Annual Report 2021

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In fiscal year 2021, HUGO BOSS invested EUR 104 million in property, plant, and equipment and intangible assets, representing an increase of 30% as compared to the prior-year level (2020: EUR 80 million). The increase reflects, above all, the suspension of non-business-critical investments in 2020, which HUGO BOSS had implemented to secure free cash flow at an early stage of the pandemic. In addition, the development of the new store concepts for BOSS and HUGO in 2021, which were implemented for the first time towards the end of the year, contributed to this development. Compared to pre-pandemic levels, however, capital expenditure decreased by 46% (2019: EUR 192 million).

Capital expenditure

(in %)

2021 (2020) By region By functional area Europe¹ 29 (31) Americas 13 (16) Asia/Pacific 28 (19) Corporate units 30 (34) Own retail business 62 (61) Administration (incl. IT) 32 (33) Other capital expenditure 6 (7)

Including Middle East and Africa.

In line with its strategic claim “Rebalance Omnichannel”, HUGO BOSS wants to fully exploit the potential of its brick-and-mortar retail business in the coming years. The optimization and modernization of the global store network plays a key role in this. Therefore, HUGO BOSS plans to invest a total of EUR 500 million in the further optimization and modernization of its store network by 2025. The new store concept, which aims to be significantly more emotional, appealing, digital, and productive than the previous one, is intended to make a significant contribution to developing the stores to true points of experience. Customers have been able to already experience the new store concept of BOSS and HUGO in first stores in Germany and the United Arab Emirates since late 2021. With capital expenditure of EUR 64 million, the focus of investment activity in fiscal year 2021 was again on the own retail network (2020: EUR 48 million). Investments in the continuous optimization and modernization of existing locations totaled EUR 32 million (2020: EUR 27 million). At the same time, HUGO BOSS invested EUR 32 million in selective openings of new retail points of sale (2020: EUR 21 million), with a particular focus on the Asia/Pacific region. In this context, fiscal year 2021 has seen the opening of a BOSS flagship store in Tokyo’s popular Ginza district for the first time. Group Strategy, “Rebalance Omnichannel”

Capital expenditure on administration amounted to EUR 33 million in the past fiscal year (2020: EUR 26 million). This mainly includes investments of EUR 25 million in the IT infrastructure (2020: EUR 22 million). In line with the strategic claim “Lead in Digital”, these mainly related to the further digitalization of the business model. Key investment projects included the establishment of the HUGO BOSS Digital Campus and the global expansion of the Company’s own online business. Other capital expenditure on the Company’s production, logistics and distribution structure and on research and development amounted to EUR 6 million in 2021 (2020: EUR 5 million). Group Strategy, “Lead in Digital”

Accumulated depreciation and amortization on property, plant and equipment and intangible assets, including own capitalized cost, totaled EUR 1,087 million in fiscal year 2021 (2020: EUR 1,067 million). Existing obligations from investment projects amounted to EUR 2 million at December 31, 2021 (December 31, 2020: EUR 2 million). Notes to the Consolidated Financial Statements, Note 8