Comparison of actual and forecast business performance

Strategic realignment shows first signs of success

HUGO BOSS achieved its targets formulated for fiscal year 2017 and exceeded some of them. The Group benefited from the first results of its strategic realignment adopted in 2016. The catalog of measures already initiated in advance had a positive effect on the business performance. For example, improvements to the market position in the United States and Asia, savings in operating costs and efforts to ensure the sustained profitability of its store network helped stabilize sales and operating profit. Finally, the positive performance of the global economy and industry contributed to sales development. In particular, the economic upswing in Asia underpinned both local demand and business with tourists in Europe.

Group sales outperform expectations

Thanks to the better-than-anticipated sales development in own retail the Group specified its outlook with the publication of the third-quarter results 2017 and raised its sales forecast for 2017.

Improved momentum of comp store sales

Particularly in the core markets of Great Britain, the United States and China, the Group's own retail business performed better during the course of the year than had been assumed at its start. Primarily, the momentum of comp store sales growth in these markets improved significantly. Group Earnings Development Sales Performance

EBITDA before special items stable

In November, the Group also specified its earnings forecast towards the middle of the original range. The operating profit (EBITDA before special items) in fiscal year 2017, at EUR 491 million, remained at the prior-year level and therefore in line with the forecast. The increase in sales was balanced by investments in repositioning the BOSS and HUGO brands, the digital transformation of the business model and negative exchange rate effects. Group Earnings Development Earnings Development

Higher-than-expected free cash flow increase due to lower investments

With the step-by-step roll-out of new store concepts for BOSS and HUGO, the Group postponed part of the renovation of its own retail stores originally planned for 2017 to 2018. In connection with this, HUGO BOSS adjusted the original forecasts for capital expenditure and free cash flow by publishing its half-year results. In fiscal year 2017 capital expenditure finally came to EUR 128 million and was thus at the lower end of the adjusted forecast range. Free cash flow increased more strongly than forecast due to this effect and to shifts in the timing of trade net working capital, which will probably not be repeated in 2018. It totaled EUR 294 million. Net Assets Financial Position

The targets for fiscal year 2018 are presented in the section Outlook. Subsequent Events and Outlook, Outlook