Cochlear Limited · ASX:COH
Cochlear — Investor Day (October 2023)
114 slides from Cochlear's investor day presentation, Oct 27, 2023
Slide 1: Corporate strategy
Hear now. And always Corporate strategy Cochlear Capital Markets Day | 27 October 2023 Dig Howitt CEO & President This material is intended for analysts and investors © Cochlear Limited 2023 1
Slide 2: Acknowledgement of Country
Acknowledgement of Country Worimi, Welcome, On behalf of Cochlear, it is a pleasure to acknowledge the Wallumattagal Peoples of the Darug Nation, who are the Traditional Custodians of the Macquarie Park area. We would like to pay respect to Elders, both past and present and to leaders emerging.
Slide 3: Our mission
Our mission We help people hear and be heard. We empower people to connect with others and live a full life. We transform the way people understand and treat hearing loss. We innovate and bring to market a range of implantable hearing solutions that deliver a lifetime of hearing outcomes. 3
Slide 4: Agenda
Agenda Corporate strategy Dig Howitt CEO & President Product and services innovation Jan Janssen Chief Technology Officer Developing a treatment pathway for adults Dean Phizacklea SVP Global Strategic Marketing Cochlear’s US business Lisa Aubert President, Cochlear North America Manufacturing and su
Slide 5: Cochlear at a glance
Cochlear at a glance Business segments Global presence $1.9b 4.8k 53 % 58 Cochlear Implants* % Cochlear implant systems > ~ female gender balanced in sales revenue* across employees across workforce 180+ 50+ 6 countries countries 30 Services* % Sound processor upgrades, accessories and other Market
Slide 6: Growth opportunity
Growth opportunity Growing awareness of the cost-effectiveness and quality of life benefits of our products has the potential to underpin long- term industry growth. Hearing loss is prevalent and under- Cochlear implants are a cost-effective Cochlear implants can deliver superior treated solution fo
Slide 7: Growth opportunity
Growth opportunity Product indications are broadening and funding is expanding Good hearing is essential to healthy ageing Product indications and funding are expanding as payers increasingly recognise Hearing loss is particularly prevalent in people over the age of 60, with one in four suffering th
Slide 8: Key market segments
Key market segments Our efforts are targeted at improving awareness, expanding access and building on the clinical evidence that demonstrates the effectiveness of our products across four key market segments. Cochlear implants: Cochlear implants: Adults and Children in developed markets seniors in d
Slide 9: Our strategy
Our strategy A healthier and more productive society Grow the hearing implant market Delivering societal benefit through improved health Help at least 8% more people to hear each outcomes, educational cost savings and productivity year with a cochlear or acoustic implant. At Cochlear, we are strongl
Slide 10: A healthier and more productive society
A healthier and more Strategic priorities productive society Grow the hearing implant market • Strengthen the referral pathway for adults • Develop the acoustic implant segment • Broaden reimbursement and improve indications Delivering societal benefit • Expand access in emerging markets through imp
Slide 11: Strengthen the referral pathway for adults
Strengthen the referral pathway for adults Standard of care initiatives aim to establish a consistent process for diagnosing and referring adult cochlear implant candidates by all healthcare professionals • Adults and seniors in the developed markets provide our Key elements of developing a treatmen
Slide 12: Develop the acoustic implant segment
Develop the acoustic implant segment Cochlear Osia® System has the potential to become the first choice in acoustic implants, competing more effectively with reconstructive surgery while expanding geographically MAINTAIN TECHNOLOGY LEADERSHIP The only active bone conduction system that allows patien
Slide 13: Broaden reimbursement and improve indications
Broaden reimbursement and improve indications The economic benefits associated with cochlear implants extend beyond healthcare budgets with significant net economic gains to society from improved health outcomes, educational cost savings and productivity gains.* • Growing evidence of the cost-effect
Slide 14: Expand access in emerging markets
Expand access in emerging markets We are continuing to identify opportunities in emerging economies to grow the hearing implant market, with a focus on improving rates of implantation in children • Emerging markets represent ~20% of cochlear implant revenue • Growing rapidly as awareness of cochlear
Slide 15: A lifetime of hearing solutions
A lifetime of hearing Strategic priorities solutions Retain market leadership • Advance the product and services pipeline, with annual R&D investment of 12% of revenue • Deliver our latest sound processor upgrade technology to existing recipients Innovating to build a market- • Strengthen our lead i
Slide 16: Advance the product and services pipeline, with annual R&D investment of 12% of revenue
Advance the product and services pipeline, with annual R&D investment of 12% of revenue R&D investment strengthens our market- leading technology position and helps drive $2.7bn+ investment in R&D market growth since listing • Continued R&D investment at ~12% of revenue • Portfolio of 1,700+ patent
Slide 17: Providing a market leading portfolio of product and services
Providing a market leading portfolio of product and services Cochlear’s market-leading portfolio aims to improve hearing outcomes for recipients and provide a lifetime of hearing solutions. Our scale enables us to develop all aspects of the product and service portfolio, leading to improved outcomes
Slide 18: Deliver our latest sound processor upgrade technology to existing recipients
Deliver our latest sound processor upgrade technology to existing recipients The growing recipient base underpins growing demand for Services • In FY23 we delivered latest generation sound processors to over 48,000 prior generation cochlear implant recipients, up 19%, growing demand for Services whi
Slide 19: Strengthen our lead in customer service and support
Strengthen our lead in customer service and support Connected care is our vision for hearing Cochlear’s connected care solutions care – where Cochlear, the recipient and hearing care professionals work together Surgical Care In-clinic Care to ensure the right care is available at the Surgical Care s
Slide 20: Maintain high standards of product quality, safety and reliability
Maintain high standards of product quality, safety and reliability Our market-leading products are the result of our world-class manufacturing process and meet stringent, internationally recognised standards • Cochlear’s implants are the most reliable over time* • Our world-class manufacturing proce
Slide 21: Thriving people
Thriving Strategic priorities people A stronger organisation • Strengthen and nurture the organisational culture • Attract, develop and retain talent • Champion a culture of diversity and inclusion An engaged, capable, high- • Support the wellness and safety of our teams performing and diverse workf
Slide 22: Strengthen and nurture the organisational culture
Strengthen and nurture the organisational culture Shaping a culture that will enable us to grow and deliver for our customers in the future • Building enterprise leadership - strengthening enterprise leadership with a focus on 94 % Understand how inclusive leadership, building critical skills and th
Slide 23: Champion a culture of diversity and inclusion
Champion a culture of diversity and inclusion A diverse, equitable and inclusive organisation improves employee engagement, our performance and productivity as well as customer engagement Diversity and inclusion (D&I) strategy closely integrated with our work on culture • D&I strategy is aimed at cr
Slide 24: Environmental responsibility
Environmental Strategic priorities responsibility Minimise environmental impact • Advance the implementation of initiatives to reduce our Scope 1, 2 and 3 carbon emissions • Embed sustainability into product design, development and manufacturing To be a sustainable business, we • Deliver a global ap
Slide 25: Advance the implementation of initiatives to reduce our Scope 1, 2 and 3 carbon emissions
Advance the implementation of initiatives to reduce our Scope 1, 2 and 3 carbon emissions We are committed to taking an active role in the global effort to tackle climate change and are using climate science to better understand our impacts and define our strategy Scope 1 and 2 emissions Our emissio
Slide 26: Enhancing environmental management and compliance
Enhancing environmental management and compliance We continue to integrate environmental considerations into our business, focused on minimising our impact, complying with regulation and improving efficiency Sustainable design and packaging • We incorporate a sustainability mindset into our product
Slide 27: Sustained value
Sustained Strategic priorities value Consistent and sustainable growth • Deliver sustainable financial returns • Improve efficiency and agility • Maintain high levels of corporate governance and an ethical and sustainable Maximising spending to grow the supply chain market while maintaining our • Vi
Slide 28: Financial history
Financial history Cochlear has a long track record of investing to grow, delivering growing sales revenue, profits* and dividends Consistent investment in R&D Long-term growth Growing profits and market growth activities in sales revenue and dividends Research and development Cochlear implants Under
Slide 29: Delivering sustainable financial returns
Delivering sustainable financial returns Our long-term approach to investing, combined with disciplined capital management, has delivered consistent growth in sales revenue, profits and dividends over many decades We plan and invest over long timeframes High level financial targets • Over the coming
Slide 30: Being agile and efficient
Being agile and efficient We are investing in strengthening our business processes and IT platforms to improve efficiency and agility. Successfully executing this transformation program will enable us to scale more effectively and provide even better solutions for our customers • Investing $150m ove
Slide 31: Creating value responsibly
Creating value responsibly We recognise that high standards of corporate governance and transparency are important for the creation, maintenance and enhancement of long-term sustainable value • The Board is committed to high standards of corporate governance practice and fostering a culture of compl
Slide 32: Our strategy is strongly aligned to the mission and focused on delivering value to our stakeholders
Our strategy is strongly aligned to the mission and focused on delivering value to our stakeholders We help more people to hear, creating value A healthier and more A lifetime of Thriving Environmental Sustained across five pillars productive society hearing solutions people responsibility value Str
Slide 33: Product and services innovation
Hear now. And always Product and services innovation Cochlear Capital Markets Day | 27 October 2023 Jan Janssen Chief Technology Officer © Cochlear Limited 2023 1
Slide 34: JA oni] 2%, 2023
JA oni] 2%, 2023 T hope you can heip. Sincerely ¥OPKAA
Slide 35: Delivering a lifetime of hearing outcomes with market-leading implantable hearing products and services solutions
Delivering a lifetime of hearing outcomes with Telehealth market-leading implantable hearing products and services solutions Benchmark in Cochlear size, implant Cochlear™ Link implants reliability and Slim Modiolar neural interface, Electrode Convenient, at-home with proven testing for routine Cochl
Slide 36: Innovation focus areas
Innovation focus areas Hearing Lifestyle and Connected Expanding the Outcomes ease-of-use Care portfolio 4
Slide 37: Innovation focus areas
Innovation focus areas Hearing Lifestyle and Connected Expanding the Outcomes ease-of-use Care portfolio 5
Slide 38: Hearing outcomes have improved significantly over time, leading to expanded indications and funding
Hearing outcomes have improved significantly over time, leading to expanded indications and funding for cochlear implants… but there is still scope to improve Drivers of improved hearing outcomes… Clinical data demonstrating that over time more people are hearing better with cochlear implants1 • Imp
Slide 39: Improved hearing outcomes over the past decade largely driven by advancements in sound processing technology
Improved hearing outcomes over the past decade largely driven by advancements in sound processing technology Key sources of improved hearing outcomes Information Recipient’s Implantable hearing system Front end source brain Speech understanding processing in quiet Rehabilitation Hearing Micro- Elect
Slide 40: Future technology aims to improve hearing outcomes from next generation implant innovation
Future technology aims to improve hearing outcomes from next generation implant innovation Expected sources of improved hearing outcomes Information Recipient’s Implantable hearing system Front end source brain Speech understanding processing in quiet Rehabilitation Hearing Micro- Electro- time & ef
Slide 41: Key focus areas
Key focus areas Sources of improved hearing outcomes Minimise Get close to the Front end cochlear Speech auditory nerve understanding processing trauma during Rehabilitation in quiet Hearing surgery time & effort in noise Speaker Telephone identification Hearing use Improve the Outcomes quality of D
Slide 42: Peri-modiolar electrodes deliver electrical stimulation closer to the hearing nerve
Peri-modiolar electrodes deliver electrical stimulation closer to the hearing nerve Lateral wall electrodes Peri-Modiolar electrodes Lateral Wall Peri-modiolar electrode position electrode position Basilar Membrane Spatial patterns of simulated neural excitation: 100 activated neurons Spatial patter
Slide 43: Surgical tools to minimise cochlear trauma during surgery
Surgical tools to minimise cochlear trauma during surgery The Nucleus® SmartNav System • Includes an iPad app and a surgical processor for use in the operating room • Delivers wireless, real-time, actionable insights to support surgical navigation • Gives added assurance that surgery is successful a
Slide 44: Nucleus SmartNav System features
Nucleus® SmartNav System features Impedance AutoNRT® Placement Speed of Check Check Insertion Angular Electrical Stapedius Seamless Data Automated implant Insertion Depth Reflex Threshold Export (Cloud) registration 12
Slide 45: Lateral wall electrodes = high channel interaction / overlap
Lateral wall electrodes = high channel interaction / overlap 13
Slide 46: Peri-modiolar electrodes = reduce channel interaction / overlap
Peri-modiolar electrodes = reduce channel interaction / overlap 14
Slide 47: The combination of a peri-modiolar electrode and more precise auditory nerve stimulation
The combination of a peri-modiolar electrode and more precise auditory nerve stimulation has the potential to further improve hearing outcomes 15
Slide 48: A range of drug / device combination studies underway
A range of drug / device combination studies underway • Drug/device combinations have the potential to improve hearing outcomes by minimising the foreign body Dexamethasone reaction from surgery eluting electrode clinical studies • We are progressing our dexamethasone eluting electrode demonstrating
Slide 49: Innovation focus areas
Innovation focus areas Hearing Lifestyle and Connected Expanding the Outcomes ease-of-use Care portfolio 17
Slide 50: Living your life – cochlear implant sound processor wearing options
Living your life – cochlear implant sound processor wearing options Behind-The-Ear (BTE) Off-The-Ear (OTE) Continue to shrink the No external processor Sound Processors Sound Processors Sound Processor (TICI) Nucleus® 8 Sound Kanso® 2 Processor Sound Processor 18
Slide 51: Proven hearing performance technologies and industry-leading connectivity
Proven hearing performance technologies and industry-leading connectivity Performance Bimodal ForwardFocus Dual microphones SSiQ 2 with SCAN 2 ForwardFocus Usage data Hearing aid Nucleus® 8 Sound compatibility Processor Connectivity Lifestyle Direct streaming for Nucleus® Smart App True Wireless™ IP
Slide 52: Nucleus 7, Nucleus 8 & Kanso 2: smart bi-modal hearing solution
Nucleus 7, Nucleus 8 & Kanso 2: smart bi-modal hearing solution Kanso® 2 Nucleus® 8 ReSound / Sound Processor Sound Processor GN Hearing Hearing Aids 20 For compatibility information and devices visit www.cochlear.com/compatibility and www.resound.com/compatibility.
Slide 53: Share your audio, Unmute your world, Hear your best
Share your audio Unmute your world Hear your best Auracast™ broadcast audio will let you Auracast™ broadcast audio will enable you Auracast™ broadcast audio will allow you to invite others to share in your audio to fully enjoy televisions in public spaces, hear your best in the places you go and is
Slide 54: 1st Generation totally implantable cochlear implant research device
1st Generation totally implantable cochlear implant research device (2005-2006) • Hearing performance in quiet and in noise significantly degraded when using invisible hearing • Usability strongly affected by the presence of body noise (breathing, swallowing, eating, ...) • Due to these issues the M
Slide 55: 2nd Generation totally implantable cochlear implant research device
2nd Generation totally implantable cochlear implant research device (2018) Subcutaneous Microphone Magnet Receiver coil Electronics Package Integrated battery Custom body-worn charger Intracochlear Electrode Array (Contour Advance) Cochlear Nucleus® 6 Sound Processor 23
Slide 56: 2nd Generation TICI research device hearing modes
2nd Generation TICI research device hearing modes External hearing mode Invisible hearing mode 24
Slide 57: 2nd Generation TICI research device – significant improvements in hearing outcomes
2nd Generation TICI research device – significant improvements in hearing outcomes Clinical study results (Briggs) • 10 patients • Baseline hearing (aided pre implant) of ~3% sentence understanding in quiet • At 6 months after TICI switch on they can hear up to 80% in invisible hearing mode, improvi
Slide 58: Innovation focus areas
Innovation focus areas Hearing Lifestyle and Connected Expanding the Outcomes ease-of-use Care portfolio 26
Slide 59: Connected Care supports patients at every stage of their journey
Connected Care supports patients at every stage of their journey Surgical Care In-clinic Care Self-managed Care Remote Care 27
Slide 60: Connected Care provides convenience and confidence to customers
Connected Care provides convenience and confidence to customers and has the potential to drive clinic efficiency and enable data-driven care • Convenience and confidence: delivering digital products that enhance the patient and professional experience In-clinic Care • Real-time surgical guidance Rem
Slide 61: Innovation focus areas
Innovation focus areas Hearing Lifestyle and Connected Expanding the Outcomes ease-of-use Care portfolio 29
Slide 62: The Osia System
The Osia™ System® Removing boundaries to bone conduction Powered by unique High-frequency power Piezo Power™ technology & performance1 Discreet & easy to use NEW! Only active system enabling MRI at 3 T2 1. Osia System R5 Datasheet. Cochlear Limited, Australia. 2023; D1991788 30 2. Ellsperman SE, Nai
Slide 63: Only active BC system enabling MRI at 3 T
High-resolution MRI, without compromise NEW! Piezo Power™ Next-generation transducer 3 T magnet The Osia System is the only active BC system enabling MRI at 3 T 1,2* *The OSI300 implant is MRI conditional at 1.5 T and 3 T with magnet in place. Refer to Osia MRI guidelines for further information. 1.
Slide 64: Piezo Power transducer
Piezo Power™ transducer No unnecessary No performance surgeries degradation Minimal image Designed to artefact withstand 3T MRI exposure 32 *The OSI300 implant is MRI conditional at 1.5 T and 3 T with magnet in place. Refer to Osia MRI guidelines for further information.
Slide 65: Next-generation 3 T magnet
Next-generation 3 T magnet Direction of MRI field Magnet automatically realigns to MRI field No headwraps or splint kits Simple magnet removal if needed For further reduced image artefacts 33 *The OSI300 implant is MRI conditional at 1.5 T and 3 T with magnet in place. Refer to Osia MRI guidelines f
Slide 66: We continue to invest ~12% of sales revenue each year in R&D
We continue to invest ~12% of sales revenue each year in R&D, with a strong pipeline of products and services in development • Opportunities to improve hearing outcomes from implant-focused investment – peri-modiolar electrodes + more precise auditory nerve stimulation, drug / device combinations •
Slide 67: Developing a treatment pathway for adults
Hear now. And always Developing a treatment pathway for adults Cochlear Capital Markets Day | 27 October 2023 Dean Phizacklea SVP Global Strategic Marketing © Cochlear Limited 2023 1
Slide 68: The global burden of hearing loss is significant
The global burden of hearing loss is significant • Hearing loss affects more than 1.5 billion people or 20% of global population1 • Most people with severe or worse hearing loss are over 601 • 1 in 3 people over 65 are affected by hearing loss1 • Global cost of unaddressed hearing loss < $980 billio
Slide 69: An ageing population and a growing segment of patients who would be eligible for cochlear implants
An ageing population and a growing segment of patients who would be eligible for cochlear implants provides opportunity for sustained growth FY23 Cochlear surgery mix DEVELOPED MARKETS Paediatrics Adults Seniors 30% 37% 33% Source: World Health Organization; 2021 3
Slide 70: Reimbursement and funding for CI is well established in developed markets
Reimbursement and funding for CI is well established in developed markets and improving in emerging markets Reimbursement criteria usually focuses on age, PTA threshold level and word / speech recognition Country Age PTA Audiometric criteria criteria criteria (adults) USA 9m+ 70dB+ <60% best aided G
Slide 71: Cochlear US paediatric surgeries
Cochlear implants became the standard of care for children by 2010 Clinical evidence supporting the benefits of bilateral Development of health economic data implantation. By 2010, 50% of supporting cost effectiveness of cochlear children under 3 receive two implants for children implants (70% by 20
Slide 72: Estimated penetration of cochlear implants in Children (developed markets)
Estimated penetration of cochlear implants in Children (developed markets) 98.7% 99.8% 92.7% 94.8% 83.1% 86.1% 81.2% 53.0% USA Germany United Kingdom Australia France Japan Canada South Korea • Eligible patient population aged 0-18 with hearing loss > 90db • Prevalence % derived from Haile et al , H
Slide 73: Estimated penetration of cochlear implants in Seniors (developed markets)
Estimated penetration of cochlear implants in Seniors (developed markets) Seniors (65+ years of age ) 10.1% 7.3% 4.8% 2.5% 2.5% 2.1% 1.5% 0.7% USA Germany United Kingdom Australia France Japan Canada South Korea • Eligible patient population aged 65+ with hearing loss > 70db • Prevalence % derived f
Slide 74: Hearing loss is not seen as a serious medical condition
Hearing loss is not seen as a serious medical condition US Survey of 400 PCPs Carlsson et al ,Awareness, Perceptions, and Literacy Surrounding Hearing Loss and Hearing Rehabilitation Among the Adult Population in the United States , Otology & Neurotology, Vol. 43, No. 3, 2022 8 Sydlowski et al , Hea
Slide 75: Patients have a very low level of awareness of a cochlear implant as a potential treatment option
Patients have a very low level of awareness of a cochlear implant as a potential treatment option 9 Marinelli et al , Cochlear Implant Awareness in the United States: A National Survey of 15,138 Adults , SEMINARS IN HEARING/VOLUME 43, NUMBER 4 2022
Slide 76: Professionals most commonly cite knowledge and patient-related concerns as barriers to referral
Professionals most commonly cite knowledge and patient-related concerns as barriers to referral; commercial concerns are important for audiology-only clinics Not Top of Mind Minimal Exposure Primary Barriers Unfamiliarity with Qualifications (Perceived) Few Eligible Patients CI as Final Intervention
Slide 77: Why we need a Standard of Care for cochlear implants
Why we need a Standard of Care for cochlear implants “One of the challenges we have is that if the various different professionals, are not all “There is a lack of person-centred and giving, similar or the same and consistent, consistent referral pathways, which results in messaging around hearing h
Slide 78: The key elements of Standard of Care
The key elements of Standard of Care 12
Slide 79: The evidence to support the role of hearing treatment in healthy ageing
Hearing aids only** Cochlear implant*** 9 95 Overall hearing performance % % Satisfied or Very Satisfied 13 76 Ability to understand % % TV what is said on TV 8 79 Ability to understand % % conversations in a small group 2 58 Hearing performance in % % background noise 13 68 Ability to listen to % %
Slide 80: Large multicentre, randomised clinical studies will support the Standard of Care in Adults
Large multicentre, randomised clinical studies will support the Standard of Care in Adults Multicentre RCT to assess whether a cochlear implant or Multicentre RCT to determine efficacy of hearing hearing aids are better at improving speech treatment in reducing cognitive decline in older adults. und
Slide 81: Increasing clinical evidence demonstrating the importance of addressing hearing health
Increasing clinical evidence demonstrating the importance of addressing hearing health and the role of hearing loss interventions In older adults at increased risk for cognitive decline, hearing intervention slowed down loss of thinking and memory ability by 48% over 3 years 15
Slide 82: Establishing a clearly defined care pathway for adult cochlear implantation
International Consensus Establishing a clearly defined Paper 2020 care pathway for adult cochlear implantation will enable Living Guidelines 2023 consistent and equitable hearing healthcare Local adaptation and implementation 16
Slide 83: Heatmap of Living Guideline activity
Heatmap of Living Guideline France ASCOLTA activity guidelines & WHO Nordics promoting via CIREN (CI Referral Expert Network) and adaption in country On track Interest in adaptation, Portugal, Spain and France Japan engaged to Requires development collaborate with JP task Force members At risk Germa
Slide 84: Engaging key stakeholders to raise the awareness and advocate for the importance of hearing
Engaging key stakeholders to Partner with the World Health Organization to ensure raise the awareness and Hearing and Hearing Health remains a public health advocate for the importance of priority and support the WHO efforts in enacting change in countries. hearing and hearing health Helped establis
Slide 85: Enabling hearing professionals to identify and refer potential candidates
Enabling hearing professionals to identify US Cochlear Provider Collaborate with hearing health providers to establish and refer potential sustainable referral pathways for suitable candidates. Network (CPN) candidates Developing and deploying cochlear implant training modules for Audiology practice
Slide 86: The journey to a Standard of Care requires an integrated approach and a sustained effort
The journey to a Standard of Care requires an integrated approach and a sustained effort Standard of Care Establish cochlear implants as the Standard of Care for adults with severe to profound sensorineural hearing loss. This includes the proper diagnosis, timely referral to an appropriate centre, a
Slide 87: Cochlear's US business
Hear now. And always Cochlear’s US business Cochlear Capital Markets Day | 27 October 2023 Lisa Aubert President, North America © Cochlear Limited 2023 1
Slide 88: A perspective of hearing healthcare in the US
Population Awareness Access Reimbursement A perspective of hearing healthcare in the US Broader Payer Evolving Growing Indications & Coverage Market Awarness in Accessibility to Expanding to Landscape Healthcare Hearing Meet patient Healthcare Needs
Slide 89: A changing patient population and market landscape continues to support growth
Population Awareness Access Reimbursement A changing patient population and market landscape continues to support growth with senior population Growing US Senior Population 100 Millions 90 • Everyday in the US 10,000 ‘new’ 65 year 80 olds join the senior segment of our 70 population 60 50 • From 202
Slide 90: Our patient mix over the past 20 years has continued to evolve
Population Awareness Access Reimbursement Our patient mix over the past 20 years has continued to evolve with >75% of our recipients now being adults or seniors Patient Age at surgery over the past 20 years • >75% of US candidates are adults or seniors 24% Children • Over this time pediatric inciden
Slide 91: Growth in prevalence of severe to profound hearing loss is greatest in seniors
Population Awareness Access Reimbursement Growth in prevalence of severe to profound hearing loss is greatest in seniors, with relative growth in pediatric prevalence declining % Growth of Prevalence by Age Bucket Total prevalence (70db and higher) & Cumulative Historical vs. Forecast* Market Penetr
Slide 92: Growing Awareness in Healthcare
Population Awareness Access Reimbursement Consumer awareness Growing Awarness in The emergence of the digital savvy senior Healthcare Professional collaboration & advocacy
Slide 93: Despite increasing awareness of cochlear implants in North America, urgency of treating hearing loss is often deprioritized
Despite increasing awareness of cochlear implants in North America, the urgency of treating hearing loss is often deprioritized In partnership with AARP, the leading senior's publication in the US, we surveyed more than 600 members between the ages of 50 & 70+ in relation to hearing health. We asked
Slide 94: The ongoing emergence of the digital savvy senior has opened new communication pathways
Population Awareness Access Reimbursement The ongoing emergence of the digital savvy senior has opened new communication pathways leading to increased awareness • Our Direct to Consumer (DTC) programs continue to support our growing business • In FY23 DTC contributed to >25% of surgeries • >70% of o
Slide 95: Driving a collaborative approach to establish standards for hearing health care
Population Awareness Access Reimbursement Indications Driving a collaborative approach to establish standards for hearing health care Focus on 3 priorities Secure evidence-based procedural A simple metric as a vital sign Simple and consistent changes for timely referral for for hearing health report
Slide 96: Broader indications & accessibility to Hearing Healthcare
Population Awareness Access Reimbursement Access through indications Broader Access through the medical channel & community hearing care indications & accessibility to Hearing Healthcare Access through professional partnership Access through through an evolving care model
Slide 97: Expansion of indications increases the addressable adult & seniors population
Population Awareness Access Reimbursement Expansion of indications increases the addressable adult & seniors population Severe to Profound Hearing loss:2 An estimated 1m adults aged 60+ met our traditional indications profile in 2020 and is estimated to increase to close to 4m by 2060 Adults >65db S
Slide 98: Patients desiring hearing care guidance are most likely to enter the medical channel
Population Awareness Access Reimbursement Patients desiring hearing care guidance are most likely to enter the medical channel 1 Physicians who specialize in hearing issues are the top choice, followed • Referral for audiological assessment by audiologists and then PCPs comes from multiple channels
Slide 99: Greater access to more implanting centers and the emergence of newer in practice surgeons
Population Awareness Access Reimbursement Greater access to more implanting centers and the emergence of ‘newer in practice’ surgeons continues to support growth in the US Comparison of Cochlear recipient numbers in Comparing the average number of CI surgeries on an annual North America between 2004
Slide 100: The Cochlear Provider Network (CPN)
The Cochlear Provider Network (CPN) The CPN program over the past 10 years has played a significant role in enabling patients to receive care where and when they need it. It has also provided candidates with greater accessibility to audiometric assessments and counselling on implantable hearing solu
Slide 101: To meet a growing patient base, the clinical protocol and patient pathway needs to evolve
Population Awareness Access Reimbursement To meet a growing patient base, the clinical protocol and patient pathway needs to continuously evolve Established CI New CI Follow Established Clinical Pathway Follow Up Protocol Up Protocol 10 10 WEEKS weeks Immediate capacity created for new CI appointmen
Slide 102: A patient centric journey, supported by effective tools
Population Awareness Access Reimbursement A patient centric journey, supported by effective tools, enables continued high standards of patient care for a growing patient base Candidate Journey Recipient Journey Counseling Awareness & Surgery Activate Optimize Maintain Upgrades Candidacy DTC Concierg
Slide 103: Payer coverage expanding to meet patient needs
Population Awareness Access Reimbursement Insurance coverage and change Payer coverage expanding to meet patient Public & private Insurance needs No insurance
Slide 104: Favorable insurance coverage for the majority of Americans
Population Awareness Access Reimbursement Favorable insurance coverage for the majority of Americans 99% 100% Insurance coverage for Americans with SNHL hearing loss * * of private employer health insurance of state Medicaid programs provide CI Uninsured plans and managed care organizations coverage
Slide 105: Hearing healthcare in the US
Population Awareness Access Reimbursement Hearing healthcare in the US • The next 15-20 years continues to see a growing senior population who have a higher predisposition to hearing loss, however we have work to do in serving them • Seniors’ understanding & awareness around hearing loss, and its co
Slide 106: Global supply chain overview
Hear now. And always Global supply chain overview Cochlear Capital Markets Day | 27 October 2023 Greg Bodkin SVP Global Supply Chain © Cochlear Limited 2023 1
Slide 107: Cochlear's key internal supply chain locations
Cochlear’s key internal supply chain locations M&L Operations Baha Actuators Regional (Gothenburg, Fulfilment Hub Europe, Middle Sweden) East, Africa (Weybridge, UK) Implants & Sound Processors (Chengdu, China) North America (Denver) China (Chengdu) Latin America (Panama) Sound Processors (KL, Malay
Slide 108: The philosophy that underpins our supply chain
The philosophy that underpins our supply chain • Tight integration and co-location with R&D: o Improves quality o Speed to market • We own and vertically integrate key manufacturing process steps that are critical to quality or managing supply risk • Lean methodology to drive efficiency and continuo
Slide 109: Rigorous supply chain management is a core driver of implant reliability
Rigorous supply chain management is a core driver of implant reliability People / Quality Process Capacity • Team member selection, on boarding, • Implant manufacture is complex: over 181 • We continue to invest capex to align with training and assessment is a critical part of process steps, 12 test
Slide 110: Deep 3rd party supplier relationships
Geographical split of suppliers Deep 3rd party supplier relationships • 565 suppliers from across the world • Segment suppliers based on customisation requirements America and impact on product quality Asia Australia • Long standing relationships with key suppliers – many over Europe 20 years – scal
Slide 111: Inventory is used to reduce supply risks
Inventory is used to reduce supply risks • Supply risk results from long product life – product life cycle can be longer than component lifecycle requiring lifetime buys of components to support recipients • Inventory is used to buffer supply risk for single source suppliers – often lower cost to ho
Slide 112: © Cochlear Limited 2023.
© Cochlear Limited 2023.
Slide 113: Notes and references
Notes Hear now.and references And always Forward looking statements c. Barnett S. A hearing problem. American Family Physician [serial on the Internet]. (2002, Sep 1), [cited July 3, 2018]; 66(5): 911. Cochlear advises that this document contains forward-looking statements which may be subject to si
Slide 114: www.cochlear.com
www.cochlear.com © Cochlear Limited 2023