Bang & Olufsen

Earnings Release • Aug 13, 2014

“Bang & Olufsen realized revenue of DKK 2,864 million in the 2013/14 financial
year, corresponding to an increase of 2 per cent. EBIT in the fourth quarter
was DKK 64 million leading to an EBIT for the year of DKK 3 million. The
developments in the quarter demonstrated that the strategic transformation
efforts and focused investments in innovation are starting to pay off. The
strong product portfolio and the much improved retail network represent a
strong platform for future growth as the company embarks on the second phase of
its strategy”, says CEO Tue Mantoni.

-- The Group’s revenue was DKK 801 million in the fourth quarter of the
2013/14 financial year compared
to revenue of DKK 740 million in the same period last year, corresponding
to an increase of 8 per cent.

-- The B2C business recorded revenue of DKK 611 million in the fourth quarter
of the 2013/14 financial
year compared to DKK 582 million in the same quarter last year,
corresponding to an increase of 5 per
cent. Europe increased by 4 per cent compared to last year and thus
continued the trend from the third
quarter. BRIC increased by 10 per cent to DKK 82 million. North America
decreased by 24 per cent to
DKK 40 million, due to the restructuring of the retail network. Rest of
World was unchanged compared
to last year.

-- The B2B business recorded revenue of DKK 196 million in the fourth quarter
of the 2013/14 financial
year compared to revenue of DKK 159 million in the same quarter last year,
which was driven by strong
growth in Automotive as well as ICEpower, which grew 20 per cent and 42
per cent respectively.

-- The Group’s gross margin for the fourth quarter was 44.7 per cent, compared
to a gross margin of 35.8
per cent in the same quarter last year. The improved gross margin in the
quarter was, as in the third quarter, a result of higher margins on new
products in the AV segment as well as product mix in the Automotive
segment. In addition, the gross margin last year was adversely effected by
indirect production costs due to reduction in inventory levels.

-- Capacity costs were DKK 295 million in the fourth quarter, compared to DKK
303 million in the same
quarter last year.

-- Earnings before interest and tax for the fourth quarter of the 2013/14
financial year were positive DKK
64 million compared to negative DKK 38 million in the same quarter last
year. The improvement was
mainly driven by the increase in revenue and the significantly higher
gross margin.

-- The Group’s net working capital increased to DKK 657 million at the end of
the the 2013/14 financial
year compared to DKK 557 million at the end of last year. The increase in
net working capital in the quarter, was due to a normal increase in
accounts receivables and inventory related to products launched late in the
quarter. Free cash flow in the quarter was negative DKK 73 million compared
to positive DKK 59 million in the same quarter last year. Last year was
positively impacted by a reduction in net working capital.

-- The 2014/15 financial year is the first year in the second phase of the
“Leaner, Faster, Stronger” strategy. The key focus for the coming strategy
period will be to ensure profitable growth for the company
.

-- The revenue growth in 2014/15 is expected to exceed 5 per cent and will be
sensitive to the success
of the many new products that will be launched during the coming year. The
Group gross margin is
expected to be at a level around that of the 2013/14 financial year. Bang
& Olufsen expects to increase
distribution and marketing costs in the 2014/15 financial year. This will
be done while maintaining
a high level of investment in product innovation. Bang & Olufsen
expects an increase in the Group
EBIT margin compared to the last financial year.

-- After the end of the reporting period Bang & Olufsen a/s carried out a
capital increase through an
accelerated book-building process (refer to company announcement 14.02 of
19 June 2014). The capital
increase represented 3,927,042 shares of a nominal value of DKK 10 each
and generated net proceeds
of DKK 250 million. The net proceeds will be used to accelerate the growth
plan in the second phase of
the strategy.

-- On 26 June 2014 Bang & Olufsen announced the appointment of Stefan
Persson as COO from 1 October 2014. Executive Management will hereafter
consist of CEO Tue Mantoni, CFO Anders Aakær Jensen, who joined Bang &
Olufsen on 1 August 2014, and COO Stefan Persson.

Any enquiries about this announcement can be addressed to:

CEO, Tue Mantoni, tel.: +45 9684 5000

Investors, Claus Højmark Jensen, tel: +45 2325 1067

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

A webcast will be hosted on 13 August 2014 at 10.00 CET. Access to the webcast
is obtained through our home page www.bang-olufsen.com.