Hugo Boss Ag · XETR:BOSS
Hugo Boss — H1 2011 Earnings Presentation
37 slides from Hugo Boss's earnings presentation, Jul 28, 2011
Slide 1: HUGO BOSS
HUGO BOS S$
Slide 2: HUGO BOSS First Half Year Results 2011
HUGO BOSS First Half Year Results 2011 Claus-Dietrich Lahrs (CEO) I Mark Langer (CFO) July 28, 2011 Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 2 / 37
Slide 3: Claus-Dietrich Lahrs (CEO)
Claus-Dietrich Lahrs (CEO) Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 3 / 37
Slide 4: Agenda
AGENDA OPERATIONAL HIGHLIGHTS FIRST HALF YEAR RESULTS 2011 OUTLOOK 2011 BACKUP Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 4 / 37
Slide 5: Agenda
AGENDA OPERATIONAL HIGHLIGHTS FIRST HALF YEAR RESULTS 2011 OUTLOOK 2011 BACKUP Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 5 / 37
Slide 6: Record half year results
Record half year results Sales EUR 945 mill. EUR 769 mill. ■ Record top and bottom line results +23% ■ Successful execution of Group strategy H1 2010 H1 2011 EBITDA before special items ■ Sustained growth momentum EUR 195 mill. EUR 123 mill. +58% H1 2010 H1 2011 Conference Call, First Half Year Resu
Slide 7: Fifth consecutive quarter of double-digit growth in the U.S.
Fifth consecutive quarter of double-digit growth in the U.S. Sales / Americas EUR 205 mill. EUR 169 mill. ■ Revenues in the U.S. grow 32% on a currency-adjusted basis +22% ■ Strong wholesale partnerships H1 2010 H1 2011 H1 2011 Sales by Market / Americas ■ U.S. comp store sales up 24% 8% // Central
Slide 8: Rapid expansion in China continues
Rapid expansion in China continues Sales / Asia EUR 143 mill. ■ Sales in China more than double EUR 92 mill. +56% ■ Tier two and three cities focus of store expansion H1 2010 H1 2011 H1 2011 Sales by Market / Asia ■ More than 85 own stores in China by the end of the year 10% // Other (2010: 12%) 59%
Slide 9: Growth in all key European markets
Growth in all key European markets Sales / Europe EUR 576 mill. EUR 490 mill. ■ Selective retail expansion in Germany supplements strong wholesale +18% business H1 2010 H1 2011 ■ Successful Moss Bros integration in the UK further strengthens retail H1 2011 Sales by Market / Europe organization 36% /
Slide 10: Expansion of retail network in all regions
Expansion of retail network in all regions ■ BOSS Sportswear Store // Sylt, Germany Opening date: April 2011 Net Size: 160 m² ■ BOSS Black Shop // Changchun, China Opening date: May 2011 Net Size: 199 m² ■ BOSS Man Store // Palm Beach Gardens, USA Opening date: May 2011 Net Size: 266 m² Conference C
Slide 11: BOSS Selection – Encouraging retailer feedback on new positioning
BOSS Selection – Encouraging retailer feedback on new positioning ■ New brand direction reflected in Autumn 2011 collection ■ Impressive presentation of Spring 2012 collection at Pitti Uomo in Florence ■ Strong reception by wholesale partners Conference Call, First Half Year Results 2011 HUGO BOSS ©
Slide 12: BOSS Black – Growth momentum driven by Men's clothing
BOSS Black – Growth momentum driven by Men’s clothing Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 12 / 37
Slide 13: BOSS Green – Successful partnerships increase brand visibility
BOSS Green – Successful partnerships increase brand visibility Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 13 / 37
Slide 14: HUGO rocks Berlin
HUGO rocks Berlin ■ Presentation of Spring 2012 collection highlight of Berlin Fashion Week ■ New collection strongly underlines avant-garde fashion statement ■ Extensive online coverage Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 14 / 37
Slide 15: BOSS Orange – Conquering the premium casualwear segment
BOSS Orange – Conquering the premium casualwear segment Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 15 / 37
Slide 16: Royalties – Fragrance launches highlight strong product pipeline
Royalties – Fragrance launches highlight strong product pipeline Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 16 / 37
Slide 17: Eyan Allen takes over responsibility for all Womenswear activities
Eyan Allen takes over responsibility for all Womenswear activities Menswear Womenswear BOSS Black Clothing BOSS Black Sportswear Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 17 / 37
Slide 18: Mark Langer (CFO)
Mark Langer (CFO) Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 18 / 37
Slide 19: Agenda
AGENDA OPERATIONAL HIGHLIGHTS FIRST HALF YEAR RESULTS 2011 OUTLOOK 2011 BACKUP Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 19 / 37
Slide 20: Sales by Region – Strong momentum in all regions
SALES BY REGION – Strong momentum in all regions in euro Sales development by region, y-o-y in euro Sales development by region, y-o-y fx adjusted Q2 2011 fx adjusted H1 2011 18% 21% Europe* Europe* 16% 21% 22% 19% Americas Americas 26% 31% 56% 57% Asia/Pacific Asia/Pacific 55% 65% 23% 25% Group Gro
Slide 21: Sales by Distribution Channel – Own retail remains growth engine
SALES BY DISTRIBUTION CHANNEL – Own retail remains growth engine in euro Sales development by distribution channel, in euro Sales development by distribution channel, fx adjusted y-o-y fx adjusted y-o-y H1 2011 Q2 2011 11% 9% Wholesale Wholesale 11% 13% 42% 43% Retail Retail 43% 47% 9% 2% Royalties
Slide 22: Income Statement – Own retail drives gross margin development
INCOME STATEMENT – Own retail drives gross margin development Gross Margin: 63.5% 58.4% ■ Distribution channel mix +5.1 pp ■ Higher portion of full-price sell-throughs in own retail Q2 2010 Q2 2011 ■ Impact from higher sourcing costs 60.6% 57.1% fully mitigated +3.5 pp H1 2010 H1 2011 Conference Cal
Slide 23: Income Statement – EBITDA margin up 460 basis points
INCOME STATEMENT – EBITDA margin up 460 basis points Jan. - June Jan. - June Change in % in EUR million 2011 2010 Net sales 944.6 769.0 23 Gross profit 572.3 439.2 30 in % of sales 60.6 57.1 3.5 pp Selling and distribution expenses (314.1) (262.1) (20) Administration costs and other operating income
Slide 24: Segment Profit – Profitability improvements in all regions
SEGMENT PROFIT – Profitability improvements in all regions Jan. - June in % of sales Jan. - June in % of sales Change in % in EUR million 2011 2010 Europe* 225.3 39.1 175.2 35.8 29 Americas 52.7 25.7 32.1 19.0 64 Asia/Pacific 50.2 35.1 28.0 30.5 79 Royalties 18.7 92.4 16.9 90.9 10 Segment profit ope
Slide 25: Net Working Capital – Stabilization at around 13% of Group sales
NET WORKING CAPITAL – Stabilization at around 13% of Group sales Net working capital as a percentage of sales by quarter (in %) 30% 26.1% 24.4% -2.2 pp 23.1% 20.3% 20% 17.6% 15.5% 14.0% 13.3% 12.9% 13.0% 10% 0% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 ■ Absolut
Slide 26: Net Debt – Strong profit development drives declines
NET DEBT – Strong profit development drives declines -15% ■ Higher capital expenditures reflect 339 ongoing retail expansion ■ Free cash flow generation supported by operating profit development 289 ■ Net financial liabilities decline 15% or EUR 50 million compared to the prior year H1 2010 H1 2011
Slide 27: Agenda
AGENDA OPERATIONAL HIGHLIGHTS FIRST HALF YEAR RESULTS 2011 OUTLOOK 2011 BACKUP Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 27 / 37
Slide 28: Financial Guidance – 2011 targets raised
FINANCIAL GUIDANCE – 2011 targets raised 2011 Outlook Sales growth 15% - 17% (currency-adjusted) Growth of EBITDA before 25% - 30% special items Capex approx. EUR 90 mill. Own retail network Expansion by around 70 stores Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 28 / 37
Slide 29: HUGO BOSS set for continued growth
HUGO BOSS set for continued growth ■ Ongoing strong consumer demand in all regions ■ Positive feedback on new collection presentations ■ Implementation of Project D.R.I.V.E. well under way Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 29 / 37
Slide 30: Questions & Answers
QUESTIONS & ANSWERS Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 30 / 37
Slide 31: Agenda
AGENDA OPERATIONAL HIGHLIGHTS FIRST HALF YEAR RESULTS 2011 OUTLOOK 2011 BACKUP Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 31 / 37
Slide 32: First Half Year Results at a Glance
FIRST HALF YEAR RESULTS AT A GLANCE Sales Gross margin (in EUR million) 945 (in %) 63.5% 900 58.4% 60.6% 60% 57.1% 769 +5.1 pp +23% +3.5 pp 45% 600 405 30% 325 300 +25% 15% 0 0% Q2 2010 Q2 2011 Jan - June 2010 Jan. - June 2011 Q2 2010 Q2 2011 Jan. - June 2010 Jan. - June 2011 EBITDA before special i
Slide 33: Group Income Statement
GROUP INCOME STATEMENT Jan. - June Jan. - June Change Q2 2011 Q2 2010 Change in EUR million 2011 2010 in % in % Net sales 944.6 769.0 23 405.4 324.8 25 Cost of sales (355.3) (315.9) (12) (141.5) (129.4) (9) Direct selling expenses (17.0) (13.9) (22) (6.3) 0.0000 (5.8) (9) Gross profit 572.3 439.2 30
Slide 34: Retail Network – Net increase of 39 stores in first half of 2011
RETAIL NETWORK – Net increase of 39 stores in first half of 2011 Number of own retail stores: ASIA/PACIFIC CLOSINGS AMERICAS 576 EUROPE* + 10 -9 +5 + 7 China + 33 + 4 USA + 3 Japan 537 + 1 Brazil + 18 UK (incl. 15 Moss Bros stores) + 5 Spain + 3 Portugal + 2 France + 2 Netherlands + 1 Germany + 1 It
Slide 35: Financial Calendar 2011
FINANCIAL CALENDAR 2011 Date Event July 28, 2011 First Half Year Results 2011 November 2, 2011 Nine Months Results 2011 November 8, 2011 Investor Day 2011 Conference Call, First Half Year Results 2011 HUGO BOSS © July 28, 2011 35 / 37
Slide 36: Forward-Looking Statements Contain Risks
FORWARD-LOOKING STATEMENTS CONTAIN RISKS This document contains forward-looking statements that reflect management's Date current views with respect to future events. The words "anticipate“, "assume“, "believe", "estimate", "expect", "intend", "may", "plan", "project", "should", and similar expressi
Slide 37: HUGO BOSS
HUGO BOS S$