Hugo Boss AG · XETR:BOSS
Hugo Boss — Investor Presentation (August 2008)
43 slides from Hugo Boss's investor presentation, August 2008
Slide 1: HUGO BOSS
HUGO BOS $
Slide 2: Presentation to Investors August 2008
Presentation to Investors August 2008
Slide 3: Agenda
Agenda Strategic positioning and key initiatives Record results in 2007 Key developments in the first half of 2008 Outlook 2008 Appendix – Brand Competence at a glance
Slide 4: Strategic positioning and key initiatives
Strategic positioning and key initiatives Presentation to Investors HUGO BOSS © August-2008 4 / 43
Slide 5: HUGO BOSS Profile
HUGO BOSS Profile Market leadership in high-end menswear business Attractive and strong brand name supported by selected fashion events Market presence in 105 countries with about 4,000 customers and close to 6,000 points of sale (apparel only) and a global network of showrooms Fast growing in succe
Slide 6: Presentation to Investors HUGO BOSS © August-2008
Presentation to Investors HUGO BOSS © August-2008 6 / 43
Slide 7: BOSS Black Mens-/Womenswear
BOSS Black Mens-/Womenswear Presentation to Investors HUGO BOSS © August-2008 7 / 43
Slide 8: BOSS Selection Menswear
BOSS Selection Menswear Presentation to Investors HUGO BOSS © August-2008 8 / 43
Slide 9: BOSS Orange Mens-/Womenswear
BOSS Orange Mens-/Womenswear Presentation to Investors HUGO BOSS © August-2008 9 / 43
Slide 10: BOSS Green Menswear
BOSS Green Menswear Presentation to Investors HUGO BOSS © August-2008 10 / 43
Slide 11: HUGO Mens-/Womenswear
HUGO Mens-/Womenswear Presentation to Investors HUGO BOSS © August-2008 11 / 43
Slide 12: Strategic Positioning
Strategic Positioning Shift from a business-outfit-driven menswear company to a lifestyle company with menswear, womenswear, accessories and a strong focus on casualwear 1997 CAGR* 2007 Net Sales: EUR 581 Mill. 11% Net Sales: EUR 1,632 Mill. Businesswear 49% Businesswear 74% Shoes & Leather Accessor
Slide 13: Strategic Positioning
Strategic Positioning Shift from multibrand to monobrand and wholesaling to retailing 1997 CAGR* 2007 Net Sales: EUR 581 Mill. 11% Net Sales: EUR 1,632 Mill. Directly Operated Stores 15% Monobrand Business 39% Franchise 24% Directly Operated Stores 4% Monobrand Business 16% Franchise 12% Royalties 4
Slide 14: Key Initiatives - Products and distribution
Key Initiatives - Products and distribution Accessible luxury positioning with high level of product competence Potential in all established product categories Focus on core Menswear business, disproportionate growth with BOSS Selection Leverage existing distribution structures in Menswear for stron
Slide 15: Key Initiatives – Markets and channels
Key Initiatives – Markets and channels Leverage the brand and worldwide recognition Fast growing in successful markets of North America, Asia and Eastern Europe BOSS Orange Increasing global presence of mono-brand stores as showcase of brand world to customer Strong investment behind expansion of ow
Slide 16: Key Initiatives – Operations and processes
Key Initiatives – Operations and processes Focus on supply chain efficiency and process leadership Successful implementation of Metzingen (DE) Radom (PL) Columbus project which means: Sourcing Office Sourcing Office Shanghai (CN) Istanbul (TR) redefinition of supply chain Coldrerio (CH) processes, e
Slide 17: Sport sponsoring - The HUGO BOSS Yacht at the Barcelona World Race
Sport sponsoring - The HUGO BOSS Yacht at the Barcelona World Race FASHION SHOW JULI 2007––BOSS HUGOORANGE FASHION EVENT BERLIN SHOW WEEK FASHION BARCELONA Presentation to Investors HUGO BOSS © August-2008 17 / 43
Slide 18: Sport sponsoring – Formula 1
Sport sponsoring – Formula 1 Lewis Hamilton: “For me HUGO BOSS is not just a fashion company. It‘s a lifestyle and a partner“ Presentation to Investors HUGO BOSS © August-2008 18 / 43
Slide 19: HUGO BOSS Events - Fascinating events sensualize the brand world
HUGO BOSS Events - Fascinating events sensualize the brand world Presentation to Investors HUGO BOSS © August-2008 19 / 43
Slide 20: Marketing - BOSS ORANGE billboard red square Moscow
Marketing - BOSS ORANGE billboard red square Moscow Presentation to Investors HUGO BOSS © August-2008 20 / 43
Slide 21: Record results in 2007
Record results in 2007 Presentation to Investors HUGO BOSS © August-2008 21 / 43
Slide 22: Record results in 2007 - Sales growth in all regions
Record results in 2007 - Sales growth in all regions Double digit sales growth in all regions on a currency adjusted basis in € million 2007 2006 Change in % in % of Sales Currency-adjusted Germany 361 347 5 22 0 Other European countries 762 682 13 470 Europe 1.124 1.029 10 69 USA 215 196 20 13 0 Ca
Slide 23: Record results in 2007 - Upward trend in all brands
Record results in 2007 - Upward trend in all brands Extended potential in all brands and all product groups Sales by Brand in € million 2007 2006 Change in % in % of Sales BOSS 1,485 1,348 10 091 Menswear 1,276 1,186 8 78 0 Womenswear 209 162 29 13 0 HUGO 144 136 6 9 0 Others 3 11 (75) 00 Total 1,63
Slide 24: Record results in 2007 - Earnings power continued to grow in 2007
Record results in 2007 - Earnings power continued to grow in 2007 All earnings indicators showed double-digit growth Gross profit margin increased by 0.9 p.p. due to higher share of sales via own retail stores, continuing optimization of global production and purchasing structures in € million 2007
Slide 25: Key developments in the first half of 2008
Key developments in the first half of 2008 Presentation to Investors HUGO BOSS © August-2008 25 / 43
Slide 26: Key developments of first half 2008
Key developments of first half 2008 In a challenging market environment, HUGO BOSS increased currency- adjusted sales by 8% to EUR 831 million Continued international expansion of own retail activities by 20 shops to 307 Very good performance in the US and in the emerging markets of Asia and Eastern
Slide 27: Key developments – by brand
Key developments – by brand Good performance among all lines with highly dynamic performance of BOSS Selection and BOSS Green Jan. - June Jan. - June Change Change in % in € million 2008 2007 in % Currency-adjusted BOSS 754 724 4 8 Menswear 644 624 3 7 8 Womenswear 110 100 10 12 7 HUGO 76 67 12 15 1
Slide 28: Key developments – by region
Key developments – by region Solid sales development in growth regions Jan. - June Jan. - June Change in % Change in % In % of Sales in € million 2008 2007 Currency-adjusted Europe 572 559 3 4 69 Americas 144 142 2 14 17 Asia/other regions 93 74 25 33 11 Royalties 21 19 10 10 3 Total 831 794 5 8 100
Slide 29: Key developments – earnings figures
Key developments – earnings figures Good operating performance Jan. - June Jan. - June Change Gross Profit margin rose due to higher in € million 2008 2007 in % Sales 831 794 5 share of sales through own retail and Cost of materials including continuing optimization of global changes in inventories
Slide 30: Key developments – balance sheet items
Key developments – balance sheet items Net Working Capital continues to be influenced by system change and by the extension of business 30 June 2008 Total assets € 1,115 +12% Net working capital € 441 +14% Trade receivables, other assets € 298 +12% Inventories € 382 +20% Trade payables and other lia
Slide 31: Key developments – cash flow
Key developments – cash flow Cash outflow from investing activities was financed by increased inflows from operating activities June 30, June 30, Change in € thousand 2008 2007 in % Cash flow from operations 43 17 100< Net Interest (14) (3) (100<) Cash flow from operating activities 29 14 100< Cash
Slide 32: Outlook 2008
Outlook 2008 Presentation to Investors HUGO BOSS © August-2008 32 / 43
Slide 33: Outlook - outlook for 2008 confirmed
Outlook - outlook for 2008 confirmed Sales growth of 6-8% currency adjusted Further expansion of own retail network with 60 store openings expected for 2008 EBIT is expected to increase by 8-10% excluding one-time effects CAPEX should be around EUR 120 mill. Presentation to Investors HUGO BOSS © Aug
Slide 34: Appendix - Brand Competence at a glance
Appendix - Brand Competence at a glance Presentation to Investors HUGO BOSS © August-2008 34 / 43
Slide 35: BOSS Menswear at a glance
BOSS Menswear at a glance Sales Split Key Takeaways Market presence in 105 countries with Shoes & Leather Accessories 10% around 4,900 points of sale (apparel only) Businesswear 49% Worldwide network of POS supports international business growth Intensified communication of collection concepts incre
Slide 36: BOSS Womenswear at a glance
BOSS Womenswear at a glance Sales Split Key Takeaways Market presence in 64 countries with Shoes & Leather Accessories 17% around 1,450 points of sale (apparel only) Businesswear Covers a market that is twice the size of 46% the comparable menswear segment Gross margin and EBIT margin further improv
Slide 37: HUGO at a glance
HUGO at a glance Sales Split Key Takeaways Market presence in 46 countries Shoes & Leather Accessories 7% with more than 1,200 menswear POS (apparel only) with around 400 womenswear POS (apparel only) Casualwear 36% Competence transfer from formal wear to the leisure segment started Successful start
Slide 38: Shoes & Leather Accessories at a glance
Shoes & Leather Accessories at a glance Sales Split Key Takeaways Representing more than 20% of the Womenswear 20% luxury segment for consumer goods Sharpening the style and identity of HUGO BOSS‘ collections Completing especially the womenswear segments of the brands Focusing on further expansion o
Slide 39: Directly Operated Stores at a glance
Directly Operated Stores at a glance Split by format Key Takeaways Within three years number of DOS grew by 190 own stores to 287 by the end of Freestanding Stores 97 2007 Show-casing the HUGO BOSS lifestyle worlds to the end consumer Delivering first-hand consumer insights on collections DOS concep
Slide 40: Royalties at a glance
Royalties at a glance Current collections Key Takeaways BOSS Black Positive development of eyewear (Safilo) and watches (Movado) Delivery of first jewellery collections with Swarovski Group will start in summer of 2008 BOSS Orange Royalties from fragrances and cosmetics (Procter & Gamble) improved b
Slide 41: Disclaimer
Disclaimer 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 exp
Slide 42: Financial calendar / Contact
Financial calendar / Contact Financial calendar October 30, 2008 Publication of the Third Quarter Report 2008 March 26, 2009 Balance Sheet Press Conference April 30, 2009 First Quarter 2009 May 14, 2009 Shareholders Meeting July 30, 2009 First Half 2009 November 2, 2009 Third Quarter 2009 Contact Ni
Slide 43: HUGO BOSS
HUGO BOS S§