2011 Corporate Governance Report

Principles 89Groupstructure 89Capitalstructure 92Shareholdersandshareholdings 94ShareholdersGeneralMeetingandparticipationrights 96BoardofDirectors 97ExecutiveManagement 106InternalManagementDevelopment 110Compensation,shareholdingsandloans 1 1 1Changesincontrolanddefensemeasures 1 1 1Auditors 1 1 1Informationpolicy 1 1 1

corporate governance

contentS

oPErAtIonAlrEvIEwCorPorAtEGovErnAnCE 89

PRINCIPLES Straumanns principles of, and rules on, corporate gover-nancearelaiddownintheArticlesofAssociation,therulesfor organization and operation, the Group ManagementPolicy,theCodeofConduct,andtheChartersoftheBoardCommittees.theseprinciplesandrulesarethebasisofcor-porate governance disclosures, which are in compliancewith the Directive on Information relating to CorporateGovernance published by the SIX Swiss Exchange, whereStraumannsshareshavebeentradedsincethecompanysinitialpublicofferingin1998.

the Articles of Association are available on Straumannswebsite(www.straumann.com).

GROUP STRUCTURE StraumannHoldingAGisalistedstockcorporationincorpo-ratedanddomiciledinSwitzerlandandregisteredinBasel.Information about the company's shares, which are tradedonthemainsegmentoftheSIXSwissExchangeunderthesymbolStMn,isprovidedonpp.91,231.

StraumannHoldingAGistheultimateparentcompanyoftheStraumannGroup,whichisheadquarteredinBaselandincludesatotalof29fullyownedcompanies(seechartonp.90)andtwominority-heldcompaniesaroundtheworld.

CHANGES IN 2011INCORPORATIONS Inthethirdquarterof2011,Straumannestablishedawholly-ownedcompanyinIndiaunderthenameStraumannDen-talIndiaPvtltd,whichwillberesponsibleforregisteringStraumannproductsinIndia.

OPERATIONAL GROUP STRUCTUREthroughout2011,theoperationalstructureoftheGroupwasasfollows: CorporateServices,whichconsistedof:

CorporateBusinessDevelopment&licensing,Corporate

Communication&PublicAffairs,CorporateHumanresources,CorporatePricing,CorporateQualityManagementandCorporatelegal&Compliance

Finance,whichincorporatedallfinance-relatedfunctions,FacilityManagement,InternalAudit,CorporateInvestorrelations,CorporateProcessExcellence&ApplicationsandCorporateInformation&Communicationtechnologies

operations,comprising:Corporatelogistics,GlobalProductionatthefourmanufacturingsites,andGlobalPurchasing

Products,whichwasresponsibleforproductinnovation,developmentandlifecyclemanagement,comprisedthreebusinessunits(Surgical,regenerativeandProsthet-ics)andtheadministrativedepartmentsneededfortheproductlifecycle

Sales,whichcomprisedthesalessubsidiariesgroupedintofiveregions(APAC,CentralEurope,westernEurope,northAmerica,row),andthefollowingfunctions:Marketing,GlobalDistributorSales,Globaltraining&Education,Projects&FinanceManagement,SalesCArESDigitalSolutions,andSalesregenerative.

theChiefExecutiveofficer(CEo),theChiefFinancialofficer(CFo),theHeadofoperations,theHeadofProductsandtheHeadofSalesweretherespectiveDivisionHeads.theCEo,theCFo,theHeadofProductsandtheHeadofSalescom-prisedtheExecutiveManagementBoardoftheStraumannGroup(seep.106forrecentchanges).

ChANgeS IN 2012In December2011, Straumann announced plans to imple-mentaneworganizationalstructurein2012,withtheobjec-tiveofenhancingagility,improvingefficiency,fosteringen-trepreneurismandshorteningtimetomarket.Attheheartof the reorganization is a transformation of the existingProducts and Sales Divisions and the provision of greaterautonomy to the sales regions (EMEA & latin America;northAmerica;Asia/Pacific)andthebusinesses (Surgical,

enhancing agility, improving efficiency, foStering entrepreneuriSm

and Shortening time to market.

oPErAtIonAlrEvIEwCorPorAtEGovErnAnCE90

PRINCIPaL GROUP COmPaNIES

at 31 december 2011. values indicate share capital in each case.

administrative regional headquarters or market development Sales and distribution manufacturing headquarters, sales and distribution

Institut Straumann AgBasel, Switzerlandchf 100 000

Straumann Italia srl milan, italy eur 270 000

Straumann Villeret SAvilleret, Switzerlandchf 9 000 000

Straumann holding Deutschland gmbhfreiburg, germanyeur 25 000

Straumann CADCAM gmbh grfelfing, germany eur 326 000 Straumann gmbh freiburg, germany eur 200 000

Straumann gmbhvienna, austriaeur 40 000

Straumann holding AgBasel, Switzerland chf 1 567 655

StraumannSingapore Pte LtdSingaporeSgd 1

Straumann Pty Ltdvictoria, australiaaud 100

Straumann Japan KKtokyo, JapanJpy 10 000 000

Straumann Dental Korea IncSeoul, South koreakrW 2 300 000 000

Straumann (Beijing) Medical Device Trading Co. LtdBeijing, chinarmB 39 311 948

Straumann Dental India Pvt Ltdgurgaon, indiainr 6 000 000

Straumann Manufacturing, Incandover, uSauSd 1

Straumann USA, LLC andover, uSa uSd 1

Straumann Canada LtdBurlington, canadacad 100 000

Straumann Mexico SA de CVmexico df, mexikomXn 19 407 008

Straumann Brasil LtdaSo paulo, BrazilBrl 3 405 614

Straumann ABgothenburg, SwedenSek 100 000

Biora ABmalm, SwedenSek 950 152

Straumann ASoslo, norwaynok 1 000 000

Straumann Danmark ApSBrndby, denmarkdkk 125 000

Straumann OYhelsinki, finlandeur 32 000

Straumann SARLmarne-la-valle, franceeur 192 000

Straumann SAmadrid, Spaineur 60 101

Straumann Ltdcrawley, great BritaingBp 300 000

Straumann BVijsselstein, netherlandseur 18 151

Straumann SA/NVZaventem, Belgiumeur 2 081 620

Straumann sroprague, czech republiccZk 200 000


Prosthetics and regenerative) shortening decision timesand streamlining processes. with effect of 1 January 2012,the new Executive Board comprised the CEo, the CFo, theHeads of the regions and the Heads of the Surgical andProstheticBusinessUnits(seep.106).

LEGAL GROUP STRUCTURELISTeD COMPANIeSStraumann Holding AG is the sole company of the Strau-mannGroupandislistedatastockexchange.

name StraumannHoldingAG

Domicile PeterMerian-weg12,4052Basel,Switzerland

Sharecapital* CHF1567654.90

totalshares(allregistered)* 15676549

nominalvalue CHF0.10

treasuryshares 1.28%oftotal

Marketcapitalization CHF2541million*

listedat SIXSwissExchange

SecurityID 001228007

ISIn CH0012280076

Bloomberg StMnSw

reuters StMn.S

telekurs(Investdata) StMn

* on 31 december 2011

NON-LISTeD gROUP COMPANIeSthe Group sells products and services through InstitutStraumannAGand21fully-ownedsalessubsidiaries,13ofwhich are in Europe, two in north America, four in theAsia/Pacific region, and two in latin America. the Grouphasfourmanufacturingcompanies,ofwhichthreeareinEurope and one in north America (see p.54 for details ofproduction locations). the purpose of the aforementionedcompanyinIndiaisproductregistration.

thereareseveralGroupsubholdings:InstitutStraumannAGholdsStraumannItaliasrl;StraumannHoldingDeutschland

GmbHholdstheGermansalesanddistributioncompanyaswellastheCADCAMmanufacturingandcomputer-guided-surgerydevelopmentcompanies;whilethenorthAmericanproductioncompany,StraumannManufacturing,Inc.,holdstheUSsalesanddistributioncompany.

on31December2011StraumannHoldingAGdirectlyorin-directly held 100% of the capital and voting rights in allGroupcompanies.Inaddition,StraumannHoldingAGheld30% of the capital and voting rights in Dental wings Inc.(Canada) and open Digital Dentistry AG (Switzerland).HeadquarteredinMontreal,Canada,Dentalwingsspecial-izesinsoftwarefordesignandmanufacturinginadditiontodevelopingandmanufacturing3Dscanners.openDigitalDentistry AG is mainly responsible for the distribution ofDentalwingssoftwareproducts.

Aslaiddownintherulesoforganizationandoperation,therespectiveregionalHead,theCFoandtheGeneralCounselaregenerallyMembersoftheBoardofDirectorsinallStrau-manncompanies,representingtheparentcompanyastheonlyshareholder.Duringthevacancyof theCFoposition,theregionalFinanceofficerswereappointedtotherespec-tive Boards ad interim. Straumann has one seat on theBoard of Directors of Dental wings Inc. and one on theBoard of open Digital Dentistry AG. the new CFo, whojoinedStraumanninnovember2011willbeelectedtotherespective Boards in 2012, thereby replacing the regionalFinanceofficers.

ORDINARY SHARE CAPITAL on 31 December 2011, the share capital was composed of15676549registeredshares,eachwithanominalvalueofCHF0.10. the share capital is fully paid in. on 31 December2011,theordinarysharecapitalamountedtoCHF1567654.90.

CONDITIONAL AND AUTHORIZED SHARE CAPITAL AconditionalsharecapitalwasapprovedforanunlimitedperiodatanextraordinaryGeneralMeetingin1998foruse


in equity participation plans for employees and manage-ment (see Compensation report for details). At the end of2011, theconditional capitalamounted to CHF 32345.10andthenumberofconditionalshareswasCHF323451.on31December2011,StraumannHoldingAGdidnothaveanyauthorizedsharecapital.

CaPITaL STRUCTURE

(in CHF 1 000) 31 Dec 2011 31 Dec 2010 31 Dec 2009

Equity 671118 695630 635420

reserves (58523) 4578 23838

retainedearnings 728073 689484 610014

ordinarysharecapital 1568 1568 1568

Conditionalsharecapital 32 32 32

Authorizedsharecapital none none none

numberofregisteredshares

15676549 15676549 15676549

registrationrestrictions none none none

votingrestrictions none none none

opting-out,optingup none none none

CHANGES IN CAPITAL thecapitalofStraumanndidnotchangein2011.theonlychange in the past three years was in December 2009,

OPERaTIONaL GROUP STRUCTURE 2011

CORPORATe SeRVICeS Business development & licensing communication & public affairs human resources legal & compliance Quality management pricing

CeO

FINANCe accounting controlling information technology internal audit investor relations risk management treasury

PRODUCTS intellectual property product development & life cycle regulatory affairs research

SALeS marketing Sales training & education

OPeRATIONS logistics production purchasing

represented in executive management Board


when45878sharesoftheconditionalsharecapitalwereconverted into ordinary shares, increasing the ordinarysharecapitalfromCHF1563067.10toCHF1567654.90.

RESTRICTIONS ON THE TRANSFERABILITY OF SHARES AND NOMINEE REGISTRATIONS Allshareshavethesameentitlementstoadividend.EachsharedulyenteredinStraumannsregisterofsharesasbe-ingheldintheshareholdersownnameandfortheshare-holders ownaccountentitles theshareholder toonevote(seesectionbelowonShareholdersrights).

Aregisterofsharesandtheirownersismaintainedandad-ministeredbySIXSAGAG(Baslerstrasse90,P.o.Box,4601olten,Switzerland)onbehalfoftheCompany.Proofofac-quisitionoftitleinthesharesisaprerequisiteforentryintheshareregister.theCompanymustbeinformedofanychanges.PersonsrecordedintheregisterareconsideredtobeshareholdersinrelationtotheCompany.theCompany

may,afterhearingtheaffectedparties,deleteentriesintheregisterifthesearebasedonfalseinformation.

there are no restrictions on the transferability of Strau-mannHoldingsshares.Purchasersofsharesareenteredintheshareregisterasshareholderswithvotingrightsiftheyexpressly declare that they have acquired the registeredshares in theirownnameandfor theirownaccount. Ifapurchaserisnotwillingtomakesuchadeclaration,he/sheisregisteredasashareholderwithoutvotingrights.

nomineescanregisterthesharestheyhold, if this isspe-cificallyapprovedbytheBoardofDirectors.theBoardofDirectors decides whether nominee entries shall havevotingrightsornot.At31December2011,nonomineeswereregisteredashavingvotingrights.

At31December2011,31.72%ofallissuedshareswereeithernotregisteredorwereregisteredwithoutvotingrights.

OPERaTIONaL GROUP STRUCTURE 2012

represented in executive management Board

BUSINeSS DeVeLOPMeNT & LICeNSINg

COMMUNICATIONS & MARKeTINg SeRVICeS

FINANCe

hUMAN ReSOURCeS

LegAL & COMPLIANCe

OPeRATIONS

CeO

BUSINeSS UNIT PROSTheTICS

BUSINeSS UNIT SURgICAL

RegeNeRATIVe BUSINeSS

SALeS I (eMeA, LATAM, DISTRIBUTORS)

SALeS II (NORTh AMeRICA)

SALeS III (ASIA/PACIFIC)


PARTICIPATION CERTIFICATES AND CONVERTIBLE/ EXCHANGABLE SECURITIES Straumannhasnotissuedanyofthefollowing:participa-tion certificates, profit participation certificates, convert-ible/exchangeablebonds,warrants,optionsorothersecu-rities granting rights to Straumann shares, other thanoptions/warrants grantedtocertainemployeesasacom-ponentofcompensation(seeCompensationreportp.123).

SHaREHOLDERS aND SHaREHOLDINGSDISTRIBUTION OF SHARESon 31 December 2011, 10938 shareholders were registeredasholding85.6%ofthetotalsharesofStraumannHoldingAG(seechartopposite).

Shares held No. registered sharefolders

% of share capital

% of registered sharefolders

1100 7214 2.34 65.95

1011000 3368 6.28 30.79

100110000 305 5.55 2.79

10001100000 37 5.69 0.34

1000011000000 12 26.24 0.11

1000001andmore 2 39.51 0.02

Unregisteredshares n/a 14.40 n/a

n/a = not applicable

MAJOR SHAREHOLDERSthe following major shareholders were registered asholdingmorethan3%ofthesharecapitalon31December2011.

major shareholders(in %)

31 Dec 2011

31 Dec 2010

31 Dec 2009

Drh.c.thomasStraumann

(viceChairmanoftheBoard)

27.3 27.6 28.0

Drh.c.rudolfMaag 12.2 12.2 12.3

SimoneMaagdeMouraCunha 5.9 6.0 6.0

GabriellaStraumann 3.4 4.0 4.3

Total 48.8 49.8 50.6

In october 2011, Manning & napier Advisors, Inc. of 290woodcliffDrive,Fairport,nY14450,USAreportedacorpo-ratereorganizationresultinginanewlyformedDelawarelimitedliabilitycompany,calledManning&napierAdvi-sors, llC. the latter therefore reported its new holding of599839shares,correspondingto3.83%ofthesharecapitalofStraumann.InDecember2011,itreportedthatthesameshareholdinghaddroppedbelowthe3%threshold.


At the end of December 2011, Baillie Gifford, an indepen-dent investment management firm based in Edinburgh,Scotland,heldmorethan3%ofthesharecapitalofStrau-mannHoldingAG.thestakeisdividedamongBaillieGifford&Co.,BaillieGiffordlifeltdandBaillieGiffordoverseasltd,allofCaltonSquare,1Greensiderow,Edinburgh,UK.BaillieGiffordisnotregisteredinStraumannsshareregister.

noothernon-registeredshareholderreportedaholdingofmorethan3%ofthesharecapital.

to Straumanns knowledge, no shareholders agreementsorotheragreementsexistbetweentheshareholders.

SHARE PURCHASE INITIATIVEInAprilandMay,theGrouppurchased24366Straumannshares on the open market as treasury shares. Early inAugust, the Grouppurchased32307 shares fromDr.h.c.thomasStraumann.

Intotal,28928shareswereusedfortheGroupsmanage-mentbonusshareplansandfor itsemployeeshareplans.InAugust,theGroupannounceditsintentiontobuyStrau-mannsharesontheopenmarketforuptoamaximumofCHF100million.thegoalofthisinitiativeistoreducethe

Groupshighcashholdingswithoutrestrictingitsabilitytotake advantage of strategic opportunities. Shares pur-chasedareheldastreasurysharesandmaybeusedfortheGroupsemployeeshareplans.theprogramstartedon1September2011andisoveranunspecifiedperiod.Foranoverview of the number of treasury shares held byStraumann Holding AG and Institut Straumann AG seenote4totheFinancialStatementsoftheFinancialreportofStraumannHoldingAGonp.216.

SHaREHOLDINGS ON 31 DECEmbER 2011 (by GEOGRaPHy)SHaREHOLDINGS ON 31 DECEmbER 2011 (by SEGmENT)

Switzerland 67%

EU 4%

Rest of World 1%

Non-registered 14%

Gb 10%

USa 4%

major shareholders

48.8%

Non-registered 14.4%

Institutional shareholders 25.8%

Private individuals 11%


Updated summaries of the trading activities can beviewedintheInvestorrelationssectionofthecompanyswebsite or on the homepage of the Swiss takeover board(www.takeover.ch/transactions/detail/nr/0488).

CROSS SHAREHOLDINGS Straumann does not have, and has not entered into, anycross shareholdings with other companies relating toequityorvotingrights.

SHaREHOLDERS GENERaL mEETING aND PaRTICIPaTION RIGHTSthe Shareholders General Meeting is held in Basel inMarchorApril.InvitationstotheGeneralMeetingareis-sued in writing at least 20 days before the meeting andare published once in the companys journals of record,the Schweizerisches Handelsamtsblatt (SHAB SwissofficialGazetteofCommerce),theneueZrcherZeitung,andonthecompanyswebsite,www.straumann.com.

2011 GENERAL MEETING the2011meetingtookplaceon18March,andwasattendedby604shareholdersrepresentingatotalof9702581votingshares,correspondingto61.9%oftheoverallsharecapital.

themeetingapproved:the2010AnnualreportandFinan-cial Statements as well as the Compensation report (inaseparateadvisoryvote),theappropriationoftheavailableearnings, the dissolution of legal reserves, and the 2010dividend.

Art.3.1.3,para.5oftheArticlesofAssociationwasamend-ed by the meeting. this amendmentreducedthe require-mentforputtingitemsontheagendafromindividuallyorjointlyrepresenting400000sharestoindividuallyorjointlyrepresentingatleast150000shares.

the Directors were discharged for their activities in 2010and were re-elected as Board Members for a term of oneyear.PricewaterhouseCoopersofBaselwasreappointedasStatutoryAuditorsforafurthertermofoneyear.

At the meeting Straumann introduced electronic voting,which makes it possible to determine exact results. theagenda,theminutes(includingthevotingresults)andame-diareleasesummaryofthemeetingarepublishedintheIn-vestorrelationssectionofthecompanyswebsite:www.straumann.comCorporateGovernance/AnnualGeneralMeeting.


2012 GENERAL MEETING In2012,theShareholdersGeneralMeetingwilltakeplaceon 4 April. All shareholders who are entered in the shareregisterashavingvotingrightsareentitledtoattendtheGeneralMeetingandhavetherighttovote.Eachregisteredshareentitlestheholdertoonevote.therearenovotingre-strictions.AllshareholdersmayberepresentedattheGen-eralMeetingbywrittenproxy.therearenogeneralstatu-toryquorums.

Fororganizationalreasons,newentriesintheshareregistercannotbemadeafter21March2012.ShareholderswhoselltheirsharespriortotheGeneralMeetingarenolongeren-titledtovote.theinvitationtosubmitproposalsforagendaitemsisannouncedbypublicationonce inthecompanysjournalsofrecordandonthecompanyswebsite.

Shareholders individually or jointly representing 150000sharesmayrequestitemstobeincludedintheagendanolaterthanthedatepublishedontheinvitation.

Shareholders individually or jointly representing at least10% of the share capital may request an ExtraordinaryGeneralMeeting.therequestmustbemadetotheBoardofDirectorsinwriting,statingtheagendaitemsandmotions.

Shareholders have the right to receive dividends and holdothersuchrightsasdefinedintheSwissCodeofobligations.

bOaRD OF DIRECTORS AllmembersoftheBoardofDirectorsareelectedindividu-allybytheShareholdersGeneralMeetingforatermofoneyear,withre-electionpermittedandnotlimited.

AttheShareholdersGeneralMeeting inMarch2011,allcurrent Directors Gilbert Achermann, Dr SebastianBurckhardt,DominikEllenrieder,Drh.c.thomasStraumann,rolandHess,Ulrichlooser,DrBeatlthiandStefanMeis-terwerere-electedforafurtherone-yearterm.

Following the Meeting, the new Board appointed GilbertAchermannasitsChairmanandDrh.c.thomasStraumannasitsviceChairman.

the Board of Directors of Straumann Holding AG com-prised eight non-executive members. with the exceptionofGilbertAchermann,nootherDirectorhasbeenamem-ber of the companys Executive Management during thepastthreeyears.

theDirectorsareallSwisscitizensandtheaverageageoftheMembersoftheBoardatyear-endwas52.

GILBERT ACHERMANN Swiss (born 1964), Chairman of the board of Directors

GilbertAchermannhasbeenamemberoftheBoardofDi-rectorsatStraumannsince2009.In2010,hewasappointedChairmanoftheBoard.Heiselecteduntil2012.MrAcher-mannjoinedStraumannin1998asChiefFinancialofficerandwasappointedPresident&ChiefExecutiveofficer in2002,theofficehehelduntilthe2010AGM.

Formerly,heservedfor13yearsatUBSinZurich,Geneva,newYorkandFrankfurt,whereheworked in InvestmentBanking.GilbertAchermannholdsanExecutiveMBAfromIMD in lausanne and a degree from the Hwv businessschoolinSt.Gallen.


other key assignments include: the Board of SiegfriedHolding AG, Zofingen (Chairman), the Board of MoserGroupAG,neuhausenamrheinfall(viceChairman), theBoard of Directors and Board of trustees of the indepen-dentacademicnetworkInternationalteamforImplantology(ItI)aswellastheadvisoryboardsforInternationalCoop-erationoftheCantonBasel-StadtandfortheBaselAssoci-ationofStatisticsandEconomy.Attimeofpublication,MrAchermann had been nominated to stand for election totheBoardofBankJuliusBaer,Zurich.

GilbertAchermannhasbeenamaincontributortotheCom-panys past success. He stands for continuity, stability andcredibilityamongthevariousstakeholders.Inaddition,theBoardbenefitsfromhisextensiveknowledgeoftheindustry,andhisbroadfunctional,regionalandmanagerialexperience.

bOaRD OF DIRECTORS

gilbert achermann dr. Sebastian Burckhardt

dr. h.c. thomas Straumann dominik ellenrieder


DR H.C. THOMAS STRAUMANN Swiss (born 1963), Vice Chairman of the board member of the Strategy Committee

thomas Straumanns skills in precision engineering werecomplemented by his studies at the Basel ManagementSchool,fromwhichhegraduatedin1988.In1990,hewasre-sponsibleforrestructuringInstitutStraumannAGandwasCEoandChairmanoftheBoardofDirectorsuntil1994.HewasChairmanoftheBoardofStraumannHoldingAGuntil

2002. In 2004, he was awarded an honorary doctorate bytheUniversityofBasel,Switzerland.

thomas Straumann has been a member of the Board ofDirectors of Straumann since 1990 and is elected until2012.otherdirectorshipsincludeCentervisionAG(Chair-man), CSI-BHE AG (Chairman), Medartis AG (Chairman),tschudin+HeidAG(DeputyChairman),GrandHotelBelle-vue SA (Member of the Board), Grand Hotel les trois roisSA (Member of the Board), International Bone research

roland hess

Beat lthi

Stefan meister

ulrich looser


AssociationIBrA(MemberoftheBoard),andMoserGroupAG(MemberoftheBoard).

thomasStraumannistheprincipalshareholderofStrau-mann Holding AG. He complements the Board with hisunderstandingofthedentalandmedicaldeviceindustriesthrough personal management experience and variousshareholdings. Having built up several companies, inwhich he is still involved, he is a true entrepreneur andhasadiverseportfolioofinterests,includingnot-for-profitactivities.

DR SEBASTIAN BURCKHARDT Swiss (born 1954), member of the audit Committee Secretary of the board

SebastianBurckhardtbeganhisstudiesinthefieldsofeco-nomicsand lawandobtainedhisdoctorate lawdegreeattheUniversityofBasel.Heisalawyeradmittedtothebarof Switzerland and a civil law notary in Basel. SebastianBurckhardt was admitted to the new York Bar followingstudiesatnewYorkUniversitySchooloflaw.Heisapart-neratthevischerAGlawfirminBasel.vischerAGisStrau-mannsmainlawfirminSwitzerland(fordetailsregardingpaymentstovischerAGin2011seenote28oftheauditedconsolidatedFinancialStatementsonp.199).

Sebastian Burckhardt has been a member of the Board ofDirectorsofStraumannsince2002andiselecteduntil2012.other directorships include: Dolder AG (Chairman of theBoard), Applied Chemicals International AG, persona ser-viceAGandtheSchoolforHealingoftheDeafandPersonswithSpeechImpediments,riehen,Switzerland.

Straumanns Board of Directors benefits from Dr Burck-hardtsexpertiseasanindependent lawyer.Heisaspe-cialist incorporateandcommercial lawandinmergers,acquisitions, joint ventures, licensing, distribution andtechnologycontracts/agreements.Hisknowledgeextends

wellbeyondlegalmattersandincludesmanyyearsexpe-rienceoncorporateboards.

DOMINIK ELLENRIEDER Swiss (born 1958), member of the Strategy Committee

AgraduateoftheUniversityofBasel,whereheobtainedadegreeineconomics,DominikEllenriederwasHeadofIn-ternationalSalesatProtekAG(laterSulzerMedica).In1990,hejoinedStratecMedical,whereheheldaseriesofmana-gerial positions with increasing responsibility (develop-ment, product management, and operations of affiliatedcompanies). In 2000, he founded Kuros therapeutics AG,wherehewasChairmanoftheBoarduntil2002.

DominikEllenriederisChairmanoftheBoardsofSentecAG,QGelSAandSenSpecGmbHinrostock,Germany,aswellasPartnerofEndeavourvision(vCFonds).otherkeydirector-shipsincludeMedartisAGandKurosBiosurgeryAG.

DominikEllenriederhasbeenamemberoftheBoardofDirectorsofStraumannsince2001andiselecteduntil2012.

Havingworkedforanumberofyearsinthemedicaldevicearena,DominikEllenriederbringstotheBoardsignificantexperienceandknowledgeoftheindustry.Asanentrepre-neurhehasbeeninvolvedinanumberofstart-upcompa-nies and has a portfolio of diverse interests within themedicaldeviceindustry.

ROLAND HESS Swiss (born 1951), Chairman of the audit Committee member of the Strategy Committee

rolandHessissenioradvisortotheExecutiveCommitteeofthe Board of Schindler Holding AG. He is also President oftheBoardsofseveralcompanieswithintheSchindlerGroup.MrHessjoinedSchindlerin1984androsethroughpositionsof increasingresponsibility inControlling,Financeandre-


gionalManagementtobecomePresidentoftheElevatorandEscalatorDivision.From1971 to 1984,heworkedfornestl,initiallyinaccounting,thenasaninternationalauditor,andfinallyasChiefFinancialofficerofaGroupcompany.

HiscareerincludesseveralyearsinnorthandlatinAmeri-ca,inadditiontoassignmentsinEurope.HeholdsadegreeinBusinessAdministrationfromlucerneBusinessSchoolandstudiedatHarvardBusinessSchoolnearBoston.

rolandHesshasbeenamemberoftheBoardofDirectorsofStraumannsince2010andiselecteduntil2012.

Hehasalonganddistinguishedtrackrecordinlargercom-paniesinmorematureindustries,combinedwithin-depthregionalandfunctionalexperience.Inaddition,hecomple-ments the Board with expertise in compliance, risk man-agementandstandardizedglobalprocedures.

ULRICH LOOSER Swiss (born 1957), Chairman of the Strategy Committee member of the Human Resources Committee

UlrichlooserisapartnerwithBlr&PartnersAG.From2001to2009,hewaswithAccentureltd.,wherehebecameChair-man of its Swiss affiliate (2005) and Managing Director oftheProductsBusinessinAustria,SwitzerlandandGermany.Earlier, he spent six years as a partner at McKinsey &Companyltd.MrloosergraduatedwithadegreeinPhysicsfromtheZurichEtH(SwissFederalInstituteoftechnology)andinEconomicsattheUniversityofSt.Gallen.

UlrichlooserisChairmanoftheBoardsofChemgineeringAGandeconisAGaswellasaMemberoftheBoardsoftheBachofenGroupandeconomiesuisse,whereheheadedtheCompetition Commission until 31 December 2011 and theCommissionofresearchandEducationasof1January2012.He heads a chapter of the Swiss American Chamber ofCommerce, is a Member of the Board of Engineers Shape

ourFuture,andheadsthefinancecommissionoftheSwissStudiesFoundation.

Ulrich looser has been a member of the Board of Direc-tors of Straumann since 2010 and is elected until 2012.His expertise in strategy, project and human capitalmanagement is valuable to the Straumann Board. Headdsin-depthconsultancyexperience,whichisparticu-larlyusefulinthevision2020processthattheCompanyhasbeenundertaking.

DR BEAT LTHI Swiss (born 1962), member of the audit Committee member of the Human Resources Committee

Beat lthi is CEo and Co-owner of CtC Analytics AG, aworld leader in gas and liquid chromatography automa-tion. After obtaining his PhD in Electrical EngineeringfromZurichEtH,BeatlthibeganhiscareerwithZell-wegerUsterAG,aleadingmanufacturerofqualitycontrolequipment in textile production. In 1990, he moved toMettler-toledoInternationalInc.androsetothepositionof

BOARD OF DIReCTORS

AUDITroland hess*dr Sebastian Burckhardt dr Beat lthi

hUMAN ReSOURCeSStefan meister*ulrich looserdr Beat lthi

STRATegYulrich looser*dominik ellenriederroland hessdr h.c. thomas Straumann

COmmITTEES OF THE bOaRD OF DIRECTORS

* committee chairman


GeneralManageroftheSwissaffiliate.In1994,hecomplet-ed an executive program at InSEAD and subsequentlyjoinedFeintoolInternationalInc. in1998.Duringhisfour-yeartenureasCEo,thecompanywentpublicanddoubledinsize.In2003,hereturnedtoMettlertoledoasCEoofthelaboratoryDivision.Attheendof2007,hejoinedCtCAna-lytics near Basel to further develop this medium-sizedcompanyasanentrepreneur.

BeatlthihasbeenamemberoftheBoardofDirectorsofStraumannsince2010andiselecteduntil2012.HeisalsoamemberoftheBoardofDirectorsoftheBossardGroup.

He combines entrepreneurship and corporate experienceindifferentindustries,whichmakehimavaluablecontrib-utor to strategic and operational matters. His scientificbackground together with his experience in service busi-nessesareoffurtherbenefittotheStraumannBoard.

STEFAN MEISTER Swiss (born 1965), Chairman of the Human Resources Committee

StefanMeisterholdsadegreeineconomicsfromBaselUni-versity. He started his career at Sandoz Pharma in 1991.From1995to2009heworkedforCelesioAG,aleadingphar-maceutical distribution and services company. From 1999,hewasamemberoftheCelesioManagementBoard,wherehis responsibilities included Finance and Controlling, It,HumanresourcesandthePharmacyBusiness.In2010,Ste-fanMeisterjoinedtheManagementBoardofFranzHaniel&Cie.GmbH,afamily-owned,internationalgroupofcom-paniesholdingamongstothersamajorstakeinMetroAG and a majority stake in Celesio. At Haniel, he was re-sponsiblefortheoperatingbusinessesCwS-bocoandElGaswellasGroupFinance,ItandCorporateresponsibility.

InSeptember2011,StefanMeistertookofficeasMemberofthe Board and Chief operating officer of Kedge CapitalHoldings(Jersey)ltd.,theholdingcompanyfortheBertarelli

Family Investments. with his thorough understanding ofportfolio businesses and macro-level strategic leadership,he assumes operating leadership and drives the strategicdevelopmentoftheBertarelliFamily Investments inclosecooperationwiththeBoardanditsChairman.

Stefan Meister is a Member of the Advisory Board of BPn(Business Professionals network) in Bern. He has been amemberoftheBoardofDirectorsofStraumannsince2010andiselecteduntil2012.

HecomplementstheBoardwithin-depthknowledgeinthehealthcare sector and from industries with comparablebusinessmodels/challengestothoseofStraumann.Healsohasawealthofexperienceingovernance,financeandhu-manresourcesmanagement.

OPERATING PRINCIPLES OF THE BOARD OF DIRECTORS theBoardofDirectorsmeetsatleastfourtimesayearforone-day meetings and as often as business requires. In2011,itheldninemeetings.theextenttowhichtheBoardallocateditstimeandattentiontovariousissuesandagen-dapointsisshowninchartabove.Itsmajortasksincluded:finalizingthevision2020project,evaluatingtransforma-

aLLOCaTION OF bOaRD TImE IN 2011

in 2011, the Board of directors focused its time on four key themes in the proportions indicated above.

Vision/Strategy

CompensationControl

Transformation


tional opportunities, ensuring that Straumann has therightorganization,therightcompensationsystemandtherightpeopletoaddvaluefortheshareholders,andfinallysupporting the leadership amid changing industry dy-namicsandeconomicuncertainty.themembersoftheEx-ecutiveManagementBoardparticipateinBoardmeetingsin an advisory capacity. Dr Sebastian Burckhardt acts asSecretarytotheBoardofDirectors.theBoardofDirectorsconsultsexternalexpertswherenecessarywhendiscuss-ingspecifictopics.

theBoardofDirectorsisresponsibleforthestrategicman-agementoftheCompany,thesupervisionoftheExecutiveManagement Board and financial control. the Board ofDirectorsreviewstheCompanysobjectivesandidentifiesopportunitiesandrisks.Inaddition,itdecidesontheap-pointment and/or dismissal of members of the ExecutiveManagementBoard.

theBoardofDirectorshasaquorumifamajorityofmem-bers ispresent.validresolutionsrequireamajorityofthevotes cast. In the event of a draw, the Chairman of theBoardholdsthedecidingvote.

COMMITTEES OF THE BOARD OF DIRECTORS theBoardofDirectorshasthreepermanentcommitteescon-sistingofnotfewerthanthreeBoardMemberswithrelevantbackground and experience: the Audit Committee, the Hu-manresourcesCommitteeandtheStrategyCommittee.themajority of each Committees members shall be non-execu-tive. Currently, the Audit Committee and the Human re-sourcesCommitteebothcomprisethreenon-executiveBoardMembers and the Strategy Committee comprises four non-executiveBoardMembers.

Each Committee informs the Board about its deliberations,makes recommendations, and subsequently monitors theimplementation of the Boards decisions. the Human re-sourcesCommitteetakesdecisionsdirectlyinthecontextofrecruiting members of the Executive Management Board.Copiesofthechartersofthethreepermanentcommitteescanbefoundonthecompanyswebsite:www.straumann.comunderInvestorrelations.

In 2011, the Audit Committee met six times, the Humanresources Committee three and the Strategy Committeefivetimes.

TImE (DayS) SPENT by INDIVIDUaL mEmbERS OF THE bOaRD OR aT bOaRD aND COmmITTEE mEETINGS IN 2011

* note: meeting preparation & follow-up/conference calls/minutes/bilaterial meetings etc.

meetings G. achermann T. Straumann R. Hess b. Looser b. Lthi S. meister S. burckhardt D. Ellenrieder

Boardmeetings 9 9 9 9 9 9 9 9

AuditCommittee 6 6 6 6

StrategyCommittee 5 5 5 5 5

HumanresourcesCommittee 3 3 3 3

other* 93 11 15 18 10 16 18 12

Total days 116 25 35 35 28 28 33 26


theBoardofDirectorsmayestablishfurthercommitteesorappointindividualmembersforspecifictasks.

Beginning in 2012, the Board of Directors will provide anew mentoring service. Each member of the ExecutiveManagementwillbeassignedtoaBoardMember,whowillact as a coach. the concept is to provide an experiencedsparringpartnerandsoundingboardforExecutivestotestideasandseekaqualifiedindependentopinion.

AUDIT COMMITTEE Members: roland Hess (Chair), Dr Sebastian Burckhardt,DrBeatlthi

thisCommitteesmaintasksareto: Develop,proposeandreviewprinciplesforthefinancial

planning,dividendpolicy,accountingandreporting,dis-closureandcapitalmarketrelations

reviewproposedconceptsoffinancialobjectives,suchasbudgetprocess,capitalstructureandcapitalexpenditure

reviewtheGroupsfinancepolicy Selecttheexternalauditors,examinetheirindependence

andeffectiveness,aswellasthatoftheinternalcontrolsandthewayinwhichthetwobodiescooperate

review and discuss the financial statements with theCFoand,separately,withtheHeadoftheexternalaudi-torswithouttheCEoandtheCFobeingpresent

review the auditing services provided by the auditorsandtheirremuneration

review other activities performed by the auditing firmonbehalfof theCompany, inparticularwithrespect toitsindependence

review organization, progress and staffing of the inter-nal audit function, review its reports and the manage-mentresponses

reviewmajorissuesregardingcompliancewithapplica-ble laws and regulations, as well as material litigationandlegalrisks

reviewtheriskmanagementframework.

HUMAN RESOURCES COMMITTEE Members:StefanMeister(Chair),Ulrichlooser,Beatlthi

thisCommitteesmaintasksareto: review and approve the principles and programs for

compensation, including proposals to the Board regard-ing the stock option plans and the principles governinggrantsmadeunderthem

Ensurethatthecompensationprinciplesaredesignedto:fosterahighperformanceculture;manageperformancethroughastructuredsystem;competewithbest-in-classglobal companies and industry benchmarks as well aswithlocalmarketpractices

ConsiderandrecommendemploymentcontractsfortheCEo, the members of the Executive Management BoardandtheCorporateManagementGroup

reviewtheprinciplesandprogramsforcompensationoftheCEo,theExecutiveManagementBoardandtheCor-porateManagementGroup(inparticularstockparticipa-tionprogram,optionsandbonusschemes)andevaluateperiodically their performances against individual andcompanygoals

recommend the compensation schemes for the Boardandperiodicallyevaluatetheperformanceof theBoardanditsCommittees

Periodicallymonitorandreviewsuccessionplanningin-cluding policies and principles for the selection of themembers of the Executive Management Board and theCorporateManagementGroup

Establish and review human resources policies tostrengthenStraumannspositionintheHrmarket.

STRATEGY COMMITTEE Members:Ulrichlooser(Chair),Drh.c.thomasStraumann,DominikEllenrieder,rolandHess

themaintasksofthisCommitteeareto: review and assess the long-term business development

visionandmissionoftheCompany


review and assess the Companys business franchiseportfolio,itsgeographicportfolio,reachandchannelap-proach, and the general validity of its business modelconsidering competitive dynamics, disruptive technolo-giesandeconomictrends

review the strategic plan which includes financial andothermedium-termtargetsandissubsequentlysubmit-tedforapprovalbytheBoard

reviewthemerger,acquisition,licensingandotherbusi-nessdevelopmentstrategiesoftheCompany.

ASSIGNMENT OF RESPONSIBILITIES TO THE EXECUTIVE MANAGEMENT BOARD theBoardofDirectorshasdelegatedresponsibilityfortheoperationalmanagementandsustainabledevelopmentofthe Company to the CEo and the Executive ManagementBoard.theCEoisresponsiblefortheoverallmanagementof the Straumann Group and its operations. the CFo isresponsibleforFinanceandInformationtechnology.

theHeadsoftheSalesregionsareresponsibleforthesalesandlocalmarketingactivitiesandperformanceofthevar-iouscountryorganizationsintheirrespectiveregions.theHeads of the Business Units (BUs) have a commercial re-sponsibilityfortheirbusinesses,includingProductlifecy-cleManagement,research&DevelopmentandMarketingwithintherespectiveBUportfolio.

theBoardofDirectorshasnotdelegatedanymanagementtaskstocompaniesoutsidetheGroup.

INFORMATION AND CONTROL MECHANISMS FOR THE BOARD OF DIRECTORS AND THE EXECUTIVE MANAGEMENT MANAgeMeNT INFORMATION SYSTeMtheGroupsManagementInformationSystemencompass-esmanagement,businessandfinancialreporting.the in-formationisprovidedtotheExecutiveManagementBoardonceamonthandtotheBoardofDirectorssummarilyonamonthlybasisandindetailonaquarterlybasis.

overthepasttenyears,Straumannhasbuiltupastate-of-the-art SAP enterprise resource planning system,which now covers 97% of the Groups business transac-tions. the system links all major subsidiary companiesand production sites directly with Group headquarters.thisgreatlyreducesthepotentialforerror/fraudanden-ables the Executive and Senior Management to monitorlocalprocessesandrelatedfiguresdirectlyindetailandinrealtime.

INTeRNAL CONTROL SYSTeM (ICS)theGroupsInternalControlSystemisakeyinstrumentfordesigningbusinessprocesses,measuringprogresstowardsfinancial goals and addressing potential financial issuesbefore they occur. It also supports the design of businessprocessesinordertoachievethedesiredlevelofcontrolintermsofefficiencyandeffectiveness.

theCompanysapproachistoensurethatinternalcontrolsareaccurate,timely,robust,andreceiveappropriateman-agement attention in each respect. to achieve this, dedi-catedcontroltemplatesareusedforeachbusinessprocesstoaddressmajorrisks.thetemplatesarecontinuouslyim-provedandarebeingextendedtoincludesupportingpro-cessflows. Inaddition,eachentity (salesaffiliate,produc-tion site or global function) has a designated, trainedpersonorteamwhichisultimatelyaccountablefortheas-sessment undertaken and the decisions arising from it. AclearbenefitoftheInternalControlSystemhasbeenanen-hanced segregation of duties, an increased control con-sciousness and a higher awareness of potential risks andtheirconsequences.

the ICSprogramiscoordinatedbyCorporate InternalAu-dit, which meets with the external auditors on a regularbasistodiscussthestatusofICissuesandthestatusofre-mediation of control deficiencies. Internal controls areevaluatedannuallybytheexternalauditorsandbyInter-nalAuditaccordingtoanagreedprogram.


INTeRNAL AUDIT CorporateInternalAuditatStraumannisanindependentand objective assurance and consulting body, reportingdirectly to the Chief Financial officer and to the AuditCommitteeoftheBoardofDirectors.

themaintaskofCorporateInternalAuditistoevaluatetheeffectivenessoftheGroupsgovernanceandriskmanage-ment processes, to review and assess internal controls, tomonitor compliance with external and internal policiesandprocedures,andtoensuretheeconomicalandefficientuse of the companys resources. In this role, Corporate In-ternalAuditpromotestheexchangeofbestpracticeswith-in the Straumann Group, proposes improvements, andmonitorstheirimplementation.

Inaddition,CorporateInternalAuditpursuesthedevelop-ment of the Groups Internal Control System (ICS), whichwasestablishedin2008.

In 2011, Corporate Internal Audit performed 14 audits atglobalandlocallevels,atproductionsitesandinsalesaffil-iates,accordingtotheauditprogramapprovedbytheAu-ditCommitteeoftheBoardofDirectors.

CORPORATe RISK MANAgeMeNT theBoardofDirectorsisresponsiblefortheoverallsuper-vision of risk management and uses the Internal Auditfunction to this end. the Board has delegated the task ofrisk management to the Chief risk officer (Cro), who isalso the CFo. through its Audit Committee, the Board as-sessesanddiscussesrisksonaregularbasisinconsultationwiththeCroand/ortherelevantmembersofseniorman-agement(seeriskManagementonp.145).

EXECUTIVE maNaGEmENTtheGroupsExecutiveManagementBoard(EMB)isrespon-sible for the operational management of the StraumannGroup,inlinewiththeinstructionsissuedbytheBoardofDirectors.Itstasksarelaiddownintheorganizationalandbusinessregulations.Itisalsoresponsibleforglobalstrategyandstakeholdermanagement.

In2011,theEMBcomprisedfourmembersundertheleader-shipoftheCEo,BeatSpalinger.theothermembersinclud-ed: theCFothomasDressendrfer,whotookofficeon1november2011(BeatSpalingeractedasadinterimCFoandHeadoftheFinanceDivisionfrom15September2010untiltheendofoctober2011).DrSandroMatterwasHeadoftheProducts Division and Franz Maier was Head of the SalesDivisionuntil31December2011.

torepresenttheregionsandleadingbusinessunitsattopmanagement level, the Executive Management Boardwasexpandedon1January2012fromfourtosevenmembersaspartofabroadreorganizationinitiative.BeatSpalinger(President&CEo),thomasDressendrfer(CFo),andDrSandroMatter(EvPProsthetics)werejoinedby:Drrenwilli(EvPSurgical),FrankHemm(EvPSalesEMEA&lAtAM),AndyMolnar (EvP Sales north America). the position of EvPSalesAsiaPacifichasyettobenominatedandwillbefilledbytheCEoadinterim.

Followingthereorganizationannouncement,FranzMaier,ExecutivevicePresidentofGlobalSales, leftthecompanyatyear-end.

BEAT SPALINGER Swiss (born 1958), President & CEO

BeatSpalingerholdsaMastersinEconomicsandBusinessAdministrationfromHwvinZurich,andisanalumnusoftheAdvancedManagementProgramatHarvardUniversitynear Boston. From 1986 to 1999, Mr Spalinger worked for


KPMGZurich,aleadingproviderofaudit,taxandadvisoryservices in Switzerland. In 1993, he became a Partner ofKPMGanddirectedtheCorporateFinanceDepartment.Heleftin1999tobecomeCFoofFlughafenZrichAG(Unique),theoperatingcompanyofZurichInternationalAirport.Inthe course of his nine-year tenure at Unique, he oversawtheAccounting,Controlling,treasury,AirportChargesandlegal Departments as well as risk Management and Cor-porateSupplyManagement.HewasManagingDirectorforallinternationalprojects,includingthefinancingandcon-structionofnewairportsinAsiaandlatinAmerica.

MrSpalingerjoinedStraumanninSeptember2008asCFoandwasappointedPresident&CEoinMarch2010.HeisaMemberoftheBoardofDirectorsandoftheBoardoftrust-ees of the independent academic network InternationalteamforImplantology(ItI).

THOMAS DRESSENDRFERGerman (born 1958), Chief Financial Officer

thomasDressendrferhasawideculturalbackgroundandbroad international professional experience. After forma-tiveyearsabroad,hestudied inGermany,gainingaMas-ters in Business Administration and Economics from theUniversityofErlangen-nrnberg.

Hiscareerinfinanceprogressedtoseniorpositionsinclud-ingtheroleofCFoofmajorbusinessunits/regionsininter-national companies, such as randstad, the nielsen Com-pany, Procter & Gamble, and Baumller. His career hasthus taken him through the Healthcare and ConsumerProductsindustries,aswellasthePersonnelServices,Mar-ket Intelligence, and Mechanical Engineering sectors invariouscountries.HejoinedStraumanninnovember2011fromUstertechnologiesltd,wherehewasChiefFinancialofficerandaMemberoftheExecutiveCommitteeforthreeyears.Usteristheleadingmanufacturerofhigh-technolo-gytestingandmonitoringsystemsforthetextileindustry.

FRANZ MAIERGerman (born 1965), Executive Vice President Sales (until 31 December 2011)

FranzMaierholdsaMasterofScienceinBusinessAdminis-tration from Passau University in Germany. Mr Maierworked for the wella Group for 14 years, which was ac-quired by Procter & Gamble in 2003. He held managerialpositions of increasing responsibility in Product Manage-ment,StrategicManagementandSales.Hespenttwoyearsas Marketing Director of wella France, was ManagingDirectorofP&GProfessionalCare in Italyforthreeyears,Corporate Senior vice President and regional Manager ofProfessionalCareinGermany,andHeadofGlobalDistributoroperationsProfessionalCareatthecompanysinternationalheadquartersinGeneva.

Franz Maier joined Straumann in June 2007 as Head ofSales.Havinghelpedleadthereorganizationproject,hede-cided to pursue his career outside Straumann and relin-quishedhisExecutiveresponsibilitieson31December2011.

FRANK HEMM Swiss (born 1970), Executive Vice President EmEa, LaTam

FrankHemmholdsaMastersdegreeinEconomicsfromtheUniversityofSt.GallenandaMastersinBusinessAdmin-istrationfromKelloggGraduateSchoolofManagementintheUS.Hisbusinesscareerbeganinmanagementconsult-ingwithAndersenConsultingandMcKinsey,focusingonbusinessprocessre-engineeringandstrategicmanagementconsulting.

HejoinedStraumannin2004andwasinitiallyresponsiblefor Corporate Business Development & licensing. He wasappointed Head of Sales, western Europe in 2007 and be-came a member of the Corporate Management Group. Ayear later,hewasgivenresponsibility for theAsiaPacificregionasHeadofSalesbasedinSingapore,wherehees-


tablished and built up Straumanns regional headquarters.InadditiontoleadingtheintegrationandturnaroundoftheacquireddistributorsinJapanandKorea,healsoexpandedStraumannspresenceinChina.

MrHemmwasappointedtohiscurrentpositionatthebe-ginningof2012.

DR SANDRO MATTER Swiss (born 1964), Executive Vice President business Unit Prosthetics

SandroMattercompletedaprofessionalapprenticeshipatCiba-Geigy, followed by the Swiss Federal Matura. AfterearningaMastersdegree inorganicChemistryfromtheSwissFederalInstituteoftechnologyinZurich,hegainedaPhD in Materials Science from the same institution. HisbusinesscareerbeganatSynthes-Stratec,wherehewas

Beat Spalinger dr Sandro matter

andy molnar dr ren Willi

EXECUTIVE maNaGEmENT bOaRD


responsible for biomaterials product management anddevelopmentfrom1997to2002.Hewasalsoaco-founderofKurostherapeutics.DrMatterisamemberoftheIndus-trialAdvisoryBoard(IAB)fortheDepartmentofMechanical&ProcessEngineering(DMAvt)oftheEtHZurich.

HejoinedStraumannin2002asHeadoftheBiologicsandresearchDivisionandheadedtheProductsDivisionfrom2005 through 2011. He was appointed to his current posi-tionatthebeginningof2012.

ANDY MOLNARbritish (born 1962), Executive Vice President North america

Andy Molnar has a proven track record in the dental andhealthcare industries having held senior managerial rolesin global business sales and country management. Underhis leadershipasGeneralManagerofStraumannUKfrom20062009,thecompanyrosetonationalmarketleadershipin implant dentistry. In 2009, Mr Molnar moved to GroupheadquartersasSeniorvicePresidentGlobalregenerativeSalesandMemberoftheCorporateManagementGroup.Inthis position, he successfully orchestrated and supervisedkey product launches, in addition to driving significantgrowthinglobalsalesoforaltissueregenerationproducts.

He joined Straumann in 2005 from SIDHIl, a UK medicalequipment company, where he was Sales and MarketingDirector.However,thebulkofhiscareerelevenyearswasspentinsalesandmanagementrolesatGlaxoSmithKlinePharmaceuticals.

Andy Molnar holds a Bachelor of Science degree fromreading University, in Physiology and Biochemistry, andanMBAfromBradfordUniversity.Hewasappointedtohiscurrentpositionatthebeginningof2012.

DR REN WILLI Swiss (born 1967), Executive Vice President business Unit Surgical

ren willi acquired much of his professional experienceworkinginandforthemedicaldeviceindustry.HiscareerbeganinengineeringandsalesatEMSInventaandthenvonrollInnovaandincludedinternationalassignmentsinChinaandEurope.HethenspenttwoandahalfyearsatMcKinsey&Company as a management consultant focus-ingoninternationalmandatesinthepharmaceuticalandmedical-deviceindustries.In2003,hemovedtoMedtronicto take on responsibilities in International Product Man-agementandMarketingintheCardiovascularSector.

thomas dressendrfer

frank hemm


HejoinedStraumannin2005asHeadoftheSurgicalBusi-nessUnit.From2008to2010,healsoheadedStraumann'sregenerativeFranchiseandwasamemberoftheCorpo-rateManagementGroup.

DrwilliholdsaMastersdegreeinChemicalEngineering,aPhDintechnicalSciencesandapostgraduatedegreeinIndustrial Engineering and Management, all completedattheSwissFederalInstituteoftechnologyinZurich.HeisalsoanalumnusoftheMedtronicMarketingleaderPro-gramatthewhartonSchool(UniversityofPennsylvania).Drwilliwasappointedtohiscurrentpositionat thebe-ginningof2012.

CORPORATE MANAGEMENT GROUP 2011the EMB is supported by the Corporate ManagementGroup(CMG),whichservesasadiscussion,soundingandalignmentboardfortheEMB.on31December2011, theCMG comprised 17 members: the Sales Heads of: CentralEurope,westernEurope, Iberia,nordics,Benelux,APAC,Japan,China,CArESDigitalSolutions,andregenerative;theHeadsof:GlobalMarketing,BusinessUnitSurgical,Projects&PortfolioPlanning,Globaloperations,CorporateHumanresources, Corporate Business Development & licensing,andtheGeneralCounsel.

ChANgeS IN 2012Aspartofthecompanysreorganization,theCMGwasre-definedatthebeginningof2012andexpandedslightlyto21membersincluding:theSalesHeadsofCentralEurope,westernEurope, Iberia, Japan,ChinaandnorthAmerica;theHeadsofGlobalDistributorSales,regenerative,ClinicProsthetics, lab Prosthetics, and Intra-oral Scanners; theMarketManagersofSurgicalandProsthetics,theHeadsofCommunication&MarketingServices,Project&PortfolioPlanning, Product Management Surgical, Global opera-tions,CorporateHumanresources,CorporateBusinessDe-velopment&licensing,CorporateAccounting,Planning&reporting,andtheGeneralCounsel.

Almost all of the new positions in the CMG were filledthrough internal promotions. the appointment and termofofficeofCMGmembersisdecidedbytheEMB.

SUPERVISORY/CONSULTING/POLITICAL FUNCTIONS Beat Spalinger is a Member of the Board of Directors andBoardoftrusteesoftheindependentacademicnetworkIn-ternational team for Implantology (ItI). Straumann sup-ports the ItI with payments under a collaboration agree-ment (see note 28 of the Audited Consolidated FinancialStatementsonp.199fordetailsofpaymentsin2011).

SandroMatterisamemberoftheIndustrialAdvisoryBoardfortheDepartmentofMechanical&ProcessEngineeringoftheEtHZurich.Apartfromthesetwocases,noneoftheEx-ecutiveManagementBoard: Performedanyactivitiesingoverningorsupervisory

bodiesofsignificantforeignordomesticorganizations,institutionsorfoundationsunderprivateorpubliclaw

Heldanypermanentmanagementorconsultancyfunc-tionforsignificantdomesticorforeigninterestgroups

Heldanyofficialfunctionorpoliticalpost.

MANAGEMENT CONTRACTS the Board of Directors and the Executive ManagementBoard run the business directly. they have not delegatedany managerial powers to persons or companies outsideStraumann.

INTERNaL maNaGEmENT DEVELOPmENT StraumanncontinuedtheStrategicManagementDevelop-mentSystem(SMD)programinitiatedin2008toassess,de-velop and deploy key people. the Groups goal is to fill atleast50%ofkeymanagementpositionswithinternalcan-didates.withtheexceptionoftheCFoandthevacantposi-tionofHeadofSalesAsia/Pacific,alloftheExecutiveMan-agementpositionshavebeenfilledwithinternalcandidates.For further information on the Companys SMD program,seep.66.


COmPENSaTION, SHaREHOLDINGS aND LOaNSthecompensationandequityholdingsaswellasthebasicprinciplesandelementsoftheprogramsdeterminingthecompensationandequityholdingsoftheMembersoftheBoard of Directors and the Executive Management BoardandtheirrelatedpartiesaredisclosedintheCompensationreport on pp. 126129 and also in the audited FinancialStatementsonpp.217218.

CHaNGES IN CONTROL aND DEFENSE mEaSURES the Articles of Association of Straumann Holding AG donot contain provisions for opting out or opting up. thereare no provisions for changes in control regarding Mem-bersoftheBoardofDirectors,theExecutiveManagementBoard,orotherManagementstaff.Furthermore,thereareno change-of-control clauses included in agreements andschemes benefiting members of the Board of Directorsand/ortheExecutiveManagementBoardorotherManage-mentstaff.

aUDITORS theShareholdersGeneralMeetingelectsandappointstheGroups external auditors on an annual basis. In March2011, PricewaterhouseCoopers AG (PwC), Basel, was re-elected for a seventh consecutive year as the auditor ofStraumannHoldingAG.theauditorinchargewasthomasBrderlin, Swiss Certified Public Accountant, who tookoverthemandatein2005.

the Board of Directors supervises the external auditorsthroughtheAuditCommittee,whichmetsixtimesin2011.the external auditors participated in two of these meet-ings,discussingthereportsonthe2011AuditPlanandtheHalf-Yearreview.

theworldwidefeespaidtotheauditorsPwCwereasfollows:

(in CHF 1 000) 2011 2010

Total audit fees 949 1 014

taxconsultancy 1384 1077

legal 115 438

other 486 57

totalnon-auditfees 1985 1572

Total 2 934 2586

INFORmaTION POLICy Straumann is committed to a policy of open, transparentandcontinuousinformation.Inaccordancewiththerulesof the SIX Swiss Exchange, Straumann publishes detailedsales figures on a quarterly basis as well as annual andhalf-yearlyreports.DetailedinformationisprovidedattheShareholdersGeneralMeeting.theagenda,asummaryofthemeetingandtheminutesarepublishedinthecompa-nysjournalsofrecordandonthecompanyswebsite.thesummary isalsodisseminated intheformofamediare-lease. where necessary or appropriate, the company alsopublishes additional information on significant events.theCEo,CFo,HeadofInvestorrelationsandHeadofCor-porateCommunicationareresponsibleforcommunicationwith investors and representatives of the financial com-munity,mediaandotherstakeholders.

Inadditiontopersonalcontacts,discussions,andpresenta-tionsinEurope,northAmerica,andAsia,Straumannheldtwo financial results conferences for the media and ana-lystsin2011,eachattendedbyaround40participants.Bothoftheseconferencesweretransmittedliveviatheinternetandconferencecall.

research analysts from approximately 20 banks/nationalinstitutions cover developments at the Straumann Groupandarelistedonp.232ofthisreportaswellasontheStrau-mannwebsite.


Straumannalsoheldtwoteleconferencepresentationsforthe media and analysts, each attended by approximately80 participants. the presentation slides used for all theseeventsarepublishedonthecompanyswebsiteandrecord-ingsareavailableforalimitedperiod.

Apart from this, Straumann frequently publishes media re-leasesandbriefingdocuments,whicharearchivedandavail-ablefromthecompanyswebsite:www.straumann.com.thecompany offers a media release subscription service via itswebsiteandtakescaretoensurethatinvestor-relevantmediareleases are disseminated broadly and in a timely manneraccording to the rules of the SIX Swiss Exchange and withdueregardfortheprinciplesoffairdisclosure.

thecompanydoesnotupdateitsreleases,reportsandpre-sentations,whichmeansthattheinformationtheycontainisonlyvalidatthetimeofpublication.Straumannadvisesagainstrelyingonpastpublicationsforcurrentinformation.

ANNUAL REPORT/COMPENSATION REPORTStraumannsAnnualreportisamajorinstrumentforcom-municatingwithkeystakeholdergroups.ItispublishedinEnglishandinGermaninhardcopyandelectronicallyonthecompanyswebsite.

StraumannissuesaCompensationreportaspartoftheAn-nualreport.theCompensationreportcanbedownloadedwith the Annual report from the companys website. theprinted version of the Annual report can be ordered [email protected].

In 2011, Straumanns 2010 Annual report received specialrecognitionintheprestigiousHarbourClubBIlAnZawards.It ranked highest in value reporting, second overall, andhighest over five years outranking many of the worldslargest companies. this recognizes and encourages Strau-mannseffortstoprovidestakeholderswithin-depth,trans-parentandaccuratereporting.

MEDIA USED FOR REPORTING PURPOSEStheCompanyswebsiteiswww.straumann.com.the Companys journals of record are SchweizerischesHandelsamtsblatt(SHABSwissofficialGazetteofCom-merce)andtheneueZrcherZeitung.Furtherinformationrequestsshouldbeaddressedtothe: HeadofInvestorrelations:

[email protected].+41619651111

HeadofCorporateCommunication:[email protected].+41619651111

CALENDAR Straumanns calendar of planned reporting dates and in-vestorrelationseventsin2012canbefoundonp.232andisalsopublishedandupdatedonthecompanyswebsite.


intervieW chairman of the Board

HowdoestheBoardencourageentrepreneurismandavoidexcessiverisk?taking excessive risks is gambling. this is not prudentmanagement,norisitentrepreneurial.ourBoardMembersarecomfortablewithrisk.thekeyistounderstandpoten-tial consequences, to be prepared and to have a Plan B.Straumannhasneverlookedatquickwins.theprivilegeofhavinganchorshareholdersallowsustotakea long-termviewandtofocusonsustainablesuccess.

Boardsarevulnerabletodemandsforquickturnaroundandshort-termgainse.g.fromhedgefunds.DoesStraumannsshareholderstructureprotectyoufromthis?weprobablyhavethebestofbothworlds.whilewehavesolid anchor shareholders, we feel pressure from othershareholdersandhavetostrikeabalance.wehaveneverbased our thinking on quarterly results. But it would bewrongtoassumethatouranchorshareholdersarelessde-mandingthanlong-terminstitutionalinvestors.

DoestheDodd-FrankActhaveanyrelevanceforcompanieslikeStraumann?Itisjustoneofmanyinitiativesintheworld.Currently,theMinderinitiativeandSwissParliamentscounter-initiativearethemostrelevantforSwiss-listedcompanies.whetherthey or other regulations will really improve companiesand yield better returns for shareholders remains to beseen.Ibelievethatcommonsense,asolidsetofvaluesandstayinghumblewoulddeliverbetterresults.

Doshareholdershavesufficientsayonpay?Ismedia/publicscrutinywarrantedhere?Shareholdershavesufficientsayprovidedtheycanvoteonthecompensationreport.Ifthelatterisapprovedbyama-jority,thenthepublicandthemediamustrespectthedem-ocraticoutcome.

towhatextentshouldcompensationbedeterminedbyindependentadvisors?Ultimately,compensationisdeterminedbythelabormar-ketandshareholder interests. If it is too low,youlosekeypeople;ifitistoohigh,theshareholderswontapprovethecompensationreport.whilesalarybenchmarkingisgoodpractice, it is less important than values, culture and be-havior.

whatshouldadirectorssalarybebasedon?the level of involvement and time spent are very impor-tant. InSwitzerland,Boardmembersarenowexpectedtosupervise, manage strategically, monitor, coach and sup-portwhich requires a new kind of profile. responsibleBoardworkisnolongeraretirementrole.Itisverydemand-ing,requirestime,passionandcourage,andhastobeprop-erlycompensated.

ShouldDirectorsandManagementberequiredtoholdsharesinthecompany?Yes,allkeypersonnelshouldhaveskininthegame.

whatdoyouseeaskeyBoardissuesinthecomingyears?Industry dynamics are changing, technology is shifting,and regulations are becoming more and more stringent.to cope with all this, companies need a clear vision andskilledpeoplewiththerightvaluestonavigateandimple-mentgoodstrategies.thisisthemostimportanttaskoftheBoardofDirectors

Gilbert achermann Chairman of the board of Directors

tooth replacementSnakeS (SerpenteS)

Snakesdonotchew;theyswallowtheirfoodwhole.Unlikemammals,theirlowerjawsconsistoftwoseparatehalves,whichcanmoveindependently.Somesnakescanopentheir jawssowidethattheycanswallowanimalsthatappearconsiderablylargerthantheirmouths.Snakesusetheirteethtogrip their prey and poisonous snakes inject venom through them. Snakeshaveuptosixrowsofteeth,whichrestlooselyonthejaw.Ifatoothbreaks,itissoonreplacedbyanewone.

Permanenthumanteethremainanchoredinthejawanddonotbreakeasily.Iffractureoccurs,artificialreplacementshavetobeused.themostfrequentcause of tooth loss in people under 40 is decay, while in older people it isperiodontaldisease.Implantsareoftenthemostdurableandestheticsolution.

TOOTH REPLaCEmENT

of the population in devel-oped countries are missing

at least one tooth.

>50percent

Dental implants are firmly anchored in the jawbone and act like natural tooth roots.

key facts and figures 2011

(in CHF million) 20111 2010 Change (%)

Net revenue 694 738 (6)

Operating result before deprecia-tion and amortization (EBITDA)

157 212 (26)

Operating profit (EBIT) 120 164 (27)

Net profit 98 131 (25)

Cash generated from operating activities

140 176 (20)

Capital expenditure 19 22 (12)

Free cash flow 121 154 (21)

Value added (economic profit) 56 88 (39)

1 Before exceptionals

key FigUReS opeRATiNg ANd NeT pRoFiT

operating profit net profit Before exceptionals

1000

900

800

700

600

500

400

300

200

100

0

NeT ReveNUe pRoFiTAbiliTy

ReveNUeS by RegioN

225

200

175

150

125

100

75

50

25

0

return on assets (roa) return on equity (roe) return on capital employed (roce)

50

45

40

35

30

25

20

15

10

5

0

europe 58%

Asia/pacific 15%

Rest of World 5%

North America 22%

(in CHF million)

2007 2008 2009 2010 2011

(in CHF million) Returns on assets, equity and capital employed in %

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

5-year CAgR +3% (+8% in l.c.)

SHARe pRiCe developMeNTCASH FloW ANd iNveSTMeNTS

stMn sMi Msci World Health care equipment & services (cHf) operating cash flow investments

eMployeeS SHARe iNFoRMATioN

2400

2200

2000

1800

1600

1400

1200

1000

800

600

400

200

2007 2008 2009 2010 2011

(in CHF 1000) 2011 2010

Earnings per share (EPS) 4.54 8.37

Ordinary dividend per share 3.751 3.75

Payout ratio 59.402 44.80

Share price at year-end 162.10 214.00

1 payable in 2012 subject to shareholder approval2 Before exceptionals

At 31 december 2011 2010 Change (in %)

Headcount 2 452 2 361 4

120

110

100

90

80

70

60

50

40

225

200

175

150

125

100

75

50

25

0

(in CHF million) (in %)

2007 2008 2009 2010 20112007 2008 2009 2010 2011

iMprintpublished by: institut straumann ag, Basel

concept and realization: eclat, erlenbach/Zurichconsultant on sustainability: sustainserv, Zurich and Boston

photography: Jonathan Heyer, Howard Brundrett independent expert interviews: abbott chrisman, oliver klaffke

print: neidhart + schn ag, Zurich

Basel, 10 february 2012 2012, straumann Holding ag

00_STR_GB2011_Umschlag_Druck_EN.indd 2 01.03.2012 17:29:19

annual report 2011

In the animal kingdom, biting power and thus teeth are often essential for survival. While human life may be less dependent on teeth,

its quality is significantly impaired when dental function is lost. Straumann solutions put the bite back into life and were used to treat almost a million people around the world in 2011. Indeed, biting power

is the key to our success, as this Annual Report shows.

STRAUMANN

Straumann is a global leader in implant and restorative dentistryand oral tissue regeneration. For a brief overview of our company,

our vision and mission, please see pp. 1219.

Bite

34m i l k t e e t h

10b i t i n g p o w e r

20l i f e w i t h o u t t e e t h

114t O O t h R e P l A C e m e N t

86W i S D O m t e e t h

52i N C i S O R S

56C A N i N e S

134FA l S e t e e t h

78m O l A R S

Straumann Holding AGPeter Merian-Weg 124002 BaselSwitzerlandwww.straumann.com

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Documents

2011 Corporate Governance Report