Fielmann Group reported a 9.2 percent year-on-year increase in external sales including VAT and changes in inventories to €444.9 million, a revenue level also higher than in Q1 2019. The increase was mostly attributable to the integration of the recently acquired Óptica & Audiologia Universitaria business in Spain. However, the German group also performed better in Q1 2021 than in Q1 2020 in all its established markets, despite the ongoing impact of the Covid-19 crisis and related business restrictions.
|Revenues by Region|
(Million euros, Quarter ended March 31)
|Germany||Outside sales revenues||277.9||277.8||0.0|
|Switzerland||Outside sales revenues||44.5||43.9||1.4|
|Austria||Outside sales revenues||19.3||19.4||-0.5|
|Spain||Outside sales revenues||25.4||0.0||–|
|Other||Outside sales revenues||14.9||14.2||4.9|
By country, outside sales revenues inched up to €277.9 million in Germany for the first quarter, from €277.8 million in the same period last year. The company managed to greatly improve its quarterly profitability in the country with pre-tax earnings almost doubling from Q1 2019 to €32.7 million, thanks in part to reduced material costs. The domestic market accounts for more than 70 percent of the group’s total revenues and also contributed close to 80 percent of the pre-tax earnings for the quarter.
Outside sales revenues in Switzerland increased by 1.4 percent year-on-year to €44.5 million for the quarter while they remained flat in Austria at €19.3 million. The Other Countries’ segment reported Q1 sales of €14.9 million, an increase of 4.9 percent as compared to 2019, probablly driven by good results in Italy and Poland where the company added a total of eleven stores last year.
Fielmann reported for the first time its performance in Spain, a market it entered last year with the takeover of the Óptica & Audiologia Universitaria retail chain and its 80 stores. The group had acquired 80 percent of the Spanish company’s shares with an option to acquire the remaining 20 percent. Q1 outside sales revenues in the country reached €25.4 million, a double-digit increase according to a company official, and pre-tax earnings €2.0 million. The company is expected to open new stores under the Óptica & Audiologia Universitaria banner starting this month.
(Thousand euros, Quarter ended March 31)
|Profits to be allocated to parent-company shareholders||21,917||12,035||82.1|
|Earnings per share (diluted)||0.26||0.14||85.7|
For the quarter, Fielmann Group reported consolidated sales of €382.0 million, an 8 percent increase from the €355.3 million reported in 2019. In volume, the number of glasses sold in the first quarter of 2021 increased by 9.6 percent year-on-year to 1.86 million pieces. However, considering that the number of retail locations operated by the group increased from 776 units in Q1 2020 to 875 units in Q1 2021, we estimate that comparable-store sales slightly decreased in the period across the group.
Pre-tax profits in Q1 2021 rose to €41.8 million, from €17.6 million in the same quarter last year, on hicher sales and in spite of €7 million in additional costs related to the Covid-19 pandemic which included around €6 million in bonuses for employees in contact with customers. The company said that the implementation of its digital technologies significantly improved productivity, in particular through the online pre-booked appointments in stores.
Fielmann’s supervisory board also approved during its meeting on April 15 the consolidated annual accounts for the past financial year. As previously announced, total external sales including VAT fell by 7.4 percent year-on-year to €1.63 billion in 2020, while the group’s consolidated sales decreased by 6.4 percent to a total of €1.43 billion.
In volume, the company sold a total of 7.26 million glasses in 2020, down by 12 percent from 8.28 million in the previous year. Commenting on the annual results, Marc Fielmann, CEO of the company, said that the disproportionate decline in volume as compared to revenues could be attributed to a significant drop in sales of prescription sunglasses during the spring season. This negative effect was partly offset by the growing share of progressive lenses in the product mix and by a 13 percent increase in hearing aids’ sales.
Revenues were down in all markets due to the Covid-19 crisis and related restrictions, however only slightly in the Other countries’ segment, as shown in the table below. In its domestic market, Fielmann reported a 5.5 percent decrease in revenues to €1,132 million in 2020, however, overperforming the market which was measured down by 7.4 percent by the Zentralverband der Augenoptiker und Optometristen (ZVA), the German retail association.
|Revenues by Region|
(Million euros, Year ended Dec 31)
|Germany||Outside sales revenues||1,132.4||1,198.1||-5.5|
|Switzerland||Outside sales revenues||166.3||179.2||-7.2|
|Austria||Outside sales revenues||74.9||87.9||-14.8|
|Others||Outside sales revenues||55.3||55.5||-0.4|
Marc Fielmann commented that the group’s growth strategy in its core markets, the DACH region and Luxembourg, focuses on organic growth, the opening of new stores, the development of existing ones and the move to more attractive locations. In these markets, the company has identified growth opportunities in the fields of hearing aids, sunglasses and contact lenses. Its long-term goal is to reach a total of about 700 stores in the region and annual revenues of €2.1 billion.
As for other markets, Fielmann opened a total of eleven shops in Italy and Poland last year, including two flagship stores in Milan and Warsaw. The group’s long-term target is to reach 80 stores in Italy and 70 in Poland. For these two countries, plus Spain and three additional European countries in which Fielmann wants to enter before 2025, the company expects to reach annual sales of about €400 million in a few years.
Fielmann Group’s strategic plans calls for total annual sales of €2.3 billion and 12 million glasses in Europe by 2025.
The second pillar of the company’s strategy remains the digitization of its business. In its annual results’ commentary, Marc Fielmann said that “the future belongs to the omnichannel business model – the connection of personal service and digital technologies”. The company stressed that among the 25 million customers it already serves in Europe, 19 million already used its digital services.
Fielmann, which has already invested €15 million in the development of virtual try-on and digital measurement technologies, said that it was ready to launch two new key technologies. We will report more in depth on the group’s digitization in a separate article.
The group said that it would invest close to €100 million this year on its international expansion and on its digitization.
Fielmann’s pre-tax profits were squeezed to €175.5 million in 2020 from €253.8 million in 2019, and the net profit declined to €120.8 million in 2020, a 31.8 percent year-on-year drop from the previous year. However, the group said that it would maintain its shareholder-friendly policy by proposing a €1.2 per share dividend at the next annual meeting scheduled for July 8.
(Thousand euros, Year ended Dec 31)
|Profits to be allocated to parent-company shareholders||116,408||172,203||-32.4|
|Earnings per share (diluted)||1.39||2.05||-32.2|
As part of the results’ release, Fielmann also announced the appointment of Katja Groß, director of human resources, to its management board, while Michael Ferley, board member for materials’ management and production, resigned from his position for personal reasons. Georg Alexander Zeiss has taken over the direction of the materials and production departments since April 1, 2021.