MILAN and AGORDO, Italy, July 31 /PRNewswire-FirstCall/ -- The Board of
Directors of Luxottica Group S.p.A. (NYSE: LUX; MTA: LUX), a global leader
in the design, manufacturing and distribution of premium fashion and luxury
eyewear, convened today in Agordo by chairman Leonardo Del Vecchio,
approved financial results for the three- and six-month periods ended June
30, 2008(1). Financial highlights for the periods in accordance with U.S.
GAAP are set forth below. A detailed balance sheet, income statements and
other financial tables are attached to this press release.
Second quarter of 2008(1)
Change at current Change at constant
In millions of Euro 2Q08 exchange rates exchange rates
Consolidated sales
Group 1,354.4 +2.1% +12.6%
Wholesale third parties 583.4 +21.9% +28.3%
Retail 771.1 -9.1% +3.8%
Comp. Sales Retail(2) - - -2.8%
Change
Operating margin vs. pro forma (4,5)
Group 17.0% -60 bps
Wholesale 25.1% -20 bps
Retail 11.2% -120 bps
EBITDA margin(3) 21.8% -70 bps
Change at current
exchange rates(5) Change in U.S.$(5)
EPS (in Euro) 0.29 -6.8% +8.0%
- Before trademark
amortization(3) 0.32 -4.5%
First half of 2008(1)
Change at current Change at constant
In millions of Euro 1H08 exchange rates exchange rates
Consolidated sales
Group 2,753.1 +4.8% +14.6%
Wholesale third parties 1,202.9 +27.3% +32.9%
Retail 1,550.2 -7.8% +4.3%
Comp. Sales Retail(2) -2.9%
Change
Operating margin vs. pro forma (4,5)
Group 15.9% -70 bps
Wholesale 24.7% +40 bps
Retail 9.9% -220 bps
EBITDA margin(3) 20.7% -80 bps
Change at current
exchange rates(5) Change in U.S.$(5)
EPS (in Euro) 0.52 -12.9% +0.4%
- Before trademark
amortization(3) 0.57 -9.6% +4.1%
Andrea Guerra, chief executive officer of Luxottica Group, commented:
"This year our Group is facing two significant challenges: the further
significant devaluation in the U.S. currency against the Euro, which has
reached approximately 13% year-to-date, and a slowdown in the global
economy, particularly in North America. We have been taking steps to
proactively tackle the second challenge, including significant transactions
such as the merger with Oakley. In fact, we are already seeing the benefits
of these actions: for the quarter, consolidated sales at constant exchange
rates rose by 12.6%, while net income(5) in U.S. dollars rose by 8%. This
resulted in an outstanding net income margin for the quarter of nearly 10%.
"Final results for the second quarter confirmed that we are on track to
meet the previously announced financial outlook for the full year. For
this, I am especially proud of our entire organization because, while the
first half of this year was clearly challenging, the true strength and
resilience of our business model was reflected in our ability to withstand
and to quickly and efficiently react to the difficult market conditions
that we faced in the period. Additionally, phase one of the Oakley
integration is now nearly complete within only seven months of the merger
and the business is already positively contributing to overall results.
"I am very pleased with our underlying performance for the quarter in
North America, where pro forma sales were flat. Our results were well above
those of the overall market and key peers. The initiatives taken to bring
costs in line with the current environment have made our overall business
model in the North American market more sound for the longer term. And,
profitability has already improved significantly from the first quarter of
this year.
"Total wholesale sales for the quarter, including Oakley, rose
year-over-year by 21.2%, reflecting the 13th consecutive quarter of
double-digit growth. Within this business, we continued to see positive
performances, especially in North America, and achieved overall
satisfactory results in continental Europe and emerging markets, while
seeing a slowdown in southern Europe and Japan. At the same time, we
believe we are extremely well-positioned to tackle the challenges ahead due
to: a truly global presence; the ability to forge even closer relationships
with key clients; the investments made over the past few years in an
ever-stronger and increasingly effective organization; and, the strongest
and most well-balanced brand portfolio in the industry. Additionally,
following several years of continued strong growth in manufacturing
capacity to manage demand, today we are able to realize efficiencies and
increasing quality levels within our manufacturing operations."
In terms of brands, both Ray-Ban and Oakley posted another strong
quarter, while luxury brands showed some signs of weakness as a result of
the overall challenging environment. In particular, Ray-Ban continued to
grow due, in part, to the strength of the Wayfarer, which is now the second
best-selling model worldwide. Oakley, on the other hand, was outstanding
across all regions, due, in part, to strong performances by its athletes
and anticipation of the brand's expected strong visibility at the upcoming
Olympics in Beijing.
The merger with Oakley is one of the most important developments in our
business of recent years. Only twelve months after the announcement of the
transaction, the new journey on which the Group has embarked continues to
make significant progress: the integration of the European portion of the
Oakley business was completed as of the end of the second quarter; the new
teams are already on the ground and making a difference; the sports channel
is ready; the new emerging markets structure is up and running; the focus
within retail has been on cross-selling opportunities at LensCrafters and
Sunglass Hut and the integration of Oakley's retail chains Sunglass Icon
and Bright Eyes into Luxottica's existing retail structure. Finally, most
other phase one projects, including sourcing and sun lens strategy, have
either been completed or are nearing completion.
Management now expects that one-time charges in connection with the
merger with Oakley will be a total of euro 20 million, compared with the
previously expected euro 25 million, resulting in a slightly lower impact
of these charges on the second half of this year.
Luxottica Group's consolidated net debt(3) on June 30, 2008, was euro
2,839.7 million, reflecting a consolidated net debt to pro forma EBITDA
ratio(3) of 2.6x. Free cash flow generation for the quarter was again
particularly positive, further underlining the strength of our business
model.
Today the Group's Board of Directors also approved the Company's
financial results for the six-month period ended June 30, 2008 in
accordance with International Financial Reporting Standards (IFRS).
The officer responsible for preparing the Company's financial reports,
Enrico Cavatorta, declares, pursuant to paragraph 2 of Article 154-bis of
the Italian Consolidated Law on Finance, that the accounting information
contained in this press release corresponds to the document results, books
and accounting records.
Notes to the release
(1) All comparisons, including percentage changes, are between the
three- and six-month periods ended June 30, 2008 and 2007.
(2) Comparable store sales reflects the change in sales from one period
to another that, for comparison purposes, includes in the calculation only
stores open in the more recent period that also were open during the
comparable prior period, and applies to both periods the average exchange
rate for the prior period and the same geographic area.
(3) EBITDA, pro forma EBITDA, EBITDA margin, net debt, the ratio of net
debt to pro forma EBITDA and EPS before trademark amortization are non-U.S.
GAAP measures. For additional disclosure regarding such measures, please
refer to the tables attached.
(4) Pro forma data reflects the inclusion of consolidated results for
Oakley, Inc., a subsidiary that was acquired in November 2007, as if it was
acquired on January 1, 2007.
(5) Excluding a non-recurring gain related to the sale of a real estate
property in the second quarter of 2007. The impact of the sale was a gain
of approximately euro 20 million before taxes.
Luxottica Group S.p.A.
Luxottica Group is a global leader in eyewear, with over 6,200 optical
and sun retail stores in North America, Asia-Pacific, China, South Africa
and Europe and a strong brand portfolio that includes our key house brand,
Ray-Ban, the best selling sun and prescription eyewear brand in the world,
as well as, among others, license brands Bvlgari, Burberry, Chanel, Dolce &
Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Salvatore Ferragamo,
Tiffany and Versace, and other key house brands Oakley, Oliver Peoples,
Vogue, Persol, Arnette and REVO. In addition to a global wholesale network
that touches over 130 countries, the Group manages leading retail brands
such as LensCrafters, Pearle Vision and Sunglass Icon in North America,
OPSM and Laubman & Pank in Asia-Pacific, and Sunglass Hut globally. The
Group's products are designed and manufactured in six Italy-based
high-quality manufacturing plants, in the only two China-based plants
wholly-owned by a premium eyewear manufacturer, and in manufacturing
facilities in the United States acquired as part of the Oakley acquisition.
For fiscal year 2007, Luxottica Group (NYSE: LUX; MTA: LUX) posted
consolidated net sales of euro 5 billion. Additional information on the
Group is available at http://www.luxottica.com.
Safe Harbor Statement
Certain statements in this press release may constitute
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Such statements involve risks, uncertainties
and other factors that could cause actual results to differ materially from
those which are anticipated. Such risks and uncertainties include, but are
not limited to, the ability to successfully integrate Oakley's operations,
the ability to realize expected synergies from the merger with Oakley, the
ability to successfully introduce and market new products, the ability to
maintain an efficient distribution network, the ability to predict future
economic conditions and changes in consumer preferences, the ability to
achieve and manage growth, the ability to negotiate and maintain favorable
license arrangements, the availability of correction alternatives to
prescription eyeglasses, fluctuations in exchange rates, the ability to
effectively integrate other recently acquired businesses, as well as other
political, economic and technological factors and other risks and
uncertainties described in our filings with the U.S. Securities and
Exchange Commission. These forward-looking statements are made as of the
date hereof, and we do not assume any obligation to update them.
- APPENDIX AND TABLES TO FOLLOW -
NON-U.S. GAAP MEASURES:
Earnings per share before trademark amortization:
Earnings per share (EPS) before trademark amortization means earnings
per share before trademark and other similar intangible asset amortization
expense, net of taxes, per share. The Company believes that EPS before
trademark amortization is useful to both management and investors in
evaluating the Company's operating performance and prospects compared to
that of other companies in its industry. Our calculation of EPS before
trademark amortization allows us to compare our earnings per share with
those of other companies without giving effect to the accounting effects of
the amortization of the Company's trademarks and other similar intangible
assets, which may vary for different companies for reasons unrelated to the
overall operating performance of a company's business.
EPS before trademark amortization is not a measure of performance under
accounting principles generally accepted in the United States (U.S. GAAP).
We include it in this presentation in order to:
-- improve transparency for investors;
-- assist investors in their assessment of the Company's operating
performance;
-- ensure that these measures are fully understood in light of how the
Company evaluates its operating results;
-- properly define the metrics used and confirm their calculation; and,
-- share these measures with all investors at the same time.
EPS before trademark amortization is not meant to be considered in
isolation or as a substitute for items appearing on our financial
statements prepared in accordance with U.S. GAAP. Rather, these non-GAAP
measures should be used as a supplement to U.S. GAAP results to assist the
reader in better understanding operational performance of the Company. The
Company cautions that these measures are not defined terms under U.S. GAAP
and their definitions should be carefully reviewed and understood by
investors. Investors should be aware that Luxottica Group's method of
calculating EPS before trademark amortization may differ from methods used
by other companies. The Company recognizes that the usefulness of EPS
before trademark amortization as an evaluative tool may have certain
limitations, including:
-- EPS before trademark amortization does not include the effects of
amortization of the Company's trademarks and other intangible assets.
Because trademarks and other intangible assets are important to our
business and to our ability to generate sales, we consider trademark
amortization expense as an element of our costs. Therefore, any measure
that excludes trademark amortization expense may have material limitations.
We compensate for these limitations by using EPS before trademark
amortization as one of several comparative tools, together with U.S. GAAP
measurements, to assist in the evaluation of our operating performance.
See the table on the following page for a reconciliation of EPS before
trademark amortization to EPS for the three and six months ending June 30,
2007 and 2008, respectively, which is the most directly comparable U.S.
GAAP financial measure.
Non-U.S. GAAP Measures: EPS before Trademark Amortization
(In millions of Euro, unless otherwise noted)
2Q07 2Q08
Trademark amortization and other
similar intangible assets 15 19
(+)
Taxes on trademark amortization
and other similar intangible assets (6) (7)
(-)
Trademark amortization and other similar
intangible assets, net of taxes 9 12
(=)
Average number of shares outstanding
as of 2Q
(in thousands) 455,001 456,481
(/)
Trademark amortization and other similar
intangible assets, net of taxes, per share 0.02 0.03
(=)
EPS (1) 0.31 0.29
(+)
EPS before trademark amortization and other
similar intangible assets, net of taxes 0.33 0.32
(=)
(1) Excluding a non-recurring gain related to the sale of a real estate
property in the second quarter of 2007. The impact of the sale was a gain
of approximately euro 20 million before taxes and approximately euro 13
million after taxes equivalent to euro 0.03 at EPS level.
Non-U.S. GAAP Measures: EPS before Trademark Amortization
(In millions of Euro, unless otherwise noted)
June 07 June 08
Trademark amortization and other
similar intangible assets 30 41
(+)
Taxes on trademark amortization
and other similar intangible assets (11) (15)
(-)
Trademark amortization and other similar
intangible assets, net of taxes 19 26
(=)
Average number of shares outstanding
as of June 30
(in thousands) 454,498 456,410
(/)
Trademark amortization and other similar
intangible assets, net of taxes, per share 0.04 0.06
(=)
EPS (1) 0.59 0.52
(+)
EPS before trademark amortization and other
similar intangible assets, net of taxes 0.64 0.57
(=)
(1) Excluding a non-recurring gain related to the sale of a real estate
property in the second quarter of 2007. The impact of the sale was a
gain of approximately euro 20 million before taxes and approximately euro
13 million after taxes equivalent to euro 0.03 at EPS level.
NON-GAAP MEASURE:
EBITDA, PRO FORMA EBITDA, EBITDA MARGIN, NET DEBT AND NET DEBT TO PRO FORMA
EBITDA RATIO Net debt means the sum of bank overdrafts, current portion of long-term
debt and long-term debt, less cash and cash equivalents. EBITDA represents
income from operations before depreciation and amortization. Pro forma
EBITDA reflects the consolidated EBITDA of the Company as adjusted to
include the results of operations of Oakley, Inc., which was acquired by
the Company on November 14, 2007, as if it had been acquired on January 1,
2007. EBITDA margin means EBITDA divided by net sales. The Company believes
that pro forma EBITDA is useful to both management and investors in
evaluating the Company's operating performance compared to that of other
companies in its industry. Our calculation of pro forma EBITDA allows us to
compare our operating results with those of other companies without giving
effect to financing, income taxes and the accounting effects of capital
spending, which items may vary for different companies for reasons
unrelated to the overall operating performance of a company's business. The
net debt to pro forma EBITDA ratio allows management to assess the cost of
existing debt since it affects the interest rates charged by the Company's
lenders.
Management also believes that the ratio of net debt to pro forma
EBITDA, is useful to investors because it allows investors to assess the
impact of cash flows on the Company's level of leverage. EBITDA, pro forma
EBITDA, EBITDA margin, net debt and the ratio of net debt to pro forma
EBITDA are not measures of performance under accounting principles
generally accepted in the United States (US GAAP). We include them in this
press release in order to:
-- improve transparency for investors;
-- assist investors in their assessment of the Company's operating
performance and its ability to refinance its debt as it matures and incur
additional indebtedness to invest in new business opportunities;
-- assist investors in their assessment of the Company's cost of debt;
-- ensure that these measures are fully understood in light of how the
Company evaluates its operating results and leverage;
-- properly define the metrics used and confirm their calculation; and
-- share these measures with all investors at the same time.
EBITDA, pro forma EBITDA, EBITDA margin, net debt and the ratio of net
debt to pro forma EBITDA are not meant to be considered in isolation or as
a substitute for items appearing on our financial statements prepared in
accordance with US GAAP. Rather, these non-GAAP measures should be used as
a supplement to US GAAP results to assist the reader in better
understanding the operational performance of the Company. The Company
cautions that these measures are not defined terms under US GAAP and their
definitions should be carefully reviewed and understood by investors.
Investors should be aware that Luxottica Group's method of calculating
EBITDA and pro forma EBITDA, EBITDA margin, net debt and the ratio of net
debt to pro forma EBITDA may differ from methods used by other companies.
The Company recognizes that the usefulness of EBITDA, pro forma EBITDA,
EBITDA margin, net debt and the ratio of net debt to pro forma EBITDA as
evaluative tools may have certain limitations, including the following:
-- EBITDA and pro forma EBITDA do not include interest expense. Because
we have borrowed money in order to finance our operations, interest expense
is a necessary element of our costs and ability to generate profits and
cash flows. Therefore, any measure that excludes interest expense may have
material limitations.
-- EBITDA and pro forma EBITDA do not include depreciation and
amortization expense. Because we use capital assets, depreciation and
amortization expense is a necessary element of our costs and ability to
generate profits. Therefore, any measure that excludes depreciation and
expense may have material limitations.
-- EBITDA and pro forma EBITDA do not include provision for income
taxes. Because the payment of income taxes is a necessary element of our
costs, any measure that excludes tax expense may have material limitations.
-- EBITDA and pro forma EBITDA do not reflect cash expenditures or
future requirements for capital expenditures or contractual commitments.
-- EBITDA and pro forma EBITDA do not reflect changes in, or cash
requirements for, working capital needs.
-- EBITDA and pro forma EBITDA do not allow us to analyze the effect of
certain recurring and non-recurring items that materially affect our net
income or loss.
-- Net debt and the ratio of net debt to pro forma EBITDA is net of
cash and cash equivalents, restricted cash and short-term investments,
thereby reducing our debt position. Because we may not be able to use our
cash to reduce our debt on a dollar-for-dollar basis, this measure may have
material limitations.
We compensate for the foregoing limitations by using EBITDA, pro forma
EBITDA, EBITDA margin, net debt and the ratio of net debt to pro forma
EBITDA as two of several comparative tools, together with US GAAP
measurements, to assist in the evaluation of our future operating
performance and leverage.
See the tables on the following page for (1) a reconciliation of net
debt as of June 30, 2008 and December 31, 2007 to long-term debt as of June
30, 2008 and December 31, 2007, which is the most directly comparable US
GAAP financial measure, (2) a reconciliation of EBITDA to income from
operations for June 30, 2008 and pro forma EBITDA to income from operations
for June 30, 2007 and December 31, 2007, which is the most directly
comparable US GAAP financial measure, (3) the calculation of EBITDA margin
on net sales and (4) the calculation of the ratio of net debt to pro forma
EBITDA.
NON-U.S.GAAP MEASURE:
NET DEBT
Millions of Euro Dec 31, 2007 Jun 30, 2008
Long-term debt 1,926.5 2,153.5
(+)
Current portion of long-term debt 792.6 462.3
(+)
Bank overdrafts 455.6 454.0
(+)
Cash (302.9) (229.9)
(-)
Net debt 2,871.8 2,839.7
(=)
NON-U.S. GAAP MEASURE:
EBITDA, pro forma EBITDA and ratio of net debt to pro forma EBITDA
EBITDA LTM
as of
In Millions of Euro June, 07 FY07 June, 08 June 30, 2008
Pro forma(1) Pro forma(1) Pro forma(1)
(-) (+) (+) (=)
Income from operations (508.9) 878.1 437.2 806.5
(+)
Depreciation &
amortization (143.9) 288.2 132.8 277.1
(+)
EBITDA (652.7) 1,166.3 570.0 1,083.6
(=)
Net debt / EBITDA 2.5x 2.6x
(1) These consolidated pro forma amounts reflect the inclusion of
consolidated results of Oakley Inc., a subsidiary that was acquired in
November 2007, for the first six months of 2007 (as it is in 2008) and
assume the same trademark amortization for 2007 as in 2008, to allow to a
better comparison of the two periods discussed. This information does not
purport to be indicative of the actual results that would have been
achieved had the Oakley acquisition been completed as of January 1, 2007.
NON-U.S. GAAP MEASURE:
EBITDA and EBITDA margin
Millions of Euro Change June 08 vs
June,07 June,08 June 07
Pro forma(1)(2) Pro forma (1)(2)
(-) (+) (=)
Income from operations (488.9) 437.2
(+)
Depreciation &
amortization (143.9) 132.8
(+)
EBITDA (632.7) 570.0
(=)
EBITDA margin 21.5% 20.7% -80 bps
Millions of Euro Change 2Q 08 vs
2Q 07 2Q08 2Q 07
Pro forma (1)(2) Pro forma (1 (2)
(-) (+) (=)
Income from operations (264.0) 230.2
(+)
Depreciation &
amortization (73.6) 64.5
(+)
EBITDA (337.5) 294.7
(=)
EBITDA margin 22.5% 21.8% -70 bps
(1) These consolidated pro-forma amounts reflect the inclusion of
consolidated results of Oakley Inc., a subsidiary that was acquired in
November 2007, for the three and six months and ended June 30, 2007 (as it
is in 2008) and assume the same trademark amortization for 2007
(2) Excluding non-recurring gain related to the sale of a real estate
property in 2Q 2007. The impact of the sale was a gain of approximately
euro 20 million before taxes.
LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE THREE-MONTH PERIODS ENDED
JUNE 30, 2008 AND JUNE 30, 2007
KEY FIGURES IN THOUSANDS OF EURO (3)
2008 2007 % Change
NET SALES 1,354,442 1,326,777 2.1%
NET INCOME 132,580 154,581 -14.2%
NET INCOME w/o one-time gain (4) 132,580 141,768 -6.5%
BASIC EARNINGS PER SHARE (ADS) (2) (4): 0.29 0.31 -6.8%
EPS PRE-TRADEMARK AMORTIZATION (4) (5): 0.32 0.33 -4.5%
KEY FIGURES IN THOUSANDS OF US DOLLARS
(1) (3)
2008 2007 % Change
NET SALES 2,115,909 1,788,363 18.3%
NET INCOME 207,116 208,360 -0.6%
NET INCOME w/o one-time gain (4) 207,116 191,089 8.4%
BASIC EARNINGS PER SHARE (ADS) (2) (4): 0.45 0.42 8.0%
EPS PRE-TRADEMARK AMORTIZATION (4) (5): 0.50 0.45 10.7%
Notes: 2008 2007
(1) Average exchange rate (in US dollars per Euro) 1.5622 1.3479
(2) Weighted average number of outstanding
shares 456,481,130 455,000,671
(3) Except earnings per share (ADS), which are expressed in Euro and US
dollars, respectively
(4) Excluding non-recurring gain related to the sale of a real estate
property in 2Q 2007. The impact of the sale was a gain of
approximately euro 20 million before taxes and approximately euro 13
million after taxes.
(5) EPS before trademark amortization is a non-US GAAP measure. For
additional disclosure regarding such measure, please see the non-US
GAAP measure table attached to this release.
LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE SIX-MONTH PERIODS ENDED
JUNE 30, 2008 AND JUNE 30, 2007
KEY FIGURES IN THOUSANDS OF EURO (3)
2008 2007 % Change
NET SALES 2,753,145 2,626,602 4.8%
NET INCOME 236,285 282,837 -16.5%
NET INCOME w/o one-time gain (4) 236,285 270,024 -12.5%
BASIC EARNINGS PER SHARE (ADS) (2) (4): 0.52 0.59 -12.9%
EPS PRE-TRADEMARK AMORTIZATION (4) (5): 0.57 0.64 -9.6%
KEY FIGURES IN THOUSANDS OF US
DOLLARS (1) (3)
2008 2007 % Change
NET SALES 4,213,413 3,490,229 20.7%
NET INCOME 361,611 375,834 -3.8%
NET INCOME w/o one-time gain (4) 361,611 358,808 0.8%
BASIC EARNINGS PER SHARE (ADS) (2) (4): 0.79 0.79 0.4%
EPS PRE-TRADEMARK AMORTIZATION (4) (5): 0.88 0.84 4.1%
Notes : 2008 2007
(1) Average exchange rate (in US dollars per Euro) 1.5304 1.3288
(2) Weighted average number of outstanding
shares 456,410,218 454,498,282
(3) Except earnings per share (ADS), which are expressed in Euro and
US dollars, respectively
(4) Excluding non-recurring gain related to the sale of a real estate
property in 2Q 2007. The impact of the sale was a gain of
approximately euro 20 million before taxes and approximately euro 13
million after taxes.
(5) EPS before trademark amortization is a non-US GAAP measure. For
additional disclosure regarding such measure, please see the non-US
GAAP measure table attached to this release.
LUXOTTICA GROUP
CONSOLIDATED INCOME STATEMENT
FOR THE THREE-MONTH PERIODS ENDED
JUNE 30, 2008 AND JUNE 30, 2007
In thousands of Euro (1) % of % of
2Q08 sales 2Q07 (2) sales % Change
NET SALES 1,354,442 100.0% 1,326,777 100.0% 2.1%
COST OF SALES (437,408) (398,980)
GROSS PROFIT 917,034 67.7% 927,797 69.9% -1.2%
OPERATING EXPENSES:
SELLING EXPENSES (410,234) (404,134)
ROYALTIES (33,539) (36,320)
ADVERTISING EXPENSES (102,129) (100,296)
GENERAL AND
ADMINISTRATIVE EXPENSES (121,632) (129,356)
TRADEMARK AMORTIZATION (19,323) (15,226)
TOTAL (686,857) (685,331)
OPERATING INCOME 230,177 17.0% 242,466 18.3% -5.1%
OTHER INCOME (EXPENSE):
INTEREST EXPENSES (30,448) (21,119)
INTEREST INCOME 3,324 3,826
OTHER - NET 3,528 2,760
OTHER INCOME
(EXPENSES)- NET (23,596) (14,533)
INCOME BEFORE PROVISION
FOR INCOME TAXES 206,581 15.3% 227,933 17.2% -9.4%
PROVISION FOR INCOME TAXES (70,229) (82,056)
INCOME BEFORE MINORITY
INTEREST IN INCOME
OF CONSOLIDATED
SUBSIDIARIES 136,352 145,877
MINORITY INTEREST IN
INCOME OF CONSOLIDATED
SUBSIDIARIES (3,772) (4,109)
NET INCOME 132,580 9.8% 141,768 10.7% -6.5%
BASIC EARNINGS PER
SHARE (ADS): 0.29 0.31
FULLY DILUTED EARNINGS
PER SHARE (ADS): 0.29 0.31
WEIGHTED AVERAGE
NUMBER OF
OUTSTANDING SHARES 456,481,130 455,000,671
FULLY DILUTED AVERAGE
NUMBER OF SHARES 457,776,190 458,593,162
Notes:
(1) Except earnings per share (ADS), which are expressed in Euro
(2) Excluding non-recurring gain related to the sale of a real estate
property in 2Q 2007. The impact of the sale was a gain of
approximately euro 20 million before taxes and approximately euro 13
million after taxes.
LUXOTTICA GROUP
CONSOLIDATED INCOME STATEMENT
FOR THE SIX-MONTH PERIODS ENDED
JUNE 30, 2008 AND JUNE 30, 2007
In thousands of Euro (1) % of % of
1H2008 sales 1H2007 (2) sales % Change
NET SALES 2,753,145 100.0% 2,626,602 100.0% 4.8%
COST OF SALES (908,318) (815,874)
GROSS PROFIT 1,844,827 67.0% 1,810,728 68.9% 1.9%
OPERATING EXPENSES:
SELLING EXPENSES (845,311) (809,040)
ROYALTIES (68,512) (70,811)
ADVERTISING EXPENSES (195,068) (185,759)
GENERAL AND
ADMINISTRATIVE EXPENSES (258,178) (248,284)
TRADEMARK AMORTIZATION (40,524) (30,243)
TOTAL (1,407,593) (1,344,137)
OPERATING INCOME 437,234 15.9% 466,591 17.8% -6.3%
OTHER INCOME (EXPENSE):
INTEREST EXPENSES (64,804) (38,956)
INTEREST INCOME 6,265 6,834
OTHER - NET (1,646) 2,382
OTHER INCOME
(EXPENSES)- NET (60,185) (29,740)
INCOME BEFORE PROVISION
FOR INCOME TAXES 377,049 13.7% 436,851 16.6% -13.7%
PROVISION FOR INCOME TAXES (129,893) (157,266)
INCOME BEFORE MINORITY
INTEREST IN INCOME OF
CONSOLIDATED SUBSIDIARIES 247,156 279,584
MINORITY INTEREST IN
INCOME OF CONSOLIDATED
SUBSIDIARIES (10,871) (9,560)
NET INCOME 236,285 8.6% 270,024 10.3% -12.5%
BASIC EARNINGS PER
SHARE (ADS): 0.52 0.59
FULLY DILUTED EARNINGS
PER SHARE (ADS): 0.52 0.59
WEIGHTED AVERAGE NUMBER
OF OUTSTANDING SHARES 456,410,218 454,498,282
FULLY DILUTED AVERAGE
NUMBER OF SHARES 457,792,534 457,970,000
Notes :
(1) Except earnings per share (ADS), which are expressed in Euro
(2) Excluding non-recurring gain related to the sale of a real estate
property in 2Q 2007. The impact of the sale was a gain of
approximately euro 20 million before taxes and approximately euro 13
million after taxes.
LUXOTTICA GROUP
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
In thousands of Euro June 30, 2008 December 31, 2007
CURRENT ASSETS:
CASH 229,941 302,894
MARKETABLE SECURITIES 2,385 21,345
ACCOUNTS RECEIVABLE 814,041 665,184
SALES AND INCOME TAXES RECEIVABLE 54,143 89,000
INVENTORIES 557,403 575,016
PREPAID EXPENSES AND OTHER 149,796 139,305
DEFERRED TAX ASSETS - CURRENT 127,928 117,853
TOTAL CURRENT ASSETS 1,935,637 1,910,597
PROPERTY, PLANT AND EQUIPMENT - NET 1,050,042 1,057,782
OTHER ASSETS
INTANGIBLE ASSETS - NET 3,678,995 3,907,957
INVESTMENTS 18,339 17,668
OTHER ASSETS 177,503 194,329
SALES AND INCOME TAXES RECEIVABLE 1,955 1,042
DEFERRED TAX ASSETS - NON-CURRENT 73,873 67,891
TOTAL OTHER ASSETS 3,950,665 4,188,887
TOTAL 6,936,344 7,157,266
CURRENT LIABILITIES:
BANK OVERDRAFTS 453,960 455,588
CURRENT PORTION OF LONG-TERM DEBT 462,254 792,617
ACCOUNTS PAYABLE 359,329 423,432
ACCRUED EXPENSES AND OTHER 427,730 441,721
ACCRUAL FOR CUSTOMERS' RIGHT OF RETURN 31,183 26,557
INCOME TAXES PAYABLE 31,315 19,314
TOTAL CURRENT LIABILITIES 1,765,771 2,159,229
LONG-TERM LIABILITIES:
LONG-TERM DEBT 2,153,454 1,926,523
LIABILITY FOR TERMINATION INDEMNITIES 56,900 56,911
DEFERRED TAX LIABILITIES - NON-CURRENT 225,507 248,377
OTHER 239,007 229,972
TOTAL LONG-TERM LIABILITIES 2,674,868 2,461,782
COMMITMENTS AND CONTINGENCIES:
MINORITY INTERESTS IN CONSOLIDATED
SUBSIDIARIES 35,524 41,097
SHAREHOLDERS' EQUITY:
462,984,820 ORDINARY SHARES AUTHORIZED
AND ISSUED - 456,550,034 SHARES
OUTSTANDING 27,779 27,757
NET INCOME 236,285 492,204
RETAINED EARNINGS 2,196,117 1,975,196
TOTAL SHAREHOLDERS' EQUITY 2,460,181 2,495,158
TOTAL 6,936,344 7,157,266
LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS
FOR THE SIX-MONTH PERIODS ENDED
JUNE 30, 2008 AND JUNE 30, 2007
- SEGMENTAL INFORMATION -
In thousands of Euro
Manufacturing Inter-Segment
and Transactions and
Wholesale Retail Corporate Adj. Consolidated
2008
Net Sales 1,404,478 1,550,201 (201,535) 2,753,145
Operating Income 346,249 153,549 (62,564) 437,234
% of sales 24.7% 9.9% 15.9%
Capital Expenditures 51,972 78,437 130,408
Depreciation &
Amortization 44,840 58,930 29,008 132,778
Assets 2,804,608 1,444,747 2,686,989 6,936,344
2007 (2)
Net Sales 1,119,828 1,681,571 (174,797) 2,626,602
Operating Income 315,743 205,158 (34,291) 486,611
% of sales 28.2% 12.2% 18.5%
Capital Expenditures 45,573 78,439 124,012
Depreciation &
Amortization 32,085 60,959 19,896 112,940
Assets 2,205,933 1,447,087 1,727,471 5,380,490
2007 Pro-forma (1) (2)
Net Sales 1,408,171 1,762,721 (224,421) 2,946,471
Operating income 342,776 213,570 (47,460) 508,886
% of sales 24.3% 12.1% 17.3%
Depreciation &
Amortization 45,697 65,087 33,066 143,850
Notes:
(1) The company has included this measurement to give comparative
information for the two periods discussed, aligning the consolidation
periods of Oakley for both years 2007 and 2008. They reflect the
consolidation of Oakley results for the first six months of 2007 (as
it is in 2008) and apply to 2007 the same trademark amortization as in
2008. This information does not purport to be indicative of the actual
result that would have been achieved had the Oakley acquisition been
completed as of January 1, 2007.
(2) Including non-recurring gain related to the sale of a real estate
property in 2Q 2007. The impact of the sale was a gain of
approximately euro 20 million before taxes and approximately euro 13
million after taxes.
LUXOTTICA GROUP
RECONCILIATION OF THE CONSOLIDATED INCOME STATEMENT
PREPARED IN ACCORDANCE WITH US GAAP AND IAS / IFRS FOR THE SIX-
MONTH PERIOD ENDED JUNE 30, 2008,
PURSUANT TO CONSOB REGULATION N. 27021 OF APRIL 7, 2000 AND IN
ACCORDANCE WITH CONSOB
COMMUNICATION DME/5015175 DATED MARCH 10, 2005
CONSOLIDATED INCOME STATEMENT
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2008
In thousands of Euro (1) US GAAP
1H2008 IFRS 2 IFRS 3 IAS 12 IAS 19
Business
Stock combinat- Income Employee
option ion Taxes benefit
NET SALES 2,753,145
COST OF SALES (908,318) (760)
GROSS PROFIT 1,844,827 (760)
OPERATING EXPENSES:
SELLING EXPENSES (845,311) (1,452)
ROYALTIES (68,512)
ADVERTISING EXPENSES (195,068)
GENERAL AND ADMINISTRATIVE
EXPENSES (258,178) (4,420) 268
TRADEMARK AMORTIZATION (40,524)
TOTAL (1,407,593) (5,873) 268
OPERATING INCOME 437,234 (6,633) 268
OTHER INCOME (EXPENSE):
INTEREST EXPENSES (64,804) (1,611)
INTEREST INCOME 6,265
OTHER - NET (1,646)
OTHER INCOME (EXPENSES)-NET (60,185) (1,611)
INCOME BEFORE PROVISION
FOR INCOME TAXES 377,049 (8,244) 268
PROVISION FOR INCOME TAXES (129,893) (4,596) 2,401 6,494 (148)
INCOME BEFORE MINORITY
INTEREST IN INCOME OF
CONSOLIDATED SUBSIDIARIES 247,156 (4,596) (5,843) 6,494 120
MINORITY INTEREST IN INCOME
OF CONSOLIDATED SUBSIDIARIES (10,871) 5,469
NET INCOME 236,285 (4,596) (374) 6,494 120
BASIC EARNINGS PER SHARE
(ADS) (1) 0.52
FULLY DILUTED EARNINGS PER
SHARE (ADS) (1) 0.52
WEIGHTED AVERAGE NUMBER
OF OUTSTANDING SHARES 456,410,218
FULLY DILUTED AVERAGE
NUMBER OF SHARES 457,792,534
In thousands of Euro (1) IAS / IFRS
IAS 38 IAS 39 Total 1H2008
Intangible Adj.
Depreciation Deriva- IAS-
tives IFRS
NET SALES 2,753,145
COST OF SALES (760) (909,078)
GROSS PROFIT (760) 1,844,067
OPERATING EXPENSES:
SELLING EXPENSES (1,452) (846,763)
ROYALTIES (68,512)
ADVERTISING EXPENSES 705 705 (194,363)
GENERAL AND ADMINISTRATIVE EXPENSES (4,152) (262,331)
TRADEMARK AMORTIZATION (40,524)
TOTAL 705 (4,900) (1,412,493)
OPERATING INCOME 705 (5,660) 431,574
OTHER INCOME (EXPENSE):
INTEREST EXPENSES 6,287 4,676 (60,128)
INTEREST INCOME 6,265
OTHER - NET 37 37 (1,609)
OTHER INCOME (EXPENSES)-NET 6,324 4,712 (55,473)
INCOME BEFORE PROVISION FOR
INCOME TAXES 705 6,324 (948) 376,101
PROVISION FOR INCOME TAXES (271) (1,746) 2,134 (127,759)
INCOME BEFORE MINORITY INTEREST IN
INCOME OF CONSOLIDATED SUBSIDIARIES 434 4,578 1,186 248,342
MINORITY INTEREST IN INCOME
OF CONSOLIDATED SUBSIDIARIES 5,469 (5,402)
NET INCOME 434 4,578 6,655 242,940
BASIC EARNINGS PER SHARE (ADS) (1) 0.53
FULLY DILUTED EARNINGS PER SHARE
(ADS) (1) 0.53
WEIGHTED AVERAGE NUMBER
OF OUTSTANDING SHARES 456,410,218
FULLY DILUTED AVERAGE NUMBER OF
SHARES 458,013,955
Notes:
(1) Except earnings per share (ADS), which are expressed in Euro
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