Notes to the financial statements of Sonova Holding AG as of March 31, 2020

2.1 Financial income/expenses

Financial income/expenses consists of gains and losses from sale/transfer of shares in relation to long-term incentive plans, realized/unrealized foreign exchange gains and losses as well as interest income/expenses.

2.2 Financial assets

Financial assets contain loans to third parties as well as to Group companies and are recognized at cost less adjustments for foreign currency losses and impairment of value. Loans granted in foreign currency are translated at balance sheet date.

2.3 Investments

Investments consist mainly of participations in fully consolidated Group companies. They are in general subject to individual valuation. Certain investments are subject to a group valuation approach due to their homogeneity in nature.

2.4 Bonds

Bonds are valued at nominal value. Any bond premium/discount is accrued/capitalized and released/amortized linearly over the term.

2.5 Treasury shares

Treasury shares are recognized at cost and deducted from shareholders’ equity. The gain or loss from sale is recognized in the income statement as financial gain or financial loss.

3.1 Bonds

During the 2019/20 financial year, the Group had the following bonds outstanding: 

3.2 Treasury shares

Out of total treasury shares amounting to 1,868,127 shares on March 31, 2020, 1,843,090 shares were purchased by the company as part of the share buyback program. The average selling price amounted to CHF 129.24 and the average purchase price to CHF 225.95.

Effective March 16, 2020, Sonova Holding AG suspended the Group’s current share buyback program. This precautionary measure reflects the short-term uncertainties regarding the financial impact of the global spread of the novel coronavirus (COVID-19).

3.3 Contingent liabilities

The Swiss Sonova entities form a VAT group and, hence, every company participating in the group is jointly and severally liable for VAT debt of other group participants. Further Sonova Group companies participating in the cash pool are jointly and severally liable for any debit position or outstanding overdraft in connection with them.

3.4 List of investments

3.5 Significant shareholders

At year-end, the following significant shareholders were listed in the share register (with shareholdings in excess of 3% of the issued share capital). Significant shareholders may also hold non-registered shares, which are reported under “Not registered”.

3.6 Shareholdings and participations of the Board of Directors and the Management Board

For further details to shareholdings in the company by members of the Board of Directors and by members of the Management Board, in accordance with Swiss Code of Obligation article 663c, refer to the compensation report of Sonova Holding AG.

3.7 Events after the balance sheet date

On April 6, 2020, Sonova Holding AG issued a CHF 330 million two year fixed-rate bond with interest rate of 0.55% and maturity on April 6, 2022. The bond was issued at 100.084% for the first tranche of CHF 260 million and at 100.139% for the second tranche of CHF 70 million.

On April 29, 2020, Sonova Holding AG reached an agreement on terms with three of its relationship banks for a CHF 300 million revolving bridge facility. This will be committed for a period of 12 months after closing, with an option to extend by further 4 months, i.e. a maximum of 16 months.