Annual Report 2010/11 - Sonova

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88 AdVANCEd BIoNICS RESUMES SAlES In April 2011, Advanced Bionics received CE certification from the European notified body TÜV for changes to the manufacturing process of the CI HiRes 90k and approval to resume distribution of the implant in European markets and other selected countries. The implant will be reintroduced in the United States market following pending approval from the United States Food and drug Administration. With the next product generation and the expansion of the international presence of Advanced Bionics, Sonova anticipates achieving above-market growth over the next few years. In addition to the product-related and technological advantages of leveraging Sonova’s hardware and software platforms, Advanced Bionics will also benefit from access to Sonova’s global sales organization and be in a position to expand its international sales and service capacity. SUSTAINABlE INVESTMENT FoR THE FUTURE operating free cash flow decreased in the year under review, from CHF 324.8 million to CHF 221.5 million. during the reporting period, Sonova invested heavily in the future of the business, including the development of new technologies, the market introduction of lyric outside the United States and the global expansion of sales channels and distribution capacities. Cash consideration for acquisitions amounted to CHF 149.9 million, clearly below the previous year’s level due to the acquisitions of Advanced Bionics and InSound Medical in 2009/10, but included the earn-out payment in 2010/11 of CHF 87.2 million related to InSound Medical. overall, the cash outflow from investing activities went down to CHF 273.0 million in financial year 2010/11 compared to previous year’s CHF 729.1 million, and included the completion of several acquisitions and the construction of the new high-tech pro duction facility in Stäfa. As a result, free cash flow was CHF 71.6 million compared to CHF –301.4 million in the previous year. The cash outflow from financing activities of CHF 236.1 million in the reporting period is mainly due to the repayment of CHF 200 million in loans related to the acquisition of Advanced Bionics. This loan is divided into two tranches: an initial loan of CHF 240 million repayable within maximum three years and a secondary loan of CHF 230 million with a five-year term. CHF 200 million of the first loan has been repaid as of March 2011. The net debt of Sonova has decreased by CHF 15 million. dividend payments to shareholders totalled CHF 79.4 million (2009/10: CHF 65.5 million). Cash and cash equivalents decreased by CHF 170.8 million to CHF 165.1 million. loW NET dEBT ANd SolId BAlANCE SHEET The capital invested by the Sonova Group has increased from CHF 1,388.5 million (restated) in 2009/10 to CHF 1456.0 million in financial year 2010/11, mainly due to increased intangible assets from acquisitions. Net working capital relative to sales has increased due to in creased inventory levels at the fiscal year end related to the launch of new products on the Spice generation platform. Average days sales outstanding for accounts re - ceivable have remained consistent with the previous year. As of March 31, 2011, the Group reported net debt of CHF 111.3 million compared to net debt of CHF 126.0 million in the previous year. The Group’s equity increased to CHF 1,344.7 million. At 61.9%, the equity financing ratio (equity as a percentage of total assets) remained at a high level. The return on capital employed (RoCE) was 19.0%, compared with 23.0% (restated) in 2009/10. The return on equity (RoE), therefore, went from 18.9% in the previous year to 17.7% in 2010/11. Recognizing the solid performance and cash flow generation of the core business during the 2010/11 year, as well as the strong financial position of the Group, the Board of directors will propose to the Annual General Shareholders’ Meeting on June 21, 2011 a distribution of CHF 1.20 per share, equal to the previous year’s dividend level, but without withholding taxes this year.
oUTlook 2011/12 We expect to achieve solid growth in the hearing instruments segment in the coming year. Even though the Ad vanced Bionics products will gradually return to the market following the recent TÜV certification, the fore cast of the hearing implants segment is dependent upon the timing of re-entry into the U.S. market. We expect overall sales in 2011/12 to be slower in the first half of the financial year because of reduced sales by Advanced Bionics. Furthermore, the strong Swiss franc will continue to ad versely impact the sales and earnings growth of the full year. FINANCIAl REVIEW 89
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THE HEARING CARE COMPANY All the So
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highLightS & Key figureS - New sale
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02 Foreword 06 Sonova Group 16 Hear
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from 2002 to 2004 and subsequently
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eaKinG barrierS - with talent and t
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ON THE WAY TO BECOMING A GLOBAL HEA
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and a global distribution network e
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THE SONOVA GROUP No hearring loosss
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Better hearing for people with norm
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StraiGHt From real liFe - cowboy ha
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THE HEARING INSTRUMENT MARKET - CON
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THE PHONAK SPICE GENERATION - THE S
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WIDE RANGE OF HEARING INSTRUMENTS T
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LYRIC - THE “CONTACT LENS FOR THE
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Sonova is investing heavily in the
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Eight years later, Evelyn almost co
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THE HEARING IMPLANTS SEGMENT In the
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The considerable strategic importan
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ABOUT ADVANCED BIONICS Advanced Bio
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worKinG - and communicating safely
Page 41 and 42: EMPLOYEES FOCUS ON PEOPLE One of th
Page 43 and 44: ISO 9001:2000 and 13485:2003 certif
Page 45 and 46: The key environmental data shown in
Page 47 and 48: ENVIRONMENTAL MANAGEMENT AT THE ST
Page 49 and 50: CAMBODIA - BETTER OPPORTUNITIES FOR
Page 51 and 52: Better hearing - better success at
Page 53 and 54: in critical moments. As a consequen
Page 55 and 56: CrOSS-SHArEHOLDInGS Sonova Holding
Page 57 and 58: BOArD Of DIrECTOrS The primary duty
Page 59 and 60: Andy rihs Co-founder, non-executive
Page 61 and 62: onald van der Vis non-executive mem
Page 63 and 64: AuDIT COMMITTEE The members of the
Page 65 and 66: Alexander Zschokke Interim CEO, GVP
Page 67 and 68: Dr Hans Leysieffer GVP research & D
Page 69 and 70: COmPenSatiOn and SharehOldingS - co
Page 71 and 72: The shares/rSus have a blocking per
Page 73 and 74: COMPEnSATIOn TO MEMBErS Of THE MAnA
Page 75 and 76: SHArEHOLDInGS Of MEMBErS Of THE BOA
Page 77 and 78: The following table shows the detai
Page 79 and 80: CHAnGES Of COnTrOL AnD DEfEnSE MEAS
Page 81 and 82: COMPEnSATIOn rEPOrT inveStOrS at SO
Page 83: develOPing SPeeCh CaPaBilitieS - mo
Page 86 and 87: 82 Financial Review - setting the c
Page 88 and 89: 84 SALES in CHF m EBITA in CHF m 1,
Page 90 and 91: 86 SUBSTANTIAl INVESTMENTS IN INNoV
Page 94 and 95: 90 5 year key Figures (Consolidated
Page 96 and 97: 92 Consolidated Income Statements 1
Page 98 and 99: 94 Consolidated Cash Flow Statement
Page 100 and 101: 96 NoTeS To THe CoNSoLIdATed FINANC
Page 102 and 103: 98 INveSTMeNTS IN JoINT veNTuReS In
Page 104 and 105: 100 LeASING Assets that are held un
Page 106 and 107: 102 SeGMeNT RePoRTING operating seg
Page 108 and 109: 104 3.5 derivative financial instru
Page 110 and 111: 106 3.7 Restatement of prior year
Page 112 and 113: 108 Consolidated Changes in Equity
Page 114 and 115: 110 5. segment information segment
Page 116 and 117: 112 6. other expenses, net 1,000 ch
Page 118 and 119: 114 Deferred tax assets and (liabil
Page 120 and 121: 116 11. cash and cash equivalents 1
Page 122 and 123: 118 14. other receivables and prepa
Page 124 and 125: 120 the increase in property, plant
Page 126 and 127: 122 1,000 cHf 31.3.2010 Cost Goodwi
Page 128 and 129: 124 20. Provisions 1,000 cHf 31.3.2
Page 130 and 131: 126 23. non-current financial liabi
Page 132 and 133: 128 foreign currency sensitivity an
Page 134 and 135: 130 the following table summarizes
Page 136 and 137: 132 caPital RisK manaGement it is t
Page 138 and 139: 134 the annual General shareholders
Page 140 and 141: 136 28. Related party transactions
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138 Amounts recognized in the incom
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140 30. Employee share option and s
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142 The fair value of options/warra
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144 Changes in outstanding shares/R
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146 36. list of significant consoli
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148 REPORT OF THE STATuTORY AuDITOR
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150 Income Statements 1,000 CHF Not
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152 NOTES TO THE FINANCIAL STATEmEN
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154 Executive Equity Award Plan The
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156 Compensation to the management
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158 The following table shows the d
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160 Warrants EEAP 10 2) Warrants/ o
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162 Company name Activity Domicile
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164 Appropriation of Available Earn
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166 REPORT OF THE STATUTORy AUDITOR
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Disclaimer This report contains for
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Annual Report 2010/11 - Sonova

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