Essilor - 2010 First Quarter Report
- A Solid First Quarter, With Revenue Up 7.8%
Essilor International, the world leader in ophthalmic optics, todayannounced that consolidated revenue for the three months ended March 31, 2010rose by 7.8% to EUR905.8 million, in line with stated objectives.
Revenue was up 2.5% like-for-like, led by sharply higher sales inemerging markets and a gradual upturn in business in mature markets. Eyecareprofessionals responded favorably to the launch of new products like theVarilux Physio(R) 2.0 lens, personalized lenses integrating Eyecode(TM)technology in Europe and Crizal Forte lenses worldwide. Unit sales rose, ledby the implementation of the mid-range product strategy.
Changes in the scope of consolidation accounted for 5.1% of reportedgrowth, of which 2.9% for so-called "organic" acquisitions of prescriptionlaboratories and distributors and 2.2% for the acquisition of FGXInternational.
The currency effect was almost neutral, at 0.2%. The decline in the USdollar against the euro was offset by a rise in other currencies, inparticular the Brazilian real, the Canadian dollar and the Australian dollar.
In Europe, business overall continues to improve each quarter, althoughperformance and trends vary from one country to another. Sales increased inFrance thanks to a solid improvement in the lens business and strong demandfor instruments. Belgium saw a return to growth, as did Eastern Europe, ledby Poland. Demand was stable in the United Kingdom, while conditions remaineddifficult in certain Scandinavian countries, the Netherlands and Spain.
In North America, business was sustained by a sharp increase in unitsales, especially in the United States where all distribution networkscontributed to growth.
In Asia, growth was very strong in emerging markets, particularly India,the ASEAN countries and China. In Australia, sales to independent eyecareprofessionals trended upwards, while in Japan demand remained sluggish.
In Latin America, business improved in all countries. In Brazil, sales ofpremium and mid-range products continued to rise.
Equipment sales to prescription lens laboratories started to pick upduring the quarter with order intake rising substantially, especially inemerging markets.
Significant first-quarter events and other transactions
Essilor pursued its strategy of organic acquisitions, carrying out sevennew transactions.
- During the quarter, majority interests were acquired in ILT Danyang inChina, Ghanada Opticals in the United Arab Emirates and Eyebiz in Australia.All of these transactions had been previously announced. Following thesuccessful launch in the United States of an online sales service for eyecareprofessionals, Essilor of America announced the acquisition of a majoritystake in Frames for America, which operates the FramesDirect.com website andgenerates annual revenue of approximately $10 million.
Since the beginning of the year, Essilor has also made two strategicacquisitions: FGX International, the North American leader innon-prescription reading glasses with $259 million in 2009 revenue, andCalifornia-based Signet Armorlite, one of the largest independentmanufacturers of ophthalmic lenses and the exclusive producer of Kodak-brandlenses, with 2009 revenue of approximately $115 million.
Essilor also announced its support for Cinven Investment Fund's tenderoffer for Sperian Protection, in which Essilor holds a 15.05% stake. Along-time shareholder in Sperian Protection, Essilor has pledged to supportthe company in this new phase of its development, alongside a recognizedfinancial partner.
Share buybacks - Cash position
Since January, Essilor has purchased 1.76 million of its own shares onthe market, for a total of about EUR79 million. These share buybacks areintended to offset potential dilution from the conversion of outstandingOCEANE bonds and from shares issued as part of employee share-based paymentplans. Due to the FGX acquisition, share buybacks and seasonal fluctuationsin business, net debt amounted to EUR360 million at March 31, implyinggearing of some 12%.
The world leader in ophthalmic optical products, Essilor Internationalresearches, develops, manufactures and markets around the world a wide rangeof corrective lenses to improve and protect eyesight. Its flagship brands areVarilux(R), Crizal(R), Essilor(R), Definity(R) and Xperio(TM).
Based in France, the company reported consolidated revenue of more thanEUR3.2 billion in 2009, with nearly 35,000 employees and operations in 100countries.
For more information, please visit http://www.essilor.com.
The Essilor share trades on the NYSE Euronext Paris market and isincluded in the CAC 40 index.
Codes and symbols: ISIN: FR FR0000121667; Reuters: ESSI.PA; Bloomberg:EI:FP.Consolidated revenue EUR millions Q1 2010 Q1 2009 % Change % Change Contribution (reported*) (like-for-like) from acquisitions TOTAL 905.8 840.3 +7.8% +2.5% +5.1% Optical lenses 863.9 815.9 +5.9% +2.7% +4.0% and instruments Europe 345.3 330.0 +4.6% +0.7% +3.2% North America 375.6 372.5 +0.9% +2.1% +2.6% Asia-Pacific & 103.1 85.6 +20.4% +8.5% +3.3% Africa Latin America 39.9 27.8 +43.6% +15.3% +5.9% Laboratory 23.6 24.4 -3.4% -3.4% 0% equipment FGX 18.3 - - - - International *Currency effect: +0.2% Business by region
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