Bang & Olufsen

Earnings Release • Jan 16, 2014

Q2 HIGHLIGHTS

“In Q2, we managed to deliver revenue slightly above last year’s level, despite
a tough year-on-year comparison. Revenue was driven by increases in all
segments and regions, with the European AV business as the only exception. The
feedback and innovation awards given to the newly launched wireless speakers
confirm Bang & Olufsen’s leadership position in sound and design innovation.
The quarter signals that the strategic transformation efforts and focused
investment in innovation are starting to pay off and we maintain the guidance
for the year”, says CEO Tue Mantoni.

-- The Group’s revenue was DKK 822 million for the second quarter of the
2013/14 financial year compared to revenue of DKK 819 million in the same
period last year.
-- The B2C business recorded revenue of DKK 632 million in the second quarter
of the 2013/14 financial year compared to DKK 635 million in the same
period last year. Newly launched products and B&O PLAY products showed
strong performance and were almost able to offset the decline in AV.
-- B2C revenue in BRIC markets increased by 45 per cent. North America
increased by 21 per cent, and revenue in the region Rest of World increased
by 13 per cent. The positive development outside Europe was outweighed by a
decline of 16 per cent in Europe.
-- The B2B business recorded revenue of DKK 194 million in the second quarter
of the 2013/14 financial year compared to revenue of DKK 182 million in the
same period last year. Automotive grew by 6 per cent in the quarter,
despite the same quarter last year being a tough comparison.
-- The Group’s gross margin for the second quarter of the 2013/14 financial
year was 42.7 per cent compared to 43.7 per cent in the same period last
year and 40.1 per cent in the first quarter of the current financial year.
The gross margin in the same quarter last year was positively affected by
indirect production costs from build-up of inventory.
-- Capacity costs were DKK 321 million in the second quarter, compared to DKK
332 million in the second quarter last year. Distribution and marketing
costs have increased due to a higher level of marketing activities in the
high-season as well as the take-over of the distribution in China, whereas
R&D costs decreased slightly.
-- Earnings before interest and tax for the second quarter of the 2013/14
financial year were DKK 31 million compared to DKK 26 million in the same
quarter last year.
-- Free cash flow in the second quarter was negative at DKK 52 million
compared to negative DKK 208 million in the same period last year. The
Group’s net working capital was DKK 630 million at the end of the second
quarter of the 2013/14 financial year, compared to DKK 927 million at the
end of the second quarter last year and DKK 545 at the end of the first
quarter of the 2013/14 financial year.
-- The Group’s total revenue for the first six months of the 2013/14 financial
year was DKK 1,388 million against DKK 1,419 million last year,
corresponding to a decline of 2 per cent. Earnings before interest and tax
for the first six months of the 2013/14 financial year were negative DKK 34
million against negative DKK 35 million last year. Free cash flow in the
first six months of the 2013/14 financial year was negative DKK 121 million
compared to negative DKK 352 million last year.
-- After the end of the reporting period Bang & Olufsen participated at
the Consumer Electronics Show in Las Vegas. Here, Bang & Olufsen
launched the Form 2i and the BeoPlay H3 Golden Edition and announced the
launch, later in spring, of the BeoSound Essence.

Any enquiries about this announcement can be addressed to:

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

CFO, Henning Bejer Beck, tel.: +45 9684 5000

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

A webcast will be hosted on 16 January 2014 at 10.00 CET. Access to the webcast
is obtained through our home page www.bang-olufsen.com.