Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — FY2018 Earnings Presentation
39 slides from Samsonite's earnings presentation, Mar 13, 2019
Slide 1: Annual Results 2018
Sams@nite AMERICAN TOURISTER # WE CAR THE WORI ANNUAL RESULTS 2018 MARCH 13, 2019 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 or b
Slide 3: Agenda
Agenda Results Highlights Business Overview Financial Highlights Outlook and Strategy Q&A Page 3
Slide 4: Results Highlights
Results Highlights Tumi international expansion Re-invigorating American Tourister Europe - Banasea Mall, Bucharest, Romania Direct-to-consumer growth Expanding Environmental and Social Governance (ESG) Integration 2H Economic Headwinds Delivered record net sales of US$3.8 billion in 2018 Page 4
Slide 5: Tumi continued to perform ahead of expectation, led by international expansion
Tumi continued to perform ahead of expectation, led by international expansion Constant Currency net sales growth of Tumi North America Asia Europe Latin America Total Group Began direct +4.0% +29.5% +10.3% +11.9% distribution Asia - Grand Gateway, Shanghai, China Tumi.com – launched in key markets
Slide 6: Re-energized the American Tourister brand in Asia and Europe and the Americas
Re-energized the American Tourister brand in Asia and drove double-digit growth in Europe and the Americas Constant Currency net sales growth of American Tourister North America Asia Europe Latin America Total Group +16.1% +8.9% +39.2% +51.1% +16.5% Popular new product introductions High profile mar
Slide 7: Increased our direct-to-consumer presence through e-commerce and retail expansion
Increased our direct-to-consumer (“DTC”) presence through e-commerce and targeted bricks-and-mortar retail expansion Constant Currency net sales growth DTC e-commerce Retail Total Direct-to-Consumer 31.3% 11.6% 16.5% HighSierra.com Tumi Store – Pine Street, Seattle, Washington eBags.com Page 7 Lipau
Slide 8: Economic Headwinds
Economic Headwinds Uncertainty in China and U.S. due to trade negotiations and increased tariffs in the U.S. Weakened consumer sentiment in certain key markets. South Korea – Geopolitical tensions China – Concern over U.S. trade relations Temporary store closures in Europe during peak retail sales w
Slide 9: Expanding Environmental and Social Governance (ESG) program
Expanding Environmental and Social Governance (ESG) program Initiated a global sustainability approach that engages with the Company's stakeholders and is focused on: Global carbon reduction Product innovation - launched 30+ collections incorporating sustainable materials such as recycled plastic bo
Slide 10: Strong growth across our entire portfolio of brands
Strong growth across our entire portfolio of brands All other +11.6%(1) +3.1%(1) Our +11.9%(1) Brands +16.5%(1) Strong sales growth is underpinned by robust growth in world travel and supported by product innovation and marketing (1) Sales growth stated on a constant currency basis. Page 10
Slide 11: Agenda
Agenda Results Highlights Business Overview Financial Highlights Outlook and Strategy Q&A Page 11
Slide 12: 2018 Business Overview
2018 Business Overview Record Net Sales of US$3.8 billion +8.4% +9.0% +5.7% +12.2% Constant Constant Constant Constant Currency Currency Currency Currency Growth Growth Growth Growth Sales growth of US$306.1 Gross margin was up 40bp Adjusted EBITDA increased Adjusted Net Income was up 30bp as millio
Slide 13: Net Sales Bridge – 2017 to 2018
Strong net sales growth in the traditional core business and substantial international expansion of the Tumi brand. Excluding Tumi brand and four additional Net Sales Bridge – 2017 to 2018 months of eBags in 2018, net sales growth was US$167.4 million(1), or 6.0%(1), coming from: +11.9%(1) Asia: +6.
Slide 14: Strong net sales growth in all key brands
Strong net sales growth in all key brands Net Sales growth by brand 3.1%(1) net sales growth in Samsonite with Europe +3.3%(1), North America +2.5%(1), Asia +2.1%(1) and Latin America +16.0%(1). Tumi net sales growth of 11.9%(1) with Asia +29.5%(1), North America +4.0%(1) and Europe +10.3%(1). Ameri
Slide 15: Exciting New Products
Exciting New Products Alpha 3 Collection The Alpha 3 Collection, made from ultra-durable FXT® ballistic nylon. Our iconic business and travel pieces bring together innovative design, superior performance, and best in class functionality. Encompass Women’s Convertible Brief Backpack Encompass Women’s
Slide 16: Tumi brand net sales growth of 11.9% led by international expansion
Tumi brand net sales growth of 11.9%(1) led by international expansion. Excluding the impact of our decision to discontinue Direct-to-consumer channels +61.5%(1), with: Direct-to-consumer channels +20.4%(1), with: sales to customers identified as trans-shippers, DTC e-commerce +323.7%(1); DTC e-comm
Slide 17: Net sales growth in 1st half of 2018 with decelerated 2nd half
Strong net sales growth of 12.9%(1),(2) in the 1st half of 2018, with decelerated growth of 4.7% in the 2nd half. (2) 2018 Net Sales Growth by Quarter (1) (1) (1) Net sales growth in Q1 and Q2 of 2018 include additional months sales of eBags (acquired in May 2017) compared to 2017. Excluding eBags,
Slide 18: Full year net sales growth despite 2nd half slowdown
Full year net sales growth of 8.4%(1) despite 2nd half slowdown driven by a few markets. 1H & 2H 2018 Net Sales Growth Rates(1) (2) Uncertainty in the market Weak consumer sentiment Retail environment Chile is suffering from weak due to trade negotiations amid concerns about trade continues to be ch
Slide 19: North America – Net sales increased by 6.5%
North America – Net sales increased by 6.5%(1) (+3.9%(1) excluding eBags) while expanding Adjusted EBITDA margin. Net Sales by Channel: Net sales growth in the Wholesale channel of 1.8%(1). Excluding the impact of our decision to discontinue sales of Tumi products to customers identified as trans- s
Slide 20: Asia – Net sales increased by 10.2%
Asia – Net sales increased by 10.2%(1), led by India, Japan, Hong Kong(2) and China. Net Sales by Channel: Net sales growth of 6.1%(1) in the Wholesale channel. Net sales growth of 27.2%(1) in the Direct-to-consumer channel is partly due to the full year impact of taking direct control of Tumi distr
Slide 21: Europe – Net sales increased by 8.6%
Europe – Net sales increased by 8.6%(1), driven by American Tourister and retail expansion. Net Sales by Channel: Net sales growth of 4.7%(1) in the Wholesale channel. 15.0%(1) net sales growth in the Direct-to-consumer channel is driven by: Retail net sales growth of 13.0%(1) driven by same store c
Slide 22: Latin America – Net sales increased by 5.5%
Latin America – Net sales increased by US$18.0 million, or 15.5%(1), led by Mexico, Brazil and Argentina. Net Sales by Channel: Wholesale channel net sales growth of 15.5%(1). Net sales growth of 15.4%(1) in the direct-to-consumer channel driven by: Retail net sales growth of 12.7%(1) with 29 net ne
Slide 23: Constant currency net sales growth in key markets
Constant currency net sales growth in key markets(1) 3.8% excluding eBags (2) (3) (3) (3) (3)(4) (3) (1) The geographic location of the Group’s net sales generally reflects the country/territory from which its products were sold and does not necessarily indicate the country/territory in which its en
Slide 24: Continued brand penetration drove growth in emerging markets
Continued brand penetration drove constant currency net sales growth in emerging markets with combined constant currency growth of 20.3%(2) (1) (1) (1) (1) In integrating the Tumi business into the Group’s European business, there have been changes made to the legal entity in which sales are being r
Slide 25: Direct-to-consumer increased from 33.4% to 35.9% of total net sales
Direct-to-consumer increased from 33.4% to 35.9% of total net sales year over year. Net Sales growth by channel(1) DTC e-commerce net sales +31.3%(2) (+28.4%(2) excluding eBags) Samsonite.com Gregory.com Indicates proportion of net sales Retail net sales +11.6%(2) 84 net new stores in 2018; Full yea
Slide 26: Advertising spend as a percentage of net sales was consistent with prior year
Advertising spend as a percentage of net sales was consistent with prior year. Indicates % of net sales Total advertising spend increased by US$15.3 million, or 7.4%, focused mainly on boosting consumer awareness of the Tumi and American Tourister brands and non-travel categories for the Samsonite b
Slide 27: Targeted Brand Advertising
Targeted Brand Advertising Page 27
Slide 28: Agenda
Agenda Results Highlights Business Overview Financial Highlights Outlook and Strategy Q&A Page 28
Slide 29: Financial Highlights
Financial Highlights Net sales increased to a record level of US$3.8 billion, with net sales growth of 8.4%(1), or 7.5%(1) excluding eBags which was acquired in May 2017. Adjusted Net Income increased by US$34.0 million, or 13.0%, due mainly to Adjusted EBITDA growth of US$33.4 million as well as a
Slide 30: Financial Highlights (cont.)
Financial Highlights (cont.) Net working capital efficiency of 13.6% as of December 31, 2018 is now back in line with 14% target range. Effective April 25, 2018, the Group successfully completed the refinancing of its Senior Credit Facilities reducing annual cash interest expense by approximately US
Slide 31: Financial Highlights (cont.)
Financial Highlights (cont.) Capital expenditures of US$100.6 million in 2018 was largely focused on the Group’s continuing strategy to pursue targeted retail expansion and store modifications and lead the industry in new product innovations. The operational effective tax rate was 25.2% in 2018 comp
Slide 32: Profit attributable to equity holders excluding one-time items
Excluding one-time items in 2017 and 2018, profit attributable to equity holders increased by US$53.3 million, or 23.9%, from strong operating income. +23.9% +19.1% 2017 included US$53.3 acquisition costs million associated with the excluding the eBags acquisition impact of tax. and Tumi distributor
Slide 33: Balance Sheet
Balance Sheet US$m December 31, December 31, $ C hg D e c - 18 % C hg D e c - 18 2017 2018 v s . D e c - 17 v s . D e c - 17 Net debt decreased by US$100.9 million in Cash and cash equivalents 344.5 427.7 83.2 24.2% 2018. Cash flows from operations were Trade and other receivables, net 411.5 420.9 9
Slide 34: Working Capital
Working Capital Working Capital (US$M) Working capital efficiency of 13.6% of net sales (1) at December 31, 2018, while 120bp higher than US$m December 31, December 31, $ Chg Dec-18 % Chg Dec-18 prior year, has improved from being 230bp higher 2017 2018 vs. Dec-17 vs. Dec-17 at June 30, 2018. Workin
Slide 35: Capital Expenditures
Capital Expenditures 2018 retail capex consisted of new stores and Capital Expenditure by project type remodels in Asia of US$18.2 million, Europe of US$16.4 million, North America of US$12.0 US$m 2017 2018 million and Latin America of US$3.9 million. Capex on Product Development / R&D / Supply Reta
Slide 36: Agenda
Agenda Results Highlights Business Overview Financial Highlights Outlook and Strategy Q&A Page 36
Slide 37: Outlook and Company Strategy
Outlook and Company Strategy “UNWTO estimates that worldwide international tourist arrivals (overnight visitors) increased 6% to 1.4 billion in 2018, clearly above the 3.7% growth registered in the global economy.”(1) The Company aims to increase shareholder value through sustainable revenue and ear
Slide 38: Key Initiatives
Key Initiatives Continue to rapidly expand Tumi’s brand presence in international markets. Monitor sales trends with focus on increasing Adjusted EBITDA margin Improve the profitability of the eBags business. Increase bricks-and-mortar retail profitability while continuing targeted retail expansion
Slide 39: Agenda
Agenda Results Highlights Business Overview Financial Highlights Outlook and Strategy Q&A Page 39
Samsonite International — FY2018 Earnings Presentation on 6ix