Luxottica Group CEO Discusses Q3 2010 Results ¿¿ Earnings Call Transcript

On the other side, emerging markets, we were much faster. And I think this was again in another quarter of quick growth in emerging markets above the 20% rate, I would say in all major emerging markets.

Third fact is that our profitability has grown much faster than the sales growth, above 30%. And I would say that even if we have grown 30%, obviously, probably we would have grown a little bit faster if we were not comparing ourselves with the third quarter last year in which we had reversed some accruals, and Enrico will tell you more in details about this, and the second being a continuous not positive performance in Australia, a geography in which I have to say the last four weeks have shown a solid improvement.

So profitability has grown, has grown significantly and systematically around the company. And I think that our fourth quarter will drive profitability even faster than what we have done in Q3.

Fourth factor of our happiness today is that again we have been able to generate consistent free cash flow, EUR250 million in a quarter. And I think this is also paying the continuous effort that all our people daily are putting on working capital with excellent results on inventory and receivables.

Fifth, we have invested for the long quarter. It’s not just we are just reaping the efficiency activities of a year-ago of higher growth rate of sales. We also reinvested back in the business. And in the first nine months of the year, we have invested EUR40 million more in our marketing activities and I think this is very important for our long term.

Enrico, if you want to give us some more details, thank you.

Enrico Cavatorta

Thank you, Andrea, and good evening. So let's have a quick look of our main financial highlights for the third quarter and the nine months of 2010.

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