Hugo Boss AG · XETR:BOSS

Hugo Boss — Q1 2014 Earnings Presentation

23 slides from Hugo Boss's earnings presentation, May 7, 2014

  1. Slide 1: HUGO BOSS

    HUGO BOSS

  2. Slide 2: HUGO BOSS First Quarter Results 2014

    HUGO BOSS First Quarter Results 2014 Mark Langer (CFO) Metzingen, May 7, 2014 Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 2 / 23

  3. Slide 3: HUGO BOSS off to a good start in 2014

    HUGO BOSS off to a good start in 2014 Sales EBITDA before special items (in EUR million) (in EUR million) +3% (1)% 613 133 131 594 Q1 2013 Q1 2014 Q1 2013 Q1 2014 (+6% fx-adjusted) Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 3 / 23

  4. Slide 4: Increased awareness drives double-digit sales growth in womenswear

    Increased awareness drives double-digit sales growth in womenswear Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 4 / 23

  5. Slide 5: Attractive new store openings across all three regions

    Attractive new store openings across all three regions BOSS Store, Via Frattina, Rome BOSS Store, Canton Road, BOSS Store, Richmond Centre, Hong Kong Vancouver Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 5 / 23

  6. Slide 6: Several shop-in-shop closures mask underlying retail space expansion

    Several shop-in-shop closures mask underlying retail space expansion Number of own retail stores as of March 31, 2014 (December 31, 2013: 1,010) TOTAL 1,007 (-3) Openings: 25 thereof takeovers: 12 Closings: 28 EUROPE* 574 (-2) Openings: 10 thereof takeovers: - Closings: 12 AMERICAS 198 (-2) ASIA/PAC

  7. Slide 7: Good momentum in Europe drives Group sales increase

    Good momentum in Europe drives Group sales increase Sales growth by region, y-o-y in EUR Q1 2014 fx-adjusted (in %) 8 Europe* 8 (7) Americas (2) 0 Asia/Pacific 7 3 Group 6 (8) (4) 0 4 8 ■ UK and Germany strongest growing major markets in Europe ■ Tough market environment weighs on sales development

  8. Slide 8: Like-for-like growth acceleration contributes to robust retail sales development

    Like-for-like growth acceleration contributes to robust retail sales development Sales growth by channel, y-o-y in EUR Q1 2014 fx-adjusted (in %) 16 Retail 19 (8) Wholesale (6) 0 Royalties 0 3 Group 6 (8) (5) 0 5 10 15 20 ■ Europe primary driver of 6% comp store sales increase supporting double-digi

  9. Slide 9: Group gross profit margin expands significantly

    Group gross profit margin expands significantly Gross profit margin (in %) +360bp 65.4 61.8 ■ Broad-based reductions of markdowns ■ Positive distribution channel mix ■ Non-recurrence of prior year inventory devaluation effects Q1 2013 Q1 2014 Conference Call, First Quarter Results 2014 HUGO BOSS © M

  10. Slide 10: Growth investments weigh on short-term margin development

    Growth investments weigh on short-term margin development in EUR million Net sales Q1 2014 612.6 Q1 2013* 593.5 Change in % 3 ■ Investments in own retail, marketing Gross profit 400.6 366.8 9 and logistics main driver of higher in % of sales 65.4 61.8 360 bp selling and distribution expenses Selling

  11. Slide 11: Solid sales growth bolsters margin gains in Europe

    Solid sales growth bolsters margin gains in Europe Segment profit in EUR million Q1 2014 in % of sales Q1 2013* in % of sales Change in % Europe** 136.6 34.6 123.1 33.6 11 Americas 25.0 21.0 29.6 23.2 (16) Asia/Pacific 26.5 30.7 29.2 33.8 (9) Royalties 10.7 82.8 11.0 85.1 (3) Segment profit operatin

  12. Slide 12: Higher working capital position due to inventory increase

    Higher working capital position due to inventory increase Mar 31, 2014 430 ■ Increase reflects mix Inventories shift to own retail +10% +16% (in EUR million) business Mar 31, 2013 391 fx-adjusted Trade Mar 31, 2014 231 ■ Reduction due to (7)% (4)% wholesale sales receivables (in EUR million) decline

  13. Slide 13: Strong free cash flow generation supports further net debt reduction

    Strong free cash flow generation supports further net debt reduction Investments Free cash flow Net debt (in EUR million) (in EUR million) (in EUR million) (32)% >100% (78)% 31 31 124 21 27 5 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Mar 31, 2013 Mar 31, 2014 ■ Moderation due to non- ■ Cash generation ■ Stron

  14. Slide 14: 2014 Outlook

    Full year financial guidance reconfirmed 2014 Outlook Sales growth (currency-adjusted) High single-digit Growth of EBITDA before special items 10% to 12% Growth of EBITDA before special items High single-digit Capex EUR 110 million - EUR 130 million Own retail network Around 50 organic openings Conf

  15. Slide 15: Positive outlook despite ongoing challenges in some key markets

    Positive outlook despite ongoing challenges in some key markets ■ Strength in Europe to continue ■ Uncertainties persist in the US and China ■ Business model transformation and better wholesale business to support accelerated growth over the remainder of 2014 Conference Call, First Quarter Results 2

  16. Slide 16: Questions & Answers

    QUESTIONS & ANSWERS Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 16 / 23

  17. Slide 17: Backup

    BACKUP Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 17 / 23

  18. Slide 18: Profit & loss statement

    Profit & loss statement in EUR million Q1 2014 Q1 2013* Change in % Net sales 612.6 593.5 3 Cost of sales (212.0) (226.7) 6 Gross profit 400.6 366.8 9 in % of sales 65.4 61.8 360 bp Selling and distribution expenses (232.5) (196.5) (18) Administration costs (60.9) (59.0) (3) Other operating income/e

  19. Slide 19: Trade net working capital

    Trade net working capital Average trade net working capital as a percentage of sales by quarter* (in %) 22 20.7 (180)bp 20.1 20.6 19.8 19.7 20 18.6 18.0 17.9 17.9 18 16 14 12 10 8 6 4 2 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 *Certain amounts shown here do not corre

  20. Slide 20: Retail network

    Retail network Number of own retail stores: + 14 (28) + 10 +1 1,007 1,010 + 1 Canada + 12 Australia + 1 Hong Kong + 6 France + 1 Taiwan + 2 Italy + 1 Germany + 1 Turkey Dec 31, 2013 Europe* Americas Asia/Pacific Closings Mar 31, 2014 *Europe incl. Middle East and Africa. Conference Call, First Quart

  21. Slide 21: Financial calendar 2014

    Financial calendar 2014 Date Event May 13, 2014 Annual Shareholders’ Meeting July 31, 2014 First Half Year Results November 4, 2014 Nine Months Results Conference Call, First Quarter Results 2014 HUGO BOSS © May 7, 2014 21 / 23

  22. Slide 22: 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

  23. Slide 23: HUGO BOSS

    HUGO BOSS

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