Having reported its 2009 results, Fielmann is looking to the future, planning to invest more than €46 million this year and more than €48 million next year, compared with €41.1 million in 2009. Geographically, €40 million will be spent this year in Germany, €1 million in Austria and Poland, and €3 million in Switzerland. A total of €27 million have been earmarked to set up 20 new stores in the three countries and to maintain or upgrade the current stores; €6 million for expanding production capacity; and €12 million for group infrastructure. The spending pattern will be similar in 2011. New production technology for grinding spectacle lenses and improved processes will positively influence productivity over the next two year.
In the medium term, Fielmann plans to operate 700 branches in Germany, selling more than 6.5 million pairs of glasses every year for sales of €1.1 billion. Forty branches will sell 400,000 pairs in Switzerland, and another 40 in Austria will account for 450,000 pairs. For these three countries, it is looking toward selling 7.4 million pairs of glasses in the medium term for sales of €1.3 billion. The company is also expanding in Poland, with a medium-term goal of a total of 40 locations with a presence in all the major cities.
Fielmann says in its annual report that it wants to have one branch per 100,000 residents in Germany, with a goal of a 50 percent market share in all the regions of the country. There is still potential for expansion especially in the southern part of Germany, where many of Fielmann's newest stores are being opened.
Fielmann also sees a potential for increased revenues at its stores from higher-priced progressive lenses, sunglasses, contact lenses and hearing aids, judging from market trends. It says that its customers are younger than those of traditional competitors and remain loyal, so its share of the varifocal market is increasing as its customers age into it. Even without any new customers, the proportion of varifocals sold in Fielmann stores is expected to grow by 50 percent in the next few years.
The company had 644 stores at the end of last year, up from 620 at the end of 2008. The door count last Dec. 31 included 28 stores in Switzerland, 30 in Austria, 18 in Poland, three in the Netherlands and two in Luxembourg.
As previously reported, Fielmann posted a 0.4 percent increase in pre-tax income of €162.5 million in 2009 while its consolidated sales rose by 5.5 percent in 2009 to €952.5 million, with a volume increase of 5.4 percent to 6,430,000 pairs of glasses sold. The net income similarly inched up by 0.4 percent to €114.3 million. Cash flow grew by 1.6 percent to €151.3 million, and the group's equity ratio was 62.4 percent, compared with 59.0 for the prior year.
Commenting on the figures circulated by ZVA, the German optical industry association (see next article), Fielmann says they indicate a further increase in its domestic market share. With 5.3 million pairs sold in the country, the leading chain had a 48 percent share of the German market in terms of volume, compared with 46 percent in 2008 when it sold 5.1 million pairs. In terms of value, thanks to its low-priced offer, Fielmann represented 19 percent of the total market with sales revenues of €905 million, up from 18 percent in 2008, although it operated only 5 percent of all the stores.
Fielmann's income in Germany was €138.8 million, a drop from the €140.5 million recorded for 2008. This is mainly because in the previous year, charging foreign companies a license fee for using the brand name «Fielmann» for the first time made a positive one-time contribution of €3.8 million to the German segment, since this was charged retrospectively for previous years.
In Switzerland, the group's sales rose by 7.4 percent last year to €104.6 million and its pre-tax profit jumped by 35.3 percent to €20.7 million. Revenues in Austria grew by 11.4 percent to €52.7 million, but the pre-tax profit in the country fell to €5.4 million from €6.7 million in 2008, hurt by the preliminary expenses for extensive expansion. The pre-tax return on sales thus declined there to 10.3 percent from 14.2 percent the year prior.
Fielmann claims market shares of 14 percent in value and 35 percent in volume in Switzerland and 14 percent in value and 26 percent in volume in Austria, based on industry data. The total market in Switzerland stood last year at 1.1 million pairs of glasses sold at 1,100 specialist optical stores, and Fielmann sold 380,000 pairs of glasses there in 2009, up from 365,000. Industry figures for Austria show 1.3 million pairs sold by 1,129 stores. Fielmann sold there 345,000 pairs, up from 320,000.
Fielmann says its stores generate five to 10 times the sales of an average optician, with some achieving 20 to 50 times the sales. Fielmann said that each year, the average optician sells fewer than 600 pairs of glasses, while it sells 10,000 per branch. The average revenues are €0.3 million, while a Fielmann branch brings in €1.6 million in Germany, €2.4 million in Austria and €4.0 million in Switzerland.
In the home market of Germany, the company has market share of 40-50 percent practically from a standing start in medium-size towns. It says that since its first branch opened in 1972, it has sold 90 million pairs of glasses, with 23 million people currently wearing Fielmann products.
Fielmann's board has decided to recommend payment of a dividend of €2.00 per share at the annual shareholders' meeting, up from €1.95 for 2008. At the end of the year, assets plus cash and cash equivalents totaled €204.8 million, up from €207.4 million the year before, but company officials say that no acquisitions are planned.
Günther Fielmann, founder of the group and its majority shareholder, will get as usual most of the dividend payout, but the company's employees are sharing in the reward. Last October, all of Fielmann's employees were offered nine shares at a price of €42.89; 3,351 employees took advantage of the offer. In addition, employees in the branches received a total of 51,453 shares under a performance-related remuneration scheme, for a total cost of €4.495 million. This was a reward for adherence to certain elements of the Fielmann philosophy, such as dedication to customer needs. More than 80 percent of the company's employees hold shares.
Fielmann had a total of 13,235 employees at the end of last year, including 2,497 trainees. Fielmann employs one-third of all the trainees in the industry in Germany. Every year more than 10,000 young people apply for a training spot, which is offered to more than 800 of them.
The company plants a tree for every employee each year; it has planted more than 1 million trees so far. It also sponsors popular sports, and more than 100,000 children on 7,000 teams compete in Fielmann shirts.