Værdiansættelse af Bang & Olufsen

Abstract

The purpose of this dissertation is to prepare a valuation of B&O. To solve this is prepared a strategic analysis and a financial analysis. These two analyses are basis for a 10 year budget for B&O on which the valuation calculation is based. The strategic analysis of B&O at first covers the internal situation of B&O. I have concluded that B&O have more strengths than weaknesses. The major strengths of B&O are their brand and know-how, which they have built during several years. Their brand shows up at several lists of exclusive brands. A major weakness is the high level of dependence of trade conditions and under the present market condition they can’t compete on prices to boost sales at they don’t have the Economy of Scale advantages. In addition there is a risk competition on prices can jeopardize the interpretation of the brand as exclusive. A benchmark of B&O shows the company only has one direct competitor Loewe AG from Germany. The benchmark shows that B&O have been better and faster to react to the world wide crisis than Loewe. This is also seen from the present financial results, in spite both are negative. Thereafter the external situation of B&O has been analyzed. In this area I have concluded that the market conditions in general are negative, but the growth in the BRIC countries can be an opportunity for B&O. In addition, the new brand B&O PLAY and the initiatives at the Auto market can result in future growth in sales. Finally is prepared a financial analysis to get an insight into their financial situation from after the financial crisis started in 2007/2008. The analysis shows that B&O have had some improvement for a period, but looking at the first three quarters of the financial year 2012/2013 shows the result again has turned negative. From the analysis it´s difficult to give a clear picture of their future financial performance. Based on above analyses is prepared a 10 year budget for B&O and based on a DCF model this results in a share value of 36 DKK per share. This value is somewhat lower than the traded price of 49,80 DKK as per April 5, 2013. Anyhow, I have the opinion that B&O has initiated several correct actions also reflected in their new 5 year strategic plan, but still their major weakness and threat is their dependence of the trade conditions.