Operating and Financial Summary Operating Performance Key financial indicators declined year-over-year for the six months ended June 30, 2025, with net sales down 6.0% and operating profit falling sharply by 24.2% Consolidated Operating Results for the Six Months Ended June 30, 2025 | Indicator | H1 2025 | H1 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | 1,661.7 million USD | 1,768.5 million USD | (6.0)% | | Gross Profit | 983.8 million USD | 1,064.8 million USD | (7.6)% | | Gross Profit Margin | 59.2% | 60.2% | (100 bps) | | Operating Profit | 238.4 million USD | 314.7 million USD | (24.2)% | | Profit for the Period | 130.0 million USD | 184.2 million USD | (29.4)% | | Profit Attributable to Equity Holders | 118.2 million USD | 169.4 million USD | (30.2)% | | Adjusted EBITDA | 268.7 million USD | 333.5 million USD | (19.4)% | | Adjusted EBITDA Margin | 16.2% | 18.9% | (270 bps) | | Basic Earnings Per Share | 0.085 USD | 0.116 USD | (26.8)% | | Diluted Earnings Per Share | 0.085 USD | 0.115 USD | (26.4)% | Financial Summary Net sales declined due to macroeconomic uncertainty, while gross margin contracted and the company reduced marketing expenses to manage costs - Net sales decreased by 6.0% year-over-year (5.2% on a constant currency basis) due to cautious wholesale purchasing and weaker consumer demand amid macroeconomic uncertainty13 - Gross margin declined to 59.2% from 60.2%, impacted by an unfavorable regional sales mix and strategic promotional activities13 - Adjusted free cash flow significantly decreased to $11.5 million from $81.6 million in the prior year, driven by lower Adjusted EBITDA and increased net working capital13 - The company repurchased 16,690,800 shares for $42.9 million, and net debt increased to $1.16 billion from $1.10 billion at the end of 202413 Chairman's Statement The Chairman addresses the challenging macroeconomic environment's impact on sales while highlighting business resilience and confidence in long-term travel trends - Net sales declined by 5.2% year-over-year on a constant currency basis, with North America and Asia down 7.7% and 7.3% respectively, while Europe grew 1.6%14 - Premium brands TUMI and Samsonite showed greater resilience with sales declines of 2.5% and 4.7% respectively, while American Tourister sales fell 12.7% (all on a constant currency basis)15 - The Direct-to-Consumer (DTC) channel's sales share increased to 39.6% from 38.1%, with sales declining only 1.6%, outperforming the wholesale channel's 7.4% drop (constant currency)16 - Non-travel product sales grew 0.1% year-over-year (constant currency), increasing their share of total sales to 36.2% from 34.4%, reflecting product diversification efforts17 - The company strictly controlled costs, reducing marketing expenses by 15.9%, while the Adjusted EBITDA margin contracted to 16.2% from 18.9% in the prior year1819 Chief Executive Officer's Report The CEO discusses performance normalization post-pandemic, highlighting strategic investments and a cautious short-term outlook while maintaining long-term confidence - While H1 2025 net sales decreased by 5.2% vs H1 2024, they grew 24.4% vs pre-pandemic H1 2019 (constant currency), indicating a normalization of business trends2425 - Channel performance diverged, with DTC sales down only 1.6% and its share rising to 39.6%, while wholesale sales fell 7.4% due to cautious customer purchasing (constant currency)26 - Premium brands TUMI (-2.5%) and Samsonite (-4.7%) were more resilient, whereas American Tourister (-12.7%) was more affected by consumer sentiment and competition (constant currency)2728 - Non-travel product sales grew 0.1% (constant currency), increasing their sales mix by 180 bps to 36.2%, with the Gregory brand growing 14.7%29 - The company made strategic investments in product innovation and retail expansion (net 21 new stores in H1) while maintaining strict cost controls3031 - The short-term outlook remains uncertain due to macroeconomic pressures, and preparations for a U.S. dual listing are on hold pending improved market conditions3435 Condensed Consolidated Interim Financial Statements This section presents the unaudited interim financial statements, which reflect a year-over-year decline in revenue and profit and include a voluntary change in accounting policy Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, net sales, gross profit, and operating profit all declined, resulting in a 29.4% decrease in profit for the period Condensed Consolidated Statement of Profit or Loss Summary (in millions of USD) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Net Sales | 1,661.7 | 1,768.5 | | Gross Profit | 983.8 | 1,064.8 | | Operating Profit | 238.4 | 314.7 | | Profit Before Income Tax | 184.6 | 250.1 | | Profit for the Period | 130.0 | 184.2 | | Profit Attributable to Equity Holders | 118.2 | 169.4 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets and liabilities increased, while total equity slightly decreased, leading to a significant reduction in net current assets Condensed Consolidated Statement of Financial Position Summary (in millions of USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-current Assets | 3,395.9 | 3,336.6 | | Total Current Assets | 1,835.8 | 1,742.6 | | Total Assets | 5,231.7 | 5,079.2 | | Total Equity | 1,498.2 | 1,545.0 | | Total Non-current Liabilities | 2,111.0 | 2,443.9 | | Total Current Liabilities | 1,622.6 | 1,090.3 | | Total Liabilities | 3,733.6 | 3,534.2 | Condensed Consolidated Statement of Cash Flows Net cash from operating activities decreased significantly in H1 2025, while financing outflows increased due to share repurchases and lease payments Condensed Consolidated Statement of Cash Flows Summary (in millions of USD) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 121.7 | 192.9 | | Net Cash Used in Investing Activities | (30.4) | (41.2) | | Net Cash Used in Financing Activities | (134.0) | (39.6) | | Net Decrease/Increase in Cash and Cash Equivalents | (42.6) | 112.1 | | Cash and Cash Equivalents at End of Period | 669.1 | 815.5 | Notes to the Financial Statements The notes detail a voluntary change in accounting policy for put option liabilities and provide segment information, debt structure, and share-based payment details - The company voluntarily changed its accounting policy to recognize fair value changes of put option financial liabilities related to non-controlling interests in profit or loss, with retrospective adjustments5960 Net Sales by Brand (in millions of USD) | Brand | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Samsonite | 854.1 | 903.8 | | TUMI | 402.4 | 413.9 | | American Tourister | 264.6 | 307.4 | | Other | 140.5 | 143.4 | | Total | 1,661.7 | 1,768.5 | - In H1 2025, the company granted new time-based and performance-based RSUs involving approximately 8.5 million target shares to incentivize and retain key employees136140 - As of June 30, 2025, total loans and borrowings were $1.831 billion, with the $413 million book value of Senior Notes due in May 2026 classified as current liabilities101117 Management's Discussion and Analysis (MD&A) Overview and Key Factors Affecting Performance Management discusses the company's diversified business model and key performance drivers, including macroeconomic conditions, travel trends, and tariff policies - The company's business is highly diversified, with travel products accounting for 63.8% of H1 2025 net sales and non-travel products for 36.2%; the DTC channel represented 39.6% of sales182183 - In response to weaker global consumer sentiment, the company reduced advertising investment by 15.9% year-over-year, lowering marketing expenses to 5.9% of net sales from 6.6%187188 - U.S. tariff policies create uncertainty; the company has reduced its sourcing from China for U.S.-bound products to ~12% from ~85% in 2018 and is taking mitigating actions190191 Analysis of Operating Results This section details the decline in net sales, driven by wholesale and travel categories, and the resulting contraction in gross margin and operating profit Net Sales Analysis Net sales fell 5.2% on a constant currency basis, with declines across most brands, channels, and regions except for Europe YoY Change in Net Sales by Brand (Constant Currency) | Brand | YoY Change | | :--- | :--- | | Samsonite | (4.7)% | | TUMI | (2.5)% | | American Tourister | (12.7)% | | Other | 0.2% | YoY Change in Net Sales by Distribution Channel (Constant Currency) | Channel | YoY Change | | :--- | :--- | | Wholesale | (7.4)% | | DTC Retail | (1.9)% | | DTC E-commerce | (0.7)% | YoY Change in Net Sales by Region (Constant Currency) | Region | YoY Change | | :--- | :--- | | Asia | (7.3)% | | North America | (7.7)% | | Europe | 1.6% | | Latin America | (1.0)% | Profitability Analysis Gross margin contracted due to sales mix and promotions, and despite cost controls, operating profit fell significantly due to operating deleverage - Gross margin decreased by 100 basis points to 59.2%, primarily due to an unfavorable sales mix with a lower proportion of sales from higher-margin Asia and strategic promotional activities226 - Marketing expenses decreased by 15.9% year-over-year to $98.7 million, representing 5.9% of net sales compared to 6.6% in the prior year228 - Operating profit decreased by 24.2% year-over-year to $238.4 million, mainly due to the decline in net sales234 Liquidity and Capital Resources This section details the company's cash flow, capital expenditures, and debt profile, noting a decrease in operating cash flow and an increase in leverage Cash Flow Overview (in millions of USD) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 121.7 | 192.9 | | Net Cash Used in Investing Activities | (30.4) | (41.2) | | Net Cash Used in Financing Activities | (134.0) | (39.6) | - Total capital expenditures decreased by 26.4% year-over-year to $30.4 million, mainly due to lower investment in machinery, equipment, and retail store renovations247 - As of June 30, 2025, total loans and borrowings were $1.831 billion, and the leverage ratio (Total Debt / Total Equity) increased to 122.2% from 115.1% at the end of 2024267285 Non-IFRS Financial Measures Key non-IFRS metrics like Adjusted EBITDA and Adjusted Net Income declined, and the report provides detailed reconciliations to their IFRS counterparts Key Non-IFRS Financial Metrics (in millions of USD) | Indicator | H1 2025 | H1 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | 268.7 | 333.5 | (19.4)% | | Adjusted EBITDA Margin | 16.2% | 18.9% | (270 bps) | | Adjusted Net Income | 123.4 | 174.0 | (29.1)% | | Adjusted Free Cash Flow | 11.5 | 81.6 | (85.9)% | Reconciliation of Adjusted EBITDA to Profit for the Period (in millions of USD) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Profit for the period | 130.0 | 184.2 | | Add: Income tax expense | 54.6 | 65.9 | | Add: Finance costs | 59.2 | 72.5 | | Less: Finance income | (5.4) | (7.9) | | Operating profit | 238.4 | 314.7 | | Add: Adjustments for depreciation, amortization, etc | 30.3 | 18.8 | | Adjusted EBITDA | 268.7 | 333.5 | Strategic Assessment and Future Outlook Management expresses a cautious short-term outlook due to macroeconomic headwinds but remains confident in long-term growth driven by strong travel trends - Cautious short-term outlook: Demand in H2 2025 is expected to be impacted by ongoing macroeconomic and trade policy uncertainties, though Q3 sales may improve over Q2298 - Long-term strategic priorities: Continue to invest in brand elevation, product innovation, market penetration, value-accretive M&A, and driving operating leverage298 - U.S. dual listing plan: Preparations are ongoing, but the company is monitoring market uncertainties and will proceed when conditions improve299 Corporate Governance Report This section outlines the company's governance structure, compliance with codes, and details on share award schemes, dividends, and share repurchases Board of Directors and Committees The board comprises eight members with a majority of independent directors, and its Audit, Nomination, and Remuneration committees are properly constituted - The Board of Directors consists of 8 members, including the CEO, Chairman, and 6 Independent Non-executive Directors, in compliance with governance requirements302 - The Audit, Nomination, and Remuneration Committees are established and functioning, with their primary duties and composition detailed in the report303305306 Share Award Schemes The company utilizes share award schemes to grant options and RSUs, with details on movements and new grants provided for the reporting period - As of June 30, 2025, the company had 65,050,449 outstanding share options with a weighted average exercise price of HK$21.28131 - On June 12, 2025, the company granted 4,247,499 time-based RSUs and 4,247,499 performance-based RSUs (at target), with vesting tied to future annual LTIP Adjusted EBITDA growth targets328332 Dividends and Share Repurchases The company paid a $150 million cash dividend in July 2025 and repurchased 16.7 million shares for $42.9 million during the first half of the year - A cash dividend totaling $150 million, or approximately $0.1085 per share (before tax), was paid on July 15, 2025341 Share Repurchases in H1 2025 | Month of Repurchase | Total Shares Repurchased | Total Purchase Price Paid (in millions of USD) | | :--- | :--- | :--- | | January | 4,164,900 | 12.0 | | March | 12,525,900 | 30.8 | | Total | 16,690,800 | 42.9 |
新秀丽(01910) - 2025 - 中期业绩