EssilorLuxottica Société anonyme (EL) Earnings Call Transcript & Summary

[Presentation] Good afternoon to everybody, welcome the ones that are here in person, in our venue and welcome to the other one that are connected in webcast. This is for us, it's quite special moment. I would like to spend just a few words to celebrate our Chairman, Leonardo Del Vecchio as you can feel, we all miss so much. We lost a visioner, we lost an entrepreneur. We lost our Chairman, first of all, we all lost a friend. I believe that this place is telling a lot of him. It's telling his dreams, how we project the future. He designed pieces of this building personally. And we spent the last 2 years really trying to shape the place in the way it can really share the vision that he had. Now we start this Capital Market Day is the second after the one that we had in London, and we are so happy to be in person again, connected and really take the best of the 2 experience. My job today is very easy. I will be very short. I will not explain pieces of our group. I really -- I try to give you some keywords, some password maybe to better understand our industry, to better understand our strategy and at the end, also to better read our numbers. We had this feeling in the past that we couldn't good enough to share completely the vision of our group, what we really are. And so we try to fill today this gap, and we started for with the visit. If you had a chance to visit our showcase showroom or what we call Tortona Experience Center, you first time you touch and you see all together, all product services that we manufacture, we distribute, you can feel the technology ones. And the market you will see is so unique that if you don't start sharing the clear understanding of the market and competitive dynamics it has become difficult to share numbers and our vision. I start from a video that we already had in London, this is just different things. Anything that you see is already done. This is the how it structure the competition in our market. [Presentation]

Not because we want to be bold. It's not how -- we don't want to show our muscle is totally opposite. In a market like us, this kind of competition put many constraints on the leadership. Obligation, some ethic problems sometimes and the responsibility really to think about the entire industry and not just to the group. I had -- and I tried to share some view of the market and the industry. We are the biggest in the industry, of course. But really, what is has to be understood is disparity in scale. That is something that will influence all our decision in the future and there is something that matter for everybody. First, for the final consumer. The second, our industry is unique, not just because there is so big leader but also because we don't see any other global players. We compete against niche players. You know very well the name that you usually underline that these are in the arena like, I don't know, a Specsavers full player in retail, then you have Marchon, Marcolin, Thélios that are manufacturer we have DSP that's competing with us on the management care. We see some producer of machinery like Schneider that is competing with us on the big machinery for labs. But as you can understand, we are the only one that takes responsibility to play in all segments. To follow the strategy to unify the offer because what you have in mind is clear, is that the customer at the end is one. But despite that, we don't see any players that is taking this challenge and try to manage all the technology, all the product to improve and to better serve our customers. Another thing that you really have to understand is also the market -- the geography of the players. We don't see any players playing everywhere. DSP is playing in U.S. Specsavers is playing in U.K. and in Australia and New Zealand. And everybody is taking one market and try to take out of the market the best they can. We decided because of our mission really to play everywhere. Also in market where it's very hard, maybe is not what we really is good in the short term for the company, but we try to be everywhere because we think that our customers need to be served in the same way everywhere. Fourth, and this is a really complete the set of information that you have in mind to read better our strategy that our industry is deeply interconnected. We are not just selling frame or lenses or machinery or services. We are supplying most of the players in the market. And we not supply just finished good. We supply acetate, we supply lenses when you buy Maui Jim, spectacular, frame and lenses, you buy Barberini fully owned by the group. And also all the -- our -- the brand, the luxury brand in the market are using as a key supplier, one of our company [ Fedon ]. And I can make hundreds of examples. So you see that the value added of the market is created through a full interconnection from our company to all players. And just to say that we are the biggest customers of Gucci or Thélios or Marcolin or whatever, but we are also the biggest customer of [ AVA ] that is sometimes is not so easy to understand. But we decide to play in this way. And then we arrive very quickly to the decision that we took some years ago, and now we are executing to be an open company, to support, to help everybody in the market. And that is really not easy because when we are meeting and we have to judge our new strategy, usually, the only question that you have to answer is how is profitable for a group? How is good for our strategic position, but this is not the approach that we are taking anymore. Now we ask if what we are doing, it will be good for entire market. That is not just because we want to be as fair as a good company we believe this is an obligation from 1 side, but what's more, really, this is constrain. We are in many part of the world, we are a proxy of the market. That means that if the market we grow, we grow maybe better, more profitable than the other, but we grow. If the market will not grow, we will be at a certain point in trouble. So that is the position. That is the information that I'm trying to give you and to really end in the best way, fortunately, we are in the market that is growing naturally. Because of aging population because of myopia is more present in the faster growing population and so on. So we believe that we are in the best position now to change our strategy to adopt this new model and support the market. And we believe that this can be a model that really can inspire our industry -- other's industry that are really struggling. They are competing while the market is dying. That is something that we don't want for our industry, fortunately the industry in a great shape, but I believe the big change has to happen when the industry is doing well. With that in mind, hand over to Paul du Saillant, and he will give more color on our assets.

Thank you, Francesco. Good afternoon, good morning, good evening. My pleasure to be with you here after 3 years ago, like Francesco was reminding us being in London. Very special. So I will try after what you heard from Francesco, the strategic vision, which is very powerful to give you granularity on what has become EssilorLuxottica since the last time we were together, a lot has happened and what we are aiming to deliver. So I will take 3 prism to explain and give some strong substance on what we are doing. First, I remind you we are really a new integrated end-to-end omnichannel company. Francesco referred to our Chairman. And he had a very strong vision about this integrated end-to-end omnichannel. So it's a great legacy that we have but I put the word new because I think the company that you have in front of you is a very young company. So 3 prism, First one is what are we in terms of assets, and I will really try to give you good color on that because it's important to understand what we have become. Second, how we have successfully integrated to world-class companies and more recently GrandVision. And then how does the M&A activity fits into that. So very simple, few pictures on the company. People wise, you have 180,000 people, 60% female, representing all of the competency expertise craftsmanship of this industry. Half of us being less than 35 years old, I am unfortunately not in that category and 40% of our employee being [ older ], very important element. Second, we have a unique brand portfolio -- product portfolio. I won't go in detail, you know it, you have seen it. It's the best way to share it with you. But in this industry, to have for all segments, all categories of product at all price points that we can deploy in all geographies is a major asset. Okay. So remind -- keep that in mind. We have this number that we have 6,000 years of heritage in our brand. If we accumulate all of the life of all of our brands retail, lens brand, frame brands. Third, innovation. Of course, Federico Buffa, Norbert will give you more color on that. But it's important in an industry which is a complex industry to have the portfolio of patent of knowledge and at the same time, to be able to put to market 3,500 models, new models every year. It's a major capability for us, for our partners, for the other players. Fourth, we have a go-to-market which is quite unique, being able to be balanced in between professional solutions and direct-to-consumer. It's very rare to find an actor that with the assets I described is able in every single geography to go into the market and to contribute to the overall development of that market in a balanced way. It demands very good commercial discipline, segmentation, price management, brand management. And that is the core capability that I wanted to really -- and you will hear it from our executive as we go through the afternoon. We are global, Francesco said it. We are balanced in between in mature markets, in between North America and Europe and the acquisition of GrandVision has really rebalanced our presence in the mature market. And we are sub developed if I can talk like that, in the emerging market, the entire market needs to be grown. We are only 17% in the emerging market. This is a great opportunity for the group because we already have presence we are already present with our team in 150 countries. And key to keep in mind is that the structure of the group gives us a local presence with local teams with this omnichannel presence that is different from country to country. And at the same time, with global capability. This is a very important aspect. And last, it will be covered in the afternoon, the supply chain. The supply chain in this industry is complex, frame, lens of all kind of categories, global plants for frame for lens, local lab network . So you have a supply chain behind this. I just described, that is powerful, flexible, agile, that Giorgio will give you color on it. So please be mindful to take the full understanding of what is EssilorLuxottica because sometimes I get we have the feeling that it is not totally understood. And it is a current company totally under control, and it is not a complex agenda actually because it's a clear purpose. It's a clear product and the way we go to market is very clear for our teams. That brings me to the second prism, which is -- okay. We were a few years back 2 or 3 with this big question, how are you going to make it one company? And I have to say -- I have to admit this was an impressive task that we had in front of us to bring together to combine Essilor and Luxottica, Luxottica and Essilor and later on GrandVision. Okay. And I'm quite appreciative and admirative we say in French of our teams about what they have done and in such a short period of time because of this difficult task. We have been able to become one company, fully integrated in a pretty short time agenda, okay? Francesco will challenge we say, well, we still have a lot to execute. And yes, we do, and we are working with the team. But we have become really since 2021 one company. What does it mean? It means that we have creating the new culture together. We have put in place a single organization with clear accountability which is very well deployed throughout all of the elements of the company. We have deployed the eyes on the Planet Foundation, which is our sustainability mission agenda, very clearly well positioned at the heart of the creation of Essilor and Luxottica and we have -- you saw it a great learning and knowledge platform, Leonardo, that is behind the whole EssilorLuxottica in the industry. So very clear core cement to bring everything together. Then 2 key ideas for you to keep in mind. We have developed a new growth agenda, the top line agenda. I won't go into detail. You heard us in the calls, in the report about the top line synergies the cross-selling, all of the key categories, how we improve the penetration in each of the segments. You have heard us talk about all of the product innovation, creating new categories. You have heard us talk about and you will hear this afternoon about the whole new partnering with key customers. So there is a new agenda on the top line growth that is very rich. And then third element of creating this one company is, of course, the backbone, the infrastructure. Big work on the supply chain big work on the IT digitalization agenda, simplification of all of the back office, unification of the process. So this is 2 or 3 or 4 minutes summary of the integration. But what I want to leave with you is this company you have in front of you this afternoon is one company fully integrated, that has successfully become EssilorLuxottica with a very fresh agenda in France. The third, and of course, GrandVision, Max will talk about it, is part of this agenda, absolutely. Third prism the M&A. Because what I described is really the way, I know you like to think that way, the organic growth engine. Now the 3 companies, the Essilor, Luxottica and GrandVision have been -- I won't say best-in-class, but have been quite good at doing M&A. What we wanted this afternoon is to give you a little bit of color on this M&A activity of the group. The scope, it's simple, it's the full paying field. So don't ask me what are the kind of area in which you do your M&A activity. It's the playing field as it was described by Francesco and me in the last 10 minutes. But what is interesting in this time is to look at it by saying we have a bit 3 ways to M&A in the market. We have acquisition, acquisition like GrandVision. Acquisition is that completely changed the scale of our direct-to-consumer presence, as you have you know. You have acquisitions like Barberini. Barberini is a beautiful brand, and is the world leader in mineral lens. This is a core capability and they are best-in-class by far. And like what Francesco said, on top of that, it's a category that is used by everybody once you have luxury sunglass brands. Fedon, you saw it in the back. This is a vertical integration example, linked to sustainability packaging. Xiamen is another angle completely. 10 years ago, we created a JV with Xiamen, very innovative [ Tebot-based ] company with research, advanced research in lens mathematics, and also very good commercial presence throughout North America, Europe, some countries in Asia. And we decided to go to 100% ownership in full support of the key boots and now it's part integrated part of EssilorLuxottica, great asset for R&D, for commercial presence. Last one last example of many, Walman. Walman was the largest lab -- independent lab in the U.S. with a very interesting Midwest presence that came to complement our network and that is a great asset to continue to cover the market in the U.S. This is main acquisition. Partnership, you know the importance of partnership. We have 100-plus active JVs with 51% ownership, 60-70, 80-90 depends. We have JVs like with Nikon Corp for -- which is this Nikon-Essilor or JV, the name of it, key for Japan market and for access to a key brand outside of Japan. Bolon-Essilor is an example of a 50-50 JV in China, which is the leader sunglass and optical frame brand in China, very complementary to our other portfolio plan. And last one, it will be covered on myopia is this JV we did with Cooper to acquire a second technology in the field of myopia management. Now what might be a bit new for you is what is called this main minority investment. It is interesting linked to what we explain as this open modern network company. We think it is an interesting topic to have minority position in some key players, key actors of the market. I took, for example [ Maui Jim ] is this company -- Italian company in acetate, which is very advanced in bio acetate and the whole circularity agenda. Mister Spex is the e-commerce leader in Europe. Based in Germany with a go to market also interesting with an omnichannel participant, [indiscernible] retailer in Japan since some key retailer in the Nordics. So that has some interesting subscription model. So through that, I just wanted to open and to structure a little bit our M&A activity between the main acquisition, the partnership and the minority. It gives you color also how we complement the entire strategy of the open model of participating in the growth of the industry. So these were my key message. And I hope that you feel from that, that we are a unified company with amazing assets in the heart of that industry, occupied to grow the industry and to grow with the industry. And that has successfully in a short period of time, become 1 integrated company with, I think, very good values, very good agenda. Francesco, this is what I wanted to share before we invite and stage somebody.

Okay. Thanks, Paul. So now I have pleasure to introduce really a special person, Dr. Amir Khoshnevis, he's a doctor, first of all. Second is an entrepreneur is run a fantastic practice in U.S. But what more for us is the doctor and the person that helping us to really partner -- to be a partner with one of the most amazing alliance group in U.S. Amir come on stage.

Good afternoon. It's a pleasure to be with you all. My name is Amir Khoshnevis and as Francesco mentioned, I am Chief Medical Officer for Vision Source. My story a little bit, just so you know who I am. I have -- I'm an owner of 2 private practices in the United States but for 25 years, I've been in practice in optometry. And for the last 20, I've been a member of Vision Source. It's been very near and dear to my heart because Vision Source was the way that I would take on the market as an individual. It would be my X-factor in the practice, the thing that accelerates my practice growth because I'll share with you how this organization works and why it's so important. Then I became a leader in a region of the U.S. for the company as I started to share my story and helping others grow and succeed. Then I became an adviser to the company, and eventually, over the last few years, I've taken on a role in the executive team as the Chief Medical Officer because I care so much about private practice and the way that we operate. So enough about me, who is Vision Source? So Vision Source is simply put a collective of private practice optometrists who are outpacing the industry in growth, leveraging the EssilorLuxottica relationship. And if I were to share with you what the organization is, I would break it down in these 4 pillars. It is a very large group of private practice optometrists. Traditionally, groups like this don't operate like we do. We are very much a group that believes in locking arms and moving forward together. We point our practices in the same direction because we believe that if we were to move together that we actually have a bigger impact on the industry. The community is by invitation only. They join Vision Source, once we invite them. They are leading practices. They are the kind of practices that the industry admires and wants to partner with. But we bring the culture to them sharing, collaborating, meeting, making sure that our doctors are working with one another so that they can solve for problems and move forward. But most interestingly, we bring them resources from the industry. We bring them programs that are curated to their type of practice, and we elevate their ability to compete, to serve and to hopefully excel in practice. One of the things that's critical is that we've had a 30-year history. And in that 30 years, we've built a very strong culture of trust. That, in fact, our currency is trust. So when we partner with EssilorLuxottica, our goal was to make sure that they understood they had a real partner. They're a partner that was going to invest in their growth. It was not apparent initially, but I'm very excited to share with you that over the last 6 to 7 years of our partnership, this incredible network has seen the fastest growth per office in those 7 years. It has the deepest penetration of our programs into the practices and most importantly, member sentiment. It is currently -- we currently have the highest Net Promoter Score in our history. And that should be a perfect proof point that a partnership that's meaningful that is genuine that is collaborative, can have a powerful impact even on private practices that traditionally did not partner well with the industry. The second thing that's important to note about Vision Source is that it is a very mission-driven organization. We believe as optometrists that we have the responsibility to not only protect private practice, but to elevate the care that our doctors are providing to the communities, we are the gateway to the health care system in the United States. And we invest a great deal in learning and development, and we teach the ways that they should take their practice in the market so that they are completely taking care of the patient. That is not just refractive or just medical but the total care of the patient. This mission to strive for excellence has given us the opportunity to work with the industry to provide those resources necessary for those doctors to reach their full potential. As you can imagine, if you are a doctor owner, you're so busy seeing patients that it's very difficult for you to actually do all that you want to do outside of just patient care. We partnered together to make sure that their practices have the foundational items needed to be successful without the heavy lift. They get to take care of patients and win. This commitment to excellence has led to not only improvements in patient care but outcomes. We see in the health care system that our doctors are at the very top of the outcomes index. They also are caring for over 10 million patients per year. That is an incredible feat for practice -- for a group our size. That's a deep trusting relationship with the community. But the secret sauce of Vision Source by far, is what we love to share with you. We have recruited the 200 most loved, trusted doctors in any -- in the communities. And these doctors now are responsible for their tribes, if you would, their network. These doctors are the people you'd admire in the community, their practices are the leading practices, and they give us an opportunity to have them vet programs to guide us as we make decisions for our practices. They communicate directly with our partners like EssilorLuxottica to make sure that when we go to market, they have tested the programs, they have proven it to work in their practices, and they carried out to the market from a firsthand perspective. What that does so beautifully is that it builds a bond that is much more than just a strategy to grow, but it's a deep partnership. And a proof point for that is the general ECP community outside of Vision Source, no matter how good a program is, may get adoption rates of 20% to 30% on a program for some time. Vision Source almost always can get 75%, 80% adoption rate immediately because of the way that we collaborate and work together to bring to market solutions bring to our member solutions that are advantageous for them and meet our mission and values. So behind me, you see a lot of ways that today, we've partnered with EssilorLuxottica. You see all the resources that they bring to us. And all of them are critically important at the practice level. We feel very strongly that the support that we're getting from EssilorLuxottica is giving our doctors a chance to truly lead the market. They are the tip of the spear in optometry. But I want to just mention a couple that are really intriguing growth opportunities. We met with the leadership at EssilorLuxottica and shared with them one of the challenges we face at private practice is sort of the inefficiency of practice, the practice management software, the solutions that we need in order to create better patient care, better management of our practices, the ability to communicate better with our patients and draw them to our practices. Private practice is riddled with inefficiencies. And this is a major opportunity. I am so excited to share that we're working together to launch practice technologies that will improve the practice, efficiency and deliver the kind of practice management that we need in our practices. I believe that's a very big deal and a massive opportunity for growth in Vision Source. Another opportunity is myopia. It's no secret that myopia is owned by optometry in United States. We see those patients today. But Vision Source has been on a journey to make sure that our practices are ready. They're already treating myopia with everything that's available today but they are extremely well positioned as a strategic partner to go to market and to lead optometry in North America in myopia management. We have specialty protocols, learning development courses. We have practice management courses already done, and the vast majority of our network has already taken part in that. So another wonderful opportunity to go together. I'll mention teleoptometry because it's a really neat opportunity. We have been on a journey for 5 years to look for cases where teleoptometry can support our members. And most notably, we have practices that are rich with patients, but cannot see any more patients because they lack doctors. And this enhances the practice as a side-by-side opportunity to continue to grow the practice, see patients in the practice while the doctor is seeing one of patient, another one can be seen. That's an awesome growth opportunity. Another one is expanding hours, creating new patient traffic. And also, we have a lot of rural practices in the United States where no doctor is going to be present when the senior doctor retires, and we are creating a hub-and-spoke model to make sure those practices are alive and well and thriving in those communities. We don't lose them. And lastly, what I think is most important to me is practice succession. With the partnership that we have, we've created a solution called Vision Source Next. Vision Source Next is a life -- practice life cycle solution that looks to address the pain points of doctors in the practice. So whether you're recruiting talent into the practice, whether you're looking to expand into new locations, add new practices to the field, or you're looking to transition out, but want to ensure that you sell to another private buyer, we have formed a fund that allows for that transition to happen and to support the doctors through that. This is at the heart of Vision Source. When you want to win people's hearts and minds, you take care of them in these pain points in their career. So I hope this gives you a sense of how independent or private practice optometrists can partner with EssilorLuxottica to elevate the care and elevate the profession together. And thank you for the opportunity to be here.

Good afternoon, good morning, good evening, everyone. So here, we are going to introduce supply chain and carbon road map. So we will talk about our footprint, our network configuration and the innovation and also the sustainability road map that we have into our operation. So in the past 4 years, we worked with our organization to create an integrated and resilient supply chain. So we work it in a very diligent way through work streams and KPIs that we're able to deliver the majority of the total cost synergies of the group in the period. We maximize the in-group production. We rationalize the footprint, leveraging the large campus for mass production that we have of frames and lenses. We work on acquisition and joint venture leveraging brand equity of a selected partner, and we rationalized the organization. Announcing a clear governance with clear leadership with a wide group responsibilities. This is what we have done in the previous years. And then as a result, we have a very integrated supply chain, which helped us to serve better the market even during the difficult times. We were able to do that in a very effective way. So one single supply chain obtained through simplification and standardization and unlocking the new opportunity in terms of a new product and new services like the complete pair, like the Sun Rx, like the digital services that we brought into our brick-and-mortar or the wholesale market. And also taking the advantage of the difficult situation of the pandemic, we create alternative production and alternative distribution routes in order to make a more resilient supply chain. So a supply chain that is trustable, reliable and efficient in all conditions. This is what we did in the past 4 years. And of course, with the mindset that always distinguish the product and the operation teams is not adjusted to overcome the difficulties or the specific challenge, but also to look at and to be ready to cope for the next challenges according to the strategy that was introduced by Francesco and Paul. And therefore, we planned the footprint in order to be very specified for service and quality excellence. We leverage the asset that we had, and we expanded from that. Of course, we have many different products with different [ typicalities ], frames, lenses, Rx jobs, instruments, equipment, digital services that require a very flexible approach because we need to provide in the right place with the right size, with the right level of complexity to cope with this the market -- the flexible market demand. So we leverage the asset. We leverage the asset in Brazil in order to make an integrated campus that it's offering all the products and services for the Latin America. We leverage the asset in Mexico to provide nearshore approach for the U.S. market. So offering all the product, all the services with a great lead time and cost efficiency. We leverage the asset in Europe, in Italy and France to provide very complex product with premium services 24 or 48 hours. We leverage the asset in Poland to provide offshore, nearshore approach. So good service with the cost efficiency for the European market. We leverage the asset in India and Thailand, and we expanded those to support a very efficient services for the European market. And of course, we leverage the asset in Thailand in China to support the expansion for the market in APAC. So we always have to balance. From one side, we have global integrated campus able to cope with the larger scale, large volume, large complexity, highly automated. And of course, that they're able to provide them the same shipment, all different type of product and even the latest customization of the product. And on the other side, we have local proximity stock points that are capable to serve local customers with a premium service on a selected categories of product and we have more than 500 of those stock points inside our network. Of course, the way to reach quality and service sales. For us, there is only true innovation, cutting-edge technology and continuous innovation is part of our DNA. If you visit our factory, you saw that they are highly automated. Automation is not enough to be reactive with the market. So automation today is also supported by data science or artificial intelligence to elaborate the process data and to find the best production configuration. We adopt real-time data manufacturing in order to take a fast decision and also to have large adoption of robo-handling inside our manufacturing. The adoption of robo inside our manufacturing, it's equal to many countries in the world or even superior of the average automotive industry into our factories. Vertical integration. If we need to be proactive with the market demand and to have always the right stock, we need to have the capability to change and to adapt and together with the vertical integration, now there is the horizontal integration. That is able to extend the product and the process innovation into the brick-and-mortar facilitating faster replenishment, waste reduction, inventory accuracy. And finally, of course, we are not only improving each single area, but we are creating synergies, lens design, frame design, high measurement instruments, equipment for the manufacturing. We are putting all together, we are touching every single step of the customer journey so that we create an unbeatable experience for our consumer since the very starting touch point inside our perimeter. And the way to do that also through sustainability is on carbon. The sustainability road map has solid route since many years already into our daily operation. We started our renewable project of producing energy through our photovoltaic partners since 11, 12 years ago. And we are continuing doing that with the new design of the building and not just through renewable energy, but also with the sustainable design. We have a process optimization, thanks to the automation and the innovation that I was mentioning before in order to reduce energy, to reduce the water utilization to reduce the emission in air all the energy that we buy, we procure its 100% from renewable sources. We do care of the communities where we are creating reforestation project in order to incentive the wellbeing of the territories in which we are present. And also we offer to our customer, e-commerce customer or brick-and-mortar customer, the possibility to select the green shipping option. The greener way to ship the product certified by third parties. Innovation and sustainability goes along together in our journey, in our daily activity. It's not just inside the process but also is inside the product. And now I leave the word to Federico. Thank you very much.

Thank you very much. We are always aligned I don't know in the dressing code like this morning. So welcome to everybody. It's really a pleasure to have you here altogether. When we are talking about innovation and product I hope you enjoyed the visit this morning at our [indiscernible] because our boots representing all the brand is showcasing today all the product that in the next 3, 4 weeks, they will reach the market. And they are already bringing visible level of innovation, as Giorgio was saying, fruit of the fact that we were really capable in the last 3 years to join also the forces in R&D. From Xiamen to Transitions, Barberini, Mazzucchelli. EssilorLuxottica really, we got a lot of contribution in the R&D skills that give us the opportunity to have in the market already this season, a lot of integrated innovation. Talking about innovation in the next 8 minutes or 10 minutes it depends on how fast I will be. We will try to give you the opportunity to share with you the vision that EssilorLuxottica is having on 2 main branches of the R&D where we are really accelerating and shifting the gear. One is the smart glasses and the other in continuity with what Giorgio was saying on Eyes on Carbon, Eyes on Circularity. Let's start from smart glasses. What we want to stand for in the -- in this world as EssilorLuxottica. Our aim, our vision is really to be the right partner in building the journey to the metaverse. Specifically building the gateway that we all our consumers, all of us in the next future to enjoy the possibility to physically and virtually join the information and those 2 words together. So mainly addressing our attention to the devices that in every daily usage will allow us to have access to the augmented reality. Naturally, this journey, we are doing not alone. You know very well that we are partnering with Meta that is one of the biggest player that is designing the metaverse -- still designing the metaverse. And the way in which we will do is following mainly a pace and a journey that has to be very easy to use and very comply with the excellence of the product that today we got in the analogical world. So in this case, Ray-Ban Stories was the first product launch with the aim not to disrupt any technology or any new use cases, but really to give the same iconic wayfarer Ray-Ban confidence to our consumers simply having some few superpower. And this kind of journey will be really in sequence, okay? And what we can do to continue this journey. So what we need to enable, okay? We call this human interface evolution is really the right approach because on one side, we are really investing in terms of research center, M&A, JD in revolution, 3 or 4 technological bricks that they are still missing to make this journey available. And in a few minutes, we will go through on the other, we really want to evolve, simply evolve and continue the journey that our brand, our consumer, our product has to do in continuity with the expectation of the right variability, the right look and feel, the brand awareness and the right use cases. So an evolution in adoption and a revolution in the technology. Why evolution? Because 3 of these blocks will be a revolution for enabling us to get the smart year running perfectly and everyday usage for the augmented reality, but they are also revolution in other industry. The first 1 is the Eye tracking. We recently communicated that here in the Polytech of Milan, we are investing more than EUR 50 million for opening 3 research line regarding Eye tracking camera and sensor. This kind of technology is what will enable our device to understand where we are pointing our attention in that moment. That means that our device has to know which is the environment around, but moreover, what we are looking in the physical world in the moment, pointing our attention. This is really a technology that is giving us the possibility then to combine the digital world in the physical world, but also to other industry, you can imagine also automotive started with some early application of the Eye tracking for accident prevention, but you can imagine other industry, the capability to understand exactly where we are looking in that moment is becoming very important. So this kind of R&D is really 1 of the big Techno brick that we want to work, and we are investing as a group to make smooth the adoption of this technology inside the [indiscernible] The second 1 is the super audio. So Ray-Ban Store has already got inside the possibility to have an open ear experience. So while you are listening Giorgio's voice, you can also listen music or receive a phone call. So combining two experience, nothing is revolutionary. But in reality, we are investing both in California and also in Israel to announce a couple of technology that from a space point of view and from a unidirectional point of view, will enable ourselves to have a kind of what we call super power so the super hearing. So not only addressing our eye attention on something, but increase our capability to listen exactly where we are looking to. So in this moment, again, is another combination of augmenting the reality in the same moment in which we are appreciating in the physical world. This is another big chunk of investment that we are doing and also with some M&A coming up. The third 1 is probably the most complex but also the most revolutionary is what we call the lens play. So lens display, the way in which we will be capable in our lenses to display the digital information exactly overlapping the point of physical world where we are looking to and adding the information that we are interested in. This means that our lens has to be what we call laminated, so as to combine in a multiple stack in a fully transparent manner, all the actual value. So I don't know, filtering the light, polarizing the light or correcting my prescription, but moreover, to combine wave guides, micro lens projection, holographic treatment to visualize the image exactly in a seamless mode. This is not yet a mature technology. We are all working together also with JV with partnership, and we are investing, especially in Europe in this moment in between France and Italy because we strongly believe that this revolution of managing exactly and precise overlapping on a transparency to face like lenses will enable also other segments. You can imagine construction. Here, we've got probably the biggest windows in Milan. You can imagine how in the construction, in the transportation, in train, in aircraft, in the automotive, you can really include what today has been called heads-up display inside any transparency to face. So this is the reason why all those kind of investments, we are not doing alone. We are joining the forces. We are collaborating with other partners in the Polytech of Milan, we will -- we will be in the same research center with STM Microelectronics. In other locations, we will work also with big giant of software because we really need to have everybody on board to revolutionize this technology, and on the other side, make step-by-step the journey and continue the journey that we are doing in the smart eyewear. So this is the first chapter. The second 1 is a little bit complementing what Paul before was referring on eyes on the planet, and Giorgio was referring to eyes on carbon. When we are talking about product innovation, we need to talk about eyes on circularity. This slide is simply summarize why as a EssilorLuxottica, we can be really powerful on eyes on circularity. First of all, because the circularity is starting from the design. So we are really addressing training and addressing all our designers for all kind of products to, first of all, design something that is suitable for circularity, design for. Using the right material since the beginning. If they are biobased, biosource [indiscernible] fossil carbon or by renewal sources or recycling, so reinventing upcycling material that are already present inside in the company or designing process that they are consuming less material. The last 1 is 1 of the most important program we internally call [indiscernible] that is a design of optical lenses that sends the calculation system to correct my prescription, his prescription is starting from a thinner stack of material. That means that we are grinding less material during the generation of the optical stack. The second one is not do it alone. What does it mean? On one side, leveraging on external partner that can certify that what we are doing is really measured and proportional. Here, we just put an example related to the recycling of nylon when in Italy every day, we are mechanically internally recycling more than 100 kilograms of nylon and this is certified ISCC+. But moreover, the partnership can be inside the group and outside. What does it mean? Outside we can really work with the other partner like Varilux that with Costa Del Mar and [indiscernible] collection. We are recollecting the fishing net released in the ocean. By the way, those are polyamide. So polyamide like our raw material. But polyamide can also allow us to do circularity internally because polyamide or polycarbonate, they are present in the lenses, in the frame, in the packaging. And moreover, if we extend our ration of up-cycling, something that cannot be up-cycled in the lenses can be up-cycled in the frame. Something that cannot be up-cycled in the frame can be upcycled in the hard core of the packaging. Something that cannot be upcycled in the packaging can finish in the POPs or in the point of sales, trade material that is communicating seasonal collections. So really, the vertical integration, again, is coming close behind us to support also on eyes on circularity. So this is really complementary with what Giorgio was saying on eyes on carbon and a little bit complementary on the innovation that we are investing as a company in the process, in the operation and in the product. I'm assuming that now we are opening up, we are opening the first session. I need to come back. Hey, Alexa. Okay. We will open the first session of Q&A related to our session.

Susy Tibaldi from UBS. I have 1 question for each. On the supply chain, so you explained you showed was down from 2018 to 2022 which was quite a lot. And so I wanted to understand like, is that all the integration already took place now you're operating fully as 1 company? Or how much more is there to do to fully optimize to reach really your optimal supply chain capabilities and integration? And the question on smart glasses would be, if you can give us a bit of a flavor on how has been the success of these Ray-Ban stories? How has been the adoption rate from consumers was the feedback? And also when you're thinking about all of these additional capabilities in the smart eyewear space, like what kind of time line are we talking about? I think everyone can have a different idea, but you probably are very close to the development. So how long before this screen on lens season becomes a reality and a product that actually we can wear on a day-to-day basis.

Okay. Thank you for the question. So, for us, Luxottica integration is over, we already one company. So we integrated and we simplified what was the network coming from the 2 companies. Now we are only 1 organization. So now it's part of the integration. It's more related to GrandVision. How we can integrate the GrandVision asset into our footprint. And we are expanding the network that we create after the integration in order to sustain the challenge of the wide group. So the new investment that we are doing and Stefano will talk about all the CapEx investment are done as a result of the integration, moving to the next challenges of the new unified companies. So integration is over and it's more expanding from what we have already done, and we are executing that. We design, and now we are executing.

Okay. So we'll go with the first part. So Ray-Ban stores, apart from the fact that the program is still open and up and running every day. So if you want to buy, it's also a good product. And it's really -- for us, it's the first launch. So first of all, it's a success because it's a lesson learned. We learn a lot of stuff in reglementary. There are already some few, few countries also in Europe that we don't have the authorization because the assistant has to be in the language. So we are really learning by doing, but the program till now is running in a smooth and continuous ramp-up. There are say, still some features that we need to implement. Recently, we launched also the connection with Whatsapp. We will, every month or every 2 months, release new features and the adoption rate till now is probably the biggest in the wearable space. And so we cannot say if it's enough or not or if we are satisfied or not. So we are running at the right pace in the right region. The program is will still be active a minimum for another year, enlarging the scope of utilization powering the software, enlarging the scope of distribution heading countering and assistance. So this is the status of Ray-Ban stories. From a product perspective, we are super happy because it was also the first time that we internally produced an electronic device. And I can sincerely tell after 1 year that we really do not have any quality issue neither in the launch, nor during the market. And the appreciation from an esthetical and functionality point of view has been really well scored by all the kind of ranking, okay? Also the tech rank always underline that the product in terms of shapes and functionalities is acting good. To the second question is -- there are still a lot of open point. Like any technical adoption, we are expecting, especially talking about the lens play, so the addition that will be probably in a range of 3, 4 years appearing some techy exercise, okay? So not as seamless and smooth usage of the technology, testing the maturity of different systems, wave guides, holographic and so forth. If I have to project myself in, let me say, in a complete access to the metaverse probably is more after 5 -- around 5, 7 years. In the target that we are looking to doesn't mean that we will experiment. And as I told at the beginning, Ray-Ban stories with the next program with the [indiscernible] will be a continuous release of product increasing the super power and increasing the technology. The most complex one that will combine everything, super audio, tracking, lens play, lens display, probably will have the maturity in a range of 5 or 6. It depends also how we will be, as a system, fast and developed.

Cedric Lecasble from Stifel. Excuse me to come back on the past also on the '18, '22 period, but for the integration of supply chain. So are different levels, you have the software. You have 2 companies becoming one. You have the flows of products with the hubs, which weren't in the same locations, not too far, but not too close. So maybe you can explain us what -- how you have come to a single company in terms of maybe software integration, probably it's done? But in terms of flows of products, how does the frames and lenses come together, whether you had different locations for your hubs in the U.S., in Europe and in China?

Thank you. As you said, the software integration, the system integration was really the backbone. So from 1 side, we look at the network, on the other side, we needed to have a big enabler that was the software. Okay. So integrating the software, of course, we had the possibility to have access by system to all the product, all the categories, all the master data and anagraphics for all the product, the customer and so on. And then we start understanding on which product has to be in which place. So there was a detailed team of a supply chain that was working in a very analytical way. So country by country, region by region, we design what has to be and where, and with also which level of size, okay? This is what we did. So it was, again, a 4 years work with the daily activity with a very disciplined governance project, work streams, monitoring, checking the KPIs. So something that we look at 4 years every week. And now that we are benefiting from the activity, we have started and executing the new design, so the next step. So again, it was a team work, larger team, okay, coming from the 2 companies, bringing the respective expertise in their field and putting together under a clear leadership. So the key point was to assign the clear leaders for each function that was capable to put the 2 experience altogether. so there are hub.

No, just to understand what has changed in the organization, how it was before we had 2 companies that we were working on with different organizations with different hubs. In pushing the frames and the lenses to the same places to have a unified product to offer to the optician, from the outside, it's not easy to understand what has been done precisely.

Okay. So for instance, I can mention a few examples. For instance, inside the warehouse in it distribution center in Italy. We had also the Rx prescription capabilities, and we move the customer let's say, previous Essilor customer to be served by that hub, and we closed the location that were serving as hub. In Poland, we moved some part of the frames in Poland to provide the complete pair for the customer of that area from that Polish hub, okay? We did a similar approach in Brazil. In Brazil, before we had a plant for frames, a distribution center and another hub for lenses, okay? We consolidate. We put into one look, we create a new location, an integrated hub, and we consolidated, reducing other warehouses that were just dedicated to a specific category and concentrating into one integrated warehouse. We are doing the same in Peru. We are doing the same in other labs in North America. We closed some labs where there was a duplication because of the proximity, and we streamlined into lower number of locations in order to provide the same services. And everything was possible, thanks to the system integration.

Luca Solca from Bernstein. A question for Federico on Ray-Ban stories. How much of a limitation do you think is the fact that you have an exclusive partnership with Meta while the operating systems on which apps are developed are controlled by Apple and Google to a large extent? When you think about the medium-term development of apps for smart glasses, how can they integrate functions such as geolocation, for example, or augmented reality and is not within the planning horizon? Then a question for Giorgio, on the back of the redundancies that you've built in the EssilorLuxottica's operations globally. Are we right to assume that the current COVID-19-related disruption in China is not an issue for you. And as I am it, how are you coping with the factor cost inflation that seems to be ramping?

So I will take the first one. So naturally, the history of the partnership with Meta is quite clear. So the 2 entrepreneurs met themselves, got the share a vision of the metaverse 2 years ago and we decided to run the first step together, okay? The role play inside this kind of partnership, the results of friendship, but it's quite clear. We take care about the device, okay? So we will concentrate all our efforts in making the perfect device to gateway and make this vision possible, okay? So we will place -- if we layer the journey between the consumer and metaverse, we will sit in between the infrastructure, 5G, 6G and the space computing of the creator. So this is the reason why we are limiting our attention to that. And this is the reason why we need a partner that anyhow gives us a vision. Doesn't mean that all the technology that we are investing in make these devices can then not function with other application, with other systems and so forth. So for the moment, we do not foresee a limitation, but we foreseen robust friend that give us the north pole limited to the devices. Thank you, Luca.

So the 2 questions. China, China, we were not impacted so much by the first wave, let's say, in the beginning of 2020. That was a big learning phase for us in order to create a protocol and procedure to mitigate the potential impact of arriving the COVID within our premises. We had a small impact in Shanghai when it happened during the -- before the summer. So there was the Shanghai lockdown, and we have facilities for lab and lense mass production within the Shanghai area. But thanks to the organization to redundancy and the protocol that we created, we were able to cope with that. We immediately leveraged the flexibility around the network, first, using the other assets that we have in China for mass production for lenses and also levering the asset that we had in Thailand in order to support. So -- and during that period, we had a good business in China itself because Shanghai was under locked down, but the other cities were not. And we were able to provide the services even during that difficult time. So we -- maybe it's never enough for the experience, but we've got a good experience, a good protocol in place and good flexibility of the network to cope with the COVID or any disruption. Related to the other question that was cost inflation. So the cost inflation, this is a very nice question. Because there are cost inflation, energy cost, very high, logistic costs, very high and labor inflation, very high. Okay. Energy inflation is very high, especially for European countries. Okay. We see increase everywhere, but the big disruption in energy is coming from European countries. And in terms of a global exposure, Europe is not the major contributor in terms of manufacturing, in terms of made in Italy frame production, yes. But if we look at the overall, okay, so more than 60% of frames are coming out from Europe, and the majority of the lenses are not coming from Europe, and therefore, it's headache, but it's not a terrible headache, okay? The energy inflection. The big headache is labor inflation, to be honest, because we see labor increase across all the geographies, not just in a mature market like Europe or U.S., but we see also inflation in the emerging markets, we see in Mexico, we see in Poland, in Thailand. Of course, how to cope with that? We are pushing strongly in terms of productivity increase and automation. I was mentioning before, robo handling. We have a large number of indirect people that we are reducing because we are implementing such kind of automation in order to reduce our number of people that do this non value-added tasks. So -- the key point is to reduce the number of non-value-added task and to be executed by robo machine and to have adjusted the workforce for the key value-added activities that cannot be replicated by -- only by machine, but can be done in collaboration with the machine. So labor inflation, it's a bigger take on which we are focusing. And of course, we are supporting through the flexibility of the network the mitigation of the labor inflation playing between the different geographies. We have to leave the chair to our friends, Norbert and Arnaud, that we will drive you through the next chapter of innovation and myopia. Thank you for your attention. Thank you.

Luca, actually, it's not my style to answer questions of other people. But given the fact that Giorgio and myself are partners in crime, let me just give you one more explanation why we managed the Shanghai lockdown that well. Our Shanghai employees, a couple of dozens of them, 1 on tier to get locked into the factory for almost a month to keep service and production up. That is the style, how to work in our company. Now onward with innovation. In EssilorLuxottica, we consider innovation as one of the most important cornerstones of our strategy. We believe that innovation is a source of differentiation, and we know that differentiation is what we need to grow the market and the business that we own in that market. That is the reason why year after year, we keep investing more than EUR 230 million in developing new products, new technologies, establishing entirely new categories and instruments. Predicated on our deep know-how of vision science and guided by our digital and sustainability strategy, we focus our attention more and more on 4 areas of activities. First to be mentioned e-lens or, let's say, the complementary components from the optical technology that feed into the road map that was presented to you by Federico, near vision management, myopia and light management. The output of those 4 focal areas of attention and resource allocation feed into the branded offers of our company, as they are Ray-Ban, Transitions, Varilux, Crizal and nowadays also Stellest. Because our brands carry these technologies and they make them accessible and recognizable for customers and consumers. So let's focus for a few minutes on e-lens. As said, e-lens is the optical component that complements the design and the total system of a piece of smart eyewear. You know that we are working since quite some time on e-chromic technology. We have extended now into e-focus and e-filter technology. And it was mentioned before, we are also developing technology that gives us free form opportunities in displaying information in AR, first, to be mentioned, the development of holographic mirrors where we already have a proprietary technology in the mono mirror design. Let's move on with near vision and have a quick focus on what that means. Near vision is managed by the usage of progressive lenses. You may say what's new about that? That's not new. But what's new about that category and the ware as in the people can use is people in the last 20 years have dramatically changed their visual behavior, like you do while you operate your computer or iPad in front of me. This has led to a requirement that designs for progressive lenses need to be adapted to this type of behavior. We have started in this context, 3 initiatives, of which we believe it will bring a lot of value to the industry in the foreseeable future because the penetration of the consumer group that is actually supposed to use progressive lenses is still less than 20% worldwide. So there is enormous planned potential to grow. Design superiority is what we will achieve by the usage of our proprietary Avatar technology. We have developed a design and testing tool that is founded on millions of consumer data that will help us to accelerate design options, but also rapid testing in order to deliver solutions to the market more quickly. But the best design doesn't do the job if it's not adapted to the wearer or to the individual vision strategy of a wearer. So fitting a design to a consumer, which is covered by the advanced personalization technology, is a must in order to move the penetration further ahead. And in that context, we have developed digital metrology and scanning technology to really get every movement, every post, every [indiscernible] aspect of an individual into the fitting of the design. And finally, we aim at a simplification. We want to simplify the consumer journey from the refraction room all the way through dispensing, starting with our superior refraction technology that you can see here in this demo center, but also moving into dispensing tools that can be mobile, that can be digitally supported as scanning devices in order to grab the fitting and framization data. Moving on to light management. Light management is a summary term for all of the features that we put in the design because the design by itself is not a product. Light management is for transmission management, clarity, robustness, well-being and many, many other features. And we distinguish 2 major fields of application. On the 1 hand, all the visual functions of the eye, which is actually everything you needed the technology to make you see images in the most natural way. And we have just introduced, a few months ago, a new family of Crizal, which excels as we speak through the rollout in clarity, in robustness and in anti-reflective features. And there's a second element, the nonvisual functions of the eye. This is an area of application that demands more and more of our intention, and of course, also resource allocation because the nonvisual functions of the eye, they cover elements like photophobia management, migraine management or, for example, also eye fatigue management. So expect us to deliver more light management features through coatings, through laminates, but also through wafer technologies in the years to come, focusing on, I would say, a more medical application. One of the most prominently discussed nonvisual function of the eye is the mechanism that onsets myopia and makes it progress. And I remember well 3 years ago, when we met last in London, Federico and myself gave a joint presentation on a technology that in those days, was still in clinical test. This technology has become a product in the meantime. And some of you who may have paid attention to what happened in Rotterdam a few days ago, where there was the biggest international myopia conference ever. will maybe join me in the analysis that there's no one out there that neglects that myopia is becoming 1 of the most exciting new categories in our industry. There's 3 technologies currently in discussions, which are considered being mature enough for a real treatment plan. The first technology is a lens that creates an optical signal in front of the retina. The second technology is a technology that does something else. It softens the image on the retina, taking hard contrast out. And the third technology and most recent discovery and scientifically speaking, still in its infancy, is a light therapy from the spectrum of the longer wavelength lights or something out of the red spectrum. We, as a group, already 3 years ago, decided to provide to the market the most comprehensive basket of clinically proven solutions. That's why our group is exactly active in these technologies. The first one to be covered by our product, Stellest, which is, I think, a big success and maybe having the potential as well to become a gold standard one fine day. We are engaged with CooperVision in a joint venture to develop the second technology, which is the dot diffusion optics technology, contrast management on the retina. And our EssilorLuxottica research teams with academic partners are exploring at this moment in time, what type of light therapy could play in this field as well. To be frank, the most perfect and the best clinically test product will never be sufficient to create a new category in our industry. It takes awareness, key opinion leaders, parents, whatever. It takes new technologies to detect myopia, to monitor myopia, to predict the progression of myopia. We are working on all of those technologies as we speak. And that portfolio of ingredients finally gives us the foundation to establish myopia control products as a new category. The person who knows best how to do this is Arnaud, who sits next to me.

Thank you, [indiscernible], and good afternoon, everybody. So I'm Arnold Ribadeau Dumas. I've been in the head of myopia, actually now for a couple of months. And before that, I was the head of EssilorLuxottica in Greater China. So -- and I was lucky not to be there during the lockdown in the past few months. So I'm going to share with you now how we bring the technology that [indiscernible] explained very well into the reality of the market, giving you a little bit of recipes of how we shape the next category, which is myopia, right? And bear with me because I'm the last 1 between now and your break. So a wide portfolio of solutions is the first key pillar to build up this category. So what we have is the products that have been explained by [indiscernible] already. But what we are distributing as well is more than just one product. It's also contact lenses, soft contact lenses and hard contact lenses, thanks to a partnership we have with CooperVision which is absolutely key because the products are complementary one to each other. Not every kid is reacting the same way to all the solutions. So it's good to have different solutions. Not all the parents are at ease with contact lenses, sometimes they prefer lenses. Not all the kids have the same age and the same lifestyle. So if you want to go sporting, it's better you have contact lenses. If you want to go at school, it's good you have your lenses. So the complementarity of the portfolio, we believe, is absolutely key. We have it at play in China, and we are rolling it out in our retail in the rest of the world and, of course, in the rest of the professional solutions worldwide. We have another component, which is extremely important. This is another partnership of the business with the innovation, which is the frames. When you have a lens, which is myopia control, you need to wear it 12 hours a day to be very efficient. It's a question of compliance, right? The more you treat, the better you feel. To be able to wear it 12 hours a day when you're a kid, you need something more than just a treatment. So it's important to have nice frames, light frames, comfortable frames, beautiful frames that you like so that you really have the willingness to keep it on your nose. And Federico and his team, they have developed wonderful frames under the Ray-Ban, the Vogue, the Polo, the Versace and even the Oakley, so you have frames suitable for every kind of kids and children. So the full portfolio is absolutely necessary. We have it at play, and we are rolling it out everywhere. The second key pillar is to have a very strong medical base. Myopia management is a treatment. So it has to be prescribed by a doctor. So it's not about a single vision that you can get in an optician. It's really about having a doctor prescribing it. So in that deal, there is a lot of work being done, clinical trials, as it has been explained, but then with the clinical trials that prove the efficacy, you need to engage the doctors. And we have now a lot of advisory boards at play in many places of the world for the different technologies we have, right? So Advisory Board is crucial for the development and the adoption of the technology. There is a second thing that we are doing with all of the opinion leaders, the ophthalmologists and optometrists is to make sure that there is an industry and expert consensus. So we are pushing for the experts to create a white paper to set up what are the protocols and the conditions, as [indiscernible] was explaining, the conditions to well dispense myopia control product. And those protocols are being adopted as the reference for the industry and for the other doctors. I give you one example. The white paper that was built up in China has been adopted by the China Medical Association, which is a government body to become the reference for treating myopia management. And this is what we are also working with our partners, CooperVision and other players of the industry to roll it out in other countries. So you understand that we build it up not alone. We'll built it up with all the industry stakeholders because we are an open company and we built it up to develop the value of the market because the more we develop the market, the best we will be able to create value for you shareholders as well. The third element, which is key is to engage the public and the government. There, and now I get to the few numbers you want to know, we have 3 billion myopic people in the world today. there will be 5 billion by 2050. There are 350 million kids who are myops today, and there will be more than 500 million by 2050. So it means there are 65 million to 70 million new kids myops every year. This is the size of the opportunity, which is kicking in. And we have to make sure that the parents understand this need, but more importantly, that the government understand that if the kids are not screened at school, they will fail at school, if they are myopic. And if the kids are not treated for their myopia, then they will develop long-term pathologies that will affect their eyes and can even cause blindness. So the cost for the society can be extremely high. So we are engaging the government. We did a very simple study in China with a university to prove the cost of the myopia on the society. It was hundreds of billions of euros, it was point of GDP. And at the end of the day, the government after this study, the Minister of Health and Education decided that it was a priority to screen these kids at school twice a year, right? And then doctors, of course, followed up and the parents as well. So it's important to involve the government. It's important to involve the parents so that they can get their questions cleared on social platform and social medias to get access to information. And we are also investing when we are launching a product, a lot on media and communications. So if you are in France, in Italy, if you are in China, you will see a lot of communication and advertising around Stellest, for example. So we have to wake up the consumer and the patient as well. The last pillar, which is also very important because we are prescribing a new category is to have the opticians ready to talk about the product. And they used to be able to talk about a correction, but not about the treatment. So we are investing also big time in the treatment protocols and in the training. And Leonardo already makes available a strong platform built up by ophthalmologists and what are the treatment protocols that an ECP needs to have in his hands to be able to dispense and sell the products. Quite interestingly, also, we are changing the ECPs. We have made a test in China with NextCraft stores, where we have set up a specific optometry room for kids because they are smaller and they have to have a different chair. Same way, we have also reduced the size and the height of the dispensing table so they can see the product and they feel in a less medical environment in the place which is more comfortable for them to understand what is happening with their myopia. And there in these stores, we've seen, of course, a huge increase of a comm store. It has been a great success. And now in most of the stores in China, more than 5% of the sales are about myopia management products. So when you activate properly the retail, it's working pretty well. As you understood then, we are moving part of the company from a more correction to a medical field, meaning that we have to invest in organization, in new talents, in new people that are really ready and happy to join the company because we are leading into that field. And somehow, this is going to benefit the other categories, presbyopia, light management will benefit from the medical orientation of the company. And EssilorLuxottica is really entering a medical field being a kind of a med tech sort of the company by developing the myopia management technologies. That's it for myopia management. I'm sure you have a lot of questions, but due to time, we will take 2 questions now, and you have a break after and we will be available, [indiscernible] and I, to answer to all the other questions.

It's Graham Renwick from Berenberg. Can you talk a little bit about competition in myopia management. It's a very attractive category, but it sort of fills with Stellest and your partnership with Cooper that you most have all the solutions in the market at the moment. And earlier on it was said in the presentation that it took 30 years of research to develop Stellest. So I just wondered how far behind our competitors in terms of launching credible rival solutions in that category?

Maybe I start. So of course, we welcome competition because competition is needed to get the best out of your own organization. I mean that's a rule, I think optical for almost any type of industry. We see one Japanese competitor having a solution that uses a different optical pathway. But for the definition of a solution, let's say, a solution is a clinically tested and proven product. Beyond that, you have atropine which is a therapy that in the U.S. in Europe is currently coming to the end of a testing phase. It can potentially be expected to be approved by the FDA, but we will maybe know next year. Beyond that, there is many clinical trials, but proven efficacy means 50% or more effect. And that limits the competition to the mentioned technologies. What we see is, on the other hand, if you have a proven technology, you have free loaders in some parts of the world lining up very, very fast, trying to copy your concept. That is why it's extremely important to protect your technology with IP, not to allow other companies with not clinically proven, but similarly looking technology to follow your yields.

And to add to that, I think competition is good because it creates the market and the demand and the awareness. But on the other hand, the regulators are going to look at it because you cannot put a market -- a product on the market which is not clinically proven and say that it's making an effective treatment. So there will be a balance between high competition and regulation.

One question with 2 parts for me. One, if you can -- maybe give us a sense for the size of revenues for stellest today? And if you fast forward 5 years from today, what do you think the market opportunity looks like? And then as a sort of follow-on to that, what is the shape of the curve till you get there? Is it back-end loaded, front-end loaded? I note this is market creation activity in many markets. It's a new brand new market. And I'm just thinking U.S. in particular, if you do launch next year, how quickly would you think that, that launch progresses?

Okay. So we don't disclose the sale of Stellest. We also don't disclose an ambition because as you very well said, it's a category we are building up. So it's difficult to really say. Now of course, it's a huge potential, no doubt, and it's a very significant revenue in China, also no doubt and it's rolling out in the rest of the world at the speed which will depend on the 4 pillars I just explained you. So if government brings in kicks in, if awareness is increasing, we're going to get there more rapidly than we think.

What I think -- I know 1 could say, once the preparation of the arrival of the product is implemented exactly in the following Arnaud's talk the growth that can be expected is beyond linear. I leave that to your fantasy.

What we can say probably, if you want to just -- we sold in H1 twice what we saw -- what we -- sorry, we sold in H1 what we sold the full year last year. And we sold in Q3 what we sold in H1. So it's a bit exponential.

We are -- but we would be pleased to answer all your questions during the break if you let us. Thank you for your attention. [Break]

Okay. Welcome back. I hope you enjoyed the break and driving good time so far, starting this morning with the tour of the venue. Chrystel and I are really happy you had the possibility to see our new venue because it's really our house when we engage with our customers. And I believe today is really the best you can find in the way of explaining and engaging with our customers. My name is Federico Buffa. I had the pleasure to lead the North American market. And today, together with Chrystel, we will give you some flavor about the professional solution, what are the strategy and some of the highlights.

Thank you, Federico. So good afternoon, everyone. I'm Chrystel Barranger, and actually, I'm leading EssilorLuxottica EMEA professional solution. You've already heard a lot about the group ambition and the power of its assets. And now together with Fabrizio, will showcase how our leadership in North America and EMEA can help us to unlock the growth of the industry together with the optical professional. Historically, the development of the optical industry has been the result of our strong bond, our close relationship and our close collaboration with the industry experts. And we are growing together. Today, EssilorLuxottica is stronger and has a wider ability to impact to give more. Our skill bring both stability and new possibility. And our value-add is [indiscernible]. And eye care professionals cherish the independents as health care provider and as entrepreneur, but it never meant they want to be isolated all alone. Especially today, in a fast-moving world and in a volatile and challenging context, they value we can really make a difference and help them to temp on even better. So our intention is to further grow with them, powering them to be independent but not alone. So why is it so key to nurture our collaboration with eye care professionals -- it's not a romantic vision of business. The answer is actually in the market key figures and its anchored in the business fundamental. It's primarily a vision care market. And more than 80% of the global market value is driven by prescription offer and primarily by prescription glasses. And if for anything, the value is built on answering an essential need for good vision. It's not also by chance that this industry is an in experts industry because as a matter of fact, more than half of the market value is collected by independent ECPs. They are the backbone of our industry. Patients and especially those who have real vision challenges, and who are wearing their glasses on their face all day long, rely on their expertise and their trusted advice. When you buy prescription glasses, you buy a fully customized health and style product. And it's a complicated purchase with a very high impact on your daily life. So you want to get it right. Last thing about the market. It's a very local business with very different maturity and reality across the globe. People serve people in hundreds of thousand doors, and to perform even segmenting the doors, both a robust supply network and a strong local commercial anchor are needed. So now let's have a perspective on our EssilorLuxottica professional solution and on the market trend.

Looking at EssilorLuxottica, we highlighted here something which is extremely important for us when we play in the market. So the first 1 is understanding we provide solutions to our customer. It's not any more about the single transaction of selling 1 frame, 1 lens, 1 product. It is to be consultative with our customers in all the range of product categories and solutions we can offer to them, how we can partner with them to make them more successful in what they do. Understanding our customer base is very diversified. As Chrystel said, 50% is still represented by independent eye care professionals, but almost all of them are doctors are practicing in the medical space. It is important we announced them their medical capability, and we help them to be successful as you've heard before from Dr. [indiscernible]. So they want to be medical, but they want to be successful in their practice. And there are 4 different trends that we highlighted here, which are important for us to consider in looking at the market and looking at the way we're approaching the market as EssilorLuxottica one unified company. Consolidation. I've received so many questions about what is happening in the market with the consolidation? Despite the pace of consolidation in the last few years, the market is still very much fragmented, as you have seen in the chart at the beginning. And the consolidation can be an opportunity because there are consolidation of course of people acquiring practices, but there are also consolidation like the network of Vision Source you have seen before, a network of 4,500 doctors that came together to be stronger, and is a great platform for us to partner with and to be more effective in the way we go to the market. The second is the digital and cell optometry, a trend that was already there before 2020. But definitely, 2020 accelerated the trends that were already there. And to be capable to provide those needs to the markets with the digital and cell optometry to better leverage the resources that they have, it's fundamental. And as a company, we cannot ignore that. We needed to be upgraded. The second -- the last, sorry, before the last, is a need for vision. And you've heard about myopia before and the different needs that are evolving because of aging, of course, has been always there, but also because the different behavior of consumer and patients with a screen at time increasing exponentially in the last year. So the needs of our vision correction and protection is increasing exponentially. And last but not least, is the patient journey, how we can help our doctors to manage the patient in all the cycle before, during and after, how to engage and how to go where the patient is and not anymore waiting for the patient to walk in our practices for an example. But having said that, back to Chrystel for adding a highlight on Europe and then we will see in North America as well.

Thank you. So back to how we lead in EMEA. So EMEA is a very large region and the first optical market. For EssilorLuxottica, it's a second region in our revenue, and it's the historical anchor, especially in France and Italy. Professional solution in EMEA has a massive coverage as we're addressing out of the 75 doors in the region. And a lot that's changed over the last 3 years. We became 1 integrated company, including GrandVision. And this has been a bold move in this region. One thing did not change though and is even more reinforced our professional solutions team's commitment to grow with the optical professional and to drive the industry ecosystem towards the future. We passed the COVID as it test, I would say, and we're back to growth. And we're leveraging 4 strategic pillars. The first one is that we now act as 1 company. We operate in 52 countries, and we are advantaged as we have the group scale, but we also strongly locally implanted. Actually, we are local at scale. Our lab footprint with more than 50 commercial labs, as explained by Giorgio in the region, ensures the product quality to customer proximity, the supply and the service reliability very key in this moment. And our commercial networks and teams on the field, bring us a very deep commercial intimacy in the market. Over the last year, we really became one in action. We have now one integrated leadership team across the geographies. We are one-stop shop across the category, offering end-to-end solution for our customers. It's now, by the way, very tangible for our customers. In this location, for example, we have recently presented our new collection, shocking our complete portfolio and our innovation. Our digital windows are smart shopper, our teleoptometry solution. our lender education platform. And being clear that all this innovation, we would be delighted to let our customers benefit from them in their practice. Overall, the new EssilorLuxottica is energizing, and it's a common culture has really emerged with a more extensive understanding of our customer reality and needs in the field. And it's limited to find new solutions. The second lever that we're leveraging is actually our geographical footprint. We operate in the wide region with a mix of mature and emerging market. In the emerging markets, the level of vision corrected treated is usually lower than in mature markets. And our position is less all. One very straightforward lever to grow is actually to fast track our business in this emerging market, and it's delivering. In EMEA, for example, we are growing in East 9x faster than an average of EMEA and 6x faster in Meta. We also rediscover new growth opportunity in our strong holes becoming EssilorLuxottica. For example, in France, 75% of our business is driven by lenses. While in Italy, it's 65% of our business, which is driven by frames. So clearly, developing the category, the complementary category with key customers is a new wide space. The third one actually is to accelerate category and innovation. It's a main expectation from our customers to actually have the ability to support the market value creation to develop categories and to boost their valorization with advanced innovation and brand. And it has always been our signature. And we will keep on building on our playbook, but also open New Frontier. So today, some growth levers are very straightforward as the expansion of our portfolio distribution. For example, phasing the sun cross-channel opportunity, in particular, in e-commerce and sport channels. Our brand neck management can be boosted by our accretive lenses blockbusters. But we also have new levers, capitalizing across the category. For example, across instruments and lenses with the introduction of our new eye care consumer journey in store to best serve patients need and also to support ECP upselling across channels. I mean having a multichannel investment in the geography. And we already have the great results of transition acceleration investing in Italy across professional solutions and our banner of [indiscernible]. Finally, being future-ready, driving the optical stores attractiveness and traffic with digitalization solution across the consumer journey, and you have probably, and you can probably -- still this coverage is behind you the smart shopper and the digital window, which we are widely implementing in EMEA. Of course, we're bringing also now new generation to store being the sponsor of Myopia control management, offering therapeutical lands, but also not forgetting to match them with frames. And of course, we are now also introducing the first and very soon the new generation of smart eyewear. So as you can see, we have a large levers of growth activating our category and innovation, both playing on our playbook, our historical playbook, but also pushing it for example. Last but not least, our last lever of growth in EMEA is really to level up our customer partnership. As I said before, we have a massive coverage, and we work across all channels, eyecare professional, key accounts, buying group, e-com, department stores, World Trade Retail, Sport channel and we offer to all of them differentiated value proposition. We have a long-lasting partnership and a deep connection with many customers. Thanks to our 4,500 commercial people serving them daily. Across the region, just to give you some numbers, 12,000 of the doors are part of our Essilor expert programs. And they differentiate themselves with an Essilor ambassador stand on their front of the window. We also have 6,000 doors while leveraging our staff program, our integrated supply [indiscernible] on Morgan for frames. And it's -- and the benefit, for example, to have in 1 week, all the collection newness in their store. With our partner, actually, we are far beyond transactional business. Nevertheless, we want to bring them even more. And to our ECP partners, we want to offer turnkey solution and services, driving in-store traffic, elevating the in-store experience, simplifying their store operation and also sustaining the expertise and differentiation. This service are embedded in our new 360 EssilorLuxottica program, and Federico will detail later. But we just introduced it this year in EMEA, and I have to say the first results are really promising as the partners are outperforming. To our chain partners, actually, store efficiency is even more central. [indiscernible] Solution, but also complete player supplies are attractive to them. And finally, for all partners and customers, we know from experience that stats training and education is key to sell added-value categories and products. And the challenge with training in general is to be able to perform it at scale, at reasonable cost in an easy and simple way for a large number of staff in store. So Leonardo, our innovative educational platform will uniquely simplify this challenge and is already evicted by our customer. So I gave you a few -- a very fast overview of our key growth lever. And to conclude on the EMEA to leave you with 1 ID, actually, a major part of the market value is built on essentially for good vision. Addressing this need is also the core business of the industry experts. And as a leader, we don't take it lightly to stimulate the value creation for all the stakeholders even in material geography. So let me pause here for a second because I just want to say what a fabulous object that these prescription glasses. Actually, they're critical to help me see you, but also to influence the way you see me and tell you about my side. It adapts to light changes around me and protect my vision capital. And tomorrow, it will probably also be the vehicle for me to see more than the simple reality. Actually, maybe I just will see your LinkedIn profile when looking at you. So in our new company consideration, we have no limitation for invention and reinvention. We have endless possibilities to best address the vision need with added value and many have a new to give better access to offer differentiation to bring people in to ore. So we have the chance to be this disruptive inclusive and fully Reborne Vision Care champion that together with the industry experts, our historical partners, we can unlock the real category potential and coshade the future. This is definitely our aspiration, and we'll keep on working on it in the EMEA.

Thank you, Chrystel. Amazing journey we are in Europe. So similar to Europe, I want to give you a flavor about North America. And I hope I'm going to be capable to translate in what we're doing in North America, what you have seen before by the previous speakers. Because everything is here is translating in commercial solution for our customers. So the first you see is a partner programs. Chrystel mentioned about Essilor Expert. We have more than 8,000 Essilor expert in the U.S. But EssilorLuxottica 360 is the program that we have launched in the U.S., a little bit less than 2 years ago. And in less than 2 years, we have arrived already to 5,000 members. But what is even more important is a dose program have been ability to improve the performance of our customers. And when we measure our performance is the traffic, the number of exam the capture rate and the profitability. We see the Essilor Expert and the EssilorLuxottica 360 outperformed by far the market. In terms of number of eye exam, we see them growing twice what the market is doing. And in terms of capture rate being 50% higher than the rest of the customers. That is giving us the confidence that what we're doing is right for our customers. But it is much more in terms of program. You've heard before from Dr. Amir [indiscernible] on frame on Vision Source and Frame Dream is 1 of the program we developed with those network of doctors for the complete pair solution, with a showroom income model where in your practice, you don't get any more the frame out of your Board and you receive the complete pair one way, faster quality and also in terms of reliability. That is extremely important to leverage on what George has said on the supply chain. Second is a product and brand. This is our core. And I have 2 examples on the #1 brands we bring to the table on frame, the #1 on lenses that creates so much demand and desirability for our consumer, but so much trust from our doctors. So I put a picture of the NFL of Oakley. So the partnership we started with Oakley a few years ago, makes millions, millions of consumers every Sunday when the NFL plays seeing the logo of Oakley on the face of their idols, of their favourite players. This is an incredible driver of our business that we have seen. But if I take the lens, I believe the example we can take is a transition and how much we made a brand, a category name, how much we match the education we do with our doctor on a photochromic category, and we match with the demand of the consumer pulling and convincing them about the needs to protect their rights in photochromic type of lenses. The third is the customer-centric approach. In the U.S., we started an approach where we wanted to make sure with our customer, as anticipated at the beginning, we want to be consultative to them, not any more transactional. We want to make sure that when we sit with our customers, we understand what are their needs, what they need to better practice from the moment that the patient is entering in the practice at the moment is going into the exam room and then it's a dispensing and helping them in understanding our product, but also our service and our solution that can help them to be more successful. So we created an organization, which is embedded frame lenses and all the solutions, depending on the type of customers that you serve. If you serve an EssilorLuxottica 360 customer is different if you're onboarding a new customer. You need to be capable to talk about the business at 360 degrees and not just on the single category that we represented in the past. And last but not least, something I'm extremely passionate about, education and awareness. And I'm glad that you came here before and you had the possibility to see Leonardo, which is the first open digital learning and education platform available to all our customers. And the content you have there with thousands of hours of education, 100 of the teachers, it's incredible and goes from product brand, medical, for everyone, not just for our doctor customers, but for everyone that touch patients. It's important to understand, and we know it is difficult to skill up the people we have in our practices in our location in our retail stores. And Leonardo gives that opportunity. And to make sure it's relevant, we're partnering with the top universities and colleges in the United States to make sure the content is a certify. And the partner with them is 2 ways of partnership. So the benefit for our platform, and we benefit from the knowledge of all the academic award in the United States. And finally, awareness, where we're partnering with institution in the United States to increase the awareness about the high the need of high-quality eye care is extremely important. Association of doctor, press, everyone will help us to increase the frequency of the patient seeing a doctor and making sure there is awareness about the importance of protecting your most important sense, which is your sight and your eyes. The message for the U.S. that I want to leave you with is we're building a partnership for life with our customers. We're partnering with them 360 degrees, not [indiscernible] I mean by chance, the programs 360. And we're partnering with them since the beginning of their journey in all their professional lifetime. Since even when they are in the college, as I said, partnering with colleges, it means we start to interact with the doctor students even before they started to practice and they start to become familiar and we help them to be ready for the world that is waiting for them. All the way to the transition as Dr. Amir [indiscernible] said on the Vision Source. Vision Source [indiscernible] or understanding of what might be an access strategy for a doctor. That is for us important. We're a partner for the lifetime of our customers. Thank you very much for listening to Chrystel and I. We're very happy to take any questions?

Julien Dormois from PNB Paribas. Two questions, one on Europe and the other one in the U.S. in Europe, it's now been a year that's you acquired GrandVision, and we can remember that by the time, EssilorLuxottica emerged, there was quite a bit of customer pushback. And interestingly, it seems that this time around, there's been very little customer pushback following the acquisition of GrandVision. Can you just confirm this impression and maybe tell us how you have managed to do things differently this time? And on the U.S. -- basic question about short-term trends from the customers, what do you see on a weekly basis? And are we seeing what most industries are seeing and maybe some sales or some competitors in your space are seeing which is a slowdown.

Okay. So I will start on your first question. And you're actually right. It was a big move, the acquisition of GrandVision. And it was new in this region to be -- for our customer to see us becoming really a retailer of this size. But I think that -- and you're also right, we're not experiencing digitization. I think it's clear that our customers ask themselves a question, what's in it for me in this combination? Should I fear it? And what they have seen is us engaging even more with them and trying even more to develop their business. And as we said, really offering them the opportunity to grow and to be better. So they're smart, our customers. They see the value we bring what we can co-build with them. So I think the responsibility is on us to continue to be very good at leveraging our footprint of distribution to grow the industry so that they see the benefit for them and then we're going to continue to develop together. And by the way, and that's also another thing I want to have, is that, on the contrary, we have also recovered some of key customers that have not been working for us for some time and that are now seeing. I mean that not working with a leader could be also a difficulty in the future.

On the U.S. business trend. The business is going well in the U.S. And of course, it's very different depending on the product and the customer segment you look at. Luxury is doing amazing, it's growing very much on top of a year -- last year, which we were growing very much. We have seen some KPIs are getting even better than last year in some areas and in some customers, even if the traffic and the number of eye exam, is doing well and also the capture rate. Then definitely, U.S. in '21 was an incredible year. But all the value we created in '21, we see we are retaining in 2022. So we're not going back to the value we created. We're still growing slower than the growth we have seen last year, definitely yes. But we still see the growth and in a very different segment, we still see extremely positive feedback from the customers. It started very good. This low a little bit down, and now we're back on track with a positive trend that we see. Of course, U.S. is not immune to what you see in the rest of the world. And between the consumer confidence and all the rest of the customers, they are very much out there looking at what is happening. But I would not say today the market is not doing well. It was a 2 question on 1 person or 2 -- I'm getting. Is there any other questions?.

[indiscernible], Two questions. The first one is on the European side, but can be answered by both. The company has shown how organization-wise supply chain-wise, IT-wise, integration with EssilorLuxottica has happened. But on the front-end side, selling a frame and selling a lens is different. Where would you say you are in the path towards reaching the sort of cross-selling synergies of putting together to companies that were one of the reasons why this company has been created. You think we are still -- let's say, we still have a lot of room to gain from this? Or have we already reached, let's say, the maximum capacity? And the second one is on the teleoptometry side which today for men's list was one of the most important things to see. I believe it's early in every phase also for the -- for your own retail start year ago. Where are we in the U.S. market that I think is going to be developed first on the wholesale side? And if you could share some KPIs that business model, will it be just a way to provide an additional service to your wholesale clients or will be in additional business with fees paid to access these sort of things.

So I start with the U.S. There's a lot on that. So first of all, on the front end, the customer sales organization and the way we got organized. So we created the 1 organization for all the optical customers in the United States. And when I say optical, it can be an independent care professional a private practice or it can be a big box optical retail. So 1 commercial organization that for the key account is 1 account per customer. So that is serving and providing all the solution and the commercial offer 360 degrees. Then we have a category manager. Of course, as you said, the technicalities or the skills you needed to have to explain a lens versus a frame are different but the account manager taking care of the customer is one. When you go to the independent in there, which is much more fragmented, and we have a sales force field base as well. We created a sales force that is made by 3 different pillars. Depending if you look at the pyramid of our customers, if you're on top of our pyramid and you are a 360-degree customer EssilorLuxottica. There is an account manager taking care of you, having a monthly business review, seeing where you're going and then consulting on what you needed to do to perform better, to increase the mix, to improve the performance and the penetration of the brands, I mean, consulting and making you better. And then we have still at a category out there consulting on the frame and on the lens is when we have a new collection, when we have a new launch, we're preparing for myopia as you have seen before, which is extremely important to have a subject matter. So there is an account management structure, taking care of the customer 360 degrees, but still injecting with subject matter expert when it goes and you needed to explain a new product and solution visiting the customers. On the teleoptometry, it's relatively -- It's definitely too early to give you some KPIs. The way we see telemetry, and we have the solution available. And as we speak, we're preparing the presentation and the pilot to our customers. Before Vision, Sara mentioned, we already identified customers with which to pilot the solution we have. The idea for teleptometry for our customer is a complementarity on the way they can serve and perform an eye exam, creating a network of doctors they can have access to so and they can perform with a very trained technician in practice because that is definitely an important element remotely with the patient still going into the practice, but having the doctor remotely. That is going to help our customers to increase the number of examined patients that can see. So definitely, yes, can drive a much more business than what they do today. Is that in them from a resources point of view because there is a scarcity of resources today as you know very well, and definitely in the U.S., a scarcity of availability of doctors and of optometrists. And is helping a dam to adding a line a exam room without having to recruit the doctors even more when it comes to rural area. But not only even in an area where the doctors want to go and to live, definitely is helping that we have a much more coverage during the week and during the hours.

So back to Europe and EMEA. I will start with the question on teleoptometry. So for the moment, yes, we are at the beginning, and it's really promising because it's a bit like telematic since. We know it's -- this is the direction. I think the -- if I look at the region, there are a mature geography. And in the mature geography, one of our key challenge is to accelerate the renewal of eyeglasses. We show that people still have the right correction. And sometimes, there is a bottleneck on getting a prescription. And when you think about the pandemia, which is coming on myopia, it's come up probably even more difficult to get in the point. So I think telemetry will really help to get an accelerated access to prescription and therefore, to serve the people need. On emerging markets, it's different. I think sometime in this geography, you have very -- even more scarcity of doctors that can perform and long distance. So teleoptometry will be a way probably to help really to accelerate a correction to have more people who need a correction to be treated. So I think here, I think we see the destination, and we are very keen to start the first test with our customers also in EMEA. When I go now to your question of cross-selling, I would -- in terms of organization, our differentiate organization and the way of operating because, yes, in terms of organization, we have moving supply chain. We have moved all our back office and all our key functions into 1 organization. And we did not dramatically change on the front line. It doesn't mean we did not change the way to operate. Today, there is not 1 road show or 1 meeting with a key account, which is just a lens or a frame. Each time you have people, sometimes the same people are responsible, even though they are not exactly the same people, they go and have the same meeting to understand how to best help the customer to benefit from the full offer. In terms of cross-selling, I would say we have scratched the surface, and that was the first thing that we have done working on our commercial synergy across the geography. But I would say we would be done with cross-selling when we will have totally integrated the eye exam with -- I mean the fitting of the lens with the choice of the lens, with the choice of the glasses. So that's from the end to end, actually, we have solution in the mass part of our customers who are really compete. So I think we're scratching the surface here. And as you have heard, we also start to think on our differentiated complete glasses. We speak about kids. But that's also an avenue. So I think cross-selling is really the surface of what we can get in terms of the synergies of all this company.

Thank you very much for your time. It's a pleasure. Enjoy the rest of the day. And we will be happy to answer any other questions. [Break]

Hello to everybody. I'm pleased to be here today to introduce you GrandVision which has been consolidated into EssilorLuxottica since the 1st July, 2021. Bringing more than 8,000 locations and 38 banners globally. Since many years, I've been in charge of the commercial relationship with GrandVision as head of the wholesale business for EssilorLuxottica in Europe. Today, around the optical retail business in EMEA with nearly 6,000 shops -- sorry, nearly 6,000 shops, 30 local leading banner, mentioning some of them, Vision Express in U.K., Synoptik in Scandinavia, Générale d'Optique, GrandOptical in France, Apollo in Germany, [ Essilor ] in Turkey and many others. The combination of GrandVision into EssilorLuxottica will contribute to our strategy to elevate and grow the optical market in Europe. It will also support our strategy to educate final consumer about the importance of comprehensive high test and up-to-date prescription. Now let's talk about growth opportunity. As you may know, the European market is expected to grow in the coming 5 years, and the combination of GrandVision into EssilorLuxottica will contribute to fuel this growth and to elevate the market. We see 4 pillars of growth at the same time for opportunities for synergy. Let's start with the team. In GrandVision, we have a talented team of 30,000 people. Together with our Leonardo platform, we will further enhance their skills and capability to prepare them for the next journey. Stores. This is an unmatched store portfolio, as I said, of 6,000 stores in Europe. If we combine this network with our technology, with our [indiscernible] in store design, we are ready to design a new customer journey. Product assortment is an incredible opportunity. And let's start with lenses, we have in GrandVision many under penetrated category, progressive lenses, blue-cut, transition, myopia control. Together with EssilorLuxottica brand product and technology, we can really boost and elevate the market and our business. And let's talk about frames. Now we can combine GrandVision private label with EssilorLuxottica brand, which are covering all price segments. Sunglasses another untapped opportunity in GrandVision and there also, again, with EssilorLuxottica brand portfolio. Our smart shopper technology that you have seen today our sour fare in the Sun business, we can really boost and develop the market and our business. Then customer journey. Normally, it starts online with an appointment booking is continuing the shops with a high check and a purchase of frame. Now we can combine a EssilorLuxottica aground vision omnichannel capabilities to further develop the market. And then last but not least, external growth. It's clear that we are continuously monitoring opportunities to bolt-on acquisition in existing markets and the new markets. I have an example for you. We have just completed the acquisition of 70 stores in Scandinavia of Smart Eyes. And now let's talk about synergy -- integration synergy. As I said, in Europe, GrandVision is 30 local banners of them are middle low, 10 are mid high. We want to build 1 integrated platform of 30 strong local brands. We have identified 5 key initiatives. The first 1 is to accelerate the deployment of EssilorLuxottica brand products and technology. The second one is to roll out a common IT and digital platform. The third one is integrated GrandVision supply chain into EssilorLuxottica 1 to further improve the level of service to our final consumer and to boost sales. Consolidation and renegotiation of contracts with existing vendors and last but not least, we want to leverage EssilorLuxottica center of excellence and shared service in marketing, CRM, omnichannel and finance. With this strategy, we are pursuing 2 targets. The first 1 is to have a leaner and more efficient organization to deliver best service to our customers and to fuel growth. The second one is to deliver substantial synergy. So to sum up this presentation. I want to stress that GrandVision is almost a perfect fit into EssilorLuxottica. And for 3 main reasons, is market leader in optical retail in Europe with 6,000 shops is the perfect platform for EssilorLuxottica brand products and technology both in lenses and in France. Third point, the combination, as I said, is contributing to elevation and to the growth of the market. Thank you. and I hand over to Alexander.

Thank you very much, Max, and good afternoon, everyone. I'm Alessandro Cobelli. I'm Head of Global ecommerce. I would like to reassure you I will be very fast, not because e-commerce is smaller or less important, not at all. But because I want to focus on a few important messages. And the first one is here in front of you, and it's not me. It's one global team. I guess that you heard a lot of times today, one. And believe me, it's true. We are one. We have gone through an integration process, reduce complexity. We build capabilities and skills, and we built the COEs that are serving digitally in any specialized digital process, our group, not just e-commerce. And I would like to underline it, not just e-commerce. And our COEs that are really proficient in the digital skills that are also available coming back to what Francesco was seeing this morning, also available externally to our licenses to our wholesalers. So it's an open model, and we are a network company. And this is the first message, but how big is this business here you are. This is the ID card of global e-commerce. It's a business worth of EUR 1.5 billion, is 75 -- with 75 banners, which is huge in 44 countries and touching every year, 500 million visitors, massive. And our COE, the digital team is made up by 800 people. Again, this is a business that is not just profitable, is also accretive as Stefano would say in a while. Our portfolio is made up by sites selling prescription online, sunglasses, which is our bread and butter and contact lenses, the high-frequency, high-volume generator. This team is sharing tech stack processes, practices and data, a lot of data. Remember, 500 million visitors a year. And if you put together a lot of data plus analytics and plus the global platform, what you achieve is a fully personalized experience online. For example, in ibidirect.com. We are able to put together offline, online data and to provide the best personalized experience for any visitors proposing any personalized content and products. And this is the second message, okay? First one, global team; second, fully personalized experience, and now we arrive to the third one, a full integrated customer journey. Max was just mentioning how strong and important is customer journey and omnichannel. It was actually true some years ago. And what happened in the last 2 years made it simply even more important. We've gone -- we know the story, online have boosted, then we had a continuous shift between online, off-line and go back. So what we can say after these 2 years, we can say that we have been ready. We have been ready while lockdown appeared and we're boosting online. We were ready to enhance our appointment booking tool when restriction was announced and then we were ready to go back off-line when it was the moment of removal of restrictions. For us, it's very important. I can't provide you with a lot of examples and I'm available later to provide you all the omnichannel scenarios, but I would like to mention 1 important program, which I would like to share with you. We have a customer creation program cross-banner. That means that we put our 15,000 stores available for enabling omnichannel scenarios to all the banners. It's a cross banner, let's say, approach, which is unique, and it is requiring a cultural shift. And it is a huge opportunity. And this program is also available for our pure online player. And here, you will see also what we are investing on. Artificial intelligence driving the best frame adviser online. We are investing in virtual reality, augmented reality to provide the virtual try-on with a highest quality. We are continuously investing in developing a lens configurator that's providing education towards the end consumer, but also providing a clarity on how the lenses configured online. And Rx for us is a key pillar. Social Commerce, of course, we have a strong partnership with Meta and we want to boost social commerce. So I am almost done. You are willing to listen from Stefano Grassi. So I'm finishing, and I would like to underline the 3 messages that I want to leave you and bring it home. One global team, building one global platform working and focusing on prescription Rx and investing in innovation in order to provide a fully personalized experience and integrated customer journey. Thank you very much. Me and Max are now available for -- how many? Two questions.

Susy Tibaldi from UBS. I have a question for Massimiliano, please. On GrandVision on the integration. It's been 1 year -- a bit more than 1 year. So can you -- I think it will be very helpful if you can help us understand what is the penetration of the EssilorLuxottica product in the GrandVision network? Maybe explaining -- I don't know if you can give precise numbers amazing. But explaining what was the starting point, how much has been achieved after 1 year? And what is the full potential? And I guess also, same question, but more on the integration on the cost simplification side. How much was done in this first year? And how much more do you think there is to do?

Let's say, there is a lot, but this is a journey. It's a journey. And as I said, started in July 2021, and accelerated in April 2022. I'm in this position since April 2022. I would not disclose numbers, but I'm telling you that there are massive opportunities both in terms of EssilorLuxottica brand products and technology and in synergies. So we are at the beginning of this journey, and I'm making 2 examples, the first one, we are now -- we started a pilot with a new assortment both in lenses and frames in July 2022, and the first results are really encouraging. The second one, talking about cost and creating 1 platform, we have done the first pilot in IT and digital integration in Portugal and this pilot has been successful. Now we are ready to roll out the new IT and digital platform in Italy, North America and Latin America. So we are starting our journey and I'm saying that I'm really confident after 4 months, what I've seen, the opportunities are huge.

Yes. Let me add that everything that Max said is also true for e-commerce, GB e-commerce. And it's -- you know the banners are on omnichannel in most of the cases, but it's also including some pure players in GB scope.

I'll keep it to one, so we can move on to second -- but maybe just if you fast forward on the integration process, I'm curious, the 3 priorities on [ sema ] that you've outlined. How long until all 3 are completed, what's the time frame? And then which ones can move faster versus which ones do you think will take more time?

As I said, this is a journey. And I think we will complete this journey within the end of 2024. For certain initiatives like product assortment, so frames, sunglasses and lenses, I think we can go faster.

Great. Okay. It's Stefano Grassi time. Thank you very much.

Glad to have the Stefano Grassi time right at the end of this journey today. My time will be very much dedicated to our financial road map. And before starting looking at our bright future, I think it's important to take a look at our recent past. What you see on this slide represents very much the journey of EssilorLuxottica from the period 2018 up to 2021. From a top line perspective as well as from a profitability standpoint. What you see in this slide, you have a top line. They grew 3.5% during the course of the last 4 years. Those numbers do not include GrandVision. And from a profitability standpoint, as you can see, we had a marginal appreciation of our adjusted operating profit from 16.2% in that we had on a pro forma basis in 2018 to the 17% that we posted for the full year 2021. Now as you all know, in 2021, we closed the GrandVision transaction. And we published our pro forma results, which includes EssilorLuxottica plus GrandVision. And as a result of that, our top line increase on a pro forma basis from south of $18 billion to $21.5 billion, and our profitability was actually diluted by including GrandVision into EssilorLuxottica. And therefore, our adjusted operating profit moved from 17% on a stand-alone basis to 16.1%, including GrandVision in our results. Now you will remember that at the beginning of 2022, we share a revised outlook for the group. A 5-year outlook, which encompass top line expectation as well as profitability expectation. And in particular, we said, right, we have an expectation to grow EssilorLuxottica top line by 2026 at EUR 27 billion, EUR 28 billion, which implies a mid-single-digit growth rate for our top line. And from a profitability standpoint, we had an indication to hit the 19%, 20% adjusted operating profit by 2026. This is an acceleration compared to the previous trend. From a top line perspective, we were growing 3.5%. And now we guided for the mid-single-digit growth, but it's also an improvement from a profitability standpoint. As a matter of fact, 80 basis point appreciation in the last 4 years. And now there's one EssilorLuxottica, we do have an expectation to roughly improve our adjusted operating profit to 400 basis points over the next 5 years. How do we get there? One of the key drivers of our top line, what are the fundamental pillars that will drive our improvement in the profitability. This is what you're going to see in the next few slides. From a sales key driver standpoint, it's really a mix. It's really a combination between regions, business units and volume. And if I look at this chart from left to right, what you see in here from a geographical standpoint, that the most mature region, namely North America and Europe, the one that represent more than 80% of our revenue base, as Paul was showing before, will grow on average on the low to mid-single-digit territory. If we look at our Latin America region, our Asia Pacific region, the region where we have the vast majority of our fast-growing market Well, for those regions, our expectation is to grow in the mid- to high single digit. And I can tell you that within those countries, within those regions, we have countries that are going to grow on a double-digit pace during the next 5 years. Then bolt-on M&A will continue to be part of our growth trajectory. We expect up to 1 percentage point of contribution from M&A to our mid-single-digit guidance. Another important assets that we'll see growing at a pretty high pace is what Alessandro well described before, our e-commerce business. We expect our e-commence to be at a double-digit pace and importantly, to become approximately 10% of our revenue base by 2026. Then I know many of you will ask me, okay, but is your mix in order to get there? What is your trajectory between volume and price mix? Well, if you look at our last 12, 18 months, you all know that our primary driver of growth has been price mix. Our expectation for the future is to invert that relationship to have volume that will drive the top line growth and to have price mix through innovation, through the launch of new products in new markets to be a couple, an add-on to our growth rate. But now the top line that you see in here represents what I would say is the base case. In all transparency, we're putting together on a table here additional opportunity for growth that we haven't reflected in our top line expectation of what I would call base case. Opportunity that we see there, opportunities, and I hope you also heard, understood and unasserted way cash today that are not reflected in our mid-single-digit growth. One example of myopia solution outside China. Arnaud well described the opportunity that we have there. We have quantified what we can see in China. And obviously, we haven't reflected the part that is outside the Chinese border. Another important asset, a new category for the industry is represented by wearable device. That smart glasses will be an important pillar of growth, but we just haven't quantified and reflected into our base case. The third important aspect here is the optical e-commerce, the end-to-end optical online, fully translated into an omnichannel proposition with our stores. it's not reflected there at its full potential. And this is what pertains our top line, but how about our profitability? What are the key building blocks that drive this company from a 16% margin rate to a 19%, 20% operating profit adjusted by 2026. And when I think about that, there are really, in my mind, 2 profitability building blocks. And you see them in this page. On the left-hand side, what I call the revenue-related building blocks. And on the right-hand side, the cost related building blocks. So if you spend a few seconds on the left-hand side, the revenue related building blocks. What you have in here, is very much all the initiatives that we've been talking before. the potential to grow at fast pace at faster pace in some of the fast-growing markets, Brazil, India, China, markets that today represent approximately 7% of our revenue base. The opportunity to tighten even more our partnership, whether it's EL 360, to take the lesson learned that we have in the United States and leverage it outside the U.S. the continuous development of such a critical asset for the industry like Vision Source that was well explained by the experience of Arnaud before. And last but not least, the opportunity to expand our managed vision care assets outside the U.S. border. Clearly, there is also what I call the steady state, the operating levers that we set at 3% as a growth beyond which we have a natural margin expansion. Then we have on the right-hand side of the page, the cost building blocks. And in particular, we're talking about investment and efficiencies. Some of them are pretty obvious. The investment in our retail network. We own and run over 13,000 stores. We're going to take those stores progressively up to the latest and greatest technology. We're going to have those stores dialoguing with our online platform, really created that omnichannel proposition that was well described before by Alessandro. We're also going to continue in the evolution of our supply chain and operational infrastructure. And obviously, no need to say the innovation pipeline of product will continue to be fueled. Then another important chapter of cost-related building blocks for our profitability journey, it's related to the efficiencies. We know how to do that work. We know how to build that from scratch shared service center that progressively will centralize the entire legal entity that we run under EssilorLuxottica. We're doing it. Every year, we are centralizing in shared service center in North America, in South America, in Europe, in Asia, 50 to 100 legal entities. And by the way, at the same time, we are simplifying our machine. Every year in EssilorLuxottica, we are closing 50 to 100 legal entities to very much creating a much more simple operating machine. But now we all know that the guidance and the outlook is provided at constant currency. But we also know that being an international and global company with a global footprint, currency do play a role in our results, sometimes creating some headwinds, some other, like in 2022, creating some light tailwinds in our results. So what I thought I would put in here, it's a slide that you've already seen in London, so it's just a refresh of that slide. That very much shows you the main currency they have an impact on EssilorLuxottica. And in those currencies, you can clearly see 3 buckets. On one side, currency, they have a net positive exposure. That is the U.S. dollar, that is the Australian dollar. And then you have a set of currency that shows you a net negative exposure, the Euro, the CNY, and that is very much in light of our manufacturing footprint. And then you have currencies like Brazilian real that is on the natural hedge position. Another important building block for our financial road map is represented by the use of cash. I tell you upfront. This is a pretty academic chart, but I think it's important that you see that we show what are our priorities in terms of use of cash. This is a company that has changed in recent times, our leverage due to the acquisition of GrandVision. This is a company that do not have a dividend policy. This is a company that in recent time has undertaken quite a few shares back -- share buyback to serve mainly the employee shareholding plan. So I thought it was important that all of you see what our priorities from a use of cash standpoint. The last chapter of our financial road map is represented by an important pillar, the investment. And there are 2 questions that I want to answer with this slide. The first one is, where do you put your money? Where are your investment? The second one, how much you going to invest? So on the left-hand side of the page, you see our CapEx mix for the 2021 pro forma of EssilorLuxottica. And you can clearly see with 3 buckets, we have over 80% of our overall capital investment. Some of the things that you're seeing here are the things the Giorgio, the Norbert, the Federico, the rest of the team has talked to you about it today. The operation infrastructure investments are on one side, dedicated to enlarge our scale, enlarge our capability. Perfect example is the investment that we're making in Sedico, the investment that we're making in Barberini. On the other side is the evolution, the transformation of our manufacturing footprint, Thailand, Mexico, France, Brazil. Those are excellent examples of what we're going to do and what we're already doing in several parts of the world to evolve our manufacturing footprint. Another important chapter is represented by a retail network. No need to say, with such a large store base, the investments are there and are needed, and we will do it everything that we can to very much represent a benchmark with a retail network within each market. We continue to take a transformation journey and renovation journey for LensCrafters. We have in here the evolution and the elevation of the optical retail experience in Europe through GrandVision. And obviously, we will continue to invest in all the banners that haven't gone through this transformation yet. The third important pillar is the digital technology. This is all about the evolution of our digital platform online. The capability to have the omnichannel proposition online, offline, the ability to run EssilorLuxottica in 1 single ERP instance. All of that is part of our digital technology. The second question that I answered with this slide is very much how much we're spending. And as you can see in the recent past, we invest anywhere between 4% to 5% of the revenue as capital expenditure. That number will go up. We have the ability and the balance sheet to sustain that. Our free cash flow generation continues to be sound. So we'll see an acceleration of our capital spending because of all the projects that you heard today. And then I would say, in the latter part of our 5-year outlook, you will see a smooth out as normalization of our investment curve into the 4% to 5% investment profile. With that, I conclude it with my financial road map. And now I call on the stage Francesco and Paul for an exciting news regarding our mission, please.

Yes, I expect it to have this at the end, but it's fine. Paul go ahead.

Okay. Thank you, Francesco. So yes, we wanted to share with you just at the end of this presentation, one strong thing on the mission. We have asked a very famous artist, Steve McCurry, to give us his [indiscernible], his look at sight and eyes. And he came up with some really beautiful children picture that I will show you the 2 that stood out and that we are going to share on the world side Day on the 13th of October. So if I am correct, it goes like that. So you have this very strong eyes looking at you. And the message that is behind is really that we are going to go with the 1 side EssilorLuxottica Foundation from the duty to correct and protect the eye which was what we were doing for the last years, 10 years to something way stronger that there is a human right, which is the right to see and to really to go to a new area all around the mission that we serve and that motivates us. So this is what we wanted to share as a preview because this is not yet going to be communicated, but it was a nice way this right to see with those 2 beautiful pictures from Steve McCurry, a worldwide recognized artist. Before we go to the Q&A, I push Q&A. And why do I go here? We have to put something else as the background.

It's Louise Singlehurst here from Goldman Sachs. I wonder if you can help us think a little bit more about the U.S. Very specifically, you called out a slowdown at the end of the last quarter. Obviously, we're a few months -- a few weeks later on into the year now. And I wondered if you can talk about, obviously, the wholesale partners, the feedback, the retail environment and your sense in terms of the growth outlook. And then very specifically for Stefano, if we can think about that 5% per annum to 2026. Is that more back-end loaded, do you think under the current environment? Or do you see a fairly consistent pathway where consensus probably sits today.

So with respect to the trajectory in North America, the trajectory in North America is still in the positive territory. So the numbers in North America are still positive. We're happy with that. I think some of the initiatives are in the execution phase, one of the ones that Fabrizio mentioned to you. No doubt that there is a tougher comparison base. I would say it's more that than anything else in that respect. While for the trajectory and the shape of the curve within the next 5 years, I think, let me say, there are opportunities to see some of your investment that will materialize from -- with respect to top line in the latter part of the plan. With that said, the resiliency of this platform, the fact that we are more than 75% skewed to our VisionCare, the fact that we have been able to go through lockdown in China, headwinds of inflation very much create a very strong platform that I don't want to say it's immune from any kind of headwinds, but it's definitely proven to be resilient on many of the adversity that I would say we faced in the market.

My question is relating to optical. It feels like your communication to end customers could improve. Given that if you look at the product portfolio that you've chose today, it's absolutely fantastic. But it feels like your marketing, your brand building, particularly in relation to optical could improve, do you agree with that assessment? And if you do, what you plan to do to change that?

Answer is quite complex because optical is not just question of brand, it's not just a question of marketing. You have a patient in front of you. So communication has to be tuned carefully. And I believe that the best is not the one that can succeed most. That is how we are approaching this communication mostly through a medical marketing. We are building a dedicated structure that will cover worldwide all our markets really to drive communication. And since we enter a new category like myopia management, that is a treatment more [indiscernible] shot fixed. We would like to see a medical world, much more involved in our communication. So we will act more like a pharmaceutical company. Also if we don't have all the constraints that pharmaceutical company has, but we want really to adapt this rigorous approach. Then we have to really better understand how to communicate to someone has a need for correction because it's not just awareness, it's not just catch the attention but really to be exactly aside of our customer in the moment the need as perceived or detect. So really, we are evolving a lot on that. We have capability, we have infrastructure. One is the digital infrastructure that has become every year more sophisticated. And now we have 40,000 screens that are talking to customers that are inside the practice and stores, optical stores. That is really something that we have to leverage much better because it's not like advertised in a street or out of home or in a TV. You really -- you are taking the relationship with the customer inside optical store. So in the moment in which they need is clear in the [indiscernible]. So we have a lot to improve, we believe, in the industry to be one of best-in-class on that.

Anne-Laure Bismuth from HSBC. Actually, I have 2 questions related to the revenue building blocks. The first one, is it possible to have a bit more of color of what could be the potential in the fastest -- in the fast-growing markets. So it's 17% of the business right now. Is it possible to have a view on where it could go by the term of the plan. And finally, you also mentioned the insurance expansion outside the U.S., so you have EyeMed in the U.S. So do you plan to do that expansion outside the U.S.? And finally, outside of the 70% of the business that you are doing with prescription products, how much is covered by the insurance business?

Okay. So with respect to the fast-growing market. I think when you look at them clearly, we mentioned 3 markets that have size and materiality that it's not obvious. I mean China, we are EUR 1 billion company. So it's, you don't see that many players anyway. But clearly, our ambition is to be bigger in such a key market. We're definitely proven that we are resilient despite all the headwinds that we faced. And I think what Arnaud described should give you a good flavor of how big, how important, how thorough is the opportunity of Myopia management in China. Some of that opportunity could also help some of the other fast-growing markets in an additional pocket of growth. As I mentioned in the region building block, there are certain countries within those 2 regions that will accelerate very likely with a double-digit pace over the next 5 years. And there are some of them that are good candidates, more obvious candidates for that. The second question is with respect to EyeMed or actually Managed Vision Care outside the U.S. that expansion. We're really doing some partnership to very much work and make sure that we create a network. We create an infrastructure that allowed us to serve consumer to partner with companies to have, let's say, agreement that allow to be much more Managed Vision Care driven within our optical retail store outside the U.S., which answer the second part of your -- the third actually question you had and that is how much of our revenue are related to Managed Vision Care. Well, the easiest way to measure it for us is representing what we see in our own retail network, in our own optical retail network in the U.S. 40% to 50% of the volume is driven by Managed Vision Care.

Luca Solca from Bernstein. Just a clarification question about your guidance for growth in Europe and North America being low to mid-single digits. Do I understand correctly that, that includes the potential revenue synergies that you get from GrandVision. And if that is the case, isn't this guidance very prudent indeed because I would imagine that you have quite a significant opportunity to get EssilorLuxottica products within GrandVision, which at the moment is selling primarily third-party products. And related to that, I'm wondering if you took a look at return on invested capital. And if indeed this low to mid-single-digit growth was confirmed within GrandVision, if the core business in North America and Europe wouldn't be significantly dilutive from a return on invested capital given that you just invested a very significant amount of money to secure GrandVision. And maybe a question on how you plan to evolve the ability for consumers to understand and choose lenses. My impression today as a consumer is that this purchasing process today is very [ transparent ] to consumers. There are many different choices, both in terms of correction and in terms of protection, there is a risk, I think that consumers would not appreciate the quality and the advantages that you provide. All that sales associates may not sell especially if they are third-party sales associates may not sell the potential upgrades that you can give in terms of wavelengths cancellation technology, in terms of blue light protection and everything else that we've learned and saw today. So I wonder if within this ambition to work more as a pharma company and rely on doctors, you also have the space to teach consumers a bit more on the options available on the menu?

I'll take just the last part of the last question, then I'll leave Stefano and Paul maybe to complement. We took a commitment to grow the market. This is really complex thing. It's not easy, we know. And I believe it's not worth to try to explain all the actions because is not this the point. I believe that we have some good examples, France, a small one, but very good. If you analyze the French market for optical, quality of the lenses, information to customers and volume and value of the market is really much higher than any other countries around the world, including U.S. This is why because really, Essilor created a culture of vision in the country, starting from government, stakeholder, legislation, information protection in some way of the high-end proposition. And this is having in mind really the health of the patient. So now we are really studying. We have a team dedicated to that, that are studying this experience, a studied experience that we had in Italy. Italy opposite is one of the biggest frame country because Luxottica did a great job educating that there's not all the frames are the same, investing in communication and brands. So I believe that we have to take the best of the group practice put together, understand how we can localize our action because China is not France and U.S. is not Italy and so on, but this is the approach. We have an entire company with close to 200,000 people that start thinking in this new way. And I'm sure that in the years to come, we will see bright ideas that come from the field, new innovation that come from our R&D. Also, our R&D is changing pace with this new mission. So I believe that the problem that we have to fix is the size of the market. I repeat to everybody that people spend more on sneakers than protecting their eyes. They spend more on sun cream than on sunglasses. Our fault, of course, we couldn't transmit how important it is for kids and adults to protect to correct. We are working with government. We are working with the United Nations. Now we are planning to move our foundation to Geneva to be a partner of Health World Organization to start this process. The key success factor is joint forces. And this is really promising for our company, for an entire industry and for all our partners. Paul, would you add something?

Maybe the only thing I would add, Luca, is to say that because you talked about the practitioners and they have a real mission themselves to provide the right solution. So they are a key partner, and it was really well explained by Fabrizio and Chrystel to propose to the consumer the right solution. So it's a consumer, they don't know. And like it was before, they are not very well informed. They don't understand you wear glasses. You know the experience. But the practitioners, they play an absolutely key role. And that is why we, on the lens side, have been developing a whole set of solution categories and many different options that the optician, the eye doctors can work from to propose the right correction, the right protection, the right added function and so forth and so forth. So they play an extremely important role, and they want to become more professional. This is really well explained by Amir, by Fabrizio and Chrystel, they want to improve their exam room. They want to have better instrument to provide better eye exam. From that, they want to have a clear set of solutions. And the beauty of EssilorLuxottica now from what you have heard is that we have those 2 ways to be in the market. We have our own stores where we can experience, test all of our solutions. And of course, we have the entire 300,000 practices that we serve through the professional solution that then we can deploy this. So it's a fantastic opportunity for us looking forward with the set of capabilities that you saw today.

The earlier part of your question, Luca. Top line growth in Europe, low to mid-single digits. I mean, if I take the other part of that guidance, I'm not sure we are on a conservative side. With that said, there's probably [indiscernible] within that guidance within that direction. Probably the Professional Solutions side at a lower pace. And the GrandVision also in light of some of the synergy work that we're doing, which, by the way, a lot of them you would agree, will flow through more to the P&L because we're obviously taking higher penetration of our brands, in particularly, higher penetration of our lenses from EssilorLuxottica. And that, obviously, will create not just top line growth, but also exactly a margin lift that we obviously backed into our guidance. That is strictly linked to also the answer to your second question with respect to the return on invested capital. There's no doubt that there has been an important investment that we made in GrandVision. You all know it. But let's look at the results that we've seen so far. GrandVision performance has been very much aligned with the EssilorLuxottica 1, the work that we start doing it, it starts paying back, the training, the development of the people in store to educate them to our brands and to educate them to all the new solutions that will come available, it started. So I have the confidence that this is going to be an exciting journey. And in terms of return of that investment, again, we are on the right direction. Then I tell you that when we look at the return on invested capital, if you think about it, what you saw before, retail is an important critical asset for this company. But there's so much more on top of retail where we are investing, and we do expect a return. Vertically integrated business model, investment in supply chain, investment in our manufacturing footprint, laboratory, frame manufacturing, that is another important area where we will see return in this plan.

Susy Tibaldi from UBS. Starting one for Stefano. In your bridge -- in your guidance to the 19%, 20% EBIT margin, you highlighted several areas. Can you maybe flag a couple of that where you think we can see the most -- the biggest delta to, let's say, to get to this guidance where there is the most to be done. Then a question for Francesco and Paul. Again, today, was really, I think, amazing to see all of the various levers of growth and all of the various opportunities and you're involved in so many areas. And I was just curious when you meet and you talk about the business. What is like 1 or 2 things that you always talk about something that is really on top of your mind, your priorities and what's really you see as crucial for the long-term vision for this company? And then one last question, when it comes to emerging markets. Again, you mentioned always very important in this industry to have a localized approach. And these emerging markets, China, India are seeing growth well above average of the industry. Do you think you can really be successful and penetrate in an organic way? Or do you think in this market there is quite an important potential for M&A activity?

Okay. Susy, I'll start with your first question. Probably I would mention to store renovation, excellent example also back to the return on invested capital. In the vast majority of our store renovation investment, and we're doing quite a lot of them each year, we have a return in usually less than a year. So they are extremely productive investments. They create a lift and an acceleration in the top line and they create also an improvement in our marginality. I don't know if you've got a chance, and if you haven't, please do so before you take off to visit some of our stores, some of our Salmoiraghi & Viganò stores in town, the one that we have in Cordusio is a perfect example. Those represent what we can express with our stores. And those are a perfect example of very much what we can do with our products and the return that we get from those stores. The other example that is fairly close to me is the legal entity simplification. In last year, we closed out 100 legal entities, meaning that we eliminated the infrastructure that was not needed. I don't want to call it bureaucracy because it wouldn't be fair, but it's definitely we have been capable and able to concentrate activity in a single legal entity. And the digital infrastructure was our partner in that because we've been able to concentrate in the single legal entity, retail and Professional Solutions operation, all in the same entity. And that creates, obviously, a lot of synergies, but you also see reflected in our general and administrative costs.

Question is about priorities at the end because the meeting is the way you set an agenda and you take the decision that will impact the business. It's not easy to answer directly to your question, but I can tell you how I manage my time. 50% of my time is really taking care of action and ideas that will impact the group in 5 to 10 years. And this is my priority, defined today what will be our group in 5, 10 years. And that is, I believe, is in the nature of our group and our people. One company, digital network that now we are executing, we started design 8 years ago. 8 years ago, it was quite a dream with Chairman, with some executives of the company. And day by day, year by year, we really better defined, then we start to execute the big platform, IT investment, infrastructure, teaching people. And the 50% of my time is focused on what happened yesterday. This is the strength of the group. You know that we collect every day the exact result of the company of yesterday. So at 5:00, I have a result of all the store, wholesale, retail, e-comm, per SKU per color. I don't analyze all the data, but I analyze the outcome of our expert system that really indicate trends, indicate how people behave in Tokyo or in New York. And this is not because you can take every day 1 decision, but all of this information start shaping your future decisions. And what I can add, our company is -- organization is very simple, many times from the -- my position or Board position and the person that will execute the action, we have no more than 2 layers. So this is the way we act. This is the way we learn to manage the group from our Chairman, and we still believe is the best way. Paul?

It's always a tough question, this kind of question. That will take an angle, which is what is a good day and what is a good night. So what is a good day is if I have this feeling that I've been working with the team on the offer that we are really constructing the right offer, whether it's frame lands, innovation, you name it. That is really a territory that I consider highly important and motivating and how we launch and execute all of that. The other aspect of doing a good day is that we take good people's decision. It's -- when you bring such a large organization together, you have many, many human resource-related decisions to do right of any kind and one of them being the choice, keeping in mind a very meritocratic approach to it. So that is a diversity as an horizon so forth. So that is a good day. A good night is a night where you don't -- are not prevented to sleep because of a feeling of poor execution. For me, a bad night is when I feel that we don't execute well. And I think today, you felt that I would sleep well tonight and I've been sleeping quite well because I think the fact of bringing the organization into one young new company, we did well. The teams have done an amazing job at execution, and it was complex. So that would be my two cents on this tricky question -- tough question.

Edouard Aubin from Morgan Stanley. First question on M&A. So Stefano, you mentioned that M&A should add about 100 basis points of growth over the next 4, 5 years. Which areas -- I know you're involved in many different areas, but which areas you find particularly attractive? And what's the probability that within the next 4, 5 years, you make a relatively significant acquisition, i.e., at least the size of GrandVision. So that's question number one. Question number two is on luxury. So we've seen, obviously, over the past few years, a few luxury groups move their eyewear business in-house or Kering, Richemont, LVMH and so on. To what extent is that an issue for you guys?

I take the last. The M&A, now answer for luxury. We welcome really when Kering and Thélios decide to internalize this accessory. This is what is for these 2 companies. It's not the core business. But not because we see better competition or higher competition, what we see in Thélios and Kering, our 2 partners ready to invest and with [indiscernible] not as eyewear, but as a group, decides big enough to invest in the category. So I believe that this is a wonderful news when a big group take a commitment to invest in sunglasses. You know that we are suffering in sunglasses business, we are growing, but the category is not growing as Nike or as other categories because we are the only one that can invest, so optician, independent optician, optical stores are not [indiscernible]. This is really a signal. Now they are not going to spend because in the mind of the consumer, the communication is not strong enough to underline how sunglasses are important for life, for protect. So when we see this kind of decision are welcome. And we are helping areas in Kering to grow. We are the biggest customer of Kering, the biggest customer of Thélios Kering Eyewear, and we remain in our position to partner to open all our stores or our e-comm to promote their products, and the same we are doing with [indiscernible] Marcolin or many other brands. So this is really, for us, is a good news. So far, we didn't see really a change in the growth speed in the category because they just took out the business from Safilo, especially in the Kering and move to Kering Eyewear. But we expect in the year to come that will -- they invest much more in the larger category, and we will benefit. M&A, we have 2 visions. One is what is near to us. It's not a mystery that if you take where we are, what is left, contact lenses, it could be an area. We are not sure that contact lenses is really a part of our industry. That's because the company that are managing that category, they really commodize a lot and now is something the positioning of contact lenses as to rebuild to be a part of our offer. But of course, contact lenses is that one thing left. If you go just a little bit further, you have clinics, you have hospitals, you have anything connected with the decision to prescribe a lenses. It really is not an easy business. Really, we would like to have a small test somewhere in the world is something that we are analyzing, but no decision taken. M&A as a tradition. M&A as we buy pieces of market. I believe that there is very little is left in the market, and we don't see any players with the size that really matter for us or with the offering that really can add value to our portfolio.

It's Graham Renwick from Berenberg. I'll keep it to one as I think the bar has just opened. I think it's interesting that you said that the mid-single-digit revenue growth guidance is just volume-driven and price mix is just upside to that? Because you've obviously shown us a lot of great innovation today, which would suggest that price/mix should be quite material for you. So can you give us a sense of going forward, realistically, what price mix could contribute? What has it contributed in the past? So I guess another way to put it is, why shouldn't we go away from this presentation and I think that in the future, EssilorLuxottica can grow high single digit on average in the future with the element of price mix?

Well, for the past, as I mentioned before, price mix has been a primary driver of our growth. When you look at the future, you also have to remember, we all have to remind ourselves that we are a network company that we are a vertically integrated business model, meaning this is a company to manufacture and distribute. This is a network company to distribute all over the world. So volume is, by our DNA, a constituent part of our growth. No surprise. Then you ask me how much of the price mix will contribute, I don't know. I can tell you, 1/3 to 1/4 of our growth could be driven by price mix. And it's a price mix driven, as you rightly pointed out, by innovation, by new products that will be launched in existing market or in new market. It won't be through price lift of same products. That's not. That's not what we're doing. I think Francesco and Paul have said it many times, and this is the direction that we're taking.

Cedric Lecasble from Stifel. I have more or less the same question. So it's a follow-up really on this one, on the last one. Do you think in the future the share of cost of the optical industry, you'll take more spending from the consumer? Or is your industry growing because it's really improving penetration and correcting people that are not corrected today, even in developed markets. So your answer just now seems to be we have to capture more consumers and explain better what the solutions are, and not necessarily leverage the cost for the consumers of optical solutions. Is it the idea?

No. But I think you have to be careful saying, really, to try to put in a model or in a box discussion, you have a category that is personalized to the wearer. So tonight -- we will ship tonight, 1 million pair of eyeglasses in the world to opticians, to our stores to be delivered to consumers. Those 1 million pair of eyeglasses, we received the order from yesterday or maybe 10 days ago, and each of them are personalized, different frames, different prescriptions, different added value, different price. So the beauty of it is that it is a mass customized business. And what you have to do well is to have all those solutions available, the whole ecosystem, understanding it, the frame, the brand, all the different price point assortment, the lens assortment, and then the opticians plays a key role in that to adapt. And the result is what you see is the volume growth, is a penetration growth, is a trade-up, is a mix, is a change of categories, these new categories. If you try to modelize it, good luck. I have been in this industry for 15 years. I didn't modelize it. But what you have to put to work is what we've been trying to showcase to you in a very organized manner because it is a mass customized with high volumetry and you need to do it with super quality, efficiency, service and so forth. It works and it's very powerful. But it's -- you don't find it in a different industry. It's a very peculiar mix of vision and fashion, customized, high volumetry, direct, indirect go-to-market, it's cool, it's very interesting. I didn't give you the model. Sorry.

I, probably, would take the last.

Domenico Ghilotti from Equita. A few questions. The first on the cost side. So you are saying basically that you can keep the cost growing at around 3%, so because 3% top line is implying operating leverage flattish. So can you really achieve this limited cost inflation with all the investment and also the inflationary trend that we are seeing, particularly for 2023, 2024. And the second question, we have been speaking about the concern on U.S. consumers. I'm more concerned about European consumers squeezed by energy bills. So if you can give us a sense of what's going on in Europe? And the third question is on the online prescription. Is it time to invest to accelerate on the online prescription business model? Would you be looking for M&A opportunities, if needed? Or is it a bit too early?

I go very short on the last. Online prescription is really a part of our future because we believe that doctor play a big role in the safety of our customers. So it can be a part of the execution online. Renewal, it will be online, much more in the future. Acquisition, we don't see players that take seriously the prescription business. We see a big pressure on volume and discount that is very far from our approach. We try to deliver quality and respect our customers. So yes, the e-commerce for prescription will be a huge advantage in the future, but I don't see so far players that can be M&A target for us.

Second -- first question, actually, Domenico, with respect to our ability to hold that steady state at the 3%, implying our ability to manage a 3% growth of our cost base in the current environment. But first of all, let me say the outlook is a 5 years outlook, it's not the next 6, 12, 18 months. So we need to look at the things over a perspective of 5 years, where clearly, the ending goal, it's pretty clear. Then the second thing is have a look at the first half results. I think if you look at our first half results, you see growth, and you see margin expansion. You've seen margin expansion not only through some of the exercises that we described before on the cost of operating expenses. But you also see margin expansion at the gross profit level. So I think that's probably the best answer.

It's not coming out the announcement that we -- this is. So we close. We thanks you for coming and participation. Really it's amazing to see how many people are interesting in our industry, in our company, and how much time you spend analyze and helping us. This is, for us, is really an important announcement. One, because it's reinforced partnership with Giorgio Armani Group but another one because we signed for 15 years. And if we renew in 15 years, this is really a long-life partnership that we like. And this is signal how we -- our group, our open network is working. Armani is not anymore a licensed partner. It's really a part of our group, and it will benefit of all the capability that we have. And we really love its brand and hold the luxury feeling that it can bring. But we are starting a new era on the -- also on the relationship with the outside company, and we will announce in the future, many others of this kind of partnership, not only with licensed brands, but also with players of our market or outside our market, give really the understanding that everybody is a part of our world. So now we have a cake, wonderful cake from [ Markesi ], someone knows and some drink just to celebrate this announce and close our meet. Thank you very much.