Fielmann: expects external sales growth of +8% in the first half of 2022
The first six months of 2022 were strongly influenced by a prolonged Covid-19 pandemic as well as the impact of the war in Ukraine. In this difficult environment, the Fielmann Group expects strong growth in online sales with its Vision 2025.
Market environment H1/2022
During the first half of the year, the ongoing Covid-19 pandemic resulted in continued restrictions, record sick leave rates among employees and low footfall in most of our markets. This situation persisted until Q2/2022, especially in Germany and Austria. While the pandemic has continued to negatively impact our sales levels, the Fielmann Group recognizes the exemplary work of its staff in the stores. To take into account the lack of qualified personnel in optical and acoustical retail, we have increased and adjusted salaries in several markets. Across all functions, this resulted in additional personnel costs in the first half of 2022 of around 22 million euros.
Since February 2022, the consequences of the war in Ukraine have impacted our operations across Europe. The Fielmann Group acts as a responsible family business: we have offered job guarantees to all of our 269 Ukrainian employees. Dozens of people who fled abroad received offers of training and employment. For all refugees arriving from Ukraine, Fielmann and ZEISS carried out a 3-month solidarity initiative: more than 80,000 Ukrainians received a pair of individually assembled glasses free of charge in Fielmann stores. ZEISS covered the lenses and Fielmann provided the frames, staff and services. Although our operations in Ukraine have suffered sales declines of up to 90% on a monthly basis, we continue to support our employees who remained in the country by paying 100% of salaries. As of June 30, 2022, 35 of our 36 Ukrainian stores have reopened, with many returning to pre-crisis business levels.
Business development H1/2022
In 2019, we announced our Vision 2025 which builds on our customer-centric business philosophy and targets an average sales growth of +5% per year through the digitalization and internationalization of our family business. We are proud to have achieved this goal since 2019 – despite the effects of the Covid-19 pandemic and the war in Ukraine on our business. According to the latest forecasts, external sales in the first half of 2022 will reach 989 million euros in the first six months of this year (+8% compared to the same period last year) while consolidated sales increased to approximately €851 million (previous year: €789.6 million).
While this sales growth is in line with our Vision 2025 trajectory, our cost structure in 2022 had been forecast for more dynamic growth. Consequently, our profitability has been disproportionately affected: for the first half of 2022, we expect profits to have reached around 89 million euros (previous year: 96 million euros), which corresponds to an EBT margin of 10.4%.
In terms of our main product categories, eyeglasses and hearing aids recorded high single-digit growth, while sunglasses and contact lenses benefited from the development of our omnichannel platform, with growth well over 20% over last year. However, contact lenses and sunglasses contributing to the lower margins, the change in the product mix had an impact on the gross margin of 13 million euros.
Marc Fielmann, CEO of the Fielmann Group: “Thanks to our exceptional customer service and our superior omnichannel platform, we are delivering constant growth in an unstable environment. We are particularly pleased with the development 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 a growth of +31% compared to last year.”
Fielmann Group management is concerned about the current market environment. The prolonged Covid-19 pandemic, the impact of the ongoing war in Ukraine, persistently high levels of inflation and rising interest rates are all negatively impacting consumer confidence while fueling inflation costs. In this environment, we are counting on an evolution for the whole of the year which corresponds to the pessimistic scenario communicated in our Annual Report. We update our guidance for fiscal year 2022 with external sales of approximately €2 billion (prior year: €1.94 billion), consolidated sales of approximately €1.8 billion ( previous year: 1.68 billion euros) and an EBT of 190 million euros (previous year: 209.7 million euros).
Fielmann Group management is taking steps to maintain its strong sales trajectory while increasing the group’s EBT margin to at least 16%, as communicated in our Vision 2025. At our Annual General Meeting on July 14, 2022, we will report of our strategic initiatives that will drive profitability in the short and medium term.
In the long term, we remain optimistic: in times of uncertainty, people buy from companies that offer excellent service and guaranteed quality at the best prices – in the eyewear industry, that’s the Fielmann Group.
Hamburg, 04 July 2022
Board of directors