Samsonite Group (1910) H1 2012 earnings summary

Executive summary

• H1 net sales reached $847m, up 13% reported and 18% in constant currency; strong growth across North America, Asia and Europe.

• Adjusted EBITDA rose 16%, adjusted net income 32%, and EPS 22%; cash generation and working-capital management strengthened the balance sheet.

• Growth broadened across brands and markets, with American Tourister, High Sierra and Hartmann adding avenues for expansion.

Financial highlights

• Net sales were $847m, up 13% reported or 18% in constant currency; currency headwinds included euro depreciation of 8.5% and rupee depreciation of 13.5%.

• Adjusted EBITDA increased 16%; adjusted net income rose 32%, while reported net income climbed 263%, against prior-year non-recurring items.

• EPS increased 22%; adjusted EBITDA margin reached 16.1% and adjusted net income equaled 10.4% of sales.

• Gross margin advanced 11% in dollars, with percentage margin slightly lower due partly to brand mix, currency and higher U.S. wholesale mix.

Outlook and guidance

• Management expected FY results broadly in line with market consensus, citing confidence in the remainder of the year after July and August sales tracked budget.

• H2 gross margin expected in the 54%-55% range; pricing, sourcing and new rupee hedges were expected to support recovery, particularly in Asia.

• Adjusted EBITDA margin was expected to improve by year-end; sales growth of 10%-15% was viewed as sustainable over time.

• Long-term sales ambition was to double a business expected to reach ~$2bn next year, through organic growth and acquisitions; timing was not specified.

• Hartmann and High Sierra growth was expected to remain mainly U.S.-based for the next couple of years as positioning and international plans develop.