Essilor Posts Solid 2017 Earnings and Strong Q4

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CHARENTON-LE-PONT, France—Essilor International (Euronext Paris: EI) reported solid earnings for 2017 and a strong fourth quarter for the year ended Dec. 31, 2017. The lens maker generated €7,490 million in revenue for 2017, an increase of 6.7 percent, excluding currency effects. On a like-for-like basis, sales increased by 3.1 percent. Essilor said contribution from operations, which does not include the cost of sales and operating expenses, is expected at a minimum of 18.3 percent of revenue versus a reported figure of 18.2 percent in 2017, and down from 18.6 percent in 2016. Operating profit was €1,248 million, a 1.5 percent increase over year ago.

“Essilor continued its mission to improve vision across the globe in 2017, and delivered another year of earnings growth,” observed Hubert Sagnieres, Essilor chairman and CEO. “Our ambition to eradicate poor vision drives a development strategy that is supported more than ever by our powerful innovation capacity, our acquisition model and the quality of our governance, in which an increasing number of group employees are involved. The momentum created by the rollout of new products, notably in the fourth quarter, together with the numerous transformative initiatives undertaken in 2017, allow us to look ahead to 2018 with confidence.

“Once completed, the combination with Luxottica will open a new chapter for us, allowing us to grow in a way that benefits consumers and the optical industry,” Sagnieres said.

Essilor cited several highlights of its 2017 fiscal year, including a sharp acceleration in fourth quarter like-for-like revenue growth at 5.1 percent, good overall performance of its Lenses and Optical Instruments division, primarily reflecting accelerated growth in the U.S. in the second half and strong online sales. Other factors that boosted revenue in 2017 included global rollouts of the Varilux X series progressive lens, the new Crizal Sapphire 360° anti-reflective lens and the Eye Protect System lens, growth in its Sunglasses & Readers division, particularly in the U.S. and robust growth in its equipment division.

The completion of nine partnerships or acquisitions represented combined full-year revenue of close to €87 million. Essilor said significant free cash flow generation at €925 million that allowed it to make significant progress in reducing its net debt.

The Lenses & Optical Instruments division delivered like-for-like growth of 3.4 percent in 2017 for total sales of €6,498 million. Like-for-like growth was 4.1 percent in North America, an improvement over prior year levels.

In the fourth quarter, Essilor reported that revenue rose 7.1 percent to €1,829 million excluding currency effects, with like-for-like accelerating from the third quarter, to 5.1 percent. Sales increased on like-for-like basis by 5.2 percent for the company’s Lenses and Optical Instruments business, 3.1 percent for its Sunglasses & Readers business, and 9.0 percent for its Equipment business.