Eyewear company EssilorLuxottica maintains outlook as first quarter sales jump
PARIS (Reuters) – EssilorLuxottica kept its full-year outlook unchanged on Tuesday after posting upbeat first-quarter sales, although some concerns remain among investors over the future of governance at the world’s largest eyewear manufacturer.
The company’s sales rose 3.7 percent at constant exchange rates to 4.2 billion euros (3.6 billion pounds).
EssilorLuxottica was formed last October after the merger of French lenses specialist Essilor and Italian spectacles maker Luxottica, creating the world’s largest eyewear maker in a 54 billion euro deal.
The company maintained its financial objectives for 2019, including targets of sales growth between 3.5 percent and 5 percent, and for a higher operating profit.
Planned synergies, at the very core of the merger project and estimated to reach up to 600 million euros annually in the next three to five years, were also confirmed.
Presented two years ago as a logic fit and merger of equals, the EssilorLuxottica deal derailed shortly in a management crisis at the very top of the new holding company, with both sides accusing each other of trying to secure leadership.
In March, the holding of Luxottica’s founder Leonardo Del Vecchio, EssilorLuxottica’s largest shareholder, said it had filed an arbitration request with the Paris-based International Chamber of Commerce, a process that usually takes two years.
The two groups are currently supposed to hold equal weight in the merged company’s board of directors under an agreement that expires in 2021.
EssilorLuxottica plans to hold a shareholder meeting next week during which several minority investors and Valoptec International, an entity which represents current and past employees, are pushing to see independent directors appointed in the hope of easing the deadlock.
EssilorLuxottica’s board has advised shareholders to reject the proposals.
(Reporting by Matthias Blamont and Sudip Kar-Gupta in Paris, Claudia Cristoferi in Milan; Editing by Sherry Jacob-Phillips)