* Q1 pretax loss 64 mln DKK, vs forecast 25.7 mln loss
* Revenue flat at 600 mln DKK
* Keeps full-year outlook unchanged
* Shares down 4.4 percent
(Adds detail, background, quotes)
By Mette Fraende
COPENHAGEN, Oct 10 Danish electronics maker Bang
& Olufsen reported flat quarterly revenue after strong
sales of lower-priced products were outweighed by a steep
decline at its top-end audio-visual unit.
Sales of its cheaper B&O PLAY range, launched at the start
of the year to win new and younger customers, rose 92 percent,
the company said on Wednesday.
B&O's audio-visual unit, whose 103-inch BeoVision4 TV costs
about 100,000 euros ($129,000), saw revenue slide 20 percent.
The business contributes over half of group revenue and also
outweighed a 37 percent rise in its automotive business which
makes sound systems for luxury cars such as Aston Martin, Audi
"The crisis in Europe is also hitting Bang & Olufsen, no
doubt," said Alm Brand analyst Michael Jorgensen. "They are
feeling the lack of consumer willingness to spend."
The quarter was also dented by an absence of new product
launches, the company said.
Chief executive Tue Mantoni stood by B&O's outlook for
double-digit sales growth in its 2012/13 year and an improved
operating margin, pinning hopes on B&O PLAY product launches in
October. "It is expected that these two products will drive
significant revenue in the second quarter."
The group's pretax loss doubled to 64 million Danish crowns
($11 million) in the June-August period - its first quarter -
compared with a forecast for a 25.7 million loss forecast in a
Reuters poll. Sales were flat at 600 million crowns, also
B&O shares were down 4.4 percent by 0935 GMT, lagging a 0.7
percent fall in the local mid-cap index.
"Overall, it is quite bad compared to what was expected,"
Sydbank analyst Nicolaj Jeppesen said. "Most of it comes from
capacity costs which are quite a bit higher than forecast."
Costs related to product development and marketing rose 18
percent to 306 million crowns and were heavily affected by the
launch of B&O PLAY, Jeppesen said.
Slowing growth in Asia's luxury markets has put a question
mark on the timing of B&O's ambition of moving into the region.
Mantoni has said B&O wanted China to account for 20-30
percent of revenue within 2-3 years, compared with around 3
"Bang & Olufsen has to have a presence there, but the timing
is another issue," Jorgensen said.
($1 = 0.7754 euros)
(Additional reporting by Mia Shanley and Teis Jensen; Editing
by David Cowell and Dan Lalor)
(firstname.lastname@example.org; +4533969649; Reuters