Samsonite Group S.a. · HKEX:1910
Samsonite — Q1 2020 Earnings Presentation
23 slides from Samsonite's earnings presentation, May 14, 2020
Slide 1: 1st Quarter Results 2020
1st Quarter Results 2020 May 14, 2020
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 Financial Highlights Outlook Q&A Page 3
Slide 4: Actively managing through the global pandemic
Actively managing through the global pandemic Cash preservation a key focus: - Aggressively reducing our operating expenses; The health and safety of our employees and their families, - Significantly reducing advertising spend; Working closely with our as well as our customers and - Near freeze on c
Slide 5: COVID-19 is having a significant impact on the business
COVID-19 is having a significant impact on the business Net sales were down 26.1%(1) for Q1 2020 (down 55.0%(1) for month of March 2020) due to the impact that the COVID-19 outbreak has had on the global travel industry and retail environment. Almost all company stores have had to temporarily close
Slide 6: The Company has taken immediate actions to reduce costs and improve liquidity
The Company has taken immediate actions to reduce costs and improve liquidity While day-to-day activities have slowly begun to return to normal in some countries, global travel remains disrupted. We anticipate an extended sales recovery and significant impact on net sales in Q2. Our retail operation
Slide 7: 1st Quarter 2020 Results Summary
1st Quarter 2020 Results Summary Constant currency net sales Gross margin was down The abrupt decrease in net decrease of 26.1%, with Jan 185bp from prior year largely sales had a significant impact -8.2%, Feb -14.9% and Mar due to channel mix as our on Adjusted EBITDA as cost -55.0% as the impact o
Slide 8: Sales are down in all regions due to global travel restrictions and lockdowns
Sales are down in all regions due to global travel restrictions and lockdowns Constant Currency -24.0% -32.7% -23.4% -7.5% Growth Page 8
Slide 9: Samsonite is celebrating 110 years of heritage and innovation
Samsonite is celebrating 110 years of heritage and innovation, and despite the challenges from COVID-19, we are not changing course in our commitment to sustainability On April 29, 2020, the Company published its 2019 ESG Report which provides details on “Our Responsible Journey”, the Company’s glob
Slide 10: Agenda
Agenda Executive Summary Financial Highlights Outlook Q&A Page 10
Slide 11: 1st Quarter 2020 Results Summary
1st Quarter 2020 Results Summary Constant currency net sales Gross margin was down The abrupt decrease in net The decrease of US$65.8 decrease of 26.1%, with Jan 185bp from prior year largely sales had a significant impact million in Adjusted Net Income -8.2%, Feb -14.9% and Mar due to channel mix a
Slide 12: Q1 Financial Highlights
Q1 Financial Highlights Net sales decreased by 26.1%(1) for Q1 2020 (down 55.0%(1) for month of March 2020) from the prior year due to the negative impacts of the COVID-19 pandemic on the retail environment and global travel industry. Net sales in April decreased by approximately 80%(1). As a result
Slide 13: Q1 Financial Highlights (cont.)
Q1 Financial Highlights (cont.) Net working capital efficiency of 20.1% is higher than targeted levels due to the significant sales decrease outpacing the decrease in net working capital. Actions have been taken to quickly reduce the inflow of inventory. Capital expenditures of US$17.9 million in Q1
Slide 14: Company has further bolstered its liquidity and ability to comply with debt requirements
Due to the inherent uncertainties about the extent and duration of the COVID-19 outbreak, the Company has further bolstered its liquidity and ability to comply with debt requirements The Company was in compliance with all debt covenants as of March 31, 2020, with pro-forma total net leverage ratio(1
Slide 15: 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 Non-cash impairment charge on certain of the Group’s indefinite lived intangible assets, which include goodwill and tradenames
Slide 16: Benefits of initial actions implemented in Q1 will be realized starting in Q2
Benefits of initial actions implemented in Q1 will be realized starting in Q2 and Management is committed to significantly reducing its cost structure to position the business for long-term profitability We have identified and are implementing approximately US$340 million of cash savings beyond our
Slide 17: Abrupt decrease in net sales had a significant impact on Adjusted EBITDA
The abrupt decrease in net sales in Q1 had a significant impact on Adjusted EBITDA Adjusted EBITDA Bridge Q1 2020 Page 17
Slide 18: Balance Sheet
Balance Sheet Net debt of US$1,428.7 million at US$m March 31, December 31, March 31, $ Chg Mar-20 % Chg Mar-20 2019 2019 2020 vs. Mar-19 vs. Mar-19 March 31, 2020. Cash and cash equivalents 392.1 462.6 1,168.1 776.1 197.9% Cash flows from operating activities of Trade and other receivables, net 375
Slide 19: Working Capital
Working Capital Despite net working capital balance at March 31, 2020 being US$76.8 million lower than at March US$m March 31, March 31, $ Chg Mar-20 % Chg Mar-20 31, 2019, net working capital efficiency of 20.1% 2019 2020 vs. Mar-19 vs. Mar-19 was unfavorable to prior year by 340bp as the Working C
Slide 20: Capital expenditures in Q1 2020 were slightly up from prior year
Capital expenditures in Q1 2020 were slightly up from the same period in the prior year, but will be significantly reduced for the remainder of 2020 Q1 2020 retail capital expenditure Capital Expenditure by project type consisted of new stores and remodels US$m Q1 2019 Q1 2020 that were committed to
Slide 21: Agenda
Agenda Executive Summary Financial Highlights Outlook Q&A Page 21
Slide 22: Near-term focus during COVID-19
Near-term focus during COVID-19 During the initial phase of the COVID-19 outbreak the primary focus was on ensuring the safety and well- being of our employees, customers and partners. This continues to be a top priority. We have been navigating the business through the next phase by taking signific
Slide 23: Agenda
Agenda Executive Summary Financial Highlights Outlook Q&A Page 23