GrandVision Full Year 2016 Results 20 February 2017
Forward looking statements This presentation contains forward-looking statements that reflect GrandVision s current views with respect to future events and financial and operational performance. These forward-looking statements are based on GrandVision s beliefs, assumptions and expectations regarding future events and trends that affect GrandVision s future performance, taking into account all information currently available to GrandVision, and are not guarantees of future performance. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future, and GrandVision cannot guarantee the accuracy and completeness of forward-looking statements. A number of important factors, not all of which are known to GrandVision or are within GrandVision s control, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement as a result of risks and uncertainties facing GrandVision. Any forward-looking statements are made only as of the date of this press release, and GrandVision assumes no obligation to publicly update or revise any forward looking statements, whether as a result of new information or for any other reason. 2
Full Year 2016 performance highlights Revenue of 3,316 million Revenue growth of 6.5% at constant exchange rates and 3.5% organic growth Revenue ( million) 3,205 3,316 Comparable growth of 2.2% (FY15: 4.1%) 6,516 stores at year-end 2015 2016 Store network expanded by 406 to 6,516 Improved profitability Adjusted EBITDA ( million) 512 537 Adjusted EBITDA 1 up 6.7% at constant exchange rates to 537 million (FY15: 512 million) 2015 2016 Adjusted EBITDA margin growth of 24 bps to 16.2% EPS ( per share) 0.92 0.96 Net result attributable to equity holders +8.8% to 231 million 0.84 0.87 Adjusted EPS 1 +11.3% to 0.96 1 Adjusted EBITDA, EPS = EBITDA, EPS excluding non-recurring items 2015 2016 EPS Adjusted EPS 3
Fourth Quarter 2016 performance highlights Revenue 821 million Revenue growth of 7.8% at constant exchange rates and 5.2% organic growth Revenue ( million) 786 821 Comparable growth of 3.8% (4Q15: 2.2%) Adjusted EBITDA growth Adjusted EBITDA 1 up 15.4% at constant exchange rates to 126 million (4Q15: 111 million) Adjusted EBITDA margin growth of 115 bps to 15.3% driven by efficiency gains and a higher share of Exclusive Brand frames in the sales mix 4Q15 Adjusted EBITDA ( million) 111 4Q15 Adjusted EBITDA margin 4Q16 126 4Q16 15.3% 14.2% 4Q15 4Q16 4
Comparable growth development In the longer term, comparable growth is driven by favourable underlying market trends (i.e. aging population, growing middle classes), stable repurchase cycles and the fundamental need for eye care In the short-term comparable growth will be impacted by, among other, the timing of public holidays, own and competitors commercial activities, other short term impacts on retail traffic, such as weather, previous years comparables as well as the number of trading days Shift of Easter holiday into April (from 1Q to 2Q) Strong impact on 3Q retail traffic in general due to weather patterns 5.5% 4.8% 4.3% 4.1% 3.7% 3.6% 3.8% 2.2% 2.2% 1.6% 0.8% 0.9% 0.4% FY12 FY13 FY14 FY15 FY16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 5
Solaris Update 2016 Highlights Opened approx. 1,000 new points of sale mostly corners within GrandVision s stores New operating structure Centralized all sunglass activities in Schiphol, Netherlands for improved integration with supply chain, marketing and operations 2,200 1,200 800 2000 10 14 15 16 SHOP-IN-SHOP STAND ALONE POP-UP / MOBILE ONLINE 6
GrandVision Italy: One Brand, One Team, One Company 2016 Highlights Achieved revenue and comparable growth Launched GrandVision as national brand Shift from local to national media campaigns (traditional and digital) Store openings Designed scalable operational platform Rebranding progress 2H15 1H16 2H16 Avanzi Optissimo GrandVision 7
For Eyes Integration Update December 2015: Acquisition completed 2016 Achievements: Rebuilt management team Introduced GrandVision s assortment including Exclusive Brand frames and lens packages Introduction of GrandVision s Simple Sales Process (SSP) and value proposition Introduction of GrandVision brand identity Store refurbishments (ongoing) Stabilized performance of the business Developed marketing capabilities Priorities 2017: Further stabilize and build expansion platform Focus on comparable growth Continued roll-out of marketing plan, focusing on digital and social media Store openings 8
Market expansion in Mexico 2016 Highlights Important year for GrandVision Mexico Doubled store network through openings and acquisitions Achieved strong comparable growth Dual banner strategy Store network growth Mass market approach Exclusive Brands proposition Value for money Simple Sales Process High-end positioning International Brands offer Aspirational Focus on customer loyalty Customized Sales Process 521 251 155 174 191 2012 2013 2014 2015 2016 9
Strategic priorities Strengthen and deploy group s global capabilities Drive further comparable growth Optimize the existing store network Expand in current markets, also through bolt-on acquisitions Enter new markets 10
Segment and Financial Performance 2016 11
Segment Review: G4 2016 Highlights Revenue growth of 2.6% at constant exchange rates, with organic revenue growth of 2.1% Comparable growth of 1.5% (FY15: 4.2%) Total number of stores increased from 2,990 to 3,020 G4 key figures FY16 4Q16 Revenue growth (constant rates) +2.6% +3.1% Revenue growth (organic) +2.1% +2.7% Comparable growth +1.5% +1.8% Adj. EBITDA growth (constant rates) +6.8% +12.2% Adj. EBITDA growth (organic) +6.2% +11.7% Adj. EBITDA margin 21.5% 21.4% Adj. EBITDA increased 6.8% at constant exchange rates, to 423 million, with organic adj. EBITDA growth of 6.2% Adj. EBITDA margin improved by 100 bps from 20.4% in FY15 to 21.5% in FY16 12
Segment Review: Other Europe 2016 Highlights Revenue growth of 3.5% at constant exchange rates, with organic revenue growth of 2.6% Comparable growth of 1.6% (FY15: 3.2%) Total number of stores increased from 1,750 to 1,818 Other Europe key figures FY16 4Q16 Revenue growth (constant rates) +3.5% +9.2% Revenue growth (organic) +2.6% +8.6% Comparable growth +1.6% +7.0% Adj. EBITDA growth (constant rates) +4.9% +16.0% Adj. EBITDA growth (organic) +3.9% +15.4% Adj. EBITDA margin 15.3% 15.2% Adj. EBITDA increased 4.9% at constant exchange rates to 138 million, with organic adj. EBITDA growth of 3.9% Adj. EBITDA margin increased by 18 bps from 15.1% in FY15 to 15.3% in FY16 13
Segment Review: Americas & Asia 2016 Highlights Revenue growth of 36.2% at constant exchange rates, with organic revenue growth of 13.0% Comparable growth of 7.4% (FY15: 6.6%) Total number of stores increased from 1,370 to 1,678 Americas & Asia- key figures FY16 4Q16 Revenue growth (constant rates) +36.2% +28.8% Revenue growth (organic) +13.0% +10.1% Comparable growth +7.4% +6.1% Adj. EBITDA growth (constant rates) +41.6% 43.2% Adj. EBITDA growth (organic) +119% +272% Adj. EBITDA margin +2.4% -1.6% Adj. EBITDA increased 41.6% at constant exchange rates to 11 million with organic adj. EBITDA growth of 119% Adj. EBITDA margin increased by 9 bps from 2.3% in FY15 to 2.4% in FY16 14
Adjusted EBITDA and margin development 537 512 449 372 400 16.2% 16.8% (excluding acquisitions) 348 16.0% 16.0% 15.3% 14.5% 14.8% 2011 2012 2013 2014 2015 2016 Adjusted EBITDA ( million) Adjusted EBITDA margin (%) 15
2016 Adjusted EBITDA margin development 0.6% 0.3% 16.8% 16.0% 0.0% -0.6% -0.1% 16.2% Organic growth 2015 G4 Other Europe Americas & Asia Acquisitions Country mix 2016 2016 excl. acquisitions 16
Strong Cash Flow generation 431 3.1x 380 382 322 2.7x 333 253 208 220 222 220 2.1x 2.1x 255 119 1.8x 1.4x 2011 2012 2013 2014 2015 2016 Net cash from operating activities ( mm); Free Cash Flow ( mm) Net debt / Adj. EBITDA 1 Net cash from operating activities / EBITDA and Free cash flow / EBITDA 2 Net debt/ebitda ratio impacted by late in year acquisitions 17
Capital Expenditure Development Capex investments continue to increase in line with the growing business, staying at around 5% of revenue The increase in non-store capex in 2016 is due to investments in IT infrastructure, including global ERP system and omni-channel solutions 200 175 150 125 5.6% 26 4.5% 4.3% 5.6% 5.0% 41 40 5.3% 52 6.0% 5.0% 4.0% 100 23 29 3.0% 75 50 25 108 91 85 117 122 124 2.0% 1.0% - 2011 2012 2013 2014 2015 2016 Store capex Non-store capex Capex % revenue 0.0% 18
Financial objectives and dividend policy Medium term financial objectives Annual revenue growth rate >5% at constant exchange rates Average annual EBITDA growth in high single digits Net debt / EBITDA ratio of max. 2.0x Intention to pay ordinary dividend in line with medium to long-term financial performance Dividend policy One dividend payment per year Target to increase DPS over time Ordinary dividend payout ratio 25-50% 19
Questions and Answers 20
Annex 21
Consolidated Income Statement Consolidated Income Statement ( million) 2016 2015 Revenue 3,316 3,205 Cost of sales and direct related expenses -901-876 Gross profit 2,415 2,328 Selling and marketing costs -1,668-1,617 General and administrative costs -393-363 Share of result of associates 4 5 Operating result 358 353 Financial income 9 5 Financial costs -19-24 Net financial result -10-19 Result before tax 348 334 Income tax -96-103 Result for the year 252 231 Attributable to: Equity holders 231 213 Non-controlling interests 21 18 22
Summarized Consolidated Balance Sheet Summarized Consolidated Balance Sheet ( million) 2016 2015 Property, plant and equipment 444 431 Intangible assets 1,458 1,480 Other non-current assets 156 152 Non-current assets 2,058 2,063 Inventories 293 264 Other current assets 303 274 Cash and cash equivalents 181 198 Current assets 777 736 Total assets 2,835 2,799 Total equity 1,007 832 Borrowings 388 776 Other non-current liabilities 240 236 Non-current liabilities 628 1,011 Trade and other payables 588 534 Borrowings 543 362 Other current liabilities 69 61 Current liabilities 1,200 956 Total equity and liabilities 2,835 2,799 23
Consolidated Cash Flow Statement in thousands of EUR 2016 2015 Cash flows from operating activities Cash generated from operations 534 462 Tax paid -103-80 Net cash from operating activities 431 382 Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired -13-138 Purchase of property, plant and equipment -140-132 Proceeds from sales of property, plant and equipment 5 7 Purchase of intangible assets -36-30 Proceeds from sales of intangible assets 2 0 Investments in Associates and Joint Ventures 0 - Proceeds from sales of investments in buildings 0 - Other non-current receivables and assets -1 6 Dividends received 8 4 Interest received 5 5 Net cash used in investing activities -169-277 Cash flows from financing activities Purchase of treasury shares -2-51 Proceeds from borrowings 505 425 Repayments of other borrowings -579-543 Interest swap payments -3-3 Acquisition of non-controlling interest - -1 Dividends paid to non-controlling interests -11-11 Dividends paid to shareholders -35-35 Interest paid -15-17 Net cash generated from/ (used in) financing activities -140-237 Increase / (decrease) in cash and cash equivalents 121-132 Movement in cash and cash equivalents Cash and cash equivalents at beginning of the year -82 54 Increase / (decrease) in cash and cash equivalents 121-132 Exchange gains/ (losses) on cash and cash equivalents -1-4 Cash and cash equivalents at end of year 38-82 24
Contact us Investor Contact investor.relations@grandvision.com +31 (0) 88 887 01 00 Media Contact media.relations@grandvision.com +31 (0) 88 887 01 00 Social Media https://www.linkedin.com/company/grandvision @grandvisionnv https://www.facebook.com/grandvisionnv 25