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This excerpt taken from the LUX 6-K filed Jan 31, 2006. Earnings per share: €0.76
(US$0.95 per ADS)
Andrea Guerra, chief executive officer of Luxottica Group, commented: “Fiscal year 2005 was an exceptional year for our Group, during which we enjoyed strong growth from both wholesale and retail operations, with sales for the year growing by 19.7% and 40.5%, respectively. In wholesale in particular, throughout the entire year we enjoyed significant additional growth in profitability thanks also to improved penetration in key markets. Cash flow generation(5) was another strong feature of our results for the year, at €440 million.”
4
In 2005, Luxottica Group successfully completed the operational integration of the former Cole National business, for which the cost synergies already realized in 2005 will contribute to additional improvements in profitability in the current year. As of the fourth quarter, we entered a new stage of the integration, during which we will focus on the future growth of the businesses, especially of the Pearle Vision retail brand.
In the fourth quarter, the Group continued to see particularly strong results from retail operations in North America, with overall performance and comparable store sales growth rates across the entire 5,300-store division above those of the premium retail sector in that market. Behind a robust quarter by LensCrafters thanks to a focus on sales of premium frames and products, Sunglass Hut posted the third quarter in a row of double-digit comparable sales growth, at nearly 12%, and a strong improvement in profitability.
For the fourth quarter, the Group’s wholesale business experienced significant additional growth and improved profitability, with sales to third parties rising by 27.5 percent. Operating margin for the entire wholesale division for the quarter improved to 22.0 percent, while operating margin for the year rose by 190 bps to 23.2 percent. The performance of the wholesale business reflected the strength of Luxottica Group’s brand portfolio, with yet again more growth from Ray-Ban. Our key luxury brands also posted a strong quarter, in particular Bvlgari, Chanel, Prada and Versace. Results from the October launch of the new Dolce & Gabbana collections were also extremely strong.
Results for the fiscal year ended December 31, 2005, reflected the impact of non-cash expenses for stock options(6) of €16.7 million.
Luxottica Group’s net debt position on December 31, 2005, reflected significant improvement of €280.8 million to consolidated net outstanding debt of €1,435.2 million, compared with net outstanding debt of €1,716.0 million on December 31, 2004.
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