Christopher Rossbach presented his in-depth investment thesis on Essilor (Paris: EI) at European Investing Summit 2017.
Essilor is the leading global prescription lens producer with a vertically integrated supply chain and 41% market share (more than 3x that of the next competitor). The company owns advanced lens technology backed by €200+ million per annum R&D spend. Essilor has significant growth opportunities in Europe, the U.S. and Asia from socio-economics (growing population, ageing, higher incomes) and technological innovation (varifocals, coatings). The pending merger with Luxottica creates a global leader cross the value chain (lens, frame and sunglasses, retail, online) and synergies of €420-600 million. Essilor and Luxottica are highly complementary businesses due to minimal overlap in ophthalmic lenses (Essilor) and sunglasses/frames (Luxottica). The combined company possesses strong competitive advantage, participates in good and growing markets, has strong management, and solid balance sheet, setting the stage for long-term compounding. Essilor shares recently traded at a pre-synergy 2017E P/E of 26x and a post-synergy 2020E P/E of 18x, based on conservative assumptions on synergies.
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About the instructor:
Chris Rossbach is Managing Partner of the London-based family office, J. Stern & Co. Established to provide investments for the Stern family, it is devoted to long-term investments for families with a multi-generational approach. J. Stern & Co. builds on the Stern family’s 200 year old banking tradition with a conservative approach and institutional-level analysis and resources. It manages bespoke concentrated global equities portfolios following a strict value approach, based on its own proprietary analysis, with a long-term investment horizon. Prior to co-founding J. Stern & Co., Chris had senior investment roles at Merian Capital, Magnetar Capital, Lansdowne Partners and Perry Capital. Chris holds a BA from Yale University and a MBA from Harvard Business School.