Bang & Olufsen Group Annual Report 2007/08
Profit before tax DKK 154 million against DKK 524 million last year, a decrease of DKK 370 million Turnover DKK 4,092 million against DKK 4,376 million last year, a decrease of DKK 284 million (6 %) (Medicom was recognised in 2006/07 at DKK 101 million) Turnover branded business, a decrease of DKK 202 million from DKK 4,194 million to DKK 3,992 million (5 %) Continued focus on product development Non-recurring expenditures of DKK 40 million and a change in the net effect of capitalisation of DKK 50 million affect the comparison of the 2 years negatively by DKK 90 million EBIT margin 4.8 % Dividend of DKK 3 per share (nominal DKK 10) - approx. DKK 36 million 2
Turnover Branded business ICEpower a/s Internal turnover DKK 3,992 million DKK 118 million DKK -18 million Total DKK 4,092 million -5 % 0 % Decline in turnover of DKK 284 million. (Medicom was recognised in 2006/07 at DKK 101 million). The 3 largest markets in the Group, Denmark, Germany and the UK, recorded a decline of DKK 228 million compared to 2006/07. B&O Automotive increased the turnover from DKK 87 million to DKK 123 million. B&O Enterprise continued the growth - increase in turnover from DKK 96 million to DKK 155 million. 3
EBIT 4.5 % down from 12.1 %. Gross margin 46.2 against 46.6 in 2006/07 due to a larger share of TV-turnover. Development cost increased to DKK 546 million. Net impact of capitalisation DKK -16 million against DKK 35 million last year. Change of DKK 51 million. Non-recurring expenditures amounted to DKK 40 million. Losses and change in provision for bad debts totalled DKK 49 million against DKK 17 million in 2006/07. Automotive is still an investment area with a negative EBIT of DKK 17 million. 4
Loss in associated companies DKK 11 million. Financial costs increased DKK 14 million from DKK 16 million to DKK 30 million. 5
Tax on result for the year amounts to DKK 41 million corresponding to a tax rate of 27.0 %. 6
Net impact of capitalisation DKK -16 million. Capitalised development costs amount to DKK 330 million. Inventories increased by DKK 107 million to DKK 801 million. Trade receivables decreased by DKK 141 million to DKK 593 million. Cash decreased by DKK 89 million to DKK 107 million. 7
Cash flow from: - Operating activities - Investment activities - Financing activities DKK 332 million DKK -254 million DKK -181 million DKK -103 million Financing activities: DKK 348 spent on shareholder related initiatives: - Repurchase of shares DKK 100 million. - Dividend DKK 248 million. Repayment of loans amounts to DKK 49 million. New long term loan of DKK 200 million obtained. 8
9 Proposed dividend of DKK 3 per nominal DKK 10 share, approx. DKK 36 million.
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Changes in number of shops compared to 31/5-07: B1 +45 SIS -101 Other -4 Total -60 Total number of B1-shops: 822 Number of B1 1/6-07 777 New 63 Upgraded 13 Closed/downgraded -31 Total 31/5-08 822 12
Number of newly opened B1-shops * *Of this 5 in Russia and *2 in Ukraine 13
Share of turnover per segment: 2007/08 2006/07 - B1 81 % 75 % - SIS 19 % 25 % 100 % 100 % 14
15 Q4 isolated: Average organic growth -11 %
Turnover level unchanged. 90 % of the turnover is to external customers. Some of the external customers: Samsung TN (Mobile phones) RCF (Professional speakers) Alpine (Domestic HiFi) Pioneer (Home entertainment + Domestic HiFi) B&W (Consumer subwoofers) KEF (Consumer subwoofers) 16
New audio concept A new audio concept, which will set a new standard for the way people can enjoy music in the converging digital world of the future. The product combines the best from Bang & Olufsen s long-standing tradition of manufacturing elegant audio products with the digital present and future. BeoVision 8-40 (2. half year 2008/09) In the second half year the BeoVision 8 family is expanded with a 40 version. BeoVision 4 (2. half year 2008/09) Towards the end of the financial year the BeoVision 4 family is expanded with a completely new product, which, in both size and functionality, will set the standards for Bang & Olufsen s video portfolio. New phone (2. half year 2008/09) Towards the end of the financial year Bang & Olufsen will launch a new phone. 17
Market conditions for the 2008/09 financial year are expected to remain challenging. The first two months of the financial year are below last year s level. Growth and improvement to the results can at the earliest be expected in the second half year where the planned product launches will begin to take effect. The Group expects to be able to maintain its gross margin, and work will continue to focus on the Group s cost structure. On that backdrop, Bang & Olufsen expects to post an operating profit and a result before tax on the same level as or above the result for the previous financial year, based on an expected lower turnover than in the 2007/08 financial year. 18
19 Now launched in 50 and 65
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