Samsonite International S.A. Announces Final Results for the Year Ended December 31, 2019

Tageszeitungen (Symbolbild). pixabay.com

PR Newswire

HONG KONG, March 18, 2020

HONG KONG, March 18, 2020 /PRNewswire/ -- Samsonite International S.A. ("Samsonite" or "the Company", together with its consolidated subsidiaries, "the Group"; SEHK stock code: 1910), the world's best-known and largest lifestyle bag and travel luggage company, today announced its final results for the year ended December 31, 2019 ("2019").

Overview
Commenting on the results, Mr. Kyle Gendreau, Chief Executive Officer, said, "In 2019, we continued to make steady progress in repositioning Samsonite for sustained growth and improved profitability, while navigating sales and margin pressures in some of our key markets. We are pleased with the improvements we achieved in controlling costs, managing working capital, generating cash flow and deleveraging our balance sheet. These improvements, along with our dedicated teams, strong brands, global scale and diversified sourcing base and supply chain strengthen Samsonite's resilience in the face of challenging headwinds and provide us with the capacity to continue investing in the business to deliver sustainable growth and long-term shareholder value."

Mr Gendreau continued, "Our disciplined approach to managing working capital, generating cash flow and deleveraging the balance sheet continued to deliver positive results. We made substantial headway managing down our inventories, which helped to drive an improvement of 30 basis points in our net working capital efficiency¹ to 13.3%, as well as a US$98.7 million, or 32.1%, year-on-year increase in operating cash flow to US$406.1 million² during 2019. Separately, cash used in investing activities during 2019 decreased by US$44.2 million year-on-year, mainly as a result of reduced capital expenditures³, partially offset by increased investments in software⁴ to support our ongoing digital initiatives."

For the year ended December 31, 2019, the Group made payments on its non-current/long-term loans and borrowings totaling US$129.8 million, including voluntary prepayments of principal totaling US$100.2 million on its senior secured term loan B made during the fourth quarter of 2019, capitalizing on the Group's strong cash flow from operations. The Group ended 2019 with a net debt position of US$1,305.3 million⁵, an improvement of US$202.8 million year-on-year, with US$647.0 million available on its revolving credit facility. The Group's pro forma net leverage ratio⁶ was 2.63:1.00 as of December 31, 2019, and its pro forma consolidated cash interest coverage ratio⁷ was 8.16:1.00 for the year ended December 31, 2019.

The Group's 2019 constant currency⁸ net sales decreased slightly by 1.8%⁸ year-on-year, with all regions achieving constant currency net sales gains except North America (-8.0%⁸): Asia (+1.5%⁸), Europe (+3.2%⁸) and Latin America (+2.8%⁸). These encouraging results in 2019 were achieved notwithstanding headwinds in four key markets, including the United States ("U.S."), which was affected by increased tariffs on products sourced from China and lower foreign tourist traffic, the Hong Kong domestic market⁹, South Korea and Chile. In addition, strong sales growth in China was partially offset by a planned reduction in business-to-business ("B2B") sales during the first half of 2019. Nevertheless, leveraging our global reach and scale, as well as our diversified portfolio of leading brands, we continued to achieve solid constant currency net sales growth in both our key markets including China (+5.5%⁸; +10.1%⁸ excluding B2B), Japan (+5.2%⁸), India (+10.4%⁸), Germany (+7.3%⁸) and France (+3.5%⁸), as well as important emerging markets such as Russia (+18.8%⁸), Mexico (+9.3%⁸), Indonesia (+17.3%⁸) and Turkey (+23.5%⁸) during 2019.

The Group continued to make solid progress pursuing its long-term growth objectives, particularly the Tumi brand's international expansion. For the year ended December 31, 2019, Tumi delivered a 10.7%⁸ net sales increase outside North America, and overall growth of 1.8%⁸. American Tourister achieved constant currency net sales gains of 1.0%⁸, while constant currency net sales of the Samsonite brand remained stable (-0.5%⁸). Excluding the U.S., the Hong Kong domestic market⁹, South Korea, Chile and China B2B sales, the Samsonite, Tumi, and American Tourister brands recorded net sales gains of 2.2%⁸, 14.0%⁸ and 7.2%⁸, respectively, underscoring the strong global brand equity the Group's core brands enjoy within their respective price segments.

The Group's efforts to grow its presence in the direct-to-consumer ("DTC"¹⁰) e-commerce channel continued to gain traction, driving a 16.2%⁸ increase in net sales through this channel, excluding eBags which is going through a period of adjustment as we reduce sales of third-party brands to improve profitability. Our DTC e-commerce business achieved strong net sales growth in each of our regions: North America (+13.1%⁸, excluding eBags), Asia (+18.5%⁸), Europe (+15.5%⁸) and Latin America (+76.0%⁸).

ARIVA.DE Börsen-Geflüster

Kurse

Samsonite International SA ADR

14,715 $

-2,38%

The Group's profitability was adversely affected by the combination of reduced net sales and lower gross profit margin largely due to the incremental tariffs imposed by the U.S. on products sourced from China, along with the impact of investments in the DTC distribution channel, particularly in connection with bricks-and-mortar retail stores that opened in 2017 and 2018. Beginning in the second half of 2018, the Group took swift and targeted actions to diversify sourcing as well as tighten expense and working capital controls, and it accelerated these actions in 2019. In addition, the Group temporarily reduced its marketing outlay slightly by 60 basis points to 5.2% of 2019 net sales to help mitigate the pressure on the Group's profitability.

The Group's Adjusted EBITDA¹¹^{, 12} decreased by US$100.1 million, or 16.9%, to US$492.2 million for the year ended December 31, 2019 from US$592.3 million for the previous year (as recast to adjust for IFRS 16 impacts)¹⁵, primarily due to the effect of lower net sales and the decrease in gross profit margin, which was largely due to the incremental tariffs imposed by the U.S. on products sourced from China, as well as the effect of investments in the DTC distribution channel, particularly in connection with bricks-and-mortar retail stores that were opened in 2017 and 2018, partially offset by a reduction in marketing expenses. Consequently, the Group's Adjusted EBITDA margin^{12, 13} decreased by 210 basis points to 13.5% during 2019 from 15.6% for the previous year (as recast to adjust for IFRS 16 impacts)¹⁵. The Group's Adjusted Net Income^{12, 14} decreased by US$63.2 million, or 22.6%, to US$215.9 million for the year ended December 31, 2019 from US$279.1 million for the year ended December 31, 2018 (as recast to adjust for IFRS 16 impacts)¹⁵.

Outlook and Strategy
Commenting on the 2020 outlook, Mr. Gendreau said, "As we turn to 2020, the COVID-19 coronavirus outbreak has caused a global health emergency and travel disruptions around the world. Our top priority has been and will continue to be the health and safety of our employees and their families, as well as our customers and business partners. We have proactively implemented preventative health measures recommended by local health authorities and we continue to monitor the situation closely."

Mr. Gendreau concluded, "While the extent and duration of the COVID-19 outbreak remain uncertain, we are reassured by actions taken by governments and health authorities around the world. Nonetheless, the outbreak will have a negative impact on our performance in the first half of 2020. That said, we have a strong record of managing through past travel disruptions, and the actions we are taking, coupled with liquidity in excess of US$1.2 billion, we believe provide us with adequate capacity to navigate through the current challenges."

"Due to the inherent uncertainties about the extent and duration of the COVID-19 outbreak and its impacts on Samsonite for the balance of this year, our Board has decided not to recommend the payment of a cash distribution to our shareholders in 2020."

"Once we navigate the current challenges, we will continue to invest in our long-term growth objectives, including the further international expansion of the Tumi brand, our DTC e-commerce growth strategy, as well as research and development to drive additional product innovations. We also will continue to diversify our sourcing base outside of China and renegotiate prices and payment terms with vendors to further strengthen our supply chain and to mitigate the impact of the U.S. tariff increases. In 2019, the Group sourced approximately 33% of its global product purchases from outside China, compared to approximately 28% in 2018, and we plan to further diversify our supply chain outside China in 2020."

"2020 is Samsonite's 110^th anniversary. Throughout our history, Samsonite's values of respecting our people, the planet and our impact on the world have endured. How we treat each other and how we care for the world we live in are guiding values that, together with our heritage of industry leadership, make it a natural step for Samsonite to take the lead on sustainability. We have been focused on integrating our ESG¹⁶ principles into our business practices for several years. We completed a global materiality assessment during 2018 to help us identify and prioritize the sustainability issues that matter most to our business and our stakeholders. Following this assessment, we developed our global long-term sustainability strategy, 'Our Responsible Journey'. Launched on March 11, 2020, 'Our Responsible Journey' is our roadmap to accelerate the systematic implementation of sustainable business practices globally, focusing our efforts on the four areas most material to the business: Product Innovation, Carbon Action, Thriving Supply Chain, and People Focused, with the long-term goal for Samsonite to become carbon neutral by 2025. We are proud of what we have achieved to date, and we are excited by the prospects ahead."

Table 1: Key Financial Highlights for the Year Ended December 31, 2019

	As reported		As adjusted for IFRS 16¹⁵	As reported
US$ millions, except per share data	Year ended December 31, 2019	Year ended December 31, 2018	Year ended December 31, 2018	Percentage increase (decrease) 2019 vs. 2018	Percentage increase (decrease) 2019 vs. 2018 excl. foreign currency effects⁸
Net sales	3,638.8	3,797.0	3,797.0	(4.2)%	(1.8)%
Operating profit¹⁷	283.0	467.4	482.3	(39.4)%	(38.4)%
Profit attributable to the equity holders¹⁸	132.5	236.7	223.6	(44.0)%	(43.3)%
Adjusted Net Income^{12, 14}	215.9	294.5	279.1	(26.7)%	(25.8)%
Adjusted EBITDA^{11, 12}	492.2	613.6	592.3	(19.8)%	(17.9)%
Adjusted EBITDA Margin^{12, 13}	13.5%	16.2%	15.6%
Basic earnings per share ("EPS")¹⁹ – US$ per share	0.093	0.166	0.157	(44.1)%	(43.5)%
Diluted EPS¹⁹ – US$ per share	0.093	0.165	0.156	(43.8)%	(43.1)%
Adjusted Basic EPS²⁰ – US$ per share	0.151	0.206	0.195	(26.9)%	(26.0)%
Adjusted Diluted EPS²⁰ – US$ per share	0.151	0.205	0.194	(26.4)%	(25.6)%

The Group's performance for the year ended December 31, 2019 is discussed in greater detail below.

Net Sales
The Group's US Dollar reported net sales were US$3,638.8 million for the year ended December 31, 2019, reflecting a decrease of US$158.2 million, or 4.2% (-1.8% constant currency⁸), compared to the year ended December 31, 2018. The net sales decline was due to unfavorable foreign currency translation effects of US$90.3 million, as well as headwinds faced by the business in the United States, the Hong Kong domestic market⁹, South Korea, and Chile, along with a planned reduction of sales through the B2B channel during the first half of 2019 in China. Excluding these markets, the Group's US Dollar reported net sales increased by US$25.5 million, or 1.3% (+4.9% constant currency⁸), for the year ended December 31, 2019 compared to the previous year.

Net Sales Performance by Region
North America
The Group's net sales in North America decreased by 8.0%⁸ year-on-year to US$1,363.4 million for year ended December 31, 2019. The incremental tariffs imposed by the U.S. on products sourced from China and reduced Chinese tourist traffic in gateway markets in the U.S. negatively impacted the Group's performance. The U.S. business was also impacted by the Group's strategic decision to reduce the sales of third-party brands sold through its eBags e-commerce website to improve profitability. Excluding eBags, net sales in North America decreased by 6.5%⁸ for the year ended December 31, 2019 compared to the previous year.

Asia
The Group's business in Asia was impacted by a planned reduction in B2B sales during the first half of 2019 in China, challenging market conditions in the Hong Kong domestic market⁹ and weak consumer sentiment in South Korea. Excluding these impacts, the Group's net sales for the Asia region increased by 6.8%⁸, year-on-year. Overall, the Group's net sales in Asia increased by 1.5%⁸ year-on-year to US$1,313.4 million during year ended December 31, 2019.

Europe
The Group recorded a net sales increase of 3.2%⁸ in Europe to US$792.2 million during 2019. This constant currency net sales growth was driven by Russia (+18.8%⁸), Germany (+7.3%⁸) and France (+3.5%⁸). These gains were partially offset by declines in the United Kingdom (-4.4%⁸), Italy (-2.1%⁸) and Spain (-0.8%⁸), where increased economic and political uncertainty impacted consumer sentiment and sales.

Mehr Nachrichten zur Samsonite International SA ADR Aktie kostenlos abonnieren

E-Mail-Adresse

Benachrichtigungen von ARIVA.DE
(Mit der Bestellung akzeptierst du die Datenschutzhinweise)

Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte.