Essilor: positive first half and new acquisitions

Essilor had a very good second quarter, when sales increased by a like-for-like 8.1% and lifted growth for the half to 4.7%. Consolidated sales at June, 30 were € 1,108.3 millions (+7.9% excluding currency effect). As expected, sales recovered vigorously in Europe, while remaining on an upward trend in other regions. In addition, prior-year comparatives were high.

Sales growth was supported by new product launches during the period, including the worldwide introduction of a new line of Transitions photochromic lenses in high-index materials, the Asian launch of the Crizal Alizé anti-reflective, smudge resistant coating and the global launch of the Varilux Ellipse small-frame progressive lens.

Changes in the scope of consolidation, which added 3.2% to reported growth, mostly concerned the companies acquired in 2004 and in early 2005 (notably Vision-Craft Inc. and Midland Optical in the United States).

The currency effect remained negative, but significantly eased during the second quarter to just 1.1% as of June 30, primarily as a result of the dollar's renewed strength against the euro.

All of the regions contributed to growth for the period.
In Europe, After a lackluster first quarter, when sales declined a like-for-like 3.4%, operations reported an excellent second quarter, with a sharp upturn in the main country markets and a return to normal business levels in Germany. At the end of June, sales were up 2.0% on a like-for-like basis.
Operations in North America continued to enjoy sustained growth throughout the first half (+5,9% on a like-for-like basis), particularly the US prescription laboratories.Sales rose sharply in Latin America (like-for-like change +19.6%) and in the Asia-Pacific region (like-for-like change +10.9%), with an especially good performance in India and China.
The Bbgr subsidiary has finalized the acquisition of its Italian distributor,Atr Mec Optical , taking to the next level its strategy of expanding its presence in the leading European country markets. A family-owned business started in 1984, Atr Mec Optical began marketing the Bbgr lens range more than five years ago. In 2004, it reported nearly €11 million in sales, with around one hundred employees. The company, which also has two prescription laboratories in Milan and Rome, primarily serves independent opticians and buying groups. It will keep its current management team. The acquisition will enable Bbgr to become an integrated player in the Italian market.

Essilor of America has acquired majority interests in two prescription laboratories that distribute Varilux products.
Jorgenson Optical Supply Company, located near Seattle, Washington, has 55 employees and reported $7.6 million in sales in 2004. The acquisition will enable the Group to improve its services to opticians and optometrists in Washington, where it previously did not have any operations.
Optical One, which had sales of $8.6 million in the fiscal year ended March 31, 2005, is based in Ohio and has 53 employees. It will strengthen Essilor's presence in the region alongside Select Optical, which was acquired in 2004.

In addition, Essilor has received the approval necessary from the U.S. Federal Trade Commission to complete the acquisition, previously announced on June 8, 2005, of the ophthalmic lens business of The Spectacle Lens Group division of Johnson & Johnson Vision Care. Essilor expects to complete the acquisition in the next few days.

Finally, Essilor has acquired a majority stake in Delta Lens Private Limited, a prescription laboratory based in Mumbai (formerly Bombay), with sales of nearly $2 million. Delta Lens is recognized for its service excellence and is present in the high-end segment of the market. Delta Lens will maintain its current management team. This complements Essilor's laboratory presence in the important Mumbai market started with the acquisition of Vijay Vision in 2004.