Hugo Boss AG · XETR:BOSS
Hugo Boss — Shareholder Meeting (May 2022)
77 slides from Hugo Boss's shareholder meeting presentation, May 24, 2022
Slide 1: Annual Shareholders' Meeting
ANNUAL SHAREHOLDERS’ MEETING May 24 “ Y,) fe] a eo] oO =) =
Slide 2: Daniel Grieder, Chief Executive Officer
I DANIEL GRIEDER CHIEF EXECUTIVE OFFICER
Slide 3: Thank You
THANK YOU
Slide 4: Agenda
I AGENDA BUSINESS OUTLOOK STRATEGY PERFORMANCE 2022 2021
Slide 5: We Support
WE>” SUPPORT
Slide 6: Pioneers in Fashion
1924 1950 1970 1984 1993 Foundation First men's Establish- Entry into Motorsport suit ment of licensing BOSS business 1993 2000 2008 2017 2021 Establish- Launch of Launch of Inclusion in ment of BOSS hugoboss. DJSI WORLD strategy HUGO Women com PIONEERS IN FASHION I
Slide 7: Strong Assets
High global Premium Diversified Strong brand lifestyle business distribution awareness positioning model network Healthy Motivated In-house Focus on financial team production sustainability position STRONG ASSETS I
Slide 8: Yet, Is HUGO BOSS Unlocking Its Full Potential?
I YET, IS HUGO BOSS UNLOCKING ITS FULL POTENTIAL?
Slide 9: Mission and Vision
I MISSION WE LOVE FASHION, WE CHANGE FASHION BECOME THE PREMIUM TECH-DRIVEN FASHION PLATFORM WORLDWIDE VISION I
Slide 10: Ambition 2025
I AMBITION BECOME ONE OF THE TOP 100 GLOBAL FINANCIAL BRANDS AMBITION 2025 4 GROUP SALES 12% EBIT MARGIN
Slide 11: Broad-based growth until 2025 across all brands, regions, and channels
I BROAD-BASED GROWTH UNTIL 2025 ACROSS ALL BRANDS, REGIONS, AND CHANNELS *IN EUR BILLION BRANDS* REGIONS* CHANNELS* ~2.2 ~2.0 ~2.6 ~1.5 ~1.2 ~1.1 >0.8 ~1.0 ~0.4 ~0.3 ~0.5 ~0.1 ~0.8 ~0.8 >1.0 ~0.3 ~0.3 ~0.4 2020 2025 2020 2025 2020 2025 BOSS Menswear Europe Brick-and-mortar retail BOSS Womenswear Asi
Slide 12: Consumer First
I WHY CONSUMER FIRST 1 2 3 4 5 WHAT REBALANCE ORGANIZE BOOST PRODUCT LEAD IN OMNI- FOR BRANDS IS KING DIGITAL CHANNEL GROWTH SUSTAINABLE THROUGHOUT HOW RIGOROUS EXECUTION EMPOWER PEOPLE AND TEAMS
Slide 13: Customer centricity is key to win fans for our brands
I CUSTOMER CENTRICITY IS KEY TO WIN FANS FOR OUR BRANDS CONSUMER ALWAYS VERY FIRST WE AIM FOR FANS, NOT JUST CONSUMERS
Slide 14: Boost Brands
I BOOST BRANDS CLAIM 1
Slide 15: Brand Portfolio Strategy
I BRAND PORTFOLIO STRATEGY One HUGO BOSS platform, currently consisting of two strong brands
Slide 16: Slide 16
Slide 17: Be Your Own
BE YOUR OWN
Slide 18: Be Your Own BOSS
I BE YOUR OWN BOSS Launch of star-studded BOSS campaign as part of branding refresh
Slide 19: The BOSS Crew
I THE BOSS CREW ANTHONY JOSHUA FUTURE HENDRIX HAILEY BIEBER JOAN SMALLS KHABY LAME MATTEO BERRETTINI LEE MIN-HO ALICA SCHMIDT KENDALL JENNER
Slide 20: Strong Global Presence
STRONG GLOBAL PRESENCE I EXCITEMENT GOES WAY BEYOND SOCIAL MEDIA
Slide 21: How Do You HUGO
I HOW DO YOU HUGO Launch of star-studded HUGO campaign as part of branding refresh
Slide 22: The HUGO Crew
I THE HUGO CREW BIG MATTHEW MADDIE ZIEGLER SAINT JHN ADUT AKECH RAPPER DANCER RAPPER TOP MODEL
Slide 23: Branding refresh leads to record-breaking results on social media
I BRANDING REFRESH LEADS TO RECORD-BREAKING RESULTS ON SOCIAL MEDIA ~24 BN ~1 BN Impressions within 3 months Social engagements within 3 months
Slide 24: Product Is King
I PRODUCT IS KING CLAIM 2
Slide 25: Establish BOSS as a 24/7 Lifestyle Brand
I ESTABLISH BOSS AS A 24/7 LIFESTYLE BRAND First-class price-value-proposition and high level of innovation and sustainability OFFICE DINNER WEEKEND TRAVEL SPORT
Slide 26: Suit as part of a modern, innovative lifestyle
I SUIT AS PART OF A MODERN, INNOVATIVE LIFESTYLE
Slide 27: New branding incorporated for Spring/Summer 2022
I New logo NEW BRANDING BOSS monogram INCORPORATED Iconic color palette FOR SPRING/SUMMER 2022
Slide 28: HUGO style to self-express 24/7
I HUGO STYLE TO SELF-EXPRESS 24/7 First point of contact for younger consumers with focus on Generation Z OFFICE CELEBRATE LEISURE DISCOVER SPORT
Slide 29: New HUGO branding incorporated for Spring/Summer 2022
I New logo NEW HUGO BRANDING Iconic colors INCORPORATED FOR HUGO monogram SPRING/ SUMMER 2022
Slide 30: Lead in Digital
I LEAD IN DIGITAL CLAIM 3
Slide 31: Digitalization along the entire value chain
Trend Digital collection 3D material Product Focus on Digital detection development library optimization digital media showroom DEMAND DESIGN DEVELOPMENT PRODUCTION & MARKETING SALES LOGISTICS ORGANIZATION DIGITALIZATION ALONG THE ENTIRE VALUE CHAIN I
Slide 32: Digital Campus newly established
I DIGITAL CAMPUS NEWLY ESTABLISHED Taking customer experience to a new level through the targeted use of data Cross-functional digital initiatives in the areas of e-commerce, technology, and data METZINGEN PORTO
Slide 33: Relaunch of hugoboss.com to strengthen e-commerce activities
I RELAUNCH OF HUGOBOSS.COM TO STRENGTHEN E-COMMERCE ACTIVITIES New look & feel First-class e-com experience Clear mobile-first approach
Slide 34: Rebalance Omnichannel
I REBALANCE OMNICHANNEL CLAIM 4
Slide 35: We move to where consumers expect us to be
I WE MOVE TO WHERE CONSUMERS EXPECT US TO BE RETAIL WHOLESALE META- ONLINE VERSE
Slide 36: Exploiting the potential across all digital formats
I EXPLOITING THE POTENTIAL ACROSS ALL DIGITAL FORMATS 25- Digital share of Group sales 30% 20% AMBITION 10%
Slide 37: Bringing retail experience to the next level
I BRINGING RETAIL EXPERIENCE TO THE NEXT LEVEL NEW SALES LOOK & FEEL PRODUCTIVITY Bringing the branding refresh Improvement by +3% to life in stores per year targeted
Slide 38: Roll-out of new store concept in full swing
Lotte Main Westfield Centro Mall of Emirates SEOUL OBERHAUSEN DUBAI >100 STORES TO BE REFRESHED IN 2022 ROLL-OUT OF NEW STORE CONCEPT IN FULL SWING I
Slide 39: New look & feel in wholesale
NEW KEY >40% LOOK & PARTNERS Wholesale sales share FEEL . with top 20 customers Implement branding Strengthen refresh in wholesale relationship with key partners DRIVE RELEVANCE AND VISIBILITY FOR OUR BRANDS IN WHOLESALE I
Slide 40: Organize for Growth
I ORGANIZE FOR GROWTH CLAIM 5
Slide 41: Increasing efficiency and flexibility along the value chain
I INCREASING EFFICIENCY AND FLEXIBILITY ALONG THE VALUE CHAIN MODULAR & DIGITAL SHORTER PRODUCT CREATION CREATION TRACKS >90% ~30% Digitally developed Reduction of products by 2025 lead times by 2025
Slide 42: Strengthening in-house production & relocation to Europe
I STRENGTHENING IN-HOUSE PRODUCTION & RELOCATION TO EUROPE Greater independence from external factors Faster reaction to changing customer demand and trends Risk minimization with regard to capacity bottlenecks
Slide 43: Consumer First
I WHY CONSUMER FIRST 1 2 3 4 5 WHAT REBALANCE ORGANIZE BOOST PRODUCT LEAD IN OMNI- FOR BRANDS IS KING DIGITAL CHANNEL GROWTH SUSTAINABLE THROUGHOUT HOW RIGOROUS EXECUTION EMPOWER PEOPLE AND TEAMS
Slide 44: Strong commitment to sustainability
I DELIVER MEASURABLE STRONG IMPACT COMMITMENT TO SUSTAINABILITY ENTHUSE CONSUMERS
Slide 45: Sustainability Achievement
I SUSTAINABILITY ACHIEVEMENT Dow Jones Sustainability Index (DJSI) 5 TH TIME IN A ROW 2 BEST SCORE IN THE TEXTILE, APPAREL, AND ND LUXURY SEGMENTS
Slide 46: No Planet No Fashion
I FOR A SUSTAINABLE FUTURE NO PLANET NO FASHION
Slide 47: Strategic partnership with HeiQ AeoniQ
I STRATEGIC WE LOVE PARTNERSHIP WITH HEIQ AEONIQ FASHION, WE CHANGE FASHION Replace Push Bind carbon from polyester circularity the atmosphere through cellulosic yarn
Slide 48: Product and sustainability ambition
I SUSTAINABILITY AMBITION ENVIRONMENT 60 % 2030 PRODUCT RESPONSIBLE styles Climate-neutrality in by 2025 own area of responsibility 80 % Circular products 2045 Climate-neutrality by 2030 along entire value chain
Slide 49: The time has come for a new mindset and a true growth culture
THE TIME HAS COME FOR A NEW MINDSET AND A TRUE GROWTH CULTURE
Slide 50: Trust and strong values
I TRANSPARENCY AND TRUST AS FUNDAMENTALS OF A WINNING CULTURE & STRONG VALUES OUR SUCCESS ENTRPRENEURIAL SPIRIT PERSONAL OWNERSHIP TEAM MENTALITY SIMPLICITY & QUALITY YOUTHFUL SPIRIT TRUST
Slide 51: Financial Ambition 2025
I FINANCIAL AMBITION 2025
Slide 52: Our Ambition 2025
I OUR AMBITION 2025 BECOME ONE OF THE TOP 100 GLOBAL BRANDS 4 GROUP SALES ~12% EBIT MARGIN BY 2025 BY 2025
Slide 53: Balanced approach between growth and returns
I BALANCED APPROACH BETWEEN GROWTH AND RETURNS ~2 2021 2025 Investments into organic growth Attractive dividend FREE CASH FLOW DEVELOPMENT with a payout ratio (INCL. IFRS 16) of 30-50% Strategic investments to strengthen business
Slide 54: Attractive Dividend Policy
IATTRACTIVE DIVIDEND POLICY 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 55: HUGO BOSS share outperforms major indices
IHUGO BOSS SHARE OUTPERFORMS MAJOR INDICES +96% December 31, 2021 200 53.50 EUR HUGO BOSS 150 DAX MSCI World 100 50 MAR JUN SEP DEC (INDEX: DECEMBER 31, 2020 = 100)
Slide 56: The Time Is Now.
I THE TIME IS NOW.
Slide 57: Yves Müller, Chief Financial Officer
I YVES MÜLLER CHIEF FINANCIAL OFFICER
Slide 58: Business Performance 2021
I BUSINESS PERFORMANCE 2021
Slide 59: HUGO BOSS achieves strong comeback in 2021
I HUGO BOSS ACHIEVES STRONG COMEBACK IN 2021 Significant top- Strong Successful and bottom-line free cash flow execution of improvements generation
Slide 60: 2021 results exceed guidance
+43% 2,786 EUR MILLION VS 2020* 228 EUR MILLION (1)% GROUP SALES OPERATING PROFIT (EBIT) VS 2019* 2021 RESULTS EXCEED GUIDANCE I * CURRENCY-ADJUSTED
Slide 61: Top line with strong acceleration in 2021
I TOP LINE WITH STRONG ACCELERATION IN 2021 Business recovery supported by improvement in general consumer sentiment +12% Successful execution accelerates +7% business performance (4)% Strong growth across all brands, regions, and channels (23)% Q1 Q2 Q3 Q4 SALES GROWTH* 2021 VS 2019 * CURRENCY-ADJU
Slide 62: Sales growth by brand
MENSWEAR WOMENSWEAR +42% VS 2020* +46% VS 2020* +45% VS 2020* * CURRENCY-ADJUSTED (2)% VS 2019* (6)% VS 2019* +6% VS 2019*
Slide 63: Europe
I EUROPE +41% INCL. MIDDLE EAST AND AFRICA Significant pick-up in local demand particularly in the second half VS 2020* of the year All key markets contribute to strong growth Growth markets including (2)% the United Arab Emirates enjoy particularly strong momentum VS 2019* * CURRENCY-ADJUSTED
Slide 64: Americas
I AMERICAS Strong business performance with significant acceleration +78% VS. 2020* in the final quarter Successful turnaround in important U.S. market implemented Strengthening of product offering +4% in casualwear VS. 2019* * CURRENCY-ADJUSTED
Slide 65: Asia/Pacific
I ASIA/ PACIFIC +22% VS. 2020* General upward trend continues Robust local demand fuels growth in China Temporary store closures weigh on business in various markets (3)% VS. 2019* * CURRENCY-ADJUSTED
Slide 66: Digital
I DIGITAL Digital sales share +55 VS 2020* % reaches 20% Double-digit growth across all channels and regions +85 VS 2019* % * CURRENCY-ADJUSTED
Slide 67: Brick-and-Mortar Retail
I BRICK-AND- MORTAR RETAIL +43 VS 2020* % Return to double digit growth vs. 2019 in the second half of the year Robust local demand particularly in Europe and (9) the Americas % VS 2019* * CURRENCY-ADJUSTED
Slide 68: Brick-and-Mortar Wholesale
I BRICK-AND- MORTAR WHOLESALE +37 VS 2020* % Strong demand of partners for BOSS and HUGO collections Successful strategy execution to provide (16) further tailwind % VS 2019* * CURRENCY-ADJUSTED
Slide 69: Significant improvement in operating profit
GROUP GROSS OPERATING OPERATING NET SALES MARGIN EXPENSES PROFIT (EBIT) INCOME 2021 2021 2021 2021 2021 2,786 61.8 % 1,493 228 144 EUR million EUR million EUR million EUR million +43 +43%* %* +80 +80BPBP +5 +5%% >100 >100%% >100 >100%% SIGNIFICANT IMPROVEMENT IN OPERATING PROFIT I * CURRENCY-ADJUSTE
Slide 70: Free cash flow hits record
I I 2021 FREE CASH FREE DEC. 31, 2021 NET FINANCIAL HUGO BOSS FLOW CASH FLOW POSITION* HITS RECORD FOR THE LEVEL FIRST TIME 559 EUR million 167 EUR million >100% >100% * EXCL. IFRS 16
Slide 71: Outlook 2022
I OUTLOOK 2022
Slide 72: Update on Ukraine and Russia
I UPDATE ON UKRAINE AND RUSSIA
Slide 73: Further top- and bottom-line improvements in the first quarter
I FURTHER TOP- AND BOTTOM-LINE IMPROVEMENTS IN THE FIRST QUARTER GROUP SALES EBIT EUR 772 MILLION EUR 40 MILLION +52%* >100% * CURRENCY-ADJUSTED
Slide 74: Sales Outlook
I SALES OUTLOOK +10% TO +15% Sales to reach new record levels in 2022 3.1 TO 3.2 All brands, channels, and key regions expected to EUR BILLION contribute to growth 2.8 EUR BILLION
Slide 75: EBIT Outlook
I EBIT OUTLOOK +10% TO +25% Robust bottom-line improvements anticipated despite significant step-up in 250 TO 285 Expected top-line growth and EUR MILLION robust market positioning to compensate for current macroeconomic uncertainties 228 EUR MILLION
Slide 76: 2022 - Another successful year for HUGO BOSS
I 2022 - ANOTHER SUCCESSFUL YEAR FOR HUGO BOSS Branding New collections Investments to refresh a well received drive brand huge success relevance
Slide 77: Thank You!
I THANK YOU!