We are publishing here for the first time our ranking of the main stock-listed eyewear industry companies, based on their stock market capitalization in euros at the end of 2020. The corresponding table also shows the change in market value from the previous year, both in local currency and euros.
|Eyewear global stock market performers|
Dec. 30, 2019 -
Dec. 30, 2020 -
Dec. 30, 2019 -
|New Look Vision||Toronto||CAD||360||11.3||564||507|
|Thai Optical Group||Bangkok||THB||47||-37.9||1,720||2,770|
Public companies in our industry cover a very large spectrum, ranging from EssilorLuxottica, which unsurprisingly tops our chart with a €56.2 billion market capitalization, and Fedon, the Italian eyewear case company, at the lower end with a €9.6 million value. The industry market capitalization is however concentrated on a handful of players as EssilorLuxottica and Hoya alone represent 60 percent of the total and, adding the three North American eye care and contact lens companies, this ratio climbs up to about 90 percent.
The eyewear industry reached an aggregated market capitalization of €164.5 billion at the end of 2020, representing an increase of 6 percent in constant currencies from the previous year. In synchronization with most international markets, eyewear companies’ stocks fell sharply in spring because of the Covid-19 outbreak, before bouncing back in the second half of the year. As a healthcare business, general activity in our sector was less impacted by the pandemic than other consumer goods industries. Most opticians remained at least partly open, even during lockdowns, and more generally, the large increase in time spent at home has not undermined demand for eyeglasses. Actually, as several eyecare professional associations have pointed out already, this change in lifestyle and the extension of the time spent in front of screens will even result in more eyesight correction needs in the longer term.
However, this 6 percent increase in market capitalization lags global stock markets, which grew by 15.9 percent last year, as measured by the MSCI global index that includes more than 1,500 stocks in 23 countries. In spite of the Covid-19 crisis, global financial markets have had a good 2020 overall, boosted by investments in technology companies and in consumer goods companies with a clear direct-to-consumer strategy and an already strong online presence. In this respect, the relatively low level of online sales in our sector – generally estimated at less than 15 percent of total sales before the pandemic – probably contributed to this relative underperformance.
Also in contrast with other consumer goods industries, like the sporting goods sector that we cover in Sporting Goods Intelligence Europe, there was no premium last year for the stock value of the eyewear market leader, as EssilorLuxottica’s capitalization decreased by 5.6 percent in 2020. Financial investors were probably cautious last year about the group’s stocks because of serious governance issues at the company’s helm and the seemingly difficult integration of the Essilor and Luxottica units. The uncertainties and legal disputes around the potential takeover of GrandVision may also have dampened the group’s stock performance. We can also mention that the Paris stock exchange, where EssilorLuxottica is traded, ended 2020 with a 7 percent decrease.
Hoya, the Japanese lens company, certainly benefitted to some extent from the opposite dynamic in Tokyo, where the Nikkei index increased by around 20 percent last year, bouncing back to levels not seen since the early 90s. The company’s market capitalization increased by 35.6 percent last year, consolidating its second place in our ranking and reaching a value of €42 billion, or about 75 percent of EssilorLuxottica’s, a group roughly four times bigger in terms of revenues.
Hoya has been very profitable in the last five years, posting profit before tax margins of between 20 and 25 percent every year, boosted in particular by its very profitable and steadily growing IT business unit. In its last quarterly results, released at the end of October, the company announced that it had managed to improve its operating margin for the fiscal second quarter as compared to the same period in 2019, in spite of lower sales. Another possible positive factor behind the group’s financial performance is its strong position in the Asia-Pacific region, which has been much less impacted by the Covid-19 crisis than Europe and the U.S. so far. About two thirds of Hoya revenues come from Asia-Pacific while the region accounts for less than 20 percent of EssilorLuxottica’s business.
The top 5 in our ranking is completed by Alcon, CooperCompanies and Bausch Health, three North American companies that we cover mostly for their contact lenses’ brands, which represent only a portion of their overall business. However, we decided to keep them in our chart as their general eyecare business units remain a significant part of their annual revenues, contrary to Johnson & Johnson for example. Adding Menicon, the Japanese contact lenses’ specialist whose market capitalization jumped by 46 percent in 2020, the aggregated value for this industry segment grew by 3.1 percent to €52 billion last year.
At €17.1 billion on Dec. 31, 2020, the aggregated stock market capitalization for the six optical retailers in our ranking, GrandVision, Fielmann, National Vision, New Look Vision, Jin’s and Paris Miki, rose by only 1 percent as compared to 2019. However, this positive result was mostly fueled by National Vision’s 42 percent increase in stock value. The American retailer that operates five optical banners managed to limit its decrease in yearly revenues to about 7 percent, and posted a record profit in the third quarter.
On the other hand, GrandVision and Fielmann, two of the three biggest optical retailers in Europe, saw their market capitalization decline in 2020, by 6.9 and 7.8 percent respectively, therefore, largely underperforming the industry. It is possible that investors remained cautious about stocks of retail companies with a large brick-and-mortar base – about 7,200 stores for GrandVision and 900 for Fielmann, of which 600 are in Germany.
The Dutch-based group posted a 17.8 percent decline in revenues for the first nine months of its current financial year, in spite of significant improvements in its e-commerce operations, with 15 of its retail banners in 11 countries selling prescription glasses online. The group’s stock performance was also probably hindered by the uncertain outcome of its possible takeover by EssilorLuxottica, the French group blowing hot and cold in the last months.
As for Fielmann, the German optical retailer seems to have better weathered the Covid-19 crisis as it just announced that its revenues decline for 2020 was limited at 6 percent. However pre-tax profits went down by 32 percent to €170 million. The group has launched at the end of 2019 an ambitious program for the transformation of its business, called Vision 2025, with heavy investments in the digitization and internationalization areas.
Excluding Luxottica, the first frame manufacturer in our ranking is the British-based Inspecs, a newcomer among publicly traded eyewear companies after its initial public offering held in February last year. Inspecs has been busy on many fronts in 2020 as the company extended its Vietnamese factory and successively acquired Norville, another British eyewear company, and Eschenbach, the much bigger and more international eyewear and low-vision equipment maker. Inspecs’ strategy has been favorably received by investors, which resulted in a 69 percent jump in the company’s market value to €348 million last year, in spite of both the pandemic and the Brexit.
In terms of market capitalization, the British company has overtaken Safilo, the Italian eyewear group that is still going through a long and difficult business reorganization following the loss of many luxury brands’ licenses. Safilo’s stock price has ended 2020 below €1, while it was above €5 four years ago, and, as Dec. 31, the company’s value declined by 27 percent compared to a year before. The company’s debt increased significantly last year after it took over two American companies, Privé Revaux and Blenders, an e-commerce specialist. However, Safilo’s year ended on a good note as its CEO announced that the new acquisitions are already offsetting the loss of Dior and Fendi licenses and that e-commerce sales would represent 15 percent of the group’s revenues in 2021. After reaching a bottom price of €0.5 in October, the Safilo share bounced back to €0.8 at the end of December 2020.