B&O Q3 2019/20 WEBCAST PRESENTATION, 2 APRIL 2020

Here is a link to yesterdays presentation with announcement of the shortterm and future B&O strategy:

https://investor.bang-olufsen.com/static-files/8c480a84-9192-4e51-a1d4-33f9759ed7f4

MM

Lots of questions, a lot of words but besides 12+ products in ~1 year of time it feels like a lot of hot air to me. And they still miss the giant point of terrible aftersales and initial software imo

After I read the report, I somewhat think 10+ new products for the next 12 months is too much. What makes people think Bang & Olufsen as an iconic luxury product company, is they could create something 'out of this world'. In that case, I hope they could deliver iconic and great products with that target.

However, I have this positive feeling for the future. The new CEO seems to commit to a massive change in the company.  

What's the purpose of this sphere of speakers on pages 16 & 17??? To test noise cancelling in 3D??

Antonius Robin Iriawan:

After I read the report, I somewhat think 10+ new products for the next 12 months is too much. What makes people think Bang & Olufsen as an iconic luxury product company, is they could create something 'out of this world'. In that case, I hope they could deliver iconic and great products with that target.

However, I have this positive feeling for the future. The new CEO seems to commit to a massive change in the company.  

10+ new products in 12months..

So that's 2 new products (in 2 light reflecting in different spectra...) so 4 products

And then 3 current products also in 2 light reflecting in different spectra / MK x version. So 6 products

Total of 10 products.

Anyway... knowing the product cycle of B&O (around 2/3 years)... so these products have been around internally for some time. It's not that they are being rushed to the market. 

mbee:

What's the purpose of this sphere of speakers on pages 16 & 17??? To test noise cancelling in 3D??

That's one thing we can use it for.

Another main purpose is well-described by my colleague, Neo, on this video. The anechoic chamber he's in in that video is at the university of Aalborg - but the system is the same - it was the predecessor of the one we now have in Struer, shown in the presentation.

Cheers
-geoff

Indeed, although they'd never publicly admit that aftersales / software has been so poor.

If you focus on the Issues to Fix slide - they have a lot of work to do to address those questions / issues.

And that assumes that they even can fix these.

For example, saying that they've had too few innovative products with a leading technology edge is all very well on paper, but in reality is the holy grail that many companies aim for but few actually ever succeed in.

From a big picture view, they seem to want to focus on mobile related products for younger generations, especially in Asia, while at the same time continuing to serve middle aged / older customers in Europe with products for the home. 

The competition in both segments is fierce, and wont let up. Again, defining the scope of your challenge is one step, but achieving it is a whole different thing.

 

 

Mikipidia:

Lots of questions, a lot of words but besides 12+ products in ~1 year of time it feels like a lot of hot air to me. And they still miss the giant point of terrible aftersales and initial software imo

 

 

 

1. Luxury brand -  B&O has strong brand recognition

2. Need more products like Stage and Balance to drive growth - their product roadmap seems to indicate that, software also seems to be improving

3. Focus on selected markets - EU and China

4. More manufacturing in China to drive down costs.

From a financial perspective the positives in this Q were positive cashflow and improve margin. They are struggling in the OTG (on the go segment) because it is highly competitive. They have some excellent products in the BS1, 2 and BP 9. But they need to reduce the price by 30-40% to be competitive IMHO.

Their revenues have declined but their finances have improved. They probably need 3-4 Q of positive cash flow.

My 2 cents worth...

If they continue to move away from mechanical fascination, that leaves design, software and UI to excel at. Plus product support for a minimum of 5 years after last product sold.

Here, B&O need to focus on better.

Barry