Samsonite International S.A. Announces Final Results for the Year Ended December 31, 2021

Rhea-AI Summary

Samsonite International reported strong financial results for 2021, with net sales reaching US$2,020.8 million, a 35.1% year-on-year increase. The fourth quarter showed net sales of US$664.1 million, significantly up from the prior quarter. Adjusted EBITDA improved to US$182.3 million for the full year, recovering from a loss in 2020. Notably, North America and Latin America saw the fastest recovery, achieving year-on-year net sales increases of 47.0% and 49.3%, respectively. The Group's gross profit margin rose to 54.5%. However, geopolitical issues and shipping delays pose ongoing challenges.

Positive

• Net sales increased to US$2,020.8 million, a 35.1% year-on-year rise.
• Adjusted EBITDA improved to US$182.3 million from a loss of US$218.8 million in 2020.
• Net sales in North America rose by 47.0% year-on-year.
• Latin America net sales increased by 49.3% year-on-year.
• Gross profit margin expanded to 54.5%, up from 46.0% in 2020.

Negative

• Net sales for 2021 are still 43.5% lower than in 2019.
• Shipping delays and port congestion are expected to continue impacting recovery.
• Suspended commercial activities in Russia due to geopolitical tensions could create uncertainty.

HONG KONG, March 16, 2022 /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, 2021¹.

Overview
Commenting on the results, Mr. Kyle Gendreau, Chief Executive Officer, said, "Samsonite finished 2021 on a positive note as the strong recovery in sales and profitability continued into the fourth quarter. For the three months ended December 31, 2021, the Group registered net sales of US$664.1 million, an increase of US$107.0 million versus US$557.1 million in the third quarter of 2021. During the fourth quarter of 2021, the decline in net sales compared to the same period in 2019 further narrowed to 28.0%^{2, 3}, with all regions achieving significant improvements, particularly Latin America which saw fourth quarter 2021 net sales surpass the same period in 2019 by 7.7%². Likewise, all our core brands made strong gains, especially Tumi which saw fourth quarter 2021 net sales in North America recover to be almost even² with the fourth quarter of 2019. Our performance in the fourth quarter of 2021 is a notable improvement over the first three quarters of the year, which saw the decline in net sales compared to the corresponding periods in 2019 progressively narrowing to 37.6%^{2, 3} in the third quarter from 52.2%² in the second quarter and 57.3%² in the first quarter of 2021."

"Behind the scenes, we remained relentlessly focused on controlling expenses while sales continued to improve. Fixed selling, general and administrative ("SG&A") expenses as a percentage of net sales were 24.6% for the fourth quarter of 2021 compared to 25.7% for the fourth quarter of 2019. As a result, Samsonite's Adjusted EBITDA margin⁴ expanded to 19.1% for the fourth quarter of 2021, 610 basis points higher than 13.0% in the third quarter of 2021, and 400 basis points higher compared to 15.1% for the fourth quarter of 2019, despite a significantly lower sales base. I would like to recognize our teams and business partners around the world whose passion and perseverance over the last two years made this outstanding accomplishment possible."

The strong recovery in net sales, together with continued close attention on expense controls, enabled the Group's Adjusted EBITDA⁵ to further improve to US$127.1 million for the three months ended December 31, 2021, an increase of US$54.8 million from US$72.2 million in the third quarter of 2021, and an improvement of US$172.2 million compared to the Adjusted EBITDA⁵ loss of US$45.1 million in the fourth quarter of 2020. Consequently, the Group's Adjusted Net Income⁶ increased by US$103.7 million to US$112.4 million in the fourth quarter of 2021 from US$8.7 million in the third quarter of 2021, an improvement of US$246.7 million compared to the Adjusted Net Loss⁶ of US$134.3 million in the fourth quarter of 2020.

For the six months ended December 31, 2021, Samsonite recorded net sales of US$1,221.2 million, an increase of US$421.7 million from the US$799.5 million recorded during the first half of 2021. Second half 2021 gross margin increased by 620 basis points to 57.0% from 50.8% in the first half of 2021, despite increased product, freight and duty costs. Driven by the strong recovery in net sales and gross margin, our Adjusted EBITDA⁵ and Adjusted EBITDA margin⁴ made significant gains, improving to US$199.3 million and 16.3%, respectively, in the second half of 2021, compared to a loss of US$17.0 million and (2.1)%, respectively, for the first half of 2021. The Group's second half 2021 gross margin and Adjusted EBITDA margin⁴ both recovered to pre-COVID levels, with gross margin 210 basis points and Adjusted EBITDA margin⁴ 150 basis points above the second half of 2019, despite second half 2021 net sales being considerably lower than the comparable period in 2019.

Overall, for the year ended December 31, 2021, Samsonite recorded net sales of US$2,020.8 million, an increase of 35.1%^{2, 3} year-on-year, and 43.5%^{2, 3} lower than 2019. Net sales in North America and Latin America saw faster recovery, increasing by 47.0%^{2, 3} and 49.3%² year-on-year, respectively, compared to Asia and Europe, where net sales rose by 20.3%² and 37.7%² year-on-year, respectively, during 2021. Compared to 2019, 2021 net sales in North America, Asia, Europe and Latin America were lower by 38.0%^{2, 3}, 48.4%², 47.6%² and 26.8%², respectively.

For the year ended December 31, 2021, net sales of the Group's core travel brands Samsonite, Tumi and American Tourister increased year-on-year by 36.3%², 56.3%² and 37.8%², respectively. Compared to 2019, net sales of Tumi experienced the strongest recovery, with 2021 net sales coming in 34.5%² lower than 2019, while net sales of Samsonite and American Tourister were lower by 44.1%² and 47.6%², respectively. 

The Group's gross profit margin expanded to 54.5% for 2021, an increase of 850 basis points compared to the 46.0% recorded in 2020, and 90 basis points below the 55.4% registered in 2019, despite increased product, freight and duty costs. Adjusted EBITDA⁵ was US$182.3 million for 2021, an improvement of US$401.1 million from an Adjusted EBITDA⁵ loss of US$218.8 million in 2020. As a result, Samsonite recorded Adjusted Net Income⁶ of US$17.4 million for the year ended December 31, 2021, a significant improvement of US$423.5 million from the Adjusted Net Loss⁶ of US$406.1 million for 2020. 

Mr. Gendreau continued, "The strong increase in Adjusted EBITDA⁵, along with our ongoing attention on cash flow management, enabled Samsonite to generate total cash⁷ of US$175.6 million during the fourth quarter of 2021, an increase of US$59.5 million from the US$116.1 million generated⁷ in the third quarter of 2021, and a considerable improvement from total cash burn⁷ of (US$27.3) million in the second quarter and (US$64.6) million in the first quarter of 2021. Overall, Samsonite generated total cash⁷ of US$199.8 million for the year ended December 31, 2021, an improvement of US$559.9 million compared to total cash burn⁷ of (US$360.1) million in 2020."

"We are very pleased with the accelerating sales recovery, strong positive Adjusted EBITDA⁵ and cash generation⁷ achieved in 2021, especially in the second half of the year, which all underscore the positive impact of our decisive actions over the last two years and the strength and resilience of our brands."

"As the effects of COVID-19 on our business continued to moderate and our performance improved, we began to prudently reduce our debt. During the year ended December 31, 2021, we prepaid a total of US$370.0 million of borrowings to finish the year with net debt of US$1,477.2 million⁸, US$258.3 million lower than at the end of 2020⁸. Our liquidity stood at US$1,501.4 million⁹ as of December 31, 2021, nearly unchanged compared to the end of 2020⁹, which will enable us to support our continued recovery from the effects of COVID-19 while investing for long-term growth."

Samsonite remains focused on executing to its competitive strengths to extend its market leadership and drive long-term growth. The Group is doing so by leveraging its century-plus heritage of innovation, global platform, diverse set of product categories and leading and complementary brands offering products tailored to each region's preferences, as well as its commitment to sustainability and innovation. As sales and profitability continue to improve, Samsonite intends to increase investment in the business to capitalize on the ongoing recovery in travel.

Mr. Gendreau remarked, "We continue to invest in developing and launching new products that meet evolving consumer needs. An increasing proportion of our products incorporate sustainable attributes such as recycled or recyclable materials as we continue to advance on 'Our Responsible Journey' to lead the luggage and bag industry in sustainability."

Successful product launches under the Samsonite brand in 2021 included the Magnum Eco, Proxis and Lite Box suitcase lines. Magnum Eco and Proxis are manufactured using sustainable materials, while Lite Box, made with CURV®* material, is among the lightest and sturdiest suitcases on the market. Tumi also experienced great success with its TUMI | McLaren and TUMI | Missoni luggage and travel collections in 2021. In 2022, the Group has a pipeline full of exciting and competitive new product launches, including Tumi's relaunch of the Alpha Bravo collection. Comprising more than two dozen entirely new styles, many of which feature a main body fabric and interior lining made from recycled materials, the new Alpha Bravo collection has received an enthusiastic reception from both consumers and the media. The Group also has high expectations for Samsonite's upcoming Elevation™ Plus collection, which features a high-performance polypropylene exterior combined with an interior lining made of 100% recycled PET bottles, addressing demand from travelers for functionality and sustainability.

The Group continued to closely manage its marketing spend in 2021. Although marketing expenses increased by US$9.1 million, or 12.4%, year-on-year, to US$82.3 million for the year ended December 31, 2021, they remained US$107.2 million, or 56.6%, lower compared to 2019. Marketing expenses made up 4.1% of net sales in 2021, significantly lower than the 4.8% in 2020 and 5.2% in 2019. As the effects of COVID-19 continue to diminish, Samsonite intends to increase its marketing investment in 2022, both in absolute dollar terms and as a percentage of net sales, to support its new product launches and capitalize on the ongoing recovery in travel.

In addition to the robust recovery in Adjusted EBITDA⁵, an important factor driving Samsonite's strong cash generation⁷ in 2021 was a reduction in working capital, particularly inventories. Inventories totalled US$348.4 million as of December 31, 2021, US$107.4 million below the US$455.9 million at the end of 2020. This reduction was primarily driven by strong product sell-through due to the rebound in travel, though delayed stock replenishment due to shipping delays and port congestion was also a factor. With shipping delays and port congestion expected to continue in 2022, Samsonite is increasing investment in inventories to support continued business recovery.

In response to the COVID-19 pandemic, Samsonite substantially reduced capital expenditures and software investments in 2020 and continued to maintain tight control in 2021. The Group spent US$25.9 million¹⁰ on capital expenditures (including software purchases) during 2021, almost unchanged compared to the US$26.1 million¹⁰ spent in 2020, and US$48.6 million lower than the US$74.5 million¹⁰ spent in 2019. As sales and profitability continue to improve, Samsonite intends to increase capital expenditures and software investments to support its long-term strategic objectives.

Mr. Gendreau continued, "While the recent wave of new COVID-19 cases due to the Omicron variant caused sales recovery to slow in January 2022, considering vaccine effectiveness and higher vaccination rates today compared to a year ago, we are hopeful that the effects of COVID-19 on everyday life will continue to moderate, driving a sustained recovery in travel. Separately, we continue to see some sales volatility due to shipping delays and port congestion, especially in North America. That said, our performance has improved in February 2022. Overall, the decline in Samsonite's net sales for the first two months of 2022 compared to the same period in 2019^{2, 11} was about in line with the 28.0%^{2, 3} decline in the fourth quarter of 2021 when compared to the fourth quarter in 2019."

Mr. Gendreau concluded, "I also want to address the situation in Ukraine and the resulting humanitarian crisis in the region. Our thoughts are with all who have been impacted, including our employees and their families as well as our customers and partners."

"Until further notice we have suspended all commercial activities in Russia. We have temporarily closed our 37 company-operated retail stores in Russia as well as our e-commerce sites there. We have also stopped all product shipments both into and within Russia and have suspended all further investments there. Business development activities and advertising in Russia have also been temporarily discontinued."

"Samsonite's employees around the world, including our colleagues in Russia, have made great sacrifices and shown extraordinary resilience and dedication over the last two years. Our decision to temporarily suspend commercial activities in Russia is a difficult one, not least because of our employees there. Our top priority has been and continues to be the safety of our colleagues, and we continue to support our team members and their families in the region. We continue to monitor this situation closely and hope that a peaceful and just resolution can be achieved soon."

"Samsonite is donating over 10,000 pieces of luggage and bags to support Ukrainian refugees and will also contribute US$1.0 million to support humanitarian relief efforts."

"The conflict, and the resulting rise in geopolitical tensions, have added some uncertainty to our outlook for 2022. While Group net sales of our Russian business have ranged from only 1.5 to 2.0% of global sales annually over the last three years, the economic effects of the conflict have caused additional headwinds. Nevertheless, we are hopeful that such headwinds will not materially disrupt our recovery. With our dedicated and responsive teams and substantial liquidity position, we are confident we have the capacity not only to navigate through the ongoing effects of COVID-19 and increased geopolitical tensions, but also to invest for long-term growth and success."

Table 1: Key Financial Highlights for the Year Ended December 31, 2021

US$ millions, except per share data	Year ended December 31, 2021	Year ended December 31, 2020	Percentage increase (decrease) 2021 vs. 2020	Percentage increase (decrease) 2021 vs. 2020 excl. foreign currency effects2
Net sales	2,020.8	1,536.7	31.5%	30.3%
Operating profit (loss)12	132.7	(1,266.2)	nm	nm
Operating profit (loss) excluding impairment (reversals) charges, restructuring charges and the loss on sale of Speck12, 13	120.1	(282.9)	nm	nm
Profit (loss) attributable to the equity holders	14.3	(1,277.7)	nm	nm
Adjusted Net Income (Loss)6	17.4	(406.1)	nm	nm
Adjusted EBITDA5	182.3	(218.8)	nm	nm
Adjusted EBITDA margin4	9.0%	(14.2)%
Basic and diluted earnings (loss) per share – US$ per share	0.010	(0.891)	nm	nm
Adjusted basic and diluted earnings (loss) per share14 – US$ per share	0.012	(0.283)	nm	nm

nm – Not meaningful.

The Group's performance for the year ended December 31, 2021 is discussed in greater detail below.

Net Sales
As vaccination rates rose and the effects of the COVID-19 pandemic moderated, governments around the world began easing social-distancing and travel restrictions, leading to a recovery in travel and increased demand for the Group's products across all regions. As a result, the Group's net sales increased by US$484.1 million, or 30.3%², year-on-year, to US$2,020.8 million for the year ended December 31, 2021. On July 30, 2021, the Group completed the sale of the Speck business, including the Speck brand. When excluding the net sales of Speck for August through December 2020, the Group's net sales increased by US$538.3 million, or 35.1%², in 2021 compared to the previous year.

For the year ended December 31, 2021, the Group recorded a net sales decline of 43.5%² versus 2019 when excluding the net sales of Speck for August through December 2019, and a decrease of 44.4%² when such net sales are included. This is a significant improvement compared to 2020, when the Group's net sales decreased by 57.5%² compared to 2019.

During 2021, the Group's quarterly net sales performance (when compared to the corresponding quarter in 2019) experienced sequential improvement, particularly during the second half as continued progress in the rollout of vaccines led many governments to ease social-distancing, travel and other restrictions, resulting in a rebound in travel. During the fourth quarter of 2021, the Group's net sales decline compared to the fourth quarter in 2019 narrowed to 28.0%² when excluding the net sales of Speck for the fourth quarter of 2019, and to 30.2%² when such net sales are included. This encouraging trend continued from the third quarter of 2021, which saw the Group's net sales decline compared to the third quarter of 2019 improve to 37.6%² when excluding the net sales of Speck for August and September 2019, and to 39.9%² when such net sales are included. This in turn is a noticeable improvement from the second quarter of 2021, when the Group's net sales were 52.2%² lower than the second quarter of 2019, and from the first quarter, when the Group's net sales were 57.3%² below the first quarter of 2019.

The rise in new COVID-19 cases related to the Omicron variant and the resulting reinstatement of travel restrictions and social distancing measures in certain markets, particularly in Asia, temporarily slowed the Group's net sales recovery in January 2022, but sales performance improved in February 2022. Overall, the decline in Samsonite's net sales for the first two months of 2022 compared to the same period in 2019^{2, 11} was about in line with the 28.0%^{2, 3} decline recorded in the fourth quarter of 2021 when compared to the fourth quarter in 2019.

Net Sales Performance by Region
North America
The Group recorded strong year-on-year net sales gains in North America in 2021, driven by strong product sell-through fueled by robust consumer demand due to the rebound in travel, despite delayed stock replenishment due to shipping delays and port congestion. For the year ended December 31, 2021, the Group recorded net sales of US$807.5 million in the region, an increase of 47.0%² year-on-year when excluding the net sales of Speck for August through December 2020, and an increase of 33.8%² when such net sales are included. During 2021, the Group's net sales in the United States increased by 48.0% year-on-year when excluding the net sales of Speck for August through December 2020, and by 34.1% when such net sales are included. The Group's net sales in Canada increased by 25.6%² year-on-year.

For the year ended December 31, 2021, the Group recorded a net sales decline of 38.0%² in North America versus 2019 when excluding the net sales of Speck for August through December 2019, and a decrease of 40.9%² when such net sales are included. This is a significant improvement over 2020, when net sales in North America decreased by 55.8%² compared to 2019.

During 2021, the Group's quarterly net sales performance (when compared to the corresponding quarter in 2019) in North America experienced sequential improvement. During the fourth quarter of 2021, the Group's net sales decline versus the comparable quarter in 2019 narrowed to 21.3%² when excluding the net sales of Speck in the fourth quarter of 2019 and to 27.6%² when such net sales are included. This encouraging trend continued from the third quarter of 2021, when the Group's net sales decline compared to the third quarter of 2019 narrowed to 29.9%² when excluding the net sales of Speck for August and September 2019 and to 36.7%² when such net sales are included. This in turn is a noticeable improvement from the second quarter of 2021, when the Group's net sales were 44.3%² lower than the second quarter of 2019; and from the first quarter, when the Group's net sales were 57.9%² lower than the first quarter of 2019.

The rise in new COVID-19 cases related to the Omicron variant and the impact from continued shipping delays and port congestion temporarily slowed the net sales recovery in North America in January 2022, but sales performance improved in February 2022. Overall, the decline in Samsonite's net sales for the first two months of 2022 compared to the same period in 2019^{2, 11} increased slightly versus the 21.3%^{2, 3} decline recorded in the fourth quarter of 2021 when compared to the fourth quarter in 2019.

Asia
For the year ended December 31, 2021, the Group recorded net sales of US$687.5 million in Asia, an increase of 20.3%² compared 2020, driven by year-on-year net sales increases of 27.5%² in China, 131.9%² in India and 18.1%² in Hong Kong¹⁵, partially offset by year-on-year net sales decreases of 13.3%² in Japan, 5.5%² in South Korea and 8.5%² in Australia.

For the year ended December 31, 2021, the Group's net sales in Asia were 48.4%² below 2019, a considerable improvement over 2020 when net sales in the region decreased by 57.5%² compared to 2019.

During 2021, the Group's quarterly net sales performance (when compared to the corresponding quarter in 2019) in Asia experienced sequential improvement, except for the second quarter of 2021 when the Group's net sales recovery in Asia temporarily slowed due to a resurgence of COVID-19 cases, particularly in India, and the relatively slower vaccination rollout in important markets such as Japan and South Korea. During the fourth quarter of 2021, the Group's net sales decline versus the comparable quarter in 2019 narrowed to 39.3%². This encouraging trend continued from the third quarter of 2021, when the Group's net sales decline compared to the third quarter of 2019 narrowed to 48.7%². This is a significant improvement from the second quarter of 2021, when the Group's net sales were 56.0%² lower than the second quarter of 2019; and from the first quarter, when the Group's net sales were 49.9%² lower than the first quarter of 2019.

The rise in new COVID-19 cases related to the Omicron variant and the resulting reinstatement of travel restrictions and social distancing measures in certain markets in Asia temporarily slowed net sales recovery in the region during January 2022, but sales performance improved in February 2022. Overall, the decline in Samsonite's net sales for the first two months of 2022 compared to the same period in 2019² remained relatively steady versus the 39.3%² decline recorded in the fourth quarter of 2021 when compared to the fourth quarter in 2019.

Europe
For the year ended December 31, 2021, the Group recorded net sales of US$419.1 million in Europe, an increase of 37.7%² compared to 2020, with the Group's main markets in the region all achieving year-on-year net sales gains, including 8.8%² in Germany, 35.2%² in Italy, 65.8%² in Russia, 40.0%² in France, 63.6%² in Spain and 46.1%² in the United Kingdom¹⁶.

For the year ended December 31, 2021, the Group's net sales in Europe were 47.6%² below 2019, a substantial improvement over 2020 when net sales in the region decreased by 61.7%² compared to 2019.

During 2021, the Group's quarterly net sales performance (when compared to the corresponding quarter in 2019) in Europe experienced sequential improvement, with recovery noticeably accelerating in the second half. During the fourth quarter of 2021, the Group's net sales decline versus the comparable quarter in 2019 narrowed to 28.4%². This encouraging trend continued from the third quarter of 2021, when the Group's net sales decline compared to the third quarter of 2019 significantly narrowed to 35.5%² from the second quarter of 2021, when the Group's net sales were 60.4%² lower than the second quarter of 2019; and from the first quarter, when the Group's net sales were 70.9%² lower than the first quarter of 2019, as a result of the rollout of vaccines and governments in the region relaxing social-distancing, travel and other restrictions.

The rise in new COVID-19 cases related to the Omicron variant temporarily slowed net sales recovery in Europe in January 2022, but sales performance has begun to improve in February 2022. Overall, the decline in Samsonite's net sales for the first two months of 2022 compared to the same period in 2019² slightly improved versus the 28.4%² decline recorded in the fourth quarter of 2021 when compared to the fourth quarter in 2019.

Latin America
For the year ended December 31, 2021, the Group recorded net sales of US$104.7 million in Latin America, an increase of 49.3%² compared to 2020, driven by year-on-year net sales increases of 27.4%² in Chile, 88.8%² in Mexico and 49.0%² in Brazil.

For the year ended December 31, 2021, the Group's net sales in Latin America were 26.8%² below 2019. This is a substantial improvement over 2020, when net sales in the region decreased by 51.8%² compared to 2019.

During 2021, the Group's quarterly net sales performance (when compared to the corresponding quarter in 2019) in Latin America experienced sequential improvement, with recovery noticeably accelerating in the second half. In particular, the Group's fourth quarter 2021 net sales increased by 7.7%² when compared to the fourth quarter in 2019. This encouraging trend continued from the third quarter of 2021, when the Group's net sales decline compared to the third quarter of 2019 significantly narrowed to 14.6%² from the second quarter of 2021, when the Group's net sales were 48.9%² lower than the second quarter of 2019; and from the first quarter, when the Group's net sales were 51.1%² lower than the first quarter of 2019.

The rise in new COVID-19 cases related to the Omicron variant temporarily slowed net sales recovery in Latin America in January 2022, but sales performance rebounded strongly in February 2022. Overall, Samsonite's net sales for the first two months of 2022 compared to the same period in 2019² noticeably improved versus the 7.7%² increase recorded in the fourth quarter of 2021 when compared to the fourth quarter in 2019.

Table 2: Net Sales by Region

Region17	Year ended December 31, 2021 US$ millions	Year ended December 31, 2020 US$ millions	Percentage increase (decrease) 2021 vs. 2020	Percentage increase (decrease) 2021 vs. 2020 excl. foreign currency effects2
North America	807.5	602.5	34.0%	33.8%
Asia	687.5	558.6	23.1%	20.3%
Europe	419.1	302.5	38.5%	37.7%
Latin America	104.7	71.2	47.2%	49.3%

Net Sales Performance by Brand and Product Category
Each of the Group's core brands Samsonite, Tumi and American Tourister registered strong year-on-year net sales gains across all regions in 2021.

For the year ended December 31, 2021, net sales of the Samsonite brand increased by US$255.0 million, or 36.3%², year-on-year, driven by strong growth in North America (up US$112.5 million, or 52.0%²), Europe (up US$84.9 million, or 43.1%²), Asia (up US$41.7 million, or 13.2%²) and Latin America (up US$16.0 million, or 72.8%²).

Net sales of the Tumi brand increased by US$184.9 million, or 56.3%², year-on-year, in 2021, driven primarily by a US$145.9 million, or 90.6%², increase in North America and a US$29.2 million, or 21.2%², increase in Asia. Tumi net sales rose by US$7.1 million, or 19.5%², in Europe and by US$2.6 million, or 117.6%², in Latin America.

Net sales of the American Tourister brand increased by US$95.8 million, or 37.8%², year-on-year, in 2021, driven by strong growth in Asia (up US$40.4 million, or 28.3%²), North America (up US$27.3 million, or 47.4%²), Europe (up US$19.7 million, or 41.0%²) and Latin America (up US$8.4 million, or 114.5%²).

Compared to 2019, net sales of Tumi experienced the strongest recovery, with 2021 net sales coming in 34.5%² lower than 2019, while net sales of Samsonite and American Tourister were lower by 44.1%² and 47.6%², respectively.

As domestic travel and travel within regions continued to rebound, particularly in North America and Europe, net sales in the travel product category increased by 51.2%² year-on-year and accounted for 57.5% of total net sales in 2021, up from 49.7% of total net sales in 2020. Total non-travel[18] category net sales increased by 9.7%² and accounted for 42.5% of total net sales in 2021. When excluding the non-travel net sales of Speck for August through December 2020, non-travel net sales increased by 18.0%² year-on-year during 2021.

Table 3: Net Sales by Brand

Brand	Year ended December 31, 2021 US$ millions	Year ended December 31, 2020 US$ millions	Percentage increase (decrease) 2021 vs. 2020	Percentage increase (decrease) 2021 vs. 2020 excl. foreign currency effects2
Samsonite	927.9	672.9	37.9%	36.3%
Tumi	506.5	321.6	57.5%	56.3%
American Tourister	340.3	244.5	39.2%	37.8%
Gregory	59.4	51.2	15.9%	16.2%
Speck19	33.0	96.4	(65.7)%	(65.7)%
Other20	153.6	150.1	2.4%	2.0%

 

Table 4: Net Sales by Product Category

Product Category	Year ended December 31, 2021 US$ millions	Year ended December 31, 2020 US$ millions	Percentage increase (decrease) 2021 vs. 2020	Percentage increase (decrease) 2021 vs. 2020 excl. foreign currency effects2
Travel	1,162.7	763.0	52.4%	51.2%
Non-travel18	858.1	773.7	10.9%	9.7%

 

Performance by Distribution Channel
For the year ended December 31, 2021, the Group's direct-to-consumer ("DTC") e-commerce net sales increased by 11.8%² year-on-year to US$243.6 million compared to US$214.6 million in 2020. As a percentage of net sales, DTC e-commerce decreased to 12.1% in 2021 from 14.0% in 2020 due to governments relaxing social-distancing restrictions and markets around the world reopening, which has led many consumers to begin to shop in person again instead of primarily online. Meanwhile, wholesale net sales to e-retailers increased by 47.2%² to US$187.2 million and comprised 9.3% of net sales in 2021, compared to 8.1% of net sales in 2020. Overall, the Group's 2021 e-commerce net sales (including DTC e-commerce net sales and wholesale net sales to e-retailers) increased by 24.9%² year-on-year to US$430.8 million and comprised 21.3% of 2021 net sales, compared to 22.1% of net sales in 2020.

The Group has continued to optimize its global retail store network. After permanently closing 260 company-operated stores during 2020, the Group permanently closed an additional 110 company-operated stores during the year ended December 31, 2021. This was partially offset by the addition of 19 new stores, resulting in a net reduction of 91 company-operated stores in 2021, compared to a net reduction of 198 company-operated stores during the year ended December 31, 2020. As a result, the total number of company-operated retail stores was 1,005 as of December 31, 2021, compared to 1,096 at the end of 2020, and 1,294 at the end of 2019.

The Group's DTC retail net sales increased by 48.1%² to US$536.6 million in 2021 from US$362.3 million in 2020, primarily due to the reopening of the Group's company-operated stores that had been temporarily closed in 2020 due to COVID-19. Overall, the Group's net sales in the DTC channel, which includes company-operated retail stores and DTC e-commerce, increased by 34.6%² to US$780.3 million in 2021 from US$576.9 million in 2020.

As a percentage of net sales, DTC retail comprised 26.6% of net sales in 2021, compared to 23.6% in 2020, and 26.6% in 2019. Meanwhile, DTC e-commerce net sales comprised 12.1% of net sales in 2021, compared to 14.0% in 2020, and 10.4% in 2019. Overall, DTC comprised 38.6% of net sales in 2021, compared to 37.5% in 2020, and 37.0% in 2019. 

The Company has not presented its 2021 comparable store sales metrics as it believes that such metrics are not representative of the underlying trends in the Company's business due to the temporary closure of many company-operated stores in 2020 because of COVID-19.

The Group's total wholesale net sales saw sequential quarterly gains in 2021, rising to US$381.4 million in the fourth quarter from US$340.7 million in the third quarter, US$278.4 million in the second quarter and US$238.1 million in the first quarter of 2021, as wholesale customers increased their orders with continued travel recovery.  Overall, total wholesale net sales increased by 27.8%² to US$1,238.5 million (representing 61.3% of net sales) in 2021 from US$957.8 million (representing 62.4% of net sales) in 2020. 

Table 5: Net Sales by Distribution Channel

Distribution Channel	Year ended December 31, 2021 US$ millions	Year ended December 31, 2020 US$ millions	Percentage increase (decrease) 2021 vs. 2020	Percentage increase (decrease) 2021 vs. 2020 excl. foreign currency effects2
Wholesale	1,238.5	957.8	29.3%	27.8%
DTC
Retail	536.6	362.3	48.1%	48.1%
DTC e-commerce	243.6	214.6	13.5%	11.8%
Total DTC	780.3	576.9	35.3%	34.6%

 

Gross Profit
The Group's gross profit increased by US$395.2 million, or 56.0%, to US$1,101.5 million for the year ended December 31, 2021 from US$706.3 million for 2020, driven by price increases on the Group's products sold to mitigate increased product, freight and duty costs, lower promotional discounts and lower provisions for inventory reserves year-on-year, despite increased freight and raw material costs, as well as the impact from the expiration of the Generalized System of Preferences program in the United States ("GSP") which has not yet been renewed. Consequently, the Group's gross profit margin increased to 54.5% in 2021, an increase of 850 basis points compared to the 46.0% recorded in 2020, and 90 basis points below the 55.4% registered in 2019. 

Operating Profit (Loss)
The Group spent US$82.3 million on marketing during the year ended December 31, 2021, an increase of US$9.1 million, or 12.4%, compared to the US$73.3 million spent in 2020; and a decrease of US$107.2 million, or 56.6%, compared to US$189.5 million spent in 2019. Marketing expenses made up 4.1% of net sales in 2021, 70 basis points lower than the 4.8% in 2020, and 110 basis points lower than the 5.2% in 2019. While the Group has selectively increased advertising and promotion spend to drive sales in markets where travel is recovering more quickly, it continues to carefully manage marketing expenses.

As a result of the more than US$200 million in annualized run-rate fixed cost savings from the Group's comprehensive cost reduction program implemented in 2020 and 2021, along with its ongoing focus on controlling expenses, the Group reduced its fixed SG&A expenses to US$622.6 million for the year ended December 31, 2021, a decrease of US$70.3 million, or 10.2%, compared to 2020, and a decrease of US$371.1 million, or 37.3%, compared to 2019. Fixed SG&A expenses as a percentage of net sales steadily tapered to 24.6% for the fourth quarter of 2021 from 28.6% in the third quarter of 2021, 34.4% in the second quarter of 2021 and 41.4% in the first quarter of 2021, reflecting management's sustained focus on controlling expenses while sales continued to improve. Management continues to tightly manage the Group's operating expenses going into 2022. Additionally, at 24.6% fixed SG&A expenses as a percentage of net sales for the fourth quarter of 2021 is also better than 25.7% for the same period in 2019, despite a considerably lower sales base.

For the year ended December 31, 2021, the Group registered an operating profit of US$120.1 million¹² when excluding the restructuring charges, the non-cash impairment reversals and the loss on the sale of Speck recorded in 2021. In comparison, the Group incurred an operating loss of US$282.9 million¹² when excluding the restructuring charges and the non-cash impairment charges incurred in 2020. The Group reported an operating profit of US$132.7 million for the year ended December 31, 2021, compared to an operating loss of US$1,266.2 million for the previous year.

Net Finance Costs and Income Tax Benefit
Interest expense on loans and borrowings was US$44.8 million during the second half of 2021, a decrease of US$11.7 million compared to the US$56.5 million incurred in the second half of 2020. The reduction is attributable to the interest savings from the Group's prepayment of US$370.0 million principal amount of its outstanding borrowings under the Amended Senior Credit Facilities²¹ and a reduction in the interest rate payable following the completion of the refinancing of the 2020 Incremental Term Loan B Facility²² during June 2021. In comparison, interest expense on loans and borrowings was US$54.9 million during the first half of 2021, an increase of US$15.2 million compared to the US$39.7 million incurred in the first half of 2020 due to increased borrowings in 2020. Overall, interest expense on loans and borrowings was US$99.7 million in 2021 compared to US$96.2 million in 2020.

Net finance costs increased by US$49.3 million, or 42.4%, to US$165.4 million for the year ended December 31, 2021 from US$116.2 million for 2020, primarily attributable to the US$30.1 million loss on extinguishment of the 2020 Incremental Term Loan B Facility and an increase in redeemable non-controlling interest put option expenses of US$24.7 million year-on-year due to improved financial performance of the Group's subsidiaries with non-controlling interests that are subject to put options. The increase in net finance costs was partially offset by a decrease in net foreign exchange losses of US$5.7 million and a decrease in interest expense on lease liabilities of US$3.7 million year-on-year.

The Group recorded an income tax benefit of US$56.2 million for the year ended December 31, 2021, which included a net tax benefit of US$42.6 million tax benefit associated with the intra-group realignment of certain intellectual property rights (the "Intra-Group IP Realignment") completed during the year. In comparison the Group recorded an income tax benefit of US$94.4 million for the year ended December 31, 2020.

Profit (Loss) Attributable to Equity Holders
The Group recorded profit attributable to the equity holders of US$14.3 million for the year ended December 31, 2021, compared to a loss attributable to the equity holders of US$1,277.7 million for the previous year. For the year ended December 31, 2021, the Group incurred a loss attributable to the equity holders of US$14.7 million¹² when excluding the non-cash impairment reversals, restructuring charges, the loss on the sale of Speck and charges associated with the amendments to the Company's credit agreements recognized during 2021, all of which are net of the related tax impact, and also excluding the US$42.6 million tax benefit associated with the Intra-Group IP Realignment. In comparison, the Group recorded a loss attributable to the equity holders for the year ended December 31, 2020 of US$413.8 million¹² when excluding the restructuring charges and the non-cash impairment charges recognized during 2020, both of which are net of the related tax impact.

Adjusted EBITDA and Adjusted Net Income (Loss)
For the year ended December 31, 2021, the Group registered Adjusted EBITDA⁵ earnings US$182.3 million, an improvement of US$401.1 million compared to Adjusted EBITDA⁵ loss of US$218.8 million recorded in 2020. The Group recorded an Adjusted Net Income⁶ of US$17.4 million for the year ended December 31, 2021, compared to an Adjusted Net Loss⁶ US$406.1 million for the year ended December 31, 2020.

Balance Sheet and Cash Flows
Inventories were US$348.4 million as of December 31, 2021, a reduction of US$107.4 million compared to inventories of US$455.9 million at the end of 2020, and US$238.9 million lower than inventories of US$587.3 million at the end of 2019. This reduction was primarily driven by strong product sell-through due to the rebound in travel, though delayed stock replenishment due to shipping delays and port congestion was also a factor. As a result, net working capital was US$199.7 million as of December 31, 2021, reflecting a US$157.0 million decrease from US$356.7 million as of December 31, 2020, and a US$283.0 million reduction from US$482.7 million at the end of 2019. With shipping delays and port congestion expected to continue in 2022, Samsonite is increasing investment in inventories to support continued business recovery.

The Group generated US$387.1 million of cash from operating activities during the year ended December 31, 2021, compared to US$114.2 million of cash used in operating activities in 2020. The Group prepaid US$370.0 million principal amount of its outstanding borrowings under the Amended Senior Credit Facilities²¹ during 2021. As a result, as of December 31, 2021, the Group had a net debt position of US$1,477.2 million⁸ compared to a net debt position of US$1,735.5 million⁸ at the end of 2020. The Group had total liquidity of US$1,501.4 million⁹ as of December 31, 2021, relatively stable compared to the US$1,518.3 million⁹ as of December 31, 2020.

2021 Final Results – Earnings Call for Analysts and Investors:
Date:	Wednesday, March 16, 2022
Time:	09:00 New York / 13:00 London / 21:00 Hong Kong
Webcast Link:	http://webcast.live.wisdomir.com/samsonite_21ar/index_en.php
Dial-in Details:	https://corporate.samsonite.com/on/demandware.static/-/Sites-InvestorRelations-Library/default/dw886ff043/PDF/press-release/2022/E_Samsonite_FY2021%20Results%20Date%20&%20Conference%20Call%20(FINAL%202022-02-25).pdf

About Samsonite
With a heritage dating back more than 110 years, Samsonite International S.A. ("Samsonite" or the "Company", together with its consolidated subsidiaries the "Group"), is a leader in the global lifestyle bag industry and is the world's best-known and largest travel luggage company. The Group is principally engaged in the design, manufacture, sourcing and distribution of luggage, business and computer bags, outdoor and casual bags and travel accessories throughout the world, primarily under the Samsonite^®, Tumi^®, American Tourister^®, Gregory^®, High Sierra^®, Kamiliant^®, ebags^®, Lipault^® and Hartmann^® brand names as well as other owned and licensed brand names. The Company's ordinary shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK").

For more information, please contact:
Samsonite International S.A. – Hong Kong Branch
William Yue Tel: +852 2422 2611 Email: william.yue@samsonite.com	Helena Sau Tel: +852 2945 6278 Email: helena.sau@samsonite.com

United States – Joele Frank, Wilkinson Brimmer Katcher
Michael Freitag Tel: +1 212 355 4449	Tim Ragones Tel: +1 212 355 4449	Ed Trissel Tel: +1 212 355 4449
Email: Samsonite-JF@joelefrank.com

Non-IFRS Measures
The Company has presented certain non-IFRS measures in this press release because each of these measures provides additional information that management believes is useful for securities analysts, investors and other interested parties to gain a more complete understanding of the Group's operational performance and of the trends impacting its business. These non-IFRS financial measures, as calculated herein, may not be comparable to similarly named measures used by other companies, and should not be considered comparable to IFRS measures. Refer to the relevant announcement/report published by the Company for the corresponding period for reconciliations of the Group's non-IFRS financial information. Non-IFRS measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, an analysis of the Group's financial results as reported under IFRS.

Forward-looking Statements
This press release contains forward-looking statements. Forward-looking statements reflect the Company's current views with respect to future events and performance. These statements may discuss, among other things, the Company's net sales, operating profit (loss), Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA margin, cash flow, liquidity and capital resources, potential impairments, growth, strategies, plans, achievements, distributions, organizational structure, future store openings or closings, market opportunities and general market and industry conditions. The Company generally identifies forward-looking statements by words such as "expect", "seek", "believe", "plan", "intend", "estimate", "project", "anticipate", "may", "will", "would" and "could" or similar words or statements. Forward-looking statements are based on beliefs and assumptions made by management using currently available information. These statements are only predictions and are not guarantees of future performance, actions or events. Forward-looking statements are subject to risks and uncertainties. These risks, uncertainties and other factors also include the effects of the COVID-19 pandemic on the Company's future financial and operational results, which could vary significantly depending on the duration and severity of the COVID-19 pandemic worldwide and the pace and extent of recovery following the COVID-19 pandemic.

If one or more of these risks or uncertainties materialize, or if management's underlying beliefs and assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Among the factors that could cause actual results to differ materially are: the effect of worldwide economic conditions; the length and severity of the COVID-19 pandemic; lower levels of consumer spending resulting from COVID-19; a general economic downturn or generally reduced consumer spending, including as a result of COVID-19; the pace and extent of recovery following COVID-19; significant changes in consumer spending patterns or preferences; interruptions or delays in the supply of finished goods or key components; the performance of the Group's products within the prevailing retail environment; financial difficulties encountered by customers and related bankruptcy and collection issues; and risks related to the success of the Group's restructuring programs. Given the inherent uncertainty about the future impacts of COVID-19, it is not possible for the Company to reliably predict the extent to which its business, results of operations, financial condition or liquidity will ultimately be impacted (see the Management Discussion and Analysis - Impact of COVID-19 section of the Company's 2021 annual report for further discussion). 

Forward-looking statements speak only as of the date on which they are made. The Company's shareholders, potential investors and other interested parties should not place undue reliance on these forward-looking statements. The Company expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable securities laws and regulations.

Rounding
Certain amounts presented in this press release have been rounded up or down to the nearest million, unless otherwise indicated. There may therefore be discrepancies between the actual totals of the individual amounts in the tables and the totals shown, between the amounts in the tables and the amounts given in the corresponding analyses in the text of this press release and between amounts in this press release and other publicly available documents. All percentages and key figures were calculated using the underlying data in whole US Dollars.

¹ In this press release, certain financial results for the year ended December 31, 2021 are compared to both the year ended December 31, 2020 and the year ended December 31, 2019. Comparisons to the year ended December 31, 2019 are provided because it is the most recently ended comparable year during which the Company's results were not affected by COVID-19. During the year ended December 31, 2020 COVID-19 had a significant effect on the Company's financial results.

² Results stated on a constant currency basis, a non-International Financial Reporting Standards ("IFRS") measure, are calculated by applying the average exchange rate of the year under comparison to current year local currency results.

³ On July 30, 2021, a wholly-owned subsidiary of the Company sold Speculative Product Design, LLC ("Speck"), including the Speck brand. For comparison purposes, net sales after July for the years ended December 31, 2020 and 2019 are adjusted to exclude net sales attributable to Speck.

⁴ Adjusted EBITDA margin, a non-IFRS measure, is calculated by dividing Adjusted EBITDA by net sales.

⁵ 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. The Group believes these measures provide additional information that is useful in gaining a more complete understanding of its operational performance and of the underlying trends of its business.

⁶ Adjusted Net Income (Loss), 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 reported profit (loss) 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.

⁷ Total cash generation (burn) is calculated as the total increase (decrease) in cash and cash equivalents per the consolidated statements of cash flows less total cash flow attributable to (i) total loans and borrowings, (ii) deferred financing costs and (iii) proceeds from the sale of Speck.

⁸ As of December 31, 2021, the Group had cash and cash equivalents of US$1,324.8 million and outstanding financial debt of US$2,802.0 million (excluding deferred financing costs of US$12.6 million), resulting in a net debt position of US$1,477.2 million. In comparison, as of December 31, 2020, the Group had cash and cash equivalents of US$1,495.0 million and outstanding financial debt of US$3,230.5 million (excluding deferred financing costs of US$39.9 million), putting the Group in a net debt position of US$1,735.5 million.

⁹ As of December 31, 2021, the Group had total liquidity US$1,501.4 million, comprising cash and cash equivalents of US$1,324.8 million and US$176.7 million available to be borrowed on the Group's amended revolving credit facility. In comparison, as of December 31, 2020, the Group had total liquidity of US$1,518.3 million, comprising cash and cash equivalents of US$1,495.0 million and US$23.4 million available to be borrowed on the Group's amended revolving credit facility.

*   CURV® is a registered trademark of CANCO Hungary Ltd.

¹⁰ The Group spent US$20.8 million and US$5.1 million on capital expenditures and software purchases, respectively, during the year ended December 31, 2021. In comparison, the Group's spending on capital expenditures and software purchases were US$20.6 million and US$5.5 million, respectively, in 2020, and US$55.4 million and US$19.1 million, respectively, in 2019.

¹¹ Excluding net sales attributable to Speck for January and February 2019.

¹² Results for the year ended December 31, 2021 included total restructuring charges of US$17.7 million, a loss on the sale of Speck and total net non-cash impairment reversals of US$31.6 million. Results for the year ended December 31, 2020 included total restructuring charges of US$63.0 million and total non-cash impairment charges of US$920.3 million.

¹³ Operating profit (loss) excluding total net non-cash impairment (reversals) charges, total restructuring charges and the loss on the sale of Speck is a non-IFRS measure and as calculated herein may not be comparable to similarly named measures used by other companies and should not be considered comparable to operating profit (loss) for the year in the Group's consolidated statements of income (loss).

¹⁴ Adjusted basic and diluted earnings (loss) per share, both non-IFRS measures, are calculated by dividing Adjusted Net Income (Loss) by the weighted average number of shares used in the basic and diluted earnings (loss) per share calculations, respectively.

¹⁵ Net sales reported for Hong Kong include net sales made domestically, net sales made in Macau as well as net sales to distributors in certain other Asian markets where the Group does not have a direct presence.

¹⁶ Net sales reported for the United Kingdom include net sales made in Ireland.

¹⁷ The geographic location of the Group's net sales generally reflects the country/territory from which its products were sold and does not necessarily indicate the country/territory in which its end consumers were actually located.

¹⁸ The non-travel category includes business, casual, accessories and other products.

¹⁹ On July 30, 2021, a wholly-owned subsidiary of the Company sold Speck, including the Speck brand.

²⁰ Other includes certain other brands owned by the Group, such as High Sierra, Kamiliant, ebags, Xtrem, Lipault, Hartmann, Saxoline and Secret, as well as third party brands sold through the Rolling Luggage and Chic Accent retail stores.

²¹ During June 2021, in connection with the Sixth Amended Credit Agreement, the Group prepaid US$125.0 million principal of its outstanding borrowings under its amended senior secured term loan A facility and US$100.0 million principal on its outstanding borrowings under its amended revolving credit facility. The Group prepaid US$100.0 million in principal in conjunction with the refinancing of the 2020 Incremental Term Loan B Facility. During the second half of 2021, the Group prepaid an additional US$45.0 million on its outstanding borrowings under its amended revolving credit facility.

²² On June 21, 2021, the Company and certain of its direct and indirect wholly-owned subsidiaries entered into the Sixth Amended Credit Agreement. The Sixth Amended Credit Agreement provides for the 2021 Incremental Term Loan B Facility in the principal amount of US$495.5 million, which was borrowed by the Group on June 21, 2021 and, together with US$100.0 million of cash on the balance sheet, was used to repay the aggregate US$595.5 million principal amount then outstanding under the 2020 Incremental Term Loan B Facility. The interest rate applicable to the Group's borrowings under the 2021 Incremental Term Loan B Facility is equal to the London Interbank Offered Rate ("LIBOR") plus 3.00% per annum with a LIBOR floor of 0.75% (or a base rate plus 2.00% per annum). In comparison, the interest rate applicable to the Group's borrowings under the 2020 Incremental Term Loan B Facility was equal to the LIBOR plus 4.50% per annum with a LIBOR floor of 1.00% (or a base rate plus 3.50% per annum). The loans under the 2021 Incremental Term Loan B Facility were issued with original issue discount with an issue price of 99.75%.

 

View original content:https://www.prnewswire.com/news-releases/samsonite-international-sa-announces-final-results-for-the-year-ended-december-31-2021-301503988.html

SOURCE Samsonite

FAQ

What were Samsonite's net sales for 2021?

Samsonite reported net sales of US$2,020.8 million for the year 2021.

How much did Samsonite's Adjusted EBITDA improve in 2021?

Adjusted EBITDA improved to US$182.3 million for the year ended December 31, 2021.

What was the growth rate of Samsonite’s sales in North America for 2021?

Net sales in North America increased by 47.0% year-on-year.

What challenges is Samsonite facing in 2022?

Samsonite is facing challenges such as shipping delays, port congestion, and geopolitical tensions.

How did Samsonite's gross profit margin change in 2021?

The gross profit margin increased to 54.5% in 2021, up from 46.0% in 2020.