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HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 2 / 34
ANNUAL SHAREHOLDERS’ MEETING 2014 Claus-Dietrich Lahrs (CEO) Stuttgart, May 13, 2014
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 3 / 34
2013 a year of good strategic and financial progress
565528470
354269
+4%*
2,432
1,729
2,346
2012 2011
2,059
2010
+7%
2013 2009
1,562
EBITDA before special items
Sales Sales and EBITDA before special items (in EUR million)
*+6% fx-adjusted.
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 4 / 34
Retail continues to drive Group sales increases
4
2
6
6
4
6
7
10 5 0 (5)
Europe*
Group
Asia/Pacific (2)
Americas
fx-adjusted
in EUR Sales growth by region, y-o-y FY 2013
(in %)
*Incl. Middle East and Africa.
6
4
2
14
2
18
20 15 10 5 0 (5) (10)
Royalties
Wholesale (6)
(7)
Retail
Group
fx-adjusted
in EUR Sales growth by channel, y-o-y FY 2013
(in %)
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 5 / 34
Gross profit margin increase supports operating margin expansion
Sales
2,432 EUR million +4%*
Gross profit margin
64.9 %
+330
bp
Operating margin (adjusted)
23.2 %
*+6% fx-adjusted.
Net income
333 EUR million +7%
+70
bp
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 6 / 34
Further improvement of balance sheet metrics despite higher investments
■ Own retail expansion
and infrastructure
projects drive increase
Investments (in EUR million)
■ FCF generation and
deconsolidation effects
lead to reduction
Net debt (in EUR million)
185
166
+12%
2013 2012
57
130
(56)%
Dec. 31, 2013 Dec. 31, 2012
■ Increase due to profit
growth and working
capital discipline
230221
+4%
2013 2012
Free cash flow (in EUR million)
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 7 / 34
Dividend to grow in line with consolidated net income
*As a percentage of net income attributable to the shareholders of the parent company. // **2013: Dividend proposal.
Proposal in line with dividend policy of 60% to 80% payout of consolidated net profit
0
10
20
30
40
50
60
70
80
903.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2012
3.12
70%
2011
2.88
70%
2010
2.02
75%
2009
0.96
64%
70%
3.34
2013**
Dividend and payout ratio
in EUR in %*
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 8 / 34
Strong performance of HUGO BOSS share
Share price development: December 31, 2012 – December 31, 2013 (Index: December 31, 2012 = 100)
90
100
110
120
130
140
Dec-13 Nov-13 Oct-13 Sep-13 Aug-13 Jul-13 Jun-13 May-13 Apr-13 Mar-13 Feb-13 Jan-13
MDAX
DAX
HUGO BOSS
MSCI World Textiles
+30%
+25%
+39%
+25%
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 9 / 34
Brand portfolio streamlined and sharpened
fashion
statement casual
urban chic
modern
sophisticated
progressive
contemporary
modern
active
market
segment
luxury
premium
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 10 / 34
Retail store universe upgraded and expanded
25
16
15
13
11
2013 2012 2011 2010 2009 BOSS Store, Central Building,
Hong Kong
Number of flagship stores
BOSS Store, Königstrasse,
Stuttgart
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 11 / 34
Extended brand control in department stores
Saks 5th Avenue, New York Selfridges, London
Printemps, Paris
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 12 / 34
Shop-in-shop takeovers main driver of considerable store count increase
Number of own retail stores as of December 31, 2013 (December 31, 2012: 840)
*Incl. Middle East and Africa.
TOTAL 1,010 (+170) Openings: 206
thereof takeovers: 115
Closings: 36 EUROPE* 576 (+107)
Openings: 118 thereof takeovers: 68
Closings: 11
ASIA/PACIFIC 234 (+10)
Openings: 31 thereof takeovers: 5
Closings: 21
AMERICAS 200 (+53) Openings: 57
thereof takeovers: 42
Closings: 4
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 13 / 34
Faster than expected business model transformation
Sales by distribution channel
Wholesale
Retail
Royalties
2009
3%
33%
64%
2011
2%
45%
53%
2012
2%
49%
49%
2013
44%
2%
54%
2010
3%
40%
57%
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 14 / 34
Main elements of 2010 growth agenda implemented
BRAND PORTFOLIO
OWN RETAIL
OPERATIONAL PROCESSES
GLOBAL GROWTH
Brand portfolio streamlined and sharpened
Own retail network upgraded and expanded
Further process improvements sustain competitive advantage
Regional exposure more balanced
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 15 / 34
New initiatives and areas of growth enhance successful growth strategy
IMPROVING
OPERATIONAL PROCESSES
MAXIMIZING
BRAND ATTRACTIVENESS
LEVERAGING
GLOBAL GROWTH POTENTIAL
GROWING THE
GROUP’S OWN RETAIL BUSINESS
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 16 / 34
Emotional strength of the HUGO BOSS brand creates close consumer ties
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 17 / 34
Jason Wu has established a clear signature at BOSS Womenswear
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 18 / 34
BOSS Womenswear makes impressive debut at New York Fashion Week
BOSS Womenswear Fashion Show, New York
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 19 / 34
Womenswear visibility increasing at wholesale and in own retail
BOSS womenswear shop, Printemps Haussmann, Paris
BOSS womenswear shop, Matsuya Ginza, Tokyo
BOSS womenswear floor, Columbus Circle, New York
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 20 / 34
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 21 / 34
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 22 / 34
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 23 / 34
Expansion and productivity improvements to drive future retail growth
Stores Europe* 2009: 219
2013: 576
+ 357
Stores Americas 2009: 108
2013: 200
+92
Stores Asia/Pacific 2009: 111
2013: 234
+123
■ Successful exploitation of white space
opportunities
■ Around 50 new store openings expected
in 2014
■ Focus on sales productivity improvements
*Incl. Middle East and Africa.
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 24 / 34
Improving frontline execution
■ Superior service levels in line with brand
proposition
■ Focus on ensuring high standards globally
■ Strong emphasis on customer feedback and
constant evaluation
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 25 / 34
Omnichannel main strategic focus in coming years
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 26 / 34
Rollout of myhugoboss.com started
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 27 / 34
Further operational process improvements offer significant long-term potential
■ Retail merchandise planning tool provides
integrated view of sales and inventories
■ Positive impact on full-price sell-throughs
■ Rollout in phases until end of 2015
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 28 / 34
Migration to new distribution center according to plan
■ Migration under way and to be completed by
the end of June
■ Shorter time to market
■ Efficiency gains through comprehensive
automation and close upstream integration
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 29 / 34
HUGO BOSS expects to grow in all regions
■ Improving sentiment among customers and retail
partners in Europe
■ Positive outlook for the Americas despite
weak start to the year
■ Important investments in retail presence and brand
perception support growth in China and Asia
Sales
613 EUR million
Gross profit margin
65.4 %
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 30 / 34
Robust own retail sales growth in the first quarter of 2014
+3%*
+360
bp
EBITDA (before special items)
131 EUR million
(1)%
Own retail
323 EUR million +19%*
*+6% fx-adjusted. *Same store sales growth: +6%,
both currency-adjusted.
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 31 / 34
Positive outlook for 2014
Growth of EBITDA before special items 10% to 12%
2014 Outlook
Sales growth (currency-adjusted) High single-digit
Capex EUR 110 million - EUR 130 million
Own retail network Around 50 organic openings
Growth of EBITDA before special items High single-digit
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 32 / 34
Building the business for long-term sustainable growth
■ 2013 a year of solid financial performance
and good strategic progress
■ Clear plan in place to accelerate growth
in 2014
■ Long-term focus areas defined
■ Brand elevation and emotionalization
■ Omnichannel
■ Retail excellence
HUGO BOSS Annual Shareholders' Meeting HUGO BOSS © May 13, 2014 33 / 34
Thank you very much for your attention.