Fielmann Consolidated Income Statement
('000 Euros, Three months ended March 31)
Other Operating Income
Cost of Goods
Other Operating Expense
Fielmann has presented its annual report for 2011, reporting an increase in its pre-tax income of 1.6 percent to €172.9 million. Its consolidated sales rose by 6 percent to €1.053 billion, with a volume increase of 4.3 percent to 6,740,000 pairs of glasses.
The net income grew by 3.4 percent to €125 million. Cash flow decreased from €145 million in 2010 to €132 million in 2011, a decline of 8.9 percent. The group's equity ratio was 61.4 percent, almost the same as in the previous year's ratio of 61.8 percent. Fielmann invested €38.4 million in 2011, compared with €39 million in 2010 and €41 million in 2009.
The company had 663 stores at the end of the last year, up from 655 at the end of 2010. It operated 32 branches in Switzerland, where one new Fielmann store opened in Neuchâtel in 2011. Fielmann has 31 branches in Austria, 19 in Poland, three in the Netherlands and two in Luxembourg.
Fielmann plans to expand in southern Germany and open up 130 new branches. In the medium term, Fielmann aims to operate 700 branches in Germany, selling more than 6.5 million glasses per year for sales of €1.3 billion. In Austria, Fielmann plans to open nine new branches in the medium term, selling more than 450,000 pairs of glasses and reaching sales of €85 million. The company is further expanding in Poland with a medium-term goal of a total of 40 stores. Fielmann is not considering further expansion in the Ukraine and Belarus, due to the difficult political situation. In the Baltic states, the company works with a franchise partner.
Fielmann implemented 28 renovations and reconstructions in 2011, as 20 percent of its branches were judged as being too small. In Cologne, Fielmann opened a large new store encompassing 835 square meters on six floors. With 5 percent of all optical stores in Germany belonging to Fielmann, the company has a market share of 20 percent in value and 50 percent in volume.
The average turnover of a Fielmann store in Germany was €1.7 million in 2011, whereas according to the ZVA, the German optical retailer's association, traditional German opticians recorded average sales of €0.3 million. In Austria, the average turnover of a Fielmann store was €2.3 million and in Switzerland €4.9 million.
In its domestic market, Fielmann's sales volume increased from 5.3 million pairs of glasses in 2010 to 5.6 million glasses in 2011. Total revenues in the country grew from €827.7 million to €873.2 million. Its pre-tax income in Germany increased to €142 million from €138.8 million in 2010.
In Austria, the group's sales rose to €57.9 million from €55.2 million in 2010. The pre-tax profit margin remained stable at 13.5 percent. The amount of glasses sold decreased from 375,000 pairs in 2010 to 364,000 pairs at the end of the last year. Fielmann increased its market share in the country from 15 to 16 percent in value, but its market share in volume dropped from 29 percent in 2010 to 28 percent. Three percent of all the optical stores in the country belong to Fielmann.
In Switzerland, revenues increased to €128.6 million, compared with €118.9 million in 2010. The pre-tax income dropped from €24.7 million in 2010 to €24 million in 201. The company sold 1,000 pairs of glasses less than in 2010, reaching a total sales volume of 391,000 pairs of glasses. However, Fielmann was able to increase its market share from 35 to 39 percent in volume and from 14 to 16 percent in value.
In the Netherlands, revenues increased from €7.421 million in 2011 to €7.705, in Poland from €9.817 to €10.418 and in Luxembourg from €3.940 million to €4.158 million.
Fielmann created 481 additional jobs in 2011 and employed 14,200 people at the end of the last year, including 2,700 trainees, 36 percent of all the trainees in the German optical market. It invested €17 million in training and €27 million in raising sales during the past year. More than 80 percent of the employees hold shares in the company and received dividends.
Fielmann's board recommends payment of a higher dividend of €2.50 at the annual shareholders' meeting in July 2012, compared with €2.40 in 2011. Fielmann will be distributing €105 million to its shareholders, up from €100.8 million in the previous year.
The edging of the glasses is done in Rathenow in Germany, where Fielmann has its own production site and logistical center. About 2.5 million pairs of glasses are made in Rathenau per year. Due to its own production site and the fact that Fielmann is ordering big quantities at other eyewear manufacturers, it is able to sell its products at very competitive prices.
Fielmann sees potential for increased revenues at its stores from contact lenses, sunglasses, hearing aids and progressive lenses. For example 17 percent of the Swedish population wear contact lenses, whereas in Germany that figure is only 5 percent. At the moment, sunglasses account for only 3 percent of Fielmann's total sales volume. However, the industry sees potential in this segment, as only 45 percent of all people wearing glasses in Germany have corrective sunglasses. Fielmann expects its progressive lenses segment to increase by 50 percent in the medium-term, due to new technologies used in its production facility in Rathenow.
Hearing aids present a strong growth market for the industry, as 890,000 pieces are being sold per year in Germany. Fielmann sold 20,000 hearing aids in 2011, amounting to a sales value of €16 million. Fielmann has 71 separate hearing aid sales departments in their branches installed already and plans 86 departments in 2012 and 200 separate hearing aid sales departments in the medium-term. However, there are not enough trained employees at the moment.
As mentioned previously, Fielmann is in search of bigger sales areas at perfect shopping locations. After stores in Heidelberg, Trier, Dortmund and Flennsburg were restructured, for example, they recorded a double-digit increase in sales in 2011. Fielmann stated that 20 percent of all branches are too small, also in light of expanding the hearing aid sales departments.
Fielmann plans to invest €35 million in 2012 and €36 million in 2013 in developing and preserving its network of stores, in production and infrastructure. In Germany, Fielmann plans to invest €31 million, in Austria and Poland €1 million each, and in Switzerland €2 million. It will invest €19 million in the renovation of existing branches and the opening of new branches. Fielmann plans to open 10 new stores in 2012 and the same in 2013.
Günther Fielmann's 22-year-old son, Marc, will soon start his two-year training for executive managers before following in his father's footsteps. Marc Fielmann is currently working at one of Fielmann's German branches in order to gain experience in all different sections of the business.