Sennheiser divides business units, seeks investor for consumer division

Sennheiser is repositioning its business units, in a move that will see the company ramp up its pro audio activity internally and seek an investor to prop up its consumer electronics offering.

Sennheiser’s business is split into two divisions- professional and consumer – with the pro segment made up of three strands: pro audio, business comms and high-end microphone brand Neumann. It is these three arms of the business that Sennheiser will now look to develop, with an investment partner on the consumer side of the company freeing up vital resources.

“In all of these areas we see great potential for growth”, said Andreas Sennheiser, co-CEO of Sennheiser. “At the same time, they are characterised by different customer groups, customer requirements, product life cycles and market dynamics.”

“To be best able to exploit the potential in each of these markets, we are concentrating our own resources on the three business areas in the professional division and are looking for a strong partner to invest in our consumer business,” added Daniel Sennheiser, co-CEO of Sennheiser. 

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With talks set to begin shortly with potential partners on the consumer electronics side of the business, the firm is pledging to invest significantly on the pro side, specifically in its R&D and marketing efforts. This, the company said, will enable Sennheiser to grow at ‘an above average rate’.

“Whether in the studio, concert hall, conference room or auditorium, in the pro world, Sennheiser stands for a superior audio experience, the highest reliability and the best customer understanding,” Andreas Sennheiser added.

According to Daniel Sennheiser, the repositioning will deliver significant growth across all verticals.

“All business units are to emerge strengthened from the planned repositioning,” he said. “With a strong partner at our side to invest in our consumer business, we will be even better equipped to play to our strengths  – and to continue to bring the benefit of these strengths to our customers.”

Andreas Sennheiser added: “For over 75 years, Sennheiser has stood for excellent technology and unique audio experiences. In doing so, we always focus on the needs of our customers. And we will continue to do so in the future.”

Sennheiser’s repositioning of its business units and redistribution of resources follows last year’s announcement that it would be cutting 650 jobs by 2022 due to the COVID-19 pandemic. The staff cuts were revealed in July 2020 when its 2019 financial report was published.

The company’s financial results for the fiscal year 2019 showed that the firm generated turnover of €756.7 million, which is €46.0 million or 6.5 per cent more than in 2018, while EBIT of €18.5 million fell short of the previous year’s level of €21.2 million.

Its pro division generated turnover of €363.3 million, up 9.2 per cent on the previous year. This increase was driven predominantly by the product categories of live music, studio recording and business communication.

The consumer division generated turnover of €393.4 million. However, while turnover grew by 4.1 per cent, or €15.4 million, this was significantly below the growth of the headphone market as a whole. 

Though the company’s 2029 fiscal year results were described by the company as ‘mixed’, the pandemic dealt a major blow to turnover and earnings. Subsequently, it was confirmed that 650 jobs – around 300 in Germany – would be cut over the next 18 months. Key areas affected are Sennheiser’s corporate functions, such as supply chain and operations, according to the company.

Daniel Sennheiser said at the time: “We look back on a rather mixed fiscal year 2019. In addition, we face major challenges this year due to massive changes in the consumer market and the declining demand for audio products because of the COVID-19 crisis. In order to position the company for a successful future, we will adapt our organisational structure to the changing conditions and align it with the new requirements.“ 

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