Essilor Half Year 2004 Financial Results
First-Half 2004: Net Income Up 11% Operating Margin Reaches 18% CHARENTON-LE-PONT, France, September 9 /PRNewswire-FirstCall/ -- TheBoard of Directors of Essilor International, the world leader in ophthalmicoptical products, today announced the financial results for the six monthsended June 30, 2004. EUR millions June 30, June 30, % 2004 2003 change Sales 1,134.5 1,031.2 10% Operating income 203.7 182.2 11.8% Operating margin 18.0% 17.7% - Pretax income after non-operating 187.1 159.6 17.2% items Net income after minority 114.2 102.8 11% interests Earnings per share (in EUR) 1.13 1.02 10.7% Sales up 13.8%, excluding the currency effect, led by strong 7.8% organicgrowth and supported by an assertive acquisitions strategy. Sales amounted to EUR1,134.5 million at June 30, 2004. First-halfhighlights included: - An excellent performance in all regions. On a like-for-like basis,sales increased by 5.5% in Europe (despite the expected slowdown in Germany),8.9% in North America, 13.7% in the Asia/Pacific region and 19.2% in LatinAmerica. - An improved product mix, thanks to growth in sales of high-index andpolycarbonate lenses, progressive lenses, antireflective lenses andTransitions(R) photochromic lenses. - The successful introduction of new products, in particular theCrizal(R) Alize(TM) antireflective treatment and the Varilux(R) Ellipse(TM)small-frame progressive lenses. - Changes in the scope of consolidation added 6% to sales growth. Theymainly concerned the first-time consolidation of companies acquired in 2003. - An ongoing program of acquisitions, which included LTL, a Europeandistributor of finished lenses based in Italy, and eight prescriptionlaboratories in the United States, Canada and Australia. These acquisitions,which represented a total financial investment of EUR45.2 million, willcontribute additional full-year sales of EUR60 million. Operating margin reaches new high of 18% Operating income rose by 11.8% to EUR203.7 million on the combined effectof sustained sales, the enhanced product mix and the disciplined managementof operating costs. Operating margin improved for the fifth consecutive year to a record 18%. Earnings per share up 10.7% Net interest expense was unchanged at EUR15.9 million. Net non-operatingexpense totaled EUR0.8 million, compared with EUR6.7 million in theprior-year period. As a result, pretax income after non-operating items rose17.2% to EUR187.1 million. Net income after minority interests increased 11% to EUR114.2 million fora net margin of 10.1%, while earnings per share grew 10.7% to EUR1.13. An improved balance sheet structure In a first half shaped by strong growth, the net debt-to-equity ratiodeclined slightly to 7% from 8% at year-end 2003, despite substantialfinancial investments (EUR56.1 million) and capital expenditure (EUR73million). Outlook Sales should continue to trend upwards in the second half, thanks tosustained demand for optical products, but prior-year comparatives will beunfavorable given the exceptional growth in Germany and North America in late2003. The acquisitions strategy will be pursued in all regions. In all, basedon first-half performance, the full year should see a further improvement inresults. Change in shareholders' equity As announced at the last annual meeting, Essilor cancelled 800,000 shareson September 8, 2004, in order to offset the dilution from the exercise ofstock options. 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(R) brands to correct myopia, hyperopia, presbyopia andastigmatism. Essilor operates worldwide through 18 production sites, 173 lensfinishing laboratories and local distribution networks. The Essilor sharetrades on the Euronext Paris market (ISIN: FR 0000121667; Reuters: ESSI.PA;Bloomberg: EF FP). http://www.essilor.comSOURCE Essilor
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