Bang & Olufsen interim report Q1 2021/22: Positive EBIT margin and free cash flow driven by 44% revenue growth
October 06 2021 - 1:51AM
Bang & Olufsen interim report Q1 2021/22: Positive EBIT margin
and free cash flow driven by 44% revenue growth
The company continued to execute on the turnaround strategy and
maintained the strong momentum from last year. For the first time
since the financial year 2007/08, Bang & Olufsen delivered a Q1
with both positive EBIT before special items and positive free cash
flow.
Revenue grew 44% in local currencies year-on-year. The company
delivered growth across all regions and product categories,
improved the gross margin and benefitted from the full run-rate
effect of the cost reduction programme implemented last year.
CEO Kristian Teär comments:
“We are pleased with the progress we made in the first quarter.
Despite the pandemic and continuous challenges with global supply
chain issues, the hard work of our employees and partners helped us
to deliver 44% growth and a profitable Q1 for the first time since
2007/08. The results were driven by solid growth across all regions
and product categories and the full effect of our cost reduction
programme.”
“We have entered the second phase of our turnaround where we
focus on building more robustness into our business, while
delivering double-digit growth and improving our profitability. In
the first quarter, we made strong progress on our strategic focus
areas. We grew our customer base, strengthened our organisation,
launched new product innovations, continued our digital
transformation, and enhanced the customer experience. All in all,
we are pleased to see that our strategy is working, and we remain
on track to deliver on our full-year expectations.”
Financial highlights, Q1 2021/22
- Revenue grew 44% in local currencies, across all regions and
product categories.
- Flexible Living maintained the high momentum from last year,
growing by 87%. The Staged and On-the-go categories delivered 35%
and 48% growth respectively. Within all product categories, growth
was driven by both existing and new products.
- Component shortages remained a challenge and had a negative
impact on both growth and margins. The company’s sourcing team has
continued to successfully secure components, but there are still
longer delivery times on specific products – especially within the
Staged category.
- Gross profit was DKK 299m (Q1 20/21: DKK 198m). This was
equivalent to a gross margin of 44.8% (Q1 20/21: 42.8%). The
improved gross margin was driven by a 4.4pp increase in product
gross margin as a result of a favourable product mix, price
increases and a better revenue to fixed costs ratio. The
improvement was partly offset by higher component and logistics
costs.
- EBIT was DKK 7m (Q1 20/21: DKK -49m). This corresponded to an
EBIT margin of 1.1% (Q1 20/21: 9.0%).
- EBIT before special items was DKK 9m, equivalent to a margin of
1.4% (Q1 20/21: -8.4%).
- Earnings for the period were a profit of DKK 1m (Q1 20/21: loss
of DKK 49m).
- Free cash flow was DKK 21m (Q1 20/21: DKK -62m), driven by
EBITDA.
- Available liquidity was stable at DKK 608m (Q4 20/21: DKK
593m).
Progress on strategic prioritiesThe company
continued to execute on its strategy which delivered profitable
growth while building robustness in the business operations.
- The company hired 85 new employees, particularly in the
software and engineering areas, with the aim of building the right
teams, capabilities and structures.
- Q1 saw the launch of three product innovations, Beovision
Contour in a 55’’ version, Beoplay EQ, and stereo pairing as a
software update for products on the new product platform.
- To support the product and platform launches, several marketing
activations were executed, including the launch campaign for
Beoplay EQ with Chinese musician Lay Zhang.
- The six core European and two core Asian markets achieved 37%
and 17% year-on-year growth respectively. Last year, revenue in
China was positively affected by orders delayed from Q4 of the
previous year. Adjusting for phasing of orders last year, growth
was just over 30%.
- The brand partnership and licencing agreement with HP was
renewed and the company announced a brand and licencing partnership
with Sagemcom.
- The customer base grew by 7.5% in Q1 and the company expects to
continue the positive trajectory throughout the year.
OutlookThe company maintains the outlook for
the financial year 2021/22, which is as follows:
|
DKK 2.9bn to DKK 3.1bn |
- EBIT margin before special items:
|
2-4% |
|
DKK 0m to DKK 100m |
The outlook is based on certain assumptions and continues to be
subject to high uncertainty due to COVID-19 and general pressure on
supply chains.
Conference call for analysts and investorsThe
company will host a webcast on 6 October 2021 at 10:00 CEST, where
the financial development for Q1 2021/22 will be presented.
The webcast can be accessed at
https://streams.eventcdn.net/bo/q1202122
Dial-in details for participants in the Q&A:DK: +45 7872
3251UK: +44 333 300 9030US: +1 646 722 4956
For further information, please contact:
Martin Raasch EgenhardtInvestor RelationsPhone: +45 5370
7439
Jens GamborgGroup CommunicationsPhone: +45 2496 9371
- Interim report Q1 2021-22
- BO_2109_Interim report Q1 2021-22_UK
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