Amsterdam - 10th November 2011 - Head NV (VSX: HEAD; U.S.
OTC: HEDYY.PK), a leading global manufacturer and marketer of
sports equipment, and HTM Sport GmbH, a subsidiary of Head
NV, announced the following results today.
Summary Unaudited Financiel Information
see attached pdf file
In Winter Sports, for the first nine months of 2011, sales
were 1.9% or €1.5m ahead of 2010 driven by earlier delivery
of snowboard and higher binding sales, offset in part by a
small decline in ski and boot sales.
Our Racquet Sports sales for the first nine months of 2011
were 3.1% or €3.1m behind 2010. The decline was primarily due
to the weakening of the US dollar against the Euro and lower
sales of tennis balls. The volume of racquets sold has
increased compared to 2010 and this allowed the division to
reverse the trend of the first two quarters and report a
growth of 0.8% in the third quarter.
While the diving market has been severely impacted by both
political turbulence in key dive destinations in North Africa
and natural disasters in Australia and Japan our division has
managed to achieve a slight growth in sales on a currency
neutral basis for the first nine months of 2011 compared to
2010. The unfavourable development of exchange rates has led
to an overall decline of 0.3% or €0.1m over the same
period.
Our newly introduced Sportswear Division generated sales of
€3.8m for the first nine months of 2011.
Overall, sales for the group for the first nine months of the
year declined by just 0.1% or €0.3m.
The adjusted operating profit for the nine month period
declined by €2.7m compared to prior year. This was mainly due
to a negative €1.5m impact of lower gross margins (41.4% in
2011 compared to 42.1% in 2010) as a result of higher raw
material prices and higher selling and marketing expenses of
€1.5m offset by general and administration expenses being
lower by €0.3m.
The reported operating profit for the nine month period
declined by €6.0m compared to the prior year. The further
decline of €3.2m compared to the adjusted operating profit
came from the accounting for our stock option plans. In 2010
we recorded a non-cash income of €3.3m for the plans,
compared to an income of €0.1m in 2011.
In both the three month period and the nine month period,
interest and other financial costs increased significantly.
This was due to the acceleration of the amortisation of the
non-cash disagio costs as a result of the buy back and
redemption of the Senior Secured Notes during 2011. Excluding
this non-cash disagio cost, interest and other financial
expenses would have decreased from €2.4m to €2.3m for the
three month period to September 2011 compared to 2010, and
increased just slightly from €7.0m to €7.1m for the nine
month period.
Overall the net loss for the nine months increased by €9.2m
in the nine months to September 2011 compared to the nine
months to September 2010.
Operating cashflow for the nine months to September 2011
compared to 2010 declined by €15.5m due predominantly to
movements in working capital of €12.9m and the lower
operating result.
During 2011 we have continued to work at producing excellent
products and marketing them effectively. We are delighted
with the performance of our athletes.
The Ski World Cup season has got off to a great start with
Lindsey Vonn winning the opening Giant Slalom womens race,
and Ted Ligety winning the opening Giant Slalom mens race. In
mens tennis we now have two of the top three players in the
world with Novak Djokovic ranked world number one, and Andy
Murray, ranked third and two of the top four womens players
with Victoria Azarenka and Maria Sharapova.
In addition during 2011, we have been restructuring our
financing and have redeemed our Senior Secured Notes and
replaced them with lower interest more flexible working
capital lines in Austria and the US.
The macro economic factors, however, have not improved and
raw material prices have been increasing at the same time as
consumers are spending more cautiously. We continue to
forecast a lower operating profit in 2011 than we achieved in
2010.
About Head
HEAD NV is a leading global manufacturer and marketer of
premium sports equipment.
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 (tennis, squash and racquetball
racquets, tennis balls, tennis footwear, badminton products,
alpine skis, ski bindings and ski boots, snowboards, bindings
and boots and sportswear), Penn (tennis and racquetball
balls), Tyrolia (ski bindings) and Mares (diving equipment)
brands.
For more information, please visit our website: www.head.com
Clare Vincent, Investor Relations
Tel: +44 207 499 7800
Fax: +44 207 491 7725
E mail: headinvestors@aol.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: the still possible impact of the 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:
HTM Senior Notes ISIN: XS0184717956 and XS0184719143
HTM Senior Secured Notes ISIN: XS0447202218 and
XS0447202309
Listing: Luxembourg Stock Exchange
Downloads (.pdf, 460.1 kb)
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