Sennheiser 2014 Annual Report Download - page 10

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CONSOLIDATED MANAGEMENT REPORT 2014CONSOLIDATED MANAGEMENT REPORT 2014
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Nevertheless, the greatest short-term influence on earnings growth will be the volatility of the euro against the
other major world currencies. Therefore, one of the company’s key goals is to prevent excessive cost increases
resulting from the euro’s current weakness. Based on the high percentage of revenues in the North American
and Asian markets, the Sennheiser Group still anticipates moderate revenue growth compared to the previous
year despite the condition of the euro. A variety of new, innovative products and technologies supports this
prognosis. Consequently, the company anticipates positive revenue growth in the current fiscal year.
5.2 RISK REPORT
5.2.1 Risk management system
The risk management process introduced in 2012 continued to be established in the Group in 2014. Risk
managers were appointed; risk analyses and workshops were conducted in certain areas of the company at the
different production locations. The controlling system, which monitors, manages and supports all business
processes within the Group, supports the risk management process. This allows deviations to be quickly identi-
fied and effective countermeasures to be implemented. Moreover, the early warning system – in the operational
planning area, amongst others – is being optimized in order to identify future opportunities and risks more
quickly. Mid- to long-term opportunities and risks are recorded in the strategic planning process.
5.2.2 Risks
Although fluctuations in Sennheiser’s most important trading currencies had a significant impact on business
development in 2014, these were largely neutralized through counter-developments. The general default
risk is counteracted through effective customer management, supported by a global commercial credit
insurance policy purchased last year.
A globally valid property, liability and transport insurance policy covers the interests of the entire Group,
including all affiliated companies. This policy also protects against reciprocal risks within the Sennheiser Group
and against consequential damages caused by defaulting suppliers. The risk of defaulting suppliers and other
interruption risks were a central concern again in 2014: suitable measures for minimizing risk were
implemented.
5.3 OPPORTUNITY REPORT
On a global level, the Sennheiser Group is active in over 50 countries with 21 subsidiaries. In light of the
Sennheiser Group’s global orientation, country-specific issues such as tariffs, frequency variations and marketing
authorization requirements are very important for the company. In particular, the Transatlantic Trade Agreement
currently being negotiated between the European Union and the USA could help dismantle barriers to trade and
enable the company to meet customer needs even better.
The Sennheiser Group is pursuing a long-term strategy of further expanding its global business activities. The
focus of these expansion efforts is to offer every customer the same professional services all over the world.
Especially in the Asia-Pacific region, Sennheiser has implemented a variety of measures to strengthen the regional
positioning of its brand. In addition to founding a new subsidiary for Australia and New Zealand in the previous
year, the company also opened a subsidiary of Sennheiser Electronic Asia in Seoul, South Korea. Furthermore, the
Sennheiser Group stepped up its partnership with the Shanghai Music Hall, which was renamed the Sennheiser
Shanghai Concert Hall in March 2014. The long-term goal of this prestigious partnership is to further boost
Sennheiser’s name recognition and reputation in the Chinese market.
The Sennheiser Group also laid an important cornerstone for opening up new, technologically advanced business
areas by founding the Sennheiser Streaming Technologies subsidiary.
To ensure a sustainable and successful future for the company, Sennheiser took a variety of steps at its head-
quarters in Wedemark as well: opened in early 2015, the Innovation Campus now offers 7,000 m² of space for
multi-team projects working on developing and marketing cutting-edge products. In 2014, Sennheiser also
opened a day care facility at the company – “Ohrwürmchen” – to enable its employees to improve their work-life
balance.
Wennebostel, April 2015
On behalf of the Executive Management Board of Sennheiser electronic GmbH & Co. KG
Daniel Sennheiser and Dr. Andreas Sennheiser
CEOs of Sennheiser electronic GmbH & Co. KG
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