Sonova to accelerate expansion of direct consumer access in Chinese market with acquisition of leading network of clinics

Media Release

Stäfa (Switzerland), August 19, 2022 Sonova Holding AG, a leading provider of hearing care solutions, today announces the agreement to acquire the HYSOUND Group, one of the leading nationwide chains of audiological care clinics in China. The HYSOUND Group will significantly enlarge Sonovas store footprint and direct consumer access in this fast-growing market, by adding around 200 clinics in over 20 provinces and more than 70 cities across China.

Key Highlights:

• The HYSOUND Groups nationwide organization and successful retail business model provides a strong platform for Sonovas further expansion in China.
• The HYSOUND Groups strengths make a perfect strategic fit with Sonovas industry-leading digital engagement capabilities in China, which include a range of strong partnerships and a large volume of online followers and interactions.
• With over 650 well experienced employees and a strong reputation in China's high-end audiology services market, the HYSOUND Group generated net revenue of approximately RMB 230 million (around CHF 32 million) in calendar year 2021, representing a double-digit sales growth, which was achieved despite ongoing challenges related to the COVID pandemic.
• The transaction is expected to close in the second half of FY2022/23, subject to regulatory approval.

Arnd Kaldowski, CEO of Sonova, says: This is another important move to increase our consumer access through our audiological care business, which is one of the key pillars of our strategy. China is by far the largest high-growth market globally, which is particularly attractive due to their aging population. We project that the rapid growth of their middle class will strongly increase todays very low hearing instrument penetration in the next 5 to 10 years. This acquisition puts Sonova in an excellent position to achieve a large-scale consumer access in China. HYSOUND Group, with its rapidly growing traditional retail business, represents the perfect platform to further accelerate Sonovas participation in the audiological care segment of China. 

William YingWei Wang, Founder & CEO of HYSOUND Group, says: Sonova is an exceptionally strong player in the global audiological care retail market. The synergies between Sonova and HYSOUND Group will further strengthen our market leadership in China's high-end audiology services market. We will be able to leverage Sonovas existing capabilities in omni-channel consumer engagement in China, where we were particularly attracted by its combination of digital engagement with brick-and-mortar clinics. We are delighted to have signed this agreement and look forward to working together with the Sonova team to continue providing superior high-tech products and professional services for Chinese customers.

Goldman Sachs International acted as financial advisor to Sonova on this transaction.

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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 managements 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 Sonovas control. Should one or more of these risks or un-certainties materialize or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Each forward-looking statement speaks only as of the date of the particular statement, and Sonova undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law.

About Sonova
Sonova is a global leader in innovative hearing care solutions: from personal audio devices and wireless communication systems to audiological care services, hearing aids and cochlear implants. The Group was founded in 1947 and is headquartered in Stäfa, Switzerland.

Sonova operates through four businesses Hearing Instruments, Audiological Care, Consumer Hearing and Cochlear Implants and the core brands Phonak, Unitron, AudioNova, Sennheiser (under license) and Advanced Bionics as well as recognized regional brands. The Groups globally diversified sales and distribution channels serve an ever growing consumer base in more than 100 countries.

In the 2021/22 financial year, the Group generated sales of CHF 3.4 billion, with a net profit of CHF 664 million. Over 16,000 employees are working on achieving Sonovas vision of a world where everyone enjoys the delight of hearing.

For more information please visit www.sonova.com.

Sonova shares (ticker symbol: SOON, Security no: 1254978, ISIN: CH0012549785) have been listed on the SIX Swiss Exchange since 1994. The securities of Sonova have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act), or under the applicable securities laws of any state of the United States of America, and may not be offered or sold in the United States of America except pursuant to an exemption from the registration requirements under the U.S. Securities Act and in compliance with applicable state securities laws, or outside the United States of America to non-U.S. Persons in reliance on Regulation S under the U.S. Securities Act.