(Adjusted) EBITDA development

Adjusted EBITDA increased by 5.0% or 6.7% at constant exchange rates to €537 million in 2016 (2015: €512 million) with 7.3% from organic growth and a negative contribution of 0.6% from acquisitions. The adjusted EBITDA margin increased by 24 bps to 16.2%. Excluding acquisitions, the EBITDA margin would have increased by 80 bps to 16.8%.

Adjusted EBITDA growth and margin expansion were driven by a combination of comparable growth, further efficiency gains through the implementation of our global capabilities and a higher share of Exclusive Brand frames in our sales mix.

In the G4 segment, adjusted EBITDA increased by 5.0% to €423 million (2015: €402 million) or 6.8% excluding the devaluation of the British pound. The adjusted EBITDA margin increased by 100 bps to 21.5% in 2016 (FY15: 20.4%), benefiting from efficiency gains from the continued roll-out of our global capabilities as well as a higher share of Exclusive Brand frames in the sales mix.

In the Other Europe segment, adjusted EBITDA increased by 4.0% to €138 million (2015: €133 million) or 4.9% at constant exchange rates. The adjusted EBITDA margin increased by 18 bps to 15.3% driven by revenue growth, efficiency gains and a higher share of Exclusive Brand frames within the sales mix.

In the Americas & Asia segment, adjusted EBITDA increased by 29.2% to €11 million (2015: €8 million), or 41.6% at constant exchange rates. Organic EBITDA growth was 119%, while acquisitions had a negative impact of 78%. Adjusted EBITDA growth in the segment was achieved through better operating leverage enabled by the growing store footprint, and roll-out of our global capabilities.

Other reconciling items primarily consist of corporate costs not allocated to specific regions and amounted to €34 million in 2016, compared to €32 million in 2015.

Adjusted EBITDA

in millions of EUR
(unless stated otherwise)

2016

2015

Change
versus
prior year

Change at
constant FX

Organic growth

Growth from acquisitions

G4

423

402

5.0%

6.8%

6.2%

0.5%

Other Europe

138

133

4.0%

4.9%

3.9%

1.0%

Americas & Asia

11

8

29.2%

41.6%

119.2%

-77.6%

Other reconciling items

- 34

- 32

Total

537

512

5.0%

6.7%

7.3%

-0.6%

Adjusted EBITDA margin (%)

2016

2015

Change versus prior year

G4

21.5%

20.4%

100bps

Other Europe

15.3%

15.1%

18bps

Americas & Asia

2.4%

2.3%

9bps

Total

16.2%

16.0%

24bps

Reported EBITDA increased by 3.0%, from €506 million in 2015 to €522 million in 2016. This increase also reflects the inclusion of exceptional and non-recurring items for a total of -€16 million recorded in 2016, which were mainly related to acquisition costs for recent acquired businesses and integration costs following the merger of the Italian business. Further costs resulted from legal and regulatory provisions as well as corrections related to prior years. In 2015, non-recurring items were -€5 million mainly reflecting legal and regulatory provisions, and costs related to the IPO in 2015, including its effect on the valuation of the long-term incentive plans and some other items, which were partially offset by a benefit related to changed pension calculations in the Netherlands.

A reconciliation from adjusted EBITDA to Operating result for 2016 is presented in the table below.

Reconciliation EBITA, EBITDA, adjusted EBITDA and operating result

in millions of EUR

2016

% of revenue

2015

% of revenue

Adjusted EBITDA

537

16.2%

512

16.0%

Non-recurring items

- 16

-0.5%

- 5

-0.2%

EBITDA

522

15.7%

506

15.8%

Depreciation and amortization of software

- 127

-3.8%

- 121

-3.8%

EBITA

395

11.9%

385

12.0%

Amortization and impairments

- 37

-1.1%

- 32

-1.0%

Operating result

358

10.8%

353

11.0%