1 INVESTOR MEETING PRESENTATION
INVESTOR MEETING PRESENTATION May – August 2021 2 INVESTOR MEETING PRESENTATION
Company Overview
THECOMPANY
KEYPRIORITIES SUSTAINABILITY
One of the leading companies in Create Sustainability the premium apparel segment brand heat & product desire as integral part of operations
Two iconic brands Exploit Clearly defined BOSS & HUGO global sales opportunities goals & KPI‘s
Group sales of Drive Top ranked EUR 2 billion in 2020 operational excellence in DJSI World / Europe 3 INVESTOR MEETING PRESENTATION
AGENDA
1 About HUGO BOSS
2 Q1/2021 Results
3 Strategic Priorities
4 Sustainability 4 INVESTOR MEETING PRESENTATION
HUGO BOSS A GLOBAL FASHION & LIFESTYLE COMPANY 5 INVESTOR MEETING PRESENTATION
OUR BRANDS 6 INVESTOR MEETING PRESENTATION
BOSS DRESSES THE DRIVE BRAND VALUES Status-oriented customer in the upper MASCULINITY/FEMININITY premium segment who wants to dress in a SEXINESS modern, sophisticated way. 85% From classic business outfits to a wide range SUCCESS of modern and stylish leisure looks. STYLE of Group sales PRECISION 7 INVESTOR MEETING PRESENTATION
HUGO IS THE PLATFORM OF BRAND VALUES SELF-EXPRESSION Expressive customer in the premium segment. GLOBALLY ENGAGED Casual- and businesswear collections in the 15% contemporary fashion segment characterized ALWAYS CURIOUS by progressive designs. of Group sales AUTHENTICALLY EXPRESSIVE 8 INVESTOR MEETING PRESENTATION
Global sales distribution across 127 countries
SHARE OF GROUP SALES*
EUROPE AMERICAS ASIA/PACIFIC (INCL. MIDDLE EAST/AFRICA)
63% 16% 18%
GERMANY: 14% U.S.: 11% CHINA: 11%
GREAT BRITAIN: 13% CANADA: 2% OCEANIA: 2%
FRANCE: 6% CENTRAL & SOUTH JAPAN: 2% AMERICA: 3% BENELUX: 5% OTHER: 3%
OTHER: 25%
* AS OF 2020; 3% LICENSES 9 INVESTOR MEETING PRESENTATION
Distribution via own retail and wholesale channel
3% LICENSES 11% ONLINE RETAIL 66% RETAIL 31% WHOLESALE 55% B&M RETAIL FY2020
Own online sales account for 11% of Group sales in 2020, up from 5% in 2019 10 INVESTOR MEETING PRESENTATION
Well diversified store portfolio across regions*
Freestanding stores 212
Shop-in-Shops 302
Outlets 75 Europe 589 Freestanding stores 92
Americas Shop-in-Shops 105 251 Asia/Pacific Outlets 54 317
Freestanding stores 141 Group 1,157 Shop-in-Shops 105 Outlets 71
GROUP 445 512 200 Freestanding stores Shop-in-Shops Outlets *AS OF 30/12/2020 11 INVESTOR MEETING PRESENTATION
Sourcing and production focused on Europe and Asia*
44% ASIA 6% NORTH AFRICA 12% WESTERN EUROPE 36% EASTERN EUROPE 01% AMERICAS
17% OWN PRODUCTION
83% THIRD PARTY PRODUCTION
* NUMBERS AS OF 2020, IN VALUE TERMS 12 INVESTOR MEETING PRESENTATION
AGENDA
1 About HUGO BOSS
2 Q1/2021 Results
3 Strategic Priorities
4 Sustainability 13 INVESTOR MEETING PRESENTATION
On average ~25% of global store network closed in the first quarter
100%
75%
50% STORE OPENING RATE*
25%
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 0% ~85% ~50% ~95% ~85% ~75%
* NUMBER OF OWN RETAIL POINTS OF SALE NOT AFFECTED BY TEMPORARY CLOSINGS DIVIDED BY TOTAL NUMBER OF OWN RETAIL POINTS OF SALE 14 INVESTOR MEETING PRESENTATION
Solid start to the year as business recovery continues
Q1 2021
EUR 497 MILLION
(8)% CURRENCY-ADJUSTED 15 INVESTOR MEETING PRESENTATION
EUROPE SALES** * (17)%
Almost 50% of own retail stores temporarily closed in the first quarter
Germany and the UK record mid-double-digit sales declines in own retail, reflecting persistent lockdowns
Strong momentum in Russia and Middle East with low to mid-double-digit sales growth
Extended lockdowns weigh on business recovery in Europe * CURRENCY-ADJUSTED ** INCL. MIDDLE EAST AND AFRICA 16 INVESTOR MEETING PRESENTATION
AMERICAS SALES * (11)%
Business in the U.S. with noticeable recovery reflecting a robust rebound in consumer sentiment
Persistent store closures continue to weigh on business in Canada
Latin America returns to pre-COVID-19 levels in the first quarter
SequentialSequentialRecovery in improvementsimprovements the Americas inincontinues thethe U.S.U.S. as drivedrivemomentum recoveryrecovery in the inin thetheU.S. AmericasAmericas further improves
* CURRENCY-ADJUSTED 17 INVESTOR MEETING PRESENTATION
ASIA/PACIFIC SALES * +39%
Sales in mainland China almost double supported by robust local demand in Q1
While business in Japan continues its gradual recovery, Australia and South Korea return to growth in Q1
Absence of international tourism continues to weigh on Hong Kong and Singapore
Asia/Pacific returns to growth driven by ongoing strong momentum in mainland China
* CURRENCY-ADJUSTED 18 INVESTOR MEETING PRESENTATION
Q1 2021
+72%
CURRENCY-ADJUSTED
Momentum in online business strongly accelerates in the first quarter 19 INVESTOR MEETING PRESENTATION
Wholesale business benefits from robust order intake and delivery shift effects
OWN RETAIL
(14)%*
WHOLESALE
+1%*
* CURRENCY-ADJUSTED 20 INVESTOR MEETING PRESENTATION
(8)% (6)% BOSS
HUGO
Casualwear returns to mid-single-digit growth in Q1
*TOTAL BRAND SALES; CURRENCY-ADJUSTED 21 INVESTOR MEETING PRESENTATION
HUGO BOSS records positive EBIT in the first quarter
Gross margin Selling & distribution Administration EBIT Net income expenses expenses
EUR EUR EUR EUR 60.4 231 68 1 (8)
% MILLION MILLION MILLION MILLION
62.9% EUR 288 MILLION EUR 75 MILLION EUR (14) MILLION EUR (18) MILLION
Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q1 2020 22 INVESTOR MEETING PRESENTATION
Trade net working capital improvement supports free cash flow development
TNWC Capital expenditure Free cash flow
March 31, 2021 January - March January - March Inventories remain stable reflecting EUR EUR EUR ongoing tight management
550 16 (30) Lower capital expenditure reflecting
MILLION MILLION MILLION continued prudent approach in light of persistent uncertainties
Net financial liabilities decline 5% to EUR 221 million*
EUR 592 MILLION EUR 18 MILLION EUR (86) MILLION
March 31, 2020 Jan - March 2020 Jan - March 2020
*Excluding IFRS 16 23 INVESTOR MEETING PRESENTATION
Outlook
GLOBAL BUSINESS EXPECTED TO RECOVER NOTICEABLY IN 2021 24 INVESTOR MEETING PRESENTATION
AGENDA
1 About HUGO BOSS
2 Q1/2021 Results
3 Strategic Priorities
4 Sustainability 25 INVESTOR MEETING PRESENTATION
BE THE MOST DESIRABLE PREMIUM VISION FASHION & LIFESTYLE BRAND 26 INVESTOR MEETING PRESENTATION
Our strategic priorities for future growth
CREATE E X P L O I T D R I V E
BRAND HEAT & GLOBAL SALES OPERATIONAL PRODUCT DESIRE OPPORTUNITIES EXCELLENCE 27 INVESTOR MEETING PRESENTATION
EMOTIONALIZE THE BRANDS Emotionalize the brands and deliver inspiring storytelling
DOMINATE CLOTHING Leverage strengths in clothing segment CREATE to increase market share PUSH BRAND HEAT & CASUALIZATION Leverage trend towards casualization and PRODUCT DESIRE exploit opportunities 28 INVESTOR MEETING PRESENTATION
Marketing initiatives to drive brand desirability
EVENTS PERSONALITIES COLLABORATIONS 29 INVESTOR MEETING PRESENTATION
Community engagement on social media further accelerates
AVERAGE NUMBER OF INSTAGRAM LIKES PER POST FOLLOWERS
MORE THAN GROW
double2x doubledouble-digit-dgi
2020 VS. 2019 2020 VS. 2019 30 INVESTOR MEETING PRESENTATION
Serving our customers across all wearing occasions 31 INVESTOR MEETING PRESENTATION
New interpretation of formalwear with strong focus on casual tailoring
BROAD BOMBER CASUAL SUIT TAILORING 32 INVESTOR MEETING PRESENTATION
Chris Hemsworth is the global face of BOSS 33 INVESTOR MEETING PRESENTATION
BOSS x AJBXNG gains further momentum
FATHER‘S DAY CAMPAIGN 34 INVESTOR MEETING PRESENTATION
Successful launch of exclusive BOSS x NBA capsule 35 INVESTOR MEETING PRESENTATION
Successful launch of BOSS x RUSSELL ATHLETIC 36 INVESTOR MEETING PRESENTATION
HUGO x Liam Payne supports “Cotton made in Africa” 37 INVESTOR MEETING PRESENTATION
LEVERAGE ONLINE & OC EXPERIENCE
#onlinefirst: Aggressively invest in online growth and omnichannel services
EXPLOIT EXPLOIT GROWTH POTENTIAL IN CHINA
China first: Elevate product offering, increase GLOBAL SALES brand hype, push retail productivity, increase OPPORTUNITIES space and grow online 38 INVESTOR MEETING PRESENTATION
Exploiting the full potential of mainland China
Momentum continues into 2021, supported by strong activation around Chinese New Year
Local brand ambassadors drive awareness among younger customers
Leveraging full potential through moderate space expansion and strong focus on online
GROUP SALES CAGR CONTROLLED “TAILORED” 2016-2020 DISTRIBUTION SHARE
10% +8% >95%* >30%* BASED on FY SALES ML CHINA OWN RETAIL OF 2020 SHARE PRODUCT MIX
* AS OF 2020 39 INVESTOR MEETING PRESENTATION
Leveraging sales opportunities in mainland China
Robust retail footprint Concession business on Tmall and JD 1 across tier 1 and tier 2 cities 1 with strong double-digit growth
2 White spot opportunities, 2 Tapping in to additional e-com opportunities especially in tier 2 and tier 3 cities to support momentum
Upsizing opportunities Implementation of WeChat Work 3 in prime locations 3 to exploit social commerce 40 INVESTOR MEETING PRESENTATION
Well on track to achieve 2022 online sales target
Online sales to grow to more than EUR 400 million by 2022 x4 Online sales (in EUR million)
>400 EUR 300 million mark to be crossed before year-end 2021
221 151 110 CAGR of >40% achieved 76 79 between 2018 and 2020
2016 2017 2018 2019 2020 2022e 41 INVESTOR MEETING PRESENTATION
Geographical rollout of hugoboss.com in full swing
hugoboss.com hugoboss.com markets 2020 markets 2021
At the end of Q1 2021, hugoboss.com is available in 59 markets 42 INVESTOR MEETING PRESENTATION
LEVERAGE SCALE AT OPERATIONS
Implement a lean & flexible supply chain
Drive digitalization across all Operations activities
DRIVE Continue simplification journey Realize COGS savings through sourcing OPERATIONAL optimization without compromising quality EXCELLENCE 43 INVESTOR MEETING PRESENTATION
AGENDA
1 About HUGO BOSS
2 Q1/2021 Results
3 Strategic Priorities
4 Sustainability 44 INVESTOR MEETING PRESENTATION
RESPONSIBILITY
The aim of the Company’s sustainability activities is to ensure its long-term success through continuous improvement and anticipatory management of environmental, social as well as economic opportunities and SUSTAINABILITY risks.
is an integral part of business operations at HUGO BOSS 45 INVESTOR MEETING PRESENTATION
Clearly defined KPI’s to measure progress in sustainability
ORGANIZATIONAL PROCESSES KPIS AND STRUCTURE AND TOOLS INCENTIVES
▪ Global sustainability ▪ Clear guidelines, policies and ▪ Clearly defined KPIs to measure department steering the topic tools to ensure sustainable improvement in sustainability business practices ▪ Responsible managers for ▪ Sustainability criteria as part of sustainability in different ▪ Established data collection, and the long-term performance departments reporting processes related compensation of the Managing Board ▪ Continuous meetings with the ▪ Data management tools to Management Board to discuss track progress on targets ▪ Progress awarded by DJSI targets and progress World and DJSI Europe inclusion 46 INVESTOR MEETING PRESENTATION
Sustainability commitment ingrained in the concept TODAY. TOMORROW. ALWAYS.
TOMORROW ALWAYS TODAY Tomorrow contains the Always encompasses our Today stands for the concrete goals we have set overall sustainability milestones achieved so far ourselves for the future principles 47 INVESTOR MEETING PRESENTATION
TODAY. TOMORROW. ALWAYS. embedded in our three focus areas
PRODUCT PEOPLE & SOCIETY ENVIRONMENT
In addition to design, Adherence to high social We are committed to the quality, and durability, our standards forms the basis introduction and further products meet high for our relationships. development of more standards with regards to A commitment to social environmentally and health, environmental, and welfare is an integral part of climate-friendly processes. animal welfare. our corporate responsibility. 48 INVESTOR MEETING PRESENTATION
Product Strive for highest quality and longevity
ALWAYS. Our ongoing commitment to serve conscious customer segment: Offering more sustainable products through the use of more sustainable materials while at the same time respecting animal welfare and ensuring product safety.
TODAY. RESPONSIBLE styles* outperform in the collection with a higher sell-through PRODUCT *All products that contain at least 60% more sustainable raw materials will show the RESPONSIBLE label. RESPONSIBLE Styles also meet other environmental and social criteria regarding processing, transport and packaging. 49 INVESTOR MEETING PRESENTATION
Product
TODAY. Increasing responsible product offering
2018 2019
2020 2021 PF18 FW19 PS20 SR20 FW20 SR21 PF21 FW21
RESPONSIBLE TAILORING RESPONSIBLE: Today. Tomorrow. Always.
PRODUCT BOSS: THE JOURNEY HUGO: Piñatex® sneaker CLEAN UP BOSS Menswear YOUR ACT
Traceable Wool Circular Design Continuation of BOSS: BOSS: Capsule Collection Capsule Traceable Wool THE JOURNEY THE JOURNEY BOSS Men´s Business BOSS Menswear Capsule NATURAL FIBERS BOSS Mens- & cotton, linen, Continuation of Womenswear Vegan Suit HUGO: hemp, wool HUGO: Piñatex® sneaker BOSS Men´s CLEAN UP CLEAN UP YOUR ACT BOSS Mens- & Business YOUR ACT Liam Payne & CmiA Womenswear Capsule Olivenleder® Capsule Collection Kapok Capsule Collection BOSS & HUGO BOSS Men´s Casualwear 50 INVESTOR MEETING PRESENTATION
Product TOMORROW. Our main goals by 2025
SDGs MAIN GOAL STATUS 2020 (Sustainable Development Goals of the United Nations)
100% sustainably sourced cotton 86%
≥ 50% recycled synthetic fibers 10%
≥ 30% of offered styles are RESPONSIBLE* 15%
100% of plastic packaging out of 42% recycled or sustainable sources
*ALL PRODUCTS THAT CONTAIN AT LEAST 60% MORE SUSTAINABLE RAW MATERIALS WILL SHOW THE RESPONSIBLE LABEL. RESPONSIBLE STYLES ALSO MEET FURTHER ENVIRONMENTAL AND SOCIAL CRITERIA REGARDING PROCESSING, TRANSPORT, AND PACKAGING. 51 INVESTOR MEETING PRESENTATION
People & Society Taking responsibility for the people we work with
ALWAYS. Our ongoing commitment to motivate employees and take responsibility along the supply chain: Assuming responsibility for employees and suppliers to ensure safe and healthy jobs. Developing together in long-term, trusting partnerships to ensure social compliance and reduce risks.
TODAY. Started with the “Living wages” initiative as part of the Partnership for Sustainable Textiles with the aim to achieve collective solutions for living wages in countries of PEOPLE & SOCIETY production 52 INVESTOR MEETING PRESENTATION
People & Society TOMORROW. Our main goals by 2025
SDGs MAIN GOAL STATUS 2020 (Sustainable Development Goals of the United Nations)
75 % employee satisfaction according to the Great 72% Place to Work® survey
Share of at least 40% of women in the first and 50% of 25% women in the second management level below the Managing Board 45%
All goods sourced from suppliers with satisfying or better performance in social audits 96%
All directly contracted fabrics and trimmings suppliers 10% are integrated in social compliance program 53 INVESTOR MEETING PRESENTATION
Environment Reducing our environmental impact
ALWAYS. Our ongoing commitment to reduce our environmental impact while saving costs: We continuously minimize our impacts on climate change, reduce the consumption of resources and use chemicals responsibly.
TODAY. In 2020, more than half of the electricity consumed within the Group came from renewable energy sources. ENVIRONMENT 54 INVESTOR MEETING PRESENTATION
Environment: TOMORROW. Our main goals
SDGs MAIN GOAL STATUS 2020 (Sustainable Development Goals of the United Nations)
Climate neutrality in the whole value chain until 2050
Reduction of CO2 emissions (Scope 1+2) by at least 51% Scope 1+2: Reduction of 36% Reduction of CO2 emissions (Scope 3) by 30% Scope 3: Reduction of 28% Reduction of energy consumption (direct & indirect) in relation to area (m²) by 20% Energy reduction of 22% (base year 2018) until 2030 Reduction of own water consumption (externally sourced water) in relation to Group sales by 40% compared with 5% the base year 2016 until 2025
100% of suppliers with high environmental impact comply 20% with the HUGO BOSS environmental requirements until 2025 55 INVESTOR MEETING PRESENTATION
DJSI World FTSE4Good DJSI Europe
Index member since Index member since 2016 2017 (World) & 2020 (Europe)
STOXX Global Euronext Vigeo ESG Leaders Europe 120 DAX 50 ESG Eurozone 120 Leaders
Index member since 2020 Index member since 2019
HUGO BOSS sustainability achievements recognized in many sustainability indices 56 INVESTOR MEETING PRESENTATION
Financial Calendar & Investor Relations contact
Christian AUGUST Stöhr Vice President 4 Second Quarter Results Investor Relations E-Mail: [email protected] 2021 und Corporate 2021 Communications Phone: +49 (0) 7123 94 - 80903
NOVEMBER Frank Böhme Senior Investor E-Mail: [email protected] 4 Third Quarter Results Relations Manager 2021 2021 Phone: +49 (0) 7123 94 - 80903 57 INVESTOR MEETING 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”, “project”, “should”, and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties. If any of these or other risks and uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.