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Bang & Olufsen announces preliminary financial results for the third quarter

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Jeff
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Jeff posted on Tue, Mar 26 2019 4:10 PM

Submitted without comment, for now:

B&O Report

“The results we have delivered in the third quarter are clearly not
satisfactory. We have overestimated the speed at which we have been able to
drive the change towards a more retail-led and demand driven sales and
distribution network. Combined with the unexpected decline in TV revenue in
the quarter, this has led us to reassess our outlook for the year,” says CEO Henrik Clausen.

Jeff

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seethroughyou
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I completely agree with Jeff above. 

 

A B&O TV was perhaps 2-4 times the cost of a good Sony or Panasonic in the 80s and 90s. You paid the price because it was just in reach and the integration, reliability and functionality was worth it. B&O TVs now cost 10 times. By raising prices to Oligarch levels, they lost their working and middle income folk - what a disastrous strategy. 


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Simonbeo
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“Demand led” means less stock?

obviously less demand , especially for TVs.

A replacement for the V1 would have been good perhaps?

 

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Sandyb
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Sandyb replied on Tue, Mar 26 2019 4:27 PM

Imagine our collective shock.....

 

poodleboy
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Sandyb:

Imagine our collective shock.....

The following quote from Reuters article:

"Bang & Olufsen Chief Executive Officer Henrik Clausen is adamant that the demand is there. Consumers bought 6 percent more B&O TV sets in the three months through February, he said. But rather than restocking to replace those sales, retailers have instead used the opportunity to pare their inventory, and cut purchases by 25 percent. 

Clausen attributed the drop-off to concerns about price competition from retailers who don’t have B&O’s stamp of approval but nonetheless offer its products, often at a discount. This unauthorized selling ultimately happens either when an approved retailer sells its inventory to a third party (which can then sell it on to consumers), or if B&O withholds approval because of discounting. Neither would be possible if the shops felt consumers wanted to buy the goods at the full price."

Millemissen
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Simonbeo:

“Demand led” means less stock?

obviously less demand , especially for TVs.

A replacement for the V1 would have been good perhaps?

 

Might be that the dealer are less interested in having the recent tv in stock, because they expect something new to come....

.....of which noone - of course - is able (or willing) to talk about.

MM

 

There is a tv - and there is a BV.

Jeff
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Jeff replied on Tue, Mar 26 2019 5:36 PM

poodleboy:

Sandyb:

Imagine our collective shock.....

The following quote from Reuters article:

"Bang & Olufsen Chief Executive Officer Henrik Clausen is adamant that the demand is there. Consumers bought 6 percent more B&O TV sets in the three months through February, he said. But rather than restocking to replace those sales, retailers have instead used the opportunity to pare their inventory, and cut purchases by 25 percent. 

Clausen attributed the drop-off to concerns about price competition from retailers who don’t have B&O’s stamp of approval but nonetheless offer its products, often at a discount. This unauthorized selling ultimately happens either when an approved retailer sells its inventory to a third party (which can then sell it on to consumers), or if B&O withholds approval because of discounting. Neither would be possible if the shops felt consumers wanted to buy the goods at the full price."

Gee, dealers don't want to stock up on products because, just perhaps, they don't trust B&O corporate or the marketability of products. Hey guys, let's go in debt and load up on stock because...help me out here I'm getting nothing.

Clausen's opinion could be charitably called delusional, the problem is endemic issues with B&O, but let's blame it on the dealers, again.

I'm reminded of Lee's comment about it'd be better to be a naked beekeeper than a B&O dealer now.

Jeff

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Duels
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Duels replied on Tue, Mar 26 2019 5:55 PM
This is an extremely poor set of quarterly results on top of the disappointing second quarter. Things have got worse not better.

Full year forecast has understandably been cut. But more worryingly three year targets have also been cut back. That does not sound like management expect to recover from this quickly.

It is noteworthy that retail sales of TVs have held up but the fact dealers aren’t restocking will clearly be down to uncertainty about the future direction of TVs, coupled with pressure on working capital and cash flow.

B&O needs to tell the world what it is doing about the TV market going forwards. And it needs some new activity in high end audio.

Not good at all.
Jeff
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Jeff replied on Tue, Mar 26 2019 6:28 PM

Duels:
This is an extremely poor set of quarterly results on top of the disappointing second quarter. Things have got worse not better.

 

B&O needs to tell the world what it is doing about the TV market going forwards. And it needs some new activity in high end audio.

 

Not good at all.

I think B&O should never have tried to be a player in the high end market. The traditional high enders will never accept B&O as truly high end, the BL5 was amazing and it had about zero market penetration into the "high end" world. Meanwhile, working on things like the BL90 and BL50 have consumed resources and money that could and should have been allocated elsewhere. Like on fixing software issues, or coming up with a good media server/hub. Or wifi that actually works.

B&O was never, ever about "high end" audio. What it always represented was good to very good sound, somewhat expensive, that provided the user good sound, stunning styling, and a simple, integrated system where interconnectivity and ease of use were emphasized. Ultra high end aspirations, poor reliability, buggy software, and nose bleeding prices are not helping the problems.

Jeff

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Puncher
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Don't worry, everything is fine and the future nought but shining - I've read it here loads of times!

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Duels
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Duels replied on Tue, Mar 26 2019 7:03 PM
Sorry Jeff. By high-end I meant main brand Bang and Olufsen audio ie beolabs etc, as opposed to beoplay audio.
Jeff
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Jeff replied on Tue, Mar 26 2019 7:20 PM

Duels:
Sorry Jeff. By high-end I meant main brand Bang and Olufsen audio ie beolabs etc, as opposed to beoplay audio.

Ah, understand Duels! There is a differentiation between B&O and the Play kind of products, but the words "high end" immediately call to mind a completely different, and usually insane, kind of market...where obsession over cables and such rules. B&O IMO still has no business in that market, it's not even the philosophy they used to espouse.

Jeff

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Simonbeo
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From what my local dealer told me recently it would appear that B&O sound capability will be built into the TVs from their Eclipse partner. Whether this is an admission that they want to sell B&O speakers for buyers these cheaperTVs I’m not sure. Seems quite defeatist to me.

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Puncher
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Simonbeo:
From what my local dealer told me recently it would appear that B&O sound capability will be built into the TVs from their Eclipse partner. Whether this is an admission that they want to sell B&O speakers for buyers these cheaperTVs I’m not sure. Seems quite defeatist to me.

I thought LG had selected Meridian as their Audio PartnerUnsure

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Mikipidia
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Meridian for what? Their b/c range? Probabky not, most likely meridian is their partner for their own high end lines, so more like (one of) their partner(s) Stick out tongue

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Dante replied on Wed, Mar 27 2019 2:25 AM

Some months ago I read an interesting article explaining Bose's market positining. I felt that it pretty much summarizes B&O too: decent sound, but not premium, although prices are ultra premium...

 

https://www.audioholics.com/editorials/bose-conundrum

 

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