Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — FY2016 Earnings Presentation
34 slides from Samsonite's earnings presentation, Mar 16, 2017
Slide 1: Samsonite International S.A. 2016 Annual Results
Samsoni ite International S.A. HKEX Stock Code: 1910 SS a i < N cee RS Neo Z . * _ ie J y Kal od ita ir. WE CARRY 3 The Marla y, 2016 Annual Results J March 16, 2017 ~~ Sams@nite
Slide 2: Disclosure Statement
Disclosure Statement This presentation and the accompanying slides (the “Presentation”) which have been prepared by Samsonite International S.A. (“Samsonite” or the “Company”) do not constitute any offer or invitation to purchase or subscribe for any securities, and shall not form the basis for or b
Slide 3: Agenda
Agenda Results Highlights Business Overview Financial Highlights Outlook and Strategy for 2017 Q&A Page 3
Slide 4: 2016 Results Highlights
2016 Results Highlights Record net sales of US$2.8 billion +17.3% +20.4% +22.8% +20.5% Constant Constant Constant Constant Currency Currency Currency Currency Growth Growth Growth Growth Constant currency net sales Gross margin up 150bp from Adjusted EBITDA margin Adjusted Net Income is up US$41.0 g
Slide 5: Strong Continuous Sales Growth
Strong Continuous Sales Growth 5-Year CAGR of 12.4% Since IPO in 2011 * Constant currency sales growth that was reported for each year, calculated by applying the average exchange rate of the previous year to current year local currency results. Page 5
Slide 6: 2016 Business Overview
2016 Business Overview Strong constant currency net sales growth in Strong growth in all all regions: 2016 advertising and promotion regions Asia: +9.9% (+4.0% excluding Tumi) spend of US$143.8 million (5.1% North America: +26.8% (+3.9% excluding Tumi) of sales) is 8.9%, or US$11.7 Europe: +16.1% (+
Slide 7: Strong net sales growth partly offset by currency translation pressure
Strong net sales growth partly offset by currency translation pressure US$m Net Sales Bridge - 2015 to 2016 Organic net sales growth of US$145.9 million(1), or 6.0%(1), coming from: Asia: +4.0%(1) -1.8% North America: +3.9%(1) +11.3% Europe: +10.3%(1) +6.0% Latin America: +17.4%(1) Incremental net s
Slide 8: Adjusted Net Income Bridge
Adjusted Net Income Bridge (1) +15.7% +US$7 million for 5 months (1) Main items typically adjusted out of net income when calculating Adjusted Net Income are amortization, acquisition costs, JV put option expense and the estimated tax impact on these items. In 2016, the income tax benefit of US$56.8
Slide 9: 2016 Results Highlights Excluding Tumi Results
2016 Results Highlights Excluding Tumi Results +6.0% +6.5% -3.8% +6.8% Constant Constant Constant Constant Currency Currency Currency Currency Growth Growth Growth Growth Constant currency net sales Gross margin increased 40bp Advertising as a percentage Adjusted EBITDA margin growth of US$145.9 mil
Slide 10: Strong increase in sales growth and Adjusted EBITDA margin from 1st half to 2nd half
Strong increase in sales growth and Adjusted EBITDA margin from 1st half to 2nd half, excluding Tumi Constant currency net sales growth increased from 4.1% in the 1st half of 2016 to 7.8% in the 2nd half of 2016 due mainly to improved retail sales comps (-0.5% in 1st half of 2016 compared to +5.1% i
Slide 11: Tumi – August through December
2016 Results Highlights Tumi – August through December Net sales growth of US$24.4 million, Gross margin increased by Advertising spend was Adjusted EBITDA margin decreased or 9.7%, is partly due to the impact of 200bp due mainly to less significantly increased soon by 340bp from 2015 to 2016 mainly
Slide 12: Tumi Acquisition Integration Update
Tumi Acquisition Integration Update Integration going largely as planned. Management structure is in place: Rob Cooper is General Manager of North America business; Asia and Europe integrating with regional teams. SAP conversion on track for May 2017 - will allow completion of other cost synergies.
Slide 13: Tumi Net Sales and EBITDA by Region
Tumi Net Sales and EBITDA by Region Tumi (US$M) 2016 2015 Change Change % Net Sales +2.9% growth in Asia, excluding impact of consolidating Asia $ 58.8 $ 47.3 $ 11.4 24.2% Japan. North America $ 185.4 $ 173.9 $ 11.5 6.6% Europe $ 30.5 $ 29.4 $ 1.2 3.9% Corp. & Licensing $ 1.0 $ 0.8 $ 0.3 37.2% Total
Slide 14: Asia – Strong net sales and profit growth
Asia – Strong net sales and profit growth aided by addition of Tumi and supported by moderate growth in the organic business. Strong full year constant currency net sales growth of 9.9%(1), including Tumi sales of US$58.8 million. Excluding Tumi, sales growth of 4.0%(1), driven by: Strong net sales
Slide 15: North America – Tumi driving significant increase in sales and profitability
North America – Tumi driving significant increase in sales and profitability, while organic business achieved solid growth with positive retail trend in the 2nd half of the year. Net sales increased by 26.8%(1) including Tumi sales of US$185.4 million. Excluding Tumi sales, growth was 3.9%(1), drive
Slide 16: Europe – Strong net sales growth of 16.1%
Europe – Strong net sales growth of 16.1%(1) largely due to excellent performance in the organic business and bolstered by the addition of Tumi. Constant currency net sales growth of 16.1%, including US$30.5 million Tumi sales. Excluding Tumi, sales growth was 10.3% on a constant currency basis led
Slide 17: Latin America – Investment in retail expansion, team and infrastructure
Latin America – Investment in retail expansion, team and infrastructure to position the region for future growth Net sales increased 17.4%(1) on strong growth in Mexico (+30.9%(1)(2)), Chile (+6.8%(1)), and Brazil (25.5%(1)). The majority of regional net sales growth came from direct-to-consumer cha
Slide 18: Constant currency Net Sales growth in most key markets
Constant currency Net Sales growth in most key markets (1) (2) (1) Hong Kong includes Macau and wholesale sales to Asia’s Tumi distributors. Page 18 (2) UK includes Ireland.
Slide 19: Continued brand penetration drove growth in most emerging markets
Continued brand penetration drove constant currency Net Sales growth in most emerging markets with combined constant currency growth of 15.1% (1) (1) Mexico, excluding export sales Page 19
Slide 20: Direct-to-consumer channel sales accelerated with the acquisition of Tumi
Direct-to-consumer channel sales accelerated with the acquisition of Tumi * * * Tumi and Combined Group are based on + = Pro-forma full year net sales for Tumi. Direct-to-consumer Wholesale Excluding Tumi, direct-to-consumer net sales growth was 11.8%(1), with: Strong retail net sales growth of 10.8
Slide 21: Diversified brand portfolio generated continued sales growth
Diversified brand portfolio generated continued sales growth Strong growth in Samsonite with net sales up 5.9% on a constant Net Sales growth by brand currency basis: Asia +7.1%(1), North America +1.8%(1), Europe +7.8%(1), and Latin America +18.9%(1). American Tourister net sales down 1.0% on a cons
Slide 22: Key Product Assortment
Key Product Assortment North America Europe Asia North America Europe Asia Latin America Page 22
Slide 23: Key Product Assortment
Key Product Assortment Page 23
Slide 24: Key Product Assortment
Key Product Assortment Page 24
Slide 25: All key categories contributed to net sales growth
All key categories contributed to net sales growth Net Sales growth by product category Travel remained our largest product category and traditional strength with all regions contributing to its organic growth of 4.5%(1). Non-travel net sales increased from 31.7%(1) of total net sales in 2015 to 35.
Slide 26: 8.9% increase in global advertising spend to drive continued sales growth
8.9% increase in global advertising spend to drive continued sales growth Indicates % of net sales Total advertising spend increased by 8.9%, focused mainly on boosting consumer awareness of Tumi and other newer brands within the regions and non-travel categories within the Samsonite brand. Advertis
Slide 27: Targeted Brand Advertising
Targeted Brand Advertising Samsonite (Business) - Austria American Tourister - Mexico American Tourister - Scandinavia American Tourister – Samsonite – United States United States Samsonite - Singapore Lipault – France Page 27
Slide 28: Financial Highlights
Financial Highlights Net sales increased to a record level of US$2,810.5 million, with sales growth of 6.0%(1) in the organic business and an additional US$275.8 million of net sales from Tumi. Adjusted Net Income increased by 18.9% to US$257.9 million, despite a year-on-year increase in interest ex
Slide 29: High Level Bridge of Underlying Growth in Profit Attributable to Equity Holders
High Level Bridge of Underlying Growth in Profit Attributable to Equity Holders Underlying growth and net income Specific to 2016 Net impact of Tumi for 5 months (1) (1) Ticking fees represent the interest expense associated with the Term Loan B facility incurred prior to the closing of the Tumi acq
Slide 30: Effective tax rate was mainly impacted by pension liquidation and Tumi acquisition
Effective tax rate was mainly impacted by pension liquidation and Tumi acquisition 2015 Effective Tax Rate 25.4% Change in organic profit mix 0.1% Change in reserves, non-deductibles and tax credits 1.6% Change in tax incentives 0.3% 2016 Effective Tax Rate - Samsonite Organic 27.4% Impact of Tumi p
Slide 31: Leveraged Balance Sheet to Finance Tumi Acquisition
Leveraged Balance Sheet to Finance Tumi Acquisition Cash and cash equivalents increased US$m December 31, December 31, $ C hg D e c - 16 % C hg D e c - 16 by US$187.7 million to US$368.5 2015 2016 v s . D e c - 15 v s . D e c - 15 million at December 31, 2016. Cash Cash and cash equivalents 180.8 36
Slide 32: Efficiently Managing Working Capital
Efficiently Managing Working Capital Working capital continued to be managed efficiently at 12.6% of net sales at December 31, 2016, favorable US$m December 31, December 31, $ Chg Dec-16 % Chg Dec-16 to targeted 14% level. Excluding Tumi, working 2015 2016 (1) vs. Dec-15 vs. Dec-15 capital efficienc
Slide 33: Capital Expenditures
Capital Expenditures 2016 retail capex consisted of new stores and remodels in Asia of US$12.0 million, North Capital Expenditure by project type America of US$8.1 million, Europe of US$8.6 million and Latin America of US$5.4 million. US$m 2015 2016 Capex on Product Development / R&D / Supply includ
Slide 34: Outlook and Strategy for 2017
Outlook and Strategy for 2017 Increase in disposable incomes and living standards in developing countries, growing popularity of outdoor and adventure sports and growth of the tourism industry are all expected to drive growth of the global luggage market at a CAGR of 6.1% through 2021(1). Continue t
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