Essilor Boosts First Quarter Revenue 2.1 Percent, Confirms Objectives for 2013

CHARENTON-LE-PONT, France—Essilor International (Reuters: ESSI: PA) announced consolidated revenue of €1,276.3 million for the three months ended March 31, 2013. Compared with first-quarter 2012, this represented an increase of 2.1 percent, excluding the currency effect.

Commenting on the results, Hubert Sagnieres, chairman and CEO, said “The company’s first-quarter performance is in line with our expectations. Growth in the ophthalmic optics market remains driven by demand for improved visual health and Essilor pursues its value-creation strategy based on innovation, partnerships and a highly efficient production base.

“In the coming quarters, we will leverage our networks to accelerate and expand the distribution of value-added products, such as Crizal UV and Varilux S series. New partnerships will also strengthen our positions in fast-growing countries. Despite the economic uncertainties weighing on consumer spending in certain regions of the world, we remain confident that we will achieve our objectives for 2013.”

In a conference call yesterday with financial analysts, Sagnieres said Essilor will introduce several new products in the second half of the year, including a second-generation Optifog lens, and two new pieces of lens processing equipment from its Satisloh division: a high volume, anti-reflective lens coater and a “micro” digital surfacing machine designed for small to medium size labs.

First-quarter revenue was stable on a like-for-like basis, reflecting “several unfavorable effects,” Essilor said:

  • The fewer number of billing days around the world, especially in Europe and Latin America. Overall, the negative impact on revenue growth is estimated at 1.9 percent.
  • A highly unfavorable comparison with first quarter 2012, when the 8.5 percent like-for-like growth was lifted by contributions from several sales contracts in the U.S. and Europe and from exceptional sales volumes in Europe and Asia-Pacific.

  • Unfavorable weather conditions, especially during March in the U.S. and Europe, which impacted optical store traffic and significantly weakened sales of sunglasses.

During the first quarter, Essilor pursued its bolt-on acquisition strategy, aimed at extending local coverage and bringing innovations to market more quickly, with seven new transactions representing €61 million in combined full-year revenue.

Changes in the scope of consolidation increased revenue for the period by 2.1 percent, Essilor said. This included bolt-on acquisitions, which added 1.9 percent, and additional revenue resulting from the change in the method of consolidation for Essilor Korea, which added 0.2 percent.

Essilor reported that first quarter 2013 revenue from lenses and optical instruments totaled €1,149 million in North America, up from €1,139 million in first quarter 2012. The company attributed the rise to ongoing dynamic demand from independent eyecare professionals for value-added products such as Crizal UV, Xperio

In Europe, Essilor posted first quarter revenue of €400 million for lenses and optical instruments, down from €406 million year ago. Although Essilor said it experienced success with Varilux S, it was offset by very challenging market conditions in Southern European countries.

In the Asia-Pacific-Africa region, Essilor generated revenue of €271 million in first quarter from lenses and instruments, up from year ago revenue of €206 million, the result continued strong growth in domestic markets in India and China, the company said.

First quarter revenue from lenses and instruments in Latin America reached €79 million, up from €77 million year ago, partly due to a solid performance in Brazil and Mexico, Essilor said.