The last time Industry News looked at 93-year-old Danish manufacturer Bang & Olufsen, there was concern over the company’s future prospects. At that time—back in June, 2017—B & O had just sold its factory in the Czech Republic to multi-national electronics/speaker manufacturer Tymphany, and transferred all 322 employees to Tymphany. Basically, B & O contracted assembly work from a factory and workers that had previously been their own.
Undoubtedly, there are compelling financial reasons for making such a move, but the associated decrease in autonomy did not set well with me—especially when it came on the heels of the sale of their ICE Power division, sale of the automotive division to Harman, and ousting of the CEO.
This time around, the news is better. As reported here on the Danish trade website Electronic Supply DK (text is in Danish—use Google Translate), during the last fiscal year 17/18, B & O’s revenue grew 11% YOY (year over year) to 3.3B Danish Krone—slightly over $550M. Bottom line, the company had a profit of 81M Krone (~$12.5M), compared to the previous year’s loss of 117M Krone (~$18M).
This was the first time that Bang & Olufsen turned a profit over an entire fiscal year since 14/15. B & O’s business basically breaks down into two segments: the “classic business” of large-scale audio, distributed audio, and televisions, and the BeoPlay division of portable/personal/lifestyle audio products. Revenue of the “classic business” was 1.74 B Krone (~$267M), while that of the Beo{lay division grew substantially to 1.55B Krone (~$238M). It was the first time that revenue of the BeoPlay division approached that of the “classic business”.
Overall, this is good news—but one must remember that at the company’s peak, shortly before the 2008 crash, the company was over $2B in annual revenue, and was Denmark’s largest company. At present, B & O is only a little over 25% of its former size.
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Short Stories:
—Sears continues its downward spiral. The company is closing 33 more Sears stores and 13 Kmart stories, with sales beginning this week and closures completed by November. The former retail giant’s market cap is down to around $123M, and stock hit new lows of $1.09/share.
—JC Penney may not be in much better shape. Although its market cap is more than four times that of onetime rival Sears at $560M, bad quarterly earnings sent shares down 27%, the biggest single-day drop since the company went public 40 years ago. Meanwhile, the company’s credit rating dropped even further into “junk” status. It doesn’t look good.
—Sonos continues to be a modest success since its IPO on August 1. Shares closed at $15.51 on the first day of trading; these days, shares hover around the $20 mark.
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