Chapters
Annual Report 2019

4.2 Financial review

Summarized consolidated income statement

Pre-IFRS 16

in millions of EUR

Reported 2019

2019

% of revenue

2018

% of revenue

Revenue

4,039

4,037

100.0%

3,721

100.0%

Cost of sales and direct related expenses

- 1,110

- 1,110

-27.5%

- 1,004

-27.0%

Gross profit

2,930

2,928

72.5%

2,717

73.0%

Selling and marketing costs

- 2,028

- 2,056

-50.9%

- 1,899

-51.0%

General and administrative costs

- 578

- 579

-14.3%

- 480

-12.9%

Share of result of associates

- 1

- 1

0.0%

- 1

0.0%

Operating result

324

292

7.2%

337

9.1%

Net financial result

- 49

- 19

-0.5%

- 18

-0.5%

Result before tax

275

272

6.7%

319

8.6%

Income tax

- 79

- 79

-2.0%

- 82

-2.2%

Result for the period

195

193

4.8%

237

6.4%

Result attributable to equity holders

178

176

4.4%

216

5.8%

Result attributable to non-controlling interests

17

17

0.4%

21

0.6%

Net financial result

Net financial result increased from -€18 million in 2018 to -€49 million in 2019, which includes net interest on lease liabilities and lease receivables of €30 million following the split of occupancy costs into depreciation of right-of-use assets and interest expenses of lease liabilities as a result of IFRS 16.

Excluding this impact, our net financial result of -€19 million was broadly in line with the previous year.

Income tax

Income tax decreased from €82 million in 2018 to €79 million in 2019. The effective tax rate (ETR) increased from 25.6% to 28.9%.

The increase in the ETR is mainly resulting from the non-tax deductible impairment of goodwill in 2019. This ETR increase was partly offset by positive impacts from business restructuring which led to the recognition of deferred tax assets for unused tax credits from the past in different jurisdictions.

Net result for the period

Reported net result decreased from €237 million in 2018 to €195 million in 2019, as a higher adjusted EBITDA was more than offset by higher non-recurring items and impairment charges. GrandVision's FY19 net income increases by €2 million following the adoption of IFRS 16.

Excluding the effect of IFRS 16, our net income was €193 million in 2019.

Net result attributable to equity holders decreased by 17.7% to €178 million in 2019 from €216 million in 2018.

Earnings per share (EPS)

Adjusted EPS, which excludes non-recurring items, was €0.91 in FY19 (FY18: €0.91). EPS decreased by -17.5% to €0.70 in FY19 (FY18: €0.85).

The weighted average number of shares outstanding was 253,693,611 in FY19 (FY18: 253,702,033). On a fully diluted basis, EPS decreased by -17.5% at €0.70 in FY19 (FY18: €0.85).