Bang & Olufsen a/s

For the full year, revenue was DKK 2.5 billion, down 1.6% in local currencies. EBIT margin before special items was -0.5%, and free cash flow was negative DKK 141 million. In Q4, reported revenue declined 3.8% and revenue fell 3.1% in local currencies; gross margin improved to 58.7%, up 2.9 percentage points year over year; EBIT margin before special items was 5.7%; and special items were negative DKK 30 million. Q4 free cash flow was positive DKK 5 million, net working capital was DKK 349 million, inventories were DKK 418 million, capital resources were DKK 294 million, and available liquidity was DKK 94 million. Looking ahead to FY '26-'27, management guided to revenue growth of 1% to 5%, EBIT margin before special items of 1% to 3%, free cash flow of DKK 25 million to DKK 100 million, and capex of DKK 270 million to DKK 310 million. Management also said DDR4 RAM supply issues could reduce gross margin by about 0.5 percentage point and create a cash impact of around DKK 35 million to DKK 45 million.

Nikolaj Wendelboe said the company continued its transformation by improving retail, product development and the operating model while adapting to a challenging macro environment. He emphasized record gross margin, stronger store execution, and a more disciplined go-to-market approach after adjusting the cost base and simplifying the organization. His tone was constructive but cautious, noting uncertainty in Europe, the U.S. tariff environment and the need to keep investing selectively in future growth.

As interim CEO and CFO, Wendelboe laid out the financial picture with emphasis on margin improvement, cash discipline and working capital. He highlighted Q4 gross margin of 58.7%, the DKK 20 million positive impact from a U.S. tariff refund, and Q4 free cash flow of DKK 5 million, while noting full-year free cash flow was negative DKK 141 million. He also detailed cash resources of DKK 294 million, available liquidity of DKK 94 million, inventory of DKK 418 million, and the expected DKK 35 million to DKK 45 million cash impact from DDR4 RAM supply constraints. He said capex will rise to DKK 270 million to DKK 310 million next year as the company invests in retail, IT and the product pipeline.

Analysts pressed management on the 60-person organizational reduction, the shift in product development toward external partners, and whether the store network would keep shrinking in Europe. Management said the cuts were broad-based, mainly in administration, product development and global marketing, and that store closures should slow next year as more flagship openings offset reductions. Questions also focused on tariffs, RAM supply, and seasonality; management said tariff refunds are largely booked, future refunds are not assumed, DDR4 supply will be secured via larger purchases and a new hardware platform, and growth may be more back-end loaded because more product launches are expected in Q4.