Hugo Boss AG · XETR:BOSS

Hugo Boss — Q3 2018 Earnings Presentation

27 slides from Hugo Boss's earnings presentation, Nov 6, 2018

  1. Slide 1: HUGO BOSS

    HUGO BOS S$

  2. Slide 2: Third Quarter Results 2018

    Third Quarter Results 2018 Metzingen – November 6, 2018 Christian Stöhr, Head of Investor Relations HUGO BOSS ©

  3. Slide 3: Third Quarter Results 2018

    Third Quarter Results 2018 Metzingen – November 6, 2018 Yves Müller, Chief Financial Officer HUGO BOSS ©

  4. Slide 4: Operational Highlights

    1 I OPERATIONAL HIGHLIGHTS 2 I FINANCIAL DEVELOPMENT 3 I OUTLOOK HUGO BOSS ©

  5. Slide 5: HUGO BOSS and Zalando intensify partnership

    HUGO BOSS and Zalando intensify partnership HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 2018 5

  6. Slide 6: BOSS with strong visibility at New York Fashion Week

    BOSS with strong visibility at New York Fashion Week HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 2018 6

  7. Slide 7: HUGO store openings in major metropolitan areas continue

    HUGO store openings in major metropolitan areas continue HUGO Store HUGO Store LONDON, UK PARIS, FRANCE HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 2018 7

  8. Slide 8: HUGO BOSS included in the DJSI World for the second consecutive year

    HUGO BOSS included in the DJSI World for the second consecutive year HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 2018 8

  9. Slide 9: Financial Development

    1 I OPERATIONAL HIGHLIGHTS 2 I FINANCIAL DEVELOPMENT 3 I OUTLOOK HUGO BOSS ©

  10. Slide 10: HUGO BOSS records solid top-line performance

    HUGO BOSS records solid top-line performance Group sales (in EUR million) +1% fx-adjusted 0% 711 710 Q3 2017 Q3 2018 HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 2018 10

  11. Slide 11: Europe sales decline slightly despite double-digit increase in the UK

    Europe sales decline slightly despite double-digit increase in the UK Europe sales (in EUR million) ■ Sales in the UK up 11% on a currency-adjusted basis (2)% fx-adjusted ■ Stable sales development in the Benelux markets (3)% ■ Business in Germany (-13%) and France (-8%) negatively impacted by deliv

  12. Slide 12: Business in the Americas returns to growth

    Business in the Americas returns to growth Americas sales (in EUR million) ■ U.S. business increases 5% currency-adjusted, reflecting +5% fx-adjusted double-digit sales increases in wholesale ■ U.S. retail records low single-digit comp store sales +5% improvements, driven by double-digit increase in

  13. Slide 13: Strong momentum in Asia/Pacific continues

    Strong momentum in Asia/Pacific continues Asia/Pacific sales (in EUR million) ■ Sales in China up 7% on a currency-adjusted basis +7% fx-adjusted ■ Mainland China records high single-digit growth, supported by double-digit comp store sales improvements +6% ■ Strong comp store sales increases in Hong

  14. Slide 14: Robust comp store sales improvements in the third quarter

    Robust comp store sales improvements in the third quarter Retail sales (in EUR million) +2% fx-adjusted +1% 410 415 Comp store sales growth +3% fx-adjusted Q3 2017 Q3 2018 HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 2018 14

  15. Slide 15: Wholesale sales negatively impacted by delivery shifts

    Wholesale sales negatively impacted by delivery shifts Wholesale sales (in EUR million) ■ Challenging market conditions and delivery shifts weigh on European wholesale business (2)% fx-adjusted ■ Double-digit sales increases in the Americas and in Asia/Pacific (2)% ■ Replenishment business continues

  16. Slide 16: Strategic changes in distribution continue to impact brand sales development

    Strategic changes in distribution continue to impact brand sales development ■ Collection upgrade drives +3% fx-adjusted (11)% fx-adjusted growth at both BOSS Casualwear and Businesswear +2% ■ Strategic distribution changes continue to weigh on HUGO 600 612 sales ■ Menswear sales up 1%, driven by hi

  17. Slide 17: Decline in gross margin reflects challenging market conditions

    Decline in gross margin reflects challenging market conditions Gross margin EBIT (240)bp (20)% 62.5 % 92 EUR million Selling & distribution EBITDA (before special items) expenses (1)% 281 EUR million 126 EUR million (12)% Administration expenses Net income 68 EUR million +1% 66 EUR million (18)% HUG

  18. Slide 18: Strong margin improvement in Asia/Pacific continues

    Strong margin improvement in Asia/Pacific continues Europe Americas Asia/Pacific (in %) (in %) (in %) (300) bp (660) bp +400 bp 33.8 30.8 21.3 17.8 14.7 13.8 *Incl. Middle East and Africa. Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 HUGO BOSS Third Quarter Results 2018 HUGO BOSS © November 6, 20

  19. Slide 19: Nine months sales development supported by 5% increase in comp store sales

    Nine months sales development supported by 5% increase in comp store sales Group sales* (9M 2018) Sales by region* (9M 2018) +4 % +3 % 2,013 EUR million +1% reported Europe +2% reported EBITDA (before special items) (5) +4 % 331 EUR million % Americas (3)% reported Net income +9 % 169 EUR million (9

  20. Slide 20: Higher inventory levels to support sales dynamics in own retail

    Higher inventory levels to support sales dynamics in own retail Inventories Average trade net working capital (in EUR million) as percentage of sales (in %) ■ Inventory levels expected to +20% normalize in the upcoming +20% fx-adjusted +10 bp months 625 19.3 19.4 ■ Trade net working capital up 11%,

  21. Slide 21: Working capital build-up affects free cash flow development

    Working capital build-up affects free cash flow development Capital expenditure Free cash flow (in EUR million) (in EUR million) ■ Higher capital expenditure reflects step-up in store +12% (90)% renovations 136 ■ Free cash flow development to significantly improve in the fourth quarter of 2018 95 85

  22. Slide 22: Outlook

    1 I OPERATIONAL HIGHLIGHTS 2 I FINANCIAL DEVELOPMENT 3 I OUTLOOK HUGO BOSS ©

  23. Slide 23: Sales and earnings outlook 2018 reconfirmed

    Sales and earnings outlook 2018 reconfirmed Group sales Consolidated net income Increase at a low to mid-single digit Increase at a low to mid-single digit percentage rate (fx-adjusted) percentage rate Gross profit margin Capital expenditure Decline of between 50 and 100 basis points EUR 150 million

  24. Slide 24: Strong top- and bottom-line improvements expected in the fourth quarter

    Strong top- and bottom-line improvements expected in the fourth quarter  Sales growth to accelerate in Q4, driven by robust comp store sales increases  Gross margin to benefit from a more favorable pricing mix as well as the annualization of quality investments  Strict focus on cost management to

  25. Slide 25: Questions & Answers

    Questions & Answers HUGO BOSS ©

  26. Slide 26: 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

  27. Slide 27: HUGO BOSS

    HUGO BOS S$

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