Good morning, everyone. Thank you for taking the time to join us for our 2022 results presentation. I'm William, the head of IR here at Samsonite today. We have our CEO, Kyle Gendreau, and our CFO, Reza Taleghani, with us to give a presentation of our 2022 results. Thank you.
Can you hear me? Yep. Good. Before I turn the cover, I think the message on the cover is really important. Travel is back, that's the way I would think about the presentation we're gonna make to you today. We're really, really excited, you'll know by the time I'm done presenting how excited we are. If we go to page 5. Somebody's turning... Yep, great. 2022 was an amazing year for Samsonite, we are really poised and seeing amazing start to the year for 2023. The growth outlook is tremendously strong. We're sitting with a team that is incredibly energized. Our company is amazingly excited about what we've accomplished, I would say over the last few years, but clearly in 2022, we have really amazing results to talk about.
Our 2022 sales improved to $2.9 billion, up 57% to last year. I think importantly, when we look at the trajectory during the year, we ended the second half of the year in positive territory, adjusting for China, which had a bit of a slowdown in Q4. I'll talk about that in a second. Really amazing transformation and pace of growth. 2023 is off to an amazing start. Our 2023 year-to-date February numbers are up 16.5%. If I adjust for China, which is showing signs of recovery, but adjusting for China, up 20% year-to-date February. Really an amazing start to the year. Our gross margin, as we said, we've moved back into historic levels. We're up 130 basis points to last year.
Really positioned for a stronger gross margin story this year as Asia continues to grow, and you'll see margin expansion on the gross margin side. On the adjusted EBITDA side, we've delivered an amazing EBITDA result, $472 million. Equally, if not more important, the margin profile has changed. This is 16.4% EBITDA margin. If you remember, if you've been following us, we started the year guiding 15%, and then as the quarters fell, we saw the margin profile moving each year. Really positive margin story, and that's with advertising start to build. This is an EBITDA margin with advertising at 5.4% for the year, and you should expect us to continue to push advertising in the year.
We had positive cash generation during the year, $75 million, despite adding $340 million or so of inventory as we reposition the balance sheet in the business and the inventory in the business. It's a really strong story. As you know, we repaid debt. During the year, we repaid down $751 million of debt. We have liquidity position of $1.5 billion, so really an amazingly strong balance sheet position. We continue to invest in the business during pandemic. I think over the next two pages, I just wanna point out areas that we strategically continue to drive. We continue to focus on product innovation and development.
We're launching in 2023, and really through 2022 we started introduce amazing new products that we've been developing over the entire time period. Very strong across all of our brands, and I think we're ahead of the industry as far as innovation and products as we step into 2023. We never stopped doing this. All through pandemic, we might've been cutting costs and really managing the business, but we never stopped investing in innovation and products. We managed our suppliers really well. We had, if you can imagine a moment where we're reducing inventory, correcting inventory, and then bringing inventory back into the business to capture demand. We've done that perfectly. You know, we've navigated, and our supply team and our relationship with our suppliers has been tremendously strong in navigating through this.
We reduced SKUs significantly in the business, are back into inventory positions tremendously healthy and really set up to deliver growth in 2023 off of a wonderful inventory position with exactly the right products. We restructured our retail stores and our retail footprint throughout 2020 and 21. We're back to opening stores. We've opened stores in 2022. You'll see us continue to open selective stores, particularly in Asia, Tumi, Europe. William, I need a napkin. It's hot up here. I need a napkin.
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Yeah. That is continuing as we move forward, and you'll see retail expansions moving as we move into this year. We're very focused on CapEx throughout the pandemic, really reducing, but we're now back to investing in CapEx, but in the right areas. Strategically opening stores, but more importantly, refreshing and remodeling retail stores. We continue to invest in our e-commerce. Sorry, it's just very warm up here. The screen's, I think, putting off some heat. I've been running around, and I didn't wanna drip as I was presenting. We've been investing in e-commerce across our business, both in talent and platforms and systems. We've relaunched our Tumi North America platform. We're launching platforms all through Asia, Latin America.
Brand-new websites for monobrand sites across much of Latin America. We've invested in CRM across all of our regions and really laid the footprint from it for a digital story all through pandemic that really sets us up really well with amazing teams. We continue to prioritize sustainability. As most of you know, at the start of the pandemic, we launched Our Responsible Journey. You know, we're we will transform the luggage industry. That's the way you should think about what we're doing. We are driving a real sustainability story both in products and materials, but also in our full ESG strategy, and I'll cover that in a few slides later. The world's concerned about inflation, recessionary impacts. The news is full of bank noise today.
There's plenty to be paying attention to. Our view on our industry is travel will be very strong and travel will continue to move. We expect consumers' desire and demand for travel to continue to build this year. We're seeing that, as I said, at the start of the year. We'll clearly see China start to move this year, and it's already out of the gate, transformative. China in Q4 was down 54%. Q1 looks like it'll be down 15%. My expectation is Q2, China will be slightly positive to 19 from a travel perspective. As this is all moving in, we see this really strong improvement in profitability, you should expect us to support the business with advertising. We're putting a meaningful amount of advertising in the business.
6.5% is what you should expect for next year. That's what we did in Q4 of this year. On page 8, we have an interesting view to our numbers. I think this was a simplified view to give you a sense for where we are on the numbers. Our sales are up $860 million from last year, meaningful increase. I think the important piece on this slide is looking at our EBITDA margin. You compare EBITDA margin from 2019 to 2022. You have a 300 basis point improvement in margin on sales that are still down meaningfully, EBITDA dollars that are about the same level as last year. The next slide gives a different view to that.
If you look at our sales, 2019 to 2022, constant currency, we're down 10%. If you look at our EBITDA dollars, and if I adjust EBITDA for currency, we're actually $525 million of EBITDA. On sales that are down 10%, our EBITDA is up 7%. Really an amazing story. I would tell you, just building momentum, and as Asia catches back up to the recovery with the rest of the business, you'll see this even improve further this year. This slide you've seen before on page 10. Really just looking at the trends. You can see, the last several quarters and the progression we've been making through 2021, into 2022. Importantly, as I said at the start, look at the end of the year.
The end of the year is effectively at 2019 levels on sales dollar basis. If I adjust for China, up 3.5%. If I look into January, February year-to-date, up 16.5%. Really an amazing story. Adjusting for China in the year-to-date February, up 20%. You know, this is a business that is rapidly showing improvement. It's across all regions. I'll show that in a second. And continues to be very strong as each month folds in front of us. The next page gives you a view by region, and you can see for North America, recovering back to 2019 levels. North America in the numbers is impacted by our eBags business, which in 2020 we exited third-party brands.
If I adjusted for eBags, the second half of the year was up 4%. Year-to-date February is up 9.7%. A meaningful increase in North America business and trend continuing. I'll talk about North America in a second from a travel trend perspective. Asia has been the real transformative story. Really recently, at the end of the year into Q1, very strong. If I look at Asia, you know, still down 13%, 14% in Q3 and Q4. If I adjust for China, that's down 4%. China was having one of its worst moments in the pandemic at the end of last year when they went into deeper lockdowns. The rest of Asia was really starting to move. When we get into year-to-date February, the number's up 12%.
I adjust for China, that's up 21% for Asia. Markets like subregions like Southeast Asia, where we're sitting today, Singapore, Malaysia, Indonesia, Thailand, really moving. I'll cover countries within Asia on the next slide to give you a good sense, but all of Asia is really moving at a really rapid pace, probably even more rapid than we saw in other markets which took a few quarters to move. Europe's just been tremendous. Europe started to move into positive territory the middle of last year, really around the summer travel season, it hasn't stopped. Europe is moving and trending in this kinda 10%, 15%, 20% range. I would tell you, we were quite pleasantly surprised with year-to-date February, up 26% and continuing. Even to the surprise of our own team.
You know, the numbers just keep coming in stronger. I think we're set up for probably one of the best summer holiday, travel seasons for Europe in the coming months. Latin America has been an amazing story. We've totally transformed Latin America. Not only are the sales growth numbers incredible, but we fixed the profit profile. Reza will cover that in his section. This is a business that I think over time should be a $400 million-$500 million market for us, and it's $150 million today. Real opportunities to move Latin America as well. You can see across all of our regions, this business is delivering, you know, amazing growth story and the trends continue as we step into the year. Just a bit deeper look on Asia.
We often get questions within Asia what's happening. I would start all the way to the right. I've said this a few times, but look at the rapid pace of recovery for Asia, excluding China, for the last five quarters, really stepping into this year in an amazingly strong position, and it continues. The trend really carries and continues, I think it will continue for 2023. Super positive. You can see markets that are driving it. India's been very successful for several quarters. Even as we talk to our India teams, they're like, "Oh, it's cooling down a little bit," is the kind of vibe. Look at what year-to-date February is tremendously strong. India will continue to be this massively strong market for us. Markets like Japan and Korea.
Which are maybe more cautious markets from a travel perspective, but restrictions being lifted really at the end of Q3 into Q4. You can see as we step into Q4, quickly going to -8%, slightly positive for January to start the year. Korea still improving, but still down negative. Korea needs Chinese travelers. A big part of our business needs Chinese travelers coming to Korea. In our view, we'll start to see that probably in Q2, maybe middle, end of Q2, we will see Korea move. These markets have plenty to go. When I think about forward views for Asia, these are big markets and important markets, and they're just starting their journey on recovery. You see Southeast Asia, where I started with. These are amazing numbers. The, the year-to-date February numbers are amazing and continue.
I think you'll see a really good story here. We're here in market. We're in Singapore for those that are watching. The streets are busy. The airports are busy. We just went by the cruise ship terminal, totally full with cruise ships. This is a market that's moving, and we can see it everywhere we move. Australia is a bit like the U.S. in doing exactly what I would expect. It's moved into positive territory, and really moving, and I know the Australians are traveling, and I expect this number to continue to improve. The real story is China when we think about what's left to recover, and you can see how heavily impacted China was in the middle and back half of last year with zero COVID policy.
As that lifted and we saw quick movements in China, maybe not in the month of January, but by the time we got to the end of January and got to February, you really see China moving. A really dramatic shift. When you see year to date down 19% versus running down 50% or 60%, you can get a sense for what the next month and the next month's gonna be. I really think this will move. Every week there's new news in China around where Chinese can travel. Countries are opening up, and I think you'll see the confidence for travel build right in. If there's ever a consumer that has pent-up demand for travel, it's the Chinese, I do expect this to boom.
Domestically, when we look at the domestic data, domestic travel is almost back to historic levels. International travel still, only 15% recovered. There's a massive amount of international travel that I think we will clearly see, as we get into the end of Q1 and Q2 for sure. I think the back half of the year for China is gonna be tremendous. The next slide we've shown a few times. If you haven't looked at this is our journey of pandemic, and you can really see way back in 2020 how dramatic the impacts were in the progression of recovery. Really over time, the recovery's been tied to vaccinations and travel restrictions lifted. We're sitting in a world today where all of that's played out really well.
I think the key takeaway for this slide is there's still recovery to come. We talk about exciting numbers, but the travel industry still has 20%-25% recovery to go, and it's happening. You know, we're seeing that. That's why Asia's starting to move. That's part of the reason why these numbers through December are still down. You will see this, in my view, by the time we exit next year. A lot of the forward indicators say we'll be back above travel from a volume basis perspective, which will fuel into our story for the rest of the year and really into 2024 as this travel recovery plays out. Very exciting there. A sense for the U.S., just to give you a sense for the pace and what's happening.
TSA numbers are another measure of travel in the U.S. They're tracking kind of the number of people traveling through airports. We've had some record moments all through the period, but year to date, or January, not year to date, but the month of January, up 3%, okay? This is first time shifting into positive. February looks to be the same number. I think this will continue. I think the holiday, summer holiday travel season in the U.S. is tremendous. If you've not traveled to the U.S., every plane's full, every airport's full. If you haven't booked a hotel yet for your summer holidays, you might not get one because it's really an amazing moment for the U.S. I would say Europe's in the same trajectory.
Very, very positive, and that's coming for Asia too as well for this year, I'm certain. Business travel has started to come back. I started to see business travel back at the end of last year. We knew in our own business we were getting back together, but you clearly see it. The forward indicators for 2023 are very, very strong. Business travel will continue to come back. We play into that really well with our brands. All of our brands play in, but particularly brands American Tourister and Samsonite have a real opportunity to capture this business traveler, and I expect this to really continue to boom throughout the year, this year as well. We're seeing it today. You know, we're seeing conferences back. We're seeing people back together, from the business perspective.
That will bode well for our business. If you look at market share, I really look at 2020 to 2022. We've added 200 basis points of market share. I would say we're just starting because we're in such a strong position. We've got the inventory in the right place. We're not missing any sales because of our inventory levels. We have the right inventory. We have amazing new products. I would say 40% of what we're selling today is brand new, right? We constantly refresh. You know that we do that, we're in such a good position. We had a built up of amazing products that we kind of hauled off launching in 2021. They're launching at the end of 2022. For sure in 2023 you'll see really exciting new products. That will continue.
We're able to invest in advertising. You know, how do you gain market share? The right products, the right distribution channels, well-supported with advertising, and we can do all of that right now, which is gonna continue to grow this for us. On 17 gives you a view of the advertising. We consciously held advertising back during pandemic. We were still spending, but, you know, as anybody would, we trenched this back. Look at the pace that we can add and the share of voice we can have when we can move back to an advertising level that we can tell our story. Really for next year, I would guide that we'll spend 6.5%, and in Q4 we got there.
One of the measures, just to call out on the side, in Q4 with advertising at 6.5%, which we've been at before, but for a long time we've been in the 5.5% range. At this full level of advertising, EBITDA margin of 17.5% for the quarter. Very strong ability to continue to push and invest, and Reza and I are doing that with our teams to make sure we support all of our brands with advertising. Just a few clip-its. These aren't live videos, but just to give you a sense, we're advertising across all of our regions. This is a New Beginnings campaign. As Asia started to move, we created a campaign to talk about travel. That's in Asia, really moving.
Outlab Paradiver in this Paradiver collection, and this is a product that we've been talking about the last few days, a really exciting product. One of them is called Ecodiver, which is a fully recycled product. This is U.S.-Advertising during 2022 on bags that the consumers had shifted to and really doing well. These have quickly become top sellers within our business, well supported with advertising. Europe's gonna be launching a Expect One For You campaign with our business bags within Europe. Zalia 3.0 and Pro-DLX, and this is version six, an amazing bag that I've started traveling with. These will be launching and be well supported with a campaign.
When we think about business travelers coming back, and I think particularly in Europe, after the summer holiday, you'll find that people are really back to business. We'll be out with two amazing products, well supported with advertising. Across brands, you know, when we talk about our story and what we've been achieving, all of our brands are performing. Every one of our brands, our three core brands, very strong. Samsonite, up 72%. You'd expect as travel's rebounding, brand Samsonite, which has a mix, a heavier mix of travel, really performing well. Tumi, up 35%. Tumi had a pretty decent year last year, so that's part of it. Tumi missed some sales this year. Tumi, first half of the year, we were chasing inventory, and so that's held Tumi back. Tumi's numbers exiting 2024, I mean, 2022 into 2023 are tremendously strong.
I expect really amazing things for Tumi, not only in North America, but in big markets like Japan. I mean, yeah, Japan and China and Hong Kong, that are really just starting to move. This is a very relevant brand for these markets, so I think you'll see an improving trend there as well. American Tourister, 66%. Entry-level brand, really strong brand, well supported with product. That consumer probably started to move a little slower, but is really moving now, and I expect to have a tremendous 2023 with American Tourister. Then some of our other smaller brands, where we're doing some correcting and fixing, but all delivering positive growth during the year. On sustainability front, our ESG report will come out in April.
I'm really proud of where we are, and the report really tells a wonderful story. Just a few highlights of what we've achieved during pandemic. First off, our product sales, our company sales, total company, 23% of what we sell today incorporates some level, meaningful level of recycled materials. That's up from 5% in 2019, when we just started. 2019, we started to test what we could achieve. Really amazing transformation. Every next product that we design and develop, we're thinking about materials along with all of our other ESG initiatives, and you should expect this to move. Nobody in the industry is moving at this pace, and we really are coming up with amazing products. I'll show you a few in a second.
Just in 2022, we diverted $100 million , I mean, $100 million, I'm always thinking dollars, bottles into our products away from landfills. That's nearly as much as the last four years, just to give you a sense for the pace that we're moving. We're really using this rPET fabric in liners. Now exterior of our bags are really get moving to this as well, and there's so much we can do here. We're driving all of the real research and innovation here on using rPET within our industry. We started to test Take Back. If you really think about sustainability and the life cycle assessment of products, and closing the loop with our products, you need to figure out what to do.
Our products last a long time, there is a moment where they will come to an end of life. How do we deal with that within our ESG goals? Some of it's around take-back and working with local recyclers to test what's possible to Take Back luggage. One day we'll be able to Take Back luggage and turn it into luggage. I think that's in our, in our radar of what we're thinking about when we close the loop and bring kind of full circle our products. There's a lot we're testing. We've tested a lot right here in Singapore, Malaysia, Indonesia. We've done a lot of really interesting things where we can partner with recyclers to do amazing things with taking back luggage, and the consumers really like it.
It also helps sales because they're turning in luggage, and we give a small discount in many markets to get them to do that. As I said, the whole circular economy and the full product life cycle assessment, and we're doing a lot of work. Look at the ESG report when that comes out. It gives a really good picture of what we're working on and how do we close the loop and what's next for the next five and 10 years. This is, we call it Our Responsible Journey 'cause it's over a passage of time. You can expect that every year we will make progress here with our teams. From a climate perspective and management of sustainability, we've done a lot over the last couple years as well.
Just in renewable energy, we're, we've increased that 25%. 25% , more than doubled it, so 25% of our energy is renewable. You'll expect more there. We conducted our first Scope three greenhouse gas emissions survey, not only for our four walls and the stuff we manage, but our suppliers, so we can start to think about how do we really move our carbon goals in the business and really assessing what the landscape is so we can make the right decision. A lot going on there, and this was a big milestone of actually making the assessment so we can start to set the targets for ourselves. We set up some really appropriate governance council within the business, so we engage the entire business.
We have a global sustainability council reporting into me with Zeke, who reports into me as head of sustainability. Leaders from each of our regions and functional areas on a steering council for this business. We've started to add layers like product council and communication councils to really think about what's next for product. What's the right targets we set for products? How do we communicate both internally and externally, making sure we do that the right way to bring not only our organization along, but our consumers and our investors? We're adding other councils on operation efficiencies and production, so we can really make sure we're getting to greenhouse gas reductions. A year ago, we launched a D&I committee as well that's very important to us within our ESG strategy.
I think we have very good governance. The team, the company is laser-focused. I'm championing this with all of the SMT members in the business. Again, I'd read the ESG report. It really gives a different lens into what we're doing as a company that's very exciting. Just a few things on product. Essens is a product that's Europe designed and developed, produced in Europe. This is largely a recycled product. This is the next generation of recycled products using post-consumer waste, both for the exterior shell and the liner is rPET. It's really a transformative product and I think it'll be well-received by the market. Very commercial. If the pictures don't do justice when you get near the product, it's very gravitating. You wanna be part of it. It's customizable. You can change colors.
It's got click assembly wheels. One of the things we like to do with our products is keep them in service. This is a product that you can, with a pen, click the wheel off and replace the wheel. The wheel is one of these things over time can change. How do we design for repairability? This is a product that's taking that on. It's really capturing a lot of amazing features, extremely lightweight. When it's out, it's just launching right now in Europe, so if you're traveling through Europe, you'll see it. I think Asia's picking it up, and even North America will pick this up, and I think it's gonna be a home run for us.
Within Asia, so we're sitting in Asia, BEAMIX is a product that we've launched, it was a product that we designed in 2021, but we held launching until the market was moving in Asia. It's a Red Dot Design Award winner designed by our team here, really an amazing piece of work. It's very technology focused. It's got fingerprint opening. It's got our best suspension wheels. The white case is made with recycled polycarbonate, working with Sony Semiconductor. If you think about CDs and things that are polycarbonate that can be recycled, we've worked directly with Sony to make this material. It's a very exciting material, and it's one of the first to launch with this, and I'm sure there'll be others coming. Really exciting.
One of the features I like in this bag, too, is the logo lights up when you're using the bag. It's just kind of a neat thing when you're moving through, particularly at night. It's a really neat feature. You know, I'm passionate about our brand logo, so I really like seeing it lit up. It's really a cool feature. Lastly, and I covered these from a marketing perspective, Pro-DLX 6 and this Pro-DLX series has been a long-standing series for this business. Very, very successful. This is fully recycled interior. really well-designed bag. Reza and I are both carrying the bag, and it's really terrific. Zalia 3.0, which really drives our women's business product. Very, very successful. Interior and exterior recycled material.
Really an amazing story of recycled material in a bag that I think is terrific, and will be very successful. It's launched, we're gonna really push it with advertising as we get into the back half of the year. I would suggest you check that out as well. With that, I'll turn it over to Reza.
Thank you so much. We're on the slide with our results highlights. Kyle covered some of this. I'll go through some of it quickly. In terms of sales, delivering almost $2.9 billion of sales. Constant currency, that's 57.4% improvement year-over-year. Gross margin is something that we're very proud of, 'cause if you were listening to all of our earnings announcements during the course of last year, obviously, there was a lot of inflationary pressure. To be able to end the year with 55.8% gross margin, which exceeded our 2019 level despite all of those pressures with freight, the raw materials costs, non-renewal of GSP in the U.S., I think is a tremendous result, and we're very excited about that. Kudos to our supply team.
Some of the members are in this room today with us, in terms of being able to do that with us and partnering. In terms of adjusted EBITDA, as Kyle mentioned, $472 million, but if we were to adjust that for currency, we would've exceeded our 2019 level as well in terms of adjusted EBITDA, largely on the back of, obviously, the gross margin recovery, but more importantly, all of the cost savings that we'll get into and that we've talked about over the course of the year. Net income, $296 million of net income, exceeding 2019 by a material level, $80 million of net income delivery in excess of 2019 levels as well. On the next page, just some of the financial highlights again.
$2.9 billion of revenues. Obviously, that was still in spite of the fact that China had not recovered. We expect the China recovery in Q1, Q2, to get back to those 2019 levels, and then to try to exceed on the back half of the year as well. Excluding China, second half sales were at 3.5% ahead of 2019 levels. Adjusted EBITDA of $472 with a margin of 16.4%, compared to 2019, it's only $20 million lower on the sales that were materially lower at the end of the year. Gross margin, we talked about on the next page. As it relates to fixed SG&A expenses for 2022, only 24.1% of sales.
670 basis points improvement for 2021, 320 basis point improvement from 2019. Very, very material reshaping of the cost structure. Almost $300 million lower than 2019 in terms of the fixed cost base, if you can think about that. Significant work has gone to resetting that cost structure, which we continue to have discipline around this year. Advertising spend, Kyle mentioned it as well. We have an interest in investing behind the brands. Advertising spend increased by $74 million to $156 million. More of that to come during the course of this year as well, as we ended the year at 6.5%. We have a desire to maintain that 6.5% over the course of this year.
On slide 31, total cash generation, $75 million, and if you look at it, we'll have a slide where we cover it by quarter. To be able to deliver cash every single quarter while we were chasing inventory, while we were investing in CapEx, while we were investing in inventory levels to the tune of $339 million, I think is quite an achievement that we're proud of. We, and we used our excess cash to repay debt, so our net debt position improved to a little bit below $1.4 billion as of the end of the year. Net debt as of December 2022, only $78 million higher than where we were at pre-pandemic at 2019.
To have navigated this entire pandemic with basically our net debt levels the same, I think is something we're proud of. We made voluntary prepayments of $705 million of our debt. We've had a commitment in terms of delevering, and that includes both as the EBITDA improves, our leverage naturally comes down, but also in terms of actually repaying debt as well. As a result of those actions, the future annualized interest expense savings are approximately $39 million. Real tangible benefits in terms of those debt repayments as well, and still ample liquidity.
Throughout, we've maintained approximately $1.5 billion of liquidity, which I think is quite enough to navigate any sort of shocks to the system if anything were to happen in the future as well. On slide 32, I'll just draw your attention to really the Q4 numbers. Kyle did cover the regional performance in his section. If we look at the Q4 numbers, constant currency, you can see it below each of the bars. Q4, North America delivering 25.2% year-over-year growth. Asia, 39.9%. If you exclude China, 65.2% in Q4. Europe maintaining very, very strong year-over-year improvement and as compared to 2019 as well, 53.2%. The Latin America business truly has been transformed.
As you look at the quarterly numbers for Latin America, please bear in mind Q1 is the strongest quarter for Latin America with a strong back-to-school business in the Southern Hemisphere. Q4 is still delivering 13.2% year-over-year growth as well. The previous year was very strong for Latin America as well. On page 33, same thing as looking at the region, this gets to the whole point around the cost cuts. I just draw your attention to the margin numbers. North America's business, 19.3% EBITDA margins as compared to 12% back in 2019, largely on the back of all of the cost savings, shutting stores that are non-profitable.
Asia, the one region that has still to rebound, still room to improve over the course of this year, but yet still delivered 18% as compared to 21.2% in 2019. You can expect the same sort of growth of exceeding those 2019 levels as the sales come back as well. Europe, 18.3% as compared to 13%. We completely re-transformed and looked at the entire retail fleet in Europe, and this really is driving the profitability of that business. And we believe that that's gonna be sustainable going into the future. The Latin America business, a business that used to be break-even, showing real EBITDA generation going forward. So $21 million of EBITDA, 12.4% margins as well.
We expect that to transfer into this year as well. We have a couple of bridges on the next couple of slides. Slide 34, I'll just draw your attention to the FX impact. It's something that's very real for our business. We have about $200 million of FX headwinds, largely off of a couple of currencies. The euro, obviously EUR 62 million of impact. Turkish lira, Japanese yen, being the leading ones there. As you work your way to the right side of the page, obviously, we disposed of Speck. We shut down our Russia business as well. There was impact of China lockdowns.
On the right-hand side of the page, all of the regions delivering sales to basically continue that year-over-year growth to get us to approximately $2.9 billion. On the next slide, on slide 35, this will give you a sense in terms of the mix by sales channel as well as travel versus non-travel. The theme in 2022 is really as travel started to come back very strongly, the travel mix started to increase more, and we expect that to happen. As a market reopens, such as China, it usually opens with the travel products, and then non-travel, it balances out over time, and that's what we experienced. The same thing happened in terms of the mix between wholesale and our own DTC.
Now we have basically in 2022, all of our retail stores are finally open again. Our wholesale channels are open, that's going back to a more normalized mix between wholesale and DTC as well. Slide 36, really every brand performing. Again, Kyle mentioned this as well, but looking at the numbers, Samsonite, tremendous growth, $1.4 billion in terms of sales delivery in 2022. Tumi delivering approximately $650 million of sales. American Tourister, tremendous growth as well to $519 million. A lot of that coming from India, which has really just been exceeding all expectations in certain months, delivering twice the level of sales that what they used to do in 2019. Some of our smaller brands performing as well, obviously, Gregory, Lipault, and all the others.
Every single brand that we have in the portfolio really delivering results and contributing to sales. Slide 37 is this fixed SG&A point. Significant fixed SG&A savings were implemented during the pandemic and really driving profitability. Working from left to right, we're looking at the 2019 adjusted EBITDA number. Obviously, we have that FX impact again here, so about $53 million of FX impact. We disposed of Speck. We shut down our Russia business. Obviously, there was the impact of China lockdowns. $134 million, if you're bridging from 2019 to where we are today, was really the gross profit impact from having a lower sales environment. Look at what we've done on the right-hand side. Over $200 million of decreased fixed SG&A more than offsetting that. That continues.
That fixed cost structure benefit continues into 2023, which is really enabling the strong margin number of 16.4% as compared to 13.5% in 2019. Again, on the next slide, getting into it a little bit greater detail. Just looking at the fixed variable and then the advertising. And, and we'll comment a little bit on 2023 as well here. The fixed cost base, significant improvement. Looking at it in 2019, we have fixed costs of $993 million. In 2022, $695 million. You can expect that that benefit there. Obviously, we're gonna start to invest in some store growth. There'll be some additions that we'll have as well.
Largely, the fixed cost base as a percentage of sales should continue to improve in terms of the percentage number. The one area variable will obviously flex as sales start to come back. The one area that we are looking at increasing is that advertising number. We expect that we'll continue to deliver at margins that are really approaching record levels in terms of where we are from an EBITDA perspective, while investing in advertising at very high levels as well. Slide 39. This is a new way of just, we wanted to basically show quarter by quarter what's been happening to the free cash flow generation of this business. It really highlights the point.
If you look at the investments that we made in inventory, we are starting the year with a very, very healthy inventory position. We spent a lot of time every quarter trying to chase inventory, and as the inventory would come in, it would go out the door out of our warehouses. Where we are now, we've managed to get our inventory level to $687 million by the end of Q4, and still generated $37.6 of free cash flow despite doing that. As you can see, every quarter delivering quarterly cash. We're not burning cash anymore, we're generating cash. Obviously, it's mostly in the green, and that's in spite of investing in CapEx.
Even in Q4, we spent approximately $30 million of CapEx and still managed to deliver that positive free cash flow result as well. With regards to the balance sheet, we are continuing to de-lever. Obviously, the leverage is a combination of trying to repay the debt that we borrowed during the pandemic, just to have as an insurance policy. We have done that. The EBITDAs continue to improve. We ended the year at 2.85x turns of leverage, which is really approaching our pre-pandemic levels of 268- 263. We have a commitment to try to continue to delever.
We've always said that our intent is to basically continue to repay debt as we generate free cash flow, and we've demonstrated that through the quarter and through the year. On slide 41, the working capital levels. We have covered this. The one note that I'll make is we have purposefully been increasing our inventory levels, and we expect the working capital efficiency to improve to historic levels as the sales start to come in, especially during the course of the summer. We feel very comfortable in terms of the inventory replenishment. We have very healthy levels. And it's very good quality stock because obviously, we through the pandemic, we cleaned all of our inventory and reduced our SKUs. We feel very good about our working capital position as well as the efficiency. Again, slide 42.
Just to give you an indication of the journey we've been on with regards to inventory. As you can see, it dipped down significantly during 2021. It was not for lacking of placing orders and for selling inventory. It was basically between the supply chain challenges that we faced in 2021, and as the inventory would come in, the sales would basically take it immediately out of the warehouse. Now we're at a level where we feel very good about where our warehouse stock levels are. Slide 43. In terms of CapEx, you can see that we're returning to a healthy level of CapEx. This is still below our historical levels. We spent approximately $63 million on CapEx.
You can expect this to return to our historical levels, which are around $100 million-$110 million, and largely around the refurbishment of our retail fleet. It's been several years since we've refurbished the fleet. We're sitting in Asia here today. There's a lot of stores that are being remodeled as we speak right now to try to get them to the levels that it need to be. You can also see that we've invested in our own property and plant as well. Specifically, $21.4 million in 2022 went into our own factories. That was about $12.7 million went into our Europe factory. Then we made meaningful improvements to our India plant as well.
We spent about $6 million of it in 2022 in terms of improving both the warehouse as well as the plant and production in India as well. With that, let me turn it over to Kyle to talk about the outlook.
Okay, just quickly. You can tell we're excited about where we are. We're seeing recovery... Sorry. We're seeing recovery really close to 2019 levels ending the year. You can clearly see we're ahead of 2019 as we step into 2023. Plenty of recovery to go, not only in travel, but in pockets of the world as we've recovered. All of this is at a fundamentally higher margin profile in the business. We can afford to push the business with advertising. We can afford to have the right inventory across the world, and a margin profile that you'll see is very strong at the end of the year, and I think you'll see an improving trend for 2023 as well. We talked about inflation and recessionary concerns.
You know, the news today is flooded with bank worries. Our view, and even with the bank worries that we're watching in the news today, my view is travel will continue. I think the propensity for people to travel and get back to traveling will continue. I expect Asia, and particularly China, to do exactly what we talked about. I think markets like U.S., Europe, Latin America, will continue to move. We will see a really good story for 2023, and I think it will carry and build throughout the year. We're focused on gross margin. We've always been focused on gross margin. We've shown what we can deliver on the margin side during really challenging times. You should expect this margin profile to improve because the mix of the business is improving.
As Asia moves in with higher margins, we'll see margin expansion this year on the EBITDA side. We will work carefully and closely with our suppliers as we've done throughout the pandemic and as we step into this year. Our supply teams have just done an amazing job of delivering what we need at the right cost to deliver margin for the business. I do expect China to move. I think that the move from zero COVID to really opening up the market will really drive and have a significant boost to Asia. Let's not underestimate all of Asia, which is delivering amazing results. Not only will China move and be transformative, but we're seeing much of Asia moving.
When Japan and Korea start to move, I think, you'll have a full circle for Asia really delivering a good story for not only 2023, but really set up for an amazing 2024 as well. We're gonna increase our investments, as we were talking about, definitely in marketing. As we're opening up and we're in the right position, we have a real ability to kinda move our market shares, and our teams are very focused on it, and we will continue to drive sales growth. Our SG&A has been well managed. I would tell you it's running even a bit ahead of our own expectations as far as where we are with fixed SG&A and our ability to maintain that. You should expect that to carry into 2023 and beyond in a very comfortable way.
We'll start to make tactical strategic decisions on expanding our business. You should expect us to open some retail stores in the right markets. You should expect us to make strategic investments in teams as we push initiatives like ESG further, and we continue to push digital strategies and making sure that we have the right resources in the business. All with a mind to making sure we continue to deliver fixed cost leverage in the business as we move forward. Our energy levels are very high. Our team energy level is amazing. I said on the call last night, don't underestimate the power of having a really amazing brands, but with a highly energized team, and I have zero doubt on our team.
You know, as far as where we are, we've navigated through a lot together, people are in exactly the right mindset to deliver market share gain. We're spending a lot of time moving around, being with our teams, and the energy level is very high. That will fuel a good story for us this year as well. We're totally committed to sustainability and transforming this industry that we're in. We will be the leaders in this industry. For me, it's as much that as it is really doing our part to transform what we can on the ESG front, on carbon reduction, on all the initiatives that I think are very relevant, and we have a company that's fully engaged.
There's not one employee in this company that isn't aware of what we're doing from an ESG perspective, you should expect more from us every year as we move forward. I'm personally very excited about that. We have this amazing balance sheet. I think one of my slides said, Rock-solid balance sheet. You know, in a moment where the world's, you know, really moving, there's lots of questions on recession, inflation, this business is on tremendously solid foundation to really, invest and push this business in the right way. We've had this liquidity, this balance sheet position throughout the pandemic. It was really an amazing accomplishment. We never really slipped.
We were able to navigate with all the challenges to keep this balance sheet where it is, and I think that's one of our scale advantages, our ability to have the balance sheet and the strength to continue to push this business. I'm tremendously excited about that as well. With that, I guess we'll take some questions, William, Thanks for coming.
Thank you, Kyle and Reza, for the presentation. We'll start with taking questions from the audience on the floor.
If we have any.
Yeah. Richard. Richard, hold on.
Just so we get you on the webcast. Yeah.
Hi.
[audio distortion]
Thank you, management, and congratulations on your results. Could I ask, can you shed some light on, in terms of the price increases that you instituted for 2022, and if you are able to, maybe even by brand. Did Samsonite prices go up higher, Tumi higher, American Tourister higher? Could you also give a little guidance in terms of your price, increases, if any, for 2023? Thank you.
Yeah, sure. Yeah, we've had this question. I would generally say we're done with price corrections that really were happening in 2021, a bit into 2022 to start, where we were really managing against the cost pressures in the business from a materials perspective, a sourcing perspective. When I think about where we are, we will take price where we need to, but we're beyond the point of having to move price to manage margins back to historic levels. We're also seeing a moment where some of these pressures are cooling off, and so you see shipping costs dramatically down. We're seeing some commodity costs down. The strength of the dollar at the moment is helpful from a sourcing perspective for us.
We're in a really good position margin-wise, and one of the comments I made earlier was 40% of what we're selling this year is new. Our story isn't all around moving price, it's around engineering products and hitting price points that are relevant in the market, while able to deliver the gross margin story. I don't think this year will be a discussion of pricing. This is year as a discussion of volume growth, unit growth as it continues. I think we're well-placed, on the pricing side. Lots of folks were navigating throughout the pandemic, because there were plenty of pressures. I would say on balance, our prices across all brands are probably, I'm gonna give you a range, up 15%-20% from pre-pandemic, but that's kind of where the world is right now.
I think those are the levels that we, that we're using to navigate margin back to historic levels. What you should expect from us is margins by region to stay very consistent, maybe a little bit of upside. The mix effect of our business margin will move up because American Tourister is growing. I mean, Tumi is growing faster. That's a higher margin business for us, largely because of the point of sale and the positioning of the product. Asia's moving at a faster clip, which will have a mix effect on our margins as well. That won't be a pricing piece. That'll be pieces of our business growing at different paces that will fuel a good margin story. I would say we're largely done with pricing.
I'll just add, the purpose of the price increases was to maintain margins. As you can see in the results, we managed to maintain that. As you start to see, we don't have the same inflationary pressures we did last year. If anything, freight costs, which are a huge component of our business, have come down to historical levels. The desire is not to try to squeeze the consumer or do anything like. It's just to try to make sure that we're maintaining the margin profile. That pressure, as it alleviates, the need for it also dissipates.
I think the other thing we have in our business that's different than a lot of competitors in our space is we cover the full spectrum of the market with American Tourister, Samsonite, and Tumi. So we can use these brands the right way. We don't need to push something artificially up to deliver. Each brand's playing its game in exactly the right place, delivering a margin profile that's the right level for those brands. Whereas other markets, you know, they maybe don't have the same breadth of portfolio to cover all of the consumer demands.
Thanks.
More questions from the floor? While we're waiting for people on the floor to think up questions, let's see if there are any questions online.
I think we're done.
Yeah.
Yeah. Go ahead, Richard.
Oh, you sure can. Yeah.
We like questions.
Given the fact that the Federal Reserve has been increasing interest rates and by quite a lot, right? I understand our balance sheet has improved tremendously and continue to improve, right? We are going to end up paying a high interest rate. Am I correct? If so, right, can you give us an idea the kind of impact it will have on us in 2023 and 2024, actually? Thank you.
Overall, if you're looking at the base rates that we have, as you can tell over the course of last year, there's been 300, 400 basis points increase in base rates. If we did nothing to the balance sheet, it would have about a $28 million impact on interest expense. Having said that, we're looking at refinancing some of our debt as well. We still have two years to do it, so we'll look at basically maintaining that capital structure going forward. The way we've been managing it is obviously we have some interest rate hedges. Approximately, we typically like to have half of our interest rate fixed between the Euro bonds that we have as well as the hedges. Going forward, as those hedges lapse, obviously that could have an impact as well.
Right now we're hoping that by the time those hedges lapse in about a couple of years, the interest rate environment will be a little bit more normalized. The impact on this year, the way that we've managed it, and I mentioned it a little bit earlier, is by repaying the debt. Those two numbers help to offset one another, but we have to see what happens over the course of 2024 as well.
Good. Oh yeah, go ahead.
Question there.
Yes. Let's see if we have any questions from people watching online.
There's one in the room, William.
Oh, there is one? Okay.
Once again, to ask questions on the phone, please press star one one.
Hello.
Yes. Good. We got you.
I just have two question, I guess. One is like, how should we think about the sustainability of growth into 2024? Especially in U.S. and Europe, where we are probably two years into the recovery. The second question is, can you comment a little bit on the level of discounting in 2022 versus historical level and what you think the reasonable level of discounting is for 2023 and 2024, especially given our comment around like increasing advertising spend. I'm just thinking from a gross margin or discounting perspective, what the profile look like. Yeah. Thank you.
I'll take the discounting piece. One of the transformative pieces and one of the things we're watching for very carefully this year is as competitors get back into inventory position, what that looks like. I think the comment I made on engineering products and what we sell every year is new. We also navigate products knowing that we'll end up in a discount position. I think we're well placed to manage that. Our discounting for 2022, 2021 is probably at half the levels of where we were pre-pandemic. I think the real trick will be, and I think we've fundamentally reset the way we think about our brands in discounting, and I think the market's adjusted.
The real trick will be how much of that can we carry into this year, to manage margin profile. I think we'll be well-placed. I think it'll probably increase a bit towards the back half of the year than what we've, what we've seen in 2022, but we'll have managed the business to deliver the same gross margin with that as well. The second question was?
It was revenue growth in 2024.
Oh, yeah
...expectations.
I would tell you 2023 is still a transformative year. You know, when we think about getting into 2024, you'll get the full year effect of travel, you know, getting back to historic levels and continuing to grow. I think 2024 will be a good growth year for us. Obviously this year will be, you know, still transitioning, you'll see a really meaningful growth story for us as you're seeing as we start the year. I think next year, and my general personal view on travel, and the data would suggest there's this enhanced desire and appreciation for travel that's come out of the pandemic. I think people's view to travel has transformed.
In an industry that always has a meaningful story, a meaningful growth story ahead of GDP, I think it's transformed, that I expect 2024 to be really another amazing year of travel, and 2025 I think will continue. Particularly 2024 because you're coming off of a transitional year this year will be, I think equally as strong. There's still recovery happening. When we talk about some of the growth within regions on a unit basis, they're not fully recovered. You know, if you think about pricing and where we are, there's more unit growth to go and I think we're in a stronger market position. You should expect us with these extra investments that we've talked about to be able to push our share more.
Not only as an industry that I think will continue to be positive in 2024 forward, but we should be able to gain share in those windows as well with amazing products that we've talked about, but also well-supported with advertising. I think 2024 is very exciting. I think 2023 will be a record year for us, and 2024 will just build off of that foundation as the way to think about it.
Just to add on the discounting point, it's, because there will always be some level of discounting that you'll see, but you have to understand the way that we're managing it is where something may have been a 50% discount, now it'll be a 30% discount. Importantly, the number of days that we're on sale has been significantly reduced as well. I only mention that 'cause oftentimes we get questions saying, Oh, I just went on the website and things are on sale. That's on purpose. It's also, we're aiming for a specific gross margin profile that we're trying to get, and that's where we see the real impact of that.
Good. Anybody else?
Was there anything online, William, or?
Okay. Let's switch to online.
Once again, to ask question, please press star one one. One moment for question. Yvonne Chow. Please go ahead.
Hi. Can you hear me?
Not so well, William.
Not so well. Can you speak up again?
All right.
This is much better.
Much better, right? Okay. Thanks very much for the chance to ask question, and congratulations. I have two questions. The first one is on FX headwinds. I noticed that FX headwinds is still quite big in fourth quarter of 2022. Actually U.S. dollars softened a lot in that quarter. I wonder why was that? Because when I looked at the past three quarters, actually the FX headwind, you know, FX headwinds and U.S. dollar moves is actually quite in the same direction. It's just that last quarter is a bit off. I wonder why was that and, you know, whether there's any way that we can gauge the FX headwinds. Secondly, on M&A, I think you mentioned last night that in 2024, dividend payout could be put on table for discussion again.
I'm wondering whether, you know, in 2024, you will be open to M&A considerations at all. Thanks.
I'll do that. Why don't I start with FX and then you can comment on the M&A. As it relates to FX, we're a dollar reporting company, and you can tell there's certain currencies that we Maybe if we put it on mute on that side. Okay. As it relates to FX, during the course of last year, there was obviously a lot of dollar strength. What you have to keep in mind is there's two impacts to FX. The one is on our reported results. In Europe, we sell in euros, then it gets translated into dollars. That's the impact on sales. Obviously there's other currencies, but the euro is the biggest component of it.
That, if you look at where we are now, is starting to normalize a little bit, and quite frankly, it could even reverse, where we start to get a benefit over the course of the year if we go back to historical levels. The other component of the FX is on the cost structure side, where it does give us some leverage where we can try to recoup some of it. For instance, if you're going to some of our suppliers, obviously we're buying, you know, products, for instance, we could be buying product out of China. As there is the dollar starts to appreciate, we look at the profitability that's happening in those countries, and we go and work with our suppliers to try to recoup some of that. From a net income perspective, it starts to come out.
Having said that, where we stand between Q4, Q1 right now, it is starting to flatten out a little bit. The impact of the FX is starting to reduce. There are a couple smaller exceptions for that. Obviously, we have a business in Argentina, we have a business in Turkey, so those, you have some inflationary sort of economies that are there, but the biggest one being the euro, and that started to stabilize.
It's hard to predict, right? It's one of these things you can't predict. What do we do on the sourcing side? We hedge, you know, for some of our major currencies, so we neutralize the effects of movements on hedging, so we can manage pricing and sourcing with our suppliers. On the translation side, it's something you just deal with. We're pretty transparent as a company, so when you get the reporting, we're pretty good at pulling out the currency impacts. You should expect us to continue to do that. I don't know what the year will be. I think there's probably some indications that it'll be in our favor from a translation perspective.
You know, the world's in a different place today with what's going on with the banks, so we'll see what currencies do on that front as well. On M&A opportunities, I would say we're always listening and looking at opportunities. As you can imagine, coming out of pandemic, there's a lot of companies that are in different positions. The way I would describe it is we have such a good story in front of us with what we have for brands. We will continue to be focused there, but we will continue to look at things as they come along. There's nothing imminent, but we will look. We're in the position to be able to manage an acquisition. So it's not that we can't do everything.
If you remember, we were acquiring brands like Tumi, and we had our dividend policy well in place even while we were doing that. We'll be factoring that into our thinking as we move forward. I wouldn't rule out us looking at M&A acquisitions because I think it's the right thing to do. You know, we have such a good story with what's around us today. We'll deliver an amazing 2023 and a really amazing 2024 even without acquisition.
Dividends was the other one.
I think she was asking dividends tied to acquisition. I think, you know, we're evaluating. I think we'll be in a position in 2024 to really put it on the table again to think about. We're not committing to that, but I think, you know, this business will be generating a really meaningful cash flow this year. For sure, 2024 will be meaningful. We'll be able to de-lever and also probably get back to that. More to come on that as we get closer to the end of the year.
Once again, to ask question, please press star one one. There are no more questions on the line. Back to you.
Good.
Great.
Great. Thank you.
Thanks, everyone.
Just wanna see if there are any final questions from the floor. Oh, okay. We do have one.
Hi. Thanks so much for taking my question. I just was wondering, if as we get into 2024, and then it becomes more of a long-term growth story, how fast do you think your various markets can continue growing? India, maybe Southeast Asia versus, say, U.S. and Europe. The other question is, what do you think your ideal leverage would be? Thank you.
Do you wanna do it?
Sure. I'll take the second question first and then back to the growth rate. As it relates to leverage, it's always interesting for us depending on where our shareholders sit. We have demonstrated through the pandemic that this business can support a leverage. I mean.
At one stage, if you looked at it, we had negative EBITDA, and we were still supporting because there's decent cash flow generation that comes from the company. Having said that, we've stated that our goal is to be around two turns of leverage. If absent an acquisition, all we're gonna do is continue to delever. When Kyle was around before me, this business had no leverage once upon a time, and I'm looking at our chairman who's here. It was the same. So from a leverage standpoint, it's really a function of, we have every expectation that we'll generate cash, repay debt, and continue to go that absent any sort of acquisition.
As it relates to the growth profile by region, as you can see, there's two things that are happening. The first one is really the recovery that we're seeing. If you look at the different regions, North America came out of the pandemic first. They have recovered, and they're getting back to historical levels of revenue growth. That's usually in the mid-single digits. You know, our expectation is that we will grow slightly ahead of the market as we look at it by region, just given the strength of the brands and the advertising profile that we have. As we go around the world, North America, we'll revert to that during the course of 2023.
Europe is still quite continuing to perform, and there's actually still a good level of potential growth to come from Tumi penetration in Europe. If you look at the number of Tumi stores we have in Europe, it's actually below where it was when we acquired Tumi. It's obviously every time we open a store there's a really, really great profit profile that happens with that, so you can expect us to grow Tumi especially in Europe and then to have some targeted growth that happens in that market. Latin America, it's off of a small base, but we're starting to see double-digit growth in Latin America. One of the strategic shifts that we've done in Latin America is entering the Brazilian market in earnest. We've changed the way that we approach that market.
Huge population base, great demographic profile, things like that should drive incremental growth in that market, so it'll be outsized. We look at it and say, you know, $500 million business, where can we get it in terms of $600 million business, et cetera, over the medium term? Then there's Asia. Asia is just starting to reopen. You've seen... When I say Asia, obviously China, which is usually one of our biggest countries globally, is just starting. If you're thinking about 2023 into 2024, the same sort of projections that we saw in terms of Europe, you can expect that. Our expectation is that China will start doing that in the back half and onto 2024 as well.
The other thing that I'll just leave you with is just, if you think about it, we talk a lot about revenue growth. We don't spend a lot of time talking about the units, and we alluded to it a little bit earlier. Just if you look at where we're leaving 2022, we still are not back to unit levels compared to 2019. Depending on the region, we're still 15%-20% below the units that we have. Over the course of this year, if the expectation is that we get back to the same unit levels, you would think by 2024, global travel demand is gonna be exceeding 2019, so there should be additional runway there as well. Long-winded answer to your question, but I think .
We're very optimistic in terms of not only 2023, but 2024 as well.
Thank you very much.
Thank you.
Good.
Great.
Thanks, everyone.
Thank you very much, everyone, for joining the presentation today. Thank you, Kyle and Reza, for the presentation.
Thank you, everybody.