HEAD NV and HTM Sport GmbH Announce the Audited Results for the Twelve Months Ended 31st December 2014 and the Filing of Head NV's Annual Report for the Year ended 31st December 2014.
Amsterdam - 12(th) March 2015 - Head NV (VSX: HEAD; U.S. OTC: HEDYY.PK), a leading global manufacturer and marketer of sports equipment, announced the following results today.
Net Revenues for the full year were up 4.7% compared to the prior year driven by growth in all the divisions. At constant currency, revenue growth would have been even stronger growing at 5.3% compared to the prior year.
For the year to 31(st) December 2014, Head's Winter Sports revenues grew by 2.9% (3.4% at constant currency) despite the second consecutive year of late snow. This growth was a consequence of higher volumes in skis and bindings and also a favorable product mix for skis and boots achieved as a result of the success of the race team and the excellent product offerings that have created brand momentum.
The Racquet Sports division reported an increase in revenues of 3.3% for the year (4.4% at constant currency). This growth has been achieved through an increase in the volume of both tennis racquets and Head branded tennis balls sold, a favorable product mix across the key categories and improved revenues for accessories.
Diving revenues increased by 9.2% for the year (9.3% at constant currency). This growth was due to the inclusion from the 1(st) of January 2014 of the newly acquired dive certification business (SSI) offset by lower equipment sales. The European dive markets remain tough but some growth was achieved in North America and Asia.
Sportswear revenues increased by 3.4% in 2014 (2.7% at constant currency) mainly due to improved sales of Winter Sports apparel offset by lower bag sales in the UK.
Licensing revenues increased 38.1% mainly due to better than expected sales.
Gross margin for the group also improved in the year by 2.5 percentage points mainly due to higher licensing revenues, lower cost of sales for our tennis ball business and a change in the mix in our diving business due to the new SSI business which, combined with improved revenues, gave rise to a gross profit for the year to 31(st) December 2014 of EUR161.1m compared to EUR144.9m in 2013.
The improvement in gross profit of EUR16.3m was offset by cost increases of EUR14.9m resulting in a net improvement in adjusted operating profit of EUR1.4m from EUR12.1m in the year to 31(st) December 2013 to EUR13.6m in 2014.
The cost increases were driven by EUR8.0m in selling and marketing due to higher advertising costs in our Racquet Sports and Winter Sports divisions and to the inclusion of the departmental selling costs of our new SSI business and the increase in departmental selling costs in the Winter Sports and Racquet Sports divisions.
General and administrative expenses also increased by EUR1.4m mainly due to the inclusion of the new SSI business.
Other operating expenses increased by EUR5.5m due to an increase in the provisions for litigation, higher costs in the diving division, foreign exchange losses and the non recurrence of the income of EUR0.9m recorded in 2013 due to the release of a provision in that year.
Interest and other finance expenses increased by EUR1.3m in 2014 compared to 2013 due to the higher debt levels in the Company.
Other non-operating expenses increased from an income of EUR0.2m to an expense of EUR2.2m mainly due to foreign exchange movements. Tax and interest income remained broadly flat in the year resulting in profit for the year ended 2014 down by EUR2.4m from EUR5.3m in 2013 to EUR2.8m in 2014.
Net cash used by operating activities for the year to 31(st) December 2014 amounted to EUR2.7m compared to EUR5.0m of net cash provided in 2013. The decline of EUR7.7m was due predominantly to higher working capital cash outflows for inventory during 2014 when compared to working capital cash outflows for inventory during 2013.
Net debt increased by EUR53.5m from 31(st) December 2013 to 31(st) December 2014 predominantly due to the share buy back that took place in the second and fourth quarters of 2014 (EUR31.5m) and the payments for the acquisitions in the period (EUR9.8m) in addition to the cash used in operations over the twelve month period.
For 2015 we believe that there maybe some impact of the late snow in the 2014/2015 season and the financial pressure on consumers continues, but we hope that these can be offset by the momentum that our brand has due to its product offering and the success of our athletes.
Head NV has filed its Annual Report for the Year ended 31(st) December 2014 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:
The Annual General Meeting of Shareholders of Head NV will be held on Tuesday, the 28(th) of April, 2015 at 2pm (local time) at the Sheraton Amsterdam Airport Hotel, Schiphol Boulevard 101, 1118 BG Amsterdam, The Netherlands. Details concerning the Annual General Meeting will be published on the 17(th) March 2015.
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") until 31(st) March 2015.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), Mares and SSI (diving) 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: email@example.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 until 31(st) March 2015
Bond:ISIN: CH0222437011 Market: SIX Swiss Exchange
The press release can also be downloaded from the following link:
Results 2014: http://hugin.info/133711/R/1902205/676268.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Head N.V. via Globenewswire
Prins Bernhardplein 200 Amsterdam The Netherlands
WKN: 577203 ;ISIN: NL0000238301;