Essilor Luxottica

Welcome everybody. Thanks for being with us today. I'm Giorgio Iannella from the IR team. I'm pleased to introduce our speakers, Francesco Milleri, Chairman and CEO, Paul Dusayan, Deputy CEO, and Stefano Grassi, CFO of the group. At the end of their presentations, we'll have a 30-minute Q&A section. If you want to make a question, please press star followed by five. We kindly ask you to limit your questions to a maximum of two, each one of you. And with that, I hand over to Francesco Milleri.

Good morning and good afternoon to everybody. Thanks for joining us. Today, I'm pleased to present to you a Silor Luxottica sound financial result of the first semester, as well as its new strategic initiative in the hearing aid market. Let me start from the H1 results that we are proud of with respect to both revenue growth and margin trend. Revenue at constant exchange rates grew by 8% in the second quarter and 8.2% in the first six months, close to 13 billion euros. All regions and segments were positive and contributed to growth. We just saw some softness in the u.s market but less material than expected as it was limited only to the sun category So far, this year, the Group Top Line has performed well above the mid-single-digit long-term target, thanks to its open business model, positive integration journey and higher diversification in terms of products, services, geographies, channels and segments. The adjusted operating profits deliver a robust performance in the first six months of the year, growing faster than sales at constant exchange rates to 18.5 margin, 10 basis points higher than last year, which is a remarkable achievement considering the impact of the cost inflation in the period. While working on the efficiency and synergies, we continue to invest in our new business model with the focus on advanced solutions in lenses like Varilux XR, disruptive technology and design like Ray-Ban Reverse, tele-optometry system and digital learning platform Leonardo. At the same time, in order to protect our profitability, we are now taking selective measures of price increase across products and countries. Today, we are proud to announce a groundbreaking strategic initiative that we gave some clues about at our last Capital Market Day, when we spoke about Super Audio. Essilor Luxottica is expanding into the hearing aid market with the launch of a completely new type of product based on proprietary hardware and software. We'll combine innovative hearing aid solution and prescription glasses into one single brand new disruptive product. This will serve more than 1 billion mild to moderate hearing impaired people worldwide in a completely different way, allowing them to see and hear better the world around them. See more, hear more, be more. Following the recent acquisition of Nuance, the Israeli company specialized in advanced audio software technology, Essilor Luxottica has established the new division Nuance Audio. At this stage, we have already built and tested prototypes with strongly supportive results. The product will be available on the market in the second half of the next year. From stigma to style, that's our journey in hearing solution. With the launch of this new category at the intersection of sight and sound, we want to grow and elevate the entire hearing aid industry, like we are doing with the eye care and eyewear sector. Both businesses have great potential in terms of growing demand driven by population aging, as well as growing penetration of the category currently much lower in hearing aids than prescription eyeglasses. To make the most of this opportunity, we'll work in close synergy with doctors, archaeologists and all industry players to make sure we offer solutions based on the patients' needs. We also leverage the capability in advanced miniaturization, electronic components, weight reduction, and wearing comfort that we have built along our journey in smart glasses. In terms of the distribution strategy, we serve both hearing aid and optical wholesale markets, as well as our own retail network. Few words to conclude on our carbon roadmap to confirm that we are on track with the target of neutrality in Europe on Scope 1 and 2 by the end of this year. This gives you the sense of the priority we assign to our sustainability program as reflected also by our recent commitment to the science-based target initiatives. With that, I hand over to Paul, who will keep talking about product and innovation in different fields.

Thank you, Francesco, and to all of you for being here with us today. As you can imagine, we are quite proud of our first half achievements. Today, I would like to spend a few minutes to share with you some key factors to keep in mind when looking at our performance in the first six months of 2023 and beyond. Our company is at the core of an industry that is rich of untapped opportunities and centered around a basic right, the need for good vision. Leveraging our well-balanced setup in terms of geographical reach, distribution channels, product categories, and brand portfolio, we can size and bring the opportunities to life where and when appropriate. We have the unique ability to deliver a resilient growth. Embedded at the heart of our organization are our people. In the past months, we strongly invested in our teams in order to retain and continue to develop our pool of talents. At an average age of 37, our employees are a young and dynamic force bringing together a vast range of competencies, blending deep expertise with fresh ideas. Their enthusiasm for our mission is a common feature. while the ever-growing number of employee shareholders representing today 72,000 colleagues is a testament to the strong sentiment of belonging inside the organization. The setup of our supply chain is scattered to fulfill the diverse needs of our customers at best. Substantial investments have been made this year to bring our manufacturing and logistics footprint to the next level. In the coming months, two new global integrated facilities in Mexico and Thailand will start their operation, adding extra capacity to sustain our future growth. The optimization of our lab network is underway, combining the cost advantage of the industrial labs with the premium service of the proximity labs. Since the beginning of the year, the biggest industrial labs have continued their journey to operational excellence to match and exceed customer expectation, while the network of proximity labs is being strengthened. Now, let's talk about innovation, which is always on top of our mind. For us, innovation is based on a holistic approach, as you know. First, embracing our active portfolio of products and brands. A powerful engine is at work to continue to refine our current product range and keep enhancing the value we bring to our customers and consumers. We regularly drop novelties into our frame collection and deploy new lens generations, such as Crystal Sapphire HR and the Transition Extractive. Our latest newness was presented at the Essilor Luxottica Days in Milan this month and received excellent traction. In connection with this, our R&D teams are also unlocking new disruptive technologies and design to be incorporated in our products, pushing the boundaries of the industry standards. Let's take a couple of great illustrations with the recent launch of two new groundbreaking technologies. First, the new Varilux XR series. It is the first high responsive progressive lens powered by artificial intelligence. The best overall progressive lens on the market. Thanks to the creation of a digital twin, we are able to predict the visual behavior profile of each consumer and provide a lens that respects the natural movements of the eye. The product has already been introduced in a number of key markets, and to support the launch, we have conducted more than 30 events and roadshows in EMEA, US, and Brazil, reaching 18,000 customers and receiving exceptional feedback from both consumers and opticians. Second, Ray-Ban Reverse, which defies convention with an inverted lens design. The switch from a convex to a concave lens shape is a revolution and an audacious move not only from an optical but from a fashion perspective. Successfully overcoming the optical challenges which come along with the new design, the lens delivers the sharpest and most accurate vision experience. It can be fitted with four iconic Ray-Ban styles. Aviator, Wayfarer, Caravan, and Boyfriend, and is made for the ones that love to be at the forefront of the new trends and express their uniqueness in every detail. The product has been launched starting from May. On top of that, we are selectively adding new names to our frame brand portfolio, keeping it contemporary and attractive in the customer's eyes. On this, we are proud to share that we have just presented our first Swarovski collection, which can be found on the shelf starting from the fall. During the first half of the year, we also announced the collaboration between Roger Federer and our Oliver's People brand and signed the new Jimmy Cho license. Our ambition is to create also brand new categories to address yet unmet consumer needs. Two new categories which the group has embarked on are myopia management and wearables. Myopia management, we have now unveiled our fourth year clinical trial results for STELEST showing sustained myopia control efficiency. children saved more than 1.25 diopters of myopia on average over the period. A huge contribution to their well-being. On wearables, the experience of our first-generation Ray-Ban stories has taught us important elements about the consumer relationship vis-à-vis the new functionalities. Based on these valuable insights, our R&D team are preparing the future of the next generation to come. As you can see, the breadth of our products, brands, and categories is underpinned by deep innovation and a robust end-to-end organization, which is at the heart of the growth of our company and the development of our industry. With this, I am handing it over to Stefano. Thank you.