Chapters
Annual Report 2018

5. 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 & 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, China, 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 EBITDA. Measures of assets and liabilities by segment are not reported to the CODM.

The following table presents total net revenue and adjusted EBITDA for the operating segments for 2018 and 2017. The adjusted EBITDA is defined as EBITDA excluding other reconciling items and exceptional 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 2018 these items are mainly related to restructuring, legal provisions, VAT risks, software impairment as well as corrections related to prior years. For 2017 these items mainly relate to some exceptional acquisition related costs, integration activities and software impairment. A reconciliation from adjusted EBITDA 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

Total

2018

Total net revenue

2,131,381

1,130,209

459,386

3,720,976

Adjusted EBITDA

411,473

175,641

19,836

606,950

Other reconciling items

- 30,527

Total adjusted EBITDA

576,423

Non-recurring items

- 19,847

Depreciation

- 123,175

Amortization and impairments

- 96,077

Operating income/loss

337,324

Non-operating items:

Net financial result

- 18,356

Earnings before tax

318,968

2017

Total net revenue

1,980,726

990,188

478,943

3,449,857

Adjusted EBITDA

418,254

157,376

10,777

586,407

Other reconciling items

- 34,895

Total adjusted EBITDA

551,512

Non-recurring items

- 17,475

Depreciation

- 116,587

Amortization and impairments

- 90,672

Operating income/loss

326,778

Non-operating items:

Fair value gain on remeasurement of Associate

37,949

Net financial result

- 14,705

Earnings before tax

350,022

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

in thousands of EUR

2018

2017

France

616,568

596,549

Germany

527,012

487,542

United Kingdom

477,465

398,890

Other countries

2,099,931

1,966,876

3,720,976

3,449,857

Revenue in the Netherlands, the Group’s country of domicile, is €250,449 (2017: €252,501). There are no customers that comprise 10% or more of revenue in any year presented.

Refer to note 6 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 2018

31 December 2017

France

500,209

498,160

United Kingdom

282,895

280,325

Switzerland

221,673

222,210

The Netherlands

164,761

158,477

Other countries

1,012,991

1,029,235

2,182,529

2,188,407

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