Growing in a Bigger Playing Field

Growing in a Bigger Playing Field
 Investor Day – June 25, 2014 – London
Disclaimer

This presentation contains forward-looking statements that can be identified by
terminology such as “potential,” “expected,” “will,” “planned,” “anticipate” or the negative of
these terms or similar expressions. Such forward-looking statements reflect the current
views of the Group regarding future events, and involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially different from
any future results, performance or achievements expressed or implied by such
statements. For a detailed description of these factors and uncertainties, please refer to
the section “Risk Factors” in our Registration Document (which is available on
www.essilor.com). Accordingly, readers of this presentation are cautioned against relying
on these forward-looking statements. These forward-looking statements are made as of
the date of this presentation. Essilor undertakes no obligation to publicly update or revise
any of these forward-looking statements.

This presentation includes information relative to our markets and our competitive
positions. Such information is based on market data and our actual revenues in those
markets for the relevant periods. We obtained this market information from various third
party sources (industry publications, surveys and forecasts) and our own internal
estimates.
Investor Day - June 25, 2014
1
Building Stronger Consumer
Brands
 Carl Bracy – VP US Marketing & Business Development
 Alain Riveline – VP Strategic Marketing
Why Market to Consumer in Optics?
New phenomena
Fundamentals in optics
Unrealized category growth
and repurchase rate potential
More educated shoppers
from browsing to purchase
Improving ECP ability
to explain innovations
Growing complexity, more
choices and sophisticated
innovations
↗ Because it works
Other players compete
for consumers’ choice: managed
care, retail, frame brands
Improved balance between
Fashion & Function
Grow the industry
Investor Day - June 25, 2014
3
Positive Impacts of Consumer Marketing in Optics
For consumers
↗ Educational
↗ Empowerment
↗ Clearer choice
For managed care
↗ Better clarity on coverage
and pricing decisions driven
by product benefits
For ECPs
↗ Confidence to prescribe
and explain innovations
↗ Strongly relay POS execution
For Essilor
↗ Accelerate category building
↗ Brand building
↗ Organic growth
Investor Day - June 25, 2014
4
Transitions: Year on Year Growth in Brand Building
TV AD
TV AD
Product
Launch
Revenue
Product
Launch
Product
Launch
Product
Launch
Product
Launch
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Similar successes with Varilux in France, Brazil, Portugal and Spain
Investor Day - June 25, 2014
5
Essilor Learning Curve and Deployment Plan
for Building Consumer Brands
 2009-2013: Deploying winning models to be used
in each geography
 2014-2016: Global deployment in selected countries
 2016 onwards: Further global deployment
Investor Day - June 25, 2014
6
Establishing Brand Awareness (Crizal, US)
Investor Day - June 25, 2014
7
Establishing Brand Awareness (Crizal, US)
 Key Message:
 New Crizal protects your lenses
and your eye health
 Scratch-proof, smudge-proof, no-glare lenses
now have E-SPF 25 – to help protect your eyes 25
times more from the damaging rays of the sun
 Four-quarter media presence
 Q1 2014 Results
 Crizal grew 9.1% in Q1 2014
 Penetration increased 3% in Q1 2014
Investor Day - June 25, 2014
8
Building on Top of an Established Brand
(Crizal Prevencia, France)
Investor Day - June 25, 2014
9
Building on Top of an Established Brand
(Crizal Prevencia, France)
 Key messages
 Dangers of light & Crizal Prevencia as the
solution
 Call to action (satisfied or exchanged offer)
 Media plan
 Print campaign – 14m contacts
 Radio: 66m contacts (national and local stations)
 Digital and professional marketing waves
 Q1 2014 Results
 Prevencia penetration rate and volume doubled
 Total Crizal growth: +6.1% during the campaign
Investor Day - June 25, 2014
10
Building a Brand with a Seasonal Campaign
(Xperio UV, US)
Investor Day - June 25, 2014
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Building a Brand with a Seasonal Campaign
(Xperio UV, US)
 Key messages
 Polarized Sun lenses are available
in your prescription
 Xperio UV eliminates 100% glare,
offers crisper vision and brighter colors
 Media plan
 360° media campaign:
Seasonal media wave March-July 2014
 Pullthrough maximized with POP campaign in ~3000 iECP offices (May)
 Results
 2013: Polarized lens unit 2x segment growth rate
 2014 YTD:
• Xperio UV growth: 21%
• Polarized lens unit growth: 12.7% iECPs
Investor Day - June 25, 2014
12
Improving Campaign Return on Investment:
the Essilor Experience
By assisting consumers
 Crizal
 Varilux
 Transitions
By adding
in merchandizing
 Singapore
 Czech Republic
…
By providing
promotion
 Increasing multi-pair
Essilor constantly deploying new concepts
Investor Day - June 25, 2014
13
Adding in Promotion with Group ECP Partners
 Key messages
 Varilux superiority
 Second pair with special price
on Crizal Transitions or Prevencia
 Media plan
 Quarterly TV waves
 POS marketing support
 Results
 Varilux yoy growth: 30/40% in volume
 Varilux share growth in PAL mix
Investor Day - June 25, 2014
14
Vision is More Important
than Fashion for Key Retailers
Investor Day - June 25, 2014
15
Deploying New Business Model with Key Accounts
 Key concept
 Pushing « Branded vision correction solutions »
within Walmart’ « Save Money Live Better »
mission
 Key messages
 Nikoneyes lenses give sharper & clearer vision,
resist scratches & reduce glare, and now have
E-SPF 25 protection
 Satisfaction guaranteed
 Available at Walmart & Sam’s Club
 Results
 First 12-month Nikoneyes unit growth: c.50%
Strong value creation based on co-sponsored brand building
Investor Day - June 25, 2014
16
A Step Change in Resources to Talk to Consumers
 Total Group* consumer marketing budget projection
€125m
>€125m
2016
2018
€25m
2013
* Excludes Bolon, Molsion and Costa media spendings
Investor Day - June 25, 2014
17
To be Deployed Globally in Selected Countries
2014 Allocation
2014 Resources
Essilor 2014 incremental budget
(Transitions synergies)
Regular Essilor
media consumer budget
35
33
North America
Europe
25
12
5
7
30
Transitions own media
consumer spend
€90m
3
Transitions own media
consumer budget
30
Amera
Latin America
Others
2014
↗ Priorize core countries and proven brand building models
↗ Open new countries, including fast-growing markets
2015 - 2018
↗ Redeployment of Transitions consumer marketing budget
↗ Accelerate the deployment of proven models
↗ Starting new models (brands, media, etc.)
Investor Day - June 25, 2014
18
New Plan to Build Permanent Media Presence
in the US as of Q4 this Year
Investor Day - June 25, 2014
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Getting Closer to the US Consumer with…
Adults 35-54
Week Number
Jan
1
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Mar
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Apr
May
Jun
July
Aug
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Investor Day - June 25, 2014
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Leveraging Essilor Key Brands to Constantly
Raise Consumer’s Awareness on Good Vision
Adults 35-54
Week Number
Jan
1
2
3
Feb
4
5
6
7
Mar
8
9
Apr
May
Jun
July
Aug
Sept
Oct
Nov
Dec
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
50 weeks on air in a year!
Investor Day - June 25, 2014
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Building Stronger Consumer Brands Will Push
Innovation
 Accelerate category building in strategic countries
 Reinforce Group pricing power on high margin products
 Build the right brand portfolio as long-term Group assets
Boost group organic growth
Strengthen Essilor’s leadership
Investor Day - June 25, 2014
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