Luxury electronics manufacturer B&O is continuing to lag behind on the North American markets but growing sales in China have resulted in a 2 percent increase in revenue for the first 3 months of the financial year.
In his note in the accounts, CEO Henrik Clausen indicated that he was pleased with the strong growth in the eastern markets, reports Berlingske.
Struggles in the west, growth in the east
B&O’s sales in North America dropped by 29 percent compared with the same period last year, causing a 9 percent drop in revenue within western markets of 280 million kroner.
However, sales in in the east grew by 26 percent over the same period, China being a particularly hot market as the growing middle class purchases an ever-increasing number of luxury products.
Signs of strength
The 2 percent increase in gross revenue amounts to 601 million kroner. Over the same period last year, the company operated at a pre-tax loss of 65 million kroner. This year, the made profits of 5 million kroner. This still means an after-tax loss of 4.4 million kroner, compared to the first quarter last year in which the company lost 55 million kroner.
“In spite of an ongoing reconstruction of our sales and distribution network, revenue increased by 2 percent, while improving earnings before tax and free cash flows significantly,” said Clausen. “Our ability to deliver profitable growth during a traditionally small quarter for B&O, shows the strength of our changing business model,” he added.