Glossary

The (adjusted) EBITDA margin describes the ratio of EBITDA (before special items) (cf. EBITDA before special items) to sales.

With its brand world including the core brand BOSS, the brand BOSS Green, the brand BOSS Orange and the brand HUGO, HUGO BOSS targets different, clearly differentiated groups.

The aim of the cash flow statement is to create transparency regarding changes in a company’s liquidity funds. It describes in detail the type, amount and sources of the cash flows.

Daily liquidity management uses efficient cash management systems to channel liquidity surpluses of individual Group companies to other companies with financial requirements (cash pooling). This intercompany financial balancing system reduces external financial requirements and optimizes net interest expenses.

Form of retailing in which a multi-brand retailer’s selling space is divided into different product groups. For example, the suit department contains different brands of suits. In this case, the individual brands are not differentiated by means of visual merchandising. This is the opposite of shop-in-shops which offer complete collections of individual brands.

Click & Collect indicates the process of collecting online ordered pieces in bricks-and-mortar stores.

Sales trend within the Group’s own retail business (cf. Group’s own retail business) for comparable areas, i.e. not including newly opened or recently closed points of sale.

Compliance means to undertake all reasonable measures in order to ensure adherence to the laws, statutory regulations and the Company’s internal policies and their observance by Group companies.

With the concession model, the Group directly operates HUGO BOSS shop-in-shops on the sales floor of retail partners. HUGO BOSS sells product in its own name and for its own account.

Corporate Governance defines the principles and legal framework for management and monitoring at the Company. In Germany, these principles are set out in the Corporate Governance Code.

Covenants are clauses in a loan agreement or contractual obligations given by a borrower for the term of a loan agreement. They generally relate to the observation of upper and/or lower limits for certain key financial performance indicators.

Time between receiving goods as inventory and the sale of the finished product.

Time between receiving an invoice and making payment on trade payables.

Time between issuing an invoice and receiving payment on trade receivables.

In accordance with IAS 12, deferred taxes are recognized to allow for any differences in the tax base. It arises in connection with temporary differences between the consolidated financial statements and the applicable tax base so that tax expense can be presented appropriately within consolidated net profit.

A derivative is a financial instrument, whose change in value is linked to an underlying asset such as shares, bonds, currencies or commodities or to market indexes and which is settled at a future date. It does not require an initial net investment or a comparatively low initial net investment.

Directly operated stores are monobrand stores (cf. monobrand sales format) and shops operated directly by HUGO BOSS.

Diversity refers to heterogeneity and differences among employees, executives and members of the Supervisory Board of HUGO BOSS AG. For example, diversity can relate to the nationality, gender or age of specific groups of people.

The Dow Jones Sustainability Index (DJSI) is a stock index that lists the particularly sustainable companies in each industry. Listing is based on a thorough assessment of economic, environmental and social criteria for each company.

Earnings before interest and taxes. EBIT is a key business performance indicator which shows a company’s operating profit in a certain period not including taxes and interest.

EBITDA before special items refers to Earnings before interest, taxes, depreciation and amortization not including special items. EBITDA is a key performance indicator which measures operating profitability before depreciation and amortization effects from investment activity. EBITDA before special items is the most important performance indicator for the HUGO BOSS Group.

Based in Washington D.C. (United States), the FLA is a group of universities, non-government organizations and companies united in their aim of improving employment law and working conditions all around the world.

Fair value. The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Flagship stores are a particular type of directly operated stores. Because of their size and exclusivity, they have an effect beyond their respective locations on the HUGO BOSS brand image and provide sales incentives for other stores.

Articles such as jeans, T-shirts and ties which are transported flat or folded in boxes. Articles such as jackets or coats which are transported vertically on coat hangers are referred to as hanging garments.

Free cash flow is calculated by adding up the cash flow from operating activities and the cash flow from investing activities. To increase its enterprise value, HUGO BOSS focuses on maximizing free cash flow.

Shares of the HUGO BOSS AG in free float are continuously available for trading on the equity market. Shares that are held in order to pursue long-term strategic objections are not available for daily trading.

Full canvas is a special finishing type of suits, where the inlay of the jacket is not glued, but completely sewn in. This has the effect that, while being worn, it can better adapt to the shape of the body. By waiving the use of glue, the suit gains longevity, especially when worn often.

The Global Reporting Initiative (GRI) supports organizations’ and companies’ sustainability reporting. Companies can measure their economic, environmental and social performance on the basis of the principles published by the GRI.

Goodwill resulting from a business combination constitutes the excess of the aggregate of the consideration transferred and the amount of any non-controlling interest over the assets acquired and the liabilities assumed. Goodwill is recognized at cost and reviewed annually, as well as when indications of a potential impairment arise, for any evidence of impairment.

The Greenhouse Gas Protocol (GHG Protocol) is an internationally recognized tool for the quantification and management of CO₂ emissions. The GHG Protocol helps businesses account for their CO₂ emissions within different scopes.

In the Group’s own retail business, sales of HUGO BOSS products are made directly to the end customer via directly operated stores (cf. directly operated stores), outlet stores and the HUGO BOSS online store, in contrast to sales in wholesale business (cf. wholesale).

An interest rate swap is an interest derivative. Under an interest rate swap, two contractual parties agree to exchange interest payments at a specified future point in time on a specified nominal amount. They are used to hedge against interest rate risks.

IAS are international financial reporting standards which were issued from the predecessor institute of the International Accounting Standard Board (IASB), the International Accounting Standards Committee (IASC).They are still valid and will be expanded by IFRS (cf. IFRS).

IFRS are international financial reporting standards for companies that are issued by the International Accounting Standards Board (IASB). They provide worldwide transparent and comparable accounting of consolidated financial statements, and make it easier to compare publicly traded companies.

The ILO forms part of the United Nations and pursues the goal of promoting social justice as well as human and labor rights.

The management guideline ISO 26000 supports companies by providing recommendations for ethical activity. This includes sustainable development, compliance with applicable law and the observance of international ethical standards.

A license is the permission to use another’s trademark for commercial purposes in exchange for the payment of a sum of money (royalty fee). Granting of licenses enables HUGO BOSS to benefit from the expertise and potentially different distribution structure of the licensee. Products manufactured for HUGO BOSS by licensees include fragrances, eyewear, watches, children’s fashion, home textiles and writing instruments.

As part of the core brand BOSS, the Made to Measure line offers particularly high-quality bespoke suits. The Made to Measure line emphasizes the exclusivity of the core brand BOSS while focusing on the desire for individual style.

Monobrand environment are used to sell the products of only one brand at one particular point of sale.

The MSCI World Textiles, Apparel & Luxury Goods Index is defined by Morgan Stanley Capital International (MSCI) and tracks the stock price of companies active in the apparel and luxury goods industry. It is a subcategory of the MSCI World Index that tracks the development of stocks worldwide.

Multibrand environment are used to offer different brands at one point of sale.

Net financial liabilities comprise all interest-bearing financial and other liabilities less non-operating cash and cash equivalents and short-term investments.

Off-price channels are an option to sell remaining stocks at favourable conditions. At HUGO BOSS this is managed via the outlet channel.

A model for creating a seamless brand and shopping experience across multiple distribution channels. Consumers are intended to experience the brand as such rather than the individual distribution channel in which it is found. They are, so to speak, known to the brand consistently across all touch points, and can thus receive a consistently high level of service.

Coordination of online retail store activities such as order-processing, send-out of orders, return management or costumer service. HUGO BOSS will operate these processes by itself in the future.

Website of the online store that is used by the costumer. It is the opposite of the backend, which is the content management system of the online store.

Out-of-home media refers to forms of advertising which reach customers outside their homes and offices. This includes traditionally for example advertising pillars and billboards, but also advertisement on busses, telephone boxes or at airports.

A plain vanilla option is defined as a standard option in securities business without special features or product design.

All businesses where HUGO BOSS products are sold – i.e. stores (cf. store), shop-in-shops (cf. shop-in-shop) and the online store – are points of sale. They can be operated directly by the Group (cf. Group’s own retail business) or by wholesale partners (cf. wholesale).

Preorders are orders received for future deliveries. Wholesale partners place orders on a seasonal basis in the HUGO BOSS showrooms (cf. showroom) for the collection presented there. In addition, goods can be reordered irrespective of season using the HUGO BOSS replenishment (cf. replenishment).

Publications pursuant to Section 15a WpHG are notifiable securities transactions, so called directors’ dealings. Directors’ dealings are own-account transactions entered into by members of the management with HUGO BOSS AG securities. Pursuant to Section 15a WpHG, members of the management are required to disclose such transactions.

Replenishment of goods which allows HUGO BOSS to react to short-time surges in demand from trading partners.

The RSL is valid worldwide and lists chemicals and other substances that a product may not contain or may contain only to a restricted degree.

A collection is delivered and sold over a particular period of time (season).

Under IFRS 8 (cf. IFRS), a segment is a component of an entity that engages in non-derivative business activities from which it may earn revenues. The operating segment results (cf. EBITDA before special items) are regularly reviewed by a company’s responsible governing body. The HUGO BOSS Group has defined the following segments: Europe, Americas, Asia/Pacific and Licenses (cf. licenses).

A shop-in-shop is sales space in department stores designed according to the shop concept of the Group’s own retail stores and in which only HUGO BOSS products are offered.

At the showroom the collection is presented and sold to the wholesale customers (cf. wholesale).

HUGO BOSS defines special items as non-recurring expenses with no direct connection to the business activity. This includes for example expenses relating to strategic realignment or reorganization of individual business segments.

Alternative term for fashionable leisure or casual wear. This is the opposite of tailoring, i.e. garments such as suits or business shirts which are primarily worn for professional purposes or on formal occasions.

A store is a sale area with its own entrance, selling exclusively HUGO BOSS products via appropriate shop concept. Stores can be operated directly by the Group (cf. directly operated stores) or by a wholesale partner (cf. wholesale).

Garments such as suits or business shirts which are manufactured in series-production and primarily worn for professional purposes or on formal occasions.

Trade net working capital is calculated as the total of inventories and trade receivables less trade payables.

An indication of the cost of capital in terms of its weighted average based on the ratio of debt to equity. The cost of capital is calculated using a risk-free interest rate, a premium for market risk and a beta. The cost of debt is determined on the basis of the risk-free interest rate, the credit spread and the average tax rate.

In contrast to the direct sale of goods via the Group’s own retail business (cf. Group’s own retail business), sales in the wholesale business are made indirectly via retail partners’ sales space. Wholesale purchases HUGO BOSS goods either through traditional preorder (cf. preorder) business or via replenishment (cf. replenishment) and sells them on to the end customer.