PARIS, Mar 17 (Reuters): The revenues of EssilorLuxottica increased by 3.2 per cent last year to €16.16 billion while net profit of the makers of Varilux lenses and Ray-Ban glasses stood at €1.9 billion, down 1.7 per cent on what the company said an "adjusted basis."
Shares in EssilorLuxottica fell earlier this month after the company pushed back the date to reveal its long-awaited post-merger plans amid speculation of an internal power struggle.
The company was formed by a €46 billion (US $52 billion) merger of France's Essilor and Italy's Luxottica two years ago and was reporting combined results for the first time.
It pledged to deliver on cost savings and forecast stronger revenues this year, but its shares fell on concerns over governance and the postponement of a long-awaited investor day to set out its strategy.
The date was pushed back to September 18 after initially being expected this spring. No reason was given.
Nevertheless, EssilorLuxottica predicted sales growth of 3.5-5.0 per cent this year at constant exchange rates and stuck to its aim of achieving annual savings of up to €600 million within five years by improving products, logistics and cutting costs.
EssilorLuxottica said that its management teams were working on strategic and business integration, along with governance issues.
While the merger was praised by many investors as a smart strategic move, given expectations of strong demand in future for their products, some minority shareholders have publicly voiced their concerns over governance issues.
Under the terms of the merger, Leonardo Del Vecchio, founder and executive chairman of Luxottica, and Essilor CEO Hubert Sagnieres are sharing powers for the first three years.
The company has said it would look for a new CEO to be appointed by the end of 2020 but investors are speculating about a power struggle behind the scenes.
According to the company, its revenues were up 3.2 per cent in 2018 at €16.16 billion at constant exchange rates while net profit came in at €1.9 billion, down 1.7 per cent on what it said was an "adjusted basis."
With a currency effect of 4.4 per cent, due to the group's exposure to the US dollar, reported revenue was down 1.2 per cent. Adjusted operating profit margin stood at 15.9 per cent down from 16.5 per cent in 2017.
Analysts were on average expecting net profits of €1.6 billion and revenue of €15 billion according to Refinitiv data.
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