Press

01.07.2008 - Wedemark

Sennheiser balance sheet 2007: another record result for the audio specialist

With sales up by 10.9 percent, audio specialist Sennheiser has presented a positive balance for fiscal year 2007 and has once again achieved a record result. Total sales at the Sennheiser Group amounted to € 395.3 million. With this result, Sennheiser electronic GmbH & Co. KG is continuing the successful series of results of recent years. Among the Sennheiser product segments, the top position was held by the headphones segment, with total sales up by 19.7 percent to
€ 111.7 million.

“We are very pleased to have completed fiscal year 2007 once again with two-digit growth,” said Volker Bartels, Speaker for the Executive Team and President, Manufacturing and Logistics, at the balance sheet press conference. Sennheiser Group sales increased by 10.9 percent compared to 2006 to a total of € 395.3 million. In the same period, earnings rose by 19.8 percent from € 16.9 million to € 20.2 million. “All Sennheiser markets worldwide have developed positively. In particular, the systematic expansion of our international sales network and the opening up of further markets have contributed to the good annual result,” Bartels continued. The positive development was also reflected in the growing workforce: in 2007, the number of employees rose by 6.7 percent to an average of 1,976 employees worldwide. Of these, 1,099 work in Germany.

Increased sales in all product segments
All segments of the Sennheiser Group contributed to the successful annual result. The front-runner was the headphones segment, which saw a 19.7 percent increase in sales. With total sales of € 111.7 million, this product segment accounted for the largest share (28.3 percent) of Sennheiser Group sales. “This excellent result was positively influenced by continued growth in the consumer electronics sector and the worldwide market development in mobile music,” Bartels explained. “The wireless technology product segment also recorded continuous growth rates.” As the second-strongest segment, with sales of € 102.9 million, wireless microphones achieved an increase of 9.2 percent compared to the previous year.

The next-largest percentage of total sales was achieved by wired microphones, with sales of € 37.5 million, followed by conference technology (€ 27.6 million), audiology (€ 25.0 million) and aviation
(€ 8.7 million). Sennheiser Group sales in the segment of telecommunications products generated by the Sennheiser Communications joint venture rose by an impressive 22.4 percent to
€ 26.3 miilion. The product segments of Georg Neumann and Klein + Hummel contributed sales of € 17.6 million and € 2.7 million respectively to the overall result of the Sennheiser Group.

Sennheiser markets: outstanding results worldwide
All Sennheiser markets worldwide succeeded in recording positive results. In spite of the weak dollar, the region of America increased sales by 2.0 percent to € 104.5 million, thus remaining Sennheiser’s strongest region overall. After adjustment for currency effects, this even represented an increase of 10.3 percent. The leading growth market was once again the region of Northern and Eastern Europe, which recorded a 26.0 percent rise in sales amounting to € 79.8 million. The region benefited from the expansion of Sennheiser sales structures in the Scandinavian area and in Russia. The region of Western and Southern Europe and Africa also enjoyed above-average growth of 11.5 percent, recording sales of € 95.6 million at the end of the year. In Central Europe, sales went up by 6.8 percent to a total of € 77.7 million last year. This was followed by the region of Asia and Australia with € 37.8 million, equivalent to a rise of 16.8 percent. Overall, 83.3 percent of total sales were generated outside Germany. In 2007, the worldwide sales network was expanded by the addition of the subsidiary Sennheiser Electronics India Pvt. Ltd. 2008 saw the opening of Sennheiser Japan K.K., and a sales subsidiary was founded in China at the end of March.

Production and Logistics
Output from the Sennheiser production sites amounted to € 150.4 million, up by 2.2 percent over the previous year. Further improvements in materials management and the supply chain ensured even higher profitabililty at the plants in Germany, Ireland and the USA. “We were also able to implement activities in the field of ‘lean manufacturing’ at all production locations. At the German sites of Wennebostel and Burgdorf in particular, major success was achieved by our programme to improve efficiency and flexibility,” Bartels reported. In the field of quality assurance, Sennheiser introduced a new data acquisition and analysis system aimed at further improving the high quality standard that is one of Sennheiser’s key success factors. The subsidiary Sennheiser Logistics Services GmbH was founded in 2007 with the objective of optimising and streamlining logistical processes. The Research and Development division was further expanded, with the number of employees rising from 173 in 2006 to 206 developers in 2007. Further new jobs in the fields of research & development as well as engineering are also planned for the coming year. Overall, expenditure on research and development in 2007 amounted to € 24.9 million, equivalent to 6.3 percent of total sales.

Good prospects for 2008
The first six months of 2008 have also been positive for Sennheiser. “We are expecting further growth from expansion in the Asian market, in particular due to the foundation of our subsidiaries in Japan and China,” said Bartels. At the same time, Sennheiser sees further development potential in Europe. And the company is equally positive about its future at the Sennheiser headquarters in Wennebostel. “We plan to consolidate our production capacities at the site by building a new manufacturing and technology centre in the second half of 2008,” Bartels continued. The Burgdorf site will then be integrated into the manufacturing facilities in Wennebostel in 2009, thus further improving efficiency due to shorter transport and information distances. What is more, the close proximity to the development facilities will bring significant advantages in ramping up production of new products.

The Sennheiser Group, with its headquarters in Wedemark near Hanover, Germany, is one of the world’s leading manufacturers of microphones, headphones and wireless transmission systems. The family-owned company, which was established in 1945, recorded sales of over € 395 million in 2007, 83% of which were generated abroad. Sennheiser employs almost 2,000 people worldwide, around 55% of whom are in Germany. Sennheiser has manufacturing plants in Germany, Ireland and the USA and is represented worldwide by subsidiaries in France, Great Britain, Belgium, the Netherlands, Germany, Denmark (Nordic), Russia, Hong Kong, India, Singapore, Japan, China, Canada, Mexico and the USA, as well as by long-term trading partners in many other countries. Also part of the Sennheiser Group are Georg Neumann GmbH, Berlin (studio microphones), K + H Vertriebs- und Entwicklungsgesellschaft mbH (Klein + Hummel studio monitors, installed sound) and the joint venture Sennheiser Communications A/S (headsets for PCs, offices and call centres).

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Sennheiser electronic GmbH & Co.  KG
Press officer • Edelgard Marquardt
Am Labor 1 • 30900 Wedemark
Tel:  +49 (5130) 600-329
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E-mail:  edelgard.marquardt@sennheiser.com