Financial Times “Bang & Olufsen dives 27%”

Interesting (and slightly worrying) news piece in the respected FT:

https://www.ft.com/content/a70aa0ca-0430-11e9-99df-6183d3002ee1

 

Needs a subscription Moxxey. Can you cut and paste it.

Came up on my newsfeed too...

https://www.bloomberg.com/news/articles/2018-12-20/b-o-cuts-outlook-for-revenue-after-changing-distribution-model

Revamps=more cosmetic nonsense.

Killer products filling the most modest of showrooms is all they need. Everyone else in the AV market manages without yet more cushions and naff naff.

It seems like theough several articals that they miss the mark with both the current customer base and new comers. It doesn’t totally surprise me, the whole dealer mismanagement is weird too. Wtf are they doing? Then again we ask this a lot out loud on the podcast and then people see us as too negative.

I hope they get back on their feet but i have a feeling this is round two of biting the bullit

Whether the article is interesting is open to question. As a subscriber I've read it.

What was surprising was the FT's optimistic tone, indeed their suggestion to buy more shares.

Their view was very much driven by patience around operating / distribution improvements still in train.

A narrow view I think, and as someone who knows a FT Lex writer, it's not always that the writer is very familiar with the stock they are writing about.

Profit warnings can take a while to recover from, as serious investors tend not to rush in - profit warnings tend to suggest significant issues that require some clarity and explanation.

Nevermind, I'm sure the new "Santa Red" headphones with the buzzing noise in the left cup will help turn it around!

Closing all the stores in USA and Australia should off cause have an effect, surprise me have bad they communicate this out to the shareholders.

They should have known this outcome long ago.

Anyway imo the share price was way to high, and I sold mine long ago.

Still not low enough imo, we have to know the future of TV's before I want to invest again. 

Puncher:

Nevermind, I'm sure the new "Santa Red" headphones with the buzzing noise in the left cup will help turn it around!

Investors has lost confidence in B&O ability to exploide there existing markeds or atract new costumers. I am a new costumer with a pair of BL50. Based on my experience I am not surprised if the will go out of business some time soon. 

Long time ago B&O was a leading pioneer in design and tech research. This ended during the early 2000s; now they are selling overpriced luxury objects with a baraque and questionable design (to be rude, many products seem to be designed for Saudi Arabian market) and a medium level technology.

It's no surprise to me that the company does not have good health.

This is sad news. The world is changing fast. My wife and I took our uses stroll through London shops last Friday to find that the Alessi flagship store we've visited for years is closing then to Selfridges where we looked at B&O. There were discounts on many of the items, before Christmas. Then you realise there aren't many TVs to chose from in the range. And you can get B&O as a branding of the audio on Ford cars. 

The business is healthy, they still expect to earn money, they just dont get a 10% raise of the revenue. But they still expect to earn the same % of revenue.

So not close to bankrupted

And Velvet I do not agree with you. BEOLAB 50 and 90, and BEOVISION ECLIPSE is some or the most advance products in their category.

And they have branding with new car brands as Bentley and Lamborghini.  

A profit warning is never good. But the announcement itself refers to this being due to four discrete changes in the distribution model undertaken by the company. If that is the case then this should only be a short term issue.

Ultimately sales this financial year are forecast to be the same as last year. Whilst not the 10% growth that had been expected, this does not appear catastrophic to me. EBIT margins are expected to be maintained which is good.

The implication is that when the significant changes to the distribution model around the world are completed things will be back on track. Although I would really wonder why you would change your distribution model in November in those regions that have pre Christmas sales peaks.

As noted a few days ago the company has just appointed a new director responsible for product fulfilment who comes from a strong tech background. I assume this will be his responsibility.

Share prices can overreact at times like these as market makers try to flush out nervous (typically private) shareholders. A recommendation to “Buy” is not as crazy as it seems.

Let’s watch this space.

Chris Townsend:

Needs a subscription Moxxey. Can you cut and paste it.

Odd. I'm not subscribed and I could read the entire article? Here you go...

Danish headphone and speaker maker Bang & Olufsen lost more than a quarter of its value on Thursday after it cut its sales outlook for the year, blaming a string of logistical problems.

B&O’s shares fell 27 per cent in early trading in Copenhagen, as investor anxiety was stoked by the company’s 10 percentage point downward revision of its sales growth expectations for the year.

B&O said late on Wednesday that sales in the second quarter were expected to fall 9 per cent compared to the same period last year. It now anticipates full-year sales to be flat compared to last year; previously it reckoned there would be a rise of “above 10 per cent.”

Logistical problems associated with the closure of poorly performing stores, the opening of new outlets and supplier changes drove the fall and would also impact the third quarter, the company said. Recommended Lex: premium commentary Bang & Olufsen: sound and fury

A key priority “is the transformation of our sales and distribution network,” said chief executive Henrik Clausen. “However, there is a time-lag effect as we close down a number of existing points-of-sale and establish new ones, which has impacted sales. Adding to that, issues with our new logistics partner meant delays in fulfilling customer orders in November.”

The move to a more direct distribution model also hit sales globally, while a change of distributor in Australia and New Zealand impacted sales in Asia.

However, B&O said its earnings before tax and interest margin for the year was unchanged and its share buyback programme would continue.

Sandyb:

Whether the article is interesting is open to question. As a subscriber I've read it.

I think you're misreading the use of 'interesting' in this context. The article isn't interesting, I'm saying that the 27% drop and the current situation is...interesting.

Lately, I've been scratching my head trying to understand what's happening at B&O. Plagued with software issues, they discontinue the Moment as soon as they finally perfect the software. There is no longer tech support in North America. The BeoIntegration site has been stagnant all year. The new gateway seems to be ignored by B&O itself. Khimo has told me that they actually WANTED to keep an ML socket in the new gateway, but B&O wasn't onboard. Instead, a workaround solution is suggested with an NL/ML Converter that isn't even in production anymore. The video development team is now gone. More and more stores keep closing. It just seems like B&O has some lack of direction and cohesion.

Velvet:

Long time ago B&O was a leading pioneer in design and tech research. This ended during the early 2000s; now they are selling overpriced luxury objects with a baraque and questionable design (to be rude, many products seem to be designed for Saudi Arabian market) and a medium level technology.

Er, just to check - you have heard of the Beolab 90s haven't you?

Agreed, profits warnings do present some interesting questions

AdamS:

Velvet:

Long time ago B&O was a leading pioneer in design and tech research. This ended during the early 2000s; now they are selling overpriced luxury objects with a baraque and questionable design (to be rude, many products seem to be designed for Saudi Arabian market) and a medium level technology.

Er, just to check - you have heard of the Beolab 90s haven't you?

You have to finish the design before you release the products in the marked. I have a list of at least 9 still missing functions and features on my BL50. I gues this apply for the BL90 as well after more than 3 years in the marked. I had to threat the dealer with a lawsuit to get my right. They will be returned And the sale is completely lost for ever.