Struer, 2015-12-17 08:00 CET (GLOBE NEWSWIRE) --
Company Announcement no. 15.08

“The second quarter revenue increased by 26 per cent, driven by a very strong
momentum in B&O PLAY, where new and existing products and the ongoing expansion
of the retail network drove revenue growth. The revenue in Bang & Olufsen
declined slightly, but margins were improved significantly. We are excited
about the demand for our new products and will continue to launch innovative
products across Bang & Olufsen and B&O PLAY to improve our profitability
through revenue growth, margin improvements and cost management”, says CEO Tue
Mantoni.

The revenue growth of 26 per cent (21 per cent in local currency) was driven by
a continued momentum in the B&O PLAY segment, which grew 132 per cent compared
to the same quarter last year. The growth was driven by strong high-season
customer demand for existing and new products through all sales channels and a
continued expansion of the number of third party retailers.

The revenue in the Bang & Olufsen segment declined by 8 per cent (14 per cent
in local currency) in the second quarter, compared to the same quarter last
year. The decline was mainly in the European market.

The Group’s gross margin improved significantly compared to the same quarter
last year. The improvement was mainly driven by improvements in the Bang &
Olufsen segment. The improvement compared to last year was driven by a change
in product mix, positive effects from the ongoing cost optimisation, as well as
the fact, that the second quarter last year was adversely impacted by costs
related to the ramp-up issues in the TV production. The Bang & Olufsen gross
margin was adversely impacted by approximately DKK 7 million of costs
previously allocated to Automotive, which the company is planning to eliminate
over time.

Capacity costs were moderately lower than last year, as costs for distribution
and marketing during the high-season remained high, while the costs for R&D
showed a moderate decline. The capacity costs for the second quarter included
costs for shared functions previously allocated to Automotive of DKK 10
million.

Earnings before interest and tax (adjusted for costs previously allocated to
Automotive) were negative DKK 14 million, compared to negative DKK 118 million
last year, corresponding to an improvement of DKK 104 million. The improvement
was mainly driven by the increase in revenue and an improvement in the gross
margin.

Free cash flow for the second quarter was positive DKK 63 million compared to
negative DKK 40 million in the same quarter last year. Net working capital
decreased to DKK 270 million, compared to DKK 338 million at the end of the
first quarter of 2015/16, mainly due to an increase in trade payables. The
increase in trade payables was mainly related to higher activity, especially
within the B&O PLAY segment.

The Group’s total revenue for the first half of the 2015/16 financial year was
DKK 1,235 million against DKK 1,012 million last year, corresponding to an
increase of 22 per cent. Earnings before interest and tax for the first half of
the 2015/16 financial year were negative DKK 136 million against negative DKK
327 million last year, corresponding to an improvement of DKK 191 million. Free
cash flow in the first half of the 2015/16 financial year were negative DKK 105
million compared to negative DKK 281 million last year.

Full year guidance for the Group is maintained. Revenue is expected to grow by
8 to 12 per cent compared to 2014/15. EBIT before costs previously allocated to
Automotive is expected to be around break-even. Costs previously allocated to
Automotive are expected to be in the range of DKK 70 to 80 million. The Group
expects to fully eliminate the costs for shared functions previously allocated
to Automotive during the 2016/17 financial year.

As previously announced (Company Announcement no. 14.26) Bang & Olufsen has
decided to investigate the future ownership alternatives for ICEpower. ICEpower
therefore continues to be classified as discontinued operations.

On 26 November 2015 Bang & Olufsen announced (Company announcement no. 15.07)
that the company has received certain initial approaches in respect of a
potential launch of a takeover offer, and based hereon the company has
initiated a dialogue to investigate and analyse the firmness of these
approaches. The ongoing dialogue may or may not lead to an offer for the whole
or part of the issued share capital of Bang & Olufsen. As such, there is no
certainty about the outcome of the discussions, or whether a takeover offer
will be announced at all. Bang & Olufsen will make further announcements if and
when it is deemed necessary or appropriate.


Any enquiries about this announcement can be addressed to:

Investor contact, Claus Højmark Jensen, tel.: +45 2325 1067

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


A webcast will be hosted on 17 December 2015, at 14:00 CET. Access to the
webcast is obtained through our home page www.bang-olufsen.com.

Interim report Q2_15-16_UK_F.pdf