COMMON SIZE ANALYSIS EXERCISE SOLUTION

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1 Department of Management and Law COMMON SIZE ANALYSIS EXERCISE SOLUTION Dr. Camilla Falivena

3 Common-Size Income Statement Common-Size Income Statement for William Demant Company Sales 100,00% 100,00% Production Costs 24,76% 25,97% GROSS PROFIT 75,24% 74,03% R&D costs 6,99% 7,15% Distribution costs 47,11% 43,97% Administrative expenses 5,63% 5,75% Share of profit after tax, associates and joint ventures 0,67% 0,45% OPERATING PROFIT (EBIT) 16,18% 17,61%

5 Common-Size Balance Sheet Common-Size Balance Sheet for William Demant Company Assets Equity and liabilities Goodwill 40,37% 39,33% Share capital 0,34% 0,38% Patents and licences 0,33% 0,15% Other reserves 44,43% 44,79% Other intangible assets 1,86% 1,91% Equity attributable to Willima Demant Holding A/S's shareholders 44,77% 45,16% Prepayments and assets under development 0,98% 0,14% Equity attributable to minority interests 0,03% 0,01% INTANGIBLE ASSETS 43,53% 41,54% EQUITY 44,80% 45,17% Land and buildings 5,65% 6,25% Interest-bearing debt 12,61% 14,45% Plant and machinery 1,41% 1,27% Deferred tax liabilities 0,98% 0,87% Other plant, fixtures and other equipment 1,87% 1,98% Provisions 1,90% 1,90% Leasehold improvements 1,69% 1,71% Other liabilities 1,10% 0,83% Prepayments and assets under development 0,59% 1,07% Deferred income 1,09% 1,14% PROPERTY, PLANT AND EQUIPMENT 11,20% 12,29% NON-CURRENT LIABILITIES 17,67% 19,19% Investments in associates and joint ventures 3,75% 3,65% Interest-bearing debt 22,81% 21,20% Receivables from associates and joint ventures 2,46% 2,48% Trade payables 3,30% 3,38% Other investments 0,05% 0,08% Payables to associates and joint ventures 0,01% 0,01% Other receivables 3,47% 3,94% Income tax 0,95% 1,01% Deferred tax assets 2,55% 2,61% Provisions 0,21% 0,11% OTHER NON-CURRENT ASSETS 12,28% 12,77% Other liabilities 8,00% 7,63% Unrealised losses on financial contracts 0,30% 0,51% NON-CURRENT ASSETS 67,01% 66,59% Deferred income 1,94% 1,79% CURRENT LIABILITIES 37,52% 35,64% Inventories 8,36% 9,20% Trade receivables 15,69% 15,31% LIABILITIES 55,20% 54,83% Receivables from associates and joint ventures 0,46% 0,37% Income tax 0,94% 0,54% Other receivables 1,67% 1,92% Unrealised gains on financial contracts 0,07% 0,08% Prepaid expenses 1,23% 1,31% Cash 4,57% 4,68% CURRENT ASSETS 32,99% 33,41% TOTAL ASSETS 100,00% 100,00% EQUITY AND LIABILITIES 100,00% 100,00%

7 Common-Size Cash Flow Statement Common-Size Cash Flow Statement for William Demant Company % of Net Revenue Operating profit (EBIT) 16,18% 17,61% Non-cash items etc. 3,12% 3,06% Change in receivables etc. -2,44% -2,06% Change in inventories 0,33% -0,90% Change in trade payables and other liabilities etc. 1,13% 0,08% Change in provisions 0,08% 0,11% Dividends received 0,07% 0,74% Cash flow from operating profit 18,48% 18,63% Financial income etc. received 0,26% 0,41% Financial expenses etc. paid -1,14% -1,06% Realised foreign currency translation adjustments -0,06% -0,01% Income tax paid -3,55% -3,05% Cash flow from operating activities (CFFO) 13,99% 14,93% Acquisition of enterprises, participating interests and activities -3,02% -15,31% Disposal of enterprises, participating interests and activities 0,22% 0,00% Investments in and disposal of intangible assets -1,27% -0,45% Investments in property, plant and equipment -2,66% -3,68% Disposal of property, plant and equipment 0,17% 0,17% Investments in other non-current assets -1,66% -2,16% Disposal of other non-current assets 1,62% 1,78% Cash flow from investing activities (CFFI) -6,60% -19,65% Repayments of borrowings -2,92% -13,59% Proceeds from borrowings 6,45% 29,10% Dividends to minority interests -0,02% 0,00% Buy-back of shares -8,75% -5,67% Cash flow from financing activities (CFFF) -5,24% 9,84% Cash flow for the year, net 2,15% 5,11%

9 Common-Size Income Statement Common-Size Income Statement for Sonova Company Sales 100,00% 100,00% Cost of sales -31,05% -33,61% GROSS PROFIT 68,95% 66,39% Research and development -5,72% -6,29% Sales and marketing -34,02% -30,80% General and administration -10,14% -9,37% Other income/ (expenses), net 0,26% 0,86% Operating profit before acquisition-related amortization (EBITDA) 19,33% 20,78% Acquistion-related amortization -1,64% -1,31% OPERATING PROFIT (EBIT) 17,69% 19,47%

11 Common-Size Balance Sheet Common-Size Balance Sheet for Sonova Company Assets Equity and liabilities Cash and cash equivalents 9,52% 11,53% Current financial liabilities 0,34% 0,24% Other current nancial assets 0,11% 0,25% Trade payables 2,69% 2,83% Trade receivables 10,50% 12,89% Current income tax liabilities 2,99% 3,41% Current income tax receivables 0,16% 0,28% Other short-term liabilities 6,59% 7,78% Other receivables and prepaid expenses 2,19% 2,53% Short-term provisions 2,85% 3,82% Inventories 6,50% 8,74% TOTAL CURRENT LIABILITIES 15,46% 18,08% TOTAL CURRENT ASSETS 28,98% 36,22% Non-current financial liabilities 19,49% 0,55% Property, plant and equipment 7,88% 9,74% Long-term provisions 4,72% 6,97% Intangible assets 59,03% 49,05% Other long-term liabilities 2,70% 3,44% Investments in associates / joint ventures 0,29% 0,34% Deferred tax liabilities 3,48% 1,67% Other non-current financial assets 0,52% 0,73% TOTAL NON-CURRENT LIABILITIES 30,39% 12,64% Deferred tax assets 3,30% 3,94% TOTAL NON-CURRENT ASSETS 71,02% 63,78% TOTAL LIABILITIES 45,85% 30,72% Share capital 0,08% 0,12% Treasury shares -0,31% -5,66% Retained earnings and reserves 53,80% 73,94% Equity attributable to equity holders of the parent 53,57% 68,41% Non-controlling interests 0,58% 0,87% EQUITY 54,15% 69,28% TOTAL ASSETS 100,00% 100,00% TOTAL LIABILITIES AND EQUITY 100,00% 100,00%

13 Common-Size Cash Flow Statement Common-Size Cash Flow Statement for Sonova Company % of Net Revenue Income before taxes 17,42% 19,16% Depreciation, amortization and impairment of tangible and intangible assets 6,15% 4,28% Loss on sale of tangible and intangible assets, net 0,03% 0,04% Share of loss / (gain) in associates / joint ventures, net 0,01% -0,08% Decrease in long-term provisions -1,60% -0,36% Financial (income) / expense, net 0,26% 0,38% Share based payments and other non-cash item 0,83% 0,20% Income taxes paid -1,52% -1,96% Cash flow before changes in net working capital 21,58% 21,67% (Increase) / decrease in trade receivables -1,00% 0,02% (Increase) / decrease in other receivables and prepaid expenses -0,27% 0,21% Decrease in inventories 0,15% 0,24% Increase / (decrease) in trade payables 0,61% -0,55% Increase / (decrease) in other payables, accruals and short-term provisions 0,74% -0,92% Cash flow from operating activities 21,81% 20,68% Purchase of tangible and intangible assets -4,10% -4,01% Proceeds om sale of tangible and intangible assets 0,04% 0,03% Cash consideration for acquisitions, net of cash acquired -28,19% -5,85% Cash consideration om divestments, net of cash divested 0,74% 1,43% Changes in other financial assets -0,06% -0,24% Interest received and realized gain from financial assets 0,05% 0,16% Cash flow from investing activities -31,52% -8,49% Proceeds om borrowings 36,75% 0,00% Repayment of borrowings -17,18% -0,02% (Purchase) / sale of treasury shares, net -1,36% -8,46% Dividends paid by Sonova Holding AG -5,73% -6,57% Transactions with non-controlling interests -0,26% -0,55% Interest paid and other financial expenses -0,10% -0,11% Cash flow from financing activities 12,13% -15,72% Exchange losses on cash and cash equivalents -0,03% -0,01% Cash flow for the year, net 2,39% -3,53%

Financial Results of the Principal Subsidiaries

Financial Results of the Principal Subsidiaries Fiscal Year Ended March 31, 2018 May 15, 2018 Copyright 2018 JAPAN POST GROUP. All Rights Reserved. Table of Contents I Japan Post Holdings... 1 Year-on-Year