Bang & Olufsen a/s : CSR & Sustainability report

CSR & SUSTAINABILITY

REPORT 2020/21

Bang & Olufsen A/S, Bang & Olufsen Allé 1, DK-7600 Struer, Tel. [phone], www.bang-olufsen.com,Reg. number: 41257911

OVERVIEW

CSR & SUSTAINABILITY REPORT 2020/21

ofTable Contents

Visit

Bang-olufsen.com

Corporate.bang-olufsen.com/en/csr

Be friends @bangolufsen #bangolufsen

About this report

This report provides a status on Bang & Olufsen's work on Sustainability for the 2020/21 financial year in compliance with the reporting requirements set out in sections 99a and b of the Danish Financial Statements Act. The intention is for the report to provide insight and understanding into the scope of Bang & Olufsen's sustainability work, and how these activities form an integral part of the company's day- to-day operations.

Beosound Emerge, designed to last through a modular design approach

Beosound Level, "exploded view" of the multiroom speaker that is built for a long lifetime as it is easy to upgrade and repair

OVERVIEW

About Bang & Olufsen	3
Letter from the CEO	4
Our business model	6
Risk assessment in Bang & Olufsen's
Value Chain	7
CSR & Sustainability Strategy	8

RESULTS

Environmental impact	11
Responsible employer	15
Role in society	19
Responsible partner	22
Overview of results 2020/21	24

OUTLOOK & GOVERNANCE

CSR & sustainability outlook 2021/22	25
Governance	26

2/27

CSR & SUSTAINABILITY REPORT 2020/21

Bang & Olufsen's core capabilities

Sound, design, and craftsmanship

AllBeautifuldeliverproductstheSoundmostare createdseamlesstoand powerful sound experience no matter the circumstances - natural, authentic and as the artist intended, regardless of size or shape.

Timeless

Innovation is the inspirationDesignthat drives form and expression and the end result is design that is performance-driven and magical.

Unrivalled

Only materialsCraftsmanshipof the highest quality are used. From pearl- blasted anodised aluminium, authentic leather, Scandinavian wood and the fabrics that cover the products.

3/27

OVERVIEW

CSR & SUSTAINABILITY REPORT 2020/21

theLongevityheart& Olufsenof Bangis at

Kristian Teär, President & CEO

Dear reader,

In 2020/21, Bang & Olufsen made significant progress as we completed the first phase of our turnaround and returned the company to profitability.

This was an important milestone, and we achieved it despite the pandemic impacting consumers, busi- nesses, and societies around the world. We owe our colleagues and partners our gratitude for their incredible efforts the past year.

In November, we celebrated our 95th anniversary and we can be proud of our long heritage. It underlines that we are a brand that has adapted to stay competitive based on our core capabilities of sound, design and craftsmanship with a firm focus on lon- gevity. At Bang & Olufsen, we have an unrivalled ability to innovate and stay at the forefront of audio and visual technology, and for almost a century our amazing employees and partners have helped shape how people hear, feel, and see the world.

We want to continue to improve our business and build products and experiences that bring long-term value not only to our customers, but also our em- ployees, society, and investors. By integrating sustainability more into our day-to-day operations, we want to strengthen our leading position on longevity in the consumer electronics industry and help fight technology obsolescence through innovation.

Building quality products with a long lifespan has always been at the core of Bang & Olufsen, and we see product longevity as a strategic lever for us to continue to succeed commercially.

This financial year, we introduced our first products with a new innovative and replaceable streaming module based on a modular approach to design. With this new feature, Bang & Olufsen speakers can be upgraded with new connectivity technology for many years. This will help ensure that the products can be adapted for future technological develop- ments, if needed.

It has been an eventful past 12 months as the pandemic impacted all of us. Our number one priority in 2020/21 has been to safeguard the health and safety of our employees, customers, and partners, while making sure that we could continue to operate our business and execute on our strategy. We will maintain that focus in 2021/22, but we are pleased to see that the COVID-19 virus appears to be coming under control in many countries around the world.

The pandemic impacted global supply and logistics systems throughout the year and meant that we were unable to achieve the desired progress on cutting greenhouse gas emissions from our own logistics systems. We also saw an increase in emissions from our own buildings, primarily due to higher- than-expected activity levels at our aluminum

4/27

OVERVIEW

CSR & SUSTAINABILITY REPORT 2020/21

factory in Struer. Our retail partners and employees were also impacted by the pandemic, and during the year, we had to find new ways of working together internally as well as engage with our partners and customers. Despite these challenges, we saw an increase in employee engagement this year. This makes me proud, and I believe that the past 12 months have strengthened us as a company.

During the pandemic, we have demonstrated our ability to adapt to many changes, and this has also shown us what we can achieve, when we all work together - across our own organisation, and with our partners. This is an important learning as we continue transforming our business and supporting the transition towards a more sustainable future.

Overall, we did not make the desired progress on our sustainability efforts the past year, achieving eight out of thirteen targets. In 2021/22, we will continue to execute on our strategy and begin our work to develop a new sustainability strategy with long- term KPIs to replace the current framework.

Kristian Teär

President & CEO

lifespan- Buildinghasqualityalwaysproductsbeen at thewithcorea longof Bang & Olufsen, and we see longevity as a strategic lever for us to continue to succeed commercially.

Beosound Level

5/27