Hugo Boss AG · XETR:BOSS

Hugo Boss — Q1 2016 Earnings Presentation

20 slides from Hugo Boss's earnings presentation, May 3, 2016

  1. Slide 1: HUGO BOSS

    HUGO BOSS

  2. Slide 2: HUGO BOSS First Quarter Results 2016

    HUGO BOSS First Quarter Results 2016 Mark Langer (CFO) Metzingen, May 3, 2016 HUGO BOSS First Quarter Results 2016 HUGO BOSS © May 3, 2016 2

  3. Slide 3: Cautious customer spending and specific market challenges affect quarterly results

    Cautious customer spending and specific market challenges affect quarterly results Sales EBITDA before special items (in EUR million) (in EUR million) (4)% (29)% 668 643 132 93 Q1 2015 Q1 2016 Q1 2015 Q1 2016 ((3)% fx-adjusted) HUGO BOSS First Quarter Results 2016 HUGO BOSS © May 3, 2016 3

  4. Slide 4: Mixed started to the year in Europe

    Mixed started to the year in Europe ■ Weakness in tourism compounds moderation of local HUGO BOSS Europe sales (in EUR million) demand 410 402 ■ UK continues growing solidly despite more difficult market backdrop, Italy outperforming ■ Sales decline in the Benelux markets and France Q1 2015 Q1 2016

  5. Slide 5: Weakness in the US drags down performance in the Americas

    Weakness in the US drags down performance in the Americas ■ Robust sales growth in Canada and Central & Latin HUGO BOSS Americas sales (in EUR million) America 143 ■ US business declines across wholesale and own retail 130 channels ■ Measures to upgrade distribution in the wholesale channel under wa

  6. Slide 6: Encouraging consumer reception of price changes in China and Asia

    Encouraging consumer reception of price changes in China and Asia ■ Solid growth in Japan, momentum in South Korea HUGO BOSS Asia/Pacific sales (in EUR million) improves significantly ■ Sales in Hong Kong and Macau decline substantially 101 95 ■ Price adjustment and digital marketing focus support s

  7. Slide 7: Own retail business grows moderately due to sales contribution from new space

    Own retail business grows moderately due to sales contribution from new space ■ Comp store sales down 6% on a currency-adjusted HUGO BOSS Retail sales (in EUR million) basis in the first quarter ■ Growth of online business in line with the rest of own 370 370 retail, insourcing of fulfillment in Eur

  8. Slide 8: Cautious ordering behavior and takeover effects impact wholesale sales

    Cautious ordering behavior and takeover effects impact wholesale sales ■ US wholesale business declines at a double-digit rate HUGO BOSS Wholesale sales (in EUR million) ■ Cautious retailer sentiment also in Europe 284 257 ■ Takeovers cause shift of sales into own retail business Q1 2015 Q1 2016 HUG

  9. Slide 9: Double-digit growth of fragrance business drives increase of license sales

    Double-digit growth of fragrance business drives increase of license sales HUGO BOSS License sales (in EUR million) 14 16 Q1 2015 Q1 2016 HUGO BOSS License sales (change versus prior year, in %) 14 14 in EUR fx-adjusted HUGO BOSS First Quarter Results 2016 HUGO BOSS © May 3, 2016 9

  10. Slide 10: Renewed focus on core menswear business

    Renewed focus on core menswear business ■ Dedicated Board responsibility for brand and creative HUGO BOSS Menswear sales (in EUR million) management established 592 571 ■ Menswear marketing spend to be increased ■ Expansion of floor space allocation in own retail Q1 2015 Q1 2016 HUGO BOSS Menswear s

  11. Slide 11: Womenswear remains strategic growth opportunity under Jason Wu's artistic direction

    Womenswear remains strategic growth opportunity ■ BOSS Womenswear business has improved significantly HUGO BOSS Womenswear sales (in EUR million) under Jason Wu’s artistic direction ■ Group committed to invest in long-term growth 75 72 ■ BOSS Womenswear continues performing better than overall segme

  12. Slide 12: Significant operating deleverage despite tighter cost management

    Significant operating deleverage despite tighter cost management Selling & Distribution (140) Gross profit margin bp expenses 64.1% 279 EUR million 5% Administration expenses EBITDA (before special items) (29)% 73 EUR million 6% 93 EUR million EBIT (48)% Net income attributable to (49)% equity holde

  13. Slide 13: Operating profits decline in all regions

    Operating profits decline in all regions Segment profit In EUR million Q1 2016 In % of sales Q1 2015 In % of sales Change in % Europe* 117.9 29.3 131.3 32.0 (10) Americas 26.5 20.4 32.1 22.4 (17) Asia/Pacific 17.5 18.4 31.2 31.0 (44) Licenses 13.4 85.3 10.7 78.0 25 Segment profit operating segments

  14. Slide 14: Rate of inventory growth continues to improve

    Rate of inventory growth continues to improve Average trade net working capital as a percentage of sales (in %) Currency-adjusted inventory growth, y-o-y 19.7% 19.8% 19.8% 19.5% 19.5% 20% 19.1% 18.7% Trade net working capital 18.1% as a percentage of sales 15% Currency-adjusted 15% inventory growth,

  15. Slide 15: Investments start moderating in the first quarter

    Investments start moderating in the first quarter Investments Free cash flow Net debt (in EUR million) (in EUR million) (in EUR million) +105% 89 (5)% +38% 40 38 43 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Mar. 31, 2015 Mar. 31, 2016 (5) (8) ■ Own retail expansion and ■ Working capital improvements ■ Net deb

  16. Slide 16: Free cash flow targeted to exceed prior year level despite earnings decline

    Free cash flow targeted to exceed prior year level despite earnings decline Outlook Outlook 2016 2016 Sales (currency adjusted) Low single-digit percentage increase Gross margin Stable performance EBITDA before special items Low double-digit percentage decrease Capex EUR 160 million to EUR 180 milli

  17. Slide 17: The work on the return to long-term profitable growth has started

    The work on the return to long-term profitable growth has started ■ Depressed market environment compounds company- specific challenges ■ Multiple measures initiated to increase cost efficiency, improve global brand and price positioning and drive digital transformation ■ Organization ready to bring

  18. Slide 18: Questions & Answers

    Questions & Answers HUGO BOSS First Quarter Results 2016 HUGO BOSS © May 3, 2016 18

  19. Slide 19: Forward looking statements contain risks

    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", "should", and similar expressions

  20. Slide 20: HUGO BOSS

    HUGO BOSS

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