Grandvision: Sounds fundamentals but in the optical industry acquisitions often cause dilution

At the conference call yesterday, management discussed GrandVision’s key pillars (to deploy global capabilities, drive comparable growth, global expansion, etc.), which will remain the growth catalyst for 2016 onwards. Most analysts’ questions concerned the newly-consolidated US chain For Eyes, the ramp-up of the group’s TechCenters (Rx labs) and the capex budget. In light of a higher-than-expected dilutive impact from acquisitions, we have fine-tuned our 2016-17 assumptions (-2%) but the underlying margin performance (adj. EBITDA: +60bp in 2015) clearly confirms that the business model, which relies on scale, is efficient. FV adjusted to EUR29 vs. EUR29.5 but Buy recommendation confirmed.