Annual Review 2012 - Luxottica

MANAGEMENT REPORT
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Cash used in accounts receivable was Euro 34.6 million in 2012, compared to Euro 16.4
million in the same period of 2011. This change was primarily due to an increase in sales
volume in 2012 as compared to the same period of 2011, partially offset by an improvement
in days sales outstanding ratio in 2012 as compared to 2011. Cash used in inventory was
Euro 80.5 million in 2012 as compared to Euro 30.5 million in the same period of 2011. The
change in inventory in 2012 is due to a strategic increase in wholesale division inventories
in relation to an implementation of SAP in our Italian manufacturing facilities at the
beginning of 2013. Cash generated by accounts payable was Euro 61.5 million in 2012
compared to Euro 51.1 million in the same period of 2011. This change is mainly due to
more favorable payment terms agreed during 2011. Cash generated/(used) in other assets
and liabilities was Euro 39.4 million and Euro (14,0) million in 2012 and 2011 respectively.
This change is mainly due to the increase in personnel liabilities in the North America retail
division (Euro 18.4 million) for the timing of salary payment to store personnel. Income
taxes paid were Euro 265.7 million in 2012 as compared to Euro 228.2 million in the same
period of 2011. This change was mainly due to the timing of tax payments made by the
Group in the different jurisdictions. Interest paid was Euro 120.8 million and Euro 122.5
million in 2012 and 2011, respectively.
Investing activities. Our cash used in investing activities was Euro 478.3 million for 2012
as compared to Euro 459.9 million for the same period in 2011. The cash used in investing
activities in 2012 primarily consisted of (i) Euro 261.6 million in capital expenditures, (ii)
Euro 117.0 million for the acquisition of intangible assets related to the creation of a new
IT structure, (iii) Euro 66.4 million for the acquisition of Tecnol, (iv) Euro 21.9 million for the
acquisition of the Sun Planet retail chain, and (v) other acquisitions of Euro 11.4 million.
Cash used in investing activities in 2011 primarily consisted of (i) Euro 228.6 million in
capital expenditures, (ii) Euro 107.6 million for the acquisition of intangible assets related
to the creation of a new IT structure, (iii) the acquisition of 60 percent of MOI of Euro 89.8
million, (iv) the acquisition of two retail chains in Mexico of Euro 19.0 million, and (vi) other
minor acquisitions of Euro 14.8 million.
Financing activities. Our cash used in financing activities for 2012 and 2011 was Euro 668.4
million and Euro 164.4 million, respectively. Cash provided by/(used in) financing activities
for 2012 consisted primarily of (i) Euro 500.0 million of proceeds from the issuance of
long-term borrowings, (ii) Euro (935.2) million used to repay long-term debt expiring during
and (iii) Euro (227.4) million in cash used to pay dividends to the Company’s stockholders.
Cash provided by/(used in) financing activities for 2011 consisted primarily of (i) Euro 250.6
million in long-term borrowings, (ii) Euro (230.4) million in cash used to repay long-term
debt expired and (iii) Euro (202.5) million in cash used to pay dividends.