Safilo Group — Investor Presentation 2021

Aug 3, 2021

H1 2021 Results

August 3, 2021

H1 2021 Results

August 3, 2021

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.

H1 2021 CONFIRMED STRONG YOY REBOUND AND BUSINESS WELL ABOVE 2019

"We are very pleased that the second quarter continued the solid sales and profitability momentum of the first three months of the year, allowing us to close the first half of 2021 with a significant year on year rebound and well above H1 2019.

In the period, we continued to seize the business opportunities that our renewed brand portfolio provided us in our key markets...."

Angelo Trocchia, CEO

BUSINESS PERFORMANCE CONSISTENTLY DRIVEN BY OUR STRATEGIC PILLARS

✓

✓

• Successfull rebalancing of the Group's brand portfolio, acquisitions + new licenses fully compensating terminated business
• Organic business up high-single digits, with broad based growth across our core brands ✓
  • USA, China, prescription frames and Smith sport products driving the highest momentum
• Online business soaring behind our strongholds, IPPs and digital DTC business, compensating still subdued wholesale sunglass business ✓

EXCEPTIONAL YEAR ON YEAR REBOUND OF GROWTH, WITH SALES AND PROFITS 2x/3x vs Q2 2020

FURTHER, SOLID GROWTH vs Q2 2019

ROBUST SALES GROWTH AND STRUCTURAL COST SAVINGS DELIVERING SIGNIFICANT RECOVERY OF PROFITS GROUP NET DEBT SUBSTANTIALLY STABLE DESPITE CASH OUT FOR RESTRUCTURING

GROUP NET DEBT € 226.9M
vs FY 2020

substantially in line

H1 2021 SALES PERFORMANCE

Progressing on our strategic priorities

Successful rebalancing of the Group's brand portfolio

• +++Blenders/Privé Revaux/Levi's/DavidBeckham/Missoni/Ports/ Isabel Marant/Under Armour
• ---Licenses terminated at the end of 2020

Organic business up high-single digits

• +++Smith/+Carrera/-Polaroid
• ++Hugo Boss/Tommy Hilfiger/Kate Spade/Jimmy Choo
• Prescription frames up double-digits, strong across all geographies and brands. Smith winter/summer sport products booming ✓
• ✓ Sunglasses still held back by business context+most difficult comps base

Online sales soaring behind Blenders and Smith's digital DTC business and growth of internet pure players (IPP)

0

H1 2019 H1 2021

H1 2020

10 20 30 40 50 60 70 80 14% € Net Sales SAFILO'S H1 2021 ONLINE BUSINESS (% on total net sales and % change H1 '21 vs H1'20) 11% 4% Blenders' D2C business on a pro-forma basis²+31% Smith's D2C +39% Internet pure players (IPP) +38%

Progressing on our strategic priorities

In Q2 2021 our total online business was up +64% vs Q2 2020 In H1 2021, total online doubled vs H1 2020 and was almost 4x bigger than in 2019

H1 2021 ECONOMIC AND FINANCIAL PERFOMANCE

• RECOVERY OF OPERATING LEVERAGE AS SALES VOLUMES INCREASED
• CONTINUED STRUCTURAL SAVINGS, ACCELERATING ON COGS…HELPING NOW TO OFFSET INFLATIONARY PRESSURES ON COSTS
• NON-RECURRING COSTS¹ OF €19.3M, MAINLY DUE TO THE CLOSURE OF THE ORMOZ PRODUCTION PLANT IN SLOVENIA
• NON-RECURRING INCOME¹ OF €17M DUE TO THE RELEASE OF A PROVISION FOR RISK AND CHARGES

UNDERLYING INDUSTRIAL PERFORMANCE SUBSTANTIALLY IN LINE WITH 2019 LEVELS

• ✓ ACCRETIVE GROWTH OF THE DTC CHANNEL, LARGELY OFFSETTING IMPACT OF TERMINATED BUSINESS
• ✓ STRUCTURAL COGS SAVINGS COUNTERBALANCING HIGHER INBOUND TRANSPORT COSTS

OPERATING PERFORMANCE WELL ABOVE 2019 LEVELS

• ✓ STRUCTURAL RECOVERY OF OPERATING LEVERAGE AND COMPLETION OF THE OVERHEADS SAVING PLAN
• ✓ HIGHER MARKETING INVESTMENTS, IN LINE WITH IMPROVED BUSINESS ENVIRONMENT AND ONLINE BUSINESS SEASONALITY

Q2/H1 2021 ECONOMIC PERFORMANCE

GROUP NET RESULT BACK IN PROFIT

✓ BELOW ADJUSTED¹ H1 2019 PROFIT DUE TO HIGHER NET FINANCIAL EXPENSES

H1 2021 €2.0M margin 0.4% vs H1 2019 +100.8% +50.2 pps GROUP NET RESULT

Adjusted¹ GROUP NET RESULT

H1 2021 FINANCIAL PERFOMANCE

SATISFACTORY CASH FLOW PERFORMANCE

• ✓ POSITIVE OPERATING CASH FLOW THANKS TO SOLID ECONOMIC PERFORMANCE AND EFFECTIVE MANAGEMENT OF WORKING
• ✓ CAPITAL CASH OUT OF CA €12M MAINLY IN RELATION TO THE CLOSURE OF THE ORMOZ PLANT IN SLOVENIA
• ✓ INVESTMENTS IN DIGITAL TRANSFORMATION AND IT + MAINTENANCE CAPEX

GROUP NET DEBT SUBSTANTIALLY IN LINE WITH DECEMBER 31, 2020

BUSINESS EVOLUTIONS AFTER H1 2021

OUR CUSTOMER-CENTRIC STRATEGY! ✓OUR NEW "YOU&SAFILO" BTB E-COMMERCE PLATFORM IN EUROPE

		VISIT THE PLATFORM	Language English v
YOU&SAFILO: A NEW SHOPPING EXPERIENCE YOU&SAFILO is the new e-commerce platform designed with Opticians, which renews and facilitates your shopping experience online. Find out the new features through the presentation videos which illustrate all the advantages and guidelines to use itwith You&Safilo in a blink of an eye!	TUTORIAL	TUTORIAL	100 B TUTORIAL
IT'S ANOTHER STEP FORWARD TO BUILD OUR FUTURE TOGETHER. WHAT DOES YOU&SAFILO OFFER YOU? WATCH THE VIDEO AND FIND OUT NOW!	WOULD YOU LIKE TO REPLACE A PRODUCT?	WOULD YOU LIKE TO ORDER A SPARE PART?	WOULD YOU LIKE TO BUY A PRODUCT?

OUR DIGITAL DTC STRATEGY!

✓BLENDERS MOVES FORWARD WITH ITS INTERNATIONAL EXPANSION

✓

✓

NEW 5-YEAR GLOBAL LICENSING AGREEMENT WITH

An iconic luxury fashion brand, valued throughout the world for its feminine approach and extreme elegance

A relevant eyewear brand providing an immediate opportunity to strengthen our women's proposition and to effectively counterbalance recent brand exits

✓ First optical and sunglass collections hitting the market in January 2022, for the new spring/summer season

Based on the better than expected H1 2021 performance and the continuation of positive trends into the beginning of the third quarter, Safilo now expects the Group's full year 2021 net sales above 2019 levels, up mid-single digits at constant exchange rates. Adjusted EBITDA for the year is also forecasted to surpass 2019 levels. Such expectations are based on the assumption of a stable business environment, in the second half of 2021, in relation to the Covid-19 pandemic.

ON JUNE 29, 2021 WE LAUNCHED A SHARE CAPITAL INCREASE UP TO A MAXIMUM OF €135M

• ✓ Mainly aimed at the repayment of the subordinated Shareholder Loan of original €90M, plus the relative amount of interests accrued, granted to Safilo in two tranches in 2020 by Multibrands Italy BV, Safilo's main shareholder, to support the timely closing of the acquisitions of Blenders Eyewear and Privé Goods
• ✓ The repayment will provide us with a more cost-efficient financial structure, to pursue with determination our consolidated cost savings program, considerably limiting financial charges for the next five years. This will support us on the path of recovering a solid and sustainable operating, but also net performance
• ✓ The share capital increase is also aimed at further strengthening our capital structure, further enabling our growth strategy with additional resources and new strength
• ✓ The share capital increase is supported by the reference shareholder

H1 2021 Results

August 3, 2021

H1 2021 Results

August 3, 2021

Appendices

1 In H1 2021, the adjusted economic results exclude non-recurring costs for Euro 19.3 million (Euro 8.4 million at the gross profit level, and Euro 15.6 million at the EBITDA 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 Q2 2021, the adjusted EBITDA excludes non-recurring costs for Euro 3.2 million (Euro 3.8 million at the gross profit level), and a non-recurring income of Euro 17 million due to the release of the above mentioned provision.

In H1 2020, the adjusted economic results excluded non-recurring costs for Euro 13.2 million (Euro 10.3 million on EBITDA), due to restructuring expenses related to the ongoing cost saving program. In Q2 2020, the adjusted EBITDA excluded non-recurring costs for Euro 7.9 million.

In H1 2019, the adjusted economic results excluded: (i) the impairment of the entire goodwill allocated to the Group's cash generating units for Euro 227.1 million, (ii) non-recurring costs for Euro 5 million (Euro 3.8 million in Q2 2019) due to restructuring expenses related to the ongoing cost saving program, and (iii) a write-down of deferred tax assets of Euro 23.3 million.

² Blenders' H1 2021 pro-forma performance is calculated compared to the same period of 2020. Safilo Group consolidated Blenders from June 1 st 2020.

							% change 2021 vs 2020	% change 2021 vs 2019
(Euro million)	H1 2021	%	H1 2020	%	H1 2019	%	current constant forex forex	current forex	constant forex
North America	240.1	47.0	128.5	38.3	169.5	34.2	+86.9% +103.6%	+41.6%	+50.6%
Europe	208.2	40.8	165.0	49.2	246.3	49.7	+26.2% +27.1%	-15.5%	-14.7%
Asia Pacific	25.9	5.1	23.7	7.1	43.5	8.8	+9.1% +11.7%	-40.4%	-39.1%
Rest of the world	36.5	7.2	18.4	5.5	36.7	7.4	+98.6% +111.7%	-0.4%	+14.4%
Total	510.7	100.0	335.6	100.0	495.9	100.0	+52.2% +59.9%	+3.0%	+7.7%

(Euro million)								% change 2021 vs 2020		% change 2021 vs 2019								% change 2021 vs 2020		% change 2021 vs 2019
	Q1 2021	%	Q1 2020	%	Q1 2019	%	current forex	constant forex	current forex	constant forex	(Euro million)	Q2 2021	%	Q2 2020	%	Q2 2019	%	current forex	constant forex	current forex	constant forex
North America	119.1	47.4	84.4	38.2	88.9	36.0		+41.1% +53.8%		+34.0% +41.8%	North America	121.0	46.6	44.1	38.5	80.6	32.4	+174.6%	+198.9%	+50.1%	+60.3%
Europe	101.5	40.4	107.7	48.7	124.6	50.4	-5.8%	-5.0%		-18.5% -17.8%	Europe	106.7	41.1	57.2	50.0	121.7	48.9	+86.5%	+87.5%	-12.3%	-11.4%
Asia Pacific	13.0	5.2	14.9	6.7	17.7	7.2		-13.0% -10.8%		-26.8% -25.3%	Asia Pacific	12.9	5.0	8.8	7.7	25.7	10.3	+46.4%	+49.6%	-49.8%	-48.5%
Rest of the world	17.8	7.1	14.1	6.4	16.1	6.5		+26.6% +40.6%		+10.7% +26.5%	Rest of the world	18.7	7.2	4.4	3.8	20.6	8.3	+330.3%	+340.4%	-9.1%	+4.9%
Total	251.4	100.0	221.1	100.0	247.3	100.0		+13.7% +20.0%		+1.7% +6.0%	Total	259.4	100.0	114.5	100.0	248.6	100.0	+126.6%	+137.1%	+4.3%	+9.4%

H1 2021 ECONOMIC RESULTS

(Euro in millions)	H1 2021	%	H1 2020	%	H1 2019	%	% Change vs 2020	% Change vs 2019
Net sales	510.7	100.0	335.6	100.0	495.9	100.0	52.2%	3.0%
Cost of sales	(248.5)	(48.7)	(187.0)	(55.7)	(229.8)	(46.3)	-32.9%	-8.1%
Gross profit	262.2	51.3	148.6	44.3	266.2	53.7	76.5%	-1.5%
Selling and marketing expenses	(188.1)	(36.8)	(150.0)	(44.7)	(192.9)	(38.9)	-25.4%	2.5%
General and administrative expenses	(59.0)	(11.6)	(56.7)	(16.9)	(60.9)	(12.3)	-4.1%	3.0%
Impairment loss on goodwill	-	-	-	-	(227.1)	(45.8)	-	n.s.
Other operating income (expenses)	7.2	1.4	(10.3)	(3.1)	(4.2)	(0.8)	170.1%	273.5%
Operating profit/(loss)	22.3	4.4	(68.4)	(20.4)	(218.8)	(44.1)	132.7%	110.2%
Gains/(losses) on liabilities for options on non-controlling interests	(0.7)	(0.1)	-	-	-	-	n.s.	n.s.
Financial charges, net	(11.6)	(2.3)	(11.6)	(3.5)	(2.9)	(0.6)	-0.2%	-300.5%
Profit/(Loss) before taxation	10.1	2.0	(80.0)	(23.8)	(221.7)	(44.7)	112.6%	104.5%
Income taxes	(7.6)	(1.5)	5.7	1.7	(25.2)	(5.1)	-233.2%	70.0%
Net profit/(loss) of the period	2.5	0.5	(74.3)	(22.1)	(246.9)	(49.8)	103.3%	101.0%
Non-controlling interests	0.5	0.1	0.5	0.1	0.0	0.0	13.8%	2376.8%
Net profit/(loss) attributable to the Group	2.0	0.4	(74.8)	(22.3)	(246.9)	(49.8)	102.6%	100.8%
EBITDA	51.0	10.0	(38.6)	(11.5)	36.3	7.3	232.4%	40.8%
Adjusted1 economic results
EBIT	24.7	4.8	(55.2)	(16.4)	13.3	2.7	144.7%	85.5%
EBITDA	49.7	9.7	(28.3)	(8.4)	41.2	8.3	275.7%	20.5%
Net profit/(loss) attributable to the Group	4.4	0.9	(63.7)	(19.0)	8.5	1.7	106.9%	-48.5%

(Euro millions) in	Q2 2021 %	Q2 2020 %	Q2 2019 %	Change % 2020 vs	Change % 2019 vs
sales Net	259 4 100 0	114 100 0 5	248 6 100 0	126 6%	4 3%
profit Gross	135 6 52 3	39 2 34 2	135 9 54 7	246 3%	-0 2%
EBITDA	37 7 14 5	(42 0) (36 7)	17 4 7 0	189 7%	116 6%
Adjusted1 EBITDA	23 8 9 2	(34 1) (29 8)	21 2 8 5	169 9%	12 2%

(Euro millions) in	June 30 2021 ,	December 31 2020 ,	Change
working capital Net	200 6	188 5	12 0
Tangible Right of , and Intangible fixed Use assets ,	300 1	316 5	(16 5)
Goodwill	31 3	30 3	1 0
held for sale Non-current assets	11 5	6 6	4 9
/ Other (liabilities) assets , net	(115 5)	(133 5)	18 1
invested capital Net	427 9	408 4	19 5
financial Net position	(226 9)	(222 1)	(4 8)
Shareholders' Group equity	(161 3)	(147 3)	(14 0)
Non-controlling interests	(39 8)	(39 0)	(0 7)

(Euro millions) in	June 30 2021 ,	June 30 2020 ,	Change
Trade receivables	220 6	150 3	70 3
Inventories	195 1	228 4	(33 4)
Trade payables	(215 1)	(182 1)	(33 1)
working capital Net	200 6	196 7	3 9
sales % net on	0% 21	3% 25

(Euro millions) in	H1 2021	H1 2020
Cash flow from before changes working capital operating activities in	19 5	(39 3)
Changes in working capital	(9 4)	56 3
Cash flow from operating activities	10 1	17 0
Cash flow for organic investment activities	(9 8)	(9 3)
Cash for the principal portion of lease liabilities IFRS 16 payments	(5 1)	(5 3)
acquisitions/disinvestments) Cash Flow (before Free	(4 8)	2 5
for/from acquisitions/disinvestments Cash flow	-	(111 7)
Cash Flow Free	(4 8)	(109 2)

EXCHANGE RATES

				(Appreciation)/			(Appreciation)/
	of As			Depreciation	for Average		Depreciation
Currency	Code	June 30 2021 ,	December 31 2020 ,	%	June 30 ,	June 30 ,	%
					2021	2020
Dollar US	USD	1 1884	1 2271	2% -3	1 2054	1 1021	4% 9
Dollar Hong-Kong	HKD	9 2293	9 5142	0% -3	9 3551	8 5531	4% 9
Swiss Franc	CHF	1 0980	1 0802	6% 1	1 0946	1 0642	9% 2
Canadian Dollar	CAD	1 4722	1 5633	8% -5	1 5030	1 5033	0% 0
Japanese Yen	YEN	131 4300	126 4900	3 9%	129 8681	119 2668	8 9%
British Pound	GBP	0 8581	0 8990	6% -4	0 8680	0 8746	-0 8%
Swedish Krown	SEK	10 1110	10 0343	0 8%	10 1308	10 6599	0% -5
Australian Dollar	AUD	1 5853	1 5896	-0 3%	1 5627	1 6775	-6 8%
South-African	RandZAR	17 0114	18 0219	-5 6%	17 5244	18 3112	-4 3%
Ruble Russian	RUB	86 7725	91 4671	-5 1%	89 5502	76 6692	16 8%
Brasilian Real	BRL	5 9050	6 3735	-7 4%	6 4902	5 4104	20 0%
Indian Rupee	INR	88 3240	89 6605	-1 5%	88 4126	81 7046	8 2%
Dollar Singapore	SGD	1 5976	1 6218	-1 5%	1 6059	1 5411	4 2%
Malaysian Ringgit	MYR	4 9336	4 9340	0 0%	4 9387	4 6836	5 4%
Chinese Renminbi	CNY	7 6742	8 0225	-4 3%	7 7960	7 7509	0 6%
Korean Won	KRW	1 341 4100 ,	1 336 0000 ,	0 4%	1 347 5387 ,	1 329 5321 ,	1 4%
Mexican Peso	MXN	23 5784	24 4160	-3 4%	24 3270	23 8430	2 0%
Turkish Lira	TRY	10 3210	9 1131	3% 13	9 52264	7 14925	2% 33
Dirham UAE	AED	4 3644	4 5065	2% -3	4 42663	4 04727	4% 9

BRANDS PORTFOLIO

* in Safilo's portfolio from January 2022