STRAUMANN SIMPLY DOING MORE SIMPLY DOING MORE. Life is too short for all the complications of poorly healing wounds. Annual Report 2005

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1 STRAUMANN Straumann is a global leader in implant dentistry and oral tissue regeneration. For a brief overview of our company, our vision, mission, and core beliefs, please see pages 6 7. Straumann s global headquarters in Basel, Switzerland Life is too short for all the complications of poorly healing wounds. Prof. Samuel Steinemann SIMPLY DOING MORE Annual Report 2005 SIMPLY DOING MORE Simply doing more is the guiding principle we use to position our products and services and to highlight our day-to-day operations in the interest of dental professionals and patients. Having pioneered many of the most influential technologies and techniques in our field, we have a tradition of doing more to advance oral implantology and patient care. As this annual report demonstrates, 2005 was no exception in this respect. ANNUAL REPORT 2005 Straumann Holding AG Peter Merian-Weg Basel Switzerland Front cover: A dental implant depicted as water to convey the natural attraction and hydrophilic properties of Straumann s innovative SLActive implant surface technology.

2 KEY FACTS & FIGURES Concerning forward-looking statements Impressum Group Sales (in CHF million) Operating and net profit (in CHF million) Sales by regions 2% 10 % Europe North America Asia/Pacific Rest of the World 26 % 62 % Cash flow and investments (in CHF million) Sales climb 21% in local currencies and CHF Net profit rises 28% Market position maintained in all regions Important distribution channels acquired Key technologies launched More than 200 new jobs created Key figures Change (in CHF million) (in %) Sales Operating result before depreciation and amortization (EBITDA) Operating profit (EBIT) Net profit Cash generated from operating activities (1) Investments Value added (economic profit) Headcount Change (in %) This report contains certain forward-looking statements, which can be identified by the use of terminology such as scheduled, to plan, will, expected, consider, anticipate, forecast, expectation, believe, or similar wording. Such forward-looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Straumann Group ( Group ) to differ materially from those expressed or implied. These include risks related to the success of and demand for the Group s products, the potential for the Group s products to become obsolete, the Group s ability to defend its intellectual property, the Group s ability to develop and commercialize new products in a timely manner, the dynamic and competitive environment in which the Group operates, the regulatory environment, changes in currency exchange rates, the Group s ability to generate revenues and profitability, the Group s ability to realize expansion projects or projects to establish subsidiaries in a timely manner, and the Group s ability to recruit and retain key employees. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report. Straumann is providing the information in this report as of this date and does not undertake any obligation to update any forward-looking statements contained in it as a result of new information, future events or otherwise. Published by: Institut Straumann AG, Basel Concept & realization: Wirz Corporate AG, Zurich Consultant on sustainability chapter: sustainserv, Zurich & Boston Interviews: Abbott Chrisman, Oliver Klaffke Photography: Oliver Lang, Howard Brundrett Lithography: nc ag, Urdorf Print: Digital Print Zurich AG, Zurich Cash from operating activities Investments Employees at 31 December Operating profit Net profit Trademarks Profitability Emdogain, Straumann Bone Ceramic, Straumann Share price (in %) CARES, SLA, SLActive, Straumann Dental Implant System, Employees 1600 (in %) 250 Return on assets (ROA) Return on equity (ROE) Return on capital employed (ROCE) Straumann TempImplant, synocta, Straumann Membrane are either registered trademarks or trademarks of Straumann Holding AG and/or its affiliated companies Share information Change (in CHF) (in %) Straumann SPI Ordinary dividend paid per share Anniversary dividend 1.55 Share price at year-end Basel, 2 February CHF 2.50 proposed for 2005, payable in 2006 subject to shareholder approval.

3 Straumann Annual Report 2005 CONTENTS CONTENTS 3 Annual Report Key facts & figures 4 SLActive: A quantum leap 6 Straumann in brief 8 Letter to shareholders Markets, products and innovation 14 Markets and regions 22 Products and services 32 Research and development 34 Production and logistics 38 Partnership with the ITI Sustainability 40 Sustainability 42 Dedicated employees 44 Satisfied customers 46 Healthy communities 48 Environmental protection Corporate Governance 54 Corporate Governance 66 Board of Directors 68 Executive Committee Financial Report Management summary 75 Risk assessment 76 Selected financial information 81 Straumann Group 125 Straumann Holding AG Appendix 136 Five-year overview 138 Information for investors 141 Contact addresses 142 Country organizations (addresses) 143 Glossary

4 Straumann Annual Report 2005 A QUANTUM LEAP 4 SLActive: A QUANTUM LEAP We have devoted more research capacity and resources to SLActive than to any other new product simply to improve the standard of patient care and to give dentists the peace of mind that they are delivering the best possible implant with lowest risk of failure. Gilbert Achermann, President and CEO Medical Device Technology of the Year One of the undoubted highlights in implant dentistry in 2005 was the launch of SLActive, an innovative implant surface technology, which not only reduces healing times by half 1 but also considerably lowers the risk of early implant failure in early and immediate loading protocols 2. Backed by more scientific data than any other dental implant surface technology at launch, SLActive has been described as a technological quantum leap 3 and promises to set a new standard in tooth replacement and patient care. These attributes won SLActive the 2005 Medical Device Technology of the Year Award in a poll of independent experts conducted by Frost & Sullivan. Stability with conventional implant (in %) Total stability Stability dip Stability with SLActive (in %) 100 Primary stability (old bone) weeks Secondary stability (new bone) The challenge to eliminate the stability dip When dental implants are placed in the jawbone, their helical thread and rough surface provide them with a mechanical or primary stability. However, as part of the body s bone-repair mechanism, the bone around the implant is initially resorbed and the primary stability of the implant erodes. Subsequently, new replacement bone is formed, which integrates with the implant and gives it long-term secondary stability. But there is a critical period when the latter process is not far enough advanced to compensate for the lost primary stability. This period, between 2 and 4 weeks after placement, is called the stability dip (figure opposite, red line) and is the point at which the implant is at greatest risk of failure Total stability Primary stability (old bone) weeks Secondary stability (new bone) The optimized osseointegration process with SLActive leads to a higher implant stability in the early stage of healing.

5 Straumann Annual Report 2005 A QUANTUM LEAP By reducing healing times by half, to just 3 4 weeks, SLActive effectively minimizes the stability dip (figure opposite, green line) and increases implant stability, especially in the critical early stage of healing 5. The implications of this are shorter treatment protocols, higher predictability, and reduced risk with earlier loading, resulting in better patient care and satisfaction. The enhanced surface properties, activated tissue responses and rapid osseointegration with SLActive show its potential to establish a new gold standard in implant dentistry, acting in the words of Professor Axel Zöllner at the 2005 EAO Meeting in Munich as an evolutionary step towards a revolution in dentistry. Special features in this report Although SLActive is just one of several meaningful innovations introduced by Straumann in 2005, it is arguably the most significant. In this annual report, we have therefore devoted five short features to the product s discovery, development and introduction. Capturing the energy of nature Comments from Prof. Samuel Steinemann, inventor of the SLActive surface. Page Do we need a new surface? Dr Stephen Barter, Specialist in Surgical Dentistry, responds. Page The science is right Prof. David Cochran, leading researcher, talks about an innovative research approach. Page Straumann makes a virtue of necessity Dieter Lipp, Head of Production and Logistics, discusses the production challenge. Page Beagle J. Immediate and early loading clinical case reports with SLActive from the USA. Presentation at the 14th Annual Scientific Meeting of the European Association for Osseointegration, September 2005, Munich, Germany. 2 Zöllner A. First clinical results from the SLActive multicenter study. Presentation at the 14th Annual Scientific Meeting of the European Association for Osseointegration, September 2005, Munich, Germany. 3 Steinemann S. A pioneer in implant surface technology. Starget, 2005; 03: Raghavendra S, Wood M, Taylor T. Early wound healing adjacent to endosseous dental implants: a review of the literature. Submitted. 5 Ferguson S, Broggini N, Wieland M, Rupp F, Geis-Gerstorfer J, Buser D. Biomechanical evaluation of the interfacial strength of a chemically modified SLA titanium surface for dental implantology. Submitted. The sooner the better Susanne Ardos, a dental technician, shares her view as a patient. Page 52 53

6 Straumann Annual Report 2005 STRAUMANN IN BRIEF 6 STRAUMANN IN BRIEF Who we are, what we stand for, and where we are headed. Our company in brief Headquartered in Basel, Switzerland, the Straumann Group is a global leader in implant dentistry and oral tissue regeneration. In collaboration with the International Team for Implantology (ITI), leading clinics, research institutes and universities, the Group researches and develops implants, instruments and tissue regeneration products for use in tooth replacement solutions or to prevent tooth loss. The Group manufactures implant system components and instruments in Switzerland and the US and dental tissue regeneration products in Sweden. Straumann also offers comprehensive training and services to the dental profession worldwide. Altogether, Straumann employs approximately 1340 people worldwide and its products and services are available in more than 60 countries through the Group s 18 distribution subsidiaries and broad network of distribution partners. Our vision Simplicity is our strength We translate complex technology and procedures into userfriendly solutions to improve the standard of patient care. For us, simplicity also means being straightforward in all our relationships, to build trust and respect. Customers are our inspiration We are dedicated to the success of every customer and the well-being of every patient. That is why we always seek to understand the customer s perspective and deliver more than implants. Reliability is our trademark We deliver peace of mind. Our customers and patients rely on us for thoroughly researched, predictable solutions. We never compromise on quality. Achieving more is our future We strive relentlessly to provide better solutions and to create higher value for our stakeholders and employees. We must always believe in our ability to achieve more. To be the partner of choice in implant dentistry and oral tissue regeneration. Our strategy Our mission We are committed to creating success for customers in implant dentistry and tissue regeneration. By simply doing more, we deliver superior solutions that enable dental professionals to provide the best possible care to patients. Our core beliefs Specialization is our soul For more than half a century we have concentrated our scientific expertise and our passion for excellence on researching and delivering superior solutions. Our success comes from a clear strategic focus in implant dentistry. Clear business focus Our strategy is to maintain our focus on implant dentistry and tissue regeneration, where we want to become the provider of choice and thus the market leader. Given the continued attractive growth potential in these two areas we have no intention of diversifying. Our objective is to capitalize on this growth potential by increasing the awareness for our solutions among dental professionals and patients, continuing to introduce product innovations with proven clinical benefits and building unparalleled brand awareness.

7 Straumann Annual Report 2005 STRAUMANN IN BRIEF Direct access to customers An integral part of our strategy is to build closer relationships with our customers by having direct access to them. Our intention therefore is to continue to gain greater control over our distribution channels, wherever possible and appropriate, allowing us to offer superior solutions and service based on closeness to customers. This is illustrated by the recent forward integration initiatives in Italy, Australia, Mexico and Denmark. Innovations with proven benefits We believe that continued product and service innovation, tailored to the different customer segments and skill levels, is key to our future success. Innovations must deliver genuine benefits to patients and customers and an acceptable cost-benefit ratio. The benefits need to be compelling and substantiated by adequate clinical evidence, which in turn is the basis for our proposition of value creation. Selected acquisitions While the market dynamics and our own range of products and services provide potential for continued attractive organic growth, we are constantly evaluating opportunities to acquire technology, products, and services that would complement our portfolio and enable us to bring further meaningful innovations and benefits to customers and patients. Broad geographic focus Our strategic priority is to concentrate on strengthening our presence in the North American market. Apart from this, we are committed to maintaining and solidifying our leading position in Europe, while in the long term integrating distribution in Asia/Pacific. Solid financial base and focus on long-term shareholder value Straumann has a solid financial base and strategic financial flexibility. We have signaled our intention to return excess liquidity to our shareholders in the absence of major strategic undertakings, such as operational expansion or acquisitions. Our history The history of the Straumann Group has three distinct eras and spans more than half a century. It began in the Swiss village of Waldenburg in 1954 with the foundation of a research institute bearing the name of its founder, Dr Ing. Reinhardt Straumann. Between 1954 and 1970 the company specialized in alloys used in timing instruments and in materials testing. Among Straumann s renowned inventions in this period were special alloys that are still used in watch springs today. A breakthrough in the use of non-corroding alloys for treating bone fractures prompted Dr Fritz Straumann to enter the fields of orthopedics and dental implantology, which began the second phase of the company s history. Between 1970 and 1990, Straumann became a leading manufacturer of osteosynthesis implants. A management buy-out of the osteosynthesis division in 1990 led to the creation of Stratec (subsequently Synthes) as a separate company thus marked the beginning of the Straumann Group as it is known today. Thomas Straumann, grandson of the founder, headed the remaining part of the firm, which employed just 25 people focused exclusively on dental implants. In 1998, Straumann Holding AG became a publicly traded company on the Swiss exchange. Through the acquisition of Kuros Therapeutics (2002) and Biora (2003), Straumann entered the promising field of oral tissue regeneration. Another major milestone in the company s history was in 1980 when Straumann established a partnership with the International Team for Implantology forming a symbiosis of research expertise and industrial know-how. The 1980 s also marked the company s geographic expansion, with subsidiaries in Germany (1980) and the US (1989). The following are examples of the groundbreaking achievements that have established Straumann as a leading innovator in implant dentistry: 1974 The one-stage surgical procedure, the rough implant surface, and an implant design that respects biologic width The Morse taper connection, still widely used today SLA, the first macro- and microtextured rough surface, which reduced implant osseointegration time by half SLActive, the first hydrophilic surface, which cuts healing times by half again. 7

8 Straumann Annual Report 2005 LETTER TO SHAREHOLDERS 8 Rudolf Maag, Chairman; Gilbert Achermann, President and CEO. LETTER TO SHAREHOLDERS Dear Shareholder, 2005 has been another successful year for the Straumann Group. We continued to grow strongly with new record levels of sales and earnings, and we brought a number of break-through innovations to customers, improving the standard of patient care. At the same time we initiated and implemented changes to further upgrade our resources, skills and expertise, in order to accelerate innovation, to drive marketing and sales, and to sustain growth. Financials: sales exceed half a billion Swiss francs For the first time our full-year net sales surpassed half a billion Swiss francs, climbing 21% both in local currencies and Swiss francs to CHF 510 million. Our growth was predominantly organic: 5% points were acquisitionrelated, while less than 1% point was due to currency effects. Assuming that the global market grew an estimated 16%, Straumann grew in line with the market. This means that we secured our market share and number-two ranking worldwide, but we still have considerable ground to cover to achieve our goal of becoming the world leader in implant dentistry and oral tissue regeneration. With regard to earnings, both operating and net profit margin levels improved slightly: operating profit reached CHF 156 million (31% margin) and net profit CHF 128 million (25% margin). This is an exceptional achievement in view of the high level of resources that we devoted in various ways to absorb and drive growth. Investing to meet future requirements In 2005, we made significant investments of CHF 121 million to provide for our future capacity and infrastructure needs. These included the relocation/build-up of our Group and North American headquarters in new and larger premises in Basel (Switzerland) and Andover (Massachusetts, USA), respectively. We also made significant progress towards our strategic goal of having direct access to our customers in major markets by the forward integration of certain distribution channels: at the outset of the year we completed the acquisition of BIO srl in Italy; in mid year we transferred the Australian business to our own subsidiary, and towards year-end we had taken significant strides towards establishing Straumann subsidiaries in Mexico and Denmark.

9 Straumann Annual Report 2005 LETTER TO SHAREHOLDERS Shareholder return of 30% despite high capital investment After paying a special dividend in 2004 to celebrate Straumann s 50th anniversary, we have returned to our traditional dividend payout level of around 30%. Total shareholder return in 2005 amounted to 30%, and the current proposed dividend is CHF 2.50 per share 1. The aforementioned high level of investments meant that our cash at the end of the year stood at CHF 94 million. Returning excess liquidity to our shareholders is therefore not foreseen for the moment. Regional performance As the dental implant market leader in Europe, we have focused on defending and expanding our segment share in countries where we lead the field, and we have devoted ourselves to growth in those markets where we have yet to capture the leading position. One factor that weighed heavily on the European market early in the year was the confusion surrounding implementation of partial reimbursement in Germany, the region s largest market. In the second half of the year the situation returned to normal. Apart from this, we successfully completed the seamless integration of our newly acquired subsidiary in Italy. Organizationally, we strengthened our regional management through the appointment of an Executive Vice President Sales Europe, in September, in addition to recruiting a number of experienced senior managers at the country level. Our third region, Asia/Pacific, has traditionally been served through distributors, which makes the July opening of our first regional subsidiary, in Australia, a significant milestone. Our strategic aim is to transition from a distributor to a direct-subsidiary model wherever possible and appropriate. Maintaining our market leadership in this region and developing it in the long term are obviously important goals. To spearhead our efforts in this regard we have appointed an Executive Vice President Sales Asia/Pacific, who has extensive experience in the region. Purpose-driven innovation With regard to our product portfolio, we introduced several meaningful innovations in keeping with our conviction that true innovation must provide a proven clinical benefit for patients or must offer substantial advantages in terms of handling and convenience. There is no better example of this principle than our new implant surface technology SLActive, which we launched in Europe and in parts of Asia in September and will introduce in North America as of March SLActive received the Frost & Sullivan Medical Device Technology of the Year Award in 2005 and has been described as a quantum leap in implant surface technology because it goes beyond surface topography and incorporates surface chemistry. The result is shorter healing times and clinical protocols, as well as increased safety which typifies the Straumann philosophy of delivering peace of mind to our customers and patients. 9 Across the Atlantic, in North America, we also made significant additions to our workforce, increasing our skills and capacity to exploit the growth opportunities this region offers. With numerous changes to master, we were not able to extend our regional market share in line with our expectations although we strengthened our number-two market position. North America continues to be our key regional priority and, with the progress made in 2005, we are convinced that the necessary elements are in place to drive growth momentum in this important market. 1 Subject to approval by the Annual Meeting of the shareholders. Bearing this in mind and in view of the fact that dental surgeons tend to be conservative, we anticipate uptake of the new surface to take at least three years. Consequently, we do not expect to see a positive effect from SLActive on margins prior to In addition to SLActive, we also launched the Straumann Bone Ceramic in North America, ahead of schedule. This is a fully synthetic product that is used for guided bone regeneration (GBR) procedures in patients with insufficient bone to support an implant a condition that is apparent in one in every five patients. In 2006, we plan to roll this new product out in Europe. We plan to introduce the Straumann Membrane in North America towards the end of 2006, assuming that ongoing clinical trials are in line with our expectations and we obtain regulatory clearance from the FDA. Other regions will follow in 2007.

10 Straumann Annual Report 2005 LETTER TO SHAREHOLDERS 10 The third highlight of our launch activities in 2005 was CARES 2 our individualized abutment service using CAD/CAM technology and offering implant prosthetics in titanium and ceramic. CARES, which was nominated for the BEST Practices Innovation Award in Switzerland, complements our comprehensive range of versatile standard abutments and is to be seen as a niche product. However, as dental centres increase their level of computer support, CARES could point the way to new broader service models in the future. It is not our strategic intention to offer custom-made abutments and copings for non- Straumann implants and conventional tooth replacements. Top rankings in leading European surveys In October, the reputed German business publication manager magazin published the Euro 500 survey, an annual performance analysis of the leading, publiclytraded companies in Europe. Straumann ranked twelfth overall and, surprisingly, number one in the healthcare sector. We were also distinguished in a different survey entitled Europe s 500, published in the international magazine BusinessWeek. This survey evaluates the most dynamic medium-sized companies across Europe according to growth and job creation over four years. In the 2005 study we were the highest ranked Swiss company. Developing people and building skills One of the key challenges that comes with continued strong growth is transitioning from a small-sized company to a truly multinational organization without losing elements that have been instrumental in our past success, such as speed of decision-making and responsiveness to market needs. We therefore devoted considerable effort to adjusting our organizational structure, bringing in experienced new talent across all functions and at various levels. At the same time, we were conscious of the importance of preserving and developing our existing expertise and know-how. To strike the balance between developing internal talent and hiring from outside, we have created a new function in Human Resources to support management assessments and the development of high-potential members of staff. Our intention is to leverage Straumann as one of the most attractive employers in the medical device sector. It goes without saying that constant change constitutes a tremendous challenge for all our employees, who deserve much credit and recognition for the flexibility they have shown and for their readiness to take on even bigger projects and tougher market challenges. We would like to express our sincere thanks to all of them around the world for their many valuable contributions and achievements in Sustainability Good corporate citizenship, social responsibility and corporate governance continue to dominate boardroom discussions and public debate on industry. While we endorse these concepts, we also believe that establishing committees, mechanisms and checks is not sufficient for addressing the root cause of shortcomings and failures. What ultimately counts is the integrity, honesty and commitment of the people working for an organization. Creating an environment and culture that nurtures and reinforces these core values is of utmost importance. To this end, we began work on a project to ensure that all our employees, long-standing or new, are aligned with our corporate culture. In addition, the Board of Directors commissioned a Code of Conduct that formalizes our commitment to ethical and responsible business conduct, including environmental protection. This code will be implemented throughout our organization in To be sustainable we believe that we need to fulfill our responsibilities to customers and their patients by aligning our business practices with the highest standards of good medical practice. This is where the strategic collaboration with our academic partner, the International Team for Implantology (ITI), is particularly valuable. As a leading authority in implant dentistry, the ITI issues treatment guidelines and ensures both clinical excellence and highcaliber training. The corporate responsibilities of a global company extend beyond its duties to shareholders, customers and staff, to include special groups in the community for which the company can make a clear difference. In this respect, we extended our initiatives to help socially and economically disadvantaged patient groups in different parts of the world. 2 CARES: Computer-Aided Restoration Service

11 Straumann Annual Report 2005 LETTER TO SHAREHOLDERS Our continued efforts towards sustainable development have not gone unnoticed and in 2005 we were very proud to be included in the FTSE4Good stock index for companies that meet high standards of corporate responsibility. Market trends and further discussion of strategy Looking at the years ahead, we are convinced that Straumann will be able to continue to grow. This conviction is based on the superiority of dental implant solutions and their potential to supersede conventional tooth replacement treatments. It is estimated that the market will grow annually in the region of 15% over the coming years. In the foreseeable continued absence of reimbursement, implant dentistry and dental tissue regeneration depend on disposable income and are thus linked to consumer confidence and general economic conditions and cycles. We expect this correlation to be even closer as the penetration level of implant treatments rises and treatment providers are forced to address less affluent patient groups. No disruptive technologies such as replacement teeth cultured from stem cells are emerging that would considerably change the fundamental market dynamics. This means that the most important challenge facing the industry is assuring treatment quality through proper training and education, and proven products. A rise in the rate of failures would certainly not be in the interest of patients, clinicians or manufacturers. Outlook In 2006, barring unforeseen circumstances, we anticipate continued growth, slightly above the market, coupled with stable profitability margins, comparable with Taking into account the significant step-up in fixed costs over the past few years, the higher depreciation charges, the costs of launching multiple innovative products and services with initially lower contribution margins, and the costs of integrating newly-secured distribution channels, we consider this to be an ambitious goal for At Straumann we will devote ourselves to providing clinically proven innovative products that deliver peace of mind and ease-of-use to surgeons, dentists, technicians and other dental professionals. We will strive to deliver a superior service on every occasion by simply doing more for our customers and their patients. Basel, 2 February 2006 Rudolf Maag Chairman Gilbert Achermann President and Chief Executive Officer 11 We believe that the continuity of our strategy, which is summarized on page 6, addresses these and other foreseeable developments and will help us achieve our vision and mission. We strongly believe that continued adherence to our guiding principle simply doing more has become more important than ever before.

12 Life is too short for all the complications of poorly healing wounds. Prof. Samuel Steinemann

13 SLActive: A quantum leap Capturing the energy of nature In the past ten years Straumann has twice set new standards in dental implant technology by dramatically reducing implant healing times. In 1998, the SLA surface cut healing time by half to 6 8 weeks. SLActive has now halved it further to 3 4 weeks. Life is too short for all the complications of poorly healing wounds, says Prof. Samuel Steinemann, inventor of the two innovative surfaces. Although SLA was a major advance, the search for an even greater improvement continued. The aim was to get the body to accept titanium implants substantially faster, and the answer is SLActive. Like SLA, the new surface is roughened by sand blasting and acid etching to produce the macro and microstructures that are ideal for bone cells to attach themselves to. In SLActive, Straumann has further developed this surface in the nano region at the chemical molecular level so that the bone integrates with the implant even faster. Etching is followed by a process that preserves the natural chemical activity of the titanium surface, which makes it hydrophilic. As a result, it has a strong natural attraction for blood and proteins, which rapidly penetrate into its micropores. Within a short space of time, bone formation begins and quickly gives the implant its ultimate stability. Personally, I think that this is about as fast as osseointegration will get, because nature cannot work any faster, concludes Samuel Steinemann.

14 Straumann Annual Report 2005 MARKETS AND REGIONS 14 MARKETS AND REGIONS An integral part of our strategy is to build closer relationships with our customers by having direct access to them. An attractive growth market The global market for implant-borne tooth replacement was valued at approximately CHF 2.1 billion in 2005 and is thought to be growing at about 16% per annum. According to analyses published by independent marketresearch groups and financial institutions, growth was thought to have accelerated going into 2005, although momentum decreased somewhat during the year. The market is dominated by a small number of major players, with the top five companies estimated to account for around 85% of the total market. At the same time, numerous minor and small suppliers around the world are trying to make in-roads into this high-potential sector, often without the backing of clinical documentation or a broad, in-depth service. In spite of the growing competition, Straumann succeeded in maintaining or improving its market position in most markets during the year, confirming our conviction that innovation, quality and service are important differentiators in the effort to contend successfully with newcomers entering the market. The variety of distribution models, business portfolios, specialization and disclosure levels within the sector makes it somewhat difficult to gauge individual market share and growth accurately. By our own estimates, we continue to be the number-one player in Europe and Asia/Pacific, and the number-two in North America. 1 Heydecke G, Thomason J, Lund J, Feine J. The impact of conventional and implant-supported prostheses on social and sexual activities in edentulous adults: Results from a randomized trial 2 months after treatment. J Dent Res 2005; 33(8): Epidemiology of Periodontal Diseases. American Academy of Periodontology report, J Periodontol 2005; 76: Superior treatment solutions Implant dentistry is predominantly a substitution market, and market penetration is still remarkably low, with only an estimated one in 10 of all tooth replacements being implant based. The main driver for market growth thus remains the increasing acceptance of implants due to the following advantages over conventional tooth replacement: with implants it is no longer necessary to grind down healthy teeth to support a crown and bridge; implants help to prevent jawbone shrinkage; the esthetic success and survival rates of implants are very high and long-term overall costs are lower; furthermore, implants have been shown in clinical studies to improve the quality of life 1. The most common cause of tooth loss is not accidents but periodontal disease, which affects the majority of adults. In fact, 5 20% of any population suffer from severe forms of the disease 2. This differentiates implant dentistry from the trauma-driven medical device industry, and partially explains why implant-based restorations are generally not reimbursed by insurance schemes, despite their proven benefits. The increasing demand for long-term esthetics and value for money The success of implants has increased the expectations of patients and practitioners. Consequently, patients expectations have moved beyond impeccable function to include lasting esthetic quality, fast and painless replacement procedures, and good value for money. However, in the discussion of treatment prices, it is often overlooked that implant components account for only about 15 20% of overall treatment costs and patients are often unaware of the long-term cost benefits.

15 Straumann Annual Report 2005 MARKETS AND REGIONS Outlook Two predominant market models 15 Besides the growing acceptance of implant dentistry, the aging population, increasing wealth, growing awareness and rising number of trained dentists serve as further growth drivers for the dental implant and tissue regeneration market. Over the next few years, we expect the market to generate growth of around 15%. Straumann s goal is to continue to grow above this by virtue of innovation and our service model. A strong global presence Straumann products are sold in over 60 countries through 18 sales and marketing subsidiaries and a broad network of distributors. In 2005, Europe accounted for 62% of global sales, while North America contributed slightly more than a quarter. The majority of the remainder was generated in the Asia/Pacific region. Sales by region Europe North America Asia/Pacific Rest of the World 26 % 10 % 2% 62 % The global implant dentistry market can be generally categorized according to two models: the referral system, in which implants are predominantly placed by specialists or oral surgeons. In this instance the referring doctor or generalist completes the prosthetic restoration. By contrast, in the non-referral model both procedures are more commonly performed by the same doctor. In countries where referrals are less common, Straumann offers a surgical support service to ensure that practitioners get off to a successful start in implant techniques. Elsewhere, in places where the referral model predominates, our marketing efforts are geared towards building and supporting the corresponding referral networks. The aim is to connect dentists who are starting out in implant prosthetics with experienced surgeons who can offer effective support during diagnosis, treatment-planning and prosthetic restoration. In addition, we provide local support through medical product specialists and regional training courses tailored for all levels, particularly the less experienced, helping to ensure that first cases are successful and result in patient satisfaction. Europe Straumann s European sales rose 20% in local currencies in 2005, bringing regional sales to CHF 316 million. Despite the impact of confusion surrounding the implementation of healthcare reforms, Germany still generated the highest level of revenues and continues to be our largest single market in Europe, followed by Italy, Spain and Switzerland.

16 Straumann Annual Report 2005 MARKETS AND REGIONS 16 Executive interview Focus market: Germany Wolfgang Becker, Executive Vice President Sales Europe What distinguishes Germany from other markets? Germany is Straumann s biggest single market and is based on the referral model, in which the referring dentist and a team approach play an important role. The standard of healthcare is high and will rise, since further training to ensure quality and safety is now mandatory for doctors. The new fixed subsidy system, which includes implant restorations in the public health insurance scheme, is unique to Germany. We gained further influence over our distribution channels and closer proximity to customers through the acquisition of our former Italian distributor BIO srl, which was successfully integrated in The retention of management, staff, networks and sales forces ensured seamless continuity of the business and service to customers and their patients. Including the staff acquired, we increased the number of our employees in Europe in 2005 by approximately 20% to We also announced the acquisition of the Danish distributor DenTech, which became effective at the beginning of In terms of the two different market models, countries such as Germany, the Netherlands, and Sweden are characterized by the referral system, whereas Italy, Spain, France and others are predominantly non-referral. Why did the healthcare reforms have such an impact in 2005? Reimbursement changed completely and implementation was very problematic. As a result, some dental businesses saw their sales drop 40% in the first quarter. By mid-year things had returned to normal. What does this mean for the patient? Implants now qualify for the same subsidy as conventional crown and bridge treatment, so patients can opt for a superior implant solution without forfeiting reimbursement. The subsidy level depends on the clinical diagnosis. Will this change the market dynamics completely? No. The new system will have a positive effect in the long-term, but there is still a lot to do in terms of training dentists and increasing patient awareness. With this in mind, we launched a new service program under the banner of More than implants, intended to create exceptional value for customers and increase patient care and satisfaction. Florido tower in Vienna, the new address of our Austrian country organization since November, 2005.

17 Straumann Annual Report 2005 MARKETS AND REGIONS National differences are also apparent with regard to the frequency of implant-based procedures. Treatment with implants is for example ten times more common in Switzerland than in the UK. The reasons for the disparity lie in the various healthcare systems, the extent of subsidization and reimbursement and factors such as average income, oral hygiene, and the number of dental professionals offering implants and tissue restoration. As we recently experienced with reimbursement changes in Germany and Sweden, developments in key European markets can have considerable bearing on future growth. 17 Being the implant market leader in Europe has opened up further opportunities for us in the regenerative area. In 2005, Emdogain enabled us to establish Straumann as a strong reliable partner in the field of periodontal tissue regeneration, while market acceptance tests conducted with Straumann Bone Ceramic confirmed the synergistic potential of implants and regenerative products. During the year, we launched numerous line extensions to the Straumann Dental Implant System in Europe. In addition, our individualized prosthetic service for abutments and copings, Straumann CARES, was successfully introduced in the German-speaking markets. Straumann also launched SLActive in Europe in September, where it has been very well received. Outlook (Europe) Although market penetration rates measured in the annual number of treated patients are higher in Europe than elsewhere, we expect solid market growth over the next few years. This confidence is based on the potential for implants to substitute conventional treatment methods. North America In North America, the market for dental implants continues to grow strongly due on the one hand to increased awareness and on the other to the broader inclusion of implantology in dental school curricula, the media and dental meetings. As a result, more and more dentists are placing and restoring implants. Our new North American Headquarters in Andover, which became operational in May, On the patient side, demand has continued to rise, driven by the wealthier aging population and the increase in attention devoted to teeth in the context of personal esthetics. These factors contributed to a considerable increase in new customers in As a result, our North American business again generated strong growth, with sales rising 19% in local currencies to CHF 131 million. In mid-year, our North American headquarters moved to Andover, close to Boston, Massachusetts. The new building was equipped with world-class manufacturing and training facilities and, after a short time, the first commercial products were manufactured to the same FDA and ISO precision standards as products made in Villeret. In 2005, our North American sales organization continued to increase significantly, with all our employees participating in a comprehensive training program to ensure a high level of product knowledge and an improved level of service. Overall we employed 276 people in North America at year-end.

18 Straumann Annual Report 2005 MARKETS AND REGIONS 18 We also expanded our product range with numerous line extensions for the Straumann Dental Implant System, and our regenerative portfolio was bolstered by the first introduction of the Straumann Bone Ceramic. In addition, numerous service packages for various customer franchises were introduced during the year. We also continued to achieve above-average growth elsewhere, for instance in Taiwan, New Zealand, China, Indonesia, Thailand, and Malaysia. Although still small in relation to the region as a whole, the sales contribution of these countries will become increasingly important in the next few years. Outlook (North America) We are looking forward to the North American launches in 2006 of SLActive, and Straumann CARES. Market growth continues to be favorable considering the substitution potential, low penetration level and particularly interesting referral market. For Straumann, the North American market continues to be the main regional priority given its future potential and level of past investment and operational efforts. Outlook (Asia/Pacific) We will continue to tap into the long-term growth potential of this region through new and existing distribution models. For instance, Straumann will start business activities in Vietnam at the beginning of In addition, our ambition is to gain direct access to customers in selected markets in the medium term, carefully respecting long-term business relationships to ensure continued customer loyalty, service and support. Asia/Pacific In the Asia/Pacific region, sales grew 26% to CHF 51 million, fortifying our position. As this region is served predominantly through distributors, the reported sales represent Straumann s portion only. On the basis of end-market sales we estimate that Straumann is the leading brand in the Asia/Pacific market for implant dentistry and oral tissue regeneration. In view of the growing importance of the Asian markets, the ITI will hold its first ever Asian ITI congress in Shanghai in In the region s largest single market, Japan, sales continued to grow and Straumann products extended their market leadership. Marketing clearance for SLActive has not yet been granted in Japan, because the regulatory authorities do not consider the substantial equivalency principle to apply. As a result, Straumann is working towards obtaining approval in Spring In South Korea, the second largest market in the region, we began operating directly with the local distributor, which has enhanced closeness to customers in this very important Asian market. We opened our first subsidiary in the Asia/Pacific region, in Australia, in mid-year and succeeded in hiring the majority of the Straumann-business team from the former distributor, making for a smooth transition and boosting performance above expectations. Thus, Australian sales grew impressively in 2005 despite the changeover.

19 Straumann Annual Report 2005 MARKETS AND REGIONS Independent expert opinion* Trends in Implantology 19 Prof. Steven Eckert, DDS, MS, Associate Professor of Dentistry, Mayo Medical School, Mayo Clinic, Rochester, Minnesota, USA. What has brought implant dentistry to where it is today? In the 1970s the recognition of osseointegration changed implant dentistry from a cottage industry to a field where a well documented treatment protocol could be followed to achieve safe and predictable results. Earlier implants didn t create a very rigid barrier towards bacteria and underwent gradual failure. Osseointegration is a direct bonding of bone to implant with gaps much smaller than bacteria. complications from changes in the gum tissue. The mechanical issues of keeping the parts tight over long time periods also needs attention. Things are definitely better now than in the past but new advances are always welcome. What issues are raised by the growing need to put replacement restorations on older implants? The biggest problem with the implant is its biggest asset: it lasts forever in contrast to restorations. If you have to remove an implant because you can t get parts to restore it, you make a bigger hole in the bone. A couple of years ago there were 60 different manufacturers with over 200 general designs of implants, but the industry is reluctant to have interchangeable parts. This is a huge issue for implant dentistry at large. How do you see it developing over the next 5 years? It is constantly in a state of refinement. Parts of the industry are working aggressively towards loading implants very soon after placement. In 5 years we will probably have a better definition of how and when that can be done, still there are a number of questions. What predictors do we have? Can we use a regular dental x-ray to measure bone density, or is a CAT scan needed? We know that some immediatelyloaded implants work fine, but we don t know where the limits lie. Will the materials for implants change? While the choice of titanium has remained pretty static over the years, research in the materials field is ongoing. Today the emphasis is on creating a favorable oxide layer on the titanium surface, which will recruit more cells to the implant and promote rapid osseointegration. Do you expect other developments in materials? We see material failure in the form of porcelain fracture in implantsupported restorations because the implant has very little relative mobility within bone. A brittle material like porcelain may have a higher fracture rate on an implant than on a natural tooth, which can absorb some shock. The use of zirconium and aluminum oxides for restoration ceramics is growing because their physical properties tend to be better. What hardware problems need solutions? If the gum recedes and exposes the metal of an implant, it becomes esthetically compromised. One issue is, therefore, connecting a restoration to an implant in such a way that there aren t long-term What challenges will training programs face? Implant training courses seem to be continuously growing. The problem is the appearance of predictability. More and more people start to place implants with less and less experience. We don t know what the learning curve is whether it takes 50 or 100 or 1000 to get over the hump, and few people ever discuss this concern. Can science and industry grow together without merging? The risk of partnering between science and industry is that the relationship gets so close that science begins to think of itself as a sharing partner rather than an investigating partner. There needs to be an arm s length separation. Through experience, we are developing forms of contracts that protect both proprietary and scientific interests. Are implants the final frontier in tooth replacement? In the not-too-distant future we will be able to grow true biologic substitutes for missing teeth. We have identified the genes responsible for tooth generation. Now it is a matter of discovering how to put the right cells in the right spot, get the gene to stimulate them and make them grow. I believe it will happen. The real issue, though, is that patients lose teeth for a reason. Tooth decay and periodontal disease are still the two main reasons why people lose teeth. Even when we can generate a third set of teeth, if patients haven t found the capacity to maintain the first two sets, they will lose their third set also. *These personal opinions may not reflect the views of Straumann.

20 SLActive helps to fulfill a desire that patients have for faster tooth replacement procedures. Dr Stephen Barter

21 SLActive: A quantum leap Do we need a new surface? SLActive meets a significant medical need in that it minimizes the temporary dip in stability at a critical time after implant placement, when complications are most likely to occur. SLActive helps to fulfill a desire that patients have for faster tooth replacement procedures, explains Dr Stephen Barter, Specialist in Surgical Dentistry and Chairman of the UK section of the International Team for Implantology. But more than that, the new surface opens up possibilities for treating more patients with critical indications. Numerous studies have demonstrated that SLActive shortens the critical healing phase and that there is a significant increase in overall stability in the first three weeks of healing. The critical period during which the implant is sensitive to loading is shorter. The benefit for the patient is that there is less risk of early loading leading to complications, which can happen if, for instance, the patient has a removable prosthesis and insists on wearing it again as soon as possible after surgery, explains Dr Barter, whose practice is on the south coast of England. SLActive also opens the door to treating critical indications that were previously extremely difficult to treat. These include edentulous patients who need bone augmentation together with implants. SLActive may also offer new hope to patients in whom previous implants failed owing to complications.

22 Straumann Annual Report 2005 PRODUCTS AND SERVICES 22 PRODUCTS AND SERVICES We translate complex technology and procedures into user-friendly solutions to improve the standard of patient care. A focused portfolio covering a broad range of indications Straumann is the only leading company in its industry that specializes specifically in dental implants and related products for oral tissue regeneration. Our product range includes surgical implants and prosthetic components (abutments) that connect the implant with the visible crown of the replacement tooth. These are complemented by a range of matching precision instruments and handling components. Every item in Straumann s Dental Implant System is crafted to the highest quality standards, ensuring long-term safety and reliability. Complementing our dental implant system, we manufacture products that are used in oral tissue regeneration either to support implant procedures or to help preserve teeth after treatment for periodontal disease. Copings (e.g. gold, titanium, plastic) Membrane Bone Ceramic Individualized abutments (e.g. CARES Ceramic/Titanium) Abutments (e.g. synocta screw-retained abutment) Implants (e.g. Standard Plus) Simplicity in innovation One of the outstanding features of the Straumann Dental Implant System is its simplicity. We translate complex technology and procedures into user-friendly solutions, striving to make life easy for our customers by keeping the number of components and procedures to a minimum. At the same time, we offer maximum versatility to treat any indication and achieve predictable outcomes. We do not believe that the volume of novelties produced is a measure of success. On the contrary, we concentrate on a focused number of purpose-driven innovations that open up new treatment possibilities, add simplicity and improve the standard of care, all in the patient s long-term interest. This focus has enabled us to channel more resources into developing and introducing select products more thoroughly. In 2005, we remained consistent to this policy of purpose-driven innovation in which quality clearly takes priority over quantity. Emdogain Simplified illustrations summarizing Straumann s Dental Implant System and regenerative product ranges.

23 Straumann Annual Report 2005 PRODUCTS AND SERVICES As treatment with dental implants becomes more widespread and frequent, the criteria for patient selection are expected to slacken and the number of difficult cases being treated will grow. It is expected that the number of less experienced practitioners placing implants will rise, and that patients will seek even faster procedures. These trends underline the increased need for tested, reliable, rapid systems that are even easier to use and which achieve predictable optimal results. One system 23 Organizational adaptation to meet customer needs with solutions Standard Implant Standard Plus Implant Tapered Effect Implant To meet the challenge of these trends and other changes in the market, at the outset of 2005 we combined our Implants and Biologics businesses into a single Products Division with four business units (BUs), each serving the key customer segments of the market: Surgical, Prosthetics, Specialty, and Regenerative. Each BU was allocated global responsibility for product management, pricing, positioning, main market strategy, etc. This accelerates decision-making and enables us to respond to customer and market needs more rapidly and efficiently. The following section highlights some of the main achievements of each BU in 2005, which coincided with numerous further small improvements to our dental implant system. Designed for maximum flexibility with a minimum number of components, the Straumann Dental Implant System includes three implant types that collectively cover the complete range of indications in implant dentistry: the Standard implant, optimized for non-submerged placement, the Standard Plus implant for semi- or fully submerged placement, and the Tapered Effect implant, designed for placement immediately or early after tooth extraction. Straumann implants are finished with the SLA or SLActive surface, which offer the option of immediate loading*. In the US, Straumann received FDA clearance for this application back in Supported by more than 3000 publications, the Straumann Dental Implant System is one of the longest and most extensively documented systems on the market. Surgical SLActive: the next-generation surface technology The Surgical BU devoted much of 2005 to the launch of SLActive, our new implant surface technology which reduces healing times by half to just 3 4 weeks 1. 1 Beagle J. Immediate and early loading clinical case reports with SLActive from the USA. Presentation at the 14th Annual Scientific Meeting of the European Association for Osseointegration, September 2005, Munich, Germany. * With good primary stability and appropriate occlusal loading. In fully edentulous cases, four or more implants must be rigidly splinted together.

24 Straumann Annual Report 2005 PRODUCTS AND SERVICES 24 The scientific evidence substantiating this and other claims was presented in 2005 at the ITI World Symposium and at the meeting of the European Association of Osseointegration. In particular, initial clinical findings from ongoing trials in 19 centers worldwide were presented, including a prospective randomized controlled clinical trial that demonstrated a highly significant change in implant stability compared with the current SLA surface 2. This reflects the 60% increase in bone around the implant surface that was observed in preclinical studies at two weeks when conventional implants are most likely to fail 3. SLActive s continuing clinical program currently involves 23 centers worldwide and includes demanding protocols with immediate and early loading. The interim conclusions presented in 2005 emphasized that, despite the challenging protocols, immediate and early loading with SLActive achieves excellent survival rates well above the average mean results of comparable representative clinical studies 4. The innovative packaging vial and dispenser for SLActive. We believe that SLActive is the implant of choice for all immediate loading cases, a quarter of early loading cases and more than a third of other cases. In summary SLActive offers direct benefits in a third of all implant indications. More than an implant Our engineers developed an innovative packaging system for SLActive to preserve its surface activity. A convenient dispenser was incorporated, ensuring safe and easy removal from the container immediately prior to placement. Features such as this, in addition to the clear proven benefits, the complex manufacturing process and, above all, the potential to avoid implant failure which involves discomfort, inconvenience and cost demonstrate the high value of SLActive. The SLActive surface was launched on our most popular implant type in Europe and in initial Asia/Pacific markets at the end of September, with other types to follow. The North American introduction is slated for March While the response so far has been very positive, the implant dentistry market has historically been conservative in adopting new technologies. Based on the changeover from the TPS surface to SLA, which took approximately three years, it may well take some time to achieve a high level of conversion from SLA to SLActive. Indications in implant dentistry SLActive Immediate loading Early loading Delayed loading 35% 3% 2 Oates T et al. A prospective randomized clinical trial to compare the stability of standard SLA and SLActive implants during the first 6 weeks of healing using resonance frequency analysis. Submitted to J Dent Res Buser D et al. Enhanced bone apposition to a chemically modified SLA titanium surface. J Dent Res 2004; 83(7): Zöllner A. First clinical results from the SLActive multicenter study. Presentation at the 14th Annual Scientific Meeting of the European Association for Osseointegration, September 2005, Munich, Germany. 70% 27%

25 Straumann Annual Report 2005 PRODUCTS AND SERVICES Examples of new instruments For added convenience in safeguarding against potential disease transfection during dental treatment, we introduced a range of single patient drills at the International Dental Show in Cologne in April. In addition to safety advantages, these drills do not require scrubbing, sterilization and drying which is time consuming and can impair sharpness. Single patient drills save time, offer economic benefits and give peace of mind to the patient. Another example of a product launched in 2005 that meets a market need for convenient high quality instruments is the Straumann Bone Block Fixation Set, which contains the precision instruments and hardware needed for attaching bone grafts to implant sites. Using CAD/CAM technology, the dental lab technician designs the abutment on a computer and transmits the design data via our CARES web shop to a central Straumann manufacturing center. The abutment is made to fit precisely onto Straumann implants and is dispatched to the laboratory for crowning. The majority of restorations can be accomplished with Straumann s comprehensive range of standard abutments and consequently individualised abutments are a niche market. Nevertheless, as dental centers increase their level of computer support, CARES could point the way to new broader service models in the future. CARES has been rolled out in Germany, Switzerland and Austria, with introductions in other European markets in progress. 25 Prosthetics Strengthening the prosthetic range Our implant portfolio includes a comprehensive range of abutments and copings. Here too we made some important additions, such as a new gold abutment for esthetically superior restorations especially in the anterior region of the mouth. Its one-piece design reduces the number of components and provides greater flexibility for the final restoration. Its suitability for direct casting makes it ideal for customized solutions. Clearly the highlight for the Prosthetics BU in 2005 was the introduction of Straumann CARES Ceramic, an individualized abutment service using zirconia (ZrO 2 ), a white ceramic material that offers optimal strength and esthetics. High-tech ceramics such as zirconia are difficult to process faultlessly in the laboratory, so CARES transfers the manufacture to industrial machines, minimizing the risk of imprecision, surface cracks or even breakage during processing. CARES Ceramic underwent extensive testing involving millions of fatigue-testing cycles to ensure that it performed equally as well as the CARES titanium equivalent launched earlier in the year. Individualized ceramic abutment produced by Straumann CARES.

26 Straumann Annual Report 2005 PRODUCTS AND SERVICES 26 Special Products also has the important responsibility of supplying prosthetic components and instruments to fit implants that have been superseded in our product range by newer designs. As the long-term satisfaction and well-being of our customers and patients are paramount, we are committed to supplying prosthetic parts and instruments for every implant system that we have ever produced. Patients can therefore have complete peace of mind that high quality Straumann-original replacement components are available to fit Straumann implants even if they have been in place for 30 years or longer. Regenerative Straumann TempImplants. In addition to its core implants business, Straumann also develops and manufactures products on a biological basis, which contribute to tooth preservation or serve to prepare for and support the implantation process. Special Products Straumann has a tradition in responding to individual needs. For this, we have a Special Products business unit comprising a group of experienced specialist technicians and product developers, who produce solutions for nonstandard tasks. In the course of a year, Special Products receives more than 150 requests from around the world for individual tailor-made solutions. One example of a special solution that led to a commercial product in 2005 is the TempImplant, which as its name suggests is a temporary implant that makes it possible to provide a fully edentulous patient with an anchored denture immediately after surgery, without interfering with the healing process of the permanent implant or bone augmentation site. A comprehensive TempImplant portfolio, complete with instruments, was subsequently developed and presented at the 2005 European Association for Osseointegration meeting, where it was extremely well received. The quantity and quality of bone are crucial to the success of implant treatment. In addition, an adequate bone structure ensures that the gum is preserved and does not recede. The essential conditions for implantation and restoration of tissue can be created with regenerative products that promote bone and/or gum tissue formation. To meet the increasing demands for quality and esthetics, new materials and technologies are called for. With such technologies we want to offer customers a portfolio of regenerative products that complement our successful implant portfolio in order to satisfy present and future market needs with Straumann solutions. High demand for new vital bone Approximately one in five patients needing tooth replacement does not have adequate bone to provide sufficient stability for a dental implant. Such cases are most commonly treated with a bone graft, although the process of harvesting/removing bone from the donor site in the patient can be painful and may have risks. One alternative is to use materials from another human source or from animals, which may be associated with concerns about the potential risk for disease transfection. Fully synthetic bone graft substitutes offer an alternative solution but available products may be limited by their degradation or handling characteristics.

27 Straumann Annual Report 2005 PRODUCTS AND SERVICES Straumann Bone Ceramic Straumann Bone Ceramic is a novel, fully synthetic bonegraft substitute that provides maximum space for new bone and outstanding handling convenience. 27 The controlled introduction to selected clinicians and surgeons initiated towards the end of 2004 was expanded and included post-market acceptance tests in The very positive reaction prompted us to broaden the selective introduction by making the product available in the US ahead of plan. The European roll out will follow in 2006, as will the launch in other regions, following market approvals. Straumann Membrane pioneering hydrogel technology The procedure of building up bone either before or during implantation uses an established technique called guided bone regeneration (GBR), in which a barrier membrane is employed to define the space into which new bone should form and to prevent rapidly growing soft tissue from filling the defect. GBR involves advanced procedures that are difficult to perform with predictable results. Straumann Membrane is a highly innovative, fully synthetic, resorbable barrier membrane using hydrogel technology that is designed to facilitate GBR. Preliminary clinical results in 2005 demonstrated the product s effectiveness, with excellent bone formation in sites protected by Straumann Membrane. We believe that, once cleared by the regulatory authorities, Straumann Membrane has the potential to become the product of choice for GBR procedures. Straumann Membrane and Straumann Bone Ceramic are designed for use in combination and thus offer our customers a synthetic solution for GBR procedures. Subsequent to approvals, Straumann Membrane is planned for launch in the US in the latter part of 2006 and in Europe in Straumann Bone Ceramic. Emdogain promises more Since the acquisition of Biora two years ago, Straumann has broadened the customer base for Emdogain, which continued to show solid growth rates in 2005 even in countries where it has been available for several years. Notwithstanding, more than 90% of the patients suitable for Emdogain remain untreated, suggesting a large market potential for the future. Between 5 and 20% of any population suffer from severe periodontitis 5, which is one of the most common causes of tooth loss because it destroys the periodontal tissues that are crucial for tooth attachment. Conventional treatment involves cleaning the tooth root followed by guided tissue regeneration (GTR) using a membrane. Emdogain is an easy-to-apply gel that helps to repair periodontal tissues and bone without the need for GTR membranes. 5 Epidemiology of Periodontal Diseases. American Academy of Periodontology report. J Periodontol 2005; 76:

28 Straumann Annual Report 2005 PRODUCTS AND SERVICES 28 Data presented at the INSERM scientific symposium, during the 2005 Congress of the French Dental Association (ADF) in Paris, showed that GTR membranes are associated with complication rates of up to 97% 6. In stark contrast, no complications were observed with Emdogain treatment 7. Compared with GTR, Emdogain treatment is simpler and achieves predictable outcomes. Other research published at the ADF showed that proteins in Emdogain stimulate a much broader spectrum of regenerative activity than at first believed, which could open up exciting possibilities for solutions to clinical problems ranging from wound healing to bone regeneration. Outlook Straumann will continue to optimize its range of products and services with meaningful innovations. We shall also remain true to our philosophy of introducing products that offer both clear benefits to customers and clinical advantages. We shall continue adapting our product range to simplify the existing product portfolio and will add new products where this makes sense. At the 2005 Annual Meeting of the American Academy of Periodontology held in Denver, new data were also presented on Emdogain in the treatment of recession, which affects more than half of any population. The data indicate that Emdogain offers significant clinical benefits such as increased root coverage 8 and less discomfort/morbidity 9 and works in a biomimetic fashion by mimicking the natural process of tooth development 10. Extensive preclinical and clinical investigations of longterm esthetic outcome using the product with or without bone graft material demonstrated that Emdogain treatment led to reduced gum-tissue recession and, with periodontal reconstruction, preserved gingival architecture in the long term. 6 Burt B. Research, Science and Therapy Committee of the American Academy of Periodontology. Position paper: epidemiology of periodontal diseases. J Periodontol 2005; 76: Sanz M et al. Treatment of intrabony defects with enamel matrix proteins or barrier membranes: results from a multicenter practice-based clinical trial. J Periodontol 2004; 75: Cueva M et al. A comparative study of coronally advanced flaps with and without the addition of enamel matrix derivative in the treatment of marginal tissue recession. J Periodontol 2004; 75: McGuire M, Nunn M. Evaluation of human recession defects treated with coronally advanced flaps and either enamel matrix derivative or connective tissue. Part 1: Comparison of clinical parameters. J Periodontol 2003; 74: McGuire M, Cochran D. Evaluation of human recession defects treated with coronally advanced flaps and either enamel matrix derivative or connective tissue. Part 2: Histological evaluation. J Periodontol 2003; 74:

29 Straumann Annual Report 2005 PRODUCTS AND SERVICES Independent expert opinion* Surface technology: The edge between metal and bone 29 Prof. Lars Sennerby, DDS, PhD, Dept. of Biomaterials, Institute for Surgical Sciences, Göteborg University, Sweden, and Dept. of Oral & Maxillofacial Surgery, Umeå University, Sweden. Where do you think surface technology is heading? Solutions are still needed for the most problematic cases. One emerging technology is the use of biologically active substances, such as bone growth factors. The increased surface roughness could act as a reservoir for such factors, which would then release slowly. Researchers are also investigating thin ceramic coatings. How important are the surface characteristics of an implant? Under certain circumstances ordinary implants may not become integrated or are lost during loading. Many of these cases can be successfully treated by using implants with increased surface roughness, which often helps bone to attach to the implant and even speeds up the process. Do increased speed and strength of integration matter in all cases? They are especially useful in sub-optimal situations. The worst case is soft bone combined with immediate loading. There is quite a big difference between the performances of modified and non-modified implants under these circumstances. About 10% of implant sites consist of very soft bone. What contribution should industry make? Due to the lack of grants, it is important that companies continue to perform and support applied biomaterials research at universities. Clinical research must also continue, so the effectiveness of new technologies, treatment concepts, and other inventions can be proved prior to launching products on the market. Some companies market new products without any clinical documentation. We have to remember that the patient s safety comes first. Are rough surfaces also an advantage in straightforward cases? Smooth implants have been very successful in patients with sufficient bone density and volume when using a 3 6 month healing period before loading. But nowadays many implants are loaded soon after placement, so integration has to occur during use. Here, I see a clear benefit in surface technology. Can osseointegration repair significant bone deficiencies? This is a significant problem in many patients, and severe bone deficiency usually needs a bone graft before an implant can be placed. In my view, patients who need bone grafts can also benefit from implants with modified surfaces. *These personal opinions may not reflect the views of Straumann.

30 SLActive: A quantum leap The science is right Rarely has an implant been so exhaustively investigated prior to its market launch as SLActive. What happens in the patient s jaw after the implant has been placed is being studied extensively at 23 centers around the world. One of the leading investigators, David Cochran, Professor of Periodontics at the University of Texas Health Science Center, San Antonio, explained that a particular challenge was measuring comparative stability accurately without disturbing the implant in the slightest. Using an elegant non-invasive method his team succeeded in effectively tracking the healing process in the human jaw. In the most rigorous type of study, a prospective, randomized, controlled trial, two implants were inserted in each patient s jaw, one with the SLA surface and one with SLActive. A tiny Osstell resonance-frequency measuring device based on the principle of a tuning fork was attached to the implant and coupled to a computer, to assess the stability at 7-day intervals for 6 weeks. The results show that the SLActive surface is conducive to significantly faster bone healing, achieving a change to positive stability at 2 weeks compared to the SLA implant where the change occurs at 4 weeks, Prof. Cochran concludes. This confirms preclinical observations of substantially better bone-to-implant contact with SLActive two weeks after implantation. In fact, in a preclinical study, 60% more bone was found to have formed around the new surface than around the conventional SLA surface at 2 weeks of healing.

31 The results show that the SLActive surface is conducive to significantly faster bone healing. Prof. David Cochran

32 Straumann Annual Report 2005 RESEARCH AND DEVELOPMENT 32 RESEARCH AND DEVELOPMENT For more than half a century we have concentrated our scientific expertise and our passion for excellence on researching and delivering superior solutions. A global network for purposeful innovation and clinical excellence At approximately 5% of sales, Straumann s contribution to the discovery and testing of new treatment options is one of the highest in the industry. This reflects our principle of introducing products only when they have been thoroughly tested and our commitment to long-term product surveillance. Our policy is to back our products with proven clinical benefits that are scientifically substantiated, which is why we introduce new products on a controlled, selective basis. Straumann conducts its research and development through a focused team of in-house specialists, whose expertise covers all the relevant scientific disciplines, including materials science, oral surgery and cell biology. This interdisciplinary team collaborates with an extensive network of international academic partners, including leading universities, institutes and organizations, who perform the majority of our scientific studies. We also collaborate with our independent academic partner, the International Team for Implantology (ITI), on research and development. In addition to basic research projects with the ITI, we currently have a number of preclinical studies ongoing, split between the fields of implantology and tissue regeneration, as well as a substantial number of research projects involving cell cultures. Broadening our expertise Research and Development was recently reorganized according to projects rather than specialty. One of the most important consequences of this in 2005 was the establishment of a dedicated cell-culture laboratory in Basel run by highly skilled scientific staff. In addition to this, we increased the number of employees in our research and testing facilities in Malmö, Sweden. In all, we expanded our preclinical research team in line with sales, further strengthening our expertise and ensuring a broad coverage of basic and advanced research. The Clinical Research group also expanded internationally with the addition of staff members in Andover and Malmö, bringing us closer to our clinical trial centers in North America and Scandinavia. We also added to our scientific writing capabilities to ensure faster and broader communication of research results to our customers and the market. In 2005, more than 80 publications on Straumann products appeared in peer reviewed journals adding to the body of scientific evidence substantiating our claims. Straumann s R&D organisation Our Clinical Research group also provides logistical and advisory support for ITI projects. Straumann s dedicated team of specialists Pre-clinical research Universities Institutes Specialists ITI Research Committee Development Committee University clinicians Practioners Clinical research

33 Straumann Annual Report 2005 RESEARCH AND DEVELOPMENT Project focus in 2005 Our research programs in 2005 focused on advancing tissue regeneration, improving osseointegration, evaluating new materials and developing next generations of currently marketed products. Our preclinical research efforts achieved high visibility in the public domain. Four important papers on SLActive alone were published or accepted for publication and numerous high-profile posters and presentations featured at major congresses/meetings throughout the year. As in previous years, the emphasis of our clinical research programs in 2005 was on product safety and surveillance. Five-year data from the multicenter studies on the SLA surface were collated and prepared for publication. Important data were also presented on Emdogain and other products, but the highlight of 2005 was the introduction of SLActive supported by results from multiple studies, which substantiate its short and medium-term safety and efficacy in challenging indications. We have devoted more research capacity to SLActive than to any other new product to deliver the best possible implant with lowest risk of failure. At year-end, 3 studies on SLActive were in progress at 23 centers around the world. Early indications from an ongoing multicenter trial in 282 patients, assessing early and immediate loading procedures, have demonstrated an implant survival rate thus far of 98%. Other early trial results suggest that the risk of implant loss is not increased by early loading, and that implant stability is increased in the early treatment period. Outlook In 2006, the results of a number of important studies on various products are expected. In the latter part of 2006, we also anticipate findings from a study looking at the improvement of nutritional status in edentulous patients treated with implants, compared with those treated with traditional dentures. We shall also provide updates from ongoing studies and plan to initiate new multicenter studies. Independent expert opinion* Hydrophilic implant surfaces Prof. Jürgen Becker, DDS, Dr med. dent., PhD. Professor and Head, Dept. of Oral Surgery, Heinrich Heine University, Düsseldorf, Germany. Have we already reached the limits of osseointegration? Definitely not. I would even say we have entered a new era. Until now, implant surfaces have been hydrophobic, but recent studies indicate that cells not only adhere better to hydrophilic surfaces, they also spread over them better. How does this affect osseointegration? A drop of fluid remains like a bead on a hydrophobic surface but wets a hydrophilic surface. Because more of the hydrophilic surface is available, bone grows directly onto it. Healing is therefore faster. What are the clinical implications of this new development? The success rate of implants in normal cases is already high, so the additional benefit will be in more complex cases, for instance in implantation immediately after tooth extraction, when only 30 40% of the implant surface might be in contact with bone and the rest is connected by a blood clot. Or, in patients with low bone density. In both situations it is vital to get new bone to the implant surface. Is what is taught about osseointegration still correct? Some basic aspects have to be redefined. Originally it was thought that bone regeneration would not bridge a gap of more than a millimetre between existing bone and the implant. Usually, bone comes from the periphery and grows toward the implant, but present research shows bone originating from the implant surface. What are the next steps for research in this area? Not much is known about the comparative long-term success of hydrophilic surfaces in certain cases, e.g. abnormal bone density. It may take 3 5 years to get scientific data. Research will also look at soft tissue reaction and improving gum contact. Future technologies will focus on titanium implant surfaces as a drug vehicle for growth or angiogenesis factors. But we also have to focus on other basic problems such as peri-implantitis and plaque accumulation which precedes it. 33 *These personal opinions may not reflect the views of Straumann.

34 Straumann Annual Report 2005 PRODUCTION AND LOGISTICS 34 PRODUCTION AND LOGISTICS Our customers rely on us for predictable solutions, uncompromised quality and timely delivery. High-level investment in production Straumann made a number of high-level investments in Nowhere was this more evident than in production, where our capital expenditure amounted to approximately 12% of sales. To cater for future needs in the fast-growing market for dental implants and oral tissue regeneration products, we expanded implant production in Villeret, Switzerland, and Biologics production in Malmö, Sweden. We also established production capability for the complex manufacture of SLActive. However, these achievements were perhaps eclipsed by the historic inauguration of production in Andover, Massachusetts, our first implant manufacturing facility outside Switzerland. Andover: Highest precision, crafted in the USA The Andover site, which also houses Straumann s North American headquarters, was fitted from an empty shell in less than 12 months and officially opened in June. It is being established as a parallel precision machining unit to Villeret, focused on processing titanium. Following the installation of the initial CNC production machines around mid-year, priority was given to establishing safety and quality processes and to training the new team of engineers and specialists. Our primary objective has been to ensure that we produce exactly the same uncompromising standard of excellence in Andover as we do in Villeret, which has required close interdisciplinary collaboration between the two plants. In less than six months, we achieved our Swiss precision standards in Andover and obtained ISO certification. This is a source of great pride and speaks for the highly skilled and motivated teams at both sites. Andover is currently equipped with a small fraction of the machines that it is capable of eventually housing. It will complement Villeret, with the ultimate aim of supplying the major part of the North American market. Villeret Like Andover, our Villeret facility was also planned with reserve space for expansion when it was built in Continued global volume growth has made it necessary to expand capacity, and the second production floor was fitted out in As a result, we now operate two fully independent production lines, one producing surgical products (implants) and the other manufacturing components for our range of implant prosthetics (abutments). This enables us to focus on specific requirements both for prosthetics and surgical products and thus to further optimize production processes. Villeret now employs some 280 professionals, more than 50 of whom were recruited in SLActive Perhaps the greatest technical challenge in 2005 was to establish production for SLActive. The new surface technology employs the same initial manufacturing process as SLA, involving Sand-blasting with Large grit followed by Acid etching. SLActive is then processed in nitrogen and immediately preserved in isotonic saline solution. This maintains its high surface activity, which would otherwise be lost due to reaction with the atmosphere. The additional production processes necessitate highly controlled conditions, sophisticated packaging facilities and a high level of quality assurance. Despite the challenges, the processes were validated and running in time for the market launch in September An external audit conducted by TÜV, which focused on the SLActive processes, was successfully passed.

35 Straumann Annual Report 2005 PRODUCTION AND LOGISTICS Outlook 35 In 2006, we shall continue to optimize our logistics processes group-wide, with particular emphasis on further reducing throughput times and inventory levels. Production will be expanded in Andover and geared up to two-shift operation with the highest quality requirements maintained. Given the recent significant investments in production facilities, we do not foresee the need for an additional production site before The prototype production line for SLActive. Malmö In contrast to Villeret and Andover, our production unit in Malmö is devoted primarily to the specialized manufacture of regenerative products. These are made under cleanroom conditions and involve protein extraction and purification processes. A team of about 30 highly qualified specialists is responsible for the complex manufacturing and quality assurance procedures involved. In 2005, capacity was also expanded in Malmö, which entailed adapting the clean-room, ventilation and ultra-pure water treatment system. Thanks to careful planning and project management, the plant expansion was completed to term and with no interruption to our full level of service. Since completion, the plant has been validated and certified, and is fully operational. Logistics The transfer of our central warehouse facilities to Basel and Andover enabled us to adapt and reorganize our logistics to cater for constantly growing demand. In the course of 2005, we optimized ordering and delivery processes and switched to an SAP computer system. The resulting increased automation of our logistics processes enhances inventory management, order-processing and delivery.

36 SLActive: A quantum leap Straumann makes a virtue of necessity As 2004 drew to a close, it had become apparent that the high-tech, fully-automated production line for SLActive the only one of its kind would take longer to install and validate than originally planned. We had to be ready to meet demand for the initial selective launch but it was simply out of the question to shortcut on quality, says Dieter Lipp, Executive Vice President Production and Logistics at Straumann. In the space of just a few weeks, his team came up with an ingenious semi-automated interim solution that would enable the company to supply the much-awaited product on schedule and ensure absolute precision and quality. The logistics involved were particularly demanding, because to guarantee a highly active surface, the implants have to be finished and packaged expediently in a specialy controlled environment. Because of this, part of the procedure involves handling the implants through portholes with special integrated gloves, which requires a level of dexterity that relatively few skilled operators possess. Much has been learnt from surmounting these challenges and the experience gained is being used to perfect the fully-automated unit.

37 We had to be ready to meet demand but it was simply out of the question to short-cut on quality. Dieter Lipp

38 Straumann Annual Report 2005 PARTNERSHIP WITH THE ITI 38 PARTNERSHIP WITH THE ITI We have worked for more than 25 years with the International Team for Implantology to sustain our success in the complex field of implant dentistry. Straumann s academic partner The International Team for Implantology (ITI) is an independent academic organization that unites professionals around the world in a dynamic network of proficient and collegial exchange in the fields of research and clinical practice. With its focus on implant dentistry and related tissue regeneration, the ITI has provided a perfect academic complement to Straumann since its inception in In 2005, the ITI celebrated its 25th anniversary. It has grown from a small and tightly knit group of pioneering researchers to an extensive and still growing international network of more than 400 Fellows and 1000 Members, represented by 15 country sections. Through regular meetings, courses, workshops and conferences on a regional, national and international basis, the ITI undertakes to reach the largest number of clinical practitioners possible. Commitment to education and research Two areas in which the ITI invests a great deal of energy and funding are education and research. As an organization that attaches a high value to thoroughly documented scientific results, it also supports the process of achieving those results. Each year, the ITI commits more than 50% of its annual budget to funding research. Since 1993, the ITI Research Committee has financed 203 projects with a total of more than CHF 26 million, making the ITI one of the highest-funding non-governmental organizations to assign research grants in the field of implant dentistry and related tissue regeneration ITI World Symposium One of the ITI s most important events is the biennial World Symposium, which was held in Munich, Germany in This event drew more than 2600 participants from 63 countries and featured presentations by 106 speakers. The subject matter ranged from surfaces with scientific evidence and clinical applications to innovative surgical and prosthetic procedures. Group and treatment-planning sessions also offered valuable insights in a less formal setting. With its broad range of opportunities for exchange and discussion, the event was cited as one of the year s highlights in the world of implant dentistry. The 2005 ITI World Symposium in Munich.

39 Straumann Annual Report 2005 PARTNERSHIP WITH THE ITI Another factor that distinguishes the ITI from peer organizations is that it also awards grants to unaffiliated scientists. Between 2001 and 2005, more than 60% of ITI grants went to non-iti research scientists. Most recently the trend in research has been towards projects related to bone augmentation, metabolism and implants, the predictability of implant restorations as well as the implanttissue interface. To support its commitment to education, the ITI has developed a number of different channels through which it acts on its mission to promote and disseminate knowledge on all aspects of implant dentistry and dental tissue regeneration. Each of the country sections is responsible for setting up an annual scientific program not only for its members, but also for all clinicians with an interest in implant dentistry. In order to reach the next generation, the ITI has set up a scholarship scheme through which young practitioners have the opportunity to spend a year in an approved scholarship center studying under the supervision and guidance of an experienced ITI Fellow. To date, there are 16 centers in the US, Europe and Japan and the number is growing. Since 1998, 85 scholars have received this one-year scholarship opportunity with its accompanying grant of USD , while each scholarship center receives USD marked a new record with a total of 18 scholarships awarded. In order to make the key learnings of the Consensus Paper more readily accessible to all dental practitioners, the ITI will publish a series of treatment guides that will help clinicians decide how best to address specific clinical situations and challenges. The first volume is planned for 2006 and differs from other publications in its clearly illustrated step-by-step approach that will highlight the crucial factors for successful long-term predictable treatment outcomes. Outlook Straumann considers the ITI partnership to be extremely valuable and will continue, with the ITI, to pursue the goal of continuously improving treatment methods in implant dentistry. The key priorities for ITI Fellows and Members and for Straumann are the same: successful treatment outcomes and the well-being of patients. 39 Consensus conferences As part of its contribution to the profession and practitioners, the ITI holds consensus conferences at regular intervals. These meetings bring together scientists and practitioners every few years to take part in intensive discussions based on literature in peer-reviewed publications and to establish whether or not enough evidence is available to confirm individual clinical procedures. Individual groups formulate statements, which are then discussed in the plenum. The outcome is issued in the form of a consensus paper, the most recent of which was published towards the end of 2004 as a supplement to the International Journal of Oral & Maxillofacial Implants. It was then distributed in The Consensus Paper is intended to serve as a guide to clinicians in the diagnosis, treatment planning and management of patients requiring dental implant therapy.

40 Straumann Annual Report 2005 SUSTAINABILITY 40 SUSTAINABILITY Our ethical behavior and respect for the environment benefit all stakeholders: customers, patients, staff, shareholders, and the communities in which we operate. Sustainability and quality management It is key to our strategy concerning sustainable development that, in spite of our strong growth, we continuously improve the quality of our operations, products and services. Our quality policy therefore emphasizes that we make no compromise on safety or quality, and that we continuously innovate and improve our processes. We are committed to supporting our employees in taking personal responsibility and pride in working towards solutions and results. We also focus on meeting the needs of our main stakeholders including employees, customers, and external partners and we strive to minimize our impact on the environment and risks to workplace health and safety. For example, in 2005 a comprehensive workplace study on CNC-production and etching processes confirmed that regulated concentrations at our production site in Villeret are well below the allowable workplace limits. The implementation of our quality policy is secured by an integrated quality management system compliant with the laws and regulations concerning Medical Technology, including EU MDD 93/42/ECC, US FDA 21CFR 820, Japanese PAL, Canadian CMDCAS, ISO 13485, etc. It also includes environmental management according to ISO 14001, workplace safety according to EKAS 6508, and satisfies ISO We have established this integrated management system for our Swiss sites in Basel and Villeret, and, in October 2005, we successfully implemented and certified the quality management system at our new US production location in Andover according to ISO In the course of the year, our environmental management system was implemented at our facility in Malmö, Sweden and we have now obtained ISO certification there. All elements of our integrated management system passed all external audits and official inspections sucessfully. In-process quality testing during implant production. Code of Conduct The Board of Directors together with the Executive Committee initiated and established a formal code of conduct. It complies with the FASMED (Federation of Swiss Medical Devices Trade and Industry Associations) code, and takes the code of ethics of the American Advanced Medical Technology Association (AdvaMed) into account. Whilst most of the behaviors addressed are commonplace at Straumann, they had not previously been formalized in a single code. The roll-out of the new code to all employees, together with the relevant training, are scheduled for 2006.

41 Straumann Annual Report 2005 SUSTAINABILITY As a complement to the Code of Conduct, we also began a project to define our core beliefs more succinctly. A corporate alignment program will follow in 2006 to ensure that all our employees maintain the same values and work towards the same goal. Clear responsibilities for sustainability issues Our top management assumes clear responsibility for our behavior towards employees, customers and patients, communities and the environment. The Head of Human Resources reports directly to the President and CEO. Responsibility for the quality and safety of our products lies with the Head of Products, who is a member of the Executive Management. The Head of Corporate Communication, who reports to the CEO, is responsible for stakeholder communication and sponsorship coordination. Our environmental policy was defined by the Executive Management and is implemented by the Head of Environment, Health and Safety, reporting to the Head of Corporate Quality Management/Regulatory Affairs. The General Counsel, who oversees compliance with the law, and the Chief Compliance Officer, to whom compliance issues related to our Code of Conduct are relayed, report directly to the CEO. Our sustainability management and reporting were rewarded in 2005 by the inclusion of Straumann in the FTSE4Good stock index, which measures the performance of companies that meet globally recognized corporate responsibility standards. Outlook In 2006, Straumann GmbH in Germany, one of our largest sales organizations, will introduce an ISO 9001 quality management system and our Andover facility will prepare for future environmental management certification according to ISO To facilitate the continuous assessment of our progress towards sustainable growth, we intend to enhance our Group-wide integrated management system with a more systematic inclusion of Global Reporting Initiative (GRI) indicators in CEO statement Rather than being preoccupied with short-term profit and stock price development, we focus on long-term profitable growth based on lasting solutions for our customers and their patients. At Straumann we pride ourselves in our reputation for reliability, which has become our trademark. Reliability is a signpost for sustainability and stable, profitable growth. As a company, we believe that ethical behavior and good corporate citizenship are also fundamental to our longterm sustainable development. In 2005, we formalized this in our Code of Conduct, which goes beyond legal requirements in the spirit of simply doing more to ensure that we conduct our business in an ethical and responsible manner and with due respect for the environment brought a number of successes and some challenges with regard to sustainable development, which we understand to encompass our responsibilities towards employees, customers, patients, the community, and the environment. We increased the level of dialogue with our staff globally through a number of initiatives and we significantly increased education and training for customers and for our employees. We also donated more to healthcare and disaster relief on a per-capita basis than many larger companies. On the other hand, setting up new facilities and larger scale production prevented us from achieving all our environmental goals. Notwithstanding, we remain committed to keeping the increase in resource consumption and emissions in line with, or lower than, sales/headcount growth, and reducing them wherever possible. I am especially pleased that our sustainability management and reporting were recognized in 2005 by the inclusion of Straumann in the FTSE4Good stock index, which facilitates investments in companies showing strong corporate responsibility. I want to thank all of our staff and our customers for their contributions to this achievement and for helping Straumann stay its course of sustainable growth. Gilbert Achermann President and Chief Executive Officer 41

42 Straumann Annual Report 2005 SUSTAINABILITY 42 SUSTAINABILITY DEDICATED EMPLOYEES We provide our rapidly expanding Employees by function staff with training and attractive employment conditions, securing a highly competent and motivated Production & logistics Marketing & sales Administration Research & development 20% 8% 31% service for our customers. 41% Growing our team rapidly The strong growth in demand for Straumann s products led to a further marked increase in our workforce in At year-end, a total 1342 employees worked in the various parts of our company around the world and Human Resources placed high priority on carefully selecting, training and efficiently integrating an unprecedented number of new employees. Employees (worldwide) Employees by region Switzerland Rest of Europe North America Rest of the World % 32% % % Attractive employment conditions We are committed to attracting the best candidates on the job market in order to continuously strengthen the high competence of our team. This means offering attractive compensation, and in 2005 our payroll totaled approximately CHF 140 million. In addition to competitive salaries, we offer performance-related elements of compensation. Incentive compensation models at Straumann have become a popular element of our remuneration system and support our culture of entrepreneurial thinking and simply doing more. Securing highest staff competence Fast growth and continuous innovation place high demands on our staff. As a responsible employer, we are committed to supporting our employees in acquiring, maintaining and continuously developing the skill levels needed to meet these demands. In 2005, we invested approximately CHF 3 million including labor time in the ongoing development of staff competence. Examples of our training activities include the introductory courses for new staff members, which are compulsory and have been intensified to ensure fast, active integration. Members of top management contribute to these courses. We also continued to offer training programs for apprentices at our Basel headquarters and in Villeret, with the goal of integrating trainees as valuable staff members after successful completion of the program.

43 Straumann Annual Report 2005 SUSTAINABILITY With regard to management development, the intense executive coaching program conducted with IMD business school in Lausanne in 2004 had a positive impact on our daily decision-making in Our strategic management continued to gain new impulses from the IMD Learning Network and participated in a 2-day Straumann-specific training session with leading business school trainers in Andover in May. 43 A major initiative in 2005 was the further training of a large part of our sales force at our Basel headquarters. We are convinced that this program contributes significantly to providing customers with the latest knowledge about innovative solutions and products. New opportunities for open dialogue Input from employees is valued at Straumann and we have established a number of informal mechanisms, in the place of formal union representation, to nurture this and to promote open, constructive dialogue. In 2005, the employees at our headquarters elected staff representatives who meet regularly with the CEO and other members of top management. In addition, regular meetings with the CEO in the form of Round Table discussions at headquarters and Town Hall meetings in the subsidiaries allow employees to discuss critical views openly. Established internal regulations to prevent discrimination on grounds of gender, race, background, religion, and sexual orientation, and to protect against sexual harassment and mobbing, have been complemented by our Group-wide code of conduct, which seeks to ingrain ethical behavior, good corporate citizenship and personal responsibility even deeper in Straumann s corporate culture. We have put procedures in place to ensure that employees who report breaches of the Code are protected from retaliation. Equal opportunity Straumann continues to monitor the proportion of women in its staff and management. In 2005, approximately 40% of our staff were female, and approximately a third of our management team were women. The number of women in senior management increased slightly but the proportion is still comparatively low. An informal open dialogue session with the CEO. One initiative in 2005 to assist women in their careers was the introduction of a cost-sharing program for child-care. We contributed CHF to this project in Fluctuation At 14%, personnel fluctuation was higher than in previous years and is not remarkable, given the dynamic growth and changing environment of our business. The rate of absences related to sickness was approximately the same as last year and, at 2.5 %, is very low. There were practically no absences related to workplace accidents. Outlook Successfully balancing renewal with continuity will be a challenging goal in Further development of our expanding staff will continue to be a focus of our Human Resources activities in In order to retain talent, we strive to fill attractive, challenging positions with internal candidates where possible. For this, we plan to introduce a global talent-pool management scheme. In addition, we will implement our Corporate Alignment project to further ingrain Straumann s values throughout the organization.

44 Straumann Annual Report 2005 SUSTAINABILITY 44 SUSTAINABILITY SATISFIED CUSTOMERS We are dedicated to the success of every customer and the well-being of every patient. That s why we always seek to understand the customer s perspective and deliver more than implants. Innovative and focused market development In 2005, we again succeeded in considerably extending our customer base, which consists of oral surgeons, prosthodontists, periodontists, dental technicians and general dentists all over the world. Straumann s customer base by specialty GP s Specialists Dental technicians Straumann s customer base by region Europe North America Asia/Pacific & Rest of the World 20% 17 % 19% 63% To further focus our market development, we conducted a comprehensive customer satisfaction survey in our leading market, Germany. This provided a good indication of what our customers value most about our products and services, and where we can still achieve improvements. The survey revealed that 93% of our customers are satisfied or very satisfied with our products and services, especially the extensive clinical documentation of Straumann products and the high quality of the Straumann service. The close monitoring of customer feedback is a further indicator of customer satisfaction. Based on all cases reported to us worldwide in 2005, the probability of success of a healed and correctly prosthetically treated Straumann dental implant in a healthy patient is greater than 99.9%. The increasing trend towards informed patients, which is part of the sustainable development of medicine in general, creates new needs for dental professionals. As a response, Straumann offers information packages to its customers worldwide to meet the information needs of their patients. We have adapted our marketing approach in innovative ways to address changing needs. For example, the increased attention devoted to personal appearance has heightened the debate on lasting dental esthetics. Rather than promoting the esthetic capabilities of our products from our own perspective, we invited clients to share their successes. Many well-documented cases were contributed, and a selection published in a high profile Esthetics Casebook. This generated great interest in professional circles and documents that long-term high-end esthetic results are achieved in daily practice with the Straumann Dental Implant System. Education benefiting customers and their patients 28% 53% Straumann offers a comprehensive range of education and training courses, which contribute to the high success rate our customers achieve with Straumann systems.

45 Straumann Annual Report 2005 SUSTAINABILITY In 2005, we greatly increased the number of courses worldwide in collaboration with the ITI, incorporating guidelines developed at ITI consensus conferences and the latest scientific literature. We also offered courses on optimized dental practice management, referral networks and platforms for information exchange. We opened two new training centers, in Basel and Andover. The world-class facilities in Andover, which include multiple surgical suites, a simulation lab, and a fully equipped lecture theater, became operational in mid-year and have hosted a series of outstanding courses developed in collaboration with the ITI and prominent dental schools. The Harvard SDM/ITI Keynote Lecture Series is one such example. Scientific congresses as platforms Straumann presents its products and services at leading scientific meetings worldwide. Corporate Forums were conducted at congresses of the Academy of Osseointegration in Orlando, the European Association for Osseointegration in Munich, and the American Academy of Periodontology in Denver. Pre-clinical and first clinical results of the new SLActive surface were presented at the ITI World Symposium in Munich, attracting more than 2600 participants. SLActive was then launched with clinical results presented at the congress of the European Association for Osseointegration in Munich. Straumann CARES was introduced at the International Dental Show in Cologne and CARES Ceramic was launched at a conference of the German Society for Implantology in Berlin. Outlook In 2006, we will concentrate on the roll-out of SLActive, CARES and Straumann Bone Ceramic. The launch activities will be supported by leading experts and through Corporate Forums at major scientific congresses. Throughout 2006, we will continue to ensure the thorough training of all our sales people worldwide. We will also seek to expand the educational activities for our customers in close cooperation with the ITI and based on ITI guidelines. To convey the key learnings from the ITI Consensus Conferences, we will distribute the forthcoming ITI Treatment Guides to our customers. Expert opinion* Implant education in the US James Ruskin, DMD, MD, Professor and Director, Center for Implant Dentistry, University of Florida, USA. Has implant dentistry changed in dental schools in recent years? In the past 5 8 years the majority of US dental schools have started to introduce the subject, and the number of students restoring is increasing each year. Are enough dentists trained in implants to meet demand? The market is vastly untapped, and will probably continue to expand exponentially for 5 10 years. But many generalists and older surgeons are not comfortable with implants, so there is a huge need for education. Has implantology challenged the traditional division between dental surgeons and restorative dentists? Implants cut across all specialties and all walks of dentistry. Our definition of surgery has become blurred. A generalist basically can do anything that a specialist can. Many generalists see the potential to make money with implants, and on the surface it looks easy. How would a dentist who didn t learn about implants in dental school learn how to do them? One way is to attend a continuing education course offered by a dental school, a teaching center, or even a private practitioner/ mentor. The other way is to attend a manufacturer-sponsored education program. Several manufacturers run their own training centers. Are industry education programs competing with dental schools? A little competition is healthy, but I also think they have complementary rationales. A university offers courses to make money, while the manufacturer offers education to help sell a product. I think there can be a symbiotic relationship between industry and education. I see education as what you need to do to serve patients and not cause them harm. Universities and manufacturers have to come to an understanding with those ideals in mind, rather than focusing solely on the best profit for themselves. *These personal opinions may not reflect the views of Straumann. 45

46 Straumann Annual Report 2005 SUSTAINABILITY 46 SUSTAINABILITY HEALTHY COMMUNITIES While our products and sponsorships contribute to the quality of life, we also contribute to the community by supporting economic stability as an employer. Products that contribute to long-term quality of life Our innovative products, including the new SLActive surface, help people who have lost teeth or dental tissue. As a leader in implant dentistry and dental tissue regeneration, Straumann s most important contribution to a healthy community is therefore the development and production of safe, effective and fully reliable treatments for restoring dental function. Our solutions go beyond restoring function and appearance to improving quality of life and well-being. For example, a long-running scientific study supported by Straumann at McGill University in Montreal, Canada, has shown that edentulous patients treated with implant-supported dentures are more active and report higher satisfaction in social interactions than those using conventional dentures 1. Further evidence linking restored dental function with improved health status is emerging. Promoting health in the community In the year under review, Straumann intensified its sponsorship activities related to dental care. We provided funding for dental relief/oral hygiene projects in Cambodia, Tanzania, Gambia and the upper Amazon region. These focused on providing treatment and information for people, especially children, in areas where no dental care is available and where there is little knowledge about oral hygiene. On-the-spot treatment in a Straumann-supported dental relief project in Gambia. Access to treatment is also limited in other regions, such as Alaska, where we provided funding to a team treating indigenous patients, mostly the elderly. Sizeable charitable donations were also made to several organizations devoted to helping children with disabilities. These included the international Cleft Foundation, which provides treatment to youngsters with cleft palate or similar facial malformations in developing countries, and the National Foundation for Ectodermal Dysplasias in the US. Children suffering from ectodermal dysplasia have few or no teeth at all. 1 Heydeck G, Thomason J, Lund J, Feine J. The impact of conventional and implant-supported prostheses on social and sexual activities in edentulous adults: Results from a randomized trial 2 months after treatment. J Dent Res 2005; 33(8):

47 Straumann Annual Report 2005 SUSTAINABILITY Our continued practice of donating a number of implants to dental faculties in several countries made a contribution to the treatment of patients who would otherwise have been unable to afford it. In addition to the aforementioned charitable donations, the company also contributed to disaster relief in various regions of the world, mainly for tsunami and hurricane victims. In part, this has been through matching donations from the employees. On a per-capita basis our contributions were higher than those of many larger companies. Other sponsorships We also continued our sponsorship of the Straumann Running Team for the third consecutive year in addition to other advertising activities to support the Straumann brand. Straumann also sponsors the André Schroeder Research Prize, an annual award of CHF for the advancement of dental research and development. The 2005 Prize was awarded to a Chinese researcher, Dr Xiaolong Zhu. Continued value creation for the community Perhaps our most important contribution to supporting the community at our locations is the continuation of existing jobs and the creation of new positions. In 2005, we were able to create more than 200 new jobs worldwide. Employment creation gained Straumann recognition as the highest ranked Swiss company in the 2005 Europe s 500, a Brussels-based survey determining the fastest growing medium-sized European companies that have created the most jobs over the past four years. Similarly, Straumann was awarded the Team Massachusetts Economic Impact Award in 2005 on the basis of the positive contribution of job generation to the economy of Massachusetts. The relocation of our Group headquarters to Basel at the end of 2004 left our buildings in Waldenburg vacant. It was particularly important for the local community to have a prompt solution that would sustain local economic activity. We succeeded in concluding long-term leasing agreements with two Med-Tech companies and were commended by the local authorities for responsible relocation management. In 2005, we took over distribution channels or acquired local distributors for instance in Italy and Australia. In each case, we have integrated practically all the affected staff without the loss of jobs and with the creation of additional positions. This not only benefited the communities in which we operate, but also ensured seamless continuity of service to our customers. A formal commitment to ethical business behavior Our new Code of Conduct formalizes our commitment to respect human rights at all times. Child labor is not permitted in the Straumann Group anywhere in the world. In all the communities we do business in, Straumann is committed to the protection of fundamental rights in the workplace and adheres to all appropriate laws and guidelines. Straumann is firmly committed to providing equal opportunity in all aspects of employment. Outlook In 2005, we re-focused our sponsorship activities on areas that are related to our business and in which we can make a meaningful difference. This will lead to a number of new initiatives in 2006, including the start of charitable provisions of dental treatment for underprivileged people in the local community of our headquarters. Following the success of the 2005 dental relief and oral hygiene projects in underprivileged regions, we plan to continue our support for these and similar undertakings in 2006, and we expect to be able to continue job creation globally based on continued growth in demand for our products. 47

48 Straumann Annual Report 2005 SUSTAINABILITY 48 SUSTAINABILITY ENVIRONMENTAL PROTECTION We continue to strengthen our environmental management and reporting as part of our efforts to conserve natural resources. Respect for the environment as part of simply doing more In our previous annual report we included a summary chapter on environmental performance for the first time. In the meantime, we have published a full Health, Safety and Environmental Protection report with detailed reviewed data. Similarly, the initial information presented here will feature in a comprehensive report later in All applicable laws and regulations relating to environmental protection and health and safety in the workplace are an integral part of our management system and our company is regularly assessed by internal and external inspections to ensure that we comply with them. However, we believe that respect for the environment and occupational safety means doing more than observing the statutory requirements. We include environmental protection and workplace safety considerations in the product development and procurement stages. We do not compromise on quality, or the safety and health of any employee at work. In addition to these precepts, our environmental policy includes the following principles: focusing on conserving resources and recycling, continuously improving products and processes, periodically defining environmental goals and reviewing our progress towards them, educating and motivating our staff to take responsibility for environmental protection. These goals are translated into concrete action plans and tracked by performance measurements at sites that are certified according to ISO 14001, namely Villeret and Basel. The discussion on environmental programs and performance in this chapter therefore applies to these two sites, where the largest part of our production and support processes are performed. One of the highlights in 2005 was the successful certification of our Malmö facility according to ISO 14001, towards the end of the year. This site will also be included in our reporting in Focusing environmental management and reporting on core processes The core physical process at Straumann is the processing of titanium, which is used in the majority of our products. The following summary of the production process for SLActive implants serves as an illustration: The titanium arrives in the form of rods and is subject to extensive material testing before acceptance for production. The rods are then machined into implants on CNC precision lathes. The proportion of titanium scrap resulting from the cutting process and our strict quality standards is substantial, however this is recycled for non-medical applications. Each implant is then inscribed with a serial number using a laser. After pre-cleaning, a defined part of the surface is sandblasted and etched with acid. SLActive production is carried out in a nitrogen atmosphere to preserve the surface activity of the implant. SLActive is stored in isotonic saline solution, produced with purified water. Samples and records are kept throughout production.

49 Straumann Annual Report 2005 SUSTAINABILITY Our environmental management and reporting system focuses on monitoring and improving these key steps in the production processes. For this reason, we measure and report parameters such as the use of titanium, cutting and hydraulic machine oils, cleaning-benzene, acid and purified water. In addition, we monitor major environmental factors relevant for any organization of our size, such as energy consumption, ordinary water consumption, solid waste production, and CO 2 emissions. In 2005, we further focused our environmental reporting on key activities by including the level of titanium scrap recycling, but excluding marginal waste streams such as PET, batteries, cardboard and wood. Tracking vehicle fuel consumption was discontinued because we divested almost our entire vehicle fleet as part of the move to our new headquarters in Basel at the beginning of the year. One small but meaningful change is the switch of units for measuring paper used from kilograms to sheets per capita. This is intended to raise awareness among our staff and to encourage reduction, which is a central goal of our environmental reporting. Environmental performance challenged by business growth Our performance against key environmental indicators is summarized in the table on page 51. Overall, 2005 was a challenging year for our environmental performance. While the absolute consumption and emission levels can be expected to increase in a fast growing manufacturing business such as ours, a number of indicators increased faster than sales or headcount. The main factor contributing to this was the increase in the number of production machines and production area, as well as the addition of more complex production techniques. However, our goal in the long run is to keep increases in consumption and emissions in line with, or lower than, growth in sales or headcount and to reduce them over time where possible. The changeover to two autonomous production lines in Villeret (see page 34), related start-up processes, the ramp-up for the launch of SLActive, and new-product development all contributed to an over-proportionate increase in titanium consumption. The addition of new machines also led to an increase in oil used. Cutting oil consumption rose considerably because we changed to a new type that has better characteristics for titanium processing and a better safety profile, but which is not reused. This oil can however be used longer and is recycled. This, together with the oil changeover and machine servicing, explains the increase in oil for recycling. Installation and start-up testing was also the reason for the increase in recycled acid, which was related mainly to the SLActive process and a new cleaning unit. 49 Careful monitoring of titanium processing to ensure maximum precision and minimun waste. We were able to achieve a reduction in solid waste (refuse) per capita in Villeret. Contrastingly, the corresponding figure grew strongly at Group headquarters mainly because our paper and cardboard are not collected separately by the municipal waste disposal in Basel. A considerable amount of refuse was also generated by the clearance of our former location in Waldenburg.

50 Straumann Annual Report 2005 SUSTAINABILITY 50 Major energy use in 2005 CO 2 emissions Electricity District heat Heating gas 8% 19% Consumption of electricity, our largest energy input, increased per capita mainly because of the additional machinery and production area in Villeret, with the associated increase in ventilation, cooling and lighting. Additional space, the new office concept and the ventilation system in Basel were additional contributing factors. On the other hand, heating energy per capita in Basel was considerably lower than in Waldenburg, thanks to the well-insulated construction of our new headquarters. Water use per capita also fell, helped by the installation of sensor-controlled faucets in Basel. We achieved our goals for both these indicators. CO 2 emissions per capita 73% In 2005, we saw a marked reduction in heating-related CO 2 emissions per capita. This was because considerably less energy is needed to heat our new headquarters and we use district heating instead of oil-heating, which was used in Waldenburg. However, overall CO 2 emissions per capita increased, based on calculations using standard CO 2 -conversion factors for electricity and district heat and including the direct emissions from our gas heating at Villeret. The reason for this is the aforementioned increase in electricity consumption. The near total reduction in vehicles has led us to exclude vehicle fuel use from the CO 2 emission figures reported here. However, that does not mean that we exclude transport issues from our environmental programs. On the contrary, we strongly encourage our employees to use public transport for commuting, and continue to fully subsidize the regional train-bus-tram pass and the Swiss half-fare travel pass for our staff if they forego a parking space in the building. In addition, we have started an initiative to encourage employees to cycle to work. The good accessiblity of our location has also prompted many clients and suppliers to travel to our headquarters by public transport. Outlook 10 % 36% Total (excl. vehicle fuel) Emissions from heating For 2006, we plan to strengthen our environmental management by introducing a more detailed environmental monitoring system based on GRI-indicators. We will also prepare our US production facility for future certification according to ISO Furthermore, we plan to purchase new containers for cleaning benzene with automatic opening and closing functions to reduce emissions, and we have set the goal of reducing refuse per capita in Basel by 5%.

51 Straumann Annual Report 2005 SUSTAINABILITY Summary of environmental performance figures 51 Change Performance indicator Unit (in %) Raw materials and supplies Titanium Consumption kg Recycled (consumption minus product) kg Consumption/sales kg/chf million Various oils Consumption kg Filtered kg (21) Recycled kg Recycled/sales kg/chf million Cleaning benzene Consumption kg Recycled kg Acid Recycled kg Recycled/sales kg/chf million Diverse Diverse waste Hydroxide sludge kg Contaminated materials kg Solvents kg (4) Refuse Villeret kg Per employee, Villeret kg/employee (11) Waldenburg/Basel 1 kg Per employee, Waldenburg/Basel 1 kg/employee Paper Consumption sheets Consumption per capita sheets/employee Energy Electricity Consumption kwh Consumption per capita kwh/employee Heating Oil Waldenburg/District heat Basel 1 kwh (39) Energy per employee, Waldenburg/Basel 1 kwh/employee (47) Gas, Villeret kwh Gas per employee, Villeret kwh/employee Water Water Consumption m Consumption per capita m 3 /employee (5) Pure water Purified water m Production loss purified water % Emissions CO 2 CO 2 (excl. vehicle fuel) kg CO 2 (excl. vehicle fuel) per capita kg/employee Waldenburg in 2004, Basel in 2005.

52 SLActive: A quantum leap The sooner the better Avoiding unnecessary waiting and risk were two factors that prompted Susanne Ardos to choose an implant with the new SLActive surface. One of her premolar teeth was beyond preservation and had to be extracted. As a dental technician and patient at the Swiss Adent Medico-Dental Clinic in Ecublens, she knows all about the importance of good teeth. For her, there was no question: the missing tooth would have to be replaced by an implant, and although it was not in a noticeable place, she did not want even a temporary gap. She looked into finding the quickest replacement solution. Our local Straumann representative told me about SLActive and the early loading advantages it offered, she said. Shorter healing time and high stability in the early phase of healing are key benefits of SLActive. I wanted a new tooth that I could chew on as quickly as possible, and it had to be the best solution, she added. At the time of writing, her dentist had just fitted a provisional crown less than a month after placing the implant. The final restoration will be completed in the next four weeks. The whole procedure has been straightforward and there have been no problems with the provisional. When the permanent crown is in place in a just a few weeks time SLActive s job will be well and truly accomplished.

53 I wanted a new tooth that I could chew on as quickly as possible Susanne Ardos

54 Straumann Annual Report 2005 CORPORATE GOVERNANCE 54 CORPORATE GOVERNANCE We are committed to a policy of open, transparent and continuous information. Our commitment to responsible corporate governance means leadership balanced by control, safeguarding the interests of our shareholders. Straumann s principles and rules on corporate governance are laid down in the Articles of Incorporation, the Rules for Organization and Operation, the Code of Conduct, and the Charters of the Board Committees. These principles and rules are the basis of corporate governance disclosures, which are in compliance with the Corporate Governance Directive dated 1 July 2002 and published by the SWX Swiss Exchange. Additional information on Straumann s shares can be found in the Information for Investors section on pages Group overview The Straumann Group is a global leader in implant dentistry and oral tissue regeneration. In collaboration with the International Team for Implantology (ITI), leading clinics, research institutes and universities, the Group researches and develops implants, instruments and tissue regeneration products for use in tooth replacement solutions or to prevent tooth loss. The Group manufactures implant system components and instruments in Switzerland and the USA and dental tissue regeneration products in Sweden. Straumann also offers comprehensive training and services to the dental profession worldwide. Altogether, Straumann employs approximately 1340 people worldwide and its products and services are available in more than 60 countries through the Group s 18 distribution subsidiaries and broad network of distribution partners. In 2005, the Group generated sales of CHF 510 million and a net income of CHF 128 million. Legal structure Registered in Basel, Switzerland, Straumann Holding AG is the parent company of the Straumann Group. Straumann Holding AG has been listed in Switzerland since 1998 and its shares are traded on the main segment of the SWX Swiss Stock Exchange. The Straumann Group is headquartered in Switzerland and is represented by 18 fully-owned distribution companies and 3 production companies around the world. In North America, Straumann has an implant production company and 3 sales companies. The Group s headquarters includes implant production and general distribution in Switzerland. The Group sells products and services through 12 distribution companies across the rest of Europe. An additional 3 companies in Europe are devoted to the production and development of Straumann s regenerative products. Straumann has two other distribution companies, one in Asia/Pacific region and one in South America. Straumann Holding AG holds shares in subholding companies in Sweden and Italy. Straumann Holding AG directly or indirectly holds the majority of the capital and voting rights in all Group companies. As laid down in the Rules of Organization and Operation, the CEO or the Regional Executive Vice President, the CFO, and the General Counsel are generally Members of the Board of Directors in all Straumann companies and represent the parent company as main shareholder. Straumann integrated its Italian distribution organization in January 2005 and established its own distribution organization in Australia in July In October 2005, the Group published its plans to establish its own subsidiary company in Mexico, which will begin operations in the first quarter of In December 2005, Straumann announced the acquisition of its Danish distribution company effective January 2006.

55 Straumann Annual Report 2005 CORPORATE GOVERNANCE Group legal structure Straumann Holding AG Basel, Switzerland CHF Institut Straumann AG Basel, Switzerland CHF Straumann GmbH Vienna, Austria EUR Straumann BV Ijsselstein, Netherlands EUR Straumann Manufacturing, Inc Andover, USA USD 1 Straumann Brasil Ltda São Paulo, Brazil BRL Straumann Holding Sweden AB Malmö, Sweden SEK Straumann SA/NV Zaventem, Belgium EUR Straumann AS Oslo, Norway NOK Straumann USA, LLC Andover, USA USD 1 Straumann Pty Ltd Victoria, Australia AUD % Biora AB Malmö, Sweden SEK Straumann Danmark ApS Greve, Denmark DKK (January 2006) Straumann SA Madrid, Spain EUR Straumann Canada Ltd Burlington, Canada CAD Biora BioEx AB Malmö, Sweden SEK Straumann OY Helsinki, Finland EUR Straumann AB Gothenburg, Sweden SEK Straumann Mexico SA de CV Mexico City, Mexico MXN Bioventures BV Amsterdam, Netherlands EUR Straumann SARL Marne-la-Vallée, France EUR Straumann Holding Italy srl Milan, Italy EUR Straumann GmbH Freiburg, Germany EUR Straumann Italia srl Milan, Italy EUR Straumann Ltd Uckfield, Great Britain GBP All 100% except where indicated.

56 Straumann Annual Report 2005 CORPORATE GOVERNANCE 56 Executive Committee CEO Gilbert Achermann Corporate Center Products Dr Sandro Matter Market & Product Support Marianne Bürgi Operations Dieter Lipp Finance Martin Gertsch/Marco Gadola Sales North America Russell Olsen Sales Europe Wolfgang Becker Sales Asia/Pacific & Distributors Thomas Jaberg/Dr Patrick Louvel In January 2006, Dr Patrick Louvel joined Straumann as the new Executive Vice President Sales Asia/Pacific & Distributors. In 2005, this position was held by Thomas Jaberg, who assumed new responsibilities with Straumann in North America, strengthening Training & Education and ITI relationships. In the second quarter of 2006, Marco Gadola will join Straumann as new Executive Vice President Finance. In 2005, this position was held by Martin Gertsch, who left the company at the end of January Further details on individual executives can be found on pages Listed company Name Straumann Holding AG Domicile Basel, Switzerland Share capital CHF Registered shares Nominal value CHF 0.10 Market capitalization CHF million (31 Dec 2005) Listed at SWX Swiss Stock Exchange Security ID ISIN CH Bloomberg STMN SW Reuters STHZn Telekurs (Investdata) STMN Shareholders Registered shareholders On 31 December 2005, shareholders were registered. Share ownership is broken down as follows: Registered Registered shareholders shareholders Shares held 31 Dec Dec and more 2 1 Total

57 Straumann Annual Report 2005 CORPORATE GOVERNANCE Shareholders on 31 December Private individuals Institutional shareholders 16% 13 % Switzerland Non-registered 2% 3% 1% 5% 1% Major shareholders Germany 17 % Non-registered 20% Great Britain Rest of Europe USA 71% Rest of the World 51% Major shareholders The following major shareholders, as defined by Art. 663c of the Swiss Code of Obligations, were registered as owning more than 3% of the share capital on 31 December (in %) 31 Dec Dec 2004 Dr h.c. Thomas Straumann (Member of the Board) Simone Maag de Moura Cunha Rudolf Maag (Chairman of the Board) Total One further shareholder was registered with a shareholding of between 1% and 3%. All remaining shareholders are registered as holding less than 1% of the share capital. To the Company s knowledge, no shareholders agreements or other agreements between the shareholders exist. Cross-shareholdings Straumann has not entered into any cross-shareholdings with other companies relating to equity or voting rights. Capital structure (in CHF 1000) 31 Dec Dec Dec 2003 Equity Share capital Reserves Retained earnings Conditional share capital Number of registered shares Nominal value per share (in CHF) Registration restrictions none none none Voting restrictions none none none Opting-out, opting-up none none none

58 Straumann Annual Report 2005 CORPORATE GOVERNANCE 58 Capital structure Ordinary share capital The share capital is composed of registered shares, each with a nominal value of CHF The share capital is fully paid up. On 31 December 2005, Straumann Holding did not have any authorized share capital and had not issued any participation certificates or profit participation certificates. Conditional share capital A conditional share capital of CHF was resolved at the extraordinary General Meeting on 6 May Following the share split of 1:20 in 2001 and the reductions in nominal value in 2001 and 2002, the conditional share capital at the end of 2005 amounted to CHF and the number of conditional shares at the end of 2005 to The conditional share capital is intended for use in equity participation plans for employees and management. Restrictions on the transferability of shares and nominee registrations There are no restrictions on the transferability of Straumann Holding s shares. The person recorded in the register of shares is considered to be a shareholder in relation to the Company. A register of shares and their owners is maintained for registered shares. The Company must be informed of any changes. Proof of acquisition of title in the shares is a prerequisite for entry in the register of shares. On request, purchasers of registered shares will be entered in the register of shares as shareholders with voting rights if they expressly declare that they have acquired the registered shares in their own name and for their own account. Only if a purchaser is not willing to make such a declaration, the Board of Directors may refuse to register him/her as a shareholder with voting rights. After hearing the affected parties, the Company may delete entries in the register of shares if these are based on false statements made by the purchaser. The Board of Directors shall decide on the admissibility of nominee entries. Employee shares Employees have the right to purchase Straumann shares for 75% of the share price on 31 December, with shareholders preemptive rights being excluded. All employees are entitled to buy between 10 and 100 shares per calendar year. The shares are subject to a 2-year lock-up period. Stock option plan Part of the compensation paid to the Board of Directors, Executives and other members of Senior Management takes the form of stock options. The options have a term of 5 years and a vesting period of 1 3 years. The exercise price is equal to the share price on 31 December. The value of the options is determined at grant date and expensed as personnel expense over the vesting period. In order to facilitate valuation and transferability of options granted under this plan, the options are structured as Private Placement. Since 2000, a Swiss bank has functioned as market maker for the quoted and private placement warrants.

59 Straumann Annual Report 2005 CORPORATE GOVERNANCE Summary of all valid warrants issued in the Straumann stock option plan 59 Security ID Name/Symbol Year number Marketplace Type/ratio Number Strike price Expiry STMN/UBSW UBS Derivatives American Wt (STMN06) 50:1 STMN/UBSW UBS Derivatives American Wt (STMN07) 50:1 STMN/UBSW UBS Derivatives American Wt (STMN08) 50:1 STMN/UBSW UBS Derivatives American Wt (STMN09) 50:1 STMN/UBSW UBS Derivatives American Wt (STMN10)* 50:1 Total warrants outstanding *issued in the first quarter of 2006 The number of options outstanding under the stock compensation plan has developed as follows: The options outstanding are available as follows: As of 1 January Granted options Exercised options (48340) (1720) As of 31 December Options available for exercise Board of Directors In 2005, the Board of Directors of Straumann Holding AG consisted of 6 non-executive members. All members are elected by the General Meeting for a 3-year period of office. Re-election is permitted and, on 24 March 2005, Rudolf Maag, Dr Sebastian Burckhardt and Jürg Morant were re-elected for a further 3-year term by the General Meeting. The Board re-appointed Rudolf Maag as its Chairman and Oskar Ronner as Vice Chairman. The average age of the members of the Board of Directors is 53. Options Options available expiring at In year for exercise year-end Total In 2005, options were exercised and exchanged for the corresponding number of shares.

60 Straumann Annual Report 2005 CORPORATE GOVERNANCE 60 Straumann Holding AG Board of Directors Name Age Nationality Member since Elected in Elected until Rudolf Maag (Chairman) 59 Swiss Oskar Ronner (Vice Chairman) 60 Swiss Dr Sebastian Burckhardt 52 Swiss Dominik Ellenrieder 47 Swiss Jürg Morant 61 Swiss Dr h.c. Thomas Straumann 42 Swiss Operating principles of the Board of Directors The Board of Directors meets at least four times a year and as often as business requires. In 2005, the Board of Directors held four meetings. The members of the Executive Committee team participate in the Board meetings in an advisory capacity. The General Counsel acts as Secretary to the Board of Directors. The Board of Directors consults external experts where necessary when discussing specific topics. The Board of Directors is responsible for the strategic management of the Company, supervision of the Executive Committee and financial control. The Board of Directors reviews the Company s objectives and identifies opportunities and risks. In addition, it appoints the members of the Executive Committee. The Board of Directors is a quorum if a majority of its members is present. Valid resolutions require a majority of the votes cast. In the event of a draw, the Chairman of the Board holds the casting vote. Committees of the Board of Directors The Board of Directors has two permanent committees: the Finance and Audit Committee and the Compensation and Nomination Committee. The Board of Directors relies on the recommendations of these Committees to facilitate the efficient and effective organization of its work. Each Committee comprises three non-executive Board Members. In 2005, the Finance and Audit Committee met five times and the Compensation and Nomination Committee twice. Finance and Audit Committee Members: Rudolf Maag (Chair), Dr Sebastian Burckhardt, Jürg Morant. This Committee s main tasks are: Examination of the effectiveness of the external auditors and the internal controls Review of the instructions for management in terms of financial risks and compliance thereof Discussion of the financial statements with the CFO and the head of the external auditors Review of the services provided by and remuneration of the auditors, as well as their independence Review of risk management procedures. Compensation and Nomination Committee Members: Oskar Ronner (Chair), Dominik Ellenrieder, Dr h.c. Thomas Straumann. This Committee s main tasks are: Recommendation of the compensation to be paid to members of the Board and Executive Management Development of the principles for the market- and performance-driven compensation of all employees Definition of the details of the stock-option plans and the principles governing grants made under them Drawing up of the employment contracts for the members of the Executive Management. Executive management and assignment of responsibilities The Board of Directors has delegated responsibility for the management of the Company to the CEO, Gilbert Achermann, and the Executive Committee. Together with the Executive Committee, he is responsible for the overall management of the Straumann Group. The respective responsibilities and powers are laid down in the Rules for Organization and Operation.

61 Straumann Annual Report 2005 CORPORATE GOVERNANCE Information and control mechanisms for Executive Management The Straumann Group s management information system (MIS) covers the areas of management reporting, business and financial reporting. The information is provided to the Board of Directors on a quarterly basis and to the Executive Committee on a monthly basis. Additional Group management tools include strategic planning and its breakdown into business and operational planning. Risk management and monitoring procedures are evaluated at regular intervals by the Finance and Audit Committee. Executive Management The Executive Committee is responsible for the operational management of the Straumann Group in line with the instructions issued by the Board. Its tasks are laid down in the Rules for Organization and Operation. In 2005, Straumann s Executive Committee consisted of 8 members. Other than Gilbert Achermann s membership of the Board of Directors and Board of Trustees of the ITI, none of the members of the Executive Committee: performs any activities in governing or supervisory bodies of significant foreign or domestic organizations, institutions or foundations under private or public law, holds any permanent management or consultancy function for significant domestic or foreign interest groups, holds any official function or political post. Management contracts The Board of Directors and the Executive Committee run the business directly. They have not delegated any managerial powers to persons or companies outside Straumann. Compensation of, participations by, and loans to the Board of Directors and the Executive Committee Components of the compensation package A value-based compensation program was introduced for the Board of Directors, the Executive Committee, and the Senior Management in The aim of the program is to link the variable compensation paid to participants in the plan to the long-term added value generated by the Straumann Group. The concept builds on the principle of Economic Profit (EP) and is based on a multi-year plan that complies with shareholders expectations. In addition to measuring sales growth and profitability increases, the main advantage of the EP concept is that funds used to achieve these increases can be assessed and the resulting additional costs of capital can be taken into account. In addition to the individual fixed salaries, the variable compensation component takes the form of an individual cash remuneration (cash bonus). The multiplier for calculating the available bonus is derived from the economic profit improvement per fiscal year. The available bonus is credited to a bonus bank and only paid out in part, with the balance being carried forward to the next year. This allows the Company to take both positive and negative fluctuations in its business development into account and to take a long-term approach to variable compensation. In addition to the variable compensation, a fixed number of options, determined on an individual basis, are also granted. The options have a term of 5 years and a vesting period of 1 3 years. The exercise price of the options is the share price at the end of December. The value of the options is determined in line with the Black-Scholes method at grant date and expensed as personnel expense over the vesting period. In 2005, the members of the Board of Directors received compensation amounting to CHF The highest total compensation paid to a member of the Board of Directors in the year under review was CHF In 2005, the collective members of the Executive Committee received compensation amounting to CHF The compensation paid to the CEO in the year under review was CHF , and the compensation paid to Executives leaving the company in 2005 totaled CHF

62 Straumann Annual Report 2005 CORPORATE GOVERNANCE 62 Compensation 2005 Value of Total Total Number Cash options at Fringe compensation compensation (in CHF 1000) of persons Salaries bonus grant date benefits Chairman of the Board of Directors Members of the Board of Directors Total CEO Members of the Executive Committee Executive Management leaving Total Total The options granted for the fiscal year 2005 are based on the year-end share price of CHF and are valid until December They have a vesting period of 1 3 years and a value of CHF per option at grant date. Granted options 2005 Value at Number Number grant date Total value of persons of options (in CHF) (in CHF 1000) Chairman of the Board of Directors Members of the Board of Directors Total CEO Members of the Executive Committee Executive Management leaving Total Total

63 Straumann Annual Report 2005 CORPORATE GOVERNANCE Participation in the share capital Number Number Number Number of shares of shares of options of options Chairman of the Board of Directors Members of the Board of Directors Total CEO Members of the Executive Committee Total Total Management transactions As of 1 July 2005, the SWX Swiss Exchange introduced new regulations governing the disclosure of management transactions, made by members of the Board and the Executive Committee, in the company s shares and options. In the second half of 2005, Straumann reported the following transactions in this respect: Value Value of purchasing of selling Number Number transactions transactions of persons of transactions (in CHF 1000) (in CHF 1000) Management transactions in shares Management transactions in options Total Loans and guarantees to management The Company did not make any loans or guarantees to management in Related-party transactions All transactions with related parties are based on standard commercial contracts concluded at arm s length. In 2005, the Basel-based law firm VISCHER, Anwälte und Notare, in which Dr Sebastian Burckhardt is a partner, received fees amounting to CHF for legal and tax consultancy services. The contribution to the ITI Foundation amounted to CHF Apart from this, no business relationships with related companies or individuals existed. Cross involvement There are no interdependent memberships in the Board of Directors of Straumann Holding AG and any other company.

64 Straumann Annual Report 2005 CORPORATE GOVERNANCE 64 Shareholders rights of participation Auditors All shareholders who are entered in the share register as having voting rights are entitled to attend the General Meeting and have the right to vote. There are no voting restrictions. All shareholders may be represented at the General Meeting by written proxy. There are no statutory quorums. The General Meeting elects the auditors on an annual basis. In 2005, PricewaterhouseCoopers AG (PwC) Basel was elected as the auditor and group auditor of Straumann Holding AG. The auditor in charge was Thomas Brüderlin, Swiss Certified Public Accountant, who took over the mandate in Invitations to the General Meeting are issued in writing at least 20 days before the Meeting and are published once in the Company s journals of record, the Schweizerisches Handelsamtsblatt (SHAB Swiss Official Gazette of Commerce) and in the BaslerZeitung. For organizational reasons, new entries cannot be made in the share register 20 or fewer days before the General Meeting; however, participation in the General Meeting is still possible. Shareholders who sell their shares prior to the General Meeting are no longer entitled to vote. The invitation to submit proposals for agenda items will be announced by publication once in the Company s journal of record (SHAB). Shareholders individually or jointly representing shares may request items to be included in the agenda. The worldwide fees paid to the auditors PwC (2005) and Ernst & Young (2004) amounted to: (in CHF 1000) Audit Tax consultancy and other consultancy services Total The Board of Directors performs its supervision and control of the external auditors through the Audit & Finance Committee, which met five times in The Board of Directors has not delegated any management tasks to companies outside of the Company. Changes in control and defense measures The statutes of Straumann Holding AG do not contain provisions for opting-out or opting-up. There are no provisions for changes in control regarding members of the Board of Directors, the Executive Management, or other management staff. Information policy Straumann is committed to a policy of open, transparent and continuous information. In accordance with the rules of the Swiss Exchange (SWX), Straumann publishes detailed sales figures on a quarterly basis as well as annual and half-yearly reports. Where necessary or appropriate, the Company also publishes additional information on significant events. The CEO, CFO and Head of Corporate Communication are responsible for communication with investors. In addition to personal contacts, discussions, and roadshows in Europe and North America, Straumann held two financial results conferences for the media and analysts in 2005, each attended by around 50 participants. Both of these conferences were transmitted on the internet. In addition, Straumann held two teleconferences for the media and analysts and several non-financial media events, including three media conferences. Apart from this, the company frequently publishes media releases and briefing documents, which are archived and available from the company s website.

65 Straumann Annual Report 2005 CORPORATE GOVERNANCE Around 800 shareholders took part in the General Meeting in Research analysts from 19 banks/financial institutions cover developments at the Straumann Group and are listed on page 140 of this report as well as on the Straumann website. Straumann Holding AG s journal of record is the Swiss Official Gazette of Commerce (SHAB). The statutes of Straumann Holding AG and an excerpt from the commercial register can be downloaded as a PDF file from the company information section of our website. 65 This, and more information on the Company, is available via the internet at

66 Straumann Annual Report 2005 CORPORATE GOVERNANCE 66 Board of Directors (left to right): Dominik Ellenrieder, Thomas Straumann, Rudolf Maag, Sebastian Burckhardt, Jürg Morant, Oskar Ronner. Board of Directors The Board of Directors of Straumann Holding AG consists of six non-executive members who are elected by the Shareholders General Meeting for a 3-year period of office. Rudolf Maag Swiss (born 1946) Chairman of the Board, Chairman of the Finance and Audit Committee Rudolf Maag has a long distinguished career in finance and business administration. He started his career in 1968 with the Basel-based UTC trading company. In 1973 the year in which he obtained his MBA with distinction at INSEAD he moved to the Agro Division of the Swiss multinational Sandoz AG. There he held a series of senior management positions Head of Planning and Financial Control, Director of Marketing USA, Head of the Brazilian Division, and Head of Business Development and Acquisitions. In 1986, he was appointed Commercial Director of Institut Straumann AG. In 1990, following a management buy-out, he created Stratec Medical, of which he was Vice Chairman and CEO. In 1999, following the merger with Synthes USA, he became Vice Chairman and CEO of Synthes-Stratec and held both positions until 2000, when he left the company. He has since assumed various Board of Directors mandates and is involved in private equity financed start-ups and spin-offs. Rudolf Maag has been a member and Chairman of the Board of Directors of Straumann since 2002, and is elected until He is also a director of Geberit AG, and a member of the Board of the combined Chambers of Commerce of the two Basel cantons. Oskar Ronner Swiss (born 1945) Vice Chairman of the Board, Chairman of the Compensation and Nomination Committee Oskar Ronner graduated with an MSc in mechanical and industrial engineering from the Federal Institute of Technology (Zurich) in 1970, a qualification which he complemented with an MBA from Harvard in After wideranging experience in the aircraft engineering field he joined Gebr. Sulzer AG, Winterthur, in 1988 as CEO of the Sulzer Medica Division, at the same time holding the post of President and CEO of Intermedics Inc, Angleton (Texas, USA).

67 Straumann Annual Report 2005 CORPORATE GOVERNANCE From 1990 to 1994, he was Executive Vice President of the Industry Division of Elektrowatt AG, Zurich, and subsequently, until 1998, the company s President and CEO. Between 1994 and 1996 he was also Executive Vice President at Credit Suisse Holding. From 1998 to 2003, he was President and CEO of Siemens Building Technologies AG. Oskar Ronner has been a member of the Board of Directors of Straumann since 2000, and is elected until Other key directorships include Von Roll AG. Dr Sebastian Burckhardt Swiss (born 1954) Member of the Finance and Audit Committee Sebastian Burckhardt began his studies in the fields of economics and law and obtained his doctorate law degree at the University of Basel. He is a qualified lawyer and public notary in Switzerland, and was admitted to the New York bar following studies at New York University Law School. He is a partner at VISCHER, Attorneys-at-law, in Basel. Jürg Morant Swiss (born 1944) Member of the Finance and Audit Committee Jürg Morant s academic background includes medical studies at the University of Bern and business management at the University of St Gallen, reinforced by INSEAD s Senior Executive Program. His business experience started with the Pharma Division of Ciba-Geigy, where he rose to be Group Head Pharma Marketing Services. In 1982, he was appointed CEO of Documed AG, which he took over in He then led the company, renamed MediMedia, through a phase of international expansion and consolidation which culminated in its sale to Havas (part of Vivendi Universal) in He was appointed CEO Europe and Member of the Executive Committee of Vivendi Universal Health, where he was also Member of the Audit Committee. From 2004 to 2005, he was a member of the Executive Management of the Galenica Group. Jürg Morant has been a member of the Board of Directors of Straumann since 2002 and is elected until Other key directorships include Hotel Drei Könige AG. 67 Sebastian Burckhardt has been a member of the Board since 2002 and is elected until Other key directorships include Dolder AG, Petroferm Inc, Cell Int. AG, School for Healing of the Deaf and Persons with Speech Impediments (Riehen, Switzerland). Dominik Ellenrieder Swiss (born 1958) Member of the Compensation and Nomination Committee A graduate of the University of Basel, where he obtained a degree in economics, Dominik Ellenrieder was Head of International Sales at Protek AG (later Sulzer Medica). In 1990, he joined Stratec Medical, where he held a series of managerial positions with increasing responsibility (development, product management, operations of affiliated companies). In 2000, he founded Kuros Therapeutics AG, where he was Chairman of the Board until Dominik Ellenrieder has been a member of the Board of Directors of Straumann since 2001 and is elected until Other key directorships include Medartis AG, Kuros Biosurgery AG, and Sentec AG. Dr h.c. Thomas Straumann Swiss (born 1963) Member of the Compensation and Nomination Committee Thomas Straumann s skills in precision engineering were complemented by his studies at the Basel Management School, from which he graduated in In 1990, he was responsible for restructuring the Institut Straumann AG and he was CEO and Chairman of the Board of Directors until He was Chairman of the Board of Straumann Holding AG until Thomas Straumann has been a member of the Board of Directors of Straumann since 1990 and is elected until Other key directorships include Hotel Drei Könige AG (Chairman), Centervision AG (Chairman), Medartis AG (Chairman), Grand Hotel Bellevue (Chairman), Tschudin+Heid AG (Deputy Chairman), Member of the Board of Directors and Board of Trustees of ITI, and of Von Roll Holding Ltd.

68 Straumann Annual Report 2005 CORPORATE GOVERNANCE 68 Executive Management team in 2005 (left to right): Sandro Matter, Dieter Lipp, Martin Gertsch, Marianne Bürgi, Gilbert Achermann, Thomas Jaberg, Wolfgang Becker, Russell Olsen. Executive Committee Straumann s Executive Committee comprised eight members in At the beginning of 2006, Dr Patrick Louvel joined Straumann as Executive Vice President Sales Asia/ Pacific & Distributors. This position was held by Thomas Jaberg until the end of 2005, when he left the Executive Committee to assume new responsibilities with Straumann in the US, strengthening Training & Education and ITI relationships in North America. In the second quarter of 2006, Marco Gadola will join Straumann from the Hero Group as new CFO and Executive Vice President Finance. In 2005, this position was held by Martin Gertsch, who left the company at the end of January Gilbert Achermann Swiss (born 1964) President and Chief Executive Officer Gilbert Achermann holds a degree from the HWV business school in St Gallen and an Executive MBA from IMD in Lausanne. His extensive experience in the field of corporate finance and investment banking, in particular capital restructuring, was gained through a series of senior positions both in Switzerland and the US, in the two Swiss banks which merged to form UBS. Mr Achermann joined Straumann from UBS in 1998 as Chief Financial Officer. He was appointed CEO in Gilbert Achermann is a member of the Board of Directors and Board of Trustees of the academic network International Team for Implantology (ITI). Wolfgang Becker German (born 1966) Sales Europe Wolfgang Becker holds a number of business school diplomas including that of St Gallen Management Center. He held a series of managerial positions of increasing responsibility in Straumann s German subidiary. He joined the company in 1986, becoming Head of Human Resources in 1991, rising to Head of Marketing in 2000, and General Manager for Germany in He was appointed to his present position in September 2005.