Sennheiser Group, family-owned for three generations, published its results for the 2013 fiscal year today. The company has always been known for its long-term oriented strategy based on sustainable growth and independence. Its figures for 2013 show revenue remained roughly constant while return on sales was a middling single-digit figure. Sennheiser Group's profit last year was 14.3 million euros, a significant decline as against the two previous years. As a family-owned business, we pursue a strategically oriented business policy. This means there may be some years in which we will accept a lesser profit in order to be more successful in the long run. 2013 was another year in which the company invested substantially in research and development as well as in expanding its worldwide sales network. Staff headcount grew by 9.1 percent to a total of 2,542.Exchange rate fluctuations proved a burden in the past year. In 2013, the euro appreciated by more than three percent against the dollar year on year, says CEO Andreas Sennheiser. We still raised our export ratio to more than 85 percent, which is to say the world values quality and design made by Sennheiser, and is accepted that these come at a price.
Stable growth in all regions: market leader in Europe in 2013, continued strong growth in Asia-Pacific
Sennheiser Group sales grew 1 percent to 590.5 million euros in 2013, which is equivalent to an exchange-rated adjusted figure of 606.9 or a growth rate of 3.9 percent. Asia-Pacific recorded the strongest advance as revenues increased by 6.6 percent, topping 100 million for the first time (100.3, 2013: 95.0). North and South America remained essentially unchanged at 147.1 million (2013: 146.5), while Europe confirmed its status as the group's largest region by sales with constant revenues of 342.1 (2013: 342.9) million euros. Sennheiser is responding to expanding business in Asia-Pacific as reported here and is investing in its sales network. In 2013, this included the opening of sales offices in Australia and New Zealand.
A breakdown of sales figures by business divisions shows a solid increase in Consumer Electronics, where sales grew more than four percent to 300.5 million euros as Sennheiser continued to hold its own thanks to its clear focus and first-class audio quality, technological competence and excellent customer service in an environment otherwise marked by an increasing number of competitors. Consumer products accounted for more than half of Sennheiser Group's revenue in 2013. The Integrated Systems Division reported substantial growth of two percent to a total of 92.7 million euros, while the Professional Systems Division contributed 197.2 million euros or 33 percent to the Group's total revenues. The Group, in other words, continues to enjoy a well-balanced business.
Investment in innovations and in talent
Sennheiser is also expanding its research and development activities. Expenditures in this area amounted to 40.6 million euros, up by 2.1 million, while headcount in R&D rose by almost 12 percent to 323. More than one in eight of our staff works in R&D today, says CEO Daniel Sennheiser. This is evidence of our sustained approach to innovation. As an average across the fiscal year, Sennheiser Group headcount rose by 9.1 percent to 2,542, 1,303 of which (51 percent) are based in Germany and 1,239 (49 percent) abroad.
This year, Sennheiser will be inaugurating its Innovation Campus, an innovation and development center at the company's headquarters in Wedemark in northern Germany. The Campus will offer opportunities for wholly new forms of cooperation. The Innovation Campus embodies our commitment to our long-term oriented strategy based on sustainable growth and independence, says Andreas Sennheiser, CEO, and of course, this is also a commitment to this location and its focus on innovation with the customer in mind.
Emphasis on sustainability
Sennheiser has a crucial step forward in protecting global resources and joined the Phonebloks alliance. Phonebloks is committed to developing a modular smartphone with components that can be individually interchanged. This will extend the working life of the overall system and it will protect the world's resources, says Daniel Sennheiser, CEO. Sennheiser has begun developing audio modules for this new system. We can imagine these including wind-resistant microphones, which could turn this smartphone into a tool for journalists on the move. Another option might be opening up our new streaming technology to the Phonebloks project. In any event, we will make sure that the sustainable smartphone of the future will feature perfect sound.
Streaming technology facilitates inclusion
Another focus area this year will be the launch of Sennheiser's new streaming technology mentioned earlier, which will enable individuals to enjoy art offerings regardless of language or hearing or seeing ability. The application easily integrates into existing systems. It runs as an app and provides acoustic support and audio description in real time via the user's smartphone, making it easy to operate for the user. Sennheiser has founded a new company dedicated to developing this and other innovative streaming solutions: Sennheiser Streaming Technologies (SST).
2014 outlook: emphasis on securing sustainable growth
Sennheiser as a family-owned company has a long-term strategic focus, and that is the creation of groundbreaking audio products and exceptional sound experiences for the user. Our vision is to actively shape the future of audio, and this builds on a company history that stretches back almost 70 years, a marked innovation culture and a passion for excellence.
Andreas and Daniel Sennheiser are confident about the future of their company: We are very well positioned to continue to create value
