Luxottica: first half results and appointment of Andrea Guerra
Luxottica Group has announced results for the three-and six-month periods ended June 30, 2004.
Consolidated net sales for the second quarter improved year-over-year by 13.7 percent to € 803.5 million. Consolidated operating income for the quarter improved year-over-year by 24.3 percent to € 139.1 million. Consequently, consolidated operating margin for the quarter rose to 17.3 percent, from 15.8 percent for the same quarter last year. Consolidated net income for the quarter improved year-over-year by 16.7 percent to € 79.0 million. Consequently, consolidated net margin for the quarter was 9.8 percent. Earnings per share or per American Depositary Share (Ads, one Ads represents one ordinary share) for the quarter were € 0.18. In U.S. Dollars, earnings per Ads (Epads) for the quarter were US$ 0.21.
Consolidated net sales for the six-month period improved year-over-year by 10.8 percent to € 1,563.9 million. Consolidated operating income for the period improved year-over-year by 16.1 percent to € 259.2 million. Consequently, consolidated operating margin was 16.6 percent, compared with 15.8 percent for the comparable six-month period last year. Consolidated net income for the period improved year-over-year by 12.7 percent to € 150.1 million. Consequently, consolidated net margin was 9.6 percent. Earnings per share or per American Depositary Share (Ads) for the period were € 0.34. In U.S. Dollars, earnings per Ads (Epads) for the quarter were US$ 0.41.
Consolidated net outstanding debt as of June 30, 2004, was € 1,401.0 million compared with € 1,470.4 million as of December 31, 2003. This reflected an improvement of € 69.4 million, due to positive cash flow generation for the six-month period and notwithstanding the payment during the period of € 95.5 million in cash dividends for fiscal year 2003.
Leonardo Del Vecchio, chairman of Luxottica Group, commented: 'We are pleased with the year-to-date performance of our retail and, in particular, wholesale operations. In fact, assuming constant exchange rates, consolidated sales for the first half of the year would have risen by 17.3 percent. Consequently, we are now comfortable raising our earnings forecast for the full year to earnings per share (Eps) of € 0.65, or Epads of US$ 0.81. At the same time, our expectations continues to be for a Euro/U.S. Dollars exchange rate of € 1.00 = US$ 1.25'.
The Group's manufacturing/wholesale sales for the six-month period improved year-over-year by 6.6 percent to € 611.0 million. Manufacturing/wholesale operating income for the period rose by 11.5 percent to € 140.5 million, reflecting an operating margin of 23.0 percent. Operating margin for the first half of 2003 was 22.0 percent. Mr. Del Vecchio, commenting on the results of the manufacturing/wholesale division, continued: 'Results of our wholesale division continued to reflect the overall positive momentum of our operations. In particular, for the first half of the year, wholesale sales to third parties are showing growth rates of nearly ten percent, reflecting the strong performance of our house brands, Ray-Ban above all, as well as of the other fashion brands in our portfolio. In addition, profitability levels at the division improved, as the result of greater economies of scale at the production and distribution level, particularly during the second quarter'.
Retail sales for the six-month period improved year-over-year by 11.3 percent to € 1,046.6 million. Same store sales for the period improved year-over-year by 4.2 percent. Retail operating income for the first half of the year rose by 17.7 percent to € 143.5 million, resulting in an operating margin of 13.7 percent. Same store sales for the second quarter improved year-over-year by 4.1 percent. Mr. Del Vecchio concluded: ''The results of our retail division in the U.S. mirror the trend we are seeing on the wholesale front: our premium brand strategy is paying off even in an increasingly competitive environment. This allowed us to generate positive sales and operating income growth, behind our core strengths of quality, fashionable products and exceptional customer service'.
The Board of Luxottica Group yesterday appointed Andrea Guerra, 39, chief executive officer. Mr. Guerra also joins the Board, replacing a departing director. Roberto Chemello, 50, formerly chief executive officer of Luxottica Group, will remain on the Board as a director. Mr. Chemello is also chief executive officer of Luxottica Srl, a subsidiary of Luxottica Group.
Finally, the Board called the Group's Ordinary and Extraordinary Shareholders' Meeting for September 14, 2004, on first call, and for September 16, on second call. At the Meeting, the Board will submit to shareholders for approval the addition of three directors to the Board, for a total of 12, as already provided in the Group's By-laws. The Board will also propose the reappointment of Sabina Grossi, 39, as well as the appointment of Sergio Erede, 64, and Gianni Mion, 59, as non-executive directors. Shareholders will also have to confirm the appointment of Mr. Guerra to the Board and the new corporate governance model resulting from the resolutions of the Meeting.
