Annual Report 2023

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In fiscal year 2023, HUGO BOSS invested EUR 298 million in property, plant, and equipment, and intangible assets, representing a strong increase of 55% as compared to the prior-year level (2022: EUR 192 million). The further step-up in capital expenditure aims to support the ongoing successful execution of “CLAIM 5” by increasing investments in our global store network, further digitalizing our business model, and expanding our logistics capacities. Consequently, as a percentage of sales, capital expenditure amounted to 7.1% (2022: 5.2%), and thus at the upper end of our mid-term target corridor as laid out in “CLAIM 5” (target range for 2023–2025: 6% to 7% of sales).

Capital expenditure

(in %)

2023 (2022 30 (31) 13 (17) 18 (14) 40 (38) 5 (9) 53 (54) 29 (34) 12 (3) By region By functional area EMEA Asia/Pacific Americas Corporate units Other capital expenditure Own retail business Administration (incl. IT) Logistics

In line with our strategic claim “Drive Omnichannel,” we aim to fully exploit the potential of our brick-and-mortar retail business in the coming years. The optimization and modernization of our global store network plays a key role in this. Consequently, we plan to invest a total of EUR 600 million in the further optimization and modernization of our store network between 2021 and 2025. Our latest store concepts are intended to make a significant contribution in upgrading our points of sale. At the end of 2023, around 200 of our freestanding BOSS and HUGO stores were already comprehensively refreshed or equipped with the latest store concepts, including important BOSS halo stores in Dubai and London. Consequently, capital expenditure on our own retail network amounted to EUR 157 million in fiscal year 2023 (2022: EUR 104 million). Investments in the continuous optimization and modernization of existing locations thereby totaled EUR 118 million (2022: EUR 79 million). At the same time, we invested EUR 40 million in the opening of new retail points of sale across all three regions (2022: EUR 25 million), with new BOSS and HUGO stores in Milan (Italy) and Guangzhou (China), among others. Group Strategy, “Drive Omnichannel”

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We remain steadfast in our commitment to 'Drive Omnichannel,' ensuring that every customer interaction with our two brands, BOSS and HUGO, is nothing short of exceptional.

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Capital expenditure on administration amounted to EUR 88 million in the past fiscal year (2022: EUR 65 million). This primarily includes investments of EUR 55 million in our global IT infrastructure (2022: EUR 47 million). In line with our strategic claim “Lead in Digital,” these investments mainly relate to the further digitalization of our business model, including important initiatives of the HUGO BOSS Digital Campus as well as the Company-wide rollout of our next-generation ERP system as part of a multiyear project. At the same time, in 2023, we also increased investments to further expand and enhance our Group’s headquarters in Metzingen (Germany). As part of our “CLAIM 5” growth strategy, we also aim to step up investments with regards to the expansion of our global logistics capacities. Capital expenditure in this context thus amounted to EUR 36 million in the past fiscal year (2022: EUR 5 million), also including initial expenditure for the expansion of our distribution center for flat-packed goods in proximity to our headquarters in Metzingen, which is scheduled for completion in 2026. Other capital expenditure on the Company’s production, distribution structure, and research and development amounted to EUR 16 million in 2023 and was thus at around the prior-year level (2022: EUR 17 million). Group Strategy, “Lead in Digital,” “Organize for Growth,” Sourcing and Production

Accumulated depreciation and amortization on property, plant, and equipment, and intangible assets, including own capitalized cost, totaled EUR 1,204 million in fiscal year 2023 (2022: EUR 1,175 million). Existing obligations from investment projects amounted to EUR 33 million as of December 31, 2023 (December 31, 2022: EUR 2 million), mainly relating to the ongoing expansion of our logistics network. Notes to the Consolidated Financial Statements, Note 8