CHARENTON, France, March 13, 2002 (PRIMEZONE) -- The Board of Directors of Essilor, the world leader in ophthalmic optical products, today announced the audited financial results for the year ended December 31, 2001. They are slightly better than the provisional results released last January 31.
(euro millions except EPS) 2001 2000 Change Sales 2,070.4 1,978.4 4.6% Operating income 310.6 274.1 13.3% Operating margin 15% 13.9% -- Income before tax 233.3 223.3 4.5% Net income after minority interests 142.6 135.4 5.3% Earnings per share (euro) 1.43 1.29 10.9%
The 2001 results confirm, once again, Essilor's solid position, while demonstrating that demand remains robust in the global optics market. Despite a challenging economic and political environment in certain parts of the world, business was strong throughout the year, as shown by the company's excellent performance in the second half.
The results also demonstrate the effectiveness of the company's strategic focus on developing high technology lenses and diversifying its geographic base. This strategy has enabled Essilor to steadily gain new market share in all its operating regions.
Operating highlights of the year included:
-- Strong growth in operating income in the United States, led by
productivity gains in the manufacturing and distribution
businesses, as well as by the margins achieved at the U.S.
laboratories. A reorganization and restructuring plan was
undertaken in 2001, and will continue in coming years.
-- In Japan, ramp-up of the Nikon Essilor joint venture, which
reported better-than-expected earnings growth for the year.
-- Very good results from operations in Europe, in line with
prior-year performance.
-- Confirmation of volume growth and of the company's solid positions
in emerging markets, like China and India.
These factors helped to widen operating margin by 1.1 point to a record 15%.
During the year, Essilor also demonstrated its ability to quickly pay down debt, reducing the debt-to-equity ratio to 27% from 44% the year before.
In all, 2001 provided further proof of both the power of Essilor's strategic vision and the strength of its global operations.
The Nikon Essilor Joint Venture
2001 saw the full ramp-up of operations at Nikon Essilor, the 50/50 joint venture between Essilor and Japan's Nikon Corporation. The joint venture does most of its business in Japan, where its sales growth outpaced the market. The strategy introduced in 2000 was successfully pursued in 2001, with a focus on the launch of several new products, including the Nikon(r) Presio-i progressive lens, whose 1.74 index is the world's highest in a plastic lens, and the 1.67-index Varilux(r) Panamic(r) lens.
Outside Japan, the Nikon(r) brand, which is now distributed in Europe, the United States and Asia, enjoyed strong growth in business, led by demand for the high index 1.67 and 1.74 lenses.
The combination of these factors enabled the joint venture to deliver strong earnings much earlier than expected.
Financial Highlights
Operating income increased by 13.3% to euro 310.6 million, lifting operating margin to a record 15%. The strong growth was primarily attributable to:
-- Productivity gains at all levels in the production plants and
distribution subsidiaries, as well as the increase in sales of
higher value-added products.
-- The improved business performance of U.S. operations.
-- To a lesser extent, the excellent business performance of the
Nikon Essilor joint venture.
Non-operating expense, in an amount of euro 29 million, mainly includes:
-- Capital losses on the sale of Essilor's 44% interest in Logo
(euro 11 million) and the disposal of the contact lens business
(euro 3 million).
-- Costs related to the reorganization plans that have helped improve
profitability in the United States and Europe (approximately
euro 7 million).
-- Start-up expenses for Vision Web in the United States
(euro 8 million).
Capital expenditure declined to euro 120.1 million from the relatively high levels of the past two years.
Income before tax rose 4.5% to euro 233.3 million, reflecting the year's higher non-operating expense, as well as the increase in interest expense related to the level of debt at the beginning of the year.
At December 31, 2000, net debt had risen to 44% of shareholders' equity following the acquisition from Compagnie de Saint-Gobain of Essilor shares representing 7% of issued capital. In 2001, the 4.8% increase in cash flow, to euro 286.4 million, and the careful management of working capital enabled the company to reduce net debt by euro 145 million, to euro 321 million and decrease the net debt-to-equity ratio to 27% by year-end.
Net income after minority interests increased by 5.3% to euro 142.6 million. Earnings per share rose by a faster 10.9%, to euro 1.43, due to the cancellation during the year of shares representing 6% of the issued capital.
Ordinary and Extraordinary Shareholders' Meeting
The Ordinary and Extraordinary Shareholders Meeting has been reconvened for:
Monday May 13, 2002, at 4:00 p.m.
Pavillon Gabriel
5, avenue Gabriel
75008 Paris
The Board of Directors will ask shareholders to increase the dividend before tax credit to euro 0.41 per share of common stock, for total revenue of euro 0.61 per share including tax credit. The dividend will be paid from May 28, 2002.
Outlook For 2002
Essilor is maintaining its strategic course in 2002 and expects sales to increase by 5 to 6% during the year, based on constant scope of consolidation and exchange rates, and assuming an economic and competitive environment similar to last year's.
The company should benefit from the introduction of new products, including the Next Generation Transitions(r) lens.
In addition, now that its financing capacity has been restored, the company will be attentive to growth opportunities, notably through acquisitions.
Lastly, the productivity enhancement program will be pursued, with the goal of improving the earnings performance of the operating businesses.
Backed by its solid fundamentals, product strategy and coverage of the global marketplace, Essilor has entered 2002 with renewed confidence.
Essilor International is the world leader in ophthalmic optical products, offering a wide range of lenses under the flagship Varilux(r), Crizal(r), Airwear(r) and Essilor brands to correct myopia, hyperopia, presbyopia and astigmatism. Essilor operates worldwide through 17 production centers, 160 lens finishing laboratories and local distribution networks. The Essilor share trades on the Euronext Paris market (Euroclear code 12166; Reuters: ESSI.PA; Bloomberg: EF FP).