ANNUAL SHAREHOLDERS' MEETING 2015
Claus-Dietrich Lahrs (CEO and Chairman of the Managing Board)
Stuttgart, May 12, 2015
HUGO BOSS Annual Shareholders' Meeting 2015
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Agenda
Review 2014
Growth strategy 2020
Outlook 2015
HUGO BOSS Annual Shareholders' Meeting 2015
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Agenda
Review 2014
Growth strategy 2020
Outlook 2015
HUGO BOSS Annual Shareholders' Meeting 2015
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HUGO BOSS generates solid sales and earnings growth in 2014
Sales and EBITDA before special items
+5%
(in EUR million)
+6%*
Sales
2.572
EBITDA before special items
2.432
2.346
2.059
1.729
1.562
269
2009
354
2010
470
2011
528
2012
591
565
2013
2014
*+6% currency-adjusted
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Globally balanced market presence secures solid growth
Sales growth (currency-adjusted)
2014
(in %)
Europe*
Americas
+7%
+4%
Asia/Pacific
+7%
Strength of European core markets shields Group from economic turmoil outside Europe
*Including The Middle East and Africa
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Retail remains main driver of sales growth
Sales growth by
distribution channel
2014 over
(in %)
in EUR
currency-adjusted
prior year
Development of sales by distribution
channel
(in %)
(2)
41%
Wholesale
Wholesale
(1)
64%
12
Retail
12
0
Licenses
33%
6
Licenses
Group
6
-5
■
■
0
57%
Retail
0
5
10
15
3%
2%
2009
2014
Negative wholesale trend due to takeovers and industry consolidation
Growth in own retail business underpinned by retail comp store sales growth and expansion
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Continued expansion of own retail activities
Number of own retail stores
as of December 31, 2014
TOTAL
1,041 (+31)
Total selling space
(December 31, 2013: 1,010
140,000 sqm (+4%)
86
New openings
20
of which takeovers
55
Closures
Europe*
595 (+19)
New openings
of which takeovers
Closures
Americas
New openings
of which takeovers
Closures
43
5
24
204 (+4)
242 (+8)
Asia/Pacific
10
New openings
-
of which takeovers
6
Closures
33
15
25
*Including The Middle East and Africa
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Global brand awareness increased by impressive new openings
BOSS store Osaka, Shinsaibashi
HUGO BOSS Annual Shareholders' Meeting 2015
BOSS store Hong Kong, Canton Road
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HUGO BOSS has reached a new level in womenswear
Sales of BOSS Womenswear grow by 18%, total womenswear business up 11%
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HUGO BOSS wins important brand rankings in Germany and China
Germany
China
■
HUGO BOSS wins "Best fashion brand"
award
■
HUGO BOSS receives "Best fashion
label for men" award
■
Independent study conducted by market
research agency GfK
■
Independent study carried out by Hurun
Research Institute
■
Based on commercial success and
emotional impact of the brand
■
Most important brand ranking in the
Chinese luxury goods market
■
Sample: 1,000 consumers resident in
Germany
■
Sample: 376 Chinese citizens with
assets of more than RMB 10 million
(equivalent to about EUR 1.5 million)
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New flat-packed goods distribution center in Filderstadt boosts efficiency
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Slight decline in operating margin despite increased gross profit margin
Sales
Gross profit margin
EUR 2,572 million
66.1%
+120
BP
+6%*
*+6% currency-adjusted.
Operating margin
Net income
(adjusted)
23.0%
EUR 334 million
+0.3%
(20)
BP
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Further significant improvement in key balance sheet metrics
Capital expenditures
Free cash flow
Net debt
(in EUR million)
(in EUR million)
(in EUR million)
+17%
(27)%
185
(37)%
268
57
230
135
36
2013
■
2014
Non-recurrence of prioryear capital spending on
logistics center
HUGO BOSS Annual Shareholders' Meeting 2015
2013
■
31.12.2013
2014
Increase mainly due to
lower capital expenditures
HUGO BOSS ©
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31.12.2014
Increase in FCF
supports decrease in net
debt
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Proposed dividend raises payout ratio to 75%
Dividend and payout ratio
in EUR
4.00
in %*
100
3.62
3.34
3.50
3.12
75%
2.50
80
2.88
3.00
64%
2.00
70%
70%
75%
70%
70
60
2.02
50
40
1.50
1.00
90
30
0.96
20
0.50
10
0.00
0
2009
2010
2011
2012
2013
2014**
Proposal reflects strategy to distribute 60% to 80% of consolidated net income
*As a percentage of net profit attributable to the shareholders of the parent company // **2014: Dividend proposal
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HUGO BOSS share significantly outperforms overall market
Share price performance:
December 31, 2009 – December 31, 2014
(Index: December 31, 2009 = 100)
HUGO BOSS
+ 403%
DAX
+ 65%
MDAX
+ 126%
MSCI Textiles & Apparel
+ 108%
600
500
400
300
200
100
0
Jan-10
Jul-10
Jan-11
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Jan-12
Jul-12
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Jul-13
Jan-14
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Agenda
Review 2014
Growth strategy 2020
Outlook 2015
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Growth strategy 2020 promotes further profitable growth
Elevation of the
Boss core brand
Leverage of
potential in
womenswear as
well as in shoes
and accessories
Expansion of
omnichannel skills
to spur growth in
Group’s own retail
business in both
online and offline
segment
Exploitation of
growth
opportunities in
underrepresented
markets
Building further on operational strengths for optimal strategy implementation
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Increasing brand differentiation supports elevation of BOSS
WHOLESALE
PREMIUM
RETAIL
LUXURY
Future market positioning
authentic
lighthearted
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innovative
dynamic
confident
sophisticated
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progressive
contemporary
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HUGO and BOSS Green replace BOSS core brand in category business
RETAIL
Own stores focus increasingly on BOSS core brand
WHOLESALE
Distribution of BOSS core brand only in shop-in-shops
HUGO and BOSS Green take over category business
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New collections underpin elevation of BOSS Womenswear
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Campaign boosts credibility of BOSS as fashion brand
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Consumers distinguish less and less between online and offline
Inspiration
■
■
Importance of online
increases
Sources of
inspiration: in-store,
ads, media and
social contacts
Research
■
■
+90% research
before purchasing
Use online and
other media
Purchase
■
■
Prefer to buy offline
55-72% of offline
purchases are
prepared by online
research
Source: Google
HUGO BOSS Hauptversammlung 2015
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Previously
Two different gateways
for e-commerce and
brand world
Today
Successful relaunch of hugoboss.com
Seamless integration of
editorial content and
e-commerce offerings
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B2C distribution center creates basis for omnichannel approach
Order processing currently by arvato
Product
development
and procurement
Development
of
online
content
Online
marketing
Creative
design
Online
store
operation
Financial
services/
payment
transactions/
risk/
taxes
Order
management
Logistics/
customs/
returns
management
Call
center
Taken over by HUGO BOSS in spring 2014
■
Conversion of the former flat-packed goods distribution
center into B2C logistics center already under way
■
Main tasks are storage, packaging, returns processing and
product processing
■
Processing of returns from all European markets and distribution
channels
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Improved retail competences support solid growth outlook in Europe
■
Difficult industry conditions and decreasing customer footfall in
many markets
■
Focus on improving the in-store experience, customer service
and customer relationship management
■
Underpenetrated product groups and markets offer attractive
growth opportunities
BOSS store Zurich, Bahnhofstrasse
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Brand control key to success in the Americas
■
■
■
Discount-driven market environment will persist
Key retail-related process enhancements initiated
Focus on improving brand presence in US wholesale business
BOSS store Washington DC, city center
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Progress in China adds to strength in other Asian markets
■
Strengthening the brand’s core in formalwear will underpin further
market share gains in China despite continued market weakness
■
■
Confident outlook for Australia and Japan
Direct control of trend-setting South Korean market will improve
market position
BOSS store Osaka, Shinsaibashi
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Consolidation of own production network completed
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Agenda
Review 2014
Growth strategy 2020
Outlook 2015
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Solid growth in sales and operating profit expected in 2015
Outlook 2015
Sales growth (currency-adjusted)
Mid single-digit percentage rate
Growth in EBITDA before special
items
5% - 7%
Capital expenditures
EUR 200 million – EUR 220 million
About 50 openings
(excluding takeovers)
Own retail network
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HUGO BOSS weathers difficult market conditions in first quarter of 2015
Sales
Gross profit margin
EUR 668 million
65.5%
+10
BP
+9%*
*+3% currency-adjusted.
Retail
EBITDA
(before special items)
EUR 370 million
EUR 132 million
+6%*
+0.2%
*Retail comp store growth +3%,
-20
both currency-adjusted.
BP
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Clear strategy to meet external challenges
■
HUGO BOSS coped well with a weak
market in 2014
■
Diverse opportunities offer numerous
levers for long-term growth
■
2015 another year of solid financial
performance and key strategic progress
BOSS store Tokyo, Omotesando
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Thank you for your attention.
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