Essilor - Third-Quarter 2010 Report

Oct 22, 2010, 01:33 ET from Essilor

CHARENTON-LE-PONT, France, October 22, 2010 /PRNewswire-FirstCall/ --

- Nine-Month Revenue up 17.6%

- Strong Sales In Emerging Markets and the Equipment division

Essilor International, the world leader in ophthalmic optics, today announced its consolidated revenue for the nine months ended September 30, 2010.

    Nine-month consolidated revenue

    EUR millions      2010     2009    % Change      % Change    Contribution
                                      (reported*) (like-for-like)    from
                   (9 months)(9 months)                          acquisitions

    Lenses and      2,685.0   2,396.5    +12.0%         +2.5%         +4.2%
    Europe          1,047.1     989.4     +5.8%         +0.8%         +4.1%
    North America   1,162.8   1,051.5    +10.6%         +1.3%         +3.8%
    Asia-Pacific &    333.6     259.7    +28.5%         +8.4%         +5.7%
    Latin America     141.5      95.9    +47.5%        +18.5%         +5.5%
    Equipment          91.6      71.9    +27.4%        +10.6%        +16.8%
    Readers           127.2         -      N/M           N/M           N/M
    TOTAL           2,903.8   2,468.5    +17.6%         +2.8%         +9.7%

    *Currency effect: +5.1%

Consolidated revenue for the first nine months of 2010 amounted to EUR2,903.8 million, up 17.6% compared with the prior-year period. On a like-for-like basis, revenue rose by 2.8%, led by strong growth in sales in emerging markets and the sharp recovery in the Equipment Division.

Changes in the scope of consolidation accounted for 9.7% of reported growth, of which 3.1% for bolt-on acquisitions and 6.6% for strategic acquisitions (Signet Armorlite and FGX International).

The 5.1% positive currency effect resulted mainly from the appreciation against the euro of the US and Canadian dollars, the Brazilian real and, to a lesser extent, the Australian dollar.

For the nine months ended September 30, Essilor reported 5.9% revenue growth excluding the currency effect and strategic acquisitions, in line with its full-year objective.

    Third quarter revenue up 21.4%
    Consolidated revenue

    EUR millions   Q3     Q3    % Change      % Change     Contribution
                  2010   2009  (reported*) (like-for-like)     from
    Lenses and   898.0  782.9    +14.7%         +2.6%         +4.4%
    Europe       339.4  324.3     +4.7%         -0.4%         +4.0%
    North        386.4  333.4    +15.9%         +1.8%         +3.7%
    Asia-Pacific 119.4   89.6    +48.3%         +9.1%         +7.4%
    & Africa
    Latin         52.8   35.6    +33.3%        +21.7%         +6.2%
    Equipment     31.5   22.1    +42.1%        +14.7%         +27.5%
    Readers       47.5      -      N/M           N/M            N/M
    TOTAL        977.0  805.1    +21.4%         +3.0%         +10.9%

    *Currency effect: +7.5%

In the third quarter, consolidated revenue rose by 21.4% on a reported basis.

The 3% like-for-like increase confirms the upswing in demand observed during the first half in a still uncertain business environment.

The impact of changes in the scope of consolidation added 10.9% to growth, of which 2.9% from bolt-on acquisitions and 8% from strategic acquisitions.

Lastly, the decline in the euro against the Company's other billing currencies had a 7.5% positive impact on third-quarter revenue.

Performance by region and by division was as follows:

- A still-fragile recovery in Europe, where the overall performance was affected by weakness in the Instruments Division, due to a high basis of comparison. In the corrective lens segment, sales continued to trend upwards in France while demand improved in Germany, the United Kingdom and Poland. However, the situation remained difficult in Spain and Italy.

- Gains in North America. In the United States, the new Varilux Comfort(R) New Edition and Varilux Physio(R) Enhanced(TM) lenses were well received by independent optometrists. Sales to optical chains were stable while demand for polarized lenses remained strong.

- Ongoing sales growth in emerging markets in Asia. Demand continued to be robust in India and China, as well as in the ASEAN countries where the product mix improved. On the other hand, difficult market conditions persisted in Japan and Australia.

- Very sharp growth in Latin America. In Brazil, the strategic development of the premium and mid-range segments generated an increase in unit sales and an improvement in the product mix, with Crizal(R) lenses in particular making significant gains. Growth was led by Argentina, where Essilor increased its market share.

- Continued strong momentum for the Equipment division, which benefited from firm demand for digital surfacing machines. The order backlog stabilized at a high level.

- In line with forecasts, a satisfactory performance in the Readers division, led by the success of new products.

Significant third-quarter events and other transactions


In the third quarter, Essilor made five new acquisitions, of which three in the United States, one in the United Kingdom and one in India.

In addition to the previously announced transactions with Gulf States and PASCH (Nikon-Essilor), Essilor of America forged a partnership with Reliable Optics, a Brooklyn, New York-based prescription laboratory that generates approximately $4.3 million in revenue.

In the UK, Essilor acquired an 80% stake in Leicester Optical, a prescription and edging laboratory based in Rothley with sales of EUR1.8 million.

In India, Essilor acquired a majority stake in GKB Optics Technologies, a prescription laboratory based in New Delhi with annual revenue of EUR0.8 million.

Since the beginning of the year, Essilor has acquired 18 companies (excluding Signet Armorlite and FGX International) representing additional full-year revenue of approximately EUR92 million.

On October 15, Essilor announced an agreement with Kibbutz Shamir to acquire 50% of Shamir Optical, an independent producer of ophthalmic lenses that reported 2009 revenue of $142 million. The transaction, which is subject to the approval of Shamir Optical's shareholders and various regulatory authorities, is expected to close in mid-2011.

Cash position

Between July and September, Essilor purchased 1.63 million of its own shares on the market, at a total cost of EUR78 million. Essilor also sold its long-standing stake in Sperian Protection to Honeywell, generating net proceeds of EUR132 million.

Combined with these transactions, cash flow generated during the period enabled the Company to reduce its net debt from EUR638 million at June 30 to EUR332 million at the end of September.


In the context of a gradual recovery in the world economy, Essilor is continuing to diligently deploy its growth strategy, based on new products, geographic expansion, bolt-on acquisitions and gains in the mid-range segment. For the full year, the Company confirms its objectives of revenue growth of 5% to 7% excluding the currency effect and strategic acquisitions, and a stable contribution margin excluding strategic acquisitions and changes in IFRS.

    Appendix - Quarterly revenue data

    EUR millions  Q3 2010 Q2 2010 Q1 2010 Q3 2009 Q2 2009 Q1 2009
    TOTAL           977.0  1,020.9  905.8   805.1   823.0   840.4

    Europe          339.4   362.3   345.3   324.3   335.0   330.0

    North America   386.4   400.8   375.7   333.4   345.7   372.5

    Asia-Pacific    119.4   111.2   103.1    89.6    84.4    85.7

    Latin America    52.8    48.8    39.9    35.6    32.5    27.8

    Equipment        31.5    36.6    23.6    22.1    25.4    24.4
    Readers          47.5    61.4    18.3       -       -       -

    A conference call in French will be held today at 9:00 a.m. CEST.
    The number to dial is: +33(0)1-70-99-42-67
    The conference will be available for later listening at:
    A conference call in English will follow at 10:00 a.m. CEST.
    The number to dial is: +44(0)20-7138-0845
    The conference will be available for later listening at:


The world leader in ophthalmic optical products, Essilor International researches, develops, manufactures and markets around the world a wide range of lenses to improve and protect eyesight. Its flagship brands are Varilux(R), Crizal(R), Essilor(R), Definity(R) and Xperio(TM).

Based in France, the Company reported consolidated revenue of more than EUR3.2 billion in 2009, with 34,700 employees and operations in 100 countries.

    For more information, please visit
    Investor Relations and Financial Communications
    Veronique Gillet - Sebastien Leroy
    Phone: +33(0)1-49-77-42-16

SOURCE Essilor