Safilo Group — Investor Presentation 2016

Nov 9, 2016

Q3 and 9M 2016 Trading Update

1

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.

SOLID Q3 KPIs – BALANCING WELL DIFFERING LEVERS

Net Sales performance affected by brands we stopped/ will stop servicing

Solid performance of the going-forward brands portfolio (Wholesale +4.3% in Q3, +6.1% in 9M @cfx)

• Strategic licensed brands and Polaroid over-delivering
• Smith growing, Carrera still subdued
• Europe continued to deliver superior performance, while we continue to invest in capabilities and organization
• North America affected by softer optical market
• Building blocks all in place to further strengthen go-to-market
• Ongoing restructuring of Solstice retail
• Asia Pacific performance started to improve
• Rest of the World progressing

3

SOLID Q3 KPIs – BALANCING WELL DIFFERING LEVERS

1 Adj. economic performance affected by brands we stopped/ will stop servicing
		GROSS PROFIT
	-3.7%	-2.3% +1.1%

Solid performance of the going-forward brands portfolio

Improving economic results driven by industrial performance and progress on cost savings

NET SALES PERFORMANCE

in millions of Euro

PROGRESS IN KEY MARKETS

9M 2016 +4.7% @ CFX (Wholesale +6.1%)

EUROPE	NORTH AMERICA	ASIA	ROW
	Total +0.6%
+11.4%	Wholesale +3.4%	-10.9%	+9.0%

Q3 2016 +3.0% @ CFX (Wholesale +4.3%)

EUROPE	NORTH AMERICA	ASIA	ROW
+9.5%	Total -2.2% Wholesale -0.6%	-2.5%	+11.5%

• All core markets delivering positive trends
• Broad based positive performance by channel and segment

Total -2.2%

• Wholesale performance driven by softer independent opticians channel
• Solstice retail still weak

Australia key growth driver •
----------------------------------------

• Business environment remains difficult and volatile

• Positive trends in Latin America and continuing progress in IMEA • Positive launch of havaianas in Brazil

GROSS MARGIN PERFORMANCE

6

KEY DRIVERS

• Wholesale gross margin up 10 bps in 9M and 20 bps in Q3
• Positive price/mix effect of going-forward brands portfolio
• Better fixed cost absorption in the plants
• Dilution from Gucci, retail and exchange rates

ADJ.¹ EBITDA PERFORMANCE

in millions of Euro and % on sales

KEY DRIVERS

• Wholesale adj. ¹ EBITDA margin up 80 bps in 9M and 210 bps in Q3
• Sales and cost savings driving improved operating leverage
• Dilution from Gucci, retail and exchange rates

GROUP NET DEBT

in millions of Euro

Q1 2015 H1 2015 9M 2015 FY 2015 Q1 2016 H1 2016 9M 2016

PROGRESS ON OUR 2020 STRATEGIC CHOICES

OUR GO-TO-MARKET ACTIONS FOR QUALITY OF SALES

Broaden our geographic coverage, with consistent high quality commercial capabilities, protecting the prestige of our brands and our profitability

COMMERCIAL LEADERSHIP:

NEW CHIEF COMMERCIAL OFFICER FOR WESTERN EUROPE AND GLOBAL KEY ACCOUNTS, ALONGSIDE CHIEF COMMERCIAL OFFICER FOR NORTH AMERICA AND GLOBAL SPORTS. EMERGING MARKETS DIRECTLY LED BY CEO TO ACCELERATE GROWTH AND SIMPLIFICATION

GEOGRAPHIC COVERAGE:

NEW BUSINESS REGION NORTH EUROPE AND NEW SHOWROOM IN STOCKHOLM. NEW DISTRIBUTION PARTNERSHIP IN ARGENTINA AS PART OF FURTHER LATIN AMERICA DEVELOPMENT.

VIRTUAL CUSTOMER INTEGRATION:

STRONG PROGRESS ON SMILE PROGRAM EXPANSION COVERING NOW NEW CHANNELS

QUALITY COMMERCIAL PRACTICES:

CONTROL CHANNELS AND DOORS, SELL OUT AND TRADE MARKETING, SHIP TO CONSUMPTION, DSO

OUR MULTI-SEGMENT BRANDS PORTFOLIO BALANCE

Early renewal of the licensing agreement with Max Mara to the end of 2023

"We are proud of the renewal with Safilo. We are benefitting from its deep reaching transformation and the revival of its unique product and craftsmanship expertise which dates back to 1878," commented Luigi Maramotti, Max Mara Chairman. "Max Mara Eyewear has, as a consequence, found unparalleled creative coherence and technical product content which is fueling our brand's world with distinctive expressions of craftsmanship and style that are perfectly reflective of our core values. Safilo is for us a true partner of trust and brand steward, able to understand deeply our brand's DNA, interpreting it in distinctive high quality optical frames and sunglasses."

Max Mara Eyewear was recently selected by Vogue.com as one of the '7 Best Accessories From the Milan Fall Winter 2016 Fashion Week'

OUR MULTI-SEGMENT BRANDS PORTFOLIO BALANCE

Two new licensing agreements

A new licensing agreement for Moschino and Love Moschino eyewear collections to tap an uncovered segment in our fashion luxury offer.

From January 2018 until December 31, 2025.

MOSCHINO RAG & BONE

A new licensing agreement for rag & bone eyewear collections to add a directional brand to our growing designer portfolio.

From January 2018 until December 31, 2022.

OUR LEAD IN INNOVATION

Expanding our lens capability and technology

SUN LENSES ARE THE NEW FRONTIER "BEYOND THE FRAME", AN INTEGRAL PART AND KEY ELEMENT OF DIFFERENTIATION OF OUR EYEWEAR DESIGN

• 100% ownership of sun lenses manufacturing LENTI

• New investments in our sun lenses manufacturing to increase capacity and improve time to market
• Leveraging LENTI within our Group enables us to play at 360° on all product design and quality elements
• New Development Lab for creating new lenses like those used in the DIOR UMBRAGE line

OUR LEAD IN INNOVATION

Breakthrough performance eyewear

• ChromaPop now available also in our performance shields
• New Sport Active Sun and Active RX styles in the "carve design language"

Rx Lab for enhanced consumer experience

Maximize synergies between our product lines with hero colors and technologies

AMONG THE MOST LOVED AND EDITORIALLY FEATURED EYEWEAR WORLDWIDE

Appendices

Notes to the presentation

1 In the first nine months of 2016, the adjusted EBITDA does not include non-recurring costs for a total of Euro 6.4 million, related for Euro 5.2 million to overhead cost saving initiatives, such as the planned integration of Vale of Leven (Scotland) Polaroid lens production into Safilo's China based corporate supply network, and for Euro 1.2 million to commercial restructuring costs in the EMEA region.

In the first nine months of 2015, the adjusted EBITDA did not include non-recurring costs related to the commercial restructuring costs in the EMEA region for Euro 1.2 million and other non-recurring costs for Euro 1.2 million mainly related to the consolidation of the Group's North American distribution network into its Denver facility.

Economic results

in millions of Euro

	9M 2016	%	9M 2015	%	% Change	Q3 2016	%	Q3 2015	%	% Change
Net sales	939.1	100.0	959.7	100.0	-2.2%	288.0	100.0	284.8	100.0	1.1%
Gross profit	564.0	60.1	577.4	60.2	-2.3%	169.4	58.8	167.5	58.8	1.1%
EBITDA	71.0	7.6	75.1	7.8	-5.4%	18.8	6.5	14.7	5.2	27.6%
Adjusted EBITDA	77.4	8.2	77.4	8.1	0.0%	19.1	6.6	14.7	5.2	30.0%

Net sales performance

Net sales performance
in millions of Euro
Net sales by geographical area	9M 2016	%	9M 2015	%	Change %	Change % (*)
Europe	399.1	42.5	378.3	39.4	5.5%	6.6%
North America	386.3	41.1	403.6	42.1	-4.3%	-3.8%
Asia Pacific	90.1	9.6	113.0	11.8	-20.2%	-19.7%
Rest of the world	63.5	6.8	64.9	6.8	-2.1%	4.9%
Total	939.1	100.0	959.7	100.0	-2.2%	-1.0%
Net sales by distribution channel	9M 2016	%	9M 2015	%	Change %	Change % (*)
Wholesale	881.4	93.9	890.7	92.8	-1.0%	0.2%
Retail	57.7	6.1	69.0	7.2	-16.4%	-16.3%
Total	939.1	100.0	959.7	100.0	-2.2%	-1.0%
(*) at constant exchange rates Net sales by geographical area	Q3 2016	%	Q3 2015	%	Change %	Change % (*)
Europe	107.6	37.4	101.7	35.7	5.9%	7.8%
North America	126.5	43.9	133.1	46.7	-5.0%	-4.7%
Asia Pacific	31.3	10.9	29.9	10.5	4.5%	2.8%
Rest of the world	22.6	7.8	20.1	7.1	12.3%	12.0%
Total	288.0	100.0	284.8	100.0	1.1%	1.7%
Net sales by distribution channel	Q3 2016	%	Q3 2015	%	Change %	Change % (*)
Wholesale	268.9	93.4	262.7	92.3	2.4%	3.0%
Retail	19.0	6.6	22.1	7.7	-13.8%	-13.4%
Total	288.0	100.0	284.8	100.0	1.1%	1.7%

Exchange Rates

		As of		(Appreciation)/ Depreciation	Avgerage for		(Appreciation)/ Depreciation
		September 30,	December 31,		September 30,	September 30,
Currency	Code	2016	2015	%	2016	2015	%
US Dollar	USD	1.1161	1.0887	2.5%	1.1161	1.1144	0.1%
Hong-Kong Dollar	HKD	8.6547	8.4376	2.6%	8.6649	8.6397	0.3%
Swiss Franc	CHF	1.0876	1.0835	0.4%	1.0935	1.0621	3.0%
Canadian Dollar	CAD	1.4690	1.5116	-2.8%	1.4746	1.4038	5.0%
Japanese Yen	YEN	113.0900	131.0700	-13.7%	120.9359	134.7776	-10.3%
British Pound	GBP	0.8610	0.7340	17.3%	0.8031	0.7271	10.5%
Swedish Krown	SEK	9.6210	9.1895	4.7%	9.3737	9.3709	0.0%
Australian Dollar	AUD	1.4657	1.4897	-1.6%	1.5046	1.4631	2.8%
South-African Rand	ZAR	15.5238	16.9530	-8.4%	16.6796	13.7010	21.7%
Russian Ruble	RUB	70.5140	80.6736	-12.6%	76.1890	66.5974	14.4%
Brasilian Real	BRL	3.6210	4.3117	-16.0%	3.9561	3.5257	12.2%
Indian Rupee	INR	74.3655	72.0215	3.3%	74.9108	70.8549	5.7%
Singapore Dollar	SGD	1.5235	1.5417	-1.2%	1.5296	1.5201	0.6%
Malaysian Ringgit	MYR	4.6148	4.6959	-1.7%	4.5568	4.2163	8.1%
Chinese Renminbi	CNY	7.4463	7.0608	5.5%	7.3462	6.9641	5.5%
Korean Won	KRW	1,229.7600	1,280.7800	-4.0%	1,295.4828	1,252.6329	3.4%
Mexican Peso	MXN	21.7389	18.9145	14.9%	20.4291	17.3653	17.6%
Turkish Lira	TRY	3.3576	3.1765	5.7%	3.27602	n.a.	n.a.
Dirham United Emirates	AED	4.0972	3.996618	2.5%	4.097	4.0912	0.1%

• Polaroid YOU'LL SEE	D ior	JIMMY CHOO	swatch the oo eyes	BANANA REPUBLIC
CARRERA EYEWEAR SINCE 1956	CÉLINE	MARC JACOBS	havaianas	Juicy Couture los angeles, california
	FENDI	ELIE SAAB	BOBBI BROWN	Liz claiborne
SMITH	GIVENCHY PARIS	GUCCI	MAX&Co.
	MaxMara	œ kate spade NEW YORK	pierre cardin PARIS	Saks Avenue
SAFIIO OCCHIALI DAL 1934	BOSS BOSS HUGO	TOMMY HILFIGER	ISSUE Nº FOSSIL 1954	JACK SPADE