Interacting with the world enriches our life, and hearing is essential for our ability to share our thoughts, interact and connect with friends, family and colleagues. In short, to be actively engaged without constraints. In 2021, we once again saw that our purpose to create life-changing differences through hearing health is more meaningful than ever. The developments of the past year confirm our belief that the activities of this global hearing healthcare and audio technology Group are essential for people to be present and act in the world. Whether it is about helping people with hearing loss through diagnosis, care and cutting-edge technology or collaborating by means of audio and video solutions.
Despite high ambitions from the beginning of the year, we upgraded our expectations of operating profit for the year three times in 2021, ending with a record-high EBIT. We can look back on a year where the Demant Group has proven healthy and where we once again showed that when we pull together, we stand strong as a Group. Let me illustrate our progress through a few highlights from our business areas in 2021.
Providing the best care
Hearing Care – our global network of clinics – performed very well in 2021, as we continued to develop and train our staff, benefitted from the harmonisation of brands, exploited digital opportunities and expanded our clinic network. Our work to refine Audika Group, which comprises our well-reputed brands Audika, Hidden Hearing and HearingLife, and to disseminate personalised hearing care resulted in very strong performances in almost all countries.
The good results in Hearing Care were firmly backed by the positive trends resulting from the French hearing healthcare reform, which offers a public/private treatment setting that has equal focus on quality by offering high-quality hearing aids and on quantity by helping more people. The success of the reform is a testament to the strong model of combining personalised care with state-of-the-art technology.
High standards for innovation
The year’s results were also lifted considerably by our innovation power in Hearing Aids. For the benefit of our customers and users, we completed the roll-out of premium products, Oticon More, Philips HearLink, Bernafon Alpha and Sonic Radiant, all based on a new technology platform. Towards the end of the year, we had shipped more than one million premium hearing aids powered by an onboard Deep Neural Network that mimics the way the brain works – a major advancement in artificial intelligence in hearing aid technology, I am proud to say. We are now looking forward to expanding and completing the product families, enabling us to help even more people hear better and experience the joy of a rich soundscape.
Market leader in Diagnostics
Having performed well for many years, our Diagnostics business has seen very positive development in 2021. If we look at the different areas, particularly balance equipment, hearing aid fitting equipment as well as service and calibration stood out in 2021 and contributed to the further consolidation of our Diagnostics business area as market leader.
Committed to high quality
Up until the fourth quarter, Hearing Implants focused largely on product launches, most prominently the very successful introduction of Ponto 5 mini, the world’s smallest bone anchored sound processor, and on the Food and Drug Administration’s approval of our cochlear implants system Neuro in the US. In the second half-year, however, we had to shift focus in our cochlear implants business, and for the first time ever, the Group performed a voluntary field corrective action in relation to performance issues in a small subset of cochlear implants.
We recalled a number of non-implanted Neuro Zti cochlear implants and by doing so, we stayed true to the Group’s commitment to only deliver products of the highest quality. We deeply regret the inconvenience this has caused our stakeholders and users, but we have done our utmost to handle the situation, and after having identified the root cause, we have initiated the implementation of a solution to the issue.
Expanding the business
Our plans for the Communications business area revolve around expanding the business in several markets by establishing the EPOS brand as a strong premium brand in audio and also by offering video collaboration solutions. Our ambitious plans for EPOS are intact in a long-term perspective, but in a short-term perspective, they have turned out to be more difficult to realise than anticipated, so, on the back of an exceptional 2020, we saw a decline in revenue in 2021, albeit with an increase in the number of orders towards the end of the year.
Sustainability progress
At Demant, sustainability is embedded in our solutions and culture: Our core commitment to society is to help people overcome hearing loss and improve their quality of life through care and innovative solutions. Our priority in 2021 has been to continue to implement our sustainability strategy and to further develop our two main priorities, diversity and climate action. Sustainability is becoming an increasingly integrated part of the way we work, which can be illustrated by the progress we have made with our two main priorities:
We aspire to have zero environmental impact by 2050, and in 2021, we committed to the Science Based Targets initiative. With this Annual Report, we disclose our ambitious targets to reduce greenhouse gas emissions: By 2030, we must reduce our carbon footprint from own direct and indirect emissions by a minimum of 50% from a 2019 baseline year. We have also taken ambitious steps to assess and disclose emissions from our entire value chain, which gives us a platform for submission of our targets and for validation of the targets against the Science Based Targets initiative in 2022.
The promotion of diversity was high on our agenda in 2021. The Demant Group employs a diverse group of people from all parts of the world and with many different backgrounds, and our ability to embrace the strengths that this diversity brings to the table is one of the pillars of our success. Our key achievement in 2021 was the development of a diversity, equity and inclusion programme, which will – along with an inclusion survey – form the basis of policy-making and target-setting in the area of diversity in 2022.
An aspect of inclusion is to succeed in promoting a unique culture, and to that end, we have adopted new ways of organising and leading by introducing global guidelines on workplace flexibility in 2021. Developing and engaging employees is becoming increasingly important in relation to the recruitment and retention of talent, and also in this area, we keep increasing our focus and activities.
Positive outlook
We owe our customers, shareholders and employees a very special thank you for their tireless and impressive commitment and support in 2021.
Having now entered a new financial year, we continue, despite continuous coronavirus dynamics, to see a resilient hearing healthcare market with intact fundamental market drivers. In 2022, and in the years to come, we expect to see strong growth and market share gains.
With an ambition to become world-leading and a purpose to create life-changing differences through hearing health, we promise to keep delivering high-quality and individualised support to our users to enable them to get the maximum benefit of our solutions.
Søren Nielsen