Bang & Olufsen A/s · OMXCOP:BO
Bang & Olufsen A/s — Q2 2023 Earnings Presentation
24 slides from Bang & Olufsen A/s's earnings presentation, Jan 6, 2023
Slide 1: Q2 2022/23 Webcast presentation
January 2023 Q2 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 Q2 3 Outlook 4 Q&A
Slide 4: Key Highlights and Strategy Update
Key Highlights and Strategy Update
Slide 5: 6% growth and a positive EBIT despite macroeconomic headwinds
6% growth and a positive EBIT despite macroeconomic headwinds Q2 H1 Outlook 2022/23 2022/23 FY 2022/23 • Revenue grew 6.3% (2% in local currencies) Revenue 2% -4% -4% to 5% • Product sales declined by 2% in local currencies (-1% in LC** in LC** growth in LC** excluding Russia and Belarus), mainly im
Slide 6: Sell-out impacted by macroeconomics in Europe and lockdowns in China
Sell-out impacted by macroeconomics in Europe and lockdowns in China Good performance from Company-owned stores Regions Product Categories • EMEA: Decline mainly related to -6% -8% EMEA Staged monobrand. Company owned stores, -3% multibrand, and etail grew • Americas: Growth in company owned > 9% -9
Slide 7: Continued focus on core markets and key cities
Continued focus on core markets and key cities Core markets, Europe Core markets, Asia The US City strategy - Sell-out was flat in the six core - Sell-out declined 5% in the two - Solid sell-out performance - Customer segmentation markets core markets completed in Paris and New York - New partner-ow
Slide 8: Continued customer base growth and increasing average ownership
Continued customer base growth and increasing average ownership 13% Customer Higher average product ownership Growth* More newsletter subscribers Increased duration of visits at our website 12% Growth in Customers Launch of Beosound Theatre drove traffic to our website with 2+ Products Owned 8 | * Y
Slide 9: Showcasing our capabilities to create special editions and bespoke solutions
Showcasing our capabilities to create special editions and bespoke solutions Photos courtesy of Lensology Art of A9 Art Basel fair - Celebrated Beoplay A9’s tenth anniversary with the ‘Art of A9’ - Revealed bespoke products created for very high net worth individuals - We commissioned a series of de
Slide 10: Since we launched our turnaround strategy in April 2020, we have delivered positive results
Since we launched our turnaround strategy in April 2020, we have delivered positive results despite a challenging macroeconomic environment IMPROVED REVENUE & IMPROVED GROSS MARGIN AND GROWTH IN CUSTOMER BASE & IN GROWTH ACROSS ALL CATEGORIES EBIT MARGIN BSI* AVERAGE PRODUCT OWNERSHIP Group Revenue,
Slide 11: We are sharpening our direction
We are sharpening our direction A proposition of Luxury Timeless Technology will enable us to differentiate further, prioritise investments, and drive growth Luxury Technology Timeless 11 |
Slide 12: Targeting +200 million Affluent Design & Music Lovers
Targeting +200 million Affluent Design & Music Lovers Cultural • Focus on Gen Z & Young Millennials and agenda VHNWI’s setters GEN Z & VHNWI • Those segments are the trendsetters and YOUNG MILLENIALS defining cultural and luxury agendas and purchases • Becoming their choice, we will also increase ou
Slide 13: We have already started making five directional shifts
We have already started making five directional shifts Culturally relevant Seamlessly connected Magical moments in Winning in key cities Exploring and luxury love brand product portfolio key touch points commercialising new and existing business adjacencies Improve unaided awareness All our products
Slide 14: Financial Performance in Q2
Financial Performance in Q2
Slide 15: 6% higher revenue despite macroeconomic headwinds
6% higher revenue despite macroeconomic headwinds Regional product revenue DKKm Regional product sales increased 1.7%, 1.7% DKKm driven by EMEA and the US 6.3% 742 754 • In local currencies, revenue declined 2% 2% in LC 613 • Leaving Russia and Belarus had a 1pp 556 negative impact on growth 859 • L
Slide 16: Regional product sales impacted by lockdowns
Regional product sales impacted by lockdowns EMEA Americas Asia EMEA: Up 8% in local currencies DKKm 9.1% DKKm DKKm -12.9% • Solid growth from company owned 17.3% stores 284 400 106 • Solid performance in multibrand 367 248 352 91 partly driven by low comparables 312 209 216 and sale of larger quant
Slide 17: Positive EBIT margin despite headwind
Positive EBIT margin despite headwind % Gross margin % EBIT margin bsi* -1.9pp 0.0pp 4.1% 3.5% 44.6% 44.4% 44.4% 1.6% 42.5% -9.9% 19/20 20/21 21/22 22/23 19/20 20/21 21/22 22/23 Q2 Q2 17 | *Before special items
Slide 18: Capacity costs increase driven by marketing activities and development costs
Capacity costs increase driven by marketing activities and development costs Capacity costs Development costs Distribution & marketing costs Administrative expenses DKKm DKKm DKKm DKKm 21% -3% 11% 10% 81 37 255 34 34 35 369 236 33 70 69 231 225 67 332 340 64 205 326 309 > 8.3% 9.0% 9.2% 11.3% 9.4% 2
Slide 19: Focus on working capital | Inventory reduced and composition has improved
Focus on working capital | Inventory reduced and composition has improved Net working capital Inventory Trade receivables Trade payables DKKm DKKm DKKm DKKm 486 629 624 462 722 335 325 335 445 702 568 648 537 547 405 633 632 397 396 581 422 217 187 7.4% 6.2% 11.4% 11.2% 11.4% 14.9% 18.2% 18.1% 21.3%
Slide 20: Free cash flow was positive, despite headwinds
Free cash flow was positive, despite headwinds Free cash Flow CAPEX Capital resources DKKm DKKm DKKm Intangible 614 591 11 Tangible 1 93 -14 76 19 433 337 27 58 307 54 53 -81 12 18 17 74 49 46 -190 36 36 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 22/23 2021/22 2022/23 22/23 • Year-on-year decline
Slide 21: Outlook
Outlook
Slide 22: Outlook 2022/23 maintained
Outlook 2022/23 maintained Expected to be in the lower end of the range Outlook Main assumptions Improved market conditions in China during Q4 Launching three or more product innovations Revenue growth in the remainder of the year -4% to 5% in local currencies Product availability not impacted
Slide 23: Summary, higher revenue and positive EBIT margin despite challenging macroeconomics
Summary, higher revenue and positive EBIT margin despite challenging macroeconomics • 6% growth in revenue, despite lockdowns in China • Strong growth in Brand Partnering • Solid sell-out in Americas. EMEA was adversely impacted by macroeconomic headwind and China by Covid related lockdowns • We con
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