Outlook and Targets
Outlook 2022
| Results 2022* | Outlook 2022 | |
|---|---|---|
| Group sales | Increase by 31% to EUR 3,651 million | Increase within a range of 25% to 30% (to EUR 3.5 billion to EUR 3.6 billion) |
Operating result (EBIT) | Increase by 47% to EUR 335 million | Increase within a range of 35% to 45% (to EUR 310 million to EUR 330 million) |
Trade net working capital as a percentage of sales | Will be published on March 9, 2023. (2021: 17.2%) | Decrease to a level of between 15% and 16% |
Capital expenditure | Will be published on March 9, 2023. (2021: EUR 104 million) | Increase to a level of between EUR 160 million to EUR 190 million |
* on a preliminary, non-audited basis
2025 Financial Ambition
With its 'Claim 5' Strategy, HUGO BOSS aims to double sales to EUR 4 billion by 2025, which implies a strong CAGR of 16% taking 2020 as the base year, and 6% as compared to the pre-pandemic level of 2019. To successfully deliver on its strategy, HUGO BOSS will step-up investments into its products, brands, digital capabilities, as well as its global store network, all aimed at fueling industry-leading top-line growth. Consequently, over the next five years, value creation will shift from driving relative margin improvements to delivering strong top-line growth, absolute profitability improvements, as well as superior free cash flow generation.
Until 2025, gross margin is forecast at a level of between 60% and 62%, reflecting product investments to enhance the price-value proposition and fuel top-line growth. At the same time, HUGO BOSS is confident of returning to a strong EBIT margin of around 12% by 2025, translating into an EBIT CAGR of 6% between 2019 and 2025. Investments into the business will be compensated for by leveraging operating overheads as well as strong efficiency gains to be realized by optimizing the Company´s global store network. The latter relates to ongoing relocation and rightsizing initiatives, selective store openings and closings, as well as rent renegotiations. Driven by the significant top- and bottom-line growth, HUGO BOSS will generate substantial cumulative free cash flow between now and 2025. Improvements in trade net working capital and the smart and efficient use of capital expenditure will provide further support to free cash flow development. The majority of cumulative free cash flow around EUR 2 billion until 2025 will either be reinvested into the Company or distributed to shareholders through regular dividend payouts. In this context, the Company´s payout ration until 2025 will be in a range of between 30% and 50% of net income attributable to shareholders.
