ANNUAL REPORT 2004 - Luxottica Group

More documents

Recommendations

Info

Years ended December 31 (1) Inter-segment elimination of net revenues relates to intercompany sales from the manufacturing and wholesale segment to the retail segment. (2) Inter-segment elimination of operating income mainly relates to depreciation and amortization of corporate identifiable assets and profit-in-stock elimination for frames manufactured by the wholesale business and included in the retail segment inventory. (3) Inter-segment depreciation and amortization relates to depreciation and amortization of corporate identifiable assets. (4) Inter-segment identifiable assets includes mainly the net value of goodwill and trade names of acquired retail businesses. Years ended December 31 (5) No single customer represents 5% or more of sales in any year presented. (6) Sales, income from operations and identifiable assets are the result of combination of legal entities located in the same geographic In thousands of Euro 2004 Net sales Income from operations Capital expenditures Depreciation and amortization Identifiable assets 2003 Net sales Income from operations Capital expenditures Depreciation and amortization Identifiable assets 2002 Net sales Income from operations Capital expenditures Depreciation and amortization Identifiable assets Manufacturing and wholesale 1,094,802 233,129 31,367 47,656 1,566,086 996,694 191,116 23,580 45,208 1,528,074 1,128,901 287,627 81,651 46,298 1,431,317 The geographic segments include Italy, the main manufacturing and distribution base, North America (which includes the United States of America, Canada and Caribbean islands), Asia Pacific (which includes Australia, New Zealand, Singapore, Malaysia, Thailand, China, Hong Kong, Japan and Taiwan) and Other, which In thousands of Euro 2004 Net sales (5) Income from operations Identifiable assets 2003 Net sales (5) Income from operations Identifiable assets 2002 Net sales (5) Income from operations Identifiable assets Italy (6) 832,813 189,944 1,086,274 743,327 106,808 1,095,350 792,370 207,250 974,412 North America (6) 2,083,560 257,897 2,736,868 1,949,692 222,733 2,075,904 2,345,834 323,038 2,405,462 Retail 2,346,683 310,340 86,053 79,563 1,211,781 2,028,237 269,851 57,708 68,606 876,661 2,227,702 319,425 91,679 77,217 882,113 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Inter-segment transactions and corporate adjustments (186,185) (50,655) 25,532 1,778,191 (172,737) (29,180) - 21,026 1,507,941 (154,815) (5,544) - 22,465 1,272,902 (1) (2) (3) (4) (1) (2) (3) (4) (1) (2) (3) (4) Consolidated 3,255,300 492,814 117,420 152,751 4,556,058 2,852,194 431,787 81,288 134,840 3,912,676 3,201,788 601,508 173,330 145,980 3,586,332 includes all other geographic locations including Europe (excluding Italy), South America and the Middle East. Sales are attributed to geographic segments based on the legal entity domicile where the sale is originated. Intercompany sales included in inter-segment elimination are accounted for on a cost plus mark-up basis. Asia Pacific (6) 464,905 40,717 549,096 276,626 20,541 572,691 185,956 19,826 153,779 Other (6) 486,630 44,690 239,965 445,459 41,555 217,458 491,045 62,362 221,154 Adjustments and eliminations (612,608) (40,434) (56,145) (562,910) 40,150 (48,727) (613,417) (10,968) (168,475) area. Certain amounts for the years 2002 and 2003 have been reclassified to conform to the 2004 presentation. Consolidated 3,255,300 492,814 4,556,058 2,852,194 431,787 3,912,676 3,201,788 601,508 3,586,332 139
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. FINANCIAL INSTRUMENTS CONCENTRATION OF CREDIT RISK Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers comprising the Company’s customer base. Ongoing credit evaluations of customers’ financial condition are performed. CONCENTRATION OF SALES UNDER LICENSE AGREEMENT In 1999, the Company signed a license agreement for the design, production and distribution of frames under the Chanel trade name. Since 1999, Chanel sales have been increasing, representing approximately 4.4% of total sales in 2004. In February 2004, the Company announced the renewal of this license agreement. This renewed license agreement expires in 2008. CONCENTRATION OF SUPPLIER RISK Oakley Inc. is one of the Company’s largest suppliers of products to its retail division. For the 2002, 2003 and 2004 fiscal years, Oakley accounted for approximately 11.8%, 8.7% and 6.8% of the total merchandise purchases from suppliers, respectively. In December 2004, the Company signed a new one year purchase contract with Oakley. Management believes that the loss of this vendor would not cause a significant impact on the future operations of the Company as it could replace this vendor quickly with other products manufactured by the Company and other third party suppliers. As a result of the OPSM and Cole acquisitions, Essilor S.A. has become one of the Company’s largest suppliers to its retail division. For the 2004 fiscal year, Essilor S.A. accounted for approximately 9.9% of the Company’s total merchandise purchases. The Company has not signed any specific purchase contract with Essilor. Management believes that the loss of this vendor would not cause a significant impact on the future operations of the Company as it could replace this vendor quickly with other third party suppliers. 140 14. COMMITMENTS AND CONTINGENCIES ROYALTY AGREEMENTS The Company is obligated under non-cancellable license agreements with designers, which expire at various dates through 2013. In accordance with the provisions of such agreements, the Company is required to pay royalties and advertising fees based on a percentage of sales (as defined) with, in certain agreements, minimum guaranteed payments in each year of the agreements. In the first half of 2003, the Company terminated its license agreement for the production and distribution of the Giorgio Armani and Emporio Armani eyewear collections and has signed a ten-year worldwide license agreement for the production and distribution of eyewear of Versace, Versus and Versace Sport frames. The agreement is renewable at the Company’s discretion for an additional ten years. In the second part of 2003, a license agreement was signed for the production and distribution of products with the Prada and Miu Miu trade names. The Prada license agreement expiration date is in 2013. In June 2004, the Company signed a new licensing agreement for the design, production and worldwide distribution of Donna Karan and DKNY prescription frames and sunglasses. The initial term of the agreement is five years, which began on January 1, 2005 and is renewable for an additional five years. In October 2004, the Company signed a new licensing agreement for the design, production and worldwide distribution of Dolce & Gabbana and D&G Dolce & Gabbana prescription frames and sunglasses. The initial term of the agreement is five years, which will begin on January 1, 2006, with an automatically renewable extension for an additional five years upon meeting certain targets. On December 27, 2004 the Company and the current licensee agreed to advance the initial term of the license to October 1, 2005. Minimum payments required in each of the years subsequent to December 31, 2004 are detailed as follows:
Page 1 and 2:
ANNUAL REPORT 2004
Page 3 and 4:
ANNUAL REPORT 2004
Page 5 and 6:
ANNUAL REPORT 2004
Page 7 and 8:
ANNUAL REPORT 2004 PROFILE OF LUXOT
Page 9 and 10:
PROFILE OF LUXOTTICA GROUP QUARTERL
Page 11 and 12:
ANNUAL REPORT 2004
Page 13 and 14:
ANNUAL REPORT 2004
Page 15 and 16:
LUXOTTICA GROUP IN 2004 to have dir
Page 17 and 18:
LUXOTTICA GROUP IN 2004 Luxottica G
Page 19 and 20:
ANNUAL REPORT 2004
Page 21 and 22:
DISTRIBUTION As for the performance
Page 23 and 24:
DISTRIBUTION focused on the relatio
Page 25 and 26:
DISTRIBUTION capacity, a direct pre
Page 27 and 28:
ANNUAL REPORT 2004
Page 29 and 30:
CHANGE YOUR VIEW
Page 31 and 32:
www.vogue-eyewear.com
Page 34 and 35:
Making its debut in 1926, Persol wa
Page 36 and 37:
Launched in California in 1992, Arn
Page 38 and 39:
The Sferoflex brand was acquired by
Page 40 and 41:
DISTRIBUTION LICENSE BRANDS 39
Page 42 and 43:
The Byblos brand has been licensed
Page 44 and 45:
The Miu Miu brand was created in 19
Page 46 and 47:
Sergio Tacchini, ever synonymous wi
Page 48 and 49:
ANNUAL REPORT 2004
Page 50 and 51:
DISTRIBUTION Today, Luxottica Group
Page 52 and 53:
VERTICAL INTEGRATION Over the decad
Page 54 and 55:
Over the years, Luxottica Group has
Page 56 and 57:
WHOLESALE BRAND PORTFOLIO Luxottica
Page 58 and 59:
Give the Gift of Sight is a Luxotti
Page 60 and 61:
ANNUAL REPORT 2004
Page 62 and 63:
In accordance with U.S.GAAP (1) 200
Page 64 and 65:
MANAGEMENT’S DISCUSSION AND ANALY
Page 66 and 67:
expenses, thanks to economies of sc
Page 68 and 69:
This information is being provided
Page 70 and 71:
The swap will expire on June 17, 20
Page 72 and 73:
ANNUAL REPORT 2004
Page 74 and 75:
(1) Except for earnings per share (
Page 76 and 77:
(1) 1 ADS = 1 ordinary share. (2) C
Page 78 and 79:
with the procedure set forth by it,
Page 80 and 81:
CORPORATE GOVERNANCE Set out below
Page 82 and 83:
- Sergio Erede - Sabina Grossi: Mem
Page 84 and 85:
INTERNAL AUDIT COMMITTEE The commit
Page 86 and 87:
3. the Chief Financial Officer, the
Page 88 and 89:
STOCK OPTIONS PLANS At the Extraord
Page 90 and 91: ANNUAL REPORT 2004 LUXOTTICA GROUP
Page 92 and 93: (1) Through 1998 the Euro/U.S. Doll
Page 94 and 95: LUXOTTICA GROUP S.P.A. We have audi
Page 96 and 97: In accordance with U.S. GAAP (1) Tr
Page 98 and 99: In accordance with U.S. GAAP In tho
Page 100 and 101: In accordance with U.S. GAAP (1) Tr
Page 102 and 103: NOTES TO CONSOLIDATED FINANCIAL STA
Page 104 and 105: Maintenance and repair expenses are
Page 106 and 107: customers take receipt of products
Page 108 and 109: In thousands Weighted average share
Page 110 and 111: The Company recognizes forfeitures
Page 112 and 113: 2. RELATED PARTY TRANSACTIONS FIXED
Page 114 and 115: In thousands of Euro Assets purchas
Page 116 and 117: This pro forma financial informatio
Page 118 and 119: The Company believes that the preli
Page 120 and 121: (1) Goodwill acquired in 2003 and 2
Page 122 and 123: Estimated annual amortization expen
Page 124 and 125: Since fiscal year 2004, for income
Page 126 and 127: 8. LONG-TERM DEBT Long-term debt co
Page 128 and 129: Excluding current maturities, long-
Page 130 and 131: OBLIGATIONS AND FUNDED STATUS In th
Page 132 and 133: The accumulated benefit obligations
Page 134 and 135: CONTRIBUTIONS U.S. Holdings expects
Page 136 and 137: The following table sets forth the
Page 138 and 139: STOCK INCENTIVE PLANS Luxottica Gro
Page 142 and 143: In thousands of Euro Years ending D
Page 144 and 145: such higher consideration to all te
Page 146 and 147: eviewed at the end of January 2004,
Page 148 and 149: ANNUAL REPORT 2004 KEY CONTACTS AND
Page 150 and 151: EUROPE LUXOTTICA S.r.l. KILLERLOOP
Page 152 and 153: MIDDLE EAST AND FAR EAST LUXOTTICA
show all

ANNUAL REPORT 2004 - Luxottica Group

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?