UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

October 26, 2012

 

COMMISSION FILE NO. 1 - 10421

 

LUXOTTICA GROUP S.p.A.

 

VIA C. CANTÙ 2, MILAN, 20123 ITALY
(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F x Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

 



 

 

Set forth below is the text of a press release issued on October 25, 2012

 

Press release

 

Luxottica, another quarter of solid growth

 

Net sales for the 2012 third quarter exceed 1.7 billion Euros (+17.0%)

Net income of 138.6 million Euros (+30.6%)

 

Milan (Italy) October 25, 2012 — The Board of Directors of Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), a leader in the design, manufacture and distribution of fashion, luxury and sports eyewear, met today and approved the consolidated results for the three- and nine- month periods ended September 30, 2012 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IAS/IFRS).

 

Third quarter of 20121

 

(In millions of Euro)

 

3Q 2012

 

3Q 2011

 

Change

 

 

 

 

 

 

 

(at current exchange rates)

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

1,783.5

 

1,523.8

 

+17.0%

 

(+6.7% at constant exchange rates2)

 

Operating income

 

248.9

 

194.5

 

 

 

 

 

Adjusted operating income3,4

 

248.9

 

197.4

 

+26.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Luxottica Group stockholders

 

138.6

 

111.2

 

 

 

 

 

Adjusted net income3,4 attributable to Luxottica Group stockholders

 

138.6

 

106.1

 

+30.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

0.30

 

0.24

 

 

 

 

 

Adjusted earnings per share3,4

 

0.30

 

0.23

 

+29.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share in US$

 

0.37

 

0.34

 

 

 

 

 

Adjusted earnings per share3,4 in US$

 

0.37

 

0.33

 

+14.3%

 

 

 

 

First nine months of 20121

 

(In millions of Euro)

 

9M 2012

 

9M 2011

 

Change

 

 

 

 

 

 

 

(at current exchange rates)

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

5,453.8

 

4,713.5

 

+15.7%

 

(+8.2% at constant exchange rates2)

 

Operating income

 

818.0

 

678.8

 

 

 

 

 

Adjusted operating income3,4

 

839.8

 

681.6

 

+23.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Luxottica Group stockholders

 

464.9

 

388.0

 

 

 

 

 

Adjusted net income attributable to Luxottica Group stockholders3,4

 

480.2

 

382.9

 

+25.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

1.00

 

0.84

 

 

 

 

 

Adjusted earnings per share3,4

 

1.03

 

0.83

 

+24.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share in US$

 

1.28

 

1.19

 

 

 

 

 

Adjusted earnings per share3,4 in US$

 

1.33

 

1.17

 

+13.3%

 

 

 

 

2



 

Operating performance for the third quarter of 2012

During the third quarter of 2012, Luxottica’s growth trend continued at a steady pace. In an overall global macroeconomic environment that was increasingly challenging, Luxottica achieved positive results across all regions, delivering improved results for the eleventh straight quarter.

 

In the third quarter of 2012, the Group’s net sales increased from Euro 1,523.8 million to Euro 1,783.5 million, up 17.0% (+6.7% at constant exchange rates2). In the first nine months, net sales grew by 15.7% (+8.2% at constant exchange rates2) to Euro 5,453.8 million (Euro 4,713.5 million during the same period in 2011).

 

“The third quarter results confirm the Group’s excellent performance, which testifies to Luxottica’s commitment to serving its customers and consumers.”, commented Andrea Guerra, Chief Executive Officer of Luxottica.

 

“We have generated a record positive free cash flow4 of Euro 271 million, permitting a further reduction in net debt and strengthening our balance sheet.

 

Both the Wholesale and Retail divisions have worked enthusiastically and with strong determination within all regions where the Group is present. It is important to note the strong continuous growth achieved in North America which exceeded our initial expectations, the acceleration in Western Europe (+9% in quarter), and the recovery in the Mediterranean region.

 

“Investments in emerging markets continue to pay off. We are very satisfied with our operating margin results, which improved by 100 basis points at the Group level. We are confident that our balanced business model and sales momentum constitute an excellent base as we head towards the end of 2012 and will allow us to take advantage of future opportunities.”

 

EBITDA for the third quarter of 2012 rose by 24.0% over the same period in 2011, increasing from Euro 276.0 million (on an adjusted basis)3,4 in 2011 to Euro 342.1 million in the current period. Additionally, adjusted EBITDA 3,4 for the first nine months of 2012 reached Euro 1,103.6 million, an increase over the Euro 911.1 million recorded for the same period in 2011.

 

Operating income for the third quarter of 2012 grew by 26.1% year-over-year, equalling Euro 248.9 million (Euro 197.4 million on an adjusted basis)3,4 The Group’s operating margin increased from 13.0% (on an adjusted basis)3,4 in the same period of 2011 to 14.0% in the current quarter.

 

During the first nine months of the year, adjusted operating income3,4 amounted to Euro 839.8 million, up by 23.2% compared with Euro 681.6 million in the same period of 2011. The Group’s adjusted operating margin3,4 therefore rose to 15.4% in the first nine months of 2012, from 14.5% during the same period in 2011.

 

3



 

Net income for the third quarter of 2012 increased to Euro 138.6 million (Euro 106.1 million on an adjusted basis3,4 in 2011), up 30.6%, resulting in EPS (earnings per share) of 0.30 Euros for the quarter (at an average Euro/US dollar exchange rate of 1.2502). EPS in US dollars was US$ 0.37 for the third quarter of 2012.

 

Strict control over working capital during the third quarter enabled Luxottica to accumulate a record positive free cash flowof Euro 271.0 million. This facilitated a reduction in net debt,4 which totalled Euro 1,887 million at September 30, 2012 (Euro 2,032 million at the end of 2011), and resulted in a net debt to adjusted EBITDA3,4 ratio of 1.4x at September 30, 2012.

 

Luxottica recorded solid and balanced growth during the third quarter of 2012 in both the Wholesale and Retail divisions.

 

Wholesale division

During the third quarter of 2012, the Wholesale division continued to achieve excellent results in terms of both net sales and profitability, while increasing its presence and exploiting opportunities in fast-growing regions.

 

Sales performance in key areas, such as North America and the emerging markets, stood out this quarter. Double-digit growth was recorded in China, Turkey, Mexico, India, Brazil and Eastern Europe. Excellent results were also achieved in Western Europe, with Nordic countries, France, Germany and the UK up double-digits in the quarter. Performance in Italy was slightly negative, while Spain returned to growth.

 

Wholesale’s strong results were driven by the success of our new collections, our ability to establish unique and long-term relationships with our customers and by consistently offering a best-in-class service. The strength of our brand portfolio is also at the root of this success, with double-digit growth in Ray-Ban, Oakley and the luxury segment.

 

The Wholesale division’s net sales rose to Euro 646.8 million from Euro 555.1 million in the third quarter of 2011 (+16.5% at current exchange rates and +10.7% at constant exchange rates2). On a nine-month basis, net sales were Euro 2,161.8 million, improving by 13.8% at current exchange rates (+10.3% at constant exchange rates2) as compared with Euro 1,900.2 million in the first nine months of 2011.

 

Operating income grew to Euro 124.8 million, compared with Euro 104.9 million during the third quarter of 2011. The operating margin grew from 18.9% in the third quarter of 2011 to 19.3% for the third quarter of 2012. In the first nine months of 2012, the operating margin was 23.4% (23.2% in the same period of 2011).

 

Retail division

During the third quarter of 2012, the Retail division recorded solid and well-balanced growth across all regions. Net sales equalled Euro 1,136.7 million (Euro 968.7 million in the third quarter of 2011), +17.3% year-over-year (+4.4% at constant exchange rates2).

 

During the first nine months of 2012, net sales were Euro 3,292.1 million, up 17.0% compared with Euro 2,813.3 million in the same period of 2011 (+6.9% at constant exchange rates2).

 

The Retail division’s operating income increased from Euro 127.4 million on an adjusted basis3,4 in the third quarter of 2011 to Euro 166.2 million (+30.5%). The operating margin amounted to 14.6%, up from 13.2% on an adjusted basis3,4 in the third quarter of 2011. The adjusted operating margin3,4 in the first nine months of 2012 was 14.0% (12.6% in the 2011 period).

 

In terms of comparable store sales5, the Retail division grew by 5.9% during the quarter.

 

4



 

The North American optical business also exhibited positive trends in the current period with LensCrafters recording an increase in comparable store salesof 2.5%.

 

Sunglass Hut, the Group’s sun specialty chain that operates in a number of countries, once again delivered record results, with overall comparable store salesup 8.8%. Stellar performance was achieved in the United States (+8.4%) and Mexico, which recorded an increase in excess of 30% in comparable store salesas a result of investments made over the last few months.

 

In Australia, the reorganization that began in February 2012 led to an 8.5% increase in comparable store salesin the optical segment during the third quarter (+6.2% for the current nine-month period). The contribution of OPSM to these results was significant, accelerating in the quarter with growth of 12%.

 

§

 

Results for the third quarter and for the first nine months of 2012 will be discussed today in a conference call with the financial community starting at 6:30 PM CET. The audio portion and related presentation will be available via live webcast at www.luxottica.com.

 

The officer responsible for preparing the Company’s financial reports, Enrico Cavatorta, declares, pursuant to Article 154-bis, Section 4, of the Consolidated Law on Finance, that the accounting information contained in this press release is consistent with the data in the supporting documents, books of accounts and other accounting records.

 

Luxottica Group — Contacts

 

Cristina Parenti

Alessandra Senici

Group Corporate Communication and Public Relations Director

Group Investor Relations Director

Tel.: +39 (02) 8633 4683

Tel.: +39 (02) 8633 4870

E-mail: cristina.parenti@luxottica.com

E-mail: InvestorRelations@Luxottica.com

 

 

Ana Iris Reece

 

Group Financial and Corporate Press Office Manager

 

Tel.: +39 (02) 8633 4912

 

Email: anairis.reece@luxottica.com

 

 

Notes on the press release

 


1 All comparisons, including percentage changes, refer to the three-month and the nine-month periods ended September 30, 2012 and September 30, 2011, respectively.

2 Figures given at constant exchange rates have been calculated using the average exchange rate in effect for the respective comparative period in the previous year. For further information, please refer to the attached tables.

3 The adjusted data for the third quarter of 2011 does not include: an extraordinary gain of approximately €21 million related to the acquisition of the 40% stake in Multiopticas Internacional; non-recurring costs related to Luxottica’s 50th anniversary celebrations of approximately €12 million; and non-recurring restructuring and start-up costs in the Retail Division of approximately €11.8 million.

The adjusted data for the first nine months of 2012 does not include restructuring costs relating to the reorganization of OPSM amounting to an approximately €21.7 million adjustment to Operating Income and an approximately €15.2 million adjustment to Net Income.

4 EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted operating margin, free cash flow, net debt, the ratio of net debt to adjusted EBITDA, adjusted net income, adjusted operating income and adjusted

 

5



 

earnings per share are not measures in accordance with IAS/IFRS. For additional information on non-IAS/IFRS measures, please see the attached tables.

5 Comparable store sales reflect 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. Commencing 2Q12, retail comparable store sales exclude Pearle Vision results.

 

Luxottica Group S.p.A.

Luxottica Group is a leader in premium, luxury and sports eyewear with approximately 7,000 optical and sun retail stores in North America, Asia-Pacific, China, South Africa, Latin America and Europe, and a strong, well-balanced brand portfolio. House brands include Ray-Ban, the world’s most famous sun eyewear brand, Oakley, Vogue, Persol, Oliver Peoples, Arnette and REVO, while licensed brands include Bvlgari, Burberry, Chanel, Coach, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Tiffany and Versace. In addition to a global wholesale network involving 130 different countries, the Group manages leading retail chains in major markets, including LensCrafters, Pearle Vision and ILORI in North America, OPSM and Laubman & Pank in Asia-Pacific, LensCrafters in China, GMO in Latin America and Sunglass Hut worldwide. The Group’s products are designed and manufactured at its six manufacturing plants in Italy, two wholly owned plants in the People’s Republic of China, one plant in Brazil and one plant in the United States devoted to the production of sports eyewear. In 2011, Luxottica Group posted net sales of more than €6.2 billion. Additional information on the Group is available at 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 current uncertain international economic outlook, 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, changes in local conditions, the ability to protect intellectual property, the ability to maintain relations with those hosting our stores, computer system problems, inventory-related risks, credit and insurance risks, changes to tax regimes as well as other, political, economic and technological factors and other risks and uncertainties described in our filings with the 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.

 

- APPENDIX FOLLOWS -

 

6



 

LUXOTTICA GROUP

 

CONSOLIDATED FINANCIAL HIGHLIGHTS

FOR THE THREE-MONTH PERIODS ENDED

SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011

 

In accordance with IAS/IFRS

 

 

 

2012

 

2011

 

% Change

 

KEY FIGURES IN THOUSANDS OF EURO (1) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

1,783,486

 

1,523,807

 

17.0

%

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO LUXOTTICA GROUP STOCKHOLDERS

 

138,616

 

111,181

 

24.7

%

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE (ADS)(2):

 

0.30

 

0.24

 

23.3

%

 

 

 

2012

 

2011

 

% Change

 

KEY FIGURES IN THOUSANDS OF U.S. DOLLARS (1) (3) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

2,229,714

 

2,152,682

 

3.6

%

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO LUXOTTICA GROUP STOCKHOLDERS

 

173,298

 

157,065

 

10.3

%

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE (ADS) (2):

 

0.37

 

0.34

 

9.1

%

 


 

 

2012

 

2011

 

Notes :

 

 

 

 

 

(1) Except earnings per share (ADS), which are expressed in Euro and U.S. Dollars, respectively

 

 

 

 

 

(2) Weighted average number of outstanding shares

 

465,528,412

 

460,505,512

 

(3) Average exchange rate (in U.S. Dollars per Euro)

 

1.2502

 

1.4127

 

 

7



 

LUXOTTICA GROUP

 

CONSOLIDATED FINANCIAL HIGHLIGHTS

FOR THE NINE-MONTH PERIODS ENDED

SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011

 

In accordance with IAS/IFRS

 

 

 

2012

 

2011

 

% Change

 

KEY FIGURES IN THOUSANDS OF EURO (1) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

5,453,844

 

4,713,453

 

15.7

%

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO LUXOTTICA GROUP STOCKHOLDERS

 

464,937

 

387,962

 

19.8

%

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE (ADS) (2)

 

1.00

 

0.84

 

18.9

%

 

 

 

2012

 

2011

 

% Change

 

KEY FIGURES IN THOUSANDS OF U.S. DOLLARS (1) (3) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

6,985,283

 

6,629,471

 

5.4

%

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO LUXOTTICA GROUP STOCKHOLDERS

 

595,491

 

545,669

 

9.1

%

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE (ADS)(2)

 

1.28

 

1.19

 

8.3

%

 


 

 

2012

 

2011

 

Notes :

 

 

 

 

 

(1) Except earnings per share (ADS), which are expressed in Euro and U.S. Dollars, respectively

 

 

 

 

 

(2) Weighted average number of outstanding shares

 

464,002,373

 

460,249,023

 

(3) Average exchange rate (in U.S. Dollars per Euro)

 

1.2808

 

1.4065

 

 

8



 

LUXOTTICA GROUP

 

CONSOLIDATED INCOME STATEMENT

FOR THE THREE-MONTH PERIODS ENDED

SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011

 

In accordance with IAS/IFRS

 

 

 

2012

 

% of sales

 

2011

 

% of sales

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

KEY FIGURES IN THOUSANDS OF EURO (1) 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

1,783,486

 

100.0

%

1,523,807

 

100.0

%

17.0

%

COST OF SALES

 

(596,155

)

 

 

(524,657

)

 

 

 

 

GROSS PROFIT

 

1,187,332

 

66.6

%

999,151

 

65.6

%

18.8

%

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

SELLING EXPENSES

 

(571,907

)

 

 

(505,421

)

 

 

 

 

ROYALTIES

 

(29,350

)

 

 

(23,070

)

 

 

 

 

ADVERTISING EXPENSES

 

(120,023

)

 

 

(103,098

)

 

 

 

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

(194,934

)

 

 

(152,936

)

 

 

 

 

TRADEMARK AMORTIZATION AND OTHER

 

(22,236

)

 

 

(20,090

)

 

 

 

 

TOTAL

 

(938,451

)

 

 

(804,614

)

 

 

 

 

OPERATING INCOME

 

248,881

 

14.0

%

194,537

 

12.8

%

27.9

%

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSES

 

(33,177

)

 

 

(29,375

)

 

 

 

 

INTEREST INCOME

 

2,900

 

 

 

3,158

 

 

 

 

 

OTHER - NET

 

(3,162

)

 

 

(3,051

)

 

 

 

 

OTHER INCOME (EXPENSES)-NET

 

(33,439

)

 

 

(29,268

)

 

 

 

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

215,442

 

12.1

%

165,268

 

10.8

%

30.4

%

PROVISION FOR INCOME TAXES

 

(76,361

)

 

 

(52,990

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

139,081

 

 

 

112,278

 

 

 

 

 

OF WHICH ATTRIBUTABLE TO:

 

 

 

 

 

 

 

 

 

 

 

- LUXOTTICA GROUP STOCKHOLDERS

 

138,616

 

7.8

%

111,181

 

7.3

%

24.7

%

- NON-CONTROLLING INTERESTS

 

465

 

0.0

%

1,097

 

0.1

%

 

 

NET INCOME

 

139,081

 

7.8

%

112,278

 

7.4

%

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE (ADS):

 

0.30

 

 

 

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FULLY DILUTED EARNINGS PER SHARE (ADS):

 

0.30

 

 

 

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES

 

465,528,412

 

 

 

460,505,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FULLY DILUTED AVERAGE NUMBER OF SHARES

 

467,486,153

 

 

 

462,079,618

 

 

 

 

 

 

9



 

LUXOTTICA GROUP

 

CONSOLIDATED INCOME STATEMENT

FOR THE NINE-MONTH PERIODS ENDED

SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011

 

In accordance with IAS/IFRS

 

 

 

2012

 

% of sales

 

2011

 

% of sales

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

KEY FIGURES IN THOUSANDS OF EURO (1) 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

5,453,844

 

100.0

%

4,713,453

 

100.0

%

15.7

%

COST OF SALES

 

(1,825,197

)

 

 

(1,621,783

)

 

 

 

 

GROSS PROFIT

 

3,628,648

 

66.5

%

3,091,670

 

65.6

%

17.4

%

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

SELLING EXPENSES

 

(1,706,326

)

 

 

(1,485,787

)

 

 

 

 

ROYALTIES

 

(97,454

)

 

 

(80,122

)

 

 

 

 

ADVERTISING EXPENSES

 

(345,430

)

 

 

(306,771

)

 

 

 

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

(596,548

)

 

 

(480,061

)

 

 

 

 

TRADEMARK AMORTIZATION AND OTHER

 

(64,860

)

 

 

(60,159

)

 

 

 

 

TOTAL

 

(2,810,618

)

 

 

(2,412,900

)

 

 

 

 

OPERATING INCOME

 

818,029

 

15.0

%

678,771

 

14.4

%

20.5

%

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSES

 

(106,166

)

 

 

(89,809

)

 

 

 

 

INTEREST INCOME

 

14,795

 

 

 

10,393

 

 

 

 

 

OTHER - NET

 

(3,651

)

 

 

(5,947

)

 

 

 

 

OTHER INCOME (EXPENSES)-NET

 

(95,021

)

 

 

(85,363

)

 

 

 

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

723,008

 

13.3

%

593,408

 

12.6

%

21.8

%

PROVISION FOR INCOME TAXES

 

(254,438

)

 

 

(200,211

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

468,570

 

8.6

%

393,197

 

8.3

%

19.2

%

OF WHICH ATTRIBUTABLE TO:

 

 

 

 

 

 

 

 

 

 

 

- LUXOTTICA GROUP STOCKHOLDERS

 

464,938

 

8.5

%

387,962

 

8.2

%

19.8

%

- NON-CONTROLLING INTERESTS

 

3,632

 

0.1

%

5,235

 

0.1

%

 

 

NET INCOME

 

468,570

 

8.6

%

393,197

 

8.3

%

19.2

%

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE (ADS):

 

1.00

 

 

 

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FULLY DILUTED EARNINGS PER SHARE (ADS):

 

1.00

 

 

 

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF OUTSTANDING SHARES

 

464,002,373

 

 

 

460,249,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FULLY DILUTED AVERAGE NUMBER OF SHARES

 

466,184,724

 

 

 

462,121,938

 

 

 

 

 

 


Notes :

(1) Except earnings per share (ADS), which are expressed in Euro

 

10



 

LUXOTTICA GROUP

 

CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2012 AND DECEMBER 31, 2011

 

In accordance with IAS/IFRS

 

 

 

September 30, 2012

 

December 31, 2011

 

KEY FIGURES IN THOUSANDS OF EURO

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

CASH AND CASH EQUIVALENTS

 

1,026,050

 

905,100

 

ACCOUNTS RECEIVABLE - NET

 

829,449

 

714,033

 

INVENTORIES - NET

 

707,042

 

649,506

 

OTHER ASSETS

 

204,563

 

230,850

 

TOTAL CURRENT ASSETS

 

2,767,104

 

2,499,489

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT - NET

 

1,174,773

 

1,169,066

 

GOODWILL

 

3,193,041

 

3,090,563

 

INTANGIBLE ASSETS - NET

 

1,370,114

 

1,350,921

 

INVESTMENTS

 

12,217

 

8,754

 

OTHER ASSETS

 

133,116

 

147,625

 

DEFERRED TAX ASSETS

 

230,380

 

202,206

 

TOTAL NON-CURRENT ASSETS

 

6,113,640

 

5,969,135

 

 

 

 

 

 

 

TOTAL

 

8,880,744

 

8,468,624

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

SHORT-TERM BORROWINGS

 

113,685

 

193,834

 

CURRENT PORTION OF LONG-TERM DEBT

 

401,029

 

498,295

 

ACCOUNTS PAYABLE

 

567,871

 

608,327

 

INCOME TAXES PAYABLE

 

133,037

 

39,859

 

SHORT TERM PROVISIONS FOR RISKS AND OTHER CHARGES

 

63,182

 

53,337

 

OTHER LIABILITIES

 

630,897

 

579,595

 

TOTAL CURRENT LIABILITIES

 

1,909,701

 

1,973,247

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

LONG-TERM DEBT

 

2,398,752

 

2,244,583

 

EMPLOYEE BENEFITS

 

200,878

 

197,675

 

DEFERRED TAX LIABILITIES

 

272,517

 

280,842

 

LONG TERM PROVISIONS FOR RISKS AND OTHER CHARGES

 

98,347

 

80,400

 

OTHER LIABILITIES

 

53,524

 

66,756

 

TOTAL NON-CURRENT LIABILITIES

 

3,024,019

 

2,870,256

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

LUXOTTICA GROUP STOCKHOLDERS’ EQUITY

 

3,935,349

 

3,612,928

 

NON-CONTROLLING INTEREST

 

11,676

 

12,192

 

TOTAL STOCKHOLDERS’ EQUITY

 

3,947,025

 

3,625,120

 

 

 

 

 

 

 

TOTAL

 

8,880,744

 

8,468,624

 

 

11



 

LUXOTTICA GROUP

 

CONSOLIDATED FINANCIAL HIGHLIGHTS

FOR THE NINE-MONTH PERIODS ENDED

SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011

- SEGMENTAL INFORMATION -

 

In accordance with IAS/IFRS

 

In thousands of Euro 

 

Manufacturing
and
Wholesale

 

Retail

 

Inter-Segment
Transactions and
Corporate Adj.

 

Consolidated

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

2,161,769

 

3,292,075

 

 

 

5,453,844

 

Operating Income

 

505,403

 

438,805

 

(126,179

)

818,029

 

% of Sales

 

23.4

%

13.3

%

 

 

15.0

%

Capital Expenditures(1)

 

90,481

 

153,220

 

 

 

243,701

 

Depreciation & Amortization

 

79,168

 

119,833

 

64,860

 

263,861

 

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

1,900,165

 

2,813,289

 

 

 

4,713,453

 

Operating Income

 

441,246

 

342,133

 

(104,609

)

678,771

 

% of Sales

 

23.2

%

12.2

%

 

 

14.4

%

Capital Expenditures

 

71,014

 

126,545

 

 

 

197,560

 

Depreciation & Amortization

 

62,205

 

107,136

 

60,159

 

229,500

 

 


Notes:

(1) In 2012, Capital Expenditures include finance leases of the Retail division of Euro 18.7 million. Capital Expenditures excluding finance leases were Euro 224.9 million.

 

12



 

Major currencies

 

 

 

Three months ended

 

Nine months ended

 

Twelve months ended

 

Three months ended

 

Nine months ended

 

 

 

September 30, 2012

 

September 30, 2012

 

December 31, 2011

 

September 30, 2011

 

September 30, 2011

 

Average exchange rates per € 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US$

 

1.25024

 

1.28082

 

1.39196

 

1.41270

 

1.40648

 

 

 

 

 

 

 

 

 

 

 

 

 

AUD

 

1.20350

 

1.23813

 

1.34839

 

1.34585

 

1.35398

 

 

 

 

 

 

 

 

 

 

 

 

 

GBP

 

0.79153

 

0.81203

 

0.86788

 

0.87760

 

0.87140

 

 

 

 

 

 

 

 

 

 

 

 

 

CNY

 

7.94102

 

8.10578

 

8.99600

 

9.06533

 

9.13784

 

 

 

 

 

 

 

 

 

 

 

 

 

JPY

 

98.30231

 

101.61484

 

110.95860

 

109.77212

 

113.19244

 

 

13



 

Non-IAS/IFRS measures: Adjusted measures

 

In order to provide a supplemental comparison of current period results of operations to prior periods, we have adjusted for certain non-recurring transactions or events.

 

We have made such adjustments to the following measures: EBITDA, EBITDA margin, operating income, operating margin, net income and earnings per share.

 

For comparative purposes, management has adjusted each of the foregoing measures by excluding non-recurring OPSM reorganization costs of approximately €22 million.

In addition, we have made adjustments to fiscal year 2011 measures for comparative purposes as described in the footnotes to the tables that contain such fiscal year 2011 data.

 

The Company believes that these adjusted measures are useful to both management and investors in evaluating the Company’s operating performance compared with that of other companies in its industry because they exclude the impact of non-recurring items that are not relevant to the Company’s operating performance.

 

The adjusted measures referenced above are not measures of performance in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IAS/IFRS).  We include these adjusted comparisons in this presentation in order to provide a supplemental view of operations that excludes items that are unusual, infrequent or unrelated to our ongoing core operations.

 

These adjusted measures are not meant to be considered in isolation or as a substitute for items appearing on our financial statements prepared in accordance with IAS/IFRS.  Rather, these non-IAS/IFRS measures should be used as a supplement to IAS/IFRS results to assist the reader in better understanding the operational performance of the Company.  The Company cautions that these adjusted measures are not defined terms under IAS/IFRS and their definitions should be carefully reviewed and understood by investors.  Investors should be aware that Luxottica Group’s method of calculating these adjusted measures may differ from methods used by other companies.

 

The Company recognizes that there are limitations in the usefulness of adjusted comparisons due to the subjective nature of items excluded by management in calculating adjusted comparisons.  We compensate for the foregoing limitation by using these adjusted measures as a comparative tool, together with IAS/IFRS measurements, to assist in the evaluation of our operating performance.

 

See the tables on the following pages for a reconciliation of the adjusted measures discussed above to their most directly comparable IAS/IFRS financial measures or, in the case of adjusted EBITDA and adjusted EBITDA margin, to EBITDA and EBITDA margin, respectively, which are also non-IAS/IFRS measures. For a discussion of EBITDA and EBITDA margin and a reconciliation of EBITDA and EBITDA margin to their most directly comparable IAS/IFRS financial measures, see the tables on the pages immediately following the reconciliation of the adjusted measures.

 

14



 

Non-IAS/IFRS measure: Reconciliation between reported and adjusted P&L items

Millions of Euro

 

Luxottica Group

 

 

 

3Q12

 

3Q11

 

 

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

1,783.5

 

342.1

 

248.9

 

138.6

 

0.30

 

1,523.8

 

273.1

 

194.5

 

111.2

 

0.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for Multiopticas Internacional extraordinary gain

 

 

 

 

 

 

 

 

 

 

 

 

 

(21.0

)

(21.0

)

(21.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for 50th anniversary celebration

 

 

 

 

 

 

 

 

 

 

 

 

 

12.0

 

12.0

 

8.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for restructuring costs in the Retail Division

 

 

 

 

 

 

 

 

 

 

 

 

 

11.8

 

11.8

 

7.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted

 

1,783.5

 

342.1

 

248.9

 

138.6

 

0.30

 

1,523.8

 

276.0

 

197.4

 

106.1

 

0.23

 

 

Retail Division

 

 

 

3Q12

 

3Q11

 

 

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

1,136.7

 

205.6

 

166.2

 

n.a.

 

n.a.

 

968.7

 

153.4

 

115.6

 

n.a.

 

n.a.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for restructuring costs in the Retail Division

 

 

 

 

 

 

 

 

 

 

 

 

 

11.8

 

11.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted

 

1,136.7

 

205.6

 

166.2

 

n.a.

 

n.a.

 

968.7

 

165.2

 

127.4

 

n.a.

 

n.a.

 

 

15



 

Non-IAS/IFRS measure: Reconciliation between reported and adjusted P&L items

Millions of Euro

 

Luxottica Group

 

 

 

9M12

 

9M11

 

 

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

5,453.8

 

1,081.9

 

818.0

 

464.9

 

1.00

 

4,713.5

 

908.3

 

678.8

 

388.0

 

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for OPSM reorganization

 

 

 

21.7

 

21.7

 

15.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for Multiopticas Internacional extraordinary gain

 

 

 

 

 

 

 

 

 

 

 

 

 

(21.0

)

(21.0

)

(21.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for 50th anniversary celebration

 

 

 

 

 

 

 

 

 

 

 

 

 

12.0

 

12.0

 

8.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for restructuring costs in the Retail Division

 

 

 

 

 

 

 

 

 

 

 

 

 

11.8

 

11.8

 

7.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted

 

5,453.8

 

1,103.6

 

839.8

 

480.2

 

1.03

 

4,713.5

 

911.1

 

681.6

 

382.9

 

0.83

 

 

Retail Division

 

 

 

9M12

 

9M11

 

 

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

Net sales

 

EBITDA

 

Operating Income

 

Net Income

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

3,292.1

 

558.6

 

438.8

 

n.a.

 

n.a.

 

2,813.3

 

449.3

 

342.1

 

n.a.

 

n.a.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for OPSM reorganization

 

 

 

21.7

 

21.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

> Adjustment for restructuring costs in the Retail Division

 

 

 

 

 

 

 

 

 

 

 

 

 

11.8

 

11.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted

 

3,292.1

 

580.4

 

460.5

 

n.a.

 

n.a.

 

2,813.3

 

461.1

 

354.0

 

n.a.

 

n.a.

 

 

16



 

Non-IAS/IFRS measure: EBITDA and EBITDA margin

 

EBITDA represents net income before non-controlling interest, taxes, other income/expense, 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 International Financial Reporting Standards as issued by the International Accounting Standards Board (IAS/IFRS).

 

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 IAS/IFRS. Rather, these non-IAS/IFRS measures should be used as a supplement to IAS/IFRS 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 IAS/IFRS 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; and

·         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 IAS/IFRS measurements, to assist in the evaluation of our operating performance and leverage.

 

See the table on the following page for a reconciliation of EBITDA to net income, which is the most directly comparable IAS/IFRS financial measure, as well as the calculation of EBITDA margin on net sales.

 

17



 

Non-IAS/IFRS measure: EBITDA and EBITDA margin

Millions of Euro

 

 

 

3Q 2011

 

3Q 2012

 

9M 2011

 

9M 2012

 

FY 2011

 

LTM September 30,
2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

111.2

 

138.6

 

388.0

 

464.9

 

452.3

 

529.3

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

1.1

 

0.5

 

5.2

 

3.6

 

6.0

 

4.4

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

53.0

 

76.4

 

200.2

 

254.4

 

237.0

 

291.2

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income)/expense

 

29.3

 

33.4

 

85.4

 

95.0

 

111.9

 

121.5

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation & amortization

 

78.6

 

93.2

 

229.5

 

263.9

 

323.9

 

358.2

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

273.1

 

342.1

 

908.3

 

1,081.9

 

1,131.0

 

1,304.6

 

(=)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

1,523.8

 

1,783.5

 

4,713.5

 

5,453.8

 

6,222.5

 

6,962.9

 

(/)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA margin

 

17.9

%

19.2

%

19.3

%

19.8

%

18.2

%

18.7

%

(=)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18



 

Non-IAS/IFRS measure: Adjusted EBITDA and Adjusted EBITDA margin

Millions of Euro

 

 

 

3Q 20111,2

 

3Q 2012

 

9M 20111,2

 

9M 20122

 

FY 20111,2

 

LTM September 30,
2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net income/(loss)

 

106.1

 

138.6

 

382.9

 

480.2

 

455.6

 

552.9

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

1.1

 

0.5

 

5.2

 

3.6

 

6.0

 

4.4

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Provision for income taxes

 

60.9

 

76.4

 

208.1

 

261.0

 

247.4

 

300.3

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income)/expense

 

29.3

 

33.4

 

85.4

 

95.0

 

111.9

 

121.5

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Depreciation & amortization

 

78.6

 

93.2

 

229.5

 

263.9

 

315.0

 

349.3

 

(+)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

276.0

 

342.1

 

911.1

 

1,103.6

 

1,135.9

 

1,328.4

 

(=)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

1,523.8

 

1,783.5

 

4,713.5

 

5,453.8

 

6,222.5

 

6,962.9

 

(/)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

18.1

%

19.2

%

19.3

%

20.2

%

18.3

%

19.1

%

(=)

 

 

 

 

 

 

 

 

 

 

 

 

 

 


1                  The adjusted figures exclude the following measures:

(a)        an extraordinary gain of approximately €21 million (3 and 9 months ended September 30, 2011) and €19 million (for the year 2011) related to the acquisition, in 2009, of a 40% stake in Multiopticas Internacional;

(b)        non-recurring costs related to Luxottica’s 50th anniversary celebrations of approximately €12 million, including the adjustment relating to the grant of treasury shares to Group employees; and

(c)         non-recurring restructuring and start-up costs in the Retail Division of approximately €11.8 million (3 and 9 months ended September 30, 2011) and €11.2 million (for the year 2011);

2                  Non-recurring OPSM re-organization costs of approximately €9.6 million in 2011 and €21.7 million in 2012 are also excluded from adjusted figures.

 

19



 

Non-IAS/IFRS 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 net income before non-controlling interest, taxes, other income/expense, 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 International Financial Reporting Standards as issued by the International Accounting Standards Board (IAS/IFRS).

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 IAS/IFRS. Rather, these non-IAS/IFRS measures should be used as a supplement to IAS/IFRS 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 IAS/IFRS 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 IAS/IFRS measurements, to assist in the evaluation of our operating performance and leverage.

 

   See the table on the following page for a reconciliation of net debt to long-term debt, which is the most directly comparable IAS/IFRS financial measure, as well as the calculation of the ratio of net debt to EBITDA. For a reconciliation of EBITDA to net income, which is the most directly comparable IAS/IFRS financial measure, see the table on the preceding pages.

 

20



 

Non-IAS/IFRS measure: Net debt and Net debt/EBITDA

Millions of Euro

 

 

 

Sep. 30, 2012

 

Dec. 31, 2011

 

 

 

 

 

 

 

Long-term debt (+)

 

2,398.8

 

2,244.6

 

 

 

 

 

 

 

Current portion of long-term debt (+)

 

401.0

 

498.3

 

 

 

 

 

 

 

Bank overdrafts (+)

 

113.7

 

193.8

 

 

 

 

 

 

 

Cash (-)

 

(1,026.0

)

(905.1

)

 

 

 

 

 

 

Net debt (=)

 

1,887.4

 

2,031.6

 

 

 

 

 

 

 

EBITDA

 

1,304.6

 

1,131.0

 

 

 

 

 

 

 

Net debt/EBITDA

 

1.4x

 

1.8x

 

 

 

 

 

 

 

Net debt @ avg. exchange rates(1)

 

1,887.4

 

1,944.4

 

 

 

 

 

 

 

Net debt @ avg. exchange rates(1)/EBITDA