Earnings Call: H2 2011

Mar 28, 2012

Are those set? Good morning, everyone. My name is William Yue. Welcome to Samsonite's 2011 final results announcement. Thank you very much for joining us today. Today, we have our three Executive Directors, Mr. Tim Parker, Chairman and CEO, Mr. Kyle Gendreau, CFO, and Mr. Ramesh Tainwala with us today to present the results for the year 2011. As you may have seen already, we have had a very strong year. Without further ado, we will begin the presentation. First slide, just want to give everyone a couple of seconds to read through the requisite disclosure statement. A lot of boilerplate, but that's what the SFC wanted. We'll have to do it. We can't guarantee anything we say. Yeah. Given that we're all among friends, I'll take this as read and pass over to Tim to begin the presentation today. Okay. William, thank you very much. Welcome everybody to our maiden full set of results post the IPO. I must tell you without gloating and without looking too proud, that we think this is a fantastic outcome. We're very pleased to report that our net sales are up by over a third. Our adjusted EBITDA is ahead by 47%, and our net income, adjusted net income, is up by 57%. Perhaps I should say at the outcome, so I don't keep repeating myself, that nearly all of the comparative statistics this morning will be after allowing for the cessation of the Timberland and the Lacoste licenses. Those are licenses that we gave up at the end of 2010. Obviously, we don't want those to interfere with the proper comparative numbers. The other clear point I should make is that if you look at the bare net income numbers, you will see that apparently the profits go down by 75% or something ridiculous. Of course, that number bears no reality in comparison whatsoever with the underlying performance of the company. That reflects the fact that we had some significant impairment of our net assets in 2008. We wrote back that amount, which was 300 odd million dollars in the prior year, and of course, that super flattered the 2010 figures and made the 2011 figures look not quite so fantastic. I wanted everybody to be clear that that adjustment is a key adjustment. We also made an adjustment for the one-off cost of the IPO. I will not have to refer to that again. The underlying numbers that you see this morning are the true sustainable results of the business. Of course, we are very proud of them. Why have we achieved this? Well, fundamentally, of course, we had superb growth in our Asian markets. We achieved absolutely record sales of Samsonite and American Tourister. The growth rates across all categories were very strong indeed, especially in our core travel category. But also the business and casual categories, which we said we would achieve very strong growth rates. We have done. We have continued to invest significantly in our marketing campaigns, and you will see a few of those this morning, I hope. Our global distribution network, 100 countries, continues to expand. Of course, as a result of the very strong underlying profits, our cash flow has been enhanced significantly. The balance sheet is very strong, and we are obviously looking at ways to develop the company off that very strong position. Of course, the highlight of last year was our listing on the Hong Kong Stock Exchange. A very enjoyable event that was, and it is very nice to be back here today and to have beaten the original forecast in our prospectus, which it has to be said, were pretty conservative. Nevertheless, we feel that we have fulfilled the promise that we indicated at the time of our IPO. Moving on to the next sheet. A little bit more detail. I would point you to the numbers at the bottom of the page. As I was saying, our sales are up by over a third in 2011. Of course, as a result, the gross margin contribution of the business rose significantly by around 30%. That was in spite of the inevitable inflationary cost pressures that we have seen around the world. Most of our products are manufactured in China. Labor costs continue to move up high double digits. We also saw rising commodity prices. This result reflects, I think, our ability to manage that situation well, to pass on some of these increases. But also to look creatively at ways in which we can make our products more cost efficient. Moving on to the next slide. Our adjusted EBITDA rose by nearly 50%. Of course, the mathematics mean that the net income moved up by an even higher percentage at 57%. The reported profit attributable to our equity holders was $87 million, which as I said a few moments ago, well exceeded the forecast we gave at the time of the global offering. Moving on to the next page. Just to refresh everyone's memories, the company used the IPO proceeds to repay the debt that we had in the business previously. At the end of the year, we had a net cash position of $126 million, and the earnings per share rose from $0.08 to $0.10 in 2011. It is our intention to make a first dividend payment later on this year in July if our shareholders approve. That will be $30 million equivalent to $0.02 a share. So, nice to beat our forecast, but also obviously nice as well to pay a first dividend. So a quick overview of the business. Why is the company doing so well? I think the first point to make is that the global travel market is very strong. Despite the ups and downs, particularly in the European economies last year, international tourist arrivals continue to increase at a robust rate. This year, I think we're expected to move beyond 1 billion people moving around. I have to say that in China particularly, and emerging markets, the newly enfranchised commercially middle classes are getting on their trains and planes and automobiles. Travel is the first thing that anybody who acquires a degree of a higher income or wealth wants to do, and our business is one which is well-placed to benefit from that development that's happening in every significant emerging economy. A great strength of Samsonite is that in the last three years we have significantly changed our product ranges to make sure that they are appropriate to the consumer taste in each of our key regions around the world. I think I've made this point before that what Americans like is strong, robust, rugged stuff, not quite so concerned about weight. The Europeans are very driven by style and lightness. Asia has a lot in common, in some respects, with European taste, but there are differences. Because the leather products that we sell in China are completely different from the leather products that we sell in Korea. Japanese suitcases, as I've said to you, tend to have locks and frames. Don't have that in most other countries of the world. So those are just a kind of a bit of an indicator of how important it is to tailor your products to local tastes and requirements. We have some fantastic products. At the end of the day, our business is about products. We've got some great brands, but if the products aren't right, we don't sell. We've had some superb innovative designs that we brought to the market. Lighter, stronger, and more maneuverable cases because as I've said before, four wheels are better than two wheels. The market is shifting quickly towards spinning luggage. Anybody who's pulled their luggage, I think I said at the time of the IPO, you should get out and buy yourself a new case and start pushing. Business and casual categories performed extremely well. Again, this is an area where Samsonite's market share is far less developed than suitcases. We're finding that our brands are very relevant to these products. We've got, as I said, some very interesting new concepts. The company has invested enormously in its brands worldwide. If you were traveling last year, across the world in any of the world's major airports, I think you could not have failed to see Samsonite in one form or another. It is this ability, I think, to keep our brands in front of people, especially when they are traveling, where they are most disposed to be thinking about cases and what they are carrying. That is really a major source of competitive advantage for our company. Of course, we said, and we are in the process of expanding the number of points of sale that we have worldwide. We have seen very strong growth in both brands. Samsonite, of course, remains the company's flagship brand, grew by a third. American Tourister, which I think has got enormous long-term potential in Asia, recorded 55% growth last year. That was primarily in China and India and some of the markets that we operate in Asia. I think we are building a new and valuable property in our company. American Tourister was acquired by what was then the Samsonite Corporation back in the early noughties. As sort of with a secondary brand in the States, we do a lot of business in Walmart, and some of the mass merchandisers. We are in the process of turning this, I think, into a second global brand for Samsonite, and that will be the source of much additional value creation in the future. Of course, the other brands are really the two brands that we operate in the Chilean market, where we are the leader, Saxoline and Xtrem. Moving on to the next slide, the pie charts really just tell the story in a slightly different way. You can see, as we are now no longer involved with the cost in Timberland, that Samsonite is almost 80% of our sales, but American Tourister has now grown to 16% of the business worldwide. I put on the next slide, just a few pictures to bring to life what we were selling. You can see in the top left-hand corner, the immensely successful Cosmolite case. I think this is the first product in the luggage market, which is almost a category on its own. It is one of those products where when people see it looks different. If you see it on a carousel, it looks different. When we advertised it, we could actually get people to come in and ask for it. One of the problems with luggage is that most people regard it as a sort of black box. If you just advertise black boxes, you can't always guarantee people will ask for your black box. This is far from being a black box. It is a very beautiful, unique sculptured product, has done very well. Underneath it is B-Lite, which has absolutely conquered the soft side market for luggage worldwide. True to form, Samsonite has a B-Lite in Europe, a B-Lite in Asia, and of course, we have a special American adaptation of this style, which is called Lift, and that has performed extremely well. A couple of our very successful American products. Moving across to Asia, you can see stylistically how things begin to change somewhat. On the far right, a couple of the very core and important American Tourister products. Meridian, you see on the bottom right, is a line that we sell absolute bucket loads of out of Walmart. It just gives you an idea of how broad the scope of our company is, and I think how effective it is at tailoring our products to different customers worldwide. This next slide just tells the regional story, and perhaps it's fairer to look at the bottom of the slide at the constant currency growth so that we don't get appreciation against the dollar slightly flattering the outcome. Those numbers tell, of course, a very impressive story. Our business in Asia has grown to $577 million, up 42%. Our European business, and here's an interesting point. I think I saw the share price gyrations back at the beginning of the autumn, which were driven, I think, largely by overstated fears of the Eurozone crisis somehow deeply affecting our business. The interesting thing to note, I think, is that our sales in Europe were up 20% last year. I'll show you in a moment that sales in Italy and Spain were actually up 12%. Of course, Portugal and Greece simply are not significant markets for our business. So a bit of an exaggerated response, I think, to every time the spreads on Italian bonds went up, our share price seemed to go down. Hope that won't happen in the future. Latin America, again, superb outcome. The two key markets for us are Chile and Mexico, the brightest economies, I think, on that continent. We also are beginning to get some traction in Brazil, and we have designs on the Brazilian market. We are looking to significantly enhance our presence in what is the world's fifth largest economy. So on the next slide, we just give you a picture of how the sales and revenue break down. I think, again, as we indicated at the time of the IPO, Asia would begin to form a larger and larger part of our company because of the relative growth rates across the regions. You can see in 2011, Asia was 37% of our sales and 40% of our EBITDA, and this trend will continue. Also, I think you can see that in the future we will see It's difficult to say, but it won't be very long, in my view, before over half the sales of our business are coming out of this region. On the next slide, I've tried to give you a good feel as to how we performed in a lot of the bigger geographies around the world. In an American economy, which has had a fairly trickiest year, I think, in 2011, our business was up by almost 30%, and that's a great credit to Tom and his team, really making sure that our 12 or so key customers have got the right products at the right value proposition. China and India and South Korea, fantastic story. Ramesh or any of you want to just comment a little bit on those markets? Yeah. As the numbers are evident, China, India, Korea, they all have grown very well. In reality, the story is almost the same what we talked about in IPO. It is all about geographical expansion into tier 3 and tier 4 cities. We are covering more number of cities both in India and China. Then we are covering more price points because we operate two different brands, Samsonite and American Tourister, which allows us to cover larger price spectrum. We are growing into other categories, which is beyond luggage, business, casual bags. They are all growing at almost The business category grew by over 100% over last year, and still we have a smaller market share there. As Tim spoke about it in the beginning itself, we are trying to optimize our product to every consumer needs. We are designing product to delight the consumer, not necessarily optimize our manufacturing processes. Now, that is also yielding us good, handsome results. On top of it, our marketing spend is much higher than the competition. All these thing put together is allowing us to continue to grow, at a rate which is much faster than the organic growth of the market. The market itself has grown last year about 12% and probably would continue to grow at that kind of a rate. But we believe we should be able to continue to grow at a rate even faster than the market. Good. Thank you very much. As I mentioned, Italy and Spain, two markets where you would think we would be quite significantly challenged. Sales up a pretty robust 12%. Germany, which of course is Europe's most important market, the company is now beginning to get some real traction. We are growing 30% last year. We got a very ambitious budget for this year, too. France, very interestingly, in France and Germany last year, GfK statistics, and these are the two markets where we get really detailed market analysis from GfK. The luggage market in these two countries together was up 19%. It just gives you an idea of how strong luggage is despite generally GDP growth of probably 2% or 3%. Of course, our share grew significantly, in the French market, and also the German market. Our share in the French market was almost wholly accounted for by the success of the Curv and Cosmolite product ranges. We invented virtually a new luggage category in the French market, and it has been a fantastic year. Japan, we have been slowly increasing our penetration of department stores, as I think I explained at the time of the IPO. Samsonite is a very old brand in Japan. Been around in Japan for a long time. We fell out with our distributor. The company stuttered for a couple of years, and we are now coming back very strongly. As I think Ramesh probably said at the time of the IPO, we have got an ambition to get this market to $100 million over the next two or three years, and that is eminently achievable because of the brand awareness in the marketplace. Chile, at the end, I mentioned had a very good year. On the next slide, we've just put in a range of markets in emerging economies, which numerically may not contribute hugely to the total sales of the business, but give you a feel, I think, for how good the long-term prospects of this company are because of its exposure to markets which necessarily will become much larger. You can see, Thailand, Indonesia, Turkey, Brazil, Malaysia, all making significant progress in those markets. I think I said, in Asia, I think Indonesia is going to be a very big part of our business in the future. Very big part indeed. Moving on to the next slide, I think we said that we would achieve strong growth with our travel products, which we did. Grew by almost a third, more than a third, in fact. But most importantly, we've delivered on what we said about the business and casual categories. Our business sales increased by 72%, most of it actually coming out of North America and Asia. Europe actually is in the process of completely reconfiguring its business product assortment, and we expect to achieve huge improvements in the next year. Casual, going extremely well for the business. Another interesting area is accessories. We brought back in-house a lot of licenses. We'd licensed companies out on accessories. We've now brought the responsibility for marketing and design in-house, and the business is really starting to kick up. I'm very excited by this category because I think there is a growing need for travel accessories linked to mobile computing, people traveling, all sorts of bits and pieces people want, and it puts a lot more items into people's hands with Samsonite actually on the branding. Just to give you a picture, a few products from different parts of the world, on the next slide. I hope they give you a flavor of what we're doing and how different products can vary from market to market. On the top left, you see some of our blingy products, which we sell in Where do we sell them? Japan. Japan. Thank you. In the bottom, in the middle, we've got some of our more sleek products, which I think are sold in Korea mainly, I would imagine. Yes. Yes. We have got products on the top right, which looks very much to me like an American product. There are lots of different sorts of things that we are selling in this category worldwide. We said that we would expand the points of sale, and the next slide just tells that story. It has to be said that a lot of those points of sale, which are new, are Target and JCPenney, where we had, in the case of Target, the first product placement that we have had for many years. This was the one sort of major customer in America that we were lacking. That has added a lot of new points of sale. I hope you can see, too, the company is growing fast in India and China. We actually have brought in a few more stores we acquired from our JV partner in Russia, so we now have more stores in Russia. Russia will probably be Europe and I think already is Europe's largest consumer market. The GDP is, despite the goings-on at the top of the country, the GDP is rising rapidly in Russia. It is a big population market, and it is a perfect market for Samsonite. Our brand is extremely well established there. We have got some more stores, and we opened stores in Turkey, Hungary, and Ireland. In Latin America, we are busy adding points of sale in those key markets, especially Brazil and Mexico. On the next slide, just a quick snapshot of some Samsonite shops. Singapore. A new store in SoHo in New York. This is one of the first full-price stores that we have opened in America for some time. I think Tom and the team feel that there is an opportunity for the company now to open some stores that are not just in factory outlet centers. So we think there is a full price proposition. This store has done extremely well, and we are looking for new sites. Next, very nice American Tourister store I saw not so very long ago in Beijing. Really, really attractive presentation of that brand. On the right, you see Samsonite RED in Korea. That is an initiative which Ramesh here and the team have really, I think, created almost a new business within a business. Started with some very stylish products in Korea, but we are now selling a lot of stuff in China. I think we have got very high hopes of what we can achieve here. Casual, younger-looking products, colorful, sleek, very well-designed. Again, it is a good example of how we can further develop our brand and its platform. Our next slide just sort of shows you how much money we spend on marketing. This is important for the reasons I was explaining earlier. We need to keep our brands in front of people. It is our comparative source of advantage, I think, in the marketplace. Nobody else in the luggage space is able to advertise like this. It is also the major area of discretionary spend. If the company ever does get under pressure, and we are not anticipating that, we have always got a bit of a cushion there that we can manage if necessary. Next pages just give you a flavor. I said you could not miss Samsonite and American Tourister, and I was not exaggerating. You really could not miss us. Top left, Penn Station domination. I think 217 spaces on Penn Station in New York, the busiest railway station, I think, on that continent. It was all Samsonite in November, and we will be doing the same again this year. On the bottom left, you see a visual from our extremely successful American Tourister campaign in China. Young people taking to the world. The one on the bottom right looks like a carousel in Brussels Airport to me, having been through Brussels Airport a lot. You can see on the bottom here, a good sort of range of stuff that we have done. I pick out the one at the bottom, the crash test dummy. Very powerful advertising of our Cosmolite product there. Moving on, next page, just get a flavor of some of the stuff that we have done in America. Emphasizing lightness. The Samsonite RED adverts on the left here. We are doing some, I think, very interesting new stuff around the RED concept. On the other hand, there is a slightly more in your face stuff that we do in the States around our business products. No need to be too subtle. On the bottom left on the next slide, those of you, and there are not many of you in this audience, I think. No, none of you, except possibly Tom, might remember the gorilla which we used a long time ago for American Tourister. The strongest advertising campaign in the company's history, the gorilla, has been reborn. We dug out the suit from the attic, and he is busy roaming around now and helping to sell American Tourister. In the middle there, you get a feeling again for the very sleek business products that we brought into the market in Asia. Very successful range called Confedo. I am not sure what this young lady in the sunglasses is doing on the right here. But advertising one of our ladies bags. That is another very interesting opportunity for our business, is to move into women's casual bags. We will never be a fashion brand at Samsonite, but we can do things that are very appropriate for the business woman. We have a couple of videos to show you, I hope. Cosmolite, the strongest and lightest Samsonite ever. Just the flavor of two very different commercials that we did last year. I would now like to hand over to Kyle to give you a bit of a rundown on the financial highlights. Kyle, yeah. Good morning, everyone. Good to see a lot of familiar faces out there. A lot of what I am going to walk you through is a bit of repeat of what Tim said, but I will point out my perspectives on the numbers. Again, our sales were up 34%. I like to think about the raw dollars, which is almost $400 million in sales growth. I find myself thinking about our next nearest competitor, and this is more than their total sales by a significant amount of money. So real significant growth in our business. As Tim said, the margins grew 30%, almost $200 million in gross margin growth. I think it is important also look at the gross margin rate. We had said we would run around 55% for the year. We ran very close to that at 54.7. There was a little bit of currency pressure right at the end of the year when we saw currencies like the Indian rupee move fairly rapidly, put a little bit of pressure. But overall, our motto of maintaining gross margins at 55% still holds very true, and our expectations for this year is actually margins will improve just a bit from that. From an adjusted EBITDA perspective, adjusted net income, I think everybody in the audience here really understands the adjustments that are needed. Real significant growth, $80 million in growth in EBITDA, and just about $50 million of growth in the adjusted net income. Equally important, and what I tend to look at, is the margins on the business. So EBITDA margin, and I will show you a slide in a second, has grown nicely year over year, so 14.4% to 15.8%. Again, our story here is this margin will grow. As we continue to deliver this revenue growth, you will see a good steady increase in our EBITDA margins. The same for net income margins approaching close to 9%, and that will continue to grow in the coming years. The next slide really is a slide I like to point out, which is what have we done over the last four halves, both in revenue growth and in EBITDA margin. You can see the steady trend here in revenue growth in dollars. You can see the growth rate starts to settle back down in the back half of the year like we said it would. We delivered 29% growth in the back half of the year. Again, over time, that growth will moderate, but it is doing exactly what we said it would do, and you will see a number for 2012 that will look very similar to what we said we were going to do. Then again, EBITDA dollar is growing at a nice clip, but EBITDA margin very steadily growing over the last four halves we have reported. I am very happy with those numbers. I am going to turn it to Ramesh real quick to walk you through Asia. Again, we report segments by region, so we will give you a little bit more color region by region in performance. Yep. Asia, as you see the numbers have grown very well at about 48.1% in terms of the net sales. EBITDA also has grown about 42.6%. Primarily, as I spoke before, the growth has been in both the brands, Samsonite as well as American Tourister, though the American Tourister has grown faster because that is a segment which we started to operate only for last three years. So that has grown about 77%. We believe that similar kind of growth would probably will get maintained over next couple of quarters. All channels are growing. So wholesale channel has grown by 44% and retail has grown by 37%. Within that, different categories, as we spoke before, the business has grown very well. It has grown by over 100%. It is almost doubled in 2011. I believe that is just the beginning. The travel category also have grown by 54.9%. So, on the whole, the business probably in all its aspect, that means both the brands and all the categories, they all have been growing at a very healthy clip. The adjusted EBITDA margin is slightly down. That is because of higher advertising spend, which is more or less in line with what we had also projected. So from 8.8% of the sales in 2010, we have spent about 10.1% because we see Asia, specifically India and China, as our growth market. So we have been spending a slightly higher amount of money in trying to develop our business. Thanks, Manu. Thank you. North America. We are starting to capitalize on what we are seeing as a slow but steady economic recovery. Tom, who is actually in the audience here, has clearly outperformed that in the overall market. The numbers came in close to 30% growth, almost $90 million in growth for the business from 2010 to 2011. Our adjusted EBITDA grew at a faster clip, 54% or $21 million. You can see the EBITDA margin for this business rapidly improving from 13% to 15.2%. I would say slightly ahead of our expectations. We are really delivering on leveraging the fixed cost in this business with revenue growth. It has been driven by all categories. The same store retail comps were 25%, and that is on the back of the prior year, which was north of 20% comps as well. The retail business continued to do very well. Our wholesale business also expanded 28% growth in wholesale, and a bit of comps, a bit of new doors, and all on the back of very good new product. Samsonite was up 36%, and Samsonite in the marketplace has been our big growth driver. American Tourister sold in Walmart and Kmart. That growth is up 12%. As we said in the IPO, Walmart had cut back on some of their space. We are starting to see some signs that is going to open up again. We are expecting the American Tourister brand to pick up some momentum in this market as well, with some very good, new terrific product we will show you at the end of the presentation. Travel category, which is really the driver of the marketplace and raw dollars, is up 26%. Tom had very good success on the business side. We have been telling you in the IPO and on the road show, that we are in the midst of developing terrific product with adjustable laptop sleeves. All of that has actually started to place at the back half of the year. That growth is up 76%, and I think we will see very good momentum in this category as we continue to get placement and roll into 2012. As I said on the EBITDA margins, this continues to be a very good story for the U.S. business. Europe delivered very strong growth, so Tim covered Europe a bit at the start. I think a lot of people are surprised when we talk about a 27% growth in the European market, particularly with the Eurozone crisis that kicked in really right after we listed the company. We went through region by region earlier, but it is really led by very strong performance in Germany, 30% up, France 26% up, and Italy and Spain. Italy here has adjusted Lacoste and Timberland. A lot of Lacoste and Timberland sales were happening in Italy. We are up 18% and just about 15% for Spain. We are seeing some impacts in that marketplace, but I would tell you it is very isolated to the countries you would expect. Portugal and Greece, which are small percentages of our business, we are seeing impact. As we roll into 2012, Italy and Spain become a bit more challenged. Those marketplaces are in a tough spot. But they represent a fairly small portion of our overall business and around a quarter of the sales for Europe. We still feel very confident when we talked about delivering good single-digit growth in the European market, and we are off to a good start in 2012. The growth was led with the travel category, 24% growth, really on the back of very terrific product, which you have seen, the Cosmolite and Cubelite, the Helite ranges. We have other derivatives of Helite now, and lots of new product introductions. I would tell you that story is going to continue in 2012, and we are going to show you some slides at the end here of some of the stuff we are very excited about. Business and casual, 32% growth. I would say in Europe, we are just starting to get some momentum here, so I expect this to pick up. It will take us a bit more time to get the right product assortment, but this will be the same story as you are seeing in the other regions in short order. Casual level tripled. Adjusting for Lacoste and Timberland and focusing on our core brands, we tripled the casual business. Again, off a small base, but really shows that the focus on these categories is delivering very good growth. EBITDA margin will look on a reported basis to be down slightly, but Lacoste and Timberland is a big impact there. If I adjust that out, the EBITDA margins for Europe went from 15% to a little over 17% year over year. The same story, leveraging fixed costs, delivering growth is working in Europe as well. In Latin America, we have covered Latin America, had a very good growth, 23%, constant currency, around 2018%. EBITDA margins improving, very similar story here, 13.6% to 15%. It is really driven by our big markets of Chile and Mexico, which continue to do amazing years. These are on the backs of a couple very good growth years. The story continues. We are just starting to make some very good traction in Brazil. Again, the base is small. We did around $8 million of sales in Brazil, but there is no reason why that market should not be significantly higher than that by multiples of as much as 10 times larger than that over time. We are really starting to get some traction there. Focus on business and casual, again in this market, similar strategy across all these markets, delivering almost 42% in business and 36% in the casual market. In the travel category, up around 13%. Adjusted EBITDA grew at a much faster clip here, 35%, and EBITDA margins improving 150 basis points. So, a terrific story for Latin America. If I move to the balance sheet, really there's three things to talk about on our balance sheet. One, the overarching is our balance sheet continues to be amazingly strong and really gives us a terrific platform to grow the business. We talked about IPO proceeds and some cash on hand to repay debt. So we're effectively a debt-free company today. We have a very small amount of debt in local facilities around the world, but it's $15 million. On a net cash basis, we're $126 million, and we're really starting to generate cash. We generated $100 million in net cash last year, and you'll see that rate increase as we move into 2012. So the business will generate terrific cash. Our working capital has improved dramatically as well. If you remember at the interim period, we were talking about working capital levels being a little bit inflated really on the back of inventories in Europe as the business was adjusting to the growth. We've brought that back down to where we want it. Actually, it's a little better than what my target is. Our target working capital efficiency is 14%. We're running at 12.5%. I'll show you in a second what makes it up on the next slide. If you look at efficiency, I've compared 2011 to 2010 here, year ends. You can see our working capital efficiency is actually degraded a little bit from 2010, but 2010 was a bit unusual because our accounts payable was very high. So you would have remembered in IPO, I was talking about high AP days. Those have actually settled into where they should be. So 110 days at the end of December 2011. We'll actually average out at around 100 days. So there's a little bit more adjustment to go there on trades payable. Inventory is the real story, 155 days going to 122 days by the end of the year. Our target's around 120 days. We're right in the zone for inventory. We feel very good with that. Our receivable days generally stay around 40 days. We were 44 last year, we're 40 this year. So a slight improvement on our receivable days. So overall, I'm very happy with our working capital, and we see a good trend going into this year. If I go to CapEx, we had said we'd spend around $40 million. We ended up spending around $37 million for 2011. The focus areas were first retail. We really focused on retail expansion in Asia, also in Europe, both in new stores and store refurbishments. But more importantly for last year, we doubled our production capacity for Curv equipment, for Curv product in Hungary. So we doubled the footprint of that plant, doubled the output of that plant. We spent around $7 million doing that last year, and you can see that in the product development. On a go-forward basis, we're going to spend around $40 million. Our budget for 2012 is $43 million. It actually starts to shift even heavier towards retail. So when you think about the mix, it'll really be focused on continuing that retail expansion story, a bit on product development, and additional research and tools we need to continue to develop product, and a lesser extent on information and other CapEx spend. Really growth driving CapEx still at a very low level and with an asset-light model here for this business. Just to recap on some share information. Probably most of you know this, but I thought it is helpful to recap. We have just over 1.4 billion shares outstanding. We have seen a fairly big ride in our share price since we have listed, and I have got a chart on the next page that we can gaze at in a second. From $9 at a low to as high as $17 today, nicely right before this. We are right around what we listed at just over $14 yesterday. I am hoping for big things today. You can help. You can help with that. We have had a big ride. As far as EPS growth, if you look at adjusted EPS, and this is without adjusting for Lacoste and Timberland, from a growth perspective, it is $0.10 a share, which is a bit ahead of what we thought we would do. And we are recommended, the board recommended a dividend or a distribution from our distributable reserves of $30 million in yesterday's meetings. We will bring that to a shareholder vote in June, and we would look to pay that dividend out right at the beginning of July. And that should be in line with everybody's expectations. Actually, I think it is a little bit higher than what we initially indicated. And we really set that at a level that we think we can build on every year. This is a business that will generate cash, and you should anticipate that we keep building the dividend level. Just a couple of recaps. CVC and RBS are still big shareholders. 29% for CVC, and RBS is just under 16%. If we go to the next page, just to conclude my section. I think our share prices follow the Hong Kong index fairly well, right? It is not a good story, but it is actually what has happened to us. When you follow the ups and downs, it is really just following the trends of the marketplace. And our real test will be as we break out and deliver these kind of results, a bit of ahead of expectations, showing the market. I think we had a little bit of work to do to show the market that we are going to deliver what we said we would, and I think we clearly have done that. I think we will start to depart from this hopefully. I will turn it back to Tim. All right. Thank you, Kyle. Thank you very much. Just to conclude, I thought it would be helpful if we just commented on how we see things this year and just the confirmation of our strategy. I think we indicated that we should be able to continue double-digit growth, strong double-digit growth in Asia, upper single-digit growth in the more mature economies. The guidance is out there. It is fairly well clustered. We see nothing, I think, in trading at the start of the year to make us want to change anything that we have said. I think you can take it that we are satisfied with the start to 2012, and we anticipate bringing in another very good year. That will be driven, I think, by growth in travel, tourism around the world. We will essentially continue the same strategy that we have operated for the last two or three years. The one thing I always say about a strategy is that it should be consistent and probably quite boring. Our strategy is indeed very consistent, and perhaps you might be bored to hear that it is the same all over again. More lightness, more durability, more fantastic products. More focus on developing the points of sale around the world. More investment in marketing. More push on the business and casual categories, where the company still has enormous market share opportunities. We think we will achieve another year of very strong organic growth in this company. We are also looking for acquisitions, and we have a very ambitious and shareholding management team who are keen to increase the value of this company and will stop at nothing to do so. We will be looking for ways of adding and strengthening our brand portfolio. I think for me personally, the most exciting aspect of our market is that whatever goes on economically in the world, I just see much more investment and spending going into people moving around on holiday and on business. Although the oil price is going up, and although some governments are trying to tax planes and all that, essentially the cost of travel is going down as low-cost budget airlines start to become a bigger and bigger part of aviation worldwide. People just want to travel. That for us is a big driver. Another interesting thought I would leave you with is that we talk to our department store customers around the world a lot. You might think that they make a lot of money out of luxury brands, which they do. But often the most productive and most profitable square footage in a department store is to be found on that fifth floor, and it is us guys. The reason it is us guys is that we actually have a very substantial sales value and volume, very steady demand, and our brands command a very attractive premium. So, I think that the way forward here is pretty exciting. But of course, we cannot achieve what we want to achieve without delivering fantastic products to our customers. We have a few on the next couple of pages. Ramesh, I do not know if you would like to just comment on a few of the new things in Asia. As Steve was saying, our business is all about products. Products are basically designed to delight the consumer. So our success is primarily dependent upon how well we can design the products and how well we can anticipate the changing consumer behavior. There are a few other products. The first one which you see is a product which has just gone in the market now in Japan. It has been designed specifically for Japan. It is extra light, it is extra maneuverable, so it has special kind of wheels. Instead of normal locks, because in Japan, more and more cards are becoming popular, so it does not have a key, it does not have a number. I was told that Japanese are not so good at remembering numbers. I do not know, right or wrong. So they like to have card locks. This has just gone to the market. It is an amazing success. Quite honestly, I did not believe that they cannot remember numbers so easily. So this is a bag which has been designed. You do not have to remember the numbers. It has a card lock. It has done very well. The next to that is another successful line which has just gone to the market now. It has been launched in China and in Hong Kong, called MV Plus. This again, has been redesigned to offer very lightweight but increased volume, because more and more airlines have the cages. You really check in with the bag where they ask you to put your cabin size in that. So within the same cabin size dimension of 115 centimeter, which the airlines insist on, this offers 33% higher volume because it has the wheels which have been sunk inside. So when the wheels roll in, they go inside. So they are really taking up way less space. It is more stout, so we are trying to maximize the volume which you can offer to the consumer and yet remain within the IATA guidelines of the thing. Then there is some other successful line which has gone to the market. This is a line which has been designed for younger population, basically in China, India, Indonesia, called Astron Lite. It is extremely lightweight bag. For a cabin size, it is 1.9 kilos. So it is the lightest on the market. We are also designing bags, which are again, as we spoke during the IPO days, that we see leather and high-end leather as a very attractive market. Few of the products you can see down there itself. It is called Montel Business Leather Collection. Doing extremely well in China. We actually do not have enough products on hand to sell. If we can somewhere source more product, probably we can sell more easily. Then you have some other products. It is called American Tourister Prismo. You see few of the bags there. American Tourister actually is a very interesting brand. To really understand the potential of American Tourister, we can look at the competitive landscape. In China, in India, Indonesia, there are many people who have been buying unbranded luggage and private labels and things like that. This offers a very compelling brand proposition, which offers great young products and gives you the quality which a consumer would expect from a company like Samsonite. It is a price-value equation. It really offers a very compelling proposition and doing extremely well. That is the reason why American Tourister continues to grow at over 100%. It almost starts to make up to almost 50% of our revenue pie in many of the countries, including India, China, Korea, Indonesia. Then there are some more detailed products down under you see it, which also you see some samples here. Just to show you the kind of regional differences. This is a very finely finished with leather trimmings and all that. People can see, my friend Tom can say it is too much of bling bling in it, but we Asians like bling bling. There is a Forma, which is a very lightweight bag. Lightweight is still very virtuous. It is all different products have been designed with the primary objective of catering to different consumer and delight the consumer the way the consumer would like a bag to be. Instead of trying that we try to optimize our business process and try to give them one recipe to everybody. I see some Indian faces. Indian food is different than Chinese food. Chinese food is different than Italian food. You try to really just reach out to the consumer in the taste and in the way they would like to appreciate something much more. That has been, let us say, our key guiding philosophy behind design of our new products. That is what has been also the reason why Samsonite has been so far so successful. Thank you. Thanks, Ramesh. On the next couple of pages, there is just a whole raft of stuff in Europe. I will not take you through each and every product, but the top left is the new Cosmolite version. If you like, new Curv product. All the indications are it is on the shelves in Europe and it is flying off. We cannot make enough at the moment. Spread of different products on the bottom right here, you see a completely new concept in soft luggage. It has got a very ceramic type, base material at the top and bottom of the case, hard, rugged, soft tent construction, so you can squeeze it into the overhead locker. Super light. Products on the next page. At one extreme, you see a very female product. We are starting, even though we are a slightly old male lot in Samsonite, we are starting to chase after young, non-male people. It should, I hope, start to excite some interest amongst our female colleagues. On the bottom, on the other hand, you see much more masculine products, quite Germanic, aimed at a certain competitor, beginning with R. Then we have a whole spread of interesting products that we brought through in America. In America, just because we sell to the same old guys, Macy's, JCPenney, and the people who are quite restrictive in some ways, doesn't mean to say that we have to produce boring, samey products. I think you get a feel from looking at these two pages how much color, how many ideas, and particularly noteworthy are the easy carts at the top right here, which you push. Very easy to get in and you can get to your stuff very easily. The case sits very easily. It's a very easy product literally to move around. I am sure a lot of our elderly consumers will be looking at this with excitement. On the bottom, you just see a whole range of new stuff. It is this variety and the tailoring of the customers to local consumers, which is making the big difference to our business. We are going to finish with a quick video, then we will open the floor to questions. There. So that's the new Cosmolite luggage. Doesn't come much more sexy than that. Thank you very much, I will be very happy to answer any questions. Okay. Erica, in front. Hi. Erica Poon working with UBS. Congrats on a set of good results. I have three questions. The first one is on the Q1 update. If management can share with us by key markets, the Q1 updates, in terms of sales or points of sales, whatever you can share. The second question is on cost. Can you share where we are in terms of the sourcing cost cycle? Are we expecting more moderation in the purchase cost in 2012? You can break it between first half and second half. That will be useful. Third question is on the payout ratio. It is 35% off of the reported profit, which is I think about 20% off of the adjusted profit. Going forward, without much of the funnies in 2012, which number should we target in terms of percentage? Thank you. Okay. I will answer all those? Yeah. Okay. Why not? Q1 update, I would say we will put out a Q1 revenue trading update at the end of April, which is probably the best time to give you some real data. But I would tell you, we are running slightly ahead of our expectations through Q1. If you think about overall analyst expectations, we are feeling pretty good on the consensus in the marketplace. We feel good with trading. I would tell you North America has started off with a big bang, so it is doing very well. Probably even surprising us just a bit. Asia is doing what we thought, and in Europe, it is actually a very good performance considering the macro environment there. Again, it is fairly isolated in Europe to countries like Italy and Spain, but the rest of Europe is doing quite well. Without being direct, I would tell you we are running where we thought we would when we did our plans for the year. From a cost perspective, I think the best way to think about it is in gross margin, and we think that we are going to maintain this margin level of around 55%. Our budgets have that number up slightly from what we did in 2011. I would say we are not seeing any pressures there. At a certain point, I think there is probably a little bit of upside in capacity. There is more capacity out in the marketplace. That gives us a little bit of an advantage. I say the one challenge spot that we have been adjusting for and we have been adjusting since the end of last year is some of the currency movements. Which, for currencies we have hedged, it is not an issue. For currencies where you historically don't hedge, we need to make some adjustments. Again, like in India, we're seeing some pressure with the Indian rupee. So there's a bit of currency noise, but we still feel very confident in the overall gross margin delivery. So nothing that's concerning to us there. I think first half, second half, it's fairly consistent. We're not expecting any sort of big swings between one half and the other. What was your third question? I'm sorry. The third question, when you say you make adjustments for currencies, what do you mean? Well, we'll be adjusting price, we'll be adjusting product costs. We'll be doing what we can to maintain those margins, right? If you remember, we have a lot of tools in our toolkit here to do this thing. So we'll re-engineer product. We will adjust price in areas where we can't hedge the currency. We're actually starting to think about hedging some currencies we haven't historically, I think a lot of companies haven't historically hedged because there's been unusual movements in currencies, so we're doing a little bit of work thinking about that. I have a question on payout ratio. Oh, yeah. Payout ratio. I think the right number to think about for this business is adjusted net income. We have gone out of our way to put it out there, which is really what Tim said, the sustainable income level for this business. So the adjustments are really just bringing us back to the right way to think about the core of this business. When we think about next year's growth, we will really be comparing against that adjusted net income, which is really the right measure for the business. And the good part is, as we move into 2012, adjustments start going away, right? There are not really adjustments. We are not overly excited about having adjustments in our numbers, but it is IPO-related costs. They are very obvious, is the way I tell investors and people that I meet. Those will all go away, and we will be back to a traditional kind of reporting. And so that is the way you should think about it. Joshua here. Good morning, management. Two questions. First is on the Curv products. Since starting walking the stores, we are starting to see more copycat competitive products. Could you comment a little bit on what you think of the technology and the competition, whether this product will, how faddish is this product? Second is on, it seems that, Tim, the rhetorics are getting a bit stronger on M&A. Could you talk a little bit about considering that Samsonite as a stock is actually trading at a fairly attractive valuation, how you make a deal accretive? Thanks. I think on the Curv products, we see some aesthetic copies, which if they're too close, we tend to chase down pretty hard. We have already stopped a couple of people, I think, from doing things that are absolutely blatant. There are one or two sort of composite material type products out there. But the technology by and large is inferior and it isn't material that's capable of being pressed into a single shell like ours, and therefore it has to be reinforced and all sorts of things. I don't see a significant technical competitor to Curv material out there. Certainly, nobody is making any inroads into the market shares that we have with the product. So not too concerned on that front, I think. In terms of M&A, well, from my perspective, we will probably look at some opportunities to carefully expand our portfolio of brands. I'm much more in favor, I think, of clever things than big things. This is a company that came to the market not so very long ago. I don't think it's probably appropriate for us necessarily to go out and take a huge risk with our company. That said, if a very attractive brand is available at what I feel and what we feel is a good price, then we won't hesitate to go after it. We have substantial borrowing capacity in the business should we need to use it. I could see no need for us to have any resort to shareholders in this kind of exercise. But you may be sure that, as I said, as management and significant shareholders in this business, we put value ahead of size, definitely. Okay. Perhaps we can go to the phones right now and see if we have anyone online. Yeah. We've got a question from Barbara Miller of the Federated Kaufmann Fund in the U.S. She asks, "By how much did pricing go up, if at all, in 2011? Are you expecting to raise prices in 2012? Is the mix of sales driving any material shift in AUR? Price increases varied across region. I would remind people that on an average kind of ticket price, our average has probably come down slightly year-over-year as American Tourister has grown at a faster clip. From a price increase perspective, I would say it's ranged anywhere from 5%-10% across markets, depending what we need to do. There'd been a little bit more price increase in Europe, a little less in the U.S., where it's a more sensitive market. In Asia, a bit of a mix. Again, Asia's growth has really been driven by a dual-brand strategy. From an average selling price, the mix has actually probably come down, but margins have been maintained. Okay. Another question. "Do you expect to achieve leverage on marketing spend in 2012, or will it remain stable as a percentage of sales? Where are the other biggest points of operating leverage? Yeah. Do you expect Asia operating margin to stabilize post the increased marketing spend in 2011? Yeah. Our marketing spend is on target for another 8% spend this year. That is pretty much where we said we would keep it and what we will aim to achieve. So we will grow marketing spend in line with the sales growth of the business. The real leverage in this business is on the fixed cost of the business. Again, we are going to maintain gross margins, probably see a slight increase in gross margins reality for this year. Advertising spend at 8%, and we will leverage a bit of the fixed cost, which is really kind of in the back office. If you remember, this business is largely a wholesale business still, so you get a good leverage on the fixed cost base of the business. We do not need to add much. The only place we are really adding in this business, in the background, is in product research and development. As we said, we would continue to devote resources to that. But those numbers are at a level that you do not really see it in an overall kind of margin or EBITDA margin mix for the business. Okay. We will take a couple more questions from the floor. Okay. Please. Hi. Aaron Rambeau from HSBC. Just one for Tim, following on your comment about being smart rather than big in terms of acquisitions. Does this rule out an acquisition on Tumi, or does the fact that they filed for a listing rule it out, or is there another reason you would not be looking at that name? Secondly, a question for Kyle. Gross margin was down 200 basis points last year, and you compensated for that with operating leverage. If gross margin is flat this year, should we be expecting 100, 200 bips of operating leverage at the EBITDA margin level? Then thirdly, back to Tim. I think you made the comment that the outlook for this year for the West was high single digit. Can you differentiate what you are expecting for North America versus what you are expecting for Europe? Thank you. Yeah. My comments about smart and big were not designed to rule in or rule out. To me, I understand that they have a track to an IPO. We are certainly not actively looking at this brand at the moment, and we just have to see how things develop. I got really not a lot to add on that particular subject. Question number two was? On EBITDA margins. We expect our EBITDA margins to grow, but not at that same clip. Some of the benefit you saw in 2011 versus 2010 was some continued benefit from SG&A initiatives that we are implementing at the back of 2009 that fed into 2010 a bit. You will see an EBITDA margin increase in the business, but it will be something less than 100 basis points, which is in line with what we set for expectations for people. The third question, Europe and America. I think we can definitely see Europe, from what I can judge at the moment, in the mid-single digits. From where we started in the States, I can see America doing high single digits and possibly better. But I must tell you that it is not always easy for us to project the year from the first quarter. We tend to have a fairly In terms of activity, the first quarter is not the biggest. The key quarters for us are the summer months. It is a bit in quarter 2, and then we have a very high usual summer season. July number is an important number for us. June number is an important number for us. Then we tend to have a bit of a kick up at the end of the year. From where I can see at the moment, as I said, sort of mid-single digits Europe and high, possibly better single digits in the States. The States is really roaring at the moment, and we just need to see a little bit more evidence of how sustained this is. Okay. We will take the last two questions. Yes, please. Can you talk about the competitive dynamics, especially in India and China, and especially in India, where you have a fairly large competitor? My second question is with regards to the two big shareholders, CVC and RBS. Would you have any insights in terms of what they would be thinking in terms of their stake in the company, especially on RBS? Sure. I will answer the second first, and then Ramesh will obviously discuss the India market. The answer is, I do not know. Although I know the guys at CVC very well, this is a subject which we simply do not discuss, and I think that is appropriate. The same with RBS. What they have said to me, and what I think they have said to people quite separately, is they do not see themselves as in a rush to exit. But they have not really said much more beyond that, to be honest. Ramesh, India market. Yeah. The competitive landscape in India and in China. In India, as you know that we operate two brands, Samsonite and American Tourister. In reality, Samsonite operates at a price bracket. If you look at it in Indian rupee terms or in USD terms, it's about $200-plus price segment. I am quoting the price always for the cabin size. In reality, in that space, there is no real competition in India because the competing brand, VIP, that we are talking about, is predominantly operating in a price bracket of INR 5,000 below, which is about $100 below price segment. But definitely in that price segment, we do engage with American Tourister. But over last couple of years, even American Tourister have slightly traded up. So American Tourister's predominant strength is lying between $100-$200 price point. And there it does start to enjoy a market leadership status. There is a price bracket where the competition is very large, which is $100 and below. We have last year or let's say the last quarter of 2010, we have launched a sub-brand of American Tourister called AT, which we spoke about it during our IPO days itself. It's a sub-brand of American Tourister called just AT. That is definitely competing with the key competition in India. And we are slowly gaining pace there because though we are still a smaller player there because those businesses are predominantly sitting in tier 3 and tier 4 and tier 5 cities, and we have just started to get into the segment. In China, I would say that as far as Samsonite is concerned, again, the price point where Samsonite operates in China is $250-plus kind of a price segment. It has a dominating position, though of late you can see there are some competition, Tumi, Rimowa and some of them are playing the role, but we are by far much larger because we have a very powerful distribution network. We are operating close to around 500 branded point of sale, which include shop-in-shop and premium department stores and independent stores. Whereas none of the competition is getting closer to that. American Tourister, by definition there, it's a far more fragmented competition which we can see in China. Yeah. There are quite few number of players which are there. We are gaining pace because we position ourself as a credible international brand. And many of you know China better than me. The growing middle class in China, they all aspire to acquire an international brand. So what we really offer in terms of American Tourister is a credible international brand, which does offer kind of a unique proposition to the consumer, and that is what is helping us to grow very rapidly in China. But for sure that is a price segment which is very fragmented and there are lot of competition there. Okay, one final question from Gary. Great. Thanks. It is Gary Pinge from Macquarie Securities. Thanks for the presentation. I think one part of your story, which probably is not very well understood and plays towards your valuation discount that you do see is the Japanese opportunity. I myself, we have tried to do some work on it to try and quantify the size of the market, what the opportunity truly is, where you have missed out given your distribution agreement and stuff. We cannot come up with a lot, unfortunately. I wanted to throw the floor open to you guys and say, can you give us a sense for size of the market, Ace Hardware, how many points of sale do they have relative to you guys? Just give us a feel for where this can be. Japan, as you must have seen our IPO document also, there was a market study which was done by Frost & Sullivan. The market size is estimated to be almost as big, if not bigger, than rest of Asia put together. That is the kind of a size of the market at the macroeconomic level. Samsonite has been present there for a long period. When I say long period, it is almost about 50, 60 years back. Just to give you a perspective, 8 years back, Samsonite business there was, because it was a distributor that we have, a licensing element that we had, the retail value of the business for him was $140 million because we have paid royalty based on that. The relationship was converted into a direct market by us, and somewhere we went wrong in terms of a strategy. That was about 8 years back. To be honest, what we went wrong in the strategy was that we tried to sell our products, which we are used to selling in rest of the world, in Japan. We withdrew all the products which were the Japan-specific product, which were sold by our licensee, and we started to try to sell them our European products. Definitely, Japan market is what it is. They look at products very differently. I had quoted a few of the examples. Even the luggage does not open the same way. They do not open it like hinge. We call this a hinge opening. They have a top opening, so their bags open like this, on the narrower side. I do not know why. Some people say because their houses are small, their luggage racks are small, whatever it is, but that is how they open it. Now, if you sell them luggage which is opening like the hinge thing, the first thing they figure it out, what is it? They cannot even open our bag in the stores. Because when people go in, they zip the bag, and they try to figure it out why we are on the wrong side. For them, we are on the wrong side. It is not that they are on the wrong side. Now, there are a few very obvious mistakes we made. Our wheels were too big. I remember, in some of our store when we were visiting there, people used to look at our wheels, and they were trying to play with our wheels. They could not understand why the wheels look like tractor wheels or something like that. They use very smaller wheels there. There were a few things which we went wrong in our product strategy, but then the market is very unforgiving. Once you go wrong with the product strategy, we almost practically killed our business. We went down to almost practically zero. Only about four years back when Tim came on board, we started to revisit our product strategy. We make our products specific to the market. To cut the story short, where do we stand now? We lost most of our point of sale, but we have been able to rebuild our business every year since last three years. We are adding close to around 50 point of sales every year. Today, as I speak to you, we are about 150 point of sales in Japan. As compared to us, ACE, which is the main competition there, has about 500 point of sales. Now, the challenge in Japan is there, the department store has a refurbishing cycle. When they go for refurbishing, that is the time when you can get a space there. The good thing about our business is there that today in every department store where we are already represent ourself, we are either number one brand in the hard side category or we are number two, but more likely number one. That means the brand was still very strong, and once we have corrected our product strategy, we are able to grow. That is the reason when you see our numbers, even last year when the Japan market actually have de-grown, we have grown by about 50%. It is just that we are covering up the space which we had lost previously. Do you want to mention Dumax? Yes. What we also did is that to accelerate this process, because the whole thing is about getting the point of sale back. It's not that department store doesn't like us. They know it that we have re-corrected our strategies, our product strategy. Our products are more specific. As I said, we realized that they don't remember numbers, so you need to have the card lock for them. To accelerate this point of sale, what we have done last year is that we bought a small brand called Dumax. It was a brand which went bust last year. It's a very small brand. We bought it basically to get the point of sale. Takashimaya is one of the big department store chain. They actually introduced us to Dumax. They said, "Those guys have 25 point of sales. If you buy them, their point of sale, we can allow you to convert into Samsonite." We took those point of sales, and we have converted them into Samsonite, and I believe that that could be another way we can grow our point of sale much more rapidly. I have no doubt. I mean, looking at it when we are internally reviewing our business, that in next couple of years, I don't know, maybe two years, I don't know whether I'm supposed to speak like that. But going back to 100 million-plus should not be a big challenge because the market is very big. Our brand is big. People have used our product for a very long time. We just have to get the point of sales back. Okay, great. Thank you very much, Tim, Ramesh, and Kyle, and thank you everyone for attending the results announcement. Thank you. Thank you.