Samsonite Group S.a. · HKEX:1910
Samsonite — Q3 2022 Earnings Presentation
38 slides from Samsonite's earnings presentation, Nov 11, 2022
Slide 1: Responsible Journey
> RESPONSIBLE JOURNEY
Slide 2: Disclosure Statement
9) 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
Slide 3: Agenda
S AGENDA O1 O2 OS O04 Business Update Financial Highlights Outlook Q&A
Slide 4: Business Update
BUSINESS UPDATE
Slide 5: Reflecting on our journey so far as we head into the holidays, and into 2023
Reflecting on our journey so far as we head into the holidays, and into 2023 Sams@nite Our team is incredibly energized by our Company’s progress through the first three quarters of 2022. We have navigated through more than two years of disruptions caused by the pandemic, and have achieved some nota
Slide 6: Comparable Q3 2022 sales were higher than pre-pandemic Q3 2019
¢ Comparable Q3 2022 sales) were higher than pre-pandemic Q3 2019! Net sales growth) vs, 2019 20% 0% -20% (37.6%) ~40% (52.2%) -60% Q2 2021 Q3 2021 Q4 2021 Q1 2022 8.0% 4.1% (8.7%) (16.1%) \ ) Q2 2022 Jul-22 Aug-22 Sep-22 * Q3 2022 comparable sales growth improved to +0.6%') vs. Q3 2019 as travel de
Slide 7: Q3 2022 Adjusted EBITDA slightly higher than 2019
Q3 2022 Adjusted EBITDA was slightly higher than 2019 on Reported Net Sales that were US$131 million lower. ($in millions, except growth) Q3 2019 Q3 2021 Q3 2022 Reported Net Sales $921.5 $557.1 $790.9 (1)(2) Net Sales Growth vs. 2019 (37.6%) 0.6% Adj. EBITDA $133.9 $72.2 $134.1 Adj. EBITDA Margin 1
Slide 8: (2) (2) (2) (2) (2) (3) (3) • • • • • • •
(2) (2) (2) (2) (2) (3) (3) • • • • • • • • •
Slide 9: Asia excl. China
Southeast Asia(2) Asia excl. China Australia India South Korea China • • • •
Slide 10: Domestic travel negatively impacted by the Delta variant
Domestic travel was negatively impacted by the Delta variant. • •
Slide 11: LATAM (10.2%) No Amer (10.9%) Europe (18.2%)
LATAM (10.2%) No Amer (10.9%) Europe (18.2%) Mid. East (24.2%) Industry (26.3%) Africa (26.7%) APAC (46.7%)
Slide 12: The recovery runway in the global passenger market remains robust
* The recovery runway in the global passenger market remains robust World Passenger Recovery (2019 = 100) 2020 - 2025 120 100 80 60 40 20 ie} 2020 2021 2022 2023 2024 2025 Source: IATA / OE Passenger Forecast * The global passenger recovery was significant in 2022, but the travel outlook continues t
Slide 13: We increased our advertising spend to fuel future growth
As the strong recovery and profitability trend continued, we increased our advertising spend to fuel future growth Advertising & Promotion Trend $60 5.7%. 6.0% $50 $aa.s 5.0% $40 : 4.0% 3 - 3.0% $32.2 $33.6 3 a $30 $24.1 3.0% & 5 $21.5 5 $20 $18.0 2.0% & $10.7 $10 P| 1.0% $o - qi'21 Q2'21 Q3'21 Q4'2
Slide 14: Leaning into marketing spend in 2H 2022 to drive growth
® Leaning into marketing spend in 2H 2022 to drive growth and capitalize on the continued recovery in travel We launched a fully integrated holiday campaign with a singular brand-elevating identity across North America. GIVE THE GIFT OF where to next? nae SAMSOnite eg 14
Slide 15: Leaning into marketing spend in 2H 2022 to drive growth
Leaning into marketing spend in 2H 2022 to drive growth and capitalize on the continued recovery in travel Asia launched the “UNPACK YOUR WORLD” campaign. na oe UNPACK ile euvionnpe= kK. r jg nl 2] V
Slide 16: Leaning into marketing spend in 2H 2022 to drive growth
® Leaning into marketing spend in 2H 2022 to drive growth and capitalize on the continued recovery in travel BUILT FOR THE JOURNEY — FALL 2022 Son Heung-min Gracie Abrams Anthony Ramos Lando Norris August 22 | 19 Degree September 16 | Tegra-Lite® September 16 | Tegra-Lite® October 13 | McLaren - CX6
Slide 17: Leaning into marketing spend in 2H 2022 to drive growth
® Leaning into marketing spend in 2H 2022 to drive growth and capitalize on the continued recovery in travel REGENT STREET EVENT, LONDON — OCT 2022 In celebration of Lando Norris’ campaign launch, TUMI hosted an exclusive event at the new Regent Street store in London. Son Heung-Min attended to meet
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 19: Q3 2022 Results Highlights
Q N O22 Results Highlights Q3 2019 Q3 2021 Q3 2022 Q3 2019 Q3 2021 Q3 2022 Q3 2019 Q3 2021 Q3 2022 Q3 2019 Q3 2021 Q3 2022 + Net sales increased by US$234 million, * Gross margin decreased by 50bp from Q3 * Adjusted EBITDA increased by + Adjusted Net Income increased or 59.5%), compared to prior yea
Slide 20: Financial Highlights
Financial Highlights * Net sales in Q3 2022 increased from Q3 2021 by 59.5% 2) to US$791 million. Net sales performance in Q3 2022 continued its sequential quarterly improvement compared to 2019, with Q3 2022 comparable net sales up 0.6%) following Q2 2022 that was down by 16.1%), reflecting improve
Slide 21: Financial Highlights (cont'd)
* Financial Highlights (cont’d) * Gross margin decreased by 50bp from Q3 2021 primarily due to brand, country, and channel sales mix. This was partially offset by lower promotional activity and price increases to mitigate higher product, freight and duty costs. * Fixed SG&A expenses for Q3 2022 were
Slide 22: Financial Highlights (cont'd)
* Financial Highlights (cont’d) * Total cash generation of US$37 million for the nine months ended September 30, 2022 despite investing significantly in our inventory by US$208 million from December 31, 2021. * Net debt position improved to US$1,398 million as of September 30, 2022, with US$801 mill
Slide 23: Excluding China, constant currency growth of 104.7% vs. 2021
Excluding China, constant currency growth of 104.7% vs. 2021 and -7.5% vs. 2019. Constant Currency Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Growth 91.6%(1) 50.5%(1) 39.2%(1) 22.2% 46.3% 66.0% 169.7% 187.9%(1) 85.4%(1) 151.9% 150.1% 56.7% Constant Currency Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 vs. 2019 (1)
Slide 24: Adjusted EBITDA by region surpassed pre-pandemic levels in all regions but Asia
6 The Adjusted EBITDA performance in YTD Sep 2022 surpassed pre-pandemic levels both in terms of dollars and margins in all regions but Asia By region Adjusted EBITDA North America Asia Europe Latin America 240 25 $160 $1433 $ $100 $80.2 $ $140 $202.8 $20 $18.8 ¢ $117.8 $200 WY $80 . WY $160 Yy, $67
Slide 25: +$926.4m (+68.3%) EUR -US$45.5 million TRY -US$22.4 million
+$926.4m (+68.3%) (+109.7%) (+131.6%) (+83.3%) (+54.9%) EUR -US$45.5 million TRY -US$22.4 million JPY -US$15.1 million KRW -US$9.3 million INR -US$8.9 million CLP -US$6.1 million Other -US$28.3 million (1) (1)(3) (1)(2) (1) (1)
Slide 26: Net sales by channel and travel vs. non-travel
Comparison of net sales by channel Comparison of Travel vs. Non-travel net sales 38.2% (1)(2) 35.9% (1)(2) 77.7% (1)(2) US$m US$m 70.7% (1)(2) 93.6% (1)(2) (3)
Slide 27: Adjusted EBITDA Bridge YTD Sep 2019 – YTD Sep 2022
Adjusted EBITDA Bridge YTD Sep 2019 – YTD Sep 2022 US$247.6 million Focused on maintaining as much of this savings as possible as the business continues to recover. 13.0% 16.0% of sales Very small impact of sales to profitability due to GM%. (1)(2) (1) (1)(2) (1) (1)
Slide 28: Company has continued to maintain fixed SG&A savings
* The Company has continued to maintain fixed SG&A savings from our cost reduction initiatives SG&A within Adjusted EBITDA $1,200 $1,149 + YTD Sep 2022 fixed SG&A expenses were US$234 million lower than 2019, but US$53 million higher than prior year due mainly to growth in the business, temporary co
Slide 29: Positive YTD cashflow despite investing in inventory
Positive YTD cashflow of US$37.3 million despite investing in our inventory by US$208.3 million from December 31, 2021.
Slide 30: Balance sheet summary
US$m September 30, December 31, September 30, $ Chg Sep-22 % Chg Sep-22 2021 2021 2022 vs. Sep-21 vs. Sep-21 • Cash and cash equivalents 1,153.5 1,324.8 801.0 (352.5) -30.6% Trade and other receivables, net 179.0 206.2 285.1 106.2 59.3% Inventories, net 332.6 348.4 556.7 224.0 67.3% Other current as
Slide 31: Working Capital Items
US$m September 30, September 30, December 31, September 30, $ Chg Sep-22 % Chg Sep-22 • 2019 2021 2021 2022 vs. Sep-21 vs. Sep-21 Working Capital Items Inventories $ 622.9 $ 332.6 $ 348.4 $ 556.7 $ 224.0 67.3% Trade and Other Receivables $ 390.6 $ 179.0 $ 206.2 $ 285.1 $ 106.2 59.3% Trade Payables $
Slide 32: We continue to build our inventory position to support the recovery in travel
& We continue to build our inventory position to support the ongoing recovery in travel despite the challenges with shipping delays and factory capacity constraints Inventory balance evolution $700 $615.1 $626.2 $622.9 $600 8587.3 $556.7 $500 $468.8 $434.9 $390.4 $406.2 $400 $332.6 9348.4 $300 $200
Slide 33: Capital Expenditures
US$m YTD Sep 2021 YTD Sep 2022 • Retail 4.4 8.8 Product Development / R&D / Supply 0.7 15.2 Information Services and Facilities 0.6 2.7 • Other 0.0 1.1 Total Capital Expenditures 5.8 27.8 Software 2.0 5.5 Total Capital Expenditures and Software 7.8 33.3
Slide 34: Outlook
OUTLOOK
Slide 35: Outlook
” Outlook * As travel continues to rebound, we are well positioned to grow net sales at a fundamentally higher operating margin as shown in our YTD Sep 2022 results. * We remain focused on maintaining our gross margins at historical levels through reduced discounting and promotional activity; price
Slide 36: Outlook (cont'd)
Outlook (cont’d) * We intend to continue to increase our investment in marketing spend in Q4 2022 and into 2023 to capitalize on the continued SamsG anite recovery in travel. * We will maintain disciplined expense management on our fixed . AMERICAN SG&A expenses, and expect certain fixed SG&A saving
Slide 37: Q&A
Q&A
Slide 38: Thank You
THANK YOU.