ALTAMIR_REGISTRATION_DOCUMENT_2017

Presentation of the Company PRESENTATION OF THE COMPANY AND ITS ACTIVITIES

1

www.alainafflelou.com

1) Business description Alain Afflelou is a leading optical retail chain in France and Spain. Since its first store opening in 1972, the group has expanded significantly and operates as an optical and hearing-aid services franchisor. As of 31 October 2017, the company had a network of 1,478 points of sale, including 955 in France, 387 in Spain and 136 in eleven other countries. 2) Why did we invest? Operating in the large and resilient optical market, Alain Afflelou has a strong franchise business model benefiting from a highly recognized brand and know-how in marketing, communication and exclusive products. It is an attractive service and intermediation-based business model with low capital intensity and limited fixed costs. The company has a complementary and experienced team. 3) How do we intend to create value? The objective is to build a leading optical and hearing-aid franchisor in Europe with a strong focus on Southern Europe. The group shows significant potential for further growth via new openings in core markets, international expansion, development of newproducts and business lines, as well as store refurbishments. 4) What has been achieved? In 2015, the group completed the acquisition of Optical Discount, a franchise discount chain of 89 stores in France. In July 2016, the Group completed the acquisition of Optimil, a chain of 55 franchised optical stores in Spain with a discount positioning bringing theGroup’s number of stores outside France to over 490. In September 2016, the Group acquired happyview.fr and malentille.com, bringing in an experienced teamof digital experts in the optical sector to support the group’s omnichannel strategy, based on the relaunch of the Afflelou.com website, whose main objective is to drive in-store traffic.

In October 2017, the Group announced the successful issuance of €425mof high yield further lowering (after the 2014 refinancing) the overall weighted cost of debt to provide greater flexibility to fuel growth. In addition, the company continues to develop its hearing aid business, which already has more than 180 points of sale, mostly in the form of corners in eyewear stores. 5) How is it performing? For the financial year ending 31 July 2017, Group sales amounted to €372.8m (+7.9% vs. the previous year) and EBITDA increased by 4.4%. Performance was driven by solid like-for-like growth across geographies, clearlyoutperforming themarket inparticular in France, coupled with store openings, offset by the ramp-up of the hearing aid and digital activities. Over the first three months of the current financial year (Aug 2017-Oct 2017), Group sales amounted to €90.7m (+7.5% vs. Q1 2016-17) and EBITDA increased by 11.9%. In amarket environment which remains competitive, theGroup continues tooutperform its market thanks to the ramp-up of closed networks, Management’s continued sales and promotional efforts, as well as product launches such as Smart Tonic or new exclusive collections, coupled with an increased communication effort and network development (e.g. launch of Champagne store concept). Thegroupcontinues toactivelypursue its Frenchand international expansion through store openings and acquisitions, as well as the development of its discount banners. The valuation of the investment in Alain Afflelou declined by €0.2mduring the 2017 financial year, due to a decline in valuation multiples. 6) How will we crystallise value? Alain Afflelou will be an attractive opportunity for a range of buyers due to its highly recognized brand, its leadership position in optical franchise retail and asset light structure translating into a highly cash-generative business model.

SECTOR

COUNTRY

DATE OF INVESTMENT RESIDUAL COST IN €M

FAIR VALUE IN €M

% OF THE PORTFOLIO AT FAIR VALUE

2012

20.6

26.8

3.0

France

35

• ALTAMIR 2017

REGISTRATION DOCUMENT