Kepler Cheuvreux German. Frankfurt, January 18, 2017 Mark Langer, CEO

Transcription

1 Kepler Cheuvreux German Corporate Conference 2017 Frankfurt, January 18, 2017 Mark Langer, CEO

2 Fields of action D I G I T A L I. REFOCUS THE BRAND III. DRIVE THE DIGITAL TRANS- FORMATION G L O B A L A G I L E II. REFINE THE WAY WE SELL C U S T O M E R - C E N T R I C IV. INNOVATE THE WAY WE OPERATE S U S T A I N A B L E Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

3 REFOCUS THE BRAND Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

4 Focus on two clearly positioned brands TWO brands I TWO brand identities I TWO target customers Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

5 Focus on two clearly positioned brands BOSS offers confident business wear and refined casual wear for the demanding customer HUGO offers designer clothes at an affordable price which give the wearer a 24-hour look Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

6 Two competitive environments Upper Premium Premium Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

7 BOSS: Impeccably dressed whatever the occasion B U S I N E S S S M A R T C A S U A L A T H L E I S U R E Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

8 HUGO: Designer clothes at an affordable price B U S I N E S S C A S U A L Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

9 Attractive pricing will contribute to the expansion of HUGO across all regions Entry price point for suits United States (in USD) Euro Countries (in EUR) China (in CNY) ,700 5,600 Global sales share by brand, FY 2015 (in %) 10% 90% Average HUGO prices are around 30% below BOSS Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

10 R E F I N E T H E WAY W E S E L L Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

11 Our distribution strategy places equal importance on all channels Wholesale Both brands Focus on strengthening the core Grow online, consolidate offline where necessary C U S T O M E R - C E N T R I C Retail Both brands Focus on strengthening the core Grow online and integrate with offline Our distribution strategy is solely focused on serving the needs of our customers Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

12 Ongoing evolution of the store network Openings Takeovers Renovations Closures Selective white space opportunities Relocations First HUGO pilot stores No further major franchise acquisitions planned Selective shop-in-shop takeovers in department stores Renovation of around 100 retail points-of-sale per year Closure of 20 underperforming stores worldwide progressing as planned Rightsizing of Chinese store base completed Selected shop-in-shop closures/return to partners Rental contracts extended on a case-by-case basis The pace of expansion in retail space will moderate significantly compared to historic levels Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

13 Increasing sales productivity the key focus of retail management Sales productivity by retail format, FY 2015 (in EUR/m 2 ) Sales productivity by region, FY 2015 (in EUR/m 2 ) ~9, ~9, Freestanding store Shop-in-Shop Outlet Group 0 Europe Americas Asia/Pacific Group Target of increasing the Group s sales productivity by 20% over the next few years Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

14 Adjustment of brand and merchandising strategy expected to increase sales volumes Growth enabler Traffic Brand desirability Brand communication CRM Store location VM Units/ Average Conversion transaction price x x x = Merchandising Service quality Product mix Service quality Product Pricing Store layout availability Product availability Comp store sales growth Future potential Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

15 In-store merchandising changes will better balance offerings across price points Illustration of composition of product assortment in directly operated stores Price Price Luxury Future Upper Premium Today Volume Volume Offering of traffic-driving premium price points to be broadened Breadth of luxury offerings to be reduced Selected high-end luxury products to support desirability of brand through halo effect on rest of product range Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

16 and different wearing occasions To be added to the product range In-store today Smart casual Athleisure Business Womenswear S&A Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

17 New BOSS pricing architecture clears up historical imbalances Americas BOSS prices to remain virtually unchanged Around 20% above European levels Europe Single-digit % increase overall All Euro countries fully aligned Asia Mid-teens % decline overall Max. 30% above European levels The effect of BOSS price adjustments will be neutral on a global level Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

18 D R I V E T H E D I G I TA L T R A N S F O R M AT I O N Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

19 The Group s digital roadmap Enable the cultural transformation Set the foundations Takeover of website frontend management Insourcing of European online fulfilment hugoboss.com and app (re)launches Omnichannel pilots Improve performance Rollout of omnichannel services Commercial optimization of hugoboss.com and app Develop the model Digitization of existing business model Addition of new business models Nov 2016 Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

20 I N N O VAT E T H E WAY W E O P E R AT E Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

21 Agility is the basis of innovation Establish flexible structures Empower our people Foster entrepreneurial thinking Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

22 Speed drives commercial success Replenish sold-out bestsellers in-season Adjust collection content based on short-term trends Become more flexible in our approach towards seasons Demand-driven supply Supplement the regular collection development process with a fast track concept which reduces the time to market to weeks rather than months Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

23 Wrap-Up Financial & Operational Outlook Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

24 Preliminary results 2016 reported in January Sales growth by region, y-o-y (in %, fx-adjusted) Q FY 2016 Retail comp store sales in Mainland China up by around 20% Europe* 1 2 Q4 sales in Europe increase mainly due to robust growth in the UK, Germany also positive Full year operating profit (EBITDA before special items) expected to reach the upper end of guidance range (decline between 17% and 23%) Americas Asia/Pacific Group (14) (12) (3) (2) (1) 5 (16) (12) (8) (4) *Incl. Middle East and Africa Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January 2017

25 HUGO BOSS continues to be focused on profitable and sustainable growth Improved speed-tomarket and agility Refocusing of BOSS and HUGO Acceleration in Asia Future Growth Drivers Further enhancement of retail management Solid growth in established key markets Online and omnichannel Low- to mid-single-digit retail comp store sales growth needed to expand operating margin Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

26 Our return path to profitable and sustainable growth Stabilization Acceleration Profitable growth Completion of store closure program Continuation of US distribution upgrade Go-live new merchandising strategy Go-live new brand strategy Next steps global price alignment Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

27 Continuously strong free cash flow generation supports shareholder returns in %** % % % 1.45* 85% % % % % % % % Group reconfirms dividend policy of paying out between 60% and 80% of net income *Excluding special dividend of 5.00 per share **As a percentage of net income attributable to shareholders Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

28 HUGO BOSS reconfirms sales and profit outlook for 2016 Outlook 2016 Sales (currency adjusted) Stable or decline by up to 3% Gross margin Stable EBITDA before special items Decrease between 17% and 23% Capex EUR 160 million to EUR 180 million Free cash flow Stable Wholesale sales decline of up to 10% to weigh on Group sales performance Greater benefit from cost savings supports earnings and free cash flow outlook Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January

29 2016 A year of change Strategic adjustments gear HUGO BOSS towards the return to profitable and sustainable growth Kepler Cheuvreux German Corporate Conference 2017 HUGO BOSS January