Essilorluxottica: The momentum of the EssilorLuxottica optical group held up at the end of the year, but its profitability is disappointing
(BFM Bourse) – The eyewear manufacturer and manufacturer of corrective lenses recorded a sharp increase in its results over the past year. But the adjusted operating margin is below expectations.
EssilorLuxottica occupies the unenviable place of the red lantern of the CAC 40 this Thursday. annual accounts below expectations.
Over the full year, the turnover of the group resulting from the merger between the French Essilor and the Italian Luxottica increased by 23.6% and 16.6% at constant exchange rates. Its adjusted revenue increased by 13.9% excluding currency impact to 24.49 billion euros.
In the fourth quarter alone, revenues reached 6.106 billion euros, reflecting growth excluding currency effects of 3.9%, lower than the figure of 4.1% expected by the consensus of analysts, quoted by UBS. This quarterly growth is the weakest in 2022, EssilorLuxottica having suffered from an unfavorable comparison base, with a very dynamic end of 2021 (up 11% compared to the same period of 2019) .
Wage cost inflation
The group was nevertheless supported by the good performance of European countries, with growth of 6.2% at constant exchange rates in the region. Asia-Pacific also held up well, with revenue growth of 3.1% despite the spread of Covid-19 in China at the end of the year. UBS also believes that North America is showing signs of better health, with revenue up 2.7% year-on-year.
The main criticism made by analysts of the copy made by the Franco-Italian company concerns profitability. “The margin is a little lower than expected,” notes Stifel. Over the whole of 2022, the adjusted operating margin stood at 16.8%, compared to 16.1% in 2021, while the design offices were expecting 17%. The group had to deal with a “significant” increase in salary costs.
Chief Financial Officer Stefano Grassi told analysts that the group felt the impact of wage inflation more in the second half than in the first due to the group’s strong presence in “retail” (stores). . The company’s net profit increased by 48.6% in 2022 to 2.15 billion euros.
EssilorLuxottica did not give a quantified outlook for the current year. In September, the company indicated that it was aiming for “mid-single digit” annual growth over the period 2022-2026, that is to say around 5% to achieve revenues of between 27 billion and 28 billion euros. in 2026, while the adjusted operating margin should be between 19% and 20% by the same date.
Julien Marion – ©2023 BFM Bourse
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