Rodenstock is doing much better than five years ago, when its controlling shareholder, Bridgepoint Capital, installed a new chief executive, Oliver Kastalio, who has made many interesting initiatives. Sales and profits have increased every year since the appointment of this former manager of Procter & Gamble.

The German company started to generate cash in 2013. Last year, it improved its operating earnings by 9 percent, reaching an operating margin before amortization (Ebitda) of 20 percent, while sales increased by about 2 percent to €408 million. Cash flow reached 70 percent of Ebitda and was partly used to take over the distribution in Spain and Russia.

The growth rate would have been higher without the appreciation of the euro against the Russian ruble and some currencies in Latin America. It would also have been higher without the final stages of an optimization of the company's portfolio of eyewear brands. Rodenstock discontinued the licenses for Dunhill and Baldessarini last year and took on instead two others, Bogner and Jil Sander, that have helped to re-balance the whole product range, making it more “relevant” and appealing to female customers, said Kastalio in an interview.

Prescription frames and sunglasses continue to represent only about 20 percent of the total turnover. Globally, the company's sales of these products were more or less stable last year, but the Rodenstock line and Porsche Design enjoyed some growth, and Kastalio expressed confidence that the whole segment will go up this year.

Sales of ophthalmic lenses rose by about 4 percent in 2014 on the strength of new products such as its Multigressive line and stronger support of independent opticians in Germany. With its sales of lenses rising by 6 percent in its domestic market, which increased by only about one percent, Rodenstock claims to have reached a market share of 24 percent, close to that of Hoya, which benefited from its new agreement with Hal and its German subsidiary, Apollo-Optik.

Rodenstock produced lenses at full capacity throughout last year. It further increased production capacity at its facilities in Thailand, which withstood the floods of autumn 2013 because they were above the water level. They switched temporarily from three labor shifts to two extended ones to cope with the related transportation problems for the workers. At the end of 2014 Rodenstock employed 4,509 people, an increase of 112 from the previous year.

Meanwhile, Rodenstock pursued its international expansion last year. It set up its own subsidiary in Spain and took over the distribution of its products in Russia from Avvita in the autumn. As it had previously done in Brazil, it retained its former distributor in the management in Russia, with an earn-out clause in case of good performance. The former Russian distributor has also a small optical retail chain.

Rodenstock grew by 20 percent in China, where the market seems to have risen last year at a more “normal” rate of 7 to 8 percent. The company has a close collaboration with Novavision, the largest optical retail chain in the country. Its Chinese sales are expected to double in the next four years.

The company is now looking at various options for a better penetration of the American and Japanese markets. As reported in our last issue, for a start, Rodenstock has struck an agreement with a U.S. lens laboratory. In Japan, Rodenstock is only selling prescription frames and sunglasses for the time being.

The improving financial situation allowed the company to refinance its debt at more favorable conditions last spring, working with fewer lenders. As a next step, it could be logical for Bridgepoint to cash out of Rodenstock at this stage, with a nice capital gain. The investment fund bought Rodenstock from Permira in 2007.

Kastalio declined to comment on this or on the future scenario. Going public could be one of the alternatives for Rodenstock. The others could be the sale to another investment group or a strategic investor. Essilor may be tempted to acquire Rodenstock for obvious reasons, but would probably run into anti-trust problems.