Hugo Boss Ag · XETR:BOSS
Hugo Boss — Q1 2015 Earnings Presentation
26 slides from Hugo Boss's earnings presentation, May 6, 2015
Slide 1: HUGO BOSS
HUGO BOS S§S
Slide 2: HUGO BOSS First Quarter Results 2015
HUGO BOSS First Quarter Results 2015 Claus-Dietrich Lahrs (CEO) | Mark Langer (CFO) Metzingen, May 6, 2015 Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 2
Slide 3: Agenda
Agenda Financial Review First Quarter 2015 Strategic Outlook 2015 Financial Outlook 2015 Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 3
Slide 4: Agenda
Agenda Financial Review First Quarter 2015 Strategic Outlook 2015 Financial Outlook 2015 Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 4
Slide 5: HUGO BOSS grows top line whereas operating profit remains stable
HUGO BOSS grows top line whereas operating profit remains stable Sales EBITDA before special items (in EUR million) (in EUR million) +9% 0% 668 131 132 613 Q1 2014 Q1 2015 Q1 2014 Q1 2015 (+3% fx-adjusted) Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 5
Slide 6: All three regions contribute to Group sales growth
All three regions contribute to Group sales growth Sales growth by region, y-o-y in EUR Q1 2015 fx-adjusted (in %) 4 Europe* 3 21 Americas 2 17 Asia/Pacific 1 9 Group 3 0 4 8 12 16 20 24 ■ UK and Germany strongest growing major markets in Europe ■ US market up 4% currency-adjusted, exceeding overall
Slide 7: Like-for-like growth acceleration drives solid retail sales development
Like-for-like growth acceleration drives solid retail sales development Sales growth by channel, y-o-y in EUR Q1 2015 fx-adjusted (in %) 15 Retail 6 2 Wholesale (2) 6 Licenses 6 9 Group 3 (5) 0 5 10 15 ■ Improved comp store sales growth of 3% contributes to retail sales increase ■ Cautious ordering
Slide 8: Gross profit margin improves moderately
Gross profit margin improves moderately Gross profit margin (in %) +10bp 65.4 65.5 Q1 2014 Q1 2015 ■ Tough comparison base ■ Positive distribution channel mix partly offset by negative inventory valuation effects ■ Neutral impact from rebate management Conference Call, First Quarter Results 2015 HUG
Slide 9: Group EBITDA remains stable compared to the prior year
Group EBITDA remains stable compared to the prior year in EUR million ■ Currency translation Q1 2015 Q1 2014 Change in % effects impact operating Sales 667.5 612.6 9 expense development Gross profit 436.9 400.6 9 ■ Retail and marketing In % of sales 65.5 65.4 10 bp expenses grow at Selling and distr
Slide 10: Currency translation effects distort regional profitability development
Currency translation effects distort regional profitability development Segment profit in EUR million Q1 2015 in % of sales Q1 2014 in % of sales Change in % Europe* 131.3 32.0 136.6 34.6 (4) Americas 32.1 22.4 25.0 21.0 28 Asia/Pacific 31.2 31.0 26.5 30.7 18 Licenses 10.7 78.0 10.7 82.8 0 Segment p
Slide 11: Increase of trade net working capital mainly due to higher inventories
Increase of trade net working capital mainly due to higher inventories ■ Expansion of retail Mar. 31, 2015 539 business Inventories (in EUR million) +25% +12% ■ Slower than Mar. 31, 2014 430 expected sell- fx-adjusted through Trade Mar. 31, 2015 244 ■ Development in line receivables +6% (3)% with wh
Slide 12: Higher investments affect free cash flow development
Higher investments affect free cash flow development Investments Free cash flow Net debt (in EUR million) (in EUR million) (in EUR million) +90% +59% 40 43 (126)% 31 27 21 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Mar. 31, 2014 Mar. 31, 2015 (8) ■ Increase primarily driven by ■ Decline due to lower profits ■
Slide 13: Agenda
Agenda Financial Review First Quarter 2015 Strategic Outlook 2015 Financial Outlook 2015 Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 13
Slide 14: Growth strategy 2020 defines 2015 priorities
Growth strategy 2020 defines 2015 priorities Elevate the Exploit growth Leverage the Build BOSS core opportunities in brand’s potential omnichannel to brand by under- in womenswear drive own retail engaging penetrated and shoes & online and offline consumers markets accessories emotionally Further b
Slide 15: New HUGO and BOSS Green offerings receive strong feedback
New HUGO and BOSS Green offerings receive strong feedback Future brand positioning LUXURY RETAIL PREMIUM WHOLESALE authentic innovative confident progressive lighthearted dynamic sophisticated contemporary Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 15
Slide 16: Category migration one important lever to narrow global price gaps
Category migration one important lever to narrow global price gaps ■ Euro devaluation has widened global price gaps most recently ■ BOSS brand elevation in Europe and the Americas as well as collection upgrades in China will narrow global price gaps ■ Further gradual refinements of global pricing ar
Slide 17: BOSS Womenswear maintains strong momentum
BOSS Womenswear maintains strong momentum BOSS Womenswear sales up 11% currency-adjusted Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 17
Slide 18: Continuous expansion and upgrade of retail store portfolio
Continuous expansion and upgrade of retail store portfolio Number of own retail stores TOTAL 1,060 (+19) as of March 31, 2015 Openings 49 (December 31, 2014: 1,041) thereof takeovers 28 Closings 30 Europe* 596 (+1) Openings 22 thereof takeovers 5 Closings 21 Americas 201 (-3) Asia/Pacific 263 (+21)
Slide 19: Takeovers remain important part of retail expansion
Takeovers remain important part of retail expansion South Korea China ■ Key fashion and trend-setting market in ■ Takeover of last remaining franchise Southeast Asia partner allows full brand control and simplifies distribution structure ■ Takeover effective March 1, 2015 ■ Takeover effective April
Slide 20: Momentum in online business accelerates
Momentum in online business accelerates Online sales up 14% currency-adjusted in the first quarter Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 20
Slide 21: Mixed regional outlook
Mixed regional outlook Europe* Americas Asia/Pacific ■ Challenging market ■ Promotional retail ■ Good momentum in environment persists environment continues Australia and Japan ■ Group outperforms ■ Improving retail execution ■ Chinese market overall market remains challenging ■ Upgrade of logistica
Slide 22: Agenda
Agenda Financial Review First Quarter 2015 Strategic Outlook 2015 Financial Outlook 2015 Conference Call, First Quarter Results 2015 HUGO BOSS © May 6, 2015 22
Slide 23: 2015 financial outlook reconfirmed
2015 financial outlook reconfirmed Outlook 2015 Sales growth (currency-adjusted) Mid-single-digit rate Growth of 5% - 7% EBITDA before special items Capex EUR 200 million – EUR 220 million Own retail network Around 50 openings (excl. takeovers) Conference Call, First Quarter Results 2015 HUGO BOSS ©
Slide 24: HUGO BOSS to be one of the winning brands in a tough environment
HUGO BOSS to be one of the winning brands in a tough environment ■ Apparel industry in tough competition for share of consumer’s wallet ■ Maximization of emotional brand appeal a key focus ■ Retail excellence and omnichannel to increasingly differentiate HUGO BOSS from competitors BOSS Store Tokyo,
Slide 25: 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
Slide 26: HUGO BOSS
HUGO BOS S§S