Form 17
Rule 8.05(1)(a)
STATEMENT OF CLAIM
No. VID
of 2015
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
NEWSTART 123 PTY LTD (ACN 001 833 129)
Applicant
and
BILLABONG INTERNATIONAL LIMITED (ACN 084 923 946)
Respondent
TABLE OF CONTENTS
PARTIES ............................................................................................................................................... 3
APPLICATION OF SECTION 674(2) OF THE CORPORATIONS ACT TO BILLABONG ..... 4
BILLABONG’S BUSINESS ................................................................................................................. 5
BILLABONG’S FINANCIAL PERFORMANCE IN FY09 AND FY10 ......................................... 6
BILLABONG’S ACQUISITIONS IN FY11 ....................................................................................... 7
RELEVANT MARKET CONDITIONS .............................................................................................. 8
CONTRAVENTIONS ........................................................................................................................... 9
FY10 PRESENTATION ...................................................................................................................... 9
FY10 AGM ..........................................................................................................................................10
DECEMBER 2010 ASX ANNOUNCEMENT.................................................................................11
1H11 REPORT AND 1H11 PRESENTATION............................................................................11
1H11 CONFERENCE CALL .............................................................................................................12
18 FEBRUARY 2011 REPRESENTATIONS ...............................................................................13
16 MARCH 2011 ANNOUNCEMENT...........................................................................................17
16 MARCH 2011 PRE-RECORDED CALL ..................................................................................17
16 MARCH 2011 REPRESENTATIONS ......................................................................................17
FY11 PRELIMINARY FINAL REPORT ........................................................................................19
FY11 CONFERENCE CALL ..............................................................................................................20
19 AUGUST 2011 REPRESENTATIONS ....................................................................................21
FY11 ANNUAL REPORTS...............................................................................................................23
Filed on behalf of
Prepared by
Law firm
Tel
Email
Address for service
Newstart 123 Pty Ltd, Applicant
Odette McDonald
Slater and Gordon Limited
(03) 9602 6866
Fax
(03) 9600 0290
odette.mcdonald@slatergordon.com.au
Slater and Gordon Limited, 485 La Trobe Street, Melbourne VIC 3001
23 SEPTEMBER 2011 REPRESENTATIONS ............................................................................23
CEO’S ADDRESS TO 2011 AGM ...................................................................................................25
25 OCTOBER 2011 REPRESENTATIONS .................................................................................26
PRICE QUERY ....................................................................................................................................28
FINANCIAL PERFORMANCE IN 1H12........................................................................................29
FINANCIAL PERFORMANCE IN FY12 ........................................................................................29
BILLABONG’S LIKELY 1H12 FINANCIAL RESULT .................................................................30
1H12 CONTINUOUS DISCLOSURE CONTRAVENTION .........................................................30
FY12 CONTINUOUS DISCLOSURE CONTRAVENTION ..........................................................31
COMPLIANCE REPRESENTATION ..............................................................................................32
FY12 FORECAST DOWNGRADE ..................................................................................................35
LOSS AND DAMAGE ........................................................................................................................35
ANNEXURE A – PARTICULARS OF THE APPLICANT’S SHAREHOLDINGS IN
BILLABONG DURING THE RELEVANT PERIOD .....................................................................41
ANNEXURE B – CHRONOLOGY OF BILLABONG’S SHARE PRICE HISTORY DURING
THE RELEVANT PERIOD ...............................................................................................................42
ANNEXURE C – DEFINITIONS ......................................................................................................50
NOTE AS TO TERMINOLOGY
In this Statement of Claim, the following conventions are used in referring to
financial results:
(a)
FY10, FY11, etc refer to the financial years ended 30 June 2010, 30
June 2011, etc;
(b)
1H, 2H refer to the first and second half of the relevant financial year
(1H10 being the six month period ended 31 December 2009, 2H10
being the six month period ended 30 June 2010, etc);
(c)
1Q, 2Q, 3Q and 4Q refer to the first, second, third and fourth quarters of
the relevant financial year (1Q11 being the three month period ended
30 September 2010, 2Q11 being the three month period ended 31
December 2010, etc); and
(d)
the defined terms have been summarised in Annexure C to this
Statement of Claim.
2
PARTIES
1.
Newstart 123 Pty Ltd (Applicant) commences this proceeding as a
representative party pursuant to Part IVA of the Federal Court of Australia Act
1976 (Cth) on his own behalf and on behalf of the Group Members.
2.
At all material times the Applicant was a company incorporated under the
Corporations Act 2001 (Cth) (Corporations Act).
3.
At all material times the Applicant was the trustee of the Malone Family
Superannuation Fund, and it sues in its capacity as trustee.
4.
The Applicant and the persons whom it represents (Group Members) are
persons who:
4.1.
acquired an interest in (i) ordinary shares under the code BBG, or
(ii) American Depositary Receipts trading under the codes BLLAF and
BLLAY, (together, Securities) in the Respondent (Billabong) during
the period from 18 February 2011 to immediately prior to the
publication of the December 2011 Trading Update (as defined below)
on 19 December 2011 inclusive (Relevant Period);
Particulars
Particulars of the Applicant’s shareholdings are set out in
Annexure A to this Statement of Claim.
Particulars of the shareholdings of the Group Members will be
provided following the trial of the common questions.
4.2.
are not:
(a)
directors or officers, or a close associate (as defined by s 9 of
the Corporations Act) of Billabong; or
(b)
a related party (as defined by s 228 of the Corporations Act) of
Billabong; or
(c)
a related body corporate (as defined by s 50 of the
Corporations Act) of Billabong; or
(d)
an associated entity (as defined by s 50AAA of the
Corporations Act) of Billabong; or
(e)
a Justice, Registrar, District Registrar or Deputy District
Registrar of the High Court of Australia or the Federal Court of
Australia; and
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4.3.
are alleged to have suffered loss and damage by reason of the
Contravening Conduct pleaded in this Statement of Claim.
5.
Billabong is and at all material times was:
5.1.
a company incorporated under the Corporations Act;
5.2.
a corporation listed on a financial market operated by the Australian
Securities Exchange (the ASX) and whose ordinary shares are ED
securities for the purposes of s 111AE of the Corporations Act;
5.3.
subject to and bound by the Listing Rules of the ASX (ASX Listing
Rules);
5.4.
a listed disclosing entity within the meaning of s 111AL(1) of the
Corporations Act; and
5.5.
a trading corporation within the meaning of the Australian Securities
and Investments Commission Act 2001 (Cth) (ASIC Act).
APPLICATION OF SECTION 674(2) OF THE CORPORATIONS ACT TO
BILLABONG
6.
At all material times the ASX was a market operator of a listing market,
namely the ASX’s financial market, in relation to Billabong for the purposes of
s 674(1) of the Corporations Act.
7.
At all material times Rule 3.1 of the ASX Listing Rules provided that once an
entity is or becomes aware of any information concerning it that a reasonable
person would expect to have a material effect on the price or value of the
entity’s securities, the entity must, unless the exceptions in ASX Listing Rule
3.1A apply, immediately tell the ASX that information.
8.
At all material times Rule 19.12 of the ASX Listing Rules provided that an
entity becomes aware of information if a director or executive officer has, or
ought reasonably to have, come into possession of the information in the
course of the performance of their duties as a director or executive officer of
that entity.
9.
At all material times s 674(2) of the Corporations Act applied to Billabong by
reason of:
9.1.
the matters set out in paragraphs 6 to 8 above; and
9.2.
ss 111AP(1) and/or 674(1) of the Corporations Act.
4
BILLABONG’S BUSINESS
10.
At all material times Billabong:
10.1. carried on business as a designer, marketer, wholesaler and retailer of
apparel and hardgoods for the global action sports and associated
youth lifestyle sector;
10.2. supplied, by wholesale and retail sales, apparel and hardgoods in
more than 100 countries (classified by Billabong into 3 regions:
Australasia, Europe and the Americas) (Billabong’s Markets), under
the following brands:
(a)
Billabong;
(b)
Nixon;
(c)
Vonzipper;
(d)
Element;
(e)
Tigerlily;
(f)
Dakine;
(g)
Xcel;
(h)
Sector;
(i)
Kustom;
(j)
Honolua;
(k)
Palmers;
(l)
RVCA;
(m)
Beachculture; and
(n)
Amazon.
(together, Billabong Family Brands).
11.
At the end of FY09 Billabong operated 335 retail stores which stocked and
sold Billabong Family Brands and/or other branded goods.
Particulars
Billabong’s Shareholder Review for FY10 published on 24 September
2010 (FY10 Shareholder Review), p 22.
5
12.
At the end of FY10 Billabong operated 380 retail stores, which stocked and
sold Billabong Family Brands as well as other branded goods.
Particulars
FY10 Shareholder Review, p 22.
BILLABONG’S FINANCIAL PERFORMANCE IN FY09 and FY10
13.
In respect of Billabong’s FY09 financial results:
13.1. according to Billabong’s Shareholder Review for FY09 (FY09
Shareholder Review):
(a)
its reported sales revenue figure was $1.669 billion;
(b)
its reported NPAT for FY09 was $152.8 million;
(c)
its reported EBITDA for FY09 was $284.8 million;
(d)
its consolidated EBITDA margin for FY09 was 17.1%;
13.2. of Billabong’s reported sales revenue figure:
(a)
approximately 21% related to retail sales;
(b)
approximately 79% related to wholesale sales to third parties;
13.3. Billabong’s consolidated EBITDA margin was:
(a)
approximately 10.2% for retail sales;
(b)
approximately 18.8% for wholesale sales.
Particulars
FY09 Shareholder Review, pp 7-8, 21.
14.
In respect of Billabong’s FY10 financial results:
14.1. According to Billabong’s FY10 Shareholder Review:
(a)
its reported sales figure was $1.482 billion;
(b)
its NPAT for FY10 was $146.0 million;
(c)
its reported EBITDA for FY10 was $253.3 million;
(d)
its EBITDA margin for FY10 was 17.1%.
14.2. of Billabong’s reported sales revenue figure:
(a)
approximately 24% related to retail sales;
6
(b)
approximately 76% related to wholesale sales to third parties;
14.3. Billabong’s consolidated EBITDA margin was:
(a)
approximately 10.9% for retail sales;
(b)
approximately 23.1% for wholesale sales.
Particulars
FY10 Shareholder Review, pp 6, 8, 22.
BILLABONG’S ACQUISITIONS IN FY11
15.
Prior to September 2010, at a time known to Billabong and presently
unknown to the Applicant, Billabong developed a business strategy for
transitioning from a predominantly wholesale business to a mixed
wholesale/retail business, and for increasing Billabong’s reliance on retail
sales of Billabong Family Brands (Retail Strategy).
Particulars
The Retail Strategy is described in the following documents:
16.
(a)
FY11 Preliminary Final Report, p 6 (“During the year the
[Billabong] Group acquired several retail banners in North
America and Australia. These acquisitions reflect the execution
of various strategic moves to enhance the route to market for
the [Billabong] Group’s compelling brand portfolio”).
(b)
Billabong’s Shareholder Review for FY11 published on 23
September 2011 (FY11 Shareholder Review), chairman’s
report, p 2 (“The [Billabong] Group’s transition from a
wholesale-focused business to an operation with more
balanced exposure to wholesale and retail…”).
(c)
The Analyst Day Briefing (ASX Announcement issued on 30
August 2010) included slides which refer to the retail strategy.
On or about 1 September 2010 Billabong acquired West 49 Inc, a Canadianbased board sports retailer which operated 138 stores in Canada.
Particulars
Billabong announcement to ASX dated 1 September 2010 entitled
“West 49 Update”.
17.
On or about 8 November 2010 Billabong acquired a portfolio of 38 retail
stores from General Pants Group and associated parties, including Surf Dive
n’ Ski stores, Jetty Surf stores and Billabong stores in Australia.
7
Particulars
Billabong announcement to ASX dated 1 October 2010 entitled
‘Billabong to Acquire Australian Retail Assets’.
Billabong announcement to ASX dated 8 November 2010 entitled
“Retail Acquisition Update”.
18.
On or about 26 November 2010 Billabong acquired a portfolio of 36 retail
stores in the Rush Surf retail chain in Australia.
Particulars
FY10 Presentation, p 6.
Billabong announcement to ASX dated 26 November 2010 entitled
“Rush Acquisition Update”.
19.
By 30 June 2011, Billabong operated 639 retail stores, an increase of 259
since 1 July 2010, comprising 324 new stores (either acquired or opened)
less 65 store closures.
Particulars
FY11 Shareholder Review, p 22.
20.
Prior to 19 August 2011, at a time known to Billabong and presently unknown
to the Applicant, Billabong had also implemented internal initiatives as part of
the Retail Strategy, including in relation to its IT systems, sales intelligence
software, management processes, and greater investment in its online
operations.
Particulars
FY11 Presentation, p 2.
RELEVANT MARKET CONDITIONS
21.
Further, throughout FY11 and extending into FY12:
21.1. in Australia, there was a weak retail environment;
21.2. the Australian dollar appreciated substantially against the United
States dollar and the Euro;
21.3. Europe suffered sovereign debt issues;
21.4. there were a number of natural disasters in key regions in which
Billabong operated, including floods in Queensland, earthquakes in
New Zealand and an earthquake and subsequent tsunami in Japan;
8
21.5. there was unseasonably cool and wet weather during the summer for
the east coast of Australia;
21.6. the price of cotton had fallen steadily from a peak in March 2011;
21.7. there was a highly promotional environment at both wholesale and
retail level for sellers of apparel and hardgoods, associated with
aggressive clearance of inventory;
(together, Relevant Market Conditions).
Particulars
The matter described in subparagraph 21.1 above was described in
Billabong’s Full Financial Report for FY11 published on 23 September
2011 (FY11 Full Financial Report), p 3.
The matter described in subparagraph 21.2 above was described in
the FY11 Full Financial Report, p 3 and on p 21 of the FY11
Presentation. At the start of FY11, 1 AUD was worth USD 0.84; at the
end of FY11, 1 AUD was worth USD 1.07.
The matter described in subparagraph 21.3 above was described in
pp 2 (Chairman’s Report) and 5 (CEO’s Report) of the FY11
Shareholder Review.
The matter described in subparagraph 21.4 above was described in
the FY11 Full Financial Report, p 3.
The matter described in subparagraph 21.5 above was described in
the FY11 Shareholder Review, p 8.
The matter described in subparagraph 21.6 above is inferred from the
fact that cotton is a key production input for apparel sold by Billabong,
and the references in several Billabong publications to the cotton
price, eg the FY11 Presentation, at p 29, the FY11 Full Financial
Report at p 5, and the transcript of the FY11 Conference Call at p 7.
The matter described in subparagraph 21.7 above was described in
pp 4 and 11 of the transcript of the FY11 Conference Call.
Further particulars may be provided after discovery.
CONTRAVENTIONS
FY10 Presentation
22.
On 20 August 2010, Billabong published and lodged with the ASX a
document entitled “Full Year Presentation 2009/10” (FY10 Presentation), in
which it stated that:
9
22.1. NPAT in constant currency terms was expected to grow in the range
of 2% to 8% compared with the FY10 result of $146 million;
22.2. earnings guidance reflected a reasonably flat expected EBIT result,
higher interest costs and a lower effective tax rate;
22.3. Billabong viewed FY11 as a transitional year, with various strategic
moves enhancing its route to market to deliver its target consumer the
compelling branded portfolio offer that Billabong had developed over
the past 10 years;
22.4. as the anticipated global recovery gradually took hold, and given the
successful execution of various strategic and operational initiatives,
Billabong expected to return, in the absence of further unforseen,
exceptional circumstances, to more historic EPS growth rates in
excess of 10% per annum in constant currency terms.
Particulars
FY10 Presentation, p.8.
FY10 AGM
23.
On 26 October 2010, at its AGM, Billabong stated that:
23.1. it retained its constant currency guidance of 2% to 8% growth in NPAT
for FY11;
23.2. its earnings guidance reflected a reasonably flat expected EBIT result
after excluding $2.3 million in acquisition transaction costs, higher
interest costs and a lower effective tax rate;
23.3. its earnings guidance reflected the inclusion of significant one-off
acquisition transaction and restructuring costs of approximately
$11.0 million post-tax, including the abovementioned $2.3 million
which was not known at the time of the FY10 Presentation;
23.4. offsetting these costs were expected one-off tax benefits of
approximately $12.5 million.
Particulars
Billabong announcement to ASX dated 26 October 2010 entitled
“Annual General Meeting Update”, p.5.
10
December 2010 ASX Announcement
24.
Further, on 15 December 2010, Billabong announced a revision to its market
guidance for FY11 in which it stated that:
24.1. Billabong now anticipated that 1H11 NPAT would be 8% to 13% lower
than 1H10 in constant currency terms;
24.2. earnings guidance reflected an expected 1H11 EBIT result in constant
currency terms of approximately 25% below 1H10, higher interest
costs and a significantly lower effective tax rate;
24.3. the FY11 earnings guidance reflected an expected EBIT result in
constant currency terms of approximately 10% below prior year,
higher interest costs and a significantly lower tax rate;
24.4. earnings guidance reflected the inclusion of significant one-off
acquisition transaction and restructuring costs of approximately
$9.0 million post-tax, offset by one-off tax benefits of approximately
$9.5 million;
24.5. Billabong now anticipated constant currency NPAT for FY11 to be flat
compared to FY10 instead of the previously stated constant currency
guidance of 2% to 8% growth.
Particulars
Billabong announcement to ASX dated 15 December 2010 entitled
“Trading Update”, pp1, 2 (December 2010 ASX Announcement).
1H11 Report and 1H11 Presentation
25.
On 18 February 2011, Billabong published and lodged with the ASX a
document entitled “Interim Financial Report – 31 December 2010” (1H11
Report) and an investor presentation document entitled “Half Year Results
Presentation 2010/2011” (1H11 Presentation), in which it stated that:
25.1. its reported global sales figure for 1H11 was $834.9 million;
25.2. its reported EBITDA for 1H11 was $94.6 million;
25.3. its reported NPAT for 1H11 was $57.2 million, representing a fall of
9.8% in constant currency terms compared with 1H10;
25.4. its EBITDA margin for 1H11 was 11.3%;
25.5. FY11 was a transition year for Billabong;
11
25.6. in line with its previous guidance provided on 15 December 2010 and
in the absence of any unforeseen, exceptional circumstances
impacting the global board sports market, it expected NPAT to be flat
in constant currency terms for FY11 as compared to FY10;
25.7. it expects to return to more historic EPS growth rates in excess of 10%
per annum in constant currency terms.
Particulars
1H11 Report, pp 3, 4.
1H11 Presentation, pp 1, 3, 4.
26.
Of the reported global sales figure for 1H11:
26.1. approximately 40% related to retail sales;
26.2. approximately 60% related to wholesale sales to third parties.
Particulars
1H11 Presentation, p 2.
1H11 Conference Call
27.
On 18 February 2011, a conference call occurred between Derek O’Neill
(O’Neill), the then chief executive officer of Billabong, Craig White (White),
the then chief financial officer of Billabong, and a number of analysts (1H11
Conference Call).
Particulars
The 1H11 Conference Call was transcribed.
28.
In the course of the 1H11 Conference Call:
28.1. an analyst (Ben Gilbert, UBS) stated that Billabong’s guidance for
FY11 implied 10% or 15% plus constant currency EBIT growth for
2H11;
28.2. O’Neill failed to correct the statement by the analyst and further stated
“I think we’ve got a relatively steady business into this second half”.
Particulars
Transcript of 1H11 Conference Call, pp 11–12.
12
18 February 2011 Representations
29.
By reason of the matters set out in paragraphs 22 to 28 above, on
18 February 2011, Billabong represented that:
29.1. it expected to return to more historic EPS growth rates in 2H11 and
FY12 in excess of 10% per annum in constant currency terms;
29.2. it expected 10% or 15% plus constant currency EBIT growth for 2H11,
(individually or together, these are referred to as the 18 February 2011
Representations).
Particulars
The 18 February 2011 Representations were partly express and partly
implied.
In so far as they were express, they were partly in writing (in the
December 2010 ASX Announcement, in the 1H11 Report and in the
1H11 Presentation) and partly oral (in the 1H11 Conference Call).
In so far as they were implied, they were to be implied as a matter of
law, including by s 769C of the Corporations Act; and/or by reason of
the facts that they were made in company documents released to the
market by means of the ASX company announcements platform and
Billabong knew or ought to have known that investors and potential
investors in its shares may rely upon the statements and forecasts in
those documents in making decisions whether to acquire or retain
shares in Billabong.
30.
The 18 February 2011 Representations were made in relation to future
matters, namely Billabong’s EPS and EBIT for FY11 and beyond, and in that
regard the Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
31.
Further or alternatively, by reason of the matters set out in paragraphs 22 to
29 above, on 18 February 2011, Billabong represented that it had a genuine
and reasonable basis for making each of the 18 February 2011
Representations (Genuine Basis for 18 February 2011 Statements
Representation).
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
32.
The 18 February 2011 Representations and the Genuine Basis for
18 February 2011 Statements Representation were:
32.1. in relation to a financial product, namely Billabong’s Securities; and
13
32.2. in trade or commerce.
33.
At no time prior to 19 December 2011 did Billabong withdraw or qualify the
18 February 2011 Representations or the Genuine Basis for 18 February
2011 Statements Representation and accordingly they were continuing
representations.
34.
At the time of making the 18 February 2011 Representations and the Genuine
Basis for 18 February 2011 Statements Representation, Billabong was or
ought to have been aware:
34.1. of the Relevant Market Conditions;
34.2. that a substantial number of the retail stores which Billabong acquired
as described in paragraphs 16 to 18 above were loss-making at the
time of acquisition and would likely continue to operate at a loss;
34.3. of the impact of the acquisitions described in paragraphs 16 to 18
above, which included:
(a)
an increase in Billabong’s fixed costs, including store rental
and staff wages;
(b)
an increase in the level of Billabong’s inventory which was
excess to requirements;
34.4. that Billabong’s EBITDA margins were in continual decline, particularly
in Australasia;
34.5. that in respect of the Billabong Family Brands, apart from the Nixon
brand, there was a marked decline in EBITDA margins;
34.6. that Billabong’s net retail margins, when considered as a standalone
business unit, were zero or slightly negative;
34.7. that in order to achieve strong growth in EBITDA, Billabong would
need to increase retail sales revenue dramatically;
34.8. that by reason of the matters pleaded in subparagraphs 34.1 to 34.7,
EBIT growth in excess of 10% per annum was unlikely to be achieved
in 2H11 or FY12; and
34.9. that Billabong’s systems did not allow it to forecast accurately or at all
its EBITDA for 2H11 or FY12.
14
Particulars
(a)
Billabong’s awareness of the Relevant Market Conditions is to
be inferred from its knowledge of its own past financial
performance and performance of wholesale and retail sales of
apparel and hardgoods in Billabong’s Markets in FY11;
(b)
Billabong’s awareness of the matters set out in subparagraph
34.2 is to be inferred from (i) the statements in Billabong’s ASX
announcement on 17 February 2012 entitled ‘Strategic Capital
Structure Review Update’, p 2, that Billabong was undertaking
a review of its retail network with a view to closing stores
performing below expectations, and it was expected that the
number of store closures would fall somewhere in the range of
100 to 150 stores, and (ii) the statements in Billabong’s Full
Year Results Presentation for FY12 dated 27 August 2012, p
9, under the heading ‘closure of underperforming stores’, that
as at 30 June 2012 Billabong had closed 58 stores, and it
expected to close a total of approximately 140 stores by 30
June 2013;
(c)
Billabong’s awareness of the matters set out in subparagraph
34.3(a) is to be inferred from the fact that: (i) its selling, general
and administrative expenses had been about $525.4 million in
FY09 and about $469.8 million in FY10 but jumped to about
$599 million in FY11; (ii) its employee benefits expenses had
been about $248.5 million in FY09 and about $226.4 million in
FY10 but jumped to about $282.9 million in FY11; (iii) its rental
expenses relating to operating leases had been about $73
million in FY09 and about $72.7 million in FY10 but jumped to
about $90 million in FY11;
(d)
Billabong’s awareness of the matters set out in subparagraph
34.3(b) is to be inferred from the statements made in the FY11
Presentation to the effect that (i) in relation to the West 49
acquisition, inventory was above expected levels (p 14), (ii)
West 49, Surf Dive ‘n’ Ski and Jetty Surf were carrying excess
inventory (p 30), and (iii) there was some slight inventory
overhang in Canada and the last pieces of winter in Australia
(p 13);
(e)
Billabong’s awareness of the matters set out in subparagraph
34.4 is to be inferred from the fact that: (i) its reported EBITDA
margin overall was 21.7% in FY08, 17.1% in FY09, 17.1% in
FY10, and 11.4% in FY11; and (ii) its reported EBITDA margin
for Australasia was 22.6% in FY09, 20.9% in FY10 and 11.0%
in FY11;
(f)
Billabong’s awareness of the matters set out in subparagraph
34.5 is to be inferred from the statements in Billabong’s ASX
announcement on 17 February 2012 entitled ‘Strategic Capital
Structure Review Update’, p 1, that Billabong would sell 51.5%
of the Nixon brand which, for the 12 months ending 31
December 2011 had an EBITDA of US$50.6 million;
(g)
Billabong’s awareness of the matters set out in subparagraph
34.6 is to be inferred from the statement by the CFO, Craig
15
White, in a conference call with analysts on 27 August 2012,
that ‘on a pure standalone retail basis I think you’d find that
[retail margins] would be breakeven [or] slightly negative’
(transcript, p 19);
(h)
Billabong’s awareness of the matters set out in subparagraph
34.7 is to be inferred from the fact that (i) its total sales
revenue for FY11 was about $1.68 billion, its total expenses
(excluding impairments) for FY11 were about $1.57 billion, its
reported EBITDA for FY11 was $191.9 million; (ii) in order to
increase EBITDA by 10% (ie to $211 million), sales revenue in
FY12 needed to increase by at least 10%, in the absence of a
commensurate decrease in expenses;
(i)
Billabong’s awareness of the matters set out in subparagraphs
34.8 and 34.9 is to be inferred from (i) the fact that Billabong
had ‘lumpy’ earnings in that the December and June trading
periods were particularly significant to the full year results, as
stated in the CEO’s Address to the 2011 AGM at p 5, (ii) the
admissions by Billabong in its presentation entitled ‘Unlocking
Billabong Group’s Value’ published to ASX on 27 August 2012
at p 30, that the Billabong Group had ‘problematic integration’,
was ‘not sufficiently customer centric’, ‘underinvested in
retailing tools (eg IT systems)’, ‘lacked a network plan’ and
‘lacked scale retail expertise’.
Further particulars may be provided after discovery.
35.
By reason of the matters set out in paragraph 34 above, Billabong did not
have a reasonable basis for making any of the 18 February 2011
Representations or the Genuine Basis for 18 February 2011 Statements
Representation.
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
36.
By reason of the matters set out in paragraphs 34 and 35 above, the
18 February 2011 Representations and the Genuine Basis for 18 February
2011 Statements Representation were untrue.
37.
By reason of the matters set out in paragraphs 29 to 36 above, Billabong
engaged in conduct that was misleading or deceptive or likely to mislead or
deceive in contravention of:
37.1. s 1041H of the Corporations Act; and/or,
37.2. s 12DA(1) of the ASIC Act.
16
16 March 2011 Announcement
38.
Further or alternatively, on 16 March 2011, Billabong:
38.1. made an announcement to the ASX which revised FY11 NPAT from
flat compared to FY10 NPAT to 2% to 6% below FY10 NPAT in
constant currency terms;
38.2. attributed the downgrade in NPAT guidance to the earthquake and
subsequent tsunami in Japan and the earthquake in New Zealand;
38.3. said nothing further about Billabong’s EBIT growth.
Particulars
ASX announcement dated 16 March 2011 (the 16 March 2011
Announcement).
16 March 2011 Pre-recorded Call
39.
On 16 March 2011, Billabong released a pre-recorded call (the 16 March
2011 Pre-recorded Call) which stated that:
39.1. the 16 March 2011 Announcement did not constitute a trading update
in relation to Billabong’s overall business;
39.2. the performance of the balance of Billabong remained in line with the
guidance provided by the company on 18 February 2011.
16 March 2011 Representations
40.
By reason of the matters set out in paragraphs 38 and 39 above, on 16 March
2011, Billabong repeated the 18 February 2011 Representations (individually
or together, these are referred to as the 16 March 2011 Representations).
Particulars
The 16 March 2011 Representations were partly express and partly
implied.
In so far as they were express, they were partly in writing (in the
December 2010 ASX Announcement, in the 1H11 Report and in the
1H11 Presentation and in the 16 March 2011 Announcement) and
partly oral (in the 1H11 Conference Call and in the 16 March 2011
Pre-recorded Call).
In so far as they were implied, they were to be implied as a matter of
law, including by s 769C of the Corporations Act; and/or by reason of
the facts that they were made in company documents released to the
market by means of the ASX company announcements platform and
Billabong knew or ought to have known that investors and potential
investors in its Securities may rely upon the statements and forecasts
17
in those documents in making decisions whether to acquire or retain
Securities in Billabong.
41.
The 16 March 2011 Representations were made in relation to future matters,
namely Billabong’s EPS and EBIT for FY11 and beyond, and in that regard
the Applicant refers to and relies on s 769C of the Corporations Act and s
12BB of the ASIC Act.
42.
Further or alternatively, by reason of the matters set out in paragraphs 40 and
41 above, on 16 March 2011, Billabong represented that it had a genuine and
reasonable basis for making each of the 16 March 2011 Representations
(Genuine Basis for 16 March 2011 Statements Representation).
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
43.
The 16 March 2011 Representations and the Genuine Basis for 16 March
2011 Statements Representation were:
43.1. in relation to a financial product, namely Billabong’s Securities; and
43.2. in trade or commerce.
44.
At no time prior to 19 December 2011 did Billabong withdraw or qualify the
16 March 2011 Representations or the Genuine Basis for 16 March 2011
Statements
Representation
and
accordingly
they
were
continuing
representations.
45.
At the time of making the 16 March 2011 Representations and the Genuine
Basis for 16 March 2011 Statements Representation, Billabong was or ought
to have been aware of the matters set out in paragraph 34 above as at 16
March 2011.
Particulars
The Applicant refers to and repeats the particulars to
paragraph 34 above.
Further particulars may be provided after discovery.
46.
By reason of the matters set out in paragraph 45 above, Billabong did not
have a reasonable basis for making any of
the 16 March 2011
Representations or the Genuine Basis for 16 March 2011 Statements
Representation.
18
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
47.
By reason of the matters set out in paragraphs 45 and 46 above, the
16 March 2011 Representations and the Genuine Basis for 16 March 2011
Statements Representation were untrue.
48.
By reason of the matters set out in paragraphs 38 to 47 above, Billabong
engaged in conduct that was misleading or deceptive or likely to mislead or
deceive in contravention of:
48.1. s 1041H of the Corporations Act; and/or
48.2. s 12DA(1) of the ASIC Act.
FY11 Preliminary Final Report
49.
Further or alternatively, on 19 August 2011, Billabong published and lodged
with the ASX a document entitled “Financial Report – 30 June 2011” (FY11
Preliminary Final Report) and an investor presentation document entitled
“Full Year Results Presentation 2010/2011” (FY11 Presentation), in which it
stated that:
49.1. as anticipated, there was an initial combined dilutive effect on margins
of the recent acquisitions of retailers, and these margins were
expected to increase as its strategy to lift the Billabong Family Brands
share was realised over time (p 3, FY11 Preliminary Final Report);
49.2. it anticipated strong underlying growth in EBITDA in FY12 as the
benefits of vertical margins, cost rationalisation and synergies from
acquired assets flowed through the business (p 6, Preliminary Final
Report).
49.3. during FY11 it acquired major retail assets in Australia and Canada to
enhance its route to market, and as anticipated this led to strong
revenue growth at dilutive initial margins, which was expected to
increase as its strategy to lift the Billabong Family Brands share was
realised over time (p 2, FY11 Presentation);
49.4. the initiatives adopted during FY11, which was a transition year, had
resulted in a fundamental realignment of its business between
wholesale and retail (p 2, FY11 Presentation);
19
49.5. it anticipated strong underlying growth in EBITDA in FY12 as the
benefits of vertical margins, cost rationalisation and synergies from
acquired assets flowed through the business (p 3, FY11 Presentation);
49.6. it expected in FY12 to deliver strong underlying growth in EBITDA and
to show improvements in EBITDA margins in company-owned retail as
vertical margins flowed through (p 19, FY11 Presentation);
49.7. until there was more visibility of global trading conditions, and more
particularly their effect on consumer spending patterns and hence the
quantum of underlying growth in EBITDA, it will not offer EPS
guidance (p 3, FY11 Presentation).
FY11 Conference Call
50.
Further, on 19 August 2011, a conference call occurred between O’Neill,
White and a number of analysts (FY11 Conference Call).
Particulars
The FY11 Conference Call was transcribed.
51.
In the course of the FY11 Conference Call, O’Neill on behalf of Billabong
made express statements to the effect that:
51.1. Billabong was now through its transition year (p 1);
51.2. The vertical margin associated with the push deeper into retailing was
now starting to come through, and that should be apparent when
Billabong next reports to the market (p 2);
51.3. Billabong would definitely begin to see the vertical margins flow
through and that would put it in a reasonably good position over the
next 12 months (p 10);
51.4. he did not even want to imagine scenarios in FY12 where EBITDA
growth (from FY11) could only be single digit or even negative, and
that it would have to be really, really weak for it to be under double
digit (p 15).
20
19 August 2011 Representations
52.
By reason of the matters set out in paragraphs 49 to 51 above, on 19 August
2011, Billabong represented that:
52.1. in FY12 it would experience strong underlying growth in EBITDA
(FY12 Strong EBITDA Growth Representation);
52.2. in FY12 there would be a double digit increase in its EBITDA
compared with FY11 (FY12 Double Digit EBITDA Increase
Representation);
52.3. in FY12 it would experience improving EBITDA margins (FY12
Improving EBITDA Margins Representation); and
52.4. in FY12 it would experience the benefits of the Retail Strategy,
including vertical margin growth and cost reductions (FY12 Retail
Strategy Representation);
(individually or together, these are referred to as the 19 August 2011
Representations).
Particulars
The 19 August 2011 Representations were partly express and partly
implied.
In so far as they were express, they were partly in writing (in the FY11
Preliminary Final Report and the FY11 Presentation) and partly oral (in
the FY11 Conference Call).
In so far as they were implied, they were to be implied as a matter of
law, including by s 769C of the Corporations Act; and/or by reason of
the facts that they were made in company documents released to the
market by means of the ASX company announcements platform and
Billabong knew or ought to have known that investors and potential
investors in its Securities may rely upon the statements and forecasts
in those documents in making decisions whether to acquire or retain
Securities in Billabong.
53.
The 19 August 2011 Representations were made in relation to future matters,
namely Billabong’s EBITDA and margins for FY12, and in that regard the
Applicant refers to and relies on s 769C of the Corporations Act and s 12BB
of the ASIC Act.
54.
Further or alternatively, by reason of the matters set out in paragraphs 52 and
53 above, on 19 August 2011, Billabong represented that it had a genuine
and
reasonable
basis
for
making
21
each
of
the
19
August
2011
Representations (Genuine Basis for 19 August 2011 Statements
Representation).
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
55.
The 19 August 2011 Representations and the Genuine Basis for 19 August
2011 Statements Representation were:
55.1. in relation to a financial product, namely Billabong’s Securities; and
55.2. in trade or commerce.
56.
At no time prior to 19 December 2011 did Billabong withdraw or qualify the 19
August 2011 Representations or the Genuine Basis for 19 August 2011
Statements
Representation
and
accordingly
they
were
continuing
representations.
57.
At the time of making the 19 August 2011 Representations and the Genuine
Basis for 19 August 2011 Statements Representation, Billabong was or ought
to have been aware of:
57.1. the matters set out in paragraph 34 above; and
57.2. its FY11 financial results.
58.
By reason of the matters set out in paragraph 57 above, Billabong did not
have a reasonable basis for making any of the 19 August 2011
Representations or the Genuine Basis for 19 August 2011 Statements
Representation.
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
59.
By reason of the matters set out in paragraphs 57 and 58 above, the 19
August 2011 Representations and the Genuine Basis for 19 August 2011
Statements Representation were untrue.
60.
By reason of the matters set out in paragraphs 52 to 59 above, Billabong
engaged in conduct that was misleading or deceptive or likely to mislead or
deceive in contravention of:
22
60.1. s 1041H of the Corporations Act; and/or
60.2. s 12DA(1) of the ASIC Act.
FY11 Annual Reports
61.
Further or alternatively, on 23 September 2011, Billabong published its
Annual Reports for FY11 (FY11 Annual Reports) in which it repeated the
statements made in its FY11 Preliminary Final Report, as set out in paragraph
49 above.
Particulars
The Applicant refers to the Financial Overview at pages 6–7 of the
FY11 Shareholder Review and the FY11 Full Financial Report (found
after page 30 of the FY11 Shareholder Review) at pages 3 and 6.
23 September 2011 Representations
62.
By reason of the matters set out in paragraph 61 above, on 23 September
2011, Billabong repeated the FY12 Strong EBITDA Growth Representation,
the FY12 Improving EBITDA Margins Representation and the FY12 Retail
Strategy Representation (individually or together, these are referred to as the
23 September 2011 Representations).
Particulars
The 23 September 2011 Representations were partly express and
partly implied.
In so far as they were express, they were constituted by the repetition
of the FY12 Strong EBITDA Growth Representation, the FY12
Improving EBITDA Margins Representation and the FY12 Retail
Strategy Representation in the FY11 Annual Reports.
In so far as they were implied, they were to be implied as a matter of
law, including by s 769C of the Corporations Act and s 12BB of the
ASIC Act; and/or by reason of the facts that the FY12 Strong EBITDA
Growth Representation, the FY12 Improving EBITDA Margins
Representation and the FY12 Retail Strategy Representation were
made in a company document released to the market by means of the
ASX company announcements platform and Billabong knew or ought
to have known that investors and potential investors in its Securities
may rely upon the statements and forecasts in the document in
making decisions whether to acquire or retain Securities in Billabong.
63.
The 23 September 2011 Representations were made in relation to future
matters, namely Billabong’s EBITDA and margin for FY12, and in that regard
the Applicant refers to and relies on s 769C of the Corporations Act and s
12BB of the ASIC Act.
23
64.
Further or alternatively, by reason of the matters set out in paragraph 62
above, on 23 September 2011, Billabong represented that it had a genuine
and reasonable basis for making each of the 23 September 2011
Representations (Genuine Basis for 23 September 2011 Statements
Representation).
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
65.
The 23 September 2011 Representations and the Genuine Basis for 23
September 2011 Statements Representation were:
65.1. in relation to a financial product, namely Billabong’s Securities; and
65.2. in trade or commerce.
66.
At no time until 19 December 2011 did Billabong withdraw or qualify the 23
September 2011 Representations or the Genuine Basis for 23 September
2011 Statements Representation and accordingly they were continuing
representations.
67.
At the time of making the 23 September 2011 Representations and the
Genuine Basis for 23 September 2011 Statements Representation, Billabong
was, or ought to have been, aware of:
67.1. the matters set out in paragraph 57 above as at 23 September 2011;
67.2. its EBITDA for July and August 2011;
67.3. that cotton prices peaked in about March 2011 and had been falling
thereafter.
Particulars
(a)
As to subparagraph 67.1, the Applicant refers to and repeats
the particulars to paragraph 34 above.
(b)
As to subparagraph 67.2, Billabong’s awareness, or the fact
that it ought to have been aware, of its recent EBITDA figures
is to be inferred from the references in the ASX announcement
on 19 December 2011 titled “Trading Update” (December
2011 Trading Update) to the ‘receipt of management accounts
reflecting actual trading results for November and preliminary
retail sales data for 11 December 2011’.
(c)
As to subparagraph 67.3, Billabong’s awareness, or the fact
that it ought to have been aware, of the movements in cotton
prices is to be inferred from the fact that cotton is a key
24
production input for apparel sold by Billabong, and the
references in several Billabong publications to the cotton price,
eg the FY11 Presentation (p 29), the FY11 Full Financial
Report at page 5, p 7 of the transcript of the FY11 Conference
Call.
Further particulars may be provided after discovery.
68.
By reason of the matters set out in paragraph 67 above, Billabong did not
have a reasonable basis for making the 23 September 2011 Representations
or the Genuine Basis for 23 September 2011 Statements Representation.
Particulars
The Applicant refers to and rely on s 769C of the Corporations Act and
s 12BB of the ASIC Act.
69.
By reason of the matters set out in paragraphs 67 to 68 above, the 23
September 2011 Representations and the Genuine Basis for 23 September
2011 Representation were untrue.
70.
By reason of the matters set out in paragraphs 62 to 69 above, Billabong
engaged in conduct that was misleading or deceptive or likely to mislead or
deceive in contravention of:
70.1. s 1041H of the Corporations Act; and/or
70.2. s 12DA(1) of the ASIC Act.
CEO’s Address to 2011 AGM
71.
Further or alternatively, on 25 October 2011, the CEO of Billabong addressed
the Annual General Meeting of Shareholders and a copy of his speech was
published and lodged with the ASX on that day (CEO’s Address to 2011
AGM), in which he made the following express statements:
71.1. the business of Billabong and its group remained on track to deliver
strong underlying EBITDA growth in constant currency terms in FY12
(p 4);
71.2. the vertical margin contribution that Billabong and its group anticipated
from the move deeper into retail was starting to become apparent (p
4);
71.3. Billabong and its group anticipated strong underlying EBITDA growth
in constant currency terms in FY12 (p 5).
25
Particulars
Billabong announcement to ASX dated 25 October 2011 entitled ‘2011
Annual General Meeting Chairman & CEO Addresses’.
25 October 2011 Representations
72.
By reason of the matters set out in paragraph 71 above, on 25 October 2011,
Billabong repeated the FY12 Strong EBITDA Growth Representation, the
FY12 Improving EBITDA Margins Representation and the FY12 Retail
Strategy Representation (individually or together, these are referred to as the
25 October 2011 Representations).
Particulars
The 25 October 2011 Representations was partly express and partly
implied.
In so far as they were express, they were in the CEO’s Address to the
2011 AGM, which was both oral and in writing.
In so far as they were implied, it they were to be implied as a matter of
law, including by s 769C of the Corporations Act and s 12BB of the
ASIC Act; and/or by reason of the facts that the 25 October 2011
Representations were made in formal addresses to shareholders by
the CEO to the 2011 AGM, copies of which were released to the
market by means of the ASX company announcements platform, and
Billabong knew or ought to have known that investors and potential
investors in its Securities may rely upon the statements and forecasts
in those documents in making decisions whether to acquire or retain
Securities in Billabong.
73.
The 25 October 2011 Representations were made in relation to future
matters, namely Billabong’s EBITDA and margins for FY12, and in that regard
the Applicant refers to and relies on s 769C of the Corporations Act and s
12BB of the ASIC Act.
74.
Further or alternatively, by reason of the matters set out in paragraph 72
above, on 25 October 2011, Billabong represented that it had a genuine and
reasonable basis for making each of the 25 October 2011 Representations
(Genuine Basis for 25 October 2011 Statements Representation).
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
75.
The 25 October 2011 Representations and the Genuine Basis for 25 October
2011 Statements Representation were made:
26
75.1. in relation to a financial product, namely Billabong’s Securities; and
75.2. in trade or commerce.
76.
At no time until 19 December 2011 did Billabong withdraw or qualify the 25
October 2011 Representations or the Genuine Basis for 25 October 2011
Statements
Representation
and
accordingly
they
were
continuing
representations.
77.
At the time of making the 25 October 2011 Representations and the Genuine
Basis for 25 October 2011 Statements Representation, Billabong was, or
ought to have been, aware of:
77.1. the matters set out at paragraph 67 above as at 25 October 2011;
77.2. its financial results for 1Q12;
77.3. that cotton prices had continued to fall since 23 September 2011.
Particulars
(a)
As to subparagraph 77.1, the Applicant refers to and repeats
the particulars to paragraph 34 above.
(b)
As to subparagraph 77.2, Billabong’s awareness, or the fact
that it ought to have been aware, of its financial results for
1Q12 is to be inferred from the references in the December
2011 Trading Update to the ‘receipt of management accounts
reflecting actual trading results for November and preliminary
retail sales data for 11 December 2011’.
(c)
As to subparagraph 77.3, Billabong’s awareness, or the fact
that it ought to have been aware, of the movements in cotton
prices is to be inferred from the fact that cotton is a key
production input for apparel sold by Billabong, and the
references in several Billabong publications to the cotton price,
eg the FY11 Presentation (p 29), the FY11 Full Financial
Report at page 5, p 7 of the transcript of the FY11 Conference
Call.
Further particulars may be provided after discovery.
78.
By reason of the matters set out in paragraph 77 above, Billabong did not
have a reasonable basis for making the 25 October 2011 Representations or
the Genuine Basis for 25 October 2011 Statements Representation.
Particulars
The Applicant refers to and relies on s 769C of the Corporations Act
and s 12BB of the ASIC Act.
27
79.
By reason of the matters set out in paragraphs 77 and 78 above, the 25
October 2011 Representations and the Genuine Basis for 25 October 2011
Statements Representation were false.
80.
By reason of the matters set out in paragraphs 72 to 79 above, Billabong
engaged in conduct that was misleading or deceptive or likely to mislead or
deceive in contravention of:
80.1. s 1041H of the Corporations Act; and/or
80.2. s 12DA(1) of the ASIC Act.
Price Query
81.
On 24 November 2011, ASX Compliance Pty Ltd (a subsidiary of ASX) issued
a letter to Billabong with the subject ‘Price Query’ (Price Query), which noted
that the price of Billabong’s securities had decreased from a closing price of
$4.32 on 21 November 2011 to an intra-day low on 24 November 2011 of
$3.59 and requested Billabong answer questions relating to the price change
and increase in volume of trading over that period.
Particulars
Billabong announcement dated 25 November 2011 entitled ‘Response
to ASX Query re Price’ at p 2.
82.
On 25 November 2011, Billabong’s company secretary issued an ASX
announcement in response to the Price Query in which she made the
following express statements:
82.1. Billabong was not aware of any unannounced information concerning
it that explains the recent trading in its securities; and
82.2. Billabong referred to the Chairman and CEO Addresses at the
Company's AGM on 25 October 2011 and announced to ASX, which
remained valid as at the date of the announcement (25 November
2011).
Particulars
Billabong announcement dated 25 November 2011 entitled ‘Response
to ASX Query re Price’ at p 1.
28
Financial Performance in 1H12
83.
During 1H12 Billabong’s sales growth trend deteriorated significantly:
83.1. in 1Q12 (the first 3 months of 1H12), sales increased by 24.7% (or
6.2% adjusted);
83.2. in the first 4 months of 1H12, sales increased by 17.2% (or 2.8%
adjusted);
83.3. in the first 5 months of 1H12, sales increased by 11.7% (or 0.4%
adjusted).
Particulars
December 2011 Trading Update, p 1.
84.
In respect of Billabong’s 1H12 financial results:
84.1. its reported global sales figure for 1H12 was $847.2 million;
84.2. its reported EBITDA for 1H12 was $74.1 million;
84.3. its reported NPAT for 1H12 was $16.1 million;
84.4. its EBITDA margin for 1H12 was 8.7%.
84.5. of its global sales figure for 1H12:
(a)
approximately 48.8% related to retail sales;
(b)
approximately 51% related to wholesale sales to third parties.
Particulars
1H12 Presentation, pp 2, 3, 5, 18.
Financial Performance in FY12
85.
In respect of Billabong’s FY12 financial results:
85.1. according to Billabong’s Annual Reports for FY12:
(a)
its reported global sales figure for FY12 was $1.55 billion;
(b)
its reported EBITDA for FY12 was $130.4 million;
(c)
its adjusted EBITDA for FY12 was $120.6 million;
(d)
its reported NPAT for FY12 was [a loss of] -$275.6 million;
(e)
its EBITDA margin for FY12 was 8.4%;
(f)
its reported EBITDA margin for FY12 was 7.8%;
29
(g)
its EBITDA margin from wholesale sales for FY12 was 15.8%;
85.2. of its global sales figure for FY12:
(a)
approximately 46% related to retail sales;
(b)
approximately 54% related to wholesale sales to third parties.
Particulars
The Applicant refers to Billabong’s FY12 Financial Results and FY12
Results Presentation published on 27 August 2012 and Annual
Reports for FY12 published on 21 September 2012 (FY12 Annual
Reports).
Billabong’s Likely 1H12 Financial Result
86.
At some time during 1H12 but no later than 19 December 2011, Billabong
was, or ought to have been, aware that its reported EBITDA for 1H12 was
likely to be in the range of $70 to $75 million, a fall of about 20% to 26%
compared with the previous corresponding period (Billabong’s Likely 1H12
Financial Result).
87.
In the circumstances, Billabong’s Likely 1H12 Financial Result was:
87.1. information that a reasonable person would expect to have a material
effect on the price or value of the Securities in Billabong; and
87.2. not generally available.
1H12 Continuous Disclosure Contravention
88.
By reason of the matters set out in paragraphs 5 to 9 and 86 and 87 above,
Billabong was obliged by Rule 3.1 of the ASX Listing Rules and s 674(2) of
the Corporations Act to immediately notify the ASX of Billabong’s Likely 1H12
Financial Result on and from the time when it became aware of it.
89.
Notwithstanding the matters set out in paragraphs 86 to 88 above, Billabong
did not notify the ASX of its Likely 1H12 Financial Result at any time during
the Relevant Period until 19 December 2011.
Particulars
The notification of Billabong’s Likely 1H12 Financial Result was
express and in writing in the December 2011 Trading Update.
90.
By reason of the matters set out in paragraphs 86 to 89 above, Billabong
contravened s 674(2) of the Corporations Act (1H12 Continuous Disclosure
Contravention).
30
FY12 Continuous Disclosure Contravention
91.
Further or alternatively, at all times during the Relevant Period, Billabong
ought to have been aware, for the purposes of ASX Listing Rule 19.12, that:
91.1. its systems were inadequate to enable it to assess and analyse the
financial and operating performance of all parts of its global business,
and hence it had no ability to estimate accurately the likely EBITDA or
EBITDA margins for FY12;
91.2. at the times that it made, confirmed or repeated the 18 February 2011
Representations, the 16 March 2011 Representations, the 19 August
2011 Representations, the 23 September 2011 Representations and
the 25 October 2011 Representations, it did not have a reasonable
basis for making those representations;
91.3. it did not comply with its obligations under section 674(2) of the
Corporations Act,
(individually, collectively, or in any combination, the Material
Information).
Particulars
(a)
The Applicant refers to the statements by Billabong in its
presentation entitled ‘Unlocking Billabong Group’s Value’
published to the ASX on 27 August 2012, at p 30, that the
Billabong Group’s Retail Strategy faced ‘internal challenges’,
including ‘problematic integration’, being ‘not sufficiently
customer centric’, having ‘underinvested in retailing tools (eg IT
systems)’, ‘lacked a network plan’ and ‘lacked scale retail
expertise’.
(b)
The Applicant refers to the statements by Launa Inman, the then
CEO of Billabong, in a conference call with analysts on 27
August 2012, that ‘in our quest to try and increase profitability,
we’ve started to push our own family brands and without
understanding whether that was right for the customer, and
those are things that we are now going to be doing’ (p 10).
(c)
At all material times Billabong’s financial reporting systems did not
operate to give it sufficiently up to date information on its financial
performance and on current market conditions to enable it to have
a more precise view of its likely financial results.
(d)
Further, Billabong’s awareness of the matters set out in
subparagraph 103.2 is to be inferred from the facts that:
(i)
as at 19 August 2011, Billabong was, or ought to have
been, aware of the matters set out in paragraph 70 above;
31
92.
(ii)
as at 23 September 2011, Billabong was, or ought to have
been, aware of the matters set out in paragraph 80 above;
(iii)
as at 25 October 2011, Billabong was, or ought to have
been, aware of the matters set out in paragraph 90 above.
The Material Information was:
92.1. information that a reasonable person would expect to have a material
effect on the price or value of the Securities in Billabong; and
92.2. not generally available.
93.
By reason of the matters set out in paragraphs 5 to 9 and 91 and 92 above,
Billabong was obliged by Rule 3.1 of the ASX Listing Rules and s 674(2) of
the Corporations Act to immediately notify the ASX of the Material Information
on and from 18 February 2011.
94.
Notwithstanding the matters set out in paragraphs 91 to 93 above, Billabong
did not notify the ASX of the Material Information at any time during the
Relevant Period.
95.
By reason of the matters set out in paragraphs 91 to 94 above, Billabong
contravened s 674(2) of the Corporations Act (FY12 Continuous Disclosure
Contravention) throughout the Relevant Period.
Compliance Representation
96.
Further or alternatively, during the Relevant Period, Billabong represented
that:
96.1. it complied with its obligations under the Corporations Act;
96.2. it complied with its obligations under the ASX Listing Rules;
96.3. further or alternatively, it had told or given the ASX all the information
it was required to tell or give under the ASX Listing Rules, which
included ASX Listing Rules 3.1, 4.3A and 15.7;
96.4. further or alternatively, it had undertaken all necessary and reasonable
investigations before making representations as to the state of its
business and accounts and had satisfied itself on reasonable grounds
following those investigations that its public statements were
substantially accurate and not misleading or deceptive in any
respects,
(together, Compliance Representation).
32
Particulars
The Compliance Representation was partly express and partly
implied.
In so far as it was express, it was in writing:
i.
ii.
iii.
in Billabong’s Annual Reports for FY10 published on 24
September 2010 (FY10 Annual Reports), featuring the FY10
Shareholder Review and the Full Financial Report for FY10
(FY10 Full Financial Report), in the form of the following
statements:
a. The Board of Directors is responsible to shareholders for
the performance of the Group and believes that high
standards of corporate governance underpin the
Company’s objective of maximising returns to
shareholders. The Board is committed to the highest level
of governance and endeavours to foster a culture that
rewards ethical standards and corporate integrity (FY10
Shareholder Review, p 26);
b. The Company has an established policy and procedure for
timely disclosure of material information concerning the
Company, including internal reporting procedures (FY10
Full Financial Report, p 35);
c. The Company is committed to ensuring that all
stakeholders and the market are provided with relevant and
accurate information regarding its activities in a timely
manner (FY10 Full Financial Report, p 35).
in the FY11 Annual Reports, featuring the FY11 Shareholder
Review and the FY11 Full Financial Report, in the form of the
following statements:
a. The Board of Directors is responsible to shareholders for
the performance of the Group and believes that high
standards of corporate governance underpin the
Company’s objective of maximising returns to
shareholders. The Board is committed to the highest level
of governance and endeavours to foster a culture that
rewards ethical standards and corporate integrity. To this
end the Group considers it complies with the practices set
out in the ASX Corporate Governance Principles and
Recommendations guidelines. Underpinning the guidelines
are eight principles, including to make timely and balanced
disclosure (FY11 Shareholder Review, p 23);
b. The Company has an established policy and procedure for
timely disclosure of material information concerning the
Company, including internal reporting procedures (FY11
Full Financial Report, p 48);
c. The Company is committed to ensuring that all
stakeholders and the market are provided with relevant and
accurate information regarding its activities in a timely
manner (FY11 Full Financial Report, p 48).
in the FY12 Annual Reports featuring the FY12 Shareholder
Review and the Full Financial Report for FY12 (FY12 Full
Financial Report), in the form of the following statements:
a. The Board of Directors is responsible to shareholders for
the performance of the Group and believes that high
33
standards of corporate governance underpin the
Company’s objective of maximising returns to
shareholders. The Board is committed to the highest level
of governance and endeavours to foster a culture that
rewards ethical standards and corporate integrity. To this
end the Group considers it complies with the practices set
out in the ASX Corporate Governance Principles and
Recommendations guidelines. Underpinning the guidelines
are eight principles, including to make timely and balanced
disclosure (Billabong’s Shareholder Review for FY12
published on 21 September 2012, p 10);
b. The Company has an established policy and procedure for
timely disclosure of material information concerning the
Company, including internal reporting procedures (FY12
Full Financial Report, p 42);
c. The Company is committed to ensuring that all
stakeholders and the market are provided with relevant and
accurate information regarding its activities in a timely
manner (FY12 Full Financial Report, p 42).
iv.
in each of the 1H11 Report, 1H11 Presentation, FY11 Annual
Reports, FY11 Presentation, 1H12 Report, 1H12 Presentation,
FY12 Annual Reports, FY12 Presentation.
In so far as it was implied, it was to be implied as a matter of law,
including by implication from:
97.
i.
the matters set out in paragraphs 5 to 9;
ii.
section 769C of the Corporations Act;
iii.
Billabong’s obligations pursuant to ASX Listing Rules 3.1, 4.3A
and 4.3D and section 674(2) of the Corporations Act;
iv.
Billabong’s practice of releasing company documents to the
market by means of the ASX company announcements
platform;
v.
the fact that Billabong made statements in company
documents released to the market by means of the ASX
company announcements platform and Billabong knew or
ought to have known therefore that investors and potential
investors in Billabong’s Securities may rely upon the
statements and forecasts in those documents in making
decisions whether to acquire or retain Billabong’s Securities (or
an interest therein);
vi.
the absence of any statement by Billabong in the Relevant
Period to the effect that it had not complied with the obligations
referred to in i, ii and iii above.
By reason of the matters set out in paragraphs 88 to 95 above, the
Compliance Representation was not true in that throughout the Relevant
Period, Billabong failed to comply with section 674(2) of the Corporations Act
and ASX Listing Rule 3.1.
34
98.
By reason of the matters set out in paragraphs 96 to 97 above, by making the
Compliance Representation, Billabong engaged in conduct that was
misleading or deceptive or likely to mislead or deceive in contravention of:
98.1. s 1041H of the Corporations Act; and/or
98.2. s 12DA(1) of the ASIC Act.
FY12 Forecast Downgrade
99.
Further, on 19 December 2011, Billabong announced that its reported
EBITDA for FY12 was now forecast to be between $70 million and $75 million
and that it did not expect strong underlying EBITDA growth compared to the
previous corresponding period (FY12 Forecast Downgrade).
Particulars
The FY12 Forecast Downgrade was in writing in a Company
Announcement titled “Trading Update” dated 19 December 2011
which was provided by Billabong to the ASX on that date for
publication on the ASX company announcements platform and was
published by Billabong on its website.
LOSS AND DAMAGE
100.
During the Relevant Period, the Applicant and each of the Group Members
acquired an interest in Securities in Billabong:
100.1. in a market regulated by, inter alia, the ASX Listing Rules and
ss 674(2) and 1041H of the Corporations Act;
100.2. in a market where the price or value of Billabong’s Securities would
reasonably be expected to have been informed or affected by
information disclosed in accordance with the ASX Listing Rules and
ss 674(2) and 1041H of the Corporations Act; and
100.3. in a market to which the representations set out in this Statement of
Claim had been made that a reasonable person would expect to have
a material effect on the price or value of Billabong’s Securities; and/or
100.4. further or alternatively to subparagraph 100.3 above, in a market to
which the material information set out in this Statement of Claim had
not been disclosed and which a reasonable person would expect, had
it been disclosed, would have had a material effect on the price or
value of Billabong’s Securities.
35
Particulars
Particulars of the Applicant’s shareholdings are set out in Annexure A
to this Statement of Claim.
Particulars of the Securities holdings of the Group Members will be
provided following the trial of the common questions.
101.
On 18 August 2011, the closing price of Billabong’s shares was $5.17 per
share.
102.
On 19 August 2011, in the FY11 Preliminary Final Report and the FY11
Presentation, Billabong announced that:
102.1. its EBITDA for FY11 was $191.9m (16.2% below FY10 in constant
currency terms) (FY11 Presentation, pp 4, 20; FY11 Preliminary Final
Report, p 3);
102.2. its NPAT for FY11 was $119.1m (6.9% below FY10 in constant
currency terms) (FY11 Presentation, pp 2, 4, 20, 21; FY11 Preliminary
Final Report, p 3);
102.3. it anticipated strong underlying growth in EBITDA in FY12 (FY11
Presentation, pp 3, 19; FY11 Preliminary Final Report, p 6), replacing
the previous guidance (given on 20 August 2010 and repeated on 18
February 2011) that it expected to return to more historic EPS growth
rates in excess of 10% per annum in constant currency terms,
(together, August 2011 Announcement).
103.
Following the August 2011 Announcement, Billabong’s share price declined
significantly.
Particulars
Billabong’s share price:
(a)
on 19 August 2011, fell to a low of $3.82 per share and closed at
that price.
(b)
on 22 August 2011, fell to a low of $3.46 per share and closed at
$3.53.
(c)
on 23 August 2011, fell to a low of $3.29 per share and closed at
$3.29.
Billabong’s share price history for the Relevant Period is set out in
Annexure B to this Statement of Claim.
104.
On 16 December 2011 the closing price of Billabong’s shares was $3.64 per
share.
36
105.
During 19 December 2011 Billabong announced its FY12 Forecast
Downgrade.
106.
Following the FY12 Forecast Downgrade, Billabong’s share price declined
significantly.
Particulars
Billabong’s share price:
(d)
on 19 December 2011, fell to a low of $2.02 per share and
closed at $2.03 per share;
(e)
on 20 December 2011, fell to a low of $1.70 per share and
closed at $1.77 per share.
Billabong’s share price history for the Relevant Period is set out in
Annexure B to this Statement of Claim.
107.
By reason of the matters set out in paragraphs 100 to 106 above:
107.1.
the making of each or any of the 18 February 2011 Representations;
107.2.
the making
of
the Genuine Basis
for
18 February 2011
Representations;
107.3.
the making of each or any of the 16 March 2011 Representations;
107.4.
the
making
of
the
Genuine
Basis
for
16
March
2011
Representations;
107.5.
the making of each or any of the 19 August 2011 Representations;
107.6.
the making of the Genuine Basis for 19 August 2011 Statements
Representation;
107.7.
the making
of
each or
any of
the
23 September
2011
Representations;
107.8.
the making of the Genuine Basis for 23 September 2011 Statements
Representation;
107.9.
the making of each or any of the 25 October 2011 Representations;
107.10. the making of the Genuine Basis for 25 October 2011 Statements
Representation;
107.11. the 1H12 Continuous Disclosure Contravention;
107.12. the FY12 Continuous Disclosure Contravention; and
107.13. the making of each or any of the Compliance Representations,
37
(individually, collectively or in any combination, the Contravening Conduct)
separately or together or in any combination, caused the market price for
Billabong’s Securities to be materially higher during the Relevant Period than:
107.14. its true price; further or alternatively
107.15. the price that would have prevailed if that Contravening Conduct had
not occurred.
Particulars
That the Contravening Conduct caused Billabong’s share price to be
higher during the Relevant Period than it would have been had it not
occurred is to be inferred from the matters set out in paragraphs 22 to
99 above.
108.
The Applicant and each of the Group Members acquired an interest in
Securities in Billabong during the Relevant Period on the assumption
generally made in the market and on which they were entitled to act that the
price at which they acquired them represented the market price.
Particulars
109.
(1)
Investors in shares on the ASX are generally aware that there
is a complex and comprehensive regulatory regime including,
inter alia, the ASX Listing Rules and ss 674(2) and 1041H of
the Corporations Act, which has as one of its purposes to
ensure that the market is promptly informed of all information
which is relevant to the price at which shares are traded.
(2)
If the Contravening Conduct had not occurred, the Applicant
and the Group Members would either have bought Billabong
Securities at a price which had not been artificially inflated or
they would have acquired securities in another listed entity
instead.
If Billabong had not engaged in the Contravening Conduct, the Applicant and
the Group Members either:
109.1. would have acquired an interest in Securities in Billabong at a lower
price; or
109.2. would have retained or acquired an interest in securities in another
listed entity instead.
Particulars
Particulars of the alternative investments referred to in subparagraph
109.2 will be provided prior to trial.
110.
By reason of the Contravening Conduct, the Applicant and each of the Group
Members have suffered loss and damage.
38
Particulars
The loss suffered by the Applicant and Group Members is the greater
of:
111.
(a)
the difference between the price at which they acquired their
interest in Securities in Billabong during the Relevant Period and
the price at which the Securities would have traded at that time
had the Contravening Conduct not occurred (Price Inflation).
Particulars of the Price Inflation in relation to Billabong’s share
price at the relevant times will be provided following the
provision of expert evidence; or
(b)
alternatively, the difference between the price at which they
acquired an interest in Securities in Billabong during the
Relevant Period and whatever is “left in hand” or was realised
upon a sale of those Securities following 19 August 2011 (the
date of the August 2011 Announcement), or 19 December 2011
(the date of the FY12 Forecast Downgrade), modified to take
into account so much, if any, of the movement in the traded price
of Billabong’s Securities which did not result from the
Contravening Conduct; or
(c)
alternatively, for days during the Relevant Period where the
traded price of Billabong’s Securities fell as a result of the
disclosure of information which had not previously been
disclosed because of the Contravening Conduct, the quantum of
that fall; or
(d)
alternatively, for the Applicant and those Group Members who
would have, but for the Contravening Conduct, retained or
acquired an alternative investment, the difference, at the date of
hearing, between their actual position as a result of having
acquired an interest in Securities in Billabong during the
Relevant Period and the position in which they would have been
had they made that alternative investment.
By reason of the matters set out in paragraphs 100 to 110 above, the
Applicant and each of the Group Members may recover the amount of the
loss and damage suffered by them from Billabong pursuant to s 1041I of the
Corporations Act and s 12GF of the ASIC Act.
112.
Further or alternatively, by reason of the matters set out in paragraphs 100 to
110 above, Billabong is obliged pursuant to s 1317HA of the Corporations Act
to compensate the Applicant and the Group Members for the damage that
resulted from its contravention of s 674(2).
39
AND THE APPLICANT CLAIMS, for itself and on behalf of the Group Members, the
relief set out in the Originating Application.
DATED:
24 March 2015
…………………………….
Signed by Odette McDonald
Lawyer for the Applicant
This pleading was prepared by P W Collinson of Her Majesty’s Counsel and O Bigos
of Counsel.
40
ANNEXURE A – PARTICULARS OF THE APPLICANT’S
SHAREHOLDINGS IN BILLABONG DURING THE RELEVANT PERIOD
The Applicant acquired an interest in Billabong’s shares as outlined in the following
table:
Date of
Number of
Average
Amount
Brokerage
GST on
Amount paid
Purchase
Billabong
price per
paid (not
($)
brokerage
(incl.
shares
share ($)
incl.
($)
brokerage) ($)
brokerage)
($)
11/11/2011
6855
4.35
29,819.25
162.37
18.04
29,999.66
The Applicant disposed of its interest in Billabong shares acquired during the Relevant
Period as outlined in the following table:
Date of
Number of
Average
Trade
Brokerage
GST on
Net proceeds
Sale
Billabong
price per
value (not
($)
brokerage
(incl.
shares
share ($)
incl.
($)
brokerage) ($)
brokerage)
($)
-
-
-
-
41
-
-
-
ANNEXURE B – CHRONOLOGY OF BILLABONG’S SHARE PRICE
HISTORY DURING THE RELEVANT PERIOD
(as provided by the ASX)
Open
($)
High ($)
Low ($)
Close
($)
18 February 2011
8.28
9.07
8.23
8.51
21 February 2011
8.50
8.65
8.40
8.55
22 February 2011
8.59
8.59
8.40
8.47
23 February 2011
8.49
8.57
8.45
8.50
24 February 2011
8.57
8.58
8.40
8.40
25 February 2011
8.40
8.52
8.35
8.50
28 February 2011
8.49
8.52
8.40
8.46
1 March 2011
8.48
8.53
8.43
8.48
2 March 2011
8.32
8.43
8.21
8.30
3 March 2011
8.34
8.44
8.26
8.40
4 March 2011
8.49
8.54
8.41
8.51
7 March 2011
8.41
8.55
8.36
8.50
8 March 2011
8.46
8.53
8.41
8.53
9 March 2011
8.53
8.53
8.31
8.37
10 March 2011
8.40
8.44
8.25
8.32
11 March 2011
8.20
8.24
8.03
8.11
14 March 2011
7.87
8.14
7.85
8.03
15 March 2011
7.75
7.84
7.56
7.77
16 March 2011
7.29
7.61
7.28
7.61
17 March 2011
7.51
7.59
7.27
7.55
18 March 2011
7.72
7.82
7.49
7.82
21 March 2011
7.90
7.90
7.64
7.72
22 March 2011
7.69
7.71
7.54
7.58
23 March 2011
7.60
7.61
7.48
7.51
24 March 2011
7.59
7.68
7.55
7.64
Date
42
Open
($)
High ($)
Low ($)
Close
($)
25 March 2011
7.65
7.74
7.58
7.68
28 March 2011
7.63
7.70
7.56
7.65
29 March 2011
7.61
7.68
7.57
7.65
30 March 2011
7.65
7.65
7.54
7.59
31 March 2011
7.64
7.65
7.55
7.55
1 April 2011
7.55
7.64
7.55
7.55
4 April 2011
7.55
7.60
7.53
7.57
5 April 2011
7.53
7.57
7.50
7.55
6 April 2011
7.56
7.59
7.53
7.56
7 April 2011
7.59
7.59
7.38
7.44
8 April 2011
7.54
7.54
7.43
7.52
11 April 2011
7.48
7.48
7.29
7.30
12 April 2011
7.34
7.37
7.18
7.19
13 April 2011
7.10
7.28
6.87
7.26
14 April 2011
7.25
7.34
7.14
7.29
15 April 2011
7.28
7.34
7.18
7.27
18 April 2011
7.30
7.30
7.13
7.13
19 April 2011
7.08
7.08
6.90
6.99
20 April 2011
7.05
7.07
6.97
7.01
21 April 2011
7.02
7.03
6.79
6.84
27 April 2011
7.00
7.03
6.84
6.84
28 April 2011
6.84
6.91
6.74
6.87
29 April 2011
6.80
6.80
6.65
6.75
2 May 2011
6.75
6.78
6.66
6.73
3 May 2011
6.66
6.83
6.66
6.82
4 May 2011
6.80
6.80
6.66
6.72
5 May 2011
6.72
6.74
6.53
6.61
6 May 2011
6.51
6.68
6.51
6.63
Date
43
Open
($)
High ($)
Low ($)
Close
($)
9 May 2011
6.76
6.87
6.68
6.73
10 May 2011
6.73
6.76
6.65
6.65
11 May 2011
6.65
6.73
6.59
6.68
12 May 2011
6.60
6.79
6.60
6.73
13 May 2011
6.77
6.80
6.55
6.58
16 May 2011
6.51
6.54
6.31
6.35
17 May 2011
6.25
6.35
6.22
6.28
18 May 2011
6.27
6.38
6.24
6.29
19 May 2011
6.31
6.36
6.20
6.26
20 May 2011
6.16
6.27
6.11
6.11
23 May 2011
6.09
6.09
5.95
5.96
24 May 2011
5.91
5.93
5.80
5.87
25 May 2011
5.84
5.92
5.83
5.86
26 May 2011
5.90
6.10
5.88
6.06
27 May 2011
6.15
6.40
6.15
6.37
30 May 2011
6.43
6.56
6.38
6.40
31 May 2011
6.45
6.53
6.29
6.36
1 June 2011
6.49
6.49
6.35
6.42
2 June 2011
6.30
6.37
6.13
6.20
3 June 2011
6.11
6.21
6.04
6.16
6 June 2011
6.15
6.30
6.07
6.08
7 June 2011
6.15
6.17
6.07
6.12
8 June 2011
6.13
6.16
5.98
6.05
9 June 2011
6.03
6.08
5.94
6.08
10 June 2011
6.09
6.24
6.04
6.20
14 June 2011
6.15
6.21
6.02
6.15
15 June 2011
6.16
6.25
6.13
6.22
16 June 2011
6.16
6.17
6.08
6.11
Date
44
Open
($)
High ($)
Low ($)
Close
($)
17 June 2011
6.13
6.26
6.13
6.19
20 June 2011
6.19
6.25
6.08
6.08
21 June 2011
6.16
6.19
6.07
6.09
22 June 2011
6.12
6.20
6.05
6.05
23 June 2011
6.04
6.26
6.01
6.03
24 June 2011
6.00
6.04
5.91
5.97
27 June 2011
5.91
5.94
5.86
5.89
28 June 2011
5.96
5.99
5.85
5.90
29 June 2011
5.99
5.99
5.82
5.86
30 June 2011
5.85
6.04
5.83
6.01
1 July 2011
6.04
6.10
5.90
5.91
4 July 2011
5.93
6.09
5.93
6.02
5 July 2011
6.05
6.07
5.93
5.95
6 July 2011
5.94
6.07
5.89
6.04
7 July 2011
6.07
6.37
6.00
6.24
8 July 2011
6.40
6.42
6.33
6.37
11 July 2011
6.32
6.34
6.22
6.26
12 July 2011
6.27
6.41
6.19
6.26
13 July 2011
6.22
6.32
6.19
6.27
14 July 2011
6.21
6.24
5.98
6.10
15 July 2011
6.02
6.10
6.00
6.01
18 July 2011
5.98
6.03
5.93
6.00
19 July 2011
5.95
5.96
5.86
5.89
20 July 2011
5.92
6.05
5.92
5.98
21 July 2011
6.00
6.02
5.95
6.00
22 July 2011
6.09
6.14
6.05
6.07
25 July 2011
5.91
6.03
5.91
5.98
26 July 2011
6.01
6.07
5.97
6.07
Date
45
Open
($)
High ($)
Low ($)
Close
($)
27 July 2011
6.00
6.10
6.00
6.01
28 July 2011
5.95
6.00
5.91
5.95
29 July 2011
5.95
5.97
5.83
5.89
1 August 2011
5.95
6.01
5.87
5.98
2 August 2011
5.94
5.98
5.76
5.79
3 August 2011
5.62
5.70
5.51
5.59
4 August 2011
5.63
5.69
5.45
5.47
5 August 2011
5.15
5.50
5.12
5.28
8 August 2011
5.10
5.14
4.94
5.06
9 August 2011
4.84
5.14
4.68
5.12
10 August 2011
5.19
5.24
5.04
5.17
11 August 2011
4.96
5.07
4.92
5.02
12 August 2011
5.04
5.11
4.95
5.06
15 August 2011
5.07
5.19
5.06
5.19
16 August 2011
5.18
5.29
5.08
5.16
17 August 2011
5.25
5.33
5.21
5.25
18 August 2011
5.16
5.26
5.15
5.17
19 August 2011
3.85
4.26
3.82
3.82
22 August 2011
3.79
3.83
3.46
3.53
23 August 2011
3.60
3.61
3.28
3.29
24 August 2011
3.43
3.66
3.40
3.63
25 August 2011
3.69
3.69
3.55
3.63
26 August 2011
3.54
3.59
3.37
3.45
29 August 2011
3.48
3.52
3.39
3.45
30 August 2011
3.48
3.56
3.41
3.44
31 August 2011
3.48
3.49
3.38
3.44
1 September 2011
3.45
3.56
3.43
3.53
2 September 2011
3.49
3.50
3.44
3.49
Date
46
Open
($)
High ($)
Low ($)
Close
($)
5 September 2011
3.41
3.44
3.36
3.41
6 September 2011
3.40
3.44
3.34
3.42
7 September 2011
3.48
3.55
3.46
3.50
8 September 2011
3.56
3.62
3.49
3.51
9 September 2011
3.58
3.59
3.51
3.54
12 September 2011
3.50
3.50
3.37
3.37
13 September 2011
3.41
3.47
3.26
3.28
14 September 2011
3.29
3.32
3.16
3.19
15 September 2011
3.22
3.27
3.12
3.17
16 September 2011
3.27
3.30
3.25
3.28
19 September 2011
3.18
3.18
3.01
3.03
20 September 2011
3.02
3.02
2.92
2.95
21 September 2011
2.95
3.05
2.81
3.03
22 September 2011
2.91
3.01
2.91
2.98
23 September 2011
2.91
3.03
2.88
3.00
26 September 2011
3.04
3.11
3.02
3.06
27 September 2011
3.19
3.31
3.16
3.29
28 September 2011
3.33
3.37
3.29
3.32
29 September 2011
3.25
3.35
3.21
3.32
30 September 2011
3.32
3.40
3.28
3.32
3 October 2011
3.34
3.38
3.27
3.30
4 October 2011
3.25
3.39
3.25
3.29
5 October 2011
3.38
3.41
3.29
3.30
6 October 2011
3.36
3.58
3.35
3.50
7 October 2011
3.57
3.67
3.52
3.63
10 October 2011
3.60
3.74
3.58
3.65
11 October 2011
3.74
3.74
3.61
3.72
12 October 2011
3.71
3.81
3.67
3.80
Date
47
Open
($)
High ($)
Low ($)
Close
($)
13 October 2011
3.88
3.98
3.76
3.78
14 October 2011
3.75
3.80
3.68
3.70
17 October 2011
3.68
3.77
3.65
3.68
18 October 2011
3.64
3.64
3.55
3.57
19 October 2011
3.62
3.65
3.56
3.58
20 October 2011
3.59
3.60
3.51
3.52
21 October 2011
3.57
3.62
3.51
3.54
24 October 2011
3.64
3.66
3.58
3.60
25 October 2011
3.62
3.92
3.58
3.91
26 October 2011
3.85
4.48
3.83
4.23
27 October 2011
4.30
4.37
4.26
4.30
28 October 2011
4.36
4.36
4.24
4.29
31 October 2011
4.22
4.30
4.22
4.28
1 November 2011
4.24
4.24
4.12
4.20
2 November 2011
4.15
4.17
4.06
4.13
3 November 2011
4.16
4.22
4.06
4.12
4 November 2011
4.17
4.19
4.12
4.16
7 November 2011
4.15
4.19
4.11
4.12
8 November 2011
4.13
4.33
4.13
4.33
9 November 2011
4.37
4.46
4.33
4.41
10 November 2011
4.24
4.31
4.20
4.30
11 November 2011
4.38
4.39
4.32
4.37
14 November 2011
4.47
4.51
4.45
4.45
15 November 2011
4.45
4.45
4.37
4.40
16 November 2011
4.43
4.43
4.38
4.40
17 November 2011
4.44
4.44
4.38
4.40
18 November 2011
4.35
4.38
4.28
4.33
21 November 2011
4.29
4.34
4.24
4.32
Date
48
Open
($)
High ($)
Low ($)
Close
($)
22 November 2011
4.27
4.27
4.18
4.19
23 November 2011
4.13
4.28
4.13
4.16
24 November 2011
4.10
4.12
3.57
3.64
25 November 2011
3.70
3.72
3.52
3.53
28 November 2011
3.58
3.73
3.58
3.63
29 November 2011
3.67
3.69
3.54
3.66
30 November 2011
3.66
3.69
3.58
3.68
1 December 2011
3.76
3.83
3.70
3.71
2 December 2011
3.77
3.95
3.73
3.86
5 December 2011
3.88
3.98
3.85
3.93
6 December 2011
3.92
3.98
3.86
3.87
7 December 2011
3.89
4.02
3.88
3.99
8 December 2011
3.99
4.05
3.95
4.03
9 December 2011
3.92
3.99
3.91
3.92
12 December 2011
3.99
3.99
3.90
3.94
13 December 2011
3.85
3.89
3.80
3.81
14 December 2011
3.75
3.83
3.73
3.79
15 December 2011
3.79
3.84
3.74
3.84
16 December 2011
3.75
3.75
3.58
3.64
19 December 2011
3.20
3.20
2.02
2.03
20 December 2011
1.80
1.89
1.70
1.77
21 December 2011
1.82
1.97
1.77
1.95
Date
49
Annexure C – DEFINITIONS
1H11 Conference Call is defined in paragraph 27
1H11 Presentation is defined in paragraph 25
1H11 Report is defined in paragraph 25
1H12 Continuous Disclosure Contravention is defined in paragraph 90
16 March 2011 Announcement is defined in the particulars to paragraph 38
16 March 2011 Pre-recorded Call is defined in paragraph 39
16 March 2011 Representations is defined in paragraph 40
18 February 2011 Representations is defined in paragraph 29.2
19 August 2011 Representations is defined in paragraph 52
23 September 2011 Representations is defined in paragraph 62
25 October 2011 Representations is defined in paragraph 72
AGM means Annual General Meeting
August 2011 Announcement is defined in paragraph 102
ASIC Act is the Australian Securities and Investments Commission Act 2001 (Cth)
ASX is defined in paragraph 5.2
ASX Listing Rules means the Listing Rules of the Australian Securities Exchange
Billabong is defined in paragraph 4.1
Billabong Family Brands is defined in paragraph 10.2
Billabong’s Likely 1H12 Financial Result is defined in paragraph 86
Billabong’s Markets is defined in paragraph 10.2
CEO is Chief Executive Officer
CEO’s Address to the 2011 AGM is defined in paragraph 71
CFO is Chief Financial Officer
Compliance Representation is defined in paragraph 96
Contravening Conduct is defined in paragraph 107
Corporations Act is the Corporations Act 2001 (Cth)
50
December 2010 ASX Announcement is defined in the particulars to paragraph 24
December 2011 Trading Update is defined in the particulars to paragraph 67.3
EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation
EGM means Extraordinary General Meeting
FY09 Shareholder Review is defined in paragraph 13.1
FY10 Annual Reports is defined in the particulars to paragraph 96
FY10 Full Financial Report is defined in the particulars to paragraph 96
FY10 Presentation is defined in paragraph 22
FY10 Shareholder Review is defined in paragraph 11
FY11 Annual Reports is defined in paragraph 61
FY11 Conference Call is defined in the particulars to paragraph 50
FY11 Full Financial Report is defined in the particulars to paragraph 21
FY11 Preliminary Final Report is defined in the particulars to paragraph 49
FY11 Presentation is defined in paragraph 49
FY11 Shareholder Review is defined in the particulars to paragraph 15
FY12 Annual Reports is defined in the particulars to paragraph 85.2
FY12 Continuous Disclosure Contravention is defined in paragraph 95
FY12 Double Digit EBITDA Increase Representation is defined in paragraph 52.2
FY12 Forecast Downgrade is defined in paragraph 99
FY12 Full Financial Report is defined in the particulars to paragraph 96
FY12 Improving EBITDA Margins Representation is defined in paragraph 52.3
FY12 Retail Strategy Representation is defined in paragraph 52.4
FY12 Strong EBITDA Growth Representation is defined in paragraph 52.1
Genuine Basis for 16 March 2011 Statements Representation is defined in
paragraph 42
Genuine Basis for 18 February 2011 Statements Representation is defined in
paragraph 31
Genuine Basis for 19 August 2011 Statements Representation is defined in
paragraph 54
51
Genuine Basis for 23 September 2011 Statements Representation is defined in
paragraph 64
Genuine Basis for 25 October 2011 Statements Representation is defined in
paragraph 74
Group Members is defined in paragraph 4
Material Information is defined in paragraph 91.3
NPAT is Net Profit After Tax
O’Neill is Derek O’Neill, the then CEO of Billabong
Price Inflation is defined in the particulars to paragraph 110
Price Query is defined in paragraph 81
Relevant Market Conditions is defined in paragraph 21
Relevant Period is defined in paragraph 4.1
Retail Strategy is defined in paragraph 15
Securities is defined in paragraph 4.1
White is Craig White, the then CFO of Billabong
52
CERTIFICATE OF LAWYER
I, Odette McDonald, certify to the Court that, in relation to the Statement of Claim
filed on behalf of the Applicant, the factual and legal material available to me at
present provides a proper basis for each allegation in the pleading.
Date:
24 March 2015
…………………………….
Signed by Odette McDonald
Lawyer for the Applicant
Filed on behalf of
Prepared by
Law firm
Tel
Email
Address for service
Newstart 123 Pty Ltd, Applicant
Odette McDonald
Slater and Gordon Limited
(03) 9602 6866
Fax
(03) 9600 0290
odette.mcdonald@slatergordon.com.au
Slater and Gordon Limited, 485 La Trobe Street, Melbourne VIC 3001