The new BeoPlay S3

Wednesday, 26th August, 2015

New product for the autumn - the ‘penta’ shape returns

The Bang & Olufsen BeoPlay S3 satellite speaker will be shortly announced by the company at their ‘Play With Expression’ event in London on 2 September 2015.

Yet another streaming device, the BeoPlay S3 will incorporate Bluetooth 4.0 for the wireless streaming of sound from a suitable smartphone or tablet.

The new speaker details have been leaked by Asian social media sites and is said to be 180 x 180 x 120mm in dimension (low-quality source images shown below).

The new BeoPlay S3 wireless satellite speaker

Bang & Olufsen has just announced that their other Bluetooth speakers - Beolit 15 and BeoPlay A2 - have just had their software updated so that two separate speakers may now be paired to a streaming device to give stereophonic sound, and so it’s therefore reasonable to believe that BeoPlay S3 will have the same facility if so-desired.

BeoPlay S3

BeoPlay S3

BeoPlay S3

BeoPlay S3

The price of each wireless speaker is expected to be 399 euros.

Source

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Twice the sound, naturally

Thursday, 20th August, 2015

As of today both BeoPlay A2 and Beolit 15 are available in a ‘natural’ finish, to complement the BeoPlay H6 headphones.

And from 27 August this year, thanks to an innovative wireless technology both the BeoPlay A2 or Beolit 15 can be paired up to provide stereo sound.

The wireless technology, combined with the aptX codec featured in both BeoPlay A2 and Beolit 15, provides a technological mature platform, worthy of audio aficionados:

  • outstanding Bluetooth stereo audio and streaming quality
  • minimal audio coding delay and latency

Twice the sound, naturally

Beolit 15 is now available in natural aluminium, Polar blue, natural Champagne and shaded rosa, while BeoPlay A2 is hued in natural aluminium, grey, black and green.

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Sales up, Profits down

Wednesday, 19th August, 2015

Following Bang & Olufsen’s recent Annual Report last Thursday showing a robust jump in fiscal fourth-quarter sales - largely thanks to the successful launch of new products under the more affordable B&O Play brand - the company at the same time reported a hefty loss.

The company reported that its net loss came in at 319 million Danish kronor ($47.5 million) in its most recent quarter, compared with a loss of DKK11 million in the same period a year earlier.

Revenue rose 14% to DKK695 million in the three months up to 31 May 2015 due to the popularity of its new affordable products on the market.

Bang & Olufsen has sought to rejuvenate its customer base with a range of headphones and portable speakers.

Its B&O Play range of products have been a hit with quarterly sales from the unit rising 52% to DKK193 million. But in competing for teenagers’ ears, the company is now battling against powerful rivals including Bose Corp as well as Apple Inc.’s Beats.

Sales up, Profits down

Bang & Olufsen posted an underlying operating loss of DKK53 million in the quarter, well below the company’s own guidance forecasting an operating profit:

“It came as a surprise that they were unable to make any money,” said Morten Imsgard, analyst at Sydbank. “The company is too small and its costs are too high.”

Bang & Olufsen concurred. It blamed what it called “unsatisfactory results” on its lack of scale and a complex structure, but said a recent brand license agreement and the sale of its auto business would pay off.

The firm said it would work on further reducing its cost base, and expected to record a small operating profit in the fiscal year ended 30 June 2016.

Bang & Olufsen shares took a beating on Thursday, dropping as much as 14% on the Copenhagen exchange.

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Leaner & meaner

Friday, 14th August, 2015

Bang & Olufsen a/s Group Annual Report 2014/15 and Interim Report for 4th quarter 2014/15

The fourth quarter of 2014/15 was financially challenging for Bang & Olufsen’s continuing business, which showed healthy revenue growth but unsatisfactory underlying earnings. A number of significant steps, including a brand license agreement and the sale of the Automotive assets were taken to sharpen the company’s strategic focus, thereby strengthening the capital structure and creating a leaner, more agile business model on which a profitable, growing company can be built.

On 31 March Bang & Olufsen entered into an Automotive brand license agreement with HARMAN International Industries, Incorporated and an agreement to transfer its Automotive assets to HARMAN. The agreement enables Bang & Olufsen to focus on building the Bang & Olufsen and B&O PLAY consumer brands as well as strengthening the company’s financial position, while maintaining a strong brand presence in the Automotive industry. The transaction was closed on 29 May and impacted the free cash flow positively by DKK 1,105 million in the fourth quarter.

Bang & Olufsen 2015 Q4 financial highlights

Revenue of the continuing business grew 14 per cent in the fourth quarter, driven especially by B&O PLAY as strong customer demand for newly launched products, as well as continued expansion of the third party distribution drowe growth. The revenue growth for the continuing business was in line with the guidance for the quarter.

Earnings before interest and tax for the continuing business was a loss of DKK 410 million in the fourth quarter, of which DKK 357 million related to the non-recurring and aperiodic items and costs for shared functions and license fees previously allocated to Automotive as detailed below. The underlying EBIT for the continuing business was negative DKK 53 million, which was below guidance of a positive EBIT in the quarter.

The free cash flow adjusted for the sale of assets was DKK 43 million compared to negative DKK 73 million for the same period last year, and was in line with guidance. The free cash flow for the quarter was DKK 1,166 million, of which DKK 1,123 million relates to the sale of assets.

As a result of the Automotive transaction and the sale of the 33 per cent stake in Medicom as well as the revised strategy, the company has reassessed the value of certain assets of the continuing business. This resulted in value adjustments of the tangible assets, investment property, inventory, and specific trade receivables.

The gross margin of the continuing business was 9.2 per cent in the fourth quarter. The underlying gross margin (i.e. adjusted for non-recurring and aperiodic items and cost and license fees previously allocated to the Automotive business) was 38.9 per cent. The gross margin was 40.1 per cent in the same quarter last year in the continuing business. The decline in gross margin was mainly related to a higher share of revenue from B&O PLAY and a change in product mix in the Bang & Olufsen segment.

In accordance with IFRS and as no external Automotive related licence fee income is expected in 2015/16, no internal license fee has been charged to the Automotive division. The internal license fee charged to the Automotive division in previous periods have been reversed in the unadjusted figures.

The capacity costs of the continuing business increased by DKK 214 million compared to the same quarter last year, of which DKK 131 million were non-recurring and aperiodic, non-cash items.

In addition, the capacity costs were negatively impacted by DKK 19 million related to shared costs and license fees, previously allocated to discontinued operations. These shared costs will be mitigated during 2015/16 through cost reduction measures such as footprint optimization, streamlining of supply-chain related areas and reduction in service and support functions as described in Company Announcement no. 14.26 (31 March 2015).

Reported EBIT in the continuing business was negative DKK 807 million for the 2014/15 financial year. The underlying EBIT for the continuing business was negative DKK 323 million. This was below guidance of negative DKK 230 – 260 million. EBIT for the continuing business was negative DKK 261 million last year.

Earnings after tax for the Group including earnings from the sale of assets and businesses was positive DKK 221 million in the fourth quarter.

Upon publication of these Q4 financial results, stocks in Bang & Olufsen plummeted. See Bloomberg for current share index.

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