Bang & Olufsen adjusts financial outlook due to China lockdowns
May 10 2022 - 1:58PM
Bang & Olufsen adjusts financial outlook due to China lockdowns
Bang & Olufsen is adjusting its outlook for the financial
year 2021/22 (ending on 31 May 2022) primarily due to expected
impact from continued lockdowns in China. The company now expects
revenue to grow to a range between DKK 2.85bn and DKK 2.95bn. The
lower revenue growth will also impact the company’s EBIT margin
before special items and free cash flow. EBIT margin before special
items is expected to be between -2% and 2%, while free cash flow is
expected to be between DKK -180m and DKK -140m. The free cash flow
is furthermore impacted by higher overdue receivables.
The lockdowns in China have been more extensive than anticipated
when the company published its Q3 results on 7 April 2022. In
addition to the impact on sales, the company is experiencing
restricted access to warehouses, logistical challenges, and
implications for production partners, which are also affecting
product availability outside of China.
CEO Kristian Teär comments:
“It is now clear that the continued and increasingly extensive
lockdowns in China will impact our performance this financial year
to such a degree that we have to adjust our expectations for
2021/22. The lockdowns have been more extensive than we
anticipated, and it is not just affecting sales in China, but also
the global availability of products.”
“Despite these challenges, we keep focus on our priorities. Our
strategy is working. We have launched several award winning
products, we continue to grow our business and expand our customer
base, and we are making good progress in building a more robust
Bang & Olufsen for the future. We have done that while
absorbing extraordinary costs of more than DKK 200 million related
to component scarcity and supply chain challenges.”
In Americas, the company expects revenue growth in Q4, and the
company had solid sell-out growth in March and April. In EMEA,
revenue in Q4 is expected to decline primarily due to high
comparables from last year. Like-for-like sell-out continued to
increase in March and April, however, retailers in Europe are
indicating lower in-store traffic. The company continues to monitor
the development.
The company adjusts its outlook as follows:
|
DKK 2.85bn to DKK 2.95bn(Previously DKK 2.9bn to DKK 3.1bn) |
- EBIT margin before special items:
|
-2% to 2%(Previously low end of 2-4%) |
|
DKK -180m to DKK -140m(Previously low end of DKK 0m to
DKK 100m) |
The company will announce expectations for the coming financial
year 2022/23 in connection with the publication of the annual
report 2021/22 on 6 July 2022.
For further information, please contact:
Martin Raasch EgenhardtInvestor RelationsPhone: +45 5370
7439
Jens Bjørnkjær GamborgGroup Communications & Sustainability
Phone: +45 2496 9371
- BO_2116_Adjusted outlook_UK
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