Page — 1
Interim report
H1 2023/24
Page — 2
Management’s review
Interim report H1 2023/24
We improved our earnings despite a
lower level of revenue compared to Q2
of last year. EBIT margin before special
items increased to 3.0% from 1.6%
supported by a gross margin increase
of 8.7 percentage points to a record-
high 53.1%. For the third quarter in a
row, we reported a gross margin
above 50%.
Financial highlights
Due to the successful launch and sell-in of Beosound
Theatre in Q2 of last year and the planned reduction of
sell-in to multibrand channels this year, negative
revenue growth had been expected for Q2. In addition,
the economic recovery in China was slower than
expected. Despite a decline in revenue, consumer
demand remained stable, and sell-out grew by 2% year-
on-year driven by like-for-like sell-out growth in APAC
of 8%.
Group revenue declined by 18.5% (-16% in local
currencies). EMEA revenue decreased by 14.5% (-15% in
local currencies), while the Americas declined by 31.3%
(-27% in local currencies). The launch of Beosound
Theatre last year and changes in channel distribution
impacted the development across regions. In addition,
markets remained challenged during the quarter.
APAC revenue declined by 15.0% (-10% in local
currencies) compared to Q2 of last year. Revenue from
China decreased by 24.5% (-16% in local currencies).
Our performance in China was impacted by the
economic downturn in addition to changes made to
distribution. Overall inventory levels improved, which
is expected to have a positive impact on revenue in H2
2023/24.
Brand Partnering & other activities decreased by 28.8%
(-27% in local currencies). This was mainly due to
reduced license income as the automotive industry was
impacted by factory strikes in the US. Revenue from
product collabs declined due to the ramp-up of the
Bang & Olufsen Cisco 980 headset in Q2 of last year.
Gross margin increased from 44.4% to 53.1% year-on-
year. Normalised component and logistics costs, price
increases, and a change in product mix towards higher-
margin products primarily drove the increase.
We achieved positive earnings despite the lower
revenue level, and EBIT before special items was DKK
21m (Q2 22/23: DKK 14m), corresponding to an EBIT
margin of 3.0% (Q2 22/23: 1.6%).
Free cash flow improved by DKK 23m to DKK 24m (Q2
22/23: DKK 1m), driven by a change in net working
capital. Available liquidity was DKK 163m (Q2 22/23:
DKK 187m).
Strategic highlights
In Q2, we announced two new products, Beolab 8 and
Beosound Bollard, both intended to enable us to offer a
broader product proposition.
We also continued executing structural changes in our
channel network to promote and improve our branded
channels, and to reduce presence in multibrand and
eTail channels that does not fit well with our luxury
positioning.
Our Win City execution continued across our three
cities, London, Paris, and New York. In November, we
opened our relocated store in New York and in mid-
December we opened our new flagship store in London
on New Bond Street.
Our customer base grew by 5% and the number of
customers owning two or more Bang & Olufsen
products increased by 2% during the quarter.
Outlook 2023/24
We maintain our outlook for 2023/24, however, we now
expect revenue growth and free cash flow to be at the
lower end of the range. Expectation to EBIT margin
before special items is unchanged.
• Revenue growth in local currencies: 0% to 9%
• EBIT margin before special items: 0% to 6%
• Free cash flow: DKK -50m to 100m
For uncertainties and assumptions of the outlook
please refer to page 17.
Q2 highlights
Revenue
DKK million
700
Q2 22/23: 859
Growth in local currencies
-16%
Q2 22/23: 2%
EBIT before special items
DKK million
21
Q2 22/23: 14
Free cash flow
DKK million
24
Q2 22/23: 1
Page — 3
Management’s review
Interim report H1 2023/24
*) Comparative figures for gross margin on segment level have been restated. No change in margin on group level.
For definitions, see note 8.7 to the Annual Report 2022/23.
Key financial highlights
Q2
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Income statement
Revenue
700 859 1,319 1,471 2,752
EMEA
342 400 645 639 1,281
Americas
72 106 139 169 313
APAC
211 248 383 466 795
Brand Partnering & other activities
75
105
152
197
363
EBIT before special items
21 14 37 -71 -105
EBIT
17 13 33 -72 -124
Special items, net
-4 -1 -4 -1 -19
Financial items, net
-12
-11
-17
-29
-28
Profit/loss before tax (EBT)
5 2 16 -101 -152
Profit/loss for the period
8
3
15
-97
-141
Financial position
Total assets
2,279 2,544 2,279 2,544 2,385
Equity
983 1,012 983 1,012 958
Cash
154
189
154
189
216
Available liquidity
163 187 163 187 224
Capital resources
323
307
323
307
384
Net interest-bearing deposit/debt
-33 4 -33 4 19
Net working capital
286 335 286 335 222
Q2
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Cash flows
Cash flows from operating activities
80 54 61 26 198
Operational investments
-56 -53 -98 -106 -218
Free cash flow
24
1
-37
-80
-20
Key figures
Gross margin, total, %
53.1 44.4 52.8 41.2 44.2
EMEA *)
48.5 36.8 48.0 34.8 37.2
Americas *)
42.9 33.6 44.2 28.5 31.6
APAC *)
51.6 45.0 50.2 37.2 40.3
Brand Partnering & other activities *)
87.9 82.6 87.9 82.4 87.9
Growth in local currencies, %
-16 2 -8 -4 -8
EBIT margin before special items, %
3.0 1.6 2.8 -4.8 -3.8
EBIT margin, %
2.4 1.5 2.5 -4.9 -4.5
Return on invested capital, excl. goodwill, %
12.6 -2.7 12.6 -2.7 0.4
Return on equity, %
1.4
-9.9
1.4
-9.9
-14.7
Full-time employee (FTE) at end of period
1,006 1,048 1,006 1,048 996
Stock-related key figures
Earnings per share (EPS), DKK
0.1 0.0 0.1 -0.8 -1.5
Earnings per share, diluted (EPS-D), DKK
0.1 0.0 0.1 -0.8 -1.5
Price/Earnings
148.9 390.3 85.4 -12.0 -9.8
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Management’s review
Interim report H1 2023/24
Like-for-like sell-out grew by 2%,
driven by APAC, whereas EMEA and
Americas declined by 1% and 6%,
respectively.
Revenue decreased by 18.5% (-16% in
local currencies). The development was
seen across regions and mainly driven
by high comparables and the slow
economic recovery in China.
Gross margin increased from 44.4% to
a record 53.1%, attributable to
normalised component and logistics
costs, price increases and improved
margins across regions and categories.
EBIT margin before special items was
3.0%, up from 1.6% driven by the
improved gross margin level.
Free cash flow increased to DKK 24m
(Q2 22/23 DKK 1m) driven by a
positive change in net working capital.
Development in Q2 2023/24
We reported positive sell-out growth of 2%. APAC
reported sell-out growth of 8% driven by growth in
China of 17%. Sell-out growth in the EMEA region was
negative 1% while the Americas had negative sell-out
growth of 6%, both confirming continued consumer
demand relative to the revenue performance.
Group revenue decreased by 18.5% (-16% in local
currencies). The successful launch and sell-in of
Beosound Theatre last year generated high
comparables. In November, we launched our new
speaker Beolab 8, which thus had limited effect in Q2
23/24. Our planned reduction of sell-in to multibrand
channels and overall market challenges impacted the
revenue development across regions.
Revenue for the quarter in the EMEA region declined
by 14.5% (-15% in local currencies) year-on-year. As
expected, the development was impacted by demand
being pulled from Q2 into Q1. The price increases
implemented in September led retail partners to
replenish their inventories and execute project sales in
Q1, primarily in the Staged category.
For the first half of 23/24, reported revenue for the
EMEA region increased by 1% and revenue growth in
our branded channels combined was 9% (company-
owned stores, monobrand and e-commerce).
Our performance in China was impacted by a slower-
than-expected economic recovery. Although one
particular partner’s inventory level remained high,
overall levels improved, which is expected to have a
positive impact on revenue in H2 2023/24.
In line with the strategic transformation, we have
implemented changes to the multibrand and eTail
distribution setup in China. This has improved the
channel network, although impacting revenue in the
short term.
Across regions, we are becoming more selective in
terms of how and where consumers can experience our
brand and products, aiming to ensure they get the full
luxury experience. This meant discontinuing more
multibrand stores, resulting in less overall volume in
the multibrand channel in Q2, especially in Americas.
In November, we opened our relocated company-
owned store on Madison Avenue in New York. The
relocation is a significant upgrade, providing an
improved customer experience at a better location. The
upgrade impacted revenue as the store was closed for a
month during the quarter.
In December, we opened our new company-owned
flagship store in London on New Bond Street. This is
the first store built using our new design concept, and it
complements our three existing company-owned stores
in London.
The gross margin was a record-high 53.1%, which was
8.7pp above last year’s level. In addition to normalised
component and logistics costs, a strong pricing focus
and improved product and channel mix improved the
gross margin.
The gross margin drove the increased EBIT level of DKK
21m.
Free cash flow was DKK 24m, also driven by the change
in net working capital and the improved EBIT.
Like-for-like sell-out
Sell-out grew by 2% compared to the same period last
year. Sell-out for company-owned stores grew 10%.
Management’s review for Q2
LIKE-FOR-LIKE SELL-OUT*
Q2 23/24
Q2 23/24
EMEA
-1%
Staged
-2%
Americas
-6%
Flexible Living
6%
APAC
8%
On-the-go
3%
Total
2%
Total
2%
* Defined as sell-out from the same stores, provided they were open and active in both periods.
Page — 5
Management’s review
Interim report H1 2023/24
Across regions, our Flexible Living category grew by
6%, the On-the-go category grew by 3%, while the
Staged category declined by 2%.
EMEA
Like-for-like sell-out in EMEA declined by 1% year on
year. The company-owned stores delivered double-
digit sell-out growth, driven by growth across markets,
particularly in London and Paris. Monobrand stores
reported a small sell-out decline, while remaining
channels also had negative sell-out growth.
In terms of product categories in EMEA, the Staged
category showed growth, whereas Flexible Living and
the On-the-go category decreased compared to last
year.
Americas
Sell-out in Americas fell by 6%, with monobrand and
company-owned stores declining. Company-owned
stores were impacted by a relocation and the resulting
closure for a month of one of our company-owned
stores in New York. In terms of product categories, our
Flexible Living products delivered growth compared to
Q2 of last year while the On-the-go category
experienced a small decline. The Staged category
decreased driven by a high comparable in Q2 of last
year.
APAC
Like-for-like sell-out in APAC increased by 8% driven
by sell-out growth in China of 17%, albeit against low
comparables due to last year’s restrictions and regional
lockdowns. In addition, improved inventory levels had
a positive effect on sell-out. Flexible Living and On-the-
go delivered growth rates, while the Staged category
declined for the period.
Revenue in Q2
Revenue in Q2 was DKK 700m, an 18.5% year-on-year
decline (-16% in local currencies), which was in the
lower end of our expectations. The development was
driven by all regions.
The drop in reported revenue was related to decline in
product sales of 17.0% (-15% in local currencies) and in
Brand Partnering and other activities of 28.8% (-26% in
local currencies).
Product revenue, regions
The decline in product revenue occurred across regions
and most channels and was to a large extent impacted
by a change of distribution channels and the launch of
Beosound Theatre in the beginning of Q2 of last year.
Our launch of the Beolab 8 speaker in Q2 23/24 came at
the end of the quarter and had limited revenue impact.
EMEA
Revenue in EMEA declined 14.5% (-15% in local
currencies) to DKK 342m.
Company-owned stores and e-commerce delivered
growth, while monobrand declined year-on-year. This
was mainly due to the price increases implemented
1 September pulling some demand from Q2 into Q1. For
the first half of 23/24, revenue from branded channels
increased 9% year-on-year. We continued to optimise
the channel network and the number of Monobrand
stores were reduced by 14 year-on-year.
Revenue from multibrand and eTail decreased
significantly. As part of the strategic transformation,
the number of multibrand stores in EMEA has been
reduced by 125 since Q2 of last year. In addition, we
have limited the assortment available on eTail
platforms.
Revenue split by segment, DKKm
Revenue split by
category, DKKm
400
342
106
72
248
211
105
75
EMEA
Americas
APAC
Brand Partnering & other activities
Q2 2023/24
Q2 2022/23
332
278
143
135
279
212
105
75
Staged
Flexible Living
On-the-go
Brand Partnering & other activities
Q2 2023/24
Q2 2022/23
Monobrand
Multibrand
Custom installations
Points of sale
End Q2 23/24
End Q2 22/23
End Q2 23/24
End Q2 22/23
End Q2 23/24
End Q2 22/23
EMEA
298
312
1.422
1.547
N/A
N/A
Americas
29 28 37 2.225 76 15
APAC
76
79
941
996
N/A
N/A
Total
403
419
2.400
4.768
76
15
Page — 6
Management’s review
Interim report H1 2023/24
Americas
Revenue in Americas was DKK 72m a decline of 31.3% (-
27% in local currencies) year-on-year.
The launch of Beosound Theatre in Q2 of last year
meant high comparables for the company-owned stores
and the Custom installations (CI) channel, and revenue
declined in both channels. In addition, company-
owned stores were impacted by a month-long store
closure. The monobrand channel declined and
performance in California was not satisfactory.
Revenue from the multibrand channel was reduced
significantly. As part of the strategic transformation, we
ended the partnerships with T-Mobile and Verizon in
H1 23/24 and have consequently reduced the channel
by 2,188 doors since Q2 of last year.
APAC
Revenue in APAC was DKK 211m (Q2 22/23: DKK 248m),
corresponding to a 15.0% decline (-10% in local
currencies). Revenue from China decreased by 24.5%
(16% in local currencies) and accounted for
approximately 54% of total APAC revenue.
In APAC, we have changed the eTail network and
multibrand setup, as part of the strategic
transformation. The eTail channel declined during the
period, whereas the multibrand channel reported
growth. Excluding one partner with high inventory
levels, our monobrand channel delivered growth during
the period, reflecting reduced sensitivity in consumer
behaviour in this customer segment.
Brand Partnering & other activities
The 28.8% decline in Brand Partnering & other
activities was mainly due to reduced license income.
This was driven by the automotive industry as factory
strikes in the US challenged car manufacturing, as well
as declining income from HP. In addition, revenue from
co-branded products decreased year-on-year, caused by
the ramp-up of the Bang & Olufsen Cisco 980 headset in
Q2 of last year.
Product revenue, categories
Staged category
Revenue decreased by 16% to DKK 278m. The
development was mainly driven by the successful
launch of Beosound Theatre in Q2 of last year. The
good performance continued on a more normalised
level and Beosound Theatre was the largest contributor
to group revenue for the quarter. Revenue from
speakers increased, driven mainly by the launch of
Beolab 8 at the end of the quarter as well as higher
revenue from Beolab 50.
The overall volume decrease was partly offset by higher
average prices relative to last year.
Flexible Living category
Revenue declined by 5% to DKK 135m. Sales volumes
were generally lower, reflecting a high comparable in
China due to inventory replenishing in Q2 of last year.
The decline was partly offset by increased revenue from
Beosound A5, launched in Q4 and Beosound 2 as well as
higher average selling prices.
On-the-go category
Revenue declined by 24% to DKK 212m. Across speakers
and headphones, the development was mainly driven
by a few large deals on headphones and earphones in
Q2 of last year as part of our efforts to reduce end-of-life
inventory.
Beoplay H95 delivered higher revenue and Beoplay EX
performed well during the quarter, being the biggest
contributor to the category, although it declined year-
on-year following the launch.
In general, the optimisation of the multibrand channel
affected this category negatively for the quarter. The
decrease was partly offset by improved average selling
prices.
Gross profit
Gross profit was DKK 372m (Q2 22/23: DKK 382m),
corresponding to a gross margin of 53.1% against 44.4%
last year. This was equivalent to a year-on-year
improvement of 8.7pp.
Gross profit from regional product sales was DKK 306m
(Q2 22/23: DKK 294m), corresponding to a gross margin
of 48.9% (Q2 22/23: 39.1%). This was an increase of
9.2pp compared to Q2 of last year. The gross margin
improved across regions and product categories.
In general,
cost levels were no longer impacted by
extraordinary component and logistics costs. In Q2 of
last year, such extraordinary costs amounted to around
Q2
YTD
GROSS MARGIN
2023/24
2022/23
2023/24
2022/23
Staged
58.4%
49.4%
56.0%
44.7%
Flexible Living
53.4% 52.3% 51.1% 47.3%
On-the-go
33.6%
20.0%
34.1%
16.1%
Products, total
48.9% 39.1% 48.3% 34.8%
Brand Partnering & other activities
87.9%
82.6%
87.9%
82.4%
Total
53.1%
44.4%
52.8%
41.2%
Comparative figures for gross margin on segment level have been restated. No change in margin on group level.
Page — 7
Management’s review
Interim report H1 2023/24
DKK 54m, corresponding to a negative margin impact
of approx. 6pp.
In addition, the gross margin was favourably impacted
by a change in product mix towards higher margin
products as well as price increases implemented since
last year. An improved channel mix combined with a
strong price focus also supported higher margin levels.
Gross profit from Brand Partnering & other activities
was DKK 66m (Q2 22/23: DKK 88m), equivalent to a
gross margin of 87.9% (Q2 22/23: 82.6%). The increase in
gross margin was mainly due to a lower proportion of
product revenue from our brand collaboration with
Cisco. Last year, we ramped up our partnership with
Cisco to sell the Bang & Olufsen Cisco 980 headset for
hybrid work.
Currency movements had immaterial impact on the
gross margin compared to last year.
Capacity costs
Capacity costs were DKK 355m (Q2 22/23: DKK 369m)
corresponding to a decrease of 3.8%.
Development costs decreased by DKK 10m to DKK 71m
(Q2 22/23: DKK 81m). This was driven by lower incurred
costs in combination with a higher capitalisation ratio
compared to Q2 of last year.
Distribution and marketing costs decreased by DKK 9m
to DKK 246m (Q2 22/23: DKK 255m). The decrease was
driven by the launch of Beosound Theatre last year and
reduced warranty costs. The marketing cost ratio was
10.6% in Q2 compared to 9.5% in Q2 of last year. The
increase was driven by the relatively lower revenue.
Administrative expenses increased by DKK 5m to DKK
38m (Q2 22/23: DKK 33m) driven by higher costs for
patent protection and amortisation related to IT
projects.
EBIT
EBIT was DKK 17m (Q2 22/23: DKK 13m). This was
equivalent to an EBIT margin of 2.4% (Q2 22/23: 1.5%).
The EBIT margin improvement was related to the
improved gross margin.
The EBIT margin before special items was 3.0% (Q2
22/23: 1.6%). Special items were DKK 4m (Q2 22/23: DKK
1m) related to a re-organisation, primarily in EMEA.
Financial items
Net financial items amounted to an expense of DKK
12m versus an expense of DKK 11m last year. The
increase was driven by higher interest rate levels.
Profit/loss
The profit before tax was DKK 5m (Q2 22/23: DKK 2) and
tax was an income of DKK 3m (Q2 22/23: income of DKK
1m).
The profit for the period was DKK 8m (Q2 22/23: DKK
3m).
Cash flows
Free cash flow for the quarter was DKK 24m compared
to DKK 1m last year. The year-on-year improvement
was related to higher cash flows from operating
activities (DKK 26m).
The improvement in cash flows from operating
activities was mainly related to a positive EBITDA of
DKK 78m (Q2 22/23: DKK 67m) and a positive change in
net working capital of DKK 25m (Q2 22/23: negative
change of DKK 10m) offset by income taxes paid.
Cash flows from operational investments totalled an
outflow of DKK 56m and were in line with last year (Q2
22/23: DKK 53m).
Cash flows from financing activities were an outflow of
DKK 12m (Q2 22/23: inflow of DKK 65m). The cash
inflow last year was related to net repo transactions of
DKK 78m.
The positive free cash flow improved the cash position
which amounted to DKK 154m at the end of the quarter
(31 August 2023: DKK 141m). Total available liquidity
was DKK 163m (31 August 2023: DKK 150m), made up of
cash DKK 154m, securities DKK 391m less DKK 382m in
bank loans related to repo transactions.
Our combined capital resources (our available liquidity
and the undrawn part of our ESG-linked credit facility)
amounted to DKK 323m (31 August 2023: DKK 310m).
Net working capital
Net working capital decreased by DKK 25m during the
quarter to DKK 286m (31 August 2023: DKK 311m).
Net working capital to the last 12 months’ revenue was
11.0% in line with last year (Q2 22/23: 11.4%).
Inventories declined by DKK 18m during the quarter,
driven by high activity and a focus on inventory
management.
Trade receivables increased by DKK 38m to DKK 365m.
The increase was driven by higher sales in Q2 compared
to Q1. Sales with extended credit accounted for 2% of
revenue in the quarter (Q1 23/24: 1%).
Trade payables increased by DKK 48m to DKK 451m,
mainly related to the timing of payments.
Other liabilities decreased by DKK 8m to DKK 160m
during the quarter, primarily related to employee
related liabilities. Other receivables decreased by DKK
7m to DKK 46m, mainly related to other short-term
loans and VAT.
Page — 8
Management’s review
Interim report H1 2023/24
Net interest-bearing deposit/debt
Net interest-bearing debt amounted to DKK 33m,
compared to net interest-bearing deposits of DKK 19m
at year-end, 31 May 2023. The decrease was mainly due
to the negative free cash flow of DKK 37m for H1 and
repayment of lease liabilities. For further details, see
note 7.
Financial performance H1 2023/24
Revenue amounted to DKK 1,319m (H1 22/23: DKK
1,471m). Revenue declined by 8% in local currencies.
EMEA revenue grew 1% compared to H1 of last year,
driven by increased revenue in branded channels
(company-owned stores, monobrand and e-commerce)
of 9%. Americas and APAC reported negative growth.
Revenue in the Staged category grew by 4.5%,
supported by the good performance of Beosound
Theatre following the launch in Q2 of last year. Revenue
growth from Beolab speakers was driven by the launch
of Beolab 8 at end of Q2 23/24 and good performance in
the Beolab 50 sales volume.
The Flexible Living category decreased by 9.5%. This
was mainly due to certain retail partners in APAC
replenishing inventories in H1 of last year.
The On-the-go category declined by 22.8% driven by a
few larger deals made in H1 of last year to reduce end-
of-life inventories. In general, optimisation of the
multibrand channel had a negative impact on this
category.
The revenue from Brand Partnering & other activities
decreased year-on-year due to declining income from
HP and reduced income from the Cisco collaboration
due to the ramp up in H1 of last year.
Gross margin was 52.8% (H1 22/23: 41.2%), equivalent to
a year-on-year increase of 11.6pp.
In general, cost levels were no longer impacted by
extraordinary component and logistics costs. In H1 of
last year, such extraordinary costs amounted to around
DKK 120m, corresponding to a negative margin impact
of approx. 8pp.
In addition, the gross margin was favourably impacted
by a change in product mix towards higher margin
products as well as price increases implemented since
last year. An improved channel mix combined with a
strong price focus supported higher margin levels.
Currency movements had immaterial effect on the
gross margin compared to last year.
Capacity costs amounted to DKK 664m (H1 22/23: DKK
678m). The decrease was driven by lower development
costs, while distribution and marketing costs along with
administrative costs were in line with last year.
EBIT was DKK 33m (H1 22/23: DKK -72m), equivalent to
a margin of 2.5% (H1 22/23: -4.9%). The increase was
driven by the higher gross profit and lower capacity
costs.
EBIT before special items was DKK 37m (H1 22/23: DKK
-71m) with a margin of 2.8% (H1 22/23: -4.8%).
Special items were DKK 4m (H1 22/23: DKK 1m) and
primarily related to a re-organisation in EMEA.
Free cash flow was DKK -37m (H1 22/23: DKK -80m),
primarily driven by higher EBITDA of DKK 152m (H1
22/23: DKK 35m) offset by a negative change in net
working capital of DKK 64m (H1 22/23: DKK 0m).
Combined capital resources (our available liquidity and
the undrawn part of our ESG-linked credit facility)
amounted to DKK 323m (31 May 2023: DKK 384m). The
development was driven by the change in free cash
flow.
Page — 9
Management’s review
Interim report H1 2023/24
Strengthening our position in the luxury audio and
TV market
With an ambition to lead and expand the growing
market of luxury audio and TV, our strategy progress in
Q2 aimed at strengthening our luxury position and
continuing to build robustness in our company.
Our H1 2023/24 results reflect the implementation of
our Luxury Timeless Technology proposition. We have
made strategic choices that, while impacting our
revenue growth, has supported profitability and
earnings and solidified our luxury brand position. We
are mindful of striking a balance between strategic
decisions made for the longer term and their
commercial consequences in the short term.
Q2 strategy execution
Throughout the quarter we executed key priorities
across our five strategic shifts.
1.Reigniting our brand to become a culturally relevant
luxury love brand
In Q2, our branding efforts centred on activating our
partnership with Ferrari through multiple activations
promoting our Ferrari product collections launched in
Q1 as well as our Scuderia Ferrari sponsorship for the
Formula 1 2023 season. The Scuderia Ferrari
sponsorship continues to help us build brand reach and
awareness. Since the beginning of our sponsorship, we
have reached more than 44 million people (excluding
TV viewers and F1 computer game players), we have
generated 500,000 engaged website sessions, and
generated more than 5,400 social mentions. Our Ferrari
product collection has helped us build brand equity
with Ferrari fans, our local monobrand partners have
hosted exclusive customer events with more than 2,700
reported attendees globally. We continue to activate our
partnership across markets and to monitor the impact
on our brand reach, awareness, and conversion.
In Q2, we continued to improve on two important
targets. We onboarded 5% new customers and we grew
the number of customers owning two or more products
by 2%. The numbers show that we continue to attract
customers and to expand our business and loyalty with
existing customers.
2. Building a seamlessly connected product portfolio,
bridging our past, present and future
Early in the quarter, we announced two new product
propositions, both intended to ensure we offer a
broader product proposition covering the most
important use cases of our customers’ sound and tv
ecosystems.
Our new Beolab 8 speakers offers flexibility,
performance and innovation that meets our customers’
demands. That is, for products that serve multiple
purposes, products that can be customised to each
customer preference and long-lasting products with the
best sound performance and listening experiences.
Beolab 8 can be used as a system speaker to create an
immersive home cinema set-up with the compact size
of a rear speaker, and the stunning design of a front
speaker, and it can be used as a powerful stand-alone
speaker. Also, it can be installed onto walls, set upon
floors, secured onto ceilings, or placed on top of any flat
surface.
In addition, it is a beauty designed to stand the test of
time, which is a key customer requirement, and a core
value in our product design and portfolio. Like any
other Bang & Olufsen speaker, it is made of high-quality
materials that age gracefully, it can be upgraded over
time, has long-term serviceability and a replaceable
streaming module which ensures it can adapt to the
latest technology standards. The speaker is designed
using cradle-to-cradle principles and is pending
complete certification.
The second new product proposition announced in Q2
was the Beosound Bollard, our first outdoor speaker
developed in collaboration with Origin Acoustics. With
Beosound Bollard, we deliver a seamless Bang &
Olufsen experience outdoors without comprising
quality in the listening experience. This is the first time
that 98 years of audio innovation can be fully enjoyed
outside through a custom install solution. By using
Beosound Core, our connectivity hub, customers can
connect multiple Beosound Bollard speakers catering
for both small and large outdoor spaces, and it can be
fully integrated with indoor speaker systems enabling
multiroom connectivity through Beolink, Airplay or
Chromecast.
This is an important proposition and a milestone
reached, in our ambition to offer a seamlessly
connected product ecosystem. Our new outdoor
speaker retails from January 2024 in selected Bang &
Olufsen stores and through our Custom Installation
partner, Origin Acoustics.
In Q2, we also introduced the beta-version of a new,
more intuitive, and user-friendly app interface. This
improves our overall control functionality, and our
multiroom app features. The improved control
functionality ensures consistent experiences across all
Bang & Olufsen products irrespective of age, and it
enhances ease of use. The improved multiroom app
features make functionality more interactive, easily
accessible, and innovative to use. Our new app
interface will be released in its final version in early
2024 and will continue to evolve during the year.
3. Creating magical moments in connected touch points
In Q2, we prepared the launch of our first brand
flagship store in London, featuring a new pilot store
concept that redefines our signature shopping
experience. The concept builds on cultural relevance
and applies principles of modern luxury, catering to
four awareness levels: Culture, Sustainability, Human
Centricity, and Design. Designed for iconic spaces and
ultimate experiences, it includes “decompression
zones” to take the speed out of customers for immersive
and tailored interactions. It also offers a “sensorium” to
stimulate senses and evoke emotions, along with a
designated Bespoke and private event area for private,
personalised customer events.
Strategic highlights Q2 2023/24
Page — 10
Management’s review
Interim report H1 2023/24
Our new flagship store stands as the first of its kind
with this store concept, and in the months to come, we
plan to learn from it, and have a roadmap in place for
the rollout of the store concept across our existing
network, both with partners and in our company-
owned stores.
we continued executing structural changes in our
channel network to promote and improve our branded
channels, and to reduce presence in multibrand and
etail environments that does not fit well with our luxury
positioning. While the multibrand and etail channels
are important for reach, we will also work with our
continuing partners to ensure good customer
experiences, and we will work more concertedly with a
selective product assortment with the aim of driving
scarcity and desirability for our products.
4. Winning in key, global cities
Our Win City execution continued across our three
cities, London, Paris, and New York.
In London, Q2 sell-out growth reached 13%. Overall,
sell-out continued to be negatively impacted by our
company-owned store in Bicester Village. Our two other
stores in Harrods and Selfridges respectively delivered
strong growth and had the best reported quarter ever.
Focus in London for the quarter was the opening of our
flagship store in New Bond Street. The formal opening
of our store in mid-December marked an important
strategy milestone. With a location second to none in
London’s iconic Bond Street, widely considered to be
the home of luxury shopping in London, our new store
is expected both to drive sales and drive-up brand
awareness and luxury brand equity.
In Paris, sell-out growth was 2%. Our company-owned
store reported high double-digit sell-out growth while
our monobrand network was significantly challenged.
Overall, performance in Win Paris was not satisfactory,
and a management change is planned.
During the quarter we executed on several brand
awareness initiatives. To name a few, a pop-up store on
Rue des Martyrs and our participation at Paris Design
Week both created brand awareness of our long-lasting
products and cradle to cradle ambitions.
In New York, sell-out declined by 10%. The quarter was
impacted by one of our two company-owned stores
being closed for a third of the quarter while being
relocated. Sell-out in our Soho store grew double-digit,
and we continued to execute in-store activations
particularly targeting our Ferrari product collaboration
and our Beolab 8 product launch as well as various
cultural events anchored in music. Examples include a
private jazz concert by Niels Lan Doky. This kind of
cultural relevance helps us build affinity to and
advocacy for the brand, and we have established a
growing base of loyal fans activating their
communities, helping us gain qualified reach.
In November, we relocated our store at Madison
Avenue. With its new presence in the city’s premier
shopping district, our new store gives customers a
welcoming space to experience and shop our full
portfolio as well as our bespoke offering. With its short
proximity to Lexington Avenue’s New York Design
Center, we aim to position our brand and new store
experiences towards architects and interior designers as
well as to our target audience of Design & Music Lovers.
In the second half of the fiscal year, we aim to
commence another Win City project, in our APAC
region. With significant wealth, a high density of Very
High Net Worth Individual residents and a history of
being Asia’s most prominent luxury destination, we
plan to work more diligently with our presence and
activations in Hong Kong. Our current three company-
owned stores in Hong Kong will serve as the foundation
for reaching our Hong Kong-based target audience, and
our development efforts will initiate over the course of
the second half of the fiscal year.
5. Exploring existing and new adjacent opportunities
In Q2 we extended our Cisco partnership through the
unveiling of new true wireless earphones built with
enterprise-grade features, customised for professionals
on the go. The new Cisco enterprise proposition
addresses increased customer expectations for
multifunctional devices that fit their lifestyle in and out
of work. It positions Bang & Olufsen as a brand that
caters to most customer needs while also tapping into
the strong reach of Cisco’s product adoption.
As part of our strategy to strengthen our Luxury
Timeless Technology proposition, we engage in
strategic partnerships and brand collaborations to
support growth, brand awareness, and customer
acquisition.
With the expiration of the HP partnership in June 2024,
we are pursuing new partnership opportunities, which
reinforce one or more of our Luxury Timeless
Technology pillars, and further expand the proposition
of our current brand partnering and licensing model.
This will be realised through proprietary software-
enabled audio experiences and by leveraging our design
and craftsmanship offering.
Our H1 strategy progress transitions the company to a
better place. With more clear positioning, more robust
margins, and continued execution of key strategic
milestones.
Page — 11
Management’s review
Interim report H1 2023/24
Like-for-like sell-out
Like-for-like sell-out declined by 1%. Company-owned
stores delivered double-digit growth across markets,
particularly in London and Paris. In London, two
company-owned stores reported their best quarter ever.
Like-for-like sell-out in monobrand stores decreased
slightly and varied significantly across countries. UK
had positive sell-out growth while performance in Paris
was not satisfactory, and a management change is
planned.
Like-for-like sell -out in e-commerce, multibrand and
eTail decreased compared to Q2 of last year.
For the Staged category, sell-out grew, while the On-
the-go products and the Flexible Living category
declined.
Revenue
Revenue was DKK 342m (Q2 22/23: DKK 400m),
equivalent to a decrease of 14.5% (-15% in local
currencies).
Revenue from company-owned stores grew double-
digit year-on-year while e-commerce also generated
growth. The monobrand channel declined.
Price increases implemented on selected products of
the portfolio at end of Q1 made retail partners replenish
inventories and execute project sales. Consequently,
some demand was pulled from Q2 into Q1, impacting
revenue in the monobrand channel, in particular. For
the first half of 23/24, revenue in branded channels
(company-owned, monobrand and e-commerce) grew
by 9%.
Revenue from multibrand as well as eTail decreased
double-digit for the period. In line with the strategic
transformation, the number of multibrand stores were
reduced by 125 since end of Q2 last year. In addition, the
assortment in the eTail channel was reduced. Further, a
large quantity of end-of-life headphones was sold to a
multibrand partner in Q2 of last year.
Total revenue from our Staged category decreased by
14%. TV’s and Soundbars declined, driven by the
Beosound Theatre launch in Q2 of last year. Beolab
speakers generated growth mainly driven by the launch
of Beolab 8. In the first half of 23/24 revenue from the
Staged category grew by 10% mainly driven by
Beosound Theatre.
Revenue from the Flexible Living category grew by 12%.
Growth was primarily driven by the launch of Beosound
A5 in April 2023 and growth in Beosound 2.
Revenue from the On-the-go category declined by 27%.
The development was mainly related to the previously
mentioned sale of headphones to a multibrand partner
last year. Beoplay H95 generated growth in the period
while Beoplay EX declined compared to a strong
quarter last year after the Q1 22/23 launch.
Gross profit
Gross profit amounted to DKK 166m (Q2 22/23: DKK
148m), corresponding to a gross margin of 48.5% (Q2
22/23: 36.8%). The underlying margin level was
positively impacted by a change in product mix towards
higher margin products as well as price increases. All
product categories reported improved gross margins
during the period, in particular the Staged and the On-
the-go category.
H1 2023/24
Revenue was DKK 645m (H1 22/23: DKK 639m). This
represented an increase of 1% (1% in local currencies).
The increase was primarily driven by the Staged and
Flexible Living categories, while On-the-go declined.
Gross margin increased by 13.2pp to 48.0%, primarily
driven by a change in product mix towards higher
margin products as well as increased gross margins in
all product categories.
EMEA
Q2 revenue split (%)
60%
55%
16%
14%
24%
31%
23/24 22/23
Staged Flexible Living On-the-go
Q2
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
342 400 -58 645 639 6
Growth in local currencies
-15%
8%
1%
20%
Gross profit
166 148 18 310 222 88
Gross margin
48.5%
36.8%
11.7pp
48.0%
34.8%
13.2pp
Page — 12
Management’s review
Interim report H1 2023/24
Like-for-like sell-out
Like-for like sell-out growth was negative at 6%.
Negative growth was seen across all channels except for
e-commerce, which showed solid sell-out growth. Our
company-owned stores reported negative growth due to
the relocation of our Madison store, which was closed
for a month. Our SoHo store reported double-digit sell-
out growth during the quarter.
In addition, sell-out was impacted by high comparables
in the Staged category. The Staged and On-the-go
category reported negative growth year-on-year while
the Flexible Living category had sell-out growth.
Revenue
Revenue was DKK 72m (Q2 22/23: DKK 106m),
equivalent to a decrease of 31.3% (-27% in local
currencies).
The decline showed across channels. In general, the
revenue development was impacted by the launch of
Beosound Theatre in Q2 of last year.
Revenue from company-owned stores declined in the
low double-digits mainly due to the one-month closure
of our Madison store in New York during relocation.
Revenue from monobrand fell by nearly 50% and the
performance in California was not satisfactory.
The multibrand channel declined significantly. As part
of the strategic transformation, the partnership with
Verizon ended and consequently the multibrand
channel was reduced by more than 1,400 stores during
Q2 23/24. Compared to last year, doors were reduced by
2,188, as we ended our partnership with T-mobile
during Q1 23/24.
Revenue from the Staged category decreased by 43%.
The decrease showed across TVs and speakers,
although mainly driven by the launch of Beosound
Theatre in Q2 of last year. The decline was partly offset
by higher average selling prices.
Revenue from the Flexible Living category decreased by
5% compared to last year. The decline was partly offset
by good performance from the launch of Beosound A5
and higher average selling prices.
Revenue from On-the-go declined by 26% compared to
last year. The development was driven by earphones
due to the sale of a large quantity of end-of-life
earphones to a B2B partner last year.
Gross profit
Gross profit amounted to DKK 32m (Q2 22/23: DKK
35m). This was equivalent to a gross margin of 42.9%
(Q2 22/23: 33.6%). The underlying margin level was
positively impacted by a change in product mix towards
higher margin products as well as price increases year-
on-year. All product categories delivered improved
gross margins.
In addition, the sale of a large quantity of earphones to
a partner in the US reduced the On-the go margin in Q2
of last year.
H1 2023/24
Revenue was DKK 139m (H1 22/23: DKK 169m),
equivalent to a year-on-year decrease of 17.2% (-18% in
local currencies). The decline was primarily driven by
Flexible Living and On-the-go categories, partly offset
by growth in the Staged category. Gross margin
increased by 15.7pp to 44.2%, driven by improved
margins across categories as well as positive change in
product mix.
Americas
Q2 revenue split (%)
31%
31%
23%
17%
46%
52%
23/24 22/23
Staged Flexible Living On-the-go
Q2
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
72 106 -34 139 169 -30
Growth in local currencies
-27%
0%
-13%
-4%
Gross profit
32 35 -3 62 48 14
Gross margin
42.9%
33.6%
9.3pp
44.2%
28.5%
15.7pp
Page — 13
Management’s review
Interim report H1 2023/24
Like-for-like sell-out
Like-for-like sell-out grew 8%, mainly driven by China
with a sell-out growth of 17%. Sell-out growth in China
was across product categories and channels, albeit
generated from a low comparable due to restrictions
and regional lockdowns last year.
While we are seeing inventory levels improve, one retail
partner has built up an excessive inventory, which
impacts the sell-in and sell-out balance.
Japan had negative single-digit sell-out growth driven
by eTail whereas monobrand reported double-digit
growth for the period. South Korea was on par with last
year. South Korea continued to be impacted by excess
inventories related to the restrictions and regional
lockdowns last year.
Revenue
Revenue was DKK 211m (Q2 22/23: DKK 248m),
corresponding to a 15.0% decline (-10% in local
currencies).
Revenue from our Chinese market decreased by 24.5%
(-16% in local currencies) and accounted for
approximately 54% of total revenue in APAC. Revenue
from South Korea was on par compared to last year.
As part of our strategic transformation in China we
have made a structural change in the eTail network and
multibrand setup, changing partners and reducing the
number of stores. In addition, the eTail platforms saw
reduced traffic, and revenue from the eTail channel was
down by nearly 50%. By contrast, the multibrand
channel reported double digit growth.
Revenue from our monobrand channel declined
slightly. Excluding one particular partner with a large
inventory, revenue from the monobrand channel grew
during the period. We continue to see fragmentation in
the market, as monobrand customers are showing less
sensitivity towards the current economic downturn
than customers in the online channels.
Revenue from the Staged category declined by 14%. The
development was mainly driven by the impact from the
launch of Beosound Theatre in Q2 of last year, partly
offset by the launch of Beolab 8 at the end of Q2 23/24.
The Flexible Living category declined by 17%, mainly
driven by a high comparable as some partners
replenished their inventories during the regional
lockdowns in China. We saw positive contributions
from Beosound 2 and the launch of Beosound A5 in
April 2023.
The On-the-go category decreased by 20%. Headphones
delivered growth, whereas Bluetooth speakers and
earphones declined during the period. Beoplay EX
performed well for the quarter, but still decreased
compared to a strong quarter last year following the
launch.
Gross profit
Gross profit amounted to DKK 108m (Q2 22/23: DKK
111m), equivalent to a gross margin of 51.6% (Q2 22/23:
45.0%).
The increase was driven by improved margins across
categories as well as a change in the product mix
towards higher margin products. The margins were also
supported by price increases implemented since last
year.
H1 2023/24
Revenue was DKK 383m (H1 22/23: DKK 466m),
equivalent to a year-on-year decrease of 17.8% (-13% in
local currencies). The decline showed across product
categories. Gross margin increased by 13.0pp to 50.2%,
driven by margin improvements across product
categories.
APAC
Q2 revenue split (%)
35%
30%
28%
32%
37%
38%
23/24 22/23
Staged Flexible Living On-the-go
Q2
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
211 248 -37 383 466 -83
Growth in local currencies
-10% -16% -13% -14%
Gross profit
108 111 -3 192 174 18
Gross margin
51.6%
45.0%
6.6pp
50.2%
37.2%
13.0pp
Page — 14
Management’s review
Interim report H1 2023/24
Revenue
Revenue was DKK 75m (Q2 22/23: DKK 105m),
corresponding to a 28.8% decline (-26% in local
currencies).
Licence fee revenue decreased by 25%. Revenue from
the automotive industry declined due to factory strikes
in the US, challenging car manufacturing despite a
good order backlog. In addition, income from HP was
reduced compared to Q2 of last year. Licensing income
accounted for 74% of total revenue in Brand Partnering
& other activities (Q2 22/23: 72%).
Revenue from co-branded products declined year-on-
year; this was related to the ramp-up of the Bang &
Olufsen Cisco 980 headset in Q2 of last year.
During Q2 23/24, we expanded the partnership with
Cisco and introduced the Bang & Olufsen Cisco 950
earphones, which are expected to generate revenue in
H2 23/24. The offering now includes both headphones
and earphones for hybrid work.
Revenue related to aluminium production for third
parties declined slightly compared to Q2 of last year.
Gross profit
Gross profit amounted to DKK 66m (Q2 22/23: DKK
88m), equivalent to a gross margin of 87.9% (Q2 22/23:
82.6%).
The increase in gross margin was mainly related to the
change in mix, as the category included a lower
proportion of product revenue from our brand
collaboration with Cisco.
H1 2023/24
Revenue was DKK 152m (H1 22/23: DKK 197m),
equivalent to a year-on-year decrease of 23.0% (-20% in
local currencies). The decline came mainly from our
Cisco co-branded products due to ramp-up in H1 of last
year and reduced license fee income from HP.
Gross margin increased by 5.5pp to 87.9%, mainly
driven by the reduced share of product revenue from
our brand collaboration with Cisco.
Brand Partnering
& other activities
Q2
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
75 105 -30 152 197 -45
Growth in local currencies
-26%
47%
-20%
44%
Gross profit
66 88 -22 133 162 -29
Gross margin
87.9%
82.6%
5.2pp
87.9%
82.4%
5.5pp
Page — 15
Management’s review
Interim report H1 2023/24
Key events in Q2
Beosound A5 in Spaced Alu
In October, we
launched Beosound A5 in Spaced Aluminium. A
testament to our heritage in
aluminium excellence, design and
craftmanship.
The grille is made from more than 3,500 aluminium discs.
Working with different circular patterns across our speakers for
many years
, grille designs has become our signature, although
this is a new style. The grille of the Beosound A5 Spaced
Aluminium is crafted and finished by hand at Factory 5 in
Struer, Denmark
Beosound A5
was launched in April 2023 and is designed to be
carried from room to room with ease, whether placed on the
floor, shelf or table. Thanks to an IP65 water and dustproof
rating, Beosound A5 can also be taken outside
or on any
adventure, effortlessly.
Spaced Aluminium joins the existing portfolio of Beosound A5
.
F
inishes – Nordic Weave and Dark Oak.
B&O Ferrari events
In August,
we expanded our partnership with
Ferrari and launched a product collection
consisting of four products in
special edition.
The collection consist
s of the Beosound 2
home speaker, Beoplay H95 headphones,
Beoplay EX earphones and the portable
speaker Beosound Explore. The products are
displayed on Ferrari e
com, and available for
sale
online on our own ecom, as well as in
selected B&O and Ferrari stores.
Since launch, more than 80 in
-store events
have been
held in B&O branded
stores across
28 countries, celebrati
ng the collaboration
between our two brands and presenting the
special collection for a selected audience.
The events showed good traction and
positively affected reported sales
at the
locations
.
Launch of Cisco
Beocom 950
In October,
we expanded our partnership with
Cisc
o, announcing the new wireless earphones.
They are
built with enterprise-grade features
customi
sed for professionals on-the-go.
A
s hybrid work continues to enable
flexibility in
how and where people work, the Bang &
Olufsen Cisco 950 enables crystal
-clear audio
for seamless collaboration from any setting.
The ear
phones are fully manageable in Cisco's
Control Hub platform, giving IT greater
visibility and control over their entire fleet of
collaboration devices and peripherals.
Beocom 950 is an addition to the existing
980
headset
collaboration.
Launch of our speaker Beolab 8
In
September, we announced our new compact system speaker Beolab 8 built
on our Mozart platform. C
reated for an immersive home cinema setup or as a
stand
-alone speaker delivering depth with an intense bass given its size.
Beolab 8 is
a beauty designed to stand the test of time, consisting of quality
materials that age gracefully, continuous customisation options and easy
upgradability over time, long
-term serviceability as well as the replaceable
streaming module to ensure that Beolab 8 can adapt to the latest technology
standards
.
The one
-piece aluminium body is a fusion of a sphere and a cylinder merged
into a solid shape. Designed with Danish manufactured wooden lamellas or a
fabric front, Beolab 8 follows the characteristic design
of our Beolab and
Beosound product
s, thereby inherently fitted for a full integrated home cinema
setup. The versatile speaker comes with several mounting options and can be
customised to specific wishes.
,
Page — 16
Management’s review
Interim report H1 2023/24
Beosound 2 and
Beoplay EX colour
drops
W
e continued our Atelier edition colour
drops of Beoplay EX
as limited editions.
I
n Q2, the 7
th
colour dropped. Dawn
purple
became available on our own
website
only. In addition, a limited
edition of Beosound 2 was made
available
in Daybreak blossom.
B&O a
warded the
annual Germany
Sustainability Award
Bang & Olufsen won the annual German
Sustainability Award for our
efforts to become a
role model
in sustainability within consumer
electronics.
The
award is endorsed by the German Federal
Government, local and business associations,
and numerous NGOs. 140
jury members
selected
the companies leading the sustainable
transformation in their sectors this year, and they
said the following about our work: “Bang &
Olufsen has made particularly effective,
exemplary contributions to transformation in
sustainability, thereby set
ting an example and
sending the right signals to its industry and
beyond
.”
Beosound Bollard
In
September, we announced the first custom installed
outdoor speaker, the Beosound
Bollard, in collaboration
with Origin Acoustics in the US.
Tuned by Bang & Olufsen's expert tonmeisters at the
headquarters in Struer, Denmark, Beosound Bollard
marks the first time ever that 98 years of audio
innovation can be fully enjoyed outdoors through a
custom installed solution.
With three powerful drivers and a 360
-degree silicone
lens, Beosound Bollard fills any garden or patio with rich,
powerful audio. The innovative design means that the
integrated subwoofer that provides the power,
synonymous with Bang & Olufsen, is hidden
underground. This in turn means that the visible part of
each speaker is sleek, minimalist, and space efficient.
The speaker will be available for sale in January 2024
.
Store openings in New York and London
In November, we opened our relocated store on Madison Avenue. The new store
is a
significant upgrade and
provides better location and showroom capabilities.
In December
, we opened our new Flagship store in London on New Bond Street. The
store is an addition to our current company
-owned London stores at Harrods,
Selfridges and Bicester
Village.
The
new flagship store in London is the first store, featuring our new store concept that
redefines our signature shopping experience. The concept builds on cultural relevance
and applies principles of modern luxury, catering to four awareness
levels: Culture,
Sustainability, Human
Centricity and Design. Designed for iconic spaces and ultimate
experiences, it includes decompression zones to take the speed out of customers for
immersive and tailored interactions.
In addition, it offers a designated Bespoke and
private event area for private
, personalised customer events.
Page — 17
Management’s review
Interim report H1 2023/24
We confirm the outlook for 2023/24,
announced on 6 July 2023. However,
we now expect revenue growth and
free cash flow to be at the lower end
of the range. Expectations for the EBIT
margin before special items is
unchanged.
The outlook is subject to uncertainty as
market challenges persist.
We will continue investing in product and retail
development, as well as in marketing and product
development.
In addition, we plan to continue our investments in
strategy execution, but will adjust the timing and size
of these investments based on market developments.
Revenue growth
Revenue growth in local currencies is expected to be
between 0% to 9%.
Revenue growth is expected to be at the low end of the
range due to lower-than-expected revenue from APAC
and delay of a product launch.
EBIT margin before special items
EBIT margin before special items is expected to be in
the 0% to 6% range.
Free cash flow
Free cash flow is expected to be DKK -50m to
DKK 100m.
Free cash flow is expected to be at the low end of the
range following the revenue outlook.
Assumptions
Our expectations are subject to the following
assumptions:
• Improved market conditions in China in H2 23/24.
• Macroeconomic conditions in Europe and US will
improve during the fiscal year.
• Launch of five or more product innovations,
including the launch of MS Teams for Beoplay EX,
Beolab 8, and Beosound Bollard.
• No impact on product availability due to
geopolitical changes.
• Exchange rates against DKK, including in
particular. USD, CNY and EUR, in line with
current exchange rate levels, overall.
• No pressure on component and logistics costs.
• Improved inventories.
Sensitivities
The outlook for 2023/24 is subject to uncertainty
related to consumer sentiment from the effects of a
high inflationary environment, rising interest rates and
the war in Ukraine. In addition, geopolitical
uncertainty has increased. The economic recovery in
China and its pace are also subject to uncertainty.
Outlook for 2023/24 maintained
OUTLOOK 2023/24
H1 2023/24 actuals
Outlook 2023/24
Revenue growth in local currencies (%)
-8% 0% to 9%
EBIT margin before special items (%)
2.8% 0% to 6%
Free cash flow (DKK million)
-37 -50 to 100
Safe harbour statement
The report contains statements relating to expectations
for future developments, including future revenues and
operating results, as well as expected business-related
events. Such statements are subject to uncertainty and
carry an element of risk since many factors, some of
which are beyond Bang & Olufsen's control, may cause
actual developments to deviate significantly from the
expectations expressed in this report. Without being
exhaustive, such factors include general economic and
commercial factors, such as market and competitive
matters, supplier issues and financial issues in the form of
foreign exchange, interest rates, credit, and liquidity risk.
Page — 18
Consolidated financial statements
H1 2023/24
Q2
YTD
Year
(DKK million)
Notes
2023/24
2022/23
2023/24
2022/23
2022/23
Revenue
4 700 859 1,319 1,471 2,752
Production costs
-328 -477 -622 -865 -1,537
Gross profit
Development costs
5 -71 -81 -134 -150 -301
Distribution and marketing costs
-246 -255 -461 -460 -910
Administrative expenses
-38 -33 -69 -68 -128
Operating profit/loss (EBIT)
Financial income
Financial expenses
-23 -15 -40 -37 -56
Financial items, net
-12 -11 -17 -29 -28
Profit/loss before tax (EBT)
Income tax
Profit/loss for the period
Earnings per share
Earnings per share (EPS), DKK
Diluted earnings per share (EPS-D), DKK
-0.8
-1.5
0Condensed income statement
Page — 19
Consolidated financial statements
H1 2023/24
1BCondensed statement of comprehensive income
Q2
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Profit/loss for the period
Items that will be reclassified subsequently to the income
statement:
Exchange adjustments of subsidiaries
Fair value adjustments of hedging instruments
-5
-4
-5
Value adjustments of hedging instruments reclassified in
Revenue
Production costs
Tax on other comprehensive income/loss
-2
-1
-2
Items that will not be reclassified subsequently to the income
statement:
Actuarial gains/losses on defined benefit plans
Tax on other comprehensive income
Other comprehensive income/loss for the period, net of tax
Total comprehensive income/loss for the period
Page — 20
Consolidated financial statements
H1 2023/24
ASSETS
(DKK million)
Notes
30-11-23
30-11-22
31-05-23
Goodwill
Acquired rights and software
Completed development projects
Development projects in progress
5 104 87 124
Intangible assets
Property, plant and equipment
Right-of-use assets
Tangible assets
Non-current other receivables
Deferred tax assets
Total non-current assets
Inventories
Trade receivables
Tax receivable
Other receivables
Prepayments
Securities
7 391 401 394
Cash
7 154 189 216
Total current assets
Total assets
EQUITY AND LIABILITIES
(DKK million)
Notes
30-11-23
30-11-22
31-05-23
Share capital
Translation reserve
Cash flow hedge reserve
-2 1 -4
Retained earnings
Total equity
Lease liabilities
Pensions
Deferred tax
Provisions
Mortgage loans
Non-current other liabilities
Total non-current liabilities
Lease liabilities
Mortgage loans
Bank loans
7 382 403 386
Provisions
Trade payables
Tax payable
Other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Condensed statement of financial position
Page — 21
Consolidated financial statements
H1 2023/24
Q2
YTD
Year
(DKK million)
Notes
2023/24
2022/23
2023/24
2022/23
2022/23
Profit/loss before tax (EBT)
Financial items, net
Depreciation, amortisation and impairment
Operating profit/loss before depreciation,
amortisation and impairment (EBITDA)
Other non-cash items
-9 -7 -12 -13 -4
Change in net working capital
6 25 -10 -64 0 113
Interest received
Interest paid
-15
-9
-29
-17
-44
Income tax received/paid
-10 9 -9 13 7
Cash flows from operating activities
Purchase of intangible non-current assets
-38 -36 -70 -82 -169
Purchase of tangible non-current assets
-19 -17 -29 -29 -54
Sublease payment
Other cash flows from investing activities
Operational investments
-56 -53 -98 -106 -218
Free cash flow
Purchase of securities
Sale of securities
Financial investments
Cash flows from investing activities
-56 -49 -95 -99 -204
Q2
YTD
Year
(DKK million)
Notes
2023/24
2022/23
2023/24
2022/23
2022/23
Repayment of lease liabilities
-11 -11 -21 -21 -40
Repayment of mortgage loans
-1
-1
-2
-3
Proceeds from loans and borrowings
Repayment of loans and borrowings
-1 - -4 - -
Settlement of matching share programme
Cash flows from financing activities
-12 65 -26 103 64
Cash and cash equivalents, opening balance
Foreign exchange gain/loss on cash and cash
equivalents
-6
-2
-3
-4
Change in cash and cash equivalents
Cash and cash equivalents, closing balance
Available liquidity
7 163 187 163 187 224
Condensed statement of cash flows
[Insert table from Excel here]
Page — 22
Consolidated financial statements
H1 2023/24
Condensed statement of changes in equity
(DKK million)
Share capital*
Translation
reserve
Cash flow
hedge reserve
Retained
earnings
Total
Equity 1 June 2023
Profit/loss for the period
Exchange adjustments of subsidiaries
-2
-2
Fair value adjustments of hedging instruments
Value adjustments of hedging instruments reclassified in
Revenue
Production costs
Income tax on items that will be reclassified to the income statement
Comprehensive income/loss for the period
Share-based payments
Equity 30 November 2023
Equity 1 June 2022
Profit/loss for the period
-97
-97
Exchange adjustments of subsidiaries
Fair value adjustments of hedging instruments
Value adjustments of hedging instruments reclassified in
Revenue
Production costs
Income tax on items that will be reclassified to the income statement
-2
-2
Comprehensive income/loss for the period
Share-based payments
Equity 30 November2022
* The company holds a total of 1,778,270 treasury shares (3,122,870 shares as of 30 November 2022). The decrease was related to exercise of shares related to the ongoing long term incentive programmes.
Page — 23
Consolidated financial statements
H1 2023/24
1 Basis of reporting
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the
EU, and additional Danish disclosure requirements for interim financial reports of listed companies.
No interim report has been prepared for the parent company.
The accounting policies applied in this interim report are consistent with those applied in the Annual Report for
2022/23.
New standards, interpretations and amendments adopted by Bang & Olufsen
Bang & Olufsen has implemented the International Financial Reporting Standards (IFRS) and amendments
effective as of 1 June 2023 and endorsed by the EU. The implementation of new or amended standards and
interpretations had no material impact on the interim financial statements.
2 Critical accounting estimates and judgements
When preparing the interim financial report, Management makes various accounting estimates and assumptions,
which form the basis of the presentation, recognition and measurement of Bang & Olufsen's assets and liabilities.
Estimates and judgements are reassessed on a regular basis.
Due to the current macroeconomic environment, geopolitical uncertainty and pandemic related lockdowns, we
have considered the recoverability of trade receivables, deferred tax assets, intangible assets and the value of
inventories. In addition, Management has assessed the impact of climate change, particularly in the context of the
Group’s sustainability targets, and concluded that these are not expected to have a significant impact on our future
cash flows or going concern assessment.
Apart from the above, critical accounting estimates and judgements are consistent with those applied in note 1.2 to
the consolidated financial statements in the 2022/23 Annual Report, to which reference is made.
Internal cost allocations were updated 1 June 2023, resulting in an updated split between segments. Due to a
higher cost allocation to aluminium production, the gross margin in Brand Partnering & other activities decreased
by approximately 5 pp and product sales increased by 1 pp, depending on the mix and seasonality. Comparable
figures have been restated accordingly. Change in cost allocations had no margin effect on group level.
3 Seasonality
Due to the composition of the Bang & Olufsen business, some degree of seasonality of revenue must be expected.
Historically, reported revenue has been the highest in the second quarter due to the seasonal nature of the
business.
In the current situation, seasonality may be impacted by regional pandemic-related lockdowns and effects related
to the current high macroeconomic uncertainty described above.
Notes
Page — 24
Consolidated financial statements
H1 2023/24
4 Segment information – Q2
(DKK million)
EMEA
Americas
APAC
Regions, total
Brand Partnering
& other activities
All
Q2 2023/24
Revenue
342 72 211 625 75 700
Production costs
-176
-40
-103
-319
-9
-328
Gross profit
166 32 108 306 66 372
Gross margin
48.5%
42.9%
51.6%
48.9%
87.9%
53.1%
Q2 2022/23
Revenue
400 106 248 754 105 859
Production costs
-252
-71
-137
-460
-17
-477
*Gross profit
148 35 111 294 88 382
*Gross margin
36.8%
33.6%
45.0%
39.1%
82.6%
44.4%
(DKK million)
Staged Flexible Living On-the-go Products, total
Brand Partnering
& other activities All
Q2 2023/24
Revenue
278 135 212
625
75
700
Production costs
-115 -63 -141 -319 -9 -328
Gross profit
163 72 71
306
66
372
Gross margin
58.4% 53.4% 33.6% 48.9% 87.9% 53.1%
Q2 2022/23
Revenue
332 143 279
754
105
859
Production costs
-168 -68 -224 -460 -17 -477
*Gross profit
164 75 55
294
88
382
*Gross margin
49.4% 52.3% 20.0% 39.1% 82.6% 44.4%
*
Comparative figures for gross margin and gross profit on segment level has been restated. No change in total gross margin and gross profit.
Gross profit is a segment KPI. There are no unallocated elements, and total gross profit reconciles to the income statement.
Page — 25
Consolidated financial statements
H1 2023/24
Segment information – YTD
(DKK million)
EMEA
Americas
APAC
Regions, total
Brand Partnering
& other activities
All
2023/24
Revenue
645 139 383 1,167 152 1,319
Production costs
-335
-77
-191
-603
-19
-622
Gross profit
310 62 192 564 133 697
Gross margin
48.0%
44.2%
50.2%
48.3%
87.9%
52.8%
2022/23
Revenue
639 169 466 1,274 197 1,471
Production costs
-417
-121
-292
-830
-35
-865
*Gross profit
222 48 174 444 162 606
*Gross margin
34.8%
28.5%
37.2%
34.8%
82.4%
41.2%
(DKK million)
Staged Flexible Living On-the-go Products, total
Brand Partnering
& other activities All
2023/24
Revenue
569 242 356
1,167
152
1,319
Production costs
-250 -118 -235 -603 -19 -622
Gross profit
319 124 121
564
133
697
Gross margin
56.0% 51.1% 34.1% 48.3% 87.9% 52.8%
2022/23
Revenue
545 268 461
1,274
197
1,471
Production costs
-301 -142 -387 -830 -35 -865
*Gross profit
244 126 74
444
162
606
*Gross margin
44.7% 47.3% 16.1% 34.8% 82.4% 41.2%
* Comparative figures for gross margin and gross profit on segment level has been restated. No change in
total gross margin and gross profit.
Gross profit is a segment KPI. There are no unallocated elements, and total gross profit reconciles to the income statement.
Page — 26
Consolidated financial statements
H1 2023/24
5 Development costs
Q2
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Incurred development costs before capitalisation
78 83 141 161 319
Of which capitalised
-31
-27
-57
-60
-117
Incurred development costs after capitalisation
47
56
84
101
202
Capitalisation (%)
39.1% 32.4% 40.5% 36.7% 36.7%
Total charges and impairment losses on development projects
24
25
50
49
99
Development costs recognised in the consolidated income statement
71 81 134 150 301
Incurred development costs before capitalisation ratio (% of revenue)
11.1%
9.6%
10.7%
11.0%
11.6%
6 Change in net working capital
Change in
Change in
Change in
(DKK million)
30-11-23
31-05-23
Q2 2023/24 YTD
Q2 2022/23 YTD
2022/23
Inventories
460
499
39
61
130
Trade receivables
365 341 -24 -48 56
Other receivables*
46
66
20
-2
22
Prepayments
26 24 -2 -10 4
Trade payables
-451
-565
-114
67
-16
Other liabilities
-160 -143 17 -60 -69
Deferred income - non-current
-
-
-
-8
-14
Total
286 222 -64 0 113
*Other receivables were adjusted for financial receivables related to leases of DKK 1m not included as net working capital at 3 November 2023 (31 May 2023: DKK 2m).
Page — 27
Consolidated financial statements
H1 2023/24
7 Net interest-bearing deposit/debt
Net interest-bearing deposit/debt consists of interest-bearing assets less interest-bearing debt. Interest-bearing
assets consist of securities, cash, and finance lease receivables. Interest-bearing debt consists of mortgage loans,
bank loans and lease liabilities. We have placed the majority of our cash in Danish mortgage bonds, all with an
AAA S&P rating. To maintain short-term financial flexibility, we use repo transactions, whereby we can access
liquidity on an intra-day basis if needed by lending our banks bonds in return for cash, while committing to a
reverse transaction at a predetermined future date. Bonds are presented as securities on the balance sheet as
ownership of the bonds remains with the company during the term of the repo. The obligation to return cash for
bonds under such repo transactions is recognised as short-term bank loans. As of 30 November 2023, repo
transactions amounted to DKK 382m.
During the quarter, net interest-bearing debt decreased by DKK 11m to a debt of DKK 33m compared to a deposit of
DKK 19m at year-end 2022/23.
(DKK million)
30-11-23
30-11-22
31-05-23
Mortgage loans (non-current)
-52 -56 -56
Mortgage loans (current)
-6 -4 -3
Bank loans (current)
-382
-403
-386
Lease liabilities (non-current)
-96 -90 -109
Lease liabilities (current)
-42 -34 -37
Other non-current liabilities*
-3 -3 -3
Interest-bearing debt
-581 -591 -594
Finance lease receivables (non-current)
2 3 1
Finance lease receivables (current)
1 2 2
Cash (current)
154 189 216
Securities (current)
391
401
394
Interest-bearing assets
548 595 613
Net interest-bearing deposit/debt
-33 4 19
* Only the interest-bearing part of Other non-current liabilities has been included in net interest-bearing deposit/debt.
During the quarter, net available liquidity increased by DKK 13m to DKK 163m (year-end 2022/23: DKK 224m),
consisting of cash and securities offset by repo transactions.
(DKK million)
30-11-23
30-11-22
31-05-23
Cash (current)
154 189 216
Securities (current)
391 401 394
Bank loans (current)
-382 -403 -386
Available liquidity
163 187 224
Including the undrawn part of our ESG-linked credit facility, capital resources were DKK 323m (year-end 2022/23:
DKK 384m), consisting of available liquidity of DKK 163m and undrawn committed credit facilities of DKK 160m.
Page — 28
Consolidated financial statements
H1 2023/24
Financial instruments by category
(DKK million)
30-11-23
30-11-22
31-05-23
Non-current other receivables
22
22
23
Trade receivables
365 445 341
Other receivables
47 91 68
Cash
154 189 216
Financial assets at amortised cost
587 747 648
Securities
391 401 394
Fair value through income statement
391 401 394
Derivatives used for hedge accounting
0 7 0
Fair value through other comprehensive income
0 7 0
Financial assets
978 1,155 1,042
Mortgage loans
58 60 59
Bank loans
382 403 386
Lease liabilities
138 124 146
Trade payables
451
648
565
Financial liabilities at amortised cost
1,029 1,235 1,156
Derivatives used for hedge accounting
6 8 8
Fair value through other comprehensive income
6 8 8
Financial liabilities
1,035 1,243 1,164
The fair value is approximately equal to the carrying amount for all financial assets and liabilities.
Securities
Securities comprise listed Danish mortgage bonds and are measured at fair value with all changes in fair value
recorded in the income statement. Bonds are measured using observable market values (level 1 in the fair value
hierarchy). We use repo transactions and as ownership of the bonds remains with us during the term of the repo,
the bonds remain recognized the balance sheet.
Derivative financial instruments
Derivative financial instruments comprise primarily foreign exchange contracts used to hedge foreign exchange
risk related to unrecognised future transactions. Derivatives are measured at fair value in accordance with level 2
in the fair value hierarchy using valuation techniques that apply market data such as exchange rates, credit risk
and volatility.
See note 7.3 to the 2022/23 Annual Report for an overview of foreign exchange contracts.
9 Subsequent events
No events have occurred in the period from the balance sheet date until the presentation of the financial
statements that materially affect the assessment of the consolidated financial statements.
8 Financial instruments
Page — 29
Consolidated financial statements
H1 2023/24
Management's statement
Executive Management Board:
Board of Directors:
