Safilo Group — Investor Presentation 2023

Mar 10, 2023

CAPITAL MARKET DAY

MARCH 10, 2023

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.

DISCLAIMER

2022 RESULTS

SAFILO TODAY: OUR ACHIEVEMENTS

THE EYEWEAR SECTOR

SAFILO VISION

STRATEGY FOR A BALANCED PORTFOLIO

MEDIUM-TERM TARGETS

2022 RESULTS

+5.7% -0.6% @cFX +0.7% organic1

ANOTHER YEAR OF NET SALES GROWTH

• Smith, Carrera & Polaroid up double -digits
• Leading and new licenses delivered solid growth
• Europe rebounded (+16.1% 1 ), emerging markets grew solidly

• North America stable ( -0.3 % 1 ) on tough comps

• Positive quarter for Smith and Blenders

• Europe very solid (+8.5 % 1 ) despite decline of GV ' s business
• NA down 4.7 % ¹ on tough comps (+19.7% in Q4 '21 vs '19) and weaker wholesale demand

2022 1, 0 76 . 7 €M

• 1 1 .1% +4.2% @cFX +7.7% organic 1

• Early completion of the cost of goods sold saving plan

• Positive price/mix dynamics
• Mitigated inflationary pressures

2022 597. 4 €M GROSS MARGIN 55.5 %

+19. 1 % +38 0 bps

STRONG GROSS MARGIN IMPROVEMENT

• Richer sales mix by distribution channel
• Receding inflationary pressures

+15.1% +470 bps

+25.3% +100 bps

• Higher marketing investments to support the growth of home brands

• Increase in investments dedicated to the Group's digital development

• Continued investments in brands and digitalization

• Margin upside limited by lower operating leverage

2022 101.2 €M ADJ. ² EBITDA MARGIN 9. 4 %

+24.2% +100 bps

FURTHER RECOVERY OF ADJ. ² EBITDA

+112.6% +260 bps

• Significant reduction of financial charges mainly thanks to improved capital structure
• Gain on liabilities for options on non-controlling interests broadly in line with 2021

ADJ.2 NET RESULT

2021 2022

GROUP NET DEBT	94.0	113.4
Group net debt pre IFRS-16	52.8	69.6
Financial leverage also pre IFRIC SaaS	0.7x	0.7x

• Strong Cash Flow from operating activities before change in WC
• Net Working Capital at ca. 27% of sales due to higher trade receivables and inventories, reflecting business growth

FREE CASH FLOW	(2.7)	(16.5)
Cash Flow from operating activities	17.3	9.2
Cash Flow for organic investments	(9.8)	(15.7)

FINANCIAL PERFORMANCE

Safilo Today: OUR ACHIEVEMENTS

Home brands acceleration & diversified set of licenses

SAFILO TODAY: OUR ACHIEVEMENTS

Structural Profit and Financial Solidity Margin Expansion

Expotential growth of Online business

Growth drivers shaping Product and Geographic mix

2022 CONCLUDES 4 YEARS OF EFFECTIVE TURNAROUND

OUR ACHIEVEMENTS

NET SALES TURNAROUND

In €M and % change @cFX

In 2022 Net Sales exceeded the goal of the previous Plan to return the Group to around €1bn sales by 2024

* Continuing operations , excluding retail

HOME BRANDS ACCELERATION

% of HOME BRANDS on sales ³

Home brands today at 42% from 32% in 2018

Diverse set of licenses, with no concentrated exposure & broad consumer reach

EXPONENTIAL GROWTH OF ONLINE CHANNELS

% of ONLINE BUSINESS on sales ³

Online channels today at 15% from 4% in 2018

Continued strong focus on customers playing in core distribution channel

Sport business today at 12% from 8% in 2018

Resilient prescription frames business holding up at 40%

% of SPORT BUSINESS on sales ³

GROWTH DRIVERS SHAPING PRODUCT MIX

Sunglasses at 48%

North America today at 46% from 35% in 2018

GROWTH DRIVERS SHAPING GEOGRAPHICAL MIX

% of NORTH AMERICA on sales

Europe growing organically, but more impacted by portfolio changes

Emerging markets still an opportunity

PROFIT & MARGIN EXPANSION

Favourable price/mix dynamics

i n €M and % on sales

Cost saving programs fully achieved ahead of plan

Higher investments in our brands and digital transformation

FINANCIAL SOLIDITY

Healthy Balance Sheet

Capital increase to finance M&A

New debt structure enabling growth investments

i n € M

The EYEWEAR SECTOR

WHAT WILL NOT CHANGE GOING FORWARD

• Strong industry growth outlook for the medium to long-term, underpinned by fundamental human drivers
• Resilience of the category in downturns and crises

WHAT WILL EVOLVE GOING FORWARD

• Consumers are more engaged, digitally savvy & value driven, living in a world of the "attention economy "
• Digital channels (both D2C and B2B) will continue to grow disproportionately
• Sustainability as an imperative rather than a nice-to-have

THE ATTRACTIVE EYEWEAR SECTOR

WHERE WE PLAY

Retail value of eyewear market, 20 21, €B

SAFILO 'S MARKETPLACE

CAGR

PRE COVID ~ + 4 % ( 16 -19)

POST COVID ( 23- 27E)

Eyewear market size in the long -term

Source: Management's estimates

DEMOGRAPHICS

• Ageing population
• Increasing incidence of myopia

LIFESTYLE CHANGES

• Use of digital devices increasing risk of blue light damage
• Higher awareness of importance of sun protection against UV light

PREMIUMIZATION

Eyewear as a relevant accessory in the fashion world

WHERE WE PLAY

ONLINE TO CONTINUE TO GROW FASTER OVER COMING YEARS

CAGR

Low OFFLINE single digits

ONLINE

Low double digits

BY 2030, GEN Z WILL MAKE UP THE LARGEST CONSUMER SEGMENT WORLDWIDE

Young,wealthy consumers value:

• Something crafted
• Unique
• Sustainable
• Experiential

A NEW CONSUMER

WHERE WE PLAY

No longer a nice-to-have but a must-have

Consumers are keen to make the switch to a trend that's here to stay

WHERE WE PLAY

OUR VISION & MANIFESTO

Have you ever wondered who's behind a pair of glasses? It's us, from Safilo. Looking ahead since 1878. Allowing millions of people to see the world at its best. Looking for innovative and responsible solutions, so that sustainability, inclusivity and innovation are not just nice words. And the ability to create value through this becomes our aim. This is the Safilo Way.

Safilo. See the world at its best.

Our strategy FOR A BALANCED PORTFOLIO

DIGITAL TRANSFORMATION & SUSTAINABILITY

OUR STRATEGY FOR A BALANCED PORTFOLIO

• ~20% Online channel
• ~12% B2B digital channel
• ~12% Sport channel

OUR AMBITIONS a s a % of 2027E sales ³

DIGITAL TRANSFORMATION & SUSTAINABILITY

ONGOING FOCUS ON OUR MAIN CHANNELS, WHILE ACCELERATING ON:

STRONG OMNI-CHANNEL BUSINESS MODEL

DYNAMIC GEOGRAPHICAL MIX

DIGITAL TRANSFORMATION SUSTAINABILITY

&

OUR AMBITIONS a s a % of 2027E sales ³

Emerging markets ~20%

ONGOING FOCUS ON OUR STRONG PRESENCE IN NORTH AMERICA AND EUROPE, WHILE ACCELERATING ON:

STRONG BRAND PORTFOLIO

• Home brands
• M&A

>50%

DIGITAL TRANSFORMATION & SUSTAINABILITY

ONGOING FOCUS ON A DIVERSE SET OF LICENSES, WHILE ACCELERATING ON:

OUR AMBITIONS a s a % of 2027 E sales ³

•	The right offer for all distribution channels, for all customer types
•	Centered on contemporary segment where the highest demand of eyewear is
•	Broad based offer across genders, ages, categories & price segments
•	Appealing to the most fashion-driven consumers and functional for the more traditional
	ones
•	Assuring trends (sustainability, outdoor, celebrities and digital) and service (size, fit, optician-friendly features)

TO REACH A BROAD AUDIENCE OF TARGET CONSUMERS

STRONG BRAND PORTFOLIO

OUTDOOR

SPECIALIST

LIFE STYLE

STRONG CORE HOME BRANDS

CONSUMER FIRST

Consumers at the core of Brand Development with top Partners

DIGITAL MEDIA CENTRIC

A new model for media effectiveness thanks to full funnel integration

PEOPLE ENGAGEMENT & CULTURE

From Global Strategy to Local Deployment

OMNICHANNEL

Smith and Blenders leveraging each other distribution footprint

Advantage Seekers Culture Seekers

SMITH MISSION

To equip all Seekers for a lifetime of adventure

Adventure Seekers

A SNOW MARKET LEADER

#1 SNOW GOGGLE & HELMET BRAND IN NORTH AMERICA

Our aim is to "own the head"

We are technology / innovation

We are goggles, helmets, protection

SMITH IS MORE THAN SNOW

PERFORMANCE SUNGLASSES

BIKE HELMETS & EYEWEAR

SMITH PRODUCT PORTFOLIO

EYEWEAR ACCELERATION 2

BIKE GROWTH 3

GEOGRAPHIC & CHANNEL EXPANSION 1

SMITH

SMITH STRATEGY INTO ACTION

CARRERA

CARRERA

AUTHENTIC LEGACY OF BOLDNESSI

TALKABLE DARING ATTITUDE I

DESIGNED FOR CUSTOMERS & CONSUMERS

3 3IN MARKET ACTIVATION

#DRIVEYOURSTORY CAMPAIGN IDEA

We tell true stories of real people who have found their own self following their passion. Each own of them tells a unique story, and together they create the Carrera world, exclusive and unique.

REAL PEOPLE WITH A PASSION

REAL PEOPLE WITH A PASSION

IN SHOP DESIRABILITY

CREATING A GLOBAL PHENOMENON

THROUGH THE POWER OF COLLABORATION

Functional benefit

A SMART CHOICE

THE ORIGINAL POLARIZED SINCE 1937

A WORLD OF COLORS

Emotional benefit

POLAROID

ENABLING MILLIONS TO SEE BETTER AND LIVE BETTER

3 IN MARKET ACTIVATION

DRIVEN BY IMPULSE. VIRAL AT THE HEART.

POLAROID

THE POLAROID RIVIERA.

Polaroid has created a world of colours, fun and inclusiveness. Where people are happy together, and can enjoy a great time in the sun. Where anyone can be at his/her best simply being him/her self.

ENJOY A WORLD OF COLORS

POLAROID

IN SHOP DESIRABILITY

PEOPLE ENGAGEMENT

//64POLAROID PEOPLE ENGAGEMENT

DOMESTIC & INTERNATIONAL ONLINE

BLENDERS STRATEGY INTO ACTION

1

DIGITAL TRANSFORMATION Our enablers

ALONG THE VALUE CHAIN

Our goals

• Engage Consumers & Customers
• Empower Employees
• Optimise Operations

CONSUMERS & CUSTOMERS

DIGITAL TRANSFORMATION

DIGITAL TRANSFORMATION

DIGITAL TRANSFORMATION

DIGITAL TRANSFORMATION

PORTLAND

2 DIGITAL HUBS

FOCUS ON CONSUMERS

Digital Academy

FOCUS ON CUSTOMERS

Data Analytics

Consumer Facing

Omnichannel

Digital Strategic Communication

B2B through

DIGITAL TRANSFORMATION

CUSTOMERS EXPERIENCE & SALES

OUR B2B DIGITAL CHANNEL DESIGNED WITH OPTICIANS FOR OPTICIANS

MORE THAN AN ECOMMERCE PLATFORM

Hybrid sales model

Roll out You&Safilo in North America

• Go beyond sales
• Further customer adoption in Europe

CUSTOMERS EXPERIENCE & SALES

OUR B2B DIGITAL CHANNEL DESIGNED WITH OPTICIANS FOR OPTICIANS

How likely is it that a Customer would recommend Safilo as a Business Partner

NPS: 66.6% (EMEA 81.1%)

How satisfied are Customers with Safilo overall with a scale from 1 to 5

OVERALL SATISFACTION: 4.4 (EMEA 4.5)

Source: Amplitude Research for NA; Unicab for EMEA, 2022 CSI survey

CUSTOMERS'PERCEPTION

Our enablers SUSTAINABILITY

PARTNER

BIC Customer Satisfaction Trusted License Partnerships Orchestrating for Success

• Robust Governance
• Systems & Processes
• Report & Reward

PLANET

Fashion Pact adherence science-based targets (SBTi) CO2 Scope 1&2 -70% by 2030 CO2 Scope 3 -20% by 2030 100% renewable energy by 2030 Plastic reduced or recycled

OUR SUSTAINABILITY JOURNEY

PEOPLE

Employee Survey 2023 Engagement Focus Areas Meaningful Community Outreach

PRODUCT

Sustainable New Collections >25% by 2025 Certified sustainable materials

// 80

Innovative in our PRODUCT

Caring for our PLANET

UN SDGs:

UN SDGs:

UN SDGs:

UN SDGs:

Our MEDIUM-TERM TARGETS

2027E NET SALES

Home brands mid to high single digit

M&A 1% of growth

in € and @cFX 2022

~ 1,3 bn ̴4% 5Y CAGR

New channels (Online , B 2B, Sport) double digit

KEY DRIVERS

2027E ADJ.2 EBITDA MARGIN

//82 //84

% on net sales

12-13%

KEY DRIVERS

Gross margin driven by portfolio mix and cost optimization Higher

Marketing investments

Operating leverage

2027E FREE CASH FLOW

//83 // 85

Positive FCF

over the plan period

KEY DRIVERS

Higher

Cash conversion due to improved economics and more moderate WC absorption

Capex in an annual range of €15-20M + M&A

Appendices

NOTES TO THE PRESENTATION

• 1 Organic sales performance is provided at constant exchange rates and includes only the home brands and not terminated licenses, present in both of the compared periods, excluding the business attributable to the supply contract with Kering Eyewear.
• 2 In 2022, the adjusted economic results excluded net non-recurring costs for Euro 5.0 million (Euro 4.4 million at the EBITDA level), due to some special projects costs and restructuring expenses, partially offset by the release of a restructuring provision. In Q4 2022, the adjusted EBITDA excluded non-recurring cost for Euro 2.7 million.

In 2021, adjusted economic results excluded non-recurring costs for Euro 23.8 million (Euro 10.9 million at the gross profit level, and Euro 19.2 million at the EBITDA level), mainly related to the closure of the Ormož production plant in Slovenia, and also a nonrecurring income of Euro 17 million due to the release, booked in Q2 2021, of a provision for risks and charges in relation to an investigation by the French Competition Authority. The release was a result of the positive outcome, without sanctions, of this investigation. In Q4 2021, the adjusted EBITDA excluded non-recurring costs for Euro 1.8 million (Euro 0.7 million at the gross profit level).

• 3 Net sales excluding the business attributable to the supply contract with Kering Eyewear.
• 4 Pro-forma performance, including Blenders and Privé Revaux as if their acquisition had occurred on January 1, 2018.

2022 NET SALES BY GEOGRAPHICAL AREA

					Change at current forex	Change at constant forex
(Euro million)	FY 2022	%	FY 2021	%	Reported	Reported	Organic1
North America	497.7	46.2	466.2	48.1	+6.8%	-4.7%	-0.3%
Europe	424.9	39.5	378.5	39.0	+12.3%	+12.0%	+16.1%
Asia Pacific	57.7	5.4	52.6	5.4	+9.8%	+3.4%	+13.1%
Rest of the world	96.4	8.9	72.4	7.5	+33.1%	+21.1%	+17.0%
Total	1,076.7	100.0	969.6	100.0	+11.1%	+4.2%	+7.7%
					Change at current forex	Change at constant forex
(Euro million)	Q4 2022	%	Q4 2021	%	Reported	Reported	Organic1
North America	114.3	46.6	111.0	47.8	+3.0%	-7.5%	-4.7%
Europe	92.2	37.6	87.4	37.6	+5.5%	+5.1%
Asia Pacific	16.4	6.7	15.4	6.6	+6.5%	+3.3%	+8.5% +4.4%
Rest of the world	22.5	9.2	18.4	7.9	+22.1%	+10.5%	+0.4%

2022 NET SALES BY PRODUCT

PRESCRIPTION FRAMES SPORT & OTHER SUNGLASSES

+1.1% @cFX +9.0%1

FY 2022

+9.4% +3.2% @cFX +2.0%1

+33.4% +22.0% @cFX +22.2%1

2022 INCOME STATEMENT

Key Economic highlights - in Euro million	2022	% on net sales	2021	% on net sales	% Change 2022 vs 2021
Net sales Reported at cFX Organic1 at cFX	1,076.7		969.6		+11.1% +4.2% +7.7%
Gross profit	597.4	55 5%	501.8	51 7%	+19.1%
EBITDA	96.8	9 0%	79.3	8 2%	+22.1%
Adjusted2 EBITDA	101.2	4% 9	81.5	4% 8	+24.2%
Operating result	48.5	4 5%	26.1	2 7%	+85.8%
Adjusted2 operating result	53.5	0% 5	32.9	4% 3	+62.8%
Group net result	54.2	0% 5	21.3	2 2%	+154.6%
Adjusted2 Group net result	58.3	4% 5	27.4	2 8%	+112.6%
IFRS 16 impact on EBITDA IFRS 16 impact on Operating result	11.8 1.5		11.6 1.7
IFRS 16 impact on Net result	(0.4)		0.2

Q 4 2022 TRADING UPDATE

Key Economic highlights - in Euro million	Q4 2022	% on net sales	Q4 2021	% on net sales	% Change
Net sales	245.4		232.2		+5.7%
Reported at cFX					-0.6%
Organic1 at cFX					+0.7%
Gross profit	139.1	56 7%	120.9	52 0%	+15.1%
EBITDA	13.3	4% 5	10.9	4 7%	+21.9%
Adjusted2 EBITDA	15.9	6 5%	12.7	5 5%	+25.3%
IFRS 16 impact on EBITDA	3.2		2.9

BALANCE SHEET A S OF DECEMBER 31 , 2022

in Euro million	December 31, 2022	December 31, 2021	Change
Net working capital	292.3	214.9	77.4
Tangible, Right of Use, and Intangible fixed assets	281.1	294.2	(13.1)
Goodwill	34.9	32.9	2.0
Non-current assets held for sale	2.3	2.3	0.0
Other assets / (liabilities), net	(58.3)	(84.2)	25.9
Net invested capital	552.3	460.0	92.3
Net financial position	(113.4)	(94.0)	(19.4)
Group Shareholders' equity	(409.9)	(326.7)	(83.2)
Non-controlling interests	(29.0)	(39.3)	10.3

WORKING CAPITAL A S OF DECEMBER 31 , 2022

in Euro million	December 31, 2022	December 31, 2021	Change
Trade receivables	214.0	173.5	40.5
Inventories	259.0	234.4	24.6
Trade payables	(180.7)	(193.1)	12.4
Net working capital	292.3	214.9	77.4
sales % net on	27 1%	22 2%

2022 FREE CASH FLOW

in Euro million	2022	2021
Cash flow from operating activities before changes in working capital	71.5	38.1
Changes in working capital	(62.4)	(20.8)
Cash flow operating activities	9.2	17.3
Cash flow investing activities	(15.7)	(9.8)
Cash flow from repayment principal portion of IFRS 16 lease liabilities	(10.0)	(10.3)
Free Cash Flow	(16.5)	(2.7)

EXCHANGE RATES

		As of		(Appreciation)/ Depreciation	Average for		(Appreciation)/ Depreciation
Currency	Code	December 31, 2022	December 31, 2021	%	2022	2021	%
US Dollar	USD	1.0666	1.1326	-5.8%	1.0531	1.1827	-11.0%
Hong-Kong Dollar	HKD	8.3163	8.8333	-5.9%	8.2451	9.1932	-10.3%
Swiss Franc	CHF	0.9847	1.0331	-4.7%	1.0047	1.0812	-7.1%
Canadian Dollar	CAD	1.4440	1.4393	0.3%	1.3695	1.4826	-7.6%
Japanese Yen	YEN	140.6600	130.3800	7.9%	138.0274	129.8767	6.3%
British Pound	GBP	0.8869	0.8403	5.6%	0.8528	0.8596	-0.8%
Swedish Krown	SEK	11.1218	10.2503	8.5%	10.6296	10.1465	4.8%
Australian Dollar	AUD	1.5693	1.5615	0.5%	1.5167	1.5749	-3.7%
South-African Rand	ZAR	18.0986	18.0625	0.2%	17.2086	17.4766	-1.5%
Russian Ruble	RUB	78.4308	85.3004	-8.1%	73.5002	87.1527	-15.7%
Brasilian Real	BRL	5.6386	6.3101	-10.6%	5.4399	6.3779	-14.7%
Indian Rupee	INR	88.1710	84.2292	4.7%	82.6864	87.4392	-5.4%
Singapore Dollar	SGD	1.4300	1.5279	-6.4%	1.4512	1.5891	-8.7%
Malaysian Ringgit	MYR	4.6984	4.7184	-0.4%	4.6279	4.9015	-5.6%
Chinese Renminbi	CNY	7.3582	7.1947	2.3%	7.0788	7.6282	-7.2%
Korean Won	KRW	1,344.0900	1,346.3800	-0.2%	1,358.0734	1,354.0570	0.3%
Mexican Peso	MXN	20.8560	23.1438	-9.9%	21.1869	23.9852	-11.7%
Turkish Lira	TRY	19.9649	15.2335	31.1%	17.40879	10.51237	65.6%
Dirham UAE	AED	3.9171	4.1595	-5.8%	3.86732	4.34361	-11.0%
Polish Zloty	PLN	4.6808	4.5969	1.8%	4.68611	4.56518	2.6%