Chapters
Annual Report 2020

4. Segments

An operating segment is defined as a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker (‘CODM’) to make decisions about resources to be allocated to the segment, assess its performance and for which discrete financial information is available. The CEO and CFO (the Management Board) forms the CODM. Operating segments are reported in a manner consistent with the internal reporting provided to the CODM. These operating segments were defined based on geographic markets in line with their maturity, operating characteristics, scale and market presence. The operating segments’ operating result is reviewed regularly by the Management Board – together, the CODM – which makes decisions as to the resources to be allocated to the segments and assesses their performance, based on discrete financial information available. All geographic segments are involved in the optical retail industry, and there are no other significant product lines or sources of revenue for the Group.

There has been no aggregation of operating segments into reportable segments.

The Group’s reportable segments are defined as follows:

  • G4, consisting of the Netherlands & Belgium, the United Kingdom & Ireland, France, Monaco & Luxembourg and Germany & Austria
  • Other Europe, consisting of Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Italy, Norway, Poland, Portugal, Slovakia, Spain, Sweden and Switzerland
  • Americas & Asia, consisting of Argentina, Brazil, Chile, Colombia, India, Mexico, Peru, Russia, Turkey, the United States and Uruguay

The most important measures assessed by the CODM and used to make decisions about resources to be allocated are total net revenue and adjusted EBITA. Measures of assets and liabilities by segment are not reported to the CODM.

The following table presents total net revenue and adjusted EBITA for the operating segments for 2020 and 2019. The adjusted EBITA is defined as EBITA excluding non-recurring items. Non-recurring items are defined as significant items that are not included in the performance of the segments based on their exceptional nature. For 2020 these items amount to €63 million and include expenses related to impairments of fixed assets (€33 million), to the announced acquisition of GrandVision shares by EssilorLuxottica (€23 million) and restructuring costs (€7 million). For 2019 these items amount to €63 million and are related to impairment of software (€21 million), expenses related to the announced acquisition of GrandVision shares by EssilorLuxottica (€9 million), restructuring costs (€9 million), discontinuation of activities in China (€4 million) and costs related to acquisitions and to prior year. A reconciliation from adjusted EBITA to earnings before taxes is presented within each table below. Other reconciling items represent corporate costs that are not allocated to a specific segment.

in thousands of EUR

G4

Other Europe

Americas & Asia

Other reconciling items

Total

2020

Total net revenue

2,028,271

1,103,487

349,231

-

3,480,989

Adjusted EBITA

222,044

88,798

- 1,568

- 42,894

266,380

Non-recurring items

- 63,097

Amortization and impairments (excl. software)

- 143,691

Operating income

59,592

Non-operating items:

Net financial result

- 50,360

Earnings before tax

9,232

2019

Total net revenue

2,265,947

1,268,782

504,577

-

4,039,306

Adjusted EBITA

346,922

151,990

21,707

- 45,424

475,195

Non-recurring items

- 62,632

Amortization and impairments (excl. software)

- 88,594

Operating income

323,969

Non-operating items:

Net financial result

- 49,421

Earnings before tax

274,548

The breakdown of revenue from external customers by geographical area is shown as follows:

in thousands of EUR

2020

2019

France

543,956

645,683

Germany

530,265

566,524

United Kingdom

436,584

498,665

Other countries

1,970,184

2,328,434

3,480,989

4,039,306

Revenue in the Netherlands, the Group’s country of domicile, is €278,802 (2019: €293,142). There are no customers that comprise 10% or more of revenue in any year presented.

Refer to note 5 for details on the disaggregation of the Group’s revenue from contracts with customers per reportable segment.

The breakdown of non-current assets by geographical area is shown as follows:

in thousands of EUR

31 December 2020

31 December 2019

France

612,855

635,307

Germany

395,876

382,051

Switzerland

378,971

394,733

United Kingdom

369,204

465,253

Netherlands

294,670

286,571

Other countries

1,259,049

1,457,434

3,310,625

3,621,349

The non-current assets by geographical area are disclosed based on the location of the assets. This disclosure includes all non-current assets, except for financial instruments and deferred tax assets.