Bang & Olufsen A/S
CSE:BO
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
8.3
10.88
|
| Price Target |
|
We'll email you a reminder when the closing price reaches DKK.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Bang & Olufsen A/S
You don't have any saved screeners yet
Ladies and gentlemen, welcome to the Bang & Olufsen Interim reports Second Quarter 2020 to 2021. [Operator Instructions]Today, I'm pleased to present Kristian Teär. Speakers, please begin.
So hello, everyone, and thank you for joining the call. Due to the COVID-19, we're not sitting together as we normally do. So this will be our first to be a part at different locations.Today, I will start by going through the highlights of the quarter and provide an update on how we are progressing on execution of our strategy. Afterwards Nikolaj Wendelboe, our CFO, will take you through our financials in more detail. Then I will go through the outlook for 2021 before we open up for questions. Our Head of Marketing and Digital customer experience, Christian Birk, is also with us today and will take part in the Q&A session later.Now, if you move to Slide 4. We announced the preliminary numbers for Q2 on the December 15, where we also communicated our increased outlook for the year. Those numbers are unchanged with the exception of the Q2 growth in local currencies, which ended at 12% instead of 11% as we had estimated in the preliminary numbers. Overall, we are pleased with the second quarter results. As communicated in December, we delivered a positive EBIT as well as a double-digit growth for the second consecutive quarter and the positive cash flow. We achieved growth in all regions, and the results were primarily driven by strong execution on our key strategy priorities, successful product launches and higher consumer demand for home entertainment products. We did experience headwind related to COVID-19 with lockdowns impacting markets across the world as well as higher logistics and component costs. I will go into more details on how we have worked to mitigate that on the next slide. An important part of making the company profitable again is our cost program. Launched in March, and with targeted annual savings of DKK 175 million, I'm pleased that this program is progressing. We achieved a positive free cash flow of DKK 139 million in Q2, and we go into Q3 with DKK 582 million in available liquidity, which allows us to continue to execute on our strategy and get through the current wave of COVID-19.Based on our performance in the first half of our financial year, we increased our outlook in December. We now expect revenue to be between DKK 2.3 billion and DKK 2.5 billion; EBIT before special items between negative DKK 50 million to positive DKK 25 million; and free cash flow to be between negative DKK 50 million to positive DKK 100 million.So please turn to the next page. We have seen COVID-19 impacting our business in 3 key areas during Q2. First, we have seen lockdowns in a number of our markets. By the end of Q2, 82 stores in France, United Kingdom, Belgium, among others, were closed, and currently 160 stores out of our 467 monobrand stores are closed. Many stores can still transact and run installations, but it does, of course, impact daily operations. During Q2, we worked closely with our monobrand partners to mitigate these challenges. We increased the focus on existing consumer base who already has a relationship with the local dealers. We significantly increased our digital efforts to increase awareness and finally, we adjusted our e-commerce revenue sharing model in those markets impacted by lockdowns.Secondly, we saw a more unstable supply situation. Scarcity on components in the consumer electronic industry led to higher prices on some components and problems meeting demand on some products, which was higher than anticipated. We also experienced challenges to production due to reduced labor capacity in regions severely impacted by COVID-19. We have increased our focus on supply chain management and added more resources internally to solve these together with our global supply partners.Thirdly, as other consumer brands, we were impacted by reduced global logistic capacity. To meet demand, we increased the use of airfreight, which together with higher freight rates led to higher logistic costs. When the supply situation normalizes, we will again return to more sea and rail freight, which will help to bring costs down. There are still a lot of uncertainties related to COVID-19, and we do expect this global pandemic to impact our business in the coming quarters. We continue to work diligently with both retail and supply partners to mitigate the challenges related to this.So if we move on to next slide. We have shown our strategy house in previous earnings calls, but I want to reemphasize that our strategy is and how we are executing on our strategy. Currently, we're in the first phase, where our focus is on fixing the basics and becoming profitable again. With our current progress, which is also reflected in our outlook, we are within reach of being profitable this financial year. We still have a lot of work ahead, but I'm encouraged by the progress we have made both financially and in the underlying business despite the challenges related to COVID-19. We have made significant improvements in many areas in Q2, and I will give you an update on some of those focus areas on the next couple of slides.If we move to the next slide. In our strategy, we have identified 8 core markets where we want to win before we scale our business. In Europe, the 6 core markets realized 13% growth, driven by monobrand and our own e-commerce. Multibrand stagnated, and this was mainly due to delays in some changes to strengthen the operating model, COVID-19 impact in travel retail, and a softer participation in Black Friday sales compared to last year. We have made changes to our multibrand channel to ensure a stronger foundation for future growth. This included a new commercial framework as well as the onboarding of several new partners. Among others, we have onboarded both Ingram Micro and Tech Data as new distribution partners in Europe. We expect this to improve our sales performance already in Q3 and Q4. Monobrand continued to perform well. To strengthen our relationship with the partners and to further improve sales, we completed a comprehensive partner survey during the quarter to strengthen our collaboration and partnership with the dealer network. This will now form the basis for future initiatives in this channel. In Q2, we also took over 2 monobrand stores in London to gain more control of the brand experience and ensure the right activation in the city as a whole. The stores are targeting the high net worth individual segment in particular, which is one of our key consumer segments. In the 2 Asian core markets, we grew revenue by 6%. Our sales in Asia has benefited from higher demand for home entertainment products as we have successfully adjusted our go-to-market approach to cater for this demand. A consequence -- as a consequence, the Flexible Living category grew more than 75% in the 2 core Asian markets in Q2. A large share of our revenue in Asia has historically been generated from On-the-go products. So in Asia, we were particularly challenged by the impact of COVID-19 on travel retail. We decided to make changes to the Greater China region management in December to further accelerate the growth and strengthen our capabilities across the channels. We expect to add more resources to the team, like we have done in Europe, in the coming quarters to help realize the growth potential we see in China and South Korea, both short and long term. If we move to the next slide, please. Innovative products are the heart of Bang & Olufsen, and it has been a key priority for us to maintain a high frequency of launches this financial year. We launched 7 new or upgraded products in the first 6 months and that contributed to the positive development in our financial performance. The products have been well received by our consumers and many of them are best-in-class in their category. And we expect to launch more than 5 new or upgraded products in the next 2 quarters to add to our already strong portfolio. In December, we launched a second-generation Eclipse 65-inch TV. In Q2, we launched 2 new products, Beoremote Halo and BeoVision Contour, 2 upgraded products in Beolit 20 and BeoVision Eclipse second-generation as well as the golden collection to celebrate our 95th anniversary and the Rapha E8 Sport's collaboration. The launch of BeoVision Contour was a testament to our agile development capabilities. Since the launch of our strategy, part of our focus has been to launch a smaller-sized TV proposition to respond to second room and second home demand with a lower price proposition. This demand was highlighted also by our monobrand partners, and we are proud that we brought this product to market in a record-breaking short period of time.In Q2, we also revealed the first product in our Classic Editions program, the Beogram 4000c, which has been very well received among Bang & Olufsen consumers and highlighted the longevity of our products. The Classic Editions program is one of the 3 new product initiatives, which also include limited editions and the scope programs that we have introduced to boost brand awareness and differentiation in the marketplace. The new technical platform first introduced in the Beosound Balance and Beosound A1 second-generation continue to perform well in Q2, but we also released several software updates for our old platform. To improve the user experience on these platforms, we have added new features, solved known connectivity issues and updated Apple Airplay and Google Cast software. We continue to see our products being rated best-in-class and receive awards. Our Beosound A1 second-generation, which has already received several awards, got the 5 out of 5 star rating by What Hi-Fi. In November, we received an honorary prize by Lyd & Billede in recognition of our ability to continue to innovate and bring new iconic products to the market even after 95 years.So let's move to the next page. In line with our strategy, we continue to develop and launch several new initiatives in Q2 to further strengthen our digital platforms. On our own eCom platform, we continue to invest and expand the eCom functionality into our apps, social media platforms and create retail network enablers like Click and Collect pilot now launched in the U.K. With people facing restrictions due to COVID-19 lockdowns, our augmented-reality or AR experience app allow customers to place our speakers and TVs in their home virtually. And we have seen increase in traffic to this app in Q2. We also launched a new functionality to now allow customers to try on the favorite headphone style virtually and place their orders directly through the app. Providing the best possible consumer and customer experience is a significant focus for us. We now have an internally built system which by combining a range of internal and external data sources allows us to see where our customers are facing certain pain points. Related to that, we have built tools for customer services to diagnose product remotely and deploy any fixes needed. All of these initiatives help to serve our customers better. We see that this leads to higher performance on our own eCom, which grew by 74% compared to Q2 last year. But also to drive a better customer experience, and our data indicates increasing customer satisfaction across all product categories. And with that, I would like to turn over to you, Nikolaj to take us through the financial development.
Thank you, Kristian. Now please turn to Page 11. As Kristian said, we have delivered our second consecutive quarter with double-digit growth. And this was also the first quarter with positive EBIT since we launched our new strategy. Revenue increased by 12% in local currency. Like in Q1, the revenue growth was related to home entertainment products, and especially Flexible Living performed well, growing by 61% in the quarter. We saw this trend in all regions. All regions delivered year-on-year growth. Compared to last year, product launches had a positive effect on growth. In the Staged product category, we did see a small decline in Q2 compared to last year. This decline was expected as we, in Q2 last year, launched a new TV, BeoVision Harmony and our soundbar BeoVision Stage driving sell-in in that quarter. For the first half of the year, the Staged category was up by more than 20%.Looking at our channels. The main driver behind the growth was the monobrand channel, but also our online sales platform performed well. As Kristian mentioned, our own e-commerce platform grew 74%, and we are also seeing our etail partners growing. Revenue from the multibrand channel declined in Q2, which was related to the work of changing the operating model of the channel in Europe that Kristian mentioned before. Multibrand is, of course, also impacted negatively by the decline in travel and lockdowns in certain countries, as for example, the U.K. This impacted our On-the-go category. But it's important to mention that our newly launched products like BeoSound A1 second-generation, Beolit 20 and Beoplay H95 are doing well, and revenue from Bluetooth speakers and headphones increased compared to last year.Brand Partnering and other activities grew by 13% in Q2. PC sales are still doing well. And furthermore, car manufacturing has normalized in the quarter. The gross margin increased by 2.1 percentage points. Last year, we made a provision for component liability, which had a negative impact on the margin that year of approximately 4 percentage points. Adjusting for this, we saw a decline in gross margin of approximately 2 percentage points. This was mainly due to higher component cost and logistic costs. Especially logistic costs increased as a result of more products being moved by air to ensure deliveries to partners in a situation with a tight supply chain. The cost was further accelerated by freight rates increasing following capacity being lower. The EBIT margin before special item increased by 13.9 percentage points to 4.1%. The improvement was driven by the revenue growth and the higher gross profit as well as lower capacity cost, the lower cost being result of the cost reduction program yielding savings of DKK 32 million in the quarter.Please turn to the next page. As I mentioned, all regions delivered year-on-year growth in Q2. Home entertainment products were the main driver with all types of speaker categories growing, but especially Flexible Living products drove the growth. In EMEA, revenue grew by 13% in local currency. The monobrand e-commerce channels were the main growth drivers. The multibrand channel was impacted negatively by the work of changing the operating model of the channel. The growth came from Flexible Living and On-the-go products. Flexible Living was driven by most products in the category. Within On-the-go, the growth was driven by newly launched products like H95, Beolit 20 and A1 second-generation. The decline in the Staged category was related to the TV portfolio and impacted by the product launches last year, and the decline was, as mentioned before, expected. Sales of speakers increased but was restricted by availability of products due to the global component shortage in the industry. Americas increased by 29% in reported figures but 41% in local currency. The growth was seen across all channels and all product categories. The growth in the Staged category was mainly driven by speaker sales, but again, limited by product availability. Flexible Living grew across most products in the category. It was also supported by some multibrand partners expanding the product range they offer to consumer. The On-the-go category grew in both speakers, headphones and earphones and mainly driven by newly launched products like A1 second-generation, Beolit 20, H95 and EH4. In Asia, revenue increased by 5% in local currency, driven by Flexible Living and mainly related to the monobrand channel. The growth in the Flexible Living category came from all speakers. As with the other regions, the decline in the Staged category was related to TVs where speakers delivered growth. The decline in international travel activity impacted On-the-go. Because the On-the-go category accounts for relatively more in Asia than in other regions, the decline in international travel affects Asia relatively more. Finally, brand partnering and other activities grew by 16% in local currency. The increase was related to both HP and HARMAN, driven by PC sales and a normalization of car manufacturing. Please turn to the next page. Our capacity costs declined by 17% in the quarter and 14% excluding special items. We saw cost decline in all 3 cost categories. The cost reduction program yielded DKK 32 million in savings in Q2, bringing the total cost savings to DKK 63 million in the first half of the year. The cost savings are mainly related to nonproduct-related costs and head count reductions in administrative functions. The savings in Q2 were only slightly more than in Q1. The reason for this is related to the supply chain challenges seen in Q2, which means that the cost reduction ambition and product-related cost was delayed. We have focused on securing supply and components, slowing down the work on reducing product-related costs. These temporary challenges have not changed our targeted cost savings.Our development costs declined by 14%. This was related to lower amortization, where the incurred development costs were 1% higher than last year, reflecting our continued focus on product development. Our distribution and marketing costs declined by 11% compared to last year. The decline was partly driven by the cost reduction program, but also postponement of planned in-store marketing activities due to COVID-19. Instead, we invested in building brand awareness and online activation. Finally, administration costs declined by DKK 25 million or 45%. Excluding special items, administration costs declined by DKK 9 million or 23%, which was mainly related to the cost reduction program.Please turn to the next page. Capacity -- CapEx was DKK 12 million lower than in Q2 last year. The decline was mainly related to lower investments in retail due to COVID-19. Investments in product development and technology platforms were at the same level as last year. Our net working capital decreased by DKK 108 million in the quarter, mainly driven by higher trade payables and other liabilities. Net working capital to the last 12 months revenue was 11.4%, which is 5.4 percentage points lower than Q2 last year. The increase in other liabilities was related to accruals on employee costs, taxes, VAT and holiday allowances. I will return to net working capital in a moment.Free cash flow was positive by DKK 139 million, impacted by net working capital and EBITDA being positive DKK 74 million compared to negative DKK 22 million last year. We have introduced a new term in this quarter, namely available liquidity. We want to mitigate the effects of having a large cash position and facing negative interest rates. We have, therefore, invested DKK 450 million in AAA-rated Danish mortgage bonds. To maintain our financial flexibility, we entered into repo transactions, whereby we can assess intra-day financing, if needed. By the end of Q2, we had borrowed DKK 25 million. Available liquidity consists of cash and bonds minus available borrowing. Our available liquidity position increased to DKK 582 million in the quarter compared to DKK 497 million by the end of Q1. We have in Q2 also purchased own shares for an amount of DKK 42 million to hedge our share-based long-term incentive program.Please turn to Page 15. Maintaining control with our working capital continues to be a very high priority for us. Inventory was at the same level as Q1 but significantly lower than Q2 last year. We have since Q2 last year reduced inventory with DKK 142 million. With increasing demand experienced at the moment, we are ramping up production capacity with our partners. Trade payables increased to DKK 481 million, which was DKK 154 million higher than Q1. The increase was related to the ramp-up of production in Q2. Finally, our trade receivables increased to DKK 417 million, mainly due to higher sales compared to Q1. Sales with extended credit was 5% of revenue, and related to new product launches and also the Golden Collection. Overdue trade receivables continues to be at a satisfactory level.And with that, I would like to hand it back to Kristian.
Thank you, Nikolaj. Before opening for questions, I will just briefly go through the outlook and the highlights, so please move to the next page. The outlook for 2021 is unchanged compared to the updated outlook presented on December 15 when we increased our expectations for the year. The outlook for 2021 depends on numerous factors. I will not go through them all, but just highlight some of the main ones. I will refer you to the report for a full description of the assumptions. We expect revenue to be between DKK 2.3 billion and DKK 2.5 billion. We assume that the impact of COVID-19 in the second half of this year will not be materially different from what we saw in the first half. Furthermore, we expect to launch more than 5 new and upgraded products in the second half of the year. We expect the EBIT before special items to be between minus DKK 50 million and plus DKK 25 million. Components and logistic costs are expected to remain at the higher-than-normal level experienced in Q2. Finally, free cash flow is expected to be between minus DKK 50 million and plus DKK 100 million. The outlook on free cash flow reflects the revenue and EBIT expectations and CapEx expected to continue reflecting the product launch plan.So please turn to the next page. So to summarize, we had another strong quarter. First of all, the strategy we launched in April last year is working, and our focus on core markets is paying off. We have launched 7 new and upgraded products in the first half of the year, which have all been well received by the market. And we have planned to launch more than 5 new and upgraded products in the second half of the year, of which we already launched the first in December. We have onboarded new distribution partners in Europe and the U.S. to strengthen the multibrand and B2B performance. We have accelerated our efforts on digital and e-commerce and it is progressing very well. This has also been one of the mitigating actions we have taken to mitigate the impact of COVID-19 and the lockdowns on our business. Our available liquidity increased further in Q2 and we are now at DKK 586 million, driven by our performance on free cash flow.Finally, and before going to the Q&A, I just want to take the opportunity to again thank the whole B&O team, all our employees who have been working extremely hard on executing on our strategy during these difficult and uncertain times.And with that, we will open up for questions.
[Operator Instructions] Our first question comes from Poul Jessen from Danske Bank.
Congratulations for the good performance so far this year. I have a few questions about the sourcing. There's both the component issue, but then I guess there's also the issues in Czech Republic with corona right now. Do you have an indication on how much the capacity has been reduced at the factory Tymphany? Secondly, how much missed sales you have had in the quarter due to lack of products, the number of products which are sold out?Second question is about the distribution agreements in Europe. If you could put some words from the Tech Data and the Ingram, what are they adding? What is changing? And also on the Ingram agreement for the U.S.? And then the final for now is on the TV. Can you elaborate on the impact from the change in business model where monobrand stores have to source it directly from LG, on the TV? How much has that impacted the TV sales for either the first, second quarter or for the first half?
Thank you, Poul. Maybe I'll start, and then I will pass on to Nikolaj to begin with further details. So if you start with the demand side, many of our products had higher demand than we expected, which is positive for us. And then, of course, then to be able to produce that, we have had challenges to find components, and we have been working extremely hard to find the missing components. And the team in procurement has had, of course, headwinds to mitigate this and to work with this. But so far, we have been able to meet our plans and continue to deliver according to our plans. But we do recognize that it is difficult, and we are, of course, working in headwind, and we expect this difficulty to continue for a while. And we also have to pay, as we said, a bit more for the components than we normally would have to do to secure the capacity. Also on the capacity side, the factories and our partners have been able to perform despite the difficult times that they have had and like you say Tymphany in Czech and Czech has been really hard hit and particularly that region where Tymphany has a factory located. But they have also implemented a lot of initiatives to do tests and to have different shifts and making sure that people are not mixed together on different shifts. So they have been able actually to keep on the production, surprisingly, I would say, well despite the challenges and also learned how to cope with it.We know that we have been sold out on quite a few products in the world because of high demand and because of component shortages. I can't give you -- will not be able to give you a precise number but the demand is continuously strong, and we are working hard, of course, then to fulfill that demand and to supply our customers with products, and we hope that we will be able to do so in quarter 3.On Tech Data and Ingram Micro. So we have terminated our current partner for multibrand in Europe, and we have assigned Tech Data and Ingram Micro to help us to do the fulfillment of multibrand in Europe. It took a bit longer time to finalize these agreements than we would have liked. So we have a bit of delay in that execution. Then in addition to this, we have moved away from the kind of sell-in model. In the previous model, we had upfront margins that we gave to the distributor while as with Ingram and Tech Data we work on a sell-out allowance model instead. And that will help us, I think, to perform much better and be much more focused on sell-out and provide the right experiences for our customers.We will also -- and we have also together with the whole sell-in process and meeting with customers and starting to build customer relations and signed up several of the big multibrand customers that Ingram and Tech Data is, of course, already working with as well also for our products. So we get scale from them. We get relationships from them. We get sell-out data from them and efficiency from them that we didn't get before. And also then with the new business model -- unfortunately, it took a bit of time, and the COVID-19 situation also didn't make it easier, but we're ready to go now in this quarter. So we're looking forward to that.On the TV business models and the TV sales, there's a mix of different things here that makes it quite complicated probably to explain. So I'll defer that to Nikolaj to see if he can shed any light on that. But as you know, we started to -- we don't include the revenue from our -- from screens anymore into our revenue because our partners are buying the screens directly from LG Wireless. There is one exception for that, which is Contour, where we actually have bought on a temporary basis the screens in order to fulfill demand and be able to supply to our partners. But maybe, Nikolaj can give you more details on that. So I'll pass on to you Nikolaj to add in anything that we may have missed, and then we'll see whether Poul has further questions from this.
Yes. Thank you, Kristian. And so on the TV side, I think the relevant question here is to look at BeoVision Eclipse second-generation that we launched in November where we compared to last year with the first generation now have a different business model where the screens are sourced directly by the partners. And in Q2, that lost revenue is approximately DKK 10 million. And of course, when we go into Q3 and Q4, that number will, of course, increase because then you have a full quarter impact in Q3 of that. But it's DKK 10 million in Q2, Poul. So I hope that answers your questions.
And you should take the Contour on top of that. That should also be taken as the Horizon was on the model, I guess.
The Contour, as Kristian said, Contour is also going to be sourced by the partners, the screen. But for the first units that we are selling out in Q2, Q3 and partly Q4, but Q2 and Q3, we have actually purchased a number of screens directly from LG in order to secure supply because there was a global shortage of 48-inch screens in the market. So if we were going to launch this product effectively here in November, we had to go and secure the supply. So we did that. So actually, the Contour screens are part of our numbers in Q2. We didn't sell that many Contours in Q2. So the numbers are quite small. We launched quite late in the quarter. But it is actually going through our books with no margin because it's a screen sourced directly from LG. So that will change to the new normal business model during Q3 and Q4.
Okay. And coming back to Kristian. On Europe and the distribution agreement, you also [ write ] about the headwinds from multibrand stores and that you are changing the model there. Could you put a little more on? Is it reducing the number of retailers? Is it reducing the number of stores per retailer? And how far are you in the changes there?
So if we start with it, we had a number of resellers -- too many resellers in the countries before that had been appointed by our master dealers in different countries. We have, for instance, in Switzerland, terminated quite a few of them. They didn't contribute significantly to any revenue for us, but we're frequently discounting our products and selling them in not satisfactory ways in terms of consumer experiences. So we have terminated quite a few of those. And then like I said, on Tech Data and Ingram Micro, we have signed them up because they do deal with the bigger partners that we also want to deal with, like MediaMarkt, El Corte Ingles, not Amazon, and others, and they're helping us to fulfill that, but on a different model, like I said, where we basically give them more of a commission and then we control the sell-out margins allowance together with our partner at the end of the day when the sell-out has been completed.So this will give us a much more and higher focus on sell-out with the right experiences. And it took a while, like I said, to put this in place. So it's not like we have kind of shut multibrand partners down and/or losing revenue because of that. I think on the contrary, we will see growth coming from this area with this new setup. And we actually see it already being successfully implemented in Switzerland. But it also requires a rollout in Germany, France, Spain. And then there has been more lockdown, as you know, in the U.K. So the U.K. market is a little bit behind in this respect. But we have seen good signs of this working and expect that to be executed now in quarter 3.
Our next question comes from Niels Leth from Carnegie.
So my first question would be about the corona lockdowns. So how many stores are currently closed? And how many more weeks of lockdowns would you be able to tolerate in order to meet your guidance for the second half?
Thank you, Niels. I may start, and then I'll probably pass on to Christian Birk as well who can share more insights on what we're doing to avoid what you just described. So we have 168 stores that are currently closed out of 468. But a difference this time compared to the first time around is that, like I said, they are still able to transact. They are working with their installed base. They are working on new leads generated from the digital efforts that we are doing and they are doing, and they're becoming, I think, more entrepreneurial in their way of selling and interacting with old customers and new customers. So therefore we're not too concerned about the fact that they are closed, as long as they can keep this installations up that they're currently able to do, and they're currently able also to transact with on the digital platforms that we have. But I'll let Christian Birk as well show a little bit more light on what we are doing to generate this awareness and convert new customers and old customers into sales despite the lockdown.
Thank you, Kristian, and thanks for the question, Niels. So as Kristian alluded to, we have a series of focus areas during the lockdown. A lot of these was actually connected to the original strategy. So I would say, first of all, to the question of how do we navigate and how do we activate, you can say, the wider channel network. We're doing very specific things across the digital initiative but also marketing initiatives. What we see is we have managed to grow for quite some quarters now the customer base, which we are incredibly pleased with. That is a growth of new customers into the Bang & Olufsen ecosystem. And beyond that, we, of course, focus on getting a dialogue with existing customers, both through a monobrand network but also through our marketing efforts to get them exposed to our new exciting products and the existing portfolio that we think would be relevant for them.Secondly, we have done a lot on the new marketing direction as we announced in the strategy. We saw a need for a new brand and marketing direction, and we really see that paying off now. And all of our data is indicating that. We see a massive opportunity, as you also saw, in the Flexible category that we are growing. People start realizing, and we start communicating better that we actually can -- when you can connect several Bang & Olufsen speakers, you actually have a way greater experience, and that is also part of the reasons here. Simple things like previously, people were looking for driving directions to certain stores when they were going there. We sort of have new tactics in place. So we expose them to phone numbers. We have very pragmatic initiatives like live chat. We have video sessions, other things coming up. So we want to ensure we can maintain the dialogues with our customers and onboard new customers despite the lockdown. And in our own humble opinion, we feel we have done that quite successfully in the previous quarter.
So with your new initiatives, what level of activity would stores be able to maintain, on average, moving to the click-and-collect and ship-from-store options while being in these lockdowns. Are they able to maintain like half of their normal business activity? Or what kind of success rate do you have with your new activities?
I think maybe if I fast start. It's a very difficult question to answer, Niels, because we have 468 partners and they're a little bit different, but we know that some of our partners have had the best month in a long, long, long, long period of time, maybe best ever. So I think it's a testimony to the products that we have built and the new marketing that we are doing and then, of course, their own ability to still transact and operate during the lockdown. So I don't think it's like one answer. So some of them are doing really, really well despite this lockdown situation.
Okay. And then just a financial question here. Could you update us on how many of your stores are owned and operated by you? And what was the effect on your revenue growth from internalizing the ownership of some of your stores in the quarter?
Yes. So maybe I'll start and then pass on to you Nikolaj. So we added 2 stores -- or we actually added 3 stores to our own COCO, kind of company operated and controlled stores, during the quarter. So we have added Harrods, we have added Selfridges in London, and we have opened in Bicester Village Collection, which is an outlet mall outside of London. So we have those 3 in addition to the number we had before, which I think was around 6 or 7, if I'm not mistaken, but you need to help me here Nikolaj with the exact number.
Yes. So we have 10 company-owned, company-operated stores now. And to answer the question -- and the 3 additions that Kristian just mentioned is the new additions here in Q2. To answer the growth question. So 2 of those stores are actually take over of stores from a partner. So on a like-for-like basis, so to speak, it's the same stores as we had previously. Of course, we believe that we are operating them a little bit better. That's why we took them over. So -- and the Bicester Village store was actually not open until December. So there's no impact on that in Q2.
Okay. And then just finally, what was the share of revenue coming from your own eCom business in the quarter?
It was 3%. From own eCom.
So that's 3.0%?
3.0%, yes.
Our next question comes from Benjamin Silverstone from ABG Sundal Collier.
Firstly, congratulations on the quarter. I have a quick follow-up question on Niels' question in regards to how the lockdowns are impacting the sales. You do mention now that your sales from e-commerce is roughly 3%. But could you perhaps elaborate a bit on how you've seen, for example, the traffic to your web page going. I also know that you focused on social media, so perhaps there's been some additional traffic coming from these sites as well. Lastly, I was wondering if you could perhaps give some nuances to the fact that you do have a large liquidity at the moment and low debt levels. Would it be possible for you to accelerate your strategy by increasing your cash burn and perhaps give some feedback on why this would not be a good idea or why this would be a good idea for you guys?
So thank you, Benjamin, and thanks for the encouragement. Maybe start with Birk to share on what is happening on the digital side and the methods that we are using, and Nikolaj to help as well with the numbers. And then I can give my perspective on your last question, finally. So Christian Birk.
Yes. Thanks for the question, Benjamin. So we don't typically disclose traffic numbers externally. But to give you a few pointers and what's, of course, important when we talk about our eCom share to total revenue is a large part of our Staged portfolio is not transacted on the eCom P&L but is where we provide leads into our monobrand network as such. But we have seen growth, I would say, when you look at our customer funnel from awareness, the traffic we bring in, evaluation, people considering buying, to purchase numbers. And of course, the loyalty metrics we look at, we have seen growth across all 4 aspects in the last quarter. In terms of traffic, we focus on a few different metrics here. One is the incremental traffic we managed to drive into our stores, into our digital touch points, could be our apps, social media touch points, our own bang-olufsen.com. Again, we see growth across here. But more importantly, we also look at what's the growth we managed to gain in the market or in the categories. So we look at what's our share to what's competition basically. And here we have also seen great traction and stolen, you can say, eyeballs and market share from a marketing perspective in the last quarter.
Okay. Thank you, Christian. Nikolaj, anything to add? Or shall I go to the last one?
No, I think you can go directly to the last one, Kristian.
So in the strategy, Benjamin, we outlined that we have like this first get back to black and then create robustness and then kind of start to scale. And I think even though we have now made 2 quarters with the growth, 1 quarter with positive EBIT and cash flow, it's too early to kind of, I think, change to this robustness or scaling phase. So I think we want to put third quarter and fourth quarter and the full year, where we really feel that we have fixed the basics that still remains to be fixed. I think we have made a lot of progress in many, many areas, but there's also a lot of things that we still want to do before we really start to scale it and accelerate it.And I think as well, what we see in the strategy together with the current partners, together with the current footprint, that it is still possible to grow that quite significantly. And the products that we have and have announced new ones are doing very, very well. So I don't think there's an immediate kind of need either to do that in order to find the opportunities in the market. So a few more quarters in the back to black for sure, and then we'll -- and we are constantly asking ourselves the same questions. So make no mistake about it. But I think this is not the time. It's going to be a while before we get there. Hope that answers your question, Benjamin?
Maybe I can just add, Benjamin, that we are also stating clearly that we don't expect our cash flow in the second half of the year to be significant.
Our next question comes from Poul Jessen from Danske Bank.
I have a few follow-up questions. In China, you say that you had a management change. So just wondering if you also are planning any strategic or structural changes out there or if they are underway or if it's only the management that you've changed? Then on the brand partnership you said, I think, when you gave the guidance for the full year that included expectations of additional partnerships to be signed this year. Is that still the case? On own and operated stores, should we expect you planning to take over more stores in the future? And then finally, you mentioned that products launched in the last 12 months is 1/3 of revenue. How has that been in the past? Is it increasing? Or is it more or less stable? No, the final one is you also had in the prospectus that the LG partnership should be -- or is expiring in the spring. Has that been extended or should we just see that as a normal procedure that it will be extended?
Thanks, Poul. All very good questions. So maybe I'll start and then pass on to Nikolaj when it comes to the revenue from new products. And I will cover the LG questions before that as well. But on China, and on South Korea, we feel we have a lot of opportunity, and we haven't been able to grow and accelerate that growth to the extent that we wanted to do. So therefore we have changed the management there and we're bringing in additional resources on the commercial side, on the marketing side, on product management side and on the sign side. We still maintain the same strategy in China. So there's nothing different from that perspective. We also -- we will do pretty much what we have done, like I said in my webcast as well, the same things that we have done in Europe to strengthen with country managers and strengthen with account management that is knowledgeable from consumer electronics and from these local markets.So there is more resources going in there. At the same time, we have also kind of cleaned up a little bit in the regions because our operating structure was a bit different than our regional structure. So now we have 3 clear regions. So we have formed the Asia Pacific region, and that's now headed up by [ Anor ]. He should -- previously was doing omnichannel and comes from within the company. Then he previously had Eastern Europe, and he had had emerging markets as his responsibility in Japan. So in order to serve these -- China, and Shanghai to start with better, he has moved and relocated to Shanghai. And we are building up our regional hub in Shanghai to serve the Chinese market and the region in a better way and then by putting more resources in there and to accelerate the growth.At the same time, we have taken the omnichannel organization that [ Anor ] was heading up in Europe's predominantly and integrated that into our European organization and formed an EMEA organization. And the reason for doing that is to have more execution power and execute faster on the whole retail experience and retail rollout and retail activities that we have planned for. So [indiscernible] now has been heading up the 6 European markets is also now heading up EMEA and all these resources are reporting in to him. And we have also made an Americas organization and a regional Americas organization before Latin America was reporting into [ Anor ] in Copenhagen. And now Latin America is reporting into Rick. So we have 3 distinctive kind of classical regions, AMR, Americas; EMEA, Europe, Middle East and Africa; and then Asia Pacific, with 3 leaders who are now going to scale that business and serve the customers locally in a better way. The country focus still remains the same, but we are not changing anything in terms of China, Korea is the main focus that we were going to resource it first and continue to accelerate digital there, continue to build monobrand stores and, of course, continue with the eCom with Tmall and JD.com, but also integrate the Chinese organization and the Asia organization more together with activities that we've been doing and executing in Europe and [ Anor ] will be really, really good for making sure that we get that same progress in China and in Asia.On your second question, we have signed more partnerships in brand partnering, but we -- because many of them are long-term partnerships, we are not allowed to announce them until they are announced. So I can't give you any more comment on that, but we have made progress here. And I think this is an area where we will, in due time, announce those partnerships, but we're doing well there.On COCO stores, and we -- I think we are served well by having partners and are engaging more with our monobrand partners. So that's why also we did this quite extensive survey with 150 monobrand partners to see on how we even get closer to them, work better together, capture more opportunities. I think we have an amazing partnership network that we will continue to work with. What we are missing in some places, and that is on our agenda now, is to build a few experience centers where we can really demonstrate the whole B&O experience. And we want to, of course, have 1 in Asia, Shanghai, we want to have 1 in Copenhagen, and we want to have 1 in the Americas to start with. So that's on the agenda in terms of next steps in retail. And then we will also see when we announce more products that there will be different retail execution, more on the product-by-product side than complete revamping of stores because I think we have already a lot of good things happening in retail. So that's on how we're going to proceed with that.And with LG, we also have a very, very good partnership and a good dialogue. And I expect these agreements, like the other agreements that we have running, to continue to be extended as normally basically. So no change in those partnerships. We have a fantastic partnership with HP that we expect to roll on with and extend and with HARMAN and LG as well. So that is more business as usual. And Nikolaj then to the revenue from new product question that Poul also had?
Yes. So Poul, I actually didn't quite catch the details in your question. And Martin and I was sitting here discussing what you actually were asking about. So can you repeat, please?
Sure. The question I think that you write in the report that 1/3 of revenue is generated by products launched the last 12 months. And the question is then, is the 1/3 is that stable, up or down versus previous years -- previous quarters?
I'm not able to make that recognization sort of in my head back. I think what we can say is that normally, we say that that approximate 1/4 of our revenue here in Q2 is coming from products launched in the last 12 months, right? So -- and I think that is a figure that we see sort of quite stable on average over the coming time as well.
[Operator Instructions] Our next question comes from Neils-Leth from Carnegie.
I have a few follow-up questions as well. Talking about your order backlog, I know it's a difficult thing to talk about in a company like yours, but can you give an estimate of the value of orders waiting to be delivered to end users among your B&O stores? And to what extent this is much higher than normal? Or where are we at this point? And secondly, could you also give us an update on the status of the component shortages? To what extent is it getting better or worse as we speak?
So thank you, Niels. I could give you the precise number, but I will not. But I can say this much that it's significantly higher than we normally would have on the order backlog. And we have quite a lot of orders that are waiting to be processed. But I will not disclose the number, but it's significantly better than normally would be and has been historically as well. And on the component side, there is, like I said, a lot of work going on to meet the demand for the products and so far we have secured components to meet our plans that we have. And to meet the guidance that we have given and outlook we have given. So we are managing it but it also changes and corona and COVID is difficult to predict. But so far, we are managing, which I think is the most important thing and our procurement team is doing a good job and our production partners and our supply planning team and logistics team are doing an amazing job as well to get the products to the consumers. So it's not without challenges, but we have managed and managed well, and I think we will continue to do that. Nikolaj, you want to add anything?
No, I think maybe just to add, Niels, that we normally don't operate with backlogs in our line of business. So this is a very much sort of consumer-driven. And we want to be in a position where we sell-in to our partners when they sell-out to their consumers. So we have that link. So just the fact that we have a small backlog at the moment is significant. But it's a relative term as we don't have a backlog normally.
There appears to be no further questions. So I will hand back to the speakers for any of their remarks.
Yes. So thank you, everybody, for joining the call today, and for all the questions that we have received. And I think we are proud about what we have achieved and what the organization has achieved and what all the employees are doing despite the difficult corona times, and we are managing the business in a good way. So I wish you all a great day, and thank you for joining.
Thank you. This now concludes our conference call. Thank you for joining. You may now disconnect your lines.