Hugo Boss Ag · XETR:BOSS

Hugo Boss — 9M 2013 Earnings Presentation

34 slides from Hugo Boss's earnings presentation, Oct 31, 2013

  1. Slide 1: HUGO BOSS

    HUGO BOS 5S

  2. Slide 2: HUGO BOSS Nine Months Results 2013

    HUGO BOSS Nine Months Results 2013 Mark Langer (CFO) Metzingen, October 31, 2013 Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 2 / 34

  3. Slide 3: Agenda

    Agenda Operational Highlights Nine Months Results Outlook 2013 Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 3 / 34

  4. Slide 4: Agenda

    Agenda Operational Highlights Nine Months Results Outlook 2013 Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 4 / 34

  5. Slide 5: Solid sales and operating profit increases in the first nine months

    Solid sales and operating profit increases in the first nine months Third quarter results Nine months results Sales EBITDA before special items Sales EBITDA before special items (in EUR million) (in EUR million) (in EUR million) (in EUR million) (+5% fx-adjusted) (+4% fx-adjusted) +2% +5% +3% +4% 64

  6. Slide 6: Integration of BOSS Selection in the core brand BOSS yields positive results

    Integration of BOSS Selection in the core brand BOSS yields positive results Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 6 / 34

  7. Slide 7: Moscow store establishes own retail presence in Russia

    Moscow store establishes own retail presence in Russia BOSS Flagship Store, Moscow Kuznetsky Most Opening: September 2013 Net size: 693 sqm Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 7 / 34

  8. Slide 8: New York flagship store renovated and extended

    New York flagship store renovated and extended BOSS Store, New York Columbus Circle Re-Opening: September 2013 Net size: 1,084 sqm Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 8 / 34

  9. Slide 9: HUGO BOSS celebrates Columbus Circle reopening with video installation

    HUGO BOSS celebrates Columbus Circle reopening with impressive video installation “Anthroposcene” 660 sqm video installation by Marco Brambilla Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 9 / 34

  10. Slide 10: Store base in Shanghai upgraded significantly

    Store base in Shanghai upgraded significantly BOSS Store, Shanghai APM Mall Opening: August 2013 Net size: 482 sqm Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 10 / 34

  11. Slide 11: Concession business model expanded in both the U.S. and Europe

    Concession business model expanded in both the U.S. and Europe Saks, Indianapolis (IN) Saks, Alsterhaus, Columbus (OH) Hamburg Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 11 / 34

  12. Slide 12: Takeovers account for majority of new additions to retail universe

    Takeovers account for majority of new additions to retail universe Number of own retail stores as of September 30, 2013 (December 31, 2012: 840) TOTAL 992 (+152) Openings: 183 thereof takeovers: 110 Closings: 31 EUROPE* 570 (+101) Openings: 108 thereof takeovers: 63 Closings: 7 AMERICAS 196 (+49) AS

  13. Slide 13: Agenda

    Agenda Operational Highlights Nine Months Results Outlook 2013 Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 13 / 34

  14. Slide 14: Improving growth dynamics in Europe

    Improving growth dynamics in Europe ■ Sales momentum picks up over the course of Sales (in EUR million) the quarter 398 423 1,051 1,091 ■ Key markets recover from more difficult first half year ■ Wholesale trading environment continues to be challenging Q3 2012 Q3 2013 9M 2012 9M 2013 in EUR Sales g

  15. Slide 15: Mixed quarterly performance in the Americas

    Mixed quarterly performance in the Americas ■ Tough prior year comparison base Sales (in EUR million) ■ Deteriorating wholesale sentiment 152 143 400 406 ■ Solid own retail performance Q3 2012 Q3 2013 9M 2012 9M 2013 in EUR Sales growth (in %) fx-adjusted Q3 2013 9M 2013 (6) 2 0 4 Conference Call, N

  16. Slide 16: Trends in Asia broadly unchanged compared to first half year

    Trends in Asia broadly unchanged compared to first half year ■ Chinese market environment remains Sales (in EUR million) challenging 82 78 250 247 ■ Robust growth in Hong Kong and Macau ■ Japanese business benefits from repatriation of local demand Q3 2012 Q3 2013 9M 2012 9M 2013 in EUR Sales growth

  17. Slide 17: Retail sales growth accelerates in the third quarter

    Retail sales growth accelerates in the third quarter Sales growth by channel, y-o-y in EUR Sales growth by channel, y-o-y in EUR Q3 2013 fx-adjusted 9M 2013 fx-adjusted (in %) (in %) (10) (8) Wholesale Wholesale (8) (7) 18 15 Retail Retail 23 18 (2) 2 Royalties Royalties (2) 2 2 3 Group Group 5 4 -1

  18. Slide 18: Gross margin expands strongly

    Gross margin expands strongly Third quarter First nine months +340bp +250bp 63.5 61.1 63.6 60.1 Q3 2012 Q3 2013 9M 2012 9M 2013 ■ Distribution channel mix ■ Distribution channel mix ■ Reduction of mark downs ■ Non-recurrence of prior year inventory devaluation effects ■ Non-recurrence of prior year

  19. Slide 19: EBITDA margin increases despite own retail driven operating expense growth

    EBITDA margin increases despite own retail driven operating expense growth in EUR million Net sales 9M 2013 1,783.1 9M 2012 Change in % 1,738.5 3 ■ Own retail expansion main driver of higher selling and distribution Gross profit 1,134.7 1,061.7 7 in % of sales 63.6 61.1 250 bp expenses Selling and d

  20. Slide 20: Mixed regional profitability developments

    Mixed regional profitability developments Segment profit in EUR million 9M 2013 in % of sales 9M 2012 in % of sales Change in % Europe* 401.1 36.7 392.0 37.3 2 Americas 106.3 26.2 106.3 26.6 0 Asia/Pacific 87.1 35.3 87.0 34.8 0 Royalties 32.7 84.2 33.8 88.7 (3) Segment profit operating segments 627.

  21. Slide 21: Working capital efficiency at record levels

    Working capital efficiency at record levels Average trade net working capital as a percentage of sales by quarter (in %) 29.7 30 28.5 27.2 24.6 25 (270)bp 20.8 21.0 20.2 20.1 20.0 20 19.0 18.3 15 10 5 0 Q1 2009 Q2 2009 Q3 2009 Q4 2009 … Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Confere

  22. Slide 22: Broad based trade net working capital improvements

    Broad based trade net working capital improvements Sep. 30, 2013 418 Inventories (6)% (4)% ■ IT infrastructure and (in EUR million) supply chain Sep. 30, 2012 447 improvements fx-adjusted Trade Sep. 30, 2013 242 receivables (8)% (5)% ■ Declining wholesale sales (in EUR million) Sep. 30, 2012 262 fx-

  23. Slide 23: Free cash flow increases despite higher investments

    Free cash flow increases despite higher investments Investments Free cash flow Net debt (in EUR million) (in EUR million) (in EUR million) +63% +3% (27)% 142 102 105 250 182 88 9M 2012 9M 2013 9M 2012 9M 2013 Sep. 30, 2012 Sep. 30, 2013 ■ Increase due to own ■ Trade net working capital ■ Strong redu

  24. Slide 24: Agenda

    Agenda Operational Highlights Nine Months Results Outlook 2013 Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 24 / 34

  25. Slide 25: Full year 2013 targets specified

    Full year 2013 targets specified 2013 Outlook Sales growth (currency-adjusted) Between 6% and 8% Growth of EBITDA before special items 10% to 12% Growth of EBITDA before special items Between 6% and 8% Around EUR 150 million Capex on a comparable basis Own retail network Around 50 net organic openin

  26. Slide 26: Clear strategy execution drives Group results

    Clear strategy execution drives Group results ■ HUGO BOSS has successfully reduced dependence on the wholesale channel ■ Own retail focus deeply embedded across the organization ■ Further extension of brand control key to medium- and long-term growth Conference Call, Nine Months Results 2013 HUGO BO

  27. Slide 27: Questions & Answers

    QUESTIONS & ANSWERS Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 27 / 34

  28. Slide 28: Backup

    BACKUP Conference Call, Nine Months Results 2013 HUGO BOSS © October 31, 2013 28 / 34

  29. Slide 29: Nine months results at a glance

    Nine months results at a glance Sales Gross margin (in EUR million) (in %) +250bp +3% 1.739 +4% 1.783 61.1% 63.6% fx-adjusted 9M 2012 9M 2013 9M 2012 9M 2013 EBITDA before special items Net debt (in EUR million) (in EUR million) +4% (27)% 392 407 250 182 9M 2012 9M 2013 Sep. 30, 2012 Sep. 30, 2013 C

  30. Slide 30: Profit & loss statement

    Profit & loss statement in EUR million Q3 2013 Q3 2012 Change in % 9M 2013 9M 2012 Change in % Net sales 657.9 646.3 2 1,783.1 1,738.5 3 Cost of sales (227.3) (244.9) 7 (613.1) (642.8) 5 Direct selling expenses (12.7) (12.6) (1) (35.3) (34.0) (4) Gross profit 417.9 388.7 8 1,134.7 1,061.7 7 in % of

  31. Slide 31: Retail network

    Retail network Number of own retail stores: +22 (31) +53 992 +108 + 8 China + 49 USA + 7 Australia + 2 Canada + 4 Singapore 840 + 3 Taiwan + 1 Brazil + 31 Spain + 1 Mexiko + 24 UK + 23 Germany + 8 France + 4 Austria + 4 Belgium + 4 Netherlands + 3 Switzerland + 2 Ireland + 2 Italy + 1 Poland + 1 Por

  32. Slide 32: Financial calendar 2013/2014

    Financial calendar 2013/2014 Date Event November 26, 2013 Investor Day, Hong Kong March 13, 2014 Press and Analysts’ Conference May 7, 2014 First Quarter Results May 13, 2014 Annual Shareholders’ Meeting July 31, 2014 First Half Year Results November 4, 2014 Nine Months Results Conference Call, Nine

  33. Slide 33: 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

  34. Slide 34: HUGO BOSS

    HUGO BOS 5S

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