announcement on January 16 of its proposed combination with Luxottica. Major strides were made during the year toward finalizing the combination. After shareholders approved the combination at the General Meeting of May 11, 2017, Essilor completed the hive-down of its activities on November 1, 2017, paving the way for it to become the holding company at the top of the combined group that will house Essilor and Luxottica. The two companies also filed notices with antitrust authorities in several jurisdictions, 13 of which have approved the deal unconditionally as of today.
Highlights of the 2017 fiscal year included:
- A sharp acceleration in fourth quarter like-for-like revenue growth at 5.1%;
- Good overall performance at the Lenses and Optical Instruments division, primarily reflecting accelerated growth in the United States in the second half and strong online sales. These positive trends offset weakness in some countries, particularly Australia and Brazil;
- Global rollouts of the new Varilux® X series™ progressive lens, the new Crizal® Sapphire™ 360° anti-reflective lens and the Eye Protect System™ lens, which sets a new standard for protection against UV rays and harmful blue-violet light;
- Further development of the Sunglasses & Readers division characterized by solid growth in the United States and the integration of Photosynthesis Group in China;
- Robust growth at the Equipment division, driven by positive momentum in the optical industry and the appetite of many players for new lens manufacturing technologies;
- The completion of nine partnerships or acquisitions representing combined full-year revenue of close to €87 million;
- Significant free cash flow generation at €925 million that allowed Essilor to make significant progress in reducing its net debt.
The Board of Directors will recommend that shareholders at the Annual Meeting of April 24, 2018 approve the payment of a dividend of €1.53 per share, an increase of 2% from 2016. This dividend will be paid as from April 30, 2018 (ex-date April 26, 2018).
The solid performance in 2017 and the ongoing deployment of growth initiatives enable Essilor to target, in 2018, revenue growth of around 4% like-for-like(a) and a contribution from operations(b) greater than or equal to 18.3%(g) of revenue.
The finalization of the proposed Essilor and Luxottica combination is planned for the first part of 2018 after obtaining all necessary authorizations.
A conference call in English will be held today at 10:30 a.m. CET.
The meeting will be available live and may also be heard later at:
Forthcoming investor events
April 24, 2018: Annual Shareholder’s Meeting at “La Maison de la Mutualité”, Paris, France
April 27, 2018: First-quarter 2018 revenue
a – Like-for-like growth: Growth at constant scope and exchange rates. See definition provided in Note 2.3 to the consolidated financial statements of the 2016 Registration Document.
b – Contribution from operations: Revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses).
c – Bolt-on acquisitions: Local acquisitions or partnerships.
d – Free cash flow: Net cash from operating activities before working capital requirement.
e – 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.
f – Adjusted: There are two main types of adjustment items. First, expenses associated with the proposed combination with Luxottica, and, second, the positive effects of tax changes in the United States and France. These non-recurring adjustments cover:
– Transaction costs related to the proposed combination with Luxottica for €109 million;
– An additional cost of €45million principally linked to the lifting of performance conditions for two employee shareholding plans;
– A one-time contribution for €19 million to mission-related programs focused on eradicating poor vision worldwide;
– A gain from the refund of the 3% dividend tax in France, net of one exceptional tax, for €19 million;
– A one-time gain linked to tax reform passed in the United States in December 2017 for €73 million.
The reported accounts and a reconciliation of the reported accounts to the adjusted accounts are provided in chapter 1.6.1.
g – Excluding any new strategic acquisition.
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