Amplifon is the world leader in providing solutions for those affected by hearing loss, and is a trailblazer for Italian companies looking to expand their presence around the world through organic growth and acquisitions. Its Miracle-Ear subsidiary, for example, which became part of the Amplifon group in 1999, is the number one brand in hearing care in North America. Enrico Vita, CEO of Amplifon, discusses the company’s milestone 2015 results, which have continued into 2016, and how it aims to continue building stronger relationships with its customers.
What are the trends that will be marking the future of the industry?
First of all I will say that we are fortunate enough to be in an industry that is structurally growing. The growth in the last five years was between 4% and 5% and we expect this kind of trend to continue also in the next five years.
This kind of growth rate is supported by some key structural trends. Demographics play a central role, especially in the US, where the baby boomers have just started to arrive and knock on the doors of our stores. Another important driver is the increasing penetration because overall, the penetration of the hearing solutions amongst those who suffer from hearing loss is still very low, between 20% and 25%.
Increased penetration is supported by higher awareness on the one hand, but also improvements in technology on the other, as hearing devices are better and better performing.
We believe that the way we can communicate with our customers can play an important role. In fact we are going to invest significantly in terms of marketing in the next few years, in order to communicate more and better with our customers and help them to take the decision of adopting a hearing solution. In fact, we are going to increase our marketing investment in the next three years by at least 10% per year.
When it comes to Amplifon, can you please give our readers a little bit of feedback regarding its genesis and evolution?
Amplifon was founded by Charles Holland in 1950. It’s a 66-year-old company and I have to say that the main characteristic of this company since the beginning was the ambition. What I mean is the ambition to grow, the ambition to play in a competitive environment, which was first Italy, secondly Europe, and then the world.
The growth of this company has been characterized by many different acquisitions starting first in Europe. Amplifon was one of the first companies in Italy to go beyond Europe and actually willing to compete on a global market.
What are the most innovative solutions that you have introduced and what is your current investment in research and development?
One example was the adoption of digital hearing devices in Italy. We were the first player to introduce that to the Italian market. But I would say that our effort in terms of innovation is focused on the kind of service we provide, in terms of service level and service model. We strive to improve the experience of customers in the store in order to give them a perfect customized solution. The field in which we are investing considerably is our new service model called the Amplifon 360° Experience.
It is going in the direction of surprising our customers with an experience that they did not expect before entering the store in order to give them the perfect solution for their hearing loss. The kind of investment that we do is more focused on the training of our human capital. We believe that they are key in order to give the right experience to our customers. We invest every year between €7-€10 million globally for the training of our employees.
You recently launched a new brand identity. What is your personal perspective and what is the meaning of your new tagline?
The new brand is part of a new marketing strategy that we have launched just this year with a new industrial plan. The aim is to strengthen even more the relationship with our customers in order to get more connected with them. Its goal is to establish a stronger emotion in the relationship because we do not want just to sell hearing aids, we want to provide an experience and service to our customers, which goes beyond the selling process.
Amplifon has been standing out of the crowd even financially speaking. Can you give us some financial highlights?
Absolutely, we had a fantastic 2015 as we grew 16% last year. More importantly, the kind of composition of the growth that we delivered was very healthy, because more than half of it was organic growth. It was more or less equally driven by the three regions in which we divide our business, namely Europe, Asia-Pacific and Americas. Actually, last year, for the first time we hit the €1 billion turnover rate.
We started 2016 in a very positive way as well, and in fact in the first quarter we grew by 12%, driven by all three regions again. In this case, 50% of our growth was also organic growth, which means that at the end of the day, it is not one region or a country that is driving the performance, but rather our business model which is working in all the markets where we operate.
From a global perspective, you said that you divide your areas of operation in Europe, Asia-Pacific and Americas. What is Amplifon’s global positioning in these regions?
We are the global leader with about 10% market share and we are number 1 or number 2 in almost all the countries in which we operate. We are the leader in Europe and co-leader in the US. We are also number 2 in Australia and number one in New Zealand. Amplifon is one of the few companies in Italy that is so widespread worldwide.
What is your personal vision about the key strengths of Italy and what is your vision about the future of the country?
I think that the strength of this country lies in the fact that every time it went into a crisis it has been able to come back in a strong way. The ambition to restart the process has always been in the DNA of this country. I think that Italy is already in track to fully recover from the crisis that we have been in the last few years.
The current government has introduced many changes in order to further reinforce this recovery for the coming years. I think Italy has got very good chances to restart a positive and sustainable path of growth.