STRATEGY AND BUSINESSES

Sonova’s Cochlear Implants business, which operates through the Advanced Bionics brand, is a global provider of innovative solutions for those with severe or profound hearing loss. Some consumers have a hearing loss, appearing in childhood or later in life, that goes beyond what a hearing aid can treat; for these consumers Sonova provides its range of cochlear implants.

A hearing aid improves hearing through sophisticated, targeted amplification of the acoustic signal whereas a cochlear implant bypasses the ear and directly stimulates the hearing nerve. A sound processor behind the ear captures sound and converts it into an electronic signal transmitted to the implant: this means that we can leverage the innovations in digital sound processing and connectivity that we develop for our Hearing Instruments business to drive improved performance in our cochlear implant systems. The Cochlear Implants business therefore works in close R&D partnership with Phonak, Sonova’s premium hearing instrument brand, to bring its recipients the benefits of the latest breakthroughs in hearing technology.

Deciding to have a cochlear implant is a major commitment for the recipient and the recipient’s family. We therefore make every effort to establish strong relationships with our consumers, with the audiologists who serve them, and with the surgeons and clinics who perform the implantation. We have reinforced our commitment to product quality and reliability, and we have the processes in place to further raise our operational and commercial excellence.

Innovation driving strong recovery

This financial year has seen the introduction of our new Naída™ CI Marvel and Sky CI™ Marvel systems, which bring the breakthrough features of Phonak’s Marvel platform – automatic adjustment to different listening environments with AutoSense™ OS 3.0, universal Bluetooth® connectivity, hands-free phone calling, integrated RogerDirect™ wireless communication – to adult and child recipients.

The response from consumers and hearing care professionals has been overwhelmingly positive. The re-order rate in North America alone has been a remarkable 95%. Among consumers, 78% report significantly improved hearing performance – always important, but even more so in times of social distancing and mask-wearing ¹⁾. Audiologists praise the wireless connection to the Target CI fitting system, allowing touch-free adjustment in a familiar software program, very much like that which is used for Phonak hearing aids. Marvel gives existing CI users the opportunity to upgrade their technology, but has also attracted new users to Advanced Bionics, increasing consumer interaction and convincing potential recipients of the value of a cochlear implant.

Universal connectivity is particularly important for the Sky CI™ Marvel, which is the world’s first dedicated pediatric cochlear implant system. Children live connected lives and need easy access to all their digital life companions – especially at a time when so many classrooms are online. Easy, hands-free connection to phones, tablets, televisions, and remote learning platforms is a vital help during these key years of speech and social development. These meaningful innovations contributed to Advanced Bionics winning the 2021 Hearing Technology Innovator Award for Sky CI™ Marvel.

Extending market and consumer reach

There are many stakeholders in the cochlear implants business, and we understand the importance of engaging closely with all of them as an essential part of our commitment to commercial excellence. In our approach to clinics and hospitals in North America, we have increased our field staff by 20% in the past two years, and have redesigned our sales territories to increase contact frequency, support and depth. As a result, sales in the new territories grew at twice the rate of the old ones.

We have always considered existing and potential recipients and their families as a community, and strive to engage with them directly to help them identify the right solution. We host a range of online events and resources covering topics from technology to aural rehabilitation, helping those dealing with severe hearing loss to explore available solutions and make an informed decision. We also work with Sonova’s own Hearing Instrument and Audiological Care businesses to open new sales pathways by identifying potential recipients among our existing consumers. In Germany, 30% of new cochlear implant recipients were referred from Sonova partner businesses, and we are expanding this effort in other key markets too.

Strong operational progress

We are proud that the Cochlear Implant business has returned to profitable growth, posting not only a substantial revenue increase but double-digit EBITA margins for the first time. The structural and continuous improvements we have driven over the last three years, coupled with targeted growth initiatives, have borne fruit and will continue to do so. Our primary operational focus remains on what matters most to consumers: product quality and reliability. Over the past two years, we saw a reduction of more than 30% in processor return rates and we target a further significant reduction in the current year. The Marvel-based products have had the lowest return rates of any Advanced Bionics processor in the first year of its launch.

This reliability focus is built into the design and manufacturing process, and is complemented by a number of initiatives drawn from the Group-wide Sonova X Business System toolbox, which provides templates and metrics for a wide array of operational and commercial improvement opportunities. Having at the same time reinforced our leadership team with new members who bring strong medical device experience from various backgrounds, we are confident in our ability to earn and retain the loyalty of our consumers, offering them the highest standard of technology, service, and support.