2011 Results - Essilor · 2016. 11. 24. · 2011 Revenue by Region and Division 12 Reported revenue...
Transcript of 2011 Results - Essilor · 2016. 11. 24. · 2011 Revenue by Region and Division 12 Reported revenue...
2011 Results
March 1st, 2012
2011 Results
Our Focus Today
2011 Results2
2011 Highlights
Financial Results
Market and Strategy
Outlook
Strong and Balanced Growth
3
+5.0%
+9.7%
+2.3%
+2.5%
Like-for-like
Bolt-on
acquisitions
Strategic
acquisitions
Growth
excluding
currency
effect
2010
Revenue
Developed
Markets
Fast Growing
Markets
2011
Revenue
148
135
+7.3%*
(in €m)
* Like-for-like and
bolt-on acquisitions growth
Organic and external
growth driving
performance
All regions
contributed to
growth
2011 Revenue: €4,190m
2011 Results
2011 Results
Increased Exposure to Fast Growing Markets
4
11%
12.7%
14.6%
2009
2010
2011
2011 Results
Capturing Full Potential in Developed Markets
> 10%Europe* – USA
Crizal Sales Growth
5
* Countries where Essilor has developed a TV Ad campaign in 2011
Growing the Mid-Range through Acquisitionsand New Products
2011 Results
FutureXShamir Wanxin
6
Dynamic Optical Industry Investing in New Technologies
2011 Results
SP-200Compact sputter coater for small
laboratories
VFT-orbitFully automated generator
for all lens formats+ 20.7%*
Equipment Sales
1200-DLFVacuum box coating system for
AR coating
7
* Growth excluding currency effect
FGXI Ahead of Plan
2011 Results8
Delivering Results over the Long Term
Contribution from operations €748m – up 6.1%
› Contribution margin 17.9% of revenue
Earnings per share €2.44 – up 10.7%
Cash flow €723m – up 7.0%
9
* Cash flow = Operating cash flow excluding change in WCR
2011 Results
2011 Results
Our Focus Today
2011 Results10
2011 Highlights
Financial Results
Market and Strategy
Outlook
3,892
193
90
96 -81
4,190
2010 Revenue Organic growth
Bolt-on acquisitions
Strategic acquisitions
Currency effect
2011 Revenue
Revenue Up 7.7% at €4,190m
11
+5.0%
+2.3%
+2.5% -2.1%
+7.3%
+9.7% at constant exchange rates
In € millions
Q1: FGXI
+ Signet Armorlite
H2: Shamir2011 Results
2011 Revenue by Region and Division
12
Reported revenue in € millions
Growth excluding currency effect and strategic acquisitions2011 2010 % change
Optical Lenses and Instruments 3,796 3,551 +6.8%
Europe 1,471 1,402 +2.2%
North America 1,519 1,505 +4.6%
Asia-Oceania/Middle East-Africa 556 450 +20.0%
Latin America 249 194 +26.8%
Equipment 185 154 +21.9%
Readers 209 187 +4.5%
TOTAL 4,190 3,892 +7.3%
2011 Results
Quarterly Revenue Growth
13
+7.3%+6.7% +6.7%
+8.5%
+7.3%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011
Like-for-like growth and bolt-on acquisitions
2011 Results
Q4 Revenue Up 11.1% at Constant Exchange Rates
Strong organic growth: +6.4%
› Ramp up of large contracts (LensCrafters, Boots, NVI, …)
› Successful launch of Optifog
› Temporary additional sales
› Continued momentum in Equipments sales
› Underlying dynamism of optical market
› Inventory decrease in Readers
Robust contribution from acquisitions
› Shamir off to a good start
› 14 new partnerships in both developed and fast-growing markets
› Acquisition of Stylemark
142011 Results
Contribution from All Regions…
Robust growth in each channel
Crizal boosted by national TV campaigns
Ramp up of contracts with large chains
15
North America
€1,519m
Reported revenue / Growth excluding currency effect and strategic acquisitions
Europe
€1,471m
Latin America
€249m
Asia-Oceania/Middle
East-Africa
€556m
€3,796m
Optical lenses and
instruments
+4.6% o/w +3.8% like-for-like
+3.5% o/w +1.4% like-for-like
Persistent volatility across countries
Effective strategy in the mid-range
Promising launch of Optifog
+2.2% o/w +1.9% like-for-like
+2.3% o/w +0.4% like-for-like
Strong product mix improvement
Active partnership strategy
New subsidiary in Columbia
+26.8%
+22.6%
Very good year in Japan and Australia
Acceleration in China
Expansion in Morocco
+20.0%
+15.1%
Increased pricing power of innovation
Robust volume growth
Market share gains
+6.8%
+5.0%
2011/10 2010/09 2009/08
+3.5% o/w -0.4% like-for-like
-0.5% o/w -2.7% like-for-like
+8.3%
+12.8%
+2.8%
2011 Results
… and Business Segments
Digital surfacing machines
Solutions for key accounts
Deployment in Latin America
16
Equipment
€185m
Reported revenue / Growth excluding currency effect and strategic acquisitions
Readers
€209m
+21.9%
+38.0%
Success of new products
Expansion in Europe and Latam
Acquisition of Stylemark
+4.5%
+6.9%
2011/10 2010/09 2009/08
-7.0%
2011 Results
Bolt-on Acquisitions:
27 Transactions Representing €169m in Full-Year Revenue
17
Canada
1
United States
3
Latin America
6
Africa - Middle East
3
Europe
1
Asia
6
Oceania
1
Equipment
2
Readers
3
Russia
1
2011 Results
Strategic Acquisitions:
StyleMark, a US leader in Readers and Sunglasses
18
2011 sales: ~ USD 135 m
Consolidated since January 1st, 2012
340 employees
More than 30 million sunglasses and
readers sold in nearly 30,000 retail
outlets
* Based on current estimates
Key figures
Impact on
Essilor EPS*
Neutral to 2012 EPS before PPA
Accretive to 2013 EPS including PPA
Complementary to FGXI
Channel Distribution
A large portfolio
of consumer brands
2011 Results
Strategic Acquisitions:
Shamir, a Growing Leader in the Mid-Range Market
19
Consolidated since July 1st, 2011
› H2 sales: USD 94 m, up 11.5% like-for-like
(2011 sales: ~USD 190 m)
› H2 2011 contribution margin: 14.5% before PPA
› Presence in 14 countries
Plans for Development in motion
› Acquisition plan strengthened
› Development of Shamir products through Essilor
networks
› Cost improvement through Group sourcing
Impact on Essilor EPS:
› Accretive in 2012
2011 Results
Revenue in Fast Growing Markets
Up 25.6% at Constant Currency
20
14.6%
Africa
Middle East
+8.3%
India
+28.9%
China
+66.4%
Russia
+10.5%
ASEAN
+10.5%Latin America
+25.0%
*Fast growing markets include China, India, ASEAN, Korea, HK,
Taiwan, Africa, the Middle East, Russia and Latin America
€612m
North Asia
+19.0%
2011 Results
In € millions 2011 2010 % change
Revenue 4,190 3,892 +7.7%
Contribution from operations*
% of revenue
748
17.9%
705
18.1%
+6.1%
Operating profit 683 618 +10.4%
Profit attributable to equity holder
% of revenue
506
12.1%
462
11.9%
+9.4%
Earnings per share (in €) 2.44 2.20 +10.7%
Earnings Per Share Up 10.7%
21
* Operating profit before compensation costs of share-based payments, restructuring costs, other income and
expense and goodwill impairment
2011 Results
Impact of PPA and Acquisition Costs on Profitability
22
In € millions, as reported 2011 2010 2009 2008
Revenue 4,190 3,892 3,268 3,074
PPA -22.2 -18.4 -12.3 -7.5
Bolt-on acquisition costs -3.9 -6.6 0* 0*
Impact on contribution margin -60 bp -60 bp -40 bp -20 bp
Strategic acquisition costs -7.5 -6.5 0* 0*
PPA and all acquisition costs -33.6 -31.5 -12.3 -7.5
* IFRS 3 Revised has applied since 2010
2011 Results
In € millions 2011 2010 % change
Contribution from operations* 748 705 +6.1%
Other income/costs -65.1 -86.4
o/w Restructuring costs -22.6 -37.9
o/w “Share-based payments” related costs -23.2 -21.7
o/w Strategic acquisitions costs -7.5 -6.5
Operating profit 683 618 +10.4%
Financial result -13.4 -10.8
Income tax
Effective tax rate
-179.4
26.8%
-167.4
27.5%
Contribution from associates 27.9 31.7
o/w Transitions Group 27.9 28.4
o/w Sperian 0 3.3
Profit attributable to equity holder 506 462 +9.4%
Profit Attributable to Equity Holder
23
* Operating profit before compensation costs of share-based payments, restructuring costs, other income and expense
and goodwill impairment
2011 Results
18.1%
+0.3% 18.4% -0.2%-0.3%
17.9%
2010 reported
Operating leverage on 2010
business base
2011 before bolt-on and strategic acquisitions
Bolt-on acquisitions
Strategic acquisitions
2011 reported
Improved Contribution from Core Business
while Increasing Marketing Expenditures
24
As a % of revenue
Q1: FGXI
+ Signet Armorlite
H2: Shamir
€40m Increase
in Marketing
& Sales
2011 Results
Optimized Capex to Support Growth
25
7.1%7.7%
5.9%
3.5%3.2%
4.6%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2006 2007 2008 2009 2010 2011
Capital expenditure net of disposals in € millions and in % of revenue
192
224
183
116124
192
Additional capacity
Contracts with key accounts
Innovation and Technology Centers
2011 Results
6
148
434
176
205
51
Cash Flow Up 7%
210
83
723
26
148
430
175
205
56
Operating cash flow
(excl. Δ WCR)
Capital increase
Other
Reported change in net debt
Capex
Δ WCR
Dividends
Net financial
investments
Share buybacks
+463
Cross-currency swap
In € millions
2011 Results
Net Gearing below 15%
27
In € millions
* Adjusted for acquisition-related costs in accordance with IFRS 3R
- 210 - 260112
-93
296506
1,8922,168
2,366
2,735
3,044
3,458
2006 2007 2008 2009* 2010 2011
Net debt Equity
0.6 x
EBITDA
2011 Results
Diversified and Committed Financing
US Private Placement: a new source of financing in 2012
› USD 300 million
› 5/7 years bullet
› More than 5 times oversubscribed by 17 leading investors
On-going Commercial Paper program
Approximately €1.5 billion of Committed credit lines (€ and $)
Available cash
28
A Strong Capacity to Fund our Development
2011 Results
Steady Growth in Dividend Per Share:
Average Annual Growth Rate of 9.1% since 2006
29
113129
137147
172 1770.55
0.62
0.66
0.70
0.830.85*
2006 2007 2008 2009 2010 2011
Total payout (€m) Dividend per share (€)
* Submitted to shareholder approval at the May 11, 2012 Annual Meeting
2011 Results
A New Stage in our Joint-Venture’s Development
Nikon-Essilor & Essilor Korea: 10 years of success
Shared commitment to driving faster growth for both companies
Full consolidation in 2012
Expected impacts in 2012:
› On the basis of 2011 accounts, the estimated additional revenue
would represent 2 points of growth
302011 Results
Our Focus Today
2011 Results31
2011 Highlights
Financial Results
Market and Strategy
Outlook
32
Global Optical Market:
Long-term Structural Growth
A large and growing market,
still significantly underpenetrated
Fast growing markets driving volume growth
Value growth boosted by demand for better vision
A highly fragmented industry led by local operators
Poor vision: a global economic concern
2011 Results
A Large and Growing Market,
Still Significantly Underpenetrated
2011 Results
7 billion people in the world
4.2 billion people (60%) require vision correction
2.5billion
Not corrected
33
Presbyopes growth rate: 2-3%
Myopic growth rate: 4-6%
1.7billion
Corrected
Fast Growing Markets Driving Volume Growth
2011 Results
Fast
Growing
Markets
Developed
Markets
Global market growing at 3-4%
+6-8% +1-2%
35
12580
20
120
190
570 millionconsumers per annum
34
Value Growth Boosted by Demand for Better Visionin Every Segment
2011 Results
Category growth Category segmentation
Progressive
Bifocals
Single
vision
Varilux Ipseo
Varilux Comfort
Varilux Liberty
Varilux Physio
Value creation in the presbyopes segment
Bett
er
vis
ion
Geographic mix
Pri
ce
pre
miu
m
35
3% 11%
23%
27%30%
36%
India
Gro
wth
po
ten
tia
l
Italy Brazil France CanadaUSA
A Highly Fragmented Industry, Led by Local Operators
2011 Results36
Sources: Essilor estimate, 2010 Infomarket, VisionWatch 2010
Essilor
Essilor G
X
Lens
Manufacturers
Wholesalers
& Laboratories
Optical
Retail
Readers
Manufacturers
Readers
Wholesalers
Retail
Networks
150 to 200Small operators
1,500 to 2,000Local operators
1.1 Billion Rx lenses
220 Million Readers (pairs)
Poor Vision: a Global Economic Concern
2011 Results
Workplace Elderly
Sources: World Health Organization, BCG
Education
37
810 million: Children with poor vision encountering problem at school
1.1 billion: Workers with poor vision having productivity or safety issues
3.2 million: People blinded by UV exposure every year
» $270bn: Global economic productivity loss due to poor vision
A Strategy Serving Essilor’s Mission: Improving Vision Worldwide
38
Operational and management efficiency
Products and
Services
INNOVATE
Corporate and social responsibility
Top & Mid-
range markets
DEVELOP
Acquisitions &
Partnerships
GROW
Demand
for Vision
Improvement
STIMULATE
2011 Results
2011 Results39
Consolidate leadership in the high-end
through innovation
Strengthen positions
in mid-range markets
2008-2011: Building Momentum for Sustainable Growth
2008-2011: Building Momentum for Sustainable Growth
2011 Results
Expand in two new
growth segments
Capture leading positions
in key new markets
40
2011 Results41
Gaining market shareNew management organization
to support growth
2008-2011: Building Momentum for Sustainable Growth
Volume market share
31%
26%
Revenue
Contribution from operations
Earnings per share
Cash flow*
2011 Results
+10.9% CAGR
+10.7% CAGR
+9.7% CAGR
+9.0% CAGR
42
2008-2011: Building Momentum for Sustainable Growth
* Cash flow = Operating cash flow excluding change in WCR
A Stronger Essilor Entering 2012
2011 Results43
WIDENING
THE LEAD
Geographies
New growth
segments
Market
segmentation
Supply chain
People
Innovation
Maintaining focus on Developed Countries while
increasing investments in Fast Growing Markets
Multi-networks
Brands
Demand stimulation:
“Think About Your Eyes”
Integrated business solutions
2011 Results
Strengthening Geographical Presenceand Growing Market Share
Acquisitions & partnerships
Products & services
Premium brands
Partnerships with local market leaders
Expand presence in Africa,
Middle East, Latin America, …
Dedicated organization
44
Geographies Supply chain People InnovationMarket segmentation New Growth segments
2011 Results
Geographies Supply chain People InnovationMarket segmentation New growth segments
45
€612m
€1,500m
2011
2015
Fast Growing Markets: our Ambition
2011 Results
Increasing our Reach in Fast Growing Markets
46
Geographies Supply chain People InnovationMarket segmentation New growth segments
2011 Results47
Geographies Supply chain People InnovationMarket segmentation New growth segments
Deploying a Multi-Network Strategy in Developed Markets
2011 Results
Building Growth and Value in Every Market Segment
High-end Mid-range
Upgrading and innovating at every price point
Partnering with profitable local leaders with loyal customer base
Building on global brands:
Varilux, Crizal, Xperio, Transitions, Nikon, Optifog, etc.
Introducing local brands for differentiated products
48
Geographies Supply chain People InnovationMarket segmentation New growth segments
Leveraging Business in Two New Growth Segments
2011 Results
Global growth potential
Readers and Sunglasses
Closer to the consumer
New distribution channels
Rapid deployment of new technologies
More efficient process
Long-term customer base
New business models
Geographies Supply chain People InnovationMarket segmentation New growth segments
53
Satisloh & Equipment FGX International
2011 Results
Strengthening our Supply Chain to Deliver A Unique and Reliable Service
19 manufacturing plants producing 350 million lenses
6 export laboratories serving 20% of Rx needs
A network of 390 local prescription laboratories serving 400,000
optical stores worldwide
Worldwide integrated electronic ordering system powered by
From manufacturing To customers
Geographies Supply chain People InnovationMarket segmentation New growth segments
57
2011 Results
A Motivated and Highly Federated Workforce...
Geographies Supply chain People InnovationMarket segmentation New Growth segments
58
A unique
entrepreneurial
model
Successful record
of integrating new
partnerships
acquisitions
Broad-based
employee
shareholding
program
Invest in talented
people
Internationalization
and diversity
to address an
expanding, complex
environment
A corporate culture deployed through the “Essilor Principles”
Improve the life of the 4.2 billion people
requiring visual correction worldwide
2011 Results
… With a Strong Commitment to the Essilor Mission
59
Geographies Supply chain People InnovationMarket segmentation New growth segments
Continuing to Innovate
New technologies driving an increasing number of new segmented
products and services
New value drivers: Personalization, Customization, PolarRx, Optifog, UV
2011 Results
Geographies Supply chain People InnovationMarket segmentation New growth segments
OBM™
Products and Services
60
UV Protection For Every Eye
Creating a new standard in
eye health protection
A breakthrough innovation from Essilor
Geographies Supply chain People InnovationMarket segmentation New growth segments
2011 Results61
UV Light: a Major Hazard for the Eyes and the Skin
2011 Results62
20 million eye surgery procedures
every year
90% of skin cancer above the neck
with 5-10% on the eyelids*
FACT: UV light exposure is a major eye ageing cause
* Myers M, Gurwood AS. Periocular malignancies and primary eye care. Optometry.2011
UV Protection: Needed All Year Long, Everywhere
> 40%
Calculation based on urban workers in north hemisphere
Indoor low UV emission from fluo-compact light bulb
500
5 000
25 000
100 000
~7%
5%
30%
58%
UV qty (Lx) UV qty per year
We receive 40% of the UV light when not aware of UV exposure
2011 Results63
All Good Quality Materials Block UV Transmission
* 95% UV protection for 1.5 index; 100% UV protection for other materials
First level of UV exposure comes from the front of the lens
And lens materials cut 95%* to 100% of the front UV rays
Visible light
UV light
642011 Results
But Danger Comes from the Back of the Lens!
* % of total UV exposure received by eyes without any protection
Biggest remaining UV exposure comes from
the back & sides to hit rear lens' surface
While UV reflected in the eye can reach up to 50% of total exposure*
UNSOLVED PROBLEM:
HOW BRING TRANSPARENCY AND PROTECTION?
Visible light
UV light
652011 Results
Ultra Protection Against Ultraviolet
Introducing Broad Spectrum technology
Virtually eliminating UV reflection into the eyes while maintaining
a premium transparency of the lens.
TECHNOLOGY
COVERED
BY AN INTERNATIONAL
PATENT APPLICATION
662011 Results
An Exclusive Backside UV Protector
2011 Results67
BACKFRONT
SMUDGE & WATER REPELLENCE
DUST REPELLENCE
AR EFFICIENCY
SCRATCH-RESISTANCE
SMUDGE & WATER REPELLENCE
DUST REPELLENCE
SCRATCH-RESISTANCE
LENS
AR EFFICIENCY
BROAD SPECTRUM
TECHNOLOGY
NEW
Front And Back UV Virtually Eliminated!
Front side: lens materials cut 95%* to 100% of the front UV rays
Visible light
UV light
THE RESULT: BETTER UV PROTECTION
UP TO 10 TIMES BETTER THAN EXISTING LENSES
* 95% UV protection for 1.5 index; 100% UV protection for other materials
682011 Results
Broadspectrum Technology
First backside UV protection on the market
7 years of R&D
An exclusive Essilor patented technology
Compatible with installed AR equipments
692011 Results
of ECPs are interested by an AR
treatment increasing protection
against UV
Source: Ipsos International Survey – 564 eye care professionals interviewed – 7 countries – 2010
702011 Results
A Very Large Long Term Value Potential
500 million AR clear lenses
Opportunity to accelerate AR market growth
800 million Sun lenses
712011 Results
A new Protection Index to
educate the market and
differentiate products
722011 Results
Introducing the Eye-Sun Protection Factor
A new index developed by Essilor,
endorsed by independent 3rd-party,
certifying the global UV protection of a lens
732011 Results
Why Creating the E-SPF Index?
No relevant index today
Existing “100% UV protection” only integrates UV cut in transmission
Drive awareness on UV dangers
Help choosing the right protection for ECPs and consumers*
Use analogy with sun cream SPF index for a simplified message
* Over 90% of consumers recognized the utility of a sun protection factor for eyewear
742011 Results
E-SPF: the New UV Protection Index
Lens
Lens No
-Irradiance
IrradianceSPFE
Intrinsic properties
of the lens material and antireflective stacks
1500
1
UVUV RT
*
* direct eye exposure depending on external factors (wearer's morphology, frame shape, position
of wear....) is not integrated in the formula of E-SPF
%
%
Front side UV exposureUV radiation transmitted through
the lens when the sun is in front of
the wearer
Back & Sides UV exposureUV radiation reflected from the back of
the lens when the sun is behind the
wearer
E-SPF measures endorsed by Dr. K Citek, OD, PhD, Professor of Optometry, Forest Grove, Oregon, USA,
Method of measurement of UV reflection (Ruv) technically endorsed by Fraunhofer/IOF (Germany)
752011 Results
The Higher the E-SPF, the Better the UV Protection
E-SPF 2 E-SPF 5 E-SPF 10 E-SPF 25 E-SPF 50+
Clear Lens
Sunwear
762011 Results
2012: Global Launch of Crizal UV
The best E-SPF of the market
The beginning of a new journey for
The first step in roll out of best UV protection as standard in
optics
772011 Results
Crizal UV: Best Everyday UV Protection
E-SPF values*
Crizal Forte UV
Competitor A
Competitor B
Competitor C
Crizal Sun UV
Sun lenses
Clear lenses
* for all lenses materials except plastic 1.5 index
25
3
5
5
50+
782011 Results
Performance Upgrade Justifies a Price Premium
Premium
AR efficiency
Premium
Smudge
resistance
Premium
Scratch
resistance
Smudge
resistance
Dust repellence
Scratch
resistance
AR efficiency
Scratch
resistance
AR efficiency
Unique
Water
repellence
200920061992
Smudge
resistance
Scratch
resistance
AR efficiency
2003
Dust repellence
Premium
AR efficiency
Premium
Smudge
resistance
Premium
Scratch
resistance
Premium
dust repellence
Unique
Water
repellence
2012
Best
UV protection
Water
Water
792011 Results
Our focus today
2011 Results82
2011 Highlights
Financial Results
Market and Strategy
Outlook
Outlook for 2012
Total Revenue Growth: 12% to 15% at constant exchange rates
(including like-for-like and bolt-on acquisitions at 6% to 9%)
Contribution from operations:
maintain current high level of profitability(excluding strategic acquisitions)
832011 Results
Thank you