Contents. To our shareholders. Consolidated interim financial statements. Consolidated interim management Report. Further information

Transcription

1 FIRST HALF YEAR REPORT JANUARY JUNE 2013

2 Contents 2 Contents 1 To our shareholders Letter to Shareholders p. 4 Key Figures p. 6 HUGO BOSS on the Capital Market p. 7 2 Consolidated interim management Report Group Sales and Results of Operations p. 10 General Economic Situation p. 10 Sector Performance p. 11 Sales Performance p. 12 Earnings Development p. 16 Profit Development of the Business Segments p. 19 Net Assets and Financial Position p. 23 Balance Sheet Structure and Key Balance Sheet Ratios p. 23 Net Assets p. 24 Financial Position p. 26 Capital Expenditure p. 27 Report on Risks and Opportunities p. 29 Subsequent Events and Outlook p. 30 Summary on Earnings, Net Assets and Financial Position p Consolidated interim financial statements Consolidated Income Statement p. 36 Statement of Comprehensive Income p. 37 Consolidated Balance Sheet p. 38 Statements of Changes in Consolidated Equity p. 39 Consolidated Statement of Cash Flows p. 40 Condensed Notes to the Consolidated Interim Financial Statements p. 41 Responsibility Statement p Further information Forward-Looking Statements p. 56 Financial Calendar 2013 p. 56 Contacts p. 56

3 TO OUR SHAREHOLDERS 1

4 Letter to Shareholders 4 LETTER TO SHAREHOLDERS Dear Shareholders, Ladies and Gentlemen, In a challenging economic environment, HUGO BOSS reported moderate sales and earnings growth in the first half of The considerable improvement in the second quarter compensated for the results of the first quarter, which were impacted in particular by postponed orders in our wholesale business. In light of the growth prospects for the second half of the year, this means that HUGO BOSS is well on the way to achieving its targets for the year as a whole. In Europe, we achieved moderate sales growth in the first half of the year despite the current economic situation. Like the industry in general, however, we have found ourselves faced with muted consumer spending. By contrast, the Americas continued to show a good growth dynamic. We also improved our performance in Asia over the course of the year, recording a substantial increase in demand in Hong Kong in particular. Over the last recent months, we have initiated important strategic measures that will determine not only the course of business for the rest of the year, but also the medium-term future of HUGO BOSS. In the American market, we have concluded an agreement with Saks for the takeover of 37 HUGO BOSS shopin-shops. Saks is one of our ten most important customers worldwide and is the first partner in the U.S. to give us responsibility for the independent management of its sales spaces. We are confident that the optimization of our product range, well-trained staff and efficient inventory management will lead to a substantial improvement in the sales productivity of these shop-in-shops. A few weeks ago, we were also able to announce the appointment of the renowned fashion designer Jason Wu to the position of Artistic Director for BOSS Womenswear. With the success of his own label, Wu has already demonstrated his design capabilities, his natural instinct for how best to present a brand and his talent for successfully realizing excellent designs in a commercial environment. Our industrial and organizational strength will provide an excellent platform for him to employ these qualities successfully for HUGO BOSS. We will present the first womenswear collection designed by Jason Wu to the fashion world at the New York Fashion Week early next year. Both menswear and womenswear will make a contribution to the Group's planned profitable growth in We still expect to record high single-digit growth in currency-neutral sales. A strong improvement in our own retail activities will offset the weaker than expected performance of our wholesale business, which will be further impacted by the aforementioned takeovers. In the same way as sales, we expect our operating result to see high single-digit growth.

5 Letter to Shareholders 5 Prospects remain positive beyond this year as well. Many of the strategic measures we are initiating this year and the investments we are making in the strength of our brands as well as our presentation at the point of sale will be key elements for the mid- and long-term development of HUGO BOSS. Sincerely yours, Claus-Dietrich Lahrs CEO and Chairman of the Managing Board

6 Key Figures 6 KEY FIGURES Jan. June 2013 Jan. June Change in % 2nd Quarter nd Quarter 2012 Change in % Sales 1, , Sales by segments Europe incl, Middle East and Africa Americas Asia/Pacific Royalties Sales by distribution channel Wholesale (7) Group's own retail business Royalties Results of operations Gross profit Gross profit margin in % bp bp EBITDA EBITDA before special items Adjusted EBITDA margin in % bp bp EBIT (1) Net income attributable to equity holders of the parent company Net assets and liability structure as of June 30 Trade net working capital (12) Non-current assets Equity Equity ratio in % Total assets 1, , Financial position and dividend Free cash flow (13) (10) Net financial liabilities (as of June 30) (22) Capital expenditure > Depreciation/amortization Total leverage 3 (as of Jun 30) (28) Dividend payment Additional key figures Employees (as of June 30) 11,765 11,190 5 Personnel expenses Number of Group's own retail stores Shares (in EUR) Earnings per share Ordinary share Last share price (as of June 30) Ordinary share Number of shares (as of June 30) Ordinary share 70,400,000 70,400,000 70,400,000 70,400,000 1 Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in the Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting Policies). 2 EBITDA before special items/sales. 3 Net financial liabilities/ebitda before special items and expenses for the stock appreciation program of the last 12 months.

7 HUGO BOSS on the Capital Market 7 HUGO BOSS ON THE CAPITAL MARKET After a positive start to the year, the German stock indices continued to rise as the year progressed, reaching new historic highs by mid-may. Despite the subsequent correction, the German stock markets posted increases in the first half year. The HUGO BOSS AG share also posted gains in the first half of the year SHARE PRICE PERFORMANCE 2013 (Index: December 31, 2012 = 100) January February March April May June HUGO BOSS Ordinary Share DAX MDAX Global monetary policy remains main factor driving stock markets in second quarter The positive performance of the German stock markets at the beginning of the year initially continued in the second quarter, with the DAX and MDAX rising to new all-time highs by mid-may. This development was supported by robust U.S. economic data, the new start in Italian politics, and the continued expansive monetary policy of the European and Japanese central banks. However, the stock markets repeatedly came under pressure as the quarter progressed, partly due to speculation regarding a reduction in bond purchases by the U.S. Fed and disappointing economic data from China. Positive performance of HUGO BOSS shares in first half of year After a positive performance in the first quarter, the price of the HUGO BOSS ordinary share continued to rise until early May. The confirmation of the outlook for the year 2013 during the first-quarter results publication was received positively by the capital market, and the share price reached a new all-time high of EUR The subsequent placement of 7 million ordinary shares by the majority shareholder Permira, the distribution of the dividend for fiscal year 2012 and significant uncertainties on the global stock markets led to a decline in the share price over the remainder of the second quarter. Thanks to renewed price increases as of the end of June, the HUGO BOSS ordinary share ended the first half of the year up 6% as against the end of 2012 at EUR The DAX and, in particular, the MDAX rose in value in the first half of 2013 as well. Overall, the DAX and the MDAX climbed by 5% and 15% respectively between January and June. The shares of companies in the fashion and luxury goods industry also posted gains on average in the first half of 2013.

8 HUGO BOSS on the Capital Market 8 The MSCI World Textile, Apparel & Luxury Goods Index, which tracks the performance of companies operating in the area of apparel and luxury goods, rose by 9% in the first half of the year. The performance of HUGO BOSS AG shares in the first half of the year was therefore similar to or slightly weaker than the German benchmark indices and fashion and luxury goods industry shares respectively. Weighting of HUGO BOSS share in MDAX increases At the end of June 2013, the HUGO BOSS ordinary share was ranked 12th in the MDAX by Deutsche Börse on the basis of free float-adjusted market capitalization (June 2012: 12th). In terms of trading volume, the HUGO BOSS ordinary share ranked fourth (June 2012: 11th). Thus, at the end of June, the weighting of the HUGO BOSS ordinary share in the MDAX was 2.6% (June 2012: 1.9%). An average of 171,283 ordinary shares were traded per day in the first half of The average number of ordinary and preferred shares traded per day in the first half of 2012 was 157,565. Since the consolidation of the share classes on June 18, 2012, only ordinary shares have been traded. Voting right notifications in accordance with section 21 WpHG and section 25a WpHG In accordance with section 21 of the Securities Trading Act (WpHG), shareholders are required to report the level of their shareholdings if they exceed or fall below certain thresholds. The reporting thresholds are 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%. The Company did not receive any such notifications in the reporting period from January 1 to June 30, On January 24, 2013, HUGO BOSS AG was informed by Mediobanca Banca di Credito Finanziario S.p.A., Milan, Italy, in accordance with section 25a WpHG that it no longer holds any financial or other instruments that could enable it to acquire voting rights. The Company published this notification verbatim on its website in the Investor Relations section under News and Releases. Free float of HUGO BOSS shares increases After the placement of 7 million HUGO BOSS ordinary shares by the majority shareholder Permira on May 3, 2013, the shareholder structure of HUGO BOSS AG as of June 30, 2013 breaks down as follows: 55.62% of the shares are held by Permira Holdings Limited through Red & Black Holding GmbH (March 31, 2013: 65.56%) and 1.97% of the capital is held by HUGO BOSS AG as treasury shares (March 31, 2013: 1.97%). The remaining 42.41% of shares are in free float (March 31, 2013: 32.47%). Reportable securities transaction in accordance with section 15a WpHG One reportable transaction in shares of the Company was reported to the Company by the Managing Board and the Supervisory Board in accordance with section 15a WpHG in the reporting period from January 1 to June 30, In total, members of the Managing Board and the Supervisory Board hold less than 1% of the shares issued by HUGO BOSS AG. Reportable securities transactions are published on the Group's website in the Investor Relations section under News and Releases. Dividend of EUR 3.12 distributed The Annual Shareholders Meeting of HUGO BOSS AG on May 16, 2013 approved the proposal of the Managing Board and the Supervisory Board to distribute a dividend of EUR 3.12 per ordinary share for fiscal year 2012 (2011: EUR 2.88). This corresponds to a payout ratio of 70% of net income attributable to the equity holders of the parent company in 2012 (2011: 70%). The dividend was paid out to the shareholders on the day following the Annual Shareholders Meeting, i.e. on May 17, 2013.

9 CONSOLIDATED INTERIM MANAGEMENT REPORT 2

10 Group Sales and Results of Operations 10 GROUP SALES AND RESULTS OF OPERATIONS GENERAL ECONOMIC SITUATION Continued weak development of global economy in first half of 2013 Following the perceptible slowdown in the global economy at the end of last year, economic activity continued to develop weakly in the first half of While economic output in the U.S. posted moderate growth despite implemented budget cuts in the first half of the year, growth rates in China in the current year remained behind expectations. In Europe, economic activity is still depressed by the debt crisis and the persistently weak export environment. The economic conditions for the HUGO BOSS Group therefore remain challenging. European economy still in recession The European economy still was not able to emerge from recession in the first half of the year The region faced difficulties such as rising unemployment and the implementation of government austerity measures, particularly in the Southern European countries. Growth was also negatively impacted by subdued private consumption in many places, the continued low level of global demand for exports, and weak industrial production. Growth of the German economy in the first half of the year was also slightly weaker than originally expected. Compared to the rest of the euro zone, however, the German economy performed better than average. Strong data from the construction industry and positive consumer sentiment supported this development. American economy grows moderately The U.S. economy continued the moderate growth of the first quarter in the second quarter, too. However, the expansion was not as significant overall as originally expected, partly due to lower government spending and stagnating industrial production. By contrast, there were positive economic signals in the past months from the employment market, the real estate sector and retail, which benefited from continued high propensity to consume. Despite an also fairly robust private consumption in Latin America, the economy in this region suffered from the global economic slowdown in the first half of the year, resulting in disappointing, relatively weak economic data. The core markets of Brazil and Argentina were particularly heavily impacted. Patchy economic growth in Asia In Asia, economic activity was mixed in the first half of 2013, with the economic development deteriorating over the course of the second quarter. Relatively sound domestic demand was offset by still muted export activity. In China, the anticipated upturn in the economy did not materialize in the first half of 2013, with surprisingly weak growth in industrial production standing out in particular. Despite the introduction of programs to stimulate the economy, the unstable economic environment at home and abroad depressed not only private consumption but also import and, in particular, export activities. In Japan, by contrast, the economy has been recovering in the first months of This development was aided by the very expansive monetary policy of the Japanese central bank and a considerable improvement in the business climate and consumer confidence. By contrast, Australian economic growth slowed in the first half of the year due to weaker demand at home and abroad.

11 Group Sales and Results of Operations 11 SECTOR PERFORMANCE Premium and luxury goods industry outperforms economy as a whole The positive growth trend in the global premium and luxury goods industry continued in the current fiscal year despite challenging economic conditions and a weak consumer environment in many key markets. Overall, the sector posted stronger growth than the economy as a whole. The consumer environment remained difficult in Europe on account of the persistent concern over the future of the euro zone. Robust growth in Eastern European markets partly compensated for continued weaker performances in Western and most noticeably Southern Europe. In the metropolitan regions of Western and Southern Europe especially, demand from tourists also supported market growth. In virtually all the region's markets, however, the long winter had a negative impact on demand for clothing. The industry expanded in America thanks to continuing positive consumer sentiment in the relevant market segment. This growth was supported by stable growth rates at U.S. department stores and increasing demand from tourists in major American cities. Demand for premium and luxury goods remained subdued in Asia in the first half of Although the consumer environment in China improved slightly over the course of the year, with Hong Kong and Macao performing somewhat better on average than the Chinese mainland, the weaker general economic development and unclear economic prospects resulted in significantly lower growth rates than those seen in previous years. By contrast, surprisingly positive data were recorded in Japan, where the sector benefited from increased consumer confidence and a shift towards domestic consumption due to exchange rate effects.

12 Group Sales and Results of Operations 12 SALES PERFORMANCE SALES DEVELOPMENT HUGO BOSS increased Group sales by 4% after adjustment for currency effects HUGO BOSS generated Group sales of EUR 1,125 million in the first six months of fiscal year 2013, meaning that sales in Group currency were up 3% on the previous year's level (previous year: EUR 1,092 million). Currency fluctuations had a slight negative effect on Group sales performance in the reporting period. Thus, HUGO BOSS posted a 4% year-on-year sales increase in local currencies. A decline in the wholesale channel was more than compensated by double-digit sales growth in the Group's own retail business. Takeovers of shop-in-shop units previously operated by wholesale partners resulted in a shift in sales from the wholesale business towards the Group's own retail business. SALES BY REGION Jan. June 2013 in % of sales Jan. June 2012 in % of sales Change in % Currencyadjusted change in % Europe Americas Asia/Pacific Royalties TOTAL 1, , Including Middle East and Africa. All regions contributed to positive sales performance Sales in Europe including the Middle East and Africa were up 2% in reporting currency in the first half of the year, amounting to EUR 668 million (previous year: EUR 652 million). This corresponds to a 3% increase in local currencies. Key factor was the sales growth in Western Europe. In the Americas, sales in reporting currency climbed by 6% year-on-year to EUR 263 million (previous year: EUR 248 million). Sales growth of 7% was generated in local currencies in the first half of the year. Continuing positive consumer sentiment in the relevant market segment and demand from tourists in American metropolises supported this dynamic performance. After the first six months of fiscal year 2013, sales in Asia/Pacific were 1% higher than the previous year's level in reporting currency at EUR 169 million (previous year: EUR 168 million). In local currencies, sales rose by 4% as against the same period of the previous year. Despite continuing restraint among consumers, there was a slight improvement in the consumer environment and growing demand on the Chinese mainland, in Hong Kong and in Macao. This development was supported by increasing domestic demand in Japan.

13 Group Sales and Results of Operations 13 SALES BY DISTRIBUTION CHANNEL Jan. June 2013 in % of sales Jan. June 2012 in % of sales Change in % Currenyadjusted change in % Wholesale (7) (7) Group's own retail business Directly operated stores Outlet Online Royalties TOTAL 1, , Sales development in the wholesale channel dominated by changes to delivery cycles, difficult market environment and takeovers In the first half of 2013, sales in the wholesale channel in both reporting currency and in local currencies were down 7% on the level of the previous year and totaled EUR 513 million (previous year: EUR 551 million). Changes to delivery cycles and a difficult market environment led to a decline in sales in the wholesale channel. The takeover of shop-in-shops previously operated by franchisees, particularly in Spain, Switzerland and China, also caused a shift in sales from the wholesale business towards the Group's own retail business. Replenishment, with which HUGO BOSS can react to short-term surges in demand from trading partners, posted a positive performance in the past six months. The share of the wholesale channel in Group sales decreased from 50% in the same period of the previous year to 46% in the reporting period. In the Group's own retail business, double-digit growth rates were achieved in the first six months of fiscal year 2013, as in previous years. The expansion of the store network driven by the opening and takeover of new stores in particular led to an increase in sales of 14% in reporting currency to EUR 588 million in the first half of the year (previous year: EUR 517 million). This is equivalent to a 15% increase in sales after adjustment for currency effects. Sales from the Group's own retail business amounted to 52% of total sales in the reporting period (previous year: 47%). Retail comp store sales remained at the previous year s level in Group currency and increased by 2% in local currencies.

14 Group Sales and Results of Operations 14 SALES BY RETAIL FORMAT Sales from directly operated stores (DOS) increased by 12% to EUR 387 million (previous year: EUR 345 million) and by 14% after adjustment for currency effects in the first half of fiscal year This includes sales of own freestanding stores as well as sales generated with concession partners. In the concession model, the Group independently operates HUGO BOSS shop-in-shop units on the sales floor of the retail partner. Optimization of product arrangement, an increase in service quality and the acceptance of responsibility for the floor's replenishment constitute important leverage for raising selling space productivity. With sales growth of 15% in Group currency to EUR 172 million, outlet stores also contributed to the positive development of sales in the retail channel in the first half of fiscal year 2013 (previous year: EUR 150 million). Adjusted for currency effects, this corresponds to a rise of 16%. Sales generated by the Group's own online stores increased in the past six months by 30% in both reporting currency and in local currencies to EUR 28 million (previous year: EUR 22 million). NUMBER OF GROUP S OWN RETAIL STORES Expansion focused on Europe in first half of 2013 The total number of the Group's own retail stores increased by 61 in net terms to 901 in the first six months of fiscal year 2013 (December 31, 2012: 840). The Group's own retail network was strengthened in particular by the takeover of 42 stores previously operated by wholesale partners. This allowed the concession model in Spain, Great Britain and the U.S. to be expanded, among other things. In addition, the Group continued its expansion strategy with 33 organic new store openings in the first half of the year. This was countered by 14 closings in the same period DEVELOPMENT OF GROUP S OWN RETAIL STORES December 31, 2012 Europe 1 Americas Asia/Pacific Closings June 30, Including Middle East and Africa. In Europe in particular, the retail network was further strengthened by the takeover of 35 shop-in-shop units from wholesale partners as well as through 23 new openings. Here, the Group expanded its presence in the Spanish and British markets in particular. Taking into account five closings, there was a net rise in the number of retail stores in Europe of 53 to currently 522 (December 31, 2012: 469). As a result of the takeover of six shop-in-shop units from a wholesale partner and three new store openings in the U.S., the number of directly operated stores in the Americas rose to 156 as of the end of the first six months of fiscal year 2013 (December 31, 2012: 147).

15 Group Sales and Results of Operations 15 Seven new stores as well as one store which was taken over were added to the store network in Asia/Pacific in the first six months of fiscal year Taking account of the closure of nine locations in this region, the number of directly operated stores stood at 223 at the end of the first half of 2013 (December 31, 2012: 224). ROYALTY SALES Royalty business developed positively in the first half of Products manufactured by partners include fragrances, eyewear, watches, children's fashion, mobile accessories and home textiles. Sales with external licensees increased by 5% as against the previous year to EUR 25 million (previous year: EUR 24 million). Substantial growth was generated in sales with licensees for eyewear and fragrances in particular. SALES BY BRAND In the first half of fiscal year 2013, the core brand BOSS achieved a 3% rise in sales in comparison to the same period of the previous year. The BOSS Green brand also increased its sales by 4%. Sales of the BOSS Orange brand were down 4% on the previous year s level, whereas the HUGO brand posted a sales growth of 11% year-on-year. Menswear sales were up 3% in the reporting period as compared to the same period of the previous year and totaled EUR 1,006 million (previous year: EUR 977 million). This corresponds to an 89% share of total sales (previous year: 89%). Womenswear sales climbed by 3% to EUR 119 million (previous year: EUR 115 million). As in the previous year, womenswear accounted for 11% of total sales.

16 Group Sales and Results of Operations 16 EARNINGS DEVELOPMENT INCOME STATEMENT Jan. June 2013 in % of sales Jan. June in % of sales Change in % Sales 1, , Cost of sales (385.8) (34.3) (397.8) (36.4) 3 Direct selling expenses (22.6) (2.0) (21.4) (2.0) (6) Gross profit Selling and distribution expenses (415.6) (36.9) (380.1) (34.8) (9) Administration costs and other operating income/expenses (114.3) (10.2) (104.1) (9.5) (10) Operating result (EBIT) (1) Net interest income/expenses (5.9) (0.5) (7.4) (0.7) 21 Other financial items (5.4) (0.5) (0.8) (0.1) Financial result (11.3) (1.0) (8.2) (0.8) (38) Earnings before taxes (3) Income taxes (40.4) (3.6) (43.3) (4.0) 7 Net income (1) Attributable to: Equity holders of the parent company Non-controlling interests (54) Net income (1) Earnings per share (in EUR) 2 Ordinary share EBITDA Special items EBITDA before special items Income tax rate in % Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in the Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting Policies). 2 Basic and diluted earnings per share.

17 Group Sales and Results of Operations 17 NOTES TO THE INCOME STATEMENT Gross profit margin rose to 63.7% In the first six months of fiscal year 2013, the gross profit margin increased by 210 basis points to 63.7% (previous year: 61.6%). This positive development is mainly due to the expansion of the Group's own retail business and positive effects from inventory valuation. Higher discounts in the wholesale business and in the Group's own retail business partly offset this effect. At the end of the first half of 2013, gross profit was up 7% year-on-year at EUR 717 million (previous year: EUR 673 million). Expansion of Group's own retail business caused higher distribution expenses At EUR 416 million, selling and distribution expenses were up 9% on the previous year's figure of EUR 380 million in the first six months of fiscal year In relation to sales, selling and distribution expenses rose from 35% to 37%. As a result of the global expansion in the Group's own retail business in particular, distribution expenses increased by EUR 43 million in the first half of 2013 and were therefore up 18% on the previous year's level. This includes additional expenses for a net 61 new locations that were opened or taken over in the reporting period as part of the global expansion of this distribution channel. Marketing expenses decreased by 8% year-on-year, partly as a consequence of a modified distribution of the marketing budget over the year. In relation to sales, logistics expenses remained constant at 5% as against the same period of the previous year. Allowances for doubtful accounts and bad debt losses played a minor role in the 2013 reporting period due to the ongoing systematic receivables management. Administrative costs in relation to sales unchanged year-on-year At EUR 114 million, administrative expenses and the balance of other operating income and expenses were up 10% on the previous year's level in the first six months of fiscal year 2013 (previous year: EUR 104 million). In relation to sales, administrative expenses and the balance of other operating income and expenses amounted to 10%, as in the previous year. As a result of the increased personnel expenses in particular, general administrative expenses rose by 7% and EUR 5 million in absolute terms to EUR 78 million (previous year: EUR 73 million). Special items totaling EUR 4 million (previous year: EUR 0 million) related to reorganization measures in Europe. The internal performance indicator EBITDA before special items increased by 4% compared to the same period of the previous year to EUR 234 million (previous year: EUR 226 million). The adjusted EBITDA margin increased slightly to 20.8% (previous year: 20.7%). Depreciation and amortization increased by 16% as compared to the previous year's level to EUR 43 million (previous year: EUR 37 million). This was due to greater investment intensity for the Group's own retail business. EBIT amounted to EUR 187 million in the first half of fiscal year 2013, down 1% on the previous year's level (previous year: EUR 189 million). The improvement in the gross profit margin did not fully offset the higher operating expenses in distribution and marketing as well as in administration. As the total of net interest expenses and other net financial expenses, the financial result rose by EUR 3 million to EUR 11 million in the first six months of fiscal year 2013 (previous year: EUR 8 million). Net interest expenses declined by 21% to EUR 6 million (previous year: EUR 7 million) as a result of reduced debt and lower interest rate level. The other financial items amounted to a net expense of EUR 5 million, representing an increase of EUR 4 million as against the previous year s net expense of EUR 1 million due to negative currency effects. Earnings before taxes thus fell by 3% to EUR 176 million (previous year: EUR 181 million). At 23%, the tax rate was one percentage point below the previous year's level of 24%. Regionally different profit shares of the domestic and foreign subsidiaries of the HUGO BOSS Group, together with a slight decrease in corporate tax rates on an international level, led to a reduction in the Group tax rate.

18 Group Sales and Results of Operations 18 Net income slightly below previous year's level At EUR 135 million, net income in the first half of fiscal year 2013 was down 1% on the previous year's figure of EUR 137 million. At EUR 134 million, the net income attributable to equity holders of the parent company was on previous year's level. Non-controlling interests fell to EUR 1 million in the same period (previous year: EUR 3 million) and primarily related to the 40% share held by the Rainbow Group in the "joint venture" companies in China. As in the same period of the previous year, earnings per share amounted to EUR 1.94 (previous year: EUR 1.94).

19 Profit Development of the Business Segments 19 PROFIT DEVELOPMENT OF THE BUSINESS SEGMENTS EUROPE 02/02 SALES DEVELOPMENT EUROPE 02/03 PROFIT DEVELOPMENT EUROPE Jan.-June 2012 Jan.-June 2013 Jan.-June 2012 Jan.-June % + 1 % Sales in Europe including the Middle East and Africa amounted to EUR 668 million in the first six months of fiscal year 2013 (previous year: EUR 652 million) and is up 2% year-on-year in reporting currency and 3% after adjustment for currency effects. Significant sales growth in the Group s own retail business offsets decline in the wholesale business At EUR 192 million, sales in Germany were 4% higher than the previous year's level (previous year: EUR 185 million). The positive development in the Group s own retail business was a key factor in this improvement. The wholesale business marked a slight increase. In France and Great Britain, double-digit sales growth in the Group's own retail business compensated for the drop in sales generated with wholesale partners in the first half of the year. Sales in France were up 8% on the previous year's level at EUR 79 million (previous year: EUR 73 million). In Great Britain, sales rose by 6% year-on-year in reporting currency to EUR 92 million (previous year: EUR 87 million). This corresponds to a 9% increase in local currency. Due to a difficult market environment in the Netherlands, sales in the Benelux countries were down 7% on the level of the same period of the previous year at EUR 72 million (previous year: EUR 77 million). Sales in the Group's own retail business in Europe increased by 21% in the past six months to EUR 329 million (previous year: EUR 271 million). This corresponds to a rise of 22% in local currencies. Over the same period, sales with wholesale customers declined by 11% in reporting currency and local currencies to EUR 339 million (previous year: EUR 381 million). This development was influenced significantly by the challenging market environment and the change in delivery cycles in the preorder business. In addition, takeovers of shop-in-shop units previously operated by wholesale partners, particularly in Spain and Switzerland, resulted in a shift in sales from the wholesale business towards the Group's own retail business. Segment profit up on previous year due to rise in gross profit margin The segment profit of EUR 240 million in Europe was 1% above the previous year's level of EUR 236 million. Higher selling and marketing expenses were more than offset by the rise in the gross profit margin. The adjusted EBITDA margin declined slightly to 35.8% (previous year: 36.2%).

20 Profit Development of the Business Segments 20 AMERICAS 02/04 SALES DEVELOPMENT AMERICAS 02/05 PROFIT DEVELOPMENT AMERICAS Jan.-June 2012 Jan.-June 2013 Jan.-June 2012 Jan.-June % - 1 % In the Americas, sales in reporting currency climbed by 6% year-on-year to EUR 263 million (previous year: EUR 248 million). Sales growth of 7% was generated in local currencies in the first half of the year. This dynamic performance was supported by a consistently positive consumer sentiment in the relevant market segment. U.S. still Group's largest single market In the U.S., sales rose by 6% in reporting currency and were again higher than the previous year's figure at EUR 206 million (previous year: EUR 194 million). Sales growth of 7% was achieved in local currency. Increases in retail comp store sales and targeted new store openings resulted in double-digit sales growth in the Group's own retail business in the U.S. in the past six months. Growth was also posted in the wholesale channel. In Canada, sales were down 2% on the level for the same period of the previous year at EUR 31 million (previous year: EUR 32 million). Despite a challenging market environment, especially in the wholesale channel, sales climbed by 1% year-on-year after adjustment for currency effects. In spite of a relatively weak economy in Central and South America, sales rose by 17% in reporting currency to EUR 26 million (previous year: EUR 22 million). A sales increase of 15% was generated in local currencies as well. Sales in the Group's own retail business increased by 13% in reporting currency in the first half of the year to EUR 125 million (previous year: EUR 111 million). Adjusted for currency effects, this corresponds to a rise of 14%. In the wholesale channel, sales of EUR 138 million were generated in the same period (previous year: EUR 137 million). Sales therefore increased by 1% in Group currency and 2% in local currencies. Segment profit down 1% year-on-year The segment profit of EUR 63 million in the Americas region was 1% below the previous year's level of EUR 64 million. Negative effects from higher sales deductions in wholesale and the Group's own retail business and disproportional rises in fixed costs, particularly due to the expansion of the Group's own retail business, caused a deterioration in segment profit. After the first six months of fiscal year 2013, the adjusted EBITDA margin in this region was therefore 24.1% (previous year: 25.9%).

21 Profit Development of the Business Segments 21 ASIA/PACIFIC 02/06 SALES DEVELOPMENT ASIA/PACIFIC 02/07 PROFIT DEVELOPMENT ASIA/PACIFIC Jan.-June 2012 Jan.-June 2013 Jan.-June 2012 Jan.-June % + 3 % After the first six months of fiscal year 2013, sales in Asia/Pacific were up 1% on the previous year's level in reporting currency at EUR 169 million (previous year: EUR 168 million). In local currencies, sales rose by 4% as against the same period of the previous year. Sales increases despite persistently challenging market environment Sales in China rose in both reporting currency and local currencies by 5% to EUR 106 million (previous year: EUR 101 million). The slight improvement in the consumer environment in Hong Kong in particular and the positive sales performance in the wholesale channel compensated the still challenging market environment on the Chinese mainland. In Oceania, sales matched the previous year s level at EUR 26 million (previous year: EUR 26 million). Despite the persistently challenging market environment in the first half of the year, sales climbed by 3% after adjustment for currency effects. At EUR 20 million, sales in Japan were down 14% on the previous year's level (previous year: EUR 23 million). This development was largely influenced by the depreciation of the Japanese yen against the euro. After adjustment for currency effects, there was a year-on-year increase in sales of 5%. In reporting currency, sales in Asia/Pacific in the Group's own retail business declined by 1% to EUR 133 million (previous year: EUR 134 million). A sales increase of 2% was generated in local currencies. By contrast, sales with wholesale customers were up 7% on the previous year's level in Group currency at EUR 36 million (previous year: EUR 34 million). After adjustment for currency effects, sales rose by 8% year-on-year. Segment profit up year-on-year due to improvement in gross profit margin The segment profit of EUR 64 million in the Asia/Pacific region was 3% higher than the previous year's level of EUR 62 million. In addition to an improvement in the gross profit margin, this was also attributable to a moderate increase in fixed costs. At 37.6%, the adjusted EBITDA margin in this region was 100 basis points above the previous year's level of 36.6%.

22 Profit Development of the Business Segments 22 ROYALTIES 02/08 SALES DEVELOPMENT ROYALTIES 02/09 PROFIT DEVELOPMENT ROYALTIES Jan.-June 2012 Jan.-June 2013 Jan.-June 2012 Jan.-June % - 2 % Royalty business continued positive development Royalty business continued to perform well in the first half of Products manufactured by partners include fragrances, eyewear, watches, children's fashion, mobile accessories and home textiles. Sales with external licensees increased by 5% as against the previous year to EUR 25 million (previous year: EUR 24 million). Substantial growth was generated in sales with licensees for eyewear and fragrances in particular. At EUR 21 million, the royalties segment profit was 2% lower than the previous year's level (previous year: EUR 21 million). The result for the first half of the 2012 fiscal year included other income generated by the sale of the trademark rights to the Baldessarini fragrance.

23 Net Assets and Financial Position 23 Net Assets and Financial Position Balance Sheet Structure and Key Balance sheet Ratios Deconsolidation of HUGO BOSS Distributionszentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG Control over HUGO BOSS Distributionszentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG has ended as a result of contractual arrangements. As there is no longer significant influence on the company, it was deconsolidated as of June 30, 2013 and has since been reported as an investment under other non-current financial assets. This resulted in particular in effects on the development of non-current assets and financial liabilities. Condensed Notes to the Consolidated Interim Financial Statements, Note 5 // Scope of Consolidation Certain amounts shown here do not correspond to the figures reported in previous years and reflect adjustments made. Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting Policies In the first half of fiscal year 2013, total assets increased by 7% to EUR 1,446 million (June 30, 2012: EUR 1,356 million). In particular, this change was driven by a rise in property, plant and equipment as a result of the continued expansion of the Group s own retail business and the extension of logistics capacity. 02/10 Balance sheet structure - Assets (in %) June 30, 2012 June 30, 2013 Property, plant and equipment and intangible assets Inventories Trade receivables 16 Other assets 11 Cash and cash equivalents TOTAL Assets 1, ,445.9 The share of current assets decreased only slightly year-on-year to 60% (June 30, 2012: 63%). Accordingly, the share of non-current assets rose from 37% in the previous year to 40% as of June 30, 2013.

24 Net Assets and Financial Position 24 02/11 Balance sheet structure - Equity and Liabilities (in %) June 30, 2012 June 30, 2013 Equity Provisions and deferred tax liabilities 10 Trade payables Other liabilities 10 Financial liabilities TOTAL Equity and liabilities 1, ,445.9 The structure of equity and liabilities also changed as against the previous year. The share of financial liabilities decreased from 29% in the previous year to 23% at the end of the reporting period. This development is mainly attributable to a lower utilization of the credit line. By contrast, the equity ratio rose to 39% as against the previous year (June 30, 2012: 35%). Net Assets Under assets, non-current assets climbed by 10% to EUR 477 million as of the end of the first half of the year (June 30, 2012: EUR 433 million). Investments in the further expansion and modernization of the Group's own retail business as well as the extension of logistics capacity contributed to this increase. This was offset by a disposal of non-current assets in the amount of EUR 57 million from the deconsolidation of Distributionszentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG. Decrease in inventories essentially driven by optimization of inventory management As of the end of the reporting period, inventories were down 9% at EUR 446 million (June 30, 2012: EUR 492 million). Adjusted for currency effects, inventories fell by 7% year-on-year. Effective measures to optimize inventory management were the key drivers for this development. Increase in trade receivables driven by the expansion of the concession model Trade receivables rose by 6% year-on-year to EUR 226 million (June 30, 2012: EUR 213 million). Adjusted for currency effects, this marks an increase of 9%. The key driver for this development was the higher level of trade receivables from concession partners due to the expansion of the concession model. Other assets increased by 26% year-on-year to EUR 196 million (June 30, 2012: EUR 156 million). This increase is largely attributable to the rise in deferred tax assets, increased advance payments to suppliers and tax authorities, and higher rent deposits for directly operated stores.

25 Net Assets and Financial Position 25 Cash and cash equivalents amounted to EUR 101 million as of the end of the reporting period (June 30, 2012: EUR 63 million). This rise is mainly due to the development of the cash flow from operating activities, which had a positive effect on the Group's liquidity situation. Under equity and liabilities, provisions and deferred tax liabilities were up 12% on the previous year's level at EUR 155 million (June 30, 2012: EUR 139 million). This includes provisions for pensions and other personnel expenses of EUR 88 million (June 30, 2012: EUR 69 million). It also includes other provisions totaling EUR 46 million (June 30, 2012: EUR 46 million) and deferred tax liabilities of EUR 21 million (June 30, 2012: EUR 24 million). Trade payables were up 12% year-on-year at EUR 248 million (June 30, 2012: EUR 222 million). This corresponds to an increase of 13% after adjustment for currency effects. As of the end of the reporting period, the total of current and non-current financial liabilities decreased by 13% to EUR 338 million (June 30, 2012: EUR 389 million). The EUR 40 million decline in non-current financial liabilities is due in particular to effects from the deconsolidation of HUGO BOSS Distributionszentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG. In addition to the utilized tranche of the syndicated loan, financial liabilities include negative fair values of interest and currency hedges with a total amount of EUR 4 million (June 30, 2012: EUR 18 million). Other liabilities increased by 3% year-on-year to EUR 139 million (June 30, 2012: EUR 135 million). The key driver for this development was the increase in income tax liabilities and accrued liabilities for overtime and vacation entitlements. Trade net working capital as percentage of sales below prior-year level Trade net working capital is the HUGO BOSS Group's key performance indicator for measuring the efficient use of capital. The only three components involved in calculating this figure are the operating figures for inventories, trade receivables and trade payables. As against the previous year, trade net working capital decreased by 12% to EUR 424 million (June 30, 2012: EUR 483 million). The rise in trade receivables was more than offset by the decline in inventories and the rise in trade payables. The decrease is in particular due to effective measures to reduce inventories. At 19.0%, the twelve-month moving average of trade net working capital as a percentage of sales was below the previous year s level (previous year: 20.8%).

26 Net Assets and Financial Position 26 Financial Position 02/12 Free Cash flow 02/13 Net financial liabilities Jan.-June 2012 Jan.-June 2013 June 30, 2012 June 30, % - 22 % Statement of cash flows The statement of cash flows is presented in accordance with IAS 7. The cash and cash equivalents shown here correspond to the item of the same name in the consolidated balance sheet. Cash flow from operating activities significantly up year-on-year At EUR 127 million, the cash flow from operating activities was considerably higher than the previous year's level of EUR 90 million. The change in the collection cycle and the measures taken to optimize inventories resulted in a year-on-year decline in cash outflow from net working capital to EUR 26 million (previous year: EUR 64 million). A key factor in this was the cash inflow generated by the change in trade payables and other liabilities of EUR 12 million (previous year: cash outflow of EUR 12 million). At EUR 84 million, cash outflow from investing activities was higher than the previous year s level of EUR 41 million. Key factors for this development were investments in the expansion and modernization of the Group's own retail business and in the extension of logistics capacity. Free cash flow down on previous year due to increased investments The free cash flow, calculated from the cash inflow from operating activities and the cash outflow from investing activities, fell by EUR 7 million in the first half of fiscal year 2013 to EUR 43 million (previous year: EUR 50 million). Cash outflow from financing activities amounted to a total of EUR 197 million in the first half of 2013 (previous year: EUR 188 million). This was essentially due to the payment of the dividend of EUR 215 million. The cash outflow from the repayment of the fixed tranche of the replaced syndicated loan less the associated transaction costs was offset by the utilization of the fixed tranche in the amount of EUR 100 million and of the revolving tranche in the amount of EUR 165 million as part of the new syndicated loan. Cash and cash equivalents amounted to EUR 101 million as of the end of the reporting period (June 30, 2012: EUR 63 million).

27 Net Assets and Financial Position 27 Net financial liabilities Net financial liabilities are the total of all financial liabilities due to banks less cash and cash equivalents. Significant improvement in net financial liabilities in the first half of 2013 At EUR 335 million, financial liabilities due to banks were below the previous year's level (June 30, 2012: EUR 364 million). This development was largely attributable to lower borrowing requirements due to the deconsolidation of HUGO BOSS Distributionszentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG. Cash and cash equivalents as liquidity reserve increased from EUR 63 million in the previous year to EUR 101 million as of June 30. In February 2013, HUGO BOSS AG tasked a group of banks with setting up a syndicated loan amounting to EUR 450 million, which was signed in March The new syndicated loan is divided into a fixed tranche of EUR 100 million and a revolving tranche of EUR 350 million. The new syndicated loan has a five-year term. The syndicated loan agreement was concluded with an international banking syndicate consisting of 14 banks. The lead managers are UniCredit Bank AG, Landesbank Baden-Württemberg and DZ Bank AG Deutsche Zentrale-Genossenschaftsbank. The new syndicated loan replaces the existing syndicated loan amounting to EUR 450 million, which was repaid prematurely and replaced on March 27. It includes standard covenants requiring compliance with certain performance indicators. As of June 30, 2013, the fixed tranche of EUR 100 million and EUR 165 million of the revolving tranche of the new syndicated loan was drawn. Net financial liabilities therefore improved by EUR 67 million from EUR 301 million to EUR 234 million as of June 30, Capital Expenditure Significant increase in capital expenditure in first half of 2013 In the first half of fiscal year 2013, capital expenditure by the HUGO BOSS Group on property, plant and equipment and intangible assets amounted to EUR 82 million, a significant increase on the previous year's level (previous year: EUR 41 million). In the first six months of fiscal year 2013, the global expansion and modernization of the Group's own retail business accounted for 44% of total capital expenditure (previous year: 64%). A total of EUR 36 million (previous year: EUR 26 million) was invested in the global expansion and modernization. Investments in new stores amounted to EUR 20 million (previous year: EUR 15 million). In Europe, new stores were opened at Heathrow Airport in London and in Midsummer Place Shopping Center in Milton Keynes, among other places, and a flagship store was opened on Leidsestraat in Amsterdam. In the Americas, HUGO BOSS added attractive new locations in San Diego and Boston. A store on King Street in Perth was also added to the store portfolio in Asia/Pacific. In addition, a further EUR 16 million was invested in the renovation and modernization of existing retail locations (previous year: EUR 11 million). Investments in the Americas should be highlighted in particular. A large part of the total is attributable to the renovation of the retail stores at Columbus Circle in New York, in Dadeland Mall in Miami, in Cherry Creek Shopping Center in Denver, and in the Mall of Millenia in Orlando.

28 Net Assets and Financial Position 28 Administrative investments amounted to EUR 11 million and therefore increased by EUR 1 million as against the previous year s figure (previous year: EUR 10 million). This figure includes capital expenditure of EUR 4 million for an additional administrative building at the Metzingen location. Investments in IT infrastructure and other administrative investments contributed EUR 7 million to the investment volume. Investments in the production, logistics and distribution structure and for research and development amounted to EUR 35 million (previous year: EUR 5 million). EUR 28 million of this related to HUGO BOSS Distributions- zentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG, which was deconsolidated as of June 30, 2013.

29 Report on Risks and Opportunities 29 REPORT ON RISKS AND OPPORTUNITIES HUGO BOSS has a comprehensive risk management system enabling Management to identify and analyse opportunities and risks as well as to take appropriate measures at an early stage. The risk situation has not changed materially compared to the reporting year A detailed overview of risks and opportunities can be found in the annual report All statements included therein regarding risks and opportunities continue to be valid.

30 Subsequent Events and Outlook 30 SUBSEQUENT EVENTS AND OUTLOOK HUGO BOSS is forecasting continuing profitable growth in The implementation of the medium-term growth strategy will help the Group increase sales and earnings to new record levels. Sales and operating profit (EBITDA before special items) are each expected to grow at a high single-digit rate. SUBSEQUENT EVENTS No reportable events Between the end of the first half of 2013 and the publication of this report, there were no material macroeconomic, socio-political, sector-related or company-specific changes that the management expects to have a significant influence on the results of operations, net assets, and financial position of the Group. OUTLOOK The following report sets out the HUGO BOSS management's forecasts for the future business performance and describes the anticipated development of the main economic and sector conditions. It reflects the current knowledge of the management at the time the report was prepared, while also aware that the actual development may differ considerably from these forecasts, either positively or negatively, due to the occurrence of risks and opportunities as described in the report on risks and opportunities in the 2012 annual report. Other than the statutory publication requirements, the HUGO BOSS Group does not assume any obligation to update the statements contained in this report. As an international fashion company, the performance of HUGO BOSS is influenced by global economic conditions and industry-specific developments. It is therefore very important for the Group to identify macroeconomic and industry-specific trends at an early stage so that it can react to them in good time with suitable measures. Moderate growth in global economy anticipated in 2013 The global economic outlook for 2013 has deteriorated slightly in view of the recent relatively weak economic data, particularly from emerging economies. The extent to which the recurring setbacks in the fight against the euro debt crisis can be stemmed and economic growth can be stabilized so that the central banks can gradually reduce their very expansive monetary policy will be of great significance to the development of the global economy. Overall, experts anticipate moderate global economic growth in Economic environment in the euro zone expected to remain difficult The economic prospects for 2013 in Europe have improved slightly as against the previous year, though a slight downturn in economic performance is still anticipated for 2013 as a whole. The European economy is expected to return to low positive growth rates in the second half of the year. However, further improvement of the economy in the euro zone is dependent on an upturn in global exports, which should also result in capital expenditure and domestic demand increasing again. Germany is expected to grow slightly in 2013 and therefore perform better compared to the region as a whole. Although Germany s economic growth is also impacted by the still relatively weak global trade, it is supported by consumer spending, which is continuing to post a robust development thanks to a stable labor market, rising wages and a lower savings rate. Continued moderate growth of American economy Overall, there are good prospects for moderate growth in the U.S. in A further improvement in the situation on the labor market, steady growth in private consumption and increased corporate investments should contribute to this. However, the currently unforeseeable effects of the public spending cuts could negatively impact the

31 Subsequent Events and Outlook 31 development. Overall, economic growth of almost 2% is expected in the U.S. After a mixed performance in the first half of the year, economists are anticipating a less pronounced upturn in the Latin American economy in Mexico, Chile, Colombia and Peru are expected to contribute significantly to growth in the region, while the recent weak development in Argentina and Brazil could continue. Weaker economic outlook for Asia The prospects for the Asian economy have deteriorated somewhat in recent months following the disappointing performance in the first half of The region is now expected to post only slightly stronger growth than in the previous year. Growth is expected to reach just over 6%, driven by an improving export environment and stable domestic demand. The Chinese economy is also likely to perform more weakly in 2013 as a whole than was originally assumed, with experts now anticipating growth of less than 8% in Fiscal policy stimuli, substantial growth in private households income and high infrastructure investments should ensure that growth increasingly picks up in the second half of the year. In Japan, the government's aggressive fiscal and monetary policies should allow a moderate upswing. Meanwhile, growth of the Australian economy is expected to slow slightly, partly due to continuing restraint in private consumption. Continued sector growth expected The growth trend in the premium and luxury goods sector is expected to continue in According to industry experts, the currency-neutral growth rate should be in the mid single-digit range and is thus widely expected to outperform the economy as a whole. All regions are expected to contribute to sector growth in 2013, which will be aided in particular by rising demand in the emerging economies. This demand will probably also boost sales performance in Europe and the Americas in the form of tourism. Growth in Western Europe and particularly in Southern Europe will most probably still be affected by muted consumer confidence due to the debt crisis. However, this is likely to be offset by robust growth in Eastern Europe and the Middle East in particular. Overall, the sector is expected to post low singledigit growth in Europe. In the Americas, the outlook for the sector is still considered positive, also in light of the increased consumer confidence. The forecasted growth in the mid single-digit range is also likely to benefit from above-average growth rates in the Latin American markets. Despite the slowdown in growth observed in the past year, the highest growth rates for the sector are forecasted in Asia. Here, experts anticipate a high single-digit rise in sales. Following the slightly disappointing development of the latest economic data, demand in China is expected to recover as the year progresses. The extent of this recovery will depend to a large extent on the relevant consumer segment's confidence in the future economic and political development of the country. By contrast, the prospects for the Japanese market have improved significantly as a result of increased domestic demand and greater consumer confidence. The depreciation of the local currency is also likely to focus demand more strongly on the domestic market again. Sales to increase at a high single-digit rate on a currency-adjusted basis HUGO BOSS expects to increase its currency-neutral sales in the high single-digit range in The Group anticipates that this growth will exceed the expansion rates for the global economy and the luxury goods sector.

32 Subsequent Events and Outlook 32 OUTLOOK 2013 SALES GROWTH (CURRENCY- NEUTRAL) GROWTH IN EBITDA BEFORE SPECIAL ITEMS High single-digit High single-digit CAPITAL EXPENDITURE Around EUR 150 million on a comparable basis 1 OWN RETAIL NETWORK Around 50 net organic openings + around 100 shop-in-shop takeovers 1 not including the expenses in connection with the construction of a new distribution center for flat-packed goods in Filderstadt. Growth anticipated in all regions HUGO BOSS is assuming that all regions will contribute to the forecasted sales increase for the Group as a whole in In Europe, this growth will be driven primarily by the core markets in the North and West. Continued strong growth is predicted in Great Britain in particular. In the comparatively much smaller markets of Southern Europe, the effects of the debt crisis and the difficult consumer environment could lead to weaker growth rates. In the Americas, a continued positive development is anticipated, still driven primarily by the strength of the U.S. market. In Asia, the Group is planning to generate stronger currency-neutral growth as against the previous year. This should be supported by a gradual improvement in growth rates on the key Chinese market. Sales in the royalties segment are also expected to develop positively. Group's own retail business to drive sales growth The own retail business will be the main sales driver for the Group as a whole in Its retail sales are expected to increase at a double-digit rate, mainly as a result of strong growth in directly operated stores and online. In addition to the positive effects of the expansion of the Group's own store network, comp store sales are also forecasted to rise. The Group is benefiting here from the further professionalization of its retail activities and the strong appeal of its brands. The takeover of HUGO BOSS shop-in-shops previously managed by wholesale partners in the U.S., Germany and Spain will contribute to the sales increase in own retail. For the wholesale business, a decline in sales in the mid single-digit range is forecasted on a currency-neutral basis. This forecast reflects the difficult retail environment, particularly in Europe, and the shift in sales associated with the takeover of shop-in-shops previously operated by wholesale partners. Continued selling space expansion in own retail The HUGO BOSS Group will continue to expand its own retail activities and increase the number of new stores by around 50 in net terms in Based on an analysis of its global market penetration, the Group believes that there are opportunities to profitably increase its selling space in all regions. Europe will be the core area of new store projects. As well as expanding its own sales space in order to leverage its brand potential in existing, previously mainly wholesale-oriented markets, HUGO BOSS also plans to tap the Russian market with its own retail business. In addition to organic new store openings, the Group will also take over around 100 HUGO BOSS shop-in-shops previously managed by retail partners, primarily in the U.S., Germany and Spain. From August 1, 2013, the Group will also independently manage four retail stores previously operated by a local franchise partner in Singapore. Operating profit projected to increase at a high single-digit range HUGO BOSS is planning to increase its operating profit (EBITDA before special items) at a high single-digit range in The main factors driving profit growth will be the expansion and improved management of the Group's own retail business. Given the rising share of this distribution channel, the gross profit margin is expected to increase as against the previous year. Operating expenses will grow, mainly due to the further expansion of the Group's own retail activities and higher marketing expenses. The increase in other operating expenses should be below sales growth. As a result of the improved EBITDA before special items, net income is also expected to rise.

33 Subsequent Events and Outlook 33 Strict management of trade net working capital Strict management of trade net working capital is a high priority in order to generate improvements in operating cash flow. Particular attention is paid to reducing the cash conversion cycle. Potential for improvement is seen in reducing days inventories outstanding, particularly in the Group's own retail business, by the more frequent renewal of the product range as a result of the changed collection cycle and improved planning of merchandise flows. Overall, the Group expects trade net working capital to grow more slowly than sales in Investing activities to focus on own retail business Capital expenditure in 2013 will focus on expanding the Group's own retail activities and renovating existing stores and shops. Not including the expenses recognized in the first half of 2013 in connection with the construction of a new distribution center for flat-packed goods, for which the Group will not post any further expenses in the second half of 2013 due to the deconsolidation of the company concerned, capital expenditure will amount to approximately EUR 150 million in 2013 as a whole. Net Assets and Financial Position, p. 23 Continuing strong cash flow development The Group anticipates that cash flow will develop strongly in 2013, primarily due to the planned increase in earnings, strict management of trade net working capital and disciplined investment activity. In addition to the dividend payment, excess funds are to be used to further reduce debt. Accordingly, the Company expects net financial liabilities at the end of the year to be lower than in the previous year. Ambitious medium-term growth plans The Group is planning to generate significant sales and earnings increases in the medium term. The Group strategy is based on organic growth of the existing brand portfolio. Sales are expected to reach EUR 3 billion in Operating profit is set to rise to EUR 750 million in the same year. The Group expects to make further progress towards achieving these goals in Sales and operating profit are forecasted to rise further. A continued recessionary economic environment, particularly in major European core markets, cost inflation in sourcing processes and a loss of appeal of the Group's brands could jeopardize the achievement of these goals. The Group has taken precautions to limit the probability of these or other risks occurring and their impact if they do. Details can be found in the risk report in the 2012 annual report.

34 Summary on earnings, net assets and Financial Position 34 SUMMARY ON EARNINGS, NET ASSETS AND FINANCIAL POSITION In summary, earnings, net assets and the financial position indicate that HUGO BOSS Group continued to be in a sound financial position at the time that this report for the first six months of fiscal year 2013 was prepared. Metzingen, July 19, 2013 HUGO BOSS AG The Managing Board Claus-Dietrich Lahrs Christoph Auhagen Mark Langer

35 CONSOLIDATED INTERIM FINANCIAL STATEMENTS 3

36 Consolidated Income Statement 36 CONSOLIDATED INCOME STATEMENT OF THE HUGO BOSS GROUP FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, Sales 1, ,092.1 Cost of sales (385.8) (397.8) Direct selling expenses (22.6) (21.4) Gross Profit in % of sales Selling and distribution expenses (415.6) (380.1) Administration costs and other operating income/expenses (114.3) (104.1) Operating result (EBIT) in % of sales Net interest income/expenses (5.9) (7.4) Other financial items (5.4) (0.8) Financial result (11.3) (8.2) Earnings before taxes Income taxes (40.4) (43.3) Net income Attributable to: Equity holders of the parent company Non-controlling interests Net income Earnings per share (EUR) 2 Ordinary share Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in the Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting policies). 2 Basic and diluted earnings per share.

37 Consolidated Statement of Comprehensive Income 37 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE HUGO BOSS GROUP FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, Net income Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans Income taxes Items that may be reclassified subsequently to profit or loss Differences arising from currency differences Gains/losses from market valuation of hedges Income taxes (1.6) (1.1) Other comprehensive income, net of tax Total comprehensive income Attributable to: Equity holders of the parent company Non-controlling interests Total comprehensive income Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in the Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting policies).

38 Consolidated Balance Sheet 38 CONSOLIDATED BALANCE SHEET OF THE HUGO BOSS GROUP AS OF JUNE 30, 2013 Assets June 30, 2013 June 30, Dec. 31, January 1, Intangible assets Property, plant and equipment Deferred tax assets Non-current financial assets Non-current tax receivables Other non-current assets Non-current assets Inventories Trade receivables Current tax receivables Current financial assets Other current assets Cash and cash equivalents Current assets TOTAL 1, , , ,425.8 Equity and Liabilities June 30, 2013 June 30, Dec. 31, January 1, Subscribed capital Own shares (42.3) (42.3) (42.3) (42.3) Capital reserve Retained earnings Accumulated other comprehensive income (3.4) (9.7) (8.7) (20.9) Profit attributable to equity holders of the parent company Equity attributable to equity holders of the parent company Non-controlling interests Group Equity Non-current provisions Non-current financial liabilities Deferred tax liabilities Other non-current liabilities Non-current liabilities Current provisions Current financial liabilities Income tax payables Trade payables Other current liabilities Current liabilities TOTAL 1, , , , Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in the Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting policies).

39 Statement of Changes in Consolidated Equity 39 STATEMENT OF CHANGES IN CONSOLIDATED EQUITY OF THE HUGO BOSS GROUP FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, 2013 Retained earnings Accumulated other comprehensive income Equity Subscribed Capital Own Shares Capital Reserve Legal Reserve Other Reserves Differences arising from currency translation Market valuation of hedges Total before non-controlling interests Non-controlling interests January 1, 2012 (as reported) 70.4 (42.3) (9.5) (11.4) Change in accounting policies January 1, 2012 (adjusted) (42.3) (9.5) (11.4) Net income Other income Changes in scope of consolidation Allocated to retained earnings Dividend payment (199.1) (199.1) (3.1) (202.2) June 30, (42.3) (1.6) (8.1) TOTAL January 1, 2013 (as reported) 70.4 (42.3) (5.2) (3.5) Change in accounting policies January 1, 2013 (adjusted) (42.3) (5.2) (3.5) Net income Other income Changes in scope of consolidation Allocated to retained earnings Dividend payment (215.3) (215.3) (215.3) June 30, (42.3) (4.8) Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in the Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting policies).

40 Consolidated Statement of Cash Flows 40 CONSOLIDATED STATEMENT OF CASH FLOWS OF THE HUGO BOSS GROUP FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, Net income Depreciation/amortization Unrealized net foreign exchange gain/loss 0.0 (2.7) Other non-cash transactions Income tax expense/refund Interest income and expenses Change in inventories (21.0) (30.2) Change in receivables and other assets (17.3) (21.8) Change in trade payables and other liabilities 11.9 (11.6) Result from disposal of non-current assets Change in provisions for pensions (1.8) 3.1 Change in other provisions (9.0) (17.5) Income taxes paid (56.6) (50.2) Cash flow from operations Interest paid (6.8) (9.0) Interest received Cash flow from operating activities Investments in PPE 2 (76.8) (33.9) Investments in intangible assets (5.5) (7.1) Payment for changes in scope of consolidation Effects from disposal of subsidiaries (1.7) 0.0 Cash receipts from sales of PPE 2 and intangible assets Cash flow from investing activities (83.5) (40.8) Dividends paid to equity holders of the parent company (215.3) (199.1) Dividends paid to non-controlling interests 0.0 (3.1) Change in current financial liabilities (247.8) 14.5 Cash receipts from non-current financial liabilities Repayment of non-current financial liabilities (1.0) (0.4) Cash flow from financing activities (197.3) (188.1) Exchange rate-related changes in cash and cash equivalents Change in cash and cash equivalents (153.5) (137.8) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting policies). 2 Property, plant and equipment.

41 Condensed Notes to the Consolidated Interim Financial Statements 41 CONDENSED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1 // GENERAL INFORMATION The interim financial report of HUGO BOSS AG as of June 30, 2013, was prepared pursuant to Section 37w of the Securities Trading Act in accordance with the International Financial Reporting Standards (IFRS) and their interpretations that were valid as of the balance sheet date. The regulations of IAS 34 on Interim Financial Reporting were applied in particular. The consolidated interim management report and the consolidated interim financial statements were not audited in line with Article 317 of the German Commercial Code nor were they subjected to a review on the part of a person authorized to conduct an audit. The condensed consolidated interim financial statements and consolidated interim management report of HUGO BOSS AG, Metzingen, were authorized for issue to the Supervisory Board by the Managing Board on July 19, Before publication the condensed consolidated interim financial statements and the consolidated interim management report were discussed with the supervisory board s audit committee. 2 // ACCOUNTING POLICIES All interim reports of companies included in the consolidated interim report were prepared with uniform accounting policies. A detailed description of the applied accounting and consolidation methods can be found in the notes to the 2012 consolidated financial statements. The adoption of revised or new standards on January 1, 2013 resulted in the following changes in accounting policies. ACCOUNTING POLICIES ADOPTED FOR THE FIRST TIME IAS 19 - EMPLOYEE BENEFITS (REVISED 2011, IAS 19R) As of January 1, 2013, the HUGO BOSS Company adopted IAS 19, Employee Benefits (revised 2011, IAS 19R), which was published by the IASB in June The standard is effective for fiscal years beginning on or after January 1, The standard was adopted retroactively. The amendment was endorsed in European law by the EU in June The following changes to IAS 19R affect the net assets, financial position and results of operations of the HUGO BOSS Group: IAS 19R replaces interest expense and the expected return on plan assets with a net interest income amount. That is derived by multiplying the net pension obligation with the discount rate on which the measurement of the gross pension obligation (defined benefit obligation) is based. The net defined benefit liability (asset) comprises the interest income on plan assets and the interest expense on the DBO. The difference between the interest income on plan assets and the return on plan assets is reported in other comprehensive income in the consolidated statement of comprehensive income. IAS19R also more precisely defines the concept of risk sharing between the employees and the employer. This more precise definition affects the calculation of pension obligations under plans with future employee contributions effectively rising over their remaining working life. In particular, this concerns pension plans that feature backloading in later years. The previous IAS 19 provided for the calculation of a total obligation including future employee-funded benefit increases. In accordance with IAS 19R, the allocation of vesting benefits is calculated on the basis of the net obligation exclusively of future employee-funded benefit increases. This resulted in a reduction in the DBO and a different allocation of service cost over working life.

42 Condensed Notes to the Consolidated Interim Financial Statements 42 A lesser effect results from the recognition of the administration costs of providing benefits not related to the administration of plan assets. The recognition of non-vested past service cost as it arises rather than recognizing it over the period until vesting does not affect the HUGO BOSS Group. Similarly, the abolition of the corridor method does not require any adjustment at HUGO BOSS. The new regulation on the recognition of bonus payments for German early partial retirement plans also means a change in the recognition and classification of expense. In the past, provisions for bonus payments were recognized in full immediately on conclusion of an early partial retirement agreement and classified as a termination benefit. The regulations of IAS 19R clarify that these bonus payments no longer constitute a settlement and instead employees earn their claim to them through their work. Thus, the provision must accrue over the vesting period. This resulted in a reduction in the provision previously recognized in full for partial early retirement bonuses and an accrual over the active phase of the partial early retirement arrangement. The retroactive adoption of IAS 19R resulted in the following effects on the opening balance as of January 1, 2012 and the prior-year period: Before adjustment Adjustment Dec. 31, 2012 January 1, 2012 After adjustment Before adjustment Adjustment After adjustment Assets 1,584.5 (0.3) 1, ,426.0 (0.2) 1,425.8 Thereof deferred tax assets 67.0 (0.3) (0.2) 55.9 Non-current liabilities (2.1) (1.5) Thereof non-current provisions 55.1 (2.1) (1.5) 39.5 Group equity Thereof retained earnings Thereof net income Thereof total comprehensive income The retroactive adoption of IAS 19R had only an insignificant effect on the consolidated income statement and the statement of comprehensive income in the first half year of 2013 as well in the comparative period of Therefore the effect on the consolidated balance sheet as of June 30, 2013 was insignificant in comparison to the consolidated balance sheet as of December 31, NEW AND AMENDED ACCOUNTING POLICIES Changes of IAS 1 "Presentation of financial statements" require that other comprehensive income must be broken down so that other items that will later be reclassified to the income statement are reported seperately from items that will remain in other comprehensive income. The adoption of new accounting regulations in IAS 1, IAS 12, IAS 16, IAS 32, IAS 34, IFRS 7 and the first time adoption of IFRS 13 did not materially affect the Group s results of operations, net assets or net financial position. Additional Disclosures were required.

43 Condensed Notes to the Consolidated Interim Financial Statements 43 CHANGE IN ACCOUNTING METHOD/CHANGE IN PRESENTATION Changes in accounting method and changes in presentation described in the consolidated financial statements 2012 were also taken into account as of June 30, The prior-year figures were adjusted retroactively in accordance with the regulations of IAS 8. 3 // CURRENCY TRANSLATION The most important exchange rates of currencies used in the interim statements changed relation to the euro in the reporting period as follows: Currency Average Rate Closing Rate Country 1 EUR = Jan. June 2013 Jan. June 2012 Jan. Dec June 30, 2013 June 30, 2012 Dec. 31, 2012 China CNY Great Britain GBP Hong Kong HKD Switzerland CHF U.S.A. USD // ECONOMIC AND SEASONAL INFLUENCES As a global company, the HUGO BOSS Group is exposed to various economic developments. Industryspecific seasonal fluctuations are typical for HUGO BOSS. However, HUGO BOSS operations have changed fundamentally in recent years. While the business used to be dominated by two preorder seasons (spring/summer and fall/winter) with orders being placed accordingly early, it has now become increasingly complex. Preorder business now consists of four seasonal sales every year. In addition, the significance of seasonal influences is decreasing as a result of the global expansion of the Group s own retail business. Furthermore, HUGO BOSS also makes efforts to increase efficiency through greater use of replenishment business to service less fashion-oriented items. The number of monthly theme-oriented deliveries is also climbing continuously. These effects are steadily reducing the seasonality over the course of HUGO BOSS business. 5 // SCOPE OF CONSOLIDATION The number of companies included in consolidation rose from 54 in the consolidated financial statements as of December 31, 2012 to 55 in the reporting period from January 1 to June 30, The new company founded in fiscal year 2012, HUGO BOSS RUS LLC, Moscow, Russia, was not included in the consolidated financial statements as of December 31, 2012 owing to immateriality. The wholly owned subsidiary was included in consolidation for the first time in the first quarter of In the second quarter, H. BOSS SOUTH EAST ASIA PTE. LTD. was consolidated for the first time as a wholly owned subsidiary.

44 Condensed Notes to the Consolidated Interim Financial Statements 44 Control over HUGO BOSS Distributionszentrum Vermietungsgesellschaft mbh & Co. Objekt HUGO BOSS Filderstadt KG has ended as a result of contractual arrangements. As there is no longer significant influence over the company, it was deconsolidated as of June 30, 2013 and has since been reported as an investment under other non-current financial assets. The effects of the deconsolidation on the Group s net assets, financial position and result of operations as of the disposal date are shown in the following table: EFFECTS FROM DECONSOLIDATION Assets June 30, 2013 Non-current assets (57.2) Thereof intangible assets (0.5) Thereof tangible assets (56.6) Current assets (2.8) Thereof cash and cash equivalents (1.7) TOTAL (60.0) Equity and Liabilities Equity (0.2) Non-current liabilities 60.0 Thereof non-current financial liabilities 60.0 Current liabilities 0.2 TOTAL 60.0 Result of deconsolidation 0.3 The obligations to purchase property, plant and equipment disclosed as of December 31, 2012 in the amount of EUR 74 million were significantly reduced by the disposal of the company. 6 // NON-CONTROLLING INTERESTS The consolidated financial statements include companies in which HUGO BOSS AG holds less than 100% of the equity. In accordance with IAS 27, these minority interests are reported in equity separately from the equity held by the shareholders of HUGO BOSS AG in the consolidated balance sheet. 7 // NOTES TO THE CONSOLIDATED INCOME STATEMENT COST OF SALES AND DIRECT SELLING EXPENSES Jan. June 2013 Jan. June 2012 Cost of purchase Cost of conversion Direct selling expenses TOTAL Direct selling expenses primarily include sales commissions, freight and duties charges as well as credit card fees.

45 Condensed Notes to the Consolidated Interim Financial Statements 45 SELLING AND DISTRIBUTION EXPENSES Jan. June 2013 Jan. June 2012 Expenses for Group's own retail business, indirect sales and marketing organization Marketing spendings Logistics expenses Bad Debts/Losses TOTAL Alongside personnel expenses, rental expenses are the largest item in the expenses for the Group s own retail business, indirect sales and marketing organization. In addition to staff and rental expenses for wholesale distribution, the expenses for the Group s own retail business, indirect sales and marketing organization also include other expenses for retail services and regional sales management. ADMINISTRATIVE COSTS AND OTHER OPERATING EXPENSES/INCOME Jan. June 2013 Jan. June 2012 General administration costs Research and development costs Special items TOTAL General administrative costs consist largely of rent for premises, maintenance costs, IT operating costs, legal and consulting fees, as well as the personnel expenses of the respective functional areas. In the HUGO BOSS Group, research and development expenses are incurred primarily for the creation of fashion collections. Special items amounting to EUR 4 million (previous year: EUR 0 million) were related to reorganization measures in Europe. PERSONNEL EXPENSES Jan. June 2013 Jan. June 2012 Wages and salaries Social security Expenses and income for retirement benefits and aid TOTAL

46 Condensed Notes to the Consolidated Interim Financial Statements 46 EMPLOYEES June 30, 2013 Dec. 31, 2012 Industrial employees 4,194 4,303 Commercial and administrative employees 7,571 7,549 TOTAL 11,765 11,852 DEPRECIATION Jan. June 2013 Jan. June 2012 Non-current Assets Tangible Assets Intangible Assets TOTAL COST OF MATERIALS The cost of materials in the first half year of 2013 amounted to EUR 327 million (2012: EUR 322 million). 8 // EARNINGS PER SHARE Jan. June 2013 Jan. June 2012 Net income attributable to equity holders of the parent company Average number of shares outstanding 1 Ordinary shares 69,016,167 69,016,167 EPS ordinary shares in EUR Regardless own shares. 2 Basic and diluted earnings per share. Pursuant to IAS 33, earnings per share (EPS) are calculated by dividing the net income or loss for the period by the weighted average number of shares outstanding during the period. There were no shares outstanding that could have diluted earnings per share either as of June 30, 2013 or as of June 30, // TREASURY SHARES In the first six months of fiscal year 2013, HUGO BOSS AG did not purchase any treasury shares. HUGO BOSS AG holds a total of 1,383,833 ordinary shares. This corresponds to a share of 1.97% or EUR 1,383,833 of the share capital. The total of treasury shares include former preferred shares, which were transferred to ordinary shares on June 15, The transfer of all preferred shares to ordinary shares was approved at HUGO BOSS annual shareholders meeting on May 3, 2012.

47 Condensed Notes to the Consolidated Interim Financial Statements // PROVISIONS FOR PENSIONS AND SIMILAR OBLIGATIONS PROVISIONS FOR PENSIONS June 30, 2013 Dec. 31, 2012 Provisions for pensions Provisions for similar obligations TOTAL The acturial calculation used to determine the present value of the defined benefit obligations also included relevant influenced factors, the planned service cost and the expected return on plan assets. Parameters like discount rate, rate of compensation increase, expected salary increase and the expected rate of return of plan assets remain equal in the first six months of fiscal year 2013 in comparison to fiscal year PENSIONS EXPENSES Jan. - June 2013 Jan. - June Current service cost for the period Net interest costs Thereof interest expense from DBO Thereof net interests from asset ceiling Therof interest income from plan assets (1.0) (1.2) Pensions expenses for the period Certain amounts shown here do not correspond to previous year figures and reflect adjustments made (as detailed in Condensed Notes to the Consolidated Interim Financial Statements, Note 2 // Accounting policies). Pensions expenses consist of current service cost of the period and net interest costs. Net interest costs comprise of interest expenses, net interests from asset ceiling and interest income from plan assets.

48 Condensed Notes to the Consolidated Interim Financial Statements // ADDITIONAL DISCLOSURES ON FINANCIAL INSTRUMENTS The following table shows the carrying amounts and fair values of all financial instruments recognized in the consolidated interim financial statements. CARRYING AMOUNT AND FAIR VALUES BY CLASS OF FINANCIAL INSTRUMENTS IAS 39 category June 30, 2013 Dec. 31, 2012 Carrying amount Fair value Carrying amount Fair value Assets Cash and cash equivalents LaR Trade receivables LaR Other financial assets Thereof: Available for sale investments AfS Freestanding derivatives FAHfT Derivatives subject to hedge accounting n.a Other financial assets LaR Liabilities Financial liabilities due to banks FLAC Trade payables FLAC Other financial liabilities Thereof: Liabilities from finance leases n.a Freestanding derivatives FLHfT Derivatives subject to hedge accounting n.a Other financial liabilities FLAC (0.1) (0.1) TOTAL for categories of fiancial instruments according to IAS 39: Loans and Receivables LaR Financial Assets Held for Trading FAHfT Available for Sale AfS Financial liabilities Measured at Amortised Cost FLAC Financial liabilities Held for Trading FLHfT The fair value of financial assets and financial liabilities is shown with the amount for which the relevant instrument could be exchanged in a current transaction between willing parties. The methods and assumptions used to calculate the fair values are as follows: Cash and cash equivalents, trade receivables, other financial assets, trade payables and other current liabilities very closely approximate to their carrying amounts, mainly as a result of the short maturities of these instruments. The fair value of bank loans and other financial liabilities, finance lease liabilities and other non-current financial liabilities is calculated by discounting the future cash flows using interest rates currently available for borrowing at similar conditions, credit risks and maturities. The fair value of financial assets available for sale is calculated on the basis of market prices on active markets if available. Only equity instruments measured at cost were included as of the reporting date.

49 Condensed Notes to the Consolidated Interim Financial Statements 49 The Group concludes derivative financial instruments with various parties, most of which are financial institutions of good credit rating (investment grade). Financial transactions with parties with a lower credit rating require the approval of the Managing Board and are concluded only to a limited extent. Derivatives measured using a method with input parameters observable on the market primarily include interest rate swaps and currency forwards. The most frequently used measurement methods include the forward price and swap models using present value calculations. These models take into account various factors such as the creditworthiness of counterparties, foreign exchange spot and forward rates, yield curves and the forward rates of the underlying assets. As of June 30, 2013, the derivative positions are measured at market prices (marked-to-market) not including the write-down for creditworthiness, which is based on the default risk of the counterparty of the derivative. The default risk of the counterparty did not entail any significant effects. HIERACHY OF FAIR VALUES The Group uses the following hierarchy to determine and report the fair value of financial instruments by measurement method: Level 1: Listed (non-adjusted) prices on active markets for similar assets or liabilities Level 2: Methods in which all the input parameters that significantly affect the calculation of fair value are either directly or indirectly observable Level 3: Method in which the input parameters that significantly affect the calculation of fair value are not based on observable market data As of June 30, 2013, level 2 applies to all financial instruments measured at fair value. There were no transfers between level 1 and level 2 or from level 3 during fiscal year Financial instruments measured at fair value consisted of forward exchange contracts, currency swaps und interest rate derivatives. These were assigned to the categories FAHfT, FLHfT and derivatives subject to hedge accounting. The assets amounted to EUR 5 million, while the liabilities totaled EUR 4 million. HEDGING INTEREST RATE RISKS To hedge against interest rate risks, HUGO BOSS AG uses interest hedges to reduce the risk in some cases. As of the reporting date, floating-rate financial liabilities totaling EUR 100 million were hedged and were in an effective hedging relationship. The change in unrealized gains from market valuation of hedges under other comprehensive income amounted to EUR 4.9 million. 12 // CONTINGENT LIABILITIES AND CONTINGENT ASSETS There were no material changes in contingent liabilities as against December 31, There were no contingent assets as of June 30, 2013.

50 Condensed Notes to the Consolidated Interim Financial Statements // CASH FLOW STATEMENT The HUGO BOSS Group s cash flow statement shows the changes that occurred in cash and cash equivalents during the year under review on the basis of cash transactions. Pursuant to IAS 7, cash flows are reported separately according to source and application in operating activities, investing activities, and financing activities. Cash flows are derived indirectly based on the Group s net income. Changes in the balance sheet items presented in the cash flow statement cannot be derived directly from the balance sheet due to adjustments for currency effects. 14 // SEGMEENT REPORTING Jan. June 2013 Europe 1 Americas Asia/Pacific Royalties Total Operating Segments Sales ,125.2 Segment profit in % of sales 35.8% 24.1% 37.6% 83.2% 34.4% Segment assets Capital expenditure Impairments (0.4) (0.4) Thereof tangible assets (0.2) (0.2) Thereof intangible assets (0.2) (0.2) Depreciation/Amortization (12.7) (8.1) (7.8) 0.0 (28.6) SAR expenses and hedging Including Middle East and Africa. Jan. June 2012 Europe 1 Americas Asia/Pacific Royalties 2 Total Operating Segments Sales ,092.1 Segment profit in % of sales 36.2% 25.9% 36.6% 88.8% 35.1% Segment assets Capital expenditure Impairments (0.1) (0.1) Thereof tangible assets (0.1) (0.1) Thereof intangible assets Depreciation/Amortization (11.1) (6.2) (6.7) 0.0 (24.0) SAR expenses and hedging Including Middle East and Africa. 2 Previous year figures were adjusted.

51 Condensed Notes to the Consolidated Interim Financial Statements 51 RECONCILIATION SALES Jan. June 2013 Jan. June 2012 Sales operating segments 1, ,092.1 Corporate units Consolidation TOTAL 1, ,092.1 OPERATING INCOME Jan. June 2013 Jan. June 2012 Segment profit operating segments Depreciation/Amortization operating segments (28.6) (24.0) Impairments operating segments (0.4) (0.1) Special items operating segments (1.7) 0.0 Operating income (EBIT) operating segments Corporate units (168.2) (170.4) Consolidation (1.3) 0.0 Operating income (EBIT) HUGO BOSS Group Net interest income/expenses (5.9) (7.4) Other financial items (5.4) (0.8) Earnings before taxes HUGO BOSS Group CAPITAL EXPENDITURE June 30, 2013 June 30, 2012 Dec. 31, 2012 Capital expenditure operating segments Corporate units Consolidation TOTAL DEPRECIATION/AMORTIZATION Jan. June 2013 Jan. June 2012 Depreciation/Amortization operating segments (28.6) (24.0) Corporate units (14.3) (13.2) Consolidation TOTAL (42.9) (37.2)

52 Condensed Notes to the Consolidated Interim Financial Statements 52 IMPAIRMENT Jan. June 2013 Jan. June 2012 Impairment operating segments (0.4) (0.1) Corporate units Consolidation TOTAL (0.4) (0.1) SAR-EXPENSES AND HEDGING Jan. June 2013 Jan. June 2012 SAR expenses and hedging operating segments Corporate units Consolidation TOTAL SEGMENT ASSETS June 30, 2013 June 30, 2012 Dec. 31, 2012 Segment assets operating segments Corporate units Consolidation Current tax receivables Current financial assets Other current assets Cash and cash equivalents Current assets HUGO BOSS Group Non-current assets Total assets HUGO BOSS Group 1, , ,584.2 GEOGRAPHIC INFORMATION Third party sales Non-current assets Jan.- June 2013 Jan.- June 2012 June 30, 2013 Dec. 31, 2012 Germany Other European markets U.S.A Other North- and Latinamerica markets China Other Asian markets Royalties TOTAL 1, ,

53 Condensed Notes to the Consolidated Interim Financial Statements // EVENTS AFTER THE END OF THE REPORTING PERIOD Between the end of the first half of 2013 and the publication of this report, there were no material macroeconomic, socio-political, sector-related or company-specific changes that the management expects to have a significant influence on the results of operations, net assets, and financial position of the Group. 16 // INFORMATION CONCERNING THE MAJORITY SHAREHOLDER In accordance with Section 21 of the Securities Trading Act (WpHG), shareholders are required to report the level of their shareholdings if they exceed or fall below certain thresholds. The thresholds for reporting are 3 %, 5 %, 10 %, 15 %, 20 %, 25 %, 30 %, 50 % and 75 %. On January 24, 2013 HUGO BOSS was notified of the following voting rights announcement pursuant to section 25a WpHG (German Securities Trading Act) of Mediobanca Banca di Credito Finanziario S.p.A., Milan, Italy: We hereby notify you pursuant to section 25a para. 1 WpHG that since 21 January 2013 we no longer hold any financial or other instruments pursuant to section 25a para. 1 WpHG which are structured in a manner that enables us to acquire voting rights in HUGO BOSS AG. Therefore, on 21 January 2013 we have fallen below the thresholds of 30%, 25%, 20%, 15%, 10% and 5% pursuant to section 25a para. 1 WpHG. Further shares of voting rights that need to be notified in accordance with sections 21, 22, 25 WpHG are neither held by nor attributable to us. The aggregate number of shares of voting rights that need to be notified in accordance with sections 21, 22, 25, 25a WpHG corresponds to the number disclosed above. The Company published these notifications verbatim on its Investor Relations website.

54 Responsibility Statement 54 RESPONSIBILITY STATEMENT To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Group, and the Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group. Metzingen, July 19, 2013 HUGO BOSS AG The Managing Board Claus-Dietrich Lahrs Christoph Auhagen Mark Langer

55 FURTHER INFORMATION 4

56 Forward-Looking Statements 56 FORWARD-LOOKING STATEMENTS This document contains forward-looking statements that reflect management s current views with respect to future events. The words anticipate, assume, believe, estimate, expect, intend, may, plan, project, should, and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties. If any of these or other risks or uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made. FINANCIAL CALENDAR 2013 OCTOBER 31 Publication of the Nine Months Report 2013 NOVEMBER 26 Investor Field Trip, Hong Kong CONTACTS INVESTOR RELATIONS Phone +49 (0) [email protected] DENNIS WEBER Head of Investor Relations Phone +49 (0) Fax +49 (0) DR. HJÖRDIS KETTENBACH Head of Corporate Communication Phone +49 (0) Fax +49 (0) REQUEST FOR ANNUAL REPORTS Service

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