Net Sales of Euro 1.8 Billion (+7.4% at Constant Exchange Rates2); Record Free Cash Flow3 of Euro 295 Million
Milan, Italy October 30, 2013
The Board of Directors of Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX),
a leader in the design, manufacture, distribution and sale of fashion,
luxury and sports eyewear, met today and approved the consolidated
results for the third quarter and the nine months ended September 30,
2013 in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (IAS/IFRS).
Operating performance for the third quarter of 2013
During the third quarter of 2013, Luxottica continued the solid
growth recorded in the first six months of the year, both in terms of
sales and profitability measured at constant exchange rates. Both the
Wholesale and Retail Divisions contributed to this growth in all the
geographic regions in which the Group operates and also thanks to an
excellent Summer season in Europe. Group’s performance measured at
current exchange rates was affected by the further weakening of several
currencies against the Euro.
“We are very satisfied with the third quarter’s performance and the
systematic growth we have been pursuing with determination since the
beginning of the year, recording a +7.4% increase in sales at constant
exchange rates2 and increased profitability supported by constant
efficiency gains.” Commented Andrea Guerra, Chief Executive Officer of
Luxottica: “We have further reduced our net debt due to excellent free
cash flow3 of Euro 295 million generated in the quarter.”
“The Wholesale Division grew +13.1% at constant exchange rates2,”
Andrea Guerra remarked. “Europe is in excellent shape with results
exceeding expectations (+15.1%2,6) and with outstanding performances in
Germany, France and the Nordics. Italy continued its positive growth
trend (+7.4%) and Spain is back to growth, recording an increase of
+11.3%. Emerging market countries continue to be a source of enormous
satisfaction, recording sales increases of +19.6%6 at constant exchange
rates2. North America is also a structurally growing market as a result
of an excellent brand portfolio and our efficient organization.”
The Retail Division’s sales performance is in line with that recorded
in the first half of 2013. Sunglass Hut achieved an outstanding
performance at the end of an excellent Summer season in which total
sales increased by +11.1% globally at constant exchange rates2. This
success was achieved by strengthening its leadership position in the
fashion sun segment and through new sales initiatives such as the
opening of the flagship store in New York City’s Times Square.”
“We are satisfied with our results and are determined to continue
along our path of solid growth. We approach the end of 2013 with faith
and optimism, steady consumer demand in the key markets and supported by
the excellent performance of our brands. Luxottica has solid
foundations in its vertically integrated and geographically diversified
business model, and looking forward we will continue to invest in
expanding our distribution network and new sales channels, in ongoing
technological innovation, in our brand portfolio and in the emerging
markets.”
The Group
The Group’s net sales for the third quarter of 2013 reached Euro
1,785 million, in line with the Euro 1,783 million recorded in the third
quarter of 2012 (+7.4% at constant exchange rates2, +0.1% at current
exchange rates). In the first nine months of 2013, net sales reached
Euro 5,667 million, up +3.9% compared to the Euro 5,454 million of the
corresponding period in 2012 (+7.5% at constant exchange rates2).
EBITDA3 for the third quarter of 2013 rose by +2.3% from Euro 339
million in the third quarter of 2012 to Euro 347 million in the same
period of 2013. In the first nine months of 2013, adjusted EBITDA3,5
reached Euro 1,175 million, increasing +7.3% as compared to Euro 1,095
million in the same period of 2012.
Operating income for the third quarter of 2013 was Euro 255 million,
up 3.8% compared to the Euro 246 million in the third quarter of 2012.
The operating margin for the third quarter increased to 14.3% compared
to 13.8% in the third quarter 2012.
In the first nine months of the year adjusted operating income3,5
reached Euro 901 million, up 8.4% compared to Euro 831 million in the
same period of 2012, with an adjusted operating margin3,5 up from 15.2%
in the first nine months of 2012 to 15.9% in the same period of 2013.
Net income for the third quarter of 2013 increased by 7.9% to Euro
148 million, compared to Euro 137 million in the third quarter of 2012
resulting in EPS (earnings per share) of Euro 0.31. EPS in U.S. dollars
was USD 0.41, up 12.5% (at an average EUR/USD exchange rate of 1.3242).
In the first nine months of 2013, adjusted net income3,5 reached Euro
525 million, growing 10.5% compared to Euro 475 million in the same
period of 2012.
In the third quarter of 2013, the Group achieved a new record in
terms of free cash flow3 which reached Euro 295 million. As a result net
debt was further reduced to Euro 1,572 million at September 30, 2013
(Euro 1,662 million at December 31, 2012) with a ratio of net debt to
LTM adjusted EBITDA3,5 of 1.1x.
Wholesale Division
Sales performance for the Wholesale Division included double digit
sales growth at constant exchange rates. Europe enjoyed a particularly
favorable Summer season (+15.1%6 at constant exchange rates2) and
emerging markets continued to record excellent results (+19.6%6 at
constant exchange rates2). Sales in North America rose by +8.8%2,6 in
USD, excluding a drop in Oakley sales in its military business to the
U.S. Army.
In the third quarter of 2013, the Wholesale Division’s net sales were
Euro 686 million, up 6.1% compared to Euro 647 million in the third
quarter of 2012 (+13.1% at constant exchange rates2). In the first nine
months of 2013, net sales were Euro 2,347 million compared to Euro 2,162
million in the corresponding period of 2012, up 8.6% (+12.1% at
constant exchange rates2).
Operating income for the third quarter of 2013 was Euro 134 million,
up 7.1% compared to the Euro 125 million recorded in the third quarter
of 2012, with an operating margin of 19.5% (19.3% in the same period of
the previous year). On a nine-month basis, adjusted operating income3
rose to Euro 5645 million an 11.6%5 increase over the Euro 505 million
in the corresponding period of 2012. The adjusted operating margin3
increased to 24.0%5 from 23.4% in the same nine-month period of 2012.
Retail Division
During the third quarter of 2013, the Retail Division’s comparable
store sales4 grew 2.5% compared to the same period of 2012.
LensCrafters, the largest specialty retailer in the optical segment,
recorded improved profitability despite flat comparable store sales4 on a
year-over-year basis.
Sunglass Hut continued its excellent growth trend, supported by a
stronger penetration of the premium and luxury sun segment, by the
development of new sales channels such as e-commerce and department
store sales, and by its growing presence in the so-called gateways and
megacities.
Comparable store sales4 on a global basis increased by
+7.5%, with breakthrough performances in the United Kingdom, emerging
market countries, and North America which recorded an increase of +6.3%.
In the third quarter of 2013, the Retail Division’s net sales were
Euro 1,099 million compared to Euro 1,137 million in the same period of
2012 (+4.2% at constant exchange rates2, -3.3% at current exchange
rates). In the nine-month period, net sales increased to Euro 3,320
million compared to Euro 3,292 million in the corresponding period of
2012 (+4.5% at constant exchange rates2, +0.8% at current exchange
rates).
The Retail Division’s operating income in the third quarter 2013 was
Euro 165 million compared to Euro 166 million in the third quarter of
2012 (-0.7% at current exchange rates). In the third quarter of 2013,
the operating margin increased to 15.0% from 14.6% in the third quarter
of 2012. In the first nine months of 2013, the Retail Division’s
adjusted operating income3 rose to Euro 477 million from Euro 4615
million in the corresponding period of 2012 (+3.5%5 at current exchange
rates). The adjusted operating margin3 in the first nine months of 2013
was 14.4% (14.0%5 in the same period of 2012).
Results for the third quarter and first nine months of 2013 will be
discussed today in a conference call with the financial community
starting at 6:30 PM CET. The audio portion and related presentation will
be available via live webcast at
http://www.luxottica.com.
Information from the event will also be available on the official Twitter page for Luxottica (@Luxottica).
The officer responsible for preparing the Company’s financial
reports, Enrico Cavatorta, declares, pursuant to Article 154-bis,
Section 2, of the Consolidated Law on Finance, that the accounting
information contained in this press release is consistent with the data
in the supporting documents, books of accounts and other accounting
records.
Luxottica Group – Contacts
Cristina Parenti
/ Group Corporate Communication and Public Relations Director
Tel.: +39 (02) 8633 4683
/ E-mail: cristina.parenti(at)luxottica(dot)com
Alessandra Senici
/ Group Investor Relations Director
Tel.: +39 (02) 8633 4870
/ E-mail: InvestorRelations(at)Luxottica(dot)com
Ana Iris Reece
/ Group Financial and Corporate Press Office Manager
Tel.: +39 (02) 8633 4912
/ E-mail: anairis.reece(at)luxottica(dot)com
Notes on the press release
1 All comparisons, including percentage changes, are between the
three-month and the nine-month periods ended September 30, 2013 and
September 30, 2012. As of January 1, 2013, the Group adopted revised IAS
19 − Employee Benefits. Group information for prior periods has been
restated in compliance with the requirements of the revised standards.
As a result, the Group’s third quarter 2012 operating income and net
income decreased by Euro 3.1 million and Euro 1.9 million, respectively.
In the first nine months of 2012 the Group’s operating income and net
income decreased by Euro 9.0 million and Euro 5.5 million, respectively.
2 Figures given at constant exchange rates have been calculated using
the average exchange rates in effect for the respective comparative
period in the previous year. For further information, please see the
attached tables.
3 EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin,
adjusted operating income, adjusted operating margin, free cash flow,
net debt, ratio of net debt to adjusted EBITDA, adjusted net income and
adjusted EPS are not measures in accordance with IAS/IFRS. For
additional information on non-IAS/IFRS measures, please see the attached
tables.
4 Comparable store sales reflect the change in sales from one period
to another that, for comparison purposes, includes in the calculation
only stores open in the more recent period that also were open during
the comparable prior period, and applies to both periods the average
exchange rate for the prior period and the same geographic area.
5 The adjusted data for the first nine months of 2013 does not
include non-recurring costs relating to the reorganization of Alain
Mikli International amounting to an approximately Euro 9 million
adjustment to operating income (approximately Euro 6 million on an
after-tax basis).
The adjusted data for the first nine months and full year 2012 does
not include non-recurring costs relating to the reorganization of the
Australian retail business amounting to an approximately Euro 22 million
adjustment to operating income and an approximately Euro 15 million
adjustment to net income.
6 Sales performance of the Wholesale Division of Luxottica Group in
the third quarter of 2013 at current exchange rates was approximately
+13.0% in Europe compared to the same period of 2012. Sales performance
of emerging markets at current exchange rates recorded an increase of
7.0%. North America’s sales performance at current exchange rates was
+8.0% in USD excluding Oakley’s drop in military sales to the U.S. Army.
About Luxottica Group S.p.A.
Luxottica Group is a leader in premium, luxury and sports eyewear
with approximately 7,000 optical and sun retail stores in North America,
Asia-Pacific, China, South Africa, Latin America and Europe, and a
strong, well-balanced brand portfolio. Proprietary brands include
Ray-Ban, the world’s most famous sun eyewear brand, Oakley,
Vogue-Eyewear, Persol, Oliver Peoples, Alain Mikli and Arnette, while
licensed brands include Giorgio Armani, Bulgari, Burberry, Chanel,
Coach, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada,
Starck Eyes, Tiffany and Versace. In addition to a global wholesale
network involving 130 different countries, the Group manages leading
retail chains in major markets, including LensCrafters, Pearle Vision
and ILORI in North America, OPSM and Laubman & Pank in Asia-Pacific,
LensCrafters in China, GMO in Latin America and Sunglass Hut worldwide.
The Group's products are designed and manufactured at its six
manufacturing plants in Italy, two wholly owned plants in the People’s
Republic of China, one plant in Brazil and one plant in the United
States devoted to the production of sports eyewear. In 2012, Luxottica
Group posted net sales of more than Euro 7.0 billion. Additional
information on the Group is available at
http://www.luxottica.com.
Safe Harbor Statement
Certain statements in this press release may constitute
“forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Such statements involve risks,
uncertainties and other factors that could cause actual results to
differ materially from those which are anticipated. Such risks and
uncertainties include, but are not limited to, the ability to manage the
effects of the current uncertain international economic outlook, the
ability to successfully acquire and integrate new businesses, the
ability to predict future economic conditions and changes to consumer
preferences, the ability to successfully introduce and market new
products, the ability to maintain an efficient distribution network, the
ability to achieve and manage growth, the ability to negotiate and
maintain favorable license agreements, the availability of correction
alternatives to prescription eyeglasses, fluctuations in exchange rates,
changes in local conditions, the ability to protect intellectual
property, the ability to maintain relations with those hosting our
stores, computer system problems, inventory-related risks, credit and
insurance risks, changes to tax regimes as well as other political,
economic and technological factors and other risks and uncertainties
referred to in Luxottica Group’s filings with the U.S. Securities and
Exchange Commission. These forward-looking statements are made as of the
date hereof, and we do not assume any obligation to update them.
By press release.
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