Corporate governance

Capital structure

Share capital

As of March 31, 2018, the ordinary share capital of Sonova Holding AG was CHF 3,266,544.35 fully paid up and divided into 65,330,887 registered shares with a par value of CHF 0.05 each.

Sonova Holding AG has neither issued any participation certificates nor any profit-sharing certificates.

With the exception of the treasury shares held by the company itself, each share represents one vote at the General Shareholders’ Meeting and is entitled to dividend payments. As of March 31, 2018, the company held 3,622 treasury shares (100,190 in the previous year).

More information on the conditional share capital can be found in Art. 3 of the Articles of Association available at http://www.sonova.com/en/investors/articles-association.

Authorized and conditional capital

Authorized capital

Sonova Holding AG has no authorized capital.

Conditional capital

The Annual General Shareholders’ Meeting (AGM) 2005 approved the creation of conditional share capital of 3,301,120 registered shares with a par value of CHF 0.05 per share to improve the company’s financial flexibility. This capital may be used for exercising option and conversion rights granted in connection with bonds or similar debt instruments issued by the company to finance the acquisition of companies, parts of companies or shareholdings.

The AGMs in 1994 and 2000 approved the creation of conditional share capital of 8,000,000 registered shares with a par value of CHF 0.05 per share for distribution to key employees of the Sonova Group through an equity participation program.

The conditional capital amounts to a maximum of CHF 266,107 which equates to 8.13% of the existing share capital.

More information on the conditional share capital can be found in Art. 4 of the Articles of Association available at http://www.sonova.com/en/investors/articles-association.

Options

In FY 2017/18, a total of 389,358 options including performance options and Stock Option Rights (SARs) were granted as part of the Sonova Executive Equity Award Plan (EEAP). In FY 2016/17 and FY 2015/16, the number of options granted totaled 378,652 and 298,520 respectively. As of March 31, 2018, there were 1,299,812 options and SARs outstanding (compared with 1,226,072 in the previous year). Each of these options entitles the holder to purchase one registered share in Sonova Holding AG with a par value of CHF 0.05. The EEAP is described in greater detail in the compensation report and in Note 30 to the consolidated financial statements.

Convertible bonds

Sonova Holding AG has not issued any convertible bonds.

Changes in capital

As of March 31, 2018, the capital of Sonova Holding AG comprised the following:

 

 

2018

 

2017

 

2016

Ordinary capital (in CHF)

 

3,266,544

 

3,271,144

 

3,331,319

Total shares

 

65,330,887

 

65,422,887

 

66,626,387

Conditional capital (in CHF)

 

266,107

 

266,107

 

266,107

Conditional shares

 

5,322,133

 

5,322,133

 

5,322,133

Of the 8,000,000 maximum approved conditional shares, a total of 5,978,987 shares with a par value of CHF 0.05 each was issued prior to FY 2017/18. Starting in FY 2014/15 Sonova decided to purchase shares on the market to fulfill its obligations under the long-term incentive plans and not to issue shares out of the conditional share capital. The maximum conditional share capital reserved for long-term incentive plans therefore remained unchanged at 2,021,013 shares.

The conditional share capital of 3,301,120 registered shares, which was created on July 7, 2005 in order to increase the company’s financial flexibility, has not yet been used.

The AGM 2017 approved a reduction of the share capital by CHF 4,600 through cancellation of 92,000 registered shares. This capital reduction was the result of the share buyback program as further outlined below, in which the Company repurchased 92,000 registered shares between April 1, 2015 to March 31, 2016.

Share buyback program

On December 1, 2017, Sonova announced the conclusion of its share buyback program with a maximum overall value of CHF 500 million, which had been initiated on December 1, 2014.

During the buyback program, Sonova repurchased a total of 1,842,400 registered shares (equivalent to 2.74% of the share capital as per the beginning of the buyback program) for a total amount of CHF 241.0 million at an average purchase price of CHF 130.81 per share. The registered shares were repurchased on SIX Swiss Exchange on a second trading line. Sonova has cancelled all 1,842,400 registered shares repurchased on the second trading line.

The transactions conducted as part of the share buyback program are available at https://www.sonova.com/sites/default/files/sonovatransaction_reporting_0.pdf.

Limitations on transferability and nominee registrations

Limitations on transferability for each share category

To be recognized as a shareholder with full voting rights, the acquirer of shares must submit a written application for registration in the share register. The company may refuse registration in the share register if applicants do not explicitly declare that they have acquired and will hold the shares in their own name and for their own account. The company may further refuse entry of the acquirer as a shareholder or usufructuary with a voting right to the extent that the shares held would exceed 5% of the overall number of shares shown in the Commercial Register (Art. 8 para. 6 of the Articles of Association). Linked parties are considered as one person. This registration restriction does not apply to the founding shareholders. The Board of Directors may grant exceptions where there is justified cause, in which case no special quorum is required.

More information on the limitations on transferability and registrations can be found in Art. 8 of the Articles of Association available at http://www.sonova.com/en/investors/articles-association.

Exceptions granted in the year under review

No exceptions were granted by the Board of Directors during the reporting period.

Admissibility of nominee registrations

The Board of Directors can issue regulations specifying the conditions under which trustees/nominees are recognized as shareholders with voting rights (Art. 8 para. 5 of the Articles of Association, available at www.sonova.com/en/investors/articles-association).

Procedure and conditions for cancelling statutory privileges and limitations on transferability

A resolution of the General Shareholders’ Meeting approved by a relative majority of the votes cast is sufficient for cancellation (Art. 15 para. 4 no. 3 of the Articles of Association, available at www.sonova.com/en/investors/articles-association).