Annual Report 2018

Enterprise Risk Management

In general, GrandVision adopts a prudent approach to risk-taking.

The company’s approach to risk cannot be captured in one figure or formula. Risk boundaries are set by the company’s strategy, values, policies and corporate directives.

The approach to risk differs per type of risk:

  • Strategic risk – the company is prepared to take above-average calculated and carefully weighted risk in pursuing its growth ambitions
  • Operational risk – the company strives to minimize risks relating to the implementation of its strategy but is also not afraid to take decisive action in its business operations in order to continuously improve customer satisfaction
  • Financial risk – the company has adopted a prudent financing strategy, aimed at maintaining enough financial headroom to continue investing in the pursuit of its strategic objectives. The company also has set very low tolerance levels with regards to deviations in internal controls and financial reporting
  • Compliance risk – the company strives for full compliance with all legal, regulatory and tax requirements and does not tolerate non-adherence to its corporate governance policies

GrandVision has implemented an annual risk management cycle, in which identification of key risks and developments during the period are addressed in a continuous manner. During the annual budgeting process, all country management teams and central functional teams conduct risk assessments. The key risks are updated based on these assessments and on an evaluation of the outcomes of the risks already identified.

During 2018, approximately 150 risks were identified in this process. These were classified and consolidated, using a quantification method to weigh potential impacts and likelihoods of the different risks.

In addition, the identified risks were benchmarked against risks identified by other retailers to ensure that even more general industry risks are included in the evaluation. The final key risk categories have been reviewed and approved by management, the Audit Committee and the Supervisory Board.

During the year, developments are monitored as an integral part of the performance management and internal controls/reporting cycles and necessary actions are taken to mitigate the identified risks.

Strategic risk

Risk area and possible impact
How does GrandVision mitigate this risk?

Increased focus in retail on price as the main differentiator as a result of full transparency and availability of products online. This requires GrandVision to continuously adapt its retail price policies in order to stay competitive.


GrandVision is continuously investing in a portfolio of high-quality Exclusive Brands that are appealing to its customers. In addition, we invest in (digital) marketing campaigns and added-value sales promotions that enable us to remain price competitive. To support this strategy, we relentlessly pursue cost efficiencies in everything we do, from purchasing products to store and back office operations, to keep our retail prices competitive.


Becoming less relevant to our consumers, due to our products and services and the way in which they are offered. Declining street traffic due to changing consumer habits with ongoing digitization that requires new tools and new skills.


To respond to this risk from occurring, we invest in our people, products and stores that enable us to remain relevant to our customers. Our investment in the digital omni-channel customer journey, whereby the customer decides how, when and where they want to buy from GrandVision, preserves our value proposition.
By monitoring eye correction alternatives that we believe will very slowly take hold as many customers prefer to wear glasses over solutions that involve surgery.


Unfavorable economic or political developments as well as natural or environmental disasters may occur in our markets.


Our diversified portfolio in more than 40 countries is a strong mitigating factor against individual country or regional economic risk. GrandVision monitors these risks through the normal course of business and uses a range of measures such as commercial promotions, financial hedging, internal reorganizations or cost savings, to counter the potential impact in the near term.
We have Business Continuity plans in place in case of natural disasters or other calamities, in addition to specific insurance that will help to reduce the financial impact of such events.
Our CSR focus is helping us have a broader perspective on non-financial contributors to our business and the impact we have on our environment.


Acquisitions need to be integrated into GrandVision effectively to develop a future platform for growth.


Our strategic focus and strong management attention to developing growth platforms in the USA and China and to further develop the Italian market, remain unchanged from previous reporting. Integration of new acquisitions is key to our success and therefore we will set-up a dedicated team for integration and harmonization.

Operational Risk

Risk area and possible impact
How does GrandVision mitigate this risk?

Inability to recruit, train and retain qualified management and suitably skilled employees to support our expansion. In addition, the process of transition of top management of GrandVision needs to be managed carefully.


Our People First program is focused on investing in the GV Academy to train our employees, and in systems and processes that allow us to deliver the highest standards in quality and customer service.
In 2018 multiple steps were taken to attract, develop and retain talent at all levels of the company. The GV Academy supports training programs in all countries, including e-learning tools.
We establish strong connections with universities and higher education foundations and are exploring the transnational leveraging of education. In our recruitment process we have an eye for diversity and equal opportunity to further grow and mature the GV culture.


Product purchasing prices of frames, lenses, sunglasses and contact lenses can increase, resulting in margin pressure or the requirement to adjust our commercial policies.


GrandVision has multi-year contracts in place with key suppliers after competitive tender processes.
In addition, the increasing centralization of our supply chain and the reduction in the number of key suppliers allows us to harmonize our portfolio and achieve economies of scale.
The margin impact as a result of currency fluctuations related to the purchasing of products, is financially hedged.


Risk of suboptimal implementation of global capabilities, including supply chain operations, will result in inefficiency, declining product availability and loss of confidence.


The design of our product value chain has further matured in order to further support our end-to-end processes, with special attention for customer fulfillment and product categories.
GrandVision will continue to harmonize and improve the product portfolio, resulting in further benefits to the company .


The inability of GrandVision to develop customer-relevant digital elements throughout the omni-channel customer journey. The organization needs to develop new skills in marketing, sales, operations and support functions.


GrandVision has installed and is continuing to expand a center of excellence in digital marketing and customer experiences. Each country has a clear digital roadmap which will be implemented with the support of the global center of excellence.
The digital capabilities being developed consist of both basic elements as well as innovative projects, which are aimed at improving customers’ experience.
We are investing in e-commerce, organically and through acquisitions.

Financial Risk

Risk area and possible impact
How does GrandVision mitigate this risk?

Significant changes in financial markets that impact the financial condition or performance of the company.


GrandVision has a €1.2 billion credit facility in place that is up for renewal. We also maintain a minimum €200 million of financial headroom to manage our liquidity position on a daily basis.
We enter regularly into discussions with our main suppliers to mitigate currency impact via various means like sharing mechanisms, changing sourcing location or adjusting the invoicing of currency prices. Further mitigation is done by regularly entering into FX contracts. GrandVision does not hedge translation risk.
We have Group insurance policies that are reviewed regularly.


Currently there are programs implemented to further increase our operating effectiveness. Among these programs are system implementation that could give rise to internal control lapsing if not managed properly.


By taking a portfolio approach, applying consistent project methodology and governance, and placing ownership of each of them at top management level, GrandVision is able to prioritize and optimize resource allocation across its major projects to ensure they deliver on their objectives.

Compliance Risk

Risk area and possible impact
How does GrandVision mitigate this risk?

Risk of impact on business performance as a result of changing healthcare reimbursements or optical operating regulations in key markets.


GrandVision’s portfolio is protected by operating in multiple markets with different regulations.
Compared to independent opticians, GrandVision is better capable of coping with these changes and is able to capture market share in markets that go through a change. A quality assurance and regulatory affairs function is in place to provide assurance over existing activities and ensure compliance is achieved. GrandVision operates successfully in many countries where no eye care reimbursements exist.
In the short term, changing healthcare regulations can impact GrandVision’s results. But in the longer term, it supports our position as a high quality, affordable prices retailer and can enable us to gain market share in deregulating markets.


Failure to comply with internal and external policies, rules and regulations, including the protection of all the company’s tangible and intangible assets.


We are committed to complying with the laws and regulations of the countries in which we operate. In specialist areas, the relevant teams at global, regional or local level are responsible for setting detailed standards and ensuring all employees are aware of these and are trained sufficiently to comply with regulations and laws that are relevant to their roles. A GrandVision Compliance Framework is in place that sets out policies, reporting, e-learning, training requirements and localization guidelines.
Employees have taken the Code of Conduct and whistleblower procedure e-learning module. In addition, competition law compliance training and e-learning was provided globally to all relevant employees. We place strong emphasis on these Ethics & Compliance topics internally via tone at the top, policies, e-learning, audits, communication, internal controls and focus on managing external expectations.