Bang & Olufsen interim report Q2 21/22: Bang & Olufsen achieved double-digit growth for the fifth consecutive quarter despite global component scarcity
January 12 2022 - 1:57AM
Bang & Olufsen interim report Q2 21/22: Bang & Olufsen
achieved double-digit growth for the fifth consecutive quarter
despite global component scarcity
In Q2, the company delivered 15% revenue growth in local
currencies and 3.5% EBIT margin before special items, while free
cash flow was positive by DKK 11m. Product sales grew 22%, driven
in particular by the Staged and Flexible Living categories.
The company continued to be adversely impacted by the global
supply chain challenges, which affected product availability and
led to higher cost of goods sold in the quarter.
CEO Kristian Teär comments:
“For the fifth consecutive quarter we delivered double-digit
growth. We continued to see high demand for our products among
customers, and we grew across all regions and channels – despite
the continuous challenges with supply. We are in the middle of our
turnaround, and I am proud to see how our employees and partners
keep on executing in line with our strategy, so we build more
robustness into our business, while maintaining profitable
growth.”
“We made solid progress with our strategy execution in the
quarter. We continued to benefit from a strong focus on our core
markets, we expanded our customer base and launched new product
innovations. In the quarter, we released several software updates,
including Beolink Multiroom, which is the backbone of our product
ecosystem and we expect this to improve the customer experience
significantly. As many other companies, we are still impacted by
the global component shortage, but we remain on track to deliver on
our full-year expectations.”
Financial highlights
- Bang & Olufsen delivered 15% revenue growth in local
currencies and 3.5% EBIT margin before special items. The growth
was driven by all regions, with Asia and Americas delivering the
strongest growth, whereas EMEA was impacted relatively harder by
supply constraints. Challenges related to component scarcity
impacted both growth and profitability negatively.
- The company grew sell-out more than sell-in. Sell-out grew
across all distribution channels and product categories.
- Product sales grew 22%, driven predominantly by the Staged and
Flexible Living categories. Growth was particularly strong within
multibrand, etail and the company’s eCommerce platform. Sales in
EMEA were negatively impacted by controlled returns of mainly
end-of-life products from a few multibrand partners in Germany and
Switzerland. Like-for-like sell-out in the channels showed
double-digit growth.
- Revenue from Brand Partnering & other activities declined
from higher comparable PC sales last year and as PC and car
manufacturing were impacted negatively by component scarcity.
- The gross margin was 44.4%. This represents a 0.2pp decrease
year-on-year. The margin reflected an improved product mix,
increased prices, offset by higher component costs (approx.
4.5pp).
- EBIT before special items was DKK 28m, equivalent to an EBIT
margin of 3.5% (Q2 20/21: 4.1%).
- Earnings for the period were a profit of DKK 10m compared to
DKK 12m last year.
- Free cash flow was DKK 11m (Q2 20/21: DKK 139m). The
year-on-year decline was related to last year’s working capital
improvement, partly offset by improved EBITDA.
- Available liquidity was DKK 534m (Q1 21/22: DKK 608m). The
decline in the quarter was related to the purchase of treasury
shares to cover outstanding LTIP programmes and settlement of the
Danish Holiday Fund.
- For the first six months of the financial year, Bang &
Olufsen delivered 27% revenue growth in local currencies, EBIT
before special items of DKK 37m (H1 20/21: DKK -11m) and a positive
free cash flow of DKK 32m (H1 20/21: DKK 77m).
Progress on strategic prioritiesDespite high
activity levels for securing component supply, and re-working
marketing execution adjusting to available supply, the company
continued to deliver on the strategy at a steady pace.
- The six European core markets delivered 8% growth, adjusted for
product returns. The growth was driven by double-digit sell-out
growth.
- The two Asian core markets delivered year-on-year growth of 32%
in local currencies. The company finalised its China growth plan,
with a strong emphasis on go to market tactics.
- Americas grew 99% in local currencies, mainly driven by the
partnerships with Verizon and BestBuy
- With the launch of two products innovations in Q2, the company
is on track to deliver on the roadmap for 2021/22. In Q2, the
company launched a pilot of the Bespoke Programme inviting
customers to customize and individualize products to their
preference.
- In the first half of the year, a 16% growth in new customers
was registered in the company’s app.
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 (see page 20 in the
interim report for H1 2021/22) and continues to be subject to high
uncertainty due to general pressure on supply chains and
COVID-19.
Conference call for analysts and investorsThe
company will host a webcast on 12 January 2022 at 10:00 CET, where
the financial development for Q2 21/22 will be presented.
The webcast can be accessed at
https://streams.eventcdn.net/bo/q2202122/ Dial-in details for
participants in the Q&A:DK: +45 7815 0109 UK: +44 333 300 9034
US: +1 646 722 4902
For further information, please contact:
Martin Raasch EgenhardtInvestor RelationsPhone: +45 5370
7439
Jens Bjørnkjær GamborgGroup CommunicationsPhone: +45 2496
9371
- Interim report H1 202122
- BO_2112_interim report Q2 2021_22_UK
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