Chapters
Annual Report 2020

4.1 Group performance

in millions of EUR
(unless stated otherwise)

2020

2019

Change
versus
prior year

Change at constant FX

Organic
growth

Growth from acquisitions

Revenue

3,481

4,039

-13.8%

-12.2%

-13.7%

1.4%

Comparable growth (%)

-14.1%

4.1%

Adjusted EBITA

266

475

-43.9%

-43.1%

-44.2%

1.1%

Adjusted EBITA margin (%)

7.7%

11.8%

-411bps

Net result

- 45

195

Net result attributable to equity holders

- 67

178

Adjusted earnings per share, basic (in €)

- 0.07

0.91

Earnings per share, basic (in €)

- 0.26

0.70

Number of stores (#)

7,260

7,406

System wide sales

3,818

4,407

Operational highlights

Long-term demographic trends such as consumers' increasing need for eyecare around the world as well as attention to value, quality and fashion continued to support the growth of eyecare demand in 2020. Also, an increased focus on an omnichannel customer journey, contributed to the underlying good performance of GrandVision in this challenging year. Our resilience was demonstrated during the COVID-19 pandemic.

As soon as the potential impact of COVID-19 pandemic for our territories became apparent, we operated under three priorities: Care, Cash, Continuity. We successfully focused on our people, customers, stakeholders and GrandVision's financial health thanks to our thorough scenario-planning and established a central Task Force to ensure clarity of communication and effective execution were vital drivers of this success. Our swiftly crafted business continuity plans, highly motivated and resilient teams and strong operational performance in each of our 7,260 stores and support offices enabled us to mitigate the effects of COVID-19.

The temporary store closures during the first half of 2020, as well as an overall reduction in retail store footfall through the entire year, resulted in GrandVision's revenue to decline by 12.2% compared with the same period a year ago at constant exchange rates and a comparable decrease of 14.1%.

Throughout the course of the year, the benefits of our sustained investments in our digital capabilities were clearly seen in our performance. Total e-commerce sales grew 85%, while e-commerce sales generated by our retail brands more than doubled compared to the prior year.

During 2020, we also focused on successfully integrating the acquisitions we made in 2019. We successfully integrated McOptic and Óptica2000 into our business.

The excellent business integration of McOptic in Switzerland exceeded expectations, positively contributing to the segment's profit. In total, these acquisitions added 1.4% to our overall revenue growth and 1.1% to EBITA growth.

System-wide sales, which reflect the retail sales of GrandVision’s own stores as well as our franchisees, decreased at the same level by 13.4% to EUR 3,818 million (FY19: EUR 4,407 million).

Our performance varied significantly through the months after the outbreak in March 2020, with a strong recovery in 3Q as restrictions were lifted. Our business continuity plans and operational excellence based on the fundamentals of our long-term strategic initiatives enabled us to partially mitigate the effects of the COVID-19 pandemic and continue to meet our customers' critical needs. By rapidly adapting to the changing environment, we managed to partially mitigate the dramatic decline in customer traffic through higher conversion and intensified online activities. We were also aided by short-term government support in some countries.

In the third quarter, we were able to drive a strong recovery to pre-COVID-19 pandemic levels as restrictions were lifted and more than 90% of our store network gradually reopened. While we continued to see customer traffic below prior levels in this quarter, we successfully managed to partially compensate this by higher customer conversion in store.

Towards the end of the year, the second wave impact resulted in a slowdown of the recovery we managed to achieve in 3Q and 4Q 2020.

As a result, GrandVision's EBITA declined by 43.1%, compared with the same period a year ago at constant exchange rates to EUR 266 million (FY19: EUR 475 million).

Store network development

2020

2019

Number of stores

7,260

7,406

Number of own stores

6,119

6,226

Number of franchise stores

1,141

1,180

Number of countries in which GrandVision is present

43

43

Number of retail brands

30+

30+

Number of employees (average FTE)

33,542

34,143

GrandVision's store base decreased in 2020 to 7,260. Despite the COVID-19 pandemic, store openings continued at a significant pace as we opened 187 stores across the network. As in previous years, we continued to assess our store network’s quality, resulting in the closure of structurally underperforming stores, mainly in the Americas & Asia segment. The network was also impacted by closures in India and Italy and the exit of operations in China, in addition to the absence of any significant network-contributing acquisitions in the period.

Out of the total network of 6,119 stores, or 84%, were our own and 1,141 were franchises.

Although customer traffic remained below pre-COVID-19 pandemic levels, the increase of online appointment bookings and a higher purchase intent drove higher customer conversion in our stores. Our stores' convenient locations played a key role in satisfying customer behaviors and needs.

Store network development

In the G4 segment there was a slight net increase of the store base with 5 stores, driven mainly by openings and few store acquisitions in Belgium, The Netherlands, France and Germany, increasing our network by 75 stores being partially offset by store closures. During 2020, the Other Europe and Americas & Asia segments had more closures than openings. The closures in these segments reflect the store network rationalization due to the anticipated turnaround plans. The Other Europe segment had 45 store openings, while Americas & Asia opened 74 new stores that were fairly spread out among the subregions of Latin America, the U.S. and Asia.

Stores by segment

Revenue development

in millions of EUR
(unless stated otherwise)

2020

2019

Change
versus
prior year

Change at
constant FX

Organic
growth

Growth from acquisitions

G4

2,028

2,266

-10.5%

-10.3%

-11.1%

0.8%

Other Europe

1,103

1269

-13.0%

-12.4%

-15.6%

3.1%

Americas & Asia

349

505

-30.8%

-20.4%

-20.4%

0.0%

Total

3,481

4,039

-13.8%

-12.2%

-13.7%

1.4%

For the full year 2020, revenue decreased by 12.2% at constant exchange rates to EUR 3,481 million (FY19: EUR 4,039 million) or 13.8% at reported rates, including negative currency translation effects of approximately EUR 64 million, primarily due to the depreciation of the Turkish lira and Latin American currencies.

Comparable revenue declined during the period by 14.1%, which was driven by COVID-19 pandemic-related temporary store closures in the first half of 2020 and an overall reduction in footfall in the year.

In 2020, total e-commerce sales grew 85%, while e-commerce sales generated by our retail brands more than doubled compared to the prior year. Acquisitions made in 2019, including Óptica2000 in Spain and McOptic in Switzerland, continued to have a positive impact in 2020, adding 1.4% to our revenue growth.

GrandVision's core continental European markets saw the greatest resilience with low- to mid-single-digit comparable revenue declines on the back of strong commercial execution and e-commerce sales, specifically in the Benelux, Germany, Austria, and Denmark markets.

Revenue benefitted from a mix shift to higher value optical product sales, primarily in the second half of the year. During 2020, the sunglasses category showed weak performance.

System-wide sales, which reflects the retail sales of GrandVision’s own stores plus that of its franchisees, decreased by 13.4% to EUR 3,818 million (FY19: EUR 4,407 million).

Revenue in € million
Comparable growth
2020 Revenue by segment in € million

Adjusted EBITA development

in millions of EUR
(unless stated otherwise)

2020

2019

Change
versus
prior year

Change at
constant FX

Organic growth

Growth from acquisitions

G4

222

347

-36.0%

-36.0%

-36.9%

0.9%

Other Europe

89

152

-41.6%

-40.7%

-42.0%

1.3%

Americas & Asia

- 2

22

-107.2%

-95.0%

-95.0%

0.0%

Other reconciling items

- 43

- 45

5.6%

5.0%

5.0%

0.0%

Total

266

475

-43.9%

-43.1%

-44.2%

1.1%

Reported adjusted EBITA decreased from EUR 475 million in 2019 to EUR 266 million, or 43.1% at constant exchange rates with a positive contribution of 1.1% from acquisitions made in 2019, including Óptica2000 in Spain and McOptic in Switzerland.

Efficiency gains, including those from turnaround plans initiated before the COVID-19 pandemic, partly offset the challenges we saw in 2020. Turnaround programs focused on structurally improving profitability in certain countries that were previously lagging versus more mature operations mainly in the U.K., the U.S. and Italy. The turnaround plans included the staffing and efficiency of stores, headquarter operations, optimizing the commercial proposition and making necessary changes to local management teams.

Other reconciling items, which primarily consist of corporate costs not allocated to specific segments, were EUR 43 million in FY20, slightly below FY19. The items mainly relate to corporate costs that are not allocated to a specific segment, such as central strategic investments in our omnichannel capabilities.

Adjusted EBITA in € million
Adjusted EBITA margin

in millions of EUR
(unless stated otherwise)

2020

2019

Change
versus
prior year

G4

10.9%

15.3%

-436bps

Other Europe

8.0%

12.0%

-393bps

Americas & Asia

-0.4%

4.3%

-475bps

Total

7.7%

11.8%

-411bps

The adjusted EBITA margin decreased by 411bps to 7.7% due to the impact of temporary store closures in the first half of the year. The impact of the COVID-19 pandemic on profitability was partially offset by strong commercial execution, as well as short-term government support in some countries.

Reconciliation of Adjusted EBITA, EBITA and Operating Result

in millions of EUR

2020

% of revenue

2019

% of revenue

Adjusted EBITA

266

7.7%

475

11.8%

Non-recurring items

-63

-1.8%

-63

-1.6%

EBITA

203

5.8%

413

10.2%

Amortization & impairments

-144

-4.1%

-89

-2.2%

Operating result

60

1.7%

324

8.0%

Non-recurring items of EUR 63 million include expenses related to impairments of fixed assets (EUR 33 million), to the announced acquisition of GrandVision shares by EssilorLuxottica (EUR 23 million) and turnaround related costs (EUR 7 million).

EBITA decreased from EUR 413 million in 2019, to EUR 203 million due to the strong negative impact of the COVID-19 pandemic in the first half of 2020.

Amortization and Impairments increased from EUR -89 million in 2019 to EUR -144 million, mainly due to goodwill impairment charges booked in 1H 2020 in the U.S., Italy, Peru and Colombia, which were triggered by the significant impact of the COVID-19 pandemic on our business performance in these markets, and an additional impairment charge mainly related to customer databases in the U.K.

Operating result (EBIT) decreased from EUR 324 million in 2019 to EUR 60 million, reflecting the decrease at EBITA level as well as higher impairment charges.