New Look Vision Group Inc. — Management Reports 2021

Mar 26, 2021

MANAGEMENT’S DISCUSSION AND ANALYSIS

Year ended December 26, 2020

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Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

BACKGROUND

This Management Discussion and Analysis ("MD&A") relates to the financial condition and results of operations of New Look Vision Group Inc. ("New Look Vision" or the "Company") and its subsidiaries, which include entities over which New Look Vision has the power to govern the financial and operating policies so as to affect the amount of its return without owning shares of these entities (New Look Vision and its subsidiaries are together referred to as the “Group”), as at and for the 13 and 52 weeks ended December 26, 2020 ("Q4 2020" and "fiscal 2020").

This MD&A provides prospective data, comments and analysis wherever appropriate to assist readers in viewing the business from corporate management’s point of view. The purpose of this MD&A is to provide a better understanding of our activities and should be read in conjunction with the audited consolidated financial statements for the years ended December 26, 2020 and December 28, 2019.

Except where otherwise indicated, all financial information reflected herein is expressed in thousands of Canadian dollars and is determined on the basis of International Financial Reporting Standards (IFRS). Additional information relating to the Group can be found on the website www.newlookvision.ca. The Group’s continuous disclosure materials, including the annual and quarterly MD&A, annual and quarterly financial statements, annual information forms, proxy solicitation and information circulars and various press releases are also available through the SEDAR system at www.sedar.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

All statements other than statements of historical fact contained in this MD&A are forward-looking statements, including, without limitation, statements regarding the future financial position, business strategy, projected costs and plans and objectives of, or involving New Look Vision. Readers can identify many of these statements by looking for words such as “believe”, “expects”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “plans”, “may”, “would” or similar words or the negative thereof. Forward-looking statements are subject to risks, uncertainties and assumptions. Although management of New Look Vision believes that the plans, intentions or expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct. Some of the factors which could affect future results and could cause results to differ materially from those expressed in the forward-looking statements contained herein include: pending and proposed legislative or regulatory developments, competition from established competitors and new market entrants, technological change, interest rate fluctuations, general economic conditions, acceptance and demand for new products and services, and fluctuations in operating results, as well as other risks included in New Look Vision’s current Annual Information Form (AIF) which can be found at www.sedar.com. The forward-looking statements included in this MD&A are made as of the date hereof, and New Look Vision undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as provided by law.

COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Company presents its financial statements on the basis of IFRS issued by the International Accounting Standards Board (IASB). The use of IFRS is compulsory for public companies such as New Look Vision. Full details of accounting policies are found in the audited consolidated financial statements for the year ended December 26, 2020.

Non IFRS measures

The Company uses non-IFRS measures to complement IFRS measures, to provide investors with supplemental information of its operating performance and to provide further understanding of the Company's results of operations from management's perspective. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Non-IFRS measures should not be considered in isolation nor as a substitute for an analysis of the Company's financial information reported under IFRS. These measures are identified and defined as they appear in this document.

2

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

DESCRIPTION OF BUSINESS

New Look Vision is a leading provider of eye care products and services across Canada and has recently entered the United States market. The Group has retail sales of optical products which can be grouped into four principal categories: (i) prescription and nonprescription eyewear, (ii) contact lenses, (iii) sunglasses, protective eyewear and reading glasses, and (iv) accessories, such as cleaning products for eyeglasses and contact lenses. Certain prescription lenses are processed at its laboratories, located in Ville St-Laurent, Québec and in Charlottetown, Prince Edward Island. The Charlottetown laboratory was closed in the fourth quarter, as part of the facility consolidation strategy announced in Q2, 2020.

New Look Vision’s retail activities are mainly conducted under the “New Look Eyewear,” “Greiche & Scaff,” “Iris”, "Vogue Optical”, "Edward Beiner" and "The Vision Clinic" trade names (retail banners) and had the following geographical market distribution on December 26, 2020.

	**Quebec **	Ontario	British	New	Nova	**Alberta **	Newfoundland	Prince	**Saskatchewan **	United	Total
			Columbia	Brunswick	Scotia		& Labrador	Edward		States
								Island
Number
of
stores	200	52	46	28	22	17	15	8	2	12	402

As at December 26, 2020, the Company's network of stores totaled 402, consisting of 293 wholly-owned corporate, 50 majority-owned, 39 jointly-owned and 20 franchised locations.

Since the year end, the Company acquired 6 stores in Canada and made 1 scheduled closure, bringing the store network count to 407.

3

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

HIGHLIGHTS

Highlights for the fourth quarter of 2020 compared to the fourth quarter of 2019 and year ended December 26, 2020 compared to the 2019 and 2018 fiscal years are summarized below. Refer to section Results Analysis - IFRS 16 Impact for additional information.

		13 weeks			52 weeks	52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 29,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019	2018
Revenues	$92,396	$92,396	$73,929	$274,739	$274,739	$297,865	$291,032
Variance %	25.0%	25.0%		(7.8%)	(7.8%)
Variance in comparable store sales orders(a)(b)	12.0 %	12.0 %	3.6%	—	—	2.3%	—
Adjusted EBITDA attributed to shareholders(b)	$28,603	$22,808	$14,271	$79,929	$56,913	$55,851	$54,468
Variance %	100.4%	59.8%		43.1%	1.9%	2.5%
% of revenues	31.0%	24.7%	19.3%	29.1%	20.7%	18.8%	18.7%
Per share (diluted)	$1.83	$1.46	$0.91	$5.10	$3.63	$3.57	$3.49
Variance %	101.1%	60.4%		42.9%	1.7%	2.3%
Net earnings attributed to
shareholders	$10,007	$10,607	$5,039	$11,616	$13,816	$18,754	$14,193
Variance %	98.6%	110.5%		(38.1%)	(26.3%)	32.1%
% of revenues	10.8%	11.5%	6.8%	4.2%	5.0%	6.3%	4.9%
Net earnings per share
Per share (diluted)	$0.64	$0.68	$0.32	$0.74	$0.88	$1.20	$0.91
Variance %	100.0%	112.5%		(38.3%)	(26.7%)	31.9%
Adjusted net earnings attributed to
shareholders(b)	$12,717	$13,317	$7,865	$20,620	$22,820	$26,080	$22,973
Variance %	61.7%	69.3%		(20.9%)	(12.5%)	13.5%
% of revenues	13.8%	14.4%	10.6%	7.5%	8.3%	8.8%	7.9%
Per share (diluted)	$0.81	$0.85	$0.50	$1.32	$1.46	$1.67	$1.47
Variance %	62.0%	70.0%		(21.0%)	(12.6%)	13.6%
Cash flows related to operating
activities	$24,456	$16,613	$7,343	$77,940	$58,009	$43,607	$34,786
Variance %	233.1%	126.2%		78.7%	33.0%	25.4%
Per share (diluted)	$1.56	$1.06	$0.47	$4.98	$3.70	$2.79	$2.23
Variance %	231.9%	125.5%		78.5%	32.6%	25.1%
Free cash flow(b)(c)	$20,007	$12,163	$3,829	$66,255	$46,324	$33,757	$25,992
Variance %	422.5%	217.7%		96.3%	37.2%	29.9%
Per share (diluted)	$1.28	$0.78	$0.24	$4.23	$2.96	$2.16	$1.66
Variance %	433.3%	225.0%		95.8%	37.0%	30.1%
Total debt(d)				$227,137	$227,137	$149,928	$158,575
Net debt / Adjusted EBITDA attributed
to shareholders(b)(e)				2.10	2.51	2.58	2.72
Cash dividend per share(f)	—	—	$0.15	—	—	$0.60	$0.60
Number of stores(g)				402	402	378	373

a) Comparable stores are stores which have been operating for at least 12 months. Due to the exceptional circumstances during the year, where there was a period 80% of the Company's stores were closed and then gradually re-opened between March 2020 to

4

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

June 2020 due to COVID-19, management deems the year-to-date period to be non-comparable and is therefore not reporting a comparable store sales metric for this period. Revenues are recognized at time of delivery of goods to customers, however management measures the comparable store performance on the basis of sales orders, whether delivered or not.

• b) Adjusted EBITDA attributed to shareholders, adjusted net earnings attributed to shareholders, free cash flow and comparable store sales orders are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. Refer to the sections EBITDA and adjusted EBITDA, net earnings and adjusted net earnings, operating activities and free cash flow for the definitions and reconciliations.

• c) Free cash flow is defined as operating cash flows less acquisitions of property, plant and equipment.

• d) Total debt is defined as long-term debt excluding IFRS 16 lease liabilities.

• e) Net debt is defined as total debt less cash. Adjusted EBITDA attributed to shareholders represents the amount over the last four rolling quarters.

• f) The amounts of dividends included in this metric refer to amounts declared in the periods, on a per share basis.

• g) The increase in the number of stores in the last twelve months reflects the acquisition of 36 stores net of 1 planned merger, 10 planned closures and the sale of one clinic.

OVERVIEW

Despite an unprecedented year due to the COVID-19 pandemic, the Company demonstrated remarkable resilience and continued to successfully position itself as a leader in the Canadian retail optical business.

The Company's focus was on ensuring safe access to eye care services, while putting in proactive measures to prevent the spread of the virus and to protect its professionals, employees and clients. The Company adopted strict COVID-19 operating guidelines, which included pre-appointment triage, social distancing and physical separation measures, disinfecting protocols and the mandated use of personal protective equipment ("PPE").

The Company took aggressive cost measures such as temporary lay-offs, executive salary reductions, application of government subsidies and sweeping expense reductions, as well as the establishment of an emergency pay program to supplement the federal government Canada Emergency Wage Subsidy (“CEWS”) program for employees placed on temporary leave, excluding those benefiting from the Canada Emergency Response Benefit (“CERB”). The Company secured an additional $73.9 million in financing to strengthen its balance sheet and boost liquidity in response to ongoing and potential COVID-19 headwinds.

The Company posted another strong quarter in spite of the ongoing impact of COVID-19 in the markets in which it operates. This is validation of the Company's fundamental optical retail business model which has been built, step by step, over the past decade, the resilience of the industry and the depth and strength of it's management team and employees.

The Q4 2020 highlights, excluding the impact of IFRS 16, where applicable are:

• Revenues increased by 25.0% compared to the fourth quarter of last year to reach $92.4 million as a result of comparable store sales and revenues from newly acquired stores.

• Comparable store sales were up 12.0% as a result of enhanced store operating procedures and the shift in customer behavior.

• Adjusted EBITDA attributed to shareholders reached $22.8 million, a 59.8% increase the fourth quarter of last year.

• Net earnings attributed to shareholders increased by 110.5% compared to the fourth quarter of last year (112.5% on a per diluted share basis) to $10.6 million.

• Adjusted net earnings attributed to shareholders increased by 69.3% compared to the fourth quarter of last year (70.0% on a per diluted share basis) to $13.3 million.

• Compared to the fourth quarter of last year, cash flows related to operating activities reached $16.6 million, an increase of 126.2% (125.5% on a per diluted share basis).

• Strong cash position at quarter end of $59.2 million coupled with available credit of $49.1 million.

• The Company actively continued to pursue its significant pipeline of acquisition opportunities in Canada and the United States and acquired 15 stores in the quarter.

5

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

The full year 2020 highlights, excluding the impact of IFRS 16, where applicable are:

• Annual revenues, as expected, decreased due to government mandated store network shutdown and related headwinds offset by newly acquired stores.

• Net earnings attributed to shareholders decreased by 26.3% over last year (26.7% on a per diluted share basis) to $13.8 million.

• Adjusted EBITDA attributed to shareholders was $56.9 million, an increase of 1.9% over last year with a corresponding increase of 1.7% on a per diluted share basis to $3.63.

• Cash flows related to operating activities reached $58.0 million, increasing by $14.4 million or 33.0% and increased 32.6% on a per diluted share basis to $3.70 year-over-year.

• Net debt was $167.9 million compared to $143.9 million.

• The Company actively continued to pursue its significant pipeline of acquisition opportunities in Canada and the United States and acquired 36 stores in the year.

The Company is poised to grow revenues and EBITDA for the foreseeable future and is confident it will withstand possible COVID-19 pandemic related disruption given its efficient operations, historical profitability, existing credit lines and strong balance sheet, and the proven resilience of its business model. The company remains focused on its profitable growth strategy in Canada and the United States for 2021. Solid operating performance as well as the successful integration of recent acquisitions have allowed the Company to improve its already strong market position.

Omnichannel Strategy Update

Born out of the investment and partnership with innovative eyewear startup Topology, New Look Vision has launched its market-leading precision-enabled eyewear iPhone and iPad application that takes ultra-precise measurements of the users face. This omnichannel strategy allows our customers to obtain better fitting frames, optimal vision and the possibility to pre-adjust frames right from the comfort of their homes. In the context of the COVID-19 pandemic, the application has been well-received by customers and professionals alike, as it gives customers peace of mind by helping them to shop for frames and prescription lenses virtually, and safely with the ultimate physical distancing, without having to compromise on quality.

Hearing Care Initiatives

New Look Vision’ hearing care initiatives resumed in the third quarter and progressed as expected. Given the ongoing pent up demand and the related impact at the store level, management has prioritized the optical side of the business for the short-term.

OUTLOOK

The Company will capitalize on the positive momentum achieved in the fourth quarter to continue growing revenues and EBITDA for the foreseeable future. With its newly enhanced omnichannel customer experience, tight cost controls, strong balance sheet, ample financial liquidity, and selective pursuit of acquisitions, New Look Vision is well positioned to continue driving growth and profitability in Canada and the U.S. in 2021 and beyond, regardless of potential ongoing COVID-19 headwinds.

In the near-term, New Look Vision will continue to adapt and evolve to mitigate the market pressures driven by the COVID-19 pandemic, simultaneously leveraging emerging trends and opportunities revealed by the pandemic.

Moving forward, fundamental priorities and the development plan remain constant, and include the following objectives:

• Drive operational synergies and economies of scale through successful integration of newly acquired businesses;

• Continue to improve liquidity and strengthen the balance sheet through a planned program of debt repayment;

• Increase market share by leveraging our state-of-the-art manufacturing and distribution facilities, marketing strategies, optometric facilities and continuous training of personnel;

• Selectively pursue value-enhancing acquisitions to complement our organic growth strategies. New Look Vision takes a targeted and opportunistic approach, identifying potential opportunities with a view to integrate them seamlessly into our network, accelerating growth, expanding market footholds, and creating shareholder value.

• Share best practices between the banners by benchmarking activities and identifying areas from which the Group can maximize results and cash flows;

• Leverage the six primary banners, New Look Eyewear, Greiche & Scaff, Vogue Optical, Iris, Edward Beiner and The Vision Clinic, which have proven and solid reputations in their respective markets;

6

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

• Improve the efficiency of our operations through investments in data analytics, retail, distribution, and manufacturing technology systems.

RESULTS ANALYSIS

IFRS 16 impact

The Company has adopted IFRS 16 Leases effective December 29, 2019. This standard replaces IAS 17 Leases. The Company has applied a modified retrospective cumulative catchup approach; the operating results of previous fiscal periods have not been restated. The adoption of this standard has impacted the Company’s financial results in 2020. Certain occupancy-related expenses previously recorded under the caption other operating expenses are now recorded as depreciation and interest expense.

This change has resulted in a reduction to Other operating expenses with a corresponding increase in EBITDA when compared to the same metrics under IAS 17. Depreciation and financial expenses have increased significantly as a result of the application of the standard.

The impact of IFRS 16 on the key metrics in the fourth quarter of 2020 and the year ended December 26, 2020 is summarized in the table below:

table below:
13 weeks Dec. 26, 2020 Impact of IFRS 16 Dec. 26, 2020 (excl. IFRS 16) Dec. 28, 2019 Change (excl. IFRS 16) $ $ $ $ $	52 weeks Dec. 26, 2020 Impact of IFRS 16 Dec. 26, 2020 (excl. IFRS 16) Dec. 28, 2019 Change (excl. IFRS 16) $ $ $ $ $
Adjusted EBITDA attributed to shareholders(a) $28,603 ($5,795) $22,808 $14,271 $8,537 % of revenues 31.0% (6.3%) 24.7% 19.3% 5.4% Per share (diluted) $1.83 $(0.37) $1.46 $0.91 $0.55 Net earnings attributed to shareholders $10,007 $600 $10,607 $5,039 $5,568 % of revenues 10.8% 0.6% 11.5% 6.8% 4.7% Per share (diluted) $0.64 $0.04 $0.68 $0.32 $0.36 Adjusted net earnings attributed to shareholders(a) $12,717 $600 $13,317 $7,865 $5,452 % of revenues 13.8% 0.6% 14.4% 10.6% 3.8% Per share (diluted) $0.81 $0.04 $0.85 $0.50 $0.35 Cash flows related to operating activities $24,456 ($7,843) $16,613 $7,343 $9,270 Per share (diluted) $1.56 $(0.50) $1.06 $0.47 $0.59 Free cash flow(a) $20,007 ($7,843) $12,164 $3,829 $8,335 Per share (diluted) $1.28 ($0.50) $0.78 $0.24 $0.54	$79,929 ($23,016) $56,913 $55,851 $1,062 29.1% (8.4%) 20.7% 18.8% 1.9% $5.10 $(1.47) $3.63 $3.57 $0.06 $11,616 $2,200 $13,816 $18,754 ($4,938) 4.2% 0.8% 5.0% 6.3% (1.3%) $0.74 $0.14 $0.88 $1.20 ($0.32) $20,620 $2,200 $22,820 $26,080 ($3,260) 7.5% 0.8% 8.3% 8.8 % (0.5) % $1.32 $0.14 $1.46 $1.67 ($0.21) $77,940 ($19,931) $58,009 $43,607 $14,402 $4.98 $(1.27) $3.70 $2.79 $0.91 $66,255 ($19,931) $46,324 $33,757 $12,567 $4.23 ($1.27) $2.96 $2.16 $0.80

7

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

a) Adjusted EBITDA attributed to shareholders, adjusted net earnings attributed to shareholders and free cash flow are not recognized measures under IFRS and may not be comparable to similar measures used by other entities. Refer to the sections EBITDA and adjusted EBITDA, net earnings and adjusted net earnings, operating activities and free cash flow for the definitions and reconciliations.

Revenues

Revenues for the fourth quarter of 2020 were $92.4 million, an increase of 25.0% from the fourth quarter of last year and are attributable to comparable stores sales growth of 12.0% and revenues from newly acquired stores. Revenues for the cumulative 52-week period ended December 26, 2020 were $274.7 million, a decline of 7.8% attributed to temporary store closures which began in the final weeks of the first quarter until the end of the second quarter, which is partially offset by sales of newly acquired stores.

Revenues are recognized when goods are delivered to customers, however, management measures the performance of comparable stores on the basis of sales orders, regardless of delivery. Comparable store sales increased by 12.0% in the fourth quarter of 2020 compared to the fourth quarter of last year. Comparable stores are defined as stores which have been operating for a minimum of 12 months. Due to the unprecedented circumstances during the year, where there was a period in which 80% of the Company's stores were closed and then gradually re-opened between March 2020 and June 2020 due to COVID-19, management deems the year-to-date period to be non-comparable and is therefore not reporting a comparable store sales metric for this period.

Operating expenses

Operating expenses for the fourth quarters and 52-week periods ended December 26, 2020 and December 28, 2019 are summarized as follows:

follows:
		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Revenues	92,396	92,396	73,929	274,739	274,739	297,865
Materials consumed	19,676	19,676	15,598	63,365	63,365	65,264
% of revenues	21.3%	21.3%	21.1%	23.1%	23.1%	21.9%
Employee remuneration (excluding other
non-comparable items)
Salaries and social security costs	29,224	29,224	25,121	81,767	81,767	100,205
% of revenues	31.6%	31.6%	34.0%	29.8%	29.8%	33.6%
Equity-based compensation	956	956	122	1,356	1,356	731
Acquisition-related costs	989	989	648	2,127	2,127	1,748
Other non-comparable items	(422)	(422)	1,243	924	924	967
Other operating expenses (excluding
acquisition-related costs and other non-
comparable items)	15,522	21,269	19,508	51,657	74,332	78,468
% of revenues	16.8%	23.0%	26.4%	18.8%	27.1%	26.3%
Total operating expenses	65,945	71,692	62,240	201,196	223,871	247,383
% of revenues	71.4%	77.6%	84.2%	73.2%	81.5%	83.1%

For the 13-week period, total operating expenses, excluding the impact of IFRS 16, as a percentage of total revenues decreased to 77.6% compared to 84.2% for the same period last year. For the 52-week period, this same metric decreased to 81.5%, as compared to 83.1% in the prior year.

8

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Materials consumed

Materials consumed are comprised of frames, lenses, production supplies and includes foreign exchange gains and losses related to the purchase of these materials. Compared to the prior year, materials consumed as a percentage of revenues increased by 20 basis points to 21.3%, as compared to 21.1% for the quarter, as a result of newly acquired businesses with higher cost ratios. Materials consumed as a percentage of revenues increased by 120 basis points to 23.1%, as compared to 21.9% for the 52-week period as a result of newly acquired businesses with higher cost ratios and a temporary product mix shift toward lower margin products such as contact lenses during the shutdown period.

Employee remuneration (excluding other non-comparable items)

Salaries and social security cost expense includes salaries, bonuses, directors’ fees and social security costs for all employees and directors. The majority of the costs relate to store based remuneration, including opticians.

Compared to the prior year, salaries and social security costs as a percentage of revenues decreased by 240 basis points in the quarter as a result of sales growth exceeding the increase in wages required to support these sales, and minimal government assistance received in the period. Salaries and social security costs as a percentage of revenues decreased by 380 basis points in the year-to-date period driven primarily by the receipt of CEWS and head count rationalizations as required.

Equity based compensation

Increase is due to grants of performance stock units in the quarter.

Acquisition-related costs

Acquisition-related costs are composed of wages and professional fees specifically incurred in the business acquisition process, whether an acquisition is completed or not.

Other non-comparable items

Other non-comparable items include one-time expenses (income) connected with personnel costs related to restructuring and transition related matters. During the second quarter, the Company decided to consolidate facilities. As a result, the two laboratories were fully consolidated by the year end and the Company decided not to renew the IRIS Laval, Quebec, head office lease which comes to term in 2021. In the fourth quarter, the Company recognized certain gains related to acquisitions made earlier in the fiscal year.

Other operating expenses (excluding acquisition-related costs and other non-comparable items)

Other operating expenses include stores, manufacturing and distribution facilities and head office occupancy costs, as well as selling, general and administration expenses. They also include foreign exchange gains and losses related to these expenses and gains or losses arising from the change in value of foreign exchange contracts. All non-essential expenses were cut as part of the aggressive cost control measures implemented at the onset of the COVID-driven closures to mitigate the cash flow impact of revenue losses.

Other operating expenses as a percentage of revenues excluding the impact of IFRS 16 decreased in the fourth quarter to 23.0% compared to 26.4% in the same period last year, in part due to higher sales but also as a result of cost containment to essential expenses and rent abatements. For the 52-week period, the other operating expenses as a percentage of revenues excluding the impact of IFRS 16 increased to 27.1% from 26.3%. This increase is a result of the decline in revenue experienced with the temporary closure of the Company's stores, additional COVID-19 related operating expenses, such as PPE and newly acquired businesses operating at higher cost ratios.

9

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

EBITDA and adjusted EBITDA

The Group defines EBITDA, adjusted EBITDA and adjusted EBITDA attributed to shareholders as per the tables below. It should be noted that these performance measures are not defined under IFRS and may not be comparable to similar measures used by other entities. The Group believes that these measures are useful financial metrics as they assist in determining the ability to generate cash from operations. Investors should be cautioned that EBITDA, adjusted EBITDA and adjusted EBITDA attributed to shareholders should not be construed as an alternative to net earnings or cash flows as determined under IFRS. The reconciling items between net earnings, EBITDA, adjusted EBITDA and adjusted EBITDA attributed to shareholders are as follows:

		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Net earnings	9,953	10,567	4,987	11,831	14,084	19,398
Depreciation, amortization and loss on disposal	10,257	5,256	4,657	39,600	19,911	17,999
Financial expenses, net of interest revenue	4,044	2,534	1,434	20,661	14,752	8,719
Income taxes	3,264	3,448	1,728	3,736	4,533	7,000
EBITDA	27,518	21,805	12,806	75,828	53,280	53,116
Equity-based compensation	956	956	122	1,356	1,356	731
Net loss from changes in fair value of foreign exchange contracts	—	—	—	—	—	(4)
Acquisition-related costs	989	989	648	2,127	2,127	1,748
Other non-comparable items	(422)	(422)	1,243	924	924	967
Adjusted EBITDA	29,041	23,328	14,819	80,235	57,687	56,558
Variance in $	14,222	8,509		23,677	1,129
Variance in %	96.0%	57.4%		41.9%	2.0%
% of revenues	31.4%	25.2%	20.0%	29.2%	21.0%	19.0%
Per share (basic)	1.85	1.49	0.95	5.12	3.68	3.62
Per share(diluted)	1.85	1.49	0.95	5.12	3.68	3.61

The following table represents the adjusted EBITDA available to New Look Vision shareholders, which takes into consideration the investments in joint ventures and associates.

investments in joint ventures and associates.
		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
		2020			2020
	Dec. 26,	(excl.	Dec. 28,	Dec. 26,	(excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Adjusted EBITDA	29,041	23,328	14,819	80,235	57,687	56,558
Income from investments in joint ventures and associates	(1,066)	(1,100)	(1,116)	(2,284)	(2,411)	(2,633)
EBITDA from investments in joint ventures and associates	1,482	1,300	930	4,482	3,623	3,612
EBITDA attributed to non-controllinginterest	(854)	(720)	(362)	(2,504)	(1,986)	(1,686)
Adjusted EBITDA attributed to shareholders	28,603	22,808	14,271	79,929	56,913	55,851

Refer to Summary of Quarterly Results for comparisons of adjusted EBITDA on a quarterly basis.

10

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019

Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Depreciation and amortization

The depreciation and amortization expenses varied as presented below. Refer to section Results Analysis - IFRS 16 impact for additional information.

information.
		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Depreciation of property, plant and equipment, net of
amortization of deferred investment tax credits	3,083	3,083	2,527	11,853	11,853	10,503
Depreciation of right-of-use assets	5,001	—	—	19,689	—	—
Amortization of other intangible assets	2,103	2,103	1,794	8,011	8,011	7,117
Impairment and loss on disposal of long-term assets	70	70	336	47	47	379
Depreciation, amortization and loss on disposal of
assets	10,257	5,256	4,657	39,600	19,911	17,999

The significant increase in depreciation in the fourth quarter reflects the adoption of IFRS 16, the result of acquisitions and greater capital investments made in 2020 compared to 2019. The reclassification of occupancy-related costs to depreciation under IFRS 16 accounts for $5.0 million of the increase in the fourth quarter and $19.7 million of the increase in the 52-week period as compared to the same periods last year.

Financial expenses

The following table provides the main elements of financial expenses along with interest revenues. Refer to section Results Analysis - IFRS 16 impact for additional information.

IFRS 16 impact for additional information.
		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Interest on long-term debt(a)	3,052	3,052	1,958	12,752	12,752	8,103
Change in fair value of interest rate swap	(503)	(503)	(524)	2,102	2,102	583
Lease liability financing expenses	1,510	—	—	5,909	—	—
Other financingexpenses	156	156	143	477	477	468
Financial expenses	4,215	2,705	1,577	21,240	15,331	9,154
Interest revenue	171	171	143	579	579	435
Financial expenses, net of interest revenue	4,044	2,534	1,434	20,661	14,752	8,719
a)Actual settlement cost of interest rate swap included
in the interest on long-term debt above	261	261	40	752	752	134

The significant increases in financial expenses over both the quarter and year-to-date periods are primarily driven by three factors.

• Firstly, the adoption of IFRS 16 has resulted in interest expense recognition on lease liabilities, which reflected $1.5 million in the quarter and $5.9 million in the year-to-date period.

• Secondly, as a result of the Company's amended and increased credit lines and subordinated debt arrangements that were concluded in the second quarter, the Company recognized $2.1 million of finance fees, transaction costs and expenses related to revaluing a subordinated debt in interest on long-term debt.

11

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

• Additionally, the year-to-date period was further impacted by a $2.1 million unfavorable fair value change in the interest rate swaps due to the current market forecast of future interest rates as well as COVID-19 impact. In order to mitigate the risk of an increase in interest rates, New Look Vision maintains an interest rate swap to fix the interest rate on 65% of the term facility.

As of December 26, 2020, long-term debt essentially comprised an outstanding balance of $65.9 million under the revolving facility, a balance of $97.5 million under the term facility, and $60.0 million of subordinated loans.

Income taxes

The income tax expense for the 52-week periods of 2020 and 2019 are summarized as follows:

		52 weeks
		Dec. 26, 2020 (excl.
	Dec. 26, 2020	IFRS 16)	Dec. 28, 2019
	$	$	$
Current income tax expense
In relation with the current activities	4,216	4,216	5,830
In relation with adjustments recognized in the period for current tax of
priorperiods	(416)	(416)	278
Total current income tax	3,800	3,800	6,108
Deferred income tax (recovery) expense
Origination and reversal of temporary differences	(674)	123	(1,479)
Utilization of unused tax losses and tax credits	610	610	2,371
Total deferred income tax expense	(64)	733	892
Total income taxes(recovery) expense	3,736	4,533	7,000
Estimated effective tax rate	24.0%	24.3%	26.5%
Statutoryrate(a)	26.5%	26.5%	26.6%

• a) Beginning with 2020, the statutory income tax rate reflects the tax rate of the parent company. It previously reflected a blended tax rate of the parent company and its subsidiaries. The rate for 2019 was restated to reflect the tax rate of the parent company.

The difference between the estimated effective tax rate and the blended statutory rate is attributable to permanent differences between taxable and accounting income. Permanent differences include non-deductible equity-based compensation, certain acquisition-related costs, and income from joint ventures and associates, which is net of tax.

The impact of IFRS 16 on income tax was a decrease of $0.8 million. As the application of IFRS 16 began in 2020, it had no impact on 2019 income tax.

12

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Net earnings and adjusted net earnings

Net earnings for the fourth quarters and year-to-date periods ended December 26, 2020, and the impact of IFRS 16 can be compared to the corresponding periods of 2019 as follows:

he corresponding periods of 2019 as follows:
		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Net earnings attributed to shareholders	10,007	10,607	5,039	11,616	13,816	18,754
Variance in $	4,968	5,568		(7,138)	(4,938)
Variance in %	98.6%	110.5%		(38.1%)	(26.3%)
% of revenues	10.8%	11.5%	6.8%	4.2%	5.0%	6.3%
Per share amount
Diluted	0.64	0.68	0.32	0.74	0.88	1.20
Weighted average number of common shares used in diluted earnings per share	15,665,228	15,665,228	15,680,704	15,660,083	15,660,083	15,645,880
Variation %	(0.1%)	(0.1%)		0.1%	0.1%

Net earnings attributed to shareholders increased by $5.6 million or 110.5% in the quarter mainly driven by higher EBITDA. For the yearto-date period, the net earnings attributed to shareholders decreased by $4.9 million or 26.3% as a result of temporary closure of the majority of the Company's stores impacting the first half of the year.

Adjusted net earnings calculated below are not a recognized measure under IFRS and are therefore unlikely to be comparable to similar measures used by other entities. Investors should be cautioned that adjusted net earnings should not be considered as an alternative to net earnings or cash flows as determined under IFRS. Management believes that the following adjustments to net earnings provide useful information as they allow the comparison of the net results before amortization of acquired intangibles, acquisition-related costs, equitybased compensation, other non-comparable items and related income taxes, which may vary substantially from quarter to quarter:

		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Net earnings attributed to shareholders	10,007	10,607	5,039	11,616	13,816	18,754
Amortization of acquired intangibles	1,846	1,846	1,653	7,116	7,116	6,565
Acquisition-related costs	989	989	648	2,127	2,127	1,748
Equity-based compensation	956	956	122	1,356	1,356	731
Other non-comparable items	(422)	(422)	1,243	924	924	967
Related income taxes	(659)	(659)	(840)	(2,519)	(2,519)	(2,685)
Adjusted net earnings attributed to shareholders	12,717	13,317	7,865	20,620	22,820	26,080
Variance in $	4,852	5,452		(5,460)	(3,260)
Variance in %	61.7%	69.3%		(20.9%)	(12.5%)
% of revenues	13.8%	14.4%	10.6%	7.5%	8.3%	8.8%
Per share amount
Basic	0.81	0.85	0.50	1.32	1.46	1.67
Diluted	0.81	0.85	0.50	1.32	1.46	1.67

13

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Adjusted net earnings attributed to shareholders increased 69.3% to $13.3 million in the fourth quarter compared to the corresponding period last year. The primary driver for the increase in the quarter is comparable stores sales growth and wage, subsidy and other costs saving measures.

SUMMARY OF QUARTERLY RESULTS

The following table summarizes unaudited consolidated quarterly results for each of the eight most recently completed quarters.

		4thQuarter			3rdQuarter		2ndQuarter	2ndQuarter		1stQuarter	1stQuarter		4 Quarters	4 Quarters
		2020			2020			2020			2020
		(excl.			(excl.			(excl.			(excl.
		IFRS			IFRS			IFRS			IFRS
	2020	16)	2019	2020	16)	2019	2020	16)	2019	2020	16)	2019	2020	2019
Weeks	13	13	13	13	13	13	13	13	13	13	13	13	52	52
	$	$	$	$	$	$	$	$	$	$	$	$	$	$
Revenues	**92,396 92,396 **		**73,929 **	**86,886 86,886 **		**74,417 **	**27,423 **	**27,423 **	**78,053 **	**68,034 **	**68,034 **	**71,466 **	**274,739 **	297,865
As a % of the four-
quarter revenues	33.6%	33.6%	24.8%	31.6%	31.6%	25.0%	10.0%	10.0%	26.2%	24.8%	24.8%	24.0%	100.0%	100.0%
Comparable store
sales orders(a)	12.0%	12.0%	3.6%	13.5%	13.5%	1.6%	—	—	1.6%	2.1%	2.1%	2.6%	—	2.3%
Adjusted EBITDA(b)	**29,041 23,328 **		**14,819 **	**34,978 29,324 **		14,587	782	**(4,946) **	**15,547 **	15,432	9,981	11,605	80,233	56,558
As a % of revenues	31.4%	25.2%	20.0%	40.3%	33.7%	19.6%	2.9%	(18.0%)	19.9%	22.7%	14.7%	16.2%	29.2%	19.0%
Per share (diluted)(c)	1.85	1.49	0.95	2.23	1.87	0.93	0.05	(0.32)	0.99	0.99	0.64	0.74	5.12	3.61
Adjusted EBITDA
attributed to
shareholders(b)	**28,603 22,808 **		**14,271 **	**34,742 28,989 **		14,429	1,181	**(4,834) **	**15,269 **	15,403	9,950	11,882	79,929	55,851
As a % of revenues	31.0%	24.7%	19.3%	40.0%	33.4%	19.4%	4.3%	(17.6%)	19.6%	22.6%	14.6%	16.6%	29.1%	18.8%
Per share (diluted)(c)	1.83	1.46	0.91	2.22	1.85	0.92	0.08	(0.31)	0.98	0.98	0.64	0.76	5.10	3.57
Net earnings/(loss)
attributed to
shareholders	10,007 10,607		5,039	14,306 14,852		4,825	(12,380)	**(11,827) **	6,820	(317)	184	2,070	11,616	18,754
Per share (diluted)(c)	0.64	0.68	0.32	0.91	0.95	0.31	(0.79)	(0.76)	0.44	(0.02)	0.01	0.13	0.74	1.20
Adjusted net
earnings/(loss)
attributed to
shareholders(b)(d)	12,717 13,317		7,865	16,175 16,721		6,927	**(9,705) **	(9,152)	7,370	1,433	1,934	3,918	20,620	26,080
Per share (diluted)(c)	0.81	0.85	0.50	1.03	1.07	0.44	(0.62)	(0.58)	0.47	0.09	0.12	0.25	1.32	1.67
Free cash flow(b)	20,006 12,163		3,829	**31,860 25,837 **		11,129	4,466	3,854	8,532	9,922	4,469	10,267	66,254	33,757
Per share (diluted)(c)	1.28	0.78	0.24	2.03	1.65	0.71	0.29	0.25	0.55	0.63	0.29	0.66	4.23	2.16
Cash flows related to
operating activities	24,456 16,613		7,343	**34,502 28,479 **		13,472	5,505	4,893	**10,249 **	13,477	8,024	12,543	77,940	43,607
Per share (diluted)(c)	1.56	1.06	0.47	2.20	1.82	0.86	0.35	0.31	0.66	0.86	0.51	0.80	4.98	2.79
Dividendper share(e)	—	—	0.15	—	—	0.15	—	—	0.15	—	—	0.15	—	0.60

• a) Due to the exceptional circumstances in the second quarter whereby the majority of the Company’s stores were closed for most of the period, management deems the period to be non-comparable and is therefore not reporting a comparable store sales metric for the second quarter. Comparable stores are stores which have been operating for at least 12 months excluding March 2020 to June 2020 due to COVID-19. As such, the total comparable store sales orders for the four quarters of 2020 reflects the metric for the period of eight months ending excludes March 2020 to June 2020, as a result COVID-19 store shutdown and gradual reopening periods.

• b) Adjusted EBITDA, adjusted EBITDA attributed to shareholders, adjusted net earnings attributed to shareholders and free cash flow are not recognized measures under IFRS and are therefore unlikely to be comparable to similar measures used by other entities. Investors should be cautioned that these measures should not be considered as an alternative to net earnings or cash flows as determined under IFRS.

14

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019

Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

• c) Amounts per share for four quarters may not correspond to the total of quarterly amounts, as a distinct calculation is made for each quarter or four-quarter period.

• d) Adjusted net earnings attributed to shareholders were revised in the first quarter of 2019 in order to adjust for amortization of acquired intangibles, net of the related tax impact.

• e) Effective March 19, 2020, the Company's Board of Directors suspended the regular quarterly dividend and the corresponding dividend reinvestment plan until further notice, due to the pending impact of the pandemic on the Company's business and liquidity.

LIQUIDITY

The following table summarizes the cash flows for the fourth quarters and 52-week periods ended December 26, 2020 and December 28, 2019, respectively. Amounts in parentheses represent use of cash.

		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Operating activities	24,456	16,613	7,343	77,940	58,009	43,607
Investing activities	(29,418)	(29,418)	(7,079)	(72,048)	(72,048)	(22,750)
Financingactivities	(5,820)	2,023	(3,165)	47,350	67,281	(25,434)
Net (decrease) increase in cash	(10,782)	(10,782)	(2,901)	53,242	53,242	(4,577)
Cash,beginningofperiod	70,006	70,006	8,883	5,982	5,982	10,559
Cash, end ofperiod	59,224	59,224	5,982	59,224	59,224	5,982

Excluding the impact of IFRS 16:

Operating:

Operating cash flows increased in both the quarter and year-to-date periods compared to the corresponding periods of 2019 mainly due to comparable store sales growth, wage subsidies, and cost saving measures such as rent abatements and deferrals.

Investing:

The use of cash for investing activities in the fourth quarter and year-to-date relates primarily to business acquisitions completed in the year, as well as fixed and financial assets acquired.

Financing:

The generation of cash related to financing activities in the quarter is due to the net variation of loans and advances from related party, the Q4 dividend suspension and the postponement of debt repayment. The increase in the year-to-date cash generation reflects the increase in borrowings used to strengthen liquidity and fund business acquisitions. In addition, the dividend suspension and postponement of debt repayment further reduces the usage of cash for financing activities.

15

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Operating activities

The cash flows related to the operating activities for the fourth quarters and 52-week periods ended December 26, 2020 and December 28, 2019 are as follows. Amounts in parentheses represent use of cash.

		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Earnings before income taxes	13,217	14,015	6,715	15,567	18,617	26,398
Adjustments:
Depreciation, amortization and loss on disposal	10,210	5,209	4,657	39,553	19,864	17,999
Equity-based compensation	956	956	122	1,356	1,356	731
Financial expenses	4,215	2,705	1,577	21,240	15,331	9,154
Interest revenue	(171)	(171)	(143)	(579)	(579)	(435)
Other	538	538	74	(414)	(414)	(134)
Income from investments in joint ventures and
associates	(1,066)	(1,100)	(1,116)	(2,284)	(2,411)	(2,633)
Income taxespaid	(2,366)	(2,366)	(866)	(3,826)	(3,826)	(4,714)
Cash flows related to operating activities,
before changes in working capital items	25,533	19,786	11,020	70,613	47,938	46,366
Changes in workingcapital items	(1,077)	(3,173)	(3,677)	7,327	10,071	(2,759)
Cash flows related to operating activities	24,456	16,613	7,343	77,940	58,009	43,607

Cash flows related to operating activities increased in the quarter as compared to 2019, mainly due to comparable stores sales growth, wage subsidy and cost saving measures such as rent abatements and deferrals.

Free cash flow

Free cash flow is not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that this disclosure provides useful information as it provides insight on operating cash flows available after considering capital investments. Investors should be cautioned that free cash flow should not be considered as an alternative to cash flows related to operating activities as determined under IFRS.

		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Cash flows related to operating activities	24,456	16,613	7,343	77,940	58,009	43,607
Acquisitions ofproperty, plant and equipment	(4,450)	(4,450)	(3,514)	(11,685)	(11,685)	(9,850)
Free cash flow	20,006	12,163	3,829	66,255	46,324	33,757

After adjusting for the impact of IFRS 16 implementation, free cash flow increased in the quarter by $8.3 million and $12.6 million in the year-to-date period. This is due mainly to the increase in operating cash flows, which is attributed to the increase in comparable store sales growth and cost saving measures.

16

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Adjusted cash flows related to operating activities

Adjusted cash flows related to operating activities are not a recognized measure under IFRS and may not be comparable to similar measures used by other entities. New Look Vision believes that this disclosure provides useful information as it allows the comparison of net operating cash flows excluding income taxes paid, changes in working capital items, acquisition-related costs and other noncomparable items, which may vary significantly from quarter to quarter. Certain occupancy-related expenses previously recorded in the cash flows related to operating activities are now presented in the cash flows related to financing activities. Investors should be cautioned that adjusted cash flows related to operating activities should not be considered as an alternative to cash flows related to operating activities as determined under IFRS.

activities as determined under IFRS.
		13 weeks			52 weeks
		Dec. 26,			Dec. 26,
	Dec. 26,	2020 (excl.	Dec. 28,	Dec. 26,	2020 (excl.	Dec. 28,
	2020	IFRS 16)	2019	2020	IFRS 16)	2019
	$	$	$	$	$	$
Cash flows related to operating activities	24,456	16,613	7,343	77,940	58,009	43,607
Income taxes paid	2,366	2,366	866	3,826	3,826	4,714
Changes in working capital items	1,077	3,173	3,677	(7,327)	(10,071)	2,759
Acquisition-related costs	989	989	648	2,127	2,127	1,748
Other non-comparable items	(422)	(422)	1,243	924	924	967
Adjusted cash flows related to operating
activities	28,466	22,719	13,777	77,490	54,815	53,795

Excluding the impact of IFRS 16, adjusted cash flows related to operating activities have increased by 64.9% or $8.9 million for the quarter due to comparable sales growth and cost saving measures. For the year-to-date period, excluding the impact of IFRS 16, adjusted cash flows related to operating activities have increased by 1.9% or $1.0 million due to the same factor as for the quarter. Changes in working capital items, acquisition-related costs, and other non-comparable items can vary significantly from quarter to quarter.

Changes in working capital items

Cash was also generated (or used) by the variation of the following working capital items:

	13 weeks	13 weeks		52 weeks	52 weeks
	Dec. 26, 2020	Dec.	28, 2019	Dec. 26, 2020	Dec.	28, 2019
	$		$	$		$
Receivables	5,744		(227)	1,189		(487)
Inventory	2,954		673	969		(3,823)
Prepaid expenses	(957)		(1,125)	363		621
Accountspayable,accrued liabilities andprovisions	(8,818)		(2,998)	4,806		930
(Decrease) increase in cash	(1,077)		(3,677)	7,327		(2,759)

Accounts receivable activity in the quarter and year-to-date period resulted in a generation of cash, primarily driven by the collection of governmental subsidy programs.

The increase in the generation of cash from inventory in the fourth quarter and year-to-date period is a result of lower purchases.

Usage of cash for prepaid expenses is primarily driven by the timing of payments in the quarter.

17

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Usage of cash in the fourth quarter increased compared to the same period as last year as a result of the payments to suppliers and landlords which were deferred from earlier periods in the year as part of cash conservation measures put into place during the period of temporary store closures. On a full-year basis the greater generation of cash from accounts payable is due to payments deferred to future periods as part of the same conservation measures mentioned above. On a full-year basis the greater generation of cash from accounts payable is due to payments deferred to future periods as part of the same conservation measures mentioned above.

Contractual obligations

The contractual obligations of the Group as of December 26, 2020 are summarized in the following table:

				Payments due
Contractual obligations	Total	2021	2022	2023	2024	2025	Thereafter
Long-term debt(a)	264,196	21,995	23,419	157,371	61,411
Purchase obligations(b)	5,895	5,895	—	—	—	—	—
Other obligations(c)	6,716	6,716	—	—	—	—	—
Total	276,807	34,606	23,419	157,371	61,411	—	—

• a) Amounts shown as payments due on the long-term debt reflect the repayment of principal and estimated interest, as established as of December 26, 2020. The repayment of the outstanding revolving facility was included in 2023 as no capital repayments are required until this time.

• b) Purchase obligations relate to commitments for capital expenditures.

• c) Other obligations relate to accounts payable, accrued liabilities and loans and advances due from related parties.

CAPITAL RESOURCES

Credit facilities and subordinated debts

As at December 26, 2020, the key terms of the credit facilities were as follows:

• A revolving facility with a maximum draw-down of $85.0 million (actual draw-downs of $65.9 million at December 26, 2020 and $23.2 million at the end of 2019) to finance day-to-day operations, capital expenditures, and business acquisitions. The use of this facility is treated as a long-term debt as no repayment is required until October 24, 2023 provided that certain financial ratios are respected.

• A term facility of an initial amount of $97.5 million ($95.0 million at the end of 2019), which was used to finance business acquisitions, in addition to day-to-day operations. The annual repayments on the term facility represent $9.8 million, whereas these repayments reflect $2.4 million in 2020 as a result of a repayment waiver granted until 2021. As at December 26, 2020, the balance of the debt was $97.5 million ($76.0 million as at the end of 2019) and any balance is repayable on October 24, 2023.

The subordinated debts, as at December 26, 2020 were as follows:

• A subordinated debt with a face value of $35.0 million ($35.0 million at the end of 2019), entered into on October 24, 2017. Following the modification of the debt agreement's terms, the applicable rate thereon was increased from 5.5% to 7% (5.5% at the end of 2019), and its maturity was extended from October 2022 to February 2024.

• A subordinated debt with a face value of $15.0 million ($15.0 million at the end of 2019) to finance day-to-day operations and for investment purposes, including to finance capital expenditures and acquisitions, maturing in February 2024. The applicable interest rate is 5.5% (5.5% at the end of 2019).

• On May 28, 2020, the Company entered into an additional subordinated debt agreement, whereby it is granted the ability to draw up to $20.0 million for working capital purposes until December 31, 2020, in addition to a maximum of $25.0 million for acquisition and growth purposes. The total of the outstanding credit can not exceed $40.0 million. As at December 26, 2020, the face value amount outstanding was $10.0 million in which $5.0 million was drawn from the working capital loan and $5.0 million was drawn from the acquisition and growth loan. The initial interest rate was 8.5% and all amounts drawn mature in February 2024. The terms were renegotiated during the quarter and the applicable rate thereon was decreased from 8.5% to 5.5%.

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New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

As of December 26, 2020, the credit facilities and subordinated debts used and available were as follows:

	$
Revolving facility
Credit granted	85,000
Credit outstandingat December 26,2020	65,904
Balance available at December 26,2020	19,096
Term facility
Credit granted	97,500
Credit outstandingat December 26,2020	97,500
Total subordinated debts
Credit granted	90,000
Credit outstandingat December 26,2020	60,000
Balance available at December 26,2020	30,000
Total balance available	49,096

The Company also had $59.2 million in cash at the end of the quarter and was in compliance with all covenants governing the credit facilities.

OUTSTANDING SHARES AND OPTIONS

The Board of Directors has elected to suspend the regular quarterly dividend and the corresponding dividend reinvestment plan for Q4 2020, due to the pending impact of COVID-19 on the Company's business and liquidity. Based on Q3 2020, Q4 2020 and ongoing results, the Company's current intention, subject to further review at the time, is to reinstate the regular quarterly dividend in the first quarter of 2021. As of February 27, 2021, New Look Vision had 15,660,199 Class A common shares outstanding, which are the only shares outstanding. There were no additional shares issued since February 29, 2020.

As of February 27, 2021, there were 779,000 options outstanding to purchase the same number of New Look Vision Class A common shares for a weighted average exercise price of $31.26. The exercise price reflects the market value of the shares for the five business days preceding the grant date. All outstanding options will expire from five to seven years after the grant date. As of February 27, 2021, the balances of shares reserved by the TSX for issuance upon exercise of options or payment for services totaled 1,659,439.

DIVIDENDS

Dividends declared

The Board of Directors has elected to suspend the regular quarterly dividend and the corresponding dividend reinvestment plan for Q4 2020, due to the pending impact of COVID-19 on the Company's business and liquidity.

The decision to declare a dividend is made quarterly when the financial statements for a quarter or a financial year are made available to the Board of Directors. Although there is no guarantee that a dividend will be declared in the future, New Look Vision and its predecessor, Benvest New Look Income Fund, have regularly paid a dividend or distribution since 2005 through 2019.

The dividends declared are usually designated as "eligible dividends" for tax purposes, that is dividends entitling shareholders who are individuals residing in Canada to a higher dividend tax credit. Information on the tax status of dividends is available on www.newlookvision.ca in the Investors section.

Dividend reinvestment plan

A dividend reinvestment plan allows shareholders to elect to reinvest their cash dividends into New Look Vision shares, without any brokerage commissions, fees and transaction costs. Subject to further consideration, shares are issued from treasury at 95% of the weighted average trading price for the five trading days preceding the dividend payment date.

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New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Class A common shares issued under the dividend reinvestment plan thus far in fiscal 2020 were as follows:

Date of Issuance	Number of shares issued	Issuance price per share	Total
		$	$
December 31,2019	14,066	$30.94	$435
Total amount	14,066	$30.94	$435

The Board of Directors suspended the regular quarterly dividends and the corresponding dividend reinvestment plan until further notice, effective March 19, 2020, due to the pending impact of COVID-19 on the Company's business and liquidity.

COMMITMENTS AND CONTINGENCIES

The company is a defendant in litigation matters arising in the course of ordinary business. Claims considered likely to result in settlements have been provided for.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates. These estimates are established on the basis of previous years and management’s best judgement. Management continually reviews estimates. Actual results may differ from those estimates. The following paragraphs establish the main estimates used in preparing the consolidated financial statements of the Company.

Allowance for obsolescence

Although the Company continuously endeavours to increase the inventory turnover to reduce the risk of obsolescence and improve cash flows, management estimates an allowance for obsolescence regarding slow moving inventories. Such estimates are based on historical experience of inventories liquidated, donated to charities or destroyed.

Useful life of property, plant, equipment and intangible assets

For the purpose of calculating the depreciation and the amortization of property, plant, equipment and intangible assets, estimates of the duration of their useful lives must be carried out. Factors such as risks of obsolescence caused by new technologies and the Company’s objective of using state-of-the-art equipment and presenting fashionable stores are taken into account.

Allocation of purchase price of a business

When acquiring a business, management allocates the purchase price to underlying assets and liabilities, as required by IFRS. With this respect, management identifies intangible assets or liabilities such as customer relationships, contractual agreements, tradenames and below-market or above-market leases. These assets and liabilities are valued based on assumptions regarding forecast revenues, operating costs and discounting rates. Intangible assets, other than tradenames with indefinite useful lives, are amortized over the estimated period of benefits arising from their use.

Provisions

The Company records provisions as liabilities to cover expected future payments related to product warranties and onerous contracts. Amounts are based on historical data, past experience and management's best knowledge of current events and actions that the Company may undertake in the future.

Fair value of equity-based compensation

Equity-based compensation, such as options to acquire New Look Vision shares or performance stock units (PSU), granted to key employees, officers and directors, is part of the employee remuneration expense. Options to acquire shares are measured at fair value at the grant date using the Black-Scholes option pricing model.

The fair value of the options determined at the grant date is expensed over the vesting period, based on the Company’s estimate of options that will eventually vest, with a corresponding increase in contributed surplus. At the end of each reporting period, the Company revises its estimate of the number of options expected to vest. The impact of the revision of the original estimates, if any, is recognized in earnings such that cumulative expenses reflects the revised estimate, with a corresponding adjustment to the contributed surplus.

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New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

Forfeited options, for which the vesting period was in progress, are adjusted through earnings and contributed surplus. Balances in contributed surplus are transferred to share capital when the options are exercised. Proceeds from the exercise of options are credited to share capital.

Performance stock units are cash settled equity-based compensation, linked to the full value of a company’s common shares. Due to the cash settlement feature, the accounting cost is generally based on the fair value of the liability, which is re-measured at the end of each reporting period and at the date of settlement. Given that the vesting conditions are based on yearly metrics, the Group revalue the liability at each year-end until the settlement. The reevaluation impacts are recorded in the income statement. The fair value of the PSUs, is expensed over the vesting period, with a corresponding increase in liability, based on the achievement of the vesting conditions and the share price.

Asset impairment tests

Accounting standards require making impairment tests on long-lived assets such as property, plant and equipment, intangible assets and goodwill. The tests involve making assumptions as to discounted future cash flows arising from these assets. Historical data and development plans are the prime source of information used in these circumstances.

Income taxes and tax credits

The calculation of the income tax expense and tax credits related to R&D, training or investments requires judgement in determining the activities or expenses giving rise to a deduction or credit. Similar judgement is required in determining the right to use tax losses or credits carried over from past reorganizations. The effects of tax assessments differing from the Company’s calculations could be material.

FINANCIAL INSTRUMENT RISK MANAGEMENT

The Company’s financial instruments are classified as follows:

	2020	2019
	$	$
Financial instruments at fair value through profit or loss
Other investments	13,142	8,866
Forward exchange contracts, included in receivables	117	55
Interest rate swap	(2,861)	(781)
Total	10,398	8,140
Financial assets at amortized cost
Cash	59,224	5,982
Trade accounts receivable	8,602	8,065
Receivables from joint ventures	90	97
Receivables from associates	37	30
Loans and advances	7,809	10,522
Total	75,762	24,696
Financial liabilities at amortized cost
Customers' deposits	8,734	6,154
Trade and other payables	29,921	25,713
Loans and advances from related parties	7,204	5,521
Dividends payable	—	435
Long-term debt includingcurrentportion	227,137	149,928
Total	272,996	187,751

Details of financial instrument risk management objectives and policies are described under Note 27 to the consolidated financial statements for 2020. Other comments follow:

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New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

The Group is exposed to exchange rate fluctuations with regards to foreign currencies denominated assets and liabilities.

An amount of $1.4 million included in Other investments in US dollars above is hedged through a forward exchange contract. Management has established a policy hedging forecasted purchases in US dollars through the use of forward exchange contracts. The percentage hedged is determined by prevailing market conditions. The Group does not use hedge accounting. Accordingly, forward exchange contracts are recognized at their fair value on the balance sheet and changes in fair value are recognized in earnings.

As at December 26, 2020, 43% (54% as at December 28, 2019) of the long-term debt was composed of loans on the acquisition term facility described in Note 17. As these loans are currently in the form of bankers' acceptances and minimum prime rate basis loans which are subject to variable interest, stamping and discount fees, the Company is exposed to cash flow risks resulting from fluctuations in these rates. In order to mitigate the risk of an increase in interest rates, New Look Vision is required to maintain an interest rate swap to fix the interest rate on a minimum of 50% of the outstanding acquisition term facility balance. The Company voluntarily has a swap coverage to 65% of the acquisition term facility. As at December 26, 2020, the interest rate swap, issued in one tranche, was fixed at a rate of 2.095% on a notional amount of $63.38 million ($60.8 million at December 28, 2019), or 65% of the acquisition term facility outstanding. The fair value of the swap agreement represented a liability of $2.86 million as at December 26, 2020 ($0.78 million at December 28, 2019). All other long-term debts have fixed interest rates and are therefore not exposed to cash flow interest rate risk.

A 100 basis point increase in interest rates would have resulted in an increase in interest payments of $0.7 million in 2020 ($0.6 million in 2019) and a decrease in net earnings and equity of $0.5 million ($0.3 million in 2019).

The credit risk related to the accounts receivable is almost non-existent due to the policy of requiring down payments on accepting sales orders and payment of any balance at time of delivery of goods. Credit risk related to the main loans is limited by guarantees on assets.

OTHER RISK FACTORS

Readers should refer to the risk factors included in the Annual Information Form available on New Look Vision’s website at www.newlookvision.ca and on SEDAR at www.sedar.com. The information includes:

• Risks relating to the business such as:

• Reliance on the availability of optometrists and other professionals,

• Competition, including e-commerce,

• Violation of confidential health information,

• Technological changes and obsolescence regarding lens manufacturing processes,

• Dependence on computer-assisted production equipment and information technology systems,

• Difficulty of integrating acquired businesses,

• Foreign sourcing, and

• Non-compliance with laws and regulations regarding optometrists and opticians.

• Risks relating to the higher level of debt

• Risks related to jointly-owned stores and partners

• Risks related to franchise operations

• Risks relating to New Look Vision shares such as:

• Unpredictability and volatility of the trading value of the shares,

• No guarantee of dividends,

• Leverage and restrictive covenants.

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures should be designed to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation and include controls and procedures designed to ensure that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted under securities legislation is accumulated and communicated to the Company’s management, including its certifying officers, namely the President and Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), as appropriate to allow timely decisions regarding required disclosure.

22

New Look Vision Group Inc.

Management's Discussion and Analysis

For the years ended December 26, 2020 and December 28, 2019 Amounts in tables are in thousands of Canadian dollars, except shares and per share amounts

As of December 26, 2020, an evaluation of the design of the Company's disclosure controls and procedures, as defined under National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings, was carried out under the supervision of the President and CEO, CFO, and with the participation of the Company's management. Based on that evaluation disclosure controls and procedures as described below, the President and CEO, and CFO concluded that as of December 26, 2020, the Company's disclosure controls were effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for the design of disclosure controls and procedures (DC&P) (as defined in National Instrument 52-109) in order to provide reasonable assurance that material information relating to the Company is made known to management, including its Chief Financial Officer and its President and Chief Executive Officer, that information required to be disclosed under securities legislation is recorded and reported on a timely basis. Management is also responsible for the design of internal control over financial reporting (ICFR) (as defined in National Instrument 52-109) within the Group in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

New Look Vision’s management, under the supervision of the President and CEO and the CFO, has evaluated the effectiveness as at December 26, 2020 of New Look Vision’s DC&P and ICFR, and has concluded that they are effective. Changes in ICFR during the period beginning on September 27, 2020 and ended December 26, 2020 included the ongoing improved procedures related to the consolidation of the financial data of the corporate division and the operating units. Otherwise, there were no material changes in ICFR that have materially affected, or are reasonably expected to materially affect the internal control over financial reporting.

March 25, 2021

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New Look Vision Group Inc.