CHARENTON-LE-PONT, France, September 7 /PRNewswire-FirstCall/ -- - First-Half 2006: Strong Revenue Growth - Record Profitability The Board of Directors of Essilor International, the world leader in ophthalmic optics, today approved the financial statements for the six months ended June 30, 2006. EUR millions June 30, 2006 June 30, 2005 Change Revenue 1,362.4 1,182.9 15.2% Contribution from 242.8 210.2 15.5% Operations(1) 17.8% 17.8% % of revenue Operating profit 229.3 196.4 16.7% Net profit 164.1 145.7 12.6% % of revenue 12.0% 12.3% Basic earnings per share 1.61 1.43 12.5% (in EUR) 1 Operating profit before compensation costs on share-based payments, restructuring costs, other income and expenses from operations, and impairment losses. Revenue up 15.2% to EUR1,362.4 million Essilor's consolidated revenue for the period rose by 12.4%, excluding the currency effect, and by 8.7%, like-for-like. Changes in the scope of consolidation boosted revenue by 3.7%, reflecting the contributions of the businesses acquired in 2005 and in the first half of 2006. The currency effect was a positive 2.7%. Organic growth was led by various factors: - Strong sales in North America, Europe and Asia throughout the period. - Sustained demand for value-added lenses and new products such as Varilux Physio(R), the new mass-market progressive lens successfully introduced worldwide during the first six months of the year. - Excellent results in the Instruments division. Revenue by geographical segment EUR millions June 30, 2006 June 30, 2005 Reported Like-for-like change change* Europe 606.4 563.2 7.7% 6.2% North America 596.0 490.4 21.5% 10.9% Asia-Pacific 116.8 95.1 22.8% 13.4% Latin America 43.2 34.2 26.4% 5.8% *Based on a comparable scope of consolidation and at constant exchange rates. Nineteen acquisitions since January 1, 2006 In the first half of the year, Essilor actively pursued its external growth strategy. Since January 1, the Company has completed the purchase of nineteen companies (or their assets) in North America, the Asia-Pacific region, India and Europe. These acquisitions represent approximately EUR63 million in additional revenue for a total investment of EUR44 million. Most of them are prescription lens laboratories, which have broadened Essilor's network and enhanced the services provided to eye care professionals. Four of the acquisitions were completed in the summer months: - In the United States, Essilor acquired the assets of Vision Star LLC, a USD 2 million company which develops and sells laboratory management software, Prio Corporation, a distributor of corrective lenses to treat computer vision syndrome, and Sunstar, a prescription lens laboratory with operations in Nevada and Utah representing annual revenues of USD 7.7 million. - In Australia, Essilor acquired Tec Optik Pty Ltd, a prescription lens laboratory in Sydney with annual revenues of AUD 6.7 million. Record contribution from operations for the second consecutive year Contribution from operations up 15.5% to EUR242.8 million As a percentage of revenue, contribution from operations stood at 17.8%, on a par with the year-earlier period, and above the full-year contribution of 17.3% in 2005. This solid performance stemmed from an increase in gross margin from 57.4% of revenue to 58.2%, or EUR792.5 million, in first-half 2006. The improvement reflects a favorable change in product mix combined with high volumes and productivity gains in the plants and prescription lens laboratories. Contribution from operations achieved record levels following Essilor's major investment in engineering and marketing for new products such as Varilux Physio(R), which was launched in the first half of 2006. These investments led to a sharp rise in operating expenses, from 39.6% of revenue in first-half 2005 to 40.3%, or EUR549.7 million. Operating profit up 16.7% to EUR229.3 million "Other income and expenses from operations" and "Gains and losses on asset disposals" together represented expense of EUR13.6 million, an improvement of 1.4% compared with the year-earlier period. The total included EUR8.1 million in compensation costs on employee shareholding and stock option plans. Finance costs of EUR13.5 million Finance costs, net amounted to EUR13.5 million. The increase compared with EUR4.3 million in first-half 2005 was due to: - Higher interest rates and a modest increase in net debt, - Recognition of exchange and hedging costs under IFRS, - The cost of buying back 780,000 OCEANE bonds in the first quarter of 2006. Net profit came to EUR164.1 million, an increase of 12.6% Net profit included the contribution of associates which increased by 38.9% to EUR16.1 million, led by the very strong performance of Transitions (variable-tint lenses). Earnings per share were up 12.5% at EUR1.61. Outlook Based on its excellent first-half results, Essilor can look forward to the rest of 2006 with confidence. The results will be presented to analysts today at 10am. A webcast will be available on the Internet, both live and after the meeting, at: http://hosting.3sens.com/Essilor/20060907-E3D6341A/en Next financial announcement Third-quarter 2006 revenue: October 19, 2006 Essilor International is the world leader in ophthalmic optical products, offering a wide range of lenses under the flagship Varilux(R), Crizal(R), Airwear(R) and Essilor(R) brands to correct myopia, hyperopia, presbyopia and astigmatism. Essilor operates worldwide through 16 production sites, 215 lens finishing laboratories and local distribution networks. The Essilor share trades on the Euronext Paris market and is included in the CAC 40 index. Codes and symbols: ISIN: FR 0000121667; Reuters: ESSI.PA; Bloomberg: EF FP. Investor Relations and Financial Communications Veronique Gillet Phone: +33-(0)1-49-77-42-16 DATASOURCE: Essilor CONTACT: Investor Relations and Financial Communications, Veronique Gillet, Phone: +33-(0)1-49-77-42-16

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