Letter to shareholders

Dear Shareholders,

2015 was an intense year in which, once again, Luxottica achieved important results and laid a solid foundation for the future.

True determination, commitment to excellence and the ability to reinvent ourselves and innovate not only characterize our history, but mark our way of working also in the last year.

When combined with the strength and uniqueness of our business model, our distribution network and our brand portfolio, these traits have allowed us to solidify our leadership and make it more sustainable in the long term.

I would like to highlight some important developments of the last year.

In 2015, we continued our expansion plans in all distribution channels, from retail, with the opening of new stores in strategic markets, to wholesale globally and e-commerce, where we have made a significant investment in digital communication.

We signed an agreement between LensCrafters and Macy's that will strengthen our leading optical retail brand with exposure to tens of millions of new customers in the United States. Similarly, the growing presence of Sunglass Hut in the department stores of Galeries Lafayette in France and El Corte Inglés in Spain will bring us a new level of visibility in Europe in the premium eyewear category.

After a phase of in-depth study, we developed a new store model more in line with current market trends and supported by our new digital marketing strategies. With a new vision of retail in mind, we intend to add more than 1,000 new stores in the next 24 months. In addition to strengthening our presence in traditional markets, we are in full expansion mode in the emerging countries.

Furthermore, our brand portfolio, which is central to our strategy, continues to grow with the most relevant fashion brands. In 2015, we renewed prestigious licenses with Prada, Burberry and Dolce&Gabbana, and we recently announced the addition of the iconic Valentino brand. We have also improved our organizational efficiency and the quality of our service, always key to our success. We are making important investments in our technological infrastructure and expanding our logistics hubs in the United States, China and Europe.

Since I returned to an operating role in the company, I have started, along with the entire management team, a new phase with an innovative strategic vision, focus on speed of execution and organizational simplicity. The change is already in motion with the completed integration of Oakley, the central functions of the Group and major commercial organizations around the world, as well as an acceleration in e-commerce and digital communication.

To further improve efficiency and integration, we are evaluating a radical simplification of our regional structure, where Luxottica businesses in a particular market would ideally operate through a single local entity. The benefits of shared resources and a more streamlined relationship with our central functions will benefit the Group and contribute to its overall growth and profitability.

We began construction on three large laboratories for the production of ophthalmic lenses, each with excellent technologies and sophisticated automation systems. They will play an essential role within our logistics hubs in order to integrate lenses and frames in the right phase of the cycle, and optimize the level of service for our optical stores around the world.

Finally we are reimagining our marketing strategy to focus exclusively on digital communication, starting with screens that can showcase in real time our brand’s stories in thousands of our retail locations and across our global wholesale network.

My dream, as an entrepreneur, has always been to make the best eyewear in the world and see everyone wearing them. I have personally experienced, for over forty years, the passionate adventure of turning this vision into a reality with a strong and dynamic company like Luxottica. The pillars of our strategy have never changed: product quality, strong brands, efficient factories, widespread distribution and growing our direct relationship with the end consumer. They will not change now, but we will adapt them for the times.

In the meantime, we will continue to create value for the Group, our people, our communities and our shareholders. An exciting adventure has just begun and all of us at Luxottica are ready to live it with the greatest enthusiasm ever.

April 2016
Leonardo Del Vecchio, Founder and Executive Chairman of Luxottica
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