We love what we do - Straumann

Loading...
We love what we do

2014 Annual Report

2014 Annual Report

Straumann Holding AG Peter Merian-Weg 12 4002 Basel Switzerland www.straumann.com

00_00_STR_GB2014_GB_Umschlag_en.indd 1

09.03.2015 16:44:50

About Straumann Straumann is a global leader in tooth replacement solutions including dental implants, prosthetics and regenerative products. Headquartered in Basel, Switzerland, the Group is present in more than 70 countries through its broad network of distribution subsidiaries and partners.

4 1

2

3

7 5

6

8

9

1

Rebecca Hesse

SAP Coordinator

2

Susan-Ann Welzbacher

Corporate Safety Officer

3

Julia Hirtle

Spend Coordinator

4

Roland Scacchi

Administrator

5

Alessandro Annicchiarico

IT Support

6

Heather Stanton

Web Editor

7

Dave Koster

Lab Business Development

8

Raul Perez

Talent Management

9

Sandra Schürmann

Events Coordinator

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

00_00_STR_GB2014_GB_Umschlag_en.indd 2

IMPRINT Published by: Institut Straumann AG, Basel Concept and realization: PETRANIX Corporate and Financial Communications AG, Adliswil/Zurich Photography: AMX Studio, Alex Stiebritz, Karlsruhe Consultant on sustainability: sustainserv, Zurich and Boston Certain design elements by Eclat, Erlenbach/Zurich Print: Neidhart + Schön AG, Zurich Basel, 26 February 2015 ©2015, Straumann Holding AG

09.03.2015 16:45:02

We love what we do 2014 Annual Report

Highly motivated, creative employees, together with innovative products, solutions and commercial approaches 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 professionalism 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’.

Straumann_2014_English_1 1

09.03.2015 16:50:25

2

PURE

Roxolid

18

8 Regeneratives

62

SLActive

44 Pro Arch

156

Bone Level Tapered

102

Straumann_2014_English_1 2

09.03.2015 16:50:58

3

2014 Annual Report Contents

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

Screw-Retained Abutments

74

Risk and sustainability report

106

Corporate governance

138

Compensation report

160

Information for investors

170

Appendix

181

Imprint

Instruments

166

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

Straumann_2014_English_1 3

09.03.2015 16:51:09

4

Operational performance

Operational performance KEY FIGURES

More on p. 48 ff.

(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

REVENUE (ORGANIC)

GROUP

EUROPE

ASIA/PACIFIC

+3%

NORTH AMERICA

CHF 124m, excluding exceptionals (restructuring/impairments)

REVENUE

More on p. 48 ff.

(in CHF million) 5 year CAGR –1% (+3% in I.c.)

+8%

+14%

REST OF THE WORLD

+14%

REVENUES BY REGION ¢ Europe ¢ North America ¢ Asia/Pacific ¢ Rest of the World

800

+6%

More on p. 52 ff.

5% 15%

53%

700 600 500 400

27%

300 200 100 0 2010

2011

¢ ¢ Reported revenue

Straumann_2014_English_1 4

2012

2013

2014

¢ Currency effect

09.03.2015 16:51:09

Operational performance

OPERATING AND NET PROFIT

5

More on p. 48 ff.

(in CHF million)

GROSS MARGIN 180 160 140

79%

Gross profit rises 4% fuelled by strong sales growth

120 100

EBIT MARGIN

80 60 40 20

21%

EBIT rises 28% driven by tight cost control

0 2010

2011

¢ ¢ Operating profit

2012

¢ Excluding exceptionals

2013

2014

¢ ¢ Net profit

PROFITABILITY

More on p. 48 ff.

Returns on assets, equity and capital employed in % NET PROFIT MARGIN 90 80 70

22%

Up from 15% in 2013

60 50

EQUITY RATIO

40 30 20 10

64%

Company solidly financed

0 2010

2011

2012

2013

2014

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

Straumann_2014_English_1 5

09.03.2015 16:51:10

6

Operational performance

CASH FLOW AND INVESTMENTS

More on p. 50 ff.

(in CHF million)

FREE CASH FLOW MARGIN 270 240 210

18%

Robust cash generation; cash/equivalents up CHF 76m to CHF 459m

180 150 120 90 60 30 0 2010

2011

¢ ¢ Operating cash flow ¢ ¢ Capital expenditure

2012

2013

2014

¢ Acquisitions & participations

EMPLOYEES

More on p. 88 ff.

2700

INVESTMENT IN PEOPLE

170

new jobs

2400 2100

8% increase in headcount as company invests in selected areas

1800 1500 1200 900 600 300 0 2010

Straumann_2014_English_1 6

2011

2012

2013

2014

09.03.2015 16:51:10

Share performance

7

Share performance SHARE PRICE DEVELOPMENT

(in %)

More on p. 161 ff.

SHARE INFORMATION

More on p. 161 ff.

(in CHF)

180 160

2014

2013

Earnings per share (EPS)

10.15

6.55

Ordinary dividend per share

3.751

3.75

Payout ratio

140

Share price at year-end

120

1

100

37%

58%

250.75

166.80

Payable in 2015 subject to shareholder approval

80 60 40 20

SHARE PRICE

0 2010

2011

2012

2013

2014

¢ Straumann ¢ Swiss SMIM price index ¢ MSCI World Healthcare Equipment & Services index (CHF) ¢ MSCI World price index (CHF)

+50% Over full year

TOTAL SHAREHOLDER RETURN

More on p. 161 ff.

(in %)

TOTAL SHAREHOLDER RETURN 50 40 30

53%

Driven by sharp rise in share price and stable dividend

20 10 0 -10 -20 -30 2010

Straumann_2014_English_1 7

2011

2012

2013

2014

09.03.2015 16:51:14

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

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

DANIEL GÜNTER DESIGN ENGINEER

DORIS HABEDANK SALES REPRESENTATIVE

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

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

Straumann_2014_English_1 8

09.03.2015 16:51:22

9

Talented people Latest technology

nt

DORIS HABEDANK SALES REPRESENTATIVE

o.”

6 YEARS @ STRAUMANN

nn_2014_English_1 9

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 LEE INTERNATIONAL REGULATORY MANAGER 7 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 LUCOT GLOVEBOX OPERATOR/ASSEMBLY 2 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 GÜNTER DESIGN ENGINEER 20 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.

09.03.2015 16:51

nn_2014_English_1 10

10

Roxolid

Reduced invasiveness 1 opening doors to treatment Tensile strength [MPa]

1000 ~80%

~20%

800

600

~50%

400 ASTM TiGr42

Straumann TiGr4 cold-worked3

Straumann Roxolid3

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 file for Straumann cold-worked titanium and Roxolid implants.

ROXOLID FOR ALL Biocompatibility, 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 Straumann 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 treatment 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.

09.03.2015 16:51

11

4 mm

our 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 procedures 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.

THE 4 MM ‘SHORT IMPLANT’ is available in various configurations and diameters

These and other factors make short implants an attractive option, often providing a completely different strategy for implant placement. 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.

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.

Straumann_2014_English_1 11

THE LOXIM TRANSFER PIECE – PERFECTING HANDLING Over the years, Straumann has worked hard to perfect 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 exceptionally 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.

09.03.2015 16:51:29

12

Letter to shareholders

Letter to shareholders

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

DEAR SHAREHOLDER,

FINANCIAL PERFORMANCE REVENUE AND PROFITABILITY AHEAD OF

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 strategic 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 building 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.

Straumann_2014_English_1 12

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 restructuring 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

09.03.2015 16:51:33

Letter to shareholders

rose 56% to CHF 158 million, with the margin reaching 22%. Economic profit, which is a performance indicator 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 further 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.

13

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 minimize 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 distinguish it as a ‘new-generation’ tapered implant. MORE COMPETITIVE PROSTHETIC SOLUTIONS

STRATEGY IMPLEMENTATION The 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 augmentation – saving trauma, time and cost (p. 10 f.).

While implants provide the basis of modern tooth replacement systems, the ‘bite’ comes with prosthetics. 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 angulated 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 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 campaigns 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

Straumann_2014_English_1 13

In April we joined forces with botiss biomaterials, Europe’s second largest supplier of oral tissue regeneration 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.

09.03.2015 16:51:33

14

Letter to shareholders

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. Consequently, the trend in innovation is moving from technological breakthroughs to sales processes, holistic approaches and product refinement (as the aforementioned 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 network (see p. 87) and from having a broad sales team in direct contact with customers. In 2014, we continued to invest in research and development 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 innovation 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 trademark. We also continued to invest in training and education, to expand the pool of dentists offering implant procedures, to enhance the standard of care and to ensure long-lasting satisfaction.

TARGETING UNEXPLOITED GROWTH OPPORTUNITIES EXPANDING OUR REACH IN CHINA AND LATIN AMERICA

China is one of the most exciting markets for Straumann 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 sector more effectively in addition to broadening our

Straumann_2014_English_1 14

reach and controlling our customer base. We took a major step towards these strategic imperatives by taking 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, making 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-proportionally 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 general 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 Curriculum. The partnership will foster the interdisciplinary relationship between specialists, GPs and labs to improve collaboration in referring patients and in coordinating treatment plans. This approach will

09.03.2015 16:51:33

Letter to shareholders

15

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

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

TAPPING INTO THE GLOBAL VALUE SEGMENT

BUILDING A HIGH PERFORMANCE ORGANIZATION

The attractiveness of our business and the economic environment have stimulated a sharp increase in local ‘value’ players, who offer implant and prosthetic products at lower prices than the premium segment. Many are ‘copycats’. Few offer the high levels of service, training, support, experience, innovation and longterm 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 distributing the Neodent implant system and have been working towards launching Medentika prosthetics. In 2015, Neodent will be consolidated in our financial statements. A COMMON TECHNOLOGY PLATFORM

In order to provide complete solutions we forged several 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 technology for prosthetic fixtures, were two additions to this platform in 2014. Our full implant, prosthetic, CADCAM and regenerative range make Straumann a comprehensive onestop shop. Moving ahead, we will focus on becoming the total solution provider for tooth replacement, through offering conventional, semi-digital and

Straumann_2014_English_1 15

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 challenges, our employees have again demonstrated the Straumann spirit of ‘simply doing more’, helping us to outperform, to expand and to deliver an impressive 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 performance culture, which we believe starts at the top of the company. In 2014, we embarked on a ‘cultural journey’ to foster and promote delegation, empowerment, taking responsibility, risk-taking, challenging, and creative thought, which are predominant behavioral styles in high-performance organizations (see p. 88). Following 360° assessments of the leadership 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

09.03.2015 16:51:33

16

Letter to shareholders

reflects the passion for reliability, which is our trademark, 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 expectations – for example: lasting function and esthetics, minimum discomfort and inconvenience, lower prices, shorter time to teeth, ‘immediate’ solutions, metalfree 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 treatment has literally changed their lives – largely because of restored self-confidence. This fully reflects our purpose 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 initiatives in 2014 (see p. 92 ff.). We are committed to continuing our focus on sustainable 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 achieving 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 revenues 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 Straumann’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 modestly 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.

Straumann_2014_English_1 16

09.03.2015 16:51:34

Letter to shareholders

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

17

REFERENCES/FOOTNOTES 1 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.

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 confidence in our company. Yours sincerely

GILBERT ACHERMANN Chairman of the Board of Directors

MARCO GADOLA Chief Executive Officer

26 February 2015

Straumann_2014_English_1 17

09.03.2015 16:51:34

18

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

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

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

Straumann_2014_English_1 18

09.03.2015 16:51:41

nn_2014_English_1 19

19

A job that helps to improve lives BRUNO ZBERG SENIOR 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, committed 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 STANZEL GLOBAL PRODUCT MANAGER 3 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 GRAVINO GRAPHIC DESIGNER 3 YEARS @ STRAUMANN

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

09.03.2015 16:51

nn_2014_English_1 20

20

Straumann PURE Ceramic Implant More than esthetic advantages

Straumann PURE uses a monotype design for reliability

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 predictability of ceramic materials. Straumann has overcome this hurdle through an innovative manufacturing process and testing procedure (see far right).

09.03.2015 16:51

21

100% tested 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 implants with similar performance, flexibility and predictability to their metal predecessors will undoubtedly change implant dentistry. Straumann PURE may be a first step in this direction.

ZLA SURFACE The esthetic properties are exceptional with a translucent ivory color – like natural tooth roots – and a specially-developed ZLA surface to accelerate the healing process and promote highly predictable 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 dioxide) in single tooth gaps in the maxilla and mandible. EAO 2013, Poster 252, Clin. Oral Impl. Res. 24 (Suppl. s9), 2013, p. 123.

PURE confidence based on thorough examination and rigorous testing.

Straumann_2014_English_1 21

09.03.2015 16:51:52

22

Management commentary Business model & objectives

Management commentary Contents

Straumann_2014_English_1 22

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

09.03.2015 16:51:52

Management commentary Business model & objectives

23

Business model & objectives STRAUMANN IN BRIEF WHO 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 provide 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 supplies dental implants, instruments, CADCAM prosthetics and tissue regeneration products for use in tooth replacement and restoration solutions or to prevent 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.

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

OUR PURPOSE AND GUIDING PRINCIPLE Straumann wants to be the provider of choice for dental 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 employees. In 2014, we formulated a new engaging vision that reflects the Group’s purpose, priorities and strategy: 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 BELIEFS RELIABILITY IS OUR TRADEMARK

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

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 universities, clinics, and research institutes to further increase the standard of patient care. Through a unique collaboration 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

Straumann_2014_English_1 23

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 service excellence.

09.03.2015 16:51:52

24

Management commentary Business model & objectives

OUR BUSINESS

Oral tissue regeneratives

Regenerative dentistry

CADCAM prosthetics

Restorative dentistry

Implants & abutments, etc.

Implant dentistry

STRAUMANN OPEN DIGITAL WORKFLOW Intra-oral scanning

CADCAM

ACHIEVING MORE IS OUR FUTURE

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

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

Straumann_2014_English_1 24

Guided surgery

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,

09.03.2015 16:51:54

Management commentary Business model & objectives

25

OUR BUSINESS MODEL

STRAUMANN GROUP PREMIUM OFFERING

Biodenta

Education

COMMON TECHNOLOGY PLATFORM

Documentation

botiss biomaterials

Medentika

Network

Createch Medical

Neodent

Global reach

Dental Wings

T-Plus

Quality

etkon

Service

Rodo Medical

Innovation / R & D

PRODUCTS & SOLUTIONS

CUSTOMERS

VALUE OFFERING

Regeneratives/Implants

Specialists

General dentists

MegaGen

Prosthetics

Labs

Patients 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 comprehensive 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 partners. Our customers (p. 84 ff.) are specialists, general dentists, and dental labs, which prepare the prosthetic restorations for the dentists. 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).

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.

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

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

Straumann_2014_English_1 25

09.03.2015 16:51:55

26

Management commentary Strategy

Strategy

Driving sustainable growth after a successful turnaround At the heart of Straumann’s strategy are three key priorities 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, investments, product launches and other achievements featured in this report.

ENGRAINING HIGH PERFORMANCE IN OUR CULTURE With regard to the first priority, the most remarkable achievement is that we have built further on the turnaround achieved in 2013 and delivered substantial revenue and volume growth, with improved profitability. Examples of this strategy in action include efficiency/ productivity gains in operations (see p. 48 ff.) and improved sales-force effectiveness achieved through a global training/coaching initiative combined with various tools to improve efficiency. While these achievements 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 performance initiatives in order to reduce our cost base further and thus preserve margins.

Straumann_2014_English_1 26

BECOMING THE PARTNER OF CHOICE IN THE GLOBAL PREMIUM AND VALUE SEGMENTS The most prominent example of our efforts to address the second strategic priority is our progress in penetrating 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 Straumann 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 companies that operate as separate brands with their own philosophy, sales force and value proposition. The companies 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 interest as a ‘strategic’ or an ‘entrepreneurial’ investment, depending on the development of the company and the market.

09.03.2015 16:51:55

Management commentary Strategy

27

PORTFOLIO OF INVESTMENTS TO TARGET THE VALUE SEGMENT Company

Specialty

Reach

Key facts

Neodent (Brazil)

Offers full dental implant system Market leader in Bra- Founded 1993 and service. zil. Present in major Privately held implant markets Nearly 1000 employees through Instradent or distributors.

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 2005 Offers 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 America 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, Switzerland)

Offers comprehensive solutions Sold mainly in emerg- Founded 2007 for dentists and dental laborato- ing markets. Approx. 100 employees ries.

T-Plus (Taiwan)

Offers dental implants and related prosthetic components.

Sold mainly in Taiwan. Regulatory approvals in China, Europe & the US.

Straumann’s stake

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

Founded 2009. Offers Approx. 43% to be acquired opportunity to tap into in 2015; with options to the lower end of the value increase to 90% by 2020. segment and into the Chinese value market. 20 employees

KEY BRANDS BY SEGMENT AND GEOGRAPHY

Implant systems

Implants

Europe1

NAM

LATAM

APAC

Neodent

Neodent

Neodent

MegaGen

Biodenta

Biodenta

T-Plus

Medentika

MegaGen

Biodenta

MegaGen Prosthetics

Neodent

Neodent

Medentika

1

Abutments

Medentika

Precision bars/bridges

Createch

MegaGen T-Plus

Createch Prosthetics for 3rd party implants

Neodent

Biodenta Medentika

Biodenta

in selected countries

Straumann_2014_English_1 27

09.03.2015 16:51:55

28

Management commentary Strategy

TECHNOLOGY PLATFORM OF OWN COMPANIES AND PARTNERS Company

Activities

botiss biomaterials Oral tissue regeneratives (Germany)

Reach

Key facts

Straumann’s stake

International

Europe’s second largest supplier.

Secured loan of CHF 3.6 million; option to obtain up to 30% in 2017

Createch Medical (Spain)

Specializes in high-end CADCAM Sold mainly in Spain, Established 2006; bridges, bars and abutments for Germany and other 30 employees multiple implant systems. markets in Europe.

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 Straumann and leading dental companies in over 45 countries.

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

30% acquired in 2011; 14% added in 2012

etkon (Germany)

Centrally milled CADCAM prosthetics.

Global through Straumann

Established 2000; acquired 2007

Fully-owned

Start-up company

Established 2009

12.5% acquired 2014

Rodo Medical (USA) Prosthetic fixture devices

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.

strategic approach. In 2014, we took over distribution from our former distributor and began implementing a hybrid model with our own subsidiary, consultative sales force and a network of independent distributors (see p. 58).

To drive the international commercialization of these brands, we created the Instradent business platform in 2014. By year end, Instradent had established subsidiaries 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.

A number of initiatives related to our third strategic priority were completed in 2014. For instance, successful 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.

CHANGED DYNAMICS OF CORE MARKETS

Penetrating other attractive segments and geographies 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 recent years, tapered-design implants have become widely established and account for more than 50% of implants sold today. One of our strategic initiatives is to compete in this segment, resulting in the development of a new generation Bone Level Tapered implant in Roxolid and with the SLActive surface. This has been very well received and the full market release is underway.

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

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.

Straumann_2014_English_1 28

09.03.2015 16:51:56

Management commentary Strategy

The single-tooth package is designed for starters in implantology. Since the general practitioner segment is growing significantly – especially in the US – we have established partnerships with Patterson Dental (for distribution) and SPEAR (for education) to increase our reach to GPs in a responsible and low-risk way. Market dynamics in the restorative business present a challenge. Price pressure is intense and differentiation 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 CADCAM 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.

29

OUTLOOK Recent consolidation in our industry raises the question 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 changing market and environment carefully and may adapt our strategy accordingly.

Another initiative was the launch of our cost effective Variobase abutment, which has enabled us to compete more effectively against copies of our original standard prosthetics.

BECOMING A TOTAL SOLUTION PROVIDER Our 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 workflows supported with related services. This approach 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.

Straumann_2014_English_1 29

09.03.2015 16:51:56

30

Management commentary Products, services, solutions

Products, services, solutions

Meeting treatment needs, adding convenience, reducing costs, saving time, adding value STRAUMANN PRODUCTS CADCAM prosthetics

Emdogain

Membranes

Bone augmentation materials

Soft Tissue and Bone Level Implants (Roxolid, Titanium, Ceramic)

Restorative components

SLA/SLActive surface

Sectional overview of Straumann’s products.

Straumann_2014_English_1 30

09.03.2015 16:51:57

Management commentary Products, services, solutions

SOLUTIONS ARE OUR BUSINESS

31

THE STRAUMANN DENTAL IMPLANT SYSTEM

For more than six decades, Straumann has been innovating, developing, testing and refining products that address real patient needs and contribute to quality of life. We have also been combining products, technologies, 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 practitioners as well as dental laboratories in procedures that range from saving compromised teeth, to individual 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 REPLACEMENT 2014 marked the 40th anniversary of Straumann’s Dental Implant System. Covering all indications, it comprises 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 STRAUMANN SOFT TISSUE LEVEL IMPLANT Straumann pioneered the Soft Tissue Level Implant, which simplifies soft tissue management and prosthetic 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 IMPLANTS In contrast to soft tissue level designs, bone level implants have prosthetic connections that are below

Straumann_2014_English_1 31

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.

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 majority 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 prosthetics and in digital dentistry. Substitution of standard implant prosthetics with digitally individualized components is an important trend. Customers appreciate the advantages of high-precision CADCAM solutions, since they offer efficiency gains for clinicians as well as time/cost savings, greater comfort and lasting satisfaction for patients.

COMPUTER-AIDED RESTORATIVE SOLUTIONS Computer-aided design/manufacturing (CADCAM) is used to design and fabricate prosthetic crowns, bridges, onlays and inlays more efficiently than traditional methods. The cornerstones of our CADCAM system are its software (CARES Visual) for scanning, designing and ordering, and our milling centers in Germany 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.

09.03.2015 16:51:58

32

Management commentary Products, services, solutions

Thanks to our open system, users have several data input possibilities and the option of producing prosthetics through the CARES validated workflow (covered 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 corresponding 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.

SERVICES MORE THAN PRODUCTS To 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 mentoring, 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.

REGENERATIVE SOLUTIONS

CLOSER TO CUSTOMERS

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

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 center for customers in need of assistance. Callers are quickly linked to a specialist for product support.

At the 2014 ITI World Symposium in Geneva, Straumann and Berlin-based botiss biomaterials announced a partnership to provide complete oral tissue regeneration 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 customers can obtain everything for a complete solution from one company. The distribution of the respective products began in the fourth quarter 2014, while regulatory clearances still have to be obtained in the American and Asian markets .

OUTLOOK (PRODUCTS) We continue to work on solutions to improve productivity, 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.

Straumann_2014_English_1 32

CARES SCAN & SHAPE Scan & 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, precision and convenience, they benefit from original parts and our guarantee – without having to invest in scanning equipment or software.

EXPANDING TRAINING & EDUCATION Long-term success and patient satisfaction depend on education and the experience of the dental professional. Straumann offers a broad educational program, including classic implant dentistry, tissue regeneration and state-of-the-art digital solutions, covering all proficiency levels and relevant specialties. 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 universities. Courses are offered around the world, with the highest concentration in North America and the most rapid increase in China, where Straumann is

09.03.2015 16:51:58

Management commentary Products, services, solutions

33

investing significantly in order to build a consultative sales force and a local training and education organization.

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

GUARANTEED PEACE OF MIND

REFERENCES/FOOTNOTES 1 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.

Straumann implants are covered by a lifetime guarantee (void if our implants are combined with other manufacturers’ components). Our abutments and restorations come with a limited guarantee.

THE E-SHOPPING EXPERIENCE The 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 generated through orders coming through the e-shop.

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

COMPREHENSIVE PATIENT INFORMATION Research suggests that every other patient consults the internet before, after and sometimes even during the consultation. Based on the information found, patients choose a treatment or a dental professional that is tailored to their needs. The Straumann Patient Pro marketing solution is a comprehensive 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 customers 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 essential for sustaining high treatment standards and success 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

Straumann_2014_English_1 33

09.03.2015 16:51:58

34

Management commentary Innovation

Innovation

Driven by customers – focused on commercial success

STRAUMANN IDEA PORTAL – WHERE THE IDEAS HAVE COME FROM ¢ Straumann employees ¢ Dental professionals ¢ Other companies ¢ Universities & clinics ¢ Other

6% 8% 35%

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

12% 6% 38% 10%

20%

31%

Straumann’s 60 year story is one of successful inventions that have set industry standards and improved lives – especially in the field of implantology. 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 pipeline projects.

34%

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

INNOVATION PROCESS REFINED The pace of change in our industry has accelerated, so that dental implants are becoming mass products. At the same time, the trend in innovation is shifting from groundbreaking technological breakthroughs to sales processes, holistic approaches and

Straumann_2014_English_1 34

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, clinicians, employees and other stakeholders to submit

09.03.2015 16:51:59

Management commentary Innovation

35

A STOCKED INNOVATION PIPELINE 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

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.

ideas in a framework that assures confidentiality and respects intellectual property. The review process ensures that we focus on ideas that have a high probability of commercial success and address customer 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.

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

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 summarized in the table above.

Straumann_2014_English_1 35

PRECLINICAL RESEARCH – THE SCIENTIFIC FOUNDATION It 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.

09.03.2015 16:51:59

36

Management commentary Innovation

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: threeyear 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 biomechanical 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 demonstrates 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 Implant loss influenced by Supplement of brand; Straumann ahead of the Journal of 7 other brands named Dental Research (epub)

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

CLINICAL RESEARCH – BUILDING THE EVIDENCE Straumann’s products and technologies are thoroughly evaluated within a defined and streamlined global clinical study program. This may comprise single- and multi-center studies, as well as investigator-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 studies (NIS), with a range of patients and indications treated in daily practice conditions.

Straumann_2014_English_1 36

In 2014, an impressive body of scientific evidence on Straumann products was published in peerreviewed journals. Very few implant companies perform clinical studies on this scale. The compelling results provide clear reasons why customers should trust in Straumann products rather than undocumented 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 Insurance Agency, they gained access to data on 11 311 implants in 2765 patients. In addition, a clinical evaluation was performed on 596 patients 9 years after treatment. A key observation was that implant

09.03.2015 16:51:59

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 process 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 significantly in research and development. FOOTNOTES 1 Derks, J, et al., Dept. of Periodontology, Institute of Odontology, Sahlgrenska Academy, University of Gothenberg.

Straumann_2014_English_1 37

09.03.2015 16:51:59

38

Management commentary Markets

Markets

Competing in a CHF 7 billion market

THE GLOBAL DENTAL IMPLANT MARKET BY REGION 1

THE GLOBAL DENTAL IMPLANT MARKET BY SHARE OF SALES 1

¢ Europe ¢ North America 15 – 20% ¢ Asia/Pacific ¢ Rest of the World

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

5 – 10% 40 – 45%

20%

41%

17%

30 – 35% 4%

THE MARKET FOR IMPLANT DENTISTRY The implant dentistry market comprises dental implants 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 contract, 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 STRUCTURE The market is divided into three segments: premium, value, and discount. Companies in the premium segment are distinguished by their clinical documentation,

Straumann_2014_English_1 38

6%

12%

innovative products and solutions, broad product ranges, training, education and superior customer service. 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 Createch in 2013, MegaGen in 2014 and T-Plus in 2015. The Group’s strategy is to penetrate the non-premium segments of the tooth replacement market via segregated brands, without compromising its premium leadership.

09.03.2015 16:52:00

Management commentary Markets

DENTAL IMPLANT MARKET BY SEGMENT

39

THE CROWN AND BRIDGE MARKET (IN VALUE TERMS) Manual production

PREMIUM

Premium offering, based on innovative, clinically-proven products and comprehensive services at premium price

VALUE

Standard products, often only regional presence, value price

75 80% CADCAM production

10 15% In-lab milling

DISCOUNT

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

5 10% Centralized milling

~ 5% Chairside milling

In value terms

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.

Five leading multinational manufacturers make up the premium implant segment, which currently accounts for almost 60% of the global market. The non-premium 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 midprice 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 DENTISTRY Conventional 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 (Computer-Aided Design; Computer-Aided Manufacturing), saving time and increasing accuracy. Further advances have been made through improved high-performance

Straumann_2014_English_1 39

translucent ceramics, which reduce working time and offer exceptional esthetics and function. The market for CADCAM dentistry comprises pros1 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 (toothborne 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 dentists (GPs) outsource CADCAM manufactured crowns and bridges, usually to a local lab. About two thirds of

09.03.2015 16:52:01

40

Management commentary Markets

THE ORAL TISSUE REGENERATION MARKET (IN VALUE TERMS)

DENTAL IMPLANT PENETRATION

Implants sold per 10 000 population in 2014 1 200 ¢ Europe ¢ North America ¢ Asia/Pacific ¢ Rest of the World

~5%

35-40%

100

55-60%

>60%

India

China

UK

Russia

Japan

Canada

Australia

US

France

Portugal

Netherlands

Sweden

Germany

Switzerland

Brazil

Austria

Italy

0 Korea

¢ Straumann‘s share

Spain

GBP 25 000 raised

Other

Straumann AID

Free products for underprivileged individuals

Ongoing

In each case clear prerequisites and goals were set.

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 AID Straumann 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 collaboration with dentists from the ITI network, who provide the treatment without charge, while Straumann makes the respective product donations.

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

Straumann_2014_English_1 93

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 PATIENTS We continued our longstanding commitment to helping 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 implants 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 projects we support, which is reflected in our long-standing relationships and commitments (see table above).

09.03.2015 16:53:23

94

Management commentary Risk and sustainability report

SUPPORT FOR YOUNG DENTISTS We 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 respective projects.

NEW AWARD FOR YOUNG PROFESSIONALS Apart from this, we created a new annual award together with botiss biomaterials, our partner in oral tissue regeneration, to foster and encourage the development 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 relevant stakeholders as a caring, responsible corporate citizen. This supports our business and thus adds value for our shareholders.

OUTLOOK In 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.

Straumann_2014_English_1 94

09.03.2015 16:53:23

Management commentary Risk and sustainability report

95

Global production & logistics

New product launches, technologies and efficiency gains

FIFTH CONSECUTIVE YEAR OF EFFICIENCY IMPROVEMENTS In recent years we have made significant successive efficiency improvements in Production and Logistics despite the unpredictability of our changing environment. 2014 was outstanding because, for the fifth consecutive year, we exceeded our ambitious costimprovement 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 INNOVATIONS One of our major challenges was to support the conversion 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 innovative processes for machining, surface treatment and fracture-resistance testing of each implant. As the year progressed, we began building up production 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 undertaking, 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.

Straumann_2014_English_1 95

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.

STRONG VOLUME GROWTH COVERED WITHOUT STAFF INCREASES Strong 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 investments 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 optimal 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 technology transfer from Villeret to Andover, including documentation and regulatory supervision.

09.03.2015 16:53:27

96

Management commentary Risk and sustainability report

STRAUMANN’S PRODUCTION SITES 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

QUALITY SYSTEM ENDORSED

OUTLOOK

Our training program in Lean Six Sigma skills has had a significant part in achieving our efficiency and productivity goals. Production costs were reduced thanks to the insourcing of packaging, laser marking and paperless (electronic) instructions for use. We further simplified the packaging process by harmonizing packs for implants and prosthetics and by integrating new suppliers in the system.

Superior 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.

Once again the quality management system for production 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 PROLIFERATION

In 2015, our focus will be on launching the Bone Level Tapered implant, the botiss rollout and the introduction of additional CADCAM products. We are expanding our Arlington factory significantly and optimizing workflows to meet demand for screwretained 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 paperless 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.

Not 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.

Straumann_2014_English_1 96

09.03.2015 16:53:27

Management commentary Risk and sustainability report

97

Environment

Striving 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 manufacturers. Adherence to strict quality-control protocols for identity, purity and content testing of raw materials ensures that our products function safely and effectively. Full documentation of all manufacturing 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 Straumann 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 activities, 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 manufacturing industry.

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

Straumann_2014_English_1 97

the end of the reporting year: Villeret (Switzerland), Markkleeberg (Germany), Malmö (Sweden), Andover and Arlington (USA); and for our Group headquarters in Basel. The report does not include our former laser scanner production facility in Gräfelfing, Germany, which was transferred to Dental Wings during 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 titanium-zirconium alloy on computerized CNC lathes. In the machining process, cutting oil is used as a cooling agent, followed by sand-blasting, acid etching, cleaning, packaging, and sterilization.

TITANIUM AND OTHER RAW MATERIALS In 2014, demand for existing products and the launch of several new products led to increased production 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 production, 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

09.03.2015 16:53:27

98

Management commentary Risk and sustainability report

TITANIUM RECYCLING

(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.

HEATING ENERGY

2013

CO2 EMISSIONS PER CAPITA

(GWh)

(tons)

8.6

2013

2014

2013

2014

4.8

2.6

4.7

2014

10.6

2.5

-3 %

+19 % REFUSE

PAPER CONSUMPTION PER CAPITA

(tons)

-5 % WATER

(m3)

(1000 sheets) 2013

153.6 2013

2014

4289

151.3

2013

30 597

-1.5 % 2014 2014

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

Straumann_2014_English_1 98

3979

-7 %

29 975

-2 %

09.03.2015 16:53:28

Management commentary Risk and sustainability report

thus use less titanium per part. Additionally, trimming 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 zirconium oxide, and polymethylmethacrylate (PMMA) are used in the production of crown and bridge solutions. Decreases in cobalt chrome and PMMA use and an increase in zirconia use reflect shifts in relative demand between these different products.

OPERATING MATERIALS The 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 documentation requirements, leaner processes allowed us to decrease total and per-capita paper use.

ENERGY USE AND GREENHOUSE GAS EMISSIONS The increase in electricity use was significantly below our volume increase in production, and percapita 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 climatic 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 differentiated in this report by direct (Scope 1) emissions from sources like the burning of natural gas, and indirect (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.

Straumann_2014_English_1 99

99

WATER AND WASTE Water consumption dropped slightly despite growth in production. Generation of untreated wastewater, containing low concentrations of cleaning detergents, 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-contaminated rags, filters, and other debris, and some electronic 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 headquarters in Basel offset some increases at production sites. This was partly due to the restructuring in 2013, which involved headcount reductions and departmental relocations.

OUTLOOK Environmental considerations have become a fundamental 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 modification is to feed weather forecast data into our building control systems. This would allow us to quickly adjust heating and cooling to outside temperature shifts and save energy. In Villeret, we are working on a project to make the production process paper-free by 2016, which should significantly reduce paper consumption. FOOTNOTES 1 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 environmental 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.

09.03.2015 16:53:28

100 Management commentary Risk and sustainability report

ENVIRONMENTAL KEY PERFORMANCE FIGURES Performance indicator

Product raw materials

Titanium

kg

14 657

14 602

kg

10 634

8 562

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

Recycled

kg

31 688

34 569

Consumption

kg

34 656

31 436

Recycled

kg

19 495

18 250

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

Consumption

kWh

16 690 808

16 253 169

Consumption per capita1 kWh/employee

14 797

14 980

Electricity

Heating2

Emissions

Water

CO2 emissions3

Water

Untreated waste water Waste

Diverse waste

Refuse

1 2

3

2013

Consumption

Cleaning solvents

Energy

2014

Recycled (consumption minus product) Cobalt chrome

Operating materials

Unit

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 kWh/employee per capita1

4 151

4 458

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 tons/employee per capita1

2.50

2.64 30 597

Consumption

m3

29 975

Consumption per capita1

m3/employee

27

28

Disposal

kg

11 690

11 834

Hydroxide sludge

kg

13 543

13 402

Contaminated material

kg

13 841

12 595

Solvents

kg

3 217

3 217

Total

kg

151 367

153 616

Per capita1

kg/employee

134

142

Per capita figures refer to employees at the relevant reporting sites only. 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. Scope 1 covers CO2 emissions directly emitted by sources owned or controlled by Straumann such as heating boilers, while Scope 2 comprises emissions generated in the production of the electricity, heat or steam that we consume.

Straumann_2014_English_1 100

09.03.2015 16:53:29

101

Straumann_2014_English_1 101

09.03.2015 16:53:29

“Developing BLT has been like watching your baby come to life and grow up.”

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

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 DARD HEAD SURGICAL & CLINICAL SCIENCE

Straumann_2014_English_1 102

09.03.2015 16:53:37

103

Sophisticated skills and compassion

eir

at

nn_2014_English_1 103

STEFFEN KÜHNE SENIOR DEVELOPMENT ENGINEER 8 YEARS @ STRAUMANN

Steffen once designed high tech axles for cars. Now he’s passionate 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 DARD HEAD SURGICAL & CLINICAL SCIENCE DEPARTMENT; PROFESSOR, NYU AND COLUMBIA UNIVERSITY 11 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-topeer partnership for oral surgeons and clinicians, which promotes professional mentoring and advances surgical techniques.

JÖRG SCHAUB DESIGN ENGINEER 10 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.”

09.03.2015 16:53

104

Bone Level Tapered Implant A new generation

Implants 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 challenging 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 differentiated new-generation product made of Roxolid with the SLActive surface, which offer high strength and fast healing.

ANTICIPATED GROWTH OF THE TAPERED IMPLANT SEGMENT 15

10

nn_2014_English_1 104

5

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 ¢ Europe

¢ North America

¢ Latin America

¢ Asia/Pacific

Source: Millenium Research Group, 2014

09.03.2015 16:53

105

60% of implants are tapered/conical 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 regulatory approvals are still pending.

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

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.

CLEARCHOICE CHOOSES STRAUMANN BLT and Pro Arch were instrumental in the decision by ClearChoice to choose Straumann as a preferred supplier.

Bone Control Design allows optimized crestal bone preservation and soft tissue stability. Roxolid is a unique material with excellent mechanical properties. Apically tapered implant body design allows underpreparation and supports a high primary stability in soft bone.

Straumann_2014_English_1 105

CrossFit connection makes handling easier and provides confidence for component positioning.

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.

SLActive surface allows fast and predictable osseointegration.

09.03.2015 16:53:49

106 Corporate Governance

Corporate governance Contents

Straumann_2014_English_1 106

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

09.03.2015 16:53:49

Corporate governance 107

PRINCIPLES The principles and rules of Straumann’s corporate governance are laid down in the Articles of Association 1, the organizational regulations, the code of conduct, and the charters of the Board Committees. These principles and rules are the basis of our corporate governance disclosures, which comply with the Directive on Information relating to corporate governance published 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 STRUCTURE Straumann Holding AG is a listed stock corporation incorporated under the laws of Switzerland and domiciled and registered in Basel. Information about the company’s shares, which are traded on the main segment of the SIX Swiss Exchange under the symbol STMN, is provided on p. 161 f. Straumann Holding AG is the ultimate parent company 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-controlling interests are held (see table on p. 109).

OPERATIONAL STRUCTURE The 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.

Straumann_2014_English_1 107

The following changes occurred in 2014: On 1 December Dr Peter Hackel rejoined Straumann and took over as Chief Financial Officer. He succeeds Thomas Dressendörfer, who stepped down as CFO on 1 December 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 December 2014. Marco Gadola has taken over his responsibilities until a successor will be appointed.

LEGAL STRUCTURE LISTED 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 Headquarters 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 presented 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).

09.03.2015 16:53:49

108 Corporate governance

Principal Group Companies Ownership & share capital STRAUMANN HOLDING AG Basel, Switzerland CHF 1 567 655

INSTITUT STRAUMANN AG Basel, Switzerland

STRAUMANN AB Mölndal, Sweden

CHF 100 000

SEK 100 000

STRAUMANN MANUFACTURING, INC Andover, USA USD 1

STRAUMANN ITALIA SRL Milan, Italy

BIORA AB Malmö, Sweden

EUR 270 000

SEK 950 152

INSTRADENT ITALIA SRL Milan, Italy

STRAUMANN AS Oslo, Norway

EUR 10 000

NOK 1 000 000

INSTRADENT AG Basel, Switzerland CHF 100 000

STRAUMANN DANMARK APS Brøndby, Denmark DKK 125 000

INSTRADENT USA, INC Andover, USA

STRAUMANN OY Helsinki, Finland

USD 1

EUR 32 000

STRAUMANN VILLERET SA Villeret, Switzerland

STRAUMANN SARL Marne-la-Vallée, France

CHF 9 000 000

EUR 192 000

STRAUMANN HOLDING DEUTSCHLAND GMBH Freiburg, Germany

MANOHAY DENTAL SA Madrid, Spain

EUR 25 000 STRAUMANN GMBH Freiburg, Germany EUR 200 000 INSTRADENT DEUTSCHLAND GMBH Hügelsheim, Germany EUR 25 000 ETKON GMBH Gräfelfing, Germany EUR 326 000 STRAUMANN GMBH Vienna, Austria EUR 40 000 STRAUMANN SRO Prague, Czech Republic CZK 200 000

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 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

At 31 December 2014 Values indicate share capital in each case

Straumann_2014_English_1 108

09.03.2015 16:53:49

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 Straumann’s investments). The platform operates under the name Instradent. By year end, Instradent had established 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 capital rights in the companies listed in the table below.

PARTICIPATIONS IN OTHER COMPANIES With 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 comprehensive solutions for dentists and dental laboratories, focused on emerging markets with operations in Taiwan 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 provide 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 conditional call option to acquire shares of botiss medical AG which, if exercised, could lead to a stake in the German company of up to 30% in 2017. In the third quarter, Straumann acquired a 12% stake in RODO Medical, Inc. a California-based, privatelyheld developer of dental prosthetic fixture devices. In the fourth quarter, Instradent AG entered an agreement 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 Createch 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 applications 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 shareholdings of more than 10%.

STRAUMANN’S PARTICIPATION AND REPRESENTATION IN OTHER COMPANIES Non-consolidated company

Location

Activities

Capital rights held

Straumann representation

Createch Medical SL

Mendaro (Spain)

CADCAM prosthetics for multiple 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 49% manufacture of dental implants and related prosthetic components

2 Board seats (Marco Gadola, Peter Hackel)

Medentika GmbH Medentika Implant GmbH

Hügelsheim (Germany)

Implant prosthetics & dental implants

51%

At general meeting, but not controlling interest

Open Digital Dentistry AG (in liquidation; assets and activities transferred to Dental Wings)

Zug Dental prosthetics design, (Switzerland) software marketing

44%

n/a

RODO Medical, Inc.

San Jose (USA)

12%

1 Board seat (Andy Molnar)

Straumann_2014_English_1 109

Prosthetics

09.03.2015 16:53:50

110 Corporate governance

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

¢ Switzerland ¢ Asia 21.8% ¢ Europe ¢ USA ¢ Rest of the World ¢ Non-registered & undisclosed 0.1%

21.8% 37.3%

53.2%

2.2%

8.3%

9.1%

10.5% 13.6% 22.1%

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

SHARE CAPITAL AND OTHER FINANCIAL INSTRUMENTS There have been no changes in Straumann’s share capital 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 Meeting 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.

Straumann_2014_English_1 110

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 registered shares. There are no restrictions on the transferability 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.

SHAREHOLDERS SIGNIFICANT SHAREHOLDERS In 2014, Straumann was notified of three transactions according to Art. 20 SESTA: – In May, Parvus Asset Management (UK) LLP, an independent investment management firm based in

09.03.2015 16:53:50

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 shareholder of Straumann. – In December, Parvus reported an internal restructuring which resulted in Parvus Asset Management (UK) LLP transferring its entire investment management business – including its stake in Straumann – to Parvus Asset Management Europe Limited.

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

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

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.

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

SHAREHOLDERS’ PARTICIPATION CONVOCATION OF GENERAL MEETINGS, AGENDA PROPOSALS The 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 Congress Center. Shareholders individually or jointly representing at least 10% of the share capital may request an extraordinary General Meeting. The request must be made to the Board of Directors in writing, stating the agenda items and motions. Invitations to the General Meeting are issued in writing 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 Directors 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

Straumann_2014_English_1 111

REGISTRATIONS IN THE SHARE REGISTER There 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 entitled to vote.

Only persons recorded in the share register as shareholders 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. Authorizations 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 RESTRICTIONS Each 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 shareholder 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 shareholders or shares.

09.03.2015 16:53:51

112 Corporate governance

NUMBER OF SHAREHOLDERS SHARES

31 Dec 2014

31 Dec 2013

1 – 100

5097

5756

101 – 1000

2428

2946

238

238

55

44

7

8

1 001 – 10 000 10 001 – 100 000 100 001 – 1 000 000 1 000 001 and more TOTAL

3

3

7828

8995

31 Dec 2014

31 Dec 2013

SHAREHOLDERS BY CATEGORY (in %)

Major private shareholders

37.3

37.6

Major institutional shareholders

22.1

28.9

Other institutional shareholders

10.5

16.8

8.3

9.5

21.8

7.2

31 Dec 20141

31 Dec 2013

Private individuals Non-registered and undisclosed shareholders

MAJOR SHAREHOLDERS (in %)

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

59.3

66.5

31 Dec 2014

31 Dec 2013

TOTAL Or at last reported date if shareholdings are not registered in the share register 2 Not registered in Straumann’s share register 3 Dropped below the 3% threshold in July 2014 1

CAPITAL STRUCTURE (in CHF 1 000)

Equity

736 836

631 380

(122 132)

(126 314)

857 400

756 126

1 568 (fully paid in)

1 568 (fully paid in)

Conditional share capital

32

32

Authorized share capital

0

0

15 676 549

15 676 549

Reserves Retained earnings Ordinary share capital

Number of registered shares 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

Straumann_2014_English_1 112

09.03.2015 16:53:51

Corporate governance 113

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.

QUORUMS The 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. Likewise, the chairman may repeat a ballot if he considers that the outcome is doubtful. In such a case, the preceding 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

Straumann_2014_English_1 113

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 Compensation 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 representative 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 published in the Investor Relations section of the company’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 reelection. Gilbert Achermann was elected as Chairman of the Board and Stefan Meister, Beat Lühti and Ulrich Looser were elected as members of the Compensation Committee. The Board appointed Dr h.c. Thomas

09.03.2015 16:53:51

114 Corporate governance

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 comprised seven non-executive members. No Director has been a member of the company’s Executive Management 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 FUNCTIONS None 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 supervisory bodies of significant foreign or domestic organizations, 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 perform more than 15 additional mandates (i.e. mandates 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 restrictions: – Mandates in enterprises that are controlled by the Company; – Mandates in enterprises that are performed at the instruction of the Company; and

Straumann_2014_English_1 114

– 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 control or under the same economic authority shall be deemed one mandate.

OPERATING PRINCIPLES OF THE BOARD OF DIRECTORS The Board of Directors meets for one-day meetings at least four times a year and as often as business requires. 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 company’s objectives and identifies opportunities and risks. In addition, it decides on the appointment and/or dismissal 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 independent 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 processes of the Group – To approve the strategic plan, the financial mediumterm plan and the annual budget of the Group – To approve the semi-annual financial statements – To approve the annual report, the compensation report and the annual financial statements and submit these to the annual general meeting

09.03.2015 16:53:52

Corporate governance 115

Board of Directors

GILBERT ACHERMANN CHAIRMAN Swiss, 1964 Board member since 2009

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

AUDIT COMMITTEE

COMPENSATION COMMITTEE

DR SEBASTIAN BURCKHARDT Swiss, 1954 Board member since 2002

ROLAND HESS Swiss, 1951 Board member since 2010

Chair

ULRICH LOOSER Swiss, 1957 Board member since 2010

DR BEAT LÜTHI Swiss, 1962 Board member since 2010

STEFAN MEISTER Swiss, 1965 Board member since 2010

Straumann_2014_English_1 115

Chair

09.03.2015 16:53:52

116 Corporate governance

STRAUMANN BOARD OF DIRECTORS – MATERIAL MEMBERSHIPS IN OTHER BOARDS Member

Commercial enterprise

Gilbert Achermann

Charity/other

Location

Function

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

CH

Board member

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

CH

Board member

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

CH

Board member

CH

Member, Board of trustees

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

Vice Chairman, Board of trustees

Misrock-Stiftung

CH

Member of the Board of trustees

F

Board member

International Team for Implantology Thomas Straumann

International Bone Research Association Sebastian Burckhardt

Qgel SA Fondation Bénina

Roland Hess

Straumann_2014_English_1 116

Societe Civile Immobilière Solivie

09.03.2015 16:53:52

Corporate governance 117

Member

Commercial enterprise

Ulrich Looser

Charity/other

Location

Function

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

Beat Lüthi

CH

Board member

Economiesuisse

CH

Board member

Schweizerische Studienstiftung

CH

Board member

Swiss American Chamber of Commerce: ‘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

APACO AG

CH

Board member

CTC Analytics AG

CH

CEO & Board member

INFICON Holding AG

Stefan Meister

Straumann_2014_English_1 117

CH

Chairman

American Chamber of Commerce

CH

Panel member

Industrieverband LaufenThierstein-Dorneck-Birseck

CH

Board member

Stiftung Behindertenwerk St. Jakob

CH

Member, Board of trustees

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

09.03.2015 16:53:53

118 Corporate governance

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

COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors has an Audit Committee and a Compensation Committee, each consisting of not fewer than three Board members with relevant background 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 Committee are elected by the General Meeting for a term of one year. In the event of a vacancy in the Compensation 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 committees 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

Board

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

2

Board member until 2014 AGM incl. 1 telephone conference Dissolved as of April 2014 4 Meeting preparation & follow-up/conference calls/minutes/bilateral meetings, product training, etc. 1 2 3

Straumann_2014_English_1 118

09.03.2015 16:53:53

Corporate governance 119

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 compensation 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 submit 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 compensation 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 proposal to the Board of Directors for approval, – Prepare agreements concerning payments to a new CEO or EMB member according to Article 4.3 – Articles 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 development 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 responsible 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 & Education is responsible for Product Management,

Straumann_2014_English_1 119

Customer Marketing, Marketing Communication, Training and Education Management. The Head of Instradent 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 management 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 encompasses management, business and financial reporting. The information is provided to the Executive Management 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 enterprise resource planning system, which now covers 97% of all business transactions of the Group’s fully consolidated 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 instrument for designing business processes, measuring progress towards financial goals and addressing potential financial issues before they occur. It also supports the design of business processes in order to achieve the desired level of control in terms of efficiency and effectiveness. The company’s approach is to ensure that internal controls are accurate, timely, robust, and receive appropriate management attention in each respect.

09.03.2015 16:53:53

ROLAND HESS

Straumann_2014_English_1 120

DR BEAT LÜTHI

ULRICH LOOSER

STEFAN MEISTER

09.03.2015 16:54:00

nn_2014_English_1 121

121

121

Board of Directors (From left to right)

ROLAND HESS From 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 companies within the Schindler Group. He joined Schindler in 1984 and rose through positions of increasing responsibility in controlling, 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 Harvard 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 LÜTHI Beat Lüthi is CEO and co-owner of CTC Analytics AG, Zwingen, a globally active medium-sized Swiss company in the field of chromatography 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 position of General Manager of the Swiss affiliate. In 1994, he completed 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

09.03.2015 16:54

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 Straumann 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 Straumann Board.

ULRICH LOOSER Ulrich 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 graduated 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 MEISTER Stefan 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 distribution 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 Haniel & Cie GmbH, a family-owned, international group of companies 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

nn_2014_English_1 122

09.03.2015 16:54

nn_2014_English_1 123

123

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 BURCKHARDT Sebastian 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 following studies at New York University School of Law. He is a partner at the Vischer AG law firm in Basel. Sebastian Burckhardt has been a member of the Board of Directors 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 knowledge extends well beyond legal matters and includes many years’ experience on corporate boards.

DR H.C. THOMAS STRAUMANN Thomas Straumann’s skills in precision engineering were complemented 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

09.03.2015 16:54

124

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 ACHERMANN Gilbert 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 executive 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.

nn_2014_English_1 124

09.03.2015 16:54

125

DR SEBASTIAN BURCKHARDT

Straumann_2014_English_1 125

DR H.C. THOMAS STRAUMANN

GILBERT ACHERMANN

09.03.2015 16:54:15

126 Corporate governance

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 assessment undertaken and the decisions arising from it. Clear benefits of the Internal Control System include enhanced segregation of duties, increased control consciousness 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 deficiencies. 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 ‘independent’ and ‘objective’ assurance and consulting body, reporting directly to the CFO and to the Audit Committee of the Board of Directors. The main task of Corporate Internal Audit is to evaluate 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 promotes the exchange of best practices within the Straumann Group, proposes improvements, and monitors 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.

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 Committee, 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 Management’ on p.79 ff.).

EXECUTIVE MANAGEMENT BOARD The CEO and, under his direction, the other EMB members are responsible for the Group’s overall business and affairs, and day-to-day management. The EMB is also responsible for implementation of strategic deci-sions and stakeholder management. The CEO reports to the Board regularly, and whenever extraordinary 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 representations 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 supports 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 addressing 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 organizations, 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)

CORPORATE RISK MANAGEMENT

The Board of Directors is responsible for the overall

Straumann_2014_English_1 126

Art. 4.4 of Straumann’s Articles of Association states that no member of the EMB may perform more than

09.03.2015 16:54:15

Corporate governance 127

five mandates (i.e. mandates 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 one may be in a listed company. The following are exempt from the foregoing restrictions: – 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 control or under the same economic authority shall be deemed one mandate.

PricewaterhouseCoopers had served for nine consecutive 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 auditors 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)

974

Tax consultancy

0

1 093

0

0

Legal Transaction services

The Board of Directors and the EMB have not delegated any managerial powers to persons or companies outside the Group.

Other services

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 determining them for the members of the Board of Directors and the EMB and their related parties are disclosed in the Compensation Report on p. 138 ff and also in the audited financial statements on p. F 76 f.

AUDITORS The 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

Straumann_2014_English_1 127

31 Dec 2013

839

MANAGEMENT CONTRACTS

INTERNAL MANAGEMENT DEVELOPMENT

31 Dec 2014

Total audit fees

Total non-audit fees TOTAL 1

336

0

0

30

336

1 123

1 175

2 097

PWC until April 2014; EY from April 2014

INFORMATION POLICY Straumann is committed to a policy of open, transparent 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 summary 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 presentations in Europe and North America, Straumann held four quarterly financial results conferences for the media and analysts in 2014, two of which were

09.03.2015 16:54:16

128 Corporate governance Governance

Executive Management Board

CEO

SALES NORTH AMERICA

SALES WESTERN EUROPE

MARCO GADOLA

ANDY MOLNAR

GUILLAUME DANIELLOT

Straumann_2014_English_1 128

CFO

CUSTOMER SOLUTIONS AND EDUCATION

DR PETER HACKEL

FRANK HEMM

09.03.2015 16:54:16

Corporate governance 129

SALES CENTRAL EUROPE

SALES ASIA/PACIFIC

SALES LATIN AMERICA

WOLFGANG BECKER

DR ALEXANDER OCHSNER

MARCO GADOLA

RESEARCH, DEVELOPMENT & OPERATIONS

INSTRADENT MANAGEMENT

CORPORATE SERVICES

DR GERHARD BAUER

MARCO GADOLA A.I.

MARCO GADOLA

Straumann_2014_English_1 129

09.03.2015 16:54:16

130

FRANK HEMM

Straumann_2014_English_1 130

DR ALEXANDER OCHSNER

ANDY MOLNAR

GUILLAUME DANIELLOT

09.03.2015 16:54:23

nn_2014_English_1 131

131

Executive Management Board (From left to right)

FRANK HEMM Frank 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 Management 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 OCHSNER Alexander 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 industry 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.

09.03.2015 16:54

132

ANDY MOLNAR Andy 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 DANIELLOT Having 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 Business Administration at the ESC European School of Management in Paris. His professional career began in hospital product management – initially at Coloplast and then at B. Braun, as an international businessunit 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 Headquarters 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 BECKER Wolfgang Becker holds a number of business school diplomas including that of the St. Gallen Management Center. He began his professional 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

nn_2014_English_1 132

09.03.2015 16:54

nn_2014_English_1 133

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 BAUER Gerhard 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 leadership positions, where he has acquired considerable experience in both pharmaceutical products and medical devices. Prior to joining Straumann in 2010, Dr Bauer held managerial positions 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 increasing 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 HACKEL Peter 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 Project Management and Business Development role and rose to become Head of Group Controlling and Member of the Corporate Management 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.

09.03.2015 16:54

134

THOMAS DRESSENDÖRFER Thomas 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 Erlangen-Nuremberg, his career in finance has taken him through the healthcare and consumer products industries, as well as the personnel services, market intelligence, and mechanical engineering sectors in various countries. He rose through various senior positions including 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 GADOLA Marco Gadola has a strong executive track record in a broad range of global businesses. He rejoined Straumann in 2013 as CEO, having previously served as Chief Financial Officer and Executive Vice President Operations from 2006 to 2008, when he left to pursue a career development opportunity at Panalpina, a world leader in supply chain management. 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 positions in various countries. Before that, he worked for Sandoz International 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.

nn_2014_English_1 134

09.03.2015 16:54

WOLFGANG BECKER

Straumann_2014_English_1 135

DR GERHARD BAUER

DR PETER HACKEL

THOMAS DRESSENDÖRFER

MARCO GADOLA

09.03.2015 16:54:35

136 Corporate governance

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 traditional 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 Straumann 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 according 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 publications for current information.

Head of Investor Relations: [email protected] Tel. +41 61 965 11 11 Head of Corporate Communication: [email protected] Tel. +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 company’s website. REFERENCES / FOOTNOTES 1 www.straumann.com/articles 2 www.six-swiss-exchange.com/news/notifications/major_ shareholders_en.html 3 Nimbus AG, Ziegelbrückstrasse 82, P.O. Box, CH-8866 Ziegelbrücke, Switzerland 4 www.straumann.com > ‘Investors’ > ‘Corporate Governance’ > ‘Annual General Meeting’

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 downloaded 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:

08_00_STR_AR2014_Corporate_Governance_6_en.indd 136

09.03.2015 17:43:05

137

08_00_STR_AR2014_Corporate_Governance_6_en.indd 137

09.03.2015 17:41:28

138 Compensation report

Compensation report Contents

Straumann_2014_English_1 138

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

09.03.2015 16:54:36

Compensation report 139

FOREWORD FOCUS OF THE COMPENSATION COMMITTEE IN 2014

granted. Furthermore, there were no increases in the salary or compensation of the CEO.

The 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 compensation principles and ensuring their continued appropriateness. These principles are anchored in our belief that a compensation system based on value creation drives and encourages sustainable performance, fosters entrepreneurship and creates an environment that supports loyalty – thus combining the interests of shareholders, management and employees. In addition, the Compensation Committee closely followed initiatives concerning talent management, succession planning and Straumann’s ‘Cultural Journey’ to become a high performance organization (p. 88).

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 reorganized 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.

MEASURES TO MITIGATE THE CURRENCY IMPACT

With respect to the long-term incentive plan, the target of Total Shareholder Return of 10% per annum over a 3-year period (TSR) was once again exceeded.

Due 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 Directors has agreed to a 28% reduction of their compensation compared with budget. The proposed changes are precautionary measures and in some cases are still subject to the formal agreement 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.

LOOKING AHEAD In 2015, the Compensation Committee will review the compensation system regularly and will continue its efforts to ensure that Straumann maintains its competitiveness 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 Meister Chairman of the Compensation Committee

PERFORMANCE APPRAISAL 2014 AND IMPACT ON COMPENSATION Having 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

Straumann_2014_English_1 139

09.03.2015 16:54:36

140 Compensation report

INTRODUCTION This report provides an overview of Straumann’s compensation principles and practices. It provides information on the remuneration of the general staff, management, 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 rewarding 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 General Meeting. The compensation system is built on principles designed to: – Align the interests of the leadership team and employees with those of our shareholders – Support our attractiveness as a global employer, helping us to recruit and retain an engaged workforce – Reward individuals according to clear targets – Encourage entrepreneurism, above-market performance, 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 STANDARDS

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

Board Members

Compensation Committee/Board of Directors

2014 AGM approved total compensation for BoD for period between the 2014 and 2015 AGMs

CEO

Chairman of the Board/Compensation Committee/Board of Directors

Executive Management

CEO

2014 AGM approved - Total fixed compensation for Executive Management Board 01.04.14–31.03.15 - Max LTI for Executive Management Board business year 2014 2015 AGM to approve: - STI payout for Executive Management Board for the 2014 business year

Senior Management

Executive Management Board

CEO

Management and staff

Line Management

Executive Management Board

RESPONSIBILITY FOR COMPENSATION

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 management for 1 April 2015–31 March 2016.

The 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 system that applies to the Directors and the executive management. It reviews the compensation principles and programs annually and benchmarks the remuneration paid by the company against market and

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.

This report is in line with the Swiss Code of Best Practice 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.

Straumann_2014_English_1 140

09.03.2015 16:54:37

Compensation report 141

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

COMPENSATION PRINCIPLES

COMPREHENSIVE BENCHMARKING

The 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.

Straumann’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.

VALUE CREATION DRIVES COMPENSATION We believe that a compensation system based on value creation encourages sustainable performance, loyalty and entrepreneurship and is thus in the interests of management, employees and shareholders. We are committed to compensating our staff, management 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 compensation system takes these factors into account in that it: – Offers competitive salaries – Fosters a high-performance culture that differentiates and rewards above-average individual performance, both in the short and long term – Links variable long-term compensation to value generated 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 Committee.

Straumann_2014_English_1 141

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 companies in various industries selected according to the following criteria: – Comparable scope and business complexity – Comparable geographic footprint – Companies with whom we compete for talent.

ETHICAL, FAIR STANDARDS We are committed to fair and equal treatment of all our employees and seek to be in full compliance with International Labor Standards. Compensation is not influenced by gender. Local minimum wage regulations have no bearing on our compensation policy, as our compensation clearly surpasses them.

TOTAL COMPENSATION AND COMPENSATION ELEMENTS Overall, Straumann spent CHF 287 million on compensation, benefits and social costs in 2014, corresponding to an average of CHF 120 000 per employee. In 2014, the compensation of employees and managers comprised fixed as well as short- and long-term variable components, the mix of which was defined by

09.03.2015 16:54:37

142 Compensation report

COMPENSATION MIX

Short term

Long term

Executive management VARIABLE

FIXED

Senior management

Strategic impact Responsibility Skills Role

Management General staff

Location

Base salary

Cash PSUs bonus

Pension Benefits DRIVERS

Local practices & regulations

Company function Individual performances

Share price performance

Competitiveness

Performance

Value creation, talent retention

PAY MIX CORRIDOR (AT-TARGET ACHIEVEMENT)

TOTAL COMPENSATION AVERAGE PER EMPLOYEE

35–45%

120 000

30–35%

30–35%

Executive Management 1 60–75%

105 000 15–25%

10–15%

Senior Management 75–90%

90 000 75 000 60000 45 000

10–25%

30 000

Other Management

15000 90–100%

0–10%

¢ Base salary 1

0 2011

General Staff ¢ Short-term incentive

2012

2013

2014

¢ Long-term incentive

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.

role, profile, location and strategic impact. For Senior Management, greater emphasis is placed on the longterm variable component, in line with our strategic goal of promoting ownership. The compensation mix for executive and senior management included a long-term variable remuneration

Straumann_2014_English_1 142

element, emphasizing long-term, sustainable decision-making and staff retention.

FIXED COMPONENTS In 2014, the fixed compensation elements included the following components:

09.03.2015 16:54:38

Compensation report 143

SUMMARY OF OVERALL COMPENSATION 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 shareholders’ 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

– 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.

increased responsibility. For 2015, the Board of Directors foresees increases that are linked to structural adjustments 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

SALARY PROGRESSION 2014-2015

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 following actuarial rules.

As explained, there were no general salary increases in 2014. Where necessary, salaries were adjusted to benchmarks and for staff who took on new roles and/or

Further information on pension plans is provided in note 20 to the audited consolidated financial state-

Straumann_2014_English_1 143

09.03.2015 16:54:38

144 Compensation report

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 disability to all employees of Institut Straumann AG and Straumann Villeret SA. There is additional supplementary 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 majority 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 Retirement Income Security Act (ERISA). In addition to the 401k, Straumann USA has a Supplemental 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 contribution plan.

Straumann_2014_English_1 144

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 benefits 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 purchase 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 redundancies. 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 COMPONENTS In 2014, the variable compensation components included one or more of the following: – Performance-related short-term incentives – Long-term incentives (Performance Share Plan)

09.03.2015 16:54:38

Compensation report 145

VALUE-BASED MANAGEMENT – 2014 ECONOMIC PROFIT (VALUE ADDED) NET REVENUE CHF 710m

TAXES CHF (20)m

COGS CHF (152)m

EBIT CHF 148m

OPEX CHF (413)m

FINANCIAL RESULT CHF 33m

NOPAT CHF 162m

ECONOMIC PROFIT CHF 114m CASH CHF 120m COST OF CAPITAL (WACC) 8% NET WORKING CAPITAL CHF 65m

CAPITAL CHARGE CHF (48)m CAPITAL CHF 605m

NON-CURRENT ASSETS CHF 420m

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.

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 specific 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 performance 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 performance 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%.

Straumann_2014_English_1 145

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 calculated 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 performance indicator for short-term incentives for 2015 from economic profit (EP) target to an operating-profit

09.03.2015 16:54:38

146 Compensation report

SHORT-TERM INCENTIVE TARGET WEIGHTING Management Level

Company

Chief Executive Officer

Financial

Individual

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%

0–20%

0%

80–100%

Staff

MEASUREMENT OF ACHIEVEMENT

This table shows the weighting of the different types of performance measures according to the level of the employee and depending on the organizational unit the employee is working in.

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 Solutions & 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 organizational unit. In 2014 for example the achievement of improvements to ‘contribution margin’ and to ‘strategic key sales initiatives’ were set as specific financial targets for the Sales Regions whilst ‘improvements to cost of goods sold’ was defined as a specific financial target for Research, Development & Operations. INDIVIDUAL PERFORMANCE

Individual performance is measured by the achievement of targets established with the line manager at the beginning of the year in the performance management process. These may involve a combination of specific project targets, competency or skills development and specific contribution to team or organizational unit targets. A global performance management 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.

Straumann_2014_English_1 146

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 performance appropriately.

COMPANY PERFORMANCE AND FINANCIAL TARGETS

The measurement scale for the achievement of financial targets (company performance and financial targets) 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 descriptors 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 longterm 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 introduced 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

09.03.2015 16:54:39

Compensation report 147

SHORT-TERM INCENTIVE TARGET ACHIEVEMENT (STI)

SHARE ALLOCATION BASED ON PERFORMANCE SHARE UNITS AND TOTAL SHAREHOLDER RETURN B

200

250

100

MIDPOINT

Achievement (%)

Achievement (%)

200

150

100

50 A

0

0 -10

-5

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.

one PSU at the grant date. The long-term incentive target value is a percentage of the total target compensation, which is determined in accordance with the participant’s role in the organization.

0

5

10

15

20

25

30

Total shareholder return p.a. (%)

Target (for example in CHF)

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 performance 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.

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.

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%.

Straumann_2014_English_1 147

PSU FAIR VALUE

The fair value of the PSUs granted has been determined 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 participants 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

09.03.2015 16:54:39

148 Compensation report

PERFORMANCE SHARE UNIT FAIR VALUE 2014

2013

Grant date

25.04.2014

17.04.2013

Vesting date

25.04.2017

15.04.2016

184.00x

CHF 114.00

Share price at grant Risk-free interest rate

0.14%

0.15%

31.81%

31.28%

0%

0%

CHF 152.33

CHF 88.24

Expected volatility Expected dividend yield1 Estimated fair value 1 Assuming

immediate reinvestment of dividend payment

OUTSTANDING PERFORMANCE SHARE UNITS 2014

2013

As of 1 January

79 138

32 894

Granted PSUs

30 063

64 977

0

0

(9 391)

(18 733)

0

0

99 810

79 138

Exercised Forfeited PSUs1 Expired PSUs AS OF 31 DECEMBER 1 Eligible

participants who left Straumann voluntarily or as part of the 2013 reorganization forfeited their PSU allocations for 2012 and 2013.

NUMBER OF OPTIONS OUTSTANDING UNDER THE STOCK OPTION PLAN

As of 1 January Granted options

2014

2013

2012

199 470

260 676

325 000 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

31 December/1 January. The value of the options was determined at grant date and is expensed as a personnel 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 performed by independent specialists. Since 2012, no further option allocations were made.

REGULATIONS RELATING TO COMPENSATION At 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 EXECUTIVES Agreements 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-compete 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 BOARD Options expiring at year-end

Options available for exercise

2014

4 972

131 702

2015

48 607

131 702

2016

48 856

83 095

34 239

34 239

2017 TOTAL

Straumann_2014_English_1 148

136 674

The principles for the compensation of the Executive Management specify both a fixed cash component, which includes basic salary and other fixed compensation 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,

09.03.2015 16:54:40

Compensation report 149

which is based on the achievement of performance targets 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 subsequent 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 compensation 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 valuable rights associated with giving up their prior activities. The amount of this compensation may not exceed CHF 1 000 000 for a CEO or CHF 500 000 for other members (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 prospectively 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 submitted 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, Executive 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.

Straumann_2014_English_1 149

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 Executive 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 DIRECTORS According to the revised Articles of Association, the compensation of the Board of Directors must be approved by the AGM and consists of a fixed compensation component only, which is paid in cash and/or shares (Art. 4.1 AoA). The Board of Directors establishes the compensation payable to its members within the limits approved by the AGM. The 2014 AGM approved a maximum total compensation 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 closing 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, demonstrating engagement with the company. This approach is in line with best practices. Irrespective of role, all Directors are entitled to reimbursement from the company for their reasonable expenses for travel to and from Board meetings, or on behalf of the Board, and other expenses incident

09.03.2015 16:54:40

150 Compensation report

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)

2009

4000210

Not traded

American 1:1

1 750

292.50

12.2015

STMNCC1 Wt 12.16 (STMN16)

2010

12217893

Credit Suisse Derivatives

American 50:1

2 278 450

214.00

12.2016

STRAUM16 OPT1 ESOP (USA)

2010

4000211

Not traded

American 1:1

5 812

214.00

12.2016

STRAUM16 OPT1 ESOP (other countries)

2010

4000211

Not traded

American 1:1

1 750

214.00

12.2016

STMNCS1 Wt 12.17 (STMN17)

2011

14630069

Credit Suisse Derivatives

American 50:1

2 226 400

162.10

12.2017

STRAUM17 OPT1 ESOP (USA)

2011

4000212

Not traded

American 1:1

2 105

162.10

12.2017

STRAUM17 OPT1 ESOP (other countries)

2011

4000212

Not traded

American 1:1

750

162.10

12.2017

TOTAL VALID WARRANTS ISSUED 1

6 543 045

Traded on the SIX Swiss Exchange.

VALUE DEVELOPMENT OF OPTIONS

1

Name/symbol

Grant

Vesting

Value at grant

Value at vesting

STMMA1 Wt 12.15 (STMN15)

2009

STMNCC1 Wt 12.16 (STMN16)

2010

STMNCS1 Wt 12.17 (STMN17)

2011

2013

Value 31.12.14

2011

77.00

6.00

10.00

2012

53.50

3.00

48.00

38.00

32.00

89.50

Traded on the SIX Swiss Exchange.

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 Directors to seven. At the same time, the number of Committees 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.

Straumann_2014_English_1 150

None of the Board members received any remuneration from the Straumann Group other than that disclosed 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.

09.03.2015 16:54:40

Compensation report 151

APPROVAL OF COMPENSATION The AGM prospectively approves the maximum compensation 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 shortterm components of the Executive Management’s compensation are approved retroactively for the business 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 maximum (subject to approval at the 2016 AGM). In addition, 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 composition 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 remuneration of the Executive Management Board and the Board of Directors.

Straumann_2014_English_1 151

09.03.2015 16:54:41

152 Compensation report

2014 (AUDITED TABLE) Fixed compensation

Other compensation

Total compensation

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

(in CHF 1 000)

BOARD OF DIRECTORS

Dr Beat Lüthi

251

20

271

Stefan Meister (Chairman HR Committee)

305

23

328

Former member Dominik Ellenrieder1 Total

(in CHF 1 000)

53

13

66

2 510

326

2 836

Other compensation

Total compensation

Fixed compensation

Performance bonus

Performance share units

EXECUTIVE MANAGEMENT BOARD Marco Gadola (President & CEO)

750

1 209

780

260

2 999

2 415

2 224

1 046

1 431

7 116

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

Other members (8 until 30 Nov 2014, thereafter 9)2 Former member

1 2

Until 31 March 2014 Includes an amount of kCHF 428 to the new Group CFO Peter Hackel for long term incentive components forfeited due to resignation from his previous 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

0.428 4

Long Term Incentive (grant 2014)

2.5

1.9235

Short Term Incentive 1 Based on the configurations of the Board of Directors and the Executive Management Board at the time of the 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).

Straumann_2014_English_1 152

4.2826 2014 AGM (including social costs).

09.03.2015 16:54:41

Compensation report 153

2013 (AUDITED TABLE) Fixed compensation

Other compensation

Total compensation

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

3 008

269

3 277

Other compensation

Total compensation

(in CHF 1 000)

BOARD OF DIRECTORS

Total

(in CHF 1 000)

Fixed compensation

Performance bonus

Performance share units

EXECUTIVE MANAGEMENT BOARD Marco Gadola (President & CEO) (since 1 March 2013) Other members (6 until 31 May 2013, thereafter 8)1 Former members

627

986

780

775

3 168

2 720

2 302

1 478

907

7 407

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.

Straumann_2014_English_1 153

09.03.2015 16:54:41

154 Compensation report

Report of the statutory auditor on the remuneration report of Straumann Holding AG, Basel To the General Meeting of Straumann Holding AG, Basel Basel, 13 February 2015

REPORT OF THE STATUTORY AUDITOR ON THE REMUNERATION REPORT We have audited the remuneration report dated 13 February 2015, which comprise the tables marked as audited on page 152 and 153, of Straumann Holding AG for the year ended 31 December 2014.

RESPONSIBILITY OF THE BOARD OF DIRECTORS The Board of Directors is responsible for the preparation 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 system and defining individual remuneration packages.

includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the remuneration report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OPINION In 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

AUDITOR’S RESPONSIBILITY Our 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 remuneration report complies with Swiss law and articles 14 – 16 of the Ordinance.

Daniel Zaugg Licensed audit expert (Auditor in charge)

Daniel Maiwald Licensed audit expert

An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration 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

Straumann_2014_English_1 154

09.03.2015 16:54:42

155

Straumann_2014_English_1 155

09.03.2015 16:54:42

156

“I love working directly with customers.”

“This technology fascinates me.”

MARISA FADDA MEDICAL PRODUCT ADVISOR

GÜLAY DEMIRTAS TECHNICAL SUPPORT

“We don’t settle for good enough – it has to be the best.” ALBIN GYGLI GLOBAL PRODUCT MANAGER

Straumann_2014_English_1 156

09.03.2015 16:54:49

nn_2014_English_1 157

157

Willing to help

with a ‘can do’ attitude MARISA FADDA MEDICAL PRODUCT ADVISOR 3 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 GYGLI GLOBAL PRODUCT MANAGER 4.5 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 DEMIRTAS TECHNICAL SUPPORT 2.5 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 important for customers to have someone who understands their problems and perspective and offers authentic support.”

09.03.2015 16:54

158

Straumann Pro Arch

The edentulous solution

Until fairly recently, people suffering from the debilitating handicap of severely damaged, ‘hopeless’ dentition had little alternative 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 dentures 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 replacement 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.

nn_2014_English_1 158

09.03.2015 16:54

159

38 million in the US will need full dentures by 2020 4

A COMBINATION OF SCIENTIFICALLY PROVEN IMPLANT AND PROSTHETIC TECHNOLOGY Straumann 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 fullarch tooth replacements.

BROAD ACCESS TO CADCAM Through our open CADCAM system and CARES Scan & Shape Service, almost any dental lab can offer Straumann customized bars to complete the Pro Arch solution.

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 immediate 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

PROSTHETICS ADD THE BITE The implant provides the foundation, but the bite comes with the prosthetics, which are equally important. The Pro Arch system includes a selection of new sleek abutments (see p. 77), which offer a wide range of prosthetic 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.

Straumann Pro Arch solution for full-arch tooth replacement.

Straumann_2014_English_1 159

09.03.2015 16:55:17

160 Information for investors

Information for investors Contents

Straumann_2014_English_1 160

161

Share performance

163

Calendar

164

Research coverage

164

Contacts

165

Publications

09.03.2015 16:55:17

Information for investors Share performance 161

Share performance 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 countries 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%), outperforming both the general market and the sector index. The increase reflected fundamental margin improvements, 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 closing 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 PRICE DATA (in CHF)

2014

2013 Value

Date

Value

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

Date

Value reflects closing price

Straumann_2014_English_1 161

09.03.2015 16:55:17

162 Information for investors Share performance

SHARE PRICE DEVELOPMENT Price in CHF

1

2

3

4

4

5

6

7

8

Shares (thousands)

280

360

260

320

240

280

220

240

200

200

180

160

160

120

140

80

120

40 0

100 J

F

¢ STMN share price

M ¢ SMIM index

A

M

J

J

A

S

O

N

D

¢ Volumes trades

1

25 Feb

FY 2013 shows significant profitability improvements

4

26 Aug

H1 2014: solid revenue growth and sharp rise in profitability

7

23 Oct

Q3 sales of +7% indicates topline acceleration

2

23 Apr

Collaboration with botiss announced

5

29 Aug

Partnership with ClearChoice in the US announced

8

15 Dec

STMN re-enters the SMIM index

3

30 Apr

Q1 2014: Promising start into the year

6

22 Sep

Straumann temporarily drops out of the SMIM index

HGHEST/LOWEST VALUES

STOCK EXCHANGE INFORMATION

(in CHF)

350 300 250 200 150 100 50 0 2010

2011

2012

2013

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

2014

At last day of trading

Straumann_2014_English_1 162

09.03.2015 16:55:18

Information for investors Calendar 163

Calendar

Reporting dates & key events KEY DATES IN 2015

SELECTED DENTAL MEETINGS IN 2015

27 February

2014 full-year results

5–7 March

10 April

Annual General Meeting

Pacific Dental Conference (Vancouver, Canada)

14 April

Dividend ex-date

10–14 March

30 April

Q1 sales

36th International Dental Show IDS (Cologne, Germany)

20 August

Q2 sales and H1 results

12–14 March

29 October

Q3 and 9M sales

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)

PLANNED INVESTOR RELATIONS EVENTS AND CONFERENCES IN 2015 Members of Straumann’s Executive Management and/ or Investor Relations team plan to take part in the following events (subject to availability).

ROADSHOWS & CONFERENCES 15 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, Zurich SGKB 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 top management at one of the meetings, please contact [email protected]

Straumann_2014_English_1 163

09.03.2015 16:55:18

164 Information for investors Research coverage | Contacts

Research coverage

Contacts

BANK S BELLEVUE

HSBC TRINKHAUS & BURKHARDT

GROUP HEADQUARTERS STRAUMANN HOLDING AG

Hendrik Lofruthe Tel. +49 211 910 2373

Peter Merian-Weg 12, 4002 Basel Tel. +41 61 965 11 11 Fax +41 61 965 11 01

Daniel Jelovcan Tel. +41 44 267 72 30

BANK OF AMERICA MERRILL LYNCH

JEFFERIES

Ed Ridley-Day Tel. +44 207 995 4585

Martin Brunninger Tel. +44 207 029 8704

BANK VONTOBEL

KEPLER CHEVREUX

Carla Bänziger Tel. +41 58 283 70 21

Maja Pataki Tel. +41 43 333 66 23

BARCLAYS CAPITAL

MAINFIRST BANK

Alex Kleban Tel. +44 203 555 21 55

Markus Wieprecht/ Richard Latz Tel. +49 69 788 08 221

BERENBERG BANK Thomas Jones Tel. +44 203 207 7877

MORGAN STANLEY Michael Jüngling Tel. +44 207 425 5975

INVESTOR RELATIONS Fabian Hildbrand Tel. +41 61 965 13 27 Rahel Schafroth Tel. +41 61 965 16 78 [email protected]

MEDIA RELATIONS Mark Hill Tel. +41 61 965 13 21 Thomas Konrad Tel. +41 61 965 15 46 [email protected]

GENERAL INQUIRIES Corporate Communication Tel. +41 61 965 11 11 Fax +41 61 965 11 03

COMMERZBANK AG Oliver Metzger Tel. +49 69 136 81573

NORTHCOAST RESEARCH

CREDIT SUISSE

Ed Snyder Tel. +1 216 468 6903

Christoph Gretler Tel. +41 44 333 79 44

DEUTSCHE BANK Yi-Dan Wang Tel. +44 207 545 9999

SANFORD C. BERNSTEIN Lisa Clive Tel. +44 207 170 5052

UBS EXANE BNP PARIBAS Julien Dormois Tel. +33 1 44 95 69 49

Ian Douglas-Pennant Tel. +44 207 568 77 63

ZKB GOLDMAN SACHS Veronika Dubajova Tel. +44 207 774 1901

Straumann_2014_English_1 164

Sibylle Bischofberger +41 44 292 37 34

09.03.2015 16:55:19

Information for investors Publications 165

Publications Media 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 publishes 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 RELEASES

13 August

Straumann invests in RODO Medical

20 August

Neodent USA contests Nobel Biocare’s allegations 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 significantly lower failure rate with Straumann dental implants

25 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 Osseointegration 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

3 February

Straumann announces cost-saving measures to mitigate currency impact

15 April

CADCAM customized abutments with Straumann original implant connections now available to 3Shape users

19 February

Straumann’s staff agrees to proposed compensation reductions to mitigate currency impact

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 software from Dental Wings

1 July

Mark Bartold receives the 2014 IADR/Straumann Award in Regenerative Periodontal Medicine

Straumann_2014_English_1 165

2015 MEDIA RELEASES

09.03.2015 16:55:19

166

“When I say I work at Straumann everyone is impressed. It has a great reputation.” “I like my job because I like being precise.”

SIMON BODMER PRECISION MECHANIC APPRENTICE

STEFANIE BARTH TESTING LAB ASSISTANT

Straumann_2014_English_1 166

09.03.2015 16:55:25

nn_2014_English_1 167

167

60 years’ experience

you can see under the microscope STEFANIE BARTH TESTING LAB ASSISTANT 2 YEARS @ STRAUMANN

Every bar of raw titanium has to undergo microscopic inspection and the watchful eye of quality controllers like Stefanie. The finished 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 BODMER PRECISION MECHANIC APPRENTICE 4 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.”

09.03.2015 16:55

168

Dental instruments Simplifying procedures

Straumann instrument cassette

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 cutting 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.

nn_2014_English_1 168

09.03.2015 16:55

169

300 000 tools per year

INSTRUMENT COMPLEXITY REDUCED Simplicity, reliability and quality are the cornerstones of the product philosophy in developing surgical protocols and instruments. We offer straightforward surgical protocols together with a comprehensive portfolio of highly functional and easy-to-use instruments to help our customers tackle even the most challenging clinical cases effectively.

COLOR-CODED

The 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.

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 System, 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.

IN-DEPTH ACCURACY

Depth gauges and markings are used to ensure precise drilling.

High precision screw drivers, torque wrench, drill and depth guage.

Straumann_2014_English_1 169

09.03.2015 16:55:38

170 Appendix

Appendix Contents

Straumann_2014_English_1 170

171

Global presence

175

Glossary

179

Global Reporting Initiative

180

Points to note

181

Imprint

09.03.2015 16:55:39

Appendix Global presence 171

Global presence

Straumann around the world AUSTRALIA & NEW ZEALAND

CANADA

Straumann Australia P/L 7 Gateway Court Port Melbourne, Victoria 3207 Tel.+61 800 660 330 Tel.+61 3 9261 1300 Fax.+61 3 9646 7232 [email protected]

Straumann Canada Ltd Suite 100 3115 Harvester Road Burlington, Ontario L7N 3N8 Tel. +1 905 319 2900 Fax +1 905 319 2911 [email protected]

AUSTRIA

Straumann (Beijing) Medical Device Trading Co., Ltd. B303, 3/F, Tower B, Jia Ming Centre No.27 Dong San Huan Bei Lu Chaoyang District Beijing 100020, P.R.China Phone:+86 (10) 5775 6555 Fax:+86 (10) 5775 6556 [email protected]

CHINA Straumann GmbH Florido Tower Floridsdorfer Hauptstrasse 1 1210 Vienna Tel. +43 1 29 40 660 Fax +43 1 29 40 666 [email protected]

BELGIUM Straumann SA/NV Belgicastraat 3, box 3 1930 Zaventem Tel. +32 2 790 10 00 Fax +32 2 790 10 20 [email protected]

CZECH REPUBLIC Straumann sro Na Žertvách 2196/34 18000 Prague 8 Tel. +420 284 09 4650 [email protected]

BRAZIL

DENMARK

Straumann Brasil Ltda Rua Funchal, 263 – 12°andar Vila Olímpia 04551-060 São Paulo Tel. +55 11 3058 6888 Fax +55 11 3058 6899 [email protected]

Straumann Danmark ApS Nygårds Plads 21, 1 2605 Brøndby Tel. +45 46 16 06 66 Fax +45 43 61 25 81 [email protected]

Straumann_2014_English_1 171

09.03.2015 16:55:39

172 Appendix Global presence

Straumann locations Production facilities Distributors Instradent

FINLAND Straumann Oy Fredrikinkatu 48 A 7 krs. 00100 Helsinki Tel. +358 9 694 28 77 Fax +358 9 694 06 95 [email protected]

FRANCE Straumann SARL 3, rue de la Galmy-Chessy 77701 Marne-la-Vallée Cedex 4 Tel. +33 1 64 17 30 00 Fax +33 1 64 17 30 10 [email protected]

GERMANY Straumann GmbH Jechtinger Strasse 9 79111 Freiburg Tel. +49 761 450 10 Fax +49 761 450 11 49 [email protected]

Straumann_2014_English_1 172

Straumann’s products and services are available in more than 70 countries through our subsidiaries and a broad network of distributors.

Etkon GmbH Koburger Strasse 45 04416 Markkleeberg Tel. +49 341 350 354 0 Fax +49 341 350 354 59 Etkon GmbH Lochhamer Schlag 6 82166 Gräfelfing Tel. +49 89 309 07 50 Fax +49 89 309 07 51 19 Instradent Deutschland GmbH Hammweg 8 76549 Hügelsheim Tel. +49 7229 69912-0 Fax +49 7229 69912-20 [email protected]

HUNGARY (BRANCH) Straumann GmbH Magyarországi Fióktelepe M3 Business Center Hungária körút 179-187. 1146 Budapest Tel. +36 1 787 10 95 Fax +36 1 787 10 96 [email protected]

09.03.2015 16:55:40

Appendix Global presence 173

ITALY

NORWAY

Straumann Italia srl Viale Bodio 37a 20158 Milan Tel. +39 02 3932 831 Fax +39 02 3932 8365 [email protected]

Straumann AS Nedre Vollgate 3 P.O. Box 1751 Vika 0122 Oslo Tel. +47 23 35 44 88 Fax +47 23 35 44 80 [email protected]

Instradent Italia srl. Bodio Center Viale Luigi Bodio, 37/A - Palazzo 4 20158 Milano Tel. +39 800 975 895 FAX +39 02 84 20 23 60 [email protected]

JAPAN Straumann Japan KK Mita Bellju Building, 6F 5-36-7, Shiba Minato-ku, Tokyo 108-9914 Tel. +81 3 6568 1188 Fax +81 3 6568 4945 [email protected]

PORTUGAL (BRANCH) Straumann SA Manohay Dental SA Lagoas Park, Edificio 11 Piso 3 2740-244 Porto Salvo Tel. +351 214 229 170 Fax +351 214 212 144 [email protected] Instradent Iberia S.L., Sucursal em Portugal Lagoas Park, Edificio 11, Piso 3 2740-244 Porto Salvo Tel. +351 22 834 44 00 Fax +351 21 013 44 05 [email protected]

MEXICO Straumann México SA de CV Rubén Darío #281 int. 1702 Piso 17 Col. Bosque de Chapultepec 11580 México DF. Tel. +52 55 5282 6262 Fax +52 55 5282 6289 [email protected]

SINGAPORE Straumann Singapore Pte Ltd 1 Maritime Square #09-04 Harbour Front Centre Singapore 099253 Tel. +65 6376 2023 Fax +65 6376 2339

SOUTH KOREA NETHERLANDS Straumann BV Einsteinweg 15 3404 LE IJsselstein Tel. +31 30 604 66 11 Fax +31 30 604 67 28 [email protected]

Straumann_2014_English_1 173

Straumann Dental Korea Inc. 1005 Korea Trade Tower Samseong 1-dong Gangnam-gu Seoul 135-729 Tel. +822 2149 3800~4 Fax +822 2149 3810 [email protected]

09.03.2015 16:55:40

174 Appendix Global presence

SPAIN

UNITED KINGDOM

Manohay Dental SA Edificio Arroyo - A Avda. de Bruselas, 38 - Planta 1 28108 Alcobendas-Madrid Tel. +34 916 308 214 Fax +34 916 301 819 [email protected]

Straumann Ltd 3 Pegasus Place Gatwick Road Crawley West Sussex RH10 9AY Tel. +44 1293 651230 Fax +44 1293 651239 [email protected]

Instradent Iberia S.L. Avda. de Bruselas, 38 - Planta 1 Edificio Arroyo - A 28108 Alcobendas-Madrid Tel. +34 91 662 3435 Fax +34 91 662 4869 [email protected]

SWEDEN Straumann AB Krokslätts Fabriker 45 431 37 Mölndal Tel. +46 31 708 75 00 Fax +46 31 708 75 29 [email protected] Biora AB Per Albin Hanssons vaeg 41 Medeon Science Park 20512 Malmö Tel. +46 40 32 13 33 Fax +46 40 32 13 55

USA Straumann USA, LLC & Straumann Manufacturing, Inc. 60 Minuteman Road Andover, MA 01810 Tel. +1 978 747 2500 Fax +1 978 747 2490 [email protected] Straumann Manufacturing, Inc. 113th Street 916A Arlington, TX 76011 Tel. +1 817 701 11 81 Fax: +1 817 701 12 36 Instradent USA, Inc. 60 Minuteman Road Andover, MA 01810 Tel. +1 855 412 8883 Fax +1 855 412 8884 [email protected]

SWITZERLAND Institut Straumann AG Peter Merian-Weg 12 4002 Basel Tel. +41 61 965 11 11 Fax +41 61 965 11 01 [email protected] Straumann Villeret SA Champs du Clos 2 Case postale 32 2613 Villeret BE Tel. +41 32 942 87 87 Fax +41 32 942 87 88

Straumann_2014_English_1 174

09.03.2015 16:55:41

Appendix Glossary 175

Glossary DENTAL/MEDICAL TERMS

DENTAL TECHNICIAN

ABUTMENT

Dental professional who manufactures crowns, bridges, dentures and other dental prosthetics according to the dentist’s specifications.

A component that connects the implant to the prosthesis and protrudes into the oral cavity.

DWOS ASTM

ASTM International is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services.

Dental Wings Open Software is an open software platform that allows prosthetics to be designed using data from multiple sources. EDENTULOUS

Having no teeth (can refer to upper and/or lower jaw). BONECERAMIC

Straumann’s fully synthetic bone substitute for bone augmentation procedures. BONE LEVEL IMPLANT

EMDOGAIN

An extract of enamel matrix proteins which are involved in the development of cementum, periodontal ligament and bone.

Implant which connects with the abutment at bone crest level.

GUIDED SURGERY

BONE LEVEL TAPERED (BLT) IMPLANT

Surgery in which 3D imaging technologies are used to plan the position, depth and angle of an implant.

Bone 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.

HYDROPHILIC

Readily absorbing or attracting water, or having chemical groups that interact with water. INTRA-ORAL SCANNING

CADCAM

Digital scanning to create a 3D image of the patient’s teeth that replaces the conventional process of impression-taking followed by model casting.

Computer-aided design/computer-aided manufacturing: A computer system is used both for designing a product and for controlling manufacturing processes.

International Team for Implantology.

ITI

CARES

LOXIM

CARES is a brand that Staumann uses for its digital prosthetic services, including CADCAM, software, functionality, scanning technology etc.

A transfer piece temporarily attached to the implant during placement which then detaches quickly and easily without disturbing the implant position.

CROWN

A tooth-shaped cap attached to a tooth stump or implant abutment.

Straumann_2014_English_1 175

09.03.2015 16:55:41

176 Appendix Glossary

MEMBRANE

PRO ARCH

A barrier used in guided bone regeneration to prevent tissue from occupying space into which new bone should form, and to stabilize bone augmentation materials.

A comprehensive restoration system for the entire jaw comprised of implants, abutments, and prosthetic components.

NARROW NECK IMPLANT

A dental professional who carries out prosthetic restorations on natural teeth and implants.

PROSTHODONTIST

Small diameter implant for limited interdental spaces or narrow bone ridges.

RCT NIS

Non-interventional study, designed to evaluate products in everyday clinical settings, where the clinician can use the product as deemed suitable, within treatment guidelines.

Randomized controlled trial. REFERRAL MARKET

ONE-STAGE PROCEDURE

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.

Surgical procedure whereby the implant is placed but not covered by the gum tissue during healing, eliminating the necessity of a second surgical procedure to expose the implant.

Branch of dentistry concerned with the replacement or reconstruction of teeth.

RESTORATIVE DENTISTRY

OSSEOINTEGRATION

ROXOLID

The biological process of bone integrating with the implant.

Straumann’s proprietary alloy of titanium and zirconium, which combines high tensile and fatigue strengths with excellent osseointegration.

PERI-IMPLANTITIS

Inflammatory tissue pathology and/or progressive bone loss at implant site, resulting from plaque accumulation and bacterial infiltration around dental implants.

SCAN & SHAPE

A Straumann CARES brand service, by which dental technicians generate CADCAM-based, customized abutments from a model or wax-up.

PERIODONTICS

Branch of dentistry concerned with the care and treatment 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.

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 technology, introduced by Straumann in 1997.

PERIODONTITIS

Progressive disease of the periodontal tissues, resulting in the gradual loss of the tooth and supporting structures.

Straumann_2014_English_1 176

SLACTIVE

Straumann’s third-generation implant surface technology. By virtue of its hydrophilic properties, healing time is cut in half.

09.03.2015 16:55:41

Appendix Glossary 177

SOFT TISSUE LEVEL IMPLANT

FINANCIAL & LEGAL TERMS

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.

Systematic allocation of the depreciable amount of an intangible asset over its useful life.

AMORTIZATION

TITANIUM

AGM

Metallic element isolated from minerals as an irongray powder; used in many dental and orthopedic applications.

Annual general meeting of the shareholders. AOA

Articles of Association. 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.

CAGR

Compound Annual Growth Rate. DEPRECIATION

Systematic allocation of the depreciable amount of a tangible asset.

X-STREAM

Solution-driven function within the CARES Visual software, providing a one-step, single-tooth implantbased prosthetic restoration process which significantly reduces turnaround time and shipment cost.

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.

ZIRCONIA

ZrO2 – the white oxide of zirconium used for its infusibility and luminosity in dental implants, prosthetics, enamels and glazes.

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.

ZIRCONIUM

A grayish-white ductile metallic element obtained from zircon and used in ceramic and refractory compounds as an alloying agent.

EARNINGS PER SHARE (EPS)

Net profit divided by the number of shares. EBIT

ZLA

The ZLA surface of Straumann’s ceramic implant features a topography characterized by macro- and microroughness, similar to the SLA surface, to enhance cell attachment and osseointegration.

Earnings before interest and taxes; also referred to here as operating profit. EBITDA

Earnings before interest, taxes, depreciation and amortization. ECONOMIC PROFIT (EP)

See compensation report (p. 145). EQUITY RATIO

Shareholder equity divided by total assets in %. ERP

Enterprise resource planning.

Straumann_2014_English_1 177

09.03.2015 16:55:41

178 Appendix Glossary

FREE CASH FLOW

ROCE

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

Return on capital employed; earnings before interest and taxes divided by average capital employed in %.

FREE CASH FLOW MARGIN

Return on equity; net profit divided by average equity in %.

ROE

Free cash flow divided by Group net revenue in %. FREE CASH FLOW YIELD

SALES

Free cash flow per share divided by the stock price of the company.

See ‘sale of goods’ on p. F21.

GOODWILL

Profit or loss realized by an investment. TSR includes capital gains/losses from increases/decreases in stock price as well as received gross dividends.

TOTAL SHAREHOLDER RETURN (TSR)

Future economic benefits arising from assets that are not capable of being individually identified and separately recognized.

WACC IFRS

Weighted average cost of capital.

International Financial Reporting Standards. WRITE-DOWN IMPAIRMENT LOSS

See ‘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 administrative 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 %.

Straumann_2014_English_1 178

09.03.2015 16:55:42

Appendix Global Reporting Initiative 179

Global Reporting Initiative GRI Sustainability Reporting 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 operate, 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 nonprofit, multi-stakeholder organization that strives to provide companies with a systematic basis for disclosure regarding sustainability performance. The aim is to give stakeholders a framework that facilitates comparison and clear disclosure of information.

Straumann_2014_English_1 179

To focus our sustainability reporting on the most pertinent issues for Straumann and its stakeholders, we have determined relevant reporting topics regarding economic, environmental, labor, human rights, society, and product responsibility issues based on the Guidance for Defining Report Content published by GRI. An online ‘Addendum GRI-Sustainability Reporting’ to this report helps readers locate specific performance and management approach information on those issues. Together with this Addendum, the Straumann Annual Report 2014 fulfills the requirements of the GRI-G3 reporting guidelines at Application 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.

09.03.2015 16:55:42

180 Appendix Points to note

Points to note FINANCIAL REPORT

STRAUMANN TRADEMARKS & BRANDS

Straumann’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

The 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 attractive™, 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 Professionals™, Zerion®, ZLA®, ZLActive®.

Printed copies can be ordered from: Corporate Communication or Investor Relations Institut Straumann AG Peter Merian-Weg 12 CH - 4002 Basel Tel. + 41 61 965 11 11 E-mail:[email protected] or investor.relations @ straumann.com

OTHER TRADEMARKS FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that reflect the current views of management. Such statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Straumann 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.

3M, 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 registered 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.

PRODUCT AVAILABILITY The availability and indications of the products mentioned and/or illustrated in this report may vary according to country.

Straumann_2014_English_1 180

09.03.2015 16:55:42

About Straumann Straumann is a global leader in tooth replacement solutions including dental implants, prosthetics and regenerative products. Headquartered in Basel, Switzerland, the Group is present in more than 70 countries through its broad network of distribution subsidiaries and partners.

4 1

2

3

7 5

6

8

9

1

Rebecca Hesse

SAP Coordinator

2

Susan-Ann Welzbacher

Corporate Safety Officer

3

Julia Hirtle

Spend Coordinator

4

Roland Scacchi

Administrator

5

Alessandro Annicchiarico

IT Support

6

Heather Stanton

Web Editor

7

Dave Koster

Lab Business Development

8

Raul Perez

Talent Management

9

Sandra Schürmann

Events Coordinator

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

00_00_STR_GB2014_GB_Umschlag_en.indd 2

IMPRINT Published by: Institut Straumann AG, Basel Concept and realization: PETRANIX Corporate and Financial Communications AG, Adliswil/Zurich Photography: AMX Studio, Alex Stiebritz, Karlsruhe Consultant on sustainability: sustainserv, Zurich and Boston Certain design elements by Eclat, Erlenbach/Zurich Print: Neidhart + Schön AG, Zurich Basel, 26 February 2015 ©2015, Straumann Holding AG

09.03.2015 16:45:02

We love what we do

2014 Annual Report

2014 Annual Report

Straumann Holding AG Peter Merian-Weg 12 4002 Basel Switzerland www.straumann.com

00_00_STR_GB2014_GB_Umschlag_en.indd 1

09.03.2015 16:44:50

Loading...

We love what we do - Straumann

We love what we do 2014 Annual Report 2014 Annual Report Straumann Holding AG Peter Merian-Weg 12 4002 Basel Switzerland www.straumann.com 00_00_S...

6MB Sizes 0 Downloads 0 Views

Recommend Documents

No documents