(Report Producer Author: Zheshang**, Ma Li, Zhan Luyu, Zhou Min).
A century-old global luggage leader, multi-region + multi-brand + multi-channel to achieve full coverage of low, medium and high-end markets. Founded in 1910, the company currently has its own brand Samsonite as the main engine, Tumi, American Tourister and other brands as the secondary engine, and its main products are travel luggage and backpacks, which are sold to more than 100 countries around the world, including the United States, China, India, Japan, etc., through wholesale, self-operated and online. At the end of 2022, it had 985 self-operated stores worldwide, a decrease of 309 stores from 2019. In 2022, as the world gradually opened up mobility, the company achieved revenue of 28US$800 million, a recovery increase of 42% compared to 20215%, and the net profit attributable to the parent company was 3$100 million, a recovery growth of 2,086 compared to 20217%, still not reaching the all-time high (2018 revenue of $3.8 billion, net profit attributable to the parent of 2.8 billion$400 million), and there is still room for recovery growth.
The global luggage leader has a solid position, and the company's market share ranks first. According to Euromonitor data, Samsonite has always maintained the largest market share in the global suitcase market from 2013 to 2022, and Samsonite has a market share of 15 in the global suitcase market in 20229%, 3 more than the second-place LVMH3pct。
Single-brand leading multi-brand fully covers the low, medium and high-end markets, showing a clear growth curve. Before 2012, the company focused on the Samsonite brand and mainly sold travel luggage through wholesale channelsSince 2012, the company has developed through a series of acquisitions and organic development, and now has a diversified and complementary brand portfolio, the main luggage brands include Samsonite, Tumi, American Tourister, Kamiliant and Lipault Hartmann brands, and the main backpack brands include Gregory and High Sierra. The products cover a wide range of ** bands, such as the luggage brand, Samsonite covers the mid-range market, TUMI covers the mid-to-high-end market, and American Tourister covers the mid-to-low-end market.
1.1 Development history: a century-old luggage leader with a global layout, a clear growth path for a single brand and multiple brands
1.1.1 From the United States, to the world (1910-2010).
The 100-year history shows the company's business resilience, and it has developed globally with its strong product and brand power. Samsonite was founded in 1910, with its lightweight and tough products and innovative design in the early stage of development, it broke through in the American luggage industry, established the leading position of American luggage, and aimed at the global market after its listing on NASDAQ in 1993, especially in the Asian market for many times, and forward-looking layout of China, India and other markets with huge consumption potential.
1.1.2 Extended M&A to promote growth, starting multi-brand and multi-channel operations (2011-2017).
After listing, frequent extension mergers and acquisitions were carried out around luggage brands and luggage retailers, and multi-brand and multi-channel diversified operations were launched. In 2011, the company was listed on the Hong Kong Stock Exchange, and since then from 2012 to 2017, it has carried out 9 mergers and acquisitions, the main purpose of which is to expand market share through the acquisition of other luggage brands and the acquisition of online and offline luggage retailers to expand channels.
Acquire luggage brands to expand market share, and acquire luggage retailers to expand channels. In terms of luggage brand acquisition, in 2012, the company acquired the affordable luggage brand High Sierra to supplement the outdoor product systemIn 2014, it acquired the French fashion luggage brand Lipault to further expand the female marketIn 2014, it acquired the American outdoor backpack brand Gregory, which improved the layout of high-end outdoor luggage productsIn 2016, it acquired TUMI, a leading American business travel luggage company, at a premium of 33% to open up the high-end affordable luxury market. In terms of retail acquisitions, in 2015, it acquired Rolling Luggage, the world's largest retailer of airport luggageIn 2015, it acquired Chic Accent;, a retailer of Italian bags and travel goodsIn 2017, it acquired ebags, the world's largest online luggage retailer.
1.1.3 Internal and external troubles, Taoguang (2018-2020).
The triple blow of increased financial risk + Sino-US ** friction + new crown pandemic has significantly put pressure on revenue and profit. On the company's own side, frequent mergers and acquisitions have led to a surge in the company's goodwill and liabilities, and the financial risk has increased under high leverage. The Company's goodwill, loans and borrowings increased from February 2012 respectively1/0.$400 million surged to 134/19.US$500 million, with a leverage ratio of 107% from 3% in 2012. In terms of the external environment, the increase in tariffs between China and the United States + the new crown pandemic has put significant pressure on revenue margins. In 2018, due to the Sino-US friction, the tariff on suitcases imported from China was increased by 10% to 25%, which adversely affected the company's gross profit marginAt the beginning of 2020, the pandemic restricted consumer travel and reduced the use scenarios of the company's main products. From 2018Q1 to 2020Q4, the year-on-year growth rate of the company's operating income has decreased quarter by quarter, from +212% down to 58%;Net profit attributable to the parent company in 2020Q1 was the lowest in history of -7900 million yuan.
Taoguang Yanghui: "throttling and controlling costs + channel adjustment" to reduce costs and increase efficiency, and improve profitability. On the one hand, the company has significantly reduced its sales expenses after 2020, and the sales rate in 2022 will be 33%, compared with -5pct in 2019, and the distribution expenses and marketing expenses will be 81/1.$600 million, -329%/-17.7%；On the other hand, the company actively optimized its channels, closing a total of 461 inefficient self-operated stores from 2020 to 2023Q3, and opening 188 new high-quality stores against the trend. Measures such as cost reduction and efficiency increase, channel optimization and other measures to enhance the company's profitability and provide support for the rapid improvement of the external environment.
1.1.4 Travel from the east wind, hit the bottom** and start again (2021 to present).
Consumer travel is gradually returning to normal, and performance is ushering in a strong recovery. Since 2021, countries around the world have successively relaxed travel restrictions for tourists, with the United States, China, and Japan fully liberalized in March 2022, December 2022, and October 2022 respectively, and the tourism market has ushered in a strong recovery, and the company's performance has entered a stage of rapid recovery growth, with the company's operating income +21% year-on-year to 9$5.8 billion, net profit attributable to the parent company +98% year-on-year to 1US$1.5 billion, benefiting from the liberalization of global mobility and the company's cost reduction and efficiency improvement measures in the previous period, the company's performance continued to improve, and the stock price reversed and repaired strongly.
1.2. Equity structure: equity dispersion, ownership and management rights separation
At present, the company has no actual controller, the ownership and management rights are separated, and the equity is relatively dispersed. As of the 2023 interim report, the top three shareholders of the company are Schroders Group, JPMorgan Chase, and Bank of New York Mellon, with shareholding ratios respectively. 59%、 5.35%, all of which are large financial groups with strong assets;Timothy Charles Parker, the current Chairman of the Board of Directors, holds 408%, which is the largest individual shareholder.
The company's core management has been deeply involved in the industry for many years and has rich leadership experience. Timothy Charles Parker, Chairman of the Board of Directors, and Kyle Francis Gendreau, Executive Director, have served since 2011 and have laid the foundation for the execution of the company's long-term strategyOther core executives have also been deeply involved in the industry for many years, and most of them have been in the company for a long time and have rich management experience.
In the short term, the company will usher in greater performance elasticity due to the vigorous development of the global tourism market and the strong recovery of the travel chain, and the recent performance growth is highly certainIn the long run, we expect that the future tourism market has broad prospects, the growth rate of the aviation industry market space is significantly higher than before, the growth rate of the suitcase market in the next five years will be significantly higher than before, and the competition pattern of the suitcase market industry has a trend of decentralization and concentration, which is good for the industry leader, and the company is expected to seize a larger market share in the future.
2.1 The tourism market is recovering vigorously, and the travel chain is recovering strongly
The tourism market is recovering strongly, and the growth rate of the global and national tourism market in the next five years is significantly higher than in the past. According to Euromonitor data, the compound growth rate of the tourism market in the world, the United States, China, and India from 2010 to 2022 is 07%/3.5%/1.8%/7.8%, and** the compound growth rate will increase significantly to 134%/7.5%/27.7%/19.3%。We believe that the recent strong start of 2021** and the rapid growth of the travel market in the next five years will give the company's main product luggage sales more room for growth.
Consumer air travel spending has recovered significantly, with strong growth in flight sales globally and in key markets. According to Euromonitor, the compound growth rate of global consumer air travel spending from 2010 to 2022 is 34%, and** the compound growth rate will increase significantly to 6. from 2022 to 20275%；The compound growth rate of global flight sales from 2010 to 2022 in the world, the United States, China, India, and Japan is 03%/3.8%/-2.7%, and** the compound growth rate will increase significantly to 151%/7.9%/37.5%。We believe that the company's luggage business is highly connected to the aviation industry, and with the recovery of flight sales and strong growth in the future, the company's sales opportunities will increase significantly.
Recently, the domestic tourism market has recovered strongly, and the Mid-Autumn Festival ** week in 23 years has been performing for more than 19 years. According to the data of the Ministry of Culture and Tourism, this year's Mid-Autumn Festival and National Day holiday is expected to reach 82.6 billion passengers, +86% year-on-year, and a recovery of 104 compared to 19 years1%, achieving domestic tourism revenue of 783.4 billion yuan, a year-on-year increase of +1295%, compared to 19 years of recovery of 1015%。We believe that the Chinese market, as the company's second largest market, ushered in strong growth in the tourism industry after the full liberalization of travel at the end of 22, providing the main support for the company's short-term performance growth.
2.2 The industry competition pattern is scattered The trend of concentration is obvious, and the leading companies are expected to seize a larger share
The company ranks first in the suitcase market share, and the industry competition pattern is scattered and concentrated. According to Euromonitor data, the company's leading position in suitcases is unshakable, and the company's market share has been as high as 19 in 18 years4%, the market share fell to a low of 13 in 20 years due to the sharp reduction in consumer travel9%, followed by gradual recovery from '21, with a market share of 15 in '229% (+15pct）。From the perspective of the industry, the industry competition pattern is scattered and concentrated, and the changes in the CR5 and CR10 of the suitcase industry are basically consistent with the changes in the company's market share, and the CR5 and CR10 of the suitcase market in 22 years are 33% and 37% respectively, both of which are +2pct year-on-year in 2021 and +5pct 4pct year-on-year in 13 years. We believe that the competition pattern of the suitcase market industry has changed from fragmentation to concentration, and the company is expected to seize more market share as the absolute leader in the industry.
The obvious recovery of travel demand, the size of the luggage and suitcase market is growing definitely. According to Euromonitor, the global travel box market size will grow at a compound growth rate of 1 from 2010 to 20228%, and** the compound growth rate will increase significantly to 80%；The compound growth rate of the global, United States, and China luggage market size from 2010 to 2022 is 31%/7.1%/7.1%, and** CAGR 6 from 2022 to 20279%/5.4%/8.8%。We believe that the company's main product is suitcases, and the scale of the suitcase market will expand rapidly in the next 5 years, and the company, as an industry leader, is expected to greatly benefit from the rapid growth of the industry scale.
3.1. Brand side: The strong brand asset package fully covers the low, medium and high-end markets, showing multiple growth curves
The company's most valuable assets are the brand asset portfolio with strong brand power and product power and strong diversified operation capabilities. The company adopts a clear multi-brand strategy, rich growth poles, the three main brands Samsonite, Tumi, American Tourister all have a long history and active and efficient marketing activities to cast a strong brand power, product technology and fashion design to create a strong product force, differentiated positioning covers the high-end, high-end, mid-end consumers respectively, casting the company's performance growth core moat.
3.1.1 Samsonite's main brand: a century-old suitcase leader, brand power and product power resonance to create the world's first
1. Brand power: With a hundred years of history, it has accumulated strong brand power, released innovative materials and products for many times, and led the development of the suitcase industry. Founded in 1910, Samsonite became the only registered and approved luggage manufacturer by IATA (Global Aviation Association) in the 1980s. Matthew. Williamson, Alexander McQueen, etc.
Samsonite's main brand has experienced rapid growth after the bottom of the performance reversal, demonstrating the resilience of the leading brand. The 2023Q3 Samsonite brand revenue is 4$9.8 billion, a year-on-year increase of 2022Q3+201%, compared with 2019Q3+180%, Samsonite's revenue has exceeded the 2019 level with its strong brand power and product power, showing the strong vitality of the century-old brand accumulation.
2. Product technology: CURV and other exclusive materials build solid technical barriers, and technology empowers product functional advantages. In terms of cabinet materials, the brand's exclusive patented curv thermoplastic composite material is exceptionally light and strong, making the suitcase resistant to strong impacts and lightweight and environmentally friendlyIn terms of suitcase front pockets, tri-we**e (three-dimensional weaving technology) makes suitcase front pockets extremely tough and abrasion resistant;In terms of wheels, the aero trac shock absorber wheels use a special shock absorption suspension system, which makes the cabinet more stable support and protection.
3. Product design: The co-branded model strengthens the fashion attributes of the product and is good at using IP to enhance the attention of the product. In 2023, the Rossonite brand will launch co-branded products with New Balance, Boss and Disney to strengthen the fashion attributes of the products, adapt to the IP economy, enhance the topicality of the products, and continue to bring freshness to consumers.
4. Marketing: In terms of brand promotion, we pay attention to the use of entertainment star endorsements to open up the Chinese market. In 2023, Yang Yang and Yu Shuxin will be officially announced as brand spokespersons, compared with hiring Chen Daoming as spokespersons in 2014, the company's current choice of spokespersons is more topical, conforming to the development of the fan economy.
3.1.2 TUMI: brand power + product power + channel power, accurate card position in the high-end business market
A mature high-end luggage brand with a long history, exclusive innovative materials + global channel layout. TUMI was founded in 1975 and listed on the New York Stock Exchange in 2012. With the revolutionary ballistic nylon fabric material innovation, it established a strong consumer mentality in the high-end market, and then started global development in 1990, laying out the European and Asia-Pacific markets, and selling in 1,900 stores and authorized dealers in more than 75 countries in 2018.
The mid-to-high-end luggage track in the card slot ushered in a strong year in 2021**, and the revenue of the TUMI brand increased considerably compared to 2019. 2023Q3 Tumi brand revenue is 2$1.4 billion, +293%, +16 YoY 2019Q3At 9%, TUMI sales** were the strongest, mainly due to more resilient high-end consumption.
Establish consumers' minds with fist products using exclusive materials, and empower product power with technology. In the 1980s, TUMI launched an exclusive ballistic nylon material to enhance the durability of the product, and the toughness of the ballistic nylon material reached the military standard, which greatly extended the life of the productTegris is also a tumi-exclusive cabinet material known for its lightness and strength. With products equipped with unique technology, TUMI solves the core pain points of consumers (durability and lightness), and gradually builds the consumer mindset among mid-to-high-end consumers.
In the name of the champion, the high-end tonality of the brand is highlighted. In July 2023, TUMI officially announced the spokesperson Lando Norris (British F1 champion racing driver), and in August 2022, the official spokesperson Son Heung-min (Korean football Asian champion), the brand prefers to use champion spokespersons, and the champions have a widely recognized sense of credibility and respect, as well as strong recognition and reputation, which is more in line with the brand's high-end positioning and ultimate product power.
3.1.3 American Tourister: Focusing on the mid-range market with high cost performance, the world's third largest luggage brand
The world's leading luggage brand, focusing on high cost performance. Founded in 1933, the American Tourister brand has a long history, always with a cost-effective brand label, and the innovative use of Tri-Taper materials to quickly increase brand awareness, and in the 1960s became the first brand in the world to pass flight tests during luggage quality inspection, and the brand voice has grown rapidly.
Brand revenue recovered quarter-on-quarter, but still slightly below '19. The 2023Q3 American Tourister brand revenue is 1$7.4 billion, +194%, year-on-year 2019Q3+18%, American Tourister's positioning in the mass market was greatly affected by the consumption classification, but it has also recovered to the level of 19 years, showing the resilience of the top brands.
3.2. Channel side: channel reform helps the brand to improve, and actively expands stores + improves the efficiency of single stores to improve channel power
The channel structure continues to be optimized to help the brand improve. The proportion of DTC channels has increased significantly, and the company has actively developed DTC channels during the performance pressure period, with the proportion of DTC retail in 2023H1 being 28%, an increase of 2pct compared with 2019H1. In terms of regions, the proportion of DTC retail channels in North America, Asia, Europe, and Latin America was 33%, 20%, 31%, and 37% respectively, compared with +5pct +2pct -2pct -7pct in 2019H1, respectively, and the proportion of retail channels in North America and Asia in the top two markets increased to drive the overall upward trend.
The upgrade + expansion of directly operated stores have been restarted and accelerated, driving the growth of scale. From 2020 to 2022, the company closed a total of 440 inefficient directly-operated stores, and resumed the net opening of 16 directly-operated stores in 2023H1, including 32 new stores and 16 closures, and officially opened the renovation of retail stores that had been postponed in the previous period, resulting in a corresponding increase in capital expenditure, and the company's capital expenditure increased by 48% year-on-year in 2023Q1-38% to 0$4.9 billion, and the company expects to continue to increase capital expenditures in the second half of the year to upgrade and expand its direct stores.
The single-store model continued to be optimized, and the store operation capacity continued to improve. In the past three years, the company has continued to optimize its channels, and after the sales in 2022 warmed up, the channel reform has achieved remarkable results, and the efficiency of single-store stores in 2022 and all regions in 2022 has exceeded the level of 2019, and sales in 2023 have further improved, and the single-store model has increased by more than 30% compared with 2019. The annualized store efficiency of self-operated stores in 2023H1 is 99$40,000, +256%, +30 YoY 20199%, benefiting from the company's channel adjustment in the early stage, opening new high-quality stores, closing inefficient stores, greatly optimizing the single-store model, and significantly enhancing the profitability of stores. In terms of regions, the annualized single-store store efficiency in North America, Asia, Europe, and Latin America in 2023H1 is 148 respectively9/74.4/117.3/45.$700 million, +14. year-on-year in 20229%/+62.8%/+9.8%/+10.7%, respectively, compared to +33 in 20198%/+34.9%/+33.6%/40.0%, the efficiency of single-store stores in all regions increased by 30% compared with 2019, the single-store model was greatly optimized, and the store operation capacity was strongly improved against the trend.
4.1.1. On the revenue side: "multi-country + multi-brand + multi-product + multi-channel" has strong diversified operation capabilities to open up revenue growth space
Sales all over the world, Asia and North America are the company's first.
The first and second major markets. In terms of regions, the operating income of Asia, North America, Europe, and Latin America accounted for 39%, 34%, and 21% 6% of the operating income in 2023Q1-3, respectively, compared with 2019Q1-3 +3pct -3pct -1pct +1pct, and the sales in Asia showed stronger**.
2023Q1-3 Asia has the strongest recovery. 2023Q1-3 Asia, North America, Europe, and Latin America operating income +62% +19% +17% +22% year-on-year, respectively, reaching 109%, 94%, 100%, and 125% of 2019Q1-3 revenue;In the past three years, the growth rate of operating income in Asia has been the fastest in all regions after the reopening of travel, and the revenue in North America has not yet recovered to the level of 2019, mainly due to the adjustment of the company's brand in 2021** speck business and ebags online business.
The United States, Chinese mainland, India, Japan and Belgium are the top five markets, and the Chinese market is recovering strongly. In terms of countries, the company's operating income in the United States, Chinese mainland, India, Japan, and Belgium in 2023H1 was 58/1.4/1.3/0.9/0.$900 million, accounting for 32% 8% 7% 5% of the company's total revenue.
Samsonite, Tumi, and American Tourister contributed 91% of revenue, and the proportion of revenue from each brand remained stable. In terms of sub-brands, Samsonite, Tumi, and American Tourister achieved operating income of 13 in 2023Q1-3 respectively8/6.3/4.US$900 million, +33%, +41%, +30% year-on-year, accounting for 50%, 23% and 18% of the company's total operating income, respectively.
The company's sales are strongly related to the tourism market, and tourism-related products contribute 66% of revenue. In terms of products, the operating income of the company's tourism and non-tourism products in 2023H1 was 117/6.US$0.0 billion, accounting for 66% and 34% respectively, of which, the operating income of business, leisure and accessories products in non-tourism products was 34/1.6/0.US$900 million, accounting for 19%, 9% and 5% of the company's total operating revenue, respectively.
Under the strategic investment, the proportion of DTC channels has increased year by year, and the reform of directly operated stores has been fruitful. In terms of channels, the company's wholesale and DTC channel operating income in 2023H1 will be 111/6.US$700 million, +36% and +46% year-on-year, accounting for 62% and 38% of total operating revenue, respectivelyAmong them, DTC-retail and DTC-e-commerce accounted for 28% and 10% of the operating revenue, respectively. Under the company's strategic layout, the proportion of wholesale channels has continued to decline in recent years, and the proportion of DTC channels has increased, reflecting the effectiveness of the company's direct store reform.
4.1.2 Profit side: profitability has been significantly improved
The gross profit margin was steadily restored, and the expense ratio was steadily reduced. The company's 23Q1-3 gross margin was 591%, +3 YoY 22Q1-37pct, 19q1-3+32PCT was mainly due to the increase in the proportion of revenue in Asia with higher gross margins, and the increase in the proportion of TUMI revenue in the mid-to-high-end marketOn the expense side, the sales rate, management fee, and financial rate in 2023Q1-3 were 34%, 7%, and 4%, respectively, +05/-3.3/-0.4pct, strong cost control drives the company's management and financial rates In the process of continuous decline after 2020, the increase in sales rate is mainly due to the initiative to increase marketing expenses to promote sales.
The increase in gross profit margin and strict cost control drove the EBITDA margin to continue to improve. The company's adjusted EBITDA margin for 23Q1-3 was 193%, 22Q1-3 +33pct, 19q1-3+48pct, strong operating leverage and cost control brought about by an efficient operating expense structure are the core drivers.
By region, Asia had the highest adjusted EBITDA margin. In 2023H1, the Company's adjusted EBITDA margins in Asia, North America, Europe, and Latin America were 25%, 20%, 16%, and 14%, respectively, with adjusted EBITDA margins in Asia benefiting from higher gross margin levels and the continued recovery of international travel in Asia.
Impairment charges recovered steadily, and were partially reversed as the sales outlook improved. Due to the impact of the travel policy, the company's impairment charges reached 91.6 billion, accounting for 71 percent of the net profit loss attributable to the parent company that year7%, since 2021, with the liberalization of travel and the continuous improvement of the company's sales, the impairment expense has gradually been reversed, and the impairment expense will be reversed to 0 in 20227.2 billion yuan, no impairment charges in 2023H1, goodwill and intangible asset value remained basically stable, and impairment charges have been almost zero since 2021. Profitability has increased significantly, and the company's net profit attributable to the parent company in Q1-3 was 31/2.US$700 million, with a net profit margin of 11% and 10%, respectively, +7pct +6pct compared with the same period in 2019, exceeding the profitability level in 2019. The company's cost reduction and efficiency improvement + channel optimization measures during the trough period have been effective, and the profitability has been significantly improved.
4.1.3. Operational efficiency: The company's active stocking led to an increase in the absolute value of inventory, and the turnover efficiency continued to improve
The absolute value of inventories is still at an all-time high, and the company's inventory in 2023Q1-3 is +32% year-on-year to 7US$400 million, mainly due to the company's large-scale inventory reserve since 2022Q1 to deal with the company's anticipation of a large number of sales opportunities and supply chain crises after the gradual liberalization of travel. Inventory turnover continued to improve, with inventory turnover days of 148 days in 2022, -12 days year-on-year, mainly due to the recovery of sales to accelerate inventory turnover.
4.1.4. Asset-liability side: high financial leverage, the proportion of goodwill is stable and decreasing
The leverage ratio is high, the solvency has improved, and the proportion of goodwill is relatively stable. Corporate loans and borrowings in 2023H1 are 19US$400 million, with a leverage ratio of 155%, the company's leverage ratio has been at a high level since the acquisition of TUMI in 2016, and the company's loans and borrowings have shown a steady decline since 2021, and the company's leverage ratio is expected to gradually decrease in the future. The company's EBITDA interest coverage multiple for 2023H1 is 62. There has been a significant improvement compared with 2021, and the company's solvency has been established. The ratio of the company's goodwill to total assets in 2023Q1-3 was 17%, which was higher than that in 2019Q1-3 -7pct, mainly due to the large impairment charges drawn in 2020.
This article is for informational purposes only and does not represent any investment advice from us. To use the information, please refer to the original report. ）
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