Fielmann Group Ag U/Adr

Good day, ladies and gentlemen, and a warm welcome to today's analyst and investor call of the Fehlmann Group AG following the publication of the financial year figures of 2024 and the first quarter results of 2025. And with this, I'm happy to hand over to Fehlmann CFO Steffen Betje.

Yeah, thank you very much, Sarah and everybody. Hello and welcome. Good afternoon or good morning to the US and welcome to our first Earnings Call in 2025. I'm here with Mark Fehlmann, our CEO. Most of you know me. I'm Stefan Baecher, Fehlmann Group's CFO. And as I said, I'm here with Mark today and I'm going to hand over to him for an introduction to the company and to our financial year 2024 results.

Hello everybody from my side as well. Warm welcome. Thanks for joining today's call. We will give you a very short update here in the beginning about our group. I'll keep this really brief because most of you do actually know Fielmann Group already quite well. So I'll keep the introduction short. and then we'll hand over to the main points of today which is of course the 2024 full year numbers and the Q1 numbers and obviously we'll have plenty of time afterwards after we presented our vision 2025 which will conclude this year as you know And then afterwards, we're going to have plenty of time for your questions. Just a very quick run through of who the Fielmann Group is. We are a globally active vision care and audiology provider. So that means we are mainly active in optical retail, associated health care activities, primary eye care and audiology. Audiology we only do in Europe Vision Care we actually do in Europe and the United States. We count currently 29 million active customers. We have a great big family of 24,000 team members all across the world. We regularly record customer satisfaction rates of 90% and above. So that's customers saying that they are happy or very happy with us and the company generated 2.3 billion last year. In terms of geographic breakdown, here you see a bit of an overview of where we are active. So these are our sales, our retail markets. In the middle, you see the sales split down by countries. As you can see, Germany is still our biggest market with 63%, followed by Switzerland 10%, Spain 9%, U.S. 9%. Mind you, We have only consolidated half a year of Schopko Optical last year. So the US will actually become our second biggest market this year. And the international market sales share is already at 40% in Q1. Other than the countries I've mentioned, we also are active in Austria with 4% and then all the other markets in Europe. So here we're talking about Poland, we're talking about Italy, we're talking about further markets in Eastern Europe. They make up another 5% of our sales split. Looking at the right hand side of this chart, you can see our market position. Traditionally, our legacy markets where we are still very, very strong with the market leader in the German speaking markets. So that's around 100 million inhabitants, of course, very wealthy countries. We hold a very strong number two position in Spain, a market that we've entered around five years ago. did two acquisitions, one in 2020 and then another one a couple years later. We are a very strong number two and we expect to take over market leadership in the medium term. Eastern Europe, we are number two in the overall market. There's individual markets where we are leading and in Italy we're number three. Looking at the left hand side, you see our market position in the United States, by far the largest vision care market in the whole world. Here, just two years after entering the market, we have become the market leader in the upper Midwest. So that is a market leading position in states like Michigan and Wisconsin. And again, we have a pretty strong number two or three positions if you look a little bit further towards the West. So upper Midwestern states were number two in Nebraska, in Minnesota, And we have a strong position in the Dakotas. And so this is the areas we feel pretty confident in the Midwest. And we think that we will take over market leadership in further United States in the coming years. We're not only a vision care provider and a retailer of products, but we are actually also a manufacturer. So the Fielmann Group has its own product development, design and also manufacturing organization, actually a pretty large organization. And we are highlighting this chart because I would suppose that many of you would want to know how the tariff situation affects us. So this chart is to show you guys that we actually have a manufacturing footprint across three continents. This manufacturing footprint makes us pretty flexible. In general terms, we do manufacture our main products in the countries that we are active in or in the geography. So let's say in Europe we manufacture for Europe, in the US we manufacture for the US. and we have a bigger joint venture in China, in Danyang, which is the city for ophtalmic lenses. All prescription eyewear that we dispense in the United States is actually manufactured in the United States and a large share of our ophtalmic lenses is also manufactured in the United States. where we have two facilities, one manufacturing facility in Detroit, Michigan, another one in Green Bay, United States. Those are pretty automated and very modern facilities. I'm not going to go through all manufacturing facilities, but this is basically just to tell you that we manufacture where we are present. And this is why the direct impact, and Stefan will speak a little bit more to this later, but the direct impact of the tariffs on the Fielmann Group, specifically in the United States, is very, very limited. And again, Stefan will say a little bit more to the extent of it. With that, we come to the agenda of today. We're going to walk you through the financial year. Just a quick sum up. I'm going to speak to some highlights. Stefan's going to walk you through the main numbers. We're going to then speak about the Q1 numbers. We're going to give you an outlook of 2025 and we'll wrap up by having a look back on the last five years of the Vision 2025. And as you will see, We have already reached or exceeded all goals and the last remaining goal, the profitability goal, is something we feel super comfortable in achieving this year. Let's start with the financial year 2024. Here's just some highlights. As you know, our most important KPI is on the top, customer satisfaction. We're very proud with all the change, change both from the outside and from inside our company that we have maintained a record high level of 90% in customer satisfaction across all major markets. Last year, we grew the top line to 2.3 billion. That's a 15% top line growth, about half of it organic, half of it due to the acquisition consolidations. We reached 491 million in adjusted EBITDA. That's a 23% year on year earnings growth. I think really nice also the fact that it's disproportionate so means that it was a significant margin extension yet again our international sales made a huge jump to 833 million so the total growth was 33 percent last year obviously driven by our US acquisitions but also a lot of other international markets performed really well and we're going to show you the numbers just in a bit of time iHealth checkups. This is our new telemedical offering in Europe is actually something that is growing exponentially, as I will show you in a minute. It's only been available in three countries so far. We've just started it in the recent years and it's growing a lot. And this is one of the ways that we actually move more into the direction of being a healthcare provider, a vision care provider in healthcare. Let's have a look at this last point about the healthcare. Primary eye care already today is an essential part of our offering in the United States for those of you who are not living in the United States or don't buy their glasses there. Just as a quick summary, when you buy your glass in the United States, generally you have an eye exam and an eye exam also contains a medical exam. So it's a bit different in Europe. In Europe, generally you go to your optician and you get a refraction. So you get your values measured with the exception of the UK. But in continental Europe, basically, there is nothing medical going on at the optician. In the US, that's different. The Fielmann Group employs, as of today, roughly 300 optometrists, optometric doctors who carry out 800,000 in-person examinations, so refraction, but also a medical primary eye care In Europe, as I briefly mentioned before, we started a telemedical offering. We have actually 25 contracted ophthalmologists. The program is growing a lot. We actually have dozens of further ophthalmologists on the wait list, but the system is actually very, very efficient because all the measurements are made in store by our certified opticians. And so our partner ophthalmologists have actually carried out based on the data measured in the store around 100,000 eye health checkups in the past year. The European telemedical offering is actually something that is great, has big advantages to customers, ophthalmologists and to our family business. Of course, the customers obviously benefit from easy access to primary eye care. Regular checkups are super important because they allow us to detect not only eye health diseases, but you can even detect other diseases such as strokes and avoid them through this early detection, obviously treated in time. Ophthalmologists also benefit from this system because we obviously bring more efficiency into the system by screening and triaging those patients that actually do need care. And so ophthalmologists can focus their attention on what they like to focus on, notably on taking care of patients that actually do need care and not only check up nothing, check up nothing, check up nothing. They can also be part of a new and innovative, efficient and efficient concept that actually makes our health care systems sustainable in the future. Because as those of you who've been following us for quite some time know, we actually have a big growth in demand and a shrinking supply across most major developed markets. We're closing that gap and that is appreciated by the ophthalmology community. For us as a family business, this move into vision care and telemedical offerings obviously also has a big advantage because we have a great new service that is highly appreciated by our customers. And that obviously leads also to extended customer loyalty for our opticians. It's a huge step because it upgrades their professional image. They can now take care not only of the optical needs of our customers, but they can also play a sustained role in the health of our customers. And this is super exciting to them. And for us as a company, that's great because it's a big factor that allows us to retain our skilled colleagues. And last but not least, we actually make a very cost efficient contribution to the healthcare system and this opens a lot of doors for us. We really enjoy making a positive contribution here. Here we brought along some numbers to underscore how successful the iCheckup is. Left hand side you see our store network. As you can see we have a nationwide offering in Germany and in Switzerland. In Austria we are just concluding the pilot phase and in the next weeks we will move on to a nationwide rollout of this service in Austria as well. On the right hand side, you can actually see the numbers of iHealth checkups per month. As you can see here, we are now tracking at more than 15,000 iHealth checkups per month. And what you see here is a pretty exponential growth driven primarily by two factors. Number one, in the individual stores, we see more and more customers coming in, making use of this service. And number two, obviously, we're adding the number of stores and that in combination leads to this exponential growth. We believe that probably today we already have the leading teleophthalmology platform in Europe. If this is not the case, the growth that we see right now will bring us there shortly, but probably we are already the largest provider of teleophthalmology services that we know of. What I personally find super exciting is not only the numbers that are obviously very impressive, but also what this means in the daily life of our customers and patients. So if we look at the roughly 170,000 patients that we have screened with our eye health checkup on the left hand side, You can see that around 77% of them can rest assured that with their eyes everything is okay. They get their doctor's report fine. About 22% actually do have some things that need some findings that require a medical exam and potentially further treatment. and actually 1% of the patients that we've screened, they actually have something very serious. So here we're talking already about thousands of patients that we have screened and that require an immediate medical exam and treatment. So here we're talking about very serious things. I propose very serious things just brought to customer stories along here that are exemplary of hundreds that we have seen so far. We already know of hundreds of cases where our eye health checkup has avoided blindness, the example on the top. So thanks to this checkup, we could avoid people from going blind, in this case, customer in their early 40s. And we even have non eye diseases that we can identify and prevent by referring the respective customers to immediate treatment. So in this case, customer in their mid 50s, we were able to avoid together with the colleagues in the clinics the risk of a stroke. It could be treated. And so that person did not get a stroke. And those are obviously Life changing experiences and this makes us very, very excited that we can play a role in improving our patients health. Last thing is a call out. Everyone aged 40 and over, please do tell them and please recognize that having a regular eye check is super important. Please do it at least once every two years. We don't mind if you do it at an ophthalmologist or at Fielmann. Just please do get your eyes checked regularly because it's much, much easier when you detect diseases early on. It's far more complicated when you detect them later. With eye checkups, the beautiful thing is all eye diseases are either curable or delayable. That's the nice thing about our profession. And you can even detect other pretty serious things by looking at the retina and other parts of the eye. So I highly recommend to you have your eyes checked at least every two years. And with that, this would be the highlights. I would hand over to Stefan, who will walk you through the numbers first of 2024 and then of Q1 2025.