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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  EssilorLuxottica    EL   FR0000121667

ESSILORLUXOTTICA

(EL)
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Real-time Estimate Quote. Real-time Estimate Tradegate - 09/29 03:59:59 pm
115.425 EUR   +2.15%
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Ray Bans maker Essilorluxottica sees growing demand, for glasses driving sales, profits to 2023

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09/25/2019 | 10:19am EDT
FILE PHOTO: Sunglasses from Ray-Ban are on display at an optician shop in Hanau

PARIS (Reuters) - Growing demand for vision correction should boost sales of Ray Bans and other eyeglasses, EssilorLuxottica said on Wednesday, with profits also driven by cost cuts of up to 600 millions euros (£527.71 million) a year from 2022 following the merger of French lenses specialist Essilor and Italian spectacles maker Luxottica.

PARIS (Reuters) - Growing demand for vision correction should boost sales of Ray Bans and other eyeglasses, EssilorLuxottica said on Wednesday, with profits also driven by cost cuts of up to 600 millions euros (£527.71 million) a year from 2022 following the merger of French lenses specialist Essilor and Italian spectacles maker Luxottica.

EssilorLuxottica is targeting mid-single digit sales growth at constant exchange rates for the next five years, it said in a presentation on the company website ahead of an investor day in London.

Investors and analysts including an activist U.S. hedge fund have been keen to learn how the company will achieve synergies and organise senior management after leadership battles hampered the 48 billion euro merger.

Adjusted net profit, which strips out acquisitions and other costs, would be equivalent to 1 to 1.5 times sales growth, the company said. In 2018, sales at EssilorLuxottica were up 3.2% at 16.1 billion euros.

EssilorLuxottica said it was "on track to achieve synergy targets", putting forward some 160 dedicated projects involving more than 800 employees out of a global workforce of more than 150,000.

Supply chains of both companies are to be united while the network of laboratories are reshaped to improve efficiency. The company is also searching hire a CEO by 2020.

Synergies were at the core of the 48 billion euro merger of Essilor, known for its Varilux lenses, and Luxottica - the owner of brands such as Ray-Ban, Oakley or Persol.

The deal was presented in 2017 as a "merger of equals." But the combination derailed into a row between Luxottica's founder Leonardo Del Vecchio and Essilor's Chief Executive Officer Hubert Sagnieres.

The sides reached a truce in May but the company still needs to find a new CEO. It has set a deadline for coming up with a name by the end of 2020, and must prove it can deliver on financial goals.

Another challenge lies ahead as the company signalled its intention in July to buy Dutch opticians group GrandVision for up to 7.2 billion euros in cash, a transaction expected to close by mid 2021.

Unhappy shareholders who argue that the corporate integration of Essilor and Luxottica is undermined by a "crisis of governance" could also voice concern in the months to come.

Reuters reported in August that Third Point, a U.S. hedge fund with some $15 billion in assets and known for pushing changes at companies where it invests money, had built a stake in EssilorLuxottica.

(Reporting by Matthias Blamont; Editing by David Gregorio)

Stocks mentioned in the article
ChangeLast1st jan.
ESSILORLUXOTTICA 2.12% 115.4 Real-time Quote.-16.79%
GRANDVISION N.V. -0.21% 23.8 Delayed Quote.-13.02%
JUST GROUP PLC -1.63% 43.4 Delayed Quote.-44.15%
THE GLOBAL LTD. -7.21% 206 End-of-day quote.-56.26%
VISION INC. 2.73% 791 End-of-day quote.-56.35%
WILL GROUP, INC. 3.19% 874 End-of-day quote.-30.19%
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Financials
Sales 2020 14 697 M 17 259 M 17 259 M
Net income 2020 952 M 1 118 M 1 118 M
Net Debt 2020 3 127 M 3 673 M 3 673 M
P/E ratio 2020 50,8x
Yield 2020 1,08%
Capitalization 50 312 M 59 066 M 59 082 M
EV / Sales 2020 3,64x
EV / Sales 2021 2,97x
Nbr of Employees 150 000
Free-Float 62,6%
Chart ESSILORLUXOTTICA
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Technical analysis trends ESSILORLUXOTTICA
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Income Statement Evolution
Consensus
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Buy
Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 125,67 €
Last Close Price 115,40 €
Spread / Highest target 30,0%
Spread / Average Target 8,90%
Spread / Lowest Target -22,0%
EPS Revisions
Managers
NameTitle
Paul du Saillant Chief Executive Officer & Director
Leonardo del Vecchio Executive Chairman & Chief Executive Officer
Jean Carrier-Guillomet Co-Chief Operating Officer
Stefano Grassi Co-Chief Financial Officer
David Wielemans Co-Chief Financial Officer
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