Essilor CEO Sagnieres Outlines Growth Plans for Transitions Optical

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Essilor chairman and CEO Hubert Sagnieres.
CHARENTON-LE-PONT, France—Following Monday’s announcement that Essilor International has agreed to buy PPG Industries’ 51 percent share of Transitions Optical as well as acquire Intercast for $1.73 billion, Essilor chairman and CEO Hubert Sagnieres and other senior executives offered a strategic assessment of the fast growing photochromic and sun lens categories and outlined plans to grow the market.

On a conference call Monday with financial analysts, Sagnieres said the photochromic segment is growing at 7 percent annually, “about twice as fast as the whole optical market.” He noted that although worldwide penetration of photochromic lenses is 10 percent, there is significant growth opportunity on an international level, in part due to “strong regional differences.” For example, South Africa has 27 percent photochromic penetration while Japan has only 1 percent penetration, he said.

“We plan to develop much higher growth in underdeveloped markets like Europe, Latin America and Asia where the demand is strong for photochromic lenses in the high end and midrange,” said Sagnieres.

Sagnieres said photochromic lenses meet an essential vision need, which he referred to as “brightness management.” He cited new market research that indicates there is significant growth potential to sell photochromics to existing wearers as well as to myopes, hyperopes, presbyopes and those who own multiple pairs of eyeglasses.

Essilor will follow Transitions’ “open business model,” and will continue to offer Transitions lenses to all lens manufacturers, including its competitors, Sagnieres said. He allowed that some manufacturers might stop buying Transitions products once Essilor takes control of the company, but maintained that Transitions’ business is robust enough to sustain any possible losses that might result. “We’ve built that into the business model,” he said.

Essilor accounts for 62 percent of Transitions’ total sales, according to Sagnieres. He noted that the company is currently promoting two new Transitions products: Transitions Vantage, a photochromic polarized lens, and Transitions Signature, a seventh-generation photochromic lens that was recently launched in Europe and will be rolled out worldwide in 2014.

Sagnieres said Bertrand Roy, Essilor’s senior vice president of strategic partnerships, will take charge of Transitions Optical once the acquisition is finalized pending regulatory approvals, which he predicted would occur during first quarter 2014. A longtime Essilor executive, Roy has served as an advisor to Transitions Optical since the company was founded in 1990.

The Transitions Optical management team, headed by president Dave Cole, will remain in place, according to Sagnieres.