Bang & Olufsen a/s Group Annual Report 2016/17 and interim report 4th quarter 2016/17
Company Announcement No 17.01 - Struer, 2017-07-12 08:14 CEST (GLOBE NEWSWIRE) --
Group revenue increased 13 per cent in the fourth quarter of 2016/17, resulting in a satisfactory growth for the full year of 12 per cent. As part of the long-term strategy to create a more profitable and agile asset-light business, the fourth quarter included significant investments into product development and costs related to continued adaptation of the company’s operating model.
Fourth quarter 2016/17
The Group realised a revenue growth of 13 per cent in line with expectations. The B&O PLAY business unit revenue increased by 16 per cent compared to the same quarter last year, despite the high level in Q4 2015/16. The Bang & Olufsen business unit revenue increased by 11 per cent, driven by the launch of new products and new brand partnering deals.
During the quarter, the company continued to take initiatives to adapt its operating model. Therefore, the fourth quarter was impacted by extraordinary costs and non-cash adjustments in the company’s balance sheet for the year end 2016/17 (cf. company announcement no. 16.27). In total, the Group gross margin was impacted by DKK 42 million and the capacity costs were impacted by DKK 86 million.
The underlying Group gross margin decreased to 38.6 per cent from 39.8 per cent last year, primarily due to the product mix and negative impact from exchange rates.
Capacity costs in the underlying business increased by 11 per cent compared to last year. This was due to higher development costs related to upcoming product launches.
EBITDAC in the underlying business was DKK 15 million against DKK 24 million last year. The decline was mainly due to the above-mentioned costs related to new product launches and increased distribution and marketing costs in B&O PLAY.
Free cash flow was positive DKK 111 million against negative DKK 18 million last year. Cash flow was positively impacted by DKK 123 million from the sale of the Czech subsidiary.
Full year 2016/17
The Group’s total revenue for 2016/17 was DKK 2,954 million, corresponding to an increase of 12 per cent (14 per cent in local currency), driven by 27 per cent growth in B&O PLAY (28 per cent in local currency) and 3 per cent growth in the Bang & Olufsen business unit (5 per cent in local currency). EBITDAC of the underlying business was DKK 81 million, which was an improvement of DKK 67 million compared to last year. Free cash flow was DKK 307 million against negative DKK 187 million last year, resulting in an improvement of DKK 494 million.
On 31 May 2017, Bang & Olufsen completed the divestiture of its Czech subsidiary and announced non-cash adjustments to the balance sheet in the fourth quarter of 2016/17 (cf. company announcement no. 16.27). As a consequence of the transaction, all of Bang & Olufsen’s 322 Czech employees were transferred to Tymphany.
The Group expects to continue the growth momentum and increase revenue by around 10 per cent compared to 2016/17 and to increase the underlying EBITDAC margin to 8-10 per cent in 2017/18. For further details regarding to the outlook for 2017/18 and the updated 3 year financial targets, please see page 10 and the 2016/17 Annual Report.
Any enquiries about this announcement can be addressed to:
Investor contact, Claus Højmark Jensen, tel.: +45 2325 1067
Press contact, Jens Gamborg, tel.: +45 2496 9371
A webcast will be hosted on 12 July 2017 at 10:00 CET. Access to the webcast is obtained through our website www.bang-olufsen.com