Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — H1 2020 Earnings Presentation
30 slides from Samsonite's earnings presentation, Aug 19, 2020
Slide 1: 2020 Interim Results
2020 INTERIM RESULTS AUGUST 19, 2020 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 Executive Summary Business Update Financial Highlights Outlook Q&A Page 3
Slide 4: Actively managing through the global pandemic
Actively managing through the global pandemic Continue to drive innovation in Given the Company’s experience with prior new products through exciting disruptions to travel, the Company believes new launches such as Proxis, our it will be able to effectively manage through first travel collection uti
Slide 5: Sales remain down in all regions due to global travel restrictions and lockdowns
Sales remain down in all regions due to global travel restrictions and lockdowns Constant Currency Q1 Q2 H1 Q1 Q2 H1 Q1 Q2 H1 Q1 Q2 H1 Growth (24.0%) (74.0%) (50.9%) (32.7%) (75.6%) (55.1%) (23.4%) (85.7%) (56.3%) (7.5%) (94.3%) (46.3%) Page 5
Slide 6: The Company has US$1.6 billion of liquidity and is focused on cash preservation
The Company has US$1.6 billion of liquidity and is focused on cash preservation and savings initiatives to reposition the profit profile of the business The Company bolstered its balance sheet by drawing US$810 million on its revolving credit facility in March and adding US$600 million of Term Loan
Slide 7: Agenda
Agenda Executive Summary Business Update Financial Highlights Outlook Q&A Page 7
Slide 8: The Company is aggressively reducing operating costs to counter the sales decrease
The Company is aggressively reducing operating costs to counter the significant sales decrease caused by the ongoing COVID-19 situation Net sales were down 53.4%(1) for the first half of 2020 due to the impact that the COVID-19 outbreak has had on the global travel industry and retail environment. J
Slide 9: Actions to reposition our store portfolio for more sustained profitability
Actions to reposition our store portfolio for more sustained profitability Exited 71 stores in 1H 2020 and have signed agreements to exit 58 stores in the second half. Successfully renegotiated 33 store leases, collectively saving approximately US$3 million of annualized cash rent. Continue to negot
Slide 10: Sales recovery is not expected until markets see some further re-opening
Sales recovery is not expected until markets see some further re-opening and people start to travel again Sales trend by month (1) (3) While the global lockdown actions have been severe, consumers are beginning to contemplate travel again and we are starting to re- open select stores. Per the Intern
Slide 11: DTC e-commerce channel and non-travel products have helped mitigate the sales decrease
The Company’s DTC e-commerce channel and diverse set of product categories, particularly non-travel products, have helped mitigate a small portion of the sales decrease Year over year comparison of sales by channel Year over year comparison of Travel vs. Non-travel sales (35.6%) (1) (46.8%) (1) (60.
Slide 12: The Company's non-travel brands have performed better relative to the core travel brands
The Company’s non-travel brands have performed better relative to the core travel brands Brand sales trend by month (1) Jan Feb Mar Q1 Apr May Jun Q2 H1 Core Travel Brands Samsonite (5.6%) (14.4%) (54.7%) (24.5%) (82.5%) (79.5%) (76.4%) (79.4%) (53.6%) American Tourister (3.5%) (8.1%) (58.0%) (24.4%
Slide 13: China was first to feel the effects of COVID-19 and has been showing steady improvement
China was first to feel the effects of COVID-19 in late January and has been showing steady improvement since February, particularly in DTC channels Sales trend by month (1) DTC e-Commerce, which we believe is the best real-time indicator of consumer sentiment for our business, bottomed out at -62.8
Slide 14: The Company remains focused on strengthening its long-term market position
The Company remains focused on strengthening its long-term market position 2020 marks the Company’s 110-year anniversary. Continue to advance “Our Responsible Journey” – the Company’s global strategy and commitment to lead the industry in sustainability, which we announced in March 2020. Continue to
Slide 15: The Company continues its commitment to innovation with its new hard-shell collection, Proxis
The Company continues its commitment to innovation with its new hard-shell collection, ProxisTM Proxis™, Samsonite’s new hard-shell collection is highly resilient with a most innovative design. The outer shell is made from patented Roxkin™ material, a new proprietary and exclusive material that boun
Slide 16: Proxis
PROXIS MADE IN EUROPE Sams@nite
Slide 17: Agenda
Agenda Executive Summary Business Update Financial Highlights Outlook Q&A Page 17
Slide 18: 1st Half 2020 Results Highlights
1st Half 2020 Results Highlights Constant currency net sales Gross margin was down 657bp from The abrupt decrease in net sales The decrease of US$270.1 decrease of 53.4%(1), with Q1 prior year with approximately 377bp had a significant impact on million in Adjusted Net Income down 26.1%(1) and Q2 do
Slide 19: Financial Highlights
Financial Highlights Net sales decreased by 53.4%(1) for 1H 2020 (Q1 -26.1%(1) and Q2 -77.9%(1)) from the prior year due to the negative impacts of the COVID-19 pandemic on the retail environment and global travel industry. As a result of lower net sales, Adjusted EBITDA for 1H 2020 was US$(122.9) m
Slide 20: Financial Highlights (cont.)
Financial Highlights (cont.) Net working capital at June 30, 2020 was US$35.0 million lower than June 30, 2019 despite much lower sales due to actions taken to quickly reduce the inflow of inventory. Capital expenditures and software purchases of US$21.5 million in 1H 2020 were US$11.5 million lower
Slide 21: Benefits of initial actions implemented in the first half will be fully realized in the second half
Benefits of initial actions implemented in the first half will be fully realized in the second half and Management is committed to further reducing the Company’s cost structure for long-term profitability Savings identified to Savings identified to (1) Savings date and estimated to date(1) and estim
Slide 22: The Company incurred non-cash impairment charges related to intangible assets and store portfolio
The Company incurred non-cash impairment charges related to certain intangible assets and our store portfolio, primarily related to overall market conditions due to COVID-19 US$M Q1 2020 Q2 2020 1H 2020 Non‐cash impairment charge on goodwill and tradenames 732.0 ‐ 732.0 Non‐cash impairment charge on
Slide 23: Savings initiatives have helped to soften the impact on Adjusted EBITDA
Savings initiatives have helped to soften the impact of the dramatic sales reduction on Adjusted EBITDA Adjusted EBITDA Bridge 1H 2020 Approximately US$(42) million from change in channel mix and promotional activity, US$(17) million from increased obsolescence Adj. EBITDA loss reserves, partly offs
Slide 24: The Company is aggressively reducing operating costs to counter the sales decrease caused by COVID-19
The Company is aggressively reducing operating costs to counter the significant sales decrease caused by COVID-19 Advertising & Promotion SG&A (including Advertising & Promotion) within Adjusted EBITDA decreased by US$188.1 million, or -47.9%(1), in Q2 2020 compared to Q2 2019. Advertising & Promoti
Slide 25: Balance Sheet
Balance Sheet US$m June 30, December 31, June 30, $ Chg Jun‐20 % Chg Jun‐20 2019 2019 2020 vs. Jun‐19 vs. Jun‐19 Net debt of US$1,632 Cash and cash equivalents 489.3 462.6 1,589.8 1,100.6 225.0% million at June 30, 2020. Trade and other receivables, net 421.2 396.0 144.1 (277.1) ‐65.8% Inventories,
Slide 26: Working Capital
Working Capital Management continues to aggressively manage US$m June 30, June 30, $ Chg Jun‐20 % Chg Jun‐20 working capital, and despite a weak sales environment 2019 2020 vs. Jun‐19 vs. Jun‐19 net working capital was US$35.0 million lower at June Working Capital Items 30, 2020 than at June 30, 201
Slide 27: Almost all capital expenditures and software purchases were put on hold
Almost all capital expenditures and software purchases were put on hold at the end of Q1 2020 resulting in 1H 2020 spend being US$11.5 million lower than 1H 2019, with almost no spend in Q2 2020 Capital Expenditure by project type US$m 1H 2019 1H 2020 1H 2020 retail capital expenditure consisted of
Slide 28: Agenda
Agenda Executive Summary Business Update Financial Highlights Outlook Q&A Page 28
Slide 29: Near-term focus during COVID-19
Near-term focus during COVID-19 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 remain focused on identifying and implementing additional permanent savings to further red
Slide 30: Agenda
Agenda Executive Summary Business Update Financial Highlights Outlook Q&A Page 30
Samsonite International — H1 2020 Earnings Presentation on 6ix