Results in the Americas, including problems in the U.S., Canada and Brazil, hurt overall Billabong results for the full year ended June 30, the company said Thursday morning in Australia.
Europe has stabilized at a much smaller base, and the Asia Pacific region grew during the period.
CEO Neil Fiske, now on the job for 10 months, gave an update on the company’s turnaround efforts and initiatives during a conference call.
We listened to the call and have details, and also interviewed Neil after the call to ask more questions.
A lot of data was given, so we are breaking the story into several pieces. See links to our other stories at the bottom of this report.
Full Year Financial Results
Billabong no longer owns Dakine, West 49 and its portion of Nixon, and it incurred A$146.2 million in special charges from all the restructuring, major investor changes and takeover turmoil – all of which makes Billabong’s financial reporting more complicated than ever.
Here are the results broken down different ways
Including West 49, Dakine, Nixon
Total revenue: down 9% to A$1.2 billion
Excluding discontinued businesses
Total Revenue: A$1.1 billion, down 5% in constant currency
Including West 49, Dakine, Nixon and special charges
Net Loss After Tax: narrowed to A$233.7 million vs. a net loss of A$859.5 million.
EBITDA: a loss of A$52.3 million
Excluding discontinued businesses and special items
EBITDA: profit of A$52.5 million, down 30.6% in constant currency
Net Loss After tax: A$14.4 million.
Other numbers
Net debt decreased 64% to A$74.3 million.
Goss debt declined 31.5% to A$219.4 million.
Net interest increased to A$34.2 million from A$12.4 million.
Summary of turnaround progress
CEO Neil Fiske summarized the efforts and progress in the past year. (Our other stories have many details about most of these topics.) The company has:
- Strengthened the balance sheet, with major new investors in place
- Created a seven-point turnaround strategy
- Added a new global structure and executive team
- Reduced costs and simplified focus – overheads down A$22.6 million
- Sold West 49, and reached a pending deal to sell SurfStitch and Swell
- Simplified businesses in Asia, Peru and Chile
- Restructured Europe, South Africa and Brazil
- Closed 41 underperforming stores, ending the year with 424 stores
- Implemented a balance of “offense and defense”
- Early turnaround initiatives showing progress, Neil said
- Started major initiatives in supply chain, direct-to-consumer and merchant front-end processes
- Increased brand focus showing results
Fiscal 2015 outlook
Billabong declined to provide the market with specific revenue, EBITDA or net profit guidance.
Here’s how the company described 2015 trading conditions so far:
“Trading to date largely reflects the same themes as have been experienced throughout FY14.
“Australia and Europe continue to trade satisfactorily. In the Americas we continue to confront difficult conditions but our forward orders for Billabong and RVCA are ahead of last year and our comp store sales in the U.S., while still below last year, have improved relative to the most recent half.
“As we move through FY15, we are confident we will begin to see the impact of our turnaround strategy in the results but it is not possible at this time to quantify the extent of such impact.”
See our full report on Billabong’s Fiscal ’14 earnings
For much more detail about several topics, Executive Edition members can read these separate stories:
Comprehensive interview with CEO Neil Fiske
Details about problems in the Americas and plans to fix them, plus Americas numbers
The wholesale win back plan in the U.S.
Update on retail, e-commerce and omni-channel plans
Why Asia Pacific was a star performer in ’14
Major changes coming to supply chain, other backend operations
