27/02/2024 - Straumann Holding AG: 2023 Annual Report

Straumann Group annual report 2023

Contents

Contents

Straumann Group's annual report for online users annualreport.straumann.com

03 Highlights

06 Letter from the Chair and CEO

1. Company profile
2. About Straumann Group

16 Strategy for sustainable growth

1. Business development
2. Business performance

39 Share performance

41 Feature story

Customers are our inspiration

1. Sustainability report
2. Letter from the Chair of the STIC

and the Chair of the ARC

48 Introduction

1. Risk management approach

1. Advancing oral care

1. Empowering people

1. Caring for the planet and society

1. Acting with responsibility

127 Independent assurance report on non-financial KPIs in 2023 annual report

1. Corporate governance report
2. Letter from the Chair of the Board
3. Principles

1. Group structure and shareholders
2. Capital structure
3. Board of Directors

1. Executive Management Board

1. Shareholders' participation rights
2. Compensation, shareholdings and loans

1. Changes of control and defense measures
2. External auditors
3. Information policy
4. Quiet periods

1. Compensation report
2. Letter from the Chair of the HRCC

1. Compensation governance and regulations

1. Compensation principles

1. Group compensation framework

172 2023 Board of Directors and Executive Management Board compensation

1. Approval of compensation
2. Other mandates of Board of Directors
   and Executive Management Board members

179 Report of the statutory auditor

on the audit of the compensation report

1. Financial report Straumann Group
2. Alternative performance measures

1. Consolidated statement of financial position
2. Consolidated income statement

1. Consolidated statement of comprehensive income
2. Consolidated cash flow statement
3. Consolidated statement of changes in equity
4. Notes to the consolidated financial statements

1. Audit report - consolidated financial statements

1. Financial report Straumann Holding
2. Balance sheet
3. Income statement
4. Notes to the financial statements

1. Proposal of the Board of Directors for
   the appropriation of the available earnings
2. Audit report - financial statements Straumann Holding AG

1. Appendix
2. GRI and SASB Content Index

1. CO 964 Index

1. TCFD Index
2. Points to note

Highlights

Straumann Group annual report 2023

5 Highlights

Key financial performance

Letter from the Chair and CEO Company profile

Business development

Feature story

Customers are our inspiration Sustainability report Corporate governance report Compensation report Financial report Straumann Group Financial report Straumann Holding Appendix

Cash flow and investments
more on p. 30
in CHF million
600					503.9
500
400					180.3
300
200					189.4
100
0	2019	2020	2021	2022	2023

Operating cash ow

Capital expenditure

Acquisitions and participations

Return
more on p. 37
in % as reported under IFRS Accounting Standards
50
40
30					23.7
20					12.8
10
0	2019	2020	2021	2022	2023
	Return on equity (ROE)
	Return on capital employed (ROCE)

Total shareholder return

more on p. 39

in %

100
80
60
40				29.2
20				6.4
0
-20
-40
-60
2019	2020	2021	2022	2023

Straumann Group

SMIM Total Return Index

2500				2 411.8	700
2000					600
					500
1500					400
1000					300
					200
500					100
0					0
2019	2020	2021	2022	2023

				606.4
				441.2
2019	2020	2021	2022	2023

Market capitalization

in CHF on 29 December 2023

21.6bn

Highlights

Letter from the Chair and CEO

Company profile

Business development

Feature story

Customers are our inspiration Sustainability report Corporate governance report Compensation report Financial report Straumann Group Financial report Straumann Holding Appendix

In the face of macroeconomic developments as well as geopolitical tensions, the team delivered on customer expectations and drove an organic growth of 9.8% and CHF 2.4 billion in revenue. The team's spirit and agility made up for the significant impacts on the business from currency headwinds which lowered revenue by CHF 145 million and led to 3.9% growth in Swiss francs. At the same time, we were able to maintain a high profitability of 25%, compensating for 200 basis points of currency headwind.

Our relentless team efforts in all functions and regions led to remarkable 9.8% organic growth

Our market share is growing year by year, and we are expanding our presence in key regions and segments. We have seen strong demand for our solutions, especially in implantology, and therefore keep on investing heavily in operations and infrastructure to meet the increasing volumes. We were able to win many new customers and believe that our market share in implantology increased from approximately 30% to around 32%, while we estimate that our global addressable market grew to above CHF 19 billion in 2023.

Innovation is the cornerstone of our business, and we want to provide solutions that meet clinician and patient needs, exceeding expectations

2023 was a year of numerous innovations across many business areas which also emerged based on customer feedback over the years. At the International Dental Show (IDS) in March, we were able to present an extensive range of innovations such as SmileCloud, Falcon, and the new intraoral scanner (IOS) software as well as our vision for our digital platform Straumann AXS. Another highlight in the implantology arena was the pre-launch of Straumann iExcel, a new high-performance premium implant system that provides clinicians with greater versatility and simplicity in their implant treatments and includes the new C-line with an improved BLT and for completion,

a tissue-level option.

Our latest premium Straumann iExcel solution was developed over the years based on several customer feedbacks

In 2023, we acquired GalvoSurge, a manufacturer of medical devices for optimal cleaning of dental implants affected by peri-implantitis, and AlliedStar, an intraoral scanner technology company located in China. On top of that, many new developments and software improvements on the orthodontics side have helped strengthen the value proposition of our solutions and increased our capability to treat more complex cases.

More than 11 200 education activities worldwide, with 28% in low- to middle-income countries

It is essential to innovate and combine this with the necessary education activities to ensure our solutions reach our customers and ultimately patients. Investing in education continues to be part of our core business, as knowledge and skills are essential for our success and customer satis- faction. We organized and participated in various events and activities, such as IDS, Esthetic Days, webinars, podcasts, and online courses, to share knowledge and exchange the latest insights and best practices in the dental field with our customers.

Last year was also a year of transformation. We adjusted our brand strategy to reflect our strategic compass and enhance the distinctiveness of our brands. This changed how we present ourselves at customer events which was very well perceived by the different customer communi- ties.

Highlights

Letter from the Chair and CEO

Company profile

Business development

Feature story

Customers are our inspiration Sustainability report Corporate governance report Compensation report

Another highlight was the clear definition of our digital strategy along the clinician journey, to offer a unique and seamless customer experience, from education and diagnosis to treatment and follow-up. The digital strategy also includes our internal digital transformation which will help improve our processes and workflows and leverage the power of data and analytics. Above all, we do not see digital transformation to be a technical step up only within the organization, but moreover a mindset play. This is why we brought to life an internal campaign called EDGE!UP which should give people a channel to play and experiment with new technologies, learn new skills and grow together by sharing expertise.

lishing a critical size and become the largest doctor-leddirect-to-consumer-marketing orthodontics business in Europe, we shift to a sustainable organic growth strategy starting to prioritize profitability over growth. Our other company Nihon, or the Anshin brand in Japan, is performing very well and pilots with a similar business model in implantology in other countries are under way.

The acquisition of DrSmile and Nihon will enable us to raise awareness of dental solutions and offer more ­accessible and affordable solutions, while maintaining the highest quality and safety standards.

In 2023, we not only achieved strong financial results and market growth, but we also made significant progress in our sustainability agenda. We are proud to share with you some of the highlights and achievements that demonstrate our commitment to creating value for our stakeholders.

Strong advancements in the area of sustainability

Financial report Straumann Group Financial report Straumann Holding Appendix

We focus on our player-learner culture - on a personal and professional level - to maintain a competitive edge

In 2020, we made a strategic decision to build a consumer presence and acquired DrSmile, a leading provider of clear aligners in Europe, followed by the acquisition of Plus Dental in 2022. With the end of the contracts in 2023, the founders transitioned out and the new management took over. Given the challenges of such consumer businesses, we are closely monitoring the developments and learning to ensure the right approach in combination with our clinician business. In light of the macroeconomic environment, consumer behavior is changing, and demand from this particular target group for esthetic treatments seems to soften. Now that we have achieved our goal of estab-

We have strengthened our presence in Europe with new customers such as the biggest DSO in Italy

In 2023, we further strengthened our strategic customer relationships with dental service organizations (DSOs) to provide them with customized and comprehensive ­solutions and services. We have defined an end-to-end ambition for our Orthodontics 360 solution along a digitalized and integrated aligner workflow and more than 100 practices implemented the practice management software CareStack.

We continue to collaborate with other industry players, such as universities, research institutes, associations, the ITI and NGOs, to advance the dental profession and to contribute to the social and environmental causes that we care about.

We believe that sustainability is not only our obligation as a responsible corporate citizen but also a strategic advan- tage. We do what we believe is the right thing to do, what is needed for business continuity and what is expected from us by our employees, customers and shareholders. That is why we have set ambitious goals to contribute to the wellbeing of our stakeholders and reduce our environmental impact.

Our culture has been instrumental in our success and attracts new and diverse talent to join the organization