Hugo Boss Ag · XETR:BOSS
Hugo Boss — 9M 2009 Earnings Presentation
43 slides from Hugo Boss's earnings presentation, November 2009
Slide 1: HUGO BOSS
HUGO BOSS
Slide 2: Financial Performance & Strategic Direction: First Nine Months & Third Quarter 2009
Financial Performance & Strategic Direction First Nine Months & Third Quarter 2009 November, 2009 © HUGO BOSS AG – Metzingen, Germany
Slide 3: Agenda
Agenda Strategic direction Highlights Financial Performance Outlook Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 3 / 43
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 Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 5 / 43
Slide 6: Our Heritage – German tailoring perfection meeting finest Italian fabrics
Our Heritage – German tailoring perfection meeting finest Italian fabrics Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 6 / 43
Slide 7: Our Vision is to be one of the leading fashion companies worldwide
Our Vision is to be one of the leading fashion companies worldwide Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 7 / 43
Slide 8: Our portfolio of strong brands
Our portfolio of strong brands – oscillating between elegant, casual, and avant-garde HUGO BOSS Brand Portfolio Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 8 / 43
Slide 9: Strengthen our brand portfolio – Brand architecture old
One of our key objectives is to further strengthen our brand portfolio Brand architecture old Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 9 / 43
Slide 10: Strengthen our brand portfolio – Brand architecture new
One of our key objectives is to further strengthen our brand portfolio Brand architecture new Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 10 / 43
Slide 11: BOSS Selection – Luxury
BOSS Selection – Luxury luxurious modern elegant Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 11 / 43
Slide 12: BOSS Black – The heritage driven core
BOSS Black – The heritage driven core superior premium contemporary Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 12 / 43
Slide 13: BOSS Green – the American & golf inspired sportswear
BOSS Green – the American & golf inspired sportswear sporty relaxed vigorous Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 13 / 43
Slide 14: BOSS Orange – The urban casual wear
BOSS Orange – The urban casual wear urban lighthearted confident Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 14 / 43
Slide 15: HUGO – The fashion spearhead
HUGO – The fashion spearhead edgy progressive individual Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 15 / 43
Slide 16: Key Competitors on corporate level
Key Competitors on corporate level Following competitors have a similar structure as HUGO BOSS on a corporate level (“benchmark competitors”): Armani Burberry Ralph Lauren Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 16 / 43
Slide 17: Market environment – Recap of first nine months 2009
Market environment – Recap of first nine months 2009 Toughest global economic development since decades Key markets under pressure Increasingly challenging business environment Retailers adjusting strategies Changing consumer behavior Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 17 / 43
Slide 18: Market environment – Regional estimations illustrate global impact of crisis
Market environment – Regional estimations illustrate global impact of crisis Europe Luxury Market 2009 -8% EURO Area Economic Output 2009 - 4.2 % Economic Output 2010 + 0.3 % America Luxury Market 2009 - 16 % Asia/Pacific US Economic Output 2009 - 2.7 % Asia Luxury Market 2009 + 10 % US Economic Out
Slide 19: Recap – Scope of performance initiatives
Recap – Scope of performance initiatives 1 Clear differentiation of our brand portfolio 2 Reducing collection complexity 3 Turning retail network into Group’s profit driver 4 Harmonizing sourcing and manufacturing activities 5 Decreasing net working capital to a healthy level 6 Improving fixed cost
Slide 20: Brand/Product excellence – Retail Core Range introduction
Brand/ Product excellence – Retail Core Range introduction Consistent collection presentation across DOS Improving retail performance Supporting franchise partners in the long run Introducing three store packages – S/ M/ L Piloting BOSS Black Menswear incl. Shoes & Leather Acc. Focusing on European
Slide 21: Brand/Product excellence – Leveraging the stock business
Brand/ Product excellence – Leveraging the stock business Strengthening of category business Polo & Knitwear Focusing on polo, knit- wear, jeans, shirts, ties Targeting floor space gains on category floors Jeans Key success factors of chosen categories are: High product efficiency High volume
Slide 22: Brand/Product excellence – Launch of BOSS Kids Wear under new licensee
Brand/ Product excellence – Launch of BOSS Kids Wear under new licensee Launch of BOSS Kids Wear for 2010 Spring/Summer Delivery starting November 2009 Featuring apparel, shoes & accessories, designed for boys and girls aged 0 to 16 First collection with French licensee C.W.F. Children Worldwide Fas
Slide 23: Sales excellence – Strong global monobrand footprint
Sales excellence – Strong global monobrand footprint Pace of expansion reflecting the overall economical situation Focusing on profitable monobrand network expansion Dec. 31, Mar. 31, Jun. 30, Sep. 30, 2008 2009 2009 2009 Number of Stores / Shops 1.389 1.385 1.394 1.369 - Freestanding Stores 477 471
Slide 24: Sales excellence – Successfully entering new distribution channels
Sales excellence – Successfully entering new distribution channels Successful start of online store operations in 2008 in the UK Go-live in NL, FR, DE in second quarter of 2009 Promising sales contribution through double digit growth rates Over 27,000 orders invoiced More than 4.3 million visits Inv
Slide 25: Operational excellence – Global production and sourcing network
Operational excellence – Global production and sourcing network* Merchandise Global purchasing volume of 46.4 % Own Production more than EUR 700 Mio. 26.9 % Expansion of global sourcing Identifying potential new suppliers Subcontracting by process driven tendering procedures 26.7 % Integration of su
Slide 26: Communication excellence – Press coverage highlights
Communication excellence – Press coverage highlights Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 26 / 43
Slide 27: Communication excellence – Movie / VIP highlights
Communication excellence – Movie / VIP highlights HUGO BOSS supports various film productions with fashion. One current example is the best-seller adaption “Desert Flower”. Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 27 / 43
Slide 28: Communication excellence – Art sponsoring highlights
Communication excellence – Art sponsoring highlights HUGO BOSS and the Salzburg Festival cooperate on the opera “Theodora”. Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 28 / 43
Slide 29: Communication excellence – Sport sponsoring highlights
Communication excellence – Sport sponsoring highlights HUGO BOSS’ engagement in sport sponsoring include Formula 1, Sailing and Golf. From left to right: Photoshoot with the Swedish pro golfer Hendrik Stenson in official tournament outfit (Fall/Winter 2009/2010), Alex Thomson and his crew at the pre
Slide 30: Agenda
Agenda Strategic direction Highlights Financial Performance Outlook Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 30 / 43
Slide 31: Development of shares from January to September 30th, 2009
Development of shares from January to September 30th, 2009 In EUR HUGO BOSS 30 Preference share 25 MSCI World 20 Textiles Apparel 15 MDAX 10 05 00 Jan-09 Mar-09 May-09 Jul-09 Sep-09 MDAX / MSCI World indicated based on preferred shares January 2009 Investor Relations Pack Q3 2009 HUGO BOSS © Novembe
Slide 32: Key figures of the first nine months of 2009
Key figures of the first nine months of 2009 in EUR mill. Net sales 1,238.0 - 9% (fx-adj. - 11%) Contribution margin 655.0 - 9% Contribution margin in % of sales 52.9% + 0.3 ppt. EBITDA before special items 224.1 - 13% EBIT before special items 179.3 - 17% Net working capital 311.0 - 34% Cash flow f
Slide 33: Key impacts on the first nine months of 2009
Key impacts on the first nine months of 2009 Uncertainty with regard to future development of global recession led to reduced pre-order volume for A/W 2009 collection by highly cautious wholesale customers Replenishment sales partially absorbed lower pre-order volume Avoiding aggressive pricing stra
Slide 34: Sales by Segments
Sales by Segments in EUR mill. January - September 2009 January - September 2008 Corporate Center: 779.1 (0.0)1 Corporate Center: 918.0 (0.0)1 Royalties: 90.5 (31.3)1 Royalties: 102.3 (31.5)1 Asia/ Pacific: 122.2 (122.2)1 Asia/ Pacific: 124.4 (124.4)1 Americas: 233.4 (232.9)1 Americas: 227.5 (227.5)
Slide 35: Segment Profit
Segment Profit1 in EUR mill. January - September 2009 January - September 2008 Europe2: 98.1 Europe2: 125.0 Corporate Center: 51.7 Corporate Center: 64.0 Royalties: 58.8 Royalties: 57.6 Asia/ Pacific: 8.5 Asia/ Pacific: 13.0 Americas: 6.2 Americas: 12.8 Total segment profit: 224.1 Total segment prof
Slide 36: Sales by Product Segment
Sales by Product Segment Apparel sales suffered due to weak demand with a decline of 9% in the first nine months, while Shoes & Leather Accessories sales declined by 12% Royalties sales almost on prior year level because of successful product launches as well as contracted payments of minimum royalt
Slide 37: Development of operating performance
Development of operating performance Jan. - Sep. Jan. - Sep. Change 3. Quarter 3. Quarter Change in EUR million 2009 2008 in % 2009 2008 in % Sales 1.238,0 1.363,6 -9 450,4 533,0 -15 Cost of sales method applied for Cost of Sales -556,2 -615,4 10 -196,2 -240,2 18 consolidated income statement Variab
Slide 38: Balance sheet as of September 30th 2009
Balance sheet as of September, 30th 2009 In 2009, EUR 100 mill. of the revolving credit line of the syndicated loan could be repaid Assets Liabilities Sep 30th Sep 30th Sep 30th Sep 30th in EUR mill. 2009 2008 2008 2009 Property, plants and equipment and Shareholders‘ equity II 194.7 (2008: 226.5) i
Slide 39: Cash flow development
Cash flow development September 30, September 30, in EUR million 2009 2008 Cash flow from operating activities 229.4 66.9 Cash flow from investing activities (7.2) (74.8) Cash flow from financing activities (195.2) 1.0 Change in cash and cash equivalents 27.4 (7.1) Cash flow from operating activitie
Slide 40: Outlook
Outlook Top line development for 2009 is expected to be in line with the results of the first nine months on a year-on-year comparison Operating profit margin (EBITDA before special items in relation to sales) is expected to be at the previous year's level on a year-on-year comparison Continued focu
Slide 41: Fashion Show BOSS Black – Berlin January 2009
Fashion Show BOSS Black – Berlin January 2009 Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 41 / 43
Slide 42: Contact
Contact Investor Relations Phone: 0049 (0) 7123 94 - 1326 E-Mail: Investor-Relations@hugoboss.com Internet: www.hugoboss.com Investor Relations Pack Q3 2009 HUGO BOSS © November 2009 42 / 43
Slide 43: HUGO BOSS
HUGO BOSS