EssilorLuxottica Reports Strong 2023 Financial Results with €25.4 Billion in Revenue, Driven by Asia-Pacific and Latin America

Feb 19, 2024 11:16 CST Updated 11:16

EssilorLuxottica

Eyewear Products Sales, Manufacturer

Source: Eye Future ；Editor: Bai Xiaofei

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Recently, EssilorLuxottica, the European eyewear giantEssilorLuxotticaAnnounced Key Financial Data for the Fiscal Year 2023 and the Fourth Quarter Ended December 31:2023 Full-Year Revenue: €25.395 Billion (Approx. RMB 197 Billion)(+7.1% at constant exchange rates), up 3.7% year-on-year, with an operating margin of 16.5%.

Driven by the Chinese and Brazilian markets,Fourth Quarter Revenue of 6.25 Billion Euros(Approximately 48.5 billion yuan)(+7.1% at constant exchange rates), up 2.4% year-on-year. In terms of regions,Asia-Pacific and Latin America Shine This Quarter, calculated at fixed exchange rates,Asia-Pacific (+10.3%) and Latin America (+12.7%) both achieved double-digit growth., driven respectively by major markets such as China and Brazil.

▲Data source: Company official website

# Annual Performance Details

The company passedEnhance Synergies and Achieve Robust Revenue Growth, withstood the impact of rising costs and persistent inflation.

(1) Analysis by Department

In terms of departments, calculated at fixed exchange rates,Professional Solutions Department (Wholesale)Achieving 7.4% Growth, Annual Revenue12.199 billion euros；Direct-to-Consumer Sector (Retail)Achieving 6.9% Growth, Annual Revenue13.195 billion euros。

▲Data source: Company official website

(II) Analysis by Region

In terms of regions,North America remains the group's largest market,The Asia-Pacific market has also shown a strong growth momentum.. In addition,Developing regions performed well this year, calculated at constant exchange rates,The Asia-Pacific region (+14.3%) achieved double-digit growth, primarily driven by key markets such as China.。The full-year performance also reflected this situation, with growth rates in the Asia-Pacific region (+14.3%) and Latin America (+9.9%) outpacing those in the EMEA region (+8.2%) and North America (+4.2%).

▲Data source: Company official website

# Q4 Performance Details

(1) Analysis by Department

In terms of departments, in the fourth quarter of 2023, at constant exchange rates,Professional Solutions Department (Wholesale)Achieved 8.1% Growth, Quarterly Revenue€2.986 billion；Direct-to-Consumer Sector (Retail)Achieving 6.1% Growth, Quarterly Revenue€3.264 billion。

▲ Data source: Company official website

(2) Analysis by Region

In terms of regions,The Asia-Pacific region has achieved double-digit revenue growth for the fourth consecutive quarter this year. The Professional Solutions division saw a double-digit increase in income.Strong Growth in China's Core BusinessWith Stellest as the main lens category, revenue more than doubled again, and the frame business also achieved strong growth.

At constant exchange rates,In the fourth quarter, both the Asia-Pacific region (+10.3%) and Latin America (+12.7%) achieved double-digit growth.. Mature regions also made contributions, with North America (+5.9%) showing a clear acceleration compared to the third quarter, driven by wholesale and retail; the growth in the EMEA (Europe, Middle East, and Africa) region (+6.4%) confirmed the strong momentum of the two business segments in the fourth quarter.

▲Data source: Company's official website

# Executive Commentary

EssilorLuxottica Chairman and CEO Francesco Milleri and Deputy CEO Paul du Saillant commented: "We are proud to share these strong results with our stakeholders, once again achieving (at constant exchange rates)More than 7% revenue growthFor the accelerated growth in the fourth quarter, each of our regions has contributed its part. Our profitability remains strong,Adjusted Group Net Profit Hits Record Near €3 Billion, Free Cash Flow Reaches €2.4 Billion。”

"This is also a year of significant investment for us: continuously expanding into new product categories, such as Stellest in the optical lenses field and Ray-Ban Meta in the wearable devices sector, while adding much-loved (licensed) brands like Moncler and Jimmy Choo to our portfolio.Leverage artificial intelligence and business intelligence to expand our operational footprint and strengthen global retail operations."This will support the company's development and industry transformation in the next decade."

# Brand Strategy of Strong Alliance

In 2018, Luxottica Group and Essilor Group officially completed the merger, which was also called by the industry at the timeThe largest cross-border corporate merger in Europe. The former was founded in Milan, Italy in 1961.Eyewear Retail Giant; the latter was founded in France, and isThe world's leading ophthalmic optics company, with over 170 years of experience in the research, development, and design of eye health products and solutions.

In fact, before the official completion of the merger in 2018, Essilor Group and Luxottica Group had already maintained a long-standing and close cooperation in the lens business. After the merger, both partiesFirst, undergo three years of parallel operation, then proceed with business integration to enhance synergies between each other.。

Vertically integrated business model now becomes a major competitive advantage for the group., from product development, lens and eyewear manufacturing, to distribution, promotion, and end sales, establishing a complete chain,Occupying a favorable position in the upstream and downstream of the eyewear industry. GroupTargeting the Chinese eyewear market with enormous potential,Establishing large-scale lens and frame production factories in the Chinese market, and carrying out a series of acquisitions and equity investments in domestic eyewear brands and chain eyewear stores.。

1995 marked the entry of EssilorLuxottica into the Chinese market, with the establishment of the first lens manufacturing plant in Songjiang, Shanghai. In 1997, Luxottica Group invested in building the Dongguan Huahong factory in Dongguan, Guangdong, initiating its manufacturing and production in China.Following this, EssilorLuxottica leveraged its strengths in wholesale and retail operations to acquire three chain eyewear store brands—Beijing Xueliang, Guangzhou Minglang, and Shanghai Modern Optics—between 2005 and 2006. Its LensCrafters brand also officially entered the Chinese market in 2006.

Since the merger in 2018, EssilorLuxottica has participated in the China International Import Expo (CIIE) for five consecutive years, continuously expanding its business in the Chinese market and increasing investment in research and development. In 2019, EssilorLuxottica established the Vision Care Innovation Center in Shanghai and set up the Eyewear Innovation Center and the Smart Eyewear R&D department in Dongguan, serving not only the Chinese market but also the group's global sales network.

Moreover, EssilorLuxottica also leverages the integration advantages of its optometric technology and retail channel resources.Deepen the Layout of Eye Health ServicesIn 2022, the group introduced the Essilor Vision Center at the LensCrafters store in Beijing Jinyuan New YaSha Mall, further meeting the needs of Chinese consumers for professional eye health services and personalized styling, setting a new benchmark in the industry for vision care and consumer experience.

# Company Profile

EssilorLuxottica Group (ELSX.EUR) is aItaly-France Vertically Integrated Multinational Corporation, headquartered in Paris, was established on October 1, 2018, through the merger of Italy's Luxottica and France's Essilor. The groupDesign, manufacture and sale of ophthalmic lenses, optical instruments, prescription glasses and sunglasses。

Essilor International S.A. is an optical equipment company based in France.Founded in 1972, through the merger of Essel and Silor,Headquartered in Charenton-le-Pont, France,Now isOne of the largest lens manufacturers in the world。In 1959, Essilor invented the world's first progressive lens, the globally renowned Varilux lens.

EssilorLuxottica, isThe World's Largest Sunglasses CompanyFounded in Italy in 1961, EssilorLuxottica has a market share of over 80%. It has vertically integrated the entire supply chain, with operations covering production, wholesale, and retail. Its brands include LensCrafters, Ray-Ban, Oakley, and luxury brands such as Chanel, Prada, Armani, Burberry, and Versace’s sunglasses businesses.

On January 17, 2017, Luxottica announced that it would merge with French lens manufacturer Essilor. On October 1, 2018, the new companyEstablishment of EssilorLuxotticaThe new company is formed by the merger of two companies, but currently, the operations of the two parts remain relatively independent.