Analystsʼ Conference 2017 Metzingen March 9, 2017 Mark Langer Ingo Wilts Bernd Hake Chief Executive Officer Chief Brand Officer Chief Sales Officer HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 2
Mark Langer Chief Executive Officer HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 3
2016 A year of change 4
Industry under pressure in 2016 Overall positive consumption climate does not support industry sales Apparel is losing share of consumers wallet High level of promotions Luxury apparel market growth* (FX-adjusted) 12% 8% 8% 2% 2% 2% (4)% * Source: Bain & Altagamma 2010 2011 2012 2013 2014 2015 2016 5
Company-specific challenges clearly identified Brand positioning unclear Go-to-market approaches different by market Potential of digital underutilized Speed of decision-making and key operational processes slowed by organizational inertia 6
HUGO BOSS responded swiftly to challenges 1 Comprehensive cost savings achieved 2 3 4 5 Optimization of store network initiated Off-price business in the US largely discontinued Global prices harmonized further Foundation built for future growth in digital 7
Strong free cash flow generation despite earnings decline Sales (in EUR million) EBITDA before special items (in EUR million) Free cash flow (in EUR million) 2,809 2,693 (4)%* 594 493 208 220 (17)% +6% FY 2015 FY 2016 FY 2015 FY 2016 FY 2015 FY 2016 * (2)% FX-adjusted 8
Europe records positive sales performance in 2016 8% sales growth in the UK supports increase in Europe Sales by region y-o-y (in %) Decline in the US pressures sales in the Americas Sales momentum in China accelerates throughout the year Europe* Americas (13) (12) (1) 1 Asia/Pacific (3) (2) Group (4) (2) in EUR FX-adjusted * Incl. Middle East and Africa 9
Growth in own retail does not fully offset sales decline in wholesale Retail expansion more than offsets currency-adjusted comp store sales decline of 6% Sales by channel y-o-y (in %) Decline in wholesale business mainly attributable to distribution changes in the US Retail (1) 2 Robust growth in license business Wholesale (11) (9) Licenses 12 12 Group (4) (2) in EUR FX-adjusted 10
Group profitability suffers from operating deleverage Gross profit margin Selling & Distribution expenses 66.0 % 0bp 1,176 EUR million 3% Administration expenses EBITDA (before special items) 272 EUR million 3% 493 EUR million (17)% Special items Net income 67 EUR million >100% 194 EUR million (39)% 11
Tight grip on working capital management despite sales decline Working capital almost stable in relation to sales Average trade net working capital (as a percentage of sales) Inventories (in EUR million) Inventory position in the US and China improves significantly over the course of the year Group s inventory position clean heading into 2017 19.5% 19.8% 560 30bp 2%* 568 * 1% FX-adjusted Dec 31, 2015 Dec 31, 2016 Dec 31, 2015 Dec 31, 2016 12
Investments focus on own retail and IT Investments decrease due to slow down of retail expansion and non-recurrence of prior year one-time projects HUGO BOSS Investments by area 2016 (in %) Two thirds of budget spent on store expansion and refurbishments IT investments underscore focus on digitizing the business model 18% (2015: 25%) 20% EUR 157 million (29)% y-o-y 32% (2015: 32%) 30% (2015: 15%) (2015: 27%) Store openings Store renovations IT Other 13
Strong free cash flow generation despite earnings decline Free cash flow (in EUR million) Net debt (in EUR million) 208 220 113 6% 82 38% FY 2015 FY 2016 Dec 31, 2015 Dec 31, 2016 Lower investments more than offset earnings shortfall Net debt increases on low levels Equity ratio amounts to almost 50% 14
One-time nature of financial year 2016 warrants exception from dividend policy Dividend per share and payout ratio (in EUR) (in %***) 4.00 3.00 2.00 66% 1.45* 85% 1.37 64% 75% 2.02 2.88 70% 3.12 70% 3.34 70% 3.62 75% 3.62 78% 93% 2.60** 100 80 60 40 1.00 0.96 20 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 Dividend policy of paying out between 60% and 80% of consolidated net income reconfirmed * Excluding special dividend of 5.00 per share ** Proposal for fiscal year 2016 *** As a percentage of net income attributable to shareholders 15
Further building brand desirability will drive the Group s long-term success 16
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 17
Ingo Wilts Chief Brand Officer HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 18
Focus on two clearly positioned brands 19
BOSS dresses the demanding customer for all 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 June 2017: Sell in of the collection to wholesale partners January 2018: Spring / Summer collection 2018 in stores 20
New York Fashion Show showcases the elements fundamental to BOSS #NYCFASHIONSHOWFALL/WINTER2017 21
Marketing strategy prioritizes digital and menswear Marketing split Online/Print 50% 60% 70% 2015 2016 2017e Online Print Marketing split Menswear/Womenswear 40% 50% 70% 2015 2016 2017e Menswear Womenswear HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 22
Womenswear continues to be an important part of the BOSS business 23
HUGO represents an exciting long-term growth opportunity CASUAL BUSINESS 24
Bernd Hake Chief Sales Officer HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 25
Wholesale partners welcome clarity and consistency of refined brand positioning Positive overall feedback from wholesale partners on refined brand strategy Order intake for Fall/Winter 2017 in line with expectations, positive momentum in casualwear Group committed to align global selling prices further 26
Target to increase own retail sales productivity by 20% in the next five years 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 27
Store renovations will upgrade own retail network Openings 10-15 freestanding store openings will strengthen the network First HUGO pilot stores planned for 2018 Closures Remaining circa 15 store closures to be completed by the end of the year Some 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 in 2017 28
Online and physical retailing are becoming one 29
Improvement of online business a key priority in 2017 Mobile Service Content Merchandising 30
Mark Langer Chief Executive Officer HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 31
European business to weather industry storms Europe German apparel sales y-o-y (in %) UK branded menswear apparel sales y-o-y** (in %) Broadly stable sales expected in Europe Tough market environment to weigh on sales performance in Germany 0% 3% 5% UK to continue growing solidly in 2017 (2)% (2)% (2)% (2)% (3)% (3)% * Source: Kantar ** Source: Textilwirtschaft 2012 2013 2014 2015 2016 2013 2014 2015 2016 HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 32
Step-by-step improvements targeted in the Americas Americas 5 Personal consumption expenditures for clothing y-o-y (in %)* Slight sales decline forecasted in the Americas Distribution changes in wholesale and footfall declines to affect US performance Solid growth expected in Canada and Brazil 4 3 2 1 0 (1) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec *Source: US Bureau of Economic Analysis 2015 2016 HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 33
Growth in China to drive sales increases in Asia/Pacific WeChat follower Weibo follower Asia/Pacific Slight sales increase expected in Asia/Pacific Successful digital communication an important driver of robust growth in China 124,000 109,000 141,000 161,000 213,000 Continued declines projected in Hong Kong and Macau 2,000 14,000 24,000 2013 2014 2015 2016 2013 2014 2015 2016 HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 34
Group sales to remain largely stable in 2017 Sales by region* Sales by channel* Europe Stable Retail Increase of up to mid single-digit percentage rate, comp store sales -3% to +3% Americas Slight decline Wholesale Decline at a low to mid single-digit percentage rate Asia/ Pacific Slight increase Licenses Solid growth * On a currency-adjusted basis HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 35
Financial outlook expects stabilization of operational performance in 2017 Sales* Largely stable Gross margin EBITDA before special items Net income Capex Free cash flow Slight increase -3% to +3% Low double-digit percentage rate increase EUR 150 million to EUR 170 million Largely stable * On a currency-adjusted basis 36
2017 - A year of stabilization and strategy implementation HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 37
Q&A HUGO BOSS Analysts' Conference 2017 HUGO BOSS March 9, 2017 38
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. 39