Strategy and Outlook Annual General Meeting. Hubert Sagnières May 5, 2011

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1 Strategy and Outlook 2011 Annual General Meeting Hubert Sagnières May 5, 2011

2 The Optical Market in 2011 A still significantly under-penetrated market A high ramp-up potential A growing, profitable mid-range segment A highly fragmented industry 2

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4 The Optical Market in 2011 A still significantly under-penetrated market A high ramp-up potential A growing, profitable mid-range segment A highly fragmented industry Acceleration driven by fast growing markets 4

5 Acceleration Driven by Fast Growing Markets Expected GDP Growth (in volume, constant price in %, IMF) China 8 India 6 4 Indonesia Brazil Mexico GDP growth = 5% 2 France UK USA 0 Spain Germany 0 10,000 20,000 30,000 40,000 50,000 60,000 Source: Essilor, Estin & Co. GDP per Capita (in USD) 5

6 With the Fastest Volume Growth Volume growth Lenses per capita 0,7 UK USA 0,6 0,5 France Hong-Kong Canada Singapore Singapore Ireland Source: Essilor, Estin & Co. 0,4 0,3 0,2 0,1 0,0 Germany Finland Austria Australia Netherlands Sweden Belgium Spain Switzerland Argentina Italy Slovenia Malaysia Taiwan Brazil Slovakia Portugal Japan Hungary Croatia Czech Rep Turkey Poland Mexico South Africa Russia China Thailand Indonesia India Indonesia Egypt India Philippines 0 10,000 20,000 30,000 40,000 50,000 GDP per capita (in USD) Number of lenses sold linked to GDP per capita 6

7 And the Greatest Potential for Average Prices to Increase Average price to end consumer per spectacle lens 200 (logarithmic scale, in ) Value growth Brazil Spain France UK Germany USA 20 Mexico Hong-Kong 10 5 Indonesia China Source: Essilor, Estin & Co. 2 India 2,000 5,000 10,000 20,000 50,000 GDP per capita (logarithmic scale, in USD) Average selling price also linked to GDP per capita 7

8 Our Priorities for 2011 Significantly increase exposure to fast growing markets Capture full growth potential of developed markets Continue to strengthen worldwide positions in the midrange market Leverage Equipment and Instruments division Accelerate worldwide development of FGXI 8

9 Significantly Increase Exposure to Fast Growing Markets Expected market growth in value (CAGR , in %) 9 MPc Ghana Kenya Serbia Size proportional to market volume 2010 Costa Rica Slovenia Kazakhstan Malaysia Chile Thailand Saudi Arabia Mexico South Africa Singapore Canada Portugal Columbia Netherlands Egypt India Indonesia Turkey Japan Russia China Brazil France USA Implement through a dedicated organization Focus on key countries (Amera and Latam) Leverage all Essilor s know-how Accelerate acquisitions Adapt business model to each country 0,2 0, Market volume in 2010 (millions of lenses) 200 Source: Essilor, Estin & Co. 9

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12 Our Priorities for 2011 Significantly increase exposure to fast growing markets Capture full growth potential of developed markets Continue to strengthen worldwide positions in the midrange market Leverage Equipment and Instruments division Accelerate worldwide development of FGXI 12

13 Capture Full Growth Potential of Developed Markets Japan Italy 11% Canada Spain USA France 34% 29% 25% 26% Progressive lenses Growth potential 98% Germany 78% Canada France 55% USA 35% 41% Anti-reflective lenses Growth potential Innovation at the heart of our strategy Stimulate demand for premium products France Germany 11% Japan 1% 7% USA Australia 18% 20% Growth potential Spain France 0,5% 1% Italy 2% Canada 3% USA 7% Growth potential Develop customer solutions & services Photochromic lenses Polarized lenses Essilor s growth potential is as strong in developed countries as in fast growing countries 13

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16 Pub crizal en francais - film 16

17 Our Priorities for 2011 Significantly increase exposure to fast growing markets Capture full growth potential of developed Markets Continue to strengthen worldwide positions in the midrange market Leverage Equipment and Instruments division Accelerate worldwide development of FGXI 17

18 Continue to Strengthen Worldwide Positions in the Mid-Range Market Bolt-on acquisitions 150 / 200 Multi networks All geographies Capitalize on export labs and Asian acquisitions to grow profitably in the mid-range market 18

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21 Our Priorities for 2011 Significantly increase exposure to fast growing markets Capture full growth potential of developed Markets Continue to strengthen worldwide positions in the midrange market Leverage Equipment & Instruments division Accelerate worldwide development of FGXI 21

22 Leverage Equipment & Instruments Division Surfacing Consumables Coating Edgers Continue to deploy worldwide distribution Facilitate the penetration of premium lenses Support growth of fast growing markets Strengthen Essilor s positions worldwide 22

23 Our Priorities for 2011 Significantly increase exposure to fast growing markets Capture full growth potential of developed Markets Continue to strengthen worldwide positions in the midrange market Leverage Equipment & Instruments division Accelerate worldwide development of FGXI 23

24 Accelerate Worldwide Development of FGXI Acquisitions Leverage Essilor s strengths Extend product lines 2010 Alt Channels Opticals Department Stores International 2015 Sales > $500 million $277 Million Sales A growth driver for Essilor and the optical market 24

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26 A Corporate Culture to Support our Growth Strategy Trading-up through innovation Conquering the midrange segment Acquisitions Expanding the market Operational efficiency Corporate social responsibility 26

27 Strengthened Commitment to Corporate Responsibility Our convictions: Strong management systems: Quality, Environment, Health & Safety A recognized commitment: Employee shareholding reinforces our culture Pledged to support UN Global Compact Essilor Vision Foundation Better Life through Better Sight Deployment of «Essilor Principles» to support sustainable growth 27

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