Online sales zoom 50% at Billabong in FY'12

Full Year Results for the 12 months ended 30 June 2012

The Group incurred a net loss after tax of $275.6 million. As flagged in the half year results, significant and exceptional items have resulted in costs of $336.1 million, net of the gain on sale of Nixon of $201.4 million, of which 99% is non-cash.

Excluding the impact of significant and exceptional items Adjusted1 Net Profit After Tax (NPAT) was $33.5 million on reported global sales revenue of $1.55 billion. Revenue as down 7.9% in reported Australian dollar (AUD) terms (down 5.0% in constant currency terms) compared to the prior corresponding period (pcp), including online sales growth of approximately 50%.

CEO Launa Inman said: “At an underlying trading level, the Group remains profitable. As previously flagged to the market, the Group’s results have been adversely impacted by various significant and exceptional items.

In recording the various significant and exceptional costs and charges, the Group has endeavoured to adopt a conservative position. The Group is well on track in implementing the initiatives outlined in the previously announced Strategic Capital Structure Review and will continue to implement a number of new strategic initiatives announced today as part of Billabong’s Transformation Strategy. These initiatives will target both cost savings and revenue growth.”

Adjusted Earnings Before Interest, Tax, Depreciation, Amortisation and Impairment (EBITDA) of $120.6 million was down 40.9% in reported AUD terms (39.4% in constant currency terms) and within the guidance range.

The continued appreciation of the AUD against the Group’s operating currencies, in particular the Euro and USD, adversely affected reported consolidated results, specifically by $51.8 million in respect of sales revenue, $5.0 million in respect of EBITDA and $3.3 million in respect of NPAT.

While the Group’s profit and loss results have been adversely impacted by the abovementioned significant and exceptional items, the Group is pleased to report a significant reduction in working capital, both in dollar terms as well as a percentage of sales. In addition, the Group has achieved a strong improvement in cash flow from operating activities and a reduction in net debt, primarily from proceeds received from the partial sale of Nixon and equity capital raising in June.

Specifically:

- Working capital as reported reduced:

• 39.7% to $284.1 million from $471.2 million in the pcp; and
• to 19.7% of sales from 27.8% in the pcp.

- Net cash flow from operating activities increased by 224.2% to $78.9 million, from

$24.3 million in the pcp.

- Net debt reduced to $160.9 million or $94.2 million when adjusting for the net proceeds of the retail entitlement offer2.