Essilor Said Visual Health, Sunlenses and Fast-Growing Markets Drove Growth in 2013


CHARENTON-LE-PONT, France—Along with Essilor International’s (Paris:EI) announcement yesterday that it has entered into a binding agreement to acquire all of the outstanding common stock of Coastal Contacts (Nasdaq:COA) for CAD $430 million, the lens maker released consolidated financial results for 2013.

Essilor confirmed a 1.5 percent revenue increase over 2012 to €5,065 million. The company said that in 2013, at a time of unfavorable exchange rate movements, its revenue increased by 5.4 percent like-for-like including bolt-on acquisitions, while the contribution margin rose to 18.1 percent of revenue, up 2.6 percent from year ago level. Highlights of the year included a further improvement in the company’s share of the worldwide lens market, to 37 percent of units, and a sharp increase in the contribution from fast-growing countries, which accounted for 21 percent of consolidated revenue for the year.

“In 2013, Essilor consolidated its positions after two years of strong growth,” commented Hubert Sagnieres, Essilor’s chairman and CEO. “The company improved every indicator and laid extensive groundwork in such future-shaping areas as visual health, the sunlens strategy and brand development, while further expanding in fast-growing countries. These initiatives have strengthened our confidence in the future and will help to drive faster organic growth in the years ahead.”

Essilor noted that growth in 2013 revenue reflected a 2.1 percent like-for-like increase in revenue over the year, demonstrating an improvement in sales between the first half (up 1.2 percent) and the second (up 3.0 percent); a 3.3 percent impact from changes in scope of consolidation, led by the growing quarter-by-quarter contribution from the acquisitions strategy; a 3.9 percent negative currency effect attributable to the rise in the euro against most of the other billing currencies.

Essilor said it ramped-up its sunlens business by combining Essilor and FGX International’s expertise in prescription sunwear, polarization, UV protection and distribution with the positions and brands of the companies acquired in 2013 (Polycore, Xiamen Yarui Optical/Bolon and Suntech Optics) and early 2014 (Costa) in the mid-range and performance sunlens segments.

In addition, Essilor is continuing to accelerate its acquisition strategy, citing its pending acquisition of Transitions Optical for $1.8 billion, and the signature of 28 partnership agreements representing full-year revenue of €254 million. In the U.S., Essilor said it has acquired a majority stake in the Arkansas-based prescription laboratory Plunkett Optical, which generates annual revenue of $3.3 million.

In 2014, Essilor said it is aiming for 10 percent to 12 percent revenue growth at constant exchange rates and a contribution margin of between 18.2 percent and 18.6 percent (excluding new strategic acquisitions) depending on the effective date of consolidation of Transitions Optical and final IFRS adjustment.