Luxottica Group S.p.A. reported net sales reached 1.212 billion
($1.54 billion) in third quarter ended Sept. 30, 2008, up 12.8% at constant exchange rates
from the same period of the previous year. Pro forma net sales, on the
other hand, were down 2.7% at constant exchange rates.
Good sales performance by Oakley across all markets, together with
the ongoing success of the Ray-Ban brand, enabled the Group to weather
the effect of the international situation. Sales to third parties in
this segment rose 37.5% to 429.8 million ($547 million) in third
quarter 2008 from 312.7 million ($398.6 million) a year ago. Pro forma
sales to third parties, on the other hand, fell 0.7% at constant rates.
Regarding sales on a geographical basis, Luxottica saw very good
results in continental Europe and emerging economies, with marked
growth in Brazil, India and Southeast Asia, while sales were down in
certain Mediterranean countries of Europe and in Japan.
The wholesale division, which includes Oakley, reported operating
income of 105.1 million ($134 million), up 2.8%. The pro forma
operating margin dropped to 20.1% in third quarter 2008 from 22.8% in
third quarter 2007. The change reflects charges relating to the
integration of Oakley (8 million ($10.1 million) for the quarter) and
exchange rates, which reduced the division’s operating margin by 130bps.
On the operating front, EBITDA rose 3.1% to 258.6 million
($329.6 million). On a pro forma basis, the EBITDA margin decreased to
21.3% in third quarter 2008 from 21.7% in third quarter 2007, down 40
basis points.
At the Group level, operating income for third quarter 2008
amounted to 195.1 million ($248 million), in line with the figure for
the same period of the previous year. On a pro forma basis, the Group’s
operating margin decreased to 16.1% in third quarter 2008 as compared
to 16.4% in third quarter 2007, down 30 basis points.
Net income for third quarter 2008 amounted to 104.6 million
($133.1 million), down 7% from the previous year. The reduction in net
income was almost entirely due to higher financial charges following
the Oakley merger and to exchange rates.
In the third quarter, the Group continued to grow in both
market share and sales volume despite a particularly challenging
economic environment that deteriorated steadily over the period.
Further, there was significant depreciation in the major currencies in
each of our key markets (including especially the US dollar) against
the euro during the period.
“We are in a particularly difficult year,” commented Luxottica Group CEO Andrea Guerra.
Forecasts for 2008
The Group anticipates that, for the first time in 2008, pro
forma operating margin should improve in the fourth quarter when
compared to the same period last year. The flexibility and
effectiveness of the Group’s business model should enable it to
continue to produce solid cash flows, which, for the full year 2008,
are expected to be 360 million to 380 million.
According to current estimates, Luxottica now expects to achieve an EPS for 2008 between 0.96 and 0.98.
Third quarter 2008(1)
(millions of euro,
except per share
amounts) 3Q08 3Q07 % Change
Net Sales 1,212.0 1,151.0 +5.3 % (+12.8% at constant
exchange rates)
EBITDA(3) 258.6 250.9 +3.1 %
Operating income 195.1 195.0 0 %
Net income 104.6 112.4 -7.0 %
EPS (in Euro) 0.23 0.25 -7.2 %
- Before trademark
amortization(3) 0.25 0.26 -7.4 %
EPS (in US Dollars) 0.34 0.34 +1.7 %
- Before trademark
amortization(3) 0.37 0.36 +1.5 %
