Mark Langer - Chairman of the Managing Board and Chief Executive Officer Yves Müller - Chief Financial Officer Dennis Weber - Head of Investor Relations

Luca Solca - Exane BNP Paribas Volker Bosse - Baader Bank Andreas Riemann - Commerzbank A.G. Alberto D'Agnano - Goldman Sachs Jürgen Kolb - Kepler Cheuvreux Mark Josefson - equinet Bank AG Jörg Philipp Frey - M.M.

Warburg Peter Steiner - Bankhaus Lampe

Good afternoon, everybody, and welcome here in Metzingen to our Group headquarters, and also to our presentation of our 2017 financial results. Very happy to see so many familiar faces here on site, but also want to take the opportunity to greet those who are following us on the Web or on the phone.

Today, in today's presentation, I will update you on the progress in key areas, our strategy and discuss our financial outlook of 2018. Our presentation will ensure that you have a good understanding of our plans for the next 12 months.

I will share the presentation with Yves Müller, who joined our managing board as the CFO in December last year. Before coming to Hugo Boss, he held the CFO position at Tchibo, a German coffee and non-food retailing company for more than 11 years.

Yves, welcome to HUGO BOSS. When we presented our annual results a year ago, I talked about the year of stabilization when I referred to 2017.

It was our goal to stabilize sales and profits, and to initiate strategic changes in order to return sustainable and profitable growth. Today, I'm pleased to say we achieved our goals.

We met or even exceeded our financial targets and made good progress in key areas of strategy. Our position in core markets has clearly improved.

In our largest German market, we defended our leading position. Sales remained stable compared to the prior year level, a good achievement against the decline in market backdrop, at least in specific apparel retailing.

In the UK, our second largest, market, we continue to go from strength to strength. In 2017, sales increased 9% excluding currency effects, representing the 8th consecutive year of at least high single digit growth.

Solid demand from tourists, who took advantage of the weakening pound, did contribute to this performance. But more importantly, also local demand remained to drive our growth.

In the U.S., we staged an impressive comeback over the course of last year. Demand in our own stores picked up noticeably, in particular in the second half of 2017, recovering from the declines we suffered from in the prior year.

In a market environment still marked by traffic declines and high levels of promotional activity, especially in department stores, our online and physical full-price business outperforms the outlet channel, pointing to improvements in retail execution and growing brand strength. However, overall U.S.

sales were still down 1% because of declines in the wholesale business. Finally, performance in our largest Asia market, China, tied in with the end of the prior year, as the momentum generated by our price repositioning and growing digital focus carried over into 2017.

Full year sales in this market were up 8%. The success in the latter two markets, where we had been under enormous pressure before, speaks to the effectiveness of the measures we took in 2016.

As painful as they were, it was right to eliminate all pure off-price distribution formats in the U.S. wholesale.

And it was equally the right measure to right-size reasonable price gaps, so that Asian price levels align closely with the rest of the world now. With this short-term corrective action behind us at the beginning of 2017 already, we were able to focus fully on the heart and soul of HUGO BOSS, our brands and their repositioning to better reflect the needs and expectations of today's consumers.

BOSS is an iconic brand, based on its strength and tailoring the notion of success engrained in its collection and its communication. Over the past 12 months, we made sure to adapt its values to the mindset of the modern man.

BOSS addresses the drive. We first of all desire to outfit the ambition of men on their way to greatness, extending the brand relevance beyond just regarding BOSS as a business or suiting brand.

The integration of the former BOSS Green and BOSS Orange lines into the BOSS core brand has been an important step in this direction. We no longer target three different, but just one customer who we address 24 hours, 7 days a week.

We introduced this change in creative direction with the fashion show in the summer, in summer 2017 in New York, showcasing a collection as easy, as relaxed, and as casual as none before. Since then, casual and athleisure have become key elements of the BOSS look, which overall has become more modern and more sophisticated.

We equally focused on our women's offering. The BOSS Women does relate to success, confidence and style too, however in a different way than men do.

She works in her own way, she speaks in her own voice and she moves in her own space. Our Womenswear addresses exactly this customer with collection that has become a modern, including some surprising elements [with great glitters] [ph].

The integration of the former BOSS Orange brand line has clearly strengthened the casual elements of the collection. And while the fashion part has been largely limited to the high-end of the collection in the past, we have now made it an integral part of the entire collection so that it becomes more accessible also to a younger consumer.

The presentation of our first Gallery Collection in Berlin last July, which marked the starting point of our new products in Womenswear was received extremely well. Finally, we firmly repositioned Hugo in contemporary fashion.

Hugo is a platform of self-expression addressing audience that lives a very individual life style. A spirit of adventure, purpose and opportunity drives this consumer.

HUGO celebrates this ambition, globally engaged, always curious and authentically expressive. The collection we showed in Florence in June last year brought this message to live in a powerful way.

An abandoned factory was the ideal scenery to present HUGO Spring/Summer 2018 collection marked by progressive and conventional looks, bring our competencies in terms of quality, innovation, fit, with the non-conformity that what HUGO stands for. Today, we are all the more confident that the positive response to the new brand strategy will also become manifest in the strong consumer demand.

Our confidence has grown as the result of the fact that some elements of the new brand strategy already contributed to the significant improvement in retail performance over the course of 2017. The BOSS fashion statement had started to evolve already with the Fall/Winter collection.

Coupled with an expansion of the athleisure offering in our stores, BOSS Green was added to 80 more stores and shop-in-shops in the past 18 months. This drove a consecutive improvement of comp store sales performance.

While we still suffered from declines at the beginning of 2017, performance picked up markedly over the course of the year. The 7% increase in the fourth quarter was the strongest growth of this metric for more than five years.

Our online business made a significant contribution to this improvement. This was not obvious at the beginning of the year, when we suffered from the repercussion of the website we launched in fall 2016.

The re-launch had clearly elevated brand experience through a better product presentation and the improved linking of content in commerce. However, the design and navigation changes negatively affected the site's usability.

In addition, the merchandizing was not in sync with the needs of our online consumer. At the start of the year, recognizing these problems, we brought together the relevant business and IT functions with a brief to solve these issues, a cross-functional approach that we have institutionalized in the meantime.

Just mentioning a few measures out of a long list, we shortened the page loading times, changed the size layout and navigation to make it more intuitive for users and better balance the mix of our offering. As a result, online sales return to growth in the second quarter increased by more than 40% in the final three months of 2017.

In the full-year, we delivered on promise; our business was up 8% to reach €79 million. Let me come back with our future plans in this other areas after Yves Müller's presentation of the financial numbers.

Thank you. Yves, please.

Thank you, Mark, and good afternoon, ladies and gentlemen. Before I begin, let me just quickly say, what a pleasure it is to be here today.

Mark and the entire HUGO BOSS team, I think, they have done an incredible job the past year. And we are coming to my first 100 days was a company, and while I am still getting up to speed.

I readily look forward to working with you and the entire investment community. And I will do my best to answer each question I might have after the presentations.

So talking about 2017 and talking about the financial performance in 2017, the strategic measurements that we initiated return HUGO BOSS to growth in 2017. Group sales increased 3% on a currency-adjusted basis.

Though, the appreciation of the euro had a negative impact on sales performance in euro terms, and the group reporting currency the euro, the revenues were up 1%, they amounted to more than €2.7 billion. From a regional perspective, and this is important, sales increased on a broad basis.

Europe was up 2% in currency-adjusted terms driven by the UK. The Americas exceeded original expectations was sales growth of 1% on a currency-adjusted basis, and double-digit growth in Canada more than offset 1% sales decline in the U.S.

And this market HUGO BOSS desperately reduced off price business in the wholesale channel to underline the premium position. And looking at Asia, in the surrounding markets, the region recorded a 6% increase after adjusting for exchange rate changes.

At the momentum in China remain robust throughout 2017 resulting in high-single-digit growth. In Japan, a very relevant market at right spot in the region delivering high-single-digit growth as well.

By distribution channel, on retail sales were 5% of the prior year level and on a currency-adjusted basis. On the comp store basis, like-for-like, on retail sales were up 3% including a significant improvement quarter-over-quarter.

And all three regions were up above the same rate with growth being mainly driven by a significant improvement of the conversion rate into lesser extent, and increase in the number of units sold per transaction. As expected, currency adjusted sales in the wholesale business decreased 2% in 2017, this was primarily due to the Americas were more than half of the 10% decline in this channel related to the deliberate discontinuation of off price business in the U.S.

to further established the upper premium position. And in addition, we converted shop-in-shops from wholesale to own retail to further enhanced brand presentation.

In Europe, channel sales were up slightly and the German business broadly representing the force of global wholesale sales remained on prior year's level in a very difficult market environment. And finally, the licensing business continues to be in important sales driver, the business generated 14% growth in the reporting period driven by double-digit increases in the largest category fragrances.

Completing my discussion of top line trends, sales with BOSS brand increased 3%, excluding currency effects in 2017, and this performance was particularly strong in the athleisure, which still retailed under the name of BOSS Green. Here, sales grew at double-digit rate.

Business wear and casualwear revenues were above the unchanged compared to the prior year. HUGO sales grew 5% driven by double-digit growth in the casualwear segment.

Specially, in the second half of the year distribution changes started to have an impact. These changes related to some department stores, where BOSS is taking over space from HUGO in certain categories, because its brand for position is a benefit with the customer.

And in addition, we are reducing HUGO's exposure to the outlet channel. We are convinced that this distribution alignment is necessary, to sharpen in HUGO's fashion forward contemporary for position.

And by agenda, the 4% growth of our menswear business was driven by improvements in the collection as well as the shift of marketing expenditures, womenswear sales declined by 2% mainly coming from the reduction of its retail floor space. Moving below the top line, let me discuss the development of the margin major cost positions and the group's profit performance.

The group's gross profit margin increased 20 basis points to 66.2% in 2017. The positive effects from better growth and the higher margin on retail channel and lower discounts in our Asian own retail business were partly offset by negative currency translation effects.

On the costs side, selling and distribution expenses were up 2%. Own retail cost continue to be tightly controlled benefitting from our focus on renovations rather than new openings as well as the successful of renegotiation of rental contract.

In addition, the closure of 15 underperforming stores announced in summer 2016 was completed at year-end. With this cost line marketing expenses increased 3% in absolute terms and amounted to 6.8% of group sales.

The expansion of digital activities as well as investment in fashion shows drove this increase. The growth of G&A expenses largely related to IT, where we invested in the rollout of omnichannel services as well as the successful turnaround of our online business.

And as a result, EBITDA before special items remained stable compared to prior year, and amounted to €491 million resulting in a margin of 18.0%. Net income was up robust 19%, this was due to a significant swing in the other operating income expense line, primarily related to the non-recurrence of store closure costs in the prior year.

These effects more than compensated higher tax rate, which rose from 24% to 30%. We forecast 2 percentage points of this increase to be structural, resulting from permanent changes in the taxation of the group's license income in Germany.

The other 4 percentage points were mainly attributable to one-off non-cash tax expense in connection with the revaluation of deferred tax assets in the U.S., and we do not expect this effect to recur going forward. If we look at the margins across our regions, Asia generated the best margin improvement in 2017.

And Europe operating profit was up on an absolute basis that slightly down relative to sales due to higher expenses in marketing and own retail. In the Americas, the discontinuation of off price business in the wholesale as well as investments in IT and logistics compressed margins by 230 basis points.

In Asia, however, the operating margin increased by 220 basis points, positive sales momentum, less discounts, and lower rental costs drove this improvement. On the following slide, I'll discuss some key balance sheet and cash flow trends.

We had a very positive net working capital development at year-end. We kept trade net working capital under tight control and significantly improved our cash conversion cycle.

Supported by the positive sales momentum, the inventory position was below prior year's level throughout the period, predominantly due to declines in the Americas and Asia. At year-end, inventories were down at 5%.

Receivables decreased 9% reflecting the sales decline in this wholesale channel as well as strict collection. Trade payables were up 5%.

Trade net working capital improved and absolute in relative terms and based on the average of the last four quarters, it amounted to 18.6% on 2017 sales, a decline of 120 basis points compared to the year-end of 2016. Investments decreased compared to 2016 due to fewer store openings and takeovers as well as the deliberate postponement of store renovations to 2018, due to the development of the new store concept.

In 2017, investments amounted to €128 million, around €30 million below prior year's level. The group's own retail business continues to be the focal point of investment activity accounting for almost two-third of the total budget.

CapEx spent on new store openings slightly exceeded the investment in renovation, a situation which we expect to be the other way around in 2018. The remaining third of the budget was largely dedicated to IT.

Investments in the area of over €30 million underline the importance of the digitization of the group's business model, in particular the omni-channel integration and the digitization of the group's own retail activity. The declines in working capital and CapEx boosted cash flows more than originally expected.

Free cash flow increased by a third to €294 million in 2017. However, it would have been around €20 million lower excluding the timing effect in trade payables position.

As a consequence of high free cash flow, net debt reached the lowest level in more than 15 years at €7 million. The company HUGO BOSS was almost debt free at yearend of 2017.

I would also like to take this opportunity to state our commitment to providing attractive returns to shareholders. Accordingly, we propose a dividend per share of €2.65 for the 2017 financial year.

This presents a 2% increase compared to the prior year and the payout of €183 million. At 79% the payout ratio normalized in line with our dividend policy.

Ladies and gentlemen, in this context I would like to reconfirm the key principles of our financial management at HUGO BOSS. We remain firmly committed to the goal of generating sustainable profitable growth.

The role of the finance function and myself will be to co-pilot the business on this journey. We target to improve sales productivity in own retail, which includes the acceleration of sales growth in our online business.

And in addition, we strive to generate cost efficiency to free up capital for future growth and to ensure margin improvement. In own retail measures will include the continuous optimization of the store portfolio through openings and closures, as well as the cost efficient remodeling of successful stores.

Beyond our own retail operations, we also aim to reduce collection complexity, following the simplification of the brand portfolio and a digitization key process along the entire value chain to make them faster and more efficient. Profitable growth will be a key driver of free cash flow maximization, the ultimate goal of financial management at HUGO BOSS.

However, we will evaluate a change of group's key profit metrics, on EBITDA before special items to EBIT to better capture the group's value creation, taking also the effect of investments into consideration. Expect an update in this respect over the further course of the year.

Finally, there will be no changes regarding the use of free cash flow. As reflected in our proposal in for 2017, we will continue to payout the dividend amounting to between 60% and 80% of consolidated net income.

In 2017, exchange rate volatility had a significant negative impact on the group's profit. Let me give you some more background and our thoughts for 2018.

To date, currency risk management at HUGO BOSS mainly focuses on the hedging of the group's internal financing activities. By doing so, we limit the cash impact from exchange rate fluctuations to a minimum as demonstrated in the financial result statement of 2017.

And we also benefit from the natural U.S. dollar hedge provided by the fact that our U.S.

dollar denominated sourcing activities more or less balances our sales exposure in this currency. However, the significant swing of exchange rates in the reporting period has also highlighted the effect that the simple translation of foreign subsidiary results, and have on the group sales and profit performance.

In particular, when it comes to currencies such as the British pound and the Chinese yuan, in which we do not source. As a result, we have a long exposure in these currencies, including the operation - operating expenses related to our business in the UK and China.

We do not hedge the associated translation risk with derivatives, primarily due to the largely non-cash nature, instead, we focus on operational hedges such as the regular adjustment of selling prices. In 2017, however, we decided not to adjust prices in light of our ambition to better align global selling prices.

This meant that the depreciation of currency such as the British pound and the Chinese yuan, not only resulted in a negative sales impact of around €40 million in 2017. The strength of the euro also lowered reported EBITDA by around €20 million in 2017.

Even factoring in the benefits on the COGS and operating expenses line. And based on the prevailing exchange rates, we expect operating profit in 2018 to suffer from an impact of around $10 million as well.

Now with all that said, I would like to look forward and provide you with our financial outlook for 2018. Most importantly, sales growth is set to accelerate.

On a currency-adjusted basis, group sales should increase to low to mid single digit range and all regions are expected to contribute. We project that Europe will perform in line with the overall group and that sales in the Americas should increase at a low-single-digit rate, excluding currency effects.

And we expect that Asia will outperform the other two regions. The license business is forecasted to be up to mid-single-digit rate too.

By distribution channels, own retail sales should increase at a mid-single-digit rate driven by a better performance in the existing spaces. This includes online, where we expect double-digit growth.

Store openings and closures should have a neutral effect on channel sales. We are also forecasting low-single-digit growth in the wholesale business supporting and supported by improving trends and order for the Fall/Winter collection, which we just completed last week.

The group's gross margin is expected to remain broadly stable in 2018. Positive channel mix effects from higher growth in own retail should contribute positively.

In addition, we will shorten sales period in the European, American own retail business, so that lower discounts will have a beneficial impact on gross margin performance. These benefits will be offset by an upgrade of the value proposition of our collection, including a double-digit million investment in product quality.

In addition, negative currency translation effect will hurt margin performance. Gross margin development is therefore likely to be negative in the first half before improving in the second half of the year.

Operating expenses will increase moderately, because of our measures to drive the group's digital transformation to invest in customer relationship management and omnichannel as well as our ambition to ensure premium brand and shopping experience. In sum, EBITDA before special items is expected to perform within the range of minus 2% to plus 2%, including the aforementioned negative currency impact of around €10 million.

We project net income to increase at low to mid single digit percentage rate, despite the non-recurrence of the one-time benefit related to the release of store closure provisions in 2017. Profit growth will be supported by the normalization of the group's tax rate as discussed before.

Investments will increase between €170 million and €190 million, largely reflecting the renovation of around 150 own retail points of sale in 2018. The investments into the opening of 15 to 20 new freestanding stores including 10 HUGO stores will be comparatively much smaller.

We will also incur the first cost related to the relocation of our signature outlet here in Metzingen, where we will open a new formal central location in 2019. And aside from own retail, the remainder of investments will largely focus on IT again.

In addition to higher investments, higher working capital needs, partially related to the reversal of the timing effect in trade payables will also affect free cash flow generation. We therefore expect free cash flow to amount to between €150 million and €200 million.

Thank you very much so far for your attention. I will now turn back to Mark Langer who will give you more details on the operational drivers of the financial outlook and the future strategic measurements.

Mark?

Thank you, Yves. So 2018 will be another important milestone in the implication of the strategic changes that we outlined one-and-a-half years ago.

The first collections following the new brand strategy hit the stores at the end of 2017. While it's still early days, we are very satisfied with the initial response from our consumers based on trading and on retail in the first weeks of 2018.

Our wholesale partners also reacted positively. Since the presentation of the very first new collection in summer last year, that confidence has clearly grown further.

The order performance of Fall/Winter 2018 collection speaks the clear language in this respect. The presentation of this collection during the new fashion week at the beginning of February picked up on the theme of spot tailoring.

The fashion press received the fusion of tailoring in athleisure very positively. Commentators highlighted the sharp statement of the collection which successfully combines the brand's heritage in formalwear with modern athleisure styles.

We prepared a video, so please see for yourself. Quite impressive.

But only a few days later, we presented the second edition of the Gallery Collection in New York too. Following the known success of the launch at the Berlin Fashion Week in summer last year, this collection drew inspiration from the purist work of the minimalist artist Robert Morris, and focused on bold interpretation of tailoring the key component of the BOSS DNA.

The collection also presented - that we presented also Mark Jason Wu's final as Artistic Director for BOSS Womenswear. In the past five years, the signature style has significantly shaped our Womenswear collection.

We are very thankful for Jason's creative input. It has been inspiration for all of us and the entire creative team of BOSS Womenswear, which we will now continue his work under the leadership of Ingo Wilts.

There are also many things moving at HUGO. Based on the brand's trend and fashion focus, we aim at developing a new operating model, which takes customer engagement, speed and responsiveness to a new level.

Customer research has clearly documented the far greater online affinity of the HUGO customer. So it's only logically to make the brand the group's digital speedboat, in terms of product development and also distribution.

A strong digital platform that supplements the brand's physical touch-points will ensure that we cause a deep understanding of our customers and to act with them on equal footing. The transformation is going to take some time.

It will also include the discontinuation of some undesirable distribution as Yves outlined. However, the momentum around HUGO's reverse logo product and casualwear is clearly building.

HUGO is enjoying strong growth in online partners like Zalando in Germany and ASOS in the UK. In addition, we are pleased by the trust that many department store partners place in the brand.

Exemplified by the growth in space at accounts such as Veronica [ph] in Germany again and House of Fraser in the UK are allocating to HUGO. Two weeks ago, we brought HUGO back to Berlin with the new store.

In total, we will open around 10 HUGO stores in 2018. All openings will be supported by extensive regional marketing activities with the brand heat in key European fashion capitals.

All our work in 2018 is first and foremost meant to drive performance in own retail. In 2017, we improved retail sales productivity by 2% to €11,100 per square meter.

This represents good progress, but they're still some way to go to achieve our target level of €13,000 per square meter by 2021. So let me highlight some main drivers in this respect.

First, we will gradually expand our BOSS casualwear offering in stores into next 12 months. And doing so, we are benefiting from significant upgrade of the former BOSS Orange offering, which has been a particular focus of the quality investments, we met across all of our collections.

The Spring/Summer 2018 collection is the first reflecting these investments. Similar to the fact that the enlargement of the BOSS Green offering in own retail had in 2017, we expect the greater representation of casualwear to have a beneficial impact on traffic and conversion rates.

Second, we will rollout our BOSS store concept. In 2017, we have started with three pilots in Birmingham, Geneva and Dubai.

Performance in all three stores is very encouraging and above pre-renovation levels. Consumers get positive feedback on the clean and modern design as well as the inviting ambience.

In addition, digital elements connect the store with the online world. The new concept is also more functional, doors and hidden compartments, for example, ensures a quick availability of styles and sizes, not on display.

The new concept will be deployed in all stores that we will open or renovate in 2018. Third, we have invested in service, when my board colleagues and I recently held fireside chats with some of our most important customers in Hamburg in London, many emphasize their relationship with individual sale assistants in our stores as a key consideration for the choice of our brand.

That is why we're investing retail trainings, but also some personalization of the entire customer journey. This starts with communication, where we are now increasing the personalizing email newsletter to customers based on their purchasing history and personal preferences.

This is also true now for our hugoboss.com website, which is now adept to the user's navigation history, for example, when it comes to the selection of key styles on the landing page. Fourth and final, we will complete to rollout of the full range of omnichannel services in all European online markets by mid-2018.

These services include click and collect order from store that means online ordering in-store and return in-store. They all ties in with the implementation of the new store concept, which features a digital table that allows the store assistant to browse the online offering together with the customer.

In the U.S., all stores offer collect already and the full range of omnichannel services will be available by the end. Obviously, we also want to carry the momentum that we build in our online business at the end of last year in 2018.

And less than a week from now we will adapt the hugoboss.com website, so that it fully reflects the focus on BOSS and HUGO. Changes in the site structure and layout will create two distinct brand worlds.

As a result, in particular, HUGO will be formal visible than today, in terms of its product offering as well as relevant editorial content. Consumers with a key brand preference will arrive directly at either the BOSS or the HUGO landing page following the boss.com or the hugo.com link that we highlight in our print advertisement.

However, we also want to make sure that consumers without a clear brand preference may browse the entire offer by product group, independent of the single brand and can easily change back and forth between the two brands. Hand in hand with the further optimization of the hugoboss.com website, we are also upgrading the presentation of BOSS and HUGO on the size of partners.

In the future, this by mean that we take full control also business via concession models, where this is not possible or economically sensible, we still strive to ensure maximum consistency with our own standards. To this end, we have just launched new portal for wholesale partners to support them with detailed presentation guidelines, product information as well as product marketing with image material.

Of course, digitization goes beyond just distribution. We aim to digitize key operational processes along the entire value chain where this generates efficiency.

One such example in collection development is the first digitally designed HUGO capsule collection that we'll launch in late summer. It will consist of 29 styles across various product groups and casualwear.

And HUGO has started to making use of virtual prototyping already some seasons ago. We intend to make such capsule collection a regular part of the HUGO offering.

Thanks to much shorter lead-times compared to regular collection development process, they ensure constant-units [ph], the key competitive advantage in contemporary fashion. It's only logical to sell such a collection primarily online.

This is even true for the HUGO wholesale business where we are rolling out the digital showroom launch in Metzingen in 2017 across Europe. In a few weeks from now, wholesale partners in London and Paris will be able to order the new HUGO collection fully digital too.

For the end of 2018 we will then make the first steps to adapt the device also to the needs of the BOSS brand. You can clearly read from my comments that HUGO brand - that the HUGO brand serves an important purpose that goes beyond its commercial and financial contribution.

HUGO is the group's digital speedboat. It is doing pioneer work in fields where we have not been active before.

In doing so, it is benefiting from its relatively small scale in organizational independence of the far larger BOSS brand, which allows greater flexibility and speed. We are using agile management techniques built on the principles of co-creation, iteration, distribution of - distributed authority as part of the HUGO transformation.

Every success achieved with the application will have increased the openness of the rest of our - the organization to embrace these changes. Let me now sum up the key points of today's presentation.

We clearly made good progress in the strategic realignment of HUGO BOSS. The significant acceleration of top-line trends over the course of 2017 has made us even more confident that the refocusing of both brands is on track.

Our sell-out results of the new collections and the feedback from wholesale partners on our Fall/Winter collection point in the exactly same direction. Of course, we will not stop here.

We have identified further drivers of continued growth that we'll unfold in 2018 and beyond. These drivers includes the further refinement of our collections following the new brand strategy, but also considerable improvements in retail execution online and offline.

These improvements come with ongoing investments, which coupled with adverse currency effect will limit our profit growth in 2018. We are actively driving these investments, because we know that it will help us building further brand momentum.

At the same time, we acknowledge that we will have to finance these investments with further efficiency improvements. I'm confident that we will be able to achieve both so that we will generate sustainable and profitable growth in 2019 and beyond.

Now, we are very happy to take your questions.

So, good afternoon, ladies and gentlemen. I think those in the room will know me.

My name is Dennis Weber, head of the investor relations activities here at HUGO BOSS. Maybe those on the phone won't know me so that's why.

The usual rule, please, please state your name and your organization. And please limit your questions to three.

First question is from Luca Solca from Exane.

Yes, good afternoon, Luca Solca from Exane BNP Paribas. I'm interested in understanding more how the off-price portion of your business is shaping up, its contribution to top-line and operating profit, as well as its contribution to organic growth that you recorded this year at record levels.

Thank you.

So what has changed in 2017 that any off-price business is now under our direct control. If you remember, that this was something that we have to address, and we took the decision already back in 2016 not to allow any third party to operate off-price pure-plays distribution.

Of course, the importance of the - of our off-price business varies by markets. So this is relative to group average.

It's still on a proportion with Asian markets. Europe is more or less on group average and we still have a higher share in the U.S.

However, we highlighted this as part of the presentation. We consider stronger growth in our online and full price business as important metrics to assess brand desirability and brand strength.

And we are very pleased that we have seen for the last two quarters that we reported back to that on a global scale. In particular, also in the U.S.

we have seen stronger growth in the full price business in our own online. Clearly, there is no right balance between off price and full price business.

We acknowledge the fact that as an apparel company, we will not be able to implement similar strategies like some accessories pure-plays. However, we are pleased with the progress we have seen.

We have not given the market a target number of split between full price and off price. But also today we reconfirm our commitment to drive our retail growth, of course, in like-for-like, also in absolute numbers, rather by full price distribution in online, then the off price recognizing that this is an integral part of our business.

In terms of profit, just to complete your question. It varies.

It's not that our full price businesses are online. It's by definition more profitable than our off price, because we just have higher gross margin to this effect.

That clear said predominately at full price, this is being offset at least partially by the lower cost of operation with factory outlets' densities pay a role. But it's not the major differences in sales channel profitability with that drives our decision.

It's purely driven from the IRC consumers that we have them well balanced between these two sales channels.

Volker Bosse, please.

Yeah, Volker Bosse, Baader Bank. Thanks for taking my question.

I would like to start with your online business. Congratulations to your online improvements.

Nevertheless, I see a bit reluctant to join third party web-pages, be it with your online wholesale or be it with your own online activities on marketplaces or is my impression wrong or could you please, a bit strategic insight, what you plan to do here and what you have achieved to a bit more vision in that field of your online strategy. And second question would be on your expansion.

You use 15 to 20 new stores. I think that's on a net basis.

So - but an idea of regional-wise where to expect, and also the 10 HUGO stores where we can - those expect? And then, welcome Mr.

Müller on on-stage. And my question would be what is your first impression?

What was your strategic focus in your first day? And, yeah, what do you think?

Where do you see fields for improvements? And perhaps one final one as a clarification, the tax rate you mentioned that in your presentation already, just as a reminder what is the tax rate we should put in our model for 2018?

Thanks.

So just on the online distribution, we recognized that in certain markets multi-brand online distribution is an important distribution platform for us. And basically the same principles apply in the online field as we apply in the physical world.

So if the brand mix is right, if the brand presentation - is what we like to see from these partners. We are very committed in these partnerships.

You might have seen that we were one of the key brands to participate in the Zalando Bread & Butter event last summer in Berlin, demonstrating the very close and beneficial relationship we have with these multi-brand online pure-plays for example. We also worked very closely with many department stores that are coming from a more physical background like we might be as well, which are now making progress also to serve their customer base via their e-commerce offering.

And they're very happy to be present at - on the Nordstrom.com or Saverage's [ph] website. So there is the customer who has like in the physical world who has found BOSS as her or his prime source for all wearing occasion.

These customers will probably also in the e-commerce world use our enhanced and improved e-commerce performance an you rightly pointed out coming from an admitingly lower base, we have seen strong momentum in the second half of the year. So that's one customer group.

The ones who are not as brand loyal yet, we need to introduce them to the superior offer that we think we can offer both on HUGO and BOSS via multi-brand sites. These need to be the right ones as I said in terms of content that we provide.

So many of these partners ask us, please provide us with your picture material, your storytelling, you have such a great story to tell with all the - your sponsorship activities that you have. So we are willing to share these in an efficient way with our partners like we do it again also in the physical world of the department stores to grow this business.

And I think we have not announced any of these deals, but we are in advanced negotiations with many partners. We believe now with our build competencies, operating e-commerce at least in the U.S.

and the European market, it could be now also an opportunity to go into digital concession agreements, where we basically just tap into the traffic of these partners and operate the business. We would not speak about such business models that we don't see a likelihood of realization.

But it's not as concrete to be announced. Just on the expansion then, I would hand over to the specific question you addressed to Yves Müller.

So it's a 15 to 20 gross openings that we expect with freestanding stores. The 10 HUGO stores we have to be realistic will be predominately based where HUGO is known best.

So we will not start in Argentina, where we don't have enough, not even the sales subsidiary. But it's the key western European markets, the U.S., where we see the biggest potential for HUGO where it's established via today's presence, but also via our license business, where we'll start to expand with 10 HUGO stores in 2018.

Yeah. In talking about your questions, just start with the specific question about the tax rate, 26% should be the right tax rate I think for the future.

As I pointed out, this 4% is non-recurring from the United States. But this 2 percentage points is an increase from 24% to 26%, due to a new taxation law regarding licensing costs Vervichdoya [ph] has to be included in Germany, so I'm talking about this.

The second point is, yes, I'm really great to be here. I talked about my first 100 days.

And I really get into the strategy as been pointed out, even before the due diligence that I did before I joined Mark and his team. And I'm really up to the strategy now.

And I'm really supporting this. Taking one example, I think one big issue in retail in the future is retail productivity.

And this is what we are driving for. I think the big driver in the P&L will be increasing the density, euros per square meter.

And saying, clear, this is the major driver of the P&L. And it's basically to say what's right, something - there will be, of course, some white-spots.

There will be, of course, some new openings here and there. But I think the real focus will be on remodeling.

And remodeling has two big advantages. One is you know the location already.

You know if it's running or not; and secondly, the remodeling costs are much efficient and lower to new investments. So I'm very much in favor of this retail productivity.

And then we will accelerate this in 2018 and going forward. And finally, I think we will speed up, as Mark pointed out, the online growth.

I think it's - a lot of big potential that we have here. And being a new rookie on the board as well and being responsible for IT, I was really impressed what we can offer in omni-channel services.

I was in the stores, and since October for example in omni-channel we are able to order from store. We have the IT capabilities to have the real-time access to our inventories.

I think this gives us the kind of competitive advantage that we have. We are offering this service since October and I think with rolling out to further countries this has good potential for the future as well.

Andreas Riemann, Commerzbank. Two questions for my side.

First one on the U.S. business, business doing much better now.

Can you help us and explain is that the market recovery just on extend that BOSS specific, such as super [ph] sell-through, so any comment on the U.S. business?

And second one, 2018, you speak about 150 store renovations, digital investments, so it seems like 2018 is a year, where OpEx and CapEx to sales ratios could peak 2019 profits and cash flow should start to grow again. Is that the right observation or would you say these increased investments could become permanent investments?

Let me start with the second part of the question, even though it's clearly more difficult to predict in all details yet 2019 compared to 2018. But it's clear that we expect to return to absolute and relative profit growth as of the year 2019, and we strongly reconfirm this target.

But we need to do the right things, and we can't delay necessary investments either on the CapEx or the OpEx side to build superior business model, especially since we're seeing even stronger proof than we initially expected from the changes that we have. We have a winning business model, we have done the right adjustment to our new strategy, you still remember this was initially met 18 months ago with slight some skepticism.

And now as consumer discovered this collection like we're seeing the strong acceleration like-for-like, come back to your U.S. question in the second.

We see, this is something that is superior to many other apparel players that we compete with. So as we've recognized that this is in our business model, we see capabilities that we had already for a longer periods in terms of IT backbone system, logistic, strength of the brand, brings us together with omnichannel capabilities and now with the shopping brand strategy.

I am confident that this is now the time for many of our competitions also struggling not - it's the time to take market share. This is what many wholesale partners also provide us with the feedback what we listed operators will tell us, in particular, in these markets where we have staged impressive come back.

We had partners in China, we had partners in North America. The time is now to retake market shares, where needed, be it on the marking side, be it in the role of shopping services, we are willing to step-up our approach, because different to some others that might be in a downward spiral.

We have knowledge of the top line momentum to report on this investment. And fortunately, this comes together with the time, I mean, you know that have been reluctant in the past provide you with the upside or the downside from currency fluctuation, and I've been doing each job for seven years and I've avoided for all these years to quote the impact exchange rate have on the bottom line, because of much smaller now.

And we're talking about €30 million negative impact compared to when we first highlighted our financial targets back in November 2016. The pendulum will swing both ways, we have to accept it.

We actively opted against aggressive price adjustment to compensate that, I think, you've expanded we are well today. So there is dampening factor that we have not envisioned into this extent 12 or 18 months ago, we have to deal with that.

We will also look carefully into price adjustments over the next 12 to 18 months, while we believe with this momentum being that's building that we see a further acceleration not only top line, but also in the EBIT or EBITDA development in 2019 and beyond. How high is high?

Too early to tell, clearly, we have stabilized business at current profitability level. But we are committed to drive higher profitability levels going forward.

What I now described on a more global scale, especially you can translated it back to the U.S. business.

So we have come back to important entry price points, something where we lost our U.S. consumer, because our offering on retail was just too expensive to what U.S.

consumers are expecting from us. We have placed a much stronger focus - the importance of the casualwear segment, which was a positive globally, but it was even more important in the U.S., where the smart casual trend is even stronger than any other markets.

So we were in desperate need to introduce these categories to your business, and I think we mentioned is also as part of the presentation. The U.S.

comeback was the strongest market surprise that we reported in 2017, because second half of 2017 was still the old collection basically, what we were only doing is to reintroduce some of the styles in particular both athleisure, casualwear not at all, just only feasible as of now 2018. Let's see how high is high, we are just off a few weeks of trading, but we see the momentum in the U.S.

to be on our side, but Luca is right, the U.S. is clearly a market where promotional activities, right, you have to be sure that you are not breaking any risk to your full price business by the exit from you wholesale partner.

So it's not an easy market, even so I would also say the market is bottoming out in terms of promotional activity. So we also have to say that we probably have benefited from the business environment that has not further deteriorated in the U.S.

in the second half of the year, probably seeing some of the data also for the holiday season, which were better than initially expected.

Hi, Alberto D'Agnano from Goldman Sachs. On your store portfolio, I was just wondering, number of stores pretty much flat, but some HUGO openings.

I expect the HUGO stores to be a bit smaller than the BOSS stores. So are you implying that you're going to close some largest stores?

And is your selling surface overall going down? And other question is on your online concessions, you appreciate the advantages that these provides in terms of not having unsold inventories with your retailers, and better presentation of your products?

Just a question on the economics, is it better than wholesale, once you allocate the costs? Thanks.

Okay. Don't you take the question on the concession economics, then I'll go back to the stores.

Okay, regarding online concessions, I am very much in favor of online concessions, why, because you control the brand, and you control the prices, control the offerings, and you control the assets. And I think in our business model, this is crucial, especially in this online, where it's - when it's comes to price down, you can control this.

I think, this is crucial and has strategic importance. When it comes to margin, I think, it's more or less, because you are talking to existing customers, I think, it's more or less give and take, and risk and return issue because, then you are responsible for your own inventories therefore you have a higher risk.

So this is a kind of risk return thing and point of negotiation actually.

Yeah, it should be win-win situation, if we can't at run those business was higher productivity then we probably shouldn't touch it, but as we have demonstrated in physical work, where we have seen sometimes tremendous increases due to the capabilities that we brought to the party that Yves just described. It can be beneficial for both, if we bring it from 100 to 100 plus X, if we run this business in terms of concession.

In terms of number of stores and space, I think you pointed out a very important part, I think on a half year base, we provide and also update on the size of our retail network in terms of square footage, of course, we see increase of e-commerce is becomes a bit distorted. But part of the restructuring that we started in Summer 2016 was also to either closed down things that were beyond repair or just oversized not always easy, but the significant improvement that you saw in the Asian profitability as at least to some degree also due to the fact that we were able to get back some spaces that we are just excessive.

So we - right size stores of 600 and more square meter to something that's more fitting to our capability 350 to 400. So it's not, as I say, then seen in the number of stores, because it's still counted as one U.S., but its dampening factor from square footage.

However, they are still wide space expansion, like, you are right with your assessment, smaller HUGO stores that we opened, they will be on average smaller than the BOSS store. But there will be wide space addition to it.

And we continue to have at a small scale some concession takeover. So I think it was an example from Canada in 2017, but on the much smaller scale than in the period between 2012 and 2015, where we benefited in a larger degree from concession takeover, we expect takeovers and wide space expansion to contribute all smaller single-digit amount to all retail momentum in the years to come.

Thanks. Jürgen from Kepler Cheuvreux.

Mark, let me challenge you again on a little bit of further outlook, what Andreas already tried to get on to you. And the idea, I mean, let's have that two ways.

You - the benefit as you've seen this business already pre- Permira, I mean, you've been with this company for some time. How has, first of all, the business changed on the all operating model changed from the days before, when BOSS obviously was differently organized to now when you try to bring back a little bit of the old BOSS going forward in the cost of doing this business, how was that developed?

And in this week, when I look at your project that you are trying to invest, is there - do you think that by the end of 2018, some of these projects just cutoff and that's it. And then, we are coming now to a level where the operating expenses can be better leverage, you have 5% like-for-like and all of a sudden the margin kicks-in.

Or do you think the ongoing investments into digital, at the same time, the physical store renovation and so forth. We'll continue to have dampening our effect on the margin progression going forward.

First one. And secondly…

Okay. Yeah, they're not easy, but…

Philosophical.

Okay.

Second one, very easy one. The wholesale, you said, it will return to growth, where this growth coming from, is that maybe also pure online players?

Or is that just HUGO maybe at lastly customer traffic in the stores?

Yeah. So let me start with the easy ones, and when - and you tell me then - you do the timeout to say, well, we are not interested in 20 years history of HUGO BOSS, it's 50 now.

Just that's my - this is with the company. So let's start with traffic numbers, we have seen in some markets already stabilized - even a stabilization in traffic.

But it was not a positive contribution from traffic that has improved driven all like-for-like improvement even this acceleration. And we look at these numbers over longer period of time; it's a structural change of the business.

So when you compared to the peak, where we stood a couple of years back that's a permanent decline of probably 20% of traffic to all stores, and we'll not come back. So I'm already hinting a bit to your first part of your question, history will not repeat itself, we are now in a completely different industry setup than we were doing [indiscernible] any times.

But I'll answer this with your question. So our aim is to via omnichannel services, via providing services, be it customization, bet it other information was the interest thing that we test now with HUGO pop-up stores, where we bring music, where we bring entertainment also in the stores, I mean, you have seen this performance also from some multi brand environment.

We need to give a reason beyond seems a product to drive people to store, because a lot of the educational, the inspirational part is not happening its prep via Instagram or own platforms. So this traffic to discover the collection will never come back.

And as the new generation of millennial customers will come there and hence where how they discover brands in the shelf will not come back. Your question on the midterm outlook, and something that we haven't answered, see, commitment in terms of where we want to take those company so far in terms of quantitative terms only answer to the degree that we are laser-pointed or sharply-pointed on driving sales densities, because we know that's the first and most important metric to maintain and to drive group profitability from an absolute and relative terms.

That's why we highlighted this already to so much as a key performance metric, when we outlined in the strategy that it's ultimately all has go through the filter does this add to your sales productivity in own regional operation in terms of expansion into using services everything they do wish or collection, space allocation between brand clients, it's all returned by just one factor, is this contributing to sales densities. €13,000 per square meter, as I said, just ways to go, we need to accelerate to the full year effect in 2017.

As I said, we wasn't also strong boost of morale internally that we delivered 7%, I mean, this was five years we have to remember that's almost like a very long period in the world of fashion that we were at these levels in the difficult market environment, which gives us a lot of confident that we have to maintain this momentum to a degree. Will every quarter deliver 7% or more?

Clearly, not, and it's not needed to hit on the €13,000, but it demonstrates as a lot of things are in place. Your question is an intelligent new way how you asked it, but - so it will be not more concrete in the answer, we just don't know how high is high.

We know that 18% EBITDA margin is already good metrics in our industry, we know that other power players that are higher. Nobody is right now operating as 25% that we - some years back and I was part of the team, I thought it was feasible, and I think, it was Yves or some colleagues who said in 2013, where we improved 500 bps within two years isn't 25% even a modest target.

Where we learned our lessons, we are not 22 or 23 anymore, we have work very hard to maintain in 18% profitability over the last two years. And as we indicate from our guidance, and we're seeing reaction today that will be seen as - from some investors as a disappointment, however, we would like to focus it, we are not managing this business for an exit end of 2018.

We want to be here for the long-term and we want to have the superior business model that outperforms of our industries. We have clear indication that we are outperforming many of our peers now, and taken market shares from the top line.

We have already a very strong operational, if you look at our gross margin levels, if you look at our cost efficiencies that this is a business model that has nothing where you can point from the outside value excessive in function A or B or C. But we need to maintain those momentum, we need to normalize, you're right, now investment levels.

So we have the strong focus to implement certain measures in 2018. And clearly, we are also depending on the normalization on the exchange rate.

I am not saying that we expect this to, if I am better forecasting exchange rates, I should change my assignment, I just have to deal with that. But clearly, if this is impact to neutral level, we will see already progression in that structural profitability.

At something, first, we have to report back on the level of progress, we have the strong commitment from the full management team that we'll back to absolute structural growth as of 2019, but it will be not a revolution like with the two of us experience between 2011 and 2013, where we've seen 200 bps improvement in structural profitability, these time are gone, because it's a different market environment. There is no via super-cheap franchise business to acquire from [us like there] [ph] was in China.

There was not a huge gap of 30% or 40% sales densities, when we started our retail journey, we were at €6,000 in less per square meter. We almost doubled this value right now.

To take it now to a €13,000, which is very high number compared to most of our peers, we require the best business system in the world. How this was ultimately translated in which EBIT or EBITDA margin we can't projected.

I think, there was one remaining question in terms of the drivers of wholesale growth in 2018?

Yeah. Well, I think Andreas also asked the question already on the U.S.

business. We see that in some accounts is not that, we are not takes it all, but they are still strong and successful wholesale partners of them.

Not only online pure players, but also once we are very good in combining these formats. So - and we are highly committed to grow our business with this wholesale partners.

We have been back more into the listening mode, I would say, and then we were a couple of years back. So in terms of our collection offering be to the specific need of the U.S.

market, Bernd Hake and Ingo Wilts, I know in a very close collaboration to ensure that our offering is right to retake market share, it's important posted account, be it specific market requirements, be it specific price points. So in these where we expect accounts to be successfully in business was next five to 10 years, online pure players leading platforms across, but also the partners via weathering the storm that's still raging in the U.S., we expect to be with these partners.

So we are - for example, rebuilding strongly our relationship with notch from in the U.S. as a leading department store, but similar efforts on the way was leading partners in the Western Hemisphere as well.

At the end, my target and objective to Bernd as you have to take market share, you have to be stronger than growth into all of our wholesale departments. And we have the collection that provides you in order to achieve this target.

Thank you, Mark Josefson, equinet. I like to dig a bit deeper in terms of these investments in 2018 that will hold back profitability.

As I said, you've highlighted in number of areas, there is the investments in the gross profit. There are P&L costs in IT, there are costs in extra surface and elsewhere.

Can you give us some feel for the relative importance of those different areas that are impacting this year, and which are those might fall away in 2019? And the second question, I had relates to the balance sheet structure - practically at zero debt now.

What is the current thinking on and optimal debt structure going forward, please?

Yeah. I will take the first, and then would ask Yves to take the second.

So it's not as one silver bullet that you might look for, okay, so this specific project maybe Jürgen's question was also in this direction, okay, tell me when this project is completed, and then, okay, we're after it, and then, okay, please so kind and give me the actual - exact amount because I can then plug into my model, and then now, okay, at least X percent margin improvement will come from that. But they are some, I think we highlighted some, but let me just quickly summarize them.

On the negative - or the dilutive - I wouldn't say to you - should avoid the term negative. But on the dilutive impact on the gross margin, I would highlight the quality investments that we have done across the board.

And of course, as I said earlier, we are committed, we have the superior business model and product to offer to the customer. And honestly, what I see now in Q1 trading, where now the first casualwear collection is being received a lot of wholesale customers even called us and say, well I was so surprised, what superior quality you offer at these prices.

You will give a very hard time to competition X,Y,Z, I said, well, that's a nice call, apart from your order numbers, it's not as high as I initially hoped for, and he would say, well, my overall unfortunately flat, but I just want to call you to tell you, okay, this is a significant step-up and now what you told us to expect that these three BOSS Green, BOSS Orange, BOSS Black should be one. Now we see it in real time, and real that this is really a significant investment to it.

To the smaller scale, it's a HUGO European price environment, where it's not beneficial to the German consumer, but for our French consumer at HUGO as of Spring/Summer 2018 has reflected 15% to 20% price reduction. So we are now very aggressively pursuing the contemporary market, I mean, we highlighted that to you as part of the strategy that HUGO all brands within the Eurozone are now in one price.

We increased prices in Germany to bring the BOSS price is closer to the French level, but we decided deliberately to lower the HUGO price is outside of Germany. Now it's still not the most known brand in Paris yet, because our network is not the same, but I can tell you was new focus on casualwear in HUGO, which was in France very much perceived as the suit brand, cheaper version of BOSS in a way.

This is now creating a lot of BOSS in excitement around it. So these investment into the gross margin, I think, we'll be embedded in the base as of 2019 and beyond.

And this is probably in terms of size, in terms of impact something that basically feeds itself, because then would grow on a superior value proposition. On the OpEx side, I think the most important one - I just mentioned it's not one specific IT project that we highlight, but the upgrade in the e-commerce and the omnichannel services is something that we expect to further normalized, but it's not to the same degree that we say, okay, it's one-time and that's why we didn't quantify, it's an X million investment in the OpEx that will part of the base, what we expect to achieve what we called OpEx leverage as of 2019 and beyond.

And clearly, that's part we do not know, it's not necessarily the U.S. dollar.

As Yves explained to you, it's rather the fluctuation in the RMB, and the UK pound. At some time we have to decide, okay, do we now have to increase the prices again, that's what I would call the operational hedging again - or to what degree are we still digesting these in our profitability.

But I would expect the negative impact that we have now, but we will experience for two years, 2017 and 2018, from exchange rate fluctuation will diminish in 2019 and beyond. On average, it will be neutral.

Don't give us credit, when it's in help, I mean, that's also something that's why we considering to guide you of what we already do to some degree on our earning development also ex-currency, which is a bit more difficult to do than on the top line. But we think it's also fair not to basically pocket this improvement once fluctuation will work in our favor.

And balance sheet?

Balance sheet. At the moment, we feel comfortable with our balance sheet structure.

This is one big reason, because the IFRS reporting will change with the beginning of January 2019, where we have to put on to the balance sheet, all our lease obligations, so they will be on the passive side, and the assets will be on the active side. So our balance sheet will grow tremendously as retail, as you might know.

If you look at the notes and if you see the lease obligations that we are having - we are talking about the amount of €1.4 billion that we have in terms of lease obligations. So we will have them in our books in the future due to the change, big change in IFRS statement, and we call this actually adjusted leverage and the adjusted leverage at the moment is 1.3, if you consider this, and we feel comfortable with this.

May I follow up on the answer in terms of have you got an idea at this stage in terms of what the impact from IFRS 16 will have on your EBITDA for next year once it kicks in?

I won't give at the moment the exact figures, because as you can see, we have to translate every Chinese rental contract. We will - we have this finished in the mid of the year and then we - and will disclose once we have those figures.

We have, of course, estimates. But I think every estimate I give now is wrong at the end.

I just want to be more reliable at the answer.

Philipp Frey, you have the question.

Yeah, Philipp Frey, Warburg. Just I wanted to get a bit how far or how much of the impact of the collection changes you have actually already seen in the like-for-like acceleration we saw actually from Q2 last year.

You mentioned I think something like 80 stores that already has athleisure in - at the collection offering. Can you just give us a number of how much this was at the yearend?

And what - will it be every store that will carry the offering in 2018, just some idea of these changes? And then, secondly also, I think you mentioned something like space to be flattish or in terms of sales impact with 30 stores openings.

So this is more like, what, 0-point-something or 1% like we had last year or is it more that that we - at least something like 30 store closures still to come? And then it looks a bit like really a mid-single-digit guidance for growth in retail that you basically factored in something like 4% to 5% like-for-like growth, which is more or less the nine months average that we had from Q2 to Q4.

But it doesn't seem for me to imply any specific very positive reaction from the consumer to the improved quality, would that be a fair assessment? And then an easy question, the last one, if I get you right you would say that the currencies have done recently the heavy-lifting in terms of price adjustment that you currently wouldn't see any need to change your price or particularly not lower than anywhere.

Yeah, just to start with last one, we do consider in some markets do some tactical price adjustment in the second half of 2018. And so we are monitoring the price - the fluctuation accentuate very closely.

But what is important that we do this now within the principles that we highlighted with you, it was the maximum between high and low has to be with certain ranges. That will not go back to price differences within the Eurozone.

So these principles we would adhere. So it's more on the tactical level.

That's what something we do also on a regular basis to adjust for high inflation markets. And, of course, if we see that for example if the U.S.

dollar stay at $1.24 or higher, we would, of course, not miss on opportunities on certain product heavyweights where we see a price increase opportunities in U.S. So it's always the balance between maintaining the top-line momentum and maximize the margin.

But it's not the same structural fundamental changes that we discussed. On your first question, on the inclusion, we opted for the athleisure in the - in particular in the second half of 2017 for two reasons.

One is the - that what's the strongest underlying demand for these categories in the industry, so it's not HUGO BOSS specific but we were - they were such an easy win I must say in hindsight, because they were categories we were anyway super strong in to introduce some more tech autowear jackets, strong Polos, Chinos, but also the sneaker business for - and still BOSS Green was extremely successful. In terms of price points, in terms of design and the twist was the technical component to it.

So that's why gave these numbers. And clearly, it has helped us doing the performance.

However, since it was not yet integrated in the BOSS overall design capsule, we could only do this in stores about a certain size. Now with the new collection that is coming to our stores in 2018, not only from a labeling, because it's now all with the black label.

In terms of color, this was Mark's question earlier, with the quality investments at these are now on the same quality, but even if you now look, where you see the pictures here from our former BOSS black collection. But if we put pictures next to it from our Spring/Summer 2018 casualwear or athleisure collection, it's the same setting.

It's the same mood. It's the same color story.

So what is happening, as we speak and that's something you can now test increasing often in smaller stores, a store even just with 120, 140 square meters is now capable to introduce or mix this casualwear, this athleisure or from a BOSS offering in a much smarter way. In terms of price points, in terms of - well, this is just setting better than something else.

Go for the winner. This now gives our merchandising teams now far more capabilities to offer these opportunities.

And last but not least, Yves hinted at that. Now that these overlaps, because they're now on the same price point, we are now also clearly looking into efficiencies into it.

And we say, okay, now that these overlaps in the collection become more visible, because now they're now on the same price point, same messaging. We will also going to look quite aggressively into where can we take all the economies of scale by consolidating these offers.

It's not three brands anymore. It's one.

We have been cautious not to radically cut complexity. I mean, there were some just suggesting this to us, that's why we have not discontinued BOSS Orange and BOSS Green.

We have intelligently integrated that. It was the right move, if you might point it out to accelerate like for like development.

Now, with new branding we will bring it to much more stores, smaller stores. We will not give you exact numbers because that's something we do rather on the tactical base.

But when we report back on the first quarter, you can be sure there is positive news from now the full integration of these brands in more retail space. Coming back to the more philosophical question, everything that we do, I repeat myself, has one purpose, drive sales densities.

And as we see that in certain stores, the highest share of casualwear will drive sales density. There will no opposition to do that.

And any more questions from those who have not a chance to ask a question before. Peter Steiner, please.

Peter Steiner, Bankhaus Lampe. One typical question that's not been raised so far is on current trading or actually what have you seen in the first couple of weeks and the years.

I learned that last week was a little bit cautious in their comments with regard to the current trading. But what's the state of the fashion consumer at the moment?

What are you observing maybe also still a little bit between the certain markets, you're active and as you're little bit more [indiscernible]. So second question would be for the new CFO, Mr.

Müller, on one of your slides you also mentioned that efficiency improvement is one puzzle piece for further profitable growth. Are there any certain projects you would have in mind?

Without the listed company in our sector there is some - the other thing is very common to have some kind of efficiency programs like shared services or something like that. If there is anything that would in your expertise from your past, you see that would be something also for HUGO BOSS.

I know it is not easy to answer having the CFO sitting right next to you, the former CFO. But maybe there is something you already see that could be also interesting for HUGO BOSS to drive profitability going further.

Well, you'll get the candid answer from, Yves, I'm sure. But let me just answer on the current trading, as always the quarter is not over until it's finished.

So there's still important week of trading ahead of us. But we're past the halftime bell.

So there's just three weeks now ahead of us until the end of much. So what we are quite pleased at the moment what we've seen.

So we were very confident with what we have seen with improvement that I think that was Luca's question earlier. Pickup, which was so important to me in full price business, so that's something which I still see as a brand health indicator, that this momentum continues.

And, of course, there are sometime repercussions. I'm not sure how closely you follow us.

We have continued to shorten our sales period again in the first quarter. And, of course, if you then look at on a weekly trading you will say, oh, that looks a bit reddish.

But then you have to go into it and you say, well, lastly, we are still on sale, yeah, come on, nothing in life is for free. If you want to execute like we described also in our margin progression that we will continue shorten.

We have the clean inventory situation. I mean, 18.6 is almost - we have to maintain that, of course.

But this is not a super-clean inventory situation that we have. We are not forced to be extensive on our sales.

Of course, that has some implication, especially also in e-commerce where people clearly react to sales incentives, even stronger than it's in the physical retail. But nevertheless we know that the underlying momentum is - continues to be strong.

So today, early March 2018, it's difficult to predict full year like-for-like, I mean, this is was your question. But it's better to have a plus 7 in Q4 last year and not Q2, where then this drop.

Whether we can repeat and keep the momentum throughout the year, it's still early to tell. We need to be realistic and in the end we have to look at the underlying market.

If the underlying market in our category is growing at 2% to 3%. And we are the market leader.

Guys, we need to be realistic to what degree we can outperform that. Where we see winning formulas we will reapply them.

So in short, we are very pleased with the development in the first weeks. But we have to be cautious to read even the full quarter or full year estimation from that.

So we continue to be very comfortable with the implicit like-for-like guidance, also top-line growth we have seen for the year.

So coming back to your question, first of all thank you very much. To start answering this, I think first of all, it's crucial to point out that the cost program that have been initiated in 2016 has been very effective and very good.

And we're right on track, especially touching the right issues. Secondly, I think I was hired and I'm here, and I stand and I'm committed for efficiency improvements.

And I will go for this. And I think the retail experience I have - I will, of course, challenge and try to contribute best to have efficiency improvements.

Like to be honest, in the first 100 days, I see a lot of things and I have a lot of ideas. But I think right now it's too early to call and to give you a kind of what we are really doing in specific.

But you can rely on me that we will have efficiency improvements in due course. And I think it's because if you look at the year 2018, it will be a year of investment as well.

And as the CFO, I think my task will be to get the maximum out of every euro that we are really spending say in CapEx or in OpEx. And I think this will be - this will be the efficiency driver that I will see, we see.

One last question, Volker, please.

Yeah, I would like to have a follow-up - Volker Bosse, Baader Bank - on your visibility, looking deeper into fiscal year 2018. So speaking about pre-order situation, I know you do not give the exact figures anymore, but to give - to get at least the kind of sense how does formalwear stands versus casualwear for example or HUGO versus HUGO BOSS to get at least that feeling what we talk about.

Thanks.

So we have increased our wholesale guidance for the year 2018 relative to 2017. And this is based on the visibility we have in terms of preorder, not all preorders are done yet.

But you're right. The heavy-lifting is done for winter.

It's in our books and we were pleased with the feedback. And this reflects also what we mentioned earlier, that the changes to our offering, quality investments focused on price points, I would say being customer - from a customer, we focus again on the specific demands in certain markets without going excessive on complexity is seen and recognized by our wholesale partners.

Many of them or some of them are still in rough waters. They say, well, sorry, guys, but menswear apparel, that's a category that has been flattish or negative.

So, yes, you have a higher share of one buy, but this might be still in a single account base via flat development. That's okay.

But as I said, this is my yardstick to measure the performance of our wholesale team how you're taking market share without doing funny things. So no return agreements, no margin agreements, we want to win clean in terms of market share.

And this is happening. And, yes, we are benefitting clearly with Ingo's strong focus on the smart casualwear element that our commitment, our competencies have been now demonstrated with three menswear shows, something we didn't do for almost three years.

We took a pause on it. Now, this is now clearly being recognized by fashion editors, by buyers.

That they say, well, there is not only new sheriff in town, but somebody who place a strong focus in particularly on the fusion, what we call sports tailoring, between our tailoring competencies when it comes to casualwear opportunities. This fusion will be the sweet-spot from my perspective, where we basically can take market-share on casual wear pure-plays and boring suit-only companies.

This is where we will have a strong hold on the menswear market. And this is also what I see in the numbers that we see.

There is a lot of innovative products, be it the washable suit, it's the garment-type [ph] suit, it's the capsules that we have done on the sporting side or we have some work that's coming up with the outfits that we have provided with the Amagritbia [ph] mentioned the German football squad. We see World Cup coming up.

Of course, these are super strong stories to tell, which resonates in benefits also in our wholesale business. So it will be like overall a gradual acceleration in sales momentum in wholesale.

But most importantly, as I said, will be the acceleration from the retail side of our business. So it's based on…

Driven by casualwear?

Yes.

Formalwear, casualwear - formalwear flat, casualwear up or…?

Relatively better. So as always we give you just relative data.

So the HUGO casualwear is extremely positive, but it's…

HUGO casualwear?

HUGO casualwear is probably the strongest momentum, which just demonstrates that we see a strong reaction to the - in this avant-garde sub-segment, which is growing stronger than the overall apparel segment. So it was just demonstrated our decision to give stronger focus on HUGO's, right.

On the other hand, we will clean up some of the HUGO distribution on the formalwear. This is maybe back to Mark's question earlier.

This is a temporary impact that will dampen HUGO in the course of 2018, because there will be some discontinuation of certain businesses on the HUGO side. But on the ones that we see us long-term growth progress, HUGO's casualwear offering at far more attractive price points, the sophisticated BOSS, BOSS wear offering coming from all with the integration of the wearing occasion are proving themselves to be sustainable growth factors.

Now, Womenswear has go to the next stage. Womenswear as I said has suffered slightly from the reallocation of spaces, not dramatically, but it's a healthy internal competition.

So if we - we're much aware with now the - or we don't have the - but look at the first page of your presentation. It's a joint battle.

It's the combination in our strength in Menswear and Womenswear that we're committed to. The Womenswear on the midterm I expect also return to growth, but be bit more muted in 2018 relative to menswear.

But, again, maybe we will be positively surprised here as well. I think…

Final word is yours.

Final words, so I would like to thank you for paying us the honor to visit us here onsite. But I also want to thank those of you, who followed us on the webcast or over the phone.

Thanks for your interest in HUGO BOSS and we're looking forward to see you again in our next reporting or one other capital markets activities that we have jointly in the future. Thank you very much.

Thank you.