07.29.15
$6.9 Billion
KEY EXECUTIVES:
Hubert Sagnières, Chairman & CEO
Géraldine Picaud, Chief Financial Officer
Éric Bernard, Chief Operations Officer, AMERA (Asia-Pacific, Middle East, Russia, Africa)
Patrick Cherrier, President, AMER
Norbert Gorny, Sr. VP Satisloh, Equipments & Consumable activities
Réal Goulet, Sr. VP, Rx Sunwear
Lena Henry, Chief Strategy Officer
Éric Léonard, President, Essilor of America
Bernhard Nuesser, President, Europe
Bertrand Roy, Sr. VP, Strategic Partnerships
Kevin Rupp, Exec. VP, Finance & Administration, Essilor of America
Éric Thoreux, President, Sun, Readers & Photochromics
NO. OF EMPLOYEES: 58,032
GLOBAL HEADQUARTERS: Paris, France
The irony is amusing, to say the least.
Last year, in the wake of a survey that linked digital device usage and visual fatigue, global ophthalmic optics designer/manufacturer Essilor International S.A. bolstered its online presence. “In today’s world, a strong Internet presence is essential,” newly minted Chief Operating Officer Jean Carrier-Guillomet noted in a roundtable interview within the firm’s 2014 annual report. “It’s a powerful channel for visual health information and awareness, as well as providing easy access to simple optical products. Essilor has a role to play in helping eye care professionals embrace this fast-growing channel.”
Even if that role is somewhat paradoxical.
Essilor enhanced its cyber world duties last year with MyOnlineOptical.com, an e-commerce solution that enables eye care professionals to create their own Web-based business, and the $430 million purchase of online vision care retailer Coastal Contacts. The deal—reportedly the largest in Canadian e-commerce company history—increases Essilor’s customer base and strengthens its digital presence in various world markets. It also gives the firm ownership of a Coastal program that allows consumers to sample and buy prescription lenses online.
“With Coastal.com, Essilor is acquiring a recognized online vision care platform. Our commitment is to [help] shape this distribution channel for the benefit of the entire industry as well as consumers,” Essilor Chairman/CEO Hubert Sagnières said when the Coastal deal was announced. “The Internet has an important role to play in helping us fulfill our corporate mission of enabling people to enjoy a better life through better sight. But in our industry, as in many others, the purchasing process is becoming more diversified. The Internet, if used properly, can help to drive market growth by educating consumers and making it more convenient for them to enjoy good visual health.”
The Internet certainly has become quite an effective teacher, but the knowledge often comes at a steep price. A 2014 Ipsos survey found that three-quarters of developed nations’ residents suffer from visual fatigue due to daily digital device use, with smartphones (66 percent) and computers among the worst offenders (64 percent of the 4,000 respondents said they spend more than four hours a day working at a computer screen). Such prolonged screen time increases human exposure to blue light, a type of high energy wavelength emitted from most electronics that ultimately can lead to eye diseases like macular degeneration.
Not quite the ringing endorsement for cyber dominance, particularly for an eye care firm like Essilor, which prides itself on improving and protecting the planet’s sight. Nevertheless, the company forged ahead with its strategy to “meet all the needs of all mobile devices, smartphones, tablets and so on...to fund the growth of this [online] business area in a general way, a global way...” Carrier-Guillomet said.
Makes perfect sense: Online eyewear sales are rising 14 percent annually—more than double the annual growth rates of the global medical device (5.5 percent), medical imaging equipment (5.4 percent) and orthopedic (4.9 percent) markets through the end of this decade, according to industry data. Essilor, naturally, wants to capitalize on that growth.
The company, in fact, is well on its way. A 30 percent spike in FramesDirect and EyeBuyDirect digital revenue as well as strong online contact lens sales in the United States helped boost Essilor’s North American revenues 5 percent last year to 2 billion euros ($2.47 billion). Higher sales of anti-reflective lenses (Crizal UV, Crizal Prevencia), progressive lenses (Varilux, particularly the Varilux S series), photochromic lenses (Transitions) and polarized lenses (Xperio) also contributed to the gain.
“While remaining fully focused on our core business of ophthalmic optics, expanding the scope of our business is helping us to be even more effective in delivering our mission of improving lives by improving sight and seizing new opportunities for growth,” Sagnières said in the company’s 2014 annual report. “We have significantly strengthened our business presence in fast-growing markets, sunglasses and photochromic lenses, on the Internet, and [we] moved closer to the consumer in the marketing of our brands and offerings. 2014 was indeed a good year in terms of growth and profitability.”
Indeed, it was a good year for Essilor, as total revenue jumped 3.7 percent to 5.6 billion euros ($6.89 billion), operating profit surged 15.4 percent to 989 million euros ($1.3 billion) and basic earnings per share rose 6.2 percent to 3.05 euros. Its gross margin (as a percentage of revenue) climbed 2.6 percent to 58.7 percent and total contribution from operations increased 14.9 percent to 1.05 billion euros ($1.45 billion).
Gains in lenses and optical instrument sales fueled much of Essilor’s overall growth in fiscal 2014 (ended Dec. 31), helping to offset losses in equipment and sunglasses/reading glasses. Lenses and optical instrument proceeds swelled 4.3 percent to 4.97 billion euros ($6 billion), driven mostly by strong performances in Latin America and Asia/Pacific/Middle East/Africa.
Executives attributed the 10.8 percent growth in Latin American sales (380.8 million euros; $462 million) to the Brazilian launch of the Varilux S series (designed specifically for those suffering from presbyopia), increased demand for Crizal lenses, double-digit volume growth for Transitions photochromic lenses, and the gradual introduction of Kodak brand lenses throughout the country, with volumes increasing significantly in Brazil’s southern states. The company also benefitted from its partnership with Comprol, a prescription laboratory in Brazil’s richest state. Other Latin American gains came from the Colombian launch of Nikon brand lenses and Essilor’s collaboration with prescription laboratory Servioptica.
Emerging markets single-handedly amplified sales in Asia/Pacific, with India and China both posting double-digit revenue gains over 2013. India’s 20 percent sales jump was derived from various sources, including higher domestic and export proceeds, Crizal’s brand identity, robust growth of Varilux and other progressive lenses, Kodak’s popularity among mid-tier residents and the country’s continued shift from glass to plastic lenses. Kodak was popular in China as well, though part of the Middle Kingdom’s growth came from increased consumer awareness of the damaging effect of ultraviolet light on eye health. South Korean sales slowed due eyewear renewal rate increases, but the downturn was offset by strong performances in Southeast Asia, South Africa, Australia and New Zealand. Overall, Asia/Pacific sales ballooned 8.2 percent to 898 million euros ($1.09 billion).
European revenue barely budged last year, climbing just 0.1 percent to 1.65 billion euros ($2 billion). A contract loss in the second half of 2013 continued to haunt the continent’s German-speaking and Benelux regions, while French sales got off to a slow start. Strong growth in Russia and Eastern Europe kept the geographic market (barely) in the black.
Instruments revenue rose 4.1 percent, courtesy of the company’s lens finishing and optometry business. The European launch of Essilor’s second-generation premium edger, Mr. Blue 2.0, featuring custom lens engraving, helped the company gain new share in the global edging market.
That new market share, however, couldn’t save the firm’s sunglasses/readers division from slipping into arrears—sales fell 1 percent to 503 million euros ($611.3 million) due to “operating difficulties” within its FGX subsidiary, a designer and seller of non-prescription reading glasses. Executives said FGX’s North American sales were impacted by extensive inventory drawdowns, certain new eyewear line postponements and the loss of a large customer account.
Equipment sales slid into the red as well, falling 1.8 percent to 197.3 million euros ($239.8 million) despite a 7.2 percent spike in Q4 revenue.
One of the most stablilizing forces throughout the fiscal year was Essilor’s central mission of “improving lives by improving sight.” The company remained true to its core purpose by implementing various social initiatives, including:
The goal of the new campus is to push the ophthalmic lens’ physical limits to better answer and anticipate consumers’ needs, Essilor executives said. Consolidating research and engineering teams and expertise at a single site will help foster fruitful collaboration, accelerate projects as well as new product and technologies launches. The new campus complements Essilor’s global research efforts, enabling the company to focus on innovation as a key part of its development strategy.
“Vision is our most important sense and plays an essential role in our lives. The new center is a powerful platform for developing tomorrow’s lenses, materials and coatings that will open new perspectives in term of vision correction and protection, and take up the challenge of prevention and visual health,” Sagnières said.
KEY EXECUTIVES:
Hubert Sagnières, Chairman & CEO
Géraldine Picaud, Chief Financial Officer
Éric Bernard, Chief Operations Officer, AMERA (Asia-Pacific, Middle East, Russia, Africa)
Patrick Cherrier, President, AMER
Norbert Gorny, Sr. VP Satisloh, Equipments & Consumable activities
Réal Goulet, Sr. VP, Rx Sunwear
Lena Henry, Chief Strategy Officer
Éric Léonard, President, Essilor of America
Bernhard Nuesser, President, Europe
Bertrand Roy, Sr. VP, Strategic Partnerships
Kevin Rupp, Exec. VP, Finance & Administration, Essilor of America
Éric Thoreux, President, Sun, Readers & Photochromics
NO. OF EMPLOYEES: 58,032
GLOBAL HEADQUARTERS: Paris, France
The irony is amusing, to say the least.
Last year, in the wake of a survey that linked digital device usage and visual fatigue, global ophthalmic optics designer/manufacturer Essilor International S.A. bolstered its online presence. “In today’s world, a strong Internet presence is essential,” newly minted Chief Operating Officer Jean Carrier-Guillomet noted in a roundtable interview within the firm’s 2014 annual report. “It’s a powerful channel for visual health information and awareness, as well as providing easy access to simple optical products. Essilor has a role to play in helping eye care professionals embrace this fast-growing channel.”
Even if that role is somewhat paradoxical.
Essilor enhanced its cyber world duties last year with MyOnlineOptical.com, an e-commerce solution that enables eye care professionals to create their own Web-based business, and the $430 million purchase of online vision care retailer Coastal Contacts. The deal—reportedly the largest in Canadian e-commerce company history—increases Essilor’s customer base and strengthens its digital presence in various world markets. It also gives the firm ownership of a Coastal program that allows consumers to sample and buy prescription lenses online.
“With Coastal.com, Essilor is acquiring a recognized online vision care platform. Our commitment is to [help] shape this distribution channel for the benefit of the entire industry as well as consumers,” Essilor Chairman/CEO Hubert Sagnières said when the Coastal deal was announced. “The Internet has an important role to play in helping us fulfill our corporate mission of enabling people to enjoy a better life through better sight. But in our industry, as in many others, the purchasing process is becoming more diversified. The Internet, if used properly, can help to drive market growth by educating consumers and making it more convenient for them to enjoy good visual health.”
The Internet certainly has become quite an effective teacher, but the knowledge often comes at a steep price. A 2014 Ipsos survey found that three-quarters of developed nations’ residents suffer from visual fatigue due to daily digital device use, with smartphones (66 percent) and computers among the worst offenders (64 percent of the 4,000 respondents said they spend more than four hours a day working at a computer screen). Such prolonged screen time increases human exposure to blue light, a type of high energy wavelength emitted from most electronics that ultimately can lead to eye diseases like macular degeneration.
Not quite the ringing endorsement for cyber dominance, particularly for an eye care firm like Essilor, which prides itself on improving and protecting the planet’s sight. Nevertheless, the company forged ahead with its strategy to “meet all the needs of all mobile devices, smartphones, tablets and so on...to fund the growth of this [online] business area in a general way, a global way...” Carrier-Guillomet said.
Makes perfect sense: Online eyewear sales are rising 14 percent annually—more than double the annual growth rates of the global medical device (5.5 percent), medical imaging equipment (5.4 percent) and orthopedic (4.9 percent) markets through the end of this decade, according to industry data. Essilor, naturally, wants to capitalize on that growth.
The company, in fact, is well on its way. A 30 percent spike in FramesDirect and EyeBuyDirect digital revenue as well as strong online contact lens sales in the United States helped boost Essilor’s North American revenues 5 percent last year to 2 billion euros ($2.47 billion). Higher sales of anti-reflective lenses (Crizal UV, Crizal Prevencia), progressive lenses (Varilux, particularly the Varilux S series), photochromic lenses (Transitions) and polarized lenses (Xperio) also contributed to the gain.
“While remaining fully focused on our core business of ophthalmic optics, expanding the scope of our business is helping us to be even more effective in delivering our mission of improving lives by improving sight and seizing new opportunities for growth,” Sagnières said in the company’s 2014 annual report. “We have significantly strengthened our business presence in fast-growing markets, sunglasses and photochromic lenses, on the Internet, and [we] moved closer to the consumer in the marketing of our brands and offerings. 2014 was indeed a good year in terms of growth and profitability.”
Indeed, it was a good year for Essilor, as total revenue jumped 3.7 percent to 5.6 billion euros ($6.89 billion), operating profit surged 15.4 percent to 989 million euros ($1.3 billion) and basic earnings per share rose 6.2 percent to 3.05 euros. Its gross margin (as a percentage of revenue) climbed 2.6 percent to 58.7 percent and total contribution from operations increased 14.9 percent to 1.05 billion euros ($1.45 billion).
Gains in lenses and optical instrument sales fueled much of Essilor’s overall growth in fiscal 2014 (ended Dec. 31), helping to offset losses in equipment and sunglasses/reading glasses. Lenses and optical instrument proceeds swelled 4.3 percent to 4.97 billion euros ($6 billion), driven mostly by strong performances in Latin America and Asia/Pacific/Middle East/Africa.
Executives attributed the 10.8 percent growth in Latin American sales (380.8 million euros; $462 million) to the Brazilian launch of the Varilux S series (designed specifically for those suffering from presbyopia), increased demand for Crizal lenses, double-digit volume growth for Transitions photochromic lenses, and the gradual introduction of Kodak brand lenses throughout the country, with volumes increasing significantly in Brazil’s southern states. The company also benefitted from its partnership with Comprol, a prescription laboratory in Brazil’s richest state. Other Latin American gains came from the Colombian launch of Nikon brand lenses and Essilor’s collaboration with prescription laboratory Servioptica.
Emerging markets single-handedly amplified sales in Asia/Pacific, with India and China both posting double-digit revenue gains over 2013. India’s 20 percent sales jump was derived from various sources, including higher domestic and export proceeds, Crizal’s brand identity, robust growth of Varilux and other progressive lenses, Kodak’s popularity among mid-tier residents and the country’s continued shift from glass to plastic lenses. Kodak was popular in China as well, though part of the Middle Kingdom’s growth came from increased consumer awareness of the damaging effect of ultraviolet light on eye health. South Korean sales slowed due eyewear renewal rate increases, but the downturn was offset by strong performances in Southeast Asia, South Africa, Australia and New Zealand. Overall, Asia/Pacific sales ballooned 8.2 percent to 898 million euros ($1.09 billion).
European revenue barely budged last year, climbing just 0.1 percent to 1.65 billion euros ($2 billion). A contract loss in the second half of 2013 continued to haunt the continent’s German-speaking and Benelux regions, while French sales got off to a slow start. Strong growth in Russia and Eastern Europe kept the geographic market (barely) in the black.
Instruments revenue rose 4.1 percent, courtesy of the company’s lens finishing and optometry business. The European launch of Essilor’s second-generation premium edger, Mr. Blue 2.0, featuring custom lens engraving, helped the company gain new share in the global edging market.
That new market share, however, couldn’t save the firm’s sunglasses/readers division from slipping into arrears—sales fell 1 percent to 503 million euros ($611.3 million) due to “operating difficulties” within its FGX subsidiary, a designer and seller of non-prescription reading glasses. Executives said FGX’s North American sales were impacted by extensive inventory drawdowns, certain new eyewear line postponements and the loss of a large customer account.
Equipment sales slid into the red as well, falling 1.8 percent to 197.3 million euros ($239.8 million) despite a 7.2 percent spike in Q4 revenue.
One of the most stablilizing forces throughout the fiscal year was Essilor’s central mission of “improving lives by improving sight.” The company remained true to its core purpose by implementing various social initiatives, including:
- Brazil’s Instituto Ver & Viver (an Essilor Group program) signed an agreement with the inclusive health unit of the country’s NGO Voluntários do Sertão, which runs a large number of ophthalmology clinics that offer eye care to some of the most deprived Brazilians. For patients with simple prescriptions, the Instituto Ver & Viver provides Ready-to-Clip lenses developed by the 2.5 NVG Division of Essilor. This partnership enabled 30,000 Brazilians to benefit from an affordable corrective solution.
- In Tunisia, the Essilor Vision Foundation and Essilor SIVO laboratories provided vision care to 1,500 students. In a one-week span, 70 volunteers traveled 2,000 kilometers visiting several regions of the country to run vision screening sessions and provide 500 pairs of eyeglasses to children between 5 and 16 years old.
- Essilor’s Eye Mitra program provided a local eye care service for India’s rural and semi-urban communities. With support from external partners, young people in rural communities were recruited and trained to conduct basic vision tests and dispense corrective eyeglasses. Eye Mitra participants received financial aid and the necessary equipment to provide eye health services in their own villages. Roughly 330 trained and operational Eye Mitra players provided 35,000 people with their first corrective eyeglasses.
- Essilor partnered with Le Secours Populaire Français as part of La Journée des Oubliés des Vacances, a one-day event that provided underprivileged French children with a vacation. Five thousand children were treated to a day by the sea at Ouistreham, where they learned about the dangers of UV exposure and received a pair of FGX sunglasses.
- Essilor launched a new vision ambassadors program in China to improve access to eye care for rural residents. Run in partnership with local hospitals, the program involved training 300 ambassadors to serve an area that boasts a population of 178 million people. In addition to simple health consultations, the ambassadors were trained to conduct vision tests and refer those with poor sight to mobile clinics or local eye care professionals.
The goal of the new campus is to push the ophthalmic lens’ physical limits to better answer and anticipate consumers’ needs, Essilor executives said. Consolidating research and engineering teams and expertise at a single site will help foster fruitful collaboration, accelerate projects as well as new product and technologies launches. The new campus complements Essilor’s global research efforts, enabling the company to focus on innovation as a key part of its development strategy.
“Vision is our most important sense and plays an essential role in our lives. The new center is a powerful platform for developing tomorrow’s lenses, materials and coatings that will open new perspectives in term of vision correction and protection, and take up the challenge of prevention and visual health,” Sagnières said.