Thanks very much. Good afternoon, ladies and gentlemen.

My name is Christian Stöhr, as you know, and I am heading up the Investor Relations activities here at HUGO BOSS. I would like to welcome you to our full year 2018 financial results presentation.

Today’s conference call will be hosted by Mark Langer, CEO of HUGO BOSS, and Yves Müller, CFO. We have a lot of topics to cover today, so let’s get started and over to you, Mark.

Thanks, Christian, and good afternoon, ladies and gentlemen. Also from my side, I would like to welcome you, following our meeting either via the web or over the phone, to the presentation of our 2018 financial results.

In the next 30 minutes, Yves and I will discuss our 2018 fiscal year operational and financial performance before taking a closer look at our expectations for 2019, the first full year of our mid-term strategic business plan. But let me start with a quick review of the 2018 fiscal year.

I am pleased to report that we achieved our targets for 2018, thus delivering on what we had promised almost exactly one year ago. Back then, in March 2018, we highlighted the importance of successfully implementing our strategic priorities, as they will be the key enabler to accelerate brand momentum and deliver sustainable profitable growth.

With the currency-adjusted sales growth of 4% to €2.8 billion, we have increased our pace of growth as planned. Even more encouraging is that this growth was broad-based, no matter whether we look at the performance by region or by channel.

Above all, our own retail business, and here in particular our online business, enjoyed dynamic growth in 2018. While sales growth accelerated in all regions, it was particular in the important Asia/Pacific region where the positive trend from previous years continued.

Despite some uncertainties with regards to the strength of the underlying Chinese economy, our Chinese business continued to record over-proportionate growth in 2018. This positive sales development does not only show that both BOSS and HUGO resonate well with our customers, it also means that the consistent execution of our strategic priorities has started to pay off.

Besides sales, operating income also turned out as forecasted at the beginning of 2018. At €489 million, EBITDA before special items remained on the prior year’s level.

A series of investments to ensure sustainable, profitable growth was the reason why we have not yet converted sales growth into higher profits. These included especially investments in the quality of our products and in the digital transformation of our business model.

I am particularly pleased that we also made significant progress in implementing our strategic priorities in 2018. In this context, we are very proud of the successful realignment of our BOSS and HUGO brands, aiming at addressing our customers clearly and more consistently through our Two-Brand-Strategy in the future.

With the launch of the Spring/Summer 2018 collections, our customers were able to experience the new brand positioning for the first time last year. And although the two brands are clearly distinguishable from each other in terms of their individual attributes, targeting different customers, they embody the same high values such as quality and fit, innovation and sustainability.

It is these attributes, making both BOSS and HUGO the preferred brand of choice for our customers. While the feedback we get from our customers following the brand realignment is encouraging to all of us, it is important that we continue to listen carefully to what our customers have to say, be it through our physical stores, our own website, or the various digital channels.

In doing so, we will create the best products in our industry, maximize customer satisfaction, and drive brand desirability. From a brand perspective, clearly the BOSS and HUGO fashion shows were particular highlights in 2018.

In September, we presented BOSS Menswear and BOSS Womenswear together again for the first time as part of New York Fashion Week. With the theme “California Breeze”, the new Spring/Summer 2019 collections created excitement and received very positive feedback.

The event also left a strong mark in the digital world, where we reached more than 50 million fans and followers throughout our various social media and brand channels. HUGO had already presented its Spring/Summer 2019 collection in July as part of the Berlin Fashion Week.

Inspired by those who mix and match styles of different decades and to create their own aesthetic with striking neon colors, light fabrics, and contrast details, HUGO reflects the modern street style of Berlin's mix masters and club scene. We also made significant progress in further developing our distribution strategy.

This was true especially for our online business, which, as you know, is of strategic importance for us. In 2018, we recorded strong double-digit growth in our own online business and, for the first time, achieved sales of more than €100 million.

This is proof positive that we successfully implemented improvements to the hugoboss.com website and that customers are responding very well to our online presence with its consistent alignment towards BOSS and HUGO. To further strengthen our digital footprint, in fall 2018, we intensified our partnership with the online retailer Zalando.

While, for the first time, we added BOSS businesswear to the product range available through Zalando, importantly, from now on we will be offering this collection via the partner program platform by ourselves, from product presentation to pricing to fulfillment. I am convinced that we will be able to serve the needs of our customers even better in the future with this sort of cooperation.

Consequently, we have set ourselves the goal of entering into further cooperations in the online segment in the coming years, starting in 2019, with a strong focus on Asia/Pacific and Europe. In 2018, we also successfully advanced our most important distribution channel, brick-and-mortar retail.

By rolling out our new BOSS store concept, we further optimized and modernized our store portfolio. Already today, our customers can experience our menswear and womenswear collections in a new, exciting environment in 26 BOSS stores worldwide.

With modern architectural features and a large number of digital services, this store concept guarantees customers a unique shopping experience. Importantly, the new store concept has also started to yield financial benefits, as reflected by improvements in sales, units per transaction, and store productivity, which we were able to witness for a number of renovated stores.

HUGO has also been presented itself with an innovative new look in many major cities since 2018. The first HUGO store with their unique store concept opened last year in London, Paris, and Dubai, among other key metropolitan areas.

In total, we have opened 12 HUGO freestanding stores in 2018 and see the potential for additional openings in 2019 and beyond. Our fashion-conscious, progressive HUGO customers from all over the world are impressed by our unconventional store designs and the tight integration of social media features.

While we truly believe in HUGO’s ability to excite our customers in a mono-branded environment, we will carefully assess future store openings by their potential to drive profitable growth for our company. To conclude on our strategic initiatives, we have also made very good progress in driving the digitization of our business model.

We increasingly develop and distribute our collections using digital tools. This enables us to respond faster to changing market trends.

This is particularly true for HUGO, our digital speedboat, where product development for certain parts of the collection is fully digitized already today. For distribution for wholesalers, we rely more and more on the use of digital showrooms, which have been in operation for the HUGO brand since the end of 2017.

Digital showrooms allow our wholesale customers to browse the entire HUGO collection and enable orders to be placed directly. And in our physical stores, we provide customers with a high-quality and seamless shopping experience thanks to a large number of digital services across all our distribution channels.

There's no doubt, the digitization of our business model, from beginning to end, is in full swing and we are excited about the many opportunities that will come with it in the future. Ladies and gentlemen, this concludes my review of the operational highlights of 2018.

Before I talk you through our operational expectations for the 2019 fiscal year, let me hand you over to Yves, who will give you some more details on the financials for 2018 and the financial outlook for 2019. Yves, it's over to you!

Thanks very much, Mark, and good afternoon, ladies and gentlemen. As Mark already mentioned, in my comments today, I will focus on the financial highlights for 2018 and 2019.

As you know, this was the first full year for me as the CFO of HUGO BOSS. I am encouraged that we delivered on our top and bottom-line targets for 2018, despite some external headwinds that the industry had faced during the course of the year.

As promised, and as Mark already alluded to, our strategic initiatives have yielded an acceleration in sales growth in 2018. Group sales increased by 4% on a currency-adjusted basis.

In euro terms, sales were up 2% to €2.8 billion, reflecting the ongoing appreciation of the euro against most other currencies in 2018. All three regions recorded currency-adjusted sales increases in 2018.

Europe was up 4% in currency-adjusted terms, benefitting in particular from double- digit growth in Great Britain and solid growth in most of the region’s other markets, including France and BeNeLux. The Americas were also up 4% on a currency-adjusted basis, thus exceeding our initial expectations of a low-single-digit increase for the full year.

The important U.S. market returned to growth in 2018, up mid-single-digits.

Lastly, looking at Asia Pacific, the region recorded a strong 7% increase on a currency-adjusted basis. Momentum in China remained strong throughout 2018, resulting in high-single-digit sales growth.

Japan was an especially bright spot in the region, recording low-double-digit growth in 2018. By distribution channel, own retail sales grew 4% currency-adjusted, supported by an increase in all formats.

On a comparable store basis, own retail sales were up a good 5%, on top of a 3% increase in the prior year period. Main driver behind this performance was a strong improvement in conversion rates, partially offset by a slight decline in the average selling price, reflecting the higher share of casualwear in our product mix.

From a regional perspective, Asia Pacific recorded the strongest performance with a high single-digit comp store sales increase. Comp store sales in the Americas and in Europe grew at a mid-single-digit rate, each.

I am particularly encouraged by the strong performance of our online business, up 41% on a currency-adjusted basis in 2018 and with strong double-digit improvements across all three regions. Sales in the wholesale channel recorded a robust 5% increase on a currency-adjusted basis, supported by mid-single-digit improvements in both Europe and the Americas.

There were, in particular, two effects that contributed to the sales development in 2018, which ultimately turned out somewhat higher than initially expected. Firstly, our replenishment business, which allows HUGO BOSS to respond to short term demand from wholesale partners, developed particularly strongly, up high single-digit on a currency-adjusted basis.

And secondly, we also recorded a positive effect from delivery shifts, which led to sales increases in the fourth quarter of 2018. To conclude on our distribution channels, the licensing business declined 4% on a currency-adjusted basis in 2018.

Increases in the license income for watches and eyewear were more than offset by declining license income from fragrances. The latter mainly reflects the anniversary effect of the change in license partner towards the end of 2016, which yielded double-digit increases in 2017.

This said, we are clearly not satisfied with the current performance of our fragrance business and have raised this topic vis-à-vis Coty, our licensing partner. Completing my discussion around the top-line development, let’s have a look at our brands.

In particular, I am pleased about the strong performance of our BOSS brand, where sales increased 6% currency-adjusted. This development was driven by high-single-digit growth in both business and casualwear.

HUGO, in turn, was negatively impacted by strategic distribution changes, aimed at sharpening the brand’s positioning. In this context, in 2018 we continued to transfer selling space from HUGO to BOSS at those wholesale accounts where the brand environment speaks more to the BOSS customer rather than the HUGO customer.

At the same time, we made further progress in our approach to no longer distribute the brand in some of our BOSS stores and to reduce the presence of HUGO in the outlet channel. All measures combined, resulted in an anticipated sales decline, down 4% currency-adjusted versus the prior year level.

Strong double-digit growth in casualwear could only partially offset sales declines in businesswear. By gender, our menswear business recorded 5% currency-adjusted sales growth, driven by double-digit increases in casual and mid-single-digit growth in businesswear.

Sales for our womenswear business declined 3% currency-adjusted, reflecting the reduction of selling space within BOSS freestanding stores. This could not be offset by growth for the womenswear of the HUGO brand.

Moving below the top line, let’s have a look at the development of major P&L items. At 65.2%, the gross profit margin declined 90 basis points in 2018, in line with our adjusted outlook for the full year.

This development was mainly due to the planned investments in product quality, in order to upgrade our BOSS casualwear offering. In addition, currency effects had a slightly negative impact on the gross margin development.

On the cost side, selling and distribution expenses declined 2%. A slowdown in retail expansion and positive effects from the ongoing renegotiation of rental contracts in the own retail business were the main drivers for this decline.

Administration expenses grew by 4%, reflecting investments in the digital transformation of our business model. There's no doubt that these investments will help us to fully exploit the tremendous opportunities we have identified in digital.

The strong double-digit increase of our own online business in 2018 is clearly a reflection of our first successes in this regard. At €489 million, EBITDA before special items remained on prior year level as guided.

Positive impacts from the increase in sales and the tight operating cost management were offset by the aforementioned investments in product quality and in the digital transformation of the business model. Depreciation and amortization amounted to €129 million, down 18% on the prior year.

This development is mainly due to a slowdown in retail expansion, as well as lower impairments for our own retail stores, reflecting the improvement in underlying performance. As a result, EBIT rose by 2% to €347 million.

The Group tax rate came in at 30% in 2018, as income taxes were higher than initially anticipated. Expenses related to the recognition of a provision for risks arising from an external tax audit were the main contributor.

On the other hand, the 2017 non-cash tax expense in connection with the revaluation of deferred tax assets in the U.S. did not recur.

In line with EBIT, net income rose 2% to €236 million. If we look at the earnings development by region, Asia Pacific once again stood out, generating a significant margin improvement for the second year in a row.

The region’s segment profit rose 9% in 2018. In addition to the increase in sales, a decline in operating expenses contributed to this development.

At 24.2%, the adjusted EBITDA margin was up 120 basis points on the prior year. In Europe, segment profit was up 4%, as the increase in sales more than offset slightly higher operating expenses.

As a result, the adjusted EBITDA margin increased slightly, by 10 basis points to a level of 31.1%. In the Americas, operating profit was down 17% due to negative currency effects, following the appreciation of the Euro versus the US dollar.

These negative currency effects more than offset the positive effect from lower operating expenses. Accordingly, the adjusted EBITDA margin for the Americas was down 340 basis points to 17.2%.

Now, let’s move over to the key balance sheet and cash flow items. Starting with inventories, which were 14% currency-adjusted above the prior year level.

Let me be very clear that one of our key priorities for 2019 is to bring inventories down to a normalized level. Compared to the first nine months of 2018, the inventory increase has already started to decline, a trend we expect to continue over the course of 2019.

Speaking about inventories let me also reiterate what I had already explained back in November 2018. The vast majority of the inventory position is related to never-out-of-stock products, in other words product groups that are not related to a specific season.

This in turn means that we should be able to normalize inventories sequentially during the course of 2019, without a need to sacrifice gross margin development, just the way we achieved this during the fourth quarter of 2018! As a result of the inventory increase, trade net working capital grew by 16% on a currency-adjusted basis.

At 19.7%, the moving average of trade net working capital as a percentage of sales based on the last four quarters was 110 basis points above the prior year level. Investments in our business were once again a key priority in the last year, as Mark explained before.

At €155 million, capital expenditure rose by €27 million compared to the prior year. The anticipated step-up in store renovations as well as continued investments in the IT infrastructure, were the main drivers for the increase.

With investments of €89 million, the Group’s own retail business was once again the focus of investment activity. Of this, €45 million were spent on store renovations, an increase of 36% compared to last year and reflecting the almost 30 BOSS store renovations in 2018.

Investments in store openings remained on the prior year level at €44 million, partly due to the planned opening of our new outlet in Metzingen. IT investments rose to €36 million, an increase of €5 million versus the prior year.

These investments mainly focused on the further digitization of the own retail business and the development of the ERP system. The increase in working capital and the step-up in capital expenditure resulted in the anticipated decline in cash flow.

While free cash flow, at €170 million, was noticeably below the level of 2017, this development was in line with our initial guidance. Finally, net debt only increased marginally to €22 million at the end of 2018.

Let me conclude my review of the 2018 financial year by reconfirming our commitment to our dividend policy, aimed towards continuity, which we had talked about in detail during our Investor Day back in November. Accordingly, we will propose a dividend per share of €2.70 for the 2018 financial year.

This represents a 2% increase compared to the prior year, in line with the increase in net income. At 79%, the payout ratio will remain on the prior year level and thus at the very upper end of our dividend payout corridor of between 60% and 80% of consolidated net income.

Now, let’s change perspectives and look ahead into 2019, the first full year within our strategic business plan until 2022. The year 2019 will therefore be all about the execution of our strategic priorities and mark the first major milestone towards achieving our mid-term financial ambition.

We expect Group sales to grow at a mid-single digit percentage rate on a currency-adjusted basis, thus outgrowing the global economy as well as the relevant market segment in 2019. All regions are forecasted to contribute towards sales growth with the strongest increase expected to come from Asia-Pacific.

The region is projected to grow at a mid to high-single-digit percentage rate on a currency-adjusted basis, led by significant growth in the Chinese market. Europe and the Americas are both forecasted to grow at a low to mid-single-digit percentage rate.

From a channel perspective, growth will once again be driven by our own retail business, where sales are expected to increase at a mid to high-single-digit percentage rates on a currency-adjusted basis. This forecast is based on the assumption that comp store sales will grow at a mid-single-digit percentage rate on a currency-adjusted basis.

In addition, our online business will continue to contribute over-proportionally to retail growth. Turning below the topline, the gross margin is expected to increase up to 50 basis points in 2019.

This development will be supported by a positive channel mix as the retail business is expected to grow stronger than wholesale. In addition, improvements in markdown management should contribute to the gross margin development.

Operating expenses are forecasted to increase moderately. First positive effects from the efficiency program will be largely offset by further digital investments including the expansion of the concession model, as well as the rollout of the hugoboss.com website to additional geographies.

These investments are not only important to drive the further digitization of the business model, but also to further stipulate the positive sales momentum in our online business. EBIT, our new key performance indicator to judge our bottom-line performance, is forecasted to increase at a high single digit percentage rate and thus stronger than the topline.

This development will be driven by the anticipated sales increase, the improvement in gross profit, as well as tight operating cost management. In line with EBIT, net income should also increase at a high single digit percentage rate.

Moving over to the balance sheet, we expect capital expenditure to increase to a level between €170 million and €190 million. Our clear priority for investment activity will continue to be our own retail business and IT-infrastructure.

Alongside the accelerated upgrade of existing BOSS stores to the new store concept, we are also investing in our new state-of-the-art outlet in Metzingen, which is expected to open in September 2019. Investments in IT-infrastructure will mainly focus on further strengthening the online business, and expanding our digital brand communication and CRM capabilities.

As promised back in November, we will continue to put particular emphasis on inventory management, as we are committed to bringing down inventories. In this context, 2019 should see a gradual improvement quarter-after-quarter.

This will result in a decline of average trade net working capital by 50 to 100 basis points compared to year-end 2018. Consequently, free cash flow is expected to improve significantly to a range of between €210 million and €260 million.

Now, before handing back to Mark to look at our operational topics for 2019, let me spend a minute on IFRS 16. From our press release earlier this morning, I am sure you have noticed that our outlook for 2019 does not include any implications that are expected to occur following the first-time adoption of IFRS 16.

To make it very clear, the implementation of IFRS 16 will not have an economic impact on HUGO BOSS. It has no effect on the way we run our business, nor on total cash flows.

It does, however, have a significant impact on our balance sheet. There is also an impact on the P&L, as lease expenses are no longer booked as operating expenses, but split into two components.

Firstly, depreciation of right-of-use asset and secondly interest from discounting future lease obligations. IFRS 16 also has an impact on free cash flow as operating lease expenses are no longer treated as operating expenses and this will, as a result, boost operating cash flow.

To be more precise, we expect the following implications to occur during the course of 2019. The increase in total assets on the balance sheet will be between €1 billion and €1.2 billion.

EBIT is expected to increase by a low-double-digit million euro amount as the depreciation of the right-of-use asset will be lower than the previous operating lease expenses. Net income instead is forecast to decline by a single-digit million euro amount as the sum of depreciation and interest charges is expected to be slightly higher than the previous operating lease expenses.

And, last but not least, free cash flow is expected to increase by a low-triple-digit million euro amount. To ensure comparability between our 2018 actuals and our 2019 outlook, we will report 2019 actuals both including and excluding the effects from IFRS 16, starting with our reporting for Q1 2019 in May.

With this ladies and gentlemen, let me hand you over to Mark to share with you our initiatives for 2019.

Thank you, Yves. There is no doubt, ladies and gentlemen, that with the financial outlook presented today, we will achieve a major milestone towards our mid-term financial ambition of growing the business with a 5% to 7% top-line CAGR and towards achieving a 15% EBIT margin by 2022.

But 2019 will be much more than that. Most importantly, 2019 will be a year, where we will make further progress towards our vision of being the most desirable premium fashion and lifestyle brand globally.

This is what ultimately drives us, and this is what our strategic initiatives in 2019 will be centered on. In 2019, our initiatives will once again focus on driving personalization and speed to ultimately enhance the desirability of both BOSS and HUGO.

This will be our guiding principle, no matter whether we define our action plan from a brand, distribution, or operations perspective. Let me therefore show you some of our operational initiatives for 2019 to further drive brand momentum and excite our customers.

Starting with the BOSS fashion show that took place in New York City three weeks ago, where both our menswear and womenswear collections for Fall/Winter 2019 were presented. This time, the gallery district in Chelsea has inspired the design and creation of the new men’s and women’s looks in the collection.

Highlighting the event as BOSS Curated, the art of sophisticated style was celebrated with fine attention to detail, modern silhouettes, and unique materials with artistic highlights. To leverage the content from the fashion show, we put a particular focus on social media, using the most relevant social media channels.

On Instagram, for example, followers had the opportunity to look behind the scenes and to see the runway presentation from multiple perspectives. To drive excitement with our customers, we will put an even stronger focus on collaborations in the years to come.

Here, I am particularly proud that we were able to enter into a close collaboration with Porsche in the innovative global motorsport series Formula E. As part of this collaboration, we will be launching a joined collection, incorporating design elements of the first fully electronically powered Porsche Taycan.

The high-quality collection consists mainly of sporty casualwear styles and modern tailoring. The collection will be available in selected stores and online later this month.

Moving over to HUGO. The brand will continue to play a key role in driving the digital transformation of HUGO BOSS.

After successfully introducing the digital collection in 2018, this year will see a further extension of the digitally developed assortment. By year-end, we are targeting up to 10% of HUGO’s total collection to be developed digitally.

This compares to 1% in 2018 and is consequently a major milestone towards commercial reality. To drive engagement with the HUGO customer and to create more buzz around the brand, HUGO will return to Berlin this summer to celebrate the brand and the city in a new, innovative way.

There is more big news around HUGO to come, in particular on the marketing side of things and we will talk about it over the course of 2019. So, please stay tuned for some exciting announcements later this year.

2019 will of course also be a year where we will make further progress in exploiting online opportunities. Starting with our digital flagship hugoboss.com, which will be rolled out to additional geographies as already mentioned during the Investor Day.

In the second half of 2019, Scandinavia and Ireland markets with a strong digitally minded customer base will be on-boarded to our digital flagship. In addition to our own website, in 2019 we will continue to expand the online concession business by adding new, leading online platforms to it.

Some of them will be conversions from former wholesale models, some of them will be new partnerships we are about to enter. And of course not to forget our partnership with Zalando, where we will be intensifying our collaboration by adding further countries to our Partner Program.

On the brick-and-mortar side, we will continue to optimize our BOSS store network. We have seen great improvements in retail KPIs for many stores that were either renovated, right-sized, or in some cases even relocated.

Unsurprisingly, the further optimization of our store network, aimed at driving retail productivity, will become one of our key priorities for 2019. This will include some of our large flagship stores such as on the Champs Élysées to give you just one prominent example.

As you know, we are also committed to growing our physical footprint for the HUGO brand. In this context, 2019 will see further store openings across a number of metropolitan centers, among others Moscow, Hong Kong, Singapore, and Los Angeles.

The expansion in 2019 and beyond will clearly be of a gradual nature and not be anything close to an aggressive push to ensure we run the right number of stores in the right areas. We are looking forward to introducing HUGO’s mono-branded appeal to a larger customer base all over the world.

Now, ladies and gentlemen, this concludes my operational outlook for 2019. Yves and I are now happy to take your questions.

Just like in previous quarters, we kindly ask you to limit the number of questions to two, so that all of the participants will hopefully have a chance to ask their questions.

Yes. It's Antoine Belge from HSBC.

Two questions. First of all, at the Capital Market Day, I mean, you had introduced medium-term target of growing between 5% and 7% per annum so the mid-single digit, I think in English means between 4% and 6%.

So any reason why the average growth should be a bit more backend loaded or any reason to be a bit cautious this year for some macro reason? And my second question relates to the OpEx development.

So I understand that most of the operating margin gains should come from the gross margin, so implicitly there shouldn't be any OpEx leverage, so maybe could you give a bit of flavor of the different buckets, as I understood that there is a cost cutting program in place, and so are on some digital investments, so maybe what would be the impact positive from the cost savings and then each of the investment that you're targeting? Thank you.

Thanks, Antoine. And let me say maybe at the beginning I was sorry, we fell for PSG, I mean, first of all, it's super unfortunate loss in the game.

And you know that we are big sponsor of PSG so we are with you on this one. Let me give you some color on the top line guidance.

I mean, for us the 5% to 7% that we had given as average growth rate for the full year of business plan is covered in our mid single-digit perspective for this year. You are right that there are elements from a macro perspective that we take a cautious view and necessary preparation step in the year 2019, which is just beginning, but we would see our top line guidance for the year 2019 for the full year in the order of magnitude as we guided also the mid-term base.

In particularly, the first quarter and I think we touched on that one, we see a tough comparison base with a strong like-for-like we recorded in the first quarter of 2018 and also the delivery shifts that we've seen in wholesale will be a burdening at least a first half year of 2019. So I think we are well advised with a mid single-digit top line guidance for 2019.

Second question was – hello, Antoine, this is Yves speaking. The second question was related to OpEx.

So, first of all, I – actually I want to highlight 2018 that we achieved the bottom line targets by operating leverage, because the gross margin decreased by 90 basis points, and finally we achieved our bottom line guidance. So for 2019, we clearly are well ahead of our efficiency program.

And on the other hand, we are committed to invest into the digital environment. And I think with our guidance to have a top line improvement mid-single and to have EBIT improvement high-single digit we are clearly delivering this what we promised to our Capital Market Day that we will have an increase in EBIT margin at the end.

And what we see with our strategic priorities that we have really found the very prominent recipe to move on and that we as a board have to balance it always between future growth – future sustainable growth and delivering short-term profit. Just to give you the right perspective on the investments that we are doing.

Clearly, today we have a high number of millions of online sales in the wholesale part. €130 million in the wholesale part is related to online.

So whenever that come a concession partner we will convert these partners into a concession model, because we are convinced that this is tragically right. Secondly, we are only present today in 12 countries with hugoboss.com.

So, a lot of bunch of white spots regarding our digital flagship hugoboss.com and of course all the store renovations we know that store renovations that they've a tremendous impact on net sales and sales productivity. So whenever the rental contracts will be terminated, will be renewed, then will start our remodeling, because it pays off.

So these are the investments that we are clearly doing. And by the way, if we are saying that gross margin will be improved up to 50%, this does not include – this does not exclude that we might show operating leverage at the end.

Okay. Thank you.

Maybe just on what you said about the first quarter. So I understand the impact from the wholesale from the advance deliveries.

So does it mean that you expect retail like-for-like in Q1 to be a bit below the mid-single digit and maybe re-quantify what could be the – what has been the running rate in the first two months of the year?

Antoine, just to illustrate you can understand, we can't comment any further on Q1 trading, but we all are aware that we expect a very strong double-digit like-for-like in the U.S. operation fourth quarter 2018, which as we know will not reoccur due to the one-time effect on the tax cut that was effective, which drove short-term customer demand.

So it is a – it's the toughest quarter to beat from a like-for-like. It was I believe 7% like-for-like and probably was the strongest quarter in 2018, which is just a matter of fact it have comparison base and we quantified as around €10 million the wholesale shift effect on the first quarter 2019 into fourth quarter 2018, both are broadening the momentum.

But as we said, we are strongly convinced on our full year guidance for 2019 and this is what we want – we confirm also today.

Thank you, and also for your – and especially for PSG.

Yes. Next year you're going to be in the final I'm sure.

All right. We move on.

Yes, thank you very much. Maybe two questions from my side.

The first one you guide on reported EBIT what kind of one-offs can we plug in for 2019. Is best guess similar €13 million negative impact given all the measures you have assumed?

Well, the nature of one-offs is that for the smartest management team hard to predict especially as we discussed this item at the beginning in the process of first quarter. So, that's why you will get no further quantification on embedded or implicit one-time items in our 2019 forecast.

Given the global structure of our business and competitive supply chain, there will be clearly one-time restructuring or one-time expenses also embedded. But we think it's the right thing to do with IFRS 16 changes that Yves explained to you that all the business of our scale has to guide on EBIT number including also this one-time effect.

So, we just follow best practice in our industry in this regard and you can be sure it's a management obligation to manage the business that we deliver on our results including some less predictable items which is the case like one-time items.

Okay good. And my second question maybe you can give us a bit more hint on developments in the U.S.

and China and in Europe for 2019 what's your market expectations here? So maybe you can -- particularly on China maybe, you can outline your growth prospects beyond your general comment?

Thank you.

Well, first I think that we something we already highlighted at the beginning of the year with our preliminary result that we have seen others to industry voices speculated on the slowdown of Greater China that was not the case for us in the fourth quarter 2018. So, we have seen a very robust above group average performance in this part of the world.

By the way also some smaller Asian markets, for example, Japan also showed a very strong results. We are happy with our going into much further detail with the Chinese New Year development which is a clear revenue driver in the first quarter 2019.

And this is embedded in what Yves was giving you that we expect an above group average so high single-digit growth on the Asia-Pacific region. So, it comes from a strong underlying market which is clearly more favorable than what we see in trading, for instance, European or North American market.

And we expect also this market to benefit from our investment into the digital distribution as we see with upgrading of our collaboration with important partners like Tmall that this will allow us to tap more aggressively into these growth opportunities. Our outlook on Europe and North America is a bit more muted.

It will also be on a full year clearly a growth part of it but rather on low to mid-single-digit base. As I already mentioned in the question to Antoine, we are -- especially the U.S.

market is burdened by a very strong like-for-like comparison base from Q1 2018, but it's a single quarter effect, but we do see that the underlying market is clearly more muted compared to the Asia-Pacific overall in our industry and this is reflected in our forecast.

Thank you.

Thanks Andreas.

Yes, good afternoon. Thanks Mark and Yves.

Just got one clarification and two questions if that's okay. Just a -- clarification-wise on the retail sales densities, I noticed that there was a restatement on your sales densities within the retail business seem to only move up by €100 to €10,700 and it's still €800 below where you were back in 2015.

So I'm just trying to get a sense, number one, if that's correct? And also how you're thinking about your improvement in productivity going forward into 2019.

My question with regards to I guess gross margin at the outlook that you said up to 50 basis points and the comments that you've made about progressively reducing your stock levels over the course of the year. And I appreciate you said that the bulk of what you have in stock is effectively never out of stock product.

Could you sort of comment on how you see at the moment the moving parts within gross margin because you said that the markdown will be a better or better managed going forward. The effects should be slightly positive.

You talked about a positive channel mix that wasn't much positive channel mix in 2018. And I guess there will probably be some implied markdown, maybe not that much given where you're going to take your stocks.

I'm just trying to get a sense of how you look at these moving parts within that up to 50 basis point gross margin. And finally just on the costs -- the selling expenses was obviously very well managed in 2018 just down to under 200 basis points.

Marketing was also down by 6% or 60 basis points. So, clearly you're going to be looking to, I would imagine, invest in both of those areas with new store concepts and also pushing your two-brand strategy going forward.

So, when you say that there may be some operating leverage coming from the expense line, where is that going to come from? Thanks.

Thank you very much John for your questions. I will take those questions.

First of all the first question regarding sales productivity so like we said to you in the Capital Markets Day we will be clearly focusing on having an CAGR increase of 4% in the sales productivities. This is what we are aiming for.

Secondly, what we did is -- and this is what we said to you on Capital Markets Day for the future and this is embedded in those figures that we were showing that you were referring to we exclude online because we were arguing there is no square meters on online. And thirdly the improvement of €100.

This is true on euro basis. If you take this currency adjusted, it was between 3% and 4%.

So, currency adjusted was actually close to this what we were originally expecting. Coming back to the gross margin guidance up to 50 basis points for 2019.

Clearly, we will see our positive channel mix effect because we will -- we envisage that retail will outgrow wholesale and we will see a slight positive effect from this markdown management. And especially if I refer to the fourth quarter this is what we really achieved in Q4 that we had a very good like-for-like performance 4% in retail in Q4 and we even lowered our markdowns our discounts in Q4 in comparison to prior.

So, having this in mind, this will continue actually in 2019 going further and so we see improvements in gross margins up to 50% and markdown management. This means less rebates in comparison to 2018 will contribute to this effect.

And actually, if you have the guidance in mind, we want to improve actually our free cash flow from €170 million to a range between €210 million and €260 million. So this includes actually CapEx -- more CapEx that we need in 2019.

So we see that the dominant part is coming from profit improvement and less inventories. And regarding the marketing expenses, yes, they decreased in 2018 versus 2017, but there was an IFRS 15 change.

I'm sorry about all those IFRS changes. But actually, there was a mid single-digit million amount that had to be booked at net sales deduction, this refers to the contributions that we are paying for wholesale partners for shop constructions.

So in 2017, they were booked as marketing expenses and in 2018, they were booked as a net sales deductions. So I'm sorry about this technical effect, but that led predominantly to the effect that marketing spendings went down.

Okay. Thank you very much, Yves.

I'm sorry, just one additional, just on this fast track that you got where you are looking to obviously bring product quicker to market and drive a higher full price sell-through. Is there any idea, have you given any metrics around what the percentage of fast track is in terms of sales for 2018 and where you're going to take that to 2019?

Thanks very much.

Well on the fast track, which is basically something where we reproduce best seller that we identified early in the season, it's something that we have been doing already for many years. So by the way something both our wholesale and our retail channels are benefiting from that we have in certain categories, be it Jersey or sometimes even in closing where we have our own production facility as you know on Izmir that we are able to reproduce items where we see a stronger than anticipated sell-through.

That's not surely something completely new. But there's clearly a limitation unto this part of what we call fast track.

The far more exciting part that we highlighted in our call today is where we're able now to have a full collection. So a full messaging that we can also use from a marketing perspective, a total look that is fully digital developed.

So all items from sneakers, over trousers, jersey, outerwear are developed now with lead times which are less than seven to eight months, which is a clear reduction of more than five months versus previous practice, which allows us to be much closer to as a latest fashion trends that we see especially in the casualwear. And now we see a fourth generation of digital developed collection with HUGO, we have seen now the first time and I think it's a important milestone, where a digital developed collection have seen a slight outperformance in productivity sell-through rates and global markdown than the traditional one.

And I think that's still early. As I indicated, we are just starting to grow the overall digital develop part of our collection, but as this proves to be a structural advantage, I think it's a very strong sign that this is not only a far more cost efficient, but a superior way to operate in our industry.

That's why we would like you to focus more on the overall reduction in lead times via the digital development process than this fast reaction processes, which are more commonplace I think also with other players in our industry.

That's great. Many thanks, Mark and Yves.

Appreciate it.

Thanks, John.

Thank you.

Yes, thank you very much. Two questions.

First of all, Mark you just talked about the digitalization and your speedboat at HUGO. When do you think these experiences, these digital advancements that you've developed as HUGO can be shifted over to BOSS where you have some -- when will you see some impact here from those advancements?

And secondly, on marketing again sorry, your guidance was always 6% to 7% given the new IFRS impact. Is that still the run rate or should be more assumed that going forward the marketing expense ratio will rather be at the low end of that corridor?

Thank you.

Thanks for the question and you're absolutely right. Clearly, we are testing or we have developed for us some of the digital capabilities be it a showroom, be it a fully digital development process with HUGO, but this is spreading quickly throughout the operation.

So at sometimes, people working on these efforts that are working across multiple brand lines, so they're also serving for example BOSS Menswear and Womenswear in some product categories and we started to see already in 2018 that the number of physical prototypes also for BOSS is going down in some areas where we traditionally in outerwear, we have two or three physical prototypes. The teams, the designers, the technical developers have been also moved to a new digital tools which triggered by the way also some of the investments that we discussed earlier.

But this is now already a technique that is being spread out through the organization. So I'm very confident that even though we haven't quantified it yet, it's probably something that we will deep dive as a part of our Investor Day 2019, how quickly and how we will transfer the learnings from HUGO in the development process to BOSS.

What we can already confirm today that we have initiated this process in 2019 also triggering some investments in 2019 to bring in the digital showroom distribution model also to BOSS. And during this -- across of this year, we will start with our routine showrooms to reduce our salesman samples also from BOSS.

And predominantly based on the very positive feedback from wholesale buyers, say using these screens and I think you have seen it on slides also when we last time we invited you to our headquarter. They say it's a much better tool to correct your buy, your collection you would like to buy from HUGO BOSS with these new tools and we will bring this in the fiscal year already to BOSS.

On the development side for BOSS, we will probably give you more details on our expansion plan for late across this year. For the marketing question, I will pass on this question to Yves.

Yes Jurgen, regarding the marketing expenses, yes, we stick to our range between 6% to 7% every year. And like we said to you on the Capital Markets Day, initially we will grow in line with our net sales development.

And in addition to this, like we said, we have a project running regarding marketing effectiveness. We see sometimes having more efficient marketing spendings coming from due to the digitalization.

But we are saying, we will not reduce the number of percentage, but we want to keep this stable in line within net sales overall. So we won't change our policy here.

Very good. Thank you.

Thank you, guys.

And if you know have further questions good luck for tonight against Inter.

Yes, I was going to -- I was going to mention that exactly. Thank you very much.

Hi, good afternoon. Two questions from me as well.

The first one is on your online concession business. I just wanted to understand whether you could quantify the contribution from conversion of your online platform into concession businesses in your 2019 guidance, because there's part of the growth that can be explained by the mechanical transformation of some revenues from wholesale to retail.

And in this context, could you help us understand excluding these effects would these be effective underlying growth that you are expecting both in wholesale and in retail, because I was getting to something like flattish wholesale growth for the full year and perhaps a low single-digit growth in physical retail. Could you confirm if my calculation is correct?

And my second question is on the wholesale, I was a bit surprised by your guidance, excluding also these effects from the conversion of into concessions, wholesale seems to be quite soft in terms of guidance for full year 2019. Can you may be share some feedback from the retailers on your product launches, on the excitement around HUGO and BOSS, and why not a stronger growth in 2019 coming from these channel on an underlying basis?

Thank you.

Let me start with the second part of the question and I will come back to the conversion impact. So we do have some visibility into the wholesale order intake for 2019.

And what we do see is a continued strong demand like we've seen in our own e-com business either it's hybrid models or online pure plays are still clearly outgrowing the overall market. So pure play like ASOS or Zalando, but also others that are wholesale partners of us are clearly growing at a rate above the underlying market.

And also our traditional department store partners that are operating both in physical retail brick-and-mortar and online, I wouldn't say all of them but everybody say the e-com part of our business is growing significantly stronger than the e-com parted. And this is since the vast majority about $1 billion business on wholesale is still driven by a brick-and-mortar in Western Europe and North America two regions, which are not benefiting from the underlying momentum that I mentioned earlier and Asia-Pacific gives us a reason to be cautious based on the order intake that we have seen that the wholesale business will be rather on a flattish side.

And are there clearly two effect, the one I will discuss in a moment but also the order delivery effect and pre-delivery effect, which has had a dampening effect at least in 2019 all other things equal due to the shipment already in the fourth quarter. The first part of your question has also negative or dampening effect on the course of development and clearly helps to grow our retail business.

However, it's too early to quantify this effect at this point in time. I mean, a lot of these negotiations are still ongoing that will say switch over date and we still need to see what has been the full impact of that.

I think it makes more sense to highlight that we are making clearly progress to grow this e-com concession business already in 2019. As you know it is a major growth driver in our 2022 targets to grow e-com to €400 million, so vast majority or the biggest part of that comes from digital concession.

So we are very happy that we have good negotiations and making some good progress to that but it's too early to quantify the impact of that. So the implicit CAGR of 40% on our e-com business growing from €100 million to €400 million by 2022 is in terms of absolute and relative growth especially driven by concession.

But I would prefer to give you more details on successful completed conversions for every quarterly results, so we will have our next session in May. And then I think we have a better quantitative base to give you an indication on this retail, positive effect, and the dampening effect on wholesale, which we try to find out.

But given that you have full year 2019 guidance perhaps, can you share with us what's your assumption underlying. I guess, you probably made some calculations?

Well, we did. But as for your understanding that we say with all these concessions take over, the wholesale numbers would be slightly higher and clearly and we see the corresponding effect on retail.

But please I ask for your understanding because the moment when I give you the quantitative details to that, we basically lock ourselves in an unnecessary wave in to complete this deals. May be on unfavorable terms because we are committed to a certain sales impact to that.

And honestly I'm not interested in the strongest top line effect of that, but I want the most attractive deal for HUGO BOSS and this includes for us as a management to have some flexibility to do the right deal and also one, which is implicitly guided in our top line guidance. So please we run this business for profit and not for certain, general retail sales target number and we need the flexibility to take the right decision for the business.

Understood. Thank you.

And perhaps just one small follow-up about your guidance based on the reported EBIT rather than adjusted EBIT. I might have missed part of your earlier answer.

But effectively starting from reported EBITD, you start to with approximately €13 million of extraordinary items -- negative extraordinary items in 2018. So, are you expecting to have a similar amount of negative extraordinary items into 2019 because otherwise it's quite difficult to understand your underlying guidance growth at the EBIT margin level?

Yeah, this question I think I'm not sure what Andreas ask a question to that? I mean we have years, we have seen significantly higher non-recurring expenses.

Remember that 2016 was an outstanding year and we are clearly not in building something like this to happen in 2019 with major retail restructuring. We think it's a right way to do, especially not only from the IFRS 16 changes that we explained to you that we give you an EBIT as a best proxy and for the year.

We've comped and we will not break out our assumption for non-recurring. It could be in the order of magnitude of the previous year, but this is not a budgeted value in its way.

But be clear like we will be very explicit on the impact on the IFRS 16 is that anything like we had in the fourth quarter with certain pension liability that we have to disclose as part of our non-recurrings from the fourth quarter, we will be very explicit. And I think we have a valid track record to be very open to explain to our investors if there are nonrecurring items be it positive or negative, we will disclose these items and this is what we will do but we can't give you a more explicit guidance details on the EBIT margin 2019.

Okay, understood. Thank you very much.

Thanks, Elena.

Good afternoon, gentlemen. Thanks for taking my question.

Two to question please. The first would be on online.

You mentioned hugoboss.com was now in 12 markets, could you give us a sense of what proportion of your total group sales are coming from those 12 markets? And then second question would just be, could you tell us please how you factor FX into your guidance in terms of top line and EBIT in particular?

Thank you.

Just to make sure that I got your questions right. So the €100 million revenue that we generate in e-com are coming from these 12 markets.

And we would probably add two more regions or markets. Scandinavia, as you know, opened up already talking on the phone, so clearly more than one market the region and the expansion on Ireland will be added to that.

So that comes from these -- from markets. What was your question or did I get you wrong?

Or you also asked …

Sorry, just a broader sense to the total-wise there's opportunity we're talking about so the other 12 markets you serve online at the moment to those, can you tell us the proportion of your total Group sales, they represent or maybe to comment it another way, could you tell us what the online proportion of sales in those 12 markets looks like?

Well, I mean, the one -- it's just to calculate the €100 billion off the €2.8 billion is the total Group share. We would always say well, you have to look at from the retail perspective, so then it's rather €100 billion out of €1.6 billion in retail business.

If you would just look at these market, it vary. So the share -- one of the highest penetration we have in the U.K.

and the German market where we are in the double-digit share on our retail sales. The Italian market is still a market where it's lower penetration.

Overall, in the markets where we operator physical, brick-and-mortar and e-com, it's roughly around high single-digit to a low double-digit rate, percentage rate of our retail business.

And Fred, regarding ForEx overall, we see a very small impact, actually regarding from ForEx which is overall actually neglectable and which is included in our guidance. So, we see a very low €1 million amount on the EBIT level as a kind of headwind coming from ForEx.

But we are in the beginning of the year and it's so difficult to predict so -- but this includes our guidance.

That’s very helpful. Thank you.

Thank you.

Thanks, Fred.

Yes. Good afternoon.

Thank you for taking my questions. I actually have more than two, but I'll stick to two and two boring ones around the big drivers of the financials in quarter four.

I was wondering whether you could help us understand how the tax rate will evolve in 2020. If I understand value targets, we are still around 30% in 2019.

So, where does that normalize as start into 2020, please? And the second question is regarding D&A issue.

I'm sorry, they are a bit boring questions. But here you had a lot less impairment test in quarter four than you usually have.

Is that your new norm? IFRS 16, we're talking because clearly D&A line will change with IFRS 16.

But excluding this, should we expect this line to remain around that level for full year 2019, or was this an exceptional year in the lower impairment test? Thank you.

Yeah, thank you very much, Melanie for your questions. This is Yves.

We expect that the tax rate for 2020 will go down again. So, this will be in the range between 26% and 28%, this is what we expect for 2020.

And regarding the D&A, this is heavily related actually to our impairments. And there are actually I think it's worthwhile explaining to you why the impairments were going down, because impairments on our stores are actually normally extraordinary depreciations that we are doing on our assets of the stores.

And there are actually three good reasons why the impairments are going down. First of all, we have experienced a very good like-for-like performance from 3% in 2017 to 5% in 2018, so a better performance of the stores.

So the logic is the better the store performs, the less impairments you will have. Secondly, and this is another inherent effect, since there is not such a kind of store expansion to new opening stores rather remodeling or relocation, this means that the risk is lower for new stores or the investments that we are undertaking, say it being a relocation or being a remodeling.

So, the better in your language is lower, so less risky and this comes with the effect that impairments will structurally be lower once we go into this remodeling mode. And thirdly, my board colleagues Bernd and me being still new, we are much more restrictive regarding store approvals and this has an effect on the impairment as well.

So, these are the three major drivers why impairments have come down in 2018 significantly.

Very, very clear. Thank you.

Just a clarification. The like-for-likes that you will report moving starting quarter one, will exclude e-commerce?

Include. The like-for-like will include.

Will include this number?

Yeah.

Thank you very much.

No change to prior years. No.

Because I thought they were not included in your target?

No, they have been always being included in the like-for-like.

No, I know. I thought that 2019 was a change because as you said your ...

No, that refers to the productivity, I'm sorry.

Yeah. Okay.

So, the sales productivity and this is related to -- I'm sorry I don't want to confuse you, but this relates to the sales productivity, clearly relates to the brick-and-mortar business, like-for-like includes online because they are like-for-like countries that we are doing like-for-like online business. And we have the same logic for online and brick-and-mortar, but sales productivity only includes the euros per square meters and not online.

Perfectly clear. Thank you.

Thank you.

Thanks, Melanie and thanks for everybody joining us in the call and especially for the time spent with us. So, this completes our call for today.

We will be reporting back to you on May 2 on our first quarter. If you have any questions which you would like to discuss in more detail with us, our well-known members of the Investor Relations team are ready to help you on this one.

With this being said, I want to thank you for your participation and wish you a very good day. Thank you very much.