Essilor Posts 7.1 Increase in Year-to-Date Revenue

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CHARENTON-LE-PONT, France— Essilor International (Reuters: ESSI.PA) reported consolidated revenue for the nine months ended Sept. 30, 2013 totaling €3,813.0 million compared with €3,759.1 million in the year-earlier period. Revenue growth, reflecting like-for-like plus bolt-on acquisitions, rose 7.1 percent.

“The third quarter saw a number of initiatives that will shape the company’s future,” commented Hubert Sagnieres, chairman and CEO of Essilor International. “First, Essilor signed a major agreement to acquire Transitions Optical, the world leader in photochromic lenses. Second, we made significant advances in sun lenses. The 7.1 percent revenue growth, excluding the currency effect, reflected a very dynamic acquisitions policy and more robust demand, driven in particular by the first steps of innovation in the mid-range segment.

“Essilor is actively positioning itself to benefit, in 2014, from growth in the optics market, where global demand for improved visual health remains largely unfulfilled.”

In the third quarter, Essilor International’s consolidated revenue totaled €1,237.3 million, a 0.7 percent increase. This reflected like-for-like growth of 3.1 percent, which Essilor attributed “a very good performance in equipment and an improvement in lenses and optical instruments compared with the first half, both in developed countries and fast-growing markets.”

In particular, Essilor said it benefited from the introduction of mid-range products such as Intuitiv, the first progressive lens adapted for both left- and right-handed wearers. Other factors influencing Essilor’s third quarter performance included a 4 percent impact from changes in the scope of consolidation resulting from the large number of partnership agreements recently signed in fast-growing markets and North America, and a negative 6.4 percent currency effect caused by the sharp depreciation of numerous currencies against the euro, including the U.S. dollar.

In North America, third quarter revenue from lenses and optical instruments totaled €439.5, down 2.2 percent from year-ago but up 0.6 percent like-for-like. Essilor said it experienced good trends for polarized lenses, sales to independent laboratories and contact lens distribution. However, the company’s performance with optical chains was impacted by the loss of two contracts in the first half, though it declined to name the chains.

Essilor said its previously announced agreement to acquire PPG Industries’ 51 percent stake in Transitions Optical, resulting in 100 ownership of the photochromic lens maker, and its agreement to acquire 100 percent of Intercast, a premium sun lens manufacturer based in Parma, Italy, are on track to become finalized in first half, 2014. Based on current estimates, the transaction should have a positive impact on Essilor’s financial indicators, Essilor said. In particular, the acquisitions are expected to be accretive from year one and will add at least 5 percent to earnings per share in subsequent years, according to the company.