ANNUAL REPORT 2017 - luxottica.com

1 ANNUALREPORT2017 ANNUALREPORT2017 Corporate bodiesBOARD OF DIRECTORSIn office until the approval of the financial statements as of and for the year ending December 31, 2017 Executive Chairman Leonardo Del VecchioDeputy ChairmanLuigi FrancavillaDeputy Chairman and MilleriDirectorsStefano Grassi**Marina Brogi* (Lead Independent Director)Luigi Feola*Elisabetta Magistretti*Mario Notari** Karl Heinz Salzburger*Maria Pierdicchi*Luciano Santel*Cristina Scocchia* Sandro Veronesi*Andrea Zappia ** Independent directors** Executive director** Non-executive directorHUMAN RESOURCES COMMITTEEA ndrea Zappia (Chairman)Marina Brogi Mario NotariINTERNAL CONTROL COMMITTEEE lisabetta Magistretti (Chairman)

2 Luciano Santel Cristina ScocchiaBOARD OF STATUTORY AUDITORSIn office until the approval of the financial statements as of and for the year ending December 31, 2017 Regular AuditorsFrancesco Vella (Chairman)Alberto Giussani Barbara TadoliniAlternate AuditorsMaria Venturini Roberto Micc OFFICE RESPONSIBLE FOR PREPARING THE COMPANY S FINANCIAL REPORTSS tefano Grassi INDEPENDENT AUDITORSP ricewaterhouseCoopers In office until the approval of the financial statements as of and for the year ending December 31, 2020 IndexLetter to Shareholders 91.

3 Management REPORT 132. REPORT on corporate governance and ownership structure 1513. Consolidated financial statement 1953 .1 Consolidated statement of financial position Consolidated statement of income Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the Consolidated Financial Statements as of December 31.

4 2017 Certification of the consolidated financial statements pursuant to Article 154-bis of Legislative Decree 58/98 Independent Auditor's REPORT Independent Auditor s REPORT on the Consolidated Non-Financial Statement pursuant to Article 3 of the Italian Legislative Decree 254 of 30 December 2016 and Article 5 of CONSOB Regulation n. 20267 2964.

5 Separate financial statements 3034 .1 Statement of financial position Statement of income Statement of comprehensive income Statement of changes in stockholders equity Statement of cash flows Notes of the separate financial statements as of December 31, 2017 Certification of the separate financial statements pursuant to Art.

6 154-bis of Italian Legislative Decree 58/98 Independent Auditor s REPORT Board of Directors proposal 3904 .10 Board of Statutory Auditors REPORT on the consolidated and separate financial statements 392 Contacts 400 LETTER TO SHAREHOLDERS1 LETTER TO SHAREHOLDERS1 LETTER TO SHAREHOLDERS19 Dear Shareholders,Just over a year has passed since we announced, together with Essilor, a historic agreement to combine our two companies and create a major integrated player in the eyewear industry.

7 Our vision is to push beyond the boundaries of the sector to unlock greater value for our customers and consumers. By integrating the beauty and craftsmanship of our design and the prestige of our brands with high-quality lenses manufac-tured with advanced digital technologies, we will offer innovative products and services that satisfy the needs and desires of people agreement with Essilor, which we expect to close in the first half of 2018, will allow us to accelerate the completion of our integrated model by adding the final component to our value chain.

8 Lenses and frames will be created as a single product right from conception through design and to write a new chapter of our history together with our French partners at Essilor, in 2017 we continued to invest in our strategic priorities, mindful of the opportunities ahead for the the last three years, we have completed initiatives and a strategic refocusing that have improved the quality and competitiveness of the Group. This allowed us to close a record year in terms of revenues and of both earnings and cash generation, over one billion Euro. Our net margin was above the 10% threshold again after fifteen 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 strongly investing in digital communication and new online platforms to engage even the younger was also a year of major investments in our industrial infrastructure.

9 We completed the expansion of three new large hubs in Italy, the United States and China, which are now equipped to produce and distribute frames and lenses together under one roof, and we streamlined our global logistics network to further improve the speed and quality of our customer service. Letter to Shareholders110 LETTER TO SHAREHOLDERSWe continue to have a great focus on innovation. Again this year, we introduced approximately 2,000 new models, along with new materials and processes, giving life to collections that were well received in every market.

10 We also made major investments to strengthen both the digital infrastructure along the entire supply chain and the IT platforms that today connect Luxottica directly with the market, from customers to consumers, and bring in store our true omnichannel experience. We have presented to the market the store of the future, easily sus-tainable, where digital integrates and completes the physical experience, break-ing down barriers such as the limitation of physical spaces and the availability of products in store. The transformation is in we have over 4,000 windows equipped with digital screens in the Group s retail chains and in select independent optical stores, as well as large-scale installations, such as the Times Square mega screen in New York.