Hugo Boss AG · XETR:BOSS
Hugo Boss — Investor Day (November 2018)
17 slides from Hugo Boss's investor day presentation, Nov 15, 2018
Slide 1: Investor Day Financial outlook
01 INVESTOR DAY – FINANCIAL OUTLOOK Investor Day Financial outlook Yves Müller Chief Financial Officer November 15, 2018
Slide 2: Key sales growth drivers identified across channels, regions, and brands
02 INVESTOR DAY – FINANCIAL OUTLOOK CAGR 5-7%* Group sales (in EUR billion) 4%* 3%* 2.8** 2.7 2.7 ONLINE RETAIL ASIA HUGO PRODUCTIVITY 2016 2017 2018e 2022e Key sales growth drivers identified across channels, regions, and brands = currency-adjusted = based on consensus
Slide 3: Online: Own online business to quadruple until 2022
03 INVESTOR DAY – FINANCIAL OUTLOOK Online sales (in EUR million) x4 Accelerate online concession 1 business Exploit full potential of 2 hugoboss.com 3 Enlarge omnichannel services ~100 76 79 4 Expand social commerce 2016 2017 2018e 2022e Online: Own online business to quadruple until 2022
Slide 4: Retail: Further improving retail sales productivity
04 INVESTOR DAY – FINANCIAL OUTLOOK Retail sales productivity CAGR 4% (in EUR/m2) Accelerate rollout of 1 new store concept 2 Optimize store network ~10,700 3 Enlarge omnichannel services 10,600 10,500 4 Enhance product range 5 Drive retail excellence 2016 2017 2018e 2022e Retail: Further improving
Slide 5: Asia/Pacific: Sales to increase at a double-digit rate
05 INVESTOR DAY – FINANCIAL OUTLOOK 15% 20% Asia/Pacific Asia/Pacific Leverage Chinese demand 1 across the region Expand retail footprint in 2018e 2022e 2 Mainland China 3 Grow travel retail business Leverage digital opportunities 4 via leading online platforms Asia/Pacific: Sales to increase at a d
Slide 6: HUGO: Overproportionate growth in contemporary fashion segment
06 INVESTOR DAY – FINANCIAL OUTLOOK HUGO sales (in EUR million) CAGR >5-7%* Strengthen positioning in 1 contemporary fashion segment 397 380 ~380 Focus on casualwear to benefit 2 from casualization trend Expand store network across 3 key metropolitan cities 4 Leverage social media presence 2016 2017
Slide 7: EBIT margin targeted at 15% in 2022
07 INVESTOR DAY – FINANCIAL OUTLOOK EBIT margin targeted at 15% in 2022 15% ~12%* EBIT margin Gross Efficiency Digital EBIT margin 2018e margin program investments 2022e = based on consensus
Slide 8: Gross margin expansion supported by multiple levers
08 INVESTOR DAY – FINANCIAL OUTLOOK Gross margin expansion supported by multiple levers Channel mix Increase share of controlled distribution Complexity reduction Simplified brand portfolio leads to complexity reduction Full-price sales Reduce share of outlet business Focus on advanced markdown mana
Slide 9: Efficiency program drives operating leverage
09 INVESTOR DAY – FINANCIAL OUTLOOK Retail Improve retail productivity Improve pay-to-sales ratio Renegotiate rental contracts Right-size existing store base Marketing EFFICIENCY Optimize CAPEX-to-sales ratio Grow marketing effectiveness PROGRAM Review effectiveness of marketing mix Measure return o
Slide 10: Efficiency Program to generate total cost savings of ~ EUR 160 million
10 INVESTOR DAY – FINANCIAL OUTLOOK Efficiency Program to generate total cost savings of ~ EUR 160 million ~ EUR 160 million 2019 2020 2021 2022
Slide 11: Continued investments in driving the digitization
11 INVESTOR DAY – FINANCIAL OUTLOOK hugoboss.com 1 Exploit full potential of omnichannel 2 Rollout hugoboss.com website 3 Strengthen IT capabilities 4 Expand digital content teams 5 Enable best-in-class supply chain capabilities Continued investments in driving the digitization
Slide 12: Key drivers of sales growth and EBIT margin expansion
12 INVESTOR DAY – FINANCIAL OUTLOOK Online Retail Productivity Sales Gross Margin Expansion EBIT Growth Margin 5-7% 15% CAGR* Asia Efficiency Program HUGO Key drivers of sales growth and EBIT margin expansion = currency-adjusted * In EUR
Slide 13: EBIT as the future key performance indicator
13 INVESTOR DAY – FINANCIAL OUTLOOK EBIT as the future key performance indicator Enhanced comparability with peers Emphasize focus on capital efficiency Better reflection of operating performance following IFRS 16 implications
Slide 14: Strong free cash flow-generating business model
14 INVESTOR DAY – FINANCIAL OUTLOOK EBIT overproportionate growth Free Cash Flow: TNWC improvements EUR 250-350 million CAPEX efficiencies Strong free cash flow-generating business model
Slide 15: Shareholder return
15 INVESTOR DAY – FINANCIAL OUTLOOK Shareholder return Strong commitment to net profit-based dividend policy 6 100% 93% 90% 5 79% 78% 80% 75% 70% 4 3.62 3.62 60%-80% 70% 3.34 60% 3 2.60 2.65 50% 2 40% 2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2022e Dividend payout ratio in % of net income, di
Slide 16: Financial targets 2022
16 INVESTOR DAY – FINANCIAL OUTLOOK SALES EBIT MARGIN Free Cash Flow EUR 5-7% 15% 250-350 CAGR million Online Retail Gross margin CAPEX Asia HUGO Efficiency Program TNWC Financial targets 2022
Slide 17: Creating shareholder value
17 INVESTOR DAY – FINANCIAL OUTLOOK Creating shareholder value Strategic Strong top- and Highly cash- Focus on Attractive framework bottom-line generative driving capital dividend focused on brand improvements business model efficiency policy desirability