Essilor’s Revenue Rises in First-Half 2014

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CHARENTON-LE-PONT, France— Essilor International (Reuters: ESSI.PA) yesterday posted revenue of €2.78 billion for the six months ended June 30, 2014, up 7.9 percent from €2.58 billion in the first half of 2013.

Essilor adjusted the first-half results, which include the currency effect, to reflect the impact of “various non-recurring items linked primarily to the acquisition of Transitions Optical, Coastal.com, Costa and Xiamen Yarui Optical,” according to Essilor. Excluding the current effect, Essilor’s revenue increased 12.6 percent in the first half of 2014.

Essilor posted like-for-like growth of 3 percent, with an acceleration of 3.5 percent in the second quarter, led by Essilor’s lenses and optical instruments division. The lens maker said the success of products such as Crizal, Varilux S series, Transitions Signature and Xperio lenses contributed significantly to its first-half performance. Other contributing factors included strong sales growth with optical chains and eyecare networks, a “dynamic performance” in North America, a 9.6 percent positive impact from changes in the scope of consolidation, mainly related to the acquisitions of Transitions Optical, Costa and Coastal.com, and the setup of a dedicated organization for the company’s sun business.

"The Group's results reflect major progress in its mission to deliver better visual health to as many people as possible,” commented Hubert Sagnieres, chairman and CEO of Essilor. “Our focus on innovation combined with assertive consumer communication campaigns and a new operational organization have started to pay off with independent eyecare professionals and key accounts. At the same time, the Group has boosted its presence in three fast-growing optical segments—the photochromic lenses, sun and online businesses—while delivering a further improvement in its operating margin."

Essilor’s lenses and optical instruments division posted revenue of €1,259.3 million for the first half of the year, up 3.6 on a like-for-like basis. In North America, revenue from lenses and optical instruments increased 4.1 percent like-for-like. Essilor noted that sales trended strongly among independent eyecare professionals, optical chains and managed care organizations. Online sales also rose sharply, Essilor said.

Revenue for Essilor’s equipment division fell 3.0 percent like-for-like, to €46.4 million. The decrease resulted from the increasing proportion of intra-group sales associated with Essilor’s partnership strategy and by the low external order backlog following the high delivery volumes of late 2013, as well as from reduced sales of coating machines and digital surfacing machines.

Essilor’s sunglasses and readers division posted €151.8 million in revenue, down 1.4 percent like-for-like. In the U.S., FGX International was adversely affected by the difficult market conditions experienced by its mass retail customers, some of which implemented large scale inventory drawdowns.

In the second quarter of 2014, Essilor’s revenue stood at €1,457.5 million, an increase of 12.2 percent as reported and 3.5 percent like-for-like, lifted by 4.2 percent growth in lenses and optical instruments sales. Changes in the scope of consolidation drove a 13.2 percent increase in revenue for the quarter, reflecting the consolidation of Transitions Optical from April 1 and Coastal.com from May 1. The currency effect was a negative 4.5 percent, Essilor said.