2020 Annual ReportHIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

Straumann Group

2020 Annual Report

CONTENTSSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX#TogetherStrong

Highlights

3

Letter to shareholders

7

Management commentary
Straumann Group in brief
Strategy in action
Products, solutions and services
Innovation
Markets
Business performance (Group)
Business performance (Regions)
Business performance (Financials)
Share performance
Risk management

11
12
17
21
26
29
35
38
44
46
49

Sustainability report

57

Corporate governance

80

Compensation report

107

Financial report

123

AppendixGlobal Reporting Initiative (GRI)
GRI content index
Points to note

184
185
189
193

#TogetherStrong is a tag-name that covers
countless initiatives we took to addresspressing needs in the dental community
in 2020.
It started with a website offering scientificand practical information to help
customers and staff through the corona
virus crisis. Soon it became a holistic,omni-channel response including a
massive education platform.

#TogetherStrong aptly describes how weprogressed through and emerged from thisextraordinary year.
#TogetherStrong is forward-looking; it
expresses purpose, teamwork, courage,
determination, perseverance, moving
forward and succeeding in turbulent
surroundings – themes that are captured
in the pictures and contents of this report.

The #TogetherStrong concept has
extended to thousands of activities
and millions of communications. It
demonstrates how the events of 2020
fuelled our resourcefulness, innovationand passion for creating opportunities.

Straumann’s Annual Reports for online users
http://annualreport.straumann.com

2

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIXHIGHLIGHTS
Revenue in CHF

High staff engagementscore (4 pts above global
benchmark)CHF cash from operating
activities ≈ 2019 level

Investment in staff learningin CHF

Core EBIT margin

Oil and solvent
consumption

Gross profit
in CHF

Greenhouse gas emissions

Group key figuresin CHF million

2020
Revenue

1 426

1 596

−11

1 030

1 200

−14

Core

1

1 038

1 207

−14

EBITDA

406

481

−16

Core

421

505

−17

Operating profit (EBIT)

157

387

−59

Core 1

333

432

−23

Net profit

92

308

−70

Core 1

261

338

−23

Cash generated from operating activities

377

378

0

Capital expenditure

82

150

−45

1

Free cash flow

295

230

28

Basic EPS (in CHF)

5.75

19.33

−70

Core 1

16.20

21.21

−24

Employees (at year end)

7 340

7 590

−3

1

2020 Annual Report

Change (%)

Gross profit

Notes to core figures

Straumann Group2019

To facilitate a like-for-like comparison of the underlying business performance the Group presents ‘core’
results in addition to the results reported under IFRS. A detailed explanation and reconciliation is provided on
p. 124 ff. of the Financial Report.

1.4bn
377m
23%

>1bn

78

>3m
–8%
–2%

3

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

Operating and net profit (more on p. 36 ff.)

Cash flow and investments (more on p. 36 ff.)

Return (more on p. 45 ff.)

in CHF million

in CHF million

in CHF million

in %5-year CAGR: 12% in CHF (14% organic growth)

500

400

60

400

1500

50

300
40

250

300

1000

30

200
200

500

150

20

100

100

10

50
0

0
2016

2017

2018

2019

2020

Reported revenue

2020 Annual Report

APPENDIX

Revenue (more on p. 35 ff.)

350

Straumann GroupFINANCIALREPORT

5y organic revenue
growth (CAGR)

14%

0

0
20161 20171 20182 20192 20202

Operating profit (EBIT)
Net profit
1 Excluding exceptionals
2 CoreCore EBIT in CHF

333m

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

Operating cash flow
Capital expenditure
Acquisitions & participations

Return on equity (ROE)
Return on capital employed (ROCE)

Invested over 5yin the future in CHF

Free cash flow
margin

>1bn

21%

4

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Performance by region
By year-end, organic growth had returned to all regions. Being
the least heavily affected, APAC rebounded to high-teen growthin Q4 to complete the year almost in line with 2019. EMEA andNorth America reported mid-single digit declines, while Latin
America had to overcome the biggest challenge and achieved
85% of its prior year organic revenue.

Europe, Middle
East, Africa
Revenue in CHF

North America
Change in CHF−10%Change organic−5%

Revenue in CHF

432m

615m

Change in CHF−8%Change organic−7%

Asia/PacificStraumann Group

2020 Annual Report

Change in CHF

Latin America
Change in CHF

Revenue in CHF

90m

−35%
Change organic
−15%

−5%
Change organic−1%

Revenue in CHF

289m

5

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Share information
Relative share price development

Total shareholder returnin CHF

in %

1200

9.4%

80
70
60

1000

Total
shareholder return

50
40
30

800

20
10

600

Market capitalizationin CHF

0
–10
–20

400

200

2016 2017 2018 2019 2020
Straumann
SMIM Total Return Index
2016

Straumann

2017

2018

Swiss Mid Cap index (SMIM) adjusted

2019

16.4bn2020

STOXX® Europe 600 index (in CHF) adjusted

Dividend per sharein CHF
Details about share performanceon p. 46 ff.

2020 Annual Reportin CHF

Straumann Group

Share information

Share price at year end

2020

2019

2018

2017

2016

Earnings per share (EPS)

16.201

21.20 118.16 1

15.13 2

11.94 2

Ordinary dividend per share

5.753

5.75

5.25

4.75

4.25

Payout ratio

36%1

27% 1

29% 1

31% 2

36% 2

1031.50950.40618.00688.50397.501 Based on core results.
2 Based on results excluding exceptionals.
3	Payable in April 2021 subject to shareholder approval.

5.75

3

Share priceperformance

8.5%

6

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

Dear Shareholder,
As a company we have learned, innovated,
adapted, relinquished, matured and persevered in2020. Above all, we have understood the value ofbringing and keeping people, ideas and things
together when traditional approaches are no­longer possible. This is why #TogetherStrong aptly
describes how we progressed through andemerged from this extraordinary year.

#TogetherStrong aptly
describes how we progressed
through and emerged fromthis extraordinary year.

Straumann Group

2020 Annual Report

In 2020, building on five years of double-digit
growth, we made a promising start until March,when dental practices closed temporarily or werelimited to essential treatment. During the crisis
months our focus was on safety, business continuity, mitigating financial impacts and helping­dentists get back to treating patients. When lockdowns eased, revenue picked up, lifted by pent-up
demand. Considering the disruptions and taking
the record-level results from 2019 as a comparison,
we achieved solid results in 2020. Organic revenue
was down 6%, while strong currency headwind
widened the gap in Swiss francs to 11% as revenue
reached CHF 1.4 billion.
Gilbert Achermann, Chairman of the Board of Directors

Guillaume Daniellot, Chief Executive Officer

APPENDIX

7

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

The pandemic put our original objectives for
improved profitability in 2020 beyond reach.
­However, thanks to rapid mitigation of near-tomid-term financial impact, including operating cost
reductions, subsidized working-hour reductions,
global restructuring and postponed investments,
we alleviated the heavy pressure on profitability.
Our core EBITDA, EBIT and net profit margins
reached 29.5%, 23.4% and 18.3% respectively,
which is very presentable in the circumstances. We
commend our Finance team for their work and for
securing liquidity to ensure continuity, including
CHF 480 million raised through two straight bonds
to refinance a maturing bond and for general­corporate purposes.

Straumann Group

2020 Annual Report

We were able to continue
investing in innovation
to provide faster, better
treatments.
Thanks to the remarkable efforts of our colleagues
in Operations, we maintained services and productavailability throughout the year. Our core grossprofit reached CHF 1.0 billion with a margin ofalmost 73%. Combined with cost reductions andreduced activities (e.g. travel and promotional
events) we were able to continue investing in innovation to provide faster, better treatments withadditional predictability, comfort and convenience.
We also continued to invest in developing our­people (p. 64 ff.) and production (p. 72 ff.).

SUSTAINABILITYREPORT

CORPORATEGOVERNANCE

Thanks to our agile response,
we outperformed the market.
REBOUNDING ACROSS REGIONS AND BUSINESSES
By year-end, organic growth had returned to all
regions (see p. 35 ff.). APAC rebounded to high-teengrowth in Q4 to complete the year almost in linewith 2019. EMEA and North America reported midsingle digit declines, while Latin America, facing
the biggest challenge, achieved 85% of its 2019
revenue.
The value implant, digital and orthodontics businesses all achieved full-year organic growth, thelatter reporting the highest increase. Premium
implants, our largest revenue driver, were constrained by the pandemic’s impact on predominantly premium affluent markets. Notwithstanding, strong sales of innovative products like
Straumann’s BLX implant led to share gains in theimmediacy and other segments. Sales of intraoral
scanners also rose, reflecting the increasing trend
in digital dentistry.
Our passion to create value through strategic­partnerships and acquisitions was undiminished.
To complement our orthodontics business, we
acquired a 75% stake in DrSmile, one of Europe’s
fastest-growing specialists in direct-to-consumer
marketing of clear aligner solutions fully backed byexperienced clinicians. We also invested in­Promaton, a software company developing artificial intelligence applications to support diagnosis
and treatment planning. To expand in the emerging Romanian market, we acquired the establisheddistributor Artis Bio Tech. Collectively, these investments amounted to approximately CHF 46 million

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

with further payments expected in the coming
years. We continued to expand manufacturing
capacity (CHF >50 million) which, together withinvestments in information technology and otherfixed assets, resulted in capital expenditures of
CHF 82 million (CHF 150 million in 2019). Cashfrom operating activities amounted to CHF 377
million (CHF 378 million in 2019) and free cash flow
reached CHF 295 million (CHF 230 million in 2019).
MARKETS, ENVIRONMENT – TRENDS
We estimate that the global market for implantdentistry is worth approximately CHF 4 billion1,
after contracting by 10–15% due mainly to thepandemic lockdown. Thanks to our agile response,
we outperformed the market. The drivers of midand long-term market growth remain valid andinclude innovation, the growing and aging population, awareness of esthetics, increasing availability
and affordability.
Our second largest market, clear aligners, is worth
approximately CHF 3.5 billion2 (see p. 33 f.) and was
growing at 20% prior to COVID-19. In 2020, it wasalmost flat due to the lockdown interruptions.
­Nevertheless, it represents one of the most attractive areas in dentistry due to the significant advantages of clear aligners over conventional wires andbrackets, including appearance, patient complianceand convenience. Growing awareness and wider
availability will drive penetration rates.
ESTHETIC DENTISTRY – BRINGINGEVERYTHING TOGETHER
Esthetic dentistry thus offers significant opportunity
for sustainable business growth in the future andcontinues to be our strategic focus. To incorporate
emerging trends and new realities, we fine-tuned
our three strategic priorities in 2020 (p. 17 ff.).

8

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYPRIORITY ONE: DRIVING OUR HIGHPERFORMANCE STRAUMANN GROUP CULTURE
AND ORGANIZATION
Culture is at the heart of execution, driving results
and creating value, which is why it remains our key
priority. Our culture continues to foster agility,
embrace change, encourage entrepreneurism,
focus on execution and deliver high performance.
These attributes enabled us to navigate the crisis
as an opportunity rather than a threat.

Straumann Group

2020 Annual Report

The engagement of many
dedicated, talented people whobrought progress and solid
results in tough conditions
deserves recognition and reward.
Entering 2020, we were geared for strong growth,having doubled our workforce over the three prioryears. With revenues tumbling 70% at the­pandemic’s peak, we quickly had to align ourcosts – most of which are personnel. In addition to­subsidised working-hour reductions and reduced
compensation (including voluntary cuts by the
Board and senior management), we regrettably
had to lay off approximately 9% of our global
workforce. Our key objective was to conduct this in
a responsible, fair and timely manner, withoutcompromising the company’s ability to reboundrapidly. We are deeply thankful for the professionalism and understanding of all our colleagues,
especially those whose positions were discontinued. We are also grateful for the suggestions,­solidarity and selflessness of our colleagues who

SUSTAINABILITYREPORT

CORPORATEGOVERNANCE

helped to minimize the impact on jobs. At year
end, our global team totaled 7340, including 360
who were added through strategic acquisitions
and newly created positions.
Diversity, inclusion and belonging bring new perspectives, foster innovation, provide market
insights and add value. The diversity, skills andexperience of our leadership team have broadened(see p. 93 ff.), and our global staff includes morethan sixty nationalities in more than a hundred
countries. In spite of the challenging times, ourannual staff survey showed a high level of engagement, pride in working for Straumann Group,
excitement in the future and confidence in themeaning and purpose of our work (see p. 65).
The engagement of many dedicated, talented­people who brought progress and solid results intough conditions deserves recognition and reward.
Due to the extraordinary circumstances in 2020,
their exceptional efforts are not necessarilyreflected in our ordinary financial performanceindicators. For such cases, the Board of Directors
decided to award a discretionary short-term incentive at 80% of target to all eligible employees3.
With regard to the 2017 long-term incentive which
vested in April 2020, we met the 3-year objectives
for total shareholder return (+14% CAGR) and
EBIT growth (CHF +50 million), resulting in acapped maximum award for senior management(see p. 115 ff.).
PRIORITY TWO: ACCELERATING GROWTH IN CORE
IMPLANT MARKETS AND STRATEGIC SEGMENTS
The market for tooth replacement offers significant
opportunity. In premium implants, we have astrong innovation pipeline and global rollout program. In value implants, we have a broad range

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

covering all price tiers and the capability to expand
these brands internationally.
Pursuing our goal of leading the immediacy­segment, which accounts for roughly a quarter ofthe 27 million dental implants placed annually, we
continued the global rollout of Straumann BLX.
­Straumann’s new Zygoma implant system (seep. 25), which we launched virtually, will support
BLX’s growth trajectory. Our innovative TLX
implant, which entered its clinical program (seep. 25), and our Smile in a Box solution also contribute to this objective.

Our culture continues to foster
agility, embrace change,
encourage entrepreneurism,
focus on execution and deliver
high performance.
To increase affordability, especially in emerging
markets, we continued the global rollout of ourchallenger brands Neodent, Anthogyr and­Medentika. For the lower value segment, welaunched our new NUVO brand in initial markets
and our Korean partner brand, Warantec, in China.
Event cancellations and restrictions on travel andmeeting did not diminish our efforts to win customers. Through strong innovation, launches andintense online efforts (including education, virtual
symposia, and summits – see p. 60 ff.), we
attracted customers and strengthened our market
positions. We continued to serve customers

9

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

2020 Annual Report

CORPORATEGOVERNANCE

directly through our subsidiaries and also to address
the corporate segment by partnering with Dental
Service Organizations (DSOs). Despite lockdowns,
we expanded our existing DSO business and built
new partnerships. One highlight was our online
global DSO summit with 50 CEOs from ­leading
DSOs r­ epresenting 31 000 clinicians in 28 countries.

Straumann’s orthodontic, restorative, implant,
chairside, and digital dentistry solutions. We also
gained global distribution rights for the attractively priced Medit intraoral scanners, which complement our range and strengthen our position asa global partner of choice for integrated intraoral
scanning solutions.

PRIORITY THREE: CREATING A LEADING­ECOSYSTEM FOR ESTHETIC DENTISTRY
Our third strategic priority combines the desire fordental esthetics with seamless digital experiences.
Our goal is to connect all our digital solutions,­services and equipment with partners and third­parties, providing frictionless customer-centric
solutions (see p. 18 ff.). To drive this strategy, weestablished dedicated Digital and Orthodontics
business units and recruited high-caliber executives to lead them. Both businesses grew in 2020.

CONTINUED COMMITMENT TO LONG-TERM
VALUE CREATION
We remain committed to sustainable development
and value creation. This means running our operations efficiently using natural resources effectively
and minimizing our environmental impact (seep. 58). Our commitment also encompassed 20 charitable projects in 2020, offering dental care andhumanitarian relief in 13 countries (see p. 69 ff.).

We are confident that we will
emerge as an even stronger
brand and partner of choice.

Straumann GroupSUSTAINABILITYREPORT

In orthodontics, ClearCorrect launched new software and an innovative high-performance material
to enhance convenience, increase comfort andshorten treatment. We also entered the exciting
arena of online consumer marketing with DrSmile.
Intraoral scanners are a key to our digital ecosystem and the gateway to digital dentistry. In October, we completed the integration of 3Shape TRIOS
intraoral scanners with the Straumann Group’s
software solutions and services. Now these highly
popular scanners can connect seamlessly with

Our strong business fundamentals and growth
opportunities are reflected in our share price,which continued to outperform the Swiss equity
market and rose 8.5% to CHF 1031 at year-end,
while the SMI and SMIM indices closed up 3.3%
and 0.8%, respectively. Ours is the second-best performing share in the SMIM universe over the past
five years. With our market capitalization exceeding CHF 15 billion, we joined the Swiss Leader
Index, which comprises the largest 30 securities in
the Swiss equity market.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

reduced by additional protective measures. Patient
confidence had also strengthened. The sharp rise ininfections around New Year led to new lockdown
measures in key markets. However, visits to­dentists for all treatments remain possible in mostplaces, and with mass vaccination underway we do
not expect a deterioration in the dental markets,
although economic recession may reduce disposable income and deter patients from seeking­elective non-reimbursed treatments. The breadthof our portfolio, our global reach, the quality andengagement of our people, and our progress in2020 make us confident that we will emerge as aneven stronger brand and partner of choice when
the general economy and consumer confidence
return to normal. We aim to achieve organic­revenue growth in the high-single-digit percentage
range. Profitability (core EBIT) is expected to
improve versus 2020.
On behalf of the Board and our colleagues, wewould like to thank you, our shareholders, for yourongoing support and confidence in our company.
Yours sincerely,

Based on the 2020 results, the Board of Directors
proposes a stable dividend of CHF 5.75 per share,payable on 15 April 2021, and intends to continue
increasing the dividend in the future, subject tofurther good performance.

Gilbert Achermann
Chairman of the Boardof Directors

OUTLOOK(BARRING UNFORESEEN CIRCUMSTANCES)
By year-end, dental practices around the world had
resumed normal work, albeit with efficiency

Notes and references

Guillaume Daniellot
Chief Executive Officer

12 February 2021
1
2
3

iData, Decision Resources Group and Straumann bottom-up estimatesin 70 countries.
Industry reports, Strauman bottom-up estimates in >40 countries.
EMB compensation subject to approval at the AGM in April 2021.

10

MANAGEMENTCOMMENTARY
Straumann Group in Brief

12

Strategy in action

17

Products, solutions and services

21

Innovation

26

Markets

29

Business performance (Group)

35

Business performance (Regions)

38

Business performance (Financials) 44
Share performance

46

Risk management

49#

TOGETHERSTRONG

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Straumann Group in brief

STRAUMANN GROUP IN BRIEF
Our business and vision
WHO WE ARE, WHAT WE DO AND
WHERE WE ARE HEADED
Headquartered in Basel, Switzerland, the StraumannGroup is a global leader in esthetic dentistry. It
unites global and international brands that stand forexcellence, innovation and quality in replacement,
corrective, preventive and digital dentistry, including
Anthogyr, ClearCorrect, Dental Wings, Medentika,
Neodent, NUVO and Straumann, as well as otherfully or partly-owned companies and partners.

Straumann Group

2020 Annual Report

The Group develops, manufactures and supplies
dental implant systems, biomaterials, CADCAM
prosthetics, digital equipment, software, clearaligner systems and various materials for dental
applications. Its principal production sites are in
Brazil, France, Germany, Switzerland and the US.
As a total solution provider for esthetic dentistry,
the Group takes a holistic approach, including
training, support and a wide range of services todental practitioners, clinics and laboratories allover the world. It is recognized as a leading innovator and works together with universities, clinics,
research institutes, networks and communities toenhance the standard of patient care. Throughunique collaborations with academic networks likethe International Team for Implantology (ITI) andthe Latin American Institute of Dental Researchand Education (Instituto Latino Americano de Pesquisa e Ensino Odontológico ILAPEO), the Groupsupports research and offers training and education to dental professionals worldwide.

With a team of more than 7300 people, the Groupis present in more than 100 countries around theworld through a broad network of subsidiaries anddistribution partners.
Straumann’s heritage stretches back to the early
1950s, although the company in its present form
and focus on dentistry was established 30 years
ago. Over the years, it has enabled millions of­people to smile and laugh without the stigma of
crooked, ugly or missing teeth. By restoring theability to eat and enjoy food, it has helped torestore health, self-esteem, well-being and confidence – literally changing lives.

OUR VISION

More than creating smiles,
restoring confidence – wewant to be the partner ofchoice in esthetic dentistry.

OUR VISION
Confidence relates to all our activities; it is built on
trust, integrity, inclusion, respect, communication,transparency, collaboration and delivering what we
promise. To our customers, confidence means
peace of mind, because our solutions are predictable and durable. To our employees, it means
rewarding jobs in a secure workplace. To our shareholders, it means sustainable returns from a highly
ethical business. For the communities in which we
operate, confidence means that we care for theworld around us as a responsible corporate citizen.
For all our stakeholders it means that the­Straumann Group is a reliable partner.
We want to be the first place that people come to
do business, to find genuine solutions, to turn ideas
into reality, to learn, master and succeed and to

For the past 30 years, Straumann has focused on creating smiles
and restoring confidence – two key determinants of wellbeing andquality of life.

12

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Straumann Group in brief

improve lives. This is what being the partner ofchoice means for us.
OUR CULTURE
The Group’s unique culture is a key to its success. It
pivots on the mindset of players and learners, who
inspire trust, are energized and embrace change;
who listen, find out, share, collaborate, include,
take risks, find solutions, learn by doing, encourageand celebrate.
To help our employees achieve their best, we strive
for a culture that builds trust and collaboration,
fosters inclusion and belonging, promotes learningand engagement, and encourages people to takeresponsibility and ownership. To support this, wehave a set of core behaviors that apply for everyone in the Straumann Group and which are listed
in our Code of Conduct.

UMBRELLA BRAND

GLOBAL BRANDSIMPLANT SOLUTIONSPREMIUM

ORTHODONTICS
CHALLENGER

DIGITALECO CHALLENGER

LOCAL BRANDS

Straumann Group

2020 Annual Report

The Straumann Group unites various global and local or regional product brands with a number of fully or partially owned companies, aswell as independent partners, which provide technology and manufacturing expertise.

The Straumann Group’s iconic global headquarters in Basel,­Switzerland.

OUR BRANDSTRAUMANN GROUP – UNITING GLOBAL­EXCELLENCE IN DENTISTRYOur journey into new segments, geographies andtechnologies has turned Straumann into a global
group of national and international brands, companies and partners. The Group’s umbrella brand­provides a common identity that generates value
for the individual brands, companies and partners.
Straumann is the leading premium brand in
implant dentistry, renowned for innovation,­quality, clinically proven long-term success,support, expertise, education and peace of mind.
At the same time, the Group is a global leader in
the non-premium segment, making high quality
implant and prosthetic solutions more affordable
to a broader population for example through its­Anthogyr, Medentika, Neodent and NUVO brands.
In these and its other businesses, including bio­materials, digital dentistry and orthodontic clearaligners, the Group is committed to being the­partner of choice.

13

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Straumann Group in brief

INPUT
FINANCIAL CAPITAL• Equity of CHF 1210m• Cash and cash equivalents of CHF 632m
• Capital expenditures of CHF 82m

HUMAN CAPITAL• 7340 talented, motivated employees in>100 countries at year end, diversity of skills,
backgrounds, experience, etc.
• Investment in staff learning of CHF >3m

OUR BUSINESSOUTPUT

VISION

More than creating smiles, restoring
confidence – we want to be the partner ofchoice in esthetic dentistry.

CULTURE & PEOPLE DEVELOPMENT• Player-learner mindset, core behaviors

p. 64

INTELLECTUAL CAPITAL• 8 global brands• >1000 active patents• Investments in intangible assets of
CHF 154m• Investment in R&D of CHF 98m

NATURAL CAPITALGOVERNANCE

p. 80

INN

OV
AT

U

BUSINESSES

. 72
60

AR

KE

p.

2020 Annual Report

OD

Np

Straumann Group

PR

6

IO

• Customer base of approx. 200K dentists
and laboratories in >100 countries• Supplier network• Communities

p. 2

HUMAN CAPITAL

p. 64• High staff engagement score of 78(4 pts. above global benchmark)• 3 average annual training & learning days/employee• Well-trained workforce

p. 21,INTELLECTUAL CAPITAL
26,• 107 patents granted in 202037
• Innovative technologies & products introduced• >1000 ideas generated in internal crowd-sourcing campaign• DrSmile and Promaton acquired

NATURAL CAPITAL

p. 75

MANUFACTURED CAPITAL

p. 72

SOCIAL CAPITAL

p. 64,
69• GHG emissions down by 2%• Titanium consumption down by 3%• Operating materials efficiency increased• Overall waste down by 5%• Biomaterials• CADCAM prosthetics• Clear aligners• Digital equipment& software• Implant systems

M

SOCIAL &RELATIONSHIP CAPITAL

N
IO

p. 35,
38,
44,
46,
123,
174

CT

MANUFACTURED CAPITAL

p. 17

BUSINESS ACTIVITIES• Raw materials• Energy• Operating materials• Buildings and infrastructure• Production sites• Distribution and selling sites• Distribution rights for 3rd party products

STRATEGYFINANCIAL CAPITAL• Revenue of CHF 1426m• Core operating profit of CHF 333m
• Core earnings per share of CHF 16.20• Free cash flow of CHF 295m
• Total shareholder return of CHF 89

T IN

G , SA

L ES & E D

TI O
UC A

N

• Solutions for tooth preservation, correction,
restoration and replacement• Restored dental function and esthetics; enhanced
quality of life
• Production capacity expanded in Calw (Germany),
Curitiba (Brazil), Markkleeberg (Germany)• More efficient production machinery installed• Approx. 3m patients treated• Customer education programs• Approx. 50K qualified leads generated through online
education campaigns• >800K followers on social media, up by >30%
• >20 charitable programs and scholarships sponsored

Value creation at the Straumann Group goes beyond financial capital. In pursuit of our purposeful vision of creating smiles and restoring confidence, we seek to generate lasting value, especially for the millions ofpatients who are treated with our solutions each year, but also for our customers, employees, shareholders and the communities in which we operate. We do this by using multiple resources/capitals responsibly
to achieve outcomes that generate sustainable value.

14

15

FEATURE STORY

ADAPTING
TO NEW REALITIESThe Straumann Group made an initially promising
start to the first quarter of 2020 with a continuation of the solid growth trend experienced in pre­vious quarters. However, as the coronavirus spreadfrom Asia to Europe and the Americas, most dental
practices were either locked down or limited toemergency or essential treatments. Furthermore,
fearing infection, patients tended to avoid dental
practices that were open. With the global market
for implant and esthetic dentistry thus c­ onstrained,
the Group’s sales dropped sharply from mid-March,
starting to recover in May when countries began tore-open and dental practices returned to normal.
The Group ensured safety and business continuity.
It also mitigated the financial impact by adapting
costs and capacity as well as ensuring liquidity.
The pandemic shut-down provided opportunities
to train, learn, do things differently, and create new
solutions as we were compelled to work remotelyand do everything online. Working from home we
stayed close to existing customers and attracted
new ones, offering extensive online services,#TogetherStrong

FEATURE STORY

information and free education – for example on
implant immediacy protocols and intraoral
scanning.

The Group ensured safety,
business continuity andmitigated the financial impact.
DIGITAL EXPERTISE TO CREATE ENGAGINGCUSTOMER EXPERIENCES
Due to travel restrictions and health precautions,dental congresses and educational events either
went virtual or were cancelled. Using its digitalstrengths, the Group orchestrated multiple virtualforums and symposia around the world to shareknowledge, showcase new solutions and present
clinical evidence – for example on BLX, immediacyand zygomatic implants.
At the same time, key innovation and R&D ­pipeline projects continued to advance and will
drive future growth.

16

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Strategy in action

STRATEGY IN ACTION
Esthetic dentistry – bringing everything together
Esthetic dentistry offers significant opportunity for sustainable business growthin the future and continues to be the focus of our overriding strategy, in spite of
the changes that the corona virus brought to many aspects of life in 2020.
We made some slight adjustments to our three strategic priorities in 2020 toincorporate emerging trends. Each of the priorities translates into a number ofclearly defined initiatives and deliverables, which are communicated, discussed,aligned and executed throughout the organization. We track them continuallyand fine tune as necessary. They are reflected in the investments, launches, pipeline, partnerships, achievements, appointments and other activities featured inthis report (see tables of examples). In 2020, strong fundamentals together withthe ability to adapt quickly, create opportunities and rebound from the COVID-19
crisis enabled us to continue outperforming our market – confirming that our
strategy is appropriate.

OUR STRATEGIC PRIORITIESDRIVE OUR HIGH PERFORMANCE STRAUMANN GROUP CULTURE
AND ORGANIZATION
We continue to drive a culture that fosters agility, embraces change, encourages entrepreneurism, raises bars, focuses on execution and delivers high­performance. Culture is at the heart of execution; it drives results and createsvalue, which is why it has remained our key priority. Our fast response to the
COVID-19 challenges would not have been possible without the previous
investments in our culture. Our culture has enabled us to embrace rapidchange and to view the crisis as an opportunity rather than a threat.

Examples of this strategic priority in action in 2020
Culture• Strong online outreach to keep in touch with customers, e.g. byswitching education and conferences to online channels(#TogetherStrong, #TimeForEducation)• #CultureInAction program to engage employees and keep moralehigh while working and leading remotely• Global staff survey improved; strong response rate and­engagement score above benchmarks (see p. 65)

People• COVID task force ensures people safety• Right sizing of organization completed with social responsibility(see p. 64)• New leadership team established; culture role modeling(see p. 93 ff.)
• Staff initiatives to help customers fight the pandemic(switch to manufacture protective materials)

Operational excellence• COVID task force ensures business continuity and mitigates­f inancial Impact• Clear aligner production facility opened in Europe• Readiness for European Medical Device Regulation (MDR)(see p. 55)• Program/initiatives to optimize sales channel approach

Straumann Group

2020 Annual Report

The key executive succession planning and appointments that we worked on in2020 are designed to support each of our strategic priorities, adding experience,expertise, talent and diversity from international companies in other sectors.

Our strategy addresses the increasing desire for personal esthetics in today’s society.

17

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Strategy in action

ACCELERATE GROWTH IN CORE IMPLANT MARKETS AND
STRATEGIC SEGMENTS
Our efforts to win customers and to gain share in both the premium and challenger segments were intense and fruitful, despite the travel and visiting restrictions as well as the cancellation of conferences, marketing events and training
courses. Through intense online efforts, strong innovation and recent launches,
we won customers and strengthened our market position. We also continued ourstrategy to address customers directly through our own subsidiaries and toaddress the corporate dentistry segment by partnering with DSOs. We continue
to build and deliver our innovation roadmap to secure a strong launch pipeline ofdifferentiating solutions.

Straumann Group

2020 Annual Report

Examples of this strategic priority in action in 2020
Differentiating premiumsolutions• Straumann BLX now available in >30 countries, gaining
segment share• New TLX implant enters clinical program prior to launch• Straumann Zygoma implant system launched (online)• Smile in a Box™ combines products and service for workflow­efficiency, shorter time to teeth, excellent customer experience

Solutions for challenger­segments• Neodent, Anthogyr and Medentika portfolios expanded and rolled
out internationally• NUVO brand launched to offer greater affordability

Biomaterials• Further regulatory approvals and continued rollout• Emdogain 25th anniversary campaign

We have set the stage forsustainable future
growth and will continue
to create opportunities.

CREATE THE LEADING ECOSYSTEM FOR ESTHETIC DENTISTRY
We aim to connect all our digital solutions, services and equipment with­partners and third parties in order to provide frictionless customer-centric
solutions, including workflow management and data analytics to drive switching, cross and upselling activities. We aim to create a portal that addresses theincreasing desire for dental esthetics and seamless digital experiences. It also
addresses the growing trend in platforms and ecosystems as strong competitive advantage.
Examples of this strategic priority in action in 2020
Dedicated Digital and Orthodontics business units created; high-caliber executives recruited
to lead them
Orthodontic dentistry• Acquisition of DrSmile – entry into online consumer marketingfor aligner treatment solutions in Europe• ClearPilot aligner software launched, enhancing convenience andshortening treatment• High-performance clear aligner material launched• Seamless connection of TRIOS intraoral scanners with
­ClearCorrect’s Doctor Portal, facilitating case submission
and ordering

Digital dentistry• Integrated workflow solutions connecting third-party intraoral
scanners with ClearCorrect, Smile in a Box and coDiagnostiX• Partnerships with mutiple intraoral scanner manufacturers
strengthened• Full integration of TRIOS intraoral scanners into Straumann­workflows• New commercial models and partnership to lower entry barriers
to intraoral scanning• Acquisition of Promatron to add expertise in artificial intelligence

Preventive dentistry• Pilots to assess implant health and other products in selected
GP markets

OUR STRATEGY DELIVERS SUSTAINABLE GROWTH
Through internal development, acquisitions, investments and partnerships, wehave significantly expanded our addressable market, which has more than­trebled over the past six years and still offers considerable growth potential(see p. 34). We have set the stage for sustainable future growth and will­continue to create opportunities that are aligned with our strategic priorities,
constantly vigilant and agile to adapt to a fast-changing environment.

18

19

FEATURE STORYCREATING A LEADINGECOSYSTEM IN ESTHETIC
DENTISTRY#TogetherStrong

An ecosystem comprises a number of parts thatare connected in some way to each other – directly
or indirectly – and that benefit from, depend on, or
influence, each other – directly or indirectly, all tovarying extents.

requiring tooth replacement. The data may be used
together with other scan data to plan the surgery –including the position and type of implants used.

In terms of people, the dental practice represents
an ecosystem including practitioners, specialists,hygienists, support team, and patients. Practices
may be independent or part of a chain. They rely
on laboratories – internal or external – with theirown ecosystems of technicians, suppliers, etc.
­Practices, labs and chains rely on manufacturers,
some of which may be the same. The manufac­
turers also have their own ecosystems.

Our goal is to create a leading
ecosystem that brings
everything together forstronger solutions and greatcustomer experiences.

The various components and services used by eachof these players are parts of systems and workflows that may or may not be connected. For
example, an intraoral scanner in a dental practiceis used to take a digital impression of a patient

The data is also used to design the prosthetics(crowns, bridge, denture). The planning and design
data are used to produce surgical guides and­prosthetics – e.g. by 3D-printing and milling.

20

FEATURE STORY

Su

Orthodont

Prosthetic
deSE

Digitalwo-printing o
f
3D

Su
r

Pro
s

CARES chairside

Un!que®

w for dental
flo
la
rk

ories
rat
bo

design so
tics
ftw
e
th

rvice for
de
n se
g
i
n
s

actices
l pr
ta

ON

Intraoral scanner

are

Mi
ll

ice
serv
ng

ice

S INTEGRA
LES
TI
M
A

coDiagnostiXof prostheingatment plan
tre
ni
c
i

Smile in a Boxnning so
l pla
ftw
ca
i
g

s
tic

Straumann’s range of digital solutions includes theequipment, products, services, software and­support to cover these and other dental workflows.
Our goal is to create a leading ecosystem that brings
everything together for stronger solutions, integrating workflows and systems, connecting people –patients, dentists, labs, clinics, and other providers,increasing efficiency, enhancing treatment outcomes, and creating great customer experiences.

rgical guidsu

l planning ser
ica
v
g
r

e
ar

The same intraoral scanner might be used byanother dentist in the practice to take an impression of another patient requiring orthodontic­treatment, in which case the image data would betransmitted to an external planning service after
which the design data are sent on to the production center to manufacture the models and­aligners. The intraoral scan data would also be
used by AI algorithms for monitoring the­treatment progress remotely, reducing patient­visits to the dentist. Managing these very different
cases requires connectivity as well as powerful,convenient and reliable software.

STRAUMANN GROUP DIGITAL SOLUTIONS: A UNIQUE POWERFUL SEAMLESS ECOSYSTEM

mode
and
ls
es

Each of these steps could involve third parties atvarious locations. Straumann’s Smile in a Box solution brings all these workflows together to order,
produce and supply all the components including
implants, templates, instruments, abutments andprosthetics, which are delivered together in one
box for a same-day treatment.

CARES
dental labs

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Products, solutions and services

PRODUCTS, SOLUTIONS AND SERVICES
With the vision of creating smiles and restoring
confidence, our various brands have been innovating, developing and refining products and solutions
for many years that address patient needs and contribute to their quality of life. Our product range
includes dental implant systems, prosthetics, digital equipment and solutions, orthodontic systems,
biomaterials and implant health treatments as wellas materials for 3D-printing and clear aligner­production. As a Group, we strive to provide totalsolutions across segments, enhancing convenience,
raising efficiency and adding value, comfort andsecurity for customers and patients.
To complement our range of products and solutions, we offer a broad spectrum of services
through our various brands, for example:• Surgical planning, offered in modules and­supported by image analysis and diagnostics
driven by artificial intelligence

To provide services of this kind, our staff requires acomprehensive understanding of the dental business and our products. Extensive staff training istherefore an important aspect that contributes toour service offering.
MEETING CUSTOMER NEEDSIn line with the Group’s strategic priorities to offer
total solutions and to penetrate unexploited markets and segments, we introduced numerous new
items and solutions at various virtual events in
2020. We began rolling them out on a country bycountry basis following regulatory approvals.
ClearCorrect’s ClearPilot software for clear aligner treatment planning
was introduced in 2020, increasing convenience and time savings.

Click here for more productinformation .

Straumann Group

2020 Annual Report• Prosthetic design and centralized manufacturingservices• Services including professional practice-oriented
and individual support, tailored to the needs of a
new generation of dentists, including those whohave recently begun their careers• Tools to support dentists in informing patients
about treatment• Practice-oriented training materials• Blended learning opportunities, that combine
online modules and hands-on tuition.

Straumann’s fast growing BLX implant system.

21

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Products, solutions and services

Anthogyr
Bay Materials
ClearCorrect
Createch
Dental Wings
DrSmileMedentika
Neodent
NUVO
Straumann
T-PlusYller Biomateriais

Preventive
dentistry

Treatment planning

Implant surgery & orthodontic treatment

Prosthetic design, production & placement

Perio
treatment

Dataacquisition

Orthodontics

Design service

Multiplatform
prosthetics

•

•

•
•

Planning andservices

•
•
•
•
•
•

Partially owned by
Straumann Groupbotiss biomaterials
Dental Monitoringmaxon dental
Promaton
Rapid Shape
Valoc
Warantec
Z-Systems
3shapeAmann Girrbach
Carestream
Meditsmyletec
Zirkonzahn

•
•
•

•

Zinedent

Partneringbusinesses(distributor)

Straumann Group

2020 Annual Report

Controlled by
Straumann Group

Main brands

•

•
•

•
•
•

Implants andprosthetics

Biologics

•

•
•
•
•
•
•
•

•

•
•

CADCAM
production

•
•

•

•
•
•

•

•
•
•
•

•

•
•

•

This chart shows the Group’s main brands, the degree of ownership and how they each support the dental treatment cycle from prevention and correction to replacement and restoration.

•

22

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Products, solutions and services

The Group’s new offerings include implant systems
and components, guided and non-guided surgicalinstruments, fully integrated digital workflows, additional edentulous solutions, more efficient prosthetics, as well as new digital and ­orthodontic solutions(see table below).
2020 main product launches

Intended benefit and added value for customers and their patients

Straumann Group

2020 Annual Report

Implant solutions
Straumann RidgeFit implant (US)• Immediate removable fixation for overdentures with integrated retentive element
for compromised patients at affordable price point

Straumann Zygomatic implant• Implant solution for partially or fully edentulous patients with severe bone loss inthe upper jaw

Straumann BLX implant with SLA surface• Economically priced version of BLX

Anthogyr INITIAL guided surgery• Compact surgical kit for guided surgeries in an open digital workflow, designed formore e­ fficient, less invasive, faster treatments and enhanced patient communication

NUVO• Economically priced global implant brand• Very wide range of indications and ­workflows covered

Neodent Helix GM Ø7.0 mm• Wide diameter facilitating immediate treatment in molar extraction sockets

Neodent Control Drill System• Color-coded drills with stop and innovative r­ etention system• Reduces risk of overdrilling

Neodent pre-mounted kit• Instruments ready mounted in kit tray
• Convenience

Neodent EasyPack• Implant, healing components, hybrid analogue, and innovative 3-in-1 Smart­abutment supplied in one package• Broad range of indications• Conventional and digital workflow options

Medentika new implant insertion instruments • Simplified implant insertion process, additional safety
Medentika new surgical cassettes• Easy cleaning process, safety

Restorative
Straumann immediate temp abutment• Easy chairside workflow for immediate ­temporary restoration of single implants

Straumann Novaloc TiN (US)• Prosthetic fixation system with high wear resistance

Straumann NeXT screw-retained abutment• Design to support immediacy workflows

Anthogyr FlexiBase plural• Extension of Anthogyr’s Ti-base range for CADCAM or conventional implant­restorations• Prosthetic flexibility

A simple and meaningful improvement: Neodent’s convenient EasyPack­contains all the components for an implant placement, which previously
had to be ordered separately.

23

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

Products, solutions and services

Table continued
2020 main product launches

Intended benefit and added value for customers and their patients

Anthogyr Simeda additive manufacturing• High quality, high strength customized titanium suprastructures• Design flexibility• Attractive priceAnthogyr extended solutions for removable
overdentures• Retentive solutions for removable overdentures• Ease of use, comfort, reliability and clinical performance

Medentika multi-unit prosthetic extension• Novaloc/MedentiLoc coping• Simple adaptation from fixed to removable restoration without changing the­existing multi-unit abutment

Medentika titanium coping Flex

• Flexibility for digital workflow• Esthetic case solutions, titanium coping for ­angulated screw channel

Medentika MPS line extensions• Comprehensive offering to be competitive

Medentika Ti-Base portfolio completion• Rotating version for MPS series• Additional gingiva height for MPS series

Neodent Ti-Base with angled screw channel• Angulation up to 25°• Improved esthetics in the anterior region and improved access to retaining screw inthe p­ osterior zone

Neodent GM abutment digital workflow• GM abutment titanium coping and scan body
• Digital workflow for immediate restoration at abutment level

Digital
Full integration of 3ShapeTRIOS
intraoral scanners• Integrated into Straumann’s software for implant surgery planning, prosthetic
design & milling, Smile in a Box and ClearCorrect’s workflow for clear aligners

Straumann Group

2020 Annual Report

Orthodontics
ClearCorrect ClearQuartz• High-performance tri-layer material for clear aligners• Comfort, tear resistance, sustained force, optimized clarity, excellent tooth­adaptation and stain ­resistance

ClearCorrect ClearPilot• Upgraded software tool for treatment planning• Increased convenience and time savings

Biomaterials and prevention
Straumann Emdogain MI (US)• New applicator facilitates access to perio-pockets• Designed for flapless periodontal regeneration and reduced treatment invasiveness

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

24

25

FEATURE STORYTOGETHER STRONGIN IMMEDIACY#TogetherStrong‘Immediacy’ covers a range of procedures in
implant dentistry 1. It refers to placing an implant
immediately in a tooth extraction socket and/or
placing a prosthesis immediately, irrespective ofwhether the implant was placed in a fresh or ahealed extraction site. Immediacy addresses
patient expectations by shortening time to teeth,saving costs, reducing surgery and clinic visits –which is an advantage during a pandemic.

A full arch immediacy solution using Straumann’s zygomatic and
BLX implants.

Tapered implants are central to immediacy
because of their high primary stability. Our wide
range (see p. 30) includes Straumann BLX, which is
now available in 30 countries.
In 2020, we introduced a new zygomatic implant
solution at a virtual launch event including an
online symposium, interactive plenary sessions anda ­virtual congress booth.
Zygomatic implants differ from conventional
implants in that they are anchored in the­zygomatic (cheek) bone rather than the upper jaw.
They are used in patients with severe bone loss,
and thanks to the firm stability achievable in dense
zygomatic bone, a prosthesis can usually be placed
immediately. Our new zygomatic implant systemcomplements BLX and our immediacy portfolio;
it addresses the needs of specialists who uselarge v­ olumes of implants in conjunction with­zygomatics – usually from the same manufacturer.
Straumann zygomatic implants are compatible
with our bone level prosthetic portfolio. Thus they
offer the advantages of our BLX and BLT prosthetic
range for fixed overdentures and can be used withour ­coDiagnostix software to plan the implant
position by computer.

The latest addition to our immediacy portfolio is
TLX, which combines the neck design of our iconic
Tissue Level (TL) implant – one of the longest andbest-selling implants – with the innovative endosteal design of BLX, perfected for immediate protocols. The combination of high ­primary stability andthe advantages of TL, designed for peri-implant
health preservation and to simplify handling andreduce treatment complexity should bring us
closer to the goal of leadership in immediacy whenit comes to market in 2021. A large preclinical andclinical program began in 2019.
The ImmediaXy online campaign, launched in 2020,
promotes Straumann’s broad range of solutions,
including our Smile in a Box service, which supplies
implants, guides, drills and prosthetics for immediacy protocols together in one pack.
1

Definition of terms as described in: Implant placement and loading­ rotocols: A systematic review: German Gallucci, Adam Hamilton,p
Wenjie Zhou, Daniel Buser and Stephen Chen. 2018, Amsterdam­Consensus meeting.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Innovation

INNOVATION
Together strong in innovation
Straumann has been a leading innovator since thepioneering days of implant dentistry. Over theyears it has been joined by a number of establishedbrands with their own heritage of research anddevelopment as well as a host of young companies
and partners with a passion for turning new ideas
and technologies into commercial successes.
Together they form a unique global powerhouse ofinnovation in dentistry.

Straumann Group

2020 Annual Report

COMMITMENT TO INNOVATION MAINTAINED
Despite the necessity to adapt our cost base to thelower revenue levels inflicted by the pandemic, we
continued to invest in research and development inorder to sustain the momentum of key innovation
projects, pressing ahead with exciting pipeline
projects that will bring significant benefits topatients and customers and help to drive future
growth. We succeeded in commercializing several
new ideas in 2020 (see p. 23 f.), creating novel
approaches to launch the new products and solutions using online platforms and virtual events.
The Group’s pipeline comprises strong core development projects balanced with breakthrough innovations addressing current and future trends. With
the world changing faster than ever, we look at
trends in our industry and beyond (e.g. patient
empowerment and the emergence of subscription
boxes) to ensure the relevance of our approach andto stay at the forefront of innovation with regard
both to technology and business models.

We continue to focus on exciting disruptive technologies, for example robotics and artificial intelligence, and smart device technology including
wearables and tele-dentistry. Our investment inPromaton in 2020 has provided entry to the field of
diagnostics assisted by artificial intelligence.
DEVELOPING AN INNOVATION STRATEGY DRIVENBY CUSTOMER UNDERSTANDING
Staying close to customers and understanding
them is a key driver of innovation at the Straumann Group. Seed ideas for innovations come fromvarious sources both in and outside the Group. The
number of ideas submitted externally through theStraumann Group Innovation Portal in 2020 was
30% higher than in previous years, with a large proportion submitted during lockdown. Internally, theGroup fosters a culture of innovation characterized
by the ‘freedom to flourish’. The Group provides
space and resources for innovation across businesses, brands, locations and functions within acentralized framework – always putting patientand customer needs center stage. In 2020, theGroup explored a novel approach to stimulating,sourcing and filtering ideas on a large scale internally, which was highly successful.
BRINGING INNOVATIONS TO CUSTOMERSAND PATIENTSThe following table highlights the development
pipeline projects that we worked on in 2020 with aview to launches starting in 2021.

Straumann’s partner Promaton uses artificial intelligence (AI) as adiagnostic aid in image analysis. The company’s Apox platform­creates clinical insights from panoramic, peri-apical or bitewing
x-rays. The AI can identify most dental structures and will be
extended to automated detection of pathologies, reducing thediagnostic error rate.

26

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Innovation

Examples of development projects scheduled for introduction or rollout starting in 2021
Project

Key benefit target

Surgical
New implant packaging

Ease of use, enhanced customer experience

SDIS 2.0

Entire Straumann dental implant system simplified

Straumann TLX

Fully-tapered soft-tissue level implant system for immediacy protocols

New implant design

Fully-tapered implant adapted for all bone density types with more dynamic engagement

Guided surgery

Complete solution for all types of surgeries, with ergonomic and modular characteristics

Surgical instruments

Increased flexibility for all protocols, new kit for enhanced implant placement in hard bone includimg a tool to mark implant
placement

Ceramic portfolio extension

Highly esthetic, metal-free advanced implant design and novel production technology

Prosthetics
CADCAM implant-borne prosthetics
portfolio evolution

Enhanced CADCAM portfolio to attract new customers and improve customer experience

MPS portfolio

Extended portfolio covering more 3rd party systems; attractively priced alternatives; broader availability

Prosthetic innovation

Additional prosthetic concepts tailored to digital immediacy workflows

Ti-base portfolio

Extends multi-implant offering, including angulated solutions for conventional and CADCAM workflows;
portfolio additions and line extensions

Straumann Group

2020 Annual Report

Edentulous
Zygomatic implants

Immediate, graftless implant solution for edentulous patients with severely atrophied mandibular bone

MPS portfolio

Less invasive and shorter procedures (immediacy), additional indications

Edentulous solution offerings

Patient-centric approach with a broad choice of fixed and removable options, mini implants, focus on immediate procedures

Orthodontics
SoftwareAutomatic assessment of patient’s oral health, aligner treatment acceptance tool, software upgrades, add-on tools, supporting
clinical collaboration and treatment plan approval, case management in IOS software

Whitening solution

Add-on product for complete esthetic solution

Hybrid solution aligner

Treatment of complex cases

Improved clear aligner material

Patient comfort, esthetics, shorter treatment

Premium

Value

27

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Innovation

Table continued
Project

Key benefit target

Digital dentistry
Integrated planning and design service Add-on central service for finalized tooth or implant-borne restorations
CADCAM materials

Full range of materials for labs and dentists, additional material options in centralized milling service

New 3D printerNext generation technology

3D printer resins

Portfolio extension

Scanning technology

Portfolio extension serving labs and practices

Planning software

Enhanced surgical planning

AI

Advanced diagnostics and treatment planning automation

Biomaterials
Periodontal pocket treatment

Minimally invasive, easy to perform

Novel regeneration system

Controlled degradation time, reduced invasiveness and reduced chair time

Straumann Group

2020 Annual Report

Implant health
Surface technology

New coating helping to maintain healthy mucosa

Treatments for peri-mucositis

Innovative portfolio aimed at long-term success in peri-mucositis

Premium

Value

28

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Markets

MARKETS
Penetrating attractive global markets that offer significant
growth opportunities

Straumann Group

2020 Annual Report

THE GLOBAL DENTAL SUPPLY AND
EQUIPMENT MARKETThe dental supply and equipment market is an
attractive subsector of the medical device sector
and ranges from instruments, adhesives and fillingmaterials to imaging hardware and practice equipment. It also includes specialty segments like
implant dentistry, endodontics, biomaterials,­CADCAM equipment, prosthetics, and orthodontics.
The total dentistry market was valued at more than
CHF 23 billion in 20201. In the course of the year, themarket went through an acute short-term decline
as the COVID-19 pandemic forced dental practices
around the globe to close during lockdown. Notwithstanding, the drivers of mid- and long-term
market growth remain valid and include the aging
and growing population, increasing prosperity,awareness of oral health and esthetics, andinnovation.
IMPLANT DENTISTRYThe Straumann Group’s core market is implantdentistry2, which is estimated to be worth approximately CHF 4 billion globally3. Based on available
data (not all company reports were available attime of writing), we estimate that it contracted by
10 to 15% in 2020 due to the short-term impact of
COVID-19. Having continually outperformed forseveral years, we further strengthened our positionin 2020 – despite the challenges and thanks to the
speed of our response to the pandemic crisis. We
believe that we increased our market share toapproximately 27% and continue to lead the global
implant market. Close to three quarters of the­market are held by the leading five companies
while the rest is shared among several hundred
manufacturers, most of whom operate on aregional or local basis and compete in the non-­premium segment. The latter has been growing
faster than premium, due to the increase in manufacturers, the lack of reimbursement schemes, andstronger growth in emerging markets, where­procedure prices and disposable income are lower.
Non-premium brands collectively account for
approximately half of the worldwide implant­market in value terms.

Dentistry market overview 2020

Total dentistry
CHF >23bn#6

Having focused exclusively on premium implants,
Straumann entered the non-premium segment in2012. Having acquired various brands in the meantime, the Group now offers a broad range of­solutions in both the challenger and eco price­segments. Today we have a leading position in theStraumann position

Implant dentistry market overview 2020

CHF 4bn#1

We believe that we increased
our market share andcontinue to lead the global
implant market.

MarketMarketStraumannposition27%
Implant dentistry

Straumann Group
Envista, Dentsply Sirona,
Osstem, Henry Schein
Others29

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Markets

non-premium segment, although we estimate ourmarket share to be just above 10%, indicating that
we have ample opportunity for growth in the­coming years.
THE TAPERED IMPLANT SEGMENT
Dental implants are distinguished by their shape.
Tapered implants offer high primary stability andare the preferred choice of many clinicians in
extraction-socket indications and immediacy protocols or when patients have a soft bone morphology. Patients value immediacy solutions for quick
results, convenience and safety through fewerpractice visits. More than 80% of dental implants
sold in 2020 were tapered. Parallel-walled
implants, on the other hand, are valued for theirperiodontal performance and have been documented for more than 30 years. The Straumannbrand dominates this category, while other brands
in the Group, like Neodent and Anthogyr, have alonger tradition in the tapered segment, where
they occupy a solid position.

In 2014, Straumann entered the premium tapered
segment with its apically-tapered BLT implant,­followed in 2019 by its fully-tapered BLX implant,
which has spurred growth and enabled us to­outpace the market. BLX has now been rolled out
in key geographies and, together with BLT, Neodent Helix GM and Drive GM, Anthogyr Axiom PX,
and Medentika Quattrocone, provides the Group
with a formidable portfolio of fully and apicallytapered implants. We believe that, with this broad
range and our strong pipeline, we should be able towin further market share in the fastest growing
implant segment and become the leading providerof immediacy solutions – which was hardly imaginable a few years ago, when our fully-tapered offering comprised just a single non-premium design.

BLX has spurred growthand enabled us to outpace
the market.

CONSIDERABLE POTENTIAL
Following the acute decline during lockdown, theimplant market began to recover as practices wereable to re-open. However, there is still some uncertainty about when it will return to pre-COVID

Straumann Group

2020 Annual Report

Unparalled range of immediacy solutions

Straumann
BLT

Straumann
BLX

Straumann
TLX

Neodent
Helix GM

Neodent
Drive GM

AnthogyrAxiom PX

Medentika
Quattrocone

Straumann
Zygomatic Implant ZAGA

Neodent
Zygoma GM

30

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Markets

growth rates because the near-term economic outlook is unpredictable. Implant dentistry is an e
­ lective
procedure that is rarely reimbursed. It thus relies on
disposable income and consumer confidence.
Despite the near-term uncertainty, the following
principle growth drivers of implant dentistry remain
valid:• demographics – in an ageing population, moreelderly people need tooth replacement• affordability – the middle class is growing indeveloping countries• treatment provision – the number of trained dentists who are confident placing implants is rising• awareness – patients are better informed about
the benefits of implant treatment

Implant dentistry is expected to continue outpacing
the overall dental market. In the world’s largest dental market, the US, more than 120 million people are
missing at least one tooth4, yet just about one and ahalf million are treated each year5 (corresponding to
2.7 million implants). This is low, both in absoluteterms and in comparison with other countries. As thechart below shows6, we believe that the number ofpatients treated per 10 000 adult population in the
US is only half that of Italy and only a third of that of
Spain, two of the largest European markets. This
exemplifies the considerable growth potential.
­Penetration in other highly populated countries likethe UK, India, China and Japan is also clearly below­average, offering strong upside potential in the­coming years.

Implant dentistry is expected tocontinue outpacing the overall
dental market.

• esthetics – the trend in people choosing cosmetic
treatments and dental implants is growing andconsumer expectations are rising.

Implant
penetration: Patients treated annually600
per 10 000 adult population
500

300

With very few exceptions, tooth replacement is an out-of-pocket
expense. In South Korea, reimbursement was gradually introduced
for senior ­citizens in 2014. This, together with the fact that morethan 70% of the dentists in the country place implants, explains thehigh penetration rate. By contrast, large economies like China andIndia remain heavily underpenetrated due to a lack of qualified­dental professionals.

200
100

India

China, Hong KongJapan

UK-Ireland

Netherlands

RussiaUSA

Switzerland

SwedenTurkeyBrazilAustria

Germany

Italy

Spain

0
South Korea

Straumann Group

2020 Annual Report

400

31

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Markets

BIOMATERIALSThe Straumann Group is also active in the global
market for oral biomaterials, which include boneaugmentation materials, membranes, fleeces,sponges and soft-tissue regenerative products.
As biomaterials are used in a large proportion of­dental implant procedures, market growth is linked
to that of implant and bone-ridge preservation
treatments (although biomaterials are less commonly used in conjunction with mini and short
implants and in immediacy protocols).

Straumann Group

2020 Annual Report

In 2020, the worldwide market for oral biomaterials was estimated to be worth more than 500 million7. In recent years, the Group has significantly
expanded its biomaterials franchise through partnerships (e.g. with botiss, Genoss and Nibec) andtoday is a top-five global player in this market.
CADCAM EQUIPMENT
Developments in digital hardware have made it
possible to design and create dental restorations
including abutments, crowns, bars, and bridges (allcommonly referred to as prosthetics) using computers, saving time, increasing accuracy andenhancing esthetic outcomes. Digital workflows
are becoming increasingly important for clinicians,
dental technicians and patients. We estimate thatthe global market for dental CADCAM equipment,
which comprises optical scanners as well as millingand 3D-printing equipment, was worth more than
CHF 1.5 billion in 20208, including new installations, upgrades and replacements.
Dental CADCAM systems fall into three categories:• chairside systems, where scanning, design andmanufacturing are all performed in the dental
practice• in-lab systems for scanning, design, and manufacturing on medium-sized milling machines or 3D
printers• central manufacturing, in which practice and lab
scanners connect to an external center that uses
large-scale milling and 3D-printing equipment.
Straumann has been an established player in thecentralized milling segment for more than adecade and entered the lab and chairside millingsegments in 2016. Penetration of the latter is still
modest in spite of the speed, convenience andpatient acceptance of intraoral scanning. Even inadvanced markets, like the US and Germany, lessthan a third of dental practices use intraoral scanners and few have invested in chairside milling­systems, which indicates the large potential for
growth in this segment. By contrast, many dentallabs have gone digital and have invested in digitalproduction equipment and systems.
3D-printing technology is advancing rapidly in thedental field e.g. for producing models, surgical
guides and temporary prosthetics. In recent years,
Straumann has strengthened its position in thismarket through partnerships and acquisitions(e.g. RapidShape and Yller).
We are convinced that the future of dentistry lies
in digital workflows. Technology and software are
evolving rapidly and there are clear signs of digitaltransformation. The pandemic has accelerated thistrend, especially in the adoption of intraoral scanners, to offer increased safety, treatment efficiency,
and enhanced patient experience. Intraoral scanners are becoming more and more intuitive andversatile and will become the gateway to the digital dental universe. We estimate that, in the US
today, more than 80% of case submissions for clear

In recent years, the Group hassignificantly expanded its
biomaterials franchise andtoday is a top-five global player.

We are convinced thatthe future of dentistry lies
in digital workflows.

32

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Markets

40–50%

10–20%

Source: Straumann proprietary GP survey in US, DE, IT, and UK;
sample size >200 dentists.

≤5%
Professional
in-office teeth
whitening

1–5% 3–10%
Orthodontics

5–8%

Implant
surgery

7–12%

Implant
restoration

Internal and independent surveys show thatpatients are increasingly willing to invest in treatments that not only restore function, but also
improve appearance. CADCAM makes it possible touse strong, highly esthetic translucent glass­ceramics or hybrid materials and Straumann­competes in the materials market with its innovative proprietary glass ceramic, n!ce.

Percentage of patients treated by general dentists by indication

Crownsand inlaysaligners are digital (intraoral scans), 50% of dentallabs use CADCAM and nearly all larger labs accept
digital scans from dentists. More than 80% oflarger labs have a complete CADCAM system
including scanner, milling system, and sintering
furnace9 because they have the necessary financial
resources and high throughput. This is why we areconstantly developing our range and offer an integrated, open architecture portfolio with leading
scanning and milling technology and 3D-printing.
All are supported by cutting-edge software andvalidated workflows that cover the tooth-replacement and orthodontic spectrum.

According to conservative estimates, 50–60% of all
patients with misaligned teeth could theoreticallybe treated with clear aligner solutions, indicating
the significant potential of this market.

Periodontitis

Straumann Group

2020 Annual Report

Surveys show that patients are increasingly willing to invest
in treatments that not only restore function, but also improveappearance.

This segment is expanding due to the increase inlocal laboratories offering CADCAM services andthe growing popularity of individualized prosthetics, which have esthetic and clinical advantages
over traditional pre-fabricated abutments and custom castings. Another driver is the popularity of
cost-effective titanium-base implant abutments,
like Straumann’s Variobase, which allow customers
to produce their own prosthetics through an open
software platform, while still ensuring an originalon-original interface between the implant and theabutment.

DYNAMIC CLEAR ALIGNER MARKET
Occlusal misalignment, functional disabilities anddesire for esthetics are reasons why patients seek
orthodontic treatment. Approximately two of
every three adults in the US have noticeable incisor
irregularities and about 20% of the US population
have deviations from the ideal bite relationship10.
Despite the high need for treatment, only four million people in the US are estimated to wear orthodontic braces and only 1–1.5 million clear aligner
cases started in 2020. Elsewhere, penetration rates
for clear aligners are considerably lower.

Cariesand decay

CUSTOM PROSTHETICS
The market for custom-made prosthetics is estimated at almost CHF 4 billion8 annually and comprises crowns, inlays, onlays, bars and bridges
designed by computer and manufactured with amilling machine or an additive process (e.g.
3D-printing). Tooth-borne restorations, such as­single crowns, inlays and small bridges, account for
the largest part. While CADCAM production is
growing strongly, most crowns and bridges are still
porcelain-fused-to-metal or press ceramics made ina time-consuming manual process. Market
research9 indicates that general dentists usuallyobtain CADCAM crowns and bridges from local
labs, and most use models or impressions to order
the restorations.

33

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Markets

Straumann Group

2020 Annual Report

We entered this attractive field in 2017 by acquiring ClearCorrect. We also acquired 38% of Geniova,
a small entrepreneurial company in Spain, whichhas pioneered an innovative hybrid approach combining the advantages of clear aligners with thebenefits of conventional braces and brackets. Partnerships and acquisitions remain a key to building
our orthodontics franchise: in 2018, we invested inand partnered with Dental Monitoring, a pioneerof remote monitoring systems. In 2019, we formeda partnership with ZhengLi Technology to enter the
Chinese clear aligner market. In 2020, we invested
in DrSmile, an entrepreneurial company that complements our clear aligner business with valuable
direct-to-consumer marketing expertise.

Largepotential in markets worth more than CHF 12 billion
5

Notes and references

0

3

2

Market opportunity

Clearaligners

1

Custom-madeprosthetics

Industry reports, Straumann estimates.
The implant dentistry market segment includes implant fixtures,
abutments, temporary abutments, healing screws, copings and related
instruments.
3 iData, Decision Resources Group and Straumann bottom-up estimatesin 70 countries.
4 American College of Prosthodontists.
5 Straumann proprietary survey.
6 Population reference bureau, Straumann data & estimates.
7 Decision Resources Group and Straumann bottom-up estimates in
70 countries.
8 Decision Resources Group, SmarTech publishing, Straumann­proprietary survey & estimates.
9 The Key Group.
10 Profitt et al. 1998; NHANES III.
11 Industry reports, Strauman bottom-up estimates in >40 countries.

4

CADCAMequipment1
2

in CHF billion

Biomaterials

Prior to COVID-19 the market was growing ataround 20%. In 2020, it was almost flat due to the
lockdown interruptions. Recovery in the second
half of the year was fast as practices re-opened
and teledentistry facilitated remote treatmentswith clear aligners. While subdued consumer confidence may inflict some short-term impacts, clearaligners offer significant potential as one of themost attractive areas in dentistry.

ADDRESSING MARKETS WORTH MORE
THAN CHF 12 BILLION
Having concentrated on premium parallel-walled
implants for many years, we have significantly
broadened our scope through internal development, expansion, acquisitions, investments andpartnerships, with the goal of offering complete
solutions in tooth replacement and esthetic­dentistry. As a result, our addressable market has
expanded significantly to more than CHF 12 billion(see chart on the right) and offers significant
growth opportunities.

Implant
dentistry

In 2020, the global market for clear aligners wasestimated to be worth approximately CHF 3.5 billion11. It represents one of the most attractive
areas in dentistry by virtue of its dynamic growth
and the significant advantages of clear aligners
over conventional wires and brackets, including
appearance, patient compliance, cleaning, teeth
stains and convenience. In addition, researchshows a strong preference for clear aligners among
adult patients. Growing awareness of these advantages among dentists and patients (through directto-consumer marketing activities) as well as
broader availability (through general dentists) willlead to higher penetration rates.

Straumann market share

Note: Implant dentistry and custom-made prosthetics markets bothinclude CADCAM abutments.

34

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

BUSINESS PERFORMANCEGroup

Straumann Group

2020 Annual Report

SOLID RESULTS ACHIEVED DESPITECHALLENGING YEAR
Considering the significant disruptions caused by
the pandemic in 2020 and taking the record-level
results from 2019 as a comparison, the StraumannGroup achieved solid results in 2020. In organic
terms revenue dipped 6%. Strong currency headwind widened the gap to 11% in Swiss francs asrevenue reached CHF 1.4 billion. After a promising
start, business came to a halt in the second quarteras dental practices closed. As lockdown eased,
growth returned in the second half, lifted by pentup demand but not enough to make up completely
for the earlier shortfall. By year-end, organic
growth had returned to all regions.
BUSINESS PERFORMANCE
By business, the Group’s non-premium-implantfranchise as well as its digital and orthodontics
businesses all achieved full-year organic growth,
the latter reporting the highest full-year increase,
lifted by DrSmile in Germany. Premium implant
solutions, the largest revenue driver, were constrained by the pandemic’s impact on affluent markets, which are predominantly premium. Notwithstanding, sales of new products like Straumann’s
innovative BLX implant were strong and led toshare gains, for example in the immediacy segment. Of the Group’s challenger brands, Neodent
sales increased year on year, while Medentika grewthrough the crisis to post strong full-year results.
Both brands performed well in emerging markets
and, together with digital equipment, played an

important part in the continuing success of theGroup’s DSO business, which also reported fullyear growth.

Key performance figures

ACQUISITIONS TO EXPAND REACH AND SECURETECHNOLOGY AND SERVICESThe Group completed two business combinationsin 2020 (see p. 37 and Note 2.1 on p. 140). To complement its orthodontics business, it acquired a
75% stake in DrSmile, a specialist in consumer marketing of clear aligner solutions, and it acquired thebusiness of Artis Bio Tech, a distributor of dental
implant systems in Romania. Collectively, these
combinations contributed 170 base points to the
topline result. The Group also invested in­Promaton, a company working on artificial intelligence applications to support diagnosis and­treatment planning.
OPERATIONS AND FINANCES
To facilitate a like-for-like comparison, The Group
presents ‘core’ results in addition to the results
reported under IFRS. In 2020, the following effects(after tax) were defined as non-core items:• the amortization of acquisition-related intangible
assets amounting to CHF 9 million

Organic revenue growth• charges totaling CHF 150 million resulting from
impairments, triggered by COVID-19, of financial
and non-financial assets, including Createch,­Dental Wings and Equinox• the total non-recurring restructuring costs related
to resizing the global workforce, which amounted
to CHF 15 million

2020

2019

Core 1

Core 1

Revenue (CHF m)

1426

1596

Gross profit margin (%)

72.8

75.6

EBITDA margin (%)

29.5

31.6

EBIT margin (%)

23.4

27.1

Net profit margin (%)

18.3

21.2

1	To facilitate a like-for-like comparison, the Group presents ‘core’ resultsin addition to the results reported under IFRS – please see ‘Operations
and Finances’ section in the text to the left.

5-year average: 14%
20%
15%
10%
5%
0%
–5%
2016

2017

2018

2019

2020

35

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance• pension plan amendment gains of CHF 5 million
to the core result.
A reconciliation table is shown on p. 126 of the
Financial Report.

Straumann Group

2020 Annual Report

CORE GROSS PROFIT SQUEEZED BY VOLUMES BUT­M ARGIN PRESERVED ABOVE 70%
In response to the global pandemic and the new
economic reality, the Group quickly adjusted capacity, reduced operating expenses and postponed
investments, helping to soften the impact of thesignificant decline in revenue on profitability. Grossprofit was CHF 169 million less than in the prioryear and the corresponding margin dropped
280bps to 73%. Excluding the currency impact themargin decline was approximately 190bps.
CORE EBITDA MARGIN UNDERPINNED AT 30%
Cost reductions in other areas also helped to cushion impact on earnings. Distribution expenses,
which comprise sales-force salaries, commissions,and logistics costs, were reduced by CHF 38 million
to CHF 283 million, while administrative expenses,
which include research, development, marketingand general overhead costs, were reduced by
CHF 20 million to CHF 441 million. The combinationof these efforts helped to underpin the operating
result at CHF 333 million (CHF 421 million before
interest, tax, depreciation and amortization).
The cost savings have not compromised theGroup’s ability to innovate, manufacture, supply
and sell winning solutions. The EBITDA and EBIT
margins contracted 210bps and 370bps to 30% and
23% respectively. Approximately 160bps of thecontractions were due to currency headwind.

CORE NET PROFIT MARGIN REACHES 18%
Net financial expenses amounted to CHF 31 million, mainly reflecting currency hedging losses,
interest payments and interests on lease liabilities.
With the share of result of associates almost in linewith the prior year, and after income taxes of
CHF 40 million, net profit decreased 23% to
CHF 261 million, resulting in a margin of 18%. Basicearnings per share dropped 24% to CHF 16.20.
Including purchase price allocation amortization,
impairments, restructuring charges, pension planamendment gains and their collective impact on
income taxes, the reported net result was
CHF 92 million.

The cost savings have notcompromised the Group’s ability
to innovate, manufacture, supply
and sell winning solutions.
FREE CASH FLOW REACHES CHF 295 MILLION
Cash flow from operations amounted to
CHF 377 million. The combination of reduced
receivables, fairly stable payables and increased
inventories led to a net working capital decrease of
CHF 39 million. In consolidated reporting currency
terms, days of sales outstanding decreased by 10
to 47, and days of supplies decreased by 15 to 160.
Net interest payments including those on lease­liabilities amounted to CHF 12 million.

As of Q2, several projects were interrupted/postponed, reducing capital expenditure by CHF 68 million compared with the prior year. With the Group’s
production expansion and strategic acquisition initiatives continuing, total cash outflow for investment activities amounted to CHF 145 million, 39%less than in 2019.
To refinance a maturing bond and to secure liquidity for general corporate purposes through theperiod of increasing uncertainty, the Group issued
two straight bonds, the first in April, amounting to
CHF 280 million and the second in June, amounting
to CHF 200 million, in addition to obtaining committed credit lines.
The cash position on 31 December 2020 was strong
at CHF 632 million, in contrast to a cash position of
CHF 260 million at the beginning of the year. The
Group’s balance sheet amounted to CHF 2.5 billion
versus CHF 2.4 billion at the end of 2019.
STABLE DIVIDEND PROPOSED
Based on the results in 2020, the Board of Directors
proposes a stable dividend of CHF 5.75 per share,payable on 15 April 2021, and intends to continue
increasing the dividend in the future, subject tofurther good performance.

36

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

SUMMARY OF MAIN INVESTMENTS
INVESTMENTS IN ESTHETIC DENTISTRY
We obtained a majority stake in DrSmile, one of
the fastest-growing providers of orthodontic­treatment solutions in Europe. DrSmile combines
direct-to-consumer (DTC) marketing expertise with
­doctor-led treatment and complements our existing clear aligner business. The investment to obtaina stake of approximately 75% amounted to
CHF 37 million. Further payments are expected tofollow in the coming years.

Straumann Group

2020 Annual Report

INVESTMENTS IN GEOGRAPHIC EXPANSIONIn Romania, we acquired the business of Artis Bio
Tech, a well-established national distributor of
dental implant systems. The business significantly
strengthens our local subsidiary, which opened in
April 2020, increasing proximity to existing­customers and creating opportunities to convert
new customers from competitor systems to­Straumann Group brands. The investment
amounted to CHF 5 million and further payments
are expected to f­ ollow in the coming years.
INVESTMENTS IN TECHNOLOGY PARTNERS
In the first half of 2020, we invested in Promaton,a start-up software company working on artificial
intelligence applications to support diagnosis andtreatment planning. The investment to obtain aminority stake amounted to CHF 3 million.
Further payments are expected to follow in the
coming years.

INVESTMENTS IN INFRASTRUCTURE
Despite the pandemic, we invested CHF 56 million
in land, buildings and machinery, mainly toincrease production capacity in Switzerland(­Straumann plant expansion), Germany (newMedentika plant and Clear Correct clear aligner
production), Brazil (various projects) and the US(various projects). Together with investments in
IT hard and software and in other fixed assets,­capital expenditures reached CHF 82 million.
OTHER INVESTMENTS
Information on investments in distribution(­including selling activities, research and development) as well as tangible and intangible assets,are presented in the financial report. Investmentsin people are covered in the sections on Employees
and Compensation (see p. 65 ff.).

Operating and net profit
in CHF million
500

400

300

200

100

0

20161

20171

20182

20192

20202

2019

2020

Operating profit (EBIT)
Net profit
1 Excluding exceptionals
2 CoreBusiness investments in 2020
EntityLocation

Stake

Rationale

Artis Bio Tech

Romania100%

Take over distributor
in market where 120K
implants are placed
per year

DrSmileGermany

74.9%

OxiMaTec(agreement signed
2020, ­completion
2023)

Germany 100% in
2023

Promaton

Netherlands

Enter fast-growing
DTC segment for­doctor-led clearaligner treatment
Secure access toceramics expertiseand supply

49.1% Gain expertise in artificial intelligence
applications, support
treatment planning

Cash flow and investments
in CHF million
400
350
300
250
200
150
100
50
0

2016

2017

2018

Operating cash flow
Capital expenditure
Acquisitions & participations

37

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

BUSINESS PERFORMANCE
Regions
The dental markets contracted across all regions in2020 due to the corona virus lock down. The timing
and extent of the impact varied from region toregion and country to country. All our regions suffered most in the second quarter, except for APAC,
where the impact came earlier. APAC was also thefirst to rebound and consequently led our performance, posting organic revenue just short of theprior year. The other regions picked up in the second
half but were not able to reach the record revenue
levels achieved in 2019. EMEA continued to be thelargest contributor, lifted by emerging markets.

Regional sales performance by quarterin CHF million
200

150

Regional sales performance by quarter

100

in CHF million

Europe, Middle East & Africa

2020 Annual Report

Q3

Q4

Total 2020

Total 2019

162.2

105.7

148.2

198.9

614.9

670.2

+0.9

−39.3

+3.9

+3.2

−8.3

14.0

Change (organic  1) in %

+0.1

−38.0

+7.4

+5.9

−6.6

13.4

115.7

67.7

118.1

130.6

432.0

481.6

Change in CHF %

+4.9

−43.7

+0.9

−2.7

−10.3

21.7

Change (organic   1) in %

+7.7

−41.6

+8.8

+5.3

−5.2

19.8

Asia/PacificStraumann Group

Q2

Change in CHF %North America

53.5

63.0

80.0

92.1

288.6

304.5

Change in CHF %

−25.5

−16.4

+4.9

+13.6

−5.2

21.1

Change (organic   1) in %

−22.1

−11.7

+11.0

+17.9

−0.5

21.5

26.0

11.4

24.1

28.8

90.3

139.9

Change in CHF %

−12

−70.0

−31.4

−22.5

−35.4

9.0

Change (organic   ) in %

+7.2

−60.3

−4.5

+2.9

−15

16.8

Latin America

1

TOTAL

357.3

247.7

370.4

450.4

1 425.9

1 596.2

Change in CHF %

−4.0

−39.2

−0.2

+1.2

−10.7

17.1

Change (local currencies) in %

+1.9

−34.5

+8.3

+8.9

−3.9

19.6

Change (organic   ) in %

−1.4

−35.9

+7.7

+7.7

−5.6

17.1

1

1

Q1

Excluding the effects of currencies and acquisitions (mainly Anthogyr and DrSmile).

50

0
EMEA

Q1

Q2
NAM

Q3
APAC

Q4
LATAM

38

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

Europe, Middle East & Africa
Outperforming and gaining share in a declining market
Our largest region reported a single digit decline inorganic revenue reflecting the impact of the­pandemic throughout the region especially in big
markets like Italy, Spain, France and the UK. In thelargest market, Germany, clinics remained partiallyopen throughout the crisis, helping to stabilize
sales and resulting in full-year growth.

Straumann Group

2020 Annual Report

Following a good start to the year, revenue declined
rapidly towards the end of Q1 and did not return to
growth until late in Q2. Treatment backlogs andpent-up demand fuelled the improvement and mostmajor markets had returned to growth in Q4,
although they continued to struggle. Emerging­markets like Russia and Turkey performed strongly
throughout the year. An additional contribution tosales came from Romania, where we established ourown subsidiary and subsequently acquired Atios Bio
Tec, a strategically important distribution company.
Within the implant market, the contraction was
more evident in the premium segment although
the premium immediacy sub-segment proved
more resilient, driven by Straumann’s BLT and BLX
implants. Our non-premium business benefitted
from the sustained growth of Medentika, the continuing rollout of Neodent and the launch of NUVO
in initial markets.

Change organic−7%

As digital transformation accelerated globally,
sales of digital equipment – mainly intraoral scanners – increased in the region, enabling our digitalbusiness to post growth for the full year.

EMEA region

Despite disruptions to the rollout program, clearaligner sales were also promising, boosted by theacquisition of DrSmile, a fast-growing provider ofclinician-led aligner treatment driven throughdirect-to-consumer channels. We also invested inclear aligner production, opening a European­manufacturing center in Germany.
The aforementioned activities reflect our strategy
to penetrate unexploited markets and segments.
Apart from rollouts, online marketing efforts andproduction capabilities, we continued to invest in
preparing for the new European Regulation for
Medical Devices and obtained MDR certificates forthe full range of Institut Straumann’s dentalrelated products.

Change in CHF−8%

Revenue in CHF

615m

EMEA Contribution to Group% of Group revenue% of Group revenue
decrease

43%
51%

Largest regional markets
1. Germany
2. Spain
3. France

39

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

North America
Further customer gains

Straumann Group

2020 Annual Report

North America achieved 90% of the exceptional
revenue level reported in the prior year. 2020
began with double-digit growth through to midMarch, driven by Straumann premium implants,
Neodent and the digital business. Lockdown completely interrupted the trend but business began torecover in June as the situation eased and practices
returned to business. Pent-up demand for implant
and restorative solutions brought revenue back to
growth in Q3, which continued in Q4.
Excluding the second quarter, the premium andnon-premium implant franchises both grew, thelatter outpacing the former, driven mainly by­Neodent and its popularity with dental service
organizations. Our challenger brands enabled us toconvert customers from competitors as did­Straumann BLX, which was in strong demand.
The new Zygomatic implant system (see p. 25),
which entered limited market release, will support
this trend. To penetrate the market at the lower
end of the price scale, we launched our new
implant brand, NUVO, in the US towards the endof the year.

ClearCorrect had to compete in a tough market
that is increasingly driven by direct-to-consumer
approaches. Although it achieved good full-year
growth it was still short of its pre-pandemic rate.
The introduction of our new high-performancematerial ClearQuartz (see p. 43) and the full integration with TRIOS intraoral scanners will support
sales growth going forward.
To make up for the cancellation of congresses andmeetings, we went online, attracting large audiences to our corporate forum, virtual booths andother events, including a three-week master classon immediacy and Straumann BLX, which drew7000 attendees.
Based on company sales reports and estimates webelieve that we became the dental implant market
leader in the US in 2020, a goal that we havesought for many years.

NAM Region

NAM contribution to Group% of Group revenue% of Group revenue
decrease

30%
28%

Our digital equipment sales were encouraging andgrew throughout the year, as dentists increasingly
adopt new technologies, especially intraoral scanning, but also milling equipment and 3D-printers.

Change organic−5%

Change in CHF−10%

Revenue in CHF

432m

Largest regional markets
1. USA
2. Canada

40

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

Asia / PacificLeading the rebound with multiple launches
APAC rebounded strongly in the second half of theyear after a difficult first half of declining revenue.
By year-end nearly all the main countries had
returned to solid growth, lifting full-year revenue
close to the prior year level.
Although China was the first country to be affectedby the virus, it recovered well and, despite theheavy impact, generated close to the record levelof revenue achieved in 2019. Australia, Japan, New
Zealand, Taiwan and Thailand all reported full-year
growth, albeit modest, while India and Korea­continued to recover.

Straumann Group

2020 Annual Report

Implant sales were driven by premium and nonpremium brands. The latter generate substantiallyless revenue but are growing faster, lifted by­Neodent, which gained ground in Australia, India,
Japan, Thailand and Vietnam. Sales of intraoral
scanners also increased significantly, especially
Carestream models, which Straumann distributes
in China.
Despite lockdowns and disruption, the region­successfully brought a number of exciting new­products and solutions to market. China launched­Straumann’s high strength material Roxolid in thepremium implant segment and introduced

Change organic−1%

Warantec and T Plus implants to strengthen our
foothold in the lower value segment. Japan,­Australia and New Zealand all launched ­Straumann’s
innovative BLX implant. ClearCorrect pilots began inseveral markets ahead of launches in the region in
2021. Preparations were also made to launch our
xenograft bone graft material in China.

APAC region

The launch of Neodent in India enabled us to provide high quality, cost-effective implant solutions
that offer simplicity, broad prosthetic options anddigital workflows. These advantages enabled us todiscontinue the Equinox brand.
Lockdown restrictions and the cancellation of key
events like the ITI World Symposium in Singapore
inspired the region to intensify its online activities
to attract, inform and educate customers. These
include virtual symposia (e.g. to launch Roxolid).
The success of our online outreach was also
reflected in growing digital equipment sales, especially in China, where demand for intraoral scanners and CADCAM solutions grew substantially.

Change in CHF−5%

Revenue in CHF

289m

APAC contribution to Group% of Group revenue% of Group revenue
decrease

20%2%Largest regional markets
1. China
2. Japan
3. Korea41

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

Latin America
Continuing to meet customer needs
The year started well in Latin America, but the
combined impact of COVID-19 and a very strong
negative currency impact cut revenue by 70% in
the second quarter. Brazil, which is by far the­largest market for esthetic dentistry in the region,
contracted as its major cities shut down. However,the Group’s 17 stores and distribution centersaround the country remained open, enabling customers to purchase and obtain products for treatments on the same day. This was a key advantagethat attracted customers who were unable toobtain supplies from other companies.

Education courses are a good source of revenue
that the region had to forego this year. On theother hand, our new implant brand NUVO wasintroduced at the large CIOSP trade fair andlaunched later in the year, targeting the lower
value segment.

Straumann Group

2020 Annual Report

Argentina and Chile shone with full-year growth,
but the other countries all posted double-digit
decreases despite significant recoveries and promising finishes to the year. In each of them we continued to win share by outperforming the market.

LATAM region

LATAM contribution to Group% of Group revenue% of Group revenue
decrease

6%
19%

Neodent was the main contributor to regionalsales, lifted by the rollout of ClearCorrect andStraumann’s competitively priced Virtuo Vivo intraoral scanners. Yller Biomateriais reported good
growth, reflecting the demand for 3D-printing­resins, which is expected to increase as this innovative technology is extended to producing aligners
and temporary restorations in future.

Change organic−15%

Change in CHF−35%

Revenue in CHF

90m

Largest regional markets
1. Brazil
2. Mexico
3. Colombia

42

43

FEATURE STORYTOGETHER STRONG
FOR ALIGNED TEETH#TogetherStrong#TogetherStrong is exemplified in the­strategic combination of ClearCorrect, ourbrand for clear aligners, and Bay Materials,
our center of excellence for the development
and manufacture of dental thermoplastics.
In August 2020, ClearCorrect launched clearaligners made from ClearQuartz, a new
multi-layer, state-of-the-art, high-performance material that was developed and is
supplied by Bay Materials.
ClearQuartz is designed to address customer
needs in a fast-growing global market, inwhich advanced multi-layer materials havebecome available delivering a new level of
performance and comfort for patients.
ClearCorrect’s thermoplastic products offer
high stress-retention properties, excellent
visual clarity, remarkable stain resistance, andlow insertion forces. Building on these­features and ClearCorrect’s 14 years of ortho­
dontic and manufacturing expertise, ClearQuartz is a huge step forward in terms of
comfort for patients and impressive toothmoving forces, in addition to a high, flat trimline, which improves the aligner’s retention.
It is proprietary to ClearCorrect and became
available in the US, South Africa and initial
APAC markets and Latin America in 2020,
with rollouts in Europe to follow pending­regulatory approvals.

Clear aligners offer significant
advantages including
appearance, patientcompliance, cleaning, stains
and convenience.

In 2020 Bay Materials obtained patents toprotect the innovative material to strengthen
our ­competitive position, protect our R&D­investment and help to prevent others from­copying the material.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performance

BUSINESS PERFORMANCE

Regional sales performance by year
in CHF million

Financials
2016

2017

2018

2019

2020

Net revenue

917.5

1 112.1

1 363.6

1 596.2

1 425.9

14.9

21.2

22.6

17.1

(10.7)

718.5

840.5

1 019.2

1 200.5

1 029.8­Margin in %Operating result before depreciation and a­ mortization (EBITDA)­Margin in %

75.6

74.7

75.2

72.2

323.5

395.0

480.6

406.0

28.3

29.1

29.0

30.1

28.5

­Growth in %

24.9

24.8

22.1

21.7

(15.5)

227.2

283.3

342.6

387.1

156.5

­Margin in %

24.8

25.5

25.1

24.3

11.0

­Growth in %

31.6

24.7

21.0

13.0

(59.6)

229.6

282.2

277.8

308.0

92.3

25.0

25.4

20.4

19.3

6.5
(70.0)­Margin in %­Growth in %2020 Annual Report

78.3
259.2

Operating profit (EBIT)

Net profit

Straumann Group

1200

221.1

22.9

(1.6)

10.9

Basic earnings per share (in CHF)

14.68

18.04

17.24

19.33

5.75

Value added/economic profit1

182.2

214.5

189.6

208.6

(30.6)­Change in value added

155.1

32.3

(24.8)

18.9(239.1)­Change in value added in %

572.5

17.7

(11.6)

10.0(114.7)­as a % of net revenue

19.9

19.3

13.9

13.1

(2.1)

Number of employees (year-end)

3 797

4 881

5 954

7 590

7 340

Number of employees (average)

3 615

4 305

5 580

6 837

7 409

254

258

244

233

192

Sales per employee (average) in CHF 1 000
1	Figures as reported in the financial reports.

1000

251.4

121.7

481.6

190.5

98.5

800

432.0

395.8

152.5
312.0

600

255.7

400
200
0

410.8

2016

670.2

588.0

488.0

2017

2018¹

Europe, Middle East & Africa
Asia/Pacific
1

90.3
288.6

1112.1917.5

1425.9

304.5

128.4

in CHF million

Gross profit

139.9

1363.61400

Five-year overview – operating performance­Growth in %1596.2

1600

2019

614.9

2020

North America
Latin America

Restated.

Five-year quarterly revenue growth (organic)
in %
30
20
10
0
−10
−20
−30
−40

2016

2017

2018

2019

2020

44

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Business performanceFive-year overview – financial performancein CHF million

2016

2017

2018

2019

2020

Cash and cash equivalents­164.0­281.8­278.7­260.2­632.2Net Cash (Net Debt)(36.9)

­23.2

­16.8

­20.2

­116.2

Net working capital (net of cash)­123.9­187.7­233.0­265.6­168.0

­13.5

­16.9

­17.3

­16.6

­11.8

­102.0­152.1­182.1­234.6­216.6­as a % of revenue
Inventories­Days of supplies
Trade receivables­Days of sales outstanding
Balance sheet total­Return on assets in % (ROA)
Equity

­165

­175

­160

­231.3­281.2­236.0

­55

­56

­56

­57

­47

1 089.9

1 697.0

1 864.6

2 390.0

2 548.6

­21.5

­20.3

­15.6

­13.6

­3.9

­633.7

1 077.0

1 204.3

1 367.2

1 209.9

­58.1

­63.5

­6 4.6

­57.2

­47.5

­Return on equity in % (ROE)

­37.1

­33.0

­24.4

­24.0

­7.7

­476.2­908.0

1 011.6

1 455.0

1 190.3­Return on capital employed in % (ROCE)
Cash generated from operating activities­as a % of revenue
Investments­as a % of revenue­55.5­4 0.9

­35.7

­28.4

­11.9

­184.7­217.3­277.1­378.5­376.6

­20.1

­19.5

­20.3

­23.7

­26.4

(87.9)(296.5)(188.2)(239.3)(140.4)

­9.6

­26.7

­13.8

­15.0

­9.8

­thereof capital expenditures(46.7)(74.4)(109.7)(149.9)(82.1)­thereof business combinations related(25.5)(178.8)(22.2)(77.1)(55.1)­thereof investments in associates(15.7)(43.3)(56.3)(12.3)(3.2)­138.7­144.7­169.4­229.6­295.2

­15.1

­13.0

­12.4

­14.4

­20.7

­65.1

­75.1

­83.1

­91.2

91.31

Free cash flow
­as a % of revenue

2020 Annual Report­174­191.9­Equity ratio in %Capital employed

Straumann Group

­171­148.9Dividend
Dividend per share (in CHF)

4.25

4.75

5.25

5.75

5.751

Pay-out ratio in % (core results)

­35.6

­32.4

­28.9

­27.1

35.5

1	To be proposed to the shareholder's AGM in 2021.

At CHF 295m, free cash flow
reached its highest level in
5 years.

45

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Share performance

SHARE PERFORMANCE
Strong recovery since March

Straumann Group

2020 Annual Report2020 was a very turbulent year for the financial
markets. With relatively low volatility at the beginning of the year, markets seemed to be continuing
their upward path of 2019. However, the outbreakof COVID-19 led to an unprecedented slump
between late February and March. Leading equity
markets suffered price corrections of more than
30%, while risk premiums rose significantly. After astrong response from global monetary and fiscal
policy makers, market conditions improved, leading
to a relatively stable recovery in the financial­markets. Positive news about the developmentof vaccines, as well as the outcome of the US­elections, further reduced uncertainty and­supported market valuations.
After a strong start to the year, the StraumannGroup’s results plummeted in Q2 due to the global
pandemic. Due to the high uncertainty, the Group
retracted its guidance – like many companies – andtook rapid initiatives to adjust its cost base, including resizing organizationally. Following a respite ininfections and a relaxation of lockdown measures,
revenue began to pick up around mid-year andcontinued to improve through the second half,
confirming that the business fundamentals areintact. The Group continued to watch for opportunities, made further strategic acquisitions, enteredpartnerships, launched innovations, andannounced key appointments as part of its leadership succession planning. These factors and its
above-market performance were all reflected in
the share price and market capitalization, whichrose to more than CHF 15 billion. Despite strong

distortions in the capital markets, the Group­successfully issued two new bonds, further­exemplifying the trust that it enjoys in the market.

Stock exchange information

The share continued to outperform the Swiss
equity market and rose 8.5% to CHF 1031.50 at
year-end, while the SMI and SMIM indices closed
the year up 3.3% and 0.8%, respectively. As a result,
Straumann was the second-best performing sharein the SMIM universe over the past five years.
In September, the Straumann share joined the
Swiss Leader Index, which comprises the largest
30 securities in the Swiss equity market.
With the gross dividend increasing 9.5% to
CHF 5.75 in 2020, pre-tax shareholder return after
dividend re-investment amounted to a gain of 9.4%
or CHF 88.97. This reflects the Group’s intention tohave a stable dividend that increases gradually
over time. The payout ratio of the dividend distributed in 2020 was 36%, which is higher than in previous years. After dropping below 20% in J­ anuary,
the one-year stock volatility climbed to 41% in Q4,
taking into consideration both the sharp correction
and fast recovery throughout the year. This volatility pattern was in line with the general market
trend. The average trading volume in 2020
increased from 41 400 to 68 200 shares per day,while the overall trading turnover rose by morethan 70%, reflecting a significant increase of stockmarket investor activity due to the pandemic.

Listing

SIX Swiss Exchange (STMN)

Bloomberg

STMN SW

Reuters

STMN.S

Investdata

STMN

Ex date13 April 2021

Payment date

15 April 2021

Security ID

001 228 007

ISIN

CH 0012 280 076

Share price data
in CHF

2020

2019

Value

Date

Value

Date

First trading day

961.8

3 Jan

592.00

3 Jan

Lowest1553.0019 Mar587.00

3 Jan

Highest1

1084.00

9 Nov

963.0027 DecLast trading day(tax value)1031.5030 Dec950.4030 DecAverage

892.40821.60Total shareholder
return, gross of tax

9.4%

54.8%

Share priceperformance

8.5%

53.8%

16408

15 091Market capitalization
at year end(CHF million)2
1
2

Value reflects daily closing price.
Treasury shares are excluded from calculation.

46

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Share performance

Share price development

Trading information
Sharesin thousands

Pricein CHF

1

1100

2

4

3

5

6

7

Share pricein CHF

Volatility
in %

1100

110

1000

100

900

90

800

80

700

70

600

60

500

50

400

40

300

30

200

20

1050
1000
950
900
850

100

800

900

750

800

700

700

650

600

600

500

550

400

500

300

450

200

400

100

350

0

J

F

M

¢ STMN share price ¢ SMIM index
1

A

M

J

J

A

S

O

N

D

¢ Volumes traded (RHS)

18 Feb 	2019 results: organic revenue climbs 17%,
core EBIT margin at 27.1%

5

9 Jul	Group announces acquisition of majority
stake in DrSmile

Straumann Group

2020 Annual Report

100

27 Mar	Placement of a CHF 280 million straight bond,mainly to refinance maturing bond

6

3

30 Apr	Q1 results: revenue drops 4%7

4

14 May	Group announces cost alignments with lower
revenues

2

13 Aug 	First-half revenue 22% less than in H1 2019,reaching trough in April

2016

2017

2018

2019

2020

10

At last day of trading (left scale)
Annualized volatility in % (right scale)

28 Oct	Q3 results: revenue drops 15% (YoY), organic
growth of 8% in Q3

Click here for detailed
5-year comparison .

47

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Share performance

MAIN MEDIA RELEASES IN 2020
20 January	Camila Finzi appointed Head of Straumann’s fast-growing
orthodontics business and Member of the Executive
Management
3 February	Mark Johnson joins Straumann’s Executive Management as
Head of Research, Development & O­ perations
18 February	2019 FY Report – Straumann finishes 2019 with solid Q4, as­full-year organic revenue climbs 17% and core EBIT margin
expands to 27.1%
27 March 	Straumann Holding AG successfully completes placement of a
CHF 280m bond
7 April 	Shareholders approve all proposals at AGM
30 April 	Q1 report – Straumann Group responds quickly to COVID-19
and looks beyond
6 May 	A new Straumann zygomatic implant system for patients withsevere jawbone loss

2020 Annual Report

10 June 	Straumann Holding AG raises a ­further CHF 200 million
through the successful placement of a new five-year
straight bond

Straumann Group

14 May 	Straumann Group acts rapidly to align costs with lower­revenues

13 August 	H1 report – Straumann Group sees sales pick up at end of
tough first half, in which COVID-19 reduces revenue by 22% to
CHF 605 million

9 July 	Straumann Group invests in DrSmile, a leading provider of­clinician-led clear aligner treatment solutions in Germany

20 August 	ClearCorrect launches new, state-of-the-art, high-performance clear aligner material
21 October 	Seamless connectivity between 3Shape TRIOS intraoral­scanners and Straumann’s esthetic dental solutions
28 October 	9M report – Straumann Group posts organic growth of 8% inthird quarter8 December 	Straumann announces leadership appointments to support
growth and accelerate digital transformation
15 December 	Straumann Group appoints Rahma Samow to head­fast-growing business with Dental Service Organizations
21 December	Straumann Group to distribute Medit intraoral scanners­globally48

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Risk management

RISK MANAGEMENT
Integrated control framework for sustainability
The Straumann Group fosters a culture of creating
opportunities and entrepreneurism, which are balanced by risk management. We are committed to
implementing appropriate controls, processes andstrategies to identify, assess and manage risks
associated with our activities in order to prevent or
minimize the impact of unexpected events on ourbusiness and our ability to create value.

Straumann Group

2020 Annual ReportRESPONSIBILITIES AND ORGANIZATIONThe Straumann Group applies a globally standardized process for identifying and managing possible
developments within and outside the Group that
could jeopardize its sustained growth, profitability
and objectives. Risk monitoring and control aremanagement objectives. The Group’s Chief Financial Officer (CFO) is also the Chief Risk Officer (CRO)and is responsible for risk management.
Our risk assessment and management are embedded in a comprehensive internal control framework, which we address through a holistic, disciplined and deliberate approach. It matches that of
the COSO (Committee of Sponsoring Organizationsof the Treadway Commission), which is one of themost widely used.
For identified risks that arise from accounting andfinancial reporting, relevant control measures aredefined throughout our Internal Control System(ICS) framework. Various tools and aids are used toassess and manage risks. For instance, foreignexchange risks are managed with an SAP Treasury

tool, while external consultants are used on a­regular basis to assess insurance coverage risks.
RISK REPORTING
We produce a comprehensive corporate risk assessment report annually (or ad hoc if necessary),
which serves as a working document for the coming year and includes key risks that are critical for
the Group’s business. A specific scenario is developed for each risk topic, including existing and newmeasures and controls. The risks are ranked andprioritized. Action plans are defined and the implementation of measures to reduce risk is monitored.
The significance of a risk scenario is estimated interms of EBIT cumulated over three years. Certain
risks are assessed according to qualitative criteria,
e.g. risks to the Group’s reputation. The reportingof key risks is based on fixed value limits. Pressing
risks that emerge very rapidly are discussed by the
Board at short notice.
INTERNAL AUDITThe tasks of Internal Audit are:• to provide independent assurance to the Board of
Directors that key risks of the organization are
under control• to support Management in ensuring compliance,
operational efficiency and control effectivenessacross the Group.

Risk management approach
Straumann’s risk assessment takes into account:• Operational risks• Strategic risks• Compliance-related risks• Financial market risks• Other internal risk factors• Other external risk factors

Corporate risk assessment report
The report covers the following topics:• Risk description• Assessment of possible damage• Occurrence probability• Risk monitoring and counteracting measures

Risk assessment report process
Step

Execution

Preparation

Chief Risk Officer

Discussion

Executive Management Board

Risk assessment and discussion
based on report

Audit & Risk Committee withChief Risk Officer and Senior
Management

Key findings presented to Board Chief Risk Officer

49

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Risk management

In a consulting role, its main tasks are:• to assess internal processes and controls• to propose recommendations and improvements.
The objective is to safeguard the Group’s tangible
and intangible assets and to evaluate the effectiveness of its risk management and governanceprocesses.

Straumann Group

2020 Annual Report

Since 2017, KPMG has been mandated with theStraumann Group’s Internal Audit function (seep. 92), reporting to the Board of Directors with the
CFO/CRO as the administrative contact person.
RISK ASSESSMENT
STRATEGIC RISKMARKET ENVIRONMENTThe Straumann Group is active in specialty segments of the dental industry. Based on the aging
population, the rising number of professionals
trained, and increasing awareness, there are no­discernible reasons why these segments should
not continue to offer attractive growth prospects
in the long term (see p. 29 ff.). However, economic
uncertainties, due for example to the COVID-19
pandemic, as well as political developments inrecent years might continue for some time andaffect the prospects of market growth.
Our future revenues depend on market reach andexpansion as well as on our ability to defend andincrease our business with existing customers, toenlarge our customer base, to develop innovative
solutions that meet customers’ needs and bringthem to market in a timely manner.
New market entrants, disruptive business models
and price pressure from discounters pose a potential threat to established brands (see charts on theright). We conduct analyses of competitors basedon our own and external market intelligence tocounteract such risks and to evaluate our opportunities. Examples of managing and addressing thisrisk in 2020 are:• the continued rollout of our immediacy solutions
including the Straumann BLX implant system andthe Straumann Zygomatic Implant System• the continued penetration of the non-premium
segment with our existing brands and further
additions (e.g. NUVO)• investment in the direct to consumer to clientmodel and the continued expansion into orthodontics (e.g. through our acquisition of DrSmile)• investments in artificial intelligence in dentistry(e.g. in Promaton)

Share of implant volumes

2012

2020

2012

2020

Emerging markets (EM)Western Europe
Other growth markets in developed countries
Emerging markets (EM)Western Europe
Other growth markets in developed countries

Product portfolio break-down (in value)• investments in production centers on three­continents (see p. 72 ff.).
OPERATIONAL RISKLEGAL RISKS
We operate in a competitive market, in which legal
compliance, agreements and intellectual property
rights are of significant importance. At the
moment, the Group is not involved in any major
litigations.
CYBER SECURITY RISK
Reliable, correct and safe handling of information
is essential to our business. Risk and security­management are therefore an integral part of theGroup’s IT strategy. The main objectives are:• to achieve business goals while reducing IT risks
through security measures, controls and by thecreation of security awareness among employees
and management

2012

2020

2012

2020

Premium implant solutions
Non-premium implant solutions

New or adjacent products

Premium implant solutions
New or adjacent products
Non-premium
implant
solutions
Having been an exclusively premium brand Straumann entered the value
implant segment in 2012 by investing in Neodent. This reduced our­exposure to lower price competition and to economic recession, whencustomers tend to move to lower-price alternatives. Today the Group’s
product range covers all price levels. Similarly, our geographic footprint
has spread significantly making us less dependent on a small number ofkey markets and regions.

50

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Risk management

Straumann Group

2020 Annual Report

The Group’s IT risk and security management
framework is derived from widely used industry
standards, such as the ISO/IEC 27000 series, GMP
and COBIT, to manage cyber and IT security risks,
threats and controls. Ethical, legal, economic andsocial principles are taken into consideration.
The Group’s IT Risk and Security Management
Committee approves and adopts the information
security strategy as well as essential business-­
critical implementations. The Committee meetsregularly and includes the CFO/CRO, the Chief
Information & Data Officer, the Head of Corporate
IT Business Applications (ITBA), the Head of­Corporate Information and Communication­Technologies (ICT), the Data Protection Officer(Corporate Legal Services) as well as the Headof IT Risk & Security Management, who is­responsible for:• mitigating IT risks (including data loss and­corruption)• verifying the effectiveness and efficiency of IT
security controls and hardening IT asset security• improving IT security awareness for all employees• maintaining security policies, procedures and­supporting standards in alignment with (core)business processes• establishing IT security key performance­indicators and reporting structures.
MANUFACTURING AND SUPPLIER RISKThe Group has spread its manufacturing risk by
establishing production centers for key products at
different locations around the globe. The ongoing
expansion of Straumann’s and Neodent’s production facilities as well as the establishment of­additional production centers for Medentika andClearCorrect help to mitigate this risk.
With regard to suppliers, we pursue a multiple
source strategy for key materials and components.
For example, for key raw materials such as­titanium, agreements are maintained at the Grouplevel to assure inventories and supply for all brands
and franchises globally.
ETHICAL SUPPLY CHAIN
Our Straumann Group Code of Conduct for external business partners (ExBP CoC) refers to fair andsafe working conditions, human rights protection,business ethics, legal compliance, safeguarding­privacy and environmental protection in the supply
chain. It was updated in 2020 and our major ExBPs

Medentika’s new factory in Germany, which opened in 2020, is an­example of how the Group has spread its manufacturing risk.

Challenger• evaluating IT service continuity plans

Eco
Challenger

The Group has spread its
manufacturing risk by
establishing production centersfor key products aroundthe globe.

Straumann Group implant brand map, showing the different pricelevels that our various brands address

PREMIUM• to ensure the availability of IT services (applications and systems) as required by business­processes and stakeholders.

• assessing IT security threats and their business
value

CHALLENGER• to safeguard data and to protect and guarantee
the integrity of the Group’s digital assets andinfrastructure around the world

51

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Risk management

are required to sign it periodically as written­confirmation of their commitment to abide byits provisions.

Straumann Group

2020 Annual Report

PRODUCT RISK AND TREATMENT OUTCOME
We seek to minimize product risks and ensure
product integrity in the interest of patient healthand safety by using state-of-the-art quality management systems such as ISO13485 (see list of­certified production sites on p. 73) and techniques
for product risk management. We also conduct
long-term product surveillance. These processes
are frequently reviewed by regulatory agencies toconfirm that internationally recognized standards
are met. Furthermore, we conduct pre-clinical andclinical trials, followed by controlled, selective
introductions where appropriate. We also offer acomprehensive range of educational courses,
at all levels and in all countries where our products
are sold.

We seek to minimize productrisk and ensure productintegrity in the interest ofpatient health and safety.

KEY FINANCIAL RISK (see also Financial Report)
LIQUIDITY RISK
Liquidity risk refers to the possible inability to meetshort-term debt obligations due to the lack of­liquid assets. The Group closely monitors its liquidity risk through prudent asset and liability management. This includes a recurring liquidity planningapproach throughout the Group. The Group’s
objective is to maintain an adequate funding­structure by using bank overdrafts, bank loans,bonds and finance leases. In accordance with thepolicy, Corporate Treasury maintains a permanently accessible cash stock as well as flexible
short-term funding possibility through committed
and uncommitted credit lines, involving a prospective approach.
FOREIGN CURRENCY RISK
Foreign exchange risk arises when future transactions or recognized assets or liabilities are denominated in a currency other than the entity’s­functional one. As the majority of the Group’s­business is international and since the Group’s
financial statements are prepared in Swiss francs,
fluctuations in exchange rates affect both theGroup’s operating results and the reported valuesof the assets and liabilities. The Group is primarily
exposed to the euro, the US dollar, the Brazilianreal, the Chinese renminbi and the Japanese yen.
Beside general efforts to reduce currency exposures naturally, the Group’s foreign currency risk
management policy aims to concentrate exposurescentrally and subsequently manage them througha selective hedging approach. Speculative trading
is forbidden. The Group CEO continuously reviews
and approves the policy for managing these risks,
and the Audit & Risk Committee is informed about
all changes.

Group currency breakdown & gross transactional booked
exposure (TBE at year-end)
in %

Sales

Cost

TBE

CHF
110
EUR

5

16

n/a

28

27

−65

USD/CAD/AUD

32

34

61

100
BRL

5

7

−5

CNY

11

4

28

JPY
90
Others

6

2

20

13

10

61

80

70
2018
EUR/CHF

USD/CHF

CNY/CHF

BRL/CHF

Currency chart (USD, EUR, CNY, BRL, JPY)
110

100

90

80

70

60
2019
EUR/CHF

USD/CHF

2020
CNY/CHF

BRL/CHF

JPY/CHF

52

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Risk management

The Group’s gross transactional booked exposure
at year-end is presented in the table on p. 52.
CREDIT RISK
Credit risk refers to the risk that counterparties will
not meet their obligations, leading to a financial
loss for the creditor. The Group is exposed to credit
risk from its operating activities, primarily tradereceivables and loan notes, as well as financing
activities, primarily financial instruments such as
foreign exchange derivatives and cash deposits
with financial institutions. Exposure to these isclosely monitored and kept within predeterminedparameters.
Further information on financial risk management
is provided in Note 9.2 (see p. 167 ff. of the consolidated financial statements).

Straumann Group

2020 Annual Report

MISCELLANEOUS BUSINESS RISKSThe Group covers its inherent key business risks inthe same way it covers product or employer liability risks and property loss through corresponding
insurance policies held with reputable insurancecompanies.
PENSION LIABILITY RISKSThe Group offers its staff competitive pensions.
The pension funds are managed locally andinvested through independent financial institutions. The investment strategy of the Swiss pension fund, which represents the largest pension
plan of the Group, is determined by the Group’s
Pension Fund Commission and executed by its
Investment Committee. The pension funds publish
regular reports for all members.

COMPLIANCE RISK
It is essential to ensure that the company and its
employees conduct business in a legal, ethical andresponsible manner. Straumann has a dedicatedglobal compliance function. Corporate standards
are in place for key business compliance risks – e.g.
bribery/improper advantages and unlawful promotion (see table on p. 54).

Dedicated organization for business compliance Group-wide

Compliance

APAC/MEA

Straumann is a member of Swiss Medtech and iscommitted to comply with its code of ethics, whichaims to protect the integrity of all interactions
between member companies and healthcare­professionals/organizations. In accordance with
Swiss Medtech’s rules on transparency, Institut­Straumann AG discloses educational grants tothird-party events as well as other forms of educational support, such as fellowships, scholarships
and support for awareness campaigns.

Group
ComplianceManager

Regional
Regional
Regional
RegionalGen. Counsel Gen. Counsel Gen. Counsel Gen. Counsel

To strengthen our prevention efforts and to­promote compliant behavior, we expanded our
local training activities including refresher sessions
on our Code of Conduct, legal basics, prevention ofbribery and prevention of unlawful promotion. In
addition, e-training content was produced for 10
countries, adapted to local laws and regulations.
Following the global rollout of our revised Group
Code of Conduct in 16 languages in 2019, weestablished a multilingual compliance hotline,
which is operated by a third-party provider. Openround the clock it allows employees worldwide toraise compliance concerns in anonymity. Codeinfringements are investigated and appropriate
measures taken. In 2020, six Code of Conduct­violations were confirmed and appropriate corrective actions taken, including four dismissals.

Group Legal, Compliance & IP Department
Chief Legal Officer
Chief Compliance Officer

LegalCounselEuropeSen. LegalCounselNAM

LegalCounsel

LATAM

IP Counsel &Compliance

Legal Counsel; Sunshine
Data privacy Act reporting(GDPR)
spec.

Dedicatedcompliance
personnel:-China-Japan-South Korea

Dedicatedcompliance
personnel:-Germany-France

Dedicatedcompliance
personnel:-Brazil

It is essential to ensure that thecompany and its employees
conduct business in a legal,
ethical and responsible manner.

53

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Risk management

LEGAL COMPLIANCE
We manage and ensure compliance with laws andregulations through internal policies, processes
and trainings, and by monitoring legal and regulatory developments throughout the Group. Our
compliance management covers anti-corruption,
data protection and privacy, anti-trust and insider
trading as well as finance legislation. It is set up to
be fully compliant with Sunshine legislations inseveral countries.
REGULATORY AND QUALITY COMPLIANCE
Medical device companies face growing scrutiny
from regulators around the world as well as
increasing requirements for documented evidence
in order to demonstrate compliance. To ensure we
continue to meet regulatory compliance standards,
we have a qualified team of experts in regulatoryand quality assurance.

Straumann Group

2020 Annual Report

Focused quality objectives and key performanceindicators together with comprehensive audit programs, both internal and for suppliers, are used toassure compliance and to identify opportunities for
improvement. The Group also has an ongoingtraining program to ensure continuity in compliance with new and existing standards andregulations.
In 2020, local authorities inspected StraumannGroup subsidiaries with regard to storage and distribution of medical devices with no major findings. Our Group design centers and manufacturing
facilities passed all Notified Body audits, which arerequired to maintain the certification of quality
and environmental management systems. The
Group’s global regulatory team coordinates andsupports all our brands in the area of international
quality compliance and regulatory affairs.

We obtained a large number of new registrations
despite significant hurdles imposed by COVID-19,
for example the closure of government offices
and notified bodies, absence of officials due to­illness, etc.
Some of our design and manufacturing sites use
the Medical Device Single Audit Program (MDSAP),
a global approach to auditing and monitoring the
manufacture of medical devices. This facilitatescompliance assessments internationally. The
MDSAP allows a recognized auditing organization
to conduct a single audit of a manufacturer thatsatisfies the relevant requirements of the regulatory authorities in the program, namely:• Therapeutic Goods Administration of Australia

Key corporate standards for key business compliance risks
Risks

Corporate Standards

Bribery/
corruption• Group Code of Conduct (GrCoC)• SpeakUp line procedure• Sales Compliance@Straumann Policy•	Interactions with government officials –corporate procedure• Gift reporting form
• GrCoC for external business partners

Unlawful­promotion• Marketing material drafting guideline• Social media guideline• Brazil’s Agência Nacional de Vigilância Sanitária• Health Canada• Japan’s Ministry of Health, Labor and Welfare, as
well as the Japanese Pharmaceuticals and Medical
Devices Agency• US Food and Drug Administration (FDA), Center
for Devices and Radiological Health CDRH­(accepting MDSAP audit reports as a substitutefor routine Agency inspections).
In addition to Institut Straumann, Neodent and
Dental Wings, ClearCorrect recently received its
MDSAP certificate for design, development andmanufacture of sequential aligners and accessories
for the correction of malocclusion.
To ensure the readiness of our people and­processes at our certified sites, we have also
­conducted unannounced internal audits and­dedicated audits of our product technical files.

The Group has an ongoingtraining program to ensure
continuity in compliance withnew and existing standards
and regulations.

54

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

Risk management

Straumann Group

2020 Annual Report

Several regulatory authorities continue to inspect
manufacturers in foreign countries. We are­prepared for this and have experienced teams ofregulatory and compliance experts in Brazil, China,
Japan, Korea, Switzerland and the US. Excellent­collaboration between our experts in Basel andcolleagues in the regions facilitated recent successful registrations.
The new Medical Device Regulation (MDR) in
Europe means greater surveillance, higher need formore and stronger clinical data, more involvementof competent authorities for higher risk products,
longer approval times and active post market surveillance. Notified Bodies have declined in number
and their control has increased. Stricter requirements and regulations are also expected in smallermarkets, which will increase the need for enhanced
compliance and safe and effective products. In
order to ensure continued access to European markets under MDR, planning for adaptation is essential. Across the Straumann Group, projects to comply with the new European Regulation for Medical
Devices are well underway. As an example of this,we started a project in 2020 to set up an implantregistry, which will help us to generate the datarequired under MDR. Institut Straumann has
already received two MDR certificates covering­various types of products.

REPUTATION RISK
Like other leading manufacturers, the Group is
exposed to the risk of damaged public perceptionof its products and solutions. This might be theresult of poor implant placement, competitors’
inferior quality implants and other solutions, orunethical business practices. Various StraumannGroup country organizations belong to associations of manufacturers of medical and/or dental
products, such as Swiss Medtech in Switzerland,
Comident in France and ABIMO in Brazil. These
associations are dedicated to the advancement of
medical technology and its safe and effective use.

We started a project in 2020 toset up an implant registry,
which will help us to generate
the data required under MDR.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

55

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

Risk management

CRISIS MANAGEMENT IN 2020
Risk management intends to identify and prepare for risks before they materialize. The Group responded quickly to new risks in context of COVID-19 as follows:
Risk TypeCOVID-19 related threats to

Mitigation/opportunities

Operational

People safety• Infection risk
• Mental health risk

• Action plans for quarantine, distancing and hygiene at all sites• Remote working• COVID-19 test reimbursed for employees unable to work remotely• Programs to support remote working and to promote belonging, interaction, agility and mental health• Split-shift operation

Business continuity:• Production• Logistics• Customer service• Supply chain secured• Flexibility in production, logistics, administration, customer support, etc.
• Production contingency plans, capacity adapted to demand• IT infrastructure and key functions secured• Customer Services and e-Shop maintained, subsidiaries stockedMarket environment• Closed practices• Lower practice efficiency due to increased
safety measures• Recession, lower disposable income

Immediate response:• Preparations to rebound strongly – kept close to customers online• #TogetherStrong and #TimeForEducation web portals launched• Crisis information, best-practices, guidelines, scientific reviews on COVID-19 in dentistry, recovery plans for practices• Production of sanitizer gel and face shields

Strategic

Mid-term:• Shift to cost-efficient solutions• Accelerate digitalization• Direct to consumer models• Maintain DSO focus as market consolidates• Continue to invest in innovation

Straumann Group

2020 Annual Report

Long-term:• Capture opportunities as trends accelerate in digitalization, health consumerism and market consolidation• See strategy in action section on p. 17 f.
Compliancerelated

Reputation• ‘Superspreader’ perception risk

• Frequent internal communication of safety and hygiene guidelines• Frequent external communication about Group’s response to crisis, help to customers and other stakeholders

Financial

Liquidity• Lack of liquid assets• Scenario planning: short-term liquidity• CHF 280m straight bond placed in March• CHF 200m straight bond placed in June
• Additional committed credit lines assured• Management of working capital intensified• Capex reduced temporarily

Profitability• Sharp drop in sales• Customer credit risk

• Scenario planning: rolling forecasts• Immediate short-term cost reduction plan
• Personnel cost reduction measures, including voluntary pay cuts, reduced working hours and right-sizing• Support of customers for business success (see strategic risk mitigation in this table)

Financial markets• Increased FX headwind• Increased volatilities• Stronger hedging activities• Intensified direct investor communication

APPENDIX

56

SUSTAINABILITYREPORT

Building on a long traditionof sustainable development

58

Sustainability approachand materiality

59

Customers

60

Employees

64

Communities

69

Global production and logistics

72

Environment

75#

TOGETHERSTRONG

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Sustainable development

BUILDING ON A LONG TRADITION OF SUSTAINABLE DEVELOPMENT

Straumann Group

2020 Annual Report

Although Straumann’s roots go back much further,2020 marked the 30th anniversary of our company
in its present form and with its current focus on
dentistry. What began as a family firm with 25
employees supplying titanium dental implants has
become a world leader in tooth replacement andorthodontic solutions, uniting global brands
that stand for excellence, innovation and quality
in replacement, corrective, regenerative anddigital dentistry.
The Straumann Group today provides employment
to more than 7300 p­ eople from 60 nations. Its
products have been used to treat millions of­people all over the world, creating smiles, restoring
confidence and bringing lasting improvements tothe quality of life. These are just a few examples
from the company’s long scorecard of sustainablegrowth and development. For us, corporate
responsibility has always meant simply doing more
to create value for our customers and theirpatients, our staff and the communities in which
we operate, in a sustainable manner and with­minimal impact on the environment. Sustainability
means creating lasting smiles and confidence
today, tomorrow and beyond.
In line with the growing importance of environmental, social and governance (ESG) mattersamong various stakeholder groups, we appointed
an internal Steering Committee in 2020 tasked
with determining focus areas, goals and KPIs forour sustainability strategy.

The Committee confirmed that our permanent
focus should remain on patient wellbeing, healthand safety, and customer prosperity. The mid- andlong-term focus is on people, planet and compliance, while the predominant short-term aspects
are employee health, safety, engagement, development and turnover.

defined a roadmap with milestones for short to
mid-term goals related to health, safety and people
engagement and for long-term goals on environmental impact improvements. Progress will bemeasured with established metrics and documented. Implementation is expected in 2021.

In addition to determining clear responsibilities for
ESG (see chart below), the Committee establisheda key focus on social aspects, including the wellbeing of patients, employees and customers. It also

Environment

Social responsibility

Governance

Board of Directors

Human Resources & Compensation Committee

EMB

CEO

Communication/
Reporting

ESG Coordination (Chief Legal Officer)
Head Research,
Development &Operations

Head Global People
Management &Development

Group
Head of Marketing& Education

Head Corporate
Communication

Chief Legal Officer

Environmental
aspects of all sites
incl. production(implants & digital)
and all facilities

All human resources
topics (inclusion,
diversity,
development, etc.)

Patient wellbeing,
Training and
Education,marketing practices,pricing

Communities,
sponsoring, accessto treatment, etc.

Compliance,
SpeakUp, Codes,
Supply chain,
ethics, privacy, etc.

Investor Relations
Corporate
Communication

Environmental
impact of sales
team
Secondary impact
of products,
biodiversity

This chart shows the allocation of ESG responsibilities at Board and Management levels. Our Group Code of C
­ onduct assigns personal responsibility forenvironmental protection and proper social conduct to all line ­managers and employees.

58SHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Sustainability approach

SUSTAINABILITY APPROACH AND MATERIALITY

Straumann Group

Sustainability materiality map

Relevance for stakeholders

STAKEHOLDER ENGAGEMENT
Our stakeholders include investors, customers,
employees, members of the community, and conservationists. Each group places different levels ofimportance on various aspects of our performance.
To understand their specific needs, we foster aninteractive dialogue and practice a feedback­culture on many levels and through various channels: Shareholders are interested in share-pricedevelopment, return on investment and good governance, while responsible investment professionals are also keen on performance in sustainability
aspects. Customer interests include assistance ingrowing their business and establishing specialist
reputations. Dental service organizations focus onaffordability, reliability and an ethical supply chain.
Employee feedback highlights professional development and a healthy work-life balance. Charitablepartner organizations are interested in continuingsponsorship relations and agreed goals. Finally,­various groups emphasize ethical concerns including obligations to conserve the environment. In
this report, we discuss processes and results ofperformance-relevant dialogues with key stakeholders in the respective chapters.

High

In this report, our material sustainability topics
refer to the whole Straumann Group unless statedotherwise (see also p. 185), and are addressed in
the following sections on customers, employees,
communities, and environment.

MONITOR• Data privacy 7• Supplier human rights
and environmental
assessment 7• Fair competition3• GHG emissions

FOCUS• Patient health and safety 1• Customer satisfaction 2• Economic performance 6,7• Employee health andsafety 3• Colleague engagement3• Inclusion3• Training and education 2,3• Provision of approved
products and services 7• Traceability and labelling 1,2• Business ethics 1,2,3

MAINTAIN• Charitable programs 4

MONITOR• Intellectual property1• Operational healthand safety 3• Materials use 5• Energy use 5• Water use 5• Waste 5

MiddleIn 2020, several adjustments were made to themateriality map. The spread and impact of­COVID-19 added to the importance of our employees’ physical and psychological wellbeing andsafety. ‘Employee Health and Safety’ moved to the‘Focus’ quadrant and was redefined as ‘Operational
Health and Safety’ to distinguish it from ‘Patient
Health and Safety’. Conversely, ‘Intellectual Property’ no longer requires ‘Focus’ priority but still
remains a key topic for monitoring. ‘Customer­Privacy’ has been replaced by ‘Data Privacy’, which
is more comprehensive and includes our internal
data and information systems. The term ‘Greenhous Gas Emissions’ is more specific and replaces‘Emissions’. The new term ‘Business Ethics’ summarizes all aspects of what was previously named‘Compliance, Responsible Marketing, Anti-Corruption’. We emphasize that ‘Inclusion’ and ‘Colleague

Engagement’ also refers to diversity and belonging
in all aspects – as a source of creativity that contributes to business success.

Low

2020 Annual Report

MATERIALITY ASSESSMENT AND REVIEW
We continuously monitor the materiality of relevant environmental, social and governance (ESG)
topics to our business and our shareholders inalignment with our strategic priorities. The most
relevant topics identified in our 2020 assessment
are shown in the chart on the right. By addressing
them regularly, we ensure long-term performance,
monitor high-level risks and opportunities, andstrengthen relationships with our stakeholders.
The materiality assessment is based on interviews
with senior managers across the company every
year. The process of defining and prioritizing­material topics for this report considered the GRI
principles: stakeholder inclusiveness, sustainability
context, materiality, and completeness.

Low

MiddleHigh

Relevance of potential impact on businessInformation on material sustainability topics is provided in the following
places in this annual report:
1 Risk Management, p. 49 ff.
2 Customers, p. 60 ff.
3 Employees, p. 64 ff.
4 Communities, p. 69 ff.
5 Environment, p. 75 ff.
6 Business performance, p. 35 ff.
7 Global reporting initiative, p. 185 ff.

59
GRI disclosures: 102 –40, 102 – 43, 102 –44, 102 –46, 102 –47, 102 –49

HIGHLIGHTSHIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Customers

CUSTOMERS
Staying close to customers through difficult times

Straumann Group

2020 Annual Report

NURTURING OUR CUSTOMER BASE
The risk of exposure to corona virus is higher for
dental hygienists, dentists and dental assistants
than for any other occupational group.1 Understandably, a key concern among our customers in 2020
was the safety and wellbeing of their staff andpatients. At the outset of the pandemic there wasan urgent need for advice, help and personal protection equipment (PPE). Furthermore, most clinics had
to close except for emergency cases. For many, thismeant insufficient income to cover operationalcosts. Being able to rely on a manufacturer for support and continued supply on demand was essential. So too was reassuring patients that it was safe
to visit dental practices and seek treatment.
Unable to visit customers, we quickly reached out
through online channels, platforms and services tokeep in touch and to respond to their needs. Our
initiatives to help them rebound quickly included:
information on safety, supplies of PPE – e.g. faceshields, thermometers, sanitizer and disinfectants,
as well as communication tools to help restore
patient confidence. To fill the spaces caused byconference and meeting cancellations, we hosted
online events including virtual symposia, training
and education programs as well as networking
events. All of these initiatives created opportunities to foster dialogue, gain feedback and generateleads. As a result, we were able to maintain our
global customer base.

Other key factors for maintaining/expanding ourcustomer base in 2020 include:• the continued global rollout of Straumann’s
innovative BLX implant system• the launch of Straumann ZAGA zygomatic
implants• leading-edge innovation e.g. Straumann TLX(see p. 25)

Straumann’s customers by segment (left) and by region (right)
in %

10

• attractively priced challenger brands andsolutions (e.g. Anthogyr, Medentika, Neodent,
NUVO)• acquisitions and partnerships (e.g. DrSmile, Artis
Bio Tec)• online education, marketing and sales initiatives• comprehensive solutions from a single supplier• state of the art e-shop• continued product availability• digital ecosystem.

37

25
54

26

• value-adding services and concepts (e.g. Smile ina Box, immediacy, remote monitoring)• starter training and education courses

8

10

30
General dentist
Specialist
Laboratory
Other

Europe, Middle East, Africa
Latin America
North America
Asia/Pacific

The Straumann Group’s customers are spread over more than
100 countries and include general dentists, specialists (oral­surgeons, periodontists, prosthodontists, orthodontists), dental
technicians and laboratories, as well as corporate customers(labelled ‘Others’ in this chart) such as distributors, hospitals,­universities and dental service organizations (DSOs). A single
DSO can represent hundreds of clinics and dentists, including­generalists, specialists and technicians.
There were no significant shifts in the specialization and­geographic d­ istribution of our customers. The respective­proportions of general dentists and specialists increased anddecreased slightly, reflecting a continuation of the trend we haveobserved in recent years and other factors, such as the growthin our clear aligner business.

60

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Customers

SERVING CUSTOMERS DIRECTLY
We serve customers directly through our teams ofsales and marketing professionals, most of whom
are highly trained sales representatives or service
staff. This adds value for customers and helps us to
identify, manage and learn from their needs. For
much of 2020, our teams worked remotely, serving
customers and participating in online training,
including modules on remote selling and customer
acquisition.
Regular training is mandatory as one of several
safeguards to ensure compliance with regulations
relating to the sale of our products and services.
For details see compliance risk (page 53ff.). Further
supporting our commitment to the patients’ interests, much of the scientific information used toendorse our products is peer-reviewed and quality
compliance is assured (see p. 54f.).
CUSTOMER DIALOGUE
Our primary sources of customer feedback include:• direct personal and remote contact through oursales force

Straumann Group

2020 Annual Report• scrupulous complaint management, evaluation
and reporting• market acceptance tests and limited market
releases (LMRs) to obtain customer feedback prior
to product launch• post-launch tests (e.g. to check the effectivenessof our marketing messages) and expert meetings
including customers involved during development• online channels and platforms such as customer
pulse check surveys taken online during
lockdowns in spring.

Net-Promoter-Score surveys were conducted by
ClearCorrect in its core domestic market and by
Straumann Group in Brazil. All of these and otherchannels are important sources of market intelligence and feedback, which is processed and used
to refine products, usage, solutions and services.
The International Team for Implantology, whose
membership exceeded 18 500 dental professionals
across more than a hundred countries by the endof 2020, is also a key source for customer information and a unique partner for science and education. We deepened our longstanding relationshipwith the ITI in 2020.
CUSTOMER EDUCATION IN DIGITAL FORMATS
Education is a core competence of the StraumannGroup, but travel and meeting restrictions preventing us from holding physical training and education events. At the same time, the increased­availability of dental professionals when practices
closed presented a significant opportunity for
online education. We therefore created end-to-end
online learning solutions, offering high quality,­relevant content in various formats through­multiple channels. Our #TimeForEducation­campaign is an example of how we provided anenhanced ­virtual education experience in all­markets, including practical advice on how tobounce back to practice success. In Switzerland
and Germany the innovative Learn in a box concept
for hands-on sessions was rolled out: courses are
conducted online, course materials, such as
implants and models, as well as QR codes linked todigital materials are transferred to participants inecologically-friendly grass paper boxes. We havecontinued to invest in digital education assets,
tools and solutions for ­virtual interactivity such as
gamification and ­virtual reality.

A virtual reality booth at one of ClearCorrect’s online events in
2020. Such booths are interactive and allow online visitors to walkaround, view products, watch demonstrations, speak with oursales team and order products.

The virtual booth at Straumann’s online Immediacy Symposium, withreal sales representatives on the right waiting to help ­customers.

61

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Customers

Beyond supporting our customers with pandemiccrisis management from an education perspective,
we continued to support peer-to-peer activities
and dental communities, connecting experts andcustomers to share practical experience andknow-how.
DIGITAL TRANSFORMATION AND DISRUPTION
When digital channels became the sole means ofcontacting customers, the Straumann Group underwent a digital transformation in just a few weeks
that would normally have taken several years.

Straumann Group

2020 Annual Report

Under the umbrella of #TogetherStrong we­broadcast hundreds of webinars and eLearnings
attracting thousands of visitors. Our online customer ­platform ‘youTooth’ published more than 60
articles addressing the needs of dental professionals during lock down. Dental experts from aroundthe world shared their insights as we created acommunity of solidarity and togetherness.
Our eCommerce platform was quintessential andnow carries more than a third of our business inaddition to increasing efficiency with services likeeConsignment (automatic stock replenishment andmanagement) and eReturns. Fortunately, we completed our eShop re-launch early in the year, introducing a mobile-first approach and a product information management system to facilitate up- andcross-selling. Now available in 29 countries, the
new e-shop enables customers to find and selectthe right products from our various brands and topurchase them all together in a single checkout
procedure. The e-shop share of our business rosesignificantly in 2020.
Our #immediaXy campaign, which began in 2020and features the Straumann BLX implant system, is
our first example of an automated multi-channel

approach, offering unique personalized customer
experiences, and developing hundreds of hot leads
for the field sales force to follow and generate firstorders. The introduction of an integrated multichannel digital marketing approach that spans theentire customer journey from first contact to longterm loyalty reflects a disruptive digital-first mindset and state-of-the-art digital tools.
CONNECTING WITH KEY ONLINE OPINION­LEADERS (KOOLS)As communication went digital in 2020, we wereable to leverage our network of KOOLs to create
relevant content and intensify social media campaigns very quickly. Established in 2019, the #KOOLExpert Group comprises selected clinicians who areexperts in their fields. They have a recognized presence in the digital world through blogs, podcasts,
online courses, webinars, live-streamed events andsocial media channels. KOOLs typically attract­sizeable audiences to their online channels and are
gaining in number, relevance and influence.

Early in the pandemic crisis there was an acute shortage of­personal protection equipment for healthcare professionals. Our
Yller and etkon units responded to this by adapting production to
make 3D-printed face shields and sanitizer fluid.

CUSTOMER CONSOLIDATION INCREASESOne of the most significant current trends is the risein dental service organizations (DSOs), networks andchains, accompanied by a corresponding decrease
in independent practices, particularly in North­America, Europe and China. This accelerated in 2020,
driven by business interruptions, general uncertainty, financial and other challenges that prompted
small independent practices to seek partnerships.
DSOs range from local chains to international networks of fully integrated clinics. A single DSO canhave more than a thousand clinics serving millionsof patients each year. Such corporations are influential and have significant purchasing power. They
also have special needs, including premium andchallenger implant ranges, orthodontic solutions,

A drive-in cinema event organized by Neodent to boost morale
during a difficult period when distancing requirements ruled out
most other entertainment activities.

62

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Customers

private-label lines, logistics services, support forinternational expansion, digital workflows, guided
surgery, simpler, faster treatments, and support
through education.
The Straumann Group is well equipped to address
all of these needs and to capture the significant
business opportunities that corporate customers
offer. By continued close collaboration when o­ thers
closed down, our dedicated global DSO business
unit remarkably achieved revenue growth in 2020
despite the crisis.
Another achievement was to orchestrate an online
summit, bringing more than 50 Chief Executives
from the world’s leading DSOs together with top
speakers to discuss the impact of COVID-19 on DSO
leadership and the future of oral healthcare. The
participants represented no fewer than 31 000­clinicians spread across 28 countries. The event
provided valuable insights and enabled us to build
important relationships for the future.

BUILDING RELATIONS WITH THE
NEXT GENERATION
Attracting young dentists is important for sustaining our success. Past perception-pulse studies
revealed that their most common expectation fromcompanies like ours is help in building a reputation
and a business. To meet this expectation, the­Straumann Young Professional Program offers­education on dental skills, practice management
and marketing. These events also took place­virtually in 2020, when social media campaigns
and community management became evenmore relevant.
Notes and references
1

Lu M. Occupations with the highest COVID-19 risk. Visual Capitalist,
World Economic Forum 2020.­

Straumann Group

2020 Annual Report

CONTINUING TO ADDRESS THE GENDER SHIFT
We continued to address the gender shift by­supporting and encouraging female dentists toengage in implantology.
Our Women’s Implantology Network initiative(WIN) brings female practitioners and academics
together in order to network, inspire, mentor andgain deeper insights into their needs. The 2020
WIN summit was held virtually and welcomed
more than 3800 dental professionals from 120
countries, offering education, advice, technology
updates and networking opportunities over sevendays. During the year, the WIN membership­doubled to more than 4000.

This young female dentist got to know Straumann during her­studies. She was a participant in our Young Professional Programand has become a proficient implantologist.

Our dedicated global DSO
business unit remarkably
achieved revenue growth in2020 despite the crisis.

63

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Employees

EMPLOYEESHigh-performance organizational culture sustained
3 797
2017

4 881
2018

5 954
2019

7 590
2020

7 340

• consistently perform above expectations

Headcount development 2020• feel respected for their contributions to results

8000• receive recognition both internally and externallyfor being part of a great organization.

7500

7000
31.12.2020

Although many face-to-face learning events and­culture programs had to be cancelled in 2020, ourhigh-performance culture was sustained through the­provision of timely and easily accessible virtual­activities. A new suite of online connection andlearning opportunities was developed, with emphasis on virtual collaboration, coping with uncertainty
and remote management. These innovations will be
reviewed and built on in 2021.

Right-sizing

Our largest investment in people is to encourage
the cultural mindset that fosters constructive
behavior, collaborative leadership and high• feel accountable and passionate about our
purpose and journey

2016

Acquisitions

At year end, our global team totaled 7340, including 260 added through the strategic acquisitions of
DrSmile (Germany) and Artis Bio Tech (Romania).

CULTURE IN ACTION
We are convinced that a high-performance culture
must be intentionally nurtured by creating an environment where our people:• feel safe to express themselves freely

Employees

Organic
growthRegrettably, structural resizing was unavoidable.
We reduced our global workforce by approximately
660 jobs across all countries and functions,making every effort to conduct the process in a
­responsible, timely and fair manner in full awareness of our social responsibilities and obligations
as a global employer. Thanks to suggestions fromour staff, we were able to minimize the number of
redundancies and mitigate the effects. We are
deeply grateful for the understanding and professionalism of all our colleagues, especially those
whose positions were cut. We are also grateful forthe solidarity and selflessness of those who took
voluntary pay reductions to reduce the impact of
the crisis on jobs.

performance. Over the past seven years, our Cultural Journey has shaped our company, helping us
to achieve sustainable market outperformance andshare gains – even in 2020. Cultural attributes likeagility, taking responsibility, customer focus, andcreating opportunities have enabled us to weather
the storm and prepare to rebound strongly.

31.12.2019

Straumann Group

2020 Annual Report

SOLIDARITY AND AGILITY IN ADAPTING
TO NEW REALITIES
Geared for strong business expansion, our global
workforce doubled in the three years prior to 2020
and we added almost 100 new positions early inthe year. COVID-19 put recruiting plans on hold as
we acted quickly to adapt our costs to the drop inrevenues. Wherever possible, we implemented
reduced working hours and pay, as well as voluntary pay cuts for leadership.

64

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Employees

Straumann Group

2020 Annual Report

NEW GLOBAL PULSE CHECK – WE ENGAGE
We developed our annual global staff survey­significantly, using a new technology platform togain further insights and take appropriate action.
Branded weEngage, the survey assured anonymity
and was available online in 18 languages. In spite of
the challenging times, the results were very encouraging: the response rate was 86% (up from 77% in2019) and the engagement score of 78 was four
points above global benchmarks. Over 8000 comments helped to identify areas for development inrecognition, inclusion, communication and taking
action based on the results. weEngage c­ onfirmed
our key strengths: pride in working for StraumannGroup, excitement in the future and confidence inthe meaning and purpose of our work.
A FRESH LOOK AT DEVELOPING SKILLS
Training and development are essential to meetthe requirements for an international company inthe medical device industry and are keys to attracting and retaining top performers. Our Strategic
Management Development process involves ongoing review of senior management, people in criticalroles and future leaders. Our goal is to fill mostbusiness-critical and key management positions
with internal candidates. This year we took a fresh
look at our way of viewing talent within the organization, focusing on how alignment with our cultural principles is reflected in personal growth,development goals and succession planning.
After a successful pilot project in 2020, we will globally launch a new learning platform, weLearn, in
2021, that will allow us to expand our online learning portfolio, to connect as a community throughsocial learning features and to track learning.

Health and safety training continued throughout
the year and no workplace fatalities or serious­accidents were reported.
REDESIGNING OUR RECRUITMENT PROCESSAND POLICIES
We internally transfer or externally hire approximately 2500 people each year. As our global business evolves, we must understand the expectations of a new generation of candidates and ensure
our access to the skilled people required to support
our organization’s growth. To attract and retain
world class talent we will develop a new global
employer brand, refine interview and assessment
capabilities for our 2000 global hiring managers
and redesign our recruitment process and policies.
In 2022, a new Global Careers website will include
candidate relationship management and an
employee skills platform to help us track internal
employee capabilities. The system will connect
across many HR platforms, enabling real-time­analytics and insights.
DIVERSITY, INCLUSION AND BELONGINGSTRENGTHEN HIGH-PERFORMANCE CULTURE
The Straumann Group recognizes that the diversityof our employees, a culture of inclusion and asense of belonging bring new perspectives, foster
innovation, provide insights about our market andadd value. Our global team includes more thansixty nationalities in more than a hundred­countries. We believe in embracing and celebrating
individual differences, for example in gender,­gender identity, religion, age, nationality, ethnicity,disability, marital or family status, pregnancy,­sexual orientation and cultural background.
­Discrimination based on any of these traits is
not tolerated.

Employees by region

Employment

in %

in %

1414
(15)
(15)

44
(5)
(5)

2929
(28)
(28)

1717
(16)
(16)

1818
(19)
(19)
Rest of EMEA
Rest of EMEA
Latin America
Latin America
North America
North America
Switzerland
Switzerland
Asia/PacificAsia/Pacific

2121
(22)
(22)

9696
(95)
(95)
Full time
Full time
Part time
Part time

Numbers in brackets refer to 2019.
Numbers in brackets refer to 2019.

Global staff survey

Response rate

86%
Comments>8 000Engagement score78		

4 pts above
global benchmark

65

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Employees

In 2020, the Group’s gender diversity remained wellbalanced with room for further improvement atmanagement level: women account for 42% of ouremployees and 35% of our managers world-wide.
Diversity, inclusion and belonging are recognizedas priorities within our Cultural Journey. Current
initiatives include measuring inclusion in­weEngage, strengthening our global female talentpipeline to increase the number of woman­managers, recognizing events and causes relating
to minority groups, and addressing any gender
pay gaps that may exist.
FranceRESPONSIBILITY AND ETHICAL BEHAVIOR
Our Code of Conduct is part of our employment
contracts and is designed to ensure that all our
people conduct business in a legal, ethical andresponsible manner. It is mandatory and includes
requirements for good corporate citizenship,including respect for people, property and theenvironment. In 2020, we began to offer a worldwide hotline for staff to report compliance­concerns (see p. 53). During the year, six Code­violations were confirmed, and appropriate corrective actions were taken, including four dismissals.

Straumann Group

2020 Annual Report

BrazilThanks to the engagement, flexibility, responsible behavior and perseverance of our entire team around the world we have been able tomaintain operational continuity, ensure product availability and stay close to our customers throughout 2020.

66

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Employees

Human resources key figures1
Parameter

Unit

2020

2019

2018

7101
7015

7 590
7 494

5 954
5 874

Staff size

Employees

Total headcountFull-time equivalents

Employment typePart-time employees% of headcount

4

5

4

Gender diversity

Women in general staff (excl. Mgmt)

%

44

44

46

Women in management 2

%

35

35

32

%

31

37

31

CHF million

3.1

3.9

2.9

Women in SMD pool 3
Training and education Investment in staff learning

Turnover and absence

Employee protection

4

Average annual training & learning

Days/employee

3

4

4

Staff turnover

5

%

19

14

13

Absence rate due to sickness 6

%

3

4

4

Absence rate due toworkplace accidents 6

%

0

0

0

Work-related fatalities

Number000Reported cases of discrimination/harassment

Number1

1

2

Gender 1

42%

58%

Age 1
<30

14%

70%

30–50
>50

Staff structure by category and age group1

16%

Straumann Group

2020 Annual Report

in %

Age

<30

30–50

>50

Unit

2020

General staff (excl. Management)

14

58

12

% of headcount83

Management2

0

13

4

% of headcount

17

TOTAL

14

70

16

1
2
3
4
5
6

100

Excluding DrSmile (consolidated as of September). Total headcount at DrSmile per 31 Dec 2020 was 239 (220 FTE), bringing the Group
total ­headcount to 7340.
Job position “Manager” and all levels above.
Strategic Management Development group (senior management reporting to the EMB plus outstanding talents identified
throughout the organization).
Only direct expenses for internal and external training activites are counted here. Salaries paid to employees while in training areadditional and are not included.
Includes resignations and terminations.
Switzerland only. Proportion of absence time compared to target working hours.

Leadership by gender 1

35%

65%

67

68

FEATURE STORYTOGETHER STRONGWITH CHARITY#TogetherStrong

According to World Vision, the Syrian refugee crisis
is the largest refugee/displacement crisis of ourtime. Nearly 12 million people need humanitarianassistance; at least half are children. Many havetaken refuge in neighboring Jordan. Living without
resources in makeshift conditions, they don’t havethe luxury of a balanced diet and neglect oral
hygiene. The p­ revalence of tooth decay is high. Andi
Herzog, a Swiss airline pilot, saw this urgent needwhile working voluntarily with the NOIVA foundation. His visionary idea of creating a mobile clinic
staffed by local dentists to provide treatment for
refugees in the region became a reality in 2018.
Straumann has supported the project from the­outset and is committed to sponsorship for several
years to come.
At the time of writing the clinic was in the village of
Jaber al-Sirhan, 2km from the Syrian border, offering
extraction, filling, root-canal treatment, cleaningand polishing. Prevention is also an important partof their work.
During the pandemic lockdown in March, the teamresponded to a government request to establish an
emergency clinic for patients with severe dental
problems. Unfortunately, they had to withdraw
after just two weeks when overcrowding made it

impossible to continue. A few weeks later they
resumed service in Mafraq but on a reduced scale,because restricted space in the truck and safety­precautions against viral spread prevented use of
their second chair. Cleaning and running fresh air
through the clinic after each treatment further­limited patient flow. Furthermore, the need torenew their license and adjust the vehicle put themout of action for s­ everal weeks in the fall.

Despite the hurdles, they succeeded in offering
2000 treatments in 2020 and are eager to get backto full capacity as soon as the COVID-19 situation ismore stable. Proud to be their sponsors, we salute
their t­ remendous courage and selfless devotion to­creating smiles and restoring confidence for those
who are in such need.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Communities

COMMUNITIESWorking together with long-standing partners to create
smiles for those in need2020 Annual Report

CLEAR PRINCIPLES AND TARGETS
Our Corporate Sponsoring Committee evaluates
requests and initiatives according to clearly definedprinciples and policies. We set clear goals and lookfor continuity as well as sustainability in the­projects we support, which is reflected in our longstanding relationships and commitments. Despite
the constraints imposed by the pandemic, we wereable to support approximately 20 projects aroundthe world in 2020 (see table on p. 71). Owing totravel and quarantine restrictions, we received
fewer requests than usual and some projects
were cancelled.

Straumann Group

MAKING A MEANINGFUL DIFFERENCE IN
A SUSTAINABLE WAY
The provision of safe, effective, lasting solutions
that enhance well-being and quality of life is ourbiggest contribution to the community. Over theyears, our solutions have helped dental professionals to create smiles and restore confidence in millions of people around the world. Still, millions lackaccess to even the most basic dental care. This is
the motivation behind our charitable activities,
which focus on dentistry, where we can make ameaningful difference.

CONTINUITY AND SUSTAINABILITY
Because we strive for sustainable long-term commitments where appropriate, many of our charitable projects have been running for several years
and include:• Straumann AID (Access to Implant Dentistry), a
global initiative to help underprivileged patients
who need but cannot afford treatment. This
program has been running since 2007 and relies
on collaboration with dentists or dental surgeons
who provide treatment without charge, while wedonate the relevant products.
• The National Foundation for Ectodermal
Dysplasia (NFED), a US-based non-profit
organization that helps ED patients and theirfamilies. Among other symptoms, ED patientstypically show severely malformed or missing
teeth from infancy. We provide free implants andprosthetics in addition to financial support for the
NFED, which has been our partner since 2004.

Treatment for a needy patient in Nepal provided through Dental
Volunteers with sponsorship from Straumann.

• The Sonrisa project providing free dental
treatment to orphaned children in Nicaragua. Our
engagement in this project began in 2006 andhas included the education of a young local­dentist. In 2020, the scope expanded to provide
dental treatment to the underprivileged local
community.
• Novos Sorrisos (New Smiles), Neodent’s mobile
dental clinic in Brazil, which has been operating
since 2016. Staffed by 200 volunteer dental
professionals, it has travelled across the country
to serve thousands of patients free of charge.
The project had to be suspended because of thepandemic and the truck was converted into acanteen for COVID-19 front line medical staff.

Many of the charitable projects we sponsor include education indental healthcare, like this one in Jordan.

69

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Communities• The Rebuilding Smiles initiative in Australia,
which provides free dental work to children andwomen who have suffered dental injury indomestic violence. We began our support in 2017and increased it in 2020.
• The NOIVA project in Jordan operates a mobile
dental clinic offering dental treatment to refugees
along the Syrian border. Our support started in2018 and will continue for some years. Althoughsafety precautions against COVID-19 reduced
capacity significantly, the team succeeded inoffering 2000 treatments in 2020 – despite
lockdowns and several weeks’ interruption to
renew the vehicle’s certification.
• The Dharma Wulan Foundation team of volunteer
surgeons based in the Siloam Teaching Hospital,
Jakarta, and reaching out to remote areas of
Borneo and Kupang to treat children with dentofacial (cleft) deformities. We have supported thisinitiative since 2018.

Straumann Group

2020 Annual Report• The Stiftung schönes Lächeln (Beautiful Smile
Foundation) in Switzerland, which is acollaboration with Swiss University clinics to help
patients who need implant treatment but have
limited financial means.
• #LetThemShine, a new initiative in the USA thatprovides free dental implant treatment topatients who cannot afford it. The initiative is
supported by clinicians and funded by StraumannGroup employees in North America.
HELPING YOUNG DENTISTS TO HELPNEEDY PATIENTS
We continued to fund scholarships to dental students and to support young dentists travelling tounderprivileged regions to provide treatment andeducation in oral healthcare. Examples of this in2020 were projects in Benin and Nepal incollaboration with the German student network
Dental Volunteers.
The catastrophic explosion in Beirut in August andthe corona pandemic have had a profound impact
on the economy and life in Lebanon. To support the
local dental community, we made donations tomore than 50 dental students affected by thedisaster.
All of the aforementioned projects focus on dentistry and promote the Group’s reputation amongits stakeholders as a caring, responsible corporate
citizen. This supports our business and thus adds
value for our shareholders. We are grateful to ourdental partners – many of whom are volunteers –for their devotion and for ensuring that the funds
are used efficiently.

education platform offering a vast amount ofeducation material free of charge during
lockdowns. We also provide scholarships to help
dental students from underprivileged areas.
• Our lower-priced brands and solutions offer
greater affordability. Having been an exclusively
premium implant company, we began investing
significantly in lower-price brands and theirinternational expansion in 2012. Today, morethan 40% of the implants we produce are nonpremium. In 2020, we introduced NUVO, a new
brand of highly cost-effective, simple implant
solutions, which we are rolling out inter­nationally. Apart from this, we continue todevelop innovative products and solutions that
reduce costs or make treatment possible (e.g.
small diameter implants, zygomatic implants,
etc. for patients with insufficient bone).

BEYOND DENTAL CARE
The fire that destroyed Camp Moria on Lesbos in
September left more than 12 000 refugees without shelter, food and clothing, adding to the challenges of overcrowding, COVID-19 and future
uncertainty. We responded by re-allocating funds
from two cancelled projects to a relief organizationin Lesbos with whom one of our staff had worked
as a volunteer on sabbatical.
ACCESS TO TREATMENT
Apart from our charity programs that provide freetreatment to patients who cannot afford it, we
contribute to increasing access to treatment
through:• The provision of training and education: Our
support for academic partners spans more than
three decades and currently includes the ITI,
ILAPEO, dental schools and academies aroundthe world. In 2020, together with our academic
partner the ITI, we created an extensive online

A smile created for life – this youngster was born with a cleft­palette deformity and was treated by a Dharma Wulan Foundationteam of volunteer surgeons based in Jakarta, which Straumann has
supported for several years.

70

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Communities

Main initiatives and projects sponsored by Straumann in 2020

RegionLead partner

Objective1

Status/results

GlobalStraumann AIDFree implants and materials for needy individuals, supporting
volunteer dentists

Ongoing since 2007

Australia

Australian Dental Association Rebuilding Smiles

Free dental treatment to women and children affected bydomestic violence

Ongoing since 2017

Benin

Dental Volunteers

Free dental implant treatment for underprivileged people

Completed

BrazilNeodent

Novos Sorrisos mobile dental clinic for the underprivileged

Ongoing since 2016, temporary use as a canteen for COVID
front-line hospital staff

COVID-19 relief: large donations of sanitizers and oral hygiene kits

CompletedCambodia

Hope for All Clinic

Dental student scholarship program

Ongoing since 2007

Mini Molars/Volunteers Mainz University

Dental treatment & supplies for underprivileged people

Completed

Jung & Krebs

Practical support for young people with cancer

Completed

Time Out Foundation

Biking equipment for children at risk

Completed

Association for Children with Cancer, Freiburg

Support for children with cancer and their families

Completed

GreeceEuroRelief

Refugee disaster relief, Moria Lesbos

CompletedIndonesia

Dharma Wulan Foundation

Treatment of children suffering from cleft palettes

Ongoing since 2018

JordanNOIVA Foundation

Mobile dental clinic treating Syrian refugees

Ongoing since 2018; 2000 treatments in 2020

LebanonSaint Joseph University & Lebanese University

Disaster relief – support for dental students

Completed

Nepal

Dental Volunteers

Dental treatment & supplies for underprivileged people

Completed

Nicaragua

Sonrisa Foundation, Switzerland

Free dental care for underprivileged community

Ongoing since 2006

Switzerland

Stiftung schönes Lächeln

Affordable implant treatment for seniors with limited means

Ongoing since 2018

USA

National Foundation for Ectodermal Dysplasia

Free implants and prosthetics in addition to financial andpublic relations support

Ongoing since 2004

Harvard School of Dental Medicine

Student scholarship

Ongoing

Let Them Shine Foundation

Materials for Pro bono dental services

Ongoing

Straumann Group

2020 Annual Report

Germany1

In each case clear prerequisites and goals were set.

71

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Global Production & Logistics

GLOBAL PRODUCTION & LOGISTICS
Ensuring supply continuity – a key to gaining market share
MAINTAINING THE ENTIRE SUPPLY CHAIN DESPITESIGNIFICANT HURDLES
Hardly surprisingly, the biggest challenges for­Production & Logistics in 2020 were to protect­personal health and safety, to ensure continuity inproduction and to maintain product availability.

Straumann Group

2020 Annual ReportThanks to the responsible behavior of our production teams implementing effective action plans,safety precautions and preventative measures, we
did not have to shut down any of our plants
because of corona virus cases. We supported theglobal operations teams with a rigorous COVID
mitigation and management procedure that
included minimizing mobility and cross-team exposure, extremely disciplined use of masks and allother hygiene measures, entrance surveys, temperature monitoring, standardized approaches to
respond to potential exposure using contact­tracing and generous access to quarantine leave.
This was critical when demand surged as lockdowns eased and dental practices worked at full
capacity to absorb pent-up demand. Despite significant hurdles, we succeeded in maintaining theentire supply chain from procuring raw materials
to delivering finished goods to our local subsidiaries. One example of our efforts to secure material
sources in our supply chain is the agreement wesigned to acquire the ceramics specialist OxiMaTec
in 2023.

Despite the many disruptions and the heavy
impact on revenue development, we succeeded insustaining our gross margin well above 70%.
ADAPTING/EXPANDING CAPACITY
Despite the general interruptions, we were able to
make progress with our production expansion projects as we look forward to a return of the growthtrends seen in recent years. Our new plant in­Curitiba (BR) went into operation and began­producing NUVO implants for the global rollout of
this new brand. Our highly automated European
production unit for clear aligners went into operation in M
­ arkkleeberg (DE) in the first quarter withan initial capacity of 10 000 units per day. Medentika’s new factory in Oberreichenbach/Calw (DE)was completed, offering additional capacity andallowing us to insource various processes. All
machinery, activities and staff were transferredfrom Renningen and the new site, including
insourced activities, became operational in midDecember. Calw is Medentika’s main production
center for implant and multi-platform prosthetic
solutions in addition to housing a new education
facility. In Arlington (US), architectural work on a
new factory was completed and construction isdue to restart in 2021.
In Villeret (CH), Straumann’s largest production­center, interior construction of our new building
was delayed temporarily and reinitiated with commissioning planned for mid-2021. Following the
successful introduction of Neodent implants in
India, the equinox brand was discontinued and the
manufacturing unit in Thane (IN) closed.

UPGRADING INFRASTRUCTURE
In addition to ongoing expansion projects, we continued to invest in state of the art technology for
implant production, for example new CNC lines,
laser equipment, specialized packaging equipment
and visual inspection robots. We implemented­various software tools to support planning, product verification, product validation, and the submission and administration of regulatory
applications.
CONTINUED INVESTMENTS IN DEVELOPMENTThe Group’s cost reduction measures did not affectour development program, which continued
despite the team’s having to work remotely. This
meant that important projects like Straumann’s

Our highly automated clear aligner production facility went into
operation in Q1. With a present capacity of 10 000 units per day, it
can be expanded and replicated in other locations.

72

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Global Production & Logistics

innovative TLX and zygoma implant systems aswell as extensions to the BLX implant portfolio allcontinued on track. In addition, we invested­further in our technology development capabilities, for example in 3D-printing and standardized
fatigue testing.

Straumann Group

2020 Annual Report

SUPPLY CHAIN MANAGEMENTWith many airlines suspending operations during
the crisis, delivery to our subsidiaries was very challenging but we were able to maintain the supply
chain thanks also to successful proactive stocking
in regions and key markets (e.g. USA, Brazil, China,
Japan, etc.).
ENSURING PRODUCT INTEGRITY FOR THE HEALTHAND SAFETY OF PATIENTSThe integrity of our products and the healthand safety of patients are paramount and are­supported by state of the art quality management­systems in production and development. Practically all of our 18 production sites are certified to
ISO 13485 (see table on the right). The implementation of regulatory requirements is a management responsibility: controls to ensure productsafety in the work environment are in place as wellas risk management and design control measuresin product development. Product traceability,­validation processes for sterile medical devices andeffectiveness of corrective and preventive actions
are ensured (see p. 54f.).

Straumann Group production sites in 2020
Products

Location

Markets

Certifications and main countries for clearance,
USFDA Establishment ­Registration (FEI)

Biomaterials

Malmö, Sweden (Straumann)

GlobalISO 13485, MSDAP 1; FEI 3002806508

CADCAM prosthetics

Arlington, USA (Straumann)US

Dental licence for lab activity; FEI 3005106405

Markkleeberg, Germany (Straumann)

EuropeISO 13485, MSDAP 1; FEI 3011221537

Mendaro, Spain (Createch)Spain (Europe)

ISO 13485, Dental licence for lab activity

Clear aligners

Mersch, Luxemburg (Simeda Anthogyr) Europe

ISO 13485, Dental licence for lab activity

Narita, Japan (Straumann)

Japan (Asia)

ISO 13485, Dental licence for lab activity

Rheinfelden, Switzerland (etkon)

Switzerland

Dental licence for lab activity

Curitiba, Brazil (ClearCorrect)

BrazilISO 13485

Markkleeberg, Germany (ClearCorrect) Europe

ISO 13485, application pending

Round Rock, USA (ClearCorrect)

GlobalISO 13485, MSDAP 1

Digital equipment

Montreal, Canada (Dental Wings)

GlobalISO 13485, MSDAP 1; FEI 3006945044

Implant systems

Andover, USA (Straumann)

GlobalISO 13485, MSDAP 1 China, Russia
FEI 1000121052

Curitiba, Brazil (Neodent, NUVO)

GlobalISO 13485, MSDAP 1; FEI 3008261720

New Taipei City, Taiwan (T-Plus)

Taiwan, China, US ISO 13485 US, China

Resins/thermoplastics

Renningen/Calw, Germany (Medentika) Global

ISO 13485 US, EU; FEI 3013232153

Rheinfelden, Switzerland (Valoc)

GlobalISO 13485; FEI 3011787401

Sallanches, France (Anthogyr)

Asia, Europe,­Russia

ISO 13485, MSDAP 1 EU, Russia, China
FEI 4224

Villeret, Switzerland (Straumann)

GlobalISO 13485, MSDAP 1 China, Russia;
FEI 3002807318

Fremont, USA (Bay Materials)

GlobalISO 13485 application pending

Pelotas, Brazil (Yller Biomateriais)

LATAM

ISO 13485

1 MSDAP: Medical Device Single Audit Program, including Australia, Brazil, Canada, the United States and Japan.

73

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Global Production & Logistics

Global production sites

MALMÖ (SE)
Biomaterials
ARLINGTON (USA)CADCAM milling
FREMONT (USA)
Thermoplastics

MONTREAL (CA)Digital equipment

ANDOVER (USA)Implants and prosthetics

Straumann Group

2020 Annual Report

ROUND ROCK (USA)
Clear aligners
CURITIBA (BR)Implants and prosthetics,
CADCAM milling,
clear aligners

PELOTAS (BR)ResinsCALW (DE)Implants and prosthetics

MARKKLEEBERG (DE)CADCAM milling,
clear aligners
RHEINFELDEN (CH)CADCAM milling,
prosthetics

SALLANCHES (FR)Implants and prosthetics

BASEL (CH)Global headquartersMERSCH (LU)
CADCAM milling

VILLERET(CH)
Implants and prosthetics

MENDARO (ES)CADCAM milling

NARITA/CHIBA (JP)CADCAM milling

NEW TAIPEI CITY (TW)
Implants and prosthetics

74

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Environment

ENVIRONMENT
A culture that balances economic performance and environmental targets

Straumann Group

2020 Annual Report

At the Straumann Group we are cultivating ahigh-performance corporate culture that balances
economic performance, social commitments andenvironmental targets for the benefit of our
stakeholders. We believe that environmental
stewardship and combating climate change are
essential to sustainable development and must
be addressed collectively and globally. Mitigating
our footprint by using energy and natural
resources efficiently is a central element of ourambitions. As our operations have expanded­rapidly, it is no surprise that our environmental
footprint has also increased over the years.
The geographical spread, the speed of our growth
and the acquisition of companies with different
reporting capabilities add to the complexity ofmonitoring our impact on the environment. Nevertheless, we have strengthened our commitment
and further expanded the scope of our environmental reporting to include recently acquired production facilities as well as larger non-production
sites. In addition to providing further transparency, this will help us to create opportunities formeaningful improvement. Furthermore, we are in
the process of analysing the use of vehicles by theGroup, with a view to reporting and reducing
emissions. Currently, the areas where we see thegreatest leverage are in materials efficiency,
waste management, energy use and water consumption. Care for the environment is included in
our Code of Conduct for all employees, and ourCode of Conduct for External Business Partners
promotes the same goals in our supply chain.

BEYOND COMPLIANCE: SOUND ENVIRONMENTAL
MANAGEMENT PRACTICESAs a supplier of medical devices, the StraumannGroup complies with stringent regulations, including
the analysis of raw materials and rigorous protocols
for quality control to ensure the safety and effectiveness of our products. All manufacturing processes
are fully documented to provide traceability.
In addition to complying with regulations, we track
our energy consumption and resulting greenhousegas emissions, we certify the environmental management systems at our principal manufacturing
sites to ISO 14001, we communicate our progressover time and we have been participating in CDP’s
Climate Change program since 2010. In 2020, we
improved our score from C to B- for the first timeand reached the “Management” level of disclosure,which is awarded to companies taking coordinatedaction on climate issues. Our result places us above
both the European overall regional average score andthe medical equipment and supplies sector average.
In 2020, having successfully completed pilot initiatives (dunning process, vendor invoice handling,
new procurement features, license management)
we started the Global LEAN transformation program BEST (Business Excellence Straumann group)with a combination of skills development andimprovement initiatives at the transactional andstrategic levels. BEST integrates typical lean tools
such as 5S workplace organization, efficiency
improvement (8 wastes) and 5W & Pareto (rootcause & prioritization). For 2021 we have several

continuous improvement projects in view, which
are headed by a member of either the respective
department or the BEST team.
Our goal is to become a lean company, which means
achieving continuous efficiency improvements
through the elimination of waste in manufacturing,
warehousing, distribution, fulfillment and logistics
processes. This extends to our energy consumption,material use, time management, quality control andhandling of scrap and refuse. Increased productivity,
improved safety and sustained employee commitment are additional benefits of lean initiatives andsupport the Group’s strategic priority of further
building a high-performance culture.

The Group continues to invest in state-of-the-art production technology to increase efficiency and reduce waste – for example these
new Tornos CNC machines, which were installed in Andover in 2020.

75

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Environment

Due to the COVID-19 pandemic we reduced business trips to an absolute minimum. Having learnt
from this experience and adapted, we will seek toavoid unnecessary business travel and to reduce air
travel in the future, when there is respite from thepandemic and mobility increases. In addition, we
have several initiatives to reduce fossil fuel consumption by our staff commuting to work. These
include public transport subsidies and encouraging
the use of bicycles.
UNDERSTANDING OUR IMPACT
Both our business scope and our product portfolio
have broadened significantly in recent years. Our
product portfolio currently includes:• dental implants and components made from puretitanium, titanium alloy and ceramic• prosthetic elements made of ceramic, metal,
or polymer• clear aligners made of polymer

Straumann Group

2020 Annual Report• biomaterials for tissue regeneration including­proteins, collagens and bone derivatives• digital equipment (e.g. scanners), millingmachines and 3D printers, mostly manufacturedby third parties and made mainly from metal,
plastic, prefabricated electronic components
and glass• resins for 3D-printing and thermoplastics for clearaligner production• prevention products (e.g. whiteners, fluoride
varnish, airflow devices), hydrogen peroxidase andfluoride made by third party suppliers.
Our principal products, dental implants and abutments, are produced on turning and millingmachines from metal rods/discs and ceramic discs/
blanks. In the manufacturing process, we use­ roduction/logistics sites in:p• Andover, Arlington, Fremont*, and Round Rock(USA)
• Curitiba and Pelotas* (Brazil)• Malmö (Sweden)• Markkleeberg, Hügelsheim* and Renningen­(Germany)• Mendaro (Spain)• Mersch (Belgium)• Montreal (Canada)
Medentika’s new purpose-built facility in Calw is designed toincrease capacity and efficiency.

cutting oil and other coolants/lubricants. Implant
manufacture also includes sandblasting, acid etching, cleaning, packaging, and sterilization. We havealso started to produce implant system components by ceramic injection moulding.
Our production processes make up our most significant internal environmental impact, followed to amuch lesser extent by activities in research anddevelopment. We do not use significant amounts ofheavy metals, such as mercury, lead, or manganese,
which are often present in the production processesof manufacturers serving the dental industry.
MORE SITES COVERED IN OUR REPORTING
From 2019 on, we have extended the environmental data collection process beyond our production
sites to include offices and warehouses with morethan 100 employees. The data reported here
aggregate our global headquarters in Basel,­Switzerland, our country headquarters and­logistics center* in Freiburg, Germany, Neodent’s­headquarters in Curitiba, Brazil, and our• Narita (Japan)• New Taipei City (Taiwan)• Sallanches (France), and• Villeret and Corgémont (Switzerland).
* newly added locations with data for 2019 and 2020

MATERIALS, WASTE AND WATER
Titanium consumption decreased slightly year-onyear reflecting the global impact of the pandemic,
which was counterbalanced by new launches andproduction expansion at some locations. Whileimplant volumes increased, the use of metals(mainly cobalt chrome alloy) for CADCAM prosthetics at our existing sites went down, reflecting thetrend towards local milling by customers, a shift
towards modern materials like zirconia and improvements in raw material yield by increasing nesting
density, i.e. arranging items to obtain the largest
number of prosthetics from each disc of raw material. Titanium recycling remained stable overall. The
increase in thermoplastics consumption was due tothe sustained, strong growth in our clear aligner
business. Consumption of photopolymers, on theother hand, remained fairly stable.

76

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Environment

The use of operating supplies such as oils, cleaning
solvents and acids decreased reflecting the overall
reduction in production.
Waste in general also decreased in 2020. The optimization of waste streams and improved separation of waste fractions continued to be an important driver in this context. Water consumption
increased moderately, mainly as a result of theintroduction of aligner production in Markkleeberg
and the aligner production expansion in Curitiba.
The Group’s paper consumption has steadily
declined over the past years. This trend wasstrongly accentuated in 2020 due to remote working and the increased use of online meetings. Since
2016, Straumann has provided its Instructions For
Use in digital form online, gradually replacing conventional, paper-based IFUs. To date, this has led toreductions in external paper use of about 319 tons.

Straumann Group

2020 Annual Report

Several initiatives to reduce waste and to savewater were successfully implemented in 2020,
including the following examples:
USA• In Andover, we installed high-capacity equipment
to compact metal turnings from our CNC
operation into desirable ‘pucks’ which areprocessed by a local recycler. The equipment
enables entrained cutting fluids to be separated
completely, packaged and reused offsite.
• Capacities for recycling cardboard and paper havebeen increased.
• We installed a new aqueous cleaning line, which
achieves the required implant cleanliness with
20% less water.

Switzerland and Germany• We introduced a new ecologically friendly
packaging concept for our Learn in a box
initiative.
• In Villeret, we returned 10 000 plastic boxes forrecycling instead of discarding them as refuse.
• Personal stainless-steel water bottles for eachstaff member reduce consumption of disposable
plastic cups by 300 000 per year.
Sweden• In Malmö, recycling stations were set up to
optimize plastic waste separation.
France• At various locations, we launched#MayTheEcologyBeWithYou, a campaign toencourage engagement in sustainable initiatives.
Employees voted on actions proposed by
Management, including the replacement of
paper cups and plastic bottles with reusable
alternatives.

Energy consumption declined
slightly due to the pandemic,
countered by new launches
and production expansion insome locations.

ENERGY USE AND GREENHOUSE GAS EMISSIONS
More than 87% of the total energy consumed in2020 was electricity. The remainder was associatedwith fuels for heating or manufacturing. In 2020,
we began to analyse our global use of renewableenergy systematically. More than 56% of theenergy we consumed came from renewablesources. For electricity alone, the amount was over
64%. Several sites have already been relying on
100% certified green electricity. We will continue
to work diligently to source renewable electricity or
generate our own renewable energy wherever­feasible in the future. Overall, our energy consumption declined slightly, reflecting a reduction due tothe impact of the ­pandemic, countered by anincrease due to new launches and production
expansion in some locations.
Consumption of electricity and heating energy percapita increased moderately, reflecting the workforce reduction, production expansion and theinstallation of additional machinery. Greenhousegas emissions developed in line with energy­consumption. In addition to our initiatives to­minimise waste and to save water, our efforts in2020 to reduce energy consumption and greenhouse gas emissions in operations included thefollowing:• In Villeret, we installed a new gas boiler that is
considerably more efficient, and we raised staff
awareness of saving energy by switching off­computers, monitors and desk lamps.
• In Andover, six new CNC turning machines went
into operation, which significantly reduce cycle
time and consume 30% less electricity.

77SHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Environment

Environmental key performance indicators(as per 27 January 2021)
Performance indicator

Unit

2020

2019 1

Consumption

tons

44.1

45.2

Recycling
tons(consumption minus product)

24.6

26.4

Consumption

tons

7.4

11.4

Recycling

tons

2.5

3.2

Zirconia

Consumption

tons

5.7

5.6

Thermoplastics

Consumption

tons

215.7

177.9

Photopolymers

Consumption

tons

87.5

90.1

Various oils

Consumption

tons

153.1

Product
Titaniumraw materials

Cobalt chrome

Operatingmaterials

1

Straumann Group

2020 Annual Report2

Titanium consumption

Titanium recycling(tons)(%)

2019 12019 1

45.2

58%

2020

2020

44.1

56%

−3 %

−5 %

158.0

Oils and solvents consumption

Oils and solvents recycling(tons)(%)

Recycling

tons

59.0

106.8

Cleaning
solvents

Consumption

tons

65.7

78.7

Recycling

tons

34.4

37.9

Acids

Consumption

tons

80.0

100.0

Paper

Consumption

million sheets

7.4

9.4

Per capita2

sheets/employee

1 798

2 113

New sites were included as of 2019 (see also p. 76). In addition, 2019 data quality was optimised, resulting in retroactive­adjustments. The following data categories (topic-sepcific GRI disclosures) were significantly changed as a c­ onsequence of addedsites and ­adjustments: materials (301-1), energy intensity (302-3), water withdrawal (303-3), greenhouse gas intensity (305-4),
effluents and waste (306-2).
Per capita figures refer to headcount per end of year at relevant sites only.

2019 12019 1

236.8

61%

2020

2020

218.8

−8 %
1

Figures include new sites as of 2019.

66%

+8 %

78
GRI disclosure 102 – 48

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Environment

Environmental key performance indicators(as per 27 January 2021)

EnergyElectricity

Heating

Emissions

GHG emissions

Performance indicator

Unit

2020

2019 1

Consumption3MWh

45 09745 507

Per capita2

MWh/employee

11.0

10.3

Total heating energy

MWh

6 521

6 781

– Fossil fuels

MWh

5 449

5 421

– District heat

MWh

1 072

1 359

Total heating energy
per capita2

MWh/employee

1.6

1.5

Total emissions

tons CO2e

10 471

10 721– Direct (Scope 1)

Water

Waste

2020 Annual Report
Straumann Group

2
3
4
5
6

7

Heating energy

(MWh)

(MWh)
2019 145 5072020

45 097

−1 %

−4 %

1 136

1 185

CO2e emissions

Refusetons CO2e

9 335

9 536

(tons)(tons)

Total emissions per capita 2

tons CO2e/employee

2.6

2.4

Consumptionm

80 37975 527

Per capita2

m3/employee

19.6

17.1

Untreated
waste water

Disposal

m3

100

300

Diverse waste

Hydroxide sludge

tons

13.2

17.9

Contaminated material

tons

51

91

Solvents

tons

8.1

25.5

Total refuse

tons

1 013

1 008

Per capita

kg/employee

247

228

Water

7

2

3

New sites were included as of 2019 (see also p. 76). In addition, 2019 data quality was o­ ptimised, resulting in retroactive­ djustments. The following data categories (disclosures) were significantly changed as a c­ onsequence of added sites anda­adjustments: materials (301-1), energy intensity (302-3), water withdrawal (303-3), greenhouse gas intensity (305-4), effluentsand waste (306-2).
Per capita figures refer to headcount per end of year at relevant sites only.
Includes 61 MWh (2019: 265 MWh) diesel consumption for electricity generation.
Scope 1 emissions comprise greenhouse gases emitted by sources owned or controlled by the Group, such as heating units.
Scope 2 emissions comprise greenhouse gases emitted in the production of electricity and district heat the Group consumes.
Greenhouse gas emissions associated with electricity consumption of 9097 t CO2e (2019: 9235 t CO2e) were calculated according
to the location-based approach, as defined in the GHG Protocol Scope 2 Standard. Results are used as a proxy for the market-based
approach.
Water was withdrawn from the following sources: municipal water supplies (freshwater) = 57 979 m³ (2019: 55 874 m³),
­groundwater (freshwater) = 22 400 m³ (2019: 19 653 m³).

6 521

6 781

tons CO2e

4

20202019 1– Indirect (Scope 2) 5,6

Refuse1Electricity consumption

2019 12019 1

10 721

1 008
2020

2020

1 013

10 471−2 %1Figures include new sites as of 2019.

0%79
GRI disclosure 102 – 48

HIGHLIGHTSCORPORATE
GOVERNANCE
Principles

81

Group structure and shareholders 81
Capital structure82

Board of directors ofStraumann Holding AG

83

Information and control
instruments vis-à-vis theexecutive management

92

Executive management board

93

Shareholders’ participationrights104

Changes of control anddefense measures

105

External auditors

105

Information policy

106#

TOGETHERSTRONG

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Principles

PRINCIPLES
The principles and rules of the Straumann Group’s
corporate governance are laid down in the Articles
of Association, the Organizational Regulations
including the charters of the Board Committees,
the Code of Conduct and various internal policies,
e.g. on quality, IT, internal information and suppliers as well as employee regulations. They are thebasis of the Group’s 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.

Name

Straumann Holding AG

DomicilePeter Merian-Weg 12, 4052 Basel, Switzerland

Listed on

SIX Swiss Exchange

Valor number

1228 007

ISIN

CH 0012 280 076

Ticker symbol

STMN

LEI number

50670046ML5FIM60Z37

MarketCapitalization

CHF 16.4bn

Straumann Group

2020 Annual Report

GROUP STRUCTURE AND SHAREHOLDERSThe Straumann Group is headquartered in Basel.
Its products and services are sold in more than 100
countries through its various distribution subsidiaries and through third-party distributors (see worldwide locations). The subsidiary management is
responsible for managing the local daily business.
As laid down in the Organizational Regulations, therespective Regional Sales Head, the CFO and theChief Legal Officer are usually members of thesupervisory body of the subsidiaries. Details of theGroup’s business segments can be found in Note
3.1 of the Audited Consolidated Financial Statements on p. 143 ff.
LISTED COMPANIESStraumann Holding AG, the ultimate parent company of the Group, is listed in the main segment of
the Swiss stock exchange. No other company of theGroup is listed on a stock exchange.

NON-LISTED GROUP COMPANIESThe Group has partnered with and invested in a
number of companies to support its strategic
ambition of becoming a total solution provider inesthetic dentistry and targeting unexploited
growth markets and segments. A list of the­subsidiaries, associates and joint ventures of the­Straumann Group as of 31 December 2020 can befound in Note 9.5 of the audited consolidated
financial statements on p. 170 f.
SIGNIFICANT SHAREHOLDERS
The major shareholders on 31 December 2020 are
listed in the table on the following page, which isbased on shareholdings recorded in the share register and notifications on the SIX Swiss Exchange
online reporting platform. In 2020, the Group
reported the following transaction according toArt. 20 of the Federal Act on Stock Exchanges andSecurities Trading (Stock Exchange Act, SESTA):

The sale of shares by the Capital Group Companies,
Inc., Los Angeles, California, USA, reducing its­holding to less than 3%. Details of the transaction
were published on the SIX Swiss Exchange online
reporting platform.
CROSS-SHAREHOLDINGSThe Group does not have, and has not entered into,
any cross-shareholdings with other companies
relating to equity or voting rights.

81

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Capital Structure

CAPITAL STRUCTURE
In April 2020, 27 840 conditional shares were­converted into ordinary shares. There have been no
further changes in the share capital in the past
three years. On 31 December 2020, the share­capital was composed of:• 15 906 824 registered shares, fully paid in, eachwith a nominal value of CHF 0.10
• Conditional capital of CHF 25 612, divided into
256 115 conditional shares, each with a nominal
value of CHF 0.10, which relates to 1.61% of theexisting share capital.

Straumann Group

2020 Annual Report

The Group’s conditional share capital is approved
for an unlimited period for use in employee equity
participation plans (see Compensation Reportp. 113 and Note 8.3 of the Financial Report on
p. 166 f.). Straumann Holding AG has no authorizedshare capital and no category of shares other thanregistered shares. There are no restrictions on thetransferability of the shares.
The Group has not issued any financial instruments(participation certificates, dividend-right certificates, warrants, options or other securities granting rights to Straumann shares) other than the­Performance Share Units granted to certain
employees as a compensation component (seep. 115 f. for details), and a CHF 280 million domestic straight bond issued in 2020 and due on 3 October 2023 and a CHF 200 million domestic straightbond issued in 2020 and due on 3 October 2025
(see Note 7.2 on p. 157 f. for details).

Capital structure

Shareholdings on 31 December 2020

in CHF 1 000

by segment in %31 Dec2020

31 Dec2019

31 Dec2018

Equity1 209 943

1 367 222

1 204 320

Reserves(333 346)(194 447)(157 503)

Retained earnings

15 36 490

1 556 272

1 356 839

Non-controllingintererests

5 209

3 809

3 396

Ordinary share capital(fully paid in)

1 591

1 588

1 588

Conditional share capital

26

28

28

Authorized share capital

0

0

0

Number ofregistered shares

15 906 824 15 878 984 15 878 984

Treasury shares(% of total)

0.09%

0.09%

0.29%

Nominal value
per share (in CHF)

0.10

0.10

0.10

Registration restrictions

None

None

Voting restrictions/Voting privileges

None

Opting-out, opting-up

None

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

28.5
34.8

9.1
20.3

7.3

Major shareholdersin %31 Dec20201

31 Dec20191

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

16.9

16.9

None

Dr h.c. Rudolf Maag

11.2

11.5

None

None

BlackRock Inc. (concern)2

7.3

7.3

None

None

Simone Maag de Moura Cunha

3.7

3.7

3.0

3.0

n/a

3.0

42.1

45.4

Gabriella Straumann
The Capital Group Companies, Inc.
TOTAL

2

1	Or at last reported date if shareholdings are not registered in theshare register.
2	Not or only partially registered in the share register.

82

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

BOARD OF DIRECTORS OF STRAUMANN HOLDING AG
GILBERT ACHERMANN
Non-executive member
Swiss (born 1964)
Chairman of the Board since 2010, Board Member
since 2009
Other main activities in 2020: Member of theBoard of Julius Bär Group (Nomination and Compensation Committee), Vifor Pharma (Audit Committee Chair), Ypsomed (Compensation Committee), Swiss Medtech Association, Basel Chamber ofCommerce (HKBB), International Team for Implantology (ITI) 1, Basel, Supervisory Board Member of
IMD (Audit Committee Chair), Lausanne.
Career highlights: From 2002 to 2010, he was CEOof Straumann, which he joined as CFO in 1998.
Later he served as Chairman and Co-CEO of theStraumann Group

2020 Annual Report

DR H.C. THOMAS STRAUMANN
Non-executive member
Swiss (born 1963)
Member of the Board, Member of the Technology& Innovation Committee, Board Member
since 1990
Other main activities in 2020: Board memberships:
Centervision AG (Chairman), CSI Basel Horse Event
AG (Chairman), Medartis AG (Chairman) and Grand
Hotel Les Trois Rois, Basel (owner and Board
member).
Career highlights: Thomas Straumann was responsible for establishing the new Institut Straumann AG
in 1990 and was both CEO (–1994) and Chairman(–2002). Further examples of his success as an entrepreneur and businessman are the medical devicecompany Medartis AG, of which he is the founder,

majority owner and Chairman; the Grand Hotel Les
Trois Rois, Basel, of which he is the owner and a
Board Member and the equestrian event company
CSI Basel AG, of which he is Chairman. He has adiverse portfolio of interests, including not-for-profit
activities.
Qualifications: Trained in precision engineering;studies at Basel Management School and the­Management & Commercial School of Baselland;honorary doctorate from the Medical Faculty of
the University of Basel.
Key attributes for the Board: Major shareholder ofStraumann Holding AG and the Board’s longestserving member. He complements the Board with
his understanding of the dental and medical device
industries through personal management experience and various shareholdings.

Vitra Group, a family-owned furniture and retailcompany; Chairman of the Siegfried Group, a listed
pharma service company, and Vice Chairman of theMoser Group, a privately owned luxury watchmaking company. He started his professional life at
UBS in Investment Banking in 1988.
Qualifications: Executive MBA from IMD;
­Bachelor’s degree from the University of Applied
Science (HWV) in St. Gallen.
Key attributes for the Board: Mr Achermann represents continuity, stability and credibility among thevarious stakeholders. The Board benefits from his
extensive knowledge of the dental industry as wellas the deep experience and insight gained fromdirectorships in other industries.
1

For relationship to Straumann see Note 9.4 on p. 169.

83

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

MONIQUE BOURQUIN
Non-executive member
Swiss (born 1966)
Member of the Audit & Risk Committee and the
Human Resources & Compensation Committee,
Board Member since 2017
Other main activities in 2020: Member of theBoards of Emmi AG, Kambly Holding AG, Weleda
AG. President of Promarca (Swiss branded goods
association), Board Member of GfM (Swiss marketing association), Member of the Board of trusteesof Swisscontact (NGO), lectures in the Executive
MAS program of the Swiss Federal Institute ofTechnology (ETH), Zurich.
Career highlights: Having worked with PWC, ­Rivellaand Mövenpick, Monique Bourquin joined Unileverin 2002. After four years as a Country Manager
from 2008 to 2012, she became CFO for the GASStraumann Group

2020 Annual Report

DR SEBASTIAN BURCKHARDT
Non-executive member
Swiss (born 1954)
Member of the Audit & Risk Committee, Board
Member since 2002
Other main activities in 2020: Partner at Vischer
AG, Law firm in Basel, Zurich and Geneva, Memberof the Boards of Dolder AG, Grether AG, Jungbunz­
lauer Holding AG and persona service AG.
Career highlights: After a year with Davis Polk &Wardwell in New York in 1985, Sebastian Burckhardt joined Gloor Schiess & Partners, a predecessor firm of Vischer AG, where he advises family
owned businesses in the life sciences, banking anddistribution fields.

Qualifications: Studies in Economics and Law; PhD
in Law from Basel University; admitted to the Barof Switzerland; Civil law notary in Basel; admitted
to the New York Bar following studies at New York
University School of Law.
Key attributes for the Board: Dr Burckhardt is anindependent specialist in corporate and commercial law and in mergers, acquisitions, joint ­ventures,
licensing, distribution and technology agreements.
His knowledge includes many years of experienceon corporate boards.

region from 2012 to 2016. She also held board
mandates in Promarca, various Unilever internal
companies and two Unilever pension funds.
Qualifications: Degree in economics and financefrom St. Gallen University.
Key attributes for the Board: In addition to herboard experience in other companies, Monique
Bourquin has a strong track record in general management, finance, marketing, distribution and leadership gained from her career in the international
consumer goods industry.
Monique Bourquin has decided not to stand for­re-election to the Board at the 2021 AGM.

84

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

MARCO GADOLA
Non-executive member
Swiss (born 1963)
Chair of the Technology & Innovation Committee,
Board Member since 2020
Other main activities in 2020: Chairman of theBoards of DKSH Holding AG and WS Audiology Ltd,
Vice Chairman of the Calida Group, Board memberof Medartis, Tally Weijl, Thommen Group and
AVAG. He also runs his own company focusing on
cultural transformation support and executive
coaching.
Career highlights: During his tenure as CEO from2013 to 2019, the Straumann Group doubled its
revenue, more than doubled its profits and morethan tripled its workforce. He rejoined Straumann
in 2013 as CEO, having previously served as CFO
and EVP Operations from 2006 to 2008. He spent
the interim years at Panalpina, as CFO and Regional

Straumann Group

2020 Annual Report

JUAN JOSÉ GONZALEZ
Non-executive member
Peruvian/US citizen (born 1972)
Member of the Technology & Innovation­Committee, Board member since 2019
Other main activities in 2020: Chief Executive­O fficer at Ambu.
Career highlights: Before joining Ambu, Juan José
Gonzalez served as President of Johnson & Johnson’s orthopedic business, DePuy Synthes, in the
US and as Chair of the Orthopedics Sector of
AdvaMed in the US. Prior to this, he headed DePuy
Synthes EMEA and was Vice President of J&J’s
Enterprise Program Office. Previously, he has held
positions in global/regional management in J&J’s
consumer health business. He joined J&J in 2007

having worked for Pfizer, McKinsey and Procter &Gamble across various continents.
Qualifications: MBA from Notre Dame University,
USA; Master’s Degree in Technology Managementfrom Columbia University, New York, USA; Bachelor’s Degree in Industrial Engineering from Lima
University, Peru.
Key attributes for the Board: Mr Gonzalez is anexpert in the medtech and consumer-health­sectors with a deep knowledge of global markets,
healthcare systems and technology. He has multinational experience and is skilled in strategy,­execution, talent development and mentoring.

CEO Asia/Pacific. Prior to his first term at­Straumann, he spent five years at Hero, where he
was CFO and responsible for IT and Operations.
Previously, he spent nine years at Hilti in seniorcommercial, sales and finance positions. ­Earlier in
his career, he worked for Sandoz International Ltd,as an Audit Manager and Swiss Bank Corporationin Corporate Finance.
Qualifications: Degree from Basel University inbusiness administration and economics; various
programs at the London School of Economics, IMD
in Lausanne and INSEAD in Paris.
Key attributes for the Board: Having served many
years as CEO and formerly as CFO of Straumann,
Marco Gadola, has in depth knowledge of the­company, the industry and its competitors. Marcoalso brings a wealth of experience from other­companies and industries and has worked in manydifferent geographies around the world all ofwhich is highly valuable.

85

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

DR BEAT LÜTHI
Non-executive member
Swiss (born 1962)
Chair of the Human Resource & Compensation
Committee, Board Member since 2010
Other main activities in 2020: CEO and co-owner of
CTC Analytics AG, Zwingen, Member of the Boardsof Inficon Holding AG (Chairman) and Apaco AG.
Career highlights: Beat Lüthi began his career with
Zellweger Uster AG, a leading manufacturer ofquality 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. He joined the Feintool Group in1998 and was its CEO for four years. In 2003, hereturned to Mettler-Toledo as CEO of the Laboratory Division. At the end of 2007, he joined CTC

Straumann Group

2020 Annual Report

REGULA WALLIMANN
Non-executive member
Swiss (born 1967)
Chair of the Audit & Risk Committee, Member ofthe Human Resources & Compensation Committee
Board Member since 2017
Other main activities in 2020: Member of theBoards of Adecco Group AG (Audit Committee
Chair), Helvetia Holding AG, Swissgrid AG (Finance& Audit Committee Chair); Supervisory Board
Member of the Institute for Accounting, Control
and Auditing at St. Gallen University.
Career highlights: Regula Wallimann worked for
KPMG from 1993 to 2017. As a Global Lead Partnerfrom 2003 on, she was responsible for several
global companies. She was a member of the­strategic partners committee of KPMG Switzerlandfrom 2012 to 2014. In 2017, she started a new

career as an independent financial expert andboard member.
Qualifications: Degree in Business Administration,
Economics and Accounting from St. Gallen University,
management studies at INSEAD, Certified Public
Accountant in the US and in Switzerland.
Key attributes for the Board: Regula Wallimann
is an expert in multinational group auditing,­financial reporting, risk management and corporate governance.

Analytics to lead and further develop the company
as an entrepreneur.
Qualifications: PhD in Engineering from the Swiss
Federal Institute of Technology (ETH), Zurich, executive program at INSEAD.
Key attributes for the Board: Beat Lüthi combines
entrepreneurship and corporate experience in­different industries, which make him a valuable contributor to strategic and operational matters. Hisscientific background and experience as a CEO,
Chairman and Board member are of further benefit.

86

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

Board of Directors – Competence matrix
Executive
experience

Finance,Compliance,
audit, risk
regulatory,
management legal

Capitalmarkets,
M&A

Core industry Transferable
experience
expertise in(dental)relatedindustries

International Digitalization, Strategy,
business
technology
business
experiencetransfor­mationHR,
Board
compensation governance

Sustainability

G. Achermann
T. Straumann
M. Bourquin
S. Burckhardt
M. Gadola
J.J. Gonzalez
B. Lüthi

Straumann Group

2020 Annual Report

R. Wallimann

The Board comprised eight non-executive members in 2020. Having served on the Board since2010 and most recently as ­Chairman of the Compensation Committee, Ulrich Loser decided not tostand for re-election in 2020. The company would
like to thank him sincerely for his many contributions over the years and wishes him all best for the
future. To fill the gap left by his departure, Marco
Gadola was elected to the Board at the 2020
­General Shareholders Meeting. Apart from this, thecomposition of the Board of Directors remained
unchanged in 2020.
The Directors are all Swiss citizens with the exception of Juan José Gonzalez, who has Peruvian andUS citizenship. The average age of the Board­Members at year-end was 56.
ELECTIONS AND TERM OF OFFICE
The members of the Board, the Chairman, and themembers of the Human Resources & Compensation Committee 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 or a position in the
Human Resources & Compensation Committee
falls vacant, the Board appoints a replacementfrom among its own members for the remaining
term of office.
At the 2020 AGM, all of the existing Board members
standing for re-election and the Chairman were reelected and Marco Gadola was elected as new
Board member. Monique Bourquin, Beat Lüthi andRegula Wallimann were elected to the Human
Resources & Compensation Committee. Following
the AGM, the Board appointed Beat Lüthi as its Vice
Chairman, and Monique Bourquin, Sebastian Burckhardt and Regula Wallimann as members of the
Audit & Risk Committee, and Marco Gadola, Juan
José Gonzalez, Beat Lüthi and Thomas S­ traumann asmembers of the Technology & ­Innovation Committee. Regula Wallimann, Beat Lüthi and Marco Gadolawere appointed to chair the Audit & Risk, Human
Resources & Compensation and Technology & Innovation Committees, respectively.
INDEPENDENCE OF BOARD MEMBERS
Mr Gadola served as the Group’s CEO until the end of
2019. None of the other current members has been amember of the Executive Management of any of theGroup’s companies during the past three years nor had
any significant business connections with S­ traumann
Holding AG or any of its subsidiaries in 2020.
Petra Rumpf will be nominated for election to
Board of Directors at the AGM in April 2021, allowing Straumann to continue benefitting from her
insights, network and expertise (see p. 91). She
served as a member of the Group’s Executive Management until the end of 2020. Her election would
add a second member to the Board who has served
as an executive of the Straumann Group during thepast three years. For details on her other board
mandates see p. 102.

87

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

Straumann Board of Directors – Memberships in other Boards
MemberCommercial enterprise

Gilbert Achermann

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

Other entities/Charities
1

Ypsomed 1
Vifor Pharma

Thomas Straumann

1

Straumann Group

2020 Annual Report

Sebastian Burckhardt

FunctionCH

Board member

CH

Board member

CH

Board member

International Institute for Management Development (IMD) CH

Supervisory Board member

Basel Chamber of CommerceCH

Board member

International Team for Implantology (ITI)CH

Board member

Swiss Medtech

CH

Board member

Centervison AG

CH

Chairman

CSI Basel Horse Event AG

CH

ChairmanGrand Hotel Les Trois RoisCH

Board member

Medartis Holding AG & Medartis Group companies

CH

Chairman

Emmi AG1

Monique Bourquin

LocationCH

Board member

Kambly Holding AG/Kambly SA Spécialités de biscuits suisses

CH

Board member

Swisscontact

CH

Board member

Weleda AG

CH

Board member

Swiss Board Institute

CH

Adivsory Board member

Promarca Schweizerischer Markenartikelverband(Swiss branded goods association)

CH

Chairwoman

GfM Schweizerische Gesellschaft für Marketing(Swiss marketing association)CH

Board member

Amsler Tex AG

CH

Board member

Applied Chemicals International Group AG & group companies

CH

Board member

Dolder AG

CH

Board member

Grether AG & Gretherpark AG & Grether 3 AGCH

Board member

Immobiliengesellschaft zum Rheinfels AG

CH

ChairmanJungbunzlauer Holding AG

CH

Board member

persona service AG & personal service GmbH SchweizCH

Board member

CH

Board member

1

Fondation Bénina

88

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

MemberCommercial enterprise

Beat Lüthi

Location

Function

APACO AGCH

Board member

CTC Analytics AG

CH

CEO & Board member

INFICON Holding AG
Marco Gadola

Regula Wallimann

Other entities/Charities

CH

Chairman

DKSH 1CH

ChairmanCalida1CH

Vice-Chairman

Medartis 1

CH

Board member

Tally Weijl

CH

Board member

AVAG

CH

Board member

WS Audiology Ltd.

DK

ChairmanThommen GroupCH

Board member

Schweizerische Management Gesellschaft

CH

Advisory Board member

Swiss American Chamber of Commerce

CH

Advisory Board member

CH

Board member

CH

Board member

CH

Board member

CH

Supervisory Board member

1

Adecco Group AG

1

Helvetia Holding AG

1

Swissgrid AG
University of St. Gallen, Institute of Accounting,Control and Auditiing (ACA-HSG)

Straumann Group

2020 Annual Report1

Publicly listed companies.

89

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Board of Directors

OTHER ACTIVITIES AND VESTED INTERESTS
Unless stated in their CVs or in the table above,none of the Directors:• Performed any activities in governing or supervisory bodies of significant foreign or domesticorganizations, institutions or foundations under
private or public law• Held any permanent management or consultancy
position for significant domestic or foreign­interest groups• Held any official function or political post.
PERMITTED MANDATES OUTSIDE STRAUMANN(PURSUANT TO ART. 12 OAEC)Art. 4.4 of Straumann’s Articles of Association
states that no member of the Board 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) in­commercial enterprises, of which no more than
five may be in listed companies.

Straumann Group

2020 Annual Report

The following are exempt from these restrictions:• Mandates in enterprises that are controlled by
the Group• Mandates in enterprises that are performed at
the instruction of the Group• Mandates in associations, organizations and legal
entities with a public or charitable purpose, andin foundations, trusts, and employee pension
funds. 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 are
deemed as one mandate.

WORKING METHODS AND ALLOCATION OF TASKSThe Board of Directors meets for one-day meetings
at least five times a year and as often as business
requires. In 2020, the full Board held 6 meetings and5 telephone conferences and made 3 circular resolutions. The Audit & Risk Committee held 7 meetingsand 1 telephone conference, the Human Resources& Compensation Committee met 7 times each andthe Technology & Innovation Committee met once.
(see table on p. 91). The CEO and CFO generally participate in Board meetings and are occasionally supported by other members of the Executive Management Board (EMB). Dr Andreas Meier, Chief Legal
Officer of the Group, is responsible for the minutes.
The Board of Directors consults external experts on
specific topics where necessary.
The Board conducts an annual evaluation of theperformance of the EMB. It also provides mentoring to the EMB, with the aim of providing executives with an experienced sparring partner, coachand sounding board for testing ideas and seeking
qualified independent opinions.
The Board of Directors has a quorum if a majorityof its members is present. This does not apply toresolutions that require public notarization, which
do not require a quorum. Valid resolutions requirea majority of the votes cast. In the event of a tie,
the Chairman of the meeting has the decisive vote.
The Board is responsible for the overall strategic
direction of the Group and its management, thesupervision of the EMB and financial control.
It reviews the company’s objectives and identifies
opportunities and risks. In addition, it appoints/
dismisses the CEO and members of the EMB.
The tasks and duties of the Board, as well as
those of the Chairperson and Vice Chairperson,
are listed in sections 4.2 and 4.3 of the Organizational Regulations.

COMMITTEES OF THE BOARD OF DIRECTORSThe Board of Directors has an Audit & Risk
­Committee, a Human Resources & Compensation
Committee and, a Technology & Innovation­Committee, each consisting of no fewer than
three Board members with relevant backgroundand experience.
Board CommitteesAudit &
Human
Technology
Risk
Resources && Innovation
Committee Compensation Committee
Committee
G. Achermann
Chairman
Dr h.c. T. Straumann
Vice Chairman

MemberM. Bourquin

MemberDr S. Burckhardt

MemberMember

M. Gadola

Chair

J. J. Gonzalez

MemberDr B. Lüthi
R. Wallimann

Chair
Chair

MemberMember90

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Technology &Innovation
Committee

TOTAL DAYS

Board of Directors

AUDIT & RISK COMMITTEE
Members: Regula Wallimann (Chair), Monique
Bourquin and Dr Sebastian Burckhardt
HUMAN RESOURCES &COMPENSATION COMMITTEE
Members: Dr Beat Lüthi (Chair), Monique Bourquin,
Regula Wallimann
TECHNOLOGY & INNOVATION COMMITTEE
Members: Marco Gadola (Chair), Dr Beat Lüthi,Juan José Gonzalez, Dr h.c. Thomas Straumann

Straumann Group

2020 Annual Report

The members of the Human Resources & Compensation Committee are elected by the General
Meeting for a term of one year. In the event of avacancy in the Human Resources & Compensation
Committee, the Board of Directors appoints thereplacement from among its own members for theremaining term of office. The members and thechairpersons of both the Audit & Risk Committee
and the Technology & Innovation Committee areappointed by the Board of Directors. The Human
Resources & Compensation Committee
constitutes itself.
The tasks of each of these committees are listed intheir respective charters, which are attached to theOrganizational Regulations. The Board of Directors
may establish further committees or appoint individual members for specific tasks.

Time (days) spent by Directors at Board/Committee meetings and on company related matters2020 Meetings

Board(incl. 5 Telco, 3 Board
Resolutions)Audit & Risk Human Resources &Committee
Compensation(incl. 1 Telco)
Committee

G. Achermann

13

8

7

1

70

T. Straumann

12

–

2

1

8

M. Bourquin

13

8

7

–

20

S. Burckhardt

13

8

–

–

19

M. Gadola

9

–

–

1

8

J.J. Gonzalez

13

–

–

1

10

B. Lüthi

13

–

6

1

15

R. Wallimann

13

8

5

–

35

ASSIGNMENT OF RESPONSIBILITIES TO THE­EXECUTIVE MANAGEMENT BOARD
The Board of Directors has delegated responsibility
for the operational management and sustainable
development of the Group to the Chief Executive
Officer (CEO) and the other members of the EMB.
For their specific responsibilities, see the chart on
p. 100 and section 5 of the Organizational Regulations. The Board may revoke delegated duties at
any time.
The Board of Directors has not delegated any­management tasks to companies or persons­outside the Group.

PROPOSED NEW BOARD MEMBERAt the Annual General Meeting of the shareholders
on 9 April 2021, the Board of Directors will propose
the election of Petra Rumpf as a new Board­Member. Her track record as a member of the­Executive Management Board of the StraumannGroup and her qualifications are presented in her
CV on p. 102. Her other activities in 2021 include
memberships of the Boards of LimaCorporate in
Italy, V-Zug Holding in Switzerland and Unilabs
in Switzerland. Her key attributes for the Board
include: extensive knowledge of the dental­industry and the Straumann Group, a broad­network and strong digital expertise.

91

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Control Instruments

INFORMATION AND CONTROL INSTRUMENTS
VIS-À-VIS THE EXECUTIVE MANAGEMENTMANAGEMENT INFORMATION SYSTEMThe 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 theBoard of Directors as a monthly summary and indetail on a quarterly basis.

Straumann Group

2020 Annual Report

Straumann operates a state-of-the-art SAP enterprise resource planning system, which covers 90%
of all business transactions of the Group’s fully
consolidated entities. The system links Group
headquarters directly with all major subsidiarycompanies and production sites, including
ClearCorrect which switched to SAP on 1 January
2021. Anthogyr, Turkey and Russia are due to­follow early in 2022. This system greatly reduces
the potential for error or fraud, and enables the
Executive and Senior Management to monitor local­processes and related figures directly, in detail andin real time.
In addition, the Board of Directors maintains close
contact with the Executive Management and u­ sually
gains first-hand information through workshops,­co-travel, site visits and participation in staff meetings. Unfortunately (but understandably) many of
the client-facing interactions, on-site visits and­co-travels were limited in 2020 due to COVID-19.

INTERNAL CONTROL SYSTEMThe Group’s Internal Control System (ICS) is a key
instrument for designing business processes,­measuring progress towards financial goals andaddressing potential financial issues before theyoccur. It also supports the design of business­processes in order to achieve the desired level of­control 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. To achieve this, dedicated control templates are used for each business process toaddress major risks. The templates are continuously improved.
In addition, each entity (sales affiliate, production
site or global function) has a designated, trained
person or team that is ultimately accountable forthe assessment undertaken and the decisions­arising from it. Clear benefits of the ICS include
enhanced segregation of duties, increased control
consciousness and higher awareness of potential
risks and their consequences.
The ICS program is coordinated by the Group CFO,
who meets with the external auditors on a regularbasis to discuss the status of internal control issues
and the status of remediation of control deficiencies. Internal controls are evaluated annually by theexternal auditors and by Internal Audit according
to an agreed program.

INTERNAL AUDITThe role of the Group’s Internal Audit function is toprovide independent assurance to the Board of
Directors that the key risks of the organization are
under control and to support Management inensuring compliance, operational efficiency andcontrol effectiveness across the Group.
A highly experienced team at KPMG in Basel complemented by local KPMG offices with specific local
language skills and expertise executes the Internal
Audit missions reporting to the Audit & Risk
­Committee. In 2020, two internal audits were­performed at local level according to the audit­program approved by the Audit & Risk Committeeof the Board of Directors.
CORPORATE RISK MANAGEMENT
The Board of Directors is responsible for the overall
supervision of risk management and uses the­Internal Audit function to this end. The Board hasdelegated the task of risk management to theChief Risk Officer (CRO), who is also the CFO.
Through its Audit & Risk 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 p. 49 ff.).

92

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

EXECUTIVE MANAGEMENT BOARD (as of 1 January 2021)
GUILLAUME DANIELLOT
French (born 1970)
Chief Executive Officer
Career highlights: Guillaume Daniellot’s career
began in hospital product management, initially atColoplast and then at B. Braun, as an international
business unit manager. He switched to the dental
industry in 2001, joining Dentsply France, where hebecame Sales & Marketing Director. He joined
Straumann in 2007 as Managing Director of­Straumann 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 Prosthetic­Laboratory Business Group, including global

Straumann Group

2020 Annual Report

DR PETER HACKEL
Swiss (born 1969)
Chief Financial Officer
Career highlights: Peter Hackel rejoined Straumann
as CFO in 2014 after three years at Oerlikon Industrial Group, where he was CFO of the global­segment Oerlikon Drive Systems. He first joined
Straumann in 2004 in a project management andbusiness development role and rose to become
Head of Group Controlling and member of the­Corporate Management Group. Prior to his firsttenure at Straumann, he spent three years at
Geistlich Biomaterials as Director of Marketing &Sales Orthopedics and two years at McKinsey &Company as a consultant.

Qualifications: PhD in Biochemistry and Molecular
Biology from the Swiss Federal Institute of Technology (ETH) in Zurich, studies in Business Administration at the University of Hagen in Germany.
Other activities: Member of the Board of Directorsof Georg Fischer AG, and Member of the Board of
the Swiss Association of Chief Finance Officers.

management of sales, marketing, product development, training and education. In both these roles,
he was a member of the Corporate Management
Group. He joined Straumann’s Executive Management Board in 2013 serving as Head Sales Western
Europe in 2013–16 and Head North America(2016–19). He took on his current role as CEO of
the Straumann Group on 1 January 2020.
Qualifications: Bachelor’s degree in Physics fromthe University of Dijon, Master’s in Marketingfrom FGE in Tours, Master’s in Business Administration from ESC European School of Management, Paris.
Other activities: Member of the Board of the ITI 1.
1	For relationship to Straumann see Note 9.4 on p. 169.

93

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management BoardWOLFGANG BECKER
German (born 1966)
Head Distributor and Emerging Markets EMEA (asof 2021 including Sales Central and Eastern Europe)
Career highlights: Wolfgang Becker began his­professional career at Straumann in 1986 and helda series of managerial positions of increasing
responsibility in the company’s German subsidiary,
becoming Head of Human Resources in 1991, Headof Marketing in 2000, and General Manager ofStraumann Germany in 2001. He served on Straumann’s Executive Committee as Head of Sales
Europe from 2005 to 2006. His responsibilities thenfocused on the company’s business in Central andEastern Europe and distributor markets. In 2013, herejoined the Group’s Executive Management Board
as Head Sales Central Europe & Distributors EMEA.

Straumann Group

2020 Annual Report

CAMILA FINZIBrazilian (born 1972)
Head Orthodontics Business Unit
Career highlights: Camila Finzi joined Straumann inJanuary 2020 from Alcon, the world’s largest eyecare device company, where she was responsible forthe Latin America and Caribbean Region. From 2004
to 2013, she worked for Alcon’s parent company,
Novartis, rising through managerial positions ofincreasing responsibility in Marketing and Sales tobusiness-unit and regional leadership. Prior to­joining Novartis, she spent four years at Pfizer,­initially in Finance and subsequently in senior­pharmaceutical product management. The first six
years of her career were in Finance at Cargill and
Arthur Andersen.

Qualifications: Bachelors’ degree in Economics
from Fundação Armando Álvares Penteado University, São Paulo; MBA from Fundação Dom CabralBusiness School; Executive Education program at
Harvard University.

Qualifications: Commercial Apprenticeship plus a
number of business school diplomas including thatof the St. Gallen Management Center.

94

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

HOLGER HADERER
German (born 1969)
Head Marketing & Education
Career highlights: Prior to joining the EMB in his­current role at the beginning of 2020, Holger
Haderer very successfully managed the Group’s­largest European business, in Germany, for three
years. He spent the previous seven years as Head
Marketing & Sales Western Europe, including an­ad-interim stint of 14 months as Country Managerof S­ traumann France. He joined Straumann in 2006
as Head of Marketing & Education in Germany andbecame Head of M
­ arket Management Dental
Labs in 2008. He began his career in 1991 at Sulzer­Medica in product m­ anagement, marketingand sales.

Straumann Group

2020 Annual Report

MARK JOHNSON
US citizen (born 1958)
Head Research, Development & Operations
Career highlights: Mark Johnson joined the­Straumann Group on 1 May 2020 from Epredia(a former division of Thermo Fisher Scientific that
was acquired by KKR in a carve-out transaction),where he was responsible for global operations
since 2016. He spent the previous 10 years with
Medtronic with responsibility for Operations andSupply Chain. From 2003 to 2006, he worked forPhilips Electronics Oral Healthcare (Sonicare), prior
to which he held senior managerial positions in
two manufacturing firms serving the medical
device and computer industries.

Qualifications: BSc in Mechanical Engineering fromthe University of Washington; graduated in theManagement Program at Foster School of Businessat the same university; Six Sigma Green Belt andCertified Lean Expert.

Qualifications: Degree in Economics from BadenWuerttemberg Cooperative State University(DHBW).

95

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

PATRICK LOH
Malaysian (born 1967)
Head Sales Asia/Pacific
Career highlights: Patrick Loh joined the StraumannGroup in his current role in 2017, having spent theprevious three years with Haemonetics Corporation,a global provider of blood/plasma supplies and­services, where he was President of the Asia/Pacificregion and a member of the Corporate Operating
Committee. His career spans thirty years in the
medical device and life science sectors with multinationals including Thermo Fisher Scientific, Kinetics
Concepts and B.Braun. Starting in product management, he rose through general country management to regional leadership, establishing a strong
track record of commercial success and strategic
business growth. He has spent most of his career
based in China and Hong Kong.

Straumann Group

2020 Annual Report

DIRK REZNIK
German/Swiss (born 1966)
Head Digital Business Unit
Career highlights: Dirk Reznik joined the­Straumann Group in 2020. He is an experienced
executive with a proven international track recordin electronic consumer products and digital ecosystems. He joined Straumann from the Vorwerk
Group, where he was CEO of its largest division,
Thermomix, for 9 years. Mr Reznik began his careerat Vorwerk in 1993 and progressed through positions of increasing responsibility in marketing,business development, country management anddivisional leadership.

Qualifications: Degree in Business Administrationfrom the University of Paderborn, CAS HSG­(Certified Director for Board Effectiveness) University of St. Gallen.
Other activities: Member of the Boards of Amor
Holding in Germany, Gilde Management Buyout in Switzerland, and Moguntia Food Groupin Switzerland.

Qualifications: Studies in marketing in Malaysia;
Executive MBA from Olin Business School, Washington University, USA; Executive Programs at
INSEAD, Singapore and Babson College, USA.
Other activities: Chairman of the Essence & DM
Dental Industry Investment Partnership, a private
equity fund addressing the dental sector in China.

96

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

ALASTAIR ROBERTSON
British (born 1960)
People Management & Development
Career highlights: Before taking on his current roleat Straumann in mid 2019, Alastair Robertson
served as Chief HR/People Officer and Member ofthe Executive Board in each of his three previous
companies: Kingfisher Plc (2016–19), C&A­(2014–16) and Panalpina (2007–14). In his last roleat Kingfisher he also held overall commercial
responsibility for their Spanish business, Brico
Depot. Prior to this, he spent 11 years with Tetra
Pak in senior HR positions and in line management,
and then in training and development with W.H.
Smith and Graham Builders Merchants in the UK.
He has considerable international experience, having lived and worked extensively on all continents.
He began his professional career in the British

Straumann Group

2020 Annual Report

AURELIO SAHAGUN
Spanish/US citizen (born 1973)
Head Sales North America (as of 2021)
Career highlights: Aurelio Sahagun joined­Straumann having most recently served as­President of the Orthopedics Division for the­multinational medtech firm Microport Scientific.
Before joining them in 2014, he spent seven years
at Wright Medical Technology in the Netherlands,­initially in finance and subsequently in senior sales
and regional management positions. Prior to his
medtech career, he spent six years in the financeand banking industry.

Qualifications: Bachelors’ degree in Economics
from the Autonomous University of Madrid, MBAfrom HEC School of Management in France.

Military Forces gaining his Officer’s Commission at
the Royal Military Academy Sandhurst before­serving in the Royal Engineers including in the­Falklands as Head of the Joint Services Bomb
­Disposal Unit.
Qualifications: MBA from Huddersfield University,
Commendation from IMD, Lausanne, Chartered­Fellow of the Institute of Personnel and Development (FCIPD).

97

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

MATTHIAS SCHUPP
German (born 1964)
Head Sales Latin America, CEO of Neodent
Career highlights: Matthias Schupp joined ­Straumannfrom Procter & Gamble in 2007 as Regional Manager,
Western Europe. In 2013, he was appointed Head of
Sales LATAM and joined the management of Neodent,of which he became CEO early in 2015. He joined
Straumann’s Executive Management Board at the
beginning of 2016. He began his career in marketingand customer service with Merck KGaA, the German
pharmaceutical, fine chemicals and diagnostics company, and rose through country management to theposition of Regional Manager Latin America and USA.
He moved to Wella in 2000 as Managing Director of
the business in Russia and became Managing Director
Professional Care Portugal in 2004, ­following theacquisition of Wella by P&G.

Straumann Group

2020 Annual Report

ROBERT WOOLLEY
US citizen (born 1976)
Head Sales Western Europe (as of 2021);
Head Sales North America (2020)
Career highlights: Robert Woolley joined
Straumann in fall 2019 and took over as Head Sales
North America. He moved to his current positionas Head Sales Western Europe at the beginning of
2021. Before joining Straumann, he headed the
ENT business unit of Stryker, a leading medical
technology company, which he joined in 2014 as
Managing Director and General Manager of the
Neurovascular business in EMEA. Between 2010
and 2014 he headed the European business unit of
TriVascular, a medical technology company specializing in vascular repair devices. Prior to this, hespent two years as Director of Business Development at Dow Healthcare and three years inmanagerial positions at Medtronic in M&A integration, marketing and sales. He began his career in2000 at Dow Chemical in Technical Sales &Account Management.
Qualifications: BSc in Mechanical Engineering from
Brigham Young University, MBA from Harvard­Business School.

Qualifications: Graduated from the German/­Brazilian High School in Rio de Janeiro; on-the-job
training in management and business administration
through professional development programs at
Merck and P&G.

98

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

As of 1 March 2021
RAHMA SAMOW
German (born 1979)
Head Dental Service Organizations

Straumann Group

2020 Annual Report

Career highlights: Rahma Samow joins Straumannfrom the global medical technology company­Siemens Healthineers, where she was Senior Vice
President, Global Head of Marketing, Sales & Communications at Digital Health Services. She began
her career at that company in 2006 and rosethrough a series of managerial positions withincreasing responsibility, including Head of Business Management Imaging IT Middle East & Africa,
and Vice President, Head of Global Sales, Digital
Health Services. Prior to joining Siemens

Healthineers, she worked for Parexel International,
a global clinical research organization and biopharmaceutical services company.
Qualifications: Diploma in Medical Radiology,­Radiation Therapy and Nuclear Medicine Technology from the Medical University of Bonn, Germany.

99

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

The CEO and, under his direction, the other EMB
members are responsible for the Group’s overallbusiness and day-to-day management. The EMB isalso responsible for the implementation of strategic decisions and stakeholder management. The
CEO reports to the Board regularly and wheneverextraordinary circumstances require. Each memberof the EMB is appointed and discharged by the
Board of Directors.

With effect of 20 January:• Camila Finzi joined from Alcon as Head Orthodontics Business Unit.

APPOINTMENTS AND CHANGESStraumann has invested significantly in career andpersonal development programs in recent years.

2021
The following EMB appointments became effective
on 1 January 2021:• Robert Woolley, former Head Sales North­America, was appointed Head Sales Western
Europe succeeding Jens Dexheimer, who left thecompany at the end of 2020.

2020
The following EMB appointments were made in
2020:
With effect of 1 January:• Guillaume Daniellot took over from Marco­Gadola as CEO of the Straumann Group.
• Holger Haderer, former Head of Straumann­Germany, was appointed Head Marketing and
Education succeeding Frank Hemm, who left thecompany at the end of 2019.

Straumann Group

2020 Annual Report• Dr Andreas Meier, Chief Legal Officer and Headof Business Development & Licensing.
• Dirk Reznik, who joined the company from
­Vorwerk, took over from Peter Zihla as Head
­Digital Business Unit (on 1 January 2020, Peter
Zihla took on a new role as Chief Information &Data Officer with responsibility for the new
ITDM unit).
• Robert Woolley, who joined the company from
Stryker in fall 2019, took over from Guillaume
Daniellot as Head Sales North America.

With effect of 1 October:• Mark Johnson, who joined the company from
Epredia, took over as Head Research, Development & Operations from Dr Gerhard Bauer who
retired at end of September.

• Aurelio Sahagun joined from Microport Scientifictaking over from Robert Woolley as Head Sales
North America.
The following EMB appointment takes effect on
1 March 2021:• Rahma Samow will join from Siemens Healthineers as Head DSO succeeding Petra Rumpf, wholeft the company at the end of 2020.
The Group announced the creation of a new EMB
role of Chief Information Officer, who will be
appointed in 2021.
The size of the EMB remained unchanged and comprised 14 members under the leadership of, andincluding, the CEO, Guillaume Daniellot.

Executive Management Board as of January 2021
CHIEF EXECUTIVE OFFICER
Guillaume Daniellot
SALES WESTERN EUROPE
Robert Woolley
SALES CENTRAL & E. EUROPE, MIDDLE EAST & AFRICA
Wolfgang Becker
SALES NORTH AMERICA
Aurello Sahagun
SALES ASIA/PACIFIC
Patrick Loh
SALES LATIN AMERICA & CEO NEODENTMatthias Schupp
DENTAL SERVICE ORGANIZATIONS
Rahma Samow (as of 1 March 2021)
CHIEF FINANCIAL OFFICERDr Peter Hackel
MARKETING & EDUCATION
Holger Haderer
OPERATIONS, RESEARCH & DEVELOPMENT
Mark Johnson
DIGITAL BUSINESS
Dirk Reznik
ORTHODONTICS
Camila Finzi
CHIEF INFORMATION OFFICER
to be announced
PEOPLE MANAGEMENT & DEVELOPMENT
Alastair Robertson

100

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

EXECUTIVE MANAGEMENT BOARD (former members in 2020)
DR GERHARD BAUER
German (born 1956)
Head Research, Development & Operations
Career highlights: Gerhard Bauer has spent morethan 30 years in the pharmaceutical and medical
device industry in various leadership positions.
Prior to joining Straumann in 2010, Dr Bauer held
managerial positions at Nextpharma, a specialist
company in the biotech industry, and at
Bausch&Lomb, a global leader in eye-care­products. From 1992 to 2008, his career at Bausch& Lomb was distinguished by increasing responsibility, including his appointment as Head of Global
Operations & Engineering and member of the
Executive Management Team in 2006. From 1984
to 1992, he worked for Ciba Vision, a subsidiary ofStraumann Group

2020 Annual ReportJENS DEXHEIMER
German (born 1966)
Head Sales Europe
Career highlights: Jens Dexheimer was responsible
for the Group’s European region and joined the
EMB in 2016 as Head of Western Europe. In­previous positions, he successfully managed­Straumann’s business in Germany and Iberia. He
moved to Straumann in 2010 from Wella/Procter &Gamble, which he joined in 1996 and where herose through various international roles of increasing responsibility culminating in country, divisionaland regional leadership. He began his career in the
consumer goods industry with Benckiser inGermany.

Qualifications: Degree in Economics from the State
Vocational Academy in Mannheim, Master’s inBusiness and Politics from Mainz University;­Executive Development Program at Kellogg University in Chicago.

Novartis. He began his career in production in 1983
at a subsidiary of the GlaxoSmithKline corporation.
Qualifications: PhD in Pharmaceutics from theInstitute of Pharmaceutics at the Ludwig-Maximilians-University in Munich; advanced degree in
Pharmaceutical Technology from the Bavarian
Chamber of Pharmacists.
Other activities: Member of the Boards of Swiss
Medtech and sitem-insel AG, Switzerland.

101

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Executive Management Board

DR ANDREAS MEIER
Swiss (born 1967)
Chief Legal Officer & Head Business Development
Career highlights: Andreas Meier joined Straumann
in 2005 as the Group’s Chief Legal and Chief Compliance Officer. He was assigned additional leadership responsibilities for Intellectual Property &Trademarks (since 2013), Business Development &Licensing as well as Corporate Communication(2018-2020). As of 2021 he will again fully concentrate on his role as Group Head of Legal, Compliance and IP Management and will continue to­participate in the EMB meetings in his capacity as
Chief Legal Officer. He also serves as a Secretary of
the Board of Directors of Straumann Holding AG(non-member). Prior to joining Straumann, Andreas
Meier worked for several years as an attorney with

Straumann Group

2020 Annual Report

PETRA RUMPF
German (born 1967)
Head Dental Service Organizations
Career highlights: Petra Rumpf joined Straumann
in 2015 as Executive Vice President, Head Instradent Management & Strategic Alliances andmoved into her current role in 2017. Before joining
Straumann, she worked for Nobel Biocare from2007 to 2014, where she served on the Executive
Committee and was responsible for Corporate
Development and M&A, global e-commerce, clinical training & education, and distributor businessdevelopment. During her last three years at Nobel
Biocare, she was also responsible for Alpha-Bio Tec.
She managed the successful initiation of the Foundation for Oral Rehabilitation (FOR), which is globally active in science, education and humanity.

Previously, she spent 16 years at Capgemini Consulting, where she became Vice President Strategy& Transformation Consulting.
Qualifications: Bachelor’s degree in Economics
from Trier University, MBA from Clark University,
USA.
Other activities: Member of the Board of LimaCorporate in Italy, V-Zug Holding in Switzerland andUnilabs in Switzerland.

the law firm Vischer in Zürich and Basel, as well as
Cravath Swaine & Moore in New York.
Qualifications: Attorney at Law, PhD in Law fromBasel University, LLM from NYU School of Law,
Advanced Management Program at Harvard Business School.
Other activities: Trustee of the Schönes Lächeln
Foundation, Switzerland.

102

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE
Executive Management Board

The company and the Board of Directors would liketo thank Gerhard Bauer, Jens Dexheimer andPetra Rumpf for their valuable contributions and­devotion to the Straumann Group over many years
and wishes them and their successors all the bestfor the future.
OTHER ACTIVITIES AND VESTED INTERESTS
Unless stated in their CVs, no member of the EMB:
• Performed any activities in governing or supervisory bodies of significant foreign or domesticorganizations, institutions or foundations under
private or public law• Held any permanent management or consultancy
function for significant domestic or foreign interest groups

Straumann Group

2020 Annual Report• Held any official function or political post.
PERMITTED MANDATES OUTSIDE STRAUMANN(PURSUANT TO ART. 12 OAEC)Art. 4.4 of Straumann’s Articles of Association
states that no member of the EMB may perform
more than five mandates (i.e. mandates in thehighest 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 two
may be in listed companies. The following are
exempt from these restrictions:• Mandates in enterprises that control the Group or
are controlled by the same
• Mandates in enterprises that are performed at
the instruction of the Group• Mandates in associations, organizations, and legal
entities with a public or charitable purpose, andin 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 are
deemed as one mandate.
MANAGEMENT CONTRACTSThe Board of Directors and the EMB have not­delegated any managerial powers to persons orcompanies outside the Group.
COMPENSATION, SHAREHOLDINGS AND LOANS
The compensation and equity holdings of theBoard of Directors and the EMB and their relatedparties are disclosed in the Compensation Reporton p. 107 ff. and in the audited financial statements in Notes 3.3 and 4 on p. 147 ff.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

103

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Participation rights

SHAREHOLDERS’ PARTICIPATION RIGHTS
Each share duly entered in the share register entitles the shareholder to one vote. On 31 December
2020, approximately 71.5% (2019: 72.9%) of theissued capital was registered in the share register.
All shareholders may be represented at the General
Meeting by a proxy. Proxies and directives issued
to the independent voting representative may be
given either in writing or online. Other voting representatives must have a proxy signed by hand by
the shareholder. The Board of Directors decides
whether proxies shall be recognized.

Straumann Group

2020 Annual Report

The independent voting representative is electedby the General Meeting for a term of office until
the end of the next AGM and can be re-elected. In
the case of a vacancy, the Board of Directors shalldesignate an independent voting representative
for the next General Meeting.
QUORUMSThe General Meeting adopts its resolutions andholds 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 stipulatea different majority are reserved.
CONVOCATION OF GENERAL MEETINGS,AGENDA PROPOSALSThe Shareholders’ General Meeting is convened by
the Board of Directors within six months of theend of the business year. The 2021 Meeting will beheld on 9 April without the Shareholders being
physically present.

Shareholders individually or jointly representing atleast 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.

Shareholdings on 31 December 2020
by geography in %28.5

Invitations to the General Meeting are issued inwriting and are delivered via ordinary mail to theaddress recorded in the share register at least 20
days before the General Meeting and are publishedon the company’s website. If shareholders agree tothe electronic delivery of notices, the invitation is
also sent by email. 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 theGeneral Meeting.
Shareholders who individually or jointly represent
shares with a par value of at least CHF 15 000 may
request that an item be included in the agenda. The
request shall be in writing at least 45 days before
the General Meeting and must set forth the agenda
items and the proposals of the shareholder(s).
ENTRIES IN THE SHARE REGISTER
Share purchasers are entered in the share registeras shareholders with voting rights if they expressly
declare that they have acquired the registeredshares in their own name and for their own
account. Purchasers who are not willing to makesuch declarations are registered as shareholders
without voting rights. Proof of acquisition of title
in the shares is a prerequisite for entry in the shareregister. Nominees approved by the Board of Directors are recorded in the share register as shareholders with voting rights. Nominees who have not

Switzerland
EuropeUSA
RoW
Non-registered &undisclosed

2.8

0.5

55.3

12.9

Shareholders by volume of shares held 1
absolute number

31 Dec 2020

31 Dec 2019

1–100 shares

13 297

10 528

101–1 000

2 437

2 349

1 001–10 000

339

308

10 001–100 000

5649

100 001–1 000 000

1091 000 001 and more2

3

16 141

13 246TOTAL
1

Non-registered shareholders are not considered in this table.

104

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Changes of control

been approved by the Board of Directors may berefused recognition as shareholders if they do notdisclose the beneficiary. In such cases, the nominees will be recorded in the share register as shareholders without voting rights. As of 31 December
2020, no nominee had asked for registration andvoting rights.

There are no statutory rules concerning deadlines
for entry in the share register. However, for organizational reasons, the share register is closed several
days before the General Meeting. The respective
cut-off date for inscriptions is announced in theinvitation to the General Meeting.

CHANGES OF CONTROL AND
DEFENSE MEASURESThe Articles of Association of Straumann Holding
AG do not contain provisions for opting out or­opting up. There are no change-of-control clauses
included in agreements and schemes benefiting

members of the Board of Directors or the­Executive Management Board or other­management staff.

Straumann Group

2020 Annual Report

EXTERNAL AUDITORSThe Shareholders’ General Meeting elects andappoints the Group’s external auditors on anannual basis. In April 2020, Ernst & Young AG,
Basel, was re-elected as auditor of Straumann
Holding AG for a seventh term of one year. The
auditor in charge is Daniel Zaugg, Swiss Certified
Public Accountant, who took over the mandate in2014. The current cycle for Daniel Zaugg finishes at
the upcoming General Meeting.
INFORMATION INSTRUMENTS PERTAINING
TO THE EXTERNAL AUDITThe Board of Directors supervises the external
auditors through the Audit & Risk Committee,
which met eight times in 2020. The external­ uditors participated in two of these meetings toadiscuss the scope, the audit plan and the auditors’
conclusion of the financial report. Details of the
instruments that assist the Board in obtaining
information on the activities of the external­auditors are on p. 92.
The worldwide fees paid to the auditors are­outlined in the table on the right.

Worldwide feesin CHF 1 000

31 Dec 2020

31 Dec 2019

Total audit fees

1 122

1 105

Tax consultancy

308

513

0

106

Transaction services
Other services

41

15

Total non-audit fees

349

634

TOTAL

1 471

1 739

105

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Information policy

INFORMATION POLICY

Straumann Group

2020 Annual Report

Straumann is committed to a policy of open, transparent and continuous information. In accordancewith the rules of the SIX Swiss Exchange, the Grouppublishes detailed sales figures on a quarterly basis
as well as annual and half-yearly reports. Detailed
information is provided at the AGM, and the minutes are published on the company’s website.
Where necessary or appropriate, the Group also
publishes additional information on significant
events. The CEO, CFO, the Heads of Investor Relations and Corporate Communication are responsible for communication with investors and representatives of the financial community, media andother external stakeholders.
In addition to personal contacts, discussions, andpresentations online, the Group held four quarterly
financial results online conferences for the media
and analysts in 2020. On average, each event
was attended by approximately 150 participants
by webcast or by conference call. In addition,­Straumann’s CEO, CFO and Head of Investor­Relations attended thirteen equity conferences
online as well as eighteen days in virtual roadshow
events to meet with investors. Beside the beforementioned events, top management was in very
close contact via video or audio calls with its investors during the peak of the first pandemic wave tokeep them up to date on the development.
As in the prior year, the company organized investor meetings focusing on corporate governancetopics with the Chairman and the Head of Human
Resources & Compensation Committee.

Research analysts from 18 banks/brokers cover­developments at the Straumann Group and arelisted online.
Apart from this, the Group frequently publishes
media releases, briefing documents and othermaterials, which are archived and available online.
The company offers a media release subscription
service via its website and takes care to ensure thatinvestor-relevant 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. The Groupadvises against relying on past publications for­current information.
ANNUAL REPORT & COMPENSATION REPORTThe Group’s Annual Report is an important instrument for communicating with various stakeholder
groups. It is published electronically in English on
the company’s website. In addition, printed­summaries in English and German are available
and are sent to registered shareholders. The Compensation Report is issued as part of the Annual
Report and can be downloaded here in English aswell as in German.

MEDIA USED FOR REPORTING PURPOSES
The company’s website is www.straumann-group.
com. The company’s journal of record is the Swiss
Official Gazette of Commerce SOGC (Schweizerisches Handelsamtsblatt SHAB).
Subscriptions to the e-mail distribution service(according to Art. 8 of the Directive Ad hoc Publicity, DAH) can be made here. Information according
to Art. 9 DAH can be found online.
Further information requests should be
addressed to:
CORPORATE COMMUNICATIONS:
corporate.communication@straumann.com
Tel. +41 61 965 11 11Peter Merian-Weg 12
CH-4002 BaselINVESTOR RELATIONS:
investor.relations@straumann.com
Tel. +41 61 965 16 78
Peter Merian-Weg 12
CH-4002 BaselCALENDAR
Straumann’s calendar of planned reporting dates is
updated on the company’s website.

106

COMPENSATIONREPORT
Letter from the Chairman of
the Human Resources &Compenstion Committee

108

Compensation governanceand regulation

110

Compensation principles

111

Group compensation framework 113
2020 compensation

118

Approval of compensation

121

Report of the statutory auditor
on the remuneration report

122

This report provides a comprehensive overview ofthe ­Straumann Group’s compensation principles,­practices and delivery framework. It also provides
information on the ­compensation of the general staff,
management, Executive Management Board (EMB)
and Board of Directors (BoD). It conforms to Swisslaw, the Swiss Code of Best Practice for Corporate­Governance as well as the SIX Directive on­Information relating to Corporate Governance.

#

TOGETHERSTRONG

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Letter from the Chairman

LETTER FROM THE CHAIRMAN OF THE HUMANRESOURCES & COMPENSATION COMMITTEE(HRCC)
DEAR SHAREHOLDER,
As Chair of the Human Resources and Compensation Committee, I am pleased to present the­Compensation Report 2020.

Straumann Group

2020 Annual Report2020 began with continued strong growth, areflection of our comprehensive succession planning that provided a seamless transition to the
new CEO and leadership team. Thanks to their outstanding leadership the company has weathered
the COVID crisis, adapted quickly ahead of its peers
and is poised to continue to rebound strongly.
The Group responded quickly to the rapid spread of
the pandemic by ensuring personnel safety andbusiness continuity. With the world shutting down
and business dropping an estimated 70% at thetime, we quickly had to align costs with the lower
revenues. We reduced working hours, non-criticalbenefits and salaries where possible, including­voluntary pay cuts by leadership. Capital investment plans were placed on hold and liquidity was
secured to ensure operational continuity. As­personnel makes up more than 50% of our costs,
we were unable to avoid resizing completely andhad to reduce our global workforce by approximately 660 jobs (roughly 9% of the global­workforce). A key objective was to conduct thisin a responsible, timely and fair manner,without c­ ompromising the company’s ability torebound rapidly.

Throughout this period the Board of Directors(BoD) and its Committees worked closely with the
Executive Management Board (EMB), increasing
the frequency of meetings to develop scenarios
and to address the impacts of the aforementioned
measures on our people, their compensation, andto provide support through challenging decisions.
The HRCC held two COVID-19 emergency meetings
as the crisis was unfolding, focused on the healthof our employees, short-time working, and othermeasures to maintain continuity.
To support and lead through the uncertainty surrounding the COVID-19 situation, in April leadership agreed to the following voluntary reductionsof their rewards packages:• BoD: 40% of their annual equity allocation• EMB: 25% of their fixed compensation for the
2nd quarter and a deferral of their 2019 bonus­payment until July 2020
• other senior management members voluntarily
reduced their compensation by 20% for the 2nd
quarter.
• removal or reduction of non-critical benefits inmany of our organizational units for various­periods during the year, most of which have been
reinstalled by year end.

VALUE CREATIONCULTUREPEOPLEINVEST

REWARD• Base &variable pay• Benefits• Work-life• Recognition• Career• Development

In the Group’s reward philosophy, people are rewarded for value­creation. The total reward includes quantitative (base & variable
pay and benefits) and qualitative (work-life and career development) ­elements.

108

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Letter from the Chairman

Straumann Group

2020 Annual Report

After the very sharp sales decline in Q2, we were
proud to see how quickly management and thestaff were able to return the Group back to a
growth track in Q3 and Q4. Although the turnaround was not enough to make up fully for thelost revenues earlier in the year, the company outperformed the market, gained customers, launchedinnovations, took entrepreneurial steps into newareas and created opportunities. This outstanding
performance is thanks to dedicated people who
deserve recognition, appreciation and reward. In
this extraordinary year, typical performance­measures can not directly reflect these incredible
efforts only through financial indicators. As aresult, the BoD will propose to the shareholders at
the 2021 AGM, that an 80% discretionary award bemade for the Executive Management Board (EMB)
for the 2020 performance year Short Term Incentive (STI). Moreover, globally, all eligible personnel
will receive a discretionary bonus at 80% of their
STI target in recognition of their exemplary­behavior, commitment and leadership in persevering through the crisis and beyond.
Company culture, opportunities, job enrichment,
security and competitive compensation are quintessential, which is why we constantly review,­challenge, benchmark and improve our rewards
system. In order to remain competitive with themarket and to further sustain the growth path that
our company has been paving over the past years,
to retain talent and to recognize long-term­performance and continuity in addition to aligning
management’s rewards with our shareholders’experiences, we awarded the long-term incentive
grants for 2020 in full.

LOOKING AHEAD
The key to bouncing forward and sustaining our
success is to ensure that our leadership is strategically focused and has the capabilities, resources
and incentives to drive and manage growth, which
is why we are expanding the company targets inthe short-term incentive plan to extend the focus
of a select group to deliver growth in areas such as
orthodontics, value brands and our digital markets.
In addition, we are continuing to capitalize on ourinternal expertise by connecting talent with opportunities and deploying people to areas that arepoised for growth.
Given the continuing uncertainty related to thepandemic, we do not anticipate major changes tothe framework or principles for compensation­during 2021.
On your behalf, I would like to thank every memberof our global team for their commitment andachievements. I would also like to express my­gratitude to the EMB for its constructive approachto the dialogue amid unprecedented circumstancesin 2020, as well as the Board of Directors and you,as shareholders, for your continued confidence andtrust in the HRCC.

Beat Lüthi
Chairman of the Human Resources &­Compensation Committee

We are expanding the company
targets in the short-term
incentive plan to extend thefocus of a select group to
deliver growth.

109

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT
Compensation governance

COMPENSATION GOVERNANCE
AND REGULATIONHUMAN RESOURCES & COMPENSATION­COMMITTEE (HRCC)
The Board of Directors nominates the members ofthe HRCC for election by the Annual General Meeting (AGM). The Committee is entrusted with thedesign of the compensation and benefits for the
Board of Directors and the Executive Management
Board (EMB), in addition to the review of the total
rewards framework for all employees. The Committee reports its views on the rewards and compensation of the EMB to the Board of Directors at least
once a year and proposes changes when necessary.
Further information on the duties of the
HRCC can be found on p. 91 of the Corporate­Governance section.

Straumann Group

2020 Annual Report

The HRCC met seven times in 2020 and all its
members were present. Constantly seeking abroader view, the Committee includes non-monetary components in its review. For instance, diversity inclusion and belonging initiatives, the cultural
journey and leadership programs, as well as otheractivities that contribute to people development,
talent management and other factors that lead tojob enrichment, are reviewed and discussed regularly. This provides a holistic basis for the Committee’s directional input related to people topics. Two
extraordinary additional meetings were held, one
in May and the other one in June to address the
pandemic, to approve and make recommendations
on the courses of action decided by the EMB.
The Chairman of the Board of Directors and theCEO participated in all the meetings as guests
except during discussions concerning the­evaluation and determination of their own
compensation.

Compensation
Recommendations & decisions
RecipientCompensation recommended byCompensation decided by

Chairman of the Board

Human Resources & Compensation Committee/Board of Directors

AGM

Board Members
CEO

Chairman of the Board/HRCC/Board of Directors

Executive Management

CEO/HRCC/Board of Directors

Senior Management

EMB

CEO

Management and staff

Line Management

EMB

FINANCIALREPORT

APPENDIX110

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Compensation governance

REGULATIONSThe Group’s compensation schemes for its executives and directors as well as its Articles of Association (AoA) fully reflect the Swiss Ordinance against
Excessive Compensation (OaEC). The AoA do notallow for loans, advances or credits to any current
or former members of the EMB, the Board of Directors, or related parties. In addition, notice periods
for the EMB are restricted to a maximum of 12months. The compensation schemes and AoA are
available to the public here.
AGREEMENTS WITH THE BOARD OF DIRECTORSAND THE EXECUTIVE MANAGEMENT BOARD
Agreements are concluded with members of theBoard of Directors regarding the compensation for

their mandate (members are elected for a term of
one year) and with members of the EMB regarding
their employment. Non-compete clauses are­permissible, and compensation may be paid as
indemnity where it is determined necessary. Insuch cases, the compensation must not exceed
the last annual total compensation paid to the­individual and may not be paid for more than one
year, as referenced in the AoA.
TERMINATION PROVISIONS
Variable compensation components are subject toforfeiture clauses that allow for partial or total forfeiture if the individual leaves the Group before thevesting date, subject to the Board of Directors’
assessment of the reasons for departure.

Further, the agreements with the members of theBoard of Directors as well as the EMB do not­contain any severance provisions from which abenefit could be obtained in the event of a changeof c­ ontrol. The AoA do not contain provisions for­opting out or opting up. Upon a change of control
event, unvested equity-based long-term variable
compensation awards vest with the number of theawards being adjusted on a pro-rata basis and thevalue per award being determined by the Board of
Directors. These procedures apply to all recipientsof long-term variable compensation awards irrespective of whether they belong to the EMB or not.

COMPENSATION PRINCIPLESStraumann Group

2020 Annual Report

The compensation principles outlined below are
valid for everyone working for wholly owned­Straumann Group companies.
ETHICAL, FAIR STANDARDSThe Group seeks to be in full compliance with international labor standards and is committed to treating all its employees fairly and equally. Compensation and access to rewards programs are prohibitedfrom being discriminatory under local regulations.
Local minimum wage regulations have no bearing
on the remuneration policy, as the compensation
clearly surpasses them. The Group’s commitment tothese standards is reflected in its use of benchmark
data for periodic reviews to ensure compliance and,most importantly, internal fairness.

VALUE CREATION DRIVES TOTAL REWARDSThe Group’s view is that success depends largely on
value creation by its employees, which should berecognized and rewarded. A modern compensation
system and access to competitive rewards are an
important instrument for attracting, retaining,
motivating and developing talented people. Therefore, we provide competitive compensation andbenefit packages by conducting regular benchmarking to ensure internal and external fairness,
incentivize sustainable growth and provide accessto benefits that recognize diverse lifestyles andinterests.
COMPREHENSIVE BENCHMARKING
We seek to attract and retain top talent from­various industries. Our benchmarking uses a

size-adjusted approach and considers growth andfuture aspirations, business complexity, global
footprint and market positioning, while respecting
the median movement and compensation relative
to it.
Benchmark reviews for all Group employees including the EMB are supported by an external specialist(Mercer) and include data from a large number ofcompanies in relevant local markets. Our policy is
to provide fixed cash compensation that is competitive with comparable companies. In addition, we
set our variable compensation elements to enable
total compensation to move towards the upper
quartile for outstanding performance.

111

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Compensation principles

For the EMB, the benchmark group includes, but is
not limited to companies who are included in the
SMIM index, which comprises the 30 largest midcap companies in Switzerland. This approach tobenchmarking is rounded out by using the sizeadjusted approach, which enables the inclusion ofother company data to ensure compensation iscompetitive.
PRINCIPLES OF COMPENSATION FOR THE
BOARD OF DIRECTORSThe compensation of the Board of Directors is subject to the approval of the AGM and consists offixed compensation components paid in cash andshares in accordance with the AoA. The Board of
Directors establishes the compensation payable toits members based on the recommendations of the
HRCC and within the limits approved by the AGM.
The principles remain unchanged in 2020 except
for the one-time reduction of 40% on the fixedshare grant for each member, due to COVID-19.

Straumann Group

2020 Annual Report

To demonstrate commitment to the value creationof the Group, each member of the Board of Directors is required to hold shares in the value of atleast two years’ total annual compensation. New
Board Members are expected to build up therequired shareholding within two years.
All Board Members are active mentors to the EMB
and have regular one-to-one exchanges with theirassigned mentees. Irrespective of role, all Board
Members are entitled to reimbursement from thecompany for their reasonable expenses for travel
to and from Board meetings, travel on behalf of
the Board, and other related incidental expenses,
in accordance with the expense regulations for
Members of the Board of Directors of Straumann
Holding AG.

PRINCIPLES OF COMPENSATIONFOR THE EXECUTIVE MANAGEMENT BOARD
The principles for the compensation of the EMB
specify both a fixed cash component, which
includes base salary and other fixed compensation
items, and a variable component in accordancewith the AoA, which includes a short-term and along-term component, and access to benefits/­
programs that make up their total rewards.
The rewards and incentives for each EMB member
are determined according to his or her role andresponsibilities as well as future expectations andare based on external benchmarks that are
reviewed as described in the section entitled “Comprehensive benchmarking”. The collective financial
rewards of the EMB, including the CEO, are subject
to approval by the shareholders at the AGM.
If there are changes in the EMB subsequent to theAGM, the compensation of a new CEO or any otherincoming member of the EMB will be determinedin accordance with the AoA, which includes­stipulations regarding total compensation to beoffered, and any supplementary compensation tooffset losses of rights associated with giving upprior activities.
To demonstrate their commitment to the Group’s
value creation, EMB members are required to hold
Straumann Group equity in a value correspondingat least to the aggregate of their individual annual
base salary and short-term incentive at target. The
requirement for the CEO is at least the aggregateof his annual base salary, short-term incentive attarget and LTI grant value. Incoming EMB members
are expected to build up the required equity within
five years.

Board of Directors compensation frameworkin CHF 1 000

Recipient

Board
Membership

EquityAllocation

EquityCOVID-19
reduction

Cash
Chairman

400

300

(120)

Board Committee
Chair

150

100

(40)

Other Board of
Directors members

100

100

(40)

Board members are required to hold two years’ annual­compensation in shares.

Pay mix corridor (at-target achievement)
30–40%

30–40%

30–40%

CEO1
50–75%

25–30%

10 –25%

Executive Management Board2 (excl. CEO)
60–75%

15–25%

10–15%

Senior Management
75–90%

10–25%

Other Management
90–100%

0–10%

General Staff
Fixed salary

Short-term incentive

Long-term incentive

1	At target, the variable compensation will amount to 171% ofbase salary for 2020.
2 At target, the variable compensation (incl. STI and LTI) for the EMB
members will in average amount to 90% of base salary.

112

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Framework

GROUP COMPENSATION FRAMEWORKThe compensation framework for the Groupremained the same in 2020 as in 2019 althoughvarious benefits and programs throughout theGroup were either postponed or cancelled due to
COVID-19 and have either been retroactively
installed or will be in 2021.
Compensation framework
Element

Type

DeliveryDescription

Fixed
Base salarycomponents

Cash• For all employees (including EMB) a fixed compensation, determined by scopeand complexity of the role
• Generally within 80–120% of relevant market median

Variable
Short-term
components incentive

CashLong-term­incentive

2020 Annual Report

Benefits

Straumann Group

Employee share participation plan

Performance
Share Units(PSUs)For Senior Management and a broad group of employees, paid annually:• Maximum payout potential: 165%, 180% or 190%, depending on hierarchy level.
• Performance measured against business results and financial targets.
For Executive Management Board• Maximum payout potential 190%
• Performance measured against business results and financial targets
For the EMB and a defined Senior Management group:• 2 Independent performance criteria: absolute TSR, relative TSR (SMIM)• PSUs to shares performance conversion factor: 0 to maximum of 1 share per PSU,
per performance condition (maximum overall 2 shares per PSU for both­conditions combined)• 3-year vesting period

Pension plans

In line with local statutory guidelines• Pension plans are de-risked in line with Group guidelines

Other benefits

In line with local market practices• Benefits are positioned towards relevant market medians

Employee shareparticipation
plan (ESPP)

Blocked shares• For management and staff in Switzerland: purchase of Straumann shares up to a
maximum of 35% of their annual base salary at a discount of 35%• For senior management, the purchase cap is 25% of annual base salary with a­­discount of 25%• The shares are blocked for two years

Employees
participating

SharesissuedDiscount
share priceat issue

End ofblocking
period2020

Programcancelled

0

NA

NA

2019

214

8 951

CHF 628 1
CHF 457 2

April 2021

2018

215

12 566

CHF 396 1

April 2020

1
2

25% discount35% discount113

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT
Framework

FIXED COMPONENTS
Fixed compensation includes base salary and may
include additional cash elements depending on
local practice and regulation, and are set throughthe previously described benchmarking practice.
VARIABLE COMPONENTS
In 2020, the variable compensation components
included either or both of the following:• Short-term incentive based on the business year
performance• Long-term incentive based on achievement ofspecific criteria over a 3-year period.
In each case the payout can range from zero to aclearly defined cap depending on the extent towhich the respective targets are achieved.

Straumann Group

2020 Annual Report

SHORT-TERM INCENTIVE (STI)
Our STI scheme focuses on rewarding individuals
based on company and team performance andincentivizes growth and value-creation. The payout
is capped at 165%, 180% or 190% of the target,
depending on the participant’s managerial level(see table on the lower right).
COMPANY PERFORMANCE
Economic profit (EP) is the key performance indicator of company performance, which applies to all
STI participants. The Board of Directors sets theabsolute target for EP generation in Swiss francs
annually prior to the respective performance cycle.
The target is based on medium-term businessplans as well as the defined budget for the performance year. The potential payout ranges from 0 to
190% of the target STI amount.
EP is calculated by deducting a capital charge fromthe net operating profit after tax (NOPAT). The
Board of Directors may exclude extraordinaryCompany performance – 2020 economic profit (EP)NET REVENUE
CHF 1434m

TAXES
CHF (39)m

COGS
CHF (383)mEBIT
CHF 336m

OPEX
CHF (715)m

FINANCIAL RESULTCHF (16)m

NOPAT
CHF 282m

ECONOMIC PROFIT
CHF 160m
CASH
CHF 120m
NET WORKING CAPITAL
CHF 274m
NON-CURRENT ASSETS
CHF 1127m

COST OF CAPITAL(WACC)
8%

CAPITAL CHARGECHF (122)m

CAPITAL
CHF 1520m

NOPAT = Net operating profit after taxes; COGS = Cost of goods sold; OPEX = Operating expenses;
EBIT = Earnings before interest and taxes.

STI performance criteria weighting 2020
Management level
Chief Executive Officer

Company
performance1

Organizational
unit performance1

100%

Executive Management Board

40–100%0–60%

Senior Management

40–100%0–60%Management

20–100%

0–80%

Staff

20–100%

0–80%

1	Ranges from 165% to 190% for maximum payout.

FINANCIALREPORT

APPENDIX

114

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Framework

elements from the calculation. The capital charge
represents the cost of capital calculated based on
an average equity return expected by investors.
ORGANIZATIONAL UNIT PERFORMANCE
Specific financial targets are applicable in addition
to EP for participants in commercial and production organizational units. These targets are derived
from annual budgets and are set by the CEO and
CFO together with the member of the EMB responsible for the respective organizational unit. In 2020,
for example, improvements to contribution margin
and to strategic key sales initiatives were set as
specific financial targets for the Sales Regions
while improvement to cost of goods sold was
defined as a specific financial target for Production
organizations.

Straumann Group

2020 Annual Report

WEIGHTING OF COMPANY AND
FINANCIAL TARGETS
The weighting of the performance targets depends
on the managerial level and organizational unit of
the respective participant (see table on p. 114).

LONG-TERM INCENTIVE (LTI)
The LTI program is designed for the EMB, Senior
Management and other key employees dependingon role, responsibility, location, strategic impact,
and market practice. Participation is determined by
the Board of Directors. The plan was introduced in2012 and is designed to offer an attractive variable
compensation element that aligns participants’interests with those of the shareholders. The planuses Performance Share Units (PSU), which are
granted to eligible personnel with specific performance conditions that result in a potential vesting
into Straumann shares after 3 years.
PSU GRANT 2020
PSUs are granted once a year after the AGM and no
cash investment is required from the participants.
The number of PSUs granted is equal to the participant’s LTI contractual grant value divided by thereference value of one PSU at the grant date. The
LTI grant value is a percentage of the total target
compensation and is determined in accordancewith the participant’s role in the organization. In
2020, 12 198 PSUs were granted.

Straumann 2020–2023 LTI programGrant

3y performance/vesting period

Vesting

Share price at grant

Share price atvesting

Individual LTI target
value 1 (in CHF)

Vested LTI award(in CHF)

Number of PSUs
granted 2

Total numberof shares

KPIs (equally weighted)
Absolute TSR
Number ofshares per PSU
Relative TSR 3
Number ofshares per PSU# of shares per PSU

Floor Target
0.0

Cap

0.5

1.0

Floor Target

Cap

0.0

0.5

0.0– 2.0

1.0

1	Grant value is defined as a percentage of the total target compensation taking into account participant’s role in the organization.
2	Results from division of the individual LTI grant value by the reference
value of one PSU.
3 Replaces the former EGA performance condition.

115

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Straumann GroupPSU VALUE AT GRANT 2020
The value of the PSUs granted is determined basedon the notion that it should accurately reflect theinherent risk of the underlying instrument. Under
this assumption, for the 2020 grant and the foreseeable future, the Group estimates the PSU reference value to be at 25% below the share price atthe time of grant, based on historical values where
the fair value calculated by external professionals
resulted in a range of 20–30% below market prices.

Outstanding PSU Grants

The LTI design includes the possibility for the PSU
value at vesting to be higher or lower than thevalue at grant (or even zero). It is important to­consider this potential for fluctuation when linking
grant values to total target compensation, in orderto manage expected compensation with share­volatility in the individual’s earning potential.

1 	 Seven trading days after the ex-dividend date.
2 	 Prior to 2019, the grant reference value was determined by using thefair value calculation under the Monte Carlo method. As of 2019, thereference value is determined by the closing share price average of
7 days ex-dividend less 25% discount.

CONVERSION OF PSU INTO SHARES(VESTING IN 2023)
The 2020 PSU grant will vest at the end of the performance period and will be converted into shares.
The number of shares allocated per PSU depends
on the achievement of two performance conditions, both directly reflecting the shareholder
experience and considered essential for sustaining
shareholder value creation:• Absolute TSR aims to link the LTI value at vesting
directly with the absolute value created by thecompany for its shareholders.

Absolute TSR – CAGR over 3 years• Relative TSR shows the Group’s share performance in the context of the market and in comparison with peer companies (SMIM index).
The two performance conditions are weighted
equally and vest independently of each other.
For each performance condition, the maximum
conversion factor is 1 share per PSU.

Grant date
Vesting date

Outstanding PSU as of 31 December 2020
2020

2019

2018

30.04.2020

30.04.2019

30.04.2018

2020

2019

2018

2017

As of 1 January

34 77140 83336 44845 60620.04.2023

20.04.2022

27.04.2021

Granted PSUs

12 19811 06212 33416 785

Share priceat grant

CHF 753.51

CHF 837.60

CHF 625.50

Vested PSUs

(14 297)(14 024)(5 538)(24 614)

PSU reference
value  2

CHF 565.13

CHF 628.00

CHF 460.68

Forfeited PSUs

(2 818)(3 100)(2 411)(1 329)As of 31 December

29 85434 77140 83336 448Granted PSUs

12 19811 06212 3341

3-Year Relative TSR vs SMIM in percentage points

Vesting Factor

Vesting Factor
Total Shareholder Return (TSR) CAGR

2020 Annual Report

Framework

1
0.75
0.50
0.25
0
–7%

0%

7%

14%

Performance achievement capped at 14% TSR CAGR

21%

1
0.75
0.50
0.25
0
−50%

−25%

0%

Performance achievement (defined cap)

25%

50%

116

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Framework

TOTAL SHAREHOLDER RETURN (TSR)
TSR 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 shareprice as well as gross dividends. Capital gain is­calculated using the average of the closing shareprices over the period of seven trading days
­starting on the ex-dividend date in the year of
grant and in the year of vesting.

Straumann Group

2020 Annual Report

When determining the vesting curves, the Board
considers ambitious yet realizable target performance levels to establish a statistically reasonablechance for target achievement. Symmetric vesting
curves are chosen to warrant an overall morerobust LTI program, whereby any decreases or
improvements in performance are proportionatelyreflected in the number of vested PSUs. The Group
believes that the overall approach to target setting
adds to the competitiveness of its reward system
for its executive and senior managers and limits
the possibility of excessive risk taking.
ABSOLUTE TOTAL SHAREHOLDER RETURN
Regarding the absolute TSR component, the conversion rate of PSUs into shares ranges from 0 to 100%.
If the TSR CAGR is 0% or below, the conversion rate iszero. If the CAGR is 7%, each PSU converts into half ashare, while a CAGR of 14% or more results in a conversion of one share per PSU.
RELATIVE TOTAL SHAREHOLDER RETURN
In the case of relative TSR, the conversion rate isalso linear and ranges from 0% to 100%. No sharesare allocated if the Group underperforms the SMIM
by 25%-points or more. Each PSU converts into one
share if the Group outperforms the SMIM by
25%-points or more. Performance in line with the
SMIM results in each PSU converting into half ashare as shown in the vesting curves in the chart on

p. 116. Relative TSR is calculated by taking the­percentage points difference between the TSR of
Straumann and that of the SMIM (Swiss Market
Index Mid) index.
LTI GRANTS PRIOR TO 2019
From 2016 to 2018 (vesting in 2019 to 2021), the
LTI was determined by Total Shareholder Return(TSR) and EBIT Growth Amount (EGA) measured
over a 3-year performance cycle and equallyweighted. The vesting conditions for those grants
remain unchanged. The final grant under thesevesting conditions was made in 2018, and the final
vesting will be in April 2021.
BENEFITSPENSION PLANS
Internal analysis carried out in recent years showedthat Straumann and its subsidiaries fulfil and, insome 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.
­Further information on pension plans is provided in
Note 8.2 to the audited consolidated financial
statements on p. 164 f. Information on pension
fund risks is also provided on p. 53 of the
Risk Analysis.
OTHER BENEFITS
Straumann’s benefit programs are designed toenable the Group to compete for and retain
employees. Benefits are structured to support ouroverall business strategy and are aligned with local
practices and legislation. Examples of benefits
include the Employee Share Participation Plan
(ESPP), public transport passes, lunch vouchers, theuse of company cars, mobile phones, and discounts
on Straumann products.

Due to the impact of the COVID-19 pandemic, the
ESPP was suspended for 2020, and other benefits
were partly suspended during the year (between
March and July 2020). In 2021, the Group will
review all benefit plans globally to ensure competitiveness and fairness across all organizational units
and entities.
Moreover, according to article 4.3 of the Group’s
Articles of Association, new members joining the
EMB may be eligible to receive compensation forlosses incurred because of the change of position.
Such lost compensation is replaced on a ‘like-forlike’ basis (i.e. no increase to the replacement
value) and are reported under ‘other compensation
and benefits’ in the compensation table for thefinancial year in question.

117

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

2020 compensation

2020 COMPENSATION

Straumann Group

2020 Annual Report

In 2020, the Group continued its practice of anannual compensation review for all StraumannGroup employees but refrained from making
adjustments because of the overall uncertainty of
the COVID-19 pandemic. Following the Swiss regulations on equal pay, the Group has undertaken
this practice not only in Switzerland, but in all
countries where it operates, to ensure that it
adheres to all compensation laws and regulations
and its culture of pay for performance without­discrimination or bias.

pension plan, which is a fully funded defined contribution plan. Such coverage is necessary as hedoes not occupy any other executive function andtherefore would otherwise not be covered by any
occupational pension scheme.

Furthermore, starting from 2020, members of theBoard of Directors are provided an opportunity toparticipate in a Board version of the Straumann
Pension plan. The Board pension plan mirrors allconditions of the Straumann plan with the exception that all contributions, including the employer

Board of Directors compensation (audited table)
in CHF 1 000

2020
2019

Fixed cash
compensation

Fixed sharecompensation

Social security

Other
benefits

Pension

TOTAL

31
32

1271
106

785
888

COMPENSATION FOR THE BOARD OF DIRECTORSThe 2020 AGM approved a maximum total compensation for the Board of Directors of CHF 2.7 million for the term of office ending at the 2021 AGM.
It consists of a fixed fee, paid in cash and shares,
and includes social security. The Board of Directors
was expanded at the AGM in 2020 to include one
additional member, and the average budgetedcompensation remained the same as in 2019. The
COVID-19 equity grant reduction results in a reduction of 15.3% of paid compensation vs budgetedcompensation.

Gilbert Achermann(Chairman of the Board)

400
400

180
300

47
50

Thomas Straumann

125
200

60
100

14
20

199
320

Monique Bourquin

100
100

60
101

9
13

172
214

Sebastian Burckhardt

100
100

60
101

9
13

169
214

Juan Jose Gonzalez

100
74

60
101

9
5

169
180

Ulrich Looser(Member until April 2020)

38
150

0
101

3
17

41
268

In 2020, none of the Board members received any
compensation from the Straumann Group otherthan that disclosed in this report. No compensation was paid to related parties of members of theBoard of Directors and no payments were made toformer members of the Board of Directors or
related parties.

Beat Lüthi(Vice Chairman, Chairman of the
HRCC)

150
150

60
101

15
17

225
268

Regula Wallimann(Chairwoman of the Audit & Risk
Committee)

150
138

60
101

15
16

225
255

Marco Gadola (joined BoD April 2020,
Chairman of the Technology &­Innovation Committee)

113
0

60
0

13
0

186
0

TOTAL

1276
1 312

600
1 006

137
151

The Chairman of the Board of Directors, who waspreviously a member of the EMB and served as
CEO, continues to participate in the Straumann

1

Increased employer contribution due to pension fund contribution rate regulations.

31
32

127
106

2 171
2 607

118

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

2020 compensation

portion, are to be funded by the respective members of the Board of Directors themselves without
incurring any additional costs to the company.
­Consequently, the actual fixed cash compensation
payments to the respective members of the Boardof Directors are reduced by the amount remitted
by the Company into the pension scheme.
SHAREHOLDINGS OF THE BOARD OF DIRECTORSThe numbers of shares in Straumann Holding AG
held by the members of the Board of Directors
in office at the end of 2020 are shown in the tableon p. 179 f.

COMPENSATION OF THE
EXECUTIVE MANAGEMENT BOARD
At the 2020 AGM, the shareholders prospectively
approved a fixed compensation of CHF 9.2 million forthe collective EMB (as composed in April 2020) for theperiod between 1 April 2020 and 31 March 2021. The
shareholders also approved a maximum budget of
CHF 3.2 million for the collective long- term variable
compensation of the EMB for the 2020 business year.
The variable STI for the business year ending
31 December 2020 will be submitted for approval by
the shareholders at the AGM in 2021.

the total fixed EMB compensation compared to theprevious business year. Furthermore, the extensionof the EMB announced and implemented in 2020
(from 12 to 14 members) resulted in an increase of
the total compensation of the EMB of 1.4% (notincluding the voluntary COVID-19 reduction of 25%
base salary in the 2nd quarter).

EMB AVERAGE FIXED COMPENSATION 2020
In 2020, one member of the EMB received anadjustment to their fixed compensation, which
resulted in an overall increase of less than 1% in

In the 2020 business year, the Group had to shift
its focus on ensuring employee safety and business
continuity, as well as mitigating financial impacts
through the pandemic. As various regions and

VARIABLE COMPONENTS
The Board of Directors sets short and long-term(for the respective three-year performance period)
targets for the CEO and EMB annually.

Executive Management Board compensation (audited table)

Straumann Group

2020 Annual Reportin CHF 1 000

14 members 2020
12 members 2019

Annualbase salary

Short-term
incentive

Performance
Share Units(grant value)

ESPP
discount

Guillaume Daniellot (CEO)Marco Gadola (CEO)

656
865

480
1 615

600
870

0
22

214
413

71
33

2 022
3 818

Other members 1

5 091
4 329

2 164
3 982

2 110
2 121

0
87

1 768
1 567

2 727
569

13 98812 655

TOTAL

5 747
5 194

2 644
5 597

2 710
2 991

0
109

1 982
1 980

2 798
602

15 88116 473

1
2
3

SocialOther
security and compensation
pension 2& benefits3

TOTAL

Including compensation for members joining and leaving during the year.
Beginning in 2019, the amounts include estimated social security contributions related to PSU grants to align the timing of social security reportingwith the compensation element that creates it.
Other compensation includes automobile lease for EMB members on Swiss contracts in addition to local benefits for EMB members in LATAM,APAC and the USA. Also included is replacement awards for 3 new members who joined during the year and relocation costs to move them to their­respective locations of employment.

119

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

2020 compensation

countries were hit throughout the year, the abilityof the Group to achieve originally set financial targets was limited. During the turnaround situation
the discretionary goals were established throughforecasting and anticipating our ability to serve ourcustomers. The ensuing performance and achievement of the latter resulted in the decision to pay afully discretionary bonus payment of 80% of thetarget for the EMB and all other eligible employees(out of a maximum potential of 190% of their STI
target for the EMB, and 165–190% for all other­eligible employees).
Furthermore, the Group clearly exceeded the threeyear LTI targets for Total Shareholder Return and
EGA, resulting in a maximum conversion factor of
2 shares per PSU granted in 2017, which vested in
April 2020. The total value of the vested LTI of the
EMB in 2020 corresponded to 0.06% of the Group’s
market capitalization at the end of 2020.

CHANGES IN THE EMB
As stated in the 2019 Compensation Report, two
new EMB positions were created at the beginningof 2020 increasing the EMB to 14 members including the CEO (see p. 100 for details). In addition,
Mark Johnson replaced Gerhard Bauer as the headof Research Development & Operations (RDO) andDirk Reznik replaced Peter Zihla and Camila Finzi
joined the Group. Mr. Bauer assisted with the transition through the end of 2020 to ensure continuity
with key projects through the COVID-19 impact on
the operational aspects of the organization
through the end of 2020.
As explained on page 132 of the Compensation
Report 2019, to conclude the CEO transition, theGroup entered into an agreement with Marco­Gadola to ensure continuity in certain projects.
The agreement covers the period from 1 January to
30 June 2020 with a salary of CHF 797 500 for
Mr G­ adola’s services as a non-executive member of

the Group’s management and a compensation of
CHF 880 000 for compliance with the Group’s postcontractual non-compete covenants for the period
1 July 2020 to 30 June 2021.
In 2020, replacement awards were granted to three
EMB members who joined the company to compensate them for lost equity when they resigned
from their former employers. The amount spent
was within the permissible supplementary amountunder Article 4.3 of the AoA.
SHAREHOLDINGS OF THE EMB
The numbers of shares in Straumann Holding AG
held by the members of the EMB in office at theend of 2020 are shown in the table on p. 179.
REALIZED COMPENSATION OF THE CEO
The table below shows the compensation realized
by Guillaume Daniellot, Group CEO (in the rolesince 1 January 2020) during 2020.

Realized Compensation of the CEO

Straumann Group

2020 Annual Report

STI-related

1
2

LTI-related 1

Quantitative measures and their­contribution to variable compensation

Realised­performance

Realized vs­Target­Performance

Target/granted­compensation

Realized ­compensation

Economic Profit 2020
Discretionary bonus

50%

BoD discretion80%

CHF 600 000(86% of annual
base salary)

CHF 480 000

EBIT Growth (EGA)2017 to 2019

25%

Max.
­achievement

1 share per PSU

Total Shareholder Return(TSR) Apr 2017 to Apr 2020

25%

Max.
achievement

1 share per PSU

CHF 120 000(30% of annual
base salary)2

CHF 577 000(value achieved through 3 factors, PSU vesting factor equals 2,
25% grant discount and 16% annual share price increase)2017 grant which vested in 2020.
Grant before Guillaume Daniellot was appointed CEO reflects % of base salary at the time of grant.

120

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Approval

APPROVAL OF COMPENSATIONThe Board of Directors determines the compensation of the individual members of the Board andthe EMB based on the recommendations of the
HRCC and within the limits set by the AGM. The
relevant criteria are explained on p. 111 ff., and thecompensation awarded to the Board of Directors
and the EMB is disclosed in the tables on p. 118 f.

Compensation approved and dispensed

The AGM approves the maximum compensation
payable to the Board of Directors and the EMB. At
the 2021 AGM, the shareholders will be asked toapprove:• The total compensation of the Board of Directors
from 1 April 2021 to 31 March 2022
• The total fixed compensation of the EMB from
1 April 2021 to 31 March 2022
• The short-term incentive (STI) of the EMB for the2020 business year

Straumann Group

2020 Annual Report• The total long-term incentive (LTI) for the 2021
grant including grant-related social security for
the EMB.
The reconciliation of approved and dispensed compensation for the 2020–2021 AGM period is shownin the table on the right.

in CHF 1 000

Board of Directors

Executive
Management Board

Compensation earned during the financial year (A)

2 207

16 010 1

Compensation earned for the period 1 January to 31 March 2020 (3 months)of the financial year (B)(367)(4 068) 1

Compensation to be earned for the period from 1 January to 31 March 2021
(3 months) in the year following the financial year (C)

391

1 976

Total compensation earned from 1 April 2020 to 31 March 2021 (A)+(B)+(C)

2 231

13 918Amount approved by shareholders at the 2020 AGM

2 700

15 400 2yes

yes

Compensation dispensed by the Company within approved amount1
2

Includes replacement awards and relocation costs for newly joining EMB members (3) totaling CHF 2108. One member who was entitled toreceive a replacment award in 2019 deferred the payment until 2020. All replacement awards were within the limits set by the AoA.
Does not include the 2020 STI that will be proposed in the 2021 AGM in the amount of CHF 3.5m, to be paid upon approval in April 2021.

121

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

Statutory auditor

REPORT OF THE STATUTORY AUDITORON THE REMUNERATION REPORTTo the General Meeting of Straumann Holding AG, Basel
We have audited the accompanying remuneration
report of Straumann Holding AG for the year ended
31 December 2020. The audit was limited to theinformation according to articles 14 – 16 of theOrdinance against Excessive Compensation in
Stock Exchange Listed Companies (Ordinance)
contained in the tables labeled “audited” on page
118 and page 119 of the remuneration report.

Straumann Group

2020 Annual Report

BOARD OF DIRECTORS’ RESPONSIBILITY
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. The Board of Directors is also
responsible for designing the remuneration systemand defining individual remuneration packages.

AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on theaccompanying remuneration report. We conducted
our audit in accordance with Swiss AuditingStandards. Those standards require that we comply
with ethical requirements and plan and performthe audit to obtain reasonable assurance about
whether the remuneration report complies with
Swiss law and articles 14 – 16 of the Ordinance.

An audit involves performing procedures to obtain
audit evidence on the disclosures made in the
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 theassessment of the risks of material misstatementsin the remuneration report, whether due to fraud or
error. This audit also includes evaluating thereasonableness 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 haveobtained is sufficient and appropriate to provide abasis for our opinion.

OPINION
In our opinion, the remuneration report for theyear ended 31 December 2020 of Straumann­Holding AG complies with Swiss law and articles
14 – 16 of the Ordinance.

Ernst & Young Ltd

Daniel Zaugg
Licensed audit expert(Auditor in charge)
Basel, 12 February 2021

Fabian Meier
Licensed audit expert

122

FINANCIALREPORTSTRAUMANN GROUP

Alternative
performance measures

124

Consolidated Statementof Financial Position

127

Consolidated Income Statement

128

Consolidated Statement ofComprehensive Income

128

Consolidated
Cash Flow Statement

129

Consolidated Statement of
Changes in Equity

130

Notes to the Consolidated
Financial Statements

131

Audit Report – Consolidated
Financial Statements

172#

TOGETHERSTRONG

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

124

ALTERNATIVE PERFORMANCE MEASURESThe financial information in this annual report release includes certain Alternative Performance Measures(APMs), which are not accounting measures defined by IFRS.
CORE FINANCIAL MEASURES are non-IFRS financial measures because they cannot be derived directly fromGroup consolidated financial statements. Management believes that these non-IFRS financial measures,
when provided in combination with reported results, will provide readers with helpful supplementary information to better understand the financial performance and position of the Group on a comparable basis fromperiod to period. These non-IFRS financial measures are not a substitute for, or superior to, financial measures
prepared in accordance with IFRS. Core financial measures are adjusted to exclude the following significant
items:• PPA amortization: Special items and amortization of intangible assets that result from the purchase price­allocation (PPA) following acquisitions.
• Impairments: Impairment write-offs of financial or non-financial assets as a result of unusual or one-time
events in legal or economic conditions, change in consumer demands or damage that impacts the asset. In
2020 the Group has impaired assets mainly as a consequence of the COVID-19 pandemic. Refer to Note 4.4
and 7.4 of the consolidated financial statements for additional details.
• Restructuring: One-off costs resulting from major restructuring exercises. The amount disclosed in 2020
­represents the costs incurred in relation to the reduction of the Group’s workforce. Refer to Note 8.4 of theconsolidated financial statements for additional details.

Straumann Group

2020 Annual Report• Legal cases: Non-recurring and significant litigation charges. Expenses related to legal disputes in the courseof the Group’s ordinary business activities are not adjusted. The amount disclosed in 2019 refers to the Alignpatent dispute settlement out of court.
• Pension plan: In 2020 a one time plan amendment gain of CHF 5.3 million was recorded mainly in respect ofchanges in the Swiss pension plan (adoption of a lower conversion rate). Refer to Note 8.2 of the consolidated financial statements for additional details.
• Consolidation result of former associates: Revaluation gains and losses as a result of obtaining control overformer associates. In 2019 revaluation gains relate to the business combinations of Valoc, Zinedent,­Anthogyr and Abutment Direct.
• Other: Non-recurring, unusual and infrequent incidents that cannot be allocated to any of the preceding
categories. In 2019, the Group adjusted the various effects of a fire incident in its Canadian subsidiary­Dental Wings Inc. On the one hand, the fire caused a material damage at the facility which is the main
­production center for in-lab and intraoral scanners. On the other hand, the Group is entitled to insurance­reimbursements. The property damages and the insurance reimbursements are separate economic events,
which are accounted for separately.

A reconciliation of IFRS to core measures is disclosed in the table at the end of this section.
Further, the Group discloses VARIOUS KPI. Unless otherwise stated, the following KPI are based on IFRS
­figures, as disclosed in the consolidated financial statements:
ORGANIC REVENUE GROWTH
Revenue growth excluding the revenue contribution from business combinations (calculated by adding­pre-acquisition revenues of the prior period to the existing revenue growth base) and currency effects.
REVENUE GROWTH IN LOCAL CURRENCIES
Revenue growth excluding currency effects. Those effects are calculated using a simulation by reconsolidating the prior period revenues with the current year foreign exchange translation rates.
NET CASH (NET DEBT)
Net debt is an indicator of the Group’s ability to meet financial commitments, to pay dividends, and to undertake acquisitions. The KPI is calculated by subtracting financial liabilities (excluding lease liabilities) and retirement benefit obligations from cash and cash equivalents.
NET WORKING CAPITAL (NET OF CASH)
Working capital is capital invested in the Group’s operating activities. It is a driver for cash flow and an indicator of operational efficiency. Net working capital equals Subtotals current assets and current liabilities,
excluding the lines cash and cash equivalents, current financial assets and current financial liabilities.
DAYS OF SUPPLIES (DOS)The days of supplies indicate the average time in days that the Group takes to turn its inventory. The numerator is the balance sheet position ‘inventories’ at year-end, and the denominator is the ‘Cost of goods sold’ ofthe past three months, multiplied by 90 days.
DAYS OF SALES OUTSTANDING (DSO)
The days of sales outstanding indicate the average number of days the Group takes to collect its receivables.
The numerator is the balance sheet position ‘trade receivables’ at year-end and the denominator is the ‘net
revenues’ of the past three months, multiplied by 90 days.
RETURN ON ASSETS (ROA)
Return on assets expresses the earning power of the Group’s assets. The numerator is the profit for the periodof the past twelve months, and the denominator is the average balance sheet total for the same period.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

EQUITY RATIOThe equity ratio is calculated by dividing total equity by total assets.
RETURN ON EQUITY (ROE)
Return on equity compares profitability of the Group in relation to the equity invested. The numerator isthe profit for the period of the past twelve months, and the denominator is the average equity for thesame period.
CAPITAL EMPLOYED
Capital employed equals current assets, property, plant and equipment, right-of-use assets, intangible assets
minus cash and cash equivalents and non-interest-bearing liabilities.
RETURN ON CAPITAL EMPLOYED (ROCE)
Return on capital employed expresses the earning power of the Group’s invested capital. The numerator isthe operating profit (EBIT) of the past twelve months, and the denominator is the average capital employed
for the same period.
FREE CASH FLOW
Free cash flow represents the cash-generating capability of the Group to conduct and maintain its operations,
to finance dividend payments, to repay debt, and to undertake acquisitions. Free cash flow equals net cashfrom operating activities less purchase of property, plant and equipment, less purchase of intangible assets,
plus net proceeds from property, plant and equipment.

Straumann Group

2020 Annual Report

DIVDEND PAY-OUT RATIO
A dividend payout ratio is the percentage of earnings paid to shareholders of Straumann Holding AG: the­proposed dividend pay-out in the following year divided by the Group’s CORE net profit of the past
twelve months.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

125

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

CORE RESULT RECONCILIATION 2020

(in CHF 1 000)

Revenue

APPENDIX

126

IFRS
PPA
2020 amortization Impairments

Legal cases Restructuring Pension plan

1 425 851

CORE
2020

(in CHF 1 000)

1 425 851

RevenueIFRS
PPA
2019 amortization Impairments

Consolidation
Legal cases result former
associates

Other

1 596 225

CORE
2019

1 596 225

Cost of goods sold(396 073)

­141

7 649

­880

(387 403)

Cost of goods sold(395 749)

2 484

4 272

(388 992)

Gross profit

1 029 778

­141

7 649

­880

1 038 448

Gross profit

1 200 477

2 484

4 272

1 207 233

Other income

18 76418 764

Other income

12 807(7 085)5 722

Distribution expense(311 767)

8 094

12 3148 287(283 071)

Distribution expense(330 974)

10 390Administrative expense(580 234)

3 761

132 1128 747(5 275)(440 890)

Administrative expense(495 170)

6 421

25 5002 796(460 454)

Operating profit

156 541

11 995152 075

17 915(5 275)333 251

Operating profit

387 140

19 29425 500(17)

431 91775 033Finance income

64 87364 873(105 960)

Finance expense(89 475)(89 475)

Finance income

75 033Finance expense(116 078)

Share of results ofassociates(1 588)10 118(1 588)

Profit before income
tax

113 907

11 995162 193

17 915(5 275)300 735

Income tax expense(21 640)(3 287)(12 613)(2 687)­580(39 647)

NET PROFIT

92 2688 708

149 580

15 227(4 695)261 088­ hareholders of theSparent company­Non-controllinginterests

2020 Annual Report

FINANCIALREPORT

CORE RESULT RECONCILIATION 2019

Attributable to:Straumann GroupCOMPENSATIONREPORT

91 2828 431

147 139

­986

­276

2 441

15 227(4 695)257 385
3 703

Basic earnings per share(in CHF)

5.75

16.20

Diluted earnings per
share (in CHF)

5.73

16.16

Operating profit

156 541

11 995152 075

17 915(5 275)333 251

Depreciation &amortization

249 442(11 995)(149 975)­0­087 472

EBITDA405 983­0

2 100

17 915(5 275)420 722

Gain on consolidationof former associates

5 967

Share of results ofassociates(3 036)(320 584)(5 967)­0(3 036)

Profit before incometax

365 469

19 29425 500(5 967)(17)404 279

Income tax expense(57 440)(5 416)(3 188)NET PROFIT

308 029

13 878­5(66 039)

22 313(5 967)(13)338 240

306 473

13 41022 313(5 967)(13)336 216­Non-controllinginterests

1 556

­4 68

­0

­0

­0

2 024

Basic earnings per share(in CHF)

19.33

21.21

Diluted earnings per
share (in CHF)

19.26

21.13

Attributable to:­ hareholders of theSparent company

Operating profit

387 140

19 294

Depreciation &amortization

93 498(16 956)

EBITDA480 637

2 338

25 50025 500.00(17)431 917(3 519.55)

73 022(3 536.69)

504 939

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

127

CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
Assets(in CHF 1 000)

Equity and liabilities
Notes

31 Dec 2020

31 Dec 2019

(in CHF 1 000)

Notes

31 Dec 2020

Property, plant and equipment

4.1

313 547

325 164

Share capital

7.5

1 591

1 588

Right-of-use assets

4.2

235 584

250 584

Retained earnings and reserves

1 203 144

1 361 825

Intangible assets

4.3

650 285742 841

Total equity attributable to the shareholders of the parent company

1 204 735

1 363 413

Investments in associates

2.2

92 66290 976

Non-controlling interests

Financial assets

7.1

27 00431 779Total equity

8 290

6 977

7.7

68 99059 993

1 396 362

1 508 313

Other receivables
Deferred income tax assets
Total non-current assets

Other liabilities
Financial liabilities

3 809

1 209 943

1 367 222

86 98647 645

9 654

9 594

7.2

730 622270 764
10 964

5.1

216 570

234 553

Provisions

6.1

15 436

Trade and other receivables

5.2

294 550378 325

Retirement benefit obligations

8.2

73 32567 918Financial assets

7.1

­305

1 593

Deferred income tax liabilities

7.7

43 22836 887

8 626

6 982

Total non-current liabilities

959 250443 773632 201

260 211

1 152 252

881 665

Cash and cash equivalents
Total current assets
TOTAL ASSETS

5.3

2 548 613

2 389 978Trade and other payables

5.4

317 591

308 762

Financial liabilities

7.2

27 635

224 725

34 15945 490

Income tax liabilities
Provisions

­35

­7

379 420578 983

Total liabilities

1 338 670

1 022 756

TOTAL EQUITY AND LIABILITIES

2 548 613

2 389 978Total current liabilities

2020 Annual Report

5 209

Inventories

Income tax receivables

Straumann Group

6.2

Income tax liabilities

31 Dec 2019

6.1

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECONSOLIDATEDINCOME STATEMENT(in CHF 1 000)

Revenue

Notes

2020

2019

3.1

1 425 851

1 596 225

Net profit
Other comprehensive income to be reclassified to profit or loss in subsequent periods:(396 073)(395 749)

Gross profit

1 029 778

1 200 477

18 76412 807

Distribution expense

3.3(311 767)(330 974)

Administrative expense(580 234)(495 170)

Operating result

156 541387 140(in CHF 1 000)2019

308 029

Net foreign exchange result on net investment loans(36 781)(27 427)

Exchange differences on translation of foreign operations(121 784)(23 392)

(44)

2 485

1 065

(1 207)(157 544)(49 540)

Change in fair value of financial instruments designated through other comprehensive
income1 530(3 579)(7 286)(5 994)

Share of other comprehensive income/(loss) of associates accounted for using theequity method
Income tax effect
Other comprehensive income to be reclassified to profit or loss in subsequent periods
Items not to be reclassified to profit or loss in subsequent periods:

75 03364 873Finance expense

7.4(116 078)(89 475)

Gain on consolidation of former associates

7.4

­0

5 967

Remeasurements of retirement benefit obligations

Share of results of associates

2.2(1 588)(3 036)

Income tax effect

113 907365 469

Items not to be reclassified to profit or loss in subsequent periods(21 640)(57 440)

92 268308 029

91 282306 473

­986

1 556

7.7

NET RESULT
Attributable to:­Shareholders of the parent company­Non-controlling interests

­735

1 140

(5 021)(8 433)

Other comprehensive income / (loss), net of tax(162 566)(57 973)

TOTAL COMPREHENSIVE INCOME, NET OF TAX(70 298)

250 056(71 095)

249 409

­797

­6 47

Attributable to:­Shareholders of the parent company­Non-controlling interests

2020 Annual Report

128

2020

7.4

Income tax

APPENDIX

92 268Finance income

Result before income tax

Straumann GroupFINANCIALREPORTCONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME

Cost of goods sold

Other income

COMPENSATIONREPORT

Basic earnings per share attributable to ordinary
shareholders of the parent company (in CHF)

3.2

5.75

19.33

Diluted earnings per share attributable to ordinary
shareholders of the parent company (in CHF)

3.2

5.73

19.26

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

129

CONSOLIDATEDCASH FLOW STATEMENT(in CHF 1 000)

Notes

Net result

2020

2019

92 268308 029

Adjustments for:Proceeds from sale of financial assets

2020

2019

(6 392)

­0

­363

­160
(134 599)

21 64057 440Purchase of property, plant and equipment(70 842)

19 40414 328Purchase of intangible assets(11 227)(15 261)

Foreign exchange result

11 561

11 190Purchase of investments in associates(3 161)(12 327)

7.7

Fair value adjustments

Acquisition of a business, net of cash acquired

2.1(42 584)(68 725)

Contingent consideration paid

7.3

(12 554)(8 415)

(519)

(935)

10 599­0­0(5 967)

Proceeds from loans

­821

1 792

2.2

1 588

3 036

Disbursement of loans(774)(2 594)

Dividends received from associates

­812

1 789

Property, plant and equipment

4.1, 4.4

44 51142 445

Net proceeds from sale of non-current assets

­712

1 032

Right-of-use assets

4.2, 4.4

27 24024 012

Cash flows from investing activities(144 825)(237 147)

Intangible assets

4.3, 4.4

27 71627 041
7.2, 7.3­0(47 365)

Intangible assets

4.4

144 426­0

Repayment of non-current financial debts

7.2(3 934)(2 755)

Property, plant and equipment

4.4

5 549

­0

Increase in non-current financial debt

7.2

479 031­0Change in provisions, retirement benefit obligations and other liabilities(4 770)(18 009)

Repayment of current financial debts

7.2(200 057)­0Change in long-term assets(3 359)­189

Dividends paid to the equity holders of the parent

7.6(91 231)(83 126)

9 285

13 130(1 245)

(580)

­330

(141)

7.2

(24 920)(22 905)

­0

5 061

Change in inventories(13 568)(42 093)

Purchase of treasury shares(4 312)(4 816)

Change in trade and other receivables

53 067(79 874)

Cash flows from financing activities

153 331(156 486)

Financial impairment result

7.4

Gain on consolidation of former associates
Share of results of associates
Depreciation and amortization of:Purchase of non-controlling interests

Impairment of:

Share-based payments expense

8.1, 8.3

Result on disposal of property, plant and equipment

Change in trade and other payables
Interest paid on lease liabilities
Interest paid

Dividends paid to non-controlling interests
Payment of lease liabilities
Sale of treasury shares

Working capital adjustments:

2020 Annual Report

Notes

Purchase of financial assets

Interest and other financial result

Income tax paid

Straumann Group(in CHF 1 000)

7.2

(890)

72 623(6 626)(6 612)

Exchange rate differences on cash held

(13 110)(3 307)(7 658)(7 151)

Net change in cash and cash equivalents

371 990(18 463)

Cash and cash equivalents at 1 January

5.3

260 211278 674

CASH AND CASH EQUIVALENTS AT 31 DECEMBER

5.3­632 201

260 211

Interest received

2 267

­580

Income tax paid

(57 466)(34 783)

Cash flows from operating activities

376 594378 478

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

130

CONSOLIDATED STATEMENTOF CHANGES IN EQUITY
2020(in CHF 1 000)

Attributable to the shareholders of the parent company
Notes

At 1 January 2020

SharecapitalSharepremium

1 588

31 412

Treasury Translation
sharesreserves

Retainedearnings

Total

Noncontrollinginterests

Total
equity(9 361)

1 556 272

­1 363 413

3 809

1 367 222

91 282­91 282986

92 268(158 377)(4 000)­(162 377)

(189)

(162 566)(158 377)

87 282(71 095)­797(70 298)(216 498)

Net profit
Other comprehensive income
Total comprehensive income

0

0

3

21 1870

Issue of share capital

7.5(21 189)­0­0Dividends to equity holders of the parent

7.6(91 231)­(91 231)(91 231)

8.1, 8.3

9 207­9 2079 207­(4 312)(4 312)

Dividends to non-controlling interests
Share-based payment transactions­0

Purchase of treasury shares(4 312)

Usage of treasury shares

2 603(2 603)

Changes in consolidation group­0­0

Put options to non-controlling interests
AT 31 DECEMBER 2020

1 591

52 599(11 070)(374 875)(1 245)(1 245)

­0
­526

­526

(1 248)­(1 248)

1 321

­73

1 536 490

1 204 734

5 209

1 209 943

2019
(in CHF 1 000)

Attributable to the shareholders of the parent company
Notes

2020 Annual Report

At 1 January 2019

Sharepremium

1 588

31 412

Treasury Translation
sharesreserves

Retainedearnings

Total

Noncontrollinginterests

Total
equity(19 870)

1 356 839

1 200 924

3 396

1 204 320

306 473306 4731 556

308 029(47 453)(9 611)(57 064)(909)(57 973)(47 453)296 862249 409­6 47

250 056(83 126)(83 126)(169 045)

Net profit
Other comprehensive income
Total comprehensive income
Dividends to equity holders of the parent

0

0

0

7.6

Dividends to non-controlling interests
Share-based payment transactions

Straumann GroupSharecapital­08.1, 8.3

13 384Purchase of treasury shares(4 816)

Usage of treasury shares

15 324

Changes in consolidation groupPut options to non-controlling interests
AT 31 DECEMBER 2019

1 588

31 412(9 361)(216 498)(83 126)
(580)

(580)

13 38413 384(4 816)(4 816)(10 485)

4 839

333

­333

3 474

4 839

(17 534)(17 534)(3 128)(20 662)

1 556 272

1 363 413

3 809

1 367 222

3 807

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIXNOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
1
1.1
1.2
1.3
1.4
1.5

General information and accounting policies
Corporate information
Basis of preparation
Changes in accounting policies
Critical accounting estimates, assumptions and judgments
Summary of significant accounting policies

Straumann Group

2020 Annual Report2
Investments
2.1 Business combinations
2.2 Investment in associates
3
3.1
3.2
3.3

Operating performance
Operating segments
Earnings per share
Other income

4
4.1
4.2
4.3
4.4
4.5

Tangible and intangible assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Impairment of non finanical assets
Depreciation and amortization

5
5.1
5.2
5.3
5.4

Net working capital
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables

6
6.1
6.2
6.3

Provisions, other non-current liabilities, contingencies and commitments
Provisions
Other non-current liabilities
Contingencies and commitments

7
7.1
7.2
7.3
7.4
7.5
7.6
7.7

Financing, capital and tax
Financial assets
Financial liabilities
Financial instruments
Finance income and expense
Share capital
Dividends per share
Income tax

8
8.1
8.2
8.3
8.4

Personnel
Employee benefits expense
Retirement benefit obligations
Share-based payments
Global restructuring

9
9.1
9.2
9.3
9.4
9.5

Other disclosures
Events after the balance sheet dateFinancial risk management
Principal currency translation rates
Related-party disclosure
Subsidiaries and associates

131

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

1 GENERAL INFORMATION AND ACCOUNTING POLICIES
1.1 CORPORATE INFORMATIONThe Straumann Group (SIX: STMN) is a global leader in tooth replacement and orthodontic solutions that
restore smiles and confidence. It unites global and international brands that stand for excellence, innovationand quality in replacement, corrective and digital dentistry, including Anthogyr, ClearCorrect, Dental Wings,
Medentika, Neodent, Straumann and other fully or partly owned companies and partners. In collaboration
with leading clinics, institutes and universities, the Group researches, develops, manufactures and supplies
dental implants, instruments, CADCAM prosthetics, biomaterials and digital solutions for use in tooth
replacement and restoration or to prevent tooth loss. Headquartered in Basel, Switzerland, the Group currently employs approximately 7 300 people worldwide and its products, solutions and services are available
in more than 100 countries through a broad network of distribution subsidiaries and partners.
The consolidated financial statements of the Straumann Group for the year ended 31 December 2020 wereauthorized for i­ssue in accordance with a resolution of the Board of Directors on 12 February 2021 and are
subject to approval by the Annual General Meeting on 9 April 2021.
1.2 BASIS OF PREPARATIONSTATEMENT OF COMPLIANCE
The consolidated financial statements of the Group have been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX132

ASSOCIATES
Associates are those entities over which the Group has significant influence, but neither control nor joint
control. Significant influence is the power to participate in the financial and operating policy decisions.
Investments in associates are accounted for using the equity method of accounting. Under the equity
method, the investment is initially recognized at cost, and the carrying amount is increased or decreased
to recognize the investor’s share of changes in equity of the investee after the date of acquisition. The
Group’s share of results of operations is recognized in profit or loss, while any change in other comprehensive income of the associates is presented as part of the Group’s other comprehensive income.
JOINT ARRANGEMENTS
For entities over which the Group has joint control together with one or more partners (joint arrangements), the Group assesses whether a joint operation or a joint venture exists. In a joint venture, the parties that have joint control of the arrangement have rights to the net assets of the arrangement. For joint
ventures, the equity method is applied.
1.3 CHANGES IN ACCOUNTING POLICIESAMENDMENTS EFFECTIVE IN 2020
The following amendments apply for the first time in 2020 but do not have a material impact on the consolidated financial statements of the Group:• IFRS 3 ‘Definition of a business’ (effective 1 January 2020)

They have been prepared on a historical cost basis except financial assets and financial l­iabilities (including
derivative financial instruments), which have been measured at fair value. The consolidated financial statements are presented in Swiss francs (CHF) and all values are rounded to the nearest thousand except whereotherwise indicated.

Straumann Group

2020 Annual Report

BASIS OF CONSOLIDATIONThe consolidated financial statements comprise the financial statements of Straumann Holding AG and its
subsidiaries as of 31 December 2020.
SUBSIDIARIES
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
The financial statements of the subsidiaries are prepared for the same reporting period as for the parent
company, using c­ onsistent accounting policies. All intra-Group balances, income and expenses and unrealized gains and losses resulting from intra-Group transactions are eliminated in full.

• IAS 1 and 8 ‘Definition of Material’ (effective 1 January 2020)• IFRS 16 ‘COVID-19-Related Rent Concessions’ (effective 1 June 2020). The amendment permits lessees, as apractical expedient, not to assess whether particular rent concessions occurring as a direct consequence of
the COVID-19 pandemic are lease modifications and instead to account for those rent concessions as if they
are not lease modifications. The Group early applies the expedient to rent concessions occurring as a directconsequence of the COVID-19 pandemic. The concessions obtained in 2020 are not material.
• IFRS 7, IFRS 9 and IAS 39 ‘Interest Rate Benchmark Reform’ Phase 1 (effective 1 January 2020)• Conceptual Framework for Financial Reporting issued on 29 March 2018 (effective 1 January 2020)
STANDARDS, AMENDMENTS AND INTERPRETATIONS THAT ARE NOT YET EFFECTIVE AND HAVE NOTBEEN ADOPTED EARLY BY THE GROUP
The following standards and amendments to existing standards, which are relevant to the Group, havebeen published and are mandatory for the Group’s accounting periods beginning on or after 1 January
2021 or later periods, and the Group has not adopted them early:• IFRS 7, IFRS 9 and IAS 39 ‘Interest Rate Benchmark Reform’ Phase 2 (effective 1 January 2021)

Changes in equity interests in Group subsidiaries that reduce or increase the Group’s percentage ownershipwithout loss of control are accounted for as an equity transaction between owners.

• IFRS 10 and IAS 28 (Amendments) ‘Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture’ (effective date to be defined)HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT• IAS 1 (Amendments) ‘Classification of liabilities as current or non-current’ (effective 1 January 2022)• IFRS 3 (Amendments) ‘Reference to the Conceptional Framework’ (effective 1 January 2022)• IAS 16 (Amendments) ‘Property, Plant and Equipment: Proceeds before Intended Use’ (effective 1 January
2022)• IAS 37 (Amendments) ‘Onerous Contracts - Costs of Fulfilling a Contract’ (effective 1 January 2022)
1.4 CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGMENTS
The preparation of the Group’s financial statements requires Management to make judgments, estimates andassumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosureof contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates
could result in outcomes that may require a material adjustment to the carrying amount of the asset or liability affected in the future. The key assumptions concerning the future and other key sources of estimation
uncertainty at the balance sheet date, which have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the next financial year, are stated below.
CONTINGENT CONSIDERATIONSThe Group has entered into several contingent consideration arrangements arising from business combinations. Those arrangements are structured either as deferred purchase price payments or as put options
granted to non-controlling interests. The fair values of the financial liabilities arising from those arrangements are based on the expected payment amounts and are discounted to present value using a risk-adjusted
rate. The significant unobservable inputs are the forecasted performance targets (sales and/or profitability
measures) and the risk-adjusted discount rate. The sensitivity of the fair values to those unobservable inputs
are disclosed in Note 7.3.

Straumann Group

2020 Annual Report

IMPAIRMENT OF NON-FINANCIAL ASSETS
Non-financial assets are tested for impairment when there are indicators that the carrying amounts may not
be recoverable or when an annual impairment test is required, which is applicable for goodwill and thebrands with an indefinite useful life (Neodent, Medentika, ClearCorrect, Anthogyr and DrSmile).
When value-in-use calculations are undertaken, management has to estimate the expected future cash flows
from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present
value of those cash flows.
LEASES
Critical judgements relating to lease terms are required for lease accounting. In determining the lease term,
management considers all facts and circumstances that create an economic incentive to exercise an extension or termination option. The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment.
DEFERRED INCOME TAX ASSETS
In connection with the acquisition of the Brazilian company Neodent, the Group has capitalized deferred tax

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

133

assets in the amount of CHF 22.1 million as of 31 December 2020 (2019: CHF 37.7 million). The deferred tax
assets were generated through tax deductible goodwill and fair value step-ups stemming from mergers subsequent to Neodent’s acquisition through fully owned subsidiaries of the Group. Based on ongoing internaland external evaluations, the Group judges the capitalization of the deferred taxes as appropriate. Nevertheless, the Brazilian tax authorities have challenged the legality of the tax deductibility of the statutory goodwill and intangible assets at the competent Brazilian Administrative Court. In 2019, the case reached the second level of appeal and was ruled, as expected, against Neodent. The case did not progress since then, as the
Administrative Court has temporarily suspended case handling owing to the COVID-19 pandemic. The Group
is still determined to take the case to the regular judicial courts should the decision of the tax authorities be
upheld by the third appeal level of the Administrative Court. An unfavorable decision by the judicial court ispossible but considered unlikely by the Group at present. An unfavorable final verdict would affect theGroup’s financial statements in future years.
INCOME TAXESThe Group is subject to income taxes in numerous jurisdictions. Management judgment is required in determining the worldwide liabilities for income taxes. There are many transactions and calculations for which theultimate tax d­ etermination is uncertain during the ordinary course of business. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. When the final
tax outcome differs from the amounts that were initially recognized, the difference impacts current earnings.
Uncertain tax positions are included in current and non-current income tax liabilities.
PENSION AND OTHER EMPLOYMENT BENEFITS
The cost of defined benefit pension plans and other post-employment medical benefits is determined using
actuarial va­luations, which involve making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject
to s­ ignificant uncertainty. The net employee retirement benefit obligation at 31 December 2020 was
CHF 73.3 million (2019: CHF 67.9 million). Further details are given in Note 8.2.
1.5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESFOREIGN CURRENCY TRANSLATIONThe consolidated financial statements are presented in Swiss francs (CHF), which is Straumann Holding AG’s functional currency. Each entity in the Group determines its own functional currency, and items included in the fi­ nancialstatements of each entity are measured using this functional currency. Transactions in foreign currencies are­initially recorded at the functional currency rate at the date of the transaction. Monetary assets and liabilities­denominated in foreign currencies are retranslated at the functional currency exchange rate on the balance sheet
date. All differences are taken to profit or loss with the exception of differences arising on monetary items that in­substance form part of an entity’s net investment in a foreign operation. Non-monetary items that are measured
in terms of historical costs in a foreign currency are translated using the exchange rates on the dates of the initialtransactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined. Any goodwill arising from the acquisition of a foreign operation and any fair value adjustments to the ­carrying amounts of assets and liabilities arising from the a­ cquisition
are treated as assets and liabilities of the foreign operation and translated at the closing rate.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

The assets and liabilities of foreign operations are translated into Swiss francs at the exchange rate on the­balance sheet date, and their income statements are translated at the average exchange rates for the year.
The exchange d­ ifferences arising from the translation are taken directly to a separate component of other­comprehensive income. On disposal of a foreign entity, the deferred cumulative amount recognized in othercomprehensive income relating to that particular foreign operation is recognized in profit or loss.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment
losses. Such costs include the cost of replacing part of the plant and equipment when that cost is incurred.
Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant andequipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs
are recognized in profit or loss as incurred.
A straight-line method of depreciation is applied over the estimated useful life. Estimated useful lives of majorclasses of depreciable assets are:• Buildings: 20– 30 years• Plant, machinery and other equipment: 3–10 years.
Land is not depreciated as it is deemed to have an indefinite life. Leasehold improvements are depreciated overthe lease term including optional extension of the lease period but not exceeding its economic life.

Straumann Group

2020 Annual Report

An item of property, plant and equipment is derecognized when it is abandoned, removed or classified as‘held for sale’. For assets that are abandoned or removed, any remaining net carrying value is charged to profit
or loss. The residual values, useful lives and methods of depreciation of assets are reviewed, and adjusted
if appropriate, at the end of each financial year.
LEASESThe Group leases various buildings, plant and machinery and other equipment. Rental contracts are typicallymade for fixed periods but may have extension options as described below. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions.
Leases are recognized as a right-of-use asset and a corresponding liability (included in financial liabilities) at
the commencement of the lease. Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to income statement over the lease period so as to produce a constant periodic rate ofinterest on the remaining balance of the liability for each period.
RIGHT-OF-USE ASSETS
Right-of-use assets are measured at cost and comprise the following:• the amount of the initial measurement of lease liability• any lease payments made at or before the commencement date less any lease incentives received• any initial direct costs• restoration costs.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX134

The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on astraight-line basis.
LEASE LIABILITIES
Liabilities arising from a lease are initially measured on a present value basis, using country-specific incremental borrowing rates. This rate is calculated based on the risk-free rate of the country plus a premium considering the Group’s risk premium. The following lease payments are included in the net present value:• fixed payments (including in-substance fixed payments), less any lease incentives receivable• variable lease payments that are based on an index or a rate
• amounts expected to be payable by the lessee under residual value guarantees• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line
basis as an expense in the income statement. Short-term leases are leases with a lease term of 12 months orless. Low-value assets mainly comprise IT equipment.
Extension and termination options are included in a number of lease contracts across the Group. These terms
are used to maximize operational flexibility in terms of managing contracts. In determining the lease term,
management considers all facts and circumstances that create an economic incentive to exercise an extension option or not exercise a termination option. Extension options (or periods after termination options) areonly included in the lease term if the lease is reasonably certain to be extended (or not terminated).
This assessment is reviewed if a significant event or a significant change in circumstances occurs which
affects the assessment and that is within the control of the lessee. Lease liabilities are disclosed as part of thecurrent and non-current financial liabilities in the statement of financial position.
BUSINESS COMBINATIONS AND GOODWILLBusiness combinations are accounted for using the acquisition method. Identifiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measured initially at their fairvalues on the acquisition date, irrespective of any non-controlling interests. The excess of the costs of theacquisition above the fair value of the Group’s share of the identifiable net assets acquired is recorded as
goodwill. Goodwill is initially measured at cost. If the costs of the acquisition are less than the fair value ofthe net assets of the subsidiary acquired, the difference is recognized directly in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is allocated from the acquisition
date to each of the Group’s cash-generating units or groups of cash-generating units that are expected tobenefit from the synergies of the combination, irrespective of whether other assets or liabilities of theacquiree are assigned to those units.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORTINTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Acquired software
licenses are capitalized on the basis of the costs incurred to acquire and bring the specific software into
use. Intangible assets acquired in a business combination are identified separately and recognized at fairvalue at the date of a
­ cquisition. Following initial recognition, intangible assets are carried at cost, less any
accumulated amortization and any accumulated impairment losses. Internally generated intangible
assets, e­ xcluding development costs, are not capitalized and expenditure is reflected in profit or loss in theyear in which the expenditure is incurred.
Intangible assets with finite lives are amortized over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period
and the amortization method for an i­ ntangible asset with a finite useful life is reviewed at least at the endof each financial year. Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are accounted for by changing the amortization period or
method as appropriate, and are treated as changes in accounting estimates. The amortization expense on
intangible assets with finite lives is recognized in profit or loss in the expense category consistent with thefunction of the intangible asset.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually.
The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues
to be supportable.

Straumann Group

2020 Annual Report

The amortization methods applied to the Group’s intangible assets are summarized as follows:
Customer &distribution
relationships

Technology

Brands &trademarks

Development costs

Useful life

FiniteAmortization
methodStraight-line
basisTime period

Usually
7–15 years

Internallygeneratedor acquired

Acquired

FiniteFinite/infinite

FiniteFiniteStraight-line
basis

Straight-line
basis/none

Straight-line
basis

Straight-line
basisOver estimated use- Usually
ful life but not
20 years/
exceeding 10 years not applicable

Over period of
expected sales
from the related
project but notexceeding 3 years

Over estimateduseful life but notexceeding 5 years

AcquiredInternallygenerated/acquired

Acquired

Acquired

SoftwareGains or losses arising from derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognized in the income statement when the asset is derecognized.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

135

IMPAIRMENT OF NON-FINANCIAL ASSETSAt each reporting date, the Group assesses whether there is an indication that an asset may be impaired. If
any such indication exists, or when annual impairment testing for an asset is required, the Group estimates
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating
unit’s fair value less costs to sell and its value in use, and is determined for an individual asset, unless theasset does not generate cash inflows that are largely independent of those from other assets or groups ofassets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs tosell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded subsidiaries, or other available fair value indicators.
Impairment losses of continuing operations are recognized in the income statement in the expense categories consistent with the function of the impaired asset. For assets excluding goodwill and intangible assets
with indefinite life, an assessment is made at each reporting date as to whether there is any indication that
previously recognized impairment losses may no longer exist or may have decreased. If there is such an indication, the Group makes an estimate of the recoverable amount.
A previously recognized impairment loss is reversed only if there has been a change in the estimate used todetermine the asset’s recoverable amount since the last impairment loss was recognized. If this is the case,the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
been r­ ecognized for the asset in prior years.
Goodwill and intangible assets with indefinite life are tested annually for impairment or whenever there are
impairment indicators. Impairment is determined by assessing the recoverable amount of the cash-generating units to which the goodwill and intangible assets with indefinite life relate. Where the recoverable
amount of the cash-generating units is less than their carrying amount an impairment loss is recognized.
Impairment losses relating to goodwill cannot be reversed in future periods. The Group performs its annual
impairment test of goodwill and intangible assets with indefinite life on 30 November.
FINANCIAL ASSETSThe Group recognizes a financial asset on the trade date at which it becomes a party to the contractual obligations of the instrument. Financial assets are initially measured at fair value. Acquisition-related costs are to
be included, unless the financial asset is measured at fair value in subsequent periods. The Group subsequently measures financial assets at either amortized cost or fair value.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

The Group has the following categories of financial assets:
FINANCIAL ASSETS MEASURED AT AMORTIZED COST
A financial asset is subsequently measured at amortized cost, using the effective interest method and net ofany impairment loss, if:• the asset is held within a business model with an objective to hold assets in order to collect contractual cash
flows; and• the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest.
FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets other than those classified as measured at amortized cost are subsequently measured at fairvalue with all changes in fair value recognized in profit or loss.
FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OCI
For investments in equity instruments that are not held for trading, the Group elected at initial recognition topresent gains and losses in other comprehensive income. Gains and losses are never reclassified to theincome statement and no impairments are recognized in profit or loss. Dividends earned from such investments are recognized in the income statement unless the dividend clearly represents a repayment of part ofthe cost of the investment.

Straumann Group

2020 Annual Report

FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value of financial instruments that are actively
traded in organized financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. In the case of financial instruments for which there is no active market, fair value isdetermined using valuation techniques such as recent arm’s length market transactions, the current market valueof another instrument that is substantially the same, discounted cash flow analysis or other valuation models.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are measured at amortized cost using the effective interest method less any
impairment losses. Non-interest receivables are discounted by applying rates that match their maturity upon
first-time recognition. Trade receivables that do not contain a significant financing component or for which theGroup has applied the practical expedient are measured at the transaction price determined under IFRS 15.
IMPAIRMENT OF FINANCIAL ASSETSAt each balance sheet date, the Group assesses whether a financial asset or group of financial assets is impaired.
The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fairvalue through profit or loss. ECLs are based on the difference between the contractual cash flows due inaccordance with the contract and all the cash flows that the Group expects to receive, discounted at an

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

136

approximation of the original effective interest rate. The expected cash flows will include cash flows from thesale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase incredit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been asignificant increase in credit risk since initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does
not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience,adjusted for forward-looking factors specific to the debtors and the economic environment.
INVENTORIESInventories are valued at the lower of cost or net realizable value. Raw material costs are determined by using
the weighted average cost method. The cost of finished goods and work in progress comprises direct materials and labor and a proportion of manufacturing overhead, valued at standard cost. Standard costs are regularly reviewed and, if necessary, revised to reflect current conditions.
Net realizable value is the estimated selling price in the ordinary course of business less estimated costs ofcompletion and the estimated costs necessary to make the sale. Work in progress and finished goods are­valued at manufacturing cost, ­including the cost of materials, labor and production overheads. Inventory
write-downs are recorded in the case of slow-moving or obsolete stock.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the statement of financial position comprise cash at banks, cash on hand, andshort-term deposits with an ­original maturity of three months or less. For the purpose of the consolidated
cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net ofshort-term bank overdrafts.
PUT OPTIONS TO NON-CONTROLLING INTERESTS
It is common practice for the Group to write put options and acquire call options in connection with the remaining shares held by the non-controlling shareholders mainly as part of a business combination. If the Group has
acquired a present ownership interest as part of a business combination, the present value of the redemption
amount of the put option is recognized as a financial liability with any excess over the carrying amount of the
non-controlling interest recognized as goodwill. In such a case, the non-controlling interest is deemed to havebeen acquired at the acquisition date and therefore any excess arising should follow the accounting treatment
as in a business combination. All subsequent changes in the redemption value of the financial liability are recognized in the income statement and no earnings are attributed to the non-controlling interest.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

However, where the Group has not acquired a present ownership interest as part of a business combination,
the non-controlling interest continues to receive an allocation of profit or loss and is reclassified as a financial
liability at each reporting date as if the acquisition took place at that date. Any excess over the reclassified
carrying amount of the non-controlling interest and all subsequent changes in the redemption value of thefinancial liability are recognized directly in retained earnings.
TRADE PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course ofbusiness from suppliers. Trade payables are classified as current liabilities if payment is due within one year orless (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using
the effective interest method.
FINANCIAL LIABILITIESINTEREST-BEARING LOANS AND BORROWINGSAll loans and borrowings are initially recognized at fair value less directly attributable transaction costs,
and have not been designated as at fair value through profit or loss. After initial recognition, interestbearing loans and borrowings are measured at amortized cost using the effective interest method. Gains
and losses are recognized in profit or loss when the liabilities are derecognized as well as through theamortization process.

Straumann Group

2020 Annual Report

FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities ­designated upon initial recognition as at fair value through profit or loss.
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGINGThe Group uses derivative financial instruments, such as forward currency contracts and interest rate
swaps, to hedge its risks associated with fluctuations in interest rates and foreign currencies. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract isentered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fairvalue is positive and as liabilities when the fair value is negative.
Derivative instruments that do not qualify for hedge accounting are classified as financial assets at fair value
through profit or loss (if positive), or as financial liabilities at fair value through profit or loss (if negative).
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognized immediately in the income statement.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

137

For the purpose of hedge accounting, hedges are classified as:• fair value hedges – when hedging the exposure to changes in the fair value of a recognized asset, or liability,
or an unrecognized firm commitment (except for foreign currency risk)• cash flow hedges – when hedging exposure to variability in cash flows that is either attributable to a­particular risk associated with a recognized asset or liability, or a highly probable forecast transaction or theforeign currency risk in an unrecognized firm commitment• hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item ortransaction, the nature of the risk ­being hedged and how the entity will assess the hedging instrument’s
effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable
to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fairvalue or cash flows and are assessed on an ongoing basis to determine that they actually have been highly
effective throughout the financial reporting periods for which they were designated.
PROVISIONS
Provisions are recognized when the Group has a present obligation (legal or constructive) resulting from apast event and it is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation, and a reliable estimate can be made of the amount of the obligation. The expense
relating to any provision is presented in the income statement, net of any reimbursement. If the effect of
the t­ ime-value of money is material, provisions are discounted. Where discounting is used, the increase in
the provision due to the passage of time is recognized as a finance expense.
EMPLOYEE BENEFITSPENSION OBLIGATIONSThe Group operates various post-employment schemes, including both defined benefit and defined contribution pension plans.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate
entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not holdsufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans
define an amount of pension benefit that an employee will receive on retirement, usually dependent on one
or more factors such as age, years of service and compensation.
The liability recognized in the statement of financial position in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the end of the reporting period less the fair value ofplan assets. The defined benefit obligation is calculated annually by independent actuaries using theHIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

FINANCIALREPORT

APPENDIX

138

No expense is recognized for awards that do not ultimately vest. Where the terms of an equity-settledaward are modified, the minimum expense recognized is the expense if the terms had not been­modified. An additional expense is recognized for any modification that increases the total fair value ofthe share-based payment arrangement, or is otherwise beneficial to the employee as measured at thedate of modification.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions arecharged or credited to equity in other comprehensive income in the period in which they arise. Past-service
costs are recognized immediately in the income statement.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit
expenses when they are due. Prepaid contributions are recognized as an asset to the extent that a cash
refund or a reduction in future payments is available.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, andany expense not yet recognized for the award is recognized immediately. However, if a new award is­substituted for the cancelled award, and designated as a replacement award on the date of grant, the­cancelled and new awards are treated as if they were a modification of the original award, as described in
the previous paragraph.

SHORT-TERM EMPLOYEE BENEFITS – BONUSES
As part of the annual compensation, most employees receive a bonus which depends on the course of business. The individual bonus is calculated by multiplying an individual base amount with a mix of financial,
functional and individual target achievements which varies by hierarchical level and function. The bonus is
usually settled in cash during the first quarter of the subsequent year.

Selected employees have the right to buy Straumann shares. The difference between the fair value at grant
and the cash consideration paid by the employees is immediately recognized as personnel expense.

SHARE-BASED COMPENSATIONThe Board of Directors, Executive and Senior Management receive part of their remuneration in the form ofshare-based payment transactions, whereby these individuals render services as consideration for equity
instruments (equity-settled transactions).

2020 Annual Report

COMPENSATIONREPORT

projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation. In countries where there is no deep market in suchbonds, the market rates on government bonds are used.

The Group recognizes a liability and an expense for these bonuses based on calculations which adequately
consider all these parameters.

Straumann GroupCORPORATEGOVERNANCE

The cost of equity-settled transactions is measured with reference to the fair value at the date on which they
are granted. The fair value is determined either based on observable market prices or by external valuation
experts using an appropriate pricing model, further details of which are given in Note 8.3.
The cost of equity-settled transactions is recognized, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfilled, ending on the date on
which the Board of Directors, Executive and Senior Management become fully entitled to the award(the vesting date).
The cumulative expense recognized for equity-settled transactions at each r­ eporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of thenumber of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized at the beginning and end of that period.

The dilutive effect of outstanding performance share units (PSUs) is reflected as additional share dilution
in the computation of earnings per share (Note 3.2).

GOVERNMENT GRANTS
Government grants are recognized where there is reasonable assurance that the grant will be received, andall attached conditions will be complied with. When the grant relates to an expense item, it is recognized asother income on a systematic basis over the periods that the related costs for which it is intended to compensate are expensed. When the grant relates to an asset, it is recognized as income in equal amounts over the
expected useful life of the related asset.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal
amounts and released to profit or loss over the expected useful life of the asset, based on the pattern of­consumption of the benefits of the underlying asset by equal annual installments.
REVENUE RECOGNITION
Revenues on the sale of the Group’s products and services are recognized when a contractual promise to acustomer (performance obligation) has been fulfilled by transferring control over the promised goods andservices to the customer, generally at the point in time of shipment to, or receipt by, the customer, or when
the services are performed.
The amount of revenue to be recognized is based on the consideration the Group expects to receive in
exchange for its goods and services. If products are sold with a right of return and future returns can be­reasonably estimated, a refund liability (included in trade and other payables) and a right of return asset(included in trade and other receivables) are recognized. In doing so, the estimated rate of return is applied,determined based on historical experience of customer returns and considering any other relevant factors.
This is applied to the amounts invoiced, also considering the amount of returned products to be destroyed

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORTversus products that can be placed back in inventory for resale. The Group’s obligation to provide a refund for
faulty products under the warranty terms is recognized as a provision.
DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERSThe Group derives revenue from contracts with customers in the geographical regions disclosed in Note 3.1.
RELATED PARTIES
A party is related to an entity if the party directly or indirectly controls, is controlled by or is under common
control with the entity; or if it has an interest in the entity that gives it significant influence over the entity;or if it has joint control over the entity or is an associate or a joint venture of the entity. In addition, members
and dependents of the Key Management P­ ersonnel of the entity (Board of Directors and Executive Management Board) are also considered related parties.
TAXES
CURRENT INCOME TAX
Current income tax assets and liabilities for the current and prior periods represents the best estimate of
the tax amount expected to be paid or received and reflects uncertainty related to income taxes, if any.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted by the balance sheet date. Current income tax relating to items recognized directly in equity is­recognized in equity and not in the income statement.
DEFERRED INCOME TAX
Deferred income tax is determined using the liability method on temporary differences at the balance sheet
date between the tax base of assets and liabilities and their carrying amounts for financial reporting
purposes.

Straumann Group

2020 Annual Report

Deferred income tax liabilities are recognized for all taxable temporary differences, except:• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or a­liability in a ­transaction that is not a business combination and, at the time of the transaction, affects­neither the accounting profit nor taxable profit or loss
• in respect to taxable temporary differences associated with investments in subsidiaries and associates,
where the timing of the reversal of the temporary differences can be controlled and it is probable that thetemporary differences will not be ­reversed in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences and carry-forwards ofunused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and carry-forwards of unused tax credits andunused tax losses can be utilized, except:• where the deferred income tax asset relating to the deductible temporary difference arises from the initialrecognition of an asset or liability in a transaction that is not a business combination and, at the time of thetransaction, affects neither the accounting profit nor taxable profit or loss

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

139• in respect to deductible temporary differences associated with investments in subsidiaries and associates.
Deferred income tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced tothe extent that it is no longer probable that the deferred income tax assets can be utilized. Unrecognizeddeferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it
has become probable that future taxable profit will allow the deferred tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply for theyear in which the asset is realized or the liability is settled, based on tax rates (and tax laws) that have beenenacted or substantively enacted at the balance sheet date. Deferred income tax relating to items recognizeddirectly in equity is recognized in equity and not in the income statement.
Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists
to set current income tax assets off against current income tax liabilities, and the deferred income taxes
relate to the same taxable entity and the same taxation authority.
SALES TAXESRevenues, expenses and assets are recognized net of the amount of sales tax, except:• where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part ofthe expense item
• in the case of receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part ofreceivables or payables in the statement of financial position.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

2 INVESTMENTS
2.1 BUSINESS COMBINATIONSTRANSACTIONS IN 2020
DRSMILEOn 11 August 2020, Straumann acquired a 74.9% stake in SmileCo GmbH (‘DrSmile’). Based on a call and put
option agreement, the Group will obtain the remaining shares after 31 August 2021. As the Group has
acquired a present ownership interest in the shares considering the equivalent terms of the call and put
options, those shares are accounted for as acquired.
Based in Berlin, Germany, DrSmile is a fast-growing provider of orthodontic treatment solutions in Europe.
The company combines direct-to-consumer (DTC) marketing expertise with doctor-led treatment and complements Straumann’s existing clear aligner business. DrSmile has built up a network of partner practices
across Germany and has also started to expand internationally in Austria and Spain.
The Group measured the acquired lease liabilities using the present value of the remaining lease payments atthe date of acquisition. The right-of-use assets were measured at an amount equal to the lease liabilities andadjusted to reflect the favourable terms of the lease relative to market terms.
The fair value of intangible assets related to brand is determined using a relief from royalty method. The fairvalue of the intangible assets related to the distribution network is determined using an excess earning
method. The methods are based on management business plans, observable market data for risk-adjusted
discount rates, tax rates and foreign exchange rates. Goodwill, which is not deductible for tax purposes, comprises intangible assets that are not separable such as expected synergy effects and employee know-how.

Straumann Group

2020 Annual Report

From the acquisition date DrSmile contributed revenues of CHF 18.7 million, with no material impact on net
profit. If DrSmile had been included as of 1 January 2020, management estimates the impact on consolidated
revenues and consolidated net income for the twelve months ended 31 December 2020 would have been
CHF 39.7 million and no material impact on net profit.
ARTIS BIO TECH
Besides DrSmile, the Group conducted the business combination of Artis Bio Tech, a Romanian distributorof dental implant systems. This business combination had no material impact on the Group’s revenues or
net profit, neither from the acquisition date, nor when considering an inclusion of the acquisition as of
1 January 2020.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

140

The fair values of the identifiable assets and liabilities at the respective business combination date are as
follows:(in CHF 1 000)

DrSmile Artis Bio Tech

AssetsProperty, plant and equipment

­530

­128

12 395­0

Brand

38 036

1 055

Distribution relationships

13 878­0

Customer relationships

­0

3 162

Other intangible assets­5­0Right-of-use assets
Intangible assets:

Deferred tax assets

­25

­0

Inventories

­0

­16

5 023

­102

Trade and other receivables
Financial assets

­106

­0

Cash and cash equivalents

18 534­19

Total assets

88 533

4 482

Financial liabilities

17 460­61

Deferred income tax liabilities

15 575­0Trade and other payables

6 299

­6

Total liabilities

39 334­67

Liabilities

TOTAL IDENTIFIABLE NET ASSETS AT FAIR VALUE

49 199

4 415

Goodwill

82 977

3 907

Consideration

132 176

8 322

Satisfied in cash

55 8585 277

Contingent consideration

76 3183 045

Consideration

132 176

8 322

Cash flow
Net cash acquired

18 534­19

Cash paid(55 858)(5 277)NET CASH FLOW

(37 324)(5 258)At the date of the business combination, the fair values of trade receivables amounted to CHF 0.5 million
from DrSmile, CHF 0.1 million from Artis Bio Tech. The fair values did not materially differ from the contractual gross amounts.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

Contingent consideration payments depend on the performance of both acquired businesses. At the balancesheet date, the fair value of these financial liabilities collectively amounted to CHF 80.5 million.
TRANSACTIONS IN 2019ANTHOGYR GROUP
On 21 May 2019 the Group increased its stake in the French Group Anthogyr from 30% to full ownership.
Anthogyr develops, manufactures and sells high quality, innovative implant and CADCAM solutions. As aresult, the Group obtained control and started to consolidate Anthogyr in its financial statements from that
date. Until 20 May 2019, Anthogyr was accounted for using the equity method and therefore the Group’s
share of results was reported as share of results of associates in the Group’s income statement.
The fair value of intangible assets related to brand is determined using a relief from royalty method. The fairvalue of the intangible assets related to customer relationships is determined using an excess earning
method. The methods are based on management business plans, observable market data for risk-adjusted
discount rates, tax rates and foreign exchange rates. Goodwill, which is not deductible for tax purposes, comprises intangible assets that are not separable such as expected synergy effects and employee know-how.
From the acquisition date Anthogyr contributed revenues of CHF 30.3 million, with no material impact on net
profit. If Anthogyr had been included as of 1 January 2019, management estimates the impact on consolidated revenues and consolidated net income for the twelve months ended 31 December 2019 would havebeen CHF 51.2 million and no material impact on net profit.

Straumann Group

2020 Annual Report

BAY MATERIALS, LLC
On 23 October 2019 the Group has acquired Bay Materials, LLC. Based in Fremont, US, the company is specialized in the design, development and supply of high-performance thermoplastics for orthodontic applications.
The Group obtained control and started to consolidate Bay Materials in its financial statements from the dateof acquisition.
The fair value of intangible assets related to brand is determined using a relief from royalty method. The fairvalue of the intangible assets related to technology is determined using an excess earning method. The methods are based on management business plans, observable market data for risk-adjusted discount rates, tax
rates and foreign exchange rates. Goodwill, which is not deductible for tax purposes, comprises intangible
assets that are not separable such as expected synergy effects and employee know-how.
The business combination had no material impact on the Group’s revenues or net profit, neither for theperiod from 23 October 2019 to 31 December 2019, nor when considering an inclusion of Bay Materials as of
1 January 2019.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX141

OTHER BUSINESS COMBINATIONS
Besides Anthogyr and Bay Materials, the Group conducted eight additional business combinations:• Zinedent Implant Uretim Anonim Sirketi (‘Zinedent’)• etkon (Schweiz) AG• Valoc AG• Abutment Direct Inc• The Chilean distributor of Alpha Bio• Medikadent d.o.o.
• Digital Planning Service Private Limited• Yller Biomateriais S.A.
These business combinations had no material impact on the Group’s revenues or net profit, neither from theacquisition date, nor when considering an inclusion of these acquisitions as of 1 January 2019.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

The fair values of the identifiable assets and liabilities at the respective business combination date are as
follows:(in CHF 1 000)

Anthogyr Bay Materials

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX142

At the date of the business combination, the fair values of trade receivables amounted to CHF 9.5 million
from Anthogyr, CHF 0.8 million from Bay Materials and CHF 2.5 million from other business combinations.
The fair values did not materially differ from the contractual gross amounts.
Other

AssetsProperty, plant and equipment

11 024

­613

1 627

Right-of-use assets

4 566

2 023

6 778

Brand

13 500

2 975

­523

Customer relationships

1 880

­0

7 889

­0

6 569

3 933

­628

­17

­805

Contingent consideration payments depend on the performance of the acquired businesses. In two cases theGroup has written put options granting the holders of the non-controlling interests the right to sell theirremaining shares to the Group.

Intangible assets:

Technology
Other intangible assets
Deferred tax assets

­0

­0

­613

Inventories

17 529

­835

4 103

Trade and other receivables

15 017

­912

4 058

Cash and cash equivalents

(775)

­653

2 060

63 36914 59632 389Total assets
Liabilities
Financial liabilities

15 840

2 023

7 495

Deferred income tax liabilities

5 152

2 443

2 157

Provisions and other long term liabilities

1 151

3 025

1 278

Trade and other payables

11 650

1 384

6 268

Total liabilities

33 7938 874

17 197

As a result of derecognizing its equity interest in the former associates Zinedent, Valoc AG, Abutment Direct
Inc and Anthogyr, the Group realized a fair value gain of CHF 6.0 million. The related translation losses of
CHF 0.4 million have been reclassified from comprehensive income to the income statement. Both effects areshown in a separate line in the income statement under ‘Gain on consolidation of former associates’.
2.2 INVESTMENTS IN ASSOCIATESThe Group has investments which are accounted for as associated companies. In 2020, the Group invested in
one associated company (Promaton Holding B.V). Anthogyr SAS is not included anymore as the Groupobtained control over Anthogyr on 21 May 2019 (Note 2.1).
From a Group perspective, the associates botiss medical AG, Berlin, Germany and Rapid Shape GmbH,­Heimsheim, Germany are material at the reporting date.
(in CHF 1 000)

botiss medical AG, Germany
Anthogyr SAS, France (until May 2019)2020 Annual Report2019
Net income
statement effectBalance sheetvalue

Net income
statement effect

41 556­957

41 526

(546)

­0

­0

­0

­362

TOTAL IDENTIFIABLE NET ASSETS AT FAIR VALUE

29 5765 722

15 191

Rapid Shape GmbH, Germany

20 638(157)

20 837(518)

Fair value of previously held interest(16 348)­0(11 793)

Others30 468(2 388)28 613(2 334)­0­0(2 594)

TOTAL

92 662(1 588)90 976(3 036)

Goodwill

24 91815 41342 222

Consideration

38 145

21 13543 025

Satisfied in cash

38 14513 19719 321­0

7 937

23 70438 145

21 13543 025

(775)

­653

2 060

Non controlling interest

Straumann Group

2020
Balance sheet
valueContingent consideration
Consideration

RAPID SHAPE GMBH

Cash flow
Net cash acquired

BOTISS MEDICAL AG
botiss medical AG is a leading international supplier of oral tissue regeneration products. It is a private entitythat is not listed on any public exchange. The Group has an interest of 30% in the entity. Management has
assessed the level of influence that the Group has on botiss medical AG and determined that it has significant
influence and therefore applies the equity method of accounting.

Cash paid(38 145)(13 197)(19 321)

NET CASH FLOW

(38 920)(12 544)(17 261)

Rapid Shape GmbH specializes in the development and manufacture of high-end 3D-printing systems for additive manufacturing. It is a private entity that is not listed on any public exchange. The Group has an interest of
35% in the entity. Management has assessed the level of influence that the Group has on Rapid Shape GmbHand determined that it has significant influence and therefore applies the equity method of accounting.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

The tables below provide summarized financial information for botiss medical AG and Rapid Shape GmbH.
The information disclosed reflects the amounts presented in the financial statements of these companies,
and not the Group’s share of those amounts. They have been amended to reflect adjustments made by theGroup when using the equity method, including fair value adjustments and modifications for differences inaccounting policies.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX143

OTHER INVESTMENTS:
In addition to the investments in botiss medical AG and Rapid Shape GmbH disclosed above, the Group also
has investments in other associates that are accounted for using the equity method. Considered individually
they are immaterial for the presentation of the Group’s financial statements.
The following table shows aggregated financial information about these other investments in associates:(in CHF 1 000)

2020
botissmedical AG

2019

Rapid ShapeGmbHbotissmedical AG

Rapid ShapeGmbH

Current assets

18 8316 088

16 426

6 919

Non-current assets

44 133

11 61942 22313 088Current liabilities(9 792)(2 791)(6 566)(4 182)

Non-current liabilities(10 009)(3 724)(9 206)(4 159)Net assets

43 163

11 19342 877

11 666

Opening net assets

42 877

11 66749 65514 085Result for the period

3 190

(447)

(1 820)(1 480)

Other comprehensive income

(145)

­0

­99

­0

(2 712)­0(3 260)(452)

RECONCILIATION TO CARRYING AMOUNTDividends declared
Currency translation adjustments

(48)

(27)

(1 797)(487)

Closing net assets at 31 December

43 162

11 19342 877

11 666

Group’s share in %

­30.0

­35.0

­30.0

­35.0

Group’s share in CHF

12 9493 917

12 863

4 083

Goodwill

30 557

17 68230 557

17 682Currency translation adjustments on goodwill(1 950)(961)(1 895)(928)

CARRYING AMOUNT

41 55620 63841 52620 837

Straumann Group

2020 Annual Report

Summarized comprehensive income statements of botiss medical AG and Rapid Shape GmbH for the period,
where the Group has significant influence:(in CHF 1 000)

2020

2019

botissmedical AG

Rapid ShapeGmbHbotissmedical AG

Rapid ShapeGmbH

Revenue

21 78414 15526 20916 435Result from continuing operations

3 190

(447)

(1 820)(1 480)RESULT FOR THE PERIOD

3 190

(447)

(1 820)(1 480)

Other comprehensive income/(loss)

(145)

­0

­99

­0

TOTAL COMPREHENSIVE INCOME/(LOSS)

3 045

(447)

(1 721)(1 480)(in CHF 1 000)

2020

2019

30 46828 613Result from continuing operations(2 388)(2 334)

RESULT FOR THE PERIOD(2 388)(2 334)­0

2 456(2 388)­122Aggregate carrying amount of individually immaterial associates
AGGREGATE AMOUNT OF GROUP’S SHARE OF

Other comprehensive income/(loss)
TOTAL COMPREHENSIVE INCOME/(LOSS)

3 OPERATING PERFORMANCE
3.1 OPERATING SEGMENTS
Operating segments requiring to be reported are determined based on the management approach. Accordingly,
external segment reporting reflects the internal organizational and management structure used within theGroup as well as the internal financial reporting to the Chief Operating Decision Maker (CODM), which has been
identified as the Executive Management Board (EMB). The EMB is responsible for the operational managementof the Group, in line with the instructions issued by the Board of Directors. It is also responsible for global strategy and stakeholder management.
The reporting segments are presented in a manner consistent with the internal reporting to the CODM. The centralized headquarter support functions (e.g. finance, information technology, human resources) as well as thefunctions Customer Solutions & Education and Research & Development are not operating segments, as they do
not earn separate revenues. These functions are grouped in the column Not allocated items.
SALES EUROPE
Sales Europe comprises the Group’s distribution businesses in Europe. It also includes Medentika’s distribution
business and its manufacturing plant in Germany (which produces implants and prosthetic components), theimplant-borne prosthetics business of Createch as well as the business of Anthogyr, a French company that develops, manufactures and sells dental-implant systems and CADCAM solutions. The segment also incorporates therecently acquired DrSmile, a leading provider of clinician-led clear aligner treatment solutions in Germany, Austriaand Spain and the Dental Wing’s distribution business in Europe. It includes segment-related management functions located inside and outside Switzerland.
SALES DISTRIBUTOR & EMERGING MARKETS EMEA
Sales Distributor & Emerging Markets EMEA comprises the Group’s distribution businesses mainly in Turkey andRussia, as well as the business with European, African and Middle Eastern distributors. It includes segmentrelated management functions located inside and outside Switzerland.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

SALES NAM
Sales NAM comprises the Group’s distribution businesses in the United States and Canada. It also includes
ClearCorrect’s clear aligner business and its associated development and production activities in the UnitedStates as well as the recently acquired US-based Bay Materials, a company specializing in the design, development and supply of high-performance thermoplastics for orthodontics applications. The segment also incorporates Dental Wings’ distribution business in the United States and Canada as well as its associated development
and production activities in Canada. It includes segment-related management functions located inside and­outside Switzerland.
SALES APAC
Sales APAC comprises the Group’s distribution businesses in the Asia pacific region, as well as the business with
Asian distributors. It further incorporates the business of T-Plus, a Taiwanese company that develops and manufactures dental-implant systems with distribution channels in Taiwan and China. It includes segment-related
management functions located inside and outside Switzerland.
SALES LATAM
Sales LATAM comprises the Group’s distribution businesses in Middle and South America as well as the businesswith Latin American distributors. It also includes Neodent’s distribution business in Brazil, as well as Neodent’s
business with Latin American distributors. It contains Neodent’s manufacturing plants in Brazil (which produce
implants, biomaterials, CADCAM products and clear aligners). The segment also incorporates the recently
acquired Yller Biomateriais, a Brazilian company specialized in developing and manufacturing high-tech materials for 3D-printing. It includes segment-related management functions located inside and outside Switzerland.

Straumann Group

2020 Annual Report

OPERATIONS
Operations acts as the principal towards all distribution businesses of the Group. It includes the principal production sites for implant components and instruments in Switzerland and the United States, the CADCAM milling
centers in Germany, Japan and the United States and the production site in Sweden for biomaterials and sterilepacked products. The segment also incorporates all corporate logistics functions. It does not include the manufacturing sites of Neodent, Medentika, ClearCorrect, Dental Wings, Createch, T-Plus, Anthogyr, Bay Materials andYller Biomateriais.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

144

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

145

APPENDIXINFORMATION ABOUT PROFIT OR LOSS, ASSETS AND LIABILITIES
2020(in CHF 1 000)

Sales
Sales
Europe D+EM EMEA

Sales
NAM

Sales
APAC

Sales Operations
Not allo- Eliminations
LATAM
cated items

Group

Revenue third party

504 881110 199440 226

280 364

90 181­0­0

Revenue inter-segment

80 556­0

14 168­031 275722 463­0(848 462)­0

Total revenue

585 437

110 199454 394

280 364

121 456722 463­0(848 462)

1 425 851

Depreciation & amortization(17 597)(1 689)(13 191)(10 692)(12 122)(23 945)(20 231)­0(99 467)

Impairment(21 634)(5 453)(92 181)(23 924)(6 783)

­0

­0

­0

(149 975)

Other expenses/income(523 915)(80 830)(431 875)(274 722)(97 524)(265 005)(168 493)

822 496 (1 019 868)

22 29122 227(82 853)(28 974)5 027

433 513(188 724)(25 966)

Operating result

1 425 851

Finance income and expense

156 541(41 045)

Share of result of associates(1 588)

Income tax expense(21 640)

NET RESULT

92 268Segment assets

630 185

111 403315 681149 222275 297483 603

88 610(326 550)

1 727 451

Unallocated assets, thereof:
Cash and cash equivalents

632 201

Deferred income tax assets

68 990Financial assets

27 309Investments in associates

92 662

GROUP
Segment liabilities

2 548 613
149 12247 59687 63970 42027 620124 345226 210(195 767)

537 185

Straumann Group

2020 Annual Report

Unallocated liabilities, thereof:
Deferred income tax liabilities

43 228Financial liabilities

758 257

GROUP
Addition in non-current assets

Transactions between the segments are eliminated in the course of consolidation and the eliminatedamounts are shown in ‘Eliminations’. The remaining operating profit under ‘Eliminations’ represents the netchange in inter-segment elimination of unrealized profits from the transfer of goods between Group
companies.
Addition in non-current assets consists of additions of property, plant and equipment, right-of-use assets andintangible assets.

1 338 670
15 179

2 627

6 005

7 610

9 751

52 446

93 618

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

146

APPENDIX

2019(in CHF 1 000)

Sales
Sales
Europe D+EM EMEA

Sales
NAM

Sales
APAC

Sales Operations
Not allo- Eliminations
LATAM
cated items

Group

Revenue third party

549 214

121 429486 973298 974

139 635­0­0Revenue inter-segment

54 603

­0

7 129

­74

26 355744 276­0(832 437)

1 596 225­0

Total revenue

603 817

121 429494 102299 048

165 990744 276­0(832 437)

1 596 225­0

(93 498)

Depreciation & amortization(13 342)(1 539)(2 258)(8 544)(15 455)(23 505)(28 856)

Other expenses/income(529 938)(81 637)(449 433)(291 506)(129 538)(252 202)(196 667)

815 335 (1 115 586)

60 53738 25342 411(1 002)20 997468 569(225 523)(17 102)

Operating result
Finance income and expense

387 140(24 602)

Gain on consolidation of former associates

5 967

Share of result of associates(3 036)

Income tax expense(57 440)

NET RESULT

308 029

Segment assets

498 007

99 244444 601

195 653387 601473 760

94 728(248 168)

1 945 426

Unallocated assets, thereof:
Cash and cash equivalents

260 211

Deferred income tax assets

59 993Financial assets

33 372

Investments in associates

90 976

GROUP
Segment liabilities

2 389 978118 669

41 84288 05897 43243 482124 435

126 122(149 660)

490 380

Unallocated liabilities, thereof:
Deferred income tax liabilities

36 887

Financial liabilities

495 489

Straumann Group

2020 Annual Report

GROUP
Addition in non-current assets

1 022 756
17 055

1 308

21 603

10 31818 78587 676

156 745

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

NON-CURRENT ASSETS BY LOCATION(in CHF 1 000)

2020

2019

Switzerland

246 154244 284

Germany

348 596

193 890

United States of America

253 683

289 000

Brazil172 636

246 079Other

271 009436 311

GROUP

1 292 078

1 409 564

COMPENSATIONREPORT

FINANCIALREPORT

REVENUES WITH EXTERNAL PARTIES(in CHF 1 000)

2020

2019

Implant Solutions

775 998

907 748

Restorative Solutions

383 795

435 209

Other

266 058

253 268

GROUP

1 425 851

1 596 225

BY PRODUCT CATEGORY

Net profit attributable to shareholders (in CHF 1 000)
Weighted average number of ordinary shares outstanding

Net profit used to determine diluted earnings per share (in CHF 1 000)

2020 Annual Report
Straumann GroupBY LOCATION OF CUSTOMER

Adjustments for instruments issued

Switzerland

31 42032 495Weighted average number of ordinary shares for diluted earnings per share

United States of America

396 302444 293

DILUTED EARNINGS PER SHARE (IN CHF)

Germany

192 075

175 669China

158 074

165 950

81 29181 185

Brazil73 780113 138Other

492 908583 451

GROUP

1 425 851

1 596 225

15 883 102

15 853 138

5.75

19.33

2020

2019

­91 282­306 473

15 883 102

15 853 138­41 728­60 506

15 924 830

15 913 644

5.73

19.26

3.3 OTHER INCOME(in CHF 1 000)Government grants• The product category Restorative Solutions comprises abutments and related parts as well as milling
elements

Insurance reimbursements

Revenues are allocated to countries based on the location of customers. The Group has a diverse and geographically widely spread customer base. No single customer accounts for 10% or more of total Grouprevenues.

2019­306 473

There have been no other transactions involving ordinary shares or potential ordinary shares between thereporting date and the date of completion of these financial statements.

• The product category Implant Solutions comprises primarily implants and related instruments• Other comprises scanner hardware, software licenses, orthodontics, biomaterials, customer training andother miscellaneous products.

2020­91 282

DILUTED EARNINGS PER SHARE
Diluted earnings per share are calculated by dividing the net profit for the year attributable to ordinary shareholders of S
­ traumann Holding AG by the weighted average number of ordinary shares outstanding during theyear, plus the weighted average number of ordinary shares that would be issued on the conversion of all the
dilutive potential of outstanding equity instruments into ordinary shares. The number of shares calculated asabove is compared with the number of shares that would have been issued assuming the exercise of the­Performance Share Units.

Weighted average number of ordinary shares outstanding

Japan

147

3.2 EARNINGS PER SHAREBASIC EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit for the year attributable to ordinary shareholders of S
­ traumann Holding AG by the weighted average number of ordinary shares outstanding during theyear, excluding ordinary shares purchased by the Group and held as treasury shares.

BASIC EARNINGS PER SHARE (IN CHF)

Non-current assets include property, plant and equipment (PPE), right-of-use assets, investments in associates and intangible assets.

APPENDIX

2020

2019

13 898

0

274

7 745

Rental income

1 521

1 799

Other

3 071

3 263

TOTAL OTHER INCOME

18 76412 807

As a response to the COVID-19 global pandemic, governments around the world have implemented measures
to help businesses and economies to withstand the negative impacts of the COVID-19 crisis. Mainly related toshort-time working subsidies in various countries, the Group has been awarded government grants in theamount of CHF 13.9 million in 2020 (2019: CHF nil).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX148

In May 2019 the main scanner production center of the Group’s subsidiary Dental Wings Inc. in Montreal,
Canada faced a material property damage from a fire incident. The Group maintains insurance to mitigate thelosses associated with property damage and business interruption and has a valid insurance policy that
includes coverage for the incident. In connection with those claims, the Group has recognized an income frominsurance recoveries in the amount of CHF 0.3 million (2019: CHF 7.7 million).
4 TANGIBLE AND INTANGIBLE ASSETS
4.1 PROPERTY, PLANT AND EQUIPMENT
2020(in CHF 1 000)

2019
Land

Buildings

Plant andmachinery

Other

Total

(in CHF 1 000)20 190183 129341 120

136 711681 150

At 1 January

COST
At 1 January

Straumann Group

2020 Annual Report

Change in consolidation scope - additions (Note 2.1)

Land

Buildings

Plant andmachinery

Other

Total

17 668140 795

278 151

131 424

568 037

COST
0

­128

­0

­530

­658

­0

2 782

9 280

1 201

13 263

Additions

4 941

25 95524 67715 26970 842

Additions

3 389

42 77769 65518 779134 599

Disposals

0

(836)

(6 150)(4 429)(11 414)

Disposals­0(1 755)(9 930)(10 867)(22 552)

Change in consolidation scope - disposals (Note 9.5)

0

(98)

(942)

(76)

(1 116)

Reclassifications

­0

­0

­0

­0

­0

Currency translation adjustments(4 251)(6 735)(21 539)(9 781)(42 306)

Currency translation adjustments(866)(1 470)(6 036)(3 825)(12 198)

At 31 December

20 880201 544337 166

138 223697 813

At 31 December

20 190183 129341 120

136 711681 150

ACCUMULATED DEPRECIATIONACCUMULATED DEPRECIATION

At 1 January(355 985)

At 1 January­0(89 149)(154 881)(93 801)(337 831)(14 031)(44 511)

Depreciation charge (Note 4.5)

­0

(6 131)(22 203)(14 111)(42 445)
20 059­0(93 154)(166 710)(96 121)

Change in consolidation scope (Note 2.1)

Depreciation charge (Note 4.5)

­0

(6 939)(23 541)

Impairment (Note 4.4)

­0

(539)

(4 937)(72)(5 549)

Disposals

­0

1 532

8 201

10 326

Disposals

­0

­328

5 194

3 148

8 670

Currency translation adjustments

­0

­594

2 172

1 466

4 232

Change in consolidation scope - disposals (Note 9.5)

­0

­74

­221

­49

­343

At 31 December­0(93 154)(166 710)(96 121)(355 985)

Currency translation adjustments

­0

1 654

7 257

3 853

12 765

At 31 December­0(98 576)(182 516)(103 174)(384 266)

NET BOOK VALUE

20 19089 975174 409

40 590325 164

20 880102 968

154 65035 049313 547

Repair and maintenance expenses for property, plant and equipment for the business year 2020 amounted to
CHF 9.5 million (2019: CHF 9.0 million).

NET BOOK VALUEHIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

149

4.2 RIGHT-OF-USE ASSETS
2020(in CHF 1 000)

2019
Buildings

Plant andmachinery

Other

Total

(in CHF 1 000)

252 6234 247

15 768272 638

At 1 January

COST
At 1 January

Buildings

Plant andmachinery

Other

Total

­0

­0

­0

­0
191 864

COST

Change in consolidation scope - additions (Note 2.1)

9 379

­0

3 015

12 395Initial application of IFRS 16

180 805

1 420

9 640

Additions

13 747­13

6 375

20 136

Change in consolidation scope (Note 2.1)

11 142

1 440

­785

13 367

Disposals(9 207)(433)(3 834)(13 475)

Additions98 801

1 481

7 019

107 301(35 229)

Change in consolidation scope - disposals (Note 9.5)

(226)

­0

­0

(226)

Disposals(33 902)­0(1 326)

Currency translation adjustments(10 565)

(189)

(747)

(11 501)

Currency translation adjustments(4 222)

(94)

(349)

(4 665)

At 31 December

255 752

3 638

20 577279 967

At 31 December

252 6234 247

15 768272 638

ACCUMULATED DEPRECIATIONACCUMULATED DEPRECIATION

At 1 January(16 756)(866)(4 433)(22 054)

At 1 January

Depreciation charge (Note 4.5)

(20 174)(1 150)(5 916)(27 240)

Depreciation charge (Note 4.5)

Disposals

1 586

­245

1 754

3 586

Change in consolidation scope - disposals (Note 9.5)

­144

­0

­0

­144

Currency translation adjustments

­916

­58

­207

1 181

At 31 December(34 283)(1 713)(8 388)(44 384)

NET BOOK VALUE

221 469

1 925

12 189235 584

­0

­0

­0

­0

(17 742)(885)(5 384)(24 012)
1 559

Disposals

­698

­0

­861

Currency translation adjustments

­289

­19

­91

­399

At 31 December(16 756)(866)(4 433)(22 054)

NET BOOK VALUE

235 868

3 381

11 335250 584

Besides the lease contracts recognized as right-of-use assets, the Group has entered into lease contracts withterms of 12 months or less and leases of low value. In 2020 the Group recognized expenses of CHF 3.1 million
related to short-term leases (2019: CHF 5.8 million) and CHF 1.9 million related to low value leases (2019:
CHF 1.9 million).

Straumann Group

2020 Annual Report

The Group recognized a total cash outflow for leases of CHF 31.5 million in 2020 (2019: CHF 29.5 million).
The maturity analysis of lease liabilities is disclosed in Note 9.2.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

150

4.3 INTANGIBLE ASSETS
2019

2020
(in CHF 1 000)

Goodwill

Brands Customer & Technology
Other
distribution
intangibles
relationships

Total(in CHF 1 000)

1 082 672

At 1 January

Change in consolidation scope - additions(Note 2.1)

599 224

124 073169 439

78 570111 366

536 010110 764

162 671

66 483100 854976 781143 019

Change in consolidation scope - additions(Note 2.1)

82 55216 9979 769

10 502

1 449

121 270

39 091

17 040­0Additions

­0

­0

­361

1 342

9 524

11 227

Additions

­0

­0

­4 68

­986

13 83715 291

Disposals

­0

­0

­0

­0

(2 669)(2 669)

Disposals

­0

­0

­0

­0

(4 100)(4 100)Currency translation adjustments(51 637)(17 002)(13 081)(4 365)(4 635)(90 720)

Currency translation adjustments(19 338)(3 689)(3 470)

­600

(673)

(26 570)

At 31 December

634 471

146 161

173 759

75 547

113 591

1 143 529

At 31 December

599 224

124 073169 439

78 570111 366

1 082 672

(118 724)(1 329)(112 202)(23 295)(68 789)(324 339)

At 1 January­5

ACCUMULATED AMORTIZATION AND
IMPAIRMENT(114 596)(1 460)(200)(97 547)(8 615)

Amortization charge (Note 4.5)
Impairment (Note 4.5)(120 109)

Currency translation adjustments(339 831)

At 1 January(15 137)(27 716)

Amortization charge (Note 4.5)

­0

(139)

(10 827)(6 195)(9 880)(27 041)­0(144 426)

Disposals

­0

­0

­0

­0

4 088

4 088

2 669

2 669

Currency translation adjustments

4 128

­8

2 920

(60)

­4 65

7 461

At 31 December(114 596)(1 460)(120 109)(29 551)(74 116)(339 831)

NET BOOK VALUE

484 628

122 61349 33049 01937 251

742 841(29 551)(74 116)(7 371)(5 008)(12 314)(25 950)

Disposals

2020 Annual ReportTotal

86 884

ACCUMULATED AMORTIZATION AND
IMPAIRMENT

Straumann Group

Brands Customer & Technology
Other
distribution
intangibles
relationships

COST

COST
At 1 January

Goodwill

1 930

­154

11 128

1 282

1 567

16 061

At 31 December(210 213)(10 120)(128 666)(59 227)(85 018)(493 243)

NET BOOK VALUE

424 258

136 04145 09316 32028 573650 285

Management assessed that the acquired brands DrSmile, Neodent, Medentika, ClearCorrect and Anthogyr
have an indefinite useful life. The Group supports the brands’ values through the internationalization of theircommercial usage. Other intangibles include mainly software, development costs and distribution rights.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

4.4 IMPAIRMENT TEST FOR NON FINANCIAL ASSETSANNUAL IMPAIRMENT TEST FOR GOODWILL AND INDEFINITE LIFE INTANGIBLE ASSETS
Goodwill and indefinite life intangible assets are allocated to cash-generating units (CGU) for the purpose of
impairment testing. A summary of goodwill and indefinite life intangibles allocation per CGU is presented
below:(in CHF 1 000)

2020

Goodwill

Brand withindefinite life

ClearCorrect Business

97 25630 120107 216

33 097

DrSmile83 57938 312

Neodent Business66 48931 93494 40545 342Global Premium Implant Business

62 824­065 585­0Medentika Business

42 23219 10442 31419 141

Anthogyr Business

24 92913 03724 10913 062­0­055 769

4 438

Other

46 949­0

95 230

2 694

TOTAL

424 258

132 507484 628

117 774

CLEARCORRECT BUSINESSThe CGU ClearCorrect Business (which is part of the operating segment Sales NAM) contains the manufacturing plant and the related sales activities for ClearCorrect products. The goodwill and the ClearCorrect brandhave been recognized as part of the acquisition of ClearCorrect in 2017.

2020 Annual Report

APPENDIX

151

2019
Brand withindefinite life

Except for the ‘Dental Wings Business’ and other smaller CGU’s disclosed as ‘Other’, the Group has not recognized any impairment or impairment reversal in 2020 or 2019.

Straumann GroupFINANCIALREPORT

GLOBAL PREMIUM IMPLANT BUSINESSThe CGU Global Premium Implant Business (which is part of the operating segment Operations) is the principal towards all distribution businesses of the Group for premium implant and restorative solutions andcontains the goodwill allocated to the principal recognized in acquisitions of companies distributing suchproducts on local markets.

Goodwill

Dental Wings Business

COMPENSATIONREPORTDRSMILE BUSINESSThe CGU DrSmile Business (which is part of the operating segment Sales Europe) contains the orthodontics
business of DrSmile in the European market. The goodwill and the DrSmile brand have been recognized aspart of the acquisition of DrSmile in 2020.
NEODENT BUSINESSThe CGU Neodent Business (which is part of the operating segment Sales LATAM) contains the manufacturing plant for Neodent products, the related sales activities in the Brazilian market and the export businesstowards the Group’s distribution principal and third party distributors. Both the goodwill and the ­Neodent
brand have been recognized as part of the acquisition of Neodent in 2015.

MEDENTIKA BUSINESSThe CGU Medentika Business (which is part of the operating segment Sales Europe) contains the manufacturing plant for Medentika products, the related sales activities in the German market, and the export businesstowards the Group’s distribution principal and third party distributors. Both the goodwill and the Medentika
brand have been recognized as part of the acquisition of Medentika in 2017.
ANTHOGYR BUSINESSThe CGU Anthogyr Business (which is part of the operating segment Sales Europe) contains the manufacturing plant for Anthogyr products, the related sales activities in the European market as well as the export business towards the Group’s distribution principal and third party distributors. Both the goodwill and the Anthogyr brand have been recognized as part of the acquisition of Anthogyr in 2019.
DENTAL WINGS BUSINESSThe CGU Dental Wings Business (which is part of the operating segment Sales NAM) contains the manufacturing operations for Dental Wings products, the related sales activities with third party distributors and theexport business towards the Group’s distribution principal. Both the goodwill and the Dental Wings brandhave been recognized as part of the acquisition of Dental Wings in 2017. The goodwill and the indefinite life
brand have been fully impaired in April 2020, as disclosed in the section below.
Goodwill and indefinite life intangibles have been tested for impairment. The recoverable amount of a CGU isdetermined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by Management covering a five-year period. Cash flows beyond the five-year period are
extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term
average growth rate for the dental implant, restoration and orthodontics sector.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

Key assumptions for the most material CGUs are as follows:(in %)

2020

2019

Gross profit margin of the CGU1

65.6

66.3

Terminal growth rate2

1.5

1.5

Weighted average cost of capital (WACC)3

13.6

13.2

DRSMILE BUSINESS
78.0

Terminal growth rate2

0.9

Weighted average cost of capital (WACC)319.0

NEODENT BUSINESS
Terminal growth rate2
Weighted average cost of capital (WACC)

3152

The Group believes that no changes in key assumptions which can rationally be expected would cause thecarrying amount of any CGU to exceed its recoverable amount.
2020 IMPAIRMENTS
Based on the expected economic consequences of the COVID-19 pandemic, the Group conducted a risk
assessment for each cash-generating unit (CGU) to identify whether the pandemic may trigger impairment
testing. The analysis concluded that a number of CGUs had to be tested for impairment and consequentially
the Group conducted value-in-use calculations on 30 April 2020. In the CGUs disclosed below, the carrying
amount exceeded the recoverable amount. As a result, the Group recognized impairment charges totaling
CHF 150.0 million.

71.6

73.6

4.5

4.5

15.1

14.7

Asset Cost of goods
sold(in CHF 1 000)

Dental Wings Business

Gross profit margin of the CGU1

65.1

72.2

Terminal growth rate2

1.5

1.5

Weighted average cost of capital (WACC)3

8.9

8.7

Brand
Total

2 144

Goodwill

Gross profit margin of the CGU

61.0

61.5

Customer relationships

Terminal growth rate2

1.5

1.5

Brand

Weighted average cost of capital (WACC)3

10.2

11.4

Property, plant and equipment

1 268

Total

1 268

1

Administrative expense

Total

52 59152 591

24 731

24 731

2 144

Technology

Other –
Implant Business India

MEDENTIKA BUSINESSDistribution
expense

Goodwill
Customer relationships

GLOBAL PREMIUM IMPLANT BUSINESS

2020 Annual Report

APPENDIX

A summary of the impairment charges by CGU and Asset is presented below:

Gross profit margin of the CGU1

Straumann GroupFINANCIALREPORT

Gross profit margin was determined by Management based on past performance and its expectations formarket development. The WACCs used are pre-tax and reflect specific risks relating to the relevant CGUs.

CLEARCORRECT BUSINESS

Gross profit margin of the CGU1COMPENSATIONREPORT

2 144
4 185

4 185

81 50783 65113 73113 731

2 662

2 662
­867

­867
1 268

2 662

14 59818 528Goodwill

9 287

9 287

Technology

1 219

1 219

Brand

2 623

2 623

Total

13 12913 129Goodwill

5 811

5 811

ANTHOGYR BUSINESS
Gross profit margin of the CGU1

51.8

83.0

Terminal growth rate2

1.5

1.2

Weighted average cost of capital (WACC)3

10.5

12.1

Other –Createch

DENTAL WINGS BUSINESS
Gross profit margin of the CGU1

–

64.7

Terminal growth rate2–

2.0

Weighted average cost of capital (WACC)3

–

16.4

1	Budgeted gross profit margin.
2	Used for calculating the terminal value.
3	Pre-tax discount rate applied to the cash flow projections.

Other –
Implant Business Iberia

Customer relationships

2 694

Total

2 694

2 694
5 811

8 505

HIGHLIGHTSSHAREHOLDERLETTER

Asset Cost of goods
sold(in CHF 1 000)

Other –
various CGU’s

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

Distribution
expense

Goodwill
Customer relationships

Total

Administrative expense

Total

16 12816 128

4 815

Brand
4 281

Total

4 281

­939
4 281

4 815

Goodwill

17 06626 16297 547

97 547

Technology

25 95025 950

Brand

8 615

8 615

­132 112

149 975

Customer relationships

Property, plant and equipment
TOTAL

12 31412 3145 549­5 549FINANCIALREPORT

APPENDIX(in %)

153
Apr 2020

Gross profit margin of the CGU1

31.1

Terminal growth rate2

2.0

Weighted average cost of capital (WACC)312.6

OTHER - IMPLANT BUSINESS IBERIA
Gross profit margin of the CGU1

70.0

Terminal growth rate2

2.0

Weighted average cost of capital (WACC)316.2

1	Budgeted gross profit margin.
2	Used for calculating the terminal value.
3 Pre-tax discount rate applied to the cash flow projections.

5 549­12 314

With the exception of the CGU Implant Business India the impairment charges are mainly caused by a­material downward reassessment of the market growth perspectives over the coming two to five years as aconsequence of reduced consumer confidence and hampered economic development as a result of the
COVID-19 pandemic. The impairment recognized on the Implant Business India CGU is due to the discontinuation of the Equinox sales and manufacturing activities and a reduced sales growth rate forecast for theremaining p­ roduct brands.
ASSUMPTIONS FOR VALUE-IN-USE CALCULATIONSThe key assumptions used for the value in use calculations are as follows:(in %)COMPENSATIONREPORT

OTHER - CREATECH

4 815
­939

Property, plant and equipment

CORPORATEGOVERNANCE

Apr 2020

4.5 DEPRECIATION AND AMORTIZATION(in CHF 1 000)

2020

2019

Depreciation of property, plant and equipment(44 511)(42 445)

Depreciation of right-of-use assets(27 240)(24 012)

Amortization of intangible assets(27 716)(27 041)(5 549)­0

Impairment of property, plant and equipment
Impairment of intangible assets(144 426)­0

TOTAL DEPRECIATION AND AMORTIZATION(249 442)(93 498)

5 NET WORKING CAPITAL
5.1 INVENTORIESStraumann Group

2020 Annual Report

DENTAL WINGS BUSINESS
Gross profit margin of the CGU1

57.1

(in CHF 1 000)

Terminal growth rate2

2.0

Raw materials and supplies

2020

2019

38 10738 540Weighted average cost of capital (WACC)3

16.0

Work in progress

57 51553 151Finished goods

120 947

142 862

OTHER - IMPLANT BUSINESS INDIATOTAL INVENTORIES

216 570

234 553

Gross profit margin of the CGU

32.0

Inventories recognized as an expense in Cost of goods sold(317 172)(338 015)

3.8

Obsolete inventories written down and recognized as an expense(5 146)(6 571)1

Terminal growth rate2
Weighted average cost of capital (WACC)

3

17.6

The Group performed an analysis of its product lines to investigate whether the average price at which they
were sold was below the current consolidated stock value. In both periods under review, no write-down to
the net realizable value had to be conducted. No reversal of the net realizable value write-down emerged in2020 and 2019.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

5.2 TRADE AND OTHER RECEIVABLES(in CHF 1 000)APPENDIX

154

Movements in the provision for impairment of trade receivables were as follows:
2020

2019

236 027

281 210(in CHF 1 000)

2020

2019

Other receivables, thereof:

58 523

97 116

At 1 January(24 286)(35 489)(14 833)(3 684)

Sales related

26 64433 739Charge for the year

VAT and other non-income taxes

25 44248 377

Utilized

Cash deposits

2 098

3 181

Unused amounts reversed

Prepaid rent

1 257

­963

Currency translation adjustments
AT 31 DECEMBER

1 001

­662

Salary and social security prepayments

­752

3 398

Government grants

­619

­660

Insurance receivable

­496

2 485

Interest

­59

1 386

Other

­156

2 264

TOTAL TRADE AND OTHER RECEIVABLES

294 550378 325

thereof: Other financial assets as defined by IFRS 7

29 29740 791CHF

12 12719 031EUR

83 38592 431

thereof:

3 700

­970

­807

13 477

1 616

­439

(32 996)(24 286)

The charge for the year in 2020 is mainly related to increased default risks due to the current market conditions as well as the business expansion. The Group continously reassesses its provision for impairment which
led to a partial reversal of the provision in 2019.
There is no provision on other receivables.
The analysis of overdue trade receivables is as follows:(in CHF 1 000)

2020
Gross

83 213

2019
Allowance

Gross

Allowance

USD

57 306BRL

36 05249 229Not past due

196 033(1 475)234 562

(752)

CNY

28 25748 722

Past due, thereof:

72 990(31 520)70 934(23 534)TRY

26 04720 427­< 30 days

19 339(158)

25 158

(614)

CAD

6 054

10 056­31 – 60 days

8 267

(419)

11 582

(871)

GBP

7 729

9 707

­61 – 90 days

6 252

(1 069)

6 170

(971)

­91 – 120 days

5 129

(1 946)6 343(2 282)

JPY

6 042

8 584

Other

31 55136 924­> 120 days
TOTAL

2020 Annual Report

FINANCIALREPORT

Trade receivables, net

Right of return asset

Straumann GroupCOMPENSATIONREPORT

Trade receivables are non-interest bearing. There is no concentration of credit risk with respect to tradereceivables, as the Group has a large number of customers who are dispersed internationally.
The insurance receivables in 2020 and 2019 relate to the fire incident in Dental Wings production site in­Montreal, Canada.

34 003(27 928)

21 680(18 796)

269 023(32 996)

305 496(24 286)

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

155

2019

508 713249 673

Trade payables

49 91963 207359 418173 478

Other payables, thereof:

267 672245 555

EUR

69 97717 604

Salary and social security

82 57395 173USD

25 00427 928

Sales related

93 74479 243CNY

20 3255 798

VAT and other non-income taxes

21 29739 145

JPY

5 625

2 982

Refund liability

17 98713 047

CAD

2 002

2 834

Contingent consideration

44 365

12 418

SEK

4 687

1 786

Interest accrued on straight bond (Note 7.2)

­987

2 180

RUB

1 960

­959

SGD

1 188

2 422

CHF

(in CHF 1 000)

Rent payable
Other

2020

2019

­314

­280

6 405

4 070

INR

­231

2 141

TOTAL TRADE AND OTHER PAYABLES

317 591

308 762

Other

18 296

11 741

thereof: other financial liabilities as defined by IFRS 7

139 41094 121

123 488

10 539

Short-term bank deposits, thereof:
CHF

60 000­0

BRL

18 5786 095

USD

39 775

­127

TRY

2 717

2 430

GBP

1 423

1 161

Other

­995

­727

632 201

260 211TOTAL CASH AND CASH EQUIVALENTS

Cash at banks earns interest at floating rates based on daily bank deposit rates in the respective currency.

2020 Annual Report

APPENDIX

2020

Cash at banks and on hand, thereof:

Straumann GroupFINANCIALREPORT

5.4 TRADE AND OTHER PAYABLES

5.3 CASH AND CASH EQUIVALENTS(in CHF 1 000)COMPENSATIONREPORT

In 2020, the contingent consideration mainly relates to DrSmile business combination (CHF 22.0 million) andBatigroup business combination (CHF 9.1 million). In 2019 the contingent consideration mainly related to­Batigroup business combination (CHF 7.4 million).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

6 PROVISIONS, OTHER NON-CURRENT LIABILITIES, CONTINGENCIES AND COMMITEMENTS
6.1 PROVISIONSCOMPENSATIONREPORT(in CHF 1 000)
Legal

Other

Total
2020

Total
2019

3 540

4 901

2 530

10 971

12 593

­0

­0

­0

­0

3 716

Utilization

(34)

(22)

(101)

(157)

(5 247)

Reversal

(821)

(458)

(1 616)(2 895)(1 016)

Additions

­160

8 116

­357

8 633

1 065

At 1 January
Change in consolidation scope

Currency translation adjustments

(205)

(808)

(68)

(1 081)(140)

At 31 December

2 640

11 7291 102

15 471

10 971

2 612

11 7291 095

15 436

Non-current 2020
Current 2020

­28

­0

­7

­35

TOTAL PROVISIONS 2020

2 640

11 7291 102

15 471

Non-current 2019

3 540

4 901

2 523

Current 2019
TOTAL PROVISIONS 201910 964

­0

­0

­7

­7

3 540

4 901

2 530

10 971

Legal provisions have been set up to cover legal and administrative proceedings that arise in the ordinary
course of the business in a number of jurisdictions. By their nature, the amounts and timings of any outflows
are difficult to predict. As part of the regular review of litigation matters, management has reassessed theprovisions recorded for certain litigation matters. Based on the development of the various litigations, there
was a net increase in legal provisions of CHF 7.7 million.
2020 Annual Report

156

Other provisions include disputes and uncertainties on non-income taxes (mainly VAT and sales taxes).

2020

2019

Contingent consideration

72 79336 770

Other long-term employee benefits

9 303

7 717

Rent payable

2 520

1 929

Non-income taxes

1 603

­245

­530

­4 08

Other
Government grants

­236

­576

TOTAL OTHER LIABILITIES

86 98647 645

thereof: other financial liabilities as defined by IFRS 7

75 31338 699In 2020, the majority of contingent consideration liability relates to the DrSmile business combination(CHF 55.5 million). In 2019 the contingent consideration mainly related to Batigroup (CHF 7.2 million) and Bay
Materials (CHF 7.1 million) business combinations.

The position sales-related contains provisions for product warranties and similar items based on contractual
arrangements.

Straumann Group

APPENDIX

6.2 OTHER NON-CURRENT LIABILITIESSales-related(in CHF 1 000)

FINANCIALREPORT

6.3 CONTINGENCIES AND COMMITMENTS
CONTINGENT ASSETS AND LIABILITIESThe Group has guarantee obligations with a maximum of CHF 5.4 million (2019: CHF 5.4 million). Some Group
companies are involved in litigations arising from the normal course of their business and might be liable topay compensations. The costs relating to these lawsuits may not be partially or fully covered by insurance.
How­ever, it is the view of the management that the outcome of such litigations will not significantly affect
the Group’s fi­ nancial position over and above the provisions already recognized in the statement of financial
position. The decrease in purchase commitments relates to the progress made in Group’s expansion projects
in various plants.
CONTINGENT LIABILITIES(in CHF 1 000)

2020

2019

Letter of credit facilities

5 379

5 394

Purchase commitments

1 214

2 449

TOTAL

6 593

7 843

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

7 FINANCING, CAPITAL AND TAX
7.1 FINANCIAL ASSETSCOMPENSATIONREPORT

FINANCIALREPORT

2020

2019(in CHF 1 000)

2020

2019

Straight bonds

479 726­0Loans and other receivables

9 125

21 703

Lease liabilities

216 387

231 642

Financial assets at fair value through other comprehensive income

10 866

9 725

Put options to non-controlling interests

26 601

26 674

Financial assets at fair value through profit or loss

7 013

­351

Financial liabilities at amortized costs

7 909

12 449TOTAL NON-CURRENT FINANCIAL ASSETS

27 00431 779TOTAL NON-CURRENT FINANCIAL LIABILITIES

730 622270 764

Financial assets at fair value through profit or loss

­289

1 578

Lease liabilities

Loans and other receivables

­16

­15

TOTAL CURRENT FINANCIAL ASSETS

­305

1 593

25 84023 879Financial liabilities at amortized costs

­952

­664

Financial liabilities at fair value through profit or loss

­749

­202

­94

199 980

27 635

224 725

Straight bonds

LOANS AND OTHER RECEIVABLES
This position includes various non-derivative financial assets carried at amortized cost which generate­variable interest income for the Group. The carrying value may be affected by changes in the credit risk of
the counterparties.
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Financial assets measured at fair value through other comprehensive income represent equity instruments inthe medical device sector and an investment in a fund. The Group did not recognize any dividend income
relating to these instruments during the periods under review.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
This category mainly includes a convertible bond from a non-listed US consumer health company in the­dental sector. Furthermore the category includes derivative financial instruments used by the Group to
hedge its foreign currency risk.

TOTAL CURRENT FINANCIAL LIABILITIESMovements in liabilities arising from financing activities are as follows:(in CHF 1 000)

2020

2019

At 1 January

495 489

261 883

Increase in non-current financial debt

479 031­0

Repayment of current financial debts(200 057)­0

Payment of lease liabilities(24 920)(22 905)

Change in consolidation scope

17 52125 357

Change in lease liabilities

16 620273 659

Other changes(8 352)(397)

Currency translation adjustments(7 191)(6 239)Interest paid on lease liabilities(6 626)(6 612)

Repayment in non-current financial debts(3 934)(2 755)

Change in fair values2020 Annual Report157

7.2 FINANCIAL LIABILITIES(in CHF 1 000)

Straumann Group

APPENDIX

Purchase of non-controlling interests
AT 31 DECEMBER

676

20 8630(47 365)758 257

495 489

The change in consolidation scope in 2020 mainly relates to the business combination of DrSmile (Note 2.1) andin 2019 mainly to the business combination Anthogyr.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCESTRAIGHT BONDS
On 30 April 2020 the Group repaid its CHF-denominated domestic straight bond of CHF 200 million which was
issued in April 2013.

The interest-bearing borrowings recognized in the financial position are calculated as follows:
2020

2019

Straight bond at 1 January­199 980

199 862

Repayment(200 000)­0Placement­479 726­0Interest expense­3 851

3 388

Redemption (Coupon)(3 736)(3 270)

thereof:

Straumann Group

2020 Annual Report

STRAIGHT BONDS AT 31 DECEMBER

158

The fair value of the put options granted to non-controlling interests relate to the business combination Valoc
AG and Abutment Direct Inc in 2019 and Medentika in 2017.

Denominations of the bonds are CHF 5 000 nominal and multiples thereof. The bonds have been admitted to
trading on the SIX Swiss Exchange with effect from 27 March 2020 until 3 October 2023 and from 10 June 2020
until 3 October 2025 respectively. Both are listed in accordance with the Standard for Bonds on the SIX Swiss
Exchange.

Disbursement

APPENDIXThe fair value of equity instruments quoted in an active market is based on price quotations at the periodend date. For domestic bonds listed on the SIX Swiss Exchange, the fair value is derived from quoted market
prices.

In July 2020, the Group placed an additional CHF-denominated domestic straight bond for an aggregate
amount of CHF 200 million, with issue date 15 July 2020 and an interest rate of 0.55% p.a., payable annually inarrears on 3 October. The bond is due for repayment on 3 October 2025.

Recognized in trade and other payables (Note 5.4)

FINANCIALREPORT

7.3 FINANCIAL INSTRUMENTS
FAIR VALUES
The carrying amount of cash and cash equivalents, trade and other receivables and trade and other payables
with a remaining term of up to twelve months, as well as other current financial assets and liabilities, represent a reasonable approximation of their fair values due to the short-term maturities of these instruments.

The Group placed a CHF-denominated domestic straight bond issue for an aggregate amount of CHF 280 million with issue date 3 April 2020 and interest rate of 1.00% p.a., payable annually in arrears on 3 October. The
bond is due for repayment on 3 October 2023.

(in CHF 1 000)COMPENSATIONREPORT(987)(2 180)(2 749)(1 090)­479 819­199 980

The fair value of derivatives is determined on the basis of input factors observed directly or indirectly on themarket. The fair value of foreign exchange forward contracts and non-deliverable forwards are based on­forward exchange rates.
The unquoted equity instruments allocated to Level 3 hierarchy relate to a fund that is dedicated exclusively
to investments in dental-related opportunities in China. As the market for this investment is not active or nomarket is available, fair value is determined based on the valuation techniques the fund uses to calculate its
net asset value.
The convertible bond allocated to Level 3 hierarchy relates to a non-listed US consumer health company in thedental sector. The convertible consists of a fixed-interest bond with an embedded American exchange option
on shares of the issuer. The fair value of the bond is determined using a discounted cash flow method and thefair value of the option is determined by using a modified binomial model for American call options.
Other financial liabilities allocated to Level 3 hierarchy mainly include the contingent considerations in relation to the business combinations of DrSmile in Germany, Batigroup and Zinedent in Turkey, Bay Materials in
the US and Digital Planning Service Private Limited in Pakistan. The fair value of the contingent considerationof DrSmile is based on revenue targets. The fair value of Batigroup and Zinedent contingent considerations isbased on a profitability component (local contribution) while the fair value of the contingent consideration of
Digital Planning Service is based on various company or product-related milestones. The fair value of the Bay
Materials contingent consideration is based on a mix of profitability components and product-related milestones. The fair value of investments in Level 3 is reviewed regularly for a possible diminution in value.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

159

FAIR VALUE HIERARCHYThe Group uses the following hierarchy for disclosure of the fair values of financial instruments by valuation
technique:• Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities• Level 2: Techniques for which all inputs which have a significant effect on the recorded fair value areobservable, either directly or indirectly• Level 3: Techniques which predominantly use input data which are not based on observable market data.
At 31 December 2020 and 2019 the Group held the following financial instruments:
2020(in CHF 1 000)

2019
Carrying amount (by measurement basis)
Amortized
cost

Level 1

Level 2

Level 3

Fair Value(in CHF 1 000)

Total
carrying
amount

FINANCIAL ASSETS­289

Equity instruments

6 642

­289
5 074

Convertible bonds

6 163
9 141

Derivative financial assets

11 716Equity instruments

6 163

Convertible bonds

9 141

Loans and other financial receivables

Fair Value

Level 3Total
carrying
amount

4 762

10 165

1 137
5 403

1 137
­351

21 718­351
21 71829 29729 297

Other financial assets

40 79140 791

Trade receivables

236 027

236 027

Trade receivables

281 210281 210

Cash and cash equivalents

632 201

632 201

Cash and cash equivalents

260 211260 211479 819479 819491 178­749­

FINANCIAL LIABILITIESFINANCIAL LIABILITIES

Derivative financial liabilities­749

Put options to non-controlling interests

2020 Annual Report

Level 2Other financial assets

Straight bonds

Straumann Group

Level 1FINANCIAL ASSETS

Derivative financial assets

Loans and other financial receivables

Carrying amount (by measurement basis)
Amortized
cost

Lease liabilities

26 601
242 226

199 980

Derivative financial liabilities

199 980­202­202

26 601

Put options to non-controlling interests

242 226

Lease liabilities

255 521255 521

Other financial liabilities

13 113

13 113

Trade payables

63 207

Other financial liabilities

83 632Other financial liabilities

8 860

8 860

Trade payables

49 91949 919Other financial liabilities

97 564117 158

Straight bond214 722­26 67426 67463 20749 188132 820

201 430

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

The changes in carrying values associated with Level 3 financial instruments are set as follows:(in CHF 1 000)

2020

2019

FinancialassetsFinancialliabilities

FinancialassetsFinancialliabilities

At 1 January

5 113

75 8627 135

80 724

Additions

5 488

79 363­0

43 926

Settlements(363)(12 554)(160)(55 780)

Remeasurement recognized in profit or loss

­323

3 127

­0

(579)

Remeasurement recognized in OCI­675(1 965)(1 862)(780)

Remeasurement recognized in equity
AT 31 DECEMBER

­0

(74)

­0

8 351

11 237

143 759

5 113

75 862

In 2020, the additions to Level 3 financial liabilities relate to contingent consideration payables (business combinations DrSmile and Artis Bio Tech). In 2019, the additions to Level 3 financial liabilities related to contingent
consideration payables (mainly business combinations Bay Materials and Digital Planning Service Private­Limited) and put options written to noncontrolling interests (mainly business combinations Valoc AG and­Abutment Direct Inc).
Settlements in Level 3 financial liabilities in 2020 mainly relate contingent consideration payments in conjunction with the Batigroup business combination (CHF 8.3 million).
In 2019, settlements mainly related to the purchase of non-controlling interests from the minority shareholders
of Medentika (CHF 47.4 million) as well as contingent consideration payments in conjunction with the Batigroupbusiness combination (CHF 6.8 million).

Straumann Group

2020 Annual Report

In 2020 and 2019, there were no transfers between Level 1 and Level 2 fair value measurements and no transfers into or out of Level 3 fair value measurements.
The significant unobservable inputs for material financial instruments within Level 3 of the fair value hierarchy and their quantitative sensitivity analysis at 31 December 2020 are as follows:

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

160

Instrument

Valuation techniqueSignificant
unobservable inputRange

Put options to
non-controllinginterests ofMedentika

PV of the estimatedredemption value by
the Group in theevent of full exercise

Enterprise value(based on EBITDA
multiple)

Floor: CHF 8.6 million 1 000 base-point decrease in
Cap: CHF 14.3 million enterprise value would result in adecrease in fair value ofkCHF –1 433 (2019: kCHF 1 422)

Contingent
Consideration
DrSmilePV of the estimatedredemption value

Revenue–

500 base-point increase(decrease) in revenue would
result in an increase (decrease) infair value of kCHF 3 607, resp.
kCHF –3 607

Interest rate–

100 base-point increase(decrease) in the interest ratewould result in a decrease(increase) in fair value ofkCHF –1 360, resp. kCHF 1 404

Local contribution–

500 base-point increase(decrease) in the local contribution would result in an increase(decrease) in fair value ofkCHF 514 (2019: kCHF 431), resp.
kCHF –514 (2019: kCHF –394)

Interest rate–

500 base-point increase(decrease) in the interest ratewould result in a decrease(increase) in fair value ofkCHF –94, resp. kCHF 99

Contingent
Consideration
Batigroup

DCF method

Sensitivity of the
input to fair value

Depending on the development of Medentika’s EBITDA, the fair value of the put options to non-controllinginterests are expected to range between CHF 8.6 million and CHF 14.3 million. As of 31 December 2020, theGroup assesses that it is highly probable that Medentika will achieve the higher target due to expansion andthe realization of synergies in the future. The fair value of the put options to non-controlling interests determined on 31 December 2020 reflects this development and is recorded at CHF 14.3 million (31 December
2019: 14.2 million).
The fair value of the contingent consideration for DrSmile depends on the expected revenue achieved and theinterest rate prevailing at the balance sheet date. As of 31 December 2020, the Group assesses that it is highly
probable that DrSmile will achieve the targets due to expansion and the realization of synergies in the future.
The fair value of the contingent consideration determined on 31 December 2020 reflects this development
and the fair value is recorded at CHF 77.5 million.
The fair value of the contingent consideration for Batigroup depends on the expected local contribution
achievement and the interest rate prevailing at the balance sheet date. As of 31 December 2020, the Groupassesses that it is highly probable that Batigroup will achieve the targets due to expansion and the realizationof synergies in the future. The fair value of the contingent consideration determined on 31 December 2020reflects this development and the fair value is recorded at CHF 9.0 million (31 December 2019: 14.4 million).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

The Group did not perform any quantitative sensitivity analysis at 31 December 2020 for the remaining­individually immaterial instruments categorized within Level 3 of the fair value hierarchy.
HEDGESAt 31 December 2020, the group had forward exchange contracts for CHF 30.9 million (2019: CHF 31.7 million)
and NDF contracts for CHF 1.3 million (2019: CHF 0.4 million).
7.4 FINANCE INCOME AND EXPENSE(in CHF 1 000)

2020

2019

FINANCE INCOME

75 03364 873

Interest income

1 460

2 568

1 460

2 568

6 948

2 166

from financial instruments at amortized cost
Fair value and other financial income
Foreign exchange gains

66 62460 140FINANCE EXPENSE(116 078)(89 475)

Interest expense(15 626)(17 621)(8 863)(10 588)

(137)

(421)

from financial instruments at amortized coston defined benefit obligation (net)(6 626)(6 612)

Fair value and other financial expensefrom lease liabilities(22 268)(1 089)Financial impairment expense(10 599)­0Foreign exchange losses­G AIN ON CONSOLIDATION OF FORMER ASSOCIATES
Fair value income
Foreign exchange losses

Straumann Group

2020 Annual Report

TOTAL FINANCE EXPENSE NET

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

161

7.5 SHARE CAPITAL
The share capital is represented by 15 906 824 issued shares (2019: 15 878 984) of CHF 0.10 par value, fully paidin. On 21 April 2020, conditional share capital was exercised to increase the share capital of Straumann Holding
AG by 27 840 shares (or CHF 2 784 nominal value). The shares were used to serve vested performance share units
as part of the share-based payment program 2017 – 2020. The fair value at vesting amounted to CHF 761.11 pershare.
The conditional share capital was approved for an unlimited period at an extraordinary Annual General Meeting in 1998 for use in equity participation plans for employees and management, and was increased in 2016.
As of 31 December 2020 the conditional share capital amounted to CHF 25 611.50 (2019: CHF 28 395.50).
Treasury shares are valued at weighted average cost and have been deducted from equity. The fair value ofthe treasury shares at 31 December 2020 amounted to CHF 15.2 million (2019: CHF 12.8 million).
As of 31 December 2020 the number of outstanding shares amounted to 15 892 049 (2019: 15 865 482) andthe number of treasury shares amounted to 14 775 (2019: 13 502).
The number of shares outstanding developed as follows:

At 1 January
Performance share plan – PSU

2020

2019

15 865 482

15 833 441­27 840­0(5 744)(78 185)(70 765)

Treasury shares

­0

5 967

Purchased(5 665)

6 108

Used

­4 392­37 785­0(141)

AT 31 DECEMBER

15 892 049

15 865 482(41 046)(18 635)­0

In 2020, financial impairment expense includes expense in the amount of CHF 10.1 million relating to therevaluation of a loan granted to an associate. The Group expects a deterioration of future cashflows­compared to the associates’ business plan at the grant date of the loan (2019: CHF nil).
In 2019, the gain on consolidation of former associates relates to the business combinations of Valoc AG(CHF 3.6 million), Zinedent (CHF 1.4 million), Anthogyr (CHF 0.6 million) and Abutment Direct Inc.
(CHF 0.4 ­million). In 2020 there is no gain on consolidation of former associates.

7.6 DIVIDENDS PER SHARE
The dividend paid in 2020 was CHF 5.75 per share (2019: CHF 5.25 per share), resulting in a total payout of
CHF 91.2 million in 2020 and CHF 83.1 million in 2019. A dividend for the year ended 31 December 2020 of
CHF 5.75 per share, amounting to a total dividend of CHF 91.4 million, will be proposed at the Shareholders’
General Meeting on 9 April 2021. These financial statements do not reflect this payable dividend.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

2020

2019

200 304

205 468(52 274)

Adjustments of tax loss carry-forwards on opening balance(2 448)14 264(1 824)

Tax losses and credits arising from current year

42 70438 08522 850(3 342)

Tax losses and credits expired (not used) during current year

(6 978)(2 660)(21 640)(57 440)

Tax losses and credits utilized against current year profits(30 512)(42 883)

Income taxes from current period(45 643)

Income taxes from other periods

1 153

Deferred
Total income tax expense

Change in consolidation scope - disposals (Note 9.5)
19.0

15.7

For 2020 the applicable Group tax rate is 3.7% (2019: 15.5%), which represents the weighted tax rate, calculated by multiplying the accounting profits (or losses) of each Group company by the respective statutory tax
rate over the total pre-tax profit of the Group. This calculation is, however, distorted by the non-tax-deductible
goodwill impairments in 2020. Adjusted for these effects, the applicable tax rate amounts to 14.4%.
The following elements explain the difference between the income tax expense at the applicable Group tax
rate and the ­effective income tax expense:

Profit before tax

Straumann Group

2020 Annual Report

Applicable Group tax rate

2020

2019

113 907365 469

3.7 %15.5 %

Income tax at the applicable Group tax rate

(4 179)(56 811)

Non-tax-deductible expense(27 110)(6 499)Non-taxable income

9 876

5 149

Changes in recognition of tax assets from losses or tax credits (and their expiry)

1 786

­601

Utilization of previously unrecognized tax losses or tax credits to offset current taxes

1 906

(149)

Tax losses or tax credits from current year that are not recognized(4 867)(3 478)

Effect of changes in tax rates or imposition of new taxes

(322)

7 332

Current taxes from other periods

1 153(1 824)­117(1 760)(21 640)(57 440)

Other
EFFECTIVE INCOME TAX EXPENSE

162

At 1 January

2019(in CHF 1 000)APPENDIX(in CHF 1 000)2020

EFFECTIVE INCOME TAX RATE (IN %)FINANCIALREPORTAVAILABLE TAX LOSS CARRY-FORWARDS AND TAX CREDITS

7.7 INCOME TAX
INCOME TAX EXPENSE(in CHF 1 000)COMPENSATIONREPORT(792)­0

Currency translation adjustments(38 574)(11 971)

AT 31 DECEMBER

163 704

200 304

Deferred income tax assets of CHF 40.4 million (2019: CHF 53.1 million) were recorded in respect of available
tax loss carry-forwards and tax credits of CHF 123.5 million (2019: CHF 179.0 million). Deferred income tax
assets for unused tax losses and tax credits are recognized to the extent that it is probable that future taxable profits will be available, against which the unused tax losses and tax credits can be utilized in the respective countries, or to the extent that the individual companies have sufficient taxable temporary differences.
In 2012, the Group acquired 49% of Neodent through a fully owned subsidiary and subsequently conducted adownstream merger into Neodent. This transaction has led to recognition of tax deductible goodwill and acapitalization of a deferred tax asset in Neodent’s financial statements. In 2015, the Group obtained control
over Neodent and started to consolidate Neodent in its financial statements. At 1 March 2015, the tax
deductible goodwill amounted to CHF 124.9 million and the carrying amount of the respective deferred tax
assets amounted to CHF 42.5 million. Effective as of 1 January 2016, Straumann Brasil Ltda has been merged
into Neodent. As a result of the merger, Neodent will benefit from future tax savings and has consequently
recognized a deferred tax asset of CHF 38.7 million in respect of the tax credit of CHF 113.7 million. At the­balance sheet date, the remaining tax credit and deferred tax asset amounted to CHF 65.0 million (2019:
CHF 110.9 million) and CHF 22.1 million (2019: CHF 37.7 million).
Unused tax loss carry-forwards for which no deferred tax has been recognized will expire as follows:(in CHF 1 000)

2020

2019

Expiry in next business year (current year +1)

­479

5 693

Expiry current year +2

1 270

­420

Expiry current year +3

­296

­350

Expiry current year +4

­871

­4 0

Expiry current year +5 and later

37 300

14 837

UNUSED TAX LOSS CARRY-FORWARDS AT 31 DECEMBER

40 21721 340HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX163

DEFERRED INCOME TAXESThe movement in deferred income tax assets and liabilities is as follows:2020(in CHF 1 000)

Net deferred tax balance at 1 January
Change in consolidation scope(Charged)/credited to income statement

2019
PPE &
Leasing

Intangible
assetsInventoryvaluation

Tax losscarryforwards,
tax credits

Other

Total

­(2 922)­(60 873)­22 814­53 088­10 999­23 106

Net deferred tax balance at 1 January­0­(15 575)

–

–

­25

­(15 550)

Change in consolidation scope

PPE

Intangible
assetsInventoryvaluation

Tax losscarryforwards,
tax credits

Other­(8 189)­(48 690)­24 761­62 517­3 455­33 855–­(8 063)­(479)–­(597)­(9 139)(in CHF 1 000)

Total

­3 588­12 188­5 502­(475)­2 047­22 850(Charged)/credited to income statement

5 087(5 870)(1 385)(6 803)­5 630­(3 342)Credited to statement ofcomprehensive income

­0

­0

­0

­0

­1 800­1 800Credited to statement ofcomprehensive income

­0

­0

­0

­0

­(67)

­(67)

Charged to statement ofchanges in equity

­0

­0

­0

­0

­(77)

­(77)

Charged to statement ofchanges in equity

–

–

–

–

­31

­31

Currency translation adjustments­4 44­7 961­(259)­(12 207)­(2 306)­(6 367)

Currency translation adjustments­180­1 750­(83)­(2 625)­2 546­1 768NET DEFERRED TAX BALANCE
AT 31 DECEMBER­1 110­(56 299)­28 057­4 0 407­12 487­25 762

NET DEFERRED TAX BALANCE
AT 31 DECEMBER­(2 922)­(60 873)­22 814­53 088­10 999­23 106

Deferred tax assets at 31 December­45 228­1 349­32 052­4 0 407­20 126­139 162

Deferred tax assets at 31 December­33 913­384­26 920­53 088­17 263­131 568­68 990

Deferred tax assets after offset at
31 December

Deferred tax assets after offset at
31 December
Deferred tax liabilities at 31 December
Deferred tax liabilities after offset at
31 December­(44 118)­(57 648)­(3 996)­0­(7 639)­(113 400)

Deferred tax liabilities at 31 December­(43 228)

Deferred tax liabilities after offset at
31 December­59 993­(36 835)­(61 257)­(4 106)­(6 264)­(108 462)­(36 887)

At 31 December 2020, there was no recognized deferred tax liability (2019: CHF nil) for taxes that would bepayable on the unremitted earnings of certain of the Group’s subsidiaries. The Group does not expect significant income tax liabilities from the distribution of retained earnings to the parent company.
8 PERSONNEL
8.1 EMPLOYEE BENEFITS EXPENSE

Straumann Group

2020 Annual Report(in CHF 1 000)

2020

2019

(468 497)(500 749)

Share-based payments (Note 8.3)

(9 285)(13 130)

Social security cost

(58 621)(59 882)

Pension costs and other personnel expense(40 679)(46 602)

TOTAL EMPLOYEE BENEFIT EXPENSE(577 082)

620 363

Wages and salaries

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

8.2 RETIREMENT BENEFIT OBLIGATIONSApart from the legally required social security schemes, the Group has several independent pension plans.
In most cases these plans are externally funded in vehicles which are legally separate from the Group. For­certain Group companies, however, no independent plan assets exist for the pension plan of subsidiaries.
In these cases the related unfunded liability is included in the statement of financial position. The defined­benefit obligations and related plan assets are reappraised annually by independent actuaries.

(in CHF 1 000)MOVEMENTS OF NET LIABILITIES RECOGNIZED IN STATEMENT OF FINANCIAL POSITION(497)(1 723)

Interest income on plan assets

­360

1 302

Administration costs

(318)

(286)

Gains on curtailments, settlements and plan amendments

5 275

­0

(10 388)(12 779)

EXPENSE RECOGNIZED IN THE CONSOLIDATED INCOME STATEMENT

Plan amendment gains in 2020 are recorded mainly in respect of changes to the Swiss pension plan. Thechange represents the adoption of a lower conversion rate, which determines the annuity at the normal
retirement age.
The defined benefit obligation of the Swiss pension plan amounts to CHF 300.2 million (2019: CHF 287.3 million), the plan assets are CHF 230.8 million (2019: CHF 223.7 million) and current service costs are
CHF 14.4 million (2019: CHF 11.5 million).

2019

Change in consolidation scope­0(1 117)

Currency translation adjustments

­26

­154

Expense recognized in consolidated income statement(10 388)(12 779)

Change in consolidation scope

Employer contributions

12 241

11 002Current service costRemeasurements(7 286)(5 993)(67 918)

BALANCE SHEET
2020 Annual Report

Interest expense on defined benefit obligation(59 185)(in CHF 1 000)

Straumann Group2019(12 072)2020(73 325)

164

2020

(67 918)

NET LIABILITIES AT 31 DECEMBERAPPENDIX(15 208)

Current service cost

The amounts for the Group’s pension plans recognized in the statement of financial position are as follows:

Net liabilities at 1 January

FINANCIALREPORT

The net periodic benefit costs recorded in the income statement consist of the following components:

The Swiss pension plan represents the most significant portion of the Group’s total defined benefit obligationand plan assets. Current pension arrangements for employees in Switzerland are made through plans governed by the Swiss Federal Occupational Old Age, Survivors and Disability Pension Act (BVG). The plan isfunded by regular employer and employee contributions. The final benefit is contribution-based with certain
minimum guarantees. Due to these minimum guarantees, the Swiss plan is treated as a defined benefit planfor the purposes of the Group’s financial statements, although the plan has many of the characteristics of adefined contribution plan.

(in CHF 1 000)COMPENSATIONREPORT

The movement in the Group’s defined benefit obligation over the year is as follows:(in CHF 1 000)

Present value of benefit obligation at 1 January

2020

2019

(292 767)(251 164)­0(1 175)(15 208)(12 072)

Interest expense on defined benefit obligation(497)(1 723)Curtailments, settlements and plan amendments

5 275

­0

Employee contributions(7 213)(6 706)

Experience losses on defined benefit obligation(8 001)(6 596)

Benefits paid/transferred in

14 8095 756(2 165)(19 099)
(200)

2020

2019

Fair value of plan assets

232 102

224 849

Actuarial results arising from change in financial assumptions

Present value of funded benefit obligations(301 711)(290 346)

Actuarial results arising from change in demographic assumptions­277

Deficit in the plan(69 609)(65 497)

Currency translation adjustments

­63

­212

(305 427)(292 767)

PRESENT VALUE OF BENEFIT OBLIGATION AT 31 DECEMBER
Present value of unfunded benefit obligations(3 716)(2 421)

whereof due to active members(261 930)(251 019)

TOTAL RETIREMENT BENEFIT OBLIGATIONS(73 325)(67 918)

whereof due to pensioners(43 497)(41 748)

On 31 December 2020, the weighted-average duration of the defined benefit obligation was 14 years(2019: 14 years).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

The calculation of defined benefit obligation is based on actuarial assumptions. The principal actuarial
assumptions for the plans, which are determined with respect to local conditions, were as follows:

Switzerland

2019
Other

Switzerland

FINANCIALREPORT

APPENDIX

165

Plan assets are comprised as follows:(in CHF 1 000)

2020

COMPENSATIONREPORT

2020

2019

Cash and cash equivalents

6 693

2.9 %

6 510

2.9 %

Other

Debt instruments

46 16119.9 %

44 73119.9 %
27.6 %

Discount rate

0.10 %

0.33 %–3.02 %0.15 %

0.62 %–1.91 %Equity instruments

63 93227.5 %

61 952Future salary increases

1.00 %

1.00 %–5.00 %1.00 %

1.00 %–4.23 %Real estate

62 77827.0 %

60 83427.1 %

Other

52 53822.5 %

50 82222.5 %TOTAL PLAN ASSETS

232 102100.0 %

224 849

100.0 %

Generational mortality tables are used where this data is available. For the Swiss pension plan, the Group
uses the BVG 2015 GT.
The defined benefit pension obligation is significantly impacted by assumptions regarding the discount rate.
Furthermore, the rate of future salary increases significantly affects the value of the plans.

Cash and cash equivalents, as well the largest part of the debt, equity instruments and other (mainly consisting of insurance-linked securities and investments in an infrastructure fund) have a quoted market price andare tradeable in liquid markets. 16% of the real estate investments have a quoted market price, while the rest
is mainly invested in common investment foundations.

A quantitative sensitivity analysis for significant assumptions is shown below:(in CHF 1 000)

2020

2019

Defined benefit obligation

Defined benefit obligation

Increase

Decrease

Increase

Decrease

Discount rate (0.25 % movement)

10 268(13 620)9 898(12 299)

Future salary growth (0.25 % movement)(1 484)1 441(1 515)

1 471

The sensitivity analysis above has been determined based on a method that extrapolates the impact on
net defined obligation as a result of reasonable changes in key assumptions occurring at the end of thereporting period.
The movement in the fair value of plan assets over the year is as follows:(in CHF 1 000)

Straumann Group

2020 Annual Report

Fair value of plan assets at 1 January
Change in consolidation scope

2020

2019

224 849

191 979

­0

­58

­360

1 302

Employer contributions

12 241

11 002

Employee contributions

7 213

6 706

(14 809)(5 756)Return on plan assets

2 603

19 902Administration costs

(318)

(286)

Currency translation adjustments

(37)

(58)

232 102

224 849

Interest income

Benefits paid/transferred in

FAIR VALUE OF PLAN ASSETS AT 31 DECEMBER

The strategic allocation of assets is determined with the objective of achieving an investment return which,
together with the employer and employee contributions, is sufficient to maintain reasonable control over thevarious funding risks of the plan. The aim is to ensure that plan assets and liabilities are aligned in themedium and long term.
The Group’s defined benefit plans are administered by independent foundations. The Board of Trustees, whichis constituted by an equal number of representatives of the employer and employees, is responsible for the
management of the plans. The Board of Trustees determines the investment strategy within the framework of
the legal provisions taking into consideration the plans’ risk objectives, benefit obligations and risk capacity.
The Board of Trustees uses external actuarial reports to estimate the risk capacity.
Each year, the level of funding is reviewed as required by legislation. The duties of the Board of Trustees arelaid down in the BVG and the pension fund regulations. In accordance with BVG, a temporary shortfall ispermitted. The Board of Trustees must take appropriate measures in order to solve the shortfall within areasonable time. Pursuant to BVG, additional employer and employee contributions may be incurred
whenever a significant shortfall in accordance with BVG arises.
The expected amount of contribution to post-employment benefit plans for 2021 is CHF 12.1 million.
Apart from the defined benefit plans, the Group also operates several defined contribution plans which
receive fixed contributions from Group companies. The Group’s legal or constructive obligation for theseplans is limited to the contributions. The expense recognized in the current period in relation to these contributions was CHF 8.2 million (2019: CHF 8.1 million).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

8.3 SHARE-BASED PAYMENTS
The Group currently uses three different compensation plans involving share-based payment components:• Long-term incentive (LTI)• Board of Directors remuneration

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

166

BOARD OF DIRECTORS REMUNERATIONThe compensation of the Board of Directors consists of a fixed compensation component only, paid in cash
and undiscounted shares. The shares allocated to the members of the Board of Directors are blocked for two
years. The value of shares allocated is calculated using the average closing price of the shares over the seventrading days following the ex-dividend day.

• Employee share participation plan (ESPP)LONG-TERM INCENTIVE (LTI)
The LTI program is designed for Executive Management Board, Senior Management and other key employees.
The plan uses Performance Share Units (PSU), which are granted to eligible personnel with specific performance conditions that result in a potential vesting into Straumann shares after three years. The number ofshares allocated per PSU depends on the achievement of two performance conditions, both directly reflecting
the shareholder experience and considered essential for sustaining shareholder value creation.
• Absolute total shareholder return (aTSR) aims to link the LTI value at vesting directly with the absolute value
created by the company for its shareholders.
• Relative total shareholder return (rTSR) shows the Group’s share performance in the context of the market
and in comparison with peer companies of the SMIM (Swiss Market Index Mid).

EMPLOYEE SHARE PLAN
Due to the impact of the COVID-19 pandemic, the ESPP was suspended for 2020. Consequently, no shares
have been purchased under this program during the reporting period (2019: 8 951). In 2019, eligible employees in Switzerland have been able to purchase Straumann shares up to a maximum of 25% or 35% of theirannual base salary at a discount of 25% or 35%, respectively, depending on hierarchical level and respective
LTI eligibility. The grant value is based on the average share price over the seven-trading-day period following
the ex-dividend day. The shares are blocked for two years.
The expense recognized for share-based payments during the year is shown in the following table:(in CHF 1 000)

2020

2019

Long-term incentive (LTI)

8 582­10 540

Board of Directors remuneration

The two performance conditions are weighted equally and vest independently of each other. For each performance condition, the maximum conversion factor is one share per PSU. The valuation is performed by independent specialists applying the following significant inputs into the model: grant date, vesting date, averagereference price, performance target including cap and floor, share price at issue, risk-free interest rate,
expected volatility, expected correlation and expected dividend yield.

Employee share participation plan (ESPP)TOTAL SHARE-BASED PAYMENTS (NOTE 8.1)

­703

­979

­0

1 611

­9 285­13 130

There were no cancellations or modifications to the PSU awards in 2020 or 2019.

Straumann Group

2020 Annual Report

Movements in the number of performance share units are as follows:
Regarding the aTSR component, the conversion rate of PSUs into shares is linear and ranges from 0 to 100%.
If the TSR CAGR is 0% or below, the conversion rate is zero. If the CAGR is 7%, each PSU converts into half ashare, while a CAGR of 14% or more results in a conversion of one share per PSU. In the case of rTSR, the conversion rate is also linear and ranges from 0% to 100%. No shares are allocated if the Group underperforms
the SMIM by 25%-points or more. Each PSU converts into one share if the Group outperforms the SMIM by
25%-points or more. Performance in-line with the SMIM results in each PSU converting into half a share.
From 2016 to 2018 (vesting in 2019 to 2021), the LTI was determined by aTSR and EBIT Growth Amount (EGA)
measured over a three-year performance cycle and equally weighted. The vesting conditions for those grants
remain unchanged.

RECONCILIATION OF OUTSTANDING PERFORMANCE SHARE UNITS
At 1 January

2020

2019

34 77140 833Granted12 19811 062

Exercised(14 297)(14 024)

Forfeited(2 818)(3 100)TOTAL AT 31 DECEMBER

29 85434 771­0­0

Exercisable at 31 December

In 2020, 12 198 PSUs were granted under the LTI (2019: 11 062). The total fair value has been determinedusing a Monte Carlo simulation algorithm and amounts to CHF 786.65 (2019: CHF 752.74).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

Underlying assumptions for the fair value of the PSUs are presented below:
INPUTS TO THE MODELS
2020

Dividend yield (in %)

2019

PSU

PSU

0.00

0.00

Expected volatility (in %)

27.82

23.16

Risk-free interest rate (in %)(0.64)(0.54)

Expected life of PSUs (in years)

3

3

Share price (in CHF) at grant date in April

778.40836.80Fair value (in CHF)

786.65752.74

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

167

The subsequent sections provide insights into the management of the various risks, including major exposures and their potential effects on the Group’s profitability. Such financial impacts are demonstrated in sensitivity analyses, which relate to the Group’s net financial positions at 31 December 2020 and 2019. Excluded
from the sensitivity calculations are changes in the carrying value of post-retirement obligations, provisions,non-financial assets and liabilities of foreign operations.
INTEREST RATE RISKInterest rate risk refers to the risk that the fair value of future cash flows of financial assets and liabilities willfluctuate because of changes in market interest rates. The Group’s exposure to this risk arises primarily fromshort-term interest-bearing assets and short-term debt obligations.
The Group is primarily exposed to interest rate risks in the Swiss and US market.

The expected volatility reflects the assumption that the historical volatility over a period similar to the life of
the instruments is indicative of future trends, which may not necessarily be the actual outcome.
8.4 GLOBAL RESTRUCTURING
In the light of the impact of the COVID-19 pandemic on its markets and economy the Group has aligned thecosts with current and projected lower revenues. As personnel accounts for the largest item of its operating
costs, the Group introduced a plan to reduce its global workforce by approximately 660 employees in the­current year. The reduction took place across all countries and functions. The total non-recurring restructuring costs in 2020 amounted to CHF 17.9 million, recognized as personnel expense.
9 OTHER DISCLOSURES
9.1 EVENTS AFTER THE BALANCE SHEET DATE
There were no significant events after the balance sheet date.

Straumann Group

2020 Annual Report

9.2 FINANCIAL RISK MANAGEMENTThe Group’s principal financial liabilities comprise trade payables, finance leases, overdrafts, bank loans andstraight bonds issued in Switzerland. The Group has various financial assets such as trade receivables, cash,
cash equivalents and short-term deposits.
The main risks arising from the Group’s financial assets and liabilities are related to interest rate changes,­foreign currency fluctuations, possible credit defaults and liquidity shortage. The Audit and Risk Committee
agrees and reviews policies for managing these risks, which are summarized below. The risk management
execution is carried out by specialist teams that have the appropriate skills, experience and supervision.
MARKET RISK
Market risk refers to the risk that the fair value of future cash flows of financial assets and liabilities will
­fluctuate because of external changes in the markets involved. This systemic risk mainly affects the Group’s
interest rate risk, foreign currency risk, credit risk and liquidity risk.

The Group’s policy is to closely monitor interest rate risks and manage them using variable and fixed rates orfinancial derivatives. No material hedging activities, such as interest rate swaps, were conducted during theperiod under review.
INTEREST RATE RISK SENSITIVITY
The following table demonstrates the impact of reasonably possible interest rate changes on the Group’s
profit before tax, with all other variables held constant. The sensitivity analysis considers major interest raterisk exposures. The method considers fair value changes of interest-bearing assets and borrowings. There isno material impact on the Group’s equity.
(in CHF 1 000)

2020

2019

Increase/decrease(in base points)

Effect on profit
before tax

Increase/decrease(in base points)

CHF

30

1 244

30

­511

USD

50

­318

50

­136

CHF

(30)

(1 244)

(30)

(511)

USD

(50)

(318)

(50)

(136)

CURRENCY

Effect on profit
before tax

FOREIGN CURRENCY RISK
Foreign exchange risk arises when future transactions or recognized assets or liabilities are denominated in acurrency other than the entity’s functional one. As the majority of the Group’s business is international andsince the Group’s financial statements are prepared in Swiss francs, fluctuations in exchange rates affect boththe Group’s operating results and the reported values of the assets and liabilities. The Group is primarily
exposed to the euro, the US dollar, the Brazilian real, the Chinese renminbi and the Japanese yen.
Besides the general attempt to naturally reduce currency exposures, the Group’s foreign currency risk management policy aims to concentrate exposures centrally and subsequently manage them through a selective
hedging approach. Managed exposures comprise recognized and anticipated transactions over a maximumof 12 months. The Group uses derivative instruments, primarily forward currency contracts, non-deliverable

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

168

APPENDIX

foreign exchange forwards (NDF) and plain vanilla options. Hedging decisions are taken and, if possible,­executed by Corporate Finance. Speculative trading is forbidden.

disclosed in Note 5.2. In 2020 and 2019, 96% of the transactions occurred in the country of the respective
operating unit. There are no significant concentrations of customer credit risk within the Group.

At 31 December 2020 the Group had economically hedged 86% (2019: 80%) of its foreign currency exposure
for which firm commitments existed at the reporting date.

FINANCIAL INSTRUMENTS AND CASH DEPOSITS
Credit risk from balances with banks and other financial institutions is managed by Corporate Finance inaccordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties. The Group’s exposure to credit risk arises from the potential default of a counterparty, with a maximum
exposure equal to the carrying amount of these assets.

The Group has investments in foreign operations whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s long-term investments in foreign operations is not hedged.

The table below shows the major cash balances held with financial institutions at the balance sheet date.
FOREIGN CURRENCY RISK SENSITIVITY
The following table demonstrates the impact of reasonably possible currency rate changes on the Group’s
profit before tax (for fair value changes of financial assets and liabilities including foreign currency derivatives as fair value hedges) and the Group’s equity (for fair value changes of currency derivatives designatedas cash flow hedges), with all other variables held constant. The sensitivity analysis considers major foreign
currency risk exposures.
(in CHF 1 000)

Straumann Group

2020 Annual Report

CURRENCY

2020

2019

Increase/decrease Effect on profit(in %)
before tax

Effect on equity

Increase/decrease(in %)

CNY/CHF

10

­713

­0

10

USD/CHF

10

1 387

­0

BRL/CHF

10

(199)

­0

EUR/CHF10(2 266)

JPY/CHF

10­471

CNY/CHF(10)

USD/CHF(10)

BRL/CHF(10)

EUR/CHF
JPY/CHF

Effect on profit Effect on equity
before tax

1 069

­0

10

­423

­0

10

(202)

­0

­0

10

(629)

­0

­0

10

­422

­0

(713)

­0

(10)

(1 069)­0(1 387)

­0

(10)

(423)

­0

­199

­0

(10)

­202

­0

(10)

2 266

­0

(10)

­629

­0

(10)

(471)

­0

(10)

(422)

­0

CREDIT RISK
Credit risk refers to the risk that counterparties will not meet their obligations, leading to a financial loss for thecreditor. The Group is exposed to credit risk from its operating activities, primarily trade receivables and loan
notes, as well as from its financing activities, primarily financial instruments such as foreign exchange derivatives and cash deposits with financial institutions.
TRADE RECEIVABLES
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, maturing and overdue receivable balances are monitored on an ongoing basis. The
Group continuously reviews its provision for impairment. The maximum exposure is the carrying amount as(in CHF 1 000)

2020

2019

BANK

RatingBalance

RatingBalanceBank AAAA

68 655AAA

9 890

Bank BAA+

81 327AA+

1 988

Bank C

AA

­450

AA

­451

Bank DA+

168 361A+

111 888

Bank EBBB+

70 916BBB+

23 871

Bank FA+

112 866A+

28 128Bank GA−

17 277

A−

23 729Other banks

112 349

60 266TOTAL

632 201

260 211LIQUIDITY RISK
Liquidity risk refers to the possible inability to meet short-term debt obligations due to the lack of liquid
assets. The Group closely monitors its liquidity risk through a prudent asset and liability management. This
includes a recurring liquidity planning approach throughout the Group. The Group’s objective is to maintainan adequate funding structure by using bank overdrafts, bank loans, bonds and finance leases. In accordancewith the policy, Corporate Finance maintains a permanently accessible cash stock as well as flexible shortterm funding possibility through committed credit lines, involving a prospective approach.
The following table reflects all undiscounted contractually agreed payments for repayments and interest
resulting from recognized financial liabilities at 31 December 2020 and 31 December 2019.
(in CHF 1 000)

2020

2019

<1 year

1–5 years>5 years<1 year

1–5 years

Straight bonds

3 948

490 184­0

203 290­0­0Lease liabilities

31 373

96 342170 131

31 214

113 787

179 414

Other financial liabilities>5 years­866

33 569­941­866

31 201

7 921

Trade payables

49 919­0­0

63 207­0­0

Other payables

139 41075 313­0

94 12138 699­0

TOTAL

225 516695 408

171 072392 698

183 687

187 335

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit­rating and healthy capital ratios in order to support its business and secure shareholder investments.
The Group manages its capital structure and makes adjustments when necessary. These can also involve
changing the dividend payment to shareholders, returning capital to shareholders through share­buy-backs, or issuing new shares.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

169

In the period under review, the following related-party transactions were made:(in CHF 1 000)

2020

2019

Associates(7 862)(7 579)Medartis AG

(243)

(189)

­977

­78

Associates

­131

­130

ITI Foundation

­4 62

­266

PURCHASE OF GOODS FROM:SALE OF GOODS TO:

As the Group operates in a fast-moving industry, its policy is to maintain a high degree of flexibility in its capital structure through a high availability of liquid funds. The Group monitors its capital base using the equity
ratio. In the medium and long term, the Group strives to maintain an equity ratio of around 50% or higher.
EQUITY RATIO

Associates
SERVICES RENDERED TO:SERVICES RECEIVED FROM:(in CHF 1 000)

2020

Total assets

2 548 613

2 389 978

Equity1 209 943

1 367 222

47.5 %

57.2 %EQUITY RATIO

2019

Associates(3 044)(105)

ITI Foundation(9 982)(10 387)

TOTAL(19 561)(17 786)

Payments to the ITI Foundation are based on a collaboration agreement between the Group and the ITI.
9.3 PRINCIPAL CURRENCY TRANSLATION RATES
Unit

31 Dec 2020

Average2020

31 Dec 2019

Average2019100­16.97­18.54­24.09­25.15

Canadian dollar (CAD)

1

­0.69

­0.70

­0.74

­0.75

Chinese renminbi (CNY)100­13.48­13.59­13.91­14.36

1

­1.08

­1.07

­1.09

­1.11

CURRENCY

Brazilian real (BRL)

Straumann Group

2020 Annual Report

euro (EUR)
Japanese yen (JPY)

100

­0.85

­0.88

­0.89

­0.91

Turkish lira (TRY)

1

­0.12

­0.14

­0.16

­0.18

US Dollar (USD)

1

­0.88

­0.94

­0.97

­0.99

9.4 RELATED-PARTY DISCLOSURE
Besides the associates, the joint venture and the Key Management Personnel, the Group has identified thefollowing related parties:• The International Team for Implantology (ITI) Foundation• Medartis AG.

The payments received for the rendering of services as well as the purchases of goods as stated above arecarried out under normal commercial terms and conditions.
The following open balances due to/from related parties are recognized in the statement of financial position:(in CHF 1 000)

2020

2019

Associates loans

2 403

10 921

Associates (payables)/receivables
ITI Foundation (payables)/receivables
TOTAL

(327)

(337)

(2 685)(2 478)

(610)

8 107

On 31 December 2020 loans granted to associates amounted to CHF 2.4 million (2019: CHF 10.9 million). The
amount is included in the associates line in the table above.

SHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

KEY MANAGEMENT PERSONNEL COMPENSATIONKey Management Personnel comprises of the Board of Directors and the Executive Management Board (EMB).

9.5 SUBSIDIARIES AND ASSOCIATES
The consolidated financial statements of the Group include:

The Board of Directors is entitled to a fixed compensation, which is paid out in cash and shares. The shares
allocated to the members of the Board of Directors are blocked for 2 years.

NAME

City

APPENDIXCountry of Interest andincorporation voting rights
2020 (in %)170

Share capital 31.12.2020

SUBSIDIARIES:The compensation of the EMB consists of a fixed portion and variable portion, which depends on the courseof business and individual performance. In addition, Executive Management Board members participate in
the LTI program (Note 8.3).

Anthogyr SAS

COMPENSATION
The following table shows the compensation of Key Management Personnel recognized in profit or loss in linewith the Group’s accounting policies.

Batigroup Dental Diş Ürünleri Ticaret AŞ

Sallanches

France100.00EUR

Anthogyr Inc.

OrlandoUSA

100.00USD­5 000Anthogyr S.A.

MerschLuxembourg

100.00EUR­4 00 100

MerschLuxembourg

100.00EUR­12 000

AnkaraTurkey90.00

TRY

5 000 000

Anthogyr Center Sarl(in CHF 1 000)

2020

2019

Salaries and other short-term employee benefits­13 245­13 326

Post-employment benefits­2 296­2 547

Share-based payments­3 674­7 072TOTAL KEY MANAGEMENT PERSONNEL COMPENSATION RECOGNIZED IN THE
INCOME STATEMENT­19 215­22 945Biora AB

Malmö

Sweden100.00

SEK­950 152

Montreal

Canada100.00CAD

24 648 923

Dental Wings GmbH

Chemnitz

Germany

100.00EUR­25 000

Dental Wings Hong Kong Ltd

Hong Kong

China

100.00HKD

4 635 044

Shenzhen Dental Wings
Company Limited

Shenzhen

China

90.00

CNY

1 790 369

Dental Wings Inc.

Montreal

Canada100.00CAD­1Digital Planning Service (Private) Ltd

DW Manufacturing Inc.

LahorePakistan

100.00PKR

12 000 000

Equinox Dental AG

Basel

Switzerland

100.00

CHF­100 000

etkon (Schweiz) AG

Rheinfelden

Switzerland

70.00

CHF

­100 000

Institut Straumann AG

Basel

Switzerland

100.00

CHF­100 000

Anthogyr Italia SRL

MilanoItaly

100.00EUR­50 000

Equinox Implants LLP

MumbaiIndia

100.00INR

320 000 000

Straumann Italia Srl

Milan

Italy

100.00EUR­270 000

Basel

Switzerland

100.00

CHF­100 000

MendaroSpain

100.00EUR

1 334 784

MendaroSpain

100.00EUR­880 000

Instradent AG
Createch Medical S.L.U.

2020 Annual Report­Createch Institute A.E.I.E.

Straumann Group

1 254 040

Straumann Middle East PJSTehranIran100.00IRR

40 000 000

T-Plus Implant Tech. Co. Ltd.

New Taipei City

Taiwan58.06

TWD

154 901 960

Zinedent İmplant Üretim A.Ş.

AnkaraTurkey100.00TRY

2 300 000

Moscow

Russia100.00RUB

17 250 000

Buenos Aires

Argentina

100.00ARS

19 000 000

Santiago

Chile

100.00CLP

464 515 950

Manohay Colombia SAS

BogotáColombia

100.00COP

7 100 062 213

Manohay Dental SA

MadridSpain

100.00EUR­60 200

México DF

Mexico100.00 MXN

41 892 615

Instradent LLC
Manohay Argentina SA
Manohay Chile SPA

Manohay México SA de CV
SmileCo GmbHDrSmile Iberia SL
DZK Deutsche Zahnklinik GmbHUrban Technology GmbH

BerlinGermany

74.90

EUR

Madrid

Spain

74.90

EUR

­25 000­3 000Düsseldorf

Germany

74.90

EUR

­25 000

BerlinGermany

74.90

EUR

­25 000

GRI disclosure 102 – 45

HIGHLIGHTSSHAREHOLDERLETTERCity

NAME

Straumann (Beijing) Medical Device
Trading Co Ltd

Country of Interest andincorporation voting rights
2020 (in %)China

100.00CORPORATEGOVERNANCE

Share capital 31.12.2020

CNY

70 290 000

Shanghai

China

100.00USD

30 000 000

Lirui Medical Technology (Shanghai)Company Limited

Shanghai

China

100.00CNY

16 000 000

3D ADD Medical Technology(Beijing) Co. Ltd.

Beijing

China100.00CNY

1 285 714

MölndalSweden100.00SEK­100 000

Straumann AS

Oslo

Norway100.00NOK

1 000 000

Straumann BV

Ijsselstein

Netherlands

100.00EUR­18 151

Curitiba

Brazil100.00BRL

1 152 621 860

PelotasBrazil100.00BRL­19 984

Amsterdam

Netherlands

100.00

EUR­100

Northern Cross B.V.
Smile factory S I e P LTDA.

São Paulo

Brazil100.00BRL

1 300 100

Straumann Canada Ltd

Burlington

Canada100.00CAD

2 100 000

Straumann Danmark Aps

BrøndbyDenmark

100.00

DKK­125 000

Straumann Dental India LLP

Mumbai­India100.00INR

1 706 000 000

Seoul Republic of Korea

100.00KRW

2 300 000 000
4 050 000

Straumann Dental Korea Inc
Straumann Dental s.r.l.

Bucharest

Romania100.00RON

Straumann GmbH

ViennaAustria100.00EUR­4 0 000

Straumann Group (Taiwan) Co. Ltd.

TaipeiTaiwan75.00

TWD

13 333 333

Straumann Group (Thailand) Limited

BangkokThailand

100.00THB

120 000 000

Straumann Group Adriatic d.o.o.

ZagrebCroatia100.00EUR­25 000

Lima

Peru

100.00PEN

1 702 500

Straumann Group SDN. BHD.

Kuala Lumpur

Malaysia

100.00MYR

1 055 000

Straumann Group South Africa (PTY) LTD

Somerset WestSouth Africa

100.00ZAR­1 000Straumann Holding Deutschland GmbH

FreiburgGermany

100.00EUR­25 000

Gräfelfing

Germany

100.00EUR­326 000Hügelsheim

Germany

91.00

EUR

­275 000

Medentika CNC GmbH

Hügelsheim

Germany

91.00

EUR

­200 000

Abutment Direct Inc.

MarkhamCanada

45.50

CAD

­0

FreiburgGermany

100.00EUR­200 000

Straumann Japan KK

Tokyo

Japan

100.00JPY

10 000 000

etkon Japan KK

ShibayamaJapan

100.00JPY

10 000 000

Straumann Jordan PSC

Amman

Jordan49.00

JOD­50 000

Straumann LLC

Moscow

Russia100.00RUB

21 000 000

Straumann Ltd

CrawleyUK

100.00

GBP­300 000

Straumann Manufacturing, Inc.

AndoverUSA

100.00USD­1Fremont

USA

100.00USD­0Straumann Group Peru SA

etkon GmbH
Medentika GmbH

Straumann GmbH

Bay Materials LLC

COMPENSATIONREPORT

FINANCIALREPORTCity

NAME

ClearCorrect Holdings, Inc.

APPENDIXCountry of Interest andincorporation voting rights
2020 (in %)171

Share capital 31.12.2020

Round Rock­USA

100.00USD­4 424

Round Rock­USA

100.00USD­1 000AndoverUSA

100.00USD­1Helsinki

Finland100.00EUR­32 000

Port Melbourne

Australia

100.00

AUD­100

Napier

New Zealand

100.00NZD­0Zaventem

Belgium

100.00EUR

2 565 021

Fontenay-sous-Bois

France100.00EUR­287 472

Fontenay-sous-Bois

France100.00EUR­50 000

Singapore

Singapore

100.00

SGD­10 000

Straumann SRO

PragueCzech Republic

100.00CZK­200 000

Straumann Villeret SA

Villeret

Switzerland

100.00CHF

9 000 000

TehranIran100.00IRR

40 000 000

Rheinfelden

Switzerland

55.00

CHF

­100 000­ClearCorrect Operating, LLC
Straumann USA, LLC
Straumann Oy
Straumann Pty Ltd

Straumann AB

Yller Biomateriais S/A2020 Annual Report

Beijing

SUSTAINABILITYREPORT

Straumann (China) Investment Company
LimitedJJGC Indústria e Comércio de Materiais Dentários S.A. (‘Neodent’)

Straumann Group

MANAGEMENTCOMMENTARY

Straumann New Zealand Ltd
Straumann SA/NV
Straumann SAS
SCI Alpina Immobilière
Straumann Singapore Pte Ltd

Straumann Manufacturing Pars PJS
Valoc AGThe next senior and ultimate holding company of the Straumann Group is Straumann Holding AG which isbased and listed in Switzerland.
On 27 July 2020, the Group signed a new shareholder agreement with its shareholding partner of STM Digital
Dentistry Holding Ltd (Hong Kong). The Group will continue to hold 49% of the company’s shares but has
transferred rights like representation quotes in the board of directors to its shareholding partner. The Group
concluded that it has lost control over STM Digital Dentistry Holding Ltd but retains significant influence overthe company’s operations. The Group therefore changed its accounting treatment from subsidiary to associate. The loss of control has no material influence on the Group’s performance.
City

Country ofincorporation

Interest andvoting rights
2020 (in %)botiss medical AG

BerlinGermany

30.00

Dental Monitoring SAS

Paris

France

7.28

NAME

ASSOCIATES:

Geniova Technologies S.L.
maxon dental GmbH

Madrid

Spain

38.02

KenzingenGermany

49.00

Rodo Medical Inc.

San Jose

USA

30.00

Rapid Shape GmbH

Heimsheim

Germany

35.00

Z-Systems AG

Oensingen

Switzerland

30.63

Promaton Holding B.V.

Amsterdam

Netherlands

49.12

STM Digital Dentistry Holding Ltd

Hong Kong

China

49.00

Peak Dental Solutions HK Ltd.

Hong Kong

China

40.00

Seongnam-si Republic of Korea

33.50

Warantec Co., Ltd.

GRI disclosure 102 – 45

HIGHLIGHTSHIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

172

AUDIT REPORT – CONSOLIDATED FINANCIAL STATEMENTS
Report of the statutory auditor to the general meeting of Straumann Holding AG, BaselSTATUTORY AUDITOR’S REPORT ON THE AUDIT OF
THE CONSOLIDATED FINANCIAL STATEMENTS

OPINION
We have audited the consolidated financial statements of Straumann
Holding AG and its subsidiaries (the Group), which comprise theconsolidated statement of financial position as at 31 December 2020
and the consolidated statement of income, consolidated statementof comprehensive income, consolidated statement of changes inequity and consolidated statement of cash flows for the year thenended, and notes to the consolidated financial statements, including
a summary of significant accounting policies (pages 127 to 171).
In our opinion, the consolidated financial statements give a true andStraumann Group

2020 Annual Reportfair view of the consolidated financial position of the Group as at
31 December 2020, and its consolidated financial performance andits consolidated cash flows for the year then ended in accordancewith International Financial Reporting Standards (IFRS) and comply
with Swiss law.

BASIS FOR OPINION
We conducted our audit in accordance with Swiss law, International
Standards on Auditing (ISAs) and Swiss Auditing Standards. Our
responsibilities under those provisions and standards are further
described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report.
We are independent of the Group in accordance with the provisions of
Swiss law and the requirements of the Swiss audit profession, as well as
the International Code of Ethics for Professional Accountants (includingInternational Independence Standards) of the International Ethics

Standards Board for Accountants (IESBA Code) and we have fulfilled ourother ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters wereaddressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. For each matter
below, our description of how our audit addressed the matter isprovided in that context.
We have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the consolidated financial statements
section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material
misstatement of the consolidated financial statements. The results of
our audit procedures, including the procedures performed to address
the matters below, provide the basis for our audit opinion on the
consolidated financial statements.
RECOVERABILITY OF GOODWILL AND BRAND
AREA OF FOCUS
Goodwill and brand stemming from the various acquisitions represent
22% of the Group’s total assets and 46% of the Group’s equity as ofbalance sheet date (see Group’s disclosures Note 4.3 and 4.4).

There is a risk of limited recoverability of these assets, in case theplanned growth and margins for the domestic or international business
are not realized as budgeted or forecasted by management. In
determining the value in use of cash-generating units, management
applies judgment in estimating – amongst other factors – future
revenues and margins, long-term growth and discount rates. Suchassumptions are affected by expected future market or economic
conditions. Due to the significance of the carrying amount of the
goodwill and brand and the judgment involved in performing theimpairment test, this matter was considered significant to our audit.
OUR AUDIT RESPONSE
Our procedures included, amongst other, evaluating the Company’svaluation model for the material goodwill and brand with indefinite
useful life and analyzed the underlying key assumptions, including
future long-term growth and discount rates. We assessed theassumptions regarding future revenues and margins, historical accuracyof the Company’s estimates and considered its ability to produce
accurate mid- and long-term forecasts. We evaluated sensitivity in thevaluation resulting from changes to the key assumptions applied andcompared these assumptions to corroborating information.
Our audit procedures did not lead to any reservations concerning thevaluation of goodwill and brand.
RECOVERABILITY OF DEFERRED TAX ASSETS NEODENTAREA OF FOCUS
As of balance sheet date recognized deferred tax assets relating totax-deductible statutory goodwill and fair value step-ups amount to
CHF 22.1 million. Such tax-deductible statutory goodwill and fairvalue step-ups stem from mergers subsequent to Neodent’s
acquisition through fully owned subsidiaries. The Company performs
periodic assessments of the recoverability of deferred tax assets (seeGroup’s disclosures Note 7.7).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

Brazilian tax authorities have challenged the legality of the tax
deductibility of the statutory goodwill and intangibles assets whichcauses a risk of future recoverability of such deferred taxes. Due to thejudgement involved in making an assessment regarding the decisionby the court this matter was considered significant to our audit.
OUR AUDIT RESPONSE
Our procedures included, amongst other, involving local Brazilian tax
experts to assist in evaluating the Company’s assessment regarding
tax deductibility of statutory goodwill and fair value step ups.
Further, we analyzed the reassessment of the Company related to thedecision of the Brazilian Administrative Court of First Instance andthe negative decision of the second level appeal which may impact
the appropriateness of the capitalization of the deferred tax assets.
Our audit procedures did not lead to any reservations concerning themeasurement of deferred tax assets Neodent.

OTHER INFORMATION IN THE ANNUAL REPORTThe Board of Directors is responsible for the other information in theannual report. The other information comprises all information
included in the annual report, but does not include the consolidated
financial statements, the stand-alone financial statements and our
auditor’s reports thereon.

Straumann Group

2020 Annual Report

Our opinion on the consolidated financial statements does not cover
the other information in the annual report and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information in theannual report and, in doing so, consider whether the otherinformation is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We havenothing to report in this regard.

SUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORTRESPONSIBILITY OF THE BOARD OF DIRECTORS FOR THE CONSOLIDATED FINANCIAL STATEMENTS
The Board of Directors is responsible for the preparation of theconsolidated financial statements that give a true and fair view inaccordance with IFRS and the provisions of Swiss law, and for suchinternal control as the Board of Directors determines is necessary toenable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of
Directors is responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE ­CONSOLIDATEDFINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit
conducted in accordance with Swiss law, ISAs and Swiss AuditingStandards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on thebasis of these consolidated financial statements.
A further description of our responsibilities for the audit of theconsolidated financial statements is located at the website of
EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-forpublic-companies. This description forms part of our auditor’s report.

FINANCIALREPORT

APPENDIX173

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with article 728a para. 1 item 3 CO and the Swiss
Auditing Standard 890, we confirm that an internal control system
exists, which has been designed for the preparation of consolidated
financial statements according to the instructions of the Board of
Directors.
We recommend that the consolidated financial statements
submitted to you be approved.

Ernst & Young Ltd

Daniel Zaugg
Licensed audit expert(Auditor in charge)
Basel, 12 February 2021

Fabian Meier
Licensed audit expert

FINANCIALREPORTSTRAUMANN HOLDING

Balance sheet

175

Income Statement

176

Notes to thefinancial statements

177

Proposal of the Board of Directors
for the appropriation of
the available earnings
181
Audit Report – financial statements
Straumann Holding AG
182#

TOGETHERSTRONG

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX175

BALANCE SHEETASSETS(in CHF 1 000)

EQUITY AND LIABILITIES
31 Dec 2020

31 Dec 2019

Cash and cash equivalents

Notes

211 541

136 684

Securities and short term deposits

99 659­0

Short-term interest-bearing liabilities to investments

Other short-term receivables

14 46228 955

Short-term interest-bearing liabilities to third parties

from third parties

­264

­333

Other short-term liabilities to investmentsfrom investments

14 19828 622Other short-term liabilities to third party

­264

­58

325 926

165 697

Prepaid expenses
Total current assets(in CHF 1 000)

Notes

Trade payables to third parties

Short-term provisions

2.4

2.3

Deferred income
Total current liabilities

Financial assets

2.1

948 218817 519

Investments

2.2

822 112688 213­4 6­78

to third parties

Total non-current assets

1 770 376

1 505 810

to investments

TOTAL ASSETS

2 096 302

1 671 507

Intangible assets

Long-term interest-bearing liabilities
2.42020 Annual Report

Long-term provisions

31 Dec 2019

­101

­158

89 9787 851­0

200 000

­4 85

­0

1 645

­0

7 974

41 475

2 007

2 591

102 190

252 075

544 783

18 287480 000­0

64 78318 2873 000

19 000Total non-current liabilities

547 783

37 287

Total liabilities

649 973289 362

Share capital

2.5

1 591

1 588

Reserves from capital contributions1

2.6

87 44166 254

Share premium

9 281

9 281

Legal retained earnings(8 599)13 064
9 524

Reserves for treasury shares

2.7

11 232

Capital reserves

2.8(23 371)

­0

1 540

1 540

Statutory reserves
Extraordinary reserves
Voluntary retained earnings

2 000

2 000

1 356 615

1 291 958

1 199 019

1 076 012

Available earnings- Retained earnings- Net result

Straumann Group

31 Dec 2020

157 596215 946

Total equity

1 446 329

1 382 145

TOTAL EQUITY AND LIABILITIES

2 096 302

1 671 5071	thereof CHF 10 996 956 not accepted by the Swiss Federal Tax Administration.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

INCOME STATEMENT(in CHF 1 000)

Notes

2020

2019

Income from investments

2.10

171 820168 744

Other financial income

2.11

17 21614 755

Other operating income

2.12

15 62979 351

204 665

262 850(7 902)(15 788)

Total income
Other financial expense

2.13

Board compensation

2020 Annual Report(1 799)(25 118)

Other operating expense

2.14(4 986)

Impairment on investments

2.15(32 479)

­0

(31)

(155)

Total expenses(47 072)(42 860)

Result before income tax

157 593219 990

Direct taxes­3(4 044)NET RESULT

157 596215 946

Depreciation of intangible assets

Straumann Group(1 674)

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX176

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORTNOTES TO THE
FINANCIAL STATEMENTS

CORPORATEGOVERNANCE

APPENDIX

177

2 INFORMATION ON BALANCE SHEET AND INCOME STATEMENT ITEMS
2.1 FINANCIAL ASSETS(in CHF 1 000)

31 Dec 2020

31 Dec 2019

Loans to subsidiaries

945 815804 321Loans to third parties

2 403

13 198948 218817 519

2.2 INVESTMENTS
The direct and major indirect investments of the company are listed in Note 9.5 to the Straumann Group
Financial Statements. Ownership interests equal voting rights.

These financial statements have been prepared in accordance with the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant
accounting and valuation principles applied are described below.

2.3 SHORT-TERM PROVISIONS
Short-term provisions include provisions for unrealized foreign currency gains of CHF 7.3 million and provisions for taxes CHF 0.7 million (2019: CHF 36.8 million and taxes CHF 4.7 million).

As Straumann Holding AG has prepared consolidated financial statements in compliance with accepted international accounting standards (IFRS), it has decided to forego presenting a cash flow statement in accordancewith the law.

2.4 INTEREST-BEARING LIABILITIES TO THIRD PARTIESTOTAL(in CHF 1 000)

31 Dec 2020

31 Dec 2019

Bonds

480 000

200 000

TOTAL

480 000

200 000

200 000

200 000

0.55

1.625

BOND CONDITIONS
Nominal value
Interest rate in %1.2 FINANCIAL ASSETS
Financial assets include long-term loans. Loans granted in foreign currencies are translated at the exchange
rate at the balance sheet date, whereby unrealized losses are recorded but unrealized gains are notrecognized.
2020 Annual Report

FINANCIALREPORT

1 PRINCIPLES
1.1 GENERAL
Straumann Holding AG is a public company whose shares are traded on the Swiss Exchange (SIX). As the­parent company of the Straumann Group, the purpose of Straumann Holding AG is to acquire, dispose of andmanage investments in the field of dental and medical technology.

Straumann Holding AG together with its subsidiaries Institut Straumann AG, Straumann Villeret SA andInstradent AG are treated as a VAT group by the Swiss Federal Tax Administration. Owing to this group­taxation, Straumann Holding AG is liable to the Swiss Federal Tax Administration jointly and severally with allgroup members for any VAT.

Straumann GroupCOMPENSATIONREPORT

1.3 TREASURY SHARESTreasury shares are recognized at acquisition cost and deducted from shareholders’ equity at the time ofacquisition. In case of a resale, the gain or loss is recognized through the income statement as financial
income or financial expense.
1.4 SHARE-BASED PAYMENTS
Should treasury shares be used for share-based payments for the Board Members’ compensation, the difference between the acquisition costs and any consideration paid is recognized as board compensation.
1.5 INTEREST-BEARING LIABILITIESInterest-bearing liabilities are recognized at nominal value. Discounts and issuing costs are recognized as­prepaid expenses and amortized on a straight line basis over the term of the liability.

Maturity/term in years
Due date/maturity
Nominal value
Interest rate in %Maturity/term in years
Due date/maturity

5.2

7

10/3/2025

4/30/2020

280 000
1.0
3.5
10/3/2023

On 30 April 2020 the Group repaid its CHF-denominated domestic straight bond of CHF 200 million which
was issued in April 2013.
The Group placed a CHF-denominated domestic straight bond issue for an aggregate amount of CHF 280 million with issue date 3 April 2020, payable annually in arrears on 3 October. In July 2020 the Group placed an
additional CHF-denominated domestic straight bond for an aggregate amount of CHF 200 million, with issue
date 15 July 2020, payable annually in arrears on 3 October. Denominations of the bonds are CHF 5 000 nominal and multiples thereof. The bonds have been admitted to trading on the SIX Swiss Exchange with effectfrom 27 March 2020 until 3 October 2023 respectively from 10 June 2020 until 3 October 2025 and are listedin accordance with the Standard for Bonds on the SIX Swiss Exchange.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

2.5 SHARE CAPITAL
The share capital for 2020 is CHF 1 590 682.40 and is represented by 15 906 824 registered shares of CHF 0.10
par value. On 22 April 2020 an option agreement between Institut Straumann AG and Straumann Holding AG
was signed, which resulted in a nominal capital increase of CHF 2 784. The new shares were created from conditional share capital.
In 2019, the share capital was CHF 1 587 898.40 and was represented by 15 878 984 registered shares of
CHF 0.10 par value.
2.6 RESERVES FROM CAPITAL CONTRIBUTION
From a fiscal point of view, any distributions made from reserves from capital contributions are treated thesame as a repayment of share capital. The Swiss Federal Tax Administration (ESTV) acknowledged thereported reserves for capital contribution as a capital contribution in accordance with Article 5 Paragraph 1
bis VStG.
2.7 RESERVES FOR TREASURY SHARESThe shares of Straumann Holding AG held by Institut Straumann AG amount to 14 775 shares with an averagevalue of CHF 760.20. The increase occurred due to the share based payment program and employee sharesprogram (2019: 13 502 with an average value of CHF 705.4).
2.8 CAPITAL RESERVESMid 2020 AG Projection SAS, a holding company which holds a 70 % share of Anthogyr SAS, Sallanches,
France, was merged into Straumann Holding AG. A merger loss in the amount of CHF 23.4 million has been
booked into retained earnings (capital reserve).
2.9 TREASURY SHARES
Since 2017 all shares have been sold and no transactions regarding treasury shares occurred in 2020.

Straumann Group

2020 Annual Report

2.10 INCOME FROM INVESTMENTS
In the reporting period the dividend income amounted to CHF 171.8 million (2019: CHF 168.8 million).
2.11 OTHER FINANCIAL INCOME
Other financial income amounts to CHF 17.2 million (2019: CHF 14.8 million) and contains mainly the interest
income from loans to subsidiaries and realized foreign exchange gains.
2.12 OTHER OPERATING INCOME
Other operating income amounts to CHF 15.6 million and consists of a reversal of a provision for acquisition(recognized in other operating expense in 2019). In 2019 other operating income amounted to CHF 79.4 million
and consisted of income from licenses.

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

178

2.13 OTHER FINANCIAL EXPENSE
Other financial expense amounts to CHF 7.9 million and mainly contains the valuation of the loans, interest
expense from bonds and earn out. In 2019 the other financial expenses contained mainly the valuation of theloans, the interest expense from bond and earn out and amounted to CHF 15.8 million.
(in CHF 1 000)

2020

2019

Interests

7 289

6 801

Foreign exchange losses

0

8 987

Other financial expense

613

0

7 902

15 788(in CHF 1 000)

2020

2019

Administrative expense

780

748

1 433

7 714

TOTAL

2.14 OTHER OPERATING EXPENSE

Consulting expense
Sundry expense

2 773

16 656

TOTAL

4 986

25 118Other operating expense amounts to CHF 5.0 million and contains administrative, consulting as well as
sundry expenses. In 2019 other operating expenses amounted to CHF 25.1 million and contained new provisions of CHF 16.0 million for acquisition and integration risk for newly acquired subsidiaries posted undersundry expense.
2.15 IMPAIRMENT ON INVESTMENTS
In 2020 there has been a reversal of impairments in the amount of CHF 60.0 million (2019: CHF nil) and there
have been impairments on investment in the amount of CHF 92.5 million (2019: CHF nil).

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

3 OTHER INFORMATION
3.1 FULL TIME EQUIVALENTS
Straumann Holding AG does not have any employees.

COMPENSATIONREPORT

FINANCIALREPORT

2020
Shares(in %)

31 Dec 20201

27 Apr 2021

20 Apr 2022

20 Apr 2023

BOARD OF DIRECTORS

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

16.9

16.9

Gilbert Achermann

Dr h.c. Rudolf Maag

11.2

11.5

Dr h.c. Thomas Straumann

Black Rock Group2

7.3

7.3

Simone Maag de Moura Cunha

3.7

Gabriella Straumann

3.0
3

TOTAL MAJOR SHAREHOLDERS­34 721

­0

­0

­0

2 691 565

­0

­0

­0

Monique Bourquin­1 103

­0

­0

­0

3.7

Dr Sebastian Burckhardt­3 085

­0

­0

­0

3.0

Marco Gadola­2 071­1 845­1 385

­0

n/a

3.0

Juan José Gonzalez

42.0

45.4

Dr Beat Lüthi

­200

­0

­0

­0

­4 139

­0

­0

­0

­819

­0

­0

­0

2 737 703

­1 845­1 385­0Guillaume Daniellot

­0

­304

­255

­1 062

Wolfgang Becker

­600

­369

­302

­336

Jens Dexheimer

­143

­326

­0

­0

Regula Wallimann
1 	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 2020

Total
EXECUTIVE MANAGEMENT BOARD

3.3 ALLOCATION OF EQUITY INSTRUMENTS TO THE BOARD OF DIRECTORS
According to the compensation plan, Board members’ fees are paid in a fixed remuneration and shares (in2020 due to COVID-19 the Board voluntarily reduced their share grants by 40 percent). The number of sharesis calculated based on the average price over the last seven days prior to the allocation.
The allocation was as follows:
2020
Number2020 Annual Report

Performance Share Units

31 Dec 20191

MAJOR SHAREHOLDERS

Straumann Group179

4 EQUITY INSTRUMENTS OF THE BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
The following tables disclose the number of vested and non-vested equity instruments (shares, options andPerformance Share Units) held on 31 December 2020 and 2019 by the members of the Board of Directors,
the Executive Management Board and individuals related to them.

3.2 MAJOR SHAREHOLDERS
Shareholders who own more than 3 percent of voting rights are as follows:

The Capital Group companies, Inc.

APPENDIX

Allocated to the Board of Directors

799

2019

Value
in CHF 1 000

Number

602

1 199

Value
in CHF 1 000

1 004

3.4 EVENTS AFTER THE BALANCE SHEET DATE
There are no significant events after the balance sheet date which could impact the book value of the assets
or liabilities or which should be disclosed in these financial statements.

Camila Finzi

­430

­0

­0

­354

Dr Peter Hackel

­500

­4 02

­326

­363

Holger Haderer

­292

­104

­80

­265

Mark Johnson

­650

­0

­0

­248

Patrick Loh

­0

­4 02

­326

­363

Dr Andreas Meier

­732

­168

­175

­248

Alastair Robertson

­0

­0

­272

­354

Dirk Reznik

­0

­0

­0

­354

Petra Rumpf­2 170

­434

­0

­0

­140

­239

­207

­230

Matthias Schupp
Rob Wolley

­0

­0

­127

­283

Total

­5 657­2 748­2 070­4 460TOTAL

2 743 360

­4 593­3 455­4 460HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

2019
SharesPerformance Share Units
21 Apr 2020

27 Apr 2021

20 Apr 2022

BOARD OF DIRECTORS
Gilbert Achermann­42 432

­0

­0

­0

2 693 985

­0

­0

­0

Monique Bourquin­1 023­0­0­0

Dr Sebastian Burckhardt­3 005­0­0­0

Dr h.c. Thomas Straumann

Juan José Gonzalez

­120

­0

­0

­0

Ulrich Looser­4 692­0­0­0

Dr Beat Lüthi­4 059

­0

­0

­0

­739

­0

­0

­0

2 750 055

­0

­0

­0

Marco Gadola­520­2 470­1 845­1 385

Dr Gerhard Bauer

­958

­475

­369

­302

Wolfgang Becker

­0

­507

­369

­302

Guillaume Daniellot

­754

­379

­304

­255

Jens Dexheimer­1 111

­348

­326

­271

Dr Peter Hackel

­720

­554

­4 02

­326

Frank Hemm

­330

­554

­0

­0

Patrick Loh

­0

­495

­4 02

­326

Regula Wallimann
Total
EXECUTIVE MANAGEMENT BOARD

Alastair Robertson

Straumann Group

2020 Annual Report

Petra Rumpf

­0

­0

­0

­272

­904

­633

­434

­350

Matthias Schupp

­856

­317

­239

­207

Peter Zihla

­943

­158

­109

­111

Total

­7 096­6 890­4 799­4 107TOTAL

2 757 151

­6 890­4 799­4 107COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX180

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

PROPOSAL OF THE BOARD OF
DIRECTORS FOR THE APPROPRIATION
OF THE AVAILABLE EARNINGS(in CHF 1 000)

2020

2019

157 596215 946

Carried forward from previous year

1 200 727

1 065 503

Change in reserves for treasury shares(1 708)10 508

1 356 614

1 291 958

Net result

Profit available to the Annual General Meeting
Dividend paid out of the available earnings (CHF 5.75 per share)
BALANCE CARRIED FORWARD(91 379)(91 231)

1 265 235

1 200 727

Straumann Group

2020 Annual Report

The Board of Directors proposes to the Shareholders’ General Meeting that a total dividend of CHF 5.75 pershare be distributed, payable as of 15 April 2021. Calculated based on the total number of outstanding
shares of 15 892 049, this corresponds to a total amount of CHF 91.4 million. In deciding on the appropriation of dividends, the Shareholders’ General Meeting shall take into account that the Company will not pay
a dividend on treasury shares held by the Company. The remaining amount of the available earnings is tobe carried forward.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

181

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

182

AUDIT REPORT – FINANCIAL STATEMENTS STRAUMANN HOLDING AG
Report of the statutory auditor to the General Meeting of Straumann Holding AG, BaselREPORT OF THE STATUTORY AUDITOR ON THE FINANCIAL­STATEMENTS
As statutory auditor, we have audited the financial statements ofStraumann Holding AG, which comprise the balance sheet, income
statement and notes (pages 175 to 181), for the year ended
31 December 2020.

Straumann Group

2020 Annual Report

BOARD OF DIRECTORS’ RESPONSIBILITY
The Board of Directors is responsible for the preparation of thefinancial statements in accordance with the requirements of Swisslaw and the company’s articles of incorporation. This responsibility
includes designing, implementing and maintaining an internal
control system relevant to the preparation of financial statementsthat are free from material misstatement, whether due to fraud or
error. The Board of Directors is further responsible for selecting andapplying appropriate accounting policies and making accounting
estimates that are reasonable in the circumstances.

AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordancewith Swiss law and Swiss Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control system
relevant to the entity’s preparation of the financial statements inorder to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control system. An audit also
includes evaluating the appropriateness of the accounting policies
used and the reasonableness of accounting estimates made, as well
as evaluating the overall presentation of the financial statements. We
believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.

OPINION
In our opinion, the financial statements for the year ended
31 December 2020 comply with Swiss law and the company’s
articles of incorporation.

REPORT ON KEY AUDIT MATTERS BASED ON THE CIRCULAR 1/2015
OF THE FEDERAL AUDIT OVERSIGHT AUTHORITY
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in
the context of our audit of the financial statements as a whole, and informing our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of
how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s
responsibility section of our report, including in relation to thesematters. Accordingly, our audit included the performance ofprocedures designed to respond to our assessment of the risks ofmaterial misstatement of the financial statements. The results of ouraudit procedures, including the procedures performed to address thematters below, provide the basis for our audit opinion on the financial
statements.
VALUATION OF INVESTMENTS IN AND LOANS TO SUBSIDIARIES
AREA OF FOCUS
Investments in and loans to subsidiaries as at balance sheet dateamount to CHF 1768 million or 84% of total assets. The Company
generally assesses the valuation of its investments and loans anddetermines potential impairments on an individual basis inaccordance with the Swiss Code of obligations (see Company’s
disclosures Note 2.15.
Due to the significance of the carrying amount of the investments
and loans and the judgement involved in the determination ofpotential impairments, this matter was considered significant toour audit.
OUR AUDIT RESPONSE
Our procedures included, amongst other, an assessment of theCompany’s valuation model and we analysed the underlying key
assumptions and methods that were used for its annual impairment
test. Our audit procedures did not lead to any reservations concerning
the valuation of investments in and loans to subsidiaries.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYREPORT ON OTHER LEGAL REQUIREMENTS
We confirm that we meet the legal requirements on licensing
according to the Auditor Oversight Act (AOA) and independence(article 728 CO and article 11 AOA) and that there are no
circumstances incompatible with our independence.
In accordance with article 728a para. 1 item 3 CO and Swiss AuditingStandard 890, we confirm that an internal control system exists,
which has been designed for the preparation of financial statements
according to the instructions of the Board of Directors.
We further confirm that the proposed appropriation of available
earnings complies with Swiss law and the company’s articles ofincorporation. We recommend that the financial statements
submitted to you be approved.

Ernst & Young Ltd

Daniel Zaugg
Licensed audit expert(Auditor in charge)

Straumann Group

2020 Annual Report

Basel, 12 February 2021

Fabian Meier
Licensed audit expert

SUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIX183

APPENDIX

Global Reporting Initiative

185

GRI Content Index

189

Points to note

193#

TOGETHERSTRONGSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCE

GLOBAL REPORTING INITIATIVE
Transparency for Stakeholders

Straumann Group

2020 Annual Report

Sustainability is inherent to Straumann’s businesssuccess and reflects our corporate values andbehavior. We have consistently integrated sustainability reporting in our Annual Report since 2004,
fostering trust and confidence. To provide transparency for stakeholders who are impacted by ouractivities, including shareholders, customers,
employees and members of the communities inwhich we operate, we base our sustainability
reporting on the internationally accredited GRI­Sustainability Reporting Standards by the Global
Reporting Initiative.
GRI is a nonprofit, multi-stakeholder organizationthat provides companies with a systematic basis for
informing stakeholders on corporate responsibility
in a concise and comparable manner. We haveapplied the GRI sustainability reporting frameworks
in our Annual Report for fourteen years. This reporthas been prepared in accordance with the GRI Standards: Core option. It provides a comprehensive
overview of Straumann’s Corporate Responsibility
activities while addressing all material topics andwas submitted to the GRI Materiality Disclosures
Service in February 2021.
The GRI Standards require us to determine whichsustainability topics are most relevant, i.e. m­ aterial,for our company and stakeholders. The corresponding assessment and topics determined to be­material are presented on p. 59. The topics listed
are relevant for Straumann’s operations, share­
holders and employees, as they can influence cost,
brand reputation, and ultimately business success.

Economic, social and environmental topics are also
relevant for the communities in which we operate.
Environmental topics are also of interest to international environmental organizations. Productrelated topics are relevant for our customers andthe patients they serve. Human resources topics
influence the competence of our team and­ultimately the confidence and peace-of-mind we
provide to our customers.
This report is based on information for the whole
Straumann Group, unless stated otherwise. We
have not sought external assurance of the GRI
information provided, but we have used the standards for internal auditing wherever practical.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX185
GRI disclosures 102 – 42, 102 – 45

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIXGLOBAL REPORTING INITIATIVEManagement Approaches

2020 Annual Report

With regard to supply chain administration, ourStrategic Procurement & Direct Spend team is
responsible for procuring raw materials (e.g. titanium), tools, semi-finished goods, operating supplies, production machines and other equipment,
while the Indirect Purchasing group handles the procurement of goods and services, including marketing materials, translation services, documentation,
travel and accommodation, transportation, officesupplies, packaging, consulting and event services.

Straumann GroupECONOMIC TOPICS
BUSINESS ETHICS AT STRAUMAN GROUP
In all our business activities, we place a high value
on ethical behavior. Straumann has a dedicatedGroup-wide organization for business compliance,with specialists in all regions. The StraumannGroup Code of Conduct clearly outlines our expectations in this regard (see p. 53). Our Complianceteam ensures adherence to the Code, which is integrated in all our employment contracts and is acentral part of our training program. Employees are
obligated to report any actual or suspected violation or misconduct. Compliance concerns can beraised anonymously at any time using a multilingual hotline operated by a third-party. Codeinfringements are assessed, and appropriate measures taken.

Straumann expects external business partners(ExBP) to comply with the provisions laid out in theGroup Code of Conduct for ExBP. These include
compliance with law and regulations, ethical business practices, fair and safe working conditions,environmental protection and safeguarding privacy
through proper use of confidential information.
Major suppliers are required to sign the ExBP Codeperiodically as a written confirmation of their commitment to abide by its provisions. Straumann may
monitor certain ExBPs to evaluate their compliancewith the Code. Any non-compliance with the provisions and requirements is treated as a violation ofsubstantial contractual obligations. If the ExBP fails
to correct the infringement, Straumann is committed to seeking an alternative ExBP who is willing
and able to comply with the Code.
Key corporate standards for central business compliance risks (bribery, improper advantages andunlawful promotion) are in place (see table on
p. 54). The Codes cover economic, environmental
and social topics.
In 2020, a steering committee was established tocoordinate all sustainability activities at Grouplevel, illustrating the importance the Group
attaches to corporate sustainability and the appropriate management of material topics (see materiality map on p. 59 and sustainability governancechart on p. 58).
ECONOMIC TOPICS IN DETAIL
Strong economic performance is the basis of thelong-term viability of Straumann Group. At thesame time economic success is regarded as being
inseparable from high standards in environmental
and social stewardship. We are committed toensuring that our business is financially sustainableboth in the short and the long run. Strategic oversight of our financial performance is ensured by
the Board of Directors. The operational responsibilities are delegated to the Executive Management
Board. A strong commitment to innovation, quality
and service in all the regions where we do businessis central to our approach. We are positioned as asupplier of premium products and services andhave a clear focus on cost control. We plan tomaintain our position through prompt executionof strategic goals and by upholding our commitment to developing new products for the replacement, restorative, regenerative, esthetic and preventive dental markets, as well as for digitaldentistry.
Our main indirect economic impacts include theprovision of jobs in the communities (see “social
topics” on p. 188) in which we operate, and ourcharitable and social engagement initiatives tomake dental treatment and education about oral
hygiene available to the underprivileged.
Straumann’s charitable and social engagement
programs around the world are an important
aspect of our culture. They are typically managed
by the teams located in each region where we dobusiness. Our charitable programs relate, for example, to ectodermal dysplasia or basic dental careand oral hygiene. Our products and services are, by
their nature, designed to improve the human condition and thus inherently benefit society.

186
Management Approach for GRI disclosures201, 203, 205, 206

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

Straumann Group

2020 Annual Report

ACCESS TO TREATMENT
In addition to our charitable donations and programs to provide free treatment to people who
cannot afford it, our biggest contributions toincreasing access to replacement, restorative andcorrective dental treatment are the provision oftraining and education, as well as our efforts toincrease affordability (see p. 70). Our significant
commitment to education spans more than three
decades and includes support for the ITI, ILAPEO
and dental schools and academies around theworld. Our efforts to increase affordability arereflected in the fact that we cover all price levels.
More than 40% of the implants we supply today
are value brands, in contrast to our exclusively premium range in 2012. Furthermore, we continue toinnovate solutions that reduce costs, for example
by reducing surgery visits and interventions, orthat make treatment possible for patients who
would otherwise be ineligible.
ENVIRONMENTAL TOPICS
GENERAL ASPECTS
Local environmental officers are responsible for environmental issues at our production sites. They areoverseen by plant managers who in turn report toour Head of Operations or the Heads of our Digitaland Orthodontic Business Units. At our global headquarters, which accommodates research and development, facility management is overseen by the
CFO (see sustainability governance chart on p. 58).
To track our performance, we regularly collect andevaluate data from our production sites, as well asfrom our major non-production entities, to understand our environmental impact and continuously
identify and implement measures for improvement.
Minimizing our impact on the environment also
falls within the responsibility of our employees.
Our Code of Conduct obligates every individual in

SUSTAINABILITYREPORT

CORPORATEGOVERNANCE

the Straumann Group to comply with all laws andinternal regulations regarding environmental
matters.
Efficiency is an integral part of how we do businessat Straumann. We continuously refine products
and processes and seek ways to improve the conservation of resources. We employ this approachfor materials, energy and water consumption (seespecific aspects on water below). Economical useof resources and efficient production as well as
recycling efforts minimize effluents and waste.
We closely monitor our greenhouse gas emissions toquantify our impact on climate change. We calculate
corresponding emissions associated with our energy
consumption, and further report information toinvestors within the Climate Change program of
CDP (formerly the Carbon Disclosure Project).
We are aware that our supply chain also influences
our environmental impact, and we strive for a thorough environmental assessment of suppliers. Our
expectations regarding environmental protectionin the supply chain are clearly specified in ourGroup Code of Conduct for External Business Partners (see economic topics on p. 186).
WATER AS A SHARED RESOURCE
Straumann seeks to reduce the environmental
impact of production and to adhere to environmental laws and regulations. Besides energy, emissions and waste, our environmental management
covers water and effluents. We do not operate in awater-intensive business sector. However, we areaware that water is a shared and precious resourcethat is scarce in some parts of the world. Water
constraints have the potential to increasingly challenge our business as well.

COMPENSATIONREPORT

FINANCIALREPORT

APPENDIX

We therefore monitor water-related risks andassess them at our production sites. This includes
the consideration of local laws and regulations,and collaboration with stakeholders such as local
communities, water and waste water authorities
and other official bodies.
Water-stress levels have been analyzed situationally, but not globally in a systematic way. We
intend to assess water-stress levels for our major
production sites in the future, to determine specific risks associated with water stress, which
occurs when the demand for water exceeds theavailable amount during a certain period, or whenpoor quality restricts its use.
Most of our total water consumption is municipal
water that is used for manufacturing processes(parts cleaning, product packaging and storage),sanitary purposes, facility services (kitchen, cleaning, irrigation), as well as cooling. Wastewater ismainly discharged via the local municipal seweragesystem, in compliance with local requirements, andis treated by third-party companies where
necessary.

187
Management Approach for GRI disclosures
301, 302, 303, 305, 306, 308

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSOCIAL TOPICSLABOUR PRACTICES AND DECENT WORK
Operational aspects of labor practices and policies
fall within the responsibilities of the Head of
Global People Management & Development, who
is a member of the Executive Management Board.
On a strategic level, the Human Resources & Compensation Committee of the Board of Directors
reviews Straumann’s human resources policies andoversees the recruitment of Executive Board Members as well as the compensation of the Board of
Directors and the Executive Management Board.

Straumann Group

2020 Annual Report

We base our approach to employment on principles of employee development, open dialogue andfair and attractive employment conditions. Collective bargaining agreements and freedom of association are allowed throughout the company in compliance with laws and regulations. However, there
is a general preference for informal employee dialogue, and labor contracts are negotiated individually rather than by collective bargaining.
Employee health and safety is a top priority for
Straumann. At executive management level the
Head of Global People Management & Development and the Head of Research Development &Operations are responsible for this task. Our goal isclear: zero work-related accidents per year. Thus,
our approach focuses on prevention by means ofregular risk assessments and continuously communicating occupational health and safety procedures
to all employees in the regions, through specifictraining and awareness programs. We have implemented management systems for occupational
health and safety at our production sites globally.
Our employees contribute to the development ofthese management systems. We regularly monitor
work-related hazards and incidents, and we reportabsence rates and other indicators. In addition, we

SUSTAINABILITYREPORT

CORPORATEGOVERNANCE

offer our employees access to non-occupational
edical and healthcare services, as well as voluntary
health promotion programs such as fitness trainingor nutrition advice. Straumann strictly maintains
the confidentiality of workers’ personal healthrelated information. Our Code of Conduct, obligates all staff to respect employee privacy andrespective grievance mechanisms are in place.
In order to keep our employees’ skills up to date,training and education are of key importance(see p. 65). Our continuing training and education­programs are aligned with our Cultural Journey.
In ­addition, we continue to offer informal educational sessions.
We believe that a diverse workforce greatly contributes to team performance and to our ability toserve customers around the world. Therefore, weplace a high value on inclusion and equal opportunity (see p. 65 f.). We regularly monitor a variety ofindicators in our workforce such as age, gender,
nationality and educational background to ensure
inclusiveness and diversity of perspectives. Everyone who works at the Straumann Group should
feel comfortable being themselves at work. Any
concerns can be raised by our employees. We
appropriately follow up all complaints and sanction irregular behavior that is contrary to our Codeof Conduct.
HUMAN RIGHTS
Our approach to protecting human rights is based on
our Code of Conduct, which requires all employees
to act ethically and uphold human rights at all times.
To foster an open, collaborative working environment, our employees are protected from discrimination by Straumann’s Code of Conduct. We define
discrimination as biased treatment based on

APPENDIX

188

gender, race, background, religion, or sexual orientation. Our Group Code of Conduct for ExternalBusiness Partners serves as a supplier social assessment, with the purpose of ensuring that working
conditions and human rights are protected along
our supply chain.

GRI disclosure 102 – 41 and Management Approach for GRI disclosures
401, 403, 404, 405, 406, 414, 416, 417, 418, 419

HIGHLIGHTSCOMPENSATIONREPORT

FINANCIALREPORTPRODUCT RESPONSIBILITY
Our overall profitability depends on the quality,
performance and reliability of the solutions weprovide to our customers. We apply stringent
requirements for safety and effectiveness in product design and production, and will never accept
shortcuts to market in order to boost short-termsales. The fitness for use of our products is assured
over the entire product lifecycle: from conceptualization to research, development, manufacturing,storage, distribution, and in-market support.
Our approach towards customer health and safety,
as well as compliance of our products and services
includes the following: in the rare case of a potentially serious safety issue, our Corporate Product
Safety Officer is authorized to convene a Safety
Board meeting at very short notice to initiate corrective actions. Furthermore, our implant and regenerative products undergo preclinical and clinicaltesting, which continues after market introduction.
Results of these studies are often published in peerreviewed scientific journals and are presented byindependent experts at scientific meetings.
Our commitment to truthful and accurate marketing and labelling is embedded in our global sales
compliance program, which has been in place since2009. It is one of several safeguards ensuring compliance with regulations relating to sales of our
products and services. Finally, respecting laws andregulations concerning customer privacy is integrated in our Code of Conduct.

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIXGRI CONTENT INDEX
General Disclosures
Reference

Disclosure

Page no./Information

GRI 101:2016 FOUNDATION

Page no./Information

GRI 102:2016 GENERAL DISCLOSURES

59

Organizational profile

102-41

Collective bargaining agreements

188

102-1

Name of the organization

Straumann Holding AG

102-42

Identifying and selecting stakeholders

185

102-2

Activities, brands, products, and services

12–14

102-43

Approach to stakeholder engagement

59

102-3

Location of headquarters

Basel, Switzerland

102-44

Key topics and concerns raised

59

102-4

Location of operations

73–74

Reporting practice102-5

Ownership and legal form

81–82

102-45Markets served

12, 29–30

Entities included in the consolidated financial
statements

170–171, 185

102-6
102-7

Scale of the organization

3–5, 22102-46

Defining report content and topic boundaries

59

64–67

102-47

List of material topics

59

186

102-48

Restatements of information

78–79

102-49Changes in reporting

59

102-50

Reporting period

January 1 to December 31, 2020

102-9

Information on employees and other workers
Supply chain

102-10Significant changes to the organization and its
supply chain

81–82

102-11

Precautionary Principle or approach49

102-51

Date of most recent reportFebruary 2020

102-12External initiatives

71

102-52

Reporting cycle

Annual

102-13

Membership of associations

12, 55102-53

Contact point for questions regarding the report193102-54Claims of reporting in accordance with the
GRI Standards

185102-55

GRI content index

189102-56External assurance

185

Strategy102-142020 Annual Report

Disclosure

Stakeholder engagement102-40
List of stakeholder groups

102-8

Straumann Group

ReferenceStatement from senior decision-maker

7–10

Ethics and integrity
102-16
Values, principles, standards, and norms of behavior 13, 66, 81, 186, 188
Governance102-18Governance structure

58, 87, 100

For the Materiality Disclosures Service, GRI Services reviewed that the GRI content index is clearly presented andthe references for Disclosures 102-40 to 102-49 align with appropriate sections in the body of the report.

189

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

APPENDIXGRI Content Index
Management Approach and Topic Specific Standard Disclosures
Reference

Disclosure

Page no.

200: ECONOMIC DISCLOSURESGRI 201:2016 Economic Performance
GRI 103:2016 Management Approach 103-1/103-2/103-3

186

201-1

Direct economic value generated and distributed

128–129

201-3

Defined benefit plan obligations and other retirement plans

164–166

201-4

Financial assistance received from government

154

Infrastructure investments and services supported

186
69–71, 186–187

GRI 203:2016 Indirect Economic Impacts
GRI 103:2016 Management Approach 103-1/103-2/103-3
203-1
GRI 205: 2016 Anti-corruption
GRI 103:2016 Management Approach 103-1/103-2/103-3

186

205-1

Operations assessed for risks related to corruption

53

205-2

Communication and training about anti-corruption policies and prodecures

53

205-3

Confirmed incidents of corruption and actions taken

53

GRI 206:2016 Anti-competitive Behavior
GRI 103:2016 Management Approach 103-1/103-2/103-3
206-1

186
Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

53

300: ENVIRONMENTAL DISCLOSURESGRI 301:2016 Materials
GRI 103:2016 Management Approach 103-1/103-2/103-3
301-1

187
Materials used by weight or volume

78

GRI 302:2016 Energy

Straumann Group

2020 Annual Report

GRI 103:2016 Management Approach 103-1/103-2/103-3

187

302-1

Energy consumption within the organization

79

302-3

Energy intensity

79

GRI 303:2018 Water and Effluents
GRI 103:2016 Management Approach 103-1/103-2/103-3

187

303-1

Interactions with water as a shared resource

187

303-2

Management of water discharge-related impacts

187

303-3

Water withdrawal by source

79

GRI 305:2016 Emissions
GRI 103:2016 Management Approach 103-1/103-2/103-3

187

305-1

Direct (Scope 1) GHG emissions

79

305-2

Energy indirect (Scope 2) GHG emissions

79

305-4

GHG emissions intensity

79

Omissions190

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

Reference

SUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

Disclosure

FINANCIALREPORT

Page no.

GRI 306:2016 Effluents and Waste
GRI 103:2016 Management Approach 103-1/103-2/103-3
306-2

187
Waste by type and disposal method

79

GRI 308:2016 Supplier Environmental Assessment
GRI 103:2016 Management Approach 103-1/103-2/103-3
308-1

187
New suppliers that were screened using environmental criteria

51–52

400: SOCIAL DISCLOSURESGRI 401:2016 Employment
GRI 103:2016 Management Approach 103-1/103-2/103-3
401-1

188
New employee hires and employee turnover67

GRI 403:2018 Occupational Health and Safety
GRI 103:2016 Management Approach 103-1/103-2/103-3

188

403-1

Occupational health and safety management system

188

403-2

Hazard identification, risk assessment, and incident investigation

188

403-3

Occupational health services

188

403-4

Worker participation, consultation, and communication on occupational health and safety

188

403-5

Worker training on occupational health and safety

65, 188403-6

Promotion of worker health

188

403-7

Prevention and mitigation of occupational health and safety impacts directly linked by business relationships

188

403-9

Work-related injuries

65, 67

GRI 404:2016 Training and Education
GRI 103:2016 Management Approach 103-1/103-2/103-3
404-1

188
Average hours of training per year per employee

67

GRI 405:2016 Diversity and Equal Opportunity
GRI 103:2016 Management Approach 103-1/103-2/103-3

Straumann Group

2020 Annual Report

405-1

188
Diversity of governance bodies and employees

67

GRI 406:2016 Non-discrimination
GRI 103:2016 Management Approach 103-1/103-2/103-3
406-1

188
Incidents of discrimination and corrective actions taken

53

GRI 414:2016 Supplier Social Assessment
GRI 103:2016 Management Approach 103-1/103-2/103-3
414-2

188
Negative social impacts in the supply chain and actions taken

188

GRI 416:2016 Customer Health and Safety
GRI 103:2016 Management Approach 103-1/103-2/103-3
416-2

188
Incidents of non-compliance concerning the health and safety impacts of products and services

54

APPENDIX

Omissions

191

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARY

Reference

SUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

Disclosure

FINANCIALREPORT

Page no.

GRI 417:2016 Marketing and Labeling
GRI 103:2016 Management Approach 103-1/103-2/103-3

188

417-2

Incidents of non-compliance concerning products and service information and labeling

54–55

417-3

Incidents of non-compliance concerning marketing communications

55

GRI 418:2016 Customer Privacy
GRI 103:2016 Management Approach 103-1/103-2/103-3
418-1

188
Substantiated complaints concerning breaches of customer privacy and losses of customer data

54–55

GRI 419:2016 Socioeconomic Compliance
GRI 103:2016 Management Approach 103-1/103-2/103-3

Straumann Group

2020 Annual Report

419-1

188
Non-compliance with laws and regulations in the social and economic area

54–55

APPENDIX

Omissions

192

HIGHLIGHTSSHAREHOLDERLETTER

MANAGEMENTCOMMENTARYSUSTAINABILITYREPORT

CORPORATEGOVERNANCECOMPENSATIONREPORT

FINANCIALREPORT

POINTS TO NOTEFORWARD-LOOKING STATEMENTS
This publication contains certain forward-looking statementsthat reflect the current views of management. Such statements
are subject to known and unknown risks, uncertainties andother factors that may cause actual results, performance or
achievements of the Straumann Group to differ materially fromthose expressed or implied in this publication. Straumann isproviding the information in this publication as of this date anddoes not undertake any obligation to update any statements
contained in this publication as a result of new information,
future events or otherwise.

INDUSTRY AND MARKET DATA
Unless indicated otherwise, we provide information concerning
our industry in this Annual Report based on our expectations
and general knowledge. Straumann’s market position, ourmarket share and the size of the markets we are operating in are
only estimates based on our internal data and observations.
Straumann has not independently verified such data and cannot
guarantee their accuracy or completeness. Data regarding theindustry, market sizes and the market position of Straumann are
inherently imprecise and meant to give general guidance only.
The estimates and assumptions involve risks and uncertainties
and are subject to change based on various factors.

Straumann Group

2020 Annual Report

PRODUCT AVAILABILITYSTRAUMANN GROUP-RELATED TRADEMARKSThe following trademarks or brands are registered and/or usedby Straumann Holding AG and/or its subsidiaries: Anthogyr,Biora®, CARES®, ClearCorrect®, Clearpilot™, Clearquartz™,­coDiagnostiX®, Createch Medical, Dental Wings, Digital Planning
Service, DWOS®, Emdogain®, Equinox™, etkon®, Grand Morse®,
Instradent®, ITI®, Medentika®, Neodent®, Nuvo™, n!ce®,Novaloc®, Optiloc®, Roxolid®, SLA®, SLActive®, Smyletec™, SMILE
IN A BOX®, Straumann® DenToGo®, Straumann® SNOW™,
Straumann® Virtuo Vivo™, Straumann® Velodrill™, Straumann®
Young Professional™, Straumann®, Straumanngroup®, T-Plus,
Valoc®, Variobase®, youtooth™, Zinedent, ZLA®, ZLActive®.
Amann Girrbach is a registered trademark of Amann Girrbach.
AG Botiss® is a registered trademark of botiss medical AG.
Geniova is a registered trademark of Geniova Technologies S.L.
Rapid Shape is a registered trademark of Rapid Shape GmbH.
Warantec is a registered trademark of Warantec Co., Ltd.
Z-Systems is a registered trademark of Z-Systems AG.

OTHER TRADEMARKS
3shape and TRIOS® are registered trademarks of 3Shape A/S.
Carestream is a registered trademark of Carestream Health, Inc.
SMI Mid (SMIM)® is a registered or pending trademark of the
SIX Swiss Exchange.
STOXX® is a registered trademark of STOXX, Ltd.

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

IMPRINT
Published by: Institut Straumann AG, Basel
Concept and realization: PETRANIX AG Corporate and Financial Communications, Wollerau
Consultant on sustainability: sulytics GmbH, Zurich
Basel, 16 February 2021
©2021, Straumann Holding AG

KEY DATES IN 2021
16 February
9 April
13 April
15 April
29 April
12 August
28 October

2020 Full-year results conference
Annual General Meeting
Dividend ex date
Payment date
First-quarter results conference call
Half-year results conference
Third-quarter results conference call

CONTACTS
Straumann Group headquarters
Peter Merian-Weg 12, 4002 Basel
Tel. +41 61 965 11 11
Investor relations
Marcel Kellerhals
Tel. +41 61 965 17 51
investor.relations@straumann.com
Media relations
Silvia Dobry		Tel. +41 61 965 15 62
Jana Erdmann		Tel. +41 61 965 12 39
corporate.communication@straumann.com
General inquiries
Corporate Communication
Tel. +41 61 965 11 11
Fax +41 61 965 11 03
info@straumann.com

APPENDIX193

OTHER INFORMATION

Straumann Group

2020 Annual Report

INFORMATION FOR INVESTORS

Investor calendar

Events & congresses

Analyst coverage

Publications &media releases

Worldwidelocations

Glossary