On Friday EssilorLuxottica announced its annual results and its intention to return to pre-pandemic levels of activity as its fourth quarter sales showed further signs of improvement.
EssilorLuxottica saw its net income, group share, decline by 92.2% to €85 million in 2020 from €1.08 billion in 2019. The reported result reflects a non-cash negative impact of €528 million related to the allocation of the acquisition cost for the combination between Essilor and Luxottica. Operating profit was €452 million, compared with €1.7 billion in 2019.
On an adjusted basis, EssilorLuxottica reported net income of €788 million, down 57% year-on-year. Adjusted operating profit fell 48.5% to €1.37 billion from €2.8 billion in 2019.
Turnover fell by 17% (-14.6% at constant exchange rates) to €14.429 billion.
According to the FactSet consensus, analysts on average expected sales of €14.5 billion and an adjusted operating profit of €1.3 billion.
Free cash flow was €1.842 billion, in line with the previous year, reflecting the rapid implementation of cost containment and cash preservation measures as well as a solid recovery in the second half of the year.
“Our strong results demonstrate the strength of our business model and the benefits of our integration. The structural need for good vision and strong brands, combined with innovation, vertical integration and tight cost control, are delivering strong profitability,” said Francesco Milleri, Chief Executive Officer, and Paul du Saillant, Chief Operating Officer, EssilorLuxottica.
According to the group, the maker of Oakley and Ray-Ban showed further signs of revenue improvement in the fourth quarter.
The eyewear maker’s fourth-quarter sales rose 1.7 per cent at constant exchange rates to $4.92 billion, as a rebound in its eyewear business offset weak demand for sunglasses from customers who stayed home due to the pandemic.
The company said it expects this trend to continue this year, as well as the increase in online sales, especially as it has already seen visible positive momentum in Asia-Pacific.
EssilorLuxottica is also counting on the rollout of the COVID-19 vaccination, which should begin to normalise the economic environment in other regions in the second quarter.
EssilorLuxottica will propose at its next general meeting the distribution of a final dividend for the 2020 financial year of 1.08 euro per share, which can be paid in cash or in newly issued shares. The group had already distributed an interim dividend of 1.15 euro per share at the end of December.
The chairman of the group and founder of Luxottica, Leonardo Del Vecchio, at the same time indicated in a press release his intention to propose to the new board the confirmation of Francesco Milleri in the role of chief executive officer and Paul du Saillant as deputy chief executive officer.
As a reminder, Francesco Milleri was temporarily appointed in December, pending this year’s general meeting of shareholders.
Featured Photo : © Essilor Luxottica[/vc_column_text][/vc_column][/vc_row]