Luxottica Reports Record Results for 2012, Poised for ‘Continued Investments’ in 2013
Luxottica Group (NYSE: LUX) reported the highest net sales results recorded in the group's history for the year ended Dec. 21, 2012, with total net sales for the 12 months exceeding €7 billion, a 13.9 percent increase at current exchange rates, up 7.5 percent at constant exchange rates, compared with the previous year’s record of €6,022 million.
Adjusted net income for the year amounted to €567 million, up 24.4 percent from €456 million for 2011. In the fourth quarter of 2012, adjusted net income was €87 million up from €73 million in the fourth quarter of 2011, a gain of 19.3 percent. Adjusted EBITDA for 2012 grew significantly (+19.9 percent compared to 2011) totaling €1,362 million. In the fourth quarter of 2012, adjusted EBITDA showed a 15.8 percent increase from the same period in the prior year to €258 million.
Both its wholesale and retail divisions contributed to the results, with the company citing strong performance in its business in all regions. “Luxottica has once again achieved excellent results, with a strong increase in sales and adjusted operating profit of approximately €1 billion,” commented Andrea Guerra, CEO. “Moreover, we generated positive free cash flow in excess of €700 million, an absolute record, which permitted us to further strengthen our balance sheet.”
Guerra said that during 2012, the company “continued to make investments aimed at expanding Luxottica’s retail business, enriching our portfolio with new brands, increasing our manufacturing capacity and building-out our technology platforms and digital solutions.”
He added, “The start of 2013 has been particularly positive and we are looking with confidence to the coming months. Over the last years, Luxottica has built a cultural and organizational platform that optimizes positive developments in the international markets and in the industry in general. In particular, demographic trends, penetration of the eyewear market specifically in emerging countries and the continued evolution of accessories in the premium segment allow us to look forward to the future with great optimism and determination.”
The company said that sustainable growth in the long term will be fueled by external growth opportunities throughout the eyewear industry, including future acquisitions, while the company will also leverage its unique assets, capitalizing on opportunities including demographic changes in the global population, overall penetration of products in both developed and emerging markets and a shift in demand toward premium and luxury brands, especially in the so-called “gateway and mega cities” and high potential channels such as travel retail and department stores.
Luxottica said it will continue to invest by expanding its specialty store chains internationally in both the optical (LensCrafters and OPSM in particular) and sun segments (Sunglass Hut) in which it is already a leader. Emerging markets were an important contributor to Luxottica’s 2012 full-year results where net sales grew 26 percent at constant exchange rates over 2011 performance in these markets.
In particular, Luxottica is focused on markets in Southeast Asia, specifically in Indonesia and Thailand, where it plans to develop a direct presence.
In issuing its results, Luxottica also said it aims “to create services that add value to the premium purchasing experience, along with developing greater personal attention, in order to meet the needs and expectations of more sophisticated and international consumers.”
Double-digit growth in the premium and luxury segments is projected in 2013. The partnership with Giorgio Armani, which began in 2013, represents another major step in this growth plan, the company said. Also, in 2013, with the acquisition of Alain Mikli, the Group has now set up an Atelier Division, including the Oliver Peoples, Paul Smith, Alain Mikli and Starck Eyes brands.
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