Sennheiser 2014 Annual Report Download - page 8

CONSOLIDATED MANAGEMENT REPORT 2014CONSOLIDATED MANAGEMENT REPORT 2014
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4. RESEARCH AND DEVELOPMENT ACTIVITIES
Overall, Sennheiser Group’s research and development costs increased by 6.4 percent in 2014 compared to the
previous year. A total of 338 employees were employed in this unit (previous year: 323).
4.1 RESEARCH
In the Consumer Division, research activities focused on innovative transducer concepts as well as their applica-
tion in the future product portfolio.
Research in the Professional Systems Division concentrated on continuing to develop the 3D immersive audio
technology, which enables a new type of spatial sound experience. Several recordings were made as part of this
work, including with the Berlin Philharmonic, as well as sound installations, for example the “David Bowie is”
exhibit at Berlin’s Martin-Gropius-Bau.
4.2 DEVELOPMENT
The Professional Systems Division expanded its portfolio in 2014 in the area of conference systems with the
ADN Wireless system. Focusing on speech intelligibility as well as product flexibility was crucial for the successful
market launch. In addition, a system for small and mid-size conference rooms was introduced with TeamConnect.
The all-in-one solution – consisting of a control unit, microphones and speakers – offers everything necessary
to fully equip a meeting room for phone conferences. In the second half of 2014, the Professional Systems
Division concentrated on wrapping up development for several digital microphone series: evolution wireless D1,
AVX and SpeechLine DW, which will hit the market in 2015. With all three product lines, ease-of-use and profes-
sional quality are in the spotlight: each system is self-configuring and features intelligent frequency manage-
ment as well as automatic sensitivity adjustment. The systems target different customer groups: the evolution
wireless D1 is designed for users in live music, AVX enables high-quality video sound recordings and SpeechLine
DW is tailored to suit speech applications.
Activities in the Consumer Division concentrated on the development of premium headphones especially for
the lifestyle segment in the short and medium term, and audiophile products for the long term. Building on the
success of the MOMENTUM headphones in 2012 and in light of current user and technology trends, a new version
of these headphones was developed. Unveiled for the first time at the CES in Las Vegas in early 2015, the
MOMENTUM 2.0 is foldable and its wireless version uses Bluetooth as well as Sennheiser’s own NoiseGard technol-
ogy for active noise suppression. The new URBANITE headphone series specifically targets millennials and was
launched in September 2014. The headphones won an iF Design Award in Gold for its innovative, robust design.
2.3.3 Financial position
Cash flow from current business activities amounted to €43.9 million (previous year: €21.3 million). On the other
hand, cash flow from investment activities was a negative €18.9 million (previous year: negative €24.7 million)
and cash flow from financing activities was a negative €28.6 million (previous year: negative €5.3 million).
2.3.4 Net asset position
Total assets in the reporting year amounted to €410 million, up 13 percent from €362.4 million in the previous
year. The main reason for this is the increase in inventories by €21.9 million to ensure product availability associ-
ated with rising sales activities. In addition, receivables and other intangible assets grew by €21.6 million. This
is largely due to higher sales in the fourth quarter of 2014, which were far higher than results from the same
quarter the previous year.
Provisions increased by 31.5 million to €143.4 million in this year, as did liabilities, which increased by 7.4 million
to €185.1 million.
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3. INVESTMENTS
The Sennheiser Group’s investments in property, plant and equipment amounted to €17.8 million. These acquisi-
tions were distributed primarily in two areas: to implement strategic measures for expanding the product
spectrum and to complete a new production line.
The Group’s investments in fixed assets totaled €16.5 million in fiscal year 2014. Of that, Sennheiser electronic
GmbH & Co. KG accounted for €6.4 million.
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