2011 Results - Essilor · 2016. 11. 24. · 2011 Revenue by Region and Division 12 Reported revenue...

2011 Results

March 1st, 2012

2011 Results

Our Focus Today

2011 Results2

2011 Highlights

Financial Results

Market and Strategy

Outlook

Strong and Balanced Growth

3

+5.0%

+9.7%

+2.3%

+2.5%

Like-for-like

Bolt-on

acquisitions

Strategic

acquisitions

Growth

excluding

currency

effect

2010

Revenue

Developed

Markets

Fast Growing

Markets

2011

Revenue

148

135

+7.3%*

(in €m)

* Like-for-like and

bolt-on acquisitions growth

Organic and external

growth driving

performance

All regions

contributed to

growth

2011 Revenue: €4,190m

2011 Results

2011 Results

Increased Exposure to Fast Growing Markets

4

11%

12.7%

14.6%

2009

2010

2011

2011 Results

Capturing Full Potential in Developed Markets

> 10%Europe* – USA

Crizal Sales Growth

5

* Countries where Essilor has developed a TV Ad campaign in 2011

Growing the Mid-Range through Acquisitionsand New Products

2011 Results

FutureXShamir Wanxin

6

Dynamic Optical Industry Investing in New Technologies

2011 Results

SP-200Compact sputter coater for small

laboratories

VFT-orbitFully automated generator

for all lens formats+ 20.7%*

Equipment Sales

1200-DLFVacuum box coating system for

AR coating

7

* Growth excluding currency effect

FGXI Ahead of Plan

2011 Results8

Delivering Results over the Long Term

Contribution from operations €748m – up 6.1%

› Contribution margin 17.9% of revenue

Earnings per share €2.44 – up 10.7%

Cash flow €723m – up 7.0%

9

* Cash flow = Operating cash flow excluding change in WCR

2011 Results

2011 Results

Our Focus Today

2011 Results10

2011 Highlights

Financial Results

Market and Strategy

Outlook

3,892

193

90

96 -81

4,190

2010 Revenue Organic growth

Bolt-on acquisitions

Strategic acquisitions

Currency effect

2011 Revenue

Revenue Up 7.7% at €4,190m

11

+5.0%

+2.3%

+2.5% -2.1%

+7.3%

+9.7% at constant exchange rates

In € millions

Q1: FGXI

+ Signet Armorlite

H2: Shamir2011 Results

2011 Revenue by Region and Division

12

Reported revenue in € millions

Growth excluding currency effect and strategic acquisitions2011 2010 % change

Optical Lenses and Instruments 3,796 3,551 +6.8%

Europe 1,471 1,402 +2.2%

North America 1,519 1,505 +4.6%

Asia-Oceania/Middle East-Africa 556 450 +20.0%

Latin America 249 194 +26.8%

Equipment 185 154 +21.9%

Readers 209 187 +4.5%

TOTAL 4,190 3,892 +7.3%

2011 Results

Quarterly Revenue Growth

13

+7.3%+6.7% +6.7%

+8.5%

+7.3%

Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011

Like-for-like growth and bolt-on acquisitions

2011 Results

Q4 Revenue Up 11.1% at Constant Exchange Rates

Strong organic growth: +6.4%

› Ramp up of large contracts (LensCrafters, Boots, NVI, …)

› Successful launch of Optifog

› Temporary additional sales

› Continued momentum in Equipments sales

› Underlying dynamism of optical market

› Inventory decrease in Readers

Robust contribution from acquisitions

› Shamir off to a good start

› 14 new partnerships in both developed and fast-growing markets

› Acquisition of Stylemark

142011 Results

Contribution from All Regions…

Robust growth in each channel

Crizal boosted by national TV campaigns

Ramp up of contracts with large chains

15

North America

€1,519m

Reported revenue / Growth excluding currency effect and strategic acquisitions

Europe

€1,471m

Latin America

€249m

Asia-Oceania/Middle

East-Africa

€556m

€3,796m

Optical lenses and

instruments

+4.6% o/w +3.8% like-for-like


Persistent volatility across countries

Effective strategy in the mid-range

Promising launch of Optifog



Strong product mix improvement

Active partnership strategy

New subsidiary in Columbia

+26.8%

+22.6%

Very good year in Japan and Australia

Acceleration in China

Expansion in Morocco

+20.0%

+15.1%

Increased pricing power of innovation

Robust volume growth

Market share gains

+6.8%

+5.0%

2011/10 2010/09 2009/08

+3.5% o/w -0.4% like-for-like

-0.5% o/w -2.7% like-for-like

+8.3%

+12.8%

+2.8%

2011 Results

… and Business Segments

Digital surfacing machines

Solutions for key accounts

Deployment in Latin America

16

Equipment

€185m

Reported revenue / Growth excluding currency effect and strategic acquisitions

Readers

€209m

+21.9%

+38.0%

Success of new products

Expansion in Europe and Latam

Acquisition of Stylemark

+4.5%

+6.9%

2011/10 2010/09 2009/08

-7.0%

2011 Results

Bolt-on Acquisitions:

27 Transactions Representing €169m in Full-Year Revenue

17

Canada

1

United States

3

Latin America

6

Africa - Middle East

3

Europe

1

Asia

6

Oceania

1

Equipment

2

Readers

3

Russia

1

2011 Results

Strategic Acquisitions:

StyleMark, a US leader in Readers and Sunglasses

18

2011 sales: ~ USD 135 m

Consolidated since January 1st, 2012

340 employees

More than 30 million sunglasses and

readers sold in nearly 30,000 retail

outlets

* Based on current estimates

Key figures

Impact on

Essilor EPS*

Neutral to 2012 EPS before PPA

Accretive to 2013 EPS including PPA

Complementary to FGXI

Channel Distribution

A large portfolio

of consumer brands

2011 Results

Strategic Acquisitions:

Shamir, a Growing Leader in the Mid-Range Market

19

Consolidated since July 1st, 2011

› H2 sales: USD 94 m, up 11.5% like-for-like

(2011 sales: ~USD 190 m)

› H2 2011 contribution margin: 14.5% before PPA

› Presence in 14 countries

Plans for Development in motion

› Acquisition plan strengthened

› Development of Shamir products through Essilor

networks

› Cost improvement through Group sourcing

Impact on Essilor EPS:

› Accretive in 2012

2011 Results

Revenue in Fast Growing Markets

Up 25.6% at Constant Currency

20

14.6%

Africa

Middle East

+8.3%

India

+28.9%

China

+66.4%

Russia

+10.5%

ASEAN

+10.5%Latin America

+25.0%

*Fast growing markets include China, India, ASEAN, Korea, HK,

Taiwan, Africa, the Middle East, Russia and Latin America

€612m

North Asia

+19.0%

2011 Results

In € millions 2011 2010 % change

Revenue 4,190 3,892 +7.7%

Contribution from operations*

% of revenue

748

17.9%

705

18.1%

+6.1%

Operating profit 683 618 +10.4%

Profit attributable to equity holder

% of revenue

506

12.1%

462

11.9%

+9.4%

Earnings per share (in €) 2.44 2.20 +10.7%

Earnings Per Share Up 10.7%

21

* Operating profit before compensation costs of share-based payments, restructuring costs, other income and

expense and goodwill impairment

2011 Results

Impact of PPA and Acquisition Costs on Profitability

22

In € millions, as reported 2011 2010 2009 2008

Revenue 4,190 3,892 3,268 3,074

PPA -22.2 -18.4 -12.3 -7.5

Bolt-on acquisition costs -3.9 -6.6 0* 0*

Impact on contribution margin -60 bp -60 bp -40 bp -20 bp

Strategic acquisition costs -7.5 -6.5 0* 0*

PPA and all acquisition costs -33.6 -31.5 -12.3 -7.5

* IFRS 3 Revised has applied since 2010

2011 Results

In € millions 2011 2010 % change

Contribution from operations* 748 705 +6.1%

Other income/costs -65.1 -86.4

o/w Restructuring costs -22.6 -37.9

o/w “Share-based payments” related costs -23.2 -21.7

o/w Strategic acquisitions costs -7.5 -6.5

Operating profit 683 618 +10.4%

Financial result -13.4 -10.8

Income tax

Effective tax rate

-179.4

26.8%

-167.4

27.5%

Contribution from associates 27.9 31.7

o/w Transitions Group 27.9 28.4

o/w Sperian 0 3.3

Profit attributable to equity holder 506 462 +9.4%

Profit Attributable to Equity Holder

23

* Operating profit before compensation costs of share-based payments, restructuring costs, other income and expense

and goodwill impairment

2011 Results

18.1%

+0.3% 18.4% -0.2%-0.3%

17.9%

2010 reported

Operating leverage on 2010

business base

2011 before bolt-on and strategic acquisitions

Bolt-on acquisitions

Strategic acquisitions

2011 reported

Improved Contribution from Core Business

while Increasing Marketing Expenditures

24

As a % of revenue

Q1: FGXI

+ Signet Armorlite

H2: Shamir

€40m Increase

in Marketing

& Sales

2011 Results

Optimized Capex to Support Growth

25

7.1%7.7%

5.9%

3.5%3.2%

4.6%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2006 2007 2008 2009 2010 2011

Capital expenditure net of disposals in € millions and in % of revenue

192

224

183

116124

192

Additional capacity

Contracts with key accounts

Innovation and Technology Centers

2011 Results

6

148

434

176

205

51

Cash Flow Up 7%

210

83

723

26

148

430

175

205

56

Operating cash flow

(excl. Δ WCR)

Capital increase

Other

Reported change in net debt

Capex

Δ WCR

Dividends

Net financial

investments

Share buybacks

+463

Cross-currency swap

In € millions

2011 Results

Net Gearing below 15%

27

In € millions

* Adjusted for acquisition-related costs in accordance with IFRS 3R

- 210 - 260112

-93

296506

1,8922,168

2,366

2,735

3,044

3,458

2006 2007 2008 2009* 2010 2011

Net debt Equity

0.6 x

EBITDA

2011 Results

Diversified and Committed Financing

US Private Placement: a new source of financing in 2012

› USD 300 million

› 5/7 years bullet

› More than 5 times oversubscribed by 17 leading investors

On-going Commercial Paper program

Approximately €1.5 billion of Committed credit lines (€ and $)

Available cash

28

A Strong Capacity to Fund our Development

2011 Results

Steady Growth in Dividend Per Share:

Average Annual Growth Rate of 9.1% since 2006

29

113129

137147

172 1770.55

0.62

0.66

0.70

0.830.85*

2006 2007 2008 2009 2010 2011

Total payout (€m) Dividend per share (€)

* Submitted to shareholder approval at the May 11, 2012 Annual Meeting

2011 Results

A New Stage in our Joint-Venture’s Development

Nikon-Essilor & Essilor Korea: 10 years of success

Shared commitment to driving faster growth for both companies

Full consolidation in 2012

Expected impacts in 2012:

› On the basis of 2011 accounts, the estimated additional revenue

would represent 2 points of growth

302011 Results

Our Focus Today

2011 Results31

2011 Highlights

Financial Results

Market and Strategy

Outlook

32

Global Optical Market:

Long-term Structural Growth

A large and growing market,

still significantly underpenetrated

Fast growing markets driving volume growth

Value growth boosted by demand for better vision

A highly fragmented industry led by local operators

Poor vision: a global economic concern

2011 Results

A Large and Growing Market,

Still Significantly Underpenetrated

2011 Results

7 billion people in the world

4.2 billion people (60%) require vision correction

2.5billion

Not corrected

33

Presbyopes growth rate: 2-3%

Myopic growth rate: 4-6%

1.7billion

Corrected

Fast Growing Markets Driving Volume Growth

2011 Results

Fast

Growing

Markets

Developed

Markets

Global market growing at 3-4%

+6-8% +1-2%

35

12580

20

120

190

570 millionconsumers per annum

34

Value Growth Boosted by Demand for Better Visionin Every Segment

2011 Results

Category growth Category segmentation

Progressive

Bifocals

Single

vision

Varilux Ipseo

Varilux Comfort

Varilux Liberty

Varilux Physio

Value creation in the presbyopes segment

Bett

er

vis

ion

Geographic mix

Pri

ce

pre

miu

m

35

3% 11%

23%

27%30%

36%

India

Gro

wth

po

ten

tia

l

Italy Brazil France CanadaUSA

A Highly Fragmented Industry, Led by Local Operators

2011 Results36

Sources: Essilor estimate, 2010 Infomarket, VisionWatch 2010

Essilor

Essilor G

X

Lens

Manufacturers

Wholesalers

& Laboratories

Optical

Retail

Readers

Manufacturers

Readers

Wholesalers

Retail

Networks

150 to 200Small operators

1,500 to 2,000Local operators

1.1 Billion Rx lenses

220 Million Readers (pairs)

Poor Vision: a Global Economic Concern

2011 Results

Workplace Elderly

Sources: World Health Organization, BCG

Education

37

810 million: Children with poor vision encountering problem at school

1.1 billion: Workers with poor vision having productivity or safety issues

3.2 million: People blinded by UV exposure every year

» $270bn: Global economic productivity loss due to poor vision

A Strategy Serving Essilor’s Mission: Improving Vision Worldwide

38

Operational and management efficiency

Products and

Services

INNOVATE

Corporate and social responsibility

Top & Mid-

range markets

DEVELOP

Acquisitions &

Partnerships

GROW

Demand

for Vision

Improvement

STIMULATE

2011 Results

2011 Results39

Consolidate leadership in the high-end

through innovation

Strengthen positions

in mid-range markets

2008-2011: Building Momentum for Sustainable Growth


2011 Results

Expand in two new

growth segments

Capture leading positions

in key new markets

40

2011 Results41

Gaining market shareNew management organization

to support growth


Volume market share

31%

26%

Revenue

Contribution from operations

Earnings per share

Cash flow*

2011 Results

+10.9% CAGR

+10.7% CAGR

+9.7% CAGR

+9.0% CAGR

42


* Cash flow = Operating cash flow excluding change in WCR

A Stronger Essilor Entering 2012

2011 Results43

WIDENING

THE LEAD

Geographies

New growth

segments

Market

segmentation

Supply chain

People

Innovation

Maintaining focus on Developed Countries while

increasing investments in Fast Growing Markets

Multi-networks

Brands

Demand stimulation:

“Think About Your Eyes”

Integrated business solutions

2011 Results

Strengthening Geographical Presenceand Growing Market Share

Acquisitions & partnerships

Products & services

Premium brands

Partnerships with local market leaders

Expand presence in Africa,

Middle East, Latin America, …

Dedicated organization

44

Geographies Supply chain People InnovationMarket segmentation New Growth segments

2011 Results

Geographies Supply chain People InnovationMarket segmentation New growth segments

45

€612m

€1,500m

2011

2015

Fast Growing Markets: our Ambition

2011 Results

Increasing our Reach in Fast Growing Markets

46


2011 Results47


Deploying a Multi-Network Strategy in Developed Markets

2011 Results

Building Growth and Value in Every Market Segment

High-end Mid-range

Upgrading and innovating at every price point

Partnering with profitable local leaders with loyal customer base

Building on global brands:

Varilux, Crizal, Xperio, Transitions, Nikon, Optifog, etc.

Introducing local brands for differentiated products

48


Leveraging Business in Two New Growth Segments

2011 Results

Global growth potential

Readers and Sunglasses

Closer to the consumer

New distribution channels

Rapid deployment of new technologies

More efficient process

Long-term customer base

New business models


53

Satisloh & Equipment FGX International

2011 Results

Strengthening our Supply Chain to Deliver A Unique and Reliable Service

19 manufacturing plants producing 350 million lenses

6 export laboratories serving 20% of Rx needs

A network of 390 local prescription laboratories serving 400,000

optical stores worldwide

Worldwide integrated electronic ordering system powered by

From manufacturing To customers


57

2011 Results

A Motivated and Highly Federated Workforce...

Geographies Supply chain People InnovationMarket segmentation New Growth segments

58

A unique

entrepreneurial

model

Successful record

of integrating new

partnerships

acquisitions

Broad-based

employee

shareholding

program

Invest in talented

people

Internationalization

and diversity

to address an

expanding, complex

environment

A corporate culture deployed through the “Essilor Principles”

Improve the life of the 4.2 billion people

requiring visual correction worldwide

2011 Results

… With a Strong Commitment to the Essilor Mission

59


Continuing to Innovate

New technologies driving an increasing number of new segmented

products and services

New value drivers: Personalization, Customization, PolarRx, Optifog, UV

2011 Results


OBM™

Products and Services

60

UV Protection For Every Eye

Creating a new standard in

eye health protection

A breakthrough innovation from Essilor


2011 Results61

UV Light: a Major Hazard for the Eyes and the Skin

2011 Results62

20 million eye surgery procedures

every year

90% of skin cancer above the neck

with 5-10% on the eyelids*

FACT: UV light exposure is a major eye ageing cause

* Myers M, Gurwood AS. Periocular malignancies and primary eye care. Optometry.2011

UV Protection: Needed All Year Long, Everywhere

> 40%

Calculation based on urban workers in north hemisphere

Indoor low UV emission from fluo-compact light bulb

500

5 000

25 000

100 000

~7%

5%

30%

58%

UV qty (Lx) UV qty per year

We receive 40% of the UV light when not aware of UV exposure

2011 Results63

All Good Quality Materials Block UV Transmission

* 95% UV protection for 1.5 index; 100% UV protection for other materials

First level of UV exposure comes from the front of the lens

And lens materials cut 95%* to 100% of the front UV rays

Visible light

UV light

642011 Results

But Danger Comes from the Back of the Lens!

* % of total UV exposure received by eyes without any protection

Biggest remaining UV exposure comes from

the back & sides to hit rear lens' surface

While UV reflected in the eye can reach up to 50% of total exposure*

UNSOLVED PROBLEM:

HOW BRING TRANSPARENCY AND PROTECTION?

Visible light

UV light

652011 Results

Ultra Protection Against Ultraviolet

Introducing Broad Spectrum technology

Virtually eliminating UV reflection into the eyes while maintaining

a premium transparency of the lens.

TECHNOLOGY

COVERED

BY AN INTERNATIONAL

PATENT APPLICATION

662011 Results

An Exclusive Backside UV Protector

2011 Results67

BACKFRONT

SMUDGE & WATER REPELLENCE

DUST REPELLENCE

AR EFFICIENCY

SCRATCH-RESISTANCE

SMUDGE & WATER REPELLENCE

DUST REPELLENCE

SCRATCH-RESISTANCE

LENS

AR EFFICIENCY

BROAD SPECTRUM

TECHNOLOGY

NEW

Front And Back UV Virtually Eliminated!

Front side: lens materials cut 95%* to 100% of the front UV rays

Visible light

UV light

THE RESULT: BETTER UV PROTECTION

UP TO 10 TIMES BETTER THAN EXISTING LENSES

* 95% UV protection for 1.5 index; 100% UV protection for other materials

682011 Results

Broadspectrum Technology

First backside UV protection on the market

7 years of R&D

An exclusive Essilor patented technology

Compatible with installed AR equipments

692011 Results

of ECPs are interested by an AR

treatment increasing protection

against UV

Source: Ipsos International Survey – 564 eye care professionals interviewed – 7 countries – 2010

702011 Results

A Very Large Long Term Value Potential

500 million AR clear lenses

Opportunity to accelerate AR market growth

800 million Sun lenses

712011 Results

A new Protection Index to

educate the market and

differentiate products

722011 Results

Introducing the Eye-Sun Protection Factor

A new index developed by Essilor,

endorsed by independent 3rd-party,

certifying the global UV protection of a lens

732011 Results

Why Creating the E-SPF Index?

No relevant index today

Existing “100% UV protection” only integrates UV cut in transmission

Drive awareness on UV dangers

Help choosing the right protection for ECPs and consumers*

Use analogy with sun cream SPF index for a simplified message

* Over 90% of consumers recognized the utility of a sun protection factor for eyewear

742011 Results

E-SPF: the New UV Protection Index

Lens

Lens No

-Irradiance

IrradianceSPFE

Intrinsic properties

of the lens material and antireflective stacks

1500

1

UVUV RT

*

* direct eye exposure depending on external factors (wearer's morphology, frame shape, position

of wear....) is not integrated in the formula of E-SPF

%

%

Front side UV exposureUV radiation transmitted through

the lens when the sun is in front of

the wearer

Back & Sides UV exposureUV radiation reflected from the back of

the lens when the sun is behind the

wearer

E-SPF measures endorsed by Dr. K Citek, OD, PhD, Professor of Optometry, Forest Grove, Oregon, USA,

Method of measurement of UV reflection (Ruv) technically endorsed by Fraunhofer/IOF (Germany)

752011 Results

The Higher the E-SPF, the Better the UV Protection

E-SPF 2 E-SPF 5 E-SPF 10 E-SPF 25 E-SPF 50+

Clear Lens

Sunwear

762011 Results

2012: Global Launch of Crizal UV

The best E-SPF of the market

The beginning of a new journey for

The first step in roll out of best UV protection as standard in

optics

772011 Results

Crizal UV: Best Everyday UV Protection

E-SPF values*

Crizal Forte UV

Competitor A

Competitor B

Competitor C

Crizal Sun UV

Sun lenses

Clear lenses

* for all lenses materials except plastic 1.5 index

25

3

5

5

50+

782011 Results

Performance Upgrade Justifies a Price Premium

Premium

AR efficiency

Premium

Smudge

resistance

Premium

Scratch

resistance

Smudge

resistance

Dust repellence

Scratch

resistance

AR efficiency

Scratch

resistance

AR efficiency

Unique

Water

repellence

200920061992

Smudge

resistance

Scratch

resistance

AR efficiency

2003

Dust repellence

Premium

AR efficiency

Premium

Smudge

resistance

Premium

Scratch

resistance

Premium

dust repellence

Unique

Water

repellence

2012

Best

UV protection

Water

Water

792011 Results

Our focus today

2011 Results82

2011 Highlights

Financial Results

Market and Strategy

Outlook

Outlook for 2012

Total Revenue Growth: 12% to 15% at constant exchange rates

(including like-for-like and bolt-on acquisitions at 6% to 9%)

Contribution from operations:

maintain current high level of profitability(excluding strategic acquisitions)

832011 Results

Thank you

2011 Results - Essilor · 2016. 11. 24. · 2011 Revenue by Region and Division 12 Reported revenue...

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Transcript of 2011 Results - Essilor · 2016. 11. 24. · 2011 Revenue by Region and Division 12 Reported revenue...