MILAN—Characterizing fiscal 2022 as a "year of records" in sales, operating and net profit for the group, senior executives of EssilorLuxottica (Reuters: ESLX.PA) reported yesterday that its year-end sales had reached €24.5 billion in fiscal year 2022, up 13.9 percent vs 2021 in comparable term. The group’s comparable-store sales were up 7.7 percent for the 12-month fiscal period, while ex-GrandVision outperformed with its sales rising 9.3 percent, according to an announcement from the company.

Francesco Milleri, chairman and CEO, and Paul du Saillant, deputy CEO at EssilorLuxottica, commented, “From record sales of  €24.5 billion to groundbreaking product innovations, EssilorLuxottica delivered on the promise of a strong, unified company in 2022. Our late chairman, Leonardo Del Vecchio, would have been proud to see the new heights we reached in every geography and the growing bonds between our people and customers.

"It is with these deep connections in mind that our thoughts today go to our employees and partners in Turkey, and all those impacted by the devastating earthquakes in Turkey and Syria.”
The pair continued, “In 2022, we strengthened our open, collaborative business model, while completing important acquisitions such as Walman in North America and Shamir in Israel  and continuing to invest in quality eyecare and eyewear for the benefit of the entire market. At the same time, we continued to showcase our unique innovation capability, through new sustainable collections and the ongoing deployment of new lens products and categories.

“In the face of ongoing macroeconomic uncertainties, we remained focused on our strategic levers: the vertical integration of our business, the embedding of big data in any corporate decision, our global footprint, and the deployment of our sustainability program Eyes on the Planet. In 2022, we also confirmed our long-term commitment to our mission by launching the largest vision care foundation in the world. All these key factors, combined with our nearly 200,000 talented employees, will enable us to achieve continued growth in the years ahead.”
In terms of group revenue by its two major business segments, revenues for the company’s Professional Solutions segment reached €11,770 million, an increase of 6.3 percent at constant exchange rates compared to FY 2021. Revenue of EssilorLuxottica’s direct-to-consumer businesses rose to €12,724 million, a gain of 8.6 percent at constant exchange rates.

For the fiscal year, revenues in North America grew 4.0 percent at constant exchange rates to €11, 492 million while revenues in EMEA rose 11.3 percent to €8,749 million, in Asia-Pacific by 8.2 percent to €2,842 million and in Latin America revenues rose 13.1 percent to €1,410 million.

Total revenue for the group in the fourth-quarter of 2022 was €6,106 million, a collective 3.9 percent increase at constant exchange rates.

The adjusted operating profit reached €4,115 million in the full year, representing 16.8 percent of revenue, compared to 16.1 percent in pro forma4 FY 2021, a margin expansion of 70 basis points (or 60 basis points at constant exchange rates1), despite the material increase of the labor cost, due to the inflationary pressure on wages globally.

The adjusted group net profit amounted to €2,860 million in the full year, increasing by 15.4 percent at constant exchange rates1 compared to pro forma4 FY 2021, accounting this year for 11.7 percent of revenue.

In remarks to financial analysts after the company’s numbers were released, Milleri, also stated, “We have accelerated our former GrandVision's banners, which rose overall 9 percent in same-store revenue in the full-year, even slightly faster than the rest of the group's retail network. At GrandVision, we have found talents and capabilities in the teams with a good execution in store.

"We believe that we can further improve these banners' performance, thanks to a better assortment, as well as the support from the group central team in store operations, marketing and digital communication. The strategic fit of GrandVision into the EssilorLuxottica platform couldn't be more evident.

Milleri also told analysts, "With regards to product innovation, we move ahead with our lens launch pipeline, rolling out Stellest in myopia management to many new markets globally and launching at Mido, Varilux XR, the new progressive lens generation powered by artificial intelligence. 

"Following the record 15-years renewal with Armani announced in September last year, we also managed to further reach our unique branded frame portfolio, signing new multiyear licensing agreements with the well-known brands such as Brunello Cucinelli, Ferrari and Swarovski. I'm also happy to announce that we have just renewed our long-term partnership with the U.S. leading department store, Target."

Milleri emphasized in his remarks, "We have made progress also with our global supply chain. Capillarity and flexibility are the new guidelines to respond to surging geopolitical instability, supply chain disruption, energy and transportation cost volatility. We are investing in new manufacturing and distribution hubs in Mexico, Poland and Thailand.

"Today, we operate more than 650 production sites globally for lenses, frames, instruments and machinery, fully integrated to maximize the system flexibility and reactivity in moving flows from one to another."

Milleri also cited the company's active stance with M&A, has been extremely active with M&A. "Last year, we acquired Walman, completed the acquisition of Shamir and bought 50 percent of SightGlass Vision in joint venture with CooperCompanies. All these assets bring to EssilorLuxottica additional distinctive capabilities and are expected to materially contribute to its performance. And more is to come soon with bolt-on acquisitions."

Milleri told analysts, "Behind all that, today, we are closely focused on the increasing role of technology in eyecare and eyewear products. We want to play a leading role in this game-changing field, leveraging wearable technology and artificial intelligence in partnership with the biggest tech players. Our increased investment in breakthrough technology like lamination, high tracking and way guide, open multiple new applications and push the boundaries of our business, extending our influence to many other industries."

He also underscored EssilorLuxottica's mission  to eliminate uncorrected poor vision in one generation worldwide, stating, "We want to advocate the right to see as we believe that the good vision is a basic human right. In doing so, we joined forces with governments, the United Nations, the World Health Organization as well as the NGOs partnering with OneSight EssilorLuxottica Foundation."

Focusing on the group's R&D organization, du Saillant emphasized the accomplishments of the group in 2022 and what's to come in 2023. "On the vision care side, we have launched a new state-of-the-art coating range, not only for our own leading brand, Crizal, with the Sapphire HR, but also Shamir, which has now fully joined our family and has released its new Glacier expression coating. The category represents an important asset as it enters in symbiosis with our other lens brands, enriching particularly the value of our single vision offering.

"We are also at the start," du Saillant said, "of an exciting journey to develop a new life-changing category for the benefit of the younger generation, myopia management. In September 2022, we released the result of our three-year clinical trial for Stellest, demonstrating the conclusive evidence that it remains effective in slowing down the myopia progression of children, saving more than one diopter on average over the triennial.

"The rollout is progressing, and sales are growing fast, especially, of course, in countries with a high prevalence of myopia such as Greater China, where we have now doubled the number of new kids wearing Stellest from the prior year.

Du Saillant pointed to the  just-announced newest generation of Varilux: the Varilux XR Series. "People today face an information overload, and for current progressive lens wearers, multitasking, especially in motion, is still an issue. With the power of artificial intelligence, leveraging more than one million real-life data, the new technology addresses this pain point by predicting the visual behavior of the patient and delivering an outstanding volume of vision in terms of precision and fluidity.

"The commercialization is now underway of the product and will start in EMEA in the second quarter, followed by North America, Brazil, Asia Pacific and the rest of Latin America during the remainder of ‘23."

Du Saillant also pointed to the company's growing sustainability efforts in frames, noting the first Ray-Ban Wayfarer sustainable collection and green packaging. 

The  group confirmed its target of mid-single-digit annual revenue growth from 2022 to 2026 at constant exchange rates1 (based on 2021 pro forma4 revenue) and expects to achieve an adjusted operating profit as a percentage of revenue in the range of 19-20 percent at the end of that period.

Due to the structure of the 2021 consolidated statement of profit or loss, which includes GrandVision’s results and the effects resulting from the combination accounting only for the second semester of the year, EssilorLuxottica management said it deemed relevant to comment the Group's performance of the year 2022 versus the pro forma4 information of the year 202. The group’s board met on Feb. 22 to approve the consolidated financial statements for the year ended Dec. 31, 2022. These financial statements were audited by the Statutory Auditors whose audit report is in the process of being issued.

The company ended the year with €1.96 billion in cash and cash equivalents and a net debt of €10.25 billion (including  €3.18 billion lease liabilities) compared to a net debt of €9.70 billion at the end of December 2021.