Essilor Luxottica

Good morning and good afternoon, everybody. This is Giorgio Ianella from the IR team. Thank you for joining Excello Luxottica Q1 Revenue Management Call. The group's CFO, Stefano Grassi, will walk you through the revenue performance of the first quarter of the year. After its presentation, there will be a 30-minute Q&A session. 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. With that, I hand it over to Stefano.

Hello, everyone, and welcome to our Q1 trading update. We closed 2025 with a double-digit year. The revenue for Estrella Luxottica last year grew 11.2% at constant currency for the full year. And we are now opening up Q1 2026 with another double-digit start. The first quarter saw revenue up 10.8% at constant currency, with a well-balanced between professional solution and direct-to-consumer, both of them on a double-digit pace. Our regions show North America up 12.5% at constant currency, while EMEA, Asia-Pacific, and Latin America, they were all up on a high single digit in Q1. Our growth profile was very much driven by our traditional business, the posted mid-single-digit growth, and catapulted that on top by a strong demand of AI glasses with a product range that continued to expand thanks to the introduction of the new Ray-Ban MetaOptics, two models in particular, Blazer and Scriber, that were specifically designed to enhance our prescription offer on AI glasses. Those glasses, together with a few other innovations, were all showcased at the Switch, the Vision Innovation Summit that was organized for the first time ever in Acelot Exotica history in the month of March in Orlando, Florida, and in the month of April in Monaco, hosting our Asian and EMEA clients, and was very much the opportunity to showcase our products and innovation to thousands of clients that were actually coming over to experience at full, at the best, Sibyl Luxottica. We now switch gear and talk for a second about foreign exchange. From an FX perspective, let me show you in Q1. we still experienced some currency headwinds. In particular, you might have seen that we have about 7 percentage points of difference between constant and current exchange results, and that was very much driven by the U.S. dollar that during the course of the first quarter devaluated approximately 10% against Europe in Q1. Now, as usual, let's move to the four different regions, and let's start by the largest one, North America. North America was up 12.5% in Q1. That represents the third consecutive quarter of double-digit pace, with both segments professional solution. In order to consume it, they delivered another double-digit quarter. When we look at our professional solution, we experienced a strong growth with the Ravens. And Rayburn was very much on the spotlight for wearables, the triple the size during the course of Q1, but also on Rayburn Sun and Rayburn prescriptions, they both delivered double-digit growth during the course of Q1. On the land side, I would say there are growth on the Lancet brand portfolio was solid, was stronger. That was very much driven by Eisen, by Barlux, Shamir, and also Nikon. I would probably make a last comment on lenses with respect to stellast. During the course of Q1, we have about 6,000 doors. There are daily respensing stellast lens in the U.S. And the stellast lenses, the myopia management lenses, are gaining continuous traction, visibility, and awareness in the optical industry. When we look at our two different distribution channels within the optical channel, I would say that our independents grew solidly during the course of Q1, in particular the independents that are part of the Vision Source Alliance that deliver a high single-digit growth in the first quarter. But also our key accounts grew in the high single-digit quarter. So overall, our two distribution channels within the optical division were very strong. Also, our e-commerce partners were solid at double-digit pace, while the last distribution channel, the department store, were on the low single-digit territory. If we now move to direct-to-consumer, I must say the sun shined during the course of Q1 in North America for our Sunglass Hub business. despite what I would say weather conditions that were definitely not ideal in Q1. We delivered double-digit comp sales in Q1 with January, February, and March all at double-digit pace. We had six consecutive quarters in sunglass stats of positive comp sales, and that's obviously extremely reassuring. We experienced a quarter, the first one. with positive traffic in stores, with both our international and domestic stores that deliver double-digit comps. And last but not least, the growth profile was not only driven by AI glasses, but we coupled that with a strong growth also on our traditional analogical sunglasses. If we move for a second now to the optical parts, let me say that we have another outstanding quarter at a high single-digit comp sales in LensCrafters. And that happened despite a tough comparison base, as in Q1 last year, we delivered high single-digit growth in Lance Crafter. Price mix on examination, they were all positive. And just the last comment on the fact that we built the first important milestone on our MyPack journey by opening the first surgical location in Lance Crafter stores in North America, in Pennsylvania, And this, I can tell you, will be followed by a few others in the course of 2026. So stay tuned for more news in that respect. Let's move now to EMEA. EMEA delivered 9.5% of constant currency. It's the 20th consecutive quarter of revenue growth in the region. Professional Solutions delivered a mid-single-digit quarter. Direct-to-consumer was a double-digit quarter. When we look at our different countries across the region, Italy, UK, Turkey, Poland, and Eastern Europe, they all are double-digit in Q1. On the professional solution side, price mix was the primary driver on both frame and lenses, but also volume were positive in the two product categories. AI glasses were a successful story in Q1, as we continue to expand our distribution, but at the same time, we continue to gain good productivity on the existing doors. Taking a closer look at frames, I would say very pleased by Raven, but also very pleased by our luxury portfolio, in particular thanks to MiuMiu that in Q1 shined in the EMEA region. On the land side, Varlux and Translation were both on the spotlight for a strong growth in Q1. Moving to the direct-to-consumer, I would say that in EMEA, we had another shining region for Sunglass Up that delivered an outstanding Q1 at double-digit pace with double-digit in Iberia, in Italy, and in Turkey. The optical comps were up on the mid-single-digit territory for Q1. Vision Express was up double-digit. And General Electric was low single-digit comp sales with negative traffic in the quarter. Now, moving to Asia-Pacific, we had a 9.8% growth at constant currency. We had a strong start in Asia-Pacific in China, in India, in Southeast Asia. They were all double-digit in Q1. When we look at our professional solution sites in China, the full set of Myopia solution delivered an outstanding Q1 at double-digit pace. While on the frame side, I would probably mention two brands, one Ballon, and the other is the overall luxury portfolio that was strong pretty much across the board with a growth that was in excess of 10%. In India, our Ray-Ban AI glasses have already an important part in our growth profile of the country. And that's obviously very reassuring as we want to expand this product category in fast-growing markets and ideally to replicate the success story that we already have in very mature geographies like Kenya or North America. If we now move quickly to the data to consumer side, OPSN posted flat comps in Q1. I would say that tough comparison base and a history shift were very much the two main drivers, while China, and in particular mainland China, delivered double-digit comp sales. But now let's move to the last region in the pipe, and that is Latin America. In Latin America, we had a first quarter, a mid-single-digit, 6.7% growth at constant currency, high single-digit growth in professional solution, mid-single-digit growth in majority consumer. Let me give you just three highlights for the Latin American region. Country-wise, Mexico and Argentina are double-digit. Colombia, high single-digit. Brazil, low single-digit in Q1. The second important highlight pertains to our largest country, Brazil. In Brazil, I would say we experienced a successful launch of Ray-Ban AI glasses. You remember in recent months we introduced our AI glasses in both Brazil and Mexico. In Brazil, the launch of AI Glasses were very much the opportunity to re-engage our clients, in particular, our Ochica Corral franchisee. While on the Lens side, we had the Lens product category that was flattish in Q1. I think we did pretty well in Q1 2025, so we had a pretty, I would say, strong comparison day last year. You remember in 25 Q1, we launched a transition gen S, which was a great success story in Brazil throughout 2025. On the Zorio 2 consumer side, happy to report a double-digit comps in Brazil, very much driven by Sunglass Up and for Chalcica. The third important part related to this region pertains to Hispanic Latin. We had a double-digit growth in professional solution in Q1. All the key countries in the region on Hispanic Latin, Mexico, Colombia, Argentina, they all deliver a double-digit pace in the quarter with a widespread positive trend across all product categories, frames, and lenses. While on the direct-to-consumer side, we had a high single-digit comp sales in Grand Vision banners and low single-digit in GMO. So that concludes our journey across the four geographies, and now let me hand it over to the operator for the usual Q&A session.

Ladies and gentlemen, we will now start the Q&A session. Our first question comes from Oriana Cardani, Indesa, Sao Paulo. Please go ahead.