Sonova Full-Year Results 2008/09

Sonova Achieves Strong Organic Sales Growth of 7.8% and Extends Its Position as
Market and Innovation Leader
STÄFA, Switzerland--(Business Wire)--
Despite the adverse economic climate, Sonova (SIX:SOON) managed to achieve
record sales of CHF 1,249 million and further expanded its market share on the
back of organic growth of 7.8% in local currencies and 3.0% growth from
acquisitions. Profitability was maintained at a high level, with an EBITA margin
of 26.6%. Income after taxes amounted to CHF 284 million.

- New sales record of CHF 1,249 million - the Sonova Group has increased its
market share to around 23%, making it the world`s biggest manufacturer of
hearing systems according to sales

- Organic sales growth of 7.8% significantly exceeded hearing instrument market
growth

- 3.0% growth by acquisitions - distribution network further strengthened
through acquisitions and foundation of new Group Companies

- EBITA margin of 26.6% maintained at a high level despite negative currency
effects

- 62% of sales achieved with products launched less than two years ago - most
innovative and comprehensive product portfolio in the industry

- New product releases: the hearing systems Versáta, Certéna, Audéo YES, Next
and 360 set new benchmarks in hearing system technology

- Solid income after taxes of CHF 284 million achieved - proposal of unchanged
dividend of CHF 1.00 to the Annual General Shareholders` Meeting

- Board of Directors proposes the election of three new members to the Annual
General Shareholders` Meeting

- Positive outlook for the financial year 2009/10: based on current market
conditions, the Sonova Group expects an organic growth of 6-8% in local
currencies and an EBITA margin around the previous year`s level

Significant organic sales growth

In the financial year 2008/09, the Sonova Group increased its sales from CHF
1,204.8 million to CHF 1,249.2 million, achieving solid overall growth of 3.7%
in Swiss francs. The Group`s organic sales growth was 7.8% in local currencies.
The Swiss franc appreciated against all major currencies in which Sonova
generates sales, with the exception of the Chinese yuan and Japanese yen.
Overall, this resulted in a negative currency impact of 7.1% on sales. Sonova
also completed a series of acquisitions which contributed a combined 3.0% to
sales growth. The growth of the overall hearing instrument market for the
financial year 2008/09 is estimated to be around 2% in terms of units sold. "We
significantly exceeded market growth and expanded our market share to around 23%
in value terms," CEO Valentin Chapero said. "This makes us the world`s biggest
manufacturer of hearing systems according to sales."

The highest growth was achieved in the Asia/Pacific region, at 18.4% in local
currencies, mainly as a result of increased sales in Japan and the continuing
penetration of the Chinese market. Europe posted a very solid performance,
achieving growth of 6.9% in local currencies. Key markets such as Germany,
France and Italy continued to benefit from robust demand. The Americas region
reported growth of 12.9% in local currencies, with especially strong growth
achieved in the USA, Canada and Brazil.

In 2008/09 the growth of the various product groups was disproportionately
influenced by strong demand for business class and economy class hearing
systems. Growth in these market segments came to 24.6% and 18.1% respectively in
local currencies. First class hearing systems now account for a smaller
proportion of Group sales. During the financial year 2008/09, first class
hearing systems accounted for 26% of Sonova`s Group sales, compared with 23% for
business class and 30% for economy class systems.

Wireless communication systems achieved growth of 13.0% in local currencies.
Sonova`s sales from miscellaneous products and services increased by 11.5% in
local currencies.

High level of profitability

During the reporting period Sonova was able to increase its gross profit from
CHF 841.6 million to CHF 867.2 million despite the challenging market
conditions. The gross profit margin of 69.4% lowered somewhat from last year`s
figure of 69.9%.

During the financial year 2008/09 Sonova achieved an operating profit (EBITA) of
CHF 331.8 million, compared with CHF 339.8 million in the previous year. The
EBITA margin slipped from 28.2% to 26.6% mainly due to the negative currency
effects mentioned above. The adverse effects were partly offset by savings in
materials procurement, economies of scale in production and the early launch of
a cost-saving program across the entire Group. The proportion of added value
from Asia increased, while production facilities in Vietnam and China were
expanded further, thus improving the efficient cost structure of Sonova`s
production network. During the reporting period spending on sales, marketing and
administration increased to 36.7% of total sales, compared with 35.2% in the
prior year. Sales and marketing was expanded, mainly through a number of
acquisitions to strengthen existing sales channels.

Because of the lower operating profit, the slight decline in the financial
result and the modest increase in tax expenses, Sonova`s income after taxes for
the financial year 2008/09 came to CHF 284.1 million compared with CHF 305.2
million in the previous financial year.

In view of the Group`s positive result, the Board of Directors will be
submitting a proposal to the Annual General Shareholders` Meeting on June 10,
2009 to pay out a dividend of CHF 1.00 per share, the same as last year.

Lead in innovation further extended

In the financial year 2008/09 the Sonova Group generated 62% of sales with
products less than two years old, demonstrating its technological leadership
over its competitors. Spending on Research & Development (R&D) came to 6.2% of
Group sales, the same level as last year. Under its two core brands Phonak and
Unitron, Sonova launched several new products on the market in 2008/09 and was
able to establish Phonak`s entire portfolio on the new CORE platform within 12
months. Unitron managed to significantly improve its market position and
strengthen its brand. New product releases such as the hearing systems Versáta,
Certéna, Audéo YES, Next and 360 have been accepted very well by the market and
set new benchmarks in hearing system technology. Sonova today offers the most
innovative and comprehensive product portfolio in the industry.

Increased investment activity

Sonova`s free cash flow in the financial year 2008/09 was CHF 79.0 million
compared with CHF 219.4 million in the previous year. During the reporting
period the Sonova Group invested heavily in the future of the business,
including new production facilities in Stäfa, Switzerland and in Suzhou, China.
Sonova invested cash funds of CHF 97.3 million in various smaller acquisitions,
CHF 60.8 million more than last year. The free cash flow was mainly used for
increasing dividend payments to shareholders and for the share buy-back program.
Shares have been bought back until October 2008, to date Sonova has repurchased
3.2% of outstanding shares.

Proposal for the election of new members to the Board of Directors

The Board of Directors will propose the election of three new members to the
Annual General Shareholders` Meeting on June 10, 2009. Anssi Vanjoki, Ronald van
der Vis, and Dr. Valentin Chapero are nominated for election to the Board of
Directors. Anssi Vanjoki (born in 1956, Finnish citizen) is Executive Vice
President and General Manager of Nokia`s "Markets" unit since 2008 and a member
of the Nokia Group Executive Board since 1998. In addition, he is

Chairman of the Board of Directors of Amer Group Plc, one of the world`s leading
sports equipment companies, headquartered in Finland. Ronald van der Vis (born
in 1967, Dutch citizen) was Chief Executive Officer of Pearle Europe B.V., a
leading optical retail group, until May 2009. In June 2009, he will be appointed
Executive Director of Esprit Holdings Limited, an international fashion group.
Following a transition period, he will also be appointed Group Chief Executive
Officer. In addition, he is a member of the Supervisory Board of Grand Vision
S.A., France, a leading European optical retail chain. Valentin Chapero (born in
1956, Spanish citizen) is CEO of the Sonova Group since October 2002. He is also
Chairman of the industry body European Hearing Instrument Manufacturers`
Association (EHIMA).

Positive outlook unchanged

The Sonova Group does not expect any change in the key growth drivers of the
hearing instrument market. In the medium to long term, demographic trends,
higher market penetration and the Group`s expanding market share will ensure
that Sonova will grow faster than the long-term trend for the overall market of
4-7% p.a. measured by units sold. For the financial year 2009/10 based on the
current market conditions and barring unforeseen events, the Sonova Group
expects organic sales growth of 6-8% in local currencies and an EBITA margin
around the previous year`s level.

- end -

The Annual Report 2008/09 can be downloaded from:
www.sonova.com/en/investors/annualreports

Key Figures Sonova Group (Consolidated)

in 1,000 CHF unless otherwise specified 2008/091) Reported Underlying
performance performance

2007/082)
2007/082)/3)
Sales 1,249,197 1,204,779 1,204,779
change compared to previous year (%) 3.7 12.3 12.3
Gross profit 867,218 841,584 841,584
change compared to previous year (%) 3.0 15.0 15.0
in % of sales 69.4 69.9 69.9
Research & development costs 77,377 76,454 76,454
in % of sales 6.2 6.3 6.3
Sales & marketing costs 340,312 309,200 309,200
in % of sales 27.2 25.7 25.7
Operating profit before acquisition-related amortization (EBITA) 331,778 331,737 339,752
change compared to previous year (%) (2.3) 17.0 19.8
in % of sales 26.6 27.5 28.2
Operating profit (EBIT) 325,014 326,743 334,758
change compared to previous year (%) (2.9) 16.8 19.7
in % of sales 26.0 27.1 27.8
Income after taxes 284,110 274,140 305,196
change compared to previous year (%) (6.9) 12.9 25.7
in % of sales 22.7 22.8 25.3
Number of employees (average) 5,108 4,351 4,351
change compared to previous year (%) 17.4 14.1 14.1
Number of employees (end of period) 5,339 4,746 4,746
change compared to previous year (%) 12.5 18.0 18.0
Net cash4) 227,689 311,647 311,647
Net working capital5) 152,355 107,890 107,890
in % of sales 12.2 9.0 9.0
Capital expenditure (tangible and intangible assets)6) 75,985 55,892 55,892
Capital employed7) 798,934 608,207 608,207
in % of sales 64.0 50.5 50.5
Total assets 1,426,560 1,273,928 1,273,928
Equity 1,026,623 919,854 919,854
Equity financing ratio (%)8) 72.0 72.2 72.2
Free cash flow9) 79,003 219,392 219,392
in % of sales 6.3 18.2 18.2
Return on capital employed (%)10) 46.2 56.6 57.9
Return on equity (%)11) 29.2 30.2 33.6
Basic earnings per share (CHF) 4.348 4.087 4.551
Diluted earnings per share (CHF) 4.330 4.044 4.503
Dividend per share (CHF) 1.0012) 1.00 1.00

1) All changes compared to previous year are based on the
underlying performance 2007/08.
2) Restated as a result of initial application of IFRIC 14, for
details refer to Note 2 in the consolidated financial statements of
the Annual Report 2008/09.
3) Excluding one-off costs for the prohibited acquisition of
the GN ReSound Group (see Note 2 in the consolidated financial
statements of the Annual Report 2008/09). Balance sheet and cash
flow as reported.
4) Cash and cash equivalents + other current financial assets -
short-term debts - other current financial liabilities - non-current
financial liabilities.
5) Receivables + inventories - trade payables - current income
tax liabilities - other short-term liabilities - short-term
provisions.
6) Excluding goodwill and intangibles relating to acquisitions.
7) Total assets - cash and cash equivalents - other current
financial assets - trade payables - other liabilities - provisions -
tax liabilities.
8) Equity in % of total assets.
9) Cash flow from operating activities + cash flow from
investing activities.
10) EBIT in % of capital employed (average).
11) Income after taxes in % of equity (average).
12) Proposal to the Annual General Shareholders' Meeting of
June 10, 2009.

Disclaimer

This Media Release contains forward-looking statements which offer no guarantee
with regard to future performance. These statements are made on the basis of
management`s views and assumptions regarding future events and business
performance at the time the statements are made. They are subject to risks and
uncertainties including, but not confined to, future global economic conditions,
exchange rates, legal provisions, market conditions, activities by competitors
and other factors outside the company`s control.

This is Sonova

Sonova is the leading provider of innovative hearing healthcare solutions. This
globally active group of companies is one of the world`s top three manufacturers
of hearing systems, the market leader in wireless communication systems for
audiology applications and a provider of professional solutions for hearing
protection. Sonova is pursuing a clear growth strategy and is intent on building
its market share. To this end it is constantly expanding its existing business
segments and branching out into other areas of the hearing healthcare industry.

Present in over 90 countries, and with a workforce of over 5,300 employees,
Sonova generated sales of CHF 1.249 billion in the financial year 2008/09 and a
net profit of CHF 284 million. This financially strong group of companies bases
its success on innovation, customer focus and proactive cost management.

Communication is a megatrend in our society. Modern communication requirements
and the sheer volume of audio information available - whether music or the
spoken word - continue to increase, so that hearing is becoming an increasingly
important facility. Due to demographic trends and harmful environmental impacts,
more and more people now suffer from hearing loss, and yet only roughly a fifth
of them make use of professional hearing solutions. Sonova therefore wants to
raise public awareness of the importance of hearing and highlight the social and
emotional impact of hearing loss, as well as providing information on potential
solutions. In the Hear the World initiative, for example, world-famous
celebrities stress the importance of good hearing.

The company has been successfully promoting understanding and communication for
over 60 years, and is ideally positioned to benefit from the trends in this
growth industry.

For more information please visit www.sonova.com.

Sonova shares (ticker symbol: SOON) have been listed on the SIX Swiss Exchange
since 1994.

Sonova
Dr. Holger Schimanke
Director Investor & Corporate Relations
Phone +41 58 928 33 44
Email holger.schimanke@sonova.com
or
Gina Francioli
Investor & Corporate Relations
Phone +41 58 928 33 47
Email gina.francioli@sonova.com

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