Apparel marketer Billabong achieves massive turnaround

28 Aug '15

3 min read

Aussie apparel marketer Billabong International Limited achieved a massive turnaround by reporting a net profit in the fiscal ending June 30, 2015 as against a steep loss in the previous fiscal.

Net profit after tax, including significant items and discontinued businesses for fiscal 2015 amounted to Au $4.2 million compared to a $233.7 million loss for the prior fiscal.

Excluding significant items and discontinued businesses, EBITDA for the reporting fiscal was Au $65.7 million up, 8.8 per cent year over year.

In the same period, Billabong's global revenue also climbed 2.6 per cent over the earlier fiscal to Au $1.05 billion.

Billabong brand sales grew 13.1 per cent in the US wholesale market on a constant currency basis, while RVCA sales also surged 12.6 percent globally over the last fiscal.

In fiscal 2015, the European operation posted EBITDA of $5.6 million, up $7.0 million on constant currency, while Element sales in its largest wholesale market rose by 5.6 per cent year on year.

However, EBITDA for Asia Pacific was down $4.1 million to $29.4 million on constant currency from a fiscal ago period impacted by retail and currency affecting input prices.

A press release from the Aussie clothing marketer informed that key projects to drive earnings improvement have progressed to implementation stage.

“Two years into our turnaround, Billabong is back to full-fiscal profit and back to doing what it does best, building great global brands,” said Billabong CEO Neil Fiske.

“Challenges remain, but this result confirms our confidence in the resilience of our brands and provides the conviction to see through the complex changes we're undertaking globally to deliver sustained profitable growth,” he too added.

According to Billabong, the Group returned to full-year EBITDA growth for the first time since 2008 with the first full-fiscal profit since 2011.

“For fiscal 2015, Billabong brand witnessed strong growth in the US wholesale market, with sales up 13.1 per cent and accelerating in the second half,” Fiske observed.

Friske stated that Element continues its growth in its largest market of Europe and the forward order book in the US indicates the brand is on the way back.

Performance in retail around the globe was mixed as it continued to refine the fleet in advance of its omnichannel rollout.

It is doing this through exiting underperforming stores, consolidating multi-brand banners and investing in new and refurbished mono-brand stores.”

Fiske also provided an update on four major turnaround projects; Omni-Channel, Concept to Customer, Sourcing & Supply Chain and Logistics & Distribution.

“Focused on better serving our brands these four projects are moving from planning to implementation and execution,” he noted.

“They are multi-phased global projects that will progressively drive earnings over the next several years and significantly improve the way, our customers interact with our brands,” Fiske remarked. (AR)

Fibre2Fashion News Desk – India

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