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Statement of financial position 2010: Sennheiser achieves record turnover

Wedemark, Germany — June 23, 2011 – Sennheiser electronic GmbH & Co. KG published its financial statement for the business year 2010, reporting an increased turnover of 468.2 million Euros, compared to 389.9 million Euros last year. This corresponds to an increase of 20.1 percent and is the largest turnover in the company’s history. Profit increased from 3.8 million Euros (in 2009) to 22.6 million Euros.

“All product groups and all markets have contributed to this positive result,” said Volker Bartels, Spokesperson of Sennheiser’s Executive Management Board. “One of the important factors that contributed to this result was the revival of the professional side of our business and the highly positive growth at the end of the year, particularly in the consumer segment. Now we have to stabilize this dynamic growth and further expand our business.? On average in the year 2010, the Sennheiser Group employed 2,117 people, 1,153 of them in Germany.

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Consumer business remains the product sector with the highest turnover
The largest part of the company’s turnover came from headphone sales, which contributed 34.9 percent of total turnover. Following this was wireless microphone sales (25.5 percent), then Sennheiser communications products (8.1 percent) and then wired microphones (7.4 percent). Audiology products made up 6.6 percent of the total turnover and professional headsets made up 4.5 percent. Georg Neumann GmbH contributed 3.6 percent of the total turnover with studio microphones and studio monitors. The conference and information systems sector contributed 3.3 percent.

Despite a global shortage of electronic components, Sennheiser was able to increase production in 2010, thereby overcoming the immediate effects of the global economic and financial crisis.

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Strong gains in Asia, the Americas and Central Europe
Thanks to market growth, Sennheiser managed to reach double-digit figures for its growth rate in all sales regions in 2010. In particular, Asia influenced growth in the elecronics industry. In the the “Asia and Australia” region, turnover increased from 44 million Euros in 2009 to 59.7 million in 2010, an increase of 35.6 percent. “This positive development shows us that using our own sales subsidiaries on the ground was the right strategic decision,” affirmed Volker Bartels. The audio specialist also grew in the Americas. Turnover increased massively by 26.5 percent compared to last year up to a total of 125.6 million Euros. There was a notecibly reversed trend in the “EMEA” region. In this previously decreasing market (-2.8 percent in 2009), Sennheiser achieved an increase of 14.7 percent. In the sub-regional breakdown, Central Europe contributed excellent growth of 17.9 percent. Generally speaking, sales outside Germany continues to be extremely important for Sennheiser. In 2010, the company’s export ratio was about 83 percent.

Sennheiser consolidates its position as market leader for headphones
Sennheiser has maintained its position at the top of the headphone market in Europe. According to the latest results from GfK Retail and Technology, Sennheiser is the clear market leader within the EU-16 and stabilized its value-based share of the market of 23 percent last year. The customer-oriented product portfolio, which includes many new models, played an important role in this growth. Another very positive point was the successful cooperation between Sennheiser and the sports manufacturer Adidas in 2010. One of the co-developed sports headphone models, the CX 680, won the CES Innovations Award at the Las Vegas Consumer Electronics Show. In addition, Sennheiser reinforced its premium brand position in the consumer segment with “first class” models such as the CXC 700, an ear-canal headphone with Sennheiser’s innovative digital NoiseGard technology.

Professional business recovers
In the professional audio arena, Sennheiser experienced increased demand from theatre and live sound following the resolution of several frequency regulation issues. As a result, companies re-invested in high-frequency devices, significantly boosting Sennheiser’s overall business in this sector. The new high-end wireless products for professional users, such as the SKM 5200-II handheld transmitter, the SK 5212-II pocket transmitter and the family of EM 3732-II receivers with higher frequency flexibility for flawless wireless transmission acheived positive sales results. The product range in the Installed Sound sector was also successfully expanded; at the InfoComm show in Las Vegas in 2010, Sennheiser introduced the ADN Discussion System, an innovative, premium product for the conference market that delivers Sennheiser-quality sound.

Investment in innovation
Research and Development (R&D) is a central component of Sennheiser’s business strategy. Spending on R&D in 2010 was 6.1 percent of turnover – i.e. 28.6 million Euros. To recognize future trends and opportunities, Sennheiser runs a company-owned research facility: the Sennheiser Innovation AG in Zurich, Switzerland. Here, Sennheiser analyzes future trends that may have an impact on Sennheiser’s business and on the audio specialist’s product development. “We need to be able to react quickly to changes in the market,? Bartels said. “This is why we focus on consumer needs in the long-term and try to recognize important developments as soon as possible.”

Goals for 2011: increase market share, secure manufacturing locations
For Sennheiser and its employees, 2011 will be focused on implementing the new company structure. Since the first of January, Sennheiser has been organized into three business divisions, helping provide greater market and customer focus in each respective business area. “We have developed a divisional strategy over the last few years and this is now also being reflected in our organizational structure,? Bartels said. “The company’s new divisional organization will allow us to perfectly adapt our products, services, processes and especially our way of thinking to our customer’s needs. This is another reason why we look at the future with optimism.?

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