Operator: At this time, I would like to welcome everyone to Bang & Olufsen Interim Report Second Quarter 2025-'26. [Operator Instructions] This call is being recorded. I would now like to introduce CFO and Interim CEO, Nikolaj Wendelboe. Nikolaj, you may now begin.

Nikolaj Wendelboe: 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. And with that, I will hand it over to Juha.

Juha Christensen: Thank you, Nikolaj, and 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. And 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 midterm financial ambitions for the 3-year period spanning the '25-'26 to '27-'28 financial years. We're now 6 months into our 3-year midterm 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, Lundby 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.

Nikolaj Wendelboe: 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 6 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 the 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 continued its increasing trajectory, resulting in EBIT before special items of minus 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 earpieces Beo Grace, the Beosound Premiere soundbar and our Reloved program. We also opened a flagship store in Paris in December, and we opened the first of 3 stores in California. And lastly, we were very busy with our 100-year anniversary, which we marked across the globe, a significant milestone, reflecting our rich heritage and 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 3 product innovations in the quarter. With our Beo Grace earpieces 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 a wireless earphone, leveraging our competencies for functional and beautiful and aluminium design. As with our H100 headphone, the ear pieces are built on our proprietary Amadeus software platform, which ensures full flexibility in the development of features. The combination of design, craftsmanship and acoustic excellence underlines what B&O product stands 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 stage category alongside Beosound Theater and BeoVision Harmony. Beosound Premiere differentiates from the market in the combination of innovation, 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 aluminum 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 are taking yet another important step towards extending the life of our products. Through this initiative, we offer select refurbished products with Bang & Olufsen's warranty and official certification through multiproduct drops on our e-com. The launch has been successful with 3 out of 5 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's warranty and official certification. All 3 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 continue 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 2 new stores, carried out 2 strategic relocations, 8 store uplifts and 8 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 remain unchanged as one store, our company-owned stores in des Archives was closed during the quarter. We opened 2 pop-up stores, 1 in Oslo and 1 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 3 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 '25, '26. Finally, the APAC region. 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. And I'll begin with our sell-out, our like-for-like sell-out, which 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 eTail channel increased driven by sell-out growth from China, where we operate our own unlike 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 DKK 667 million (sic) [ DKK 676 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 a timing effect in our automotive licensing revenue and license revenue from HP declined as expected and was offset by increased revenue from TCL. And 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 are seeing positive developments in the margin across regions. In EMEA, revenue was DKK 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 multi-brand and eTail 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 DKK 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 eTail. 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 ventures 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 states category performing well. For the APAC region, reported revenue was DKK 185 million, an increase 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 our company-owned and monobrand stores. The gross margin increased from 47.4% to 59.7%. This was a result of a 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 the 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 minus 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 cost related to our centennial campaigns and celebrations. Excluding these extraordinary costs, EBIT before special items was around 0. Capacity costs increased by DKK 67 million, of which DKK 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 DKK 5 million, and the ratio of incurred development costs 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 DKK 27 million during the quarter to DKK 289 million. Trade receivables increased by DKK 117 million and trade payables increased by DKK 103 million. Inventories increased by DKK 13 million to DKK 487 million. The inventory level is expected to decline during the second half of the year. The free cash flow was negative DKK 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 DKK 74 million for the quarter, an increase of DKK 20 million compared to Q2 last year. Capital resources were DKK 267 million compared to DKK 319 million at the end of Q2 last year. Out of the DKK 267 million in capital resources, available liquidity accounts for DKK 117 million compared to DKK 159 million in Q2 last year. And then moving to the outlook for the financial year '25-'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 minus 3% to plus 1%. Free cash flow is now expected to be in the range of minus DKK 100 million to minus DKK 50 million, narrowed from minus DKK 100 million to DKK 0 million. 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. And now we will turn into the Q&A session.

Operator: [Operator Instructions] And our first question will be from the line of Poul Jessen from Danske Bank.

Poul Jessen: 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 competencies within these areas after the long transition? That's question number one.

Juha Christensen: And let me address this. So 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. And the CEO transition is not at all about changing direction. It's about accelerating the direction and execution where we already are. And so there's, of course, 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.

Poul Jessen: 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?

Juha Christensen: Bang & Olufsen is multiple things. We are a product company. We are a retailer, and we're also very heavily involved in customer installations. The ideal candidate should, of course, be an expert at all 3. It's unlikely that such a person exists out in the world. So 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.

Poul Jessen: Okay. And what timing should we look for? Should we expect that someone is in place by late year? And then I think calendar year?

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

Poul Jessen: Okay. Then one operational...

Juha Christensen: 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 road map 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. And we know we are probably a bit behind the curve on marketing, but we are making good progress with our interim situation right now to create a strong demand generation engine as well. So the company overall is in very good hands under Nikolaj and the global leadership team to execute thoroughly. So in between CEOs, we're looking at accelerating, not trading water.

Poul Jessen: Okay. And 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 [indiscernible] looking forward. How are you looking at this now? Would you like to have much more resources? Or is it just -- if you have the resources?

Nikolaj Wendelboe: 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. And I think what -- 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. And 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. And we were quite successful with that on the Harrods takeover. And of course, we are taking learnings from that particular campaign. But 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 a longer time to measure because there's also eTail, of course, from an event like or a takeover like that until you have the full impact. But this is the direction we are going, driving more footfall through marketing, but also making sure that we spend our money on where it makes the most sense.

Operator: [Operator Instructions] And our next question is from Niels Leth from DNB Carnegie.

Niels Granholm-Leth: First question on the gross margin progression in Americas. So could we extrapolate on the very nice gross margin improvement that you made here in quarter 2? Is this sustainable for the coming quarters as well? Second question on your sell-out, which has been quite a bit higher than your sales growth in local currency for the past 4 quarters. Perhaps you could just firstly remind us how you calculate your sell-out growth. So which channels are included in your sell-out growth? And secondly, would the fact that sell-out growth has been so much higher than the sales growth and low currency, would that suggest that inventories are at a very low point? And my third question would be on special items for this fiscal year. So how much in special items should we build into our models?

Nikolaj Wendelboe: Thanks, Niels. First, on the gross margin in the U.S., there are several factors that are leading to this significant increase in the gross margin. And I can actually say one thing, we will not see that kind of increase quarter-over-quarter and year-over-year. That's for sure. But 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 a very expensive products, BeoLab 90s to the California stores as part of some special additions we have created for that market. And that has a 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 eTail channel, for instance, doing Black Friday than what we have done this year. So as part of our transition away from price performance in consumer electronics towards taking the luxury order position, we are also expecting our gross margin to increase in the U.S. to a level that is more on par with the rest of the world. With the caveat that in the U.S., you have tariffs. And in the U.S., you also have a higher landed cost on your products. So it will be difficult for them to get to the same level as EMEA and APAC. But 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%. And 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 were asking. So like-for-like sell-out is a measure of same-store sell-out. So it has to be on stores where we have been opened this quarter, but then also had -- also opened in Q2 of last year. So 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 eTail, with the big changes that we've done in that retail network, the like-for-like numbers are based on fewer stores, of course. So 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. And 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 we'll bore you with at this call. But 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're measuring. So that gives some small differences. But the large difference is related to inventories. And secondly, the fact that the like-for-like stores that are new versus the like-for-like stores that we took out last year are 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. And of course, some provisions can be expected also at the end when we are reporting our Q3 numbers. I think if you want to get a feel for it, I would encourage you to reach our remuneration policy and then you will get like a good sentiment of what that could lead to.

Niels Granholm-Leth: 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%. So how much does the branded sell-out growth? How much does that represent of your total product sales?

Nikolaj Wendelboe: Well, from a revenue perspective, it represents approximately -- if you take off product sales, it's around 60% of product sales, it represents.

Operator: And our next question is a question from Poul Jessen from Danske Bank.

Poul Jessen: My question is, I don't know if you want to comment it by now because it's a little [ over ] the 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 2 product launches you have had?

Nikolaj Wendelboe: Yes. Well, we have some great openings of the 2 stores. I'm not going to comment in detail on the performance of the stores. San Francisco opened in December. So the data there is also limited. But of course, in general, the openings of 3 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 des Archives in Paris and of course, our continuous doing business with the clients that we have there. So it's impacting our numbers positively. I think more importantly, we had the launches of Beo Grace and Beosound Premiere. Both of these launches came late in the quarter. So the impact this quarter from both the sell-in and the sell-out perspective is limited. And as we are ramping up to full capacity on the production lines, this will have a positive impact also in the second half of the year. So we have high hopes for these 2 products. And when we get to our Q3 reporting, we, of course, say more about how they were performing.

Poul Jessen: All right. And just to understand about the U.S. gross margin, you said it was supported by sell-in of high-end products to the San Francisco store. And therefore, we should not expect to continue. But what about LA and Palo Alto that must then be supporting the Q3, Q4, the U.S. performance?

Nikolaj Wendelboe: These stores will definitely support Q3, Q4 performance in the U.S. 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. So that's why it's a little bit higher than it would normally be from a sell-in to a new store.

Poul Jessen: Okay. And then about your liquidity. I can see that your credit facility has been reduced from DKK 250 million to DKK 150 million. Is that because you don't think that you need it anymore? Or is it -- are there any other reasons why it's been reduced?

Nikolaj Wendelboe: No. So just -- okay, so 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. So when we talk about available credit facility, we, of course, deduct the part that hasn't been utilized yet. But it remains the same, but we have utilized it over the end of the quarter, basically as part of daily cash management efforts. And nothing out of the ordinary on that.

Poul Jessen: Okay. And 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?

Nikolaj Wendelboe: Yes. But I mean, the channel inventory is always fluctuating because in different quarters, you have different seasonality on channel inventory. Typically, it goes up in Q1. And then in Q2, we've seen that for many quarters in Q2, you're reducing your channel inventory because you have higher sell-out due to high season and the same goes for December. And then you typically also see some channel inventory building in connecting with product launches, et cetera, et cetera. Generally speaking, I mean we are satisfied with the inventory level that we have in the 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 a role. We only have a few places in the world where we think channel inventory is too high, one specific country in Asia, in Korea, whereas in the rest of the world, the channel inventory is quite satisfactory.

Operator: As we have no further questions in the queue, I will hand it back to the speakers for any closing remarks.

Nikolaj Wendelboe: Thank you, everyone, for your interest in Bang & Olufsen and for joining today and for your questions. And 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.