STRATEGY AND BUSINESSES
Strategy and businesses
Hearing is universal, yet deeply individual. Hearing loss is a worldwide issue, yet also an intensely personal challenge. Sonova’s mission is to apply the expertise, resources, and commitment of a leading global hearing-care company to address each person’s specific needs, providing innovative, targeted solutions to help ever more people enjoy a life without limitations.
The Sonova Group
The Sonova Group is a vertically integrated hearing health business, focused on building, expanding, and sustaining relationships with consumers – and the hearing care professionals who support them – throughout their hearing journey. The Group’s range of products, solutions, and services addresses every type of hearing loss at all ages, and is provided through a broad spectrum of marketing and sales channels. Our innovation cycle continuously matches evolving consumer needs with technology advances, ensuring that each new product provides a significant improvement in the quality of hearing experience.
Our four core businesses share their expertise, innovation, and market knowledge to deliver this comprehensive offering. Hearing Instruments regularly sets new benchmarks in sound quality, comfort, and convenience through a succession of technology platforms, harnessing major step-changes in chip design, sensors and electronics, software, and connectivity to power new generations of hearing aids, wireless communication devices, and healthy living solutions. Audiological Care serves consumers in key markets around the world directly, meeting their needs through our full range of products, supported by deep professional expertise and delivered through multiple points of interaction, in-store, online, and by phone. Cochlear Implants extends our reach to include people with the most significant hearing loss, putting our skills in sound quality and processing at the service of those for whom a hearing aid is not enough.
The fourth core business, launched this past financial year, is Consumer Hearing, which was established through combining the consumer division of Sennheiser with our own consumer hearing activities. This Consumer Hearing Business supports an essential element of Sonova’s strategy: to reach ever more consumers, wherever their journey towards better hearing begins. Sennheiser’s strong, globally-recognized brand, established consumer sales channels, and proven track record in audiophile-quality headphones and True Wireless hearables combine seamlessly with Sonova’s comprehensive expertise in audiological performance and miniaturization, enabling exciting new product families that combine the key functionalities of headphones and hearing aids to meet the needs of consumers who want to continue to enjoy the best of hearing.
A strategy that delivers
We continuously review our strategy, and see that it still serves our purpose well. Despite the disruptions of a global pandemic and a recovery at varying speeds, our initiatives to support organic growth – leading innovation in audiological performance, expanding our omni-channel audiological care network, extending our reach through value-adding partnerships, and investing in high-growth markets – continue to bear fruit both in terms of revenue and profitability. Our structural optimization projects are largely completed and our emphasis on continuous process improvement – now ingrained in Sonova’s culture as the Sonova X Business System of improvement principles, initiatives, and tools – is delivering the year-on-year efficiencies that free up funds to invest into further growth initiatives.
Driving growth through consumer relationships
Our growth investments are concentrated in five broad areas: advancing our innovation leadership, expanding our consumer and medical solutions, broadening our consumer access, delivering sales-and marketing excellence, and accelerating in high-growth markets. Each of these investments – whether it is in the acquisition of what is now our Consumer Hearing business, or rolling out our new IT infrastructure in Audiological Care, or strengthening our sales presence in China – brings us closer to more consumers, generating valuable relationships, market knowledge, and data that will help to drive our business forward, not just this year but for the years to come.
We have therefore committed significant capital in this financial year to support this strategic focus: we spent a total of around CHF 600 million on acquisitions, adding an expected 15% to our annual sales and increasing the number of our employees by around 10%. This included not only the Sennheiser consumer division, but Alpaca Audiology, a major audiological care network that doubles the footprint of our Audiological Care business in the US market, and a variety of bolt-on acquisitions to expand the geographic footprint of our Audiological Care business.
Driving innovation in our products and solutions
As part of our growth investments, we are continuing to step up our R&D spending, expanding our mobile app capabilities, building our competence in artificial intelligence and sensors, and continuing the development of our proprietary processing and connectivity chip technology.
This financial year saw the continued worldwide success of the family of hearing instruments based on Phonak’s Paradise platform, which has set new standards for listening comfort, speech intelligibility, and ease of use. We have sustained its sales momentum with Paradise 2.0, a range of innovative enhancements including Audéo Life, the world’s first waterproof rechargeable hearing aid, and ActiveVent™, the first intelligent hearing aid receiver, which automatically adjusts to provide significantly better sound and understanding in noisy environments. Our Naída™ Marvel CI and Sky CI™ Marvel sound processors have delivered a new level of sound quality to cochlear implant patients, driving substantial consumer demand.
In our Audiological Care network, we are expanding the services we offer to address more medical needs beyond better hearing, including tinnitus support and cognitive as well as balance training. These services complement the increasing use of sensors in our products, such as the soon-to-be-launched Audéo Fit, the world’s first hearing aid with heart rate tracking, which allows all the cardiac fitness features of a smart watch to be included in our myPhonak hearing app.
ESG: an integral part of our business success
We are convinced that a good environmental, social, and governance (ESG) performance is an important cornerstone of our business and our continued success. We intend to continuously improve our ESG performance indicators with the same focus and intensity as we do our financial ones, and are therefore pleased that major rating agencies and sustainability indices continue to confirm our leading performance in these areas. For example, Sonova ranked third in our category in the 2021 Dow Jones Sustainability Index and received a score of ‘A-‘ in the 2021 CDP assessment, which puts us in the top 10% of our industry.
Sonova’s enhanced ESG strategy, IntACT, was launched in early 2021, incorporating a new range of measurable commitments. Such ESG metrics continue to be included in the targets for the Management Board’s variable cash compensation. We have made good progress in many areas, but know that there is still a lot of work to be done; we therefore have plans to take tangible, measurable actions in all four aspects of our ESG strategy during the coming year. These are described in our extensive annual ESG Report which you can read here, and which is published as part of our commitment to transparency and data-driven disclosure in this field.