CHARENTON-LE-PONT, France—EssilorLuxottica (Reuters: ESLX.PA) turned in a solid financial performance for the first half of 2021, buoyed by the U.S. market, which generated more than half of the Group’s revenue. Business acceleration in France, Italy, the U.K., Mainland China, Australia and Brazil, particularly during the second quarter, marked EssilorLuxottica’s return to the pre-pandemic levels of 2019, the company said. Revenue for the Group during the first half of 2021, ending June 30, totaled €8,768 million, a 5.7 percent increase over first half 2019 at constant exchange rates.

Operating profit rose to €1,271 million, compared with a loss of €378 million in the year ago period and an increase of 35.1 percent versus 2019 at constant exchange rates.Adjusted operating profit margin was 18.5 percent, up 130 basis points versus 2019. Free cash flow record generation was €1.2 billion.
 
In the second quarter, total revenue amounted to €4,709 million, up 103 percent compared with a year ago and 9.2 percent compared with 2019 at constant exchange rates.
 
“We delivered another strong set of results in the first half, despite the ongoing challenges of the pandemic,” said Francesco Milleri, CEO of EssilorLuxottica and Paul du Saillant, deputy CEO of EssilorLuxottica. “Our continued focus on premium products and brands, a powerful supply chain and a global community of talented and engaged employees helped us get there.
 
"In the second quarter, we wrote some important pages in EssilorLuxottica’s history by clarifying our governance and building one unified company, while continuing to expand our retail footprint in Europe by completing the acquisition of GrandVision" as reported by VMAIL. 
 
EssilorLuxottica’s two channel-based divisions, of Professional Solutions and Direct to Consumer, both experienced accelerated growth during the first half of 2021, based on the company’s new segment reporting. Professional Solutions, which represents the company’s wholesale business, includes the supply of products and services to third-party eyecare professionals. Direct to Consumer, which represents its retail business, includes the sale of products and services directly to end consumers and is comprised of brick-and-mortar stores and e-commerce platforms.
 
In the first half of 2021, revenue from Professional Solutions reached €5,196 million, up 2.7 percent at constant currency rates compared with first half 2019. Direct to Consumer revenue climbed to €3,572 million, up 10.4 percent from the same period in 2019.
 
In the second quarter of 2021, revenue from the Professional Solutions segment reached €2,733 million, up 5.0 percent at constant exchange rates compared with the same period of 2019 (down 1.1 percent at current exchange rates), significantly accelerating versus the first quarter. The performance was supported by dedicated partnership programs as well as progressive reopenings in most of the areas worldwide and improving business conditions across all the main trade channels, according to EssilorLuxottica.
 
North America was the best performing region, up high-single digits boosted by independent ECPs and key accounts. EMEA (Europe MiddleEast Africa) was next turning positive thanks to key markets including France, Italy and the U.K., and Latin America started recovering later in the quarter due to restrictions, in particular in Brazil.
 
Asia-Pacific turned slightly negative, despite sound growth in Mainland China and Australia, due to the aggressive resurgence of COVID-19 in most of the Asian countries. In terms of products, optical outpaced sunglasses, which overall restarted later in the quarter, with North America accelerating.
 
Brands proved to be a key driver, with lenses, including, Crizal, Transitions and EyeZen as well as the blue cut category, frames, with Oakley and main luxury brands as top performers, and the instruments business all contributing.
 
In the second quarter, the Direct to Consumer division’s revenue reached €1,975 million, up 15.7 percent at constant exchange rates compared with the same period of 2019 (up 9.6 percent at current exchange rates), a significant acceleration from the first quarter. The strong performance of the division was driven by the company’s wide range of value-added solutions as well as the return of consumer demand in both optical and sun categories.
 
The quarter ended with over 90 percent of stores open in total, just a touch above three months earlier (with North America and Latin America broadly stable, EMEA reopening and Asia-Pacific reclosing, in particular in Australia and South-East Asia).
 
In brick-and-mortar stores, comparable store sales turned positive close to mid-single digit compared to the second quarter of 2019, supported by a sharp acceleration in North America, largely offsetting the still negative EMEA. The optical and sun categories both contributed to growth, with Sunglass Hut in North America, and Target Optical and LensCrafters as the best performing banners.
 
Direct e-commerce revenue rose by two thirds at constant exchange rates, up to 9 percent of the company’s total turnover, with North America almost doubling the business and all the main platforms growing fast (RayBan.com almost doubling, Oakley.com and EyeBuyDirect.com more than doubling, and SunglassHut.com tripling).

Based on these results, EssilorLuxottica now expects its full year 2021 revenue to grow around mid-single digits versus 2019 at constant exchange rates, assuming that no further COVID-19 related restrictions will be introduced in the second half of the year. The target refers to the EssilorLuxottica perimeter and excludes GrandVision, which will be consolidated from July 1, 2021.