Hugo Boss AG · XETR:BOSS
Hugo Boss — Shareholder Meeting (May 2015)
35 slides from Hugo Boss's shareholder meeting presentation, May 12, 2015
Slide 1: HUGO BOSS
HUGO BOSS
Slide 2: Annual Shareholders' Meeting 2015
ANNUAL SHAREHOLDERS' MEETING 2015 Claus-Dietrich Lahrs (CEO and Chairman of the Managing Board) Stuttgart, May 12, 2015 HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 2
Slide 3: Agenda
Agenda Review 2014 Growth strategy 2020 Outlook 2015 HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 3
Slide 4: Agenda
Agenda Review 2014 Growth strategy 2020 Outlook 2015 HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 4
Slide 5: HUGO BOSS generates solid sales and earnings growth in 2014
HUGO BOSS generates solid sales and earnings growth in 2014 Sales and EBITDA before special items +5% (in EUR million) +6%* Sales 2.572 EBITDA before special items 2.432 2.346 2.059 1.729 1.562 528 565 591 470 354 269 2009 2010 2011 2012 2013 2014 *+6% currency-adjusted HUGO BOSS Annual Shareholders
Slide 6: Globally balanced market presence secures solid growth
Globally balanced market presence secures solid growth Sales growth (currency-adjusted) 2014 (in %) Europe* Americas Asia/Pacific +7% +4% +7% Strength of European core markets shields Group from economic turmoil outside Europe *Including The Middle East and Africa HUGO BOSS Annual Shareholders' Meet
Slide 7: Retail remains main driver of sales growth
Retail remains main driver of sales growth Sales growth by in EUR Development of sales by distribution distribution channel currency-adjusted channel 2014 over prior year (in %) (in %) (2) 41% Wholesale Wholesale (1) 64% 12 Retail 12 0 Licenses 57% 0 Retail 33% 6 Group Licenses 6 3% 2% -5 0 5 10 15
Slide 8: Continued expansion of own retail activities
Continued expansion of own retail activities Number of own retail stores TOTAL 1,041 (+31) as of December 31, 2014 Total selling space 140,000 sqm (+4%) (December 31, 2013: 1,010 New openings 86 of which takeovers 20 Closures 55 Europe* 595 (+19) New openings 43 of which takeovers 5 Closures 24 Amer
Slide 9: Global brand awareness increased by impressive new openings
Global brand awareness increased by impressive new openings BOSS store Osaka, Shinsaibashi BOSS store Hong Kong, Canton Road HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 9
Slide 10: HUGO BOSS has reached a new level in womenswear
HUGO BOSS has reached a new level in womenswear Sales of BOSS Womenswear grow by 18%, total womenswear business up 11% HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 10
Slide 11: HUGO BOSS wins important brand rankings in Germany and China
HUGO BOSS wins important brand rankings in Germany and China Germany China ■ HUGO BOSS wins "Best fashion brand" ■ HUGO BOSS receives "Best fashion award label for men" award ■ Independent study conducted by market ■ Independent study carried out by Hurun research agency GfK Research Institute ■ Bas
Slide 12: New flat-packed goods distribution center in Filderstadt boosts efficiency
New flat-packed goods distribution center in Filderstadt boosts efficiency HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 12
Slide 13: Slight decline in operating margin despite increased gross profit margin
Slight decline in operating margin despite increased gross profit margin Sales Gross profit margin EUR 2,572 million 66.1% +120 +6%* BP *+6% currency-adjusted. Operating margin Net income (adjusted) 23.0% EUR 334 million +0.3% (20) BP HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2
Slide 14: Further significant improvement in key balance sheet metrics
Further significant improvement in key balance sheet metrics Capital expenditures Free cash flow Net debt (in EUR million) (in EUR million) (in EUR million) (27)% +17% (37)% 185 268 57 230 135 36 2013 2014 2013 2014 31.12.2013 31.12.2014 ■ Non-recurrence of prior- ■ Increase mainly due to ■ Increase
Slide 15: Proposed dividend raises payout ratio to 75%
Proposed dividend raises payout ratio to 75% Dividend and payout ratio in EUR in %* 4.00 100 3.62 90 3.50 3.34 3.12 80 3.00 2.88 75% 75% 70 2.50 70% 70% 70% 64% 60 2.02 2.00 50 40 1.50 30 1.00 0.96 20 0.50 10 0.00 0 2009 2010 2011 2012 2013 2014** Proposal reflects strategy to distribute 60% to 80%
Slide 16: HUGO BOSS share significantly outperforms overall market
HUGO BOSS share significantly outperforms overall market Share price performance: HUGO BOSS + 403% December 31, 2009 – December 31, 2014 DAX + 65% MDAX + 126% (Index: December 31, 2009 = 100) MSCI Textiles & Apparel + 108% 600 500 400 300 200 100 0 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Ju
Slide 17: Agenda
Agenda Review 2014 Growth strategy 2020 Outlook 2015 HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 17
Slide 18: Growth strategy 2020 promotes further profitable growth
Growth strategy 2020 promotes further profitable growth Expansion of Leverage of omnichannel skills Exploitation of Elevation of the potential in to spur growth in growth Boss core brand womenswear as Group’s own retail opportunities in well as in shoes business in both underrepresented and accessor
Slide 19: Increasing brand differentiation supports elevation of BOSS
Increasing brand differentiation supports elevation of BOSS Future market positioning LUXURY RETAIL PREMIUM WHOLESALE authentic innovative confident progressive lighthearted dynamic sophisticated contemporary HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 19
Slide 20: HUGO and BOSS Green replace BOSS core brand in category business
HUGO and BOSS Green replace BOSS core brand in category business RETAIL WHOLESALE Own stores focus increasingly on BOSS core brand Distribution of BOSS core brand only in shop-in-shops HUGO and BOSS Green take over category business HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 201
Slide 21: New collections underpin elevation of BOSS Womenswear
New collections underpin elevation of BOSS Womenswear HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 21
Slide 22: Campaign boosts credibility of BOSS as fashion brand
Campaign boosts credibility of BOSS as fashion brand HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 22
Slide 23: Consumers distinguish less and less between online and offline
Consumers distinguish less and less between online and offline Inspiration Research Purchase ■ Importance of online ■ +90% research ■ Prefer to buy offline increases before purchasing ■ 55-72% of offline ■ Sources of ■ Use online and purchases are inspiration: in-store, other media prepared by onlin
Slide 24: Successful relaunch of hugoboss.com
Successful relaunch of hugoboss.com Two different gateways Previously for e-commerce and brand world Seamless integration of Today editorial content and e-commerce offerings HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 24
Slide 25: B2C distribution center creates basis for omnichannel approach
B2C distribution center creates basis for omnichannel approach Order processing currently by arvato Financial Product De- services/ Logistics/ dev- velopment Online payment Order customs/ elopment Online Creative Call of store trans- manage- returns and pro- marketing design center online operation
Slide 26: Improved retail competences support solid growth outlook in Europe
Improved retail competences support solid growth outlook in Europe ■ Difficult industry conditions and decreasing customer footfall in many markets ■ Focus on improving the in-store experience, customer service and customer relationship management ■ Underpenetrated product groups and markets offer a
Slide 27: Brand control key to success in the Americas
Brand control key to success in the Americas ■ Discount-driven market environment will persist ■ Key retail-related process enhancements initiated ■ Focus on improving brand presence in US wholesale business BOSS store Washington DC, city center HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS
Slide 28: Progress in China adds to strength in other Asian markets
Progress in China adds to strength in other Asian markets ■ Strengthening the brand’s core in formalwear will underpin further market share gains in China despite continued market weakness ■ Confident outlook for Australia and Japan ■ Direct control of trend-setting South Korean market will improve
Slide 29: Consolidation of own production network completed
Consolidation of own production network completed HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 29
Slide 30: Agenda
Agenda Review 2014 Growth strategy 2020 Outlook 2015 HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 30
Slide 31: Solid growth in sales and operating profit expected in 2015
Solid growth in sales and operating profit expected in 2015 Outlook 2015 Sales growth (currency-adjusted) Mid single-digit percentage rate Growth in EBITDA before special 5% - 7% items Capital expenditures EUR 200 million – EUR 220 million About 50 openings Own retail network (excluding takeovers) H
Slide 32: HUGO BOSS weathers difficult market conditions in first quarter of 2015
HUGO BOSS weathers difficult market conditions in first quarter of 2015 Sales Gross profit margin EUR 668 million 65.5% +10 +9%* BP *+3% currency-adjusted. Retail EBITDA (before special items) EUR 370 million EUR 132 million +6%* +0.2% *Retail comp store growth +3%, -20 both currency-adjusted. BP HU
Slide 33: Clear strategy to meet external challenges
Clear strategy to meet external challenges ■ HUGO BOSS coped well with a weak market in 2014 ■ Diverse opportunities offer numerous levers for long-term growth ■ 2015 another year of solid financial performance and key strategic progress BOSS store Tokyo, Omotesando HUGO BOSS Annual Shareholders' Me
Slide 34: Thank you for your attention.
Thank you for your attention. HUGO BOSS Annual Shareholders' Meeting 2015 HUGO BOSS © May 12, 2015 34
Slide 35: HUGO BOSS
HUGO BOSS