Reply To: Where do you see B&O in 5-10 years?

[Emilos88]

Mr10Percent wrote:

I think the report/presentation is generous and time-sensitive. I see a number of key fundamentals which will hurt all/every business (excluding arms manufacturers perhaps?):-

1. Interest rates will rise dramatically. This will hurt B&Os efforts in recent years to re-finance
2. They may have reduced ability for additional borrowing facilities (Cashflow is collapsing)
3. Non-staged sales. Millenials will have a lot less disposable in 2022/23
4. Overall, can see a compounding of UK outlook, disposable income with Sales hit
5. Can expect to see a compounding of German outlook, disposable income with Sales hit
6. Raw materials (particularly Aluminium, Nickel and polymers) price increase as western currencies devalue.

1. Yes a higher interest rate will hurt all sales for all companies. But this is needed if we want to slow down the economy, which are very much needed.
2. B&O have much more Cash and bonds than they have debt. They can continue in many years on Zombie mode. This is not the case right now, as they are investing a lot in product development, which will be good for the future.
3. You cannot say this for certain, in Denmark the employment rate is as high as it gets. This means that the younger generation can pick a job by their choosing, and get very high start salaries. Some might get fired if things slow down, but most will keep their high pay.
4. Yes but nothing wrong in things slowing down. Right now they cant produce the amount they can sell.
5. Same
6. The raise in price on these materiels have been raising mostly because of higher demand. If the demand slows down, as you suggest, These thing will get a more normal state, and the prices will be lowered a lot. Off cause a small inflation dent will stay but it will be small if they have succes in slowing down the economy.

Slowing down is hard without crashing, lets hope.