Continued Strong Cash Flow Generation at Euro 207 million for the
quarter Shareholders Approve the Payment of a Dividend of Euro 0.22
per Share MILAN, Oct. 29 /PRNewswire-FirstCall/ -- The Board of
Directors of Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), a global
leader in the design, manufacturing and distribution of fashion,
luxury and sports eyewear, approved today its consolidated
financial results for the third quarter and nine-month period ended
September 30, 2009, in accordance with U.S. Generally Accepted
Accounting Principles (U.S. GAAP) and with International Financial
Reporting Standards (IFRS). Third quarter 2009(1) - U.S. GAAP
--------------------- (in millions of euros) 3Q09 3Q08 % change
Sales 1,223.3 1,212.0 +0.9% (down 1.4% at constant exchange rates)
EBITDA(2) 214.0 258.6 -17.3% Operating income 143.7 195.1 -26.4%
Net income 83.1 104.6 -20.6% Earnings per share (euros) 0.18 0.23
-20.7% - Before trademark amortization(2) 0.21 0.25 -14.5%
-------------------- ---- ---- ---- Nine months of 2009(1) - U.S.
GAAP ---------------------- (in millions of euros) 9M09 9M08 %
change Sales 3,937.2 3,965.1 -0.7% (down 5.6% at constant exchange
rates) EBITDA(2) 720.9 828.6 -13.0% Operating income 506.3 632.3
-19.9% Net income 279.2 340.9 -18.1% Earnings per share (euros)
0.61 0.75 -18.2% - Before trademark amortization(2) 0.70 0.82
-15.1% -------------------- ---- ---- ----- Performance overview
for the third quarter of 2009 The third quarter saw a further
stabilization in the international markets, though in an
environment that continued to be challenging. Several countries
have shown encouraging signs of a return to growth. In the coming
months, it will become clearer whether this recovery in demand is
sustainable in the long-term. In Europe in particular, the market
saw a second consecutive quarter of improvement, with encouraging
signs of recovery coming from Italy, Spain, Germany and France. The
North American market found some stability. Overall, emerging
markets did not show signs of a slowdown in growth. Andrea Guerra,
CEO of Luxottica Group, commented: "Now that we are approaching the
end of a year as demanding as 2009, we believe that the worst is
behind us. Flexibility, speed, the ongoing search for new solutions
and a continued focus on the balance sheet have enabled Luxottica
to post positive results even in a period as difficult as what we
experienced. For the second consecutive quarter Luxottica saw
growth in sales and, most importantly, for the first nine months of
the year results are much in line with last year. Additionally, we
achieved strong cash flow generation, of Euro 207 million for the
quarter. Today we are optimistic about the future. We are working
to make sure that 2010 is again a normal year, in which we enjoy
growth in sales, a solid improvement in profitability, greater than
the growth in sales, as well as strong free cash flow generation
and deleveraging." Consolidated results For the third quarter,
consolidated net sales rose to Euro 1,223.3 million, from Euro
1,212.0 million for the same period in 2008 (up by 0.9% at current
exchange rates, down by 1.4% at constant exchange rates). In terms
of operating performance, consolidated EBITDA(2) for the third
quarter was Euro 214.0 million, compared with Euro 258.6 million
for the same period last year, reflecting a decline of 17.3%.
Consolidated EBITDA margin(2) for the quarter was 17.5%, compared
with 21.3% for last year's third quarter. Consolidated operating
income for the quarter was Euro 143.7 million, compared with Euro
195.1 million for the same period the previous year (reflecting a
decline by 26.4%). Consolidated operating margin for the quarter
was 11.7%, compared with 16.1% for the same period last year. It
should also be noted that the third quarter of 2008 was the most
profitable quarter of 2008, with particularly strong results from
the retail division. In fact, results of the third quarter of 2008
reflected non-recurring items of Euro 29 million in income, which
included income from insurance proceeds and a reduction of non-cash
stock compensation expenses due to the performance grants.
Excluding these non-recurring items, the decline in operating
profitability would have been by only 200 bps. Consolidated net
income for the third quarter was Euro 83.1 million, compared with
Euro 104.6 million for the same period last year and reflecting a
decline of 20.6%. Earnings per share (EPS) for the quarter were
Euro 0.18 (at an average Euro/US Dollar exchange rate of 1:1.43),
reflecting a decrease of 20.7% from the comparable quarter last
year. Considering EPS in euros before trademark amortization(2)
however, the year-over-year decrease would have been limited to
14.5%. Thanks to tight controls over working capital, the Group
posted strong cash flow generation for the quarter. In fact, for
the quarter free cash flow(2) reached Euro 207 million. This
result, together with the favorable impact of exchange rate
fluctuations, contributed to a meaningful reduction in consolidated
net debt(2) at September 30, 2009 to Euro 2,414.1 million, from
Euro 2,627.3 million at June 30, 2009 and Euro 2,949.5 million at
December 31, 2008. As a result, the net debt/EBITDA ratio(2)
improved to 2.66X, from 2.76X at June 30, 2009 and 2.90X at
December 31, 2008. Wholesale Division The positive reception by the
markets of new collections, in particular Ray-Ban Tech and Oakley's
Jawbone, together with the ongoing success of the STARS program and
substantially the end of inventory reductions by clients in many
markets, enabled the Group to post sales results for the quarter in
line with last year's performance. Wholesale sales for the quarter
were Euro 429.8 million, compared with Euro 429.5 million for last
year's same period (down by 0.1% at current exchange rates, by 0.3%
at constant exchange rates). When looking at sales by geography,
during the quarter Luxottica enjoyed a positive performance in
Europe and emerging markets. In North America, sales were
substantially in line with the previous year, while in Japan and
Eastern Europe the trend remained negative. Operating income for
the Wholesale Division for the quarter was Euro 62.0 million (a
decrease of 11.4% from operating income of Euro 70.0 million for
the comparable quarter last year). Operating margin for the quarter
was 14.4%, compared with 16.3% for the third quarter of 2008.
Retail Division Retail sales for the quarter rose to Euro 793.8
million, from Euro 782.2 million for the comparable quarter last
year (up by 1.5% at current exchange rates, down by 2.1% at
constant exchange rates). Operating income for the quarter was Euro
114.0 million, compared with Euro 138.3 million for the same
quarter last year reflecting a decline of 17.6%. As a result,
operating margin for the Division for the quarter was 14.4%,
compared with 17.7% for the same quarter last year. In terms of
comparable sales(3) performance, the prescription segment in North
America saw a slight decline by 1.7% despite particularly good
results at Sears Optical and Target Optical (+16%, combined) and an
appreciable recovery by Pearle Vision (now +0.3%). Comparable
sales(3) performance for the quarter in the Asia-Pacific region was
substantially stable year-over-year. Sunglass Hut, the sun
specialty chain with a global presence, posted overall comparable
sales(3) for the quarter down year-over-year by 5.6%, with very
positive performance in Australia and New Zealand, South Africa and
the UK, but a negative performance again in North America though
continuing to improve. Results for the third quarter and the nine
months of 2009 will be discussed today in a conference call with
the financial community starting at 6 PM CET. The audio portion and
related presentation will be available to all via live webcast at
http://www.luxottica.com/. Today's Ordinary Meeting of Shareholders
approved a cash dividend payment of Euro 0.22 per ordinary share.
The total dividend payment will thus be over Euro 100 million.
Based on the timetable established by Borsa Italiana, the dividend
will be paid to holders of ordinary shares on November 26, 2009
(ex-dividend date of November 23, 2009). Deutsche Bank Trust
Company Americas, the Depositary Bank of Luxottica Group's ordinary
shares represented by American Depositary Receipts (ADRs), will pay
the dividend in U.S. dollars to ADR holders on December 4, 2009 at
the Euro/U.S. dollar exchange rate as of November 27, 2009. The
ex-dividend date for holders of both ordinary shares and ADRs will
be November 23, 2009. The Meeting also approved a new authorization
to buy back and subsequently dispose of up to a maximum of
18,500,000 ordinary shares in the Company, currently representing
3.99% of the share capital, for a maximum value of Euro 370
million. The authorization for this buyback is valid for a period
of 18 months. Lastly, the Meeting approved the appointment of
Giorgio Silva as an alternate statutory auditor following the
premature passing of Mario Magenes. The officer responsible for
preparing the company's financial reports, Enrico Cavatorta,
declares that, pursuant to paragraph 2 of Article 154-bis of the
Consolidated Law on Finance, the accounting information contained
in this press release corresponds to the document results, books
and accounting records. http://www.luxottica.com/ Notes to the
press release (1) All comparisons, including percentage changes,
are between the three or nine-month periods ended September 30,
2009 and 2008, respectively, as indicated, in accordance with U.S.
GAAP. (2) EBITDA, EBITDA margin, free cash flow, net debt, the
ratio of net debt to EBITDA and EPS before trademark amortization
are all non-U.S. GAAP measures. For additional disclosure regarding
such measures, please refer to the tables attached. (3) 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. Luxottica Group S.p.A. Luxottica Group is a leader in premium
fashion, luxury and sports eyewear, with over 6,150 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 2008, Luxottica Group posted
consolidated net sales of Euro 5.2 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. - FINANCIAL TABLES TO
FOLLOW - LUXOTTICA GROUP CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE
THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
KEY FIGURES IN THOUSANDS OF EURO (3)
-------------------------------------- 2009 2008 % Change NET SALES
1,223,272 1,211,992 0.9% NET INCOME 83,103 104,612 -20.6% BASIC
EARNINGS PER SHARE (ADS)(2): 0.18 0.23 -20.7% EPS PRE-TRADEMARK
AMORTIZATION (2)(4): 0.21 0.25 -14.5% KEY FIGURES IN THOUSANDS OF
U.S. DOLLARS (1) (3)
-------------------------------------------------- 2009 2008 %
Change NET SALES 1,749,646 1,824,652 -4.1% NET INCOME 118,862
157,493 -24.5% BASIC EARNINGS PER SHARE (ADS) (2): 0.26 0.34 -24.6%
EPS PRE-TRADEMARK AMORTIZATION (2)(4): 0.30 0.37 -18.8% Notes: 2009
2008 (1) Average exchange rate (in U.S. Dollars per Euro) 1.4303
1.5055 (2) Weighted average number of outstanding shares
457,214,454 456,613,794 (3) Except earnings per share (ADS), which
are expressed in Euro and U.S. Dollars, respectively (4) EPS before
trademark amortization is not a US-GAAP measure. For additional
disclosure regarding non-US GAAP measures and a reconciliation to
US GAAP measures, see the tables attached. LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008 KEY FIGURES IN THOUSANDS
OF EURO (3) ------------------------------------- 2009 2008 %
Change NET SALES 3,937,233 3,965,136 -0.7% NET INCOME 279,180
340,897 -18.1% BASIC EARNINGS PER SHARE (ADS) (2): 0.61 0.75 -18.2%
EPS PRE-TRADEMARK AMORTIZATION (2)(4): 0.70 0.82 -15.1% KEY FIGURES
IN THOUSANDS OF U.S. DOLLARS (1) (3)
------------------------------------------------- 2009 2008 %
Change NET SALES 5,379,048 6,034,540 -10.9% NET INCOME 381,416
518,811 -26.5% BASIC EARNINGS PER SHARE (ADS)(2): 0.83 1.14 -26.6%
EPS PRE-TRADEMARK AMORTIZATION (2)(4): 0.95 1.25 -23.8% Notes: 2009
2008 (1) Average exchange rate (in U.S. Dollars per Euro) 1.3662
1.5219 (2) Weighted average number of outstanding shares
457,108,193 456,478,572 (3) Except earnings per share (ADS), which
are expressed in Euro and U.S. Dollars, respectively (4) EPS before
trademark amortization is not a US-GAAP measure. For additional
disclosure regarding non-US GAAP measures and a reconciliation to
US GAAP measures, see the tables attached. LUXOTTICA GROUP
CONSOLIDATED INCOME STATEMENT FOR THE THREE-MONTH PERIODS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008 % of %of % In thousands
of Euro (1) 2009 sales 2008(2) sales Change NET SALES 1,223,272
100.0% 1,211,991 100.0% 0.9% COST OF SALES (421,923) (401,940)
GROSS PROFIT 801,349 65.5% 810,052 66.8% -1.1% OPERATING EXPENSES:
SELLING EXPENSES (411,139) (402,782) ROYALTIES (20,342) (22,780)
ADVERTISING EXPENSES (73,832) (74,970) GENERAL AND ADMINISTRATIVE
EXPENSES (132,301) (102,253) TRADEMARK AMORTIZATION (20,071)
(12,185) TOTAL (657,685) (614,971) OPERATING INCOME 143,664 11.7%
195,081 16.1% -26.4% OTHER INCOME (EXPENSE): INTEREST EXPENSES
(20,933) (35,210) INTEREST INCOME 954 3,614 OTHER - NET 2,114
(2,464) OTHER INCOME (EXPENSES)-NET (17,865) (34,060) INCOME BEFORE
PROVISION FOR INCOME TAXES 125,799 10.3% 161,021 13.3% -21.9%
PROVISION FOR INCOME TAXES (40,665) (54,396) NET INCOME 85,134
106,625 LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
(2,031) (2,014) NET INCOME ATTRIBUTABLE TO LUXOTTICA GROUP
SHAREHOLDERS 83,103 6.8% 104,612 8.6% -20.6% BASIC EARNINGS PER
SHARE (ADS): 0.18 0.23 FULLY DILUTED EARNINGS PER SHARE (ADS): 0.18
0.23 WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES 457,214,454
456,613,794 FULLY DILUTED AVERAGE NUMBER OF SHARES 458,301,779
458,224,364 Notes: (1) Except earnings per share (ADS), which are
expressed in Euro (2) Certain figures from 2008 have been
reclassified to conform to the 2009 presentation LUXOTTICA GROUP
CONSOLIDATED INCOME STATEMENT FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008 % of % of % In thousands
of Euro (1) 2009 sales 2008(2) sales Change NET SALES 3,937,233
100.0% 3,965,136 100.0% -0.7% COST OF SALES (1,355,551) (1,313,327)
GROSS PROFIT 2,581,681 65.6% 2,651,809 66.9% -2.6% OPERATING
EXPENSES: SELLING EXPENSES (1,280,655) (1,229,632) ROYALTIES
(74,509) (91,293) ADVERTISING EXPENSES (245,802) (270,038) GENERAL
AND ADMINISTRATIVE EXPENSES (413,133) (375,823) TRADEMARK
AMORTIZATION (61,266) (52,709) TOTAL (2,075,365) (2,019,495)
OPERATING INCOME 506,317 12.9% 632,314 15.9% -19.9% OTHER INCOME
(EXPENSE): INTEREST EXPENSES (69,265) (100,015) INTEREST INCOME
4,322 9,881 OTHER - NET (1,891) (4,110) OTHER INCOME (EXPENSES)-NET
(66,834) (94,244) INCOME BEFORE PROVISION FOR INCOME TAXES 439,482
11.2% 538,070 13.6% -18.3% PROVISION FOR INCOME TAXES (149,325)
(184,289) NET INCOME 290,157 353,781 LESS: NET INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST (10,977) (12,884) NET INCOME
ATTRIBUTABLE TO LUXOTTICA GROUP SHAREHOLDERS 279,180 7.1% 340,897
8.6% -18.1% BASIC EARNINGS PER SHARE (ADS): 0.61 0.75 FULLY DILUTED
EARNINGS PER SHARE (ADS): 0.61 0.74 WEIGHTED AVERAGE NUMBER OF
OUTSTANDING SHARES 457,108,193 456,478,572 FULLY DILUTED AVERAGE
NUMBER OF SHARES 457,651,491 457,936,973 Notes: (1) Except earnings
per share (ADS), which are expressed in Euro (2) Certain figures
from 2008 have been reclassified to conform to the 2009
presentation LUXOTTICA GROUP CONSOLIDATED BALANCE SHEET AS OF
SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 In thousands of Euro
September 30, 2009 December 31, 2008(1) CURRENT ASSETS: CASH AND
CASH EQUIVALENTS 331,199 288,450 MARKETABLE SECURITIES 30,786
23,550 ACCOUNTS RECEIVABLE - NET 632,806 630,018 SALES AND INCOME
TAXES RECEIVABLE 34,965 151,609 INVENTORIES - NET 524,565 570,987
PREPAID EXPENSES AND OTHER 143,597 144,054 DEFERRED TAX ASSETS -
CURRENT 98,683 131,907 TOTAL CURRENT ASSETS 1,796,601 1,940,575
PROPERTY, PLANT AND EQUIPMENT - NET 1,127,053 1,170,698 OTHER
ASSETS INTANGIBLE ASSETS - NET 3,806,646 3,928,804 INVESTMENTS
46,890 5,503 OTHER ASSETS 159,511 175,234 SALES AND INCOME TAXES
RECEIVABLE 965 965 DEFERRED TAX ASSETS - NON-CURRENT 97,555 83,447
TOTAL OTHER ASSETS 4,111,567 4,193,952 TOTAL 7,035,221 7,305,225
CURRENT LIABILITIES: BANK OVERDRAFTS 362,150 432,465 CURRENT
PORTION OF LONG-TERM DEBT 247,831 286,213 ACCOUNTS PAYABLE 351,635
398,080 ACCRUED EXPENSES AND OTHER 440,968 407,648 ACCRUAL FOR
CUSTOMERS' RIGHT OF RETURN 30,702 31,363 INCOME TAXES PAYABLE
19,096 18,353 TOTAL CURRENT LIABILITIES 1,452,381 1,574,121
LONG-TERM LIABILITIES: LONG-TERM DEBT 2,135,296 2,519,289 LIABILITY
FOR TERMINATION INDEMNITIES 55,151 55,522 DEFERRED TAX LIABILITIES
- NON- CURRENT 212,872 233,551 OTHER LONG-TERM LIABILITIES 325,034
368,821 TOTAL LIABILITIES 4,180,734 4,751,304 COMMITMENTS AND
CONTINGENCIES: EQUITY: 463,963,833 ORDINARY SHARES AUTHORIZED AND
ISSUED - 457,403,151 SHARES OUTSTANDING 27,838 27,802 NET INCOME
ATTRIBUTABLE TO LUXOTTICA GROUP SHAREHOLDERS 279,180 379,722
RETAINED EARNINGS 2,492,329 2,099,069 TOTAL LUXOTTICA GROUP
SHAREHOLDERS' EQUITY 2,799,347 2,506,593 NONCONTROLLING INTEREST
55,140 47,328 TOTAL EQUITY 2,854,487 2,553,921 TOTAL 7,035,221
7,305,225 Notes: (1) Certain figures from 2008 have been
reclassified to conform to the 2009 presentation LUXOTTICA GROUP
CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008 - SEGMENTAL INFORMATION -
Manufacturing Inter-Segment and Transactions and Wholesale Retail
Corporate Adj. Consolidated In thousands of Euro 2009 Net Sales
1,506,468 2,430,764 3,937,233 Operating Income 297,127 313,460
(104,270) 506,317 % of sales 19.7% 12.9% 12.9% Capital Expenditures
52,490 78,578 131,068 Depreciation & Amortization 55,907 97,405
61,266 214,578 Assets 1,858,828 1,086,024 4,090,369 7,035,221 2008
Adjusted (1) Net Sales 1,632,744 2,332,392 3,965,136 Operating
Income 374,424 342,412 (84,521) 632,314 % of sales 22.9% 14.7%
15.9% Capital Expenditures 81,474 113,923 195,397 Depreciation
& Amortization 52,698 90,901 52,708 196,308 Assets 1,899,510
1,180,781 4,193,272 7,273,562 2008 Reported Net Sales 1,926,542
2,332,392 (293,798) 3,965,136 Operating income 451,392 249,001
(68,078) 632,314 % of sales 23.4% 10.7% 15.9% Capital Expenditure
81,474 113,923 195,397 Depreciation & Amortization 62,026
92,006 42,275 196,308 Assets 2,682,695 1,566,019 3,024,849
7,273,562 Notes: (1) In 2009, the Company adopted a new method to
report Segmental information. This method is in compliance with the
requirements of SFAS no. 131. For the purpose of providing
comparability with financial information from previous periods, the
Company has presented 2008 segment data in accordance with the
revised methodology. LUXOTTICA GROUP RECONCILIATION OF THE
CONSOLIDATED INCOME STATEMENT PREPARED IN ACCORDANCE WITH US GAAP
AND IAS / IFRS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2009
CONSOLIDATED INCOME STATEMENT FOR THE NINE-MONTH PERIOD ENDED
SEPTEMBER 30, 2009 In thousands of Euro IFRS 2 IAS 2 IFRS 3 IAS 19
US GAAP Stock Business Employee 2009 option Inventories combination
benefit NET SALES 3,937,233 COST OF SALES (1,355,551) 3,071 GROSS
PROFIT 2,581,681 3,071 OPERATING EXPENSES: SELLING EXPENSES
(1,280,655) (3,315) ROYALTIES (74,509) ADVERTISING EXPENSES
(245,802) GENERAL AND ADMINISTRATIVE EXPENSES (413,133) (6,195)
(732) (2,168) TRADEMARK AMORTIZATION (61,266) TOTAL (2,075,365)
(6,195) (3,315) (732) (2,168) OPERATING INCOME 506,317 (6,195)
(244) (732) (2,168) OTHER INCOME (EXPENSE): INTEREST EXPENSES
(69,265) (2,163) INTEREST INCOME 4,322 OTHER - NET (1,891) 133
OTHER INCOME (EXPENSES)-NET (66,834) 133 (2,163) INCOME BEFORE
PROVISION FOR INCOME TAXES 439,482 (6,061) (244) (2,895) (2,168)
PROVISION FOR INCOME TAXES (149,325) 1,653 96 249 810 NET INCOME
290,157 (4,408) (148) (2,646) (1,357) LESS: NET INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST (10,977) 5,994 NET INCOME ATTRIBUTABLE
TO LUXOTTICA GROUP SHAREHOLDERS 279,180 (4,408) (148) 3,347 (1,357)
BASIC EARNINGS PER SHARE (ADS) (1) 0.61 FULLY DILUTED EARNINGS PER
SHARE (ADS) (1) 0.61 WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES
457,108,193 FULLY DILUTED AVERAGE NUMBER OF SHARES 457,651,491
CONSOLIDATED INCOME STATEMENT FOR THE NINE-MONTH PERIOD ENDED
SEPTEMBER 30, 2009 In thousands of Euro IAS 39 Derivatives /
Amortized Total IAS / IFRS cost Other adj. IAS-IFRS 2009 NET SALES
3,937,233 COST OF SALES 3,071 (1,352,481) GROSS PROFIT 3,071
2,584,752 OPERATING EXPENSES: SELLING EXPENSES (320) (3,635)
(1,284,290) ROYALTIES (74,509) ADVERTISING EXPENSES 392 392
(245,410) GENERAL AND ADMINISTRATIVE EXPENSES (9,094) (422,227)
TRADEMARK AMORTIZATION (61,266) TOTAL 72 (12,338) (2,087,702)
OPERATING INCOME 72 (9,267) 497,050 OTHER INCOME (EXPENSE):
INTEREST EXPENSES (6,826) (1,052) (10,041) (79,307) INTEREST INCOME
4,322 OTHER - NET (148) (14) (1,905) OTHER INCOME (EXPENSES)- NET
(6,974) (1,052) (10,056) (76,890) INCOME BEFORE PROVISION FOR
INCOME TAXES (6,974) (980) (19,322) 420,160 PROVISION FOR INCOME
TAXES 2,078 (869) 4,017 (145,308) NET INCOME (4,896) (1,848)
(15,305) 274,852 LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING
INTEREST 5,994 (4,983) NET INCOME ATTRIBUTABLE TO LUXOTTICA GROUP
SHAREHOLDERS (4,896) (1,848) (9,311) 269,869 BASIC EARNINGS PER
SHARE (ADS) (1) 0.59 FULLY DILUTED EARNINGS PER SHARE (ADS) (1)
0.59 WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES 457,108,193
FULLY DILUTED AVERAGE NUMBER OF SHARES 457,661,787 Notes: (1)
Except earnings per share (ADS), which are expressed in Euro
Non-U.S. GAAP Measure: EBITDA and EBITDA margin EBITDA represents
operating income before depreciation and amortization. EBITDA
margin means EBITDA divided by net sales. The Company believes that
EBITDA is useful to both management and investors in evaluating the
Company's operating performance compared with that of other
companies in its industry. Our calculation of EBITDA allows us to
compare our operating results with those of other companies without
giving effect to financing, income taxes and the accounting effects
of capital spending, which items may vary for different companies
for reasons unrelated to the overall operating performance of a
company's business. EBITDA and EBITDA margin are not measures of
performance under accounting principles generally accepted in the
United States (U.S. GAAP). We include them in this presentation 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; -- ensure that these measures are fully
understood in light of how the Company evaluates its operating
results and leverage; -- properly define the metrics used and
confirm their calculation; and -- share these measures with all
investors at the same time. EBITDA and EBITDA margin are 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, these non-GAAP measures 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 these measures are not defined terms under
U.S. GAAP and their definitions should be carefully reviewed and
understood by investors. Investors should be aware that Luxottica
Group's method of calculating EBITDA may differ from methods used
by other companies. The Company recognizes that the usefulness of
EBITDA has certain limitations, including: -- EBITDA does not
include interest expense. Because we have borrowed money in order
to finance our operations, interest expense is a necessary element
of our costs and ability to generate profits and cash flows.
Therefore, any measure that excludes interest expense may have
material limitations; -- EBITDA does not include depreciation and
amortization expense. Because we use capital assets, depreciation
and amortization expense is a necessary element of our costs and
ability to generate profits. Therefore, any measure that excludes
depreciation and expense may have material limitations; -- EBITDA
does not include provision for income taxes. Because the payment of
income taxes is a necessary element of our costs, any measure that
excludes tax expense may have material limitations; -- EBITDA does
not reflect cash expenditures or future requirements for capital
expenditures or contractual commitments; -- EBITDA does not reflect
changes in, or cash requirements for, working capital needs; --
EBITDA does not allow us to analyze the effect of certain recurring
and non-recurring items that materially affect our net income or
loss. We compensate for the foregoing limitations by using EBITDA
as a comparative tool, together with U.S. GAAP measurements, to
assist in the evaluation of our operating performance and leverage.
See the tables on the following pages for a reconciliation of
EBITDA to operating income, which is the most directly comparable
U.S. GAAP financial measure, as well as the calculation of EBITDA
margin on net sales. Non-U.S. GAAP Measure: EBITDA Millions of Euro
2Q09 2Q08 H108 FY08 H109 LTM June (-) + + 30, 2009 ---- ---- ----
---- ---- -------- Operating income (+) 206.0 230.2 (437.2) 749.8
362.7 675.2 ----------- ----- ----- ------ ----- ----- -----
Depreciation & amortization 71.4 64.5 (132.8) 264.9 144.3 276.4
(+) === EBITDA 277.3 294.7 (570.0) 1,014.7 506.9 951.6 (=) ---
EBITDA at avg exchange rates for the period(1) (598.6) 1,051.9
506.9 960.1 1. Calculated using the 6-month average exchange rate
as of June 30, 2009 Non-U.S. GAAP Measure: EBITDA Millions of Euro
3Q09 3Q08 9M09 FY08 9M08 LTM Sept. + + (-) 30, 2009 ---- ---- ----
---- ---- --------- Operating income (+) 143.7 195.1 506.3 749.8
(632.3) 623.8 ----------- ----- ----- ----- ----- ------ -----
Depreciation & amortization (+) 70.3 63.5 214.6 264.9 (196.3)
283.2 === ==== ==== ===== ===== ====== ===== EBITDA (=) 214.0 258.6
720.9 1,014.7 (828.6) 907.0 --- ----- ----- ----- ------- ------
----- EBITDA at avg exchange rates for the period (1) 720.9 1,040.1
(864.3) 896.7 1. Calculated using the 9-month average exchange rate
as of September 30, 2009 Non-U.S. GAAP Measure: EBITDA and EBITDA
margin Millions of Euro 3Q09 3Q08 9M09 9M08 Operating income (+)
143.7 195.1 506.3 632.3 ------------------- ----- ----- ----- -----
Depreciation & amortization (+) 70.3 63.5 214.6 196.3 (+) ===
EBITDA 214.0 258.6 720.9 828.6 (=) --- Net sales 1,223.3 1,212.0
3,937.2 3,965.1 (/) --- EBITDA margin 17.5% 21.3% 18.3% 20.9% (=)
Non-U.S. GAAP Measure: Net Debt to EBITDA ratio Net debt to EBITDA
ratio: Net debt means the sum of bank overdrafts, current portion
of long-term debt and long-term debt, less cash. EBITDA represents
operating income before depreciation and amortization. The Company
believes that EBITDA is useful to both management and investors in
evaluating the Company's operating performance compared with that
of other companies in its industry. Our calculation of EBITDA
allows us to compare our operating results with those of other
companies without giving effect to financing, income taxes and the
accounting effects of capital spending, which items may vary for
different companies for reasons unrelated to the overall operating
performance of a company's business. The ratio of net debt to
EBITDA is a measure used by management to assess the Company's
level of leverage, which affects our ability to refinance our debt
as it matures and incur additional indebtedness to invest in new
business opportunities. The ratio also allows management to assess
the cost of existing debt since it affects the interest rates
charged by the Company's lenders. EBITDA and ratio of net debt to
EBITDA are not measures of performance under accounting principles
generally accepted in the United States (U.S. GAAP). We include
them in this presentation 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; -- ensure that these measures are fully
understood in light of how the Company evaluates its operating
results and leverage; -- properly define the metrics used and
confirm their calculation; and -- share these measures with all
investors at the same time. EBITDA and ratio of net debt to EBITDA
are 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, these non-GAAP measures 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 these measures are not defined terms under
U.S. GAAP and their definitions should be carefully reviewed and
understood by investors. Investors should be aware that Luxottica
Group's method of calculating EBITDA and the ratio of net debt to
EBITDA may differ from methods used by other companies. The Company
recognizes that the usefulness of EBITDA and the ratio of net debt
to EBITDA as evaluative tools may have certain limitations,
including: -- EBITDA does not include interest expense. Because we
have borrowed money in order to finance our operations, interest
expense is a necessary element of our costs and ability to generate
profits and cash flows. Therefore, any measure that excludes
interest expense may have material limitations; -- EBITDA does not
include depreciation and amortization expense. Because we use
capital assets, depreciation and amortization expense is a
necessary element of our costs and ability to generate profits.
Therefore, any measure that excludes depreciation and expense may
have material limitations; -- EBITDA does not include provision for
income taxes. Because the payment of income taxes is a necessary
element of our costs, any measure that excludes tax expense may
have material limitations; -- EBITDA does not reflect cash
expenditures or future requirements for capital expenditures or
contractual commitments; -- EBITDA does not reflect changes in, or
cash requirements for, working capital needs; -- EBITDA does not
allow us to analyze the effect of certain recurring and
non-recurring items that materially affect our net income or loss;
and -- The ratio of net debt to EBITDA 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 EBITDA and the ratio of net debt to EBITDA as
two of several comparative tools, together with U.S. GAAP
measurements, to assist in the evaluation of our operating
performance and leverage. See the tables on the following pages for
a reconciliation of net debt to long-term debt, which is the most
directly comparable U.S. GAAP financial measure, as well as the
calculation of the ratio of net debt to EBITDA. For a
reconciliation of EBITDA to operating income, which is the most
directly comparable U.S. GAAP financial measure, see the tables on
the preceding pages. Non-U.S. GAAP Measure: Net debt and Net debt /
EBITDA Millions of Euro Dec 31, 2008 June 30, 2009 Sept. 30, 2009
------------ ------------- -------------- Long-term debt 2,519.3
2,485.9 2,135.3 (+) --- Current portion of long-term debt (+) 286.2
223.1 247.8 (+) --- Bank overdrafts (+) 432.5 228.6 362.1
------------------- ----- ----- ----- Cash (-) (288.5) (310.3)
(331.2) Net debt (=) 2,949.5 2,627.3 2,414.1 EBITDA 1,014.7 951.6
907.0 Net debt/EBITDA 2.9x 2.8x 2.7x ================ ==== ====
==== Net debt @ avg. exchange rates (1) 2,821.2 2,702.8 2,517.3
EBITDA @ avg. exchange rates (1) 1,014.7 960.1 896.7 Net debt /
EBITDA @ avg. exchange rates (1) 2.8x 2.8x 2.8x 1. Calculated using
the 12-month average exchange rate as of December 31, 2008, the
6-month average exchange rate as of June 30, 2009 and the 9-month
average exchange rate as of September 30, 2009, respectively
Non-U.S. GAAP Measures: EPS before Trademark Amortization Earnings
per share before trademark amortization: Earnings per share (EPS)
before trademark amortization means earnings per share before
trademark and other similar intangible asset amortization expense,
net of taxes, per share. The Company believes that EPS before
trademark amortization is useful to both management and investors
in evaluating the Company's operating performance and prospects
compared with that of other companies in its industry. Our
calculation of EPS before trademark amortization allows us to
compare our earnings per share with those of other companies
without giving effect to the accounting effects of the amortization
of the Company's trademarks and other similar intangible assets,
which may vary for different companies for reasons unrelated to the
overall operating performance of a company's business. EPS before
trademark amortization is not a measure of performance under
accounting principles generally accepted in the United States (U.S.
GAAP). We include it in this presentation in order to: -- improve
transparency for investors; -- assist investors in their assessment
of the Company's operating performance; -- ensure that this measure
is fully understood in light of how the Company evaluates its
operating results; -- properly define the metrics used and confirm
their calculation; and -- share this measure with all investors at
the same time. EPS before trademark amortization 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 EPS before trademark amortization may differ from
methods used by other companies. The Company recognizes that the
usefulness of EPS before trademark amortization as an evaluative
tool may have certain limitations, including: -- EPS before
trademark amortization does not include the effects of amortization
of the Company's trademarks and other intangible assets. Because
trademarks and other intangible assets are important to our
business and to our ability to generate sales, we consider
trademark amortization expense as a necessary element of our costs.
Therefore, any measure that excludes trademark amortization expense
may have material limitations. We compensate for these limitations
by using EPS before trademark amortization as one of several
comparative tools, together with U.S. GAAP measurements, to assist
in the evaluation of our operating performance. See the tables on
the following pages for a reconciliation of EPS before trademark
amortization to EPS, which is the most directly comparable U.S.
GAAP financial measure. Non-U.S. GAAP Measure: EPS before Trademark
Amortization Millions of Euro, unless otherwise noted 3Q09 3Q08
Change 9M09 9M08 Change ---- ---- ------ ---- ---- ------ Trademark
amortization and other similar intangible assets (+) 20 12 61 53
--- Taxes on trademark amortization and other similar intangible
assets (-) (7) (5) (22) (19) --- -- -- --- --- Trademark
amortization and other similar intangible assets, net of taxes 13 7
39 33 ------------- -- - -- -- (=) Average number of shares
outstanding as of September 30 (in thousands) (/) 457,214 456,614
457,108 456,479 =================== ======= ======= ======= =======
Trademark amortization and other similar intangible assets, net of
taxes, per share (=) 0.03 0.02 0.09 0.07 ------------- ---- ----
---- ---- EPS (+) 0.18 0.23 -20.7% 0.61 0.75 -18.2% EPS before
trademark amortization and other similar intangible assets, net of
taxes (=) 0.21 0.25 -14.5% 0.70 0.82 -15.1% Non-US GAAP Measures:
Free Cash Flow Free cash flow represents income from operations
before depreciation and amortization (i.e. EBITDA - see table on
the earlier page) plus or minus the decrease/(increase) in working
capital over the prior period, less capital expenditures, plus or
minus interest income/(expense) and extraordinary items, minus
taxes paid. The Company believes that free cash flow is useful to
both management and investors in evaluating the Company's operating
performance compared with other companies in its industry. In
particular, our calculation of free cash flow provides a clearer
picture of the Company's ability to generate net cash from
operations, which may be used, among other things, to fund
discretionary investments, pay dividends or pursue other strategic
opportunities. Free cash flow is not a measure of performance under
accounting principles generally accepted in the United States (U.S.
GAAP). We include it in this presentation in order to: -- Improve
transparency for investors; -- Assist investors in their assessment
of the Company's operating performance and its ability to generate
cash from operations in excess of its cash expenses; -- Ensure that
this measure is fully understood in light of how the Company
evaluates its operating results; -- Properly define the metrics
used and confirm their calculation; and -- Share this measure with
all investors at the same time. Free cash flow 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 calculation of free cash flow may differ from methods used by
other companies. The Company recognizes that the usefulness of free
cash flow as an evaluative tool may have certain limitations,
including: -- The manner in which the Company calculates free cash
flow may differ from that of other companies, which limits its
usefulness as a comparative measure; -- Free cash flow does not
represent the total increase or decrease in the net debt balance
for the period since it excludes, among other things, cash used for
funding discretionary investments and to pursue strategic
opportunities during the period and any impact of the exchange rate
changes; and -- Free cash flow can be subject to adjustment at the
Company's discretion if the Company takes steps or adopts policies
that increase or diminish its current liabilities and/or changes to
working capital. We compensate for the foregoing limitations by
using free cash flow as one of several comparative tools, together
with U.S. GAAP measurements, to assist in the evaluation of our
operating performance. See the table on the following page for a
reconciliation of free cash flow to EBITDA and the table on the
earlier page for a reconciliation of EBITDA to operating income,
which is the most directly comparable U.S. GAAP financial measure.
Non-U.S. GAAP Measure: Free cash flow Millions of Euro 3Q09 ----
EBITDA (1) 214 Change working capital 80 Capex (42)
====================== ==== Operating cash flow 252 Financial
charges (2) (20) Taxes (27) Extraordinary charges (3) 2
======================== ==== Free cash flow 207 1. EBITDA is not a
U.S. GAAP measure; please see table on the earlier page for a
reconciliation of EBITDA to operating income 2. Equals interest
income minus interest expense 3. Equals extraordinary income minus
extraordinary expense DATASOURCE: Luxottica Group S.p.A. CONTACT:
Ivan Dompe, Group Corporate Communications Director,
+39(02)8633-4726, ; or Alessandra Senici, Group Investor Relations
Director, +39(02)8633-4718, ; or Luca Biondolillo, SVP,
International Corporate, Communications, +1-516-918-3100, or
Mobile: +1-917-518 4203, Web Site: http://www.luxottica.com/
Copyright