Samsonite International S.A. Announces 2014 Final Results

HONG KONG, March 17, 2015 /PRNewswire/ --

Highlights

• Samsonite posted double-digit growth in both net sales and Adjusted EBITDA for the fifth year running.
• Samsonite's net sales for the year ended December 31, 2014 increased by 17.3%[1] to a record US$2,350.7 million with strong growth across all regions. US Dollar reported net sales increased by 15.4%.
  • Asia -- 18.0%[1] year-on-year net sales growth.
  • North America -- 22.9%[1] year-on-year net sales growth.
  • Europe -- 10.4%[1] year-on-year net sales growth.
  • Latin America -- 15.7%[1] year-on-year net sales growth.
• Profit attributable to shareholders increased to US$186.3 million, representing year-on-year growth of 5.8%, or 16.3% excluding acquisition costs and foreign exchange translation losses.
• Adjusted Net Income[2] increased to US$206.3 million, representing year-on-year growth of 9.0%, or 12.3% excluding foreign exchange translation losses.
• Adjusted EBITDA[2] increased to US$384.3 million, representing 13.8% year-on-year growth.
• Net sales of the American Tourister and High Sierra brands continued to deliver strong growth with an increase of 19.0%[1] and 24.9%[1] year-on-year, respectively, while the Samsonite and Hartmann brands saw solid net sales growth of 10.2%[1] and 10.3%[1], respectively.
• Good progress was made across all four product categories.
  • Travel -- net sales increased by 10.9%[1] to US$1,654.4 million. 
  • Casual -- net sales increased by 25.1%[1] to US$252.1 million.
  • Business -- net sales increased by 34.6%[1] to US$256.2 million.
  • Accessories -- net sales increased by 76.3%[1] to US$147.2 million.
• Three acquisitions were completed during the year, which together significantly expand the Group's brand and product offering:
  • Lipault, a French luggage brand known for its functional and fashionable designs and appeal to female travellers, in April 2014.
  • Speck Products, a leading designer and distributor of slim protective cases for personal electronic devices that are marketed under the Speck® brand, in May 2014.
  • Gregory, a premium technical outdoor backpack brand, in July 2014.
• Subsequent to 2014, the Group acquired Rolling Luggage in February 2015, providing the Group with a significant retail footprint in some of the world's leading airports and further expanding the Group's portfolio of retail store locations.
• The Group generated US$229.9 million of cash from operating activities during 2014 compared to US$193.0 million during 2013, resulting in a net cash position of US$72.9 million at year-end, providing a solid platform to execute future growth plans.
• Adjusted basic earnings per share[2] increased to US$0.147 in 2014 from US$0.134 for the previous year. Basic earnings per share as reported increased to US$0.132 from US$0.125.
• The Board recommended a cash distribution to shareholders of US$88.0 million, or approximately US$0.0625 per share, up 10% from the US$80.0 million distribution paid in the previous year. 

[1]	Excluding foreign currency effects.
[2]	This non-IFRS measure eliminates the effect of a number of non-recurring costs and charges and certain other non-cash items that impact the Group's reported profit for the year. The Group believes the adjusted figures are useful in gaining a more complete understanding of its operational performance and of the underlying trends of its business.

Samsonite International S.A. ("Samsonite" or "the Group"; stock code 1910), the world's largest travel luggage company, today announced its results for the year ended December 31, 2014.

The Group's net sales increased by 15.4% to a record US$2,350.7 million for the year ended December 31, 2014. Excluding foreign currency effects, net sales increased by 17.3%. Excluding amounts attributable to acquisitions made in 2014, net sales increased by US$203.2 million, or 10.0%, and by 11.9% on a constant currency basis. Samsonite continued to benefit from the worldwide growth in travel and tourism as international tourist arrivals grew by 4.7% in 2014 to 1.13 billion travellers, according to the World Tourism Organization (UNWTO).  

Reported profit for the year attributable to shareholders increased by 5.8% to US$186.3 million. Excluding acquisition costs and foreign exchange translation losses, profit attributable to shareholders increased by 16.3%. The Group's Adjusted Net Income increased by 9.0%, to US$206.3 million and by 12.3% excluding foreign exchange translation losses. Adjusted EBITDA increased by 13.8% to US$384.3 million for the year ended December 31, 2014.

Adjusted basic earnings per share increased to US$0.147 in 2014 from US$0.134 in 2013. Basic earnings per share as reported increased to US$0.132 for the year ended December 31, 2014 compared to US$0.125 for the previous year. The Board has recommended that a cash distribution in the amount of US$88.0 million, or approximately US$0.0625 per share, be made to the Company's shareholders. This represents a 10% increase from the distribution paid in the previous year.

Mr. Tim Parker, Chairman, said, "Since the Group's listing in 2011, we have achieved considerable growth, and today Samsonite is the leader in travel goods in almost every significant world market. The Group continued its strong momentum in 2014, achieving another year of excellent progress. The next stage of our growth will see the Group develop on a much more ambitious scale as we intend to not only extend our leading position in travel goods with the Samsonite and American Tourister brands, but we will also continue to diversify our brands, product offering and distribution channels. We firmly believe that our business has the capacity to double in size over the next few years, and the progress we have made during 2014 is consistent with our long-term ambition."

Mr. Ramesh Tainwala, Chief Executive Officer, added, "We are pleased to report another outstanding set of results for the fifth year running, reflecting the consistent and successful execution of Samsonite's growth strategy. Our business grew nicely across all geographies, brands and product categories in 2014, which is a testament to our ability to deliver best in class products catering to the needs of consumers in individual markets. The Group's strong performance also demonstrates the resilience of the multi-brand, multi-category and multi-channel model we have established over the last few years as part of our aim to strategically diversify the business. In line with this strategy, last year we acquired three very different, yet complementary brands, Lipault, Speck and Gregory, which together significantly extend our product offering and which we expect will contribute considerably to our topline as we leverage our global distribution and marketing platform to expand them into new markets. Our most recent buy, Rolling Luggage, coming at the start of 2015, establishes a strong retail presence for us in key international airport locations as we push to expand our retail points of sales globally. Looking ahead, we will stay the course of our clear and defined strategy to achieve our goals for sustained growth."

Table 1: Key Financial Highlights

	Year ended December 31, 2014 US$ (Million)	Year ended December 31, 2013 US$ (Million)	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Net Sales	2,350.7	2,037.8	15.4%	17.3%
Profit attributable to  shareholders	186.3	176.1	5.8%	-
Adjusted Net Income	206.3	189.2	9.0%	-
Adjusted EBITDA	384.3	337.7	13.8%	-
Basic and diluted earnings per share (US$)	0.132	0.125	5.6%	-
Adjusted basic earnings per share (US$)	0.147	0.134	9.7%	-
Recommended cash distribution	88.0	80.0	10%	-

Net Sales by Brand

Net sales of the Group's flagship brand, Samsonite, increased by 8.6% year-on-year to US$1,535.7 million, accounting for 65.3% of the Group's net sales, down from 69.4% for 2013, reflecting continuing efforts to  diversify the Group's brand portfolio. Excluding foreign currency effects, net sales of the Samsonite brand increased by 10.2%.

The Group's mid-priced brand, American Tourister, recorded net sales of US$504.2 million, an increase of 17.4%, or 19.0% on a constant currency basis, from 2013. This growth was largely driven by Asia, which saw net sales for the brand increase by 17.5% in constant currency terms in 2014, accounting for 71.5% of the increase in overall American Tourister brand sales for the year.  While accounting for a smaller contribution to the Group's overall net sales than Asia, net sales of the American Tourister brand also saw considerable growth in Europe, increasing by 54.8% on a constant currency basis.  

The net sales growth of both the Samsonite and American Tourister brands was largely the result of expanded product offerings and further penetration of existing markets, which were supported by the Group's targeted advertising activities.

The High Sierra and Hartmann brands, both acquired by the Group in 2012, posted constant currency net sales growth of 24.9% and 10.3%, respectively, as the Group pursued further geographical expansion of the two brands.  Hartmann was launched globally in the fourth quarter of 2014 with the opening of the New York Madison Avenue flagship store in October, followed by the Tokyo Ginza flagship in December, with a total of over 350 points of sales around the world as at December 31, 2014, including key cities such as London, Paris, Moscow, Beijing, Shanghai, Seoul, Hong Kong and Singapore.  Meanwhile, the High Sierra brand continued its successful expansion in Asia, Europe and Latin America in 2014.

The Group made three acquisitions in 2014: Lipault, acquired in April; Speck Products, acquired in May, and; Gregory Mountain Products, acquired in July. For the year ended December 31, 2014, net sales of the Speck, Gregory and Lipault brands amounted to US$91.6 million, US$12.6 million and US$5.5 million, respectively. The integration of all three of these businesses is substantially complete and plans are well advanced to expand product ranges and distribution.

Mr. Tainwala said, "Lipault, Speck and Gregory are wonderful new additions to our brand portfolio.  Samsonite remains our flagship, but as we diversify and increase our product offering, it will come to account for a smaller proportion of our overall sales. American Tourister continued to drive growth, most notably in Asia, but also in other regions such as Europe. As we continue the broader geographical rollout of High Sierra and Hartmann, we're seeing very encouraging signs from consumers, and expect both of these brands will be drivers of considerable growth for our business going forward. Our portfolio now comprises a diverse set of well-respected brands in both the travel and non-travel categories and spanning a wide range of price points. In line with our strategic objectives, we will continue to further diversify our offering by monitoring the market for attractive acquisition opportunities."

Table 2: Net Sales by Brand

Brand	Year ended December 31, 2014 US$'000	Year ended December 31, 2013 US$'000	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Samsonite	1,535,708	1,413,703	8.6%	10.2%
American Tourister	504,222	429,309	17.4%	19.0%
High Sierra	89,239	72,007	23.9%	24.9%
Hartmann	16,947	15,481	9.5%	10.3%
Speck[3]	91,565	-	-	nm[6]
Gregory[4]	12,613	-	-	nm[6]
Other[5]	100,413	107,312	(6.4)%	2.4%
[3] The Speck brand was acquired on May 28, 2014 [4] The Gregory brand was acquired on July 23, 2014 [5] Other includes Lipault, Saxoline, Xtrem and others [6] nm Not meaningful due to acquisition during 2014

Net Sales by Region

The Group continued to achieve strong double-digit constant currency sales growth in all regions in 2014, led by Asia and North America.

The Group's net sales in Asia increased by 16.1% to US$892.3 million for the year ended December 31, 2014 compared to the previous year. Excluding foreign currency effects, net sales increased by 18.0%. Along with additional product offerings and points of sale expansion, the success of the Group's business in Asia has been bolstered by a continued focus on country-specific product and marketing strategies to drive increased awareness of and demand for the Group's products. The sales growth in the region was largely driven by the American Tourister brand, net sales of which accounted for 43.2% of the increase in net sales for the region. The Samsonite Red sub-brand in the Group's casual category, which was first launched in South Korea in 2010 and is aimed at young fashion-conscious consumers, continued to be popular, with net sales increasing by 91.9% on a constant currency basis to US$57.9 million in 2014 on the back of successful new product introductions and marketing programs. On the back of the success of American Tourister, Samsonite and Samsonite Red, China continued to lead in terms of sales and performance, contributing 25.5% of the region's net sales and recording 18.4% year-on-year net sales growth, or 18.7% on a constant currency basis, despite a slowing economy which affected consumer spending.  Japan posted strong constant currency net sales gains of 32.3%, driven by the success of the Samsonite brand and the Gregory acquisition. South Korea, with constant currency net sales up 12.8% year-on-year, continued to experience robust sales growth driven by American Tourister and Samsonite Red, while India and Hong Kong posted healthy constant currency net sales gains of 19.9% and 12.2%, respectively.

The Group's net sales in North America, which includes the United States and Canada, increased by 22.4% to US$761.3 million for the year ended December 31, 2014 compared to the previous year.  Excluding foreign currency effects, net sales increased by 22.9%. The Group's continued focus on marketing and selling products designed to appeal to North American consumers, as well as the addition of the Speck and Gregory brands, contributed to the net sales growth in the region. Excluding net sales attributable to Speck and Gregory, net sales increased by 6.9%, or 7.3% on a constant currency basis. Net sales across both the Samsonite and American Tourister brands, as well as across the travel and casual categories, all recorded solid year-on-year constant currency growth, while the business and accessories categories performed particularly well on the back of the Speck acquisition.  

The Group's net sales in Europe increased by 8.3% to US$557.9 million for the year ended December 31, 2014 compared to the previous year.  Excluding foreign currency effects, net sales for the European region increased by 10.4%. Strong local currency sales growth was achieved in several markets due to the positive sell-through of new product introductions, including new product lines manufactured using the Curv material and other lines of polypropylene suitcases, as demand for hardside luggage continued to grow in the region. Germany, the Group's leading market in Europe representing 14.7% of total regional net sales, achieved 10.6% constant currency sales growth during the year. The United Kingdom also posted strong growth, with constant currency net sales increasing by 12.2% year-on-year. The Group's business in Italy and Spain continued to show signs of improvement with constant currency net sales growth of 12.3% and 11.3%, respectively. Excluding foreign currency effects, net sales in France increased by 13.2% year-on-year assisted by the Lipault acquisition. The Group continued to penetrate the emerging markets of Turkey and South Africa with year-on-year constant currency net sales growth of 34.9% and 25.5%, respectively. The Group's business in Russia was negatively impacted by the economic uncertainty and devaluation of the Russian Ruble, but still generated constant currency net sales growth of 5.7% year-on-year.

In Latin America, net sales increased by 5.7% to US$130.6 million for the year ended December 31, 2014 compared to the previous year. Excluding foreign currency effects, net sales increased by 15.7%. Chile and Mexico accounted for 45.1% and 30.5% of the region's net sales, respectively. Chile recorded year-on-year net sales growth of 8.1%, excluding foreign currency effects, due in large part to the recently launched women's handbag brand Secret. US Dollar reported net sales for Chile decreased by 5.9% due to the negative impact of foreign exchange rates. Excluding foreign currency effects, Mexico recorded a net sales increase of 16.3%, while Brazil posted year-on-year constant currency net sales growth of 105.0% mainly due to the direct import and sales model implemented during 2013. Excluding net sales attributable to Argentina, which continued to be negatively impacted by import restrictions imposed by the local government, net sales for the Latin American region increased by 20.0% on a constant currency basis. 

Mr. Tainwala said, "2014 saw considerable growth once again coming from North America and Asia, and we continued to see positive progress in Europe, particularly Italy and Spain, which have both suffered considerably in the past few years due to the Eurozone crisis. As recent events have demonstrated, global economies continue to be turbulent; however the broad geographical spread of our operations as well as our multi-brand, multi-category and multi-channel model have enabled us to weather the many external forces that can buffet individual markets."

Table 3: Net Sales by Region

Region	Year ended December 31, 2014 US$'000	Year ended December 31, 2013 US$'000	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Asia	892,258	768,363	16.1%	18.0%

 

North America	761,310	621,741	22.4%	22.9%
Europe	557,934	515,177	8.3%	10.4%
Latin America	130,606	123,580	5.7%	15.7%

Net Sales by Product Category

Net sales in the travel category, the Group's traditional area of strength, grew by 10.9% to US$1,654.4 million, excluding foreign currency effects, delivering 44.3% of the Group's total increase in net sales in 2014. Country-specific product designs, locally relevant marketing strategies and expanded points of sale, including e-commerce, continue to be the key factors contributing to the Group's success in the travel category.

As a result of the Group's strategic focus on expanding its product offering, the accessories category recorded constant currency net sales growth of 76.3% year on year, largely due to the acquisition of Speck Products. The acquisition of Speck also had a positive impact on the business product category, where net sales increased by 34.6% excluding foreign currency effects.  Meanwhile, net sales in the casual product category increased by 25.1% on a constant currency basis, due primarily to the success of High Sierra and Samsonite Red as well as the acquisition of Gregory.

Mr. Tainwala added, "Our share of travel has reduced from 74.4% of total net sales in 2013 to 70.4% in 2014, while that of non-travel has grown from 25.6% to 29.6% during the same period. This demonstrates the progress we have made in a short time to diversify our brand and product portfolio. Over the next five years, we aim to increase the contribution of our non-travel brands to around 50% of total net sales."

Table 4: Net Sales by Product Category

Product Category	Year ended December 31, 2014 US$'000	Year ended December 31, 2013 US$'000	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Travel	1,654,402	1,515,852	9.1%	10.9%
Casual	252,069	205,871	22.4%	25.1%
Business	256,228	193,474	32.4%	34.6%
Accessories	147,222	85,745	71.7%	76.3%

 

Distribution

As at December 31, 2014, the wholesale and retail channels represented 79.4% and 20.2%, respectively, of the Group's net sales. Excluding foreign currency effects, net sales in the wholesale channel increased year-on-year by 17.2%, while net sales in the retail channel increased by 18.3%. On a same store, constant currency basis, net sales in the retail channel increased by 7.9%. For the year ended December 31, 2014, approximately 6.6% of the Group's net sales were derived from its direct-to-consumer e-commerce business and net sales to e-tailers, versus 5.6% for the previous year.

The Group expanded its points of sale by approximately 3,600 during the year to a total of over 49,000 points of sale in over 100 countries worldwide as of December 31, 2014. Over 300 points of sale were added in Asia during 2014, including 41 net new company-operated retail locations, bringing the total to more than 7,200 points of sale in the region as at December 31, 2014.

Mr. Tainwala noted, "2014 saw Samsonite pushing for a more balanced channel mix. We are integrating both online and offline distribution to create an omni-channel presence that will strengthen our engagement with consumers, increase visibility for our products and drive sales. Given the explosive growth in online retail, we believe e-commerce will be a new driver of profitable growth for our business, and will be the way in which many of our newer and younger customers experience our brands. As for brick-and-mortar, we are aggressively expanding our own retail footprint around the world, including in airports under the Rolling Luggage name as well as through opening multi-brand bag and luggage specialty stores under the J.S. Trunk & Co. name. We believe an omni-channel model has the potential to grow the proportion of retail sales from around 20% of our net sales in 2014 to perhaps as much as 50% over the medium term."

Marketing  

The Group spent US$144.7 million, or 6.2% of net sales, on marketing in 2014, an increase of 12.0% compared to 2013, reflecting its ongoing commitment to advertise and promote its brands and products to support sales growth worldwide. The Group continued to employ targeted and focused advertising and promotional campaigns and the Group believes the success of these campaigns is evident in its net sales growth outpacing the industry in all regions.

Outlook

Looking ahead to 2015, the Group's existing growth strategy will continue to maintain its course with the objective of increasing shareholder value through sustainable revenue and earnings growth.

In particular, Samsonite will:

• Continue to gain market share by leveraging the strength of the Group's diverse portfolio of brands, which include Samsonite, American Tourister, Hartmann, High Sierra, Gregory, Speck and Lipault, across all of its markets;
• Allocate more resources to increase the Group's direct-to-consumer sales, including e-commerce, retail and omni-channel, in proportion to net sales;
• Allocate more resources to the markets in Latin America where the Group is less represented and has the potential to gain market share;
• Allocate more resources to the Hartmann brand to increase sales and gain market share worldwide;
• Focus on further integrating Speck Products, Lipault and Gregory into the Group's existing business and continue to realize anticipated synergies in sourcing, systems and back-office support functions;
• Continually improve the efficiency and effectiveness of the Group's supply chain and global distribution network; and
• Continually evaluate acquisition opportunities that have a compelling strategic fit, leveraging the Group's strong management team and balance sheet capacity.

About Samsonite

Samsonite International S.A. (together with its consolidated subsidiaries, the "Group") is the world's largest travel luggage company, with a heritage dating back more than 100 years. The Group is principally engaged in the design, manufacture, sourcing and distribution of luggage, business and computer bags, outdoor and casual bags, travel accessories and slim protective cases for personal electronic devices throughout the world, primarily under the Samsonite®, American Tourister®, Hartmann®, High Sierra®, Gregory®, Speck® and Lipault® brand names and other owned and licensed brand names. The Group's core brand, Samsonite, is one of the most well-known travel luggage brands in the world.

For more information, please contact:

Samsonite International S.A.

William Yue

Tel: [phone]

Fax: [phone]

Email: [e-mail]

Artemis Associates

Vanita Sehgal	Jonathan Yang
Tel: [phone]	Tel: [phone]
Mob: [phone]	Mob: [phone]
Email: [e-mail]	Email: jonathan.yang @artemisassociates.com

Europe:  Newgate Communications

Jonathan Clare	Clotilde Gros	Georgia Lewis
Tel: [phone]	Tel: [phone]	Tel: [phone]
	Mob: [phone]	Mob: [phone]
Email: [e-mail]

This announcement contains forward-looking statements. All statements other than statements of historical fact contained in this announcement, including, without limitation, the discussions of the Group's business strategies and expectations concerning future operations, margins, profitability, liquidity and capital resources, the future development of the Group's industry and the future development of the general economy of the Group's key markets and any statements preceded by, followed by or that include words and expressions such as "expect", "seek", "believe", "plan", "intend", "estimate", "project", "anticipate", "may", "will", "would" and "could" or similar words or statements, as they relate to the Group or its management, are intended to identify forward-looking statements.

These statements are subject to certain known and unknown risks, uncertainties and assumptions, which may cause the Group's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking information.

Subject to the requirements of applicable laws, rules and regulations, the Group does not have any and undertakes no obligation to update or otherwise revise the forward-looking statements in this announcement, whether as a result of new information, future events or developments or otherwise. In this announcement, statements of or references to the Group's intentions are made as of the date of this announcement. Any such intentions may change in light of future developments. All forward-looking statements contained in this announcement are qualified by reference to the cautionary statements set out above.

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