The Essilor Group

Thinking about investing in Essilor? Take a look at our article to find out all you need to know about this major French company

The Essilor group was founded in 1972, but its history actually began more than a century earlier. This ambitious company is driven by just one aim: to help people to see better. It has created its own values based on human capital and technological advances that over time have become a true company culture. 

Today, Essilor has become a giant in its field, an undisputed leader in the design, manufacture and distribution of corrective optical lenses worldwide. But is that reason enough to invest in Essilor stock? Let’s find out more about the company. 

Introduction to the stock

Essilor Group Profile 

Several names have marked the history of Essilor. Today, the company is called EssilorLuxottica. Here are the main dates linked to the changes in the company's name since its existence:

  • 1849 : Creation of the company SL or Société des Lunetiers. The term SL evolved into Essel. The activities of Essel were manufacturing of corrective lenses, topographic materials, various tools and instruments for opticians.
  • 1931 : Creation of the Silor company, originally named Lissac. Silor began by distributing ophthalmic lenses and frames and later by manufacturing corrective lenses.
  • 1972 : Merger of SL and Silor companies to create the Essilor International group.
  • 2018 : EssilorLuxottica is created following the merger between Essilor International and the Italian company Luxottica. The merger led to great ambitions: to generate sales of sixteen billion euros per year and reach a market capitalization of more than fifty billion euros.

Essilor in figures :

Essilor's activities are currently focused on three main areas. The manufacture and sale of lenses and optical equipment, which account for more than 86% of EssilorLuxottica's annual revenue. The manufacture and sale of sunglasses and premounted eyeglasses, for 11.2% of annual revenues. The manufacture and sale of instruments and equipment for optical professionals make up 2.8% of sales.

EssilorLuxottica subsidiaries are present in many countries around the world. Here are a few key figures for 2019:

  • Revenues : 17.39 billion euros
  • Average annual earnings : 1.9 billion euros
  • Average number of employees : over 67,000
  • Plants : more than thirty
  • Investment budget for research and development : 200 million euros/year.
  • Number of employee shareholders : 48,000
  • Number of patents : nearly 10,000
  • Number of laboratories : 449

Investing in Essilor stock: what do the figures say ?

A temporary crisis in 2020

The year 2020 was a difficult one for Essilor. The group's activities were heavily impacted by Covid-19 and the ensuing health measures. Against all expectations, net profit fell by around 92% to just EUR 85 million, including the acquisition cost of the Essilor/Luxottica merger. 

Revenues for 2020 amount to 14.3 billion euros, a lower achievement than that forecast by analysts consulted by Factset and Bloomberg (source: Journal de l'économie - Figaro). Nevertheless, the group's managers remain confident about 2021 and are aiming for a return to the pre-2020 level.

A landmark year in 2019

For the group, 2019 was a landmark year, as the balance sheet shows a justified positive result. This year is the most significant period after the merger of Essilor International and Luxottica in 2018. According to the report of the Board of Directors, the group delivered a solid performance:

  • Revenue growth: 7.4%, the highest since the merger - 2019 revenue: 17.39 billion euros
  • Cash flow generated: EUR 1.8 billion
  • Net income (group share): €1.9 billion, an increase of 4.8% compared to 2018
  • Operating profit adjusted for the cost of the merger: 2.8 billion euros or 16% of revenues

Essilor stock market data

The share price on the benchmark CAC 40 index was 135.9 euros on March 26, 2021, showing a slight increase of +0.15%. Over the 5 days preceding March 26, the share price rose from 129.6 euros on March 22 to 136.9 euros on March 26. Analysts' consensus is as follows:

  • Price target of 141.29 euros
  • 4% potential 
  • Tips: Maintain and strengthen

According to trends and observations, 2020 is soon to be a bad memory for EssilorLuxottica. The group is expected to overcome the situation and recover the performance of 2019 for a new start.

According to experts, there is a good chance that the company will experience a revival in the coming years. This information may be useful for you when deciding to invest in the group.