Essilor Luxottica

Good morning everyone and welcome to Essilo Luxottica's full year 2022 results presentation. It's Giorgio Ianella speaking from the investor relations team. I'm here with Francesco Milleri, chairman and CEO of the group, Paul Dusayan, deputy CEO and Stefano Grassi, CFO. Following their presentation, we'll have a 30-minute Q&A session. If you want to make questions, please press star followed by five. We kindly ask you to limit your questions to a maximum of two. With that, I leave the floor to Francesco Milleri.

Good morning to everybody. Thanks for joining us today and thanks for the interest you continue to show in Essilor Luxottica. I am pleased to be here to celebrate with you our progress on the group's integration journey, the development of our network company model, as well as the sound financial performance of the last year. 2022 has been a year of records for our group in revenue, operating income and net profit. Our chairman, who continues to inspire us, would have been proud of that. Looking at numbers, last year we managed to grow the total revenue of our group by 3 billion euros, 1.6 at cost and currency. The pace of growth of 7.5% at cost and currency in the full year were consistent with our long-term target. The adjusted operating income was on track with 11% growth versus 2021 and the margin up to 16.8%, progressing by 70 basis points. Stefano will elaborate further on that. I'd just like to highlight here that the new year has started strong, with a robust growth of sales so far. Talking about integration, we have accelerated our former Grand Visions banners. which rose overall 9% in same store revenue in the full year, even slightly faster than the rest of the group's retail network. At Grand Vision, we have found talents and capabilities in the teams with a good execution in store. We believe that we can further improve These banners' performance thanks to a better assortment as well as the support from the group central team in store operations, marketing and digital communication. The strategic fit of Grand Vision into the Essilor Luxottica platform couldn't be more evident. With regards to product innovation, we move ahead with our lens launch pipeline, rolling out Stellast in Myopia Management to many new markets globally, and launching at Mido Varilux XR, the new progressive lens generation powered by artificial intelligence. Paul will elaborate further on that. Following the record 15 years renewal with Armani announced in September last year, we also managed to further enrich our unique branded frame portfolio, signing new multi-year licensing agreements with the well-known brands such as Brunello Cucinelli, Ferrari and Swarovski. I am also happy to announce that we have just renewed our long-term partnership with the US leading department store Target. We have made progress also with our global supply chain. Capillarity and flexibility are the new guidelines to respond to surging geopolitical instability. supply chain disruption, energy and transportation cost volatility. We are investing in new manufacturing and distribution hubs in Mexico, Poland and Thailand. Today we operate more than 650 production sites globally for lenses, frames, instruments and machinery, fully integrated to maximize the system flexibility and reactivity in moving flows from one to another. Last, we have also been extremely active with M&A, which is a key part of our growth strategy. Last year, we acquired Wallman, completed the acquisition of Shamir, and bought 50% of SideGlass Vision in joint venture with Cooper Companies. All these assets bring to Essilor Luxottica additional distinctive capabilities and are expected to materially contribute to its performance. And more is to come soon with bolt-on acquisitions. Behind all that, today we are closely focused on the increasing role of technology in eye care and eyewear products. We want to play a leading role in this game-changing field, leveraging wearable technology and artificial intelligence in partnership with the biggest tech players. Our increasing investment in breakthrough technology like lamination, high tracking and wayguide open multiple new applications on push the boundaries of our business, extending our influence to many other industries. On top of our mission to eliminate uncorrected poor vision in one generation worldwide, we want to advocate the right to see as we believe that the good vision is a basic human right. In doing so, we join forces with governments, the United Nations, the World Health Organization, as well as the NGOs partnering with one site, the Silor Luxottica Foundation. With that, I hand over to Paul who will walk you through the group operational highlights of last year.

Thank you Francesco and good morning everybody. I am very pleased to be here with you today to deliver our full year 2022 results. As Francesco already mentioned, it was an outstanding year and this success is very much due to the hard work, dedication and passion of our 190,000 colleagues across the globe. Each and every one of them gave their contribution and for that we would like to dearly thank them. we have really become one company with a clear organization network rooted in the profound commitment to our mission and building a common culture. Today, I would like to focus on Essilon Luxottica products and brands supported by the largest R&D organization of the industry. 2022 and 2023 are a testimony of this, delivering rich innovation on our key categories. On the vision care side, we have launched a new state-of-the-art coating range, not only for our own leading brand, Chrysal, with the Sapphire HR, but also Shamir, which has now fully joined our family, as you know, and has released its new Glacier expression coating. The category represents an important asset as it enters in symbiosis with our other lens brands, enriching particularly the value of our single vision offering. As you know, we are at the start of an exciting journey to develop a new life-changing category for the benefit of the younger generation. Myopia management. In September 2022, we released the result of our three-year clinical trial for STELES, demonstrating the conclusive evidence that it remains effective in slowing down the myopia progression of children, saving more than one director on average over the trinium. The rollout is progressing and sales are going fast, especially, of course, in countries with a high prevalence of myopia, such as Greater China, where we have now doubled the number of new kids wearing stylists from the prior year. 2023 is still young, but we have already major news to share with you. Just a couple of weeks ago, we have unveiled the newest generation of Varidux, the Varidux XR series. Years of research have gone into this project and have culminated in the development of the best progressive lens to be found on the market yet. People today face an information overload, and for current progressive lens wearers, multitasking, especially in motion, is still an issue. With the power of artificial intelligence leveraging more than 1 million real life data, the new technology addresses this pain point by predicting the visual behavior of the patient and delivering an outstanding volume of vision in terms of precision and fluidity. The commercialization is now underway of the product and will start in EMEA in the second quarter, followed by North America, Brazil, Asia Pacific, and the rest of Latin America during the remainder of 2023. Now, let's turn to our frame portfolio, where you will also find strong momentum. Reban. Several new features have been introduced in its latest collections leveraging the capabilities of our recent acquisitions and partnerships. Here are a couple of examples. The brand has added its first Ray-Ban Wayfarer sustainable collection. The frame mirrors the original iconic style from the outside, but actually contains 67% bio-based materials on the inside and comes with a green packaging. The bioacetate used in this collection was developed with our partner Mazzucchelli. Reban has also recently introduced the Transition Signature Gen8 technology for all its icons fitted with the high-performance mineral lengths of Barberini, another one of our recent key acquisitions. This example shows you how we put together three of our most recognizable brands to play, Reban, Transition, and Barberini. An example of how the combined company brings concrete benefits to consumers. Oakley. a brand which has delivered consistent growth over the last years. Its success is underpinned by its attractive frame collection and powerful prism lens technology, combined with the endorsement of some of the best athletes of current times as its brand ambassadors. Just think about it. The American football player Patrick Mahomes, MVP and winner of this year's Super Bowl, The Alpine skier Michaela Schifrin, holding the title of most female World Cup wins of all times. And the football player Kylian Mbappe, World Cup champion 2018 and finalist in 2022. A huge boost to the brand's identity. From a more strategic standpoint, we are implementing several initiatives to sharpen our overall brand portfolio. Over the years, we have entered into a number of high-impact collaborations with our proprietary brands. Ray-Ban with Ferrari, Oliver's People with Brunello Cucinelli, Persol with Dolce & Gabbana, These collaborations have proven to be a powerful mean to further develop our license portfolio, as witnessed last year, when some of them have turned into new full-blown license agreements, such as Brunello, Cucinelli and Ferrari. On top of this, we are enriching our license portfolio not only by extending it to new partners, but also by expanding the product range for our existing ones. Example, we have launched a new line of snow goggles signed Prada, Miu Miu and Armani featuring the Oakley technology. We have also introduced a wide range of new designer kids frame to support the category and the growth of Stelest. Our work on the licensed brand has paid off. 2022 was a record year for our luxury frame, driving the performance in both retail and wholesale. Last year, we have worked on our core to shape the future that lays ahead of us. While we have made big progress on the integration of the three industry champions, unleashing our synergy potential and targets, we also kept investing heavily in our product and infrastructure to bolster the growth of the years to come. All this with a clear objective in our mind. bring good vision to everyone being aware that 2.7 billion people in the world still suffer from uncorrected poor vision today our advocacy and philanthropic actions over the years have created more than 22 000 vision care access points able to reach close to 600 million people in underserved communities and the efforts have been regrouped in the one-site Essilor Luxottica Foundation in 2022 with great success. The execution of our sustainability roadmap is also progressing and we will have more to share during the course of 2023. Our teams are aligned with our goals and our strategy. as demonstrated by the strong participation in our employee shareholding programs, joined by 72,000 colleagues, representing almost 40% of the total of us. The new identity of Young et Silent Luxe Tica is taking shape. With that, I will hand it over to Stefano.