MILAN, Italy–(BUSINESS WIRE)–April 24, 2002–Group highlights for the first quarter:
— Net sales up by 30.5 percent to Euro 866.8 million (US$ 759.8 million)
— Operating income up by 25.4 percent to Euro 163.2 million
— Earnings per ADS to Euro 0.22 (US$0.20)Luxottica Group S.p.A. (NYSE:LUX; MTA:LUX), worldwide leader in the eyewear sector, today announced record results for the three-monthperiod ended March 31, 2002.
Results of the Sunglass Hut International operations were consolidated into the Group's results as of March 31, 2001.
The Company's results are stated herein in accordance with U.S. GAAP and are broken out for additional perspective into consolidated, manufacturing/wholesale, including Ray-Ban and retail components, which include Sunglass Hut International and LensCrafters. As there are intercompany items, it is important to note the full reconciliation detailed in the Segmental Information Table provided with this announcement.
Luxottica considers the financial results denominated in Euro, the Group's reporting currency, to be a more accurate gauge of its operating performance. The results denominated in U.S. dollars were converted at the average exchange rate for the three-month period ended March 31, 2002, of Euro 1.00 = US$0.8766, compared with Euro 1.00 = US$0.9230 for the first quarter of 2001. Consolidated Results:
— First quarter of 2002
Consolidated net sales for the first quarter rose by 30.5 percent to Euro 866.8 million, from Euro 664.1 million for the same period of 2001.
Consolidated gross profit for the quarter rose by 30.8 percent to Euro 622.2 million, from Euro 475.7 million for the equivalent period last year. Gross margin for the quarter was 71.8 percent. Consolidated operating income for the first quarter rose by 25.4 percent to Euro 163.2 million, from Euro 130.1 million for the equivalent quarter last year. Operating margin for the quarter was 18.8 percent.
Consolidated net income for the quarter rose by 20.9 percent to Euro 101.1 million, from Euro 83.6 million for the first quarter of last year. Consequently, consolidated net margin for the quarter was 11.7 percent. Earnings per American Depositary Share (ADS) (one ADS represents one ordinary share) for the first quarter were Euro 0.22, compared with Euro 0.19 for the same period last year. In U.S. dollars, earnings per ADS (EPADS) for the quarter were US$0.20, compared with EPADS of US$0.17 for the first quarter of last year. Net outstanding debt on March 31, 2002, decreased by Euro 63.6 million to Euro 1,406.3 million, compared with net outstanding debt of Euro 1,469.9 million on December 31, 2001.
Breakdown of Manufacturing/ Wholesale and Retail Results:
— Manufacturing/Wholesale Division
Luxottica's manufacturing/wholesale sales for first quarter rose by 8.4 percent to Euro 324.8 million, from Euro 299.7 million for the same period the previous year. Assuming unchanged exchange rates, manufacturing/wholesale sales for the first quarter would have risen year-over-year by 7.5 percent.
Manufacturing/ wholesale operating income for the quarter rose by 16.9 percent to Euro 88.9 million, from Euro 76.1 million for the first quarter of 2001.
Leonardo Del Vecchio, chairman and founder of Luxottica Group, said: "During the quarter, concomitant with the closing of the Hong Kong crystal lenses manufacturing facility, we increased our sun lenses manufacturing capacity by starting to also produce polycarbonate lenses in the Italian facility of Lauriano near Torino."
"We currently produce nearly 100 percent of our crystal lenses needs and 30 percent of polycarbonate lenses. By manufacturing a greater percentage of our needs internally, we are able not only to improve the quality of the lenses, but also to benefit from significant cost savings. Additionally, the diminished dependence from outside suppliers allowed us to optimize delivery times throughout our operations, which had already been reduced iEurope as a result of concentrating all logistics in a single distribution center in Sedico, Italy."
— Retail Division
Group's retail results for the three-month period ended March 31, 2002, included results for both LensCrafters and Sunglass Hut International, as they are effectively run as a single division of the Group. Results of the Sunglass Hut International operations were consolidated into the Group's results as of March 31, 2001. Retail sales for the first quarter rose by 40.1 percent to US$498.4 million, from US$355.8 million for the equivalent quarter last year. Same store sales for the quarter were unchanged year-over-year. Retail operating income for first quarter improved by 15.2 percent to US$67.6 million, from US$58.7 million for the same quarter last year.
Mr. Del Vecchio continued: "The performance of the Group's retail division for the first quarter was significant both in terms of sales and profitability. We enjoyed a positive quarter-over-quarter trend in terms of same store sales, while the strong profitability levels reached by the division for the quarter were possible thanks to synergies from the integration of the Sunglass Hut operations into the Group. In fact, I am particularly pleased that Sunglass Hut reached break even for the quarter, while posting an US$11 million operating loss for the first quarter of last year. As a result, we expect that Sunglass Hut's profitability will be in line with that of LensCrafters by the end of this year."
Statement from the Chairman:
Mr. Del Vecchio concluded: "Market indicators currently point to an improvement in consumers' confidence as a result of the at least a partial recovery of the economy in the U.S. and, more in general, on a global scale. This was reflected in a pickup in our business, especially at the wholesale level, where our efforts to improve customer service resulted in a strengthening of our performance not only in North America, but also in Europe, Asia and Latin America, with the sole exception of Argentina."
"I am particularly pleased with the growth experienced by the Group in the Far East, where our operations had been under greater pressure than in other regions, but during the first quarter posted improved results."
"Consequently, because of the good performance of the first quarter and despite the uncertainty in terms of the size and duration of the economic recovery, I am now more confident in the outlook for the coming quarters and expect that the Group will post consolidated sales for the full year in excess of Euro 3,300, with net margin of around 12.0 percent."
Luxottica is the world leader in the design, manufacture, marketing and distribution of prescription frames and sunglasses in mid- and premium-priced categories. The Group's products, which are designed and manufactured in six facilities in Italy and one in the People's Republic of China, include over 2,100 styles in a wide array of colors and sizes and are sold through 21 wholly-owned subsidiaries in the United States, Canada, Italy, France, Spain, Portugal, Sweden, Germany, the United Kingdom, Brazil, Switzerland, Mexico, Belgium, Argentina, South Africa, Finland, Austria, Norway, Japan, Hong Kong and Australia; two 75%-owned subsidiaries in Israel and Poland; a 70%-owned subsidiary in Greece; three 51%-owned subsidiaries in the Netherlands, Turkey and Singapore, one 49%-owned subsidiary in the Arab Emirates and one 44%-owned subsidiary in India.
In March 2001, Luxottica acquired Sunglass Hut International International, a leading sunglass retailer with over 1,900 stores worldwide. This followed the acquisitions of Bausch & Lomb sunglass business, which includes the prestigious Ray-Ban(R), Revo(R), ArnetteTM and Killer Loop(R) brands, in June 1999, and LensCrafters, the largest optical retail chain in North America, in May 1995. For fiscal 2001, Group net sales improved year-over-year by 26.8 percent to Euro 3,064.9 million and net income by 23.9 percent to Euro 316.4 million. Additional information on the company is available on the web at www.luxottica.com.9 percent to Euro 316.4 million. Additional information on the company is available on the web at www.luxottica.com.