Hugo Boss : Press Release (EN I March 5, 2020)

Press release on the full year 2019 results

Metzingen, March 5, 2020

HUGO BOSS makes significant progress in executing its strategy - dividend increase reflects strong improvement in free cash flow

Full year 2019

• Currency-adjustedGroup sales up 2% to EUR 2.9 billion
• EBIT amounts to EUR 333 million*
• Dividend increases 5 cents to EUR 2.75 per share

Outlook 2020

• Spread of the coronavirus to weigh on business of HUGO BOSS, particularly in China
• Currency-adjustedsales expected to develop in a range of 0% to +2%; EBIT forecasted between EUR 320 million and EUR 350 million

"2019 was an eventful year for HUGO BOSS. Importantly, we have made further progress in implementing our strategy", says Mark Langer, Chief Executive Officer of HUGO BOSS AG. "We strengthened our personalized offerings, significantly expanded our online business and increased retail sales productivity in our stores. After a very good start to 2020, our business in Asia is currently being significantly impacted by the spread of the coronavirus. Nevertheless, we are firmly convinced of the great potential of our BOSS and HUGO brands in this key region."

HUGO BOSS increased sales by 3% to EUR 2,884 million in fiscal year 2019, representing a currency-adjusted increase of 2%. In the Group's own retail business, currency-adjusted sales grew 4%. As in the prior year, the online business recorded

• Without taking into account the effects of IFRS 16. The effects of IFRS 16 on the Group's earnings development in
  2019 are shown on page 5 et seq. of this press release.

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significant double-digit growth. Wholesale sales declined 3%, partly reflecting the persistently difficult market environment in the U.S.. At EUR 333 million, operating profit (EBIT) in fiscal year 2019 was 4% below the prior year level (excluding IFRS 16). This is attributable to a lower gross profit margin as well as an increase in operating expenses. The latter was primarily a result of additional investments in the Group's own retail business.

Consistent execution of strategic initiatives pays off

In 2019, HUGO BOSS made significant progress in implementing its strategic initiatives. All of the strategic growth drivers - online, retail sales productivity, HUGO and Asia - made above-average contributions to sales growth in the past year:

• Currency-adjustedsales in the own online business increased 35% to
  EUR 151 million, mainly driven by the expansion of online partnerships. It also reflects the growing importance of the own online store, hugoboss.com.
• Investments in the store network are also paying off. Today the Company is already showcasing its BOSS collections in a completely new environment in around 100 of its retail stores globally. This significantly contributed to an increase of retail sales productivity inbrick-and-mortar retail by a total of 4% in 2019.
• With an increase of 5%,currency-adjusted sales of HUGO also grew at an above- average rate in 2019. This was driven by strong double-digit sales growth in
  HUGO's casualwear collections.
• From a regional perspective, Asia/Pacific stood out as particularly positive in the last year, contributing withcurrency-adjusted sales growth of 5%. The successes in this strategically important region are nowhere more evident than in mainland China, which again posted a significant double-digit sales increase in 2019.

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Economic consequences of the coronavirus to weigh on sales and profit growth

With the spread of the coronavirus and the associated restrictions on public life, the retail environment in the Asia/Pacific region, particularly in mainland China, has been severely impacted since the end of January. Regardless of the undiminished huge mid- and long-term potential that HUGO BOSS sees in this region, in the short term, the Company expects significant sales losses over there. After a very encouraging start to the new year, more than half of the Group's around 150 points of sale in mainland China, Hong Kong and Macau have been closed since the end of January. The remaining points of sale mostly operate with severely limited opening hours and have experienced a significant decline in visitors. In addition, the Company is currently recording a noticeable decline in sales in other key markets.

Despite the prevailing high levels of uncertainty, as of today, HUGO BOSS expects a gradual normalization by the middle of the year. At the same time, HUGO BOSS expects the economic consequences of the spread of the coronavirus to have a significant impact on the Group's sales and profit development in 2020, especially in the first quarter. This is taken into account in the estimates presented in the following paragraph regarding the expected business performance in 2020.

HUGO BOSS anticipates that Group sales will develop within a range of 0% to +2% in 2020, adjusted for currency effects. While the Group expects currency-adjusted sales to increase at a low single-digit percentage rate in Europe, the Americas are expected to see a largely stable development of currency-adjusted sales. Currency-adjusted sales in the Asia/Pacific region are forecasted to decline by a single-digit percentage rate. For its own retail business, the Group expects currency-adjusted sales in 2020 to grow at a low to mid-single-digit percentage rate. Currency-adjusted sales in the wholesale business are expected to decrease by a low to mid-single-digit percentage rate. This will primarily be due to the anticipated sales shift in connection with the intensification of the online concession model. Furthermore, HUGO BOSS expects EBIT of between EUR 320 million and EUR 350 million in 2020, with final sales development being crucial to the amount of EBIT that can be expected. The outlook

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on further performance indicators for 2020 can be found on page 10 et seq. of this release.

Higher dividend proposed for 2019

In view of the Group's healthy balance sheet structure and the expected ongoing strong free cash flow generation, the Managing Board and Supervisory Board of HUGO BOSS AG intend to propose to the Annual Shareholders' Meeting on May 7, 2020 a dividend of EUR 2.75 per share for fiscal year 2019 - an increase of five cents as compared to the prior year (2018: EUR 2.70). This is equivalent to a payout ratio of 93% of the consolidated net income attributable to the equity holders of the parent company in 2019 (2018: 79%). Based on the number of shares outstanding at year- end, the amount distributed will come to EUR 190 million (2018: EUR 186 million).

Further information can be found at group.hugoboss.com. The online version of the HUGO BOSS annual reportcan also be found there, with many interactive features and a video statement by Chief Executive Officer Mark Langer.

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Earnings development for the full year of 2019

(in EUR million)
						Jan. - Dec.							Change
					2019							in %
		Jan. - Dec.		IFRS 16		excluding			Jan. - Dec.		Change		excluding
		2019		impact		IFRS 16			2018		in %		IFRS 16
Sales		2,884		0		2,884			2,796		3		3
Cost of sales		(1,009)		0		(1,009)			(973)		(4)		(4)
Gross profit		1,875		0		1,875			1,823		3		3
In % of sales		65.0		0		65.0			65.2		(20) bp		(20) bp
Operating expenses		(1,531)		12		(1,543)			(1,477)		(4)		(4)
In % of sales		(53.1)		40 bp		(53.5)			(52.8)		(30) bp		(70) bp
Thereof selling and distribution expenses		(1,235)		10		(1,245)			(1,176)1		(5)		(6)
Thereof administration expenses		(296)		2		(298)			(301)1		1		1
Operating result (EBIT)		344		12		333			347		(1)		(4)
In % of sales		11.9		40 bp		11.5			12.4		(50) bp		(90) bp
Financial result		(39)		(22)		(17)			(10)		<(100)		(65)
Earnings before taxes		306		(10)		316			337		(9)		(6)
Income taxes		(100)		3		(104)			(101)		0		(3)
Net income		205		(7)		212			236		(13)		(10)
Earnings per share (in EUR)		2.97		(0.10)		3.07			3.42		(13)		(10)
Income tax rate in %		33				33			30

1The figures presented here differ from those reported in the prior year. The other operating expenses and income, reported separately in the Annual Report 2018, have been reclassified retrospectively to cost of sales, selling and distribution expenses as well as administration expenses. This is intended to increase comparability between the expense items for 2019 and 2018.

• HUGO BOSS increasedsalesby 3% to EUR 2,884 million in 2019 (2018: EUR 2,796 million). This represents currency-adjusted sales growth of 2%.
• • Europebenefited from sales growth in many key markets, including Great Britain and France. Sales in Europe rose by 4%, adjusted for currency effects. In the Americas, the difficult market environment in the U.S. and Canada weighed on the sales performance in 2019. Besides lower local demand, also sales generated with tourists decreased over there. Currency-adjusted sales in the region therefore declined 7%. Sales in Asia/Pacificgrew at an above- average rate, primarily thanks to higher sales in China. Adjusted for currency effects, sales in the region rose 5%. In mainland China, currency-adjusted sales increased even at a double-digit rate.
  • In theGroup's own retail business, currency-adjusted sales increased by 4% in 2019. The Group's own online businessin particular posted significant double-digit growth. Currency-adjusted sales grew 35% to EUR 151 million (2018: EUR 110 million), driven by positive effects from the intensification of online partnerships in the concession model. On a comp store basis, currency-

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adjusted sales in the own retail business were 3% above the prior year level. In the wholesale channel, sales declined 3% in 2019, mainly due to the persistently difficult market environment in the U.S. In addition, the intensification of online partnerships in the concession model also had a negative impact on wholesale sales, as expected. Sales in the license businesswere 10% above the prior year level.

• • Both brands -BOSSand HUGO- recorded sales growth in 2019. BOSS benefited from low single-digit growth in both businesswear and casualwear. Adjusted for currency effects, BOSS sales increased by a total of 1%. Thanks to strong double-digit growth in its casualwear collections, HUGO sales increased by 5%, adjusted for currency effects.
• In fiscal year 2019, thegross profit marginwas slightly below the prior year level. Besides higher markdowns, first and foremost in North America, currency effects had a negative impact on the gross profit margin. This was only partially compensated by positive effects from the growing share of sales in the Group's own retail business.
• Operating expensesin 2019 were above the prior year level, both in absolute terms and as a percentage of sales. The increase over the prior year is largely attributable to investments in the Group's own retail business. In addition to the modernization and selective expansion of the store network, the extension of the concession model in the online business also contributed to an increase in selling and distribution expenses. However, the administration expenseswere slightly below the prior year level. High cost discipline more than compensated for higher expenses resulting from changes in the Group's management and additional investments in the ongoing digitization of the business model. Overall, currency effects had a negative impact on operating expenses in 2019.
• EBITin fiscal year 2019 was 1% below the prior year level. Excluding the effects of IFRS 16, this represents a decrease of 4%. This is attributable to the lower gross profit margin as well as the increase in operating expenses. Accordingly, the EBIT marginalso decreased.

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• Thetax rateamounted to 33% in fiscal year 2019 and was therefore above the prior year level, as expected (2018: 30%). The increase is mainly attributable to expenses in connection with the tax field audit at HUGO BOSS AG. The Group's net incomedeclined 13% as a result. Excluding the effects of IFRS 16, this corresponds to a decrease of 10%.

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Net assets and financial position for the full year of 2019

• Adjusted for currency effects,trade net working capital (TNWC)was 3% below the prior year level. Inventorieswere at the prior year level, currency-adjusted. The moving average of trade net working capital as a percentage of sales on the basis of the last four quarters was 20.1% (2018: 19.7%).

• Capital expenditurewas substantially higher than in the prior year. This was driven by higher investments in the modernization of the own retail network and selective store openings, including the largest HUGO BOSS outlet globally at the Metzingen site.
• Free cash flowamounted to EUR 457 million. Excluding IFRS 16, however, free cash flow was EUR 207 million, 22% above the prior year level (2018: EUR 170 million). The increase is largely attributable to improvements in trade net working capital.
• The application of IFRS 16 led to a significant increase innet financial liabilitiesin fiscal year 2019 due to the first-time inclusion of lease liabilities. Excluding the effects of IFRS 16, net financial liabilities were slightly higher than in the prior year, amounting to EUR 83 million (December 31, 2018: EUR 22 million).

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Network of freestanding retail stores

• The number of the Group's ownfreestanding retail storesincreased by 12 (net) to 431 in fiscal year 2019 (December 31, 2018: 419).
• • The opening of 31 newBOSS stores, mainly in Asia and Europe, contrasted with the closures of 22 stores with expiring leases. In addition, five HUGO storeswith their own furniture concept were opened in international metropolises like Singapore and Tokyo. This stood in contrast to two closures.
• Thetotal selling spaceof the Group's own retail business increased 1% to around 156,000 sqm at the end of the year (December 31, 2018: 154,500 sqm). A moderate expansion of selling space in Asia and Europe stood in contrast to a slight space reduction in the Americas.
• Retail sales productivityin the brick-and-mortar retail business increased 4% to around EUR 11,100 per sqm in fiscal year 2019 (2018: EUR 10,700 per sqm).

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Outlook 2020

Outlook 2020

			Results 20191		Outlook 20201
Group sales2	Increase by 2%		Development within a range
			to EUR 2,884 million		of 0% to +2%
Sales by region2
			Increase by 4%		Increase at a low single-digit
Europe	to EUR 1,803 million		percentage range
			Decrease by 7%		Largely stable development
Americas	to EUR 560 million
			Increase by 5%		Decrease at a single-digit
Asia/Pacific		to EUR 438 million		percentage rate
Sales by distribution channel2
			Increase by 4%		Increase at a low to mid-single-digit
Own retail business	to EUR 1,869 million		percentage rate
			Decrease by 3%		Decrease at a low to mid-single-digit
Wholesale	to EUR 931 million		percentage rate
			Decrease by 1%		EUR 320 million
Operating result (EBIT)	to EUR 344 million		to EUR 350 million
			Decrease by 13%		Increase of up to 10%
Group's net income		to EUR 205 million
Trade net working capital	Increase by 40 basis points		Increase by around
as a percentage of sales		to 20.1%		50 basis points
Capital expenditure	EUR 192 million		EUR 140 million
					to EUR 160 million

1. Including the effects of IFRS 16.
2. On acurrency-adjusted basis.

• The outlook for fiscal year 2020 takes into account theeffects of IFRS 16and is based on the respective results for fiscal year 2019, also taking into account the effects of IFRS 16.
• Against the backdrop of the macroeconomic andindustry-specific conditions and taking into account the assessment of the expected financial impact of the coronavirus outlined on page 3 of this release, HUGO BOSS anticipates that Group saleswill develop within a range of 0% to +2% in 2020, adjusted for currency effects. Growth is expected to vary across regions.
• HUGO BOSS expectsoperating result (EBIT)of between EUR 320 million and EUR 350 million in 2020 (2019: EUR 344 million), with final sales development being crucial to the amount of EBIT that can be expected.
• With respect to theGroup's net income, the Company anticipates an increase of up to 10%. This should also be supported by an improvement in the Group tax rate.

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• Against the backdrop of the continuing uncertainties regarding the spread of the coronavirus, HUGO BOSS expectstrade net working capital as a percentage of salesto increase by around 50 basis points in 2020.
• Capital expenditureis expected to total EUR 140 million to EUR 160 million in 2020 (2019: EUR 192 million). The decrease in capital expenditure is mainly attributable to non-recurring investments for the new construction of the largest HUGO BOSS outlet globally at the Metzingen site.
• Adetailed presentation of the outlookfor HUGO BOSS for 2020 can be found in the Annual Report 2019.

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Financial calendar and contacts

March 5, 2020

Full Year Results 2019,

Press conference as well as conference call for financial analysts and investors

May 5, 2020

First Quarter Results 2020

May 7, 2020

Annual Shareholders' Meeting

August 4, 2020

Second Quarter Results 2020 & First Half Year Report 2020

November 3, 2020

Third Quarter Results 2020

If you have any questions, please contact:

Dr. Hjördis Kettenbach

Head of Corporate Communications

Phone:[phone]

Email: [e-mail]

Christian Stöhr

Head of Investor Relations

Phone: [phone]

Email: [e-mail]

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FINANCIAL INFORMATION

on Q4 and Jan. - Dec. 2019

Due to rounding, some numbers may not add up precisely to the totals provided.

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Sales figures - quarter

(in EUR million)
			Q4 2019		Q4 2018		Change in %		Change in %1
Sales		825		783		5		4
Sales by segment
Europe incl. Middle East and Africa		499		458		9		8
Americas		169		177		(4)		(7)
Asia/Pacific		131		124		6		4
Licenses		26		24		9		9
Sales by distribution channel
Own retail business		579		533		9		72
Wholesale		220		226		(3)		(4)
Licenses		26		24		9		9
Sales by brand
BOSS		715		680		5		4
HUGO		110		103		7		5
Sales by gender
Menswear		748		707		6		4
Womenswear			77		75		3		1

1. currency-adjusted.
2. on a comp store basis 3%.

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Further key figures - quarter

								Q4 2019						Change in %
			Q4 2019		IFRS 16 impact			excluding IFRS 16		Q4 2018		Change in %		excluding IFRS 16
Results of operations (in EUR million)
Sales		825		0			825		783		5		5
Gross profit		551		0			551		526		5		5
Gross profit margin in %		66.7		0			66.7		67.3		(50) bp		(50) bp
EBIT		124		2			122		111		12		9
EBIT margin in %1		15.1		30 bp			14.8		14.2		80 bp		50 bp
EBITDA		226		61			166		150		51		11
EBITDA margin in %2		27.4		740 bp			20.1		19.1		830 bp		100 bp
Net income attributable to equity holders
of the parent company		60		(1)			62		67		(10)		(8)
Financial position (in EUR million)
Capital expenditure		62		0			62		60		3		3
Free cash flow		259		64			195		157		65		25
Depreciation/amortization		102		58			44		39		>100		14
Additional key figures (in EUR million)
Personnel expenses		144		0			144		164		(12)		(12)
Shares (in EUR)
Earnings per share		0.87		(0.02)			0.89		0.97		(10)		(8)
Last share price (as of Dec. 31)		43.26		0			43.26		53.92		(20)		(20)
Number of shares (as of Dec. 31)			70,400,000		0			70,400,000		70,400,000		0		0

1. EBIT/sales.
2. EBITDA/sales.

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Sales figures - full year

(in EUR million)
			Jan. ‒ Dec. 2019		Jan. ‒ Dec. 2018		Change in %		Change in %1
Sales		2,884		2,796		3		2
Sales by segment
Europe incl. Middle East and Africa		1,803		1,736		4		4
Americas		560		574		(2)		(7)
Asia/Pacific		438		410		7		5
Licenses		84		76		10		10
Sales by distribution channel
Own retail business		1,869		1,768		6		42
Wholesale		931		952		(2)		(3)
Licenses		84		76		10		10
Sales by brand
BOSS		2,488		2,422		3		1
HUGO		396		374		6		5
Sales by gender
Menswear		2,609		2,517		4		2
Womenswear			275		279		(1)		(2)

1. currency-adjusted.
2. on a comp store basis 3%.

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Further key figures - full year

									Jan. - Dec. 2019						Change in %
				Jan. - Dec. 2019		IFRS 16 impact			excluding IFRS 16		Jan. ‒ Dec. 2018		Change in %		excluding IFRS 16
Results of operations (in EUR million)
Sales				2,884		0			2,884		2,796		3		3
Gross profit				1,875		0			1,875		1,823		3		3
Gross profit margin in %				65.0		0			65.0		65.2		(20 bp)		(20 bp)
EBIT				344		12			333		347		(1)		(4)
EBIT margin in %1				11.9		40 bp			11.5		12.4		(50) bp		(90) bp
EBITDA				707		240			467		476		48 bp		(2) bp
EBITDA margin in %2				24.5		830 bp			16.2		17.0		750 bp		(90) bp
Net income attributable to equity holders
of the parent company				205		(7)			212		236		(13)		(10)
Net assets and liability structure
as of Dec. 31 (in EUR million)
Trade net working capital				528		0			528		537		(2)		(2)
Trade net working capital in % of sales3		20.1		0			20.1		19.7		40 bp		40 bp
Non-current assets				1,713		882			831		686		>100		21
Equity				1,002		(7)			1,009		981		2		3
Equity ratio in %				34.8		(1,580) bp			50.6		52.8		(210) bp		(1,800) bp
Total assets				2,877		885			1,993		1,858		55		7
Financial position (in EUR million)
Capital expenditure				192		0			192		155		24		24
Free cash flow				457		250			207		170		>100		22
Depreciation/amortization				362		229			134		130		>100		3
Net financial liabilities (as of Dec. 31)		1,040		957			83		22		>100		>100
Total leverage (as of Dec. 31)4				n.a.		n.a.			0.2	0.0		n.a.	>100
Additional key figures
Employees (as of Dec. 31)				14,633		0			14,633		14,685		0		0
Personnel expenses (in EUR million)	640		0			640	629	2	2
Shares (in EUR)
Earnings per share				2.97		(0.10)			3.07		3.42		(13)		(10)
Last share price (as of Dec. 31)				43.26		0			43.26		53.92		(20)		(20)
Number of shares (as of Dec. 31)				70,400,000		0			70,400,000		70,400,000		0		0
1EBIT/sales.	3Moving average of the last four quarters.
2EBITDA/sales.	4Net financial liabilities/EBITDA before special items.

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Consolidated income statement - quarter

(in EUR million)
								Q4 2019						Change in %
			Q4 2019		IFRS 16 impact			excluding IFRS 16		Q4 2018		Change in %		excluding IFRS 16
Sales		825		0			825		783		5		5
Cost of sales		(275)		0			(275)		(256)		(7)		(7)
Gross profit		551		0			551		526		5		5
In % of sales		66.7		0			66.7		67.3		(50 bp)		(50 bp)
Operating expenses		(426)		2			(429)		(415)		(3)		(3)
In % of sales		(51.7)		30 bp			(52.0)		(53.0)		140 bp		110 bp
Thereof selling and distribution expenses		(349)		0			(350)		(331)1		(6)		(6)
Thereof administration expenses		(77)		2			(79)		(84)1		8		6
Operating result (EBIT)		124		2			122		111		12		9
In % of sales		15.1		30 bp			14.8		14.2		80 bp		50 bp
Financial result		(15)		(5)			(9)		(3)		<(100)		<(100)
Earnings before taxes		110		(3)			113		108		1		4
Income taxes		(49)		1			(51)		(41)		(20)		(24)
Net income		60		(1)			62		67		(10)		(8)
Earnings per share (in EUR)		0.87		(0.02)			0.89		0.97		(10)		(8)
Income tax rate in %			45					45		38

1The figures presented here differ from those reported in the prior year. The other operating expenses and income, reported separately in the Annual Report 2018, have been reclassified retrospectively to cost of sales, selling and distribution expenses as well as administration expenses. This is intended to increase comparability between the expense items for 2019 and 2018.

EBIT and EBITDA - quarter

(in EUR million)
								Q4 2019						Change in %
			Q4 2019		IFRS 16 impact			excluding IFRS 16		Q4 2018		Change in %		excluding IFRS 16
EBIT		124		2			122		111		12		9
In % of sales		15.1		30 bp			14.8		14.2		80 bp		50 bp
Depreciation and amortization		(102)		(58)			(44)		(39)		<(100)		(14)
EBITDA		226		61			166		150		51		11
In % of sales			27.4		740 bp			20.1		19.1		830 bp		100 bp

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Consolidated income statement - full year

(in EUR million)
								Jan. - Dec. 2019						Change in %
			Jan. - Dec. 2019		IFRS 16 impact			excluding IFRS 16		Jan. - Dec. 2018		Change in %		excluding IFRS 16
Sales		2,884		0			2,884		2,796		3		3
Cost of sales		(1,009)		0			(1,009)		(973)		(4)		(4)
Gross profit		1,875		0			1,875		1,823		3		3
In % of sales		65.0		0			65.0		65.2		(20) bp		(20) bp
Operating expenses		(1,531)		12			(1,543)		(1,477)		(4)		(4)
In % of sales		(53.1)		40 bp			(53.5)		(52.8)		(30) bp		(70) bp
Thereof selling and distribution expenses		(1,235)		10			(1,245)		(1,176)1		(5)		(6)
Thereof administration expenses		(296)		2			(298)		(301)1		1		1
Operating result (EBIT)		344		12			333		347		(1)		(4)
In % of sales		11.9		40 bp			11.5		12.4		(50) bp		(90) bp
Financial result		(39)		(22)			(17)		(10)		<(100)		(65)
Earnings before taxes		306		(10)			316		337		(9)		(6)
Income taxes		(100)		3			(104)		(101)		0		(3)
Net income		205		(7)			212		236		(13)		(10)
Earnings per share (in EUR)		2.97		(0.10)			3.07		3.42		(13)		(10)
Income tax rate in %			33					33		30

1The figures presented here differ from those reported in the prior year. The other operating expenses and income, reported separately in the Annual Report 2018, have been reclassified retrospectively to cost of sales, selling and distribution expenses as well as administration expenses. This is intended to increase comparability between the expense items for 2019 and 2018.

EBIT and EBITDA - full year

(in EUR million)
								Jan. - Dec. 2019						Change in %
			Jan. - Dec. 2019		IFRS 16 impact			excluding IFRS 16		Jan. - Dec. 2018		Change in %		excluding IFRS 16
EBIT		344		12			333		347		(1)		(4)
In % of sales		11.9		40 bp			11.5		12.4		(50) bp		(90) bp
Depreciation and amortization		(362)		(229)			(134)		(130)		<(100)		(3)
EBITDA		707		240			467		476		48		(2)
In % of sales			24.5		830 bp			16.2		17.0		750 bp		(90) bp

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Consolidated statement of financial position - assets

(in EUR million)
							December 31, 2019
			December 31, 2019		IFRS 16 impact		excluding IFRS 16		December 31, 2018
Property, plant and equipment		517		0		517		389
Intangible assets		197		0		197		185
Right-of-use assets		877		877		0		0
Deferred tax assets		98		4		94		90
Non-current financial assets		22		0		22		19
Other non-current assets		2		0		2		3
Non-current assets		1,713		882		831		686
Inventories		627		0		627		618
Trade receivables		216		0		216		214
Current tax receivables		33		0		33		39
Current financial assets		32		0		32		32
Other current assets		123		3		120		123
Cash and cash equivalents		133		0		133		147
Current assets		1,164		3		1,161		1,172
TOTAL			2,877		885		1,993		1,858

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HUGO BOSS AG Dieselstrasse 12 72555 Metzingen Germany Phone [phone] Fax [phone]

Consolidated statement of financial position - equity and liabilities

(in EUR million)
								December 31, 2019
			December 31, 2019		IFRS 16 impact			excluding IFRS 16			December 31, 2018
Subscribed capital		70		0			70		70
Own shares		(42)		0			(42)		(42)
Capital reserve		0		0			0		0
Retained earnings		933		(6)			939		926
Accumulated other comprehensive income		40		(1)			41		26
Equity attributable to equity holders of the parent company		1,002		(7)			1,009		981
Non-controlling interests		0		0			0		0
Group equity		1,002		(7)			1,009		981
Non-current provisions		87		0			87		69
Non-current financial liabilities		106		0			106		83
Non-current lease liabilities		789		789			0		0
Deferred tax liabilities		11		1			10		13
Other non-current liabilities		0		(60)			61		61
Non-current liabilities		994		730			264		225
Current provisions		92		0			92		98
Current financial liabilities		112		0			112		93
Current lease liabilities		168		168			0		0
Income tax payables		66		0			66		44
Trade payables		315		0			315		295
Other current liabilities		130		(6)			136		123
Current liabilities		882		162			720		653
TOTAL			2,877		885			1,993		1,858
Trade net working capital (TNWC)
(in EUR million)
											Currency-adjusted
			December 31, 2019		December 31, 2018			Change in %			change in %
Inventories		627		618		1		0
Trade receivables		216		214		1		(1)
Trade payables		315		295		7		5
Trade net working capital (TNWC)			528		537		(2)		(3)

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Consolidated statement of cash flows

(in EUR million)
							Jan. - Dec. 2019
			Jan. - Dec. 2019		IFRS 16 impact		excluding IFRS 16		Jan. ‒ Dec. 2018
Net income		205		(7)		212		236
Depreciation/amortization		362		229		134		130
Unrealized net foreign exchange gain/loss		(4)		0		(4)		3
Other non-cash transactions		1		0		1		0
Income tax expense/income		100		(3)		104		100
Interest income and expenses		31		22		9		3
Change in inventories		4		0		4		(72)
Change in receivables and other assets		9		0		9		(13)
Change in trade payables and other liabilities		38		9		28		22
Result from disposal of non-current assets		(1)		0		(1)		0
Change in provisions for pensions		(12)		0		(12)		(9)
Change in other provisions		(5)		0		(5)		(7)
Income taxes paid		(77)		0		(77)		(72)
Cash flow from operating activities		652		250		402		322
Investments in property, plant and equipment		(158)		0		(158)		(122)
Investments in intangible assets		(34)		0		(34)		(31)
Acquisition of subsidiaries and other business entities
less cash and cash equivalents acquired		0		0		0		(1)
Acquisition of groups of assets		(4)		0		(4)		0
Cash receipts from disposal of property, plant and equipment and intangible assets		0		0		0		2
Cash flow from investing activities		(195)		0		(195)		(152)
Dividends paid to equity holders of the parent company		(186)		0		(186)		(183)
Change in current financial liabilities		0		0		0		23
Cash receipts from non-current financial liabilities		0		0		0		24
Repayment of non-current financial liabilities		(35)		0		(35)		(3)
Repayment of lease liabilities		(227)		(227)		0		0
Interest paid		(25)		(22)		(3)		(2)
Interest received		2		0		2		2
Cash flow from financing activities		(472)		(250)		(223)		(139)
Exchange-rate related changes in cash and cash equivalents		1		0		1		0
Change in cash and cash equivalents		(14)		0		(14)		31
Cash and cash equivalents at the beginning of the period		147		0		147		116
Cash and cash equivalents at the end of the period			133		0		133		147

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Free cash flow

(in EUR million)
							Jan. - Dec. 2019
			Jan. - Dec. 2019		IFRS 16 impact		excluding IFRS 16		Jan. ‒ Dec. 2018
Cash flow from operating activities		652		250		402		322
Cash flow from investing activities		(195)		0		(195)		(152)
Free cash flow			457		250		207		170

Segment earnings

Starting in fiscal year 2019, EBITreplaces EBITDA before special items, used by the Group up through 2018, as one of the key performance indicators. As such, from this year onwards, segment profits will also be presented on the basis of EBIT. The corresponding prior year figures therefore deviate from the figures reported in 2018.

As part of a consolidation of additional functionsat HUGO BOSS AG in fiscal year 2019, additional intercompany expenses were allocated to the business segments. This led to a higher burden on segment earnings for Europe, the Americas and the Asia/Pacific region compared to the prior year. The Group's operating profit in total remained unaffected by this reallocation. For the quarters Q1 to Q3 2019, the segment earnings for Europe, the Americas and the Asia/Pacific region have been adjusted retrospectively. They are presented on the following pages.

Segment earnings - first quarter

(in EUR million)
			Q1 2019			In % of sales		Q1 2018		In % of sales		Change in %
Europe		102			24,0		112			27,0		(9)
Americas		4			3,3		8			6,5		(52)
Asia/Pacific		26			24,0		24			24,2		7
Licenses		14			81,6		14			83,1		2
Earnings of operating segments		146			21,9		158			24,2		(8)
Corporate units / consolidation		(88)					(88)					0
EBIT			57			8,6		70			10,7		(17)

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Segment earnings - second quarter

(in EUR million)
			Q2 2019		In % of sales		Q2 2018		In % of sales		Change in %
Europe		104		25,5		114			28,6		(9)
Americas		15		10,4		17			12,6		(14)
Asia/Pacific		27		24,5		18			17,7		49
Licenses		15		82,5		13			79,2		15
Earnings of operating segments		160		23,7		163			24,9		(2)
Corporate units / consolidation		(80)				(89)					(10)
EBIT			80		11,8		74			11,3		8

Segment earnings - third quarter

(in EUR million)
		Q3 2019		In % of sales		Q3 2018		In % of sales		Change in %
Europe		123		26,1		132		28,5		(7)
Americas		12		9,1		16		11,3		(23)
Asia/Pacific		10		11,3		11		12,6		(7)
Licenses		18		83,6		17		86,8		9

Earnings of operating segments		164			22,8		174			24,5			(6)
Corporate units / consolidation		(81)					(82)						(1)
EBIT			83			11,5		92			13,0	(10)

Segment earnings - fourth quarter

(in EUR million)
		Q4 2019			In % of sales		Q4 2018		In % of sales		Change in %
Europe		127			25,5		135		29,4		(6)
Americas		30			17,5		27		15,4		10
Asia/Pacific		31			23,8		29		23,5		7
Licenses		22			86,1		20		84,1		11

Earnings of operating segments		210			25,5		211		26,9			0
Corporate units / consolidation		(86)					(100)					(14)
EBIT			124			15,1		111		14,2	12

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Segment earnings - full year

(in EUR million)
			Jan. - Dec. 2019		In % of sales		Jan. - Dec. 2018		In % of sales		Change in %
Europe		456		25,3		493			28,4		(7)
Americas		60		10,8		68			11,9		(12)
Asia/Pacific		94		21,4		82			20,0		15
Licenses		70		83,7		64			83,5		10
Earnings of operating segments		680		23,6		706			25,3		(4)
Corporate units / consolidation		(336)				(360)					(7)
EBIT			344		11,9		347			12,4		(1)

Number of own retail stores

Dec. 31, 2019		Freestanding stores		Shop-in-shops		Outlets		Total
Europe		203		311		70		584
Americas		94		84		50		228
Asia/Pacific		134		109		58		301
Total		431		504		178		1,113
Dec. 31, 20181
Europe		200		303		67		570
Americas		89		85		52		226
Asia/Pacific		130		112		54		296
Total			419		500		173		1,092

1The prior year's figures were adjusted retrospectively as of December 31, 2018. As part of a redefinition of the criteria for differentiating freestanding stores and shop-in-shops, a number of points of sale in the Asia/Pacific region that were previously designated as freestanding stores were reclassified as shop-in-shops. In addition, in the course of the two brand strategy, individual points of sale of the BOSS brand within certain department stores were combined numerically into one shop-in-shop, mainly in Europe and the Americas. Both measures have no impact on the Group's total selling space.

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