Including its franchisees' revenues and those of its own stores, the French-based Afflelou Group saw sales increase by 4.7 percent to €818.5 million for its fiscal year, ended on July 31, 2019. The network recorded its fourth year of solid growth in comparable sales, which gained 5.1 percent from the previous year.
The company ended the year with net income of €6.8 million, turning around from a net loss of €8.0 million for the previous year. Lower interest charge resulting from the group's refinancing in October 2017 and the strong results allowed the company to generate a level of cash flow that enabled it to reduce its net debt by 2.1 percent to €383.8 million.
Sales rose by 4.9 percent in France to €636.6 million, despite the negative impact of the “yellow vests” movement, and they went up by 4.8 percent on a comparable basis, thanks to successful commercial initiatives such as the Magic collection of frames. Sales of hearing aids also grew strongly.
In Spain, revenues were up by 3.0 percent to €124.5 million, and gained 5.5 percent on a comparable basis, excluding Optimil, the discount banner that the group sold last year. In the other countries where the French group operates, network sales grew by 7.2 percent to €57.4 million, with particularly strong growth in Belgium and Luxembourg. Revenues were up by 7.0 on a comparable basis.
The number of stores affiliated with the group reached 1,425 at the end of the year. The network grew in new countries with openings in Colombia and Kuwait. In the hearing aids business, the network continued to expand, with 283 points of sale at the end of the fiscal year in France, versus 240 a year before, including 81 dedicated stores and 202 corners in Alain Afflelou optical stores. In Spain, the group terminated an agreement with a master franchisee for the hearing aids business, leading to a decline of 18 stores with limited impact on sales.
The Afflelou Group reported a 6.1 percent increase in its adjusted Ebitda to €83.8 million for the year. The relatively new hearing aids business in France reached the breakeven level, while the company's directly owned stores in France and Spain improved their profitability, thanks to a strong sales performance and the closure of certain loss-making units.
The management said the coming year will bring changes in the optical and the hearing aids sectors for the group in France, with the introduction of new “100% Santé” regulations and network partnership renewals. The reform will allow French people to purchase glasses and hearing aids at no cost. Afflelou believes it is in a good position to face those challenges.