The management of EssilorLuxottica, or Essilux as many call it now for short, shared with financial analysts some aspects of the progress that the group is making in the integration of Essilor with Luxottica at a Capital Market Day in London yesterday.
The first steps being undertaken in this process include, among others, the creation of a single supply chain and a single network of prescription laboratories; a pilot project in Italy to define a single IT platform to be quickly rolled out across the organization; and the rather logical integration of Costa, the American sunglass brand of Essilor, into Luxottica's brand portfolio.
Essilux told investors that it wants to create an “open business model” where eyecare and eyewear products are accessible to everyone everywhere through a coordinated network of stores, prescription labs, logistic hubs, R&D centers and digital properties – all connected in real time and benefiting from advanced data analytics.
By leveraging the R&D and supply chain capabilities of both companies, Essilux aims to accelerate innovation on several fronts, including the combination of frames and lenses, the development of smart eyewear (see the story on Facebook in this issue), “revolutionizing” eye exams, and other categories.
Essilux wants to reshape the “customer journey,” from the eye exam all the way to the convenience of digitally enabled stores, improving awareness and storytelling. It also intends to embed sustainability in its initiatives.
To do this, the group has launched more than 20 priority work streams and 160 business initiatives under the leadership of more than 40 key executives and dedicated teams involving more than 800 employees across the two organizations.
Essilux wants to build a common culture. As part of this effort, it is extending to Luxottica's employees a program under which employees can become shareholders in the group. A campaign to this effect is being launched today.
Naturally, Essilux told investors what they wanted to hear on the financial side. According to its management, the initiatives put in place during the first nine months of this year to create synergies are expected to have a positive impact on the net adjusted operating profit of the group of €300 million to €350 million through 2021 and of €420 million to €600 million by 2022/23.
In the longer term, the group's sales are projected to increase at a mid-single-digit annual rate, excluding acquisitions and foreign currency impacts, with faster growth in certain emerging markets and in direct-to-consumer operations. The adjusted operating profit and the adjusted net profit should grow by up to 1.4 times and 1.5 times sales, respectively.