LensCrafters 2004 Annual Report Download - page 14

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ANNUAL REPORT 2004
LUXOTTICA GROUP IN 2004
2004 was an extremely positive year for both the retail
and wholesale divisions. The performance of retail
chains LensCrafters, Sunglass Hut and those of
OPSM Group, especially in terms of profitability, was
above that of the rest of their respective markets.
Similarly, our wholesale division further strengthened its
competitive position in key eyewear markets
worldwide, confirming the strength of a portfolio that
includes some of the most prestigious house and
license brands, including the most recognized sun
and prescription brand in the world, Ray-Ban.
During the year, the Group proved that it had
completely overcome the difficult macro-economic
conditions that had affected its results in 2003, thanks
to its strength in distribution, an increasingly more
balanced brand portfolio and flexible manufacturing
structure.
Consolidated sales for 2004 reached Euro 3.2 billion,
up 14.1% year-over-year. This was the result of a
10.5% increase in wholesale sales to third parties as
well as a 15.7% improvement in retail sales. It is
important to note that, assuming unchanged
exchange rates, these figures would have been even
higher.
Operating income for 2004 improved both as a whole
and for each of the two divisions. The year ended with
consolidated net income of Euro 286.9 million, up
7.3% from 2003.
Significant cash flow generation was, once again, one
of the strong features of the Group’s results for the
year. In fact, consolidated net debt as of December
31, 2004 was Euro 1,716 million, up only Euro 245.7
million for the year, notwithstanding investments of
approximately Euro 600 million for the acquisition of
Cole National and the payment to shareholders of
Euro 95.5 million in dividends.
RETAIL
The retail division enjoyed an important and extremely
positive year.
Retail sales rose 15.7% from year-over-year, thanks to
the outstanding performance of LensCrafters,
Sunglass Hut and OPSM Group as well as the final
three months of results of Cole National, since the
closing of the acquisition in October 2004.
In 2004 Luxottica Group made great advances in the
strategy already in place with the acquisitions of
LensCrafters, Sunglass Hut and OPSM Group. The
benefits garnered over the years from these
acquisitions have been significant, allowing the Group
13