SCHIPHOL, The Netherlands—GrandVision N.V.
, (EURONEXT: GVNV) which operates major international optical retail businesses, including For Eyes (in the U.S.), reported first half overall growth of 11.8 percent at constant exchange rates and overall comparable growth of 2.8 percent for the first six months of its fiscal year. Management cited a “cautiously optimistic” outlook for Europe, with strong sales in Germany, positive results in Mexico, Russia and Turkey for a strong performance in its Americas & Asia segment of business, noting a reduction in losses in its retail business in the U.S. (For Eyes) for the period. The company also reported that its omni-channel business through many of its global retail business are “gaining traction.”
Overall revenues reached €1,874 million for the first six months ending June 30, compared to revenues of €1,721 million in the same period a year prior. Adjusted EBITDA was up 8.0 percent at constant exchange rates to €293 million (compared to €276 million for the first half of 2017.)
GrandVision’s global store network remained at around 7,000 stores since year-end 2017 as openings of 163 new stores were offset by store closings.
Stephan Borchert, GrandVision's CEO said, "We are pleased with the progress we have made so far this year, resulting in an accelerated level of comparable growth compared to the previous year. The G4 segment has returned to growth driven by strong performance in Germany and a recovery in France. Although the French market continued to decline, we have accelerated our market share gains and achieved 1.3 percent comparable growth during the first half of the year. Despite these good developments, we remain cautiously optimistic in the short term until the changes to the reimbursement schemes are fully annualized. Nevertheless, our recent performance demonstrates the resilience of our business model, especially in an environment where further changes are likely to be implemented.”
He noted good progress in the Americas & Asia segment of the group, by accelerating organic revenue growth. The company’s financial presentation reported a reduction in losses by €6.8 million in the U.S. A strong operating performance of the group’s businesses in Mexico, Russia and Turkey helped the group enhance its adjusted EBITDA margin for the segment.
In the first half, the company also integrated and rebranded its newly acquired Tesco Opticians business in the U.K. He stated, “The rebranding process was finished in June and we are seeing a significant improvement of profitability of the rebranded stores. For the full year, we remain confident in achieving our objective of revenue and adjusted EBITDA growth of high single digits at constant exchange rates.”
Borchert also emphasized, “One of our most important strategic objectives is to accelerate our omni-channel readiness, including the stronger drive of e-commerce sales. Investments in our online appointment booking tools have led to an increase of bookings by more than 80 percent in the second quarter, and website visits are up by almost 40 percent. This increase in online conversion has shown first positive effects on comparable growth in many parts of the group.”
He said GrandVision's medium term financial objectives are to achieve annual revenue growth of at least 5 percent, excluding large scale acquisitions, as well as high single digit annual adjusted EBITDA growth at constant exchange rates. “The targeted net debt/adjusted EBITDA ratio remains at a maximum of 2.0x and we expect our cash flow generation to enable us to make further acquisitions without significantly altering our capital structure.”
For 2018, GrandVision expects improved revenue and adjusted EBITDA growth. Revenue growth is expected to benefit from comparable growth and the addition of the Visilab and Tesco Opticians businesses, leading to high single digit revenue growth for the full year. GrandVision expects adjusted EBITDA growth in line with revenue growth, supported by lower integration costs in the U.S. and the continued implementation of our global capabilities and efficiencies.”
GrandVision is present in more than 40 different countries, delivering optical services, products and sunglasses through a portfolio of optical retail banners including Grand Optical, Vision Express, MultiOpticas, Apollo Optik, For Eyes, Interoptik, Visilab and many others.