Fielmann AG / Key word(s): Profit Warning/Half Year Results
Fielmann AG: Preliminary Figures as at 30 June 2022
04-Jul-2022 / 13:34 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The first half of this year was strongly influenced by a protracted Covid-19 pandemic as well as the impact of the war in Ukraine. The Fielmann Group’s preliminary external sales incl. VAT and changes in inventories for the first six months are expected to have risen to € 989 million (previous year: € 919.8 million), while consolidated sales increased to about € 851 million (previous year: € 789.6 million). In the second quarter external sales are projected to have grown to € 505 million (previous year: € 474.9 million) and consolidated sales will reach approximately € 437 million (previous year: € 407.7 million).
While this sales growth is in line with our Vision 2025 path, our cost structure in 2022 had been planned for more dynamic growth. Consequently, our profitability was disproportionately affected: For HY1/2022 we expect earnings of € 89 million (previous year: € 96.0 million), corresponding to a 10.4 % EBT margin. From April to June, the pre-tax profit will amount to about € 39 million (previous year: € 54.2 million).
While the pandemic continued to have an adverse impact on our sales levels, we increased and adjusted salaries in several markets to counteract the lack of skilled personnel. Across all functions, this led to additional HY1/2022 personnel expenses of around € 22 million. With respect to our main product categories, prescription eyewear and hearing aids delivered strong single digit growth while sunglasses and contact lenses benefited from the development of our omnichannel platform, growing well above 20 % compared to last year. As contact lenses and sunglasses however contribute lower margins, the changed product mix resulted in a negative gross profit impact of € 13 million. Additional costs weighing on profitability were intensified marketing activities and a solidarity initiative for Ukrainian refugees which had a total effect of € 11 million.
As the consequences of the war in Ukraine, persistently high inflation and rising interest rates are increasingly affecting consumer confidence and as the Covid-19 pandemic continues to have an impact on the sick leave rates among our employees, we expect external sales of circa € 2 billion (previous year: € 1.94 billion), consolidated sales of approximately € 1.8 billion (previous year: € 1.68 billion) and an EBT of more than € 190 million (previous year: € 209.7 million) for the full year 2022.
Information and Explanation of the Issuer to this News:
Fielmann Group expects external sales to grow +8% in HY1/2022
E-commerce growing by more than 30% over last year
The first six months of 2022 were strongly influenced by a protracted Covid-19 pandemic as well as the impact of the war in Ukraine. In this challenging environment, the Fielmann Group projects strong sales growth in line with its Vision 2025.
Market environment HY1/2022
During the course of the first half of the year, the ongoing Covid-19 pandemic led to continued restrictions, record-high sick leave rates among employees and low footfall in most of our markets. This situation persisted well into Q2/2022, especially in Germany and Austria. While the pandemic continued to have an adverse impact on our sales levels, the Fielmann Group acknowledges the exemplary work of its people in the stores. To account for the lack of skilled personnel in optical and acoustic retail, we have increased and adjusted the salaries in several markets. Across all functions, this led to additional HY1/2022 personnel expenses of around € 22 million.
Since February 2022, the consequences of the war in Ukraine impact our operations across Europe. The Fielmann Group acts as a responsible family business: We offered job guarantees to all our 269 Ukrainian employees. Dozens who fled abroad have received training and employment offers. For all refugees arriving from Ukraine, Fielmann and ZEISS realised a 3-month solidarity initiative: More than 80.000 Ukrainians received an individually assembled pair of glasses free of charge in Fielmann stores. ZEISS covered the lenses and Fielmann provided the frames, personnel and services. Although our business in Ukraine suffered sales declines of up to 90% on a monthly basis, we continue to support our people who remained in the country by paying 100% of salaries. As at 30 June 2022, 35 out of our 36 Ukrainian stores have re-opened, many of them returning to pre-crisis business levels.
Business development HY1/2022
In 2019 we announced our Vision 2025 that builds on our customer centric company philosophy and targets +5% sales growth per year by means of digitising and internationalising our family business. We are proud to have delivered on this goal since 2019 – despite the effects the Covid-19 pandemic and the war in Ukraine had on our business. According to the latest forecast, HY1/2022 external sales will reach € 989 million during the first six months of this year (+8% over the same period last year).
While this sales growth is in line with our Vision 2025 path, our cost structure in 2022 had been planned for more dynamic growth. Consequently, our profitability was disproportionately affected: For HY1/2022 we expect earnings to have reached about € 89 million (previous year: € 96 million), corresponding to a 10.4% EBT margin.
With respect to our main product categories, prescription eyewear and hearing aids delivered strong single digit growth while sunglasses and contact lenses benefited from the development of our omnichannel platform, growing well above 20% compared to last year. As contact lenses and sunglasses however contribute lower margins, the changed product mix resulted in a gross profit impact of €13 million.
Marc Fielmann, CEO of the Fielmann Group: “Thanks to our outstanding customer service and our superior omnichannel platform, we are delivering consistent growth in an unstable environment. We are particularly pleased with the progress of our e-commerce business: In the first six months of 2022 the Fielmann Group increased the number of parcels shipped across Europe to more than 640.000 which corresponds to +31% growth over last year.”
The Fielmann Group Management Board views the current market environment with concern. The ongoing war in Ukraine, persistently high inflation levels and rising interest rates all negatively affect consumer confidence while driving cost inflation. At the same time, the Covid-19 pandemic persists. In this environment, we expect a development for the full year that corresponds to the pessimistic scenario communicated in our Annual Report. We update our FY/2022 guidance to external sales of approximately € 2.07 billion (previous year: € 1.94 billion), and an EBT of € 190 million (previous year: € 209.7 million).
The Fielmann Group Management Board is taking measures to maintain its strong sales trajectory while boosting the Group’s EBT margin to at least 16%, as communicated in our Vision 2025. At our Annual General Meeting on 14 July 2022 we will report on our strategic initiatives that will drive profitability in short- and medium-term.
In the long-term we remain optimistic: In times of uncertainty, people prefer to buy from companies that offer excellent service and guaranteed quality at the best prices – in the eyewear industry this is the Fielmann Group.
Hamburg, 04 July 2022
The Management Board
About the Fielmann Group:
The Fielmann Group is a stock-listed family business based in Hamburg, Germany. As the most customer-centric provider of eyewear, contact lenses and hearing aids, we serve our 27 million active customers through an omnichannel platform comprised of digital sales channels as well as more than 900 retail stores across 16 countries.
Further information: Katrin Carstens, Director Communications & Public Relations, Telephone: +49 (0)40/270 76 – 5907
Ulrich Brockmann, Director Investor Relations, Telephone: +49 (0) 40 270 76 – 442
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