Iris HoldCo GmbH

Overview Key strengths Key risks Progressive lenses market benefits from supportive demographic and premiumization trends. Modest scale of operations in the competitive lenses and eyewear markets, where EssilorLuxottica has recently strengthened its dominant positions with the acquisition of the large retail banner Grandvision. Proprietary scanner provides a premium technology, facilitating strong relationship with independent opticians and market share gains. Concentration of activities in Germany and the rest of Europe. Cash flow generative business model thanks to an EBITDA margin of about 20%-21% Highly leveraged capital structure with adjusted debt leverage of about 9x in the next 12 months. Good growth prospects especially in emerging markets, where unmet needs are substantial with almost 3 billion people globally untreated for poor vision.

...Continued successful rollout of Rodenstock's technology-driven strategy is a key driver for profitable growth in our view. In 2021, Rodenstock's revenue increased by about 23% to 494 million, a significant catch-up following poor performance in 2020 due to the outbreak of the COVID-19 pandemic, but also an increase of about 10% compared with 2019. The company has seen growth in both the Lenses and Eyewear divisions, by 24% and 16% respectively, and across all geographies. Top-line expansion was supported by the growing installed base of proprietary DNEye scanners, up to 2,709 in December 2021 from 2,290 a year before, achieved by the company through a successful sales campaign. We forecast that Rodenstock will continue to rely on its relationship with independent opticians and with ophthalmic chains and on continuously upgrading its technology to drive revenue growth from the sale of the more premium progressive lenses at high margins. We value the group's track-record of market share gain...

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