Bang & Olufsen

Earnings Release • Dec 22, 2014

Struer, 2014-12-22 07:55 CET (GLOBE NEWSWIRE) -- Company Annoucement no. 14.23

During the second quarter of the 2014/15 financial year, customer demand for
newly launched products, especially BeoVision Avant continued to be strong. The
quarter also saw a net increase in the number of B1/SiS stores for the first
time since 2007. Automotive showed a stable development in the second quarter
representing a rebound from the challenging first quarter and B&O PLAY sales
through 3rd party channels increased by 36 per cent and now constitutes 42 per
cent of the total B&O PLAY sales confirming the growth opportunity for this
business.

However, ramp-up issues in the production have, to a larger extent than
anticipated, adversely impacted the timing of key product launches, the gross
margin and the capacity cost base. These and other supply-chain issues have had
a significant adverse impact on the Group’s financial results for the quarter.

Therefore the outlook for the 2014/15 financial year has been revised. The
topline guidance of high single digit growth is maintained. The guidance for
earnings before interest and tax (EBIT) is revised from the expectation of an
improving EBIT margin to a negative EBIT margin for the year. EBIT in the
second half of the financial year is expected to be positive, however not
sufficient to compensate for the shortfall in the first half of the financial
year. Free cash flow in the second half of the financial year is expected to be
in the range of DKK 50 million to DKK 100 million through a combination of
earnings and a reduction in net working capital.

Preliminary results for the second quarter of the 2014/15 financial year

Group revenue in the second quarter of the 2014/15 financial year is expected
to decline by approximately 8 per cent compared to the same quarter last year.

The combination of declining revenue, lower gross margin and increased capacity
costs is expected to result in the earnings before interest and tax for the
quarter of negative DKK 90 million to DKK 100 million compared to DKK 31
million last year.

During the second quarter, the net working capital is expected to have improved
compared to the level in the first quarter of the 2014/15 financial year. The
improvement partially mitigated the adverse effect from the net result on free
cash flow for the quarter. Free cash flow was negative DKK 40 million in the
quarter compared to negative DKK 52 million last year.

The Board and the Executive Management will initiate a review to identify
strategic and structural options to increase scale and further reduce
complexity.

The full interim report for the second quarter of the 2014/15 financial year
will be released Tuesday, January 20 between 08:00 and 09:00 CET and a webcast
will be available on www.bang-olufsen.com

Ole Andersen Tue Mantoni

Chairman CEO

Contacts:

CEO: Tue Mantoni, +45 9684 5000

Investors: Claus Højmark Jensen, +45 2325 1067

Press: Jan Helleskov, +45 5164 5375