Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — FY2014 Earnings Presentation
62 slides from Samsonite's earnings presentation, Mar 17, 2015
Slide 1: Samsonite International S.A. 2014 Results
\ ~ — High Sierra = Gregory be Samsonite American Tourister Hartmann Samsonite International S.A. Was mM. 2014 snus: March 17, 2015 E ol
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 Overview Outlook and Strategy for 2015 Q&A Page 3
Slide 4: 2014 Results Highlights
2014 Results Highlights Constant currency net sales growth of 17.3% +13.9% excluding FX loss(1) and stock option expenses. +17.3% growth Constant Currency Indicates % of sales Indicates % of sales Results include net sales of US$91.6m for Speck, US$12.6m for Gregory and US$5.5m for Lipault. Excludin
Slide 5: Key Financial Highlights
Key Financial Highlights Net Sales: Net sales increased by 17.3% on a constant currency basis to a record US$2,351 million. Currency fluctuation had a negative impact of approximately US$40 million on year-over-year sales, driven mostly by the devaluation of the Chilean Peso (US$8.7 million), Russia
Slide 6: Key Financial Highlights
Key Financial Highlights Adjusted EBITDA: Adjusted EBITDA is up 13.8% driven by sales growth in all regions. Adjusted EBITDA margin decrease is due mainly to: Impact of acquisitions (approximately -40bp); Temporary reduction in Latin America’s Adjusted EBITDA margin from reduced gross margins and ra
Slide 7: Sales and EBITDA Trend
Sales and EBITDA Trend 2010 to 2014 Sales CAGR of 17.9% and EBITDA CAGR of 18.9% Page 7
Slide 8: Agenda
Agenda Results Highlights Business Overview Financial Overview Outlook and Strategy for 2015 Q&A Page 8
Slide 9: Business Highlights
Business Highlights Record net sales performance underpinned by robust growth in world travel and supported by product innovation and marketing. All regions contributing strong year-over-year growth on a constant currency basis. Approximately 1,138 million tourists travelled abroad in 2014, up 51 mi
Slide 10: Strong Sales Growth in All Regions
Strong Sales Growth in All Regions Net Sales Growth by Region Continued strong constant currency growth in Asia led by China +18.7%, South Korea +12.8%, India +19.9% and Japan +32.3% (24.5% excluding Gregory), driven mainly by American Tourister, Samsonite Original and Samsonite Red. Excluding acqui
Slide 11: Asia – Continued strong growth and profitability
Asia – Continued strong growth and profitability led by China, South Korea, India and Japan(1) On a constant currency basis, Asia net sales are up 18.0%. Excluding acquisitions, constant currency growth of 17.0% was driven by: Strong sales growth in direct-to-consumer channels coming from +7.8%(1) s
Slide 12: Key Asia Markets - Continued strong growth
Key Asia Markets - Continued strong growth in all key markets(1) Strong China sales growth of 18.7%(1) driven by American Tourister, Samsonite Original and Samsonite Red. Solid growth in the direct-to- consumer channels is the result of 6.7%(1) retail comps, 13 net new stores and direct-to-consumer
Slide 13: North America – Continued strong growth in a mature and competitive market
North America – Continued strong growth in a mature and competitive market, bolstered by acquisitions Net sales growth of 22.9%(1). Excluding acquisitions, net sales increased 7.3%(1). Sales growth, excluding acquisitions, were driven by 4.9% increase in U.S. wholesale sales due to sell-throughs out
Slide 14: Europe – Strong sales growth of 10.4% on a constant currency basis
Europe – Strong sales growth of 10.4% on a constant currency basis Excluding the impact of acquisitions, constant currency sales growth was 9.3%, led by Germany (+10.6%)(1), Italy (+12.3%)(1), UK (+12.2%)(1), and Turkey (+34.9%)(1). Strong growth in direct-to-consumer channels with retail up 19.0%(1
Slide 15: Latin America – Strong constant currency sales growth of 15.7%
Latin America – Strong constant currency sales growth of 15.7% with temporary decrease in profitability Sales increased 15.7%(1) on strong growth in Brazil (+105.0%)(1), Mexico (+14.6%)(1)(2) and Chile (+8.1%)(1). Excluding approximately US$6.0 million sales of obsolete inventory related to the tran
Slide 16: Sales in Key Markets
Sales in Key Markets Strong constant currency growth in all key markets Page 16 * Includes Macau
Slide 17: Sales in Emerging Markets
Sales in Emerging Markets Continued brand penetration driving constant currency growth in all emerging markets, except Malaysia Soft market conditions immediately following the two Malaysia Air incidents. (1) Page 17 (1) Mexico, excluding export sales.
Slide 18: Strong Sales Growth in Key Brands
Strong Sales Growth in Key Brands Net Sales Growth by Brand Continued growth in Samsonite across all regions with net sales up 10.2% on a constant currency basis: Asia +15.4%(1), North America +9.0%(1), Europe +6.0%(1), and Latin America +17.5%(1) Strong growth in Asia driven by deeper penetration o
Slide 19: Samsonite – Asia
Samsonite – Asia Key Product Assortment Cosmolite Fashionaire Torus Pro-DLX 4 Locus Inova Marshmallow Mover Red - Newyorker Red - Liebe Canimals Engenero Oval Red - Mondo Page 19
Slide 20: Samsonite – North America
Samsonite – North America Key Product Assortment Spin Tech Silhouette Sphere Lift2 Hardside Ripstop Rolling Columbian Xenon2 PFT Leather Briefcase Duffle Flapover Ziplite Briefcast Tectonic PFT Hyperspace Backpack Andante Wheeled Duffle Fiero Page 20
Slide 21: Samsonite – Europe
Samsonite – Europe New Product Assortment Urban Arc Backpack Lite-Shock Disney licensed products Cosmolite 2.0 Neopulse GT Supreme Bailhandle GT Supreme Backpack S’Cure Spark Page 21 B-Lite
Slide 22: Samsonite – Latin America
Samsonite – Latin America Key Product Assortment Xenon II Metropolis Torus Fiero Puzzle Cosmolite Jumbo Glide Lightcase I-Lite Firelite Silhouette B-Lite Sphere Ember Locus Page 22
Slide 23: American Tourister – Asia
American Tourister – Asia Key Product Assortment HS MV+ Citi-Pro Backpack Cube Pop Bon Air Sky AT Speedair Spot-lite IV Page 23
Slide 24: American Tourister – North America
American Tourister – North America Key Product Assortment ILite X’Treme Meridian ILite 360 XLT Supreme Atmosphera Star Wars Licensed Product Disney Licensed Product Page 24
Slide 25: American Tourister – Europe
American Tourister – Europe Key Product Assortment Vivotek Lightway Lock‘n Roll Page 25 San Francisco
Slide 26: 2014 Acquisitions: Lipault
2014 Acquisitions Lipault is a youthful, vibrant and chic French luggage brand known for its functional and fashionable designs. Acquired all of the outstanding capital stock on April 1, 2014 for approximately €20 million in cash (approximately US$28 million). Extends the Company’s brand portfolio t
Slide 27: Key Product Assortment
Key Product Assortment Plume Business Case Wheeled Lady Plume Weekend Bag Wheeled Lady Plume Weekend Bag Originale Plume Spinner Lady Plume Handbag Pliable Pliable Upright Upright Page 27
Slide 28: 2014 Acquisitions: Speck
2014 Acquisitions Speck produces a diverse range of sleek, stylish, and functionally innovative products that provide superior military-grade protection for mobile devices across multiple brands and is particularly well-known for its “slim protection” designs such as the iconic CandyShell “hard-soft
Slide 29: Key Product Assortment
Key Product Assortment CandyShell CandyShell CandyShell CandyShell MightyShell GRIP INKED CARD iGuy Page 29 SeeThru StyleFolio
Slide 30: 2014 Acquisitions: Gregory
2014 Acquisitions Gregory Mountain Products (“Gregory”) is an iconic technical outdoor backpack brand that is known as a pioneer in its field and is well-respected by active outdoor and adventure enthusiasts. Gregory is also a popular brand for lifestyle products in Japan. The purchase of substantia
Slide 31: Key Product Assortment
Key Product Assortment Sunrise Tote All Day Stout Baltoro Offshore Day Deva Amber Quick Pocket Metro Messenger Jade Series Switch Sling Tempo 3 Z Series Kletter Day Sundowner Shoulder Pace 3 Page 31
Slide 32: Progress on Hartmann
Progress on Hartmann All core classic collections have been redesigned to ensure product aesthetic and quality are consistent with loyal and premium consumer expectations. Designed and launched new, lightweight and modern travel collections in North America and Asia that appeal to a broader consumer
Slide 33: Flagship Hartmann Stores
2 Flagship Hartmann Stores Hartmann – Ginza Flagship, Tokyo, Japan Page 33
Slide 34: Key Product Assortment
Key Product Assortment Intensity Belting Minimalist 7R Innovaire Tweed Belting Belting Continental Wallet Vigor Belting Wristlet Heritage Page 34 LineAire
Slide 35: Progress on High Sierra
Progress on High Sierra Leveraging the brand in North America, Asia and Europe with each region developing new products consistent with the brand image to meet the needs of the consumer in each market. Brand has launched in Asia, where it has grown from US$5.5 million in 2013 to US$11.7 million in 2
Slide 36: Key Product Assortment
Key Product Assortment Tech Hydration Lifestyle Collection BTS Collection XBT Rock (Asia) Collection Ski Boot Bag Classic 2 Hiking Collection Tactic (Asia) Wheeled UFO (Asia) Duffle (Asia) Tech 2 Hiking Collection Page 36 Ultimate Access 2.0 Wheeled Duffle
Slide 37: Strong Sales Growth in Travel and Casual Product Categories
Strong Sales Growth in Travel and Casual Product Categories Net Sales Growth by Product Category Travel remains our largest product category and traditional strength with all regions contributing to growth of 10.9%(1). Casual category net sales rose 25.1%(1) driven by the acquisition of Gregory and
Slide 38: Continued Expansion in Points of Sale
Continued Expansion in Points of Sale Net new wholesale points of sale coming largely from: Approximately 2,500 new POS in North America due to the inclusion of Gregory in 2014 as well as an increase in the number of sporting goods stores selling High Sierra and additional Best Buy doors selling Sam
Slide 39: Hartmann Stores Opened in the 2nd Half of 2014 in Asia
6 Hartmann Stores Opened in the 2nd Half of 2014 in Asia Hartmann – Ginza Flagship, Japan Hartmann – Beijing Lufthansa, China Hartmann – Seoul Cheongdam Flagship, South Korea Hartmann – Taichung Top City, Taiwan Page 39
Slide 40: Hartmann Stores Opened in the 2nd Half of 2014 in North America
5 Hartmann Stores Opened in the 2nd Half of 2014 in North America Hartmann – King of Prussia, PA Hartmann – Charlotte, NC Hartmann – Madison Avenue, New York City Page 40
Slide 41: Expanding Multi-Brand Store Concept
Expanding Multi-Brand Store Concept JS Trunk & Co. – Bursa Korupark Mall, Bursa, Turkey JS Trunk & Co. – Westfield, UK House of Samsonite – Coex Mall, Seoul, South Korea JS Trunk & Co. – Bay Plaza, New York Page 41
Slide 42: Lipault Acquisition Included Stores
Lipault Acquisition Included 4 Stores Lipault – Rennes, Paris, France Lipault – Madeleine, Paris, France Page 42 Lipault – Mozart, Paris, France
Slide 43: Retail Expansion in Latin America
Retail Expansion in Latin America Samsonite - Mall Sante Fe, Medellin, Colombia Samsonite – Jardins, Sao Paulo, Brazil Samsonite - Mall Unicentro, Bogota, Colombia Samsonite - Mall Santa Fe, Mexico City, Mexico Samsonite - Mall Tesoro, Medellin, Colombia Samsonite - Mall Andino, Bogota, Colombia Pag
Slide 44: Selection of Other Retail Stores Opened in the 2nd Half of 2014
Selection of Other Retail Stores Opened in the 2nd Half of 2014 Samsonite – Budapest Allee Mall 2, Hungary Samsonite – Grand Kawanua City, Indonesia Samsonite – Capucines, France Samsonite – Mirabel, Quebec, Canada Samsonite – Gotheburg, Sweden Page 44 American Tourister – Marina Square, Singapore
Slide 45: 12% Increase in Advertising Spend
12% Increase in Advertising Spend Advertising Spend Advertising spend increased 12.0% from US$129.2 million in 2013 to US$144.7 million in 2014. Advertising spend as a percentage of sales is down slightly from 6.3% in 2013 to 6.2% in 2014 due to mainly to the impact of higher sales from acquisitions
Slide 46: Targeted Brand Advertising Asia - Samsonite
Targeted Brand Advertising Asia - Samsonite Airport Billboard/lightbox – Hyderabad, India Airport Billboards – Melbourne/Sydney, Australia On TV Airport Billboard/lightbox – Delhi, India Train Station Platform Digital Screen – Seoul, Korea POS Displays - AnYang, Gyeonggi-do, Korea Highway Billboards
Slide 47: Targeted Brand Advertising Asia – American Tourister
Targeted Brand Advertising Asia – American Tourister Station Domination – Sydney Metro Station, Australia – “Take on the World” campaign featuring Prismo Station Domination – Guangzhou metro station, China – “I Travel the World” campaign featuring Cube Pop Window Display and POS Displays On TV Stati
Slide 48: Targeted Product Advertising North America - Samsonite
Targeted Product Advertising North America - Samsonite Airport Billboards – Chicago O’Hare, Illinois, USA Print Media Airport Billboards – Boston Logan, Massachusetts, USA Train Billboards – Atlanta, Georgia, USA Page 48
Slide 49: Targeted Brand Advertising North America – American Tourister
Targeted Brand Advertising North America – American Tourister Page 49
Slide 50: Targeted Product Advertising Europe - Samsonite
Targeted Product Advertising Europe - Samsonite Airport Billboards – Istanbul Airport, Turkey Airport Billboards – Brussels Airport, Belgium Airport Lightbox – Brussels Airport, Belgium Page 50 POS Display (Live Windows) – Vienna, Austria Online and Social Media
Slide 51: Targeted Product Advertising Europe – American Tourister
Targeted Product Advertising Europe – American Tourister Billboards - Alexanderplatz Berlin, Germany Airport Billboards – Istanbul Airport, Turkey Page 51 Billboards - Picadilly Circus, UK
Slide 52: Targeted Product Advertising Latin America
Targeted Product Advertising Latin America Print Media Out-of-Home Placements Social Media TV Exposure Page 52
Slide 53: Agenda
Agenda Results Highlights Business Overview Financial Overview Outlook and Strategy for 2015 Q&A Page 53
Slide 54: Key Financial Highlights
Key Financial Highlights Excluding acquisitions, Adjusted EBITDA margin increased by approximately 20bp to 16.8%. Net cash position of US$72.9 million with borrowing capacity on the revolving credit facility of US$437.5 million as of December 31, 2014. Net working capital efficiency of 12.7% continu
Slide 55: Strong Balance Sheet
Strong Balance Sheet Net cash decreased by US$137.0 million from US$209.8 million at US$m December 31, December 31, $ Chg Dec-14 % Chg Dec-14 2014 2013 vs. Dec-13 vs. Dec-13 December 31, 2013 to US$72.9 million at December 31, 2014 with cash flows Cash and cash equivalents 140.4 225.3 (84.9) -37.7%
Slide 56: Efficiently Managing Working Capital
Efficiently Managing Working Capital US$m December 31, December 31, $ Chg Dec-14 % Chg Dec-14 Working capital continues to be managed (1) 2014 2013 vs. Dec-13 vs. Dec-13 efficiently at 12.7% of sales at December Working Capital Items 31, 2014. Inventories $ 332.3 $ 298.4 $ 33.9 11.4% Trade and Other
Slide 57: Capital Expenditure
Capital Expenditure Capital Expenditure by Project Type US$m 2014 2013 2014 Retail Capex consists mainly of new stores and remodels in Asia of US$12.9 million, North America of US$7.2 million and Europe of Retail 27.9 20.5 US$4.6 million with 85 net new company-owned stores opened in 2014. Product D
Slide 58: Shareholder Information and Distribution to Shareholders
Shareholder Information and Distribution to Shareholders Shareholder Information as of December 31, 2014 Shares outstanding 1,408,026,456 Stock Price (HK$) 23.09 Amounts below stated in US$ 2014 Basic EPS (US$) $0.132 2014 Adjusted EPS (US$) $0.147 Recommended distribution to shareholders (US$) $88,
Slide 59: Samsonite Share Price Performance
Samsonite Share Price Performance from Jan 2013 through Feb 2015 180.0 Samsonite Hang Seng Index* 170.0 160.0 150.0 140.0 130.0 120.0 110.0 100.0 90.0 80.0 * Samsonite share price and Hang Seng Index rebased to 100.0 on Dec 31, 2012 Page 59
Slide 60: Agenda
Agenda Results Highlights Business Overview Financial Overview Outlook and Strategy for 2015 Q&A Page 60
Slide 61: Engines Of Future Growth
Engines Of Future Growth Continuing global expansion of travel & tourism “UNWTO forecasts international tourist arrivals to grow between 3% and 4% in 2015. By region, growth is expected to be strongest in the Americas and in Asia and the Pacific (both +4% to +5%), and somewhat more moderate in Europ
Slide 62: Agenda
Agenda Results Highlights Business Overview Financial Overview Outlook and Strategy for 2015 Q&A Page 62
Samsonite International — FY2014 Earnings Presentation on 6ix