Annual Report 2017

5. Segments

The Management Board forms the Group’s chief operating decision-maker (‘CODM’). Management has determined the operating segments based on the information reviewed by the CODM for the purposes of allocating resources and assessing performance.

The Group’s business is organized and managed on a geographic basis and operates through three business segments: the G4, Other Europe and Americas & Asia. All geographic segments are involved in the optical retail industry, and there are no other significant product lines or sources of revenue for the Company.

There has been no aggregation of operating segments into reportable segments.

The Group’s reportable segments are defined as follows:

  • G4, consisting of the Netherlands & Belgium, the United Kingdom & Ireland, France & Luxembourg and Germany & Austria
  • Other Europe, consisting of Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Italy, Norway, Poland, Portugal, Slovakia, Spain, Sweden and Switzerland
  • Americas & Asia, consisting of Argentina, Brazil, Chile, China, Colombia, India, Mexico, Peru, Russia, Turkey, the United States and Uruguay

The most important measures assessed by the CODM and used to make decisions about resources to be allocated are total net revenue and adjusted EBITDA. Measures of assets and liabilities by segment are not reported to the CODM.

The following table presents total net revenue and adjusted EBITDA for the operating segments for 2017 and 2016. The adjusted EBITDA is defined as EBITDA excluding other reconciling items and exceptional non-recurring items. Non-recurring items are defined as significant items that are not included in the performance of the segments based on their exceptional nature. For 2017 these items mainly relate to some exceptional acquisition related costs, integration activities and software impairment. The non-recurring items in 2016 relate to acquisition costs for recently acquired businesses and integration costs following the merger of the Italian business. Further costs relate to legal and regulatory provisions as well as corrections related to prior years. A reconciliation from adjusted EBITDA to earnings before taxes is presented within each table below. Other reconciling items represent corporate costs that are not allocated to a specific segment.

in thousands of EUR

G4

Other Europe

Americas & Asia

Total

2017

Total net revenue

1,980,726

990,188

478,943

3,449,857

Adjusted EBITDA

418,254

157,376

10,777

586,407

Other reconciling items

- 34,895

Total adjusted EBITDA

551,512

Non-recurring items

- 17,475

Depreciation

- 116,587

Amortization and impairments

- 90,672

Operating income/loss

326,778

Non-operating items:

Fair value gain on remeasurement of Associate

37,949

Net financial result

- 14,705

Earnings before tax

350,022

2016

Total net revenue

1,969,474

906,614

439,989

3,316,077

Adjusted EBITDA

422,513

138,456

10,575

571,544

Other reconciling items

- 34,396

Total adjusted EBITDA

537,148

Non-recurring items

- 15,614

Depreciation

- 110,069

Amortization and impairments

- 53,323

Operating income/loss

358,142

Non-operating items:

Net financial result

- 10,414

Earnings before tax

347,728

The breakdown of revenue from external customers by geographical area is shown as follows:

in thousands of EUR

2017

2016

France

596,549

600,725

Germany

487,542

473,216

United Kingdom

398,890

413,415

Other countries

1,966,876

1,828,721

3,449,857

3,316,077

Revenue in the Netherlands, the Group’s country of domicile, is €252,501 (2016: €247,535). There are no customers that comprise 10% or more of revenue in any year presented.

The breakdown of non-current assets by geographical area is shown as follows:

in thousands of EUR

31 December 2017

31 December 2016

The Netherlands

104,052

100,474

France

498,160

491,938

United Kingdom

274,728

202,779

Other countries

1,311,467

1,187,969

2,188,407

1,983,160

The non-current assets by geographical area are disclosed based on the location of the assets. This disclosure includes all non-current assets except financial instruments and deferred tax assets.