European Tax Free Consumption Milan, 20 October 2016

Tax Free Shopping European and APAC Markets Country trends and weights

YTD SEP 16 - EUROPE and APAC

3

Source: Global Blue Data

Tax Free Spending performance

•  After stellar growth supported by strong macro drivers in 2015, relative performance is negative due to a perfect storm across all main drivers (i.e. Biometric visas, China slowdown, terror attacks, FX)

•  UK delivering solid 2 digits growth supported by good mix of macro drivers (FX), long term activities which are supporting Globe shoppers travel journey (i.e. Extend Chinese Visa Validity)

•  APAC (including Japan, Korea and Singapore) is performing +4% in terms of Tax Free Spending Year-to-Date. The growth is supported by a strong increase in number of travelers across all destinations, yet arriving with lower amount of cash to spend

UK (GBP)

Italy

France

Germany

32%

-23%

-21%

-8%

Jan-Sep 16 SIS dev vs PY

Sep 16 SIS dev vs PY Countries

9%

-21%

-21%

-11%

Europe -8% -12%

4

L12M ENDING SEPTEMBER 2016 - EUROPE

Source: Global Blue Market Estimation

Tax Free Shopping Nationalities Top nationalities weight and performance

YTD SEP 16 - WORLDWIDE

6

•  Chinese represent the first nationality both in Europe (28% of total) and in APAC (55% of total). Their trend in Europe has been strongly affected by all negative elements previously mentioned

•  Russians keep on declining for the third year in a row and they are now the 4th nationality with 8% of total market

•  Tax Free Spend of the Middle Eastern is flat in

Europe thanks to GBP favorable exchange rate They are representing nationality n.1 in UK market

Middle East: Kuwait, Qatar, Saudi Arabia, UAE Source: Global Blue Data (Jan – Sep 16)

Nationalities Overview

100% -12% Total

28% -22% China

12% 0% Middle East

8% -19% Russian Fed

6% -2% USA

3% -11% Hong Kong

3% -14% Thailand

3% -12% Switzerland

3% -3% Korea

2% -17% Taiwan

% on Tot Dev vs PY Nationalities

Europe

2% 8% Japan

30% -6% Others

100% 4% Total

55% 6% China

9% -1% Indonesia

4% -10% Taiwan

3% -25% Hong Kong

3% 44% Japan

3% 6% Korea

2% Malaysia

2% -6% Thailand

2% 22% Viet Nam

% on Tot Dev vs PY Nationalities

APAC

2% 6% Philippines

15% 7% Others

-4%

APAC: Japan ,Korea, Singapore.

Key drivers of European Performances

SEP 16 - EUROPE

8

Source: Global Blue Data

Top Line Perfomance

9

% difference in SiS (Euro) vs YA

European performances has been quite negative this year due to a combination of many effects: •  Strong base of 2015 (due to favourable exchange rates

last year) •  Softening of exchange rates •  Biometric Visas •  Safety concerns (terror attack, security issue in France) The elements above led to a decrease in both volumes (n. of transactions) and in capacity of spending (avg spend).

Sales in Store progression

Europe -12%

No. of Tax Free Forms

- 5% - 8%

Av. spend per transaction

- 5%

Europe South - 10%

- 21%

Europe North

- 20%

- 5%

France

+ 6%

- 1 %

- 5%

Europe Central - 19% - 12% - 8%

0%

Unless mentioned differently the data refers to Like for Like geographical comparison (Excluding countries with less than 24 months – Ireland)

YTD SEP 16 - EUROPE Highlights

10

QUARTERLY INDEX - EUROPE Historical development by quarter of Tax Free Spending

Source: Global Blue Data

11

Euro appreciation against key globe shoppers currencies (especially CNY and USD) drove decrease in n. of transactions and average spend.

FX TRENDS

Source: Global Blue Data

USD/Euro:+23%

CNY/Euro:+23%

USD/Euro:-1%

CNY/Euro:-6%

YTD SEP 16 - FOCUS ON CHINESE

12

100%

172%

206% 214%

261% 249%

0%

50%

100%

150%

200%

250%

300%

2011 2012 2013 2014 2015 2016 C

hine

se G

loba

l sho

pper

s S

ales

In S

tore

s (E

uro)

Chinese Sales in Store (Eur) (% progression vs YA)

Over the last four years, Chinese Tax Free Spending grew consistently supported by positive macro-economic drivers including GDP, new air connections and positive FX influences.

+57% CAGR on Chinese Sales In Store over the last four years (ending in 2015). Including 2016, CAGR is back to norm +27%

Chinese globe shoppers as key driver

Source: Global Blue Data

YTD SEP 16 - FOCUS ON CHINESE

13

•  Slow down in local economy and drop in consumer confidence •  Government willingness to strengthen local consumption (positive incentive, checks at customs arrivals) •  Biometric visa and terror attacks as travel restrainer to Europe

Slow down of Chinese demand

Soft € vs ¥

Shanghai stock market

Biometric visa

Terror attacks

Checks at custom

Source: Global Blue Data

YTD SEP 16 – CHINESE GLOBE SHOPPER

14

Official perspective of expected passengers:

2015 | 120 million outbound passengers

2020 | 500 million outbound passengers

•  More and more Chinese globe shoppers feel comfortable travelling by themselves in Europe, experiencing history and entertainment. They are balancing spend preferences between luxury goods and entertainment

•  Tour groups are growing sales bookings based on a large amount of low cost tours focused on travellers originating in tier II & III cities

•  Millennials are becoming more savvy and are looking for brands which they can relate to from an attitude and mindset perspective

Tour Group traveller

60%

Frequent Individual

Traveller (FIT)

40%

Value traveller

(tier II & III) Experiential Millennials

HNWI (High Net

Worth Individuals)

Source: China National Tourism Administration (CNTA)

New globe shopper profiles and expectations

15

•  All categories are suffering due to a decrease of the average spending

•  Last year, Currency volatility and lag in pricing adjustment created a positive trend supporting category growth especially categories with high value transactions

•  Watches & Jewelry, on top of the above, is suffering to its exposure to Chinese consumers who remain concern by checks at arrivals

YTD SEPTEMBER 2016- EUROPE Categories performance

Focus on Countries

17

•  YTD Tax Free Spending in Italy is decreasing 11% vs last year

•  After difficult 4 to 6 months Italy performance is back to single digit decline

•  Chinese, still representing the first nationality, are decreasing more than rest of the market

•  Outlet segment for the first time in its history presents a negative trend (-6% vs last year) but consolidates his weight in the market (16% of total) Source: Global Blue Data (Jan – Sep 16)

Middle East: Kuwait, Qatar, Saudi Arabia, UAE

YTD SEP 16 - ITALY Italian Market Deep Dive

100% -11% Total

28% -23% China

12% -11% Russian Fed

9% -1% USA

6% 1% Middle East

6% 1% Korea

39% -5% Others

% on Tot Dev vs PY Nationalities

Italy - 11% Sales in Store

YTD SEP 16 - FRANCE, GERMANY and UK

18

•  Chinese still the first nationality despite they are suffering in France and Germany •  Chinese average spending is decreasing in most of the European Countries

Source: Global Blue Data (Jan – Sep 16) Middle East: Kuwait, Qatar, Saudi Arabia, UAE

Top 5 Globe shopper Nationality comparison

100% 9% Total

30% 16% Middle East

24% 9% China

5% 28% USA

4% 14% Hong Kong

3% 10% Thailand

34% 1% Others

% on Tot Dev vs PY Nationalities

UK +9% Sales in Store

100% -21% Total

38% -30% China

12% -7% Middle East

9% -28% Russian Fed

7% -9% Switzerland

3% -20% Taiwan

31% -10% Others

% on Tot Dev vs PY Nationalities

Germany - 21% Sales in Store

100% -21% Total

23% -37% China

10% -13% USA

7% -17% Middle East

6% -24% Russian Fed

5% -9% Hong Kong

49% -14% Others

% on Tot Dev vs PY Nationalities

France - 21% Sales in Store

Bain & Company Global Blue Analysis

Focus

20

Source: Global Blue data | *Note: 2016 is October 2015-September 2016, 2015 is October 2014-September 2015, 2014 is October 2013-September 2014, 2013 is October 2012-September 2013, 2012 is October 2011-September 2012

Business Outlook

NEXT 12 MONTHS OUTLOOK Tax Free outlook

Transaction drivers

Average spend drivers

Air arrivals and capacity

Consumer confidence

Legal limitations

Europe

APAC

FX

Traveller mix

GDP

SiS Consensus

Slight Increase

Flat

Flat

Slight Decrease

Flat

Slight Decrease

Increase

Flat

Flat

Flat

Slight Decrease

+2% / +4% +1% / +3%

Slight Decrease

Thank you