Hugo Boss Ag · XETR:BOSS
Hugo Boss — H1 2015 Earnings Presentation
26 slides from Hugo Boss's earnings presentation, Aug 4, 2015
Slide 1: HUGO BOSS
HUGO BOS S§S
Slide 2: HUGO BOSS First Half Year Results 2015
HUGO BOSS First Half Year Results 2015 Mark Langer (CFO) Metzingen, August 4, 2015 Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 2
Slide 3: Agenda
Agenda Financial Review First Half Year 2015 Strategy Update Financial Outlook 2015 Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 3
Slide 4: Agenda
Agenda Financial Review First Half Year 2015 Strategy Update Financial Outlook 2015 Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 4
Slide 5: Sales momentum improves across all regions in second quarter
Sales momentum improves across all regions in second quarter Sales growth by region, y-o-y in EUR Sales growth by region, y-o-y in EUR Q2 2015 fx-adjusted H1 2015 fx-adjusted (in %) (in %) 10 6 Europe* Europe* 7 5 26 23 Americas Americas 5 3 24 21 Asia/Pacific Asia/Pacific 5 3 16 12 Group Group 7 5
Slide 6: Like-for-like growth acceleration drives robust retail sales increase in Q2
Like-for-like growth acceleration drives robust retail sales increase in Q2 Sales growth by channel, y-o-y in EUR Sales growth by channel, y-o-y in EUR Q2 2015 fx-adjusted H1 2015 fx-adjusted (in %) (in %) 22 19 Retail Retail 12 9 4 3 Wholesale Wholesale (3) (2) 14 10 Licenses Licenses 15 10 16 12 G
Slide 7: Gross profit margin remains stable in first half year
Gross profit margin remains stable in first half year Gross profit margin development Gross profit margin development (in %) (in %) (20)bp 0 bp 66.7 66.5 66.0 66.0 Q2 2014 Q2 2015 H1 2014 H1 2015 ■ Positive distribution channel mix supports margin development in the first half year ■ Rebates increas
Slide 8: Solid increase of adjusted Group EBITDA despite double-digit cost growth
Solid increase of adjusted Group EBITDA despite double-digit cost growth in EUR million ■ Currency translation effects H1 2015 H1 2014 Change in % impact overall operating Sales 1,314.6 1,171.5 12 expense development Gross profit 867.3 773.6 12 In % of sales 66.0 66.0 0 bp ■ Selling and distribution
Slide 9: Currency translation effects distort regional profitability development
Currency translation effects distort regional profitability development Segment profit in EUR million H1 2015 In % of sales H1 2014 In % of sales Change in % Europe* 244.1 31.6 243.0 33.5 0 Americas 81.6 25.9 61.3 24.0 33 Asia/Pacific 53.4 26.8 50.0 30.3 7 Licenses 21.9 80.2 20.4 82.5 7 Segment prof
Slide 10: Inventory growth moderates significantly compared to previous quarters
Inventory growth moderates significantly compared to previous quarters Jun. 30, 2015 563 ■ Expansion of retail Inventories business +15% +4% (in EUR million) Jun. 30, 2014 488 ■ Effective inventory fx-adjusted management Trade Jun. 30, 2015 211 receivables +1% (6)% ■ Decline in line with wholesale t
Slide 11: Free cash flow declines due to higher capital expenditures
Free cash flow declines due to higher capital expenditures Investments Free cash flow Net debt (in EUR million) (in EUR million) (in EUR million) +67% (24)% +2% 87 96 210 214 73 52 H1 2014 H1 2015 H1 2014 H1 2015 Jun. 30, 2014 Jun. 30, 2015 ■ Increase primarily driven ■ Decline due to higher ■ Incre
Slide 12: Agenda
Agenda Financial Review First Half Year 2015 Strategy Update Financial Outlook 2015 Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 12
Slide 13: 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 14: BOSS brand elevation upgrades the offering and drives retail sales growth
BOSS brand elevation upgrades the offering and drives retail sales growth Future brand positioning LUXURY RETAIL PREMIUM WHOLESALE authentic innovative confident progressive lighthearted dynamic sophisticated contemporary Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 14
Slide 15: Category migration in European wholesale progressing as planned
Category migration in European wholesale progressing as planned ■ HUGO and BOSS Green substitute BOSS Menswear in multi-brand category spaces in wholesale ■ Migration process completed in Germany, roll-out in rest of Europe ongoing ■ Retailer feedback and order intake in line with original expectati
Slide 16: Double-digit growth of BOSS Womenswear partly offset by other brands
Double-digit growth of BOSS Womenswear partly offset by other brands BOSS Womenswear sales up 12% currency-adjusted in H1, overall womenswear +5% Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 16
Slide 17: Iconic BOSS Bespoke Bag launches with Fall/Winter 2015 collection
Iconic BOSS Bespoke Bag launches with Fall/Winter 2015 collection Launch reflects importance of S&A in defining brand identity and driving brand desirability Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 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 1,088 (+47) as of June 30, 2015 Total selling space 147,000 sqm (+4%) (December 31, 2014: 1,041) Openings 86 thereof takeovers 51 Closings 39 Europe* 603 (+8) Openings 31 thereof takeovers 6 Closings 23 Amer
Slide 19: Online sales growth acceleration reflects progress on road to omnichannel
Online sales growth acceleration reflects progress on road to omnichannel Online sales up 34% currency-adjusted in the second quarter, +23% in H1 Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 19
Slide 20: Region Europe to lead the Group's growth in 2015
Region Europe to lead the Group’s growth in 2015 Europe* Americas Asia/Pacific ■ Ongoing strength in the ■ Promotional environment ■ Good momentum in UK, other major markets warrants cautious Australia and Japan improving approach to US wholesale business ■ Focus on brand and ■ Tourism adds to pick
Slide 21: Agenda
Agenda Financial Review First Half Year 2015 Strategy Update Financial Outlook 2015 Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 21
Slide 22: 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 220 million – EUR 240 million Own retail network Around 65 openings (excl. takeovers) Conference Call, First Half Year Results 2015 HUGO BOSS
Slide 23: Focus on long-term growth irrespective of current market challenges
Focus on long-term growth irrespective of current market challenges ■ Solid first half year performance in a tough market environment ■ Group on track for achievement of full year targets ■ HUGO BOSS committed to invest in long-term growth BOSS Store Düsseldorf, Breidenbacher Hof Conference Call, Fi
Slide 24: Questions & Answers
QUESTIONS & ANSWERS Conference Call, First Half Year Results 2015 HUGO BOSS © August 4, 2015 24
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