26
3Q 2014 results Milan, October 29, 2014
3Q 2014 results
Milan, October 29, 2014
FORWARD LOOKING STATEMENTSCertain statements in this investor presentation may constitute “forward-looking statements” as defined in the PrivateSecurities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that could causeactual results to differ materially from those which are anticipated. Such risks and uncertainties include, but are not limitedto, our ability to manage the effect of uncertain global economic conditions on our business, fluctuations in exchangerates our ability to successfully acquire new businesses and integrate their operations our ability to predict futurerates, our ability to successfully acquire new businesses and integrate their operations, our ability to predict futureeconomic conditions and changes in consumer preferences, our ability to successfully introduce and market new products,our ability to maintain an efficient distribution network, our ability to achieve and manage growth, our ability to negotiateand maintain favorable license arrangements, the availability of correction alternatives to prescription eyeglasses, changesin local conditions, our ability to protect our proprietary rights, our ability to maintain our relationships with host stores, anyfailure of our information technology, inventory and other asset risk, credit risk on our accounts, insurance risks, changesin tax laws, as well as other political, economic, legal and technological factors and other risks and uncertainties describedin our filings with the US Securities and Exchange Commission. These forward-looking statements are made as of thedate hereof, and we do not assume any obligation to update them.
This investor presentation contains measures that were not prepared in accordance with IAS/IFRS. For areconciliation of non-IAS/IFRS measures used in these materials, see the Company’s press release titled “Solidgrowth in net sales and profitability in the third quarter of 2014, record free cash flow” dated October 29, 2014,available on the Company’s website www.luxottica.com under the Investors tab.
SOLID 3Q 2014 SALES GROWTH
› Group sales: +6.8% adjusted(3), +5.5% reported
• Wholesale sales +9.3% vs. +13.1% at constant forex(1) in 3Q 2013
- Healthy momentum confirmed in North America and emerging markets
- Sun didn’t shine in Europe
• Retail comps(2) +4.4%
- Sunglass Hut comps(2) worldwide: +7.4%
- LensCrafters North American comps(2) accelerating: +2.5%
- Challenging optical retail environment in Australia
3Q 2014 results 3
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix.
STRONG GROWTH IN PROFITABILITY AND RECORD FREE CASH FLOW GENERATION(3)RECORD FREE CASH FLOW GENERATION(3)
› Solid increase in adjusted operating income(3): +16.1%, margin up by 120bps
• Strong improvement in wholesale margin: +170bps
• Retail margin expansion: +70bps, driven by North America
› Continuous efficiency enhancements and control of working capital driving strong free cash flow(3) generation of €316capital driving strong free cash flow(3) generation of €316 million
• Net debt / adjusted EBITDA(3)(4): 0.7x
43Q 2014 results
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix.
3Q 2014 GROUP SALES GROWTH
Europe
+0.6%(1)
North America
+5.3%(3)
Emerging markets
+25.7%(1)( )
vs. +19%
( )US$
Continental-2.1%(1)
vs. +21% in 3Q 2013
Mediterranean+18.2%(1)
vs. +24% in 3Q 2013
Eastern+1.3%(1)
vs. +13% in 3Q 2013
53Q 2014 results
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix. Sales performance includes wholesale and retail.
9M 2014 GROUP SALES GROWTH
EuropeNorth America Emerging markets p
+6.4%(1)+3.3%(3)US$
+18.6%(1)
3Q 2014 results 6
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix. Sales performance includes wholesale and retail.
3Q 2014 ADJUSTMENTS TO REPORTED RESULTS
Impact onG l
Impact on Group i i
Impact on Group iGroup sales
(€ mn)operating income
(€ mn)net income
(€ mn)
• EyeMed change in presentation of net sales: commencing in 3Q14 net sales are reported on a net 22 7basis due to a change in the contractual terms of an insurance underwriting agreement
-22.7 - -
• Redundancy incentive payment related to the - -15 0 -10 9departure of Andrea Guerra - -15.0 -10.9
73Q 2014 results
SALES PERFORMANCECurrency headwinds ease in 3QCurrency headwinds ease in 3Q
3Q 2014 9M 2014Reported ReportedAdjusted(3) Adjusted(3)
+6.8%+6.7% @ c.fx(1)
+5.5%+5.3% @ c.fx(1)
+2.5%+6.0% @ c.fx(1)
+2.1%+5.5% @ c.fx(1)
Wholesale at constant forex(1)
+9.3%Wholesale at constant forex(1)
+9.2%Retail comps(2)
+4.4%Retail comps(2)
+3.7%
83Q 2014 results
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix.
SOLID GROWTH IN OPERATING PROFITABILITY(3)(4)
Wholesale (€ mn)
21 2%
+120bps @ c.fx.(1)Group (€ mn)+100bps @ c.fx.(1)
56461524.0%
24.7%
16 6%
134159
3Q 2013 3Q 2014
19.5%21.2%
9M 2013 9M 2014
901963
15.9%16.6%
Retail (€ mn)
15 0%15.7%
+40ps @ c.fx.(1)
25529614.3%
15.5%
477 48814.4% 14.7%
165181
3Q 2013 3Q 2014
15.0%
3Q 2013 3Q 2014
9M 2013 9M 2014
9M 2013 9M 2014
93Q 2014 results
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix.
STRONG GROWTH IN NET INCOME(3)(4)
Group (€ mn)+70bps @ c.fx.(1)
9 7%
EPS (€ cents)
111119
31 36
3Q 2013 3Q 2014525
5669.3%9.7% 111
9M 2013 9M 2014
1481738.3%9.1% EPS (US$ cents)
146161
3Q 2013 3Q 2014 41 48
3Q 2013 3Q 2014
9M 2013 9M 2014
9M 2013 9M 2014
103Q 2014 results
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix.
DEBT OVERVIEW
1,429
1,119
Net debt(3) (€ mn)Further strong deleveraging during 3Q • Net debt / adjusted EBITDA(3)(4) at 0.7x
Strong free cash flow(3) generation driven by:Profitability improvement and effective working capital
2Q 2014 3Q 2014
295 316
Free cash flow(3) (€ mn)
• Profitability improvement and effective working capital control
• Capex increased to €96 million from €81 million in 3Q 2013
295
3Q 2013 3Q 2014
O ti ki it l (€ )∆ days: further improvement by 15 days • DSO -3• DSI -11
DPO +1
123 139
3Q 2013 3Q 2014
Operating working capital (€ mn)
11
• DPO +1
For additional disclosures regarding information in this presentation, please see “Notes on the presentation” in the Appendix
3Q 2014 results
3Q 2013 3Q 2014
2014 “RULE OF THUMB”Consistent execution continues to pay off
% growth vs. 9M13 (@ constant forex(1))
Consistent execution continues to pay off
R t d Adj t d
HIGH SINGLE-DIGITSALES GROWTH +6%+6%
Reported Adjusted(3)(4)
2x SALES GROWTHOPERATING INCOME +13%+12%
2x SALES GROWTHNET INCOME +14%+13%
123Q 2014 results
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix.
REVENUE ROADMAP BY GEOGRAPHY
North America
ale (
1)
Western Europe Emerging markets
+20%+21%+28%
+18% +16-20%
Who
lesa
+2%+7%
+11%+9%
3Q 9M 3Q 9M 2014
+7-9%+15%
+8%
-3%+3%
3Q 9M 3Q 9M 2014
+4-6%
3Q 9M 3Q 9M 2014
2)
Optical AustraliaNorth America Emerging markets
3Q2013
9M2013
3Q2014
9M2014
2014E
Q2013 2013
Q2014 2014 E 2013 2013 2014 2014 E
12%+13-16%
+15Ret
ail (2
+1% +2% +4% +3%
3Q2013
9M2013
3Q2014
9M2014
2014E
+3-6%
+12%+10% +9% +11%
3Q2013
9M2013
3Q2014
9M2014
2014E
+3%+6%
0%+2%
3Q2013
9M2013
3Q2014
9M2014
2014E
+5-7%
13
For additional disclosures regarding information in this presentation, please see “Notes to the presentation” in the Appendix
2013 2013 2014 2014 E 2013 2013 2014 2014 E2013 2013 2014 2014 E
3Q 2014 results
LENSCRAFTERSBrand execution and service superiority driving resultsBrand execution and service superiority driving results
› 2.5% comps(2) driven by eye exams, customer count, operational effectiveness, with all KPI’s accelerating through the quarter
• +5.5% eye exams
• +4.2% customer count
• Tighter performance management and labor planning acumen
› CRM sophistication and store segmentation enabling more tailored offering and higher conversion rateoffering and higher conversion rate
› Further improvement in store operating profit thanks to higher saturation of in-store labs and tighter management of waste & shrink
3Q 2014 results 14
SUNGLASS HUTLeading fashion-forward sun trendsLeading fashion forward sun trends
› Hitting the world with “94 shades of Summer” global campaign, total sales up by 13%(1)( )
• Solid North America: +6.7% comps(2)
• Continuous comps growth in Europe, Australia, South Africa and L ti A iLatin America
› Further expansion in Southeast Asia and Latin America
• Opened 13 new airport locations and Perisur Mall in MexicoOpened 13 new airport locations and Perisur Mall in Mexico
• Entering Indonesia and Thailand
› Getting ready for the Christmas season with in-store and
3Q 2014 results 15
digital global campaign
3Q 2014 WHOLESALEStrong trading environment persisting in North America and emerging marketsStrong trading environment persisting in North America and emerging markets
› North America
• Sales accelerating, driven by healthy demand and strong brand portfolio: +11.3% in US$
› Emerging markets
• Strong growth across key emerging markets
China Brazil and India >30%- China, Brazil and India >30%(1)
- Key focus on Southeast Asia
• Successful first year in Thailand
O i M l i
3Q 2014 results 16
• Opening Malaysia
3Q 2014 WHOLESALERelentless growth of optical collections butRelentless growth of optical collections, but sun didn’t shine in Europe
› European sales down by 1 7%(1) vs +15%(1) last year the best› European sales down by 1.7%(1) vs. +15%(1) last year, the best quarter of 2013
• Positive growth in the optical business +5.1%(1) vs. 2013
• But unfavorable weather during peak sun season
- Negative July/August, improving in September and October
• Western Europe mostly impacted by tough comparison and bad p y p y g pweather: -3%(1)
• Eastern Europe on a solid path: +14%(1)
3Q 2014 results 17
HEADING INTO 2015
› Strong momentum for brand portfoliog p
• Orders up double-digits
• Michael Kors ready to start, already strong early orders
› Expected positive contribution from currencies
3Q 2014 results 18
OneSight is a non-profit providing access to quality vision care and eyewear in underserved communities worldwide. Since 1988, OneSight has engaged thousands of skilled volunteers across Luxottica and other industry partners to hand-deliver sight to 8.6 million people in 40 countries.
3Q 2014 RESULTS Vision care programsOneSight helped 20,609 people through six vision clinics and numerous community outreach programs.
Sustainable programs OneSight has three successful vision centers and a central manufacturing lab in The Gambia, a country in West Africa that previously had one optometrist to serve 1.8 million people. The goal of these centers is to provide sustainable access to affordable vision care. In 3Q 2014, 4,299
16-year old Refliana was in desperate need of glasses. She came to the Clinic with help from her classmates who escorted her around At
Gambians received care across vision centers in Farafenni, Bansang and Kanifang. A fourth vision center will open later this year in Brikama. By the end of 2015, eight vision centers will serve the needs of the entire country.
Research foundation
her classmates who escorted her around. At school, she is cared for by her classmates who read to her. With new eyewear from OneSight, Refliana is looking forward to more independence and school success.
2014 I d i Vi i Cli iResearch foundationAwarded research grants totaling US$64,961 to organizations focused on diabetic eye diseases.
2014 Indonesia Vision Clinic
OneSight 19
20
APPENDIX
NOTES ON THE PRESENTATION› 1 Figures at constant exchange rates are calculated › 3 Net debt / EBITDA net debt / adjusted EBITDA› Figures at constant exchange rates are calculated
using the average exchange rates in effect duringthe corresponding period of the previous year.Please refer to the “Major currencies” table in thepress release titled “Solid growth in net sales and
› Net debt / EBITDA, net debt / adjusted EBITDA,net debt, EBITDA, adjusted EBITDA, adjustedoperating income, adjusted operating margin,adjusted net income, adjusted net sales, adjustedearnings per share and free cash flow are notp g
profitability in the third quarter of 2014, record freecash flow” dated October 29, 2014 available at thewww.luxottica.com website under the Investors tab.
› 2 Comparable store sales reflect the change in sales
g pmeasures in accordance with IAS/IFRS. Foradditional disclosure, see the press release titled“Solid growth in net sales and profitability in thethird quarter of 2014, record free cash flow” datedO t b 29 2014 il bl t th› 2 Comparable store sales reflect the change in sales
from one period to another, that, for comparisonpurposes, includes in the calculation only storesopen in the more recent period that also were openduring the comparable prior period, and applies to
October 29, 2014 available at thewww.luxottica.com website under the Investors tab.
› 4 Excluding non-recurring itemsduring the comparable prior period, and applies toboth periods the average exchange rate for the priorperiod and the same geographic area.
› 5 Equals interest income minus interest expenses
› 6 Equals extraordinary income minus extraordinaryexpenses
Appendix 21
› 7 Net debt figures are calculated using the averageexchange rates used to calculate EBITDA figures
RETAIL COMPARABLE STORE SALES(2)
3Q 2014
Optical North America
9M 2014
• LensCrafters +2.5% +0.4%
• Licensed brands +11 3% +5 6%• Licensed brands +11.3% +5.6%
Optical Australia/New Zealand -0.2% +1.9%
Sunglass Hut worldwide +7.4% +8.0%
Gro p retail +4 4% +3 7%
22
Group retail +4.4% +3.7%
Appendix
WHOLESALE SALES BREAKDOWNWHOLESALE SALES BREAKDOWN FOR 9M 2014WHOLESALE SALES BREAKDOWN FOR 3Q 2014
Wholesale sales: +9.2%(1)
(Sales breakdown by region, 9M 2014)(1)
Wholesale sales: +9.3%(1)
(Sales breakdown by region, 3Q 2014)(1)
37%11%RoW Western Europe
33%11%RoW Western Europe
26%
26%
North America
Emergingmarkets
29%27%
North America
Emergingmarkets
Western Europe +3%North America +9%
YoY changes by region, 9M 2014(1)Western Europe -3%
North America +11%
YoY changes by region, 3Q 2014(1)
23
Emerging markets +18%RoW +13%
Appendix
Emerging markets +28%RoW +7%
DEBT OVERVIEW
Adj. EBITDA(3)(4) 347 395 Net US$ debt(3) (413) (269) 144
3Q 20133Q 2013 3Q 20143Q 2014 June 30,2014
June 30,2014
Sept. 30,2014
Sept. 30,2014 ∆∆
∆ working capital 122 91
Capex (81) (96)
O ti h
Net € debt(3) (1,127) (905) 222
Translation adj. (3)
Operating cashflow 388 390
Financial charges(5) (22) (24)
€ 1 = US$ 1.3658 1.2583
Net debt (€)(3) (1,429) (1,119) 310
Net debt / adj. 1 0x 0 7xTaxes paid (71) (50)
Extraordinarycharges(6)
- -
F h fl 295 316
EBITDA(3)(4)1.0x 0.7x
Net debt / adj. EBITDA excludingexchange rate ff t
1.0x 0.7x
Appendix 24
Free cash flow(3) 295 316 effect(3)(4)(7)
INVESTOR RELATIONS TEAM
Alessandra SeniciTel. +39 (02) 8633 - 4662 [email protected]
Elena DimichinoTel. +39 (02) 8633 - 4038 [email protected]
Giorgio IannellaGiorgio IannellaTel. +39 (02) 8633 - 4510 [email protected]
Elisa CattaruzzaElisa CattaruzzaTel. +39 (02) 8633 - 4870 [email protected]
www.luxottica.com
Contacts 25
www.luxottica.com
SOCIAL MEDIA CONTACTS
http://www.luxottica.com pinterest.com/Luxotticagroup
@Luxottica
Like our LuxotticaGroup page
instagram.com\Luxotticagroup
slideshare.net\LuxotticaGroup
youtube.com/luxotticagroup
LinkedIn.com/company/Luxottica_Group
Contacts 26
