The Sennheiser Group has filed a new financial report on its 2016 performance, revealing that the company’s profitability is up, despite a 3.8% dip in turnover.
Sennheiser generated a turnover of €658.4 million, corresponding to the 3.8% decline, which, it says, is “primarily due to placing greater focus on the core business”.
During the fiscal year, the audio specialist exited the aviation segment and also ended relationships with third-party brands in the Professional Systems Division. Furthermore, the termination of governmental subsidies in Japan had an impact on turnover.
Profit before taxes grew 15.2% to €34.9m, compared to the same period in the previous year. Research and development were bolstered, with Sennheiser investing €54.5 million - of 16% more than in 2015.
"Coming from a very strong year in 2015, we were unable to build on the previous turnover growth in the reporting year,” said Dr. Andreas Sennheiser, co-CEO of Sennheiser. “This was mainly due to placing strategic focus on core business in our Professional Systems Division."
"At the same time, in 2016 we did a lot of groundwork to ensure our future success by delivering even greater innovation and value to our customers," added co-CEO Daniel Sennheiser. “As a family-owned company, we focus on the long term and pursue a clear goal: shaping the future of audio.”
Despite the decrease in turnover, 2016 saw profit before taxes rise by €4.6m to €34.9m, which was mostly due to reduction in material, personnel and other operating expenses.
Meanwhile, €358.2m of the total sales of the Sennheiser Group were accounted for by the EMEA region, which showed a slight turnover growth of 0.3% year-on-year. In the Americas region, the group achieved €168.8m, 6.1% less than in 2015.
In the APAC region, turnover slipped 10.8% year-on-year to €131.4 million. This, said the company, is partly due to the Japanese government ceasing to subsidise wireless microphone systems at the end of the Q1. These subsidies had a positive effect on turnover in reporting year 2015.
Elsewhere, the Professional Systems Division also saw turnover take downturn, while the Consumer Electronics Division continued to grow. The turnover of the Professional Systems Division amounted to €316.3m, a decrease of €31.7m (9.1%) compared to the previous year. This is also attributed to the withdrawal from the aviation business in the filing, as well as the separation of selected third-party brands and the end of the governmental subsidies in Japan. In contrast, the Consumer Electronic Division saw turnover grow 1.7% (€5.8m) to €342.1m.
"Last year, we set up our product portfolio in both divisions to be well prepared for the future,” said Andreas Sennheiser. “For example, wired solutions will hardly be in demand a few years from now – a continuous development that we are reflecting in our products."