Bernstein Strategic Decisions Conference // London

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2 Bernstein Strategic Decisions Conference // London HUGO BOSS Company Handout September 17, 2014 Dennis Weber, Head of Investor Relations Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

3 Agenda Update on Key Strategic Initiatives Half Year Results 2014 Outlook Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

4 Agenda Update on Key Strategic Initiatives Half Year Results 2014 Outlook Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

5 Important initiatives in all areas of Group strategy MAXIMIZING BRAND ATTRACTIVENESS GROWING THE GROUP S OWN RETAIL BUSINESS IMPROVING OPERATIONAL PROCESSES LEVERAGING GLOBAL GROWTH POTENTIAL Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

6 Womenswear has built momentum Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

7 Unprecedented editorial coverage Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

8 BOSS Womenswear to leave footprint at New York Fashion Week Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

Womenswear visibility increasing at wholesale

Circle, New York Bernstein Strategic Decisions

9 Womenswear visibility increasing at wholesale and in own retail BOSS womenswear shop, Matsuya Ginza, Tokyo BOSS womenswear shop, Printemps Haussmann, Paris BOSS womenswear floor, Columbus Circle, New York Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

10 New BOSS Ma Vie fragrance launched Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

11 Campaign Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

12 Campaign Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

13 Germany celebrates epic World Cup win in BOSS WELTMEISTERLICH! NICHT NUR AUF DEM PLATZ. Gratulation zum Titel. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

14 Martin Kaymer dominates US Open in BOSS Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

15 HUGO BOSS and Mercedes-Benz enter into international cooperation Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

16 HUGO BOSS seizes expansion opportunities in travel retail Hong Kong Terminal 1 Madrid Terminal 4 Heathrow Terminal 2 Copenhagen Terminal 2 Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

17 Region Europe focus of retail expansion activities in the first half year Number of own retail stores as of June 30, 2014 (December 31, 2013: 1,010) TOTAL 1,028 (+18) Openings 51 thereof takeovers 14 Closings 33 Europe 588 (+12) Openings 27 thereof takeovers 1 Closings 15 Americas 201 (+1) Openings 4 thereof takeovers - Closings 3 Asia/Pacific 239 (+5) Openings 20 thereof takeovers 13 Closings 15 * incl. Middle East and Africa. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

18 Extended brand control in department stores Printemps, Paris Saks 5 th Avenue, New York David Jones, Adelaide Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

19 Digital strategy progresses with improvements to hugoboss.com Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

Region Europe an area of strength Broad based sales increases across the region in the first half year Further improvement of own retail execution major

20 Region Europe an area of strength Broad based sales increases across the region in the first half year Further improvement of own retail execution major growth driver Focus on lifting brand presence in multi-brand environments Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

Performance in the Americas improves after headwinds at the beginning of the year HUGO BOSS returns to growth in the second quarter Group maintains strict pricing discipline in

21 Performance in the Americas improves after headwinds at the beginning of the year HUGO BOSS returns to growth in the second quarter Group maintains strict pricing discipline in a still promotional market environment Upgrade of shop-in-shop portfolio at Saks ongoing Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

22 Asia remains Group s largest regional opportunity despite ongoing challenges in China Important investments in retail presence and brand perception Franchise legacy thoroughly addressed Suiting competence a key competitive differentiator Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

23 Art of Tailoring exhibition strengthens brand perception in menswear clothing in Asia Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

Made to Measure rollout emphasizes high-end tailoring competence EUROPE Berlin Dusseldorf Frankfurt Hamburg Metzingen Munich Stuttgart Basel Geneva

24 Made to Measure rollout emphasizes high-end tailoring competence EUROPE Berlin Dusseldorf Frankfurt Hamburg Metzingen Munich Stuttgart Basel Geneva London Paris 2014: Zurich ASIA/PACIFIC 2014: Beijing Hong Kong Shanghai Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

25 Significant upgrade of retail store universe in China BOSS Store, Central Building, Hong Kong BOSS Store, Canton Road, Hong Kong BOSS Store, Kerry Centre, Shanghai Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

HUGO BOSS acquires full control of its store network in China and Macau Remaining 40% stake in joint venture with former franchise partner Rainbow Group taken over effective June 30 Grown retail

26 HUGO BOSS acquires full control of its store network in China and Macau Remaining 40% stake in joint venture with former franchise partner Rainbow Group taken over effective June 30 Grown retail sophistication and strong operational platform key enabler Consolidation of distribution activities to drive quality of brand presentation and sales productivity BOSS Store Nanjing Deiji (former JV Store) Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

27 New flat-packed goods distribution center in Germany fully operational Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

28 Agenda Update on Key Strategic Initiatives Half Year Results 2014 Outlook Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

29 Robust second quarter increases drive top and bottom line growth in the first half year Second quarter results First half year results Sales (in EUR million) EBITDA before special items (in EUR million) Sales (in EUR million) EBITDA before special items (in EUR million) +5% +8% +4% +3% ,125 1, Q Q (+8% fx-adjusted) Q Q H H (+7% fx-adjusted) H H Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

30 Europe strongest growing region in first half year Sales growth by region, y-o-y Q (in %) in EUR fx-adjusted Sales growth by region, y-o-y H (in %) in EUR fx-adjusted Europe* Europe* 9 9 Americas 1 7 Americas (3) 3 Asia/Pacific (5) 2 Asia/Pacific (2) 4 Group 5 8 Group 4 7 (5) (5) UK and Germany strongest growing major markets in Europe Americas return to growth in second quarter Increases in Asia/Pacific supported by good performance in Australia and Japan *incl. Middle East and Africa. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

31 Robust own retail growth drives Group sales increase Sales growth by channel, y-o-y Q (in %) in EUR fx-adjusted Sales growth by channel, y-o-y H (in %) in EUR fx-adjusted Retail Wholesale Royalties Group (8) (6) (2) (2) Retail Wholesale Royalties Group (8) (6) (1) (1) (10) (5) (10) (5) Solid comp store sales increases (4% in Q2, 5% in H1) support double-digit retail growth Cautious customer sentiment, takeovers and delivery shifts impact wholesale performance Royalties business down slightly despite robust growth in watches and female fragrances Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

32 Gross profit margin continues to expand Gross profit margin development Q (in %) +150bp Gross profit margin development H (in %) +260bp Q Q H H Distribution channel mix Reduction of markdowns Distribution channel mix Reduction of markdowns Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

33 Healthy profit increase despite higher costs in EUR million H H1 2013* Change in % Sales 1, , Gross profit In % of sales bp Selling and distribution expenses (460.4) (408.1) (13) Administration expenses (120.8) (114.5) (5) Other operating income and expenses (0.8) (4.1) 80 Operating result (EBIT) In % of sales (20) bp Financial result (4.0) (11.3) 65 Earnings before taxes Income taxes (43.2) (40.4) (7) Net income Attributable to: Equity holders of the parent company Earnings per share (EUR)** Investments in own retail, marketing and logistics main driver of higher selling and distribution expenses Adjusted EBITDA margin down 20 basis points due to increased operating expenses as a percentage of sales Financial result benefits from lower interest expenses EBITDA before special items In % of sales (20) bp *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. **Basic and diluted earnings per share. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

34 Diverging margin trends by region in EUR million H In % of sales H1 2013* In % of sales Change in % Europe** Americas Asia/Pacific (19) Royalties (2) Segment profit operating segments Corporate units/consolidation (133.2) (127.6) (4) EBITDA before special items Strong top line momentum supports further margin increase in Europe Strict pricing discipline benefits profitability in the Americas Muted sales development and brand investments cause operating deleverage in Asia *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. **Incl. Middle East and Africa. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

35 Higher working capital position due to inventory increase Inventories (in EUR million) June 30, 2014 June 30, % +13% fx-adjusted Primarily reflects retail expansion, takeovers and delivery shift Trade receivables (in EUR million) June 30,2014 June 30, (8)% (6)% fx-adjusted Decrease due to wholesale sales decline Trade payables (in EUR million) June 30, 2014 June 30, (3)% (3)% fx-adjusted Decline due to different timing of payments Trade net working capital up 10% to EUR 456 million Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

36 Non-recurrence of prior year infrastructure investments supports free cash flow generation Investments (in EUR million) Free cash flow (in EUR million) Net debt (in EUR million) 82 (37)% >100% (10)% H H Moderation despite growing own retail investments H H Cash generation supported by profit growth and lower investments June 30, 2013 June 30, 2014 Free cash flow growth overcompensates higher dividend payout Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

37 Agenda Update on Key Strategic Initiatives Half Year Results 2014 Outlook Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

38 Full year financial guidance reconfirmed Outlook 2014 Sales growth (currency-adjusted) High single-digit Growth of EBITDA before special items High single-digit Capex EUR 110 million - EUR 130 million Own retail network Around 50 net openings Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

HUGO BOSS records solid financial performance in challenging market

transformation towards retail Improving wholesale momentum to

initiatives to contribute to Group growth in 2014 and beyond

39 HUGO BOSS records solid financial performance in challenging market environment HUGO BOSS is making good progress in business model transformation towards retail Improving wholesale momentum to support achievement of full year targets Important strategic initiatives to contribute to Group growth in 2014 and beyond Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

40 BACKUP Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

progressive contemporary fashion statement Bernstein

41 HUGO BOSS brand architecture market segment luxury premium casual urban chic modern active modern sophisticated progressive contemporary fashion statement Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

42 Brand portfolio 71% of Group sales 8% of Group sales modern / sophisticated modern / active 12% of Group sales casual / urban chic 9% of Group sales progressive / contemporary Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

43 Sales by region % Share of Group sales* Asia/Pacific Europe 24% 60% Americas *+2% Royalties. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

44 Five year overview sales and operating profit Sales and EBITDA before special items (in EUR million) 2,059 2,346 2,432 Sales EBITDA before special items Adj. EBITDA margin 1,562 1, % 22.5% 23.2% 20.5% 17.2% Target to generate EUR 3bn sales (in 2015) and 25% EBITDA margin (after 2015) Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

45 Sales split by distribution channel Sales by distribution channel Wholesale 64% 57% 53% 49% 44% Retail Royalties 33% 3% 40% 3% 45% 2% 49% 2% 54% 2% Target to generate more than 60% of Group sales in retail by 2015 Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

46 Retail comp stores sales growth Sales growth retail l-f-l* Retail l-f-l 18 16% % 13% 12% 11% 9 10% 6 3 4% 2% 4% 5% 2% 2% 4% 3% 6% 4% 2% 0 Q Q Q Q FY 2011 Q Q Q Q FY 2012 Q Q Q Q FY 2013 Q Q *fx-adjusted. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

47 Five year overview* in EUR million Earnings Position Sales 2, , , , ,561.9 Gross profit 1, , , , EBITDA EBITDA before special items EBIT Net income attributable to equity holders of the parent company Financial Position and Dividend Free cash flow Net debt Capital expenditures Depreciation/amortization Dividend Asset and Liability Structure Total assets 1, , , , ,065.4 Shareholders' equity Trade net working capital Non-current assets Key Ratios Gross profit margin in % Adjusted EBITDA margin in % Total leverage** Equity ratio in % *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. **Net debt/ebitda before special items and expenses for the "Stock Appreciation Rights Program. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

48 Income statement in EUR million Q Q2 2013* Change in % H H1 2013* Change in % Sales , , Cost of sales (185.8) (185.0) 0 (397.9) (411.6) 3 Gross profit In % of sales bp bp Selling and distribution expenses (227.9) (211.6) (8) (460.4) (408.1) (13) Administration expenses (60.0) (55.3) (8) (120.8) (114.5) (5) Other operating income and expenses (2.3) (4.2) 45 (0.8) (4.1) 80 Operating result (EBIT) In % of sales bp (20) bp Net interest income/expense (1.5) (2.4) 38 (2.0) (6.1) 67 Other financial items 0.1 (4.0) > 100 (2.0) (5.2) 62 Financial result (1.4) (6.4) 78 (4.0) (11.3) 65 Earnings before taxes Income taxes (18.7) (15.9) (18) (43.2) (40.4) (7) Net income Attributable to: Equity holders of the parent company Non-controlling interests (73) (14) Earnings per share (EUR)** EBITDA before special items In % of sales bp (20) bp *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. **Basic and diluted earnings per share. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

49 ROCE development EBITDA margin and ROCE vs. channel mix Adj. EBITDA margin ROCE Retail Wholesale Royalties 24% 54% 73% 64% 62% 63% 49% 33% 31% 31% 31% 20.5% 22.8% 22.5% 23.2% 44% 16.7% 17.2% 15.7% 16.1% 3% 2% Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

50 Retail network Number of own retail stores: + 20 (33) 1, France + 5 Italy + 1 Germany + 1 Turkey + 4 Great Britain + 1 Switzerland + 1 Spain + 1 Sweden + 1 Finland + 1 Denmark + 2 Canada + 2 Mexico + 14 Australia + 2 Hong Kong + 2 Taiwan + 1 China + 1 Japan 1,028 Dec 31, 2013 Europe* Americas Asia/Pacific Closings June 30, 2014 *Europe incl. Middle East and Africa. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

51 Trade net working capital Average trade net working capital as a percentage of sales by quarter* (in %) (50)bp Q Q Q Q Q Q Q Q Q Q *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

52 Dividends Dividend and payout ratio in EUR in %* % % 70% 70% 64% Dividend in line with policy to pay out between 60% and 80% of consolidated net profit *As a percentage of net income attributable to the shareholders of the parent company. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

53 Sourcing structure Regional split of sourcing and production volume 2013* 6% North Africa 3% Americas 10% Western Europe 32% Asia 49% Eastern Europe *80% Third party production 20% Own production Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

54 Shareholder structure* 59% Free float 39% Red & Black Lux S.à r. l. (Permira Ltd.) 2% Own shares *Source: Share register, as of September 5, Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

55 Financial calendar 2014 Date Date Event November 4, 2014 Nine Months Results November 19, 2014 Investor Day Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

56 Investor Relations contact Dennis Weber, CFA Head of Investor Relations Phone: +49 (0) Internet: Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

57 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. Bernstein Strategic Decisions Conference // London HUGO BOSS September 17, / 58

J.P. Morgan Investor Conference // Milan

J.P. Morgan Investor Conference // Milan HUGO BOSS Company Handout September 30, 2014 Dennis Weber, Head of Investor Relations J.P. Morgan Investor Conference // Milan HUGO BOSS September 30, 2014 2 /