Hugo Boss AG · XETR:BOSS
Hugo Boss — FY2021 Earnings Presentation
81 slides from Hugo Boss's earnings presentation, Mar 10, 2022
Slide 1: Full Year 2021 Results
FULL YEAR RESULTS HUGO BOSS
Slide 2: Agenda
AGENDA 01 UPDATE ON CLAIM 5 02 FY 2021 RESULTS & OUTLOOK 2022 03 WRAP-UP 04 Q&A
Slide 3: We Support
WE>” SUPPORT
Slide 4: Group sales return to pre-pandemic levels
I GROUP SALES RETURN TO PRE-PANDEMIC LEVELS +43% 2.8 SALES EUR BILLION GROWTH GROUP SALES IN FY 2021 IN FY 2021
Slide 5: Significant increase in EBIT
I SIGNIFICANT INCREASE IN EBIT YEAR GUIDANCE 228 EUR MILLION EBIT
Slide 6: Strongest free cash flow in history
I STRONGEST FREE CASH FLOW HISTORY 559 EUR MILLION FREE CASH FLOW
Slide 7: Update on Claim 5
I UPDATE ON CLAIM 5 EXECUTION IN FULL SWING
Slide 8: Vision, mission and ambition
BECOME THE WE LOVE BECOME PREMIUM FASHION, ONE TECH-DRIVEN WE CHANGE OF THE FASHION FASHION TOP 100 PLATFORM GLOBAL WORLDWIDE BRANDS I I I VISION MISSION AMBITION
Slide 9: Claim 5 strategy
I CLAIM 5 STRATEGY WHY CONSUMER FIRST 1 2 3 4 5 WHAT BOOST PRODUCT LEAD IN REBALANCE ORGANIZE BRANDS IS KING DIGITAL OMNICHANNEL FOR GROWTH SUSTAINABLE THROUGHOUT HOW RIGOROUS EXECUTION EMPOWER PEOPLE AND TEAMS
Slide 10: Consumer First
I CONSUMER FIRST Turning consumers into fans
Slide 11: Boost Brands
I BOOST BRANDS CLAIM 1
Slide 12: Brand portfolio strategy
I BRAND PORTFOLIO STRATEGY One HUGO BOSS platform with currently two brands
Slide 13: BOSS
BOSS
Slide 14: Be your own BOSS
I BE YOUR OWN BOSS Launch of star-studded BOSS campaign as part of branding refresh
Slide 15: The BOSS Squad
THE BOSS SQUAD ANTHONY JOSHUA FUTURE HENDRIX LEE MIN-HO HAILEY BIEBER KENDALL JENNER 14M FOLLOWERS 19M FOLLOWERS 29M FOLLOWERS 42M FOLLOWERS 222M FOLLOWERS 28M WEIBO AN ALL-STAR CAST JOAN SMALLS KHABY LAME ALICA SCHMIDT MATTEO BERRETTINI 5M FOLLOWERS 72M FOLLOWERS 3M FOLLOWERS 1M FOLLOWERS
Slide 16: #BeYourOwnBOSS
#BeYourOwnBOSS +7 PP Engagement on BOSS Instagram
Slide 17: Excitement goes way beyond digital
I EXCITEMENT GOES WAY BEYOND DIGITAL
Slide 18: See Now, Buy Now event
I SEE NOW, BUY NOW EVENT BOSS hosts spectacular See Now, Buy Now event in Dubai desert >30 MILLION VIEWS Fashion show on YouTube
Slide 19: Slide 19
Slide 20: How do you HUGO
I HOW DO YOU HUGO Launch of star-studded HUGO campaign as part of branding refresh
Slide 21: The HUGO Squad
MADDIE ZIEGLER DANCER THE HUGO SQUAD BIG MATTHEW SAINt JHN ADUT AKECH RAPPER RAPPER TOP MODEL YOUNG STARS ON THE RISE
Slide 22: How do you HUGO
I HOW DO YOU HUGO The Dance Hashtag Challenge on TikTok +63 % Follower on HUGO TikTok
Slide 23: Branding refresh leads to record-breaking results
I BRANDING REFRESH LEADS TO RECORD- ~15 BN ~800 M BREAKING RESULTS Impressions Engagements within 5 weeks within 5 weeks
Slide 24: Product is King
I PRODUCT IS KING CLAIM 2
Slide 25: 24/7 lifestyle brand
I 24/7 LIFESTYLE BRAND DESK DINNER WEEKEND TRAVEL ATHLEISURE 24/7 lifestyle fully incorporated in Spring/Summer 2022 casualization and comfort are key
Slide 26: New design codes introduced in Spring/Summer 2022
I NEW DESIGN CODES INTRODUCED IN SPRING/ SUMMER 2022 New logo BOSS monogram Iconic color palette
Slide 27: First touchpoint for younger consumers
I FIRST TOUCHPOINT FOR YOUNGER CONSUMERS
Slide 28: New HUGO branding incorporated
I NEW HUGO BRANDING New logo INCORPORATED Iconic colors IN SPRING/ SUMMER 2022 HUGO monogram
Slide 29: Strong growth opportunities
I STRONG GROWTH Denim OPPORTUNITIES Streetwear Contemporary
Slide 30: Exciting collaborations
EXCITING COLLABORATIONS A BOSS TEAMS UP WITH OTHER BOSSES. FUTURE FEAT. PORSCHE X BOSS BOSS LEGENDS COLLABS KICKING OFF WITH MUHAMMAD ALI
Slide 31: Exciting collaborations
EXCITING COLLABORATIONS HUGO REPLAY
Slide 32: Lead in Digital
I LEAD IN DIGITAL CLAIM 3
Slide 33: Digital Campus successfully established in 2021
I DIGITAL CAMPUS SUCCESSFULLY ESTABLISHED IN 2021 Elevate Strengthen Leverage customer digital data and experience know-how analytics PORTO PORTO PORTO PORTO PORTO PORTO PORTO
Slide 34: Relaunch of hugoboss.com
I RELAUNCH OF HUGOBOSS.COM STRENGTHENING OUR PERSONALIZATION E-COM ACTIVITIES LOCALIZATION Engaging experience with new look & feel APP Improved usability and customer interaction WEBSITE REFRESH SITE PERFORMANCE PERFORMANCE MARKETING EXPANSION
Slide 35: Relaunch of hugoboss.com improves major KPIs
I RELAUNCH OF HUGOBOSS.COM IMPROVEMENT IN MAJOR KPIS TRAFFIC AOV PRICE REDUCTIONS
Slide 36: Digital Showroom 2.0
I DIGITAL SHOWROOM 2.0 USHERING IN A INTERACTIVE NEW ERA IN FUNCTIONS DIGITAL SELLING INNOVATIVE SELLING PROCESS IMPULSIVE BRAND EXPERIENCE
Slide 37: Rebalance Omnichannel
I REBALANCE OMNICHANNEL CLAIM 4
Slide 38: Leveraging distribution variety
I LEVERAGING ONLINE DISTRIBUTION VARIETY RETAIL is key for customer centricity WHOLESALE
Slide 39: Total digital sales reach 20% for the first time
I TOTAL DIGITAL SALES REACH 20% FOR THE FIRST TIME IN HISTORY 25- 30 % 20 Ambition % 10 %
Slide 40: Bringing the retail experience to the next level
I BRINGING THE RETAIL EXPERIENCE TO THE NEXT LEVEL NEW LOOK SALES & FEEL PRODUCTIVITY Bringing the branding refresh to life across all regions Improvement by +3% per year
Slide 41: Roll-out of new retail store concept
I ROLL-OUT OF NEW RETAIL STORE CONCEPT IN FULL SWING Hyundai Coex Lotte Main Yifang City Westfield Centro Mall of Emirates SEOUL SEOUL SHENZHEN OBERHAUSEN DUBAI
Slide 42: Elevate store experience
>100 STORES TO BE I REFRESHED ELEVATE IN 2022 STORE EXPERIENCE
Slide 43: Reclaim wholesale: new look and feel
I RECLAIM WHOLESALE NEW KEY DRIVE LOOK PART- RELEVANCE & FEEL NERS & VISIBILITY FOR OUR Introduce branding refresh at our Strengthen relationship BRANDS wholesale POS with key partners &
Slide 44: Branding refresh resonates with wholesale partners
I BRANDING REFRESH RESONATES STRONGLY WITH OUR WHOLESALE PARTNERS +40% ORDER INTAKE FALL/WINTER 2022 (VS. 2019)
Slide 45: Organize for Growth
I ORGANIZE FOR GROWTH CLAIM 5
Slide 46: A challenging year for supply chains
I A CHALLENGING YEAR FOR SUPPLY CHAINS FOCUS AREAS RESILIENCE FLEXIBILITY SPEED
Slide 47: Resilient supply chain secures product availability
I RESILIENT SUPPLY CHAIN SECURES SUFFICIENT PRODUCT AVAILABILITY WELL-BALANCED OWN PRODUCTION LONG-TERM STRATEGIC GLOBAL SOURCING MIX FACILITIES PARTNERSHIPS 49% 17% ~10 Y EUROPE OWN PRODUCTION STRATEGIC FINISHED Share of total Share of total GOODS SUPPLIERS sourcing volume sourcing volume Average d
Slide 48: Sustainable Throughout
I SUSTAINABLE THROUGHOUT
Slide 49: Sustainability achievement
I SUSTAINABILITY ACHIEVEMENT DOW JONES SUSTAINABILITY INDEX (DJSI) 5TH TIME IN A ROW 2ND BEST SCORE in the textile, apparel, and luxury segments WORLD
Slide 50: Sustainability ambition
I SUSTAINABILITY AMBITION CLIMATE-NEUTRALITY RESPONSIBLE CIRCULAR STYLES PRODUCTS 2030 Own area of responsibility 60% 80% 2045 BY 2025 BY 2030 Entire value chain
Slide 51: Strategic partnership with HeiQ AeoniQ
I STRATEGIC PARTNERSHIP WITH HEIQ AEONIQ Replace polyester Reduce waste and Bind carbon from through cellulosic push circularity the atmosphere yarn WE LOVE FASHION, WE CHANGE FASHION
Slide 52: Strong people and organizational set-up
I STRONG PEOPLE ORGANIZATIONAL SET-UP EMPOWERING PEOPLE AND TEAMS TEAMS
Slide 53: Full Year 2021 Results
HUGO BOSS FULL YEAR 2021 RESULTS
Slide 54: 2021 results exceed guidance
I 2021 RESULTS EXCEED GUIDANCE 2,786 228 EUR MILLION GROUP SALES +43% (1)% EUR MILLION EBIT VS VS FY 2020* FY 2019* * CURRENCY-ADJUSTED
Slide 55: Top line with strong acceleration in 2021
I TOP LINE WITH STRONG ACCELERATION IN 2021 Strong business recovery supported by noticeable pick-up in consumer sentiment post lockdowns +12% +7% Successful strategy execution accelerates business performance in H2 (4)% Strong growth across all brands, regions, (23)% and channels Q1 Q2 Q3 Q4 * CURR
Slide 56: Sales by brand and gender
MENSWEAR WOMENSWEAR +42% +46% +45% VS. FY 2020* VS. FY 2020* VS. FY 2020* * CURRENCY-ADJUSTED (2)% (6)% +6% VS. FY 2019* VS. FY 2019* VS. FY 2019*
Slide 57: Americas sales
I Particularly strong business AMERICAS performance in the Americas Successful turnaround in important SALES U.S. market implemented Strengthening of product offering at the point of sale +78% +4% VS. FY 2020* VS. FY 2019* * CURRENCY-ADJUSTED
Slide 58: Europe sales
I Significant pickup in local EUROPE demand post lockdowns All key markets including the UK, SALES Germany, and France contribute to strong growth Growth markets incl. the UAE enjoy particularly strong momentum (Incl. Middle East and Africa) +41% (2)% VS. FY 2020* VS. FY 2019* * CURRENCY-ADJUSTED
Slide 59: Asia/Pacific sales
I Business recovery in Asia/Pacific ASIA/ accelerates throughout the year Robust local demand fuels growth in PACIFIC China amid renewed COVID-related restrictions SALES Temporary store closures and lower tourism flows weigh on business in various markets +22% (3)% VS. FY 2020* VS. FY 2019* * CURREN
Slide 60: Digital
I DIGITAL Digital share reaches 20% for the first time Broad-based double-digit growth across all channels and regions +55% +85% VS. FY 2020* VS. FY 2019* * CURRENCY-ADJUSTED
Slide 61: Brick-and-mortar retail
I BRICK-AND- MORTAR RETAIL Return to double-digit growth vs. 2019 in the second half of the year Robust local demand particularly in Europe and the Americas +43% (9)% VS. FY 2020* VS. FY 2019* * CURRENCY-ADJUSTED
Slide 62: Brick-and-mortar wholesale
I BRICK-AND- MORTAR WHOLESALE Strong demand of partners for BOSS and HUGO collections Successful strategy execution provides further tailwind +37% (16)% VS. FY 2020* VS. FY 2019* * CURRENCY-ADJUSTED
Slide 63: Gross margin improves to 61.8%
I GROSS MARGIN IMPROVES TO 61.8% Inventory Sourcing & Channel FY 2020 valuation FX freight cost mix FY 2021 61.0% 61.8%
Slide 64: Step-up in brand and digital investments in 2021
I STEP-UP IN BRAND AND DIGITAL INVESTMENTS IN 2021 +29% +33% MARKETING DIGITAL INVESTMENTS INVESTMENTS VS. FY 2020 VS. FY 2020
Slide 65: EBIT grows strongly to EUR 228 million
I EBIT GROWS STRONGLY TO EUR 228 MILLION in EUR million FY 2021 VS. FY 2020 VS. FY 2019 Group sales 2,786 +43% (3)% Gross profit 1,721 +45% (8)% Gross margin 61.8% +80 bp (330) bps Operating expenses 1,493 +5% (2)% In % of sales 53.6% (1,950) bp +50 bp Selling & distribution expenses 1,191 +5% (4)%
Slide 66: Strong improvements in TNWC
I STRONG IMPROVEMENTS TNWC in % of sales IN TNWC 35% 28.7% 30% TNWC decreases 31%* to EUR 376 million in 2021 25% 7%* decline in inventory reflects accelerating sales momentum 20% Increase in trade payables due to higher utilization of supplier financing program 15% 17.2% 10% * CURRENCY-ADJUSTED Q4/
Slide 67: Capital expenditure still below pre-pandemic levels
I FY 2021 CAPEX CAPITAL EXPENDITURE STILL BELOW PRE-PANDEMIC LEVELS 104 EUR MILLION Restrained investment activity in 2021 Global rollout of new store concepts from Q4 2021 onwards Focus of investment activity on own +30% retail store network and digitalization
Slide 68: Free cash flow and net financial position hit record levels
I FY 2021 FREE CASH DEC 31, 2021 NET FINANCIAL FREE CASH FLOW POSITION* FLOW AND NET FINANCIAL POSITION HIT 559 EUR MILLION 167 EUR MILLION RECORD LEVELS x3 FREE >100% >100% CASH FLOW *EXCL. IFRS 16.
Slide 69: HUGO BOSS to resume dividend payments
I HUGO BOSS TO RESUME DIVIDEND PAYMENTS 60% 50% 35% 30 % 40% PAYOUT RATIO 30% 0.04 0.04 0.70 EUR EUR EUR 20% 2019 2020 2021* 2022e 2023e 2024e 2025e *DIVIDEND PROPOSAL
Slide 70: Outlook 2022
I OUTLOOK 2022
Slide 71: HUGO BOSS temporarily suspends own retail business operations in Russia
I HUGO BOSS TEMPORARILY SUSPENDS OWN RETAIL BUSINESS OPERATIONS IN RUSSIA
Slide 72: Primary focus in 2022
I PRIMARY FOCUS IN 2022 Consistent execution of Investments in product, marketing, and digital stage among all initiatives expertise to drive brand relevance
Slide 73: Sales outlook
SALES OUTLOOK +10% TO +15% Sales to reach new record levels in 2022 3.1 TO 3.2 All brands, channels, and regions EUR BILLION expected to contribute to growth 2.8 EUR BILLION 2021 2022e
Slide 74: EBIT outlook
EBIT OUTLOOK +10% TO +25% Bottom-line growth to be driven by strong top-line improvements 250 TO 285 Efficiency gains expected EUR MILLION to partly offset planned investments 228 EUR MILLION 2021 2022e
Slide 75: Wrap-up
I WRAP-UP
Slide 76: HUGO BOSS achieves strong comeback in 2021
I HUGO BOSS ACHIEVES STRONG COMEBACK IN 2021 2021 STRONG TOP- AND EXCELLENT SUCCESSFUL BOTTOM-LINE FINANCIAL EXECUTION OF IMPROVEMENTS POSITION CLAIM 5
Slide 77: 2022 to be another successful year for HUGO BOSS
I 2022 TO BE ANOTHER SUCCESSFUL YEAR FOR HUGO BOSS 2022 INVESTMENTS BRANDING NEW TO INCREASE REFRESH DRIVES COLLECTIONS BRAND MOMENTUM RESONATE WELL RELEVANCE
Slide 78: Ambition: one of the top global brands
I BECOME AMBITION ONE OF THE TOP 100 GLOBAL BRANDS 4 12 EUR BILLION EBIT IN SALES % MARGIN BY 2025 BY 2025
Slide 79: Vision
I BECOME THE VISION PREMIUM TECH-DRIVEN FASHION PLATFORM WORLDWIDE
Slide 80: Future
FUTURE FUTURE FUTURE FUTURE
Slide 81: Q&A session
Q&A SESSION HUGO BOSS