ANNUAL REVIEW 2016 ANNUAL REVIEW 2016 Index

Letter to shareholders 5

1 Financial highlights 9 2 Luxottica Group 13

.1 Overview 14 .2 Mission & strategy 16 .3 Over 50 years of excellence 20 .4 From design to logistics 22 .5 Brand portfolio 28 .6 Distribution 34 .7 People 42 .8 Sustainability 44

3 Group results in 2016 47 4 Other information 53 Dear Shareholders,

On January 16, 2017 we announced, together with Essilor, an historic agreement to combine our two companies and create a major integrated player in eyewear; a European champion with strong national roots between Italy and France and a shared culture of excellence and innovation.

We looked ahead, beyond the boundaries, leading the evolution of the industry for the benefit of our customers and consumers. By integrating unparalleled de- sign and the prestige of our brands with the best ophthalmic lenses and the most advanced digital technologies, we will offer innovative products and services of the highest quality.

The agreement with Essilor will allow us to accelerate the completion of our in- tegrated model by adding the last component to our value chain. Lenses and frames will be born as a single product right from conception through design and production.

This marks a new phase of planning and opportunity for the Group's future, but it would not have been possible without the important results we achieved in 2016, with the support of all of you.

This past year, we implemented initiatives and a strategic refocusing that improved the quality and competitiveness of the Group, and set the stage for continued revenue and profit growth.

The period of profound change which started with my collaborators two years ago has enabled the Group to broadly strengthen its position in any market and to be simpler, more efficient and employ a faster decision-making process.

Much has been done to enhance the brand portfolio, always at the center of our strategies, and its positioning in the market by introducing stricter trade policies in North America, streamlining our distribution in China and harmonizing prices in dif- ferent markets. These projects have impacted short-term results, but they will give us a boost in the medium and long term, preserving the integrity of our businesses.

2016 was also a year of major investments in our industrial infrastructure which is absolutely excellent, our retail network and our digital transformation. In just over six months we created three new large logistics-production hubs in Italy, the United

5 States and China, which incorporate the production of lenses and frames togeth- er, and streamlined our international logistics network to promote the efficiency, speed and quality of service to our clients. Our factories are centers of technologi- cal excellence, where craftsmanship coexists with the latest-generation automation and research and development excellence.

The pursuit of innovation guides all our choices. Every year we introduce approxi- mately 2,000 new models and, thanks to our innovation lab in the heart of Silicon Valley, we’re exploring new ideas and opportunities to seize the potential of each market. Recent achievements include further developments in Chromance and Prizm technologies which appear in Ray-Ban and Oakley sun lenses, the commer- cial launch of Radar Pace, Oakley’s first smart glasses and, for the first time in eye- wear, the introduction of Ray-Ban frames made with graphene.

The retail segment has grown not only in terms of size in North America and around the world, but also in terms of quality. In the last twelve months we have added approximately 1,000 new stores to our global network thanks to the acquisition of Salmoiraghi & Viganò and collaborations with brands such as Macy's and Galeries Lafayette. In 2017 we expect to add approximately 950 Óticas Carol stores in Brazil upon the closing of the announced acquisition. We have also invested significant resources to promote the omnichannel evolution of our retail network – innovating our e-commerce platforms and integrating them into our physical stores – and in- troduced more sophisticated tools for eye exams and digital marketing.

Today, Luxottica looks forward to the challenges and opportunities ahead with enthusiasm and the confidence that comes from being in the right position to address evolving competitive landscape. Geographic diversification, productive integration and organizational flexibility allow us to respond to change and every opportunity while realizing our vision: to provide the best products and service to our customers.

2017 will be another important year in our history and that of our industry. As always, we will face new challenges with determination, speed of execution and clear strategies.

April 2017

Founder and Executive Chairman of Luxottica

6 1Financial highlights

> Index

9 INDEX Key Figures FINANCIAL HIGHLIGHTS

Gross profit (millions of Euro)

Net sales Key figures 2012 4,650 2013 4,789

2014 5,078

2015 6,001

et sales 2016 5,932 (millions of Euro)

2012 7,086 Operating income 2013 7,313 (millions of Euro) Gross pro t Net sales

2014 7,652 2012 970

2015 8,837 2013 1,056

2016 9,086 2014 1,158

2015 1,376

2016 1,345

et sales by geographic area et sales by operating segment et income (millions of Euro) Operating income Gross pro t Net sales est of the orld holesale etail Latin America 2012 534 6% 3% 39% 61% 2013 545 Asia-Pacific 13% 2014 643

Euroe 2015 804 19% orth America 2016 851 59%

10 11 2Luxottica Group

.1 Overview .2 Mission & strategy .3 Over 50 years of excellence .4 From design to logistics .5 Brand portfolio .6 Distribution .7 People .8 Sustainability

> Index

13 INDEX Overview LUXOTTICA GROUP

Luxottica operates also one of the fastest grow- and sport channels with its “O” stores, offering ing managed vision care networks in the United Oakley-branded eyewear as well as apparel, States through EyeMed. footwear, backpacks and accessories designed for athletic lifestyles. Finally, retail brands includ- Overview Luxottica is home to Sunglass Hut, the largest ing Oliver Peoples, ILORI and The Optical Shops retailer of premium sunglasses in North America, of Aspen give Luxottica a foothold in the luxury Latin America, Asia-Pacific, South Africa, Europe space. and the Middle East. Additionally, Luxottica launched its new Ray-Ban retail concept in China Luxottica’s distribution channels are comple- Luxottica Group is a market leader in 2016. More than physical stores, they offer an in- mented by its e-commerce platforms, including teractive space created for consumers to embrace Oakley.com, Ray-Ban.com, SunglassHut.com and in the design, manufacture and distribution the unique Ray-Ban experience and culture. The Glasses.com. Oakley brand provides a powerful wholesale and of fashion, luxury, sports and performance retail presence in both the performance optics eyewear. Luxottica’s 2016 financial performance confirms the Company’s ability to continuously pursue growth while achieving key strategic and organizational goals.

The Company’s total net sales rose to over Euro 9 strong well-balanced brand portfolio are recog- billion, net income was Euro 851 million and head- nized throughout the world. Proprietary brands count as of year-end was over 80,000 employees. include Ray-Ban, one of the world's best-known eyewear brands, Oakley, one of the leading Founded in 1961 by Leonardo Del Vecchio, listed product design and sport performance brands on NYSE since 1990 and Borsa Italiana since 2000, globally, Vogue Eyewear, Persol, Oliver Peoples, Luxottica is a vertically integrated organization Alain Mikli and Arnette. Licensed brands include whose manufacturing of sun and prescription Giorgio Armani, Burberry, Bulgari, Chanel, Coach, eyewear is backed by a wide-reaching wholesale Dolce&Gabbana, DKNY, Michael Kors, Miu Miu, organization and a retail network located primarily Paul Smith, Prada, Ralph Lauren, Starck Eyes, in North America, Latin America, Asia-Pacific and Tiffany & Co., Tory Burch, Valentino and Versace. Western Europe. The Group’s wholesale distribution network covers Product design, development and manufacturing more than 150 countries across five continents for frames take place in Luxottica’s six production and has approximately 50 commercial subsidiaries facilities in Italy, three factories in China, one in providing direct operations in key markets. Direct Brazil and one facility in the United States devoted wholesale operations are complemented by an ex- to sports and performance eyewear. Luxottica also tensive retail network comprised of approximately has a small plant in India serving the local mar- 8,000 stores worldwide as of December 31, 2016. ket. In 2016, the Group’s worldwide production reached approximately 93 million units. Luxottica is a leader in the optical retail business in North America with its LensCrafters and Pearle Luxottica also has produced sun and ophthalmic Vision brands, in Australia and New Zealand with lenses for more than 20 years. The Company has the OPSM and Laubman & Pank brands, in Chi- increased its manufacturing capacity with the na with the LensCrafters brand, in Italy with the recent addition of three new laboratories in Eu- Salmoiraghi & Viganò brand and in Latin America rope, North America and Asia-Pacific which are with the GMO brand. In North America, Luxottica completely integrated with its logistics hubs. The also operates its licensed optical retail brands design and quality of Luxottica’s products and Sears Optical and Target Optical.

14 15 INDEX Mission & strategy LUXOTTICA GROUP

rather than just components. Vertical integration Direct distribution enables Luxottica to offer its of manufacturing was gradually accompanied by products in major developed and emerging mar- the expansion of distribution, first with wholesale, kets and achieve a unique understanding of con- then in 1995 with retail and later with e-commerce, sumer needs and tastes both globally and locally. Mission and by the creation of a key presence in the high This capability is viewed as a strength by fashion value-added businesses of lens processing. houses that come to Luxottica to produce their eyewear collections and access the Group’s global Direct control of the entire production platform and widespread distribution network. strategy makes it possible to verify the quality of both products and processes, introduce innovations, Development of a vertically integrated identify synergies and new operating methods business model and optimize service, quality and costs.

Incorporation - Luxottica was founded by Being a global leader in the design, manufacture Leonardo Del Vecchio in 1961. The Company VERTICAL INTEGRATION started out as a small workshop and operated and distribution of sun and prescription eyewear until the end of the 1960s as a contract producer with high technical and design standards, Luxottica’s of dyes, metal components and semi-finished goods for the optical industry. It gradually wid- mission is multi-fold: to improve the well-being and ened the range of processes offered until it had Product an integrated manufacturing structure capable Development satisfaction of its customers while simultaneously of producing a finished pair of glasses. In 1971, (Design & Engineering) creating value for its employees, its shareholders Luxottica’s first collection of prescription eye- wear was presented at Milan’s MIDO (an inter- and the communities in which the Group operates. national optics trade fair), marking Luxottica’s definitive transition from contract manufacturer to independent producer.

Manufacturing Expansion in wholesale distribution - In the early 1970s, the Company sold its frames exclusively Every collection and every frame is the result of Luxottica’s long-term strategy is to continue to through independent distributors. In 1974, after an ongoing R&D process that anticipates and in- expand in the eyewear and eye care sectors by five years of sustained development of its manu- terprets the needs, desires and aspirations of con- growing its various businesses, whether organi- facturing capacity, it started to pursue a strategy sumers all over the world. This process has become cally or through acquisitions. The Company will of vertical integration, with the goal of distributing more valuable as sun and prescription eyewear are continue to focus on the following strategic pillars: frames directly to retailers. The first step was the increasingly perceived as a desirable and expres- vertical integration, design and technological Logistics acquisition of Scarrone S.p.A., which had marketed sive accessory to complete one’s personal look. innovation, brand portfolio management, global the Company’s products since 1971 bringing with footprint, financial discipline and the develop- it a vital knowledge of the Italian eyewear market. Luxottica delivers on its mission through a vertical- ment of talented and committed employees. ly integrated business model with manufacturing Luxottica’s international expansion began in the excellence, focus on service and a geographically 1980s with the acquisition of independent dis- diversified footprint. This has led to greater ef- VERTICAL INTEGRATION tributors and the formation of subsidiaries and ficiency, flexibility and speed in product design, Distribution joint ventures in key markets. engineering, manufacturing, supply chain and One of the competitive advantages underpinning holesale etail logistics, and uncompromising quality. the Group’s past and future successes is the verti- commerce Luxottica’s wholesale distribution expansion cally integrated business model that Luxottica has focuses on customer differentiation, custom- The achievement of high standards in quality built over the decades. ized service and new sales channels, such as reflects the Group’s strong technical and manu- large department stores, travel retail and facturing expertise - the result of over 50 years The Group’s present structure, covering the entire e-commerce, as well as continuous penetration of experience - and its constant commitment to value chain, is the result of a far-sighted choice into new markets. technological innovation, style and design, the made by the Company’s founder and current ustomers study of changing consumer tastes and the inter- Executive Chairman, Leonardo Del Vecchio, who pretation of fashion trends. understood the potential of a vertical integration strategy when he decided to make entire frames

16 17 INDEX Mission & strategy LUXOTTICA GROUP

Eyewear, a new frontier of fashion - The acqui- became the world’s first significant eyewear man- Innovative thinking set the roots of Luxottica in GLOBAL FOOTPRINT sition of La Meccanoptica Leonardo in 1981, the ufacturer to enter the retail market, maximizing its early years, when the founder had a far-sight- owner of the Sferoflex brand and developer of synergies with its production and wholesale distri- ed vision to boost the growth of the Company Luxottica is committed to maintaining and an important flexible hinge patent, enabled the bution and increasing penetration of its products by vertically integrating the entire value chain. strengthening its leading position in the markets Company to enhance the design and quality of its through LensCrafters stores. Managing all stages of the production process where it operates. It also focuses on evaluating products and increase its market share. ensures the highest levels of product quality and opportunities to further penetrate emerging mar- Since 2000, Luxottica has strengthened its re- service. At the same time, direct distribution and kets, a key driver of its long-term growth strategy. From the late 1980s, eyeglasses, previously per- tail business by acquiring a number of chains, sales allow the Group to have direct relationships Luxottica aims at increasing its market presence ceived as mere sight-correcting instruments, including Sunglass Hut (2001), a leading retailer with its consumers. through stronger retail distribution while consoli- began to evolve into eyewear. An aesthetic of premium sunglasses, OPSM Group (2003), a dating its wholesale network and further growing focus on everyday objects and designers’ in- leading optical retailer in Australia and New Zea- Design and technological innovation its presence in e-commerce and omnichannel. terest in the emerging accessories market land, and Cole National (2004), which brought led Luxottica to embark on its first collabora- with it another important optical retail chain in Luxottica’s designs both reflect and influence tion with the fashion industry in 1988 by en- North America, Pearle Vision, and an exten- emerging fashion trends. The Group emphasises FINANCIAL DISCIPLINE tering into a licensing agreement with Giorgio sive retail licensed brands store business (Target on unique product design and the continuous de- Armani. The Company followed that initial collab- Optical and Sears Optical). In 2005, the Compa- velopment of new styles that appeal to the needs Luxottica has delivered solid sales growth, while oration with numerous others and with the acqui- ny began its retail expansion into China, where and desires of consumers. maintaining a strong focus on operating profitabil- sition of new brands, gradually building its current LensCrafters has become a leading brand in the ity, return on investment and cash flow generation world-class brand portfolio. country’s high-end market. In the same year, While wearable technology is in its early stages, in order to provide a solid basis for future growth. the Group also started to expand Sunglass Hut Luxottica has taken a leading role in exploring While it continuously invests in the business, Over the years Luxottica has launched col- globally in high-potential markets like the Middle and developing smart eyewear through part- the Company closely monitors working capital lections from names like Bulgari (1997), East, South Africa, India, Southeast Asia, Mexico, nerships with leading technology innovators. management and focuses on debt optimization Chanel (1999), Prada (2003), Versace (2003), Brazil, Europe and China. In 2011, Luxottica start- In October 2016, Luxottica and Intel launched to help further strengthen its financial position, Donna Karan (2005), Dolce&Gabbana (2006), ed its optical retail expansion in Latin America by "Radar Pace", Oakley branded smart glasses accomplish its key objectives, and ultimately im- Burberry (2006), Ralph Lauren (2007), Paul completing the acquisition of GMO, a leading with a voice-activated real time coaching system prove the rate of return for shareholders. Smith (2007), Tiffany & Co. (2008), Tory Burch retailer in Chile, Peru, Ecuador and Colombia. to improve the work-out experience and perfor- (2009), Coach (2012), Starck Eyes (2013), In 2016, Luxottica completed the acquisition of mance for runners and cyclists. Giorgio Armani (2013), Michael Kors (2015) and Salmoiraghi & Viganò, in which Luxottica has held PEOPLE Valentino (2017). a minority stake since 2012. Salmoiraghi & Viganò is one of the leading optical retail chains in Italy. BRAND PORTFOLIO MANAGEMENT Highly qualified, motivated and committed em- Moreover, in 1999 Luxottica acquired Ray-Ban, ployees are critical to the long-term success of the one of the world’s best-known sunglasses brands, A step further in the lens business - Luxottica Building strong brands that create enduring re- Company. Luxottica carefully manages the hiring along with its crystal sun lens technology. is already a global leader in lens manufacturing. lationships with consumers is key to Luxottica’s and training process with the goal of recruiting Ray-Ban, Oakley and Persol brands all carried a dis- sustainability in the future. The Company has a and retaining top talent. It also designs compre- In 2007, Luxottica acquired California-based tinctive know-how in sun lenses when Luxottica ac- strong and well-balanced brand portfolio that hensive succession plans to ensure effective de- Oakley, a leading sport and performance brand, quired them and the acquisition of LensCrafters in includes a number of proprietary and licensed velopment and continuity. which owned the Oliver Peoples brand and a 1995 brought an expertise in ophthalmic lenses. brands. Its composition is gradually modified license to manufacture and distribute eyewear In 2016, the Company took a step further into the by the acquisition of new brands and licensing Over the last decade, the Group has developed under the Paul Smith name. At the time of the lens business with new state-of-the-art production agreements, along with the removal of brands no a welfare system that is deep-rooted in its history acquisition, Oakley had its own retail network of facilities in Italy, the United States and China to longer deemed strategic. These actions are tak- and in its culture of responsibility and commit- over 160 stores. increase its production capacity for both sun and en in order to continually attract a wide range of ment to rewarding success. Luxottica invests in ophthalmic lenses. consumers around the world with different tastes the future of the Company by investing in the In 2013, Luxottica acquired Alain Mikli Interna- and lifestyles. Luxottica’s long-term objectives well-being and satisfaction of its employees, tional, a French luxury and contemporary eyewear remain consistent: to focus on leading, appealing which in turn boosts creativity, passion and col- company, which owned the Alain Mikli brand and INNOVATION brands, balance proprietary and licensed brands, laboration. the Starck Eyes license. As a result of the acquisi- avoid brand dilution and lengthen the average tion, Luxottica strengthened both its luxury brand The future of eyewear and all its untapped oppor- term of licensing agreements. portfolio and prescription offerings. tunities is a source of inspiration that drives the Group to create, experiment, refine and imple- Expansion in retail distribution - In 1995, ment new ideas, from the research of new mate- Luxottica acquired the United States Shoe Corpo- rials and product development to manufacturing, ration, which owned LensCrafters, one of North distribution and digital platforms. America’s largest optical retail chains. Luxottica

18 19 INDEX Over 50 years of excellence LUXOTTICA GROUP Over50 years ofexcellence

A first-class brand portfolio A vertically integrated business model

Acquisition Acquisition of OPSM leading of Oakley retailer in Australia and New Zealand Acquisition of Vogue Eyewear Acquisition Strengthening Acquisition Sunglass Hut of Cole National Latin America of Alain Mikli expansion retail in Mainland Producer Entry into Listing Entry into Listing on China and of frame wholesale on NYSE the managed Borsa Italiana Southeast Asia components distribution vision care business in the United States

1961 1971 1974 1988 1990 1995 1998 1999 2000 2001 2003 2004 2005 2007 2009 2011 2012 2013 2014 2015 2016

Starting optical Sunglass Hut Acquisition Acquisition Acquisition retail expansion expansion of Glasses.com of Persol of Ray-Ban in China in Spain and Portugal Entry into sun retail: acquisition Acquisition of Sunglass Hut of Tecnol in Brazil: starting the “made in Brazil” journey Launch Entry into Entry into optical of rst collection agreements retail: LensCrafters First step into Acquisition of prescription with the retail in Latin of Salmoiraghi eyewear fashion industry America: GMO & Viganò in Italy

20 21 INDEX LUXOTTICA GROUP From design to logistics

Luxottica’s vertically integrated business model and geographically diversified manufacturing footprint have led to greater efficiency and speed in product design, engineering, manufacturing and logistics, while maintaining uncompromising quality.

DESIGN from both market trends and their own transform designs into one-off pieces, imagination and creativity. In addition, crafted by hand with meticulous preci- Emphasis on product design and the the design team works directly with sion. These frame prototypes are then continuous development of new styles the marketing and sales departments, shared with the product department, are key to Luxottica’s success. During which monitor the demand for current which analyzes the necessary steps to 2016, Luxottica added approximately models, as well as general style trends bring the prototype to mass production. 2,000 new styles to its eyewear collec- in eyewear. tions. Each style is typically produced In the first phase of the cycle, the prod- in two sizes and five colors. uct department uses visual rendering PRODUCT DEVELOPMENT and 3D software to design new models The design of the Group’s products and the necessary equipment. The is the focal point where vision, tech- Product development is the next stage mold workshop then assembles the nology and creativity converge. Each of execution. equipment needed to make the com- frame expresses Luxottica’s core pre- ponents for the new model. The very cepts: innovation in style combined The research and development efforts first samples are assembled and under- with innovative materials, technolo- of Luxottica’s engineering staff play a go a series of rigorous tests required gies and processes, and unparalleled crucial role in the development process. by internal quality control procedures. craftsmanship. The design process Engineers are continuously looking for begins with Luxottica’s in-house de- new materials, concepts and technol- After the quality certification, the sales signers who work in an environment ogy innovations to apply to products samples are produced and subjected that promotes innovation, originality and processes in an effort to differ- to a new intensive series of tests to and a creative process where eyewear entiate them in the eyewear market. verify the quality of the engineering is interpreted as art, as an object to During the initial phase of the devel- and production. Finally, Luxottica de- put on display. They draw inspiration opment process, the prototype makers termines which of its plants is best

22 INDEX From design to logistics LUXOTTICA GROUP

suited to manufacture the product Five facilities are located in Northeast- In Brazil, the manufacturing facility in echnology breakdown and large-scale production begins. By ern Italy, where most of the country’s Campinas produces both plastic and using a launch calendar that focuses eyewear industry is based, and one metal frames for the local market. The Sedico hub was opened in 2001 on customer and geographic demand, near Turin. Shortly after Luxottica acquired the and is one of the most technically ad- Metal Injected Acetate the Group has been able to shrink facility in 2012, they launched the first 2015 vanced in the industry. In 2016, it man- product development timelines in Three manufacturing facilities in China locally designed and produced Vogue 2 aged approximately 30,000 orders per recent years. and a small plant in India collectively Eyewear collection for Brazilians, fol- day, including eyeglasses and spare represent another 46% of total pro- lowed by select Ray-Ban, Arnette, Metal Injected Acetate parts. The Sedico facility ships approx- 2016 duction output. From 1997 to 2001, Oakley and Armani Exchange collec- 2 0 imately 240,000 units daily to custom- MANUFACTURING Luxottica operated the Dongguan tions. In 2016, the Campinas plant ers in Europe, the Middle East, Africa, plant in China’s Guangdong province produced the remaining 3% of total select United States markets and the In 2016, Luxottica’s manufacturing fa- through a 50%-owned joint venture production output and approximately Group’s distribution centers in the rest cilities located in Italy, China, India, the with a Japanese partner. In 2001 the 50% of the eyewear sold by Luxottica Plastic frames are manufactured using Recently, Luxottica opened three new of the world, where they are then deliv- United States and Brazil, produced a Company acquired the remaining in the Brazilian market. either a milling or an injection mold- laboratories within its logistics hubs in ered to local customers. In addition, it combined total of approximately 93 mil- 50% interest and, in 2006, it further ing process. In the milling process, a Italy, the United States and China specif- manages customized services, such as lion prescription frames and sunglasses. increased manufacturing capacity in Automation and robotics computer-controlled machine carves ically for the production of ophthalmic Ray-Ban Remix, providing direct global Ongoing R&D and innovation has al- China through the construction of an frames from colored acetate slabs. lenses. These labs are in addition to the deliveries. lowed the Company to strengthen its entirely new facility. In 2010, Luxottica Luxottica has incorporated robotics, This process produces rims, temples six existing lens manufacturing facilities manufacturing processes, upgrade its began producing plastic sun lenses to automation, computing and big data and bridges that are then assembled, that have made Luxottica a competi- The Dongguan hub was opened in capacity at each of these facilities and be paired with frames that are man- into its manufacturing processes with finished and packaged. In the injec- tive player in the high-end ophthalmic 2006 and manages an average of improve the overall quality of its prod- ufactured in the same location. Soon a focus on value added activities. The tion molding process, plastic resins are lens business. Luxottica operates four 200,000 units per day. The growth in ucts. Automation is also key in boosting after, the Company integrated a new Group is developing a higher level of liquefied and injected into molds. The central labs in North America, includ- the Asia-Pacific region has made this the efficiency of Luxottica's productions. state-of-the-art plant, primarily dedi- automation and factory digitalization plastic parts are then assembled, coat- ing the Oakley Foothill Ranch facility, hub a strategic part of the Group’s dis- cated to frame details and decorations. to continuously improve speed, flexi- ed, finished and packaged. a lab in Latin America and the Eyebiz tribution network. Luxottica continues Manufacturing footprint bility, quality and productivity. joint-venture with Essilor in Thailand to invest in ways to improve services The Foothill Ranch facility in Califor- LENSES which serves the Australian market. and increase capacity in order to create Luxottica’s manufacturing footprint nia represents another 10% of total Products and materials even greater efficiencies in the region. includes six facilities located in Italy, production output and manufactures Luxottica has gradually developed an the center of Luxottica’s luxury eye- high-performance sunglasses, prescrip- FRAMES expertise in producing its own lenses LOGISTICS The Atlanta facility, opened in 1996, wear production, all of which com- tion frames and lenses and assembles in-house. Investments in breakthrough has consolidated several North Ameri- bine the tradition of Italian craftsman- most of Oakley’s eyewear products. Over the years Luxottica has progres- technology and processes, rigorous The Group’s distribution system, which ca-based facilities into a single state-of- ship with the speed and efficiency of Oakley apparel, footwear and certain sively diversified its technology mix testing and increasing synergies within serves both the retail and wholesale the-art distribution center located close modern automation. These factories goggles are produced by third-party from the traditional metal, plastic in- the Group have improved the quality businesses and links them to the pro- to one of the major airport hubs of the represent 41% of global production manufacturers. jection and acetate slabs to include al- of Luxottica’s lenses for sunglasses and duction facilities, is globally integrated United States. It serves both Luxottica’s output. uminium, wood, die casting and fabric eyeglasses over time. and fed by a centralized manufacturing retail and wholesale businesses in the inserts. Consumer needs are continu- platform. It provides daily monitor- North American market. This facility ously changing, which requires quick The Lauriano plant in Italy is a bench- ing of global sales performance and manages up to 160,000 units per day. technological adaptations. mark for the world of Luxottica sun inventory levels to meet local market Group production output lenses with its multiple roles: produc- demand. The Jundiaí facility, opened in 2013 in Luxottica’s manufacturing process for tion plant, research and experimental Brazil, offers targeted distribution ser- metal frames has approximately 70 lab dedicated to the latest innova- There are four main distribution hubs in vices to customers and serves the local Italy different phases, beginning with the tions, and logistics center delivering strategic locations serving the Group’s market. This facility manages approxi- 41% production of basic components such sun lenses to the rest of the Group. major markets: Sedico (Italy), Atlan- mately 26,000 units per day. United States as rims, temples and bridges using The Foothill Ranch facility also per- ta (United States), Dongguan (China) a molding process. These compo- forms a key role in the Group’s sun lens and Jundiaí (Brazil). They operate as In 2016, the Group made strategic in- 10% nents are then welded together to operations, manufacturing high-per- centralized facilities under a highly vestments to expand the current main Brazil form frames over numerous stages of formance sunglasses, prescription automated order management system, hubs in Sedico, Dongguan and Atlanta, 3% detailed assembly work. Once assem- frames and lenses and assembling which services other Group distribution while reducing the total number of bled, the metal frames are treated with most of Oakley’s eyewear products. In centers and, in some markets, ships distribution centers globally from 18 China + India various coatings to improve their resis- 2016, the Group incorporated a cut- products directly to customers, thereby to 13. The new hubs also include three 46% tance and finish, and then prepared for ting-edge color enhancing technology further reducing delivery times and new lens laboratories, creating inte- lens fitting and packaging. crucial for the Oakley PrizmTM and the keeping stock levels low. grated logistics and production hubs Ray-Ban Chromance lenses. between lenses and frames.

24 25 INDEX From design to logistics LUXOTTICA GROUP

In 2017, Luxottica will continue to eyewear products undergo extensive ANTI-COUNTERFEITING POLICY streamline its global network by clos- testing against standards established Luxottica Operations – Main facilities ing other facilities and concentrating its specifically for eyewear by ANSI (Z.80.3), Intellectual property is one of Luxottica’s activities at the four main hubs in order ASTM, Standards Australia Limited (AS most important assets and is protected to directly serve the final customer with 1067) and EU (EN ISO 12312 and EN through the registration and enforce- accelerated speed to market. ISO 12870). These standards relate to ment of its trademarks and patents product safety and performance and around the world. provide quantitative measures of optical A GLOBAL “CULTURE OF QUALITY” quality, UV protection, light transmission The Group’s commitment is demon- and impact resistance. strated through its ongoing anti-coun- United States The satisfaction of wholesale cli- terfeiting activities. Trademarks and ents and retail consumers is one of Luxottica manufactures high quality products from market leaders are in- Atlanta Luxottica’s primary and indispensable sun and ophthalmic lenses. Its lenses creasingly copied and the implementa- objectives. Achieving this objective are made from the high quality optical tion of a strong anti-counterfeiting pro- Foothill Ranch Italy depends on the continuous improve- material, using advanced lens technol- gram that leverages Luxottica’s global ment of every phase of the production ogy and aesthetic treatments, providing organization allows the Company to Agordo and distribution cycle. While increasing protection and visual clarity. maintain the equity of its authorized production capacity in both developed distribution network and send a strong Cencenighe and emerging countries, the Company To assure its quality standards world- message to wholesale and retail in- is pursuing a crucial goal: delivering wide and the right support for quality fringers that the Group will work fierce- Lauriano the same ”Made in Luxottica” quality improvement, Luxottica has four main ly to protect its intellectual property. everywhere in the world. labs in Italy, China, Brazil and the United Pederobba China States. Each lab is responsible for estab- Through a strong international inves- Brazil Regardless of location, a single quality lishing and maintaining the quality stan- tigative network the Company is able Campinas Rovereto Dongguan system is applied to product devel- dards in the region where it is located to identify key sources of counterfeit (São Paolo) opment, procurement, distribution, and supports activities in engineering, goods, assist local law enforcement in Sedico operational analysis and uniform and production and market feedback man- investigating these sources and, when Jundiaì measurable performance manage- agement. All of these labs conduct the applicable, file legal actions against the ment in the plants. same tests using the same equipment counterfeiters. and procedures which are developed Luxottica manufactures products of the and approved in the central Italian lab. Additionally, the Group continues to highest quality. Most of the equipment consolidate and strengthen its coop- is specially designed and adapted for In 2014, Luxottica’s Italian, Chinese and eration with customs organizations Primary service center the Group’s manufacturing process- US manufacturing facilities were grant- around the world, which helps to stop, Manufacturing Logistics hub es. This facilitates a rapid response to ed accreditation by the American As- seize and destroy hundreds of thou- (Ophthalmic lens laboratory + Logistics hub) customer demand and the observance sociation for Laboratory Accreditation sands of counterfeit goods each year. of strict quality control standards. The (A2LA) for performing ISO 8624 and teams regularly inspect semi-finished ISO 12870 tests on eyewear. The A2LA Luxottica is a member of the major The Group dedicates considerable TRACEABILITY THROUGH RFID technology which allows the Company products, verifying the feasibility of accreditation program provides formal global anti-counterfeiting organiza- efforts to monitoring the trafficking to verify the authenticity of the prod- prototypes in the design phase, con- recognition of the technical compe- tions, including the International Trade- of counterfeit goods through the in- Luxottica is constantly searching for ucts as well as the validity of resellers trolling standards in both the product tence and quality management utilized mark Association (INTA), the Quality ternet, and works actively to remove new ways to be more effective in the through a sensor (RFID tag) embed- development and production phases, in performing these specific tests. Brands Protection Committee (QBPC) counterfeit eyewear from certain pop- fight against counterfeit goods and the ded in the frame. The device contains subsequently checking for resistance and the INDICAM, an organization ular online auction platforms. It also expansion of the parallel market that key information to identify each indi- to wear and tear and reviewing optical Every year, Luxottica enhances the per- based in Italy. shuts down websites that violate its diverts goods to unauthorized sales vidual pair of glasses as it goes from properties in relation to type of use. formance criteria used in its standard intellectual property rights through channels. In this context, Luxottica production to its sales destination. The manufacturing processes and ma- tests and introduces new requirements. the sale of counterfeit products or the has developed GLOW (Guaranteed terials used by primary suppliers are As a result, the return rate for defec- unauthorized use of Luxottica’s trade- Luxottica Origin Worldwide), an in- also controlled and certified. tive merchandise manufactured by marks. novative traceability system based on Luxottica has remained stable at ap- RFID (Radio-Frequency IDentification) Luxottica designs products to meet proximately 1% in 2016. or exceed relevant industry standards for safety, performance and durability. Throughout the development process,

26 27 INDEX Brand portfolio LUXOTTICA GROUP Brand Established in 1975 and acquired in 2007, Persol, the iconic made in Italy eyewear Oakley is one of the leading product design brand, made its debut in 1917 and was ac- and sport performance brands in the world, quired by Luxottica in 1995. With its evoca- portfolio chosen by world-class athletes to compete tive name, meaning “for sun”, it is the proud at the highest level possible. The holder heir to a culture of excellence and crafts- of more than 800 patents, Oakley is also manship, a perfect alchemy of aesthetics known for its innovative lens technologies, and technology. The irresistible appeal of including High Definition Optics. Oakley timeless design and art-like quality makes Luxottica’s brand portfolio is one of the extended its position as a sports eyewear the brand a favorite in the world of cinema. brand into apparel and accessories, offer- largest in the industry with leading brands ing men’s and women’s product lines that both at a regional level and in particular appeal to sports performance, active and lifestyle consumers. segments and niche markets. Acquired by Luxottica in 2007, Oliver Peoples was founded in 1987 with its first store in West Hollywood and the introduc- tion of a retro-inspired eyewear collection. The portfolio is well-balanced between proprietary PROPRIETARY BRANDS Oliver Peoples frames are handcrafted from and licensed brands and it continues to evolve. the finest quality materials, in colors and In 2016, proprietary brands accounted for ap- Founded in 1992 and acquired by Luxottica styles exclusive to the brand. Frames are The presence of Ray-Ban, one of the world’s lead- proximately 68% of total sales of frames. Ray-Ban in 1999, Arnette is an active lifestyle eyewear manufactured in limited quantities and with ing lifestyle eyewear brands, and Oakley, a leader and Oakley eyewear, the two largest brands in brand that appeals to young and “forever deliberate anti-logo labeling which appeals in the sport and performance category, gives the Luxottica’s portfolio, accounted for approximately young“ consumers with an easy going style. to refined consumers. proprietary brand portfolio a strong base, comple- 27% and 11%, respectively, of the Group’s 2016 Key traits of Arnette are functional afford- mented by Persol, Oliver Peoples and Alain Mikli net sales. able quality designed for everyday use and in the high-end of the market, Arnette in the sport an authentic love for popular freestyle action market, and Vogue Eyewear in the fashion market. sports like surf and skate. Alongside the proprietary brands, the portfolio has over 20 licensed brands, including some of the most well-known and prestigious names in the Acquired by Luxottica in 2013, Alain Mikli global fashion and luxury industries. represents over 35 years of passion and know-how. In 1978, the designer Alain Mikli With its manufacturing and distribution know- began to use eyewear as a means to com- how, its experience in international markets and Timeless style, authenticity and freedom of Launched in 1973 under the same name municate personal style and trends. These direct retail operations supported by marketing expression are the core values of Ray-Ban, as the famous fashion magazine, Vogue became frames to see as well as to be seen. investment, Luxottica is the ideal partner for fash- a leader in sun and prescription eyewear Eyewear was acquired by Luxottica in 1990. ion houses and stylists seeking to translate their for generations. Since the introduction of The brand, which reflects the dominant style and values into successful premium eyewear the iconic Aviator model created for the fashion trends of the moment, offers a wide collections. Luxottica differentiates each design- aviators of the United States Army, Ray-Ban global assortment as well as local collections er’s offering to produce a broad range of models has been at the forefront of cultural change, for emerging markets. It has become a truly that appeal to a diverse group of consumers, life- becoming a symbol of self-expression, international contemporary fashion brand. styles and geographies. worn by celebrities and public figures all Launched in 1967, the Group’s original line around the world. The lifestyle brand joined best conveys the experience and tradition the Luxottica Group in 1999 after which that are its essence. Ray-Ban accelerated its growth and rede- fined its distribution.

28 29 INDEX Brand portfolio LUXOTTICA GROUP

Sferoflex, which joined the Group’s portfolio Created in the early 80’s by Giorgio Armani, Since its founding in England in 1856, Burberry Founded in 1941 as a family-run workshop in 1981, takes its name from the patented this label is designed for trendy customers has been synonymous with quality, as defined in a Manhattan loft, Coach has grown into a flexible hinge enabling the temples to con- who love the Armani DNA. Armani’s core by the endurance, classicism and functional- leading American designer and marketer of form to the shape and size of the face, thus elements are revisited in a modern take on ity that characterized its history. Burberry has fine accessories and ready-to-wear for wom- increasing the resilience of the frame itself fresh style, with innovative and colorful de- become a leading luxury brand with a global en and men around the world. Under license and ensuring perfect fit. signs that are distinguished by contemporary business. The eyewear collection, under since 2012, the Coach eyewear collection lines, shapes and materials. license since 2006, is inspired by the brand’s perfectly expresses the effortless New York innovative ready-to-wear and accessory col- style and the authentic American heritage of LICENSED BRANDS lections and incorporates recognizable iconic the Coach brand. elements for both men and women. Designer lines are produced and distributed through license agreements with major fashion houses. These agreements are exclusive contracts which typically have terms of between four and ten years, and may contain options for renewal. Under these license agreements, Luxottica is re- A|X Armani Exchange is the youthful la- Dolce&Gabbana is a luxury brand which quired to pay a royalty ranging from 5% to 14% bel created in 1991 by Giorgio Armani to Under license since 1997, Bulgari, the great draws inspiration from the roots and the au- and a mandatory marketing contribution of be- capture the heritage of the Armani brand Italian jeweler and master of colored gem- thentic values of its own DNA: Sicily, sensu- tween approximately 5% and 15% of net sales of through the lens of its young fashion-forward stones of international fame, represents ality and sartorial ability. Dolce&Gabbana’s the related collection. urban spirit. Modern bold shapes in original one of the most exclusive brands in eye- essence lies in its contrasting yet comple- shades reflect contemporary design with wear. Contemporary design, unique styles mentary features. The eyewear collection, Prada is the most significant license in Luxottica’s stylish details, even with an accessible price. and glamorous details are combined with under license since 2006, is characterized portfolio as measured by total sales. In 2016, sales superior quality. This brand is positioned by glamorous, unconventional shapes, pres- realized through the Prada, Prada Linea Rossa for the highest segment of eyewear as tigious materials and sumptuous detailing. and Miu Miu brand names together represented jewelry, with luxury Italian craftsmanship approximately 4% of Group sales. and bold style. Bulgari eyewear features precious materials such as gold, gemstones Armani Group and Austrian crystals and is carefully crafted in timeless designs. Under license since 2013, the Armani Group in- Characterized by lightweight materials and a cludes the following collections: DKNY is easy-to-wear fashion character- slender line, the Brooks Brothers collections ized by the energetic attitude of New York reflect the American brand’s iconic style. City: sleek, metropolitan, fun, fast and real. This is an accessible product line with clas- The brand caters to contemporary, urban, sic style that delivers high functionality and fashion-conscious women, addressing a quality. The original license agreement was In 1999, Luxottica was the first Company broad range of lifestyle needs, from work to signed in 1992. licensed to produce Chanel eyewear. The weekend, jeans to evening. Under license The Giorgio Armani brand has an incompa- Chanel eyewear collection, targeting luxu- since 2005, DKNY eyewear offers modern rable and timeless sense of style. Armani’s ry-oriented consumers, reflects the essential design at an accessible price, for wardrobe vision of the world of creative design is not characteristics of the brand: innovative cre- staples that are the perfect mix of quality, just about turning heads, but about leaving ations, fashion, elegance and refinement. value and style. a lasting impression. Pure lines, intrinsic ele- gance and care for details are the elemental concepts underlying all of Giorgio Armani’s iconic designs as well as of its eyewear styles.

30 31 INDEX Brand portfolio LUXOTTICA GROUP

Established in 1981, Michael Kors is an au- Established in Rome in 1960, Maison thentic contemporary fashion brand. Michael The Miu Miu eyewear collection was Starck Eyes joined Luxottica’s portfolio as Valentino is one of the highest expres- Kors eyewear, launched by Luxottica in launched with brand-new luxury position- part of the Alain Mikli acquisition in 2013. sions of couture savoir faire and the ex- 2015, offers a glamorous lifestyle for the ing in 2011 to align it with the brand’s other The unique Starck Eyes collection celebrates cellence that has made Italian products consummate jetsetter that is as sophisti- product categories. Miu Miu, which reflects minimalism and innovation through an ex- famous worldwide. The Ateliers in Palazzo cated as it is indulgent and as iconic as it is the essence of Miuccia Prada, is a brand for clusive technological revolution: the heart Mignanelli, the company's historic head- modern. Michael Kors’ eyewear collections fashion forward, seriously light-hearted and of the product is the patented Biolink®, a quarters in the heart of the Eternal City, capture the glamor and effortless sophisti- provocative women who aspire to a more screw-less hinge modelled after the hu- are where creativity and expertise meld cation for which the designer is celebrated, avant-garde and sophisticated lifestyle. man clavicle, which allows a full 360-degree in search of timeless elegance. Lightness, drawing upon signature details found in the movement for increased comfort and dura- grace and precious delicacy are the DNA brand’s most iconic designs. bility - biomechanics at the service of vision. of Valentino. The Valentino eyewear col- Ralph Lauren lections embodies the Maison’s timeless elegance in a perfect balance between tra- dition and innovation in full respect of the Under license since 2007, Ralph Lauren includes iconic values of the brand. The first eyewear the following collections: collection with Luxottica will be launched in 2017.

Founded in 1837 in New York City, Tiffany Launched in 1994 and licensed by Luxottica has a rich heritage filled with celebrated in 2007, the Paul Smith Spectacles brand Ralph Lauren has made an indelible imprint events, artists and milestones that live on to- includes prescription and sun eyewear fea- on the fashion world with his collections for day in legendary style. Luxottica was the first turing the whimsical yet classic designs and men and women. Today, his signature themes Company licensed to produce Tiffany’s eye- attention to detail that are synonymous with - Hollywood romance, town-and-country her- wear collection, which takes inspiration from Versace is a prestigious fashion and lifestyle one of Britain’s leading fashion designers. itage, cosmopolitan city-chic and Art Deco the most iconic jewelry collection, celebrat- brand and a symbol of Italian luxury world- glamor - extend into the world of Ralph Lau- ing stunning originality and enduring beauty. wide. It is designed for men and women who

ren eyewear. With sleek modernity and clas- The first collection was launched in 2008. desire a modern and glamorous style that Prada Group sic proportions, each pair is a vivid expression combines sophistication and sex appeal. of the designer’s elegant, sophisticated style. The eyewear collection, under license since Under license since 2003, the Prada Group in- 2003, bears the distinctive visual details the cludes the following collections: fashion house is known for.

Tory Burch is an American attainable luxury Prada represents the best of Italian culture Representing Ralph Lauren’s iconic status lifestyle brand that embodies the unique and tradition. It is one of the most inno- as a designer recognized throughout the sense of style of its chairman, CEO and vative, prestigious and widely recognized world, Polo Ralph Lauren reflects a celebrat- designer, Tory Burch. Launched in 2004 brands in the fashion and luxury goods in- ed vision of classic yet spirited American with her now iconic Reva ballet flats and dustries, with a keen attention to details and style for men and women. Timeless and the tunic, the brand further expanded into new trends. The Prada eyewear collection authentic, Polo Ralph Lauren is the enduring accessories, apparel and beauty. Known reflects this approach with unmistakable symbol of a modern-day American lifestyle: for her bohemian preppy aesthetic, Tory style, refined elegance and uncompromising easy, energetic, young and cool. Burch launched its eyewear collection with quality. The Prada collection also includes Luxottica in 2009. Her bold use of color, the Prada Linea Rossa line, which is inspired graphic prints and eclectic detailing are all by the world of luxury sports to convey an signatures of the brand. everyday casual yet sophisticated style.

32 33 INDEX Distribution LUXOTTICA GROUP

As of December 31, 2016, Luxottica’s retail busi- RETAIL BRANDS ness consisted of 7,158 stores and 819 fran- chised locations.

Distribution Luxottica’s retail stores sell not only prescription frames and sunglasses that the Group manu- Founded in 1983, LensCrafters pioneered a factures but also a wide range of frames, lenses revolutionary concept to combine eye care, and ophthalmic products manufactured by other eyewear and onsite labs to craft glasses in companies. In 2016, Luxottica’s proprietary and li- about an hour. Today, LensCrafters is the Luxottica’s global distribution network, censed brands represented approximately 89% of largest optical retail brand in North Ameri- the total net sales of frames by the Retail division. ca in terms of sales. including retail chains and a wholesale network Most LensCrafters stores are located in of third party stores, is one of the Group’s high-traffic commercial malls and shop- core strengths. It extends to both developed ping centers. A wide selection of premi- um prescription frames, sunglasses and and emerging markets, where it has made etail net sales high-quality lenses and optical products by geographic area made by Luxottica and other suppliers are substantial investments over the last few years. available in most locations. Each location has an experienced doctor, either an in- Latin America dependent or employed doctor of optom- 4% etry, who is focused on building patient orth America relationships. All of the stores have access Luxottica’s efficient distribution network makes it close contact with distributors in order to monitor Asia Pacific 29% 78% to the Group's state-of-the-art lens pro- possible to maintain close contact with customers sales and the quality of the points of sale. 12% cessing network with the ability to craft, while maximizing the visibility of the Group’s brand surface, finish and fit lenses. portfolio. In addition, the Group’s expertise in the In 2002, Luxottica introduced the STARS pro- retail business has given it a unique understanding gram within its Wholesale division, a true service As part of its underlying commitment to of consumer needs and tastes in key countries. All innovation that leverages Luxottica’s knowledge Euroe customer satisfaction and industry innova- of this helps the Company achieve tight control of local markets and brands to deliver fresh, tion, LensCrafters has made significant in- and strategic optimization of brand diffusion, for high-turnover products to customers and maintain 6% vestments in technology including AccuFit both proprietary and licensed brands. The Group optimal inventory levels at each point of sale. By Digital Measurement™, which provides a continues to invest in new channels of distribution, strengthening the partnership between Luxottica lens fit with five times greater precision than with a current emphasis on e-commerce. and its customers, this program directly manages traditional methods. LensCrafters contin- product selection activities, assortment planning ues its digital transformation in-store with and automatic replenishment of Luxottica’s prod- associate iPads to enhance the customer’s WHOLESALE ucts in the store, utilizing ad hoc systems, tools holesale net sales omnichannel experience, and a digital eye and state-of-the-art planning techniques. At the by geographic area exam experience, ClarifyeSM, in a growing The wholesale distribution network covers more end of 2016, STARS served approximately 7,500 number of locations than 150 countries, with approximately 50 com- stores in the major European markets, the United mercial subsidiaries in major markets and approx- States, the Middle East and emerging markets. est of the orld In 2006, Luxottica began to expand the imately 100 independent distributors in other less 8% LensCrafters brand in China by acquiring developed markets. Wholesale customers are orth America and then rebranding local retail chains in mostly retailers of mid to premium-priced eye- RETAIL Latin 29% Beijing, Shanghai, Guangdong and Hong wear, such as independent opticians, optical retail America Kong. In 2016, Luxottica opened approx- chains, specialty sun retailers, department stores, With a strong portfolio of retail brands, Luxottica 10% imately 80 LensCrafters stores in Macy's duty-free shops and online players. Certain brands, is well positioned to serve every segment of the department stores in the United States as including Oakley, are also distributed to sporting market with a variety of differentiation points, in- part of the agreement announced in 2015. goods stores and specialty sports locations. cluding the latest designer and high-performance As of December 31, 2016, the Group oper- frames, advanced lens options, advanced eye Euroe ated a retail network of 1,219 LensCrafters In addition to giving wholesale customers access care, everyday value and high-quality vision care Asia Pacific stores, of which 1,013 are in North America to some of the most popular brands and models, health benefits. 39% 14% and the other 206 stores are in China and Luxottica provides them with pre- and post-sale Hong Kong. services to enhance their business and maintains

34 35 INDEX Distribution LUXOTTICA GROUP

Acquired by Luxottica in 2004, Pearle Vision OPSM is a leading eye care and eyewear Luxottica operates David Clulow, a premi- Founded in 1971 as a small kiosk in a Miami is one of the largest franchised optical re- retailer in Australia and New Zealand with um optical retailer in the United Kingdom mall, Sunglass Hut has grown into one of tailers in North America. Built around the more than 80 years of history. Through its and Ireland. The brand emphasizes service, the world’s leading destinations for the most neighborhood doctor, Pearle Vision allows world-class technology and exceptional ser- quality and fashion. Its targeted marketing sought-after high quality and performance local business operators to provide trusted vice, OPSM’s goal is to raise the standard reinforces these brand values and builds sunglass brands. Stores can be found in eye care to their patients with the support of eye health and eye care. In addition to its long-term relationships with customers. In fashionable shopping districts across the and resources of the Pearle Vision brand. eye care services, OPSM is renowned for its addition to operating optical stores, David globe, from the Americas, Europe and the exclusive range of optical frames and sun- Clulow manages a number of designer sun- Middle East to Australia, South Africa, China As of December 31, 2016, Pearle Vision glasses from international brands. glass concessions in up-market department and Southeast Asia and beyond, provid- operated 107 corporate stores and had 425 stores, further reinforcing its position as a ing consumers with a fun, highly engaging franchises throughout North America. As of December 31, 2016, Luxottica operated premium brand in the United Kingdom. shopping experience. 306 corporate stores and 70 franchises. As of December 31, 2016, David Clulow Sunglass Hut has been expanding its pres-

operated 41 locations, one franchise and 74 ence in developed markets and emerging sun concessions. markets, including Brazil, Mexico, Chile, India and Southeast Asia. In 2016, Sunglass Hut became the exclusive operator of sun- glasses concessions in 57 Galeries Lafayette With the acquisition of Cole National in Laubman & Pank is renowned for high-quality and LE BHV MARAIS department stores 2004, Sears Optical and Target Optical, both eye care and personalized service in regional across France. Sunglass Hut offers a con- licensed brands operating within their host Australian markets. Founded in 1974 by the merger of two sistent and connected experience across all stores, became part of the Luxottica retail brands that were started respectively by customer touch-points including online, in- network. The two brands, each with their As of December 31, 2016, Luxottica man- Angelo Salmoiraghi and Angelo Viganò in store, social and mobile, and utilizes in-store own marketing positions within Luxottica, aged 25 corporate owned stores and 20 the mid-nineteenth century, Salmoiraghi digital tools to access to an “endless aisle” offer consumers the convenience of taking franchises throughout Australia. & Viganò is an Italian premium optical re- assortment in every store location. As part care of their optical needs while shopping at tail brand, with approximately 430 stores of this strategy, the brand is investing in the their preferred retailers. spread throughout Italy. Salmoiraghi & digitalization of the in-store shopping expe- Viganò became a part of the Group at the rience, particularly in North America, Brazil, As of December 31, 2016, Luxottica operat- end of 2016. the United Kingdom and Australia. ed 581 Sears Optical and 476 Target Optical locations throughout North America. As of December 31, 2016, Sunglass Hut op- GMO, an optical market leader in Latin erated a retail network of 3,269 stores world- America, became a part of Luxottica in wide, including 3,104 corporate stores across July 2011, following the acquisition of North America, Asia-Pacific, Europe, South Multiópticas Internacional. Since its be- Africa and Latin America and 165 franchised ginning in the late 1990s, GMO has de- locations mainly in the Middle East and India. veloped a reputation for optical retail ex- EyeMed Vision Care is the second largest cellence among consumers in Chile, Peru, vision benefits company in the United States, Ecuador and Colombia with its strong servicing approximately 47 million members Ópticas GMO and Econópticas retail in large and medium-sized companies, as brands. well as government entities. EyeMed mem- bers are enrolled through employer-spon- As of December 31, 2016, Luxottica op- sored benefits sold directly by EyeMed or erated 387 Ópticas GMO stores and 104 bundled with benefits offered by insurance Econópticas stores. companies. EyeMed offers the largest net- work of eyecare providers in the United States, including a diverse range of inde- pendent practitioners and retail locations that include Luxottica optical retail locations.

36 37 INDEX Distribution LUXOTTICA GROUP

E-COMMERCE

Luxottica offers consumers around the globe a Launched in 2008, SunglassHut.com has become superior online shopping experience that lives the digital destination for consumers looking to up to the same high as its bricks and mortar loca- find the latest trends and hottest premium sun- tions standards. glasses. Over the years, the United Kingdom, In 2016, Luxottica introduced a brand-new As of December 31, 2016, Luxottica op- Brazil, New Zealand and Mexico joined the United Ray-Ban retail concept, opening approx- erated 14 luxury retail stores under the Oakley, Ray-Ban and Sunglass Hut e-commerce States, Canada and Australia in offering online imately 50 new Ray-Ban stores in Main- Alain Mikli of which two are franchised. The websites serve as important sales channels that shopping on their local Sunglass Hut websites. land China, mainly converting certain of its stores are located in the most cosmopolitan complement Luxottica’s retail operations and Additionally, Sunglass Hut redesigned its mobile pre-existing LensCrafters locations. In the cities worldwide. wholesale distribution. The websites drive brand and desktop sites across all countries to enhance United States the Group opened a flagship awareness and allow consumers to purchase customer experiences, storytelling and business store in New York's Soho neighborhood. products efficiently, extending superior customer performance. Specific focus has been given to the More than physical stores, they offer an service into the digital space. implementation of omnichannel scenarios that al- interactive space created for consumers to low the Company to seamlessly engage consum- embrace the unique Ray-Ban experience Ray-Ban.com was launched in the United States ers across Sunglass Hut stores and the website. and culture. in 2009 and is home to the most extensive as- sortment of premium Ray-Ban, exclusive offerings Luxottica plans to bring its e-commerce strategy and a consumer experience that is unique to the to additional markets as the business matures. For brand. Currently, Ray-Ban.com operates in 27 example, the Group formed strategic partnerships countries. Ray-Ban Remix, the online customiza- in China to open both Ray-Ban and “O” stores Founded in the 1970s, The Optical Shop of tion platform first launched in Europe in 2013, is within Tmall, the world’s largest local online mall. Aspen is known in the eyewear industry for a key driver of the brand's e-commerce expansion its luxury prescription and sun eyewear and and its growing connection with millennials. Its Acquired in 2014, Glasses.com continues to serve As of December 31, 2016, the Group oper- its first-class customer service. As of Decem- success in allowing customers to personalize the as an innovation lab focused on improving the ated 330 Oakley “O” stores worldwide (in- ber 31, 2016, Luxottica operated 7 stores style, material, lens color, engraving and other eyewear e-commerce experience for consum- cluding 83 franchised locations), offering a in some of the most upscale and exclusive aspects of their Ray-Ban frames has led to Remix ers and patients and lending its capabilities to full range of Oakley products including sun- locations throughout the United States. launches in the United States, Canada and China Luxottica’s other retail brands. glasses, apparel, footwear and accessories. in 2014. Australia, Brazil, Japan and Hong Kong in These stores are designed and merchan- 2015 and Mexico in 2016. In 2016 Ray-Ban.com dised to immerse consumers in the Oakley introduced a 3D virtual try-on technology that brand through innovative use of product gives Ray-Ban fans the ability to virtually try on presentation, graphics and original audio thousands of frames and immediately find their and visual elements. preferred look. This technology renders images of each user with photo realism and matches them In the United States, Oakley “O” stores are with the image of the frame by pulling together in major shopping centers. Oakley’s retail a 3D model that can be used to quickly compare ILORI is Luxottica’s luxury sun retail brand, operations are also located in Latin America, different frames. The feature is available to mobile with 13 stores in North America as of De- Europe and the Asia-Pacific region. US users and in 2017 will be rolled out globally cember 31, 2016, including flagship stores and made available also to desktop users. in SoHo, New York and Beverly Hills, Cal-

ifornia. ILORI caters to an elite clientele, Oakley.com provides a digital window into the offering highly-personalized service and Oakley brand, presenting the most comprehen- exclusive brands and collections. sive assortment of Oakley products globally and an e-commerce channel across multiple markets including the United States, Canada, Australia, As of December 31, 2016, Luxottica operated Japan, Brazil and 16 countries in Europe. Its online 24 luxury retail stores under the Oliver Peoples custom eyewear experience gives Oakley fans the name, which sell Oliver Peoples branded ability to customize their favorite models from products exclusively. Five Oliver Peoples Jawbreaker to Frogskins, selecting frame color, retail locations are operated under license. lens tint, personalized etching and other features.

38 39 INDEX Distribution LUXOTTICA GROUP

North America 4,708 Distribution network 2 1,875 Ray-Ban stores Sunglass Hut

20 1,013 Oliver Peoples LensCrafters (1 franchise) Approximately 50 7,977 retail stores 532 1 Pearle Vision wholesale subsidiaries (of which 819 franchises) Alain Mikli (425 franchises) AROUND THE WORLD AROUND THE WORLD 7 581 The Optical Shop of Aspen Sears Optical Sun Prescription 13 476 Sun/Clothing Prescription/Sun ILORI Target Optical Africa & Middle East Europe 188 Israel Austria Central & South Oakley stores South Africa Belgium America United Arab Emirates Croatia Finland 831 France Europe Asia-Pacific Americas Germany 491 Greece 1,005 929 GMO Argentina Hungary (including Econópticas) Brazil Italy 20 376 Canada Netherlands Oakley stores OPSM 327 Chile Norway (8 franchises) (70 franchises) Colombia Sunglass Hut Poland Mexico Portugal 41 45 United States 13 Russia David Clulow Laubman & Pank Oakley stores Spain (20 franchises) (all franchises) Asia-Pacific Sweden 4 Switzerland Alain Mikli 4 Australia Turkey (2 franchises) Oliver Peoples China United Kingdom (all franchises) Hong Kong 1 Greater China Africa & Middle East India Oliver Peoples 9 Japan 306 198 Alain Mikli Malaysia 431 Singapore Salmoiraghi & Viganò 206 191 102 South Korea LensCrafters Sunglass Hut Oakley stores Thailand 434 (51 franchises) (55 franchises) Sunglass Hut 49 393 Sunglass Hut 74 7 Sunglass Hut David Clulow 51 Oakley stores (78 franchises) Ray-Ban stores (all franchises)

40 41 INDEX People LUXOTTICA GROUP

Given the results achieved in organizational ef- fectiveness and the positive impact on employee Distribution of employees engagement, in 2016 the Group decided to by geographic area continue the Pulse Survey, the tool Luxottica uses to measure the feedback culture within the iddle East People South Africa Company. All managers, in partnership with local Latin America HR teams in each geography and business units, 6.7% 0.8% have continued to hold regular ‘‘Meaningful Con- orth America versations’’ with their staff. As measured in the Euroe 50.7% 2016 survey, at least 88% of respondents said they 17.5% As of December 31, 2016, Luxottica Group had 82,282 had had a Meaningful Conversation with their managers in the past three months. These results 82,282 employees, of which 58.3% were dedicated to the retail were aided by training and promotion activities as Employees business, 11.4% to the wholesale business and 29.7% well as a new global community dedicated to all Luxottica employees called IMPACT, a personal to production activities. Corporate based in Milan and professional growth opportunity to increase Asia-Pacific represent 0.6% of the total Group workforce. one’s personal impact in the Company. 24.3% In terms of geographic distribution, 50.8% of the total The Code of Ethics

Luxottica workforce operates in North America, 17.5% In 2016, all Group geographies were involved in Distribution of employees a global effort to support the Luxottica Code of by business area in Europe, 24.3% in Asia-Pacific, 6.6% in Latin America Ethics. Starting in March, all employees were in- and 0.8% in the Middle East and South Africa. vited to a series of training initiatives, designed and delivered by local HR teams. These initiatives Corporate ranged from face-to-face trainings to online cours- 0.7% es and were all completed by a final Learning Retail Wholesale Questionnaire to test the effectiveness of the 58.3% The success of Luxottica and its Human Resourc- A desire for strong leadership at every organi- training. Approximately 80% of the Group's em- 11.4% es strategy in 2016 was based on the following zational level resulted in the launch of several ployees successfully completed the training and elements: a dedicated focus on the employee, regional initiatives coordinated by the Corporate the Learning Questionnaire which showed great 82,282 development of key skill sets, realization of career Learning & Development Team. The Group con- awareness about the contents and principles of Employees potential and a merit-based work environment cluded the Personal Excellence program which our Code of Ethics. free of discrimination. The strategic pillars set started in 2015, and targeted the most talented Operations forth above are detailed in the initiatives and ac- leaders in the organization. This nine-month pro- 29.6% tivities described below. gram offered three training modules where senior managers, in order to continue to develop in their role, focused on their own leadership style and DEVELOPMENT AND ORGANIZATIONAL acquired additional managerial skills. At regional WELLNESS INITIATIVES level, two other initiatives were further promoted: the Leadership Lab, which helps managers from Personal and professional development different businesses across Europe create their own authentic leadership style by developing In 2016, Luxottica further developed its initiatives self-awareness, personal vision and their ability supporting professional requirements planning to enhance team performance, and the Coach- and technical and managerial career develop- ing Academy, which focuses on strengthening ment. It also consolidated strategies at the region- coaching skills in middle managers to support a al level, directing greater attention to the specific culture of feedback within the different regions. In needs of management and teams in different 2016, two editions of the Coaching Academy took markets. New initiatives were launched to sup- place, one in North America and one in Greater port functional and organizational development, China. such as the International Finance Academy, held in April 2016 where an international group of 28 Finance and Control professionals participated.

42 43 INDEX Sustainability LUXOTTICA GROUP

The environment is a crucial factor in Luxottica’s High quality glasses and lenses, the result of vision of sustainability. The Company was founded continuous design, material and technology inno- in what is today the National Park of the Belluno vations, are complemented by the cutting-edge Dolomites. The attention and respect the Group ophthalmic treatments available in the Group’s Sustainability pays to this land of extraordinary beauty and uni- optical retail stores around the world. versal value, declared a UNESCO World Heritage Site, is part of its DNA and has accompanied its Luxottica is committed to addressing the growing growth over time. Therefore, the desire to pre- demand for eyecare by delivering fashionable #TOSEETHEBEAUTYOFLIFE serve resources and promote the beauty of nature eyewear collections that are essential for improv- and the landscape, reducing the impact of its ing and protecting eyesight, as well as emphasiz- activities on the environment, has deep roots and ing the beauty of the eyes and communicating Is the Luxottica vision that inspires its sustainable strong reasons behind it. And every day it inspires one’s unique style. the sustainable actions and decisions taken in all business approach and an integral part the countries where the Group operates. of the Group’s strategy. It stems from a notion SOCIAL EQUITY Due to its pragmatic and uncompromising approach of universal beauty, visible to everyone, that assumes focused on excellence, the Group has set increas- Since the beginning, Luxottica has stood out as a ingly challenging sustainability goals for itself that go socially responsible company, ready and able to a tangible form in the search for a balance between beyond the standards required by regulations, draw- respond to changes and the emergence of new well-being, respect for the environment, ethics ing on best practices from the international arena. requirements with innovative solutions. This is a role it will play in an increasingly insightful manner and the transparency of relations. Luxottica’s vision of sustainability is founded on four to promote well-being and social equality in the pillars that correspond to specific commitments countries where it operates, as well as the profes- and concrete initiatives. When defining these pillars sional and personal growth, health and safety of the Group took much of its inspiration from two of its employees. the most recent milestones: the UN 2030 Agenda, which established the sustainable development o see goals to be met by 2030, and the Paris Climate PROTECTING ENVIRONMENT ommitment isual Social Protecting the beauty Change Conference (COP21), which defined a glob- to excellence wellbeing euity environment of life al action plan to avoid dangerous climate change by For Luxottica environmental sustainability is rooted limiting global warming to well below 2ºC. in its bond with the communities where it operates, which it has protected and promoted since the construction of its first building in Agordo among COMMITMENT TO EXCELLENCE the Belluno Dolomites, now a National Park.

Luxottica has always strived to make the best Leveraging on the excellence of the Group, In its continuous quest for excellence, Luxottica’s This is an important responsibility that involves eyewear in the world, innovative in design and Luxottica makes an increasingly greater contribution ability to reinvent itself and innovate responsibly the entire organization in its various business ar- excellent in quality, so people can enjoy the beau- to the economic and social progress of the com- are part of the Company’s story and character- eas and locations. Technological innovation and ty of life in every aspect of the world. A world to munities in which it operates, the protection of the istic of its business approach. This commitment the ongoing investments aimed at improving understand, protect and promote. environment and the promotion of the territory, thus can be seen everywhere and shapes Luxottica’s activities and processes make the entire value forming a connection between its economic and long-term goals and success. It is a reflection of chain increasingly sustainable in terms of water

This is the beauty of looking ahead and seeing a financial results and the creation of shared value. the Group’s untiring desire to keep evolving and and energy consumption, CO2 emissions, and the better future; the beauty of defining one’s person- improving while staying faithful to its principles. production and recycling of waste. al style in a creative and informed way; the beauty Evidence of this vision is found in the Code of of eyewear designed for both seeing and seeing Ethics, which outlines the key principles and val- ourselves in the best possible light. For Luxottica, ues that inspire Luxottica’s ethical and responsible VISUAL WELL-BEING there is beauty in sustainability. way of doing business. Due to its fundamental importance, the Code is applied to all companies, Luxottica promotes the well-being and health of In fact, sustainability in its wider meaning - envi- geographies and functions of the organization, the eyes through the quality of its products and its ronmental, social, economic - is a principle that and must be adopted by all stakeholders that world-class customer service in stores and online. has deep roots in the Luxottica story, becoming have direct relations with Luxottica, including em- part of the company culture over the years and ployees, partners and suppliers. permeating the entire value chain.

44 45 3Group results in 2016

> Index

47 INDEX Group results GROUP RESULTS IN 2016

REPORTED RESULTS FOR FULL YEAR 20161

Change at constant Change at current Group (Millions of Euro) FY 2015 FY 2016 exchange rates(2) exchange rates Group net sales 8,837 9,086 +3.9% +2.8% Wholesale division 3,593 3,528 -0.4% -1.8% Retail division 5,244 5,558 +6.8% +6.0% results Operating income 1,376 1,345 - -2.3% Net income attributable 804 851 - +5.8% to Luxottica Group stockholders Earnings per share 1.68 1.77 - +5.8% 2016 was another year of growth for Luxottica Earnings per share in US$ 1.86 1.96 - +5.6% Group. Consolidated sales rose to more than Euro ADJUSTED3,5 RESULTS FOR FULL YEAR 20161 9 billion, accelerating in the fourth quarter compared to the first nine months of the year. The Group Change at constant Change at current (Millions of Euro) FY 2015 FY 2016 exchange rates(2) exchange rates reached a record high for its net profit of Euro 851 Group adjusted net sales 9,011 9,086 +1.9% +0.8% million on a reported basis and Euro 882 million Wholesale division 3,593 3,528 -0.4% -1.8% on an adjusted basis3,5. Retail division 5,418 5,558 +3.4% +2.6% Adjusted operating income 1,443 1,432 - -0.7% Adj. net income attributable 854 882 - +3.3% to Luxottica Group stockholders Adj. earnings per share 1.78 1.84 - +3.3% Over the past year, the Group initiated a phase of These include the creation of three new large Adj. earnings per share in US$ 1.98 2.04 - +3.1% profound change to strengthen its vertically inte- logistics-production hubs that integrate the pro- grated business model and foster organizational duction and distribution of lenses and frames in simplification, speed up decision making and exe- Italy, the United States and China. The Group cution of strategies and improve efficiency and in- also continued to expand into new markets, to tegration of the various business areas, including evolve the omnichannel experience of its retail the integration of Oakley's sports channel. network, and to strengthen digital marketing and GROUP PERFORMANCE FOR THE FULL On the upside, the Retail segment delivered net innovate its e-commerce platforms, thanks to the YEAR 20161 sales growth of 3.4% at constant exchange rates2 Luxottica also implemented several important ini- progressive roll-out of in-store digital windows and (+2.6% at current exchange rates). The Group's tiatives to improve the quality of sales and protect the evolution of the Virtual Try-on technology on In 2016, the Group recorded net sales growth of key retail chains continued to drive the industry's the equity of its brands and the business of whole- Ray-Ban.com. 1.9% at constant exchange rates2 (+0.8% at cur- evolution towards innovative business models sale customers, introducing the "MAP policy" (Min- rent exchange rates) to over Euro 9 billion. covering in-store, online and omnichannel, to offer imum Advertised Price) in North America, cleaning The acquisition of Salmoiraghi & Viganò, a leading consumers a more meaningful digital experience. the distribution channels in Mainland China, har- optical retail brand in Italy, marked the end of 2016, In 2016, the Wholesale segment’s net sales re- Sunglass Hut confirmed its leadership in the sun monizing its prices across different markets and while in January 2017 Delfin, the Group's majority mained almost unchanged from the previous segment with revenue growth of 8.1% at constant reducing in-store and online promotions sharply. shareholder, and Essilor announced the signing of year at constant exchange rates2 (-1.8% at current exchange rates2, while LensCrafters in North Amer- an agreement to create an integrated player in the exchange rates), mainly due to the adoption of ica strengthened its brand equity and reported a Major investments were made in 2016 to strength- eyewear industry. The objective of the combined the "MAP policy" in North America and the re- net sales increase of 1.3% in US dollars. In Aus- en the foundation of the Group’s organization and company will be to meet the growing needs of structuring of the distribution network in Mainland tralia, a review of the assortments in OPSM stores businesses around the world. Important initiatives the vision care market and consumer demand China. Both initiatives have allowed the Group to proved successful during the year, with a gradual have been dedicated to the development of the for premium brands. The transaction is subject to enhance the quality of its distribution network and improvement in comparable store sales4. In Latin Group’s operations. several conditions precedent, including approval strengthen the equity of its brands. America, GMO maintained its solid growth trend. by the shareholders of Essilor as well as regulatory approvals from various antitrust authorities.

48 49 INDEX Group results GROUP RESULTS IN 2016

35 35 dusted35 net sales dusted35 operating dusted net income dusted PS (millions of Euro) income by division (millions of Euro) (Euro) (millions of Euro)

Wholesale Retail Wholesale Retail 2015 2015 2015 9,011 2015 1 1 60

Wholesale Retail Wholesale Retail 2016 9,086 2016 2016 2 2016 1 2 0 62

dusted35 BID and operating income On the other hand, the adjusted3,5 operating Free cash flow3 generation was Euro 664 million (millions of Euro) margin for the Retail segment was down by 100 for the twelve-month period ended December bps to 13.7%, mainly due to investments in digi- 31, 2016. Net debt3 as of December 31, 2016 was talization and retail expansion. The organizational Euro 1,177 million, with a net debt/adjusted3,5 120 simplification and restructuring of certain business EBITDA ratio of 0.6x (0.5x excluding the buyback 2015 areas resulted in pre-tax extraordinary costs of plan). 1 approximately Euro 87 million5 for the year.

1 Adjusted3,5 net income for fiscal 2016 amounted 2016 to Euro 882 million, an increase of 3.3% year-over- 12 year and adjusted3,5 EPS (earnings per share) of Euro 1.84 (US$ 2.04 at the exchange rate of €/ Adjusted3,5 Ebitda Adjusted3,5 operating income US$ of 1.1069).

The Group's e-commerce platforms in 2016 de- constant exchange rates2) due to the temporary livered excellent results, up by 24% at constant effect of the “MAP policy” adoption. The results exchange rates2. Ray-Ban.com, Oakley.com and of the Asia-Pacific region were similarly affected SunglassHut.com further established themselves by the deep restructuring of the distribution chan- as the consumer favorites for buying branded nels in Mainland China. While Mainland China 1. Comparisons, including percentage changes, are between the three and twelve-month periods ended December 31, 2016 and eyewear online. has recovered in the first few weeks of 2017, its 2015 performance weighed on the overall sales in the 2. Figures at constant exchange rates have been calculated using the average exchange rates in effect for the corresponding period in the previous year. For further information, please refer to the attached tables. In terms of geographies, in 2016 Europe con- region, which were down by 1.9% at constant 3. Adjusted net sales is not a measure in accordance with IFRS. For further information, please refer to appendix tables of the 2 firmed its positive trend with net sales up 6.9% exchange rates . Southeast Asia, India and Japan press release on FY2016 results (“Record net sales and net income for 2016”), published on March 1, 2017 in the “Media” sec- at constant exchange rates2 (driven in particular have confirmed a solid growth. tion of the Group’s corporate website www.luxottica.com. by Italy, the United Kingdom, Spain and Eastern 4. “Comps” or “Comparable store sales” reflect the change in sales from one period to another that, for comparison purposes, Europe), while Latin America reported a strong Due to incremental investments, the Group’s ad- includes in the calculation only stores open in the more recent period that also were open during the comparable prior period, 3,5 and applies to both periods the average exchange rate for the prior period and the same geographic area. net sales increase (+10% at constant exchange justed operating income was Euro 1,432 million 5. The adjusted data for the twelve-month period ended December 31, 2016 take into account: (i) restructuring and reorganiza- 2 3,5 rates ) thanks to the significant growth of the in 2016, with an adjusted operating margin of tion costs of Euro 69.5 million (Euro 55.0 million net of taxes); (ii) non-recurring expenses of Euro 17.4 million (Euro 12.0 million Mexican market and a positive performance in 15.8%, down by 20 bps from 2015. With almost net of taxes) related to the departure of Adil Mehboob-Khan as CEO for markets and the Oakley integration; and (iii) non-re- Brazil. In North America, net sales3,5 at constant unchanged sales, the adjusted3,5 operating margin curring income of Euro 35.7 million related to the acquisition of Salmoiraghi & Viganò. The adjusted data for the twelve-month exchange rates2 were up 0.8%. The results were expanded by 20 bps to 24.1% for the Wholesale period ended December 31, 2015 does not take into account (i) a change in the presentation of a component of EyeMed net sales that was previously included on a gross basis and in 2015 was included on a net basis due to a change in the terms of driven by the Retail segment’s growth (+1.7% at segment, beginning to benefit from the synergies an insurance underwriting agreement (the “EyeMed adjustment”), resulting in a reduction to net sales on a reported basis of 2 constant exchange rates ), which more than offset of the Oakley integration and the organization's approximately Euro 174.3 million in the twelve-month period ended December 31, 2015, and (ii) costs related to the Oakley the decline in the Wholesale segment (-2.6% at efficiency. integration and other restructuring activities in 2015 of Euro 66.4 million on operating profit (Euro 49.8 million net of taxes).

50 51 4 Other information

> Index

53 INDEX Other information OTHER INFORMATION

2012-2016 EVOLUTION OF NUMBER OF STORES SHARE CAPITAL AND DIVIDEND PER SHARE

2012 2013 2014 2015 2016 Number of shares Adjusted number of shares Gross dividend per ordinary authorized and issued authorized and issued share (or American as of December 31 as of December 31(2) Depositary Share) (1,3) North America 4,818 4,742 4,631 4,628 4,708 1990 45,050,000 450,500,000 0.025 LensCrafters 968 958 942 933 1,013 1991 45,050,000 450,500,000 0.028 Sunglass Hut 1,912 1,897 1,901 1,923 1,875 1992 45,050,000 450,500,000 0.031 Sears Optical 775 726 638 623 581 1993 45,050,000 450,500,000 0.037 Target Optical 331 335 346 390 476 1994 45,050,000 450,500,000 0.041 Oakley 148 163 178 178 188 1995 45,050,000 450,500,000 0.045 1996 45,050,000 450,500,000 0.052 Asia-Pacific 874 844 843 854 929 1997 45,050,000 450,500,000 0.063 Sunglass Hut 249 274 283 298 315 1998 225,250,000 450,500,000 0.074 OPSM 392 363 340 309 306 1999 225,269,800 450,539,600 0.085 2000 451,582,300 451,582,300 0.140 Greater China 217 243 277 334 306 2001 452,865,817 452,865,817 0.170 LensCrafters 210 228 262 298 206 2002 454,263,600 454,263,600 0.210 2003 454,477,033 454,477,033 0.210 Europe 312 384 442 490 1,005 2004 455,205,473 455,205,473 0.230 Sunglass Hut 212 265 323 358 434 2005 457,975,723 457,975,723 0.290 2006 460,216,248 460,216,248 0.420 Africa & Middle East 155 159 177 195 198 2007 462,623,620 462,623,620 0.490 Sunglass Hut 120 122 131 140 140 2008 463,368,233 463,368,233 0.220 2009 464,386,383 464,386,383 0.350 Latin America 584 679 714 764 831 2010 466,077,210 466,077,210 0.440 GMO 451 475 474 476 491 2011 467,335,177 467,335,177 0.490 Sunglass Hut 126 197 232 279 315 2012 473,238,197 473,238,197 0.580 2013 477,560,673 477,560,673 0.650 Group total 6,960 7,051 7,084 7,265 7,977 2014 481,671,583 481,671,583 1.440(4) 2015 483,653,333 483,653,333 0.890(5) 2016 484,176,083 484,176,083 0.92(4)

(1) 1 ADS = 1 ordinary share (2) Figures until 1999 have been retroactively adjusted to reflect the five-for-one stock split which was effective April 16, 1998, and the two-for-one stock split which was effective June 26, 2000 (3) Figures through 1999 have been calculated converting the dividend in Italian Lira by the fixed rate of Lire 1,936.27 = Euro 1.00. Beginning with the 2000 financial statements the dividend is declared in Euro (4) It is comprised of an ordinary dividend amounting to Euro 0.72 per share and an extraordinary dividend amounting to Euro 0.72 per share (5) Proposed by the Board of Directors and to be submitted for approval to the Annual General Meeting on April 28, 2017

54 55 INDEX Other information OTHER INFORMATION

1990-2016 LUXOTTICA SHARE PERFORMANCE - NYSE (US$) 2000-2016 LUXOTTICA SHARE PERFORMANCE - MTA (EURO)

Average Year Low High Average Closing Year change volumes Year Low High Average Closing Year change Average Volumes

(3) 1990(1) 0.794 1.456 1.089 1.019 7%(2) 989,578 2000 15.239 17.618 16.530 15.356 17% 211,328 1991 0.988 2.750 1.822 2.750 170% 390,719 2001 13.409 20.620 17.096 18.430 20% 117,744 1992 2.250 3.281 2.852 2.513 -9% 313,051 2002 11.750 22.950 17.380 12.576 -32% 204,110 1993 2.025 2.950 2.373 2.925 16% 231,107 2003 9.248 14.820 12.231 13.700 9% 458,682 1994 2.787 3.625 3.279 3.413 17% 189,325 2004 12.427 15.512 13.911 14.995 10% 671,783 1995 3.175 5.950 4.180 5.850 71% 417,048 2005 15.110 21.940 18.109 21.430 43% 789,552 1996 5.212 8.100 7.033 5.213 -11% 348,201 2006 19.300 24.460 22.512 23.280 9% 869,788 1997 5.125 6.988 6.092 6.250 20% 427,059 2007 22.720 28.790 24.640 21.750 -7% 1,306,403 1998 3.875 9.494 6.964 6.000 -4% 342,659 2008 12.670 21.150 16.493 12.670 -42% 2,058,049 1999 5.000 10.313 7.613 8.781 46% 354,464 2009 9.610 18.250 14.910 18.050 43% 1,110,437 2000 7.969 17.000 12.945 13.750 57% 222,136 2010 17.820 23.170 19.974 22.800 26% 938,423 2001 12.150 17.990 15.283 16.480 20% 248,020 2011 18.730 23.490 21.529 21.700 -5% 783,864 2002 11.820 20.850 16.184 13.650 -18% 273,378 2012 21.760 31.700 27.480 31.070 43% 908,854 2003 10.230 18.150 13.877 17.400 28% 156,275 2013 31.910 42.650 38.302 38.950 25% 631,328 2004 15.180 20.390 17.344 20.390 17% 80,921 2014 35.700 45.500 40.620 45.500 17% 759,199 2005 19.690 25.830 22.408 25.310 24% 70,244 2015 44.910 67.450 59.345 60.400 33% 736,417 2006 24.360 31.390 28.303 30.670 21% 76,514 2016 40.550 58.850 47.715 51.100 -15.4% 578,000 2007 29.700 39.380 33.699 31.490 3% 127,972 2008 15.980 30.920 24.228 18.120 -43% 251,319 2009 11.880 26.910 20.991 25.680 42% 145,041 2010 22.590 30.620 26.502 30.620 19% 88,537 2011 25.070 34.400 29.991 27.930 -9% 86,878 2012 27.520 41.730 35.345 41.350 48% 117,866 2013 41.930 55.700 50.854 53.920 30% 85,147 2014 45.340 58.730 53.870 54.470 1% 68,253 2015 53.360 73.950 65.784 64.860 19% 53,047 2016 45.010 63.850 52.676 53.700 -17.2% 47,776

(1) Amounts have been retroactively adjusted to reflect the five-for-one stock split which was effective April 16, 1998, and the two-for-one stock split which was effective June 26, 2000 (2) From IPO (January 24, 1990) (3) From IPO (December 4, 2000)

56 57 LUXOTTICA GROUP S.p.A.

REGISTERED OFFICE AND HEADQUARTERS

Piazzale L. Cadorna, 3 - 20123 Milan - Italy Tel. +39 02 86334.1 - Fax +39 02 8633 4636 E-mail: [email protected] Fiscal code and Milan company register no. 00891030272 VAT no. 10182640150

INVESTOR RELATIONS

Piazzale L. Cadorna, 3 - 20123 Milan - Italy Tel. +39 02 8633 4870 - Fax +39 02 8633 4092 E-mail: [email protected] App: Luxottica4Investors

CORPORATE COMMUNICATIONS

Piazzale L. Cadorna, 3 - 20123 Milan - Italy Tel. +39 02 86334.1 E-mail: [email protected]

CORPORATE WEBSITE www.luxottica.com

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