The information on “Directly generated and distributed economic value” permits a different interpretation of the economic figures and demonstrates Luxottica’s ability to generate wealth and distribute it to its stakeholders, representing the link between economic and financial data and non-financial information. The table below outlines the overall economic value generated by the Group’s ordinary operations during the year and its breakdown in terms of the economic value distributed to its various stakeholders and the economic value retained within the organization28.
|Economic value generated||9,175,490||9,101,174|
|Employee wages and benefits||2,701,229||2,661,098|
|Shareholders and providers of capital||547,441||509,249|
|Community investments (support for social, cultural and sports projects and partnerships with universities)||13,240||10,813|
|Economic value distributed||8,208,293||8,197,006|
|Economic value retained||967,197||904,168|
In 2017, the economic value generated, represented by net sales and financial income, came to Euro 9,175.5 million, an increase of 0.8%. The value generated was distributed to the Group’s various internal and external stakeholders in the following ways:
- operating expenses towards suppliers of goods and services; employee wages and benefits;
- distribution of dividends to shareholders and interest payments on loans;
- income tax, distributed to the public authorities;
- support for social, cultural and sports projects and partnerships with universities in the reference communities.
In 2017, the overall economic value distributed by the Group came to Euro 8,208.3 million, as compared with Euro 8,197.0 million in 2016.
In 2017, the resources retained for the long-term development and growth of the Group came to Euro 967.2 million, as compared with Euro 904.2 million in 2016, and are mainly represented by the items related to amortization expenses, the net income not distributed through dividends and the effect of deferred taxation.
ECONOMIC VALUE DISTRIBUTED: THE EXCLUSIVE RELATIONSHIP WITH THE COMMUNITIES
An analysis of the individual items that make up the economic value distributed makes it possible to quantify Luxottica’s contribution to the well-being of its employees, to the economic and social progress of the communities in which it operates and to the promotion of the territory.
The growth in the economic value distributed to suppliers, which amounted to Euro 4,601.8 million in 2017, and to employees, which came to Euro 2,701.2 million, can be attributed, on one hand, to higher operating expenses in support of the growth of the business. This is counterbalanced by the organizational streamlining initiatives that the Group pursued in 2016-2017 to speed up decision making and the implementation of strategies, as well as to improve the efficiency and integration of the various business areas. These included:
- the simplification of the entire organization, with the centralization of key functions and activities at Group headquarters in Milan, such as defining pricing, management of assortments, visual merchandising and real estate activities involving the Group’s stores around the world;
- the radical review of the distribution model in the Chinese market, increasingly oriented towards sales to the end consumer through the retail and e-commerce channels;
- the integration of various business areas, including the Oakley business in the sports channel, and the creation, in the Milan headquarters, of a team of around 70 people dedicated to the Group’s e-commerce platforms.
The economic value distributed by means of wages and benefits to its employees came to 33% of the economic value distributed, in line with the previous year.
The economic value distributed to shareholders and providers of capital came to Euro 547.4 million, as compared with Euro 509.2 million in 2016, mainly due to the higher dividends distributed in 2017. The economic value distributed to the public authorities in the form of taxes came to Euro 344.6 million in 2017, as compared with Euro 460.2 million in 2016, a 25% reduction also due to the effects of the fiscal benefit deriving from the Patent Box mainly attributable, for Euro 102.8 million, to the parent company Luxottica Group S.p.A.
Over the years, Luxottica has built valuable relationships with local communities where it operates, driven by a strong sense of responsibility and corporate citizenship. This commitment is expressed in its support of economic, social and cultural development and the creation of new opportunities for the territory.
The year 2017, therefore, represented an opportunity to introduce a process for organizing and measuring these initiatives and this led to the quantification of the investments made to support the local communities. These amounted to Euro 13.2 million in 2017, an increase of 22% compared with 2016. The most significant initiatives are outlined below:
- the Luxottica welfare system, which since 2009 has involved not only employees but also their families and the community with initiatives ranging from educational support and healthcare to sustainable transport and a series of other services that meet people’s needs in an innovative and tangible way;
- initiatives designed to offer access to quality eyecare and eyewear for less developed communities in the world. Examples include the over 90 Sustainable Vision Centers opened since 2013 in Africa, China, India, South-East Asia and the US by OneSight, an independent non-profit organization of which Luxottica is the founding sponsor, and the two weeks of free eye exams at a number of important accommodation facilities in Milan in parallel with World Sight Day;
- initiatives to promote and protect cultural, social and environmental heritage that embodies “made in Italy”, the Group’s most distinctive value and evident in all “made in Luxottica” products and services. “Made in Italy” encompasses the same values of awareness and passion for aesthetics and culture that Luxottica undertakes to support through:
- the promotion of some of Italy’s finest landmarks, such as the Teatro alla Scala in Milan, which it has supported since 2016, and the Ponte dell’Accademia in Venice, whose restoration it is financing;
- the organization, through the Alain Mikli brand, of tactile exhibitions at the Quai Branly - Jacques Chirac museum in Paris, which has made art accessible to people with visual disabilities since 2010;
- the Persol brand’s partnership with the world’s most important film festivals, including the Venice Film Festival, the Nastri d’Argento film award in Taormina and the Cannes Festival, the last edition of which, in 2017, saw the celebration of the 100th anniversary of the brand together with amfAR, one of the most important non-profit organizations involved in supporting AIDS research. Together with Rai Cinema, Luxottica is also a partner in the “Giorgio Armani Films of City Frames” initiative, the third edition of which was held in 2017;
- projects with universities in Italy and optometry schools in the US, including:
- Bocconi University in Milan, which it has partnered with since 2014 to provide economic support to the most deserving students, for example by supporting three international study programs;
- the creation and award, in 2017, of 20 “Luxottica Eye Care Optometric” study grants of USD 5,000 each to contribute to the university expenses of 20 optometry students identified in collaboration with the American Optometry Student Association in the US and Canada;
- the “eyeFWD” training initiative, five days of training at the Luxottica premises in Cincinnati dedicated to 30 select optometry students in North America;
- the opportunity for 25 optometry students to accompany optometrists and Group volunteers to the #VisionEmpowers eye clinic organized by OneSight in Tanzania;
- support for Valore D, the association of Italian businesses that Luxottica helped to create in 2009 to promote diversity, female talent and leadership;
- economic support for emergency situations such as the earthquakes that struck Central Italy in 2016 and the hurricanes in the US in 2017, detailed below:
- contribution to the “Action in favor of the people of central Italy affected by the earthquake” fund launched by Confindustria and the trade unions through the donation of one or more hours of work by employees from the Group Italian offices, which Luxottica then doubled for a total donation of over Euro 102,000;
- the creation of a “Guardian Angel” fund by the Retail division to assist employees located in the areas affected by the hurricanes in the US;
- other initiatives aimed at local communities, from awareness campaigns on eyecare to collaboration with foundations active in developing countries:
- Luxottica is one of the main supporters of “Think About Your Eyes”, an advertising campaign on the importance of getting a comprehensive eye exam, which launched in the US in 2010 together with The Vision Council, The American Optometrist Association and other partners;
- support, through the Indian subsidiary, for the projects of Sightsavers, an international non-profit organization that seeks to prevent and eliminate blindness in developing countries, in rural areas of India;
- participation, through Oakley, in the #BicyclesChangeLives initiative promoted in 2017 by Qhubeka, the foundation of South African cycling team Dimension Data, with the aim of giving as many bicycles as possible to adults and children that live in rural areas of South Africa.
28. The calculation method suggested by Disclosure 201-1 of the GRI Standards was used