Full Year 2009 Results - Essilor · 2009 RESULTS PRESENTATION – Strategy and outlook. 2010: A...

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Full Year 2009 Results

Paris, 4th March 2010

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Highlights of 2009 Highlights of 2009

Financial resultsFinancial results

Strategy and outlookStrategy and outlook

3

2009 RESULTS PRESENTATION – Highlights of 2009

Remarkable performance

Revenue of €3,268m, up 6.3%

Operating profit up 8% to €594m, margin of 18.2%

Free cash flow of €390m, up 25%

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Distribution network enhanced on all regions27 bolt-on acquisitionsStrengthened positions in emerging marketsMarket share gains

Dynamism sustained

Innovation accelerated in all market segments

Numerous new product and services launches Increased R&D spend on sales and marketingFocus on high-end and mid-range segments

5


Expenditure controlledProductivity gainsOperational expenditure optimised

Increased efficiency

Production capacity redeployedFive large export laboratories coming increasingly on streamReduced investments thanks to optimisation of assets

6


Confidence in our future

Favourable long term trends in the optical market

Solid strategy at Essilor and reinforcement of our structural strengths

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Highlights of 2009Highlights of 2009

Financial results

Strategy and outlookStrategy and outlook

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3 074

282

40

3,268

2009

0.1% 2.6% 1.3%

2008 Organic growth

Bolt‐on

acquisitions

Currency

impact

+6.3%

Satisloh

70

2.3%

2009 RESULTS PRESENTATION – Financial results

2009 revenue: +6.3%

In €

millions

3,074

2.7 %

9

Published revenues in €m ‐

% growth at constant currency as published

1,310 1,356 1,331

9.2% 4.8% ‐0.5%

2007 2008 2009


France, Germany and Italy: good level of activity

United Kingdom and Spain: signs of a pick-up

Instruments return to growth in the Second Half

Eastern and Northern Europe still difficult, except Russia

Europe: -0.5%

10

1,3541,2531,198

+3.5%11.1%13.3%

2007 2008 2009


Business with independent eyecare professionals remains robust

Significant variation in activity from one distribution chain to another

North America: +3.5%



11

110127

134

15.6% 17.6% 8.3%

2007 2008 2009


Latin America: +8.3%

Brazil: first acquisitions

Mexico: a strong year



12


Asia-Oceania / Middle East-Africa: +12.8%

Japan: a still difficult market

Australia/New Zealand: an excellent year

Korea / Asean / China: growth remains strong

India: the star in terms of growth

287 302

345

18.3% 11.8% 12.8%

2007 2008 2009



13

29.632.1

35,5

8.5% 10.6%

2007 2008 2009


Middle East-Africa: promising markets


% growth in actual terms

First steps in the Emirates with acquisition of Amico and Ghanada in January 2010

Strong growth in South Africa with addition of Vision Optics in December 2009

14

ASIA‐OCEANIA

6

EUROPE5

LATIN AMERICA

1

UNITED STATES12

CANADA

1

…27 deals at the end of December

AFRICAMIDDLE EAST

2


Bolt-on acquisitions throughout the world…

15


Satisloh

Market share gains

Numerous synergy plans underway

Better-than-expected contribution to the group’s net result

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Dec 2008 Dec 2009 Change Dec 2009 restated*

ChangeIn € millions

Revenues 3,074 3,268 6.3% 3,268 6.3%

Contribution from operations** 551 594 7.9% 594 7.9%

% of revenue 17.9% 18.2% 18.2%

Operating profit 514 555 7.9% 555 7.9%

Profit attributableto equity holders

382 394 3.1% 420 9.9%

% of revenue 12.4% 12.1% 12.9%

Earnings per share (in €) 1.85 1.91 3.2% 2.03 10.0%

* Restated for provision iro

fiscal risks of €26.1m** Operating profit before compensation costs of share‐based payments, restructuring costs, other income and

expense and goodwill impairment.


Restated 2009 EPS up 10%

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Contribution margin rises to 18.2% -0.5% improvement in core business

17.9

‐0.3

18.2 18.2

Satislohimpact

corebusiness

Satislohimpact

Published margin

Published margin

corebusiness

2009

18.7

‐0.5

+0.5

2008

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In € millions 2008 2009* Change

Contribution from operations** 551.2 594.4 7.9%

Other income/costs ‐36.6 ‐39.2 7.1%

Operating profit 514.5 555.2 7.9%

Financial result ‐2.5 ‐11.2 NC

Income tax* ‐149.3 ‐142.1 ‐4.8%

Contribution from associates 26.1 26.0 ‐0.3%

Net attributable profit* 382.4 420.1 9.9%


Net attributable profit*

* Restated for provision iro

fiscal risks of €26.1m** Operating profit before compensation costs of share‐based payments, restructuring costs, other income and

expense and goodwill impairment

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In € millions 2008 2009

First time consolidation ‐2.2 ‐0.2

Restructuring/reorganisation costs ‐3.7 ‐11.4

Litigation and risk provisions ‐5.2 ‐4.7

Compensation costs of share-based paymentsand Employee Stock Ownership Plan discount

‐25 ‐21.8

Gains (losses) on asset disposals ‐0.6 ‐1.4

Other 0.1 0.3

Total ‐36.6 ‐39.2


Other income and expense

20In €

millions ‐

% of revenue


Capital expenditure (net of disposals)

174192

224

183

116

7.2 3.55.97.77.1

2005 2006 2007 2008 2009

21


Change in net consolidated inventory

In €

millions

365 371 394475 485.6

0

50

100

150

200

250

300

350

400

450

500

2005 2006 2007 2008 20094

4,5

5

5,5

6

6,5

7

7,5

8

Inventory Turnover

22

Operating cash flow(excl WCR)

+390

Net capital expenditure

WCR

Dividend

Net debt

Net financial investments

Share purchases

586

206

76

161

139

71

125


Free cash flow up 25%

153372

Capital increase

Bond conversion and other

Other

In €

millions

23


Financial position at 31/12/2009

In €

millions

‐54‐210

112‐93‐260

2,7382,366

2,1681,892

1,676

2005 2006 2007 2008 2009

Net Debt

Equity

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Shares outstanding, excluding treasury shares at 31/12/2008 207,013,917

• Issuance of new shares 6,045,100

On investment in the ESOP 662,646

Exercise of stock options in 2009 833,764

Conversion of the OCEANE bond 4,548,690

• Share buy-backs ‐2,179,698

Shares outstanding, excluding treasury shares at 31/12/2009 210,879,319


Capital: shares outstanding

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Proposed dividend 2009: +6.1%

96

113

129136

146

0.700.66

0.62

0.55

0.47

2005 2006 2007 2008 2009

Total Payout (€M)Net dividend per share (€)

33%34%

35%36%

37%

% Payout ratio (%)

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Highlights of 2009Highlights of 2009

Financial resultsFinancial results

Strategy and outlook

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2009 RESULTS PRESENTATION – Strategy and outlook

The optical market in 2010

A still significantly under-penetrated market

Emergence of a profitable mid-range segment

A highly fragmented industry

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1.6billion

2.4 billion

A significantly underA significantly under--penetrated marketpenetrated market


Four billion people in the world require vision correction… but only 1.6 billion correct their vision

29Emergence of a profitable midEmergence of a profitable mid--range segmentrange segment

150

150 / 200

200 million consumers pa


Increased spending power generates a profitable and fast growing mid-range segment, with discerning consumers

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Lens manufacturers

Distributors & laboratories

Optical distribution

Readersmanufacturers

Distributionof readers

Retail networks

1 billion Rx lenses 200 Million readers

A highly fragmented industryA highly fragmented industry


A global market dominated by local operators

Essilor 150 to 200small operators

200 to 300manufacturers

Essilor 1500 to 2000local operators

F G X

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Trading-up through

innovation

Conquering the mid-

range segment

Expanding the market

Acquisitions


Four growth opportunities

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150

150 / 200

200


Consolidate our positions in the high-end segment through innovation

million consumers pa

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Varilux

Crizal

TransitionsAirwear

Xperio

150million consumers pa


Consolidate our positions in the high-end segment through innovation

…

Taiwan

China

37

150

150 / 200

200


Conquer the mid-range segment via new products, new business models and by accelerating acquisitions


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Segmented offers

Competitive and differentiated offers

Bolt-on acquisitions

Multi-networks


Conquer the mid-range segment via new products, new business models and by accelerating acquisitions


150

150 / 200

United States

Italy

Brazil

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Stimulate demand to increase the size of the market

Trade-in Multi-pairs

500million consumers pa

Singapore

Thailand

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Operational efficiency

Rigorous management to underpin growth

Trading-up through

innovation

Conquering the mid-

range segment

Expanding the market

Acquisitions

45


Pursue productivity gains

Strategic reorientation of investments

Generate resources to fund growth

Develop competitive and profitable products in new segments and the mid-range

Operational efficiency as a means to invest and grow

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Assure a strong financial position

Maintain a high level of profitability

Increase cash flow

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2010: A year of acceleration

An important year for new product launches in the high-end and mid-range segments A year of geographic expansion, notably in China, India and Latin AmericaA year of accelerating bolt-on acquisitionsA year of integration for larger acquisitions (FGX, Signet Armorlite)A year of further productivity gains

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Thank you

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Full Year 2009 Results

Paris, 4th March 2010

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Full Year 2009 Results - Essilor · 2009 RESULTS PRESENTATION – Strategy and outlook. 2010: A...

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