Hugo Boss AG · XETR:BOSS
Hugo Boss — FY2021 Earnings Presentation
76 slides from Hugo Boss's earnings presentation, Mar 25, 2022
Slide 1: Investor Meeting Presentation FY2021
INVESTOR MEETING PRESENTATION I FY2021
Slide 2: Vision
I BECOME THE VISION PREMIUM TECH-DRIVEN FASHION PLATFORM WORLDWIDE
Slide 3: Ambition
I BECOME AMBITION ONE OF THE TOP 100 GLOBAL BRANDS 4 12 EUR BILLION EBIT IN SALES % MARGIN
Slide 4: Financial Ambition
I GROUP € 4B SALES in 2025 SALES ~ 6% GROWTH CAGR 2019 - 2025 EBIT ~ 12% MARGIN OF GROUP SALES FINANCIAL EBIT GROWTH ~ 6% CAGR 2019 - 2025 AMBITION FCF ~ € 2B 2025 GENERATION 2021 - 2025
Slide 5: 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 6: Boost Brands
I BOOST BRANDS CLAIM 1
Slide 7: Brand Portfolio Strategy
I BRAND PORTFOLIO STRATEGY One HUGO BOSS platform with currently two brands
Slide 8: Be Your Own BOSS
I “BE YOUR OWN BOSS” 24/7 LIFESTYLE addresses customers in the BRAND premium segment who lead a self-determined life, show a clear attitude, and pursue ambitions with determination offers the perfect outfit for every occasion – from business to leisure – with casualness and comfort being key attribu
Slide 9: Be Your Own BOSS campaign
I BE YOUR OWN BOSS Launch of star-studded BOSS campaign as part of branding refresh
Slide 10: 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 11: 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 12: Hugo Your Own Way
I “HUGO YOUR OWN WAY” FIRST TOUCHPOINT targets customers who consider FOR their way of dressing as an CONSUMERS expression of their individual personality and who see themselves as trendsetters broad range of trendy and modern products reflecting the brand’s authentic and unconventional style
Slide 13: How Do You HUGO
I HOW DO YOU HUGO Launch of star-studded HUGO campaign as part of branding refresh
Slide 14: 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 15: How Do You HUGO TikTok Challenge
I HOW DO YOU HUGO The Dance Hashtag Challenge on TikTok +63 % Follower on HUGO TikTok
Slide 16: 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 17: Product Is King
I PRODUCT IS KING CLAIM 2
Slide 18: 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 19: New Design Codes Introduced
I NEW DESIGN CODES INTRODUCED IN SPRING/ SUMMER 2022 New logo BOSS monogram Iconic color palette
Slide 20: 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 21: First Touchpoint for Younger Consumers
I FIRST TOUCHPOINT FOR YOUNGER CONSUMERS
Slide 22: New HUGO Branding Incorporated
I NEW HUGO BRANDING New logo INCORPORATED Iconic colors IN SPRING/ SUMMER 2022 HUGO monogram
Slide 23: Strong Growth Opportunities
I STRONG GROWTH Denim OPPORTUNITIES Streetwear Contemporary
Slide 24: Lead in Digital
I LEAD IN DIGITAL CLAIM 3
Slide 25: 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 26: 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 27: 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 28: Rebalance Omnichannel
I REBALANCE OMNICHANNEL CLAIM 4
Slide 29: 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 30: 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 31: Elevate Store Experience
>100 STORES TO BE I REFRESHED ELEVATE IN 2022 STORE EXPERIENCE
Slide 32: Reclaim Wholesale: New Look & 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 33: Branding Refresh Resonates Strongly with Wholesale Partners
I BRANDING REFRESH RESONATES STRONGLY WITH OUR WHOLESALE PARTNERS +40% ORDER INTAKE FALL/WINTER 2022 (VS. 2019)
Slide 34: Organize for Growth
ORGANIZE a Ff FOR GROWTH »- CLAIM 5
Slide 35: 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 36: Sustainable Throughout
I SUSTAINABLE THROUGHOUT
Slide 37: 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 38: Sustainability Ambition
I SUSTAINABILITY AMBITION CLIMATE-NEUTRALITY RESPONSIBLE CIRCULAR 2030 STYLES PRODUCTS Own area of responsibility 60% 80% 2045 BY 2025 BY 2030 Entire value chain
Slide 39: 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 40: Full Year 2021 Results
HUGO BOSS FULL YEAR 2021 RESULTS
Slide 41: 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 42: 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 43: Sales by Brand: Menswear and Womenswear
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 44: 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 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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 52: 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 53: 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% Q4/19 Q2/20 Q4/20 Q2/21
Slide 54: 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 55: 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 56: HUGO BOSS to Resume Dividend Payments
I HUGO BOSS TO RESUME DIVIDEND PAYMENTS 60% 50% 35% 30‒50% 40% PAYOUT RATIO 30% 0.04 0.04 0.70 EUR EUR EUR 20% 2019 2020 2021* 2022e 2023e 2024e 2025e *DIVIDEND PROPOSAL
Slide 57: Outlook 2022
I OUTLOOK 2022
Slide 58: Execution of Claim 5 Primary Focus in 2022
I EXECUTION OF “CLAIM 5” PRIMARY FOCUS IN 2022 Consistent execution of Investments in product, “CLAIM 5” will take center marketing, and digital stage among all initiatives expertise to drive brand relevance
Slide 59: 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 60: 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 61: Financial Calendar & Investor Relations Contact
PAGE 61 FINANCIAL CALENDAR & INVESTOR RELATIONS CONTACT MAY 4 FIRST QUARTER RESULTS 2022 2022 CHRISTIAN STÖHR MAY VICE PRESIDENT INVESTOR RELATIONS 24 AGM E-MAIL Christian_stoehr@hugoboss.com PHONE +49 7123 94 80903 2022 2022
Slide 62: Further Information
I FURTHER INFORMATION
Slide 63: HUGO BOSS at a Glance
HUGO BOSS AT A GLANCE 2.8 EUR BILLION 228 EUR MILLION 8.2% EBIT 559 EUR MILLION SALES EBIT MARGIN FREE CASH FLOW 128 ~ 14,000 20% 6,800 COUNTRIES EMPLOYEES SHARE OF POINTS DIGITAL SALES OF SALE
Slide 64: Sales by Brand
I SALES BY BRAND 2021 BOSS BOSS HUGO MENSWEAR WOMENSWEAR 78% 7% 15% of Sales of Sales of Sales 2,181 EUR MILLION 192 EUR MILLION 413 EUR MILLION
Slide 65: HUGO BOSS by Regions
IHUGO BOSS BY REGIONS AMERICAS EUROPE ASIA/PACIFIC (INCL. MIDDLE EAST AND AFRICA) 20% 63% 15% of Sales of Sales of Sales 543 EUR million Sales 1,742 EUR million Sales 423 EUR million Sales ~1,600 Points of sale ~4,650 Points of sale ~550 Points of sale 98 Freestanding retail stores 147 Freestanding
Slide 66: Distribution Channels
DISTRIBUTION CHANNELS Brick-and-mortar wholesale Multi-brand points of sale General selling in multi-brand stores Shop-in-shops BOSS and HUGO shops operated by partne! Franchise business Freestanding BOSS Digital Online store hugoboss.com Digital flagship store with seperate brand environments for B
Slide 67: Sales by Distribution Channel
I SALES BY DISTRIBUTION CHANNEL SALES BY DISTRIBUTION CHANNEL1 (IN EUR MILLION) 1 As compared to the previous year, presentation has been aligned to the 2025 targets set out in the “CLAIM 5” strategy.
Slide 68: Retail Store Network
I RETAIL STORE NETWORK NUMBER OF OWN RETAIL STORES 1,228 TOTAL OPERATED BY HUGO NUMBER OF BOSS INCLUDING RETAIL POINTS SHOP-IN-SHOPS AND OF SALE OUTLETS
Slide 69: Sourcing and Production
I SOURCING AND PRODUCTION OWN REGIONAL SPLIT 2021 (2020) PRODUCTION 17% OF TOTAL SOURCING AND PRODUCTION VOLUME 1 Including Middle East and Africa.
Slide 70: Strong Organizational Set-Up
I STRONG ORGANIZATIONAL SET-UP EMPLOYEE EMPLOYEES IN MANAGEMENT SATISFACTION 76% CONDUCTED ANNUALLY WITH GREAT PLACE TO WORK® GERMANY
Slide 71: Shareholder Structure
I SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE INSTITUTIONAL INVESTORS AS OF DECEMBER 31 (FREE FLOAT) BY REGION (IN % OF SHARE CAPITAL) AS OF DECEMBER 31 (IN %) TOTAL NUMBER OF SHAREHOLDERS OF SHARES HELD BY PRIVATE SHAREHOLDERS
Slide 72: Analyst Recommendations
I ANALYST RECOMMENDATIONS ANALYSTS ARE Buy: 11 COVERING HUGO BOSS Hold: 11 Sell: 0 SHARE PRICE TARGET As of March 21, 2022. EUR
Slide 73: HUGO BOSS Share Price 2020-2021
I HUGO BOSS SHARE PRICE 2020-2021 70 60 +24% 50 40 30 AS OF DEC. 31, 2021 20 EUR 53.50 10 0
Slide 74: Multi-Year Overview: Sales
I MULTI-YEAR-OVERVIEW SALES 2021 2020 2019 2,018 2017 2016 Sales (in EUR million) 2,786 1,946 2,884 2,796 2,733 2,693 Sales by segments Europe incl. Middle East and Africa 1,742 1,231 1,803 1,736 1,681 1,660 Americas 543 308 560 574 577 582 Asia/Pacific 423 343 438 410 396 382 Licenses 77 64 84 76 7
Slide 75: Multi-Year Overview: P&L, Balance Sheet and Key Figures
I MULTI-YEAR-OVERVIEW P&L, BALANCE SHEET AND OTHER KEY FIGURES 2021 2020 2019 2,018 2017 2016 Results of operations (in EUR million) Gross profit 1,721 1,187 1,875 1,824 1,808 1,777 Gross margin in % 61.8 61.0 65.0 65.2 66.2 66.0 EBIT 228 (236) 344 347 341 263 EBIT margin in % 8.2 (12.1) 11.9 12.4 1
Slide 76: 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 i