Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — H1 2021 Earnings Presentation
44 slides from Samsonite's earnings presentation, Aug 18, 2021
Slide 1: 2021 Interim Results
2021 INTERIM RESULTS AUGUST 18, 2021 Samsonite International S.A. Stock Code: 1910
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, o
Slide 3: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 3
Slide 4: Sales recovery continued with Q2 sales growth improving to -52.2% vs. Q2 2019
Sales recovery continued with Q2 sales growth improving to -52.2%(1) vs. Q2 2019 compared to -57.3%(1) in Q1, with June sales growth reaching -48.2%(1) and July at -40.9%(1) Continued to see sequential sales growth improvement quarter over quarter vs. 2019, with a meaningful increase in June 2021. (
Slide 5: Sales recovery continued throughout 1H 2021
Sales recovery continued throughout 1H 2021 with sales down 52.2%(1) to 2019 in Q2 2021 compared to down 57.3%(1) in Q1 Strong June with clear signs of recovery in North America and start of recovery in Europe. North America and Europe month of June sales down 41.0%(1) and 47.8%(1) to 2019, respecti
Slide 6: Adjusted EBITDA continued quarterly improvement, positive in Q2 2021
Adjusted EBITDA continued its trend of quarterly improvement, with the Company achieving positive Adjusted EBITDA of US$11.5 million in Q2 2021 Q2 2021 Adjusted EBITDA was US$6.6 million better than Q1 2020 Adjusted EBITDA on sales that were US$156 million lower, due to the comprehensive fixed opera
Slide 7: Travel recovering at different rates around the world
Travel around the world have been recovering at different rates impacted by pace of vaccinations, new cases, and governmental restrictions Domestic Revenue Passenger-kilometers (RPK’s), seasonally adjusted indexed Jan 2020 = 100 Page 7
Slide 8: China and US domestic travel demand increase
China and the United States have seen a marked increase in domestic travel demand, however China contracted in June amidst new virus outbreaks % change in Domestic Revenue Passenger-kilometers (RPK’s) vs. the same month in 2019 The fall in domestic traffic within China for Jan New virus 2021 and Feb
Slide 9: U.S. domestic travel rebounded toward pre-pandemic levels
U.S. domestic travel has rebounded significantly and is quickly approaching pre-pandemic levels Average Daily United States Travel by Week – U.S. Domestic Commercial Flights (Departures) Source: TSA.gov Page 9
Slide 10: Achieved positive Adjusted EBITDA in Q2 2021
Achieved positive Adjusted EBITDA in Q2 2021 driven by the comprehensive actions taken across the business coupled with recovery beginning Achieved positive Adjusted EBITDA of US$11.5 million in Q2 2021 on sales that were 52.2%(1) down to Q2 2019. 1H Adjusted EBITDA was US$(17.0) million on sales th
Slide 11: Gross margin improved to 52.4% in Q2 2021
Gross margin improved to 52.4% in Q2 2021 from 48.7% in Q1 and 33.4% in Q2 2020, and we continue to take actions to offset the pressures from increased raw material pricing and higher freight costs Product costs have increased, driven by higher raw material, labor costs, and general inflation. These
Slide 12: The Company's decisive actions are translating to strong momentum
The Company’s decisive actions are translating to strong momentum in the business Significantly reduced our fixed cost structure with over US$200 million in annualized savings which has allowed us to achieve positive Adjusted EBITDA of US$11.5 million in Q2 2021 despite sales being 52.2%(1) lower th
Slide 13: Singapore established as brand development and sourcing hub
Established Singapore as brand development and sourcing hub, and our new Asia regional headquarters Established a brand development and sourcing hub in Singapore to further align regional product development, brand management and supply chain operations. Built on the Company’s 25-year history in Sin
Slide 14: Divested Speck in July 2021
Divested Speck in July 2021, allowing the North America business to focus on driving higher profitability with its core brands Decision made to sell Speck largely driven by: Allows the North America business to focus on driving core brand growth. Speck was a non-core brand that was reducing overall
Slide 15: Committed to reaching sustainability milestones
Despite the COVID-19 pandemic, we remain committed to reaching our sustainability milestones COVID-19 has reinforced the importance of sustainability in our interconnected world, and we are continuing to advance “Our Responsible Journey” – the Company’s global strategy and commitment to lead the ind
Slide 16: Global sales of products with a sustainable attribute
Despite the COVID-19 pandemic, we remain committed to reaching our sustainability milestones Global sales of products with a sustainable attribute In 1H 2021, approximately 15% of global sales across Samsonite, Tumi, American Tourister, and Gregory were from products with a sustainable attribute, co
Slide 17: New products: Magnum Eco and Proxis
Stepping into the travel recovery with an amazing assortment of new products Travel is coming back, and we are well positioned to capture the demand with exciting collections such as Magnum Eco and Proxis. Both collections exemplify the Company’s commitment to innovation and sustainability. Magnum E
Slide 18: Introducing the IBON collection
As a pioneer in innovation and design, we are happy to introduce our distinctly different collection, IBON. IBON, the perfect blend between innovation and outstanding design, sets new standards for travelling with the family. Opening and closing your IBON suitcase goes smoothly and securely, thanks
Slide 19: Tumi and McLaren collaboration launch
Successful and exciting product launch with collaboration between Tumi and McLaren The new capsule combines cutting-edge technology, innovation and design excellence from two worlds, to deliver luggage, bags, and accessories with race-car resilience. Echoing aerodynamic automotive designs, this coll
Slide 20: Celebrating 111 years of innovation
Samsonite is always devoted to inspiring travelers with the best innovations and is committed to a sustainable future Celebrating 111 years of innovation Page 20
Slide 21: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 21
Slide 22: 1H 2021 Results Highlights
1H 2021 Results Highlights Net sales decrease of 3.2%(1). Gross profit margin increased by 134bp On essentially the same net sales The decreased loss in Adjusted Net Compared to 2019, Q1 sales from prior year as a result of extremely base, increased Adjusted EBITDA Income (Loss) was due mainly to we
Slide 23: Q2 2021 marked improvement compared to Q1 2021
Q2 2021 saw a marked improvement in results compared to Q1 2021 driven by the recovery in sales Net sales improved to US$445 million in Q2 2021 from US$355 million in Q1 2021. Q2 Gross margin percentage improved 2021 to 52.4% in Q2 2021 from 48.7% in Q1 2021. Gross margin dollars improved by US$60 m
Slide 24: Financial Highlights
Financial Highlights Net sales in the first half of 2021 decreased from prior year by 3.2%(1). Net sales recovery has accelerated in recent months, particularly in the U.S. and starting in Europe too. Q2 2021 net sales were down by 52.2%(1) compared to Q2 2019, reflecting improvement from Q1 2021, w
Slide 25: Financial Highlights (cont'd)
Financial Highlights (cont’d) Net debt position of US$1,817 million as of June 30, 2021, with US$1,058 million of cash and cash equivalents and US$2,875 million of debt(1). Liquidity of approximately US$1,185 million provides plenty of cushion to manage through the remainder of the recovery. The Com
Slide 26: Financial Highlights (cont'd)
Financial Highlights (cont’d) Sale of Speck in July for cash proceeds of US$36 million sale price, which will enable us to focus on growing our core brands and drive higher profitability in North America. During the first half of 2021, the Company recognized restructuring charges of US$6.0 million r
Slide 27: Sales up in Asia and North America
Sales were up in Asia where the impact of the pandemic began earlier in 2020 and also in North America which is seeing a strong recovery in 2021 Constant Currency Q1 Q2 1H Q1 Q2 1H Q1 Q2 1H Q1 Q2 1H Growth 0.7% -25.9% 79.3% 3.8% -62.1% 172.7% -21.3% -48.8% 812.5% -11.1% -44.6% 114.1% Constant Curren
Slide 28: Sales recovery vs. 2019 varies by region
The sales recovery compared to 2019 varies by region, with all regions showing positive momentum going into July By region constant currency sales growth vs. 2019 Approximately half of the U.S. Sales recovery in Asia is Many countries within Europe Latin America sales in Q1 2021 population is now fu
Slide 29: Channel mix shifting back toward wholesale and retail
Channel mix is shifting back towards wholesale and retail. Non-travel is a growing share of sales in 1H but travel is recovering much more quickly compared to Q2 last year Comparison of sales by channel Comparison of Travel vs. Non-travel sales (13.9%) (1) (13.3% of Net Sales) (11.9% of Net Sales) 3
Slide 30: Gross margin improved but remains pressured
Gross margin improved but will remain pressured in 2H and into next year due to inflationary impacts. We are taking actions to address this pressure Gross margin bridge from H1 2020 – H1 2021 Improving Gross Margin trend: • Q1 ’21 – 48.7% • Q2 ‘21 – 52.4% • Jun ‘21 – 55.0% The largest gross margin i
Slide 31: Aggressively reduced SG&A costs
The Company has aggressively reduced SG&A costs to position the business for strong profitability as sales continue to recover SG&A within Adjusted EBITDA(1) Fixed SG&A expenses were US$89 million lower than prior year due mainly to actions taken to restructure the business through headcount reducti
Slide 32: Fixed SG&A savings improved Adjusted EBITDA
Fixed SG&A savings initiatives have significantly improved Adjusted EBITDA compared to last year Adjusted EBITDA Bridge H1 2020 – H1 2021 Would have been approximately US$6 million more if not for non-renewal of GSP. US$113.4 million (1)(2) (1) (1)(2) (1) (1)(2) (1) Stated on a constant currency bas
Slide 33: Cash burn improved by US$197 million in 1H 2021
Cash burn(1) improved by US$197 million to US$(92) million in 1H 2021 compared to 1H 2020, reflecting comprehensive cost reduction actions and tight cash controls Half yearly cash burn(1) Quarterly cash burn (US$m): • Q1 ’21 – ($64.6) • Q2 ‘21 – ($27.3) (1) Cash burn is calculated as the total incre
Slide 34: Quarterly Adjusted EBITDA and cash burn
The Company is seeing the benefits of the comprehensive cost reduction actions and an improving sales trend with positive Adjusted EBITDA in Q2 2021 and significantly reduced cash burn(1) compared to Q2 2020 Quarterly Adjusted EBITDA and cash burn(1) Achieved positive Adjusted EBITDA in Q2 2021 and
Slide 35: Intellectual property re-alignment and global tax structure
Completed an intellectual property re-alignment that will lead to a sustainable global tax structure that aligns with the continued evolution of Samsonite’s operations The transfer of the economic rights of certain IP out of Luxembourg to Belgium (for Europe) and to Singapore (for Asia and Americas)
Slide 36: Balance Sheet
Balance Sheet US$m June 30, June 30, $ Chg Jun-21 % Chg Jun-21 Net debt of US$1,816.7 million at 2020 2021 vs. Jun-20 vs. Jun-20 June 30, 2021, which increased by approximately US$185 million since Cash and cash equivalents 1,589.8 1,058.2 (531.6) -33.4% June 30, 2020 due to cash burn(3) Trade and o
Slide 37: Paid down US$325 million of debt and covenant relief
Paid down US$325 million of debt and worked with lenders to get further covenant relief through Q1 2022 and more favorable pricing on the TLB-2 debt Lenders have granted further debt covenant relief, which provides additional cushion as the recovery is underway but taking more time. The definition o
Slide 38: Working Capital
Working Capital US$m June 30, December 31, June 30, $ Chg Jun-21 % Chg Jun-21 Net working capital at June 30, 2021 was 2020 2020 2021 vs. Jun-20 vs. Jun-20 US$161.3 million lower than at June 30, 2020 Working Capital Items driven mainly by carefully managing inventory Inventories $ 575.5 $ 455.9 $ 3
Slide 39: Capex and software additions tightly managed
Capex and software additions continue to be tightly managed well below 1H 2020 spend Capital Expenditure by project type US$m 1H 2020 1H 2021 Majority of capex in H1 2021 was Retail 8.2 2.7 related to required store Product Development / R&D / Supply 7.2 1.6 renovations and improvements as well as t
Slide 40: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 40
Slide 41: Outlook
Outlook We are encouraged by the recent improvements in our sales performance, particularly in the U.S. and more recently Europe, and very pleased to see positive Adjusted EBITDA in Q2. That said, COVID-19 continues to pose challenges with the recent resurgence of cases in various markets and slower
Slide 42: Outlook (continued)
Outlook (continued) Additionally, our gross margin remains under pressure with the Generalized System of Preferences program in the U.S. still not yet renewed, and global freight and raw material costs rising. We are also seeing challenges with shipping delays and port congestion, which could have i
Slide 43: IATA projects strong travel recovery in 2022
IATA projects a strong recovery in travel in 2022, reaching 88% of 2019 levels Global Origin-Destination (O-D) passengers (in billions) January forecast April forecast Pre-covid forecast FY 2023 is projected to be at 105% of 2019 levels, the first year of growth vs. pre-pandemic levels. IATA estimat
Slide 44: Q&A - Travel is coming back
Q&A TRAVEL IS COMING BACK Page 44
Samsonite International — H1 2021 Earnings Presentation on 6ix