Investor Meeting Presentation November 2014 Investor Meeting Presentation HUGO BOSS November 2014 2 / 54
Agenda Update on Key Strategic Initiatives Nine Months Results 2014 Outlook Investor Meeting Presentation HUGO BOSS November 2014 3 / 54
Agenda Update on Key Strategic Initiatives Nine Months Results 2014 Outlook Investor Meeting Presentation HUGO BOSS November 2014 4 / 54
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 Investor Meeting Presentation HUGO BOSS November 2014 5 / 54
Womenswear has built momentum Investor Meeting Presentation HUGO BOSS November 2014 6 / 54
Unprecedented editorial coverage Investor Meeting Presentation HUGO BOSS November 2014 7 / 54
BOSS Womenswear fashion show in New York receives strong feedback Investor Meeting Presentation HUGO BOSS November 2014 8 / 54
THISISBOSS communicates the visual leitmotif of the new BOSS Womenswear collection Investor Meeting Presentation HUGO BOSS November 2014 9 / 54
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 Investor Meeting Presentation HUGO BOSS November 2014 10 / 54
New BOSS Ma Vie fragrance launched Investor Meeting Presentation HUGO BOSS November 2014 11 / 54
Campaign Investor Meeting Presentation HUGO BOSS November 2014 12 / 54
Campaign Investor Meeting Presentation HUGO BOSS November 2014 13 / 54
Retail expansion focuses on Europe Number of own retail stores as of September 30, 2014 (December 31, 2013: 1,010) TOTAL 1,028 (+18) Openings 66 thereof takeovers 17 Closings 48 Europe 593 (+17) Openings 37 thereof takeovers 3 Closings 20 Americas 200 (+/-0) Openings 5 thereof takeovers - Closings 5 Asia/Pacific 235 (+1) Openings 24 thereof takeovers 14 Closings 23 * incl. Middle East and Africa. Investor Meeting Presentation HUGO BOSS November 2014 14 / 54
Extended brand control in department stores Printemps, Paris Saks 5 th Avenue, New York David Jones, Adelaide Investor Meeting Presentation HUGO BOSS November 2014 15 / 54
Digital strategy progresses with improvements to hugoboss.com Investor Meeting Presentation HUGO BOSS November 2014 16 / 54
Germany and the UK lead growth in Europe Sales in Germany and the UK increase by 12% and 17% respectively Pick-up in wholesale supports third quarter sales development Retail growth moderates towards end of quarter Sales Europe (in EUR million) 423 458 1,091 1,185 Q3 2013 Q3 2014 9M 2013 9M 2014 Sales growth Europe (in %) in EUR fx-adjusted Q3 2014 9M 2014 8 9 8 9 Investor Meeting Presentation HUGO BOSS November 2014 17 / 54
Momentum in the Americas improves steadily Wholesale sales growth acceleration supports third quarter performance Improving trends in Saks concession business Gerrit Rützel to lead regional management team from January onwards Sales Americas (in EUR million) 156 143 406 412 Q3 2013 Q3 2014 9M 2013 9M 2014 Sales growth Americas (in %) in EUR fx-adjusted Q3 2014 9M 2014 9 1 11 6 Investor Meeting Presentation HUGO BOSS November 2014 18 / 54
Mixed trends in Asia/Pacific despite double-digit increases in the third quarter Strong growth in Australia and Japan Wholesale delivery shift supports third quarter performance in China while retail trends remain mixed Operational challenges in former JV activities in China thoroughly addressed Sales Asia/Pacific (in EUR million) 87 247 78 252 Q3 2013 Q3 2014 9M 2013 9M 2014 Sales growth Asia/Pacific (in %) in EUR fx-adjusted Q3 2014 9M 2014 12 2 13 7 Investor Meeting Presentation HUGO BOSS November 2014 19 / 54
Art of Tailoring exhibition strengthens brand perception in menswear clothing in Asia Investor Meeting Presentation HUGO BOSS November 2014 20 / 54
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 Investor Meeting Presentation HUGO BOSS November 2014 21 / 54
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 Investor Meeting Presentation HUGO BOSS November 2014 22 / 54
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) Investor Meeting Presentation HUGO BOSS November 2014 23 / 54
New flat-packed goods distribution center in Germany fully operational Investor Meeting Presentation HUGO BOSS November 2014 24 / 54
Agenda Update on Key Strategic Initiatives Nine Months Results 2014 Outlook Investor Meeting Presentation HUGO BOSS November 2014 25 / 54
Third quarter supports top and bottom line growth in the first nine months Third quarter results Nine months results Sales (in EUR million) EBITDA before special items (in EUR million) Sales (in EUR million) EBITDA before special items (in EUR million) +9% +5% +6% +4% 658 717 173 182 1,783 1,888 407 423 Q3 2013 Q3 2014 (+9% fx-adjusted) Q3 2013 Q3 2014 9M 2013 9M 2014 (+8% fx-adjusted) 9M 2013 9M 2014 Investor Meeting Presentation HUGO BOSS November 2014 26 / 54
Solid growth in all regions Sales growth by region, y-o-y Q3 2014 (in %) in EUR fx-adjusted Sales growth by region, y-o-y 9M 2014 (in %) in EUR fx-adjusted Europe* 8 8 Europe* 9 9 Americas 9 11 Americas 1 6 Asia/Pacific 12 13 Asia/Pacific 2 7 Group 9 9 Group 6 8 0 5 10 15 0 5 10 Germany and the UK lead growth in Europe Wholesale sales growth acceleration supports third quarter performance in the Americas Mixed trends in Asia/Pacific despite double-digit increases in the third quarter *incl. Middle East and Africa. Investor Meeting Presentation HUGO BOSS November 2014 27 / 54
Robust own retail growth drives Group sales increase Sales growth by channel, y-o-y Q3 2014 (in %) in EUR fx-adjusted Sales growth by channel, y-o-y 9M 2014 (in %) in EUR fx-adjusted Retail 11 12 Retail 14 16 Wholesale 6 7 Wholesale (3) (1) Royalties 6 6 Royalties 2 2 Group 9 9 Group 6 8 0 5 10 15 (5) 0 5 10 15 20 Solid comp store sales increases (4% in Q3, 4% in 9M) support double-digit retail growth Wholesale sales pick up in the third quarter due to stronger orderbook and solid replenishment demand Successful launch of BOSS MA VIE drives royalties sales increase Investor Meeting Presentation HUGO BOSS November 2014 28 / 54
Cost increases affect margin development in EUR million 9M 2014 9M 2013* Change in % Sales 1,888.0 1,783.1 6 Gross profit 1,232.8 1,131.5 9 In % of sales 65.3 63.5 180 bp Selling and distribution expenses (705.9) (627.1) (13) Administration expenses (179.9) (163.6) (10) Other operating income and expenses (3.4) (3.4) (1) Operating result (EBIT) 343.6 337.4 2 In % of sales 18.2 18.9 (70) bp Financial result (7.0) (15.7) 55 Earnings before taxes 336.6 321.7 5 Income taxes (77.4) (74.0) (5) Net income 259.2 247.7 5 Attributable to: Equity holders of the parent company 258.0 244.7 5 Earnings per share (EUR)** 3.74 3.55 5 Channel mix and lower markdowns support gross profit margin development Step-up in marketing expenditures and higher own retail costs weigh on EBITDA Improved financial result and lower minorities benefit net income growth EBITDA before special items 423.4 407.4 4 In % of sales 22.4 22.8 (40) 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. Investor Meeting Presentation HUGO BOSS November 2014 29 / 54
Region Europe records solid margin improvement Segment profit in EUR million 9M 2014 In % of sales 9M 2013* In % of sales Change in % Europe** 415.8 35.1 369.0 33.8 13 Americas 98.4 23.9 98.2 24.2 0 Asia/Pacific 72.9 28.9 84.0 34.0 (13) Royalties 33.1 83.5 32.7 84.1 1 Segment profit operating segments 620.2 32.8 583.9 32.7 6 Corporate units/consolidation (196.8) (176.5) (12) EBITDA before special items 423.4 22.4 407.4 22.8 4 Good top line momentum supports margin increase in Europe Marketing cost increases weigh on profitability in the Americas Muted sales development and brand investments cause operating deleverage in Asia/Pacific *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. **Incl. Middle East and Africa. Investor Meeting Presentation HUGO BOSS November 2014 30 / 54
Inventory increase drives higher working capital position Inventories (in EUR million) Sep. 30, 2014 Sep. 30, 2013 409 486 +19% +15% fx-adjusted Primarily reflects retail expansion Healthy age structure Trade receivables (in EUR million) Sep. 30, 2014 Sep. 30, 2013 242 265 +10% 7% fx-adjusted Increase due to pick-up in wholesale business Trade payables (in EUR million) Sep. 30, 2014 Sep. 30, 2013 202 205 (1)% (3)% fx-adjusted Decline due to different timing of payments Trade net working capital up 23% to EUR 548 million Investor Meeting Presentation HUGO BOSS November 2014 31 / 54
Lower investments support free cash flow generation Investments (in EUR million) Free cash flow (in EUR million) Net debt (in EUR million) 142 (39)% +45% 152 182 (16)% 153 86 105 9M 2013 9M 2014 Moderation primarily due to non-recurrence of infrastructure projects 9M 2013 9M 2014 Cash generation supported by profit growth and lower investments Sep. 30, 2013 Sep. 30, 2014 Reduction due to free cash flow increase Investor Meeting Presentation HUGO BOSS November 2014 32 / 54
Agenda Update on Key Strategic Initiatives Nine Months Results 2014 Outlook Investor Meeting Presentation HUGO BOSS November 2014 33 / 54
Full year financial guidance adjusted Outlook 2014 Sales growth (currency-adjusted) 6% - 8% Growth of EBITDA before special items 5% - 7% Capex Around EUR 130 million Own retail network Around 50 openings (excl. takeovers) Investor Meeting Presentation HUGO BOSS November 2014 34 / 54
HUGO BOSS records solid financial performance in challenging market environment HUGO BOSS is making good progress in business model transformation towards retail Adjustment of 2014 full year guidance reflects recent deterioration in economic and industry environment in Europe and Asia Important strategic initiatives to contribute to Group growth going forward Investor Meeting Presentation HUGO BOSS November 2014 35 / 54
BACKUP Investor Meeting Presentation HUGO BOSS November 2014 36 / 54
HUGO BOSS brand architecture market segment luxury premium casual urban chic modern active modern sophisticated progressive contemporary fashion statement Investor Meeting Presentation HUGO BOSS November 2014 37 / 54
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 Investor Meeting Presentation HUGO BOSS November 2014 38 / 54
Sales by region 2013 14% Share of Group sales* Asia/Pacific Europe 24% 60% Americas *+2% Royalties. Investor Meeting Presentation HUGO BOSS November 2014 39 / 54
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 1,729 22.8% 22.5% 23.2% 20.5% 17.2% 269 354 470 528 565 2009 2010 2011 2012 2013 Target to generate EUR 3bn sales (in 2015) and 25% EBITDA margin (after 2015) Investor Meeting Presentation HUGO BOSS November 2014 40 / 54
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% 2009 2010 2011 2012 2013 Target to generate more than 60% of Group sales in retail by 2015 Investor Meeting Presentation HUGO BOSS November 2014 41 / 54
Retail comp stores sales growth Sales growth retail l-f-l* Retail l-f-l 18 16% 15 12 11% 13% 12% 11% 9 10% 6 3 4% 2% 4% 5% 2% 2% 4% 3% 6% 4% 4% 2% 0 Q1 2011 Q2 2011 Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Q1 2014 Q2 2014 Q3 2014 *fx-adjusted. Investor Meeting Presentation HUGO BOSS November 2014 42 / 54
Five year overview* in EUR million 2013 2012 2011 2010 2009 Earnings Position Sales 2,432.1 2,345.9 2,058.8 1,729.4 1,561.9 Gross profit 1,579.6 1,444.1 1,252.0 1,022.4 836.2 EBITDA 561.4 523.9 468.0 340.1 226.5 EBITDA before special items 564.7 528.1 469.5 353.7 269.2 EBIT 456.2 432.0 394.6 267.9 157.4 Net income attributable to equity holders of the parent company 329.0 306.5 284.9 188.9 105.5 Financial Position and Dividend Free cash flow 230.0 220.6 194.9 246.3 299.5 Net debt 57.0 130.4 149.1 201.1 379.1 Capital expenditures 185.3 165.8 108.5 55.6 48.3 Depreciation/amortization 105.3 91.9 73.4 72.2 69.1 Dividend 230.5 215.3 199.1 139.7 66.6 Asset and Liability Structure Total assets 1,501.3 1,577.2 1,419.6 1,342.8 1,065.4 Shareholders' equity 740.3 631.6 517.3 361.2 205.5 Trade net working capital 431.8 408.5 399.6 322.7 295.6 Non-current assets 611.5 587.7 503.2 454.5 435.0 Key Ratios Gross profit margin in % 64.9 61.6 60.8 59.1 53.5 Adjusted EBITDA margin in % 23.2 22.5 22.8 20.5 17.2 Total leverage** 0.1 0.2 0.3 0.6 1.4 Equity ratio in % 49.3 40.0 36.4 26.9 19.3 *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. Investor Meeting Presentation HUGO BOSS November 2014 43 / 54
Income statement in EUR million Q3 2014 Q3 2013* Change in % 9M 2014 9M 2013* Change in % Sales 716.5 657.9 9 1,888.0 1,783.1 6 Cost of sales (257.3) (240.0) (7) (655.2) (651.6) (1) Gross profit 459.2 417.9 10 1,232.8 1,131.5 9 In % of sales 64.1 63.5 60 bp 65.3 63.5 180 bp Selling and distribution expenses (245.5) (219.0) (12) (705.9) (627.1) (13) Administration expenses (59.1) (49.1) (20) (179.9) (163.6) (10) Other operating income and expenses (2.6) 0.7 < (100) (3.4) (3.4) (1) Operating result (EBIT) 152.0 150.5 1 343.6 337.4 2 In % of sales 21.2 22.9 (170) bp 18.2 18.9 (70) bp Net interest income/expense (1.4) (1.3) (8) (3.3) (7.5) 56 Other financial items (1.6) (3.1) 48 (3.7) (8.2) 55 Financial result (3.0) (4.4) 33 (7.0) (15.7) 55 Earnings before taxes 149.0 146.1 2 336.6 321.7 5 Income taxes (34.3) (33.6) (2) (77.4) (74.0) (5) Net income 114.7 112.5 2 259.2 247.7 5 Attributable to: Equity holders of the parent company 114.7 110.9 3 258.0 244.7 5 Non-controlling interests 0 1.6 (100) 1.2 3.0 (60) Earnings per share (EUR)** 1.67 1.61 4 3.74 3.55 5 EBITDA before special items 181.9 173.1 5 423.4 407.4 4 In % of sales 25.4 26.3 (90) bp 22.4 22.8 (40) 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. Investor Meeting Presentation HUGO BOSS November 2014 44 / 54
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% 2006 2007 2008 2009 2010 2011 2012 2013 Investor Meeting Presentation HUGO BOSS November 2014 45 / 54
Retail network Number of own retail stores: 1,010 + 37 + 5 + 15 France + 6 Italy + 4 Great Britain + 3 Germany + 2 Spain + 1 Turkey + 1 Switzerland + 1 Sweden + 1 Russia + 1 Poland + 1 Finland + 1 Denmark + 2 Canada + 2 Mexico + 1 USA + 24 (48) + 14 Australia + 4 Taiwan + 3 China + 2 Hong Kong + 1 Japan 1,028 Dec 31, 2013 Europe* Americas Asia/Pacific Closings Sep 30, 2014 *Europe incl. Middle East and Africa. Investor Meeting Presentation HUGO BOSS November 2014 46 / 54
Trade net working capital Average trade net working capital as a percentage of sales by quarter* (in %) 22 20 18 20.1 20.6 20.7 19.8 19.7 18.6 18.0 17.9 +70 bp 17.9 18.1 18.7 16 14 12 10 8 6 4 2 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 *Certain amounts shown here do not correspond to the figures published in prior years and reflect adjustments made. Investor Meeting Presentation HUGO BOSS November 2014 47 / 54
Dividends Dividend and payout ratio in EUR in %* 3.50 3.34 90 3.12 3.00 2.88 80 75% 70 2.50 70% 70% 70% 64% 60 2.02 2.00 50 1.50 40 1.00 0.96 30 20 0.50 10 0.00 0 2009 2010 2011 2012 2013 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. Investor Meeting Presentation HUGO BOSS November 2014 48 / 54
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 Investor Meeting Presentation HUGO BOSS November 2014 49 / 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, 2014. Investor Meeting Presentation HUGO BOSS November 2014 50 / 54
Financial calendar 2014/2015 Date Event November 19, 2014 Date March 12, 2015 Investor Day Press and Analysts Conference May 6, 2015 First Quarter Results May 12, 2015 Annual Shareholders Meeting August 4, 2015 First Half Year Results November 3, 2015 Nine Months Results Investor Meeting Presentation HUGO BOSS November 2014 51 / 54
Investor Relations contact Dennis Weber, CFA Head of Investor Relations Phone: +49 (0) 7123 94-86267 E-Mail: Dennis_Weber@hugoboss.com Internet: www.hugoboss.com Investor Meeting Presentation HUGO BOSS November 2014 52 / 54
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. Investor Meeting Presentation HUGO BOSS November 2014 53 / 54