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1
Interim report
9M 2023/24
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Management’s review
Interim report 9M 2023/24
Despite a lower-than-expected
revenue performance, we generated
positive earnings for the quarter. Gross
margin was a record-high 53.2%,
above 50% for the fourth consecutive
quarter. The EBIT margin before
special items was 1.8%.
Q3 was characterised by our continued efforts to
implement our Luxury Timeless Technology strategy.
Through our focus on branded channels, we have
improved our gross margin to a record high level
making us more resilient as a business. However, the
macroeconomic conditions in Europe and in China had
a negative impact on revenue.
Like-for-like sell-out was down by 2% year-on-year.
APAC reported strong growth of 23% mainly driven by
China coming from low comparables last year.
Consumer confidence in Europe remained challenged
and sell-out declined by 13% in the region year-on-year.
Sell-out in the Americas declined by 7%.
Group revenue declined by 3.4% year-on-year (-3% in
local currencies). Product sales declined by 1.6%, on par
in local currencies, supported by good performance in
the branded channels. Revenue from the multibrand
channels declined compared to Q3 of last year, as a
result of planned changes to the channel network.
EMEA revenue decreased by 12.2% (-12% in local
currencies). The Americas declined by 4.0% (positive
by 1% in local currencies). APAC revenue increased by
24.1% (27% in local currencies).
Brand Partnering and other activities declined by 16.3%
(-17% in local currencies). This was mainly driven by
reduced license income from the automotive industry
as the industry slowly recovered from factory strikes in
the US and a decline in license income from HP.
Overall, our capacity costs were DKK 17m lower at DKK
318m reflecting our focus on maintaining a lean cost
base.
Gross margin increased by 9.6 pp from 43.6% to 53.2%
year-on-year. Normalised component and logistics
costs, a strong pricing focus, and a change in product
mix towards higher-margin products drove the
increase.
We achieved positive earnings despite the lower
revenue level driven by the improved gross margin and
cost management. EBIT before special items was DKK
11m (Q3 22/23: DKK -43m), corresponding to an EBIT
margin of 1.8% (Q3 22/23: -6.8%).
Free cash flow was DKK 5m (Q3 22/23: DKK 33m), driven
by an improved EBITDA and offset by a less favourable
change in net working capital. Available liquidity was
DKK 158m (Q3 22/23: DKK 208m).
During Q3, our customer base grew by 5% and the
number of customers owning two or more Bang &
Olufsen products increased by 5% quarter-on-quarter.
For the first nine months of 2023/24, group revenue
declined by 7% year-on-year in local currencies.
EBITDA before special items was DKK 228m
corresponding to a margin of 11.8% and an increase of
DKK 177m from DKK 51m in the first nine months of
2022/23. The EBIT margin before special items
improved by 7.9 pp to 2.5%.
Outlook 2023/24
On 17 March 2024, we adjusted our revenue outlook due
to the macroeconomic conditions in our key markets in
Europe and China. In addition, ranges were narrowed
for EBIT before special items and the free cash flow.
• Revenue growth in local currencies: -8% to -5%
(previously lower end of 0% to 9%)
• EBIT margin before special items: 0% to 2%
(previously 0% to 6%)
• Free cash flow: DKK -50m to 10m
(previously lower end of DKK -50m to 100m)
For uncertainties and assumptions underlying the
outlook please refer to page 17.
Q3 highlights
Revenue
DKK million
614
Q3 22/23: 635
Growth in local currencies
-3%
Q3 22/23: 2%
EBIT before special items
DKK million
11
Q3 22/23: -43
Free cash flow
DKK million
5
Q3 22/23: 33
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Management’s review
Interim report 9M 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
Q3
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Income statement
Revenue
614 635 1,933 2,106 2,752
EMEA
293 333 938 972 1,281
Americas
70
73
210
242
313
APAC
180 145 563 611 795
Brand Partnering & other activities
71
84
223
281
363
Gross margin, %
53.2 43.6 52.9 41.9 44.2
EMEA
48.7 36.8 48.3 35.5 37.2
Americas
45.9
31.0
44.7
29.3
31.6
APAC
50.8 42.5 50.4 38.5 40.3
Regions, total
49.1
37.7
48.5
35.7
37.5
Brand Partnering & other activities
84.5 84.8 86.7 83.1 87.9
EBITDA before special items
72
15
228
51
117
EBITDA
69 0 221 35 98
EBIT before special items
11
-43
48
-114
-105
EBIT
8 -58 41 -130 -124
Special items, net
-3 -15 -7 -16 -19
Financial items, net
-2 3 -19 -26 -28
Profit/loss before tax (EBT)
6
-55
22
-156
-152
Profit/loss for the period
3 -55 18 -152 -141
Financial position
Total assets
2,220 2,325 2,220 2,325 2,385
Equity
989 955 989 955 958
Cash
149 212 149 212 216
Available liquidity
158
208
158
208
224
Capital resources
318 328 318 328 384
Net interest-bearing deposit/debt
-24
36
-24
36
19
Net working capital
297 269 297 269 222
Q3
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Cash flows
Cash flows from operating activities
52 74 113 100 198
Operational investments
-47 -41 -145 -147 -218
Free cash flow
5 33 -32 -47 -20
Key figures
Gross margin, total, %
53.2 43.6 52.9 41.9 44.2
EMEA *)
48.7 36.8 48.3 35.5 37.2
Americas *)
45.9
31.0
44.7
29.3
31.6
APAC *)
50.8 42.5 50.4 38.5 40.3
Brand Partnering & other activities *)
84.5 84.8 86.7 83.1 87.9
Growth in local currencies, %
-3 -20 -7 -9 -8
EBITDA margin before special items, %
11.7
2.4
11.8
2.4
4.3
EBITDA margin, %
11.2 0.0 11.4 1.7 3.6
EBIT margin before special items, %
1.8 -6.8 2.5 -5.4 -3.8
EBIT margin, %
1.3 -9.1 2.1 -6.2 -4.5
Return on assets, %
0.8 -6.6 0.8 -6.6 -5.9
Return on invested capital, excl. goodwill, %
12.6 -7.1 12.6 -7.1 0.4
Return on equity, %
1.8
-15.9
1.8
-15.9
-14.7
Full-time employee (FTE) at end of period
993 1,037 993 1,037 996
Stock-related key figures
Earnings per share (EPS), DKK
0.0 -0.5 0.1 -1.2 -1.5
Earnings per share, diluted (EPS-D), DKK
0.0 -0.5 0.1 -1.2 -1.5
Price/Earnings
389.2 -27.8 66.2 -10.3 -9.8
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Management’s review
Interim report 9M 2023/24
Like-for-like sell-out was down by 2%.
APAC reported solid growth, whereas
EMEA and Americas had negative
growth.
Revenue decreased by 3.4% (-3% in
local currencies). APAC reported solid
growth in the period while EMEA
declined. The Americas grew year-on-
year in local currencies.
Gross margin increased to a record
53.2%. Normalised component and
logistics costs, a strong focus on pricing
and improved margins across regions
and categories drove the
improvement.
EBIT margin before special items was
1.8%, up from -6.8% last year driven
by the improved gross margin level.
Cash flow was DKK 5m compared to
DKK 33m last year.
Developments in Q3 2023/24
In Q3, we continued to implement our Luxury Timeless
Technology strategy and laying the foundation for
longer term profitable and sustainable growth. An
enhanced focus on the customer experience in branded
channels, luxury positioning, and product excellence
were key elements.
The market activity in China increased but from a very
low level in Q3 of last year. In December 2022, China’s
COVID-19 policy changed drastically creating a nation-
wide outbreak in the country. The economic recovery
has since been slower than expected and has not fully
materialised yet. In addition, consumer confidence in
our European markets was low during the quarter.
Product revenue was flat year-on-year, and our branded
channels (company-owned stores, monobrand and e-
commerce) outperformed the multibrand channels.
Across regions, we are more selective in terms of how
and where consumers can experience our brand and
products, aiming to ensure they get the full luxury
experience. Discontinuing multibrand stores and
limiting assortment in both the multibrand and eTail
channel, resulted in less overall volume in the
multibrand channels in Q3.
The significant gross margin improvement enables us
to continue to execute on our strategy despite market
challenges. We continue to optimise our channel
network, refining our product portfolio and increasing
brand awareness while maintaining a strong price
focus.
The record-high gross margin drove the increased EBIT
level before special items of DKK 11m.
At the end of October, we launched the Beolab 8. The
speaker gained strong traction in Q3 and received
positive reviews and the sales performance was in line
with expectations. 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.
In January, we renewed our partnership with Scuderia
Ferrari for the 2024 and 2025 seasons. Our partnership
for the 2023 season was successful and the extension is
expected to continue driving up awareness and equity
of our brand and bringing us closer to current and
future customers.
Like-for-like sell-out
Sell-out declined by 2% compared to the same period of
last year. Excluding end-of-life products, like-for-like
sell-out grew in the low single-digits compared to Q3 of
last year.
Across regions, our Flexible Living category grew by
12%, the On-the-go category grew by 2%, while the
Staged category declined by 10%.
EMEA
Like-for-like sell-out in EMEA decreased by 13% year on
year. Except for e-commerce, declines were reported
across channels and categories and mainly driven by
negative sell-out growth reported from the Monobrand
stores reflecting the weak consumer sentiment in
Europe.
Americas
Sell-out in the Americas fell by 7%. Company-owned
stores grew during the period with monobrand and
ecommerce declining. Monobrand declined due to poor
performance in a single material geographic market,
and a change of the setup has been initiated. Excluding
Management’s review for Q3
LIKE-FOR-LIKE SELL-OUT*
Q3 23/24
Q3 23/24
EMEA
-13%
Staged
-10%
Americas
-7%
Flexible Living
12%
APAC
23%
On-the-go
2%
Total
-2%
Total
-2%
* Defined as sell-out from the same stores, provided they were open and active in both periods.
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Management’s review
Interim report 9M 2023/24
this single geographic market, Monobrand reported
growth compared to Q3 of last year. Multibrand
declined significantly due to our decision to
discontinue a number of stores.
In terms of product categories, our Staged products
delivered growth compared to Q3 of last year. The On-
the-go category experienced a decline while the
Flexible Living category was on par.
APAC
Like-for-like sell-out in APAC increased by 23% driven
by sell-out growth in China of 36% coming from low
comparables last year due to the change in the
country’s COVID-19 policy in December 2022. Sell-out
growth in the region was reported across all product
categories.
Revenue in Q3
Revenue in Q3 was DKK 614m, an 3.4% year-on-year
decline (-3% in local currencies), which was below our
expectations.
The drop in reported revenue was related to a decline in
product sales of 1.6% (on par in local currencies) and in
Brand Partnering and other activities of 16.3% (-17% in
local currencies).
Product revenue, regions
The development in product revenue was driven by
reported low single-digit growth in branded channels
offset by decline in multibrand channels.
EMEA
Revenue in EMEA declined by 12.2% (-12% in local
currencies) to DKK 293m.
Company-owned stores and our e-commerce delivered
growth, while monobrand declined year-on-year. Price
increases implemented on 1 September pulled some
demand forward into Q1. Looking at the first nine
months of 23/24, revenue from branded channels
increased 4% year-on-year. We continued to optimise
the channel network and the number of Monobrand
stores were reduced by 18 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 131 since Q3 of last year and we have limited
the assortment available on eTail platforms and in the
multibrand channel.
Americas
Revenue in Americas was DKK 70m, a decline of 4.0%
(increase of 1% in local currencies) year-on-year.
The ramp up of our collaboration with Genesis reported
strong performance and revenue in the enterprise
channel increased double-digit year-on-year.
Performance by the company-owned stores was largely
on par while monobrand incurred a small decline.
Revenue from the eTail channel was reduced
significantly while multibrand was on par at a low-level
year on year. As part of the strategic transformation, we
decided to end the partnerships with T-Mobile and
Verizon and consequently reduced the channel by 2,214
stores.
APAC
R
evenue in APAC was DKK 180m (Q3 22/23: DKK 145m),
corresponding to an increase of 24.1% (27% in local
Revenue split by segment, DKKm
Revenue split by category, DKKm
333
293
73
70
145
180
84
71
EMEA
Americas
APAC
Brand Partnering & other activities
Q3 2023/24
Q3 2022/23
281
285
108
105
162
153
84
71
Staged
Flexible Living
On-the-go
Brand Partnering & other activities
Q3 2023/24
Q3 2022/23
Monobrand
Multibrand
Custom installations
Points of sale
End Q3 23/24
End Q3 22/23
End Q3 23/24
End Q3 22/23
End Q3 23/24
End Q3 22/23
EMEA
290
308
1.417
1.548
N/A
N/A
Americas
30 29 37 2.251 101 42
APAC
75 75 956 942 N/A N/A
Total
395
412
2.408
4.741
101
42
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Management’s review
Interim report 9M 2023/24
currencies). Revenue from China increased by 33%
(45% in local currencies) and accounted for
approximately 47% of total APAC revenue.
Revenue from our monobrand channel increased by
double-digits despite one specific partner having
continued high inventory.
As part of our strategic transformation in China we
have made a structural change to the eTail network and
multibrand setup, changing partners and reducing the
number of stores. The eTail channel increased
significantly compared to low comparables in Q3 of last
year while multibrand reported modest growth.
Brand Partnering & other activities
The 16.3% decline (-17% in local currencies) in Brand
Partnering & other activities was mainly due to reduced
license income. This was mainly driven by reduced
income from the automotive industry as the industry
slowly recovered from factory strikes in the US and a
decline in license income from HP. Revenue from co-
branded products was largely on par year on year.
Product revenue, categories
Staged category
Revenue increased by 2% to DKK 285m. Beolab
speakers reported strong performance driven by the
launch of Beolab 8 at the end of October and overall, the
category increased despite a strong performance by
Beosound Theatre in Q3 of last year.
The developments were supported by higher average
prices relative to last year.
Flexible Living category
Revenue declined by 2% to DKK 105m. The decline was
partly offset by strong performance from Beosound A5,
launched in April of last year as well as higher average
selling prices.
On-the-go category
Revenue declined by 5% to DKK 153m. The
development was mainly driven by a few end-of-life
deals made on headphones and earphones in Q3 of last
year as part of our efforts to reduce end-of-life
inventory.
Also, 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 326m (Q3 22/23: DKK 277m),
corresponding to a gross margin of 53.2% against 43.6%
last year. This was equivalent to a year-on-year strong
improvement of 9.6pp.
In addition to normalised component and logistics
costs, a strong pricing focus and improved product and
channel mix improved the gross margin.
In Q3 of last year, extraordinary costs impacted the
gross margin by approx. 5pp. In addition, end-of-life
deals made as part of our efforts to reduce inventories
negatively impacted the gross margin by 2.2pp.
Gross profit from regional product sales was DKK 266m
(Q3 22/23: DKK 206m), corresponding to a gross margin
of 49.1% (Q3 22/23: 37.7%). This was an increase of
11.4pp compared to Q3 of last year. The gross margin
improved across regions and product categories.
Gross profit from Brand Partnering & other activities
was DKK 60m (Q3 22/23: DKK 71m), equivalent to a
gross margin of 84.5% (Q3 22/23: 84.8%). The gross
margin was on par year on year as the share of the
license and product mix was largely unchanged.
Currency movements ha
d an immaterial impact on the
gross margin compared to last year.
Capacity costs
Capacity costs were DKK 318m (Q3 22/23: DKK 335m)
corresponding to a decrease of 5.1%.
Development costs decreased by DKK 14m to DKK 72m
(Q3 22/23: DKK 86m). This was driven by reduction in
incurred costs mainly due to a severance pay relating to
a reorganisation last year and a higher capitalisation
ratio this year compared to Q3 of last year.
Distribution and marketing costs of DKK 217m were in
line with last year (Q3 22/23: DKK 216m). The marketing
cost ratio was 8.6% in Q3 compared to 10.8% in Q3 of
last year. The decrease was driven by lower marketing
cost in the regions.
Administrative expenses decreased by DKK 4m to DKK
29m (Q2 22/23: DKK 33m) primarily driven by lower
advisory costs.
Q3
YTD
GROSS MARGIN
2023/24
2022/23
2023/24
2022/23
Staged
57.2%
45.6%
56.5%
45.0%
Flexible Living
52.6% 47.9% 51.5% 47.4%
On-the-go
31.6%
18.0%
33.3%
16.6%
Products, total
49.1% 37.7% 48.5% 35.7%
Brand Partnering & other activities
84.5%
84.8%
86.7%
83.1%
Total
53.2%
43.6%
52.9%
41.9%
Comparative figures for gross margin on segment level have been restated. No change in margin on group level.
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Management’s review
Interim report 9M 2023/24
EBITDA
EBITDA before special items was DKK 72m (Q3 22/23:
DKK 15m) equivalent to a margin of 11.7% compared to
2.4% in Q3 of last year.
EBIT
EBIT was DKK 8m (Q3 22/23: DKK -58m). This was
equivalent to an EBIT margin of 1.3% (Q3 22/23: -9.1%).
The EBIT margin improvement was related to the
improved gross margin and lower capacity costs.
The EBIT margin before special items was 1.8% (Q3
22/23: -6.8%). Special items were DKK 3m (Q3 22/23:
DKK 15m) related to a re-organisation, primarily in
marketing.
Profit/loss
Profit before tax was DKK 6m (Q3 22/23: loss of DKK 55)
followed by a tax expense of DKK 3m (Q3 22/23: DKK
0m).
Profit for the period was DKK 3m (Q3 22/23: loss of DKK
55m).
Cash flows
Free cash flow for the quarter was DKK 5m compared to
DKK 33m last year. The year-on-year decrease was
related primarily to reduced cash flows from operating
activities (DKK 22m).
The decrease in cash flows from operating activities
was mainly related to a negative change in net working
capital of DKK 11m (Q3 22/23 positive of DKK 66m) and
reduced adjustments for non-cash items of DKK 1m (Q3
22/23 positive DKK 15m) offset by higher EBITDA of
DKK 69m (Q3 22/23: DKK 0m).
Cash flows from operational investments totalled an
outflow of DKK 47m and were slightly higher than last
year (Q3 22/23: DKK 41m).
Cash flows from financing activities were an outflow of
DKK 13m (Q3 22/23: DKK 15m) relating to the repayment
of lease liabilities.
The cash position at the end of the quarter was DKK
149m (30 November 2023: DKK 154m). Total available
liquidity was DKK 158m (30 November 2023: DKK
163m), consisting of cash DKK 149m, securities DKK
390m less DKK 381m 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 318m (30 November 2023: DKK
323m).
Net working capital
Net working capital increased by DKK 11m during the
quarter to DKK 297m (30 November 2023: DKK 286m).
Net working capital to the last 12 months’ revenue was
11.5% and higher than last year (Q3 22/23: 9.6%) driven
by the lower revenue.
Inventories increased by DKK 9m during the quarter,
driven by less activity than expected.
Trade receivables decreased by DKK 45m to DKK 320m.
The decrease was driven by lower sales in Q3 than in
Q2. Sales with extended credit accounted for 1% of
revenue for the quarter (Q2 23/24: 2%).
Trade payables decreased by DKK 27m to DKK 424m,
mainly related to the timing of payments.
Other short-term liabilities decreased by DKK 24m to
DKK 136m during the quarter, primarily related to VAT
and employee-related liabilities. Other receivables
decreased by DKK 4m to DKK 42m.
Net interest-bearing deposit/debt
Net interest-bearing debt amounted to DKK 24m,
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 32m for the 9M
period and the repayment of lease liabilities. For
further details, see note 7.
Financial performance 9M 2023/24
Revenue amounted to DKK 1,933m (9M 22/23: DKK
2,106m). Revenue declined by 7% in local currencies.
EMEA revenue declined by 3.6% compared to 9M 22/23.
The decline in multibrand channels was partly offset by
increased revenue in branded channels (company-
owned stores, monobrand and e-commerce) of 4%.
The Americas reported negative growth of 13.6% mainly
driven by high comparables due to the launch of
Beosound Theatre in Q2 of last year. In addition, eTail
declined as a result of the strategic transformation.
APAC revenue declined by 7.9%. As part of our strategic
transformation in China, we have implemented a
structural change in the eTail network and multibrand
setup, changing partners and reducing the number of
stores. This affected performance in both channels.
Revenue in the Staged category grew by 3.5%,
supported by a good performance of our Beolab
speakers at a 19% increase. We saw good traction with
double-digit growth for both Beolab 50 and Beolab 90.
The category was also fuelled by the launch of Beolab 8
at the end of Q2 23/24. The growth within the category
was partly offset by a decline within TV’s in general.
The Flexible Living category decreased by 7.6%. This
was mainly due to certain retail partners in APAC
replenishing inventories in H1 of last year. The decline
was partly offset by the launch of Beosound A5 whereas
Page — 8
Management’s review
Interim report 9M 2023/24
we also saw good traction for Beosound 2 supported by
the Ferrari edition.
The On-the-go category declined by 18.2% due to a few
larger deals made in H1 of last year to reduce end-of-life
inventories. As part of our strategic shift and focus, the
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 52.9% (9M 22/23: 41.9%), equivalent
to a year-on-year increase of 11.0pp.
In general, extraordinary component and logistics costs
no longer impacted the gross margin for the year.
Extraordinary costs in 9M 22/23 amounted to around
DKK 154m, corresponding to a negative margin impact
of approx. 7pp.
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 an immaterial effect on the
gross margin compared to last year.
Capacity costs amounted to DKK 982m (9M 22/23: DKK
1,013m). The decrease was driven by lower development
costs, while distribution and marketing costs along with
administrative costs were in line with last year.
EBITDA for the year was DKK 221m (9M 22/23: DKK
35m). A significant improvement over last year driven
by the improved profitability described above. This was
equivalent to a margin of 11.4% vs. 1.7% last year.
EBITDA before special items was DKK 228m (9M 22/23:
DKK 51m) equivalent to a margin of 11.8% compared to
2.4% last year.
EBIT was DKK 41m (9M 22/23: DKK -130m), equivalent
to a margin of 2.1% (9M 22/23: -6.2%). The increase was
driven by the higher gross profit and lower capacity
costs.
EBIT before special items was DKK 48m (9M 22/23: DKK
-114m) with a margin of 2.5% (9M 22/23: -5.4%).
Special items were DKK 7m (9M 22/23: DKK 16m) and
primarily related to a re-organisation of marketing and
EMEA.
Free cash flow was DKK -32m (9M 22/23: DKK -47m),
primarily driven by the higher EBITDA of DKK 221m
(9M 22/23: DKK 35m) and offset by a negative change in
net working capital of DKK 75m (9M 22/23: positive at
DKK 66m).
Our combined capital resources (available liquidity and
the undrawn part of our ESG-linked credit facility)
amounted to DKK 318m (31 May 2023: DKK 384m). The
difference being due to the change in free cash flow and
the repayment of lease liabilities.
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Management’s review
Interim report 9M 2023/24
Q3 strategy execution
Throughout the quarter we continued the execution of
key priorities across our five strategic shifts.
Reigniting our brand to become a culturally relevant
luxury love brand
During the quarter, we grew our customer base by 5%
and the number of customers owning two or more
products by 5% compared to previous quarter.
Our global brand and marketing efforts during the
quarter were centred around the holiday season and
promoting gifting to drive sell-out.
In Q3, we renewed our partnership with Scuderia
Ferrari for the 2024 and 2025 seasons. Our partnership
for the 2023 season yielded satisfactory results
generating the highest brand awareness uplift versus all
other tested B&O campaigns and strengthened our
brand image by fostering stronger customer connection
and increasing the likelihood of customers buying and
recommending our brand.
The partnership extension is expected to continue to
drive brand awareness and equity of our brand and it
provides a unique opportunity to bring us even closer to
important current and future customers.
Building a seamlessly connected product portfolio,
bridging our past, present and future
Our Q3 development efforts were dedicated to
enhancing our software and app experiences, and on
our new propositions launching in the near-term
future. With a new Atelier drop and a new product
introduction in early Q4, we aim to build desirability
for our products and to enhance ecosystem experiences
connecting our products from the past with products of
today and tomorrow.
Creating magical moments in connected touch points
During Q3, significant efforts were made to enhance the
in-store experience, provide retail staff training,
undertake network planning, and implement various
other initiatives aimed at boosting sell-out and
improving the quality of experiences.
We collaborated with numerous monobrand partners
across all regions. Additionally, we opened two pop-up
stores, one in Xian, China and another one in Paris,
France. We also supported a partner in launching a pop-
up store in Basel to bolster brand visibility and
customer engagement for the festive season.
Additionally, we opened our relocated company-owned
store at Copenhagen Airport featuring a small-scale
version of our new Culture Store concept. With this
store refit and relocation, we anticipate increased
traffic and conversion. We will continue to improve our
store network in EMEA, and further improve and
expand in AMR and APAC, in the quarters ahead.
Winning in key, global cities
Our Win City execution continued in Q3.
In London, Q3 sell-out was negative by 11%. Sell-out was
negatively impacted by our company-owned store at
Bicester Village due to limited end-of-life inventory.
Our two other stores in Harrods and Selfridges
respectively reported continued good performance
considering a reduced footfall in the quarter and strong
performance from Beosound Theatre in Q3 of last year.
In London, the opening of our store on New Bond Street
in Mayfair has raised awareness of our brand and
product offerings. The store has experienced steady
traffic and conversion momentum since its opening,
and it serves as an effective venue for events and brand
activations.
In Q3, we introduced an in-store event concept called
the ‘Late Series’. This concept involves inviting some of
London’s most promising emerging artists in music, art
and film to perform live in the store in front of an
audience. The first six events had more than 320
attendees and generated sales and pipeline on the night
of the events. Moreover, the live events have generated
28 pieces of media coverage with an estimated
readership of 240,000 and a total audience reach of 7
million. Through social media only, the six events have
reached 120,000 users and had 62,000 views.
In Paris, we expectedly had a challenging quarter with a
sell-out decline of 31%.
We have taken active measures to turn around our
performance in Paris, executing a management change
locally and working more jointly with our local retail
partner to improve store experience and activation.
To enhance our visibility in Paris, we opened a pop-up
store on the ground floor of the men’s department of Le
Printemps in Q3. The pop-up is a creative expression of
our longevity proposition using the tactile materials of
our products to elevate the brand and customer
experience. It is intended to generate qualified traffic to
our new shop in shop in Le Printemps, opening end of
Q4.
Our efforts in New York yielded sell-out growth of 2%
for the quarter primarily driven by our Soho store.
We continued to drive activations out of our Soho store
catering to local design and music lovers. Our vinyl
night events continued to drive traffic and interest, and
in Q3 we partnered with Grammy Award-winning
bassist, MonoNeon for a special event celebrating art
and music. Leading up to the event, we announced a
limited-edition A9 cover in collaboration with
MonoNeon reflecting and celebrating his unique
approach to music and art, while drawing parallel to his
signature outfits. The actual event yielding both press
coverage, social media reach and attention as well as
sales at the night of the event.
Strategic highlights Q3 2023/24
Page — 10
Management’s review
Interim report 9M 2023/24
We also continued our activities to drive up brand
visibility through partnerships outside our stores. In
Q3, we partnered with Studio Zung placing our
products at the renowned design studio to build
relationships with prominent luxury interior design
firms, to drive awareness and longevity storytelling and
to drive direct sales out of the studio on select product
propositions. Additionally, we partnered with musical
and cultural icons Swizz Beatz and Alicia Keys to
deliver sound experiences for their art collection
exhibiting at the Brooklyn Museum of Arts. The
partnership is expected to drive awareness and equity
to our brand from a highly relevant audience.
In Q3, we also announced our exclusive partnership
with Waldorf Astoria Residences New York, which
offers a new collection of 375 contemporary residences
atop the iconic hotel, opening by the end of 2024.
Future residents have the opportunity to purchase their
home fully furnished as part of an existing turnkey
furniture program, which includes a full suite of audio-
visual Bang & Olufsen products. The partnership is a
unique opportunity for engaging with our target
audience of VHNWIs, in a way that provides for a
seamless and luxurious experience, and it is a
testament to the quality and position of our brand as a
leader in luxury audio and tv.
In Q3 we initiated our Win City efforts in Hong Kong
and expect a city strategy to be in place for roll-out by
the end of Q4.
Exploring existing and new adjacent opportunities
In Q3 we expanded our presence through product
installations at iconic luxury hotels such as Hotel Plaza
Athénée in Paris, and we now have presence in
renowned Dorchester Collection Hotels in both London
and Paris, in d’Angleterre, Copenhagen, in Marina Bay
Sands, Singapore and in Royal Atlantis, Dubai among
other locations. To tap into an attractive hospitality
sector including luxury hotels, yachts and private jets,
we work more programmatically with the area, and
have, in Q3, established a global business-to-business
hospitality unit focusing exclusively on establishing
brand presence and driving sales in luxury hospitality.
Our strategy executions throughout the quarter are
gradually transitioning us to our desired proposition of
Luxury Timeless Technology and strengthening our
business.
Page — 11
Management’s review
Interim report 9M 2023/24
Like-for-like sell-out
Like-for-like sell-out declined by 13%. The decline was
felt across most channels and mainly driven by the
monobrand channel. By contrast, the e-commerce
channel reported growth compared to Q3 of last year.
Lower consumer confidence across the region impacted
overall demand during the quarter. Like for like sell-out
was negative across product categories.
For the first nine months of 2023/24 like-for-like sell-
out increased in the company-owned stores and
ecommerce compared to last year.
Revenue
Revenue was DKK 293m (Q3 22/23: DKK 333m),
equivalent to a decrease of 12.2% (-12% in local
currencies).
Revenue from our branded channels (company-owned,
monobrand and ecommerce) declined during the
quarter driven by a decline in the monobrand channel.
Some demand was pulled forward to Q1 as price
increases were implemented in September 2023. For the
first nine months of 23/24, reported revenue in branded
channels grew by 4%.
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 131 and the assortment in the eTail channel
was reduced compared to Q3 of last year. In addition,
end-of-life deals were made last year in our efforts to
reduce inventory levels.
Revenue from our Staged category decreased by 6%.
TV’s and Soundbars declined, driven by the strong
performance of Beosound Theatre last year following
the launch in Q2 22/23. A strong launch of Beolab 8
supported growth in the Beolab speaker category.
Revenue from the Flexible Living category declined by
28%. Strong performance from Beosound A5 launched
in April 2023 was offset by end-of-life sale of Beosound
A9 4
th
generation in connection with the introduction
of A9 5
th
generation last year.
Revenue from the On-the-go category declined by 15%
mainly due to end-of-life deals in Q3 of last year.
Gross profit
Gross profit amounted to DKK 143m (Q3 22/23: DKK
122m), corresponding to a gross margin of 48.7% (Q3
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 category. In
addition, the gross margin in the On-the-go category
was negatively impacted by end-of-life deals last year.
9M 2023/24
Revenue was DKK 938m (9M 22/23: DKK 972m). This
represented a decrease of 3.6% (-4% in local currencies).
The Staged category grew 5% compared to last year
while the flexible category declined slightly. The On-
the-go category declined mainly due to end-of-life deals
made last year.
Overall, gross margin increased by 12.8pp to 48.3%,
driven by a change in product mix towards higher
margin products as well as increased gross margins in
all product categories. Last year was also impacted by
extraordinary costs for components.
EMEA
Q3 revenue split (%)
62%
56%
15%
15%
23%
29%
23/24 22/23
Staged Flexible Living On-the-go
Q3
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
293 333 -40 938 972 -34
Growth in local currencies
-12%
-7%
-4%
-6%
Gross profit
143 122 21 453 344 109
Gross margin
48.7%
36.8%
11.9pp
48.3%
35.5%
12.8pp
Page — 12
Management’s review
Interim report 9M 2023/24
Like-for-like sell-out
Like-for like sell-out growth was negative at 7%. Our
company-owned stores reported growth driven by
strong double-digit growth from our SoHo store.
Monobrand declined due to poor performance in a
single material geographic market, and a change of the
setup has been initiated. Excluding this single
geographic market, Monobrand reported growth.
Multibrand had double digit negative growth due to the
discontinuation of partners. The Staged and On-the-go
category was on par compared to last year while the
Flexible Living category reported negative sell-out
development.
Revenue
Revenue was DKK 70m (Q3 22/23: DKK 73m), equivalent
to a decrease of 4.0% (positive growth of 1% in local
currencies).
Revenue from company-owned stores was largely on
par compared with last year while revenue from
monobrand dropped slightly. Monobrand declined due
to poor performance in a single material geographic
market, and a change of the setup has been initiated.
The ramp up of our collaboration with Genesis showed
good traction and revenue grew double-digit year on
year. Also, custom installations (CI) continued the good
performance.
The eTail channel declined significantly while
multibrand was on par at a low-level year on year. The
development was in line with the strategic
transformation to reduce our presence in the channels.
We decided to end the partnership with Verizon and T-
mobile and as a result the multibrand channel was
reduced by more than 2,200 stores.
Revenue from the Staged category increased by 33%.
The increase was driven by Beolab speakers across
several products. Beolab 8 had shown good traction
since launch.
The revenue improvement was supported by higher
average selling prices.
Revenue from the Flexible Living category decreased by
18% compared to Q3 of last year. This was mainly
driven by end-of-life sales of Beosound A9 4
th
generation in connection with the introduction of A9 5
th
generation last year.
Revenue from the On-the-go category declined by 20%.
The decline was seen across Bluetooth speakers and
earphones and reflected the ongoing focus to reduce
our presence in the channels, as well as an end-of-life
deal made in Q3 of last year.
Gross profit
Gross profit amounted to DKK 31m (Q3 22/23: DKK
23m). This was equivalent to a gross margin of 45.9%
(Q3 22/23: 31.0%). The underlying margin level was
positively impacted by a change in product mix towards
higher margin products as well as year-on-year price
increases. 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 Q3
of last year.
9M 2023/24
Revenue was DKK 209m (9M 22/23: DKK 242m),
equivalent to a year-on-year decrease of 13.6% (-10% 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 15.4pp to 44.7%, driven by improved
margins across categories as well as positive change in
product mix and no extraordinary components costs.
Americas
Q3 revenue split (%)
35%
32%
23%
19%
42%
49%
23/24 22/23
Staged Flexible Living On-the-go
Q3
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
70 73 -3 209 242 -33
Growth in local currencies
1%
-8%
-10%
-3%
Gross profit
31 23 8 93 71 22
Gross margin
45.9%
31.0%
14.9pp
44.7%
29.3%
15.4pp
Page — 13
Management’s review
Interim report 9M 2023/24
Like-for-like sell-out
Like-for-like sell-out grew 23%, mainly driven by China
with sell-out growth of 36%. Sell-out growth in China
was across product categories and channels coming
against last year’s low comparables. In general,
inventory levels with our partners are improving.
Japan had positive sell-out growth whereas South
Korea reported a small decline.
Sell-out growth in the region was reported across most
product categories.
Revenue
Revenue was DKK 180m (Q3 22/23: DKK 145m),
corresponding to an increase of 24.1% (27% in local
currencies).
Revenue from our Chinese market increased by 33%
(45% in local currencies) and accounted for
approximately 47% of total revenue in APAC. Revenue
from South Korea increased by 25%.
As part of our strategic transformation in China we
have implemented a structural change in the eTail
network and multibrand setup, changing partners and
reducing the number of stores. Coming from a low
level, the eTail channel increased significantly
compared to Q3 of last year while multibrand reported
modest growth.
Revenue from our monobrand channel increased
double-digit despite one specific partner continuing to
have high inventory. While the Chinese economy
remains challenged and consumer demand has not
recovered to pre-COVID levels, we are seeing demand
improving in the monobrand channels.
Revenue from the Staged category increased by 19%
driven by growth in Beolab speakers and Beolab 8 in
particular.
The Flexible Living category increased by 49%, mainly
driven by good performance in A9 5
th
generation and
Beosound A5.
The On-the-go category increased by 13%. Headphones
delivered growth in the quarter as well as Bluetooth
speakers. The development reflected generally higher
activity in the eTail channel after low activity levels last
year.
Gross profit
Gross profit amounted to DKK 92m (Q3 22/23: DKK
61m), equivalent to a gross margin of 50.8% (Q3 22/23:
42.5%).
The increase was driven by improved margins across
categories and last year was also impacted by
extraordinary component costs. The margins were also
supported by price increases implemented since last
year and focus on pricing.
9M 2023/24
Revenue was DKK 563m (9M 22/23: DKK 611m),
equivalent to a year-on-year decrease of 7.9% (-4% in
local currencies). The Staged category reported growth
while Flexible Living and On-the-go declined.
Gross margin increased by 11.9pp to 50.4%, driven by
margin improvements across product categories and no
extraordinary component costs.
APAC
Q3 revenue split (%)
36%
32%
28%
30%
36%
38%
23/24 22/23
Staged Flexible Living On-the-go
Q3
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
180 145 35 563 611 -48
Growth in local currencies
27% -50% -4% -26%
Gross profit
92 61 31 284 235 49
Gross margin
50.8%
42.5%
8.3pp
50.4%
38.5%
11.9pp
Page — 14
Management’s review
Interim report 9M 2023/24
Revenue
Revenue was DKK 71m (Q3 22/23: DKK 84m),
corresponding to a 16.3% decline (-17% in local
currencies).
Licence fee revenue decreased by 10.9%. Revenue from
the automotive industry declined as the industry slowly
recovered from factory strikes in the US. In addition,
income from HP was reduced compared to Q3 of last
year. Licensing income accounted for 75% of total
revenue in Brand Partnering & other activities (Q3
22/23: 72%).
Revenue from co-branded products was on par year-on-
year.
In Q2, we expanded the partnership with Cisco and
introduced the Bang & Olufsen Cisco 950 earphones.
The offering now includes both headphones and
earphones for hybrid work.
Revenue related to aluminium production for third
parties declined compared to Q3 of last year.
Gross profit
Gross profit amounted to DKK 60m (Q3 22/23: DKK
71m), equivalent to a gross margin of 84.5% (Q3 22/23:
84.8%). Margin was on par due to composition between
license and product mix.
9M 2023/24
Revenue was DKK 223m (9M 22/23: DKK 281m),
equivalent to a year-on-year decrease of 20.9% (-20% in
local currencies). The decline came mainly from our
Cisco co-branded products due to the ramp-up last year
and reduced license fee income from HP.
Gross margin increased by 3.6pp to 86.7%, mainly
driven by the reduced share of product revenue from
our brand collaboration with Cisco.
Brand Partnering
& other activities
Q3
YTD
(DKK million)
2023/24
2022/23
Change
2023/24
2022/23
Change
Revenue
71 84 -13 223 281 -58
Growth in local currencies
-17%
47%
-20%
44%
Gross profit
60 71 -11 193 233 -40
Gross margin
84.5%
84.8%
-0.3pp
86.7%
83.1%
3.6pp
Page — 15
Management’s review
Interim report 9M 2023/24
Key events in Q3
New flagship store in London
In December, we opened our new
flagship store on
New Bond Stree
t in London. 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
our first location to feature
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 Bespok
e and private event area for private,
personalised customer events
.
Beosound Bollard
available for sale
In
January, the Beosound Bollard became
available for sale
.
Tuned by Bang & Olufsen's expert
tonmeisters at the headquarters in Struer,
time ever that 98 years of audio innovation
can
be 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 u
nderground. This in turn means that
the visible part of each speaker is sleek,
minimalist, and space efficient.
Art of A9
In
January, we announced the limited-edition
Beosound A9 in collaboration with Grammy
Award
-winning bassist, MonoNeon.
To commemorate the launch of this limited
-
edition Art of the A9, our Madison store in New
York hosted a VIP event
in January, where
MonoNeon performed.
Partnership with Waldorf Astoria
Residences New York
on luxury
residential experience
In January, we announced an exclusive partnership with
Waldorf Astoria
Residences, New York
, the new collection of contemporary residences opening
by the end of 2024. The new residences
are part of Waldorf
Astoria’s expansive
restoration, offering
unprecedented luxury first-class amenities within the
historic fram
ework of the hotel.
Future residents of the new 375 luxury condominiums
can purchase their home
fully furnished as part of an existing turnkey furniture program, which will also
include a full suite of audio
-visual products from Bang & Olufsen.
Page — 16
Management’s review
Interim report 9M 2023/24
Renewed partnership with Ferrari
for
2024 and 2025 seasons
After
a succesful partnership for the 2023 Formula 1 season, we
anno
unced a renewal of our partnership with Scuderia Ferrari for the
2024 and 2025 season
s.
Ba
ng & Olufsen will be a featured brand on Ferrari's SF-24 Formula 1
car and
we will continue to work closely with the Maranello-based
Team to build immersive sound experiences trackside and in Bang &
Olufsen stores worldwide.
Our
partnership with Scuderia Ferrari goes beyond the collaboration
with the racing division
. Following a succesfull product collab, we will
continue to
expand the partnership with the launch of more special
edition products
in 2024.
P
op-up store in Paris
In January, we opened our pop
-up store in
Le
Pr
intemps in Paris, France.
The pop
-up is a creative expression of our
longevity proposition using the tactile
materials of our products to elevate the
brand and customer experience.
It is intended to drive awareness and interest
to our brand, and to generate qualified traffic
to our new shop in shop in Le Printemps,
opening end of Q4.
New store at
Copenhagen
Airport
In February,
we opened the new airport store
at Copenhagen
Airport. The store is a
relocation
to a new and improved location
with
better
reach to the more than
30 million people
that visit Copenhagen
Airport each year.
In addtion, t
his is the second store opening
featuring Bang & Olufsen’s new store desig
n.
S
howcasing our high-end
cinematic range at
ISE
At Integrated Systems Europe (ISE) 2024,
we showcased our latest
high
-end product and home integration portfolio that provide
integrators with products and solutions that create unique experiences
for their clients.
With a focus on
our new high-end cinematic range, including the
soundbar Beosound Theatre, the wireless stereo loudspeaker Beolab 28
and the powerful and compact speaker Beolab 8, ISE presents an
opportunity for Bang & Olufsen to demonstrate how the brand's latest
acoustic innovations seamlessly integrate into smart h
ome solutions.
Beoliving Intelligence
seamlessly integrates our catalogue of speakers,
televisions, and soundbars and ensures control
of all smart home
solutions directly in the Beoliving app
- from climate and security to
lighting and shades
- all from one simple user interface.
Page — 17
Management’s review
Interim report 9M 2023/24
On 17 March 2024, we adjusted our
revenue outlook. In addition, we
narrowed the outlook ranges for EBIT
before special items and free cash
flow. Positive earnings expected for
the full year despite the lower revenue
level.
The outlook is subject to uncertainty as
market challenges persist.
We will continue investing in retail 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 -8% to -5% (previously lower end of 0% to 9%.)
The revenue outlook was adjusted due sales being
impacted by slower-than-expected improvement of
macroeconomic conditions in our key markets in
Europe. Further, we do not foresee a significant
recovery of the Chinese economy to materialise in
2023/24 as previously anticipated.
EBIT margin before special items
EBIT margin before special items is expected to be in
the 0% to 2% range (previously 0% to 6%).
Free cash flow
Free cash flow is expected to be DKK -50m to
DKK 10m (previously lower end of DKK -50m to 100m).
Assumptions
Our expectations are subject to the following
assumptions:
• No worsening of market situation in China for the
remainder of the financial year (previously
improved market conditions in China in H2 23/24.)
• No worsening of macroeconomic conditions in
Europa and US during the remainder of the fiscal
year (previously macroeconomic conditions in
Europe and US will improve during the financial
year.)
• Timely launch of two product innovations in Q4.
• 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 upward pressure on component and logistics
costs.
Sensitivities
The outlook is subject to uncertainty related to
consumer sentiment. In addition, geopolitical
uncertainty has increased. The pace of the economic
recovery in China is also subject to uncertainty.
Revenue outlook for 2023/24 revised
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.
OUTLOOK 2023/24
9M 2023/24 actuals
Outlook 2023/24
as of 17 March
Outlook 2023/24
as of 6 July 2023
Revenue growth in local currencies (%)
-7% -8% to -5% 0% to 9%
EBIT margin before special items (%)
2.5% 0% to 2% 0% to 6%
Free cash flow (DKK million)
-32 -50 to 10 -50 to 100
Page — 18
Consolidated financial statements
9M 2023/24
Q3
YTD
Year
(DKK million)
Notes
2023/24
2022/23
2023/24
2022/23
2022/23
Revenue
4 614 635 1,933 2,106 2,752
Production costs
-288 -358 -910 -1,223 -1,537
Gross profit
Development costs
5 -72 -86 -206 -236 -301
Distribution and marketing costs
-217 -216 -678 -676 -910
Administrative expenses
-29 -33 -98 -101 -128
Operating profit/loss (EBIT)
Financial income
Financial expenses
-14 -5 -54 -42 -56
Financial items, net
-2 3 -19 -26 -28
Profit/loss before tax (EBT)
Income tax
-3 - -4 4 11
Profit/loss for the period
Earnings per share
Earnings per share (EPS), DKK
Diluted earnings per share (EPS-D), DKK
-0.5
-1.2
-1.5
0Condensed income statement
Page — 19
Consolidated financial statements
9M 2023/24
1BCondensed statement of comprehensive income
Q3
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
-7
-3
-2
-5
Value adjustments of hedging instruments reclassified in
Revenue
Production costs
Tax on other comprehensive income/loss
-1
-1
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
9M 2023/24
ASSETS
(DKK million)
Notes
29-02-24
28-02-23
31-05-23
Goodwill
Acquired rights and software
Completed development projects
Development projects in progress
5 108 86 124
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
7 390 396 394
Cash
7 149 212 216
Total current assets
Total assets
EQUITY AND LIABILITIES
(DKK million)
Notes
29-02-24
28-02-23
31-05-23
Share capital
Translation reserve
Cash flow hedge reserve
-1 -2 -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
7 381 400 386
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
9M 2023/24
Q3
YTD
Year
(DKK million)
Notes
2023/24
2022/23
2023/24
2022/23
2022/23
Profit/loss before tax (EBT)
Financial items, net
-3
Depreciation, amortisation and impairment
Operating profit/loss before depreciation,
amortisation and impairment (EBITDA)
Other non-cash items
Change in net working capital
6 -11 66 -75 66 113
Interest received
Interest paid
-16
-12
-45
-29
-44
Income tax received/paid
-3 -3 -12 10 7
Cash flows from operating activities
Purchase of intangible non-current assets
-33 -32 -103 -114 -169
Purchase of tangible non-current assets
-15 -11 -44 -40 -54
Sublease payment
Other cash flows from investing activities
Operational investments
-47 -41 -145 -147 -218
Free cash flow
Purchase of securities
Sale of securities
Financial investments
Cash flows from investing activities
-44 -37 -139 -136 -204
Q3
YTD
Year
(DKK million)
Notes
2023/24
2022/23
2023/24
2022/23
2022/23
Repayment of lease liabilities
-11 -9 -32 -30 -40
Repayment of mortgage loans
-1
-1
-2
-3
-3
Proceeds from loans and borrowings
Repayment of loans and borrowings
-1 - -5 - -
Settlement of matching share programme
Cash flows from financing activities
-13 -15 -39 88 64
Cash and cash equivalents, opening balance
Foreign exchange gain/loss on cash and cash
equivalents
-2
-2
-4
Change in cash and cash equivalents
-5 22 -65 52 58
Cash and cash equivalents, closing balance
Available liquidity
7 158 208 158 208 224
Condensed statement of cash flows
Page — 22
Consolidated financial statements
9M 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
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 29 February 2024
Equity 1 June 2022
Profit/loss for the period
-152
-152
Exchange adjustments of subsidiaries
Fair value adjustments of hedging instruments
-2
-2
Value adjustments of hedging instruments reclassified in
Revenue
Production costs
Income tax on items that will be reclassified to the income statement
-1
-1
Comprehensive income/loss for the period
Share-based payments
Equity 28 February 2023
* The company holds a total of 1,768,231 treasury shares (2,983,739 shares as of 28 February 2023). The decrease was related to exercise of shares related to the ongoing long term incentive programmes.
Page — 23
Consolidated financial statements
9M 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
9M 2023/24
4 Segment information – Q3
(DKK million)
EMEA
Americas
APAC
Regions, total
Brand Partnering
& other activities
All
Q3 2023/24
Revenue
293 70 180 543 71 614
Production costs
-150
-39
-88
-277
-11
-288
Gross profit
143 31 92 266 60 326
Gross margin
48.7%
45.9%
50.8%
49.1%
84.5%
53.2%
Q3 2022/23
Revenue
333 73 145 551 84 635
Production costs
-211
-50
-84
-345
-13
-358
*Gross profit
122 23 61 206 71 277
*Gross margin
36.8%
31.0%
42.5%
37.7%
84.8%
43.6%
(DKK million)
Staged Flexible Living On-the-go Products, total
Brand Partnering
& other activities All
Q3 2023/24
Revenue
285 105 153
543
71
614
Production costs
-122 -50 -105 -277 -11 -288
Gross profit
163 55 48
266
60
326
Gross margin
57.2% 52.6% 31.6% 49.1% 84.5% 53.2%
Q3 2022/23
Revenue
281 108 162
551
84
635
Production costs
-155 -56 -134 -345 -13 -358
*Gross profit
126 52 28
206
71
277
*Gross margin
45.6% 47.9% 18.0% 37.7% 84.8% 43.6%
*
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
9M 2023/24
Segment information – YTD
(DKK million)
EMEA
Americas
APAC
Regions, total
Brand Partnering
& other activities
All
2023/24
Revenue
938 209 563 1,710 223 1,933
Production costs
-485
-116
-279
-880
-30
-910
Gross profit
453 93 284 830 193 1,023
Gross margin
48.3%
44.7%
50.4%
48.5%
86.7%
52.9%
2022/23
Revenue
972 242 611 1,825 281 2,106
Production costs
-628
-171
-376
-1,175
-48
-1,223
*Gross profit
344 71 235 650 233 883
*Gross margin
35.5%
29.3%
38.5%
35.7%
83.1%
41.9%
(DKK million)
Staged Flexible Living On-the-go Products, total
Brand Partnering
& other activities All
2023/24
Revenue
854 347 509
1,710
223
1,933
Production costs
-372 -168 -340 -880 -30 -910
Gross profit
482 179 169
830
193
1,023
Gross margin
56.5% 51.5% 33.3% 48.5% 86.7% 52.9%
2022/23
Revenue
826 376 623
1,825
281
2,106
Production costs
-456 -198 -521 -1,175 -48 -1,223
*Gross profit
370 178 102
650
233
883
*Gross margin
45.0% 47.4% 16.6% 35.7% 83.1% 41.9%
* 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
9M 2023/24
5 Development costs
Q3
YTD
Year
(DKK million)
2023/24
2022/23
2023/24
2022/23
2022/23
Incurred development costs before capitalisation
73 78 213 239 319
Of which capitalised
-25
-19
-81
-79
-117
Incurred development costs after capitalisation
48
59
132
160
202
Capitalisation (%)
34.1% 24.6% 38.3% 33.0% 36.7%
Total charges and impairment losses on development projects
24
27
74
76
99
Development costs recognised in the consolidated income statement
72 86 206 236 301
Incurred development costs before capitalisation ratio (% of revenue)
12.0%
12.3%
11.0%
11.3%
11.6%
6 Change in net working capital
Change in
Change in
Change in
(DKK million)
29-02-24
31-05-23
Q3 2023/24 YTD
Q3 2022/23 YTD
2022/23
Inventories
469
499
30
130
130
Trade receivables
320 341 21 70 56
Other receivables*
42
66
24
20
22
Prepayments
26 24 -2 4 4
Trade payables
-424
-565
-141
-75
-16
Other liabilities
-136 -143 -7 -72 -69
Deferred income - non-current
-0
-0
-
-11
-14
Total
297 222 -75 66 113
*Other receivables were adjusted for financial receivables related to leases of DKK 1m not included as net working capital at 29 February 2024 (31 May 2023: DKK 2m).
Page — 27
Consolidated financial statements
9M 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 29 February, repo transactions
amounted to DKK 381m.
During the quarter, net interest-bearing debt decreased by DKK 9m to a debt of DKK 24m compared to a deposit of
DKK 19m at year-end 2022/23.
(DKK million)
29-02-24
28-02-23
31-05-23
Mortgage loans (non-current)
-54 -56 -56
Mortgage loans (current)
-3 -4 -3
Bank loans (current)
-381
-400
-386
Lease liabilities (non-current)
-89 -83 -109
Lease liabilities (current)
-37 -30 -37
Other non-current liabilities*
-2 -3 -3
Interest-bearing debt
-566 -577 -594
Finance lease receivables (non-current)
2 3 1
Finance lease receivables (current)
1 2 2
Cash (current)
149 212 216
Securities (current)
390
396
394
Interest-bearing assets
542 613 613
Net interest-bearing deposit/debt
-24 36 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 decreased by DKK 6m to DKK 158m (year-end 2022/23: DKK 224m),
consisting of cash and securities offset by repo transactions.
(DKK million)
29-02-24
28-02-23
31-05-23
Cash (current)
149 212 216
Securities (current)
390 396 394
Bank loans (current)
-381 -400 -386
Available liquidity
158 208 224
Including the undrawn part of our ESG-linked credit facility, capital resources were DKK 318m (year-end 2022/23:
DKK 384m), consisting of available liquidity of DKK 158m and undrawn committed credit facilities of DKK 160m.
Page — 28
Consolidated financial statements
9M 2023/24
Financial instruments by category
(DKK million)
29-02-24
28-02-23
31-05-23
Non-current other receivables
22
22
23
Trade receivables
320 327 341
Other receivables
43 70 68
Cash
149 212 216
Financial assets at amortised cost
534 631 648
Securities
390 396 394
Fair value through income statement
390 396 394
Derivatives used for hedge accounting
- 3 0
Fair value through other comprehensive income
- 3 0
Financial assets
924 1,030 1,042
Mortgage loans
57 60 59
Bank loans
381 400 386
Lease liabilities
126 114 146
Trade payables
424
506
565
Financial liabilities at amortised cost
988 1,080 1,156
Derivatives used for hedge accounting
4 8 8
Fair value through other comprehensive income
4 8 8
Financial liabilities
992 1,088 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
9M 2023/24
Management's statement
Executive Management Board:
Board of Directors:
