Billabong International: Detailed Capital Market Analysis Report

This report provides a detailed capital market analysis of Billabong International Limited, covering aspects such as company overview, services, production, and location. It delves into the management structure, industry analysis focusing on the Consumer Durables & Apparel sector in Australia, and market analysis including market capitalization and segmentation. The report also examines share and dividend overview, earnings per share, share price history, and outstanding loans. A financial analysis is conducted using balance sheets, profit and loss statements, and business ratios. The report concludes with recommendations for improving the company's performance, considering its competitive landscape and strategic alliances. Desklib offers similar solved assignments for students.

Running Head: Capital markets
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Project Report: Capital Market

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Executive summary:
In the report, billabong international limited has been taken into the concern and the
company analysis process has been done on the company to analyze the position of the
company. The analysis has been done on the company to identify the security position of the
company through collecting the information about the profile, services, products and the
profitability position of the company. The company’s locations, mission statement goals
product and service overview and other services of the company has been evaluated firstly to
know about the company. Further, the management, industry and market of the company
have been evaluated and lastly, the financial statement and stock price of the company has
been identified to analyze the performance of the company.

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Contents
Introduction.......................................................................................................................4
Company Summary..........................................................................................................4
Company overview.......................................................................................................4
Company services.........................................................................................................4
Services description......................................................................................................5
Production overview.....................................................................................................5
Company location and facilities...................................................................................5
Management summary......................................................................................................6
Organizational structure................................................................................................6
Management team.........................................................................................................6
Industry analysis...............................................................................................................7
Market sector................................................................................................................7
Competitors...................................................................................................................8
Strategic alliances.........................................................................................................8
Market analysis.................................................................................................................9
Market capitalization..................................................................................................10
Market segmentation..................................................................................................11
Share and dividend overview..........................................................................................13
Earnings per share.......................................................................................................13
Share price..................................................................................................................14
Share price history......................................................................................................14
Share outstanding........................................................................................................15
Debenture and other outstanding loan........................................................................15
Financial analysis............................................................................................................16

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Balance sheet..............................................................................................................16
Profit and loss statement.............................................................................................17
Business ratios............................................................................................................18
Conclusion and recommendation...................................................................................20
References.......................................................................................................................21
Appendix.........................................................................................................................24

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Introduction:
Evaluation and analysis of an organization is a procedure which is carried out by
the managers of the company or the investors to identify the security position of the company
through collecting the information about the profile, services, products and the profitability
position of the company. An analysis of the company incorporates the general information
about the organization like the goals, values and mission report of the company. At the time
of evaluating the business, various levels and factors of the company are required to be
analyzed.
Company Summary:
Billabong international limited is a multinational company which has diversified its
market into apparel as well as sporting goods. The company is offering the services into UK
market as well. The company is engaged in the activities of marketing, wholesale,
distribution apparel and retailing of apparel, accessories, wetsuit, eyewear and various other
products in the sector of board sports in America, Asia pacific, Europe and United Kingdom.
Company overview:
The company is a surf company which primarily a clothing retail store. The company
has been started in 1973 in Gold Coast, Australia. The current headquarter of the company is
in Queensland, Australia. Key people of the company are Neil Fiske, Chief Executive, and Dr
Ian Pollard, chairman of the company. The company has traded in Australian stock exchange;
the first trade was done on 11th august 2000 (Bloomberg, 2018).
Company services:
The Billabong international plc has been founded in 1973 to offer various apparel
products and the accessories to the customer. Mainly, the company is a product offering
company, though, it is offering online services and the other services such as customer
relationship etc are also provided by the company to its customers.
Services description:
The company is offering its services and the products into various countries. The main
focus of the company is on its products only. Though, the delivery of services of the company
is quite better. Annual report (2017) of the company express that the services of the company

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is competitive in the market. Best customer management services are provided by the
company.
Production overview:
Reuters (2018) described that the main products of the company are apparel,
accessories, wetsuit, eyewear and various other goods in the board sports sector in America,
Asia pacific, Europe and United Kingdom. The company has diverse its industry from
apparel to sports products. The product range of the company is quite higher and it helps the
company to manage the performance in the market. The current production of the company
has been lower due to less demand in the market which leads to the huge loss to the company.
Company location and facilities:
The company has been started in 1973 in Gold Coast, Australia. The current
headquarter of the company is in Queensland, Australia. Key people of the company are Neil
Fiske, Chief Executive, and Dr Ian Pollard, chairman of the company. The company is
engaged in activities of marketing, wholesale, apparel distribution and apparel retailing,
accessories, wetsuit, eyewear and various other goods in the board sports sector in America,
Asia pacific, Europe and United Kingdom.
The study on the history, mission, objectives, goals etc of the company explains that the
company is using better strategies to manage the performance and the position in the market.
The current position of the business has been analyzed and it has been identified that the
slight business and activities have diversified its market into new sector as well other
countries to manage the performance. The current position of the company expresses about
the better position of the market. It explains that the few more changes into the products and
the diversification strategy and plan of the company would positively effect on the
company’s performance and it would lead to the company to improved performance of the
company.
Management summary:
Billabong international limited has been analyzed and it has been identified that the
company’s management is high quality professionals. The management of the company has
helped the company to achieve the high growth in the market. The departmental strategy and
management of the company explains about the better position of the company.

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Organizational structure:
Billabong international limited was initially a private company which has been created
in 1973. However, company has been register into the Australian stock exchange due to its
popularity in the market in the year of 2000. Though, the recent events of the company and
the industry have extremely affected the position of the company. The drastic changes have
occurred into rhea stock price of the organization. However, the company’s annual report
explains that slowly they are recovering the growth and they would be back on the track soon
(Statista, 2018). However, these drastic changes have affected the popularity of the business
and the performance of the business.
The organizational structure of the organization briefs about few changes into the
management structure and the people to maintain the position of the company again.
Company have taken various decisions about the management structure and the process of
the company so that the position and the popularity of the company could be maintained
again (Brigham and Houston, 2012).
Management team:
Management team of the company consist directors of the company and the
chairperson. The management team of the company has been identified to evaluate the person
who are running the business and making the strategies of the business. Following is the list
of the management team of the company:
Neil Fiske Managing director (MD) and
CEO (chief executive officer)
Paul Burdekin General manger, Asia pacific
Jim Howell CFO
Kevin Meehan Global general manager
Peter Myers Chief financial officer
Shannan North Global president
Jean- Louis Rodrigues General manager, Europe

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(Annual report, 2018)
The above people are the executive directors of the company which has been hired by
the company to make internal decisions of the company and maintain the performance of the
company. The study has been performed on the company to evaluate the information related
to the company so that a better analysis report could be prepared.
The study over the management process and the management team explains that the
company has faced few issues in last few years and thus it has made the change in the
management process and the management people of the business. The current management
team of the company help enough experience and qualified person who would manage the
entire activities and the process of the company in a well manner ((Brigham and Ehrhardt,
2013). However, the management position of the business expresses about the current better
position of the business. It explains that these changes into the management process and
management team of the company would offer huge return to the company.
Industry analysis:
Billabong international limited is the part of Consumer Durables & Apparel industry in
Australia. The study explains that the company is retailing the apparel and sports product into
the market of Australia and other countries. Though, the home country of the company is
Australia (Lee and Yue, 2017). The industry of Australia explains that around 250 global
companies are operating in the Australian industry. The Consumer Durables & Apparel
industry share has been enhanced in 2018 and the prediction of the industry explains that the
performance of the industry would be much better in near future (Statista, 2018).
Market sector:
Bloomberg (2018) explained that market share of the business in the industry is very
lesser. The current scenario briefs that the industry’s position is not good and it impacts the
financial position of the company hugely. The economical and financial position of the
industry has also been analyzed and it has been identified that the industry’s position is quite
better and thus few positive changes have also occurred into the company’s performance but
the micro challenges of the business has made huge impact on the performance of the
company (Ownership structure, 2018).

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Competitors:
Next plc is the main competitor of the company. Next plc is a British company
which is offering its products and the services into international market, the company is
offering huge competition to the Billabong international limited. The company has been
founded in 1864 at London. And it is a public limited company which is registered at London
stock exchange (Brigham and Daves, 2012). The company has around 700 stores at the
worldwide.
The market capitalization of the company has been identified to identify the
presentation and the market share of the business and it has been analyzed that the company’s
financial performance has been enhanced in last few year. though the market share of the
company, it has been found that the market capitalization of the company was $ 2,86,300
thousand in the year of 2013, $ 3,22,000 thousand in 2014, 3,11,800 in 2016, $ 5,10,500 in
2016 and $ 4,82,600 in the year of 2017 of the business (Horngren, 2009).
It explains that the market capitalization of the business has been enhanced
continuously and it has impacted on the company’s performance positively. The financial
performance and the situation of the business have made it easier for the company to attract
more investors towards the company (Morningstar, 2018). The market capitalization of next
plc has been compared with the billabong plc and it has been found that the performance and
the position of Billabong are quite lower than the Net plc.
Strategic alliances:
For the purpose of company analysis and the position f the company in the industry,
strategic alliance of the company has been evaluated. Strategic alliance is an agreement
between 2 parties or more than to [arties to pursue a set of objectives and the gaols which are
required to complete to reach over a level. a strategies alliance is usually a corporate
relationship, partnership o entity. strategic alliance explains about the collaboration among
two or more companies to reach over a common goal.
In case of billabong international plc, it has been evaluated that and it has been
recognized that the Billabong international plc is a public limited company and the company
has not alliance with any other firm (Hillier, Grinblatt and Titman, 2011). The company has
entered into the new market without any tie up and currently, it is operating and performing
its operations and the services into various countries of Asia pacific, Europe etc.

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Though, it has been evaluated that currently the company is required to set a strategic
alliance with major actualized companies to manage the performance of the company and to
be more popular again. The performance of the company has been affected at a lot and thus it
became important for the company to manage the performance and profitability level again.
The study of market sector analysis explains that the company is using better strategies
to manage the performance and the position in the market. The product and the services of
the company have been evaluated and it has been identified that the slight alterations have
occurred into the total performance of the company (Gourevitch et al, 2016). Though, the
market position of the company expresses about the company’s enhanced performance. It
briefs that the few more changes into the marketing strategy and plan of the company would
positively effect on the performance of the company and it would lead to the company to
better performance of the company.
Market analysis:
Evaluation and analysis of marketing position of an organization is a procedure which
is carried out by the managers of the company or the investors to identify the marketing
position of the company through collecting the information about the services, products and
the market share of the company. An analysis of the market position incorporates the general
information about the organization like the product, services, promotion strategies, market
and industry share etc of the company (Gapenski, 2008). At the time of evaluating the
marketing position of the company, various levels and factors of the company are required to
be analyzed.
The main goal of the market analysis of an organization is to evaluate the performance
of the company in terms of producing and selling the product, offering the services of the
company, customer loyalty etc. the market analysis of the company is evaluated to analyze
the company’s attractiveness and dynamics. It is used for identify the planning and activities,
inventory, purchase, work force, facility expansion, promotional activities of the company
etc. market analysis evaluates the stock performance of the company as well.
Market capitalization:
Market capitalization stands for the total dollar value of an organization in the market.
The market capitalization is calculated through multiplying the total outstanding share of the
company with the market price per share f the company. Market capitalization brief that how

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the performance of the company as well as how well the company is performing in the
market (Davies and Crawford, 2011). In case of Billabong international limited, it has been
evaluated that the market capitalization of the company of last 3 years are as follows:
Year
Total
outstanding
shares
Market
value Book price Market price
Jun-
2013 119609000
$
1.682
$
27,18,38,000
$
20,11,82,338
Jun-
2014 163657000
$
2.675
$
27,00,24,000
$
43,77,82,475
Jun-
2015 197353000
$
3.000
$
28,15,84,000
$
59,20,59,000
(yahoo finance, 2018)
The book capitalization and the market capitalization of the company brief that the
performance of the company in terms of market performance and the total capitalization in
the market has been enhanced. The stock price of the company has been evaluated and it has
been found that the market performance of the company has been better in last few years.
The number of outstanding shares of the company has also been discussed and it has
been found that the numbers of outstanding shares are continuously enhancing. It is
explaining that the company has issued more shares in the market to raise the capital.
Though, the stock price of the company has also been enhanced (Damodaran, 2011).
On the basis of market capitalization, it has been found that the performance of the
company is far better. Though, the number of stock of the company has also been enhanced
and it has impacted on the total capitalization of the company. Though, XXX has argued that
high market capitalization is not an indication about the better performance of the company.
Market capitalization only expresses about the total capital of the company in the market. It is
a measurement to evaluate the total worth of an organization in the stock market. The market
capital is usually categorized into stock investments. Organizations that have more
capitalization in the market tend to have higher revenue, capital and more assets.
On the basis of the evaluation on Billabong international limited, it has been found that
the total assets and the total revenue of the company is quite higher and it has impacted on the
total market capital of the company.
Market segmentation:

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Market segmentation is a procedure to divide a wide range of consumers and the
business market of the company. Basically, market segmentation consists of potential and
existing customers into sub groups of customers of the company which is based on various
characteristics. At the time of segmenting the market, researchers and market analysts
basically look and evaluate the basic characteristics of the product and the services of the
company such as common interest, needs, lifestyle, demographic profiles etc. the main aim of
the segmentation is to evaluate the high yield segments which are likely to have great
potential and profitability position.
The segmentation approach of billabong international plc has been evaluated and it has
been recognized that the Billabong international limited has segmented the products on
various basis n each country (Bierman, 2010). Some of the evaluated segmentation of the
company is as follows:
Market segmentation:
Market segmentation of the company has been evaluated and it has been recognized
that the company has segmented the products and the service on the basis of pricing,
availability, distribution factors, customers factors, branding etc. the number of
characteristics on which the market is segmented by the company is as follows:
 High pricing product
 Lower pricing product
 Great availability of the product
 Reduced availability
 Convenience factors
 Distribution factors
 Psychographic factors
 Market stretching
 Branding factors
 Customer factors etc.
Product segmentation: