Essilor: consolidated 2005 sales up 10.0%
Essilor has announced consolidated sales of €2,423.5 million for the year ended December 31, 2005. This represents an increase of 10.0% as reported and 8.5% excluding the currency effect, in line with forecasts.
The Company's major markets generally performed well and demand for its new products remained very strong. As a result, Essilor has confirmed that 2005 will see further growth in both earnings and margins.
Following a relatively slow start, consolidated sales gradually increased during the year to levels more in line with the Company's historic growth trend. The growth was driven by:
- a 5.2% like-for-like increase that accelerated between the first half (4.7%) and the second (5.7%). It reflected an approximately 3% rise in sales volumes and an improvement in the product mix, resulting from a higher percentage of sales from progressive lenses (notably the Varilux line), Transitions photochromic lenses, Crizal Alizé anti-reflective lenses, and lenses made of very high index and polycarbonate materials;
- a positive currency effect of 1.5% for the year. The first quarter's negative currency effect gradually declined, becoming favorable late in the year thanks to the rise of the US and Canadian dollars against the euro and the very good resilience of the Brazilian real;
- a 3.3% contribution from companies acquired in 2004 and 2005 (mainly Midland Optical, 21st Century, National Optronics, Select Optical and Opalite in the United States and LTL and ATR in Italy), which added an aggregate €74 million to consolidated sales.
In 2005, Essilor continued to strengthen its global presence and extend its prescription laboratory network, notably in the United States, Italy, India and Taiwan. Eighteen acquisitions were finalized during the year, including that of The Spectacle Lens Group, Johnson & Johnson's ophthalmic lens business.
Growth was led by North America, the Asia-Pacific region and Latin America, while in Europe performance varied from one country to another:
- a slight increase in sales in Europe. Sales were good in Germany, thanks to the upturn in demand, and in Southern Europe. In Austria, sales were slowed considerably by lower reimbursements for optical equipment beginning on January 1, 2005. In France, where the market was sluggish, Essilor maintained its positions;
- strong demand in North America throughout the year. In the United States, Essilor sales were lifted by a rising market and the prescription laboratory acquisition strategy pursued in recent years. Sales of Varilux progressive lenses and Crizal Alizé anti-reflective lenses were very strong;
- very sharp growth in all emerging countries. Essilor's strongest performance for the year was in Latin America, especially in Brazil and Argentina. In Asia, demand was sustained in every country, including Japan, where the Nikon-Essilor subsidiary gained new market share. Growth was especially strong in China and India, where ophthalmic optics markets are expanding rapidly.
Essilor International recently acquired a 25% stake in Ayudas para la Vision Subnormal (AVS), a company based in Madrid, Spain that manages a vision rehabilitation center for people suffering from macular degeneration related to age, glaucoma or retinopathy. The transaction will enable Essilor and AVS to develop vision rehabilitation services and provide more appropriate solutions for the growing number of people suffering from visual impairment.
In early 2006, Essilor of America, Essilor's US subsidiary, acquired two other prescription laboratories:
- Eye Care Express Lab Inc. of Houston, Texas, with revenues of $3.9 million and 24 employees;
- Accu Rx of Johnston, Rhode Island, with revenues of $5.8 million and 37 employees.
