Essilor: A strategic leap in the photochromic & sunwear segments with low execution risk
BUY, Fair Value EUR96 (+12%)
Yesterday morning, the conference call gave the management an opportunity to insist on the untapped potential offered by both the photochromic market and Transitions Optical (TO). With the full ownership, Essilor will now be able to fully benefit from distribution synergies (leverage the Transitions brand in Essilor’s distribution network) which will enable the group to achieve a contribution margin of 19.5% by 2016 (BG ests: 18.3%). Although many countries are concerned by anti-trust approvals (US, Brazil, Australia, etc.), Essilor does not expect any major issue and expects the closing by Q2 14.
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