Hugo Boss Ag · XETR:BOSS
Hugo Boss — Q2 2021 Earnings Presentation
108 slides from Hugo Boss's earnings presentation, Aug 9, 2021
Slide 1: Investor Meeting Presentation
INVESTOR MEETING PRESENTATION HUGO BOSS
Slide 2: Agenda
HUGO BOSS AGENDA 1. Q2/2021 Results 2. CLAIM 5 Strategy 3. Sustainability HUGO BOSS
Slide 3: Strong business recovery continues in the second quarter 2021
HUGO BOSS STRONG BUSINESS RECOVERY continues in the second quarter 2021 CURRENCY-ADJUSTED GROWTH +133% (4)% VS. Q2 2020 VS. Q2 2019
Slide 4: Sales by region vs. Q2 2020
INCL. MIDDLE EAST AND AFRICA VS. Q2 2020
Slide 5: Retail
HUGO BOSS RETAIL +124% | (5)s. VS. Q2 2020 VS. Q2 2019 >» Recovery supported by higher store opening rate > Vast majority of stores back in operation at the end of Q2 Own online sales grow triple-digit on a two-year stack basis
Slide 6: je) © =) =
je) © =) =
Slide 7: Significant bottom-line improvements in Q2
HUGO BOSS records significant bottom-line improvements in Q2 Gross margin Selling & distribution Administration expenses expenses EUR EUR 61.2 270 73 % MILLION MILLION MILLION EUR 71 MILLION HUGO BOSS Net income 42 25 MILLION MILLION LLION MILLION
Slide 8: Free cash flow generation returns to pre-pandemic levels
Free cash flow generation returns to pre-pandemic levels EUR EUR 517 27 134 MILLION MILLION MILLION HUGO BOSS Inventories decreased 3%* reflecting ongoing tight management Increase in capital expenditure related to optimization of store network and expansion of digital capabilities Net financial lia
Slide 9: Outlook for the full year 2021
HUGO BOSS Outlook for the full year 2021 GROUP SALES INCREASE BETWEEN CURRENCY-ADJUSTED 30% AND 35% EBIT BETWEEN EUR 125 MILLION AND EUR 175 MILLION TNWC IMPROVE TO A LEVEL OF INISo FERNS BETWEEN 21% AND 23% CAPEX EUR 100 MILLION AND EUR 130 MILLION
Slide 10: Agenda
HUGO BOSS AGENDA 1. Q2/2021 Results 2. CLAIM 5 Strategy 3. Sustainability HUGO BOSS
Slide 11: Become the premium tech-driven fashion platform worldwide
j HUGO BOSS BECOME THE PREMIUM TECH- DRIVEN FASHION PLATFORM WORLDWIDE.
Slide 12: We love fashion, we change fashion
HUGO BOSS WE LOVE FASHION, WE CHANGE FASHION ISSION
Slide 13: Become one of the top fashion players
HUGO BOSS BILLION IN 2025 BILLION IN 2026+ BECOME ONE OF THE
Slide 14: CLAIM 5 strategy
HUGO BOSS CLAIM 5 STRATEGY WHY CONSUMER FIRST 2 3 A, 5 PRODUCT LEAD IN REBALANCE ORGANIZE IS KING DIGITAL OMNICHANNEL FOR GROWTH WHAT SUSTAINABLE THROUGHOUT HOW RIGOROUS EXECUTION EMPOWER PEOPLE AND TEAMS
Slide 15: Our position in the consumers' minds
> OUR POSITION IN ii, THE CONSUMERS’ iy MINDS Yf / // HUGO BOSS
Slide 16: Always very first consumer
AIEVWVAYS VERY Fis] NOT JUS) CONSUM
Slide 17: Build loyalty and engage consumers
BUILD LOYALTY AUTHENTICITY BUILD RELATIONSHIPS VALUE DRIVE PURCHASES ACCESS CONSUMER/ FANS INCENTIVE TO INTERACT REWARDS HUGO BOSS BUILD AWARENESS DESIRABILITY ENGAGE CONSUMERS EXCLUSIVITY
Slide 18: Boost brands
BOOST Y BRANDS / Yf / // HUGO BOSS
Slide 19: Brand portfolio strategy
HUGO BOSS BRAND PORTFOLIO STRATEGY ONE HUGO BOSS PLATFORM WITH TWO BRANDS AND THE POSSIBILITY TO ADD MORE BUSINESSES TO IT » Balanced and strong brand portfolio » BOSS and HUGO HUGO BOSS as 2 lifestyle stories > Premium lifestyle positioning
Slide 20: New brand identity for BOSS and HUGO
HUGO BOSS FOR BOSS AND HUGO BOSS BOSS MENSWEAR KIDS BLACK (Business Ba -- & Smart Casual) iF [| Li Li [Huso ORANGE (Casual) THE NEW BRAND IDENTITY BOSS HUGO
Slide 21: For BOSS and HUGO
HUGO BOSS > Exploit full potential among FO R younger consumers > Foster clear individual brand BOSS & image for BOSS and HUGO > Leverage innovation and IH U G O sustainability to strengthen brand relevance > Data and performance-driven marketing approach > Push omnichannel strategy globally
Slide 22: BOSS menswear: the new brand world
BOSS THE NEW BRAND WORLD BOSS MENSWEAR ,
Slide 23: BOSS womenswear: the new brand world
BOSS THE NEW BRAND WORLD BOSS WOMENSWEAR GO BOSS
Slide 24: HUGO: the new brand world
HUGO THE NEW BRAND WORLD HUGO HUGO
Slide 25: Attitude
ATTITUDE
Slide 26: It's writing your own rules
IT'S WRITING YOUR OWN RULES.
Slide 27: It's chasing your own dreams
. IT'S ~ | CHASING -— YOUR » OWN w» DREAMS.
Slide 28: It's finding your own purpose
IT'S FINDING = YOUR - _ OWN _ = © PURPOSE.
Slide 29: It's living life on your own terms
IT'S LIVING LIFE ON YOUR OWN TERMS.
Slide 30: It's being whatever you want to be
IT'S BEING WHATEVER YOU WANT TO BE.
Slide 31: a.
a.
Slide 32: Mindset
MINDSET
Slide 33: Confident yet curious
Slide 34: Independent but still inspired by others
INDEPENDENT BUT ST NSPIR BY OT 4
Slide 35: Risk-taker change-maker
Slide 36: BOSS menswear
BOSS MENSWEAR > Foster brand positioning in premium/affordable luxury segment > Dress consumers for every occasion 24/7 to enhance perception as a lifestyle brand > Emotionalize the brand to attract additional & younger consumers id Push digital channels to drive brand vitality; rebalance wholesale
Slide 37: BOSS overall strategy
BOSS OVERALL STRATEGY
Slide 38: The attitude for HUGO
THE ATTITUDE FOR HUGO.
Slide 39: You're a go-getter
Slide 40: Rebel and rule-breaker
Slide 41: Whatever you do, you go all out
Slide 42: HU
HU
Slide 43: HUGO your own way
Slide 44: For it
FOR IT
Slide 45: HUGO
HUGO 2025 Become the first brand touchpoint for younger consumers € B Build HUGO brand power by focusing e@ on brand values & a clear differentiation AMBITION Grasp growth opportunity by balancing contemporary and commercial items Focus on digital and drive geographical expansion in metropolitan are
Slide 46: Marketing strategy
MARKETING STRATEGY > Step up in marketing investments and increase marketing efficiency > Recognize BOSS and HUGO as ‘digital citizens’ > Ensure every consumer touchpoint is working in alignment > Content that extends beyond advertising to become part of culture > Communication leading with purpose
Slide 47: Collaborations
HUGO BOSS BOSS X SPORT BOSS X ADVENTURE BOSS X TEAMS BOSS X TRAVEL BOSS X CULTURE COLLABS os ncovse HUGO X MERC
Slide 48: Product is king
- PRODUCT Y IS KING / Yf / // HUGO BOSS
Slide 49: Dress all ages from head to toe
HUGO BOSS BRAND DRESS ALL AGES FROM HEAD TO TOE FOR EVERY OCCASION
Slide 50: High product value and competitive pricing
HUGO BOSS HIGH PRODUCT VALUE AND COMPETITIVE PRICING ENSURE CLEAR COMPREHENSIVE OFFER FUNCTIONALITY | AS FUTURE ATTRACTIVE IN ALL AS AN VALUE ACROSS OUR PRODUCTS | INALL OUR PRODUCT PRODUCTS DRIVER PORTFOLIO 01 02 03 04 05
Slide 51: Product segmentation by focus label
HUGO BOSS FOCUS LABEL THE FOUNDATION STAY RELEVANT } inspire | GRASP OPPORTUNITY c c 2 QUICK SEASONAL/ c SPORTS/ FW/ WS3 0°00 © 08 © © © @ @ wo © OO © © © © G8 OB CE ~40% ~ 20% ~20% ~20% Vv Vv Vv Vv BESTSELLERS CREATE A BUZZ INSPIRATIONAL GROWTH POTENTIAL
Slide 52: BOSS product strategy
BOSS Cf THE PRODUCT STRATEGY \ é ; | | } Quality, casual chic, and restrained elegance paired with understatement refined with a pinch of luxury. FROM TAILORED PRODUCTS TO CASUALIZATION TO MODERN WN te) 4) AND COMFORT INNOVATIVE MORNING TO ARE KEY LIFESTYLE EVENING
Slide 53: HUGO product strategy
HUGO THE PRODUCT STRATEGY A broad range of commercial and contemporary pieces reflecting the authentic and unconventional HUGO style. FIRST BRAND SHARPEN THE INCREASE SPEED TOUCHPOINT PRODUCT RANGE AND SEIZE FOR YOUNGER BASED ONOWN OPPORTUNITIES CONSUMERS BRAND IDENTITY
Slide 54: Lead in digital
. LEAD IN //] DIGITAL | Yf / // HUGO BOSS
Slide 55: Roadmap towards becoming augmented analytics
OUR ROADMAP TOWARDS BECOMING AUGMENTED ~=_— HUGO Boss THE ANALYTICS ROADMAP & KEY DELIVERABLES 01 02 03 GET THE BASICS > CREATE NEW AND > APPLY AI & RIGHT ACTIONABLE INSIGHTS MACHINE LEARNING Single ... providing us Al-based pricing consolidated with a single and markdown data platform... source of
Slide 56: Digital strategy along the value chain
DIGITAL STRATEGY ALONG THE VALUE CHAIN HUGO BOSS MULTIPLE MEASURES WITH FOCUS ON SPEED, PERSONALIZATION AND COSTS PRODUCTION Trend Digitally 3D material Production Personalized Digital show- Data-driven detection developed library & optimization recommendations — room & online pricing & mark- collec
Slide 57: Front end and back end digital capabilities
HUGO BOSS FRONT END BACK END Consumer-facing Analytical, technical, and Product-orientated executional capacity and : Strategy and decision capability making on every aspect METZING METZINGEN PORTO HUGO fice Porro BOSS CAMPUS
Slide 58: Rebalance omnichannel
> REBALANCE OMNICHANNEL HUGO BOSS
Slide 59: Omnichannel journey
HUGO BOSS OMNICHANNEL JOURNEY CLICK AND COLLECT ORDER FROM STORE RETURN & REPLACE FIND IN STORE WHAT'S IN PLACE! CONNECTED RETAIL PARTNER PROGRAMS FRANCHISE INTEGRATION VIRTUAL SELLING SHIP FROM STORE DIGITAL JOURNEY IN STORES NEW WAYS OF CONSUMER INTERACTION WHAT'S NEXT! HUGO BOSS
Slide 60: Exploit digital
EXPLOIT DIGITAL ACTIONS Refresh of hugoboss.com Complete roll-out of hugoboss.com Follow mobile-first approach Boost digital partner business Realize best-in-class customer journey Drive omnichannel sales ENABLERS Use analytics insights for optimization of product and sales Enable data-driven decisi
Slide 61: Boost digital partner business
BOOST DIGITAL PARTNER BUSINESS Partner business to represent more than 50% of digital sales Drive traffic and relevance for BOSS and HUGO on partner websites Flexible and scalable business model on partner-by-partner basis HE WHSs.com_ ff CON.com HB.com €0.48 >€1.0B HUGO BOSS > 50%
Slide 62: Unleash full retail potential
UNLEASH FULL RETAIL POTENTIAL 20> ACTIONS > ENABLERS > ~€ 2 e oF Refresh retail network Dedicated AMBITION Foster experience per sqm store excellence le Optimize retail footprint eee q Defined digital journey Keep outlet sales share Farell actress at ~ 20% ‘ oe Investment in new Increase productivit
Slide 63: Wholesale actions and enablers
ACTIONS > Product and price value is key Regain market share in important categories Strengthen relationship with key partners Implement digital sales organization Roll out new digital showroom ENABLERS Improved brand positioning and focused offer Elevate relationships based on customer and product
Slide 64: Organize for growth
> ORGANIZE FOR GROWTH HUGO BOSS
Slide 65: Expand footprint in Asia/Pacific
HUGO BOSS LOW TEENS \ EXPAND GROWTH FOOTPRINT IN ASIA/ PACIFIC CAGR 2019-2025 SALES SHARE 2025 Further strengthen brand positioning Step up game in physical retail Boost digital business vvvv Strongly expand travel business
Slide 66: Accelerate growth in the Americas
MID- SINGLE-DIGIT GROWTH CAGR 2019-2025 Accelerate 24/7 brand image Leverage casualization trend Optimize store network vvvv Exploit wholesale opportunities ~ SALES SHARE 2025 HUGO BOSS ACCELERATE GROWTH IN THE AMERICAS
Slide 67: Foster leading position in Europe
HUGO BOSS LOW TO MID- SINGLE-DIGIT FOSTER GROWTH LEADING POSITION IN EUROPE* Ek: SALES SHARE 2025 Reclaim wholesale Lead in key product categories vvvv Refresh store fleet Exploit online opportunity
Slide 68: Platform for speed and growth
HUGO BOSS TO BUILD THE PLATFORM FOR SPEED & GROWTH MODULAR & SHORTER FLEXIBLE SUPPLY DIGITAL CREATION PRODUCTION CHAIN'S CREATION & LOGISTICS > DIGITAL TWIN NETWORK > 90% OF ~ 30% KEEP 2025 PRODUCTS REDUCTION UNIT COGS CREATED OF E2E AT 2019 LEVEL DIGITALLY LEAD TIMES > 90% ON-TIME AVAILABILITY
Slide 69: Transformation areas
TRANSFORMATION AREAS LEADING TO FASTER AND MORE EFFICIENT OPERATIONS ACTIVITIES A A Increased E2E transparency A A Faster response to in-season lugclarels Vv Vv Reduced excess inventory A A lncreased resilience HUGO BOSS >> Contained cost of goods sold
Slide 70: Sustainable throughout
> SUSTAINABLE THROUGHOUT HUGO BOSS
Slide 71: Balancing impact with consumer engagement
HUGO BOSS BALANCING IMPACT WITH CONSUMER ENGAGEMENT DELIVER 92, ENTHUSE IMPACT CONSUMERS
Slide 72: Share of responsible styles
HUGO BOSS PRODUCT SHARE OF RESPONSIBLE ShYLES IN SPRING/SUMMER 2022 * RESPONSIBLE styles contain at least 60% more sustainable raw materials in line with our RESPONSIBLE Product Policy while meeting further strict environmental and social requirements for processing, transport and packaging
Slide 73: Vision towards a truly circular business model
HUGO BOSS OUR VISION TOWARDS A TRULY CIRCULAR BUSINESS MODEL 01 Q2 03 TODAY SHORT-TERM LONG-TERM
Slide 74: Planet: climate neutrality
PLANET CLIMATE= NEUTRALITY WITHIN OUR OWN AREA OF RESPONSIBILITY 2045
Slide 75: Measures to reach climate neutrality
MEASURES TO REACH HUGO BOSS ENERGY EFFICIENCY > Optimize transport & logistics ENERGY CONSUMPTION > Use of efficient technologies RENEWABLE ENERGY > Own photovoltaic systems > Certified green electricity COMPENSATION > Compensation through CO, reduction projects
Slide 76: We are wild for the planet
WE ARE WILD FOR THE PLANET BEHAVE AS COLLABORATE WITH — CREATE CORPORATE STRONG CAPSULE CITIZEN PARTNERS COLLECTIONS
Slide 77: Financial ambition 2025
FINANCIAL AMBITION 2025 HUGO BOSS
Slide 78: Execution of strategy to impact financial ambition
HUGO BOSS EXECUTION OF TO IMPACT FINANCIAL AMBITION VALUE CREATION SHIFTS TO ABSOLUTE PROFITABILITY IMPROVEMENTS AND FREE CASH FLOW GENERATION
Slide 79: Group sales ambition 2025
HUGO BOSS AMBITION [eee 2025 a“ cs GROUP SALES | 6% 16% CAGR CAGR 2019 - 2025 2020 - 2025
Slide 80: Growth ambition by brand
HUGO BOSS GROWTH SPRUBIES $ €408 AMBITION BY BRAND € 2.9B €1.9B HBBOSS Menswear BOSS Womenswear MHUGO Licenses 2019 2020 2025
Slide 81: Growth ambition by channel
HUGO BOSS GROWTH SPM SHEE $ €4.08 AMBITION . BY CHANNEL € 2.9B €1.9B MRetail B&M Mi Wholesale B&M Bi Digital Licenses 2019 2020 2025
Slide 82: Growth ambition by region
Slide 83: Bottom-line ambition 2025
Slide 84: Bottom-line development
Slide 85: Gross margin development
Slide 86: Step-up in brand investments
Slide 87: Step-up in digital investments
Slide 88: Store network optimization
Slide 89: Operating overhead leverage
Slide 90: Capital expenditure
Slide 91: Optimization of TNWC
Slide 92: Cash-generative business model
Slide 93: Clear prioritization of cash usage
Slide 94: Agenda
Slide 95: Sustainability
Slide 96: Clearly defined KPIs to measure progress in sustainability
Slide 97: Today. Tomorrow. Always.
Slide 98: Sustainability at the core of everything we do
Slide 99: External recognition of our efforts
Slide 100: Product
PRODUCT
Slide 101: Piñatex sneaker, vegan suit, HUGO x Liam Payne
Slide 102: Product: tomorrow, our main goals by 2025
Slide 103: People & society: taking responsibility
Slide 104: People & society: tomorrow, our main goals by 2025
Slide 105: Environment
ENVIRONMENT
Slide 106: Environment: tomorrow, our main goals
Slide 107: Financial calendar & investor relations contact
FINANCIAL CALENDAR & INVESTOR RELATIONS CONTACT
Slide 108: Forward-looking statements contain risks