Ten Years.
Almost One Billion in Losses.

There is something slightly strange about working with old Bang & Olufsen.

A product arrives that was made twenty, thirty, sometimes fifty years ago.

The aluminium may have a scratch. A belt has hardened. A capacitor has given up. The grease inside has turned into something closer to glue.

But underneath all that age, the thing is still there.

The idea is still there.

You repair it, clean it, adjust it, press a button — and suddenly a machine designed before the internet, before Spotify, sometimes before I was old enough to understand what Bang & Olufsen was, comes alive again.

And people care.

They do not bring these products to be repaired simply because they are worth money.

Sometimes the Beogram belonged to their father.

Sometimes the Beomaster was the first expensive thing they bought with their own salary.

Sometimes a pair of speakers has followed a family through three houses and two generations.

After many years of working with these products and the people who own them, I have come to understand something that no balance sheet can properly measure:

Very few companies ever achieve that.

And that is exactly why what has happened financially during the last decade deserves to be talked about.

Not because I want Bang & Olufsen to fail.

Quite the opposite.

After one hundred years, I want it to survive the next hundred.

And to understand why I am concerned, we have to begin with one uncomfortable number.

DKK 939 million

Take the ten completed financial years from 2016/17 through 2025/26.

Add together Bang & Olufsen's reported annual profits and losses after tax.

The result is approximately:

Almost one billion kroner in accumulated net losses.

This does not mean that DKK 939 million literally disappeared from a bank account.

Accounting profit and cash flow are not the same thing, and some of those losses included substantial non-cash accounting items.

But the bottom-line record remains:

That is not one difficult quarter.

It is not one failed product.

It is not one CEO.

It is not COVID.

It is ten years.

And the story becomes more interesting when you look at how we arrived here.

Before the decade even began

Bang & Olufsen entered this period already in the middle of a fundamental transformation.

For decades, B&O had been much more than a famous name attached to beautiful objects. It developed technology, produced products and controlled large parts of the process itself.

That structure was changing.

In 2015 — before the ten-year period examined in this article — Bang & Olufsen transferred its Automotive assets to HARMAN.

Financially, it was a major transaction.

Bang & Olufsen stated that the transaction would generate approximately DKK 1.13 billion in net proceeds after tax and transaction costs, while B&O continued to participate in automotive through a licensing arrangement.

There was logic in the decision.

Automotive required enormous scale and resources. HARMAN already had the infrastructure and relationships of a major global automotive supplier.

But the transaction also tells us something important about the company entering the following decade.

Bang & Olufsen was becoming a different company.

Smaller.

More focused on brand, design, acoustics, partnerships and distribution.

Then, in 2017, another important part of the old structure moved outside the company.

Bang & Olufsen sold its Czech production subsidiary to Tymphany.

322 employees transferred with it.

Bang & Olufsen expected approximately DKK 123 million in cash proceeds and an accounting gain of around DKK 33 million.

The company itself described the direction as becoming more agile and asset-light.

There is nothing automatically wrong with that.

Owning factories does not guarantee success.

Selling one does not guarantee failure.

The real question comes afterwards:

Because an asset can only be sold once.

Afterwards, the remaining business has to stand on its own.

For a moment, it looked as if it might

Then came 2017/18.

Bang & Olufsen reported approximately DKK 81.5 million in profit after tax.

That matters.

If we are going to look critically at ten years, we also have to acknowledge the years that worked.

Revenue grew strongly during 2017/18, and profitability returned.

The following year, 2018/19, revenue declined again, but the company nevertheless finished the year with approximately DKK 19 million in net profit.

For a moment, it was reasonable to believe that the transformation might be working.

Bang & Olufsen was profitable.

The company was confident enough to conduct a share-buyback programme.

Perhaps a more stable period was beginning.

It wasn't.

Then came 2019/20

The following financial year was brutal.

Revenue fell from approximately DKK 2.84 billion to DKK 2.04 billion.

The bottom-line result was:

COVID-19 certainly mattered.

Stores closed.

Travel stopped.

Markets were disrupted.

It would be wrong to pretend otherwise.

But it would also be wrong to attribute everything to the pandemic.

Bang & Olufsen itself reported that the disappointing development was also connected with insufficient progress in its transition towards a demand-driven retail model and higher-than-expected sales through unauthorised channels.

Some of the problems therefore pre-dated the full impact of COVID.

And there is another important detail.

The DKK 576 million net loss included a DKK 265 million impairment of deferred tax assets.

That was an accounting charge, not DKK 265 million physically leaving the bank.

This distinction matters.

But so does the final result.

In 2020, Bang & Olufsen carried out a rights issue designed to raise approximately DKK 409 million in gross proceeds.

It provided additional equity capital and financial room for the company to continue its transformation.

And things did improve.

Revenue recovered.

Costs were reduced.

Operating performance improved.

But when the 2020/21 financial year was finished and everything was included, the bottom line still showed approximately:

This is where corporate reporting can become difficult for people who do not spend their lives reading annual reports.

EBITDA matters.

EBIT before special items matters.

Gross margin matters.

Free cash flow matters.

All of them tell us something useful.

But eventually I still want to ask the simplest question:

Then the years kept passing

2021/22:
approximately DKK 30 million net loss.

2022/23:
approximately DKK 141 million net loss.

2023/24:
approximately DKK 17 million net loss.

2024/25:
approximately DKK 29 million net loss.

And then came 2025/26 — the financial year spanning Bang & Olufsen's one-hundredth anniversary.

The result:

There were positive developments during these years.

Gross margins improved significantly.

Costs were reduced.

Distribution changed.

Markets were prioritised.

Products were launched.

Strategies were adjusted.

There were quarters that gave real reasons for optimism.

The company continued producing objects capable of reminding us why the Bang & Olufsen name still matters.

But financial years eventually end.

And when those ten completed years are placed next to one another, the result is difficult to escape:

That is the number this story is about.

And yet the products refuse to become ordinary

This is where my criticism of Bang & Olufsen differs from that of someone looking only at a spreadsheet.

I cannot simply look at the numbers and walk away.

Because the next morning another old Bang & Olufsen product comes through the door.

Maybe a Beogram.

Maybe a Beosound 9000.

Maybe a pair of Beolab speakers.

And immediately I am reminded why this company still matters.

You watch the glass door of a Beosound 9000 move.

You see a Beogram tonearm lower itself onto a record.

You watch a pair of Beolab 50s unfold.

You see the wooden fronts of a Beovision Harmony open and reveal the television.

And you think:

Who else would have done this?

Who else would have spent the time?

Who else would have decided that a television should perform a small piece of theatre before you watch television?

This has never been ordinary consumer electronics.

That has always been Bang & Olufsen's gift.

At its best, B&O takes objects we normally tolerate — loudspeakers, televisions, music systems — and gives them presence.

Sometimes personality.

Sometimes almost a soul.

That is why people still repair forty-year-old Bang & Olufsen products.

That is why collectors search for them.

And that is why someone will sometimes spend more restoring a father's old Beogram than an accountant would ever say the machine is worth.

Because the value is not only in the machine.

There is memory inside it.

There is a person inside it.

There is a house, a childhood or a first salary inside it.

That relationship between people and products may be one of the most valuable things Bang & Olufsen possesses.

Trust accumulated over generations.

That is why I worry

This is not an accusation against individual people.

I am not sitting inside Bang & Olufsen's boardroom.

I do not know every discussion.

I do not know every idea that was rejected, every difficult compromise or every decision where management had only bad alternatives available.

Running a global luxury electronics company is extraordinarily difficult.

Executives should be paid for taking that responsibility.

Boards should be paid for carrying theirs.

Mistakes will happen.

Markets change.

Currencies move.

Wars happen.

Pandemics happen.

Products fail.

Strategies sometimes need to be abandoned.

But eventually explanation has to meet arithmetic.

One difficult year can be circumstances.

Several difficult years can be a turnaround.

During this period Bang & Olufsen has also raised additional equity capital more than once.

The 2020 rights issue was designed to raise approximately DKK 409 million gross.

In November 2024, the company completed another share issue raising approximately DKK 228 million gross.

There is nothing inherently wrong with raising capital.

Companies do it every day.

Sometimes raising capital is exactly the responsible thing to do.

But equity capital and earnings are not the same thing.

Money invested by shareholders can finance a company's future.

Eventually, however, that future has to generate sustainable earnings of its own.

One hundred years is not a business model

Bang & Olufsen has every right to be proud of reaching its centenary.

Think about what one hundred years means in technology.

Formats came and disappeared.

Radio changed.

Television changed.

The cassette came and went.

The CD came and went.

Music moved onto computers.

Then computers moved into telephones.

Bang & Olufsen survived all of it.

Peter Bang and Svend Olufsen founded the company in 1925.

More than a century later, their names are still above the door.

That is extraordinary.

But history can create a dangerous sense of permanence.

Nothing is permanent.

A beautiful past does not finance tomorrow's product development.

Heritage does not pay salaries.

Memory does not pay suppliers.

A museum can survive on history.

A living company cannot.

And I do not want Bang & Olufsen to become a museum.

I do not want to explain to my children one day that Denmark used to have a company that made these extraordinary things.

I do not want Bang & Olufsen to survive merely as a logo.

I want Struer to remain a place where engineers, designers and craftspeople are given enough freedom to make unreasonable things.

I want someone inside Bang & Olufsen to suggest an idea that sounds completely unnecessary — a moving television, a mechanical curtain, a loudspeaker made with an almost obsessive level of craftsmanship — and for somebody else to answer:

The world already has enough sensible black boxes.

There should still be room for companies willing to make something beautiful.

But beauty needs a business underneath it.

Otherwise, eventually, beauty becomes an archive.

This is not an obituary

It is the opposite.

I am writing this because I believe the company is worth demanding something from.

Bang & Olufsen already possesses something companies can spend decades trying to create:

A name recognised around the world.

A design language recognisable from across a room.

More than a century of engineering and design history.

Customers who still care about products decades after they bought them.

Collectors.

Dealers.

Technicians.

Designers.

Owners who speak about their equipment almost as if it were a member of the family.

That is an extraordinary inheritance.

And after ten completed financial years, I think it is reasonable to ask one simple question:

Not simply an adjusted measure.

Not one good quarter.

Not another transformation programme.

Not another long-term ambition.

Profit.

Consistent profit.

Enough to invest.

Enough to survive a bad launch.

Enough to survive a recession.

Enough to finance new ideas.

Enough for the next generation to inherit something stronger than the generation before it.

Bang & Olufsen has already proved that technology can be beautiful.

It has proved that aluminium can feel warm.

It has proved that a loudspeaker can become furniture.

That a television can become theatre.

That a music system can still matter to someone fifty years after it was made.

Those are extraordinarily difficult things to achieve.

Now comes the much less romantic challenge.

After ten completed financial years and approximately DKK 939 million in accumulated net losses, Bang & Olufsen has to prove that all of that beauty can once again produce something terribly ordinary:

Not because money is more important than the soul of Bang & Olufsen.

Because without a sustainable business underneath it, eventually there may be no company left to protect that soul.