Straumann posts net revenue growth of 18% in local currencies (14% in CHF) over the first nine months of 2008

• Group achieves double-digit net revenue growth (+11%) in local currencies (l.c.) in third quarter despite deterioration in economic environment
• Strong growth continues in North America in third quarter (+22% l.c.), lifted by Biora reintroduction in the US and new Bone Level Implant range
• Europe posts double-digit growth in third-quarter (+10% in l.c.) constrained by softer performance in Iberia
• Continuing transition of business in key Asian markets; introduction of latest generation products and technologies needed to achieve full turnaround
• New high strength material, Roxolid™, and impressive scientific results presented at EAO

Net revenue figures

Nine months

Third Quarter

Basel, 30 October 2008: In the first 9 months of 2008, Straumann’s net revenue climbed 18% in l.c. (14% in Swiss francs) to CHF 589 million. Despite the tough economic environment, the Group achieved double-digit growth in local currencies in the third quarter, outpacing the market. The overall performance was driven by sustained growth in North America, and contributions from Straumann’s new generation Bone Level implant, the SLActive surface technology, and the CAD/CAM prosthetics business. 14% points of revenue growth in local currencies were generated organically in the first nine months, while the continuing strength of the Swiss franc against major currencies resulted in a negative foreign exchange rate effect of roughly 4%.

Continued strong growth in North America

In the first nine months, North American revenues grew 19% in l.c. to CHF 120 million, or 20% of Group net revenue. The increase in Swiss francs was just 6%, reflecting the overall weakness of the dollar against the franc. Net revenue growth increased in the third quarter by 22% in l.c., lifted by the reintroduction of Straumann’s regenerative products in the US and the success of the Bone Level Implant range. A strong presence at the American Academy of Periodontology (AAP) meeting in Seattle in early September helped to support these initiatives.

Europe posts solid performance

In Europe, where Straumann is the dental implant market leader, the Group posted a solid performance over the first nine months as net revenues climbed 16% in l.c. or 13% in Swiss francs to CHF 378 million. This corresponds to 64% of Group net revenue. Double-digit growth was achieved in the third quarter (+10% l.c.), but was constrained by a softer performance in Iberia. Apart from this, a number of countries still achieved double-digit revenue growth of more than 20%.

Asia/Pacific and RoW boosted by newly acquired subsidiaries

While nine-month revenues in the Asia/Pacific region increased 34% in l.c. (31% in CHF) to CHF 73 million (12% of Group), third-quarter revenue decreased by comparison with the same period of 2007, reflecting the discontinuation of the acquisition effects of the Japanese and Korean distributors at the end of June and July respectively. While Straumann has made progress towards turning these businesses around, accelerated growth will depend on the introduction of new products and technologies, which are still awaiting regulatory clearance.

In the rest of the world, which continues to contribute 3% of Group net revenues, 9-month revenue rose 17% to CHF 18 million, on top of a high comparative basis in 2007.

New material presented

The 17^th Annual Scientific Meeting of the European Association for Osseointegration (EAO) in Warsaw, Poland, provided an excellent platform for Straumann to present a new material that could make dental implants smaller, stronger and safer. Called Roxolid, the new material is an alloy of titanium and zirconium and is currently undergoing clinical trials in six countries. Preliminary (6-12 month) clinical observations¹ showed very promising implant survival rates, while exciting results from a preclinical study demonstrated that Roxolid integrated with bone better than pure titanium².

Pending further positive findings from the broad ongoing clinical program and regulatory approvals, Roxolid implants are expected to become available in initial markets in the course of 2009.

SLActive outperforms

At the same meeting, the results of a preclinical head-to-head study were presented, which compared Straumann’s third generation implant surface on titanium implants with a leading competitor surface (TiUnite^®3) at three time points (10 days, 3 and 6 weeks) after implant placement². At each time, SLActive demonstrated higher mean shear strength values (indicative of surface osseointegration), which were statistically significant at both 3 and 6 weeks. The investigators concluded that SLActive was more effective in enhancing interfacial shear strength.

Straumann gains ‘share of voice’ through ITI

Straumann’s academic partner, the ITI, also helped to raise Straumann’s share of voice in the third quarter. In addition to the global publication of its 3^rd Treatment Guide, the ITI hosted its largest ever South American congress in São Paulo, which was attended by 1200 participants and featured 32 key opinion leader speakers.

FDA inspection in Switzerland

In September, Straumann’s facilities in Basel and Villeret were subject to a routine inspection by the US Food and Drug Administration. No observations have been reported to the company, although official written confirmation is still pending.

Outlook (barring further unforeseen circumstances)

Global demographic trends, low penetration rates and high substitution potential continue to make the market for implant dentistry highly attractive in the mid and long term. However, the exceptional current economic environment makes near term forecasts difficult. Taking this and a sluggish October into account and on the basis of softer growth in the third quarter than in the first six months, Straumann foresees full-year net revenue growth of around 15-17% in local currencies.

Although efficiency improvements and cost control management will contribute to profit margins, they will not fully offset the effect of softer topline growth combined with amortization related to acquisitions and unfavourable foreign exchange rates. As a result, operating and net profit margins are expected to reach 25% and 20% respectively.

¹Barter S et al. Clinical data presented at the 17th Annual Scientific Meeting of the European Association for Osseointegration (EAO), Warsaw, September 2008
²Gottlow J et al. Preclinical data presented at the 23rd Annual meeting of the Academy of Osseointegration (AO), Boston, February 2008, and at the 17th Annual Scientific Meeting of the European Association for Osseointegration (EAO), Warsaw, September 2008
³Registered trademark of Nobel Biocare

Disclaimer
This release contains certain "forward-looking statements", which can be identified by the use of terminology such as "will", "awaiting", "could", "expected", "become available", "pending", "foresees", "forecast", "outlook", 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 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, and the Group’s ability to realize its expansion projects in a timely manner. 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 release 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.