Group Performance

GrandVision reports €2.8 billion Revenue and €449 million adjusted EBITDA for 2014. The company grew in revenue as well as in profit and made progress on the execution of its strategic priorities and the deployment of its global capabilities.

Global capabilities were deployed in purchasing and supply chain, sales and marketing and information technology. In purchasing and supply chain, efficiencies were achieved both in purchasing of products as well as in edging, mounting and logistics.
In the area of sales and marketing, the global rollout of the GrandVision commercial model has advanced further. Global information technology projects are under way for their first implementations during 2015.
The store network has been further optimized and expanded by means of investments in existing stores, new store openings and acquisitions. Acquisitions were done in GrandVision’s current markets such as the United Kingdom, Germany, Italy and Colombia, and also enabled the entry into new markets China, Turkey and Peru.

The implementation of the global strategic initiatives in combination with operational and financial discipline has contributed to an enhancement of GrandVision’s performance.

Revenue grew 8.5% at constant exchange rates to €2,817 million. Operating profit, measured by adjusted EBITDA (before exceptional and non-recurring items), increased with 12.3% at constant exchange rates to €449 million.

Results

in millions of EUR
(unless stated otherwise)

2014

2013

Change versus
prior year

Growth at constant currency

Organic growth

Growth from acquisitions

Revenue

2,817

2,620

7.5%

8.5%

5.7%

2.8%

Comparable growth (%)

4.3%

1.6%

270bps

Adjusted EBITDA

449

400

12.2%

12.3%

12.7%

-0.4%

Adjusted EBITDA margin (%)

16.0%

15.3%

68bps

Operating result

289

270

6.8%

Net result

175

156

12.0%

Market conditions in 2014 improved across Europe, most notably in Northwestern and Eastern Europe. Customers remained focused on value and driven by prices and promotions. Market growth in the emerging countries remained strong, despite currency devaluation and economic stagnation in some Latin American countries and Russia.

The increase in revenue was the result of comparable growth of 4.3%, the impact of store network expansion and 2.8% growth from acquisitions. The comparable growth consisted mostly of volume growth, achieved in all three regional segments and the key product categories prescription eyeglasses, contact lenses and sunglasses.

Adjusted EBITDA increased 12.3% at constant exchange rates to €449 million with 12.7% organic growth and -0.4% impact from acquisitions. The adjusted EBITDA margin increased by 68 base points to 16.0%.

Operating result improved 6.8% to €289 million, and net result 12.0% to €175 million. The operating result included exceptional and non-recurring items amounting to a total of €24 million which mainly consisted of the effects of changes to the accounting treatment of long-term incentive plans and the costs of advisors, both related to the Company’s listing on the stock market.

Net result increased faster than operating result, mainly due to lower cost of financing after the Group’s refinancing of its main credit facilities.

In several countries, such as Germany, the United Kingdom, Colombia and Italy, market positions were further strengthened through in-market consolidation. In addition, new markets Peru, Turkey and China were entered by acquiring local optical retailers in these countries. This brought the total number of countries in which GrandVision is present to 43. The acquisitions also resulted in the increase of the number of retail banners to 33.

Operational information

2014

2013

% change versus
prior year

System-wide sales (€ million)

3,145

2,927

7.5%

Number of stores

5,814

4,993

16.4%

Number of own stores

4,744

3,982

19.1%

Number of franchise stores

1,070

1,011

5.8%

Number of countries in which GrandVision is present

43

40

3

Number of retail banners

33

25

8

Number of employees (average FTE)

25,776

22,235

15.9%

The acquisitions, combined with continued organic expansion of the store network, have led to a total Group store network of 5,814 stores at year-end 2014, of which 4,744 own stores and 1,070 franchise stores.

The store base in Latin America & Asia passed the 1,000 stores mark during the year. The number of own stores grew faster than the number of franchise stores, as the acquired companies mainly operate own stores.

The average number of employees, measured in full-time equivalents (FTEs), increased by 15.9% to 25,776. This increase was also mainly driven by the increase in the number of stores from acquisitions and store openings.

System-wide sales, which reflects the retail sales of GrandVision’s own stores plus that of its franchisees, increased 7.5% to €3,145 million, again driven by the combination of comparable growth, store openings and acquisitions.

Liquidity and debt

in millions of EUR

2014

2013

change versus
prior year

Free cash flow

222

220

2

Capital expenditure

158

113

45

- Store capital expenditure

117

84

32

- Non-store capital expenditure

41

29

13

Acquisitions

233

14

219

Net debt

922

837

85

Net debt leverage (times)

2.1

2.1

0

GrandVision’s operations continued to generate solid cash flows. In 2014, free cash flow amounted to €222 million, which was slightly above 2013 despite a significant increase in capital expenditure. Capital expenditure – excluding acquisitions – reached €158 million, invested mainly in the ongoing optimization and expansion of the store network. Non-store capital expenditure increased as well, mainly as a result of investments related to global IT projects and investments in the development of the regional tech-center structure. The cash outflow related to acquisitions in 2014 of €233 million was largely financed from free cash flow. As a result net debt increased from €837 million to €922 million with year-end net debt leverage remaining below 2.1 times adjusted EBITDA. Finally, in the fourth quarter of 2014 GrandVision substantially completed the preparations for the launch of its Initial Public Offering. In early 2015, GrandVision BV was converted to GrandVision N.V. and the number of shares outstanding increased from 12,722,187 (31 December 2014) to 254,443,840. Subsequently, the Initial Public Offering was launched in January 2015 and successfully completed with a listing on Euronext Amsterdam and the start of trading in GrandVision shares on 6 February 2015.