Sonova Hearing Aid Presentation_March_2013

7/27/2019 Sonova Hearing Aid Presentation_March_2013

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INVESTOR PRESENTATIONMarch 2013


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DISCLAIMER

March 2013

This presentation may contain forward-looking statements including, but not limited to,projections of future performance of products, financial conditions, results of operations

and cash flows. The statements are made on the basis of managements views and

assumptions regarding future events and business performance as of the time the

statements are made. Sonova cautions you that a number of important risks and

uncertainties could cause actual results to differ materially from those discussed in the

forward-looking statements. Such differences may result from the ability of Sonova to

successfully develop and introduce new products and market existing products, changesin competitive conditions and regulatory developments as well as from changes in the

economic conditions that may affect the performance of the operations of Sonova.

Sonova undertakes no obligation to update any forward-looking statements, whether as

a result of new information, future events or otherwise. Therefore you should not place

undue reliance on them.

This presentation serves marketing purposes and constitutes neither an offer to sell nor

a solicitation to buy any securities. This presentation does not constitute an offering

prospectus within the meaning of Article 652a of the Swiss Code of Obligations nor a

listing prospectus within the meaning of the listing rules of SIX Swiss Exchange.


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VISION

AT SONOVA, WE ENVISION

March 2013

A WORLD WHERE

EVERYONEENJOYS THE DELIGHT OF

HEARING AND

THEREFORE LIVES A LIFE

WITHOUT LIMITATIONS


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SONOVA GROUP

BROADEST OFFERING: HEARING INSTRUMENTS, COCHLEAR IMPLANTS

AND PROFESSIONAL RETAIL SERVICES

March 2013

HI Hearing Instruments Behind-The-Ear hearing instruments (BTE) FM systems

Custom In-The-Ear hearing instruments (ITE)

Hearing protection

Wireless communication systems

Earphones

Invisible extended-wear hearing instruments

Cochlear implants

CI Cochlear Implants


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BUSINESS CASE

CLEAR AND FOCUSED STRATEGY CUSTOMER DRIVEN INNOVATION

March 2013

SONOVA: HEAR THE WORLD

Key to our success - Our customers and our employees

Broadest product and service offering / portfolio - Hearing instruments (Phonak, Unitron)

- Cochlear implants (Advanced Bionics)

- Professional services (Connect Hearing Group)

Strong competitive positions - Leading position in hearing instruments

- Strong contender on cochlear implants

- Strong position in selected key retail markets

Significant market share gain potential - High R&D spend fast product introduction

- Differentiated multi-brand strategy

- Optimized multi-channel approach

Strong product pipelines - High innovation rate and rapid new product introduction

Productivity / efficiency gains - Leverage existing global infrastructure to expand margins

5-year financial targets (at constant FX rates) - EBITA margin: return to mid-twenties

- ROCE: expand to low-thirties


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Page 6

CONTENTS

1 MARKET PAGE 7

2 BUSINESS PAGE 11

3 CORPORATE STRATEGY PAGE 21

4 BUSINESS STRATEGIES PAGE 31

5 FINANCIAL INFORMATION PAGE 50

March 2013


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1. MARKET


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Page 8

MARKET

LOW PENETRATION RATE AROUND 20% IN DEVELOPED COUNTRIES

MILD

MODERATE

PROFOUND

With hearing system Without hearing system

END-USER MARKET PENETRATION*

- Profound loss- Moderate loss

- Mild loss

70%50%

10%

HI

HI

CI HI

15%

* Source: Several industry statistics, Sonova estimates

AROUND 15% OF PEOPLE HAVE SOME DEGREE OF HEARING IMPAIRMENT

March 2013


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MARKET

HEARING SOLUTIONS: INSTRUMENTS, IMPLANTS AND SERVICES

TOTAL HEARING CARE MARKET- Market Size

- Market CAGR

- HI Size (units)

- CI Size (units)

~ CHF 15 billion

~ + 3-5%

~ 10 million

~ 35 thousand

COCHLEAR IMPLANTS CI

- Market Size

- Market CAGR

- CI Size (units)

~ CHF 800 million

~ +10-15%

~ 35 thousand

HEARING INSTRUMENTS HI

- Market Size

- Market CAGR

- HI Size (units)

~ CHF 4.2 billion

~ + 2-4%

~ 10 million

CI

HI

March 2013


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Page 10

MARKET

SERVICE CHANNELS: KEY TO ACCESS END-USERS

TOTAL HEARING CARE MARKET- Market Size

- Market CAGR

- HI Size (units)

- CI Size (units)

~ CHF 15 billion

~ + 3-5%

~ 10 million

~ 35 thousand


- Market Size

- Market CAGR

- CI Size (units)

~ CHF 800 million

~ +10-15%

~ 35 thousand


- Market Size

- Market CAGR

- HI Size (units)

~ CHF 4.2 billion

~ + 2-4%

~ 10 millionINDEPENDENTS

GLOBAL

KEY

ACCOUNTS

LARGE

RETAIL

ACCOUNTS

MULTI-

SHOP

BUYING

GROUPS

HOSPITALS

GOVERNMENT

OTHERS

March 2013


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2. BUSINESS


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SONOVA GROUP

STRONG FINANCIAL TRACK RECORD

March 2013

1H

SALESin CHF million

EBITAin CHF million

EBITAmargin in %

'0

'200

'400

'600'800

1'000

1'200

1'400

1'600

1'800

2'000

06/07 07/08 08/09 09/10 10/11 11/12 12/130%

5%

10%

15%

20%

25%

30%

35%

40%

45%

'0

'50

'100

'150

'200

'250

'300

'350

'400

'450

06/07 07/08 08/09 09/10 10/11 11/12 12/13

2007/08 2008/09 2009/10 2010/11 2011/12CAGR

5-year1H 2012/13

Sales growth reported +12.3% +3.7% +20.1% +7.8% +0.2% +8.6% +14.3%Sales growth in LC +12.8% +10.8% +23.8% +13.3% +11.6% +14.6% +7.9%

EBITA margin reported 28.2% 26.6% 28.0% 20.2% 19.5% +21.4%

Basic EPS 4.55 4.35 3.32 3.50 3.71 2.24

FY 2007/08 Excluding one-off costs for the prohibited acquisition of the GN ReSound Group

FY 2009/10 Restated based on finalization of the acquisition accounting of Advanced Bionics

2H


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AB Center

Unitron Center

Sonova & Phonak HQ & Centers

DistributorsWHS Group Companies

Operation CentersPhonak Communications Center

InSound Center

Murten (CH)

Kitchener

(CAN)

Ho Chi Minh City

(VN)

Suzhou (CN)

Valencia (USA)

Newark

(USA)

Stfa (CH)

SONOVA GROUP

WELL ESTABLISHED GLOBAL INFRASTRUCTURE AND NETWORK

STRONG LOCAL PRESENCE SUPPORTING CUSTOMERS WORLDWIDE

March 2013


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SONOVA GROUP

EUROPE AND AMERICAS MAIN CONTRIBUTORS TO GROUP SALES

March 2013

SALESin CHF million

SALESin CHF million

2007/08 2008/09 2009/10 2010/11 2011/12

CAGR

5-year

EU - Sales growth in LC +10.3% +6.4% +23.0% +11.3% +13.9% +13.3%

AM - Sales growth in LC +13.9% +12.9% +26.0% +16.9% +7.8% +15.2%

AP - Sales growth in LC +20.6% +22.3% +15.3% +2.7% +24.0% +17.2%

'0

'200

'400

'600

'800

1'000

1'200

1'400

1'600

1'800

2'000

06/07 07/08 08/09 09/10 10/11 11/12 12/13

EU AM AP

'0

'200

'400

'600

'800

1'000

1'200

1'400

1'600

1'800

2'000

06/07 07/08 08/09 09/10 10/11 11/12 12/13


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MARKET POSITION

EXPANDING STRONG HI POSITION INTO LARGER HEARING CARE MARKET

March 2013

TOTAL HEARING CARE MARKET

- Market Size

- Market CAGR

- HI Size (units)

- CI Size (units)

~ CHF 15 billion

~ + 3-5 %

~ 10 million

~ 35 thousand


- Market Size

- Market CAGR

- CI Size (units)

~ CHF 800 million

~ +10-15 %

~ 35 thousand


- Market Size

- Market CAGR

- HI Size (units)

~ CHF 4.2 billion

~ + 2-4 %

~ 10 million


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MARKET POSITION

SOLID COMPETITIVE ADVANTAGES IN INSTRUMENTS, IMPLANTS AND SERVICES

March 2013

RETAIL SERVICE CHANNELS

- Leading retail services provider

- Strong local presence in 8 key markets

- Superior shop offering and productivity

- Direct access to end-users / patients

HI: LEADING BRANDS

- Largest manufacturer in HI industry

- Most extensive product portfolio

- Multi-brand strategy Phonak / Unitron

- Solid financial performance

CI: RESPECTED No 2 BRAND

- CI solution with strong performance

- CI solution with high reliability

- Technology synergy with HI business

- Distribution synergy with HI business


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MARKET POSITION

SERVICE CHANNELS: STRONG PARTNER TO IND, LRA, BG AND GOVT

TOTAL HEARING CARE MARKET

- Market Size

- Market CAGR

- HI Size (units)

- CI Size (units)

~ CHF 15 billion

~ + 3-5 %

~ 10 million

~ 35 thousand


- Market Size

- Market CAGR

- CI Size (units)

~ CHF 800 million

~ +10-15 %

~ 35 thousand


- Market Size

- Market CAGR

- HI Size (units)

~ CHF 4.2 billion

~ + 2-4 %

~ 10 millionINDEPENDENTS

GLOBAL

KEY

ACCOUNTS

LARGE

RETAIL

ACCONTS

MULTI-

SHOP

BUYING

GROUPS

HOSPITALS

GOVERNMENT

OTHERS

SOON

Sales Split

March 2013


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BUSINESSES

BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES

March 2013

SONOVA

Group

HEARING INSTRUMENT (HI)

SegmentIMPLANT (CI)

Segment

CI

ADVANCED

BIONICS

Business

HI

PHONAK

Business

HI

UNITRON

Business

HI

RETAIL

Business


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HI SEGMENT

SOLID GROWTH IN BOTH HEARING INSTRUMENT BRANDS AND RETAIL

March 2013

SALESin CHF million

EBITAin CHF million

2007/08 2008/09 2009/10 2010/11 2011/12CAGR

5-year

Sales growth reported +12.3% +3.7% +18.1% +4.8% -1.4% +7.3%

Sales growth in LC +12.8% +10.8% +21.7% +10.1% +9.7% +13.1%

EBITA margin reported 28.2% 27.2% 29.0% 24.1% 22.2%

EBITAmargin in %

'0

'200

'400

'600

'800

1'000

1'200

1'400

1'600

1'800

2'000

06/07 07/08 08/09 09/10 10/11 11/12 12/13

1H

0%

5%

10%

15%20%

25%

30%

35%

40%

45%

'0

'50

'100

'150'200

'250

'300

'350

'400

'450

06/07 07/08 08/09 09/10 10/11 11/12 12/13

2H


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CI SEGMENT

STRONG AND RAPID EXPANSION OF IMPLANT BUSINESS

March 2013

SALESin CHF million

EBITAin CHF million

2007/08 2008/09 2009/10 2010/11 2011/12CAGR

5-yearSales growth reported -- -- -- +180.5% +36.0% >> +100%

Sales growth in LC -- -- -- +202.1% +53.5% >> +100%

EBITA margin reported -- -- -32.0% -63.4% -25.0%

EBITAmargin in %

'0

'25

'50

'75

'100

'125

'150

06/07 07/08 08/09 09/10 10/11 11/12 12/13-100%

-80%

-60%

-40%

-20%

0%

20%

-'50

-'40

-'30

-'20

-'10

'0

'10

06/07 07/08 08/09 09/10 10/11 11/12 12/13

1H 2H


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3. CORPORATE STRATEGY


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MISSION

March 2013

WE STRIVE TO BE RECOGNIZED AS THE INNOVATION LEADER

IN THE GLOBAL HEARING CARE MARKET

HI Hearing Instruments Behind-The-Ear hearing instruments (BTE) FM systems

Custom In-The-Ear hearing instruments (ITE)

Hearing protection

Wireless communication systems

Earphones

Invisible extended-wear hearing instruments

Cochlear implants

CI Cochlear Implants


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FINANCIAL TARGETS

LEVERAGE EBITA: DRIVE SALES GROWTH >> OPEX GROWTH

LEVERAGE ROCE: DRIVE SALES GROWTH >> NET ASSET GROWTH

March 2013

10%

20%

30%

40%

0

1'000

2'000

3'000

06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

EBITAMargin/ROCE(%)

Sales(CHFmillion)

Sales EBITA Margin (%) ROCE (%)


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STRATEGY

SIX KEY STRATEGIES DRIVING CORE SALES AND EARNINGS GROWTH

1 INNOVATION

2 MARKET

3 PRODUCT

4 PORTFOLIO

5 RESOURCE

6 ACQUISITION

CORPORATE STRATEGIES

1 HI PHONAK

2 HI UNITRON

3 HI RETAIL

4 CI ADVANCED BIONICS

BUSINESS STRATEGIES

March 2013


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INNOVATION STRATEGY

FOCUS ON CONTINUOUS INNOVATION TO GROW SALES AND EARNINGS

March 2013

Q1 14 Q2 14Q1 13 Q2 13 Q3 13 Q4 13Q1 12 Q2 12 Q3 12 Q4 12

MARKETING

SALES & DISTRIBUTION

PRODUCTIVITY & EFFICIENCY

RESOURCES & PROCESSES

NEW PRODUCTS

CORE: DRIVE STRONG NEW PRODUCT PIPELINE R&D 7-8% OF SALES


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MARKET STRATEGY

GROW MARKET POSITION ALONG 4 MAIN GROWTH VECTORS

March 2013

FOCUS ON KEY INITIATIVES TO SUPPORT GROWTH STRATEGY

1

2

3

4

Penetrate existing markets WHS account development

Dual-brand strategy

Continuous product innovation

Expand accessible markets

BRIC markets New product formats

Integrate service channels Retail network expansion

Integration & productivity

Develop consumer base Direct marketing Lead generation processes


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PRODUCT STRATEGY

PROVIDE COMPLETE CUSTOMER SOLUTIONS: HW, SW AND SERVICES

March 2013

PLATFORM CONCEPT APPROACH TO SOLUTION DEVELOPMENT


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PORTFOLIO STRATEGY

DEVELOP BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES

March 2013

LEAD INNOVATION IN HEARING INSTRUMENTS AND IMPLANTS

DOG

???

COW

STAR

MARKET SHARE

High

Lo

w

MARKETGROW

TH

LYRIC

HighLow

High

Low

HI

CI

FM

INVEST RETURN


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RESOURCE STRATEGY

LEVERAGE GLOBAL INFRASTRUCTURE TO EXPAND MARGINS

RE-BALANCE GLOBAL OPEX BASE TO CREATE NATURAL HEDGE

0

50

100

150

200

2012 2016

SALES

OPEX0

50

100

150

200

2012 2016

SALES

OPEX0

50

100

150

200

2012 2016

SALES

OPEX

AMERICAS EUROPE APAC

March 2013


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ACQUISITION STRATEGY

INVEST TO LEVERAGE EXISTING CHANNELS AND PRODUCTS

March 2013

TARGETS: STRICT CRITERIA FOR STRATEGIC AND FINANCIAL FIT

HI

CI

Channels

,0

3,000

06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16

ISM

AB


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4. BUSINESS STRATEGIES


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PHONAK

SONOVA: BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES

March 2013

SONOVA

Group


SegmentIMPLANT (CI)

Segment

CI

ADVANCED

BIONICS

Business

HI

PHONAK

Business

HI

UNITRON

Business

HI

RETAIL

Business


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PHONAK

BUSINESS STRATEGY

March 2013

PHONAK: LIFE IS ON

Mission / value proposition - Drive innovation leadership to expand market position

Markets - Cover broadest global (whole)sale, distribution & support network

Products - Offer complete range across all form factors and performance levels

Product pipeline - Drive high innovation rate and rapid new product introduction

Productivity / efficiency - Leverage global sales & production infrastructure to expand margins

Selected initiatives 2012/13 - B2B/B2C marketing campaign: Phonak engaging voices

- New product launch Fall 2012

- New product launch Spring 2013

- Lyric 2

- DM (2.4 GHz) communication / connectivity

- China market growth and expansion (lead)

- etc.


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PHONAK

MARKETS: COVER BROADEST GLOBAL SALES & SUPPORT NETWORK

March 2013

FURTHER PENETRATE AM AND EU EXPAND POSITIONS IN AP (CHINA)

AM EU

AP


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PHONAK

PRODUCT PIPELINE: DRIVE HIGH INNOVATION & PRODUCT LAUNCH RATE

March 2013

COMPLETE RANGE ACROSS ALL FORMATS AND PERFORMANCE LEVELS

SPICE (new HW / new DSP / 65nm) QUEST (new HW / new core SW / 65nm) NEXT PLATFORM

BTEBolero

ITEVirto

F

3

F

4

F

5

F

1

F

2

F

3

F

4

F

5

Lyric2 Lyric3

T 2.1 T 3.3T 3.0 T 4.0T 3.1 T 3.2 T 4.1 T 4.2T 2.0T 1.1

FM System (analog) DM System (digital / 2.4 GHz)

F1 / 4

HI - Premium

HI - Advanced

HI - Standard

HI - Essential/Basic

HI - Platform

HI - New EW Format

Fitting Software

(TARGET)

Communication

F1

F3

F1

F1

F2

F2

F4

F5

F5

1H 15 2H 151H 13 2H 131H 11 2H 11 1H 14 2H 141H 12 2H 12TIMELINE / CY

Note: Subject to change


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PHONAK PRODUCT PORTFOLIO

March 2013

* based on previous generation platforms

BTE product line Custom product line RIC Power Pediatric

Premium Phonak Bolero Q90 Phonak Virto Q90 Audo S IX* Nada S IX*

Advanced Phonak Bolero Q70 Phonak Virto Q70 Audo S V* Nada S V* Nios S V* / Nada S VII*

Standard Phonak Bolero Q50 Phonak Virto Q50 Audo S III* Nada S III* Nios S III* / Nada S III*

Essential Phonak Dalia* Phonak Dalia* Audo S I* Nada S I*

Basic Milo* Milo*


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UNITRON


March 2013

SONOVA

Group


SegmentIMPLANT (CI)

Segment

CI

ADVANCED

BIONICS

Business

HI

PHONAK

Business

HI

UNITRON

Business

HI

RETAIL

Business


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UNITRON

BUSINESS STRATEGY

March 2013

UNITRON: HEARING MATTERS

Mission / value proposition - Drive leadership in customer experience

Markets - Deeper penetration in core markets in Europe and NA

Products - Offer flexible range across many form factors and all performance levels

Product pipeline - Drive focused innovation and rapid new product introduction

Productivity / efficiency - Leverage Sonova technology & production platform to expand margins

Selected initiatives 2012/13 - B2B Marketing campaign favorite sound

- UT customer experience initiatives

- New product launch Fall 2012

- New product launch Spring 2013

- China market growth and expansion (complement Phonak initiative)

- etc.


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UNITRON

MARKETS: EXPAND GLOBAL NETWORK FROM STRONG BASE IN NA

March 2013

DEVELOP POSITIONS IN EU SUPPORT SONOVA EXPANSION IN AP (CHINA)

AM EU

AP


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UNITRON

PRODUCT PIPELINE: DRIVE FOCUSED PRODUCT INNOVATION

March 2013

FLEXIBLE RANGE ACROSS 3 FORMATS AND ALL PERFORMANCE LEVELS

ERA (new HW / new DSP / 65nm) NEXT PLATFORM

Q

FLEX

1

M

FLEX

1

Q

FLEX

2

M

FLEX

2

Q2

F

1

F

2

F

3

TF 1.1 TF 2.3TF 2.0 TF 2.3TF 2.1 TF 2.2 TF 4.0 TF 4.1TF 1.0

HI - Premium

HI - Advanced

HI - Standard

HI - Essential/Basic

HI - Platform

Fitting Software(TRUEFIT)

QP

RO

M

PRO

M2

QP

RO

M

PRO

Q1

M1


Note: Subject to change


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UNITRON PRODUCT PORTFOLIO

March 2013

* based on previous generation platforms

BTE product line Custom product line RIC Power Flex Trial

Premium Quantum Pro Quantum Pro Moxi Pro

Quantum 20 Quantum 20 Moxi 20 Max 20

Quantum 12 Quantum 12 Moxi 12

Standard Quantum 6 Quantum 6 Moxi 6 Max 6

Essential Quantum E Quantum E Moxi E Max E

Basic Shine* Shine*

Advanced

AnyPerformance

Level


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RETAIL


March 2013

SONOVA

Group


SegmentIMPLANT (CI)

Segment

CI

ADVANCED

BIONICS

Business

HI

PHONAK

Business

HI

UNITRON

Business

HI

RETAIL

Business


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RETAIL

BUSINESS STRATEGY

March 2013

RETAIL: YOUR HEARING CARE PROFESSIONAL

Mission / value proposition - Secure market access and grow professional hearing care services

Markets - Build strong service positions / networks in key focus markets

Business models / products - Support new business concepts to increase store traffic and service

Profitability / productivity - Standardize business systems and processes

Brand equity - Apply consistent store branding within key markets

Selected initiatives 2012/13 - Selected acquisitions and store openings

- New store concepts

- CHG Retail Business Solution (RBT)

- Strategic branding approach

- etc.


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RETAIL

MARKETS: BUILD STRONG SERVICE POSITIONS IN KEY MARKETS

March 2013

FOCUS ON: US, CA, BR, UK, FR, BE, AT, AUS/NZ

AMEU

AP


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ADVANCED BIONICS


March 2013

SONOVA

Group


SegmentIMPLANT (CI)

Segment

CI

ADVANCED

BIONICS

Business

HI

PHONAK

Business

HI

UNITRON

Business

HI

RETAIL

Business


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ADVANCED BIONICS

BUSINESS STRATEGY

March 2013

ADVANCED BIONICS: PATIENTS ALWAYS FIRST

Mission / value proposition - Strive for performance leadership leverage AB and PH combination

Markets - Build global direct sales & support network - grow from strong US base

Products - Expand innovative range of processors, implants and electrodes

Product pipeline - Accelerate innovation rate synchronize with PH pipeline and platforms

Productivity / efficiency - Leverage PH technology & process platform to expand margins

Selected initiatives 2012/13 - AB Partner Program for retail: Think beyond Hearing Aids

- AB / PH system & product pipeline

- New product launches 2012/13

- China market entry

- etc.


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ADVANCED BIONICS

MARKETS: EXPAND GLOBAL NETWORK FROM STRONG BASE IN US

March 2013

GROW POSITIONS IN EU, BR, JP BUILD PLATFORM IN CHINA

AM EU

AP


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ADVANCED BIONICS

PRODUCT PIPELINE: ACCELERATE INNOVATION RATE LEVERAGE PH

March 2013

EXPAND RANGE OF INNOVATIVE PROCESSORS, IMPLANTS, ELECTRODES

FDA

CE

FDA

CE

FDA

CE

WOLVERINE / QUEST (new HW / new DSP / 65nm) NEXT PLATFORM

CI - Electrodes

CI - Implants

CI - Processors

CI - Platform

Fitting Software(SOUNDWAVE)

N Pro 1 N Pro 2N Pro 2

N Pro 3

N Imp 2 N Imp 3

N El 2 N El 3N El 1


SW 2.0 SW 3.0 SW 4.0

NeptuneNeptune N Pro 1

N Imp 2N Imp2 N Imp 2

N Pro 3

N Imp 3

N El 3N El 1 N El 2

Note: Subject to change, timing dependent upon regulatory approvals


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ADVANCED BIONICS PRODUCT PORTFOLIO

March 2013

Implant HiRes 90K

Electrodes HiFocus 1j, HiFocus Helix

Sound Processors Harmony BTE, Neptune Sound Processor

Software SoundWave 2.1


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5. FINANCIAL INFORMATION


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HALF-YEAR 2012/13

Solid growth in both sales and earnings both segments meeting expectations

Gross profit margin of 68.9% up 0.5% pts., driven by positive currency effects

OPEX growth of 3.4% in lc compared to 7.9% sales growth in lc

EBITA margin increased to 21.4%; excluding FX impact: 20.1%

R&D spend at CHF 56.5 million or 6.5% of sales (excluding capitalized development cost ofCHF 15.4 million or 1.7%)

Basic EPS of CHF 2.24, up by 43.6%

Operating free cash flow up by 51.6% to CHF 127.1 million

Equity ratio of 67.1%, up from 64.5% as of March 2012

ROCE last twelve months 21.8% (up from 14.0% in prior year)

FINANCIAL HIGHLIGHTS

March 2013


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HALF-YEAR 2012/13

SOLID FINANCIAL PERFORMANCE

In CHF million 1H 2011/12 1H 2012/13 Change Change in lc

Sales 763.0 872.4 14.3% 7.9%

Gross profit

Gross profit margin

522.1

68.4%

600.7

68.9%

15.1% 7.6%

OPEX 383.7 413.7 7.8% 3.4%

EBITA

EBITA margin

138.4

18.1%

187.0

21.4%

35.1% 19.3%

Operating free cash flow 83.8 127.1 51.6%

EPS (in CHF) 1.56 2.24 +43.6%

ROCE last 12 months 14.0% 21.8%

March 2013


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HALF-YEAR 2012/13

SOLID GROWTH IN KEY MARKETS IN LOCAL CURRENCIES

in CHF million 1H 2011/12 1H 2012/13

Sales in % Sales in % Growth in lc

EMEA (excl. Switzerland) 289 38% 317 36% +8.6%

Switzerland 21 3% 14 2% -32.9%

USA 277 36% 339 39% +9.2%

Americas (excl. USA) 102 13% 114 13% +9.7%

Asia/Pacific 74 10% 88 10% +9.7%

Total sales 763 100% 872 100% 7.9%

March 2013


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HALF-YEAR 2012/13

SALES GROWTH ACROSS PRODUCT GROUPS

in CHF million 1H 2011/12 1H 2012/13

Sales in % Sales in % Growth in lc

Premium HI 173 23% 192 22% +2.2%

Advanced HI 174 23% 212 24% +9.8%

Standard HI 233 31% 240 28% +0.9%

Wireless comm. 34 4% 31 4% -14.4%

Miscellaneous 110 14% 126 14% +12.9%

Hearing Instruments 724 95% 801 92% +4.5%

CI and accessories 39 5% 71 8% +70.5%

Total sales 763 100% 872 100% +7.9%

March 2013


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HALF-YEAR 2012/13

HI MARGINS INFLUENCED BY MIX CHALLENGES

Category Mix Effect

Impact Sonova 1H

Sales GrowthGross

Margin

Country Switzerland: Reimbursement change effective in July 2011 Germany: Slowdown/product mix shift (upcoming reimbursement changes) France and Italy: High growth in prior year, market negative in 1H

Product Highest growth in the Advanced segment Adverse intra-segment mix shift in the Standard category

Sonovas broad product & country portfolio mitigates mix challenges

Strong performance in the UK, Brazil, and Spain

March 2013

HALF YEAR 2012/13


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HALF-YEAR 2012/13

STRONG LEVERAGE OPEX +3.4 % LC VS. TOP-LINE GROWTH OF 7.9% LC

in CHF million 1H 2011/12 1H 2012/13 Change in CHFChange

in lc

Sales 763.0 872.4 +14.3% +7.9%

Research & Development*

in % of sales

58.6

7.7%

56.5

6.5%-3.6% -6.0%

Sales & Marketing

in % of sales

237.1

31.1%

266.5

30.5%+12.4% +7.1%

General & Administration

in % of sales

83.9

11.0%

88.2

10.1%+5.1% +1.5%

Other expenses, net 4.1 2.6

Total OPEX383.7

50.3%

413.7

47.4%+7.8% +3.4%

* excluding capitalized development cost of 15.4m /1.7% of sales (prior year 6.5m / 0.9% of sales)

March 2013

HALF YEAR 2012/13


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HALF-YEAR 2012/13

GROUP EBITDA DEVELOPMENT

EBITA IMPROVEMENT DRIVEN BY ORGANIC GROWTH AND FX

EBITA

YTD SEPT.

2011/12

Organic

Growth

EBITA

YTD SEPT.

2012/13

FX

effect

EBITA

YTD SEPT.

2012/13const. FX

187.0

+21.9

138.4 +26.4

+26.7+19.3%

+48.6+35.1%Margin:

18.1%

Margin:

21.4%

+0.3

Acquisitions

165.1

Margin:

20.1%

Avg. FX Rates1H 2012/13 1H 2011/12

USD/CHF 0.95 0.85

EUR/CHF 1.20 1.21

March 2013

HALF YEAR 2012/13


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HALF-YEAR 2012/13

DETAILS BY BUSINESS SEGMENTS

In CHF million 1H 2011/12 1H 2012/13Growth

in lcOrganicGrowth

ExternalGrowth

FX impact

Sales

HI 723.8 801.2 +4.5% +2.4% +2.1% +44.6 (+ 6.2%)

CI 39.2 71.2 +70.5% +70.5% - +4.4 (+11.3%)

Group 763.0 872.4 +7.9% +5.9% +2.0% + 49.0 (+6.4%)

EBITA

HI 158.9 187.6 +4.8% +4.6% +0.2% +21.0 (+13.2%)

CI -20.6 2.0 n/a n/a n/a +0.9

Corporate - -2.6* n/a n/a n/a n/a

Group 138.4 187.0 +19.3% +19.1% +0.2% +21.9 (+15.8%)

* Out-of-court settlement with Deminor

March 2013

HALF YEAR 2012/13


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HALF-YEAR 2012/13

FINANCIAL RESULTS AND INCOME TAXES

in CHF million 1H 2011/12 1H 2012/13 Comments

EBITA 138.4 187.0

Amortization/Impairment -15.3 -12.6

No impairment in 1H 2012/13

vs. impairment of CHF 4.9m in

1H 2011/12

Operating profit (EBIT)in % of sales 123.116.1% 174.420.0%

Financial result -3.5 -2.1Lower net debt level, higher

income from associates/JVs

Income before taxes 119.6 172.3

Income taxes -15.9 -23.1 Tax rate 13.3% (PY 13.4%)

Income after taxesin % of sales

103.7

13.6%

149.2

17.1%

Growth of + 43.9%

March 2013

HALF YEAR 2012/13


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HALF-YEAR 2012/13

SIGNIFICANT INCREASE IN FREE CASH FLOW

in CHF million 1H 2011/12 1H 2012/13

Cash flow before changes in

net working capital169.7 218.5

Changes in net working capital -57.4 -51.4

Operating cash flow

in % of sales112.314.7%

167.119.2%

Cash flow from investing activities (excl. acquisitions) -28.5 -40.0

Operating free cash flow

in % of sales

83.8

11.0%

127.1

14.6%

Free cash flow 47.3 86.3

Cash flow from financing activities -105.8 -79.2

Changes in cash -61.4 8.5

March 2013

HALF YEAR 2012/13


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HALF-YEAR 2012/13

BALANCE SHEET: SOUND FINANCIAL POSITION

in CHF million31 Mar2012

30 Sep2012

Comments

Net working capital 163.4 207.4Higher inventory, lower payables and

FX effect

Days sales outstanding (DSO) 72 73

Days inventory outstanding (DIO) 122 140 New HI platform launch and timing oflarger government tender delivery in CI

Capital employed 1,540 1,647FX effect

Higher net working capital

Net debt 64.5 51.4Considers dividend payment of

CHF 79.9 m

Equity 1,476 1,596

Equity in % of total assets 64.5% 67.1%

March 2013

OUTLOOK


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Page 62

OUTLOOK

GUIDANCE IN LOCAL CURRENCIES CONFIRMED

If todays currency situation remains unchanged, positive FX

impact will continue to add to the y-o-y growth

Currency benefit likely to be less significant in 2H

GuidanceFY 2012/13*

Half-Year (actuals)2012/13

Sales

Sales growth in lc

thereof acquisition related growth

FX-impact

Total sales growth in CHF

7%-9%

approx. 1%-2%

n/a

n/a

7.9%

2.0%

6.4%

14.3%

EBITA

EBITA growth in lc

FX-impact

Total EBITA growth in CHF

15%-20%

n/a

n/a

19.3%

15.8%

35.1%

* Unchanged compared to guidance issued in May 2012

March 2013

OUTLOOK


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Page 63

0.70

0.75

0.80

0.85

0.90

0.95

1.00

Apr

Ma

Jun

Jul-

Au

Se

Oct

Oct

No

De

JanFe

Ma

Apr

Ma

Jun

Jul-

Au

OUTLOOK

FX IMPACT ON SALES AND MARGINS

Rate Sales EBITA

USD/CHF +/- 5% +/- CHF 34 million +/- CHF 11 million

EUR/CHF +/- 5% +/- CHF 25 million +/- CHF 15 million

USD/CHF EUR/CHF

0.70

0.75

0.80

0.85

0.90

0.95

1.00

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

USD Avg FY 11/12 Avg 1H 12/13

1.001.05

1.10

1.15

1.20

1.25

1.30

1.35

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

EUR Avg FY 11/12 Avg 1H 12/13

March 2013

BUSINESS CASE


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BUSINESS CASE

CLEAR AND FOCUSED STRATEGY CUSTOMER DRIVEN INNOVATION

March 2013

SONOVA: HEAR THE WORLD

Key to our success - Our customers and our employees

Broadest product and service offering / portfolio - Hearing instruments (Phonak, Unitron)

- Cochlear implants (Advanced Bionics)

- Professional services (Connect Hearing Group)

Strong competitive positions - Leading position in hearing instruments- Strong contender on cochlear implants

- Strong position in selected key retail markets

Significant market share gain potential - High R&D spend fast product introduction

- Differentiated multi-brand strategy

- Optimized multi-channel approach

Strong product pipelines - High innovation rate and rapid new product introduction

Productivity / efficiency gains - Leverage existing global infrastructure to expand margins

5-year financial targets (at constant FX rates) - EBITA margin: return to mid-twenties

- ROCE: expand to low-thirties


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THANK YOU VERY MUCH

Sonova Hearing Aid Presentation_March_2013

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