2015 Results - Essilor · 2015 Results 4 A Strong Performance Delivered in 2015 Growth 2015...

2015 Results February 19, 2016

2015 Results 2

Hubert Sagnières – Chairman and Chief Executive Officer

1. Introduction

1. Introduction

2015 Results 4

A Strong Performance Delivered in 2015

2015 Growth

(1)Adjusted in 2014 for non-recurring items resulting mainly from major acquisitions (Transitions Optical, Coastal and Costa).

(2)Growth at constant exchange rates.

(3)Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs, other operating expenses).

(4)To be submitted for shareholder approval at the May 11, 2016 Annual General Meeting

+18.4%

€5,670m €6,716m Revenue

€1,057m €1,263m 18.6% 18.8%

+19.4% Contribution from operations(3)

As a percentage of revenue

+17.0%

€3.05 €3.57

Earnings per share

+8.8%

€1.02 €1.11

Dividend per share(4)

+8.5%(2)

2014 adjusted(1)

1. Introduction

2015 Results 5

Balanced Growth Between Developed Markets and Fast-Growing Markets

Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America.

DEVELOPED MARKETS

2015 Revenue: €5.2bn

Growth ex. currency: ~7%

FAST-GROWING MARKETS

2015 Revenue: €1.5bn

Growth ex. currency: ~14%

1. Introduction

2015 Results 6

New Fields of Innovation to Serve a Much Larger Pool of Consumers

Protection & Prevention Over The Counter

1. Introduction

2015 Results 7

Lens Mix Driven by Brands and Services in Developed Markets

Growth firmly above market growth

Sustained momentum in the US

Europe above expectations

1. Introduction

2015 Results 8

Potential in Fast-Growing Markets Remains Intact for all Lines of Products

Double digit like-for-like growth(1)

Strong demand for better vision

1. Introduction

Strong Drivers Consumer Marketing M&A Targets

400-500

400-500

200-300

Number of local lens players

Asia/Pacific Latin

America

Africa

India

Russia

China

Argentina

Columbia Brazil

GCC countries Turkey

(1) Excluding Equipment business

Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America

2015 Results 9

Sunwear and Online Driving Growth Acceleration

BolonTM & Costa®: High growth driven by internationalization, prescription and online

EyeBuyDirectTM & Frames DirectTM: >30% growth with good profitability

Coastal: Successful repositioning, set to accelerate

1. Introduction

2015 Results 10

Bolt-on Acquisition Strategy Pursued in Every Business Segment

1. Introduction

Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America.

PRESCRIPTION LENSES

SUNWEAR

ONLINE

FAST -

GROWING

MARKETS

2015 Results 11

61,000 People Focused on a Powerful Mission

1. Introduction Members of Essilor’s Executive Committee

Improving and Protecting the Vision of

7.2 Billion People Worldwide

2015 Results 12

Laurent Vacherot – Chief Operating Officer

2. Financial and Operating

Performance

2015 Results 13

Full-Year 2015 Performance vs. Guidance

2. Financial and Operating Performance

Revenue Growth:

Like-for-like

Excluding currency effect

Contribution from operations(1)

as a percentage of revenue

> 4.5%

8% to 11% 8.5%

4.6%

18.8% ≥18.8%

FY 2015 February 2015

Guidance


2015 Results 14

2015 Revenue Up 18.4%

€ millions

(1) Local acquisitions or partnerships

(2) Transitions Optical (3 months) and Coastal (4 months)

+6.7%

+8.5%


5,670

6,716

+18.4% 261

118 101

566

2014 Revenue Like-for-likegrowth

Bolt-onacquisitions (1)

Strategicacquisitions (2)

Currency effect 2015 Revenue

+4.6%

+2.1%

+1.8%

+9.9%

4.0% 4.4% 4.8%5.3%

1.9% 1.4%1.7%

3.2%

Q1 2015 Q2 2015 Q3 2015 Q4 2015

2015 Results 15

Q4 Like-for-like Growth Accelerates to 5.3%

Like-for-like

growth

Bolt-on

acquisitions(1)

(1) Local acquisitions or partnerships

Best performance since Q1 2012

Sustained momentum in the US,

very good performance in Europe

Robust growth in Fast-Growing

Markets

Brisk acceleration of Sunglasses &

Readers driven by Bolon™ and Costa®

Improved contribution from bolt-on

acquisitions

10 transactions signed

Carry-over effect for 2016

Positive currency impact of 5.9%

5.9% 5.8% 6.5% 8.5%


2015 Results 16

2015 Revenue by Region and Division

Reported revenue in € millions 2014 2015 Change (reported)

Change (excluding

currency effect)

Lenses & Optical Instruments 4,970 5,840 +17.5% +8.5%

North America 2,038 2,587 +26.9% +8.4%

Europe 1,653 1,777 +7.5% +6.4%

Asia/Pacific/Middle East/Africa 898 1,071 +19.3% +8.1%

Latin America 381 405 +6.2% +18.9%

Sunglasses & Readers 503 673 +33.9% +14.9%

Equipment 197 203 +2.7% -9.0%

TOTAL 5,670 6,716 +18.4% +8.5%


2015 Results 17

19 Acquisitions Representing €214m in Full-Year Revenue

Europe

4

Latin America

7

Asia/Pacific/

Middle East/Africa

6

North America

2

Fabris Lane Optimax

Segment

Merve(1)

Grupo Vision GKB Vision

Prime Lenses

Eyres Optics

Vision Source Rozin

PERC/IVA

ECP

Jai Kudo Polska

Optic Club

Prime Optical

e-lens eÓtica

Rx

NOME

(1) The acquisition of Merve’s ophthalmic lens business remains subject to standard regulatory approvals.


Number of acquisitions

by segment

Prescription Lenses: 15

Sun: 2

Online: 2

2015 Results 18

Leveraging Vision Source and PERC/IVA to Boost Value Creation in the US

Boosting our proximity with more than

5,500 leading eye doctor practices

Vision Source: the largest US service network with

~4,000 members

PERC/IVA: ~4,000 eye doctors

New levers to expand business in the US

Accelerate category development and new product

penetration

Increase consumer reach

Extend the product line (contact lenses, sunwear,

readers, etc.)

Improve efficiency from manufacturers to PoS

Accretive to EPS as of 2016


Independent eye care professionals

are capturing ever more value

Sell-out figures in $ for spectacle lenses

Independent ECPs 53%

Internet ~3%

Optical Chains/Other 44% 2015

Independent ECPs 50%

Optical Chains/Other 50% 2005

Source: VisionWatch, Essilor estimates

2015 Results 19

Sustained Momentum in North America

HIGHLIGHTS

Success of Essilor key brands: Varilux®, Crizal®, Transitions® and Xperio®

Key partnerships with leading Eye doctor’s alliances

Double digit growth at Costa®

Strong increase in sales at EyeBuyDirect™ and Frames Direct™

SUNGLASSES &

READERS

Expansion of geographic footprint of Costa®

Development of Costa® prescription sunglasses offering

New contract for FGX

LENSES & OPTICAL

INSTRUMENTS

Innovation

Launch of Varilux Comfort® 3.0 & Varilux® Physio® 3.0

Launch of Transitions® Xtractive®

Online

Introduction of Kodak® lenses

Continued turnaround at Coastal

2015 revenue growth

excluding currency

effect, across all

business divisions

7.6%


2015 Results 20

Improved Product Mix in Europe

HIGHLIGHTS

Branded products supported by advertising campaigns

Contribution of key accounts

Strong growth in the UK, Russia and in Southern and Eastern Europe

Acceleration of Lensway™ online sales

2015 revenue growth

excluding currency

effect, across all

business divisions

7%

SUNGLASSES &

READERS

Acquisition of Fabris Lane in the UK

Strong growth at Polinelli

LENSES & OPTICAL

INSTRUMENTS

Innovation

Launch of Eyezen™

Launch of E-SPF® 35 in France

Innovations adopted by key accounts

Consumer marketing

Strong growth of Crizal® in the United Kingdom

Positive impact of advertising campaigns in France, Germany, Spain,

Italy and Russia


2015 Results 21

Asia(1): Continued Momentum in Fast-Growing Markets

HIGHLIGHTS

Growth above 20% in India

Double digit growth in domestic China

Strong growth in Middle East and Africa

2015 revenue growth

excluding currency

effect, across all

business divisions

Asia FGM: 11.3% Total Asia: 9.5%

SUNGLASSES &

READERS

Expansion of Bolon™ to travel retail in 8 major airports in Asia and

2 leading cruise lines

Acquisition of Merve in Turkey

LENSES & OPTICAL

INSTRUMENTS

Positive impact of media campaigns in India and China

Acquisition of Prime Lenses and GKB Vision in India

Expansion of geographic footprint

Sales flat in developed countries

(1) Asia/Pacific/Middle East/Africa


2015 Results 22

Latin America: Fast Development Driven By Organic Growth and Acquisitions

HIGHLIGHTS

Record year in M&A activity: 7 transactions

Strong growth in Colombia, Mexico and Chile

Brazil: soft growth in H2 but share gains

New footprint in Costa Rica and Nicaragua

2015 revenue growth

excluding currency

effect, across all

business divisions

17.5%

LENSES & OPTICAL

INSTRUMENTS

Success of Kodak® lenses in the mid-tier range in Brazil

Ramp-up of a contract with a leading regional optical chain in Chile

Consumer marketing

Strong growth of Crizal® in Brazil

“Power of 3” advertising campaign in Colombia (Varilux®, Crizal®, Transitions®)

Online

Launch of Glasses4you.com.br

Acquisition of e-Otica and e-lens


2015 Results 23

Fast-Growing Markets, Sunwear and Online Enhancing Group Like-for-like Growth Acceleration

Fast-growing markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America

(1)At 2013 average exchange rates

(2)Prescription sunlens revenue are estimates based on extrapolated data from laboratory reporting system

(3) AMERA: Asia, Middle-East, Russia, Africa


Revenue: €1.5bn

13.6% combined growth,

o/w:

10.9% in Amera(3)

16.7% in Latin America

13 acquisitions

5 in Asia/Pacific/ME

1 in Russia

7 in Latin America

8 new countries

2018 ambition: €2.8bn(1)


Revenue: ~€860m

Acceleration in Sunglasses

Fast growth at Bolon™ &

Costa®

Improvement at FGX

2 acquisitions in UK and Turkey

Sunlenses (Rx(2) & plano)

growing double digit

Success of Polarized lenses

Impact of media campaigns

2018 ambition: €1.1bn(1)

SUNWEAR

Revenue: ~€220m

~12% like-for-like growth

High growth at EyeBuyDirect

and FramesDirect

Coastal turnaround

Costa® and Bolon™ websites

Turnkey solutions for retail

2 acquisitions in Brazil

Contact lenses

Sun and eyeglasses

2018 ambition: €400-500m(1)

ONLINE

2015 Results 24

Contribution from Operations(2) up 19.4%

(1)Adjusted in 2014 for non-recurring items resulting mainly from major acquisitions (Transitions Optical, Coastal), except for revenue.


2014

Adjusted(1)

Revenue 5,670 6,716 +18.4%

Gross profit 3,328 4,012 +20.6%

% of revenue 58.7% 59.7%

EBITDA 1,365 1,647 +20.6%

% of revenue 24.1% 24.5%

Contribution from operations(2) 1,057 1,263 +19.4%

% of revenue 18.6% 18.8%

€ millions 2015 Change


18.6%18.8% 18.8%

0.5%-0.3%

0.6% -0.6%

2014 Adjusted(2) Transitions Opticalwithout synergies

(Q1)

OtherAcquisitions(3)

2015 afteracquisitions

Operating leverageand synergies

Incremental mediaspend

2015

2015 Results 25

New Improvement in Contribution from Operations(1) at 18.8% of Revenue

Contribution from operations as a percentage of revenue

(1) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs, other operating expenses).

(2) Adjusted in 2014 for non-recurring items resulting mainly from major acquisitions (Transitions Optical, Coastal and Costa).

(3) Bolt-on acquisitions (local acquisitions or partnerships) and Coastal (January-April, 2015).


Trade up/Innovation

Efficiency gains

Synergies

Prepare the future:

FGM, 2.5 NVG, …

2015 Results 26

Contribution from Operations(1) before PPA: 20.1%

(1) Contribution from operations corresponds to revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs, other operating expenses).

(2) Adjusted in 2014 for non-recurring items resulting mainly from major acquisitions (Transitions Optical, Coastal and Costa).


2013 2014

Adjusted(2) Adjusted(2)

Revenue 5,065 5,670 6,716

Contribution from operations (1) 920 1,057 1,263

PPA (30) (64) (86)

Impact on contribution from operations (1) -55 bps -110 bps -130 bps

Full EPS impact (in euro cents) (11) (22) (25)

€ millions 2015

2015 Results 27

Profit Attributable to Equity Holders Up 18%

(1)Adjusted in 2014 for non-recurring items resulting mainly from major acquisitions (Transitions Optical, Coastal, and Costa).


Further integration of Transitions

Optical

Growth in the US and €/$ impact

Higher net debt average vs. 2014

€/$ exchange rate impact

2014

Adjusted(1)

Contribution from operations ( 2 ) 1,057 1,263

Other income (expenses), net (68) (80)

Operating profit 989 1,183

Financial income (expense), net (44) (63)

Income tax (246) (308)

Effective tax rate 26.0% 27.5%

Net profit 702 813

Minority interests (60) (56)

Profit attributable to equity holders 642 757

Earnings per share (in €) 3.05 3.57

€ millions 2015


2015 Results 28

Capital Expenditure: Continuing to Invest in Long-term Growth


Capital expenditure in € million (net of disposals) As a percentage of revenue

4.6%4.7%

5.6%

4.0%

4.8%

2%

3%

4%

5%

6%

7%

2011 2012 2013 2014 2015

192232

285

227

321

153

805

296

251

46

327

1,245

51

2015 Results 29

Healthy Free Cash Flow(1) Generation: +13% CAGR since 2012

(1) Free cash flow = net cash from operating activities less change in WCR and capital expenditure.

(2) Including €154m of foreign exchange impact in 2015 (€167m in 2014)

Operating cash flow

(excl. change in WCR)

Capital increase

Capital expenditure

Change in WCR

Dividends

Net financial investments

€ millions

+867

Reported change in net debt Foreign exchange and other

(2)


369

1,793

2,1682,089

1.3 1.3

2013 2014 H1 2015 2015

Net debt Net debt/EBITDA

2015 Results 30

Net Debt as of December 31, 2015: 1.3x EBITDA


Strong cash generation

Operating Cash Flow: +21.8%

Disciplined Working Capital

Management

Negative impact of €/$

exchange rate

Acquisitions

Vision Source and PERC/IVA

Earn-out on past transactions

2015 Results 31

Dividend per Share: up 8.8% to €1.11(a)

(a) To be submitted for shareholder approval at the May 11, 2016 Annual General Meeting

(b) Cash-out corresponding to a full payment of the dividend in cash


23rd consecutive YoY increase

2015 Total Shareholder Return

above 25%

Optional scrip dividend

172 177 185 198216

237(b)

0.83 0.850.88

0.94

1.021.11

(a)

2010 2011 2012 2013 2014 2015

Payout (in € million) Dividend per share (in €)

2015 Results 32

Strong Acquisition Momentum: 13 Acquisitions Since October 2015

Europe

3

Latin America

7

Asia/Pacific/

Middle East/Africa

1

North America

2


Number of acquisitions

by segment

Prescription Lenses: 11

Online: 2

2015 Results 33

2016 at a Glance

Financials

Launch of new products

Benefits of optimized media spend

Ramp up of Dr. alliances’ partnerships

in the US

Continued dynamics of Group key

Sunwear brands

Acceleration of online platforms

Strong bolt-on acquisitions contribution

Contribution from operations:

- Innovation/New products

- Efficiency programs

- Funding of growth initiatives

- Dilution from bolt-on acquisitions

Tax rate at around 2015 level at

constant exchange rates

Capital expenditure between 4% and 5%

of revenue

Continued strong free cash flow

generation

Revenue


2015 Results 34

On Track with our 2018 Ambition


(1)2012-2013 average

(2)Net debt at June 2014 including the financing of Transitions Optical and Coastal acquisitions

(3)Excluding new strategic acquisitions

2013

2018 2015

Like-for-like Growth 3.6%(1) 4.6%

>6%

€1.17bn EBITDA €1.65bn ~€2.0bn

€0.55bn Free Cash Flow €0.87bn ~€1.0bn

€2.1bn(2)

Net Debt €2.1bn ~€1.0bn(3)

2015 Results 35


3. A Broader, Stronger

Company

2015 Results 36

There are 7.2 Billion People in the World

3. A Broader, Stronger Company

2015 Results 37

Improving and Protecting the Vision of Everyone in the World

7.2

billion

2015

8.2 billion

2030

Source: Worldbank

World population


2015 Results 38

Poor Vision, the World’s Biggest Disability

7.2 billion

people

worldwide

Myope growth rate: 3.3%

Presbyope growth rate: 2.5%

1.9

billion

Corrected

1.6 billion in Asia

550 million in Africa

170 million in Latin America

2.5+

billion

Uncorrected

Source: Essilor – 2015 estimates

Sunglasses market growth: 6-7%

High potential for

prescription sunwear

1.4

billion

Equipped with sunglasses

Massive under-penetration in

Fast-Growing Markets

5.8

billion

Unequipped

Cataract/Eyelid cancer

63% in need of

vision correction

VISION CORRECTION

100% should protect

their eyes

(sun, UV, blue light)

VISION PROTECTION


2015 Results 39

Significant Growth Potential

* Age-related Macular Degeneration

Source: Essilor estimates, Worldbank, United Nations, CIA, World Population Prospects, Epidemiological and Marketing studies

DEMOGRAPHY VISION CORRECTION VISION PROTECTION

In billions of people In billions of people

7.2 8.2 0.9% Worldwide

Population

4.0 5.0 2.0% Urban

Population

2015 2030 CAGR

4.5 6.0 2.1% Correction

Needs

1.9 2.9 3.0% Correction

Wearers

2015 2030 CAGR

1.7 2.7 3.3%

Myopia

2.1 3.0 2.5%

Presbyopia

In billions of people 2015 2030 CAGR

1.4 3.0 5.2% Sunglass

Wearers

120m 200m 2.6%

AMD*

260m 440m 3.6%

Cataracts


2015 Results 40

A Still-Fragmented Industry

Manufacturers

Distributors

& Laboratories

Retail

1,260 million prescription lenses

610-650 million pairs of non-

prescription sunglasses

150 to 200 Small operators

1,500 to 2,000 Local operators

250 to 350 Manufacturers

Prescription lenses Readers

250-300 million pairs of readers

Sunglasses

350,000+ Eye Care Professionals

Drugstores, Duty free shops,

Mass merchandisers,

Sporting goods E-tailers


Essilor market share in units


2015 Results 41

Still Many People with Bad Vision


2015 Results 42

Essilor, a Pure Play in a ~€85bn Market(1)

…

W E A R E R S

Contact Lenses

Spectacle Lenses

Readers

Surgical

Pharmaceutical Sunglasses

Frames

VISUAL HEALTH SOLUTIONS

(1) Sell-out value for contact lenses, spectacle lenses, readers, sunglasses and frames



2015 Results 43

… and an Undisputed Leader with only 25% Market Share…

Total market share in units:

ONLINE

~1,260 m lenses

PRESCRIPTION

LENSES

Market units

Essilor market share

~41%

610-650 m pairs

SUNGLASSES

Market units


250-300 m pairs

READERS

Market units


~15%

~€4bn

Market value


~5% ~15%

Source: Essilor estimates, Estin


~25%

2015 Results 44

… In a Bigger and Faster-Growing Playing Field

Size and growth of industry segments by 2018

Prescription sun lenses are included into prescription lenses

Fast-Growing Markets include China, India, ASEAN, South Korea, Hong Kong, Taiwan, Africa, the Middle East, Russia and Latin America

10-12%

FAST-GROWING

MARKETS

Superior Products & Innovative Services

Operational Efficiency

€8.5bn

SUNWEAR

6-7%

€5.8bn

14%

ONLINE

€12.7bn

3-4%

PRESCRIPTION

LENSES

€27.0bn 6-7% Essilor ambition by 2018

>6% like-for-like growth


2015 Results 45

Five Key Competitive Advantages to Extend our Leadership

Supply chain

& servicing capabilities

Innovation

Consumer &

customer

proximity

Unique partnership &

acquisition formula

Growing brand

portfolio


2015 Results 46

Superior Innovation Drive

PRESBYOPIA

& SENIORS MYOPIA

& YOUNG ADULTS

WELL BEING

& HEALTH

SUN, POLARIZATION

& PHOTOCHROMICS

PERSONALIZATION

& SEGMENTATION

ONLINE

& 2.5 NVG


2015 Results 47

A Large and Growing Brand Portfolio

PRESCRIPTION LENSES SUNWEAR ONLINE


2015 Results 48

Extended Supply Chain and Servicing Capabilities

350,000+

Eye Care

Professionals

1bn people

wear our

products

daily around

the world

Consumers’

prescriptions

and needs

ESSILOR SUPPLY CHAIN

32 Plants

490 Prescription

Laboratories

16 Distribution

Centers Contact

Lenses

Frames E-tailers

Products sourced from

other manufacturers


2015 Results 49

The Intangible Value of Consumer & Customer Proximity at Global Level

Duty free outlets

Field servicing

representatives

Online solutions

Sales & customer service

representatives


2015 Results 50

A Unique Recipe for Success: Partnerships and Acquisitions

~80% 50%+ 100%


2015 Results 51

These Competitive Advantages Give Essilor a Unique Position in the Value Chain


Loyalty & adherence

Proximity with ECPs

Critical Mass

Dissemination of innovation

Proximity with consumers

Innovation Consumer brands

Internet 2.5 NVG

Supply Chain Sourcing

Acquisitions Partnerships

2015 Results 52

Five Key Growth Levers to Continue Value Creation

Growth potential in value terms as big in developed markets as in fast-growing ones

A leading position in North America, the world's largest optical market in value terms

Maximizing the impact of two growth drivers: innovation and consumer marketing

Leveraging interconnections between all businesses

Acquisitions, new business models and organic growth

1

2

3

4

5


2015 Results 53

Growth Potential in Value Terms as Big in Developed Markets as in Fast-Growing Markets

1

M&A opportunities in both geographies

DEVELOPED MARKETS

1 billion people

A ~€60bn market(1)

2-3% growth

USA: biggest market(1) in

value: ~$30bn


Source: Essilor – 2015 estimates, Worldbank

(1) Sell-out value for contact lenses, spectacle lenses, readers, sunglasses and frames


6 billion people

A ~€25bn market(1)

>10% growth

China: second biggest

market(1) in value: ~€8bn


2015 Results 54

A Leading Position in North America, the World's Largest Optical Market in Value Terms

2

Underdeveloped market Faster Growth All business segments

(1)Penetration of total lens industry in volumes in 2015

(2)Volume growth

Source: Essilor estimates

~11%(2)

ONLINE

SUNWEAR

PRESCRIPTION LENSES Progressive Lenses(1)

Antireflective Lenses(1)

USA

30%

France

49%

New Zealand

39%

USA

39%

Spain

95%

China

68%

>15%


>30%

2015 Results 55

Maximizing the Impact of Two Growth Drivers, Each Representing €200m in Annual Expenditure

3

Innovation Consumer marketing


2015 Results 56

Leveraging Interconnections between all Businesses 4


2015 Results 57

Acquisitions, New Business Models and Like-for-like Growth

5

All business segments New models


Prescription Lenses

Sunwear

Online

Fast-Growing Markets

+

+

+


2015 Results 58

A Powerful Corporate Culture

61,000

employees

A global mindset

Paris / Singapore / Dallas

400 entrepreneurial equity partners

Strong alignment with shareholders

~25% of the Group’s

employees are shareholders

Group’s leading shareholder

A powerful commitment to a unique mission

Poor Vision is the World’s Biggest

Disability


2015 Results 59 3. A Broader, Stronger Company

GREAT VISION ALL THROUGH YOUR LIFE

2015 Results 60

Jayanth Bhuvaraghan – Chief Corporate Mission Officer

4. Creating New Wearers to

Fight Poor Vision

2015 Results 61

Poor Vision, the World’s Largest Disability: Awareness and Access are Main Barriers

4. Creating New Wearers to Fight Poor Vision

(in billion of people)

Number of people with uncorrected vision needs

95% of people with uncorrected vision

needs live in emerging markets

Lack of Awareness & Access

“I didn’t know I had poor vision”

“I didn’t know readers could help”

“I have to travel 30km to the next township

to get my glasses”

0.00

2.60

2.70

2016 2021 2018 2013 2019 2022 2015 2014 2025 2017 2024 2020 2023 2050

2.5

3.2

1.7

If we don’t act

With Essilor

initiatives

2015 Results 62

All Studies Confirm the Major Impact of Vision Correction on Quality of Life

Increased productivity

and wellbeing for new spectacle wearers

Higher renewal frequency

First-time wearers will pay

40% more when renewing their glasses

New wearers from 2.5bnuncorrected population

Mainstream wearers

1.8 years

3 years

Source: Dalberg Eye Mitra Impact Study – August 2015, India Low-Income Survey, Essilor

How much would you be ready to pay for

your next pair of glasses?

Index price stated: 100 = first glasses

First-time wearers Renewers

140

100

+40%


2015 Results 63

Corporate Mission: A Global Team Dedicated to Expanding the Market for Sustainable Long-Term Growth

Improving Lives by Improving Sight, for everyone, everywhere:

our main contribution to Sustainable Development

BoP Innovation Lab


2015 Results 64

2.5 New Vision Generation: Creating Innovative Solutions In Emerging Markets to Reverse the Trend of Poor Vision

Business model innovation Product/Service Innovation

BoP Innovation Lab

ON-THE-SPOT SOLUTIONS

Adaptive Scalable Impactful Training Product range Merchandising


2015 Results 65

Improving Access: Building an Ecosystem of Fixed & Mobile Touch Points

Training Manpower Developing Infrastructure

Vision Entrepreneur Programs Partnerships with public and private

hospitals, governments & NGOs

Mainstream

opticians


2015 Results 66

Crafting an Army of Vision Entrepreneurs

1. Vision Ambassadors 2. Eye Mitra Opticians

Target: presbyopic segment

1-day training course

Part-time work

Readers and sunglasses

Mainstream

opticians

Near Vision for Presbyopes and Sunglasses 40 %

All types of RX 100 %

Business Skills


2015 Results 67

Example of Vision Ambassadors: China


Headquarters

Region Offices

250m presbyopes, majority in rural

areas

Set to increase to over 300m by 2020

Partnerships with private hospitals in

3 provinces (population: 152m)

Leveraging ‘village doctor’ network

300 # Vision Ambassadors in 2015

Geographic complementarity with

other Group businesses


Lenses & Optical Instruments facilities

Sunglasses & Readers facilities

Online facilities

2.5 NVG

HQ

2015 Results 68

Example of Vision Ambassadors: Brazil


87% urban population

¾ of uncorrected are urban poor

Lack of access to ophthalmologists

and to affordable glasses

Click and Mortar model Leveraging Group online platform

Glasses4you

30 # Vision Ambassadors in

Pilot (launched Dec 2015)


201 million inhabitants

~ 110 million people (~55%)

require vision correction

30/40 million are not corrected

~73% live in

the Northeast

and Southeast

of the country

2015 Results 69

Crafting an Army of Vision Entrepreneurs


Full time career

12 months training

2 months in classroom

10 months in-store

Full range of prescription eyewear + sunglasses

Supported by rural marketing campaigns

Mainstream

opticians



Business Skills


2015 Results 70

India: Successfully Leveraging Both Models


Working Eye Mitra

in 13 states

Eye Mitra Opticians

Vision Ambassadors 155 # Vision Ambassadors in 2015

1,088 # Eye Mitra Opticians in 2015

180,000 customers served in 2015

75% of customers buy their first pair of glasses

64% increase in income for previously

employed EMO


2015 Results 71

Strong Business Models to Replicate and Scale Up

(M0) NEAR VISION for Presbyopes & Sunglasses)

(M2) ALL types of Rx

(L1) Business Skills

Mainstream

Optician

100%

40%

Mainstream

opticians



Business Skills

1,000

2015 2020

12,000

500 32,000

(M0) NEAR VISION for Presbyopes & Sunglasses)



Mainstream

Optician

100%

40%(M0) NEAR VISION for Presbyopes & Sunglasses)



Mainstream

Optician

100%

40%


2015 Results 72

Value Creation: Creating Tomorrow’s Customers

2030: 500m New Wearers

Expanding the market

Creating a competitive edge

Contributing to Essilor’s sustainable long-term growth



2015 Results 74


5. Outlook

2015 Results 75

Outlook for 2016

5. Outlook

(1) Contribution from operations = Revenue less cost of sales and operating expenses (research and development costs, selling and distribution costs, other operating expenses).

(2) Excluding any additional strategic acquisitions.

Revenue Growth:

Like-for-like

Excluding currency effect

Contribution from operations(1)

as a percentage of revenue

>8%

Around 5%

≥18.8%(2)

2015 Results 76

Questions & Answers

2015 Results February 19, 2016

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