PARIS, Sept. 12, 2001 (PRIMEZONE) -- Essilor International (Paris Stock Exchange:EF)
in EUR millions June 30, 2001 June 30, 2000 % change Sales 1,046.3 978.2 7.0% Operating income 154.9* 137.4* 12.7% Pretax income 116.3 112.0 3.8% Net income after minority interests 69.2 69.3 Earnings per share E6.97 E6.58 5.9%
* Costs related to VisionWeb are recorded in non-operating expense, as was the case at December 31, 2000.
With sales increasing 7%, despite the disposal of the contact lens business, Essilor's performance in first-half 2001 underscored its ability to withstand the global economic slowdown and to outpace market growth around the world.
Interim results validate the strategy of focusing on fast-growing, higher valued-added corrective lenses, in particular the Airwear(r) polycarbonate lens, the Varilux(r) Panamic(r) progressive lens and the Crizal(r) lens.
SOLID SALES GROWTH IN ALL MAJOR MARKETS
Sales rose 7% to EUR 1,046.3 million in the first six months of 2001. Excluding a 2.4% currency effect, growth on a like-for-like basis was 4.9%. Changes in the scope of consolidation had no significant impact (-0.3%), as the disposal of the contact lens business in early 2001 was offset by the first-time consolidation of US prescription laboratories acquired in 2000.
The rise in like-for-like sales reflected gains of 5.8% in Europe to EUR 450 million, 2.7% in North America to EUR 499 million and 11.9% to EUR 97 million in the rest of the world (South America and Asia).
By region, 43% of sales were generated in Europe, 48% in North America, and 9% in the rest of the world, confirming the Group's global scope and the rising importance of markets in Asia, where growth was aided by the joint venture with Japan's Nikon.
Provisional sales growth at August 31 confirmed the trend observed in the first six months of the year.
RECORD INTERIM OPERATING INCOME
Operating income rose faster than sales, gaining 12.7% to a half-year record of EUR 154.9 million thanks to an enhanced product mix, the substantial improvement in profitability at the US laboratories, and the good performance of the Nikon-Essilor joint venture. Operating margin widened to 14.8%, from 14.0% at June 30, 2000.
Interest expense increased to EUR 25.5 million, primarily due to the November 2000 buyback of 6.9% of outstanding Essilor shares, while non-operating expense amounted to EUR 13.1 million, including costs related to VisionWeb. After taking into account these items and income tax, at an effective rate of 31.3%, net income after minority interests for the period was stable at EUR 69.2 million.
However, the buyback of Essilor shares increased earnings per share 5.9% to EUR 6.97.
Given the usual seasonal fluctuations in cash, net debt rose by only EUR 12.8 million to EUR 478.8 million from EUR 466 million at December 31, 2000, while the debt-to-equity ratio declined from 44% to 41%.
COMPLETION OF SHARE TRANSACTIONS
From July 16 through August 3, Essilor offered holders of preferred stock the possibility of exchanging their shares for common stock on a one-for-one basis. The offer resulted in the creation of 38,118 new common shares. The remaining 15,274 preferred shares not tendered to the offer were redeemed at a price, set by an expert, of EUR 330 per share. The Essilor preferred share was withdrawn from the Euronext Paris First Market on August 21.
Now that the preferred share swap has been completed, Euroclear France will carry out the Group's previously announced ten-for-one stock split on September 17. The number of shares in shareholder accounts will be multiplied by ten after the close of trading on the Euronext Paris Bourse on September 14, with the par value of the share reduced from EUR 3.50 to EUR 0.35.
A new partner has joined VisionWeb, Essilor's eye-care industry web platform created in the United States in 2000. Following Johnson & Johnson VisionCare Inc. and Allergan, Jobson Publishing will now provide the platform with skills in market intelligence, professional training and consumer trends, acquired through its Sightstreet website. The VisionWeb project is fully in line with the Group's commitment to offering customers in all markets better and faster service.