Struer, 2015-09-30 08:00 CEST (GLOBE NEWSWIRE) -- Selskabsmeddelelse nr. 15.05

“The first quarter of 2015/16 showed continued strong growth momentum in the B&O PLAY business area, and, as expected, moderate growth in the Bang & Olufsen business area. The cost reduction initiatives began to show effect in the quarter, resulting in an improved, but still unsatisfactory, profitability of the company. We expect the revenue growth to continue in the near term and work in parallel to improve the profitability of the company. We are on track to deliver the guidance for the year”, says CEO Tue Mantoni.

• Revenue growth of 17 per cent (10 per cent in local currency) was driven by continued growth momentum in B&O PLAY of 62 per cent, where demand for newly launched products was high from all distribution channels, and where the expansion of the number of third party stores continued at a rapid pace.
• The Group’s gross margin showed moderate improvement compared to the same quarter last year. The margin improvement initiatives in the Bang & Olufsen segment began to show a positive effect. Whereas the Group gross margin was adversely impacted by a higher relative share of turnover from the B&O PLAY segment, as well as a lower overall gross margin in the B&O PLAY segment. The decline in the B&O PLAY gross margin was mainly due to a change in the product and channel mix. The Bang & Olufsen segment gross margin was adversely impacted by approximately DKK 12 million of costs previously allocated to Automotive which the company is planning to eliminate over time.
• Capacity costs were 14 per cent lower than last year, as savings initiatives began to take effect. In addition, the costs were improved as a result of the divesture of company owned stores in Australia and a lower level of marketing activity than in the same quarter last year. The capacity costs for the first quarter included costs for shared functions previously allocated to Automotive of DKK 11 million.
• Earnings before interest and tax (adjusted for costs previously allocated to Automotive) were negative DKK 82 million, compared to negative DKK 139 million last year. The improvement was mainly driven by the increase in revenue and lower capacity costs.

• Free cash flow for the first quarter was negative DKK 168 million compared to negative DKK 241 million in the same quarter last year. The free cash flow in the first quarter, was adversely impacted by one-off payments to advisors in connection with the Automotive transaction of DKK 20 million.

Any enquiries about this announcement can be addressed to:

Investor contact, Claus Højmark Jensen, tel.: +45 2325 1067

Press contact, Jan Helleskov, tel.: +45 5164 5375

A webcast will be hosted on 30 September 2015 at 10.00 CET. Access to the webcast is obtained through our home page www.bang-olufsen.com.