Transcription
1INVESTOR MEETING PRESENTATIONInvestor MeetingPresentationInvestor Day 2018 - Summary
2INVESTOR MEETING PRESENTATIONOUR VISIONPersonalization and Speed are keyto achieving our visionSPEEDBE THE MOSTDESIRABLE PREMIUMFASHION AND LIFESTYLEPERSONALIZATIONBRAND
3INVESTOR MEETING PRESENTATIONPersonalization and Speed are our prioritiesalong the four strategic fields of actionPERSONALIZATIONSPEEDREFOCUS THE BRANDSDRIVE THE DIGITAL TRANSFORMATIONBRANDDESIRABILITYREFINE THE WAY WE SELLINNOVATE THE WAY WE OPERATE
4INVESTOR MEETING PRESENTATIONCustomer expectationsMore personalizationEmotional connectionFulfilling experiencesBuilding on our strengthsBroad network of own retail storesStrong reputation for style advice and fittingGrowing in-house CRM databasePersonalized product offeringPersonalization:Driving customer engagement
5INVESTOR MEETING PRESENTATIONCustomer expectationsInstant gratificationReturn on time spentFulfilling experiencesBuilding on our strengthsExcellence in product design and developmentIndustry-leading IT and logistic systemsRobust supply chainSpeed: Winning customers withindustry-leading responsiveness
6INVESTOR MEETING PRESENTATIONCAGR 5-7%*Group sales(in EUR billion)4%*3%*2.8**2.72.7ONLINE20162017RETAIL PRODUCTIVITYASIAHUGO2018eKey sales growth drivers identifiedacross channels, regions, and brands2022e currency-adjusted based on consensus
7INVESTOR MEETING PRESENTATIONOnline sales(in EUR million)x4762016792017 1002018eOnline: Own online businessto quadruple until 20222022e1Accelerate online concession business2Exploit full potential of hugoboss.com3Enlarge omnichannel services4Expand social commerce
8INVESTOR MEETING PRESENTATIONRetail sales productivityCAGR 4%(in EUR/m2)1Accelerate rollout ofnew store concept2Optimize store network3Enlarge omnichannel services4Enhance product range5Drive retail excellence 10,70010,60010,500201620172018eRetail: Further improvingretail sales productivity2022e
9INVESTOR MEETING 2eAsia/Pacific: Sales to increase ata double-digit rate1Leverage Chinese demandacross the region2Expand retail footprint inMainland China3Grow travel retail business4Leverage digital opportunities vialeading online platforms
10INVESTOR MEETING PRESENTATIONHUGO salesCAGR 5-7%*(in EUR million)1Strengthen positioning incontemporary fashion segment2Focus on casualwear to benefitfrom casualization trend3Expand store network across keymetropolitan cities4Leverage social media presence3973802016 38020172018e2022eHUGO: Overproportionate growth incontemporary fashion segment currency-adjusted
11INVESTOR MEETING PRESENTATIONEBIT margin targeted at 15% in 202215% 12%*EBIT stmentsEBIT margin2022e based on consensus
12INVESTOR MEETING PRESENTATIONGross margin expansionsupported by multiple leversChannel mixIncrease share ofcontrolled distributionComplexity reductionSimplified brand portfolio leadsto complexity reductionFull-price salesReduce share of outlet businessAdvanced markdown managementGross margin2018Channel mixComplexityreductionFull-pricesalesGross margin2022
13INVESTOR MEETING PRESENTATIONEfficiency Program to generatetotal cost savings of EUR 160 million EUR 160 million2019202020212022
14INVESTOR MEETING PRESENTATIONRetailImprove retail productivityImprove pay-to-sales ratioRenegotiate rental contractsRight-size existing store baseMarketingGrow marketing effectivenessEFFICIENCYPROGRAMOptimize CAPEX-to-sales ratioReview effectiveness of marketing mixMeasure return on marketing investmentsDrive digital marketing activitiesGrow social media presenceOrganizationOptimize organizational structureReview existing overhead cost structureClarify roles and responsibilitiesRollout digital capabilitiesImplement shared servicesEfficiency program to driveoperating leverage
15INVESTOR MEETING PRESENTATIONhugoboss.com1Exploit full potential of omnichannel2Rollout hugoboss.com website3Strengthen IT capabilities4Expand digital content teams5Enable best-in-class supply chain capabilitiesContinued investmentsin driving the digitization
16INVESTOR MEETING PRESENTATIONOnlineRetail ProductivitySalesGrowth5-7%CAGR*Gross Margin ExpansionEBITMargin15%AsiaEfficiency ProgramHUGOKey drivers of sales growth andEBIT margin expansion until 2022* currency-adjusted
17INVESTOR MEETING PRESENTATIONPERSONALIZATIONSPEEDREFOCUS THE BRANDSDRIVE THE DIGITAL TRANSFORMATIONBRANDDESIRABILITYREFINE THE WAY WE SELLINNOVATE THE WAY WE OPERATE
18INVESTOR MEETING PRESENTATIONSuccessful launch oftwo-brand strategy
19INVESTOR MEETING PRESENTATIONAddressing two distinctand unique OSS
20INVESTOR MEETING PRESENTATIONBRAND STRATEGY
21INVESTOR MEETING PRESENTATIONProductPursuing three key ambitionsPriority123ObservationAmbitionTailoring heritageFormalwear marketremains challengingStrengthen the strengthCasual- and AthleisurewearCasualizationtrend continuesMake the big biggerInnovationInnovation shapesbrand desirabilityChallenge the status quo
22INVESTOR MEETING PRESENTATIONProduct Tailoring heritage 15%3rdSales growth YOYEveryBOSS suit sold withMix & MatchStretch Tailoring#1reason for customersto buy BOSS is theQUALITYStrengthen tailoring heritage to drivecustomer value and brand desirability 50%Sales growth YOYMade-to-Measure
23INVESTOR MEETING PRESENTATIONProduct Tailoring heritageStrengthenBusinesswear#1Upper premiumwear-to-work brand forfemale professionalsLeverage tailoring heritageby realigning Womenswearcollection set-upFocus onkey categoriesIntensify brandcollaborations andcapsule development
24INVESTOR MEETING PRESENTATIONProduct Casual- and AthleisurewearCAGR 2018-2022double-digitExploit potential withBOSS Casual- and Athleisurewear
25INVESTOR MEETING PRESENTATIONProduct Casual- and Athleisurewear-30%2020 vs 2018Complexity reduction forBOSS Casual- and Athleisurewear1Analyze product groups andcustomer needs2Reorganize collection structureto minimize overlaps3Reallocate resources for productinnovation4Free up resources forcapsule collections
26INVESTOR MEETING PRESENTATIONProduct InnovationFunctionalityDriving innovationto excite customersFabricPersonalizationSustainability
27INVESTOR MEETING PRESENTATION360 marketing360 marketing approach toconsistently engage with the BOSS customerWebSocialCRMOut of homeStore
28INVESTOR MEETING PRESENTATIONBRAND STRATEGY
29INVESTOR MEETING PRESENTATIONProductPursuing three key nal authenticityCustomer strivesfor personalizationStrengthen the strengthCasualwearCasualizationtrend continuesMake the big biggerInnovationInnovation shapesbrand desirabilityChallenge the status quo
30INVESTOR MEETING PRESENTATIONProduct Unconventional ntionalOffering progressive collectionsfor the “mix-masters”Innovative
31INVESTOR MEETING PRESENTATIONProduct CasualwearHUGO REVERSEDrepresents 10%of HUGOCasualwear salesHUGO REVERSED offerspersonalized premium fashion
32INVESTOR MEETING PRESENTATIONProduct InnovationDIGITALHUGO Bits and Bytes collectionincreases brand desirabilityexcites customersoffers new possibilitiesSuccessful launch ofdigitally developed HUGO collection
33INVESTOR MEETING PRESENTATIONMarketingMarketing initiatives aim at connectingwith the HUGO customerSocialPop-up storesFashion show
34INVESTOR MEETING PRESENTATIONPersonalization and Speed are our prioritiesalong the four strategic fields of actionPERSONALIZATIONSPEEDREFOCUS THE BRANDSDRIVE THE DIGITAL TRANSFORMATIONBRANDDESIRABILITYREFINE THE WAY WE SELLINNOVATE THE WAY WE OPERATE
35INVESTOR MEETING PRESENTATIONRETAILBOSS Store, Tokyo
36INVESTOR MEETING PRESENTATIONNew BOSS store conceptimproves performance across KPIs 14% 28% 12%SalesSales productivityUnits per transaction(fx-adjusted)BOSS Store, Milan
37INVESTOR MEETING PRESENTATIONAccelerate rolloutof new BOSS store conceptTokyoChicagoMexico CityNew YorkParisBerlinKuala LumpurTorontoLas VegasRotterdamMiamiSingapore
38INVESTOR MEETING PRESENTATIONHUGO: expansion of storenetwork nBerlinDüsseldorfParisLos AngelesNew YorkNew YorkZhengzhouPortoTokyoOsakaCosta MesaSan DiegoMiamiShenzhenDubaiGuadalajaraMexico CitySingapore, Ion OrchardSingapore, Marina Bay23 HUGO Storesby the end of 2018
39INVESTOR MEETING PRESENTATIONHUGO Store, ParisIncreasing traffic and awarenessEnhancing interaction with customersEngaging strongly via social mediaCreating excitement through pop-up storesHUGO stores resonate wellwith the customer
40INVESTOR MEETING PRESENTATIONFurther HUGO store openingsplanned for 2019 and beyondMonterreyHong KongMoscowLos AngelesSingapore
41INVESTOR MEETING PRESENTATIONMaintainretail selling space01Openings02Relocations & closures03RenovationsExpand BOSS footprintin Asia/PacificRight-size storesAccelerate global rolloutof new BOSS store conceptOpen HUGO storesin key metropolitan citiesRelocate within thesame city or mallFocus on keymetropolitan citiesFocus on“new role of stores”Close selective storesRenovate shops and outletsBOSS Store, Paris
42INVESTOR MEETING PRESENTATIONWHOLESALE
43INVESTOR MEETING PRESENTATIONFurther strengtheningstrategic wholesale partnerships01Enhance brandpresentation02Simplify sellingprocess03Increase marketingsupport0405Expand onlinecooperationGrow demanddriven supply
44INVESTOR MEETING PRESENTATIONONLINE
45INVESTOR MEETING PRESENTATIONStrong development of online concessionscontributes to online growthZalando concession partnershipmarks major milestoneOnline concession model to be extendedin the coming yearsAccelerate online concessionbusiness to control distribution
46INVESTOR MEETING PRESENTATIONMake hugoboss.com a digital flagship storeAccelerate personalized customer experienceCreate value through CRM expertiseSustain strong momentum of mobile commerceEnhance performanceof hugoboss.com
47INVESTOR MEETING PRESENTATIONCoverage of 90% of global onlineapparel and footwear markethugoboss.commarkets todayNext hugoboss.comrolloutsRollout of hugoboss.com increases global online presence
48INVESTOR MEETING PRESENTATIONOmnichannel servicesincrease convenience and speedIN TOTAL125Targetstores in2022EuropeOmnichannel servicesto ingrow5% of store sales59 storesthe toU.S.already offer omnichannel servicesBOSS Store, BerlinIn-StoreAvailability CheckOrderfrom StoreClick & CollectStore LocatorClick & ReserveReturn to StoreDemand-driven Delivery
49INVESTOR MEETING PRESENTATIONDrive quality growthin the Americas20%Mid single-digitgrowth20%Sales share2018CAGRSales share2022eLeverage trend towards casual- and athleisurewearReview and optimize existing store networkReduce share of outlet businessGrow quality business through strategic wholesale partnersLicense business represents 3% of Group sales
50INVESTOR MEETING PRESENTATIONMaintain leading positionin Europe*62%Mid single-digitgrowth57%Sales share2018CAGRSales share2022eGrow productivity of existing store baseRollout HUGO stores across major European citiesExpand concession business with large online platformsStrengthen existing partnerships with key wholesale partners*incl. Middle East/AfricaLicense business represents 3% of Group sales
51INVESTOR MEETING PRESENTATIONLeverage strong potentialin Asia/Pacific15%Double-digit growth20%Sales share2018CAGRSales share2022eLeverage Chinese demand across the regionExpand retail footprint in Mainland ChinaGrow travel retail businessLeverage digital opportunities via leading online platformsLicense business represents 3% of Group sales
52INVESTOR MEETING PRESENTATIONPersonalization and Speed are our prioritiesalong the four strategic fields of actionPERSONALIZATIONSPEEDREFOCUS THE BRANDSDRIVE THE DIGITAL TRANSFORMATIONBRANDDESIRABILITYREFINE THE WAY WE SELLINNOVATE THE WAY WE OPERATE
53INVESTOR MEETING PRESENTATIONTwo different initiativesto drive SpeedADVANCED ANALYTICSOperations-related dimensions12HUGO TRANSFORMATIONProduct-related dimensions& cultural transformation
54INVESTOR MEETING PRESENTATIONDemandTrenddetectionDesignDigitally developedcollectionDevelopmentDigital rawmaterial libraryMultiple measuresalong the value chainProduction drecommendationsDigital showroom &online order toolSalesMarkdownmanagement
55INVESTOR MEETING PRESENTATIONDesignDigitally developed collectionas a measure for speeding up100%nonphysicalNo prototypes,no samples75 : 25FromknownmaterialsBy digitallyenabledvendors75% of styles fromcurrent patterns,25% from newMade from fabricsapplied in latestcollectionsMade by fast anddigitally enabledvendors
56INVESTOR MEETING PRESENTATIONDevelopmentGo-liveJune 201840 fabrics &100 trimmings available todayAgile development &continuous learningDigital raw material library is thefoundation for digital designs
57INVESTOR MEETING uction &LogisticsMarketing7 months until shelf8 months until handover-50%Lead time6 weeks until handoverDigital development reduceslead times by 50%7 months until shelfSales
58INVESTOR MEETING PRESENTATIONProduction & logisticsProduction facility in Izmirmakes further progress to become a “smart factory”40% reduction of set-up time fora new production lineRewarded virtual training reducestraining time by 40%95% accuracyto predict operational defects
59INVESTOR MEETING PRESENTATIONMarketingFocusing on online marketing tomeet customer expectationsMarketing split online/printOnline#7Print70% 75%50%201520172022e
60INVESTOR MEETING PRESENTATIONSalesMarkdown management optimization viaadvanced analyticsADVANCED l-price sellthrough
61INVESTOR MEETING PRESENTATIONBackup
62INVESTOR MEETING PRESENTATIONSales by region and major marketsShare of Group sales*Europe(incl. Middle East/Africa)AmericasAsia/Pacific21%14%62%Germany: 18%U.S.: 15%China: 8%Great Britain: 12%Canada: 3%Oceania: 2%France: 6%Central & South America: 3%Japan: 2%Benelux: 5%Other: 2%*Other: 21%as of 2017; 3% Licenses
63INVESTOR MEETING PRESENTATIONSales by distribution %44%0,20,10LICENSES2%20122%2013
64INVESTOR MEETING PRESENTATIONNumber of Group’s own retail stores by regionAs of 30/09/2018Freestanding sia/Pacific288Group1,09632065Freestanding stores88Shop-in-Shops93Outlets50Freestanding stores151Shop-in-ShopsOutlets8948
INVESTOR MEETING PRESENTATION65Retail comp stores salesRetail l-f-l sales development*(6)% 2% 8* FX-adjusted
66INVESTOR MEETING PRESENTATIONShareholder returnStrong commitment to profit-based dividend 2019e2020e2021e2022eDividend payout ratio in % of net income, dividend in EUR
67INVESTOR MEETING PRESENTATION(Adjusted) financial leverage2.4Net debt / EBITDA2.2xNet debt incl. operating leases / 0.02009201020112012Operating leasesEBITDAR20162017 Future committed operating lease obligations capitalized according to S&P methodology EBITDA minimum rents contingent rents
68INVESTOR MEETING PRESENTATIONSourcing and production structure*38 % ASIA18 % OWNPRODUCTION12 % WESTERNEUROPE4 % NORTH AFRICA02 % AMERICAS44 % EASTERN EUROPE82 % THIRDPARTYPRODUCTION*as of 2017, in value terms
69INVESTOR MEETING PRESENTATIONMulti-Year 5722.432Gross profit1.8081.7771.8531.6991.580Gross profit margin in %66,266,066,066,164,9EBITDA499433590572561EBITDA before special items491493594591565Adjusted EBITDA margin in %118,018,321,223,023,2EBIT341263448449456Net income231194319333329Trade net working capital459524528503432Non-current assets662752765660612Shareholders 701421231050,00,20,10,10,1183179250250231Equity ratio in %Total assetsFree cash flowNet debtCapexDepreciation/amortizationTotal leverage2Dividend1 EBITDA before special items/Sales.2 Net financial liabilities/EBITDA before special items.
70INVESTOR MEETING PRESENTATIONFinancial Calendar & Investor Relations contactChristian Stöhr, Head of Investor RelationsMarch 7, 2019Full Year Results 2018Phone: 49 (0) 7123 94 - 80903E-Mail: Christian Stoehr@hugoboss.comMay 2, 2019First Quarter Results 2019May 16, 2019Annual Shareholders‘ MeetingFrank Böhme, Senior Investor Relations ManagerPhone: 49 (0) 7123 94 - 80903E-Mail: Frank Boehme@hugoboss.com
71INVESTOR MEETING PRESENTATIONForward lookingstatements contain risksThis document contains forward-looking statements that reflectmanagement's current views with respect to future events. Thewords "anticipate ", "assume ", "believe", "estimate", "expect","intend", "may", "plan", "project", "should", and similar expressionsidentify forward-looking statements. Such statements are subject torisks and uncertainties. If any of these or other risks anduncertainties occur, or if the assumptions underlying any of thesestatements prove incorrect, then actual results may be materiallydifferent from those expressed or implied by such statements. Wedo not intend or assume any obligation to update any forwardlooking statement, which speaks only as of the date on which it ismade.
Drive digital marketing activities Grow social media presence Efficiency program to drive operating leverage 14 INVESTOR MEETING PRESENTATION . . Social CRM Out of home Store 360 marketing 27 INVESTOR MEETING PRESENTATION . BRAND STRATEGY 28 INVESTOR MEETING PRESENTATION . Pursuing three key ambitions
