NOTES TO THE FINANCIAL STATEMENTS OF SONOVA HOLDING AG AS OF MARCH 31, 2023

Notes to the financial statements of Sonova Holding AG as of March 31, 2023

1. General information

1. General information

The financial statements of Sonova Holding AG, with registered office in Stäfa, comply with the requirements of Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations, ’SCO’). The company does not have any employees (previous year: none).

2. Accounting principles

2. Accounting principles

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 subject to individual valuation.

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 shareholdersʼ equity. The gain or loss from sale is recognized in the income statement as financial gain or financial loss.

3. Information on income statement and balance sheet items

3. Information on income statement and balance sheet items

3.1 Bonds

As of March 31, 2023, the Group has the following bonds/US Private Placement outstanding:

Financial liabilities

 

Currency

 

Nominal value

 

Interest rate

 

Maturity

US Private Placement

 

USD

 

180

 

2.84%

 

July 14, 2025

Fixed-rate bond

 

CHF

 

200

 

0.50%

 

October 6, 2025

Fixed-rate bond

 

CHF

 

300

 

0.75%

 

October 6, 2028

Fixed-rate bond

 

CHF

 

200

 

1.05%

 

February 19, 2029

Fixed-rate bond

 

CHF

 

100

 

0.00%

 

October 11, 2029

Fixed-rate bond

 

CHF

 

200

 

1.95%

 

December 12, 2030

Fixed-rate bond

 

CHF

 

250

 

1.40%

 

February 19, 2032

Fixed-rate bond

 

CHF

 

100

 

0.40%

 

October 11, 2034

3.2 Treasury shares

On March 29, 2022, Sonova Holding AG announced that its Board of Directors approved a share buyback program of up to CHF 1.5 billion. The program started in April 2022 and is expected to run over a period of up to 36 months. During financial year 2022/23, 1,532,910 treasury shares were bought under the share buyback program and are intended to be cancelled (proposal to the Annual Shareholdersʼ Meeting June 12, 2023).

Treasury shares held by Sonova Holding AG Number/CHF million

 

 

 

Number

 

Treasury shares at cost

Balance April 1, 2022

 

2,033,260

 

709.6

Purchase of treasury shares from share buyback

 

1,532,910

 

421.5

Purchase of treasury shares

 

180,000

 

56.4

Sale/Transfer of treasury shares

 

(193,075)

 

(32.1)

Cancellation of treasury shares

 

(2,012,438)

 

(702.8)

Loss from sale of treasury shares

 

 

 

(29.2)

Balance March 31, 2023

 

1,540,657

 

423.3

 

 

 

 

 

Treasury shares held by subsidiaries Number/CHF million

 

 

 

Number

 

Legal reserves for treasury shares held by subsidiaries

Balance April 1, 2022

 

51,211

 

11.4

Sale/Transfer of treasury shares

 

(25,605)

 

(5.7)

Balance March 31, 2023

 

25,606

 

5.7

3.3 Contingent liabilities

CHF million

 

31.3.2023

 

31.3.2022

Letters of comfort given on behalf of Group companies

 

9.7

 

9.6

Guarantees given in respect of rental obligations of Group companies

 

3.1

 

4.1

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

Company name

 

Activity

 

Domicile

 

Share/paid-in capital 1) Local currency 1,000

 

Shares held by Sonova Holding

 

 

 

 

 

 

 

 

 

 

 

Switzerland

 

 

 

 

 

 

 

 

 

 

Sonova AG

 

A,B,C,D

 

Stäfa

 

CHF

 

2,500

 

100%

Phonak AG

 

A

 

Stäfa

 

CHF

 

1,000

 

100%

Sonova Communications AG

 

B, C, D

 

Murten

 

CHF

 

500

 

100%

Verve Hearing Systems AG

 

A

 

Stäfa

 

CHF

 

100

 

100%

 

 

 

 

 

 

 

 

 

 

 

EMEA (excluding Switzerland)

 

 

 

 

 

 

 

 

 

 

Sonova Audiological Care Austria GmbH

 

B

 

Wals-Himmelreich (AT)

 

EUR

 

450

 

100%

Sonova Belgium NV

 

A, B

 

Asse Zellik (BE)

 

EUR

 

15,311

 

100%

Sonova Holding GmbH

 

A

 

Fellbach-Oeffingen (DE)

 

EUR

 

153

 

85% 2)

Sonova Denmark A/S

 

B

 

Middelfart (DK)

 

DKK

 

14,182

 

78% 2)

Sonova Ibérica S.A.U.

 

B

 

San Vincente del Raspeig (ES)

 

EUR

 

7,000

 

100%

Sonova Audiological Care France SAS

 

B

 

Cahors (FR)

 

EUR

 

58,800

 

1% 2)

Sonova France SAS

 

B

 

Bron-Lyon (FR)

 

EUR

 

1,000

 

30% 2)

SCI Du Triangle De Bron

 

A

 

Bron-Lyon (FR)

 

EUR

 

46

 

100%

Sonova Hungary KFT

 

B

 

Budapest (HU)

 

HUF

 

5,000

 

100%

Sonova Italia S.R.L.

 

B

 

Milan (IT)

 

EUR

 

1,040

 

100%

Sonova Nederland B.V.

 

B

 

Vianen (NL)

 

EUR

 

227

 

100%

Sonova Norway AS

 

B

 

Oslo (NO)

 

NOK

 

1,854

 

49% 2)

Sonova Polska Sp. Z o.o.

 

B

 

Warsaw (PL)

 

PLN

 

100

 

100%

Sonova Warsaw Service Center Sp.Z.o.o.

 

A

 

Warsaw (PL)

 

PLN

 

100

 

100%

Sonova RUS LLC

 

B

 

Moscow (RU)

 

RUB

 

4,000

 

100%

Sonova Nordic AB

 

B

 

Solna (SE)

 

SEK

 

200

 

100%

Sonova Sweden AB

 

B

 

Solna (SE)

 

SEK

 

100

 

100%

Sonova UK Ltd.

 

B

 

Warrington (UK)

 

GBP

 

2,500

 

100%

Boots Hearing Care Ltd.

 

B

 

Llandudno (UK)

 

GBP

 

0 3)

 

51%

For significant indirect investments refer to Note 7.7 of the consolidated financial statements of Sonova Holding AG.

Description:

A Holding/Finance: The entity is a holding or finance company.

B Sales: The entity performs sales and marketing activities for the group.

C Production: This entity performs manufacturing for the group.

D Research: This entity performs research and development activities for the group.

1) Share/paid in capital may not reflect the taxable share/paid-in capital amount and does not include any paid-in surplus.

2) The remaining shares are held by a subsidiary of Sonova Holding AG.

3) GBP 133

Company name

 

Activity

 

Domicile

 

Share/paid-in capital 1) Local currency 1,000

 

Shares held by Sonova Holding

 

 

 

 

 

 

 

 

 

 

 

Americas

 

 

 

 

 

 

 

 

 

 

CAS Argosy Participações Ltda.

 

B

 

São Paulo (BR)

 

BRL

 

22,014

 

100%

Sonova Canada Inc.

 

B

 

Mississauga (CA)

 

CAD

 

0 3)

 

85% 2)

Sonova Mexico Soluciones S.A. de C.V.

 

B

 

Ciudad de Mexico (MX)

 

MXN

 

94,050

 

85% 2)

AudioNova Mexico S.A. de C.V.

 

B

 

Ciudad de Mexico (MX)

 

MXN

 

66,050

 

99% 2)

Sonova United States Hearing Instruments, LLC

 

B

 

Aurora (US)

 

USD

 

0 3)

 

73% 2)

Sound Pharmaceuticals, Inc.

 

A

 

Seattle (US)

 

USD

 

13,105

 

31%

 

 

 

 

 

 

 

 

 

 

 

Asia/Pacific

 

 

 

 

 

 

 

 

 

 

Sonova Hearing (Suzhou) Co., Ltd.

 

C

 

Suzhou (CN)

 

CNY

 

46,249

 

100%

Sonova (Shanghai) Co., Ltd

 

B

 

Shanghai (CN)

 

CNY

 

20,041

 

80% 2)

Sonova India Private Limited

 

B

 

Mumbai (IN)

 

INR

 

459

 

56% 2)

Sonova Japan Co., Ltd.

 

B

 

Tokyo (JP)

 

JPY

 

10,000

 

100%

Sonova Korea Ltd.

 

B

 

Seoul (KR)

 

KRW

 

50,000

 

100%

Sonova New Zealand (Wholesale) Ltd.

 

B

 

Auckland (NZ)

 

NZD

 

250

 

100%

Sonova Singapore Pte. Ltd.

 

B

 

Singapore (SG)

 

SGD

 

250

 

100%

Sonova Taiwan Pte. Ltd.

 

B

 

Zhonge City (TW)

 

TWD

 

3,100

 

100%

Sonova Operation Center Vietnam Co., Ltd.

 

C

 

Thuan An (VN)

 

VND

 

36,156,000

 

100%

Sonova Vietnam Company Limited

 

B

 

Ho Chi Minh City (VN)

 

VND

 

2,088,000

 

70% 2)

For significant indirect investments refer to Note 7.7 of the consolidated financial statements of Sonova Holding AG.

Description:

A Holding/Finance: The entity is a holding or finance company.

B Sales: The entity performs sales and marketing activities for the group.

C Production: This entity performs manufacturing for the group.

1) Share/paid in capital may not reflect the taxable share/paid-in capital amount and does not include any paid-in surplus.

2) The remaining shares are held by a subsidiary of Sonova Holding AG.

3) Shares without par value

3.5 Significant shareholders

The following overview shows the significant shareholders as of March 31, 2023 based on shareholdings recorded in the share register and notifications on the SIX Swiss Exchange online reporting platform. Significant shareholders may also hold non-registered shares.

 

 

2023 1)

 

2023 2)

 

2022 1)

 

2022 2)

 

 

No. of shares

 

In %

 

No. of shares

 

In %

Beda Diethelm 3)

 

6,712,878

 

10.98

 

6,712,878

 

10.63

Family of Hans-Ueli Rihs 3) 4)

 

3,683,649

 

6.02

 

3,683,648

 

5.83

BlackRock, Inc.

 

3,334,293

 

5.10

 

3,334,293

 

5.10

MFS Investment Management 5)

 

1,847,415

 

3.02

 

n/a

 

<3

The Capital Group Companies, Inc 6)

 

n/a

 

<3

 

3,087,638

 

4.89

UBS Fund Management (Switzerland) AG

 

n/a

 

<3

 

1,948,684

 

3.03

1) Or at last reported date if shareholdings are not registered in the share register.

2) On the basis of the shares registered in the commercial register at last reported date.

3) Beda Diethelm and Hans-Ueli Rihs were already shareholders before the Initial Public Offering in November 1994. There are no shareholders’ agreements among these individuals and they can trade freely.

4) Hans-Ulrich Rihs, Gabriela Rihs and Stefan Rihs as a group jointly control 3,683,649 registered shares (corresponding to 6.02% of total Sonova share capital) pursuant to the last disclosure notice. These shares were previously controlled by Hans-Ulrich Rihs as a single shareholder.

5) MFS Investment Management, formerly known as Massachusetts Financial Services, is held by Sun Life Financial Inc which is traded on the TSX, NYSE and PSE (ticker symbol SLF)

6) The Capital Group Companies, Inc is held by (i) Capital Research and Management Company ("CRMC"), (ii) Capital Group Private Client Services, Inc. and (iii) Capital International, Inc.

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

 

 

31.03.2023

 

31.03.2022

 

 

Shares

 

Restricted Shares 1) 3)

 

PSUs/RSUs 3)

 

Options (incl. SARs) 3)

 

Shares

 

Restricted Shares 2) 3)

 

PSUs/RSUs 3)

 

Options (incl. SARs) 3)

Board of Directors

 

114,939

 

33,980

 

 

65,228

 

84,817

 

34,672

 

700

 

96,016

Management Board

 

24,878

 

 

 

31,356

 

378,940

 

41,589

 

 

 

34,194

 

417,423

Total

 

139,817

 

33,980

 

31,356

 

444,168

 

126,406

 

34,672

 

34,894

 

513,439

1) These shares are subject to a restriction period which varies from June 1, 2023 to June 1, 2028 depending on the grant date.

2) These shares are subject to a restriction period which varies from June 1, 2022 to June 1, 2027 depending on the grant date.

3) For further details see also Note 7.4 in the consolidated financial statements.

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

There have been no material events after the balance sheet date.