First-Half 2016 Results. July 29, 2016

Transcription

1 First-Half 2016 Results July 29, 2016

2 1. First-Half 2016 Highlights Hubert Sagnières Chairman and Chief Executive Officer First-Half 2016 Results 2

3 Key Figures H Growth H Revenue 3,408m +5.1% +8.1% (1) 3,583m Contribution from operations (2) As a percentage of revenue Earnings per share +4.0% 651m 677m 19.1% 18.9% +6.4% Free Cash Flow (3) +9.3% 226m 247m (1) Growth at constant exchange rates (2) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses) (3) Free Cash Flow = Net cash from operating activities less change in WCR and capital expenditure First-Half 2016 Results 1. First-Half 2016 Highlights 3

4 Key Highlights Combined growth (1) of 8.1% in line with yearly objectives Like-for-like revenue up 5.0% in Lenses & Optical Instruments: in acceleration year-on-year Double-digit expansion in fast-growing markets (2) Better-than-expected growth in Europe Performance in North America impacted by a decline in Transitions Optical sales to other lens casters Sunglasses & Readers suffered from poor weather and delayed growth at Xiamen Yarui Optical (Bolon ) Equipment returns to growth Strong acquisition & partnership momentum Solid contribution from operations (3) (1) Like-for-like growth and bolt-on acquisitions (local acquisitions or partnerships) (2) Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America (3) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses) First-Half 2016 Results 1. First-Half 2016 Highlights 4

5 2. Financial and Operating Performance Laurent Vacherot Chief Operating Officer First-Half 2016 Results 5

6 First-Half 2016 Revenue up 8.1% Excluding the Currency Effect millions 138 (102) +4.0% -3.0% % 3, % 3, % H Revenue Like-for-like growth Bolt-on acquisitions(1) Currency effect H Revenue (1) Local acquisitions or partnerships First-Half 2016 Results 2. Financial and Operating Performance 6

7 First-Half 2016 Revenue by Region and Division Reported revenue in millions H H Change (reported) Change (excluding currency effect) Lenses & Optical Instruments 2,954 3, % +9.1% North America 1,312 1, % +5.9% Europe % +8.4% Asia/Pacific/Middle East/Africa % +10.3% Latin America % +30.6% Sunglasses & Readers % +0.9% Equipment % +3.2% TOTAL 3,408 3, % +8.1% First-Half 2016 Results 2. Financial and Operating Performance 7

8 Second-Quarter Like-for-like Revenue up 3.2% Second-Quarter Combined Revenue (1) up 6.9% Like-for-like revenue growth Q Q H Lenses & Optical Instruments +5.7% +4.4% +5.0% North America +4.7% +1.5% +3.1% Europe +4.7% +4.5% +4.6% Asia/Pacific/Middle East/Africa +8.9% +8.5% +8.7% Latin America +9.0% +11.4% +10.3% Sunglasses & Readers -1.5% -5.8% -3.9% Equipment +3.5% +4.3% +4.0% TOTAL +5.0% +3.2% +4.1% Lenses & Optical Instruments Fast-growing markets (2) like-for-like growth improved from 9.3% in Q1 to 10.5% in Q2 Decline in Transitions Optical sales to other lens casters, primarily impacting North America Sustained performance in Europe Sunglasses & Readers Unfavorable weather conditions Delayed growth at Xiamen Yarui Optical (Bolon ) Solid contribution from acquisitions of 3.7% (1) Combined growth = like-for-like growth + bolt-on acquisitions (local acquisitions or partnerships) (2) Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America First-Half 2016 Results 2. Financial and Operating Performance 8

9 Solid Momentum in Lenses & Optical Instruments +5.1% +4.7% +5.0% +5.0% +3.6% +2.4% +1.3% H1 H2 H1 H2 H1 H2 H First-Half 2016 Results 2. Financial and Operating Performance 9

10 11 Acquisitions as of July 29, 2016 Representing ~ 130m in Full-Year Revenue Europe 1 North America 5 Vision Direct Opti-Port Axis Medical Group One Vision Optical Asia/Pacific/ Middle East/Africa 1 Allaboutvision.com Ocutec Laboratorio Opticas Place Vendôme US Optical Icare Industries Latin America 4 Summer Vision Digital Lab First-Half 2016 Results 2. Financial and Operating Performance 10

11 North America: Healthy Lens Business, Poor Sun Season H revenue growth excluding currency effect, across all business divisions 5.1% HIGHLIGHTS Good performance with the independent eye care professionals in the US Decline in Transitions Optical sales to other lens casters Sun season impacted by poor weather conditions LENSES & OPTICAL INSTRUMENTS Innovation Launch of Eye Protect System range of products New offerings for Doctor Alliances New partnerships with two prescription laboratories Online Continued success of EyeBuyDirect and Frames Direct Return to growth of Clearly in Canada Coastal still challenging in the US SUNGLASSES & READERS Market share gain at Costa New channels for FGX First-Half 2016 Results 2. Financial and Operating Performance 11

12 Europe: Sustained Dynamic H revenue growth excluding currency effect, across all business divisions 7.8% HIGHLIGHTS Good performance in major countries, Russia and Eastern Europe Sales acceleration in Nordic countries UK and Central Europe stable LENSES & OPTICAL INSTRUMENTS Innovation Success of Eyezen lenses in France and Switzerland Launch of Transitions Style Colors lenses in Italy (four new colors) Online Acceleration of Lensway in Scandinavia Acquisition of Vision Direct in the United Kingdom SUNGLASSES & READERS Launch of Costa in France and Spain First-Half 2016 Results 2. Financial and Operating Performance 12

13 Asia (1) : Continuing Momentum in Lenses H revenue growth excluding currency effect, across all business divisions FGM: 10.3% Total Asia: 8.8% HIGHLIGHTS Robust growth in India and Africa Good performance in Southeast Asia Implementation of new shipment model at Xiamen Yarui Optical (Bolon ) LENSES & OPTICAL INSTRUMENTS Positive momentum for Transitions and Varilux lenses in India Broader product range offsetting slower economy in China South Korea driven by Perfect UV offer from Chemilens Revenue growth in developed countries SUNGLASSES & READERS Rebound at Xiamen Yarui Optical expected in H2 Good performance of Merve in Turkey (1) Asia/Pacific/Middle East/Africa First-Half 2016 Results 2. Financial and Operating Performance 13

14 Latin America: Sales Acceleration Driven By Organic Growth and Acquisitions H revenue growth excluding currency effect, across all business divisions 30.8% HIGHLIGHTS Slight acceleration in sales growth in Q2 in Brazil Strong growth in Argentina, Colombia and Mexico New footprint in Peru and expansion in Chile LENSES & OPTICAL INSTRUMENTS Crizal lenses: Healthy growth in Brazil, Mexico, Argentina, Costa Rica and Nicaragua Kodak lenses: Success in Brazil and launch in Mexico Transitions lenses: Solid performance in Mexico Strong dynamic in online sales in Brazil (e-ótica, e-lens and glasses4you ) EQUIPMENT Recovery driven by the adoption of the digital surfacing technology by small and mid-size labs First-Half 2016 Results 2. Financial and Operating Performance 14

15 Profit Attributable to Equity Holders up 7.3% millions H H Change Revenue 3,408 3, % Contribution from operations ( 1 ) % Other income (expenses), net (37) (31) - Operating profit % Financial income (expense), net (20) (37) - Income tax (172) (159) - Effective tax rate 29.0% 26.1% - Net profit % Minority interests (34) (34) - Profit attributable to equity holders % Earnings per share (in ) % Rise in US interest rates Gain on FX in H Partial script dividend Geographic mix (1) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses) First-Half 2016 Results 2. Financial and Operating Performance 15

16 Contribution from Operations (1) up 4% millions H H Change Revenue 3,408 3, % Gross profit 2,041 2, % % of revenue 59.9% 59.6% EBITDA % Efficiency gains Transitions Optical sales to other lens casters Acquisitions % of revenue 24.5% 24.2% Contribution from operations (1) % % of revenue 19.1% 18.9% Incremental media spend (1) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses) First-Half 2016 Results 2. Financial and Operating Performance 16

17 Contribution from Operations (1) at 18.9% of Revenue Contribution from operations as a percentage of revenue 0.5% -0.2% -0.5% Trade up/innovation Efficiency gains 19.1% 18.9% Bolon performance Preparing the future: FGM, 2.5 NVG, H Operating leverage and synergies Incremental media spend Acquisitions(2) H (1) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses) (2) Bolt-on acquisitions (local acquisitions or partnerships) First-Half 2016 Results 2. Financial and Operating Performance 17

18 Capital Expenditure: Continuing to Invest in Long-term Growth 7% 6% 285 5% % 321 4% 4.6% 4.7% 4% % 129 3% 3.6% 2% H Capital expenditure in million (net of disposals) As a percentage of revenue First-Half 2016 Results 2. Financial and Operating Performance 18

19 Free Cash Flow (1) up at 247m, up 9.3% millions 233 Change in WCR Operating cash flow (2) (excl. change in WCR) Capital expenditure Dividends (4) Reported change in net debt Foreign exchange, capital increase and others (3) (1) Free cash flow corresponds to net cash from operating activities less change in WCR and capital expenditure (2) After disbursement of the fine to the Bundeskartellamt (BKA) that was set aside in 2010, for a total amount of 63m, including accrued interest (3) Including 38m of foreign exchange impact and 3m of capital increase (4) The theoretical 2015 dividend amounted to million. However, the option to receive the dividend in shares was taken up by 67.6% of shareholders and the cash dividend effectively disbursed amounted to 79.1 million. 293 Net financial investments First-Half 2016 Results 2. Financial and Operating Performance 19

20 Net Debt as of June 30, 2016: 1.3x EBITDA (1) 2,168 2,089 2,172 Strong cash generation Working capital usual seasonality Disbursement of the fine to the BKA Acquisitions An active first-half Earn-out & put options H H Net debt Net debt/ebitda (1) For the last 12 months ended June 30, 2016 First-Half 2016 Results 2. Financial and Operating Performance 20

21 H at a Glance Lenses & Optical Instruments Continued momentum in fast-growing markets New initiatives for Transitions lenses Eyezen and Eye Protect System product ranges Acceleration in online sales Sunglasses & Readers New channels/countries for Costa, FGX and Bolon products Xiamen Yarui Optical (Bolon ) back to growth in the course of H2 Group-wide Good order book in the Equipment division Consumer branding across all businesses Solid acquisition pipeline Capital expenditures to sales: around 4% for FY16 First-Half 2016 Results 2. Financial and Operating Performance 21

22 3. Strategy and Outlook Hubert Sagnières Chairman and Chief Executive Officer First-Half 2016 Results 22

23 A Powerful Growth Strategy FAST-GROWING MARKETS ONLINE 10-12% 5.8bn 14% PRESCRIPTION LENSES 12.7bn 3-4% SUNGLASSES & READERS 10bn 6-7% 5.8bn ~ 28.5bn 6-7% Innovation Consumer Focus and Branding Partnerships and Acquisitions Business Interconnections Size and growth of industry segments by 2018 / Prescription sun lenses are included in prescription lenses Fast-Growing Markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America First-Half 2016 Results 3. Strategy and Outlook 23

24 A Lot of Upside Left for Essilor PRESCRIPTION LENSES SUNGLASSES READERS ONLINE Market units Market units Market units Market value ~1,260 m lenses m pairs m pairs ~ 4bn Essilor market share Essilor market share Essilor market share Essilor market share ~41% ~15% ~15% ~5% Total market share in units: ~25% Source: Essilor 2015 estimates, Estin First-Half 2016 Results 3. Strategy and Outlook 24

25 Lenses & Optical Instruments: Many Robust Initiatives in H2 Products Deployment of Eyezen lenses Launch of Eye Protect System range of products Focus on Transitions lenses Geographies North America: Deployment of product & service offerings to our doctor alliances Europe: Product mix improvement Fast-Growing Markets (1) : Continued momentum Consumers Online: Acceleration in all geographies Consumer branding: Further benefits in H2 (1) Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America First-Half 2016 Results 3. Strategy and Outlook 25

26 Sunwear: Xiamen Yarui Optical to Improve in H2 Long-term Powerful long-term success story >30% revenue CAGR since 2012 Increased capacity with a new plant Mid-term New distribution channels: direct to ECPs, travel retail Geographic expansion: Thailand, Malaysia, Vietnam and the Philippines Development of prescription lenses Short-term Gradual recovery in shipments Return to growth expected in the course of H2 First-Half 2016 Results 3. Strategy and Outlook 26

27 Sunwear: Many Upcoming Developments Costa New viral campaign: Leafcutter Channel expansion: Travel retail, doctor alliances Geographic expansion: US and abroad FGX Collection renewal opportunities in several key accounts in H2 New Opportunities Osse / Mustang (Merve): In the like-for-like scope from July 1 st, 2016 New contracts with performance and luxury brands validate our strategy First-Half 2016 Results 3. Strategy and Outlook 27

28 Online: Optimization of Business Model to Enhance Growth Organic Growth New consumer experience at Clearly /Coastal Launch of EyeBuyDirect in new countries Product expansion at VisionDirect Cross-selling our sunwear brands on most websites Entering new geographies: India Acquisitions Strengthening geographic and product coverage New Technologies Gearing up for powerful technology enablers First-Half 2016 Results 3. Strategy and Outlook 28

29 Setting the Ground for Acceleration in Fast-Growing Markets (1) RUSSIA Building brand equity Contact lenses 2.8bn Revenue Ambition by 2018 TURKEY Merve Sun brands: Building momentum CHINA Pioneering online models Vision ambassadors New plant for Xiamen Yarui Optical (Bolon ) CHILE, COSTA RICA & NICARAGUA AFRICA New Kodak frames & lenses offering in Morocco 2.5 NVG and Charity active in 12 countries Pipeline of acquisitions INDIA Entry in Sunwear Building online offering ASEAN 2.5 NVG models Pipeline of acquisitions PERU New footprint Integrated retail model BRAZIL New partnerships Branding Online models (1) Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America First-Half 2016 Results 3. Strategy and Outlook 29

30 A Strong Mission At the Core of Solid Execution and Motivation Improving Lives by Improving Sight 7.2 billion people worldwide 63% in need of vision correction 100% in need of vision protection Source: Essilor 2015 estimates First-Half 2016 Results 3. Strategy and Outlook 30

31 Outlook: Long-Term Objectives Unchanged 2016 Revenue Growth Like-for-like Excluding currency effect Around 4.5% >8% 2016 Contribution from operations (1)(2) as a percentage of revenue 18.8% 2018 Like-for-Like Growth >6% (1) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs and other operating expenses) (2) Excluding any additional significant acquisitions. First-Half 2016 Results 3. Strategy and Outlook 31

32 Questions & Answers