Annual Review 2012 - Luxottica

MANAGEMENT REPORT
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consequently, will no longer comply with the obligation to make available to the public an
information memorandum in connection with transactions involving significant mergers,
spin-offs, increases in capital through contributions in kind, acquisitions and disposals.
Our future operating results and financial condition may be affected by various factors,
including those set forth below.
8. RISK FACTORS
Risks Relating to Our Industry and General Economic Conditions
a) If current economic conditions deteriorate, demand for our products will be adversely
impacted, access to credit will be reduced and our customers and others with which
we do business will suffer financial hardship, all of which could reduce sales and in turn
adversely impact our business, results of operations, financial condition and cash flows
Our operations and performance depend significantly on worldwide economic
conditions. Uncertainty about global economic conditions poses a risk to our business
because consumers and businesses may postpone spending in response to tighter
credit markets, unemployment, negative financial news and/or declines in income or
asset values, which could have a material adverse effect on demand for our products
and services. Discretionary spending is affected by many factors, including general
business conditions, inflation, interest rates, consumer debt levels, unemployment rates,
availability of consumer credit, conditions in the real estate and mortgage markets,
currency exchange rates and other matters that influence consumer confidence. Many
of these factors are outside our control. Purchases of discretionary items could decline
during periods in which disposable income is lower or prices have increased in response
to rising costs or in periods of actual or perceived unfavorable economic conditions. If
this occurs or if unfavorable economic conditions continue to challenge the consumer
environment, our business, results of operations, financial condition and cash flows
could be materially adversely affected.
In the event of renewed financial turmoil affecting the banking system and financial
markets, additional consolidation of the financial services industry or significant failure of
financial services institutions, there could be a new or incremental tightening of the credit
markets, decreased liquidity and extreme volatility in fixed income, credit, currency and
equity markets. In addition, the credit crisis could continue to have material adverse effects
on our business, including the inability of customers of our wholesale distribution business
to obtain credit to finance purchases of our products, restructurings, bankruptcies,
liquidations and other unfavorable events for our consumers, customers, vendors,
suppliers, logistics providers, other service providers and the financial institutions that are
counterparties to our credit facilities and other derivative transactions. The likelihood that
such third parties will be unable to overcome such unfavorable financial difficulties may
increase. If the third parties on which we rely for goods and services or our wholesale
customers are unable to overcome financial difficulties resulting from the deterioration
of worldwide economic conditions or if the counterparties to our credit facilities or our
derivative transactions do not perform their obligations as intended, our business, results
of operations, financial condition and cash flows could be materially adversely affected.