Head’s net revenues rose by 6.7 percent to €98.4 million in the third quarter ended Sept. 30, boosted by winter sports. Currency effects also contributed to the increase.
The adjusted operating profit rose by 37.3 percent to €12.6 million, but the reported operating profit dropped by 22.6 percent to €12.4 million. The 2009 figure included a €7.6 million credit for sale of trademarks. Net income plunged to €9.0 million from €41.5 million, but this included a gain on the bond exchange in 2009. The gross profit margin grew by 2.2 percentage points to 42.2 percent.
By segment, the gross turnover in winter sports jumped by 16.1 percent to €58.5 million helped by higher volumes of skis and ski boots. The company thinks this winter’s sales in the category will be higher than last year’s. Diving was up by 10.0 percent to €11.1 million. However, racquet sports fell by 7.7 percent to €30.8 million, and licensing went down by 7.0 percent to €1.1 million.
Geographically, Austrian sales grew by 8.9 percent to €47.8 million, and Italy was up by 7.5 percent to €6.8 million. Revenues elsewhere in Europe fell by 4.5 percent to €13.6 million, and Asia dropped by 12.6 percent to €4.5 million. Turnover in North America increased by 13.7 percent to €25.7 million.
For the nine months through September, net revenues grew by 5.7 percent to €218.4 million. The adjusted operating profit turned around to €3.6 million compared with a loss of €2.5 million in 2009, while the net income was reversed: this year saw a loss of €913,000, against net income of €24.4 million last year.
In the first nine months of 2010, winter sports sales were up by 13.4 percent to €80.2 million, racquet sports grew by 2.7 percent to €103.2 million and diving increased by 2.6 percent to €37.8 million. Licensing revenues fell by 15.5 percent to €3.7 million.
Geographically for the nine-month period, revenues in Austria grew by 6.2 percent to €88.2 million; in Italy by 1.0 percent to €25.2 million; elsewhere in Europe by 1.4 percent to €29.4 million; in Asia by 4.1 percent to €10.0 million; and in North America by 9.2 percent to €65.6 million.
Separately, Head has announced an adjustment to its 2009 financial statements following a review of its accounts by the Netherlands Authority for the Financial Markets. The Dutch authority has recommended a restatement of the fair values of the senior secured notes and shares that were issued in connection with an exchange offer. Head points out that the restatement is purely a technical non-recurring revision for accounting purposes that has no implications for the company’s operating performance or its cash generation.
