Sennheiser 2011 Annual Report Download - page 30

CONSOLIDATED MANAGEMENT REPORT 2011
58
CONSOLIDATED MANAGEMENT REPORT 2011
59
At €58.6 million, results from ordinary activities are up a significant 53.3% on the previous year. At €2.6 million,
results from ordinary activities in the year under review were impacted by higher as the usual level of amortiza-
tion of current assets. This effect, as well as the €5.7 million increase in personnel costs, was more than offset
by a €12.1 million decline in material costs as well as the €1.1 million fall in other operating expenses, with the
result that EBIT in relation to turnover for 2011 amounted to 12%.
For 2012, we expect that the divisional reorganization of the Sennheiser Group completed last year into the
Consumer Electronics, Professional Systems and Integrated Systems business divisions will continue to enhance
Sennheiser’s customer orientation. We expect turnover and results to continue on this course in the medium
term despite rising market uncertainty.
Asset Position
The balance sheet total increased from €278.0 million in the previous year to €315.1 million in 2011, primarily
on account of a rise in current receivables as well as cash and cash equivalents. The extremely positive develop-
ment experienced by the company over the course of 2011 helped to reduce the value of inventories from
€87.8 million in the previous year to €80.2 million.
While pension obligation rose by a moderate €2.5 million to €64.7 million following the adjustments made in
previous year in connection with the Accounting Law Modernization Act (BilMoG), total provisions rose by €3.1
million. The significantly improved results for the year meant, in particular, rises in equity due to the increase
in the balance sheet profit to €68.2 million, as well as increased liabilities to shareholders to €144.0 million.
Financial Position
Cash flow from current business activities came to €65.5 million (compared with €23.2 million in the previous
year) and covered the Group’s investment and financing activities. Cash and cash equivalents went up by
€47.1 million to €75.5 million.
PURCHASING
Restocking times have now stabilized, albeit at a very high level, following the global supply crisis last year.
Pressure was put on the procurement market by the disaster in Fukushima, Japan, as well as by the floods in
Thailand. Production failures by suppliers were offset to a significant degree by making increasing use of
alternative suppliers, meaning that the Sennheiser Group experienced no noticeable production failures.
The procurement situation started to stabilize from the end of the third quarter.
The planned procurement budget for 2011 was undercut slightly despite the significant increase in the procure-
ment of electronic components on the over-priced broker market as well as disproportionate price increases for
so-called “rare earth elements”.
The percentage of purchases made in the US dollar zone fell slightly year on year to approximately 73%.
Procurement costs are expected to continue to rise; electricity, raw materials and wages tend to go up over the
long term. Wage costs on the Chinese labor market in particular will double in the coming 4 to 5 years. Political
instability and social crises in some key raw materials countries lend additional momentum to this trend and
may also result in sporadic supply problems.
We will prepare for this eventuality accordingly by making advance plans and by further expanding our range
of alternative sources.
[ OUTLOOK ]
Wireless Microphones
26.4 %
TURNOVER BY PRODUCT GROUP
in %
Headphones
32.9 %
Sennheiser Communications
9.2 %
Wired Microphones
7.4 %
Audiology
6.0 %
Professional Headsets
4.8 %
Georg Neumann
3.6 %
Integrated Systems
3.3 %
Other
6.4 %
[ OUTLOOK ]
[ DEVELOPMENT IN 2011 ]