Billabong Posts 24% Fiscal 2007 Sales Growth

Sales revenue climbed 24.1% in constant currency terms (20.1% in reported terms) to A$1.2 billion ($943.1 mm), driven by strong growth in Europe and good growth in the Americas and Australasia. In constant currency terms, sales in the Americas grew 22.3%, Europe lifted 32.2% and Australasia was up 21.5%.

Group EBITDA of A$259.1 million ($203.6 mm) represents a 13.6% increase in constant currency terms (10.1% in reported terms), while EBITDA margins remained healthy at 21.2% in a year characterised by further geographic expansion.

Complementing the strong trading growth were benefits from various tax initiatives, both one off and recurring, with ongoing benefits expected to accrue to the Group as a result of changes to intra-Group royalty arrangements.

Derek O’Neill, Billabong International Limited’s CEO, said the results demonstrated the ongoing strength of the underlying business.

“Demand for the Group’s products grew strongly in all major territories, most notably Europe where there was also good EBITDA margin growth,” said Mr O’Neill.

“The Australasian region was up markedly in the second half and it was pleasing to see the returns from the Group’s recent investment into the Asian region. In the Americas, the Group recorded high double-digit sales growth in the USA and extremely strong growth in the smaller markets of South America and Canada.”

Mr O’Neill said the reported results were impacted by the appreciation of the Australian dollar against the U.S. dollar.

“Given the majority of the Group’s revenue and profit is earned in offshore markets, movements in currency tend to mask the underlying business performance,” he said.

“Pleasingly, the underlying business is performing strongly and, in the absence of any unforeseen exceptional circumstances, the outlook is for 15% EPS growth in constant currency terms in the 2007-08 financial year.”