Interim report for Q3 2023/24

B&O’s strong gross margin performance contributed to positive earnings in Q3 despite lower revenue - Seite 2

Financial highlights, Q3 2023/24

• Revenue declined by 3% (-3% in local currencies) year-on-year. EMEA declined 12% (-12% in local currencies), Americas declined by 4% (increase of 1% in local currencies) and APAC grew by 24% (27% in local currencies).
• Brand partnering & other activities declined by 16% (-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.
• Like-for-like sell-out declined by 2%. In APAC, sell-out grew by 23% driven by sell-out growth in China of 36%, EMEA declined by 13%, while sell-out declined in the Americas by 7%.
• The gross margin was 53.2%, which was 9.6pp higher than in Q3 of last year, driven by the normalisation of component and logistics costs. In addition, the margin was favourably impacted by a strong price focus and on improving margins across regions and product categories.
• EBITDA before special items was DKK 72m (Q3 22/23: DKK 15m) equivalent to an EBITDA margin before special items of 11.7%, compared to 2.4% in Q3 of last year.
• EBIT before special items was DKK 11m (Q3 22/23: DKK -43m) equivalent to an EBIT margin before special items of 1.8%, compared to -6.8% in Q3 of last year.
• The free cash flow was DKK 5m (Q3 22/23: DKK 33m).

Financial highlights, 9M 2023/24

• Revenue declined by 8% (-7% in local currencies) year-on-year.
• The gross margin was 52.9%, an increase of 11.0pp from 41.9% in 9M 22/23.
• EBITDA before special items was DKK 228m (9M 22/23: DDK 51m) equivalent to an EBITDA margin before special items of 11.8%, compared to 2.4% in 9M of last year.
• EBIT before special items was DKK 48m (9M 22/23: DKK -114m) equivalent to an EBIT margin before special items of 2.5%, compared to -5.4% in 9M of last year.
• The free cash flow was DKK -32m (9M 22/23: DKK -47m).

Strategic highlights, Q3 2023/24

• In January, Bang & Olufsen renewed the partnership with Scuderia Ferrari for the 2024 and 2025 seasons after a successful 2023 season.
• The execution of Win City concept for London, Paris and New York continued. In mid-December the company opened its new flagship store on New Bond Street in London. The store has steady traffic and conversion since opening. Overall, London sell-out declined by 11%, which was mainly due to limited end-of-life inventory at Bicester Village. Harrods and Selfridges both reported continued good performance considering lower footfall and a strong sell-out quarter for Beosound Theatre in Q3 of last year.
• In Paris, sell-out was negative at 31%, which was expected. A local management change and new setup with local retail partner was initiated during the quarter.
• New York sell-out grew by 2%. The company-owned stores reported growth driven by a high double-digit performance by the SoHo store.
• The customer base grew by 5% and the number of customers owning two or more Bang & Olufsen products increased by 5% quarter-on-quarter.

Outlook 2023/24