HEAD Headlam Group Plc

HEAD NV and HTM Sport GmbH Announce the Audited Results for the Twelve Months Ended 31^st December 2013, the Filing of Head NV's Annual Report for the Year ended 31^st December 2013 and the details of the 2014 AGM.  

Amsterdam - 13^th March 2014 - Head NV (VSX: HEAD; U.S. OTC: HEDYY.PK), a leading global manufacturer and marketer of sports equipment, announced the following results today.

Summary Audited Financial Information
€'000				For the years ended Dec 31,
				2013		2012		%
						(restated*)
Income Statement
Gross Sales:
	Winter Sports			159,988		146,621		9.1%
	Racquet Sports			144,818		142,281		1.8%
	Diving			52,296		51,808		0.9%
	Sportswear			6,552		5,837		12.3%
	Licensing			5,179		5,778		-10.4%
	Sales Deductions			(10,167)		(9,112)		11.6%
Net Sales				358,667		343,214		4.5%
Adjusted Operating Profit				12,140		10,073
% of Net Sales				3.4%		2.9%
Adjustments:
	ESOP (non-cash)			(82)		101
Reported Operating Profit				12,058		10,174
% of Net Sales				3.4%		3.0%
Interest and Other Finance Expense (exc Disagio)				(4,962)		(5,785)
Non-Cash Disagio Costs				(149)		(99)
Interest and Investment Income				527		776
Other Non-Operating Income				228		134
Current Tax				(1,861)		(2,080)
Deferred Tax				(546)		(614)
Profit for the Year				5,296		2,506
Cash Flow
Net cash provided by operating activities				5,046		24,796
Purchase of property, plant and equipment				8,457		8,507
Balance Sheet
Cash and cash equivalents				78,318		41,153
Available for sale financial assets				5,010		5,011
Borrowings				136,653		99,734
Net Debt				53,325		53,570
Working Capital				134,630		130,598
Net Equity				173,396		171,286
* restated to take into account retrospective application of new IAS on accounting for employee benefits;
for full details, see Annual Report 2013

 

 

Sales for the full year ended up 4.5% compared to the prior year driven by growth in all the divisions except Licensing. At constant currency, sales growth would have been even stronger growing at 7.4% compared to the prior year.

As anticipated, the Winter Sports industry in 2013 showed some recovery after the declines it experienced as a result of the poor snow in the 2011/12 season and the clearing of excess inventory during the 2012/13 season. For the year to 31^st December 2013, Head's Winter Sports sales grew by 9.1% (13.4% at constant currency) due in part to industry growth but also as a result of the strong momentum of the brand, particularly in skis and boots, as a consequence of the success of the race team and the excellent product offerings. 

The Racquet Sports division reported an increase in sales of 1.8% for the year (4.1% at constant currency). This growth has been achieved through an increase in the volume of tennis balls sold, particularly in North America, coupled with an improvement in the mix of tennis racquets.

Whilst trading conditions continue to remain tough in Europe for Diving, the division managed a modest increase in sales of 0.9% (1.4% at constant currency) due to higher sales in North America and Asia.

Sportswear revenues increased by 12.3% in 2013 mainly due to improved sales of Winter Sports apparel.

Licensing revenues declined by €0.6m or 10.4% due to a combination of the loss of a contract, bringing sportswear in-house in the UK and some timing differences.

Gross margin for the group also improved in the year by 0.8 percentage points which, combined with improved sales, gave rise to a gross profit for the year to 31^st December 2013 of €144.9m compared to €135.9m in 2012.

The improvement in gross profit of nearly €9.0m was offset by cost increases of €6.9m resulting in a net improvement in adjusted operating profit of €2.1m from €10.1m in the year to 31^st December 2012 to €12.1m in 2013.

The cost increases were driven by €6.0m in selling and marketing due to higher advertising costs in our Racquet Sports division and higher departmental costs in both Racquet Sports and our Sportswear divisions. In addition, commissions and shipment costs increased due to the increase in sales.

General and administrative expenses also increased by €1.7m in business unit administration and warehousing. These additional costs were offset by an increase in other operating income of €0.8m due to the release of provisions created in prior years, to arrive at the overall cost increase in the year of €6.9m.

Interest and Other Finance Expenses decreased by €0.8m in 2013 compared to 2012 mainly due to lower interest expenses for our long-term financing. Tax, interest income and other non-operating items remained broadly flat in the year resulting in net income for the year ended 2013 up by €2.8m from €2.5m in 2012 to €5.3m in 2013.

Net cash provided by operating activities for the year to 31^st December 2013 amounted to €5.0m compared to €24.8m in 2012. The decline was due to adverse working capital movements. The higher Winter Sports sales during 2013 have resulted in higher year end receivables compared to the relatively low level of receivables at the end of 2012 when sales during that year where not as strong.

For 2014 we see continued financial pressure on consumers and negative impact from the warm winter in some parts of Europe offset by the success of our athletes.

Head NV has filed its Annual Report for the Year ended 31^st December 2013 with the Authority for Financial Markets in the Netherlands (AFM) and the Vienna Stock Exchange (VSE). Copies of the report are available on our website:
http://head.com/corporate/investors/annual_reports.php

 

The first quarter's results will be released on or around the 8^th of May 2014.

The Annual General Meeting of Shareholders of Head NV will be held on Tuesday, the 29^th of April, 2014 at 2pm (local time) at the Sheraton Amsterdam Airport Hotel, Schiphol Boulevard 101, 1118 BG Amsterdam, The Netherlands. Details concerning the agenda, the right to attend, and how to exercise rights at the Annual General Meeting are available on our website:
http://www.head.com/corporate/investors/agm_summary.php
The Annual General Meeting will not be open to members of the general public. 

About Head

HEAD NV is a leading global manufacturer and marketer of premium sports equipment and apparel.

HEAD NV's ordinary shares are listed on the Vienna Stock Exchange ("HEAD").

Our business is organized into five divisions: Winter Sports, Racquet Sports, Diving, Sportswear and Licensing. We sell products under the HEAD (alpine skis, ski bindings, ski boots, snowboard and protection products, tennis, racquetball, paddle and squash racquets, tennis balls and tennis footwear, sportswear and swimming products), Penn (tennis balls and racquetball balls), Tyrolia (ski bindings) and Mares (diving equipment) brands.

For more information, please visit our website: www.head.com

Analysts, investors, media and others seeking financial and general information, please contact:

Clare Vincent, Investor Relations
Tel: +44 207 499 7800
Fax: +44 207 491 7725
E-mail: Investor-Relations@head.com

Gunter Hagspiel, Chief Financial Officer
Tel: +43 5574 608
Fax: +43 5574 608 130
E-mail: g.hagspiel@head.com

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases, including references to assumptions, as they relate to Head NV, its management or third parties, identify forward-looking statements. Forward-Looking statements include statements regarding Head NV's business strategy, financial condition, results of operations, and market data, as well as any other statements that are not historical facts. These statements reflect beliefs of Head NV's management as well as assumptions made by its management and information currently available to Head NV. Although Head NV believes that these beliefs and assumptions are reasonable, the statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These Factors include, but are not limited to, the following: global economic turmoil, weather and other factors beyond our control, competitive pressures and trends in the sporting goods industry, our ability to implement our business strategy, our liquidity and capital expenditures, our ability to obtain financing, our ability to compete, including internationally, our ability to introduce new and innovative products, legal proceedings and regulatory matters, our ability to fund our future capital needs, and general economic conditions. These factors, risks and uncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to Head NV or persons acting on its behalf.

Head NV
Prins Bernhardplein 200,
1097 JB Amsterdam

Shares:
ISIN: NL0000238301
Stock Market: Official Market of the Vienna Stock Exchange

Notes:
ISIN: CH0222437011
Market: SIX Swiss Exchange

The press release can also be downloaded from the following link:

 

 

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