Commerzbank German Investment Seminar

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2 Commerzbank German Investment Seminar NEW YORK, JANUARY 9/10, 2018 MARK LANGER CHIEF EXECUTIVE OFFICER DENNIS WEBER HEAD OF INVESTOR RELATIONS Commerzbank German Investment Seminar 2018 HUGO BOSS January

3 Third Quarter Results 2017 Commerzbank German Investment Seminar 2018 HUGO BOSS January

4 HUGO BOSS records solid sales increase in the third quarter Improved sales momentum in own retail Healthy increases in Europe and China Group Sales (in EUR million) +1 % +3 % fx-adjusted US retail business returns to comp store sales growth Q Q Commerzbank German Investment Seminar 2018 HUGO BOSS January

5 Europe and Asia/Pacific contribute to sales growth HUGO BOSS Europe Sales* +4 % +5 % fx-adjusted HUGO BOSS Americas Sales* -8 % -4 % fx-adjusted HUGO BOSS APAC Sales* (2) % +4 % fx-adjusted Q Q Sales increase in all major markets *in EUR million Q Q Good growth in Latin America and Canada offset by 9% sales decline in the US Q Q China remains growth engine in Asia Commerzbank German Investment Seminar 2018 HUGO BOSS January

6 Pace of growth in own retail accelerates Retail Sales* +3 % +6 % fx-adjusted Wholesale Sales* (3) % (1) % fx-adjusted License Sales* +24 % +24 % fx-adjusted Q Q % comp store sales growth driven by all regions Q Q Decline in the Americas partly offset by growth in Europe Q Q Strong fragrance business boosts license sales *in EUR million Commerzbank German Investment Seminar 2018 HUGO BOSS January

7 First BOSS stores refurbished with new store concept BOSS Store Geneva Re-opening October Freestanding Stores (20) Europe (8) Europe + 1 Americas (4) Americas + 8 Asia/Pacific (8) Asia/Pacific Dec. 31, 2016 Openings Closings Sep. 30, 2017 Commerzbank German Investment Seminar 2018 HUGO BOSS January

8 Sales up across both brands +1 % +3 % fx-adjusted +3 % +4 % fx-adjusted BOSS sales increase across all wearing occasions Solid growth of HUGO driven by region Europe Menswear up 4%, womenswear down 1% Q3 2016* Q3 2017* Q3 2016* Q3 2017* *in EUR million Commerzbank German Investment Seminar 2018 HUGO BOSS January

9 Investments in future growth and currency effects weigh on operating profit Gross margin 64.9 % 20bp Selling & Distribution expenses 284 EUR million 2% Administration expenses EBITDA (before special items) (1)% 67 EUR million 2% 143 EUR million Special items 5 EUR million >100% Net income 80 EUR million 0% Commerzbank German Investment Seminar 2018 HUGO BOSS January

10 Margin performance differs by region Europe (in %) +140 bp Americas (in %) (250) bp Asia/Pacific (in %) (200) bp *Incl. Middle East and Africa. Q Q Q Q Q Q Commerzbank German Investment Seminar 2018 HUGO BOSS January

11 Sales and earnings increase in the first nine months Group Sales (Jan. - Sep. 2017) Sales by Region (Jan. - Sep. 2017) Mio. EUR +2% +2% fx-adjusted Europe +2% +3% fx-adjusted EBITDA (before special items) 348 Mio. EUR +1% Americas (2)% (3)% fx-adjusted Net income 186 Mio. EUR +43% Asia/Pacific +4% +5% fx-adjusted Commerzbank German Investment Seminar 2018 HUGO BOSS January

12 Working capital to sales ratio continues to improve Inventories (in EUR million) (3) % 0 % fx-adjusted Average trade net working capital as percentage of sales (in %) (40) bp Inventory position well controlled Trade net working capital up 5% Timing effects impact trade receivables Sep. 30, 2016 Sep. 30, 2017 L12M 2016 L12M 2017 Commerzbank German Investment Seminar 2018 HUGO BOSS January

13 Earnings increase and lower investments drive cash flow growth Capital expenditure (in EUR million) (29) % Free cash flow (in EUR million) +29 % Net financial liabilities (in EUR million) (29) % Jan. - Sep Jan. - Sep Jan. - Sep Jan. - Sep Sep. 30, 2016 Sep. 30, 2017 Own retail investments decline Higher net profit and lower *Incl. Middle East and Africa. investments Free cash flow improvement Commerzbank German Investment Seminar 2018 HUGO BOSS January

14 Group Strategy Update Commerzbank German Investment Seminar 2018 HUGO BOSS January

15 Group strategy focuses on four 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 Commerzbank German Investment Seminar 2018 HUGO BOSS January

16 Strategic 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 Commerzbank German Investment Seminar 2018 HUGO BOSS January

17 Two brands: BOSS and HUGO # T H I S I S B O S S # I A M H U G O TWO BRANDS TWO TARGET CUSTOMERS TWO BRAND IDENTITIES Commerzbank German Investment Seminar 2018 HUGO BOSS January

18 BOSS and HUGO customers have different attitudes towards fashion Status-oriented, traditional, rational ATTITUDE Open-minded, individual, spontaneous Classic, modern, sophisticated Highest quality, personal assistance STYLE EXPECTS Fashion-forward, contemporary, progressive Latest fashion trends, urban atmosphere Retail & department stores, online SHOPPING Online, mobile, retail & department stores DEMANDING QUALITY SEEKER OPEN-MINDED LIFE ENTHUSIAST Commerzbank German Investment Seminar 2018 HUGO BOSS January

19 BOSS and HUGO are distinct brands based on a common set of values EXCLUSIVE CHARACTERISTICS MODERN DESIGN EFFORTLESS LOOKS SHARP TAILORING AND REFINED CASUALWEAR PRODUCT EXCELLENCE TO BE DRESSED IMPECCABLY FOR EVERY OCCASION SHARED VALUES & BENEFITS INNOVATION PREMIUM QUALITY AND PERFECT FIT SUSTAINABILITY TRUSTWORTHINESS AUTHENTICITY LIFESTYLE EXPERIENCES EXCLUSIVE CHARACTERISTICS CONTEMPORARY DESIGN PROGRESSIVE LOOKS FASHION - FORWARD DESIGNER CLOTHES FOR AN AFFORDABLE PRICE TO BE DRESSED INDIVIDUALLY FOR EVERY OCCASION Commerzbank German Investment Seminar 2018 HUGO BOSS January

20 BOSS: Upgrade of casualwear and new interpretation of formalwear Split of BOSS brand sales by segment In EUR billion ~2.0 ~1.4 CAGR +8% 51% 59% CAGR +3% 49% 41% Casualwear Formalwear Commerzbank German Investment Seminar 2018 HUGO BOSS January

21 BOSS: Rebalanced offer takes advantage of BOSS core strength in upper premium Suit offer by price point Based on number of styles offered in France, in % of total >800 26% 23% % 25% % 43% 595 0% Spring/Summer 2017 collection 9% Spring/Summer 2018 collection Commerzbank German Investment Seminar 2018 HUGO BOSS January

22 BOSS Menswear collection spans three wearing occasions B U S I N E S S C A S U A L A T H L E I S U R E DRESSED IMPECCABLY FOR EVERY OCCASION Commerzbank German Investment Seminar 2018 HUGO BOSS January

23 BOSS Womenswear collection consists of Business and Casual B U S I N E S S C A S U A L DRESSED IMPECCABLY FOR EVERY OCCASION Commerzbank German Investment Seminar 2018 HUGO BOSS January

24 Business and Casual form HUGO Menswear B U S I N E S S C A S U A L GLOBALLY ENGAGED ALWAYS CURIOUS AUTHENTICALLY EXPRESSIVE Commerzbank German Investment Seminar 2018 HUGO BOSS January

25 and HUGO Womenswear collections B U S I N E S S C A S U A L GLOBALLY ENGAGED ALWAYS CURIOUS AUTHENTICALLY EXPRESSIVE Commerzbank German Investment Seminar 2018 HUGO BOSS January

26 HUGO: Refined brand positioning receives strong feedback Commerzbank German Investment Seminar 2018 HUGO BOSS January

27 HUGO has grown significantly above industry average in recent past HUGO sales split by channel In EUR million 380 Strong position in central European markets % 37% 7% 2010 CAGR +16% 50% 47% 2% 2016 Short-term growth focus on other European markets Ambition to grow in the US and key Asian markets Wholesale Retail Licenses Commerzbank German Investment Seminar 2018 HUGO BOSS January

28 High profile events and campaigns drive brand awareness Own Your Journey Social media campaign Gallery Collection BOSS Womenswear Bread & Butter by Zalando Commerzbank German Investment Seminar 2018 HUGO BOSS January

29 Strategic 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 Commerzbank German Investment Seminar 2018 HUGO BOSS January

30 Three key distribution priorities 1 Increase own retail sales productivity 2 Exploit the full potential of online Further integrate distribution 3 across all channels Retail sales productivity In EUR/m 2 ~13,000 10,900 Better and broader offering at entry price points Expansion of casual and athleisure offering in stores Rollout of omnichannel services Investment in retail staff training Optimization of retail network e 2018e 2019e 2020e 2021e Commerzbank German Investment Seminar 2018 HUGO BOSS January

31 Three key distribution priorities 1 Increase own retail sales productivity 2 Exploit the full potential of online Further integrate distribution 3 across all channels hugoboss.com Fulfillment Partner (insourced in 2016) onlinepureplay.com departmentstore.com C U S T O M E R Social commerce Commerzbank German Investment Seminar 2018 HUGO BOSS January

32 Three key distribution priorities 1 Increase own retail sales productivity 2 Exploit the full potential of online Further integrate distribution 3 across all channels +90% of European retail business omnichannel-enabled Commerzbank German Investment Seminar 2018 HUGO BOSS January

33 Positive reaction from wholesale partners to new Spring/Summer 2018 collection Orders for athleisure wear up at double-digit rates HUGO orders up solidly driven by double-digit increase in casualwear Overall order book broadly stable y-o-y, outperforming the global wholesale market Commerzbank German Investment Seminar 2018 HUGO BOSS January

34 Store renovations will upgrade own retail network Openings freestanding store openings will strengthen the network First HUGO stores will open in key European cities from 2018 onwards Closures 15 of 20 stores designated for closure will be closed by year-end Profitability of remaining five stores has improved significantly Additional store closures based on expiration of rental contract Renovations Renovations to account for the bulk of retail investments Own retail selling space will remain largely stable going forward Commerzbank German Investment Seminar 2018 HUGO BOSS January

35 Strategic 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 Commerzbank German Investment Seminar 2018 HUGO BOSS January

36 Digital transformation comprises the entire value chain Product & collection development Sourcing and production Distribution and logistics Own retail and wholesale distribution Commerzbank German Investment Seminar 2018 HUGO BOSS January

37 Product and collection development Sourcing and production Distribution and logistics Sales Increasing use of virtual prototyping accelerates collection development Improved communication flow with suppliers Reduction of mock-ups and prototypes 100% of HUGO shirt, neckwear and knitwear offering digitalized Commerzbank German Investment Seminar 2018 HUGO BOSS January

38 Product and collection development Sourcing and production Distribution and logistics Sales Production facility in Izmir is developing into a smart factory Robotics 3D spaceplanning Big data analysis Smart factory Real time production data Voice command Augmented reality Artificial intelligence Connect Collect Analyze Predict Commerzbank German Investment Seminar 2018 HUGO BOSS January

39 Product and collection development Sourcing and production Distribution and logistics Sales Key elements of logistics infrastructure upgraded or renewed European flat-packed goods distribution center Filderstadt, Germany US distribution center Midway (Georgia), United States New construction completed in 2014 SAP implementation completed in European e-com and B-pool distribution center Wendlingen, Germany Refurbishment completed in 2016 Commerzbank German Investment Seminar 2018 HUGO BOSS January

40 Product and collection development Sourcing and production Distribution and logistics Sales New store concepts create strong link between physical and digital retailing Commerzbank German Investment Seminar 2018 HUGO BOSS January

41 Product and collection development Sourcing and production Distribution and logistics Sales HUGO digital showroom with full order functionality went live in October Commerzbank German Investment Seminar 2018 HUGO BOSS January

42 Strategic 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 Commerzbank German Investment Seminar 2018 HUGO BOSS January

43 Digital showroom development demonstrates adoption of new ways of working Strict focus on customer value Delegation of decision making power Use of Scrum methodology Commerzbank German Investment Seminar 2018 HUGO BOSS January

44 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 Commerzbank German Investment Seminar 2018 HUGO BOSS January

45 Senior management changes brought new expertise to the company Filippo Bernasconi Director Brand & Creative Management Shoes and Leather (formerly at Bally) Tony Lucia President and CEO, USA (G-Star, Escada) Linda Dauriz Director Customer Experience & Corporate Development (McKinsey & Company) Dr. Marcus Meyer Managing Director Central Markets (Navyboot, Geox) Neil Melgaard- Lewty Senior Head of Design Menswear Smart Casual (Tommy Hilfiger, MEXX) Richard Lloyd-Williams Director of Digital Transformation (NET-A-PORTER) Commerzbank German Investment Seminar 2018 HUGO BOSS January

46 New Chief Financial Officer Yves Müller took office in December 2017 Responsibilities / / Controlling, Finance, Central Services, Investor Relations and IT : CFO at Tchibo : Head of group accounting and IT at Tchibo : Auditor at Arthur Andersen Commerzbank German Investment Seminar 2018 HUGO BOSS January

47 Financial & Operational Outlook Commerzbank German Investment Seminar 2018 HUGO BOSS January

48 Sales outlook upgraded for all three regions Sales by region* BOSS Store Berlin Kurfürstendamm Europe Increase at a low single-digit percentage rate Americas Largely stable Asia/Pacific Increase at a low to mid single-digit percentage rate *on a currency-adjusted basis Commerzbank German Investment Seminar 2018 HUGO BOSS January

49 Increased retail sales outlook reflects better than expected year-to-date performance Sales by channel* BOSS Store Paris Champs-Élysées Retail Mid single-digit increase, low single-digit comp store sales growth Wholesale Decline at a low to mid single-digit percentage rate Licenses Double-digit growth *on a currency-adjusted basis Commerzbank German Investment Seminar 2018 HUGO BOSS January

50 Operating profit to remain on prior year level in 2017 Sales* Gross profit margin Low single-digit percentage rate increase Slight increase EBITDA before special items Consolidated net income Capital expenditure Free cash flow Largely stable Low double-digit percentage rate increase EUR 130 million to EUR 150 million Increase to around EUR 250 million Specification *on a currency-adjusted basis Commerzbank German Investment Seminar 2018 HUGO BOSS January

51 Strategy execution will drive profitable and sustainable growth Profitable and sustainable growth Stabilization 2017 Financial outlook confirmed Sales and operating profit to remain stable Acceleration 2018 Grow sales and operating profit Grow sales stronger than market, increase operating profit stronger than sales Commerzbank German Investment Seminar 2018 HUGO BOSS January

52 HUGO BOSS will further strengthen its position in the premium apparel industry BOSS and HUGO will outgrow their respective market segments Refined strategy will elevate brand desirability and customer experience Agility will become key feature of the operating model Commerzbank German Investment Seminar 2018 HUGO BOSS January

53 Backup Commerzbank German Investment Seminar 2018 HUGO BOSS January

54 Sales by region and major markets Share of Group sales* Europe (incl. Middle East/Africa) 61% Americas 22% Asia/Pacific 14% Germany: 17% Great Britain: 12% France: 6% Benelux: 5% Other: 21% U.S.: 16% Canada: 3% Central & South America: 2% Other: 1% China: 8% Oceania: 2% Japan: 2% Other: 2% *as of 2016, +3% Licenses Commerzbank German Investment Seminar 2018 HUGO BOSS January

55 Sales by distribution channel 53% 49% 44% 41% 38% 35% Wholesale Retail 45% 49% 54% 57% 60% 62% Licenses 2% 2% 2% 2% 2% 3% Commerzbank German Investment Seminar 2018 HUGO BOSS January

56 Number of Group s own retail stores by region As of 30/09/2017 Freestanding stores Shop-in-Shops Outlets Total Europe Americas Asia/Pacific Total ,118 Commerzbank German Investment Seminar 2018 HUGO BOSS January

57 Retail comp stores sales Retail l-f-l sales development* (2) 2% 6% 4% 4% 0% 3% 3% 6% 0% (1)% 2% (3)% (3)% 3% 5% 2% (4) (6) (8) FY 2013 Q Q Q Q FY 2014 Q Q Q Q FY 2015 (6)% Q (8)% Q (6)% Q Q (6)% FY 2016 Q Q Q Jan-Sep 2017 *FX-adjusted Commerzbank German Investment Seminar 2018 HUGO BOSS January

58 Dividend policy Dividend per share and payout ratio (in EUR) (in %**) % 1.45* 85% % 75% % % % % % 93% Dividend policy of paying out between 60% and 80% of consolidated net income reconfirmed * Excluding special dividend of 5.00 per share ** As a percentage of net income attributable to shareholders Commerzbank German Investment Seminar 2018 HUGO BOSS January

59 (Adjusted) financial leverage x x 1.6x 1.3x 1.2x 1.2x 1.3x 1.4x 1.5x Net debt / EBITDA Net debt incl. operating leases / EBITDAR x x 0.2x 0.1x 0.1x 0.1x 0.2x Operating leases EBITDAR = Future committed operating lease obligations capitalized according to S&P methodology = EBITDA + minimum rents + contingent rents Commerzbank German Investment Seminar 2018 HUGO BOSS January

60 Sourcing and production structure* Americas: 2% Western Europe: 12% Own production: 20% Eastern Europe: 46% North Africa: 4% Asia: 36% Third party production: 80% *as of 2016, in value terms Commerzbank German Investment Seminar 2018 HUGO BOSS January

61 Multi-Year overview In EUR million Sales 2, , , , , ,058.8 Gross profit 1, , , , , ,252.0 EBITDA EBITDA before special items EBIT Net income Free cash flow Net debt Capex Depreciation/amortization Dividend Total assets 1, , , , , ,419.6 Shareholders equity Trade net working capital Non-current assets Gross profit margin in % Adjusted EBITDA margin in %* Total leverage** Equity ratio in % *EBITDA before special items/sales **Net financial liabilities/ebitda before special items Commerzbank German Investment Seminar 2018 HUGO BOSS January

62 Analyst coverage The HUGO BOSS AG share is covered by the following financial analysts: Commerzbank German Investment Seminar 2018 HUGO BOSS January

63 Level I ADR program ADR Details For questions about creating HUGO BOSS ADRs, please contact BNY Mellon: Market OTC Symbol BOSSY BNY Mellon Shareowner Services CUSIP Ratio 5 : 1 Country Germany P.O. BOX College Station TX USA Phone: shrrelations@bnymellon.com Website: Depositary bank BNY Mellon Commerzbank German Investment Seminar 2018 HUGO BOSS January

64 Shareholder structure* 10% PFC S.r.l. / Zignago Holding S.p.A. 2% Own shares 88% Free float *Source: Share register, voting rights notifications (as of November 2017) Commerzbank German Investment Seminar 2018 HUGO BOSS January

65 Financial Calendar 2018 and Investor Relations contact Date March 8, 2018 Event Full Year Results 2017 & Press and Analysts Conference May 2, 2018 First Quarter Results 2018 May 3, 2018 Annual Shareholders Meeting 2018 Investor Relations Contact Dennis Weber, CFA Head of Investor Relations Phone: +49 (0) Frank Böhme Investor Relations Manager Phone: +49 (0) Commerzbank German Investment Seminar 2018 HUGO BOSS January

66 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. Commerzbank German Investment Seminar 2018 HUGO BOSS January

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