Head NV reports 1.2 percent sales rise in H1

Report_ Head NV reported a sales rise of 1.2 percent in the first

six months of 2013 compared to the prior year driven primarily by Racquet Sports, especially in North America, offset by exchange rate movements. At constant currency the sales for the first six months of 2013 would have increased by 2.0percent. Winter Sports sales for the first six months where behind the comparable period in 2012 by 2.2 percent.

The sell-in for the 2012/13 season was challenging due to the very mild winter and late snow in both Europe and North America in 2011/12. The snow in 2012/13 improved and participation grew in the year. Company believes that the increase in participation did not ultimately lead to a proportional increase in market consumption due to higher levels of rental and cautionary spending of consumers. Overall, whilst retailers are still somewhat cautious, company witnessed bookings at this stage for the 2013/14 season have improved compared to those achieved in the same period in 2012 by around 10 percent, but have yet to recover to the levels achieved in either 2010 or 2011.

The growth in company’s Racquet Sports division was 2.7 percent for the six months to June 2013 was mainly a result of higher tennis ball volumes particularly in North America. The sale would have been further increased by one percentage point had currencies been constant. Diving sales for the first six months of 2013 remained flat as the European market remained challenging due to cold weather conditions and general continued economic uncertainties, but some growth was seen in North America and Asia. Sportswear sales for the six months declined by 4.0 percent mainly due to lower bag sales in the UK market.

Gross margins for the six months to 30th June 2013 have improved from 39.9 percent to 40.9 percent mainly due to lower cost of sales for our bindings and tennis balls. Adjusted operating loss for the six months to 30th June 2013 reduced marginally by 0.1million euros (1.3 million dollars).

For 2013, Amsterdam-based company is anticipating a moderate growth in sales driven by further recovery of winter sports division but due to the impact of currency fluctuations, particularly the Yen, and some higher marketing and investment costs company expects operating results to be broadly in line with those achieved in 2012.