Samsonite International S.A. Announces Results for the Six Months Ended June 30, 2019

HONG KONG, Aug. 21, 2019 /PRNewswire/ -- Samsonite International S.A. ("Samsonite" or "the Company", together with its consolidated subsidiaries, "the Group"; SEHK stock code: 1910), the world's largest travel luggage company, today published its unaudited consolidated financial results for the six months ended June 30, 2019.

Overview
Commenting on the results, Mr. Kyle Gendreau, Chief Executive Officer, said, "We are encouraged by our progress in the first half of 2019 as we continued to execute on our strategy to reposition the business for long-term growth and profitability. At the same time, we remain focused on navigating the macro-economic headwinds impacting our performance in certain markets, including the United States ("U.S."), which was affected by increased tariffs on products sourced from China and lower foreign tourist traffic, China's business-to-business ("B2B") market, South Korea and Chile." 

Excluding those four markets, the Group continued to achieve steady growth in Europe and key Asian markets including Japan and India. For the six months ended June 30, 2019, the Group achieved constant currency net sales gains in all regions except North America (-5.7%¹): Asia (+0.2%¹; +4.6%¹ excluding B2B net sales in China and net sales in South Korea), Europe (+1.9%¹) and Latin America (+3.4%¹; +11.9%¹ excluding Chile). Overall, the Group's first half 2019 net sales decreased by 1.5%1 year-on-year against a strong first half in 2018. Excluding the four challenged markets, the Group's net sales grew by 3.5%¹ during the first six months of 2019.

During the second quarter of 2019, the Group's overall net sales performance began to show signs of stabilizing, with improved performance in China and Latin America, along with continued growth in Europe, Japan and India. Even though B2B sales in China remained slow and the Group has been managing down the mix of sales from this channel, net sales in China increased by 5.1%¹ year-on-year (or +11.2%¹ excluding B2B), up from the 8.3%¹ net sales decrease (+5.9%¹ excluding B2B) recorded during the first quarter of 2019. Latin America had a strong second quarter, with net sales growth of 12.5%¹ compared to a decrease of 2.8%¹ in the first quarter of 2019. Overall, the Group's net sales decreased by 0.7%¹ during the second quarter of 2019, an improvement compared to the 2.4%¹ decline recorded in the first quarter of 2019.

Mr. Gendreau remarked, "As we navigate the business through the current macro-economic headwinds, we are focused on managing our cost base to position Samsonite for future growth. The Group's profitability was adversely affected by the combination of lower net sales and increased distribution expenses related to the expansion in bricks-and-mortar retail during 2017 and 2018, particularly in Europe. We responded with focused actions to tighten expense and working capital controls in the second half of 2018, and accelerated these initiatives during the first half of 2019, including making leadership changes in both Europe and South Korea. We saw the benefits of these ongoing efforts to enhance margins begin to emerge in the second quarter of 2019, and are pushing to accelerate our repositioning of the business for sustained growth and improved profitability going forward."

The Group's Adjusted EBITDA^{2, 3} and Adjusted Net Income^2, 4 both showed signs of improvement. Second quarter 2019 Adjusted EBITDA decreased by 13.0% compared to the same period in 2018 (as recast to adjust for IFRS 16 impacts)², a considerable improvement following the 27.6%² year-on-year decline recorded in the first quarter of 2019. As a result, the Group's Adjusted EBITDA margin⁵ decreased by 150 basis points² to 13.9% for the second quarter in 2019 versus 15.4% for the same period in 2018², a significant improvement compared to the 300 basis points² decline recorded in the first quarter. The Group expects its profit enhancement initiatives will continue to yield benefits going into the second half of 2019 and into 2020. Overall, the Group's first half 2019 Adjusted EBITDA decreased by 19.4%^{2, 6} year-on-year, and its Adjusted EBITDA margin was 12.2% for the first half of 2019, a decline of 210 basis points^{2, 6} compared to the first half of 2018^{2, 6}."

For the six months ended June 30, 2019, the Group's Adjusted Net Income decreased by US$14.2 million^{2, 6} to US$97.0 million from US$111.2 million for the same period in 2018 (as recast to adjust for IFRS 16 impacts)^{2, 6}. This represents a decrease of 12.8%^{2, 6} year-on-year and an improvement compared to the 40.3%² year-on-year decline in Adjusted Net Income recorded for the first quarter of 2019.

The Group's disciplined approach to working capital management, cash flow generation and deleveraging the balance sheet has begun to deliver positive results. Cash generated from operating activities more than doubled to US$113.0 million⁷ in the first half of 2019, primarily driven by improved working capital management. Separately, cash used in investing activities in the first half of 2019 decreased by US$17.4 million year-on-year, driven by a US$15.1 million year-on-year decrease in capital expenditures mainly due to fewer new store openings.

As a result, net debt was US$1,432.8 million as of June 30, 2019⁸, US$155.6 million lower than the same date a year ago. With this improvement in the Group's net debt position, the Group's pro forma net leverage ratio⁹ was steady at 2.60:1:00 for the first half of 2019 compared to 2.57:1.00 for the same period in 2018, notwithstanding the decline in Adjusted EBITDA year-on-year. Separately, at June 30, 2019, the Group had US$624.3 million in liquidity available on its revolving credit facility.

Outlook and Strategy
Commenting on the outlook, Mr. Gendreau said, "The global outlook remains uncertain as we enter the second half of 2019, with U.S.-China trade tensions rising, Brexit still unresolved, economic growth slowing in parts of the European Union, the recent events in Hong Kong, and a general increase in political volatility and economic uncertainty impacting consumer sentiment worldwide. Considering these ongoing challenges, we will continue to invest in the business to position ourselves for long-term growth while maintaining our focus on controlling costs, managing working capital, generating cash and strengthening the balance sheet."

"We will continue to diversify our sourcing base and to renegotiate pricing with vendors to address the recent U.S. tariff increases. In addition, we intend to temporarily reduce advertising spend for the second half of 2019 to help offset the pressure on our profitability caused by current headwinds. We plan to execute this intended reduction in a targeted manner to ensure continued support for our growth initiatives, including the Tumi brand's further international expansion, our DTC e-commerce growth strategy and planned new product introductions."

In the first half of 2019, the Tumi brand continued to record solid net sales growth of 4.8%¹ in the first half of 2019, driven by sustained robust growth in Asia (+11.9%¹) and Europe (+20.4%¹). The Group will continue investing in expanding the brand's presence in international markets.

In the first half of 2019, the Group's DTC¹⁰ e-commerce net sales increased by 23.9%¹, excluding eBags which was affected by the Group's actions to improve profitability. The Group will continue to invest in its DTC e-commerce growth strategy and focus on improving the margins of the eBags business.

Exciting and innovative new products have always been a key driver of our business, and we will continue to make significant investments in product research and development as well as in marketing to drive our brands' success globally. The Samsonite brand, in particular, has a long and illustrious history as the industry leader in innovation. We launched a number of exciting new products this year already and have a strong new product pipeline planned for the remainder of the year.

Mr. Gendreau concluded, "We remain focused on executing our cost cutting and profit enhancing initiatives, including increasing our bricks-and-mortar retail profitability while continuing targeted retail expansion at a slower pace, maintaining tight control on non-advertising SG&A expenses, and continuing to improve net working capital efficiency by bringing inventory turnover days back in line with prior years. These initiatives have begun to positively impact our results in the first half of this year, and we expect they will position the business to deliver improved results going into the remainder of 2019 and into 2020."

Table 1: Key Financial Highlights

Table 1: Key Financial Highlights (continued)

The Group's performance for the six months ended June 30, 2019 is discussed in greater detail below.

Net Sales
Economic headwinds continued to impact certain of the Group's key markets during the first half of 2019, particularly the U.S., China's B2B market, South Korea and Chile. Excluding these four markets, the Group's net sales grew by 3.5%¹, driven by a 4.6%¹ increase in Asia (excluding B2B net sales in China and net sales in South Korea) and 1.9%¹ growth in Europe. Overall, the Group's net sales decreased by 1.5%¹ for the six months ended June 30, 2019. Unfavorable foreign currency conversion had a negative translation impact of approximately US$65.2 million, resulting in a 5.0% decrease in the Group's US Dollar reported net sales to US$1,755.7 million during the first half of 2019.

Net Sales Performance by Region
North America
During the first half of 2019, net sales in North America decreased by 5.7%¹ year-on-year to US$654.3 million, driven by a 5.6% decline in net sales in the U.S. This reduction was mainly attributable to a 7.3%¹ decrease in North American wholesale net sales as uncertainty about the timing and outcome of U.S.-China trade negotiations resulted in greater caution among U.S. retailers, leading them to more closely manage inventory levels and to shift the timing of wholesale orders. The Group's North American DTC net sales (which include net sales from both bricks-and-mortar retail and DTC e-commerce) were affected by ongoing efforts to phase out sales of certain lower margin third party brands on the Group's eBags e-commerce website to enhance profitability, as well as lower bricks-and-mortar retail sales due to reduced foreign tourist traffic into gateway markets in the U.S. excluding eBags, DTC net sales in North America were up slightly by 0.1%¹ year-on-year, with strong growth in DTC e-commerce (+20.6%¹) offsetting headwinds in bricks-and-mortar retail. Overall, the Group's North American DTC net sales decreased by 3.5%¹ during the first half of 2019.

Net sales of the Samsonite brand in North America decreased by 4.7%¹ year-on-year due to the decreases in wholesale and bricks-and-mortar retail net sales discussed above. Net sales of the Tumi brand in North America decreased by 2.9%¹ driven by the Group's successful efforts to identify and stop sales to trans-shippers who were selling Tumi products to unauthorized distributors in Asia and from reduced tourist traffic in U.S. gateway cities. Net sales of the American Tourister brand during the first half of 2019 increased by 2.5%¹ compared to the same period in 2018, which was a strong half for the brand with net sales growth of 12.0%¹ year-on-year.

Asia
In Asia, the Group continued to achieve healthy net sales gains in Japan (+4.8%¹), India (+9.2%¹) and China excluding B2B sales during the first half of 2019, which were largely offset by declines in B2B sales in China and continued weakness in South Korea. In China, B2B sales remained slow and the Group has also been managing down the mix of sales from this channel, resulting in an overall net sales decrease of 1.6%¹ during the first half of 2019 compared to the same period in the previous year. Excluding B2B orders for both periods, net sales in China increased by 8.7%¹ year-on-year driven by the Tumi brand. The Group continued to experience challenging market conditions in South Korea, where net sales decreased by 8.7%¹. Excluding net sales in South Korea and B2B sales in China, Asia recorded a net sales increase of 4.6%¹ during the first half of 2019. Overall, Asia recorded a net sales increase of 0.2%¹ to US$643.6 million for the six months ended June 30, 2019.

For the six months ended June 30, 2019, net sales of the Tumi brand increased by 11.9%¹ year-on-year due to the continued successful penetration of the brand throughout key markets in Asia. Net sales of the Samsonite brand decreased by 1.3%¹ year-on-year primarily due to challenging trading conditions in China and South Korea. Net sales of the American Tourister brand during the six months ended June 30, 2019 decreased by 3.0%¹ versus the first half of 2018 which had been particularly strong for the brand with net sales growth of 17.7%¹ year-on-year.

Europe
The Group recorded net sales growth of 1.9%¹ in Europe to US$371.3 million during the first half of 2019. Net sales gains in Germany (+6.8%¹), Russia (+21.4%¹) and Spain (+2.0%¹) were partially offset by declines in Italy (-4.0%¹) and the United Kingdom¹⁵ (-3.6%¹), where increased economic and political uncertainty impacted sales.

During the first half of 2019, net sales of the Tumi brand in Europe increased by 20.4%¹ compared to the same period in the previous year. Net sales of the Samsonite brand in Europe decreased by 2.2%¹ during the first half of 2019 compared to the same period in 2018. Net sales of the American Tourister brand increased by 3.0%¹ during the six months ended June 30, 2019 versus the first half of 2018, which was particularly strong for the brand with net sales growth of 49.5%¹ year-on-year.

Latin America
The Group's net sales in Latin America increased by 3.4%¹ for the six months ended June 30, 2019 compared to the same period in the prior year primarily due to increases in Mexico and Argentina. Net sales in Mexico increased by 4.7%¹ primarily attributable to increases in net sales of the Tumi brand resulting from the Group moving from a third party distributor model to direct distribution of the brand, as well as an increase in Xtrem brand net sales. Net sales in Argentina increased by 160.5%¹ due to the Argentinian government easing restrictions on imports, resulting in Argentinian consumers buying more products in their home country instead of traveling to neighboring countries like Chile. Net sales in Brazil increased by 5.3%^{1, 16}. These constant currency net sales gains were partially offset by a 7.5%¹ decrease in net sales in Chile due to a decrease in consumer traffic caused by Argentinian tourists purchasing more within their home country, along with weak domestic consumer sentiment.

Table 2: Net Sales by Region

Net Sales Performance by Brand
Samsonite
During the first half of 2019, net sales of the Samsonite brand decreased by 2.4%¹ year-on-year to US$792.6 million primarily due to economic headwinds in the U.S. and South Korea, as well as a reduction in B2B sales in China. Excluding these three markets, Samsonite brand net sales were down marginally by 0.3%¹ year-on-year. The Samsonite brand accounted for 45.1% of the Group's net sales in the first half of 2019 compared to 45.8% in the same period in 2018.

Tumi
The Tumi brand continued to achieve strong net sales growth in Asia (+11.9%¹), Europe (+20.4%¹) and Latin America (+178.2%¹). Net sales of Tumi in North America decreased by 2.9%¹ year-on-year driven by the Group's successful efforts to identify and stop sales to trans-shippers who were selling Tumi products to unauthorized distributors in Asia and from reduced tourist traffic gateway cities in the U.S. Overall, Tumi brand net sales grew by 4.8%¹ to US$363.4 million for the six months ended June 30, 2019. The Tumi brand accounted for 20.7% of the Group's net sales in the first half of 2019 compared to 19.1% in the same period in 2018.

American Tourister
The American Tourister brand recorded net sales of US$320.6 million in the first half of 2019, a decrease of 0.8%¹ year-on-year, with increases in Europe (+3.0%¹), North America (+2.5%¹) and Latin America (+2.3%¹) being offset by a decrease in Asia (-3.0%¹). This performance was mainly attributable to the strong sales of the brand in the first half of 2018, when the American Tourister brand recorded robust net sales growth of 24.2%¹, driven by the launch of a major global marketing campaign. The American Tourister brand's share of the Group's net sales in the first half of 2019 remained unchanged at 18.3% compared to the same period in 2018.

Speck, High Sierra and Gregory
During the first half of 2019, net sales of the Speck brand decreased by 10.6%¹ due to retailers managing inventory levels in anticipation of a new device launch. Net sales of the High Sierra brand decreased by 11.9%¹ year-on-year due to reduced replenishment orders and some shift in order timing by retailers in North America. Net sales of the Gregory brand increased by 22.1%¹ year-on-year driven by continued strong growth in Asia.

Table 3: Net Sales by Brand

Performance by Distribution Channel
The Group continued to grow its DTC distribution channel, focusing on DTC e-commerce while slowing the pace of its bricks-and-mortar retail expansion. The Group's DTC e-commerce net sales increased by 23.9%¹ during the first half of 2019, excluding eBags. Net sales through the eBags website in the U.S. were impacted by the Group's ongoing efforts to phase out sales of certain lower margin third party brands to drive profitability. Overall, the Group's DTC e-commerce net sales rose by 6.8%¹ year-on-year, contributing 9.6% of net sales for the six months ended June 30, 2019 versus 8.7% of net sales for the same period in 2018.

Net sales in the DTC retail channel grew by 3.3%¹ driven by the addition of 27 net new stores during the period, plus the contribution from the 84 net new company-operated retail stores added during 2018, partially offset by a 2.1% decrease in constant currency same store retail net sales¹⁹. This was due to constant currency same store net sales decreases of 5.3%, 0.2% and 0.2% in North America, Latin America and Europe, respectively, partly offset by a 0.8% constant currency same store net sales increase in Asia. Overall, net sales in the DTC distribution channel increased by 4.2%¹ year-on-year contributing US$624.8 million, or 35.6%, of the Group's net sales for the six months ended June 30, 2019 compared to 33.6% of net sales for the same period in 2018.

Net sales in the wholesale channel decreased by 4.4%¹ for the first half of 2019 compared to the same period in 2018, primarily due to sales decreases in North America, the China B2B market and South Korea.

Table 4: Net Sales by Distribution Channel

Gross Profit
The Group's gross profit margin decreased by 50 basis points to 56.0% for the first half of 2019 compared to 56.5% for the same period in the previous year due to additional U.S. tariffs on product sourced from China, sales mix, higher raw materials costs in Europe and increased sales promotions in certain markets. Gross profit decreased by US$60.7 million, or 5.8%, to US$983.0 million for the six months ended June 30, 2019. The Group will continue to diversify its sourcing base and to renegotiate pricing with vendors for the U.S. market to counter the recent U.S. tariff increases while maintaining high quality standards.

Operating Profit
Distribution expenses increased by 0.3% in the first half of 2019 compared to the first half of 2018. The increase in distribution expenses, along with the year-on-year decrease in net sales, resulted in distribution expenses as a percentage of the Group's net sales rising to 34.2% for the first half of 2019 from 32.4% during the same period in 2018.

Beginning in the second half of 2018, the Group slowed the pace of new store openings, particularly in Europe, to moderate the growth in distribution expenses, and continued to do so in the first half of 2019. The Group also performed a comprehensive review of its retail store portfolio during the second quarter of 2019, evaluating the closure of unprofitable stores where it saw limited future potential and where the Group will attempt to negotiate acceptable exit terms, while continuing to focus on enhancing profitability across the rest of its store network. In Europe, the Group added 13 net new stores in the first half of 2019 versus 28 in the first half of 2018, and reorganized the retail management team to enhance operational efficiency. On a consolidated basis, the Group added 27 net new company-operated retail stores during the first half of 2019, compared to the 84 added in 2018 (of which 52 were added during the first half of 2018 and 32 during the second half). The year-on-year increase in distribution expenses began to moderate as the pace of retail expansion slowed and profit improvement initiatives began to take effect.

The Group spent US$103.1 million on marketing during the six months ended June 30, 2019 compared to US$114.3 million for the same period in 2018, a decrease of 9.8%. As a percentage of net sales, marketing expenses decreased by 30 basis points to 5.9% for the first half of 2019 from 6.2% for the same period in 2018 (advertising spend in the first half of 2018 was higher due to the timing of the American Tourister global marketing campaign).

General and administrative expenses were down to 6.5% of net sales in the first half of 2019 from 6.7% of net sales in the first half of 2018, largely driven by a reduction in professional advisory fees related to the implementation of new accounting standards along with the Group maintaining tight control of its general and administrative costs.

For the six months ended June 30, 2019, the Group recognized a non-cash impairment charge totaling US$29.7 million²⁰ related to lease right-of-use assets²¹ and store fixed assets associated with unprofitable retail locations and the anticipated closure of some of these stores. The Group also recorded net other expenses of US$11.9 million for the first half of 2019, which included costs related to profit improvement initiatives totaling US$9.8 million.

For the six months ended June 30, 2019, the Group's operating profit decreased by US$44.7 million, or 21.5%, to US$163.6 million when excluding the aforementioned non-cash impairment charge and the costs to implement profit improvement initiatives during the six months ended June 30, 2019, compared to US$208.3 million for the same period in the previous year (as recast to adjust for IFRS 16 impacts)². The Group's operating profit, as reported, decreased by US$77.8 million, or 38.5%, year-on-year to US$124.0 million.

Net Finance Costs
Net finance costs decreased by US$43.1 million, or 46.2%, to US$50.1 million for the six months ended June 30, 2019 versus US$93.2 million for the same period in the previous year. For the six months ended June 30, 2018, net finance costs of US$93.2 million included a US$53.3 million write-off of deferred financing costs associated with the Group refinancing its debt. Excluding the non-cash deferred financing costs write-off, net finance costs were US$56.7 million for the first half of 2018 (as recast to adjust for IFRS 16 impacts)².

Profit Attributable to Equity Holders
The Group's profit attributable to the equity holders for the six months ended June 30, 2019 decreased by US$13.8 million, or 13.9%, to US$86.1 million when excluding the non-cash charge for the impairment of lease right-of-use assets and property, plant and equipment attributable to certain retail locations and the costs to implement profit improvement initiatives, net of the related tax impact during the six months ended June 30, 2019, compared to US$99.9 million for the six months ended June 30, 2018 (as recast to adjust for IFRS 16 impacts)² when excluding the non-cash charge of US$53.3 million and the related tax impact during the six months ended June 30, 2018 to write-off the deferred financing costs associated with the Group refinancing its debt. Profit attributable to the equity holders, as reported, decreased by US$18.7 million, or 27.5%, from the same period in the previous year to US$49.1 million.

Adjusted EBITDA and Adjusted Net Income
The Group's Adjusted EBITDA decreased by US$51.5 million, or 19.4%, to US$213.5 million for the six months ended June 30, 2019 compared to US$265.0 million for the same period in the previous year (as recast to adjust for IFRS 16 impacts)². Adjusted EBITDA margin was 12.2% for the six months ended June 30, 2019 compared to 14.3% for the six months ended June 30, 2018 (as recast to adjust for IFRS 16 impacts)². This decrease was primarily due to the decrease in net sales and the effect of investments in the DTC distribution channel, particularly in connection with bricks-and-mortar retail stores that were opened in 2017 and 2018. For the six months ended June 30, 2019, the Group's Adjusted EBITDA decreased by US$63.3 million, or 22.9%, to US$213.5 million and the Group's Adjusted EBITDA margin decreased by 280 basis points year-on-year to 12.2%.

The Group's Adjusted Net Income decreased by US$14.2 million, or 12.8%, to US$97.0 million for the six months ended June 30, 2019 from US$111.2 million for the six months ended June 30, 2018 (as recast to adjust for IFRS 16 impacts)² due to the factors discussed above. The Group's reported Adjusted Net Income decreased by US$22.7 million, or 19.0%, to US$97.0 million during the first half of 2019.

Cash Flow and Working Capital
The Group generated US$192.6 million of cash from operating activities during the six months ended June 30, 2019 compared to US$56.2 million for the first half of 2018. Excluding the impacts from IFRS 16, operating cash flow was US$113.0 million for the first half of 2019, reflecting a US$56.8 million increase from the first half of 2018, primarily driven by improved working capital management, coming from a US$52.9 million reduction in cash outflows from changes in inventories (from US$56.4 million in the first half of 2018 to US$3.5 million in the first half of 2019), and a US$22.2 million reduction in cash outflows from changes in trade and other payables (from US$41.4 million in the first half of 2018 to US$19.2 million in the first half of 2019). Separately, cash used in investing activities in the first half of 2019 decreased by US$17.4 million year-on-year, driven by a US$15.1 million year-on-year decrease in capital expenditures (from US$41.1 million in the first half of 2018 to US$26.0 million in the first half of 2019) mainly due to fewer new store openings.

The Group maintained its focus on improving its working capital. The Group's net working capital balances at June 30, 2019 were more or less consistent with the levels at June 30, 2018. Net working capital efficiency²² came in at 14.8% of net sales at June 30, 2019, 80 basis points higher than last year (14.0% at June 30, 2018) due to the decrease in net sales year-on-year. This was an improvement from March 31, 2019, when net working capital efficiency was 220 basis points higher year-on-year (16.7% at March 31, 2019 compared to 14.5% at March 31, 2018). The Group continues to focus on improving its net working capital efficiency and returning to target levels.

About Samsonite
Samsonite International S.A. ("Samsonite" or the "Company", together with its consolidated subsidiaries, "the Group"), is the world's largest travel luggage company, with a heritage dating back over 100 years. The Group is principally engaged in the design, manufacture, sourcing and distribution of luggage, business and computer bags, women's bags, outdoor and casual bags, travel accessories and slim protective cases for personal electronic devices throughout the world, primarily under the Samsonite®, Tumi®, American Tourister®, Speck®, High Sierra®, Gregory®, Lipault®, Kamiliant®, Hartmann® and eBags® brand names as well as other owned and licensed brand names. The Company's ordinary shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK").

For more information, please contact:
Samsonite International S.A. – Hong Kong Branch

Artemis Associates

United States – Joele Frank, Wilkinson Brimmer Katcher

United Kingdom – Newgate Communications

Non-IFRS Measures
The Company has presented certain non-IFRS measures in this press release because each of these measures provides additional information that management believes is useful in gaining a more complete understanding of the Group's operational performance and of the trends impacting its business to securities analysts, investors and other interested parties. These non-IFRS financial measures, as calculated herein, may not be comparable to similarly named measures used by other companies, and should not be considered comparable to IFRS measures. Non-IFRS measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, an analysis of the Group's financial results as reporte