Luxottica achieved positive results in the majority of the geographic
areas in which it operates, with excellent performance in North
America, Australia and all emerging countries. The Italian company said
its Oakley and Ray Ban brands continued to grow at double-digit rates,
propelled in part by strong growth in much of Europe.
In the second quarter ended June 30, the Group's net sales rose by
15.2 percent at current exchange rates (+7.0 percent at constant
exchange rates), increasing from 1,633.5 million Euros ($2,351 mm) to
1,882.2 million Euros ($2,412 mm). During the half-year, revenue grew by
15.1 percent (+9.0 percent current exchange rates2) to 3,670.4 million
Euros ($4,759 mm) compared to 3,189.6 million Euros ($4,476mm) during
the same period in 2011).
“This year, we have arrived at the half-way point very satisfied.
In a very challenging period, we managed to grow our business by 15
percent with respect to last year. Our profitability grew in a more than
proportional manner and once again we generated approximately 180
million Euros of free cash flow,” commented Andrea Guerra, Chief
Executive Officer of Luxottica. “We worked in a determined manner in all
of the geographic areas in which we operate, achieving the objectives
which we had pre-established. A balanced business model and a global
geographic presence are the two pillars which have underpinned
performance through today.
"During these months, we recorded significant growth in the United
States. All of our divisions contributed substantially to these
results," Guerra continued. "The organizational changes we have made
over the years are paying off. In particular, Sunglass Hut once again
increased sales of 11.7 percent on a comparable store sales5 basis.
Sunglasses are a key driver of business growth in the United States for
Luxottica. Despite the fact that the U.S. market is smaller and less
mature as compared to Europe, it keeps growing.
In emerging markets, sales grew 35 percent in the first half of the
year. We are growing our business everywhere and continuing to invest in
order to transform our presence in an increasingly structural manner,
in particular in China, India, Brazil, Mexico and Eastern Europe.
European market dichotomy
In Western Europe, the
macroeconomic climate is different. During the first six months, we
succeeded in delivering positive sales results once again (+1 percent).
Performance can be divided into the following three parts: Continental
Europe very good. France remained positive. Mediterranean Europe
negative.
In Australia, OPSM achieved favorable comparable store sales results
as compared to 2011. We are confident that these half-year results
constitute a solid foundation for reaching our full-year 2012
objectives, although 2012 is clearly harder to predict”.
EBITDA for the second quarter of 2012 rose by 18.1 percent over the
same period in 2011, going from 352.2 million Euros in 2011 to 415.9
million Euros in the current period. Additionally, adjusted EBITDA for
the first half of 2012 reached 761.2 million Euros an increase over the
635.1 million Euros recorded for the same period in 2011.
Operating income for the second quarter of 2012 amounted to 332.6
million Euros (276.8 million Euros during the same period of the
previous year, +20.2 percent). The Group's operating margin grew even
further rising from 16.9 percent in the second quarter of 2011 to 17.7
percent in the current quarter.
During the first sixth months of the year, adjusted operating income
amounted to 590.6 million Euros, up by 22.0 percent as compared to 484.2
million Euros in the same period of 2011. The Group’s adjusted
operating margin3,4 therefore rose from 15.2 percent during this period
in 2011 to 16.1 percent in the first half of 2012.
Net income for the second quarter of 2012 increased to 195.5 million
Euros ($250 mm), up 20.6 percent compared to 162.1 million Euros ($233
mm) a year earlier. That resulted in EPS (earnings per share) of 0.42
Euros (at an average €/US$exchange rate of 1.2814). EPS in US dollars
was 0.54 US$ in the period. Also in the second quarter of 2012, the
strict control of working capital enabled Luxottica to accumulate
significant free cash flow in the amount of 180 million Euros for the
quarter as compared to 154 million Euros of the same period of 2011.
After having paid dividends during the quarter of approximately 227
million Euros, net debt as of June 30, 2012 was 2,164 million Euros
(2,032 million at the end of 2011), with the ratio of net debt /adjusted
EBITDA4 at 1.7, in line with expectations.
Wholesale division
The wholesale division achieved record results. Net sales
registered in the second quarter 2012 are the best in the Group's
history.
In terms of sales performance in Luxottica’s key markets, results in
North America and the emerging markets stand out, and in particular, in
China, India, Brazil, Mexico and Eastern Europe. Very sound results were
also achieved in Continental Europe and in particular in the UK,
Germany and Nordic countries. Performance continued to be positive in
France while it was negative in Italy and Spain.
This significant growth in the wholesale division is primarily due to
the increasingly close relationship with clients and to the excellent
reception of new collections. Our brand portfolio had a fundamental role
in achieving these results: Ray-Ban, Oakley and the premium and luxury
segment continued their double-digit growth trend in percentage.
Net sales for the wholesale division reached 788.2 million Euros from
704.0 million Euros in the second quarter of 2011 (+12.0 percent at
current exchange rates and +8.4 percent at constant exchange rates). On a
half-year basis, net sales were 1,515.0 million Euros, improving by
12.6 percent at current exchange rates (+10.1 percent at constant
exchange rates2) as compared to 1,345.1 million Euros in the first half
of 2011.
Operating income grew to 207.7 million Euros, from 188.5 million in
the second quarter of 2011 and the operating margin was 26.4 percent. In
the first half of 2012, the operating margin was equal to 25.1 percent
(25.0 percent in the corresponding period of last year).
Retail divisionDuring the course of the
second quarter, the growth trend continued in the retail division, in
particular for Sunglass Hut and Oakley in North America and GMO in Latin
America. Net sales for the division equaled 1,094.0 million Euros
(929.6 million Euros in the second quarter of 2011, +17.7 percent at
current exchange rates and +5.9 percent at constant exchange rates2).
For
the first six months of 2012, net sales were 2,155.4 million Euros,
improving by 16.9 percent with respect to 1,844.5 million Euros in the
first half of 2011 (+8.2 percent at constant exchange rates).
The division's operating income went from 129.8 million Euros in the
second quarter of 2011 to 169.5 million Euros in the same period in 2012
and the operating margin accordingly grew to 15.5 percent from 14.0
percent for the period. On a half-yearly basis, the adjusted operating
margin was equal to 13.6 percent (12.3 percent in the first half-year of
2011).
LensCrafters experienced a quarter full of ups and downs. The
implementation of a new IT platform generated a temporary slowdown in
store transactions, which was fully accounted for in the Division’s
forecast for the period. The quarter ended with an increase in
comparable store sales of approximately 1 percent. For the first six
months of 2012, LensCrafters profitability was the best as compared to
recent years.
Sunglass Hut on a tear
Once again, Sunglass Hut performance was exceptional. The Group’s
sun specialty chain that operates in a number of geographic areas posted
overall comparable store sales5 improving by 10.6 percent in the second
quarter, with particularly positive performance in North America,
emerging markets, South Africa and Australia.
In Australia, the plan to develop OPSM and the reorganization of
smaller retail brands have contributed to the division’s positive
results. The quarter ended with growth in total OPSM net sales of 6.3
percent, despite store closings in the region, and comparable same store
sales5 increasing by 8.0 percent in the period.
The Luxottica optical retail business in the region grew in
profitability by 23.6 percent during the second quarter of 2012 as
compared to results generated by this business in the same period of
2011.
(SportsOneSource Media)
