Billabong has announced its transformation strategy, which is expected to provide a clear pathway to unlocking the inherent value within the Billabong Group.
Over the next four years, the Transformation Strategy aims to return the group to positive sales growth and is targeted to deliver EBITDA greater than 2.5 times of the results reported in the 2012 financial year pro-forma EBITDA of $84.0 million, excluding 100 per cent of Nixon and significant and exceptional items.
Specifically, Billabong will achieve these objectives by focussing on the following key strategic priorities include: simplifying its business, leveraging brand Billabong, leveraging other key brands, realising the strategic potential of retail, continuing to expand Billabong’s global e-commerce platform and globalising and integrating the supply chain.
At the company’s 2012 financial year meeting, the surfwear retailer reported a net loss after tax of $275.6 million due to the $336.1 million costs incurred by significant and exceptional items and the net gain on sale of Nixon for $201.4 million, of which 99 per cent is non-cash.
However, on adjusted terms, NPAT was $33.5 million on reported global sales revenue of $1.55 billion. Revenue was down 7.9 per cent in reported Australian dollar (AUD) terms (down 5.0 per cent in constant currency terms) compared to the prior corresponding period, including online sales growth of approximately 50 per cent.
Meanwhile, adjusted EBITDA came in at $120.6 million, down 40.9 per cent in reported AUD terms and within the guidance range.
CEO Launa Inman said 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.”