Luxottica: net sales for the fourth quarter of 2010 reflect strong growth (+16.4%)
The Board of Directors of Luxottica Group S.p.A. met and reviewed the consolidated net sales and preliminary results for the fourth quarter of 2010 and the full fiscal year.
Luxottica’s results for the fourth quarter of 2010 confirmed the growth trend seen throughout the first nine months of the year, with both Divisions able to make the best use of opportunities that arose. The strength of the Group's brand portfolio remained solid and particularly positive performances were seen in certain geographic areas such as the United States and Asia. More specifically, the intense work carried out by Luxottica in the United States, a key market for the Group, together with the improving confidence of consumers in that market, allowed Luxottica to record excellent results, posting a 9.0% growth for the quarter in U.S. dollars as compared to the same period in 2009.
The Retail Division contributed greatly to this result, benefitting from the initiatives taken in previous quarters and, with a renewed focus on the consumer, recording its best performance over the last four fiscal years. Comparable store sales4 for the fourth quarter were up by 8% as compared to the same period in 2009, thanks to LensCrafters (+5.6%) and especially to the excellent performance of Sunglass Hut (+18.0%), which enjoys a worldwide leadership position as the global sun specialty chain.
The performance of the Wholesale Division was particularly positive in all countries in which the Group operates, with excellent results in North America (+19.7%) and solid growth in emerging markets (+17.5%), thus confirming the success of the Group’s investments and commercial policies. It also continued to perform well in more mature markets, such as Europe (+5.4%), especially in the so-called New Europe.
Overall, the Group’s net sales for the fourth quarter were Euro 1,346.5 million, up 16.4% over the same period of the previous year (+6.5% at constant exchange rates). Thanks to the strong growth enjoyed throughout all quarters of the year, consolidated net sales for fiscal year 2010 reached the unprecedented figure of almost Euro 5.8 billion –– never before seen in the history of Luxottica: Euro 5,798.0 million (+13.8% at current exchange rates, and 7.1% at constant exchange rates2), compared with Euro 5,094.3 million posted for fiscal year 2009.
“2010 was a year of discontinuities,” Andrea Guerra, Chief Executive Officer of Luxottica, declared. “The new world in which we find ourselves operating has shown us that success is possible through innovation, investment, determination, simplicity and speed. “Throughout the year, Luxottica posted increasingly improving results, both in terms of net sales and profitability. The cornerstones of our business model once again proved to be particularly solid and both Divisions have thus successfully achieved excellent results. “Worthy of mention are: the performances of two extraordinary brands –- Ray-Ban and Oakley; the continuing recovery of the premium and luxury brands in our portfolio, which include prestigious brands such as Chanel, Prada, Dolce & Gabbana, Tiffany and Burberry; and the exceptional results achieved by Sunglass Hut, the result of hard work and commitment by the new organization, along with the strong performance of LensCrafters, now firmly reestablished as a point of reference for the North American optical retail sector after posting for 2010 its highest growth in comparable store sales4 since 2006. “I firmly believe that if we keep up this good work, 2011 will prove to be the natural evolution of the year that has just drawn to a close, and Luxottica will thus continue to post solid, stable growth and increased profitability. The start of the new year already looks encouraging."
At the operating level, the Group’s performance for the year once again confirmed the success of Luxottica’s strategy to increase profitability. More specifically, consolidated EBITDA5 for fiscal year 2010 is expected to grow significantly (approximately +20%, compared with 2009), thereby exceeding Euro one billion. The Company also expects consolidated net income for the year to be in line with the Group's forecasts, at more than Euro 400 million, up by approximately 35% from Euro 299.1 million for last year. By carefully controlling working capital, the Group generated strong free cash flow for the year, which remained at excellent levels. Consequently, consolidated net debt5 as of December 31, 2010 is expected to decline further, to approximately Euro 2,140 million (compared with Euro 2,337 million as of December 31, 2009), with a consolidated net debt to EBITDA5 ratio of approximately 2.1X, compared with 2.7X as of the end of the previous year.
