Bang & Olufsen A/s · OMXCOP:BO
Bang & Olufsen A/s — Q3 2021 Earnings Presentation
20 slides from Bang & Olufsen A/s's earnings presentation, Apr 8, 2021
Slide 1: Q3 Presentation
ST PRESENTATION BANG & OLUFSEN
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 o
Slide 3: Agenda
AGENDA OUTLOOK
Slide 4: Third consecutive quarter of double-digit growth
IRD CONSECUTI EE CASH FLOW E RANGE Strong execution in eight core markets in Europe and Asia Strong performance across all key channels, also positively impacted by the multibrand changes made in H1 Focused and targeted marketing initiatives Continued digital focus Cost reduction programme progressi
Slide 5: Supply challenges and lockdowns
SUPPLY CHALLENGES AND LOCKDOWNS SUPPLY CHALLENGES LOGISTICS LOCKDOWNS * Continued high demand for + Reduced global logistics capacity * During Q3, approx. 40% of monobrand components in consumer electronics stores were temporarily closed and automotive industry * Higher than normal use of air freigh
Slide 6: Strategy execution on track
STRATEGY EXECUTION ON TRACK GET BACK IN BLACK ®) © ® REIGNITE BRAND, BUILD CULTURE & MARKETING & a ecoorstEnt SIMPLIFY WAY OF SALES WORKING STRENGTHEN & DEVELOP STRATEGIC BRAND PARTNERSHIPS BUILD FOUNDATION FOR ACCELERATED GROWTH IN CHINA & SOUTH KOREA FIT FOR FUTURE PRODUCT PORTFOLIO WIN IN TOP SIX
Slide 7: Growth in core markets driven by strategy execution
GROWTH IN CORE MARKETS DRIVEN BY STRATEGY EXECUTION SIX EUROPEAN CORE MARKETS REPORTED GROWTH * Strong sell-out of Staged and Flexible Living + Changed operating model in the multibrand channel drove growth + Multibrand and etail grew by 152% year- on-year + Four out of six core markets faced lock-
Slide 8: On route to deliver planned product launches for 2020/21
ON ROUTE TO DELIVER PLANNED PRODUCT LAUNCHES FOR 2020/21 NEW AND UPGRADED PRODUCTS BEOSOUND LEVEL [— BEOVISION ECLIPSE 65” 2"¢ Gen 4 COLOUR, MATERIAL & FINISH -—— SAINT LAURENT CHINESE NEW YEAR = ° i BANG & OLUFSEN
Slide 9: Positive reviews of Beosound Level
POSITIVE REVIEWS OF BEOSOUND LEVEL bes = Robb Report Q p AUDIO Bang & Olufsen Releases Its Most Bang & Olufsen wants Beautiful And Sustainable Wireless 7 Speaker Ever its new Beosound Level Mark Sparrow Serioe Conia to outlast your average connected speaker With a modular design for repairs and futu
Slide 10: Continuing digital initiatives and marketing campaigns
CONTINUING DIGITAL INITIATIVES AND MARKETING CAMPAIGNS (e) * Increasing the volume of consumer communications {e) through CRM ECOM REVENUE GROWTH * Improving consumer targeting and media effectiveness IN LOCAL CURRENCIES COMPARED TO Q3 LY “Share moments that last“ Holiday season (December) KS "Your
Slide 11: Key highlights and update on strategy
KEY HIGHLIGHTS AND UPDATE ON STRATEGY FINANCIAL PERFORMANCE OUTLOOK Q&A
Slide 12: Third consecutive quarter with double digit growth
THIRD CONSECUTIVE QUARTER WITH DOUBLE DIGIT GROWTH | REVENUE DRIVEN BY SELL-OUT DKKm +16% LC Product sales up by 18%, in local currency: 693 698 ;— SEGMENTS (LOCAL CURRENCY) ——_qy + Product availability adversely affected growth, especially Staged speakers 613 + Double digit growth in all regions, +
Slide 13: Second quarter with positive EBIT, gross margin impacted by costs
SECOND QUARTER WITH POSITIVE EBIT | GROSS MARGIN IMPACTED BY HIGHER COMPONENT AND LOGISTICS COSTS EBIT MARGIN BSI* GROSS MARGIN +4.6pp 7 3 — +1,0pp — [- Staged ‘mt 38.4% 9.3 4.1% a 9 % 44.9% -' 0.3% fa 425% 43.9% 42.8% 44.6% 4/0 SPP ' 46.9% 39.4% ' ° [ Flexible Living Hl -_ 49.0% -0.9pp -9.9% ene H
Slide 14: Capacity costs increased by 4% excluding special items
CAPACITY COSTS INCREASED BY 4% EXCLUDING SPECIAL ITEMS | SUPPORTED BY COST REDUCTION PROGRAMME Rn 7% 68 62 62 Ql @2 G3 G4 al 2. 3 2019/20 2020/21 + Decline related to lower amortisation and higher capitalisation + Incurred development costs were up by DKK 16m related to continued investments in prod
Slide 15: Positive free cash flow and stable net working capital
POSITIVE FREE CASH FLOW AND STABILE NET WORKING CAPITAL DEVELOPMENT Dkkm DkKm —— %ofLTM revenue = DKKm Intangible 139 si Tangible 32. 39 400 3 83 83 55 366 352 H 8 328 = 8 18 18 eee ee 30 62 19.2% 27 oo 16.8% {16.1% 116.196 | 169% N | 24 i " 33} | 37 19 23) 20 -206 Ql @2 @3 a4 al a2 a3 Ql a2 G3 @4 a
Slide 16: Managing working capital through the pandemic
MANAGING WORKING CAPITAL THROUGH THE PANDEMIC DKKm DKKm DKKm CC) % of revenue w/ extended credit 536 585g, 473 492 481 430 og a7 391 430 436 375 488 457 331 413415 390 327 290 a @2 @ @4 @ a2 @ 5%] [7%] [10%] [14%] |1%] [5%] [7% — 2019/20 2020/21 a @2 @ @4 @ a2 @ a @2 @ @4 @ a2 @ 2019/20 2020/21 2019
Slide 17: BANG & OLUFSEN
BANG & OLUFSEN
Slide 18: Outlook 2020/21 | Outlook for free cash flow
OUTLOOK 2020/21 | OUTLOOK FOR FREE CASH FLOW NARROWED IN THE UPPER END OF THE RANGE OUTLOOK MAIN ASSUMPTIONS = Impact of COVID-19 in Q4 will not be materially different from Q3 = Component scarcity will not impact product supply materially different from Q3 Revenue = Licensing income impacted by wor
Slide 19: Summary: the strategy works and yields results despite COVID-19
UMMARY | THE STRATEGY WORKS AND usin ELDS RESULTS DESPITE COVID-19 Te Basics HALLENGES ——— Good progress on strategy execution High growth rates in all core markets with strong performance across all key channels. Multibrand positively impacted by the changes made in H1 Product launches well-receive
Slide 20: Key highlights
KEY HIGHLIGHTS STRATEGY FINANCIAL PERFC Q&A