(PRESS RELEASE) PARIS, FR — The Board of Directors of EssilorLuxottica met on July 25, 2024 to approve the condensed consolidated interim financial statements for the six months ended June 30, 2024. The Statutory Auditors have performed a limited review of these financial statements.
Francesco Milleri, chairman and CEO, and Paul du Saillant, deputy CEO at EssilorLuxottica commented: “In the first half of the year, EssilorLuxottica’s strategy continued to pay off with all regions and businesses contributing to positive results. With top line growth, margin expansion and record cash flow, the last six months further solidified our long-term outlook, made possible thanks to the unique talent and engagement of our 200,000 colleagues worldwide.
Today, our commitment to the two strategic pillars of med-tech and smart eyewear is taking shape, with Stellest seeing exponential growth, the success of Ray-Ban Meta and Nuance Audio set to establish a new category in the market. Announced just last week, the acquisition of Heidelberg Engineering will give us a new foothold in the clinical ophthalmology space.
The third strategic pillar, our iconic brands, will make the first two more accessible, consumer-friendly and relevant. With new collections coming from all our house and licensed brands, including our first ever for Moncler, and the announced acquisition of Supreme, we are exactly what we need to be: a tech-driven and brand-rich company caring for and connecting with hundreds of millions of people globally.”
In the second quarter of the year, EssilorLuxottica confirmed the sound growth pace of the business it recorded in the first quarter. The Group’s revenue rose 5.2% at constant exchange rates1 (+3.8% at current exchange rates) to Euro 6,955 million, on top of a strong performance in the same period of last year (+8.0%) like in the first quarter. In the first semester, the Group’s revenue grew by 5.3% at constant exchange rates1 (+3.4% at current exchange rates) to Euro 13,290 million, in line with the long-term targets. The second quarter revenue performance was in continuity with the first quarter trends also in terms of the key growth drivers. The growth was quite balanced across the regions, categories and channels.
Geographically, all the regions rose high-single digit in the period, with the exception of slower North America. EMEA stood out again as the most powerful growth engine for the Group, with both the channels contributing and optical retail comparable-store sales3 up double digits, also thanks to the rising penetration of the subscription model. North America continued to be just low-single-digit positive, held back by still negative comparable-store sales3 at Sunglass Hut and negative trends with the ECPs not engaged in partner programs. In Asia-Pacific, Professional Solutions and Direct to Consumer equally contributed to the solid sales performance, with Stellest and the myopia management portfolio being the major driver. Latin America sound growth was based on slightly positive Brazil and Mexico and hyperinflationary Argentina.
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Price-mix played a key role in the second quarter of the year to sustain revenue growth, as the Group continued to deploy innovation in lenses and frames and leverage the mix as a driver, and at the same time implemented a single-digit increase to its price lists across the board.
The top line growth was well balanced also in terms of product categories, with vision care and sunglasses growing broadly at the same pace. As for the brands, in lenses Stellest was still the champion rising above 80%, while Varilux and Transitions progressed at mid-single digit pace; in frames, Ray-Ban posted a healthy high-single-digit growth driven by both traditional eyewear and smart glasses, while in license portfolio Prada was the best performing name, up in the high teens.
In terms of profitability, despite the persistence of a material inflation drag the Group managed to restart its margin expansion journey, consistent with its long-term targets. The adjusted gross profit amounted to Euro 8,541 million in the first semester, reaching 64.3% of revenue, 20 basis points higher than H1 2023 (or +40 basis points at constant exchange rates). The adjusted operating profit reached Euro 2,431 million in the first half, representing 18.3% of revenue, unchanged versus H1 2023, while at constant exchange rates1 the margin expanded by 50 basis points to 18.8% of revenue.
The adjusted Group net profit amounted to Euro 1,746 million in the first half, representing 13.1% of revenue, compared to 12.9% in H1 2023, a margin accretion of 20 basis points, while at constant exchange rates the margin expanded by 60 basis points.
Free cash flow amounted to Euro 971 million in the first six months of the year, compared to Euro 954 million in the same period of last year.
The Group ended the six months with Euro 2.16 billion in cash and cash equivalents and a net debt6 of Euro 9.76 billion (including Euro 3.51 billion lease liabilities).
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With regards to the Group’s sustainability journey with the “Eyes on the Planet” program, EssilorLuxottica has embraced sustainability across its entire ecosystem, including employees, suppliers, partners, and customers, with awareness campaigns and concrete actions that support five strategic pillars – Carbon, Circularity, World Sight, Inclusion and Ethics.
As part of its long-term goal to reduce the carbon footprint in its operations and value chain, the Company has recently submitted its near-term emission reduction targets for scopes 1, 2 and 3 to SBTi for validation.
Long-Term Outlook
The Company confirms its target of mid-single-digit annual revenue growth from 2022 to 2026 at constant exchange rates (based on 2021 pro forma revenue) and expects to achieve an adjusted operating profit as a percentage of revenue in the range of 19-20% by the end of that period.
Employee representatives appointed to the Board
Two board members, Ms. Margot Bard and Mr. Sébastien Brown, both employees of the Group, saw their mandate renewed for a three-year period by the Group Works Council to represent the employees at the Company’s Board. It will expire on July 2, 2027.
Conference Call
A conference call in English will be held today at 6:30 pm CEST. The meeting will be available live and may also be heard later here.
Forthcoming Investor Events
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- October 17, 2024: Q3 2024 Revenue
- November 12, 2024: J.P. Morgan Global Luxury & Brands Conference in Paris
- November 13, 2024: Bank of America Consumer & Retail Conference in Paris
