Bang & Olufsen A/s · OMXCOP:BO
Bang & Olufsen A/s — FY 2022/23 and Q4 20 Earnings Presentation
23 slides from Bang & Olufsen A/s's earnings presentation, Jul 7, 2023
Slide 1: Full Year and Q4 2022/23 Webcast presentation
July 2023 FULL YEAR AND Q4 2022/23 Webcast presentation
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or acquire securities issued by Bang & Olufsen a/s in any jurisdiction, including the United States of America, Canada, Australia, Japan or
Slide 3: Agenda
Agenda # Key Highlights and Strategy Update # Financial Performance in Q4 # Outlook # Q&A
Slide 4: Key Highlights and Strategy Update
Key Highlights and Strategy Update
Slide 5: A challenging year marked by headwinds
A challenging year marked by headwinds FY Q4 Outlook 2022/23 2022/23 FY 2023/24 • Product sales declined 11% in local currencies, mainly driven by Asia. China declined 28% due to lockdowns and a surge in COVID-19 cases. Revenue DKK 2,752m DKK 646m 0% to 9% -8% growth in local -10% growth in local gr
Slide 6: Sell-out: Relatively robust full-year demand except for China
Sell-out: Relatively robust full-year demand except for China Regions Product Categories -1% -1% Regions • EMEA: Company-owned stores grew 41%, multibrand and eTail grew. Monobrand declined. EMEA Staged -2% • Americas: Growth driven by monobrand, company-owned stores and eTail. Asia: Sell-out declin
Slide 7: Our strategic direction
Our strategic direction 7|
Slide 8: Our five strategic shifts – highlights from the year
Our five strategic shifts – highlights from the year # 1 # 2 # 3 # 4 # 5 Culturally Seamlessly connected Magical moments Winning in key Exploring and relevant luxury product portfolio in key touch cities commercialising new love brand bridging our past, points and existing business present and futur
Slide 9: Continued customer base growth and increasing average ownership
Continued customer base growth and increasing average ownership 25% Customer Increased customer base Growth* (Q4: 5%) Higher average product ownership More newsletter subscribers 27% Increased duration of visits at our website Growth in Customers with 2+ Products Owned Key activations, e.g., Ferrari
Slide 10: Our product portfolio was significantly strengthened this year
Our product portfolio was significantly strengthened this year Seven product innovations Introducing Atelier limited Editions Collabs and certifications Proprietary software platforms to enable a seamless product ecosystem 10 |
Slide 11: ESG & Sustainability highlights
ESG & Sustainability highlights Delivering on our product longevity promise • Two products now certified with Cradle to Cradle • All new products innovation prepared certification Climate impact • New long-term emission reduction targets across operations and our value chain. • Aim is to achieve net
Slide 12: Financial Performance in Q4
Financial Performance in Q4
Slide 13: Revenue impacted by slow economic recovery in China and macroeconomic headwinds
Revenue impacted by slow economic recovery in China and macroeconomic headwinds Group revenue Regional product revenue Brand partnering & other activities DKKm DKKm DKKm -5.9% -16.1% -7.5% 754 105 -10% in LC 98 92 600 84 82 551 564 859 520 698 635 646 612 > Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2021/22 2022
Slide 14: Regional product sales impacted by the general market situation
Regional product sales impacted by the general market situation EMEA Americas Asia DKKm DKKm DKKm EMEA: Down 6% in local currencies -6.3% -16.2% -0.6% • Monobrand partners cautious and held 106 248 off replenishing inventories. 400 218 • Company-owned stores grew revenue 330 333 85 309 185 184 10%.
Slide 15: Positive sell-out figures for all product categories in the quarter
Positive sell-out figures for all product categories in the quarter Regions Product Categories Regions • EMEA: Solid growth from company-owned stores 1% 5% 27%, monobrand on par. Digital channels EMEA Staged declined. Staged and Flexible Living grew. On- 7% the-go declined. • Americas: Sell-out decl
Slide 16: Increased gross margin and positive EBIT margin in Q4 despite headwinds
Increased gross margin and positive EBIT margin in Q4 despite headwinds % Gross margin EBIT margin bsi* % Staged Flexible Living On-the-go 3.1pp 7.2pp 2.0pp -5.6pp -0.3pp 51.4% 52.5 51.8 29.9 1.7% 1.6% 48.8 49.5 1.4% 48.3% 47.5 47.4 44.4% 45.3 44.9 43.6% 24.3 36.6% > 37.3 40.4 19.0 16.8 -6.8% 7.9 -1
Slide 17: Capacity costs on par with Q4 of last year
Capacity costs on par with Q4 of last year Capacity costs Development costs Distribution & marketing costs Administrative costs DKKm DKKm DKKm DKKm 2% 4% -27% 0% 37 86 255 35 81 33 33 234 225 216 69 205 27 369 64 65 326 335 326 309 > 9.2% 11.3% 9.4% 13.5% 10.1% 32.2% 33.5% 29.7% 34.0% 36.2% 5.3% 5.7
Slide 18: Focus on working capital - Inventory reduced since Q4 21/22
Focus on working capital - Inventory reduced since Q4 21/22 Net working capital Inventory Trade receivables Trade payables DKKm DKKm DKKm DKKm 632 648 629 445 624 581 565 335 335 568 397 396 325 506 499 499 341 327 269 222 11.4% 11.2% 11.4% 9.6% 8.1% 21% 22% 19% 18% 18% 13% 14% 15% 12% 12% 20% 22% 2
Slide 19: Positive free cash flow for the last three quarters
Positive free cash flow for the last three quarters Free cash Flow CAPEX Capital resources DKKm DKKm DKKm Intangible 33 27 Tangible 1 433 93 384 19 337 328 69 307 58 14 -81 53 12 43 17 74 11 55 46 -190 36 32 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2022/23 22/23 22/23 • Q4 free cash flow positiv
Slide 20: Outlook
Outlook
Slide 21: Outlook 2023/24 subject to uncertainty
Outlook 2023/24 subject to uncertainty Outlook Main assumptions • Improved market conditions in China • Macroeconomic conditions in Europe and US will Revenue growth in local currencies 0% to 9% improve during the year • Launch of six or more product innovations • No impact on product availability d
Slide 22: Summary
Summary • A year marked by macroeconomic headwinds and COVID-19 developments in China. Q4 was impacted by slow economic recovery in China and headwinds in EMEA and Americas. • Relatively robust sell-out, except for China. Improved gross margin in Q4, and a third consecutive quarter with positive cas
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