Safilo Group — Earnings Release 2022

Nov 3, 2022

Q3 and First 9 Months 2022 Trading Update

November 3, 2022

Q3 and First 9 Months 2022 Trading Update

November 3, 2022

DISCLAIMER

This presentation may contain forward looking statements based on current expectations and projects of the Group in relation to future events. Due to their specific nature, these statements are subject to inherent risks and uncertainties, as they depend on certain circumstances and facts, most of which being beyond the control of the Group. Therefore actual results could differ, even to a significant extent, with respect to those reported in the statements.

"Q3 marked another quarter of growth of our sales and profits, driven by the strength of our new collections, the investments behind our brands and a continued effort to increase the breadth of the services we offer to our clients.

Our results are keeping us on track with our goals."

Angelo Trocchia, CEO

…

Q3 CONFIRMED SOLID KPIs:

Positive sales momentum

+14.9% +5.6% organic¹

Another double-digit improvement of gross profit and adj.² EBITDA

Gross margin 53.8% adj.² EBITDA 8.7%

¹ORGANIC SALES PERFORMANCE IS AT CONSTANT EXCHANGE RATES AND INCLUDES ONLY THE SALES OF BRANDS PRESENT IN BOTH OF THE COMPARED PERIODS ² ON AN ADJUSTED BASIS, EXCLUDING NON-RECURRING ITEMS

Q3 CONFIRMED OUR KEY BUSINESS DRIVERS…

by Region

• Positive sales momentum continuing in Europe, Latin America and IMEA markets
• US business holding up vs another tough comp and delayed deliveries of sport products
• Significant rebound of Asia

by Product

• Sunglasses remaining the best performing product category
• Prescription frames confirming solid trends

by Channel

• Continued rebound of physical retail supporting our core wholesale channels and the ongoing expansion of our B2B: "You&Safilo" platform up +40% vs Q3 21
• Online sales (ca 14% of total sales), up low-single digit in Q3, mid-single digit in 9M

Q3 2022 HIGHLIGHTS

…and THE STRENGTH OF OUR BRAND PORTFOLIO

• Carrera and Polaroid continued to post remarkable double-digit growth
• Smith grew more moderately due to the delayed phasing of deliveries
• Tommy, HUGO BOSS, David Beckham, Under Armour and Isabel Marant were the other key drivers of our organic¹ growth
• Significant new business contribution from Carolina Herrera

TOTAL NET SALES

Q3 positive sales momentum allowed us to confirm solid progress in the first 9 months

Q3 2022	vs Q3 2021	9M 2022	vs 9M 2021
260.4 €m	+14.9% +4.6% @cFX +5.6%1	831.3 €m	+12.7% +5.7% @cFX +9.9%1

¹ORGANIC SALES PERFORMANCE IS AT CONSTANT EXCHANGE RATES AND INCLUDES ONLY THE SALES OF BRANDS PRESENT IN BOTH OF THE COMPARED PERIODS

(% change vs corresponding period of 2021)

• Solid prescription frames business and strong growth of sunglass sales backed by strong summer season.
• Another excellent quarter in Europe for Carrera and Polaroid, and some of our main licensed brands.
• New licenses, introduced this year, adding ca 6% additional growth.

• Italy, Spain, France and Germany, best performing markets. Turkey and Poland expanding nicely.

• Sales performance in US reflecting a tough comp ( Q3 2021 ca +20%¹ vs Q3 2019) and a temporary more moderate growth of Smith.

• Upper part of our brand portfolio recording positive momentum, while trends remaining softer in the entry and mid-tier price points.
• Continued growth of Smith's online business and Blenders' turning positive in the month of September.

(% change vs corresponding period of 2021)

• Carrera, Polaroid, and some of our key licenses continued to drive the positive organic performance of the region, particularly strong in the Middle Eastern markets and India.

• Carolina Herrera a new meaningful addition pushing growth in Brazil and Mexico.

• Q3 sales trends markedly improved in Asia thanks to a better organic performance, driven by the key brands of the region.

• Our key licenses remained our main growth drivers in South-East Asia.
• Carrera and Smith outperformed in Australia.

Q3/9M 2022 ECONOMIC & FINANCIAL PERFORMANCE

GROSS PROFIT AND MARGIN EXPANDING YOY

Positive sales dynamics in terms of price/mix and structural COGS savings continued to offset inflation pressure and forex impact on margins

Q3 2022	vs Q3 2021	9M 2022	vs 9M 2021
140.0 €m	+18.0% +16.2%2	458.4 €m	+20.3% +17.2%2
MARGIN		MARGIN
53.8%	+140 bps +60 bps2	55.1%	+340 bps +210 bps2

ADJ.² EBITDA AND MARGIN EXPANDING YOY

Higher SG&A costs reflecting marketing investments on our brands and IFRIC SaaS costs, still capitalized in Q3 '21

Q3 2022	vs Q3 2021	9M 2022	vs 9M 2021
22.6 €m	+18.6%	85.3 €m	+24.0%
MARGIN		MARGIN
8.7%	+30 bps	10.3%	+100 bps

	September 30, 2022	Dec. 31, 2021
GROUP NET DEBT	115.4	94.0
GROUP NET DEBT pre IFRS-16	67.2	52.8

NEW FINANCING AGREEMENT FOR EURO 300 MILLION SIGNED

Creation of " Digital Force", Safilo's Salesforce Academy that aims to seek and train new talents in the digital transformation and Salesforce field. In partnership with DOT "Digital On Things.

Introduction of Eastman Tritan™ Renew in its polarized lenses, becoming the first player in the market to adopt Tritan™ Renew Polarized lenses.

Q3 and First 9 Months 2022 Trading Update

November 3, 2022

Q3 and First 9 Months 2022 Trading Update

November 3, 2022

Appendices

• ¹ Organic sales performance is provided at constant exchange rates and includes only the proprietary brands and not terminated licenses, present in both of the compared periods, excluding the business attributable to the production supply contract with Kering Eyewear.
• 2 In the first 9M 2022, the adjusted EBITDA excludes net non-recurring costs for Euro 1.7 million due to some special projects costs and restructuring expenses, partially offset by the release of a restructuring provision.In Q3 2022, the adjusted EBITDA excludes a net nonrecurring cost for Euro 1.1 million.
• In the first 9M 2021, the adjusted EBITDA excluded non-recurring costs for Euro 17.4 million (Euro 10.2 million at the gross profit level), mainly related to the announced closure, starting from June 2021, of the Ormož production plant in Slovenia, and also a non-recurring income of Euro 17 million due to the release of a provision for risks and charges booked in 2015 in relation to an investigation by the French Competition Authority. The release is a result of the positive outcome, without sanctions, of this investigation. In Q3 2021, the adjusted EBITDA excluded non-recurring costs for Euro 1.7 million (Euro 1.8 million at the gross profit level).

				Change at current forex								Change at current forex
Q3 2022	%	Q3 2021	%	Reported	Reported	Organic1	(Euro million)	9M 2022	%	9M 2021	%	Reported	Reported	Organic1
124.7	47.9	115.1	50.8	+8.4%	-7.4%	-1.2%	North America	383.5	46.1	355.2	48.2	+8.0%	-3.8%	+1.2%
95.7	36.7	82.8	36.6	+15.5%	+14.1%	+8.1%	Europe	332.7	40.0	291.0	39.5	+14.3%	+14.1%	+18.2%
16.2	6.2	11.3	5.0	+43.3%	+31.6%	+46.1%	Asia Pacific	41.3	5.0	37.2	5.0	+11.1%	+3.4%	+17.2%
23.9	9.2	17.4	7.7	+36.9%	+21.8%	+13.3%	Rest of the world	73.8	8.9	54.0	7.3	+36.8%	+24.7%	+23.0%
260.4	100.0	226.6	100.0	+14.9%	+4.6%	+5.6%	Total	831.3	100.0	737.4	100.0	+12.7%	+5.7%	+9.9%
							Change at constant forex							Change at constant forex

					Change at current forex	Change at constant forex							Change at current forex	Change at constant forex
(Euro million)	Q1 2022	%	Q1 2021	%	Reported	Reported	Organic1	(Euro million)	Q2 2022	%	Q2 2021	%	Reported	Reported	Organic1
North America	129.0	45.7	119.1	47.4	+8.3%	+0.9%	+5.5%	North America	129.6	45.0	121.0	46.6	+7.1%	-5.1%	-0.6%
Europe	117.2	41.5	101.5	40.4	+15.5%	+16.2%	+24.9%	Europe	120.0	41.6	106.7	41.1	+12.4%	+12.1%	+20.7%
Asia Pacific	12.4	4.4	13.0	5.2	-4.4%	-9.3%	+2.3%	Asia Pacific	12.7	4.4	12.9	5.0	-1.4%	-8.5%	+5.9%
Rest of the world	23.9	8.5	17.8	7.1	+34.6%	+27.3%	+29.8%	Rest of the world	26.0	9.0	18.7	7.2	+38.6%	+24.9%	+26.4%
Total	282.6	100.0	251.4	100.0	+12.4%	+8.4%	+14.3%	Total	288.3	100.0	259.4	100.0	+11.2%	+4.0%	+9.8%

+12.6% +6.0% @cFX +4.9%¹

+17.1% +4.2% @cFX +3.6%¹

+31.9% +20.6% @cFX +20.3%¹

THE PRODUCT CATEGORY 'OTHER' MAINLY COMPRISES THE SALES OF SNOW GOGGLES AND SNOW AND BIKE HELMETS 1 ORGANIC SALES PERFORMANCE IS AT CONSTANT EXCHANGE RATES AND INCLUDES ONLY THE SALES OF BRANDS PRESENT IN BOTH OF THE COMPARED PERIODS

+14.1%

+4.6%¹

+5.2% @cFX

(Euro million)	Q3 2022	% on net sales	Q3 2021	% on net sales	% Change 2022 vs 2021
Net sales	260.4		226.6		+14.9%
Gross Profit	140.0	53.8%	118.7	52.4%	+18.0%
EBITDA	21.5	8.3%	17.4	7.7%	+24.0%
Adjusted2 EBITDA	22.6	8.7%	19.1	8.4%	+18.6%
IFRS 16 impact on EBITDA	3.1		3.0
IFRIC SaaS impact on EBITDA	(1.8)		n.a.

(Euro million)	9M 2022	% on net sales	9M 2021	% on net sales	% Change 2022 vs 2021
Net sales	831.3		737.4		+12.7%
Gross Profit	458.4	55.1%	380.9	51.7%	+20.3%
EBITDA	83.6	10.1%	68.4	9.3%	+22.2%
Adjusted2 EBITDA	85.3	10.3%	68.8	9.3%	+24.0%
IFRS 16 impact on EBITDA	8.6		8.7
IFRIC SaaS impact on EBITDA	(5.5)		n.a.

(Euro million)	Q1 2022	% on net sales	Q1 2021	% on net sales	% Change 2022 vs 2021
Net sales	282.6		251.4		+12.4%
Gross Profit	155.5	55.0%	126.6	50.4%	+22.8%
EBITDA	28.7	10.2%	13.4	5.3%	+114.7%
Adjusted EBITDA2	32.0	11.3%	25.8	10.3%	+23.8%
IFRS 16 impact on EBITDA IFRIC SaaS impact on EBITDA	2.6 (1.9)		2.9 n.a.

(Euro million)	Q2 2022	% on net sales	Q2 2021	% on net sales	% Change 2022 vs 2021
Net sales	288.3		259.4		+11.2%
Gross Profit	162.8	56.5%	135.6	52.3%	+20.0%
EBITDA	33.3	11.6%	37.7	14.5%	-11.5%
Adjusted2 EBITDA	30.6	10.6%	23.8	9.2%	+28.5%
IFRS 16 impact on EBITDA	2.8		2.8
IFRIC SaaS impact on EBITDA	(1.8)		n.a.

EXCHANGE RATES

		of As		(Appreciation)/ Depreciation	Average	(Appreciation)/ Depreciation
Currency	Code	September 30,	December 31,	%	9M 2022	9M 2022	%
		2022	2021
Dollar US	USD	0 9748	1 1326	-13 9%	1 0638	1 1962	-11 1%
Dollar Hong-Kong	HKD	7 6521	8 8333	-13 4%	8 3326	9 2912	-10 3%
Swiss Franc	CHF	0 9561	1 0331	-7 5%	1 0118	1 0904	-7 2%
Canadian Dollar	CAD	3401 1	4393 1	-6 9%	3643 1	4968 1	-8 9%
Japanese Yen	YEN	141 0100	130 3800	2% 8	135 9679	129 8320	7% 4
British Pound	GBP	0 8830	0 8403	5 1%	0 8472	0 8636	-1 9%
Swedish Krown	SEK	10 8993	10 2503	6 3%	10 5274	10 1528	3 7%
Australian Dollar	AUD	1 5076	1 5615	-3 5%	1 5044	1 5770	-4 6%
South-African Rand	ZAR	5353 17	18 0625	-2 9%	16 9517	4226 17	-2 7%
Russian Ruble	RUB	59 3067	85 3004	5% -30	76 4762	88 5335	6% -13
Brasilian Real	BRL	5 2584	6 3101	-16 7%	5 4631	6 3765	-14 3%
Indian Rupee	INR	79 4250	84 2292	-5 7%	82 2983	88 0420	-6 5%
Dollar Singapore	SGD	1 4001	1 5279	-8 4%	1 4631	1 6020	-8 7%
Malaysian Ringgit	MYR	5201 4	7184 4	2% -4	6165 4	9414 4	-6 6%
Chinese Renminbi	CNY	6 9368	7 1947	6% -3	7 0193	7 7376	3% -9
Korean Won	KRW	1 400 6900 ,	1 346 3800 ,	4 0%	1 348 7902 ,	1 354 3097 ,	-0 4%
Mexican Peso	MXN	19 6393	23 1438	-15 1%	21 5543	24 0772	-10 5%
Turkish Lira	TRY	18 0841	15 2335	18 7%	16 8796	9 7104	73 8%
Dirham UAE	AED	3 5800	1595 4	-13 9%	3 9069	3931 4	1% -11
Polish Zloty	PLN	4 8483	4 5969	0 0547	4 6724	n.a.	n.a.