Essilor's net income, which had surged by 27 percent in 1998, rose by only 0.7 percent last year to 118.3 million euros. The operating margin declined from 14.3 to 13.7 percent, partly because of an increase of about 90 million French francs (e14m) in data processing costs, partly connected to the Millennium Bug, allowing the operating income to increase by only 1.6 percent to e227.6 million.
Group turnover increased by 6.5 percent to e1,664.6 million, including a 4.2 percent increase in constant currencies and on a comparable basis, before new acquisitions. Still on a comparable basis, the growth improved in the course of the year, moving up from 2.2 percent in the 1st half to 6.2 percent in the 2nd half. All the regions of the world contributed.
The external growth of the world's largest supplier of ophthalmic lenses continued recently with the acquisition of existing operations in Mexico and New Zealand. In 1999, Essilor acquired two more prescription labs in the USA, Crown Optical and Optogenics, and it formed a joint venture with Nikon in Japan. The Nikon-Essilor joint firm began to operate on Jan. 1 by setting up new organizational structures in Japan, reorganizing the production apparatus and preparing the launch of high-index progressive polycarbonate lenses in Japan.
Furthermore, Essilor has set up a new US subsidiary near Dallas, named Avisia, which has started test-marketing a new Nikon Eyes brand of plastic and polycarbonate lenses due to be introduced all over the USA shortly. It's been hard to determine whether Essilor will launch the strong Nikon brand in a similar way also in Europe, which is probably made difficult by the fact that Nikon still has a contract for ophthalmic lenses with a strong French distributor. In the USA, sales of Essilor's Crizal lenses grew sharply in 1999.
Meanwhile, Christian Dalloz, the leading French supplier of safety eyewear and other personal protection items partly owned by Essilor, reports a 2.9 percent increase on a comparable basis in its 1999 turnover, which reached e182.5 million. The 1st quarter was tough, but it was followed by improvements in the subsequent quarters.