Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — Q1 2021 Earnings Presentation
32 slides from Samsonite's earnings presentation, May 13, 2021
Slide 1: First Quarter Results
2021 First Quarter Results May 13, 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: Q1 2021 results show continued profitability improvement as gradual sales recovery continued
Q1 2021 results show continued profitability improvement as gradual sales recovery continued Q1 2021 Adjusted EBITDA of US$(28) million improved by US$17 million from Q4 2020, despite sales continuing to be down to 2019 by similar percentages, and despite overall sales being lower in Q1 2021 compare
Slide 5: Q1 2021 sales were 57.3% lower than 2019, slightly improved from Q4 2020
Q1 2021 sales were 57.3%(1) lower than 2019, slightly improved from Q4 2020, which was down 58.1%(1) to 2019 While some markets such as the U.S. and China have seen improving domestic travel trends, additional waves of COVID-19 cases, particularly in Europe, India, and Latin America, have caused rei
Slide 6: Management expects demand for travel will increase as vaccinations increase globally
Management expects that as vaccinations increase globally, demand for travel will increase, and that will result in increased sales for the Company Asia continued to show positive momentum, ending Q1 2021 with Adjusted EBITDA of US$13.2 million, up from US$1.3 million in Q4 2020. Adjusted EBITDA in
Slide 7: Management expects demand for travel will increase as vaccinations increase (cont'd)
Management expects that as vaccinations increase globally, demand for travel will increase, and that will result in increased sales for the Company (cont’d) Europe and Latin America have also seen a resurgence of new COVID-19 cases and variants, resulting in reinstated travel restrictions and lockdo
Slide 8: More than 1.32 billion COVID-19 vaccine doses administered worldwide
More than 1.32 billion COVID-19 vaccine doses have been administered worldwide, with the rollout of vaccinations continuing to gain momentum Number of people who received at least one dose of Share of people who received at least one dose of COVID-19 vaccine COVID-19 vaccine More than 1.32 billion C
Slide 9: China and the United States have seen a gradual increase in domestic travel demand
China and the United States have seen a gradual increase in domestic travel demand % change in Domestic Revenue Passenger-kilometers (RPK’s) vs. the same month in 2019 The fall in domestic traffic within China for Jan 2021 and Feb 2021 was driven by government requests that citizens stay at home dur
Slide 10: North American sales growth correlates to vaccines administered in the U.S. and TSA checkpoint numbers
North American sales growth(1) correlates to the number of vaccines administered in the U.S. and TSA checkpoint numbers Constant currency sales growth(1) vs. vaccines administered in the U.S. vs. TSA checkpoint numbers(2) (2) Source: Our World in Data, TSA.gov (1) Stated on a constant currency vs. t
Slide 11: Variance in fixed expense percentage compared to 2019 decreased since Q2 2020
Since Q2 2020, we have been able to decrease the variance in our fixed expense percentage compared to 2019 through actions taken to restructure the business Fixed expense as a % of net sales Even though the fixed expenses as a percentage of net sales increased to 41% in Q1 2021 from 38% in Q4 2020,
Slide 12: Q1 2021 Adjusted EBITDA improved by US$17 million compared to Q4 2020
Q1 2021 Adjusted EBITDA improved by US$17 million to US$(28) million compared to Q4 2020 despite Net Sales being US$53 million lower Consolidated Quarterly Net Sales vs. Adjusted EBITDA Q1 sales are typically lower than Q4 due to normal seasonality. Q1 2021 Adjusted EBITDA was only US$33 million low
Slide 13: Adjusted EBITDA continued its trend of quarterly improvement
Adjusted EBITDA continued its trend of quarterly improvement, with strong Adjusted EBITDA improvement coming from our Asia region Quarterly Adjusted EBITDA Page 13
Slide 14: Q1 2021 cash burn of US$(65) million was US$58 million better than Q1 2020
Q1 2021 cash burn(1) of US$(65) million was US$58 million better than Q1 2020 despite sales being lower by US$246 million Quarterly cash burn(1) Q1 2021 cash burn(1) was only US$29 million unfavorable to Q1 2019 despite sales being US$477 million lower. (1) Cash burn is calculated as the total incre
Slide 15: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 15
Slide 16: Q1 2021 Results Highlights
Q1 2021 Results Highlights Constant currency net sales Gross profit margin decreased by 610bp Adjusted EBITDA decreased by The increased loss in Adjusted Net decrease of 42.4%(1), as Asia was from prior year due largely to fixed US$33.3 million with gross margin Income (Loss) was due mainly to alrea
Slide 17: Financial Highlights
Financial Highlights Net sales decreased from prior year by 42.4%(1). Sales recovery has slowed with Q1 sales down by 57.3%(1) compared to 2019, reflecting a slight improvement from Q4 2020, which was down by 58.1% to Q4 2019. Adjusted EBITDA of US$(28) million is only US$33 million lower than Q1 20
Slide 18: Financial Highlights (cont'd)
Financial Highlights (cont’d) Net debt position of US$1,783 million as of March 31, 2021, with US$1,418 million of cash and cash equivalents and US$3,201 million of debt(1). Liquidity of approximately US$1,446 million. Cash burn(2) of US$(65) million is favorable to prior year by US$58 million even
Slide 19: Sales were down in all regions due to COVID-19 impacts
Sales were down in all regions due to COVID-19 impacts, but less so in Asia where the impact of the pandemic had already begun in Q1 2020. Europe continued to see reinstated lockdowns in key markets such as the UK, Germany, France, and Italy in Q1 2021. Constant Currency Growth -44.6% -25.9% -62.1%
Slide 20: DTC e-commerce channel and non-travel products mitigate the sales decrease
The Company’s DTC e-commerce channel and diverse set of product categories, particularly non-travel products, continue to mitigate the sales decrease Comparison of sales by channel Comparison of Travel vs. Non-travel sales (10.4% of Net Sales) (42.3% of Net Sales) (37.4%) (1) (11.4% of Net Sales) (5
Slide 21: Gross margin headwinds from sales mix, freight costs and promotions
We continue to face gross margin headwinds, particularly around sales mix, increasing freight costs, and a more promotional retail environment Gross margin bridge from Q1 2020 – Q1 2021 Excluding the impact of manufacturing and sourcing expenses on a lower net sales base and non-renewal of the Gener
Slide 22: The Company has 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$87 million lower than prior year due mainly to actions taken to restructure the business through headcount reducti
Slide 23: Savings initiatives have softened the impact of the net sales reduction on Adjusted EBITDA
Savings initiatives have significantly softened the impact of the net sales reduction on Adjusted EBITDA Adjusted EBITDA Bridge Q1 2020 – Q1 2021 Approximately US$(2) million from non-renewal of GSP. Adj. EBITDA loss would have been approximately US$(143) million if not for actions taken to reduce f
Slide 24: Q1 2021 cash burn of US$(65) million is US$58 million better than Q1 2020
Q1 2021 cash burn(1) of US$(65) million is US$58 million better than Q1 2020 despite sales being lower by US$246 million Quarterly cash burn(1) Q1 2021 cash burn(1) is only US$29 million unfavorable to Q1 2019 with sales being US$477 million lower. (1) Cash burn is calculated as the total increase (
Slide 25: Balance Sheet
Balance Sheet Net debt of US$1,782.7 million at US$m March 31, March 31, $ Chg Mar-21 % Chg Mar-21 March 31, 2021, which increased 2020 2021 vs. Mar-20 vs. Mar-20 by approximately US$354 million Cash and cash equivalents 1,168.1 1,417.9 249.8 21.4% since March 31, 2020 due to cash Trade and other re
Slide 26: Net working capital managed through tight inventory levels
The Company has been able to manage its net working capital largely through tightly managing inventory levels, however as markets continue to recover, we will bring in additional inventory to ensure adequate stock to support increased demand Net Working Capital trend Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 In
Slide 27: Working Capital
Working Capital US$m March 31, December 31, March 31, $ Chg Mar-21 % Chg Mar- Net working capital at March 31, 2021 was 2020 2020 2021 vs. Mar-20 21 vs. Mar-20 US$141.5 million lower than at March 31, Working Capital Items Inventories $ 591.5 $ 455.9 $ 434.9 $ (156.7) -26.5% 2020 driven mainly by ti
Slide 28: Very little spend on capex and software additions in Q1 2021
Very little spend on capex and software additions in Q1 2021 reflects the freeze on all non-essential spending instituted at the end of Q1 2020. Capital Expenditure by project type US$m Q1 2020 Q1 2021 Almost all capex in Q1 2021 was Retail 7.4 1.4 related to required store Product Development / R&D
Slide 29: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 29
Slide 30: Outlook
Outlook We are encouraged by the recent improvements in our sales performance in March and April compared to the trend in January and February. Over the past quarter, there has been a dramatic boost in COVID-19 vaccination campaigns around the world. While travel and tourism remain constrained by on
Slide 31: Near-term focus
Near-term focus Ensuring the safety and well-being of our employees, customers and partners continues to be a top priority of the Company. We have taken significant actions to preserve cash and reduce our fixed cost base and remain focused on maintaining this lower cost structure to drive rapid prof
Slide 32: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 32
Samsonite International — Q1 2021 Earnings Presentation on 6ix