GrandVision enjoyed an 0.8 percent year-over-year increase in comparable revenues in the fourth quarter, in line with the performance posted in the previous three months, thanks to its core European markets. But on a reported basis, the top line declined by 1.7 percent as the group suffered from the resurgence of the Covid-19 pandemic. At constant currency rates, revenues increased by 1.1 percent, according to preliminary data released by the Dutch optical retailer.
In the full year, sales were down by 13.8 percent on a reported basis and by 12.2 percent at constant currency rates. Comparable sales dropped by 14.1 percent largely due to Covid-19 lockdowns in the first half of the year. Throughout 2020, total e-commerce sales grew by 85 percent while those of the group’s retail brands more than doubled compared with 2019. The acquisition of Optica 2000 in Spain and McOptic in Switzerland last year contributed 1.4 percentage points to revenue growth.
In the core G4 segment, which comprises stores operating in France, Luxembourg, Germany, Austria, the Netherlands, Belgium, the U.K. and Ireland, comparable revenues grew by 4.2 percent during the fourth quarter but fell by 11.6 percent in the full year. In the fourth quarter, Germany and Benelux posted single-digit growth rates in comparable sales, while the U.K. registered a “strong” double-digit growth rate, underpinned a weak comparative basis. GrandVision benefited from an increase in the average selling price driven by higher value optical products. The group increased the share of the multifocal category, largely in France.
In the rest of Europe, comparable revenues decreased by 4.1 percent in the fourth quarter and by 15.9 percent in the full year, with Italy one of the hardest hit markets in both periods. Online sales grew strongly, especially in Northern Europe, lifted by the implementation of subscription models for optical and contact lenses.
In the business region covering the Americas and Asia, comparable revenues were down by 1.2 percent in the fourth quarter and by 20.6 percent in the full year, driven lower by Latin America and the U.S. Turkey was more resilient, supported by the doubling of e-commerce sales. In Latin America, GrandVision also enjoyed a significant increase of its online business thanks to the improvement of the product mix, with optical products now representing 20 percent of digital sales.
In the fourth quarter, profit growth exceeded the pace of sales and GrandVision expects to register an adjusted Ebita margin of about 7.5 percent for the whole of 2020.
At the end of the year, 98.5 percent of the group’s store network was open as optical retail was considered as an essential activity in most of its markets. Nevertheless, Covid-19 related restrictions impacted traffic and it expects disruptions to continue in the first quarter. The drop in the footfall was offset by a strong increase in conversion to which contributed GrandVision’s proprietary online appointment booking tool. The system has been rolled out in over 30 of its retail brands.
The group also introduced a new store concept in six countries by the end of 2020 and will accelerate the roll-out during the year.
GrandVision finished 2020 with a net debt of €539 million, down from €753 million at the beginning of the year thanks to cash generation.
It declined to release a full-year guidance due to the rising short-term uncertainty following an increase in restrictive measures to combat the pandemic introduced in several countries. But barring a material worsening of the situation, GrandVision plans to propose a dividend payment to shareholders at the annual general meeting on April 23.
The group said that it continues to support its takeover by EssilorLuxottica. The transaction has been unconditionally cleared in the U.S., Colombia, Brazil and Mexico. It is currently under review in the European Union, Chile and Turkey as well as in Russia, where the previous approval has expired.
GrandVision and EssilorLuxottica are engaged in a lawsuit after the Franco-Italian group asked the Dutch retailer to provide information on its handling of the pandemic and of allegedly breaching its obligations under the groups’ support agreement.