31. July 2012

HUGO BOSS First Half Year Results 2012

Press Releases – Financial

  • Double-digit increase in sales and earnings in the second quarter
  • Operating result (EBITDA before special items) up 16% to EUR 226 million in the first half
  • Continued growth in sales and earnings expected in the second half

Metzingen, July 31, 2012. The HUGO BOSS Group remains on course for growth. In the second quarter of 2012, a double-digit increase in sales was achieved again. The speed of growth was even increased yet again compared with the first quarter.

“We again achieved significant increases in sales and earnings in the first six months”, says Claus-Dietrich Lahrs, Chief Executive Officer of HUGO BOSS AG. “This success was driven by increases in all regions. We are therefore confident that we shall achieve our targets for the year as a whole even in a more challenging economic environment.”

EBITDA before special items grows by 23% in the second quarter

In the second quarter of 2012, sales rose by 14% on a currency-neutral basis. In euros, the Group posted an increase of 20% to EUR 485 million (2011: EUR 405 million). This improvement was supported by growth in all regions. Sales increased by 17% in Europe thanks to double-digit growth in all markets. In the Americas region, the US market was the key driver for a currency-neutral increase of 11%. Revenues in Asia were 4% higher on a currency-neutral basis. All of the region’s markets contributed to this growth.

Wholesale sales in the second quarter were 10% up on the previous year on a currency-neutral basis. This development reflects the introduction of four approximately equally sized collections per year. As a result of this switch, the Summer collection, which is mainly delivered in the second quarter, has become more important. Additionally, compared to the prior year, a greater proportion of the Fall collection was delivered in the second quarter already. Own retail (including outlets and online business) posted currency-adjusted growth of 16%. On a comp store basis, the increase amounted to 4%.

The Group’s contribution margin fell by 110 basis points to 62.4% (2011: 63.5%) because of higher markdowns and inventory writedowns. Despite the cost increases associated with the expansion of own retail and higher marketing expenses, EBITDA before special items increased by 23% to EUR 78 million (2011: EUR 63 million). At 16.1%, the adjusted EBITDA margin increased by 50 basis points in the second quarter (2011: 15.6%).

Group sales grow by 16% in the first half

In the first six months of 2012, the HUGO BOSS Group’s sales rose by 12% on a currency-neutral basis and by 16% in reporting currency to EUR 1,092 million (2011: EUR 945 million). Europe posted currency-adjusted growth of 12%. Sales in the Americas and Asia/Pacific improved by 13% and 7% respectively.

Currency-neutral wholesale sales were 4% up on the previous year, while own retail grew by 21% in the first six months. On a comp store basis, growth in this distribution channel amounted to 7% currency-adjusted.

Helped by marked increases in own retail sales and efficiency improvements in global sourcing and production, the contribution margin was increased by 100 basis points to 61.6% (2011: 60.6%). EBITDA before special items improved by 16% to EUR 226 million (2011: EUR 195 million). At 20.7%, the adjusted EBITDA margin therefore improved by ten basis points (2011: 20.6%).

Debt at the end of the half-year slightly up on the previous year’s level

At the end of the first half, trade net working capital rose by 32% to EUR 483 million (June 30, 2011: EUR 366 million). The growth was primarily attributable to higher trade receivables because of significantly higher delivery volumes towards the end of the period compared with the previous year. The increase in inventories slowed compared with the previous quarter and amounted to 17% in reporting currency and 9% adjusted for currency effects at the end of the period. At EUR 41 million, investments were 11% up on the level of the previous year (2011: EUR 37 million). Net debt increased by EUR 12 million to EUR 301 million (2011: EUR 289 million) as a consequence of these developments and an increase in the dividend payment.

Management confirms and specifies the financial outlook

HUGO BOSS expects to achieve currency-neutral growth in sales of up to 10% in 2012. All regions are to contribute to this. While wholesale sales will remain roughly stable, a double-digit increase is forecast in own retail. The Group projects around 70 new store openings in the course of the year. Particularly as a result of the planned expansion in the own retail network and renovation of existing stores, investments will exceed the figure for the previous year in 2012. An increase of between 10% and 12% is expected for the operating result (EBITDA before special items).

 

If you have any questions, please contact:

Dr. Hjördis Kettenbach

Head of Corporate Communication

Phone: +49 (0) 7123 94-2375

Fax: +49 (0) 7123 94-2051

Dennis Weber

Head of Investor Relations

Phone: +49 (0) 7123 94-86267

Fax: +49 (0) 7123 94-886267

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