Essilor Luxottica

Hello everybody, this is Giorgio Iannella from the AR team. Thank you for joining Esiro Luxottica Q3 26 Revenue Management Call. The Group CFO Stefano Grassi will walk you through the business and financial highlights of the period. After his presentation there will be a 30-minute Q&A session. If you want to make a question, please press star followed by 5. We kindly ask you to limit your questions to a maximum of 2. With that, I hand it over to Stefano.

Hello everyone and welcome to our Q3 trading results. This quarter was another strong one for us at Luxottica, with revenue growth that was 7.2% up at constant currency and 9% at current exchange rate. When we look at our results, those are even more remarkable when you consider that we had a tough comparison base last year. In the third quarter of 2025, we actually grew our top line 11.7% at constant currency. When we look at our four different geographies, Asia Pacific posted a second consecutive quarter double digit pace. Both Latin America and EMEA deliver a high single digit quarter, while North America, we were up mid single digit. That was very much due to a strong base in 2025, in particular on professional solutions. If we dissect our growth profile, our traditional business that includes M&A grew 6.5% at constant currency and that is an acceleration versus the first half trend. While our wearable business was up double digit 20%, not including yet a material support from the new products that were recently presented at the MetaConnect 2026. Now, the last chapter is very much related to exchange rate. As we anticipated during our last conversation, we are finally experiencing some currency tailwinds in our numbers. Those currency tailwinds account for about 1.8 percentage points in our growth profile. With all our main currencies, the US dollar, the British pound, the Chinese renminbi and the Australian dollar, they all experienced a revaluation against the euro during the course of the third quarter. but now as usual let's start our journey across the four different geographies and as usual let's start with the biggest one North America. Now in North America we are up 4.7% at constant currency and as I mentioned before there is a base effect in our results here. Last year our third quarter was up 12.1% at constant currency and you remember last year we observed the build-up of the AI glasses category. So we are clearly delivering another strong quarter over an outstanding third quarter last year. When we look at it a bit closer, our two distribution channels, let's start with the B2B, the professional solution one. In professional solution, we had a low single-digit quarter with the optical channel that was in acceleration versus the second quarter and both independent and key accounts that were positive. All our national accounts in the United States were strong and we coupled that with a strong sellout that we saw and observed from our national accounts. The Vision Source Alliance continues to outperform the rest of our ECP and that is true for both lenses and frames. So pretty compelling picture when we look at our distribution channel. A last touch on department stores. Our department stores were up double digit. We have a continuous focus on the Sun category, while on the other side, Sport Channel and e-commerce were both negative. I would say that for the Sport Channel, the main reason is the tough comparison base that we had in 2025, while for e-commerce... That is very much due to the continuous commitment that we have in cleaning up the marketplace. Now, when we look at our brands, Raybon deliver a strong double digit in Q3 with both AI glasses and analogic frames that are contributing to our growth profile. Our luxury portfolio is actually up mid-single digit. I would say thanks to Prada, Chanel, Miu Miu. While on the lens side, I would put on the spotlight Eisen. While Stelest, the one and only myopia management lens that is FDA approved, available in the US right now, got a good traction during the back to school period. So we continue to build up this category and I think we have a pretty good traction so far. Now, let me move to direct-to-consumer. LensCrafter delivers mid-single-digit comp sales in Q3, while Sunglassat delivers high single-digit comp sales. For LensCrafter, we are looking at 15 consecutive quarters of positive comp sales. and we're also up against the best quarter for LensCrafter in 2025. So I would say that the main growth driver for LensCrafter was an improved conversion versus last year, positive volume, positive price mix in particular on lenses. And in addition, I would also mention that we see an early contribution that is coming from the new subscription program that is called LensCrafter Plus that is now available in over 900 locations across the country. When we look at our Sunglass Sat in North America, 8% comp sales on top of 8% comp sales that we delivered last year. So very pleased with the delivery in Sunglass Sat North America. The traffic in stores continue to be positive. We have conversion flattish year over year. And the growth is very much supported by both AI glasses and analog frames. With international and non-international Sunglass Sat locations that deliver high single-digit comp sales during Q3. Let's now move to Europe. Europe delivered a 7.5% growth at constant currency during the course of a third quarter. The 7.5% comes on top of a 12.7% that we delivered in the third quarter of last year, with our direct-to-consumer segment that delivered the eighth consecutive quarter of double-digit growth in the EMEA region, while professional solution was slightly positive in Q3. Let me share a few highlights for this region. From a country standpoint, Turkey, Netherlands, Eastern Europe were all up double digit. Italy, Spain and Switzerland were up high single digit, while France delivered a low single digit quarter and UK was slightly negative in Q3. When we look at our professional solution B2B, price mix was the primary driver on both frames and lenses. The negative performance that is coming from the turmoil that we've seen in the Middle East is very much diluting our professional solution growth in the region by less than a percentage point. Our analog frame category was extremely resilient during the course of a third quarter. Oakley was up double digit, Ray-Ban was up double digit, and the luxury segment delivered a mid-single digit pace. Our AI glasses turned negative in Q3, and the reason for that was very much a strong demand in the third quarter of last year, I would say in particular on the consumer electronic channel. Now, let's switch to direct-to-consumer. On the direct-to-consumer side, we had high single-digit comp sales in optical retail and another double-digit quarter on Sun. When we look at our optical side, I would say that the two largest chains that we have in Europe, Apollo and Vision Express on the optical side, delivered double-digit comp sales, while San Moraglio Vigano in Italy was up high single-digit in terms of comp sales. Last touch on sun. The growth in sun was very much driven by both price mix and volume. And that's obviously extremely reassuring with conversion that improved and our discount rate profile that was reduced year over year. Both analogic and eyeglasses were positive. When we look at our different countries, I would say Turkey. and UK that were on the spotlight. They posted double-digit comp sales where Italy, France and Spain posted high single-digit comp sales in Q3. But now we concluded this journey with the EMEA region. Let's move east to Asia Pacific. 15.7% growth at constant currency. This is really the shining star in Q3, I would say. That growth comes on top of a 10.5% growth that we delivered in the third quarter of last year. So we're clearly delivering double-digit growth on top of a double-digit quarter last year. In those figures, there is an impact from Bolton M&A, that is top Charon, as you know, but even excluding that, you will be still looking at a double-digit pace for the third quarter in the Asia region. Both, our professional solution and direct-to-consumer, deliver a double-digit quarter in Q3. From a country standpoint, India, Japan, Korea, they were all up double-digit. China had a touch below double-digit, while Australia delivered a high single-digit third quarter. On the professional solutions side, I would say that in China, our full set of myopia solutions delivered a third quarter at double-digit pace, while on the frame side, Ray-Ban was up double-digit. The luxury portfolio delivered mid-single-digit in Q3, while Boulogne was really the main brand to land on the negative territory for this quarter. Moving quickly to direct-to-consumer. I mentioned before the integration of Top Charon into the Astro Luxottica operating platform started well, and I'm sure we are up for a successful journey here, like we have seen in the past for many other retail binders that Astro Luxottica acquired. On the other side, OPSN delivered low single-digit comp sales, while on the Sun side, our Southeast Asia stores delivered good double-digit comp sales, while in San Glacato, Australia, we were negative, but remember, it's a low-season period here. The last region in the pipe is Latin America, 7.1% of constant currency. That is the best quarter for Latin America with professional solutions that deliver a mid-single-digit speed and the direct-to-consumer side that deliver a double-digit growth. Giorgio Iannella, Marco Catalani, Stefano Grassi We were a bit softer there. I would say low single digit. And that was especially true on the B2B side. But remember, we come after several quarter of fast speed in delivery, our growth. The second highlight relates to Brazil. In Brazil, our professional solution delivered a strong third quarter. In particular, on the frame business, they were up double digit. And that growth was very much driven by AI glasses and also analogic frames. Ray-Ban grew in excess of 30%. very much supported by the successful campaign for the local testimonial. And I think it's the first time that we have a local testimonial for Rabin, Bruna Marchezine. While on the land side, we have a pretty good traction in Varilux. The third highlight pertains to Ocho Cacarol. Ocho Cacarol had a good quarter in Q3 that was very much driven by our directly operated stores, while on optical retail we posted a high single digit comp sales in the region that was driven by the Grand Vision banner in Mexico and in Andes. Last touch on sun banners. Those banners post an outstanding double-digit growth in third quarter. I would say thanks to a successful rollout of the AI glasses in Ray-Ban stores and in the sunglass stores for the region. But now we have completed our journey across the four different regions. Let's hand it over to the operator for the usual Q&A session. Thank you.

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