Luxottica revenues leap ahead

This was how the group headed by Andrea Guerra closed one of the most difficult quarters of the global economy. A scenario that demands a review of the estimated profit per share for the current financial year: an EPS in the range of 1.11 and 1.14 indicated in February is now between 0.96 and 0.98 (with a constant exchange rate of 1.45 dollars). On the other hand, the financial crisis has not prevented CEO Andrea Guerra from announcing a fourth quarter with an increase in gross operating margin compared to the same period last year and the generation of sound cash flow that should be around 360-380 million for the whole of 2008. Sufficient to meet all dues up to 2011 given that «there will be no refinancing of loans in the coming months», the group stated.

In detail, the quarterly figures recorded by Luxottica include EBITDA of 258.6 million (+3.1%), EBIT of 195.1 million (195 million in 2007) and a 7% downturn in net profits to 104.6 million. «The variation is almost entirely due to higher financial burdens compared to last year following the Oakley operation, and the unfavorable exchange rate», they said. Also due to the exchange rate, net indebtedness at September 30 rose to 2,911 million from 2,840 million at end June, with a net indebtedness/EBITDA ratio of 2.8 (2.6 net of the exchange rate effect), even though Luxottica maintained high cash flows of 180 million for the period, which allowed it «to reduce net indebtedness by about 140 million euro and 20 million dollars for the quarter».

Over the nine months, billings rose by 5% to 3.96 billion (+14% at constant exchange rates), EBITDA dropped by 0.2% to 828.6 million and net profits fell by 10.2% to 340.9 million. «It's difficult to give precise expectations in this period because of the sluggish economy and an overall situation of uncertainty», Guerra told Reuters, adding that «after a tough September, October was held captive by seesawing uncertainty, but it wasn't as tough as September». In February, sales were estimated to be about 5.6-5.75 billion, but new figures have not been given for 2008: «Because the conditions have changed, we decided to talk only about profitability and net profits», Guerra commented. Obviously, several months will have to go by before any forecasts for 2009 can be made: «The uncertainty won't last long and as soon as it abates we will be able to take a clearer look at the future of 2009».

There is confidence, however, in the group's ability to cope with what will be remembered as one of the worst economic crises: «We have all the tools for doing what must be done», the CEO underscored and mentioned the group's vertical integration model and, in particular, the ongoing integration process with Oakley in the US. Guerra concluded that for the first time after difficult years, the dollar will have a positive impact at year end: «During the past three years, we responded to a strong negative impact with equal strength. It is obvious that this will be the first quarter in four years with a reverse dollar effect».