EL Essilorluxottica

(Adds details on guidance, an analyst comment and more on sentiment)

By Cristina Roca

EssilorLuxottica SA said Friday that revenue grew in 2019 and raised its dividend as it guided for sales and earnings growth in 2020, despite headwinds posed by coronavirus.

The Franco-Italian optical giant reported net profit of 1.08 billion euros ($1.21 billion), flat compared with a restated figure of EUR1.08 billion the year previous and falling short of analysts' expectations of EUR1.56 billion, according to a FactSet consensus estimate.

Net profit adjusted for the Essilor-Luxottica merger and other one-offs rose 9.2% to EUR1.94 billion, the company said.

The company--which was created in October 2018 from the combination of optical-lens manufacturer Essilor and luxury-eyewear maker Luxottica--said revenue was EUR17.39 billion, up from a pro forma figure of EUR16.19 billion in 2018 and broadly in line with analysts' expectations of EUR17.36 billion, according to a consensus estimate provided by FactSet.

At constant currencies, revenue rose 4.4%, driven by growth in all divisions, EssilorLuxottica said.

"The current [coronavirus] epidemic has a negative impact on the company's business in Greater China, which represents approximately 5% of consolidated revenue," EssilorLuxottica said, adding that its revenue in other regions has also been slightly hit by the virus.

In spite of this, EssilorLuxottica said it expects to grow its sales and earnings for the year, assuming that the epidemic will subside in the next few months.

EssilorLuxottica guided for sales growth of 3%-5% at constant exchange rates, and said it expects operating profit for the period--adjusted for the expenses from the Essilor-Luxottica merger and other special items--growing at 0.7 times to 1.2 times the pace of sales growth. Adjusted net profit, adjusted for the same factors, should also grow at 0.7 times to 1.2 times the pace of sales growth, EssilorLuxottica said.

The Paris-listed company's 2020 guidance is reassuring as is the fact that it shared that its plants in China are operating at a slightly reduced capacity at the moment, and that they are quickly going back to normal, Bernstein analyst Luca Solca said. Its factories in Italy and elsewhere are working at full capacity, EssilorLuxottica added.

EssilorLuxottica also backed its expectation of merger synergies of EUR300 million-EUR350 million on its adjusted operating profit for 2019-2021, and of EUR420 million-EUR600 million by 2022-2023. It also expects to appoint a CEO for the combined company by the end of the year, it said.

The eyewear company declared a dividend of EUR2.23 a share compared with EUR2.04 a share for 2018.

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

(END) Dow Jones Newswires

March 06, 2020 03:21 ET (08:21 GMT)

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