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CEO Kristian Teär comments:

“It was a challenging year for Bang & Olufsen with COVID-19 and macroeconomic headwinds impacting our business. I am proud to see the continued passion and resilience of our colleagues and partners, and I want to thank them and our customers for their support in 2022/23. We are not satisfied with the financial results and aim to return to profitable growth next year.”

“Our strategy is right, and we aim to scale our initiatives as quickly as we can. Our Ferrari partnership is helping us increase global brand awareness, and we will soon launch our product collaboration. Our Win City concept is working, and we are expanding that to more cities. We have improved our portfolio based on our new software platforms and are building modular and long-lasting products that our customers can enjoy for decades.“

“We still expect much uncertainty in the coming year, especially in China. Therefore, we will also be phasing in our strategic investments while working to ensure a lean cost base and continue improving our profitability. We have the right direction for the year and the future and will work closely with our partners to deliver the right customer experience in the stores, online, and in our products and services.”

Financial highlights, FY 2022/23

Revenue was DKK 2,752m and declined 7% (-8% in local currencies). Product sales declined 9.8% (-11% in local currencies) and Brand Partnering & other activities grew 21.8% (17% in local currencies).
The decline in product revenue was mainly driven by Asia, across all channels and categories. Revenue from China was severely impacted by regional lockdowns and a surge in COVID-19 infections and declined by 28% year-on-year. Reported growth for the three regions EMEA, Asia and Americas was negative by 6%, 19% and positive by 2% respectively (-6%, -21% and -6% in local currencies respectively).
Like-for-like sell-out declined by 2% mainly impacted by China. Like-for-like sell-out in China declined by 12% for the year.
The gross margin was 44.2%, which was 1.1pp lower than last year. The decrease was driven by a change in product mix towards the On-the-go category, where efforts were made to reduce inventory on products with shorter lifecycles.
The combined additional supply chain costs for components and logistics were DKK 160m, corresponding to a 6pp impact on product gross margin (DKK 220m last year).
EBIT before special items was negative DKK 105m, equivalent to an EBIT margin before special items of negative 3.8% (2021/22: 1.8%). The margin was impacted by the overall revenue decline and the decline in gross margin.
Free cash flow was DKK -20m (2021/22: DKK -172m). Free cash flow was positively impacted by improved inventory levels.
Available liquidity was DKK 224m 31 May 2023 (31 May 2022: DKK 301m).