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We love what we do2014 Annual Report

2014

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Straumann Holding AGPeter Merian-Weg 124002 Basel Switzerlandwww.straumann.com

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IMPRINTPublished by: Institut Straumann AG, BaselConcept and realization: PETRANIX Corporate and Financial Communications AG, Adliswil/ZurichPhotography: AMX Studio, Alex Stiebritz, KarlsruheConsultant on sustainability: sustainserv, Zurich and BostonCertain design elements by Eclat, Erlenbach/ZurichPrint: Neidhart + Schön AG, ZurichBasel, 26 February 2015

©2015, Straumann Holding AG

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About StraumannStraumann is a global leader in tooth replacement solu-tions including dental implants, prosthetics and regener-ative products. Headquartered in Basel, Switzerland, the Group is present in more than 70 countries through its broad network of distribution subsidiaries and partners.

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Rebecca Hesse SAP Coordinator

Susan-Ann Welzbacher Corporate Safety Officer

Julia Hirtle Spend Coordinator

Roland Scacchi Administrator

Alessandro Annicchiarico IT Support

Heather Stanton Web Editor

Dave Koster Lab Business Development

Raul Perez Talent Management

Sandra Schürmann Events Coordinator

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We have a global culture with more than 28 nationalities represented at our headquarters alone. The front cover shows a few examples.



Highly motivated, creative employees, together with innovative products, solutions and commercial ap-proach es are the keys to Straumann’s ambition of being the provider of choice in tooth replacement. The theme photographs in this report all feature products that we introduced or rolled out in 2014 alongside some of the talented people who have been involved in bringing them to customers and patients.

Each picture shows the creative, passionate, humorous side of Straumann, which is combined with serious pro-fessionalism when it comes to customer satisfaction and patient well-being – balanced attributes that reflect the purpose statement we introduced in 2014: ‘more than creating smiles, restoring confidence’.

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8Roxolid

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44SLActive

102Bone Level Tapered

156Pro Arch

62Regeneratives


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2014 Annual ReportContents

4 Operational performance (highlights)

7 Share performance (highlights)

12 Letter to shareholders

22 Management commentary

23 Business model & objectives

26 Strategy

30 Products, services, solutions

34 Innovation

38 Markets

48 2014 Business performance – Group

52 2014 Business performance – Regions

66 2014 Business performance – Financials

78 Risk and sustainability report

106 Corporate governance

138 Compensation report

160 Information for investors

170 Appendix

181 Imprint

Throughout this Report, pages references preceded by a capital ‘F’ refer to our detailed Financial Report, which is published as a separate volume.

74Screw-RetainedAbutments

166Instruments


More on p. 48 ff.KEY FIGURES(in CHF million)

2014 2013 Change (%)

Revenue 710 680 4

Gross profit 559 536 4

Operating profit (EBIT) 148 1161 28

Net profit 158 101 56

Cash generated from operating activities

146 152 (4)

Capital expenditure 19 13 49

Free cash flow 128 139 (8)

Value added economic profit

114 53 115

1 CHF 124m, excluding exceptionals (restructuring/impairments)

4 Operational performance

Operational performance

REVENUE (in CHF million)

20142013201220112010

¢ ¢ Reported revenue ¢ Currency effect

5 year CAGR –1%(+3% in I.c.)

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REVENUES BY REGION

More on p. 52 ff.

+6%

REVENUE (ORGANIC) GROUP

+3%

EUROPE

+14%

ASIA/PACIFIC

+8%

NORTH AMERICA

+14%

REST OF THE WORLD

More on p. 48 ff.


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¢ ¢ Operating pro�t ¢ Excluding exceptionals ¢ ¢ Net pro�t

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¢ ¢ Return on assets (ROA) ¢ ¢ Return on equity (ROE)¢ ¢ Return on capital employed (ROCE)

5Operational performanceOperational performance

More on p. 48 ff.OPERATING AND NET PROFIT(in CHF million)

More on p. 48 ff.PROFITABILITYReturns on assets, equity and capital employed in %

NET PROFIT MARGIN

22% Up from 15% in 2013

EQUITY RATIO

64% Company solidly financed

GROSS MARGIN

79% Gross profit rises 4% fuelled

by strong sales growth

EBIT MARGIN

21% EBIT rises 28% driven by tight

cost control


CASH FLOW AND INVESTMENTS(in CHF million)

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¢ ¢ Operating cash �ow ¢ Acquisitions & participations ¢ ¢ Capital expenditure

More on p. 88 ff.EMPLOYEES

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6 Operational performance

FREE CASH FLOW MARGIN

INVESTMENT IN PEOPLE

18% Robust cash generation; cash/equivalents

up CHF 76m to CHF 459m

170new jobs 8% increase in headcount as company

invests in selected areas


More on p. 161 ff.TOTAL SHAREHOLDER RETURN(in %)

SHARE INFORMATION More on p. 161 ff.

(in CHF) 2014 2013

Earnings per share (EPS) 10.15 6.55

Ordinary dividend per share 3.751 3.75

Payout ratio 37% 58%

Share price at year-end 250.75 166.80

1 Payable in 2015 subject to shareholder approval

More on p. 161 ff.SHARE PRICE DEVELOPMENT(in %)

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7Operational performance Share performance

Share performance

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TOTAL SHAREHOLDER RETURN

53% Driven by sharp rise in share price

and stable dividend

SHARE PRICE

+50% Over full year


“If you get an implant from us, it should last as long as you do.” DANIEL GÜNTER DESIGN ENGINEER

“I can’t imagine working anywhere else. I'd miss the inspiring family atmosphere.”DORIS HABEDANKSALES REPRESENTATIVE

“What I appreciate is that the company focuses on quality in everything, even compliance.”PETER LEEINTERNATIONAL REGULATORY MANAGER

“Every day a huge amount of energy goes into ensuring the product is reliable and safe.” STÉPHANIE LUCOTGLOVEBOX OPERATOR/ASSEMBLY


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Talented people Latest technology

DORIS HABEDANKSALES REPRESENTATIVE6 YEARS @ STRAUMANN

Years before joining the company, Doris had her sights set on Straumann. Why? “Because it’s a global player with a great reputation for top innovation and high-end products.” Now she’s dedicated to her busy customers who count on her for the latest information.

PETER LEEINTERNATIONAL REGULATORY MANAGER7 YEARS @ STRAUMANN

“I really like the intercultural exchange,” says Peter, whose job involves constantly navigating through government agencies and a myriad of regulations to bring Straumann products to patients.

STÉPHANIE LUCOTGLOVEBOX OPERATOR/ASSEMBLY2 YEARS @ STRAUMANN

Clinicians and patients count on Stéphanie’s diligence. She knows that her careful packaging work is essential to the safety and performance of the implants – and ultimately to the wellbeing of patients.

DANIEL GÜNTERDESIGN ENGINEER20 YEARS @ STRAUMANN

Daniel thrives on difficult challenges to meet patient needs, like designing the Loxim transfer piece and the SLActive packaging. He says Straumann is the ideal place to work because he uses the latest technology and works with very talented people.

“If you get an implant from us, it should last as long as you do.” DANIEL GÜNTER DESIGN ENGINEER


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Roxolid shows a 20% higher tensile strength than Straumann cold-worked titanium and a 80% higher strength than standard titanium Grade 4 (TiGr4).

2 Norm ASTM F67 (states min. tensile strength of annealed titanium). 3 Data on �le for Straumann cold-worked titanium and Roxolid implants.

Straumann Roxolid3

Straumann TiGr4

cold-worked3

ASTMTiGr42

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RoxolidReduced invasiveness1 opening doors to treatment

ROXOLID FOR ALLBiocompatibility, resistance to corrosion, and strength have made titanium the most widely-used dental implant material. However, its strength has limitations.

Roxolid is a high performance alloy, specifically designed by Strau-mann to offer higher strength than pure titanium with excellent osseointegration capabilities. Since its initial launch at the end of 2009, Roxolid has been introduced in most major markets but only with our 3.3mm diameter implants, which are designed for use in narrow spaces or where limited bone is available.

Clinical experience gained in the meantime has provided the basis for using smaller diameter Roxolid implants to avoid bone augmentation, thus reducing invasiveness1 and making treat-ment possible for patients with insufficient bone.

In 2014, we made our entire range of implants available in the new material in markets where it is registered, prompting the majority of our customers to upgrade from pure titanium. We expect to see similar responses in Asian and other markets when regulatory clearances are obtained.

1 If guided bone regeneration can be avoided.


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THE LOXIM TRANSFER PIECE – PERFECTING HANDLINGOver the years, Straumann has worked hard to per-fect implant handling, adding convenience with uncompromised precision and reliability.

In contrast to our previous transfer piece, which used a lock nut and required a counter wrench for removal, Loxim detaches from the implant quickly with a simple pull - making the surgeon’s job easier.

Despite its simplicity, Loxim requires an excep-tionally high standard of precision to ensure that it holds the implant securely, withstands the very high torque forces during implant insertion, and detaches easily with a gentle pull.

4 mmour shortest

SAVING TRAUMA, DISCOMFORT, TIME AND MONEY Roxolid also prompted the development of a new 4mm short implant – our smallest ever – which was launched in 2014. This implant is designed to avoid extensive bone augmentation proce-dures in patients with insufficient vertical bone for conventional implants. Leading clinicians have observed that short implants can lead to fewer complications, less morbidity, lower costs and more predictable outcomes1.

These and other factors make short implants an attractive option, often providing a completely different strategy for implant place-ment. Like all Roxolid implants they are supplied with our new convenient Loxim™ Transfer Piece.

1 Hämmerle C: Starget 1/2014. Cochran D: Presentation Straumann Corporate Forum, EAO Dublin 2013. Al-Nawas B, Hämmerle C: Presentations Straumann Corporate Forum, ITI World Symposium, Geneva 2014.

THE 4 MM ‘SHORT IMPLANT’is available in various con-figurations and diameters

In the case of the implant on the right, there is enough vertical bone to place a standard length without damaging the nerve below. Not so on the left, where a 4 mm short implant has been used to solve the problem.


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Letter to shareholders

Gilbert Achermann (Chairman of the Board) and Marco Gadola (Chief Executive Officer)

DEAR SHAREHOLDER,

2014 gave us many reasons to celebrate: it marked the 60th anniversary of our company, the 40th anniversary of our entry into implant dentistry and the 25th anniversary of our US subsidiary. We were also able to celebrate good results and further stra-tegic milestones.

Building on the turnaround achieved in 2013, we grew across all regions and reached our profit targets. We broadened our innovation process and introduced new solutions that enhance the standard of care and add value for customers and patients.

We expanded in high-growth markets and segments, forging partnerships and developing new distribution approaches. We also invested in people and in build-ing a high performance culture to sustain our success. The overall progress we made confirms our strategy and helps us to tackle the current challenges in order to meet your expectations as shareholders.

FINANCIAL PERFORMANCEREVENUE AND PROFITABILITY AHEAD OF

OUR EXPECTATIONS

Strong implant sales helped us to achieve organic1 growth of 6%, lifting revenue from CHF 680 million in 2013 to CHF 710 million in 2014. Having grown faster than our global competitors, we increased our market share to 20% (see p. 38) and underpinned our leading global position.

Thirty percent of our growth was generated in Asia/ Pacific, which posted a revenue increase of 14% driven by China and Japan. The Rest of the World also grew 14% fuelled by Latin America, while North America grew 8% and Europe 3%.

Tight cost control, on top of benefits from restructur-ing in 2013, lifted our profitability as operating profit (EBIT) jumped 28% (19% excluding exceptionals) to CHF 148 million. The respective margin expanded 4% points to 21% – ahead of our mid-term target of 20%. With the addition of a one-time tax benefit, net profit


Letter to shareholders Letter to shareholders 13

rose 56% to CHF 158 million, with the margin reaching 22%. Economic profit, which is a performance indica-tor for compensation, climbed from CHF 53 million to CHF 114 million.

FLEXIBILITY TO INVEST IN GROWTH OPPORTUNITIES

We continued to generate a good level of cash as free cash flow reached CHF 128 million, yielding a margin of 18%. With an equity ratio of 64%, the company is solidly financed and has the capability to pursue fur-ther strategic investments and acquisitions – with cash of CHF 459 million on hand.

The overall performance and our strategic progress were reflected in a 50% increase in the share price over the full-year period (see p.161 f.). This contributed to a total shareholder return of 53% – including a stable dividend of CHF 3.75 per share.

STRATEGY IMPLEMENTATIONThe progress we achieved endorses our three strategic priorities, which did not change, namely:

– to address changed core market dynamics, – to target unexploited growth markets, and – to drive a high-performance culture and organization.

The following initiatives exemplify our strategy in action and illustrate how we have created further value for our stakeholders, especially customers and patients:

ADDRESSING CHANGED CORE MARKETS THROUGH INNOVATION We began 2014 with a bold step to upgrade our entire implant range to our high-strength material Roxolid and to offer it together with a new transfer piece for the same price as the existing titanium range (see p. 10 f.). Roxolid opens up the possibility of using smaller, less invasive implants, which can avoid bone augmen-tation – saving trauma, time and cost (p. 10 f.).

In parallel, we reduced the price of our basic implant in selected markets to compete more effectively against lower priced brands and to meet the changed market expectations for value ratios. Through successful cam-paigns in Europe and North America, we succeeded in establishing Roxolid as the new premium standard material for implants, by switching the great majority of our customers from conventional titanium to the

differentiated superior material. We also succeeded in winning new customers and increasing volumes.

Four other ‘implant’ milestones followed. We launched our shortest ever (4mm) implant – also designed to min-imize invasiveness and to make treatment possible for patients with insufficient bone for regular implants (see p. 11). We perfected our small-diameter PURE ceramic implant for patients seeking metal-free solutions (see p. 20 f.). We brought our SLActive surface to customers in Japan (see p. 46 f.), and we introduced our new Bone Level Tapered (BLT) implant (see p. 104 f.), opening the door for Straumann to compete head to head with other tapered implants, which make up 60% of all implants sold today. BLT could be a significant opportunity for Straumann, not least because Roxolid plus SLActive dis-tinguish it as a ‘new-generation’ tapered implant.

MORE COMPETITIVE PROSTHETIC SOLUTIONS

While implants provide the basis of modern tooth replacement systems, the ‘bite’ comes with prosthet-ics. To offer more cost-effective solutions for our lab customers, we introduced a new prosthetic concept, including our new competitively priced Variobase abutment and a simpler CADCAM workflow called CARES X-stream.

We also developed Straumann ‘Pro Arch’ to address the growing number of fully or partially edentulous patients seeking complete fixed tooth replacement solutions that function immediately – cutting treatment sessions and minimizing disruption. Pro Arch is a comprehensive solution that includes implants, a new range of angu-lated abutments (see p. 76 f.), customized bars, bridges and sophisticated frameworks manufactured by our milling centers and by Createch (see p. 159). Our open CADCAM system and Scan & Shape Service now enable almost any dental lab to order custom prosthetics from Straumann.

AN UNPARALLELED RANGE OF REGENERATIVES

In April we joined forces with botiss biomaterials, Europe’s second largest supplier of oral tissue regener-ation products, enabling us to offer an unparalleled range of regenerative solutions to support implant and periodontal procedures. We have exclusive rights to distribute botiss products in most countries around the world and began the roll-out in initial markets in October 2014.



As regulatory approvals are still pending in the US, we have licensed two further products from third parties to fill the gaps in our regenerative portfolio. We are thus now able to offer customers on both sides of the Atlantic all the components for a complete solution from one company.

INNOVATION PROCESS REFINED

The pace of change in our industry has accelerated and dental implants are becoming mass products. Conse-quently, the trend in innovation is moving from tech-nological breakthroughs to sales processes, holistic approaches and product refinement (as the aforemen-tioned examples show). At Straumann, innovation has broadened from creating and developing new ideas to making them commercial successes, which means that our innovations have to be customer and market driven. This is where we benefit from the large ITI net-work (see p. 87) and from having a broad sales team in direct contact with customers.

In 2014, we continued to invest in research and devel-opment to support the number and quality of our pipeline projects (see p. 35). To gain access to new leads, we further developed our web-based innova-tion platform. This has drawn ideas from around the world, which have been screened for development potential (see p. 34).

Rigorous scientific testing and clinical documentation continue to be engrained in the Straumann philosophy. At year end more than 150 studies were running – all to provide customers and patients with the reliability, quality and confidence that are Straumann’s trade-mark. We also continued to invest in training and edu-cation, to expand the pool of dentists offering implant procedures, to enhance the standard of care and to ensure long-lasting satisfaction.

TARGETING UNEXPLOITED GROWTH OPPORTUNITIESEXPANDING OUR REACH IN CHINA AND LATIN AMERICA

China is one of the most exciting markets for Strau-mann and, according to some estimates, is thought to be growing at more than 20%. Through a successful distributor partnership, we have established a leading position, but the market is changing rapidly and we need to address the fast-growing private practice sec-tor more effectively in addition to broadening our

reach and controlling our customer base. We took a major step towards these strategic imperatives by tak-ing over our distributor’s business and establishing a hybrid model with multiple distributors and our own sales, marketing and education teams.

Latin America is another source of growth. In Brazil alone, where Neodent leads the market, an estimated 2.3 million dental implants are placed annually, mak-ing it the world’s largest market in volume terms alongside the US.

As the year came to a close, we compiled a blueprint for expansion in Latin America. This includes plans for creating distribution hubs in Argentina, Columbia and Mexico to serve the surrounding countries.

WINNING SHARE IN THE UNDERPENETRATED US MARKET

AND ENTERING THE DENTAL CHAIN SEGMENT

The world’s largest market in financial terms is the US, but it is still comparatively underpenetrated (see p. 40), which is why we have invested over-proportion-ally there in recent years. This strategy has made North America a key growth generator for Straumann.

By the year 2020, 38 million adults in the US will be in need of 1 or 2 complete dentures2. Our collaboration with ClearChoice, a large chain of dental centers which are leaders in full-arch dental restorations, is one of several steps we are taking to address this market. ClearChoice performs more implant procedures than any other network in the US and we have become their preferred supplier.

We have also teamed up with Patterson Dental and Spear Education to address the rapid increase in gen-eral practitioners (GPs) placing implants, to improve the quality of education and to further enhance the standard of patient care. Patterson is one of the largest distributors to general practitioners in North America.

A key element in this collaboration is Straumann Smart One, our simple all-in-one implant package, which will be available exclusively through Patterson together with Spear’s Interdisciplinary Implant Cur-riculum. The partnership will foster the interdisciplin-ary relationship between specialists, GPs and labs to improve collaboration in referring patients and in coordinating treatment plans. This approach will



increase implant opportunities for all professionals by better identifying patient cases that are currently not considered for implant therapy, and enabling bet-ter treatment outcomes.

TAPPING INTO THE GLOBAL VALUE SEGMENT

The attractiveness of our business and the economic environment have stimulated a sharp increase in local ‘value’ players, who offer implant and prosthetic prod-ucts at lower prices than the premium segment. Many are ‘copycats’. Few offer the high levels of service, training, support, experience, innovation and long-term assurance that are inherent to the Straumann brand. Nevertheless, the value segment now accounts for more than a third of the global implant market.

In pursuit of our goal to be the global provider of choice for tooth replacement solutions, we are continuing to focus on our premium offering but are also building a separate portfolio of value brands. To gain access to the fast-growing value segment in Asia, we invested in Megagen (Korea) and Biodenta (Taiwan). We are also acquiring approx. 43% of T-Plus (Taiwan), which will open a door to the value segment in China (see p. 27).

To drive the international commercialization of the portfolio brands, we created the Instradent business platform, which established sales subsidiaries in Iberia, Italy and the US. Each of them began by dis-tributing the Neodent implant system and have been working towards launching Medentika pros-thetics. In 2015, Neodent will be consolidated in our financial statements.

A COMMON TECHNOLOGY PLATFORM

In order to provide complete solutions we forged sev-eral agreements/partnerships which, together with fully and partially-owned companies, form a shared technology platform that can serve both our premium and Instradent businesses. Botiss and Rodo Medical (see p. 28), a start-up company with innovative tech-nology for prosthetic fixtures, were two additions to this platform in 2014.

Our full implant, prosthetic, CADCAM and regenera-tive range make Straumann a comprehensive one-stop shop. Moving ahead, we will focus on becoming the total solution provider for tooth replacement, through offering conventional, semi-digital and

digital workflow solutions for all major tooth re-placement indications – from single tooth to full dental replacement. Pro Arch (see p. 158 f.) is one step in this direction.

BUILDING A HIGH PERFORMANCE ORGANIZATION Having resized in 2013, we needed to strengthen our team in specific areas to support strategic growth initiatives, for example in emerging markets and in the value segment. As a result, our global workforce increased by 8%.

People are our success. Having adapted to our new structure, we reevaluated and restarted the talent/career development programs that were interrupted in 2013. We also extended the program devoted to selling skills and maintained our apprenticeship and internship programs.

Despite the pace of change and significant chal-lenges, our employees have again demonstrated the Straumann spirit of ‘simply doing more’, helping us to outperform, to expand and to deliver an impres-sive number of innovations to the market. This has been rewarded with appropriate compensation bonuses (see Compensation Report).

OUR CULTURAL JOURNEY

One of our strategic priorities is to build a high per-formance culture, which we believe starts at the top of the company. In 2014, we embarked on a ‘cultural journey’ to foster and promote delegation, empow-erment, taking responsibility, risk-taking, challeng-ing, and creative thought, which are predominant behavioral styles in high-performance organizations (see p. 88). Following 360° assessments of the lead-ership team, a number of workshops and coaching sessions were conducted. The process will be extended through the organization and progress will be measured regularly.

MORE THAN CREATING SMILES, RESTORING CONFIDENCE

As a prelude to our cultural journey we examined the fundamentals of what we do and formulated a new engaging purpose statement: ‘more than creating smiles, restoring confidence’. This embodies the Straumann principle of challenging and going beyond the status quo by simply doing more. It also



reflects the passion for reliability, which is our trade-mark, and on which our customers and their patients can count.

Since our company’s pioneering entry into implant dentistry 40 years ago, Straumann products have brought smiles to millions of faces around the world. Today, implant dentistry is a routine procedure and patients have increasing requirements and expecta-tions – for example: lasting function and esthetics, minimum discomfort and inconvenience, lower prices, shorter time to teeth, ‘immediate’ solutions, metal-free options and more. However, the underlying desire is for an improvement in the quality of life, without compromise when it comes to enjoying food and looking good.

Almost without exception, patients who have received extensive tooth replacement tell us that the treat-ment has literally changed their lives – largely because of restored self-confidence. This fully reflects our pur-pose statement and was expressed emphatically by 14 patients who received total dental replacements in a single day – free of charge in one of our charitable ini-tiatives in 2014 (see p. 92 ff.).

We are committed to continuing our focus on sustain-able development and value creation. This includes running our operations as efficiently as possible to achieve financial, material and energy savings. It also encompasses our charitable support for various dental health initiatives.

OUTLOOK 2015 (barring unforeseen circumstances) We are optimistic that we will carry our dynamic momentum forward into 2015 with the aim of achiev-ing excellent organic growth rates in all key regions and segments.

Unfortunately, our achievements and progress in 2014 have been overshadowed by more recent events.

The decision by the Swiss National Bank in January this year to remove the minimum exchange rate for the Euro caused the Swiss franc to soar abruptly against all currencies in which we do business. As 95% of our rev-enues are generated abroad, this will have a significant effect on our revenues and profits in Swiss francs. If the currency exchange rates in general continue at their recent levels, the negative impact on Strau-mann’s full-year revenue and EBIT could be as much as CHF 75 million and CHF 40 million, respectively. This is why the stock market reacted quickly, cutting our share price – and thus the market capitalization – by roughly a quarter in the space of a few days.

We responded rapidly with measures to reduce our Swiss cost base, which will not affect our ability to continue growing and will keep us in a position to meet your expectations as shareholders for 2015.

Without the progress we made in 2014, we would have been less able to tackle our present and future challenges. The steps we have taken and our strategic focus will enable us to succeed in our fast-changing environment, bringing us closer to our vision of being the partner of choice in tooth replacement and to our aspiration of extending our global leadership to the value segment. Global presence, size, infrastructure, partners and financial capability give us a valuable advantage in this respect.

Key markets in Europe are expected to improve mod-estly but may continue to lag for some time and will doubtless become increasingly competitive. We expect our performance there to be constrained by the weak economy. On the other hand, Asia has improved, while North America and emerging markets like Brazil and China hold much promise, and we are very well positioned to tap their potential.



We expect the global implant market to improve fur-ther in 2015 and our own revenue to grow organi-cally in the mid-single-digit range. Our revenue in Swiss francs will be influenced by the recent exchange rate turbulence.

We will balance our investments between growth markets and other strategic projects, taking decisive steps to mitigate the consequences of the very strong Swiss franc. These measures include compensation reductions in Switzerland as well as strict hiring and travel restrictions. Collectively, they will help to achieve our 2015 organic EBIT margin target of at least 20%, which is based on the assumption that the exchange rates remain more or less at their February 2015 levels.

We would like to thank all our employees on your behalf for their hard work, engagement and loyalty to Straumann. In particular, we would also like to acknowledge our employees in Switzerland for their solidarity in agreeing to compensation reductions in 2015 to help mitigate the severe currency impact.

And last but not least, we would like to thank you, our shareholders, for your continued support and confi-dence in our company.

Yours sincerely

GILBERT ACHERMANN MARCO GADOLAChairman of the Chief Executive OfficerBoard of Directors

26 February 2015

REFERENCES/FOOTNOTES1 The term ‘organic’ used throughout this report means excluding

the effects of currency fluctuations and acquired/divested business activities.

2 Douglass CW, Shih A, Ostry L. Will there be a need for complete dentures in the United States in 2020? J Prosthet Dent. 2002 Jan; 87(1): 5-8.


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“My part is translating the technology into a graphic layout.”STEVEN GRAVINOGRAPHIC DESIGNER

“My job is keeping the team on track.”BRUNO ZBERG SENIOR PROJECT MANAGER

“I love the people, the products and the passion of everyone who works here.”CORINNE STANZELGLOBAL PRODUCT MANAGER


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A job that helps to improve lives

BRUNO ZBERGSENIOR PROJECT MANAGER 5.5 YEARS @ STRAUMANN

Bruno says that he and Straumann are a good fit. “It’s a Swiss company with a clear strategy and highly educated, skilled, com-mitted people focused on the same goal. I like doing a job that helps people and improves their lives. The satisfying part is seeing the product in the dentist’s hand.”

CORINNE STANZELGLOBAL PRODUCT MANAGER3 YEARS @ STRAUMANN

“Wherever you see Straumann in advertising, at congresses and trade shows, you see high quality,” says Corinne. She’s especially proud of the Straumann PURE Ceramic, which addresses a real patient need and took nine years of research and development to meet highest quality standards. “That made the launch very emotional.”

STEVEN GRAVINOGRAPHIC DESIGNER3 YEARS @ STRAUMANN

Steven is one of scores of creative people in diverse areas at Strau-mann. His mission is to communicate the whole concept visually. “We create unity worldwide with a consistent identity and it’s a lot of fun.”


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Straumann PURE Ceramic ImplantMore than esthetic advantages

When we show patients a white ceramic implant alongside a grey metal implant and ask which they would prefer, most of them choose the former for its looks. Ceramic materials offer a distinct esthetic advantage to metals in dental applications. Furthermore, ceramic provides a good biocompatible alternative for patients asking for metal-free implants.

Until recently, there were concerns about the mechanical predict-ability of ceramic materials. Straumann has overcome this hurdle through an innovative manufacturing process and testing proce-dure (see far right).

Straumann PURE uses a monotype design for reliability


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ZLA SURFACEThe esthetic properties are exceptional with a translucent ivory color – like natural tooth roots –and a specially-developed ZLA surface to acceleratethe healing process and promote highly pre-dictable bone integration.

98 % SUCCESS/SURVIVAL,ZERO BREAKAGES1

To ensure the reliability of our ceramic implants we designed a new testing method, which checks mechanical strength through 360 degrees.

Every single Straumann PURE implant undergoes this ‘proof test’ – a level of quality checking that is exceptional in the dental implant industry.

1 Gahlert M, et al. Prospective Open Label Single Arm Study to Evaluate the Performance of Straumann Ceramic Implants Monotype CIM (Zirconium diox-ide) in single tooth gaps in the maxilla and mandible. EAO 2013, Poster 252, Clin. Oral Impl. Res. 24 (Suppl. s9), 2013, p. 123.

NEW SMALL DIAMETER PERFECTED The Straumann PURE ceramic implant was introduced at the end of 2013 after a 7-year development program. Since then we have perfected a small-diameter (3.3 mm) version which was launched at the EAO in 2014 and is designed for metal-free treatments in the esthetic zone at the front of the mouth. Although the requirement for metal-free alternatives is not a major driver of today’s market, the availability of ceramic im-plants with similar performance, flexibility and predictability to their metal predecessors will undoubtedly change implant den-tistry. Straumann PURE may be a first step in this direction.

100% tested

PURE confidence based on thorough examination and rigorous testing.


22

Management commentaryContents

23 Business model & objectives

26 Strategy

30 Products, services, solutions

34 Innovation

38 Markets

48 Business performance – Group

52 Business performance – Regions

66 Business performance – Financials

78 Risk and sustainability report

Management commentary Business model & objectives


Management commentary Business model & objectives 23

STRAUMANN IN BRIEFWHO WE ARE AND WHERE WE ARE FROM Headquartered in Basel, Switzerland, the Straumann Group is a global leader in tooth replacement. The company was founded in 1954 as a research institute specialized in alloys. Having moved into the field of osteosynthesis in the 1960s, it became a pioneering force in dental implantology, which became its sole focus in 1990. Twelve years later it expanded into oral tissue regeneration and in 2007 it entered the field of CADCAM tooth restoration in order to pro-vide full tooth replacement solutions. Institute Straumann remained a family-owned business until 1998, when it became a public company, traded on the SIX Swiss exchange.

Today Straumann develops, manufactures and sup-plies dental implants, instruments, CADCAM pros-thetics and tissue regeneration products for use in tooth replacement and restoration solutions or to pre-vent tooth loss (see p. 30 ff.).

Straumann’s implant components and instruments are manufactured in Switzerland and the US. Its CADCAM prosthetics are milled centrally in Germany and the US, while its production facility for oral tissue regeneration products is located in Sweden.

Straumann offers a wide range of services to dental practitioners, clinics and laboratories all over the world. It is recognized as a leading innovator in its field, working in collaboration with leading universi-ties, clinics, and research institutes to further increase the standard of patient care. Through a unique collab-oration with its academic partner the International Team for Implantology ( ITI ), the Group supports research and offers training and education to dental professionals worldwide.

The Group currently employs 2387 people worldwide. Its products, solutions and services are available in

more than 70 countries through a broad network of distribution subsidiaries and partners (see chart on p. 172 for overview of subsidiary and distributor loca-tions). More than 90% of the business is conducted directly through fully-owned subsidiaries.

OUR PURPOSE AND GUIDING PRINCIPLEStraumann wants to be the provider of choice for den-tal professionals and patients when it comes to tooth replacement solutions. We aim to achieve this through innovative products, solutions, and commercial approaches, and highly motivated, creative employ-ees. In 2014, we formulated a new engaging vision that reflects the Group’s purpose, priorities and strat-egy: More than creating smiles, restoring confidence.

This purpose/aspiration is supported by our core beliefs and longstanding guiding principle of ‘simply doing more’, which apply to our daily operations – in the interest of patients, the dental community and our other stakeholders.

STRAUMANN’S CORE BELIEFSRELIABILITY IS OUR TRADEMARK

We deliver peace of mind. Our customers and patients trust us for consistent quality and service excellence.

SIMPLICITY IS OUR STRENGTH

In an increasingly complex world, we seek solutions that make life simpler for customers and patients.

CUSTOMERS ARE OUR INSPIRATION

We are dedicated to the success of all our customers. We always seek to understand their perspective and to deliver what we promise.

PEOPLE ARE OUR SUCCESS

Our success depends on skilled, caring, trustworthy and diverse individuals who work as a team and share our passion for innovative solutions and ser-vice excellence.

Business model & objectives

Management commentary Business model & objectives


CADCAM prosthetics

Oral tissue regeneratives

Implants & abutments, etc.

Intra-oral scanning CADCAM

Regenerative dentistry Restorative dentistry Implant dentistry

Guided surgery

STRAUMANN OPEN DIGITAL WORKFLOW

OUR BUSINESS

24 Management commentary Business model & objectives

ACHIEVING MORE IS OUR FUTURE

We strive relentlessly for better solutions and to cre-ate value for our stakeholders. We must always believe in our ability to achieve more.

A GLOBAL PARTNER OF CHOICEStraumann is committed to being the premium partner of choice for tooth replacement, offering

education, innovation, quality, support, expertise, clinically proven long-term success, and peace of mind. At the same time, the Group seeks to become a global leader in the fast-growing ‘value’ segment.

In 2012, it began to pursue a multi-brand strategy leading to investments in several important value brands including Neodent, Medentika, MegaGen,


PREMIUM OFFERING

Innovation / R & D

Education

Documentation

Network

Global reach

Quality

Service

VALUE OFFERING

Biodenta

MegaGen

Medentika

Neodent

T-Plus

STRAUMANN GROUP

Regeneratives/ImplantsPRODUCTS &

SOLUTIONS

CUSTOMERS Specialists General dentists

Prosthetics

Labs

Patients

OUR BUSINESS MODEL

COMMON TECHNOLOGY PLATFORM

botiss biomaterials

Createch Medical

Dental Wings

etkon

Rodo Medical

Management commentary Business model & objectives 25Management commentary Business model & objectives

T-Plus and Biodenta. In 2014, Straumann created the Instradent business platform to drive and manage the distribution and internationalization of its value brands through its own growing network with country organizations in the USA, Iberia, Germany and Italy.

To serve its various businesses and to spur innova-tive approaches, Straumann has also invested in a

common technology platform, which features bot-iss biomaterials (tissue regeneration), Createch Med-ical (CADCAM prosthetics), Dental Wings (digital dentistry), etkon (CADCAM prosthetics), and Rodo Medical (prosthetic components).

The Straumann Group is a global leader in tooth replacement. Our core premium business is built on the Straumann Dental Implant system supported by CADCAM prosthetics, digital workflows and oral tissue regeneration products, which together make up a compre-hensive solution. Innovation (p. 34), research, development, global reach, guaranteed quality, and service excellence are all inherent to the Straumann brand. So too are clinical evidence, high standards of education and a global network. In these areas, we collaborate with leading institutes, universities and the ITI (p. 87).

We produce most of our products in house (p. 95 f.) and sell them to dental professionals either directly or through distribution part-ners. Our customers (p. 84 ff.) are specialists, general dentists, and dental labs, which prepare the prosthetic restorations for the den-tists. Patients are addressed by general dentists, who often decide on the type of treatment and system, and specialists.

We address the value segment of implant dentistry mainly through the Instradent platform of international brands (p. 27) in which we hold investments. To provide complete solutions, we have entered a number of partnerships/agreements that, together with fully and partially-owned companies, form a shared technology platform that can serve both our premium and Instradent businesses (see p. 28).


Management commentary Strategy26

At the heart of Straumann’s strategy are three key pri-orities which provided the strategic focus in 2014 as we pursued our goal of being the provider of choice in tooth replacement:

– Drive a high-performance culture and organization, – Target unexploited growth markets and – Address the changed dynamics of our core markets.

These strategic priorities translate into a number of clearly defined initiatives with clear responsibilities, action plans and deliverables, which are continuously tracked and adjusted as necessary. They also serve as a basis for individual target-setting and performance assessments. For competitive reasons, details of the various initiatives cannot be disclosed although most of them are reflected in the major activities, invest-ments, product launches and other achievements fea-tured in this report.

ENGRAINING HIGH PERFORMANCE IN OUR CULTUREWith regard to the first priority, the most remarkable achievement is that we have built further on the turn-around achieved in 2013 and delivered substantial rev-enue and volume growth, with improved profitability. Examples of this strategy in action include efficiency/productivity gains in operations (see p. 48 ff.) and im-proved sales-force effectiveness achieved through a global training/coaching initiative combined with vari-ous tools to improve efficiency. While these achieve-ments confirm that we are addressing the right issues, it will take time to achieve a high performance culture and further efforts are needed. A key initiative in this respect is our ‘cultural journey’, which is explained on p. 88. The recent strong appreciation of the Swiss franc has prompted us to sharpen our focus on high perfor-mance initiatives in order to reduce our cost base fur-ther and thus preserve margins.

BECOMING THE PARTNER OF CHOICE IN THE GLOBAL PREMIUM AND VALUE SEGMENTSThe most prominent example of our efforts to address the second strategic priority is our progress in penetrat-ing the value segment globally.

As a pioneering innovator in implant dentistry, the premium segment remains our key focus and we are determined to strengthen our leadership position in it – through continued innovation, documented clinical research, differentiated solutions, service excellence, high standards of training/education, a global network, and a (lifetime) guarantee on original products.

In recent years, there has been a marked increase in local and regional ‘value’ players who offer implant and prosthetic products at lower prices. Many are copycats. Few offer the high level of service, support, innovation, long-term assurance, etc. that are inherent to the Strau-mann brand. Nevertheless, the value segment now accounts for more than a third of the global implant market, reflecting a shift in customer needs towards a ‘good enough’ mentality. With this segment growing faster than premium, it offers a significant business opportunity which we need to capture in order to attain our goal of being the global provider of choice.

Our strategy has been to build a portfolio of value com-panies that operate as separate brands with their own philosophy, sales force and value proposition. The com-panies have growing footprints in key markets, making them valuable strategic assets for Straumann. Partial ownership ensures entrepreneurial flexibility and will enable each company to maintain its own character and dynamism. It also enables Straumann to treat its inter-est as a ‘strategic’ or an ‘entrepreneurial’ investment, depending on the development of the company and the market.

StrategyDriving sustainable growth aftera successful turnaround


Management commentary Strategy Management commentary Strategy 27

Company Specialty Reach Key facts Straumann’s stake

Neodent (Brazil)

Offers full dental implant system and service.

Market leader in Bra-zil. Present in major implant markets through Instradent or distributors.

Founded 1993Privately heldNearly 1000 employees

49% stake acquired in 2012 with options to increase to 100% by 2018.

Medentika (Germany)

Offers broad range of implant prosthetics for multiple implant systems. Recently established own implant business.

Products sold directly in Germany and through distributors in Europe and the rest of the world.

Founded 2005Offers multi-platform prosthetic systems. Approx. 40 employees

51% acquired in 2013

MegaGen (S. Korea)

Offers broad range of implant systems, digital solutions, regenerative tools and products to support implant procedures.

Sold mainly in S. Korea; distributors in Europe, North Amer-ica and emerging markets.

Fast-growing dental implant company. Fills the need for a strong partner based in Asia. More than 200 employees.

USD 20 million convertible bond acquired in 2014, to be extended by USD 10 million in March 2015. Option to convert to shares in 2016.

Biodenta (Taiwan, Switzer-land)

Offers comprehensive solutions for dentists and dental laborato-ries.

Sold mainly in emerg-ing markets.

Founded 2007Approx. 100 employees

CHF 7 million Convertible bond acquired in 2014. Options to convert to shares over 5 years.

T-Plus (Taiwan)

Offers dental implants and related prosthetic components.

Sold mainly in Tai-wan. Regulatory approvals in China, Europe & the US.

Founded 2009. Offers opportunity to tap into the lower end of the value segment and into the Chi-nese value market. 20 employees

Approx. 43% to be acquired in 2015; with options to increase to 90% by 2020.

Europe1 NAM LATAM APAC

Implant systems Implants Neodent Neodent Neodent MegaGen

Biodenta Biodenta T-Plus

Medentika MegaGen Biodenta

MegaGen

Prosthetics Neodent Neodent Neodent MegaGen

Medentika T-Plus

Createch Biodenta

Prosthetics for 3rd party implants

Abutments Medentika Medentika Biodenta

Precision bars/bridges Createch

1 in selected countries

PORTFOLIO OF INVESTMENTS TO TARGET THE VALUE SEGMENT

KEY BRANDS BY SEGMENT AND GEOGRAPHY


Management commentary Strategy28

In 2014, we complemented our stakes in Neodent and Medentika by investing in MegaGen and Biodenta, which give us a foothold in the fast-growing Asian value segment (see previous page). In addition, we are in the process of acquiring a stake in T-Plus, opening a door to the value segment in China.

To drive the international commercialization of these brands, we created the Instradent business platform in 2014. By year end, Instradent had established sub-sidiaries and sales teams in Iberia, Italy and the US. Each of them began by distributing the Neodent implant system, which targets users of competitor systems to Straumann. The next step will be for these susidiaries to add other brands – for instance Medentika.

Penetrating other attractive segments and geogra-phies under our Straumann premium brand is also a strategic initiative. In 2014 we made inroads into the dental chain segment, signing an agreement with ClearChoice, one of the leading chains of dental clinics offering dental implants in the US. We began serving ClearChoice clinics in 2015 as a preferred partner.

In the dynamic Chinese market, the key priorities are to expand beyond the hospital/university clinic sector into the private practice segment, where implant den-tistry is rapidly gaining popularity, and to penetrate the fast-growing value segment. This required a new

strategic approach. In 2014, we took over distribu-tion from our former distributor and began imple-menting a hybrid model with our own subsidiary, consultative sales force and a network of indepen-dent distributors (see p. 58).

CHANGED DYNAMICS OF CORE MARKETS A number of initiatives related to our third strategic priority were completed in 2014. For instance, suc-cessful campaigns in Europe and North America enabled us to establish Roxolid as the new premium standard material for implants, switching the great majority of our customers in key markets from conventional titanium to the differentiated superior material.

In recent years, tapered-design implants have become widely established and account for more than 50% of implants sold today. One of our strate-gic initiatives is to compete in this segment, result-ing in the development of a new generation Bone Level Tapered implant in Roxolid and with the SLAc-tive surface. This has been very well received and the full market release is underway.

Based on our strategic priorities, we have developed solution ‘packages’ for single-tooth replacement and for fixed edentulous immediacy (see p. 14, 85 and 158 f.) which comprise implants, prosthetic components, digital services and treatment concepts.

Company Activities Reach Key facts Straumann’s stake

botiss biomaterials (Germany)

Oral tissue regeneratives International Europe’s second largest supplier.

Secured loan of CHF 3.6 mil-lion; option to obtain up to 30% in 2017

Createch Medical (Spain)

Specializes in high-end CADCAM bridges, bars and abutments for multiple implant systems.

Sold mainly in Spain, Germany and other markets in Europe.

Established 2006;30 employees

30% acquired in 2013 with options to increase to 100% by 2019.

Dental Wings (Canada)

Dental prosthetics design (CAD) open software and scanners

Distributed by Strau-mann and leading dental companies in over 45 countries.

Established 2007; >100 employees. Platform to develop lab & chairside hard- & software solu-tions

30% acquired in 2011; 14% added in 2012

etkon(Germany)

Centrally milled CADCAM prosthetics.

Global through Straumann

Established 2000;acquired 2007

Fully-owned

Rodo Medical (USA) Prosthetic fixture devices Start-up company Established 2009 12.5% acquired 2014

TECHNOLOGY PLATFORM OF OWN COMPANIES AND PARTNERS


Management commentary Strategy Management commentary Strategy 29

The single-tooth package is designed for starters in implantology. Since the general practitioner seg-ment is growing significantly – especially in the US – we have established partnerships with Patter-son Dental (for distribution) and SPEAR (for educa-tion) to increase our reach to GPs in a responsible and low-risk way.

Market dynamics in the restorative business pres-ent a challenge. Price pressure is intense and differ-entiation increasingly difficult. In addition, chairside and in-lab digital workflows are gaining importance and compete with our CADCAM centralized milling business model. Apart from this, we have therefore broadened the reach and accessibility of our CAD-CAM franchise through connectivity with 3M’s True Definition Intraoral scanner and 3Shape’s software. We are continuously increasing the functionality of our CARES software and Scan & Shape service.

Another initiative was the launch of our cost effec-tive Variobase abutment, which has enabled us to compete more effectively against copies of our orig-inal standard prosthetics.

BECOMING A TOTAL SOLUTION PROVIDEROur progress in 2014 means that we will adjust our third strategic priority to ‘becoming a total-solution provider for tooth replacement’. This will be achieved through offering customers conventional, semi-digital and digital workflow solutions for all major tooth replacement indications – from single tooth to full dental replacement. The launch of Pro Arch (see p. 158 f.) is one step in this direction. The new strategic priority is an extension of our current initiatives and reflects the focus shift from isolated products to indication-based solutions along work-flows supported with related services. This appro-ach puts further emphasis on digital workflows in dental practices and labs.

In order to provide complete solutions, we have entered a number of partnerships and agreements, which – together with fully and partially-owned companies – form a shared technology platform, which can serve both our premium and Instradent businesses (see p. 28). Botiss and Rodo Medical were two additions to this platform in 2014.

OUTLOOKRecent consolidation in our industry raises the ques-tion of whether Straumann will have the critical mass to retain its leadership position in the field. Based on our good performance, strong global brand and broad portfolio of partnerships, we are confident that we will. Nevertheless, we continue to evaluate new opportunities for potential acquisitions and partnerships. We also continue to watch our chang-ing market and environment carefully and may adapt our strategy accordingly.


Management commentary Products, services, solutions30

Products, services, solutionsMeeting treatment needs, adding convenience, reducing costs, saving time, adding value

Sectional overview of Straumann’s products.

Membranes

Restorativecomponents

SLA/SLActive surface

Bone augmentation materials

Soft Tissue andBone Level Implants

(Roxolid, Titanium, Ceramic)

Emdogain

CADCAMprosthetics

STRAUMANN PRODUCTS


Management commentary Products, services, solutions Management commentary Products, services, solutions 31

SOLUTIONS ARE OUR BUSINESSFor more than six decades, Straumann has been inno-vating, developing, testing and refining products that address real patient needs and contribute to quality of life. We have also been combining products, technolo-gies, procedures and services into solutions that add convenience, save time, reduce cost and add value.

Straumann offers approximately 2 800 items, which are used by oral surgeons, specialists and general prac-titioners as well as dental laboratories in procedures that range from saving compromised teeth, to individ-ual tooth restoration right up to complete dental replacement. We strive to broaden treatment options, increase precision and longevity, minimize discomfort, and add value and security. In 2014, we introduced a number of innovations, which are presented on pages 10 f., 20 f., 46 f., 64 f., 76 f., 104 f. and 158 f.

TOOTH REPLACEMENT2014 marked the 40th anniversary of Straumann’s Dental Implant System. Covering all indications, it com-prises Soft Tissue Level and Bone Level implants with parallel wall and tapered designs in a variety of lengths and diameters. It also includes a wide range of standard and individualized prosthetic components, and all necessary surgical instruments. Straumann implants are machined from our exclusive high-performance material Roxolid (see p. 10 f.), or pure titanium, or ceramic (see p. 20 f.). To enhance osseointegration and thus to improve healing, we supply our implants with SLA, SLActive, or ZLA surface technology.

HERITAGE AND BENCHMARK: THE STRAU-MANN SOFT TISSUE LEVEL IMPLANTStraumann pioneered the Soft Tissue Level Implant, which simplifies soft tissue management and pros-thetic restoration, saving time, discomfort and cost. Lasting reliability might be its greatest benefit: the Straumann SLA Soft Tissue Level Implant has been on the market for more than 15 years and is backed by ten-year clinical results showing survival and success rates of 99% and 97% respectively, with zero implant fractures1. High survival rates after 9 years were also reported in a landmark study published in 2014.2

BONE LEVEL IMPLANTSIn contrast to soft tissue level designs, bone level implants have prosthetic connections that are below

the gums, at or close to the crest of the jaw bone. While advantages are claimed for each design, market research shows that the choice of implant type is driven mainly by user preference. Today, more than a third of the implants we sell are Bone Level. The major-ity of implants placed worldwide have Bone Level tapered designs, and their popularity is increasing. This is why we have entered the segment with our ‘new generation’ BLT, made of Roxolid and finished with the SLActive surface (see p. 46 f.).

RESTORATIVE SOLUTIONS (PROSTHETICS)While implant dentistry has always been a key area for innovation, many advances are being made in pros-thetics and in digital dentistry. Substitution of stan-dard implant prosthetics with digitally individualized components is an important trend. Customers appre-ciate the advantages of high-precision CADCAM solu-tions, since they offer efficiency gains for clinicians as well as time/cost savings, greater comfort and lasting satisfaction for patients.

COMPUTER-AIDED RESTORATIVE SOLUTIONSComputer-aided design/manufacturing (CADCAM) is used to design and fabricate prosthetic crowns, bridges, onlays and inlays more efficiently than tradi-tional methods. The cornerstones of our CADCAM sys-tem are its software (CARES Visual) for scanning, designing and ordering, and our milling centers in Ger-many and the US, which manufacture the prosthetic elements. Our partnership with Dental Wings enables us to offer state-of-the-art in-lab scanners and access to third-party scanners via the Dental Wings Open Software (DWOS) platform. In 2014, we added user access to the 3Shape system.

THE STRAUMANN DENTAL IMPLANT SYSTEM

Designed for maximum flexibility with a minimum number of components, the highly versatile Straumann Dental Implant System covers all indications and preferences – from standard applications to super-esthetic individualized CADCAM solutions.


Management commentary Products, services, solutions32

Thanks to our open system, users have several data input possibilities and the option of producing pros-thetics through the CARES validated workflow (cov-ered by our guarantee) or through alternative milling processes, if desired. 3

The X-Stream functionality in CARES Visual enables customers to design abutments and the correspond-ing full-contour crown or coping simultaneously from a single scan instead of two. Milled for excellent fit and consistent quality in a controlled environment at our etkon facilities, prosthetic parts are then delivered together, significantly reducing turnaround time and shipping costs.

REGENERATIVE SOLUTIONSStraumann regenerative products are designed to restore gums, oral bone and periodontal tissues that support teeth.

At the 2014 ITI World Symposium in Geneva, Strau-mann and Berlin-based botiss biomaterials announced a partnership to provide complete oral tissue regener-ation solutions to dental professionals worldwide. Botiss is Europe’s second largest supplier of oral tissue regeneration products. Its portfolio of clinically proven, high quality solutions includes membranes for guided tissue and bone regeneration, a full range of bovine, allogenic and synthetic bone graft materials, as well as soft-tissue-graft products. Backed by many years of clinical experience, botiss products are used in leading clinics across Europe.

With botiss, Straumann is able to offer an unparalleled range of regenerative solutions to support implant and periodontal procedures. This means that custom-ers can obtain everything for a complete solution from one company. The distribution of the respective prod-ucts began in the fourth quarter 2014, while regula-tory clearances still have to be obtained in the Ameri-can and Asian markets .

OUTLOOK (PRODUCTS)We continue to work on solutions to improve produc-tivity, treatment options and clinical outcomes. In order to provide clinicians with a comprehensive range of treatment options for their patients, we aim to bring meaningful innovations to the market and to make them as widely available as possible.

SERVICESMORE THAN PRODUCTSTo complement our products and solutions, and to support their effective implementation, we offer a broad spectrum of services. For instance, we assist with networking and arrange experienced mentor-ing, if requested. Service of this kind requires staff with an extremely high standard of professional knowledge, who are able to provide the necessary information and instruction on products. Extensive training is therefore an important aspect. We also offer initiatives to help clinicians develop practical skills, such as practice management and business expansion.

CLOSER TO CUSTOMERS We serve and support customers directly through a highly trained sales team, enabling us to provide a personalized service with a high level of expertise. Each Straumann sales subsidiary operates a call cen-ter for customers in need of assistance. Callers are quickly linked to a specialist for product support.

CARES SCAN & SHAPEScan & Shape is one of several services to broaden the reach and accessibility of our CADCAM franchise. It addresses laboratories that wish to order original Straumann custom abutments but do not have the requisite scanning capabilities. They simply send us a model or wax-up and we do the scanning, design and manufacturing for them. In addition to quality, preci-sion and convenience, they benefit from original parts and our guarantee – without having to invest in scanning equipment or software.

EXPANDING TRAINING & EDUCATIONLong-term success and patient satisfaction depend on education and the experience of the dental pro-fessional. Straumann offers a broad educational pro-gram, including classic implant dentistry, tissue regeneration and state-of-the-art digital solutions, covering all proficiency levels and relevant special-ties. The program is based on the clinical guidance of the International Team for Implantology with most of the teaching provided by ITI specialists and renowned experts, in collaboration with leading uni-versities. Courses are offered around the world, with the highest concentration in North America and the most rapid increase in China, where Straumann is


Management commentary Products, services, solutions Management commentary Products, services, solutions 33

investing significantly in order to build a consulta-tive sales force and a local training and education organization.

GUARANTEED PEACE OF MINDStraumann implants are covered by a lifetime guar-antee (void if our implants are combined with other manufacturers’ components). Our abutments and restorations come with a limited guarantee.

THE E-SHOPPING EXPERIENCEThe traffic on our new web shop is steadily rising, adding value and convenience for customers and offering possibilities for cross-selling and efficiency gains. A substantial part of our business is now gen-erated through orders coming through the e-shop.

THE SOCIAL MEDIA CHANNELStraumann embraces social media to address cus-tomers’ needs for value-added content. More than 70 000 fans have joined our community on Facebook, engaging almost 240 000 times with Straumann con-tent. Social media have changed the way people con-nect, discover, and share information, leaving room for emotional and interactive communication.

COMPREHENSIVE PATIENT INFORMATIONResearch suggests that every other patient consults the internet before, after and sometimes even dur-ing the consultation. Based on the information found, patients choose a treatment or a dental pro-fessional that is tailored to their needs. The Strau-mann Patient Pro marketing solution is a compre-hensive platform that provides dental professionals with digital information to educate patients and to promote their practice.

OUTLOOK (SERVICES)We strive to extend service solutions that enhance convenience, leverage efficiency and add value for cus-tomers and patients – for instance by helping dentists build their businesses.

Education is the key to driving implant dentistry – both in established and new markets. It is also essen-tial for sustaining high treatment standards and suc-cess rates. This is why we will continue to be its strong advocate, together with the ITI and dental faculties all over the world. To broaden access to education and

information, we will make even greater use of new media channels, including e-learning and e-health platforms, doctor finders, etc.

REFERENCES/FOOTNOTES1 Buser D et al.: 10-year survival and success rates of 511 titanium

implants with a sand-blasted and acid-etched surface: a retrospective study in 303 partially edentulous patients. Clin Implant Dent Relat Res 2012;14:839–851.

2 Derks J, et al. Dept of Periodontology, Institute of Odontology, Sahlgrenska Academy, University of Gothenberg.

3 Except in the US, where milling has to be performed by a Straumann milling center.


Management commentary Innovation34

InnovationDriven by customers – focused on commercial success

Straumann’s 60 year story is one of successful in-ventions that have set industry standards and improved lives – especially in the field of implantol-ogy. The company was a pioneering force in implant dentistry and is still a leading innovator in the field. Roxolid, SLActive and Straumann PURE are recent examples. In 2014, we continued to invest in R&D, boosting the number and quality of our pipe-line projects.

INNOVATION PROCESS REFINEDThe pace of change in our industry has accelerated, so that dental implants are becoming mass prod-ucts. At the same time, the trend in innovation is shifting from groundbreaking technological break-throughs to sales processes, holistic approaches and

incremental improvements in products. For us, inno-vation goes beyond creating and developing new ideas to making them commercial successes, which means that our innovation process has to be cus-tomer- and market-driven. This was the goal of the process reorganization we implemented in 2013 and refined in 2014, bringing R&D, Operations and Mar-keting closer together to orchestrate research, regu-latory, production and other activities, such as pre-marketing and launch.

ATTRACTING GENIUS AND SCREENING IDEAS To collect as many leads as possible, we further developed and publicized our web-based innovation platform. This enables customers, researchers, clini-cians, employees and other stakeholders to submit

STRAUMANN IDEA PORTAL – WHERE THE IDEAS HAVE COME FROM

35%

20%

8%

6%

31%

¢ Straumann employees¢ Dental professionals¢ Other companies¢ Universities & clinics¢ Other 38%

10%

6%

12%

34%

¢ North America¢ Europe¢ Switzerland¢ Latin America¢ Other


Management commentary Innovation Management commentary Innovation 35

ideas in a framework that assures confidentiality and respects intellectual property. The review pro-cess ensures that we focus on ideas that have a high probability of commercial success and address cus-tomer needs, which vary by market and region. In 2014, more than 120 ideas were submitted from various sources as shown in the chart above. Eleven have been followed up as potential leads.

PRODUCT REALIZATION Our comprehensive development program focuses on projects that will contribute directly to revenue and profit. Teams, consisting of marketing, R&D, etc., work in tandem to expedite the process and to ensure the validity of the concepts. These are sum-marized in the table above.

RIGOROUS TESTING – TRUSTED PRODUCTS Our research activities range from basic laboratory investigations through to clinical trials, controlled market releases and post-market surveillance pro-grams. The investigations are conducted by our own teams and in collaboration with experts at well-known facilities worldwide, ensuring that the research is state-of-the-art, scientifically sound and of the highest quality.

PRECLINICAL RESEARCH – THE SCIENTIFIC FOUNDATIONIt is essential that all products destined for patients are appropriately tested for biocompatibility, stability, strength, and to ensure that the properties developed in the laboratory can be reproduced commercially.

Project Key benefit target Introduction/rollout

Roxolid SLA Higher strength for SLA implant line 2015

Bone Level Tapered High primary stability, surgical flexibility 2015

Ceramic implants High-end esthetic, metal-free implant system 2016

Smaller diameter implants Strong solution for narrow inter-dental spaces 2016

Smart Solution for simple indications & less experienced practitioners 2015

Abutment blanks With Straumann original connection for milling centers 2015

Variobase prosthetics Bars & bridges with CARES X-Stream 2015

Flexible solution for implant-borne chair-side restorations 2015

Pro Arch Solutions for fixed full arch restorations 2015/2016

3M ESPE Lava Plus Efficient and esthetic high translucent zirconia, especially suitable for full contour restorations

2015

New proprietary material for restorations

Glass ceramic, improved handling 2016

Integrated workflow Digital immediate tooth replacement 2015/2016

New CARES in-lab scanner State-of-the-art scanning technology 2015

CARES Visual 10 Integration of digital workflows 2015

Emdogain New indications 2015/2016

Osteogain Bone enhancement 2015

A STOCKED INNOVATION PIPELINE

Highlights from Straumann’s development pipeline showing changes in 2014. Introduction/rollout dates may be subject to positive clinical results and regulatory clearances, and barring unforeseen circumstances.


2014 PEER-REVIEWED PUBLICATION HIGHLIGHTS

Authors Study Title Product Journal Conclusion

Quirynen M, Al-Nawas B, Meijer HJ, Razavi A, Reichert TE, Schimmel M, Storelli S, Romeo E.

Small-diameter titanium Grade IV and titanium-zirconium implants in edentulous mandibles: three- year results from a double-blind, randomized controlled trial.

Roxolid Clin Oral Implants Res. 2014 Apr 9

98.7% implant survival rates after 3 years in fully edentulous patients

Lambert F, Lecloux G, Grenade C, Bouhy A, Lamy M, Rompen E.

Less invasive surgical procedures using narrow diameter implants: a prospective study in 20 consecutive patients.

Roxolid J Oral Implantol. 2014 Apr 25

Narrow diameter implants seem to be an effective treatment option that prevented GBR (Guided Bone Regeneration) in the majority of the present cases

Wennerberg A, Jimbo R, Stübinger S, Obrecht M, Dard M, Berner S.

Nanostructures and hydrophilicity influence osseointegration: a bio-mechanical study in the rabbit tibia.

SLActive Clin Oral Implants Res. 2014 Sep;25(9)

Wettability and presence of nanostructures led to strongest bone response

Erdogan O, Uçar Y, Tatlı U, Sert M, Benlidayı ME, Evlice B.

A clinical prospective study on alveolar bone augmentation and dental implant success in patients with type 2 diabetes.

SLActive Clin Oral Implants Res. 2014 Jul 11

100% implant survival rates after 12 months in diabetic patients

van Velzen FJ, Ofec R, Schulten EA, Ten Bruggenkate CM.

10-year survival rate and the incidence of peri-implant disease of 374 titanium dental implants with a SLA surface: a prospective cohort study in 177 fully and partially edentulous patients.

SLA Clin Oral Implants Res. 2014 Nov 5

Study with 374 implants demon- strates 99.7% implant survival rate after 10 years

French D, Larjava H, Ofec R. Retrospective cohort study of 4591 Straumann implants in private practice setting, with up to 10-year follow-up. Part 1: multivariate survival analysis.

SLA Clin Oral Implants Res. 2014 Aug 19

High long-term implant survival rates from a private practice with 4591 documented implants

Derks J, Håkansson J, Wennström JL, Tomasi C, Larsson M, Berglundh T.

Effectiveness of implant therapy analyzed in a Swedish population: early and late implant loss.

SLA Clinical Research Supplement of the Journal of Dental Research (epub)

Implant loss influenced by brand; Straumann ahead of 7 other brands named

Management commentary Innovation36

Technologies, materials and designs that maintain the necessary characteristics are studied in vivo, which often includes evaluating the surgical technique.

CLINICAL RESEARCH – BUILDING THE EVIDENCEStraumann’s products and technologies are thor-oughly evaluated within a defined and streamlined global clinical study program. This may comprise single- and multi-center studies, as well as investiga-tor-initiated studies. Proposals for the latter are carefully screened and may be supported in various ways. Clinical investigation can further include large post-market surveillance or non-interventional stud-ies (NIS), with a range of patients and indications treated in daily practice conditions.

In 2014, an impressive body of scientific evidence on Straumann products was published in peer-reviewed journals. Very few implant companies per-form clinical studies on this scale. The compelling results provide clear reasons why customers should trust in Straumann products rather than undocu-mented alternatives.

One of the most compelling studies published in 2014 was performed by independent investigators, without support from Straumann. Using the national data register of the Swedish Social Insur-ance Agency, they gained access to data on 11 311 implants in 2765 patients. In addition, a clinical eval-uation was performed on 596 patients 9 years after treatment. A key observation was that implant


Management commentary Innovation Management commentary Innovation 37

brand influenced implant loss. The evaluation showed that Straumann significantly outperformed other brands with regard to short-term implant survival. 1

OUTLOOK The driving forces of Straumann’s innovation pro-cess are customer needs and commercial success. Rigorous scientific testing provides customers and patients with reliability, quality and peace of mind.

With this in mind we will continue to invest signifi-cantly in research and development.

FOOTNOTES1 Derks, J, et al., Dept. of Periodontology, Institute of Odontology,

Sahlgrenska Academy, University of Gothenberg.


5 – 10%

40 – 45%15 – 20%

30 – 35%

¢ Europe¢ North America¢ Asia/Paci�c¢ Rest of the World

¢ Straumann¢ Nobel Biocare¢ Dentsply Implants¢ Biomet 3i ¢ Zimmer Dental¢ Others

20%

17%

41%

4%6%

12%

Management commentary Markets38

MarketsCompeting in a CHF 7 billion market

THE MARKET FOR IMPLANT DENTISTRYThe implant dentistry market comprises dental im-plants and abutments 2 along with supporting tools/instruments, which make up only a small portion. Based on our internal estimates as well as reports from other companies and independent research, we believe that the market grew at a low to mid-single- digit pace in 2014 and is valued at over CHF 3 billion. 1

As in the prior year, the key growth drivers were North America and the Rest of the World including Latin America. The largest region, Europe, which represents more than 40% of the global market, continued to con-tract, but only slightly and to a much lesser extent than in previous years. Asia/Pacific was flat, but this was a considerable improvement from the significant decline in 2013.

MARKET STRUCTUREThe market is divided into three segments: premium, value, and discount. Companies in the premium seg-ment are distinguished by their clinical documentation,

innovative products and solutions, broad product ranges, training, education and superior customer ser-vice. Straumann leads the global premium segment and offers a wide range of implants priced at multiple levels.

According to global market research 3, dentists choose implants based on quality, ease of use, familiarity, and long-term scientific evidence – areas in which Straumann consistently receives best-in-class ratings. Although price is not a key driver in the choice of implant brand, it has gained importance, driving shifts towards the value and discount segments.

Responding to this trend, Straumann entered the non-premium segment by investing in fast-growing brands like Neodent in 2012, Medentika and Creat-ech in 2013, MegaGen in 2014 and T-Plus in 2015. The Group’s strategy is to penetrate the non-pre-mium segments of the tooth replacement market via segregated brands, without compromising its premium leadership.

THE GLOBAL DENTAL IMPLANT MARKET BY REGION 1

THE GLOBAL DENTAL IMPLANT MARKET BY SHARE OF SALES 1


Manualproduction

CADCAMproduction

In-lab milling

Centralized milling

Chairside milling

75 80%

10 15% 5 10% ~5%

In value terms

PREMIUM

VALUE

DISCOUNT

1

Premium offering, based oninnovative, clinically-provenproducts and comprehensive services at premium price

Standard products, often onlyregional presence, value price

Look-alike products, very limitedR&D, training, education, and service

Management commentary Markets Management commentary Markets 39

Five leading multinational manufacturers make up the premium implant segment, which currently accounts for almost 60% of the global market. The non-pre-mium segment is highly fragmented and comprises several hundred competitors, the majority of which have only a local or regional focus. Some pursue a low price strategy while others offer their customers advanced customer services and education at mid- price points. Based on available market data and industry sources, we believe that the premium players lost approximately 1% of their collective market share to the non-premium segment in 2014.

Successful product launches and marketing initiatives helped Straumann to gain pace and outperform the premium segment in 2014 and to extend its lead in the overall implant market. Our share of the global market thus climbed to 20%. 1

THE MARKET FOR RESTORATIVE DENTISTRYConventional tooth restorations (e.g. crowns and bridges) have traditionally been manufactured by hand. Today, the process is increasingly automated, and digitalization now makes it possible to design and manufacture prosthetic elements by CADCAM (Com-puter-Aided Design; Computer-Aided Manufacturing), saving time and increasing accuracy. Further advances have been made through improved high-performance

translucent ceramics, which reduce working time and offer exceptional esthetics and function.

The market for CADCAM dentistry comprises pros-thetic elements (crowns, inlays, onlays, bridges) and equipment (scanners, milling units etc.). According to the latest data, these products collectively generated global revenues of more than CHF 3.5 billion in 2014. 4

CADCAM PROSTHETIC ELEMENTS CADCAM prosthetics are produced in one of the following:

– A dental practice (chairside milling unit) – A dental laboratory by a dental technician, – An industrial milling center operated by a CADCAM manufacturer.

In 2014, about 25% 4 of all prosthetic elements (tooth-borne and implant-borne) were produced using CADCAM technology. This is expected to increase as more dental professionals adopt this technology. Straumann CADCAM prosthetics are designed with our CARES Visual software (either by labs or through our CARES Scan & Shape service) and milled centrally.

Market research studies 5 confirmed that general den-tists (GPs) outsource CADCAM manufactured crowns and bridges, usually to a local lab. About two thirds of

DENTAL IMPLANT MARKET BY SEGMENT

Straumann competes in the premium and – with its SLA titanium range – the upper value segments. In the value segment, the Group competes through its Instradent platform.

THE CROWN AND BRIDGE MARKET(IN VALUE TERMS)


¢ Straumann‘s share¢ Tissue regeneration ¢ Membranes ¢ Bone graft materials

<5%

~5%

35-40% 55-60%

>60%

In value terms

200

100

0

¢ Europe¢ North America¢ Asia/Pacic¢ Rest of the World

Spai

nIta

ly

Braz

ilAu

stria

Switz

erla

ndSw

eden

Ger

man

yN

ethe

rland

sPo

rtug

al US

Fran

ceCa

nada

Aust

ralia

Japa

nU

KRu

ssia

Chin

aIn

dia

Kore

a


THE ORAL TISSUE REGENERATION MARKET(IN VALUE TERMS)

DENTAL IMPLANT PENETRATIONImplants sold per 10 000 population in 2014 1

them use models or impressions to order the restora-tions. In the next few years, general practitioners anticipate that most CADCAM restorations will con-tinue to be outsourced and that digitally scanned data will increasingly replace models.

CADCAM EQUIPMENT CADCAM equipment can be categorized as:

– Chairside systems, in which scanning, design and milling are all performed in the dental practice

– Full in-lab systems, where scanning, design and mill-ing are performed by the lab

– Central milling, where in-lab scanners are connected to an offsite milling center.

According to our estimates, more than two thirds of all CADCAM systems sold are for full in-lab systems or in-lab scanners connected to an offsite milling center. In-lab scanning with centralized milling is an attrac-tive solution because it offers laboratories access to the latest technology without investing in expensive, high-maintenance milling equipment.

Straumann is active in the in-lab scanner (and soft-ware) segment. We also offer a Scan & Shape service to labs that do not have the requisite scanning capa-bility. This also provides access to our milling centers (see p. 32).

Lack of reliable market data makes it difficult to quan-tify market shares in restorative dentistry. We esti-mate that in 2014 our share of the centrally-milled-element segment was less than 5%.

THE MARKET FOR REGENERATIVE PRODUCTSThe 2014 market for oral tissue regeneration products (regeneratives) was estimated to be worth more than CHF 400 million6. As regeneratives are frequently used to support implant procedures, the market exhibited similar growth to the implant and prosthetic market.

The regenerative market can be divided into the fol-lowing segments

– Bone graft materials – Membranes – Tissue regeneration products.

Straumann is active in all three. In the fourth quarter of 2014, we began distributing the botiss range of regeneratives and now offer an unparalleled range of regenerative solutions across all market segments (see p. 64 f.).

BONE GRAFT MATERIALSIt is currently estimated that up to one in four implants require bone augmentation/graft procedures 7. Four types of bone graft material are commonly used:



PROPORTION OF ADULTS IN THE US MISSING ONE TOOTH OR MORE(in % by age group; excluding wisdom teeth) 8

– Autografts (patient’s own bone) – Allografts (human donor bone, e.g. botiss maxgraft, Straumann Allograft)

– Xenografts (bone sourced from animals, e.g. botiss cerabone)

– Synthetic bone (e.g. Straumann BoneCeramic).

Synthetic bone accounts for more than a quarter of the bone graft substitute market. Allografts are more commonly used in North America, where they account for half of the market. Straumann entered that market in 2009.

MEMBRANESOral membranes are used in up to 60% of bone aug-mentation procedures9 and act as barriers to pre-vent the growth of soft tissue in the space required for bone formation. Straumann has competed in this segment since 2010.

SOFT TISSUE REGENERATIONBetween 10 and 15% of the general population in developed countries suffer from severe periodonti-tis 10, the most common cause of tooth loss. Strau-mann Emdogain is used to regenerate tissues that anchor the tooth when they have been damaged by periodontal disease. Straumann leads this seg-ment and our share is more than two-thirds of the global market.

OUTLOOKFUNDAMENTAL DRIVERSIn the absence of reimbursement, our markets – especially the premium segment – are subject to the economic environment. A sluggish economy means

the European markets are still contracting, though recent trends show the decline has slowed. Con-versely, positive economic signals in Northern and Latin American markets favor market growth.

The stagnant economic environment proved an opportunity for non-premium manufacturers, who increased their market share in recent years. Noth-ing indicates that the non-premium segment will stop growing, validating our strategy to penetrate the value segment.

Positive trends in the market lead us to believe we can also expect the premium segment to pick up. As a result, the overall market has the potential to achieve high-single digit growth in the mid-to-long term. This positive view is based on the prevalence of tooth loss, the substitution of conventional treat-ment, and general demographics.

DEMOGRAPHIC TRENDSAlthough caries prophylaxis has reduced tooth loss, in the developed world aging and affluence drive the implant business growth. Tooth loss is a function of age 8 and today more than 18% of the US population is over the age of 60. This will rise to 22% by 2020 11. Furthermore, the purchasing power of seniors in developed countries is growing12. There is also sig-nificant growth potential in markets like China, where incomes are increasing and implant rates are low.

PREVALENCE OF TOOTH LOSS

Prevalence of tooth loss is defined as the proportion of a population currently suffering from the condition,

Average18 – 24 years 25 – 34 years 35 – 44 years 45 – 54 years 55 – 64 years 65 – 74 years 75 + years

51%20% 33% 40%

59% 68% 74% 84%



TOOTH LOSS AND TREATMENT (USA)

which is an indicator of the potential for implant dentistry. A study conducted in 2012 in the US 8 illus-trates how significant that potential is. It revealed that:

– 50 – 60% of the adult population had lost at least one tooth in or prior to 2012

– Of those, 45% were fully treated – Of the untreated portion, 31% or approximately 20 million US adults were planning to receive treatment in the next 3 years

– More than a million people needed a replacement for an existing restoration (e.g. a tooth-borne bridge).

SUBSTITUTION OF CONVENTIONAL CROWNS AND BRIDGES

As the penetration of dental implants is still very low (see chart on p. 40), the substitution of conventional tooth replacement treatment (tooth-borne bridges) is the most important growth driver for implant den-tistry because:

– Only 15 – 20% of adults treated for tooth loss re-ceive implants 8

– Implants are increasingly regarded as the state-of-the-art treatment

– Competence in implant techniques is growing among dental professionals, especially general dentists

– Market studies foresee increased use of implants in the next 2 – 3 years based on positive responses from general dentists 5

– Training and education activities provided by compa-nies like Straumann successfully convert dentists to implants

– Rising awareness among patients is expected to drive demand for dental implants.

CADCAM DENTISTRY UNCHANGED

According to US market research, more than 80% of dental laboratories are small- to medium-sized 13. Most large labs own at least one scanner and one milling unit, and a significant proportion intend to invest in additional CADCAM equipment. Notwithstanding, the CADCAM elements business is the main driver of this market.

ADULT POPULATION

PEOPLE AFFECTED BY TOOTH LOSS(45 – 55%)

IMPLANT TREATMENT(15 – 20%)

CONVENTIONAL TREATMENT(80 – 85%)

ANNUAL TOOTH LOSS CASES SEEKING TREATMENT(5 – 10%)

PEOPLE ACTUALLY TREATED(45 – 55%)

The population in the US is aging, resulting in more patients with tooth loss. Patients who have been treated are likely to require maintenance work (probably more so with conventional treatment). Most people lose more than one tooth in life and thus re-enter the treatment path.



While small labs are eager to adopt automated work-flows, the high cost means few own CADCAM and milling equipment. We see significant potential in outsourced milling in combination with scan-and-design services (e.g. CARES Scan & Shape) for lab cus-tomers without scanning capabilities.

Advanced high performance materials, such as Zerion HT, will also contribute to growth in CADCAM dentistry.

REFERENCES/FOOTNOTES01 According to 2014 FX rates. Straumann estimates, based on MRG,

iData and industry sources; including: Australia, Austria, Belgium, Brazil, Canada, China, Czech Republic, Denmark, France, Germany, Hungary, India, Israel, Italy, Japan, Luxembourg, Mexico, Netherlands, Poland, Romania, Russia, South Korea, Spain, Sweden, Switzerland, Turkey, UK and US.

02 See Glossary.03 MRG Perception Pulse, 2012; in Canada, China, France, Germany,

Italy, Japan, Netherlands, South Korea, Spain, Sweden, Switzerland, UK and US.

04 According to 2014 FX rates. Straumann estimates, based on MRG, iData, Industry Sources and Straumann proprietary study in 2012 conducted by KeyStone Research; including: France, Germany, Italy, Japan, UK and US. CADCAM elements include crowns and bridges only.

05 Exevia, 2014, based on market research data in Germany, Italy, Spain and the US.

06 According to 2014 FX rates. Straumann estimates based on MRG andiData; including: Australia, France, Germany, Italy, Japan, South Korea, Spain, Sweden, Switzerland, UK and US.

07 Straumann estimates based on MRG and iData.08 Straumann proprietary study based on 5000 US respondents

conducted by AFG Research in 2012.09 iConsult, 2014, based on market research data in Germany and the

US.10 Erik Petersen and Hiroshi Ogawa; Strengthening the Prevention of

Periodontal Disease: The WHO Approach, J. Periodontol 2005;76:2187-2193.

11 US Census Bureau, National Population Projections, 2008.12 US Census Bureau, Population Division, 2012.13 The Key Group and Straumann estimates, based on US research

data, 2014.


“We know every little thing about our product.”FRANK KENKHEAD OF DESIGN ENGINEERING

“When I joined, we designed everything by hand.” ULRICH MUNDWILERDESIGN ENGINEER


45

New ideas become reality

FRANK KENKHEAD OF DESIGN ENGINEERING10.5 YEARS @ STRAUMANN

It’s the people, the atmosphere and the products that have kept Frank at Straumann for more than 10 years. He especially enjoys working with his team and seeing new products become a reality.

ULRICH MUNDWILERDESIGN ENGINEER35 YEARS @ STRAUMANN (OUR LONGEST SERVING EMPLOYEE)

“In the beginning we had a small, independent team who designed everything by hand.” Though Straumann has grown in size and technology, Uli still gets the same thrill when a product is produced, functions well and is accepted by the market.“I’m proud of the way Straumann has grown so big but still re-tained the quality.”


46

SLActive More than a gold standard

When Straumann’s SLA surface was introduced in 1997, it revo-lutionized implant dentistry, cutting healing times from 12 to 6 weeks while offering improved safety and predictability. The sandblasted, large-grit, acid-etched surface became a ‘gold stan-dard’ in the industry.

As implant dentistry became more common, increasingly difficult cases were treated and practitioners wanted even higher predict-ability and shorter times to restoration. Straumann responded in 2005 with SLActive. Being hydrophilic it attracts blood and encourages the early adhesion of bone-forming cells. Healing times are reduced to just 3 – 4 weeks resulting in earlier secondary stability and reduced risk of failure. 1,2,3,4

1 Buser D, et al. Enhanced bone apposition to a chemically modified SLA titanium sur face. J Dent Res 2004;83:529-533.

2 Oates TW, et al. Enhanced implant stability with a chemically modified SLA surface: a randomized pilot study. Int J Oral Maxillofac Implants 2007;22:755-760.

3 Schätzle M, et al. Stability change of chemically modified sandblasted/acid-etched titanium palatal implants. A randomized controlled clinical trial. Clin Oral Implants Res 2009;20:489-495.

4 Gottlow J et al. Preclinical data presented at the 23rd Annual meeting of the AO, Boston, and the 17th Annual Scientific Meeting of the EAO, Warsaw.

Healing period in weeks

0 1 2 3 4 5 6 7 8

Primarystability(old bone)

Total stability

SLActive® SLA®

Secondarystability(new bone)

Stab

ility

The optimized osseointegration process with SLActive leads to a higher implant stability in the early stage of healing.


All SLActive implants are packed under controlled atmospheric conditions in a ‘glove box’ to maintain their surface activity.

47

REMARKABLE HYDROPHILIC PROPERTIESDue to its chemical purity and surface energy, the SLActive implant has remarkable hydro philic (fluid attracting) proper-ties. As a consequence, it quickly attracts blood and proteins and thus integrates with bone con-siderably faster than our conventional surface technology.

ACTIVITY PRESERVEDSLActive implants are supplied in a sterile solution to maintain their surface activity.

10 000 soldin 36 days

INSTANT SUCCESS IN JAPANAfter several years of regulatory delay, we finally brought SLActive to Japan in 2014.

When we launched it on our Tissue Level Implants in March, it took just 36 working days to sell the first 10 000 units. The recep-tion for Bone Level SLActive, which followed in September, was just as enthusiastic, with the result that more than 40% of all implants sold in Japan in 2014 had the new surface.

WORTH THE WAITThe main reason for the long approval process was that regula-tors required a rigid clinical trial that was time-consuming but well worth the effort. Straumann is the only implant company in Japan with regulatory permission to state ‘early healing/loading’ protocols.

This added to the general excitement among new and existing customers at the launch event, which provided an excellent plat-form for clinicians in the study to present their results, endorsing SLActive’s claim of early healing.

Both SLA and SLActive have been extensively investigated and are among the most documented and clinically validated surfaces.


Management commentary 2014 Business performance – Group48

2014 Business performanceGroup

NET REVENUEIn 2014, the Straumann Group posted full-year net re-venue of CHF 710 million reflecting organic 1 growth of 6%. Due to the strengthening of the Swiss franc, reported growth in Swiss francs came to 5%.

The performance was driven by strong growth in China and Japan, complemented by above-market expansion in North America. Europe achieved an encouraging turnaround, reversing the negative sales trend seen in the past two years (see p. 52 ff.).

Growth was entirely organic and driven by volume expansion in the core implant business. Increased sales of Roxolid and SLActive were the principal con-tributors, supported by a differentiated pricing approach in Europe, the ‘reduced-invasiveness’ cam-paign with Roxolid, and the introduction of SLActive implants in Japan.

Revenue from the restorative business was sus-tained, as declines in tooth-borne prosthetic ele-ments and in-lab scanners were offset by growth in standard prosthetics, fuelled by the new Variobase abutment, customized CADCAM abutments and a new comprehensive range of low-profile abutments for screw-retained solutions.

The Regeneratives business achieved solid single-digit growth, led by Emdogain and Straumann Allograft. Initial revenues came from the botiss range, which Straumann began distributing in most European markets in the fourth quarter.

OPERATIONS AND FINANCESGROSS MARGIN SUSTAINED AT 79%Gross profit rose 4% to CHF 559 million, with the respective margin maintained at 79%. As revenue and manufacturing costs increased at a similar pace, profitability remained more or less at the prior year’s level. Strong volume expansion and improved use of manufacturing capacity compensated for:

– the negative currency impact (CHF 12 million or 30 base points of the gross margin)

– investments in manufacturing staff, and – a less favorable product mix, which was due to the increase in third-party products (e.g. Neodent, botiss, etc.).

OPERATING INCOME GROWS 28%; EBIT MARGIN JUMPS 390 BASE POINTS TO 21%Operating expenses ( OPEX ) were reduced thanks to tighter cost control and benefits from cost-reduc-tion measures in prior years. Excluding restructuring charges of CHF 8 million in 2013, operating expenses decreased by CHF 2 million, while the top line grew over 40 million or 6% in local currencies. As a conse-quence, the OPEX intensity decreased by nearly 3% points to 58% of sales, underlining Straumann’s attractive operational gearing.

REVENUE (in CHF million)

20142013201220112010

¢ ¢ Reported revenue ¢ Currency effect

5 year CAGR –1%(+3% in I.c.)

300

200

100

0

500

400

600

700

800


Management commentary 2014 Business performance – Group Management commentary 2014 Business performance – Group 49

Selling (salesforce and related activities) costs, which are included under ‘Distribution costs’, remained steady at CHF 168 million (24% of sales), while admin-istrative expenses (including Marketing, R & D and headquarters costs) decreased CHF 10 million to CHF 244 million (34% of sales). Straumann aims to continue investing around 5% of sales in R&D to maintain the flow of product innovations and to provide clinical documentation to support its products.

Improved fixed cost absorption and higher sales lifted earnings before interest, tax, depreciation, amortiza-tion (EBITDA) by CHF 28 million to CHF 176 million, with the corresponding margin expanding 300 base points to nearly 25%.

After amortization and depreciation charges of CHF 28 million, operating profit amounted to CHF 148 million, compared with last year’s CHF 116 million, or CHF 124 million excluding exceptionals. With the respective mar-gin reaching 21%, profitability jumped 390 base points (270 excluding exceptionals), more than compensating for the negative currency effect of 60 base points.

NET PROFIT BENEFITS FROM ONE-TIME TAX EFFECT RELATED TO NEODENTIn contrast to the negative CHF 2 million last year, the net financial result was a negative CHF 7 million in 2014, which was due to hedging losses and higher interest expenses reflecting the timing of the launch of Strau-mann’s CHF-200-million bond (April 2013).

Contributions from the associated partners Neodent, Dental Wings, Medentika and Createch, which are accounted for under the ‘equity method’, reached

CHF 36 million and benefitted from a capitalization of deferred tax assets amounting to CHF 27 million related to Neodent. As a result of this benefit and the generally improved profitability, the effective tax rate in 2014 amounted to just 11% as income taxes amounted to CHF 20 million.

Taking the abovementioned factors into account, reported net profit amounted to CHF 158 million, with the corresponding margin reaching 22%, compared with 15% in the same period last year. Basic earnings per share amounted to CHF 10.15. Stripping out the one-time benefit for Neodent, net profit would have reached CHF 131 million with a respective margin of 18%.

KEY PERFORMANCE FIGURES2014 2013

Reported Reported Excluding exceptionals1

Revenue (CHF m) 710.3 679.9

Gross profit margin (%) 78.7 78.8

EBITDA margin (%) 24.8 21.8 23.0

EBIT margin (%) 20.9 17.0 18.2

Net profit margin (%) 22.2 14.9

Free cash flow2 margin (%) 18.1 20.5

1 The term ‘exceptionals’ refers to 2013 restructuring charges of CHF 17 million and a pension curtailment gain of CHF 9 million, both related to costreduction initiatives.

2 Defined as net cash from operating activities less capital expenditures plus net proceeds from property, plant and equipment.

60

40

20

0

100

80

120

140

180

160

¢ ¢ Operating pro�t ¢ Excluding exceptionals ¢ ¢ Net pro�t

20142013201220112010

OPERATING AND NET PROFIT(in CHF million)


Management commentary 2014 Business performance – Group50

CASH GENERATION IMPACTED BY INCREASE IN WORKING CAPITALAlthough profitability improved significantly, the cash generated was negatively affected by a rise in working capital, which was due to an increase in of the trade days outstanding (+ 2 days to 51 days), a rise in inventories in preparation for the full launch of BLT in spring 2015, and the increase of third-party products (e.g. Neodent and Medentika). As a result, net cash from operating activities amounted to CHF 146 million compared with CHF 151 million in the prior-year period.

With capital expenditure (CAPEX) rising to CHF 19 million, free cash flow amounted to CHF 128 million and the respective margin was 18%.

Cash used for investing activities reached CHF 26 million, and was used mainly for the aforemen-tioned CAPEX expenditures, as well as financial investments of CHF 32 million in MegaGen, Bio-denta, and other financial assets collectively. In addi-tion to dividends of CHF 16 million from Neodent, there were also proceeds of CHF 21 million from the sale of financial assets. The annual dividend payment of CHF 58 million was the main cash element in cash used in financing. Cash and cash equivalents grew

CHF 76 million to CHF 459 million at year-end. With net cash standing at CHF 260 million and the equity ratio at 64%, the company is solidly financed.

OUTLOOK 2015 (barring unforeseen circumstances)Straumann expects the global implant market to show further improvements in 2015 and its revenue to grow organically in the mid-single-digit range. Reported revenues in Swiss francs will be influenced by the re-cent exchange-rate turbulence. The Group will seek to balance investments between growth markets and other strategic projects, while taking decisive steps to miti-gate the consequences of the appreciation of the Swiss franc. These measures include compensation re-ductions in Switzerland as well as strict hiring and travel restrictions, and will help Straumann to achieve its 2015 EBIT margin target of at least 20% (organic), assuming that exchange rates prevail around their February 2015 levels 2.

SUMMARY OF MAIN INVESTMENTS INVESTMENTS IN GROWTH SEGMENTS In pursuit of our strategic goal to become a global leader in the fast-growing value segment, we continued to invest in regional companies that are expanding inter-nationally. In 2014, we purchased convertible bonds in Megagen (see p. 27), and Biodenta (see p. 27) for a total of CHF 25 million. In 2015, we will acquire about 43% of T-Plus (see p. 27) for approximately USD 7 million. We may also exercise our option to increase our stake in Neodent to 75%.

INVESTMENTS IN HIGH GROWTH REGIONSChina is a key expansion market for Straumann. In 2014, we invested more than CHF 9 million to take over distri-bution activities from our existing distributor and to establish a ‘hybrid’ distribution model with a consulta-tive sales force and a local training and education orga-nization. Further investments are expected, including a variable consideration of up to approximately CHF 18 million for the former distributor, depending on the development of the business.

INVESTMENTS IN TECHNOLOGYWith the aim of gaining leads to attractive technology/business opportunities in Asia, we participated in a fund managed by DM Capital, which is focused exclusively on dental-related investments in China. This investment

CASH FLOW AND INVESTMENTS(in CHF million)

90

60

30

0

150

120

180

210

270

240

20142013201220112010

¢ ¢ Operating cash �ow ¢ Acquisitions & participations ¢ ¢ Capital expenditure


Management commentary 2014 Business performance – Group Management commentary 2014 Business performance – Group 51

was CHF 5 million. We also acquired a 12% stake in RODO Medical, Inc., a California-based developer of innovative prosthetic fixture devices, for CHF 2 million.

INVESTMENTS IN PRODUCTIONTo meet demands of increased volume and new prod-ucts, we invested in additional manufacturing equip-ment in Switzerland and the US. To meet the need for a CADCAM service in Japan, we are investing in a new milling center, which will go into operation in 2015. These and other investments in production amounted to more than CHF 9 million in 2014.

INVESTMENTS IN R&D To maintain our innovation pipeline and to support our products with documented evidence, we have invested in the region of 5% of revenue in R&D.

Information on investments in distribution, including selling activities as well as intangible and tangible assets, are presented in the Financial Report.

FOOTNOTES1 The term ‘organic’ used throughout this report means ‘excluding

the effects of currency fluctuations and acquired/divested business activities.

2 At the time the annual report went to press, the EUR was quoted at CHF 1.07 and USD at CHF 0.95.


Management commentary 2014 Business performance – Regions52

(in CHF million) Q1 Q2 Q3 Q4 Total 2014 Total 2013

Europe 102.5 95.0 80.8 98.1 376.3 368.4

Change in CHF % 4.0 -2.5 1.4 5.7 2.1 -2.6

Growth (organic) in % 4.1 -1.5 2.7 7.6 3.2 -3.2

As a % of Group revenue 53% 54%

North America 45.5 46.8 47.7 53.2 193.1 181.7

Change in CHF % 0.5 -1.2 10.7 15.6 6.3 4.6

Growth (organic) in % 5.2 5.4 11.4 9.3 7.8 8.1


Asia/Pacific 22.1 28.8 27.1 28.6 106.7 98.4

Change in CHF % -2.3 7.4 13.7 14.1 8.4 -5.3



Rest of the World 9.8 8.7 8.6 7.1 34.2 31.4

Change in CHF % 17.4 3.1 0.6 16.9 8.9 2.9



TOTAL 179.8 179.3 164.3 186.9 710.3 679.9

Change in CHF % 2.9 -0.4 5.8 10.0 4.5 -0.9


2014 Business performanceRegions

Our performance in 2014 was supported by growth across all regions. Europe, our largest region, achieved an encouraging turnaround, reversing the negative trend seen in the previous two years. Our other three

regions all posted record levels of revenue. We out-paced the market in North America again and achieved double-digit growth both in Asia/Pacific and the Rest of the World.

REGIONAL SALES PERFORMANCE BY QUARTER


Management commentary 2014 Business performance – Regions Management commentary 2014 Business performance – Regions 53

CHANGE IN REVENUE IN LOCAL CURRENCIES(in %)

REGIONAL SALES PERFORMANCE BY YEAR(in CHF million)

300

200

100

0

500

400

600

700

20142013201220112010

¢ Europe ¢ North America ¢ Asia/Paci�c ¢ Rest of the World

444.9

164.7

100.5

27.5737.6

404.4

155.6

100.7

32.9693.6

378.1

173.7

103.9

30.5686.3

368.4

181.7

98.4

31.4679.9

376.3

193.1

106.7

34.2710.3

¢ Straumann ¢ Other leading implant companies

-15

-10

-5

0

5

10

15

2010 2011 2013 20142012



CHALLENGING MARKET CONDITIONS PERSIST With the economy still weak in parts of Europe, there was little improvement in demand for elective dental procedures. Some patients postponed treatment, while others chose cheaper, inferior solutions, fueling competition among dental practices, chains and den-tal laboratories. As a result, dentists have become more price sensitive and dental laboratories have invested in equipment to in-source business.

Against this backdrop the dental implant market in Europe was more or less flat in 2014. In contrast, Strau-mann achieved 3% growth, which was respectable but considerably less than in other regions. With the Euro fairly stable, the currency effect was negligible and revenue rose 2% in Swiss francs to CHF 376 million (53% of the Group total).

The UK and Sweden achieved the strongest perfor-mances. France, Turkey and Spain also showed good results. This is remarkable in that Spain has faced severe economic pressure in recent years and Swe-den has gone through some structural reimburse-ment changes. Germany, our largest European sub-sidiary, posted modest revenue growth stimulated by a strategic campaign offering implants made from our new Roxolid material (see p. 10 f.) at the same price as their titanium equivalents. This initia-tive has stimulated volumes and has motivated most customers to upgrade to our high-strength implant material. At the same time we reduced the price of our basic titanium SLA implant to compete more effectively in the value segment.

We introduced a new prosthetic concept with cost effective solutions for our lab customers, including the Variobase abutment and the CARES X-stream work-flow. We also added sophisticated high-end full-arch restorations through our partnership with Createch.

Europe

In order to offer a complete regenerative range we entered a strategic partnership with botiss and began distributing their products in most European markets in the fourth quarter.

OUTLOOK The world’s largest dental fair – the biennial Interna-tional Dental Show in Cologne – is expected to give a positive impulse to the industry in 2015. Neverthe-less, we do not expect the implant market to deliver much more than a modest improvement in 2015, due to the fragile economic environment and lack of reimbursement.

Owing to the recent devaluation of the Euro, our reve-nues will be significantly reduced when converted into Swiss francs. We will continue to defend our leader-ship position in the premium segment, for example with the regional launch of our new BLT implant in Europe in the second and third quarters. We will also strengthen our foothold in the value segment through the launch of Neodent in Italy and the international expansion of Medentika.


ORGANIC GROWTH

+3%

REVENUE

CHF 376m

GROWTH IN CHF

+2%HIGHLIGHTS

CONTRIBUTION TO GROUP

53% of total revenue

– Growth stimulated by free Roxolid+Loxim upgrade

– botiss regeneratives range launched– New prosthetic concept, including

Variobase & CARES X-Stream workflow




AN ATTRACTIVE GROWTH REGIONDriven by strong US sales, our second largest region delivered another strong year and contributed more than a third of the Group’s overall growth. Despite a negative currency effect, which reduced growth in Swiss francs by nearly 2 percentage points, the region delivered record revenues of CHF 193 million, corre-sponding to 27% of the Group – five percentage points higher than five years ago. Based on available market data, we continued to outperform the market, endors-ing our US strategy of investment in marketing and sales for several years.

All business franchises contributed to the increase but the star performers were Roxolid and SLActive as we won new accounts and increased our share-of-wallet from existing customers.

Additional income came from the controlled release of our new Bone Level Tapered implant line (see p. 104 f.), which began in September and was very well received. Straumann’s first conical implant was key in securing an agreement with the ClearChoice network of clinics, making Straumann a preferred supplier. Our ProArch prosthetic solution (see p. 158 f.) that offers fully and partially edentulous patients a fixed overdenture solu-tion was also important for this agreement.

We complemented our regeneratives range with a xenograft bone augmentation material and a collagen membrane, which are both licensed and enable us to offer a one-stop shop solution for guided bone regen-eration (GBR) procedures.

Earlier in the year, we tapped into the value segment in the US by establishing an Instradent subsidiary, which launched the Neodent implant brand with its own direct sales team.

To address the growing role of general practitioners (GPs) in implant dentistry we entered collaboration

North America

with Patterson Dental, one of the two largest distribu-tors serving GPs in North America. The cooperation also includes Spear, a leading provider of education in the US. Through an interdisciplinary approach involv-ing specialists, GPs and laboratories the aim is to improve the referral model and expand the market –for instance by identifying cases that are not currently considered for implant therapy.

OUTLOOK In view of its relatively modest penetration, high esthetic standards, and optimistic economic forecasts, the short and long-term growth outlook for the US is healthy, making it the most attractive regional market for Straumann. In 2015, we expect to benefit from the full launch of our new-generation BLT implant, which enables us to compete in a segment that accounts for more than 60% of the region’s implant market. This, together with several other product launches and growth initiatives – as well as the positive underlying market trend – will fuel future sales.


MARKETpositive underlying trend

REVENUE CHF 193M

ORGANIC GROWTH+8%ORGANIC GROWTH

+8%

REVENUE

CHF 193m

GROWTH IN CHF

+6%HIGHLIGHTS


27% of total revenue;

1/3 of overall growth

– Membrane Plus and XenoGraft complement regenerative range

– BLT implant enters controlled release– Preferred supplier for ClearChoice; collaboration

with Patterson and Spear to address GPs




THE MARKET OF THE FUTUREOn the back of successive quarterly increases, we achieved full-year growth of 14% in local currencies in Asia/Pacific. Although the region accounts for just 15% of the Group’s revenue, it contributed more than 30% of the overall growth. The pronounced currency effect cut growth by 6% points, leaving revenue in Swiss francs up 8% at CHF 107 million.

The performance was driven by the dynamic Chinese market and boosted by a double-digit rise in the larg-est regional market, Japan. We came closer to our goal of market leadership there thanks to a strengthened management team, local market recovery, and the introduction of SLActive, which finally obtained regu-latory approval in 2014.

Our business in China developed very positively. Since 2003, we have operated through a distributor, whose role was important in establishing Straumann as a market leader. Having built up our own subsidiary, we were able to incorporate our distributor’s business in 2014 and to establish a hybrid model using multiple distributors and our own consultative salesforce, mar-keting, training and education teams. This brings us closer to customers, broadens our geographic reach and enables us to address the private practice sector more effectively, which is expected to outpace the public hospital sector in the years to come.

OUTLOOK One in every five dental implants is sold in the APAC region and, having some of the world’s fastest grow-ing local markets, the region is forecast to be the key driver for growth of the global implant market. Stimu-lated by increasing awareness, training in implantol-ogy and favorable demographics, the Japanese and Chinese dental implant markets are expecting robust growth in 2015. Our regional goal is to outperform, as we did in 2014. We will strengthen our prosthetic offering in the region and are working hard to get

Asia/Pacific

Roxolid and our new BLT implant approved and on the market in Asia.

We will continue to defend our share in Australia and our premium niche position in the crowded South Korean market.

National Healthcare Insurance coverage was recently introduced for implants in South Korea and lowered from 75 to 65 year olds in 2016. However, due to the low price cap, domestic value players are likely to ben-efit most and we expect to see a rise in the national penetration rate.


ORGANIC GROWTH

+14%

REVENUE

CHF 107m

GROWTH IN CHF

+8%HIGHLIGHTS


15% of total revenue;

30% of overall growth

– SLActive launched in Japan– Expansion in China with hybrid

sales/distribution model– Investments in value segment



average disposable income. With our dual-brand approach, we are very well positioned for future growth in the region despite the instability of its economies. In 2015, Straumann will consolidate Neo-dent in its financial statements.

Sales development in the Middle East is promising for 2015, but oil prices are likely to dampen further prog-ress. Our key challenges in that region in 2015 will be: striking the balance between sales opportunities, cash collection and cushioning the effect of exchange rate movements for our distributors, in addition to intro-ducing non-premium options.


DOUBLE-DIGIT GROWTH IN FRAGILE ECONOMIESApproximately 5% of Group revenue comes from the region we refer to as the ‘Rest of the World’, most of which is generated in Latin America and the Middle East. Full-year revenue in the region increased 14% in local currencies but only 9% in Swiss francs to reach CHF 34 million. The currency impact was due to the significant depreciation of the Brazilian real.

Demand for Straumann products was strong, particu-larly in Latin America. In Brazil alone an estimated 2.5 million dental implants are placed annually, making it the world’s largest volume market. Despite the fragil-ity of the economy, Brazil continued to be a source of good growth both for Straumann and for Neodent, the local market leader. Elsewhere in Latin America, Mex-ico offers promising growth and posted strong results in 2014.

As the year came to a close, we finalized a blueprint for expansion in Latin America in collaboration with Neo-dent. The strategy for 2015 includes the creation of new distribution hubs in Argentina, Columbia and Mexico. They will serve both the premium and value segments in surrounding countries with the two dis-tinctly separate brands.

The Rest of the World region also generates significant business through distribution partners in the Middle East. Here too, sales developed positively, though quarterly ordering patterns are often erratic. in addi-tion, socio/political upheaval and embargoes impaired consumer spending.

OUTLOOK Many local markets in Latin America are protected by tariffs and other trade barriers, which explains the market domination by local, value players. While the premium segment is attractive, it is small due to the lack of reimbursement and relatively low

Rest of the World


ORGANIC GROWTH

+14%

REVENUE

CHF 34m

GROWTH IN CHF

+9%HIGHLIGHTS


5% of total revenue

– Strong demand in Latin America– Brazil a good source of growth for

Straumann and Neodent– Positive but erratic sales development

in Middle East



62

“We have the professionalism and opportunities of a big company, but it’s still personal.” REGINA DERRER SUPPLY CHAIN COORDINATOR

“I appreciate the freedom to developnew ideas andthink outside the box.” VALENTIN LEGNERPRODUCT MANAGER

“I relish the constant push to be more effective.”SIMON JACOBIPRODUCT MANAGER


63

Passion comes from belief in our products

VALENTIN LEGNERPRODUCT MANAGER5 YEARS @ STRAUMANN

Valentin says there are many days when he drives home feeling good about what he has achieved – not least because he be-lieves in his product. “It’s a very powerful medical device and it really works!”

SIMON JACOBIPRODUCT MANAGER8 YEARS @ STRAUMANN

Simon’s job is never boring. He relishes the fast moving pace and constant push to be more effective. He always has clinicians in mind. “Straumann really cares about their problems and I enjoy selling products that give them peace of mind.”

REGINA DERRERSUPPLY CHAIN COORDINATOR1 YEAR @ STRAUMANN

Regina savors the international atmosphere at Straumann where she uses three languages daily and is now learning a fourth. “This is a friendly, fun, interesting place.”


64

RegenerativesSignificantly expanded

A SYNERGY OF STRENGTHSIt is estimated that up to one in two implant procedures requires guided bone regeneration, which is why we also offer regenera-tive products. But until now, our range has been limited. This explains why we have teamed up with botiss to offer customers around the world a truly complete portfolio of innovative and sci-entifically proven regenerative solutions – not just bone augmen-tation products and membranes but fleeces and biologics for soft tissue regeneration, which together with Emdogain gives us a combined range to suit every indication and preference.

To incorporate the botiss range, we established a temperature-controlled supply chain; included no fewer than 45 products in our ordering and logistics chain, and trained 300 staff on the new products.

Various bone graft materials in the botiss range to support implant procedures.


A WINNING COMBINATION

Straumann botiss

Bone allografts 1

Bone xenografts 1

Synthetic bone grafts 1

Bone blocks

Custom bone blocks

Collagen cones

Fleeces & sponges

Membranes 1

Soft-tissue grafts

Biologics 1

With botiss we are now able to offer dentists a wide combination of solutions from a convenient one-stop shop.

1 Sold under license

65

SAVING TEETHPeriodontal disease is the most common cause of tooth loss1 and continues to be an important health issue. Treatment involves controlling the inflamma-tion and bacteria that cause it and then restor-ing the tissues that sup-port the tooth. Straumann Emdogain promotes the regeneration of those tissues, helping to save endangered teeth.

BLOCKS AND RINGSHighly innovative botiss products: the maxgraft bone builder (left) is an allogenic bone-graft block, which is designed and milled by CADCAM technology to fit exactly into the bone defect.

The maxgraft bonering (right) is a pre-fabricated allogenic bone-graft ring, into which an implant is inserted. Interestingly, it allows horizontal and ver-tical augmentation and new bone formation.

MINIATURE BLANKETSMembranes are essential in bone and tissue regeneration proce-dures. When bone augmentation materials like cerabone, maxre-sorb, or Straumann’s BoneCeramic and Allograft are applied to a patients’s defective bone, they are converted into new bone by osteoblasts. Like miniature blankets, membranes are placed over the treatment site to prevent soft tissue filling the space that is needed for the new bone. Once the bone has formed, the mem-brane is simply resorbed.

Commonly used membranes are made of collagen. Botiss offers several membranes but these are not yet registered in all markets.

To meet customer needs in North America, where registrations are still pending, we licensed in another membrane, Straumann Membrane Plus, and a bovine-sourced bone augmentation mate-rial, Straumann Xenograft.

45 new productsComplete portfolio

1 National Health and Nutrition Examination Survey (NHANES) 1999–2004. The National Institute of Dental and Cranio-facial Research, Bethesda (USA).


Management commentary 2014 Business performance – Financials66

2014 Business performanceFinancials

67 Consolidated income statement

68 Consolidated statement of financial position

70 Consolidated cash flow statement

72 Five-year overview


Management commentary 2014 Business performance – Financials Management commentary 2014 Business performance – Financials 67

Consolidated income statement

(in CHF 1 000) Notes 2014 2013

Revenue 3 710 270 679 922

Cost of goods sold (151 618) (144 007)

Gross profit 558 652 535 915

Other income 21 2 236 2 747

Distribution costs (168 459) (168 507)

Administrative expenses (244 112) (254 372)

Operating profit 148 317 115 783

Finance income 24 17 016 22 175

Finance expense 24 (24 192) (23 909)

Share of result of associates 7 36 281 5 841

Profit before income tax 177 422 119 890

Income tax expense 18 (19 597) (18 689)

NET PROFIT 157 825 101 201

Attributable to:

Shareholders of the parent company 157 825 101 201

Basic earnings per share (in CHF) 25 10.15 6.55

Diluted earnings per share (in CHF) 25 10.03 6.50



Consolidated statement of financial position

ASSETS(in CHF 1 000) Notes 31 Dec 2014 31 Dec 2013

Property, plant and equipment 4 78 545 83 907

Investment properties 5 4 001 4 335

Intangible assets 6 68 987 72 278

Investments in associates 7 266 589 255 115

Financial assets 8 48 676 14 639

Other receivables 834 1 258

Deferred income tax assets 18 29 948 26 392

Total non-current assets 497 580 457 924

Inventories 9 69 193 62 328

Trade and other receivables 10 128 482 111 390

Financial assets 8 2 995 1 918

Income tax receivables 3 110 2 385

Cash and cash equivalents 11 459 421 383 795

Total current assets 663 201 561 816

TOTAL ASSETS 1 160 781 1 019 740



EQUITY AND LIABILITIES(in CHF 1 000) Notes 31 Dec 2014 31 Dec 2013

Share capital 12 1 568 1 568

Retained earnings and reserves 735 268 629 812

Total equity attributable to the shareholders of the parent company 736 836 631 380

Straight bond 13 199 410 199 301

Other liabilities 15 6 954 6 094

Financial liabilities 14 3 587 3 667

Provisions 16 29 913 32 221

Retirement benefit obligations 20 37 492 18 482

Deferred income tax liabilities 18 9 353 9 788

Total non-current liabilities 286 709 269 553

Trade and other payables 17 105 264 103 613

Financial liabilities 14 1 326 24

Income tax payable 18 697 9 100

Provisions 16 11 949 6 070

Total current liabilities 137 236 118 807

Total liabilities 423 945 388 360

TOTAL EQUITY AND LIABILITIES 1 160 781 1 019 740



Consolidated cash flow statement

(in CHF 1 000) Notes 2014 2013

Net profit 157 825 101 201

Adjustments for:

Taxes charged 18 19 597 18 689

Interest and other financial result 3 425 3 695

Foreign exchange result 1 275 6 144

Fair value adjustments (397) 1 940

Share of result of associates 7 (36 281) (5 841)

Depreciation and amortization of:

Property, plant and equipment 4; 22 22 801 24 392

Investment properties 5; 22 346 558

Intangible assets 6; 22 4 738 6 807

Impairment of investment properties 5; 22 0 1 787

Impairment reversal of property, plant and equipment 4; 22 0 (883)

Change in provisions, retirement benefit obligations and other liabilities 8 264 9 912

Share-based payments expense 19; 23 4 865 3 336

Gain/(loss) on disposal of property, plant and equipment 218 (90)

Working capital adjustments:

Change in inventories (5 942) (518)

Change in trade and other receivables (15 463) (4 835)

Change in trade and other payables 4 242 4 292

Interest paid (4 339) (1 519)

Interest received 1 008 325

Income tax paid (20 022) (17 902)

Net cash from operating activities 146 160 151 490



(in CHF 1 000) Notes 2014 2013

Purchase of financial assets (31 652) (16 154)

Proceeds from sale of financial assets 20 834 0

Purchase of property, plant and equipment (16 876) (10 907)

Purchase of intangible assets (1 964) (1 743)

Purchase of investments in associates 0 (37 985)

Contingent consideration paid (3 961) 0

Disbursement of loans (9 828) (1 200)

Dividends received from associates 16 444 5 009

Net proceeds from sale of non-current assets 1 075 393

Net cash used in investing activities (25 928) (62 587)

Issue of a straight bond 13 0 199 230

Dividends paid 26 (58 264) (57 848)

Proceeds from finance lease 158 292

Repayment of finance lease 0 (42)

Proceeds from exercise of options 11 533 0

Purchase of treasury shares 0 (1 886)

Sale of treasury shares 1 582 15 907

Net cash received from/(used in) financing activities (44 991) 155 653

Exchange rate differences on cash held 385 (1 265)

Net change in cash and cash equivalents 75 626 243 291

Cash and cash equivalents at 1 January 11 383 795 140 504

CASH AND CASH EQUIVALENTS AT 31 DECEMBER 11 459 421 383 795


OPERATING PERFORMANCE

(in CHF million) 2010 2011 2012 Restated

2013 2014

Net revenue 737.6 693.6 686.3 679.9 710.3

Growth in % 0.2 (6.0) (1.1) (0.9) 4.5

Gross profit 587.0 528.5 531.5 535.9 558.7

Margin in % 79.6 76.2 77.5 78.8 78.7

Operating result before depreciation and amortization (EBITDA)

211.9 157.4 119.5 148.4 176.2

Margin in % 28.7 22.7 17.4 21.8 24.8

Growth in % (2.9) (25.7) (24.1) 24.3 18.7

Operating result before amortization (EBITA) 185.0 131.9 91.5 122.6 153.1

Margin in % 25.1 19.0 13.3 18.0 21.5

Growth in % (1.6) (28.7) (30.6) 33.9 24.9

Operating profit (EBIT) 164.3 79.9 63.1 115.8 148.3

Margin in % 22.3 11.5 9.2 17.0 20.9

Growth in % (0.6) (51.4) (21.1) 83.6 28.1

Net profit 131.1 71.0 37.5 101.2 157.8

Margin in % 17.8 10.2 5.5 14.9 22.2

Growth in % (10.4) (45.9) (47.1) 169.8 56.0

Basic earnings per share (in CHF) 8.37 4.54 2.43 6.55 10.15

Value added/economic profit 88.4 29.7 (7.7) 52.7 113.7

Change in value added (7.6) (58.7) (37.4) 60.4 59.3

Change in value added in % (8.0) (66.4) (125.9) 785.3 109.2

as a % of net revenue 12.0 4.3 (1.1) 7.8 16.0

Number of employees (year-end) 2 361 2 452 2 517 2 217 2 387

Number of employees (average) 2 287 2 415 2 530 2 308 2 355

Sales per employee (average) in CHF 1 000 323 287 271 295 308


Five-year overview


FINANCIAL PERFORMANCE

(in CHF million) 2010 2011 2012 Restated

2013 2014

Cash and cash equivalents 349.6 377.1 140.5 383.8 459.4

Net working capital (net of cash) 74.5 68.8 63.0 57.3 64.9

as a % of revenue 10.1 9.9 9.2 8.4 9.1

Inventories 73.1 67.0 63.6 62.3 69.2

Days of supplies 158 123 152 161 149

Trade receivables 92.3 94.1 91.8 93.2 106.8

Days of sales outstanding 45 48 49 49 51

Balance sheet total 853.9 811.3 776.9 1 019.7 1 160.8

Return on assets in % (ROA) 15.8 8.5 4.7 11.4 14.5

Equity 695.6 671.1 601.7 631.4 736.8

Equity ratio in % 81.5 82.7 77.4 61.9 63.5

Return on equity in % (ROE) 19.7 10.4 5.9 16.4 23.1

Capital employed 337.7 273.1 187.7 162.3 142.9

Return on capital employed in % (ROCE) 46.9 26.2 27.4 66.2 97.2

Cash generated from operating activities 175.8 140.2 114.6 151.5 146.2

as a % of revenue 23.8 20.2 16.7 22.3 20.6

Investments (22.9) (25.9) (286.1) (50.6) (22.8)

as a % of revenue 3.1 3.7 41.7 7.4 3.2

thereof capital expenditures (22.1) (19.4) (19.4) (12.6) (18.8)

thereof contingent consideration paid (0.7) (0.4) (0.7) (4.0)

thereof investments in associates (6.1) (266.0) (38.0) 0

Free cash flow 154.2 121.1 95.2 139.2 128.4

as a % of revenue 20.9 17.5 13.9 20.5 18.1

Dividend (2014: subject to shareholders’ approval) 58.8 58.0 57.9 58.2 58.6

Pay-out ratio in % (excluding exceptionals) 44.8 59.4 75.7 53.3 37.1



74

“It’s exciting to start with an idea, develop it, and see it in the mouth of a patient.” CECILE MARICHAL DEVELOPMENT ENGINEER

“Working here has given me new perspectives and made me flexible in my thinking.”KATJA BUSSE CUSTOMER SOLUTIONS MANAGER

“A good manager serves his team and his customers.”JOACHIM AMANNREGIONAL SALES MANAGER


75

Hardworking, competent, international

CECILE MARICHALDEVELOPMENT ENGINEER1 YEAR @ STRAUMANN

Every day at Straumann is different for Cecile and she loves the challenge, “I like dealing with highly technical products and preci-sion manufacturing alongside nice, hard-working, competent, helpful people in a very international atmosphere.”

JOACHIM AMANNREGIONAL SALES MANAGER6 YEARS @ STRAUMANN

Joachim’s favorite role is managing people, and he does it with a unique philosophy: “A good manager is a servant to his team.” He also serves his customers with the same commitment, “I really like to be close to my customers. Websites and bro-chures can’t substitute for the personal contact.”

KATJA BUSSECUSTOMER SOLUTIONS MANAGER4 YEARS @ STRAUMANN

Katja’s 10 years’ experience in the dental industry has been put to good use at Straumann directing project commercialization from concept to presentation. She appreciates the international environment and the regional diversity. One of her roles is to bring dental experts together for brainstorming sessions and discuss their input with product management and the develop-ment team.

“Working here has given me new perspectives and made me flexible in my thinking.”KATJA BUSSE CUSTOMER SOLUTIONS MANAGER


76

For patients with full dentures, implant-borne solutions are usu-ally associated with higher initial costs than traditional non-fixed dentures. In July 2013 however, the International Journal of Oral & Maxillofacial Implants published a lead article reviewing 14 stud-ies that were published between 2000 and 2010 1. The authors concluded that – compared with traditional treatments – dental implants were generally cost-saving or cost-effective for single-tooth replacement. They represented a cost-effective option for the replacement of multiple teeth over the long term and led to better improvements in oral-health-related quality of life.

Additionally, patient acceptance, satisfaction, and willingness to pay for dental implants were high, particularly in elderly edentu-lous patients. A trend toward improved overall oral-health-related quality of life and decreased healthcare costs was also reported.

1 Vogel R, Smith-Palmer J, Valentine W. Evaluating the Health Economic Implications and Cost-Effectiveness of Dental Implants: A Literature Review. Int J Oral Maxillofac Implants 2013;28:343–356. doi: 10.11607/jomi.2921.

Implant treatmentsaves costs and improves quality of life

Hydropulser testing at Straumann in Basel


77

17/30° ANGULATION FOR INCREASED FLEXIBILITYIncluded in the screw-retained abutment range are new angulated designs to connect with, and to provide increased mechanical stability to, steep-angled implants.

Launched early in 2014, the abutments are avail-able with 17- and 30-degree angulations for challenging situations where the posterior implant has to be tilted. They can be used both in single- and multiple-tooth restorations, including full-arch edentulous indi-cations. For the latter, we now also offer custom-milled frameworks that can be embedded in fixed full-arch prostheses.

SCREW-RETAINED IMPLANT ABUTMENTSStraumann makes a broad range of standard implant abutments which connect the implant to the prosthetic tooth or denture. In 2014, we launched a new portfolio of screw-retained abutments to address the challenging needs of edentulous patients who want reliable, esthetic, full-arch dentures that are fixed rather than removable.

Designed to achieve excellent esthetic and functional results, our new screw-retained full-arch restorations cater for individual clinical situations, including cases where tilted implants are inev-itable. The portfolio also allows for immediate positioning of a temporary dental prosthesis.

During the development program, the abutments were subjected to more than 5000 hours of rigorous hydropulser tests, represent-ing no fewer than 280 million human biting cycles.

280 million bitessimulated in tests

One of our new angled abutments connecting a tilted BLT implant to a model prosthetic construcition.


Management commentary Risk and sustainability report78

Risk and sustainability report

79 Risk management

84 Customers

87 Straumann and the ITI

88 Employees

92 Communities

95 Global production & logistics

97 Environment


Management commentary Risk and sustainability report Management commentary Risk and sustainability report 79

We are committed to implementing appropriate con-trols, processes and strategies to identify, assess and manage risks associated with our activities in order to prevent or minimize the impact of unexpected events on our business or on our ability to create value. The management of opportunities and risks at Straumann is an integral part of the Group-wide corporate gover-nance system. Through our integrated reporting, we aim to highlight the interaction between financial, ecological and social factors and underscore their impact on the long-term success of our company.

The objective is to apply a globally standardized pro-cess for identifying at an early stage and foresightedly managing possible risks to the achievement of the company’s objectives. Risks are identified as possible developments within or outside the company that could jeopardize its sustained growth. Risk-relevant information is compiled once a year and ad hoc if nec-essary. The documentation contains a description of the risk, an assessment of the extent of possible dam-age, the probability of occurrence, and a list of mea-sures to monitor and counteract the risk.

This approach generally takes into account all relevant types of risks, such as operational, strategic, and com-pliance-related or market risks, as well as internal and external factors. At Straumann the Chief Financial Officer is also the Chief Risk Officer (CRO) and is thus responsible for risk management. We believe that risk assessment and management must be embedded in a comprehensive internal control framework, and we address it through a holistic, disciplined and deliberate approach. For more information see Group notes 29 (p. F56 ff.) and 32 (p. F64 f.), and Holding note 6 (p. F78).

RESPONSIBILITIESRisk monitoring and control are management objec-tives. The assessment process analyzes the implica-tions and potential impact of external and internal factors on the achievement of the Group’s objectives, and provides a basis for managing them. Risks are cat-egorized as ‘strategic’, ‘operational’, ‘financial and reporting’ or ‘legal and compliance’.

This matches the approach of the COSO (Committee of Sponsoring Organizations of the Treadway Commis-sion), whose integrated internal control framework is one of the most widely used. For identified risks that arise from accounting and financial reporting, relevant control measures are defined throughout Straumann’s Internal Control System (ICS) framework. Various tools and aids are used to assess and manage risks. For instance, foreign exchange risks are managed with an SAP treasury tool, while external consultants are used on a regular basis to assess insurance coverage risks.

RISK REPORTING A comprehensive corporate assessment report is pro-duced annually and serves as a working document for the coming year. It includes key risks that are critical for Straumann’s business. A specific scenario is devel-oped for each risk topic, including existing and new measures/controls. The risks are ranked and priori-tized. Action plans are defined, and the implementa-tion of measures to reduce risk is monitored. The sig-nificance of a risk scenario is estimated in terms of EBIT cumulated over three years. Certain risks are assessed according to qualitative criteria, e.g. risks to the Group’s reputation. The reporting of key risks is based on fixed value limits. The report is prepared by Internal Audit and the CRO, and is discussed with the Executive Management Board. The Audit Committee assesses and discusses risks on the basis of the report

Risk ManagementA holistic, disciplined and deliberate approach



in consultation with the CRO and/or relevant members of Senior Management regularly. Key findings are pre-sented to the Board. Pressing risks that emerge very rap-idly are discussed by the Board at short notice.

RISK ASSESSMENTSTRATEGIC RISKMARKET ENVIRONMENT

Straumann is active in specialty segments of the den-tal industry. Based on the aging population, the increasing number of professionals trained, and increasing awareness, there are no discernible reasons why these segments should not continue to offer attractive growth prospects in the long term (see p. 38 ff.). However, the current economic uncertainties and the increasing trend to consolidate in the dental mar-ket might continue for some time and dampen the prospects of market growth. Straumann has defined its strategic priorities for 2015 as: driving a high per-formance culture and organization, targeting unex-ploited growth markets, and become a total solution provider for tooth replacement (see p. 26 ff.).

One challenge facing Straumann is the need to expand our market reach and grow our organization in order to realize significant market potential. Our future rev-enues depend on our ability to defend and increase our business with existing customers, to enlarge our customer base, to develop innovative solutions that meet customers’ needs and to bring them to market in a timely manner. New market entrants and price pres-sure from discounters pose a threat to established companies like ours. We conduct analyses of competi-tors based on our own and external market intelli-gence to counteract such risks. Furthermore, we are expanding our footprint into other segments through alliances, partnerships and acquisitions.

OPERATIONAL RISK LEGAL AND INTELLECTUAL PROPERTY RISKS

We operate in a competitive market, in which intellec-tual property rights are of significant importance. We therefore actively pursue a strategy of protecting our intellectual property, patents and trademarks. At the time of writing, Straumann was not directly involved in litigation that is considered to be material.

MANUFACTURING AND SUPPLIER RISK

Straumann has spread its manufacturing risk by estab-

lishing production centers for key products on both sides of the Atlantic (see p. 95 f.).

With regard to suppliers, we pursue a ‘second source’ strategy, which offers a high degree of independence from single suppliers. We also keep more than one year’s stock of titanium, the key material for our implant system.

PRODUCT RISK AND TREATMENT OUTCOME

We seek to minimize product risks by going well beyond the minimum statutory requirements and conducting thorough, large-scale trials, under real-life conditions, followed by controlled, selective introduc-tions and long-term product surveillance, wherever appropriate. We also offer a comprehensive range of education courses at all levels in all countries where our products are sold.

FINANCIAL RISK (see also p. F56 ff.)EXCHANGE RATE RISK

As the majority of our business is international and because we prepare our financial statements in Swiss francs, fluctuations in exchange rates affect both the Group’s operating results and the reported values of its assets, liabilities, revenue and expenses.

Straumann’s Corporate Treasury is responsible for managing the risks created by currency fluctuations within the Group, following the scope of the policy approved by the Executive Management Board and the Audit Committee of the Board of Directors.

The Group is exposed to transactional and translation risks. Hedging decisions are taken by Corporate Trea-sury with subsidiaries being co-responsible for identi-fying currency exposures and informing headquarters.

The key objective is to limit the foreign currency trans-actional exposure of the Group. Transactional risk arises when the currency structure of Straumann’s costs and liabilities deviates to some extent from the currency structure of the sales proceeds and assets, as well as from imbalances in the payment streams between the various currencies. Straumann hedges these risks on a selective basis by means of options, spot transactions and forward transactions. The limi-tation and management of the translation exposure is a secondary priority.



The major foreign currencies in Straumann’s business are the euro, the US dollar, the Swedish krona, the Chi-nese renminbi and the Japanese yen. Straumann invoices its subsidiaries in local currencies and its dis-tributors mainly in Swiss francs. Exchange rate fluctu-ations have an impact on the company’s assets and earnings, which are reported in Swiss francs. At the end of 2014, the Group’s gross transactional booked exposure to its most important currency, the euro, was approximately 22%, while the euro accounted for 39% of Group sales. The US dollar, the Canadian dollar, the Australian dollar, and the British pound collec-tively made up approximately 43%. Gross transac-tional booked exposure in Asian currencies, including the yen, the Chinese renminbi, and the Korean won, amounted to around 16%. The charts above illustrate our sales and cost base in the different currencies.

In general, the target is to concentrate the currency risk mainly in Switzerland at the Swiss Group compa-nies. Subsidiaries abroad are usually invoiced by the Swiss companies in the local currency of the subsidiar-ies. Each subsidiary invoices its local third-party cus-tomers in the local currency.

Credit risks arise from the possibility that customers may not be able to settle obligations as agreed. There are no significant concentrations of credit risk within the Group. Counterparty risk encompasses

issuer risk on marketable securities, settlement risk on derivative and money-market contracts, and credit risk on cash and time deposits. Exposure to these is closely monitored and kept within predeter-mined parameters.

Further information on financial risk management is provided in note 29 on financial risk management objectives and policies (see p. F56 ff.), in note 30 on financial instruments, and in the section on derivative financial instruments and hedging onp. F60 ff. of the Group’s consolidated financial statements.

INSURANCE POLICIES

Straumann covers its inherent key business risks in the same way that it covers product or employer liability risks and property loss, i.e. through corresponding insurance policies held with reputable companies.

PENSION LIABILITY RISKS

The Group offers its staff competitive pensions. The pension funds are managed locally and invested by independent financial institutions. The investment strategy is determined by the Pension Fund Board and is executed by the financial institution. Neither Strau-mann nor the trustees are allowed to influence the specific investment decisions. The pension funds pub-lish regular reports for all members. The Swiss pension fund represents the largest pension plan of the Group.

SALES AND COST BASE (CURRENCIES)

11%

39%

21%

29%

¢ CHF¢ EUR¢ USD / CAD / AUD¢ Other

¢ CHF¢ EUR¢ USD / CAD / AUD¢ Other

13%

45%

22%

20%

These distribution charts represent the total net revenues (left) and the total cost of goods sold, distribution and administrative expenses (right) in the various currencies. All numbers are rounded approximations.



FINANCIAL REPORTING RISK

Straumann’s Internal Audit acts as an ‘independent’ and ‘objective’ assurance and consulting body, which reports directly to the CFO and the Audit Committee. Internal Audit does not confine itself to financial audits, but also monitors compliance with external and internal policies and guidelines. Acting in a con-sulting role, one of its main tasks is to assess internal processes and controls, propose improvements, and assist in their implementation. The objective is to safe-guard the Group’s tangible and intangible assets and to evaluate the effectiveness of its risk management and governance processes.

COMPLIANCE RISKLEGAL COMPLIANCE

It is essential for Straumann to ensure that the com-pany in general and the individual employees conduct business in a legal, ethical and responsible manner. To this end, we implemented a Code of Conduct in 2006. All employees are invited to report any breach of this internal policy to the Compliance Officer by e-mail or telephone. Infringements of the Code are tracked and appropriate measures taken against non-compliance.

We monitor laws and revisions and adapt our internal processes to cover new legal requirements, such as the ‘Sunshine’ legislation in the United States and France.

Like other leading manufacturers, Straumann is ex-posed to the risk of damaged public perception of dental implants by third parties, which might be the result of poor implant placement, competitor’s infe-rior implant quality, or unethical business practices.

Many Straumann country organizations are mem-bers of associations of manufacturers of medical/dental products, such as FASMED in Switzerland, Comident in France or Fenin in Spain. These associa-tions are dedicated to the advancement of medical technology and its safe and effective use.

REGULATORY COMPLIANCE

Companies in the medical device industry face growing scrutiny from regulators around the world and increasing requirements for documentation – both for new and established products. Because Straumann already has substantial clinical data and research capabilities, and has initiated a compliance program in its clinical department aimed at continu-ous improvement, this is not perceived as a risk.

In Europe, the Medical Device Directive is under review and the anticipated outcomes include greater surveillance, involvement of competent authorities for higher-class products, longer ap-proval times, access to technical documentation,

CURRENCY CHART (DOLLAR, EURO, YEN, REAL)

2010 2011 2012 2013 2014

¢ USD / CHF ¢ EUR / CHF ¢ JPY / CHF ¢ BRL / CHF

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

CHF



tests on products, and unannounced audits. We expect this will lead to a reduction in the number of Notified Bodies and an increase in their control. We have taken the initiative to conduct unannounced internal audits to ensure the readiness of all our cer-tified sites.

In 2014, we took part in the FDA experiential learn-ing program on digital workflows and presented our Variobase abutment to the FDA dental branch, together with its integration and controls in our CADCAM solution. This proactive workshop is designed to help FDA reviewers to understand the product solution and workflow for the next 510(k).

In Asia/Pacific and the Rest of the World, regulatory authorities continue to inspect manufacturers in for-eign countries. Straumann is prepared for this and has built up experienced teams of regulatory and compliance specialists in Basel, the US, China and Japan. Recent registration successes in China and Japan demonstrate our ability to meet requirements as well as the safety and efficiency of our products.

Stricter requirements and regulations are also expected elsewhere in smaller markets, which will increase the need for enhanced compliance and safe and efficient products.

QUALITY COMPLIANCE

To avoid the risks associated with regulatory compli-ance for Medical Devices, we have a qualified team of specialists in regulatory and quality issues.

Focused quality objectives, supported by key quality performance indicators and comprehensive internal as well as supplier-related quality audit programs, as-sured our status of substantial compliance and helped to identify opportunities for improvement. To stream-line processes throughout the organization, we run a continuing education program.

Stringent policies drive every step of product design, manufacturing and sales/marketing across our busi-nesses. Our audit program ensures compliance with policies and procedures deployed at each manufactur-ing site. Many of our facilities are certified to meet International Organization for Standardization (ISO) re-quirements for quality management (see table above).

In 2014, we passed all Notified Body audits, which are required to maintain the certification status of the Quality and Environmental Management Systems at our manufacturing and design/development sites.

Two of our manufacturing sites were inspected by the US FDA in 2014: our regeneratives manufacturing site in Malmö and our implant manufacturing facility in Andover. No observation was identified at either inspection. In addition, the Canadian Health Authority inspected our sales subsidiary in December with no major observation identified.

Overall, there were no critical issues with any authori-ties related to the status of the Quality and Environ-mental Management Systems at any of our manufac-turing sites.

Standard Certification of Institut Straumann AG (Basel, Gräfelfing)

Straumann Villeret SA (Villeret)

Biora AB (Malmö)

Straumann Manufacturing Inc(Andover)

Etkon GmbH (Markkleeberg)

ISO 9001 Quality management system

Yes No No No No

ISO 13485 Medical device quality management system

Yes Yes Yes Yes Yes

ISO 14001 Environmental management system

No Yes Yes Yes No

ISO CERTIFICATION AND AUDITS PERFORMED IN 2014



CustomersChallenging, serving and learning from an evolving customer base

15%

67%

18%

¢ General practitioners¢ Dental technicians/ laboratories ¢ Specialists

16%¢ Europe¢ North America¢ Asia/Pacic & Rest of the World

49%

35%

STRAUMANN’S CUSTOMERS BY SEGMENT STRAUMANN’S CUSTOMERS BY REGION

TWO DISTINCT TRENDS Over the past years we have seen two shifts in our global customer base, which includes general dentists, specialists (e.g. oral surgeons, periodontists, prosth-odontists) and dental technicians/laboratories, in more than 70 countries. The shifts are due partly to changes in the market – for instance the increasing involvement of general practitioners (GPs) in implant dentistry, and the consolidation of dental labs – and partly to strategic initiatives we have driven – for example to attract more dentists to implantology and to offer centralized prosthetic milling services. The geographical shifts reflect our strategy to expand in the US and in emerging markets like China and Latin America.

SERVING CUSTOMERS DIRECTLYWe serve approximately 100 000 customers with the Straumann brand directly through more than 1 100

sales and marketing professionals, most of whom are highly-trained sales representatives or service staff. In 2014, we continued the roll-out of an internal sales training program globally to enhance the effective-ness of our sales representatives in identifying and managing customer needs and thus helping custom-ers to improve their businesses. The personal direct sales approach adds value for customers and, together with our hotline service, is an intrinsic part of our pre-mium business model.

ONLINE FOR CONVENIENCE AND EFFICIENCYWe also offer the convenience of online services, and have extended our new e-shop to a number of mar-kets in 2014. A key advantage is to increase efficiency, freeing up staff capacity to win new business. Another ‘self-service’ online project is underway to offer elec-tronic invoicing – which will save costs and add trans-parency. Like our Scan & Shape customer portal and



other online facilities, this will add flexibility and con-venience for customers.

A RESPONSIBLE APPROACH TO GROWTHCurrent market research 1 indicates that, in the near future, more implants will be placed collectively by GPs than by specialists. At the same time, a recent study in the US reported a failure rate of almost 19% for implants placed in general practices 2. As a re-sponsible manufacturer, we cannot ignore these developments and have begun a collaboration in North America with Patterson, one of the region’s largest dental distributors, and Spear Education to improve implant treatment outcomes in general practice.

For GPs choosing to place implants, comprehensive education will be provided by Spear through an interdisciplinary curriculum developed and taught by specialists. GPs may only participate with the supportive presence of a surgical specialist during and after the curriculum.

To reach GPs beyond our surgical referral network, Patterson will distribute Straumann Smart One, our all-in-one package specifically designed to simplify component-choice and to help GPs perform straight-forward indications. In North America, Straumann Smart One will be available exclusively through Pat-terson together with the Spear curriculum. At the same time, our academic partner, the ITI (see p. 87) will continue to provide evidence-based implant education through a variety of channels, including the recently launched ITI Online Academy.

A FRESH APPEAL FOR YOUNG DENTISTSThe sustainability of our business in the mid to long term depends on our ability to attract young profes-sionals to implant dentistry. Perception-pulse stud-ies have revealed that their most common expecta-tion from companies like Straumann is for help in building up their business and establishing a reputa-tion as a specialist. We continued to take a struc-tured approach to this group through dedicated pro-grams in 2014, including our Young Professional Program (YPP) in ten countries.

The YPP has now been running in Germany for more than two years and has reached more than 3 000

participants. It supports budding professionals on their career path – from studies, through residencies and work as clinic staff, to setting up their own prac-tices. In 2014, we launched a dedicated YPP online portal and implemented a fresh new branding cam-paign (see picture above).

INFORMING PATIENTSIn addition to education, patient awareness is an important driver of implant dentistry. Although patients are not our direct customers, we are strongly committed to their health, satisfaction and wellbeing. Research suggests that one in every two patients consults the internet before, during and after consulting a dentist. Treatment and dentist choices are often based on the information found.

Patients need general information about implant dentistry and specific information about their treat-ment options. We address the former through vari-ous channels, mainly online, while the latter is addressed by dental professionals, who draw on tools we provide. In 2104, we developed ‘Straumann Patient Pro’, a comprehensive package to support patient marketing activities by dentists. It includes images, video animations and attractive content for dentists’ websites and social media channels. It also features a new ‘doctor finder’ tool.

SAFEGUARDING COMPLIANCE IN THE INTER-EST OF PATIENTSOur Global Sales Compliance Program has been in place since 2009 and is one of several safeguards to ensure compliance with regulations relating to the sale of our products and services. In 2014, there

Image from our fresh branding campaign designed to appeal to a new, young generation of dentists.



were no reported incidents of non-compliance with any applicable laws or regulations regarding the marketing or sales of our products. Further support-ing our commitment to the patients’ interest, much of the scientific information used to endorse our products is peer-reviewed, and we have robust pro-cesses and guidelines in place to check that our mar-keting materials are ethical and accurate.

OUTLOOKIn 2015 our customer base will broaden to include the dental chain segment, as we begin to serve the ClearChoice network in the US (see p. 56), and the private clinic segment in China (see p. 57).

While we continue to develop customer-driven solu-tions and services for premium customers, our Instra-dent platform will expand internationally to address price-sensitive customers with a different value prop-osition. To optimize this approach we will continue to segment and target customers specifically.

REFERENCES/FOOTNOTES1 iData Research 2011.2 Da Silva JD et al, JADA 2014;145(7):704-713. Of 920 implants placed

in 87 general practices for which data were available, 7% were classified as failures. When excessive bone loss was included, 18.7% were classified as failures.



Straumann and the ITIA unique partnership that benefits patients around the world

The International Team for Implantology (ITI) is the largest international academic organization in implant dentistry and related tissue regeneration. It is a driving force in education and the dissemination of knowl-edge in the field, focusing on the development of well-documented treatment guidelines backed by exten-sive clinical testing, and the compilation of long-term results. More than 16 000 Fellows and Members all over the world participate in ITI activities, which are designed to promote networking and exchange.

For more than 30 years, Straumann has enjoyed a close relationship with the ITI, which has developed over time and adapted to change in the field. In January 2014, the two organizations formally defined a frame-work for their cooperation, which is summarized in three guiding statements:

– Straumann provides funding, expertise and support to the ITI

– The ITI takes its decisions autonomously – The decisions of the ITI are made in the mutual in-terests of both parties.

This sets the direction and parameters of the partner-ship for the coming years.

ADDRESSING THE GROWING DEMAND FOR EDUCATION2014 was an important year for the ITI. The successful ITI World Symposium in Geneva in April drew more than 4 200 participants from 84 countries.

Another major highlight was the launch of the ITI’s new e-learning platform, the ITI Online Academy, in October. Geared to individual user needs, the Academy offers a comprehensive, evidence-based curriculum for dental practitioners at every level of skill and expe-rience. Designed and built by the ITI, it continues

to expand with leading-edge content. Offering 24/7 worldwide access, this platform caters for individual learning preferences and the ever-growing demand for reliable educational material on implant dentistry.

Despite its many advantages, a virtual environment cannot replace physical interaction and networking. This is why the ITI continues to provide its Members and Fellows with numerous opportunities to meet personally and to share experience and expertise, for example at Section meetings, Education Weeks and at more than 600 Study Clubs around the world.

Supporting research is central to the ITI’s principles. In 2014, 24 research grants were awarded worldwide to individuals in and outside the ITI membership. ITI- funded research has resulted in more than 90 peer reviewed publications 2006, 18 of which were pub-lished in 2014. The ITI also supports continuing educa-tion for young practitioners through 20 annual Schol-arships at ITI Scholarship Centers.

OUTLOOKAmong other highlights in 2015, the ITI will organize ten national congresses and seven ITI Education Weeks around the world. Expanding the ITI Online Academy with additional content and ensuring that existing material is up to date is an ongoing priority. At the same time, work will also continue on Vol-umes 9 and 10 of the highly regarded ITI Treatment Guide series.



EmployeesCreating a high performance organization

Having reduced personnel-related costs through resizing and restructuring in 2013, we needed to strengthen our staff in specific areas to support stra-tegic growth initiatives, e.g. in emerging markets like China and Latin America, in the value segment and in Sales in North America. As a result, our global team increased slightly above our forecasts by 170 in 2014 to 2 387, of which 403 were at headquarters.

OUR CULTURAL JOURNEY The organizational structure we implemented in 2013 is designed for simplicity, customer focus, agility and accountability. Only fine tuning was needed in 2014, underlining the fact that our major challenge in creat-ing a high performance organization is cultural rather

than structural. Cultural change is a strategic priority (see p. 26), which we believe has to start at the top of the company. Assisted by external specialists, we mea-sured the company culture based on 12 behavior styles that are found in all organizations. By Septem-ber, approximately 500 employees representing 20% of our staff had completed a structured, anonymous survey assessing the company’s leaders and their busi-ness areas.

The results were communicated internally and com-pared with the aspired ideal picture sketched by top management at the outset (see right). The next step was to conduct team workshops to understand chal-lenges and aspirations and to determine individual

ADAPTING OUR COMPANY CULTURE

AGGRESSI

VE/D

EFEN

SIVE

STY

LES

AGGRESSI

VE/D

EFEN

SIVE

STY

LES

PASSIVE/DEFENSIVE S

TYLE

S

PASSIVE/DEFENSIVE S

TYLE

S

CONSTRUCTIVE STYLES

CONSTRUCTIVE STYLES

CURRENT IDEAL

In 2014 we embarked on a cultural ‘journey’ to foster and promote delegation, empowerment, responsibility, risk-taking, challenging and creative thought, which are predominant behavioral styles in high-performance organizations. The charts map our behavioral styles at the outset (left) and the ideal we want to achieve (right).


¢ Switzerland¢ Rest of Europe¢ North America¢ Asia/Paci�c¢ Rest of the World

Numbers in brackets refer to 2013.

32% (32%)

33% (35%)

21% (22%)

4% (4%)

9% (9%)

¢ Full time¢ Part time

93%

7%

EMPLOYEES

GENDER AGE

LEADERSHIP

EMPLOYMENT

Cultural changeCultural change is a strategic priority which we believe has to start at the top.

70%

12%18%

<30 30–50 >5043% 57%

2010 2361

2014 2387

2011 24522012 25172013 2217

24% MANAGERS

76% GENERAL STAFF

EMPLOYEES BY REGION



Parameter Unit 2014 2013 2012

Staff size Employees Total headcountsFull-time equivalents

2 3872 330

2 2172 164

2 5172 457

Employment type Part-time employees % of headcount 7 7 7

Gender diversity Women in general staff (excl. Mgmt) % 48 47 47

Women in SMD pool1 % 24 24 18

Women in management % 29 31 31

Training and education Investment in staff learning2 CHF million 1.7 1.5 2

Average annual training & learning Days/employee 3 3 4

Fluctuation and absence Staff fluctuation % 13 22 12

Absence rate due to sickness3 % 3 3 3

Absence rate due to workplace accidents3

% 0 0 0

Work-related fatalities Number 0 0 0

Employee protection Reported cases of discrimination Number 0 0 0

1 Strategic Management Development group.2 Only direct expenses for internal and external training activities are counted here.

Salaries paid to employees while in training are additional and are not included.3 Switzerland only. Proportion of absence time compared to target working hours.

Age <30 30 – 50 >50 Unit 2014

General staff (excl. Mgmt) 11.25 51.70 12.86 % of headcount 75.83

Management 0.25 18.52 5.40 % of headcount 24.17

TOTAL 11.52 70.21 18.27 100

HUMAN RESOURCES KEY FIGURES

STAFF STRUCTURE BY CATEGORY AND AGE GROUP (%)


and team actions to effect the cultural change. The process will be extended through the organization and progress measured in follow-up surveys.

ENGAGEMENTDespite the pace of change and the challenging key initiatives in 2014, our staff again demonstrated the Straumann spirit of ‘simply doing more’, helping us to outperform, to expand and to deliver an impressive number of innovations to market.

Competitive salaries, benefits and incentives are sig-nificant engagement drivers and are discussed in our Compensation Report (see p. 138 ff.). To gain direct feedback on staff engagement, top management

increasingly uses focus-groups and ‘town-hall’ meet-ings. In 2014, 17 general staff meetings were held with the CEO in nine countries, in addition to 24 informal small group sessions, in which staff are able to put concerns personally to the CEO and other members of the Executive Management.

Apart from these channels and the aforementioned surveys, all leavers are requested to complete ques-tionnaires. These indicate that development and work-life balance are also important drivers of engagement.

DEVELOPING SKILLS, ENHANCING LEADERSHIPTraining and development are essential to meet the requirements for an international company in the



medical device industry, and to attract and retain staff. In addition to introductory product and techni-cal training, we offered refresher updates for staff who have been with the company for some time. We also extended the program devoted to selling skills, which begun in 2013, and we maintained our apprenticeship and internship programs. Our Corpo-rate Graduate Program was refined and includes members of the Executive Management in the selection process.

STRATEGIC MANAGEMENT DEVELOPMENT (SMD)We extended our SMD process for senior manage-ment, staff in key positions, and future leaders. This reviews leadership, performance, behavior, and career potential as a basis for development, deployment, and succession planning. Our other staff development programs were re-evaluated and tailored as follows:

GLOBAL DEVELOPMENT PROGRAM (GDP)

We replaced our International Talents Program with the new GDP, which identifies and develops future leaders with a view to filling our succession pipeline globally. The 18-month program is for members of general staff to middle management who have lead-ership aspirations and potential. It includes interna-tional assignments, assessments and mentoring by top management. Nine participants joined the pro-gram in 2014. We plan to introduce a Local Develop-ment Program for employees who have potential but are less able to relocate internationally.

PROFESSIONAL CAREER PATH (PCP)

Prompted by our 2010 staff survey and further analy-sis, we developed a model that provides career oppor-tunities outside line-management by enabling indi-viduals to progress through four clearly defined, benchmarked stages to the level of ‘Expert’. Having piloted the PCP in 2014, we plan to expand it to Research & Development, Information Technology and Operations in 2015.

DIVERSITY AND EMPLOYEE PROTECTIONA diverse team adds value and supports our ability to serve an increasingly diverse customer base. We mon-itor diversity with regard to age, gender, origin and educational background. Gender diversity is strong overall, with 43% female employees.

Our onboarding training for new employees focuses on corporate alignment including our Code of Con-duct, which protects employees from discrimination (unequal treatment based on gender, race, religion, or sexual orientation). No cases of discrimination were reported in 2014. Health/safety training and awareness are given due importance at Straumann, and no workplace fatalities or serious accidents were reported.

RESPONSIBILITY AND ETHICAL BEHAVIOR Our Code of Conduct also defines our expectations for ethical behavior in all our business activities. Being an integral part of our employment contracts, it prohibits any form of human rights violation, bribery, corrup-tion, unfair competition, misleading marketing, etc. Employees are obligated to report any violation, sus-pected violation or misconduct. In 2014, no violations of the Code of Conduct were reported.

We also expect ethical practices in our supply chain, as presented in our ‘Code of Conduct for Suppliers,’ which refers to working conditions, human rights pro-tection, business ethics, legal compliance, and envi-ronmental protection.

OUTLOOKWe expect our existing workforce in business-critical areas to grow in 2015 linked to revenue growth, as we pursue our strategy to exploit growth opportunities in emerging markets and attractive segments.

We will continue to refine and expand our staff devel-opment programs, but the key priority in 2015 will be driving behavioral and mindset changes to produce a high performance culture.



CommunitiesEnhancing well-being and quality of life

MORE THAN CARING – ADDING VALUE FOR STAKEHOLDERSOur biggest contribution to the community is en-hanced well-being and quality of life through safe, effective, lasting solutions that restore not only dental function and esthetics, but also smiles and confidence. This is especially true in fully edentulous patients, whose lives change significantly when their teeth are replaced. We take pride in the fact that every year more than a million people around the world are treated with, and helped by, a Straumann solution.

At the same time, we have to acknowledge that mil-lions of people around the world do not have access even to basic dental care, let alone tooth replacement. This is why we support charitable initiatives to make dental treatment and education about oral hygiene available to the underprivileged. Like most of our sponsoring activities, these are connected to our field of business – since this is where we can make a mean-ingful difference.

Straumann is politically neutral in all its sponsoring activities. We refrain from making statements on pub-lic policy and from political lobbying, and we do not sponsor politicians or political parties. Sponsoring requests and initiatives are evaluated according to clearly defined principles and policies by our Corporate

Sponsoring Committee, which reports periodically to the Executive Management.

CONTINUED SUPPORT FOR THE UNDERPRIVILEGED2014 was similar to previous years in terms of sponsor-ing activities. We evaluated some 50 requests, of which we supported ten. In each case clear goals were set and achieved. An overview is presented opposite.

We try to ensure that there is continuity and sustain-ability in the projects we support, and our engage-ment spans several years in most cases. Our donations to these and other projects totaled approximately CHF 250 000. Two new projects were the ‘One day a smile’ initiative in France and support for the Albert Schweitzer Hospital in Gabun through Secours Den-taire International.

‘ONE DAY A SMILE’The ‘One Day a Smile’ event at the Afopi campus north of Paris provided total tooth replacement free of charge to 14 patients who had severely compromised dentition and were unable to afford treatment. Remarkably, the treatment was completed in a single day, including extraction of their remaining teeth, the placement of 14 – 16 implants and two full-arch fixed dentures.

The ‘One day a smile’ charitable project attracted broad media attention in France. All patients were treated at no cost and the implants for the treatments were provided by Straumann.


REGION LEAD PARTNER OBJECTIVE 1 STATUS/RESULTS

Alaska Academy of Prosthodontics Foundation

Dental outreach project to elderly patients, supported since 2005

2014 project completed; patients fitted with dentures and dental implants

Bali Bali Children Foundation Dental care for children, supported since 2012

Dental Clinic built and inaugurated; ongoing dental treatments for children

Cambodia ‘Hope for All’ Clinic Scholarships and clinic, supported since 2007

Ongoing; three dental students fully supported

Bonn University students Support for ‘Cambodia World Family’ project

2014 project completed

Chile Connecticut University team Dental outreach project, supported since 2008

2014 project completed

Cook Islands Hannover University students Clinical traineeships 2014 project completed

France Afopi Dental Campus ‘One-day-a-smile’ dental charity for treatment of 14 needy patients

182 implants with corresponding abutments and instruments donated

Gabun Secours Dentaire International

Support for Albert-Schweitzer- Hospital dental clinic in Lambaréné

Ongoing

Haiti Dental International Aid Net-working Organization (DIANO)

Clinic fittings, health center development

Generator donated for the newly-built health center in Ouanamintheg

Nicaragua Sonrisa foundation Free dental care for orphaned children; dental student scholarship

Ongoing project

North America National Foundation for Ectodermal Dysplasia

Financial, treatment and PR, supported since 2004

Ongoing project

UK Bridge 2 Aid/CLAPA Fund-raising bicycle ride, organized by Straumann UK

>GBP 25 000 raised

Other Straumann AID Free products for underprivileged individuals

Ongoing

1 In each case clear prerequisites and goals were set.

MAIN INITIATIVES AND PROJECTS SPONSORED BY STRAUMANN IN 2014


This project was made possible by the clinic and 60 dental professionals who freely offered their services. Straumann donated state-of-the-art materials, like our new fast healing Bone Level Tapered implant and angled abutments. The market value of the materials exceeded CHF 125 000. The cases are all documented and the patients tracked.

STRAUMANN AIDStraumann AID (Access to Implant Dentistry), which was set up in 2007, is another global initiative to help underprivileged patients who are in need of implant treatment but cannot afford it. It relies on collabora-tion with dentists from the ITI network, who provide the treatment without charge, while Straumann makes the respective product donations.

OUTREACH IN DEVELOPING REGIONSElsewhere, we continued to support basic dental care initiatives mostly in developing regions. Often it is

necessary to work with portable equipment. We are grateful to our dental partners – many of whom are volunteers – for their devotion and for ensuring that the funds are used efficiently.

MORE THAN A DECADE OF COMMITMENT TO ECTODERMAL DYSPLASIA PATIENTSWe continued our longstanding commitment to help-ing people affected by ectodermal dysplasia (ED). Sufferers typically have severely malformed or missing teeth from infancy, and their dental treatment is rarely covered by insurance. Straumann provides free im-plants and prosthetics as well as financial support to the National Foundation for Ectodermal Dysplasia (NFED), a US-based non-profit organization that helps patients and their families around the world.

We strive for sustainability in all the charitable proj-ects we support, which is reflected in our long-stand-ing relationships and commitments (see table above).



SUPPORT FOR YOUNG DENTISTSWe continued to sponsor four young dental students in Cambodia and Nicaragua, who are connected with Straumann-supported charitable projects that we support. Our hope is that these students will help address the huge local need and sustain the respec-tive projects.

NEW AWARD FOR YOUNG PROFESSIONALSApart from this, we created a new annual award together with botiss biomaterials, our partner in oral tissue regeneration, to foster and encourage the devel-opment of young dental professionals in the field of periodontal care/dentistry. Entitled ‘The Straumann/botiss biomaterials Young Periodontal Professional of the Year’, the award is worth more than 5000 Euros.

All the abovementioned projects focus on dentistry and thus promote Straumann’s reputation among rel-evant stakeholders as a caring, responsible corporate citizen. This supports our business and thus adds value for our shareholders.

OUTLOOKIn 2015, together with our partner Createch we will donate the final restorations for the patients treated in the One Day a Smile event. We also plan to sponsor a similar charitable initiative in China.

Beyond that, we plan to continue our support for charitable activities in the dental field, focusing on initiatives/projects that provide access to dental treatment for needy people and on dental education programs. These kinds of involvement are meaningful to our stakeholders.



Global production & logisticsNew product launches, technologies and efficiency gains

FIFTH CONSECUTIVE YEAR OF EFFICIENCY IMPROVEMENTSIn recent years we have made significant successive efficiency improvements in Production and Logistics despite the unpredictability of our changing environ-ment. 2014 was outstanding because, for the fifth consecutive year, we exceeded our ambitious cost-improvement targets and further expanded the gross margin. This was achieved through new technologies and multiple efficiency initiatives, which more than offset cost increases of high-tech innovations.

INNOVATION TO MANUFACTURE INNOVATIONSOne of our major challenges was to support the con-version of our entire implant range from titanium to Roxolid combined with the new Loxim transfer piece. In addition, we launched a new 4mm implant, the shortest of its kind on the market, as well as a small-diameter version of our PURE ceramic implant launched in 2013 (see p. 20). The latter requires inno-vative processes for machining, surface treatment and fracture-resistance testing of each implant.

As the year progressed, we began building up produc-tion for our new Bone Level Tapered implant range (see p. 104), which entered a controlled market release in the fourth quarter. This has been a large undertak-ing, not least because the new range requires a host of new instruments. Apart from this, we launched an extensive portfolio of angled abutments.

In CADCAM prosthetics, we developed new design software and a number of new products including constructions for screw-retained bars and bridges and crowns made of various materials.

STRONG VOLUME GROWTH COVERED WITHOUT STAFF INCREASESStrong demand for new and existing products led to a double-digit rise in volumes, which we were able to cover with our existing staff – plus a few additions – thanks to efficiency/productivity gains and invest-ments in new technology, including the very latest milling and lathe machinery to produce sophisticated designs, automated quality inspection systems and robotic transfer systems.

With regard to capacity utilization, we struck an opti-mal balance between our implant production facilities in Villeret and Andover. Both operated throughout the year at 95% capacity.

For maximum flexibility to meet changing market requirements, we completed our largest ever technol-ogy transfer from Villeret to Andover, including docu-mentation and regulatory supervision.

We manufacture more than eleven million items in Villeret and Andover each year. Implants go through almost 30 production steps, of which more than half are quality checks.


LOCATION PRODUCTS STAFF OUTPUT (UNITS/COMPONENTS)

MARKETS CERTIFICATION

Villeret, Switzerland

Implant systems 350 7.5 million Global ISO, FDA, Anvisa, MHLW

Andover, USA Implant systems 110 3.9 million Global ISO, FDA, Anvisa, MHLW

Markkleeberg, Germany

CADCAM prosthetics

60 400 000 Europe ISO

Arlington, USA CADCAM prosthetics

16 85 000 USA FDA

Malmö, Sweden Regeneratives 26 160 000 Global ISO, FDA, Anvisa, MHLW

STRAUMANN’S PRODUCTION SITES


QUALITY SYSTEM ENDORSED Our training program in Lean Six Sigma skills has had a significant part in achieving our efficiency and produc-tivity goals. Production costs were reduced thanks to the insourcing of packaging, laser marking and paper-less (electronic) instructions for use. We further sim-plified the packaging process by harmonizing packs for implants and prosthetics and by integrating new sup-pliers in the system.

Once again the quality management system for pro-duction was subjected to various external audits, including FDA, and passed with flying colors.

Our Malmö site in Sweden, which specializes in the production of regenerative products, passed an FDA audit with no objections, as did our Andover and Instradent sites (Neodent distribution) in the USA.

LOGISTICS MANAGING UNPRECEDENTED PROLIFERATIONNot only did our logistics team have to cope with the significant volume increases, portfolio changes and more than 100 new launches worldwide, it had to manage the addition of nearly 500 items. On top of this proliferation, the entire Neodent, Medentika and botiss ranges were integrated, more than doubling the number of items in our range. Our warehouse team also tackled a large project for ClearChoice in the US, which involved installing RFID technology to transmit customer requirements, automatically enabling rapid replenishment of stocks.

OUTLOOKSuperior quality and outstanding service will always be the central goal for Production and Logistics. To this end, we will continue our Lean Six Sigma program.

In 2015, our focus will be on launching the Bone Level Tapered implant, the botiss rollout and the introduc-tion of additional CADCAM products. We are expanding our Arlington factory significantly and optimizing workflows to meet demand for screw-retained bars and bridges as well as our ‘Scan & Shapes’ Service. In Villeret, one of our main initiatives is to complete the transition to a completely paper-less production process.

Our new CADCAM production facility in Tokyo is due to become operational in late 2015 and will have an important part in strengthening the Straumann brand as the full solution provider and partner of choice in tooth replacement.



EnvironmentStriving to reduce our impact as production grows

We rigorously monitor the items we produce and the processes we use to manufacture them, in line with stringent regulations for medical device manu-facturers. Adherence to strict quality-control proto-cols for identity, purity and content testing of raw materials ensures that our products function safely and effectively. Full documentation of all manufac-turing processes provides traceability.

Company-wide, our managers are committed to process improvements with positive environmental impact. The staff is charged with environmental responsibility in all of their daily duties, in line with the ISO 14001 certification guidelines and the Strau-mann Code of Conduct.

Our products include titanium and ceramic dental implants, oral tissue regeneration products, and prosthetic elements made of ceramic, metal, or polymer. Apart from production and research activi-ties, our environmental impact is low compared with most manufacturing companies. We do not manufacture dental filling materials or surgical equipment, and so do not use significant amounts of metals such as mercury, lead, or manganese, which are typically used in the dental manufactur-ing industry.

ENVIRONMENTAL REPORTING AND PERFORMANCEOur environmental performance report is based on available data for all production sites in operation at

the end of the reporting year: Villeret (Switzerland), Markkleeberg (Germany), Malmö (Sweden), Andover and Arlington (USA); and for our Group headquar-ters in Basel. The report does not include our former laser scanner production facility in Gräfelfing, Ger-many, which was transferred to Dental Wings dur-ing the year under review.1

We monitor and report environmental data focused on key aspects of our operations (see highlights on overleaf and comprehensive performance figures on p. 100). Our principal product is dental implants, which are produced from rods of titanium or tita-nium-zirconium alloy on computerized CNC lathes. In the machining process, cutting oil is used as a cooling agent, followed by sand-blasting, acid etch-ing, cleaning, packaging, and sterilization.

TITANIUM AND OTHER RAW MATERIALSIn 2014, demand for existing products and the launch of several new products led to increased pro-duction volumes. The capacity increase was covered through four new production machines in Villeret and overtime work by our staff. Despite the increase in volumes produced, there was no corresponding increase in titanium use.

Sales of bone level implants have grown at the expense of their tissue level counterparts. In produc-tion, the profile of the bone level design more closely matches that of the metal rods from which they are milled, allowing us to work with narrower rods and


+19 %

-7 % -2 %

2013

4289

2013

8.6

2014

10.6

2014

3979

TITANIUM RECYCLING(tons)

PAPER CONSUMPTION PER CAPITA(1000 sheets)

WATER(m3)

2014

29 975

2013

30 597

We are working on a project to make the production process paper-free.

-1.5 %

2014

151.3

2013

153.6

REFUSE(tons)

The profile of our Bone Level implants closely matches that of the metal rods from which they are milled, allowing us to use less titanium per part.

-3 % -5 %

2013

2.6

HEATING ENERGY(GWh)

CO2 EMISSIONS PER CAPITA(tons)

2014

4.72013

4.82014

2.5




thus use less titanium per part. Additionally, trim-ming at the end of the process yields more titanium for recycling. Straumann’s PURE ceramic implants are made of yttrium stabilized zirconium oxide but as these have just been launched and their main appeal is for niche indications, the material consumption was only moderate in 2014. Smaller quantities of the raw materials cobalt chrome, yttrium stabilized zir-conium oxide, and polymethylmethacrylate (PMMA) are used in the production of crown and bridge solu-tions. Decreases in cobalt chrome and PMMA use and an increase in zirconia use reflect shifts in rela-tive demand between these different products.

OPERATING MATERIALSThe use of oils and cleaning solvents increased somewhat, corresponding to the rise in volumes produced. Likewise, recycled acid from the anodizing of implant parts, an electrolytic process that boosts resistance to corrosion and wear, also increased.

Despite volume expansion and the related docu-mentation requirements, leaner processes allowed us to decrease total and per-capita paper use.

ENERGY USE AND GREENHOUSE GAS EMISSIONSThe increase in electricity use was significantly below our volume increase in production, and per-capita electricity use was reduced. This was partly because of the addition of people to cover insourced activities, e.g. increased demand for Roxolid and our Loxim transfer piece. Together with changes in cli-matic conditions, which reduced heating energy requirements, this allowed us to reduce overall CO2 emissions despite our production growth.

The CO2 emissions we monitor are generated by electricity consumption and heating, and are differ-entiated in this report by direct (Scope 1) emissions from sources like the burning of natural gas, and indi-rect (Scope 2) emissions from sources like electricity and district heat. Minimal impact business activities, or those for which meaningful data are not available, are not included in our carbon reporting. These would include emissions from the transport of our products (which are small and light), sales representative travel, and employee commuting.

WATER AND WASTEWater consumption dropped slightly despite growth in production. Generation of untreated wastewater, containing low concentrations of cleaning deter-gents, solvents, acid, and oil, remained more or less constant. It is collected in tanks and disposed of by authorized specialist contractors, and the amount depends on maintenance activities at our water treatment plant in Villeret.

The amount of hydroxide sludge, a by-product of wastewater treatment that varies depending on the quantity and composition of the water treated, stayed roughly constant. The increase in diverse contaminated materials, which include oil-contami-nated rags, filters, and other debris, and some elec-tronic scrap, can be attributed to production growth, while use of solvents remained constant despite this growth.

Overall refuse output dropped slightly. Significant decreases in refuse generation at our Group head-quarters in Basel offset some increases at production sites. This was partly due to the restructuring in 2013, which involved headcount reductions and depart-mental relocations.

OUTLOOK Environmental considerations have become a funda-mental part of our business, and we are continually improving our processes. At our headquarters in Basel, we are assessing the feasibility of optimizing our heating and cooling system. The proposed modi-fication is to feed weather forecast data into our building control systems. This would allow us to quickly adjust heating and cooling to outside temper-ature shifts and save energy. In Villeret, we are work-ing on a project to make the production process paper-free by 2016, which should significantly reduce paper consumption.

FOOTNOTES1 For consistency, the partial-year environmental data for the Gräfelfing

site has been excluded from the 2014 report and the 2013 numbers have been recalculated in line with best practice for international envi-ronmental accounting standards like the Greenhouse Gas Protocol. Our other facilities, which focus on sales and distribution and are generally smaller, are likewise not included because of minor impact and lack of meaningful data.


Performance indicator Unit 2014 2013

Titanium Consumption kg 14 657 14 602

Recycled (consumption minus product)

kg 10 634 8 562

Cobalt chrome Consumption kg 2594 3 039

Recycled kg 2 095 2 200

Zirconia Consumption kg 1 733 1 461

Polymethyl methacrylate Consumption kg 19 28

Various oils Consumption kg 46 634 42 613


Cleaning solvents Consumption kg 34 656 31 436


Acids Recycled kg 45 571 39 341

Paper Consumption sheets 4 488 000 4 653 500

Consumption per capita1 sheets/employee

3 979 4 289

Electricity Consumption kWh 16 690 808 16 253 169

Consumption per capita1 kWh/employee 14 797 14 980

Heating2 Total heating energy kWh 4 681 928 4 836 548

– Fossil fuel kWh 3 874 493 3 843 748

– District heat kWh 807 435 992 800

Total heating energy per capita1

kWh/employee 4 151 4 458

CO2 emissions3 Total emissions tons 2 821 2 863

– Direct (Scope 1, excluding vehicle fuel)

tons 767 761

– Indirect (Scope 2) tons 2 054 2 101

Total emissions energy per capita1

tons/employee 2.50 2.64

Water Consumption m3 29 975 30 597

Consumption per capita1 m3/employee 27 28

Untreated waste water Disposal kg 11 690 11 834

Diverse waste Hydroxide sludge kg 13 543 13 402

Contaminated material kg 13 841 12 595

Solvents kg 3 217 3 217

Refuse Total kg 151 367 153 616

Per capita1 kg/employee 134 142

ENVIRONMENTAL KEY PERFORMANCE FIGURES

Emissions

Energy

Operating materials

Product raw materials

Water

Waste

1 Per capita figures refer to employees at the relevant reporting sites only.2 To avoid double counting, heating energy data do not include electricity used for a small part of heating at Andover, or to operate the geothermal heat

pump in Leipzig – these are included in the electricity data.3 Scope 1 covers CO2 emissions directly emitted by sources owned or controlled by Straumann such as heating boilers, while Scope 2 comprises emis-

sions generated in the production of the electricity, heat or steam that we consume.



Management commentary Risk and sustainability report 101


“Helping people get their teeth back and enjoy life again gives me great satisfaction.” JÖRG SCHAUBDESIGN ENGINEER

“Developing BLT has been like watching your baby come to life and grow up.”STEFFEN KÜHNE SENIOR DEVELOPMENT ENGINEER

“I have the opportunity to express my creativity and the freedom to stay on the cutting edge of surgery.”PROF. MICHEL DARDHEAD SURGICAL & CLINICAL SCIENCE


103

Sophisticated skills and compassion

STEFFEN KÜHNESENIOR DEVELOPMENT ENGINEER8 YEARS @ STRAUMANN

Steffen once designed high tech axles for cars. Now he’s passion-ate about improving people’s lives with devices he painstakingly guides from idea to prototype. “My job puts me in the middle of everything: design, development, verification, testing and lets me orchestrate all the technologies involved.”

PROF. MICHEL DARDHEAD SURGICAL & CLINICAL SCIENCE DEPARTMENT;PROFESSOR, NYU AND COLUMBIA UNIVERSITY11 YEARS @ STRAUMANN

“We offer highly sophisticated treatments and lots of support to clinicians.” Besides being a surgeon and professor, Michel is a global ambassador for Straumann. He built up a unique peer-to-peer partnership for oral surgeons and clinicians, which promotes professional mentoring and advances surgical techniques.

JÖRG SCHAUB DESIGN ENGINEER10 YEARS @ STRAUMANN

Jörg is enthusiastic about creating solutions from scratch. “I like creating and testing prototypes.” What motivates him is helping people. When his father needed an implant, Jörg said it had to be Straumann, “the design literally came from my fingers.”

“Helping people get their teeth back and enjoy life again gives me great satisfaction.” JÖRG SCHAUBDESIGN ENGINEER


104

Bone Level Tapered ImplantA new generationImplants with tapered/conical designs now make up nearly 60% of the global implant market and their popularity is expected to increase. One reason for this is that they provide good immediate stability when they are inserted, which makes them popular for accelerated tooth replacement procedures that are intended to cause less disruption to patients.

In addition, tapered designs are suitable for placement in tooth extraction sockets – reducing the need for bone augmentation –and in situations where it is difficult to achieve primary stability e.g. in low density bone. They also help surgeons in other chal-lenging situations.

The growing body of clinical evidence supporting immediate loading procedures with these designs, as well as the attractive market, have prompted Straumann to enter the field with a dif-ferentiated new-generation product made of Roxolid with the SLActive surface, which offer high strength and fast healing.

Source: Millenium Research Group, 2014

ANTICIPATED GROWTH OF THE TAPERED IMPLANT SEGMENT

¢ Europe ¢ North America ¢ Latin America ¢ Asia/Paci�c

202020192018201720162015201420132012

15

10

5

0


105

GAME-CHANGING SOLUTIONSThe BLT implant is the cor-nerstone of our Pro Arch solution, which includes prosthetics and digital workflows (see p. 158 f.).

CLEARCHOICE CHOOSES STRAUMANNBLT and Pro Arch were instrumental in the deci-sion by ClearChoice to choose Straumann as a preferred supplier.

ClearChoice is a large North American chain of dental centers, which are leaders in full-arch dental restorations. ClearChoice performs more implant procedures than any other network in the US.

SHORTENING TIME TO TEETH Our new Bone Level Tapered (BLT) implant began a controlled market release in September and had sold approximately 13 500 implants by year end. It will become generally available in 2015, except in certain Asian and Latin American markets, where regu-latory approvals are still pending.

The BLT is designed for enhanced primary and secondary stability, convenience and a shortened time to teeth. It is suitable for single and multiple tooth replacements and can be used to address the challenging needs of edentulous patients who want fast, reliable, esthetic, full dentures that are fixed, rather than removable. We offer it in a range of sizes, with surgical instruments (see p. 168 f.)and two options of material and surface.

60% of implantsare tapered/conical

105

Bone Control Design allows optimized crestal bone preservation and soft tissue stability.

Roxolid is a unique material with excellent mechani-cal properties.

Apically tapered implant body design allows underprepara-tion and supports a high primary stability in soft bone.

CrossFit connection makes handling easier and provides confidence for compo-nent positioning.

SLActive surface allows fast and predictable osseointegration.


106 Corporate Governance 106

Corporate governanceContents

107 Principles

107 Group structure

110 Shareholders

111 Shareholders’ participation

113 Board of Directors

126 Executive Management Board

127 Management contracts

127 Internal management development

127 Compensation, shareholdings and loans

127 Auditors

127 Information policy


Corporate governance 107Corporate Governance

PRINCIPLESThe principles and rules of Straumann’s corporate gov-ernance are laid down in the Articles of Association 1, the organizational regulations, the code of conduct, and the charters of the Board Committees. These prin-ciples and rules are the basis of our corporate gover-nance disclosures, which comply with the Directive on Information relating to corporate governance pub-lished by the SIX Swiss Exchange, where Straumann’s shares have been traded since the company’s initial public offering in 1998.

In 2014, Straumann adopted several changes to its Articles of Association to reflect the provisions of the Swiss ordinance against excessive compensation (OaEC) (see p. 148 for details).

The Articles of Association of Straumann Holding AG do not contain provisions for opting out or opting up. There are no change-of-control clauses included in agreements and schemes benefiting members of the Board of Directors or the Executive Management Board or other management staff.

GROUP STRUCTUREStraumann Holding AG is a listed stock corporation incorporated under the laws of Switzerland and domi-ciled and registered in Basel. Information about the company’s shares, which are traded on the main seg-ment of the SIX Swiss Exchange under the symbol STMN, is provided on p. 161 f.

Straumann Holding AG is the ultimate parent com-pany of the Straumann Group (referred to collectively as ‘the Group’), which is headquartered in Basel and includes a total of 35 wholly owned subsidiaries (see chart overleaf), and 6 companies in which non-con-trolling interests are held (see table on p. 109).

OPERATIONAL STRUCTUREThe Board has delegated the executive management of the Group to the Chief Executive Officer (CEO) and the other members of the Executive Management Board (EMB). Each member of the EMB is appointed and discharged by the Board. On 31 December 2014, the EMB comprised nine members, including the outgoing CFO, under the leadership of the CEO, Marco Gadola.

The following changes occurred in 2014: On 1 Decem-ber Dr Peter Hackel rejoined Straumann and took over as Chief Financial Officer. He succeeds Thomas Dressendörfer, who stepped down as CFO on 1 Decem-ber 2014 and as an EMB member on 1 January 2015. Thomas Dressendörfer will continue with Straumann in an advisory capacity until mid 2015. The Executive Vice President of Instradent Management & Strategic Alliances, Dr Sandro Matter, left Straumann in Decem-ber 2014. Marco Gadola has taken over his responsibil-ities until a successor will be appointed.

LEGAL STRUCTURELISTED COMPANIES

Straumann Holding AG is listed in the main segment of the Swiss stock exchange. No other company controlled by Straumann Holding AG is listed on a stock exchange.

Name Straumann Holding AG

Domicile Peter Merian-Weg 12, 4052 Basel, Switzerland

Treasury shares 0.4% of total

Market capitalization CHF 3.9 billion1

Listed on SIX Swiss Exchange

Security ID 0 01228 007

ISIN CH 0012 280 076

Ticker symbol STMN

1 On 31 December 2014

NON-LISTED GROUP COMPANIES

The Straumann Group is managed through its Head-quarters in Basel. It comprises a total of 35 wholly owned subsidiaries. As laid down in the organizational regulations, the respective Regional Sales Head, the CFO and the General Counsel represent Straumann Holding AG on the boards of these subsidiaries. The major subsidiaries of Straumann Holding AG are pre-sented on the overleaf and in note 34 to the Financial Statements on p. F66 of the Financial Report.

Straumann’s premium products and services are sold through Institut Straumann AG, multiple wholly owned distribution subsidiaries and through third party distributors (see chart on p. 172 for overview of subsidiary and distributor locations).


108

Principal Group Companies Ownership & share capital

108

At 31 December 2014 Values indicate share capital in each case

Corporate governance

INSTITUT STRAUMANN AG

Basel, Switzerland CHF 100 000

STRAUMANN ITALIA SRL Milan, Italy EUR 270 000

INSTRADENT ITALIA SRL Milan, Italy EUR 10 000

INSTRADENT AG Basel, Switzerland CHF 100 000

INSTRADENT USA, INC Andover, USA USD 1

STRAUMANN VILLERET SA Villeret, Switzerland CHF 9 000 000

STRAUMANN HOLDING DEUTSCHLAND GMBH Freiburg, Germany EUR 25 000

STRAUMANN GMBHFreiburg, Germany EUR 200 000

INSTRADENT DEUTSCHLAND GMBH Hügelsheim, Germany EUR 25 000

ETKON GMBHGräfelfing, Germany EUR 326 000

STRAUMANN GMBH Vienna, Austria EUR 40 000

STRAUMANN SRO Prague, Czech Republic CZK 200 000

STRAUMANN HOLDING AG Basel, Switzerland CHF 1 567 655

STRAUMANN AB Mölndal, Sweden SEK 100 000

BIORA AB Malmö, Sweden SEK 950 152

STRAUMANN AS

Oslo, Norway NOK 1 000 000

STRAUMANN DANMARK APS Brøndby, Denmark DKK 125 000

STRAUMANN OY Helsinki, Finland EUR 32 000

STRAUMANN SARL Marne-la-Vallée, France EUR 192 000

MANOHAY DENTAL SA Madrid, Spain EUR 60 101

INSTRADENT IBERIA SL Madrid, Spain EUR 3 000

STRAUMANN LTD Crawley, UK GBP 300 000

STRAUMANN BV Ijsselstein, Netherlands EUR 18 151

STRAUMANN SA/NV Zaventem, Belgium EUR 2 081 620

STRAUMANN MANUFACTURING, INC Andover, USA USD 1

STRAUMANN USA, LLC Andover, USA USD 1

STRAUMANN CANADA LTD Burlington, Canada CAD 100 000

STRAUMANN MEXICO SA DE CV Mexico DF, Mexico MXN 2 892 615

MANOHAY ARGENTINA SA Buenos Aires, Argentina ARS 100 000

STRAUMANN BRASIL LTDA São Paulo, Brazil BRL 3 405 612

STRAUMANN SINGAPORE PTE LTD

Singapore, Singapore SGD 1

STRAUMANN PTY LTD Victoria, Australia AUD 100

STRAUMANN JAPAN KK Tokyo, Japan JPY 10 000 000

STRAUMANN DENTAL KOREA INC Seoul, Republic of Korea KRW 2 300 000 000

STRAUMANN (BEIJING) MEDICAL DEVICE TRADING CO LTD Beijing, China RMB 40 000 000

STRAUMANN DENTAL INDIA PVT LTD Gurgaon, India INR 6 000 000


Corporate governance 109

To complement its premium business, Straumann has established an international business platform of ‘value’ brand companies (see p. 27 for details on Strau-mann’s investments). The platform operates under the name Instradent. By year end, Instradent had estab-lished entities in the US, Germany, Italy, and Spain.

On 31 December 2014, Straumann Holding AG directly or indirectly held 100% of the capital and voting rights in all consolidated Group companies. In addition, Straumann Holding AG directly or indirectly held capi-tal rights in the companies listed in the table below.

PARTICIPATIONS IN OTHER COMPANIESWith the aim of gaining leads to attractive technology/business opportunities in Asia, the Group participated in a fund, managed by DM Capital, which is devoted solely to investments in dental-related opportunities in public and private companies in China.

In the first quarter, the Group invested in convertible bonds in Biodenta Corporation, a provider of compre-hensive solutions for dentists and dental laboratories, focused on emerging markets with operations in Tai-wan and Switzerland, and in MegaGen Implant Co. Ltd, one of Korea’s fastest-growing dental implant companies with activities in key global markets. The investment in Biodenta – if converted – could pro-vide Straumann with a stake of approximately 12% until 2019. The investment in MegaGen together with

a share purchase option could provide the Group with a majority stake in MegaGen by 2016.

In the second quarter, Straumann obtained a condi-tional call option to acquire shares of botiss medical AG which, if exercised, could lead to a stake in the Ger-man company of up to 30% in 2017.

In the third quarter, Straumann acquired a 12% stake in RODO Medical, Inc. a California-based, privately-held developer of dental prosthetic fixture devices. In the fourth quarter, Instradent AG entered an agree-ment to acquire approximately 43% of T-plus Implant Tech. Co. Ltd., a leading dental implant company in Taiwan, in Spring 2015. Instradent has an option to increase its holdings to 90% by 2020.

At 31 December 2014, Straumann held 30% of Creat-ech Medical in Spain, a specialist in quality CADCAM prosthetics, 44% of Dental Wings Inc., a specialist in dental software and 3-D scanners for dental applica-tions in Canada, 49% of JJGC Indústria e Comércio de Materiais Dentários S.A (Neodent), the leading dental implant company in Brazil, and 51% of Medentika GmbH and Medentika Implant GmbH, providers of dental implants and prosthetics in Germany. All of these are non-controlling stakes.

The Straumann Group has no other significant share-holdings of more than 10%.

Non-consolidated company Location Activities Capital rights held

Straumannrepresentation

Createch Medical SL Mendaro (Spain)

CADCAM prosthetics formultiple implant systems

30% 1 Board seat(Guillaume Daniellot)

Dental Wings Inc Montreal (Canada)

Dental prosthetics design (CAD), software and scanners

44% 2 Board seats(Marco Gadola, Frank Hemm)

JJGC Indústria e Comércio de Materiais Dentários S.A.(Neodent)

Curitiba (Brazil)

Design, development, and manufacture of dental implants and related prosthetic components

49% 2 Board seats(Marco Gadola, Peter Hackel)

Medentika GmbHMedentika Implant GmbH

Hügelsheim (Germany)

Implant prosthetics & dental implants

51% At general meeting, but not controlling interest

Open Digital Dentistry AG (in liquidation; assets and activi-ties transferred to Dental Wings)

Zug (Switzerland)

Dental prosthetics design, software marketing

44% n/a

RODO Medical, Inc. San Jose (USA)

Prosthetics 12% 1 Board seat (Andy Molnar)

STRAUMANN’S PARTICIPATION AND REPRESENTATION IN OTHER COMPANIES

Corporate governance



CROSS SHAREHOLDINGS Straumann does not have, and has not entered into, any cross-shareholdings with other companies relat-ing to equity or voting rights.

SHARE CAPITAL AND OTHER FINANCIAL INSTRUMENTSThere have been no changes in Straumann’s share cap-ital in the past three years. On 31 December 2014, the share capital was composed of 15 676 549 registered shares – fully paid in, each with a nominal value of CHF 0.10 – and conditional capital of CHF 32 345.10, divided into 323 451 registered shares with a nominal value of CHF 0.10. Straumann Holding AG did not have any authorized share capital.

The conditional share capital was approved for an unlimited period at an extraordinary General Meet-ing in 1998 for use in equity participation plans for employees and management (see Compensation Report for details).

Straumann has not issued any financial instruments (participation certificates, dividend-right certificates, warrants, options or other securities granting rights to Straumann shares) other than the options/warrants and Performance Share Units granted to certain employees as a component of compensation (see Compensation Report 138 ff.) and the CHF-200-million domestic straight bond launched in 2013 and due on 30 April 2020.

LIMITATIONS ON THE TRANSFERABILITY OF SHARES AND NOMINEE REGISTRATIONS Purchasers of shares are entered in the share register as shareholders with voting rights if they expressly declare that they have acquired the registered shares in their own name and for their own account. If a purchaser is not willing to make such a declaration, he/she is registered as a shareholder without voting rights. Proof of acquisition of title in the shares is a prerequisite for entry in the share register.

Straumann has no other categories of shares than reg-istered shares. There are no restrictions on the trans-ferability of Straumann Holding’s shares.

Nominees approved by the Board of Directors are recorded in the share register as shareholders with voting rights. Nominees who have not been approved by the Board of Directors may be refused recognition as shareholders if they do not disclose the beneficiary. In such cases, the nominees will be recorded in the share register as shareholders without voting rights. At 31 December 2014, no nominee had applied/asked for registration and voting rights.

SHAREHOLDERSSIGNIFICANT SHAREHOLDERSIn 2014, Straumann was notified of three transactions according to Art. 20 SESTA:

– In May, Parvus Asset Management (UK) LLP, an inde-pendent investment management firm based in

SHAREHOLDINGS ON 31 DECEMBER 2014 (BY SEGMENT)

SHAREHOLDINGS ON 31 DECEMBER 2014 (BY GEOGRAPHY)

¢ Major shareholders (private)¢ Major shareholder (institutional)¢ Institutional shareholders¢ Private individuals¢ Non-registered & undisclosed

37.3%

10.5%

8.3%

21.8%

22.1%

¢ Switzerland¢ Asia¢ Europe¢ USA¢ Rest of the World¢ Non-registered & undisclosed

21.8%

0.1%2.2%

9.1%

13.6%

53.2%


Corporate governance Corporate governance 111

London, United Kingdom, reported a sale of shares that caused its shareholding to fall below 10%.

– In July, Sprucegrove Investment Management (based in Toronto, Canada) reported the sale of shares that reduced its holding to less than 3%. Sprucegrove is therefore no longer reported as a significant share-holder of Straumann.

– In December, Parvus reported an internal restructur-ing which resulted in Parvus Asset Management (UK) LLP transferring its entire investment management business – including its stake in Straumann – to Par-vus Asset Management Europe Limited.

Details of the transactions are published on the SIX Swiss Exchange online reporting platform 2.

On 31 December 2014, the major shareholders were as listed in the table overleaf.

SHAREHOLDERS’ PARTICIPATION CONVOCATION OF GENERAL MEETINGS, AGENDA PROPOSALSThe Shareholders’ General Meeting is convened by the Board of Directors within six months of the end of the business year. In 2015, the Shareholders’ General Meeting will take place on 10 April at the Basel Con-gress Center. Shareholders individually or jointly rep-resenting at least 10% of the share capital may request an extraordinary General Meeting. The re-quest must be made to the Board of Directors in writ-ing, stating the agenda items and motions.

Invitations to the General Meeting are issued in writ-ing and are delivered via ordinary mail to the address recorded in the share register at least 20 days before the date of the General Meeting and are published on the company’s website (www.straumann.com). If shareholders agree to electronic delivery of notices, the invitation will also be sent by e-mail.

All agenda items and proposals by the Board of Direc-tors and by shareholders who have requested the General Meeting must be announced in the notice convening the General Meeting.

Shareholders who individually or jointly represent shares with a par value of at least CHF 15 000 may request that an item be included in the agenda. The request shall be in writing at least 45 days before the

General Meeting and must set forth the agenda items and the proposals of the shareholder(s).

REGISTRATIONS IN THE SHARE REGISTERThere are no statutory rules concerning deadlines for entry in the share register. However, for organizational reasons, the share register will be closed several days before the General Meeting. For the 2015 General Meeting, new entries in the share register cannot be made after 30 March 2015. Shareholders who sell their shares prior to the General Meeting are no longer enti-tled to vote.

Straumann’s share register, in which the owners and usufructuaries of registered shares, including names and addresses, are recorded, is maintained and administered on behalf of the Company by Nimbus AG 3.

Only persons recorded in the share register as share-holders or usufructuaries are acknowledged as such by the Company. The transfer of registered shares requires the authorization of the Board of Directors, which delegated this power to Nimbus AG. Authoriza-tions will be granted after the purchaser has provided their name, nationality, and address and declared that the shares were acquired in its own name and for its own account. Persons who have voting rights but no title to shares as a consequence of legal provisions (e.g. legal representatives of minors) will be referenced in the share register upon request.

Registered shareholders must inform the company of any change of address. If they fail to do so, all notices will be deemed to be legally valid if sent to the address recorded in the share register. The Company may, after hearing the parties concerned, delete entries in the register if these are based on false information.

VOTING RIGHTS AND REPRESENTATION RESTRICTIONSEach share duly entered in Straumann’s share register as being held in the shareholder’s own name and for the shareholder’s own account entitles the share-holder to one vote. On 31 December 2014, 78.2% of the issued capital was registered in the share register. All shares have the same entitlements to dividends. There are no preferential rights granted to any share-holders or shares.



NUMBER OF SHAREHOLDERSSHARES 31 Dec 2014 31 Dec 2013

1 – 100 5097 5756

101 – 1000 2428 2946

1 001 – 10 000 238 238

10 001 – 100 000 55 44

100 001 – 1 000 000 7 8

1 000 001 and more 3 3

TOTAL 7828 8995

SHAREHOLDERS BY CATEGORY(in %) 31 Dec 2014 31 Dec 2013

Major private shareholders 37.3 37.6

Major institutional shareholders 22.1 28.9

Other institutional shareholders 10.5 16.8

Private individuals 8.3 9.5

Non-registered and undisclosed shareholders 21.8 7.2

MAJOR SHAREHOLDERS(in %) 31 Dec 20141 31 Dec 2013

Dr h.c. Thomas Straumann (Vice Chairman of the Board) 17.3 17.3

GIC Private Ltd 13.6 13.7

Dr h.c. Rudolf Maag 12.2 12.2

Parvus Asset Management Europe Ltd2 8.5 10.8

Simone Maag de Moura Cunha 4.4 4.7

Gabriella Straumann 3.3 3.4

Sprucegrove Investment Management2,3 n/a 4.4

TOTAL 59.3 66.5

1 Or at last reported date if shareholdings are not registered in the share register2 Not registered in Straumann’s share register3 Dropped below the 3% threshold in July 2014

CAPITAL STRUCTURE(in CHF 1 000) 31 Dec 2014 31 Dec 2013

Equity 736 836 631 380

Reserves (122 132) (126 314)

Retained earnings 857 400 756 126

Ordinary share capital 1 568 (fully paid in)

1 568 (fully paid in)

Conditional share capital 32 32

Authorized share capital 0 0

Number of registered shares 15 676 549 15 676 549

Nominal value per share (in CHF) 0.10 0.10

Registration restrictions None None

Voting restrictions or privileges None None

Opting-out, opting-up None None


Corporate governance 113Corporate governance

All shareholders may be represented at the General Meeting by a proxy. Proxies and directives issued to the independent voting representative may either be given in writing or online via the Nimbus Shareholder Application ShApp (https://shapp.ch). Other voting representatives must have a proxy signed by hand by the shareholder.

The independent voting representative is elected by the General Meeting for a term of office until the end of the next annual general meeting. The independent voting representative may be re-elected. In case of vacancy, the Board of Directors shall designate one for the next General Meeting.

QUORUMSThe General Meeting adopts its resolutions and holds its ballots by a majority of votes cast. Abstentions and invalid ballots are not taken into account. The legal provisions (in particular section 704 of the Swiss Code of Obligations) that stipulate a different majority are reserved. Votes on resolutions and elections are held electronically. In case of technical difficulties, the chairman may order an open or written ballot. Like-wise, the chairman may repeat a ballot if he considers that the outcome is doubtful. In such a case, the pre-ceding ballot is not considered. The General Meeting may only approve the annual financial statements and resolve on the appropriation of the balance sheet profit if the Auditors’ report is available and the Auditors are present. The presence of the Auditors can be dispensed of by unanimous resolution of all shares represented.

2014 GENERAL MEETING The 2014 annual general meeting took place on 11 April 2014, and was attended by 366 shareholders, who, together with proxies, represented 79.7% of the total share capital. For the first time, the shareholders were able to provide voting instructions online to the independent proxy.

The meeting approved the annual report, financial statements and consolidated financial statements for the 2013 business year and gave consent to the 2013 compensation report in a consultative vote. It further approved the appropriation of the available earnings in 2013 and the revision of the Company’s Articles of Association to account for changes required by the

Swiss ordinance against excessive compensation (OaEC), which came into effect on 1 January 2014. The Directors were discharged for their activities in 2013 and those running for re-election were re-elected as Board members for a further one-year term. Gilbert Achermann was elected as Chairman and Ulrich Looser, Dr Beat Lüthi and Stefan Meister to the Com-pensation Committee, all for a term of one year. Neovius Schlager & Partner in Basel was appointed for a term of one year as the independent voting repre-sentative and Ernst & Young AG as auditors.

The total compensation of the Board of Directors for the next term of office, and the fixed compensation of the EMB from 1 April 2014 to 31 March 2015 as well as their variable long-term compensation components for the current business year were approved by the annual general meeting for the first time.

The agenda, the minutes (including the voting results) and a media release summary of the meeting are pub-lished in the Investor Relations section of the compa-ny’s website 4.

BOARD OF DIRECTORS The members of the Board of Directors, the Chairman of the Board and the members of the Compensation Committee (which shall at least be 3) are all elected individually by the Shareholders’ General Meeting for a term of one year. Re-election is permitted until the age of 70.

If the position of Chairman of the Board or a position in the Compensation Committee falls vacant, the Board of Directors appoints a replacement from among its own members for the remaining term of office.

At the Shareholder’s General Meeting in April 2014, all of the Directors standing for re-election – Gilbert Achermann, Dr h.c. Thomas Straumann, Dr Sebastian Burckhardt, Roland Hess, Ulrich Looser, Dr Beat Lüthi and Stefan Meister – were re-elected for a further one-year term. Having served on the Board since 2001, Dominik Ellenrieder decided not to stand for re-election. Gilbert Achermann was elected as Chairman of the Board and Stefan Meister, Beat Lühti and Ulrich Looser were elected as members of the Compensa-tion Committee. The Board appointed Dr h.c. Thomas



Straumann as its Vice Chairman and Roland Hess, Sebastian Burckhardt and Ulrich Looser as members of the Audit Committee.

The Board of Directors of Straumann Holding AG com-prised seven non-executive members. No Director has been a member of the company’s Executive Manage-ment during the past three years except for Gilbert Achermann, who took over the additional role of CEO for an interim period of four months in 2013.

The Directors are all Swiss citizens. The average age of the Members of the Board at year-end was close to 55.

BUSINESS CONNECTIONS AND POLITICAL/OFFICIAL FUNCTIONSNone of the Directors had any significant business connections with Straumann Holding AG or any of its subsidiaries in 2014.

Unless stated in the individual CVs (see p. 116 f. & 121 ff.), none of the Directors:

– Performed any activities in governing or supervi-sory bodies of significant foreign or domestic orga-nizations, institutions or foundations under private or public law;

– Held any permanent management or consultancy position for significant domestic or foreign interest groups;

– Held any official function or political post.

PERMITTED MANDATES OUTSIDE STRAUMANN

(PURSUENT TO ART. 12 OAEC)

Art. 4.4 of Straumann’s Articles of Association states that no member of the Board of Directors may per-form more than 15 additional mandates (i.e. man-dates in the highest-level governing body of a legal entity required to be registered in the Commercial Register or in a corresponding foreign register) in commercial enterprises, of which no more than five may be in listed companies.

The following are exempt from the foregoing restric-tions:

– Mandates in enterprises that are controlled by the Company;

– Mandates in enterprises that are performed at the instruction of the Company; and

– Mandates in associations, organizations, and legal entities with a public or charitable purpose, and in foundations, trusts, and employee pension funds, provided that no member of the Board of Directors may perform more than ten such mandates.

Mandates in several legal entities under common con-trol or under the same economic authority shall be deemed one mandate.

OPERATING PRINCIPLES OF THE BOARD OF DIRECTORSThe Board of Directors meets for one-day meetings at least four times a year and as often as business re-quires. In 2014, the Board held six meetings and one telephone conference.

Members of the EMB generally participate in Board meetings. Dr Andreas Meier, General Counsel of the Group, acts as a Secretary to the Board of Directors.

The Board of Directors consults external experts where necessary when discussing specific topics.

The Board of Directors is responsible for the strategic management of the company, the supervision of the EMB and the financial control. It reviews the compa-ny’s objectives and identifies opportunities and risks. In addition, it decides on the appointment and/or dis-missal of members of the EMB. The Board of Directors also provides a mentoring service to the Executive Management. This aims to provide executives with an experienced sparring partner/coach and a sounding board for testing ideas and seeking qualified indepen-dent opinions.

The Board of Directors has the following specific tasks and duties:

– To approve the Group’s vision, mission, values and strategy

– To determine the principal organization and process-es of the Group

– To approve the strategic plan, the financial medium-term plan and the annual budget of the Group

– To approve the semi-annual financial statements – To approve the annual report, the compensation re-port and the annual financial statements and submit these to the annual general meeting


Corporate governance 115Corporate governance

Board of Directors

GILBERT ACHERMANNCHAIRMANSwiss, 1964Board member since 2009

DR H.C. THOMAS STRAUMANN VICE CHAIRMANSwiss, 1963Board member since 1990

DR SEBASTIAN BURCKHARDTSwiss, 1954Board member since 2002

ROLAND HESS Swiss, 1951Board member since 2010

ULRICH LOOSERSwiss, 1957Board member since 2010

DR BEAT LÜTHISwiss, 1962Board member since 2010

STEFAN MEISTERSwiss, 1965Board member since 2010

AUDIT COMMITTEE COMPENSATION COMMITTEE

Chair

Chair



STRAUMANN BOARD OF DIRECTORS – MATERIAL MEMBERSHIPS IN OTHER BOARDS

Member Commercial enterprise Charity/other Location Function

Gilbert Achermann Julius Bär Gruppe AG/ Bank Julius Bär & Co. AG

CH Board member

Siegfried Holding AG (until April 2014) CH Chairman

Vitra Holding AG/Vitrashop Holding AG and group companies

CH Chairman & Co-CEO

International Team for Implantology

CH Board member

Thomas Straumann Centervision AG CH Chairman

CSI-BHE AG CH Chairman

Grand Hotel Les Trois Rois CH Board member

Medartis Holding AG and Medartis group companies

CH Chairman

International Bone Research Association

CH Board member

Sebastian Burckhardt Amsler Tex AG CH Board member

Applied Chemicals International AG and ACI Group companies

CH Board member

Dolder AG CH Chairman

Foot Locker Switzerland Ltd. CH Board member

Le Grand Bellevue SA CH Board member

Immobiliengesellschaft zum Rheinfels AG CH Chairman

persona service AG and persona service group companies

CH Board member

Qgel SA CH Board member

Fondation Bénina CH Member, Board of trustees

Gehörlosen- und Sprachheilschule Riehen / GSR Wieland Stiftung / Stiftung Autismuszentrum

CH Vice Chairman, Board of trustees

Misrock-Stiftung CH Member of the Board of trustees

Roland Hess Societe Civile Immobilière Solivie F Board member



Member Commercial enterprise Charity/other Location Function

Ulrich Looser Bachofen Holding AG CH Chairman

BLR & Partners AG and BLR group companies

CH Board member

Econis AG CH Chairman

Kardex AG CH Board member

Spross Entsorgungs Holding AG and Spross group companies

CH Board member

Stellba AG CH Board member

Economiesuisse CH Board member

Schweizerische Studienstiftung CH Board member

Swiss American Chamber of Com-merce: ‘Doing Business in the US’

CH Chapter Chairman

Swiss National Fund CH Member, Board of trustees

University Hospital Balgrist, Zürich CH Member, Board of trustees

University of Zürich CH Board member

Beat Lüthi APACO AG CH Board member

CTC Analytics AG CH CEO & Board member

INFICON Holding AG CH Chairman

American Chamber of Commerce CH Panel member

Industrieverband Laufen- Thierstein-Dorneck-Birseck

CH Board member

Stiftung Behindertenwerk St. Jakob

CH Member, Board of trustees

Stefan Meister Ares Allergy Holdings Inc USA Board member

Campus Biotech Sarl CH Board member

Esaote SpA I Board member

Euromedic International Group BV NL Supervisory director

Northill Capital Holdings Limited GBJ Chairman

Stallergenes SA F Board member

Waypoint Group Holdings Limited GBJ Board member

American Chamber of Commerce CH Panel member

Center for Leadership & Values on Society, University of St. Gallen

CH Council member



– To prepare and approve the agenda of the annual general meeting and to implement its resolutions

– To appoint and dismiss the CEO and the members of the EMB

– To decide on the proposal of the Compensation Committee regarding the compensation payable to its Board members, the CEO and the EMB

– To supervise the EMB and approve important trans-actions.

The Board of Directors has a quorum if a majority of members is present. Valid resolutions require a major-ity of the votes cast. In the event of a tie, the chairman of the meeting has the decisive vote.

COMMITTEES OF THE BOARD OF DIRECTORSThe Board of Directors has an Audit Committee and a Compensation Committee, each consisting of not fewer than three Board members with relevant back-ground and experience. The Strategy Committee was dissolved in April 2014 and its duties were transferred either to the Audit Committee or to the full Board.

As of 2014, the members of the Compensation Com-mittee are elected by the General Meeting for a term of one year. In the event of a vacancy in the Compen-sation Committee, the Board of Directors appoints the replacement from among its own members for the

remaining term of office. The members of the Audit Committee are appointed by the Board of Directors. Both Committees constitute themselves and appoint their chairman from among their members.

The Board of Directors may establish further commit-tees or appoint individual members for specific tasks.

AUDIT COMMITTEE

Members: Roland Hess (Chair), Sebastian Burckhardt and Ulrich Looser

The Committee’s main tasks are to: – Assess the management of financial and other risks and the compliance with risk-related procedures and other relevant standards,

– Oversee the performance of the external auditors, assess the fees paid, and assure their independence,

– Oversee the activities of the internal audit function, – Review and discuss the financial statements with the CFO and with the external auditors and approve the quarterly statements for the first and third quarter of each financial year,

– Review and assess processes and assumptions used for the financial planning and forecasts cycles, and

– Review the funding, investing and management of liquid assets and propose profit distribution to the Board of Directors.

TIME (DAYS) SPENT BY DIRECTORS AT BOARD/COMMITTEE MEETINGS AND ON COMPANY RELATED MATTERS

2014 MEETINGS Achermann Straumann Hess Looser Lüthi Meister Burckhardt Ellenrieder1

Board2 7 7 6 7 7 6 7 1

Audit Committee 5 - 5 4 - - 5 1

Compensation Committee2

6 - - 6 6 6 - -

Strategy Committee3

1 1 1 1 - - - 1

Other 4 61 41 17 8 9 9 17 n/a

TOTAL DAYS 2014 80 49 29 26 22 21 29 3

1 Board member until 2014 AGM 2 incl. 1 telephone conference3 Dissolved as of April 20144 Meeting preparation & follow-up/conference calls/minutes/bilateral meetings, product training, etc.



COMPENSATION COMMITTEE

Members: Stefan Meister (Chair), Ulrich Looser, Dr Beat Lüthi

The Committee’s main tasks are to: – Prepare the compensation report and submit it to the Board of Directors for approval and submission to the annual general meeting,

– Review the compensation principles for any compen-sation paid to the Board of Directors, the CEO and the EMB and submit them to the Board of Directors for approval,

– Prepare proposals concerning the compensation of the Board of Directors, the CEO and the EMB and sub-mit them to the Board of Directors for approval and submission to the annual general meeting,

– Establish the targets and target amounts of the short- and long-term performance-based compensa-tion components and determine the amount payable under the scheme,

– Discuss the CEO’s proposals for appointments to the EMB with the CEO and submit them to the Board of Directors for approval,

– Assess candidates for the CEO role and submit a pro-posal to the Board of Directors for approval,

– Prepare agreements concerning payments to a new CEO or EMB member according to Article 4.3 – Arti-cles of Association and submit them to the Board of Directors for approval, and

– Review the composition of the Board of Directors and make proposals in view of a regular ongoing renewal of the Board of Directors, taking into consideration the representation of major shareholders, balanced skills, experience and diversity.

ASSIGNMENT OF RESPONSIBILITIES TO THE EXECUTIVE MANAGEMENT BOARD The Board of Directors has delegated responsibility for the operational management and sustainable devel-opment of the company to the CEO and the EMB. The CEO is responsible for the overall management of the Straumann Group and its operations. The CFO is re-sponsible for finance and information technology. The Heads of the Sales regions are responsible for the sales, local marketing activities and performance of the various country organizations as well as third party distributors, if any, in their respective regions. The Head of Customer Solutions & Educa-tion is responsible for Product Management,

Customer Marketing, Marketing Communication, Train-ing and Education Management. The Head of Instra-dent Management is responsible for the management and the international expansion of Straumann’s value brand platform. The Head of Research, Development & Operations is responsible for Corporate Logistics, Corporate Quality Management & Regulatory Affairs, Direct Spend Management, Digital R & D Services, Global Operations, Group Research & Development Operations-related Business Excellence, and Group Technical Services.

The Board of Directors has not delegated any man-agement tasks to companies or persons outside the Group.

INFORMATION AND CONTROL MECHANISMS FOR THE BOARD OF DIRECTORS AND THE EXECUTIVE MANAGEMENT MANAGEMENT INFORMATION SYSTEM

The Group’s Management Information System encom-passes management, business and financial reporting. The information is provided to the Executive Man- agement Board once a month and to the Board of Directors as a monthly summary and in detail on a quarterly basis.

Straumann has built up a state-of-the-art SAP enter-prise resource planning system, which now covers 97% of all business transactions of the Group’s fully consol-idated entities. The system links all major subsidiary companies and production sites directly with Group headquarters. This greatly reduces the potential for error or fraud, and it enables the Executive and Senior Management to monitor local processes and related figures directly, in detail and in real time.

INTERNAL CONTROL SYSTEM (ICS)

The Group’s Internal Control System is a key instru-ment for designing business processes, measuring progress towards financial goals and addressing potential financial issues before they occur. It also sup-ports the design of business processes in order to achieve the desired level of control in terms of effi-ciency and effectiveness.

The company’s approach is to ensure that internal con-trols are accurate, timely, robust, and receive appro-priate management attention in each respect.


ROLAND HESS DR BEAT LÜTHI STEFAN MEISTERULRICH LOOSER


121

Board of Directors

(From left to right)

ROLAND HESSFrom 2008 until 2012, Roland Hess served as senior advisor to the Executive Committee of the Board of Schindler Holding AG, Ebikon, and held positions on several Boards of Directors for com-panies within the Schindler Group. He joined Schindler in 1984 and rose through positions of increasing responsibility in control-ling, finance and regional management to become President of the Elevator and Escalator Division. From 1971 to 1984, he worked for Nestlé, initially in accounting, then as an international auditor, and finally as Chief Financial Officer of a Group company.

His career includes several years in North and Latin America, in addition to assignments in Europe. He holds a degree in business administration from Lucerne Business School and studied at Har-vard Business School near Boston.

Roland Hess has been a member of the Board of Directors of Straumann since 2010.

He has a long and distinguished track record in larger companies in more mature industries, combined with in-depth regional and functional experience. In addition, he complements the Board with expertise in compliance, risk management and standardized global procedures.

DR BEAT LÜTHIBeat Lüthi is CEO and co-owner of CTC Analytics AG, Zwingen, a globally active medium-sized Swiss company in the field of chro-matography automation. After obtaining his PhD in Engineering from the Swiss Federal Institute of Technology (ETH), Zurich, he began his career with Zellweger Uster AG, a leading manufacturer of quality control equipment in textile production. In 1990, he moved to Mettler-Toledo International Inc and rose to the posi-tion of General Manager of the Swiss affiliate. In 1994, he com-pleted an executive program at INSEAD and subsequently joined the Feintool Group in 1998. During his four-year tenure as CEO, the company went public and doubled in size. In 2003, he returned to Mettler-Toledo as CEO of the Laboratory Division. At the end of

121


122

2007, he joined CTC Analytics to lead and further develop the company as an entrepreneur. Beat Lüthi has been a member of the Board of Directors of Strau-mann since 2010. Beat Lüthi combines entrepreneurship and corporate experience in different industries, which make him a valuable contributor to strategic and operational matters. His scientific background together with his experience as a CEO and Board member in various industrial businesses are of further benefit to the Strau-mann Board.

ULRICH LOOSERUlrich Looser is a partner of BLR & Partners AG. From 2001 to 2009, he was with Accenture Ltd, where he became Chairman of its Swiss affiliate (2005) and Managing Director of the Products Business in Austria, Switzerland and Germany. Earlier, he spent six years as a partner at McKinsey & Company Ltd. Mr Looser gradu-ated in physics at the Swiss Federal Institute of Technology (ETH), Zurich, and in economics at the University of St. Gallen.

Ulrich Looser has been a member of the Board of Directors of Straumann since 2010.

His expertise in strategy, project and human capital management is of great value to the Straumann Board. He also adds in-depth consultancy and business development experience.

STEFAN MEISTERStefan Meister holds a degree in economics from Basel University. He started his career at Sandoz Pharma in 1991. From 1995 to 2009, he worked for Celesio AG, a leading pharmaceutical distri-bution and services company. From 1999, he was a member of the Celesio Management Board, where his responsibilities included finance and controlling, IT, human resources, and the pharmacy business. In 2010, he joined the Management Board of Franz Han-iel & Cie GmbH, a family-owned, international group of compa-nies holding – amongst others – a major stake in Metro AG and a majority stake in Celesio. At Haniel, he was responsible for the operating businesses CWS-boco and ELG as well as Group Finance, IT and Corporate Responsibility.

In September 2011, he took office as a member of the Board and Group Chief Operating Officer of Waypoint Capital in Geneva, the holding company for the Bertarelli Family Investments. With his thorough understanding of portfolio businesses and macro-level


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strategic leadership, he assumes operating leadership and drives the strategic development of the Bertarelli Family Investments in close cooperation with the Board and its Chairman.

Stefan Meister has been a member of the Board of Directors of Straumann since 2010.

He complements the Board with in-depth knowledge in the Life Sciences sector and from industries with comparable business models/challenges to those of Straumann. He also has a wealth of experience in corporate governance, mergers and acquisitions, finance and human resources management.

DR SEBASTIAN BURCKHARDTSebastian Burckhardt began his studies in the fields of economics and law and obtained his doctorate law degree at the University of Basel. He is a lawyer admitted to the Bar of Switzerland and a civil law notary in Basel. He was admitted to the New York Bar fol-lowing studies at New York University School of Law. He is a part-ner at the Vischer AG law firm in Basel.

Sebastian Burckhardt has been a member of the Board of Direc-tors of Straumann since 2002.

Straumann’s Board of Directors benefits from Dr Burckhardt’s expertise as an independent lawyer. He is a specialist in corporate and commercial law and in mergers, acquisitions, joint ventures, licensing, distribution and technology agreements. His knowl-edge extends well beyond legal matters and includes many years’ experience on corporate boards.

DR H.C. THOMAS STRAUMANNThomas Straumann’s skills in precision engineering were comple-mented by his studies at the Basel Management School and the Management and Commercial School of Baselland. In 1990, he was responsible for restructuring Institut Straumann AG and was CEO and Chairman of the Board of Directors until 1994. He was Chairman of the Board of Straumann Holding AG until 2002. In 2004, he was awarded an honorary doctorate by the University of Basel, Switzerland.

Thomas Straumann has been a Member of the Board of Directors of Straumann since 1990.

Thomas Straumann is the principal shareholder of Straumann Holding AG. He complements the Board with his understanding of the dental and medical device industries through personal


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management experience and various shareholdings. Having built up several companies, in which he is still involved, he is a true entrepreneur and has a diverse portfolio of interests, including not-for-profit activities.

GILBERT ACHERMANNGilbert Achermann has been a Member of the Board of Directors at Straumann since 2009 and was appointed Chairman in 2010. He joined Straumann in 1998 as Chief Financial Officer and was Chief Executive Officer from 2002 until 2010. Formerly, he served for more than ten years at UBS, where he worked in Corporate Finance in different locations. Gilbert Achermann holds an execu-tive masters’ degree from IMD in Lausanne and a bachelor’s degree from the HWV business school in St. Gallen.

Gilbert Achermann has been a main contributor to the Company’s past success. He stands for continuity, stability and credibility among the various stakeholders. The Board benefits from his extensive knowledge of the industry, his broad functional, regional and managerial expertise, and the experience he gains from directorships in other industries.


125

DR SEBASTIAN BURCKHARDT DR H.C. THOMAS STRAUMANN GILBERT ACHERMANN



To achieve this, dedicated control templates are used for each business process to address major risks. The templates are continuously improved and are being extended to include supporting process flows.

In addition, each entity (sales affiliate, production site or global function) has a designated, trained person or team that is ultimately accountable for the assess-ment undertaken and the decisions arising from it. Clear benefits of the Internal Control System include enhanced segregation of duties, increased control con-sciousness and higher awareness of potential risks and their consequences.

The ICS program is coordinated by Corporate Internal Audit, which meets with the external auditors on a regular basis to discuss the status of internal control issues and the status of remediation of control defi-ciencies. Internal controls are evaluated annually by the external auditors and by Internal Audit according to an agreed program.

INTERNAL AUDIT

Corporate Internal Audit at Straumann is an ‘indepen-dent’ and ‘objective’ assurance and consulting body, reporting directly to the CFO and to the Audit Commit-tee of the Board of Directors.

The main task of Corporate Internal Audit is to evalu-ate the effectiveness of the Group’s governance and risk management processes, to review and assess internal controls, to monitor compliance with external and internal policies and procedures, and to ensure the economical and efficient use of the company’s resources. In this role, Corporate Internal Audit pro-motes the exchange of best practices within the Straumann Group, proposes improvements, and moni-tors their implementation. In addition, Corporate Internal Audit pursues the development of the Group’s Internal Control System, which was established in 2008.

In 2014, Corporate Internal Audit performed eight audits at global and local levels, according to the audit program approved by the Audit Committee of the Board of Directors.

CORPORATE RISK MANAGEMENT

The Board of Directors is responsible for the overall

supervision of risk management and uses the Internal Audit function to this end. The Board has delegated the task of risk management to the Chief Risk Officer (CRO), who is also the CFO. Through its Audit Commit-tee, the Board assesses and discusses risks on a regular basis in consultation with the CRO and/or the relevant members of senior management (see ‘Risk Manage-ment’ on p.79 ff.).

EXECUTIVE MANAGEMENT BOARDThe CEO and, under his direction, the other EMB members are responsible for the Group’s overall busi-ness and affairs, and day-to-day management. The EMB is also responsible for implementation of strate-gic deci-sions and stakeholder management. The CEO reports to the Board regularly, and whenever extraor-dinary circumstances so require, in the course of the Group’s business. For changes in the EMB in 2014 please see p. 107.

SUPERVISORY/CONSULTING/POLITICAL FUNCTIONS In addition to the board memberships and representa-tions mentioned in the biographies (see p. 131 ff.), Marco Gadola is a member of the Board of Directors and Board of trustees of the independent academic network International Team for Implantology (ITI). Under a collaboration agreement, Straumann sup-ports the ITI with payments (see note 28 of the Audited Consolidated Financial Statements on p. 54 f.for details of payments in 2014). Alexander Ochsner is an advisor of the Essence & DM Dental Industry Investment Partnership, a private-equity fund ad-dressing the dental sector in China.

Other than these, no member of the EMB: – performed any activities in governing or supervisory bodies of significant foreign or domestic organiza-tions, institutions or foundations under private or public law,

– held any permanent management or consultancy function for significant domestic or foreign interest groups,

– held any official function or political post.

PERMITTED MANDATES OUTSIDE STRAUMANN

(PURSUENT TO ART. 12 OAEC)

Art. 4.4 of Straumann’s Articles of Association states that no member of the EMB may perform more than



five mandates (i.e. mandates in the highest level gov-erning body of a legal entity required to be registered in the Commercial Register or in a corresponding for-eign register) in commercial enterprises, of which no more than one may be in a listed company.

The following are exempt from the foregoing restric-tions:

– Mandates in enterprises that control the Company or are controlled by the same;

– Mandates in enterprises that are performed at the instruction of the Company; and

– Mandates in associations, organizations, and legal entities with a public or charitable purpose, and in foundations, trusts, and employee pension funds. No member of the Executive Management may perform more than three such mandates.

Mandates in several legal entities under common con-trol or under the same economic authority shall be deemed one mandate.

MANAGEMENT CONTRACTS The Board of Directors and the EMB have not dele-gated any managerial powers to persons or companies outside the Group.

INTERNAL MANAGEMENT DEVELOPMENT Straumann continued the Strategic Management Development System (SMD) program initiated in 2008 to attract, develop and deploy key talent. The Group’s goal is to fill at least 50% of key management positions with internal candidates and this goal was again met in 2014.

COMPENSATION, SHAREHOLDINGS AND LOANS The compensation and equity holdings as well as the basic principles and elements of the programs deter-mining them for the members of the Board of Direc-tors and the EMB and their related parties are dis-closed in the Compensation Report on p. 138 ff and also in the audited financial statements on p. F 76 f.

AUDITORSThe Shareholders’ General Meeting elects and appoints the Group’s external auditors on an annual basis. In April 2014, Ernst & Young AG (EY), Basel, was elected as new auditor of Straumann Holding AG after

PricewaterhouseCoopers had served for nine consecu-tive years as the Group’s auditor. The auditor in charge is Daniel Zaugg, Swiss Certified Public Accountant, who took over the mandate in 2014.

The Board of Directors supervises the external audi-tors through the Audit Committee, which met five times in 2014. The external auditors participated in three of these meetings, discussing the reports on the 2013 Audit Plan and the half-year review. Further details on the instruments which assist the Board of Directors in obtaining information on the activities of the external auditors can be found on p. 119 ff.

The worldwide fees paid to the auditors 1 were as follows:

(in CHF 1 000) 31 Dec 2014 31 Dec 2013

Total audit fees 839 974

Tax consultancy 0 1 093

Legal 0 0

Transaction services 336 0

Other services 0 30

Total non-audit fees 336 1 123

TOTAL 1 175 2 097

1 PWC until April 2014; EY from April 2014

INFORMATION POLICY Straumann is committed to a policy of open, transpar-ent and continuous information. In accordance with the rules of the SIX Swiss Exchange, Straumann publishes detailed sales figures on a quarterly basis as well as annual and half-yearly reports. Detailed information is provided at the Shareholders’ General Meeting. A sum-mary of the meeting and the minutes are published on the company’s website. The summary is also distributed in the form of a media release. Where necessary or appropriate, the company also publishes additional information on significant events. The CEO, CFO, the Head of Investor Relations and the Head of Corporate Communication & Public Affairs are responsible for communication with investors and representatives of the financial community, media and other stakeholders. In addition to personal contacts, discussions, and pre-sentations in Europe and North America, Straumann held four quarterly financial results conferences for the media and analysts in 2014, two of which were


128 Corporate Governance Corporate governance

Executive Management Board

128

CEO

MARCO GADOLA

SALES NORTH AMERICA

ANDY MOLNAR

SALES WESTERN EUROPE

GUILLAUME DANIELLOT

CFO

DR PETER HACKEL

CUSTOMER SOLUTIONS AND EDUCATION

FRANK HEMM


Corporate governance Corporate Governance Corporate governance 129

SALES CENTRAL EUROPE

WOLFGANG BECKER

SALES ASIA/PACIFIC

DR ALEXANDER OCHSNER

SALES LATIN AMERICA

MARCO GADOLA

RESEARCH, DEVELOPMENT & OPERATIONS

DR GERHARD BAUER

INSTRADENT MANAGEMENT

MARCO GADOLA A.I.

CORPORATE SERVICES

MARCO GADOLA


130

FRANK HEMM DR ALEXANDER OCHSNER GUILLAUME DANIELLOTANDY MOLNAR


131

Executive Management Board(From left to right)

FRANK HEMMFrank Hemm holds a Master’s degree in Economics from the University of St. Gallen and a Master’s in Business Administration from Kellogg Graduate School of Management in the USA. His business career began in management consulting with Andersen Consulting and McKinsey, focusing on business process re-engineering and strategic management consulting.

He joined Straumann in 2004 and was initially responsible for Corporate Business Development & Licensing. He was appointed Head of Sales, Western Europe in 2007 and became a member of the Corporate Man-agement Group. A year later, he was given responsibility for the Asia/Pacific Region as Head of Sales based in Singapore, where he established and built up Straumann’s regional headquarters. In addition to leading the integration and turnaround of the acquired distributors in Japan and Korea, he also expanded Straumann’s presence in China.

In 2012, Mr Hemm was appointed to the Executive Management Board as Head of EMEA and LATAM, and he moved into his current role in 2013.

DR ALEXANDER OCHSNERAlexander Ochsner is a seasoned executive with extensive international experience in the medical device industry, having spent more than a decade in senior managerial roles at the top of the dental implant indus-try in regional leadership positions.

Before moving to the dental industry, he held managerial positions in marketing/sales at Medtronic and Medela, where he gained experience of the medical device market in the Far East as Area Sales Manager & Executive Director of the Japanese subsidiary. From 2002 to 2008, he worked for Zimmer Dental, where he was Vice President Europe & Asia/ Pacific and a member of the Divisional Executive Team.

Alexander Ochsner joined Straumann in September 2012 from Nobel Biocare, where he was Senior Vice President & General Manager EMEA and member of the Executive Committee.

Dr Ochsner gained his PhD at the Swiss Federal Institute of Technology (ETH) in Zurich, where he also attained an MSc in natural sciences. He has held his current position since 2012.


132

ANDY MOLNARAndy Molnar has a proven track record in the dental and healthcare industries, having held senior managerial roles in global business sales and country management.

Under his leadership as General Manager of Straumann UK from 2006 – 2009, the company rose to national market leadership in implant dentistry. In 2009, Mr Molnar moved to Group headquarters as Senior Vice President Global Regenerative Sales and member of the Corporate Management Group.

He joined Straumann in 2005 from SIDHIL, a UK medical equipment company, where he was Sales and Marketing Director. However, the bulk of his career – 11 years – was spent in sales and management roles at GlaxoSmithKline Pharmaceuticals.

Andy Molnar holds a Bachelor of Science degree in Physiology and Biochemistry from Reading University and an MBA from Bradford University. He has been in his current role since 2012.

GUILLAUME DANIELLOTHaving obtained a Bachelor’s degree in Physics from the University of Dijon and a Master’s degree in Marketing from ESCEM in Tours, Guillaume Daniellot completed his studies with a Master’s in Busi-ness Administration at the ESC European School of Management in Paris.

His professional career began in hospital product management – ini-tially at Coloplast and then at B. Braun, as an international business-unit manager. He switched to the dental industry in 2001, joining Dentsply France, where he became Sales & Marketing Director.

Mr Daniellot joined Straumann in 2007 as Managing Director of Straumann France. Two years later, he transferred to Group Head-quarters to become Head of Global Sales Digital Dentistry. Shortly afterwards he took over responsibility for Straumann’s Prosthetic Laboratory Business Group, including global management of sales, marketing, product development, training and education. In both these roles he was a member of the Corporate Management Group. He was appointed to his current position in 2013.

WOLFGANG BECKERWolfgang Becker holds a number of business school diplomas includ-ing that of the St. Gallen Management Center. He began his profes-sional career at Straumann in 1986 and held a series of managerial positions of increasing responsibility in the company’s German subsidiary, becoming Head of Human Resources in 1991, Head of


133

Marketing in 2000, and General Manager of Straumann Germany in 2001. He served on Straumann’s Executive Committee as Head of Sales Europe from 2005 to 2006. Since then, he has been responsible for Straumann’s business in Central and Eastern Europe, and headed the Group’s distributor business from 2007 to 2008.

Wolfgang Becker rejoined the Group’s Executive Management Board in his current role in 2013.

DR GERHARD BAUERGerhard Bauer is a seasoned executive with a broad international background in Global Operations. He has spent more than 30 years in the pharmaceutical and medical device industry in various leader-ship positions, where he has acquired considerable experience in both pharmaceutical products and medical devices.

Prior to joining Straumann in 2010, Dr Bauer held managerial posi-tions at Nextpharma, a specialist company in the biotech industry, and Bausch & Lomb, a global leader in eye-care products. From 1992 to 2008, his career at Bausch & Lomb was distinguished by increas-ing responsibility and, in 2006, he was appointed Head of Global Operations & Engineering and Member of the Executive Team. From 1984 to 1992, he worked for Ciba Vision, a subsidiary of Novartis. He began his career in production at GlaxoSmithKline in 1983.

Dr Bauer received his PhD from the Institute of Pharmaceutics at the Ludwig-Maximilians-University in Munich where he also obtained his MSc in Pharmaceutics. Additionally, he received an advanced degree in Pharmaceutical Technology from the Bavarian Chamber of Pharmacists.

DR PETER HACKELPeter Hackel rejoined Straumann in 2014, after a 3-year spell at Oerlikon Industrial Group, where he was CFO of the global segment Oerlikon Drive Systems. He first joined Straumann in 2004 in a Proj-ect Management and Business Development role and rose to be-come Head of Group Controlling and Member of the Corporate Man-agement Group. Prior to Straumann, he spent three years at Geistlich Biomaterials, as Director of Marketing & Sales Orthopaedics, and two years at McKinsey & Company as a Consultant.

Peter Hackel offers a valuable combination of financial and business expertise together with an analytical scientific background. He obtained both his Master’s degree and PhD in Biochemistry and Molecular Biology from the Swiss Federal Institute of Technology (ETH) in Zurich and complemented his education with studies in Business Administration at the University of Hagen in Germany.


134

THOMAS DRESSENDÖRFERThomas Dressendörfer has a wide cultural background and broad international professional experience. Having obtained a Master’s in Business Administration and Economics from the University of Erlan-gen-Nuremberg, his career in finance has taken him through the healthcare and consumer products industries, as well as the person-nel services, market intelligence, and mechanical engineering sectors in various countries. He rose through various senior positions includ-ing the role of CFO of major business units/regions in international companies such as Randstad, The Nielsen Company, Procter&Gamble, and Baumüller.

Thomas Dressendörfer was Chief Financial Officer and a member of the Executive Committee at Uster Technologies Ltd for three years prior to joining Straumann in November 2011. He was Chief Financial Officer from the beginning of 2012 to November 2014, when he has taken on an Executive advisory role until he leaves the company in mid 2015.

MARCO GADOLAMarco Gadola has a strong executive track record in a broad range of global businesses. He rejoined Straumann in 2013 as CEO, having previ-ously served as Chief Financial Officer and Executive Vice President Operations from 2006 to 2008, when he left to pursue a career devel-opment opportunity at Panalpina, a world leader in supply chain man-agement. Having started as Panalpina’s Chief Financial Officer, he became Regional CEO Asia/Pacific in 2012, with overall responsibility for the regional business.

Prior to his first spell at Straumann, he spent five years at Hero, the Swiss-based international food group, where he was also CFO and responsible for IT and operations. Previously, he spent nine years at the international construction tool manufacturer Hilti, where he held a number of senior commercial/sales and finance-related posi-tions in various countries. Before that, he worked for Sandoz Interna-tional Ltd, as Audit Manager, and for Swiss Bank Corporation, Basel, in Corporate Finance.

Mr Gadola graduated from Basel University in business administration and economics. He also completed various programs at the London School of Economics and at IMD in Lausanne.

Marco Gadola has served on the Board of Directors of Calida, the Swiss textiles group, since 2011.


WOLFGANG BECKER DR GERHARD BAUER MARCO GADOLATHOMAS DRESSENDÖRFERDR PETER HACKEL



teleconferences. The average participation at each event was more than 50 attendants on-site plus another 50 remote by conference call. The conferences were transmitted live via audio webcast and/or tradi-tional conference call. In addition, Straumann’s top management attended two sector-specific and four general equity conferences. Research analysts from 19 banks/national institutions cover developments at the Straumann Group and are listed on p. 164 of this report as well as on the ‘Investors’ section of the Strau-mann corporate website.

Apart from this, Straumann frequently publishes media releases and briefing documents, which are archived and available from the company’s website (www.straumann.com). The company offers a media release subscription service via its website and takes care to ensure that investor-relevant media releases are circulated broadly and in a timely manner accord-ing to the rules of the SIX Swiss Exchange and with due regard for the principles of fair disclosure. The company does not update its releases, reports and presentations, which means that the information they contain is only valid at the time of publication. Straumann advises against relying on past publica-tions for current information.

ANNUAL REPORT & COMPENSATION REPORT Straumann’s Annual Report is a key instrument for communicating with various stakeholder groups. It is published in English (with a summary in German) in hard copy (with the Financial Report as separate print) and electronically on the company’s website. The Group also issues a Compensation Report as part of the Annual Report. The Annual Report can be down-loaded from the company’s website. The printed version of the full Annual Report can be ordered from: [email protected].

MEDIA USED FOR REPORTING PURPOSES The Company’s website is www.straumann.com. The Company’s journal of record is the ‘Schweizerisches Handelsamtsblatt’ (‘SHAB’ – Swiss Official Gazette of Commerce). Further information requests should be addressed to:

Head of Investor Relations:[email protected]. +41 61 965 11 11

Head of Corporate Communication: [email protected]. +41 61 965 11 11

CALENDAR Straumann’s calendar of planned reporting dates and investor relations events in 2015 can be found on p. 163 and is also published and updated on the com-pany’s website.

REFERENCES / FOOTNOTES1 www.straumann.com/articles2 www.six-swiss-exchange.com/news/notifications/major_

shareholders_en.html 3 Nimbus AG, Ziegelbrückstrasse 82, P.O. Box, CH-8866 Ziegelbrücke,

Switzerland4 www.straumann.com > ‘Investors’ > ‘Corporate Governance’ >

‘Annual General Meeting’

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08_00_STR_AR2014_Corporate_Governance_6_en.indd 137 09.03.2015 17:41:28

138

Compensation reportContents

139 Foreword

140 Introduction

140 Reporting standards

140 Responsibility for compensation

141 Compensation principles

141 Total compensation and compensation elements

148 Regulations relating to compensation

150 Approval of compensation

154 Report of the statutory auditor

Compensation report


Compensation report 139

FOREWORDFOCUS OF THE COMPENSATION COMMITTEE IN 2014The Compensation Committee met five times in 2014 and covered the topics in the schedule on page 141, focussing on the review of the company’s compensa-tion principles and ensuring their continued appropri-ateness. These principles are anchored in our belief that a compensation system based on value creation drives and encourages sustainable performance, fos-ters entrepreneurship and creates an environment that supports loyalty – thus combining the interests of shareholders, management and employees. In addi-tion, the Compensation Committee closely followed initiatives concerning talent management, succession planning and Straumann’s ‘Cultural Journey’ to become a high performance organization (p. 88).

MEASURES TO MITIGATE THE CURRENCY IMPACTDue to the sharp appreciation of the Swiss Franc against most other currencies, Straumann has taken a number of measures to reduce its cost base in order to protect its business and jobs going forward. These were communicated at the beginning of February 2015 and include proposed reductions in the overall compensation for employees based in Switzerland. The reductions range from approximately 5–26%, depending on the level of seniority. In the case of the CEO, the overall reduction is 35%. The Board of Direc-tors has agreed to a 28% reduction of their compensa-tion compared with budget.

The proposed changes are precautionary measures and in some cases are still subject to the formal agree-ment of the respective employees.

The Compensation Committee has been closely involved in compiling these measures, which reflect Straumann’s principle of addressing challenges in an entrepreneurial and forward-looking manner.

PERFORMANCE APPRAISAL 2014 AND IMPACT ON COMPENSATIONHaving adapted our compensation system in recent years to keep in line with best-practice benchmarks in our industry, no significant changes were made in 2014. In addition, given the market environment and cost pressures, no general salary increases were

granted. Furthermore, there were no increases in the salary or compensation of the CEO.

With regard to 2014 performance, Straumann increased its turnover organically by 6% while the global market increased in the low to mid single-digit range (see p. 48). The Group thus attained its goal of growing at least in line with the market. Having reor-ganized significantly in 2013, a major financial target was to restore profitability. With an EBIT margin of 21% in 2014, this target was achieved mainly as a result of top-line growth coupled with efficiency gains and cost reductions. In addition, progress was made with regard to each of the key strategic priorities. The relevant milestones for the Group’s key initiatives were thus met and the objective for Economic Profit was exceeded.

With respect to the long-term incentive plan, the tar-get of Total Shareholder Return of 10% per annum over a 3-year period (TSR) was once again exceeded.

LOOKING AHEAD In 2015, the Compensation Committee will review the compensation system regularly and will continue its efforts to ensure that Straumann maintains its com-petitiveness as an employer. We shall also closely monitor the effect of the aforementioned measures to mitigate the currency impact.

We would like to thank the shareholders and the Board for their confidence and the management team for its constructive approach to the intense dialogue in 2014 and 2015.

Stefan MeisterChairman of the Compensation Committee

Compensation report


140 Compensation report

INTRODUCTIONThis report provides an overview of Straumann’s com-pensation principles and practices. It provides infor-mation on the remuneration of the general staff, man-agement, Executives and the Board of Directors in 2014. It explains the equity participation programs and discloses the equity participations of Directors and Executives in the company.

Straumann’s present compensation system has been in place since 2011, when the respective committee of the Board of Directors conducted a comprehensive review of the company’s overall approach to reward-ing employees, including remuneration of the Board. The system was published in our 2011, 2012 and 2013 Compensation Reports, which were approved in consultative votes by the Shareholder’s Annual Gen-eral Meeting.

The compensation system is built on principles de-signed to:

– Align the interests of the leadership team and em-ployees with those of our shareholders

– Support our attractiveness as a global employer, help-ing us to recruit and retain an engaged workforce

– Reward individuals according to clear targets – Encourage entrepreneurism, above-market perfor-mance, accountability and value creation.

In 2014, we reviewed our system against industry benchmarks and believe that it is balanced and in line with current best practices.

REPORTING STANDARDSThis report is in line with the Swiss Code of Best Prac-tice for Corporate Governance, the IFRS accounting standards and Swiss law. The remuneration paid to Directors and Executives is presented in the audited table on p. 152.

RESPONSIBILITY FOR COMPENSATIONThe Board of Directors nominates the members of the Compensation Committee for election by the AGM. Straumann’s Compensation Committee is entrusted with the design of the compensation sys-tem that applies to the Directors and the executive management. It reviews the compensation principles and programs annually and benchmarks the remu-neration paid by the company against market and

other related criteria. The Compensation Committee reports to the Board of Directors on compensation practices as well as on remuneration of the Executive Management Board at least once a year and proposes changes when necessary. Further information on the duties of the Compensation Committee can be found on p. 119 in the section on Corporate Governance.

Recipient Compensation recommended by

Compensation decided by

Chairman of the Board

Compensation Committee/Board of Directors

2014 AGM approved total compensation for BoD for period between the 2014 and 2015 AGMsBoard

Members Compensation Committee/Board of Directors

CEO Chairman of the Board/Compensation Committee/Board of Directors

2014 AGM approved- Total fixed compensa-tion for Executive Man-agement Board 01.04.14–31.03.15- Max LTI for Executive Management Board business year 2014

2015 AGM to approve:- STI payout for Ex-ecutive Management Board for the 2014 business year

Executive Management

CEO

Senior Management

Executive Management Board

CEO

Management and staff

Line Management Executive Management Board

At the 2015 AGM, the shareholders will be asked to approve:

– The short-term incentive (STI) for the 2014 business year for the executive management

– The total compensation of the Board of Directors for the period between the AGM’s in 2015 and 2016

– The total fixed compensation of the executive man-agement for 1 April 2015–31 March 2016.

In 2014, the Committee met five times with all its members present, and the Chairman of the Board and CEO participated in all meetings except for discussions concerning the evaluation and determination of their own compensation. The calendar and general agenda of the Compensation Committee is presented in the table on p. 118.


Compensation report 141Compensation report

COMPENSATION PRINCIPLESThe compensation principles outlined below are valid for all Straumann employees including members of the Executive Management Board but not members of the Board of Directors unless stated.

VALUE CREATION DRIVES COMPENSATIONWe believe that a compensation system based on value creation encourages sustainable performance, loyalty and entrepreneurship and is thus in the inter-ests of management, employees and shareholders. We are committed to compensating our staff, man-agement and Directors in a way that is competitive and rewards sustainable long-term performance as well as current successes.

It is Straumann’s view that the company’s success depends largely on the quality and engagement of its employees. A modern compensation system is an important instrument for attracting, retaining and motivating talented people. Straumann’s compensa-tion system takes these factors into account in that it:

– Offers competitive salaries – Fosters a high-performance culture that differenti-ates and rewards above-average individual perfor-mance, both in the short and long term

– Links variable long-term compensation to value gen-erated by the company over the long term based on shareholder expectations

– Is benchmarked with other companies in the industry

– Provides employees with benefits based on good practices and regulations in local markets, and

– Is periodically reviewed by the Compensation Com-mittee.

COMPREHENSIVE BENCHMARKINGStraumann’s policy is to pay employees, executives and Directors a base compensation that is close to the median of comparable medical device companies in the respective local market. The variable pay is set with the potential to move overall compensation toward the upper quartile for outstanding performance.

Benchmark reviews for the Executive Management are conducted by external, independent specialists and include market analyses by industry specialists. Bespoke benchmarks include a peer group of comparable compa-nies in various industries selected according to the fol-lowing criteria:

– Comparable scope and business complexity – Comparable geographic footprint – Companies with whom we compete for talent.

ETHICAL, FAIR STANDARDSWe are committed to fair and equal treatment of all our employees and seek to be in full compliance with Inter-national Labor Standards. Compensation is not influ-enced by gender. Local minimum wage regulations have no bearing on our compensation policy, as our compen-sation clearly surpasses them.

TOTAL COMPENSATION AND COMPENSATION ELEMENTS Overall, Straumann spent CHF 287 million on compen-sation, benefits and social costs in 2014, correspond-ing to an average of CHF 120 000 per employee.

In 2014, the compensation of employees and manag-ers comprised fixed as well as short- and long-term variable components, the mix of which was defined by

TOPICS AND SCHEDULE OF THE COMPENSATION COMMITTEE MEETINGS

Month Topic

January Review prior year performance and target setting for CEO and Executive Management Board; determination of overall target framework (Economic Profit, financial targets, budget)

February Leadership development; review compensation/approve the Compensation Report; prepare for AGM; review human resources policies and Compensation Committee charter

April AGM follow-up (Corporate Governance, improvements etc.)

September Review Compensation Report timetable; review impact of new regulations; set agenda and calendar; review composition and compensation of the Board of Directors; review remuneration system; review and benchmark CEO and EMB compensation; review draft Compensation Report; pension fund update



element, emphasizing long-term, sustainable deci-sion-making and staff retention. FIXED COMPONENTSIn 2014, the fixed compensation elements included the following components:

Executive management

Senior management

Management

General staff

FIXED

Long termShort term

Strategic impactResponsibility

SkillsRole

Location

Base salaryPensionBenefits

Cash bonus

PSUs

DRIVERS Local practices & regulations

Company function Individual performances

Share price performance

Competitiveness Performance Value creation, talent retention

VARIABLE

TOTAL COMPENSATION AVERAGE PER EMPLOYEE

0

15000

30000

45000

60000

75000

90000

105000

120000

2014201320122011

role, profile, location and strategic impact. For Senior Management, greater emphasis is placed on the long-term variable component, in line with our strategic goal of promoting ownership.The compensation mix for executive and senior man-agement included a long-term variable remuneration

COMPENSATION MIX

PAY MIX CORRIDOR (AT-TARGET ACHIEVEMENT)

¢ Base salary ¢ Short-term incentive ¢ Long-term incentive

Executive Management 135–45% 30–35% 30–35%

60–75% 15–25%

75–90% 10–25%

90–100% 0–10%

10–15%

Senior Management

Other Management

General Staff

1 At target, the variable compensation (incl. STI and LTI) for the CEO will amount to 190% of base salary and in average to 104% of base salary for the remaining EMB members.


Compensation report Compensation report 143

– Base Salary – Pension plans (depending on local practices and regulations)

– Other benefits (depending on local practices and regulations).

BASE SALARY

Straumann employees receive a fixed salary based on: – Job profile – Experience and skills – External comparisons – Place of work and local regulations – Strategic importance of the position.

SALARY PROGRESSION 2014-2015

As explained, there were no general salary increases in 2014. Where necessary, salaries were adjusted to bench-marks and for staff who took on new roles and/or

increased responsibility. For 2015, the Board of Directors foresees increases that are linked to structural adjust-ments only. In countries with high inflation, the local management teams may grant general merit increases. These approaches will be implemented carefully and with due regard to local developments as well as our ambition to remain a competitive employer.

PENSION PLANS

Internal analyses carried out in recent years showed that Straumann and its subsidiaries fulfill and, in some respects, exceed local legal requirements. In most cases, pension obligations are fully funded. Where this is not the case, liabilities are reported in the Annual Report fol-lowing actuarial rules.

Further information on pension plans is provided in note 20 to the audited consolidated financial state-

ELEMENTS OF TOTAL REMUNERATION

Element Type Description

Base salary Fixed cash Fixed remuneration, determined by scope and complexity of the role

Generally paid within an 80–120 percent range of relevant market median

Variable pay Short-term incentives (STI – one year)

Performance cash For executives, senior managers and a broader group of employees, paid annually

Target achievement extends from 0–200%.

Performance measured against business results and accomplishment of individual and financial targets

Awards driven by both business and individual performance

Long-term incentives (LTI – three years)

Performance Share Units (PSUs)

For a defined group of executives and senior managers.

Target achievement extends from 0–200%.

The grants made prior to 31.12.2011 vest in three installments (after 1, 2 and 3 years) and vesting is determined based on the Group’s total shareholder return (TSR) and return on sharehold-ers’ equity (ROE) achievements over three calendar years prior to vesting.

Since 01.01.2012, PSUs with a 3-year vesting period are granted and shares are allocated based on a total shareholder return of 10% p.a. over a 3-year period; see p. 146.

Employee benefits Fixed benefits Employee benefits are provided in line with local market practices

Pension plans are being de-risked in line with Group guidelines

Benefits are positioned towards relevant market median

SUMMARY OF OVERALL COMPENSATION



ments on p. F48 ff. Information on pension fund risks is also provided in the Risk Analysis on p. 81.

SWITZERLAND

Straumann administers two defined contribution pension plans in Switzerland, which together make up the occupational benefits at Straumann. The basic insurance plan offers protection against the financial consequences of old age, death and dis-ability to all employees of Institut Straumann AG and Straumann Villeret SA. There is additional sup-plementary insurance for selected management whose proportion of variable compensation is high. Straumann employees in Switzerland and the Chairman of the Board of Directors are eligible for this pension scheme.

EUROPE

In other European countries, Straumann offers retirement insurance according to local practices. According to IFRS accounting standards, the major-ity of European pension plans are considered ‘funded’ or ‘unfunded’ defined contribution plans.

USA

A 401k retirement plan is provided to all Straumann employees in the USA over 21 years of age to enable them to save for retirement. The 401k plan is a defined contribution plan whereby (a) the employee has the option of making deferral elections from his/her pay on a pre-tax basis and (b) Straumann USA may make matching contributions should the employee elect to make deferral elections. The plan is a tax-qualified plan under the Employee Retire-ment Income Security Act (ERISA).

In addition to the 401k, Straumann USA has a Sup-plemental Executive Retirement Plan (SERP) for a select management group. The purpose of this plan is to provide eligible employees with defined employer contributions and the opportunity to elect to defer receipt of certain compensation that would otherwise be payable to them in cash. The plan is intended to be a non-qualified, unfunded, deferred compensation arrangement for purposes of Title I of ERISA and is intended to comply with Section 409A of the Internal Revenue Code. According to IFRS, SERP is treated as a defined con-tribution plan.

OTHER BENEFITS

Straumann’s benefit programs are an integral part of the total compensation and are designed to enable the company to compete for and retain employees and managers and retain them. Benefits are structured to support our overall business strategy and are aligned with local practices and legislation. Examples of bene-fits include season tickets for public transport, lunch vouchers, the use of company cars, mobile phones, concessions on Straumann products, etc.

EMPLOYEE SHARE PARTICIPATION PLAN

Employees in Switzerland have the opportunity to pur-chase Straumann shares for 75% of the average share price over a period of seven trading days beginning on the ex-dividend day (see table on p. 143).

This plan allows employees to buy a minimum of 10 and a maximum of 100 to 1000 shares, depending on hierarchical level. The shares are subject to a two-year vesting period. They are dividend-bearing from the day of purchase.

EMPLOYEE SHARE PLANS

Employees participating

Shares issued

Discount share price at issue

End of lock-up period

2014 107 11 495 CHF 138 April 2016

2013 44 2 405 CHF 88 April 2015

2012 138 16 564 CHF 109 April 2014

The Employee Share Participation Plan was not offered to the Executive and Senior Management in 2013 as one of the cost reduction measures to mitigate redun-dancies. It was however reinstated in 2014. The shares required for these plans were held by the Group as Treasury shares.

The members of the Board of Directors are not eligible for this program.

VARIABLE COMPONENTSIn 2014, the variable compensation components included one or more of the following:

– Performance-related short-term incentives – Long-term incentives (Performance Share Plan)



SHORT-TERM INCENTIVE (STI)

The short-term incentive scheme (see table on page 146) is tied directly to profit generated by the Group and to individual performance. For some areas, additional spe-cific financial and/or individual targets are defined.

Hence, the payout is based on a combination of the following:

– Company performance – Specific financial target achievement – Individual performance

COMPANY PERFORMANCE

Economic profit (EP) has been one of the key perfor-mance indicators in Straumann’s short-term incentive scheme. The Board of Directors in consultation with executive management has set the absolute target for EP in Swiss francs annually, prior to the respective per-formance cycle, based on medium-term business plans and the defined budget for the year of performance. The economic profit pay-out-range has been between 0 and 200%.

The main advantage of the economic profit concept is that it goes beyond revenue growth and profitability increase and takes into account the resources used to achieve these increases and the resulting additional capital costs. Economic profit is thus calculated by deducting a capital charge from the net operating profit after tax (NOPAT). The Board of Directors may exclude extraordinary elements from the calculation of the EP.

The capital charge represents the cost of capital calcu-lated on the basis of an average equity return expected by investors. This scheme (see illustration above) has been used to calculate Straumann’s economic profit, which builds the basis for our bonus calculation model in 2014.

Owing to the volatility and uncertainty caused by the recent currency developments, the Board of Directors has considered it necessary to change the major per-formance indicator for short-term incentives for 2015 from economic profit (EP) target to an operating-profit

VALUE-BASED MANAGEMENT – 2014 ECONOMIC PROFIT (VALUE ADDED)

Chart showing the various components of economoc profit (value added) in 2014. NOPAT = net operating profit after taxes; COGS = cost of goods sold; OPEX = operating expenses; EBIT = earnings before interest and taxes.

NET REVENUE CHF 710m

TAXESCHF (20)m

COGSCHF (152)m

EBITCHF 148m

NOPATCHF 162m

CAPITAL CHARGECHF (48)m

OPEXCHF (413)m

FINANCIAL RESULTCHF 33m

CASHCHF 120m

NET WORKING CAPITALCHF 65m

NON-CURRENT ASSETSCHF 420m

COST OF CAPITAL (WACC)8%

CAPITALCHF 605m

ECONOMIC PROFIT CHF 114m



target. This is because EBIT is currently considered externally to be the key performance measure and thus the main driver of the company’s valuation. When the situation stabilizes, we will revert to EP.

SPECIFIC FINANCIAL TARGETS

Specific financial targets are used for the following organizational units: Sales Regions, Customer Solu-tions & Education, Instradent Management, and Research, Development & Operations. The targets are derived from annual budgets and are set by the CEO together with the member of the Executive Management Board responsible for the organiza-tional unit. In 2014 for example the achievement of improvements to ‘contribution margin’ and to ‘stra-tegic key sales initiatives’ were set as specific finan-cial targets for the Sales Regions whilst ‘improve-ments to cost of goods sold’ was defined as a specific financial target for Research, Develop-ment & Operations.

INDIVIDUAL PERFORMANCE

Individual performance is measured by the achieve-ment of targets established with the line manager at the beginning of the year in the performance man-agement process. These may involve a combination of specific project targets, competency or skills devel-opment and specific contribution to team or organi-zational unit targets. A global performance manage-ment system supervised by Human Resources ensures that the objectives are defined in line with the company’s strategic goals and their achievement is assessed continuously during the year.

WEIGHTING OF PERFORMANCE CRITERIA

The weighting of the different targets depends on the role and responsibilities of the individual (see table on left). Overall, there is a stronger focus on individual targets as determined by management, in order to encourage and reward above-average individual per-formance appropriately.

MEASUREMENT OF ACHIEVEMENTCOMPANY PERFORMANCE AND FINANCIAL TARGETS

The measurement scale for the achievement of finan-cial targets (company performance and financial tar-gets) extends from 0% to a maximum of 200% and is based on a line joining three points as explained in the illustration (see table on left).

INDIVIDUAL TARGETS

For individual target achievement, the assessment scale extends from 0% to 150%. It is based on descrip-tors with corresponding percentage ranges:

– Exceeds expectations – Meets expectations – Partially meets expectations

LONG-TERM INCENTIVES (LTI)

The long-term incentive plan is offered to executive and senior management and other key employees depending on role, responsibility, location, strategic impact and market practice. Participation in the long-term incentive plan is determined by the Board of Directors, who are not eligible for this program.

PERFORMANCE SHARE PLAN

Straumann’s Performance Share Plan (PSP) was intro-duced in 2012 and is designed to:

– Offer an attractive variable compensation element related to total shareholder return (TSR)

– Increase shareholdings of key employees, and – Align participants’ interests with those of the shareholders.

GRANT

Participants in the plan are granted Performance Share Units (PSUs), entitling them to receive shares after a three-year vesting period. PSUs are granted once a year after the AGM of the shareholders. No cash investment is required from the participants. The number of PSUs granted is equal to the participant’s long-term incentive value divided by the fair value of

SHORT-TERM INCENTIVE TARGET WEIGHTING

Management Level Company Financial Individual

Chief Executive Officer 80% 20%

Executive Vice President 40–80% 0–40% 20–50%

Senior Vice President 20–40% 0–60% 20–60%

Vice President 20–40% 0–60% 20–60%

Management (Director,Senior Manager, Manager)

20–30% 0–60% 20–70%

Staff 0–20% 0% 80–100%

This table shows the weighting of the different types of perfor-mance measures according to the level of the employee and depending on the organizational unit the employee is working in.



one PSU at the grant date. The long-term incentive target value is a percentage of the total target com-pensation, which is determined in accordance with the participant’s role in the organization.

ALLOCATION OF SHARES

At the end of the performance period, the PSUs are irrevocably vested and converted into shares. They are forfeited if the individual leaves the company before they vest.

The number of shares allocated per PSU depends on the achievement of an absolute total shareholder return (TSR) target, which is determined by the Board of Directors and is currently set at 10% per annum for the 3-year performance period. Performance against the TSR target is calculated using the average of the closing prices of the underlying share over the period of seven trading days starting on the ex-dividend date in the year of grant and in the year of vesting. The achievement factor is capped at 200%.

TOTAL SHAREHOLDER RETURN

Total shareholder return is the profit (or loss) realized by an investment at the end of a year or specific period. It includes capital gains or losses from changes in the share price as well as gross dividends.

PSU FAIR VALUE

The fair value of the PSUs granted has been deter-mined using a Monte Carlo simulation algorithm. The valuation was performed by independent specialists applying the following significant inputs into the model: grant date, vesting date, average reference price, performance target including ‘cap’ and ‘floor’, share price at issue, risk-free interest rate, volatility, and expected dividend rate.

OPTION PLAN (UNTIL 2011)

Until 2011, tradable options (non-tradable for partici-pants outside Switzerland) with a term of six years and a two-year vesting period were allocated. The exercise price was equal to the share price on

200

100

0

B

A

MIDPOINT

Target (for example in CHF)

Achi

evem

ent (

%)

250

200

150

100

50

0

-10 -5 0 5 10 15 20 25 30Total shareholder return p.a. (%)

Achi

evem

ent (

%)

SHORT-TERM INCENTIVE TARGET ACHIEVEMENT (STI)

SHARE ALLOCATION BASED ON PERFORMANCE SHARE UNITS AND TOTAL SHAREHOLDER RETURN

ln the short-term incentive model, the scale for financial target achievement extends from 0% to a maximum of 200% and is based on a line joining three points: 0% (point A), 100% (midpoint) and 200% (point B). The difference on the horizontal axis between the midpoint and point B must be equal to, or greater than, the difference between the midpoint and point A. The actual target achievement is measured by way of linear interpolation.

The compensation model awards shares according to the number of PSUs allocated and the total shareholder return achieved per annum over a three-year vesting period. At the end of the perfor-mance period, no shares will be allocated for a TSR of 0% p.a. or less; one share will be granted per vested PSU if the TSR is +10% p.a. and two shares per vested PSU for a TSR of +20% p.a. or more (capped at 200%). For a TSR between 0% and 10% p.a. or between 10% and 20% p.a., the number of shares allocated per vested PSU is calculated on a linear basis.



31 December/1 January. The value of the options was determined at grant date and is expensed as a person-nel expense from service commencement to the end of the vesting period. The fair value of the options granted has been determined using the Black-Scholes valuation model. The calculation of the option value was per-formed by independent specialists. Since 2012, no fur-ther option allocations were made.

REGULATIONS RELATING TO COMPENSATIONAt the 2014 AGM, the shareholders approved changes to the Articles of Association (AoA) required to implement the Swiss Ordinance regarding Excessive Compensation (OaEC). These changes are fully reflected in Straumann’s compensation schemes for the Executive Management and Board of Directors.

The full text of the AoA is available on our website: www.straumann.com/articles.

AGREEMENTS WITH DIRECTORS AND EXECUTIVESAgreements with members of the Board of Directors regarding their compensation, and with members of the EMB regarding their employment may be temporary or permanent. Temporary agreements have a maximum term of one year, with the possibility of renewal, while permanent agreements have a notice period of no more than 12 months. Non-compete clauses are permissible. Compensation may be paid as indemnity for non-com-pete clauses. In such cases, the compensation must not exceed the last annual total compensation paid to the individual and may not be paid for more than one year (see Art. 4.5 AoA).

In 2014 no compensation was paid to related parties of members of the Executive Management and members of the Board of Directors.

REMUNERATION OF THE EXECUTIVE MANAGEMENT BOARDThe principles for the compensation of the Executive Management specify both a fixed cash component, which includes basic salary and other fixed compensa-tion items, and a variable component (see Art. 4.2 AoA). The latter includes a short-term incentive based on the achievement of corporate performance targets, and/or financial targets, and/or individual targets, and a variable share-based long-term incentive,

Options expiring at year-end

Options available for exercise

2014 4 972 131 702

2015 48 607 131 702

2016 48 856 83 095

2017 34 239 34 239

TOTAL 136 674

NUMBER OF OPTIONS OUTSTANDING UNDER THE STOCK OPTION PLAN

2014 2013 2012

As of 1 January 199 470 260 676 325 000

Granted options 0 0 0

Exercised options (62 796) 0 0

Forfeited options 0 (12 497) (15 832)

Expired options (4 972) (48 709) (48 492)

As of 31 December 131 702 199 470 260 676

Options available for exercise

136 647 156 057 152 520

OUTSTANDING PERFORMANCE SHARE UNITS

2014 2013

As of 1 January 79 138 32 894

Granted PSUs 30 063 64 977

Exercised 0 0

Forfeited PSUs1 (9 391) (18 733)

Expired PSUs 0 0

AS OF 31 DECEMBER 99 810 79 138

1 Eligible participants who left Straumann voluntarily

or as part of the 2013 reorganization forfeited their PSU allocations for 2012 and 2013.

PERFORMANCE SHARE UNIT FAIR VALUE

2014 2013

Grant date 25.04.2014 17.04.2013

Vesting date 25.04.2017 15.04.2016

Share price at grant 184.00x CHF 114.00

Risk-free interest rate 0.14% 0.15%

Expected volatility 31.81% 31.28%

Expected dividend yield1 0% 0%

Estimated fair value CHF 152.33 CHF 88.24

1 Assuming immediate reinvestment of dividend payment



which is based on the achievement of performance tar-gets over a period of three years.

The compensation of each member of the Executive Management Board is determined according to role and responsibilities and is based on external benchmarks. Each member receives a base salary and is included in the short-term incentive plans, as described earlier. The compensation packages of the existing members of the Executive Management Board remained more or less unchanged in 2014.

If there are changes in the Executive Management sub-sequent to the AGM, the following applies: The total compensation at target of a new CEO shall not exceed 140% of the compensation paid to the departing CEO. The compensation of any other incoming member of the EMB shall not exceed 140% of the average compensa-tion paid to Executive Management members (excluding the CEO). In addition, and as defined in the Articles of Association, incoming Executive Management members may receive compensation to offset any losses of valu-able rights associated with giving up their prior activi-ties. The amount of this compensation may not exceed CHF 1 000 000 for a CEO or CHF 500 000 for other mem-bers (see Art. 4.3 AoA). For 2014, Straumann paid an amount of CHF 428 000 to the new Group CFO Peter Hackel for long term incentive components forfeited due to resignation from his previous employment.

As total compensation for the EMB the 2014 AGM pro-spectively approved a fixed compensation of CHF 4.7m for the collective Executive Management (as composed in April 2014) for the year ending 31 December 2014, and a maximum variable long-term compensation (LTI) of CHF 2.5m. The variable short-term compensation (STI) for the year ending on 31 December 2014 will be submit-ted for approval by the shareholders at the 2015 AGM.

Subsequent to the AGM, Dr Peter Hackel rejoined Straumann and took over as Chief Financial Officer on 1 December 2014. He succeeded Thomas Dressendörfer, who will continue in an advisory capacity until June 2015. Dr Sandro Matter, Execu-tive Vice President of Instradent Management & Strategic Alliances, left Straumann in December 2014. Marco Gadola took over his responsibilities on an interim basis until the appointment of a successor.

The table on page 152 shows the remuneration paid to the Executive Management in 2014 in accordance with the OaEC.

COMPENSATION PAID TO FORMER MEMBERS OF THE

EXECUTIVE MANAGEMENT

In 2014, no payments to former members of the Execu-tive Management were made.

LOANS TO EXECUTIVE MANAGEMENT

The articles of association do not allow for loans, advances or credits to any member of the Executive Management Board or related parties.

SHAREHOLDINGS OF THE EXECUTIVE MANAGEMENT BOARD

The shareholdings in Straumann shares and stock options of the members of the Executive Management Board who held office at the end of 2014 are shown in the table on p. F176.

REMUNERATION OF THE BOARD OF DIRECTORSAccording to the revised Articles of Association, the compensation of the Board of Directors must be approved by the AGM and consists of a fixed com-pensation component only, which is paid in cash and/or shares (Art. 4.1 AoA). The Board of Directors establishes the compensation payable to its mem-bers within the limits approved by the AGM.

The 2014 AGM approved a maximum total compen-sation for the Board of Directors for the term of office ending at the 2015 AGM of CHF 2.9m, of which CHF 1.2m was paid in cash and the remainder was paid by way of allocation of 6400 shares, which were granted shortly after the AGM for the relevant service period and are blocked for two years. The value of shares is calculated using the average clos-ing price of the shares over the seven trading days following the Annual General Meeting. In addition to shares allocated as part of remuneration, each member of the Board of Directors is required to hold at least a further 2000 Straumann shares, demon-strating engagement with the company. This approach is in line with best practices.

Irrespective of role, all Directors are entitled to reim-bursement from the company for their reasonable expenses for travel to and from Board meetings, or on behalf of the Board, and other expenses incident



thereto, in accordance with the expense regulations for Members of the Board of Directors of Straumann Holding AG.

At the AGM in April 2014, Dominik Ellenrieder stepped down from the Board, reducing the number of Direc-tors to seven. At the same time, the number of Com-mittees of the Board was reduced from three to two (see p. 118).

The remuneration of the Board of Directors is laid out in the tables on p. 152 f. in accordance with Swiss law and is in line with current market practices.

None of the Board members received any remunera-tion from the Straumann Group other than that dis-closed in this report.

COMPENSATION PAID TO FORMER DIRECTORS

In 2014, no payments to former members of the Board or related parties were made.

LOANS TO MEMBERS OF THE BOARD OF DIRECTORS

The articles of association do not allow for loans, advances or credits to any member of the Board of Directors or related parties. Thus, no such payments were made in 2014.

SUMMARY OF ALL VALID WARRANTS ISSUED IN THE STRAUMANN STOCK OPTION PLAN

Name/symbol Year Security ID number

Market maker Type/ratio Number Strike price Expiry

STMMA1 Wt 12.15 (STMN15)

2009 10848946 Credit Suisse Derivatives

American 50:1

2 016 450 292.50 12.2015

STRAUM15 OPT1 ESOP (USA)

2009 4000210 Not traded American 1:1

9 578 292.50 12.2015

STRAUM15 OPT1 ESOP (other countries)


1 750 292.50 12.2015

STMNCC1

Wt 12.16 (STMN16)2010 12217893 Credit Suisse

DerivativesAmerican

50:12 278 450 214.00 12.2016



5 812 214.00 12.2016



1 750 214.00 12.2016

STMNCS1

Wt 12.17 (STMN17)2011 14630069 Credit Suisse

DerivativesAmerican

50:12 226 400 162.10 12.2017



2 105 162.10 12.2017



750 162.10 12.2017

TOTAL VALID WARRANTS ISSUED

6 543 045

1 Traded on the SIX Swiss Exchange.

VALUE DEVELOPMENT OF OPTIONS

Name/symbol Grant Vesting Value at grant Value at vesting Value 31.12.14

STMMA1 Wt 12.15 (STMN15) 2009 2011 77.00 6.00 10.00

STMNCC1 Wt 12.16 (STMN16) 2010 2012 53.50 3.00 48.00

STMNCS1 Wt 12.17 (STMN17) 2011 2013 38.00 32.00 89.50 1 Traded on the SIX Swiss Exchange.



APPROVAL OF COMPENSATIONThe AGM prospectively approves the maximum com-pensation payable to the Board of Directors for the term of office ending at the next AGM. Likewise, the AGM approves the maximum fixed compensation of the Executive Management prospectively for the period commencing on 1 April and ending on 31 March of the consecutive calendar year. The variable short-term components of the Executive Management’s compensation are approved retroactively for the busi-ness year preceding the AGM (see art. 3.1.9 AoA and table on p. 152).

The compensation of the individual members of the Board and the Executive Management is decided by the Board of Directors on recommendation of the Compensation Committee and within the limits set by the AGM. The relevant criteria are explained on p. 148 f., and the compensation awarded to the Board of Directors and the Executive Management is disclosed on p. 152 f.

For 2015, a maximum collective STI of CHF 4.1m (excluding social costs and other compensation) is budgeted for the Executive Management Board if all relevant targets are achieved to the defined maxi-mum (subject to approval at the 2016 AGM). In addi-tion, the Board of Directors will submit a maximum fixed compensation for the executive management of CHF 5.0m to the AGM. In each case, these figures apply to the Executive Management Board composi-tion as of 1 January 2015.

None of the Executive Management Board received any compensation from the Straumann Group other than that disclosed in this report.

This Compensation Report provides comprehensive transparency with regard to the company’s general compensation principles and in particular to the remu-neration of the Executive Management Board and the Board of Directors.



2014 (AUDITED TABLE)

(in CHF 1 000)Fixed

compensationOther

compensationTotal

compensation

BOARD OF DIRECTORS

Gilbert Achermann (Chairman) 721 179 900

Dr h.c. Thomas Straumann (Vice Chairman) 360 27 387

Dr Sebastian Burckhardt 251 20 271

Roland Hess (Chairman Audit Committee) 305 23 328

Ulrich Looser (Chairman Strategy Committee1) 264 21 285

Dr Beat Lüthi 251 20 271

Stefan Meister (Chairman HR Committee) 305 23 328

Former member

Dominik Ellenrieder1 53 13 66

Total 2 510 326 2 836

(in CHF 1 000)Fixed

compensationPerformance

bonusPerformance

share unitsOther

compensationTotal

compensation

EXECUTIVE MANAGEMENT BOARD

Marco Gadola (President & CEO) 750 1 209 780 260 2 999

Other members (8 until 30 Nov 2014, thereafter 9)2 2 415 2 224 1 046 1 431 7 116

Former member 440 305 97 172 1 014

Total 3 605 3 738 1 923 1 863 11 129

TOTAL 6 115 3 738 1 923 2 189 13 965

1 Until 31 March 20142 Includes an amount of kCHF 428 to the new Group CFO Peter Hackel for long term incentive components forfeited due to resignation from his pre-

vious employment.

COMPENSATION APPROVED AT THE 2014 AGM

(in CHF million) Maximum approved1 Amount dispensed2

BOARD OF DIRECTORS Total compensation 2.9 2.77

EXECUTIVE MANAGEMENT BOARD Fixed compensation 4.7 4.4953

Other compensation according to Art. 4.3 AoA 0.5 0.4284

Long Term Incentive (grant 2014) 2.5 1.9235

Short Term Incentive 4.2826

1 Based on the configurations of the Board of Directors and the Executive Management Board at the time of the 2014 AGM (including social costs).2 Does include other compensation elements (e.g. social costs).3 Including compensation paid to the new CFO for December.4 Compensation paid to the new CFO for remuneration forfeited due to resignation from previous employment.5 Excluding social costs as PSU’s have not yet vested.6 Payout subject to approval by the 2015 AGM (including social costs).



2013 (AUDITED TABLE)

(in CHF 1 000)Fixed

compensationOther

compensationTotal

compensation

BOARD OF DIRECTORS

Gilbert Achermann (Chairman) 863 147 1 010

Dr h.c. Thomas Straumann (Vice Chairman) 399 23 422

Dr Sebastian Burckhardt 264 15 279

Dominik Ellenrieder 264 15 279

Roland Hess (Chairman Audit Committee) 318 18 336

Ulrich Looser (Chairman Strategy Committee) 318 18 336

Dr Beat Lüthi 264 15 279

Stefan Meister (Chairman HR Committee) 318 18 336

Total 3 008 269 3 277

(in CHF 1 000)Fixed

compensationPerformance

bonusPerformance

share unitsOther

compensationTotal

compensation

EXECUTIVE MANAGEMENT BOARD

Marco Gadola (President & CEO) (since 1 March 2013) 627 986 780 775 3 168

Other members (6 until 31 May 2013, thereafter 8)1 2 720 2 302 1 478 907 7 407

Former members 891 431 0 238 1 560

Total 4 238 3 719 2 258 1 920 12 135

TOTAL 7 246 3 719 2 258 2 189 15 412

1 Includes CHF 347 000 for Gilbert Achermann in his function as CEO ad interim for the period 1 January to 31 March 2013.



Report of the statutory auditoron the remuneration report ofStraumann Holding AG, Basel

To the General Meeting of Straumann Holding AG, Basel

Basel, 13 February 2015

REPORT OF THE STATUTORY AUDITOR ON THE REMUNERATION REPORTWe have audited the remuneration report dated 13 February 2015, which comprise the tables marked as audited on page 152 and 153, of Straumann Hold-ing AG for the year ended 31 December 2014.

RESPONSIBILITY OF THE BOARD OF DIRECTORSThe Board of Directors is responsible for the prepara-tion and overall fair presentation of the remuneration report in accordance with Swiss law and the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is also responsible for designing the remuneration sys-tem and defining individual remuneration packages.

AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on the accompanying remuneration report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the remu-neration report complies with Swiss law and articles 14 – 16 of the Ordinance.

An audit involves performing procedures to obtain audit evidence on the disclosures made in the remu-neration report with regard to compensation, loans and credits in accordance with articles 14 – 16 of the Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also

includes evaluating the reasonableness of the meth-ods applied to value components of remuneration, as well as assessing the overall presentation of the remu-neration report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OPINIONIn our opinion, the remuneration report for the year ended 31 December 2014 of Straumann Holding AG complies with Swiss law and articles 14 – 16 of the Ordinance.

Ernst & Young Ltd

Daniel Zaugg Daniel MaiwaldLicensed audit expert Licensed audit expert(Auditor in charge)


156

“This technology fascinates me.”GÜLAY DEMIRTASTECHNICAL SUPPORT

“We don’t settle for good enough – it has to be the best.”ALBIN GYGLIGLOBAL PRODUCT MANAGER

“I love working directly with customers.”MARISA FADDAMEDICAL PRODUCT ADVISOR


157

Willing to help with a ‘can do’ attitude

MARISA FADDAMEDICAL PRODUCT ADVISOR3 YEARS @ STRAUMANN

Marisa is one of Straumann’s highly trained specialists who advise customers on practical issues. “I enjoy the challenge of solving problems and anticipating their needs. I am always inspired by the willingness to help and ‘can-do’ attitude at Straumann.”

ALBIN GYGLIGLOBAL PRODUCT MANAGER4.5 YEARS @ STRAUMANN

For many years Albin’s goal was to work for Straumann. “Every dental technician looks up to Straumann for their Swiss precision, innovation and quality standards.” His favorite part of the job is bringing new products to market and fine-tuning them for specific countries.

GÜLAY DEMIRTASTECHNICAL SUPPORT2.5 YEARS @ STRAUMANN

Gülay is really engaged in her work, and she finds the technology fascinating. She enjoys working together as a team on solutions and the positive feedback that comes from customers. “It’s im-portant for customers to have someone who understands their problems and perspective and offers authentic support.”

“This technology fascinates me.”GÜLAY DEMIRTASTECHNICAL SUPPORT


158

Straumann Pro ArchThe edentulous solution

Until fairly recently, people suffering from the debilitating handi-cap of severely damaged, ‘hopeless’ dentition had little alterna-tive than to have their remaining compromised teeth removed and to wear plastic dentures held in place by suction or adhesive. The functional limitations, loss of self-confidence and wellbeing associated with unanchored dentures are well known and well documented. 1,2,3

The introduction of dental implants to anchor removable den-tures made a tremendous difference both in terms of health and quality of life. Although these removable solutions are proven and popular, for many patients they are still ‘artificial’ dentures. The advent of full-arch bridges fixed to implants has changed this radically.

Another development is the acceleration of treatment times, such that patients have higher expectations for tooth replace-ment solutions that are quick, provide immediate function and cause minimal disruption to their daily lives.

1 Awad MA, Rashid F, Feine JS; Overdenture Effectiveness Study Team Consortium. The effect of mandibular 2-implant overdentures on oral health-related quality of life: an international multicentre study. Clin Oral Implants Res. 2014 Jan;25(1):46-51. doi: 10.1111/clr.12205. Epub 2013 Jun 4. PubMed PMID: 23735197.

2 Jabbour Z, et al. Is oral health-related quality of life stable following rehabilitation with mandibular two-implant overdentures? Clin Oral Implants Res. 2012 Oct;23(10):1205-9. doi: 10.1111/j.1600-0501.2011.02289.x. Epub 2011 Aug 15. PubMed PMID: 22092512.

3 Awad MA, et al. Implant overdentures and nutrition: a randomized controlled trial. J Dent Res. 2012; Jan;91(1):39-46. doi: 10.1177/0022034511423396. Epub 2011 Sep 27. PubMed PMID:21951464.


159

PROSTHETICS ADD THE BITE The implant provides the foundation, but the bite comes with the prosthet-ics, which are equally important. The Pro Arch system includes a selec-tion of new sleek abut-ments (see p. 77), which offer a wide range of pros-thetic options. In addition, Straumann now offers custom-milled bar and bridge options right up to a full-arch (see picture on p. 156) – to carry the final restoration.

BROAD ACCESS TO CADCAMThrough our open CAD-CAM system and CARES Scan & Shape Service, almost any dental lab can offer Straumann custom-ized bars to complete the Pro Arch solution.

A COMBINATION OF SCIENTIFICALLY PROVEN IMPLANT AND PROSTHETIC TECHNOLOGYStraumann Pro Arch is a comprehensive solution that includes a broad range of implants, and abutments as well as CADCAM frameworks, bars, bridges and other components that enable clinicians and dental technicians to provide accelerated fixed full-arch tooth replacements.

Our proven implant system with outstanding osseointegration and healing properties includes the new-generation Bone Level Tapered implant (see p. 104 f.), offering high stability for immedi-ate or early loading. With our SLActive surface implant healing time is reduced (see p. 46 f.) and final stability is achieved faster than with the conventional SLA surface.

Pro Arch is only available through Straumann and will be launched in North America and most European countries in Spring 2015, with other markets to follow.

4 Douglass CW, Shih A, Ostry L. Will there be a need for complete dentures i theUnited States in 2020? J Prosthet Dent. 2002 Jan;87(1):5-8

38 million in the USwill need full dentures by 20204

Straumann Pro Arch solution for full-arch tooth replacement.


Information for investors 160

Information for investorsContents

161 Share performance

163 Calendar

164 Research coverage

164 Contacts

165 Publications


Information for investors

(in CHF) 2014 2013

Value Date Value Date

First trading day 165.60 03.01.14 114.10 3.1.

Lowest1 165.60 03.01.14 111.70 16.1.

Highest1 255.00 08.12.14 180.60 31.10.

Last trading day 250.75 30.12.14 166.80 30.12.

Average 207.54 144.00

Tax value 250.75 166.80

Total shareholder return, gross of tax 52.6% 52.3%

Share price performance 50.3% 48.9%

Market capitalization at year end (CHF million) 3 915 2 591

1 Value reflects closing price

SHARE PRICE DATA

Information for investors Share performance 161

Through 2014, the stock market was characterized by the global expansionary monetary policy, significant price corrections in commodity prices, a continued weak economy in Europe, various geopolitical crises (above all the Crimean conflict), major IPOs and numerous company mergers, all of which affected the healthcare sector disproportionately.

The European equity markets were particularly affected by Mario Draghi and his European Central Bank (ECB) Executive Board in 2014. The expansionary monetary policy in the eurozone and generally low interest yields helped various leading equity indices to achieve a positive balance.

Towards the end of the year, stock markets received another significant boost, when the ECB decided to purchase controversial bonds in the peripheral coun-tries in 2015 and to reduce the key interest rate to a record low.

The Swiss mid-cap index SMIM closed the year 10% up. The MSCI World climbed 17% and the MSCI World Healthcare Equipment & Supplies, the sector index that is representative for Straumann, grew 36% (all measured in CHF).

Straumann’s share price rose 50% (2013: 48%), outper-forming both the general market and the sector index. The increase reflected fundamental margin improve-ments, increased sales momentum in all regions, and the strategic reorientation, which improved investor sentiment considerably. Including the dividend of CHF 3.75 per share, total shareholder return amounted to as much as 53% or CHF 88.

The average daily closing price of the share ranged between CHF 166 and CHF 255, with the year-end clos-ing price at CHF 251. On average 33 070 shares were traded daily, which was a good level in view of the market capitalization of CHF 3.9 billion (December 2014), and the constrained free float (63%) .

Share performance

161 Share performance

163 Calendar

164 Research coverage

164 Contacts

165 Publications


Information for investors Share performance162

¢ STMN share price ¢ SMIM index ¢ Volumes trades

J O N DJ J A SF M A M

Pricein CHF

Shares(thousands)

80

40

0

160

120

240

200

320

280

360

140

120

100

180

160

220

200

260

240

280

1 2 4 4 53 6 7 8

1 25 Feb FY 2013 shows significant profitability improvements

2 23 Apr Collaboration with botiss announced

3 30 Apr Q1 2014: Promising start into the year

4 26 Aug H1 2014: solid revenue growth and sharp rise in profitability

5 29 Aug Partnership with ClearChoice in the US announced

6 22 Sep Straumann temporarily drops out of the SMIM index

7 23 Oct Q3 sales of +7% indicates topline acceleration

8 15 Dec STMN re-enters the SMIM index

SHARE PRICE DEVELOPMENT

HGHEST/LOWEST VALUES(in CHF)

At last day of trading

100

50

0

200

150

250

300

350

2010 2011 2012 2013 2014

STOCK EXCHANGE INFORMATION

Listing SIX Swiss Exchange (STMN)

Bloomberg STMN SW

Reuters STMN.S

Investdata STMN

Ex date 14 April 2015

Payment date 16 April 2015

Security ID 001 228 007

ISIN CH 0012 280 076


Information for investors Share performance Information for investors Calendar 163

CalendarReporting dates & key events

KEY DATES IN 2015 27 February 2014 full-year results

10 April Annual General Meeting

14 April Dividend ex-date

30 April Q1 sales

20 August Q2 sales and H1 results

29 October Q3 and 9M sales

PLANNED INVESTOR RELATIONS EVENTS AND CONFERENCES IN 2015Members of Straumann’s Executive Management and/or Investor Relations team plan to take part in the fol-lowing events (subject to availability).

ROADSHOWS & CONFERENCES15 January Helvea Baader Conference, Bad Ragaz

5 March Investor Meetings, London

6 March Investor Meetings, Paris

12 March IDS Investor Breakfast, Cologne

17 March Investor Meetings, Toronto

18 March Investor Meetings, Chicago

19 March Investor Meetings, New York

27 March Kepler Cheuvreux Swiss Seminar, Zurich

17 April Investor Meetings, Madrid

15/16 June Investor Meetings, London

18 June Credit Suisse China Day, Zurich

17 July Investor Meetings, Milan

1 September Investor Meetings, Edinburgh & Chicago

2 September Investor Meetings, London & New York

3 September Investor Meetings, Boston

9 September ZKB Breakfast, ZurichSGKB Conference, St. Gallen

23 September Investor Meetings, Copenhagen

24 September Investor Meetings, Stockholm

3 November Investor Meetings, Munich

4 November Investor Meetings, Vienna

If you are interested in meeting Straumann’s topmanagement at one of the meetings, please contact [email protected].

SELECTED DENTAL MEETINGS IN 20155–7 March Pacific Dental Conference

(Vancouver, Canada)

10–14 March 36th International Dental Show IDS (Cologne, Germany)

12–14 March Academy of Osseointegration AO 30th Annual Meeting (San Francisco, USA)

17–18 April ITI Kongress Deutschland (Dresden, Germany)

7–9 May Ontario Dental Association Annual Spring Meeting (Toronto, Canada)

9 May ITI Congress Switzerland (Berne, Switzerland)

9–10 May ITI Congress Japan (Tokyo, Japan)

22–26 May Journees Dentaires Internationales du Québec (Montreal, Canada)

3–6 June Europerio 8 (London, UK)

15–18 July 13º Congresso Internacional de Odontologia (Rio de Janeiro, Brazil)

7–9 August Hong Kong International Dental Expo And Symposium (Hong Kong)

21–25 September 45th Annual Meeting of the Japanese Society of Oral Implantology (Okayama, Japan)

22–25 September FDI Annual World Dental Congress (Bangkok, Thailand)

24–26 September 24th Annual Scientific Meeting of the European Association for Osseointegration (Stockholm, Sweden)

4–5 December botiss biomaterials: Bone & Tissue Days (Salzburg, Austria)


Information for investors Research coverage | Contacts164

Research coverage

Contacts

BANK S BELLEVUE Daniel JelovcanTel. +41 44 267 72 30

BANK OF AMERICA MERRILL LYNCHEd Ridley-DayTel. +44 207 995 4585

BANK VONTOBELCarla Bänziger Tel. +41 58 283 70 21

BARCLAYS CAPITALAlex KlebanTel. +44 203 555 21 55

BERENBERG BANKThomas JonesTel. +44 203 207 7877

COMMERZBANK AGOliver MetzgerTel. +49 69 136 81573

CREDIT SUISSEChristoph GretlerTel. +41 44 333 79 44

DEUTSCHE BANKYi-Dan WangTel. +44 207 545 9999

EXANE BNP PARIBASJulien DormoisTel. +33 1 44 95 69 49

GOLDMAN SACHSVeronika DubajovaTel. +44 207 774 1901

HSBC TRINKHAUS &BURKHARDTHendrik LofrutheTel. +49 211 910 2373

JEFFERIESMartin BrunningerTel. +44 207 029 8704

KEPLER CHEVREUXMaja PatakiTel. +41 43 333 66 23

MAINFIRST BANKMarkus Wieprecht/Richard LatzTel. +49 69 788 08 221

MORGAN STANLEYMichael JünglingTel. +44 207 425 5975

NORTHCOAST RESEARCHEd SnyderTel. +1 216 468 6903

SANFORD C. BERNSTEINLisa CliveTel. +44 207 170 5052

UBSIan Douglas-PennantTel. +44 207 568 77 63

ZKBSibylle Bischofberger+41 44 292 37 34

GROUP HEADQUARTERSSTRAUMANN HOLDING AGPeter Merian-Weg 12, 4002 BaselTel. +41 61 965 11 11Fax +41 61 965 11 01

INVESTOR RELATIONSFabian Hildbrand Tel. +41 61 965 13 27Rahel Schafroth Tel. +41 61 965 16 [email protected]

MEDIA RELATIONSMark Hill Tel. +41 61 965 13 21Thomas Konrad Tel. +41 61 965 15 [email protected]

GENERAL INQUIRIESCorporate CommunicationTel. +41 61 965 11 11Fax +41 61 965 11 03


Information for investors Research coverage | Contacts Information for investors Publications 165

PublicationsMedia releases

The Straumann Annual Report is published in February and presented at the analysts’ and media conferences. It is also available online at www.straumann.com. The half-year interim report is published in the form of a media release in August. Other media releases include the quarterly sales reports published in April for the first quarter and in October for the third quarter.

Where necessary or appropriate, Straumann also pub-lishes additional information on significant events.

Press releases and presentations can be downloaded from the Straumann homepage at www.straumann.com. Please see Information Policy on p. 127.

2014 MEDIA RELEASES25 February Straumann lifts profitability significantly

and posts 4% organic growth in Q4, bringing full-year revenue to CHF 680 million

25 February Neodent USA announces it’s launch into North America at The Academy of Osseointe-gration on March 6-9 in Seattle

26 February Neodent announces launch in the United States

31 March Straumann invests in MegaGen to drive expansion in value implant segment in Asia/Pacific

11 April Straumann AGM: Shareholders approve all Board proposals

15 April CADCAM customized abutments with Strau-mann original implant connections now available to 3Shape users

23 April Straumann and botiss team up to provide complete dental regeneration solutions worldwide

24 April Straumann and 3M True Definition scanner provide easy-to-use, all-digital process for implant- and tooth-borne restorations

30 April Promising start to 2014 with 6% growth (l.c.) and first-quarter revenue of CHF 180 million

18 June Neodent implant library now available in coDiagnostiX Guided Surgery planning soft-ware from Dental Wings

1 July Mark Bartold receives the 2014 IADR/Strau-mann Award in Regenerative Periodontal Medicine

13 August Straumann invests in RODO Medical

20 August Neodent USA contests Nobel Biocare’s alle-gations of patent infringement in the USA

26 August Straumann reports solid revenue growth and sharp rise in profitability

29 August Straumann to provide ClearChoice affiliated network with a broad range of dental implants, including the new Roxolid SLActive Bone Level Tapered implant

18 September New award to promote young professionals working in the field of periodontology

26 September Instradent announces launch of Neodent and Medentika products in Italy

Neodent USA files counterclaims against Nobel Biocare

1 October Neodent Spain and Neodent Portugal join forces as Instradent

23 October Solid nine-month growth with acceleration in Q3

28 October Straumann USA and Patterson Dental team up to bring a new standard of care to implant placement in general practice

24 November Instradent strengthens foothold in emerging Asian markets

23 December Independent landmark study shows signifi-cantly lower failure rate with Straumann dental implants

2015 MEDIA RELEASES3 February Straumann announces cost-saving measures

to mitigate currency impact

19 February Straumann’s staff agrees to proposed com-pensation reductions to mitigate currency impact


166

“I like my job because I like being precise.”STEFANIE BARTHTESTING LAB ASSISTANT

“When I say I work at Straumann everyone is impressed. It has a great reputation.”SIMON BODMERPRECISION MECHANIC APPRENTICE


167

60 years’ experience you can see under the microscope

STEFANIE BARTHTESTING LAB ASSISTANT2 YEARS @ STRAUMANN

Every bar of raw titanium has to undergo microscopic inspection and the watchful eye of quality controllers like Stefanie. The fin-ished implants and abutments are sampled and scrutinized again and they don’t go out without the tester’s seal of approval. Stefanie says, “Under the microscope you can see the 60 years’ experience.”

SIMON BODMERPRECISION MECHANIC APPRENTICE4 YEARS @ STRAUMANN

“The mechanical development lab is like a family,” says Simon. “They are a close-knit team of perfectionists who measure and test, and test again. At the end of the day I see and touch what I’ve made, and take pride in it.”


168

Dental instrumentsSimplifying procedures

Each year, we make more than 300 000 surgical tools which are an extremely important part of our implant system. Designed for optimum cutting performance, our drills have three precise cut-ting surfaces to avoid heat that would damage the surrounding bone. They also have depth markings and sophisticated colour coding for convenience and safety.

Many dentists prefer our range of single-use disposable drills, which avoid cleaning, sterilizing and sorting – saving time and costs. For our main product range, this option has been available since 2007.

Straumann instrument cassette


169

COLOR-CODEDThe system is advanced, yet simple and efficient to use. Customers plan for surgery, decide on the implant to be placed and then simply follow the color-coded roadmap of the protocol. All in all, it is ergonomic, logical and straightforward.

IN-DEPTH ACCURACYDepth gauges and mark-ings are used to ensure precise drilling.

300 000 tools per year

INSTRUMENT COMPLEXITY REDUCED Simplicity, reliability and quality are the cornerstones of the prod-uct philosophy in developing surgical protocols and instruments.

We offer straightforward surgical protocols together with a com-prehensive portfolio of highly functional and easy-to-use instru-ments to help our customers tackle even the most challenging clinical cases effectively.

We aim to reduce instrument complexity and allow practitioners to focus on the most important aspect of treatment – the patient. That is why, at the heart of the Straumann Dental Implant Sys-tem, there is one instrument kit for the entire range of implant types and indications.

We want our customers to be able to focus instinctively on those aspects of surgery that really matter.

High precision screw drivers, torque wrench, drill and depth guage.


Appendix170

AppendixContents

171 Global presence

175 Glossary

179 Global Reporting Initiative

180 Points to note

181 Imprint


Appendix Appendix Global presence 171

AUSTRALIA & NEW ZEALANDStraumann Australia P/L7 Gateway CourtPort Melbourne, Victoria 3207Tel.+61 800 660 330Tel.+61 3 9261 1300 Fax.+61 3 9646 [email protected]

AUSTRIAStraumann GmbHFlorido Tower Floridsdorfer Hauptstrasse 11210 ViennaTel. +43 1 29 40 660Fax +43 1 29 40 [email protected]

BELGIUMStraumann SA/NVBelgicastraat 3, box 31930 ZaventemTel. +32 2 790 10 00Fax +32 2 790 10 [email protected]

BRAZILStraumann Brasil LtdaRua Funchal, 263 – 12°andarVila Olímpia04551-060 São PauloTel. +55 11 3058 6888Fax +55 11 3058 [email protected]

CANADAStraumann Canada LtdSuite 1003115 Harvester Road Burlington, Ontario L7N 3N8Tel. +1 905 319 2900Fax +1 905 319 [email protected]

CHINAStraumann (Beijing) Medical Device Trading Co., Ltd.B303, 3/F, Tower B, Jia Ming CentreNo.27 Dong San Huan Bei LuChaoyang DistrictBeijing 100020, P.R.ChinaPhone:+86 (10) 5775 6555Fax:+86 (10) 5775 [email protected]

CZECH REPUBLICStraumann sroNa Žertvách 2196/34 18000 Prague 8Tel. +420 284 09 [email protected]

DENMARKStraumann Danmark ApSNygårds Plads 21, 12605 BrøndbyTel. +45 46 16 06 66Fax +45 43 61 25 [email protected]

Global presenceStraumann around the world

171 Global presence

175 Glossary

179 Global Reporting Initiative

180 Points to note

181 Imprint


Straumann’s products and services are available in more than 70 countries through our subsidiaries and a broad network of distributors.

Straumann locationsProduction facilitiesDistributorsInstradent

Appendix Global presence172

FINLANDStraumann OyFredrikinkatu 48 A 7 krs.00100 HelsinkiTel. +358 9 694 28 77Fax +358 9 694 06 [email protected]

FRANCEStraumann SARL3, rue de la Galmy-Chessy77701 Marne-la-ValléeCedex 4Tel. +33 1 64 17 30 00Fax +33 1 64 17 30 [email protected]

GERMANYStraumann GmbHJechtinger Strasse 979111 FreiburgTel. +49 761 450 10Fax +49 761 450 11 [email protected]

Etkon GmbHKoburger Strasse 4504416 MarkkleebergTel. +49 341 350 354 0Fax +49 341 350 354 59

Etkon GmbHLochhamer Schlag 682166 GräfelfingTel. +49 89 309 07 50Fax +49 89 309 07 51 19

Instradent Deutschland GmbHHammweg 876549 HügelsheimTel. +49 7229 69912-0Fax +49 7229 [email protected]

HUNGARY (BRANCH)Straumann GmbH Magyarországi FióktelepeM3 Business CenterHungária körút 179-187.1146 BudapestTel. +36 1 787 10 95Fax +36 1 787 10 [email protected]


Appendix Global presence Appendix Global presence 173

ITALYStraumann Italia srlViale Bodio 37a20158 MilanTel. +39 02 3932 831Fax +39 02 3932 [email protected]

Instradent Italia srl.Bodio CenterViale Luigi Bodio, 37/A - Palazzo 420158 MilanoTel. +39 800 975 895FAX +39 02 84 20 23 [email protected]

JAPANStraumann Japan KKMita Bellju Building, 6F5-36-7, ShibaMinato-ku, Tokyo 108-9914Tel. +81 3 6568 1188Fax +81 3 6568 [email protected]

MEXICOStraumann México SA de CVRubén Darío #281int. 1702 Piso 17Col. Bosque de Chapultepec11580 México DF.Tel. +52 55 5282 6262Fax +52 55 5282 [email protected]

NETHERLANDSStraumann BVEinsteinweg 153404 LE IJsselsteinTel. +31 30 604 66 11Fax +31 30 604 67 [email protected]

NORWAYStraumann ASNedre Vollgate 3P.O. Box 1751 Vika0122 OsloTel. +47 23 35 44 88Fax +47 23 35 44 [email protected]

PORTUGAL (BRANCH)Straumann SAManohay Dental SALagoas Park, Edificio 11Piso 32740-244 Porto SalvoTel. +351 214 229 170Fax +351 214 212 [email protected]

Instradent Iberia S.L., Sucursal em PortugalLagoas Park, Edificio 11, Piso 32740-244 Porto SalvoTel. +351 22 834 44 00Fax +351 21 013 44 [email protected]

SINGAPOREStraumann Singapore Pte Ltd1 Maritime Square#09-04 Harbour Front CentreSingapore 099253Tel. +65 6376 2023 Fax +65 6376 2339

SOUTH KOREAStraumann Dental Korea Inc.1005 Korea Trade TowerSamseong 1-dongGangnam-guSeoul 135-729Tel. +822 2149 3800~4Fax +822 2149 [email protected]


Appendix Global presence174

SPAINManohay Dental SAEdificio Arroyo - AAvda. de Bruselas, 38 - Planta 128108 Alcobendas-MadridTel. +34 916 308 214Fax +34 916 301 [email protected]

Instradent Iberia S.L.Avda. de Bruselas, 38 - Planta 1Edificio Arroyo - A28108 Alcobendas-MadridTel. +34 91 662 3435Fax +34 91 662 [email protected]

SWEDENStraumann ABKrokslätts Fabriker 45 431 37 MölndalTel. +46 31 708 75 00Fax +46 31 708 75 [email protected]

Biora ABPer Albin Hanssons vaeg 41Medeon Science Park20512 MalmöTel. +46 40 32 13 33Fax +46 40 32 13 55

SWITZERLANDInstitut Straumann AGPeter Merian-Weg 124002 BaselTel. +41 61 965 11 11Fax +41 61 965 11 [email protected]

Straumann Villeret SA Champs du Clos 2Case postale 322613 Villeret BETel. +41 32 942 87 87Fax +41 32 942 87 88

UNITED KINGDOMStraumann Ltd3 Pegasus PlaceGatwick RoadCrawley West SussexRH10 9AYTel. +44 1293 651230Fax +44 1293 [email protected]

USAStraumann USA, LLC & Straumann Manufacturing, Inc.60 Minuteman RoadAndover, MA 01810Tel. +1 978 747 2500Fax +1 978 747 [email protected]

Straumann Manufacturing, Inc.113th Street 916AArlington, TX 76011Tel. +1 817 701 11 81 Fax: +1 817 701 12 36

Instradent USA, Inc.60 Minuteman RoadAndover, MA 01810Tel. +1 855 412 8883Fax +1 855 412 [email protected]


Appendix Global presence Appendix Glossary 175

DENTAL/MEDICAL TERMS

ABUTMENT

A component that connects the implant to the prosthesis and protrudes into the oral cavity.

ASTM

ASTM International is an international standards organi-zation that develops and publishes voluntary consensus technical standards for a wide range of materials, prod-ucts, systems, and services.

BONECERAMIC

Straumann’s fully synthetic bone substitute for bone augmentation procedures.

BONE LEVEL IMPLANT

Implant which connects with the abutment at bone crest level.

BONE LEVEL TAPERED (BLT) IMPLANTBone level implant with tapered profile which provides excellent primary stability.

BRIDGE

An appliance used to bridge the gap left by missing teeth by using one or more false teeth fixed to crowns anchored on tooth stumps or implants.

CADCAM

Computer-aided design/computer-aided manufactur-ing: A computer system is used both for designing a product and for controlling manufacturing processes.

CARES

CARES is a brand that Staumann uses for its digital pros-thetic services, including CADCAM, software, function-ality, scanning technology etc.

CROWN

A tooth-shaped cap attached to a tooth stump or implant abutment.

DENTAL TECHNICIAN

Dental professional who manufactures crowns, bridges, dentures and other dental prosthetics according to the dentist’s specifications.

DWOS

Dental Wings Open Software is an open software plat-form that allows prosthetics to be designed using data from multiple sources.

EDENTULOUS

Having no teeth (can refer to upper and/or lower jaw).

EMDOGAIN

An extract of enamel matrix proteins which are involved in the development of cementum, periodontal ligament and bone.

GUIDED SURGERY

Surgery in which 3D imaging technologies are used to plan the position, depth and angle of an implant.

HYDROPHILIC

Readily absorbing or attracting water, or having chemi-cal groups that interact with water.

INTRA-ORAL SCANNING

Digital scanning to create a 3D image of the patient’s teeth that replaces the conventional process of impres-sion-taking followed by model casting.

ITI

International Team for Implantology.

LOXIM

A transfer piece temporarily attached to the implant during placement which then detaches quickly and easily without disturbing the implant position.

Glossary


Appendix Glossary176

MEMBRANE

A barrier used in guided bone regeneration to pre-vent tissue from occupying space into which new bone should form, and to stabilize bone augmenta-tion materials.

NARROW NECK IMPLANT

Small diameter implant for limited interdental spaces or narrow bone ridges.

NIS

Non-interventional study, designed to evaluate prod-ucts in everyday clinical settings, where the clinician can use the product as deemed suitable, within treat-ment guidelines.

ONE-STAGE PROCEDURE

Surgical procedure whereby the implant is placed but not covered by the gum tissue during healing, eliminat-ing the necessity of a second surgical procedure to expose the implant.

OSSEOINTEGRATION

The biological process of bone integrating with the implant.

PERI-IMPLANTITIS

Inflammatory tissue pathology and/or progressive bone loss at implant site, resulting from plaque accumulation and bacterial infiltration around dental implants.

PERIODONTICS

Branch of dentistry concerned with the care and treat-ment of the supporting tissues of the teeth from the gingiva to the adjacent alveolar bone and ligament.

PERIODONTIST

Dental professional specialized in the tissue and bone surrounding the teeth and in treating the diseases that affect them.

PERIODONTITIS

Progressive disease of the periodontal tissues, re-sulting in the gradual loss of the tooth and support-ing structures.

PRO ARCH

A comprehensive restoration system for the entire jaw comprised of implants, abutments, and pros-thetic components.

PROSTHODONTIST

A dental professional who carries out prosthetic restora-tions on natural teeth and implants.

RCT

Randomized controlled trial.

REFERRAL MARKET

A market characterized by a relatively large number of specialists and in which general dentists tend to refer patients to specialists for procedures like implant placement.

RESTORATIVE DENTISTRY

Branch of dentistry concerned with the replacement or reconstruction of teeth.

ROXOLID

Straumann’s proprietary alloy of titanium and zirco-nium, which combines high tensile and fatigue strengths with excellent osseointegration.

SCAN & SHAPE

A Straumann CARES brand service, by which dental technicians generate CADCAM-based, customized abut-ments from a model or wax-up.

SCREW-RETAINED BARS AND BRIDGES

Bridges are devices used to ‘bridge’ a toothless gap and are fixed with screws to two or more dental implants; bars are commonly used to support partial or full dentures.

SLA

SLA refers to a second-generation implant surface tech-nology, introduced by Straumann in 1997.

SLACTIVE

Straumann’s third-generation implant surface technol-ogy. By virtue of its hydrophilic properties, healing time is cut in half.


Appendix Glossary Appendix Glossary 177

SOFT TISSUE LEVEL IMPLANT

Implant where the connection between the implant and the abutment is placed at the level of the gums, so that the soft tissue surrounds the polished collar of the implant.

TITANIUM

Metallic element isolated from minerals as an iron-gray powder; used in many dental and orthopedic applications.

TWO-STAGE PROCEDURE

Surgical procedure whereby the implant is inserted and a healing cap placed, which is then covered by the gum tissue during healing phase. A second surgical procedure is performed later, in which the healing cap is removed and an abutment and provisional prosthesis is placed.

X-STREAM

Solution-driven function within the CARES Visual software, providing a one-step, single-tooth implant-based prosthetic restoration process which signifi-cantly reduces turnaround time and shipment cost.

ZIRCONIA

ZrO2 – the white oxide of zirconium used for its infus-ibility and luminosity in dental implants, prosthetics, enamels and glazes.

ZIRCONIUM

A grayish-white ductile metallic element obtained from zircon and used in ceramic and refractory compounds as an alloying agent.

ZLA

The ZLA surface of Straumann’s ceramic implant fea-tures a topography characterized by macro- and micro-roughness, similar to the SLA surface, to enhance cell attachment and osseointegration.

FINANCIAL & LEGAL TERMS

AMORTIZATION

Systematic allocation of the depreciable amount of an intangible asset over its useful life.

AGM

Annual general meeting of the shareholders.

AOA

Articles of Association.

CAGR

Compound Annual Growth Rate.

DEPRECIATION

Systematic allocation of the depreciable amount of a tangible asset.

DOS-DAYS OF SUPPLIES

Inventory level at the end of a quarter divided by cost of goods sold for a given quarter, times 90. An indicator that helps to determine how long it takes to turn the inventory into actual sales.

DSO-DAYS OF SALES OUTSTANDING

Trade receivables divided by revenue for a given quarter, times 90. A measure of the average number of days that it takes to collect revenue after a sale has been made.

EARNINGS PER SHARE (EPS)

Net profit divided by the number of shares.

EBIT

Earnings before interest and taxes; also referred to here as operating profit.

EBITDA

Earnings before interest, taxes, depreciation and amor-tization.

ECONOMIC PROFIT (EP)

See compensation report (p. 145).

EQUITY RATIO

Shareholder equity divided by total assets in %.

ERP

Enterprise resource planning.


Appendix Glossary178

FREE CASH FLOW

Net cash from operating activities less capital expenditures plus net proceeds from property, plant and equipment.

FREE CASH FLOW MARGIN

Free cash flow divided by Group net revenue in %.

FREE CASH FLOW YIELD

Free cash flow per share divided by the stock price of the company.

GOODWILL

Future economic benefits arising from assets that are not capable of being individually identified and sepa-rately recognized.

IFRS

International Financial Reporting Standards.

IMPAIRMENT LOSS

The amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable value.

NET PROFIT MARGIN

Net profit divided by Group net revenue in %.

OPEX

Operating expenses, also called non-manufacturing expenses, including distribution costs, marketing, research & development, as well as general adminis-trative expenses.

ORGANIC GROWTH

Growth excluding the effect from business combination and currency effects.

PAY-OUT RATIO

Dividend paid divided by net profit over the same period in %.

REVENUES

Sales, see p. F21.

ROA

Return on assets; net profit divided by average assets in %.

ROCE

Return on capital employed; earnings before interest and taxes divided by average capital employed in %.

ROE

Return on equity; net profit divided by average equity in %.

SALES

See ‘sale of goods’ on p. F21.

TOTAL SHAREHOLDER RETURN (TSR)

Profit or loss realized by an investment. TSR includes capital gains/losses from increases/decreases in stock price as well as received gross dividends.

WACC

Weighted average cost of capital.

WRITE-DOWN

See ‘impairment loss’.


Straumann believes that sustainability is an integral part of business success, and that it is important to integrate sustainability topics in our annual reporting because they provide the context to what we have or have not been able to achieve.

To achieve high transparency for our shareholders and other stakeholders including customers, employees, and members of the communities in which we oper-ate, we have based our sustainability report on the guidelines provided by the Global Reporting Initiative (GRI) for the ninth consecutive year. The GRI is a non-profit, multi-stakeholder organization that strives to provide companies with a systematic basis for disclo-sure regarding sustainability performance. The aim is to give stakeholders a framework that facilitates com-parison and clear disclosure of information.

To focus our sustainability reporting on the most per-tinent issues for Straumann and its stakeholders, we have determined relevant reporting topics regarding economic, environmental, labor, human rights, soci-ety, and product responsibility issues based on the Guidance for Defining Report Content published by GRI. An online ‘Addendum GRI-Sustainability Report-ing’ to this report helps readers locate specific perfor-mance and management approach information on those issues. Together with this Addendum, the Straumann Annual Report 2014 fulfills the require-ments of the GRI-G3 reporting guidelines at Applica-tion Level B. This was reviewed and confirmed by GRI on 2 March 2015.

The ‘Addendum GRI-Sustainability Reporting’ to the Straumann Annual Report 2014 can be found at www.straumann.com/GRI2014.

Appendix Glossary Appendix Global Reporting Initiative 179

Global Reporting InitiativeGRI Sustainability Reporting


Appendix Points to note180

Points to note

FINANCIAL REPORTStraumann’s detailed financial report is published in English as a separate volume. It can be viewed or downloaded through our website:http://annualreport.straumann.com

Printed copies can be ordered from: Corporate Communication or Investor Relations Institut Straumann AGPeter Merian-Weg 12CH - 4002 BaselTel. + 41 61 965 11 11E-mail:[email protected] or investor.relations @ straumann.com

FORWARD-LOOKING STATEMENTSThis report contains forward-looking statements that reflect the current views of management. Such state-ments are subject to known and unknown risks, uncer-tainties and other factors that may cause actual results, performance or achievements of the Strau-mann Group to differ materially from those expressed or implied in this release. Straumann is providing the information in this report as of this date and does not undertake any obligation to update any statements contained in it as a result of new information, future events or otherwise.

PRODUCT AVAILABILITYThe availability and indications of the products men-tioned and/or illustrated in this report may vary according to country.

STRAUMANN TRADEMARKS & BRANDSThe following trademarks or brands are registered trademarks and/or used by Straumann Holding AG and/or its affiliated companies: Biora®, BoneCeramic™, Bone Control Design™, CARES®, coron®, conaviX™, Consistent Emergence Profiles™, CrossFit®, Eliminate the Dip®, Emdogain®, etkon®, Instradent™, ITI®, MembraGel®, More than implants™, Naturally attrac-tive™, n!ce™, Osteogain™, polycon®, PrefGel®, Roxolid®, SLA®, SLActive®, SLBioActive™, Straumann®, synOcta®, templiX™, The surface with success built in®, TiBrush®, ticon®, Variobase®, VivOss™, X-Stream™, Young Profes-sionals™, Zerion®, ZLA®, ZLActive®.

OTHER TRADEMARKS3M, ESPE and Lava™ are registered trademarks of 3M Company, USA, or 3M Deutschland GmbH (used under license in Canada). Botiss, botiss bone builder, mucoderm, collafleece, collacone, grafter, maxgraft and maxresorb are registered trademarks of botiss medical AG, Germany, or its affiliates. DWOS is a reg-istered trademark of Dental Wings Inc., Canada. MSCI and the names of all MSCI indexes and products are trademarks and service marks of MSCI Inc., USA, and/or its subsidiaries. Swiss Performance Index (SPI)®, Swiss Market Index (SMI)® and SMI Mid (SMIM)® are registered trademarks of SIX Swiss Exchange AG, Switzerland.


IMPRINTPublished by: Institut Straumann AG, BaselConcept and realization: PETRANIX Corporate and Financial Communications AG, Adliswil/ZurichPhotography: AMX Studio, Alex Stiebritz, KarlsruheConsultant on sustainability: sustainserv, Zurich and BostonCertain design elements by Eclat, Erlenbach/ZurichPrint: Neidhart + Schön AG, ZurichBasel, 26 February 2015

©2015, Straumann Holding AG

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About StraumannStraumann is a global leader in tooth replacement solu-tions including dental implants, prosthetics and regener-ative products. Headquartered in Basel, Switzerland, the Group is present in more than 70 countries through its broad network of distribution subsidiaries and partners.

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Rebecca Hesse SAP Coordinator

Susan-Ann Welzbacher Corporate Safety Officer

Julia Hirtle Spend Coordinator

Roland Scacchi Administrator

Alessandro Annicchiarico IT Support

Heather Stanton Web Editor

Dave Koster Lab Business Development

Raul Perez Talent Management

Sandra Schürmann Events Coordinator

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We have a global culture with more than 28 nationalities represented at our headquarters alone. The front cover shows a few examples.



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Straumann Holding AGPeter Merian-Weg 124002 Basel Switzerlandwww.straumann.com


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