Essilorluxottica Sa · EURONEXT:EL
Essilorluxottica Sa — H1 2019 Earnings Presentation
20 slides from Essilorluxottica Sa's earnings presentation, Jul 31, 2019
Slide 1: EssilorLuxottica 1H 2019 Results
ESSILORLUXOTTICA 1H 2019 RESULTS July 31, 2019 1H 2019 Results 1
Slide 2: Major Progress and Achievements in 1H
MAJOR PROGRESS AND ACHIEVEMENTS IN 1H • Revenue up 7.3% in the first half, +3.9% at constant exchange rates with some acceleration in 2Q (+4.1%) • Adjusted operating profit at 17.2% of revenue • Key business highlights – Robust lens business performance, led by China, Brazil and Europe – Sharp rebou
Slide 3: Robust Financials
ROBUST FINANCIALS 1H 2019 REVENUE AT CONSTANT EXCHANGE RATES +3.9% ADJ. OPERATING PROFIT 17.2% of revenue ADJ. NET PROFIT €1,099m, +6.8% FREE CASH FLOW €748m 1H 2019 Results 3
Slide 4: 1H 2019 Results
1H 2019 RESULTS 1H 2019 Results 4
Slide 5: Sustained Momentum in Essilor's Lenses and in Luxottica's Retail
SUSTAINED MOMENTUM IN ESSILOR’S LENSES AND IN LUXOTTICA’S RETAIL 1H 2018 Change at constant Currency Change € millions 1H 2019 pro forma exchange rates effect (reported) Lenses & Optical Instruments 3,377 3,136 4.9% 2.8% 7.7% Sunglasses & Readers 456 407 8.4% 3.5% 11.9% Equipment 99 93 1.3% 4.4% 5.8
Slide 6: EssilorLuxottica Revenue Up 3.9% at Constant Exchange Rates
ESSILORLUXOTTICA REVENUE UP 3.9% AT CONSTANT EXCHANGE RATES Change at constant Currency Change € millions 1H 2019 1H 2018 exchange rates effect (reported) North America 4,583 4,211 +1.9% +6.9% +8.8% Europe 2,231 2,151 +4.7% -1.0% +3.8% Asia, Oceania and Africa 1,436 1,336 +5.8% +1.6% +7.4% Latin Ame
Slide 7: North America: Up 1.9% at Constant Exchange Rates
NORTH AMERICA: UP 1.9% AT CONSTANT EXCHANGE RATES • Essilor – Expansion of Essilor Expert program to ~4,800 ECPs – E-commerce growing in the mid-teens, driven by the Eyeglasses segment – Costa growth boosted by optical frames – Launch of Transitions Signature Gen 8 in July • Luxottica ‒ Wholesale ba
Slide 8: Europe: Up 4.7% at Constant Exchange Rates
EUROPE: UP 4.7% AT CONSTANT EXCHANGE RATES • Essilor – Robust lens category development in France, Turkey, Russia and Eastern Europe – Strong 2Q and order book in the instrument business (Visioffice X, Vision R 800) – Roll out of a new business model in Germany • Luxottica ‒ Wholesale steadily growi
Slide 9: Asia, Oceania, Africa: Up 5.8% at Constant Exchange Rates
ASIA, OCEANIA, AFRICA: UP 5.8% AT CONSTANT EXCHANGE RATES • Essilor – Robust momentum in China in all business lines – Rapid growth of Bolon optical frames segment – Southeast Asia and Korea driven by lens category development – Good dynamic with Independant ECPs in Australia • Luxottica ‒ Sound gro
Slide 10: Latin America: Up 12.3% at Constant Exchange Rates
LATIN AMERICA: UP 12.3% AT CONSTANT EXCHANGE RATES • Essilor – Robust growth in Brazil, driven by Varilux and regional chains – Central America retail banners performing well – Key supply contract with a leading optical chain in Mexico • Luxottica ‒ Brazil growing double digit, boosted by both whole
Slide 11: EssilorLuxottica Adjusted Income Statement
ESSILORLUXOTTICA ADJUSTED INCOME STATEMENT Change at € millions 1H 2019 1H 2018 pro forma Change constant FX Revenue 8,776 8,177 +7.3% +3.9% Cost of sales (3,277) (2,982) +8.2% +5.3% Gross profit 5,549 5,195 +6.8% +3.1% Margin % 63.2% 63.5% Total operating expenses (4,037) (3,744) +7.8% +4.5% OPERAT
Slide 12: Free Cash Flow at €748 Million
FREE CASH FLOW AT €748 MILLION Change in WCR • Net financial debt: 436 €4,728 million Net cash flow from operations 438 Capital expenditure (before change in WCR) • Strong Investment grade 1,925 303 Cash payments for lease liabilities rating: – Moody’s: A2 (Stable) 748m Dividends – S&P’s: A (Stable)
Slide 13: GrandVision
GRANDVISION 1H 2019 Results 13
Slide 14: Transaction Rationale
TRANSACTION RATIONALE • EssilorLuxottica + GrandVision = a major step on the strategic journey • Shared vision and common ground on strategy at the top of EssilorLuxottica: transform consumer experience while continuing to operate an open model • Further developing distribution capabilities, direct-
Slide 15: GrandVision – A Global Leader in Optical Retail
GRANDVISION – A GLOBAL LEADER IN OPTICAL RETAIL 2013 2018 Revenue Revenue 2018 adjusted Ebitda 37,000+ employees €3.7bn €576m in €3.7bn 2018 15.5% of Revenue 40+ countries Revenue across €3.7bn €2.6bn 2018 Free Cash Flow 4 continents 88% €238m Europe(1) 7,000+ stores leading retail global market 700
Slide 16: Complementary Businesses with High Quality Banners in All Regions
COMPLEMENTARY BUSINESSES WITH HIGH QUALITY BANNERS IN ALL REGIONS Brick-and-Mortar-Focused Retail Monobrand stores Online-Focused 1H 2019 Results 16
Slide 17: More Balanced Group Profile Across Channels and Regions
MORE BALANCED GROUP PROFILE ACROSS CHANNELS AND REGIONS Revenue €16.2bn €3.7bn €19.9bn(1) +23% Retail share of revenue 35% 99% 47% Number of retail stores 10k+ 7k+ ~18k ~+70% Stores in Europe as a % of total ~10% 75% 35% group stores Note: based on FY 2018 data. (1) Excluding Grandvision proforma co
Slide 18: Transaction Summary
TRANSACTION SUMMARY Transaction structure – Agreement to acquire HAL’s 76.72% interest in GrandVision – Cash purchase price of €28 per share(1), equivalent to approx. €5.5bn for HAL stake – 33% premium to the unaffected share price of GrandVision on July 16th, 2019 of €21.04 – Upon completion, manda
Slide 19: Integration Update and 2019 Outlook
INTEGRATION UPDATE AND 2019 OUTLOOK 1H 2019 Results 19
Slide 20: 2019 Outlook Confirmed
2019 OUTLOOK CONFIRMED INCLUDING SYNERGIES, AT CONSTANT EXCHANGE RATES SALES GROWTH +3.5-5% ADJUSTED OPERATING PROFIT 0.8-1.2x sales ADJUSTED NET PROFIT 1-1.5x sales 1H 2019 Results 20