Q3 WEAKER THAN EXPECTED, BUT STRATEGY IMPLEMENTATION
IS ON TRACK AND OUTLOOK FOR THE YEAR IS MAINTAINED
"Bang & Olufsen delivered a weaker result than expected in a continuing difficult market. Profit before tax was DKK 19 million in the third quarter compared to DKK 30 million in a strong third quarter last year, where we launched BeoVision 10-32 and BeoSound 8-, says CEO Tue Mantoni.
"For the full financial year, an outlook of a 2011/12 profit before tax is maintained at the level of DKK 100 million based on a revenue level exceeding DKK 3,000 million-.
"Our new subbrand B&O PLAY is off to a good start, and the first product Beolit 12 has received the highly regarded red dot design award. Bang & Olufsen has also, for the third year running, been awarded Best Brand in Car-HiFi by the German car magazine auto motor und sport. With BeoVision 12, BeoLab 12 and Beolit 12 we launched three strong products towards the end of the third quarter, and we expect a significant effect from these products in the fourth quarter. A number of distribution agreements for B&O PLAY were also entered into towards the end of the third quarter, and will only start having an impact in the fourth quarter.-
"In the fourth quarter Bang & Olufsen will launch a new TV-concept for which we have great expectations under the subbrand B&O PLAY. In combination with the prospect of increased sales of video products as a result of a summer with EURO 2012 and the Olympic Games, we expect a strong fourth quarter.-
Headlines
The Group's revenue was DKK 766 million for the third quarter of the 2011/12 financial year compared to revenue of DKK 820 million last year.
The B2C business line recorded revenue of DKK 638 million in the third quarter of the 2011/12 financial year compared to DKK 660 million in the same period last year. The B2B business line recorded revenue of DKK 126 million in the third quarter of the 2011/12 financial year compared to revenue of DKK 142 million in the same period last year.
AV revenue in BRIC markets increased by 5 per cent and 20 percent in North America, whereas AV revenue in Europe decreased by 3 per cent.
The Group's gross margin for the third quarter of the 2011/12 financial year was 38.3 per cent against a gross margin of 39.8 per cent in the same period last year. The lower gross margin is primarily driven by changes in the product mix and the distribution development.
The profit before tax for the third quarter was DKK 19 million against a profit of DKK 30 million last year.
Free cash flow in the third quarter was positive at DKK 16 million compared to DKK 91 million in the same period last year. The Group's net working capital was DKK 525 million at the end of the third quarter of the 2011/12 financial year against DKK 445 million last year, which is an increase of 18 per cent.
The Group's total revenue for the first three quarters of the 2011/12 financial year was DKK 2,140 million against DKK 2,156 million last year, which is a decrease of 1 per cent. The profit before tax for the first three quarters of the 2011/12 financial year was DKK 27 million against DKK 32 million last year. In the first three quarters of the 2011/12 financial year, the negative net impact from non-recurring items was DKK 3 million, compared to DKK 21 million last year. Free cash flow in the first three quarters of the 2011/12 financial year was negative DKK 108 million compared to positive DKK 24 million last year.
The launch of three new products, BeoVision 12, BeoLab 12, and Beolit 12 towards the end of the third quarter is together with coming product introductions, expected to have a significant positive impact on the result in the fourth quarter.
For the financial year, an outlook of a 2011/12 profit before tax is maintained at the level of DKK 100 million based on a revenue level exceeding DKK 3,000 million. The EBIT-margin for the 2011/12 financial year is expected to be 3.5-4.0 per cent.
After the end of the reporting period Beolit 12 has received the highly regarded red dot design award, and Bang & Olufsen has for the third year running been awarded Best Brand in Car-HiFi by readers of the magazine auto motor und sport. The Group has also entered into an agreement with the Shreyans Group which is Bang & Olufsen's new master dealer in India. Shreyans has significant experience with luxury goods and the setup of luxury brand distribution.
Any enquiries about this announcement can be addressed to: President & CEO Tue Mantoni, tel.: +45 9684 5000.
A webcast will be hosted on 18 April 2012 at 10.00. Access to the webcast is obtained through our home page www.bang-olufsen.com.
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"Bang & Olufsen delivered a weaker result than expected in a continuing difficult market. Profit before tax was DKK 19 million in the third quarter compared to DKK 30 million in a strong third quarter last year, where we launched BeoVision 10-32 and BeoSound 8-, says CEO Tue Mantoni.
"For the full financial year, an outlook of a 2011/12 profit before tax is maintained at the level of DKK 100 million based on a revenue level exceeding DKK 3,000 million-.
"Our new subbrand B&O PLAY is off to a good start, and the first product Beolit 12 has received the highly regarded red dot design award. Bang & Olufsen has also, for the third year running, been awarded Best Brand in Car-HiFi by the German car magazine auto motor und sport. With BeoVision 12, BeoLab 12 and Beolit 12 we launched three strong products towards the end of the third quarter, and we expect a significant effect from these products in the fourth quarter. A number of distribution agreements for B&O PLAY were also entered into towards the end of the third quarter, and will only start having an impact in the fourth quarter.-
"In the fourth quarter Bang & Olufsen will launch a new TV-concept for which we have great expectations under the subbrand B&O PLAY. In combination with the prospect of increased sales of video products as a result of a summer with EURO 2012 and the Olympic Games, we expect a strong fourth quarter.-
Headlines
The Group's revenue was DKK 766 million for the third quarter of the 2011/12 financial year compared to revenue of DKK 820 million last year.
The B2C business line recorded revenue of DKK 638 million in the third quarter of the 2011/12 financial year compared to DKK 660 million in the same period last year. The B2B business line recorded revenue of DKK 126 million in the third quarter of the 2011/12 financial year compared to revenue of DKK 142 million in the same period last year.
AV revenue in BRIC markets increased by 5 per cent and 20 percent in North America, whereas AV revenue in Europe decreased by 3 per cent.
The Group's gross margin for the third quarter of the 2011/12 financial year was 38.3 per cent against a gross margin of 39.8 per cent in the same period last year. The lower gross margin is primarily driven by changes in the product mix and the distribution development.
The profit before tax for the third quarter was DKK 19 million against a profit of DKK 30 million last year.
Free cash flow in the third quarter was positive at DKK 16 million compared to DKK 91 million in the same period last year. The Group's net working capital was DKK 525 million at the end of the third quarter of the 2011/12 financial year against DKK 445 million last year, which is an increase of 18 per cent.
The Group's total revenue for the first three quarters of the 2011/12 financial year was DKK 2,140 million against DKK 2,156 million last year, which is a decrease of 1 per cent. The profit before tax for the first three quarters of the 2011/12 financial year was DKK 27 million against DKK 32 million last year. In the first three quarters of the 2011/12 financial year, the negative net impact from non-recurring items was DKK 3 million, compared to DKK 21 million last year. Free cash flow in the first three quarters of the 2011/12 financial year was negative DKK 108 million compared to positive DKK 24 million last year.
The launch of three new products, BeoVision 12, BeoLab 12, and Beolit 12 towards the end of the third quarter is together with coming product introductions, expected to have a significant positive impact on the result in the fourth quarter.
For the financial year, an outlook of a 2011/12 profit before tax is maintained at the level of DKK 100 million based on a revenue level exceeding DKK 3,000 million. The EBIT-margin for the 2011/12 financial year is expected to be 3.5-4.0 per cent.
After the end of the reporting period Beolit 12 has received the highly regarded red dot design award, and Bang & Olufsen has for the third year running been awarded Best Brand in Car-HiFi by readers of the magazine auto motor und sport. The Group has also entered into an agreement with the Shreyans Group which is Bang & Olufsen's new master dealer in India. Shreyans has significant experience with luxury goods and the setup of luxury brand distribution.
Any enquiries about this announcement can be addressed to: President & CEO Tue Mantoni, tel.: +45 9684 5000.
A webcast will be hosted on 18 April 2012 at 10.00. Access to the webcast is obtained through our home page www.bang-olufsen.com.
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