Hugo Boss Ag · XETR:BOSS
Hugo Boss — Q1 2009 Earnings Presentation
35 slides from Hugo Boss's earnings presentation, April 2009
Slide 1: HUGO BOSS
HUGO BOS S$
Slide 2: Financial Performance & Strategic Direction 1st Quarter 2009
Financial Performance & Strategic Direction 1st Quarter 2009 April, 2009 © HUGO BOSS AG – Metzingen, Germany
Slide 3: Agenda
Agenda Strategic direction Highlights Financial Performance Outlook Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 3 / 35
Slide 4: 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 i
Slide 5: Agenda
Agenda Strategic direction Highlights Financial Performance Outlook Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 5 / 35
Slide 6: Market environment
Market environment Toughest global economic development since decades Key markets are under pressure Increasingly challenging business environment Retailers adjusting strategies Consumer behavior is changing Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 6 / 35
Slide 7: Development of shares from January to March 2009
Development of shares from January to March 2009 in EUR 30 25 20 MDAX 15 10 HUGO BOSS Preference share 05 00 MDAX (indicated: Preferred shares January 2009) Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 7 / 35
Slide 8: Despite impact of world economic crisis on sales, HUGO BOSS could maintain the Contribution Margin
Despite impact of world economic crisis on sales, HUGO BOSS could maintain the Contribution Margin due to first signs of restructuring efforts in EUR mill. Net Sales 483.7 -7% (fx-adj.) -5% Contribution Margin 259 -3% Contribution Margin in % of Sales 53.6% +1.3 pp. EBITDA before extraordinary items
Slide 9: Key developments first quarter 2009
Key developments first quarter 2009 Net sales declined due to overall economical development Contribution Margin improved due to continued optimization of global production and sourcing, and a higher share of sales of own retail operations EBITDA before extraordinary items development in comparison
Slide 10: Heritage of HUGO BOSS
Heritage of HUGO BOSS Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 10 / 35
Slide 11: HUGO BOSS has created a portfolio of strong brands
HUGO BOSS has created a portfolio of strong brands oscillating between elegant, casual, and avant-garde High brand awareness ~ 90 - 100% among target consumers High share of buyers within target group ~ 40 - 60% at BOSS Black/Selection/HUGO ~ 15 - 30% at BOSS Orange/Green Financial Performance 1st Q
Slide 12: Strategic growth areas
Strategic growth areas Further leverage our existing strengths to continue growth with BOSS Black in premium men's wear Expand the share of business done with … … BOSS Selection to underline our core competence in men’s wear (full-canvas) … Women’s wear by receiving creative support for BOSS Black …
Slide 13: HUGO BOSS brands and products are highly regarded by consumers and trade partners
HUGO BOSS brands and products are highly regarded by consumers and trade partners "HUGO BOSS is elegant, chic, and modern" "HUGO BOSS has still the best value Consumer for money in suits in the premium market" "HUGO BOSS is one of the best brands in customer communication Consumer and organizing gre
Slide 14: The HUGO BOSS culture is one of our strongest assets
The HUGO BOSS culture is one of our strongest assets "HUGO BOSS is a unique company and this you feel even more once you spent time outside the brand" "HUGO BOSS is like a big family – and a Former Senior Manager family always sticks together" Brand Management "We will be facing turbulent times, but
Slide 15: Performance initiatives launched in second half of 2008
Performance initiatives launched in second half of 2008 anticipating weakening market conditions Delivering sustainable and profitable Performance initiatives and achievements growth by … Most profitable retail formats identified to … optimizing own-retail activities achieve long-term increase in fl
Slide 16: Organizational changes implemented in 2008
Organizational changes implemented in 2008 Redefining organizational structure of headquarters to speed up internal decisions and establish clear responsibilities Introducing regional responsibilities for Europe incl. Africa/Middle East, Americas, and Asia/Pacific to simplify and optimize reporting
Slide 17: Top management structure
Top management structure Management Board COO CEO CFO CBO Dr. Andreas Claus-Dietrich Norbert Christoph Stockert Lahrs Unterharnscheidt Auhagen Extended Board Regional Brand/Creative Brand/Creative Global Management Management Own Production Management Replenishment Europe incl. BOSS Black/ BOSS Oran
Slide 18: Press coverage – Highlights first months 2009
Press coverage – Highlights first months 2009 Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 18 / 35
Slide 19: Celebrity Dressing – Highlights first months 2009
Celebrity Dressing – Highlights first months 2009 Kim Basinger – April 2009 Keanu Reeves – February 2009 Demi Moore – June, 2009 (Premiere “Informers”, L.A.) (Berlinale 2009) (Sundance Film Festival) Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 19 / 35
Slide 20: Art Sponsoring – Highlights first months 2009
Art Sponsoring – Highlights first months 2009 Emily Jacir – Winner of the Emily Jacir’s exhibition – February to April 2009 HUGO BOSS Prize 2008 at the Guggenheim Museum, New York Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 20 / 35
Slide 21: BOSS Selection collection portfolio supplemented by the TAILORED LINE
BOSS Selection collection portfolio supplemented by the TAILORED LINE Luxury Positioning in Luxury / Premium Segment Full-canvas interpretations using contemporary design Premium Superlative quality and craftsmanship Accessible Produced in Germany and Italy Financial Performance 1st Quarter 2009 HUG
Slide 22: Successful Go-live of HUGO BOSS online store in the UK
Successful Go-live of HUGO BOSS online store in September 2008 in the UK January to March 2009 On average over 90.000 visitors per month More than 700 new customers each month Potential of new customer groups Go live in NL, FR, DE in second quarter of 2009 Financial Performance 1st Quarter 2009 HUGO
Slide 23: Agenda
Agenda Strategic direction Highlights Financial Performance Outlook Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 23 / 35
Slide 24: HUGO BOSS sales in first quarter effected by disastrous overall market conditions
HUGO BOSS sales in first quarter effected by disastrous overall market conditions Strongest economic crisis in decades affected sales in all regions Higher share of sales of own retail operations in growth regions Americas and Asia Pacific compensating downturn in wholesale channel operations Royalt
Slide 25: Brand sales in first quarter developed as expected
Brand sales in first quarter developed as expected BOSS sales suffered weak demand with a decline of 6% in the first quarter 2009 (-7% fx-adjusted) HUGO sales increased by 1%, which corresponds to a fx-adjusted sales decline of 1 % Jan. – Mar. Jan. – Mar. Change in % in EUR mill. 2009 2008 fx-adjust
Slide 26: Profit development by segment first quarter 2009
Profit development by segment first quarter 2009 Optimization of the total global purchasing and production processes increase segment profit of corporate center by 5% on a year-on-year comparison Total segment profit in first quarter of 2009: EUR 112.1 million (including consolidation of EUR -2.9 m
Slide 27: Development of operating performance first quarter 2009
Development of operating performance first quarter 2009 Cost of sales method applied Jan. - March Jan. - March Change in EUR million 2009 2008 in % for consolidated income statement Sales 483,7 509,5 (5) Cost of Sales (213,3) (231,9) 8 Increase of contribution margin Variable selling expenses (11,3)
Slide 28: Balance sheet structure first quarter 2009
Balance sheet structure first quarter 2009 Total assets were up 7% to EUR 1.153,3 million, mainly driven by increase in non- current assets based on investment in logistics capacity and own retail store expansion The equity ratio of total assets decreased to 22% due to payment of the special dividen
Slide 29: Cash Flow development first quarter 2009
Cash Flow development first quarter 2009 Operating cash flow was – with 18% - significantly above previous year’s figure due to higher interest payments Cash flow from investing activities decreased due to declining investments and increased proceeds from sales of asset Cash flow from financing acti
Slide 30: Financial Performance 1st Quarter 2009
Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 30 / 35
Slide 31: Outlook for 2009
Outlook for 2009 Outperforming competitors by strengthening market position Several cost initiatives already launched in 2008 delivering a positive impact on cost structure, cash flow and profit margin in 2009 Ensuring Net Working Capital optimization by focused initiatives in trade receivables and
Slide 32: We are preparing for 2010 to unlock the full potential of our brands
We are preparing for 2010 to unlock the full potential of our brands 1 2 3 Intensifying retail channel Strengthening brand Driving process and activities portfolio operational efficiency Increasing share of BOSS Orange Establishing and sales within dynamic relaunch on track for maintaining cos
Slide 33: Fashion Show BOSS Black – Berlin January 2009
Fashion Show BOSS Black – Berlin January 2009 Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 33 / 35
Slide 34: Contact
Contact Investor Relations Phone: 0049 (0) 7123 94 - 1326 E-Mail: Investor-Relations@hugoboss.com Internet: www.hugoboss.com Financial Performance 1st Quarter 2009 HUGO BOSS © April, 2009 34 / 35
Slide 35: HUGO BOSS
HUGO BOS S$