Essilor

Revenue Up 8.1% Excluding the Currency Effect

The Board of Directors of Essilor International met yesterday to approve the financial statements for the six months ended June 30, 2016. The auditors have performed a limited review of the consolidated financial statements.

Commenting on these results, Hubert Sagnières, Chairman and Chief Executive Officer of Essilor, said: “In a structurally expanding optical industry, Essilor is confirming its objective of increasing organic growth to more than 6% by 2018. In first-half 2016, our strategy once again successfully drove gains in the Lenses & Optical Instruments division and strong acquisitions-led growth. The performance of the Sunglasses & Readers division was hit by very unfavorable weather conditions in the second quarter. In the second half, we will continue to deploy a wide array of growth initiatives in prescription lenses, Sunwear, online retailing and the fast-growing countries. We are confident in our ability to fully capitalize on the many growth opportunities that are arising.”

First-half operating highlights
Consolidated revenue amounted to €3,583 million in the first six months of 2016, an increase of 8.1% at constant exchange rates and 4.1% like-for-like. Contribution margin1 amounted to 18.9% of revenue, while earnings per share increased by 6.4% and free cash flow2 advanced 9.3%.
Highlights of the first-half also included:

• A further acceleration at the Lenses and Optical Instruments division, with like-for-like growth of 5%, versus 4.7% in first-half 2015, that reflected:
  • – A steep increase in business in the fast-growing countries.
  • – Better-than-expected growth in Europe.
  • – A sluggish performance in North America, primarily due to the decrease in Transitions Optical sales to other lens manufacturers.
• A 3.9% decline at the Sunglasses & Readers division caused by:
  • – Unfavorable weather conditions during the sunwear season.
  • – A slower-than-expected recovery in sales at Xiamen Yarui Optical (Bolon™).
• A return to growth at the Equipment division.
• A positive contribution by online sales to consolidated growth.
• A robust acquisitions and partnerships dynamic, which added 4.0% to reported growth.
• A high contribution from operations, reflecting firm cost discipline.

Outlook
Essilor expects the Sunglasses & Readers division to deliver an improved performance in the second half, and the lenses and online retailing operations will continue to deploy a wide range of growth initiatives during the period. Nevertheless, it prefers to conservatively factor the impact of a poor sunwear season into its full-year like-for-like growth objective, and calls for an increase in revenue in excess of 8% at constant exchange rates, including like-for-like growth of around 4.5%. Essilor also confirms the target for contribution from operations1 excluding any new major acquisitions of at least 18.8% of revenue for the year. The Company’s structural growth dynamic remains unchanged and we continue to target like-for-like revenue growth of more than 6.0% by 2018.

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