Annual Report 2019

Enterprise Risk Management

GrandVision adopts a sensible risk-taking approach, which is not defined by one figure or formula. We set our risk boundaries according to our strategy, values, policies and corporate directives. And our approach to risk depends on the type of risk:

  • Strategic risk: We take above-average calculated and carefully-weighted risk as we pursue our growth ambitions.
  • Operational risk: We minimize risks related to our strategy implementation, and take decisive action in business operations to continuously improve customer satisfaction.
  • Financial risk: We adopt a prudent financing strategy to maintain sufficient financial headroom to continue investing in the pursuit of our strategic objectives. We also set very low tolerance levels to deviations in internal controls and financial reporting.
  • Compliance risk: We strive for full compliance with all legal, regulatory and tax requirements, and do not tolerate non-adherence to our Corporate Governance policies.

At GrandVision, we have implemented an annual risk management cycle, which identifies key risks and developments that we continue to address. During the annual budgeting process, all country management and central functional teams conduct risk assessments. Based on these assessments and upon an evaluation of the outcomes of the already identified risks, we update the key risks.

In 2019, we identified approximately 150 risks in this process. They were classified and consolidated, using a quantification method to weigh potential impacts and likelihoods of the different risks. In addition, these risks were benchmarked with risks identified by other retailers to ensure that more general industry risks are included in the evaluation. The final key risk categories were reviewed and approved by management, the Audit Committee and Supervisory Board.

During 2019, developments were monitored as an integral part of the performance management and internal controls and reporting cycles and we took the necessary actions 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 our retail price policies to stay competitive.


We continue to invest in a portfolio of high-quality Exclusive Brands that appeal to our customers. To remain price competitive, we invest in digital marketing campaigns and added-value sales promotions. To support this strategy, we persistently pursue cost efficiencies in everything we do, from purchasing products to store, webstore and back office operations to maintain our competitive retail prices.


Becoming less relevant to our consumers due to our products and services and how they are offered. Declining street traffic due to changing consumer habits with ongoing digitization plays an increasing role and requires new tools and skills.


We invest in our people, products and stores to remain relevant to our customers. Our investment in the digital omnichannel customer journey lets customers decide how, when and where they want to buy products from GrandVision, and preserves our value proposition. We also monitor eye correction alternatives that we believe will very slowly take hold as many customers prefer to wear glasses over surgical vision solutions.


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. We monitor these risks through the normal course of business and apply measures such as commercial promotions, financial hedging, internal reorganizations and cost savings to counter the potential impact in the short term.

Our CSR focus also helps us to have a broader perspective on non-financial contributors to our business and our environmental impact.

Operational Risk

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

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


The design of our Product Value Chain has matured to support our end-to-end processes, with special attention for customer fulfilment and product categories.

Our business continuity plans are in place in case of natural disasters or other calamities, in addition to specific insurance that will help reduce the financial impact of such events.

We continue to harmonize and improve our product portfolio, which further benefits our company.


Inability to recruit, train and retain qualified management and suitably skilled employees to support our expansion.


We establish strong connections with universities and higher education foundations and explore transnational leveraging of education. In our recruitment process, we focus on diversity and equal opportunity to further grow and mature our GrandVision culture.


Retention of key personnel in vital positions is becoming an increased risk for GrandVision. A lack of focus or disruption may result in unplanned employee turnover.


Our redefined performance and talent management cycle and development conversations form the first level of defense in achieving employee satisfaction. To retain employees, we have secured key positions in our organization. In addition, management organizes employee information sessions at every level in the company and manages uncertainty with feedback sessions. This practice supports an open culture.


In the brick-and-mortar retail market, competition for prime spots in new malls or on high streets leads to the risk of rent increases and inability to secure optimal locations.


Our dedicated Operations teams build strong relations with landlords and project developers on a country-by-country basis. Thanks to our internal processes, countries work closely with group departments on real estate opportunities, and make timely decisions with the right level of attention for legal and compliance matters.


Product purchasing prices of frames, lenses, sunglasses and contact lenses can increase, which results in margin pressure or requires adjusting our commercial policies.


GrandVision has multi-year contracts with key suppliers thanks to holding competitive tender processes. In addition, the increasing centralization of our supply chain and reduction of key suppliers allows us to harmonize our portfolio and achieve economies of scale.

Financial Risk

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

The volatility of foreign currencies due to economic and political developments may reduce our profitability in certain markets


We have regular discussions with our main suppliers to mitigate currency impact through various means like sharing mechanisms, changing sourcing locations or adjusting invoicing currency prices. We further mitigate risk by regularly entering into FX contracts.


We operate stores and other activities in many countries. As tax laws and regulations differ per country and can be complex, we run an inherent risk of deviating views on the interpretation of tax legislation by local tax authorities.


The GrandVision Minimum Control Standards have a dedicated section stipulating internal controls to address tax-related risks. In addition, the Global Tax department assists local and divisional management in complying with tax requirements and monitoring the effectiveness of the internal tax-related controls as well as the tax position of the group.

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.


Our portfolio is protected by operating in multiple markets with different regulations.

Compared to independent opticians, we are better equipped to cope with these changes and capture market share in changed markets.

A quality assurance and regulatory affairs function provides assurance over existing activities and ensures that we achieve compliance.

We successfully operate in many countries where eye care reimbursements do not exist.

In the short term, changing healthcare regulations can impact our results. And in the long term, it supports our position as a high-quality, affordably-priced retailer and can help us gain market share in deregulating markets.


Enforced data privacy regulations in the jurisdictions in which we operate lead to more requirements that can be put into place.


Our global policies and guidelines address data privacy compliance requirements. Using these policies, we manage compliance with data privacy legislation on a country-by-country basis, which is supported by outside counsel as needed.

We also perform internal assurance activities to ensure such activities remain compliant and to continuously improve on specific areas.