Sennheiser 2012 Annual Report Download - page 28

5554
CONSOLIDATED MANAGEMENT REPORT 2012
CONSOLIDATED MANAGEMENT REPORT 2012
In global terms, price inflation continued to wane, even though some industrialized nations and currency unions
significantly expanded the money supply. Although food prices went up in the second half of the year, the
effect was not enough to fuel global price inflation. Global prices for raw materials varied greatly over the
course of the year. However, apart from a few exceptions, they remained largely unchanged year on year.
The favorable outlook for inflation enabled the central banks of major industrialized nations to further expand
the money supply. Most emerging markets took a less restrictive stance when it came to their monetary
policy.
The emerging markets were once again the main drivers behind global growth last year, especially in Asia and
South America. Growth in Africa was particularly worth noting. The continent has advanced to become the
world’s fastest-growing economic region, albeit at a low level of income.
Global economic growth will continue to gain stability in 2013 and will gradually pick up steam. While it remains
necessary to keep an eye on various geopolitical risks, a number of positive surprises could be in store this year.
For instance, consumers and businesses have built up a considerable backlog in demand. In the wake of the
global financial crisis, consumers and businesses grew very cautious about spending, instead preferring to save
more and reduce debt. There are signs that this trend is now slowly reversing, especially in the USA and
parts of Asia.
As in 2012, global prices for raw materials in 2013 seem likely to remain largely stable. In some markets,
prices – especially for crude oil – are under pressure on account of weak growth in demand and relatively high
inventories. However, stronger growth in China and the rest of Asia could drive up prices as the
year continues.
THE EUROPEAN UNION
Economic growth has been weak in Europe since mid-2011. In 2012, economists merely recorded brief, temporary
recovery at the start of the year. However, for the last quarter of the year, they estimated that the EU’s gross
domestic product would shrink, especially in the Eurozone. In fact, economists expect the final figures to reveal
that the EU experienced a mild recession on average over the course of 2012.
The main factor behind this poor performance was the debt crisis in the Eurozone, which continued to grow in
severity until the third quarter of 2012. This situation was exacerbated by a slowdown in growth in key markets,
such as the USA, China and Brazil. The fiscal policies of the Southern European countries most affected by debt
problems, some of them extremely restrictive, put an additional damper on pan-EU growth.
In terms of economic growth, European countries have drifted further and further apart since 2010. Germany,
Austria, Finland and Luxembourg all reported continued modest growth in the year under review. In contrast,
every Southern European country was clearly mired in recession – a fate that the Netherlands also shared in
[ Outlook ]
[ Development ]
CONSOLIDATED MANAGEMENT REPORT 2012
———
PRELIMINARY REMARKS
As the parent company of the Sennheiser Group, Sennheiser electronic GmbH & Co. KG prepares consolidated
financial statements every year.
The company’s production sites are located in Wennebostel (Germany), Tullamore (Ireland) and Albuquerque
(New Mexico, USA). While Wennebostel chiefly manufactures wireless and wired microphones and microphone
capsules, monitoring systems and headsets, the plant in Albuquerque concentrates on wireless microphones
and monitoring systems. The Tullamore facility manufactures headsets and headset transducers. The company
has a branch office in Singapore that manages the functions of product management, marketing, purchasing
and part of product development for the consumer electronics area.
Besides the parent company Sennheiser electronic GmbH & Co. KG, the Sennheiser Group includes seven subsidiar-
ies within Germany and 19 subsidiaries abroad, as well as the joint venture Sennheiser Communications A/S
based in Copenhagen, Denmark. Sennheiser Audio Labs GmbH, Wedemark, Germany, was established in the year
under review. In addition, Sennheiser (Schweiz) AG, Unterengstringen, Switzerland, joined the Group following
the takeover of Bleuel Electronic AG.
———
ECONOMIC DEVELOPMENTS DURING FINANCIAL YEAR 2012
Overall Business Developments and Development of the Industry
THE GLOBAL ECONOMY
Overall, the global economy continued to lose ground in 2012. After a weak first half of the year, global growth
stabilized in the second half of the year. However, high debt and unemployment in many industrialized nations,
as well as Europe’s debt crisis and other risk factors, restrained economic growth significantly.
Together with the European Central Bank (ECB), Europe’s national governments managed to curb the risks of
the debt situation. In particular, they were able to prevent the dreaded and seemingly inevitable collapse of the
European Economic and Monetary Union (EMU), enabling the Eurozone to put a check on the looming impact on
consumer confidence and growth and soothe global financial markets – at least for the time being. The euro
was able to recover slightly as a result.
[ Development ]