Annual Report 2016

Making sound that people can feel, instead of just hear. Creating extraordinary sound experiences. Having a keen understanding of what our customers want and transforming revolutionary ideas into ground­breaking products. Consistently pushing the boundaries of what is possible – a quest marked by curiosity, a vibrant culture of innovation and passion for the latest technology. Never standing still, but always leading the way. To shape one thing:

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Content

Interview Daniel Sennheiser and Dr. Andreas Sennheiser 4

The sound of revolutionaries 8

Entering the heart of sound with Robin Schulz 12

The next dimension of AMBEO 16

Cities of sound 20

Financial report 24

Imprint 48

“We can say with confidence that we are the future of the audio industry.”

What inspired you this past fiscal year?

Daniel Sennheiser: Our temporary stores in SoHo and at the World Trade Center were certainly a major highlight. In New York, we were able to present the world of Sennheiser just like we set out to, earning us a great deal of attention in the American market and making us proud. We have grown as a team beyond what we ever thought possible, and we also gained many valuable experiences.

Andreas Sennheiser: There was a highlight almost every month in the professional segment, from the Grammys and the BRIT Awards to the Super Bowl halftime show. Hundreds of millions of people watched Beyoncé, Lady Gaga and Bruno Mars giving great perfomances with Sennheiser microphones.

Daniel Sennheiser: Naturally, last year’s highest-profile product in the consumer segment was the HE  1, the world’s best headphones. We invested almost a decade of development into those headphones and delivered them to customers for the first time last year.

Andreas Sennheiser: We also rounded out our entire portfolio of head-phones to include wireless products to such an extent that we are now very well positioned for a future in which we will likely no longer need any cords or wires whatsoever in a few years. The PXC  550 Wireless al-lowed us to once again demonstrate our claim to leadership in the field of noise-canceling travel headsets straight out of the gate – a real milestone that outshines everything else in the market.

Yet Sennheiser had to record a drop in turnover. What are the reasons for that?

Andreas Sennheiser: It is important to take a discriminating look at de-velopments. In the professional segment, we came off a tremendously strong year with one-off effects in Japan. They did not repeat, leaving us behind our previous-year figures. At the same time, we dedicated tremen-dous efforts to laying the groundwork for the launch of game-changing products, including the D  6000 digital wireless microphone system. We also honed our strategic focus by exiting the aviation segment and ending our relationship with selected third-party brands to concentrate more on offering our customers genuine added value. In the consumer world, we succeeded in living up to past successes and continuing to grow.

Daniel Sennheiser: Nobody ever aims for a drop in turnover, of course. As a family-owned company, we focus on the long term. We know that Rome wasn’t built in a day. The situation is not an unexpected one. We have accepted the drop in turnover. The result is in line with our expectations.

INTERVIEW DANIEL SENNHEISER AND DR. ANDREAS SENNHEISER 5

“The Future of Audio” – it’s a vision that also sums up an aspiration: Sennheiser’s goal is to shape the future of the audio world. In pursuit of this, Daniel and Dr. Andreas Sennheiser are placing a strategic focus on the AMBEO technology program. The co-CEOs take a look back at the past year and a look forward into 2017 while outlining their ideas for the future of sound – with innovative audio solutions, an impressive brand world and emotional experiences that people can truly feel.

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Daniel Sennheiser: The most exciting AMBEO project right now is the Pink Floyd exhibition “Their Mortal Remains” at the Victoria and Albert Museum in London. The band has been working with Sennheiser pro-ducts since the 1960s and has often experimented with new ways of recording sound. That makes Sennheiser the perfect official audio part-ner for the exhibition. At the exhibition, visitors can use our guidePORT system to find out more about the history of Pink Floyd and their work with technology. The highlight is a 3D audio installation with 25 speakers and 17 channels where visitors can re-experience the Live 8 concert, the band’s last show as a group. The Pink Floyd song “Comfortably Numb” has been specially remixed at the Abbey Road studios just for the occa-sion – an experience people can truly feel that is unlike any other in an exhibition ever before.

How can you make all these ideas tangible for Sennheiser’s customers?

Andreas Sennheiser: Our company has evolved tremendously in the past three or four years. Sennheiser has become more confident. This develop-ment is reflected in our new brand identity: It is lighter, more open, far clearer and, in a way, simpler. We are giving the product and the emotion-al experience more freedom and a greater presence – something also re-flected in our revised logo, which is now less technical, but more elegant.

Daniel Sennheiser: Our new brand claim ultimately expresses in words what defines us: The Future of Audio. That sets the bar pretty high, of course. Still, we have been shaping the audio world with our products since 1945. So we can say with confidence that we are the future of the audio industry. Our passion for excellence, our experience, our network built over 70 years, and a culture of innovation that ensures that we are never satisfied with dwelling on past achievements – all these dimensions make this claim an exciting reality.

INTERVIEW DANIEL SENNHEISER AND DR. ANDREAS SENNHEISER6

Let’s take a look to the future. Sennheiser wants to shape the future of audio. What does that mean for 2017?

Daniel Sennheiser: We developed many new products last year that we are now establishing in the market. AMBEO is Sennheiser’s strategic flagship project. 3D audio formats will be a major focus in the future in the audio industry – in recording, production and reproduction.

Andreas Sennheiser: There have always been giant leaps forward time and time again in the past. The shift from mono to stereo is one such ex-ample. We are now in a phase in which development is moving away from 2D to 3D audio content. It’s a very exciting time with many opportunities. Because this development is still in its infancy, it is hard to predict whether this change will be explosive or slow.

Daniel Sennheiser: But we can say that the way people perceive music is changing. People have arrived at a point where they are looking less for something to casually listen to in the background and more for something meaningful and emotional that allows them to get away from the hustle, bustle and stress of the world for a little while. This is where formats such as AMBEO can really make a difference.

Speaking of AMBEO, what awaits us in the field of 3D audio this year and in the future?

Andreas Sennheiser: For us, AMBEO is a framework in which we are de-veloping various different products, both hardware and software. In the end, it’s all about making audio experiences possible that are so real that people can no longer tell the difference between reality and reproduc-tion. The first AMBEO product was the virtual reality mic, which went on to become the gold standard in single-point VR production within twelve months. We have also developed blueprints that explain how live music can be recorded and mixed to create a 3D audio experience for head-phones and speakers.

Daniel Sennheiser: The AMBEO SMART HEADSET, which is scheduled for launch soon, is our way of bringing AMBEO to the end consumer. The headset allows people from truly all walks of life to record and produce three-dimensional content with their smartphones, taking their videos to the next level.

Andreas Sennheiser: And there’s more, of course. We see a great many areas of application that call not only for new products, but also for com-pletely new approaches. Augmented reality is one example: Combining the digital world with the real one requires completely new recording methods and new products, as well as different forms of reproduction. Our focus here is mainly on applications where giving people an experi-ence that they can feel is of the essence, such as sports and movies, as well as live productions and music events.

A retrospective – immerse yourself in magical realms and remarkable worlds of sound. The glorification of pioneers. A different kind of experience: three-dimensional, immersive, intoxicating. An arrangement of the avant-garde.

9THE SOUND OF REVOLUTIONARIES

Over 260 million records sold. Unforgettable songs that have influ-enced generations. A sound as revolutionary as the band that created it – Pink Floyd. “The Pink Floyd Exhibition: Their Mortal Remains” is a journey through the unique world of these rock legends. As the exhibition’s official audio partner, Sennheiser is making this landmark retrospective sound as amazing as the journey itself.

The sound of revolutionaries

“The Pink Floyd Exhibition: Their Mortal Remains” at London’s Victoria and Albert Museum takes a look back at Pink Floyd’s remarkable history and music, their unique sound technology and their incredible live perfor-mances. The band is relying on Sennheiser to recreate its one-of-a-kind sound and bring it to life in a new way. As official audio partner to the ex-hibition, the audio specialist is ensuring the outstanding playback quality of their classic arrangements, while making it possible for visitors to im-merse themselves in the band’s unparalleled sound.

To make this possible, Sennheiser has remastered the song “Comfortably Numb” from Pink Floyd’s Live 8 concert – the last performance to feature the rock legends David Gilmour, Nick Mason, Richard Wright and Roger Waters all together on stage – using the immersive AMBEO 3D audio for-mat. Created exclusively for the exhibition, the 3D remix transforms the band’s works into an entirely new audio experience. “3D audio is the new frontier of sound excellence, set to transform the listening experience for users. We are very happy to bring that special audio experience to the Pink Floyd exhibition” said Daniel Sennheiser. The AMBEO installation at the V&A Museum uses 25 speakers to place sound both around and above the listener to deliver an audio sensation unlike anything visitors have felt or experienced before.

One of the two producers of the immersive version of the song was GRAMMY winner Simon Franglen. For Franglen, working on the AMBEO project with both Sennheiser and Pink Floyd was a special experience: “I can’t think of a band that is better suited to Sennheiser’s AMBEO 3D technology than Pink Floyd. They pioneered surround sound in their live shows, now Sennheiser’s 3D immersive audio pioneers a completely new experience. It allows the audience to hear every detail inside the performance.”

For the 3D remix of “Comfortably Numb”, Nick Mason returned to the world-famous Abbey Road Studios, where Pink Floyd recorded such albums as “The Dark Side of the Moon” and “Wish You Were Here”. The mix was premiered at the studios in March. Daniel Sennheiser described the sessions as being almost magical: “To come back to the Abbey Road studios to work together with the AMBEO 3D audio technology is a very special part within this collaboration.”

The British rock band and Sennheiser are connected by a close, long-standing partnership. Pink Floyd have been working with Sennheiser and Neumann microphones throughout their career, according to band member Nick Mason: “We have been using Sennheiser equipment ever since Pink Floyd started out as a live band and used the MD 409 micro-phones for our performances, so it is only fitting that they provide the audio experience at our exhibition.”

The band is also relying on the audio specialist to inform and guide visi-tors through the exhibition. In London, Sennheiser’s wireless guidePORT system provides guests with comprehensive information and the music to accompany the exhibits on display.

Nick Mason, for one, has complete faith in Sennheiser’s audio expertise: “Sennheiser has been at the cutting edge of audio technology for a very long time, so we have no doubt that they will help make ‘Their Mortal Remains’ something special.”

Sennheiser is the official audio partner of the first Pink Floyd exhibition: “Their Mortal Remains”.

The song “Comfortably Numb” was remixed at the legendary Abbey Road Studios with AMBEO. From left to right: Sound engineer Andy Jackson, Dr. Andreas Sennheiser, producer Simon Franglen, co-curator Aubrey Powell, producer Simon Rhodes, Daniel Sennheiser.

THE SOUND OF REVOLUTIONARIES 11

In the heart of sound. Unleashed. Buzzing. AMBEO electrifies. Crystal clear highs, mid-frequencies you can’t miss and a powerful bass that sets the pace. Experience music like never before. A sound that fills the room, brings it to life. And each individual is at its center!

13ENTERING THE HEART OF SOUND WITH ROBIN SCHULZ

On June 15 2016, world-renowned DJ Robin Schulz stepped up to the turntables at Ostquai in Basel. His appearance was the highlight of the Sennheiser “Shape the Future of Audio” party and it was no usual performance: Thanks to AMBEO 3D, the guests at the cultural center experienced a whole new dimension of sound with Schulz’s new, exclusive song “More than a Friend.”

Entering the heart of sound with Robin Schulz

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Plunging into deep sound, partying and dancing while bathed in the beat, becoming one with the music – that’s what it was all about that evening. The night kicked off with a set by French DJ and producer Hugel, followed by Robin Schulz, who took over the turntables at 11 pm to perform his live set. It was a brand-new experience for Schulz too, as the party trans-formed into an immersive 3D audio experience at the stroke of midnight with the premiere of his track “More than a Friend” (feat. Nico Santos). The song was written exclusively for Sennheiser and was produced and mixed using Sennheiser’s AMBEO technology.

Robin Schulz is currently one of the most successful German artists in the world. His remix of the Mr. Probz track “Waves” was a number-one hit in six European countries. The follow-up, “Prayer in C,” was the most successful song ever produced in Germany. For Robin Schulz, AMBEO was like a revolution in sound.

“For a DJ, it’s all about sound, space and emotions. You want to bring energy to the room, and with AMBEO that’s actually possible,” the star explains. “I remember how impressed I was when I heard AMBEO for the first time – the loudspeaker system surrounds you in all three dimensions. AMBEO gives sound back its natural immersive character and creates a new, spatial sound experience. There’s no “sweet spot” anymore, because the sound is perfect everywhere. You can move and dance and experi-ence the music right down to the smallest detail. The difference is that you’re not in a room with music – you’re in the music itself. I was thrilled to be one of the first DJs to get the chance to use this incredibly inno-vative technology. As a producer and a music lover, I think this is a major leap forward in development and that it has huge potential for sound playback.”

Robin Schulz impressively demonstrated this potential with his ap-pearance at the “Shape the Future of Audio” party. “We were delighted that we could work together with Robin to bring our guests on this extraordinary journey right into the heart of sound,” said Dr. Andreas Sennheiser, co-CEO of Sennheiser.

Robin Schulz trusts inSennheiser sound.

The star DJ plays the firstAMBEO live set at the“Shape the Future of Audio”party in Basel.

ENTERING THE HEART OF SOUND WITH ROBIN SCHULZ

It’s new. It’s different – different than anything else out there. It’s the sound of life, as immersive and authentic as reality.

It lets you relive adventure. Share moments with a lasting impact. Immerse yourself in a different world, a different dimension.

17THE NEXT DIMENSION OF AMBEO

The next dimension of AMBEO

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Over the past year, Sennheiser has been strategically focusing on AMBEO, a pioneering technology program for 3D immersive audio. In 2017, the company is taking this to the next level: With the AMBEO SMART HEADSET, Sennheiser presents the first immersive product for the consumer market – giving memories back their unique sound.

In front of you is the deep roar of a waterfall. An animal’s call emerges from the dense forest to your right, and the brittle wood of an ancient tree creaks to your left. Even though you are recording the overwhelming landscape that surrounds you, you still get an immediate sense of how the sounds of your latest trip will be brought back to three-dimensional life later when you get home and can share it with your friends and family.

Capturing every situation intuitively in realistic 3D sound, and playing it back later on any set of headphones – in a nutshell, this is the revolution-ary approach that is made possible by the Sennheiser AMBEO SMART HEADSET. These groundbreaking headphones take the audio specialist’s AMBEO program even further: With its compact in-ear design, the headset is perfect for use with mobile devices. “Shooting 4K and 360- degree videos that are true to reality is a matter of course these days,” Dr. Andreas Sennheiser explains. “However, the power and emotional im-pact of high-quality videos like these are often hampered by the mobile device’s inferior audio quality. The AMBEO SMART HEADSET will close this gap.”

Sennheiser is uniting its 3D sound technologies and products under the AMBEO trademark, which holds radical new opportunities for sound recording, mixing, processing and playback. This technology will change listeners’ perception of sound forever. Whether it’s used for recording music, broadcast applications or virtual reality gaming, 3D audio brings immediacy to every audio situation and gives the listener the impression that he or she is truly experiencing the virtual scenery.

In 2016, Sennheiser introduced its first AMBEO product: the AMBEO VR mic. This compact Ambisonics microphone was developed especially for professional virtual-reality productions and allows VR developers to convey the sonic atmosphere and the feeling of virtual worlds with 3D sound that is almost indistinguishable from reality. VR experts and sound engineers can turn to Sennheiser’s AMBEO Music Blueprints platform for a wide range of information about working with live music in 3D audio. The educational platform helps users to create immersive music experi-ences that make the listener feel like he or she is right there, experiencing it live.

With the AMBEO SMART HEADSET, Sennheiser is systematically pur-suing its vision for the future of audio. AMBEO makes crossing the bor-der between audio recording and playback accessible to end users in the consumer sector for the very first time.

“For more than 40 years, we have been setting new standards again and again in the development of binaural recording technology. Particular highlights include Neumann’s KU  80 dummy head microphone in 1973 or the MKE  2002 stereo microphone in 1974, which was worn on the head during recording, replacing the expensive dummy head,” explains Dr. Andreas Sennheiser. “We are now bringing the same passion at the start of a new era in binaural audio recording for the digital age. We are excited to see how our customers will utilize the creative capabilities of this technology.”

Give memories theirunique sound back:the AMBEO SMART HEADSET.

THE NEXT DIMENSION OF AMBEO

A composition of clear lines and powerful images. A stage for the brand where technology and emotion come together in perfect harmony to create magical moments. But it’s more than that. It’s the expression of an inner philosophy that imparts vision and values. In its own unique way, it opens the door to a journey through time – to the future of sound.

21CITIES OF SOUND

Early in 2017, Sennheiser revealed a new look that reflects the com-pany’s pioneering spirit and innovative capabilities. Ahead of this change, New York’s audio enthusiasts got a chance to experience face to face the way the Sennheiser brand has evolved in two unique pop-up stores that opened for a limited time from October 2016 to March 2017. This exciting, physical communication of the brand story has since taken more permanent form, with the opening of the audio specialist’s very own flagship stores in Berlin and Singapore, taking customers on a journey to the future of audio.

Cities of Sound – Enter the Future of Audio

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To fulfill its customers’ ever changing needs, Sennheiser has continued to create groundbreaking innovations, time and time again. The company has been making its mark on the audio industry for more than 70 years, from the founding of Lab  W right up to the dynamic rise to become a global brand. And it’s not only through its products that Sennheiser demonstrates its innovative capabilities – this story is also told through the audio specialist’s brand environment and, increasingly, through its own flagship stores and unique pop-up experiences.

In New York, Sennheiser invited visitors on a trip into the future of the world of audio at a special pop-up store in the trendy district of SoHo and again at the Sennheiser Soundscape in the World Trade Center Oculus hub. Visitors to the pop-up store experienced the Sennheiser brand with all their senses: The journey started with the atmospheric sound tunnel – a surreal, black walkway faintly illuminated with white lights. The con-stant roar of the city that never sleeps receded further and further into the background with each step forward. At the end, the sonic travelers were greeted by a monumental version of the iconic Sennheiser “S” – and behind this discovered the audio specialist’s entire product range: From premium headphones like the PXC 550 Wireless, to audiophile highlights such as the HD 800 S, to professional solutions including TeamConnect Wireless. The true highlight, however, was the Sound Temple, a unique space for visitors to fully immerse themselves into utterly new sonic environments with AMBEO and the best headphones in the world, the HE  1.

The company’s passion for sound was also in evidence at Sennheiser’s Soundscape, its own showroom in the Westfield World Trade Center. In the Oculus building, designed by iconic and world-famous architect Santiago Calatrava, visitors had the opportunity to enjoy impressive audio experiences based on a range of themes. The audio specialist also gave visitors the chance to try out milestone products like the HE  1, PXC  550  Travel and the HD  800  S.

The look of the New York pop-up store included something never seen be-fore – the hallmark of Sennheiser’s new corporate design, now enhanced to communicate more powerfully both the company’s forward progress and its tradition. At the beginning of 2017, the characteristic “S” – an un-mistakable symbol of the Sennheiser brand since 1958 – was revamped and further refined, and the lettering given more room to breathe. Togeth-er with the now off-centered frame, both elements form a co he rent whole. “The careful adjustments made to the logo not only convey a sense of elegance and self-confidence, but also reflect our ongoing journey into the future of audio. At the same time, we have remained true to our roots with the design,” Daniel Sennheiser explains. The revised visual language also has a clear aim: It represents Sennheiser’s aspiration to inspire sen-sations using innovative technology. Functional product images and emotional motifs are contrasted to get this message across and to create visual tension.

Since last year, music lovers in Berlin have also had the opportunity to revel in the Sennheiser brand experience up close. After the opening of the Sennheiser store in Singapore in August 2016, a further store opened in September on Berlin’s beloved Tauentzienstraße shopping boulevard. Just like in New York, the visual language of the new corporate design made an early appearance. The store features an exclusive selection of product highlights so that visitors to the German capital are given the opportunity to experience the breathtaking world of Sennheiser.

“Via our stores, we want to share our passion for perfect sound with our customers,” Daniel Sennheiser says. “Because we believe that beautiful sound can’t be explained – it has to be experienced.”

The sound tunnel marked the entrance to the world of Sennheiser.

The Sennheiser Soundscape showroom in New York.

CITIES OF SOUND

Financial Report

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Overview of the fiscal year 27

Report of the Supervisory Board 28

Management report of the Sennheiser Group

Principles 29

Business model 29

Goals and strategy 29

Economic report 30

Overall business development 30

Development of the industry 30

Business development 30

Turnover by region 32

Turnover by business division 34

Position of the Sennheiser Group 35

Research and development activities 36

Development in number of employees 39

Outlook, risk and opportunities report

Outlook report 41

Risk report 42

Opportunities report 43

Consolidated financial statements 2016

Consolidated balance sheet 44

Consolidated profit and loss statement 46

Consolidation 47

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► The Sennheiser Group generated turnover of €658.4  million in fiscal year 2016, which corresponds to a €25.9  million or 3.8  percent de-crease year on year. €358.2  million of total turnover was attributable to the EMEA region, while the group generated €168.8  million in the Americas region and €131.4  million in the APAC region.

► The decrease in turnover is due primarily to placing greater focus on core business. As a result, Sennheiser exited the aviation segment and also ended relationships with third-party brands during the re-porting year. The decision by the Japanese government to end state subsidies for wireless microphone systems as planned at the end of the first quarter of 2016 also adversely affected turnover development.

► The EMEA region experienced slight turnover growth, increasing by 0.3  percent year on year. In contrast, the APAC and Americas regions reported declines in turnover by 10.8  percent and 6.1  percent respec-tively.

► Turnover in the Professional Systems Division totaled €316.3  million, whereas the Consumer Electronics Division generated turnover of €342.1  million.

► The Sennheiser Group’s earnings rose year on year to €34.9  million, which is due to lower material, personnel and other operating expenses.

► The Sennheiser Group again increased its investments in research and development year on year, this time by 16 percent to €54.5  mil-lion. A total of 385  employees worked in research and development (previous year:  354).

► On an annual average, the Sennheiser Group had 2,725 employees, up 1.8  percent year on year. The share of employees working in Germany (51  percent) and abroad (49  percent) was more or less equal. The number of trainees around the world remained at the high level of 69.

► Sennheiser launched numerous new products in the fiscal year. In the Professional Systems Division, they included such things as the SpeechLine Digital Wireless microphone series, the TeamConnect Wireless conference system and the EK  6042 two-channel camera receiver for professional video coverage. The Consumer Electron-ics Division added the PXC  550 Wireless travel headphones and the benchmark HE  1 headphones, among other products.

Overview of the fiscal year

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The group also continued to press ahead in the reporting year with its strategic focus on 3D audio as an area with great promise for the future. These activities are pooled in AMBEO. Sennheiser will be launching the first consumer product under this brand name in summer 2017: the AMBEO SMART HEADSET.

In addition to the Executive Management Board, the Supervisory Board would like to thank all Sennheiser Group employees for their dedication. They are the ones who embrace Sennheiser’s claim to leadership and innovation in their day-to-day work − and repeatedly transform these values into a superior experience for customers.

On behalf of the Supervisory Board

Wedemark, Germany, May 2017

Dr.-Ing. Frank HeinrichtChairman of the Supervisory Board of Sennheiser electronic GmbH & Co. KG

Ladies and Gentlemen,

The Supervisory Board regularly addressed the group’s position, develop-ment and strategic focus in detail during fiscal year 2016. We remained in close contact with the Executive Management Board and provided its members with advice on the company’s management. Our collaboration was marked by transparency and openness. This included providing the Supervisory Board with regular, in-depth updates on current develop-ments relating to the turnover and earnings situation, the group’s risk situation and other relevant issues. The Supervisory Board has thoroughly examined and approved the consolidated financial statements and management report without reservation.

The Supervisory Board consisted of four members in fiscal year 2016. In addition to myself they included Prof. Dr. Jörg Sennheiser, Andreas Dornbracht and Johann Soder.

The Supervisory Board met a total of four times in fiscal year 2016 to fulfill its responsibilities. Dr.  Andreas Sennheiser, Daniel Sennheiser, Peter Claussen, Thomas Weinzierl and Steffen Heise were members of the Executive Management Board in the reporting year. Peter Callan was a member of management until April 30, 2016.

The Sennheiser Group succeeded in slightly increasing its earning power in fiscal year 2016. The year-on-year decline in turnover, on the other hand, is due primarily to placing greater focus on core business: Sennheiser exited the aviation segment and ended relationships with selected third-party brands. Turnover development was also shaped by the end of a special situation in Japan, where the government had been subsidizing the upgrade to digital microphone systems through the end of the first quarter of 2016. The group benefited from this measure in 2015 especially.

Report of the Supervisory Board

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In addition to Sennheiser electronic GmbH & Co. KG, seven German and 23 foreign subsidiaries also belong to the Sennheiser Group. The joint venture Sennheiser Communications A/S in Copenhagen (Denmark), which specializes in headsets for PCs, offices and call centers as well as gaming, has existed since 2003.

GOALS AND STRATEGY

Sennheiser’s goal is to develop and expand leading positions in its busi-ness segments that also strengthen its core business.

Sennheiser therefore essentially focuses on offering an efficient, high-quality product portfolio that is completely tailored to users’ needs and includes impressive innovations. In order to prepare products for launch more quickly, the audio specialist relies on internal research and development skills and in-house production capacities. The goal is to constantly tap into new markets, both geographically and in the form of new business areas.

BUSINESS MODEL

Audio specialist Sennheiser is one of the world’s leading manufactur-ers of headphones, microphones and wireless transmission technology. The group conducts its own research, and it develops, produces and sells products for both professionals and private consumers. Sennheiser is divided accordingly into the Professional Systems and Consumer Electronics Divisions.

Sennheiser electronic GmbH & Co. KG, headquartered in Wennebostel (Wedemark), Germany, is the parent company. The globally active group has its own production sites, which are located in Wennebostel (Germa-ny), Tullamore (Ireland) and Albuquerque (USA). In Wennebostel, Sennheiser chiefly manufactures wireless and wired microphones and microphone capsules, monitoring systems, headsets, high-end head-phones and conferencing technology. The plant in Albuquerque special-izes in the production of headphones as well as wireless microphone and monitoring systems, whereas the Tullamore facility manufactures head-phones, headphone transducers and loudspeakers. Product management, purchasing and part of product development for the consumer electronics business are located in Singapore, in addition to Germany and the United States.

The core business also includes sales and services for the product port-folio. Sennheiser has 20 sales subsidiaries and long-standing trading partners in more than 50 countries which handle these activities. The company expanded its global sales network and intensified its activities in the reporting year, particularly in Austria and the Eastern Euro pean markets, by establishing Sennheiser Austria GmbH in Vienna (Austria) and acquiring the business operations of the former sales partner as of April  1, 2016.

Principles

MANAGEMENT REPORT OF THE SENNHEISER GROUP

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OVERALL BUSINESS DEVELOPMENT

The global economy was not particularly dynamic in fiscal year 2016. Growth remained at a low level of 3.1  percent. Economic development in the United States fell short of expectations. The strong U.S. dollar ex-change rate in particular had a negative impact on the external trade balance. The domestic economy was unable to cushion this effect, since gross domestic product increased only slightly. In Asia, China witnessed constant growth, although the country’s import figures continued to be weak and were unable to stimulate global trade. Japan reported only moderate growth rates. A slight rise in commodity prices paired with a strong U.S. dollar exchange rate came as positive news for Russia and Brazil, whose national economies continued to slow down in the reporting year.

While the eurozone’s economic recovery continued, the monetary union was still unable to achieve complete relief. This was especially true for the countries in Southern Europe. The European Central Bank continued to pursue its expansive monetary policy as before in order to stabilize the situation. However, the limits of this approach became evident in the re-porting year, as reflected in excessively high strain faced by individual in-dustries, such as banks and insurers, which were increasingly inclined to pass these strains onto customers and business partners. This in turn led to the deterioration of economic prospects. Germany’s continued positive performance in foreign trade and strong domestic demand, especially in the consumer and construction sectors, bolstered the country’s economy.

DEVELOPMENT OF THE INDUSTRY

The German electrical and electronics industry saw slightly positive development in fiscal year 2016. Exports and turnover in the industry both set new all-time highs. Nonetheless, the industry was unable to completely meet the targets forecast by Zentralverband Elektrotechnik- und Elektronikindustrie [German Electrical and Electronic Manufacturers’ Association − ZVEI] in early 2016.

The companies significantly increased their turnover with customers in Germany and countries outside the eurozone, with China and the United States remaining the biggest buyers. It was possible to more than off-set the slight performance decrease among customers in the eurozone. Thanks to a high level of momentum, the industry also reported overall growth in production volume, investments and research and development activities. Only order intake volume decreased slightly on average for the year.

BUSINESS DEVELOPMENT

The Sennheiser Group generated turnover of €658.4  million in fiscal year 2016, which corresponds to a €25.9  million or 3.8  percent decrease year on year. This is due primarily to focusing on core business.

Economic report

31MANAGEMENT REPORT OF THE SENNHEISER GROUP

€ millionsChange from previous year, in percent/in € millions

2012 2013 2014 2015 2015* 2016*

- €25.9m

* Initial application of the provisions of the Accounting Directive Implementation Act (BilRUG) for fiscal year 2016. The figure for 2015 was adjusted accordingly to improve comparability.

700

650

600

550

500

450

400

0

200

584.4+ 10.0 %

590.5+ 1.0 %

634.8+ 7.5 %

682.2+ 7.5 %

684.3+ 7.8 %

658.4- 3.8 %

32

TURNOVER BY REGION

The Sennheiser Group generated turnover of €131.4  million in the APAC (Asia and Australia) region, which is down €15.9  million or 10.8  percent on the previous year. The decline is due primarily to the end of a special situation in Japan. The Japanese government stopped subsidizing up-grades of wireless microphone systems at the end of the first quarter, as announced. The subsidies had a positive effect on turnover especially in reporting year 2015.

Turnover in the Americas region (North, Central and South America) stood at €168.8  million, which corresponds to an €11.0  million or 6.1  percent decrease year on year. The reason for this is fierce competi-tion that has also expanded to the Sennheiser Group’s previous growth segments.

The EMEA region (Europe, Middle East and Africa) experienced slight growth in turnover to €358.2  million, which corresponds to a €1.0  million or 0.3  percent increase. In particular, development of the British pound, which depreciated in value against the euro over the course of the year, had a limiting effect.

33MANAGEMENT REPORT OF THE SENNHEISER GROUP

168.8AMERICAS

- 6.1 %358.2EMEA

+ 0.3 %131.4APAC

- 10.8 %

Turnover 2016 in € millionsChange from previous year in percent

103.2GERMANY

- 2.5 %

153.0 179.8 168.8

2014 2015 2016

- €11.0m

349.2 357.2 358.2

2014 2015 2016

+ €1.0m

132.6 147.3 131.4

2014 2015 2016

- €15.9m

* Initial application of the provisions of the Accounting Directive Implementation Act (BilRUG) for fiscal year 2016. The figure for 2015 was adjusted accordingly to improve comparability.

Turnover per year in € millionsChange from previous year

34

PROFESSIONAL SYSTEMS€316.3m

48.0 %- 9.1 %

CONSUMER ELECTRONICS€342.1m

52.0 %+ 1.7 %

€658.4m

TURNOVER BY BUSINESS DIVISION

The Professional Systems Division generated turnover of €316.3  million in fiscal year 2016, which corresponds to a €31.7  million or 9.1  percent decrease year on year. This decline can be explained primarily as a result of focusing on core business: Firstly, exiting the aviation segment had a negative impact on turnover development. Secondly, the group ended relationships in the reporting year with third-party brands. A third reason for the decline was the scheduled end to government subsidies for wire-less microphone systems in Japan.

In contrast, the Consumer Electronics Division posted gains, generating turnover of €342.1  million. Compared to the previous year, growth was somewhat more subdued at €5.8  million or 1.7  percent. The key driver was the Call Center & Office (CC&O) segment, which continued its pos-itive trend. In particular, the new models for the HD 4 product family and the PXC 550 Wireless also contributed towards the rise in turnover.

The Sennheiser Group generated €2.0  million through performing services, such as repairs and installations. This turnover used to be included in other operating income. However, due to the first-time application of the German Commercial Code [Handelsgesetzbuch − HGB] in accordance with the German Accounting Directive Implementation Act [Bilanzricht-linien-Umsetzungsgesetz − BilRUG], the Sennheiser Group has reported it separately for the first time. Disclosures of the items in the previous year have been adjusted accordingly.

35MANAGEMENT REPORT OF THE SENNHEISER GROUP

AssetsThe Sennheiser Group’s balance sheet total as of December  31, 2016, stood at €419.4  million, which corresponds to a €12.4  million or 2.9  percent decrease compared to December  31, 2015. Fixed assets rose slightly by €0.6  million to €64.8  million. This is attributable to the approx-imately constant investment activity year on year. Receivables and other assets decreased moderately and in proportion to the €4.5  million decline in turnover to €141.9  million. Inventories increased by €13.5  million to €117.4  million. These developments are reflected accordingly in the decline in cash and cash equivalents.

The decrease in payables and provisions is largely due to lower turnover and pension provisions, which went down from €90.6  million in the previ-ous year to €87.7  million in the reporting year.

POSITION OF THE SENNHEISER GROUP

Results of operationsDespite the drop in turnover, the Sennheiser Group significantly increased its earning power in the fiscal year, with earnings before taxes increasing by €4.6  million year on year to €34.9  million in fiscal year 2016.

Lower material, personnel and other operating expenses had a positive effect on the results of operations. As a result of lower investments in the previous years, amortization and depreciation on fixed assets fell in the current reporting year. Amortization and depreciation will continue to rise along with the shift toward increasing investment activity.

InvestmentsTotal investments in fixed assets of the Sennheiser Group amounted to €18.1  million and related largely to the implementation of the strategy to expand the product portfolio.

The group’s investments in property, plant and equipment totaled €14.0  million for fiscal year 2016.

36

Research and development activities

The creation of innovative products that are geared towards customers’ needs and can be produced economically is the objective of research and development activities at Sennheiser. Sennheiser has pooled these activities in four research and innovation centers:

► Sennheiser Audio Labs in Waldshut-Tiengen (Germany), with a focus on digital signal processing (DSP) and 3D audio

► Sennheiser Innovation in Zurich (Switzerland), specialized in trend research as well as the development of scenarios and innovative concepts for the future for the entire group

► Sennheiser Technology & Innovation in San Francisco (USA), for 3D audio, speech processing and sound control sensors; the center collaborates closely with partners in Silicon Valley

► Sennheiser Consumer Electronics in Singapore, which is responsible for product development based on current consumer trends

Thanks to the Innovation Campus in Wedemark, the audio specialist has the industry’s most state-of-the-art innovation center. The company thereby also underscores its objective to decisively shape the future of the audio industry.

In 2016, 385  employees worldwide worked in research and development (previous year:  354). The Sennheiser Group’s expenditure on related ac-tivities increased by 16 percent year on year to €54.5  million. As a result, research and development expenses in relation to turnover amounted to 8.3  percent. The Sennheiser Group applied for 19 new patents in the reporting year. Overall, the company holds patents issued for 164 of 266 inventions filed for patents (patent families).

ResearchThe Sennheiser Group pursues corporate research projects in all busi-ness areas. Its 3D audio activities are pooled in the AMBEO brand. The objective is to offer customers a completely new immersive experience of sound. The group is developing a product portfolio for this purpose that covers the entire signal chain, from recording, mixing and processing to playback.

Activities in the field of wireless transmission systems focus on best leveraging the potential of existing and future mobile telecommunications systems for professional and semiprofessional wireless microphone sys-tems. Another aim is to develop completely new concepts in the field of digital wireless systems.

Development The Professional Systems Division expanded its portfolio by adding new solutions. For example, the SpeechLine Digital Wireless series launched in the first quarter of 2016. The series comprises wireless microphones for corporate use requiring straightforward setup and secure, encrypted transmission.

37RESEARCH AND DEVELOPMENT ACTIVITIES

* patent families

EMPLOYEES

385in Research and Development

19 New patent applications

in 2016

INVENTIONS ANDPATENTS

266

Different inventions*

164Inventions*with issued

patents

INVESTMENTS

+ 16 %Share of turnover: 8.3 %

54.5 m€

RESEARCH ANDDEVELOPMENT CENTERS

GERMANY

3D audio and digitalsignal processing

USA

3D audio,speech processing andsound control sensors

SWITZERLAND

Trend research,innovative

future conceptsand design

SINGAPORE

Product life cycle,customer retention

and product development

38 RESEARCH AND DEVELOPMENT ACTIVITIES

Over the course of the first half of the year, the division launched prod-ucts for professional meetings, including TeamConnect Wireless, which has received multiple awards for its design. Thanks to its four satellites, TeamConnect Wireless is perfectly suited for online meetings of 4 to 25 people and offers multiple connectivity options for all kinds of telecom-munication devices. The TeamConnect Ceiling conference solution was introduced at the same time. It is a permanently mounted ceiling micro-phone that can be flexibly adjusted to the setup of the space and needs of the speakers. Deliveries of the EK  6042 two-channel camera receiv-er began in the second half of the year. The system offers top audio and transmission quality with a compact design featuring a slot format for professional cameras.

Development activities in the second half of 2016 also resulted in numer-ous product launches at the beginning of 2017, including the new D  6000 digital wireless microphone system. The Professional Systems Division also prepared the release of the XS Wireless 1 and 2 models, which are geared toward new users and cover the lower price segment. In addition, Sennheiser will be launching the first consumer product under the AMBEO umbrella brand in summer 2017: the AMBEO SMART HEADSET.

The Consumer Electronics Division has focused its development efforts on wireless signal transmission, since demand for wired devices is falling. The new products include the PXC  550 Wireless travel headphones, which feature such functions as adaptive noise cancellation and intuitive pairing through near field communication (NFC). The division also intro-duced the HD  4 series in fiscal year 2016 and added wireless versions.

With the launch of the benchmark HE  1 headphones in summer 2016, Sennheiser has underscored its claim to leadership in shaping the future of the audio industry. The successor to the legendary Orpheus, introduced in 1991, boasts the finest materials and superb acoustic per-formance. Another special feature is the exclusive concierge service that provides customers with utmost convenience across the entire process from ordering to delivery and installation.

The Sennheiser Group also launched CapTune™, which is an app geared especially towards consumers. It combines a wide range of functions for audiophiles, from a music player and sound tuning to device control. At the same time, the app ensures the greatest possible compatibility with various devices, transmission technology and formats.

39

Development in number of employees

3.6  percent on 2015. An average of 51  percent of all employees worked for companies in Germany and the other 49  percent for companies abroad. Personnel expenses decreased by 4.9  percent in total, which was largely due to significantly lower additions to pension provisions.

The Sennheiser Group employed an average of 2,725  people in 2016, which corresponds to a 1.8  percent increase. The number of trainees worldwide totaled 69, compared to 76 the previous year. At the end of the year, headcount at the Sennheiser Group stood at 2,826, which is up

64 % men

36 % women

women inmanagement22 %

2,725

average number of employees in 2016

69 traineesworldwide

Germany

1,382Abroad

1,343

EMPLOYEES

40 HEADCOUNT DEVELOPMENT

Number of employeesChange from previous year in percent

2,800

2,600

2,400

2,200

2,000

2012 2013 2014 2015 2016

2,329+ 6.7 %

2,542+ 9.1 %

2,600+ 2.3 %

2,675+ 3.0 %

+ 50 employees

2,725+ 1.8 %

41

Outlook, risk and opportunities report

OUTLOOK REPORT

Development of the electrical and electronics industry in GermanyOverall, the Sennheiser Group expects to see stable development in the electrical and electronics industry in 2017 as well. Zentralverband Elektro-technik- und Elektronikindustrie [German Electrical and Electronic Manu-facturers’ Association − ZVEI] forecasts slight growth in turnover of 2  per-cent in the current year. The industry also anticipates moderate export volume growth rates. The increasingly uncertain development of the glo-bal economy will have a major impact on future business opportunities. The Sennheiser Group therefore regards the ZVEI’s forecast as realistic. Outlook for future developmentGlobal economic growth will remain modest in 2017. Compared to the previous year, economic risks have increased once again. The protection-ist tendencies of individual countries are contributing to this trend. For example, the pending exit negotiations between the United Kingdom and the European Union will occupy member states well beyond 2017 and create uncertainty in the eurozone. The policies of the new administration in the United States remain difficult to assess, which is leading economic players to adopt a wait-and-see approach. The conclusion of the free trade agreement between the EU and Canada (CETA) in February 2017 sent an opposite message, although it is currently hard to gauge what opportunities will arise from this. The Sennheiser Group therefore does not expect to see positive stimuli for the global economy in the short term − or consequently for its business development opportunities.

In light of the global economic situation, the Sennheiser Group contin-ues to benefit from its global positioning. Limiting factors in some regions can thus be offset by positive effects in other markets. However, growing global economic risks are increasingly limiting the group’s leeway to act. Nonetheless, the company firmly believes that the structural expansion and innovation of the Group will also contribute towards a strengthened emergence from these periods in the future.

Outlook for turnover and results of operationsDue to the large number of new, innovative products and technologies, as well as the high share of the Sennheiser Group’s turnover attributable to the Asian market, slight turnover growth can be expected in the years ahead. In particular, the growing trend towards wireless products for both professionals and private consumers validates the investments in research and development activities in recent years.

The continued consolidation of structures and procedures in both divi-sions in fiscal year 2016 made business processes more dynamic. These consolidation efforts will proceed in 2017 as well. This is strengthened by the fact that the workflows at Sennheiser are being geared even more systematically towards markets and customers.

The volatility of the euro in relation to other major global currencies will have a significant impact on the future development of earnings at the Sennheiser Group. The company is working towards ensuring that emerg-ing signs of slower global economic growth will continue not to negatively impact earnings development. As a result, it expects to see a slightly pos-itive development in earnings before taxes in 2017.

42

RISK REPORT

Risk management systemIn the reporting year, the Sennheiser Group finalized the description of the risk management process applicable to all organizational units. In doing so, the company has further strengthened its framework for sys-tematically analyzing, assessing and managing potential risks. According to the setup, every organizational unit is responsible for detailing its own risk register, which it then must use to establish countermeasures for managing risks. The purpose is to identify and avert potential damage to the company at an early stage. All registers are centrally coordinated and aggregated so the Executive Management Board has an overview at all times of the most significant risks and the measures being taken to manage them.

Within the scope of independent audits, the Audit Department monitors the individual corporate entities with regard to early risk identification and compliance management by performing random inspections. The Executive Management Board is informed directly and immediately of the findings.

RisksThe risk situation has not changed considerably from the previous years. The key issues here remain the interruption of business operations due to physical damage, procurement risks for certain parts and components, product conformity risks and IT security. Countermeasures are being devel-oped and adopted within the framework of the risk management system.

Property, business interruption, liability and transport insurance policies protect the Sennheiser Group against inventory-related risks customary in the industry. Effective customer management and a global trade credit insurance policy minimize the impact of potential defaults on receivables.

Fluctuations in those trading currencies that are important to the Sennheiser Group have a substantial impact on the results of operations. However, the effects frequently offset each other as a result of contrary developments and compensatory transactions with respect to procure-ment and sales in the same currency. Hedging instruments for hedging against fluctuations in exchange rates are only used in isolated cases.

The Sennheiser Group also has a comprehensive controlling system that regularly monitors performance using predefined key performance indi-cators. The system makes it possible to keep tabs on business processes and quickly take steps to counter any deviations.

43OUTLOOK, RISK AND OPPORTUNITIES REPORT

OPPORTUNITIES REPORT

The Sennheiser Group’s innovative strength is focused on enhancing cus-tomer benefit in terms of products and services and on close consumer contact. One major opportunity for the company is the proactive identi-fication of future needs and technical applications. The aim to shape the future of the audio industry remains the same.

The 3D audio segment harbors great potential. The Sennheiser Group has already pooled its corresponding activities in the AMBEO umbrella brand and plans to continuously expand its efforts. Innovations in products and applications are created in close dialogue with users. Further enhancing awareness of the Sennheiser brand in the premium segment will also lead to more opportunities. To this end, the group began to shape Sennheiser’s brand world into an experience and to establish its own shops in 2016.

High-quality and technically sophisticated products for the perfect sound experience will continue to be the basis of the business model in the future. The Sennheiser Group’s highly qualified and motivated employees who openly face the challenge posed by rapidly changing working envi-ronments play a significant role in helping to shape this path.

Wennebostel, Germany, June 2017

On behalf of the Executive Management Board of Sennheiser electronic GmbH & Co. KG

Daniel Sennheiser and Dr. Andreas SennheiserCEOs of Sennheiser electronic GmbH & Co. KG

44

ASSETS

Consolidated balance sheet as of December 31, 2016

A. Fixed Assets

I. Intangible assets 12,999,217.32 11,939

II. Property, plant and equipment 49,542,748.17 50,285

III. Financial assets 2,231,519.72 1,950

64,773,485.21 64,174

B. Current Assets

I. Inventories 117,440,346.90 103,955

II. Receivables and other assets 141,892,670.67 146,392

III. Cash and Cash equivalents 73,077,611.00 98,076

332,410,628.57 348,423

C. Accruals and deferrals 6,268,580.18 5,610

D. Deferred taxes 15,956,527.51 13,561

419,409,221.47 431,768

2016 in € 2016 in € previous year in t€

45CONSOLIDATED FINANCIAL STATEMENTS 2016

LIABILITIES

A. Equity 100,713,111.24 93,818

B. Provisions 142,933,429.82 152,245

C. Liabilities 175,727,972.15 185,524

D. Accruals and deferrals 34,708.26 181

419,409,221.47 431,768

2016 in € previous year in t€

46

* Initial application of the provisions of the Accounting Directive Implementation Act (BilRUG) for fiscal year 2016. The figure for 2015 was adjusted accordingly to improve comparability.

Consolidated profit and loss statement for fiscal year 2016

1. Sales revenue 658,410,105.45 684,268 682,214

2. Increase in the inventory of finished and semi-finished products 9,249,475.23 2,111 2,111

3. Other own work capitalized 3,016,828.30 2,351 2,351

670,676,408.98 688,730 686,676

4. Other operating income 19,971,046.02 71,835 73,889

690,647,455.00 760,565 760,565

5. Raw materials and consumables 261,932,215.71 274,891 274,891

6. Personnel costs 191,740,074.74 201,524 201,524

7. Depreciation 16,339,686.40 17,092 17,092

8. Other operating expenses 182,615,203.66 231,903 231,903

9. Financial result -3,144,098.20 -4,829 -4,829

10. Taxes 8,179,341.62 10,534 10,534

11. Net profit for the year 26,696,834.67 19,792 19,792

2016 in € previous year in t€ * previous year in t€

47CONSOLIDATED FINANCIAL STATEMENTS 2016

1 Profit transfer agreement with Sennheiser electronic GmbH & Co. KG, Wennebostel, Germany2 Included in the annual financial statements of Sennheiser New Mexico LLC, Albuquerque, USA3 Included in the annual financial statements of Sennheiser Australia Pty Ltd., Chatswood, Australia

ConsolidationFull consolidation

Sennheiser electronic GmbH & Co. KG, Wennebostel — EUR 5,200

Georg Neumann GmbH, Berlin, Germany 100.0 EUR 800 1

K + H Vertriebs- und Entwicklungsgesellschaft mbH, Wedemark, Germany 100.0 EUR 25 1

Sennheiser Audio Labs GmbH, Wedemark, Germany 100.0 EUR 25 1

Sennheiser Consumer Electronics GmbH, Wedemark, Germany 100.0 EUR 12,067 1

Sennheiser New Mexico LLC, Albuquerque, USA 100.0 USD 5,000

Sennheiser Manufacturing USA Corp., Albuquerque, USA 100.0 USD 2

Sennheiser Bondholding Company LLC, Albuquerque, USA 100.0 USD 2

Sennheiser Global Operations GmbH, Wedemark, Germany 100.0 EUR 3,501

Sennheiser Audio OOO, Moscow, Russia 100.0 RUB 3,340

Sennheiser Australia Pty Ltd., Chatswood, Australia 100.0 AUD 0

Sennheiser New Zealand Ltd., Auckland, New Zealand 100.0 NZD 3

Sennheiser Austria GmbH, Vienna, Austria 100.0 EUR 35

Sennheiser Belux B.V.B.A., Zellik, Belgium 100.0 EUR 150

Sennheiser (Canada) Inc., Pointe-Claire, Canada 100.0 CAD 230

Sennheiser Electronic Asia Pte. Ltd., Singapore 100.0 USD 338

Sennheiser Electronic Corporation, Old Lyme, USA 100.0 USD 2

Sennheiser Electronics (Beijing) Co., Ltd., Beijing, China 100.0 CNY 6,856

Sennheiser Electronics India Private Limited, Haryana, India 100.0 INR 70,000

Sennheiser France SAS, Ivry sur Seine, France 100.0 EUR 305

Sennheiser Hong Kong Ltd., Hong Kong, China 100.0 HKD 10

Sennheiser Japan K.K., Tokio, Japan 100.0 JPY 90,000

Sennheiser Mexico S.A. de C.V., Mexico-City, Mexico 100.0 MXN 215

Sennheiser Nederland B.V., Almere, Netherlands 100.0 EUR 180

Sennheiser Nordic A/S, Copenhagen, Denmark 100.0 DKK 1,000

Sennheiser (Schweiz) AG, Urdorf, Switzerland 100.0 CHF 1,000

Sennheiser UK Ltd., Marlow, UK 100.0 GBP 210

Sennheiser Guangzhou Ltd., Guangzhou, China 100.0 CNY 2,000

Sennheiser Media AG, Urdorf, Switzerland 100.0 CHF 100

Sennheiser Streaming Technologies GmbH, Wedemark, Germany 100.0 EUR 25 1

Sennheiser Vertrieb und Service GmbH & Co. KG, Wedemark, Germany 100.0 EUR 1,000

Proportionate consolidationSennheiser Communications A/S, Copenhagen, Denmark 50.0 DKK 2,000

Size of holding in percent CurrencyShare of capital

in thousand units

www.sennheiser.com

Publisher Sennheiser electronic GmbH & Co. KG, Wedemark, GermanyDesign designagenten, Hanover, GermanyProduction Quensen Druck + Verlag GmbH, Hildesheim, Germany

Contact Sennheiser electronic GmbH & Co. KGAddress Am Labor 1, 30900 Wedemark

Contact Person Mareike Oer, Global Public Relations T +49 5130 600-1719 mareike.oer@sennheiser.com

Sina Denecke, Global Public Relations T + 49 5130 600-7029 sina.denecke@sennheiser.com

Photo Credit Courtesy of the Pink Floyd Exhibition – (p. 9 – 10 ) Their Mortal Remains

www.sennheiser.com