Retail Division in North America posted a 0.9% growth in comparable
store sales FY 09 saw continued strong cash flow generation and
further reduction in net debt FY 09 consolidated sales again over
the Euro 5 billion mark MILAN, Jan. 25 /PRNewswire-FirstCall/ --
The Board of Directors of Luxottica Group S.p.A. (MTA: LUX; NYSE:
LUX), a leader in the design, manufacturing and distribution of
premium fashion, luxury and sports eyewear, met today to review
consolidated sales results for the fourth quarter and full year
2009. Fourth quarter 2009(1) (Euro/million) 4Q09 4Q08 Change -6.4%
(-1.1% at constant Consolidated Sales 1,157.1 1,236.5 exchange
rates(2)) Consolidated Sales adj. for the 53rd week(3) 1,149.4
1,190.5 -3.4% (+2.1% at constant exchange rates(2)) -2.4%
(unchanged at constant -- Wholesale Division 448.9 459.7 exchange
rates(2)) -8.8% (-1.7% at constant -- Retail Division 708.2 776.8
exchange rates(2)) Adj. for the 53rd -4.1% (+3.4% at constant
week(3) 700.6 730.8 exchange rates(2)) ----------------- -----
----- ------------------------ FY 2009(1) (Euro/million) FY09 FY08
Change -2.1% (-4.5% at constant Consolidated Sales 5,094.3 5,201.6
exchange rates(2)) Consolidated Sales adj. for the 53rd week(3)
5,086.7 5,155.6 -1.3% (-3.8% at constant exchange rates(2)) -6.6%
(-6.8% at constant -- Wholesale Division 1,955.3 2,092.5 exchange
rates(2)) +1.0% (-3.0% at constant -- Retail Division 3,139.0
3,109.1 exchange rates(2)) Adj. for the 53rd +2.2% (-1.8% at
constant week(3) 3,131.3 3,063.2 exchange rates(2))
----------------- ------- ------- ------------------------
Consolidated sales for the fourth quarter and FY 2009 In the fourth
quarter of 2009, markets continued to stabilize. In particular, the
final two months of the year saw encouraging signs of growth and
were particularly positive for Luxottica. Thanks to these results,
Luxottica's sales performance for the fourth quarter was the best
of the year at constant exchange rates. On this basis, the Company
expects a return to "normal" (in terms of sales growth, margin
improvement and debt reduction) in FY 2010. In particular, in
November and December, consolidated sales were up by 4.7% over the
same period the previous year, at constant exchange rates and
adjusting for the additional week of sales(3). The signs of
recovery seen in the third quarter in several geographies,
including Western Europe and the United States, were reaffirmed in
the fourth quarter. Emerging markets continued to perform well. The
fourth quarter also saw an improvement in comparable store sales(4)
by the Retail Division in North America: up by 0.9% (up by 2.9% in
November-December alone). This was followed by encouraging signs in
the first weeks of 2010. Thanks to positive results posted by both
Divisions in all market segments, sales in US Dollars in North
America for the fourth quarter started to grow again for the first
time in the year, showing an increase by 5.9% over the same quarter
last year, adjusted for the additional week of sales(3). After the
gradual improvement throughout 2009, consolidated sales for the
fourth quarter were Euro 1,149.4 million, up by 2.1% at constant
exchange rates and when adjusted for the additional week of
sales(3). "Fiscal 2009 was a particularly demanding year and in
many ways "unique" in the history of our Group," said Andrea
Guerra, chief executive officer of Luxottica Group. "The world
around us underwent a structural re-adjustment, especially in the
first half of the year, followed by stabilization and signs of
recovery in the second half. In this scenario, Luxottica
nevertheless produced solid results, with consolidated sales
comfortably above Euro 5 billion and substantially in line with the
previous year. These results, which were helped in a meaningful way
by the double-digit growth seen by the Ray-Ban and Oakley brands,
confirmed the strength of Luxottica's business model. "The Group's
performance in North America should also be noted, as this is a
market of paramount importance for Luxottica. Following several
quarters of hard work, for the fourth quarter both divisions were
back to growth, laying the groundwork for further improvement in
the business. "Luxottica believes that the overall scenario seems
to have stabilized by now. Measures taken during the course of last
year will take full effect in 2010, a year in which the Group
expects to see a return to growth, a key element of its DNA. With
respect to this, the first signs in the new year were encouraging."
Thanks to measures taken to face a year as challenging as 2009,
consolidated sales for the full year remained over the Euro 5
billion mark, at Euro 5,086.7 million when adjusted for the
additional week of sales(3), down by 1.3% at current exchange rates
and down by 3.8% at constant exchange rates. For the previous year,
the Group had posted the best results in its history. On the basis
of current market conditions, the Company expects that FY 2010 will
mark a return to "normal" for Luxottica. This would result in
growth in sales, a solid and more than proportional increase in
margins and an appreciable reduction in the ratio of net debt to
EBITDA. In 2010, the Company expects positive performance in
Europe, the US and especially in emerging markets. Initiatives
already underway are expected to bring about a strong increase in
margins in both Divisions, but especially in wholesale. There will
continue to be a sharp focus on new business development
opportunities and investments in systems and infrastructure with
the potential to generate further benefits. Thanks to tight control
of working capital and despite a total cash dividend pay-out in the
fourth quarter of Euro 100.8 million, the Group enjoyed strong cash
flow generation, which remained at levels of excellence. As a
result, estimated consolidated net debt(5) at December 31, 2009 is
expected to reflect a further improvement to approximately Euro
2,350 million, compared with consolidated net debt of Euro 2,414
million at September 30, 2009 and Euro 2,950 million at December
31, 2008. Wholesale Division In the fourth quarter of 2009,
wholesale sales were in line with those of the previous year,
reflecting stabilization in many markets, successful commercial
measures and continuing strong performance by brands like Ray-Ban
and Oakley. During the quarter, volumes sold by the Wholesale
Division rose by approximately 6%, a result that was unfortunately
offset by a "lighter" mix and the impact of exchange rates. There
were also some modest signs of recovery in the premium-luxury
segment. As a result, the Division starts 2010 with a strong order
portfolio. Sales for the quarter were Euro 448.9 million (flat at
constant exchange rates and down by 2.4% at current exchange
rates). The Division posted full-year sales of Euro 1,955.3 million
(down by 6.6% at current exchange rates and by 6.8% at constant
exchange rates). By geographic region, Luxottica enjoyed strong
sales performance in Europe, emerging markets and North America.
Results were on the other hand negative in Japan and Eastern
Europe, though the latter enjoyed some improvement. Retail Division
In the fourth quarter, the Retail Division showed signs of
recovery, due in large part to the actions put in place in 2009. In
terms of comparable store sales(4), in the fourth quarter the
"optical prescription" business in North America rose by 1.6%
(posting positive results for the first time in eight quarters)
with a small but significant improvement by LensCrafters (up by
0.1% for the quarter and by 2.6% in the November-December period,
with positive performances across all States in the US) and
particularly positive results by Sears Optical and Target Optical
(up by 11.0% for the quarter). Sunglass Hut, the Group's sun
specialty chain that operates globally, posted comparable store
sales(4) for the quarter almost in line with the previous year,
with strong performances in South Africa and the UK and continuous
improvement in North America (up by 1.3% in the November-December
period). During the first three quarters of 2009, retail results in
the Asia Pacific region were constantly better than those of other
geographic regions. For the fourth quarter, comparable store
sales(4) for the region contracted when compared with the same
quarter from the previous year, which had been a positive period
for the region. Sales for the quarter were Euro 700.6 million, when
adjusted for the additional week of sales(3), up by 3.4% at
constant exchange rates and down by 4.1% at current exchange rates.
For the full year, sales were Euro 3,131.3 million adjusting for
the additional week of sales(3), up by 2.2% at current exchange
rates and down by 1.8% at constant exchange rates. The Company's
full results for fiscal year 2009 are expected to be approved by
the Board of Directors on March 1, 2010. On the following day,
starting at 9:30 AM GMT, Luxottica will host an investor
presentation in London to review the results with the financial
community. This presentation will be available through a live
webcast at http://www.luxottica.com/. http://www.luxottica.com/
Notes to the press release 1. All comparisons, including percentage
changes, are between the three or twelve-month periods ended
December 31, 2009 and 2008, as indicated, in accordance with U.S.
GAAP. 2. Operating measures that assume constant exchange rates
between the fourth quarter of 2009 and the fourth quarter of 2008
and between fiscal year 2009 and fiscal year 2008 are calculated
using the average exchange rates for the respective three and
twelve-month periods ended December 31, 2008, which were Euro
1=US$1.3180 and Euro 1=US$1.4707, respectively. 3. In 2008, the
fiscal year for the Retail Division in North America included 53
weeks; in 2009, the fiscal year for the Retail Divisions in Asia
Pacific, Greater China and South Africa included 53 weeks. 4.
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. 5. Net debt is a non-U.S. GAAP measure. For
additional disclosure regarding such measure, please refer to the
tables attached. Luxottica Group S.p.A. Luxottica Group is a leader
in premium fashion, luxury and sports eyewear, with over 6,200
optical and sun retail stores in North America, Asia-Pacific,
China, South Africa and Europe and a strong and well balanced brand
portfolio. Luxottica's key house brands include Ray-Ban, the best
known sun eyewear brand in the world, Oakley, Vogue, Persol, Oliver
Peoples, Arnette and REVO, while license brands include Bvlgari,
Burberry, Chanel, Dolce & Gabbana, Donna Karan, Polo Ralph
Lauren, Prada, Salvatore Ferragamo, Tiffany and Versace. In
addition to a global wholesale network covering 130 countries, the
Group manages leading retail brands such as LensCrafters and Pearle
Vision in North America, OPSM and Laubman & Pank in
Australasia, LensCrafters in Greater China and Sunglass Hut
globally. The Group's products are designed and manufactured in six
Italy-based manufacturing plants, two wholly-owned plants in China
and a sports sunglass production facility in the U.S. In 2009,
Luxottica Group posted consolidated net sales of Euro 5.1 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 manage the effect of the poor current
global economic conditions on our business, the ability to
successfully acquire new businesses and integrate their operations,
the ability to predict future economic conditions and changes in
consumer preferences, the ability to successfully introduce and
market new products, the ability to maintain an efficient
distribution network, 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, 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. Non-U.S. GAAP Measure: Net Debt Net debt: Net debt means the
sum of bank overdrafts, current portion of long-term debt and
long-term debt, less cash. Net debt is not a measure of performance
under accounting principles generally accepted in the United States
(U.S. GAAP). We include it 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; --
properly define the metrics used and confirm their calculation; and
-- share these measures with all investors at the same time. Net
debt 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, this non-GAAP measure should be
used as a supplement to U.S. GAAP results to assist the reader in
better understanding the operational performance of the Company.
The Company cautions that this measure is not a defined term under
U.S. GAAP and its definition should be carefully reviewed and
understood by investors. Investors should be aware that Luxottica
Group's method of calculating net debt may differ from methods used
by other companies. The Company recognizes that the usefulness of
net debt as an evaluative tool may have certain limitations,
including: -- Net debt 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 net debt as one of several comparative tools, together
with U.S. GAAP measurements, to assist in the evaluation of our
operating performance and leverage. See the table on the following
page for a reconciliation of net debt to long-term debt, which is
the most directly comparable U.S. GAAP financial measure. Non-U.S.
GAAP Measure: Net debt Millions of Euro Dec 31, Sept. 30, 2008 2009
Dec 31, 2009 (actual) (actual) (est.)(1) -------- ----------
------------- Long-term debt 2,519.3 2,135.3 2,404.2 (+) ---
Current portion of long- term debt (+) 286.2 247.8 166.3 (+) ---
Bank overdrafts (+) 432.5 362.1 149.0 ------------------- -----
----- ----- Cash (-) (288.5) (331.2) 369.5 Net debt (=) 2,949.5
2,414.1 2,350.0 1. December 31, 2009 figures are estimates only.
Actual figures may differ from these estimated amounts due to,
among other things, adjustments that may be required in connection
with the finalization of our year-end accounts. DATASOURCE:
Luxottica Group S.p.A. CONTACT: Ivan Dompe, Group Corporate
Communications Director, +39-(02)-8633-4726, , or Luca Biondolillo,
SVP, International Corporate Communications, +1-516-918-3100, , or
Alessandra Senici, Group Investor Relations Director,
+39-02-8633-4038, Web Site: http://www.luxottica.com/
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