PARIS — Citing the decline to business due to the coronavirus, EssilorLuxottica is canceling plans for a dividend but will revisit the matter in the second half of the year.
The measure is part of a broader effort by the eyewear giant that owns Sunglass Hut and LensCrafter to reduce operating and cash expenses, which also includes cutting fees for members of the board of directors in half.
The company plans to reassess the situation in the second half of the year and could consider a special dividend payment before the end of the year if there is a solid-enough recovery.
Noting that 70 percent of group revenue comes from prescription and optical activities, EssilorLuxottica said that previous economic downturns showed that prescription purchases were delayed, not canceled, and noted it is equipped to meet pent-up demand when the economy stabilizes.
The group suggested it will keep an eye out for potential acquisitions in the future, saying it is managing the decline in activity and seeking to protect its balance sheet while preparing to seize new opportunities in the eyecare and eyewear industry from the second half onward.
EssilorLuxottica is also launching a 100 million euro fund to support employees and their families in need.
The COVID-19 crisis has prompted management changes at the upper ranks of the eyewear company, which has reduced the number of executives on its management board by a third, in a bid to simplify decision-making.
The group postponed its annual general meeting to June 25 from a previously scheduled date of May 15.