Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — FY2020 Earnings Presentation
40 slides from Samsonite's earnings presentation, Mar 17, 2021
Slide 1: 2020 Annual Results
2020 ANNUAL RESULTS MARCH 17, 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 or b
Slide 3: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 3
Slide 4: 2020 was a turbulent year with many accomplishments
While 2020 was a very turbulent year, there were many accomplishments to celebrate as we positioned the Company for future success Approximately US$1.5 billion Restructured the business liquidity at December 31, 2020. throughout 2020, dramatically reducing in-year fixed operating Successfully negoti
Slide 5: Successfully managing the business through the global pandemic
Successfully managing the business through the global pandemic Aggressive early actions on costs and cash burn(1) have positioned Samsonite for success. Over US$670 million of in-year cash savings, driven by over US$325 million in-year fixed operating expense cuts for the full year; Fixed SG&A expen
Slide 6: Gradual sales recovery with Q4 down approximately 58%
Continued to see gradual sales recovery with Q4 down approximately 58%(1) compared to 2019 vs. Q3 down approximately 65%(1) Additional waves of COVID-19 cases and reinstated travel restrictions are causing some slowdown in the recovery. Monthly sales trend (2) Cyber Monday was in the month of Novemb
Slide 7: Focus on cash preservation and fixed operating expense reductions
The Company has been focused on cash preservation and fixed operating expense reductions in order to position the business for more sustained profitability The Company mitigated the impact of lower sales on cash flow by quickly identifying and implementing over US$670 million of in-year cash savings
Slide 8: Aggressively reduced SG&A costs to counter sales decrease
The Company aggressively reduced SG&A costs to counter the significant sales decrease caused by the COVID-19 pandemic SG&A (including advertising & promotion) within Adjusted EBITDA (38.9% of Net Sales) (77.1% of (46.1% of (37.7% of Net Sales) Net Sales) Net Sales) (2) Advertising & Promotion (1) St
Slide 9: Savings from streamlining the organization and repositioning stores
Much of the fixed operating expense savings is coming from streamlining the organization and repositioning our store portfolio We have taken very difficult actions to best position Samsonite for the future. Our teams remain engaged, energized and poised to capture the demand as travel recovers. Over
Slide 10: Adjusted EBITDA and cash burn improvement since Q2 2020
The Company is seeing the benefits of the comprehensive cost reduction actions with Adjusted EBITDA and cash burn(1) showing dramatic improvement since Q2 2020 Quarterly Adjusted EBITDA and cash burn(1) Adjusted EBITDA and cash burn(1) have improved since Q2 2020 due to the Company’s quick and compr
Slide 11: Significant liquidity of approximately US$1.5 billion
With significant liquidity of approximately US$1.5 billion, the Company is confident it has sufficient capacity to navigate the challenges from the COVID-19 pandemic Ended the year with cash and equivalents of US$1,495 million vs. US$463 million on December 31, 2019. Ended the year with net debt(1)
Slide 12: DTC e-commerce and non-travel products mitigated sales decrease
The Company’s DTC e-commerce channel and diverse set of product categories, particularly non-travel products, helped to mitigate the sales decrease Year over year comparison of sales by channel Year over year comparison of Travel vs. Non-travel sales (10.4% of Net Sales) (40.6% of Net Sales) (43.0%)
Slide 13: Non-travel brands performed better than core brands
The Company’s non-travel brands performed better relative to the core brands Full Year Brand sales growth (1) (59.1%) (62.2%) (58.1%) (27.5%) (22.2%) All other brands (58.1%) Total (57.5%) In 2020, non-travel brands, such as Gregory and Speck, performed better than the Company’s core brands of Samso
Slide 14: Slowdown in recovery, anticipated travel improvement with vaccines
Though we’ve seen some slowdown in the recovery, we continue to anticipate a meaningful improvement in travel with the broader availability of vaccines The resurgence of new COVID-19 cases in a number of key markets and the resulting travel restrictions have caused a delay in the recovery. There is
Slide 15: U.S. airport checkpoint numbers trending up
U.S. airport checkpoint numbers continue to be down significantly vs. prior year but slowly trending up ~(48%) decline in Feb 2021 vs. Feb ~(96%) 2019 decline in Apr 2020 vs. Apr 2019 Sunday, October 18, 2020 was the first time that over 1 million people passed through U.S. airport checkpoints since
Slide 16: Gradual recovery in travel driven by domestic travel
The gradual recovery in travel is being driven by domestic travel, however air travel recovery slowed in Q4 due to additional restrictions related to new COVID-19 outbreaks Year-on-year change in Global Revenue Passenger-kilometers (RPK’s) Source: IATA publications Global air travel demand continues
Slide 17: COVID-19 vaccine doses administered worldwide
More than 381 million 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 381 million COV
Slide 18: Commitment to sustainability remains a key strategy
Commitment to sustainability remains a key strategy for the Company COVID-19 has reinforced the importance of sustainability in our interconnected world, and we are continuing to advance “Our Responsible Journey” – the Company’s global strategy and commitment to lead the industry in sustainability.
Slide 19: Technology partners advancing sustainable materials
Working with leading technology partners across the world to advance our innovation with sustainable materials Samsonite has partnered with many leading suppliers, including Quality Circular Polymers (QCP), a joint venture between SUEZ and LyondellBasell, to develop and source sustainable and recycl
Slide 20: Launch of Magnum Eco in first half of 2021
Excited for the launch of Magnum Eco, one of our most sustainable luggage collections, in the first half of 2021 Magnum Eco, Samsonite’s new, innovative, and sustainable travel collection. Shells made from recycled polypropylene from post- consumer waste. Interior lining made of recycled polyethylen
Slide 21: Sustainable and recycled material across all brands, including Tumi
Continuing to push sustainable and recycled material across all brands, including Tumi TUMI is committed to sustainability and innovation — a mission that inspired us to integrate recycled materials into an ever- growing number of products and collections. Excited to launch the new 19 Degree Polycar
Slide 22: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 22
Slide 23: 2020 Results Highlights
2020 Results Highlights Constant currency net sales Gross profit margin, as reported, decreased to The decrease in net sales had The decrease in Adjusted Net decrease of 57.5%(1), with Q1 46.0% for the year ended December 31, 2020 a significant impact on Adjusted Income (Loss) was due mainly to down
Slide 24: Sales down in all regions but gradually recovering
Sales were down in all regions due to COVID-19 impacts, but gradually recovering from the lows in Q2 2020 Constant Currency Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Growth -24.0% -74.0% -64.3% -56.6% -55.8% -32.7% -75.6% -63.4% -56.1% -57.5% -23.4% -85.7% -65.7% -67.1% -61.7% -7.5
Slide 25: Savings initiatives softened impact on Adjusted EBITDA
Savings initiatives have significantly softened the impact of the sales reduction on Adjusted EBITDA Adjusted EBITDA Bridge FY 2019 – FY 2020 Approximately US$(23) million from Approximately US$(44) increased bad million from increased debt expense. Adj. EBITDA loss inventory reserves. would have be
Slide 26: Managing gross margin pressures
We are continuing to manage the gross margin pressures on our business Gross margin bridge from FY 2019 to FY 2020 Excluding the change in provision for inventory reserves, the impact of manufacturing and sourcing expenses on a lower net sales base, and the restructuring and non-cash impairment char
Slide 27: Financial Highlights
Financial Highlights Net sales decreased by 57.5%(1) (Q1 -26.1%(1), Q2 -77.9%(1), Q3 -64.7%(1) and Q4 -58.1%(1)) from the prior year due to the negative impacts of the COVID-19 pandemic on the retail environment and global travel industry. As a result of lower net sales, Adjusted EBITDA was US$(218.
Slide 28: Financial Highlights (cont.)
Financial Highlights (cont.) Net working capital at December 31, 2020 was US$126 million lower than December 31, 2019 despite much lower net sales due to actions taken to quickly reduce the inflow of inventory. Capital expenditures and software purchases of US$26.1 million in 2020 were approximately
Slide 29: Reduced fixed operating expenses for long-term profitability
Management has significantly reduced fixed operating expenses, positioning the business for long-term profitability Fixed cost Estimated savings annualized run‐ realized during rate fixed cost 2020 savings US$m (1) Permanent Actions Identified 65 200 Temporary Actions Identified 263 Total identified
Slide 30: Asia's full year 2020 Adjusted EBITDA positive excluding bad debt
Asia’s full year 2020 Adjusted EBITDA was positive when backing out bad debt expense and increases in inventory obsolescence provisions related to COVID-19 pandemic Total Company US$m Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Net Sales growth (const. currency) (26.1%) (77.9%) (64.7%) (58.1%) (57.5%) A
Slide 31: China's adjusted EBITDA margin recovered quickly
China’s adjusted EBITDA margin has recovered quickly on a lower net sales base, and is positioned well for the future China – Net Sales vs. Adjusted EBITDA margin % The Company’s China business has significantly reduced fixed operating expenses, positioning the business well for long-term profitabil
Slide 32: Aggressively reduced SG&A costs
The Company aggressively reduced SG&A costs to counter the significant sales decrease caused by the COVID-19 pandemic Total SG&A (including advertising & promotion) within Adjusted EBITDA (38.9% of Net Sales) (77.1% of (46.1% of (37.7% of Net Sales) Net Sales) Net Sales) (2) Advertising & Promotion
Slide 33: Balance Sheet
Balance Sheet US$m December 31, December 31, $ Chg Dec‐20 % Chg Dec‐20 Net debt of US$1,735.5 2019 2020 vs. Dec‐19 vs. Dec‐19 million at December 31, 2020, Cash and cash equivalents 462.6 1,495.0 1,032.3 223.1% which increased by Trade and other receivables, net 396.0 141.0 (255.0) ‐64.4% approximat
Slide 34: Working Capital
Working Capital US$m December 31, December 31, $ Chg Dec‐20 % Chg Dec‐20 Management continues to aggressively 2019 2020 vs. Dec‐19 vs. Dec‐19 manage working capital, and despite a weak Working Capital Items Inventories $ 587.3 $ 455.9 $ (131.4) ‐22.4% sales environment, net working capital was Trade
Slide 35: Reduced inventory purchases in 2020
The Company dramatically and quickly reduced inventory purchases in 2020 to help with working capital Global Supply Receipt Evolution 2020 versus 2019 Focused on maintaining close and strong relationships with our suppliers through consistent dialogue between the Company’s sourcing teams and our key
Slide 36: Capital expenditures and software purchases on hold
Almost all capital expenditures and software purchases were put on hold at the end of Q1 2020 resulting in 2020 spend being US$48.4 million lower than 2019 Capital Expenditure by project type US$m 2019 2020 Approximately US$103 million reduction Retail 41.0 7.1 in capital expenditures and software P
Slide 37: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 37
Slide 38: Outlook
Outlook Projected widespread COVID-19 vaccination timeline We are heartened by the sequential improvements in our performance during the last two quarters of 2020, notwithstanding the temporary slowdown we are currently experiencing. Views on pace of recovery vary, but we are seeing an improving tre
Slide 39: 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 will strive to maintain this lower cost structure as the impacts of COVID-1
Slide 40: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 40
Samsonite International — FY2020 Earnings Presentation on 6ix