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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Samsonite International S.A.    1910   LU0633102719

SAMSONITE INTERNATIONAL S.A. (1910)
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Samsonite International S A : Announces 2016 Annual Results – Net Sales Hits New Record of US$2.8 Billion

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03/16/2017 | 12:11am CET
Samsonite International S.A. Announces 2016 Annual Results Net Sales Hits New Record of US$2.8 Billion

Highlights

  • The Group's net sales for the year ended December 31, 2016 increased by 17.3% on a constant currency basis1 to a record US$2,810.5 million. US Dollar reported net sales increased by 15.5%.

  • The Tumi brand contributed net sales of US$275.8 million during the five month period from August 1, the date of acquisition, through December 31, 2016.

  • Excluding Tumi, the Group's organic business delivered solid growth with net sales increasing by 6.0%1.

  • All regions delivered positive constant currency growth:

    • Asia - 9.9%1 year-on-year net sales growth (+4.0%1 excluding Tumi).

    • North America - 26.8%1 year-on-year net sales growth (+3.9%1 excluding Tumi).

    • Europe - 16.1%1 year-on-year net sales growth (+10.3%1 excluding Tumi).

    • Latin America - 17.4%1 year-on-year net sales growth (+17.4%1 excluding Tumi).

  • All product categories achieved double-digit year-on-year constant currency growth in net sales:

    • Travel - 11.4%1 year-on-year net sales growth (+4.5%1 excluding Tumi).

    • Business - 38.2%1 year-on-year net sales growth (+3.8%1 excluding Tumi).

    • Casual - 16.4%1 year-on-year net sales growth (+6.1%1 excluding Tumi).

    • Accessories - 47.3%1 year-on-year net sales growth (+26.4%1 excluding Tumi).

  • Excluding Tumi, e-commerce (comprising direct-to-consumer e-commerce and wholesale sales to e- retailers) continued to see the strongest growth among the Group's distribution channels with net sales increasing by 19.7%1 year-on-year.

  • Gross profit increased by 18.9% year-on-year to US$1,521.0 million. Gross profit margin increased to 54.1% during 2016 compared to 52.6% in 2015.

  • Operating profit increased by US$22.3 million, or 7.2%, to US$331.2 million. Excluding acquisition- related costs, operating profit increased by 18.8% year-on-year.

  • Profit attributable to the equity holders increased by 29.4% year-on-year to US$255.7 million. Excluding the tax-effected acquisition-related costs and the tax benefit realized on the liquidation of the Group's principal defined benefit pension plan in the U.S.2, the Group's profit attributable to equity holders increased by US$23.6 million, or 11.6%, despite a year-on-year increase in interest expense of US$40.5 million, primarily associated with the Senior Credit Facilities utilized to finance the Tumi acquisition.

  • Adjusted Net Income3 increased by 18.9% to US$257.9 million, despite a year-on-year increase in interest expense of US$40.5 million, primarily associated with the Senior Credit Facilities utilized to finance the Tumi acquisition.

    1 Results stated on a constant currency basis, a non-IFRS measure, are calculated by applying the average exchange rate of the previous year to current year local currency results.

    2 During 2016, the Group purchased an annuity to liquidate its principal defined benefit pension plan in the U.S. In conjunction with

    this liquidation, the Group recorded a US$56.8 million tax benefit related to the derecognition of deferred tax liabilities that originated from the contributions to the pension plan in prior years.

    3 Adjusted Net Income, a non-IFRS measure, eliminates the effect of a number of costs, charges and credits and certain other non-

    cash charges, along with their respective tax effects, that impact the Group's US Dollar reported profit for the year, which the Group believes helps to give securities analysts, investors and other interested parties a better understanding of the Group's underlying financial performance.

  • Adjusted EBITDA4 increased by 21.1% year-on-year to US$485.6 million. Excluding the Adjusted EBITDA4 attributable to Tumi, Adjusted EBITDA4 was US$421.3 million, an increase of 5.0%.

  • Adjusted basic earnings per share5 increased to US$0.183 in 2016 from US$0.154 per share for the previous year. Adjusted diluted earnings per share5 increased to US$0.182 in 2016 from US$0.154 per share for the previous year. Basic and diluted earnings per share as reported increased to US$0.181 from US$0.140 per share for the previous year.

  • The Group generated strong operating cash flow of US$260.8 million in 2016 compared to US$259.0 million recorded in the previous year, despite a US$34.2 million increase in cash paid for interest, primarily associated with the Senior Credit Facilities utilized to finance the Tumi acquisition, and the US$37.3 million increase in acquisition-related costs. The Group ended the year in a net debt position of US$1,571.2 million, primarily as a result of the debt incurred to finance the Tumi acquisition.

  • On February 2, 2017, the Group completed the refinancing of the Senior Credit Facilities, which is expected to result in a reduction in cash interest payments in the first full year after refinancing of approximately US$16 million.

  • On March 15, 2017, the Company's Board of Directors recommended that a cash distribution in the amount of US$97.0 million, or approximately US$0.0687 per share, be made to the Company's shareholders, a 4.3% increase from the US$93.0 million distribution paid in 2016.

HONG KONG, March 16, 2017 - Samsonite International S.A. (the "Company", together with its consolidated subsidiaries "Samsonite" or "the Group"; SEHK stock code: 1910), the world's largest travel luggage company, today announced its annual results for the year ended December 31, 2016.

The Group's net sales increased by 17.3%1 to US$2,810.5 million for the year ended December 31, 2016. US Dollar reported net sales increased by 15.5%. Excluding amounts attributable to the Tumi brand, which was acquired on August 1, 2016, net sales increased by 6.0%1 as the Group continued to benefit from the steady growth in global travel and tourism6.

Gross profit for year ended December 31, 2016 increased by US$242.0 million, or 18.9%, to US$1,521.0 million, up from US$1,279.0 million for 2015. Gross profit margin increased to 54.1% for 2016 from 52.6% for 2015, partly due to the addition of the Tumi brand which enjoys higher margins. Excluding amounts attributable to Tumi, gross profit margin increased to 53.0% as a result of a higher mix of sales coming from the direct-to-consumer channel (including direct-to-consumer e-commerce) and a reduction in certain product costs.

4 Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), a non-IFRS measure, eliminates the effect of a number of costs, charges and credits and certain other non-cash charges, which the Group believes is useful in gaining a more complete understanding of its operational performance and of the underlying trends of its business.

5 Adjusted basic and diluted earnings per share, both non-IFRS measures, are calculated by dividing Adjusted Net Income by the

weighted average number of shares outstanding during the year.

6 International tourist arrivals grew by 3.9% to reach a total of 1,235 million, according to the latest UNWTO World Tourism

Barometer. Some 46 million more tourists (overnight visitors) travelled internationally last year compared to 2015. Based on current trends, the outlook of the UNWTO Panel of Experts and economic prospects, UNWTO projects international tourist arrivals worldwide to grow at a rate of 3% to 4% in 2017.

The Group's profit attributable to the equity holders increased by 29.4% year-on-year to US$255.7 million. Excluding the tax-effected acquisition-related costs and the tax benefit realized on the liquidation of the Group's principal defined benefit pension plan in the U.S., the Group's profit attributable to the equity holders increased by US$23.6 million, or 11.6%, despite a year-on-year increase in interest expense of US$40.5 million, primarily associated with the Senior Credit Facilities utilized to finance the Tumi acquisition.

Adjusted EBITDA4 increased by US$84.5 million, or 21.1%, to US$485.6 million for the year ended December 31, 2016, up from US$401.2 million for 2015. Adjusted EBITDA4 margin increased to 17.3% for 2016 compared to 16.5% the previous year. Excluding the Adjusted EBITDA4 attributable to Tumi, Adjusted EBITDA4 was US$421.3 million, an increase of 5.0%. Adjusted Net Income3 increased by 18.9% year-on-year to US$257.9 million for 2016, despite a year-on-year increase in interest expense of US$40.5 million, primarily associated with the Senior Credit Facilities utilized to finance the Tumi acquisition.

Adjusted basic earnings per share5 increased to US$0.183 in 2016 from US$0.154 per share in 2015. Adjusted diluted earnings per share5 increased to US$0.182 in 2016 from US$0.154 per share for the previous year. Basic and diluted earnings per share as reported increased to US$0.181 for the year ended December 31, 2016 compared to US$0.140 per share for the previous year. The Board has recommended that a cash distribution in the amount of US$97.0 million, or approximately US$0.0687 per share, be made to the Company's shareholders, a 4.3% increase from the US$93.0 million cash distribution paid in 2016.

Commenting on the results, Mr. Tim Parker, Chairman, said, "Looking back over 2016, the acquisition of Tumi has undoubtedly been the year's most significant event, and I believe we have further strengthened the position of the Company in the global travel lifestyle marketplace. Looking at the performance of the business excluding Tumi, we were pleased with the 6.0% growth in constant currency net sales, and also on the same basis, the increase in Adjusted EBITDA4 of 6.8% to US$421.3 million. This was a creditable result, given overall economic conditions, and better than we might have expected at the half-year point."

Mr. Ramesh Tainwala, Chief Executive Officer, added, "2016 has been Samsonite's most momentous year since our IPO in 2011. The acquisition of Tumi fulfilled a long-held ambition for Samsonite, and establishes a strong multi-brand platform to drive long-term growth across a broad range of price points and product categories. All of our regions delivered solid constant currency net sales growth in 2016, and looking ahead, we will continue to focus on implementing our multi-brand, multi-category and multi-channel strategy. We continue to focus on growing e-commerce as a channel, and net sales in the Group's total e-commerce business increased by 19.7%1 year-on-year in 2016, excluding Tumi. We believe that the Group has the potential to become a significant player in the bags and luggage e-commerce channel."

Table 1: Key Financial Highlights

Year ended December 31, 2016 US$ millions

Year ended December 31, 2015 US$ millions

Percentage increase (decrease) 2016 vs. 2015

Percentage increase (decrease) 2016 vs. 2015

excl. foreign currency effects1

Net sales

2,810.5

2,432.5

15.5%

17.3%

Profit attributable to the equity holders

255.7

197.6

29.4%

32.0%

Adjusted Net Income3

257.9

216.9

18.9%

20.5%

Adjusted EBITDA4

485.6

401.2

21.1%

22.8%

Basic and diluted earnings per share (US$)

0.181

0.140

29.3%

32.1%

Adjusted basic earnings per share5 (US$)

0.183

0.154

18.8%

20.1%

Adjusted diluted earnings per share5 (US$)

0.182

0.154

18.2%

20.1%

Recommended cash distribution

97.0

93.0

4.3%

4.3%

Tumi7

The acquisition of Tumi was completed on August 1, 2016. Tumi is a leading global premium lifestyle brand offering a comprehensive line of business bags, travel luggage and accessories. The brand is consistently recognized as "best in class" for the high quality, durability, functionality and innovative design of its products, which range from its iconic black ballistic business cases and travel luggage synonymous with the modern business professional, to travel accessories, women's bags and outdoor apparel.

The Tumi brand recorded net sales of US$275.8 million during the five month period from August 1, the date of acquisition, through December 31, 2016. This represents an increase of US$24.4 million, or 9.7%, compared to the same period in 2015. The growth was driven partly by the impact of consolidating Tumi Japan which Tumi acquired on January 1, 2016. Excluding the impact of Tumi Japan, net sales increased by 5.8%, reflecting a noticeable improvement from the net sales growth of 6.8% (0.8% excluding Tumi Japan) during the first half of 2016. Adjusted EBITDA4 for the period of August through December 2016 was US$64.3 million, which included an approximately US$10 million increase in advertising spend soon after the completion of the acquisition to enhance brand awareness and drive sales growth, partially offset by initial cost savings from the elimination of C-suite and other redundancies as a result of the ongoing back office integration.

7 Comparative figures for Tumi's five month period ended December 31, 2015 are based on Tumi's internal management reporting because Tumi did not otherwise publish financial statements for such five month period.

Samsonite International SA published this content on 16 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 15 March 2017 23:10:13 UTC.

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Financials ($)
Sales 2018 3 829 M
EBIT 2018 475 M
Net income 2018 237 M
Debt 2018 1 453 M
Yield 2018 2,27%
P/E ratio 2018 16,56
P/E ratio 2019 13,62
EV / Sales 2018 1,49x
EV / Sales 2019 1,35x
Capitalization 4 250 M
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Number of Analysts 12
Average target price 3,86 $
Spread / Average Target 30%
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Managers
NameTitle
Kyle Francis Gendreau Chief Executive Officer & Executive Director
Timothy Charles Parker Chairman
Reza Taleghani Chief Financial Officer
Andrew David Wells Chief Information Officer
Keith Hamill Independent Non-Executive Director
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