Bang & Olufsen A/S · OMXCOP:BO
Bang & Olufsen A/S — FY2016/17 Earnings Presentation
21 slides from Bang & Olufsen A/S's earnings presentation, Jul 12, 2017
Slide 1: Annual Report 2016/17
ANNUAL REPORT 2016/17 12 JULY 2017
Slide 2: Disclaimer
DISCLAIMER This presentation does not constitute or form part of and No part of the information contained in this presentation should not be construed as an offer to sell or issue or the should form the basis of or be relied upon in connection with solicitation of an offer to buy or acquire securiti
Slide 3: Agenda
• Highlights AGENDA • Financial results • Strategic direction & outlook • Questions & answers ANNUAL REPORT 2016/17 3
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS 2016/17 • Revenue grew by 12 per cent for the year, driven by 27 per cent growth in B&O PLAY and 3 per cent in Bang & Olufsen • EBITDAC (underlying) was DKK 81 million for the year compared to DKK 14 million last year • Free cash flow was DKK 307 million compared to negative DKK
Slide 5: Execution on Track
EXECUTION ON TRACK S T R E N G T H E N I N G T H E O P E R AT I N G M O D E L • In May, the Czech Republic facility was divested. This allows the company to concentrate on its core capabilities in line with the strategy of transitioning the company to an agile and asset-light model and leveraging te
Slide 6: Financial Results
• Highlights FINANCIAL • Financial results RESULTS • Strategic direction & outlook • Questions & answers ANNUAL REPORT 2016/17 6
Slide 7: Financial Highlights: Key Financial Figures
FINANCIAL HIGHLIGHTS Key financial figures DKK million 4th quarter YTD 16/17 15/16 16/17 15/16 Revenue 785 696 2,954 2,633 • Continued growth momentum driven by B&O PLAY Gross profit 261 263 1,126 952 and brand partnering EBITDAC (underlying) 15 24 81 14 • Brand partnering revenue was DKK 140 millio
Slide 8: Double-Digit Growth in Both Business Units
DOUBLE-DIGIT GROWTH IN BOTH BUSINESS UNITS B A N G & O L U F S E N Q U A R T E R LY R E V E N U E B & O P L AY Q U A R T E R L Y R E V E N U E • The Bang & Olufsen business unit realised a revenue of DKK 471 • B&O PLAY recorded a revenue of DKK 314 million against million, compared to DKK 425 millio
Slide 9: 19 Per Cent Growth in TPR and E-commerce
19 PER CENT GROWTH IN TPR AND E-COMMERCE NEW PRODUCTS DROVE REVENUE GROWTH DEVELOPMENT IN TPR STORES • B&O PLAY revenue through third-party retail and e- • The number of third-party retail stores increased to 6,424 commerce increased by 19 per cent in the quarter, primarily from 5,692 stores at the
Slide 10: Growth in All Regions Except Rest of World
GROWTH IN ALL REGIONS EXCEPT REST OF WORLD N O R T H A M E R I C A , G R E AT E R C H I N A A N D EUROPE WERE THE GROWTH DRIVERS 8% • Revenue in Europe increased, primarily driven by B&O (9%) PLAY sales • Revenue in North America increased, driven by a 431 combination of growth in B&O PLAY sales, hi
Slide 11: Continued Transition of the Operating Model
C O N T I N U E D T R A N S I T I O N O F T H E O P E R AT I N G M O D E L Profit & Loss statement, reported vs. underlying EXTRAORDINARY COSTS AND NON-CASH BALANCE SHEET ADJUSTMENTS IN Q4 Q4 16/17 adjust- Q4 16/17 DKK million reported ments underlying • Gross profit was negatively impacted by DKK 4
Slide 12: Underlying Group Gross Margin Decreased
U N D E R LY I N G G R O U P G R O S S M A R G I N D E C R E A S E D G R O U P G R O S S M AR G I N WAS 3 8 . 6 P E R Gross margin, underlying business CENT AGAINST 39.8 PER CENT LAST YEAR % 4th quarter YTD 16/17 15/16 16/17 15/16 • The gross margin in the Bang & Olufsen business unit was Bang & Olu
Slide 13: Capacity Costs Increased in the Quarter
C A PA C I T Y C O S T S I N C R E A S E D I N T H E Q U A R T E R C APAC I T Y C O S T S I N C R E AS E D R I V E N B Y CONTINUED INVESTMENTS IN DEVELOPMENT COSTS PRODUCT DEVELOPMENT • The capacity costs in the underlying business were DKK 301 • Development costs were DKK 107 million against DKK 94
Slide 14: Net Working Capital and Cash Flow
N E T W O R K I N G C A P I TA L A N D C A S H F L O W N E T W O R K I N G C AP I TAL I M P R O V E D POSITIVE FREE CASH FLOW • The Group’s net working capital was DKK 27 million against • Free cash flow was positive DKK 111 million against negative DKK 319 million last year DKK 18 million last year
Slide 15: Strategic Direction & Outlook
• Highlights STRATEGIC • Financial results DIRECTION & • Strategic direction & outlook OUTLOOK • Questions & answers ANNUAL REPORT 2016/17 15
Slide 16: A Solid Foundation Has Been Created
A SOLID FOUNDATION HAS BEEN CREATED • The business has been focused on the consumer business of Bang & Olufsen and B&O PLAY • More agile operating model with greater focus on the core capabilities and leveraging technology partners in areas which are not core to the business • Three years of high gr
Slide 17: Strategic Direction
STRATEGIC DIRECTION • Becoming the leading global audio lifestyle brand • A more agile business model • Developing the brand and brand partnerships • Innovation based on core capabilities • Strengthening distribution and channels • Realising growth potential in China and the US ANNUAL REPORT 2016/17
Slide 18: 3 Year Financial Targets
3 YEAR FINANCIAL TA R G E T S 3 year targets* 2016/17 Actual 2019/20 target R E V E N U E M O M E N T U M M A I N TA I N E D Revenue • Group revenue momentum maintained, driven primarily by the B&O Group 2,954 > 10% CAGR - Bang & Olufsen 1,718 Low single-digit growth PLAY business unit - B&O PLAY 1,
Slide 19: Outlook for 2017/18
OUTLOOK FOR 2017/18 • Group revenue is expected to grow by around 10 per cent compared to 2016/17 • B&O PLAY is expected to continue to be the main growth driver with growth of more than 20 per cent compared to 2016/17 • The Bang & Olufsen business unit is expected to remain flat and adversely impac
Slide 20: Q&A
• Highlights Q&A • Financial results • Strategic direction & outlook • Questions & answers ANNUAL REPORT 2016/17 20
Slide 21: Investor Relations Contact
I N V E S T O R R E L AT I O N S C O N TA C T : CLAUS HØJMARK JENSEN I N V E S T O R R E L AT I O N S DIRECT TEL. : +45 96 84 12 51 MOBILE TEL. : +45 23 25 10 67 EMAIL: [email protected]