This excerpt taken from the LUX 6-K filed Mar 17, 2009.
The performance of the Group in 2008
In 2008, consolidated net sales rose at sustained rates, increasing by 10.7% at constant exchange rates (by 4.7% at current exchange rates), thus passing the Euro 5 billion mark for the first time in the history of the Group (Euro 5,201.6 million, compared with Euro 4,966.1 million for fiscal year 2007). This was mainly due to the contribution made by Oakley sales. Pro forma consolidated net sales(5) at constant exchange rates, on the other hand, were substantially unchanged (down 0.8%).
In the fourth quarter of 2008, overall demand contracted significantly, resulting in a reduction in margins for both the retail and wholesale divisions: sharp and sudden declines in sales have an immediate impact on operating margins, especially for the Retail division. At the same time, during the fourth quarter the Group took a number of significant steps within its manufacturing and logistics operations, which are contributing to returning the Groups balance sheet to its optimal status. The Groups net sales for the fourth quarter were Euro 1,236.5 million, compared with Euro 1,188.5 million for the fourth quarter of 2007 (unchanged at constant exchange rates, up by 4% at current exchange rates), while pro forma net sales(5) were down by 5.5% at constant exchange rates.
Regarding operating performance, EBITDA(2) for the year decreased slightly (by 3%(3) to Euro 1,014.7 million for 2008, from Euro 1,046.1(3) million for the previous year). On a pro forma basis(5), EBITDA margin(2) declined by 120 bps(3) to 19.5%, from 20.7%(3) for fiscal 2007. In the fourth quarter, EBITDA(2) declined by 13.7% to Euro 186.1 million, from Euro 215.7 million for the same period the previous year.
Operating income for the year was Euro 749.8 million, compared with Euro 813.3(3) million for the previous year (reflecting a decline by 7.8%(3)). On a pro forma basis(5), the Groups operating margin for the full year was 14.4%, compared with 15.5%(3) for 2007 (down by 110 bps(3)). For the fourth quarter, operating income was Euro 117.4 million, reflecting a 22.6% decline from Euro 151.7 million for the same period the previous year.
Net income for fiscal year 2008 was Euro 395.0(4) million (Euro 479.2(3) million in 2007, reflecting a 17.6%(3),(4) decline from the previous year), with earnings per share (EPS) of Euro 0.87(4) (at an average Euro/U.S. Dollar exchange rate of 1.47). On a comparable basis, i.e. considering EPS in U.S. Dollars before trademark amortization(2), the decrease would have been limited to 9.2%(3),(4). The change was almost entirely due to greater financial charges than in the previous year in connection with the Oakley transaction and to exchange rate fluctuations.
The EPS figure does not include an extraordinary capital loss of Euro 15 million net of taxes (equivalent to approximately Euro 0.03 per share) due to the write-off of debt related to the sale of the Things Remembered retail chain in September 2006.
Strong cash flow generation enabled the Group to reduce its net debt(2). Due to the impact of exchange rate fluctuations, however, the Groups net debt(2) at December 31, 2008 stood at Euro 2,949.5 million (compared with Euro 2,871.8 million at December 31, 2007). Thanks to tight controls on working capital, the net debt/EBITDA ratio(2) was 2.9 (2.8 net of the effect of exchange rate fluctuations, in line with the previous years level).
Luxottica Groups Board of Directors today voted to call the Ordinary Meeting of Shareholders for April 29, 2009 (on first call) and April 30, 2009 (on second call) to approve the Groups financial statements for fiscal year 2008. To further strengthen the Groups equity structure and have sufficient resources to be able to capitalize on new opportunities that arise, the Board deemed it not appropriate to propose to shareholders, for the time being, the payment of a dividend for fiscal year 2008, while deciding to defer the matter to a possible shareholders meeting to be called in the second half of 2009.
Results for fiscal year 2008 will be discussed tomorrow, Friday, March 13, during the course of a presentation to the financial community starting at 9:30 AM GMT in London. The presentation will be available to all via live webcast at www.luxottica.com.
The officer responsible for preparing the companys financial reports, Enrico Cavatorta, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.