INVESTOR PRESENTATION - Sonova

INVESTOR PRESENTATION
June 2013

DISCLAIMER
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 management’s 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, changes
in 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.
June 2013
Page 2

VISION
AT SONOVA, WE ENVISION …
A WORLD WHERE
EVERYONE
ENJOYS THE DELIGHT OF
HEARING AND
THEREFORE LIVES A LIFE
WITHOUT LIMITATIONS
June 2013
Page 3

SONOVA GROUP
BROADEST OFFERING: HEARING INSTRUMENTS, COCHLEAR IMPLANTS …
HI Hearing Instruments
Behind-The-Ear hearing instruments (BTE)
FM systems
CI Cochlear Implants
Cochlear implants
Custom In-The-Ear hearing instruments (ITE)
Hearing protection
Wireless communication systems
Invisible extended-wear hearing instruments
… AND PROFESSIONAL AUDIOLOGICAL SERVICES
June 2013
Page 4

BUSINESS CASE
CLEAR AND FOCUSED STRATEGY – CUSTOMER DRIVEN INNOVATION
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
Financial targets until FY 2016/17
(at constant FX rates)
- EBITA margin: return to mid-twenties
- ROCE: expand to low-thirties
June 2013
Page 5

CONTENTS
1 MARKET PAGE 7
2 BUSINESS PAGE 11
3 CORPORATE STRATEGY PAGE 20
4 BUSINESS STRATEGIES PAGE 30
5 FINANCIAL INFORMATION PAGE 51
June 2013
Page 6

1. MARKET

MARKET
AROUND 15% OF ADULTS HAVE SOME DEGREE OF HEARING IMPAIRMENT
15%
PROFOUND
MODERATE
CI
HI
HI
MILD
HI
With hearing system
Without hearing system
END-USER MARKET – PENETRATION*
- Profound loss
- Moderate loss
- Mild loss
* Source: Several industry statistics, Sonova estimates
70%
50%
10%
LOW PENETRATION RATE – AROUND 20% IN DEVELOPED COUNTRIES
June 2013
Page 8

MARKET
HEARING SOLUTIONS: INSTRUMENTS, IMPLANTS AND SERVICES
HEARING INSTRUMENTS HI
CI
- Market Size
- Market CAGR
- HI Size (units)
~ CHF 4.3 billion
~ + 2-4%
10-11 million
HI
COCHLEAR IMPLANTS CI
- Market Size
- Market CAGR
- CI Size (units)
~ CHF 900 million
~ +10%
~ 40 thousand
TOTAL HEARING CARE MARKET
- Market Size
- Market CAGR
- HI Size (units)
- CI Size (units)
~ CHF 15-16 billion
~ + 3-5%
10-11 million
~ 40 thousand
June 2013
Page 9

MARKET
SERVICE CHANNELS: KEY TO ACCESS END-USERS
HOSPITALS
GOVERNMENT
OTHERS
INDEPENDENTS
HEARING INSTRUMENTS HI
- Market Size
- Market CAGR
- HI Size (units)
~ CHF 4.3 billion
~ + 2-4%
10-11 million
BUYING
GROUPS
LARGE
RETAIL
ACCOUNTS
GLOBAL
KEY
ACCOUNTS
COCHLEAR IMPLANTS CI
- Market Size
- Market CAGR
- CI Size (units)
~ CHF 900 million
~ +10%
~ 40 thousand
TOTAL HEARING CARE MARKET
- Market Size
- Market CAGR
- HI Size (units)
- CI Size (units)
~ CHF 15-16 billion
~ + 3-5%
10-11 million
~ 40 thousand
June 2013
Page 10

2. BUSINESS

SONOVA GROUP
PERFORMANCE HISTORY – STRONG FINANCIAL TRACK RECORD
SALES
in CHF million
2'000
1'800
1'600
1'400
1'200
1'000
800
600
400
200
0
1H
07/08 08/09 09/10 10/11 11/12 12/13 13/14
2H
EBITA
in CHF million
450
400
350
300
250
200
150
100
50
0
07/08 08/09 09/10 10/11 11/12 12/13 13/14
EBITA
margin in %
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 CAGR 5-y
Sales growth reported +3.7% +20.1% +7.8% +0.2% +10.8% +8.3%
Sales growth in LC +10.8% +23.8% +13.3% +11.6% +7.4% +13.2%
EBITA margin 26.6% 28.0% 20.2% 19.5% 21.5% N/A
Basic EPS 4.35 3.32 3.50 3.71 4.62 +0.3%
Notes:
FY 2007/08 Excluding one-off cost for the prohibited acquisition of the GN ReSound Group
FY 2009/10 Restated based on finalization of the acquisition accounting of Advanced Bionics
FY 2012/13 Excluding one-off cost for AB Vendor B provision increase, AB Rixheim restructuring and settlement with a group of investors
June 2013
Page 12

SONOVA GROUP
WELL ESTABLISHED GLOBAL INFRASTRUCTURE AND NETWORK
Newark
(USA)
Kitchener
(CAN)
Stäfa (CH)
Suzhou (CN)
Valencia (USA)
Murten (CH)
Ho Chi Minh City
(VN)
Sonova & Phonak HQ & Centers
Unitron Center
Phonak Communications Center
AB Center
InSound Center
Operation Centers
WHS Group Companies
Distributors
STRONG LOCAL PRESENCE – SUPPORTING CUSTOMERS WORLDWIDE
June 2013
Page 13

SONOVA GROUP
EUROPE AND AMERICAS – MAIN CONTRIBUTORS TO GROUP SALES
SALES
in CHF million
2'000
1'800
1'600
1'400
1'200
1'000
'800
'600
'400
'200
'0
07/08 08/09 09/10 10/11 11/12 12/13 13/14
SALES
in CHF million
2'000
1'800
1'600
1'400
1'200
1'000
'800
'600
'400
'200
'0
07/08 08/09 09/10 10/11 11/12 12/13 12/13
EU AM AP
2008/09 2009/10 2010/11 2011/12 2012/13
CAGR
5-year
EU - Sales growth in LC +6.4% +23.0% +11.3% +13.9% +5.3% +11.8%
AM - Sales growth in LC +12.9% +26.0% +16.9% +7.8% +7.1% +13.9%
AP - Sales growth in LC +22.3% +15.3% +2.7% +24.0% +17.7% +16.1%
June 2013
Page 14

MARKET POSITION
EXPANDING STRONG HI POSITION INTO LARGER HEARING CARE MARKET
HEARING INSTRUMENTS HI
- Market Size
- Market CAGR
- HI Size (units)
~ CHF 4.3 billion
~ + 2-4%
10-11 million
COCHLEAR IMPLANTS CI
- Market Size
- Market CAGR
- CI Size (units)
~ CHF 900 million
~ +10%
~ 40 thousand
TOTAL HEARING CARE MARKET
- Market Size
- Market CAGR
- HI Size (units)
- CI Size (units)
~ CHF 15-16 billion
~ + 3-5%
10-11 million
~ 40 thousand
June 2013
Page 15

MARKET POSITION
SERVICE CHANNELS: STRONG PARTNER TO IND, LRA, BG AND GOVT
HEARING INSTRUMENTS HI
BUYING
GROUPS
HOSPITALS
GOVERNMENT
OTHERS
SOON
Sales Split
INDEPENDENTS
- Market Size
- Market CAGR
- HI Size (units)
~ CHF 4.3 billion
~ + 2-4%
10-11 million
LARGE
RETAIL
ACCOUNTS
GLOBAL
KEY
ACCOUNTS
COCHLEAR IMPLANTS CI
- Market Size
- Market CAGR
- CI Size (units)
~ CHF 900 million
~ +10%
~ 40 thousand
TOTAL HEARING CARE MARKET
- Market Size
- Market CAGR
- HI Size (units)
- CI Size (units)
~ CHF 15-16 billion
~ + 3-5%
10-11 million
~ 40 thousand
June 2013
Page 16

BUSINESSES
BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES
SONOVA
Group
HEARING INSTRUMENT (HI)
Segment
IMPLANT (CI)
Segment
HI
RETAIL
HI
UNITRON
HI
PHONAK
CI
ADVANCED
BIONICS
Business
Business
Business
Business
June 2013
Page 17

HI SEGMENT
PERFORMANCE HISTORY – STRONG FINANCIAL TRACK RECORD
SALES
in CHF million
2'000
1'800
1'600
1'400
1'200
1'000
800
600
400
200
0
1H
07/08 08/09 09/10 10/11 11/12 12/13
2H
EBITA
in CHF million
450
400
350
300
250
200
150
100
50
0
07/08 08/09 09/10 10/11 11/12 12/13
EBITA
margin in %
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 CAGR 5-y
Sales growth reported +3.7% +18.1% +4.8% -1.4% +8.2% +6.5%
Sales growth in LC +10.8% +21.7% +10.1% +9.7% +4.9% +11.3%
EBITA margin 27.2% 29.0% 24.1% 22.3% 23.3% N/A
Note: FY 2007/08 Excluding one-off cost for the prohibited acquisition of the GN ReSound Group
June 2013
Page 18

CI SEGMENT
PERFORMANCE HISTORY
SALES
in CHF million
150
1H
2H
EBITA
in CHF million
10
EBITA
margin in %
20%
125
0
0%
100
-10
-20%
75
-20
-40%
50
-30
-60%
25
-40
-80%
0
07/08 08/09 09/10 10/11 11/12 12/13
-50
07/08 08/09 09/10 10/11 11/12 12/13
-100%
FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 CAGR 3-y
Sales growth reported -- -- +180.5% +36.0% +52.3% > +80.0%
Sales growth in LC -- -- +202.1% +53.5% +47.1% > +80.0%
EBITA margin* -- -31.0% -63.4% -25.0% 1.2% N/A
* FY 2012/13 Excluding one-off cost for AB Vendor B provision at AB, AB Rixheim restructuring and settlement with a group of investors
June 2013
Page 19

3. CORPORATE STRATEGY

MISSION
WE STRIVE TO BE RECOGNIZED AS THE INNOVATION LEADER …
HI Hearing Instruments
Behind-The-Ear hearing instruments (BTE)
FM systems
CI Cochlear Implants
Cochlear implants
Custom In-The-Ear hearing instruments (ITE)
Hearing protection
Wireless communication systems
Invisible extended-wear hearing instruments
… IN THE GLOBAL HEARING CARE MARKET
June 2013
Page 21

FINANCIAL TARGETS
ON COURSE FOR MID TERM FINANCIAL TARGETS
Notes:
FY 2007/08 Excluding one-off cost for the prohibited acquisition of the GN ReSound Group
FY 2009/10 Restated based on finalization of the acquisition accounting of Advanced Bionics
FY 2012/13 Excluding one-off cost for AB Vendor B provision at AB, AB Rixheim restructuring and settlement with a group of investors
June 2013
Page 22

STRATEGY
SIX KEY STRATEGIES DRIVING CORE SALES AND EARNINGS GROWTH
CORPORATE STRATEGIES
BUSINESS STRATEGIES
1 INNOVATION
2 MARKET
3 PRODUCT
4 PORTFOLIO
5 RESOURCE
1 HI PHONAK
2 HI UNITRON
3 HI RETAIL
4 CI ADVANCED BIONICS
6 ACQUISITION
June 2013
Page 23

INNOVATION STRATEGY
FOCUS ON CONTINUOUS INNOVATION TO GROW SALES AND EARNINGS
Q1 13 Q2 13 Q3 13 Q4 13
MARKETING
Q1 14 Q2 14 Q3 14 Q4 14
Q1 15 Q2 15
SALES & DISTRIBUTION
NEW PRODUCTS
PRODUCTIVITY & EFFICIENCY
RESOURCES & PROCESSES
CORE: DRIVE STRONG NEW PRODUCT PIPELINE – GROSS R&D 7-8% OF SALES
June 2013
Page 24

MARKET STRATEGY
GROW MARKET POSITION ALONG 4 MAIN GROWTH VECTORS
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
FOCUS ON KEY INITIATIVES TO SUPPORT GROWTH STRATEGY
June 2013
Page 25

PRODUCT STRATEGY
PROVIDE COMPLETE CUSTOMER SOLUTIONS: HW, SW AND SERVICES
PLATFORM CONCEPT APPROACH TO SOLUTION DEVELOPMENT
June 2013
Page 26

PORTFOLIO STRATEGY
DEVELOP BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES
INVEST
RETURN
MARKET GROWTH
Low
LYRIC
CI
High
HI
COM
STAR
High
High
DOG
COW
Low
Low
MARKET SHARE
LEAD INNOVATION IN HEARING INSTRUMENTS AND IMPLANTS
June 2013
Page 27

RESOURCE STRATEGY
LEVERAGE GLOBAL INFRASTRUCTURE TO EXPAND MARGINS
200
AMERICAS EUROPE APAC
200
200
150
100
50
0
SALES
OPEX
2012 2016
150
100
50
0
SALES
OPEX
2012 2016
150
100
50
0
SALES
OPEX
2012 2016
RE-BALANCE GLOBAL OPEX BASE TO CREATE NATURAL HEDGE
June 2013
Page 28

ACQUISITION STRATEGY
INVEST TO LEVERAGE EXISTING CHANNELS AND PRODUCTS
3,000
,0
06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16
Channels
HI
CI
AB
ISM
TARGETS: STRICT CRITERIA FOR STRATEGIC AND FINANCIAL FIT
June 2013
Page 29

4. BUSINESS STRATEGIES

PHONAK
SONOVA: BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES
SONOVA
Group
HEARING INSTRUMENT (HI)
Segment
IMPLANT (CI)
Segment
HI
RETAIL
HI
UNITRON
HI
PHONAK
CI
ADVANCED
BIONICS
Business
Business
Business
Business
June 2013
Page 31

PHONAK
BUSINESS STRATEGY
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 2013/14 - B2B/B2C marketing campaign: «Phonak engaging voices»
- New product launch Spring 2013
- New product launch Fall 2013
- Lyric 2.3
- DM (2.4 GHz) communication / wireless connectivity standard “ROGER”
- China market growth and expansion (lead)
- etc.
June 2013
Page 32

PHONAK
MARKETS: COVER BROADEST GLOBAL SALES & SUPPORT NETWORK
AP
AM
EU
FURTHER PENETRATE AM AND EU – EXPAND POSITIONS IN AP (CHINA)
June 2013
Page 33

PHONAK
PRODUCT PIPELINE: DRIVE HIGH INNOVATION & PRODUCT LAUNCH RATE
TIMELINE / CY
1H 11 2H 11 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14
1H 15 2H 15
HI - Premium
HI - Advanced
HI - Standard
F 1
F 3
F 1 F 1
F 4
F 2
F 2
F 5
F 5
BTE – Bolero Q
ITE – Virto Q
RIC – Audéo Q
POWER – Naída Q
F 5
F 1
F 2
F 3
F 4
F 5
HI - Essential/Basic
F1 / 4
HI - Platform
SPICE (new HW / new DSP / 65nm) QUEST (new HW / new core SW / 65nm) NEXT PLATFORM
HI - New EW Format
Lyric2
Lyric3
Fitting Software
(TARGET)
T 1.1
T 2.0
T 2.1 T 3.0 T 3.1 T 3.2 T 3.3 T 4.0 T 4.1 T 4.2
Communication
FM System (analog)
Roger (digital / 2.4 GHz)
Note: Subject to change
COMPLETE RANGE ACROSS ALL FORMATS AND PERFORMANCE LEVELS
June 2013
Page 34

PHONAK PRODUCT PORTFOLIO
BTE product line ITE product line RIC Power Pediatric
Premium Phonak Bolero Q90 Phonak Virto Q90 Audéo Q90 Naída Q90
Advanced Phonak Bolero Q70 Phonak Virto Q70 Audéo Q70 Naída Q70 Nios S V*
Standard Phonak Bolero Q50 Phonak Virto Q50 Audéo Q50 Naída Q50 Nios S III*
Essential Phonak Dalia* Phonak Dalia* Audéo Q30 Naída Q30
Basic Milo* Milo*
* based on previous generation platforms
June 2013
Page 35

UNITRON
SONOVA: BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES
SONOVA
Group
HEARING INSTRUMENT (HI)
Segment
IMPLANT (CI)
Segment
HI
RETAIL
HI
UNITRON
HI
PHONAK
CI
ADVANCED
BIONICS
Business
Business
Business
Business
June 2013
Page 36

UNITRON
BUSINESS STRATEGY
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 2013/14 - B2B Marketing campaign “favorite sound”
- UT customer experience initiatives
- New product launch Spring 2013
- New product launch Fall 2013
- China market growth and expansion (complement Phonak initiative)
- etc.
June 2013
Page 37

UNITRON
MARKETS: EXPAND GLOBAL NETWORK FROM STRONG BASE IN NA
AP
AM
EU
DEVELOP POSITIONS IN EU – SUPPORT SONOVA EXPANSION IN AP (CHINA)
June 2013
Page 38

UNITRON
PRODUCT PIPELINE: DRIVE FOCUSED PRODUCT INNOVATION
TIMELINE / CY
1H 11 2H 11 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14
1H 15 2H 15
HI - Premium
HI - Advanced
HI - Standard
Q 1
M 1
Q PRO
M PRO
Q – FLEX 1
M– FLEX 1
Moxi Kiss – RIC
FLEX Trial&Upgrade
Q- M 2
Q PRO
M PRO
F 1
F 2
F 3
HI - Essential/Basic
HI - Platform
ERA (new HW / new DSP / 65nm)
NEXT PLATFORM
Fitting Software
(TRUEFIT)
TF 1.0
TF 1.1 TF 2.0 TF 2.1 TF 2.2 TF 2.3 TF 2.3 TF 4.0 TF 4.1
Note: Subject to change
FLEXIBLE RANGE ACROSS 3 FORMATS AND ALL PERFORMANCE LEVELS
June 2013
Page 39

UNITRON PRODUCT PORTFOLIO
* based on previous generation platforms
BTE product line ITE product line RIC Power Flex Trial
Premium Quantum Pro Quantum Pro Moxi Kiss Pro Moxi Pro
Advanced
Quantum 20 Quantum 20 Moxi Kiss 20 Moxi 20 Max 20
Quantum 12 Quantum 12 Moxi Kiss 12 Moxi 12
Standard Quantum 6 Quantum 6 Moxi Kiss 6 Moxi 6 Max 6
Essential Quantum E Quantum E Moxi Kiss E Moxi E Max E
Basic Shine* Shine*
Any Performance
Level
June 2013
Page 40

CONNECT HEARING
SONOVA: BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES
SONOVA
Group
HEARING INSTRUMENT (HI)
Segment
IMPLANT (CI)
Segment
HI
RETAIL
HI
UNITRON
HI
PHONAK
CI
ADVANCED
BIONICS
Business
Business
Business
Business
June 2013
Page 41

CONNECT HEARING
BUSINESS STRATEGY
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 2013/14 - Selected acquisitions and store openings
- New store concepts (e.g. Boots/DOHC)
- CHG Retail Business Solution (RBT)
- Strategic branding approach
- etc.
June 2013
Page 42

CONNECT HEARING
MARKETS: BUILD STRONG SERVICE POSITIONS IN KEY MARKETS
AP
AM
EU
FOCUS ON: US, CA, BR, UK, FR, BE, AT, AUS/NZ
June 2013
Page 43

CONNECT HEARING OFFERING
MARKET LEADING SHOP IN SHOP CONCEPT – EXAMPLE DOHC / BOOTS (UK)
Well-established partnership between David
Ormerod Hearing Centres (DOHC) and
Boots since 2003
Number of locations in the UK grew from 64
to more than 340 during that time
Boots hearingcare offers professional
audiological services at attractive locations
Clear synergies for both sides from
increased store traffic
Partnership expanded through 49% minority
stake in DOHC by Boots
PREMIUM MARKET ACCESS BY PARTNERSHIP WITH LEADING PHARMACY CHAIN
June 2013
Page 44

ADVANCED BIONICS
SONOVA: BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES
SONOVA
Group
HEARING INSTRUMENT (HI)
Segment
IMPLANT (CI)
Segment
HI
RETAIL
HI
UNITRON
HI
PHONAK
CI
ADVANCED
BIONICS
Business
Business
Business
Business
June 2013
Page 45

ADVANCED BIONICS
BUSINESS STRATEGY
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 2013/14 - AB Partner Program for retail: «Think beyond Hearing Aids»
- AB / PH system & product pipeline
- New product launches 2013/14 (implants, electrodes, processors)
- China market development
- etc.
June 2013
Page 46

ADVANCED BIONICS
MARKETS: EXPAND GLOBAL NETWORK FROM STRONG BASE IN US
AP
AM
EU
GROW POSITIONS IN EU, BR, JP – BUILD PLATFORM IN CHINA
June 2013
Page 47

ADVANCED BIONICS
HOW A COCHLEAR IMPLANT WORKS
Magnetic headpiece
Transmits digital signal
wirelessly to the implant
Implant
Converts digital
information into
electrical signal
Soundprocessor
Sound is captured and
converted into detailed
digital information
Electrode
Delivers signal as
electrical stimulation to
the auditory nerve
June 2013
Page 48

ADVANCED BIONICS
PRODUCT PIPELINE: ACCELERATE INNOVATION RATE – LEVERAGE PH
TIMELINE / CY
1H 11 2H 11 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14
1H 15 2H 15
CI - Electrodes
FDA
CE
HiFocus
Mid-Scala
N El 2 N El 3
N El 2
N El 3
CI - Implants
FDA
CE
HiRes 90k
Advantage
N Imp 2 N Imp 3
N Imp 2
N Imp 3
CI - Processors
FDA
CE
Neptune
Neptune
N Pro 1
Naída CI Q70 N Pro
N
2
Pro 2
N Pro 3
N Pro 3
CI - Platform
WOLVERINE / QUEST (new HW / new DSP / 65nm)
NEXT PLATFORM
Fitting Software
(SOUNDWAVE)
SW 2.0 SW 3.0 SW 4.0
Note: Subject to change, timing dependent upon regulatory approvals
EXPAND RANGE OF INNOVATIVE PROCESSORS, IMPLANTS, ELECTRODES
June 2013
Page 49

ADVANCED BIONICS PRODUCT PORTFOLIO
Implant HiRes 90K Advantage HiRes 90K
Electrodes HiFocus Mid-Scala HiFocus 1j HiFocus Helix
Sound Processors Naída CI* Neptune Harmony BTE
Software SoundWave 2.1
* approved in Europa and Canada, not yet approved in the US
June 2013
Page 50

5. FINANCIAL INFORMATION

FULL YEAR 2012/13
SUMMARY OF FINANCIAL RESULTS
– Solid sales growth
– Sales of CHF 1’795.3 million – up 10.8% in Swiss francs and 7.4% in LC
– All major regions contributing to the increase
– Strong EBITA growth and margin expansion – normalized for one-off charges
– Normalized EBITA of CHF 386.4 million – up 22.6% in Swiss francs and 15.4% in LC
– Normalized EBITA margin of 21.5%, expanding by 200 bps and by 140 bps in LC
– Reported EBITA of CHF 182.8 million – fully reflecting Vendor B provision increase
– Both segments contributing
– Robust growth in hearing instruments (+4.9% in LC) – EBITA margin expanding by 100 bps
– Break-even target reached in cochlear implants – supported by a strong growth of +47.1% in LC
– High growth in cash flow – sound financial position
– Operating free cash flow of CHF 318.6 million – up 33% in Swiss francs
– Net cash position of CHF 185.8 million
– Normalized ROCE of 22.6%, up from 19.2% in FY 2011/12
– Dividend increase of 33% to CHF 1.60 proposed
May 21, 2013
Page 52

FY 2012/13
SOLID FINANCIAL PERFORMANCE – NORMALIZED
in CHF million FY 2011/12 FY 2012/13 Δ % in CHF Δ % in LC
Sales 1'619.8 1'795.3 10.8% 7.4%
Gross profit 1'105.9 1'240.1 12.1% 8.2%
- Gross profit margin 68.3% 69.1%
OPEX 790.7 853.7 8.0% 5.4%
EBITA 315.2 386.4 22.6% 15.4%
- EBITA margin 19.5% 21.5%
Operating free cash flow 239.5 318.6 33.0%
EPS (in CHF) 3.71 4.62 24.5%
ROCE 19.2% 22.6%
EXPANSION OF GROSS PROFIT MARGIN - IN BOTH SEGMENTS
June 2013
Page 53

FY 2012/13
GROUP EBITA DEVELOPMENT
386.4
315.2 +43.4
+5.1
363.7
+22.7
-203.6
182.8
Margin:
19.5%
+48.5
+15.4%
Margin:
20.9%
+71.2
+22.6%
Margin:
21.5%
Margin:
10.2%
EBITA
2011/12
Organic
Growth
Acquisitions
EBITA
2012/13
const. FX
normalized
FX
effect
EBITA
2012/13
normalized
One-off
cost
2012/13
EBITA
(reported)
2012/13
Notes: Average FX rates: USD/CHF 0.94 (prior year: 0.88) and EUR/CHF 1.21 (prior year: 1.21)
One-off cost: AB Vendor-B case CHF 197.8m, restructuring AB Rixheim CHF 3.2m, settlement with a group of investors CHF 2.6m
SOLID EBITA IMPROVEMENT FROM ORGANIC GROWTH – CI BREAKING EVEN
June 2013
Page 54

FY 2012/13
DETAILS BY BUSINESS SEGMENTS
in CHF million 2011/12 2012/13
Sales
Growth
in lc
Growth in CHF
Hearing Instruments
- thereof organic
1’523.5 1’648.5 +4.9%
+2.6%
+8.2%
Cochlear Implants 96.3 146.7 +47.1% +52.3%
Group 1’619.8 1’795.3 +7.4% +10.8%
EBITA
Hearing Instruments 339.3 384.7 +6.7% +13.4%
Cochlear Implants -24.1 1.8 n/a n/a
Group 315.2 386.4 +15.4% +22.6%
June 2013
Page 55

FY 2012/13
OPERATING EXPENSES
in CHF million FY 2011/12 FY 2012/13 Δ % in CHF Δ % in LC
Research & Development 116.2 113.5 -2.3% -3.7%
in % of sales 7.2% 6.3%
Sales & Marketing 503.4 558.9 11.0% 8.0%
in % of sales 31.1% 31.1%
General & Administration 168.7 181.3 7.5% 5.4%
in % of sales 10.4% 10.1%
Subtotal 788.2 853.7 8.3% 5.7%
in % of sales 48.7% 47.6%
Other expenses* 2.5 203.6
* One-off cost: AB Vendor B case CHF 197.8m, restructuring AB Sarl CHF 3.2m, settlement with group of investors CHF 2.6m
SALES & MARKETING, G&A INCREASE: DRIVEN BY RETAIL ACQUISITION
INTEGRATION, CONCENTRATED PRODUCT LAUNCH AND LYRIC RAMP UP EFFORTS
June 2013
Page 56

FY 2012/13
R&D SPENDING – INCLUDING NET CAPITALIZED DEVELOPMENT COST
in CHF million / % of sales
123.2
7.6%
132.7
8.2%
140.0
7.8%
16.5 26.5
15.5
107.8
6.7%
+9.5
+7.7%
116.2 +5.5%
113.5
7.2%
+7.4
6.3%
2010/11 2011/12 2012/13
AB capitalized development costs (net of amortization)
R&D costs charged to the P&L
CONTINUING STRONG R&D INVESTMENTS DRIVE INNOVATION
June 2013
Page 57

FY 2012/13
REPORTED RESULTS AND INCOME TAXES
in CHF million FY 2011/12 FY 2012/13 Δ % in CHF
EBITA 315.2 182.8 -42.0%
Amortization / Impairment -27.5 -26.1 -5.0%
Operating profit (EBIT)
in % of sales
287.7
17.8%
156.7
8.7%
-45.5%
Financial result -5.9 -6.9 15.9%
Income before taxes 281.8 149.8 -46.8%
Income taxes -35.4 -37.8 6.8%
- Income tax rate 12.6% 25.2%
Income after taxes
in % of sales
246.4
15.2%
112.0
6.2%
-54.5%
POTENTIAL TAX EFFECT OF VENDOR B PROVISION INCREASE NOT CAPITALIZED
June 2013
Page 58

FY 2012/13
SIGNIFICANT INCREASE IN CASH FLOW
in CHF million FY 2011/12 FY 2012/13 Δ % in CHF
Cash flow before changes in NWC 387.5 443.7 14.5%
Changes in net working capital and taxes paid -82.7 -56.6 -31.5%
Operating cash flow
in % of sales
304.8
18.8%
387.1
21.6%
27.0%
Cash flow from investing activities (excl. acquisitions) -65.3 -68.5 4.9%
Operating free cash flow
in % of sales
239.5
14.8%
318.6
17.7%
33.0%
Cash consideration for acquisitions -83.1 -56.2 -32.4%
Free cash flow 156.4 262.4 67.7%
Cash flow from financing activities -127.5 -21.8 n/a
Changes in cash and cash equivalents 26.8 242.8 > 100%
OPERATING FREE CASH FLOW INCREASING 33.0%
June 2013
Page 59

FY 2012/13
BALANCE SHEET
in CHF million FY 2011/12 FY 2012/13 Δ % in CHF
Net working capital 163.4 187.1 14.5%
Days sales outstanding (DSO) 72 71 -1.4%
Days inventory outstanding (DIO) 122 148 21.3%
Capital employed 1'540.3 1'449.5 -5.9%
Net cash -64.4 185.8 > 100%
Equity 1'475.9 1'635.3 10.8%
Equity in % of total assets 64.5% 61.0%
TURNING NET CASH POSITIVE – INVENTORY INCREASES DRIVEN BY LAUNCHES
June 2013
Page 60

FY 2012/13
DIVIDEND – PROPOSED INCREASE BY 33% TO CHF 1.60
Dividend / distribution development in CHF per share
1.60
1.20 1.20 1.20
1.00 1.00
0.75
0.50
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
PROPOSED DIVIDEND REPRESENTS 35% OF NORMALIZED INCOME AFTER TAXES
June 2013
Page 61

OUTLOOK
FY 2013/14 GUIDANCE – IN LOCAL CURRENCIES
Sales
Sales growth in LC
thereof acquisition related growth
FX-impact
Total sales growth in CHF
EBITA
EBITA growth in lc
FX-impact
Total EBITA growth in CHF
Guidance
FY 2013/14
6%-8%
approx. 1%
n/a
n/a
9%-13%
n/a
n/a
Actual - normalized
FY 2012/13
7.4%
2.2%
3.4%
10.8%
15.4%
7.2%
22.6%
June 2013
Page 62

OUTLOOK
FY 2013/14 GUIDANCE – FX IMPACT ON SALES AND MARGINS
USD/CHF
EUR/CHF
1.00
0.95
0.90
0.85
0.80
0.75
0.70
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Rate Sales EBITA
USD/CHF +/- 5% +/- CHF 38 million +/- CHF 11 million
EUR/CHF +/- 5% +/- CHF 24 million +/- CHF 12 million
June 2013
Page 63

BUSINESS CASE
CLEAR AND FOCUSED STRATEGY – CUSTOMER DRIVEN INNOVATION
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
Financial targets until FY 2016/17
(at constant FX rates)
- EBITA margin: return to mid-twenties
- ROCE: expand to low-thirties
June 2013
Page 64

THANK YOU VERY MUCH