Hugo Boss AG · XETR:BOSS

Hugo Boss — Q1 2017 Earnings Presentation

21 slides from Hugo Boss's earnings presentation, May 3, 2017

  1. Slide 1: HUGO BOSS

    HUGO BOSS

  2. Slide 2: First Quarter Results 2017

    First Quarter Results 2017 Mark Langer, CEO Metzingen, May 3, 2017 HUGO BOSS ©

  3. Slide 3: HUGO BOSS starts the year with sales increase

    HUGO BOSS starts the year with sales increase HUGO BOSS Sales (in EUR million) ■ Difficult market environment continues in Q1 1% 1 % fx-adjusted ■ Good performance in core markets UK and China 643 651 ■ Sales growth in Europe and Asia more than compensates for declines in the Americas Q1 2016 Q1 201

  4. Slide 4: UK business drives overall sales increase in Europe

    UK business drives overall sales increase in Europe HUGO BOSS Europe Sales (in EUR million) ■ Different timing of wholesale deliveries supports regional 2% 3 % fx-adjusted sales performance ■ 7% growth in the UK due to solid 402 412 local demand and growing tourist business ■ Sales in Germany up sli

  5. Slide 5: Performance in the Americas continues to suffer from sales declines in the U.S.

    Performance in the Americas continues to suffer from sales declines in the U.S. HUGO BOSS Americas Sales (in EUR million) ■ Performance in the U.S. improves sequentially but sales (4) % (7) % fx-adjusted still down year-on-year ■ Discontinuation of off-price 130 125 business in wholesale has started

  6. Slide 6: Growth in China more than offsets weaker trends in the rest of Asia/Pacific

    Growth in China more than offsets weaker trends in the rest of Asia/Pacific HUGO BOSS Asia/Pacific Sales (in EUR million) ■ Strong volume growth drives double-digit comp store sales 3% 1 % fx-adjusted increase in Mainland China ■ Ongoing weakness in Hong 95 97 Kong and Macau and prior year store clo

  7. Slide 7: Stable sales trends in own retail

    Stable sales trends in own retail BOSS Store Moscow GUM HUGO BOSS Retail Sales (in EUR million) ■ Own retail sales down 3% on a comp store basis 0% 0 % fx-adjusted ■ Trends improve over the course of the quarter 370 372 ■ Overall retail store count remains virtually unchanged BOSS Store Dalian, Chin

  8. Slide 8: Online business set to return to growth after disappointing start to the year

    Online business set to return to growth after disappointing start to the year Search engine optimization • CRM • Mobile • Page load performance • User experience • Merchandising HUGO BOSS First Quarter Results 2017 HUGO BOSS © May 3, 2017

  9. Slide 9: Wholesale business up in the first quarter

    Wholesale business up in the first quarter HUGO BOSS Wholesale Sales (in EUR million) ■ Wholesale sales benefit from delivery shift effect in Europe 3% 2 % fx-adjusted ■ Solid underlying trends in Europe 257 263 ■ Pressure from distribution restructuring in the U.S. expected to fade gradually over t

  10. Slide 10: Fragrances drive growth in license business

    Fragrances drive growth in license business HUGO BOSS License Sales (in EUR million) ■ Fragrance business up double- digits 5% 5 % fx-adjusted ■ Successful launches drive performance 17 16 ■ Watches grow solidly, eyewear more difficult Q1 2016 Q1 2017 HUGO BOSS First Quarter Results 2017 HUGO BOSS ©

  11. Slide 11: HUGO sales grow at strong double-digit rate

    HUGO sales grow at strong double-digit rate BOSS Brand Sales HUGO Brand Sales (in EUR million) (in EUR million) ■ BOSS Green sales increase at (1) % double-digit rate, BOSS core 17 % (1) % fx-adjusted 16 % fx-adjusted brand sales affected by more restrictive distribution in 560 554 97 wholesale 83 ■

  12. Slide 12: Non-recurrence of prior year special items and strict cost discipline drive profit growth

    Non-recurrence of prior year special items and strict cost discipline drive profit growth Gross margin Selling & Distribution expenses 64.4 % 30bp 283 EUR million 1% 3% Administration expenses EBITDA (before special items) 0% 72 EUR million 97 EUR million 4% Special items Net income attributable to

  13. Slide 13: Profitability in Asia/Pacific improves significantly

    Profitability in Asia/Pacific improves significantly Segment earnings In EUR million Q1 2017 In % of sales Q1 2016 In % of sales Change in % Europe* 126.8 30.8 117.9 29.3 8 Americas 15.4 12.3 26.5 20.4 (42) Asia/Pacific 24.7 25.3 17.5 18.4 41 Licenses 14.0 84.9 13.4 85.3 5 Earnings of operating segm

  14. Slide 14: Group inventories continue to be well controlled

    Group inventories continue to be well controlled Average trade net working capital as a percentage of sales (in %) Currency-adjusted inventory growth, y-o-y ■ Trade net working capital 30bp Trade net working capital down 1% in currency- 19.8% 19.8% as a percentage of sales adjusted terms 19.5% 19.6%

  15. Slide 15: Different timing of investments supports free cash flow performance

    Different timing of investments supports free cash flow performance Capital expenditure Free cash flow Net financial liabilities (in EUR million) (in EUR million) (in EUR million) +23% 109 (38)% >100% 89 38 7 24 Q1 2016 Q1 2017 (5) Q1 2016 Q1 2017 Q1 2016 Q1 2017 ■ Decline reflects different timing

  16. Slide 16: Group sales remain largely stable in 2017

    Group sales remain largely stable in 2017 Sales by region* Sales by channel* Increase of up to mid single-digit percentage Europe Stable Retail rate, comp store sales -3% to +3% Decline at a low Slight Americas decline Wholesale to mid single-digit percentage rate Asia/ Slight Solid increase License

  17. Slide 17: Full-year profit outlook reconfirmed

    Full-year profit outlook reconfirmed Sales* Largely stable Gross profit margin Slight increase EBITDA -3% to +3% before special items Low double-digit Consolidated net income percentage rate increase EUR 150 million to Capex EUR 170 million Free cash flow Largely stable * On a currency-adjusted basi

  18. Slide 18: Important milestones of new strategy implementation ahead

    Important milestones of new strategy implementation ahead HUGO fashion show Launch Fall/Winter 2017 collection Combined mens- and womenswear fashion show Includes first elements of at the Pitti Uomo in Florence the new brand strategy, in particular a stronger casualwear offering June 2017 August 201

  19. Slide 19: Q&A

    Q&A HUGO BOSS First Quarter Results 2017 HUGO BOSS © May 3, 2017

  20. Slide 20: 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

  21. Slide 21: HUGO BOSS

    HUGO BOSS

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