Essilor Posts Earnings, Plans Growth

Essilor International released its financial statements for 2016, noting almost 6% growth worldwide and a plan for increased growth. In a statement released today on its website (read the entire report here), the company reported a 5.9% growth in revenue over 2015, with a growth of 7.4% in profit attributable to equity holders.
Essilor International Chairman and CEO Hubert Sagnières acknowledged the positive growth, and expects “accelerated growth” this year.
“In 2016, Essilor achieved another year of earnings growth, continued its mission to improve vision care around the world and expanded its operational and geographic reach,” he said. “We are beginning 2017 with a strengthened leadership team and operational structure in order to even more effectively capture the growth opportunities offered by the vast eyecare market. Multiple initiatives are already underway in terms of innovation, product and service offerings. As a result, we expect a progressive acceleration in growth over the course of the year.”
He added that the merger of Essilor and Luxottica—and its integration of lenses, frames, and distribution channels—is expected “to open up particularly exciting new prospects.”
Here’s a quick breakdown of the report, as it relates to North America:
Spectacle Lenses: Like-for-like growth was 2.0% in North America. In the U.S., growth with independent optometrists was primarily due to the rollout of new offers for members of the alliance service platforms—Vision Source, PERC/IVA, and Optiport— the market segment which posted the fastest growth in the U.S.
In addition to the development of integrated supply chain offerings, key account business was driven by the demand for valued-added products and designer lenses from national optical chains as well as by the development of relationships with certain mid-sized chains. The distribution of contact lenses remained buoyant. 
There was a marked fall in Transitions Optical sales to other manufacturers contrasted with moderate growth in sales of Transitions lenses across Essilor’s own distribution networks. 
E-commerce: In North America, online activities generated like-for-like growth of around 7.3%, due to very high growth by EyeBuyDirect, continued development of Frames Direct, and a fall in sales for Clearly in the U.S. and Canada, mitigated by an improved trend in the fourth quarter. 
Sunglasses & Readers: The Sunglasses & Readers division delivered like-for-like growth of 1%. Costa achieved the best growth in the U.S. sunwear market in 2016, despite growing at a slower rate than in 2015. 2016 performance was affected by challenges experienced by several specialist sports distributors and the fall in inventories of certain chains. 

Acquisitions and Partnerships 
Essilor reported closing 18 transactions in 2016 that brought in total additional full-year revenue of approximately $323 million.
Since January 1, Essilor has pursued its strategy of forging partnerships with local optical market leaders with four transactions representing aggregate additional annual revenue of around $20 million.
In Brazil, the company acquired a majority stake in Visolab Produtos Opticos Ltda. In India, Essilor acquired a majority stake in Mangalsons Optics PTE Ltd, a distributor of plastic and glass lenses, sunglasses and ophthalmic frames. Essilor is preparing to enter Ethiopia by signing an agreement to acquire a majority stake in Sun Optical Technologies, a leading prescription laboratory. The completion of this partnership is subject to final approvals by local authorities. 
In the Netherlands, the company acquired a majority stake in Optitrade Logistics Center (OLC), the distribution platform of Optitrade, a purchasing alliance of around 650 optical stores in that country.