Essilor Posts Strong First Quarter Results

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CHARENTON-LE-POINT, France— Essilor International (Reuters: ESSI.PA) reported that revenue for the three months ended March 31, 2014 climbed to €1.32 billion, an 8.4 percent increase over year ago, excluding the current effect. Like-for-like growth in the first quarter was 2.4 percent. The increases were propelled by a rebound in its lenses and optical instruments division, Essilor said.

“With 8.4 percent growth in revenue excluding the currency effect, Essilor delivered one of its best quarterly performances of the past three years, in a more favorable global environment,” commented Hubert Sagnieres, Essilor’s chairman and CEO. “It reflected the vitality of our value creation strategy built on product innovation, consumer marketing, the development of a high-quality sunwear range and the deployment of our unique partnership model.

“Since April 1, 2014, Essilor has also strengthened its business base with the acquisitions of Transitions Optical and Coastal.com, the world leaders in photochromic lenses and online vision care retail. Our teams are determined to capitalize on these promising trends and these new competitive advantages to strengthen the company’s momentum in the coming quarters.”

Essilor said the 2.4 percent like-for-like increase in revenue was led by the rebound in its lenses and optical instruments division. Despite the impact of the loss of a major contract in Europe in 2013 and unfavorable weather conditions in North America, the division reported a 3 percent like-for-like gain, its best performance since fourth-quarter 2012.

Growth was driven by a number of factors, including popular new products such as the Crizal Prevencia lens, the new Transitions Signature photochromic lens and the Xperio range of polarized lenses, according to Essilor. Other growth factors cited by Essilor were a powerful dynamic in fast-growing markets, such as Brazil, China and India, and a recovery in their export business; an upturn in demand in most developed markets, especially the U.S., and a solid performance by its progressive lens product line, especially products made using digital surfacing technology.

The other divisions were adversely impacted by a number of expected one-time events, such as the weak backlog in the equipment division early in the year and the unfavorable inventory situation in the readers division.

Newly acquired companies increased reported revenue for the period by 6 percent, led by a major contribution from Costa Inc. in the U.S. and Xiamen Yarui in China, two sunglass distributors that are leaders in their respective market segments.

In North America, Essilor reported that its growth rebounded sharply, rising 2.7 percent like-for-like. In the U.S., revenue was lifted by growing demand for the company’s progressive lenses made using digital surfacing technology, the positive impact of managed vision care networks on the laboratory business and the successful sales of new products. Crizal anti-reflective lenses returned to sustained growth, the Varilux S series progressive lens enjoyed faster momentum and the new Transitions Signature photochromic lens launched early in the year got off to a promising start. The polarizing lens segment was also very dynamic, led by strong growth of the Xperio range, Essilor said.