Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — H1 2017 Earnings Presentation
33 slides from Samsonite's earnings presentation, Aug 24, 2017
Slide 1: 2017 Interim Results
2017 Interim Results
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 Strategy, Outlook and Key Initiatives Q&A Page 3
Slide 4: 1st Half 2017 Results Highlights
1st Half 2017 Results Highlights Record 1st Half Net Sales of US$1.6 billion +31.8% +39.2% +27.2% 0.0% Constant Constant Constant Constant Currency Currency Currency Currency Growth Growth Growth Growth Constant currency net sales Gross margin up 300bp from Adjusted EBITDA margin Adjusted Net Income
Slide 5: 1st Half 2017 Business Overview
1st Half 2017 Business Overview Strong Strong constant currency net sales growth in all Advertising and promotion spend growth in all regions: of US$99.5 million (6.3% of sales) is regions North America: +53.0% (+7.4% excluding Tumi) 51.0%, or US$33.6 million, higher Asia: +19.8% (+3.8% excluding Tu
Slide 6: Strong net sales growth partly offset by slight currency translation pressure
Strong net sales growth partly offset by slight currency translation pressure Net Sales Bridge – 1H 2016 to 1H 2017 Organic net sales growth of US$90.8 million(1), or 7.5%(1) (2), coming from: Europe: +11.5%(1) -0.6% North America: +7.4%(1) (2) Asia: +3.8%(1) +24.2% Latin America: +19.4%(1) +7.5% In
Slide 7: Adjusted Net Income Bridge
Adjusted Net Income Bridge Reflects US$17.5 Reflects US$16.0 million additional million of advertising investment in spend for Tumi advertising year- brand in 1H 2017 over-year. compared to US$7.2 million in 1H 2016. Note: The main items that are adjusted out of net income when calculating Adjusted
Slide 8: 1st Half 2017 Results Highlights Excluding Tumi Results
1st Half 2017 Results Highlights Excluding Tumi Results +7.5% +9.5% +27.1% +0.7% Constant Constant Constant Constant Currency Currency Currency Currency Growth Growth Growth Growth Constant currency net sales Gross margin increased Advertising as a percentage Adjusted EBITDA margin growth of US$90.8
Slide 9: eBags acquisition will accelerate growth in the E-commerce channel and strengthen digital capabilities
eBags acquisition will accelerate growth in the E-commerce channel and strengthen digital capabilities eBags is a leading online retailer of bags and related accessories for travel, providing consumers with a diverse offering of travel bags and accessories including luggage, backpacks, handbags, bus
Slide 10: Tumi Acquisition Integration Update
Tumi Acquisition Integration Update Integration going largely as planned one year after closing. SAP conversion completed in May 2017. Accelerated advertising vs. original plan by approximately US$18 million (US$10 million in 2016 and US$8 million in 1H 2017). Assumed direct control from distributor
Slide 11: 1st Half 2017 Tumi Results Highlights
1st Half 2017 Tumi Results Highlights* Record 1st Half Net Sales of US$293 million Constant currency net sales Gross margin increased by Advertising spend more than Adjusted EBITDA margin growth of 11.4% includes the 380bp due to the impact of doubled from prior year decreased by 80bp mainly due pos
Slide 12: Tumi Net Sales by Region
Tumi Net Sales by Region North America Asia Europe Strong constant currency net sales growth of Excluding distributor buybacks and the 31 Constant currency net sales growth of 12.2% in 7.7% in North America was driven by 16 net stores that were included in those buybacks, Europe was driven by retail
Slide 13: North America – Tumi driving significant increase in sales and profitability
North America – Tumi driving significant increase in sales and profitability. Net sales increased by 53.0%(1) including Tumi sales of US$183.9 million. Excluding Tumi sales, growth was 7.4%(1), with stronger growth in Q2 of 14.3%(1) (5.3%(1) excluding additional sales from eBags) compared to -0.9%(1
Slide 14: Asia – Strong net sales and profit growth led by the addition of Tumi
Asia – Strong net sales and profit growth led by the addition of Tumi and supported by moderate growth in the organic business. First half constant currency net sales growth of 19.8% (1) includes Tumi sales of US$75.7 million. Excluding Tumi, sales growth of 3.8%(1) was led by China +8.8%(1), Japan
Slide 15: Europe – Strong net sales growth of 24.0% driven by solid increase in organic sales and Tumi
Europe – Strong net sales growth of 24.0%(1) driven by solid increase in organic sales and the inclusion of Tumi. Constant currency net sales growth of 24.0% includes US$32.5 million of Tumi net sales. Excluding Tumi, sales growth was 11.5% on a constant currency basis led by Germany +15.2%(1), Russ
Slide 16: Latin America – Strong growth in constant currency net sales and profitability
Latin America – Strong growth in constant currency net sales and profitability Net sales increased 19.4%(1) on strong growth in Chile +15.5%(1), Brazil +67.5%(1), and Mexico +6.3%(1)(2). Strong growth of 36.6%(1) in direct-to-consumer channels with retail up 35.5%(1) with same store comp growth of 1
Slide 17: 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 17 (2) UK includes Ireland.
Slide 18: Continued brand penetration drove net sales growth in most emerging markets
Continued brand penetration drove constant currency net sales growth in most emerging markets with combined constant currency growth of 13.1% excluding Tumi (1) (1) Mexico, excluding export sales Page 18
Slide 19: Direct-to-consumer channel sales accelerated with the acquisitions of Tumi and eBags
Direct-to-consumer channel sales accelerated with the acquisitions of Tumi and eBags(2) 1H 2017 net sales by channel (2) + = Wholesale Retail D-T-C e-Commerce Excluding Tumi, direct-to-consumer net sales growth was 20.2%(1), with: Strong retail net sales growth of 10.2%(1) driven by same store comps
Slide 20: Diversified brand portfolio generated continued net sales growth
Diversified brand portfolio generated continued net sales growth Strong growth in Samsonite with net sales up 7.0% on a constant Net Sales growth by brand currency basis: Europe +10.9%(1), North America +4.9%(1), Asia +4.4%(1), and Latin America +22.4%(1). Tumi contributed US$296.9(2) million of net
Slide 21: Key Product Assortment
Key Product Assortment North America Europe Asia North America Asia Europe Latin America Page 21
Slide 22: Key Product Assortment
Key Product Assortment Page 22
Slide 23: Key Product Assortment
Key Product Assortment Page 23
Slide 24: 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 growth of 6.5%(1), excluding Tumi. Non-travel net sales increased from 32.4% of total net sales in 1H 201
Slide 25: 51.0% increase in global advertising spend to drive continued sales growth
51.0% increase in global advertising spend to drive continued sales growth Indicates % of net sales Total advertising spend increased by US$33.6 million, or 51.0%, focused mainly on boosting consumer awareness of Tumi and other newer brands within the regions and non-travel categories within the Sam
Slide 26: Targeted Brand Advertising
Targeted Brand Advertising American Tourister – Mexico digital ad Samsonite – United States digital ad Tumi Print Ad – Japan Kamiliant– Philippines American Tourister – U.K. American Tourister – Australia Samsonite – Europe Page 26 Lipault– Print Ad Latin America
Slide 27: Financial Highlights
Financial Highlights Net sales increased to a record 1st half level of US$1.6 billion, with net sales growth of 7.5%(1) excluding Tumi, and an additional US$292.5 million of net sales from Tumi, which grew by 11.4%(2). Adjusted Net Income was flat year-over-year as the additional Tumi profits were o
Slide 28: Effective tax rate was mainly impacted by interest expense and non-recurring items
Effective tax rate was mainly impacted by interest expense and non-recurring items 1H 2016 Effective Tax Rate 27.3% Samsonite normal year-over-year items impacting ETR: -1.1% Impact of Tumi on ETR: 2.0% Tumi acquisition had a net 80bp benefit on overall effective tax rate Impact of interest expense
Slide 29: Balance sheet appropriately leveraged to finance Tumi acquisition
Balance sheet appropriately leveraged to finance Tumi acquisition US$m June 30, December 31, June 30, $ C hg J un- 17 % C hg J un- 17 Net debt increased by US$46.0 million in 2016 2016 2017 v s . J un- 16 v s . J un- 16 the first half of 2017. Cash flows from Cash and cash equivalents (1) 944.5 368.
Slide 30: Efficiently managing working capital
Efficiently managing working capital Working capital continued to be managed efficiently at US$m June 30, June 30, $ Chg Jun-17 % Chg Jun-17 11.7% of net sales at June 30, 2017, favorable to 2016 2017 (1) vs. Jun-16 vs. Jun-16 targeted 14% level. Excluding Tumi, working capital Working Capital Items
Slide 31: Capital Expenditures
Capital Expenditures Capital Expenditure by project type 1H 2017 retail capex consisted of new stores and remodels in North America of US$7.4 US$m 1H 2016 1H 2017 million, Asia of US$3.7 million, Europe of US$4.0 million and Latin America of US$1.4 million. Retail 13.7 16.5 Capex on Product Developm
Slide 32: Company Strategy
Company Strategy The Company aims to increase shareholder value through sustainable revenue and earnings growth and free cash flow generation. In order to achieve this objective, the Company has adopted the following principal strategies: Continue to develop the Company into a well-diversified multi
Slide 33: Outlook and Key Initiatives
Outlook and Key Initiatives The Group expects continuing benefits from steady growth in travel and tourism worldwide. “Destinations worldwide received 369 million international tourists (overnight visitors) in the first four months of the year, 21 million more than in the same months of 2016 (+6%)”(
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