Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — H1 2016 Earnings Presentation
30 slides from Samsonite's earnings presentation, Aug 30, 2016
Slide 1: 2016 Interim Results
Sams@nite 2016 INTERIM RESULTS August 30, 2016 SAMSONITE INTERNATIONAL S.A. | HKEX 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 Overview Outlook and Strategy Q&A Page 3
Slide 4: 1st Half 2016 Results Highlights
1st Half 2016 Results Highlights +1.7% on a constant currency basis, excluding tax- effected FX gain/loss(1). +4.1% +4.8% +3.3% -0.1% Constant Constant Constant Constant Currency Currency Currency Currency Growth Growth Growth Growth Constant currency net sales Gross margin is up 30bp from Adjusted
Slide 5: 1st Half 2016 Business Overview
1st Half 2016 Business Overview Constant currency net sales growth in all Growth in all regions: regions(1) Asia: +3.7% 1H 2016 marketing spend of North America: +0.5% US$65.9 million was 5.5% of Europe: +8.6% net sales, down slightly from Latin America: +13.6% 5.9% of net sales in 1H 2015. Operatin
Slide 6: Challenging market conditions in some key markets being offset by strong growth in others
Challenging market conditions in some key markets being offset by strong constant currency net sales growth in others (1) (1) Includes Macau Page 6
Slide 7: Continued brand penetration driving growth in emerging markets
Continued brand penetration driving strong constant currency net sales growth in most emerging markets (1) (1) Mexico, excluding export sales Page 7
Slide 8: Key Market Challenges
Key Market Challenges U.S. The U.S. wholesale business (excluding Speck) was up 1.3% with strong shipments to e-commerce retailers and other key customers while net sales were down most notably within the warehouse club channel. The decline in the warehouse club channel was largely due to a change i
Slide 9: Key Market Challenges
Key Market Challenges Hong Kong/Macau The continued decrease in tourism from mainland China to Hong Kong has affected consumer products companies in general and particularly retailers in Hong Kong. Hong Kong/Macau wholesale net sales are down 10.6%(1) and retail net sales are down 23.6%(1) resulting
Slide 10: Asia – Continued constant currency revenue growth amid challenging trading conditions
Asia – Continued constant currency revenue growth amid challenging trading conditions First half constant currency net sales growth of 3.7% (1), was driven by: Strong net sales growth of 8.5%(1) in direct-to-consumer channels with: Retail store net sales growth of 1.9%(1) coming from 8 net new compa
Slide 11: North America – Growth in wholesale while retail continues to be challenged
North America – Growth in wholesale while retail continues to be challenged by decreased tourism Net sales increased 0.5%(1) driven by: Net sales growth of 0.5%(1) in the wholesale channel. US wholesale net sales excluding Speck and excluding net sales to a key customer that changed their strategy f
Slide 12: Europe – Strong net sales growth of 8.6%
Europe – Strong net sales growth of 8.6% on a constant currency basis Constant currency net sales growth of 8.6%, led by Germany (+13.6%(1)), Italy (+19.6%(1)), Russia (+23.3%(1)) and Spain (+15.3%(1)). Strong net sales growth of 18.1%(1) in direct-to-consumer channels with: Retail up 17.6%(1), driv
Slide 13: Latin America – Strong constant currency sales growth
Latin America – Strong constant currency sales growth across all countries and continued investment in Brazil Net sales increased 13.6%(1) on strong growth in Mexico (+26.5%(1)(2)), Chile (+6.4%(1)), and Brazil (22.5%(1)). Wholesale channel net sales grew by 4.6% (1) despite a shift in the timing of
Slide 14: Strong growth in e-commerce and targeted retail expansion
Strong growth in e-commerce and targeted retail expansion Direct-to-consumer net sales increased from 19.7% of total net sales in 1H 2015 to 21.0% of total net sales in 1H 2016. Net sales growth of 18.4%(1) in total e-commerce was driven by: 15.6%(1) growth in direct-to-consumer e-commerce platform
Slide 15: Stable growth in core brands
Stable growth in core brands Continued growth in Samsonite with net sales up 2.7%(1). Net Sales growth by brand American Tourister net sales up 2.3%(1) as the brand continues to further penetrate into European and Latin America markets but hit a slowdown in Asia after years of successive high growth
Slide 16: Acquisition of Tumi
Acquisition of Tumi On August 1, 2016 the Company successfully completed its largest acquisition to date, purchasing Tumi for US$1.8 billion in an all-cash transaction. Funded by newly committed senior credit facility consisting of term loans totaling US$1,925 million and a new revolving credit faci
Slide 17: Compelling strategic and financial rationale for the acquisition of Tumi
Compelling strategic and financial rationale for the acquisition of Tumi Creates a leading global travel lifestyle company. Ideal and complementary fit with Samsonite. Enables Samsonite to strategically expand into the highly attractive premium segment. Presents tremendous opportunities to leverage
Slide 18: Tumi 1st Half Performance Highlights
Tumi 1st Half Performance Highlights(1) Reported net sales growth of 6.8% was driven largely by consolidation of Tumi Japan. Excluding impact of Tumi Japan consolidation, net sales growth was 0.8% over prior year driven by: Direct-to-consumer North America, up 6.6%; Partially offset by 6.6% decrease
Slide 19: Key Product Assortment
Key Product Assortment North America Europe Asia Europe North America Asia Latin America Page 19
Slide 20: Key Product Assortment
Key Product Assortment Page 20
Slide 21: Key Product Assortment
Key Product Assortment Page 21
Slide 22: Strong net sales growth in most product categories
Strong net sales growth in most product categories Net Sales growth by product category Travel remains our largest product category and traditional strength with all regions contributing to its growth of 4.0%(1). Proportion of non-travel net sales consistent over the two periods at around a third of
Slide 23: Advertising spend down slightly year over year
Advertising spend down slightly year over year Advertising spend Indicates % of net sales On a constant currency basis advertising is down US$3.1 million, or 4.3%, compared to 1H 2015. As a percentage of net sales, total advertising spend of 5.5% is 40bp lower than prior year. The Company scaled bac
Slide 24: Targeted Brand Advertising
Targeted Brand Advertising American Tourister Digital Ads – Mexico Kamiliant - Taiwan We Carry the World – U.S.A. Samsonite – Portugal Samsonite – U.S.A. American Tourister - Australia Page 24
Slide 25: Key Financial Highlights
Key Financial Highlights Constant currency net sales growth of US$49.5 million, or 4.1%, largely offset by currency translation impact of US$36.5 million. Excluding impact of currency translation, 1H 2016 Adjusted EBITDA was up 3.3% from US$190.0 million in 1H 2015. Strong operating cash flow genera
Slide 26: Strong Balance Sheet
Strong Balance Sheet Net cash increased by US$47.8 million US$m June 30, December 31, June 30, $ C hg J un- 16 % C hg J un- 16 in the 1st half of 2016 to US$164.4 2015 2015 2016 v s . J un- 15 v s . J un- 15 million as of June 30, 2016 with cash Cash and cash equivalents 203.0 180.8 272.9 69.9 34.4%
Slide 27: Tumi acquisition financed by new senior credit facilities
Tumi acquisition financed by new senior credit facilities Term Loan A US$1,250 million maturing on August 1, 2021. Initial interest rate of LIBOR plus 2.75% per annum, subject to step-downs based on reduction in the total net leverage ratio of the Company and its restricted subsidiaries. Term Loan B
Slide 28: Efficiently managing working capital
Efficiently managing working capital US$m June 30, June 30, Working capital continued to be managed $ Chg Jun-16 % Chg Jun-16 2015 2016 (1) vs.(1) Jun-15 vs. Jun-15 efficiently at 13.8% of net sales as of June Working Capital Items 30, 2016, slightly favorable to targeted 14% Inventories $ 345.0 $ 3
Slide 29: Capital Expenditure
Capital Expenditure Capital Expenditure by project type 1H 2016 retail capex consisted of new stores and remodels in Asia of US$4.9 million, Europe US$m 1H 2015 1H 2016 of US$4.3 million, Latin America of US$2.9 million and North America of US$1.6 million. Retail 14.6 13.7 Capex on Product Developme
Slide 30: Engines Of Future Growth
Engines Of Future Growth Continuing growth in global travel and tourism: “Destinations worldwide received some 348 million international tourists (overnight visitors) between January and April 2016, some 18 million more than the same period last year (+5.3%). This follows an increase of 4.6% in 2015
Samsonite International — H1 2016 Earnings Presentation on 6ix