Giorgio Iannella: Hello, everybody. This is Giorgio Iannella from the IR team. Thank you for joining EssilorLuxottica H1 2026 results management call. The group chairman and CEO, Francesco Milleri, the deputy CEO, Paul du Saillant, and the CFO Stefano Grassi will walk you through the business and financial highlights of the period. After their presentations, there will be a 30-minute Q&A session. If you want to ask a question, please press star followed by 5. We kindly ask you to limit your questions to a maximum of two. With that, I hand it over to Francesco.
Francesco Milleri: Welcome back, everyone. And thank you for joining us today. I am pleased to reconnect with you to share the result of the first half of the year and give you an update on the execution of our strategic vision as the Group evolves at a speed that is completely new in our history. First of all, I would like to say just a quick word on the financial performance of the first half. Revenue growth at a constant currency remained extremely solid at 9.7% fully aligned with our targets. This result was supported by the resilient performance of our core business of frames and lenses and by the exponential growth of our clinical and wearable category. Adjusted operating profit progressed even faster at 15% alongside our investments in R&D, AI and medical capabilities together with the strong development of our industrial and commercial footprint. Cash generation confirmed its strong trend exceeding €1 billion in the period. Moving to our strategy, we are taking a precise and ambitious direction. EssilorLuxottica is leveraging its unique platform, vertically integrated, fully omnichannel, leading insights and global footprint to move towards the new frontier of oculomics. Based on eye-related biomarkers to offer medical services everywhere and at all levels. Entering as a main player in the whole healthcare market bringing this new technology from laboratories to clinics and stores. To understand what this means in practice, let me start from LensCrafters opening of its first vision and eye health surgery center in Philadelphia. A fully integrated platform that brings comprehensive eye evaluations and surgical procedures under one roof. Together with our unmatched portfolio of frames and lenses. This is the first step of a plan to build a system of surgical hubs based on our optical store network. A healthcare center like this will go far beyond eye disease, A recent commentary that circulated widely in the U.S. predicts that in five years the largest cardiovascular screening site in America will not be a hospital or a primary clinic. It will be the LensCrafters banner and broader optical practice network. This is not a speculative bet since the concept of oculomics was established, more than 400 peer-reviewed studies have validated the eye as a primary and reliable window into systemic health. Making it today a recognised and increasingly diagnostic approach across the scientific and medical community. A single 15-minute exam at one location, either of the group or of its partners, powered by Heidelberg high-resolution OCT complemented by RetinAI's capability will be able to detect a wide span of diseases. Like diabetes, cardiovascular issue and cognitive decline. This is where our vision is going, complementing and supporting primary care. Delivering prevention early detection and predictive medicine where people already go. Our short-term ambition is to create a new layer in the healthcare system that will more efficiently connect patients and hospitals. Complementary to that, in order to strengthen trust, governance and accountability of our developing business model, we are building the foundation to manage data as a strategic asset. Reliable, protected, compliant and usable across the group and geographies. To expand these new medical services from the physical practice directly on the face of billions of people through wearables we need a specific missing piece of technology. In order to achieve that, we started a strategic partnership with Applied Materials to jointly develop and manufacture the new generation of intelligent optical system for AI and AR wearable. This partnership is aimed at shaping the future of optics ranging from waveguide to adaptive and electro-active lenses. From prescription integration to advanced encapsulation, dimming and light modulation technologies. The lens category itself will be redefined and our capability to master this new stack industrially at cost, at scale, with ability to personalize will let us lead the future not only of smart glasses but of the entire premium eyewear category. No other player in the world can combine comprehensive know-how and excellence with semiconductor-grade manufacturing capabilities. Our objective is to place EssilorLuxottica at the forefront of innovation in the next generation of lenses and the first products and pilot line are already being realized. Regarding our hearing aid glasses, Nuance Audio is progressing along its discovery path, building awareness, and adoption. The second generation will hit the market in mid-September with improvements in battery life, audio amplification, new features and better design. A final word on Wearables and our partnership with Meta. Which continues to deliver exponential growth. In H1, we further enriched the portfolio with Ray-Ban Meta Optical, our first optical style adjustable and perfectly fitting to be easily worn for the full day. Together with Meta, we also launched a new collection specifically designed to open the eyeglasses category to a broader, younger and price-sensitive audience. Together with Ray-Ban and Oakley as well as the display model, we now offer the most complete lineup of AI glasses in the market and more is to come. The category is scaling across geographies, brands, price points and consumer segments with higher profitability already visible in our numbers. In conclusion, H1 2026 confirms that we are where we want to be with sales and profits growing. We remain confident in our ability to deliver in our financial ambition and our strategic vision. In less than 10 years, we deeply transformed our group from the best-in-class in frames and lenses to the pioneer of the wearable category and now into the eye med-tech and oculomics healthcare leader. With that, I hand over to Paul.
Paul du Saillant: Thank you, Francesco. It is a pleasure to be with you today. The first six months of 2026 have been in many ways, a period of consistent acceleration for our group. In terms of strategy execution, and financial performance. Behind the numbers, Stefano will walk you through shortly what stands out to me is our team's unique ability to continuously execute across the board. Advancing the science, expanding the industry footprint, and staying close to our patients and consumers. None of this happens by chance. It rests on assets and capabilities we have been building over decades, made up of an integrated production and lab network, a supply chain designed for both agility and resilience, and a distribution model that spans wholesale physical retail, and e-commerce channels. These are the foundations that allow us to bring innovation to market at speed and scale. Wherever our patients and consumers are worldwide. At the heart of this delivery is our core business, of eye care and eyewear. Which is a key driver of the group of resilient growth, both in revenue and profits. In ophthalmic lenses, our pipeline is rich. Over the recent quarters, we unveiled Crizal Natural Look, Varilux Immersion, and Varilux XR, steps forward in the key fields of anti-reflective and progressive lenses. To be rolled out across our trade channels. We also are having great product dynamics under Shamir and Nikon brand. On the eyewear side, the last six months confirm the enduring strength of the Ray-Ban brand in traditional glasses. Supported by the successful rollout of the Ray-Ban Innovation Lab, new polarized ultra lens technology, the launch of the Transitions Color Touch capsule, and continued momentum on the Wayfarer models and aviator shapes. Our new luxury eyewear collections were well received by our customers at the recent EssilorLuxottica Days. With Miu Miu and Chanel at the forefront. Beyond this solid base, I would like to focus on what I believe is the fil rouge, of our story. Turning science into human impact at scale through three deeply connected engines. Our portfolio of myopia management lens solutions our R&D capabilities and industrial platform, and the go-to-market global reach. Science, scale, and access. One single continuum. Let me start from myopia management a field where we have further strengthened our leadership. Keeping sales growth above 20% quarter after quarter. Thanks to strong clinical evidence and a widening range of solutions across technologies, brand, and price points. In the first half, we helped shape the next frontier of the field at flagship scientific events. WCC and APAO 2026 in Hong Kong, we broaden the conversation from slowing progression to prevention. And at ARVO 2026 in Denver, we presented the most comprehensive evidence base ever built around myopia spectacle lenses. Including a 7-year Chinese follow-up confirming Stellest's sustained efficacy. In the U.S., Stellest has already reached 11,000 doors across channels, progressively bringing the eye doctor community on board to prescribe it. And in June, we launched Stellest in Japan. Another high prevalence market. While we continue to invest in R&D assets and capabilities in France and Italy, We complemented our global footprint with a new R&D hub in Lat Krabang, Thailand, a state-of-the-art 5,000-square-meter center located next to our major manufacturing facilities. This hub is bringing under one roof advanced material research, polymer chemistry, characterization, and industrialization for next-generation lenses, wearables, and medtech. Another major decision we announced is the rollout of wearable production in Italy. Adding a new premium product category to the range assigned to our best-in-class Italian plant. This reinforces our leadership in the eyeglasses and paves the way for the launch of new Made in Italy smart eyewear. Stefano will give you details on the excellent performance of our nearly 20,000-location retail network worldwide. I would just like to remind you that together with our leading wholesale presence, our brick-and-mortar global distribution platform is a key success factor in our omnichannel business model and a major driver of its evolution. As a part of that, in April, we took a major step acquiring a stake in Top Charoen, Thailand's largest optical retail chain with almost 2,000 stores across the country. An integrated eye care service model, and a portfolio of well-known house and license banners. Founded in 1950 Top Charoen brings us closer to consumers in one of Asia's most important market. Elevates vision care standards across the region, and creates a natural runway to accelerate the wearable category in Southeast Asia. Together with our Thai manufacturing footprint, and the new R&D hub, Thailand is emerging as a fully integrated ecosystem. Last word on sustainability. Which is a fundamental pillar of EssilorLuxottica's journey. Our facilities are designed to the highest environmental standards. While our single-use plastic reduction efforts continue to progress well toward our 2030 targets. As mirrored by our improved ranking, like last year, CDP Climate A rating and DJSI recognition. To conclude, EssilorLuxottica progress in H1 is centered on a unique combination of clinical science, integrated industrial scale, and consumer reach. This is quite remarkable. As Francesco said, we are delivering on our long-term ambitions, while redefining the boundaries of our industry. With that, I hand it over to Stefano.
Stefano Grassi: Thank you. Thank you, Paul, and hello, everyone. Welcome to our 2026 H1 results. We are wrapping up a strong first half with revenues that are up 9.7% at constant currency, and 5.7% at current exchange rate. The second quarter landed at 8.7% at constant, and 7.2% at current exchange rate. Clearly, both second quarter and first half very much aligned with our medium-term guidance of solid revenue growth at constant currency. Now, if we take a bit of a closer look at our second quarter, we see that North America, EMEA, Latin America, they all deliver high-single-digit, while Asia Pacific posted a double-digit Q2 at constant currency. Our core business that just as a reminder, represents the entire EssilorLuxottica perimeter excluding wearables, it is up mid-single-digit during the course of Q2. Now, last comment before we move into the geographies. As you might have seen, the gap between constant and current exchange results is reduced to 1.5 percentage points during the course of Q2, as the U.S. dollar devaluated against euro approximately 2.5% during the second quarter. So I am knocking on the wood here, but at those currency level, you might find and expect some currency tailwinds during the second half of this year. But now, as usual, let's move across the four regions and let's begin with the largest one, North America. North America recorded during the course of the second quarter top-line that was up 7.2% at constant currency. In professional solution, we deliver a low-single-digit revenue growth and in the direct-to-consumer side, we deliver double-digit Q2. When we look at our B2B, the independent ECP deliver a good quarter in acceleration versus Q1 with the Vision Source partnerships that was up mid-single-digit. While our key accounts experienced a slowdown in Q2, but as usually, I remind everyone to really look at our B2B over a longer period of time, typically six months. And when you look at that, we have our key accounts that deliver high-single-digit for the first half. Moving to price mix and volume, price mix was very much the main driver of our growth in the lens business and also in our frame business. Wearables, they recorded another outstanding quarter with the two new models of Ray-Ban Meta prescription. They were up for an excellent start. During the course of the second quarter. Our luxury portfolio, luxury delivered a high-single-digit quarter I would say on the spotlight here, Miu Miu, Chanel, and Jimmy Choo. And, and now a last touch on Stellest. Stellest is now ramping up with a distribution that is now available in about 11,000 doors in the United States. And I would say we have a very encouraging results during this first year of a very promising journey. But now let's switch the other side of distribution in North America, let's move to direct-to-consumer. We are clearly happy about the second quarter. LensCrafters delivered high-single-digit comp sales recording the 14th consecutive quarter of positive comp sales with traffic conversion, volume and price mix that all continue to trend in the proper and the right direction. I would also add this quarter, the subscription plan. We are rolling that out in about 830 stores, in LensCrafters in North America, and I believe this could be another important asset during the remainder part of this year and the future years. On the Sun part, Sunglass Hut delivered comp sales above 7% with Ray-Ban Meta that represents a strong driver and we coupled that with a higher second pair penetration and I would say a more diligent store execution especially on discounts, both our Sunglass Hut location, the international more exposed to international tourist traffic, and the non-international Sunglass Hut locations deliver high-single-digit comp sales. But now let's move to the second region in the pipeline, Europe, 8% at constant currency, and I remind you, last year, we delivered 9% growth at constant currency, in the EMEA region. So we are very pleased with the results of the delivery in the EMEA region with a high base I would say, direct-to-consumer, double-digit pace, professional solution, low-single-digit quarter. Italy, Turkey, Eastern Europe, they were all up double-digit, UK and Scandinavia delivered a high-single-digit Q2, while France was flat in this quarter. When we look at our B2B, I mentioned during the first quarter, but I think it is important to be mentioned again, the switch event that was held in April in Monaco. It was the second event that we had this year for our B2B clients. It was an excellent opportunity to showcase to our wholesale partners the innovation applied to vision care artificial intelligence, medtech, and wearable technology, a great success. In professional solution, We had a strong price mix. I would say that price mix was strong on both lenses and frames. On the frame side of our business, we posted a strong quarter in Ray-Ban Sun and prescription, and, the growth in this part of the business was very much by volume due to a strong demand across our distribution channels. The other key brands Oakley was up double-digit while when I look at the licensing portfolio, luxury and premium fashion, experienced a negative quarter in Q2. On the lens side now, a low-single-digit quarter. Here we have a good traction, in particular on Essilor, in Varilux and in Shamir. Now let's move to the other side, direct-to-consumer. Our comp sales in direct-to-consumer were slightly below 10% with a material acceleration compared to the mid-single-digit comp sales that you might remember delivering Q1. When we look at our optical retail side of our business, Vision Express was up double-digit. Salmoiraghi & Viganò was up high-single-digit, while when we moved to Germany, Apollo delivered mid-single-digit quarter. I would say that in optical retail price mix was stronger than volume and that was true for both lenses and frames, it is worth to mention that now the subscription model that as I mentioned before, we are ramping up in LensCrafters, and it is well established in the EMEA region, is now close to 30% in terms of penetration of revenue and that is approximately 6 percentage points higher than the same period of last year. Let me close the journey in the region with the outstanding performance now of Sun Retail. That very much delivered a double-digit comp sales on top of a double-digit sales in Q2 last year. In the spotlight, Turkey and Italy delivered double-digit. Our Iberia business was high-single-digit, while UK and France delivered a mid-single-digit quarter outstanding. The eyeglasses and I would say a strong retail execution were very much the two main factors of those outstanding results. Now the third region is the best performer for the second quarter, and that is Asia Pacific. 17% at constant currency, The second quarter in Asia Pacific was an outstanding quarter for the region. The region posted this double-digit also including the impact of Top Charoen in Thailand, that was consolidated at the beginning of the second quarter, about 2,000 stores added in our store footprint in the region. But even excluding that, you will be looking at Asia Pacific delivering a double-digit quarter. We were double-digit in India, We were double-digit in Japan. We were double-digit in China. In Southeast Asia and Korea. Australia posted a mid-single-digit quarter, so definitely many reasons to be happy about the performance in our Q2 in the Asia Pacific region. If we now deep dive a bit more in some of the key countries, the largest one is China. In China, professional solution one of the main growth drivers was the lens business that was up double-digit. Driven again, by a strong quarter of Myopia lenses, in particular we continue to observe a strong demand, in particular, the DOT technology. While on the frame side, I would probably mention our luxury portfolio that overall was up double-digit in Q2. Now, I will last touch on direct-to-consumer segments. Optical comps were up mid-single-digit with a good delivery of OPSM in Australia. When you look at our Sun business, AI glasses continue to see a great traction from consumers, in particular in markets that were recently opened Singapore and Japan, while Sunglass Hut Australia was really the only country that recorded negative comp sales in a quarter that as you know, it is in a low seasonality period. Now the last region in the pipeline is Latin America. Latin America delivered 6.7%, a very consistent pace between Q1 and Q2. In Q1, we recorded 6.7% in constant currency, in the region, we had a double-digit growth on direct-to-consumer and a low-single-digit quarter in our professional solution. We look at our different countries in the region, Brazil, Mexico and Argentina, they were up mid-single-digit, while Colombia and the rest of Hispanic Latam countries were up on the double-digit pace. When you look at our B2B side, GV delivered a high-single-digit quarter, very much driven by optical and wearable, we continue to see a strong demand, in particular, the two new countries that were recently opened, Brazil and Mexico, while consumer seems to really appreciate our Oakley Meta and Ray-Ban Meta glasses. Closing on the direct-to-consumer, our Sun business delivered a double-digit quarter in an acceleration versus Q1, very much driven by our Brazilian sun business that was up double-digit, thanks to the Oakley and Ray-Ban wearables while the 1,600 optical retail stores that we have in the region posted a high-single-digit comp sales and as usual, the GV banners, in particular the one that we have in Mexico and in Andes, delivered an outstanding second quarter. But now this is the end of our journey through the four key geographies for EssilorLuxottica, and let's now start a new chapter and that is the profit and loss. I would say on the profit and loss that we delivered an outstanding first half. The gross margin accretion was very important and we delivered. We had a double-digit growth on the operating and net profit at constant currency. So let me share here few highlights for this first half profit and loss. As I mentioned, gross profit up 10 basis points, both at constant and current exchange, and that is a material improvement compared to the 400-plus basis point dilution that we reported, if you remember, in the second half of last year. We had a strong price mix, for sure that was an important help, and we also had the net positive impact year-over-year from tariffs in the U.S., and those were really the two main drivers of the gross profit accretion. Our operating expenses as a percentage of revenues improved 80 basis points despite the investment that we continue to sustain to develop our medtech platform and promote our innovation across the different brands. Bottom line, our operating profit was up 80 basis points at constant effect, and 50 basis points at current exchange rate. When you look at our net profit, we recorded 50 basis points improvement at constant, and 20 basis points improvement at current exchange rate, despite a higher cost of debt and a higher tax rate by 70 basis points, still delivering double-digit growth at constant currency. And let's now move to the last chapter of our journey here, and that is the free cash flow generation. Our free cash flow can be summarized in one number, €1.067 billion free cash flow generation for the first half of 2026 the strongest one in the last five years for EssilorLuxottica over €100 million better than the free cash flow generation that we had last year. Now before we hand it over to the operator, let me just close saying that we enter the second half of the year with a strong motivation and commitment to continue to deliver profitable growth. While we are fully aware that the comparison base in the second half is quite demanding, we are also confident that our innovation pipeline and the continued productivity improvements will support our momentum during the last six months of this year. But now let me hand it over to the operator for the usual Q&A session.
Operator: Ladies and gentlemen, we will now start the Q&A session. Our first question comes from Oriana Cardani, Intesa Sanpaolo. Please go ahead.
Oriana Cardani: Yes, good evening. Thank you for taking my two questions. The first one regards the profitability of the smart glass in the first half of this year. You stated that wearable products improved the gross margin in the first half. Could you comment on the factors driving this increase and the extent of that expansion of gross margin for this category? And my second question is on cost trends. How do you expect operating expenses to evolve in the second half of the year? Are you seeing any inflationary pressure? Thank you very much.
Stefano Grassi: Good afternoon, Oriana. And welcome to our call here. So let me take both your questions. First one on smart glasses. Well, when I look at our smart glasses, I should say that all the KPIs with respect to smart glasses whether you are looking at top-line revenues or cost, are actually improving year over year. We are seeing an improvement in the average price. We are seeing an improvement in the higher penetration of our lenses. So the prescription part of our business. We are seeing an improvement in the penetration of Transitions We are seeing an improvement in penetration of polarized lenses. And also from a cost point of view, we do see a better productivity in our smart glass AI glasses in general. So very pleased with the result we have seen, and clearly, all of that results in what you see in the gross margin. The second question regarding inflation. No. I should say there is nothing that concerns me at this stage. I think everything is pretty much under control, and I think it would be like this also during the second half of this year.
Operator: Our next question comes from Julien Dormois, Jefferies. Please go ahead.
Julien Dormois: Hi, good evening gentlemen. Thanks for taking my questions. I will limit myself to two. The first one is whether you guys could elaborate on the partnership with Meta. We have obviously seen the Meta launching Meta glasses and starting with a different price points than what has been advocating so far in your category. So just curious as to how we think about potentially diverging pathways between Meta and yourself in terms of the positioning of the glasses. And whether that could possibly open up the floor to more partners going forward, and you are starting to work with other players in the tech industry? And the second, question, relates to smart glasses. You indicated that the sales of smart glasses nearly doubled in the second quarter. And I think that probably means around 4 percentage points contribution to Q2 growth. So if we do the math here and because, that was a 5 percentage points in Q1, that would probably indicate that in absolute sales, Q2 sales of smart glasses were slightly lower than Q1 sales. So just curious how we should think about the phasing here, especially also in the context of a very tough comp on that side in the back half? Thank you very much.
Francesco Milleri: Hello, Julien. I will try to answer to the first question. As usual, we look at to manage a large portfolio, from from luxury to mid-low price of our eyewear. That would be also the case of the AI glasses. We started with our iconic brands Oakley and Ray-Ban. We will launch in the future other brands also in the high-end of our Pyramid, But, at the same time, really, we look, to expand our market targeting a new consumer that have more sensitivity to the price and maybe are younger, more interested in having something technological. So it was a great idea to support the Meta glasses. So a tech brand that can easily target a segment of population that is so far not completely included, in our offer. Also, on the lower price, I am not so I do not agree completely because if you look at the best-selling that is the oval one supported by a famous ladies that is quite at a mid high price and is going very well. So I believe that the Meta partnership is growing, is working very well. It also now goes beyond the tech partnership. And is helping us really to create a more differentiated portfolio with some brands, more tech, for electronic consumer targeting that can help the growth and establish a stronger presence into the market. About more partners, so far, really our capabilities are totally on the Meta partnership. We are launching every few months new products, new features, So we are so far very, very fine and happy about this partnership.
Stefano Grassi: And I will take the second part of the second question, Julien. With respect to the top-line growth profile. I think in a way, it is very simple. So you are really looking at the core traditional business trending on the upper part of the mid-single-digit range, and that includes the bolt-on M&A. And the complement of that to the 8.7% top-line growth that we recorded in Q2 is very much represented by smart eyewear growth during Q2.
Operator: Our next question comes from Hugo Solvet BNP Paribas. Please go ahead.
Hugo Solvet: Hi. Hello. Thank you for taking my questions. I have two, please. First, wondering if you guys are actively pursuing partnership for lens supply agreement with other smart glasses manufacturers. That would be my first question. And second, just a clarification. Did you receive the tariff refund in H1? And can you quantify that, please? Thank you.
Francesco Milleri: Hi, Hugo. Thanks for the questions. I will take the first question about our partnership with Applied Materials. The partnership with Applied Materials is really a strategic one. And it is in the broader concept that we have in the way we look at market. As you know, we are a manufacturer producer. We are also suppliers of all other players in the optical market. And also, we are the big customer of almost all brands that operate in our market. This is a complex position, but this is what really makes our company completely unique in the market. So now, when we understood that the future of the smart eyewear would be projection, we believe especially for our focus on the medical part, projection, it will be really a key feature that will allow us to really play a main role on the future of healthcare. So we started this partnership with Applied Materials to come out with a new class of lenses that are combining the capability to project monocular and binocular, the capability to really intercept through sensors much information from the light outside and many other markers that we will have. So that is another piece of our strategy, not just sell a complete pair or a frame of wearable, but also become a strategic supplier of a key component that any other manufacturer, producer, or brands in the AI or AR space have to buy from us. Thank you.
Stefano Grassi: And I will complement Francesco's answer with the answer of your second question, Hugo. Good afternoon. So, Tariffs, let me just frame the context here. On what you had for the first half of this year compared to last year? So you have two effects that coming into play. The first effect is the tariff payments and charge to the P&L that we have in the first quarter 2026. And those tariffs we did not have in the first quarter of last year. So there is clearly a headwind in that respect. On the other side, the second effect is represented by the tariff refunds. That came into the first half of 2026. The net impact of those two things, it is a net positive impact which accounts for 60 basis points in our profit and loss. And clearly, all of that effect is loaded on the gross margin side.
Operator: Our next question comes from Grace Smalley, Morgan Stanley. Please go ahead.
Grace Smalley: Hi. Good evening. Thank you very much for taking my questions. And the first one would just be a quick clarification, Stefano, on your comment on tariffs. Understood on the net 60 basis point positive impact in H1 taking into account those two factors. Could you just help us clarify then what we should be expecting in terms of the impact from tariffs in the second half and whether you got the full refund in H1 and there is no February fund to come, or just how we should think about that as we try to model the tariff impact, if any, in the second half of the year? And then my second question, please, would you see on the top-line, I understood your comments at the end of Q&A that yes, you have a tougher comparison base, but then that you are also very confident in your product pipeline. Just as we are thinking about the second half Revenue growth, how should we be thinking about maybe professional versus DTC, as I think professional solutions slowed a little bit in Q2. So if you could help us with any outlook on professional solutions in the second half, whereas DTC remained very strong in Q2 and whether or not we should see that continuing in whether that is what you have seen in July already. Thank you very much.
Stefano Grassi: Hello, Grace. Good afternoon. Afternoon. So let me take the answer to both of your questions. So tariffs, there might be something coming during the second half of this year. We will keep you posted throughout the year on how things progress in that respect, but there is something more that might come in the second half. Now, second question regarding top-line. I mentioned it before, right? We fully acknowledged that we have a demanding top-line in top-line base in the second half of last year. But I also think there is a couple of things that we need to take into consideration. First of all, we started with a good month of July. We are happy about it. it is a nice entering into the third quarter. Secondly, I would say we have a lot of expectation. First of all, from unexpected improvement in our Stellest productivity in North America, As I mentioned before, we have about 11,000 doors that have been opened. We activate the top and key accounts in North America. Those are largest account. Those represent thousands of doors North America, and we do have an expectation of an improved productivity during the second half of this year. On top of that, I would say that we have a pretty good and strong pipeline of product innovation that will hit the market during the second half of this year. I cannot be too specific here, but obviously, if you take, for example, some of our leading lens brands, for example, like Varilux, will have some exciting news that will come to the market during H2. Our wearable, our AI glasses will have some interesting newness coming to the market in H2. Nuance Audio will have a second generation, as mentioned before, coming up in the second half where efficacy and all the key features will improve compared to the existing version. And last but not least, some of our key assets on the med-tech base have some exciting news that we will look at the second half as a go-to-market impact. So we have a lot of good reason to look at the second half with a good degree of optimism.
Operator: The next question comes from Hassan Al-Wakeel. Barclays. Please go ahead.
Hassan Al-Wakeel: Good evening. Thank you for taking my questions. Firstly, another question on the recent meta launch and how you see the mix transitioning over time and the extent to this is a further margin headwind given some of these are lower price points and also not manufactured by you? And if you can confirm whether you are an exclusive lens manufacturer. On these new launches. Secondly, following up on costs, thank you for the net tariff number. Is the gross tailwind, of €300 million in the right ballpark? On the refund, and then appreciate H2 may benefit from inventory and some hedging when it comes to cost inflation. But all else equal, how are you thinking about these, as a headwind in 2027 given memory prices in particular and any mitigating actions that you are taking? Thank you.
Francesco Milleri: Good evening, Hassan. About the evolving of the launch of Meta. With EssilorLuxottica, would like to remind. We are exclusive lens manufacturer for Meta, of course. But also without that, the partnership is so strong that is natural for us really support the Meta brand as it was an EssilorLuxottica home brand. So that is something that we are very happy about. Margin impacts for us are positive for many reasons. one, because we are selling that kind of product with a pretty good margin because and also because the platform the technological platform that is almost the same with the bigger volume reduces its cost. And that impacts the margin. So I believe that is another reason why we are we still continue to be very happy with Meta, with the Meta brand that discover a new part of the market not targeting right now with our product. I believe we have some other strong brands that maybe you can imagine on the apparel part, very exclusive, that can open even a bigger segment of young population, and we will do that kind of move as soon as we can. Thank you.
Stefano Grassi: And just complementing this other answer, Hassan, good afternoon. With respect to cost dynamicss. I do not see an issue here. Honestly, I think we have our cost base well under control. Our planning, it is very accurate. And so I do not see, to be honest with you, any headwinds that will impact our second half of this year in terms of costs. I still believe, actually, that we are going to see a pretty good margin progression also with respect to the second half of this year with respect to wearables. I think the trend that we have seen in the first half, the improved productivity the mixed trend that we have seen in the first half, I believe, should continue also during the second half of this year. The addition of Meta glasses to the portfolio of products it is an enlargement. Of our product offering. it is a result of a segmentation. And if you think about it, now we have a wide price range that starts from $299 if you remember, that was the old pricing for the first generation of the partnership that we had. And now we have a precise positioning for those new Meta glasses in there. But I believe, again, Mix will play in our favor. Lenses are trending in the right direction, and July is confirming that trend. So again, do not see from where I sit right now any source of concern with respect to cost inflation?
Operator: The next question comes from Veronika Dubajova. Citi. Please go ahead.
Veronika Dubajova: Good afternoon and thank you for taking my questions. I have two, please. one, I just want to touch back on the second quarter performance, and I think Stefano, on the Q1 trading call, you talked about double-digit growth in April. Clearly, you have come below that for the Q2. I am just curious where have you seen areas of slowdown? And are there any regions where you are particularly concerned the health of the consumer? Do not get me wrong, the 9% in Q2 still very, very, very impressive. But I am just trying to understand how that kind of growth evolved through the quarter. And then my second question, I know we touched a lot on smart glasses, but I would love to ask about myopia and how you feel in particular about the uptake in the U.S. and what your views are on, if or if you can give us an update, apologies, on what proportion of the myopia revenues are now coming from the U.S.. Thank you.
Stefano Grassi: Afternoon. Veronika, I will take the first question and then I will pass Paul for the answer to the second one you just posed. So I mean, when I look at the performance, the difference between Q1, Q2 is not that material. If I probably have to really point it out to something, we have seen a softer trend on some of the large account in North America B2B. But again, when I look at the performance over the 6 months period, in North America Professional Solution, are high-single-digit. High single digit in North America. I do not think we should take that for granted. Right? So, again, sometimes it is it is really a matter of timing. And, between sell-in and sell-out. And therefore, when you look at over a period of 6 months, you have a much cleaner view of what the performance should look like. And I think the performance in North America in that respect over 6 months period is extremely compelling. Paul, you might wanna take the second one?
Paul du Saillant: Yeah. Thank you, Veronika. So on Myopia, Myopia in the U.S., first, let me give you just two data points. In 2025, we had 22% growth of our myopia solution altogether. Worldwide, with 80% of it coming from China. In the first half, we have 25% growth coming from myopia solution, and China is 75% of it. So it means that we see an acceleration in two key geographies. One is Europe, which we started to go-to-market in Europe five years ago. And where we have now some important position for this solution. And we have started the U.S. As you know, following the FDA approval in September last year. We have progressively embarked the doctor, the eye doctor community, We have, as it was said by us, established in 11,000 doors in the U.S. In the first half, This new prescription capability, we have had very important event to embark the ECP community, like vision source exchange, early May. We have had 40 roadshows with doctors, city by city. Really, the first thing was to, after getting the FDA, to embark the eye doctor community because this is where all starts. That they understand what it is about, and they start to prescribe. So we are in this phase, and we see more and more traction coming in our own retail, and also in key independent practice or key account. So we will support that now also with some media in the second half. Like Stefano was saying, really, in the second half, we will see the acceleration in the U.S. starting to really build up. And we will stimulate the awareness with the parents, with the children, So when they go for their prescription eyeglasses for their children, they know about it, And then now the whole prescription acceleration will start to take place. So this is really what we are doing And you see it is a fantastic journey that we are methodically country by country building, and that is, as it was said, quarter after quarter, growing north of 20% which is quite now significant considering the size of it. So that would be my comment on your question, Veronika.
Operator: The next question comes from Thierry Cota Bank of America Please go ahead.
Thierry Cota: Yes. Thank you. Good afternoon, everyone. I have two questions. Please, which are mostly follow-ups. First, on the tariffs, you highlighted that you may get some more refunds in the second half. I was wondering now the tariffs are lower altogether, so maybe more structurally, what kind of benefit do you expect from lower tariffs starting in H2? And more visible next year? At the gross margin level? And secondly, you mentioned that on the cost side, while we are sure about H2, I was wondering what memory costs and the commitments for purchase next year. Whether you would think that memory price inflation would have a negative impact on the gross margin of wearables. Would that offset the benefit from scale? Or do you think that this would be largely overwhelmed by growing scale? And so that the margin of wearables next year should still be going up. versus this year. Thank you.
Stefano Grassi: Good afternoon, Thierry. Let me take both of your questions. Second half tariffs. This year compared to last year, yes, there is a they are slightly lower but I do not think it is materially lower this year than compared to last year. Cost I think the dynamic on cost, it is going to be a combination of a couple of things. Continuous efficiencies, on the supply chain. There is a scale effect. And those two things coming together and coupled that with a better mix in terms of, average pricing, will make the improvement in margin that I described with you before. And that we expect to see for the second half of this year.
Operator: The last question comes from Domenico Ghilotti. Equita. Please go ahead.
Domenico Ghilotti: Good afternoon. two questions. The first is a follow-up on applied Materials. Particularly, I would like to understand if the intellectual property will intellectual property will be yours, will be shared with Applied. And, if you can give us a sense of the timing required before hitting the market with some new products. And second sorry, still on the profitability. So trying to understand if it is fair to say because you have mentioned several of tailwinds. So it is fair to say that excluding the tariff refund, we still see--so we will see a recovery in profitability in gross profit in the second half. So is that it is fair to assume this kind of trajectory?
Francesco Milleri: Hello, Domenico. On the Applied Materials, of course, the patents that we will use on developing new lenses will be shared. We believe that this partnership could evolve in much more than just a partnership for a project. It will become really a structural JV to really face the new demand that will be very strong and see us in a real unique position combining microprocessor capability and material treatment of Applied Materials and the optical know-how and capability of logistics and distribution of EssilorLuxottica. Products are very advanced, prototypess are already visible and we believe in a short and some production lines are already in place. So we hope to have already at the beginning of next year something to sell on the market.
Stefano Grassi: And the answer to the second question, Domenico, I think there are good reasons. To see a good trajectory on gross margin. Also for the second half. As you know, I do not like to guide on quarters on the half, but I think the constituents that we see will continue to move, in my view, also in the right direction for the second half of the year. So I think when you look at our gross margin, there are good reasonss to see it on a positive trend also for H2.
Domenico Ghilotti: Okay. Thank you.
Francesco Milleri: I believe we are at the end of our call. I want to thank you all for following us with this patience and attention. Also, I hope that in the next call at the end of the year or the beginning of the next, we will really start to talk about the new frontier of oculomics surgery and the new vision that we have for the entire healthcare world that they will contribute a lot in the future to the revenues and profits of our company. Thank you very much.
