Hugo Boss Ag · XETR:BOSS
Hugo Boss — Investor Presentation (June 2005)
44 slides from Hugo Boss's investor presentation, June 2005
Slide 1: Company Presentation June 2005
HUGO BOSS HUGO BOSS Company Presentation June 2005 Page 1
Slide 2: HUGO BOSS Headquarters Metzingen / Germany
HUGO BOSS HUGO BOSS Headquarters Metzingen / Germany Page 2
Slide 3: HUGO BOSS at a glance
HUGO BOSS HUGO BOSS at a glance • HUGO BOSS products value at retail level 3.5 billion EUR (thereof fragrances > 900 million EUR) • Market presence in 102 countries with 3.600 customers and more than 5.000 Points of Sale • Market leadership in high-end men’s fashion • Fast growing in high-end women’
Slide 4: Vision
HUGO BOSS Vision We strive to outperform in the areas of z Product Leadership - Distinct, innovative fashion statement - Value for money products z Market Intimacy - Strong links to customers in all markets - Know how, superior business systems and processes to understand and manage the markets z Op
Slide 5: HUGO BOSS 2004
HUGO BOSS HUGO BOSS 2004 • Net sales EUR 1,168.4 million (+11% vs. prev. year, currency adj. +13%) • Gross margin EUR 631.1 million (+16% vs. prev. year) • Operating result EUR 135.3 million (+14% vs. prev. year) • Earnings before taxes EUR 130.1 million (+8% vs. prev. year) • Net income EUR 88.2 mi
Slide 6: HUGO BOSS 2004
HUGO BOSS HUGO BOSS 2004 • Year-end (12/31) share price1: - common share EUR 23.45 (+47% vs. prev. year) - preferred share EUR 24.50 (+54% vs. prev. year) (DAX increase of +7% vs. prev. year, MDAX increase of +20% vs. prev. year) • Dividend yield2: - High 3.5% (prev. year 4.4%) - Low 5.4% (prev. yea
Slide 7: Sales by region
HUGO BOSS Sales by region 2004 2003 Change Change 2004 currency.adj. sales split EUR mill. EUR mill. in % in % in % Germany 292.2 261.4 12 12 25 Other European countries 519.0 451.5 15 15 44 Americas 205.1 186.7 10 20 18 Asia / other regions 111.7 101.3 10 15 10 Royalties 40.4 53.2 (24) (24) 3 Total
Slide 8: Sales by brand
HUGO BOSS Sales by brand 2004 2003 Change Change currency.adj. EUR mill. EUR mill. in % in % BOSS 1,044.5 941.0 11 13 Man 975.2 890.2 10 12 Woman 69.3 50.8 36 38 HUGO 106.6 94.3 13 14 BALDESSARINI 17.3 18.8 (8) (7) Total 1,168.4 1,054.1 11 13 Page 8
Slide 9: BOSS: Product, Price, Place, Promotion
Product is: • Innovative / Emotional • Quality • Leading “Mens- / Womenswear” Price is: • Competitive • Affordable • Value for money Place is: • Business-driven • Sports-driven • Metropolitan Promotion is: • Innovative / Proactive • Young • Sporty / Class Page 9
Slide 10: BOSS (Man)
BOSS (Man) • Market presence in 102 countries with more than 4,500 points of sale • 13% worldmarket share in high-end Men‘s Apparel Market • Sales split - Businesswear 58% - Leisurewear 42% • In 65 international metropolis we achieve 44% of our net sales with 22% of our points of sale • BOSS Stores
Slide 11: BOSS (Woman)
BOSS (Woman) • Market presence in 58 countries with 650 points of sale • Sales split - Businesswear 62% - Leisurewear 31% - Shoes & Accessories 7% • BOSS Stores achieve 51% of net sales • Integration of shoes & leather accessories into the own business essential for the brands identity and style • F
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BOSS HUGO BOSS Page 14
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Slide 16: HUGO: Product, Price, Place, Promotion
Product is: • Innovative / Trendy • Young / Emotional • Leading “New Menswear / New Womenswear” Price is: • Competitive • Affordable • Value for money Place is: • Fashion-driven • Metropolitan • Emotional Promotion is: • Innovative / Proactive / Cutting Edge • Aggressive / Young • Music / Movie / Pa
Slide 17: HUGO
HUGO • Market presence in in 43 countries with more than 1,000 HUGO Man points of sale and 350 HUGO Woman points of sale • Sales split HUGO Man 76% HUGO Woman 24% • HUGO Stores achieve 20% of net sales • In many markets a leading position in the fashion-forward segment has been achieved Page 17
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Slide 19: BALDESSARINI: Product, Price, Place, Promotion
Product is: • Handicraft • Luxury • Designer-driven Price is: • Competitive • Value for money Place is: • Quality-driven • Metropolitan • Emotional Promotion is: • Sophisticated • Class Page 19
Slide 20: BALDESSARINI
BALDESSARINI • Market presence in 34 countries with more than 125 points of sale • 50% of net sales achieved in stores Page 20
Slide 21: Page 21
Boldepiarin: Balfeprarins BALDESSARINI Page 21
Slide 22: Royalties
HUGO BOSS Royalties • The product groups of shoes and leather accessories were incorporated into the own business • Total royalties from fragrances, eyewear and watches, which continue to be licensed out, increased by 4% Page 22
Slide 23: Royalties
HUGO BOSS Royalties Page 23
Slide 24: Extension of Core Competences
HUGO BOSS Extension of Core Competences Core Competence Extension of Core Competence Businesswear Leisure- and Sportswear Clothing Clothing related Accessories BOSS HUGO Lifestyle World Lifestyle World Menswear Womenswear Clothing Shoes and Leather Accessories Page 24
Slide 25: Key Drivers for Future Growth
HUGO BOSS Key Drivers for Future Growth Category Key Value Factor BOSS Woman Fashion Competence Leisure- and Sportswear Youth & Health HUGO Fashion & Trend BOSS Selection Top-end Competence Shoes and Leather Accessories Style & Identity Directly Operated Stores / Retail Market Competence HUGO BOSS S
Slide 26: HUGO BOSS Stores
HUGO BOSS HUGO BOSS Stores Paris – Champs-Elysées Page 26
Slide 27: HUGO BOSS Stores by region
HUGO BOSS HUGO BOSS Stores by region 2004 2003 Germany 113 97 Other European countries 313 272 Americas 88 81 Asia / Other regions 215 186 Total 729 636 Share of net sales in % 31 30 Thereof Directly Operated Stores 97 81 Share of net sales in % 8 8 Page 27
Slide 28: Sales trends 2005 by region
HUGO BOSS Sales trends 2005 by region 2005 2004 EUR mill. Germany Ò 292.2 Other European Countries Ò 519.0 Americas Ò 205.1 Asia / other regions Ò 111.7 Royalties Ò 40.4 Total Ò 1,168.4 Sales growth of 10% when adjusted for currency effects expected Page 28
Slide 29: Earnings trends 2005
HUGO BOSS Earnings trends 2005 2005 2004 EUR mill. Sales Ò 1,168.4 Gross margin Ò 631.1 in % of sales Ò 54.0 Operating result Ò 135.3 Earnings before taxes Ò 130.1 Net income Ò 88.2 Net income expected to increase to EUR 100 million Page 29
Slide 30: Employees – by region
HUGO BOSS Employees – by region Change Average number of employees 2004 2003 in % Germany 1,747 1,623 8 Other European countries 3,936 2,342 68 Americas 958 878 9 Asia / Other regions 301 267 13 Total 6,942 5,110 36 Page 30
Slide 31: Employees – by function
HUGO BOSS Employees – by function Change Average number of employees 2004 2003 in % Production / Logistics 4,774 3,226 48 Sales / Creation / Marketing 1,649 1,424 16 Administration 519 460 13 Total 6,942 5,110 36 Page 31
Slide 32: Income Statement
HUGO BOSS Income Statement 2004 2003 Change EUR mill. EUR mill. in % Sales 1,168.4 1,054.1 11 Cost of materials incl. changes in inventories (537.3) (508.8) (6) Gross margin 631.1 545.3 16 in % of sales 54.0 51.7 Other operating income and expenses1 (261.7) (224.9) (16) Personnel expenses1 (198.1) (
Slide 33: Analysis of Financial Requirements
HUGO BOSS Analysis of Financial Requirements 2004 2003 Change EUR mill. EUR mill. in % Trade receivables, other assets1 176.7 222.6 (21) Inventories 250.7 214.7 17 Trade payables and other liabilities1 (66.8) (53.0) (26) Provisions (81.2) (74.2) (9) Net current assets 279.4 310.1 (10) Trade receivab
Slide 34: Free Cash Flow
HUGO BOSS Free Cash Flow 2004 2003 Change EUR mill. EUR mill. in % Net income 88.2 82.4 7 Depreciation / amortization1 37.4 32.9 14 Change of pension provisions (5.7) (3.4) (68) Cash flow 119.9 111.9 7 Net additions to fixed assets (78.3) (35.0) Change in remaining net capital invested 9.0 (1.5) Cur
Slide 35: Q1 2005 Results
HUGO BOSS Q1 2005 Results Page 35
Slide 36: Sales by region
HUGO BOSS Sales by region Jan.-March Jan.-March Change Q1/2005 2005 2004 sales split EUR mill. EUR mill. in % in % Germany 83.7 79.6 5 21 Other European countries 213.6 185.7 15 53 Americas 57.7 49.9 16 14 Asia / other regions 41.8 32.7 28 10 Royalties 8.8 9.4 (6) 2 Total 405.6 357.3 14 100 Page 36
Slide 37: Sales by brand
HUGO BOSS Sales by brand Jan.-March Jan.-March Change 2005 2004 EUR mill. EUR mill. in % BOSS 366.8 319.5 15 Man 340.7 300.4 13 Woman 26.1 19.1 37 HUGO 34.0 32.6 4 BALDESSARINI 4.8 5.2 (8) Total 405.6 357.3 14 Page 37
Slide 38: Income Statement
HUGO BOSS Income Statement Jan.-March 2005 Jan.-March 2004 Change EUR mill. EUR mill. in % Sales 405.6 357.3 14 Cost of materials incl. changes in inventories (195.2) (170.2) (15) Gross margin 210.4 187.1 12 in % of sales 51.9 52.4 Other operating income and expenses1 (71.2) (65.5) (9) Personnel exp
Slide 39: Analysis of Financial Requirements
HUGO BOSS Analysis of Financial Requirements March 31, 2005 Dec. 31, 2004 Change EUR mill. EUR mill. in % Trade receivables, other assets1 257.9 176.7 46 Inventories 204.4 250.7 (18) Trade payables and other liabilities1 (45.2) (66.8) 32 Provisions (119.1) (81.2) (47) Net current assets 298.0 279.4
Slide 40: Free Cash Flow
HUGO BOSS Free Cash Flow Jan.-March 2005 Jan.-March 2004 Change EUR mill. EUR mill. in % Net income 51.7 44.3 17 Depreciation / amortization 9.0 8.4 7 Change of pension provisions 0.5 (7.7) Cash flow 61.2 45.0 36 Net additions to fixed assets (17.6) (39.7) 56 Change in remaining net capital invested
Slide 41: Appendix
HUGO BOSS Appendix Page 41
Slide 42: Disclaimer: Forward-looking Statements Contain Risks
HUGO BOSS 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
Slide 43: Financial Calendar 2005
HUGO BOSS Financial Calendar 2005 April 28, 2005 Publication of the First Quarter Report 2005 May 11, 2005 Annual General Meeting in Stuttgart July 28, 2005 Publication of the Interim Report 2005 November 3, 2005 Publication of the Third Quarter Report 2005 Page 43
Slide 44: Address, Contents, Languages
HUGO BOSS Address Contents Languages Annual Report German Interim Report English Financial Presentations www.hugoboss.com Investor Relations Calender Stock Prices Press Releases Page 44