First Quarter
Driving Toward Full-Year Targets
PDF Version of the news release
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Sustained momentum in China and return to growth
in Brazil
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Solid trends in mature countries impacted by
poor weather
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Good results in sunwear and e-commerce
Charenton-le-Pont, France (April 27, 2018 - 6:30
a.m.) - Essilor, the world leader in
ophthalmic optics, today announced that consolidated revenue for
the first quarter of 2018 totaled €1,825 million, representing an
increase of 3.8% in constant currency.
First-quarter
2018 consolidated revenue*
€ millions |
Q1 2018 |
Q1 2017 |
% Change (reported) |
% Change
(like-for-likea) |
Change in scope of consolidation |
Currency effect |
Lenses & Optical Instruments |
1,592 |
1,688 |
-5.7% |
+2.9% |
+0.7% |
-9.4% |
North America |
692 |
761 |
-9.1% |
+3.4% |
+0.9% |
-13.4% |
Europe |
491 |
495 |
-0.7% |
+0.7% |
+0.2% |
-1.6% |
Asia/Pacific/Middle East/Africa |
297 |
306 |
-2.8% |
+6.2% |
+0.6% |
-9.6% |
Latin America |
112 |
126 |
-11.3% |
+1.2% |
+1.9% |
-14.4% |
Sunglasses & Readers |
190 |
199 |
-4.9% |
+6.6% |
0% |
-11.5% |
Equipment |
43 |
50 |
-12.4% |
-3.1% |
0% |
-9.4% |
TOTAL |
1,825 |
1,937 |
-5.8% |
+3.2% |
+0.6% |
-9.6% |
* The group has applied IFRS 15
related to revenue recognition since January 1st, 2018.
Q1 2017 Revenue has been restated accordingly, with a negative
impact of around €25m. As is customary, quarterly figures are
unaudited.
"Everyone at
Essilor continued to execute our growth strategy during the first
quarter in order to achieve our goal of eradicating poor vision
around the globe. After this sound start to the year, notably
thanks to good performances in sunwear and e-commerce, we are
confident that we will meet our full-year targets as the rollout of
new products gathers pace over the next few months. Moreover, the
combination with Luxottica will create new and exciting
opportunities for consumers and the optical industry in the short
and long term." commented Hubert Sagnières, Essilor Chairman
and Chief Executive Officer.
First-Quarter
Revenue
Q1
like-for-like(a) sales
growth of 3.2% reflected:
-
A 2.9% rise in sales at the Lenses & Optical
Instruments division, driven by new products, instruments and
e-commerce, though poor weather took a toll in Europe and North
America;
-
An excellent first three months for Sunglasses
& Readers, where sales were up 6.6%;
-
A demanding comparison base at the Equipment
division (-3.1%), while customer demand and the order book remained
solid.
The 0.6% consolidation scope effect reflected contributions from acquisitions
completed in 2017.
A negative currency effect of 9.6% primarily reflected euro
appreciation against the US dollar as well as against the Brazilian
real, Canadian dollar and Chinese yuan.
Revenue by Region
and Division
Lenses & Optical
Instruments
The Lenses & Optical Instruments division posted
like-for-like(a) revenue
growth of 2.9% in the first quarter, which included growth of 11.4%
for the e-commerce businesses.
Like-for-like(a)
revenue growth was 3.4% in North America. The
core US lens business grew faster than the overall region while
sales in Canada declined slightly.
In the United States, despite a temporary slowdown in areas
affected by adverse weather, demand for the flagship corrective
lens brands was strong throughout the quarter. This notably
benefited the "Ultimate Lens Package", a premium solution tailored
to progressive and single-vision lens wearers, launched during the
latter part of 2017. Growth in the first quarter was again
supported by the ongoing rollout of strategic initiatives focused
on independent eyecare professionals, including alliances (Vision
Source, PERC/IVA and Optiport) and business solutions (Essilor
Experts). Essilor's key account business continued to experience
strong demand for innovative lens offerings, such as
blue-light-filtering technology, and integrated supply chain
solutions while benefitting from exposure to faster growing retail
groups. Contact lens distribution activities also contributed to
growth during the quarter. Lastly, the Company increased its
efforts to eradicate poor vision by screening more disadvantaged
children thanks to strong support from employee volunteers.
Sales growth in Europe (0.7% like-for- like(a)) was fueled
chiefly by new products and the Company's brands, as well as by a
solid rise in online sales. Gains were offset in part by lower
footfall in stores resulting from two temporary factors: generally
inclement weather and an unfavorable calendar effect.
Most countries in the region continued to benefit from the growth
momentum of the new Varilux® X series(TM)
progressive lens, which created a positive mix effect and lifted
sales of Crizal® lenses. In
France, sales were resilient in a soft market thanks to offers
including a second pair of quality lenses and to strong gains for
Nikon® lenses
distributed through the BBGR network.
High-potential markets in Eastern Europe, chief among them Russia,
Hungary and Romania, delivered robust growth over the period.
Strong online sales contributed to revenue growth in the United
Kingdom. Sales were flat in German-speaking and Nordic countries
and declined in Southern Europe. Meanwhile, the Company continued
to advance its philanthropic initiatives to eradicate poor vision
across the region with the help of strategic public and private
sector partners.
Sales growth in Asia/Pacific/Middle East/Africa (6.2%
like-for-like(a)) was
powered by virtually all the countries in the region.
Like-for-like(a) growth was
around 8% in fast-growing markets.
Gains were notably driven by China, where all networks saw robust
growth, and sales were boosted in the high-end range by myopia
control solutions.
Results were very strong elsewhere in Asia as well. Business in
Korea benefited from accelerated penetration of progressive lenses
and strong sales of "Perfect-UV" lenses. ASEAN countries delivered
double-digit growth, as did the Africa-Middle East-Turkey region,
where an overall improvement in the product mix lifted sales.
Despite an acceleration in domestic sales, the situation in India
was again mixed. It is worth noting that the State of Telangana has
committed to screen its 35 million citizens and selected 2.5 New
Vision Generation, Essilor's inclusive business arm, to provide 2.2
million pairs of glasses in 2018.
Lastly, though momentum was very positive in Japan, a decline in
sales in Australia depressed results in developed markets.
Sales growth in Latin America was much stronger (1.2%
like-for-like(a)) than in
the last three months of 2017 despite a very unfavorable calendar
effect. The drivers were a return to growth in Brazil and good
performances in the majority of Spanish-speaking
countries.
In Brazil, targeted marketing initiatives designed to boost sales
of the Company's flagship brands (Varilux®,
Crizal®,
Transitions®) translated
into stronger momentum with independent eye care professionals,
notably through the network of partner labs. Kodak®
lenses, positioned in the mid-range, and instrument sales also
contributed to the rebound. Lastly, the "Ótica Cidadã"
program continues to address the unmet vision needs of the
underserved population by partnering with eyecare
professionals.
Elsewhere in the region, Argentina once again delivered
double-digit growth and Colombia continued to reap the benefits of
the partnership with Servi Optica, which aims to boost penetration
of Varilux®,
Crizal® and
Transitions® lenses and
increase market share with key accounts.
Sunglasses & Readers
Sunglasses & Readers division sales rose 6.6%
like-for-like(a) in the
first quarter.
In North America, revenue increased at FGX
International on the back of the new contracts won in 2017 and
good sell-through demand for sunglasses and readers in stores.
Costa also had a good quarter, with positive
momentum in the independent optician channel both for sun and
optical lines, prescription lens sales and brand expansion more
than offsetting lackluster results in sports stores. The 2018
collection launched by Xiamen Yarui Optical (Bolon(TM)) in China has been very well
received by consumers. MJS continued to
deliver growth and open new points of sale under its different
brands, ensuring that its store model keeps up with the
rapidly-changing demands of Chinese consumers for quality products
as well as improving access to good vision. Lastly, Merve had a good quarter in Turkey both for sunglasses
and optical frames.
Equipment
Sales at the Equipment Division contracted by 3.1%
like-for-like(a) from a
particularly demanding comparison base, which included two large
orders in Asia in the first quarter of 2017. Business continued to
be buoyed in North America and Europe by sales of the VFT-Orbit
2(TM) digital generator and Multi-FLEX(TM) polisher, and by strong
interest in the design of complete prescription laboratories.
Smaller prescription labs in Latin America continued to switch to
digital surfacing technology. The deployment of this technology
generates the necessary efficiency gains to support improved access
to vision correction for the greatest number of consumers. The
division's order book remains solid.
Outlook
The ongoing rollout over the
coming months of new products, including launches of the
Varilux® X series(TM)
and Crizal® Sapphire(TM)
360° lenses in many new geographic markets, should allow the
Company to build momentum and meet its full-year targets. In
addition, the Company has resumed its bolt-on acquisition activity
as part of its overall growth strategy.
It should be recalled that Essilor is targeting, in 2018,
like-for-like(a) revenue
growth of around 4% and a contribution from operations(b) greater
than or equal to 18.3%(c) 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 10:00 a.m. CEST.
The meeting will be available live and may also be heard later
at:
http://hosting.3sens.com/Essilor/20180427-19F19E4F/en/startup.php
Notes
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Like-for-like growth:
Growth at constant scope and exchange rates. See definition
provided in Note 2.4 to the consolidated financial statements of
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).
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Excluding any new strategic acquisition.
About Essilor
Essilor International (Compagnie Générale
d'Optique) ("Essilor") is the world's leading ophthalmic optics
company. Essilor designs, manufactures and markets a wide range of
lenses to improve and protect eyesight. Its mission is to improve
lives by improving sight. To support this mission, Essilor
allocates more than €200 million to research and innovation every
year, in a commitment to continuously bring new, more effective
products to market. Its flagship brands are Varilux®,
Crizal®,
Transitions®,
EyezenTM,
Xperio®, Foster
Grant®,
BolonTM and
Costa®. It also
develops and markets equipment, instruments and services for
eyecare professionals.
Essilor reported consolidated revenue of around
€7.5 billion in 2017 and employs approximately 67,000 people
worldwide. It has 34 plants, 481 prescription laboratories and
edging facilities, as well as 4 research and development centers
around the world. For more information, please visit
www.essilor.com.
The Essilor share trades on the Euronext Paris
market and is included in the Euro Stoxx 50 and CAC 40
indices.
Codes and symbols: ISIN: FR0000121667; Reuters:
ESSI.PA; Bloomberg: EI:FP.
CONTACTS
Investor Relations
Véronique Gillet - Sébastien Leroy
Ariel Bauer - Alex Kleban
Tel.: +33 (0)1 49 77 42 16 |
Corporate Communications
Laura Viscovich
Tel.: +33 (0)1 49 77 45 02 |
Media Relations
Maïlis Thiercelin
Tel.: +33 (0)1 49 77 45 02 |
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Source: Essilor International via Globenewswire