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Introduction & Market Context
Bang & Olufsen (CPH:BO) presented its Q4 and full-year 2024/25 results on July 3, 2025, highlighting record-high gross margins and revenue growth across all regions in the final quarter. The luxury audio brand, celebrating its centenary, reported modest overall performance as it navigates market uncertainties while continuing to invest in its strategic initiatives.
The company’s stock closed at DKK 13.22 on July 2, down 0.9% ahead of the presentation, and remains well below its 52-week high of DKK 15.42, reflecting ongoing investor caution despite the company’s improved gross margin performance.
Quarterly Performance Highlights
Bang & Olufsen reported Q4 2024/25 revenue of DKK 680 million, representing 4% growth in local currencies, while full-year revenue reached DKK 2,553 million, down 1% in local currencies. The company achieved a record-high gross margin of 55.8% in Q4, up from 54.3% in the same period last year, and 55.0% for the full year, compared to 53.3% previously.
As shown in the following chart of quarterly financial performance:
The company’s EBIT margin before special items declined to 1.0% in Q4 from 1.8% in the prior year, with the full-year EBIT margin also decreasing to 1.0% from 2.4%. Free cash flow for Q4 was DKK 4 million, significantly down from DKK 43 million in Q4 2023/24, while the full-year free cash flow improved slightly to DKK 16 million from DKK 11 million.
Bang & Olufsen reported strong like-for-like sell-out growth of 8% in branded channels during Q4, with regional variations showing particularly strong performance in the Americas:
The company saw revenue growth across all regions in Q4, with EMEA up 9%, Americas up 3%, and APAC up 13% in local currencies. Gross margins improved in both EMEA and APAC regions but declined in the Americas due to tariff impacts.
Product category performance was mixed, with On-the-go products showing robust 29% growth, Staged products up 2%, and Flexible Living declining by 2%. The following chart illustrates the company’s revenue development:
Strategic Initiatives
Bang & Olufsen emphasized its strategic foundation built on three key pillars: luxury positioning, timeless design, and cutting-edge technology. The company has been implementing a transition strategy throughout 2024/25, focusing on strengthening its branded channels and improving gross margins.
The company highlighted its gross margin improvement and the increasing share of branded channels in its revenue mix:
Key strategic initiatives include:
1. Brand positioning: Bang & Olufsen has implemented a new three-year marketing strategy, including partnerships with premium brands like Ferrari (BIT:RACE) and appointing Formula 1 driver Charles Leclerc as a global brand ambassador.
2. Retail excellence: The company continued optimizing its global retail network, with a net reduction of 41 monobrand stores in 2024/25, comprising 15 openings and 56 closings, while focusing on enhancing store performance through improved visual merchandising.
3. Product excellence: Bang & Olufsen launched new innovations like the Beoplay H100 and achieved Cradle to Cradle certification for six additional products during the year, bringing the total to eight certified products.
4. Partnership expansion: The company secured a six-year technology licensing partnership with TCL and expanded its HARMAN Automotive partnership with the Hyundai (OTC:HYMTF) group, strengthening its licensing business.
Forward-Looking Statements
Bang & Olufsen provided its outlook for fiscal year 2025/26, projecting revenue growth in local currencies of 1% to 8%, an EBIT margin before special items of -3% to 1%, and free cash flow of DKK -100 million to 0 million.
The company expects CAPEX of approximately DKK 320-360 million and anticipates capacity costs to increase by around DKK 150 million in 2025/26. Management highlighted several challenges, including the impact of tariffs in the Americas region, which accounts for approximately 12% of total revenue. The estimated annual gross impact from the current tariff situation could reach up to DKK 40 million, with mitigation efforts including price increases implemented on May 1 and June 1.
Despite these challenges, Bang & Olufsen emphasized its strengthened capital resources following a completed capital raise and credit facility, positioning the company to continue making value-creating investments as it enters its second century as a luxury audio brand.
Detailed Financial Analysis
Bang & Olufsen’s capacity costs decreased in Q4, primarily due to lower marketing expenses, while development costs increased year-on-year as the company continued to invest in product innovation:
The company’s capital resources strengthened to DKK 600 million, up from DKK 532 million, despite the decrease in free cash flow during Q4:
Management emphasized that while navigating uncertain market conditions, the company continues to focus on its strategic initiatives, building on its record-high gross margin and improved performance within branded channels as it enters its centenary year as the world’s leading luxury audio brand.
Full presentation:
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