Chapters
Annual Report 2018

Focus area 2: Enhancing socio-economic development

At GrandVision we aim to create societal value beyond our local retail activities and for the different stakeholder groups in our value chain. On the one hand, we give our employees the opportunity for personal development. On the other, we contribute to the communities in which we operate through responsible tax strategies and corporate citizenship programs. These contributions support educational and economic development, social participation and welfare.

2.1. By enabling employees to develop professionally

Our passion to provide customers with the best possible service and quality in eye care is enabled by the excellence of our people.

Our HR strategy is designed to attract and nurture a passion for eye care and foster professional growth. We continuously invest in developing the expertise and capabilities of our people so they can fulfil their true potential and pursue a rewarding career. Employee satisfaction is equally important to us as customer satisfaction, and as such, is continuously measured and improved.

This approach distinguishes us every day, across our stores, our TechCenters and our retail support functions.

The GrandVision Academy

GrandVision Academy (GV Academy) is our international center of excellence for continuous learning and development for all employees. Its framework applies a blended learning approach comprising e-learning, classroom lessons and on-the-job training. In addition, an integrated Learning Management System (LMS) facilitates the sharing of best practices and adapts content to local needs and circumstances. Although varied according to specific requirements, the content targets all commercial and retail staff and includes training on retail, optical, sunglass and contact lenses expertise, customer journey, and a specific curriculum on store management.

The learning modules are continuously updated based on customer behavior, new store concepts, market trends and product development.

GV Academy's training programs are concentrated around three main topics:

  • Strategic, e.g. digital empowerment
  • Local business needs
  • Global business needs, e.g. leadership development

Each training topic has its own specific KPIs and targets, and our global HR team is responsible for following up on each of them. There is also an overarching global program, which is a structured learning approach that applies to all store employees and is split into three levels; Bronze, Silver and Gold. 

All store employee must pass the Bronze level (1st level) within six months of joining the company. This means they fulfil GrandVision’s entry requirements. Subsequently, it is up to each employee's professional ambitions and the specific needs of the business, if they also cover the Silver and Gold levels. 100% of employees have attained Bronze level.

2018: training in hours

The total training hours dedicated to our employees and their split by function is a reflection of the strategic and local/global needs of the business.

We provided over 546,070 hours of training in 2018, which is 8% more than in 2017. On a global level, we deployed an average of 16.9 training hours per FTE. Store managers and store employees generally receive more training hours than non-store employees, due to their daily contact with customers. In 2018, store managers received 24.4 hours of training (on average) while other store employees had around14 hours. This is in line with GrandVision's store network optimization strategy and supports our integration of Tesco Optician in the UK and Ireland, which we acquired in 2017.

Global learning concept

As of today, the GV Academy has been successfully implemented in almost all 40+ GrandVision countries, based on their respective requirements. We have been able to scale up this concept while maintaining the high quality of the program due to its standardized set-up. To increase online and international connectedness, we have set up an international collaboration tool enabling users to quickly onboard to the system, learn about its features and connect easily with colleagues around the world.

In 2018, we distributed e-learning packages and classroom training materials to all GrandVision countries so they can choose the best training option based on their local needs. We also successfully rolled out the Silver module, which is the next step after Bronze certification.

Digitally empowering our employees

Our goal for 2019 is to digitally empower our store staff by providing them with a GV Academy mobile learning application, thus giving more learning flexibility. A minimum viable product (MVP) pilot will take place in selected countries at the start of 2019.

Promoting international careers

As a global company, we recognize the benefits of international mobility among employees. Our global mobility policy is targeted at exchanging best practices between operating units, expanding GrandVision's culture and at the same time training and preparing our future leaders.

The GrandVision mobility policy is constantly benchmarked against international best practices and consists of three main types of moves:

  • Long-term assignments, typically between 3 to 5 years, mainly used for career development, green field operations or to backfill key positions
  • Short-term assignments, that usually last 3 to 12 months on a project basis
  • Hiring of people from abroad that permanently transfer to another country

In 2018, we had around 30 permanent hires of people from abroad and 10 employees on short or long-term assignments.

For 2019, we plan to facilitate the mutual exchange of operational experience between our operating companies and our Headquarters at Schiphol, the Netherlands.

Employees from our central office, will be sent on short assignments, increasing their understanding of local contexts in order to ensure more effective and efficient collaboration, while personnel from operating companies will move to the Headquarters.

We also plan to combine our internal talent management processes with our global mobility practice to secure the future of our international company through our talent.

2.2. By pursuing a transparent and responsible tax strategy

GrandVision pursues a transparent and responsible tax strategy across all countries in which it is present.

Our tax strategy is in line with our corporate values and ambition which includes enhancing socio-economic development in the communities we operate in and delivering a positive impact in a sustainable and ethical way. Additionally, it aligns the long-term interests of all stakeholders, including shareholders, governments and communities. We do this by embedding tax implications in business processes where and when they originate. Even the smallest shifts in the way the business operates, whether it be in new products, services, digitalization or use of technology, can have implications on our national and international tax positions. Our tax strategy is designed to navigate these complexities and ensure we pay the right amount of tax and comply with all legislations.

Our tax strategy is created with input from a dialogue with our wide variety of stakeholders. For instance, how we communicate about our tax affairs is further shaped by societal demands for transparency. We are progressing on the execution of our tax strategy through the development of the GV Tax network and by further tax-enhancing company systems such as Enterprise Resource Planning (ERP) and other technologies. GrandVision’s tax strategy is supported by a Tax Control Framework that allows us to effectively manage and control our tax positions.

We report on our tax risks and the execution of the tax strategy to the Audit Committee and the Supervisory Board. Our Audit Committee is also the governance body that is ultimately responsible for approving GrandVision’s tax strategy.

The principles of our tax strategy are as follows:
  • Be compliant at all times
  • Pay the right amount of taxes across the value chain in the jurisdictions in which we are present and where value is created
  • Reflect tax implications from business activity accurately in company records in real time at an entity level

Tax Control Framework

Compliance with tax regulations is ensured through GrandVision’s Tax Control Framework. The Tax Control Framework enables us to effectively monitor, control and manage group-wide tax positions. It creates awareness of possible tax exposures and enables us to report our tax positions and, for instance, effectively comply with country-by-country obligations.

GrandVision strives to maintain strong working relations with tax authorities. In countries where it is possible, this is done through collaborative working (horizontal monitoring) arrangements. For example, we collaborate on continuous basis with tax authorities in the Netherlands and the UK, among others. Furthermore, our Tax Control Framework enables the GrandVision global tax network to monitor and manage KPIs such the timely and correct filing of VAT, Transfer Pricing obligations, country-by-country reporting regulations, the effective tax rate (ETR) and our position in tax transparency benchmarks.

The Tax Control Framework is also covered by the work of the independent Internal Audit function, which provides assurance and validation of the overall internal control frameworks.

Our contribution to socio-economic development

The taxes we pay contribute to socio-economic development. In 2018, GrandVision reported €82 million in current and deferred income tax, which is a 18% reduction compared to the previous year. The reduction is mainly related to one off impact in deferred tax accounting while our current tax position increased.

To have insight into our relative tax contributions, we use the effective tax rate (ETR), an indicator that divides income tax by total pre-tax results. In 2018, our ETR decreased from 28.9% to 25.6%. This improvement is mainly driven by the aforementioned impact in deferred tax accounting positions.

In addition to income tax, GrandVision generates funds for communities through other taxes and levies such as VAT, local taxes and employee taxes.

2015

2016

2017

2018

Total Income Tax in EUR

103,021

95,775

101,055

81,672

of which income taxes segment G4

83,468

77,116

72,494

61,190

of which income taxes segment Other Europe

19,865

17,528

16,656

11,743

of which income taxes segment Americas & Asia

1,530

-3,188

7,080

5,506

of which income taxes corporate

-1,842

4,319

4,825

3,233

2015

2016

2017

2018

Effective tax rate (income tax as percentage of pre-tax results)

30.8%

27.5%

28.9%

25.6%

GrandVision's four tax pillars

Tax risks

As an international company, operating throughout 40+ countries, GrandVision has exposure to a variety of tax risks and uncertain tax positions.

Our Tax Control Framework allows us to keep real time up-to-date insights into these tax risks.

In 2018, the company reviewed its tax risks management cycles. This covered the whole spectrum, starting with risk identification, and ultimately leading to uncertain tax positions in financial reporting and reporting to the Supervisory Board and Audit Committee. The review resulted in amendments and improvements to the existing internal procedures and the consistency and accuracy of our tax approach across jurisdictions.

Due to the nature of our core retail business and our international profile, the key tax risks and uncertainties may arise in the areas of indirect taxes such as VAT and taxes and levies in the scope of cross-border transactions.

2.3. Through our Corporate Citizenship and Community Involvement initiatives

GrandVision ensures that an increasing number of people around the world have access to the eye care and vision correction they need. We encourage our customers and employees to participate in the charitable initiatives we support beyond our core retail activities.

Provide access to eye care

Through our Corporate Citizenship initiatives we aim to improve the quality of life of people with limited access to eye care. We empower local communities with knowledge and services, thus impacting the lives of disadvantaged communities, such as those living in the global South, but also the homeless and disabled. In recent years, our local banners have conducted thousands of free eye exams and donated spectacles or

financial capital to fund solutions to meet local eye care needs.

To broaden the impact of our Corporate Citizenship initiatives, our retail banners operate many partnerships and collaborations worldwide with highly respected Non-Governmental Organizations that share our ambition and values. These collaborations enable us to engage more people and impact more livelihoods at a global level. Several of these initiatives have required our volunteers from various retail banners to travel abroad to the Congo, Ghana and Peru (among others). During these missions, our opticians have carried out eye exams for people in need and distributed second-hand glasses to economically disadvantaged communities.

Community involvement initiatives: enhance eye care awareness

With our Community Involvement initiatives, we aim to create and increase awareness on specific eye care needs in the markets in which we are active.

Initiatives vary widely, from providing free eye tests to car drivers, to campaigns to raise awareness of macular degeneration or retinoblastoma. Our local banners participate in regional or national health and safety campaigns or cooperate with medical and charitable organizations or research institutes with an expertise in eye care. These include, among others, the Macular Society and Childhood Eye Care Cancer Trust in the UK, Solived in France, the Salvation Army in Brazil and the US, and Ophthalmology Worldwide in Belgium.

A good example are our driver awareness campaigns in Italy, Germany and the UK, which inform and educate about the importance of good vision while driving.

Furthermore, this year GrandVision HQ and all banners around the world supported the World Sight Day on 11 October under the slogan "Eye care everywhere" [read more in the dedicated case study: 2018 World Sight Day].