Samsonite Group S.a. · HKEX:1910
Samsonite — Samsonite International — Q3 2021 Earnings Presentation
37 slides from Samsonite's earnings presentation, Nov 12, 2021
Slide 1: Third Quarter Results 2021
2021 THIRD QUARTER RESULTS NOVEMBER 12, 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: Strong sales and Adjusted EBITDA recovery in Q3
Strong sales and Adjusted EBITDA recovery in Q3 Q3 sales growth improved to (37.6%)(1)(2) vs. Q3 2019 up from (52.2%)(1) in Q2 2021. Achieved positive Adjusted EBITDA of US$72.2 million (13.0% of net sales) in Q3 2021. ($ in millions, except growth) Q1 2021 Q2 2021 Jul-21 Aug-21 Sep-21 Q3 2021 (1,2)
Slide 5: Sales recovery accelerated throughout Q3 2021
Sales recovery accelerated throughout Q3 2021 with sales down 37.6%(1,2) to 2019 vs. down 52.2%(1) in Q2 2021 Continued strong recovery in North America, Europe, and Latin America with Q3 sales in each region down 29.9%(1,2), 35.5%(1), and 14.6%(1) to 2019, respectively. The recovery in Asia was beh
Slide 6: Adjusted EBITDA continued its trend of quarterly improvement
Adjusted EBITDA continued its trend of quarterly improvement, with the Company achieving positive Adjusted EBITDA of US$72.2 million in Q3 2021 Adjusted EBITDA margin of 13.0% in Q3 2021 was only approximately 160bp lower than pre-pandemic Q3 2019 on sales that were down US$364 million to Q3 2019. C
Slide 7: International travel has begun to show some sign of recovery
International travel has begun to show some sign of recovery, but still remains down significantly to pre-COVID levels Domestic Revenue Passenger-kilometers (RPK’s) vs. International RPK’s Domestic travel was negatively impacted by the Delta variant. The recovery in international travel is being dri
Slide 8: International routes are recovering at varying rates
International routes are recovering at varying rates, with North America – Latin America outperforming the rest International Air Connectivity Index for selected route areas – Jan 2020 – Sep 2021 The ‘North America – Latin America’ route has been significantly outperforming the rest of the route are
Slide 9: U.S. and China domestic travel recovery
Both the U.S. and China have seen a strong recovery in domestic travel, however China’s recovery has been more volatile due to re-imposing travel restrictions at various times % change in Domestic Revenue Passenger-kilometers (RPK’s) vs. the same month in 2019 The fall in domestic traffic within Chi
Slide 10: U.S. domestic travel has continued to rebound
U.S. domestic travel has continued to rebound, and has slowly been closing the gap between 2019 levels Average Daily United States Travel by Week – U.S. Domestic Commercial Flights (Departures) Source: TSA.gov Page 10
Slide 11: Gross margin improved to 55.5% in Q3 2021
Gross margin improved to 55.5% in Q3 2021 which is in-line with historical levels, however global supply chain challenges continue to impact our business Gross margin improved to 55.5% in Q3 2021, up from 52.4% in Q2 2021 and 48.7% in Q1 2021. Product costs have increased, driven by higher raw mater
Slide 12: Actions to offset raw material, freight and container pressures
We continue to take actions to offset the pressures from increased raw material pricing, higher freight costs, and limited container availability Leveraging our scale advantage and long-standing relationships with suppliers to navigate through these supply chain challenges. Value and cost engineerin
Slide 13: Decisive actions translated to strong profitability and cash generation
The Company’s decisive actions have translated to strong profitability and cash generation(3) Quarterly Adjusted EBITDA and cash (burn)/generation(3) Significantly reduced our fixed cost structure with over US$200 million in annualized savings which has allowed us to achieve positive Adjusted EBITDA
Slide 14: Strong growth in our core brands
Strong growth in our core brands as travel continues to recover Net Sales Growth by Brand All three of our core brands (Samsonite, Tumi, and American Tourister) saw strong growth across all regions for Q3 2021 compared to Q3 2020. Continued improving sales trends due to governments relaxing social-d
Slide 15: Social and environmental sustainability initiatives
We continue to prioritize our social and environmental sustainability initiatives Magnum Eco had a very successful quarter, with high engagement from trading partners. We made strong progress on our Diversity & Inclusion (“D+I”) journey, establishing regional D+I teams and a global leadership commit
Slide 16: Leaning into the travel recovery with travel products
Leaning into the travel recovery with a great assortment of travel products Travel is coming back, and we are well positioned to capture the demand with an exciting LITE-BOX assortment of travel products. The Lite-Box collection, made in our European manufacturing facility using Curv®(1) material, i
Slide 17: Product launch with TUMI | Missoni
Successful and exciting product launch with collaboration between TUMI | Missoni At the crossroads of fashion and function, our latest collaboration TUMI | Missoni. Teamed up with Italian luxury house MISSONI for an exclusive collection of bags, hard cases and travel accessories. The collection is c
Slide 18: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 18
Slide 19: Q3 2021 Results Highlights
Q3 2021 Results Highlights Net sales increased 82.8%(1)(3) Gross profit margin increased by over 10 Adjusted EBITDA increased by Q3 2021 represents a return to compared to Q3 2020. percentage points from prior year as a US$122.9 million from prior year and profitability at the Adjusted Net result of
Slide 20: Financial Highlights
Financial Highlights Net sales in Q3 2021 increased from prior year by 82.8%(1)(2). Net sales recovery has accelerated during the year, particularly in North America, Europe and Latin America. Compared to 2019 Q3 2021 net sales were down by 37.6% (1)(2) compared to Q3 2019, reflecting improvement fr
Slide 21: Financial Highlights (cont'd)
Financial Highlights (cont’d) Net debt position of US$1,659 million as of September 30, 2021, with US$1,154 million of cash and cash equivalents and US$2,812 million of debt(1). Liquidity of approximately US$1,323 million includes US$170 million available on the Revolving Credit Facility (RCF). The
Slide 22: Financial Highlights (cont'd)
Financial Highlights (cont’d) Capital expenditures and software purchases of US$1.8 million in Q3 2021 reflect the near freeze on all non-essential capital and software projects instituted since the end of Q1 2020. During Q3 2021, the Company recognized total restructuring charges of US$5.6 million
Slide 23: Sales are higher than 2020 in all regions
Sales are higher than 2020 in all regions. The speed of the recovery compared to 2019 is improving in all regions Constant Currency Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Growth 123.5%(1) -25.9% 79.3% 38.2% -62.1% 172.7% 87.4% -48.8% 812.5% 229.8% -44.6% 114.1% Constant Currency Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2
Slide 24: Sales recovery compared to 2019 accelerated in all regions
The sales recovery compared to 2019 accelerated in all regions in Q3 By region constant currency sales growth vs. 2019 (3) (3)(4) (4) (4) (4) Quickly improving Approximately 57%(2) of the India had a very strong Q1 2021 Many countries within Europe The strong improvement in U.S. population is now fu
Slide 25: Channel mix shifting back towards wholesale and retail
Channel mix is shifting back towards wholesale and retail. As travel category sales has accelerated the sales mix is shifting back towards travel compared to last year Comparison of sales by channel Comparison of Travel vs. Non-travel sales (0.2%) (1)(2) (11.3% of Net Sales) 10.7% (1)(2) 33.1% (1)(2
Slide 26: Gross margin improved in Q3 but remains pressured
Gross margin improved in Q3 but remains pressured in Q4 and into next year due to inflationary impacts. We are taking price increases and other actions to address this pressure Gross margin bridge from YTD Sep 2020 – YTD Sep 2021 Improving Gross Margin trend: • Q1 ’21 – 48.7% • Q2 ‘21 – 52.4% • Q3 ‘
Slide 27: 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) Q3 2021 fixed SG&A expenses were US$92 million lower than 2019 due mainly to actions taken to restructure the business through headcount reduc
Slide 28: Adjusted EBITDA bridge YTD Sep 2020 to YTD Sep 2021
Higher net sales and gross margin as well as fixed SG&A savings initiatives have significantly improved Adjusted EBITDA compared to last year Adjusted EBITDA Bridge YTD Sep 2020 – YTD Sep 2021 US$90.8 million (1)(2) (1) (1)(2) (1) (1)(2) (1) Stated on a constant currency basis. (2) SG&A within Adjus
Slide 29: Cash generation improved by US$381 million YTD
Cash (burn) / generation(1) improved by US$381 million to positive US$24 million YTD Sep 2021 compared to US$(357) million YTD Sep 2020 YTD September cash burn/generation(1) Quarterly cash (burn)/generation (US$m): • Q1 ’21 – ($64.6) • Q2 ‘21 – ($27.3) • Q3 ‘21 – $116.1 (1) Total cash generation (bu
Slide 30: Quarterly Adjusted EBITDA and cash generation
The Company continued to see the benefits of an improving sales and Adjusted EBITDA trend combined with the 2020 comprehensive cost reduction actions resulting in positive Adjusted EBITDA and cash generation(1) Quarterly Adjusted EBITDA and cash (burn)/generation(1) Achieved positive Adjusted EBITDA
Slide 31: Balance Sheet
Balance Sheet US$m September 30, September 30, $ Chg Sep-21 % Chg Sep-21 2020 2021 vs. Sep-20 vs. Sep-20 Net debt of US$1,659 million at September 30, 2021, which Cash and cash equivalents 1,510.9 1,153.5 (357.3) -23.7% decreased by approximately US$58 Trade and other receivables, net 141.3 179.0 37
Slide 32: Working Capital
Working Capital US$m September 30, September 30, September 30, $ Chg Sep-21 % Chg Sep-21 Net working capital at September 30, 2021 was 2019 2020 2021 vs. Sep-20 vs. Sep-20 US$194.2 million lower than at September 30, Working Capital Items 2020 driven mainly by reduced inventory Inventories $ 622.9 $
Slide 33: Capex and software additions tightly managed
Capex and software additions continue to be tightly managed well below YTD September 2020 spend Capital Expenditure by project type US$m YTD Sep 2020 YTD Sep 2021 The majority of capex in YTD Retail 7.1 4.4 September 2021 was related to Product Development / R&D / Supply 9.0 0.7 store renovations an
Slide 34: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 34
Slide 35: Outlook
Outlook We are strongly encouraged by the accelerating improvements in our sales performance across all regions, and are very pleased with the strong positive Adjusted EBITDA and cash generation(1) in Q3 2021. That said, the extent and duration of the COVID-19 pandemic remain uncertain, and it will
Slide 36: Outlook (cont'd)
Outlook (cont’d) We remain focused on managing product cost increases and pricing to navigate our gross margin back to pre-COVID levels and will maintain discipline in controlling expenses, including capital expenditures and software investments, for the remainder of 2021. We are carefully managing
Slide 37: Agenda
Agenda Business Update Financial Highlights Outlook Q&A Page 37
Samsonite International — Q3 2021 Earnings Presentation on 6ix