Hubert Sagnières, Chairman and CEO
Laurent Vacherot, President and COO
Jean Carrier-Guillomet, COO
Paul du Saillant, COO
Hilary Halper, CFO
Jayanth Bhuvaraghan, Chief Mission Officer
Bernhard Nuesser, President Online
Jeremy Teo, Chief Strategy Officer
Éric Thoreux, President Sun, Readers and China
Eric Leonard, President, Essilor of America Inc.
NO. OF EMPLOYEES: 67,000
GLOBAL HEADQUARTERS: Charenton-le-Pont, France
Presbyopes are a challenging lot.
They’re the folks suffering from presbyopia (age-related farsightedness, i.e., the inability to focus clearly on close-up objects). Though it sounds easily remediable, the condition actually can be tricky to treat depending on its severity and age of the person.
Reading glasses (readers), for example, usually correct the problem in newly diagnosed presbyopes, but this solution can trigger eye fatigue. Bifocals, on the other hand, are common in older patients with deteriorating (near) vision, though conventional lined lenses often cause image “jump”—the shifting of images as the eye passes from the lens’s distance portion to its magnifying segment. Some bifocals control image jump better than others; those with a softer line between lenses typically cause less eye stress during crossovers. A hard line, conversely, requires a sharper, more abrupt transition, and can be jarring for people who are unaccustomed to the effect.
Progressive (“no-line”) lenses eliminate image jump, as they seamlessly transition between three different viewing fields (distant, intermediate, close). But these lenses generally are more expensive, have longer adjustment periods, and frequently result in peripheral image distortion (a.k.a., the “swim effect”). Progressives also are prone to geometric distortions along the power change gradient, and require a careful fit to avoid on-axis blur, narrow vision fields, and one-eyed clear vision.
Moreover, both progressives and straight-line bifocals are still fairly inept at mastering intermediate vision or defending against harmful blue light—the kind emitted from the sun, fluorescent bulbs, flat-screen televisions, and most electronic devices.
French lensmaker Essilor International SA, however, is addressing those shortfalls with the development of corrective lenses for improved intermediate vision, reduced reflection/glare, and blue light protection. The company’s Varilux X series—touted as the first progressive lens for the “modern world”—is engineered to optimize vision for tasks within arm’s reach (16-28 inches); its Xtend technology increases both the depth and breadth of simultaneous vision for multiple near distances, giving Gen Xers the ability to switch between smartphone texting, face-to-face conversations, and work emails with minimal head movement.
The new lens meets 75 percent of a presbyope’s visual needs within arm’s length—16 percentage points higher than the average match for alternative premium progressive designs, Essilor claims.
“Today, most of us work in the middle distance, on computer screens or other digital devices, and this is where traditional varifocal lenses are inadequate—intermediate distance isn’t great,” Dr. Ryan Powell, president of Vision Source Eye Care in Kansas City, Mo., noted in Essilor’s 2017 annual report. “However, the Varilux X series allows you to transition smoothly from far range to close range. It’s the first progressive lens to offer smooth transition for high-quality vision at every distance. In our practice we’re prescribing for our patients the best options for them. The Varilux X lens with that improved intermediate distance is fantastic. Our patients are loving that lens.”
So is Essilor, but for completely different reasons: The Varilux X helped boost the company’s Lenses and Optical Instruments revenue 4.5 percent last year to 6.5 billion euros. Sales also rose in the division’s four geographic reporting segments, with Europe posting the highest increase (5.7 percent to 2.01 billion euros), followed by Asia/Pacific/Middle East/Africa (4.7 percent to 1.19 billion euros), Latin America (4 percent to 486 million euros) and North America (3.6 percent to 2.8 billion euros).
The Varilux X also was instrumental in raising overall company revenue in 2017, though the Crizal Sapphire 360˚ UV anti-reflective lens and Eye Protect System assisted as well. The Crizal lens is equipped with multi-angular technology to reduce reflections and protect against ultraviolet (UV) light, whereas the Eye Protect System protects against UV and blue-violet light while allowing the transmission of good blue-turquoise light. Compared to standard anti-reflective coated lenses, Eye Protect System optics offer up to three times more protection against harmful light, according to product data.
Augmenting the three lenses’ general impact on Essilor’s 2017 finances was robust growth in the company’s Equipment segment and U.S. gains in Sunglasses & Readers.
Equipment sales jumped 6.4 percent to $226 million due to high demand for new lens manufacturing technologies, while Sunglasses & Readers proceeds surged 12 percent to $766 million on the fettle of expanded online retailing and key brand growth in U.S. and international markets. Total company revenue swelled 6.7 percent (constant exchange rates) to 7.5 billion euros.
“We continued to provide a growing number of solutions in all price ranges to correct and protect eyesight and prevent visual health risks,” president and chief operating officer (COO) Laurent Vacherot said in the company’s latest annual report. “With sales up 6.7 percent and adjusted net profit up 2.5 percent, our 2017 performance illustrates the strength of our development strategy.”
That strategy no longer relies on traditional R&D methods but rather a customer-driven design approach organized by technique/skill, physical/chemical properties, engineering, and optical construction. Implemented last year, Essilor’s new approach to innovation targets products in five consumer segments: kids/teens (ages 0-18); young adults (ages 19-44); midlife (ages 44-64); seniors (ages 65 and older); and “next-gen” consumers who lack easy access to eyewear and eyecare.
To better understand these new segments, Essilor is studying social networks, online communities, and selfie videos, and conducting real-life product testing in a specially designed “house lab.”
“Innovation at Essilor reflects the world today—networked, collaborative, and creative,” COO Jean Carrier said in an investor Q&A. “By putting consumers’ needs at the heart of discussions involving multidisciplinary teams, we’re drawing on a diversity of expertise to generate ideas and develop solutions for new needs and expectations.”
One of those new solutions is “connected glasses” similar to the kind Google has intermittently been developing for several years now. The project is bound to get a major boost from Essilor’s 46 billion euro “combination” with Luxottica Group SA, the world’s leading consumer eyewear group and owner of Ray-Ban, Oakley, and Sunglass Hut. Announced in January 2017, the deal would create a global eyewear powerhouse worth 15 billion euros and generate cost savings and increased revenue of 400 million euros to 600 million euros annually within three to four years.
Although the transaction has not yet officially closed (expected soon), the combination has been unconditionally approved by the EU. The agency cooperated with antitrust authorities in Australia, Brazil, Canada, Chile, China, Israel, New Zealand, Singapore, South Africa, Turkey, and the U.S. Federal Trade Commission.
“With this agreement, my dream to create a major global player in the eyewear industry, fully integrated and excellent in all its parts, finally comes true,” Leonardo Del Vecchio, executive chairman and founder of Milan, Italy-based Luxottica Group, said when the deal was announced. “It was some time now that we knew this was the right solution but only [now] are there the right conditions to make it possible. The marriage between two key companies in their sectors will bring great benefits to the market, for employees and mainly for all our consumers. Finally, after 50 years, two products which are naturally complementary, namely frames and lenses, will be designed, manufactured, and distributed under one roof.”
Del Vecchio—Italy’s second-richest person—will become executive chairman and CEO of the combined business (named EssilorLuxottica) once the deal closes.
By far, Luxottica was Essilor’s largest partnership (or combination, as the companies like to call it), but it was certainly not its only one in 2017. Essilor executed nine acquisitions of distributors and prescription labs last year, strengthening its presence in existing markets and entering new countries (Ethiopia and Guatemala, representing 20 million customers). In addition, the company signed a new partnership with the Australian government in December to provide affordable vision care for 100,000 low-income consumers in rural Bangladesh (India), and paired with the Fédération Internationale de l’Automobile to raise awareness of the importance of regular eye checks for safe driving.