Turnaround is accelerating and gaining traction
Surfersvillage Global Surf News, 28 August, 2014 - Billabong International Limited today announces its financial results to 30 June 2014. All figures quoted are in Australian otherwise stated.
• Including significant items and discontinued businesses, Net Loss after Tax for full-year to 30 June 2014 of $233.7 million compared to a loss of $859.5 million for the previous corresponding period (“pcp”). On the same basis, EBITDA was a loss of $52.3 million.
• Excluding significant items and discontinued businesses, EBITDA for the period was a profit of $52.5 million.
• On a pro forma basis, taking into account the anticipated sale of the SurfStitch and Swell businesses, the EBITDA result is a profit of $60.3 million (again excluding significant items and discontinued businesses).
• Leadership and global re-organisation in place. Early signs that growth in key brands in major markets is returning. Complex challenges remain.
Turnaround is accelerating and gaining traction across the business. Billabong CEO Neil Fiske said, “In the nine months since announcing our seven part turnaround strategy we have significantly stabilised, restructured and refocused the business. The Company has a far stronger balance sheet. We have put in place a new global organisational structure and executive team. We have begun to simplify the portfolio. We have taken, and continue to take, significant costs out of the business. The turnaround is gaining traction.
As said at the half year, we are at the early stages of a complex, difficult turnaround. The progress we have announced today will take time to fully flow through the business but I am pleased with the early indicators of success.”
Among those indicators was brand Billabong being on track for wholesale growth in the United States for the first time in several years based on FY15 forward orders. Billabong grew by 5% in the Asia-Pacific in the last six months.
“Billabong is our largest brand in our portfolio and the first to implement our global brand approach – so these trends are very encouraging,” said Mr Fiske.
Mr Fiske said the Asia-Pacific region was also seeing growth generally while European operations have stabilised. “Our biggest challenge and our greatest opportunity in the 12 months ahead is the Americas,” said Mr Fiske.
The region’s results were disproportionately weighed down by restructuring in Brazil and a weak Canadian action sports market. “The good news is that Billabong and RVCA, which represent close to two thirds of the region’s brand sales, are seeing signs of growth in the US wholesale market,” said Mr Fiske.