Slide 1: Full Year 2018 Results Presentation
1 FULL YEAR 2018 RESULTS PRESENTATION Full Year 2018 Results Presentation March 7, 2019
Slide 2: Full Year 2018 Results Presentation – Presenters
2 FULL YEAR 2018 RESULTS PRESENTATION Full Year 2018 Results Presentation Mark Langer Chief Executive Officer Yves Müller Chief Financial Officer
Slide 3: Agenda
3 FULL YEAR 2018 RESULTS PRESENTATION AGENDA 1 Review 2018 2 Financial highlights 2018/2019 3 Outlook 2019
Slide 4: Agenda
4 FULL YEAR 2018 RESULTS PRESENTATION AGENDA 1 Review 2018 2 Financial highlights 2018/2019 3 Outlook 2019
Slide 5: HUGO BOSS achieves targets in 2018
5 FULL YEAR 2018 RESULTS PRESENTATION HUGO BOSS ACHIEVES TARGETS IN 2018
Slide 6: Acceleration in top-line growth
6 FULL YEAR 2018 RESULTS PRESENTATION Group sales (in EUR million) 4%* 2,796 2,733 2017 2018 Acceleration in top-line growth *Currency-adjusted
Slide 7: Operating income on prior year level
7 FULL YEAR 2018 RESULTS PRESENTATION EBITDA (before special items) (in EUR million) 0% 491 489 2017 2018 Operating income on prior year level
Slide 8: Successful realignment of BOSS and HUGO
8 FULL YEAR 2018 RESULTS PRESENTATION Successful realignment of BOSS and HUGO #iamHUGO brands customers lifestyles #ThisIsBOSS 0
Slide 9: Driving brand excitement: BOSS fashion show in New York City
9 FULL YEAR 2018 RESULTS PRESENTATION Driving brand excitement BOSS fashion show in New York City
Slide 10: Modern mix masters: HUGO fashion show in Berlin
10 FULL YEAR 2018 RESULTS PRESENTATION Modern mix masters HUGO fashion show in Berlin
Slide 11: Own online sales > EUR 100 million in 2018
11 FULL YEAR 2018 RESULTS PRESENTATION Strong momentum in online business continues Online concession model further extended Additional cooperations planned for 2019 and beyond Own online sales > EUR 100 million in 2018
Slide 12: BOSS store concept: successful rollout
12 FULL YEAR 2018 RESULTS PRESENTATION BOSS store concept Successful rollout
Slide 13: HUGO store concept: successful implementation
13 FULL YEAR 2018 RESULTS PRESENTATION HUGO store concept Successful implementation
Slide 14: Digitization of business model in full swing
14 FULL YEAR 2018 RESULTS PRESENTATION Digitally developed HUGO collection successfully launched HUGO digital showroom rolled out across key European markets Omnichannel services enhance shopping experience Digitization of business model in full swing
Slide 15: Agenda
15 FULL YEAR 2018 RESULTS PRESENTATION AGENDA 1 Review 2018 2 Financial highlights 2018/2019 3 Outlook 2019
Slide 16: All regions record currency-adjusted sales growth
16 FULL YEAR 2018 RESULTS PRESENTATION Europe Americas Asia/Pacific (in EUR million) (in EUR million) (in EUR million) +4%* 1,681 1,736 +4%* +7%* 577 574 396 410 2017 2018 2017 2018 2017 2018 All regions record currency-adjusted sales growth *Currency-adjusted
Slide 17: Retail comp store sales grow 5% in 2018
17 FULL YEAR 2018 RESULTS PRESENTATION Retail Wholesale Licenses (in EUR million) (in EUR million) (in EUR million) +4%* 1,732 1,768 +5%* 922 952 (4)%* 79 76 2017 2018 2017 2018 2017 2018 Retail comp store sales grow 5% in 2018 *Currency-adjusted
Slide 18: BOSS with strong performance across major wearing occasions
18 FULL YEAR 2018 RESULTS PRESENTATION BOSS +6%* High single-digit growth in businesswear and casualwear 2,336 2,422 Athleisurewear sales remain broadly stable (4)%* HUGO 397 374 Double-digit growth in casualwear Declines in businesswear reflect strategic changes in distribution 2017 2018 2017 2018
Slide 19: Strategic investments weigh on earnings development
19 FULL YEAR 2018 RESULTS PRESENTATION Strategic investments weigh on earnings development (4) % (90)bp (2) % +4 % 0 % +2 % +2 % Gross margin Selling & distribution Administration EBITDA EBIT Net income expenses expenses (before special items) 65.2% EUR 1,174 MILLION EUR 290 MILLION EUR 489 MILLION
Slide 20: Strong margin improvement in Asia/Pacific
20 FULL YEAR 2018 RESULTS PRESENTATION Europe Americas Asia/Pacific (in %) (in %) (in %) +10bp +120bp 30.9 31.1 (340)bp 24.2 23.0 20.6 17.2 2017 2018 2017 2018 2017 2018 Strong margin improvement in Asia/Pacific
Slide 21: TNWC in % of sales up 110bp reflecting higher inventories
21 FULL YEAR 2018 RESULTS PRESENTATION Inventories Trade receivables Trade payables (in EUR million) (in EUR million) (in EUR million) +14%* 618 537 +2%* +3%* 286 295 208 214 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2018 TNWC in % of sales up 110bp reflecting hi
Slide 22: Capital expenditure with focus on own retail and IT
22 FULL YEAR 2018 RESULTS PRESENTATION Capital expenditure (in EUR million) 155 Capital expenditure 128 Investments in store renovations increase by 36% to EUR 45 million Retail openings Investments in store openings on prior year level at EUR 44 million Retail renovations IT investments grow by 16%
Slide 23: Free cash flow development in line with expectations
23 FULL YEAR 2018 RESULTS PRESENTATION Free cash flow Net financial liabilities (in EUR million) (in EUR million) (42)% Free cash flow 294 Free cash flow impacted by inventory increase and higher capital expenditure 170 >100% Net financial liabilities 22 Net financial liabilities remain at a 7 very
Slide 24: Strong commitment to profit-based dividend policy
24 FULL YEAR 2018 RESULTS PRESENTATION Dividend payout ratio in % of net income (dividend in EUR) 6 100% 93% Dividend 90% 79% 79% Dividend proposal of EUR 2.70 per 5 78% share (+2% versus prior year) 80% 75% 70% Total dividend payment of EUR 186 4 70% million (2017: EUR 183 million) 3.62 3.62 3.34 P
Slide 25: Financial outlook
25 FULL YEAR 2018 RESULTS PRESENTATION Financial outlook 2019 Group sales* Increase at a mid-single-digit percentage rate Gross profit margin Increase of up to 50 basis points EBIT Increase at a high single-digit percentage rate Consolidated net income Increase at a high single-digit percentage rate
Slide 26: IFRS 16 implications
26 FULL YEAR 2018 RESULTS PRESENTATION IFRS 16 implications First-time application of IFRS 16 in 2019 using the modified retrospective approach EBIT low double-digit million EUR Consolidated net income single-digit million EUR Free cash flow low triple-digit million EUR A full description of the exp
Slide 27: Agenda
27 FULL YEAR 2018 RESULTS PRESENTATION AGENDA 1 Review 2018 2 Financial highlights 2018/2019 3 Outlook 2019
Slide 28: Our vision: be the most desirable premium fashion and lifestyle brand
28 FULL YEAR 2018 RESULTS PRESENTATION OUR VISION Personalization and Speed are SPEED BE THE MOST key to achieving our vision DESIRABLE PREMIUM FASHION AND LIFESTYLE BRAND PERSONALIZATION
Slide 29: Personalization and Speed are our priorities along four strategic fields
29 FULL YEAR 2018 RESULTS PRESENTATION Personalization and Speed are our priorities along the four strategic fields of action PERSONALIZATION SPEED REFOCUS THE BRANDS DRIVE THE DIGITAL TRANSFORMATION BRAND DESIRABILITY REFINE THE WAY WE SELL INNOVATE THE WAY WE OPERATE
Slide 30: BOSS fashion show in New York City
30 FULL YEAR 2018 RESULTS PRESENTATION REFOCUS THE BRANDS BOSS fashion show in New York City
Slide 31: PORSCHE x BOSS to drive brand excitement
31 FULL YEAR 2018 RESULTS PRESENTATION REFOCUS THE BRANDS PORSCHE x BOSS to drive brand excitement
Slide 32: HUGO expanding its digital collection
32 FULL YEAR 2018 RESULTS PRESENTATION REFOCUS THE BRANDS HUGO expanding its digital collection
Slide 33: hugoboss.com rollout to additional markets
33 FULL YEAR 2018 RESULTS PRESENTATION REFINE THE WAY WE SELL hugoboss.com rollout to additional markets
Slide 34: BOSS store concept optimization of store network
34 FULL YEAR 2018 RESULTS PRESENTATION REFINE THE WAY WE SELL BOSS store concept optimization of store network
Slide 35: HUGO store network further openings planned for 2019
35 FULL YEAR 2018 RESULTS PRESENTATION REFINE THE WAY WE SELL HUGO store network further openings planned for 2019
Slide 36: Q&A
36 FULL YEAR 2018 RESULTS PRESENTATION Q&A
Slide 37: Forward-looking statements contain risks
37 FULL YEAR 2018 RESULTS PRESENTATION 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”, “projec