Annual General Meeting Hubert Sagnières Strategy and Governance · Annual General Meeting Hubert...

Annual General Meeting

Hubert Sagnières

Strategy and Governance

May 11, 2012

Our Focus Today

Strategy

Governance

22012 Annual General Meeting

4 pilars of our strategy

Operational and management efficiency

Products and

Services

INNOVATE

Corporate and social responsibility

Top & Mid-

range markets

DEVELOP

Acquisitions &

Partnerships

GROW

Demand

for Vision

Improvement

STIMULATE


2008-2011: Building Momentum for Sustainable Growth

4

Consolidate leadership in the high-end

through innovation

Strengthen positions

in mid-range markets



5

Expand in two new

growth segments

Capture leading positions

in key new markets



Volume market share

31%

26%

6

Gaining market shareNew management organization

to support growth


Revenue

Contribution from operations

Earnings per share

Cash flow*

+10.9% CAGR

+10.7% CAGR

+9.7% CAGR

+9.0% CAGR


* Cash flow = Operating cash flow excluding change in WCR

7


2008-2012: A new size for the Group

8

Employees

Market Capitalisation

34,320 52,000

2008 2012

€7.1bn €14bn


Global Optical Market:

Long-term Structural Growth

A large and growing market,

still significantly underpenetrated

Fast growing markets driving volume growth

Value growth boosted by demand for better vision

A highly fragmented industry led by local operators

Poor vision: a global economic concern


A Large and Growing Market,

Still Significantly Underpenetrated

7 billion people in the world

4.2 billion people (60%) require vision correction

Presbyopes growth rate: 2-3%

2.5billion

people

1.7billion

people

Myopic growth rate: 4-6%

Not correctedCorrected


Fast Growing Markets Driving Volume Growth

+6-8% +1-2%

35

12580

20

120

190

Fast

Growing

Markets

Developed

Markets

570 millionconsumers per annum

Global market growing at 3-4%


Value Growth boosted by Demandfor Better Vision in Every Segment

Category growth Category segmentation

Crizal Forte

Crizal Easy

TRIO

Crizal Alizé

Value Creation in the coating segment

Vis

ion

Imp

rove

me

nt

Geographic mix

Pri

ce

Crizal ForteUV

12

Non AR

lens

AR lens

Argentina

Gro

wth

Po

ten

tia

l

USA Middle

East

Germany Japan


A Highly Fragmented Industry

Sources : Estimations Essilor, InfoMarché 2010, VisionWatch 2010

Essilor

Essilor G

X

Lens

Manufacturers

Wholesalers

& Laboratories

Optical

Retail

Readers

Manufacturers

Readers

Wholesalers

Retail

Networks

150 to 200Small operators

1,500 to 2,000Local operators

1.1 Billion Rx lenses

220 Million Readers (pairs)


Poor Vision: a Global Economic Concern

Workplace Elderly

Sources: World Health Organization, BCG

Education

810 million: Children with poor vision encountering problem at school

1.1 billion: Workers with poor vision having productivity or safety issues

3.2 million: People blinded by UV exposure every year

» $270bn: Global economic productivity loss due to poor vision


A unique entrepreneurial model

48,700 employees

around the worldSuccessful record of

integrating new

partnerships

acquisitions

Broad-based employee

shareholding

program

Invest in talented

people

Internationalization and

diversity

to address an

expanding, complex

environment

A corporate culture deployed through the “Essilor Principles”


Our Focus Today

Strategy

Governance


Essilor’s Governance

Board of Directors

Four BoardCommittees

Shareholders

EmployeeShareholding

ValoptecAssociation

ExecutiveCommittee


Members of the Board of Directors

Philippe ALFROID

Xavier FONTANET

Hubert SAGNIERES

Independant Directors

Benoît BAZIN

Antoine BERNARD DE SAINT

AFFRIQUE

Yves CHEVILLOTTE

Mireille FAUGERE

Bernard HOURS

Maurice MARCHAND-TONEL

Olivier PECOUX

Michel ROSE

Valoptec Association

Yves GILLET

Yi HE

Aïcha MOKDAHI

6 scheduled Board Meetings + 1 unscheduled Meeting in 2011

Attendance rate: 95%


Renewal of appointment to the Board

for 3 years for:

Mr. Benoît BAZIN

Born on December 29, 1968

19

From 2005 to March 2009: Chief Financial Officer, SAINT-GOBAIN

Since April 1 2009: CEO Building Distribution Sector

Since January 1 2010: Senior Vice President, COMPAGNIE DE SAINT-

GOBAIN

4th Resolution



for 3 years for:

Mr. Antoine

BERNARD DE SAINT-AFFRIQUE

Born on December 26, 1964

20

From April 2005 to August 2009: Vice President at UNILEVER in charge

of Central and Eastern Europe and Russia

From August 2009 to September 2011: Executive Vice President at

UNILEVER, in charge «Skin Care and Skin Cleansing»

Since September 2011: President of Foods division, UNILEVER

5th Resolution



for 3 years for:

Mr. Bernard HOURS

Born on May 5, 1956

Since January 2008: Chief Operating Officer, DANONE (S.A.)

Since 2010: Vice-Chairman of the Board of Directors, DANONE (S.A.)

21

6th Resolution



for 3 years for:

Mr. Olivier PECOUX

Born on September 9, 1958

Since 2001: Managing Partner, ROTHSCHILD ET CIE BANQUE

Since March 2010: Chief Executive Officer of ROTHSCHILD investment

banking business and Chief Executive Officer and member of the

Management Board for PARIS-ORLEANS

22

7th Resolution


8th Resolution

Appointment of a new Director

for a period of 3 years:

Mrs Louise FRECHETTE

Born on July 16, 1946

Canadian

1985 – 1998: Served in Canadian Civil Service, holding the positions of

Ambassador to Argentina, Permanent Representative and Ambassador

to the UN, Associate Deputy-Minister of Finance and Deputy-Minister of

National Defense

1998 - 2006: Deputy Secretary General of the UN (New York)

Since May 2006: Distinguished fellow at the Centre for International

Governance Innovation and Chair of the Board of Directors of CARE

Canada



Board of Directors


Shareholders


ValoptecAssociation

ExecutiveCommittee


Audit Committee

Chairman of the Committee: Yves Chevillotte

Philippe Alfroid, Benoît Bazin, Antoine Bernard de Saint Affrique,

Aïcha Mokdahi


8 specific subjects treated in 2011


Appointments Committee

Chairman of the Committee: Xavier Fontanet

Yves Chevillotte, Maurice Marchand-Tonel, Michel Rose

Chairman of the Board and Valoptec


Reports on the functioning of the Board and prepares its evolution


Remunerations Committee

Chairman of the Committee: Michel Rose

Bernard Hours, Maurice Marchand-Tonel, Mireille Faugère


Accompanies the evolutions of governance and assists those

concerned

Makes recommendations to the Board who in turn decides the

remuneration of company directors, in line with the AFEP-MEDEF

code

Reviews the allocation of performance shares for all employees


Executive Directors Compensation

1 Allowance to compensate for dual tax residence

Revenues and market cap on December 31 of each exercize. For 2012, market cap on April 19

2008 2009 2010 2011 2012Change

2012/2008

Chairman

& CEO

XF

Chairman

& CEO

XF

Chairman

XF

CEO

HS

Chairman

XF

CEO

HS

Chairman

& CEO

HS

Compound

annualized

growth in %

Fixed(K€)

700 721 500650

+ 2501 500650

+ 2501 800 +3.4%

Variable at target(K€)

700 721 - 650 - 650 800 +3.4%

% Achievement of

variable65 % 118 % - 134 % - 131 % ND

Revenue(in € billions)

3.1 3,3 3,9 4,2 ND+10.9%

(2011/2008)

Market Cap.(in € billions))

7.1 9,0 10,2 11.7 13.8 +18.2%

Stock options 120,000 80,000 - - - - ND

Performance Shares - - - 45,000 - 50,000 ND


Earning rules Holding rules

General rules- for employees

- for Executive Committee members

Share price increase

+ Group objectives achieved

In France : Shares available for sale after 6 to 8 years

Specific rules for Executive Directors- Performance

- Limitation of quantity received

+ Personal objectives achieved

+ Quantity limited to 7% of total shares granted

+ Value limited to yearly fixedand variable compensation

+ 1/3 of shares received to be held during the term of office, but limited to the value of 2 years of compensation

Performance Shares


Strategy Committee

Chairman of the Committee: Hubert Sagnières

All Board Members


Meeting agenda prepared by a steering committee

8-10 subjects treated each year



Board of Directors


Shareholders


ValoptecAssociation

ExecutiveCommittee


Shareholding structure increasingly international

% of shareholders excluding employed shareholders/Valoptec



Board of Directors


Shareholders


ValoptecAssociation

ExecutiveCommittee


Employee shareholding and Valoptec:

Key to our entrepreneurial culture

United States

1,759

Latin America

250

Europe

2,230

Asia

1,106

13,057 total shareholders of which

6,300 members Valoptec Association

France

6,788

Africa- Australia-

Middle East

176

Canada

505

Mexico-

Puerto-Rico

243



Board of Directors


Shareholders


ValoptecAssociation

ExecutiveCommittee


Executive Committee


Thank you

37

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