In a world where people are becoming increasingly conscious of their health, diet and fitness, they also seem to be ever more willing to pay top dollar for the equipment they use to keep in shape. And as technology advances the desire to have the best equipment grows. One of the leaders within this premium equipment space is Technogym, so while I was over in Italy I thought why not visit the Technogym Village in Cesena and grab a quick coffee with the founder.

Below you can read the Q+A with Nerio Alessandri, Founder of Technogym (pictured).

What are you most proud of in terms of what the business has achieved from a positive impact perspective?

Alongside our business we have been promoting wellness lifestyle for over 25 years and every day 50 million people train with Technogym products and digital solutions in 100 countries around the world. In a global scenario in which health issues related with sedentary and other bad lifestyles are seriously threating economic and social sustainability, we are really proud to give a contribution in making society more active and healthier.

Do you think a sustainability mind-set has ever had a role in helping to build a competitive advantage?

Definitely yes! In the Technogym case, we have always promoted health and wellness, so sustainability mindset and corporate social responsibility are naturally part of our business strategy.

Some might say your equipment is quite expensive- are there any plans to increase access and the ‘inclusiveness’ of your products?

Technogym is a premium brand with a full range of innovative solutions to improve end-users lifestyle not only through equipment. Beside our home offering, with an exclusive positioning, today Technogym is available in over 80.000 wellness and sport centres offering different programs and services for different people with different needs and different economic clusters: from public hospitals and community centres to exclusive clubs or resorts.

Technogym has historically been an early adopter in the fitness space. With the increasing use of fitness ‘wearables and trackers’, how does Technogym plan to maintain its relevance?

On this respect we have a precise strategy: Technogym is a Total Wellness Solution Provider. We are not only interested in developing new and more innovative smart equipments but we have been able to develop dedicated services, digital solutions and more recently contents to offer consumers a personalized training experience and operators a complete solution for the different market segments (fitness clubs, hotels, corporate, medical centres, schools, condos, private homes). That’s why we have created our unique Technogym Ecosystem – made of connected smart equipment, our Mywellness cloud platform, apps and digital training contents) – to offer our unique experience anywhere and anytime, also leveraging on the already available technologies such as the wearables and trackers you mentioned above. Our platform is in fact already automatically connectable with all the major outdoor tracking devices or Apps. Moreover with the launch of the Technogym Live platform we will make professional training contents accessible at home by the end users, thus supporting a further increase in people interested in training at home and not only in public venues.

Do you care what ESG ratings (MSCI, Sustainalytics, ISS or others) agencies say about Technogym? And do they consult with you before they rate you?

We respect these agencies but we believe that their ratings give no justice to our sustainability level. Unfortunately they never consulted with us to give us the opportunity to explain and provide material elements to their analysts; we definitely hope this will change in the near future.

What are your most material sustainability risks & opportunities with regard to how you operate the business day to day?

In a scenario in which non-communicable diseases, exclusively caused by unhealthy lifestyle, represent the first cause of premature death we have a great opportunity of spreading awareness on the benefit of regular physical exercise and of helping people in being active every day. This represent an incredible social opportunity for Government, businesses and citizens. In terms of risks, our industrial footprint is pretty low compared to other sectors, and we believe our potential sustainability risks are pretty low both in terms of environmental and social sustainability.

What sort of environmental impact does the business have? And what typically happens to a Technogym machine when its useful life ends? Can it be recycled or reused?

Despite a usual lifecycle inside a Club can be estimated in c. 5 years all our products have a second life and we have a specific second hand program called Still Novo. Most of our sales contracts include a buyback option which allows the customer to keep the location updated with the last models and resell to Technogym the equipment after a specific period of time pre-defined at the signature of the contract. Once back, those equipment are completely reconditioned and sold to customers willing to accede to more affordable options.

What is the philosophy around talent acquisition (e.g. staff education and engagement) to maximise quality and minimise turnover?

Human resources is very high positioned in our priority list. Since years we are running a project called “Working 4 Wellness” which includes a very strong training component and a corporate wellness program ranging from medical check-ups and nutrition programs to sport activities and educational seminars. We strongly believe that a trained and motivated staff do represent a strong asset for the company and for the business in terms of innovation and productivity.

Pay and incentives are an important part of the governance process. How do you feel as a public CEO being interrogated over how much you and your leadership team are paid?

We have no problems with this, this is part of a listed company transparency. Our pay and incentives are in line with industry standards and company sustainability.

Has the change in media changed the risk / reward dynamic with regard to being sustainable?

Reaching and gathering around our products, services and brand, different communities – united by passions, for sport, fitness or health – is a key element of our marketing strategy, that’s why social media represent a very important opportunity for us.

Have you ever taken a cost in the short-term purely for social or environmental reasons?

We do not have an example on this respect. We tend to invest / focus in mid-long term strategies.

Can you see ways to profit from providing solutions or being relatively proactive on certain issues vs competition?

Yes. A good example is our “Let’s Move for a Better World Campaign” our global campaign which leverages our digital ecosystem to involve fitness clubs in a social project to tackle child obesity. People, inside fitness clubs, can track their movement on Technogym equipment and contribute to a donation of Technogym equipment to schools or community centres running sport educations projects for the young generations. This campaign on one side generate a concrete impact in local communities and on the other side promotes Technogym’s digital services business.

What is your biggest ambition for the company from a sustainability perspective…. And will this make shareholders money?

We strongly believe that wellness is an opportunity for all stakeholders – Governments, Companies and Citizens – both under the social and economic standpoint. Today, thanks to Technogym, 50 million people train every day all over the world. The more people we will be able to involve in regular physical activity in the future, the more we will contribute to a more sustainable future for the entire society. Technogym is one of the few companies that can really support the world in becoming a better place and in improving the quality of life of millions of inhabitants: Healthy people, healthy planet. Our 2021 goal, which we shared with the entire team in our global convention few months ago, is to be able to double our user’s community and to reach 100 million people.

 

Kames Capital invests in Technogym in its fund range.

About the author

Craig Bonthron is an investment manager in the Equities team, responsible for actively co-managing high conviction global equities portfolios. He focuses on analysing disruptive and sustainable investment trends within the technology, healthcare, industrial and consumer sectors in order to identify high conviction stock specific investment ideas.

He joined us in 2014 from SWIP, where he was an investment director in global equities. Prior to SWIP, he was a portfolio manager at Kleinwort Benson Investors. Craig has a 1st Class honours degree in Building Surveying and an MSc with Distinction in Business Information Technology Systems from Strathclyde Business School. He has 18 years’ industry experience (as at 30 April 2019).

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