Translated by
Nicola Mira
Oct 19, 2016
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French eyewear brand Alain Afflelou looks at another IPO to drive growth abroad

Translated by
Nicola Mira
Oct 19, 2016

The Alain Afflelou optics group is once again planning to be listed on the Paris Stock Exchange, after a first foray there between 2002 and 2008. The objective is to speed up its development in France and abroad and reduce company debt.

At a press conference last Tuesday in Paris, Alain Afflelou's Deputy Managing Director Didier Pascual stated that the group is initially planning to issue new shares worth "about €200 million".

The group's current leading shareholders, British investment fund Lion Capital, Canadian institutional investor Caisse de dépôt et placement du Québec and private equity company Apax, are subsequently to sell part of their shares on the aftermarket, for an amount "that has not yet been specified," added Didier Pascual, according to whom the floating capital ought to eventually add up to between "40% and 50%" of equity.

The operation may be France's most significant stock market flotation this year, after that of furniture and home decoration distributor Maison du Monde in the spring, which raised €380 million.

The Afflelou group is willing to move fast, but the operation may be postponed to early 2017 if market conditions turn out to be unfavourable, especially in the light of the US presidential elections next November.

"If a window of opportunity will open between now and the end of the year, we will go for it, otherwise it will be for early next year," added Frédéric Poux, the group's CEO.

A first stage was completed on Monday evening, with the submission of the IPO's prospectus to the financial market regulatory authority (the AMF), which will then have to certify it.

"Becoming a global brand"

The group was founded in 1972 in Bordeaux by optician Alain Afflelou, and it expanded thanks to its founder's marketing and communications acumen and its effective franchising model .

The group currently operates 1,400 stores, 87% of them belonging to franchisees, in 13 countries. Most of them (900 stores) are located in France, where Afflelou claims a 10% share of the optics market, and in Spain (369 stores). Though the Alain Afflelou brand is chiefly known in these two countries, "our objective is to become a global brand," stated Frédéric Poux.

He also underlined how the group has recently opened a first shop in Chile, and is planning to open its first Chinese store "within the next few weeks."

He also intends to increase the territorial coverage in France and Spain, and become "country leader" in other markets such as Belgium, Switzerland and Portugal, by acquiring independent opticians and other franchising networks. According to Frédéric Poux, stores outside France are expected to make up 50% of the network by 2021, compared to 35% now.

In the non-calendar 2015-16 fiscal year, closed on 31st July, the group recorded a revenue of €693 million, equivalent to a 7.6% rise over the previous year (+3.4% in like-for-like terms), and generated an adjusted EBIT of €66 million (+20.1%). Excluding sales from franchised stores, the group's annual revenue reached €346 million (+11.1% year-on-year).

For the current non-calendar fiscal year, Alain Afflelou is targeting global sales between €745 and €760 million, and a further growth between 7% and 9% for the 2017-18 fiscal year. At the end of July 2017, adjusted EBIT ought to be close to €70 million, and it is expected to rise by another 8-10% in 2017-18.

Apart from the optician business, where the group is present both in the premium and the discount segments, in the latter with Optical Discount (in France) and Optimil (in Spain), Alain Afflelou has lately accelerated the development of its hearing aid business. Recently it has also strengthened its online offering by acquiring two optical products websites from the M6 group.

According to Frédéric Poux, Alain Afflelou's stock is currently split up between Lion Capital (35%), the Caisse de dépôt et placement du Québec (30%), Apax (13%), the founder Alain Afflelou and his family (13%) and the group's management (8%).

The group made a first attempt to return to the stock market in 2012, before moving into Lion Capital's orbit.

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