Bang & Olufsen A/s · OMXCOP:BO
Bang & Olufsen A/s — FY 2021/22 and Q4 20 Earnings Presentation
24 slides from Bang & Olufsen A/s's earnings presentation, Jul 7, 2022
Slide 1: Full Year and Q4 2021/22 Webcast presentation
July 2022 FULL YEAR AND Q4 2021/22 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: Double-digit growth and improved profitability despite continued supply chain challenges
Double-digit growth and improved profitability despite continued supply chain challenges FY Q4 Outlook 2021/22 2021/22 FY 2022/23 • • Revenue DKK 2,948m DKK 698m -4% to 5% • 10% growth in local -12% growth in local growth in LC** currencies currencies • • > EBIT margin 1.8% 1.7% -2% to 3% bsi* (EBIT
Slide 6: Solid sell-out growth across regions and product categories
Solid sell-out growth across regions and product categories Product Categories Regions • EMEA: Sell-out driven by most channels 14% 14% and all three product categories, with the Staged EMEA biggest increases in the Staged and On- the-go categories 13% Sell-out growth • • Americas: Improvement espec
Slide 7: The second phase of transformation
The second phase of transformation — A year of building robustness
Slide 8: Improving our profitability and building an attractive workplace
Robust foundation Improving our profitability and building an attractive workplace 220m Supply chain cost absorption Increasing employee engagement 1.8% EBIT margin bsi + 100 New people onboarded to ramp-up capabilities in strategically important areas
Slide 9: Further strengthening of the product portfolio
Model for scale Further strengthening of the product portfolio Five Product Launches Two Important Software Releases Several CMF’s, Collabs, Limited Editions and Bespoke 1. Beolink Multiroom • B&O’s proprietary multiroom system • Milestone release from both an experience and a longevity perspective
Slide 10: Customer growth and demand creation
Model for scale Customer growth and demand creation 31% Improved brand awareness • 3 new brand ambassadors Customer • Partnership with Williams Racing Growth* • 27 million people reached through influencers and celebrities 37% Growth in Customers • Increase in SoMe follower base Improvements to the
Slide 11: Solid sell-out performance in core markets
Pillars of growth Solid sell-out performance in core markets Six European Core Markets Two Asian Core Markets Strategic Partnerships 14% Sell-out growth 5% Sell-out growth 10% Growth (in local currencies) • Reported revenue declined 2% in local currencies, • Sell-out in South Korea up 19%, while Chi
Slide 12: New sustainability strategy with long-term commitments
New sustainability strategy with long-term commitments • Creating long-lasting luxury technology products true to heritage • Reducing environmental impact through circularity and science-based climate action • Action on human rights, diversity, equity & inclusion, and supporting future generations i
Slide 13: Financial Performance in Q4
Financial Performance in Q4
Slide 14: Revenue in Q4 declined due to lockdowns in China and high comparables
Revenue in Q4 declined due to lockdowns in China and high comparables EMEA Americas Asia DKKm DKKm DKKm DKKm Revenue in Q4 down 12% YoY in local -14% LC -34% LC -12% LC 35% LC currencies 377 367 361 91 275 284 • Product sales declined 18% to DKK 600m 270 809 330 85 302 244 • Brand Partnering & other
Slide 15: Sell-out in Q4 impacted by lockdowns in China
Sell-out in Q4 impacted by lockdowns in China Product Categories Regions • EMEA: Sell-out mainly driven by the 12% 8% Staged EMEA Staged and On-the-go categories Americas: Continued strong sell-out 1% • momentum in Americas, with solid double-digit growth in all product categories > -7% 34% Flexible
Slide 16: Continued high impact from supply chain challenges
Product gross margin Continued high impact from supply chain challenges Combined negative YoY impact of 3.5pp from component and logistic costs: 50.0% • Total impact of 9pp on product gross margin or more 46.6% 47.7% than DKK 50m 44.2% 41.8% 41.6% 9.0% • Increase to last year related to spot buys of
Slide 17: Positive EBIT margin despite significant headwind in Q4
Positive EBIT margin despite significant headwind in Q4 % Gross margin EBIT margin bsi* % 7.2pp Staged Flexible Living On-the-go 3.4pp -4.2pp 2.2pp 48.3 44.8 44.4 44.0 46.0 47.5 3.5 45.8 45.3 46.1 46.8 46.9 41.1 43.2 45.3 41.9 8.7pp > 29.9 26.6 1.9 24.2 23.9 1.7 21.2 1.4 0.7 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2
Slide 18: Higher capacity costs reflecting investments in building robustness
Higher capacity costs reflecting investments in building robustness Capacity costs Development costs Distribution & marketing costs Administrative costs DKKm DKKm DKKm DKKm -11% 11% 0% 4% 231 236 225 37 37 78 34 34 72 203 70 31 340 67 183 332 326 64 312 292 > 9.3% 11.7% 8.3% 9.0% 9.2% 26.2% 27.5% 28
Slide 19: Negative Free cash flow impacted by lockdowns in China and spot buys
Negative Free cash flow impacted by lockdowns in China and spot buys Net working capital CAPEX Free cash Flow Available liquidity DKKm % of LTM revenue DKKm DKKm DKKm Intangible 34 608 21 593 335 Tangible 11 93 534 511 76 19 -14 217 63 187 191 187 54 27 301 18 18 74 26 11.4% 4 49 45 36 -190 7.1% 6.7
Slide 20: Outlook
Outlook
Slide 21: Outlook 2022/23 subject to unusually high uncertainty
Outlook 2022/23 subject to unusually high uncertainty Outlook Main assumptions ▪ China expected to be impacted by regional lockdowns in Q1 and partly Q2 ▪ Launching more than six product innovations, which include the re- Revenue growth launch of Beosound Emerge -4% to 5% in local currencies ▪ Impro
Slide 22: Summary, double-digit growth despite headwind
Summary, double-digit growth despite headwind • Solid strategy execution resulted in the second consecutive year with double-digit growth despite headwind • Positive sell-out growth in all regions and across product categories • We continue to see growth in our customer base and in repeat purchases
Slide 23: Q&A
Q&A
Slide 24: Martin Egenhardt
Martin Egenhardt @bang-ol
Bang & Olufsen — FY 2021/22 and Q4 20 Earnings Presentation on 6ix