Hugo Boss Ag · XETR:BOSS
Hugo Boss — Q1 2019 Earnings Presentation
20 slides from Hugo Boss's earnings presentation, May 2, 2019
Slide 1: First Quarter 2019 Results Presentation
1 FIRST QUARTER 2019 RESULTS PRESENTATION First Quarter 2019 Results Presentation May 2, 2019
Slide 2: First Quarter 2019 Results Presentation – Yves Müller, CFO
2 FIRST QUARTER 2019 RESULTS PRESENTATION First Quarter 2019 Results Presentation Yves Müller Chief Financial Officer
Slide 3: Focus on strategic growth drivers
3 FIRST QUARTER 2019 RESULTS PRESENTATION RETAIL ONLINE ASIA HUGO PRODUCTIVITY Focus on strategic growth drivers
Slide 4: Strategic growth drivers make further progress
4 FIRST QUARTER 2019 RESULTS PRESENTATION +26%* +3% +4%* +4%* RETAIL ONLINE ASIA HUGO PRODUCTIVITY Strategic growth drivers make further progress *Currency-adjusted
Slide 5: Solid top-line performance in the first quarter
5 FIRST QUARTER 2019 RESULTS PRESENTATION Group sales (in EUR million) 1%* 650 664 Q1 2018 Q1 2019 Solid top-line performance in the first quarter *Currency-adjusted
Slide 6: Americas impacted by challenging market environment
6 FIRST QUARTER 2019 RESULTS PRESENTATION Americas sales (in EUR million) Americas Store traffic negatively impacted (8)%* by softer consumer sentiment and lower tourist purchases 118 115 Delivery shift effect weighs on U.S. wholesale business Mexico and Brazil drive robust top-line momentum in Lati
Slide 7: Europe sales grow despite market uncertainties
7 FIRST QUARTER 2019 RESULTS PRESENTATION Europe sales (in EUR million) Europe 2%* Own retail business records 424 mid-single-digit sales increase 416 Wholesale business declines, reflecting impact from delivery shift effect UK business up 5% currency- adjusted, driven by double-digit improvements i
Slide 8: Asia/Pacific shows ongoing strong momentum
8 FIRST QUARTER 2019 RESULTS PRESENTATION Asia/Pacific sales (in EUR million) Asia/Pacific 4%* Mainland China with double-digit comp store sales improvements 107 100 Hong Kong and Macau impacted by initiatives to optimize store network Strong momentum in Japan and South Korea continues Q1 2018 Q1 20
Slide 9: Retail comp store sales grow 4% in Q1 2019
9 FIRST QUARTER 2019 RESULTS PRESENTATION Retail sales (in EUR million) 3%* 397 378 Q1 2018 Q1 2019 BOSS Store Amsterdam Retail comp store sales grow 4% in Q1 2019 *Currency-adjusted
Slide 10: Wholesale business impacted by delivery shifts
10 FIRST QUARTER 2019 RESULTS PRESENTATION Wholesale (in EUR million) Wholesale (4)%* Delivery shift effect weighs on overall wholesale business 256 250 Replenishment business slightly up versus the prior-year period Online wholesale continues to outperform brick-and-mortar business Q1 2018 Q1 2019
Slide 11: License business with growth across all product categories
11 FIRST QUARTER 2019 RESULTS PRESENTATION License sales License business Fragrance business returns to growth in the first quarter Focus on innovation and product launches drive fragrance business Eyewear and watch business also +8% contribute to sales growth Q1 2019 vs. Q1 2018* License business w
Slide 12: BOSS shows ongoing momentum in casual- and athleisurewear
12 FIRST QUARTER 2019 RESULTS PRESENTATION 0%* 562 571 Q1 2018 Q1 2019 BOSS shows ongoing momentum in casual- and athleisurewear in EUR million *Currency-adjusted
Slide 13: HUGO records double-digit growth in casualwear
13 FIRST QUARTER 2019 RESULTS PRESENTATION 4%* 93 88 Q1 2018 Q1 2019 HUGO records double-digit growth in casualwear in EUR million *Currency-adjusted
Slide 14: Gross margin development negatively impacted by currency effects
14 FIRST QUARTER 2019 RESULTS PRESENTATION Gross margin development negatively impacted by currency effects (4) % (20)bp +6 % +10 % (22) % (21) % Selling & distribution Administration Gross margin EBIT* Net income* expenses* expenses* 63.8% EUR 288MILLION EUR 81MILLION EUR 55MILLION EUR 39MILLION *E
Slide 15: Timing of marketing spend and efficiency measures weigh on EBIT
15 FIRST QUARTER 2019 RESULTS PRESENTATION Timing of marketing spend and efficiency measures weigh on EBIT development in Q1 (in EUR million) 70 55 EBIT Marketing Organization Currency effects EBIT* Q1 2018 (one-off) Q1 2019 *Excluding IFRS 16 impact
Slide 16: Inventory growth continues to decline as planned
16 FIRST QUARTER 2019 RESULTS PRESENTATION Inventory growth y-o-y (in % currency-adjusted) Inventories 20% Ongoing tight focus on inventory management 16% Further normalization of inventory 14% levels expected over the course of the year Increase in TNWC in line with inventory development 9% Q2 2018
Slide 17: Higher capital expenditure weighs on FCF as expected
17 FIRST QUARTER 2019 RESULTS PRESENTATION Capital expenditure Free cash flow* Free cash flow Capital expenditure increases to EUR 30 million, driven by store renovations and IT investments +13 EUR million (13) EUR million FCF decreases to minus EUR 60 million, reflecting the increase in capital exp
Slide 18: HUGO BOSS confirms outlook for full year 2019
18 FIRST QUARTER 2019 RESULTS PRESENTATION HUGO BOSS confirms outlook for full year 2019 Group sales* Increase at a mid-single-digit percentage rate Gross margin Increase of up to 50 basis points EBIT** Increase at a high single-digit percentage rate Consolidated net income** Increase at a high sing
Slide 19: Q&A
19 FIRST QUARTER 2019 RESULTS PRESENTATION Q&A
Slide 20: Forward-looking statements contain risks
20 FIRST QUARTER 2019 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”, “pr