Continued recovery in the eyewear market
Eyewear manufacturers have shared their results for the third quarter, highlighting a “healthy pace” of activity
22 November 2021
This builds on the second quarter and half year results for 2021, which indicated a rebound in the optical market.
Companies saw demand increasing in Europe, with eyewear markets seeing positive activity and e-commerce also presenting a key driver for the manufacturers. The sunglasses market, meanwhile, which suffered significantly as a result of the pandemic, appeared to see improvements.
EssilorLuxotticaEssilorLuxottica revealed that consolidated revenue, including GrandVision for the first time after the acquisition completed, totalled €14,241 million in the first nine months of the year.
Consolidated revenue amounted to €5,465 million in the third quarter – a 9.3% rise at constant exchange rates versus the same period in 2019. Excluding GrandVision, the company reported that total revenue for the quarter was €4,460 million, up 9.0% when compared with the same quarter in 2019.
The professional solutions division, which covers the supply of products and services to eye care professionals, saw revenue reach €2,583 million in the third quarter of the year, up 7.3% at constant exchange rates when compared with the third quarter of 2019.
The company suggested that performance accelerated in the third quarter, supported by a number of product launches including a new range of Crizal, Transitions XTRActive and Eyezen Kids, as well as the gradual reopening of several markets which had still faced restrictions in the second quarter of the year.
While North America continues to drive the performance, the professional solutions division has seen activity ramp up in Europe, the Middle East and Africa (EMEA) along with a consolidation of recovery, supported by markets including the UK, Italy and Germany.
The optical category has continued to expand “at a healthy pace,” the company shared, while sunglasses are rebounding – driven by North America and EMEA.
E-commerce revenue rose by almost 50%, the company said, reaching 8% of EssilorLuxottica’s total turnover for the year-to-date. The company also launched its smartglasses in partnership with Facebook, which saw promising sales.
Francesco Milleri and Paul du Saillant, CEO and deputy CEO of EssilorLuxottica, said the third quarter revenue kept pace with the “fast recovery” seen earlier in the year: “Including GrandVision, in its first quarter of consolidation into the Group, EssilorLuxottica’s comparable revenue grew even faster, at 9.3% versus pre-COVID levels at constant exchange rate.”
The company has expanded its margins, the executives suggested, adding: “This has led us to upgrade once again our outlook for the full year, now pointing to a more material operating margin lift.”
The expectations for the full year 2021 outlook point to a “mid-to-high” single digit growth in revenue compared to pre-COVID levels.
“Such a sound performance is driven by the company’s omnichannel and open business model, its new integrated commercial initiatives and its rich innovation pipeline, all at the heart of its long-term strategy,” they added.
In the first nine months of 2021, Safilo saw net sales hit €737.4 million, a 37.3% rise compared to 2020. This also marked an increase of 8.7% compared to the same period in 2019 and constant exchange rates.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the same period was recorded as €68.4 million, Safilo shared, highlighting a recovery compared to the losses recorded in the same period in 2020, and an increase of over 55% compared to the first nine months in 2019.
In the third quarter of the year, Safilo recorded net sales of €226.6 million. This marked an increase of 2.6% at constant exchange rates when compared to the same period in 2020 – the first quarter of that year to see a recovery following the pandemic – and a rise of 11.1% compared with the third quarter of 2019.
Sales generated by the new proprietary and licensed brands surpassed the “significant business decline” seen as a result of licences terminated at the end of 2020 and in June 2021.
Gross profit for the quarter reached €118.7 million, up 8.9% on the same period in 2019, Safilo reported, while EBITDA reached €17.4 million, an increase of 125.8% compared to the third quarter in 2019, and of 35.8% compared to the same period in 2020.
The company noted that its economic results for the third quarter of 2021 incorporated restructuring costs of €1.7 million.
Prescription frames and sports products continued to be key growth drivers in the third quarter. Meanwhile, the performance of the sunglasses market improved “almost everywhere” the company found, both in comparison with 2019, and to last year when sales of sunglasses remained depressed in many markets.
The online business held a 13% share in the group’s total net sales, a rise compared to 16% in the same quarter in 2020, and only 3% in 2019. Safilo attributed the boost in sales to the contribution of internet-based companies, such as Blenders’, and Smith’s direct to consumer channel.
Angelo Trocchia, Safilo chief executive officer, said of the results: “Positive consumer trends in our key markets and product categories allowed us to close another strong quarter of recovery and growth despite the dampening effect of a still complex environment in a number of countries and our challenging comparison bases in the midst of our brand portfolio overhaul.”
Net sales in Europe reached €82.8 million, with an increase of 3.7% at constant exchange rates compared to the third quarter of 2020. They remained down in comparison to the same period in 2019 at -12.8%. This was attributed primarily to the impact of the terminated licenses.
However, organic sales performance showed a “marked improvement” the company said, up by double digits compared to 2019, “thanks to a moderate recovery in consumer spending and to a favourable phasing in the deliveries of some orders.” Italy outperformed in the region, with solid performances also seen in Germany and the UK. Spain and France remained below 2019 levels, though these markets saw a year-on-year recovery.
Trocchia suggested that the organic growth recorded in key regions, marked a “positive development of the top line.” This, coupled with the “further progress in our cost of goods sold saving programme, allowed us to achieve, in the period, a significant improvement of our operating performance,” he shared.
“We successfully completed the share capital increase we launched in October with the main aim of repaying the shareholder loan we received in 2020 to complete our acquisitions in the year, and this is for us another important step in the direction of building a health and profitable business,” he continued.
From the results of the third quarter, Safilo suggested it is on track to achieve its growth targets for the full year, with net sales expected to be above 2019 levels.
Reflecting on the company performance, Trocchia shared that the strategic priority for the quarter had been to expand the reach of the brand portfolio to new consumer generations, “into the digital universe.”
Illustrating this, in the quarter, Safilo signed a new licensing agreement with the blogger and entrepreneur, Chiara Ferragni.