Press Release:
Luxottica continues solid growth in first quarter of 2013
Net sales increased by 5.6% (at constant exchange rates1) to approximately Euro 1.9 billion with double-digit growth (up 17% at constant exchange rates1,6) in emerging markets
Milan, Italy, April 29, 2013 – The Board of Directors of Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), a leader in the design, manufacture and distribution of fashion, luxury and sports eyewear, met today and approved the consolidated results for the quarter ended March 31, 2013.
Operating performance for the first quarter of 2013
Luxottica’s strong growth continued into 2013 and the Group has a positive and optimistic outlook for its future performance. The first quarter of 2013 saw positive growth in terms of both net sales and profits and confirmed the Group’s expectations in terms of robust and continued growth, particularly in emerging markets (+17% at constant exchange rates1,6).
Net income for the first quarter of 2013 increased to Euro 159 million (+10.5%3) from adjusted net income3,4 of Euro 144 million reported in the first quarter of 2012. Net sales in the period reached approximately Euro 1.9 billion (+5.6% at constant exchange rates1), with double-digit growth in emerging markets (+17% at constant exchange rates1,6). The Group’s operating income for the period rose to Euro 275 million (+7.7%3).
“The first quarter has marked a strong, solid start to the year, sustained by all of our leading brands in all the geographic areas important to our company. The positive results in the first quarter of 2013 confirmed our expectations for the period and provide a strong basis for another year of growth. We have managed to improve on our record profits and net sales by focusing on the Group’s unique and specific assets and continuing to invest in high-potential, fast-growing markets”, commented Andrea Guerra, Chief Executive Officer of Luxottica.
“We achieved significant growth especially in emerging countries, where net sales increased by almost 20% at constant exchange rate1,6. In Brazil, where Luxottica net sales grew 30% at constant exchange rates1,6, the merger with Tecnol is now running smoothly, delivering significant benefits as a result of our dedicated focus during 2012. North America, our most important region, once again registered solid growth, after a few jitters in February and a slight pick-up in March, which has continued into April.
In Europe, we are performing at three different speeds: in Eastern Europe, growth has been very fast; in Continental Europe the results have exceeded expectations and are extremely satisfactory; and in Mediterranean Europe the business is going through a difficult patch, but Italy is keeping the pace thanks to the investments made by the Group.”
“Our brand portfolio is in excellent shape and it is expanding. Ray-Ban and Oakley continued to perform extremely well, retaining their titles as captains in the industry. During the first quarter 2013, in the premium and luxury segment, the licensing agreement with Armani Group became operational and we completed the merger with the iconic Alain Mikli brand, enriching the newly created Atelier Division. We are taking important steps in the development process that aims to make Luxottica the benchmark in an increasingly strategic market segment where we expect to see double-digit growth in 2013.”
“Looking forward to the next few months, we will continue to invest in our expansion. In particular, the emerging markets are expected to be one of the main drivers of growth, sustained by ongoing investments in people and brands, and by expanding the Retail Division via acquisitions and better penetration of existing channels, especially in Southeast Asia and Latin America.”
“The important achievements in the first quarter of the year are also the result of the work of all the people at Luxottica who have performed with commitment, competence and determination. Their commitment to quality and excellence allows us to look to the future with optimism and confidence.”
See Page 2 for more operating results
The Group
Net sales for the first quarter of 2013 were Euro 1,864 million, up 4.2% from the same period in 2012 (+5.6% at constant exchange rates1).
EBITDA for the first quarter of 2013 increased by 6.6% over adjusted EBITDA3,4 in the same period in 2012, reaching Euro 365 million. The EBITDA margin3,4 was therefore up from an adjusted 19.2%3,4 recorded in the first quarter of 2012 to 19.6% in the first quarter of 2013.
Operating income for the first quarter of 2013 amounted to Euro 275 million up 7.7% from adjusted operating income3,4 of Euro 255 million in the same period of 2012.
The Group’s operating margin therefore rose to 14.7% in the first quarter of 2013 from an adjusted operating margin3,4 of 14.3% in the first quarter of 2012.
Net income for the period was Euro 159 million, up by 10.5% from adjusted net income3,4 of Euro 144 million for the first quarter of 2012, corresponding to earnings per share (EPS) of Euro 0.34.
Net debt4 as of March 31, 2013 was Euro 1,816 million (Euro 1,662 million at December 31, 2012), and the ratio of net debt to EBITDA4 was 1.3x compared with a ratio of net debt to adjusted EBITDA3,4 of 1.2x at the end of 2012. During the first quarter of 2013, the Group invested approximately Euro 138 million in acquisitions.
Wholesale Division
Total sales for the Wholesale Division rose to Euro 781 million from Euro 727 million in the first quarter of 2012 (+7.5% at current exchange rates and +9.3% at constant exchange rates1).
The Wholesale Division’s operating income amounted to Euro 188 million, up by 9% compared with the Euro 173 million reported in the first quarter of 2012, which also was successful for the Division.
The operating margin rose to 24.1% from 23.8% in the first quarter of 2012.
Sales performance for the Wholesale Division in Luxottica’s primary geographic markets saw markedly positive results in emerging markets (approximately +19% at constant exchange rates1,6), North America (+9.4% at constant exchange rates1,6) and continental Europe (+9.2% at constant exchange rates1,6), especially in France, Germany and the Nordic countries.
Net sales in Eastern Europe increased by 19.8% at constant exchange rates1,6, while the markets in Mediterranean Europe felt more keenly the effects of the difficult macroeconomic environment.
In the first quarter of the year, the optical business saw robust and continuous double-digit growth, becoming one of the Group’s businesses with the greatest potential for growth, capitalizing on favorable international demographic and social trends.
Retail Division
Net sales for the Retail Division were Euro 1,083 million up from Euro 1,061 million in the first quarter of 2012 (+2% at current exchange rates and +3.1% at constant exchange rates1).
The Division’s operating income for the first quarter of 2013 amounted to Euro 132 million, up by 5.9% over the Euro 125 million in adjusted operating income3,4 recorded for the same period of 2012.
The operating margin for the quarter was 12.2% up from the adjusted operating margin3,4 of 11.8% in the first quarter of 2012.
The Retail Division in North America experienced a solid start to the year. Despite the fact that the month of February was slow in terms of traffic, the Division resumed its positive growth trend in March and this trend has continued into April.
Additionally, during the first quarter of 2013, Australia experienced excellent performance in both the specialized sun store chain (Sunglass Hut) and optical stores (OPSM), producing increased comparable store sales of 16.1% at Sunglass Hut and 9.6% at OPSM.
