This excerpt taken from the LUX 6-K filed Jun 4, 2008.
LUXOTTICA GROUP IN 2007
2007 was another record year for Luxottica, the fourth year running in which Group sales saw double-digit growth at constant exchange rates. We hit our Euro 5 billion sales target, achieving a 12.5% growth in sales at constant rates, which was close to our exceptional performance in 2006, when sales were up 14.0% over the previous year.
Even without taking Oakley into account, the wholesale division saw 20.2% growth in sales at constant rates in 2007, with sales of around Euro 2 billion, reflecting the excellent work done on the brand portfolio in the last few years. Sales to third party clients (a particularly good indicator of business performance) grew 21.7% at constant rates. Ray-Bans total sales grew by double digits for the fifth consecutive year and excellent results were likewise recorded by the luxury brands, including Bvlgari, Chanel, Dolce & Gabbana, Prada and Versace. Geographically, Luxottica continued to strengthen its presence worldwide. Revenues from the wholesale business in emerging markets were up 41.6%, making this market a priority for expansion.
Retail results, again excluding Oakleys contribution, were satisfactory, with growth of 5.6% in sales at constant rates and an increase in sales of 1.1% (on comparable stores, exchange rates and consolidation area basis) despite the ups and downs of a North American market reacting to fears of recession. In all its other markets, Luxottica recorded excellent results, especially in its retail business in Australia and China. Sunglass Hut continued to grow in all its markets: over the last three years it has posted growth of 40% on comparable stores, exchange rates and consolidation area basis.
The overall business performance in North America, excluding Oakley, was positive throughout the year, with total sales (wholesale and retail) up 6.1% (in US$) on the previous year.
In 2007, Luxottica Group acquired Oakley for US$ 2.1 billion. The acquisition provides an incredible opportunity for the Group.
The agreement will integrate two strong and complementary business models. It will strengthen the Groups portfolio of house and license brands and provide Oakley with a global distribution platform for its products. Oakley is a strong and innovative brand, a world leader in sport, technology and lifestyle, and has great growth potential in various market segments.
A new Group with extraordinary potential has thus come into being: aggregate pro forma net sales for 2007 was approximately Euro 5.5 billion, and pro forma EBITDA was approximately Euro 1.2 billion. Luxottica Group expects the Oakley acquisition to yield synergies worth approximately Euro 100 million over the next three years deriving from increased sales and enhanced operating efficiency.