Essilor Luxottica

Welcome everybody. I'm Giorgio Ionella from the Investor Relations team. Thank you all for joining Esiro Lusottica's Q1 Trading Update presentation. At the end of our CFO Stefano Grassi's speech, we will have a 30-minute Q&A session. If you want to book for a question, please press star followed by five. We kindly ask you to limit your questions to a maximum of two. With that, Stefano, the floor is yours. Welcome to our Q1 training update.

We just closed a strong quarter for Essilo Luxottica with our top line in excess of 6.1 billion up 9.7% versus the first quarter 2022. If we look at our results at constant currency, we will be commenting an 8.6% top line growth in Q1. I want to remind you that this performance was achieved on top of the best quarter for 2022 where we grew our sales 11.5% at constant currency. Clearly, the picture is pretty compelling for each one of the four regions, where we see an acceleration compared to the growth that we see in Q4 of last year. But I would go probably a step farther than that, saying that within each region, both our segment, direct-to-consumer and professional solution, accelerated versus the fourth quarter trend. Clearly, a pretty remarkable quarter for us. From a North America perspective, our top line was up 7% on top of an 8% that we delivered last year. Both our operating segments were on a high single-digit growth trajectory. If we look at our professional solution, we are pleased to see growth driven by our independent ECP and our top accounts, while our sport channel decelerated in the Q1 due to a couple of accounts that were closed for noncompliance with our map policy. From a product category standpoint, our lens business was the primary driver of growth during the course of the first quarter, with Varilux and Shamir lenses very much on the spotlight. Before moving to data to consumer, I want to make a last comment on our EL360 program, the program that we launched and customized a couple of years ago for our independence. The program continues to be extremely successful, I would say, with a stronger performance of both lenses and frames for the ECP that joined this program compared to the balance of our ECP network in the United States. On the direct-to-consumer side, we had a good start of the year with Lanscrafter comps that were in a low single-digit territory, very much driven by our managed vision care clients, and with our important asset, that is the teleoptometry, that is now rolled out in approximately 90 stores in Lanscrafter, delivering very promising results so far. On the SanglaSat side, we were in a negative territory due to a deceleration that we've seen in the month of March. And I would say a couple of things for that. On one side, the bad weather that impacted in particular California, Texas, and the state of Arizona. And on the other side, in Q1, we experienced a higher number of remodels in SanglaSat. Now let's move to Europe that delivered a standing quarter at 9% approximately top line growth at constant currency and this comes on top of an 18% top line growth last year. In EMEA, we are clearly confirming the strong momentum that we experienced in 2022. On the professional solutions side of a business, our top line was up double digit in Italy, in Spain, in Turkey, and in Eastern Europe. And in the biggest country that is France, we deliver a high single digit growth. Our sunglasses and branded lenses were very much the two categories that in EMEA Professional Solutions drove our growth during the course of the first quarter, with very strong volume dynamics, I would say. Moving to the direct-to-consumer for a second, our sales were up on double-digit territory on top of the first quarter 2022, where we grew our sales in excess of 20%. If we look a bit closer at direct-to-consumer, Optica EMEA comps were on the high single-digit territory, with Vision Express double-digit, with Salmuraghi Vigano in Italy double-digit, and with Optica Dos Mill in Spain a double-digit territory. While if we move on the other side of a direct-to-consumer, the Sun part, well, we posted the fifth consecutive quarter of double-digit growth with a Sun business that continues to benefit from the demand of touristic traffic and the local demand across the different European countries. But now let's switch to the eastern part of the world, in Asia Pacific, with a top line that was approximately 12% up at constant currency, with the month of March in further acceleration south of 20%. The performance in the region was in material acceleration. You remember, we commented the Q4 last year, where we had a top line that was approximately 3%. China is back. It started day one on the direct-to-consumer channel, when our B2B professional solution, it picked up in February and March. Our Stellos lenses continue to grow exponentially, with a top line up 80% for those lenses. If we look at other countries in the region, happy to report India, Southeast Asia, Japan, and Korea, all of them on a double-digit territory. A last touch on a retail in Australia that deliver mid-single-digit comps, very much driven by a strong delivery of Sunglassat business in the country. But now, the last in the pipe, it's Latin America, and as usual, let's conclude with that. You might remember that when we commented Latin America last time, our Q4 was slightly positive. And we wanted to reassure you about the start of 2023 for Latin America. And here we are. We closed a quarter back to double digit once again, with top line that was up 11.5%, with our professional solution and a high single digit, and with our diet to consumer segment at a double digit pace. Brazil, Mexico, Argentina, they all delivered double-digit growth during the course of the first quarter. On the professional solutions side, we are pleased with the work that we've done here to very much strengthen our presence and improve the quality of our service level. I will give you an example that is Mexico. In Mexico, we are tightening our partnership with some of our key accounts in the country, delivering strong results, especially on the French side of the business. While on the independent side, We're actually getting more and more traction every day thanks to the further expansion of our sales force in the country. If we move for a second to the direct-to-consumer in Latin America, we are very pleased with our double-digit pace that was achieved in both our brick-and-mortar part of the business as well as in our e-commerce business. Our retail footprint in the region delivered double-digit growth on the optical side, led by a former GV banner in the region. While on the Sun part, we experienced a strong Q1 season thanks to Brazil, Andes and Mexico that all deliver a double-digit growth. With that, we completed our journey across the four different regions. And let me hand it back to the operator for our Q&A session. Thank you.

Ladies and gentlemen, we will now start the Q&A session. If you want to book a question, press star followed by five. We kindly ask you to limit yourself to a maximum of two questions. Our first question comes from Veronica Dubaiova, City.