Bang & Olufsen A/s · OMXCOP:BO
Bang & Olufsen A/s — Q1 2024 Earnings Presentation
28 slides from Bang & Olufsen A/s's earnings presentation, Oct 11, 2023
Slide 1: Q1 2023/2024 Webcast presentation
October 2023 Q1 2023/2024 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 Q1 # Outlook # Q&A
Slide 4: Key Highlights and Strategy Update
Key Highlights and Strategy Update
Slide 5: Margins significantly improved, generating a profitable revenue growth of 5% in local currencies
Margins significantly improved, generating a profitable revenue growth of 5% in local currencies Q1 2023/24 Revenue DKK 619m • Revenue grew 1.2% (5% in local currencies), driven by strong EMEA growth of 28% 5% growth in local currencies (LC). Americas grew 13% (LC) while APAC declined 16% (LC). • Br
Slide 6: Sell-out showed robust customer demand in most markets
Sell-out showed robust customer demand in most markets Regions Product Categories Regions • EMEA: Company-owned stores grew, online -3% -4% channels grew. Monobrand and multibrand EMEA Staged declined. 8% • Americas: Growth driven by company-owned stores and eTail. • APAC: Growth driven by monobrand
Slide 7: Our strategic direction
Our strategic direction Luxury Brand Love. Iconic, Heritage & Tradition. Customisation & Bespoke. Consistent Experience. Scarcity & Exclusivity. Pricing Power. Timeless Product icons & Classics. Beautiful timeless design. Modularity. Upgradability & Serviceability. Long Term Investments, Resale Valu
Slide 8: B&O is the unparallel leader in luxury audio & TV
B&O is the unparallel leader in luxury audio & TV We want to expand this blue ocean and capture the market opportunity by executing on our Luxury Timeless Technology proposition Luxury Audio Expansion underpinned by structural drivers Audio specialists Mass market audio players Consumer electronics
Slide 9: We want to leverage this differentiated position in a growing luxury audio market
We want to leverage this differentiated and unparalleled position in a growing luxury audio market B&O Market at 2022 retail value, current market share ~4% 2019-22 2022-28 CAGR Luxury 14% 16% Total Global Total Global Audio & TV market Luxury market Mass & Premium 3% 1% EUR 192 bn EUR 900 bn 232 To
Slide 10: Future industry trends serve as favourable conditions
Future industry trends serve as favourable conditions Positive overall Luxury Solid growth in overall luxury market both in personal and experiential luxury at Market Dynamics +10% CAGR in ’22-’28 mainly led by Gen Z and Millenials Growing share of Number of high-net worth individuals projected to g
Slide 11: Our five strategic shifts – highlights from the quarter
Our five strategic shifts – highlights from the quarter # 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 fu
Slide 12: Financial Performance in Q1
Financial Performance in Q1
Slide 13: Market update China
Market update China • Slow economic recovery in China, despite positive indicators were seen in the spring. • Lower economic growth is expected. • We are not expecting improvement in consumer spending before second half of the fiscal year. • Generally, we see fragmentation in the market where monobr
Slide 14: Revenue growth of 5% in local currencies despite macroeconomic challenges
Revenue growth of 5% in local currencies despite macroeconomic challenges Group revenue Regional product revenue Brand partnering & other activities DKKm DKKm DKKm 4.3% -16.1% 8% in LC -13% in LC 1.2% 754 5% in LC 551 564 542 > 520 105 92 859 84 82 77 635 646 612 619 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 20
Slide 15: Growth in regional product sales driven by EMEA and the Staged category
Growth in regional product sales driven by EMEA and the Staged category EMEA Americas APAC DKKm DKKm DKKm EMEA: Up 28% in local currencies 26.7% 6.4% -20.9% • Double digit revenue growth across 106 channels except for multibrand. 400 248 • Monobrand grew revenue 36%. 333 218 Regions 309 303 73 71 •
Slide 16: Margins significantly improved mainly due to normalisation of component and logistics costs
Margins significantly improved mainly due to normalisation of component and logistics costs % Gross margin % EBIT margin bsi* 16.0pp 16.7pp 2.6% 51.4% 52.6% 1.5% 0.9% 44.4% 43.6% 36.6% -9.1% -14.1% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022/23 2023/24 2022/23 2023/24 *Before special items
Slide 17: Improved gross margin across product categories
Improved gross margin across product categories Gross margin, product categories Brand Partnering and Other % % Staged Flexible Living On-the-go 15.9pp 6.5pp 23.8pp 5.7pp 52.8 54,0 52.4 34.9 87.9 87.8 49.5 49.9 48.1 33.0 47.9 84.8 45.6 82.1 82.8 41.6 38.1 20.3 18.0 11.1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1
Slide 18: Capacity costs on par with Q1 of last year
Capacity costs on par with Q1 of last year Capacity costs Development costs Distribution & marketing costs Administrative costs DKKm DKKm DKKm DKKm 0% -9% 5% -11% 369 86 255 35 335 326 33 33 309 309 81 234 31 216 215 69 205 27 65 63 > 50.5% 43.0% 52.8% 50.5% 49.9% 11.3% 9.4% 13.5% 10.1% 10.2% 33.5%
Slide 19: Focus on working capital - Inventory reduced since Q1 22/23
Focus on working capital - Inventory reduced since Q1 22/23 Net working capital Inventory Trade receivables Trade payables DKKm DKKm DKKm DKKm 445 632 648 624 396 568 565 325 335 311 499 499 341 506 478 327 327 269 403 222 11.2% 11.4% 9.6% 8.1% 11.3% 22% 19% 18% 18% 17% 14% 15% 12% 12% 12% 22% 22% 1
Slide 20: Free cash flow improved DKK 20m year-on-year
Free cash flow improved DKK 20m year-on-year Free cash Flow CAPEX Capital resources DKKm DKKm DKKm Intangible 33 Tangible 27 384 337 328 1 307 310 69 58 14 53 12 43 42 17 11 10 55 -61 46 36 32 32 -81 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022/23 2023/24 22/23 23/24 22/23 23/24 • Q1 free cash
Slide 21: Outlook
Outlook
Slide 22: Outlook 2023/24 maintained, subject to uncertainty
Outlook 2023/24 maintained, subject to uncertainty Outlook Q1 FY 2023/24 2023/24 Main assumptions • Improved market conditions in China in H2 23/24. • Macroeconomic conditions in Europe and US will improve Revenue growth in local currencies 0% to 9% 5% during the fiscal year. • Launch of six or more
Slide 23: Summary
Summary • Despite market challenges, robust sell-out in most markets and revenue growth of 5% in local currencies. • Significantly improved gross margin. • Normalisation of component and logistics costs has lifted the margin level. • Margin improved across regions and product categories, supported b
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Slide 25: APPENDIX
APPENDIX
Slide 26: Improved gross margin across regions
Improved gross margin across regions Gross margin, regions Brand Partnering and other % % EMEA Americas APAC 16.3pp 25.7pp 20.1pp 5.7pp 46.7 47.3 45.5 44.2 87.9 87.8 48.9 84.8 45.0 46.6 82.1 82.8 36.8 36.8 42.5 33.6 31.0 31.0 28.8 19.8 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 22/2
Slide 27: Q1 development since 20/21
Q1 development since 20/21 EMEA Americas APAC DKKm DKKm DKKm 302 303 244 67 218 60 63 Regions 239 169 172 204 33 20/21 21/22 22/23 23/24 20/21 21/22 22/23 23/24 20/21 21/22 22/23 23/24 Q1 Q1 Q1 Staged Flexible Living On-the-go 291 193 182 Product 265 148 categories 213 125 131 144 196 107 79 20/21 2
Slide 28: Investor Relations Contact
INVESTOR RELATIONS CONTACT Cristina Rønde Hefting +45 41 53 73 03 crrh@bang-olufsen.dk