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Clarity of vision a winner

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Clarity of vision a winner.

Are you are reading this on a digital screen — your mobile, tablet or PC?

Studies show that people are spending more and more time staring at digital devices. In the US, the average person now spends over 10 hours a day staring at a screen. With that in mind, it may not surprise you that an increasing number of people are experiencing deteriorating vision.

But fear not — French company Essilor "Your vision is our mission" — which we have recently invested in, has a solution to this. Essilor produces lenses that block the damaging blue light from digital screens and subsequently reduces eye strain. While it may not sound revolutionary on its own, Essilor has a history of innovation in optical lenses and developments such as polarisation, transition lenses, progressive lenses and anti-reflectives.

Over time there has been a trend towards premiumisation of lenses as the benefits of the features above are better understood. As a result, Essilor has steadily increased the prices of its lenses and grown its profitability. They control 40% of the lens industry; and through innovation and market consolidation their operating earnings have grown at 11% pa over the past 10 years.

In January, Essilor announced a merger with Luxottica, which in our opinion demonstrates sound strategic thinking. Luxottica is the Italian eyewear frames manufacturer that owns Ray-Ban and Oakley. They also manufacture frames for luxury houses like Prada, Armani and Chanel and they're the world's largest eyewear retailer through their OPSM, Sunglass Hut and LensCrafters chains. Despite the obvious complementary nature of the products, lenses and frames have generally been manufactured by different companies, until now.

There is no doubt the merger creates an industry heavyweight and a leading platform in an attractive market. With it estimated that over half of people requiring vision correction still go untreated, combined with the trend towards premiumisation in lenses and sunglasses, we see a long growth runway. The merger highlights a clear long term vision for EssilorLuxottica.

Click here to take Essilor's quick online eye test.