75 million Senior Notes 1 st December 2015 Fiscal year 2015 annual - PowerPoint PPT Presentation

€ 365 million Senior Secured Notes € 75 million Senior Notes 1 st December 2015 Fiscal year 2015 annual results

Forward Looking Statements This presentation may include forward looking statements. These forward looking statements can be identified by the use of forward looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward looking statements include all matters that are not historical facts and include statements regarding ALAIN AFFLELOU’s intentions, beliefs or current expectations concerning, among other things, ALAIN AFFLELOU’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward looking statements are not guarantees of future performance and that ALAIN AFFLELOU’s actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward looking statements contained in this presentation. In addition, even if ALAIN AFFLELOU’s results of operations, financial condition and liquidity, and the development of the industry in which ALAIN AFFLELOU operates are consistent with the forward looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods. 1

Today’s presenters Frédéric Poux Chief Executive Officer Didier Pascual Chief Financial Officer André Verneyre Investor Relations investors@afflelou.net / +33 1 4937 7337 2

1. Commercial update 2. Financial review 3. Strategic perspectives Q&A 3

Executive summary Storecount as at July 31st, 2015  Network sales stable at € 643 million (-0.1%) 1,271 – French LFL sales outperformed sector by +0.7% since Q2 (after weak Q1) – Second year of strong growth in Spain: +4.0% LFL FY15 (+3.6% in FY14) 88 Optical Discount – Net openings of 9 stores; achieved threshold of 300 stores in Spain 63 Claro by Afflelou – 1,271 stores as at 31 July 2015, including OPTICAL DISCOUNT (88 stores) 77 AA / Other countries 25 AA Portugal  Despite stable network sales, FY15 EBITDA at € 64.8m (14.9% below FY14) 300 Alain Afflelou Spain – € 3.9m lower supplier gross profit (quality issue, mix) – € 2.3m lower D.O.S. profitability – € 3.2m higher investment in communication  Improvement in net debt to € 423.0 million (vs. € 428.4 million a year ago) – € 18.4 million investment in capex and acquisitions ( € 11.6 million in FY14) – Improvement in working capital management  Commercial update 718 Alain Afflelou France – Benefits from strategic shift towards closed networks in France – Launched new commercial concept “ Win-Win ” – Further expansion in Spain – Reduction in D.O.S. perimeter going forward – Acquisitions: OPTIVISAO and OPTICAL DISCOUNT 4

Outlook and dynamics in our main geographical areas Confidence consumer survey  France: still a challenging market 100 – Consumer sentiment had been improving over the last several months - until the terrorist attacks in Paris 95 – Increased penetration of closed networks – A changing regulatory environment (Loi de Financement de la 90 sécurité sociale, Loi de sécurisation de l’Emploi , current discussions on Loi de Santé) 85 – However, sector remains resilient despite current market challenges 80 01-2010 07-2010 01-2011 07-2011 01-2012 07-2012 01-2013 07-2013 01-2014 07-2014 01-2015 07-2015 – Stable market in value (but LFL declines due to increased number of opticians) Source / INSEE – Nov2015 – Structural attractiveness of sector supported by ageing population, social habits and technological improvements Spanish market and AA Spain sales (incl.VAT) – Expect market to consolidate over the medium term and +16% +21% Afflelou to benefit from consolidation -5% 1,663 1,661  Spain: Afflelou winner in a growing market – 2 years of strong market growth (following several years of 1,593 1,585 1,555 decline due to the economic crisis) 119.2 114.3 – AA Spain continuing to gain market share 103.7 98.5 99.0 99.7  Other countries – Further expansion opportunities in other countries in which 2010 2011 2012 2013 2014 LTM-7/15 AA Spain Spanish market we already have a presence Source / SWV and company figures 5

Commercial achievements  France – Benefits from strategic shift towards closed networks in France – Three out of six closed networks ran tenders during fiscal year: AA achieved share at or above its market share outside preferred networks, thereby gaining fair representation in this previously untapped pool of customers – Clear evidence of positive sales impact for stores participating in closed networks – Two more upcoming tenders: Kalivia (13m+ people) and Sévéane (6m+ people) – Targeted support for underperforming franchisee stores (Programme ‘Elite’) – AA has outperformed the market since Q2 (+0.7% versus market LFL)  Marketing push in H2: launch of the Sharon Stone partnership and innovative WIN WIN offer – Maintain reputation as the most innovative optical banner – Increase brand visibility with Sharon Stone partnership – Communication expenses and advertising space increased to maintain leading position  Active management of our lenses manufacturers partnerships – Changes in the distribution of our exclusive suppliers – Growing influence of closed networks also impacts the distribution of suppliers  D.O.S. – Strategic initiative to significantly reduce D.O.S. network in France: 5 stores already closed or sold back since April with several transactions in advanced stages of completion – Improvement of financial performance at our D.O.S. structure in Spain  External growth steps with OPTIVISAO and OPTICAL DISCOUNT 6

1. Commercial update 2. Financial review 3. Strategic perspectives Q&A 7

Group financials Network Evolution of network sales by quarter vs FY14  Network sales up since Q2 and stable for the full 2.5% 2.2% 1.2% fiscal year  LFL at -0.9% in FY15 (France -1.8%, Spain Q1 Q2 Q3 Q4 +4.0%), despite -7.1% in Q1 -6.6% Revenues For the three months For the year  Franchisor revenues down by 7.3% mainly due to ended July 31, ended July 31, € in millions (except percentages) 2015 2014 2015 2014 changes in purchasing activities ∆ ∆ INCOME STATEMENT  D.O.S. revenues up with the network expansion Total network sales 169.0 166.9 642.6 643.1 1.2% (0.1%) Gross profit  Franchisor performance impacted by Franchisor revenue 56.5 66.5 225.8 243.4 (15.1%) (7.3%) – Purchasing activities (- € 3.9m) Directly-owned stores revenue 31.8 30.2 113.6 107.4 5.3% 5.7% – Communication effort (- € 3.2m) Elimination (8.4) (7.7) (28.7) (27.0)  D.O.S. decline at the gross margin level (-1.8%) Total Group revenue 79.9 89.0 310.7 323.9 (10.2%) (4.1%) 1.0 Franchisor gross profit 24.9 30.5 102.5 109.9 (18.1%) (6.8%) EBITDA Directly-owned stores gross profit 18.3 17.2 67.7 66.0 6.3% 2.5%  Q1 (- € 3.9m) weighs on FY underperformance Intercompany eliminations (3.6) (3.3) (12.5) (10.9)  - € 7.4m of underperformance from Q2 to Q4, but Total Group gross profit 39.6 44.4 157.6 165.0 (10.7%) (4.5%) including the stronger communication expenses Franchisor EBITDA 17.2 22.5 70.8 79.8 (23.5%) (11.3%)  EBITDA at almost € 66 million, including + € 0.9m Directly-owned stores EBITDA (1.1) (0.8) (6.0) (3.7) EBITDA contribution of Optical Discount Total Group EBITDA 16.1 21.6 64.8 76.1 (25.6%) (14.9%) as a % of Group revenue 20.2% 24.3% 20.9% 23.5% 8

Network Network sales at -0.1% in FY15 Network sales evolution ( € m)  LFL sales at -0.9% 669.9  Network expansion of 9 stores, and 97 stores +1.3 +0.2 +7.4 including Optical Discount +27.3 643.1 France 642.6  LFL outperforming sector since Q2 -10.1 +0.7 – Positive impact of our recent penetration in closed networks – Impactful communication campaigns (Sharon July 14 AA France Claro Optical AA Spain AA Other July 15 LTM Discount Portugal countries LTM Stone and WIN WIN commercial offer) Q4 LFL growth -1.1% -5.5% +3.1% -11.4% +5.2% Total -0.3%  Higher number of closures affects net number of FY15 LFL growth -1.8% -3.6% +4.0% -3.0% -0.1% Total -0.9% stores  Claro ‘on hold ’, in light of Optical Discount Store count evolution acquisition Spain 1 271  Positive performance in LFL sales at +4.0%  Target of 300 stores reached at the end of FY15 0 +3 +14 1 183 1 174 +88 - 7 -1 International & Portugal  Broadly flat on LFL July 14 AA Claro Optical Spain Portugal Other July 15  + 3.6% overall sales France Discount countries 9