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SCHIPHOL, the Netherlands —GrandVision (EURONEXT: GVNV) reported that its first quarter revenue of €926 million declined by 4.4 percent at constant exchange rates, strongly impacted by the coronavirus pandemic. Comparable store growth was down 8.2 percent, reflecting a negative COVID-19 impact in the second half of March, following a strong start to the year with 5.5 percent comparable store growth in January and February. The group reported that adjusted EBITA decreased to €41 million from €107 million in 1Q19 due to the sharp decline of revenue in the second half of March. In the month of April 2020, COVID-19 caused revenue reduction of more than 80 percent across GrandVision's business, the company said, noting that its COVID-19 contingency plans have been developed and are starting to deliver a mitigating effect.

Operating 7,320 stores, GrandVision is one of the world's largest optical and sunwear retailers, with many banners across the world.

Stephan Borchert, GrandVision's CEO commented, "Our business has been facing unprecedented challenges over the past weeks due to the global outbreak of COVID-19. In compliance with governmental measures and health authority recommendations around the world, we either fully closed our stores or have strongly reduced the opening hours and services offered, and this in almost all countries we operate in. As a result, we have seen a significant decline of revenue and profit, in particular since mid-March.

"Our primary focus lies on managing these challenges. As the crisis developed over the course of March, we have adjusted our plans and actions throughout and our contingency plans are beginning to deliver first mitigating effects. We remain confident in our ability to preserve liquidity and secure additional funding, also in the event of a prolonged COVID-19 crisis."

Borchert continued, "Even though some countries are gradually beginning to lift COVID-19 measures and allowing retailers to reopen stores, we are not expecting a quick recovery due to enhanced health and safety protocols and general consumer uncertainty resulting in lower customer traffic. However, we have taken all necessary measures and efforts to support operational ramp-up activities with the aim of enabling all our stores to serve our customers to the best possible extent under the applicable safety protocols and local regulations."

The company also said that its net debt slightly increased to €755 million by the end of March, from €753 million at year-end 2019. GrandVision has decided not to schedule any dividend distribution proposal for the agenda of the annual general meeting of June 30, 2020.

Said Borchert, "Our e-commerce activities have shown great resilience and we have seen a sharp increase of online revenue of 85 percent in the first quarter, particularly driven by e-commerce sales through our banner websites with growth of almost 250 percent. I have great confidence in the resilience of our business, the structural drivers of our industry and the strength of our local brands. The actions we are taking and are preparing to take to protect our employees, our customers and our business will help us not only to continue offering our customers the best optical care through our more than 7,300 stores but also to retain our strong position in optical retail."

The global spread of the coronavirus is leading to a significant number of store closures in many markets, restrictions with regards to openings hours and the performance of essential in-store services in many other regions as well as a significant reduction in traffic due to consumer uncertainty. In compliance with governmental measures and health authority recommendations around the world as of April 30, 2020, approximately 60 percent of GrandVision's stores were fully closed and 40 percent were partially open but impacted by various degrees of sales limitations and a significant reduction in traffic.

Given the adverse impact of store closures and sales restrictions on its business, GrandVision is expecting a significant reduction of revenue and to report a loss for the second quarter 2020. Due to the dynamics and uncertainties of the COVID-19 developments, the company said it would "refrain from from issuing a new outlook for the year 2020."

At the end of April, some countries, including Austria, Denmark, Germany and Norway, have started to relax COVID-19 measures, allowing stores to reopen under certain conditions. "This means we are generally able to serve our customers but may be restricted in providing personal in-store services, such as eye tests. We are therefore proactively working with local authorities and country specific optical retail associations to implement health and safety protocols to provide a safe environment for our customers and eyecare professionals. For this purpose, we are, for example, equipping our stores with protective dividers and providing our staff with personal protective equipment. This will enable us to conduct eye tests while complying with applicable health and safety standards."

Even as countries are gradually beginning to lift COVID-19 measures and allowing retailers to re-open stores, GrandVision said it is not expecting a quick recovery due to social distancing measures. As the company said on March 20, it has developed contingency plans to safeguard the financial health of the company. The implementation of these plans is starting to deliver a mitigating effect on the development of the company's cash position. A dedicated cross-functional task force has developed various scenarios with regards to the length and severity of the COVID-19 impact in different markets, allowing GrandVision to monitor developments and apply or adjust plans in line with these scenarios. In addition, GrandVision is planning for a conservative ramp-up scenario based on the current knowledge that ramp-up will begin slowly given the continued sales restrictions and reduced traffic.

At the end of 1Q20, GrandVision’s net debt position was €755 million, compared to €753 million at year-end 2019, with borrowings of €994 million and cash and cash equivalents of €240 million.

In 2019, GrandVision renewed its Revolving Credit Facility (RCF) of €1,200 million until 2024. During March, GrandVision started to draw from its RCF, with funds both applied to refinancing of maturing commercial paper and adding immediately available liquidity to the company. As of closing of March 2020, a total of €705 million was drawn under the RCF with the remainder debt obtained in short term flexible finance, among others the commercial paper market. The company said, "We are also actively engaging with our relationship banks and have proactively informed them of our strategy to preserve cash and financing. We therefore remain confident in our ability to retain liquidity and secure additional funding, also in the event of a prolonged COVID-19 crisis."

GrandVision stated it 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 percent interest in GrandVision within 12 to 24 months from the announcement date of July 31, 2019. "Together with EssilorLuxottica and HAL, we are working on fulfilling all relevant requirements under the transaction documentation, including obtaining the requisite regulatory approvals and in compliance with our business conduct obligations. GrandVision believes that the transaction will be closed within the previously announced timetable." As previously disclosed, the transaction is subject to various other conditions, including GrandVision's net debt at closing being less than € 993 million. GrandVision's main shareholder, HAL, has the right to provide a capital injection to cure a potential net debt position in excess of that limit at closing of the transaction.