After the controversy over the 190 million euro fraud that took place in an Essilor International plant in Thailand and the consequent resignation of the financial director of the French counterpart, Hilary Halpel, EssilorLuxottica lifts the veil on the 2019 accounts closed with revenues of 17,390 billion euros, up 7,4% compared to 2018 pro forma revenues (+4,4% at constant exchange rates).
The Useful Adjusted gross profit was 62,6% of sales, while adjusted operating profit was stable at 16,2% at €2.812 million. Adjusted net profit attributable to shareholders of the parent increased by 9,2% year-on-year to 1.938 million euros (+4,8% at constant exchange rates).
By virtue of the results achieved last year, a dividend of 2,23 euros per share. Shareholders will be able to choose whether to receive the coupon in cash or in newly issued shares.
“In his first year – he says Laurent Vacherot, Chief Executive Officer of Essilor – EssilorLuxottica posted a solid performance. The group has developed its mission by offering innovative products for all price ranges to customers and consumers around the world, generating profitable growth. All this has translated into a strong increase in turnover, cash flow and net profit, in line with the guidance”.
“The company – continues Vacherot – has also adopted a series of structural decisions in order to start the integration process and realize the synergies announced at the Capital Markets Day. Essilor, for its part, recorded a positive performance. The company has continued to leverage its innovation capabilities in eyecare and eyewear, proprietary digital platforms and the flexibility offered by its global network of interconnected factories and laboratories for ophthalmic lenses.
“In commenting on Luxottica's performance over the last year, there is much to be proud of both for the solid and positive results and for the objectives achieved: the digital transformation underway in the group, in particular, demonstrates how the work carried out in last five years is paying off,” he said Francesco Milleri, Vice-President and Chief Executive Officer of Luxottica.
Returning to the accounts, cash generation remained stable at 1,8 billion despite the impact of the Thai scandal recorded in the 2019 consolidated financial statements and equal to 185 million euros. In fact, we recall that “On December 30, 2019, the company announced that it had discovered fraudulent financial activity at an Essilor plant in Thailand. Since that time, Essilor International has implemented a wide range of corrective measures under the supervision of the board of directors of EssilorLuxottica. By virtue of what happened, the company has appointed David Wielemans co-CFO together with Stefano Grassi in place of Harper. Ariel Bauer has instead been appointed co-Head Investor Relations together with Giorgio Iannella, replacing Véronique Gillet. As for the role of managing director, Essilux lets it be known that the search continues. The company is also evaluating internal candidates and the decision will be made by the end of 2020.
Due to the coronavirus, in 2020 the group expects "a lower growth in revenues in the first half compared to the annual trend, with a recovery in the second half of the year". In detail, revenues for the current year are expected to rise by 3- 5%. “The current epidemic has a negative impact on the company's activities in China, which account for about 5% of turnover”, but from the point of view of production, “warehouse inventories are sufficient to satisfy requests for several weeks”, he writes the group.
