Samsonite International S.A. Announces Final Results for the Year Ended December 31, 2023

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PR Newswire

HONG KONG, March 13, 2024

Consolidated net sales increased by 30.4%¹^{, 2} year-on-year driven by strong growth across all regions and core brands

Gross profit margin and Adjusted EBITDA margin³ expanded significantly in 2023, driven by increased net sales contribution from higher-margin Asia region and Tumi brand as well as benefits from our more efficient cost structure

Continued to deleverage balance sheet, driven by strong profit growth and Free Cash Flow⁴ with net leverage ratio⁵ at lowest level since 2016 acquisition of Tumi

HONG KONG, March 13, 2024 /PRNewswire/ -- Samsonite International S.A. ("Samsonite" or "the Company", together with its consolidated subsidiaries, "the Group"; SEHK stock code: 1910), a leader in the global lifestyle bag industry and the world's best-known and largest travel luggage company, today published its final results for the year ended December 31, 2023.

In this press release, certain financial results for the year ended December 31, 2023, are compared to both the year ended December 31, 2022, and the year ended December 31, 2019. Comparisons to the year ended December 31, 2019, are provided because it is the most recent comparable year during which the Company's results were not affected by COVID-19.

Overview
Commenting on the results, Mr. Kyle Gendreau, Chief Executive Officer, said, "2023 marked another impressive year for Samsonite. We achieved outstanding results, and we are well positioned to continue to outpace the market backed by our portfolio of leading brands, unrivalled global sourcing and distribution infrastructure, and ability to invest in product innovation and marketing. Supported by strategic investments in marketing, we successfully capitalized on the continued recovery and growth in leisure and business travel worldwide, particularly in Asia, to deliver strong year-on-year net sales gains across all regions and core brands, with significant improvements in profitability."

"During 2023 the Group registered strong double-digit net sales growth year-on-year, while its gross profit margin and Adjusted EBITDA margin³ both reached record highs, reflecting our efficient cost structure and the increased net sales contribution from our higher-margin Asia region and Tumi brand. As a result, our Adjusted EBITDA⁶ increased by 50.2% on net sales that grew by 30.4%^{1, 2} in 2023 compared to 2022, a notable achievement that underscores Samsonite's fundamentally transformed profitability. With strong profits and prudent cash management, we generated strong Free Cash Flow⁴ in 2023, part of which we used to further reduce our debt. We ended the year with a net leverage ratio⁵ of 1.53x, the lowest level since our acquisition of Tumi in 2016, as well as substantial liquidity of US$1.6 billion⁷. Considering our strong performance and financial position, the Board decided to resume annual cash distributions in 2024, recommending a cash distribution of US$150.0 million to the Company's shareholders. This represents an increase of US$25.0 million, or 20.0%, compared to the cash distribution of US$125.0 million paid in 2019."

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"We intensified our efforts to embed sustainability into the business in 2023. Among other accomplishments, we increased the share of Samsonite's net sales that came from products made at least in part from recycled materials to approximately 34%, up from about 23% in 2022. We also achieved 100% renewable electricity usage in all our own operations, two years earlier than our 2025 target date. We will continue to advance Samsonite's "Our Responsible Journey" sustainability initiatives, leveraging our scale to lead the transformation of the luggage industry to become more sustainable."

Mr. Gendreau continued, "Looking to 2024, global travel and tourism growth is expected to remain healthy. Asia is expected to continue to see robust travel growth in 2024, as outbound travel from China continues to improve. In markets that reopened earlier, including North America and Europe, travel is expected to see steady growth closer to historical trends, with relatively stronger prospects in Europe from the ongoing return of Chinese travelers."

"We will continue to invest in our core brands in 2024, focusing on product innovation, sustainability initiatives and further enhancements to our global retail store network, all supported by increased investment in marketing. We are targeting 2024 marketing spend of approximately 7.0% of net sales, and we are confident that, with the amazing new products and exciting advertising campaigns planned for 2024, the Group will continue to deliver robust net sales growth, with strength in the higher-margin Asia region and Tumi brand."

Mr. Gendreau concluded, "We will continue to be vigilant in limiting promotional discounts to sustain our improved gross profit margin. We will also maintain discipline in managing expenses, especially our fixed SG&A expenses, to drive operating leverage and deliver sustained bottom-line growth. At the same time, we will maintain focus on cash management to sustain strong Free Cash Flow⁴ generation, further enhancing Samsonite's flexibility in capital allocation to continue to deleverage our balance sheet, invest in organic growth, and return cash to our shareholders."

Table 1: Key Financial Highlights for the Three Months Ended December 31, 2023

Expressed in US$ millions, except per share data	Three months ended December 31, 2023	Three months ended December 31, 2022	Percentage increase (decrease) 2023 vs. 2022	Percentage increase (decrease) 2023 vs. 2022 excl. foreign currency effects¹
Net sales	948.5	818.5	15.9 %	15.8 %
Gross profit	568.3	462.9	22.8 %	22.9 %
Gross profit margin	59.9 %	56.5 %
Operating profit⁸	248.9	210.5	18.3 %	18.6 %
Operating profit excluding total non-cash impairment reversals and restructuring (reversals) charges^8, 9	164.6	128.0	28.6 %	29.1 %
Profit attributable to the equity holders	149.2	198.2	(24.8) %	(27.7) %
Adjusted Net Income¹⁰	95.8	147.8	(35.2) %	(39.2) %
Adjusted EBITDA6	181.0	142.5	27.0 %	27.4 %
Adjusted EBITDA margin³	19.1 %	17.4 %
Basic earnings per share –Expressed in US$ per share	0.103	0.138	(25.2) %	(28.1) %
Diluted earnings per share –Expressed in US$ per share	0.102	0.137	(25.6) %	(28.6) %
Adjusted basic earnings per share¹¹ – Expressed in US$ per share	0.066	0.103	(35.6) %	(39.5) %
Adjusted diluted earnings per share¹¹ – Expressed in US$ per share	0.066	0.102	(36.0) %	(39.9) %

2023 Fourth Quarter Highlights
For the three months ended December 31, 2023, Samsonite registered consolidated net sales of US$948.5 million, an increase of 15.8%¹ year-on-year, notwithstanding travel growth in markets that reopened earlier, including North America and Europe, beginning to normalize. The net sales increase during the fourth quarter of 2023 was driven primarily by Asia where the Group registered net sales growth of 40.6%¹ year-on-year. During the fourth quarter of 2023, net sales in the direct-to-consumer ("DTC") channel in North America increased by 7.7%¹ year-on-year driven by the Tumi and Samsonite brands. This was offset by wholesale channel net sales decreasing by 8.0%¹ year-on-year during the fourth quarter of 2023, primarily due to a shift in timing of shipments to certain wholesale customers following strong year-on-year wholesale net sales growth during the first nine months of 2023. Overall, net sales in North America for the fourth quarter of 2023 were flat¹ year-on-year. Net sales in Europe and Latin America for the fourth quarter of 2023 increased by 5.8%¹ and 32.9%¹ year-on-year, respectively. The Samsonite, Tumi and American Tourister brands recorded year-on-year net sales growth of 14.6%¹, 18.7%¹ and 14.6%¹ for the fourth quarter of 2023, respectively.

The Group's gross profit margin expanded to 59.9% in the fourth quarter of 2023, an increase of 340 basis points year-on-year, driven mainly by year-on-year gross profit margin improvements in all regions and Asia, the region with the highest gross profit margin, increasing its share of net sales, as well as overall lower promotional discounts. The Group increased its investment in marketing as planned, with marketing expenses rising to 7.2% of net sales in the fourth quarter of 2023 compared to 6.5% of net sales in the fourth quarter of 2022. The team remained disciplined in managing fixed selling, general and administrative ("SG&A") expenses, enabling Samsonite to achieve a 27.0% increase in Adjusted EBITDA⁶ to US$181.0 million and a 170-basis point expansion in Adjusted EBITDA margin³ to 19.1% for the fourth quarter of 2023, year-on-year.

The Group recorded an income tax expense of US$52.4 million for the three months ended December 31, 2023, compared to an income tax benefit of US$25.7 million for the fourth quarter of 2022, primarily due to year-on-year changes in unrecognized deferred tax assets. As a result, the Group's profit attributable to the equity holders decreased by US$49.1 million year-on-year to US$149.2 million for the three months ended December 31, 2023. The Group's Adjusted Net Income¹⁰ decreased by US$52.0 million year-on-year to US$95.8 million for the three months ended December 31, 2023.

Compared to the corresponding period in 2019, Samsonite's net sales for the fourth quarter of 2023 increased by 15.1%^{1, 2, 12}; gross profit margin increased by 580 basis points; Adjusted EBITDA⁶ and Adjusted EBITDA margin³ increased by 25.0% and 400 basis points, respectively; and Adjusted Net Income¹⁰ increased by 68.4%; despite marketing spend as a percentage of net sales rising by 290 basis points. This remarkable improvement from 2019 highlights the Group's strong operating leverage and fundamentally enhanced margin profile as net sales continued to grow.

Table 2: Key Financial Highlights for the Year Ended December 31, 2023

Expressed in US$ millions,

except per share data

Year ended
December 31, 2023

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