HUGO BOSS AG

HUGO BOSS AG is the parent company of HUGO BOSS Group. Its annual financial statements are prepared in accordance with the provisions of HGB [“Handelsgesetzbuch”: German Commercial Code]. In addition to the operating business, the results of HUGO BOSS AG are predominately driven by the management of the central functions. A material item in this context is the allocation of costs for services rendered to Group companies.

Earnings development

Sales of HUGO BOSS AG primarily comprise brick-and-mortar retail, brick-and-mortar wholesale, and digital revenues generated in Germany and Austria as well as intercompany sales with its international subsidiaries.

The strong business performance of HUGO BOSS in fiscal year 2023, fueled by the successful execution of “CLAIM 5,” also had a very positive impact on HUGO BOSS AG. Growth was broad-based across all regions, with EMEA, the Americas, and Asia/Pacific posting double-digit sales increases compared to the prior year. Sales generated by HUGO BOSS AG in Germany were also up noticeably as compared to the prior year.

While both brands, BOSS and HUGO, posted significant double-digit sales growth, supported by the ongoing brand momentum in 2023, the Company also recorded a noticeable increase in sales from other services. This was due to higher intercompany charges passed on to subsidiaries, in particular related to service, IT, and marketing.

At 32.0%, the gross margin of HUGO BOSS AG was well above the prior-year level (2022: 29.6%), mainly reflecting lower freight cost levels. The increase in distribution expenses largely reflects higher marketing investments as well as higher fulfillment costs. General administration expenses also grew year over year, mainly due to an increase in personnel expenses in line with the Company’s strategic claim “Organize for Growth” as well as overall cost inflation. The increase in other operating income was largely due to higher income from charging costs and services to affiliated companies. Other operating expenses came in below the prior-year level, mainly reflecting lower research and development costs as well as lower allowances for doubtful accounts and exchange rate effects.

The income from investments is attributable to affiliated companies. In previous years, it primarily reflected the annual profits of HUGO BOSS Trade Mark Management GmbH & Co. KG, which were credited to the loan account of its limited partner HUGO BOSS AG in accordance with Company regulations. However, effective September 1, 2023, HUGO BOSS Trade Mark Management GmbH & Co. KG was merged into HUGO BOSS AG and, as a result, the trademark rights and all associated rights and obligations were transferred to HUGO BOSS AG. In this context, global marketing activities are now consolidated and carried out centrally at our headquarters in Metzingen (Germany), while activities as part of the licensing business continue to be carried out under the HUGO BOSS AG, D-Metzingen, Branch CH. The income from profit and loss transfer agreements of EUR 89 million is attributable to HUGO BOSS Internationale Beteiligungs-GmbH (2022: EUR 81 million).

Net assets and financial position

Property, plant, and equipment, and intangible assets of HUGO BOSS AG increased by 4% compared to the prior year totaling EUR 1,012 million (December 31, 2022: EUR 969 million). This development mainly reflects the step-up in investment activity in fiscal year 2023.

The decrease in inventories mainly reflects lower order volumes as part of our measures to reduce core merchandise inflow. HUGO BOSS AG is the main supplier for the Group’s global distribution companies. Trade receivables of HUGO BOSS AG were well above the prior-year level, mainly reflecting our strong performance in both brick-and-mortar wholesale and digital business generated with wholesale partners. At the same time, the Company recorded a slight increase in trade payables. Consequently, and driven by the strong increase in trade receivables, trade net working capital (TNWC) of HUGO BOSS AG ended fiscal year 2023 above the prior-year level.

At EUR 74 million, receivables from affiliated companies at the end of fiscal year 2023 were above the prior-year level (December 31, 2022: EUR 61 million). Liabilities to affiliated companies decreased to EUR 103 million, mainly due to repayments of loans to HUGO BOSS International B.V. (December 31, 2022: EUR 289 million). Provisions modestly increased to EUR 186 million at the end of the year (December 31, 2022: EUR 154 million), mainly reflecting higher marketing provisions following the merger of HUGO BOSS Trade Mark Management GmbH & Co. KG into HUGO BOSS AG. At EUR 177 million, liabilities to credit institutions were above the prior-year level (December 31, 2022: EUR 60 million), mainly reflecting EUR 175 million of proceeds from the issue of the Schuldschein loan.

As of December 31, 2023, cash and cash equivalents, defined as the total of cash on hand and bank balances, amounted to EUR 2 million and were thus broadly in line with the prior-year level (December 31, 2022: EUR 3 million). A higher cash flow from operating activities, reflecting the strong business performance, was largely offset by an increase in cash flow from investing activities due to higher capital expenditure.

Outlook, risks, and opportunities

Due to its close relationships with the Group companies and its relevance for the Group, the expectations for HUGO BOSS AG are largely reflected in the Group’s outlook. In this context, the net income of HUGO BOSS AG, which represents the Company's key performance indicator, is expected to increase moderately in fiscal year 2024. In addition, business performance of HUGO BOSS AG is, to a large degree, also subject to the same risks and opportunities as those applicable to the Group. Consequently, statements within the Group’s Report on Risks and Opportunities also apply to HUGO BOSS AG. Outlook Report on Risks and Opportunities