CHARENTON-LE-PONT, France, July 17 /PRNewswire-FirstCall/ --
- First-Half 2008 Revenue Up
- 5.4% Like-for-Like
- 9.6% at Constant Exchange Rates Essilor International, the world leader in ophthalmic optics, today announced consolidated revenue of EUR1,520.3 million for the six months ended June 30, 2008, representing a reported 2.9% increase on first half 2007.
Like-for-like growth was 5.4%, in line with trend rates, while growth excluding the currency effect was maintained at a strong 9.6%, lifted by the Company's sustained acquisitions drive (4.2%). This robust performance in a challenging economic environment demonstrates the solid strength of the Company's growth model, built around innovation and acquisitions-led expansion.
As a result, Essilor confirms that the first half will see a further
increase in earnings, with operating margin held firm at 2007 levels.
Consolidated revenue for the first six months of 2008
EUR millions First half 2008 First half % change % change
2007 (reported)* (like-for-
Total 1,520.3 1,476.9 + 2.9% + 5.4%
Europe 697.2 675.7 + 3.2% + 2.7%
North America 625.4 622.4 + 0.5% + 7.0%
Asia-Pacific 137.1 128.6 + 6.6% + 6.9%
Latin America 60.6 50.1 + 21.0% + 17.6%
(*) Changes in scope of consolidation added 4.2%; the currency
effect was a negative 6.6%.
First-half like-for-like growth reflected a gain of 6.2% in the first quarter, followed by 4.6%(1) in the second. Note that the year-earlier basis of comparison was high, with like-for-like growth of 8.4% in the first-half and of 8.9% in the second quarter alone.
Of the 4.2% in growth from changes in the scope of consolidation, 2.9% came from acquisitions made in 2007, led by OOGP, KBco and ILT. Consolidation of companies acquired since the beginning of 2008 (except Satisloh) added 1.3 point of external growth.
As in the first quarter, the currency effect, which totalled a negative 6.6% over the half, was primarily due to the fall in the US dollar against the euro (down 13.7% over the period) and to a lesser extent to the decline in the British pound (down 13.4% against the euro). The 3.2% slide in the Canadian dollar and the sharp 18.7% drop in the Korean won, both against the euro, also weighed on reported revenue for the half.
Revenue by region
In Europe, growth was dampened both by an unfavorable comparison with first-half 2007, when revenue rose 8.4% on the launch of Varilux Physio(R) and Anateo(R), and by the generally weaker economy. A strong performance in Germany and the Netherlands contrasted with slower growth in the United Kingdom, Spain and Italy, while positions were maintained in France.
In the United States, the slowdown at certain optical chains was offset by robust growth at independent eyecare professionals, among whom the Company continued to widen its market share. This enabled Essilor of America to report 7.4% like-for-like growth for the half. Business was also satisfactory in Canada.
Performance varied by country in the Asia-Pacific region, with growth remaining very strong in the ASEAN countries, India and South Korea, but slowing in China in the second quarter. After a particularly difficult beginning of the year, business in Australia and New Zealand is starting to recover, especially in the independent eyecare professionals segment. In Japan, Essilor is continuing to gain market share from the competition in a flat market.
All of the country organizations in Latin America reported excellent results for the period, despite the very high prior-year comparatives. Operations in Argentina and Mexico were especially dynamic, with growth of around 30%.
Highlights of the quarter - Acquisitions
In June, Essilor announced the acquisition upon fulfillment of certain conditions precedent of Satisloh, the world's leading supplier of prescription laboratory equipment (EUR161 million in revenue in 2007). The purchase has not slowed the Company's strong external growth dynamic, led by a steady stream of small, geographically targeted acquisitions. Indeed, Essilor has recently carried out five such transactions in Europe, the United States and Asia.
In Germany, a majority interest has been acquired in Nika GmbH, a lens wholesaler that is the country's exclusive distributor of Nikon products. Based in Winningen (Rhineland-Palatinate), the company has revenues of roughly EUR9 million. Its purchase is designed to strengthen the close fit between Essilor's German distributor networks.
In the United States, the prescription laboratory network has been further strengthened by Essilor of America's acquisition of majority stakes in Deschutes (based in Oregon and Idaho, with revenues of $2.7 million) and Optimatrix (based in Alabama, with revenues of $4.6 million).
In Malaysia, Essilor has acquired the country's leading independent
laboratory Frame N' Lenses. With revenues of EUR2 million and a local
market share of 5%, the new subsidiary will improve the Company's control
over the local distribution of its entry-level products. In India, Essilor
has acquired the assets of Sankar & Co's ophthalmic division, comprising
five formerly franchised laboratories in the Coimbatore region, which
together generate EUR0.9 million in revenues. In particular, the new unit
will develop a Crizal(R) anti-reflective lens center.
Appendix : Second quarter revenue
EUR millions Q2-2008 Q2-2007 % change % change Q1-2008
Total 758.1 741.2 + 2.3% + 4.6% 762.2
Europe 350.8 341.2 + 2.8% + 1.8% 346.4
North America 307.2 310.7 - 1.1% + 5.7% 318.3
Asia-Pacific 67.9 63.3 + 7.3% + 7.3% 69.2
Latin America 32.3 26.0 + 24.1% + 21.0% 28.3
(*) Changes in scope of consolidation added 4.4%; the currency
effect was a negative 6.7%.
A conference call in French will be held today at 9:00 a.m., CEST.
The number to dial is: +33(0)1-70-99-43-04
The conference will be available for later listening at:
A conference call in English will follow at 10:00 a.m., CEST.
The number to dial is: +44(0)20-78-06-19-68
The conference will be available for later listening at:
Next financial announcement:
First-half earnings will be released on August 28, 2008.
Essilor International is the world leader in ophthalmic optical
products, offering a wide range of lenses under the flagship Varilux(R),
Crizal(R), Essilor(R) and Definity(R) brands to correct myopia, hyperopia,
presbyopia and astigmatism. Essilor operates worldwide through 15
production sites, 270 lens finishing laboratories and local distribution
networks. The Essilor share trades on the Euronext Paris market and is
included in the CAC 40 index. (ISIN: FR 0000121667; Reuters: ESSI.PA;
(1) Second-quarter growth is presented in more detail in the appendix,
Investor Relations and Financial Communications
Veronique Gillet - Sebastien Leroy
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