Hugo Boss Ag · XETR:BOSS
Hugo Boss — Investor Presentation (October 2020)
28 slides from Hugo Boss's investor presentation, October 2020
Slide 1: Investor Meeting Presentation
1 INVESTOR MEETING PRESENTATION Investor Meeting Presentation August - October 2020
Slide 2: Agenda
2 INVESTOR MEETING PRESENTATION AGENDA 1 Second Quarter Results 2020 2 General Information
Slide 3: Pandemic weighs strongly on Group sales in Q2
3 INVESTOR MEETING PRESENTATION GROUP SALES Q2 2020 EUR 275 MILLION (59) % CURRENCY-ADJUSTED Pandemic weighs strongly on Group sales in Q2
Slide 4: ~50% of global store network closed on average in the second quarter
4 INVESTOR MEETING PRESENTATION ~50% of global store network closed on average in the second quarter 100% ASIA/PACIFIC EUROPE* AMERICAS 75% ALL STORES 50% STORE OPENING RATE 25% April 2020 May 2020 June 2020 0% *INCLUDING MIDDLE EAST AND AFRICA
Slide 5: Business in Europe impacted by store closures and decline in tourism
5 INVESTOR MEETING PRESENTATION EUROPE SALES ** Double-digit sales declines in all key markets (59)% * Revenue declines in Germany less pronounced as stores reopened in early May Long-lasting store closures and significantly lower tourist flows burden sales in France, Italy, and Spain Great Britain
Slide 6: Lockdown and demonstrations weigh on business in the Americas
6 INVESTOR MEETING PRESENTATION AMERICAS SALES All of the region’s key markets affected by temporary store closures in Q2 (82)% * Average store closure rate in the second quarter amounts to 70%, thus exceeding all other regions Unrest and demonstrations in May and June put an additional strain on co
Slide 7: Decline in Asia/Pacific less pronounced than in Europe and the Americas
7 INVESTOR MEETING PRESENTATION ASIA/PACIFIC SALES Mainland China returns to growth in Q2 (36)% * Significantly lower tourist flows weigh on business in Hong Kong and Macao Southeast Asia and Japan affected by high degree of store closures in the second quarter Decline in Asia/Pacific less pronounce
Slide 8: Sales in mainland China return to double-digit growth trajectory
8 INVESTOR MEETING PRESENTATION SALES DEVELOPMENT H1 2020* MAINLAND CHINA +4% Q1 2020 Q2 2020 * Strong improvement in consumer engagement Double-digit sales increase in June marks return to pre-COVID-19 growth rates Online business more than doubles in the second quarter Sales in mainland China retu
Slide 9: Temporary store closures weigh on brick-and-mortar business
9 INVESTOR MEETING PRESENTATION RETAIL (58)%* Currency-adjusted retail comp store sales down 59% in the second quarter Decline in own retail in Asia/Pacific less pronounced due to higher store opening rate Wholesale performance burdened by store closures resulting in significantly (64)%* lower deliv
Slide 10: Momentum in own online business further accelerates in Q2
10 INVESTOR MEETING PRESENTATION ONLINE +74% * Strong double-digit sales improvements across all three regions Q2 marks strongest quarterly performance out of eleven consecutive quarters Millennials represent the fastest-growing customer group online Momentum in own online business further accelerat
Slide 11: Focus on driving the casualization of formalwear
11 INVESTOR MEETING PRESENTATION Focus on driving the casualization of formalwear NEW INTERPRETATION OF FORMALWEAR WITH STRONG FOCUS ON CASUAL TAILORING
Slide 12: Leveraging strength in casualwear to capture consumer behaviour
12 INVESTOR MEETING PRESENTATION Leveraging strength in casualwear to capture consumer behaviour ENABLING CONSUMERS TO DRESS IN A SPORTY STYLE WITHOUT COMPROMISING ON VALUE OR QUALITY
Slide 13: Economic consequences of COVID-19 weigh on EBIT development in Q2
13 INVESTOR MEETING PRESENTATION Economic consequences of COVID-19 weigh on EBIT development in Q2 Gross margin Selling & distribution Administration EBIT* Net income* expenses* expenses EUR EUR EUR EUR 54.6 203 71 (124) (96) % MILLION MILLION MILLION MILLION (1,140) bp (31)% (2)% <(100)% <(100)% YO
Slide 14: Decrease in gross margin mainly attributable to inventory valuation effects
14 INVESTOR MEETING PRESENTATION Decrease in gross margin mainly attributable to inventory valuation effects 66.0% 54.6% Gross Inventory Markdowns Gross margin valuation margin Q2 2019 Q2 2020
Slide 15: Significant cost savings partly offset gross profit decline in Q2
15 INVESTOR MEETING PRESENTATION Significant cost savings partly offset gross profit decline in Q2 Q2 2019 Q2 2020 EBIT GROSS OPERATING EBIT* IMPAIRMENTS EBIT PROFIT EXPENSES EUR 80 million EUR EUR (124) (250) million million * EXCL. NON-CASH IMPAIRMENT CHARGES OF EUR 125 MILLION
Slide 16: Solid balance sheet despite challenging market environment
16 INVESTOR MEETING PRESENTATION Inventories TNWC Free cash Capital flow expenditure June 30, 2020 June 30, 2020 April-June April - June Inventory growth curbed due to reduction in merchandise inflow for upcoming collections and inventory write-downs EUR EUR EUR Increase in trade net working capital
Slide 17: Successful execution of comprehensive measures to protect financial stability
17 INVESTOR MEETING PRESENTATION Successful execution of comprehensive measures to protect financial stability FY MEASURES IMPLEMENTED INITIATIVES DURING Q2 PROGRESS IN Q2 Strict cost management • Significant payroll as well as rental savings achieved 1 Additional cost savings of • Lower marketing s
Slide 18: Strong free cash flow generation in the second quarter
18 INVESTOR MEETING PRESENTATION Strong free cash flow generation in the second quarter FREE CASH FLOW DEVELOPMENT Positive free cash flow of EUR 39 million in Q2 Q1 2020 Free cash flow in H1 2020 amounts to minus EUR 46 million Increase option of existing syndicated loan successfully exercised, now
Slide 19: Agenda
19 INVESTOR MEETING PRESENTATION AGENDA 1 Second Quarter Results 2020 2 General Information
Slide 20: Sales by region and major markets
20 INVESTOR MEETING PRESENTATION Sales by region and major markets Share of Group sales* Europe (incl. Middle Americas Asia/Pacific East/Africa) 63% 19% 15% Germany: 14% U.S.: 14% China: 8% Great Britain: 13% Canada: 3% Oceania: 2% France: 6% Central & South America: 2% Japan: 2% Benelux: 5% Other:
Slide 21: Sales by distribution channel
21 INVESTOR MEETING PRESENTATION Sales by distribution channel 1 RETAIL 0.9 0.8 0.7 57% 60% 62% 63% 63% 65% 0.6 0.5 WHOLESALE 0.4 0.3 41% 38% 0.2 35% 34% 34% 32% 0.1 0 2% 2% 3% 3% 3% 3% LICENSES 2014 2015 2016 2017 2018 2019
Slide 22: Number of Group's own retail stores by region
22 INVESTOR MEETING PRESENTATION Number of Group’s own retail stores by region As of 30/06/2020 Freestanding stores 212 Shop-in-Shops 315 Outlets 73 Europe 600 Freestanding stores 91 Americas Shop-in-Shops 84 224 Asia/Pacific Outlets 49 297 Freestanding stores 129 Group 1,121 Shop-in-Shops 107 Outle
Slide 23: Shareholder return
23 INVESTOR MEETING PRESENTATION Shareholder return Strong commitment to profit-based dividend policy Dividend payout ratio in % of net income, dividend in EUR 6 100% 100% 93% 90% 90% 5 79% 79% 78% 80% 80% 75% 70% 4 3.62 3.62 60%-80% 70% 70% 3.34 60% 60% 3 2.60 2.65 2.70 50% 50% 2 40% 40% 2013 2014
Slide 24: (Adjusted) financial leverage
24 INVESTOR MEETING PRESENTATION (Adjusted) financial leverage * 1.6 1.5 1.5 Net debt / EBITDA 1.4 1.4 Net debt incl. operating leases / EBITDAR 1.3 1.3 1.3 1.2 1.2 1.2 0.8 0.4 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0 0 0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Operating leases = Future committed operat
Slide 25: Sourcing and production structure
25 INVESTOR MEETING PRESENTATION Sourcing and production structure* 40 % ASIA 17 % OWN PRODUCTION 13 % WESTERN EUROPE 6 % NORTH AFRICA 01 % AMERICAS 83 % THIRD PARTY PRODUCTION 40 % EASTERN EUROPE * = as of 2019, in value terms
Slide 26: Multi-Year overview
26 INVESTOR MEETING PRESENTATION Multi-Year overview 2019 2018 2017 2016 2015 Sales 2,884 2,796 2,733 2,693 2,809 Gross profit 1,875 1,824 1,808 1,777 1,853 Gross profit margin in % 65.0 65.2 66.2 66.0 66.0 EBITDA 467 476 499 433 590 EBIT 333 347 341 263 448 EBIT margin in % 11.5 12.4 12.5 9.8 15.9
Slide 27: Financial Calendar & Investor Relations contact
27 INVESTOR MEETING PRESENTATION Financial Calendar & Investor Relations contact Christian Stöhr Head of E-Mail: Christian_Stoehr@hugoboss.com Investor Relations Nov Phone: +49 (0) 7123 94 - 80903 03 Third Quarter 2020 Results 2020 Frank Böhme Senior Investor E-Mail: Frank_Boehme@hugoboss.com Relati
Slide 28: Forward-looking statements contain risks
28 INVESTOR MEETING PRESENTATION Forward-looking statements contain risks This document contains forward-looking statements that reflect management's current views with respect to future events. The words “anticipate”, “assume”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “project”, “s