Billabong Presented by Josi Price, Kiri Linseth, Fun Wu, Emma Ma, Summer Lang

Introduction  History  Global Market  SWOT Analysis  Industry & Competitor Analysis  Financials  Recommendations  Conclusion

History Stagnant pool of water Billabong founded Burleigh,the heart of Australian surfing, 1973 Gordon Merchant Boardshorts, durable and well price get credits from famous surfers

1980’s Stable Australian market Global expansion First – North America large comsumptive groups Japan, South Africa and New Zealand got licenses New land — Europe More international surfers credits

1990’s  Professional surfing products  skate and snow  No.1 status in Australian waters

2000  August 11 th, Australia Stock Exchange  Billabong International Ltd ASX: BBG  Strong promotion in finance

After 2000  2004 Sunglasses brand—Von Zipper Element Skateboards brand Honolua Surf Company Kustom Footwear and Palmers Surf  2005 Beach culture airport-retail business

After 2000  2006 Nixon watches and accessories  Element Footwear range the California-based Beachworks retail business

Current  Clothing, accessories, eyewear, wetsuits and hardgoods  Youth culture (12-20 year-old)  Marketing, distribution, wholesale and retail  Special technique

Current  CEO – Derek O'Neill  1,750 employees worldwide  Gets licenses and distributions in more than 100 countries  About 8,000 stores around the world

Current  Slogan – “only a surfer knows the feeling”  Pushing all kinds of surfing

Global Business

Expand The Global Market — U.S. & Europe  Annexed Xcel Hawaii  Bought Nixon  Opened the flagship in Time Square

Expand The Global Market — Asia-Pacific & Africa  Set supply chain in China  Licensed business in South Africa

Other Instruments  Sponsor athletes and track events  Launch a pan-Europe digital sports channel  Distribution channels

SWOT Analysis  Strengths  Weaknesses  Opportunities  Threats

Strengths  Billabong Brand Name  Robust Revenue Growth  Strong Profitability

Weaknesses  Low Returns  High Dept-Equity Ratio  High Dependence to the Billabong Brand

Opportunities  Strategic Acquisitions  Positive Outlook for Sporting Goods  Growth in the Footwear Industry

Threats  Competition in Global Surf, Skate and other Apparel  Rising Costs of Raw Materials  Slowdown in Consumer Spending

Current Situation in Surf Industry North America, Europe, Australia  On the mature stage of the product life cycle  In US market, sales is close to one billion dollars in 2005 and  Asia, South America and Africa  Absence on surf culture  Huge potential market

Competition in Surf Industry  Barrier of entry  Production (design, quality, distribution channel, price)  Activities of the company

Competitor Analysis(1) Hurley:  Located in the United States  One of the biggest surf sport brands  Seperated from Billabong USA as a independent license in 1982  In 1998, Bob Hurley set up his own brand-Hurley  Was sold to Nike in 2002

Competitor Analysis(1) Hurley:  Different market segment  Concentrate on grassroots marketing  Unique company culture

Competitor Analysis(2) Quiksilver:  Located in Australia  Set up distribution center in the mid 1970’s  Was brought to Europe in 1984  Built a subsidiary brand -Roxy

Competitor Analysis (2) Quiksilver:  Based on the needs of consumers  A series of newly conception stores － “ boardrider ” and “ outlet ”.  Join in surfing activities and extreme sports

Competitor Analysis (3) Rip Curl:  Located in Australia  Founded in 1969  In 1974, sponsored the first Australian professional tour with Coca-Cola  $150 million of net income and 70% of products export abroad each year

Competitor Analysis (3) Rip Curl:  Reform products in design and needs.  Expand the international market actively and widely.

Billabong Key Numbers  Company Type: Public  Fiscal Year End: June  2006 Sales: $750.2 Million USD  1-Year Sales Growth: 15.7%  2006 Net Income: $106.3 Million USD  1-Year Net Income Growth: 11.3%  2006 Employees: 1,750

Billabong Financials  Billabong was originated out of Australia and bases its accounting practices in accordance to Australian Accounting Standards  Uses Australian dollars in all of its financial statements and all foreign currencies are translated into Australian  Australian currency is the company’s functional and presentational currency  Any gains or losses made between foreign currency exchanges are stated in the income statement

Translating Foreign Currencies Foreign currencies that are different from Australian dollars are translated to the functional currency. 3 Steps: Assets and liabilities for each balance sheet are translated using the closing rate at the date of the balance sheet. Income and expenses for each income statement are translated at average exchange rates. All resulting exchange differences are recognized as a separate component of equity.  The differences in exchanges from transactions are placed in to shareholder’s equity

Investment Classification  Billabong classifies its investments in to groups depending on the purpose of the investments  The 4 groups are: Financial Assets at Fair Value through Profit and Loss Loans and Receivables Held-to-Maturity Investments Available-for-Sale Financial Assets

Billabong Balance Sheet

Recommendations  Distribution channel  Make the products individuated  Make good use of the international human resource

Recommendations  Pay attention to Asia market (warm- up and create the needs)  Launch a series of new brand covered different market segment  Pursue other way to increase the brand recognition.  Improve Weak Management

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