© melpomenem dreamstime.com Electronics Production | June 04, 2019
B&O's slow Q4 forces the company to adjust its outlook
Based on preliminary revenues and estimated financial performance for Bang & Olufsen’s fourth quarter 2018/19 which ended on the last of May, the company is lowering its outlook for the full financial year.
“Clearly our financial performance this year has not been satisfactory, and we are very disappointed with the development. We knew that the fourth quarter would be challenging and that especially TV sell-in was associated with a considerable level of uncertainty. Unfortunately, TV sell-in in our European monobrand network did not normalise as we anticipated,” says CEO Henrik Clausen in a press release. The company’s revenues, which was previously expected to be around 10% lower than the last financial year, is now expected to be between 13-14% lower compared to the previous financial year. The company’s EBIT margin was previously expected to be in the 4-5% range, but with the updated outlook the company expects an EBIT margin of 2-3% – free cash flow was also negatively impacted.. “We expect to return to profitable growth in the financial year 2019/20, and we will, in connection with the publication of the annual report for 2018/19 on 11 July, provide more detailed financial targets for the company,” says Henrik Clausen. Mr. Clausen also says that despite a disappointing development the past quarters, the company hase come a long way with the transformation of Bang & Olufsen. “We have launched a number of innovative products the past years, we have established a scalable less complex business model and we have strengthened our digital competences. All in all, today we have a profitable business despite the current growth challenges. But we are far from finished with the transformation and know that we still have a great deal of work ahead of us,” Clausen concludes.