Family business: why Sennheiser sells its headphones division – economy

The name remains. This is probably the most important message in advance. Because if everything goes as you wish at Sennheiser, part of the long-established company will now be managed from Switzerland. The requests have been submitted to supervisory authorities and the transition is expected to be completed by the end of 2021, audio specialists in the Hanover region have said.

Sennheiser sold the consumer electronics division – the area that includes headphones and soundbars for end users. In February, the two managing directors Andreas and Daniel Sennheiser announced that they were looking for a partner for the division. As a family business, you need to act nimbly and flexibly and make decisions for the future. “We strongly believe that all areas of business will emerge stronger from the planned realignment,” they said in a message to “customers, partners and friends”. We have known since May that the Swiss company Sonova won the tender: not as a partner, but as a buyer. Now the parties are awaiting approval from the competition authorities.

You could grow up anywhere

Last year, the Sennheiser brothers focused on Sennheiser’s four business areas: pro audio, corporate communications, Neumann studio microphones, and consumer electronics. Strong growth opportunities have been observed in all sectors, but can only be successful autonomously in the long term in the professional field. This includes microphones and headsets for musicians and live events, studio equipment, and office communication.

Sonova, a hearing aid manufacturer from Stäfa on Lake Zurich, pays a purchase price of 200 million euros. The purchase price, which also covers the patents, will be funded from available cash. It is promised that consumer products will continue to be manufactured at the Wennebostel site, under the leadership of the Swiss. The Sennheiser brand is retained, Sonova pays fees for it on the basis of an open-ended license agreement. “We plan to create a separate business line,” said a spokesperson for the Swiss company. This new division will be called Consumer Hearing and, from April 1, 2022, will be headed by Martin Grieder, who will also be represented in the management team of Sonova.

The goal: to help people hear well

The Swiss are particularly keen on true wireless headphones and headphones optimized for speech. Headphones are in-ear headphones that are wirelessly paired with the smartphone and controlled from there. On the one hand it is interesting for all those who want to listen to music wirelessly and digitally while playing sports, on the other hand it is also an opportunity to make hearing aids more discreet and to improve their acceptance. . Or as we say at Sonova: “Reaching people early on on the way to good hearing”.

This is a big step for Sennheiser. Founded in 1945 by electrical engineer Fritz Sennheiser, the company and its namesake are among the pioneers of audio technology. In Wennebostel, a town of 750 inhabitants located in Wedemark near Hanover, Fritz Sennheiser built various microphones and in 1968 brought the world’s first open headset to the market. In 1987 he received the Oscar for Science and Development for the MKH 816 shotgun microphone. The two fields, headphones and microphones, have long shaped the company, run by the founder’s grandsons since 2013.

In recent years, however, the headphone market in particular has not been as smooth as before. The competition, especially with wireless headsets and especially from the market leader Apple, is fierce. Sennheiser is always at the forefront, but competitors like Bose and Sony are also strong. A survey conducted by the Statista portal in 2020 showed that Germany’s most popular headphone brands are Apple, JBL and Samsung, with Sennheiser following in fourth place.

A quarter of jobs will be cut

In 2017, the family business cut jobs and set itself a savings target of 25 million euros. In 2020, Sennheiser announced a “mixed business year” in 2019, in which the consumer sector fell short of expectations. Then came the corona pandemic. Events in the fields of art, sports and music, in which all of Sennheiser’s audio technology is otherwise used, were hardly possible. People equipped themselves with headphones, headsets, and other gadgets to work in the home office, but at the same time the brick and mortar retail business was shut down for a long time.

In July 2020, the two co-bosses announced that they would cut 650 of the 2,800 jobs, including 300 in Germany, and all this by 2022. This will be done in a socially acceptable manner, for example through compensation options departure within a time limit volunteer program, non-filling of positions and regulations on partial retirement and early retirement. “In Germany, we have so far been able to almost completely avoid redundancies for operational reasons”, explains a spokesperson.

Corona’s first year record wasn’t as bad as the Sennheiser feared. In 2020, the company achieved a turnover of 573.5 million euros and a profit of 3.6 million euros before interest and taxes. The professional field collapsed by around 15% compared to the previous year and generated almost 308 million euros in turnover. The consumer division which has now been sold has reached nearly 242 million euros, eight percent lower than in 2019.

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