Matth. Hohner AG

Group Management Report for Fiscal Year 2010/2011
Sales Development – Other Instruments
Compared with the prior year, segment sales increased by TEUR 180 (+3.1 %) to TEUR 6,035. The share
of this segment in total sales hence amounts to 9 % (prior year 10 %). After elimination of the exchange
rate effects, sales slightly increased by TEUR 51 (+0.9 %). While sales with digital pianos and pianos (+20
%) could significantly be increased, sales with amplifiers (-73 % - due to the effects for a full year of the
discontinuation of the distribution for the “Laney” brand in the USA), stands (-8 %) and other merchandise
(-11 %) decreased.
The US market share in the segment sales amounted to 23 %. Mainly due to the effects for a full year of the
discontinuation of the Laney distribution sales decreased by about 25 % adjusted for exchange rate effects.
On the European market (75 % share of segment sales 2010/2011) sales could be increased by about 13 %
mainly due to the recovery of digital-pianos and pianos.
With a share of about 2 %, the remaining markets (Germany, Asia, Africa as well as South- and Central
America) play a minor role in this segment. However, sales decreased by about 9 %.
Due to the deviating market recovery in France with digital pianos and pianos, a sales growth of about 7 % is
expected for the fiscal year 2011/2012.
Capital Investments
Capital investments of the Group increased from TEUR 593 to TEUR 609. Furthermore, capital goods in an
amount of about EUR 0.2 million were ordered at Hohner Musikinstrumente GmbH & Co. KG in the past fiscal
year, but will only be delivered during the new fiscal year. The focus was on replacement in factory and office
equipment as well as in expansion investment for quality improvement
• 2 Results of Operations
The analysis of the results of operations is performed according to the gross yield of the individual segments,
all other expenses and income as well as the taxes on income.
Gross Yield of the Business Segment Wind Instruments
Due to a stringent cost management and a moderate price increase the gross yield related to total output
(sales and variance of inventory) of 59 % could be maintained on previous year’s level (60 %) and cost
increases could effectively be dealt with. Threatening price increases due to material and labor costs as well as
delivery bottlenecks in the purchase countries will also be challenging in the new fiscal year.
Gross Yield of the Business Segment Percussion Instruments
The gross yield of the segment percussion instruments decreased by EUR 0.2 million to EUR 7.1 million
compared to the prior year. Gross yield related to total output (sales and variance of inventory) amounts to
40 % after 45 % in the prior year. The decrease of the percentage gross yield was mainly due to the negative
influences of the USD exchange rate as well as to the strong price pressure in this segment. Some competitors
try to strengthen their position with significant price reductions for regular products and favorable special
series for selected markets.
Gross Yield of the Business Segment Stringed Instruments
Compared to previous year, the gross yield for stringed instruments increased by EUR 0.6 million to EUR 3.0
million due to an increase in sales revenue (about 29 %). Gross yield related to total output (sales and variance
of inventory) amounts to 28 % after 30 % in the prior year. The decrease of the percentage gross yield was
mainly due to price increases from suppliers’ side which were not completely passed on to the customers, as
well as added costs of compliance with delivery dates.
Gross Yield of the Business Segment Other Instruments
Gross yield of the segment other instruments decreased by EUR 0.1 million to EUR 1.8 million compared to
the prior year. Gross yield related to total output (sales and variance of inventory) amounts to 29 % after 32
% in the prior year. The decrease of the percentage gross yield was mainly due to the negative impacts of the
JPY-exchange rate as well as of the unfavorable product mix.
Group ManaGeMent report Group ManaGeMent report
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