Release Date: October 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bang & Olufsen AS (BGOUF, Financial) achieved a record high gross margin of 55.2%, indicating strong financial performance.
- The company reported double-digit sell-out growth in its 'win cities' and single-digit growth in branded channels.
- The launch of the new flagship headphones, H100, has been successful, receiving positive market reviews.
- Bang & Olufsen AS (BGOUF) has entered a promising six-year technology licensing partnership with TCL, enhancing its audio presence in TCL's premium TV portfolio.
- The company is focusing on strategic investments to strengthen its luxury position, including brand awareness and retail network optimization.
Negative Points
- Revenue declined by 12% in local currencies compared to the previous year, attributed to strategic changes and high comparables from last year.
- The EBIT margin before special items was negative 3.1%, primarily due to lower revenue levels.
- Sell-out in the Americas declined by 7%, and like-for-like sell-out in APAC decreased by 2%, indicating regional challenges.
- The company experienced a significant reduction in multibrand stores, particularly in the US, impacting overall sales channels.
- Free cash flow for Q1 was negative, at minus DKK36 million, reflecting ongoing financial challenges.
Q & A Highlights
Q: Can you provide an update on the expected growth investments discussed in July? Have you initiated the cost ramp-ups?
A: We have not yet conducted any growth investments. We are currently in the planning phase, preparing for the necessary investments and getting the right people on board. No ramp-up costs are included in this quarter's numbers, but we expect some operational expenditure in the coming quarters.
Q: What was the revenue effect from the Genesis collaboration in the US?
A: While we won't comment on specific numbers, the segment of our revenue in the US related to the Genesis partnership is growing at high double digits compared to last year. We expect this growth to decline in the second half of the year.
Q: When should we expect the effect of the multi-brand ramp-down in China to phase out in year-on-year growth numbers?
A: The multibrand and e-tail channels in China are experiencing significant discounting, which we are trying to avoid. The timing of when this will wind down depends on the expansion of our monobrand channels, which is part of our midterm ambition. Multibrand will remain important next year.
Q: Could you talk about your product launch plans for the remainder of the year? Should we expect any major launches?
A: We have announced plans to launch four or more products this year. While I can't share specifics now, we are following our plans and will have exciting announcements in due course. The H100 launch exemplifies our commitment to high performance and design.
Q: What's the status of the expected share issue to be finalized before the end of November?
A: We are on track with the timeline announced for the directed rights issue. We are in dialogue with existing and potential new shareholders, but I can't provide further details at this time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
