Sonova : Corporate governance report 2022/23

CORPORATE GOVERNANCE

Corporate governance

Good governance supports responsible corporate behavior, transparency, and sustainable business practices.

Sonovaʼs mission is to have a positive effect on our consumersʼ lives. This closely aligns with our aspiration to have a positive impact on society as a whole by running our business in a sustainable, responsible manner. "We take accountability" is one of our core values: Continuously improving our Environmental, Social, and Governance (ESG) performance is embedded throughout our business and we strive to optimize these factors with the same level of dedication as we do our financial objectives. We see good corporate governance as an essential pillar of our ESG strategy, ensuring that the company is managed in the long-term interests of its key stakeholders. The details of what constitutes good corporate governance continue to evolve, and the Board of Directors as well as the CEO and the Group Management Board constantly monitor developments to ensure that our commitments keep pace with expectations.

At Sonova, we uphold a strong foundation of corporate governance that adheres to established standards and practices. The company meets its legal duties under the Swiss Code of Obligations, the SIX Swiss Exchange Directive on Information relating to Corporate Governance, and the standards defined in the Swiss Code of Best Practice for Corporate Governance. This report describes the principles of corporate governance for the Sonova Group and provides background information on the Groupʼs executive officers and bodies as of March 31, 2023. All relevant documents can be accessed at the corporate governance section of the Sonova website:www.sonova.com/en/regulations- principles. For clarity and transparency, theCompensation Report is presented as a separate chapter of the annual report.

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CORPORATE GOVERNANCE

Group structure

Operational group structure

The Sonova Group is headquartered in Stäfa, Switzerland, and is active in over 100 countries. Sonova has subsidiaries in over 30 countries and a network of independent distributors serving additional markets. Details of its business segments can be found in Note 2.2 to the consolidated financial statements.

Listed companies

Sonova Holding AG is listed on the SIX Swiss Exchange. Of all the companies in the Sonova Group, only the ultimate parent company of the consolidated Sonova Group, Sonova Holding AG, is listed on any stock exchange.

Key data for the shares of Sonova Holding AG as of March 31, 2023:

Non-listed companies

Note 7.7 to the consolidated financial statements provides a list of the significant companies of the Sonova Group as of March 31, 2023.

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CORPORATE GOVERNANCE

Shareholders

Registered shareholders

As of March 31, 2023, the shareholdings of registered shareholders were distributed as follows:

Significant shareholders

The following overview shows the significant shareholders as of March 31, 2023 based on shareholdings recorded in the share register and notifications on theSIX Swiss Exchange online reporting platform. Significant shareholders may also hold non- registered shares.

1. Or at last reported date if shareholdings are not registered in the share register.
2. On the basis of the shares registered in the commercial register at last reported date.
3. Beda Diethelm and Hans-Ueli Rihs were already shareholders before the Initial Public Offering in
   November 1994. There are no shareholders' agreements among these individuals and they can trade freely.
4. Hans-UlrichRihs, Gabriela Rihs and Stefan Rihs as a group jointly control 3,683,649 registered shares (corresponding to 6.02% of total Sonova share capital) pursuant to the last disclosure notice. These shares were previously controlled by Hans-Ulrich Rihs as a single shareholder.
5. MFS Investment Management, formerly known as Massachusetts Financial Services, is held by Sun
   Life Financial Inc which is traded on the TSX, NYSE and PSE (ticker symbol SLF)
6. The Capital Group Companies, Inc is held by (i) Capital Research and Management Company ("CRMC"), (ii) Capital Group Private Client Services, Inc. and (iii) Capital International, Inc.

For information on shareholders of Sonova Holding AG that have reported shareholdings of over 3% or a reduction of shareholdings below 3% in the FY 2022/23, please refer to the website of the Disclosure Office of the SIX Swiss Exchange.

Cross-shareholdings

Sonova Holding AG has no cross-shareholdings with other companies.

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Articles of Association

The Articles of Association of Sonova Holding AG remained unchanged in FY 2022/23 except for (i) article 3, 5, 6 (share capital and authorized capital) as well as (ii) article 16 (number of members of the Board of Directors): (i) Article 3, 5 6: The share capital as stipulated by the previous version of article 3 was reduced according to the resolution of the 2022 Annual General Shareholdersʼ Meeting (AGM) and this resolution triggered amendments on article 5 and 6 (for details see section capital structure below). (ii) Article 16: The minimum number of members of the Board of Directors was increased from 3 to 5 in order to be able to comply with good governance practice and the maximum number of members of the Board of Directors was increased from 9 to 10 in order to facilitate the long-term succession planning within the Board of Directors; both changes have been resolved at the 2022 AGM. The Articles of Association are available here.

The Swiss corporate law reform which became effective January 1, 2023, triggers several mandatory and voluntary amendments to the Articles of Association which will be discussed and put to a vote of the shareholders at the 2023 AGM.

Capital structure

Share capital

As of March 31, 2023, the ordinary share capital of Sonova Holding AG was

CHF 3,057,985.95 fully paid up and divided into 61,159,719 registered shares with a par value of CHF 0.05 each.

Sonova Holding AG has issued neither participation certificates nor profit-sharing certificates.

With the exception of the treasury shares held by the company itself, each share represents one vote at the Annual General Shareholdersʼ Meeting and is entitled to dividend payments. As of March 31, 2023, the company held 1,566,263 treasury shares (1,532,910 in the previous year).

More information on the share capital can be found in Art. 3 of the Articles of Association available here.

Conditional and authorized share capital

Conditional share capital

The conditional share capital may be increased by a maximum amount of CHF 266,107 by issuing 5,322,133 registered shares with a par value of CHF 0.05 per share which equates to 8.70% of the existing share capital. Out of this conditional share capital an amount of (i) CHF 101,050.65 (equaling 2,021,013 registered shares) may be used for distribution to key employees of the Sonova Group through an equity participation program and (ii) CHF 165,056 (equaling to 3,301,120 registered shares) may be used for exercising option and conversion rights granted in connection with bonds or similar debt instruments issued by the company to finance the acquisition of companies, parts of companies or shareholdings.

More information on the conditional share capital can be found in Art. 4 of the Articles of Association, available here.

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Authorized share capital

The Board of Directors shall be authorized to increase the share capital at any time until June 15, 2024 by a maximum amount of CHF 305,798.59 by issuing a maximum of 6,115,971 registered shares that are to be fully paid up, each with a nominal value of CHF

0.05 and which equates to 9.99% of the existing share capital. Increases in partial amounts shall be permissible. The Board of Directors did not make use of this authorization in FY 2022/23.

More information on the conditional share capital can be found in Art. 5 of the Articles of Association, available here.

Limitations on exercising the conditional and/or authorized share capital

In case the conditional and/or authorized share capital may be exercised and subscription or advance subscription rights may be excluded, the total of the capital increase shall not exceed an amount in total of CHF 305,798.55 by issuing 6,115,971 registered shares which corresponds to 9.99% of the currently issued share capital.

More information on the conditional share capital can be found in Art. 6 of the Articles of Association, available here.

Options

In FY 2022/23, a total of 138,302 options and Stock Appreciation Rights (SARs) were granted as part of the Sonova Executive Equity Award Plan (EEAP). In FY 2021/22, the number of options and SARs granted totaled 112,656. As of March 31, 2023, there were 960,106 options, performance options and SARs outstanding (compared with 985,697 in the previous year). Each of the options entitles the holder to purchase one registered share in Sonova Holding AG with a par value of CHF 0.05 at the respective exercise price and upon meeting certain performance criteria, while the SAR entitles to receive a cash settlement equal to the option value. The EEAP is described in greater detail in the Compensation Report and in Note 7.4 to the consolidated financial statements.

Convertible bonds

Sonova Holding AG has not issued any convertible bonds.

Changes in capital

As of March 31, 2023, the capital of Sonova Holding AG comprised the following (CHF amounts in this schedule are rounded up to whole numbers):

The 2022 AGM approved a reduction of the share capital by CHF 100,621.90 through cancellation of 2,012,438 registered shares. This capital reduction was the result of the share buyback program, announced on May 18, 2021, in which the company repurchased 2,012,438 registered shares between June 4, 2021 and March 31, 2022. More information to this share buyback program is available here.

The Board of Directors did not make use of the conditional or authorized share capital in FY 2022/23.

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