Essilor: ST turbulences within a vast source of growth opportunities
BUY, Fair Value EUR96 (+15%)
At the analysts’ meeting yesterday, Essilor mainly attributed the FY13 sales guidance downgrade to the non-renewal of a contract with HAL (BG: ~1pp impact on the H2 LFL growth). On the positive side, management also presented several sales catalysts for H2 13 and 2014: i) launch of CrizalPrevencia and Optifog 2.0, ii) expansion in the mid-tier segment and iii) acceleration in sunlenses. Furthermore, the Transitions deal might be finalised sooner than initially expected (Q1 14 instead of Q2?). We adjust our LFL growth forecast to 2.8% vs. 4.1% but we maintain a 3.2% scope effect, leading to a 6% combined growth for 2013.
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