EssilorLuxottica SA

PAR:EL

Earnings Call Transcript 2021-Q1

[Operator]

Welcome to the EssilorLuxottica Q1 revenue presentation. We have here Mr. Paul du Saillant, Deputy CEO of the company; and Mr. Stefano Grassi, Co-CFO. I now hand the call over to Mr. du Saillant.

[Paul du Saillant, Deputy CEO & Director]

Good morning. I am happy to welcome you to our first quarter conference call, together with our Co-CFO, Stefano Grassi and the IR team. EssilorLuxottica had a strong start to the year, with revenue surpassing 2019 levels despite the continued effect of the pandemic. At constant exchange rate, our Q1 revenue was up 2% compared to Q1 2019 and 14% compared to Q1 2020.The need for good vision confirmed its structural and resilient nature. Our customers have continued to adapt to the new environment. We provided them with innovative products, brands and digital tools, and with daily help to adapt their sales protocol. In parallel, we constantly improved the consumer journey in our stores and across the industry. Francesco Milleri and I are very grateful to our teams, who display a unique wealth of talent and skills and show high engagement, energy and adaptive.By activities. The optical business, which accounts for about 3/4 of our revenue, continued to drive the performance. We saw good momentum in optical retail as well as in prescription lenses, especially in our big categories, [indiscernible]. Sun demand bounced back in North America with Sunglass Hut optical banners.By channels. E-commerce continued to accelerate at 47% compared to Q1 2020, continuing the solid trend of 40% growth observed in full year 2020. the mono-brand platforms doubled in revenue and made e-commerce overall margin-accretive for the group. Our retail divisions were up compared to Q1 2019, both showing the strength of our direct-to-consumer approach.On the independent channel, our ECP, alliance and partnership program outperformed significantly. We increased in the U.S., the numbers of EssilorLuxottica 360 partners to 1,700 and our Essilor Experts to 7,800 in the quarter.By country, the U.S., China and Australia drove the business in Q1, and our teams adapted to this reality very quickly. We saw a big improvement in the U.S. consumption from March, thanks to the stimulus package of the new administration. And Greater China became the second biggest country of the group in terms of revenue. Other regions were still mixed in Q1 and should progressively improve through the year. In particular, Europe lagged behind because of persisting COVID-19 restriction and a lack of tourism.During the quarter, the company actively pursued its integration drive. We remain on track to deliver cumulative synergies of EUR 300 million to EUR 350 million in adjusted operating profit by the end of 2021, and EUR 420 million to EUR 600 million by the end of 2024.We continued the digitalization of our business and processes. This includes the combination of our business-to-business digital platform, the further ramp-up of a unified SAP system throughout the group as well as progress in the remodeling of store formats around digital tools, in particular, with the easy concept, deployed at [ Salmoiraghi. ] We are also in the process of harmonizing our sustainability program, which are at the heart of our mission and business model, while defying a consolidated sustainability road map setting targets to reduce our environmental footprint and covering key topics such as climate change, circularity, diversity and inclusion, to name a few.We introduced bio-based materials in several collection like the Costa Untangled Sun collection made of recycled fishing nets and the armored frames, which are fully recyclable. We also followed the recommendation of the TCFD, the Task Force on Climate and related Financial Disclosures.During the quarter, we signed 2 important acquisitions. The SightGlass Vision joint venture done with CooperVision in myopia control, and Walman [indiscernible] acquisition in the U.S. Our balance sheet remains strong, and we had good free cash flow generation during the quarter.Now I would like to have a short focus on the ramp-up of our innovation, which highlights the priority given by EssilorLuxottica to create categories and product addressing consumer needs. In the new myopia-controlled category, the deployment of the Stellest land continued in Q1 in several geographies after its successful launch in China in July last year. We will continue to expand it in more geographies in the months to come. And I'm very pleased to share with you that the U.S. FDA has granted a breakthrough designation for spectacle lens, which is being evaluated for the correction of myopia and slowing the progression of myopes. Varilux Comfort Max drove the progressive category, while we are starting to deploy the redesigned Crizal range, starting with the new Crizal Rock in the U.S. We continue to drive the photochromic category with a great new product we are being launched transition extractive from second semester.Ray-Ban Authentic, our first complete payer, fitting Ray-Ban frames with Essilor prescription lens was deployed in North America during the quarter after being well received in Retail. It will launch in more countries, including France in the next few months. Further on Ray-Ban, the brand continues to focus on the 4 icons Aviator, Wayfarer, [ Brown ] and Clubmaster, with the addition of 2 new trends, bold [indiscernible] and wired metal. And last but not least, we are launching today Oakley Kato, a new collection with a radical purpose-built design that conforms to the contours of the face. It is based on the new lens platform, incorporating advancements in optical design that produce unparallel optics and vision clarity.All this gives us even greater confidence than before in our ability to outperform the industry. And we ambition in 2021, to deliver a performance at least comparable to 2019 in both revenue and adjusted operating profit margin at constant exchange rate.In conclusion, Francesco and I feel the first quarter confirm the solidity of the group and our unique position in the industry. We are ready to move from 2 operating companies to 1 unified group. With this, I would now like to hand over the call to Stefano.

[Stefano Grassi, Co]

Thank you, Paul, and good morning, everybody. Welcome to our Q1 sales release.And let's jump directly into our revenue across the different segments on Page 3 of the presentation, where we're comparing Q1 2021 with the Q1 2019 results. The overall top line was up 1.9% on a constant FX. Once you look at our number on a current FX basis, you look at a negative 3.6%. And so we have about 5.4 percentage points of difference between constant and current FX results. And the reason for that is very much in 2 currencies. On 1 side, we have the U.S. dollar that devaluated approximately 6% compared to 2019 euro levels. The other currency is the Brazilian real that devaluated approximately 35% versus 2019 euro levels. If currency remain at those levels, we can expect those headwinds to very much continue throughout the remainder part of 2021.And now let's jump into our different division, beginning with the biggest one, the Lenses & Optical Instruments. The Lenses & Optical Instruments posted revenue, up 3.1% at constant FX, with all the 4 regions that posted positive growth compared to Q1 2019. We continue to build a tighter partnership with our ECP and key accounts around the world, thanks to a strong product innovation pipeline. And if you think about it, in the last few months, we launched the new version of transition, the transition Gen 8. We launched the Varilux Comfort Max. And last but not least, in China, we launched the myopia management lens called Stellest.The Sunglasses & Readers division was up 3.4% with Bolon double-digit pace with the FGX business that was solid positive on both Readers as well as Sunglasses.The only division that posted negative revenues on Q1 on a constant FX basis was really the Wholesale one. In the Wholesale division, we were high single-digit in North America with all the other regions on the negative territory. From a product mix standpoint, happy to report the optical business that was positive on the mid single-digit territory, while the some part of our Wholesale division was still trending on a negative territory. We have favorable price/mix, and this is obviously very encouraging to see, and we expect to see that also throughout the remainder part of the year.From a retail perspective, our top is up 4% during the course of the first quarter. I will start with the e-commerce business that posted a very encouraging triple-digit growth rate, very much doubling the size of our business, improving, once again, the success of our strategy for the online branded business. From a retail brick-and-mortar perspective, we were slightly negative during the course of Q1, with a strong recovery pace in North America on both the optical as well as the some part of the business.And now let's jump directly into our different region. And as usual, let's begin with the biggest one, North America. North America, I'm particularly pleased with the results that we achieved in Q1, with a top line that was up 6.4% at constant FX. Because this come as a result of a sequential improvement in our performance. You may remember, in third quarter 2020, our top line was up 2.5%. In the fourth quarter, we further accelerated at 4.2% and now landing at 6.4% in Q1 versus 2019.The Lenses & Optical Instruments division was on the low single-digit territory. The sales of lenses to ECP was actually in the low single-digit territory, but accelerated in the month of April. We continue to make remarkable progress on the joint effort and program called EL 360, where we're now rolling out about 17 doors as anticipated by Paul. And looking at our branded lens portfolio in North America, we have our Crizal lenses that perform on the mid-single-digit territory; the Eyezen lenses that were actually double-digit pace in Q1.We're also looking ahead, and what we expect in the second quarter is an important media campaign that activates the Varilux land in Q2. And this is going to be, obviously very important and will give great visibility to the Varilux brand that is such a critical asset for EssilorLuxottica.From a Wholesale perspective, our top line was in the high single-digit territory during the course of the first quarter. We were positive on both Sun as well as optical, which, by the way, trended on the double-digit pace. From a channel mix standpoint, we have our independent channel, leading the way on mid-single-digit territory, but also department stores and our third-party e-commerce partners that actually performed on a double-digit pace. We continue to leverage this good momentum in our wholesale division.You might remember the second half of 2020, we delivered double-digit growth, and now we are in the high single-digit in Q1, and we leveraged that good momentum to continue and reinvest in the Wholesale division, reorganizing our sales force that is now focusing more on individual brands and leveraging more and more the technology that the group has made available for our sales reps.Last touch on brands. The Oakley brand is on fire, delivering a double-digit growth rate in the course of the first quarter, very much proving that the strong performance that we've seen during the second half of 2020 was not really isolated, but is now very much a trend continuing quarter after quarter. Moving to Retail now. Retail was in the high single-digit territory in Q1. The first part of the quarter was probably more challenging than the second part. In particular, in the month of February due to the winter storm that impacted North America, we saw a deceleration in our Retail performance. But in the month of March, with the stimulus package approved by the U.S. government with a favorable calendar with Easter shift, we saw an acceleration in our performance and actually led in the last 3 weeks of the month of March to a double-digit comp sales in Retail North America.LensCrafters trend is very much in continuation with the fourth quarter trend. And what I mean by that, comp sales in the low single-digit territory, no more location on the high single-digit territory, while more locations still trending on the negative side. Price/mix that is helping and supporting us very much thanks to a strong mix of lenses that is supporting our average price.From a Sunglass Hut perspective, happy to report comp sales in the mid single-digit territory, with a strong rebound in the month of March. As usual, we continue to see the non-international Sunglass Hut location and the Bastille location very much leading the growth that was strong in the month of March, and obviously, the international location in the major cities like New York, L.A., Miami, were the one that's struggling the most.The last mention on e-commerce. We doubled the size of e-commerce compared to 2019, and we grew 90%, 9-0, compared to 2020. And this is not just the result of limitation in getting into our stores during the first quarter, but it's also the continuous and restless effort that the entire e-commerce team put in enhancing the platform. The perfect example for that is represented by the replatforming [indiscernible] rayban.com that now provides an enhanced consumer experience to the Ray-Ban fans.But now let's jump into a more challenging territory, and that is Europe. As you can see, Europe sales declined 7% during the course of the first quarter 2021. Clearly, the storyline in Europe is heavily impacted by the restriction related to COVID-19. Despite that, the Lenses & Optical Instruments division posted low single-digit revenues with few countries that were in the positive territory during the course of the first quarter. France, for example, tends to the multi-natural distribution strategy. Turkey, Nordics, Russia as well as Eastern Europe, they were stronger on a positive side, while Southern Europe, U.K., Germany and Benelux were lagging behind on the negative territory.From a Wholesale perspective, our sales were negative in the course of the first quarter. Optical part of the business, more resilient than the Sun part, and Sun was very much negative throughout the majority of European country with the only real exception of Russia as well as Turkey.Retail business in Europe was in a challenging situation. Our revenue were down on a double-digit pace. And just to give you an example of how challenging was the operating environment during the course of the first quarter in Europe, I'll give you 2 examples.Salmoiraghi & Viganò, our optical retail chain in Italy, operated with 40% reduction in trading hours in their mall location due to the COVID restriction. In Sunglass Hut in Europe, we operated in January and February with 50% of our store base that was closed. In the United Kingdom, the largest Sunglass Hut division, we have pretty much the entire store base closed in January, in February as well as in March. So a very, very challenging operating environment for our retail brick-and-mortar.On the positive side, we have the -- our e-commerce division that in Europe posted a growth rate on the triple-digit territory.But now let's move east, and let's go to such a critical geography like Asia, Oceania and Africa. I'm pleased to report top line on the positive territory, and this is a story of sequential improvement similar to North America, but the starting point here is actually in the negative territory. You might remember, during the course of the third quarter, our Asia division -- region posted revenue down 8%. In the fourth quarter, our top line was actually negative 1%. And we were seeing, as we met in March, early signage of improvement in our performance in their regard. We finally moved into the positive territory for Q1 2021.The Lenses & Optical Instruments was up on the high single-digit territory. The China lens business was up double digits, very much driven by strong volume as well as supported by strong price mix. Crizal, Varilux, blue-cut lenses as well as Transition, they all trended on double-digit phase in China. The Stellest rollout is continuing to a high pace even during the course of the first quarter. And just to give you an idea, in Q1, the volume of Stellest lens that were sold is doubled compared to the one that we sold in the fourth quarter. So the rollout is progressing at a high pace, and we're very pleased with the results that we're getting so far.The Sunglasses & Readers division was up 16% during the course of the first quarter, so double-digit pace here. The Bolon delivered another outstanding quarter of double-digit pace with a solid performance in Wholesale, in physical Retail as well as in e-commerce. We successfully launched new collection at the beginning of the year that were very much appreciated by our clients in China, and that is obviously very reassuring for the remainder part of the year.Moving to Retail. Our revenues were overall positive during the course of the first quarter. Optical Retail Australia was up on the high single-digit territory despite several localized lockdown in the country. Those localized lockdown very much impacted approximately 330 stores during the course of the first quarter in different point in time and impacted for a total closure of about 26 days throughout Q1.We continue to experience favorable price/mix, very much thanks to the more recently launched lens like the Eyezen Start as well as the Varilux lenses that were a successful story within OPSM.The last batch on Retail in China. Retail in China was soft during the course of the first quarter. Couple of readings here. On one side, the Hong Kong situation that continues to be pretty challenging, I would say, and on the other side, the Beijing area that very much suffered several restrictions due to the COVID-19.But now let's get into South into Latin America region. But I'm pleased in a way to see top line on the positive territory. Revenue here were very much impacted by the pandemic outbreak in Latin America. That was pretty severe during the course of the first quarter, in particular, in Brazil as well as in Chile. Happy to report the Lense & Optical Instruments division was in the mid single-digit territory with Varilux, the Crizal, the Eyezen lenses, were all solid positive during the course of Q1. And from a country mix standpoint, Brazil, Argentina, Chile as well as Mexico, they were all on the positive territory, again, for the first quarter.I also want to mention the successful results of the rollout of the Essilor Experts program. I would define that a great success. We have already enrolled about 4,200 doors as of the end of Q1. From a wholesale perspective, our top line declined during the course of Q1. In Brazil, that is the main country for Wholesale, the situation is quite challenging. Just to give you an idea, 50% of our key accounts have their door closed during the course of Q1.Another challenging area is the Retail. In GMO, our optical retail chain in South America, we experienced a deterioration of the performance due to the high number of cases, in particular, in Chile as well as in Peru. In Brazil, 80% of our store base was closed. The good thing is that on the reminder 20%, we had a performance that was in the positive territory. But again, the overall environment is quite challenging, and we now start seeing some early sign of recovery throughout the month of April.But now let me hand it over to the operator for the Q&A session. Thank you.

[Operator]

[Operator Instructions] The first question comes from Graham Renwick of Berenberg.

[Graham Ian Renwick, Analyst]

Just have 3, please. Just firstly, on trading and the acceleration you noted through the quarter. I think on the full year call, you said trading had been broadly flat versus 2019 across Jan and Feb. So is it okay to assume that March was mid to high single-digit versus 2019? And how has that continued through April? Has it remained stable, accelerated, decelerated, et cetera?And then on guidance, there was an improvement in the guidance with respect to EBIT margins. You now expect them to be at least at 2019 levels previously. You said they would be in line. So there's clearly some greater confidence there on margin development. So what are the main drivers for that? I think in the statement, you said that integration synergies had gained momentum in Q1. So I wondered if these were potentially dropping through quicker than expected.And then lastly on GrandVision, there was no comment on this today, but there has been some key developments in the period with the deal gaining regulatory approval from the EC, although an appeal you made in the Amsterdam court was rejected. Just wanted an update there. Has there been any change to your view on the deal? Does it still make strategic sense for you to be acquiring GrandVision?

[Stefano Grassi, Co]

Okay. So I will start on a current trading and the guidance evolution, I would say. And then probably, Paul, you might want to comment on the GrandVision deal.With respect to the guidance, we clearly started the year in a very promising way, I would say. We have -- definitely see a turning point in the month of March in the United States. And that is obviously a very encouraging turning point. Looking at the month of April, we continue to see that solid trend in North America. And I would say we're carefully looking at also the restart in certain parts of Europe, namely U.K., where just a few days ago, we've seen the restarting of the retail activities.In respect to Latin America, I would say that the situation in Brazil continues to be quite challenging in a way. But we get, let me say, early signs of optimism. Clearly, we know that, that region, that country, in particular, is going to be key, in particular, during the end of the third and through the fourth quarter as we're going to get into the high seasonality there.With respect to Asia, I think we continue to see throughout the month of April a strong pace in our Oakley and Sun business, and that is obviously very reassuring. And we're carefully looking at the evolution of the situation in China. We still have some restrictions that have impacting Hong Kong with respect to the Beijing area. Some of the restrictions that affected, in particular, the first quarter have now been lift. So all in all, again, in light of what I would define a promising start of the year, we thought it was wise to revise our guidance and very much provide a new ambition in a way to put ourselves at least at 2019 level in both revenue as well as adjusted operating profit margin. Paul, you want to take on the GrandVision?

[Paul du Saillant, Deputy CEO & Director]

Yes. Sure, Stefano. Thank you very much. Well, on GrandVision, the few things that I can update you on. First, the strategic merit of this acquisition, like we have always said, is confirmed. Second, you have seen important developments on the antitrust filing. We were very pleased to see the outcome of the EU Antitrust decision back in March. We are satisfied with the clearance we obtained in Chile. And now we are waiting for the last approval, which should come from Turkish authority in the weeks to come.Then you -- there was the summary proceeding on which we did a press release to give you all clear information. And we did acknowledge that on April the Amsterdam Court of Appeal rejected the company document request. That was due mainly to the disclosures recently ordered in the arbitral proceeding brought by HAL and GrandVision. Luxottica Initiated the legal proceeding to obtain such information from conversion.And on the arbitration, this is by nature or confidential proceeding that I will make no comment on as of today. So this is where we are, and I think that gives you the most recent update, Graham.We can go to the next question.

[Operator]

The next question comes from Susy Tibaldi of UBS.

[Susy Tibaldi, Associate Analyst]

And just a follow-up on the current trading and the comments in April. I was wondering if you have any early observation when it comes to the European market because we had 2 countries where the rules have become a little bit more relaxed. So if you have any observations within this geography, will be very helpful.Then my second question was regarding the growth that over the past 2 quarters. But also now, you've been saying that it has been driven by price mix. So I was wondering if this continues to be the case? Or are you also starting to see some volume growth on top of that? And whether this price mix improvement, you're seeing it across the world, or it's focused on in the developed markets?And lastly, 1 question on the margins. So I understand that with your guidance today, you are expecting both your top line and your margins to be at least in line with comparable to 2019. But I was wondering, given that in terms of top line, the top line, the mix is better, and you also have your online growth, which is accretive. So shouldn't we actually see the margins to benefit from these drivers? Or if we may not see this, is it because you are choosing to reinvest some of these, let's say, accretion.

[Stefano Grassi, Co]

So I would take on some of the current trading consideration here. Let me say that if we look at Europe, as we said, the first, the restart Retail activities was really U.K. But I guess, we need to -- carefully looking at the trend that we're seeing here in United Kingdom in retail because clearly, we see the queues of people standing outside the stores. Now we clearly want to understand that if that is going to be a trend throughout the remainder part of the second quarter as we get into the summer season, I would say that generally speaking, the feeling the perception is positive, but let's not forget that in several countries, we still have a quite severe limitation in accessing for example, into shopping malls during weekends in Italy. In other countries, we were just de-confined the population like in Germany.So again, it's something that we are carefully looking in through the month of May and in particular, in early June, but I do expect a progressive recovery of the situation in Europe as well. Don't expect that pace of recovery to be as strong as we have seen or at least as fast as we have seen in North America in a certain extent.With respect to price/mix, we continue to see a nice price/mix. That is very much the result of us being very diligent on discounting. And at the same time, we've seen also a tendency for consumer to appreciate our brands, the tendency for the consumer to purchase add-on on lenses, and the price/mix has been very solid on Retail. And this is, obviously, very encouraging because there is more demand for branded lenses, more demand for Blue IQ through antifatigue that are clearly very much supportive of our price mix.With respect to the margin, I think the guidance pretty much state that we have an expectation of getting to at least 2019 level. Now how we're going to get there? I think it's a journey that we're going to look at together throughout the remainder part of the year. We continue to see an e-commerce platform that is solid. And we have other parts of the business, I would say, other regions that are definitely more challenging. Remember, we're still navigating with 1 independent variable that is out of our control and is the pandemic evolution. That is very much the one that we can control.But again, we have seen that as the population de-confined and there is a restart of the consumer spending. We are there to support not just with the Optical products, but also with the Sun part. That's really where we are today.

[Operator]

The next question comes from Luca Solca from Bernstein.

[Luca Giuseppe Solca, Research Analyst]

I have a question on laboratories and your recent acquisitions. I was having the understanding that part of the post-merger integration effort is going to be that of rationalizing the number of laboratories that you operate from. So I wonder if that is indeed correct and part of the plan, and how you see the network of laboratories evolution going forward?Second question on China. You mentioned China is the second largest geography after the U.S. in the quarter. I wonder if you could give us more granularity on how the [Technical Difficulty] when it comes to mono-brand retail, retail and wholesale, knowing the initial problems on some of these fronts that you experienced and the very significant importance of breaking through in emerging markets and in China, in particular.And then last but not least, concerning your guidance, and the fact that you would be now looking at 2019 revenues with 2019 profits. I wonder that other than the mix, what is the contribution that you are getting from the synergies that would be maturing, and where, instead, would you be facing extra costs so that the operating profit doesn't -- the operating profit margin doesn't improve?

[Paul du Saillant, Deputy CEO & Director]

Thank you, Luca. I will take the first one on the lab. This is Paul talking. To understand the lab footprint of the group, you have to keep in mind that we are a combination of 3 types of labs. We have integrated labs, like we have in Atlanta, in Sedico, in Thailand, in [ Tristar ] in China, which are integrated platform with the frame, with the lens and the labs, altogether, and they do a lot of complete pairs.Then we have large prescription labs at the heart of each country or region that we have in Columbus, in Dallas, in France, in all the countries. And then we have smaller service center to have the granularity to be very close to the optician, to the point of sales.So when you look at the acquisition, which is a network of certified lab and service center, you complement our footprint in the U.S. with 2 large labs and little service center. And this complements nicely our geographical footprint because of the Midwest position of Walman. And it gives us a very good reach throughout the U.S., complementing our existing reach.We constantly, on your question of the optimization of this lab network, which is north of 500 labs worldwide, we constantly modernize, rationalize, optimize this lab footprint, country by country, region by region, leveraging the technology platform of the group and all of the IT infrastructure because this network of lab is integrated, interconnected.That's 2 minutes, a summary on the lab. And is a nice complement to this network in the U.S. This is the last major independent lab network in the U.S.Stefano, I didn't take the next one.

[Stefano Grassi, Co]

Yes. Absolutely, Paul. So with respect to China, we've seen that from a B2B perspective, we're marching on a very strong pace of revenues with respect to China. We see that, as Paul mentioned on the presentation, the contribution of Stellest lens is progressively higher and higher quarter after quarter.By the way, we introduced the Stellest lens also on our retail LensCrafters with early encouraging results, I would say.What we continue to see, again, the first quarter has been kind of an unusual quarter from a Retail perspective, right? We -- you remember that during Chinese New Year, the population was very much -- the Chinese population was very much limited on the movements around the country. And so we see a consumer spending that was pretty strong on the local -- on the big cities, then after Chinese New Year, there was a lot of de-confinement in the freedom of movement around the country. And we've seen a little bit more touristic flows moving around still within the China. Beijing and Hong Kong remain on the negative territory for the reason that I just explained before.The Ray-Ban business is solid in the course of the first quarter, again, carving out the things that I just mentioned. We do see a strong depreciation of the Ray-Ban brand. Clearly, this is a journey that will progress throughout the following quarters. It doesn't come from day to night in that respect in China.But again, our strategy is pretty clear in here. It's very much through a further announcement of a lens assortment in our retail brick-and-mortar. It's an investment that we continue to do, not just in the traditional Retail, but also trying to understand where there are new ways to develop our business in China. And again, there's a huge investment in terms of innovation and products.Stellest lens, it's the last that we talk about it, but for sure, it won't be the only one isolated. So we'll see more and more new products launching into this part of the world to very much attract the Chinese consumer.With respect to the guidance and the way we're looking at 2021 clearly, there is a contribution of synergies into our number. And that is obviously on track to what we planned, what we shared in our Capital Markets Day in 2019. So everything is marched as The combination of synergies, growth as well as investment activities very much give you that expectation and ambition that we have to get at least that 2019 level in terms of sales and profitability.We haven't slowed down our investment pipeline. I mean, our plan to renovate our store base, it's still there. Our plan to make an unprecedented investment in LensCrafters during the course of 2021 is still there. The plan to renovate our sales force in our Wholesale B2B with sales reps that are now focused on individual brands rather than our portfolio brand, it's still there. And those are investments they are paying back.We've seen that, for example, when we renew stores, we get a strong lift in the performance. We've seen that now reorganizing sales force with the help of technology, with the help of new tools that replace the traditional bags the sales rep will carry on in their visits, we are more effective. We actually have a bigger assortment available, and we are -- we're seeing very good results in, first of all, in the United States.So those are reinvestments that we very much want to do, and we believe they are right for the long-term health of the company.

[Paul du Saillant, Deputy CEO & Director]

Luca, I might -- on China, Stefano, I would like just to also give a complementary perspective on it. It's -- we flagged it with Stefano in our release as China becoming the second largest country. Just to show how important it is. It is the largest market in terms of volume of consumer today asking for vision correction, vision protection. It's already the largest in volume.We have established a good presence in the lens part over the years for EssilorLuxottica, and that growth of the lens activity is very strong in the first quarter. It's made of everything we talked about myopia. It's made about address establishing the key categories, the key brand, averting group protection. So there is a very good dynamic in the lens part where we have already sized significant market share.It's then the other part, which I think is also important for you to have in mind to see what we have assets to address the China market, is the brand of the group, including the Bolon brand, which is the very powerful local brand in China, delivering extremely good growth, both in optical and sunglasses, which complement the portfolio of brands that you know very well of EssilorLuxottica.So it's the beginning of the journey. It's -- there is a lot of upselling potential. A lot of consumer needs to address a big myopia topic, and like Stefano explained very well, how do we expand progressively the footprint in retail and online for the group, knowing that we have the infrastructure behind with local production, frame, lens, labs already very present in China to support that growth.I just wanted to add this to give you the power and the importance of this opportunity for EssilorLuxottica.

[Luca Giuseppe Solca, Research Analyst]

Maybe just 1 clarification on something you said before, if I may. I understand that the arbitration process is confidential. But can you clarify the way -- or let's say, the time line that it's going to take. And also, the goal of this arbitration process. Is that the same goal as the challenge that you brought to the quarter? Is it a different one?

[Paul du Saillant, Deputy CEO & Director]

I'm sorry to disappoint you. But as I said, the arbitration process is a confidential by nature proceeding, so I will make no comment.

[Operator]

The next question comes from Anne-Laure Bismuth from HSBC.

[Anne-Laure Bismuth]

Yes. I have 2 questions, please, and mainly on this myopia topic. Actually, I would like to ask what are the key minds to you actually in terms of rollout in China for Stellest in Q1? And if I'm correct, you mentioned that you rolled it out in other countries in Q1. So if you can say where you rolled it out?And the other question is about the SightGlass Vision. So it's also another lens to stop the-- to slow down the progress of the myopia that you have acquired with the JV in the U.S., but just do you plan to roll out SightGlass in the U.S. soon, given that you just been on the approval from the FDA? And also, will you balance the rollout of Stellest with SIghtGlass, please?

[Paul du Saillant, Deputy CEO & Director]

Thank you, and I we'll take that one. So to address the myopia pandemia, you need some very key things. You need a good technology platform. You need to create the awareness. You need to embark the eye doctor, the ophthalmologist, establish new protocols, deploy the solution. It's a whole new category. It's a whole new consumer experience targeted at kids first, kids from the years 4 years old to 12 years old, 14 years old. So you have to see it as a holistic topic, and this is what at EssilorLuxottica we are trying to do is to really take it with a deep approach.So we started with the Stellest platform, which is a great technology, a very -- delivering very impressive results. I remind you that it is slowing down the myopia progression from the experience we had in China by 67% on average after 2 years compared to a normal single vision. So it is a massive reduction of the myopia development when those lens are worn 12 hours a day.So we started in China. We launched it in July, first with hospitals, then with retail and we are expanding progressively this deployment in China. And as Stefano and I said, we are now every day equipping since the first quarter of more than 1,000 children every day in China, still the beginning.We are expanding the launch of this product progressively in other countries in Asia. And we will, in the weeks to come, start the launching in Europe. A key milestone on Stellest that we mentioned was to be granted by the FDA last week, actually, is very recent, the status of a breakthrough designation for this spectacle lens.And this is very important because it does recognize the value of that technology, and it allows us to work very efficiently with the FDA in the months to come. So that is the whole status platform.And as I said, it's a holistic approach with the key factors that will deliver this new experience for the children. In parallel to that and complement that, we have done this joint venture for the acquisition of SightGlass Vision, which is a very good technology also that complement the technology platform I just described. And that progressively, we will also launch in the market.So this is, in a nutshell, the way we approach it in taking large approach, a complement approach in different geography progressively. I hope it clarifies your understanding.

[Operator]

The next question, it comes from Cedric Lecasble from Stifel.

[Cedric Lecasble, Research Analyst]

I'm sorry to come back on the guidance, but just thinking of the landing point in 2021 versus '19, which is very helpful in your comments and in your figures. On top line, we are slightly ahead. And projecting ourselves in the year, things should more improve than deteriorate, hopefully. So what are the potential headwinds you consider to come to this kind of guidance of at least '19? Is it the tourism on which you are still caution? Or is there more reason for that?And same kind of question on the margin. I know it was asked already, but you have a strong mix this year. Seems to be very strong, starting the year. You have the synergies ramping up. So here, again, as we exclude FX, which had a negative impact, what prevents you from being a little more aggressive on your guidance? So are you on the conservative side? Or are there some elements that you -- that I don't take into account enough. And the last one is just a clarification on China. Would it be possible to have a percentage of total sales? That's a very quick and easy on.

[Stefano Grassi, Co]

Okay. So with respect to the first couple of questions, Cedric. If we look at our guidance, what we said is that we are -- have the ambition to be at least at 2019 level. So that is where -- very much where we are.Clearly, there is one independent variable, as I said before, and that is the COVID-19 outbreak. But I think we know that we had a good delivery of first quarter. We have full confidence in our capability, and we also are about to face an important turning point from a governance point of view. And as Paul mentioned, we're moving to a true unified group here. We're marking on track with synergies, and this is where we are. So clearly, that is going to give us very much the confidence on -- to facing the remainder part of the year.Now with respect to margin, again, the consequence of that confidence is not just on the top line, it's also on the margin where we said at least, and that's really where we are. With respect to the contribution on China and the overall results, we're looking at about 6%.

[Operator]

The next question comes from Piral Dadhania from RBC Capital Markets.

[Piral Dadhania, Director of Premium Brands]

Just a quick follow-up, please to Anne-Laure's question. Just on Stellest. Could you just help us understand following the FDA breakthrough designation approval you received, what the timing will be in terms of deployment into the U.S. market and the sort of time frames around commercialization of myopia management in the U.S.?

[Paul du Saillant, Deputy CEO & Director]

Piral, it's a bit too early to say. We are working with the FDA. When you are granted the breakthrough designation by the FDA, it provides you with an accelerated proceeding, and the FDA puts a priority resource to review the dossier. So that, I think, is the way you should take it.But I will not, today, tell you the launching date in the U.S. But you should take that as a very positive sign that they have granted us with the designation. And that's why I wanted to share it with you.

[Piral Dadhania, Director of Premium Brands]

Okay. Understood. Maybe just to broaden the question then. What -- could you share with us your perception and your viewpoint as to how big or how important you think myopia management can be on a long-term time frame? Do you think this is a revolutionary innovation in sort of myopia management? Do you think it would change the direction of travel for sort of the way in which people are treated for shortsightedness on a long-term 20-plus year time frame? Or is it incremental to your broader product suite? And you think it's not maybe as revolutionary as maybe some were suggesting?

[Paul du Saillant, Deputy CEO & Director]

No, it's definitely revolutionary because we do -- for decades, we correct the vision, and we protect the eye, and we have created progressive lands, all kind of categories to allow good correction or good protection. Here, you are slowing down the elongation of the eye through the early age of youth. So it's something that is -- that's why it's called myopia management. It's not just correction only.And I recall you that the number of myope people in the world will be, by 2050, half of the population will be myope. Meaning, 5 billion people, today, it's already 2.6 billion people are myope on the earth. And in that, if I take only the kids today, 300 million children from the age of 5 to 19 are myopes. So it's -- and that will increase, of course, through the year.So we are creating a new solution that, as I explained, needs to be embraced by the eye doctors, embraced by the eye hospitals, by the independent practice to deliver it and to manage it through the childhood because it's not just you equip a children. And then you have to, every year, every 6 months, check the evolution of his vision. So it's something that will progressively get established. But it's really a new category, a new technology platform and dealing, on top of that, with children vision.So it's a very sensitive matter. So that's why we take it with great depth with our teams and go market by market, making sure we have the right technologies and product and dispensing models to address it. I hope it helps.

[Piral Dadhania, Director of Premium Brands]

Yes. No, absolutely. It's just that in Q1, obviously, China, Stellest was a big contributor to growth, as you've alluded to on the call and also in your prepared presentation and press release. So as you roll out in Europe, is it fair to assume you'll have a similar level of uplift and then as and when the U.S. comes, then that's also the case, given that's also your largest market.

[Paul du Saillant, Deputy CEO & Director]

Yes, but I would like you to take from what Stefano and I shared with you that our growth engine there is the Stellest, but we have rich-innovation platforms of products beyond just Stellest. We have new progressive lens, we have new -- the whole presale platform is being modernized and with some new technology features. We have the whole blue protection, which is a very successful topic because of the demand from the consumer with Eyezen. So we are at work, whether you talk about U.S., Europe or the developed market, a rich portfolio of products and innovation alongside our key brands, which is at work.So I think you should look at the growth engine that is driving not just being Stellest even in China, you have the blue protection, which is growing very fast. So don't limit your reading of our growth dynamic to only Stellest.Transition is a very powerful brand with a very modernized offering with the new Transition signature that now is completely deployed but further growing. We have the extra active coming. That's the takeaway of this call, I think, should be the power of the product and brand of EssilorLuxottica, which is at work.In this progressive reacceleration, with the vaccination being deployed, the market is restarting, the optician are very dynamic. So there is a good dynamic at work.

[Operator]

The next question comes from Veronika Dubajova of Goldman Sachs.

[Veronika Dubajova, Equity Analyst]

I have 3, please, if that's okay. My first one is just -- and Stefano, apologies. I know you threw a lot of numbers in your prepared remarks. I was just hoping you could talk a little bit more about the LensCrafters same-store growth rate that you're seeing in the U.S. and kind of how confident you are that you've turned the corner there, and competitively, how you're thinking about the brand from here onwards? And I know you also mentioned that you are still planning to continue with the store relocation and rebranding exercise. If you can just refresh my memory on how far along you are with that process, that would be helpful. So that's my first question.My second question is a follow-up on Stellest. Did I hear you right, Paul, to say that you are selling about 1,000 units a day in China? And if so, that seems like a pretty meaningful pickup on acceleration. Just to sort of follow-on some of the other questions that have been asked, I guess, what do you think you'll need to do in the U.S. and in Europe to generate the same level of awareness of myopia control as there is in China?And my last question is a financial one on the gross margin. From memory at full year, you talked about some headwinds and some tailwinds, which I think were netting out to be still negative for the full year in 2021, most likely. I'm just kind of curious with some of the progress you've seen on e-commerce, some of the progress you've seen on the product mix and the geographic mix, is that still your expectation at this point in time?

[Stefano Grassi, Co]

All right. So Veronika, I'll take the first and the last for -- with LensCrafters -- with respect to LensCrafters. So we've seen that the journey, LensCrafters, it's on the right track. We've seen that the consumer do see LensCrafters as a retail chain where people go for the service, the quality of the lenses that we offer. And just to give you an idea, the underlying KPIs that we're looking at LensCrafters are all going in that direction. If we look at that, for example, the penetration of Blue IQ lenses and LensCrafters during the first quarter is up 5 percentage points. We look at the penetration of progressive lenses, 2 percentage points. We look at the penetration of photochromic lenses, 4 percentage points. We're looking at the penetration of the anti-reflective, 3 percentage points.So we're really looking at LensCrafters -- the place where the U.S. consumer are very much going to get a product they can really get fully there. They can get a service level that they cannot get anywhere else.In order to very much enhance that experience, we need to have a place where we host our consumer that is very much up to speed with the latest and greatest technology, is up to speed with the latest development of the digital application. The telemedicine is 1 example that we are rolling out progressively into LensCrafters. We are also doing an important investment to evolve the store itself.We do imagine the LensCrafters stores over the longer run to be stores that are not just about the product. They're about the service, the eye care service that we can provide to the consumers to step into our location. So we imagine stores that are going to be ultimately with less products, with more services and very much with aftermarket products and service capability. So stores that very much are evolving from the one that you've seen in many optical retailers today.This is, for us, very important. It's also going to be the place where you can see the personalization of lenses, personalization of frame happening. And this is the way we imagine LensCrafters over the longer run. It's very important. It's an important investment for us. It's a journey, the liability we could complete in, let's say, in a couple of years.And -- but again, we know how to do this job because whenever we've done it, I go back again to Australia. We've seen the successful results of that. Whenever we've done it in Italy, for example, with Salmoiraghi & Viganò, we have a very positive momentum in a retail chain in Italy. And so we have very much a positive track record for doing that in a constructive manner.With respect to the margin, what I can say, Veronika, is that we're shortening the gap on a gross margin basis. And that's really where we are. Paul, you might want to take on the Stellest line.

[Paul du Saillant, Deputy CEO & Director]

Yes. On Stellest, just to be sure, Veronika, your good understanding. I said it's 1,000 children per day that we are equipping, not lens, 1,000 children per day, and it's the beginning, Veronika. Your question on what does it take to establish this category? It takes at least 3 kind of things in terms of who to embark in the journey. It takes the children with its parents. That's very important. The parents have to really understand what we are talking about with what and be part of the journey. It takes the whole eye doctor ophthalmologist community because they have a very key role in prescribing. And it takes, of course, the point of sale, the opticians to participate.So to roll out this solution, we work with these actors country by country, methodically. And that's when I tell you, we are launching, and we're going to launch in Europe in the weeks to come. This launch is being done with those actors, and it will be the same in the U.S. to do it properly. It's very key.Thank you, Veronika. Back to you, Stefano.

[Veronika Dubajova, Equity Analyst]

That was helpful. Stefano, can I just ask really cheaply, are you able to say what the same-store LensCrafters growth was in Q1 versus Q1 '19 or not?

[Stefano Grassi, Co]

Comp sales. Comp sales in the low single-digit, Veronika. That's really where we are. In acceleration in the month of March, in acceleration in the month of April.

[Operator]

The next question comes from Francesca Di Pasquantonio from Deutsche Bank.

[Francesca Di Pasquantonio, Research Analyst]

I have a few quick questions, please. The first is about your supply chain. As we move to elaborate our model for Q2, we are about to see very strong growth. I was wondering whether your supply chain is all in place to support the growth, which should be expected or whether you could face some bottlenecks and in what stage of your supply chain?The second question is, when you refer to the guidance, and the fact -- I understand the moving parts, but I was wondering whether lockdowns in the first quarter, in the first half are potentially sourced for your lack of greater aggressiveness on the guidance by -- through the [indiscernible] negative operating leverage. So that's another question.The third question is about China. And if I remember correctly, you had a plan to develop a similar insurance business that the ones you have in the U.S., and can you give us an update on that?And finally, on arbitration, I know you won't comment on the arbitration. My question is really whether it has an implication for the timing of the deal, given the hard stop on the 31st of July? And as a follow-up, is [indiscernible] antitrust, the only condition, which separates you from the completion of the deal?

[Paul du Saillant, Deputy CEO & Director]

So I can start maybe, Francesca, with the supply chain. Yes, our supply chain, whether it is for frame or lens or laboratory delivery is a very robust supply chain that is able to support the reacceleration of the demand. I remind you that we have a full network of frame manufacturing plant in Luxottica deployed in all the continents, all interconnected. We have the lens manufacturing capability, the same, fully deployed worldwide with plants in all the key countries, the key geographies that we can flex the production of, and then we have laboratories. I commented earlier, following your question that our integrated platform or local labs or local service center.So there's a lot of flexibility and resilience in the system. We proved it last year when we had the shock wave of the COVID in the second quarter where the demand drastically reduced. And then we had a restart, very steep that we were able to follow throughout the H2, the second semester. So the supply chain of EssilorLuxottica in the industry and very widely deployed to provide flexibility, adjustability with top-quality teams who know how to manage the demand quite well.On the arbitration, I won't make any more comment. As I said, there is no comment on the arbitration, neither on the timing. Of course, we will communicate if and when there are news on this. But for today, I think I really gave you the -- what's the information to be shared. So maybe, Stefano, to you for the guidance.

[Stefano Grassi, Co]

Yes. Thank you, Paul. I would say, we look at the other way around on the guidance, right, if anything, I think the first quarter gave us more confidence in the way we look at 2021. I mean, it's not by chance that we met together in early March, and we shared an outlook. We are here together a couple of months after, and we already revised our outlook, our ambition for 2021. So if anything, I would say that now we are more confident than before, to see the company progressing and marching on the right track.Again, April trend, it's remarkable improving -- remarkably improving compared to the first quarter. So -- but again, we need to look at how the de-consignment of the population will happen in several parts of the world. That's an obvious statement. With that said, we know the things in which we are solid. We know that the investment and the strategy that we're putting behind our initiative is the right one, and we have full confidence that we're going to deliver on that. So that's really where we are.Probably just a quick touch on China. The -- we are several -- there are several things that we're looking at in China. I think the -- as Paul mentioned, the approach that we need to take for China, when we say, in a way, cannot be conventional. I mean, for sure, there is the expansion on the B2B and B2C side. For sure, there is a development of our e-commerce platforms through third-party platforms as well. But there are more and more things that we are exploring to very much looking at 360-degree the eye care proposition in China, which might encompass hospital, which might encompass insurance. And so we're going to be pretty disruptive.I think the myopia management lens that we launched in -- is not by chance that was launched in China.So we're going to take more and more disruptive approach to this critical country because I think that's the way we're going to have to do in order to be successful.

[Operator]

The next question comes from Julien Dormois from Exane BNP Paribas.

[Julien Dormois, Research Analyst]

3 questions on my side as well, please. So the first one, again, sorry for coming back on the 2021 guidance, but trying to approach that with a slightly different angle. Looking at the phasing of the performance throughout the year and still comparing that with 2019. So you start with a Q1 growth of about 2 percentage points. So should we expect another solid trend in Q2 and then maybe a slight weakening in the back half of the year given the tougher comps that you will be facing compared with H2 of '19? Or should we see basically just an even performance across every quarter? So that would be the first question.Second question is on e-commerce. It's more of a housekeeping question, but could you please remind us what is the share of group revenues for e-commerce in Q1? Sorry, if you said that, but I missed it. And within this e-commerce business, could you also help us detect the contribution to sales between the proprietary mono-brand website and the rest of the online activity?And the last point is you highlighted that we are obviously now at the turning point in terms of governance with the AGM at the end of this month. Just wondering whether you are planning to hold a Capital Markets Day, I don't know, in late 2021 or early 2022? That would be helpful.

[Stefano Grassi, Co]

I think on the guidance, we've been pretty explicit and clear. I mean we -- you know the fundamentals on how we build up that guidance. We know our expectation. I want to reemphasize the [ at least ] because that is very important to be emphasized. I don't think we should spend more time on that. Let's very much look at how second quarter evolved. I think if can find the progress as we see, no reason to believe that things will get better. But again, we need to see and observe.With respect to the e-commerce contribution, we're looking at the 7% contribution. Paul, I don't know if you want to comment on the governance.

[Paul du Saillant, Deputy CEO & Director]

No comment on the governance. We have the general assembly on the 21st of May. No communication yet on a CMD. If and when there would be one, I think we will more get to that after the new governance is in place, and we operate as 1 company. And then we will decide with Francesco, with the IR team if and when we call for CMD. That's where we are.

[Julien Dormois, Research Analyst]

I had to try. Just on the e-commerce as a follow-up, can you share with us what is the proportion of shares in the e-commerce business coming from the proprietary platforms from the mono-brand website? Is it -- I don't know like half, is it 2 quarters -- 2/3, what is...

[Stefano Grassi, Co]

We don't disclose that. I mean at the end of the day, we manage all the platforms. So that's really what -- how we manage the overall e-commerce.

[Operator]

The next question comes from Ashley Wallace of Bank of America.

[Ashley Wallace, Equity Analyst]

Actually I have 4 questions, if that's okay. Firstly, I was wondering if you could give a little bit more deeply into the impact of reopening in the U.S. market. While the first quarter '21 growth in the U.S. accelerated plus 6% versus 2019, which is obviously ahead of 4% year-on-year growth you did in Q4? If you compare to 2 years stack in Q1 '21 versus the 2 year stack in Q4, actually, the U.S. market decelerated about 200 to 300 basis points. So I guess, as you've gone through reopening in the U.S. market, I was wondering if you're seeing a clear acceleration on a 2-year stack in the subscription business as well as the fund business? Or has the recent improved in March mainly come from the more discretionary part of your U.S. business?And if you can maybe like mention what it is in March that has driven this acceleration and has continued into April, as you mentioned? Is it the U.S. stimulus? Or is there something else to talk to from this perspective?Staying a little bit on the U.S., sorry, this is my first question. But from a state perspective, I think the U.S., in the south, you're much further ahead in terms of reopening and a return to normal. I was just wondering in this part of the country, if you can see your business is outperforming the other U.S. states. And if so, how big is the gap, say, in the south versus the states, which to operate with some COVID restrictions or lower vaccine penetration? Just to give us a sense of how we should think about the progressive impact of reopening if other states catch up.My second question is on the synergy guidance, the $300 million to $350 million at the EBIT level for '21. Can you please give us a sense of the revenue versus cost component of the synergies for this year?My third question, sorry to rehash on this, but it's about the full year guidance for revenue and profits be at least 2019 levels. I guess when we think about the bridge in the EssilorLuxottica business in 2021 versus 2019, there should be 2 big tailwinds. The first is M&A. I guess on revenues last year, I think you had almost $100 million of revenue contribution from M&A last year. And in 2021, so far, you've already announced a number of acquisitions, including with $500 million of annual revenues. So if I'm correct, M&A loans stood about 3% to your 2021 revenues versus 2019. Then you have the synergies $350 million. At the EBIT level, obviously, it's a big proportion of 2019 EBIT.So I was wondering on the '21 guidance to be at least at 2019 level if this is also true for the underlying business, excluding the impact of M&A and synergies?And then my last question, which is really a housekeeping question on FX. Obviously, a big transition headwind in Q1. If you assume the spot rate continues for the year, can you give us help to quantify the impact of FX on 2021 EBIT, please?

[Stefano Grassi, Co]

So Ashley, there's a lot of questions into 1 question. But just generally speaking, the U.S. market, from a consumer standpoint, clearly benefited from the acceleration that we observed in the month of March. That is continuing throughout April here. Our Wholesale B2B business continues to be solid, whether we're talking about lenses, whether we're talking about frames. We continue to build up on the trust and strong relationships that we have throughout the years on both lenses and frames with our ECP, with our key accounts.We do see a market that is very vibrant, I would say, in particular, on the optical side. It's vibrant because the ECP were really the first one to reopen the doors and get and on into the business and restarting it. It's vibrant because we've seen that there is a growing demand for addressing prescription needs. And clearly, we've seen that on both the B2B first and now also on the B2C side.So I would say, again, the demand for products that have more and more features, our people are spending definitely more time in front of electronic device as they demand more coating on the lenses, it's very much there. It's happening every day and every month, we see an improvement in the penetration of certain coatings. So the market is pretty strong.We shouldn't rest on that because we believe that there's still a journey that we need to undertake that we described before, that kind of journey.With respect to the synergy guidance, I think the evenly split between revenue and cost is still valid. I think that's really where we are. We're definitely privileged in 2020, the cost aspect of that because we knew that during the pandemic outbreak, that was the part of the business in which we have more capability to influence and deliver. But now in 2021, we do see also the execution of certain revenue initiatives.Paul mentioned that the EL 360, we also have some important strategic developments, not just in North America, but also, for example, in South America, that will definitely give us more momentum. And I think we're looking at, for example, in South America, in the development of our relationship in Óticas Carol, our relationship that has been traditionally more based on frames and lenses. And now we developing and coupling lenses and frames for our Óticas Carol franchisee. We're looking at a way to think how we can make the EL 360 program.So you may remember, was launched in July last year in the United States for ECP suitable also for other geographies. And those are all the things that we're looking at. Clearly, there is the expansion of in several different geographies. Those are things that will create support also from a synergetic standpoint on the top line, not just on the cost side.Last but not least, I think it's important to mention when Paul talked about a unified group that we're now going to make the first appearance as EssilorLuxottica at the Vision Expo East in Orlando, Florida. And it's a great momentum, I believe, to celebrate that. Because it's really the first time that the company comes together in face of our clients, the Wholesale client, and it's a very, very exciting moment. And Paul, I think you you've been very much instrumental into that, so you might want to comment more.

[Paul du Saillant, Deputy CEO & Director]

No, no, you did great, Stefano. And you are right to flag that. It's -- what I could just add is, we have been operating the company together with Francesco, the 2 operative companies successfully through the pandemia in the last year-to-year. It has been quite key to have the 2 strong operative companies while we were deploying the synergies in the beginning of the integration, and our teams have been working extremely well around the 27 work stream to really start to share competency programs and deliver top line and cost synergies. And so now the 2 organizations are ready to be 1 company, and it is taking -- it's going to take the form of many different things. The Vision East event in Florida is clearly one. The EL 360 program is one, and we can -- we could name many others. But I think it's great to have stuff like that, Stefano.

[Stefano Grassi, Co]

And maybe just to probably address your last question, Ashley, with respect to FX. So I think we very much answered to all your questions here.With respect to FX, I suspect 2021 is going to be a year of headwind from a currency standpoint if the currency remain at those levels. Again, you have 2 currencies really to watch out: Brazil reals and U.S. dollar. And I think if those currencies remain at those levels, we can expect those headwinds also throughout the remainder part of the year.

[Ashley Wallace, Equity Analyst]

And, sorry, just the question on the full year guidance, sorry, I mean I missed it, but is it true that we should expect that the underlying business, excluding the impact of M&A and synergies will also be above 2019 levels?

[Stefano Grassi, Co]

The full year guidance are provided on a constant effect. So there's no impact in currency fluctuation.

[Ashley Wallace, Equity Analyst]

No, no. Sorry, sorry, this is not about currency. So just for the full year guidance, I guess, the fact that you said that you expect revenue and profit to be at least 2019 levels at constant FX. I guess the bridge between your 2019 and 2021, you have contribution from M&A and you have also contribution from synergies. I was just wondering if the underlying business, so excluding the impact of both of those factors, you're still expecting revenue and profit to be at 2019 levels.

[Paul du Saillant, Deputy CEO & Director]

The M&A impact on our guidance -- yes, Ashley, the M&A impact -- the recently announced acquisition are not part of our guidance.

[Ashley Wallace, Equity Analyst]

Not part of the guidance. Okay.

[Operator]

The next question comes from Delphine Le Louet from Societe Generale.

[Delphine Le Louet, Equity Analyst]

Very quick on my side. In terms of timing regarding the acquisition of Walman, can we see integration as soon as Q2? Or do we have to wait for Q3?Paul, you were mentioning Turkey in a couple of weeks regarding the antitrust. Is there any anything new on the antitrust in Turkey that makes you think it's going to be now weeks instead of months? You were far more vague in the annual publication.And thirdly, finally, regarding the e-commerce and especially regarding the size of the business, it would be very nice if we can add more granularity regarding the underlying business, the breakdown between lenses, Optical, Sun versus VisionCare business and as well as per region.So I know, Stefano, you don't want to say any more stuff on that, but possibly in terms of region, can we get more?

[Paul du Saillant, Deputy CEO & Director]

On the question on the closing, it's too early Delphine. We have started the antitrust process, and we are now working with SEC in the U.S. on this process. So way too early to tell you if and when it would be in the H2 or early next year if the process has started. On the antitrust on Turkey, I said it's going to be possibly in the weeks to come, and the weeks can be separate weeks. But we are confident. And I think that was on those 2 questions to be precise. And then, Stefano?

[Stefano Grassi, Co]

On the e-commerce side, yes. With respect to e-commerce, what we've seen in the first quarter is a general speak in double-digit pace across all the geographies. We've seen a strong delivery on our branded eyewear online business. We've seen a strong Ray-Ban. We've seen a very strong Oakley as well as sunglasshut.com. We also see a very solid delivery of EyeBuyDirect with an improved penetration of EssilorLuxottica frames into the brand portfolio. So I think that's really where we are.It's very reassuring. If you look at the trend of in -- of the first quarter in e-commerce, is very much a continuation of what we've seen throughout the full year 2020. So that's another reassuring message that I would say. But it's a widespread positive. And I think what is important that we shouldn't underestimate is that now we have a consistent trend in our business that is almost, let's say, neutral, in a way to what is the store retail situation in a way because we have consumer that very much appreciate our proposition online.We have continuous investment to enhance our platform, and those platforms are very much the place where consumer can compare products and customize products and can get a [ fun ] premier of some of our products and innovation. So a very good place to be in a way.

[Operator]

The next question comes from Elena Mariani of Morgan Stanley.

[Elena Mariani]

Many questions have been asked, so I'll try to be brief. I don't have much left, but 1 curiosity. I'm sure you track the industry very closely internally. And I was curious to know whether you think you've gained market share in the first quarter. So do you think the industry was growing up 2% versus 2019, and up 6% in the U.S.?And secondly, very quickly on the U.S. again. Based on your own experience, how would you expect the demand in this market to evolve in the coming months. So would you expect some sort of normalization through the year as a pent-up demand and the stimulus effect fades, so perhaps both volumes and ASP are probably going to normalize? Or do you feel that the environment is most likely to -- going to remain supportive? So what are you factoring in, in your budget?And then very quickly on Wholesale. What are you hearing from your Wholesale customers, particularly in Europe? So how should we expect the reordering process to shape out once we get out of lockdowns? So in essence, how should we think about Retail versus Wholesale performance in Q2?

[Paul du Saillant, Deputy CEO & Director]

Okay, Elena. Just very few -- you have wide questions. We think we are outperforming the industry. We think the performance of EssilorLuxottica in the first quarter is a robust performance, like Stefano and I have been sharing with you, when you look at how we are performing in the U.S., in China, in Australia, in Europe in a very complex situation still with the pandemia out there. So we think that the company, our teams are doing a very good job, and outperforming the industry.Second, I think to read the restart of reacceleration, you can refer a bit to last year what happened. We have always told you that the resilience of the need for good vision was out there. And you remember, we just said again that 3 quarters of the activity of EssilorLuxottica is linked to the need for good vision for correction, and last year, which you saw this strong rebound starting from the end of the Q2 and then into Q3.So what we see in the U.S. is encouraging, showing that resilience, the latter part of March and the month of April in Europe is encouraging in terms of seeing the order entry strengthening. So yes, we are confident of the profile.Now we have to see there is a pent-up of the demand, and there is a structural underlying need for our key categories that has been reinforced by the pandemia, like we explained in each of the call, because people need to correct more because they have been so much on their computer and laptop and phones and also need to protect from all the blue light.So the need is there, structural strengthen and some pent up. We will monitor that and see how it comes through the Q2. But the profile of last year was quite telling in itself.

[Operator]

The next question comes from James Grzinic from Jefferies.

[James Robert Grzinic, Equity Analyst]

A quick one actually for Paul. I think all of your lens competitors offer on myopia management proposition. So I was wondering whether you can help me understand in what way Stellest is superior to those offerings? Whether it's efficacy or on that 67% stack that you called it specifically, I'd be interested to understand how that stacks are relative to others?

[Paul du Saillant, Deputy CEO & Director]

It's extremely efficient lens, and the results are very, very promising. 67% is a very high number. And actually, the SightGlass Vision also results in the U.S. are very powerful. So we think we have extremely good technology for addressing that topic.But it's good that there is a -- it's a dynamic of the industry. We are happy that there is a different platform, different product offering because the need is important.So maybe we should wrap it up here. I think we -- okay. Operator, if no more question, I think Stefano and I will thank you alongside the IR team for all your operations, all your interest. You see us in a good spirit, very determined and very happy to move soon into 1 company, EssilorLuxottica, which we are already but really now moving forward in the next phase of the integration of this beautiful company in this great market.So happy about the Q1 and very determined, looking forward to the rest of the year.Thanks a lot. See you on the 30th of July for the half year results, and be safe in the meantime. Take care. Bye-bye.

[Operator]

Ladies and gentlemen, thank you for joining today's conference call. You may now disconnect your lines.