Comparison of actual and forecast business performance

For HUGO BOSS, fiscal year 2022 marked a first important milestone in the successful execution of the Company’s “CLAIM 5” growth strategy. In particular, the new and powerful brand image of BOSS and HUGO drove brand momentum throughout the year, resulting in strong sell-through rates and enabling both brands to successfully expand market share globally. Against this backdrop, HUGO BOSS recorded record sales as well as strong bottom-line improvements, thus exceeding its full-year 2022 sales and earnings targets, which had been revised upwards twice during the course of the year. This stellar business performance is all the more remarkable considering the high level of macroeconomic and geopolitical uncertainty in fiscal year 2022, including global supply chain disruptions, the economic implications of the war in Ukraine, and long-lasting pandemic-related restrictions in China.

The successful execution of several key brand, product, and sales initiatives as part of our “CLAIM 5” strategy significantly spurred our operational and financial performance in 2022. In line with our strategic claim “Boost Brands,” in January 2022 we comprehensively renewed the brand images of BOSS and HUGO as part of our global branding refresh. In particular, record-breaking global marketing campaigns, numerous exciting brand events, as well as inspiring collaborations significantly drove brand relevance for BOSS and HUGO, first and foremost among younger consumers. The branding refresh also became visible within our brands’ collections as part of our strategic claim “Product is King.” In this context, the completely new “look and feel” of our products resulted in strong wholesale order intakes as well as robust sell-through rates in own retail. We achieved important progress in further strengthening the 24/7 lifestyle image of BOSS with the reintroduction of the BOSS Black, BOSS Orange, and BOSS Green brand lines as well as the introduction of BOSS Camel. At the same time, HUGO made important progress towards becoming the first point of contact for younger consumers by strengthening its broad range of trendy and contemporary products. We also achieved important successes with regard to our two strategic claims “Lead in Digital” and “Rebalance Omnichannel”. To these ends, the HUGO BOSS Digital Campus successfully implemented the global relaunch of our digital flagship hugoboss.com in early 2022. At the same time, we pushed ahead with the further optimization and modernization of our global store network. New, innovative store concepts for BOSS and HUGO, which aim to be significantly more inviting, digital, and productive, can already be experienced by customers in more than 60 freestanding stores globally. In this regard, the opening of our new BOSS flagship store on Oxford Street in London in mid-2022 represented an important milestone, with the store’s new retail approach setting the stage for a leading omnichannel journey. In line with our claim “Organize for Growth”, we made further important progress in 2022 towards driving digitalization and increasing efficiency and flexibility along the value chain. In this context, we also opened an additional high-tech factory in Izmir (Turkey) dedicated to the production of casualwear. Our aim is to be able to react even faster and more flexibly in the future, meeting consumer demand in the best possible way. Group Strategy, Sourcing and Production

In the wake of the successful execution of several strategic initiatives, HUGO BOSS recorded strong business performance throughout the entire year. Following the robust financial performance of HUGO BOSS in the first half year of 2022, together with the publication of record second quarter results in July 2022, we increased our initial full-year 2022 sales and earnings forecast, as published in March 2022. The continued strong top- and bottom-line momentum in the third quarter prompted HUGO BOSS to raise its full-year sales and earnings forecast again in November. Having maintained its strong momentum also in the important final quarter, HUGO BOSS finally even exceeded its twice-revised sales and earnings targets for fiscal year 2022.

Group sales in full year 2022 increased by 27% on a currency-adjusted basis. In Group currency, sales grew by 31% to a record level of EUR 3,651 million, thus exceeding the EUR 3 billion threshold for the first time in the history of HUGO BOSS (2021: EUR 2,786 million). Growth was broad-based with both our brands, BOSS and HUGO, as well as all distribution channels recording significant double-digit growth. From a regional perspective, momentum was particularly strong in EMEA and the Americas, while Asia/Pacific was impacted by ongoing COVID-related implications in China. Overall, currency-adjusted Group revenues significantly exceeded pre-pandemic levels by 26% (2019: EUR 2,884 million). Earnings Development, Sales Performance

Despite ongoing brand, product, and digital investments as part of “CLAIM 5”, in fiscal year 2022 we also recorded significant bottom-line improvements, driven by the strong top-line development. Consequently, the Group’s operating profit (EBIT) increased by 47% to an amount of EUR 335 million in fiscal year 2022 (2021: EUR 228 million), resulting in an increase in EBIT margin to a level of 9.2% (2021: 8.2%). Accordingly, the Group’s net income totaled EUR 222 million in fiscal year 2022 (2021: EUR 144 million). Earnings Development, Income Statement

Trade net working capital (TNWC) as a percentage of sales strongly improved to 15.0% (2021: 17.2%), thus at the lower end of the adjusted guidance range of between 15% and 16%. This development mainly reflects the significant top-line growth in fiscal year 2022 as well as the increase in trade payables, which more than compensated for higher inventories, aimed at supporting our strong top-line momentum. Net Assets

In 2022, capital expenditure increased by 84% to EUR 191 million and was thus slightly above the guidance range of EUR 160 million to EUR 190 million (2021: EUR 104 million). Investment activity was once again focused on the further optimization and modernization of our global store network, as well as on expanding our digital capabilities along the entire value chain. Financial Position, Capital Expenditure

In fiscal year 2022, free cash flow amounted to EUR 166 million (2021: EUR 560 million), as improvements in EBIT were more than offset by the increase in inventories as well as the step-up in capital expenditure. Financial Position, Consolidated Statement of Cash Flows