Interim Report 3rd Quarter 2016-17 (1 June 2016 - 28 February 2017)
Company Announcement No 16.21 - Struer, 2017-04-07 08:01 CEST (GLOBE NEWSWIRE) --
“In the third quarter of 2016/17, Group revenue increased 12 per cent leading to an improved profitability. B&O PLAY showed strong growth momentum, and grew by 53 per cent driven by new product launches and continued expansion of the retail network. Revenue in the Bang & Olufsen segment declined by 6 per cent, negatively impacted by TV sales. Overall, we remain on track to deliver the guidance for the full year, supported by a strong product portfolio, which is expected to continue to drive revenue growth and improve profitability,” says CEO Henrik Clausen.
Third quarter 2016/17
• In line with our expectations, the Group realised a revenue growth of 12 per cent. The B&O PLAY revenue increased by 53 per cent, whereas the Bang & Olufsen segment revenue declined by 6 per cent.
• The Group gross margin increased to 42.6 per cent from 38.0 per cent last year, primarily due to improved gross margins in B&O PLAY, improved product profitability in the Bang & Olufsen segment and a positive impact from increased income in brand partnerships in the Bang & Olufsen segment.
• Capacity costs increased by 28.1 per cent compared to last year. Excluding the effect from higher depreciations on development projects, capacity costs increased by 18.5 per cent, mainly driven by higher distribution and marketing costs.
• EBITDAC was DKK 63 million against DKK 45 million last year, as the growth momentum driving gross profit exceeded the cost increase.
• Free cash flow was DKK 97 million against negative DKK 63 million last year. The improvement was primarily driven by a positive EBITDAC and a positive net working capital development with a significant reduction of trade receivables.
• The Group’s total revenue for the first three quarters of 2016/17 was DKK 2,169 million, resulting in an increase of 12 per cent (14 per cent in local currency). The increase was driven by 32 per cent growth in B&O PLAY (35 per cent in local currency) and 1 per cent growth in the Bang & Olufsen segment compared to last year (3 per cent in local currency). EBITDAC for the first three quarters of 2016/17 was DKK 66 million, an improvement of DKK 76 million compared to last year. Free cash flow in the first three quarters of 2016/17 was improved by DKK 365 million, realising DKK 196 million against negative DKK 169 million last year.
• The outlook for 2016/17 remains unchanged. Revenue for the Group is expected to grow by 10-15 per cent compared to 2015/16, driven by 25-30 per cent growth in B&O PLAY and low single-digit growth in the Bang & Olufsen segment. The EBITDAC margin for the underlying business is expected to improve for the full year compared to 2015/16. The EBITDAC margin is expected to be in the range of 2-3 per cent, excluding the impact from the sale of the Czech assembly subsidiary.
• On 13 March 2017, Bang & Olufsen announced that the company has entered into a share purchase agreement with its long-term partner Tymphany Acoustic Technology HK Limited for the sale of all the shares in Bang & Olufsen’s Czech assembly subsidiary, Bang & Olufsen s.r.o. (company announcement no. 16.16). The divesture of the assembly facility expands Bang & Olufsen and Tymphany’s successful partnership model and supports Bang & Olufsen’s strategy to focus on the core capabilities with an agile and asset light business model. The cash flow impact to Bang & Olufsen is DKK 123 million and the accounting gain is expected to be DKK 33 million, which is expected to be recognised in the fourth quarter of 2016/17. In the short term, no additional impact is expected from the transaction.
Any enquiries about this announcement can be addressed to:
Investor contact, Claus Højmark Jensen, tel.: +45 2325 1067
Press contact, Morten Juhl Madsen, tel.: +45 4030 8986
A webcast will be hosted on 7 April 2017 at 10:00 CET. Access to the webcast is obtained through our website www.bang-olufsen.com