31/08/2018 | 07:00 CEST | Group Announcements
Stäfa (Switzerland), August 31, 2018 – Sonova Holding AG, the world’s leading provider of hearing solutions, announces today that its Board of Directors approved a new share buyback program of up to CHF 1.5 billion. The shares will be repurchased for purposes of cancellation. The new program is expected to begin latest in October 2018 and run up to 36 months.
In the last two years Sonova generated an annual operating free cash flow of over CHF 400 million and expects continuing strong cash flow from future earnings. Coupled with a solid balance sheet, the Sonova Group has considerable debt capacity which is further growing as the scheduled amortization of debt related to the AudioNova acquisition is about to start.
In recent years Sonova has continuously raised the dividend with a pay-out ratio of ca. 40%. In addition, the Board of Directors has now decided to further increase cash distribution to shareholders and hereby announces a share buyback program funded by free cash flow and additional debt, targeting a Net debt/EBITDA ratio of up to 1.0x by 2020/21 realized step by step.
The share buyback is subject to regulatory approval. The program targets to buy back shares worth up to CHF 1.5 billion, runs up to 36 months and is expected to start latest in October 2018. The buyback will be conducted via a separate trading line on the SIX Swiss Exchange. The shares will be repurchased for the purpose of a capital reduction, subject to approval by future Annual General Shareholders’ Meetings.
Maintaining a conservative financial policy, Sonova expects to have sufficient funds to further invest in R&D and capital expenditure, to expand the Group’s distribution network and market reach and to undertake bolt-on acquisitions, in addition to the new share buyback program. In case of an attractive larger acquisition opportunity, the program could be suspended.
The total shareholder return strategy, consisting of significant dividends and a steady share buyback program, is based on our confidence in the future cash generating capacity of Sonova.
The regular update on the share buyback program and the buyback notices will be accessible on the following website upon regulatory approval and launch of the program:
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