GrandVision reported slightly declining Q1 revenues for 2021 as compared to 2020, as its business was still significantly impacted by the consequences of the Covid-19 pandemic, particularly in Europe. However, the retail group almost doubled its EBITDA over the same period thanks to an overall improved product mix, continued cost controls, increasing online sales and improvements in the Nordics, the U.K., Switzerland and the Americas & Asia region.
Total group revenues for the quarter decreased by 3.0 percent year-on-year to €899 million, or by 0.7 percent in constant currencies. On a comparable store basis, Q1 revenues in 2021 were 1.5 percent lower than in 2020 and 10.8 percent lower than in 2019, the last full pre-pandemic year that GrandVision used as another reference point for this quarterly results’ presentation. Adding the sales figures from their franchises, the group reported system-wide revenues of €987 million for Q1 2021, or 0.9 percent less than a year before.
|GrandVision -Q1 key figures (€ million)|
|2021||2020||Change constant FX|
|Adjusted EBITDA margin||8.8%||4.5%||+4.3pp|
|NB of stores||7,247||7,320||-73 stores|
On the positive side, GrandVision said that its average selling prices improved during the quarter through an increase in the share of higher value products sold, in particular for non-exclusive brands. Another positive trend was a rise in conversion ratios that partly offset the lower footfall at the stores. E-commerce sales through the group’s omnichannel retail banners increased by 128 percent year-on-year in the quarter while the pure online platforms registered a high single-digit growth. Overall, e-commerce sales, including omnichannel, grew by 35 percent year-on-year during the quarter. The group also estimates that digitally influenced store sales doubled in Q1 2021 as compared to the same period last year, thanks in particular to the implementation of online appointment booking.
On the digitization front, the company also announced that it launched a new POS system in 200 of its French stores and integrated the Óptica 2000 network into its global omnichannel, and into its CRM platform which is now live in 13 markets including Belgium and the Netherlands.
GrandVision kept trimming its store network during the reported period, particularly in the Americas & Asia region, ending the quarter with a total of 7,247 stores, or 73 less than a year before despite the opening of new 34 retail locations, mainly in the G4 region. The company said that roughly 5 percent of its stores, mostly those located in malls, were temporarily closed or operating with reduced hours in the quarter because of governmental restrictions related to the Covid-19 crisis.
In terms of profitability, the Dutch-based group reported a jump in adjusted EBITDA from €41 million in Q1 2020 to €79 million in Q1 2021. Consequently, quarterly EBITDA margin progressed by 4.3 percentage points this year as compared to 2020, reaching 8.8 percent, however still below the 11.0 percent EBITDA margin registered in 2019.
|GrandVision - Q1 key figures (€ million)|
|2021||2020||Change constant FX|
|Adjusted EBITDA margin||10.6%||7.4%||+3.2pp|
|NB of stores||3,442||3,436||+6 stores|
|Adjusted EBITDA margin||7.9%||4.5%||+3.4pp|
|NB of stores||2,111||2,113||-2 stores|
|Americas & Asia||Revenues||99||113||2.7%|
|Adjusted EBITDA margin||9.5%||-2.0%||+11.5pp|
|NB of stores||1,694||1,771||-77 stores|
By geography, the G4 region, which is the main segment for the group, registered a 1.8 percent year-on-year decline in quarterly revenues to €513 million, at constant exchange rates. On a comparable store basis, G4 Q1 revenues declined by 3.2 percent and 12.2 percent versus the same quarter in 2020 and 2019, respectively.
Germany, Belgium and the Netherlands reported a 40 percent drop in footfall at the start of the year, although the situation improved towards the end of the quarter. GrandVision’s French retail banners were particularly hit by the administrative closure since February of all stores situated in malls larger than 10,000 square meters, representing about 300 retail locations for the group including franchises. The company said that it managed to partly offset the impact of the store closures by redirecting customers to other stores in its network, using its CRM platform. Together with Germany, France accounted for 90 percent of the G4 region comparable stores’ revenue drop in the quarter as compared to 2019.
The relative bright spot in the segment came from the U.K., where the group said the structure of its business kept improving with the implementation of its turnaround plan. However, the Covid-19 restrictions still affected the country’s quarterly sales performance, which was reported down by a high-single digit percentage as compared to Q1 2019.
Adjusted EBITDA for the G4 region increased to €54 million in Q1 2021 from €39 million, while the door count increased by 6 units to a total of 3,442 stores at the end of the quarter.
Q1 revenues on a currency-neutral basis for the Other Europe segment were flat as compared to the same quarter last year, reaching €286 million. On a comparable basis, they were down by 0.1 percent as compared to Q1 2020 and by 11.2 percent as compared to 2019. Footfall declined in all countries in the segment during the quarter because of store closures, it was particularly true for Southern and Eastern Europe. In Italy, about 200 stores in shopping malls had to remain closed on weekends, leading the country to register a high-single drop in Q1 2021 sales as compared to 2019.
Conversely, GrandVision said that the Nordics performed relatively well, thanks in particular to good performances in the contact lenses business, through adapted subscription models in Denmark and Norway. The total subscription base in the region registered a double-digit growth in the first quarter of this year versus Q1 2020. Switzerland also performed well, reporting a single-digit increase in Q1 revenues as compared to 2020.
Adjusted EBITDA for the Other Europe region increased to €23 million in Q1 2021 from €13 million, while the region ended the quarter with a total of 2,111 stores, or two less than a year before.
Q1 sales in Americas & Asia, the smallest segment for GrandVision, increased by 2.7 percent year-on-year and in constant currencies to €99 million. Comparable store sales were up by 2.8 percent as compared to Q1 2020, but down by 2.5 percent as compared to Q1 2019. The good performance in the region was driven by Turkey and Latin America, where online sales respectively doubled and tripled. Adjusted quarterly EBITDA for the region went from a negative €2 million in 2020 to a positive €9 million in 2021, while the number of stores went down from 1,771 to 1,694 at the end of March this year.
Due to the ongoing uncertainties related to the pandemic, GrandVision declined to provide any guidance for the rest of the current financial year. At the end of Q1 2021, the group’s net debt was reported at €569 million, or €30 million more than three months before. It decided to maintain its payment proposal of a €0.35 per share dividend for the 2019 fiscal year but will not propose a dividend for the 2020 fiscal year.
As in all its recent communications, GrandVision reiterated its support for the acquisition by EssilorLuxottica of the 76.72 percent interest in the group owned by HAL. As previously reported, the transaction has been cleared in Brazil, Colombia, Mexico, Russia and the United States and conditionally cleared in the European Union and Chile, leaving Turkey as the only country where it is still under review.
After the judgement on April 6 of the Amsterdam Court of Appeal, which dismissed EssilorLuxottica claims that GrandVision was withholding information on the conduct of its business during the Covid-19 crisis, both groups are now engaged in arbitration proceedings that remain confidential. They have until July 31 to find an agreement and close the transaction.