Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
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MANAGEMENT REPORT<br />
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As a result of our numerous acquisitions and the subsequent expansion of our business<br />
activities in the United States through these acquisitions, our results of operations, which<br />
are reported in Euro, are susceptible to currency rate fluctuations between the Euro and<br />
the USD. The Euro/USD exchange rate has fluctuated from an average exchange rate of<br />
Euro 1.00 = USD 1.2848 in <strong>2012</strong> to Euro 1.00 = USD 1.3920 in 2011. Our results of operations<br />
have also been rendered susceptible to currency fluctuations between the Euro and the<br />
Australian Dollar, due to the significant business volumes in our Australian retail operations.<br />
Additionally, we incur part of our manufacturing costs in Chinese Yuan; therefore, the<br />
fluctuation of the Chinese Yuan relative to other currencies in which we receive revenues could<br />
impact the demand of our products or the profitability in consolidation. Although we engage<br />
in certain foreign currency hedging activities to mitigate the impact of these fluctuations, they<br />
have impacted our reported revenues and expenses during the periods discussed herein.<br />
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, <strong>2012</strong> AND 2011 -<br />
In accordance with IFRS<br />
Years ended December 31,<br />
(thousands of Euro) <strong>2012</strong> % of net sales 2011 % of net sales<br />
Net sales 7,086,142 100.0% 6,222,483 100.0%<br />
Cost of sales 2,379,093 33.6% 2,168,065 34.8%<br />
Gross profit 4,707,049 66.4% 4,054,419 65.2%<br />
Selling 2,271,383 32.1% 1,994,979 32.1%<br />
Royalties 124,403 1.8% 106,322 1.7%<br />
Advertising 446,175 6.3% 408,483 6.6%<br />
General and administrative 883,038 12.5% 737,495 11.9%<br />
Total operating expenses 3,725,000 52.6% 3,247,278 52.2%<br />
Income from operations 982,049 13.9% 807,140 13.0%<br />
Other income/(expense)<br />
Interest income 18,910 0.3% 12,472 0.2%<br />
Interest expense (138,140) (1.9%) (121,067) (1.9%)<br />
Other - net (6,463) (0.1%) (3,273) (0.1%)<br />
Income before provision<br />
for income taxes 856,357 12.1% 695,272 11.2%<br />
Provision for income taxes (310,476) (4.4%) (236,972) (3.8%)<br />
Net income 545,881 7.7% 458,300 7.4%<br />
Attributable to:<br />
- <strong>Luxottica</strong> Group stockholders 541,700 7.6% 452,343 7.3%<br />
- non-controlling interests 4,181 0.1% 5,957 0.1%<br />
NET INCOME 545,881 7.7% 458,300 7.4%<br />
During <strong>2012</strong>, the Group recorded the following items characterized as non-recurring in