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

Since 1 January 2016, GrandVision reports the French Solaris business in the G4 segment (instead of Other Europe) and Spain in the Other Europe segment (instead of the G4), reflecting the transfer of management responsibility for the two businesses. In accordance with this transfer, the comparative information disclosed hereafter for the G4 and Other Europe segments was restated.

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 2016 and 2015. The adjusted EBITDA is defined as EBITDA excluding other reconciling items and exceptional non-recurring items. 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. The non-recurring items in 2015 were mainly related to legal and regulatory provisions, costs related to the IPO in 2015, including its effect on the valuation of the share-based payment plans, and some other items, partially offset by the benefit related to the changed pension arrangements in the Netherlands. 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

Notes

G4

Other Europe

Americas & Asia

Total

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

13

- 110,069

Amortization and impairments

14,15

- 53,323

Operating income/loss

358,142

Non-operating items:

Net financial result

10

- 10,414

Earnings before tax

347,728

2015

Total net revenue

1,968,304

882,679

353,903

3,204,886

Adjusted EBITDA

402,467

133,177

8,186

543,830

Other reconciling items

- 32,219

Total adjusted EBITDA

511,611

Non-recurring items

- 5,468

Depreciation

13

- 107,158

Amortization and impairments

14,15

- 45,822

Operating income/loss

353,163

Non-operating items:

Net financial result

10

- 19,148

Earnings before tax

334,015

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

in thousands of EUR

2016

2015

France

600,725

586,753

Germany

473,216

451,227

United Kingdom

413,415

457,900

Other countries

1,828,721

1,709,006

3,316,077

3,204,886

Revenue in the Netherlands, the Group’s country of domicile, is €247,535 (2015: €245,700). 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 2016

31 December 2015

The Netherlands

100,474

101,745

France

491,938

491,321

United Kingdom

202,779

246,293

Italy

197,100

198,340

Other countries

990,869

958,362

1,983,160

1,996,061

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.