Sandyb wrote:

Slightly more encouraging results from B&O in Q1.

The link to the investor presentation is below

https://bo.eventcdn.net/202010q1/

Random observations

- Move into gaming seems committed, though gaming headset not due until mid 21 - they were asked about whether this represented a delay, but they avoided answering the question really. Sounds like we shouldn't expect any product here for quite a while, and nothing to coincide with the X Box launch.

- Will be further use of brand ambassadors (Alonso etc) - they seem to like this. Make your own judgement, but while this works well for Rolex, Richard Mille, and some fashion brands, I'm not so sure with B&O. They probably know better than me of course though.

- I didn't know they have partnered with Verizon in the US, to promote some products (Stage was used as an example)

- They will sign up more multi brand sales partners / channels.

- It seems around total online sales (their own plus through multi brand sites) are around 10% of total revenue, leaving 90% still physical I guess. A bit of interesting perspective I guess.

- re partnerships with LG (and HP etc), they said there were no great reasons to think these contracts would not be renewed, subject to usual caveats etc. I think this stability is welcome in the end.

- the 10 new products were phrased as 10 new products and upgrades - read into this what you will.

It does seem that the marketing is more focussed, tailored with different emphasis for individual products. They seem to indicate that this has helped some products (E8 sport, A1 etc) do pretty well, and will continue down this path of better marketing focus (think fewer generic "vegan" ads, ensuring the products are in focus properly). Dont shoot the messenger - just reporting here!

Some infö on the BeoClassics / BeoBespoke programme - at 8 min mark, you can see a nice picture of the sapphire BS1.

Still very reliant on EMEA and Asia, US contribution remains very constrained.

Anyway, good to have some improvement. While the cost cutting etc has helped the bottom line, and increased consumer spending on home entertainment during lockdowns has helped, clearly they haven't felt the huge upside that the bigger tech companies have. And while the share price rose around 10%, the company remains cash flow negative - the cash from the rights issue provides a good buffer, but not for that many years, so I cant see the share price moving meaningfully higher until they move cash flow positive.

Over and out.

Definitely yes....they're started from a relatively depressed base.

The stock has been a horrible under-performer no doubt, and if people have been increasing spending on this kind of stuff during this stay at home year, their improvement is modest.

There does however seem to be some acceptance that things have been done wrongly and need putting right - of course thats only a start, and more substantive questions still remain (can they sustain a coherent design philosophy and language, how and can they make them work given the necessary high software quotient etc etc, and how big even are the markets for products that achieve both?)

So I offered the initial summary above just by way of reportage, with a few bits drawn out.

But as I've posted numerous times elsewhere re the Halo (as their most recent product), the ambition is too narrow and beyond portable speakers / headphones, I still await a new product likely to win them new customers.

That all said, at least the downward trajectory appears less troubling in recent months, and management dont seem to have their heads buried in the sand completely, which I guess gives a little grounds for optimism.

Duels wrote:

One overriding thought is that whilst the results show some improvement that is only in comparison to the first quarter of last year. But those were extremely poor results.

 

Revenues are 10% up compared to Q1 last year which was actually 30% down on the year before that. So revenues are still nearly a quarter (23%) lower than they were 2 years ago.

 

Sandyb wrote:

-  Will be further use of brand ambassadors (Alonso etc) - they seem to like this. Make your own judgement, but while this works well for Rolex, Richard Mille, and some fashion brands, I'm not so sure with B&O. They probably know better than me of course though.

I'm good friends with the owner of Orlebar Brown. Adam and his husband, who is a creative marketing professional, spent a lot of time crafting partnerships and brand ambassadors.

They build a tiny company, which was almost a 4-man team back in 2010 to a company sold to Chanel for £40 million in 2018.

The brand was massively enhanced through brand ambassadors, especially via social media.

If you get it right, you really can build a business fast. 

Definitely, and its an avenue that B&O should try and make work for them at the very least.

Something inside me though doesn't fill me with confidence that it will be as fruitful for them as it is for watch and fashion brands.

Rolex chose their ambassadors for class, timelessness and elegance reasons. Richard Mille chose theirs for active high level sports reasons. And some clothing brands chose theirs for their urban street cred reasons. So they all make sense in their own way. 

Its a bit less obvious to me what the sensible parallels would be for B&O, but maybe thats just my imagination being limited.

moxxey wrote:

Sandyb wrote:

-  Will be further use of brand ambassadors (Alonso etc) - they seem to like this. Make your own judgement, but while this works well for Rolex, Richard Mille, and some fashion brands, I'm not so sure with B&O. They probably know better than me of course though.

I'm good friends with the owner of Orlebar Brown. Adam and his husband, who is a creative marketing professional, spent a lot of time crafting partnerships and brand ambassadors.

They build a tiny company, which was almost a 4-man team back in 2010 to a company sold to Chanel for £40 million in 2018.

The brand was massively enhanced through brand ambassadors, especially via social media.

If you get it right, you really can build a business fast. 

Sandyb wrote:

Something inside me though doesn't fill me with confidence that it will be as fruitful for them as it is for watch and fashion brands.

It doesn't fill me with confidence that they are doing this when covid is affecting the entire market, social media, how we perceive 'luxury' items and more. ie. they are behind the curve by some distance.

Sandyb wrote:

Definitely, and its an avenue that B&O should try and make work for them at the very least.

Something inside me though doesn't fill me with confidence that it will be as fruitful for them as it is for watch and fashion brands.

Rolex chose their ambassadors for class, timelessness and elegance reasons. Richard Mille chose theirs for active high level sports reasons. And some clothing brands chose theirs for their urban street cred reasons. So they all make sense in their own way.

Its a bit less obvious to me what the sensible parallels would be for B&O, but maybe thats just my imagination being limited.