Hello, everyone, and thanks for joining the call. Welcome to my first webcast in the position as interim CEO.

With me today is our Chair Juha Christensen. Juha will begin by addressing the leadership transition we announced last week and will also be available for questions after the presentation.

I will go through our highlights for the past quarter and provide an overview of our business performance, and following that, I will take us through the financials and our outlook in details before we open the session up for your questions. With that, I will hand it over to Juha.

Thank you, Nikolaj. Good morning, everyone, and thank you very much for joining.

Let me begin with a few words on the leadership transition announced last week and what it means for our company going forward. As we announced last week, Kristian Teär has stepped down as CEO.

Nikolaj Wendelboe has assumed the role of interim CEO alongside his current role as CFO. The board has formally initiated a process to search for a new CEO for Bang & Olufsen.

On behalf of the board, I want to sincerely thank Kristian for his significant contributions to Bang & Olufsen. Kristian joined the company in 2019 at a critical point in our history.

He was faced with the unprecedented challenge of leading the company through the COVID-19 period. Over the past years, Kristian has played a key role in setting the strategic direction and in establishing a solid financial foundation for the business.

For that, he deserves recognition and our thanks. The search for a new CEO is ongoing.

It is a carefully considered process to ensure we find the right long-term fit, a leader who can take the company confidently into its next layers of execution. We have the full confidence in Nikolaj as interim CEO.

He brings deep knowledge of the company, financial discipline, data-driven decision-making, and solid continuity at an important moment. Let me also be very clear about something important.

The overall strategy and our ambition for Bang & Olufsen remains unchanged. Our goal to strengthen our position as a global leader in luxury audio and to deliver sustainable, profitable growth stands firm and unchanged.

In January '23, we set the strategic direction that we are now following, and last financial year was a transition year marked by investments and business optimization, leading us on a solid foundation to accelerate strategy execution. To underline our commitment, we defined mid-term financial ambitions for the three-year period spanning the 2025/26 to 2027/28 financial years.

We're now six months into our three-year mid-term plan. As we enter the next phase, the board believed it was the right moment to sharpen our operational focus, accelerate execution across all markets, and further elevate the end-to-end client experience.

This is about building on the momentum already underway, as well as raising the bar on operational excellence. As part of the next phase is ensuring that our organization is equipped to execute at a higher level.

That means giving our engineers, designers, and product teams in Struer, Lyngby, and across the company the right tools, processes, and decision frameworks to continue deepening and expanding our product portfolio with best-in-class offerings. At the same time, it means enabling our commercial and channel teams globally across our 326 monobrand stores and our broader partner network to translate that product strength into consistent, high-quality execution across all markets.

Finally, we're focused on strengthening Bang & Olufsen's marketing capabilities so that brand investments, retail activation, and product launches work together as a more effective and scalable demand generation engine. These priorities are central to the board's view of what is required to fully realize the strategy we have set.

With that, I hand back over to you, Nikolaj.

Thank you, Juha. I'm honored to assume the role of interim CEO and would like to thank the board for the trust and confidence they have placed in me.

I would also like to thank Kristian for the last six years, a period where we have steered the company through several global challenges and have set the foundation to accelerate our strategy. I am confident that, together with exceptional team at Bang & Olufsen, we will deliver focused execution of our strategy and continue to move the business forward.

Let us begin by looking at the highlights of the quarter. Highlights for the quarter was growth in like-for-like sell-out, with branded channels and win cities performing well.

Group revenue declined by 1% in local currencies, driven by lower revenue from non-branded channels and brand partnering. Gross margin continues its increasing trajectory, resulting in EBIT before special items of -5.3% as we have invested in centennial campaigns and events.

Adjusted for that, the EBIT margin before special items was around 0%. We had a busy quarter with the launches of the earphones Beograce, the Beosound Premiere soundbar, and our ReLoved program.

We also opened a flagship store in Paris in December, and we opened the first of three stores in California. Lastly, we were very busy with our 100-year anniversary, which we marked across the globe, a significant milestone reflecting our rich heritage in design, craftsmanship, and acoustic innovation.

In the celebration of our centenary in November, we executed a global brand campaign and a series of celebration events across key markets, combining a clear global direction with strong local execution. Together, these moments honored our heritage, showcased the strength of the brand today, and marked our transition into the next century of Bang & Olufsen.

The events brought together clients, partners, media, and key stakeholders and generated extensive media coverage globally. As part of our global centennial campaign, we activated our brand at the iconic Harrods in London through a window takeover on Brompton Road following the recent uplift of our Harrods store.

Each window focused on a defining decade in our history, illustrating the evolution of our design over time. The activation delivered strong results: footfall in Harrods increased by a notable 64% versus the same period last year; in fact, November became the highest revenue month on record for the store, growing 71% year on year.

As I highlighted, we announced three product innovations in the quarter. With our Beograce earphones announced in September '25, we are redefining the in-ear category.

With a solid foundation in the DNA of Bang & Olufsen, we have created the best audio quality in-ear wireless earphone, leveraging our competencies for functional and beautiful aluminium design. As with our H100 headphone, the earphones are built on our proprietary Amadeus software platform, which ensures full flexibility in development of features.

The combination of design, craftsmanship, and acoustic excellence underlines what B&O products stand for. In November, we announced the soundbar Beosound Premiere, adding a soundbar to a portfolio that fits TVs from 42 inches and upwards.

The soundbar complements our TV offering in the Staged category alongside Beosound Theatre and Beovision Harmony. Beosound Premiere differentiates from the market in the combination of innovative features.

The soundbar is built with wide-stage technology, precision tuning from our Struer craftsmen, and powered by our Mozart software platform. Once again, leveraging our expertise, it's sculpted from pure aluminium and offering full integration with our home speakers.

Cementing our longevity promise, our ReLoved program was launched in October on our own e-com channel. With ReLoved, we're taking yet another important step towards extending the life of our products.

Through this initiative, we offer select refurbished products with Bang & Olufsen warranty and official certification through monthly product drops on our e-com. The launch has been successful, with three out of five drops sold out within the first week after launch.

We plan to expand the offering during the year to our stores throughout Europe, giving the stores the opportunity to sell refurbished products with Bang & Olufsen warranty and official certification. All three launches complement our current product portfolio and support our ambition of leading the luxury audio market with iconic, long-lasting products.

The ReLoved program further underpins the value and the resale value of our products. As part of our channel optimization, we continued to strengthen both the footprint and the quality of our branded retail network across regions.

Starting with the actions taken during the quarter, we opened two new stores, carried out two strategic relocations, eight store uplifts, and eight selective, planned closures. These actions reflect our continued focus on improving the quality of the network, not just expanding the number of stores.

Turning to the EMEA region, we opened a new flagship store in Paris in November featuring our culture store concept, a design concept that turns our stores into immersive spaces where design, sound, and local culture meets and invites guests to experience, feel, and connect with Bang & Olufsen. The number of stores in Paris remained unchanged as one store, our company-owned stores in Les Archives, was closed during the quarter.

We opened two pop-up stores, one in Oslo and one in Zurich Airport, and these pop-ups allow us to test locations while increasing brand awareness in our markets. In the Americas, we reached an important milestone after quarter-end with the opening of our partner-operated flagship store on Union Square in San Francisco.

The store also features our culture store concept and is the largest Bang & Olufsen store globally and the first of three planned openings in California this financial year. The planned expansion will continue with openings in Palo Alto and West Hollywood in the second half of 2025/26.

In the APAC region, we continue to improve the retail network, particularly in China, where several stores were uplifted and underperforming locations were closed. Now please move to page 10, and I will go into the financial and outlook in more details.

I'll begin with our sell-out. Our like-for-like sell-out was reported 7% growth in the quarter.

For branded channels, like-for-like sell-out grew by 8%, with double-digit growth from company-owned stores and e-commerce. Looking across our regions, we had like-for-like sell-out growth across the board, driven by branded channels.

In EMEA, we saw an increase of 2%, which was driven by double-digit growth from company-owned stores and e-commerce and single-digit growth from our monobrand stores. In the Americas, like-for-like sell-out increased by 9%.

Branded channels grew double digits, while our monobrand stores declined single digit. Despite lower consumer sentiment, we see good traction from our company-owned stores.

Like-for-like sell-out in APAC grew by 17%, driven by the branded channels. The e-tail channel increased, driven by sell-out growth from China, where we operate our own online flagship store.

For our win cities—New York, London, Paris, and Hong Kong—combined sell-out growth was 19%, marking the sixth consecutive quarter with double-digit growth. Group revenue declined by 1.2% in local currencies, totaling 667 million for the quarter.

Looking at our performance across our product categories, revenue from product sales were overall flat in local currencies year on year. Both Flexible Living and the Staged categories performed well, while the On-the-go category declined.

Revenue from brand partnering and other activities declined by 12.3% in local currencies. This is partly driven by timing effect in our automotive licensing revenue, and license revenue from HP declined as expected and was offset by increased revenue from TCL.

I will now go into more details per region. When looking at the results overall on a regional level, product sales declined by 2.2% and, as mentioned, was overall flat in local currencies with a modest increase of 0.2%.

The gross margin increased to a record-high 54.4% for the quarter, and in general we're seeing positive developments in the margin across regions. In EMEA, revenue was 342 million, which was a decline of 2.2% in local currencies, and revenue from our company-owned stores rose double digit, while revenue from the monobrand channel declined single digit compared to last year, driven by Central and Southern European markets.

Revenue from multibrand and e-tail declined mainly due to lower revenue from the On-the-go category. Last year, the launches of Beoplay H100 and Beoplay 11 generated high comparables, as well as end-of-life sales of Beoplay EX.

The gross margin rose to 51% from 49.3% in Q2 last year, mainly driven by a shift towards higher-margin categories. Moving to the Americas, revenue declined by 2.4% in local currencies to 79 million.

Revenue from branded channels rose double digit compared to Q2 last year, driven by our monobrand and company-owned stores. Hence, from a channel perspective, the decline was driven by enterprise and e-tail.

We saw a decline of 41% year over year for the On-the-go category, driven by a strong quarter last year due to the launches and end-of-life mentioned, as well as reduced promotional activities. Despite the change in tariffs, the gross margin increased from 48% to 56.4%.

This was driven by a shift towards higher-margin products, with especially the Staged category performing well. For the APAC region, reported revenue was 185 million and increased by 6.1% in local currencies.

This was achieved despite China, which accounts for around half of the region, being down by 0.5% in local currencies. From a channel perspective, the increase was driven by company-owned and monobrand stores.

The gross margin increased from 47.4% to 59.7%. This was a result of shift in product mix towards higher-margin products, improved product margin across categories, and the takeover of the Tmall online flagship store in April '25.

The gross margin for the brand partnering and other activities was 89.7%, and the development reflected a change in mix between license and product sales compared to Q2 last year. The group gross margin was 57.9%, an increase of 4.2 percentage points from last year's margin of 53.7%.

The EBIT margin before special items decreased by 7% percentage points to -5.3%. When we look at the EBIT bridge between Q2 last year and this quarter, the main driver of the decline was the extraordinary costs related to our centennial campaigns and celebrations.

Excluding these extraordinary costs, EBIT before special items was around 0. Capacity costs increased by 67 million, of which 63 million was related to distribution and marketing and driven by the activities surrounding our centennial campaigns and celebrations.

The marketing cost ratio was 14.1% compared to 9.3% in Q2 last year. Adjusting for the extraordinary centennial cost, the marketing cost ratio was 9.4%.

Development costs increased by 5 million, and the ratio of incurred development cost before capitalization to revenue was 15.6% compared to 13% in Q2 last year. This was driven by the addition of software talents in line with our strategic focus.

Net working capital decreased by 27 million during the quarter to 289 million. Trade receivables increased by 117 million, and trade payables increased by 103 million.

Inventory increased by 13 million to 487 million. The inventory level is expected to decline during the second half of the year.

The free cash flow was negative 33 million for the quarter, reflecting cash flow from operating activities alongside continued investments in product development and our retail network. These investments led to CapEx of 74 million for the quarter, an increase of 20 million compared to Q2 last year.

Capital resources were 267 million compared to 319 million at the end of Q2 last year. Out of the 267 million in capital resources, available liquidity accounts for 117 million compared to 159 million in Q2 last year.

Then moving to the outlook for the financial year 2025/26. As announced last week, based on the performance in the first half of the year, we have narrowed parts of our full-year outlook.

This reflects increased visibility following the first half of the financial year, while the overall strategic direction and underlying assumptions remain unchanged. We expect our recent product launches and store openings to support growth in the second half of the financial year.

Revenue growth in local currencies is now expected in the range of 1% to 5%, narrowed from 1% to 8%. The outlook for EBIT margin before special items remain unchanged at -3% to +1%.

Free cash flow is now expected to be in the range of -100 million to -50 million, narrowed from -100 million to 0. We continue to monitor developments related to tariffs and are taking mitigation actions where relevant.

To conclude, we remain on track with our strategic execution and investments, and we continue to focus our execution across retail, brand and marketing, and product development. Now we will turn into the Q&A session.

Thank you. I have a few questions.

Let's start by the change of CEO. You mentioned that you are now focusing on execution and on improving R&D, especially on the focus on software.

Can you just give some flavor on what, in fact, that you are concluding that Kristian Teär did not have a competences within these areas after the long transition? That's question number one.

Let me address this.

Kristian played a central role in bringing Bang & Olufsen to where we are today. We are in a stronger position, and we are more focused, and we are ready for the next phase.

The CEO transition is not at all about changing direction. It's about accelerating the direction and execution where we already are.

One would say there's never a good time to change CEO, but we consider that probably the best time is when you are stepping into a new accelerated execution mode like we are, and that's why we decided to do this now. Can you put some flavor on what you're looking for?

Is it international or non-Danish potentially, a person with high track record within luxury or retail, or is it in the R&D part? Bang & Olufsen is multiple things.

We are a product company, we are a retailer, and we're also very heavily involved in custom installations. The ideal candidate should of course be an expert at all three.

It's unlikely that such a person exists out in the world. What we are actually principally looking for is someone with a strong execution ability, someone who is good at hiring and activating the right people and letting them do their work, and creating a strong ethos of data-driven decision-making across the company.

We're of course looking everywhere. We are looking internally, we're looking externally, we are looking in Denmark and beyond.

What's clear is that this company deserves an outstanding CEO, and that's what I'll go out and deliver to the company. What timing should we look for?

Should we expect that someone is in place by late year? There I think calendar year.

This is about getting the right person, not about getting the right person as quickly as possible, I'm not going to put a date on that.

Okay. Then one operational question.

If I can just add to it, Poul, the company is locked and loaded on execution across multiple areas. Product, we have a strong product organization and we've had an additional hire who have just started to further accelerate and drive the execution on the roadmap that's already in place.

On the channel, we have a good understanding and handle on our unit economics, on what it takes to find a store, to get it ready for opening, and the economics bringing us into where the store is cash flow and P&L positive. We know we are probably a bit behind the curve on marketing, but we're making good progress with our interim situation right now to create a strong demand generation engine as well.

The company overall is in very good hands under Nikolaj and the global leadership team to execute thoroughly. In between CEOs, we're looking at accelerating, not treading water.

Okay. Thank you.

Then I guess it's for you, Nikolaj. You mentioned the results out of Harrods by having a large marketing push.

I assume that could then be extrapolated on the group that marketing is having an impact on the looking for [unclear]. How are you looking at this now?

Would you like to have much more resources, or is it just if you have the resources?

Your sound was a little bit on and off, Poul, but I think the question was related to marketing resources and what we've learned from the Harrods execution, of course. I think [unclear] I think in terms of marketing, it's not necessarily about spending more and more money; it's about spending the money in the right way to create the right impact.

That is of course something that we are working on improving based on data and also based on things that we are trying, like, for instance, what we've done in Harrods. Because one of the key things for our marketing organization is, of course, to drive customers into the stores, because when they're in the stores, then they can also make a purchase.

We were quite successful with that on the Harrods takeover. Of course, we are taking learnings from that particular campaign.

Equally important is, of course, also to take the learnings around the investment level versus the impact that is giving, and that's something that takes longer time to measure, because there's also a tail, of course, from an event or a takeover like that until you have the full impact. This is the direction we're going: driving more footfall through marketing, but also making sure that we spend our money on where it makes the most sense.

Okay. I'll step back to see if there are otherwise I'll get back to you.

Thank you so much. First question on the gross margin progression in Americas.

Could we extrapolate on the very nice gross margin improvement that you made here in quarter two? Is this sustainable for the coming quarters as well?

A second question on your sell-out, which has been quite a bit higher than your sales growth in local currency for the past four quarters. Perhaps you could just first remind us how you calculate your sell-out growth.

Which channels are included in your sell-out growth? Secondly, would the fact that sell-out growth has been so much higher than sales growth in local currency, would that suggest that inventories are at a very low point?

My third question would be on special items for this fiscal year. How much in special items should we build into our models?

Thank you.

Thanks, Niels. First on the gross margin in the US.

There are several factors that are leading to this significant increase in the gross margin. I can easily say one thing: we will not see that kind of increase quarter over quarter and year over year.

That's for sure. Can you use it as a new level?

Not exactly, because there are some things in this particular quarter where the improvement is coming from the stores that we opened in San Francisco, where we also sold in more Staged products and especially more of our very expensive products, Beolab 90s, to the California stores as part of some special editions we have created for that market. That has an higher than normal gross margin.

That being said, last year we had a number of end-of-life sales, especially on Beoplay EX, and last year we also had more promotional campaigns, especially in the e-tail channel, for instance during Black Friday, than what we have done this year. As part of our transition away from price performance in consumer electronics towards taking the luxury audio position, we are also expecting our gross margin to increase in the US to a level that is more on par with the rest of the world, with the caveat that in the US, you have tariffs, and in the US you also have a higher landed cost on your product.

It will be difficult for them to get to the same level as EMEA and APAC. We are seeing these improvements as a good sign that we are going in the right direction.

Then on sell-out, it's correct that sell-out for the quarter is 7%, sell-out for branded channels in the quarter is 8%. If we look at the branded channels, or maybe let me go back and explain how we are calculating like-for-like sell-out as you're asking.

Like-for-like sell-out is a measure of same-store sell-out. It has to be on stores where we have been open this quarter, but then also had stores were open in Q2 of last year.

It's a like-for-like measure. It includes, in principle, all channels where we have like-for-like stores.

Of course, the most stable environment at the moment on like-for-like stores is in our branded channels, our monobrand channels, our CoCo channel and our e-com, whereas in multibrand and e-tail, with the big changes that we've done in that retail network, the like-for-like numbers are based on fewer stores, of course. If we dive into the like-for-like sell-out in the branded channels, then you are bridging 8% in sell-out with 5.4% growth in revenue.

A main part of that is a reduction of inventories, especially in the monobrand channel, that is driving this difference, along with other technicalities that I'm not sure will bore you with at this call. When you're measuring like-for-like sell-out, you're measuring it in retail weeks, because you need to make sure that you're comparing weeks with weeks, whereas revenue is measured in calendar month, and that can actually change a little bit is when a month is ending and starting compared to the weeks that you are measuring.

That gives some small differences. The large difference is related to inventories.

Secondly, the fact that the like-for-like stores that are new versus the like-for-like stores that we took out last year also giving a positive impact, which is actually showing that our retail transformation is improving our sell-out. Finally on special items, I don't think I will comment in any details on special items.

Obviously, with the leadership change, there will be some special items related to that. This will be disclosed in the remuneration report at the end of the year.

Of course, some provisions can be expected also at the end when we're reporting our Q3 numbers. I think if you want to get a feel for it, I would encourage you to read our remuneration policy, and then you will get a good sentiment of what that could lead to.

Thank you so much. Perhaps you could just remind us, when it comes to sell-out growth and the branded sell-out growth, which you highlight as being 8%, how much does that represent of your total product sales?

Thank you.

From a revenue perspective, it represents approximately, if you take of product sales, it's around 60% of product sales it represents.

Great. Thank you.

Yes, thank you. My question is, I don't know if you want to comment it right now because it's a little bit current quarter, but can you say a little about the impressions you have from the opening in San Francisco and the new store in Paris, and also the two product launches you've had?

We have some great openings of the two stores. I'm not going to comment in detail on the performance of the stores.

San Francisco opened in December, the data there is also limited. Of course, in general, the openings of three stores in California this year is going to help the second half of the year from a growth perspective, for sure.

The Paris store was opened in November and replacing the very small store we had in Les Archives in Paris. Of course, are continues doing business with the clients that we have there, it's impacting our numbers positively.

I think more importantly, we had the launches of Beograce and Beosound Premiere. Both of these launches came late in the quarter, the impact this quarter from both the sell-in and the sell-out perspective is limited.

As we're ramping up to full capacity on the production lines, this will have a positive impact also in the second half of the year. We have high hopes for these two products.

When we get to our Q3 reporting, we will, of course, say more about how they were performing. Okay.

Just to understand about the US gross margin, you said it was supported by sell-in of high-end products to San Francisco store, and therefore we should not expect continue. What about LA and Palo Alto?

That must then be supporting the Q3, Q4 US performance.

These stores will definitely support Q3, Q4 performance in the US. There was a higher than normal sell-in in relation to the San Francisco opening due to these special variants of Beolab 90 that we produced for this specific opening event.

That's why it's a little bit higher than it would normally be from a sell-in to a new store. Okay.

Then about your liquidity, I can see that your credit facility has been reduced from 250 to 150 million. Is that because you don't think that you need it anymore, or is it any other reasons why it's been reduced?

No. Maybe to clear that out, it has not been reduced.

The credit facility is the same, but over the end of this quarter, we had utilized part of the credit facility. When we talk about available credit facility, we, of course, deduct the part that hasn't been utilized yet, but it remains the same.

We've utilized it over the end of the quarter basically as part of daily cash management efforts, and nothing out of the ordinary on that.

Okay. Then my last question, that is on the like-for-like, and coming back to Niels' question about the channel inventories.

When do you see or expect the channel inventories to have bottomed out, meaning that we should see a positive contribution from the sell-in also?

The channel inventory is always fluctuating, because in different quarters, you have different seasonality on on channel inventory. Typically, it goes up in Q1, and then in Q2 you We've seen that for many quarters.

In Q2, you're reducing your channel inventory because you have high sales out due to high season, and the same goes for December. Then you typically also see some channel inventory building in connecting with product launches, etc., etc.

Generally speaking, we we are satisfied with the inventory level that we have in into channels. The reason why it becomes an important thing for us to discuss is because we're seeing the differences between revenue and sell-out, where the movements in the inventory, of course, plays plays a role.

We We only have a few places in the world where we think channel inventory is too high, one specific country in in Asia, in in Korea, whereas in the rest of the world, the channel inventory is quite satisfactory.

Okay. That was all for me.

Thank you, everyone, for your interest in Bang & Olufsen and for joining today and for your questions. If you have any additional questions, don't hesitate to reach out to our investor relations team, and I wish you all a great day.