GrandVision Says Revenue Rose 7.5 Percent in Q1 as Company Prepares to Strengthen 'Digital' Capabilities

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SCHIPHOl, the Netherlands—GrandVision NV (EURONEXT: GVNV) reported Friday that its first-quarter revenue increased 7.5 percent at constant exchange rates (and 5 percent on a comparable basis) to €974 million from €913 million in the year-ago period. Acquisitions, primarily Optica2000, contributed 1.8 percent to revenue growth, while foreign exchange fluctuations, mainly driven by the strengthening of the euro against major currencies, led to a negative impact of 0.8 percent, according to the announcement from the company.

Adjusted EBITDA (before non-recurring items) increased 2.5 percent at constant exchange rates to €138 million from €136 million in last year’s first quarter. The adjusted EBITDA margin declined by 70 basis points to 14.2 percent, “mainly due to higher central expenses related to 
digital capabilities,” the company said in its announcement.

“During the first quarter, we delivered strong topline growth driven by continued momentum in almost all our markets, resulting in comparable growth of 5 percent,” chief executive officer Stephan Borchert said in the announcement. “With 3.9 percent comparable growth in the G4 segment, 5.9 percent in “Other Europe” and 7.9 percent in the Americas & Asia segment, we did not only see a strong performance in fast-growing emerging markets but, also very importantly, in our more mature markets. Particular mentions are the encouraging performance at Vision Express in the Tesco located stores, and a strong sunglass category performance and the continuing strong performance in France,” he added.

Borchert also noted that following a strategic review last year, GrandVision has increased its headcount at the central level to “strengthen our digital and supply chain capabilities resulting in higher corporate costs.” He added, “These investments are critical to achieve our ambition of turning customers into fans by providing a better digital proposition and a more relevant, modern assortment with faster delivery times.”

The company noted that revenue in its Americas & Asia segment increased 10.9 percent at constant exchange rates, with comparable growth of 7.9 percent. GrandVision said “particularly our businesses in Russia and Turkey saw an accelerated performance during the quarter, while growth in the United States and across Latin America was somewhat weaker due to higher prior year comparables.”

Adjusted EBITDA in the Americas & Asia segment decreased to €4 million in the first quarter from €7 million in the year-ago period as the “operational performance continued to be negatively impacted by our operations in the United States,” the announcement noted.

The company reaffirmed its commitment to certain medium-term objectives laid out last September, including average revenue growth target of at least 5 percent at constant exchange rates (including at least 1 percent contribution from store openings and at least 1 percent contribution from small acquisitions) and an increase of medium and large M&A to deliver additional revenue growth, while maintaining financial discipline.