AGM 2021

May 11, 2021

Slides

Ladies and gentlemen, dear shareholders, first of all, let me briefly introduce myself. My name is Herman Waldemar and I have been Chairman of the Supervisory Board of Hugo Boss AG since last year. In this capacity, I hereby open today's Annual General Meeting of HUGO BOSS AG and in accordance with the articles of association, I assume the chair. I would like to welcome you all on behalf of the advisory board and the managing board. I would like to welcome all those who are following today's AGM via the Internet. In particular, I would like to welcome all shareholders and shareholder representatives. I would also like to welcome the ladies and gentlemen of press, whom I thank for their coverage. As was the case last year, circumstances unfortunately do not allow us to welcome you to the Mesa Stuttgart as usual. As you can see from the notice of This year's Annual General Meeting, the Managing Board of Hugo Boss AG has decided with the approval of the Supervisory Board to hold this year's Annual Shareholders Meeting as a virtual Annual Shareholders Meeting and thus without the physical presence of shareholders and shareholder representatives. By holding this year's AGM as a purely virtual meeting, we would like to protect your health as well as that of all service providers and employees involved and comply with the current requirements of the authorities. With this measure, we are making use of the possibility that the legislator has granted for this year's Annual General Meeting season through the so called COVID-nineteen Act as outlined in the notice of the meeting. I would like to take the opportunity to thank you for your understanding of this measure. Due to the contact restrictions, we have significantly limited the number of people present here today. First of all, I would like to welcome Doctor. Stefan Sohne, notary public, who's taking the minutes of today's Annual General Meeting as he did last In accordance with the resolution of the Managing Board and the approval of the Supervisory Board as well as due to the current requirements, my Colleagues from the Supervisory Board have joined us virtually by way of video and audio transmission and are participating in the meeting in this way. I would also like to state that all the members of the Managing Board are present. I would like to extend a special welcome to Oliver Timm, who took over the position of Chief Sales Officer on the 1st January this year. We are pleased to welcome Oliver Thiem to the Managing Board of Hugo Boss AG. Later on, Mr. Tim will introduce himself to you. Finally, the proxies appointed by the company are also present Ladies and gentlemen, we are aware that holding an Annual General Meeting without the physical presence of Shareholders and shareholder representatives entails restrictions of shareholder rights. In particular, shareholders and the Company's management cannot engage in direct dialogue as usual during the general debate. In order to enable you to exercise your rights to an appropriate extent also during this Virtual Annual General Meeting, the company has opened up various possibilities within the scope of what is legally permissible and technically feasible. For example, you can exercise your voting rights by postal vote or via the proxies appointed by the company. Voting rights can still be exercised through the online service for the Annual General Meeting until the beginning of the voting in today's virtual AGM. I will expressly point this out to you again later so that you do have the opportunity to cast your vote in good time. Shareholders registered for the AGM were also able to address questions to the Managing Board in the run up to the Annual General Meeting. I would like to Thank you on that you have made active use of this possibility. We will deal with the questions in detail for the speeches by Mr. Muller and myself. Objections against resolutions of the Annual General Meeting can be cleared by shareholders who have exercised their voting rights until the end of the meeting via the online service for the Annual General Meeting for the record of the notary. The notary has checked the proper functioning and reliability of this system. Before we talk about the rules and regulations which apply to this meeting, I would like to give a few notes on how we will proceed. As in previous years, we will provide simultaneous translation of the entire meeting into English. You can make the corresponding setting on the website. I would also like to point out that today's event will be broadcast by 2 video streams. Firstly, you will find a freely accessible broadcast on the company's website. This broadcast will end after Yves Muller's speech. Secondly, registered shareholders have the opportunity to follow the entire Annual General Meeting through the online service. Should you as a shareholder wish to make use of this option, you must log in to the online service with your shareholder number and access password and select the live broadcast there. You will find the link to the online service on the company's website. Ladies and gentlemen, here on-site, There is also the possibility to follow the live transmission of the Annual General Meeting so that in particular, The notary present can always see that everything is working fine. We have carefully checked Everything and examined the technical precautions necessary for the live transmission together with the external service provider. We are convinced that we can conduct the virtual Annual General Meeting without any technical issues. The notary has also had the Technology explained to him in detail and has been able to see the technical precautions for himself. We therefore expect to be able to transmit the Annual General Meeting to you via the Internet without any problems. However, should technical problems occur, please check your Internet connection. If the transmission here from Metzingen If the interruption here from Metzen is interrupted, please be patient. If contrary to expectations, the connection cannot Be restored. We will provide you with further information via our website. In advance, I would also like to expressly point out that audio and video recordings of this event are not allowed. A stenographic record of the event will not be made. Let us now proceed to the formalities. Ladies and gentlemen, the convening of this meeting was published in due form and time in the Federal Gazette on the 26th March 2021. A printout from the petrol gazette is available to the notary public and will be attached by him to the minutes as an annex. According to the declaration of the Managing Board, the notifications Required by Section 125 of the German Stock Corporation Act were sent to the intermediaries, the associations of shareholders or directly to the shareholders in due form and time. The required documents have been available for inspection by the shareholders on the company's website since the day of the announcement of the convocation and during this Annual General Meeting. They are also available here in the meeting room. Ladies and gentlemen, first of all, a few explanations about the voting Voting rights at today's virtual Annual General Meeting can be exercised by postal vote or by granting power of attorney and issuing instructions to the proxies appointed by the company. You can still submit the necessary declaration via the online service until the beginning of the voting. Until that time, you can also change or revoke the declarations you have already made via the online service. At the appropriate time, I will remind you once again to exercise your voting rights. But I would like to remind you already now to cast your votes in time. It is also possible to authorize a 3rd party via the online service until the start of voting. Please note, however, that this 3rd Party can only exercise the voting right by postal vote or by authorizing and instructing the company's proxies until the beginning of the voting. For more information on how to vote, Please refer to the notice of this year's virtual annual general meeting. The proxies appointed by the company will vote in accordance with your instructions on the individual agenda items. This will be done by releasing the votes deposited in the system. The postal votes received in due Time will also be taken into account when determining the voting result. The entire process of voting and counting of The vote is supervised by the notary. The notary has already verified the compliance with Nickel Requirements. Ladies and gentlemen, before we move on to the agenda, I would like to briefly discuss the appointment of Oliver Timm as a member of the Managing Board. Oliver Timm was appointed to the Managing Board with effect from the 1st January 2021 and will be responsible for the group's own retail and wholesale divisions including e commerce, visual merchandising, retail operations, real estate management and Customer Relationship Management. I would like to thank Oliver Tim already now for the cooperation so far and would like to ask you, Oliver, to please introduce yourself briefly. Thank you very much. Dear Herman, dear shareholders, ladies and gentlemen, I would also like to extend a very warm virtual welcome to you. Since January, I have been Chief Sales Officer and thus part of the Managing Board team at HUGO a task that I'm really excited about. My name is Oliver Timm. I turned 50 last week. I live in a happy relationship and I have 2 sons. Together with my family, I live near Dusseldorf. During my professional career, I worked for over 20 years at PBH in various management positions. During this time, I played a crucial part in the successful of the American brand Tommy Hilfiger into the European market. From 2014, I was primarily responsible for the expansion of the 2 brands, Tommy Hilfiger and Kalvin Klein. As Chief Commercial Officer for the European region, my focus there was most recently on building up the important omnichannel strategy and implementing key projects in the area of digitalization. And since the beginning of this year, I have now been responsible for all global sales Topics at HUGO BOSS. Why HUGO BOSS? The answer is quite clear for me. HUGO BOSS with its 2 internationally recognized and Konig Brands, BOSS and HUGO has impressed me greatly from the very beginning of my career. Both brands have enormous potential and for great opportunities to grow significantly in future. Therefore, I'm looking forward to unlocking this potential together with my fellow board members and our employees in the coming years. My declared goal is that in future, we will put the customer even more consistently at the center of all of our actions and create 1st class brand experiences in the process. Above all, our task will be to develop a best in class omni channel strategy for HUGO BOSS that will inspire existing and new target groups alike for BOSS and HUGO. The This focus on the customer, the complete digitalization of our touch points and the database decision making are the central topics We'll make us progress in sales in the future. I'm firmly convinced that in this way, we will win Even more consumers worldwide for BOSS and HUGO and thus ensure long term sustainable growth for our company. Thank you very much. Thank you very much, Oliver. I now call on the agenda items 1 to 8. You can find the full wording in the notice convening the Annual General Meeting. The convening notice, including the proposal for the appropriation of profits contained thereon, was published in the Federal Gazette on the 26th March 2021. In addition, the convening notice This is available on the company's website. Together with the invitation letter, we have sent you a corresponding reference to the place where the Meaning notice can be retrieved. I therefore assume that the agenda is known to you. I note That no motions for additions to the agenda, counter motions or election proposals have been received. Let us now move to item 1, presentation of the adopted annual financial Statements of Hugo Boss AG and the approved consolidated financial statements as of 31st December 2020, The combined management report of Hugo Boss AG and the group for fiscal year 2020 as well as the report of the Supervisory Board, The proposal of the Managing Board for the appropriation of net retained profits for fiscal year 2020 And the explanatory report on the disclosures pursuant to Section 218-9A-one, Section 315A-one the German commercial code for fiscal year 2020. I hereby note that Did annual financial statements as of 31st December 2020 and the approved consolidated financial statements as of the 31st December 2020, the combined management report of Hugo Boss AG and the group for fiscal year 2020, The report of the Supervisory Board, the proposal for the appropriation of net retained profits and the explanatory report on the disclosures Pursuant to Section 289A1 and Section 315A1 of the German commercial code have been available on the Internet since 11th March 2021 and can also be accessed there now. The documents are also available here in the meeting as printed documents. I further state that the annual financial statements and the management report As well as the consolidated financial statements and the group management report prepared by the managing board have been audited by the auditor elected at the previous year's Annual General Meeting, Ernst and Young GMBH, Wirtschaftsprefungsgesellschaft in Stuttgart, That the audit did not give rise to any objections and that the auditing firm accordingly issued the unqualified audit certificate on the 9th March 2021. Furthermore, I note that Supervisory Board has also examined these documents for its part and that it has not objected to anything. During the Supervisory Board meeting on the 10th March 2021, the Supervisory Board approved the annual financial statements and thus adopted them in accordance with Section 172 of the German Stock Corporation Act and approved the consolidated financial statements. All documents, including the audit reports, were submitted to all of the members of the Supervisory Board in good time before the meeting. As representatives of the auditor, Mr. Wahling and Mr. Storzinger attended the relevant supervisory board meeting in order to answer all of the questions of the Supervisory Board members in detail. The Supervisory Board agreed with the Managing Board Proposal for the appropriation of the balance sheet profit. The Supervisory Board reported in writing on its activities in the 20 the financial year. The report is printed on Pages 10 to 16 of the annual report. In addition to this written report of the Supervisory Board, I would like to inform you of the following. The Supervisory Board held a total of 12 meetings in the 20 20 financial year in order to perform its duties as required. Half of the meetings took place prior to the appointment of the new Supervisory Board in May. As usual, a 2 day meeting was held in September. In addition, one resolution was passed by Circular Vote in December. During these meetings, the impact of the COVID-nineteen pandemic on business development, liquidity management and securing the financial stability of the group were regularly discussed in detail. In addition, The composition of the Managing Board and the further development and adjustment of the remuneration system for the Managing Board Were important topics in the past financial year. The supervisory board also I dealt intensively with the changeover to a new work model, the so called freedom of work model and the sustainability program. The Managing Board regularly provided the Supervisory Board with timely and detailed information in written or oral form. It also submitted to the Supervisory Board all transactions since requiring its approval. These were approved at the meetings after appropriate review. The Supervisory Board also advised the Managing Board on the management of the company and monitored the Director of Business. In the 2020 financial year, no member of the Supervisory Board attended only half or fewer of the meetings of the supervisory board and the committees to which he or she belongs. All members always participated in All of the 12 meetings of the Supervisory Board with the exception of 1 Supervisory Board member who was unable to attend one meeting but participated in the resolutions with the written vote. The efficiency of The Supervisory Board's work was also reviewed last year. During the Supervisory Board meeting in December 2020, The evaluation was presented by an external provider and the results were discussed and analyzed in detail. The supervisory board has formed a working committee, an audit committee, a nomination committee and a personnel committee as well as the mediation committee required by law. The audit committee met 4 times in the past financial year. The personnel committee met 11 times and the working committee was convened 4 times. The nomination committee met once. The mediation committee, on the other hand, was not convened in the past business year. The chairpersons of the committees reported in detail to the supervisory board on the meetings and their results. The declaration of compliance for the year 2020 required under Section 161 of the German Stock Corporation Act was discussed in detail at the Supervisory Board meeting in December 2020 and was adopted with the required majority following the meeting. With this, I would like to conclude my remarks on the report of the Supervisory Board. And on behalf of the entire Supervisory Board, I would like to express our Special thanks to all of the employees of the Hugo Boss Group. Your tireless commitment and great passion, Despite all professional and private restrictions, lay the foundation for successfully overcoming the challenges posed by the pandemic and for the long term success of Hugo Boss. Ladies and gentlemen, before I hand the floor to Yves Muller for the report of the Managing Board, I would like to thank you also on behalf of the entire supervisory board for the good cooperation with you, Yves and the entire managing board. Yves, you have the floor. Thank you very much, Herman. Dear shareholders, ladies and gentlemen, I'm delighted That you're attending the Virtual Annual Shareholders Meeting 2021 of Hugo Boss AG. Let me extend a warm welcome to all of you And let me also welcome you on behalf of my fellow members of the Managing Board and all HUGO BOSS employees. Due to the current circumstances, the Annual Shareholders Meeting is again taking place in a virtual format this year. This is because your health and safety are and always have been our number one priority. I do hope however That it will be possible to welcome you in person next year. Now what can you expect from my presentation? As usual, I'm going to start by guiding you through our operational and financial performance in the 2020 fiscal year and elaborate in detail on the implications of the COVID-nineteen pandemic on our business. Then I'm going to give you an overview of our most important strategic initiatives, whose implementation will be decisive for the further recovery of our global business. Finally, I'm going to give you some guidance on our expectations for the current fiscal year 2021. But first of all, let's take a look at the past fiscal year. Without a doubt, 2020 It was an exceptional and challenging year for all of us. The COVID-nineteen pandemic has demonstrated how vulnerable life can be. It has been and will continue to be a major test for all of us. I'm very proud on how our almost 14,000 employees worldwide Fiscal 2020, but also laid important foundations for the future success of our company. I'd like to highlight another point That is especially important to me. Throughout the past year, we also fully lived up to the corporate responsibility of HUGO BOSS at all times. The health and well-being of our employees, our customers, our business partners and our shareholders are always our priority. It was also particularly important to us that we make a social contribution, especially in these difficult times. For example, during the first peak of the pandemic, we temporarily switched parts of our production lines to make face masks and PPE, which we donated to public institutions. The COVID-nineteen pandemic had an Unprecedented impact on our industry and consequently on the business of Hugo Boss last year. Securing our financial stability and flexibility was therefore on top of our agenda. In fact, we started early on exploring every opportunity to sustainably secure cash flow. I'm getting to the detail in just a few moments. We also placed particular emphasis on the gradual recovery of our global business following the first lockdowns in spring 2020. Our main aim was to fully exploit all sales opportunities looking at what the brands, the regions and sales could do. Our efforts were particularly successful in the Q3, bolstered by the temporary Slow down of the pandemic during the summer months. Our business recovered significantly in many markets during this period. Last but not least, we did not neglect our core business. On the contrary, we went on pushing ahead with our strategic initiatives So that we're able to hit the ground running this year. In particular, we succeeded in further increasing the desirability of our 2 brands, BOSS And Hugo. And in aligning our rich product range even better with the needs and wishes of our customers, I'm going to explain the strategic progress we made last year in detail. But let me first of all take closer look at the financial Development in 2020. Thanks to our healthy balance sheet structure, we were well prepared to overcome the financial Challenges associated with the pandemic. Furthermore, over the course of the year, we successfully implemented the comprehensive measures to secure cash flow that we presented almost 1 year ago. Our goal was to conserve liquid funds of about €600,000,000 In the end, we managed to exceed this target by a good €150,000,000 Firstly, we saved significant costs throughout the full year totaling around €200,000,000 Our original plan was to save at least €150,000,000 This achievement mainly Flex a significant reduction in selling and distribution expenses, particularly in rental and personnel costs. Short time work was key, but also to a certain extent lower marketing expenses. Secondly, we postponed non business critical investments to a later date. Capital expenditure for the full year ultimately totaled €80,000,000 well below our initial budget of around €150,000,000 Our investment activity over the past year once again focused on the modernization and further optimization of our own retail business as well as the further digitalization of our business model. Thirdly, we always Very forward looking approach when managing our inventories during the pandemic. We quickly adapted our own production to the lower demand and we're able to carry a greater share of products over to the next season. Above all, however, We significantly reduced merchandise inflow in close consultation with our suppliers The world over. Overall, these efforts meant that we secured cash flow of around €300,000,000 exceeding our original target by around €100,000,000 At the end of 2020, our inventories were only We're therefore only slightly above the prior year level. And finally, as already communicated last year's Annual Shareholders Meeting, We suspended the dividend payment for 2019 with the exception of the legal minimum dividend of €0.04 per share. The retention of the profit for the year has strengthened our financial flexibility by almost €190,000,000 and made an absolutely crucial contribution to securing the financial stability of our company during these difficult times. At this point, I'd like to once again thank you, dear shareholders, for your understanding and support of this important measure. Our relentless focus on securing liquidity paid off. Over the past year, despite the negative implications The pandemic, we generated positive free cash flow of €164,000,000 We also maintained our financial flexibility at all times. This is reflected in our revolving syndicated loan of €633,000,000 Only €105,000,000 of this had been utilized by the end of December. To date we have not utilized any of the additional credit lines totaling €275,000,000 That way, secured during the year. Excluding the effect of IFRS 16, our net debt at the end of year was €141,000,000 and was only slightly higher than the previous year. Let's now take a closer look at the operational development of our business. Our brick and mortar retail business was heavily impacted by the lockdown and the associated temporary store closures, especially in the second and fourth quarters. In the second quarter, only half of our global retail points of sale were open. In particular in Europe and North America, almost all stores and shop in shops were closed for several weeks During the first peak of the pandemic, a significant increase in store reopenings between July September then led to an open rate of around 95% in the 3rd quarter. However, this rate fell to 80 5% in the final quarter following the renewed lockdown towards the end of the year. This mainly affected key European markets such as Germany, France and the United Kingdom. On average, around 1 5th of our global store network It was temporarily closed in the 2020 fiscal year. But this was not all. The far reaching restrictions on public life Such as bans on private functions and cultural events as well as working from home also significantly impacted our business. In addition, persisting international travel restrictions led to very slow business with international tourists which is normally very important to us. All of this ultimately contributed To currency adjusted sales decline, up 30% of our own retail business last year. The decline in the wholesale business was even higher at minus 34%. Cautious ordering behavior of our wholesale partners in the wake of the pandemic Led to lower deliveries, especially in Europe and the United States. While our brick and mortar business struggled with difficult circumstances, Our own online business developed very positively with the revenues up by almost 50% in the full year. With 2021 representing our 3rd consecutive year of double digit online growth, Our own online business was able to cross the €200,000,000 mark for the first time in our company's history. Lisentherin propelled the share of our own online business to 11% of group sales, more than twice as much As it was back in 2019, the successful expansion of our own online store hugoboss.com Also contributed to this in 2020, we not only tapped into markets such as Canada and Mexico, expanding our Online presence in the Americas, an important region for us, but also concluded a strategic partnership with a leading provider of Comprehensive Online Business Solutions. As a part of this partnership, we successfully connected 30 additional online markets to hugoboss.com last year. Poland and Portugal, Hong Kong, Japan and Australia. But that's not all. This year, we will tap into numerous other markets As making our online store accessible globally remains our express objective. We want our customers to be able to access the rich product range of BOSS and HUGO at all times. This brings me to our geographies. Europe, by far our largest region and home to almost 600 own retail points of sale, Europe was particularly impacted by the pandemic related lockdowns, especially in the second and fourth quarters. Currency adjusted sales for the year declined by 31%. All key markets including Germany, the U. K. And France posted lowtomidoubledigitsales declines. Markets in Southern Europe such as Italy and Spain were even more affected reflecting a higher dependency on international tourism as well as relatively long store closures. In the Americas where we recorded a currency adjusted sales decline of 42%, the pandemic And the associated temporary store closures had a significant impact on business development, especially in the second quarter. In addition, civil unrest and demonstrations were aid on business in important U. S. Market in the important U. S. Market towards the middle of the year. However, since the end of the extensive lockdown last spring, The region has been showing steady business recovery. Although our business continued to suffer in the second half of the year From the lack of international tourism in major cities such as New York, Los Angeles and San Francisco and from the lower level of commuter traffic, Local demand, however, increased considerably once again. To further drive the recovery of our business in the U. S, We are consistently working on brand perception and optimizing our product range in the market. Both are still strongly linked to formalwear. We are confident, however, that our casualwear business in the U. S. Market will also experience a strong push In 2021, not least, thanks to our most recent collaborations with the NBA and Russell Athletic. I'm getting to this in a few minutes. In the Asia Pacific region, sales for the year were down 20% As many markets suffered noticeably from the implications of the pandemic. This makes the development of our business in the Mainland China in Mainland China, which is strategically important for HUGO BOSS. All the more pleasing following the lockdown in the Q1, we saw Strong momentum in our business in Mainland China, which already returned to double digit growth during the Q2, Supported by strong growth in traffic and conversion rates in our stores as well as a very strong online business, We even managed to achieve a currency adjusted sales increase of 5% for the full year. To conclude my remarks on the Top line, let's take a quick look at the sales performance by brand. I cannot be surprised to hear that casual wear Proved significantly more robust than formalwear for both BOSS and HUGO due to the aforementioned conditions. Without a doubt, the pandemic further accelerated the global trend of recent years towards a more casual clothing style. Our both brands, BOSS and HUGO recorded currency adjusted sales declines of 32% 27% last year. It is particularly encouraging that Hugu Casualwear managed to return to growth in the final quarter. Overall traditional suits now account for a smaller share of sales, down to significantly less than 20%. This means that we are already generating more than 80% of our global sales from modern casual wear and smart tailoring products which are taking formal clothing to a new and modern level. You can therefore rest assured that we will work tirelessly over the coming years to continue tapping the many opportunities of casualization across all brands, Genders and Wearing Occasions. In this respect, it's no surprise that all of our product and marketing initiatives in 2021 We'll be geared towards this. Against the backdrop of the pandemic, group sales for the full year ultimately Decreased by 31% currency adjusted and amounted to €1,950,000,000 Our gross profit margin totaled 61% corresponding to a decline of 400 basis points reflecting negative inventory valuation effects as well as elevated markdown activity in the wake of the pandemic. As I mentioned at the beginning, maintaining our tight cost management Over the years, therefore, all the more important, thanks to our quick and decisive action, we reduced underlying operating expenses by 14% and therefore managed to compensate to a certain extent for the impact of the decline in sales and of lower gross profit margin and earnings. Adjusted EBIT consequently totaled minus €126,000,000 While We still recorded an operating loss in the first half of the year. We did return to profit in the second half of the year despite significant ongoing sales declines. In view of the significant impact of the pandemic on sales, EBITDA and free cash flow and given The continuing high level of uncertainty at this point in time, we believe we have no option other than to propose to you again today That the company will only pay the legal minimum dividend of €0.04 per share for the 2020 fiscal year as well. It is understandable that such a decision, which is by no means an easy one for us once again this year, will be met with Disappointment. However, given the extraordinary circumstances, we consider that this is imperative as it is essential For our financial stability and flexibility in what is still very much a challenging period. But if we Take this opportunity to clearly point out that HUGO BOSS will generate a significantly positive free cash flow in the future, Thanks to its strong business model and on the basis of an expected general economic recovery. This in turn will be fundamental for returning to an attractive dividend policy in future and letting you, dear shareholders, participate And the long term success of HUGO BOSS. In addition to the dividend, we would of course also like to Create value for our shareholders through rising share prices. As you all know, the past year on the stock market was strongly marked by the COVID-nineteen pandemic. The implications of the pandemic also weighed heavily on the performance of the Hugo Boss share. It was not until the end of the year that our share was able to offset at least part of the price losses it suffered over the course of the year. This recovery was supported by our encouraging financial results for the Q3 and further progress along our Strategic growth drivers. Ultimately the share closed the year 2020 at a price of around €27 compared With the prior year's closing price, this is a decline of 37%. Therefore, it is all the more encouraging that May, our share has gained considerable ground since the beginning of January. It has not only performed noticeably better than DAX And Amdex, these indices, but also outperformed the shares of most of our direct competitors. Ladies and gentlemen, that concludes my operational financial review of 2020. Let's move on and take a look at our strategic priorities. Pushing ahead with the further execution of these strategic priorities is crucially important for ensuring The long term success of Hugoboss, it is expected above all to provide our business with a strong boost throughout the rest of the year. Our particular aim is to resolutely exploit all sales opportunities globally, while at the same time further increasing The desirability of our brands, BOSS and HUGO. Let's start with Mainland China, where we have successfully carried the strong momentum of last year into 2021. For example, around Chinese New Year, we recorded very strong sell through for the BOSS Capsule collection that was specially designed for this occasion. This is true positive of our high capabilities To successfully execute these kinds of regional events, we will pursue this strategy to increase our brand There's some relevance among Chinese consumers, particularly among the younger target groups in the future. In order to continue our strong double digit growth trajectory In Mainland China and Best Meat growing local demand, we will be scaling up some of our existing stores this year and opening new stores at selected locations. Shanghai is a prime example of this as we are planning on opening a new flagship Store there in the second half of the year. We will also continue to drive our online growth in China, primarily by capitalizing on the strong momentum on leading local online platforms. At the same time, we're confident That our global online business would continue its double digit growth trajectory. We adhere To our stated target of increasing our online sales to more than €400,000,000 by 2022. And I'm pleased to inform you today That we're well on track to achieving this target after having surpassed the €200,000,000 mark in 20 'twenty, we are very confident that we will cross the €300,000,000 mark in the course of this year. The further expansion of our global Online business remains at the top of our agenda. Our online flagship hugoboss dotcom has been rolled out to 12 additional markets since the beginning of the year including South Korea, Russia and the United Arab Emirates thereby Increasing the global reach of hugoboss.com to 59 markets globally. Other important markets will follow soon Because ultimately it's all about making the rich product range of BOSS and HUGO available to our customers globally and in doing so fully exploit Huge potential of hugoboss.com. Ultimately, The digitalization of our business model offers enormous opportunities along the entire value chain, extending far beyond sales. We're increasingly exploiting the potential of digitalization, which means that also last year we managed to make our operational processes even more efficient Digital product development plays a key role in this. It helps us significantly Reduced development times and therefore enables us to fulfill the wishes of our customers even better. Today the development process is completed digital for around 50% of our products. An important milestone in this regard is the casual collection, Casualwear collection which is the first to have been developed completely digitally in only 8 weeks. This collection is spectacular proof of how we will be able to respond much faster to market trends. From a brand perspective, the main priority of all our initiatives is to further drive the desirability of BOSS and HUGO. Above all, our exclusive Collaborations with brands and ambassadors are increasingly paying off. These are clearly geared towards significantly increasing our brand relevance Among younger customer groups, as we have had to go without many in person events During the pandemic, we are putting a stronger focus on social media more than ever before. Speaking of social media, throughout 2020, we witnessed significant improvements in our social media metrics On the most important platforms, 1st and foremost on Instagram. I'm particularly pleased that both Bos and HILGO have Not only seen a further rise in the number of followers but also clear uplift in community engagement as reflected in the average number of likes per post having more than doubled year on year. TikTok As well, we launched very successfully last year. BOSS is enjoying strong momentum as reflected by high community engagement between the young users of this network and our brand. While this has proved positive for the success of our evolved digital marketing approach and clearly demonstrates But our strong focus on inspiring and the relevant content tailored to the needs of young target groups is paying off More and more. Let's now take a look at the exciting cooperation projects Bas and Hugo have lined up. Firstly, we initiated a partnership with Hollywood actor Chris Hemsworth. The 37 year old Australian was recently named 1st Global Brand Ambassador for Voss Menswear. He will be the face of major global campaigns. In addition to his career as an actor, Chris is also a dedicated environmentalist. In this context, he will star In an upcoming global campaign dedicated to our BOSS responsible collection further increasing global awareness of our sustainable product offering. The very successful partnership between BOSS and the reigning world champion of boxing, Anthony Joshua, Also continues to gather pace following our launch of the new co designed BOSS capsule collection in February. Anthony Joshua is currently the global face of our Father's Day campaign and is attracting considerable attention, Especially in Europe. Yes. At the end of last year, BOSS Womenswear teamed up with the German fashion influencer and entrepreneur Caro Dauer for an exclusive women's wear capsule. Many items of the BOSS curated by Caro Dauer collection which remains true to the elegant aesthetics of the brand while simultaneously combining the individual style of both parties We sold out on hugoboss.com shortly after launch. And our BOSS stores, the limited collection was also very well received in particular by our younger customers. In addition to influential personalities and ambassadors, we are increasingly focusing I ship with well known brands as part of our marketing activities. The collection which was recently launched by BOSS and the American sportswear brand Russell Athletics is a prime example of such a partnership. This capsule collection which has been available since the end of March includes not only apparel but shoes and accessories and has a clear focus on Street Star. The designs combine the strengths of both partners, the precise tailoring of BOSS with Russell Athletics unique sportswear aesthetic, further strengthening the position of BOSS in the important casualwear segment. At the end of March, an exclusive digital event took place on hugoboss.com and across Relevant social media channels presented the collection to the public for the first time together with a number of I profile influences including the American models Bella Hadid and Ashley Graham as well as the German MBA Let me make this clear. Our collaboration with Russell Athletic, which we are continuing this year with an additional collection, It's another major opportunity to sustainably increase the relevance of our casual wear both globally and in the important U. S. Market. After its highly successful launch, Boss Meets Russell Athletic Is on the way to becoming one of the best selling capsule collections in the history of BOSS. Already in February, we successfully launched the 1st Boss Meats NBA capsule in the United States. We designed this collection which also draws clear inspiration from the popular street style trend together with the professional American basketball league exclusively for the U. S. Market. This was very well received by our young customers in particular. To date, this is the most successful capsule that we have ever launched in the United States. The response has been very Positive especially on social media with many young customers introduced to BOSS for the first time. In addition to the variety of partnerships and collaborations that have gained significance in the recent years, We will place particular emphasis on regularly spotlighting our Boston Hugo collections on a global level. The Classic Fashion Show It's far from extinct. We are just offering a new and modern interpretation. Consequently, one of my personal highlights of 2020 With the BOSS Fashion Show in Milan and the brand event that took place simultaneously in Shanghai. Our springsummer 20 '21 collection was celebrated at the Milan Fashion Week as part of a modern interpreted runway show which fans of our brand across the world follows live on hugoboss.com, Instagram and for the first time on TikTok. Simultaneously, a special event for the Chinese market was held in Shanghai And was broadcast live on regional online platforms such as WeChat and T Mail. The event culminated with the unveiling of an exclusive capsule collection for our Chinese customers. Moving over to HUGO, which As you know appeals to customers who tend to be more expressive and younger compared to BOSS. Only recently, HUGO launched a new music platform called Hugo Lauda, touching on today's most important issues ranging from diversity to equality and sustainability. The platform features 12 talented musicians who speak up for social change making monthly appearances as ambassadors for our HUGO collection. Simultaneously, HUGO continues its successful partnership with its global ambassador, Liam Payne. This latest capsule collection co created by the British musician also addresses the growing of our customers in terms of sustainability. By sourcing sustainable cotton, we are supporting the cotton made in Africa initiative, which has been standing up for many years to protect the environment and improve living conditions with regard to the cultivation harvesting of Speaking of sustainability, our strong commitment to sustainability is becoming increasingly visible In our collections, not only did we successfully launch the first vegan Boss suit last year, we also launched a traceable wool collection, enabling our customers to seamlessly track the entire supply chain. In this way, We keep to our promise to produce high quality products in a responsible manner. A key feature in this regard is our range of particularly sustainable products, our responsible styles and we are consistently increasing the number of these products. They meet defined and Particularly comprehensive sustainability criteria from raw material to processing, packaging and transport. For the upcoming fallwinter season 2021, we're already increasing the percentage of products made from sustainable materials at both BOSS and HUGO to around 25%. By 2025, This number is expected to rise to at least 30% of the product range, twice as much as in 2020. In order to make our contribution To achieving the goals of the Paris Climate Agreement, we've also set ourselves ambitious targets for reducing Our CO2 emissions across the entire value chain. Having already signed the fashion industry charter For Climate Action in 2018, we join other companies in our commitment to the vision of a climate neutral fashion industry By 2,050, to this end we are determined to reducing our CO2 emissions along the entire value chain by 30% until 2,030. In this context, we have set ourselves reduction targets for different types of emissions that were validated with a positive assessment from the Science Based Targets initiative last year. These goals guide us in developing our company wide climate protection measures. We're already working towards Achieving these important targets with a number of measures and initiatives at our own sites and across the supply chain. At our own production sites, For example, we are investing in energy efficient technologies, consistently modernizing technical facilities and increasing the share of renewable energies. As a result, we've already taken the first important steps towards Improved climate protection with our CO2 emissions once more a sustainable reduction in 2020. I'm absolutely convinced that we are on the right track in this regard and particularly pleased to see That our many initiatives around sustainability and the progress we're making is also being rewarded externally. For the 4th consecutive year, We were included in the renowned Dow Jones Sustainability Index World in 2020. Among our achievements I was ranked best in class in the categories of Brand Management, Product Stewardship, Environment, Reporting and social reporting. This makes us one of the top 3 most sustainable companies in the global Apparel Industry. At the same time, we were included in the DJSI Europe for the first time. Rest assured, Alongside our firm commitment to sustainability, we will ensure that we best meet growing customers' expectations in the years to come, While at the same time putting all our efforts in creating added value for the environment and society. And diversity also is extremely important to us. Diversity, in other words, the guarantee of equal opportunities And non discriminatory working environment is a core element of our corporate culture. In order to reflect the importance of this issue In our organizational structure, we recently created a new position, Global Head of Diversity and Inclusion and successfully filled this role a few weeks ago. We aim to constantly advance issues such as gender equality and diversity within the company and to ensure that all our employees are free to express their personality and talent when working here. Ladies and gentlemen, allow me to conclude by providing a few more details around the current fiscal year. Although it is difficult to predict how the pandemic will develop for the foreseeable future, we're relentlessly working on the further recovery of our global business. This also becomes visible in our figures for the Q1, which we published on May 5. In the 1st 3 months of 2021, we successfully continued our gradual business recovery. We were able to limit the sales 9% to 8% currency adjusted, recording sales of €497,000,000 While the negative implications of COVID-nineteen Continued to weigh on key European markets. Momentum further accelerated along our strategic growth drivers online, Mainland China and Casualwear. Our online business was up 72%, while sales in Mainland China almost doubled and our Casualwear business also reduced the growth in the Q1. Moreover sequential improvements In our U. S. Business as well as a robust performance of our wholesale business contributed Positively to the overall sales development in the Q1, in the light of the persisting negative implications of COVID-nineteen in particular on key European markets, we continued our tight cost management during the 1st 3 months of 2021. Once again, we put particularly strong emphasis on reducing selling and distribution expenses. The savings achieved more than We've been compensated for the reduction in sales and decline in the gross profit margin. Consequently, we were able to record a positive EBIT. Overall EBIT amounted to plus €1,000,000 compared to minus €14,000,000 in the prior year period. All of this Gives us confidence for the rest of the year. However, as a result of the ongoing short term uncertainty Related to extended lockdowns in key European markets, we are currently not able to provide a precise outlook for fiscal year 2021. At the same time, we remain confident that the global retail environment We'll continue to gradually improve and that our global business will recover noticeably in the further course of 2021. In this context, the anticipated further progress in global vaccination campaigns and the gradual lifting of lockdowns and Objections of Public Life are expected to fuel consumer sentiment, especially in the second half of the At the same time, we expect our strategic growth drivers, China and online, To continue recording significant double digit growth in addition to various brand and product initiatives of BOSS and HUGO will ensure That we continue to inspire our customers globally with our collections in the coming months and that our Casualwear business in particular We'll continue to experience a strong boost as we have succeeded in doing for example through our 2 collaborations with Russell Athletic and the MBA. Overall, we're therefore forecasting a significant increase in group sales and EBIT for the full year 2021. Ladies and gentlemen, allow me to summarize. 2020 was undoubtedly a challenging year for HUGO BOSS. Our swift and decisive actions have allowed us To successfully overcome the enormous challenges of the pandemic and safeguard the financial stability of our company. We've also made significant progress in implementing our strategic initiatives, especially in the important online business in the growth market of China and in the casualization of our business model. In doing so, we have set the course For securing the long term success of Hugo Boss and thus creating sustainable value increases for you, Dear shareholders, I'm firmly convinced that our numerous brand and product initiatives will allow us to continue to inspire our customers globally for BOSS and HUGO also in 2021 and that our business will recover noticeably in the further course of the year. In this context, I'm personally delighted that our Managing Board will be complete next month with Oliver Term and the imminent arrival of Daniel Graeder as our new Chief Executive Officer and that we will together turn the page on a new chapter for HUGO BOSS. We'll set out the details of our strategic ambitions to you and the Capital Market at an Investor Day during the second half of 2021. I would like to take this opportunity to thank our approximately 14,000 employees worldwide. Even though the pandemic has led to many changes, more than ever, I can feel the close connection of our workforce with our company And it's 2 strong brands, BOSS and YUGO. This fills me with great pride and is also the key To our success in the future. Dear shareholders, I'd like to thank you very much for your attention and for your support in the past year. Some of your submitted questions in the run up to this Annual Shareholders Meeting and we are now going to respond to them in detail. Thank you very much Yves for this comprehensive presentation. I wish the management board lots of success for the execution. Ladies and gentlemen, with this we will now end as announced the Freely available broadcast of the ASM on the Internet. As of now, the rest of the ASM will only be accessible to registered shareholders by the online service. I would like To thank all the others who followed us on the Internet, I thank you very much for being interested in our