GrandVision market update relating to COVID-19 outbreak and postponement of AGM
20 Marzo 2020 - 8:00AM
GrandVision market update relating to COVID-19 outbreak and
postponement of AGM
Schiphol - 20 March 2020. GrandVision N.V.
(EURONEXT: GVNV) is providing an update today on the impact of
COVID-19 on its business, along with the measures it is taking to
actively manage the risks to its customers, employees and
operations. In addition, GrandVision announces that it has decided
to postpone its AGM to Tuesday 30 June 2020 in order to protect the
wellbeing of its employees and shareholders.
Stephan Borchert, CEO of GrandVision said: “It has become fully
clear that with the current developments on the COVID-19 outbreak
we are faced with extraordinarily challenging times ahead of
us.
Our entire focus lies on protecting the safety and wellbeing of
our employees and customers as well as on managing the risks to our
operations and financial situation.
We are continuously evaluating the best ways to protect our
employees and customers in all the markets we operate in from the
spread of the COVID-19 virus. Therefore, we have put substantial
Business Continuity Plans into action. In addition, we are working
closely with local authorities and have closed our stores in those
countries that have implemented strict measures to contain the
spread of the coronavirus.
We have taken immediate action to mitigate the impact on
GrandVision’s financial position, in particular by rigid management
of cost and cash outflow. Our net debt position and the liquidity
headroom under our revolving credit facility are solid.
As the situation continuous to develop rapidly, the outcome and
ultimate business impact is uncertain. Based on our current risk
analysis, GrandVision now expects not to be able to achieve its
medium term objectives of delivering at least 5% revenue and EBITA
growth for the year 2020.
I continue to strongly believe in the underlying resilience of
our business the structural drivers of our industry and the
strength of our brands. But at this moment I am especially
proud of the efforts and commitments of by our employees in these
testing and uncertain times.
We remain confident that the announced acquisition by
EssilorLuxottica of HAL’s 76.72% interest in our company will be
closed within 12 to 24 months from the announcement of the
transaction on 31 July 2019. Together with EssilorLuxottica and HAL
we are working on fulfilling all requirements that are necessary
towards closing the transaction.”
Business and Financial Update In January
and February 2020, comparable growth sales growth was 5.5%. In the
first two weeks of March comparable growth continued to be positive
with growth across most of our core markets.
Going forward, the company estimates that sales will be
negatively affected mainly as a consequence of the continued spread
of the virus. As of today, due to decisions by local authorities,
all of GrandVision’s stores are temporarily closed in a number of
markets including Belgium, France, Italy, Poland and Spain. In most
other markets the store networks remain fully or partially open,
however sales are negatively impacted up to a high double digit
percent range. All of GrandVision’s online platforms, although
still a small part of our current turnover, remain
operational and are showing robust growth.
GrandVision has formed an internal taskforce to continuously
monitor and proactively manage risks relating to COVID-19
throughout its business, as well as to ensure that publicly
available advice is followed and that appropriate safety measures
are quickly implemented for our employees and customers.
At this moment priority is to preserve the operations of our
business and safeguard its financial health. The company has
started to implement measures to reduce operating costs including
adjustment of marketing activities and other non-business critical
discretionary spend, adjust our procurement activities, optimize
working capital and reduce all non-business critical capital
expenditures. Also, we have prepared for the possibilities of tax
payment deferrals as well as for other government relief measures
such as short-term unemployment schemes. In countries where our
store network has been closed, we have started to engage with our
landlords to discuss lease payments.
As of closing February 2020, GrandVision had a net debt position
of €750m with borrowings of €894 and cash and cash equivalents of €
154m million. GrandVision has significant financial headroom under
its existing financing arrangements. In 2019 the Company renewed a
Revolving Credit Facility (RCF) of € 1,200 million until 2024
provided by a total of 15 relationship banks. It contains 2
extension options of 1 year each (5+1+1). As of closing of February
2020, a total of € 385 million was drawn under the RCF with a
further € 509m obtained in short term flexible finance. GV has
significant headroom in relation to its financial covenants and has
started to draw from the RCF, adding considerable immediately
available liquidity to the Company.
Based on these measures, and a simulated average revenue
reduction of 30 to 60% for a period of up to 6 months and a current
net debt position of € 750 million, GrandVision is confident to
achieve a year-end 2020 net debt position below € 1,000
million.
GrandVision therefore remains confident that under a set of
assumptions as laid out above, its net debt will remain below the €
993 million limit upon which the transaction with EssilorLuxottica
is conditional.As disclosed at the time of the deal and half year
results announcements, our main shareholder HAL has the right to
provide a capital injection to GrandVision to cure a potential net
debt position in excess of that limit at closing of the
transaction.
Following recent government actions and the heightened impact
and uncertainty of changes in the magnitude, duration and
geographic reach of COVID-19, we are not yet able to predict the
impact of COVID-19 on our 2020 full year results.
Status of transaction with EssilorLuxottica
GrandVision continues to support EssilorLuxottica with the
shared objective to obtain regulatory approval for the closure of
the acquisition by EssilorLuxottica of HAL’s 76.72% interest in
GrandVision within 12 to 24 months from the announcement date of 31
July 2019. The currently expected impact of COVID-19 on the
business and financial position of GrandVision is not expected to
impact the transaction, and GrandVision believes that the
transaction will be closed within the previously announced
timetable.
Postponement of Annual General Meeting
In view of the recent developments surrounding the COVID-19
virus and GrandVision’s concern for the health of its shareholders,
management, supervisory board members and employees, the AGM that
was to be held on 24 April 2020 has been postponed to 30 June 2020.
According to the statutory notice period, the AGM agenda will be
published on 19 May 2020.
- GrandVision COVID 19 press release