In an interview with Inavate editor Paul Milligan, Sennheiser co-CEOs Daniel and Andreas Sennheiser have clarified the company's position following the news it was to sell off its consumer division last week.
Inavate: Does the announcement indicate a sale of the entire consumer business? Or is the deal looking for an investment or part of the business?
Daniel Sennheiser: We decided to really focus on our pro business with all our resources, all the knowledge of build up for 75 years, and all the expertise that we've acquired during that period. We want to focus really on the pro side of the business, because we see a lot of growth opportunities there.
To really exploit also the growth opportunities in the consumer side, and also bring in the assets that we have built up for 60 years, we're looking out for a partner who's willing to invest, in whichever form we're really open to discuss. They wull be somebody who shares the vision, who values everything that we've built up so far, and is willing and able to continue to make Sennheiser consumer products shine much stronger than they were in the past.
Inavate: So there's a degree of flexibility from from your end to what this deal could entail?
Daniel Sennheiser: Absolutely, we're really at the beginning of the process now. And we're looking at what different partners bring to the table, and what the modalities could be. And then we decide for the best partner to grasp the opportunities we see in all four areas.
Inavate: Are you expecting a lot of interest in their consumer division? When do you expect a deal to be completed, are we looking at the summer do you think?
Andreas Sennheiser: We do expect a lot of interest because we have a very strong brand, a very good reputation and the necessary capabilities of fulfilling the promise that Sennheiser has, therefore we expect a lot of interest. But we're really at the beginning of the process. We have a timeline in in our head, which is that we would have found a partner by summer and then maybe close the deal by year end. We will see in the next few weeks and months if that really is the right timeline.
Inavate: What factors made you decide to concentrate on the professional division of Sennheiser?
Andreas Sennheiser: For many years we've looked at our businesses based on what the different consumers need, or the our customers need. At the same time, we look at what the market dynamics are and how we can fulfil those customer needs in the different markets. We've already looked at the four business units, Pro Audio, business communication, Neumann and consumer in separate ways and we've developed strategies on all four business units specifically.
Here we saw there are great opportunities for growth in all four areas, but we also realise that probably better off with a partner on the consumer side because we believe there are certain things that a partner could bring to the table that are important for the growth, especially scaling, marketing, and the visibility of the brand. And whereas on the pro side, we believe we have everything in house to make it successful.
Inavate: Will the investment in the consumer division free up financial investment for the professional division?
Daniel Sennheiser: We have no indication at this point so far. What definitely will be the case is that we'll have a much bigger playing field both on the consumer side because of the investors capabilities, the partners capabilities, and at the same time to reinvest some of that and also fully focus on management attention and strategic direction. We cannot, at this point, give any number, but we see a very bright future there.
Inavate: Where do you see the areas of growth in the Pro Audio and the business communication divisions? Where are the exciting areas for you?
Daniel Sennheiser: Covid-19 has served as a catalyst in those areas, universities love our TeamConnect Ceiling 2 for remote lecturing, so we see a huge growth area there. Also in corporate meeting rooms we are very successful with TeamConnect Ceiling 2 and other products, and we're planning to accelerate that.
Andreas Sennheiser: On the on the live performance part we've seen quite a shift, currently all the venues are closed, and shows have been cancelled. We have seen a downturn on that side, but at the same time we see new formats coming up hybrid formats, which also require a lot of good gear. So our customers are adapting, and therefore we are so there's a lot of new growth opportunities also in that side. Because really, the market is transforming quite rapidly right now for a post-Covid world.
Inavate: The name Sennheisers is 100% synonymous with audio, but I'm wondering, you have the TeamConnect product that has put you in into meeting rooms. We've seen Bose and Yamaha and Poly all release sound bars with built-in video cameras, would a video product be something that you guys would look at in the future?
Andreas Sennheiser: We believe that Sennheiser is really good with audio, that's the backbone of everything we do. And that's our DNA. We'd rather partner with somebody that brings the full solution. We believe that if you want a combined product, that's usually not as good in all the aspects, we'd rather have an open system where we are the experts in audio and let the integrators do the integration, and others do other parts which are not related to audio, but everything audio could be from Sennheiser.