Page — 1
Interim report
Q1 2024/25
June-August 2024
Page — 2
Management’s review
Interim report Q1 2024/25
Bang & Olufsen reports a Q1 in line with expectations. While revenue declined
due to strong comparables last year, the company delivered a record-high
gross margin.
“We delivered a first quarter in line with our plans and expectations. We had a
decline in revenue. This was mainly due to a strong comparable first quarter last
year, which was positively impacted by increased demand ahead of a planned
price increase in the following quarter. We continued to improve our gross
margin, which landed at a record-high 55.2%. This shows the progress we are
making in building a more robust financial foundation for the company.”
“We continued to execute our strategic priorities with a particular focus on
increasing global brand awareness, optimising the retail network and creating
world-class products. We recently launched our new flagship headphones
Beoplay H100 and are delighted to see that they are off to a good start.
Simultaneously, we have worked to prepare the acceleration of our strategy
execution in order to make the value-creating investments to realise our mid-
term growth plan. We were therefore pleased to get strong support for our plan at
our Annual General Meeting in August, enabling us to increase the share capital
and complete a directed share issue, expectedly before the end of November.”
Kristian Teär, CEO
Financial highlights (Q1 23/24 in brackets)
• Like-for-like sell-out declined by 2% (+8%).
• Revenue declined by 12.4% (+1.2%) year-on-year,
or 12% in local currencies (+5%), to DKK 544m
(DKK 619m).
• Revenue from Branded channels declined by 4%,
also in local currencies (+11%).
• Gross margin was up by 2.6pp to 55.2% (52.6%).
• EBITDA before special items of DKK 39m
(DKK 74m), EBITDA margin before special items
of 7.1% (12.0%).
• EBIT before special items of DKK -17m
(DKK 16m). EBIT margin before special items
of -3.1% (2.6%).
• The free cash flow was DKK -36m (DKK -61m).
FY 2024/25 financial guidance maintained
• Revenue growth in local currencies: -3% to 3%.
• EBIT margin before special items: -2% to 1%.
• Free cash flow: DKK -100m to 10m.
Business highlights
• At the AGM on 15 August 2024, a 20% capital
increase authorisation was approved. A directed
share issue is expected to be conducted before the
end of November 2024. The proceeds will be used
for investments to realise the announced 3-year
growth plan.
• Announcement of global licensing partnership
with TCL electronics to bring “Audio by
Bang & Olufsen” to TCL's premium and high-
end TV portfolio. The partnership spans six years
and has several expansion possibilities over the
coming years.
• Launch of a new flagship headphone,
Beoplay H100.
• Continued optimisation of the retail network,
reducing monobrand partners by 22 (net) year-
on-year across regions.
• The customer base grew by 4% and the number of
customers owning two or more Bang & Olufsen
products increased by 3% quarter-on-quarter.
Q1 highlights
Q1 2024/25 conference call
10 October 2024, at 10.00 CEST via
https://bangolufsen.eventcdn.net/events/interim-report-1st-quarter
Dial-in details (Pin: 193621):
DK: +45 78768490
UK: +44 2037696819
US: +1 6467870157
Revenue growth in LC*
-12%
Gross margin
55.2%
EBIT margin bsi**
-3.1%
Free cash flow, DKK
-36m
* Local currencies ** Before special items
Page — 3
Management’s review
Interim report Q1 2024/25
For definitions, see note 8.7 to the Annual Report 2023/24.
Key figures
Q1
(DKK million)
2024/25
2023/24
Income statement
Revenue
544 619
EMEA
251 303
Americas
68 67
APAC
165 172
Brand Partnering & other activities
60
77
EBITDA before special items
39 74
EBITDA
36 74
EBIT before special items
-17 16
EBIT
-20
16
Special items, net
-3 -
Financial items, net
-1
-5
Profit/loss before tax (EBT)
-21 11
Profit/loss for the period
-17 7
Financial position
Total assets
2,183
2,244
Equity
940 969
Cash
131
141
Available liquidity
139 150
Capital resources
299 310
Net interest-bearing deposit/debt
-68 -44
Net working capital
282
311
Cash flows
Cash flows from operating activities
3
-19
Operational investments
-39 -42
Free cash flow
-36 -61
Q1
(DKK million)
2024/25
2023/24
Key figures
Gross margin, total, %
55.2 52.6
Gross margin, Products, total %
51.0 47.6
Gross margin, Brand Partnering & other activities, %
89.3 87.8
Growth in local currencies, %
-12
5
Like-for- like sell-out growth, %
-2 8
Point of sale - Monobrand, number of doors
383 405
Point of sale - Multibrand, number of doors
2,253 3,942
Point of sale - Custom installers, number of doors
124 42
EBITDA margin before special items, %
7.1 12.0
EBITDA margin, %
6.6 12.0
EBIT margin before special items, %
-3.1 2.6
EBIT margin, %
-3.7 2.6
Marketing cost ratio, %
10.1 11.6
Incurred development costs before capitalisation ratio, %
14.5
10.1
Return on assets, %
-0.8 0.2
Return on invested capital, excl. goodwill, %
-11.4 11.9
Return on equity, %
-1.8 0.6
Full-time employee (FTE) at end of period
990 1,003
Stock-related key figures
Earnings per share, basic (EPS) and diluted (EPS-D), DKK
-0.1
0.1
Price/Earnings
-62.5 158.7
Page — 4
Management’s review
Interim report Q1 2024/25
Developments in Q1 2024/25
Our performance for Q1 was in line with our plans and
expectations. Last year, seasonality was affected by
price increases implemented 1 September 2023
compared to normalised seasonality during Q1 24/25.
Overall, like-for-like sell-out declined by 2%. For the
branded channels (company-owned stores, monobrand
and e-commerce) like-for-like sell-out grew 4% year-on-
year.
Revenue (sell-in) declined 12% year-on-year in local
currencies. The decline was mainly due to price
increases implemented in September 2023 affecting
seasonality, as demand was pulled forward from Q2
into Q1 of last year. These price increases mainly
impacted the Staged products and the monobrand
channel in EMEA.
In general, our branded channels outperformed
multibrand channels. This was a result of the ongoing
channel optimisation process of focusing on branded
channels and reducing presence in multibranded
channels.
In EMEA, we saw soft market demand continue over
the summer. In particular, the UK market continues to
be challenged although growth was reported by
company-owned stores.
In APAC, economic growth in China remains low
relative to pre-COVID, which impacted consumer
sentiment. The market situation is mainly affecting
demand in the multibranded channels while the
monobrand network reported growth year-on-year.
The gross margin rose to a record high of 55.2%
compared to 52.6% in Q1 of last year. The gross margin
trended upwards throughout 23/24, a testament to the
progress we are making and our strategic focus on
building a robust financial foundation for the future.
EBIT margin before special items was negative 3.1%.
This was expected due to the lower revenue level. In
general, Q1 is a quarter with relatively low activity.
Free cash flow improved by DKK 25 m year-on-year to a
negative free cash flow of DKK 36m that was supported
by increased cash flow from operating activities.
Strategy execution
We have made good strategic progress strengthening
our luxury positioning. Brand awareness is a key focus,
and we have entered into partnerships in 2023/2024
that reinforce our luxury positioning. Our dedicated
Retail function, established in November 2023,
supports our ambition of creating luxury experiences
across branded channels and optimising our retail
footprint. In addition, we reduced our presence in
selected multibrand and eTail stores.
Building on our achievements in 2023/24 and with an
aim to drive long-term growth and further improve
profitability, we decided to develop a plan to accelerate
our strategic execution by making value-creating
investments.
The investments will primarily focus on strengthening
our position by building brand awareness, optimising
the retail network and continuing to build world-class
products.
In July 2024, we presented our mid-term financial
ambitions for the period 2025/2026 – 2027/2028 (refer
to page 14 for details on ambitions). The ambitions
entail a plan for profitable growth and are conditional
upon a capital increase of 20% of the total share capital.
At the Annual General Meeting in August, the
authorisation to increase the share capital by 20% was
approved by shareholders. As communicated in July
2024, the capital increase is expected to be carried out
within the first half of 2024/25 (by end November 2024)
as a directed issue and private placement without pre-
emptive rights for existing shareholders.
Brand awareness and pricing
In June, we introduced our new Brand ambassador, the
Formula 1 driver for Ferrari, Charles Leclerc.
Charles Leclerc will become the face of our brand for
2024 and 2025, and we are proud to have such an
outstanding F1 driver representing our brand.
We also partnered with the luxury yacht brand, Riva, to
create the ultimate sound for life on board yachts. With
a shared legacy of excellence in craftsmanship and an
ambition to deliver beautiful sound experiences, we
created two product collaborations on the Beosound A5
and Beosound 2.
The partnership builds on the craftsmanship,
performance and design heritage associated with both
brands, combining our iconic products with Riva's
beauty and style. An icon of fine Italian yachting
artistry, Riva's history dates back to 1842, and the
company is recognised as the vanguard of world
boating.
Business review
Page — 5
Management’s review
Interim report Q1 2024/25
We continue to focus on a closer and broader
engagement with our customers, and during Q1, we
grew our customer base by 4% (quarter-on-quarter). In
addition, the number of customers owning two or more
B&O products grew 3% during the quarter.
In line with our pricing strategy, we implemented price
increases to selected products mainly in the Staged
category in September 2023. We will continue to
implement price increases in accordance with our
pricing strategy and most recently smaller price
increases were made to the portfolio in August 2024.
Product innovations
In the beginning of September 2024, we launched our
new flagship headphones, Beoplay H100, the first
headphones built on our proprietary software platform,
Amadeus platform. With the best headphones we have
created to date this is a significant strengthening of the
On-the-go portfolio. The sales performance of Beoplay
H100 was off to a good start.
Channel development
Our focus on optimising our retail network and creating
unique and luxurious experiences in our branded
channels continued.
We have since Q1 of last year reduced our monobrand
network in the EMEA region by 23 stores (net) year-on-
year to 276 stores at quarter-end. In the beginning of
the quarter, we strengthened our presence in Paris, with
a shop-in-shop in the prestigious department store Le
Printemps.
We collaborate with numerous monobrand partners
across all regions. In the APAC region, we opened a
third monobrand store in the luxurious SKP mall in
Wuhan. We are now present in three SKP malls in
China; Xian, Beijing and Wuhan.
In the US, we have increased our presence through our
custom installer, Origin Acoustics, which is an
important partner in the region.
Out of our 12 defined global Win cities, we are now in
execution in four cities. New York, London, Paris and
Hong Kong. In terms of performance, the Win cities in
total reported a sell-out growth of 11%, which comprise
sell-out across channels in the cities. New York and
London reported strong growth, while Paris reported
modest growth year-on-year due to the Olympics being
held in Paris in July 2024. Hong Kong is still in a ramp-
up phase.
In total, our monobrand network including company-
owned stores constituted 383 stores, which was a net
reduction of 22 since end of Q1 of last year. This is in
line with our ongoing assessment and plan to ensure a
that all monobrand stores deliver unique and
luxurious experiences.
In terms of multibrand and eTail, we continue to limit
our presence and be more selective in both channels.
We have changed partner setup in China towards travel
retail, and in the US, we have discontinued with
partners such as Verizon, BestBuy and T-mobile,
resulting in a reduction of multibrand stores of more
than 1,400 doors in the region year-on-year.
We will continue to improve our store network in EMEA
and further improve and expand in Americas and
APAC.
Monobrand *
Multibrand
Custom installers
Points of sale,
number
31-08-2024 31-08-2023 31-08-2024 31-08-2023 31-08-2024 31-08-2023
EMEA
276 299 1,445 1,526 N/A N/A
Americas
30
29
20
1,478
124
42
APAC
77 77 788 938 N/A N/A
Total
383 405 2,253 3,942 124 42
* Monobrand is including company-owned stores
Page — 6
Management’s review
Interim report Q1 2024/25
License business and Strategic partnerships
In July, we announced our six-year technology
licensing partnership with TCL. Through this
partnership we bring elevated audio experiences to
TCL’s premium TV portfolio with our “Audio by
Bang & Olufsen” proposition, distributed globally
via TCL’s channels and customers.
The first TCL TV products featuring ‘Audio by Bang &
Olufsen’ were announced in August. In addition to
heightened sound quality and performance, all TVs
with “Audio by Bang & Olufsen” feature our proprietary
Beosonic user interface and listening pre-sets, where
users can personalise their audio, enabling us to bring
authentic Bang & Olufsen technology experiences to
millions of consumers.
The partnership has the potential to be one of the most
impactful partnerships for Bang & Olufsen, as there is
scope for expanding into further categories and
additional technology experiences.
Case study: Introducing Beoplay H100
Our newly launched headphones, Beoplay H100,
are intended to deliver exceptional audio
performance whether you are listening to your
favourite music, having a phone call in a noisy
environment, or controlling the effect of the
surrounding environment with active noise
cancelling or audio transparency.
To achieve this, we have invested in developing a
proprietary software platform, the Amadeus
platform. The H100 is our first headphone built on
this platform and demonstrates our craftmanship
within software as well as design and acoustics.
By building on our own platform, we are in full
control of all features and intellectual property (IP)
rights are being generated. The software platform
will be the foundation for future products of this
kind.
We also bring our modular design thinking to our
wearables category for the first time, as a step
towards our ongoing journey to improve product
circularity across our entire portfolio. For Beoplay
H100, we have prioritised longevity, maintenance
and repairability through modular design. We have
also developed our software with the future in mind,
so that the headphones can adapt and evolve with
new technologies for a truly timeless design. To
underpin our promise, the headphones come with a
5-year warranty through our Becocare programme.
Review
“Buying a pair of Beoplay H100 is a bit like
buying a Rolex. It’s an heirloom and an object of
beauty. With B&O’s commitment to sustainability
and product circularity, you can be assured these
headphones will provide many happy years of
musical enjoyment. The sound is impeccable,
and the tone has been tuned to perfection.”
Forbes, 3 September 2024.
Page — 7
Management’s review
Interim report Q1 2024/25
Like-for-like sell-out
In terms of demand from our end customers, like-for-
like sell-out in EMEA decreased by 2% year on year.
Excluding end-of-life deals, like-for-like sell-out growth
was low single-digit year-on-year.
Like-for-like sell-out for company-owned stores and
monobrand grew over the period. Multibrand and eTail
declined significantly in line with our planned reduced
presence in both channels.
In terms of product categories, our Staged products
delivered double-digit growth compared to Q1 of last
year. The Flexible Living category and On-the-go
category reported a decline.
Revenue
Revenue was DKK 251m (Q1 23/24: DKK 303m),
equivalent to a decrease of 17.0% (-17% in local
currencies).
Revenue from our branded channels declined by single-
digit year-on-year. Revenue from company-owned
stores increased while revenue from the monobrand
channel declined.
The drop in monobrand was primarily related to price
increases implemented in Q1 of last year that resulted
in demand being pulled forward from Q2 into Q1. The
implemented price increases led retail partners to
replenish their inventories and execute project sales in
Q1 23/24, primarily in the Staged category.
In addition, end-of-life deals were made last year on
Beosound A9 4
th
generation in connection with the
introduction of the 5
th
generation in April 2023.
Revenue from multibrand as well as eTail decreased by
double-digits compared to last year in line with our
strategic transformation. The number of multibrand
stores was reduced by 81, while a decision was made to
reduce the assortment in the eTail channel compared to
last year. The decision to reduce these channels has
primarily impacted our On-the-go category.
All product categories declined year-on-year. Revenue
from our Staged category and Flexible Living category
decreased by 15%, while revenue from the On-the-go
category declined by 27%.
Gross profit
Gross profit amounted to DKK 123m (Q1 23/24:
DKK 144m), corresponding to a gross margin of 48.9%
(Q1 23/24: 47.3%).
The margin was positively impacted by a change in
product mix towards higher margin products.
The Staged and Flexible Living categories reported
improved gross margins over the period while the On-
the-go category declined.
EMEA
Q1
(DKK million)
2024/25
2023/24
Like-for-like sell-out growth
-2% -3%
Revenue
251 303
Growth in local currencies
-17%
28%
Gross profit
123 144
Gross margin
48.9%
47.3%
Share of total revenue
46%
Page — 8
Management’s review
Interim report Q1 2024/25
Like-for-like sell-out
Sell-out in the Americas fell by 7%. Branded channels
combined grew year-on-year. Company-owned stores
growth was single-digit supported by growth in both
our company-owned stores in New York. Monobrand
reported like-for-like sell-out growth year-on-year.
Multibrand and eTail declined significantly due to our
decision to reduce presence in both channels. Point of
sales in multibrand were reduced by more than 1,450
year-on-year.
In terms of product categories, our Staged products
delivered double-digit growth compared to Q1 of last
year. The Flexible Living category and On-the-go
category reported a decline.
Revenue
Revenue was DKK 68m (Q1 23/24: DKK 67m), equivalent
to an increase of 2.0% (3% in local currencies).
Revenue growth from branded channels was double-
digit, supported by growth in all channels. In a single
material geographic market, we are working on a
change in the setup.
Revenue growth from Custom installations was double-
digit year-on-year and enterprise showed good traction
supported by our collaboration with the Korean luxury
auto maker, Genesis, who has installed Staged products
in Genesis showrooms across the US.
The eTail and multibrand channels declined
significantly year on year. This was in line with the
strategic transformation to reduce our presence in the
channels and consequently impacted the On-the-go
category.
In terms of product categories, our Staged products
revenue increased 30% compared to Q1 of last year. The
Flexible Living category and On-the-go category
reported a decline of 26% and 9%, respectively.
Gross profit
Gross profit amounted to DKK 35m (Q1 23/24:
DKK 30m). This was equivalent to a gross margin of
51.3% (Q1 23/24: 45.5%). The margin was positively
impacted by a change in product mix towards higher
margin products. All product categories delivered
improved gross margins supported by pricing.
Americas
Q1
(DKK million)
2024/25
2023/24
Like-for-like sell-out growth
-7% 5%
Revenue
68 67
Growth in local currencies
3%
13%
Gross profit
35 30
Gross margin
51.3%
45.5%
Share of total revenue
13%
Page — 9
Management’s review
Interim report Q1 2024/25
Like-for-like sell-out
Like-for-like sell-out in APAC declined by 2%.
Monobrand sell-out growth was double-digit, while
declines were reported from multibrand and eTail
channel.
China like-for-like sell-out declined 8%. Like-for-like
sell-out for monobrand as well as multibrand increased
while eTail declined. Inventory levels with our partners
are improving. South Korea, Japan and Taiwan
reported sell-out growth.
In terms of product categories, our Staged products
delivered double-digit growth compared to Q1 of last
year. The Flexible Living category and On-the-go
category reported a decline.
Revenue
Revenue was DKK 165m (Q1 23/24: DKK 172m),
corresponding to a decline of 4.1% (-3% in local
currencies). Branded channels grew year-on-year while
multibranded channels declined.
Revenue from China declined 12% (-13% in local
currencies) and accounted for approximately 50% of
total revenue in APAC. Revenue from other markets
such as South Korea, Japan and Taiwan grew year-on-
year.
Revenue from our monobrand channel in China
increased year-on-year. Inventory levels continue to
improve despite lower consumer sentiment, and we
saw demand improve in the monobrand channel. This
had a positive impact on the Staged category in
particular.
As part of our strategic transformation in China we
have implemented a structural change in the
multibrand setup and eTail network, switching
partners towards travel retail. Revenue from
Multibrand increased while eTail declined. Overall, the
On-the-go category was negatively impacted by the
change year-on-year.
In terms of product categories, revenue from the Staged
category increased by 19%. The Flexible Living category
and On-the-go category decreased by 3% and 28%,
respectively.
Gross profit
Gross profit amounted to DKK 89m (Q1 23/24:
DKK 84m), equivalent to a gross margin of 54.0%
(Q1 23/24: 48.9%) and an improvement of 5.1 pp. year
on year.
The margin was positively impacted by a change in
product mix towards higher margin products. The
Staged and Flexible living categories delivered
improved gross margins supported by pricing whereas
the On-the-go category was on par year-on-year.
APAC
Q1
(DKK million)
2024/25
2023/24
Like-for-like sell-out growth
-2% 29%
Revenue
165 172
Growth in local currencies
-3% -15%
Gross profit
89 84
Gross margin
54.0% 48.9%
Share of total revenue
30%
Page — 10
Management’s review
Interim report Q1 2024/25
Revenue
Revenue was DKK 60m (Q1 24/25: DKK 77m),
corresponding to a 21.5% decline (-23% in local
currencies).
Overall license fees decreased by 20%. License from HP
declined year-on-year in line with our expectations due
to the expiry of the agreement. Licence revenue from
the automotive industry grew year-on-year.
Licensing income accounted for 80% of total revenue in
Brand Partnering & other activities (Q1 23/24: 80%).
Revenue from co-branded products was on par year-on-
year.
Revenue related to aluminium production for third
parties declined slightly compared to Q1 of last year.
Gross profit
Gross profit amounted to DKK 54m (Q1 23/24:
DKK 67m), equivalent to a gross margin of 89.3%
(Q1 23/24: 87.8%). Margin was largely on par with Q1
of last year due to the mix between license and product
sales.
Brand Partnering
& other activities
Q1
(DKK million)
2024/25
2023/24
Revenue
60 77
Growth in local currencies
-17%
-13%
Gross profit
54 67
Gross margin
89.3%
87.8%
Share of total revenue
11%
Page — 11
Management’s review
Interim report Q1 2024/25
Like-for-like sell-out
Sell-out growth declined by 2% compared to the same
period of last year. Excluding end-of-life products, like-
for-like sell-out grew by low single-digits compared to
Q1 of last year.
Like-for-like sell-out for our branded channels
combined grew 4% compared to Q1 of last year.
In terms of product categories, our Staged category
grew by 19%, while the Flexible Living category and On-
the-go category declined both by 19%.
Revenue in Q1
Revenue in Q1 was DKK 544m compared to DKK 619m
in Q1 of last year. This was equivalent to a decline of
12.1% year-on-year (-12% in local currencies).
The drop in reported revenue related to a decline in
product sales of 10.7% (-10% in local currencies) and in
Brand Partnering and other activities of 21.5% (-23% in
local currencies).
Product revenue, regions
The development in product revenue was driven by
reported low single-digit negative growth in branded
channels and a double-digit decline in multibrand
channels.
The drop was primarily related to the EMEA region,
and the price increases implemented in Q1 of last year,
that resulted in demand being pulled forward from Q2
into Q1. The implemented price increases led retail
partners to replenish their inventories and execute
project sales in Q1, primarily in the Staged category.
Modest price increases were implemented in August
2024, which did not result in change in seasonality.
Brand Partnering & other activities
The 21.5% decline (-23% in local currencies) in Brand
Partnering & other activities was mainly due to reduced
license income from HP year-on-year in line with our
expectations due to the expiry of the agreement as per
June 2024.
Product revenue, categories
Staged category
Revenue declined by 4% to DKK 280m. This was mainly
driven by the effects of price increases implemented in
September 2023 on selected products pulling sales from
Q2 into Q1 of last year. The decline was partly offset
by the strong performance of Beolab 8, and higher
average prices relative to last year.
Flexible Living category
Revenue declined by 12% to DKK 95m. The decline was
mainly driven by end-of-life deals of in Q1 of last year.
On-the-go category
Revenue declined by 24% to DKK 109m. Declines were
seen across the category. In general, the reduced
presence of the multibrand channel affected this
category negatively year-on-year. The decrease was
partly offset by the successful launch of Beoplay H100
and improved average selling prices.
Financial review
Revenue split by region, DKKm
Revenue split by category, DKKm
LIKE-FOR-LIKE SELL-OUT GROWTH*
Q1 24/25
Q1 24/25
EMEA
-2%
Staged
19%
Americas
-7%
Flexible Living
-19%
APAC
-2%
On-the-go
-19%
Total
-2%
Total
-2%
* Defined as sell-out from the same stores, provided they were open and active in both periods.
303
251
67
68
172
165
77
60
EMEA
Americas
APAC
Brand Partnering & other activities
Q1 2024/25
Q1 2034/24
291
280
107
95
144
109
77
60
Staged
Flexible Living
On-the-go
Brand Partnering & other activities
Q1 2024/25
Q1 2023/24
Page — 12
Management’s review
Interim report Q1 2024/25
Gross profit
Gross profit was DKK 301m (Q1 23/24: DKK 325m),
corresponding to a gross margin of 55.2% against 52.6%
last year.
A strong pricing focus and improved product and
channel mix improved the gross margin.
Gross profit from regional product sales was DKK 247m
(Q1 23/24: DKK 258m), corresponding to a gross margin
of 51.0% (Q1 23/24: 47.6%). This was an increase of
3.4pp compared to Q1 of last year. The gross margin
improved across regions and most product categories.
The On-the-go category declined year-on-year driven
by lower revenue to absorb the fixed costs.
Gross profit from Brand Partnering & other activities
was DKK 54m (Q1 23/24: DKK 67m), equivalent to a
gross margin of 89.3% (Q1 23/24: 87.8%). The gross
margin was largely on a par with last year due to the
mix between license and product sales.
Currency movements had an immaterial impact on the
gross margin for the quarter.
Capacity costs
Capacity costs were DKK 321m (Q1 23/24: DKK 309m)
corresponding to an increase of 4% mainly due to a
COVID-19-related adjustment of relief packages
received in Q1 last year.
Development costs increased by DKK 16m to DKK 79m
(Q1 23/24: DKK 63m). This was primarily driven by
above mentioned relief package in Q1 of last year. The
incurred development costs before capitalisation ratio
were up 4.4 pp to 14.5% driven by higher overall costs
and lower revenue.
Distribution and marketing costs decreased by DKK 9m
to DKK 206m (Q1 23/24: DKK 215m). The marketing cost
ratio was 10.1% compared to 11.6% in Q1 of last year.
The decrease was driven by lower marketing costs,
especially within the regions.
Administrative expenses increased by DKK 5m to
DKK 36m (Q1 23/24: DKK 31m), primarily driven by
higher advisory costs, and the before mentioned relief
packages of last year.
EBITDA
EBITDA was DKK 36m (Q1 23/24: DKK 74m). This was
equivalent to a margin of 6.6% (Q1 23/24: 12.0%).
EBITDA before special items was DKK 39m (Q1 23/24:
DKK 74m), equivalent to a margin of 7.1% (Q1 23/24:
12.0%).
Special items were DKK 3m (Q1 23/24: DKK 0m) and
related to the re-organisation announced in Q4 of last
year.
EBIT
EBIT was a loss of DKK 20m (Q1 23/24: Profit of
DKK 16m). This was equivalent to an EBIT margin
of -3.7% (Q1 23/24: 2.6%).
EBIT before special items was a loss of DKK 17m (Q1
23/24: Profit of DKK 16m), equivalent to a margin of -
3.1% (Q1 23/24: 2.6%).
Q1
GROSS MARGIN
2024/25
2023/24
Staged
57.2%
54.0%
Flexible Living
52.7% 48.1%
On-the-go
33.4%
34.9%
Products, total
51.0% 47.6%
Brand Partnering & other activities
89.3%
87.8%
Total
55.2% 52.6%
Page — 13
Management’s review
Interim report Q1 2024/25
Cash flows
Free cash flow was DKK -36m compared to DKK -61m
last year. The year-on-year improvement related
primarily to increased cash flows from operating
activities (DKK 22m) due to a less negative change in
net working capital of DKK 19m (Q1 23/24 DKK 89m)
offset by lower EBITDA of DKK 36m (Q1 23/24:
DKK 74m).
Cash flows from operational investments totalled an
outflow of DKK 39m and were slightly lower than last
year (Q1 23/24: DKK 42m).
Cash flows from financing activities were an outflow of
DKK 12m (Q1 23/24: DKK 14m) relating mainly to the
repayment of lease liabilities.
The cash position at the end of the quarter was DKK
131m (31 May 2024: DKK 177m). Total available liquidity
was DKK 139m (31 May 2024: DKK 184m), consisting
of cash DKK 131m, and securities DKK 388m less
DKK 380m in bank loans related to repo transactions.
Net working capital
Net working capital increased by DKK 19m during the
quarter to DKK 282m (31 May 2024: DKK 263m).
Net working capital to the last 12 months’ revenue was
11.2% (Q4 23/24: 10.2%).
Trade receivables decreased by DKK 74m to DKK 235m.
The decrease was driven by lower sales in Q1 than in Q4
last year. Sales with extended credit accounted for 3%
of revenue for the quarter (Q4 23/24: 2%).
Other short-term liabilities decreased by DKK 44m to
DKK 126m during the quarter, primarily driven by
employee-related liabilities.
Net interest-bearing deposits/debt
Net interest-bearing debt amounted to DKK 68m,
compared to DKK 34m at year-end, 31 May 2024. The
increase in debt was mainly due to the negative free
cash flow of DKK 36m for the quarter and the
repayment of lease liabilities. For further details, please
see note 7.
Page — 14
Management’s review
Interim report Q1 2024/25
The outlook for 2024/25 is based on
the planned accelerated strategic
execution, including a capital increase
enabling increased investments as
described in relation to the medium-
term ambitions in the annual report
2023/24.
Revenue growth
Revenue growth in local currencies is expected to be
from -3% to 3%.
EBIT margin before special items
EBIT margin before special items is expected to be from
-2% to 1%.
Free cash flow
Free cash flow is expected to be from DKK -100m to
DKK 0m.
Assumptions
The expectations are subject to the following
assumptions:
• Launch of four or more product innovations
• No deterioration of macroeconomic conditions in
our main markets
• No major changes to events impacting our
monobrand distribution setup in China.
• Exchange rates against DKK, including in particular
USD, CNY and EUR, in line with current exchange
rate levels overall.
• CAPEX is expected to be around DKK 250-275m.
• Capacity costs are expected to increase by around
DKK 100m from 2023/24.
Sensitivities
The outlook for 2024/25 is subject to uncertainty
related to consumer sentiment. In addition, there
continues to be geopolitical and economic uncertainty.
Forward looking expectations
The report contains statements relating to the
expectations for future developments, including future
revenues and operating results, as well as expected
business-related events. Such statements, including
without limitation those relating to the outlook and the
medium-term ambitions, 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 for 2024/25
Revenue growth in local
currencies (%)
-3 to 3%
EBIT margin before
special items (%)
-2% to 1%
Free cash flow (DKK)
-100m to 0m
Safe harbour statement
Mid-term financial ambitions
Organic growth
8%
CAGR* 25/26-27/28
EBIT margin bsi**
8%
in 27/28
Free cash flow, DKK
DKK 250m
in 27/28
Assumptions
The financial ambitions are based on constant
currencies and on the current political and economic
environment and projections. Any change to these
factors may impact the ambitions. The sensitivities
relating to the outlook for 2024/25 apply equally to
the period for the medium-term ambitions.
*
Compound annual growth rate ** Before special items
Page — 15
Consolidated financial statements
Q1 2024/25
Q1
Year
(DKK million)
Notes
2024/25
2023/24
2023/24
Revenue
4 544 619 2,588
Production costs
-243 -294 -1,209
Gross profit
Development costs
5 -79 -63 -286
Distribution and marketing costs
-206 -215 -940
Administrative expenses
-36 -31 -135
Operating profit/loss (EBIT)
-20 16 18
Financial income
Financial expenses
-22 -17 -75
Financial items, net
-1 -5 -25
Profit/loss before tax (EBT)
-21 11 -7
Income tax
Profit/loss for the period
-17 7 -17
Earnings per share
Earnings per share, basic (EPS) and diluted (EPS-D), DKK
-0.1 0.1 0.1
0Condensed income statement
Page — 16
Consolidated financial statements
Q1 2024/25
1BCondensed statement of comprehensive income
Q1
Year
(DKK million)
2024/25
2023/24
2023/24
Profit/loss for the period
-17 7 -17
Items that will be reclassified subsequently to the income statement:
Exchange adjustments of subsidiaries
-3 -5 -4
Fair value adjustments of hedging instruments
-6
-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
-6 - -2
Total comprehensive income/loss for the period
-23 7 -19
Page — 17
Consolidated financial statements
Q1 2024/25
ASSETS
(DKK million)
Notes
31-08-24
31-08-23
31-05-24
Goodwill
Acquired rights and software
Completed development projects
Development projects in progress
5 113 74 132
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
7 388 392 388
Cash
7 131 141 177
Total current assets
Total assets
EQUITY AND LIABILITIES
(DKK million)
Notes
31-08-24
31-08-23
31-05-24
Share capital
Translation reserve
Cash flow hedge reserve
-5 1 -2
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
7 380 383 381
Provisions
Trade payables
Tax payable
Other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Condensed statement of financial position
Page — 18
Consolidated financial statements
Q1 2024/25
Q1
Year
(DKK million)
Notes
2024/25
2023/24
2023/24
Profit/loss before tax (EBT)
-21 11 -7
Financial items, net
Depreciation, amortisation and impairment
Operating profit/loss before depreciation, amortisation and impairment
(EBITDA)
Other non-cash items
-11 -3 33
Change in net working capital
6 -19 -89 -41
Interest received
Interest paid
-24
-14
-63
Income tax received/paid
Cash flows from operating activities
Purchase of intangible non-current assets
-34 -32 -163
Purchase of tangible non-current assets
-6 -10 -55
Sublease payment
Other cash flows from investing activities
-1
Operational investments
-39 -42 -215
Free cash flow
-36 -61 11
Purchase of securities
Sale of securities
Financial investments
Cash flows from investing activities
-37 -39 -209
Q1
Year
(DKK million)
Notes
2024/25
2023/24
2023/24
Repayment of lease liabilities
-11 -10 -45
Repayment of mortgage loans
-1
-1
-3
Proceeds from loans and borrowings
Repayment of loans and borrowings
-6 -3 -
Cash flows from financing activities
-12 -14 -54
Cash and cash equivalents, opening balance
Foreign exchange gain/loss on cash and cash equivalents
Change in cash and cash equivalents
-46 -72 -37
Cash and cash equivalents, closing balance
Available liquidity
7 138 150 184
Condensed statement of cash flows
Page — 19
Consolidated financial statements
Q1 2024/25
Condensed statement of changes in equity
(DKK million)
Share capital*
Translation
reserve
Cash flow
hedge reserve
Retained
earnings
Total
Equity 1 June 2024
Profit/loss for the period
Exchange adjustments of subsidiaries
-3
-3
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 31 August 2024
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
-1
-1
Comprehensive income/loss for the period
Share-based payments
Equity 31 August 2023
* The company holds a total of 1,768,231 treasury shares (1,768,231 shares as of 31 May 2024).
Page — 20
Consolidated financial statements
Q1 2024/25
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 2023/24.
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 2024 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.
All critical accounting estimates and judgements are consistent with those applied in note 1.2 to the consolidated
financial statements in the 2023/24 Annual Report, to which reference is made.
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.
Notes
Page — 21
Consolidated financial statements
Q1 2024/25
4 Segment information – Q1
(DKK million)
EMEA
Americas
APAC
Regions, total
Brand Partnering
& other activities
All
Q1 2024/25
Revenue
251 68 165 484 60 544
Production costs
-128
-33
-76
-237
-6
-243
Gross profit
123 35 89 247 54 301
Gross margin
48.9%
51.3%
54.0%
51.0%
89.3%
55.2%
Q1 2023/24
Revenue
303 67 172 542 77 619
Production costs
-159
-37
-88
-284
-10
-294
Gross profit
144 30 84 258 67 325
Gross margin
47.3%
45.5%
48.9%
47.6%
87.8%
52.6%
(DKK million)
Staged Flexible Living On-the-go Products, total
Brand Partnering
& other activities All
Q1 2024/25
Revenue
280 95 109 484 60 544
Production costs
-120 -45 -72 -237 -6 -243
Gross profit
160 50 37 247 54 301
Gross margin
57.2% 52.7% 33.4% 51.0% 89.3% 55.2%
Q1 2023/24
Revenue
291 107 144 542 77 619
Production costs
-135 -55 -94 -284 -10 -294
Gross profit
156 52 50 258 67 325
Gross margin
54.0% 48.1% 34.9% 47.6% 87.8% 52.6%
Gross profit is a segment KPI. There are no unallocated elements, and total gross profit reconciles to the income statement.
Page — 22
Consolidated financial statements
Q1 2024/25
5 Development costs
Q1
Year
(DKK million)
2024/25
2023/24
2023/24
Incurred development costs before capitalisation
79 63 315
Of which capitalised
-23
-26
-127
Incurred development costs after capitalisation
56
37
188
Capitalisation (%)
29.0% 42.2% 40.2%
Total charges and impairment losses on development projects
23
26
98
Development costs recognised in the consolidated income statement
79 63 286
Incurred development costs before capitalisation ratio (% of revenue)
14.5%
10.1%
12.2%
6 Change in net working capital
Change in
Change in
Change in
(DKK million)
31-08-24
31-05-24
Q1 2024/25
Q1 2023/24
2023/24
Inventories
451 447 -4 21 -52
Trade receivables
235
309
74
14
-32
Other receivables*
50 52 2 13 -14
Prepayments
37
27
-10
-
3
Trade payables
-365 -401 -36 -162 164
Other liabilities
-126
-171
-45
25
-28
Total
282 263 -19 -89 41
*Other receivables were adjusted for financial receivables related to leases of DKK 1m not included as net working capital at 31 August 2024 (31 May 2024: DKK 1m).
Page — 23
Consolidated financial statements
Q1 2024/25
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 31 August, repo transactions
amounted to DKK 411m.
During the quarter, net interest-bearing debt increased by DKK 24m to DKK 68m.
(DKK million)
31-08-24
31-08-23
31-05-24
Mortgage loans (non-current)
-52 -55 -53
Mortgage loans (current)
-3 -3 -3
Bank loans (current)
-380
-383
-381
Lease liabilities (non-current)
-106 -100 -117
Lease liabilities (current)
-45 -36 -45
Other non-current liabilities*
-3 -3 -2
Interest-bearing debt
-589 -580 -601
Finance lease receivables (non-current)
1 2 1
Finance lease receivables (current)
1 1 1
Cash (current)
131 141 177
Securities (current)
388
392
388
Interest-bearing assets
521 536 567
Net interest-bearing deposit/debt
-68 -44 -34
* 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 45 to DKK 139m, consisting of cash and securities
offset by repo transactions.
(DKK million)
31-08-24
31-08-23
31-05-24
Cash (current)
131
141
177
Securities (current)
388 392 388
Bank loans (current)
-380 -383 -381
Available liquidity
139 150 184
Including the undrawn part of our ESG-linked credit facility, capital resources were DKK 299m (year-end 2023/24:
DKK 344m), consisting of available liquidity of DKK 139m and undrawn committed credit facilities of DKK 160m.
Page — 24
Consolidated financial statements
Q1 2024/25
Financial instruments by category
(DKK million)
31-08-24
31-08-23
31-05-24
Non-current other receivables
20
22
20
Trade receivables
235 327 309
Other receivables
51 54 53
Cash
131 141 177
Financial assets at amortised cost
437 544 559
Securities
388 392 388
Fair value through income statement
388 392 388
Derivatives used for hedge accounting
0 2 1
Fair value through other comprehensive income
0 2 1
Financial assets
825 938 948
Mortgage loans
55 58 56
Bank loans
380 383 381
Lease liabilities
151 136 162
Trade payables
365
403
401
Financial liabilities at amortised cost
951 980 1,000
Derivatives used for hedge accounting
9 5 6
Fair value through other comprehensive income
9 5 6
Financial liabilities
960 985 1,006
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 2023/24 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 — 25
Consolidated financial statements
Q1 2024/25
Management's statement
Executive Management Board:
Board of Directors:
