Hugo Boss Ag S/Adr

Ladies and gentlemen, welcome to the Q4 full year 2024 results conference call and live webcast. I'm Sandra, the course call operator. I would like to remind you that all participants have been listened on the mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Stöhr, Senior Vice President, Investor Relations. Please go ahead, sir.

Good morning, everyone, and welcome to our full year 2024 financial results presentation hosted by Daniel Griede, CEO of Hugo Boss, and Yves Miller, CFO and COO. Today's conference call will be divided into three parts. Daniel will kick off by highlighting some of our key strategic achievements in 2024. Afterwards, Yves will present our financial performance in the last fiscal year before Daniel provides details on our full year 2025 outlook. As always, we will conclude with a Q&A session where we will be happy to answer your questions. Before I hand over to Daniel, allow me to remind you that all revenue-related growth rates will be discussed on a currency-adjusted basis unless otherwise specified. I would also like to remind you that during the Q&A session, we kindly ask you to limit your questions to a maximum of two. So let's get started, and over to you, Daniel.

Thank you, Christian, and also good morning from my side. Thanks for joining our call today. Since the beginning of our CLAIM5 journey in 2021, we have achieved significant milestones across our strategic priorities. And I am pleased to report that our growth trajectory continued in 2024. We increased group sales to a record level of 4.3 billion euros, while EBIT amounted to 361 million euros. Despite a difficult market environment, and a sharp industry slowdown over the course of the year. When we presented our initial outlook for fiscal year 2024, we, and most likely also you, were somewhat more optimistic about the opportunities that 2024 would bring. At Ducoboz, we were fully committed to making further progress towards our midterm financial ambition. However, over the course of the year, we had to learn that both the world and our industry were being impacted by numerous macroeconomic and geopolitical challenges. First and foremost, these include ongoing, elevate inflation levels and living costs, which weighed on consumer confidence. Geopolitical tension and key election outcomes added further volatility and put consumer demand under pressure in many markets around the globe. Against this backdrop, I'm satisfied how we ended 2024. We achieved our financial targets as adjusted in July and continued our successful Claim 5 journey. For more than three years, we have strengthened brand momentum and achieved above-market growth, reaching €4.3 billion in sales in yet another milestone along this path. It underscores the strengths of Claim5 and the great potential of our brands. The enhanced relevance of Boston Hugo is most evident in our greater presence on social media. Since the launch of Claim5, we have generated more than 130 billion impressions across all channels and over 3 billion engagements. Our social-first approach enables us to add over 11 million new followers. And within our quarterly brand heat index, Boss consistently ranks among the top brands. I'm therefore convinced that today we are operating from a position of strength, both from a financial and a strategic perspective. Over the last several years, we have constantly invested in our brands, product, distribution, digital capabilities, and logistics. These upfront investments form the basis of our operational and financial performance as part of Claim 5. And they will continue to drive us forward, providing an important foundation for long-term profitable growth. In response to the intensifying external challenges and industry headwinds, we adjusted our game plan and adapted to the evolving market environment. We prioritized strategically relevant initiatives and focused more on consumer centricity. This enables us to exploit our global growth opportunity despite all external factors. With a strong commitment to protecting profitability, we also placed emphasis on increasing cost efficiency across all business areas, including operations, marketing, sales, and administration. We will elaborate on these efficiency measures later on, but first, let's take a closer look on some of our most important initiatives, all designed to inspire customers around the world. Welcoming the global icon David Beckham to our BOSS family was certainly a key moment in 2024, fueling brand awareness and driving brand engagement. Importantly, this multi-year partnership goes beyond any of our previous collaborations, both in terms of duration and impact. After this debut in our fall-winter 2004 campaign, The recent launch of our Boss 1 underwear campaign has attracted attention, generating 3 billion impressions in only one month. Following this success, we look forward to the first capsule collection co-created by David to drop later this year. Our global brand campaigns and marketing events, such as our Boss fashion show in Milan and the UGOX Formula 1 event in Miami, drove additional excitement throughout the year. Importantly, we also made strong progress in driving marketing effectiveness. With our latest Boss Brand campaign, for example, we were able to more than double the level of engagement and social media as compared to last year's campaign. And during our fashion show in Milan, we reached over 40 million views, making it the most successful fashion show in our industry. As in previous years, we remained committed to delivering exceptional products with a superior price value proposition. We sharpened our brand's 24-7 lifestyle positioning and further leveraged the potential of our brand lines, including our exclusive assortment on the Boss Camel. The launch of Yugo Blue marked another important milestone in this direction, expanding our denim wear offering to a new generation of consumers. Our commitment to continuously improving the customer experience and providing a superior brand experience at all points of contact was just evident in 2024. With the launch of our next level loyalty program, the Hugo Boss XP, we are strengthening the connection with our most valuable customers and deepening their loyalty. In 2024 alone, this enabled us to grow our member base by 25%, surpassing 10 million registered Boss and Yugo customers for the first time. Moving forward, Yugo Boss 6P will play an important role in further expanding customer relationships, both online and offline. The rollout to further important markets is planned for later this year. Besides investing in key strategic initiatives and capitalizing on our growth opportunities, we took decisive action in improved cost efficiency. We further enhanced our digital capabilities and capitalized on AI, artificial intelligence, to drive forces behind our vision of being the leading premium tech-driven fashion platform worldwide. We also leveraged our organizational and operational platform and thereby limited expense growth over the course of the year. In this context, in 2024, we further streamlined our global sourcing activities and unlocked productivity gains across key business functions. This translated into meaningful gross margin support, which helped us to more than offset various external headwinds. In addition, we stepped up our financial discipline, driving efficiencies across our cost base. These actions enabled us to notably limit operating expense growth in the second half of the year. With underlying OPEX broadly stable in H2, we have made important progress in unlocking productivity gains. Yves will give you more detailed information on our various cost efficiency measures in just a moment. However, let me take this opportunity to emphasize that we will continue to maintain our cost discipline in the future. We are fully minded to further improve our profitability in the years to come to capitalize on our organizational strength and leverage the great potential of our company. Our commitment to generating sustainable, profitable growth has never been stronger. But before we turn the future into the future, I want to hand over to you, Yves, for a financial review of 2024.