Overall assessment of the Managing Board on the economic situation and expected development of the Group

During the course of the year, HUGO BOSS was confronted with growing economic uncertainty in some of its key markets. In North America in particular, the market environment further deteriorated during the course of the year, hence weighing on the Group’s top- and bottom line performance. In addition, business in Hong Kong was significantly impacted by the political unrest and demonstrations. The publication of preliminary results for the third quarter in October led the Company to adjust its financial outlook for the full year 2019. In light of a strong increase in sales and earnings in the final quarter, HUGO BOSS ultimately achieved its adjusted full-year targets. Over the course of the year, the consistent execution of the Company’s strategy had a particular positive effect on business performance. Comparison of Actual and Forecast Business Performance, Group Strategy

With a currency-adjusted increase of 2%, Group sales were within the adjusted forecast range in 2019. While sales in Europe and Asia/Pacific grew, business in the Americas fell short of expectations due to the persistently difficult market environment in the U.S. and Canada. At EUR 333 million, the operating result (EBIT) was 4% below the prior year level (excluding the impact of IFRS 16) and therefore within the adjusted forecast range. Higher sales only partially offset the decline in gross profit margin and the increase in operating expenses. The latter is mainly attributable to additional investments in the Group’s own retail business. At EUR 207 million, free cash flow was 22% above the prior year level (excluding the impact of IFRS 16) and therefore at the lower end of the original forecast range. In view of its healthy balance sheet structure and the strong cash flow generation that is expected to continue in the future, the Group continues to be in an exceedingly solid economic situation. This is also reflected by the dividend proposal of 2.75 EUR per share for fiscal year 2019, corresponding to an increase of 5 cents against the prior year. Earnings Development, Financial Position, Outlook

In the coming years, the Company will continue to work consistently to sustainably increase the desirability of both brands, BOSS and HUGO, and to increase its profitability significantly in the mid-term. At the same time, the overall economic uncertainties will remain high in the short term, particularly in view of the ongoing spread of coronavirus, particularly in China. It is therefore expected that the temporary closure of a large number of the Group’s stores in China and the decline in sales generated from Chinese tourists will have a substantial effect on the Company’s sales and earnings performance in 2020. With this in mind, HUGO BOSS forecasts Group sales in the current year to develop within a range of 0% to +2%, adjusted for currency effects. At the same time, EBIT is expected to be between EUR 320 million and EUR 350 million. Group Strategy, Outlook

Metzingen, February 20, 2020

The Managing Board

Mark Langer
Yves Müller
Ingo Wilts