Safilo Group — Investor Presentation 2020

Nov 3, 2020

Q3 AND 9M 2020 TRADING UPDATE

November 3, 2020

DISCLAIMER

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.

PROTECTING THE HEALTH AND SAFETY OF ALL OUR PEOPLE AND SUPPORTING OUR COMMUNITIES Rigorous implementation of all safety and prevention regulations provided by government protocols, and supporting the fight against the Covid-19 epidemic

PROTECTING CASH

Minimize all discretionary expenditures and investments, tight control on WC, provide additional liquidity

ACCELERATING ON THE KEY DRIVERS OF OUR GROUP BUSINESS PLAN

New programs, actions and tools to more effectively address the new business context

PROMOTING SAFILO'S COMMITMENT TO PEOPLE, PRODUCT, PLANET New collaboration with The Ocean Cleanup

WE PROTECTED OUR PEOPLE HEALTH AND SAFETY

➢ Extensive smart-working now the new normal in our HQ and in all our regions

WE PROTECTED OUR CASH, SECURING ADDITIONAL LIQUIDITY TO THE GROUP

➢ New term-loan facility of euro 108M, guaranteed by SACE

WE MOVED FORWARD WITH OUR GROUP BUSINESS STRATEGY

• ➢ Sale of Martignacco plant to a local entrepreneur
• ➢ Blenders and Privé Revaux accelerating on their key strengths
• ➢ New B2B e.commerce platform and new CRM system now live

KEY BUSINESS DRIVERS OF THE THIRD QUARTER:

• ➢ FULL-QUARTER CONTRIBUTION OF NEWLY ACQUIRED PRIVÉ REVAUX & BLENDERS EYEWEAR
• ➢ ORGANIC* BUSINESS RECOVERY SUPPORTED BY :
• ➢ Strong rebound of US independent 3Os channel
• ➢ Outstanding growth of Mainland China
• ➢ Improving trends of all other markets/channels vs H1 2020
• ➢ Growth of prescription frames
• ➢ EXPONENTIAL GROWTH OF ONLINE BUSINESS
• ➢ RECOVERY OF A POSITIVE OPERATING PROFITABILITY

Q3 AND 9M KEY ECONOMIC AND FINANCIAL HIGHLIGHTS

in millions of Euro, % of sales, % change vs same periods of 2019

	H1 2020	Q3 2020	9M 2020
NET SALES	335.6	219.1	554.7
	-32.3% @current FX	+3.0% @current FX	-21.7% @current FX
	-32.7% @constant FX	+6.0% @constant FX	-21.1% @constant FX
ADJUSTED1	-28.3	14.3	-13.9
EBITDA	-8.4% of sales	6.5% of sales	-2.5% of sales
GROUP NET DEBT	188.5		201.7
(post IFRS 16)	+113.7M vs Dec.19		+13.2M vs June 20

SALES AND ECONOMIC HIGHLIGHTS

in millions of Euro and % change vs same periods of 2019

• continued strength of Smith products in sport shops and online channels.

in millions of Euro and % change vs same periods of 2019

in millions of Euro and % change vs same periods of 2019

THE GLOBAL PANDEMIC HAS FURTHER ELEVATED THE IMPORTANCE OF THE DIGITAL BUSINESS

• ➢ OUR ORGANIC* ONLINE BUSINESS +94% IN Q3, FROM +38% IN Q2, DRIVEN BY:
• Smith's D2C business, almost tripling
• Internet pure players customers, ca +75%

➢ Q3 TOTAL ONLINE BUSINESS, INCLUDING ACQUISITIONS, TO 16% OF GROUP TOTAL BUSINESS

• 13% of total Group sales in 9M 2020 vs. ca 4% in 9M 2019

Q3 POSITIVE SALES DEVELOPMENT AND THE CONTINUED IMPLEMENTATION OF STRUCTURAL SAVINGS AND CONTINGENCY MEASURES SUPPORTED HIGHER GROSS PROFIT AND BETTER OPERATING LEVERAGE

in millions of Euro, % on sales, % and bps change vs same periods 2019

in millions of Euro, % on sales, % and bps/pps change vs same periods 2019

➢ Organic SG&A expenses, ex M&A and D&A, down ca 14% vs last year, thanks to structural costs savings & contingency measures totalling 9M in the quarter.

in millions of Euro

GROUP NET DEBT WELL UNDER CONTROL, SLIGHTLY ABOVE END OF JUNE LEVEL

	Dec.31, 2019	June 30, 2020	Sept. 30, 2020
NET DEBT	74.8	188.5
NET DEBT pre IFRS 16 and acquisitions	27.8	27.0	44.2

• 201.7 ➢ Higher Working Capital needs in line with management's expectations;

• ➢ New Term Loan facility of 108M finalized.

• ➢ Business activity in October showed a continuation of some of the positive trends recorded in Q3, confirming in particular positive organic growth in North America and solid business developments in Mainland China and some other Asian markets;

• ➢ Online sales remained a solid growth driver in US but also in Europe where uncertainties are soaring again across most countries following the rise of infections;
• ➢ Given the persistence of a market environment still burdened by the Coronavirus pandemic, with a new wave of infections emerging in several countries and fresh governments restrictions on people's movement, the Group maintains a very prudent stance for the rest of the year and remains committed to providing timely information to the market and to all stakeholders on the developments that the health emergency may have in the coming months on the Group's economic and financial results

Our new B2B e-commerce platform, designed with opticians for opticians

New B2B ECOSYSTEM

Redesign of our Sales and Customer Care operations to become our customers' preferred partner

STEP CHANGING CUSTOMERS'EXPERIENCE OFFERING A COMPELLING D2C-LIKE OMNICHANNEL EXPERIENCE

CUSTOMER FACING DIGITAL SHIFT

• NEW B2B E-COMMERCE PLATFORM IMPROVES INTERACTION WITH CUSTOMERS, ORDER COLLECTION & AFTER SALES SERVICE
• NEW CRM PLATFORM ENSURES 360 DEGREES CUSTOMERS GOVERNANCE AND REINFORCES PROFITABLE PARTNERSHIP

Launched in August to react faster to the complex market environment

NEW DESIGN Simple, immediate, pleasant to surf

NEW FEATURES Search optimization & detailed product pages

MORE USER FRIENDLY

Renewed shopping experience & After-sales management

• ✓ In 2020 America's Best expanded the partnership with Privé Revaux to all its retail locations nationwide;
• ✓ launch came after a successful pilot program in 2019;
• ✓ Privé Revaux awarded Product of the Year

SAFILO'S COMMITMENT TO PEOPLE, PRODUCT, PLANET

THE OCEAN CLEANUP SUNGLASSES are made with injected plastic deriving from the Great Pacific Garbage Patch (GPGP), using an innovative upcycling process able to include types of plastic that have traditionally been more difficult to recycle, turning them into a high-quality and safe material.

Appendices

1 In the first 9 months of 2020, the adjusted EBITDA excludes non-recurring costs for Euro 11.8 million, due to restructuring expenses related to the ongoing cost saving program.

In Q3 2020, the adjusted EBITDA excludes non-recurring costs for Euro 1.5 million.

In the first 9 months of 2019, the adjusted EBITDA excluded non-recurring costs for Euro 10.4 million due to restructuring expenses related to the cost saving program.

In Q3 2019, the adjusted EBITDA excluded non-recurring costs for Euro 5.4 million.

² The wholesale business excludes the business of the production agreement with Kering, reported within the geographical area of Europe.

* Safilo Group has consolidated Privé Revaux and Blenders Eyewear in 2020, as per the respective acquisition dates of February 10, 2020 and June 1st, 2020. The organic business excludes the acquisitions and the impacts of exchange rate effects.

million) (Euro	Q3 2020	%	Q3 2019	%	% Change forex at current	% Change forex at constant
Europe	79 3	36 2	95 5	44 9	-17 0%	-16 4%
North America	113 1	6 51	79 9	37 6	5% +41	9% +45
Asia Pacific	9 15	2 7	17 5	8 2	-9 4%	-6 4%
Rest of the world	10 9	0 5	19 8	9 3	2% -45	-35 6%
Total	219 1	100 0	212 8	100 0	+3 0%	+6 0%
(Euro million)	9M 2020	%	9M 2019	%	Change % forex at current	Change % forex at constant
Europe	244 3	44 0	341 8	48 2	-28 5% -28 3%
North America	241 5	43 5	249 4	35 2	-3 2%	-3 0%
Asia Pacific	39 6	7 1	61 0	8 6	-35 0% -34 6%
the world Rest of	29 3	5 3	56 5	8 0	-48 2% -42 6%
Total	554 7	100 0	708 7	100 0	-21 7%	-21 1%

(Euro in millions)	Q3 2020	Q3 2019	% Change
Net sales	219 1	212 8	+3 0%
Gross profit % on net sales	112 6 51 4%	109 0 51 2%	+3 3%
EBITDA % on net sales	12 8 5 8%	7 7 3 6%	3% +66
Adjusted1 EBITDA on net sales %	14 3 6 5%	13 1 6 2%	+9 3%
IFRS 16 impact on EBITDA	3.2	3.4

(Euro in millions)	9M 2020	9M 2019	Change %
Net sales	554 7	708 7	-21 7%
Gross profit % on net sales	261 2 47 1%	375 1 52 9%	-30 4%
EBITDA on net sales %	(25 8) 6%) (4	43 9 6 2%	n.s.
Adjusted1 EBITDA % on net sales	(13 9) (2 5%)	54 3 7 7%	n.s
IFRS 16 impact on EBITDA	9.2	10.4

Exchange Rates

		As of		(Appreciation)/ Depreciation	Average for		(Appreciation)/ Depreciation
		September 30 ,	December 31 ,		September 30 ,	September 30 ,
Currency	Code	2020	2019	%	2020	2019	%
Dollar US	USD	1 1708	1 1234	4 2%	1 1250	1 1236	0 1%
Hong-Kong Dollar	HKD	9 0742	8 7473	3 7%	8 7273	8 8074	-0 9%
Swiss Franc	CHF	1 0804	1 0854	-0 5%	1 0680	1 1179	-4 5%
Canadian Dollar	CAD	1 5676	1 4598	7 4%	1 5218	1 4935	1 9%
Japanese Yen	YEN	123 7600	121 9400	1 5%	120 9108	122 5696	-1 4%
British Pound	GBP	0 9124	0 8508	7 2%	0 8851	0 8835	0 2%
Swedish Krown	SEK	10 5713	10 4468	1 2%	10 5582	10 5679	-0 1%
Australian Dollar	AUD	1 6438	1 5995	2 8%	1 6627	1 6077	3 4%
South-African Rand	ZAR	19 7092	15 7773	24 9%	18 8094	16 1320	16 6%
Russian Ruble	RUB	91 7763	69 9563	31 2%	79 9599	73 0853	9 4%
Brasilian Real	BRL	6 6308	4 5157	46 8%	5 7100	4 3647	30 8%
Indian Rupee	INR	86 2990	80 1870	7 6%	83 4946	78 8301	5 9%
Singapore Dollar	SGD	1 6035	1 5111	6 1%	1 5635	1 5332	2 0%
Malaysian Ringgit	MYR	4 8653	4 5953	5 9%	4 7613	4 6463	2 5%
Chinese Renminbi	CNY	7 9720	7 8205	1 9%	7 8659	7 7135	2 0%
Korean Won	KRW	1 368 5100 ,	1 296 2800 ,	5 6%	1 349 7389 ,	1 306 3774 ,	3 3%
Mexican Peso	MXN	26 1848	21 2202	23 4%	24 5232	21 6336	13 4%
Turkish Lira	TRY	9 0990	6 6843	36 1%	7 59911	6 33901	19 9%
Dirham UAE	AED	4 2998	4 1257	4 2%	4 13168	4 12649	0 1%