EssilorLuxottica sees “solid” growth in 2018
Recently formed eyewear giant EssilorLuxottica reported 2018 earnings this week that demonstrated “solid growth, sound profitability and cash flow”. However, despite the fact that these earnings met expectations, the company’s share price was sent down by around 5% in the aftermath. The reason? After an 18-month wait for the merger, a frustrating lack of synergy details that some analysts are blaming on a power-sharing management structure.
Despite posting robust results, EssilorLuxottica’s share price declined this week
Source: Yahoo Finance
For the full year, EssilorLuxottica said that revenue rose by 3.2% at constant exchange rates on a year on year basis. Adjusted net profit came in at 11.6% of revenue, and combined free cash flow hit 1.8 billion euros.
Leonardo Del Vecchio, one of EssilorLuxottica’s two executive chairmen, said: “We are proud to present strong Luxottica and Essilor combined results. The contribution of Luxottica is significant: net sales, profitability and free cash flow all show positive growth, excluding the exchange rate effect. From a qualitative standpoint, its simplicity, entrepreneurial spirit and speed of execution continued to pay off. Today, Luxottica is well organized and energized for its future as part of EssilorLuxottica. We come to the integration process in the best possible way, bringing with us the most beloved brands, excellent operations capabilities and a digitized business inside and out. Our legacy will continue to grow in this way for years to come. Once we are fully integrated with Essilor and our synergies have taken effect, together we will redefine a revolutionary service model for the benefit of wholesale partners and consumers everywhere.”
The other, Hubert Sagnieres, added: “Since EssilorLuxottica was formed on October 1, 2018, it has fully embraced its mission to help people see more, be more and live life to its fullest. To reach this powerful goal, the Group can rely on an outstanding performance from Essilor, which delivered strong business growth at all its divisions in 2018 and surpassed its growth targets for the year while continuing to work on numerous innovations that will benefit the entire ophthalmic optics and eyewear industries. These achievements reflect the vibrant culture of entrepreneurship within Essilor and the creativity of its employees, whose interests are fully aligned with those of shareholders thanks to employee share ownership at every level of the company. This powerful value creation model will facilitate the generation of synergies going forward and will be rolled out across the entire EssilorLuxottica Group.”
Dominion holds EssilorLuxottica in its Global Trends Luxury Fund.
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