Bang & Olufsen Annual Report 2002/03

Bang & Olufsen Headlines Pretax profit of DKK 290 million Strong cash flow of DKK 296 million Disappointing turnover development -6% The Group’s relative and absolute profitability has improved

Bang & Olufsen Net turnover UK is now the Group’s largest market with a turnover of DKK 582 million. Growth in local currency of 10%. Turnover growth in Italy, Spain/Portugal, Denmark, Belgium and Expansion Markets. Central Europe disappointed. Turnover declines in: Germany: 16%. Holland: 21%. Switzerland: DKK 19 million. US - turnover decline of DKK 66 million (DKK 50 million due to exchange rate). Decline in local currency of 4%. -

Bang & Olufsen Net turnover/Operating profit by segment 2001/ /03

Bang & Olufsen Operating profit The Group’s profitability has improved: Gross margin increased by 3,6%. Development activities and marketing continues with undiminished strength. Trading loss of DKK 73 million in the US. -

Bang & Olufsen Result from ordinary operations before tax Positive development in the financial items due to the Group’s improved cash flow and lower currency adjustments.

Bang & Olufsen Result for the year The tax expense for the year was DKK 97 million corresponding to a tax percentage at 33,6%. The Group continues not to capitalise deferred tax relating to the US market.

Bang & Olufsen Total assets Liquid funds increased by DKK 281 million to DKK 445 million. Inventories reduced by DKK 123 million. Receivables reduced by DKK 57 million.

Bang & Olufsen Cash flow The strongest cash flow for 5 years. No new loans during the year. Re-payment of loans amounted to DKK 59 million.

Bang & Olufsen Turnover (A/V)

Bang & Olufsen Turnover per market 2002/03 (A/V)

Bang & Olufsen Growth rate per market 2002/03 - local currency (A/V)

Bang & Olufsen Shops world-wide 1998/ /03 (A/V)

Bang & Olufsen Number of B1 shops per market (A/V)

Bang & Olufsen Turnover share of B1 shops in 2002/03 (A/V)

Bang & Olufsen Development in the B1 shop segment Overall growth of 1% in mature shops (A/V)

New products BeoVision 5 US BeoSound 3200 BeoLab 5 Bang & Olufsen AudioVisual a/s

New products BeoCom 4 EarSet 1 Bang & Olufsen AudioVisual a/s

Bang & Olufsen Medicom a/s Turnover and result from ordinary operations before tax

Bang & Olufsen ICEpower a/s Turnover and result from ordinary operations before tax

Bang & Olufsen Product launches 2003/04 BeoLab 5 - high end loudspeaker BeoCenter 2 - audio/video center BeoVision ” LCD-TV - flat-screen TV High reproduction, compact loudspeaker Technological and design updates 2003/04 MX 4200, 21” BeoVision 3, 28” BeoCom 1 EarSet 1 Mobile

Bang & Olufsen Expectations and actions Very moderate growth in turnover A pretax result in the range of DKK million Intensified product development Maintained marketing pressure Dividend increase from DKK 3,50 to 7,00 per nominal share of DKK 10 Share buy back and subsequent cancellation