Billabong reports full year results

Billabong International reported earnings Sunday evening for the year ended June 30 and gave a breakdown of results by region and provided information on how its retail portfolio performed.

 

Here is a summary of the results.

 

Company wide results

(Note: all dollar amounts listed here are Australian dollars)

 

Revenue: $1.55 billion, down 5% in constant currency.

 

Net loss after tax, including special items and charges: ($275.6 million)

 

Adjusted net profit after tax, excluding special items: $33.5 million, down 73.6% in constant currency

 

Gross margin: 47.7% vs. 53.8% the same period last year

 

Adjusted EBITDA: $120.6 million, down 39.4% in constant currency

 

Impacts of foreign currency swings: the appreciating Australian dollar negatively impacted revenue by $51.8 million, EBITDA by $5 million and Net Profit After Tax by $3.3 million

 

Working capital: 19.7 % of sales vs. 27.8% the same period last year

 

Net cash flow: up 224% to $78.9 million

 

Net debt: reduced to $160.9 million

 

Americas

Revenue: $750.3 million, down 8.1% in constant currency

 

EBITDA: $59.7 million, down 29.1% in constant currency

 

U.S. trends

 

The East Coast is performing better than the West Coast.

 

Hawaii has been hurt by fewer visits from Europeans.

 

RVCA was a standout performer.

 

Billabong Girls is the market leader.

 

Spring wholesale orders are positive.

 

Canada trends

 

This territory remains challenging in wholesale and retail.

 

West 49 and Amnesia recently launched online sites.

 

South America trends

 

The company has cleaned up distribution in Brazil.

 

Peru is showing good growth.

 

See Page 2 for information on Europe, Australia

 

 

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Europe

Revenue: $278.1 million, down 12.6% in constant currency

 

EBITDA: $24.2 million, down 52.2% in constant currency

 

The account base is contracting in Europe and winter prebooks were soft.

 

Technical products are more in demand than lifestyle products.

 

Element had a strong year in Europe, and Dakine’s outerwear was well received by retailers.

 

Southern Europe woes contributed to a decline in Billabong sales.

 

The company is managing overheads closely.

 

While Spring 2013 orders were lower, in season orders for the current fall season for Billabong brand are up.

 

Australasia

Revenue: $522.3 million, up 5% in constant currency

 

EBITDA: $33.8 million, down 45.4% in constant currency

 

Australia, New Zealand and South Africa were soft, while Asia sales grew modestly.

 

The company has consolidated the back end of its retail operations and is seeing benefits from those efforts. It is also testing a single banner for its multi-branded stores there.

 

The retail climate has stabilized somewhat in the past three months.

 

All brands except Billabong saw flat to higher summer orders.

 

 

See Page 3 for how Billabong retail stores and online sites performed

 

 

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Retail stores/online

Total stores at year-end: 634, and 160 of those are shop-in-shops.

 

Closed 58 stores during the year, with another 82 closures planned for FY 2013

 

Percent of total revenue from stores and online sales: 46%, up from 38% last year.

 

Stores in Americas: 225

 

Stores in Europe: 122

 

Stores in Australasia: 287

 

Same store sales by region

 

U.S.: up 1.4%

 

Canada: down 10.4%

 

Europe: down 1.9%

 

Australasia: down 3.7%

 

Online

Total online revenue rose 50%

 

Swell revenue rose 20% with total revenues now approximately $20 million

 

Surfstitch revenue rose 90% with total revenues now approximately $30 million

 

Transformation plan

The company announced several new initiatives to generate sales growth and save money. One highlight includes leveraging the Billabong brand and focusing on growing Element, RVCA and DaKine.

 

In four years, the company plans to return to positive sales growth and have EBITDA that is 2.5 x the most recent year’s adjusted EBITDA of $84 million

 

Fiscal 2013

The company expects EBITDA of $100 million to $110 million.