*Currency effect: +2.9%. **Excluding Satisloh sales to Essilor, whichtotaled EUR21.1 million. ***Satisloh was not part of the Company in the firstnine months of 2008.
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Consolidated revenue for the first nine months of 2009 totaled EUR2,468.5million, an increase of 8.4% year-on-year as reported and a decline of 0.4%like-for-like. Changes in the scope of consolidation accounted for 5.9% ofreported growth, corresponding to 0.8% from companies acquired in 2009, 2%from certain companies acquired in 2008 and 3.1% from Satisloh. The positive2.9% currency effect mainly reflected the rise in the dollar and, to a lesserextent, the yen against the euro, which offset the negative impact of theweaker Brazilian real, British pound and Australian dollar.
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*Currency effect: +0.5%. **Satisloh was not part of the Company inthird-quarter 2008.
In the third quarter alone, consolidated revenue rose by 6.3% on areported basis. The 0.1% like-for-like gain over the period confirmed thegradual upturn in business following like-for-like declines of 1% in thefirst quarter and of 0.4% in the second.
The slide in the US dollar since May significantly attenuated thepositive currency effect, which amounted to 0.5% for the quarter. The impactof changes in the scope of consolidation was on a par with the secondquarter, adding 5.6% to growth, of which 2.8% from Satisloh.
In Europe, performance and trends continued to vary by country. Growthwas robust in France, supported by a solid performance in the lens businessand stronger instrument sales led by pent-up demand, particularly for the MrBlue(R) edger. Operations in the United Kingdom, Italy and, to a lesserextent, Spain began to see a noticeable upturn in business, but the situationremained difficult in the Nordic countries, Eastern Europe and theNetherlands.
In North America, overall performance was hampered by a poorthird-quarter in Canada, but business held firm in the United States. Led bythe launch of the Xperio(TM) polarized lens, KBco reported strong salesgrowth, as did stock lens distributor Nassau.
In Asia, third-quarter performance was in line with trends observed sincethe beginning of the year. Growth remained very strong in emerging economies,where the launch of specially adapted lenses (Essilor(R) Azio360degrees(TM)and Varilux(R) India360degrees(TM)) helped to drive new market share gains.In Australia, sales to independent eyecare professionals are trending sharplyupwards. Lastly, business in Japan continues to suffer from depressed demand.
Despite a strong performance in Mexico and Central America, growth inLatin America was dampened by highly unfavorable prior-period comparatives.
Significant third-quarter events and other transactions
Acquisitions
Essilor completed six acquisitions - two in Europe and four in the UnitedStates - in the third quarter. In addition to the previously announcedacquisitions of De Ceunynck and WLC in Europe and Apex Optical, Vision Pointeand Optisource in the US, Essilor of America acquired all the assets of OrionProgressive Lab, a Wisconsin-based prescription laboratory with nearly $5million in revenue. It has been consolidated since September 1.
In all, Essilor has acquired 17 companies since January 1, representingadditional full-year revenue of approximately EUR83 million.
Share buybacks - Cash position
During the third quarter, as part of the share-buyback program set up tooffset dilution from the conversion of outstanding OCEANE bonds, Essilorpurchased one million of its own shares on the market, for a total of nearlyEUR38 million.
The substantial free cash flow generated during the period helped toreduce net debt by EUR87 million to EUR125 million.
Outlook
In the second half, Essilor is pursuing its development based on thelaunch of products, services and growth initiatives. At the same time, theCompany will continue to diligently manage its operating expenses. For thefull year, Essilor expects to report an increase in revenue, withlike-for-like growth of around 0%, and an improved contribution margincompared with 2008.
Essilor International is the world leader in ophthalmic optical products,offering a wide range of lenses under the flagship Varilux(r), Crizal(r),Essilor(r) and Definity(r) brands to correct myopia, hyperopia, presbyopiaand astigmatism. Essilor operates worldwide through 15 production sites, 293lens finishing laboratories and local distribution networks.
The Essilor share trades on the NYSE Euronext Paris market and isincluded in the CAC 40 index.
Codes and symbols: ISIN: FR 0000121667; Reuters: ESSI.PA; Bloomberg:EI:FP.
[1] Application of IFRS 8 - Operating Segments has resulted in thecreation of the "Laboratory Equipment" business segment, which includes themachines, consumables and replacement parts sold by Satisloh and Delamare toprescription laboratories. The change has not had a material impact onrevenue from the operating regions, which consolidate all of the other sales(primarily of ophthalmic lenses and optical instruments).CHARENTON-LE-PONT, France, October 22 /PRNewswire-FirstCall/ -- - Nine-Month Revenue up 8.4% - Positive Like-for-Like Growth in the Third Quarter
SOURCE Essilor
