Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ESSILOR INTERNATIONAL. We currently have 7 research reports from 1 professional analysts.
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Lenses fit naturally with frames
17 Jan 17
Essilor and Delfin (Luxottica’s 62% shareholder, controlled by the Del Vecchio family) have signed a merger agreement worth c.€46bn. The deal involves the creation of a new entity named ‘EssilorLuxottica’ with a consolidated revenue and EBITDA of c.€15bn and c.€3.5bn, respectively. Management expects €400-600m revenue/cost synergies in the mid-term. As per the agreement, Delfin will get 0.461 shares of the new entity in exchange for one Luxottica share. Subsequently, Essilor will make a public exchange offer to acquire the remaining Luxottica shares at the same exchange ratio (Luxottica will be delisted post the completion of the deal). As a result, Delfin will become the largest shareholder of EssilorLuxottica (31-38% of the share capital and c.31% of the voting rights) and Leonardo Del Vecchio (chairman and CEO of Luxottica) will be appointed as the CEO and executive chairman of the merged entity. Hubert Sagnieres (chairman and CEO of Essilor) will become the executive vice-chairman and deputy CEO of the new group. The new board will comprise 16 members with eight members nominated by each of Essilor (includes Hubert Sagnieres, two employee representatives, one Valoptec representative and four independent members) and Delfin (includes Leonardo Del Vecchio, three Delfin representatives and four independent members). The transaction is expected to close in H2 FY17, subject to regulatory/shareholder approvals.
Temporary issues mire the short term; strong fundamentals intact
25 Oct 16
Essilor released Q3 FY16 trading results in line with our estimates (total revenue: 6.4% vs AV estimate: 6.7%), primarily driven by the 4% scope impact vs AV’s estimate of 3.2%. However, organic growth slowed to 3.2% (vs AV’s estimate: 4.4%) due to lower than expected growth in the Lenses and Optical Instruments segment (2.9% vs AV’s estimate: 4.7%; accounts for c.89% of Q3 16 revenue). Within the segment, LatAm’s organic growth slowed to 4.5% (vs AV estimate: 11.5%; accounts for c.7% of Q3 16 revenue) due to macro-economic headwinds in Brazil (adverse impact on optical store traffic). APAC’s revenue growth also decelerated to 5.7% (vs AV’s estimate: 8.5%; accounts for c.16% of Q3 16 revenue) due to the consumer spending slowdown in the Middle East and Turkey. The sluggish performance continued in North America (1.3% vs AV’s estimate: 2.5%; accounts for c.39% of Q3 16 revenue), once again dampened by the decline in Transitions Optical sales to third-party casters and a slower than expected recovery in Coastal.com revenue. Moreover, the organic growth in Europe came in at 3.0% (vs AV’s estimate: 4.0%; accounts for c.27% of Q3 16 revenue) due to a poor performance in the UK and Central Europe. After dismal growth in H1 16, the Sunglasses and Readers segment clocked 6.9% organic growth (vs AV’s estimate: 2.0%; accounts for c.8% of Q3 16 revenue). The recovery was led by a good performance in North America (benefiting from favourable weather conditions compared to H1) and China (inventory management issue getting resolved). The Equipment division also witnessed robust growth (5.4% vs AV’s estimate: 2.0%; accounts for c.3% of Q3 16 revenue), leveraging on the increased demand for surfacing and coating machines by independent laboratories and optical chains in North America. The FX impact came in line with AV’s estimate (-0.9%). The company made 16 acquisitions/partnerships in the current fiscal year; aggregating c. €205m annualised revenue. Management now sounds cautious about achieving the 4.5% lfl target for FY16 but remains optimistic for 8.0% growth at CER.
Strong fundamentals intact; temporary impact from guidance cut
05 Sep 16
Essilor posted H1 FY16 results below our estimates as well as market consensus. In Q2 16, the lfl revenue increased by +3.2% (vs Q2 15: +4.4%), primarily due to a slowdown in the Lenses & Optical segment (+4.4% vs Q2 15: +4.9%; accounts for c.87% of group revenue). The organic growth of the North America lenses business slumped to +1.5% (vs Q2 15: +3.7%; accounts for c.37% of the group’s revenue) on the back of a sluggish performance in the ‘Transitions Opticals’ business and lesser than expected synergies from ‘US alliance’ (Vision source and PERC). However, while Europe once again showed a sustained performance (+4.5% vs Q2 15: +5.0%; accounts for c.28% of the group’s revenue), the positive momentum continued in Asia-Pacific/Middle East/Africa (+8.5% vs Q2 15: +5.2%; accounts for c.16% of group revenue) and Latin America region (+11.4% vs Q2 15:+10.5%; accounts for c.6% of group revenue). The biggest let down was the Sunglasses and Readers segment (-5.8% lfl vs Q2 15: +3.2%; accounts for c. 10% of the group’s revenue), affected by unfavourable / wet weather conditions and a slower than expected recovery in China. The company’s reported revenue grew by 2.9% (vs Q2 15: +20.0%; our estimate: 7.3%) as the positive scope impact (+3.7% vs Q2 15: 2.2%) was offset by currency headwinds during the quarter (-4.0% vs Q2 15: 13.5%; particularly due to the weakening of the BRL, CNY and GBP). In H1 16, the reported revenue increased by 5.1% (vs H1 15: +22.6%; our estimate: 7.4%) while the operating margin remained stable at 18.0% (in line with our expectations). Furthermore, lower than expected tax expense (attributable to a reduction in dividend taxes as a major portion of 2015 dividend was paid in shares) underpinned the EPS by 6.4% (vs H1 15: 18.7%; our estimate: 12.0%). Essilor made 12 acquisitions/partnerships in the current fiscal year, aggregating c. €200m annualised revenue. Management has lowered the FY 2016 guidance of lfl growth by 50bp (vs previous guidance of 5%).
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
accesso Technology (ACSO LN) Full year results in line, but key trading months still ahead | Augean (AUG LN) Double digit growth in ’16, good start to ‘17 | Earthport (EPO LN) Interims show continued top line strength | Goals Soccer Centres (GOAL LN) Good momentum under new team. It’s now all about delivery | IQE (IQE LN) FY’16 results prompt further upgrades | Microsaic Systems (MSYS LN) Challenges in 2016, strategy remains in place | mporium Group (MPM LN) Funds raised to help execute strategy | RhythmOne (RTHM LN) Dawn of the independents | ScS Group (SCS LN) Strong progress on key growth initiatives albeit comps now toughen | Sinclair Pharma (SPH LN) FY results: EBITDA ahead, Instalift™ gaining pace | Vectura Group (VEC LN) FY (9-month) results
N+1 Singer - EKF Diagnostics - Final results & potential buy back
20 Mar 17
FY16 prelims are slightly ahead of our latest expectations, those having been increased materially over the course of H2’16 as the strength of the recovery in trading became apparent. In order to maximise shareholder value, the directors are currently examining a potential break up of the group. This would also involve a delisting from AIM. A buy back offer at 21.5p would therefore be made to those investors that wish to exit now rather than holding their shares for the two years plus it would likely take to achieve a potentially higher realisation value for the businesses.
N+1 Singer - N1S Trend spotting - Strategy update
08 Mar 17
In this new product we present some strategy theme updates arising out of our latest analysis of macro trends and economic data and our innovative Quant work. We also look at upcoming events and suggest topping up on some of our Best Ideas for 2017.
Good results, but further restructuring complex for investors
20 Mar 17
EKF Diagnostics FY 2016 results are slightly ahead of expectations, with both higher revenue and better EBITDA. Management has also announced plans to split the company into two separate companies, Point of Care and Laboratory Diagnostics, with the prospect of a delisting to manage the process. The primary metric for valuation of the two businesses is different consequently we believe that the separation is likely to generate significant value. However, in anticipation of the volatility likely given the restructuring announced this morning, despite the strength of the results, we reduce our recommendation to HOLD and maintain our 21p target price.
N+1 Singer - Morning Song 22-03-2017
22 Mar 17
Carador Income Fund (CIFU LN) Premium rating restored, high levels of refinancing activity | Cello Group (CLL LN) Outlook getting brighter – watch Pulsar | Eckoh (ECK LN) Largest ever US secure payments win | eg solutions (EGS LN) Full year results in line | Futura Medical (FUM LN) Licensing deal for CSD500 in Portugal | Verona Pharma (VRP LN) Global agreement with QuintilesIMS to support development of RPL554 | Xaar (XAR LN) 2016 results slightly ahead, reduced visibility in 2017