Luxottica is aiming to reach €15 billion in revenues by 2024, up from the adjusted turnover of €9,011 million recorded last year. The target does not take into account possible acquisitions. The group did not detail its growth path to 2024 but did release some guidance for sales and profits in the next three years.
Luxottica wants to grow faster than the market. Citing Euromonitor data, it noted that the global eyewear market is predicted to rise at an annual average of 3.3 percent between 2015 and 2020 to approach 1.2 billion units. Prescription frames will represent 40 percent of sales volumes in 2020, against 39 percent in 2015, and sunglasses 60 percent, down from 61 percent, it said.
For 2016, the company anticipates that its revenues will grow by 5 to 6 percent at constant currency rates, in line with the 5.5 percent adjusted sales rise recorded in 2015. In 2017 and 2018, the top line is due to increase by a medium to high single-digit rate. Over the three-year period, the internet is scheduled to grow to represent 7 percent of sales compared with slightly more than 4 percent in 2015.
Operating and net income are budgeted to rise least 1.5 times faster than sales, allowing the group to reach a net profit margin of more than 10 percent by 2017 against a reported margin of 9.1 percent and an adjusted margin of 9.5 percent in 2015.
Ray-Ban and Oakley are expected to grow by 8 to 10 percent and by 3 to 5 percent at constant exchange rates, respectively, as outlined in a separate article in this issue. At retail, LensCrafters and Sunglass Hut are seen rising by 4 to 5 percent and by 8 to 10 percent, respectively.
Geographically, North America, which remains the group's largest market, is expected to grow by 5-6 percent, with wholesale up by 7-8 percent and retail up by 4-5 percent. Europe is predicted to increase by 4-5 percent, Asia-Pacific by 8-10 percent and Latin America by 9-11 percent.
The group will be boosting capital expenditures to more than 6 percent of sales in 2016, compared with 5.7 percent of adjusted sales last year, to finance more than 500 new store openings and remodellings, and to foster innovation, improve capacity and the supply chain. It will double investments in digital technologies. Luxottica said that it will continue to invest “significantly” to expand its business in the subsequent two years. According to an investment broker, Websim, the group may be able to grow by more than 10 percent a year after 2018 on the back of a planned investment of more than €1.5 billion over the next three years.