Testing - B&O - 09 AR Pres

Bang & Olufsen Group
Annual Report 2008/09

Headlines – 2008/09
· Pole Position strategy progressing according to plan
· Turnover from launch products in line with expectations
· Cost-cutting plan has resulted in a reduction of the break-even turnover
· Profit before tax DKK -523 million in line with expectations against DKK 154
million last year
· The result is negatively influenced by restructuring costs of DKK 106 million
· Turnover DKK 2,790 million in line with expectations against DKK 4,092 million
last year
· Working capital reduced from DKK 817 million to DKK 484 million
against the expected DKK 575 million
· Successful capital increase: Net proceeds amounts to about DKK 433 million
· Equity ratio: 57 %
02
Bang & Olufsen Branded business
Turnover per market 2008/09 - wholesale
03
Distribution development per 31.05
Changes in number of shops

compared to 31/5-08
B1 -64
SIS -36
Other -11
Total -111
Total number of B1-shops: 758
Number of B1-shops 1/6-08 822

New/upgraded 40
Closed/downgraded -104
Total 31/5-09 758
04
Number of B1-shops per market 31.05
Net development B1-shops
05
Share of turnover per shop segment 2008/09
Share of turnover per segment:
2008/09 2007/08
- B1 81 % 81 %
- SIS 19 % 19 %
100 % 100 %
The average organic growth for Bang &
Olufsen shops, which have been in
operation for more than 24 months,
was -33 per cent (B1-shops) and -34
per cent (Shop-in-shop).
06
Pole Position strategy progressing according to plan
A focused product development approach
· Turnover from launch products constituted approximately 11 per cent of audio-

video turnover in 2008/09.
· In 2009/10 turnover from launch products is expected to constitute 25 per cent

of total audio-video turnover.
· High activity level within R&D

also in 08/09 due to focus on
product launches in 2009/10
and the development of the
shared digital technology
platform.
07
Product launches 2008/09
Most important new products
· BeoSound 5
· BeoVision 8-40
· BeoVision 4-103
08
One shared digital technology platform
· The development of the shared digital technology platform started up.
· The first product based on the new technology platform is expected to be

launched by the end of the financial year 2009/10.
09
A single, global sales organisation
· The global sales organisation secures a more effective support and development
of the distribution.
· Shared Service Centre established.
· Education program for Retail Development Managers established.
Increase in the number of B1-shops on emerging markets
· Net decrease in the number of B1-shops in 2008/09.
· The number of B1-shops in China and Russia/Ukraine increased with one and
four new shops respectively.
10
Cost adjustments
· Cost-cutting plan for 2008/09 has resulted in reduction of the break-even turnover.
· Development costs was maintained.
· Distribution and marketing costs went

down with DKK 75 million from Capacity costs:
(excl. restructuring costs)
DKK 1.004 million to DKK 929 million.
· Administration costs etc. went down

with DKK 44 million from DKK 149 million
to DKK 105 million.
11
Working capital reduced more than expected Cash flow from:

- Operating activities DKK 113 million
· Working capital reduced from DKK 817 million to DKK 484 million (against the - Investment activities DKK -339 million
expected 575 million) among other things as a consequence of the reductions in - Financing activities DKK 418 million
the company’s capital tied up in trade receivables from DKK 593 million to DKK DKK 192 million
408 million and inventories from DKK 801 million to DKK 598 million.
Financing activities:
· The net impact of the successful
capital increase amounts to about
DKK 433 million.
12
Expectations for the financial year 2009/10
· Bang & Olufsen expects, based on the implemented restructuring initiatives

combined with a strong product launch programme, to achieve a break-even
result before tax in the 2009/10 financial year based on a turnover level a little
below the previously announced DKK 3,200 million
· An improvement in the result, however, can only be expected in the second

quarter at the earliest based on the planned product launches
13
Expected product launches 2009/10
BeoTime
· Unusual and elegant alarm clock with system integration possibilities.
· Basic operation of the bedroom television, loudspeaker or light control.
· Built-in sleep timer.
· Wake up to the sound of BeoTime’s own discreet chime on its own, or add the
sound of the favourite TV programme, radio station, or piece of music.
14
New telephone
· Speaker for hands-free conversation and conference calls.
· Excellent sound quality.
· Unique design.
15
New TV product family
· A new unique design expression.
· Built in wall mount allowing for a range of

placement options as it allows viewers
to turn the screen for direct viewing from
different angles.
· Built-in stereo speaker offering

excellent sound quality.
· Digital surround module.
· Optional DVB-HD module

(MPEG2 and MPEG4).
16
New BeoVision 7 model
· 55-inch screen.
· Built-in LED light enhancing the contrast.
· Superb sound quality (integrated digital surround sound module and Adaptive
Sound Technology).
· Built-in DVB-HD module (MPEG2 and MPEG4).
· Optional Blu-ray player.
17
New product for the acoustics portfolio
· New subwoofer.
· Tulip-shaped design.
· Eliminates vibrations – patent pending.
· Offers multiple placement – can be placed

on the floor or mounted on the wall.
18
New audio system
· New digital music system.
· User-friendly plug ‘n play solution.
· Internet based audio system which can be connected to BeoSound 5 or iPod.
19
Strong growth in automotive
20
Conclusion
· Turnover and result before tax in line with expectations
· Working capital reduced more than expected
· Pole Position strategy progressing according to plan
· Turnover from launch products as expected and a strong pipeline for 2009/10
· Cost-cutting plan has resulted in a significant reduction of the break even

turnover
· Market conditions still unclear and challenging
· Bang & Olufsen expects that the 2009/10 financial year as a whole will result
in a break-even result before tax based on a turnover level a little below the
previously announced DKK 3,200 million
21
Enclosures – Fact and figures

Net turnover last 5 years
Turnover
Branded business DKK 2,720 million -32 %
ICEpower a/s DKK 85 million -28 %
Internal turnover DKK -15 million
Total DKK 2,790 million
· Decline in turnover of DKK 1,302

million.
· Bang & Olufsen Automotive increased

the turnover from DKK 123 million to
DKK 174 million (42 %).
24
Operating profit / loss
EBIT margin -17.8 % down from 4.8 %

due to:
· Turnover decrease of 32 %.
· Gross margin 39.6 against 46.2 in

2007/08.
· Development costs DKK 537 million

against DKK 530 million last year.
· Losses and change in provision for bad

debts totalled DKK 60 million against
DKK 49 million in 2007/08.
25
Result before tax
· Financial items, net unchanged

DKK 30 million, compared with 2007/08.
26
Result for the year
· Positive tax impact on the result for

the year amounts to DKK 140.2 million
corresponding to a tax rate of 27.0 %.
27
Growth in turnover per market 2008/09 (local currency)
28
Turnover development in the B1-shops (with min. two years in operation)
29
Enclosures – Product overview

Video products 2008/09
31
Audio products 2008/09
32
Speaker products 2008/09
33
Audi product summary 2008/09
34
Aston Martin product summary 2008/09
35

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Bang & Olufsen Group

Annual Report 2008/09

· Pole Position strategy progressing according to plan

· Turnover from launch products in line with expectations

· Cost-cutting plan has resulted in a reduction of the break-even turnover

· The result is negatively influenced by restructuring costs of DKK 106 million

Turnover per market 2008/09 - wholesale

Distribution development per 31.05

Changes in number of shops

Total number of B1-shops: 758

Number of B1-shops 1/6-08 822

Total 31/5-09 758

Number of B1-shops per market 31.05

Net development B1-shops

Share of turnover per shop segment 2008/09

Share of turnover per segment:

Pole Position strategy progressing according to plan

A focused product development approach

· Turnover from launch products constituted approximately 11 per cent of audio-

· In 2009/10 turnover from launch products is expected to constitute 25 per cent

· High activity level within R&D

Most important new products

Pole Position strategy progressing according to plan

One shared digital technology platform

· The development of the shared digital technology platform started up.

· The first product based on the new technology platform is expected to be

Pole Position strategy progressing according to plan

A single, global sales organisation

· Shared Service Centre established.

· Education program for Retail Development Managers established.

Increase in the number of B1-shops on emerging markets

· Net decrease in the number of B1-shops in 2008/09.

Pole Position strategy progressing according to plan

· Development costs was maintained.

· Distribution and marketing costs went

· Administration costs etc. went down

Pole Position strategy progressing according to plan

Working capital reduced more than expected Cash flow from:

Expectations for the financial year 2009/10

· Bang & Olufsen expects, based on the implemented restructuring initiatives

· An improvement in the result, however, can only be expected in the second

Expected product launches 2009/10

· Unusual and elegant alarm clock with system integration possibilities.

· Basic operation of the bedroom television, loudspeaker or light control.

· Built-in sleep timer.

Expected product launches 2009/10

· Speaker for hands-free conversation and conference calls.

· Excellent sound quality.

Expected product launches 2009/10

New TV product family

· A new unique design expression.

· Built in wall mount allowing for a range of

· Built-in stereo speaker offering

· Digital surround module.

· Optional DVB-HD module

Expected product launches 2009/10

New BeoVision 7 model

· Built-in LED light enhancing the contrast.

· Built-in DVB-HD module (MPEG2 and MPEG4).

· Optional Blu-ray player.

Expected product launches 2009/10

New product for the acoustics portfolio

· Eliminates vibrations – patent pending.

Testing - B&O - 09 AR Pres

Testing - B&O - 09 AR Pres