Bang & Olufsen A/s · OMXCOP:BO
Bang & Olufsen A/s — Q3 2023 Earnings Presentation
22 slides from Bang & Olufsen A/s's earnings presentation, Apr 4, 2023
Slide 1: Q3 2022/23 Webcast presentation
April 2023 Q3 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 1 Key Highlights and Strategy Update 2 Financial Performance in Q3 3 Outlook 4 Q&A
Slide 4: Key Highlights and Strategy Update
Key Highlights and Strategy Update
Slide 5: The quarter was impacted by lower than expected sales in China
The quarter was impacted by lower than expected sales in China Despite headwind, we saw growing customer base and strategic progress Q3 9M Outlook FY 22/23 2022/23 2022/23 unchanged since 17 March • Revenue declined 18% (-20% in local currencies) • Product sales declined by 21.5% (-25% in local -9%
Slide 6: Relatively robust demand in Q3 except for China
Relatively robust demand in Q3 except for China, impacted by surge of COVID-19 infections Regions Product Categories • EMEA (-2%): Company owned stores delivered solid growth of 53% with -2% 0% EMEA Staged growth in all markets - remaining channels were below last year. -4% • Americas (3%): Growth i
Slide 7: Our sharpened strategic direction
Our sharpened strategic direction A proposition of Luxury Timeless Technology will enable us to differentiate further, prioritise investments, and drive growth Luxury Technology Timeless 7|
Slide 8: We are defining our own market
We are defining our own market We operate at the intersection between We are making five directional shifts: consumer electronics and luxury, where we have created and refined our blue ocean 1. Reigniting our brand to become a culturally relevant luxury love brand CONSUMER LUXURY 2. Building a seaml
Slide 9: Q3 strategic highlights
Q3 strategic highlights Product portfolio Wining in Key Global cities Brand awareness A limited collection of the Activation in London and Paris yielded New partnership with Scuderia award-winning Beoplay EX good results and our company owned Ferrari for the 2023 Formula 1 in Lime Green. stores outp
Slide 10: Continued customer base growth and increasing average ownership
Continued customer base growth and increasing average ownership 5% Customer Higher average product ownership Growth* More newsletter subscribers Increased duration of visits at our website 3% Growth in Customers The announcement of Ferrari partnership and launch of EX atelier limited edition drove t
Slide 11: Financial Performance in Q3
Financial Performance in Q3
Slide 12: Revenue heavily impacted by decline in China revenue of 65%
Revenue heavily impacted by decline in China revenue of 65% Regional product revenue DKKm Regional product sales declined 21.5%, -21.5% DKKm heavily impacted by COVID-19 in China -18.1% 702 • In local currencies, revenue declined 25% 20% in LC 632 545 551 • The surge of COVID-19 cases in China impac
Slide 13: Regional product sales impacted by China and cautiousness among partners
Regional product sales impacted by China and cautiousness among partners EMEA Americas Asia EMEA: Down 7% in local currencies DKKm -7.8% DKKm 3.0% DKKm • Excluding sales to Russia and and -46.4% Belarus, revenue declined 4% 362 361 71 73 • Monobrand declined driven by 270 caution with inventory repl
Slide 14: Gross Margin stable despite change in product mix – EBIT bsi impacted
Gross Margin stable despite change in product mix towards lower-margin products – EBIT bsi impacted by revenue decline % Gross margin % EBIT margin bsi* -0.4pp -7.5pp 4.9% 44.9% 0.7% 0.3% 43.9% 44.0% 43.6% -6.8% 19/20 20/21 21/22 22/23 19/20 20/21 21/22 22/23 Q3 Q3 14 | *Before special items
Slide 15: Capacity costs decreased in the quarter
Capacity costs decreased in the quarter Capacity costs Development costs Distribution & marketing costs Administrative expenses DKKm DKKm DKKm DKKm 22.9% -2.9% -1.5% -8.5% 37 86 255 34 35 369 81 33 33 236 225 340 335 70 216 326 69 205 309 64 > 9.0% 9.2% 11.3% 9.4% 13.5% 30.5% 32.2% 33.5% 29.7% 34.0%
Slide 16: Ongoing cost initiatives to secure lean cost base
Ongoing cost initiatives to secure lean cost base while balancing strategic investments Hiring Freeze initiated last year – number of employees reduced by 36 since end of May 2022 Reorganisation end of February 2023 with reduction of 35 employees – DKK 15m provision for redundancies in Q3 Focus on i
Slide 17: Focus on working capital - Inventory reduced and composition improved
Focus on working capital - Inventory reduced and composition has improved Net working capital Inventory Trade receivables Trade payables DKKm DKKm DKKm DKKm 629 624 722 568 702 537 547 648 335 325 335 633 632 499 486 462 581 445 269 422 405 506 397 396 217 327 191 187 6.7% 7.4% 6.2% 11.4% 11.2% 11.4
Slide 18: Positive free cash flow
Positive free cash flow Free cash Flow CAPEX Capital resources DKKm DKKm DKKm Intangible 33 21 Tangible 93 11 1 591 76 19 -14 433 27 58 54 53 12 337 328 -81 43 307 18 17 74 11 26 4 49 46 36 36 32 -190 22 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 21/22 22/23 21/22 22/23 21/22 22/23 • F
Slide 19: Outlook
Outlook
Slide 20: Outlook 2022/23 adjusted 17 March due to lower than expected sales in China
Outlook 2022/23 adjusted 17 March due to lower than expected sales in China Outlook Main assumptions ▪ Improved market conditions in China during Q4, yet a slower pace than Revenue growth initially expected -9% to -3% in local currencies ▪ Launch of three or more product innovations in Q4 ▪ No impac
Slide 21: Summary, the quarter heavily impacted by lower than expected sales in China
Summary, the quarter heavily impacted by lower than expected sales in China Company owned stores outperformed all other channels • 18% decline in revenue, impacted by a 65% revenue decline in China • Strong growth in Brand Partnering • Gross margin level kept despite change in product mix • Positive
Slide 22: Q&A
Q&A