Geschäftsbericht 2019 by COLTENE Marketing

Der LĂśsungsanbieter GeschĂ¤ftsbericht 2019

COLTENE wird zum

Lösungsanbieter

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Kernelemente COLTENE Strategie 2019 bis 2021

COLTENE etabliert sich als Anbieter umfassender Lösungen am Puls seiner Endkunden, den Zahnärztinnen und Zahnärzten – und nicht nur als reiner Produktanbieter. Verschiedene Massnahmen sollen diese Positio nierung kontinuierlich weiter schärfen. Mehr zu den zugehörigen Strategie elementen lesen Sie auf den Fokusseiten 16 bis 21. Doch schon heute ist die COLTENE Gruppe in der gesamten Wertschöpfungskette der Dental industrie tätig und lässt die Bedürfnisse der Zahnärztinnen und Zahnärzte auf vielfältige Weise in ihre Produkte und Dienstleistungen einfliessen. Das zeigt sich bei einem Blick auf die unterschiedlichen Abteilungen und Aufgaben, in denen die COLTENE Mitarbeitenden weltweit tätig sind. Eine Reportage dazu finden Sie zwischen den einzelnen Kapiteln in diesem Bericht. Sie zeigt den Weg der COLTENE Produkte von der Entwicklung bis zur Anwendung am Patienten bildlich auf.

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Komplettes Produktportfolio

Fokus auf den Endkunden

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Regulierungskom petenz wird zum Wettbewerbsvorteil

Synergien ausschöpfen

Inhalt Informationen zur COLTENE Aktie Highlights 2019 Vorwort Der LĂśsungsanbieter Operativer RĂźckblick und Finanzkommentar Produktion und Umwelt

22 26

Corporate Governance Compensation Report

32 58

6 8 10 16

Financials 71 Important Addresses

106

Produktübersicht Die COLTENE Gruppe gliedert ihr umfassendes Sortiment in die drei Produktgruppen Infektionskontrolle, Zahnerhaltung und Behandlungseffizienz.

Infektionskontrolle

27 %

COLTENE ist ein Systemanbieter für die Instrumenten-Wiederaufberei

tung sowie die Oberflächenreinigung und -desinfektion. Die umfas sende Produktgruppe beinhaltet State-of-the-Art-Ultraschallreinigungs geräte und -lösungen, Washers, Thermodesinfektionsgeräte und Autoklaven sowie hochwertige Reinigungs- und Desinfektionstücher für alle Oberflächen in der Zahnarztpraxis.

Zahnerhaltung Restauration, Endodontie

32 %

Mit restaurativen und endodontischen Systemen zur Bewahrung von vitaler und nichtvitaler Zahnhartsubstanz bietet COLTENE vielfältige Produkte für die nachhaltige Zahnerhaltung von der Wurzel bis zur Krone an. Das abgestimmte Sortiment umfasst hochwertige Adhäsive, Komposite, Wurzelkanalinstrumente, Spüllösungen samt Zubehör sowie Materialien für die Obturation und Versiegelung von Wurzel kanälen.

Behandlungseffizienz Prothetik, Rotierende Instrumente, Behandlungshilfen

41 %

Die Produktgruppe Behandlungseffizienz umfasst ein breites Angebot an Hilfsmitteln zur Effizienzsteigerung in der Zahnarztpraxis. Dazu gehören hochpräzise Abformmaterialien, qualitativ hochwertige Produkte für die Wundversorgung und Watteerzeugnisse, effiziente Absaugkanülen und leistungsstarke Rotierende Instrumente.

Fakten und Zahlen COLTENE ist ein international tätiges Unternehmen für die Entwicklung, Herstellung und den Vertrieb

von zahnmedizinischen Verbrauchsgütern und Kleingeräten in den Bereichen Infektionskontrolle, Zahnerhaltung und Behandlungseffizienz. Die Gruppe verfügt über modernste Produktionsstätten in Brasilien, Deutschland, Frankreich, Kanada, der Schweiz und in den USA. Zudem ist COLTENE mit eigenen Vertriebsorganisationen in wichtigen Schlüsselmärkten wie Nordamerika, Europa, China, Indien und Brasilien präsent. Die COLTENE Gruppe beschäftigt weltweit 1414 Mitarbeitende.

5-Jahresübersicht 2015–2019 (in CHF Millionen) 2015–2017: IFRS, ab 2018: Swiss GAAP FER

Nettoumsatz

Reingewinn

2015 2016 2017 2018 2019

154 , 5 160 ,7 168 , 0 204 , 0 273 , 8

13,3

Betriebserfolg (EBIT)

Free Cash Flow

2015 2016 2017 2018 2019

–90,8 2015 2016 2017 2018 2019 10,7 13,7 17,1 16,0

20,4

23,3

25,5

25,4

32,0

17,3

19,1

17,0 20,0

Nettoumsatz nach Regionen in % 2019 2018

45,6

35,9

11,9

6,6

Nordamerika

37,2

Lateinamerika

8,2

EMEA

41,8

Asien

12,8 5

Informationen zur COLTENE Aktie Aktienkapital und Kapitalstruktur 2019

2018

2017

2016

0.10

0 . 10

5 975 580

4 219 000

13,34 %

29,20 %

14,00 %

16 , 30 %

12 , 53 %

3 265

3 700

5 100

5 975 566

5 972 315

4 219 000

4 215 300

4 213 900 422

Nennwert pro Aktie (CHF ) Anzahl Namenaktien Dispobestand Anzahl eigene Aktien Anzahl dividendenberechtigte Aktien Ordentliches Kapital (CHF 1000 )

2015

598

422

Bedingtes Kapital (CHF 1000 )

Genehmigtes Kapital (CHF 1000 )

5 975 580

4 219 000

Total Stimmrechte

Börsenkennzahlen pro Aktie CHF

2019

2018

2017

2016

2015

103.60

124 . 00

103 . 50

75.50

83 . 65

Börsenkurs tiefst

72.00

80 . 00

74 . 50

57.00

54 . 00

Jahresendkurs

88.80

84 . 30

94 . 90

74.05

60 . 90

Durchschnittliches Volumen / Handelstag (Stück)

5 442

4 084

4 324

2 728

5 044

531

504

400

312

257

CHF

2019

2018

2017

2016

2015

Reingewinn pro Aktie – unverwässert

3 . 35

3 . 61

4 . 52

4 . 10

3 . 16

Reingewinn pro Aktie – verwässert

3 . 35

3 . 61

4 . 52

4 . 10

3 . 16

Betrieblicher Cash Flow pro Aktie

3 . 98

4 . 12

5 . 19

5 . 38

4 . 31

Börsenkurs höchst

Börsenkapitalisierung in CHF Mio. (31 .12 .)

Kennzahlen pro Aktie1

1 . 79

–15 . 20

3 . 80

4 . 05

3 . 25

Ausschüttung pro Aktie

3 . 00 2

3 . 00

2 . 70

2 . 20

Eigenkapital pro Aktie

15 . 26

14 . 76

28 . 85

26 . 63

24 . 10

Free Cash Flow pro Aktie

1 2015 – 2017:

IFRS , ab 2018: Swiss GAAP FER . des Verwaltungsrats an die Generalversammlung vom 2. April 2020: Ausschüttung von CHF 3.00 pro Aktie aus Kapitaleinlagereserven mit Auslandbezug und ohne Berücksichtigung der eigenen Aktien.

2 Antrag

Entwicklung Aktienkurs (03.01.2017 bis 14.02.2020) CLTN Namenaktien/Swiss Performance Index (SPI) angepasst COLTENE

140

SPI

120 100 80 60 40 20 03.02.20

03.01.20

03.12.19

03.11.19

03.10.19

03.09.19

03.08.19

03.07.19

03.06.19

03.05.19

03.04.19

03.03.19

03.02.19

03.01.19

03.12.18

03.11.18

03.10.18

03.09.18

03.08.18

03.07.18

03.06.18

03.05.18

03.04.18

03.03.18

03.02.18

03.01.18

03.12.17

03.11.17

03.10.17

03.09.17

03.08.17

03.07.17

03.06.17

03.05.17

03.04.17

03.03.17

03.02.17

03.01.17

Der Wert einer COLTENE Aktie stieg im Jahr 2019 um 5,3 % von CHF 84.30 auf CHF 88.80. COLTENE schüttete im Berichtsjahr Anfang Mai eine Dividende von CHF 3.00 pro Aktie aus. Die Gesamtperformance inkl. Dividende im Jahr 2019 betrug 8,9 %.

Aktionärsstruktur 1 Per 31. Dezember 2019 waren 2203 Aktionäre (2011) im Aktienregister eingetragen. Die folgenden Aktionäre hielten am Jahresende 3 % oder mehr des ausstehenden Aktienkapitals der COLTENE Holding AG: 31 .12 .2019

31 .12 .2018

Huwa Finanz- und Beteiligungs AG

22,18 %

21 , 98 %

Arthur Zwingenberger (Vorjahr: Arno Holding S.à.r.l.)

17,20 %

17 , 20 %

Rätikon Privatstiftung

10,18 %

10 , 02 %

Tweedy, Browne Company LLC

4,21 %

4 , 80 %

Credit Suisse Asset Management Funds AG

3,49%

3 , 75 %

Robert Heberlein

3,46 %

3 , 40 %

UBS Fund Management (Switzerland) AG

3,26 %

3 , 49 %

Für weitere Details siehe Seite 33 im Teil Corporate Governance dieses Geschäftsberichts.

Kontaktadresse Gerhard Mahrle, CFO COLTENE Holding AG, Feldwiesenstrasse 20, 9450 Altstätten Telefon +41 71 757 54 37; E-Mail investor@coltene.com Aktienregister Karin Wagner, ShareCommService AG Telefon +41 44 809 58 52; E-Mail karin.wagner@sharecomm.ch Kalender Medien- und Analystenkonferenz zum Geschäftsjahr 2019 5. März 2020 Generalversammlung 2020 2. April 2020 Veröffentlichung Halbjahresbericht 2020 7. August 2020 Medien- und Analystenkonferenz zum Geschäftsjahr 2020 5. März 2021 Veröffentlichung Jahresbericht 2020 5. März 2021 Generalversammlung 2021 31. März 2021

Highlights 2019

274 Mehr Umsatz

Im Berichtsjahr 2019 konnte die COLTENE Gruppe ihren Nettoumsatz noch einmal um rund einen Drittel steigern.

1414

Neuer Mitarbeiterrekord Die neue COLTENE Gruppe beschĂ¤ftigt rund 1400 Mitarbeitende an Ăźber 10 Standorten weltweit.

171

Ein umfassendes Produktsortiment Die Zahl der COLTENE Produktlinien ist mit den Akquisitionen weiter gewachsen, das Sortiment ist so umfangreich wie nie.

1500 Personentage fĂźr die Zukunft

In die Aktualisierung der Zertifizierungen unter anderem nach der neuen Medical Device Regulation (MDR) hat COLTENE 2019 viel Zeit investiert â€“ und damit sichergestellt, dass sie weiterhin alle ihre Produkte weltweit verkaufen kann.

Vorwort Sehr geehrte Aktionärinnen, sehr geehrte Aktionäre Die COLTENE Gruppe hat im Berichtsjahr 2019 den geplanten Wachstums schritt vollzogen. Mit der Übernahme von SciCan und Micro-Mega im Herbst 2018 hat sie ihre Position im Dentalmarkt markant ausgebaut. Die neue COLTENE Gruppe hat 2019 die Vorbereitungen getroffen, um Syner gien aus dem Zusammenschluss zu generieren. Dazu hat das Unternehmen Arbeitsabläufe, Systeme und Dateninfrastruktur in der gesamten Gruppe weiter harmonisiert und optimiert. Die von COLTENE genutzten Software anwendungen werden dabei schrittweise auf Micro-Mega und SciCan ausgerollt. Die Verkaufsteams wurden im Zuge der Konsolidierung zusam mengeführt und die Schnittstellen zu den Kunden definiert. Im Marketing hat COLTENE die gemeinsamen Sortimente auf die wichtigsten Prozesse in den Zahnarztpraxen abgestimmt: Instrumentenaufbereitung, Zahnrestau ration und Wurzelkanalbehandlung. Und in der Qualitätssicherung steuert COLTENE künftig die Produktlebenszyklen konzernweit mit einer neuen, einheitlichen Software. Globales Team Der Zusammenschluss von COLTENE, MicroMega und SciCan führte zu einem markanten Anstieg der Beschäftigten von rund 900 auf über 1400Mitarbeitende. Erste Schritte zu einer gemeinsamen COLTENE Kultur sind getan. So verschieden die Herkunft und Prägung der diversen unter dem Dach von COLTENE operierenden Firmen und Mitarbeitenden auch ist, haben sie sich im Jahr 2019 zu einer neuen, schlagkräftigen Dentalgruppe formiert. Verkauf und Marketing wurden reorganisiert, womit ein homogenes Auftreten auf dem Markt und auf den Dentalmessen gewährleistet ist.

COLTENE positioniert

sich mehr denn je als Lösungsanbieter.

Synergien Nun gilt es, aus den Synergien zusätzlichen Kundennutzen und Optimie rungen zu schaffen. Die Umsatz- und Kostensynergien aus der Kombination von COLTENE, Kenda, SciCan und Micro-Mega voll auszuschöpfen, bleibt im kommenden Jahr der strategische Schwerpunkt der COLTENE Gruppe. Dabei will COLTENE ihr Leistungsangebot noch stärker auf ihre Endkunden, die Zahnärztinnen und Zahnärzte, ausrichten. Sie positioniert sich mehr denn je als Lösungsanbieter, der nicht nur eine breite Palette an dentalen Verbrauchsmaterialien und Geräten, sondern auf die Behand lungsprozesse abgestimmte Produkte anbietet, die dem Zahnarzt ein sicheres und effizientes Arbeiten erlauben. Mehr zu den strategischen Schwerpunkten 2019 bis 2022 der COLTENE Gruppe lesen Sie auf den Fokusseiten 16 bis 21.

Nick Huber, Präsident des Verwaltungsrats

Martin Schaufelberger, CEO

Integration und neue regulatorische Vorgaben wirken sich auf das Ergebnis aus Im Berichtsjahr steigerte die COLTENE Gruppe ihren Nettoumsatz um 34,2 %, von CHF 204,0 Mio. auf CHF 273,8 Mio., wobei die Umsatzzu nahme grösstenteils auf die Akquisitionen von SciCan und Micro-Mega zurückzuführen ist. Währungs- und akquisitionsbereinigt steigerte die COLTENE Gruppe ihren Umsatz um 1,9 %. Aller dings vollzog COLTENE den Wachstumssprung in einem anspruchsvollen Umfeld. 2019 war ein schwieriges Jahr für die Dentalindustrie. Nach Ein schätzung des Unternehmens lag das Marktwachs tum mit rund 1,5 % unter dem langfristigen Trend. Und der starke Schweizer Franken hatte insgesamt einen negativen Effekt auf den Nettoumsatz von CHF 2.7 Mio. oder – 1,0 %. Die Integration des Vertriebs von Micro-Mega in die COLTENE Gruppe verlief nicht reibungslos. Dies führte zu einem Rückgang der Verkäufe im

Die Kosten- und Umsatz synergien aus der Kombination von COLTENE, Kenda, SciCan und Micro-Mega voll auszuschöpfen, bleibt strategischer Schwerpunkt der COLTENE Gruppe. 11

Endodontie-Bereich. In den USA konnten grössere Gerätebestellungen nicht rechtzeitig ausgeliefert werden. Vor diesem Hintergrund entspricht das Ergebnis der COLTENE Gruppe für das Geschäftsjahr 2019 nicht den selbst gesteckten Erwartungen.

Im Berichtsjahr steigerte die COLTENE Gruppe ihren Nettoumsatz um 34,2 % von CHF 204,0 Mio. auf CHF 273,8 Mio.

Die Integration hatte Einmalkosten im Qualitäts management, in der Informatik, für Beratungen und Personal-Sonderkosten zur Folge, die höher als erwartet ausfielen. Das Betriebsergebnis (EBIT) lag bei CHF 32,0 Mio. (Vorjahr: CHF 25,4 Mio.) respektive bei 11,7 % des Nettoumsatzes (Vorjahr: 12,4 %). Ohne die genannten Aufwände von insgesamt CHF 4,6 Mio. hätte die EBIT-Marge 13,4 % betragen.

Darin enthalten sind auch Einmalaufwände für die Einführung der ab Mai 2020 gültigen Medical Device Regulation (MDR), für Anpassung des Qualitätsmanagementsystems und für klinische Studien bestehender Produkte. Die Herstellung für den wichtigen Produktebereich Abform materialien in Altstätten wurde Anfang 2020 gemäss den neuen euro päischen regulatorischen Vorschriften erfolgreich zertifiziert. COLTENE ist damit eine der ersten Dentalfirmen, die das MDR-Zertifikat erhalten hat. Die dabei gewonnenen Erfahrungen werden die anstehenden Zertifizierun gen an den übrigen Produktionsstandorten wesentlich erleichtern. Die COLTENE Gruppe hat dadurch sichergestellt, dass sie alle ihre Produkte weiterhin über die Schweizer Landesgrenzen hinaus verkaufen kann. Stabile Dividende Der Verwaltungsrat wird den Aktionären aufgrund der robusten Ertrags lage und der mittelfristig positiven Aussichten wiederum eine Dividende von CHF 3.00 pro Aktie vorschlagen. Diese soll vollständig aus Kapital einlagereserven und damit für natürliche Personen mit Wohnsitz in der Schweiz steuerfrei ausbezahlt werden. Veränderungen in der Geschäftsleitung Seit dem 1. Januar 2020 ergänzen John Westermeier und Martin Schlüter die Gruppenleitung von COLTENE. John Westermeier, Geschäftsführer von SciCan, ist für die Verkaufs- und Marketing kommunikation in Nordamerika zuständig. Die neu geschaffene Funktion trägt der seit der Akquisition von SciCan und Micro-Mega noch grösseren Bedeutung des nordamerikanischen Marktes für COLTENE Rechnung. Christophe Loretan, bisher weltweit für den Verkauf zuständig, übernimmt neu die Verantwortung für den Verkauf und die Marke tingkommunikation für die europäischen Märkte sowie für die Wachstumsregion Ferner Osten und Lateinamerika. Martin Schlüter, Vice President Research & Development und Innovation, hat die

Die Produktion für Abformmaterialien wurde Anfang 2020 gemäss den neuen europäischen regulatorischen Vorschriften zertifiziert. 12

gruppenweite Leitung des Bereichs Forschung & Entwicklung im Zuge der Pensionierung von Werner Mannschedel übernommen. Die übrige Besetzung des Gruppenmanagements bleibt unverändert. Anpassung der Vorjahreswerte auf Swiss GAAP FER Per 1. Januar 2019 hat COLTENE die Rechnungslegung von IFRS auf Swiss GAAP FER umgestellt. Der neue Rechnungslegungsstandard zeichnet sich durch geringere Komplexität und Kosten aus und entspricht den Bedürfnissen eines international tätigen, mittelgrossen Unternehmens wie COLTENE. Die Werte des Vorjahres wurden im vorliegenden Geschäftsbericht angepasst, um die Vergleichbarkeit der Perioden sicherzustellen.

Die Gruppe hält mittel fristig an einer EBIT-Marge von 15 % und einem leicht über dem Markt liegenden Umsatzwachstum fest.

Ausblick Verwaltungsrat und Management blicken zuver sichtlich in die Zukunft. Die neue, grössere COLTENE ist gut positioniert, um Herausforderungen wie dem intensiven Wettbewerbsumfeld oder der wachsenden Digitalisierung zu begegnen. Die zunehmenden Regulierungen in der Dentalbranche werden vor allem kleinere Anbieter vor grosse Herausforderungen stellen und es etablierten Unternehmen erlauben, die gestiegenen Kosten mit Preisanpassungen teilweise zu kom pensieren. Die COLTENE Gruppe wird zudem ihr Portfolio weiter stärken. Erste neue Produkte kommen 2020 auf den Markt und unterstützen das Wachstum und die Realisierung der geplanten Synergien. Die Gruppe hält mittelfristig am Ziel einer EBIT-Marge von 15 % und einem leicht über dem Markt liegenden Umsatzwachstum fest. Dank Im Namen des Verwaltungsrats und der Konzernleitung bedanken wir uns herzlich bei unseren Mitarbeitenden. Dank ihrem grossen Einsatz haben wir in den letzten zwölf Monaten das Fundament zur neuen COLTENE Gruppe gelegt. Wir sind uns einig im Ziel, den Zahnärztinnen und Zahnärzten effiziente und sichere Lösungen und Produkte für den täglichen Einsatz anzubieten – aus einer Hand, mit einem gemeinsamen Qualitätsverständnis. Schliesslich geht unser Dank an die Kunden, Geschäftspartner und Aktionäre für ihr Vertrauen in unser Unternehmen, in den Verwaltungsrat und das Management. Wir werden alles daran setzen, diesem Vertrauen auch in Zukunft gerecht zu werden.

Nick Huber Präsident des Verwaltungsrats

Martin Schaufelberger CEO

Forschung & Entwicklung

Dr. Benjamin Ezeh, Manager R&D Endodontics, prĂźft am Coltene Standort in AltstĂ¤tten die Reinheit von neuen Rohstoffen.

Forschung & Entwicklung

Wir entwickeln Produkte für die Praxis von morgen Insgesamt rund 100 Mitarbeitende tragen an den Standorten Cuyahoga Falls (Ohio, USA), Toronto (Kanada), Langenau (Deutschland), Besançon (Frankreich) und Altstätten (Schweiz) zur Innovationskraft von COLTENE bei und stellen sicher, dass die Gruppe ihren Kundinnen und Kunden Produkte auf dem neusten Stand der Technik bieten kann. Um von Anfang an den Ansprüchen aus der Praxis gerecht zu werden, steht das Forschungsund Entwicklungsteam in stetigem Kontakt zu praktizierenden Zahnärzten, Dentalspezialisten und Meinungsführern.

Der Lösungsanbieter Von einzelnen Produkten und Reparaturen hin zu umfassenden Leistungen auf Sortiments- und Dienstleistungsebene: COLTENE positioniert sich mehr denn je als Lösungsanbieter. Vier Strategie elemente stärken diese Positionierung. Erste Massnahmen hat COLTENE bereits realisiert, weitere sollen bis 2021 umgesetzt werden:

Kernelemente COLTENE Strategie 2019 bis 2021

Komplettes Produktportfolio

Fokus auf den Endkunden

Synergien ausschรถpfen

Regulierungskompetenz wird zum Wettbewerbsvorteil 17

Strategieelement 1 Komplettes Produktportfolio für die wichtigsten Prozesse in der Zahnarztpraxis Mit der Akquisition von Kenda, SciCan und Micro-Mega hat COLTENE ihr Sortiment stark erweitert. Die Produktpalette der Gruppe deckt die wichtigsten Prozesse und Arbeitsschritte der zahnärztlichen Behandlung nun umfassend ab: von der Instrumentenaufbereitung über die Endodontie bis zur Zahnrestauration, von der Oberflächendesinfektion in der Zahnarztpraxis bis zum Polieren des einzelnen Zahns.

Instrumentenaufbereitung Oberflächendesinfektion

Instrumentenreinigung

Instrumentendesinfektion

Sterilisation

Aufbewahrung

Endodontie Aufbohren

Spülung

Vorbereitung

Komposit

Finish/Polieren

Vorbereitung

Scanning

CAD/CAM und Material

Vorbereitung

Abdruck

Zugang

Trocknen

Füllen/ Versiegeln

Endokrone

Zahnrestauration

Labor

Befestigung

Finish/Polieren

Befestigung

Finish/Polieren

Strategieelement 2 Fokus auf den Endkunden Obwohl COLTENE ihre Produkte über Zwischen händlerverkauft, will sie trotzdem in Zukunft noch näher an den Endkunden sein. Deshalb baut COLTENE eine professionelle Serviceorganisation mit direktem Kontakt zu den Zahnärztinnen und Zahnärzten auf. Dazu hat COLTENE diverse Massnahmen ergriffen: – Digitale Unterstützung: Alle Produktinformationen werden in einem zentralen Product Information Management (PIM) verwaltet. Ein Customer-Relation ship-Management-(CRM-)System für Vertrieb, Service und Marketing vereint sämtliche Endanwenderdaten. Das erlaubt bedürfnisgerechte Dienstleistungen und erhöht die Kundenzufriedenheit. – Vorbereitung auf das Internet of Things (IoT): Basierend auf der SciCan G4 Technologie baut COLTENE eine elektronische Hardwareplattform für alle Geräte sowie eine Cloud-basierte Softwareplattform auf. So kann das «Internet der Dinge», ein Kernelement im digitalen Servicegeschäft, zu einem strategischen Vorteil für COLTENE werden. – Zuweisung zu Dental Service Organizations (DSOs): Zahnarztpraxen lagern administrative Aufgaben vermehrt in sogenannte Dental Service Organizations (DSOs) aus. Entsprechend teilt COLTENE in grossen und wichtigen Märkten ihre Verkaufsleiter nicht mehr nach Regionen, sondern nach DSOs ein. Dadurch kann das Verkaufsteam zielgerichteter auf die Endkunden zugehen.

Strategieelement 3 Synergien ausschöpfen Nach den Akquisitionen im Jahr 2018 fokussiert COLTENE auf das organische Wachstum. Die Gruppe harmonisiert konzernweit Prozesse und Software, um Synergien nach dem Zusammenschluss mit Kenda, SciCan und Micro-Mega zu realisieren. – Vertriebsintegration von Micro-Mega: Die Integration des Micro-Mega Vertriebs war aufwändiger als erwartet. Die Probleme sind erkannt und Massnahmen zu deren Lösung eingeleitet. – Einführung von SAP bei Micro-Mega und SciCan: Die Material- und Werteflüsse von COLTENE sollen primär über die Software SAP abgebildet werden. COLTENE erweitert deshalb die SAP-Nutzung auf Micro-Mega und SciCan. – Zusammenführung Verkaufs- und Marketingteams: COLTENE hat die Verkaufsteams der einzelnen Gruppengesellschaften zusammengeführt und die Schnittstellen zu den Kunden klar definiert.

Strategieelement 4 Regulierungskompetenz wird zum Wettbewerbsvorteil Die regulatorischen Anforderungen im Dentalmarkt steigen. Die Vorbereitung auf die ab Mai 2020 geltende neue europäische Medizinprodukteverordnung (Medical Device Regulation, MDR) ist für COLTENE zentral. Die nötigen Anpassungen werden zum Anlass genommen, bestehende Prozesse zu verbessern und zu rationalisieren. – MDR für die Produktionsstandorte: Die Produktionsstandorte der COLTENE Gruppe werden entsprechend den neuen MDR-Anforderungen laufend optimiert. Die Produktionsstätte der Abformmaterialien in Altstätten wurde Anfang 2020 als erster Standort gemäss den neuen europäischen regulatorischen Vorschriften zertifiziert. Die dabei gewonnenen Erfahrungen erleichtern die weiteren Zertifizierungen wesentlich. – Strafferer Produktlebenszyklus: COLTENE führt konzernweit eine neue Product-Life-Cycle-Management(PLM-)Software ein. Sie sammelt relevante Daten aus allen Phasen des Produktzyklus und ermöglicht, wo nötig, schnelle Anpassungen. Dadurch wird langfristig eine hohe Produktqualität sichergestellt.

Operativer Rückblick und Finanzkommentar Getrieben durch die Akquisitionen von SciCan und Micro-Mega im Herbst 2018 steigerte die COLTENE Gruppe ihre Umsätze im Geschäftsjahr 2019 in nahezu allen Absatzmärkten. Nordamerika ist die wichtigste Verkaufsregion der neuen COLTENE Gruppe und der Bereich Behandlungseffizienz machte den grössten Anteil am Gesamtumsatz aus. Die in diesem Geschäftsbericht präsentierten Jahreszahlen wurden nach der Umstellung von IFRS erstmals nach dem neuen Rechnungslegungsstandard Swiss GAAP FER dar gestellt. Die Vorjahreszahlen wurden entsprechend angepasst. Im Geschäftsjahr 2019 erzielte die COLTENE Gruppe einen Nettoumsatz von CHF 273,8 Mio. (2018: CHF 204,0 Mio.). Dies bedeutet eine Steigerung von 34,2 % in der Berichtswährung Schweizer Franken. Die Umsatz zunahme ist primär auf die Akquisitionen von SciCan und Micro-Mega zurückzuführen. Ihr Gesamteinfluss auf den Nettoumsatz belief sich auf CHF 95,3 Mio. oder 34,8 %. Das währungsbereinigte organische Wachs tum der COLTENE Gruppe lag mit 1,9 % unter dem Wert des Vorjahres (2018: 2,7 %). Grund für den Rückgang war zum einen ein anspruchsvolles Marktumfeld. COLTENE schätzt, dass das Wachstum des Gesamtmarkts im abgelaufenen

Geschäftsjahr deutlich unter dem langfristigen Trend lag und rund 1,5 % betrug. Zudem war die Integration des Verkaufsteams und der Vertriebs netze von Micro-Mega in die COLTENE Gruppe aufwändiger als erwartet. Dies hatte einen Umsatzrückgang im Endodontie-Bereich zur Folge. In den USA konnten aufgrund von logistischen Problemen grössere Geräte bestellungen nicht rechtzeitig ausgeliefert werden, was zu weiteren Umsatzeinbussen führte. Schliesslich reduzierte der starke Schweizer Franken den Nettoumsatz um CHF 2,7 Mio. oder um 1,0 %. Grösserer Umsatzanteil des Bereichs Infektionskontrolle Nach der Integration von Kenda, SciCan und MicroMega hat die COLTENE Gruppe eine neue Struktur für die Umsatzberichterstattung nach Produkten eingeführt und das umfassende Sortiment in drei Produktbereiche aufgeteilt: – Infektionskontrolle – Zahnerhaltung (Restauration, Endodontie) und – Behandlungseffizienz (Prothetik, Rotierende Instrumente und Behandlungshilfen).

Der Bereich Behandlungseffizienz macht 41,3 % der Verkäufe aus, Zahnerhaltung und Infektionskontrolle 31,8 % respektive 26,9 %.

Der Anteil der einzelnen Produktgruppen am Jahresumsatz im Geschäfts jahr 2019 entsprach den Erwartungen des Managements. Der Bereich Behandlungseffizienz machte 41,3 % der Verkäufe aus, Zahnerhaltung und Infektionskontrolle 31,8 % respektive 26,9 %. Mit der Akquisition von SciCan hat die Infektionskontrolle im Vergleich zum Geschäftsjahr 2018 (14,2 %) an Bedeutung gewonnen. Die Verkäufe stiegen in allen drei Produktgruppen und beliefen sich in absoluten Zahlen auf CHF 113,2 Mio. im Bereich Behandlungseffizienz sowie auf CHF 87,0 Mio. bei der Zahn erhaltung und CHF 74,0 Mio. bei der Infektionskontrolle. Erste Auftritte unter gemeinsamer Dachmarke COLTENE legte im Geschäftsjahr 2019 die Basis und schuf die nötigen Strukturen und Voraussetzungen, um künftig Synergien aus dem Zusam menschluss mit SciCan und Micro-Mega stärker zu nutzen. Die neue, grössere COLTENE präsentierte den Dentalhändlern sowie Zahnärztinnen und Zahnärzten als Endanwender unter der Dachmarke COLTENE an diversen bedeutenden Dentalmessen (unter anderem IDS in Köln, Greater New York Dental Meeting) nebst den angestammten Produkten erstmals die ergänzenden Sortimente von SciCan und Micro-Mega. Für die Sicherstellung des ein heitlichen Auftretens am Markt und zur Umsetzung von Cross-Selling-Synergien wurden Verkauf und Marketing der Gruppe reorganisiert.

Mit der Akquisition der SciCan Gruppe löste der nordamerikanische Markt die Region EMEA als wichtigste Verkaufsregion der COLTENE Gruppe ab.

Nordamerika festigt Stellung als wichtigste Verkaufsregion Mit der Akquisition der SciCan Gruppe löste der nordamerikanische Markt die Region EMEA als wichtigste Verkaufsregion der COLTENE Gruppe ab. Im Geschäftsjahr 2019 belief sich der Umsatz in den USA und Kanada auf CHF 124,8 Mio., was 45,6 % des Gesamtumsatzes entsprach (2018: CHF 75,9 Mio. oder 37,2 % des Gesamtumsatzes). In der Region EMEA stiegen die Umsätze auf CHF 98,3 Mio. (2018: CHF 85,3 Mio.), ent sprechend einem Anteil von 35,9 % (2018: 41,8 %) am Gesamtumsatz. In den Verkaufsregionen Asien und Südamerika generierte COLTENE Umsätze von CHF 32,6 Mio. (2018: 26,1 Mio.), was 11,9 % (2018: 12,8 %) des Gesamtumsatzes entsprach, respektive CHF 18,1 Mio. (2018: CHF 16,7 Mio.) oder 6,6 % (2018: 8,2 %) des Gesamtumsatzes. Damit entspricht die neue Umsatzverteilung weitestgehend den 2019 publizierten Erwartungen des Managements.

Kanada war mit einem Umsatzwachstum von 163,3 % Spitzenreiter – was namentlich der Übernahme von SciCan geschuldet ist. Auch die Verkäufe in den Emerging Markets liefen gut, sie nahmen um 17,0 % zu. China, die CIS-Region, der Mittlere Osten und Afrika wie auch die Umsätze von SciCan Produkten in dieser Region führten zum erfreulichen Wachstum. Einzig Indien weist einen Umsatzrückgang auf (–1,9 %), was einerseits auf den Wettbewerbs- und Preisdruck und andererseits auf die wirtschaftlichen Schwierigkeiten im Land zurückzuführen ist. In Lokalwährungen stieg der Gesamtumsatz der COLTENE Gruppe um 35,6 %. Belastung des operativen Ergebnisses durch Integration und neue regulatorische Vorgaben Das Betriebsergebnis (EBIT) lag bei CHF 32,0 Mio. (Vorjahr: CHF 25,4 Mio.), die EBIT-Marge bei 11,7 % (2018: 12,4 %). Die Kosten für die Integration von SciCan und Micro-Mega fielen höher aus als erwartet. Einmalaufwände im Qualitätsmanagement, in der Informatik, für Beratungen und PersonalSonderkosten belasteten das Ergebnis. Weiter fielen im Geschäftsjahr 2019 Einmalaufwände für die Einführung der ab Mai 2020 gültigen Medical Device Regulation (MDR) an. Im Zuge der Vorbereitung auf die neuen Vorschriften passte COLTENE das Qualitätsmanagementsystem an und führte unter anderem Biokompatibilitätsstudien und toxikologische Analysen für verschiedene Produkte durch. All diese einmaligen Sonderkosten und Einmalaufwände summierten sich auf total CHF 4,6 Mio. Ohne diese Einmaleffekte hätte die EBIT-Marge 13,4 % betragen. Mit der Zertifizierung ihrer Produktionsstätten nach MDR stellt COLTENE sicher, dass das Unternehmen seine Produkte auch in Zukunft ohne Einschränkungen verkaufen kann.

Kanada war mit einem Umsatzwachstum von 163,3 % Spitzenreiter.

Der ausgewiesene Reingewinn der COLTENE Gruppe betrug CHF 20,0 Mio. (2018: CHF 17,0 Mio.). Die Steuerquote erhöhte sich auf 28,8 % (2018: 26,6 %). Nicht rückforderbare Quellensteuern führten im Berichtsjahr auf grund erwarteter Dividendenzahlungen aus den USA und Kanada zu einem zusätzlichen Steueraufwand von CHF 0,9 Mio. Dieser Sondereffekt erhöhte die Steuerquote um 3,1 %. Somit wäre die Steuerquote ohne diesen Effekt auf 25,7 % gesunken. Im Jahr 2019 wurde in der Schweiz eine ab 2020 wirksame Unternehmenssteuerreform beschlossen, die unter anderem die privilegierte Besteuerung von Gesellschaften abschafft. Die geänderten Steuergesetze haben keinen wesentlichen Einfluss auf die künftige B esteuerung der COLTENE Gruppe.

Free Cash Flow wieder positiv Der operative Cash Flow betrug im Geschäftsjahr 2019 CHF 23,8 Mio. (2018: CHF 24,6 Mio.). Nach Abschluss der Akquisitionen von Kenda, SciCan und Micro-Mega fiel der Cash Flow aus Investitionen mit CHF 13,1 Mio. wieder deutlich tiefer aus als im Vorjahr (2018: CHF 115,4 Mio.). Im Berichts jahr investierte die COLTENE Gruppe vor allem in den Unterhalt und die Erneuerung verschiedener Produktionsanlagen für die Watte- und Vliesproduk tion, für die Herstellung von Kompositmaterialien, für die Automatisierung der Herstellprozesse von rotierenden Instrumenten sowie in moderne Informatikanwendungen. Zusätzlich wurden die logistischen Abläufe mit tels Investitionen an verschiedenen Standorten weiter optimiert. Der Free Cash Flow war mit CHF 10,7 Mio. positiv (2018: CHF 90,8 Mio. negativ).

Der Free Cash Flow war mit CHF 10,7 Mio. wieder positiv.

Bilanz bleibt solide Das konsolidierte Eigenkapital der COLTENE Gruppe belief sich per 31. Dezember 2019 auf CHF 91,2 Mio. (2018: CHF 88,2 Mio.). Das Eigenkapital der COLTENE Holding AG lag bei CHF 187,5 Mio. (2018: CHF 200,2 Mio.). Davon sind CHF 151,9 Mio. Kapitaleinlagereserven (2018: CHF 169,8 Mio.), die gemäss der aktuell gültigen Rechtsgrundlage an Aktionäre (natürliche Personen mit Wohnsitz in der Schweiz) steuerfrei ausgeschüttet werden können. Die Bilanzsumme per 31. Dezember 2019 betrug CHF 189,8 Mio. (2018: 183,5 Mio.). Die Nettoverschuldung stieg auf CHF 36,8 Mio. (2018: CHF 29,2 Mio.), da im Geschäftsjahr 2019 die Schlussrechnungen für den Neubau am Hauptsitz in Altstätten bezahlt wurden. Der zusätzliche Finanzbedarf konnte aus bestehenden Kreditlinien finanziert werden. Der Verschuldungsfaktor (Nettoverschuldung dividiert durch das EBITDA) stieg leicht auf 1,0 (2018: 0,9). Die Eigenkapitalquote betrug am Bilanz stichtag 48,0 % (2018: 48,1 %). Die vertraglich vereinbarten Covenants für die Finanzierung waren eingehalten.

Produktion und Umwelt COLTENE nimmt ihre gesellschaftliche Verantwor-

tung als internationales Unternehmen wahr. Die Gruppe will Zahnärzten und ihren Patienten sichere und zuverlässige Produkte zur Verfügung stellen, die Umweltbelastungen entlang der gesamten Wertschöpfungskette minimieren und den Ressourcenverbrauch begrenzen. Das Kapitel «Produktion und Umwelt» hält eine Reihe von Grundwerten und Handlungsmaximen fest und belegt relevante Entwicklungen und Investitionen im Berichtsjahr. Darüber hinaus will COLTENE das Bewusstsein für nachhaltiges Handeln auf allen Organisations ebenen stärken und das unternehmensübergreifende Nachhaltigkeitsmanagement ausbauen. COLTENE produziert weltweit in sechs grösseren und

zwei kleineren Produktionsstätten, welche jeweils auf unterschiedliche Verfahren und Produkte spezialisiert sind: Das COLTENE Werk in Langenau, Deutschland, entwickelt und produziert: – Endodontische Produkte zur Reinigung, Trocknung und Obturation von Wurzelkanälen unter den Markennamen Roeko, Hygenic, Luna und Surgitip. – Produkte zur Wundversorgung, Feuchtigkeitsund Infektionskontrolle. Die chemische Produktionsstätte in Altstätten, Schweiz, ist auf die Entwicklung und Herstellung fol gender Produkte spezialisiert: – Dentale Abformmaterialien einschliesslich bekannter C-Silikon- und A-Silikon-Produkte. – Restaurative Produkte für eine innovative und bewährte ästhetische Füllungstherapie sowie eine breite Palette an Adhäsiv- und Befestigungs materialien. Kenda mit Sitz in Vaduz, Fürstentum Liechtenstein, ist auf zahnmedizinische Diamant- und Silikonpolierer spezialisiert: – Autoklavierbare Polierer für Zahnärzte für den Mehrfachgebrauch. – Polierer für Zahnärzte für den Einmalgebrauch. – Polierer für die Zahntechnik.

In Cuyahoga Falls, Ohio, USA, verfügt COLTENE über ihre grösste Produktionsstätte. Das Werk ist vorwie gend auf mechanische Fertigungsverfahren spezialisiert und stellt unter anderem folgende Produkte her: – Stifte wie das ParaPost X System, Hartmetallbohrer und Endodontie-Instrumente. – Geräte zur Ultraschallreinigung und Desinfektion von Instrumenten in der zahnärztlichen Praxis. In Rio de Janeiro, Brasilien, produziert Vigodent chemische Produkte vorwiegend für den lateinamerika nischen Markt: – Dentale Abformmaterialien für einfache, schnelle und präzise Abformungen. – Kompositmaterialien sowie Adhäsive für die restau rative Zahnheilkunde. Das Sortiment von Micro-Mega mit Produktionsstätte in Besançon, Frankreich, umfasst: – Wurzelkanalinstrumente für unterschiedliche Anwendungen. – Spüllösungen für die sichere Wurzelkanal aufbereitung. – Obturations- beziehungsweise Versiegelungsmaterialien. Schliesslich betreibt SciCan Ltd. eine Produktionsstätte in Toronto, Kanada, für Produkte zur Desinfektion und Sterilisation: – Kassettenautoklaven (STATIM ) und Volumen autoklaven (BRAVO). – Reinigungs- und Thermodesinfektionsgeräte (HYDRIM). – Wasserdestillationsgeräte (AQUASTAT). – Reinigungs- und Pflegegeräte für Dentalinstrumente. – Desinfektionsmittel für Oberflächen und Dentale Instrumente (OPTIM). In Nordamerika und in Deutschland unterhält die COLTENE Gruppe eigene Service Centers für den Unterhalt und die Reparatur ihrer Dentalgeräte. In verschiedenen anderen Ländern werden diese Leistungen von zertifizierten Dritten erbracht.

Produktion und Umwelt

Überschaubare Umweltbelastung Ziel von COLTENE ist es, die durch ihre Aktivitäten verursachte Belastung der Umwelt zu minimieren sowie so gering wie möglich zu halten. Als Hersteller von dentalen Verbrauchsmaterialien und Kleingeräten unterliegt die Gruppe strikten gesetzlichen Vorschrif ten sowie regulatorischen Anforderungen, die eine strenge Überwachung der Produkte und Fertigungspro zesse vorschreiben. Die verwendeten Rohstoffe werden anhand ausführlicher Qualitätskontrollproto kolle auf Identität, Reinheit und Gehalt geprüft, um die Sicherheit und Wirksamkeit der Produkte zu gewähr leisten. Die vollständige Dokumentation aller Her stellungsprozesse dient der Patientensicherheit und garantiert die Rückverfolgbarkeit der Produkte von der Anwendung bis zum Rohstoff. Das Bekenntnis von COLTENE zu kontinuierlicher Verbesserung wird durch den COLTENE Verhaltenskodex unterstrichen. Er verpflichtet die Vorgesetzten, ihre Mitarbeitenden dazu anzuhalten, dem Umweltschutz in den täglichen Aufgaben angemessen Beachtung zu schenken. Abgesehen von den Fertigungs- und Forschungs aktivitäten sind die Umweltbelastungen von COLTENE für eine Organisation ihrer Grösse gering. COLTENE produziert weder Implantate noch Amalgamfüllstoffe und verwendet daher keine grösseren Mengen an Titanmetallen, Quecksilber, Blei, Mangan oder anderen Schwermetallen, die zu grossen Belastungen der Umwelt führen. Die im Produktionsprozess verwendeten wesentlichen Materialproduktgruppen sind: – Hygiene und Behandlungshilfen: Gummi, Metall, Textilfasern, Baumwolle, Reinigungslösungen – Endodontische Produkte: NiTi-Metall, Gummi, Papier – Restaurative Materialien: Polyamidmatrix mit Glasfüller – Abformmaterialien: Silikonöle – Betriebsmittel: Wasser, Reinigungsmittel, Lösungen für galvanische Bäder, Papier.

Gleichwohl ist COLTENE bestrebt, den Verbrauch von Betriebsmitteln von Jahr zu Jahr zu reduzieren. Die relativ niedrigen Mengen an unbehandeltem Abwasser, das in Fässern und Tanks gesammelt und von zugelas senen Spezialunternehmen entsorgt wird, enthalten tiefe Konzentrationen an Reinigungsmitteln, Lösungs mitteln, Säuren und Ölen. Investitionen im Berichtsjahr COLTENE modernisiert ihre Produktionsanlagen kontinuierlich und investiert laufend in ihre Herstellungs prozesse und -methoden. Die Patientensicherheit, Produktqualität und Wirtschaftlichkeit stehen dabei neben Umweltverträglichkeitskriterien im Vorder grund. Im Berichtsjahr tätigte die COLTENE Gruppe an allen Standorten zahlreiche Investitionen, um die Produktionskosten zu optimieren, Arbeitsabläufe zu verbessern, das Produktangebot zu erweitern und die Umweltbelastung zu verringern. Das COLTENE Werk in Langenau, Deutschland, tätigte verschiedene Ersatz- und Erneuerungsinvestitio nen des Maschinenparks, insbesondere im Bereich Watte- und Vliesproduktion. Dadurch wurde die Pro duktivität am Standort erhöht und die Produktqualität weiter verbessert. Mit einer neuen Heizung wurden die Emissionen und Heizungskosten gesenkt. Weiter hat COLTENE in den Bau eines Gefahrengutcontainers, in Absauganlagen, neue Logistikgeräte sowie Lade stationen für Elektroautos für die Mitarbeitenden inves tiert. Diese Massnahmen erhöhten Ergonomie, Hygiene und Sicherheit am Arbeitsplatz und zudem fördert COLTENE so die E-Mobilität der Mitarbeitenden. In Altstätten, Schweiz, wurde ein neuer Mischer für restaurative Materialien angeschafft, um die Produk tionskapazität zu erhöhen. Das ehemalige Produktions gebäude, das teilweise in eine moderne Forschungsund Entwicklungsabteilung umgebaut wird, wurde nach dem Umzug der Produktion in den Neubau mit einer neuen Heizung ausgestattet. Die neue, moderne Lösung verringert den Energieverbrauch. Weiter wurden die Abfüllanlagen für Silikone überarbeitet und die Codie rung der Rotierenden Instrumente automatisiert.

Produktion und Umwelt

Bei Kenda in Vaduz, Fürstentum Liechtenstein, wurden verschiedene Anpassungen an Press- und Form werkzeugen vorgenommen, die zu einer höheren Kapazität und Prozesssicherheit führen. Ein neues Mess gerät für die Schlusskontrolle der Dentalpolierer erlaubt eine effizientere Messung und digitale Archivierung aller relevanten Parameter. Weiter erwarb Kenda einen Roboter für die automatisierte Druck- und Bewegungs prüfung der Zahnpolierer. Im Werk in Cuyahoga Falls, Ohio, USA, wurden die Steuerungssysteme für die CNC-gesteuerten Bohrer schleifmaschinen erneuert. Dadurch wurde die Prozess automatisierung verbessert und die Produktions kapazität und -qualität erhöht. Neue vertikale Lagerlifte führten zu Platz- und Effizienzgewinnen im Kleinteile lager. Zudem hat das Werk eine neue Blisterverpackungs maschine angeschafft. Sie ermöglicht die Erweiterung des Angebots an steril verpackten Produkten. SciCan investierte in Toronto, Kanada, in die Produk tionsprozesse, in verschiedene neue Produkte und in die Infrastruktur. Unter anderem entwickelte SciCan einen neuen Autoklaven, der bereits die FDA-Zulassung für den amerikanischen Markt erhielt. SciCan arbeitet an der Entwicklung eines neuen Reinigungs- und Des infektionsgeräts und adaptiert die hauseigene G4- Technologie an das Ultraschall-Reinigungsgerät UC150. Das Unternehmen installierte ein neues, effizientes Lagerliftsystem, um in der Produktion Platz für verbes serte Abläufe zu gewinnen. In Rio de Janeiro, Brasilien, investierte Vigodent in die Anschaffung einer neuen Abfüllanlage, die den Produk tionsprozess optimiert. Der Standort in Brasilien opti mierte zudem sein Umspannwerk. Die Investition stellt sicher, dass Vigodent den rechtlichen Vorgaben ent spricht und verringert zudem den Energieverbrauch am Standort. Ein neues Brandschutzsystem verbessert die Sicherheit am Arbeitsplatz. Mit Investitionen in die Klimatisierung konnte Vigodent den Energieverbrauch reduzieren.

Micro-Mega in Besançon, Frankreich, investierte in acht hochmoderne Fräsmaschinen für die Produktion von Wurzelkanalinstrumenten. Die modernen Anlagen erhöhen die Produktivität sowie die Produktionsflexibi lität erheblich. Weiter modernisierte das Unternehmen die Gebäudeinfrastruktur, um die Arbeitsbedingungen und Arbeitsabläufe weiter zu verbessern. Das Management der COLTENE Gruppe ist überzeugt, dass die genannten Investitionen und Verbesserungen wesentlich zur Nachhaltigkeit der Produktionsprozesse beitragen. COLTENE wird die Prozesse entlang der gesamten Wertschöpfungskette weiterhin optimieren, um nicht zuletzt auch die Umweltbelastung kontinuier lich zu verringern und an die Anforderungen des Marktes weiter anzupassen. Anmerkung zu den ausgewiesenen Datenreihen 2015–2019 COLTENE berichtet seit dem Geschäftsjahr 2014 über ihre Nachhaltigkeitsaktivitäten. Die Datenerhebung sowie die Ausarbeitung des ersten Berichts haben im Unternehmen zu einem stärkeren Bewusstsein für dieses Thema geführt. Die Erhebung und Verarbeitung der Daten wurden fortlaufend erweitert. Heute verfügt COLTENE über einen standardisierten Prozess, um relevante Daten zu erheben und auszuwerten. Die Umrechnung von Energie in CO2-Emissionen erfolgt in Abhängigkeit von länderspezifischen Energiefaktoren. Die in diesem Bericht ausgewiesenen umweltrelevanten Daten für die Jahre 2015 bis 2019 werden nicht aus schliesslich vom Verhalten von COLTENE beeinflusst. Der Verbrauch der relevanten Inputfaktoren Öl, Gas und Wasser wird auch von vielen exogenen Parametern bestimmt. Nebst der Witterung, den Produktions volumen und dem Produktionsmix hängt beispielsweise der Energie- und Wasserkonsum auch von den steigen den regulatorischen Anforderungen ab. Diese stellen höhere Ansprüche an die betriebliche Hygiene, an die Qualität und Dokumentation der Produktionsprozesse, an die Verpackungsmaterialien sowie an die Qualitäts kontrollprozesse der Produkte. Die Einhaltung dieser Normen, die primär auf die Sicherheit der Produkte für die Zahnärztinnen und Zahnärzte sowie die Patienten ausgerichtet ist, kann sich in variierendem Energie- und Wasserverbrauch niederschlagen.

Produktion und Umwelt

Die Unterschiede im Energieverbrauch und andere Daten betreffend Produktion und Umwelt im Geschäftsjahr 2019 im Vergleich zum Vorjahr sind zudem auf die nachfolgend erwähnten Ursachen zurückzuführen. Am Produktionsstandort in Deutsch land wurde 2019 die Gasheizung erneuert und als Zwischenlösung eine temporäre Ölheizung installiert. Der erhöhte Wasserverbrauch war auf das Anlegen einer ökologisch sinnvollen, etwa 2500 m2 grossen Wildblumenwiese zurückzuführen. Mit dem Einbau von LED-Leuchten im Neubau am Hauptsitz in Altstätten, Schweiz, konnten die Stromkosten gesenkt werden. Und im Zusammenhang mit dem Umzug in den Neubau wurde besonders viel Material entsorgt, weshalb die Recycling- und Abfallmengen angestiegen

Energie

2017

2018

2019

sind. Am Produktionsstandort in Kanada führte der Produktionsstart eines neuen Produktes zu einem höheren Verbrauch an Elektrizität und Wasser in der Endprüfung. Zudem stieg als Folge des harten Winters und der kühleren Lufttemperaturen der Gasverbrauch an. Eine Initiative zur gezielten Wiederverwertung von Karton führte zu einem rasanten Anstieg des Recycling- anteils. Und als Folge des Einsatzes von Schaumstoff für die Verpackung von neuen Produkten und der gestiegenen Mitarbeiteranzahl erhöhte sich die Abfall menge trotz Einführung der Kartoninitiative. In den USA führten der Ausbau bisher nicht für die Produktion genutzter Flächen sowie eine einmalige Entsorgungs aktion zu einem Anstieg der Abfallmengen.

Energie

2017

2018

2019

Strom

MWh

869

893

919

CO2

854

872

862

Öl

n/a

2,3

Recycling

45,5

69,3

79,0

Gas

105,7

108,9

96,4

Abfall

12,0

29,8

30,0

Wasser

1 280

1 337

1 564

Abwasser

1 280

1 337

1 564

Strom

MWh

1050

1 127

1 063

CO2

370

346

345

Öl

44,6

44,7

45,8

Recycling

43,9

75,2

92,6

Gas

6,9

4,5

6,3

Abfall

67,4

90,1

113,0

Wasser

10 834

9 248

9 015

Abwasser

10 834

9 248

9 015

Strom

MWh

2 682

2 702

2 604

CO2

2 048

2 103

1 971

Öl

n/a

Recycling

55,2

51,2

40,8

Abfall

Abwasser

Deutschland

CH und FL

Gas

106,6

121,1

96,5

Wasser

3 086

4 656

4 779

Strom

MWh

629

520

552

CO2

189

158

166

Öl

n/a

Recycling

n/a

Abfall

Abwasser

CO2

Gas

2,4

2,6

2,3

Wasser

2 029

2 034

2 052

Strom

MWh

n/a

1 521

1 264

Öl

n/a

9,0

7,5

Gas

n/a

56,9

58,7

Wasser

n/a

1 829

1 428

Strom

MWh

n/a

1 109

1 240

Öl

n/a

Gas

n/a

86,2

97,7

Wasser

n/a

8 415

9 463

USA

Brasilien

Frankreich

Kanada

28,9

17,0

37,7

3 086

4 656

4 779

20,7

24,5

23,7

2 029

2 034

2 052

n/a

378

346

Recycling

n/a

8,0

6,5

Abfall

n/a

27,0

26,3

Abwasser

n/a

1 829

1 428

CO2

n/a

552

621

Recycling

n/a

22,8

54,1

Abfall

n/a

240,8

286,3

Abwasser

n/a

8 415

9 463

Total 2018/ 2019

7871 MWh Strom 7514 MWh Strom

53,7 t Öl 55,6 t Öl

380 m3 Gas 358 m3 Gas

27 519 m3 Wasser 28 301 m3 Wasser

4410 t CO2 4292 t CO2

227 t Recycling 273 t Recycling

429 t Abfall 517 t Abfall

27 519 m3 Abwasser 28 301 m3 Abwasser

Produktion und Umwelt

Produktion

Maschinistin Sophie Mercier startet eine Schleifmaschine bei Micro-Mega in Besanรงon.

Produktion und Umwelt

Produktion

Wir produzieren für den langfristigen Einsatz COLTENE verbessert die Produktion an den acht Produktionsstätten der Gruppe Schritt für Schritt. Qualität und eine termin gerechte Auslieferung stehen im Zentrum der Fertigung. Es laufen diverse Vorbereitungs arbeiten zur besseren Nutzung des Internets der Dinge, etwa um die Produktwartung zu digitalisieren und für Endkunden so einfach wie möglich zu gestalten.

Produktion und Umwelt

Corporate Governance COLTENE Holding AG The following chapter describes the principles of corporate governance applied at Group and senior management level within the COLTENE Group. The main elements are contained in the Articles of Incorporation and organizational regulations, and are based on the “Guidelines concerning information on corporate governance” published by SIX Swiss Exchange as well as on the guidelines and recommendations set out in the “Swiss Code of Best Practice for Corporate Governance” published by economie suisse. The compensation report is published separately in this Annual Report on page 58 to page 65. All information is valid as at December 31, 2019, unless otherwise stated. Significant changes that have occurred between that date and the publication date of this report have also been indicated as appropriate. Whenever a reference is made in this Corporate Governance report to the Articles of Incorporation, they are available in German as well as in an unofficial translation in English on the website at: https://www.coltene.com/de/investoren-medien/ corporate-governance/ (German version) and https://www.coltene.com/investor-relations/ corporate-governance/ (English version). Group Structure and Shareholders Group Structure Operative Group Structure COLTENE Group is targeting the markets for dental consumables and small equipment for dental practices, dental clinics, and dental laboratories. The Company evolved from the Health Care Division of the former Gurit-Heberlein AG and was incorporated as per December 15, 2005, under the formerly name Medisize Holding AG and listed as an independent company on June 23, 2006, on SIX Swiss Exchange. Medisize was operating with two segments in the dental and medical consumables markets. Effective as at April 30, 2008, the medical segment was sold to the Finnish Medifiq Group and the Company name was changed to OLTENE Holding AG. Since then, COLTENE Group is C active in the dental market only and operates one segment in line with its management structure, the organizational setup, the reporting, and the allocation of resources.

Legal Structure of Subsidiaries Of all the companies consolidated, COLTENE Holding AG (the COLTENE Group’s holding company) is the only one listed. It is headquartered in Altstätten/SG, Switzerland. COLTENE Holding AG’s registered shares (security no. 2.534.325, ISIN CH0025343259, symbol CLTN) are quoted on SIX Swiss Exchange. On Decem ber 31, 2019, the market capitalization amounted to CHF 530.6 million (prior year CHF 503.7 million). All Group companies are ultimately owned at 100 % by the Group’s holding company. At the beginning of January 2018, COLTENE bought and consolidated Kenda AG, Vaduz, Liechtenstein. Kenda was established in 1977 and is a specialized international manufacturer of diamond and silicon polishing instru ments for dentistry applications. The additional annual turnover of Kenda is approx. CHF 4 million. October 9, 2018, the COLTENE Group acquired SciCan Ltd., headquartered in Toronto, Canada, and Dental Drives GmbH, domiciled in Leutkirch, Germany, with all their respective subsidiaries. The SciCan Group with its main subsidiaries in the US and Germany offers infection control equipment and hygiene products. SciCan has about 230 employees, is active worldwide and claims a market-leader position in his domain in North America. DentalDrives’ main subsidiary Micro- Mega SA, located in Besançon, France, is focused primarily on endodontic instruments and employs approx. 180 people. Most of its sales are generated in Europe and North America. SciCan’s and Micro-Mega’s products and brands with their excellent market repu tation will be retained under the overarching COLTENE brand. The newly acquired companies will increase annual consolidated sales of the COLTENE Group by approximately CHF 95.0 million. In September 2018 Dentronix Inc., located in Cuyahoga Falls, Ohio, USA, a small distributor for orthodontic products, was merged with Coltène/Whaledent Inc., also located in Cuyahoga Falls. Information on the companies belonging to the OLTENE Group, which are not listed, is shown on C page 94 of the Financial Report.

Corporate Governance

Major Shareholders On December 31, 2019, there were 2203 shareholders (previous year 2011) entered in the share register and the following shareholders held stakes equaling or exceeding the legal disclosure threshold of 3 % of the voting stock of COLTENE Holding AG: Huwa Finanz- und Beteiligungs AG, Heerbrugg, Switzerland, held 1 325 540 registered shares. This equals voting rights of 22.18 %. Huwa Finanz- und Beteiligungs AG is representing the families of Ruedi Huber, Balgach, Switzerland, Helene Huber, Heerbrugg, Switzerland, and Nick Huber, Balgach, Switzerland. Further details are available on the disclosure of shareholdings website of SIX Swiss Exchange. Nick Huber is Chairman of OLTENE Holding AG. He is neither the majority share C holder of HUWA nor does he have a decisive influence on the decision-making process at HUWA. In case of conflicts of interest, he has abstained from voting on board resolutions at HUWA level, e.g. on the question of how to vote with shares, which HUWA holds in a listed company where he is a member of the Board of Directors. Arthur Zwingenberger, Luzern, Switzerland, held 1 027 501 registered shares. This equals voting rights of 17.20 %. Arthur Zwingenberger bought these shares from Arno Holding S.à.r.l., Luxemburg, Luxemburg, which he controlled and which was the former major shareholder of SciCan Ltd. and DentalDrives GmbH that was sold to the COLTENE Group on October 9, 2018. Arthur Zwingenberger is the father of Allison Zwingenberger, member of the Board of Directors of COLTENE Hold ing AG. Allison Zwingenberger has no business connec tion with Arthur Zwingenberger and no influence on his voting decisions with regard to COLTENE shares. Rätikon Privatstiftung, Bludenz, Austria, held 608 493 registered shares. This equals voting rights of 10.18 %. Rätikon Privatstiftung is under the control of Franz Rauch, Laterns, Austria. Direct shareholder is ESOLA Beteiligungsverwaltungs GmbH, Rankweil, Austria. Franz Rauch is the father of Jürgen Rauch, member of the Board of Director of COLTENE Holding AG. Jürgen Rauch has no business connection with Rätikon Privat stiftung and ESOLA Beteiligungsverwaltungs GmbH and no influence on their voting decisions with regard to COLTENE shares.

Tweedy, Browne Company LLC, New York, USA, held 251 512 registered shares representing 4.21 % of the voting rights. Credit Suisse Funds AG, Zurich, Switzerland, held 208 698 registered shares or 3.49 % of the voting rights. Robert Heberlein, Zumikon, Switzerland, held directly and indirectly through Burix Beteiligungen AG, Zurich, which he controls, 206 872 registered shares, repre senting 3.46 % of the voting rights. UBS Fund Management (Switzerland) AG, Zurich, Switzer land, held 194 937 registered shares or 3.26 % of the voting rights.

All other shareholders held a stake of 36.01 % of the voting rights of COLTENE Holding AG. The Company held 14 treasury shares amounting to 0.00 % (0.00 %) at the balance sheet date. Shares pending registration of transfer amounted to 13.34 % (29.20 %) of the total as at December 31, 2019. Disclosure notifications pertaining to shareholdings are published on the electronic publication platform of SIX Swiss Exchange AG. The notifications can be accessed via the following link to the database of the disclosure office of SIX Swiss Exchange: https://www.six-exchange-regulation.com/de/home/ publications/significant-shareholders.html Lock-up Agreements In connection with the acquisition of SciCan Ltd., head quartered in Toronto, Canada, and DentalDrives GmbH, domiciled in Leutkirch, Germany, several lock-up agreements were in place as described below. At the closing of this annual report all lock-up agreements mentioned below have expired. The lock-up agreements below relate to the acquisition of the SciCan Group and the DentalDrives Group by the COLTENE Group from Arno Holding S.à.r.l. and Stefan Helsing (as the sellers), which closed on October 9, 2018 (the acquisition). In the context of the acquisition, OLTENE Holding AG issued on September 14, 2018 a C Prospectus relating to (i) the offering of up to 703 167 registered shares with a nominal value of CHF 0.10 in COLTENE Holding AG (the offer shares) (the offering)

Corporate Governance

and (ii) the listing of up to 1 150 000 registered shares in COLTENE Holding AG to be issued to the sellers as part of the consideration (the consideration shares) in connection with the acquisition. COLTENE Holding AG, the members of the Board

of Directors, and the members of Group Management entered into a lock-up undertaking ending six months after September 28, 2018 (the first day of trading of the offer shares), subject to customary exceptions. In connection with the offering, Esola Beteiligungsver waltungs GmbH and Huwa Finanz- und Beteiligungs AG each individually entered into a shareholder commit ment, which provides for, among other things, a lock-up undertaking ending six months after September 28, 2018 (the first day of trading of the offer shares), subject to customary exceptions. For purposes of disclosure of significant shareholders, Esola Beteiligungsverwaltungs GmbH and Huwa Finanz- und Beteiligungs AG formed a group due to their lock-up and other undertakings under the shareholder commitments. Under the terms of the transaction agreement regarding the acquisition, the sellers and Arthur Zwingenberger have agreed to (i) a lock-up undertaking, beginning on October 9, 2018, the date of the completion of the acquisition and ending, subject to certain circumstances resulting in an earlier termination, twelve months after the completion of the acquisition, subject to customary exceptions, and (ii) a standstill undertaking according to which they will not, for a period of twelve months fol lowing the completion of the acquisition, jointly or individually, directly or indirectly, cause, arrange for or launch a public tender offer or any other offer for shares in COLTENE Holding AG or share options aiming at tak ing direct or indirect control over COLTENE Holding AG. For a detailed description of the above mentioned lock-up agreements please see chapter “Offering and Sale – Lock-up Agreements” on page 84 et seq. of the Prospectus, available in English at Zürcher Kantonal bank, IHKT, P.O. Box, 8010 Zurich, Switzerland (e-mail: prospectus@zkb.ch, phone: +41 44 293 67 35). Cross-Shareholding

Structure of Group Operations Group Management of the reporting year The COLTENE Group is operationally headed by Group Management. COLTENE Group Management, chaired by Martin Schaufelberger as CEO, consists of Gerhard Mahrle, CFO, who acts also as deputy CEO, Werner Mannschedel, Vice President R&D, Quality Management, and Regulatory Affairs, Werner Barth, Vice President Marketing, and Christophe Loretan, Vice President Sales. On November 1, 2018, Stefan Helsing joined Group Man agement as COO (Chief Operating Officer) to represent the new locations and product groups of SciCan and Micro-Mega that were acquired by COLTENE on Octo ber 9, 2018. Stefan Helsing was previously Executive Chairman of the Sanavis Group, to which SciCan and Micro-Mega belonged. Group Management is responsible for the operational management of the holding company and the COLTENE Group. The Group is managed by the Board of Directors through Group Management. The Board of Directors and Group Management are assisted in their work by cen tral Group functions. The separation of responsibilities between the Board of Directors and Group Manage ment is explained on page 39. Changes of Group Management effective on January 1, 2020 On December 31, 2019, Werner Mannschedel, Vice President R&D, Quality Management, and Regulatory Affairs, retired and on January 1, 2020, the Board of Direc tors nominated Martin Schlüter and John Westermeier as members of Group Management team. Martin Schlüter, responsible for R&D/Innovation joined the COLTENE Group in 2010. In his former functions he was managing the local R&D teams at the COLTENE pro duction sites in Altstätten, Switzerland, and Langenau, Germany. John Westermeier, now responsible for Sales / Marketing Communication of North America, the largest single market of the COLTENE Group, was before CEO and head of sales of the SciCan Group. He joined COLTENE in October 2018. Since January 1, 2020, Christophe Loretan is Vice President Sales / Marketing Communication Europe and Rest of the World (ROW) and Werner Barth became Vice President Product Management / Group Marketing.

COLTENE Holding AG has no cross-shareholding

arrangements with other companies.

Corporate Governance

Group structure and management organization of the COLTENE Group as per January 1, 2020: Board of Directors COLTENE Holding AG Group Management Martin Schaufelberger CEO

Operations

R&D/ Innovation

Product Management/ Group Marketing

Sales/ Marketing Communication North America

Sales/ Marketing Communication Europe/ROW

CFO

Stefan Helsing

Martin Schlüter

Werner Barth

John Westermeier

Christophe Loretan

Gerhard Mahrle

SciCan Ltd. Coltène/Whaledent Inc. Coltène/Whaledent AG Coltène/Whaledent GmbH + Co. KG Micro-Mega SA Vigodent SA Kenda AG Principal Participations

Capital Structure Information about the capital structure can be found in COLTENE Holding AG’s Articles of Incorporation, in the Financial Statements of COLTENE Holding AG as well as in the Investor Relations section on page 6 of this report. Capital Details on the capital are included in the COLTENE Holding AG’s financial statements on pages 98 and 99.

Group Functions

Authorized or Conditional Capital in Particular According to Paragraph 3 para. 9 of the Articles of Incor poration, the Board of Directors shall be authorized to increase the share capital of COLTENE Holding AG in an amount not exceeding CHF 6842 (which corresponds to approximately 1.14 % of the current share capital) at any time until September 13, 2020, by way of issuance of up to 68 420 registered shares with a nominal value of CHF 0.10 each to be fully paid in. Increases in partial amounts shall be permitted. The registered shares to be newly issued are subject to the registration restrictions set forth in Paragraph 4 of the Articles of Incorporation. The time of issuance of the new shares, the issue price and subscription price, the nature of contributions, and the starting date of dividend entitlement will be deter mined by the Board of Directors. The authorized share capital must be used exclusively for the acquisition of the SciCan group of companies based in Toronto, Canada. In doing so, the Board of Directors shall be authorized to exclude the shareholders’ subscription rights and to allocate these to the sellers of the SciCan group of companies based in Toronto, Canada. COLTENE Holding AG has no conditional capital.

Corporate Governance

Changes in Capital The changes in equity of COLTENE Holding AG that occurred during the last three financial years are shown in the table below. Treasury shares are recognized at weighted average cost and deducted from shareholders’ equity at the time of acquisition. Changes in equity In CHF 1000

31.12.2019

31.12.2018

31.12.2017

Share capital

598

422

Statutory reserves Capital contribution reserve without foreign reference Capital contribution reserve with foreign reference Capital contribution reserve Reserves for treasury shares Net income brought forward Total

49 983

67 907

101 877

101 876

151 860

169 783

–1

–303

34 915 187 456

30 037 200 199

33 785 34 291

On September 27, 2018, COLTENE Holding AG com pleted an ordinary capital increase as the first of two capital increases to partially finance the acquisition of SciCan Ltd. and DentalDrives GmbH. The Company issued 675 000 shares with a par value of CHF 0.10 each as part of a rights offering “at market” to existing and new shareholders at an offer price of CHF 104. COLTENE Holding AG generated gross proceeds of CHF 70 200 000. This corresponds to net proceeds of CHF 69 546 000. The listing and first day of trading of the offer shares were set to September 28, 2018. The payment of the offer price against delivery of offer shares was made on October 2, 2018. On the closing date of the transaction on October 9, 2018, to further finance the transaction, the Company issued 1 081 580 consideration shares with a par value of CHF 0.10 each at an issue price of CHF 94.29 to the sellers of SciCan Ltd. and DentalDrives GmbH against contribution in kind of all shares in SciCan Ltd. in the course of a capital increase out of authorized share capital. The transac tion cost for this second capital increase amounted to TCHF 1571. The sellers (Arthur Zwingenberger’s Arno Holding S.à.r.l. and Stefan Helsing) hold 18.1 % of the total capital and voting rights of COLTENE Holding AG after completion of the transaction. These considera tion shares are locked-up for a period of twelve months, which started on October 9, 2018. After the completion of both capital increases, the share capital of COLTENE Holding AG amounts to CHF 597 558, divided into

5 975 580 registered shares with a par value of CHF 0.10 each.

Based on the Annual General Meeting’s decision on April 30, 2019, the Company distributed a dividend of CHF 3.00 (previous year CHF 3.00) per share paid out to its shareholders on May 7, 2019, from capital contribution reserves. The total amount paid was TCHF 17 924 (previous year TCHF 12 654). Shares and Participation Certificates 2.534.325 ISIN: CH0025343259 Symbol: CLTN COLTENE shares security no.:

The Company’s share capital consists of 5 975 580 (previous year 5 975 580) registered shares with a par value of CHF 0.10 each (previous year CHF 0.10). All shares are fully paid up and entitled to dividends. They entitle the holder to one vote at the General Meeting. The right to apply the special rules concerning treasury shares held by the Company is reserved, particularly in relation to the exemption from the entitlement to dividends. Other than set out above, there is no addi tional conditional or authorized capital. Due the transition of the accounting standard from IFRS to Swiss GAAP FER in 2019, the shares of COLTENE Holding AG are traded in the Swiss Reporting Standard, effective as of July 1, 2019 (first trading day of the OLTENE shares in the Swiss Reporting Standard). C Before that date the shares were traded in the Inter national Reporting Standard. The shares of COLTENE Holding AG will remain in the indices of the SPI family as well as in the two SXI-indices, SXI Life Sciences and SXI Bio+Medtech of the SIX Swiss Exchange. Profit-Sharing Certificates COLTENE Holding AG has not issued any profit-sharing

certificates Restrictions on Transferability of Shares and Nominee Registrations According to Paragraph 4 of the Articles of Incorporation, only individuals who are registered in the share register may be recognized as the owners or beneficiaries of traded shares. Registration of ownership may be refused only in cases where the purchaser does not expressly

Corporate Governance

declare that he has acquired the shares for his or her own account. The Board of Directors may cancel a registration of a shareholder or nominee in the share register, after hearing the respective parties, if the entry was made based on false declarations. The relevant party is to be immediately informed of this cancellation. The Board of Directors may define principles for the registration of fiduciaries or nominees and stipulate the necessary rules to guarantee compliance with the aforementioned principles. Convertible Bonds and Warrants/Options COLTENE Holding AG has no outstanding convertible

bonds or options. Board of Directors Members of the Board of Directors On December 31, 2019, the Board of Directors of COLTENE Holding AG consisted of seven members. The Articles of Incorporation stipulate a minimum of three.

The personal details together with the other activities and vested interests of individual members of the actual Board of Directors are listed on pages 41 to 45. Election and Term of Office The members of the Board of Directors are elected by the shareholders for a period of one year. At the end of their term of office, members may be re-elected. There is no limit to the period of office or age of mem bers of the Board of Directors. The members of the Board of Directors are elected person by person. The Chairman of the Board of Directors is elected by the shareholders for a period of one year. In the event of incapacity of the Chairman, the Chairman of the Audit and Corporate Governance Committee will temporarily assume the role of the Vice Chairman of the Board of Directors. Restrictions on Activities outside of COLTENE Group Restrictions on activities outside of the COLTENE Group of the members of the Board of Directors are governed in Paragraph 18 of the Articles of Incorporation.

The Extraordinary General Meeting of shareholders on September 14, 2018, expanded the Board’s know-how by electing Allison Zwingenberger, a former board member of SciCan Ltd., Toronto, Canada, specializing in infection control in the dental industry with additional experience in information technology and technology in general. Allison Zwingenberger is professor at the Department of Veterinary Radiology at the University of California, Davis, USA, and the daughter of Arthur Zwingenberger, the founder and former principal owner of SciCan and Micro-Mega.

Internal Organization Allocation of Tasks within the Board of Directors The Board of Directors is ultimately responsible for the management of the Company and the supervision of the persons in charge of the management. The Board of Directors represents the Company and takes care of all matters that are not delegated by law, the Articles of Incorporation, or the organizational regulations to another body.

All Board members are non-executive and none of the members of the Board of Directors was a member of the management of the Group or a Group company in the past three financial years. None of the Board members has a significant business relationship with OLTENE Holding AG or a Group company. In 2018, the C law firm Lenz & Staehelin, Zurich, where Astrid Waser is partner, received CHF 790 000 (2019: CHF 13 000) for legal advice. Lenz & Staehelin acted as an advisor to the Board of Directors and Group Management during the transaction (due diligence, transaction agreement, capi tal increases, bank financing) in regard of the acquisi tions of Kenda, SciCan Ltd., and DentalDrives GmbH.

The Board of Directors’ main duties can be summarized as follows: – Determination and formulation of the business strategy – Purchase and sale of participations or establishment and liquidation of Group companies – Approval of investments in and divestments of fixed assets exceeding CHF 200 000 in value – Approval of intercompany loans in excess of CHF 400 000 per fiscal year per group company – Definition of COLTENE Group’s finance strategy – Determination of financial accounting and reporting, financial control, and financial planning – Definition of COLTENE Group’s organizational structure

Corporate Governance

– Appointment of the persons in charge of the

anagement and their supervision m – Approval of the Auditor’s report and Annual Report as well as preparation of the General Meeting of Shareholders and the execution of its resolutions Membership of the Committees of the Board of Directors, their Duties and Responsibilities The Board of Directors has delegated the operational management to Group Management headed by the Chief Executive Officer (CEO). The Chairman of the Board of Directors organizes and manages the work of the Board of Directors. The permanent committees of the Board of Directors are composed as follows: Audit and Corporate Governance Committee The Audit and Corporate Governance Committee has been set up by the Board as follows: Chairman: Erwin Locher Members: Jürgen Rauch and Astrid Waser The Audit and Corporate Governance Committee assists the Board of Directors in its supervisory duties and has to perform the following main tasks and duties: – Approval of the auditing program and audit fees and form a judgment of the effectiveness of the external audits – Review, amendment, and approval of the risk man agement assessment and system as well as control of the fulfillment of defined measures – Review and assessment of the functioning of the internal control system and control of the fulfillment of corrective actions – Review of the consolidated financial statements as well as interim statements intended for publication – Regular review of the principles concerning Corporate Governance – Proposals to the Board of Directors of amendments to the Articles of Incorporation or internal regulations if necessary

Nomination and Compensation Committee The Nomination and Compensation Committee is elected every year by the Annual General Meeting. The Nomination and Compensation Committee has been composed as follows: Chairman: Matthew Robin Members: Nick Huber, Roland Weiger The Nomination and Compensation Committee carries out the following duties: – Recommendation of the remuneration of the members of the Board of Directors – Definition of the principles for the remuneration of the members of Group Management and submission of these to the Board of Directors for approval – Definition of principles for the selection of candidates for election or re-election to the Board of Directors – Preparation of the selection and assessment of the candidates for the position of the CEO – Approval of appointments of members of the senior management – Approval of the remuneration to be paid to the senior management – Approval of the general guidelines for the Human Resources management of the Group – Yearly elaboration of the compensation report to be presented to the AGM Working Methods of the Board of Directors and its Committees The Board of Directors meets annually for at least four ordinary, mainly one-day meetings. Extraordinary meet ings may be held as necessary. Every member of the Board of Directors is entitled to request an immediate meeting, if he/she names its purpose. In 2019, the Board of Directors met seven times (previous year ten times). These meetings lasted in average four to eight hours. In one meeting, the Board of Directors discussed the Group Strategy together with the enlarged Group Management during a two-day workshop. The Audit and Corporate Governance Committee met three times (previous year twice) for usually a three hours’ meeting. The Nomination and Compensation Committee met also three times (previous year twice) for a two hours meeting.

Corporate Governance

Meetings are summoned in writing by the Chairman. An invitation together with a detailed agenda and documentation is sent to all participants normally seven days in advance of the date set for the meeting. As a rule, the Chief Executive Officer and the Chief Financial Officer attend meetings of the Board of Directors as well as meetings of the committees. And the COO usually participates in the Board of Directors’ meetings only. In order to ensure that the Board of Directors has sufficient information to make decisions, other members of Group Management or other members of staff or third parties may also be invited to attend. The Board of Directors is quorate if all members have been duly invited and the majority of its members take part in the decision-making process. Members may participate in deliberations and the passing of reso lutions by telephone, by video conference, or other suitable electronic media if all participants are in agree ment. The decisions of the Board of Directors are taken on the basis of the votes submitted. In the event of a tie, the Chairman has the casting vote. Decisions may also be made in writing. Proposals may also be sent to all members and they are regarded as passed if the majority of members agree unconditionally and no member insists on discussion of the issues in question in a formal meeting. Members of the Board of Directors are obliged to leave meetings when issues are discussed that affect their own inter ests or the interests of persons close to them. All proposals and decisions are entered in the minutes to the meeting of the Board of Directors and its committees. The minutes also contain a summary of important requests to speak and any deliberations.

Definition of Areas of Responsibility The areas of responsibility between the Board of Directors and Group Management are defined in OLTENE Holding AG’s organizational regulations and C can be summarized as follows: with the exception of decisions which according to article 716a of the Swiss Code of Obligations are part of its inalienable and non-transferable duties, and those additional duties listed on pages 37 to 39, the Board of Directors has delegated the executive control of COLTENE Group and, with it, operational management of the entire COLTENE Group, to Group Management. Information and Control Instruments vis-à-vis Group Management As a rule, Group Management updates the Board of Directors on operations and COLTENE Group’s financial position every month. In addition, the CEO and CFO report on business and all matters of relevance to the Board of Directors at each meeting of the Board of Directors. Every member of the Board of Directors has the right to ask any member of Group Management for information about matters within his remit, even out side meetings. The Chairman of the Board of Directors is also informed by the CEO about all businesses and issues of a fundamental nature or of special importance. Based on an approved Risk Management policy by the Board of Directors, an extensive system for monitoring and controlling the risks linked to the business activities is in place. Group Management is responsible for the risk identification, analysis, controlling, reporting and monitoring the implementation. The Board of Direc tors reviews once a year the risk management and the results of implemented corrective actions. Based on an approved Internal Control System policy by the Board of Directors, the internal control mecha nisms are reviewed and documented based on defined requirements. At least once a year a member of the Audit and Corporate Governance Committee reviews in detail the assessments made and corrective actions implemented. These findings are reviewed regularly by the Board of Directors.

Corporate Governance

Set out below are the names, position, age, year of first election, and committee memberships of the Board of Directors: Membership of the Board of Directors 2019 Members

Nick Huber Erwin Locher

Year of

Audit and

Nomination and

Compliance Committee

Compensation Committee

Function

Born in

first election

Chairman

1964

2005

Member

1953

2009

Chairman Member

Jürgen Rauch

Member

1967

2016

Matthew Robin

Member

1965

2006

Astrid Waser

Member

1971

2017

Roland Weiger

Member

1961

2013

Allison Zwingenberger

Member

1970

2018

Member

Chairman Member Member

Corporate Governance

Board of Directors The Board of Directors of COLTENE has committed itself to maintaining the highest standards of integrity and transparency in its governance of the Company.

Matthew Robin

Allison Zwingenberger

JĂźrgen Rauch

Nick Huber

Astrid Waser

Roland Weiger

Erwin Locher

Corporate Governance

Nick Huber – Chairman of the Board of Directors – Completion of the Stanford Executive Program – Swiss citizen, born in 1964 Professional background (main stages) 1990 – 1995 IBM (Switzerland) AG, Zurich, Account Manager 1995 – 2016 SFS Group AG, Heerbrugg, different management positions Other important activities and vested interests – Member of the Board of Directors of SFS Group AG, Heerbrugg – Member of the Board of Directors of Gurit Holding AG, Wattwil – Member of the Board of Directors of Huwa Finanzund Beteiligungs AG, Heerbrugg

Matthew Robin – Chairman of the Nomination and Compensation

Committee – M. Eng. in Chemical Engineering, Imperial College,

University of London – British and Swiss citizen, born in 1965 Professional background (main stages) 1987 – 1998 Lonza Fine Chemicals, Basel, various functions in the US and in Switzerland (last function: Business Director US Custom Manufacturing) 1998 – 2003 Disetronic Holding AG, Burgdorf, various senior management functions (last func tion: Head Disetronic Injection Systems) 2003 – 2006 Ypsomed Holding AG, Burgdorf, CEO 2007 – 2011 Tecan Holding AG, Männedorf, Divisional Head Liquid Handling & Robotics Since 2011 ELSA/Mifroma, Estavayer-le-Lac, CEO

Key knowledge and experience – International and strategic management – many

years of operational leadership experience in man agement positions in the SFS Group and longtime experience as member of the board of international companies. – Human resources – longtime operational respon sibility of the human resources department of the SFS Group. – Marketing and sales – operational management experience as divisional head of direct and indirect consumables business.

Other important activities and vested interests Matthew Robin has no other important activities and vested interests. Key knowledge and experience – International and strategic management – longtime operational and strategic leadership experience in the medical device and other regulated international businesses. – Manufacturing, innovation, and human resources – many years of experience as business director and CEO of large producing companies. – Medtech and digital innovation – know-how and active access to networks in technology and marketing.

Corporate Governance

Erwin Locher – Chairman of the Audit and Corporate Governance Committee – Economist, University of Basel, MBA, University of Toronto (Rotman)/University of St. Gallen – Swiss citizen, born in 1953 Professional background (main stages) 1979 – 1982 Sandoz AG, Basel, Internal Auditor 1982 – 1986 Mibelle AG, Buchs (subsidiary of Migros), Head Logistics 1986 – 1987 Zellweger AG, Uster, Treasurer 1987 – 1991 Mibelle AG, Buchs (subsidiary of Migros), Vice President Finance 1991 – 1996 Allo Pro AG, Baar (subsidiary of Sulzer Medica), Vice President Finance, and then President 1996 – 2004 Mathys Medical AG, Bettlach, CEO and President Synthes Division

Roland Weiger – Prof. Dr. med. dent., University of Tübingen, Germany – German and Swiss citizen, born in 1961 Professional background (main stages) 2000 – 2002 University of Tübingen, Professor of Endodontology 2002 – 2011 Chairman of the Research Committee, European Society of Endodontology (ESE) Since 2002 University of Basel, Professor and Director, Clinic of Periodontology, Endodontology, and Cariology 2012 – 2015 University of Basel, Director of the Department of Dental Medicine Since 2016 University Center of Dentistry (UZB), Basel, Director of the University Dental Clinics and member of the Executive Board Other important activities and vested interests

Other important activities and vested interests – Chairman of the Board of Directors of Thommen Medical AG, Grenchen – Member of the Board of Directors of Mathys Medical AG, Bettlach Key knowledge and experience – International and strategic management, marketing and sales – experience as former CEO of a global medical device company. – Financial management, audit, and compliance – many years of experience as Vice President of finance in a national and international company. – Dental industry – operational responsibility for the COLTENE Group as CEO ad interim in 2011/2012.

– Member of the Expert Commission of the Swiss

ociety for Preventative, Restorative, and Esthetic S Dentistry (SSPRE) – Member of the Board of the Swiss Society of Periodontology (SSP) – Member of the Swiss Examining Board (federal examen in dentistry) Key knowledge and experience – Expertise in general dentistry and specialized con servative dentistry – longtime leadership experience as chairman of a dental department and higher-level clinical university institution. – Experience in dental technology and dental market – profound expertise in research, teaching, and clinical procedures as professor in conservative dentistry and professional competence as practicing dentist spe cialized in endodontology and restorative dentistry.

Corporate Governance

Jürgen Rauch – Business economist, University of Innsbruck – Austrian citizen, born in 1967 Professional background (main stages) 1993 – 1994 Pittra Inc, New York, various Management functions 1994 – 2004 Rauch Hungaria Kft, Budapest, General Manager Since 2004 Rauch Fruchtsäfte GmbH & Co OG, Rankweil, CEO Other important activities and vested interests Jürgen Rauch has no other important activities and vested interests. Key knowledge and experience – Production and distribution – long lasting experience in building up and in general management of an inter national bottling company for liquid consumables. – Marketing and branding – many years of experience in the positioning and marketing of an international renowned brand in the consumables industry.

Astrid Waser – Dr. iur., attorney-at-law, LL.M., University of Lausanne – Swiss citizen, born in 1971

Professional background (main stages) 2002 – 2011 Lenz & Staehelin, Zurich, Associate 2004 Foreign Associate, Brussels Since 2012 Lenz & Staehelin, Zurich, Partner Other important activities and vested interests Astrid Waser has no other important activities and vested interests. Key knowledge and experience – Legal affairs and compliance – proven expert in com

petition and procurement law and long-standing experience in counselling firms in the field of business law, in particular regarding internal and regulatory investigations and compliance matters.

Corporate Governance

Allison Zwingenberger – DVM, University of Guelph – Canadian and German citizen, born in 1970 Professional background (main stages) Since 2005 University of California, Davis, Professor of Veterinary Radiology 2006–2018 SciCan Ltd., Toronto, Member of the Board of Directors 2015–2017 American College of Veterinary Radiology (ACVR), President CT/MRI Society 2016–2018 European College of Veterinary Diagnostic Imaging (ECVDI), President Since 2018 University of California, Davis, Cancer Center, Co-Director in Vivo Translational Imaging Shared Resource Other important activities and vested interests Allison Zwingenberger has no other important activities and vested interests. Key knowledge and experience – Experience as board member of SciCan Ltd.,

s pecializing in infection control in the dental industry. – Professor at a leading school of veterinary medicine with experience in leadership, healthcare, and educa tion. – Experience in biomedical science as an NIH-funded clinician researcher in translational imaging with a master’s degree in Clinical Research

Corporate Governance

Group Management Group Management of COLTENE has committed itself to the highest principles of sustainability, integrity, and responsibility that build the foundation of COLTENEâ€™s corporate culture.

Christophe Loretan

Stefan Helsing

Gerhard Mahrle

Martin Schaufelberger

Martin SchlĂźter

John Westermeier

Werner Barth

Corporate Governance

Martin Schaufelberger – Chief Executive Officer COLTENE Group (since 2012) – Electrical Engineer, Fachhochschule für Technik, Rapperswil – MBA Marketing, City University of Seattle, Zurich and Seattle – Swiss citizen, born in 1964 Professional background (main stages) 1988 – 1998 Zellweger Uster AG, Uster, various functions in Switzerland and Japan (last function: General Manager Strategic Marketing) 1998 – 2001 Kunststoff Schwanden AG, Schwanden, Head Marketing and Sales 2001 – 2007 Kunststoff Schwanden AG, Schwanden, Deputy CEO 2007 – 2012 Kunststoff Schwanden AG, Schwanden,

Gerhard Mahrle – Chief Financial Officer COLTENE Group (since 2014) – lic. oec. HSG, University of St. Gallen – Swiss citizen, born in 1957 Professional background (main stages) 1985 – 1992 Various senior positions in finance at the Galenica Group and the Hilti Group 1992 – 1998 Eugster/Frismag Group, Romanshorn, CFO

1998 – 2000 Batigroup Holding AG, Basel, CFO 2000 – 2009 sia Abrasives Holding AG, Frauenfeld, CFO 2009– 2013 Kardex AG, Zurich, CFO Other important activities and vested interests Gerhard Mahrle has no other important activities and vested interests.

CEO

Other important activities and vested interests – Chairman of the Board of Directors of Zünd Systemtechnik AG, Altstätten.

Corporate Governance

Stefan Helsing – Chief Operating Officer (COO) COLTENE Group (since 2018) – lic. oec. HSG, University of St. Gallen – Swiss citizen, born in 1958

Werner Barth – Vice President Product Management /

Group Marketing COLTENE Group – Member of Group Management since 2015 – Dr. sc. techn. ETH, Zurich – Swiss citizen, born in 1966

Professional background (main stages) 1985– 1994 Management Zentrum St. Gallen and Indevo AB, Management Consultant 1994– 2000 Swissair AG, Zurich, Network Management and CEO Balair-Airline 2000– 2005 STA Travel Ltd., Zurich, CEO 2005– 2008 Hotelplan Management AG, Glattbrugg, Production Management 2008– 2018 Sanavis Group, Toronto and Leutkirch, Executive Chairman Other important activities and vested interests Stefan Helsing has no other important activities and vested interests.

Professional background (main stages) 1999 – 2001 VOLPI AG, Schlieren, Head Business Unit Medical Products 2001 – 2004 HMT High Medical Technologies AG, Lengwil, Product and Sales manager 2005 – 2006 Ziemer Ophthalmic Systems AG, Port, Head Marketing & Sales 2006 – 2013 Ziemer Ophthalmic Systems AG (Ziemer Group), Port, Vice President Sales 2013 – 2015 Coltène/Whaledent AG, Altstätten, Global Director Marketing Other important activities and vested interests Werner Barth has no other important activities and vested interests.

Corporate Governance

Christophe Loretan – Vice President Sales & Marketing Communication EMEA / ROW COLTENE Group – Member of Group Management since 2015 – Dipl. sc. nat. ETH Zurich – MBA University of Rochester, Bern – Swiss citizen, born in 1970

Werner Mannschedel (retired December 31, 2019) – Vice President Quality Management and Regulatory

Affairs COLTENE Group – Member of Group Management since 2015 – Pharmacist and Biologist, University of Erlangen – German citizen, born in 1956

2015 – 2019 Coltène/Whaledent Inc., Cuyahoga Falls, Vice President Global Sales

Professional background (main stages) 1988 – 1992 ROEKO GmbH + Co. KG, Langenau, Head Quality Control and Analytic 1992 – 1998 ROEKO GmbH + Co. KG, Langenau, Head Operations 1998 – 2002 ROEKO GmbH + Co. KG, Langenau, General Manager 2002 – 2007 COLTENE Group, Altstätten, Head European Operations (EMEA) 2007 – 2011 COLTENE Group, Altstätten, President European Operations (EMEA) 2011 – 2012 COLTENE Group, Altstätten, Head Global Operations 2012 – 2015 COLTENE Group, Head Global R&D and Regulatory Manager and General Manager Coltène/Whaledent GmbH + Co. KG, Langenau

Other important activities and vested interests Christophe Loretan has no other important activities and vested interests.

Other important activities and vested interests Werner Mannschedel has no other important activities and vested interests.

Professional background (main stages) 1998 – 2002 Geistlich Pharma AG, Wolhusen, Marketing Manager and Area Sales Manager Division Biomaterials 2002 – 2003 Tillotts Pharma AG, Ziefen, Business Development Manager Pharma/ Gastroenterology 2003 – 2005 Novozymes Switzerland AG, Dittingen, Global Marketing Manager 2006 – 2013 Novozymes Switzerland AG, Dittingen, Customer Solutions Director EMEA 2013 – 2015 Novozymes Switzerland AG, Dittingen, Technical Service and Sales Director EMEA

Corporate Governance

Martin Schlüter (member of Group Management since January 1, 2020) – Vice President R& D / Innovation COLTENE Group – Dr. rer.nat., Dipl. Chem. Westfälische Wilhelms Universität, Münster – German citizen, born in 1972 Professional background (main stages) 2005 – 2007 BEGO Bremer Goldschlägerei Wilhelm Herbst GmbH & Co. KG, Bremen, Manager R&D Department Dental Consumables 2007 – 2009 B EGO Bremer Goldschlägerei Wilhelm Herbst GmbH & Co. KG, Bremen, Manager of Business Unit Dental Consumables & Ceramics 2009 – 2010 B EGO Bremer Goldschlägerei Wilhelm Herbst GmbH & Co. KG, Bremen, Manager R&D and Innovation Management 2010 – 2018 Director R&D EMEA, Coltène/Whaledent AG, Altstätten 2018 – 2019 Director R&D / Innovation, COLTENE Group, Altstätten

John Westermeier (member of Group Management since January 1, 2020) – Vice President Sales & Marketing Communication North America COLTENE Group – B.A. Marketing & Communications Canisius College, Buffalo, NY – US citizen, born in 1965 Professional background (main stages) 1992 – 2007 KaVo America, Brea CA/USA, Director of National Accounts, Regional Manager, Sales Trainer 2007 – 2010 SciCan Inc., Pittsburgh PA, Director of New Product Sales 2010 – 2015 SciCan Inc., Pittsburgh PA, President 2015 – 2019 SciCan Group, Toronto ON, CEO SciCan Ltd. and Head of Sales Other important activities and vested interests John Westermeier has no other important activities and vested interests.

Other important activities and vested interests Martin Schlüter has no other important activities and vested interests.

Corporate Governance

Group Management On January 1, 2020, COLTENE Holding AG’s Group Management consisted of seven persons (in 2019 and 2018 six persons): the Chief Executive Officer (CEO) Martin Schaufelberger, the Chief Financial Officer (CFO) Gerhard Mahrle, who also acts as deputy CEO, Stefan Helsing, Chief Operating Officer (COO), Wer ner Barth, Vice President Product Management / Group Marketing, Christophe Loretan, Vice President Sales / Marketing Communication Europe and Rest of the World (ROW), John Westermeier, Vice President Sales / Marketing Communication of North America, and Martin Schlüter, Vice President R&D / Innovation. For further information regarding the changes in Group Management see page 34 of this report. Members of Group Management The personal details together with the other activities and vested interests of individual members of actual Group Management are listed on pages 46 to 50. Management Contracts No agreements pertaining to the provision of manage rial services exist between COLTENE Holding AG and other companies or natural persons outside the COLTENE Group. Restrictions on Activities outside of COLTENE Group Restrictions on activities outside of the COLTENE Group of the members of Group Management are governed in Paragraph 18 of the Articles of Incorporation. Principles on Compensation Principles applicable to performance-related payments and to the allocation of equity securities, convertible rights, and options, as well as the additional amount for payments to members of Group Management appointed after the vote on the compensation at the General Meeting of Shareholders are governed in Paragraphs 22 et seqq. of the Articles of Incorporation. Loans, credit facilities, and post-employment benefits for members of the Board of Directors and Group Management are governed in Paragraph 28 of the Articles of Incorporation.

Regulations on the vote of the General Meeting of Shareholders on the compensation to members of the Board of Directors and Group Management are gov erned in Paragraphs 13.3 and 21 et seqq. of the Articles of Incorporation. Further information regarding the compensation of the Board of Directors and Group Management is available in the section of the compensation report on pages 58 to 65 of this Annual Report. Shareholders’ Participation Rights Details of shareholders’ participation rights can be found in the Articles of Incorporation. They are available in German as well as in an unofficial translation in English on the website at: https://www.coltene.com/de/investoren-medien/ corporate-governance/ (German version) and https://www.coltene.com/investor-relations/ corporate-governance/ (English version). Voting Right Restrictions and Representation The Articles of Incorporation contain no restrictions on voting rights. Every registered share represented at the General Meeting is entitled to one vote. A shareholder may vote his own shares or be represented at the General Meeting by way of a written proxy. Since the Annual General Meeting 2015, every shareholder can use also the online platform of ShareCommService AG (“Indirect Voting System – IDVS”) in order to grant the independent proxy a power of attorney and to forward his instructions to such independent proxy. Statutory Quorums Unless otherwise determined by law, a General Meeting convened in accordance with the Articles of Incorpora tion is quorate regardless of the number of shareholders attending or the number of shares represented. To be valid and subject to legal or statutory provisions, resolutions require an absolute majority of the votes submitted. Important decisions of the General Meeting as defined in article 704 Paragraph 1 of the Swiss Code of Obliga tions require at least two thirds of the votes present and the absolute majority of the par value of shares repre sented.

Corporate Governance

Convocation of the General Meeting of Shareholders The ordinary General Meeting of Shareholders takes place annually within six months of the end of the Com pany’s financial year. Extraordinary General Meetings can be called by decision of the General Meeting, the Board of Directors, at the request of the auditors, or if shareholders representing at least a tenth of the share capital submit a request in writing, stating the purpose to the Board of Directors. The invitation to the General Meeting of Shareholders is published in the Swiss Official Commercial Gazette. All shareholders whose addresses are registered in the share register are notified by a letter or by e-mail at their choice. Agenda The Articles of Incorporation contain no regulations relating to agendas that differ from those set forth by the law. Entries in the Share Register Shareholders and/or beneficiaries of registered shares are entitled to vote if they are registered in the share register at the time of the General Meeting of Share holders. The Board of Directors shall determine and indicate in the invitation to any General Meeting of Shareholders the relevant cut-off date for registrations in the share register that shall be relevant for the eligibility of any shareholder to participate in and vote at such General Meeting. Changes of Control and Defense Measures Public Purchase Offers The Articles of Incorporation of COLTENE Holding AG do not stipulate an alleviation or exemption for the duty to submit a public offer according to articles 135 and 163 of the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (FMIA) (Bundesgesetz über die Finanzmarktinfrastrukturen und das Marktverhalten im Effekten- und Derivatehandel, FinfraG).

Auditors Duration of Mandate and Lead Auditor’s Term of Office The auditor of COLTENE Holding AG is elected by the Annual General Meeting for a term of one year. In the year under review, Ernst & Young AG, listed as auditor in the commercial register since June 25, 2012, served in this capacity. EY also serves as Group auditors. Rico Fehr has been the lead auditor since that date. In accordance with legal requirements he was replaced after a maximum period of seven years in 2019 by Iwan Zimmermann. Auditing Fees The budget for the audit fees is proposed by the CFO and approved by the Audit and Corporate Governance Committee. The total sum charged during the year under review by EY amounted to CHF 306 000 (CHF 479 000 in previous year) and was related to audit services, which included the audit of the statu tory financial statements of COLTENE Holding AG and of all major subsidiaries, as well as the audit of the consolidated financial statements. The signifi cantly higher audit fee amount of the previous year was owed to the additional audit services that were required due to the first time consolidation of the acquisitions of SciCan Ltd. and DentalDrives GmbH. Audit services are defined as the standard audit work performed each year in order to issue opinions on the Group companies in scope and the consolidated financial statements of the Group, to issue opinions relating to the existence of the Group’s internal con trol system, and to issue reports on local statutory financial statements if required. Also included are audit services that are provided by the Group auditor, such as auditing of non-recurring transactions and implementation of new accounting policies, as well as audits of accounting infrastructure system controls.

Clauses on Changes of Control No change of ownership clauses are in effect at December 31, 2019, at COLTENE Group and senior management level.

Corporate Governance

Additional Fees For non-audit-related services, EY was paid fees totaling CHF 60 000 (CHF 408 000 in previous year). The amount in the previous year was mainly paid for services in connection with the prospectus and the capital increases in order to partly finance the acquisition of SciCan and DentalDrives (review of interim closing 2017 and 2018, assurance reports of the pro forma financial statement 2017 and the pro forma interim financial statement 2018, and comfort letters). EY was not involved in the elaboration of the prospectus. The execution or assistance of EY in the preparation of financial statements, the consolidated financial statements and related documents is not admissible. Supervisors and Control Instruments Pertaining to the Auditors As explained on page 38, the Board of Directors has established an Audit and Corporate Governance Com mittee to monitor the external auditors (statutory and COLTENE Group auditors). The Audit and Corporate Governance Committee, acting on behalf of the Board of Directors, is responsible for overseeing, monitoring, and evaluating the activities of the auditors. The auditor participates regularly in the meetings of the Audit and Corporate Governance Committee, providing oral and written reports on the results of its reviews and audits. In 2019, the auditors participated in two meetings of the Audit and Corporate Governance Committee. The Audit and Corporate Governance Committee checks and evaluates the auditor and makes recommendations to the Board of Directors. The independence of the auditor is ensured by various measures. There is no explicit threshold for non-audit related fees, but they are not allowed to be significant in relation to the audit fees and must be approved by the CFO in order to assure that there is no potential conflict between the audit and non-audit services of the auditor. As part of his reporting for the consolidated and statutory financial state ments, the auditor confirms his independence vis-à-vis COLTENE Holding AG. The performance of the auditor is evaluated by the Audit and Corporate Governance Committee as well as by employees of COLTENE who are in regular contact with the auditor. The assessment is based on criteria such as the professional expertise and know-how, the understanding of the corporate structure and Company-

specific risks, comprehensibility of the audit strategy proposed by the auditor, and diligence in the implemen tation of the proposed audit strategy, as well as the coordination of the auditor with the finance department of the COLTENE Group and the audited entities. In addi tion, the Audit and Corporate Governance Committee reviews the results of the audit and particularly the comprehensive audit report for the consolidated annual financial statements. Based on the performance evalua tion, the Audit and Corporate Governance Committee recommends to the Board of Directors whether EY should be proposed to the Annual General Meeting for re-election. Information Policy COLTENE Holding AG provides its shareholders with information in the form of the Annual Report and Half-year Report. At the publication date of the annual results, COLTENE informs at the annual press and analysts conference and later at the Annual General Meeting in detail about its business activity. At the pub lication date of the half-year results COLTENE informs about the business activity by means of a conference call. Important events are published immediately through press releases and/or letters to shareholders. Further information can be requested at the contact address indicated on page 7 and page 106. Internet Shareholders and other interested parties can obtain information about the COLTENE Group on the Internet at www.coltene.com and subscribe to a news service. Ad Hoc Publicity COLTENE Holding AG maintains regular contact with the financial world in general and with important investors. At the same time, it abides by the legally pre scribed principle of treating all parties equally as regards communication. Relevant new facts are published openly and are available to all interested parties. All press releases and ad hoc publications can be found as follows: https://www.coltene.com/investor-relations/ media-releases/

Corporate Governance

Financial Publications https://www.coltene.com/investor-relations/ financial-publications/ Articles of Incorporation https://www.coltene.com/investor-relations/ corporate-governance/

Non-applicability / negative statement It is explicitly declared that all statements that are not included or mentioned in this report are considered as either not applicable or negative statements according to the directive on information relating to Corporate Governance published by SIX Swiss Exchange AG or the associated commentary.

Corporate Communications and Investor Relations COLTENE Holding AG Corporate Communication/Investor Relation Feldwiesenstrasse 20 9450 AltstĂ¤tten, Switzerland +41 71 7575 54 37 investor@coltene.com For important dates of publications this year, the followÂ ing year and contact addresses refer to page 7.

Corporate Governance

Support

Jason Kuta, Chicago Territory Manager (right), advises dentist Dr. Hany Kurdi (left) on the comparative benefits of different instruments for root canal treatments.

Support

We Do More Than Sell Products COLTENE gives dentists advisory support. After all, end customers should have just theÂ right products that meet their specific needs. New CRM software for managing endÂ user data allows tailoring support interactions more closely to customer needs.

Compensation Report 1 Introduction

1.3 Corporate Governance

This report provides an overview of COLTENE’s com pensation principles and practices. It provides informa tion on the compensation of the Board of Directors and Group Management in 2018 and in 2019. It explains the variable compensation systems and equity partici pation programs and discloses equity participations of Directors and Group Management in the Company.

The Board of Directors proposes candidates for the Nomination and Compensation Committee (NCC) to be elected annually by shareholders at the Annual General Meeting (AGM). Since the AGM 2016, the NCC is composed as follows: Chair: Matthew Robin Members: Nick Huber and Roland Weiger

These principles and practices are designed to: – Align the interests of the leadership team and employees with those of our shareholders – Support our attractiveness as a global employer, helping us to retain and recruit an engaged workforce – Reward individuals according to clear targets – Encourage entrepreneurism, above-market performance, accountability, and value creation

The Board of Directors determines the NCC’s responsi bilities, and passes all resolutions on the Company’s compensation system (see pages 37 to 39). The NCC is entrusted with the design of the compensation system that applies to Directors, Group Management and Senior Management. It reviews the principles and programs for compensation, and ensures that the compensation paid by the Company is based on market- and perfor mance-related criteria. The NCC reports to the Board of Directors on compensation practices as well as on Group Management compensation at least once a year and proposes changes when necessary. Any recom mendations made to the Board of Directors by the NCC are discussed, adjusted if required and formally approved by the Board of Directors. Among other duties, the NCC: – Recommends the remuneration of the members of the Board of Directors – Defines the principles for the remuneration and recommends the remuneration of the members of Group Management and submits these to the Board of Directors for approval – Approves the remuneration to be paid to Senior Management – Prepares the compensation report annualy to be presented to the AGM

We believe that our plan is balanced and in line with current best practices. 1.1 Reporting Standards

The compensation report is written in accordance with the Ordinance Against Excessive Compensation in Listed Companies (VegüV), the standard relating to information on Corporate Governance of the SIX Swiss Exchange, and the principles of the Swiss Code of Best Practice for Corporate Governance of economiesuisse. The compensation paid or granted to Directors and Group Management is presented in our audited Finan cial Report (see page 102). 1.2 Management Structure Annual General Meeting Board of Directors / Nomination and Compensation Committee Group Management Senior Management Employees Fig. 1: Management Structure

Information regarding the Board of Directors and the members of Group Management is available in the Corporate Governance report on pages 42 to 50.

Compensation Report

Recommendation and Decision Responsibilities with regard to Compensation Recom Recipient

mendation

Decision

Approval

NCC

BoD

AGM

Chairman of the Board of Directors Other members of the Board of Directors

NCC

BoD

AGM

CEO

NCC

BoD

AGM

Other members of Group Management

CEO

BoD

AGM

Senior Management

Group Group Management Management

NCC : Nomination and Compensation Committee

BoD: Board of Directors

AGM : Annual General Meeting CEO : Chief Executive Officer

This table describes the recommendation, decision and approval process of the COLTENE Group with regard to compensation of the Board of Directors, Group Management and Senior Management (including the split in fixed and variable components and the approval of the maximum payout). According to the Ordinance Against Excessive Compensation in Listed Companies, effective since 2014, and the Articles of Incorporation of COLTENE Holding AG of October 9, 2018, the com pensation payable to the Board of Directors and to Group Management has to be approved by the Annual General Meeting (AGM). COLTENE has chosen that the AGM approves the compensation for the following financial year. While the NCC recommends the remu neration packages, the Board of Directors decides on the compensation packages that are submitted to the AGM for approval. Group Management sets and approves the compensation for Senior Management within the guidelines set by the NCC. For all other employees, Group Management is responsible for setting the guidelines for compensation; these are implemented by Senior Management. 2 Compensation Principles

2.1 Driving Values through Compensation COLTENE believes that a compensation system based

on value creation encourages sustainable performance, loyalty and entrepreneurship and is thus in the interests of management, employees, and shareholders. We are committed to compensating our staff, management, and Directors in a way that is competitive and rewards sus tainable, short-term and long-term performance with the objective of driving value.

It is COLTENE’s view that the success of a company depends largely on the quality and engagement of its people. A modern compensation system is an important instrument for attracting, retaining and motivating talented people. COLTENE’s compensation system takes these factors into account in that it: – Offers competitive salaries – Fosters a high-performance culture that differentiates and rewards above-average individual performance, both in the short and long term – Links variable long-term compensation to value generated by the Company over the long term based on shareholder expectations – Provides employees with benefits based on good practices and regulations in local markets The system is periodically reviewed by the NCC for effectiveness and adjusted if required. 2.2 Determination Procedure for Compensation

Our policy is to pay employees, management, and Directors a compensation according to their expertise, formal qualifications, skills, experience, and area of responsibility. Key employees and employees with management functions receive a variable compensation component in addition to their fixed compensation. The main target of the variable pay is to share the economic success of the COLTENE Group with them. Benchmark reviews for the remuneration of the Board of Directors and Group Management are conducted regularly by COLTENE, by using independent specialists and/or external studies if appropriate. In the reporting year and the previous year, no benchmark reviews were conducted and NCC did not seek external advice. 2.3 Ethical, Fair Standards COLTENE is committed to fair and equal treatment

of all our employees and seeks to be in full compliance with the regional labor standards. Compensation is not influenced by gender or by non-performance-related criteria other than specific professional experience.

Compensation Report

3 Total Compensation and Compensation Elements

3.1 Fixed Compensation Elements

Total compensation for all employees including manage ment and Directors can be found in the financial section of the Annual Report on page 82.

The fixed compensation elements of the remuneration of Group Management include the following components: – Base salary – Pension plan benefits1 (subject to local practices and regulations) – Other benefits (subject to local practices and regulations)

The compensation of Group Management team mem bers comprises fixed and variable components. The percentage of the variable component depends on the role of each member of Group Management and is proposed by the Nomination and Compensation Com mittee at its own discretion. For the CEO the maximum variable portion is 50 % of the total remuneration. For other Group Management members it varies from 15 % to 50 %. The Board of Directors approves the split. The variable compensation mix for Group Management includes a long-term variable remuneration element, which is paid in shares blocked for three years. Directors receive a fixed annual cash fee and a fixed amount of money in shares, also blocked for three years. 100 % of Directors' compensation is fixed. Their pay includes no variable component. The Directors receive 80 % to 90 % of the fixed compensation in cash and the remaining 10 % to 20 % in shares valued at the volume weighted average share price of the preceding month of the pay date. The split of the total maximum compensation is set as follows: Compensation Elements Board of Directors 80%–90 % short term 10%–20 % long term

100 % CEO 50 %

50 %

80 % short term 20 % long term

Other members of Group Management 50%–85 %

fixed base salary variable

Fig. 2: Compensation elements

15%–50%

80 % short term 20 % long term

short-term: cash long-term: shares (blocked for 3 years)

1 The

Board of Directors is not entitled to a pension plan under Swiss legislation ( BVG ).

Base salary Group Management members receive a base salary in accordance with their role. Other benefits COLTENE’s benefit programs including local pension benefits are an integral part of total compensation and are designed to enable the Company to compete effectively for talent and retain it. Benefits are structured to support COLTENE's overall business strategy, and are aligned with local legislation and practices. Group Management members and certain members of Senior Management, depending on their travel frequency, are entitled to a company car. 3.2 Variable Compensation Elements

The variable component of total compensation for each member of Group Management varies by function (role), seniority, and responsibility. Total variable com pensation is based on one or several quantitative financial targets plus individual performance targets. Quantitative targets Quantitative targets are key performance indicators (KPIs) on which the individual member of Group Management has a direct impact. As a rule, each mem ber of Group Management has two or three quantitative targets to meet. These quantitative targets are based on the budget approved by the Board of Directors for the financial year and are generally selected from the following key indicators:

Compensation Report

– EBIT margin (operating margin before interest

and tax) for the COLTENE Group – Net sales for the COLTENE Group or for the region applicable to the member of Group Management – Net sales for focus products – Net sales for new products Individual targets Individual targets are agreed separately with each member of Group Management and approved by the Board of Directors. These targets measure the perfor mance of each individual member of Group Manage ment. As a rule, each member agrees to meet five indi vidual targets of equal or different weighting. These targets are aligned with the role and responsibilities of each individual member of Group Management and with the Group strategic targets. For example, they may include delivery on specific individual projects, organizational restructurings or product launches or tool rollouts. Attainment of individual targets is reviewed by the Board of Directors at the end of the financial year and rated on a scale of 0–100 %.

Weighting of quantitative criteria The measurement scale for the achievement of quantitative financial targets (company performance and financial targets) extends from 0 % to a maximum of 120 % and is based on a line joining three points as explained in the illustration. Entitlement to a bonus based on financial targets starts at a minimum of 80 % fulfillment of the defined target but it may start at a higher percentage than at 80 % of the defined target. The maximum bonus for the achievement of a single financial target is 150 % of the defined bonus for this single target. Scale of Variable Compensation Elements Variable compensation

150 %

100 %

Weighting by variable compensation component The variable compensation components are weighted as follows: – Each quantitative target has a weighting of 25–50 % – The individual targets have a combined weighting of 20–35 % The exact weighting of individual targets is set annually within these ranges and remains unchanged for the performance measurement period.

Target fulfillment

80 % 100 % 120 %

Fig. 4: Scale of variable compensation (financial targets)

Composition of Group Management Compensation

CEO

Short-term variable compensation paid in cash

Personal targets

EBIT-Margin

Net Sales Focus products New products

Long-term variable compensation in CLTN shares (blocked for 3 years)

Long-term versus short-term variable compensation

Quantitative and personal targets and their weighting Variable percentage

Fixed percentage

Fixed and variable percentage of total compensation

50%

25%–35%

40%–50%

20%–30%

20%

CFO and COO

60%–70%

30%–40%

25%–35%

40%–50%

20%–30%

20%

80% 80%

VP Sales/Marketing

60%–80%

20%–40%

45%–55%

25%–35%

25%–30%

20%

80%

VP R&D/Innovation

70%–90%

10%–30%

10%–20%

25%–35%

20%

80%

Fig. 3: Composition of Group Management Compensation

Compensation Report

Weighting of personal targets The assessment scale for individual personal target achievement is linear and extends from 0 % to 100 %. 80 % achievement of the personal targets means that 80 % of the portion of the variable compensation related to the personal targets will be paid. Total variable compensation and over-achievement of quantitative targets A quantitative financial target might be over 100 % fulfilled and in this case, the portion of the variable com pensation related to this target will be paid up to 150 %, the maximum being achieved when the target fulfillment reached 120 %. However, the total variable compensa tion which results from the sum of the result of all quantitative and personal targets is capped at the maxi mum variable compensation agreed with each mem ber of the management and may in no case exceed the total fixed compensation as defined in section 3 on page 60 and illustrated in fig.2. Long-term component versus short-term component Currently for Group Management, 20 % of the variable component is defined as long-term and is remunerated in the form of shares, which are blocked for three years. 80 % of the variable component is paid in cash (short-term portion). The split between long-term (20 %) and short-term (80 %) percentage of the total variable c ompensation of Group Management is decided periodically by the Board of Directors upon proposal of the Compensation and Nomination Committee at its own discretion. The amount of the long-term portion of the variable bonus of each Group Management team member is divided by the grant price of the COLTENE shares. This results in the total number of shares that are granted for each Group Management team member for the reporting period. The calculation of the grant price is based on the Swiss Performance Index (SPI) of the SIX Swiss stock exchange. This calculation is defined so that if COLTENE shares outperform the SPI, Group Management members are rewarded with a larger number of shares in proportion with the outperformance and in the case of underperformance are penalized in a similar way. The shares are granted at the SPI index price based on COLTENE’s share price. The grant price for the reporting period is calculated based on the year-

end share price of the reporting year. Starting 2012, the reference price for COLTENE shares and for the SPI index are reset to the year-end share price of the prior year every four years forming the bases for the follow ing four-year period. Based on the index price, the relative performance of the SPI is applied to calculate the grant price for COLTENE shares awarded to Group Management team members. The following formula is applied annually to calculate the grant price and the number of shares awarded: Grant price = (CLTN reference share price) × (SPI at 31 December of year of the reporting period) / (SPI reference) For the reporting year 2019, the following values apply: – CLTN reference share price is the year-end share price at December 31, 2015 (CHF 60.90) – SPI at December 31 of the reporting period is the SPI of December 2019 (12 838) – SPI reference is the SPI at December 31, 2015 (9094) The remuneration plan contractually agreed to by all eligible employees dictates that all rights granted in respect of a variable payment shall be immediately, automatically, and definitively forfeited in the case of termination for cause. 3.3 Contract Duration and Notice Period Duration of term of office of the members of the Board of Directors: Each member of the Board of Directors is elected every year at the AGM for one year of service until the next AGM. Notice period for members of Group Management: no member of Group Management has a notice period that exceeds twelve months. 3.4 Other Types of Payment

There are no severance payments, payments in advance, and no specific payments for change-of-control events. In the event of a change of control, the Board of Direc tors decides whether there is full vesting under the long-term component of variable compensation or not.

Compensation Report

4 Remuneration of Directors and Group Management The tables below show the compensation paid to the members of the Board of Directors and of Group Management for the years 2018 and 2019. Remuneration of the Board of Directors In CHF

Other Base remuneration

remuneration

in cash

in shares 1

security 2

Total

Nick Huber

80 000

20 000

14 363

114 363

Erwin Locher

70 000

10 000

7 665

87 665

Jürgen Rauch

60 000

10 000

70 000

Matthew Robin

70 000

10 000

11 438

91 438

Astrid Waser

60 000

10 000

9 647

79 647

Roland Weiger

60 000

10 000

10 017

80 017

Allison Zwingenberger 3

15 000

2 500

2 131

19 631

415 000

72 500

55 261

542 761

Nick Huber

72 000

20 000

14 366

106 366

Erwin Locher

63 000

10 000

7 444

80 444

Jürgen Rauch

54 000

10 000

64 000

Matthew Robin

63 000

10 000

11 445

84 445

Astrid Waser

54 000

10 000

10 024

74 024

Roland Weiger

54 000

10 000

10 024

74 024

Allison Zwingenberger

54 000

10 000

8 893

72 893

414 000

80 000

62 196

556 196

Social 2018

Total 2019

Total 1 The

number of shares granted in 2018 is calculated based on the weighted average share price of the month of May (2019: March) of the subsequent year. paid social security contribution incl. AHV , IV , and ALV . the Extraordinary General Meeting, September 14, 2018, Allison Zwingenberger was elected as a new Board member.

2 C ompany 3 O n

Remuneration of Group Management In CHF

Base remuneration

Variable remuneration 1

Other remuneration Social

Other

in cash

in shares 2

security 3

benefits

Total

2018

Martin Schaufelberger

370 000

296 000

111 276

148 729

19 212

945 217

Other members

1 037 467

333 568

125 235

271 604

48 420

1 816 294

Total

1 407 467

629 568

236 511

420 333

67 632

2 761 511

2019

Martin Schaufelberger

410 007

189 373

49 315

166 921

20 692

836 308

Other members

1 313 413

282 368

73 749

361 748

65 831

2 097 109

Total 4

1 723 420

471 741

123 064

528 669

86 523

2 933 417

1 The

variable remuneration, which includes cash bonus and shares, is not paid out in the reporting period. It is accrued for and paid out in the following year based on the decision of the Board of Directors. value of shares granted is calculated based on the share price at closing of the grant date. For 2018, it was March 19, 2019, and the share price was CHF 99.00. For 2019, it was February 26, 2020, and the share price was CHF 89.50. 3 C ompany paid social security contribution incl. pension funds payments, AHV , IV , ALV , NBU , and KTG . 4 I n 2019, the total compensation increased due to an additional Group Management team member. 2 The

Compensation Report

Approved remuneration of the Board of Directors and Group Management by the AGM On March 28, 2018, the AGM had to approve the remuneration for the Board of Directors and Group Management for the financial year 2019 based on the Ordinance Against Excessive Compensation in Pub lic Corporations (VegüV) and the Articles of Incorpora tion of COLTENE Holding AG of October 9, 2018. Approved remuneration of the Board of Directors for 2019 The AGM approved an aggregate remuneration of the members of the Board of Directors of CHF 560 000 for the financial year 2019. The division into cash and shares was not part of the approval. In total, the Board of Directors received as compensation CHF 476 196 in cash and CHF 80 000 in shares. Compensation paid to the Board of Directors in 2019 in CHF

Total compensation in cash Total compensation in shares Overall compensation

Approved

Actual

compensation

n/a

476 196

n/a

80 000

560 000

556 196

The remuneration of the Board of Directors for 2019 was within the overall approved amount. Approved remuneration of Group Management for 2019 The AGM approved an aggregate remuneration to Group Management of CHF 3 100 000 for the f inancial year 2019. In total, Group Management received as compensation CHF 2 933 417. Although the overall compensation was within the approved amount, the fixed compensation in cash of CHF 2 338 612 exceeded the amount authorized of CHF 2 100 000 for this p urpose. The reason is the appointment of Stefan Helsing as member of Group Management on November 1, 2018, when the total remuneration for 2019 was already approved by the AGM on March 28, 2018. The Articles of Incorporation of COLTENE Holding AG provide for such a case in Paragraph 23 an additional amount of 150% of the average remuneration of the existing members of Group Management. Based on this rule, the maximal approved fixed remuneration for six members is CHF 2 683 000 (= CHF 2 100 000 + CHF 583 000).

Compensation of Group Management in 2019 in CHF Approved

Actual

compensation

2 100 000

2 338 612

583 000

2 683 000

2 338 612

Total fixed compensation in cash Additional approval of fixed compensation in cash1 Total fixed compensation incl. additional approval1 Total variable compensation in cash and shares Overall compensation

1 000 000

594 805

3 683 000

2 933 417

1 Additionally

approved amount according to Paragraph 23 of Articles of Incorporation: 150 % of the average compensation of the existing members of Group Management

The remuneration of Group Management for 2019 was within the approved amounts. Compensation of the Board of Directors and Group Management

Board of Directors

Group Management

AGM 2018

2018

2019

CHF 560 000

CHF 542 761

CHF 556 196

CHF 3 100 000

CHF 3 683 000

CHF 2 761 511

CHF 2 933 417

Approved compensation Actual compensation

Loans In the reporting period, no loans, advances, or credits were granted to any member of the Board of Direc tors or Group Management. Number of shares held by the Board of Directors 31.12.2019

31.12.2018

14 557

14 297

Erwin Locher

5 492

6 162

Jürgen Rauch

407

277

5 365

5 235

Nick Huber

Matthew Robin Astrid Waser, since AGM 2017 Roland Weiger Allison Zwingenberger1 Total Board of Directors

227

1 328

1 198

n/a

27 408

27 266

1 Allison

Zwingenberger was elected at the extraordinary meeting of the shareholders on September 14, 2018

Compensation Report

Number of shares held by Group Management 31.12.2019

31.12.2018

11 799

10 675

Gerhard Mahrle

3 071

2 509

Werner Barth

1 540

1 307

54 170

54 079

2 413

2 262

Martin Schaufelberger

Stefan Helsing, since November 1 , 2018 Werner Mannschedel Christophe Loretan Total Group Management

624

396

73 617

71 228

5 Approval of the Compensation Report

This compensation report provides comprehensive transparency with regard to the Company’s general compensation principles and in particular to the compensation of Group Management and the Board of Directors. The Board of Directors took notice of the compensation report 2019 on the Board of Directors’ meeting of February 26, 2020. It will be presented to the shareholders for consultative approval at the Annual General Meeting on April 2, 2020.

Compensation Report

Report of the Statutory Auditor Report of the Statutory Auditor to the General Meeting of COLTENE Holding AG, Altstätten Report of the Statutory Auditor on the Remuneration Report

We have audited the remuneration report of COLTENE Holding AG for the year ended December 31, 2019. The audit was limited to the information according to articles 14–16 of the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance) contained in the tables in chapter 4 on pages 63 to 65 of the remuneration report. Board of Directors’ Responsibility The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration report in accordance with Swiss law and the Ordinance. The Board of Directors is also responsible for designing the remu neration system and defining individual remuneration packages. Auditor’s Responsibility Our responsibility is to express an opinion on the remuneration report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and per form the audit to obtain reasonable assurance about whether the remuneration report complies with Swiss law and articles 14–16 of the Ordinance.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the remuneration report for the year ended December 31, 2019, of COLTENE Holding AG complies with Swiss law and articles 14–16 of the Ordinance.

Ernst & Young Ltd

Iwan Zimmermann Licensed audit expert (Auditor in charge)

Pirmin Hutter Licensed audit expert

St. Gallen, March 5, 2020

An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuner ation report with regard to compensation, loans, and credits in accordance with articles 14–16 of the Ordi nance. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the remuneration report.

Compensation Report

In Use in the Dental Practice

Dentist Zita Baumeler Savary in AltstĂ¤tten, Switzerland, relies on COLTENE for everything from cleaning products to restoration composites like BRILLIANT EverGlow.

In Use in the Dental Practice

We Meet Our Customers’ Every Dentistry Need COLTENE’s product portfolio is more extensive than ever. It now covers everything needed for root canal procedures: burs to open up a tooth, specialized tools for reaming root canals, sealers, instrument cleaning and disinfection units, and surface disinfection products for use throughout the dental practice.

Content Financials Financials C OLTENE Group Income Statement Balance Sheet Cash Flow Statement Statement of Changes in Equity Notes to Group Financial Statements Group Companies Non-Swiss GAAP FER Measures as Defined by COLTENE Group Statutory Auditor’s Report

72 73 74 75 76 94 95 96

Financials COLTENE Holding AG Income Statement 98 Balance Sheet 98 Statements of Changes in Equity 99 Notes to COLTENE Holding AG 100 Proposed Appropriation of Disposable Profit and Dividend Distribution 103 Report of the Statutory Auditor 104 Important Addresses

106

Financials COLTENE Group

Consolidated Income Statement In CHF 1000

Net sales

2018 Ref.

2019

(restated)

273 828

203 952

Other operating income Changes in inventories of finished goods and work in progress Raw material and consumables used

– 6 56

– 4 721

– 8 5 399

– 5 6 891

Personnel expenses

– 9 8 244

– 7 2 190

Other operating expenses

– 5 1 456

– 3 9 245

Depreciation on tangible fixed assets

– 5 447

– 4 678

Amortization on intangible assets

– 6 53

– 8 86

32 008

25 375

– 3 868

– 2 204

Operating profit (EBIT) Financial income and expenses

Net profit before tax Income taxes

28 140

23 171

– 8 109

– 6 170

Net profit for the period

20 031

17 001

Earnings per share

CHF 3 .35

CHF 3 .61

Diluted earnings per share

CHF 3 .35

CHF 3 .61

The consolidated financial statements have been prepared in accordance with Swiss GAAP FER . Prior-year figures have been adjusted accordingly (see Basis of Preparation, p. 76). The notes are part of COLTENE Group financial statements.

Financials COLTENE Group

Consolidated Balance Sheet In CHF 1000

31.12.2018 Ref.

31.12.2019

(restated)

22 964

20 901

49 023

52 466

Prepaid expenses and deferred income

2 158

2 816

Other short-term receivables

5 001

5 409

Inventories

59 198

55 553

Cash and cash equivalents Trade accounts receivable

Current assets

138 344

137 145

Tangible fixed assets

47 453

42 452

Financial assets

390

391

Intangible assets 1

2 397

1 882

Deferred tax assets 1

Non-current assets Total assets

1 245

1 621

51 485

46 346

189 829

183 491

Short-term financial liabilities

59 286

44 991

Trade accounts payable

11 888

8 529

Other short-term liabilities

5 680

18 047

Short-term provisions

1 464

836

Accrued liabilities and deferred income

14 865

13 988

Current liabilities Long-term financial liabilities Deferred tax liabilities 1 Long-term provisions

93 183

86 391

510

5 069

2 465

1 454

3 , 23

2 461

2 376

Non-current liabilities Total liabilities Share capital Capital reserves Treasury shares Retained earnings 1 Total equity Total liabilities and equity

5 436

8 899

98 619

95 290

598

162 359

180 283

– 1

– 3 03

– 7 1 746

– 9 2 377

91 210

88 201

189 829

183 491

1 Prior-year figures have been adjusted compared with the half-year report 2019 (refer to page 77, table “Adjustments to equity”) The consolidated financial statements have been prepared in accordance with Swiss GAAP FER . Prior-year figures have been adjusted accordingly (see Basis of Preparation, p. 76). The notes are part of COLTENE Group financial statements.

Financials COLTENE Group

Consolidated Cash Flow Statement In CHF 1000

2018 Ref.

Net profit for the period Depreciation of tangible fixed assets and amortization of intangible assets

14 , 16

Change in provisions not affecting the fund Other expenses and income not affecting the fund Change in trade accounts receivable Change in inventories Change of other short-term receivables, prepaid expenses, and deferred income Change in trade accounts payable Change in other short-term liabilities, accrued liabilities, and deferred income Interest paid Interest received Income tax paid Cash flow from operating activities Purchase of tangible fixed assets Proceeds from sale of tangible fixed assets Purchase of intangible assets Proceeds from sale of financial assets Acquisition of subsidiaries (net of cash)1 Cash flow from investing activities

2019

(restated)

20 031

17 001

6 100

5 564

831

– 1 4

11 195

5 451

2 389

– 5 200

– 4 242

5 171

2 876

– 2 427

3 582

– 2 866

– 7 261

10 111

– 7 81

– 4 37

– 1 0 967

– 7 752

23 785

24 630

– 1 1 988

– 1 2 431

232

– 1 310

– 5 45

257

110

– 1 02 949

– 13 074

– 115 436

Proceeds from first capital increase (net of transaction costs)

69 546

Transaction costs of second capital increase

– 1 571

13 453

36 856

Proceeds / Repayments of short-term financial liabilities Proceeds / Repayments of long-term financial liabilities Dividends paid to shareholders

– 4 182

– 1 639

– 1 7 924

– 1 2 654

Proceeds / purchase of treasury shares

302

– 5 85

Cash flow from financing activities

– 8 351

89 953

Effect of exchange rate changes on cash

– 2 97

– 2 86

Change in cash and cash equivalents

2 063

– 1 139

Cash and cash equivalents at beginning of year

20 901

22 040

Cash and cash equivalents at end of year

22 964

20 901

1 For acquisitions in 2018 please refer to pages 80 – 8 2. The consolidated financial statements have been prepared in accordance with Swiss GAAP FER . Prior-year figures have been adjusted accordingly (see Basis of Preparation, p. 76.) The notes are part of COLTENE Group financial statements.

Financials COLTENE Group

Consolidated Statement of Changes in Equity Capital In CHF 1000 Ref. 31.12.2017 according to IFRS

Effect of conversion to FER 1

reserves

Treasury

translation

Goodwill

Retained

retained

Total

capital

(Agio)

adjustments

(offset)

earnings

equity

422

– 31 533

152 816

121 283

121 705

31 533

– 4 1 324

– 1 9 132

– 2 8 923

1.1.2018 according to FER

(restated)1

Net profit of the period Capital increase

Total of

Currency

422

– 41 324

133 684

92 360

92 782

17 001

176

182 508

182 684

Equity transaction costs

– 2 225

Acquisition of treasury shares

– 5 85

Disposal of treasury shares

282

– 1 2 654

Foreign currency differences

– 2 8

Goodwill offset

– 1 89 056

Dividends

598

180 283

– 303

– 28

– 230 380

138 031

– 92 377

88 201

Net profit of the period

31.12.2018 (restated)1

20 031

Acquisition of treasury shares

– 8

Disposal of treasury shares

310

– 1 7 924

600

598

162 359

– 1

572

– 230 380

158 062

– 71 746

91 210

Dividends Foreign currency differences 31.12.2019

Financials COLTENE Group

Notes to Group Financial Statements General The COLTENE Holding AG Board of Directors authorized these financial statements on February 26, 2020, for issue. The financial statements are subject to approval by the Annual General Meeting of Share holders scheduled to take place on April 2, 2020. Reporting Entity COLTENE Holding AG, the holding company of the COLTENE Group (“the Group”), is a stock corporation according to Swiss Code of Obligations. The Com pany’s legal domicile is in Altstätten, Switzerland. OLTENE Holding AG was founded on December 15, C 2005, and has been listed on SIX Swiss Exchange since June 23, 2006. The Group is active in the dental consumables and small dental equipment market. Operating Segments and Products The Group develops, manufactures, and sells mainly via distribution channels a broad and comprehensive range of disposables, tools, and equipment for dentists and dental laboratories. Accounting Policies Basis of Preparation The Group financial statements are based on the indi vidual financial statements of the Group companies. They have been prepared in accordance with all existing guidelines of Swiss GAAP FER (Swiss Accounting and Reporting Recommendations). The consolidated finan cial statements have been prepared under the historical cost convention unless otherwise stated in the follow ing consolidation and accounting policies. The financial year-end date for COLTENE Holding AG, all subsidiaries and the Group financial statements is December 31. All amounts presented are denominated in CHF thou sand (except otherwise noted). Swiss francs are the functional currency of the holding company as well as the presentation currency of the Group. The preparation of financial statements requires the use of certain critical accounting estimates which could impact the assets, liabilities, and contingent liabilities at the balance sheet date as well as income and expenses of the reporting period. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. If subsequently such judgments and estimates made by management differ

from the actual circumstances, the original judgments and estimates made are changed for the year in which the respective circumstances have occurred. Adjustments Due to the First-Time Application of Swiss GAAP FER As disclosed in the Annual Report 2018, the Board of Directors decided to change the accounting framework from IFRS to Swiss GAAP FER. The consolidated finan cial statements 2019 were prepared for the first time in accordance with the guidelines of Swiss GAAP FER. Prior period figures have been restated to conform to the presentation for the reporting period to ensure comparability and therefore, the transition from IFRS to Swiss GAAP FER took place as of January 1, 2018. The accounting and valuation principles applied for the preparation and presentation of financial statements in accordance with Swiss GAAP FER differ from the financial statements 2018, prepared in accordance with IFRS, as detailed below: –– Goodwill from acquisitions is directly offset, as at the acquisition date, with retained earnings in equity in accordance with the allowed treatment under Swiss GAAP FER 30. Under IFRS, goodwill was capitalized and not amortized; goodwill was tested for impair ment annually. In addition under IFRS, all identifiable intangible assets have been valued and capitalized at the acquisition date. Under Swiss GAAP FER, any unrecognized intangible assets as per acquisition are not separated and identified and therefore allocated to goodwill. Under Swiss GAAP FER, transaction costs incurred in connection with acquisitions are treated as part of acquisition costs. Under IFRS, trans action costs were booked to the income statement. –– For Swiss pension plans an economic obligation or a benefit is determined in accordance with Swiss GAAP FER 16 from the financial statements of the pension plan prepared on the basis of Swiss GAAP FER 26. The economic impact from pension plans of foreign subsidiaries is determined in accordance with the valuation methods applied in the respective country. Under IFRS, defined benefit plans were calculated in accordance with the projected unit credit method and recognized in accordance with IAS 19. –– Under Swiss GAAP FER, significant receivables are valued individually the remaining receivables are valued using a flat rate (refer to note 9).

Financials COLTENE Group

–– The stated valuation and balance sheet adjustments have consequences for deferred income taxes in the balance sheet and income statement. –– Accumulated translation differences recognized in equity are offset with retained earnings at the date of conversion. The presentation and structure of balance sheet, income statement, statement of equity, and cash flow statement have been adjusted to meet the require ments of Swiss GAAP FER. The effects of the above stated adjustments on equity and net profit are shown in the following tables: Adjustments to equity In CHF 1000

31.12.2018

31.12.2017

296 170

121 705

Equity according to IFRS Offset expected credit loss effect Offset goodwill from acquisitions 1

95 – 1 72 768

– 3 9 763

– 6 0 212

– 1 561

5 737

6 378

Deferred tax assets and liabilities 2 , 3

19 179

6 023

Equity according to Swiss GAAP FER (restated)2

88 201

92 782

Offset acquired intangible assets for trade marks, technology and customer relations 2 Adjustment pension assets and liabilities

1 As

reported in IFRS Group financial statements 2018. the course of the conversion from IFRS to Swiss GAAP FER , additional intangible assets and deferred taxes have been offset against retained earnings in the balance sheet of December 31, 2017 and 2018, compared with the half-year 2019 report. As per December 31, 2018 the total net effect on equity was TCHF 332. 3 Deferred tax assets and liabilities include deferred taxes on goodwill from acquisi tions, acquired intangible assets for trademarks, technology and customer relations and pension assets and liabilities. 2 In

Adjustments to net profit In CHF 1000

Net profit according to IFRS Adjustment write-off trade accounts receivable

2018 14 911 95

Adjustment amortization acquired intangible assets for trademarks, technology and customer relations Adjustment personnel expense and income Adjustment transaction costs from acquisitions Deferred income taxes Net profit according to Swiss GAAP FER (restated)

1 591 – 1 514 1 525 393 17 001

Scope and Principles of Consolidation The investments in subsidiaries are included in the Group financial statements as follows: –– All subsidiaries which COLTENE controls are fully consolidated. Control is usually presumed where the Group directly or indirectly owns more than 50 % of the voting rights of the subsidiaries. All of the assets and liabilities as well as the income and expenses of these companies are fully included. Minority interests in the consolidated equity and net income are shown separately. All intercompany transactions and balances as well as intercompany profits in inventory and other assets are eliminated on consolidation. –– Those companies purchased during the reporting year are included in the consolidation as at the date on which control was effectively transferred. From the date of transfer of control all previously recognized assets and liabilities as well as contingent liabilities of the Company are valued initially at fair value. Com panies which have been divested during the reporting year are included in the consolidated financial state ments untill the date on which control ceased. –– Joint ventures and investments with voting rights between 20 % and 50 % are recognized using the equity method. They are recognized with the propor tionate equity as per balance sheet date and reported under financial assets in the balance sheet and as equity investments in the notes. The proportionate share of net income is shown as income (expense) in the consolidated income statement. –– Capital consolidation is based on the purchase method (acquisition method). Acquisition costs com prise the consideration paid, including the propor tion of the purchase price retained for contractual representations and warranties, transaction costs, and contingent consideration. The latter is recognized at fair value on the transaction date. The net assets acquired are revalued at the acquisition date and compared with the purchase price, only previously recognized assets are revalued. Any resulting good will is directly offset against equity. This approach is used for both positive and negative goodwill.

Financials COLTENE Group

Foreign Currency Translation Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (functional currency). Transactions conducted in foreign currencies are converted into the functional currency at the exchange rate applicable on the trans action date and re-translated at year-end, e.g. accounts receivable and payable as well as loans in foreign cur rencies are shown at the year-end exchange rates. Gains and losses are reported in the income statement. The statement of balance sheet and income statement of foreign subsidiaries are converted into Swiss francs (presentation currency) upon consolidation at the rate applicable at year-end respectively at the average exchange rate for the year. Differences resulting from the conversion into the Group presentation currency are recognized in equity. In the event of a sale of a subsidiary, foreign currency differences are taken into account as part of the gain or loss resulting from the sale.

Trade Accounts Receivable Accounts receivable in respect of deliveries and services and other accounts receivable are generally due for settlement within 30 to 60 days and therefore are all classified as current. Trade receivables and other receivables are recognized initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at nominal value less impairment, if any. Indications for impairment are: substantial financial problems of the customer, a declaration of bankruptcy, or a material delay in payment. Inventories Inventories are stated at the lower of weighted average cost and net realizable value. The cost of finished goods and work in progress comprises design costs, raw material, direct labor, other direct costs, and related production overheads (based on normal operating capacity). It excludes borrowing costs. Early payment discounts are treated as a deduction of the purchase price.

The most important exchange rates are listed below: The most important exchange rates 31.12.2019

Ø 2019

31.12.2018

Ø 2018

1 USD

0 .9662

0 .9937

0 .9842

0 .9786

1 EUR

1 .0854

1 .1125

1 .1269

1 .1550

1 CAD

0 .7435

0 .7489

0 .7221

0 .7554

Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits with banks and other short-term highly liquid investments with maturities of three months or less. Bank overdrafts are shown in current liabilities in the consolidated balance sheet.

Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Value adjustments are made for obsolete and slow-moving items. Tangible Fixed Assets Property, plant, and equipment are stated on the bal ance sheet at the purchased or manufactured cost less accumulated depreciation. Depreciation is charged using the straight-line method over the estimated use ful lives of the related assets. Land is not depreciated. Leases in which the Company holds all significant risks and rewards of ownership are classified as financial leases. The respective assets are carried as property, plant, and equipment and are depreciated. The corre sponding lease obligations are shown as financial liabilities. Leasing installments are allocated accordingly to capital repayments and interest expenses.

Financials COLTENE Group

Class

Years

Land

no depreciation

Buildings

40 to 50

Building fixtures

10 to 20

Machinery

5 to 12

Office equipment and furniture

5 to 10

Vans, means of transportations

5 to 8

IT hardware

3 to 5

Other tangible fixed assets

3 to 5

Intangible Assets Intangible assets contain software, patents, and others. They are stated at historical costs less amortization on a straight-line basis over the useful life. Intangible assets are amortized over the following periods: Class

Years

Licences

5 to 20

Patents and technical know-how

5 to 20

Software Development cost Other intangible assets

3 to 5 3 to 10

individually

Impairment of Assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carry ing amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and the value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (cash-generating units). Assets that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date except for goodwill, where a previously recorded impairment is not reversed in subsequent periods. Financial Assets Financial assets include loans. They are valued at nomi nal values less any value adjustments. Trade Accounts Payables, Financial Liabilities, and Other Liabilities Trade payables, financial liabilities, and other liabilities are recognized at nominal value.

Provisions Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of resources which can be reliably estimated will be required to settle the obligation. Such provisions are made to cover assurance type warranties and liability claims. Provisions for restructuring measures are made as soon as the corresponding decision is taken and communicated. Cash-out may differ from the amount provided for as it is based on assumptions and estimates available at that time. Off-Balance-Sheet Transactions Contingent liabilities originate from past transactions or events. The reliability of estimation and the probability of the outflow of resources do not meet the require ments to be recognized as provisions. If contingent liabilities lead to a probable outflow of resources and a reliable estimation of the outflow is possible, a corre sponding provision will be recognized. Employee Benefit Obligations Within COLTENE Group, pension plans for employees exist in accordance with the applicable country regula tions. The economic impact of these pension plans on COLTENE Group is determined annually. For Swiss pension plans, economic benefits and / or economic obligations are determined on the basis of the annual financial statement prepared in accordance with Swiss GAAP FER 26. For foreign plans, the economic impact is determined according to country-specific methods. An economic benefit is capitalized if it is permissible and intended to use the surplus of the pension fund for the Company’s future pension expense. An obligation from a pension plan is recognized when the conditions for the recognition of a provision are met. Existing employer contribution reserves are recognized as a financial asset. Changes in the economic benefit or the economic obligation are recognized in the income statement as personnel expenses.

Financials COLTENE Group

Share-Based Payments All members of the Board of Directors receive a fixed amount in shares with a blocking period of three years without any vesting conditions. Group Management receives a variable remuneration. Part of the variable remuneration is paid in shares with a blocking period of three years without any vesting conditions. The valuation of the shares takes place at the grant date, the related expense is recognized immediately in the income statement. For further details see pages 58 to 65 in the compensation report. Income Taxes All taxes payable on income for the financial year are provided for in full at the reporting date and in com pliance with the applicable tax laws. According to the liability method, deferred income tax on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Group financial statements at enacted or substantially enacted tax rates on reporting date is provided in full. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realized or deferred income tax liability is settled. Deferred tax assets are recognized to the extent that future taxable profit will be available to use tax losses carried forward and temporary differences. Net Sales COLTENE generates revenues mainly from sales of

products. These revenues are recognized upon delivery to the customer. Revenue is recorded if risks and rewards of the sold products are transferred to the customer or, when the service has been performed, depending on the terms of the sales contract. Sales are shown as a net amount in the income statement. They represent the total value of invoices to third parties reduced by sales taxes, credits for returns and reduc tions of revenue (primarily rebates and discounts).

Repair and Maintenance Costs Repair and maintenance costs (included in other operating expenses) are recognized in the income statement when they occur. Research and Development Research costs are expensed in other operating expenses as incurred. Development costs are capital ized if they can be determined reliably and if it can be safely assumed that the project in question will be completed successfully and result in future benefits. Development costs capitalized are amortized on a straight-line basis over a maximum period of five years. Earnings per Share Earnings per share are calculated by dividing the profit attributable to shareholders of the Group by the weighted average number of shares issued during the year excluding shares purchased by the Group and held as treasury shares. Dividend and Capital Distribution Dividend distribution to the Company’s shareholders is recognized as a liability in the Group’s financial state ments in the period in which the dividends are approved by the Company’s shareholders, until paid out. Acquisitions Kenda AG, Vaduz (FL) On January 1, 2018, COLTENE Holding AG acquired 100 % of the issued share capital of KENDA AG, an unlisted company headquartered in Vaduz, Liechten stein. KENDA AG is a specialized, international manufacturer of silicone polishing instruments for dentists. The acquisition has enhanced the Group’s Rotary Instruments product portfolio, technology know-how, and sales flows.

Financials COLTENE Group

At the time of acquisition, the values of net assets according to Swiss GAAP FER were as follows: In CHF 1000

Fair value recognized on acquisition

Cash and cash equivalents

1 376

Trade accounts receivable

141

Other receivables and prepaid expenses

Inventories

1 768

Current assets

3 330

Property, plant, and equipment

570

Intangible assets Non-current assets Total assets

SciCan Ltd., Toronto (CA), and DentalDrives GmbH, Leutkirch (D) On October 9, 2018, COLTENE Holding AG acquired 100 % of the issued share capital of SciCan Ltd. and DentalDrives GmbH, both unlisted companies head quartered in Toronto, Canada, resp. Leutkirch, Germany. At the time of acquisition, the values of net assets according to Swiss GAAP FER were as follows: In CHF 1000

Fair value recognized

0 570 3 900

on acquisition

Cash and cash equivalents

5 039

Trade accounts receivable

13 901

Other receivables and prepaid expenses Trade accounts payable Other accounts payable and accruals Tax liabilities

56 187 79

28 486

Current assets

50 609

Property, plant, and equipment

Current liabilities

322

Intangible assets 1

Deferred tax liabilities

103

Deferred tax assets

Provisions

Non-current liabilities

103

Total liabilities

425

Total identifiable net assets at fair value

3 475

3 183

Inventories

6 177 94 1 039

Non-current assets

7 310

Total assets

57 919

Trade accounts payable

3 148

Other accounts payable and accruals

9 373

Tax liabilities Goodwill arising on acquisition

5 906

Purchase consideration transferred 1

9 381

Analysis of cash flow on acquisition Net cash acquired with the subsidiary

1 376

Cash paid

– 9 149

Net cash flow on acquisition

– 7 773

1 Inclusive

transaction costs of TCHF 232 (paid).

The goodwill from the acquisition of Kenda which was offset with equity is CHF 5.9 million.

950

Provisions

513

Current liabilities

13 984

Deferred tax liabilities 1

1 860

Financial liabilities

6 733

Provisions

1 000

Non-current liabilities

9 593

Total liabilities

23 577

Total identifiable net assets at fair value

34 342

Goodwill arising on acquisition 1

183 150

Purchase consideration transferred 2

217 492

Analysis of purchase consideration on acquisition Cash paid

100 215

Ordinary shares issued

112 484

Accrued consideration

3 500

Total purchase consideration

216 199

Analysis of cash flow on acquisition 5 039

Net cash acquired with the subsidiary Cash paid Net cash flow on acquisition

– 1 00 215 – 95 176

1 In

the course of the conversion from IFRS to Swiss GAAP FER , intangible assets and deferred tax liabilities have been adjusted resulting in a higher goodwill in the amount of CHF 183.2 million compared with the half-year report 2019 where the stated goodwill amounted to CHF 182.7 million. 2 Inclusive transaction costs of TCHF 1293 (paid). The goodwill from this acquisition which was offset with equity is CHF 183.2 million.

Financials COLTENE Group

The goodwill is primarily attributed to the expected synergies and other benefits from combining the assets and activities of SciCan Group and DentalDrives Group with those of the Group. For the acquisition, a purchase price of TCHF 100 215 was paid in cash and 1 081 580 of COLTENE ordinary shares at a fair value of TCHF 104 per share were delivered to the sellers. The accrued consideration was paid to the sellers on March 6, 2019. Significant Estimates and Judgments The Group makes judgments and estimates concerning the future. The resulting accounting estimates therefore may not correspond to the actual results. 1 Group-Wide Information Net Sales from Contracts with Customers The Group derives revenue from the transfer of goods and services at a point in time in the following major geographical regions and product lines: Net sales by geographical regions In CHF 1000 EMEA

North America Latin America Asia / Oceania Net sales

2019

2018

98 252

85 291

124 836

75 905

18 089

16 677

32 651

26 079

273 828

203 952

2019

2018

Infection Control

73 646

29 047

Dental Preservation

2 Personnel Expenses The average workforce amounted to 1395 employees (previous year 1045). Detailed information on personnel expenses: Personnel expenses In CHF 1000

2019

2018

Wages and salaries

81 216

61 119

Other personnel expenses

17 028

11 071

Total

98 244

72 190

Personnel expenses include TCHF 310 (previous year TCHF 282) for share-based payment transactions with the Board of Directors and Group Management. 3 Pension Liabilities

Net sales by products and services In CHF 1000

–– The main competitors of the COLTENE Group do not disclose segment results because they are either non-public companies or the dental businesses of large public companies are far too small for the dis closure of their sales or results. COLTENE would be the only player in the market providing such detailed information. –– The disclosure of segment information of the OLTENE Group would provide detailed information C on margins, profitability of product groups, etc. –– Disclosing segment information would also provide information on product cost structures and pricing to competitors.

86 968

73 276

Efficient Treatment

113 214

101 629

Net sales

273 828

203 952

Net sales of TCHF 58 825 (previous year TCHF 41 373) corresponding to 21.5 % of Group net sales (previous year 20.3 %) were generated with one large distribution group. No other major customers exist. In accordance with Swiss GAAP FER 31, the COLTENE Group has decided not to disclose detailed segment rev enue. The disclosure of segment results would lead to considerable competitive disadvantages. COLTENE jus tifies its decision based on the following considerations:

To complement the benefits provided by state-regulated pension schemes, COLTENE maintains additional employee pension plans for a number of subsidiaries. In accordance with local statutory requirements, COLTENE has no obligations to these pension plans beyond the amounts recognized as liabilities in the balance sheet and beyond the regulatory contributions and any recapi talization contributions that may become necessary. The employee benefits expenditure stated only comprises contributions made to the benefit schemes at the expense of the Company. The pension plans with surplus cover are related to the staff pension scheme of Coltène/Whaledent AG and Coltène/Whaledent Vertriebsservice und Marketing GmbH in Switzerland and Kenda AG in Liechtenstein. At December 31, 2019, the coverage rate amounted to 114.2 % for the pension schemes in Switzerland and to 110.0 % for the pension scheme in Liechtenstein.

Financials COLTENE Group

Plan description (Switzerland) Pension plans are regulated by the Swiss Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (LPP/BVG). The pension solution adopted for the Group’s Swiss companies is affiliated to legally independent collective foundations or occupational benefits solutions offered by insurance companies. Plan participants are insured against the financial conse quences of old age, disability, and death. The benefits are financed through regular employer and employee contributions. Emloyees in Switzerland are members of a multi-employer pension institution (Sammelstiftungs anschluss). The most senior governing body of the pension plan is the Board of Trustees, which consists of an equal number of employer and employee representatives.

4 Other Operating Expenses Other operating expenses In CHF 1000

2019

2018

Production expenses

9 601

7 008

Marketing

13 101

9 783

Consulting

5 179

3 642

23 273

18 574

Selling and administration expenses Other expenses Total

302

238

51 456

39 245

In 2019, TCHF 10 894 (previous year TCHF 8149) were spent on research and development and recorded as an expense in the income statement. 5 Financial Income and Expenses Financial results In CHF 1000

2019

2018

and other financial income

170

141

Total financial income

202

169

– 7 81

– 4 35

and other financial expenses

– 3 289

– 1 938

Total financial expenses

– 4 070

– 2 373

Total financial result

– 3 868

– 2 204

Interest income on cash

Plan description (Principality of Liechtenstein) The pension solution adopted for the Group’s Liechten stein company is affiliated to legally independent collec tive foundations or occupational benefits solutions offered by insurance companies. Plan participants are insured against the financial consequences of old age, disability, and death and the benefits are financed through regular employer and employee contributions.

and cash equivalents Exchange rate differences

Interest expenses for bank overdrafts and loans Exchange rate differences

Plan description (France) Pension plans are regulated by French Law on general social security scheme (RGSS). The main post-employ ment defined benefit plans as adopted for the French companies concern the retirement termination benefits. Employee benefits for retirement bonuses and the agreement are based on the rights accumulated at the balance sheet date, according to the scale set out in the collective agreement or the Company-wide agreement. Economic benefit / economic obligation and pension benefit expenses

In CHF 1000

Surplus /

Financial share

deficit

of the organization

Change vs. Contributions prior-year

in the period

Pension benefit expense as part of personnel expense

31.12.2019

31.12.2018

2019

2018

Pension funds without surplus / deficit

2 218

1 649

Pension funds without own assets

1 070

957

163

Total

1 070

957

2 307

2 381

1 745

Financials COLTENE Group

6 Tax Expenses

The Group has the following tax-relevant losses to be carried forward:

Tax expenses comprise the following positions:

Tax losses

Tax expenses In CHF 1000

2019

2018

In CHF 1000

Current taxes

7 141

6 995

Tax losses capitalized

968

– 8 25

8 109

6 170

Deferred taxes Total

Tax expenses Net profit before tax expenses

2019

2018

28 140

23 171

6 242

4 303

623

230

Tax expenses at applicable tax rate of 22 .2 % (18 .6 % ) Effects of non-tax-deductible expenses Effects of tax-exempt income / income taxed at another rate

– 3 04

750

716

597

– 1 25

– 1 29

222

Effects of tax loss not capitalized in current year Effects of tax loss used not capitalized in prior-years

2018

Expiration between 1 and 5 years

336

221

Expiration over 5 years

496

717

Total

832

938

Deferred tax assets of capitalized tax losses

Tax expenses can be analyzed as follows: In CHF 1000

2019

Expiration between 1 and 5 years

104

Expiration over 5 years

121

166

Total

225

217

Tax losses not capitalized Expiration between 1 and 5 years

Expiration over 5 years

28 198

25 674

Total

28 198

25 674

Estimated tax effect of not capitalized tax losses Expiration between 1 and 5 years

Expiration over 5 years

8 618

7 856

Total

8 618

7 856

Effects of change in tax rate on deferred taxes Effects of revaluation of DTA s Tax adjustments prior-years Withholding tax not refundable Other impacts

108

– 1 06

869

140

Actual tax expense

8 109

6 170

Effective tax rate in %

28 .8 %

26 .6 %

Tax losses capitalized in 2019 are largely attributable to the Group company in India. Tax losses not capital ized are mainly attributable to Brazil and Germany. It is not probable that these losses can be utilized and were therefore not capitalized in accordance with Group policy.

The applicable tax rate represents a weighted average rate based on all Group companies. Compared to last year, the applicable tax rate increased from 18.6 % to 22.2 %. This increase is mainly due to the weighting of earnings of entities with higher tax rates. Tax expenses of TCHF 8109 represent an effective tax rate of 28.8 % (previous year 26.6 %) of net profit before tax. For 2019, the difference between applicable and effective tax rate relates to various items (e.g. not capitalized tax losses, non-refundable withholding taxes, non-tax-deductible expenses, etc.).

Financials COLTENE Group

7 Deferred Taxes

9 Trade Accounts Receivable

Deferred tax assets and liabilities are based on the valuation differences between Group valuation and tax valuation in the following financial position. For the calculation of deferred income taxes in the consolidated balance sheet, the expected tax rate per tax subject is applied.

Trade accounts receivable In CHF 1000

2018

(gross)

50 126

53 615

Allowance

– 1 103

– 1 149

Total trade accounts receivable (net)

49 023

52 466

Trade accounts receivable (gross) by maturity

Deferred tax details In CHF 1000

2019 Deferred

Deferred

2018 Deferred

Deferred

tax

assets

liabilities

assets

liabilities

Receivables and accruals Inventories

2019

Trade accounts receivable from third parties

In CHF 1000

2019

2018

35 852

37 414

Past due 1 to 30 days

8 987

12 516

Past due 31 to 60 days

1 869

1 262

Past due 61 to 90 days

345

245

Not due

166

256

376

248

Past due 91 to 120 days

361

522

1 763

396

2 050

636

Past due over 120 days

2 712

1 656

50 126

53 615

2 366

2 037

Property, plant, and

Total

equipment Intangible assets Provisions

591

526

225

217

830

Trade accounts receivable by maturity including allowance In CHF 1000

2019

2018

35 615

37 174

Past due 1 to 30 days

8 976

12 467

Past due 31 to 60 days

1 867

1 239

Offset of deferred

Past due 61 to 90 days

332

244

assets and liabilities

338

507

1 895

835

49 023

52 466

Deferred taxes from losses carried forward Deferred taxes on equity reserves

Total

– 1 500

– 1 548

Past due 91 to 120 days

1 245

2 465

1 621

1 454

Past due over 120 days

8 Earnings per Share

Net profit amounts to TCHF 20 031 (previous year as follows: Earnings per share Weighted number of shares issued at 31 .12 .1

Total

As per December 31, 2019, no trade accounts receivable are pledged (previous year also none).

TCHF 17 001). Earnings per share (EPS) are calculated

10 Financial Assets Financial assets

2019

2018

5 974 802

4 713 749

Earnings per share (based on net profit for the period)

CHF 3 .35

CHF 3 .61

Diluted earnings per share (based on net profit for the period)

CHF 3 .35

CHF 3 .61

1 The

Not due

weighted average number of shares takes into account the weighted average effect of changes in treasury share transactions and the capital increase in prior-year.

In CHF 1000

2019

2018

Loan to third parties

390

391

Total financial assets

390

391

11 Other Short-Term Receivables Other short-term receivables In CHF 1000

2019

2018

Net VAT / Tax receivables

3 600

2 904

Wage and T&E expenses advances

112

126

Prepayments for suppliers

432

763

Deposits

485

414

Other short-term receivables

372

1 202

5 001

5 409

Total

Financials COLTENE Group

12 Prepaid Expenses and Deferred Income

13 Inventories

Inventories are as follows:

Prepaid expenses and deferred income In CHF 1000

2019

2018

Prepaid insurance costs

241

650

Prepaid license fees

351

260

Prepaid exhibition and marketing expenses

726

1 332

787

540

2 158

2 816

Prepaid personnel expenses

Other prepaid expenses and deferred income Total

Inventories (net) In CHF 1000

2019

2018

Raw materials

24 561

19 931

Trade merchandise

13 713

8 333

Work in progress

19 596

12 329

Finished goods

10 654

20 276

Prepayments to suppliers

880

Total inventories gross

69 404

60 885

– 1 0 206

– 5 332

59 198

55 553

Allowances Total inventories net

No inventories are pledged neither at December 31, 2019, nor 2018. 14 Property, Plant, and Equipment Gross values In CHF 1000

Buildings

Assets under

equipment

Land

(incl. inst.)

construction

Total

44 717

3 541

44 300

2 606

95 164

Additions – business combinations

4 441

661

1 644

6 747

Additions

1 347

1 372

9 994

12 713

Disposals

– 6 88

– 1

– 1 045

– 1 7

– 1 751

Currency effects

– 3 67

– 1 6

– 2 37

– 3

– 6 23

Reclassification

351

331

– 6 88

– 6

49 801

4 185

46 365

11 893

112 244

Additions

3 202

5 756

2 382

11 340

Disposals

– 3 000

– 1 504

– 2 5

– 4 529

Currency effects

– 9 09

– 2 6

– 5 83

– 6 1

– 1 579

Reclassification

1 127

– 8 77

11 222

– 1 1 471

50 221

3 282

61 256

2 718

117 477

Buildings

Assets under

equipment

Land

(incl. inst.)

construction

Total

37 083

820

28 848

66 751

Depreciation

2 498

2 128

4 678

Disposals

– 2 96

– 1 019

– 1 315

Value 31.12.2017

Value 31.12.2018

Value 31.12.2019

Machinery and

Accumulated depreciation In CHF 1000

Value 31.12.2017

Currency effects Value 31.12.2018 Depreciation Disposals Currency effects Reclassification Value 31.12.2019

Machinery and

– 2 65

– 6 4

– 3 22

39 020

879

29 893

69 792

2 843

2 604

5 447

– 2 815

– 1 383

– 4 198

– 6 86

– 3 39

– 1 017

– 4 1

– 8 66

907

38 321

31 682

70 024

Buildings

Assets under

equipment

Land

(incl. inst.)

construction

Total

10 781

3 306

16 472

11 893

42 452

Net values In CHF 1000

Value 31 .12 .2018 Thereof in finance lease value 31 .12 .2018 Value 31.12.2019 Thereof in finance lease value as of 31.12.2019

Machinery and

996

11 900

3 261

29 574

2 718

47 453

615

Financials COLTENE Group

Contractual Commitments As per December 31, 2019, no significant contractual commitments to acquire fixed assets were entered into apart from short-term commitments assumed in the normal course of business (previous year TCHF 851).

15 Operating Leasing

Operating leasing and rental commitments not recognized in the balance sheet are as follows: Leasing

Finance Lease The carrying value of plant and machinery held under finance leases and hire purchase contracts at Decem ber 31, 2019, was TCHF 615. Leased assets and assets under hire purchase contracts are pledged as security for the related finance lease and hire purchase liabilities.

In CHF 1000

2019

2018

Not later than 1 year

2 622

2 751

1 to 5 years

8 434

7 888

Later than 5 years

2 115

4 398

Total

13 171

15 037

Total later than 1 year

10 549

12 286

For 2019, lease expenses amounted to TCHF 3882 (previous year TCHF 2467).

Pledged Assets No other property, plant and equipment was pledged as of December 31, 2019 and 2018.

16 Intangible Assets Gross values In CHF 1000

Patents and

Trademarks

technical

Value 31.12.2018

Other

and publishing Development

intangible

Software

know-how

Licences

rights

cost 1

assets

Total

7 852

294

301

282

1 337

297

10 363 1 194

Additions

657

535

Disposal

– 1 3

Currency effects

– 6 6

– 3 3

– 9

– 5

– 3 9

– 6 1

– 2 13

Reclassification Value 31.12.2019

8 430

263

292

277

1 833

236

11 331

and publishing Development

intangible

Accumulated amortization In CHF 1000

Patents and

Trademarks

technical

Value 31.12.2018 Amortization Disposal Currency effects Reclassification Value 31.12.2019

Other

Software

know-how

Licences

rights

cost

assets

Total

7 182

240

279

200

299

281

8 481

346

223

653

– 8

– 6 4

– 2 7

– 9

– 4

– 1 2

– 7 6

– 1 92

7 456

223

286

223

510

236

8 934

and publishing Development

intangible

Net values In CHF 1000

Patents and

Trademarks

technical

Other

Software

know-how

Licences

rights

cost

assets

Total

Value 31 .12 .2018

670

1 038

1 882

Value 31.12.2019

974

1 323

2 397

1 Development

cost charged from third parties.

No impairment was recognized for the periodspresented.

Financials COLTENE Group

17 Theoretical Goodwill

18 Financial Liabilities

The goodwill of a purchased consolidated company is offset with equity at the date of the acquisition. The theoretical amortization of the goodwill is over the useful life of five years. A theoretical capitalization of the goodwill would have the following impact on the consolidated financial statements:

The following tables show details of current bank loans as well as of non-current bank loans. Book values are equal to fair values.

In CHF 1000

2019

2018

230 380

41 324

189 056

230 380

– 3 671

– 8 004

226 709

222 376

2019

2018

Accumulated amortization as of 1.1.

– 47 908

– 40 534

Amortization

– 3 7 997

– 7 374

Accumulated amortization as of 31.12.

– 85 905

– 47 908

Additions from acquisitions 1 Cost (gross) as of 31.12. Accumulated translation adjustments Value as of 31.12. In CHF 1000

In CHF 1000

2019

2018

As of 1 .1 .

174 468

790

As of 31 .12 .

140 804

174 468

Effect on income statement In CHF 1000

2019

2018

20 031

17 001

– 3 7 997

– 7 374

Net profit Theoretical net profit incl. amortization of goodwill

– 1 7 966

9 627

Theoretical book values net In CHF 1000

Equity according to balance sheet

2019

2018

91 210

88 201

Theoretical capitalization of net book value of goodwill Theoretical equity incl. net book value of goodwill 1 Goodwill

Bank loans

2019

2018

59 005

44 991

281

59 286

44 991

Bank loans

153

4 073

Leasing liabilities

357

996

Total non-current financial liabilities

510

5 069

59 796

50 060

2019

2018

Total current financial liabilities

Total financial liabilities Remaining life In CHF 1000

<1 year

281

1 – 5 years

510

5 069

Total non-current financial liabilities

791

5 069

Current bank loans

Theoretical book values net

Amortization Goodwill

In CHF 1000

Leasing liabilities

Theoretical goodwill Value as of 1.1.

Financial liabilities

140 804 232 014

arising on acquisitions in 2018 (see pages 80 – 8 2).

174 468 262 669

In CHF 1000 Maturity

Currency

Interest rate

2019

29 .01 .2020

unsecured

USD

2 .56 %

2 417

19 .02 .2020

unsecured

USD

2 .54 %

966

31 .01 .2020

unsecured

USD

2 .65 %

1 449

03 .02 .2020

unsecured

USD

2 .65 %

1 111

31 .01 .2020

unsecured

USD

2 .60 %

676

29 .01 .2020

unsecured

USD

2 .82 %

676

31 .01 .2020

unsecured

BRL

2 .35 %

31 .01 .2020

unsecured

BRL

2 .40 %

06 .03 .2020

unsecured

CHF

0 .70 %

50 000

06 .01 .2020

unsecured

CHF

0 .72 %

1 500

01 .07 .2020

unsecured

EUR

1 .35 %

31 .12 .2020

unsecured

EUR

0 .70 %

31 .12 .2020

unsecured

EUR

0 .30 %

31 .12 .2020

unsecured

EUR

1 .35 %

31 .03 .2020

unsecured

EUR

0 .00 %

Total

10 59 005

Non-current bank loans In CHF 1000 Maturity

Currency

Interest rate

2019

13 .06 .2022

unsecured

EUR

0 .70 %

17 .07 .2022

unsecured

EUR

0 .30 %

20 .07 .2021

unsecured

EUR

1 .35 %

Total

21 153

Financials COLTENE Group

Current bank loans

20 Other Short-Term Liabilities

In CHF 1000 Currency

Interest rate

2018

Other short-term liabilities

31 .01 .2019

unsecured

USD

0 .03 %

2 460

In CHF 1000

2019

2018

31 .01 .2019

unsecured

USD

0 .03 %

1 476

Net VAT obligations

1 271

1 483

31 .01 .2019

unsecured

USD

0 .03 %

1 132

Current income tax obligations

1 185

4 002

31 .01 .2019

unsecured

USD

0 .02 %

689

Prepayments from customers

271

2 944

31 .01 .2019

unsecured

USD

0 .03 %

689

Reclassification of accounts receivables

713

2 479

31 .12 .2018

unsecured

INR

11 .50 %

435

Other short-term liabilities

2 240

7 139

31 .01 .2019

unsecured

BRL

2 .35 %

Total

5 680

18 047

10 .01 .2019

unsecured

CHF

0 .01 %

34 000

31 .01 .2019

unsecured

CHF

0 .01 %

4 000

23 .05 .2019

unsecured

EUR

2 .50 %

22 .03 .2019

unsecured

EUR

1 .35 %

05 .04 .2019

unsecured

EUR

1 .25 %

31 .03 .2019

unsecured

EUR

1 .30 %

Maturity

Total

44 991

Non-current bank loans In CHF 1000 Maturity

Currency

Interest rate

2018

09 .04 .2023

unsecured

EUR

0 .30 %

200

15 .06 .2022

unsecured

EUR

0 .70 %

116

10 .01 .2022

unsecured

EUR

1 .35 %

31 .03 .2020

unsecured

EUR

0 .32 %

07 .07 .2020

unsecured

EUR

1 .35 %

31 .10 .2021

unsecured

CAD

2 .69 %

3 555

13 .05 .2020

unsecured

CAD

0 .90 %

Total

3 4 073

21 Accrued Liabilities and Deferred Income Accrued liabilities and deferred income In CHF 1000

2019

2018

Accrued bonus, vacations, payroll taxes

6 608

6 677

Accrued sales bonus

1 586

2 127

Accrued social security

937

418

Accrued outstanding invoices

894

739

Other accrued liabilities and deferred income Total

4 840

4 027

14 865

13 988

22 Derivative Financial Instruments Derivative financial instruments Market value 2019 In CHF 1000

Market value 2018

Negative

Positive

Negative

Positive

– 1 9

– 3 5

Total uncommitted credit lines amount to TCHF 150 811 (previous year TCHF 150 919) of which 39 % are used (previous year 30 %). Covenants exist for selected bank loans. Covenants were met for both periods.

Currency-related instruments

Total committed credit lines amount to TCHF 75 000 (previous year 75 000) of which TCHF 50 000 are used (previous year 34 000). Convenants were met for both periods.

Forward exchange rate

The Group intends to repay the bank loans of TCHF 59 005 within less than twelve months and to finance cash needs by renewing existing bank loans and by additional bank loans out of existing credit lines.

The tables show the contract or underlying principal amounts and fair values of derivative financial instruments analyzed by type of contract at December 31, 2019 and 2018. The fair values are determined by reference to market prices or standard pricing models that used observable market inputs at December 31, 2019 and 2018. TCHF 0 (previous year 3901) are related to liabili ties from refund liabilities.

19 Trade Accounts Payable Trade accounts payable In CHF 1000

2019

2018

Trade accounts payable from third parties

11 888

8 529

Total trade accounts receivable (net)

11 888

8 529

Fair value (included in other accounts paya ble and accruals).

contracts by currencies

2019

2018

EUR

6 305

7 212

GBP

– 3 86

– 7 54

USD

871

1 773

All accounts payable to suppliers fall due and will be paid within 120 days.

Financials COLTENE Group

23 Provisions  The column “Provision for guarantees & other provi sions” mainly contains provisions for estimated guarantees for product repairs or product replacement based on past experience for guarantee claims that cannot be insured and are based on the assessment of specific cases. The column “Provision for legal cases” covers the risk of litigation and employment contract termination benefits. For short-term provisions, a capital outflow is expected within one year. A capital outflow from long-term provisions is expected in the next one to five years.

Provisions are as follows: Provisions In CHF 1000 31.12.2017

Additions – business combinations

Provision for guarantees

Provision for employee

& other provisions

benefit obligations

Provision for legal cases

370

168

446

984

1 547

927

2 474

Total

Additions

271

348

Reversals

– 2 59

– 1 63

– 1 04

– 5 26

Used Currency effects 31.12.2018

Additions Reversals

– 2

– 5 0

– 3

– 1 3

– 6 6

1 877

957

378

3 212

766

252

134

1 152

– 5 7

– 1 01

– 5 5

– 2 13

– 1 08

Currency effects

– 7 3

– 3 8

– 7

– 1 18

Reclassification

162

– 1 62

2 567

1 070

288

3 925

Provision for guarantees

Provision for employee

& other provisions

benefit obligations

Provision for legal cases

Total

Used

31.12.2019

Provision by maturity In CHF 1000 31.12.2018

Short-term provisions

671

165

836

Long-term provisions

1 206

957

213

2 376

31.12.2019

Short-term provisions

1 228

236

1 464

Long-term provisions

1 339

1 070

2 461

Financials COLTENE Group

24 Equity

The share capital represents the capital of COLTENE Holding AG. Treasury stock on December 31, 2019, included 14 shares (previous year 3265).  Treasury shares 2019 in CHF

As of 1 .1 . Acquisitions Disposals As of 31 .12 .

Transaction Net market Number

price (Ø)

value

3 265

92 .90

303 324

99 .10

7 928

– 3 331

93 .05

– 3 09 944

93 .43

1 308

2018 in CHF

Transaction Net market Number

As of 1 .1 . Acquisitions Disposals As of 31 .12 .

price (Ø)

value

0 .00 6 200

94 .36

585 045

– 2 935

95 .99

– 2 81 722

3 265

92 .90

303 324

On September 27, 2018, COLTENE Holding AG com pleted the first capital increase to partially finance the acquisition of SciCan Ltd. and DentalDrives GmbH. The Company issued 675 000 shares with a par value of CHF 0.10 each as part of a rights offering “at market” to existing and new shareholders at an offer price of CHF 104.00. COLTENE Holding AG generated gross proceeds of CHF 70 200 000. This corresponded to net proceeds of CHF 69 546 000. The listing and first day of trading of the offer shares were set to Septem ber 28, 2018. The payment of the offer price against delivery of offer shares was made on October 2, 2018. On the closing date of the transaction, on October 9, 2018, to further finance the transaction, the Company issued 1 081 580 consideration shares with a par value of CHF 0.10 each at an issue price of CHF 104 to the sellers of SciCan Ltd. and DentalDrives GmbH as part of a contribution in kind capital increase (second capital increase). At the fair value of CHF 104, the con sideration shares amounted to TCHF 112 484. The trans action cost for this second capital increase amounted to TCHF 1571. The sellers (Arthur Zwingenberger’s Arno Holding S.à.r.l. and Stefan Helsing) held thereafter 18.1 % of the total capital and voting rights of COLTENE Holding AG after completion of the transaction. These consideration shares were locked up for a period of twelve months.

After the completion of both capital increases, the share capital of COLTENE Holding AG amounted to CHF 597 558, divided into 5 975 580 registered shares with a par value of CHF 0.10 each. The outstanding capital consists of 5 975 580 (previous year 5 975 580) registered shares of CHF 0.10 (previous year CHF 0.10) par value per share. All shares are issued and fully paid. There is no additional conditional capi tal. Until September 13, 2020, an amount not exceeding CHF 6842 (corresponding to 68 420 shares) exists as authorized capital (see page 35 for further explana tions). TCHF 2225 of equity issue costs have been deducted

from the proceeds of the capital increase and been taken to capital reserves. The distribution of CHF 3.00 per share will be proposed to the General Meeting on April 2, 2020. The non-distributable reserves amounted to TCHF 1542 as at December 31, 2019.

Based on the General Meeting decision on April 30, 2019, the Company paid out from capital contribution reserves CHF 3.00 (previous year CHF 3.00 paid as dividend) per share to its shareholders on May 7, 2019. The total amount paid was TCHF 17 924 (previous year TCHF 12 654).

Financials COLTENE Group

25 Transactions with Related Parties Related parties (persons and companies) are board members, members of Group management, pension funds, important shareholders and companies con trolled by them. Transactions with related parties are generally conducted based on usual market conditions.

Relationships with Related Parties General Disclosures Group Management In the reporting period and the prior-year period, the members of Group Management received no other payments or remuneration except the ordinary re muneration as explained in the compensation report on page 58 to 65 and in the notes to the closing of OLTENE Holding AG on page 102. In the years under C review, the members of Group Management and related persons did not receive any other compensation for additional services for COLTENE Holding AG or one of its subsidiaries. Board of Directors In the reporting period and the prior-year period, the members of the Board of Directors received no other payments and remuneration except the ordinary remuneration as explained in the compensation report on page 58 to 65 and in the notes to the closing of COLTENE Holding AG on page 102. All Board members are non-executive and have no material business interest with the COLTENE Group. In 2018, the law firm Lenz & Staehelin, Zurich, where Astrid Waser is partner, received CHF 790 000 (2019: CHF 13 000) for legal advice. Lenz & Staehelin acted as an advisor to the Board of Directors and Group Management during the transaction (due diligence, transaction agreement, capi tal increases, bank financing) in regard of the acquisi tions of Kenda, SciCan Ltd., and Dental-Drives GmbH.

Loans to Directors and Group Management In the years under review, COLTENE Holding AG or its subsidiaries did not grant any loans, credits, guarantees, or advances to the members of the Board of Directors, Group Management or related persons to them. Pension funds Depending on the local legislation in the countries of the COLTENE Group companies, various pension schemes are existing. In the periods under review, there were no extraordinary transactions between the pen sion funds and the related group companies except the payments of the ordinary annual contributions. Tax claim A tax audit conducted in 2019 at Micro-Mega SA led to a tax liability from the years prior to the acquisition by COLTENE. The sellers of Micro-Mega are liable for this tax liability. Therefore Coltène/Whaledent AG (buyer of Micro-Mega) booked a claim against the sell ers of which one is a major shareholder of COLTENE Holding AG in the amount of TCHF 372 in the year under review. Business Relationships with Related Parties Business transactions with other related parties in the year under review and the prior year were as follows: Payables to the sellers of SciCan Ltd. and DentalDrives GmbH In order to settle the final purchase price of the acquisi tion of SciCan Ltd. and DentalDrives GmbH COLTENE Holding AG booked a liability of CHF 3,5 million in favor of the sellers of which one is a major shareholder of COLTENE Holding AG. In the year under review, this amount was settled. In CHF 1000

Payable to sellers (accrued consideration)

2019

2018

3 500

In the years under review, the members of the Board of Directors and related persons did not receive any com pensation for additional services for COLTENE Holding AG or one of its subsidiaries.

Financials COLTENE Group

Rent of production, warehouse and office buildings The COLTENE group rented production, warehouse and office space from companies that are controlled by a major shareholder of COLTENE Holding AG. The rent includes also additional services provided by the lessor, such as accounting and administrative services. In CHF 1000

2019

2018

Rent of production and office buildings

1 002

202

26 Subsequent Events As per the release date of this Annual Report, the Board of Directors and the Executive Management were not aware of any further important events subsequent to the reporting date.

The conditions of the leasing contracts are based on usual market conditions. The rental agreement for the production and office building in Toronto ends on December 31, 2026. The total duration is ten years and the annual rent will increase in average by 2.1 % until the expiry of the rental agreement. Loans In the period under review, a COLTENE group company paid back a loan to a company held by a major share holder of COLTENE Holding AG. The interest paid was the same that the receiving company paid for the same loan to a bank. Therefore, the conditions were at arm’s length. In CHF 1000

2019

Interest paid

4 094

120

4 042

Loan repayments

2018

Loan balance due at the end of the reporting period

Suppliers A COLTENE group company maintains a business rela tionship with a company held by a major shareholder of COLTENE Holding AG. COLTENE buys parts from the respective supplier at market conditions that other suppliers can provide also. In CHF 1000

2019

Annual purchase value

2 619

328

190

Payables

2018

Financials COLTENE Group

Group Companies Company

Group Registered

ownership

Group ownership Consolidation

Currencies

capital

2019

2018

principles 5

CHF

1 600 000

100 %

Altstätten CH

CHF

20 000

100 %

Coltène / Whaledent GmbH + Co. KG , Langenau DE

EUR

1 850 000

100 %

Dentalia Kft., Bicske HU

HUF

3 000 000

100 %

ROEKO Verwaltungs GmbH, Langenau

EUR

30 000

100 %

Coltène / Whaledent Ltd., Burgess Hill GB

GBP

200 000

100 %

Coltène / Whaledent S.à.r.l., Lezennes FR

EUR

503 000

100 %

Coltène Italy S.r.l., Milano IT

EUR

10 000

100 %

Coltène Iberia S.L., Madrid ES

EUR

10 000

100 %

Coltene Turkey Diş Sağlığı Ürünleri Ltd. Şti, Istanbul TR

TRY

20 000

100 %

Activity

Coltène / Whaledent AG , Altstätten CH Coltène / Whaledent Vertriebsservice und Marketing GmbH,

Coltène / Whaledent Dental Materials & Equipment Trading Co. Ltd, Beijing CN

CNY

10 000 000

100 %

Coltène / Whaledent Private Limited, Mumbai IN

INR

64 800 000

100 %

Coltene Japan LLC , Tokyo JP

JPY

1 400 000

100 %

Coltene Australia Pty Ltd., Sydney AU

AUD

15 000

100 %

DentalDrives GmbH, Leutkirch DE

EUR

100 000

100 %

Micro-Mega International, Besançon FR

EUR

419 700

100 %

Micro-Mega SA , Besançon FR

EUR

2 900 000

100 %

Coltène / Whaledent Inc., Cuyahoga Falls US

USD

8 400 000

100 %

Diatech Inc., Mount Pleasant US

USD

100 000

100 %

Vigodent SA Indústria e Comércio, Rio de Janeiro BR

BRL

54 677 752

100 %

Kenda AG , Vaduz FL

CHF

50 000

100 %

SciCan Ltd., Toronto CAN

CAD

729

100 %

SciCan Medtech AG , Zug CH

CHF

100 000

100 %

SciCan Inc., Canonsburg PA

USD

100

100 %

SciCan GmbH, Leutkirch DE

EUR

25 564

100 %

SciCan Real Estate, Leutkirch DE (in liquidation)

EUR

25 564

100 %

1 Production

and sales of dental specialities. services and marketing of dental specialities. of dental specialities. 4 Holding company 5 F = Full consolidation 2 Sales

3 Sales

Financials COLTENE Group

Non-Swiss GAAP FER Measures as Defined by COLTENE Group COLTENE Group uses certain non-Swiss GAAP FER metrics when measuring performance, especially when measuring current-year results against prior periods, including core results, constant currencies, free cash flow, and net debt. Despite the use of these measures by management in setting goals and measuring the Group’s performance, these are non-Swiss GAAP FER measures that have no standardized meaning pre scribed by Swiss GAAP FER. As a result, such measures have limits in their usefulness to investors. Because of their non-standardized definitions, the non-Swiss GAAP FER measures (unlike Swiss GAAP FER measures) may not be comparable to the calculation of similar measures of other companies. These non-Swiss GAAP FER measures are presented solely to permit investors to more fully understand how the Group’s management assesses underlying performance. These non-Swiss GAAP FER measures are not, and should not be viewed as, a substitute for Swiss GAAP FER measures. As an internal measure of Group performance, these nonSwiss GAAP FER measures have limitations, and the Group’s performance management process is not solely restricted to these metrics.

Growth Rate Calculation For ease of understanding, COLTENE Group uses a sign convention for its growth rates such that a reduction in operating expenses or losses compared to the prior year is shown as a positive growth. Free Cash Flow Free cash flow is presented as additional information because management believes it is a useful supplemen tal indicator of the Group’s ability to operate without reliance on additional borrowing or use of existing cash. Free cash flow is a measure of the net cash generated that is available for debt repayment and for returning to shareholders. Free cash flow is a non-Swiss GAAP FER measure, which means it should not be interpreted as a measure determined under Swiss GAAP FER. Free cash flow is not intended to be a substitute measure for cash flow from operating activities as determined under Swiss GAAP FER.

Net Debt Net debt is presented as additional information because management believes it is a useful supplemental indicator of the Group’s ability to pay dividends, to meet financial commitments and to invest in new strategic opportunities, including strengthening its balance sheet. Net debt is a non-Swiss GAAP FER measure, which means it should not be interpreted as a measure deter mined under Swiss GAAP FER. COLTENE Group defines net debt as current and non-

current financial debt less cash and cash equivalents, current investments and derivative financial instruments. EBITDA COLTENE Group defines earnings before interest, tax,

depreciation, and amortization (EBITDA) as operating income from continuing operations excluding deprecia tion of property, plant, and equipment (including any related impairment charges) and amortization of intan gible assets (including any related impairment charges). Leverage Factor The COLTENE Group relates interest-bearing debt to EBITDA to determine the leverage factor. A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt (loans), or assesses the ability of a company to meet its financial obligations. The leverage ratio is important given that companies rely on a mixture of equity and debt to finance their operations and knowing the amount of debt held by a company is useful in evaluat ing whether it can pay its debts off as they come due.

COLTENE Group’s definition of free cash flow includes

cash flow from operating activities and cash flow from investing activities.

Financials COLTENE Group

Statutory Auditor’s Report Statutory Auditor’s Report to the General Meeting of COLTENE Holding AG, Altstätten Statutory Auditor’s Report on the Audit of the Consolidated Financial Statements

As statutory auditor, we have audited the consolidated financial statements of COLTENE Holding AG, which comprise the consolidated income statement, consoli dated balance sheet, consolidated cash flow statement, consolidated statement of changes in equity and notes to Group financial statements (pages 72 to 94), for the year ended December 31, 2019. Board of Directors’ Responsibility The Board of Directors is responsible for the preparation of the consolidated financial statements in accordance with Swiss GAAP FER and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assur ance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the account ing policies used and the reasonableness of accounting estimates made, as well as evaluating the overall pre sentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements for the year ended December 31, 2019 give a true and fair view of the finan cial position, the results of operations and the cash flows in accordance with Swiss GAAP FER and comply with Swiss law. Report on Key Audit Matters Based on the Circular 1/2015 of the Federal Audit Oversight Authority Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidat ed financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibility section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the consoli dated financial statements.

Financials COLTENE Group

Valuation of Inventory Area of Focus The total balances of inventory and inventory allow ance as of December 31, 2019 amount to CHF 59.2 mil lion and CHF 10.2 million, respectively, as described in note 13. We focused on this position because the gross inventory and related allowance are material to the financial statements, involve a high level of judgment and are subject to uncertainty due to market demand changes. Our Audit Response We assessed the process, method and assumptions used to identify slow moving, excess or obsolete items and to calculate the related allowance. We completed procedures to assess the amount of the allowance including a comparison of management’s calculations for consistency against those used in the prior year. We tested the underlying data used by management to calculate the inventory allowance, typically an aged inventory analysis with the latest movements, by re- performing the ageing calculation determined by the ERP-system. We also tested the accuracy of the calcula tion by assessing the calculation criteria. Furthermore, we compared the net realizable value with the carrying value for a sample of products.

Our audit response We discussed with management and assessed the Swiss GAAP FER accounting policies in comparison to the former accounting policies. We assessed the adjust ments to the respective account balances in accord ance with the requirements set out in Swiss GAAP FER. We also assessed the presentation and disclosures of the consolidated financial statements in accordance to Swiss GAAP FER. Our audit procedures did not lead to any reservations concerning the conversion from IFRS to Swiss GAAP FER. Report on Other Legal Requirements We confirm that we meet the legal require ments on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our inde pendence. In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an inter nal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.

Our audit procedures did not lead to any reservations relating to the method and the assumptions used to alculate the valuation of inventory.

We recommend that the consolidated financial state ments submitted to you be approved.

Conversion from IFRS to Swiss GAAP FER Area of Focus The Group converted its consolidated financial state ments from International Financial Reporting Standards (IFRS) to Swiss GAAP FER with retrospective effect from the beginning of fiscal year 2019. The amounts for fiscal year 2018 have been restated. We considered the conversion from IFRS to Swiss GAAP FER to be a key audit matter as the conversion required a reassessment of accounting policies and a restatement of comparative figures. Refer to section “Adjustments due to the firsttime application of Swiss GAAP FER” of the consolidated financial statements for further information.

Ernst & Young Ltd

Iwan Zimmermann Licensed audit expert (Auditor in charge)

Pirmin Hutter Licensed audit expert

St. Gallen, March 5, 2020

Financials COLTENE Group

Income Statement C OLTENE Holding AG In CHF

Dividend income

2019

2018

14 288 920

10 921 700

554 080

293 425

14 843 000

11 215 125

Financial expenses

– 6 77 029

– 3 52 199

Personnel expenses

– 6 65 125

– 6 21 078

Other operating expenses

– 5 83 733

– 1 335 731

– 7 600 000

Other financial income Total income

Impairment loss on investments Tax expenses Total expenses Profit of the year

– 4 38 565

– 9 964 452

– 2 309 008

4 878 548

8 906 117

Balance Sheet C OLTENE Holding AG In CHF

Cash and cash equivalents

31.12.2019

31.12.2018

846 298

1 873 252

Other accounts receivable from third parties

5 906

84 940

Other accounts receivable from subsidiaries

3 217 284

749 826

4 069 488

2 708 018

36 781 083

33 444 137

Investments in subsidiaries

206 912 462

214 622 365

Non-current assets

243 693 545

248 066 502

Total assets

247 763 033

250 774 520

Current assets Long-term receivables from subsidiaries

Trade accounts payable to third parties Current interest-bearing liabilities to third parties

1 730

1 057 596

58 794 585

44 446 445

Other accounts payable to third parties

18 563

18 564

Other accounts payable to subsidiaries

1 201 122

1 249 514

3 500 000

202 765

219 677

Other accounts payable to related parties Accrued liabilities and deferred income to third parties Short-term provisions Current liabilities Share capital Legal reserves from retained earnings Capital contribution reserves without foreign reference Capital contribution reserves with foreign reference Voluntary reserves from retained earnings

88 746

83 655

60 307 511

50 575 451

597 558

84 380

49 983 127

67 907 239

101 876 508

30 036 709

21 130 591

– 1 308

– 3 03 324

4 878 548

8 906 117

Total equity

187 455 522

200 199 069

Total liabilities and equity

247 763 033

250 774 520

Treasury shares Profit of the year

Financials COLTENE Holding AG

Statements of Changes in Equity COLTENE Holding AG In CHF

31.12.2017

Capital

Net income

Statutory

contribution

Treasury

brought

capital

reserves

forward

Total

421 900

84 380

33 784 385

34 290 665

– 1 2 653 793

Distribution to shareholders Capital increase

175 658

169 783 747 – 3 03 324

Change in treasury shares Profit of the year 31.12.2018

597 558

84 380

169 783 747

– 303 324

– 1 7 924 112

Distribution to shareholders

302 016

Change in treasury shares Profit of the year 31.12.2019

597 558

84 380

151 859 635

– 1 2 653 793 169 959 404

– 1 308

– 3 03 324

8 906 117

30 036 709

200 199 069

– 1 7 924 112

302 016

4 878 548

34 915 257

187 455 522

Financials COLTENE Holding AG

Notes to C OLTENE Holding AG Principals These financial statements were prepared according to the provisions of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied are described below. It should be noted that to ensure the Company’s going concern, the Company’s financial statements may be influenced by the creation and release of hidden reserves. Financial Assets Financial assets include long-term loans. Loans granted in foreign currencies are translated at the rate at the balance sheet date. Treasury Shares Treasury shares are recognized at weighted average cost and deducted from shareholders’ equity at the time of acquisition. In case of a re-sale, the gain or loss is recognized through the income statement as financial income or financial expenses.

Investments Investments include securities with a long-term holding period and are valued individually at their acquisition cost adjusted for impairment losses. Investments are tested on an annual base for impairment needs. Foregoing a Cash Flow Statement and Additional Disclosures in the Notes As COLTENE Holding AG has prepared its consolidated financial statements in accordance with a recognized accounting standard (Swiss GAAP FER), it has decided to forego presenting additional information on inter est-bearing liabilities and audit fees in the notes as well as a cash flow statement and a management report in accordance with the law. Investments in Subsidiaries The major investments in subsidiaries are listed on page 94 of this Annual Report.

Full-time equivalents COLTENE Holding AG has no employees

Contingent liabilities Joint and several liability from group taxation for current and future value-added tax liabilities of Coltène / Whaledent AG and Coltène / Whaledent Vertriebsservice und Marketing GmbH

31.12.2019

31.12.2018

p. m.

Significant investments See list on page 94

Financials COLTENE Holding AG

100

Impairment loss on investments The statutory book value of the investment in Vigodent SA in Brazil was impaired by CHF 7 .6 Mio. in the reporting period. The business suffered mainly from negative currency developments and political and economic instability. Treasury shares Average rate of transactions in CHF

Quantity

Acquisitions

94 .36

6 200

Sales

95 .99

– 2 935

Inventory as of 1.1.2018

Inventory as of 31.12.2018

3 265

Acquisitions

99 .10

Sales

93 .05

– 3 331

Inventory as of 31.12.2019

Significant shareholders* 31.12.2019

31.12.2018

Huwa Finanz- und Beteiligungs AG , Heerbrugg

22 .18 %

21 .98 %

Arthur Zwingenberger, Luzern (PY : Arno Holding S.à.r.l., Luxembourg)

17 .20 %

Rätikon Privatstiftung, Bludenz / Austria

10 .18 %

10 .02 %

Tweedy, Browne Company LLC , New York / U SA

4 .21 %

4 .80 %

Credit Suisse Asset Management Funds AG , Zürich

3 .49 %

3 .75 %

Robert Heberlein, Zumikon

3 .46 %

3 .40 %

UBS Fund Management (Switzerland) AG , Zürich

3 .26 %

3 .49 %

* The Company is aware of the following registered shareholders who own over 3 % of the shares. For more details see page 33.

Number of shares held by Board of Directors 31.12.2019

31.12.2018

Nick Huber, Chairman

14 557

14 297

Erwin Locher, member

5 492

6 162

Jürgen Rauch, member

407

277

5 365

5 235

Matthew Robin, member Astrid Waser, member Roland Weiger, member Allison Zwingenberger, member 1

227

1 328

1 198

27 408

27 266

31.12.2019

31.12.2018

11 799

10 675

Gerhard Mahrle, CFO

3 071

2 509

Werner Barth, Vice President Marketing

1 540

1 307

54 170

54 079

2 413

2 262

Total 1 Since extraordinary GM

2018.

Number of shares held by Executive Management Martin Schaufelberger, CEO

Stefan Helsing, COO Werner Mannschedel, Vice President QM & RA Christophe Loretan, Vice President Sales Total

624

396

73 617

71 228

Financials COLTENE Holding AG

101

Remuneration of the Board of Directors In CHF

Other Base remuneration

remuneration

in cash

in shares 1

security 2

Total

Nick Huber

80 000

20 000

14 363

114 363

Erwin Locher

70 000

10 000

7 665

87 665

Jürgen Rauch

60 000

10 000

70 000

Matthew Robin

70 000

10 000

11 438

91 438

Astrid Waser

60 000

10 000

9 647

79 647

Roland Weiger

60 000

10 000

10 017

80 017

Allison Zwingenberger 3

15 000

2 500

2 131

19 631

415 000

72 500

55 261

542 761

Nick Huber

72 000

20 000

14 366

106 366

Erwin Locher

63 000

10 000

7 444

80 444

Jürgen Rauch

54 000

10 000

64 000

Matthew Robin

63 000

10 000

11 445

84 445

Astrid Waser

54 000

10 000

10 024

74 024

Roland Weiger

54 000

10 000

10 024

74 024

Allison Zwingenberger

54 000

10 000

8 893

72 893

414 000

80 000

62 196

556 196

Social 2018

Total 2019

Total

1 The number of shares granted in 2018 is calculated based on the weighted average share price of the month of May (2019: March) of the subsequent year. 2 C ompany paid social security contribution incl. AHV , IV , and ALV .

3 O n the Extraordinary General Meeting, September 14, 2018, Allison Zwingenberger was elected as a new Board member.

Remuneration of Group Management In CHF

Base remuneration

Variable remuneration 1

Other remuneration Social

Other

in cash

in shares 2

security 3

benefits

Total

2018

Martin Schaufelberger

370 000

296 000

111 276

148 729

19 212

945 217

Other members

1 037 467

333 568

125 235

271 604

48 420

1 816 294

Total

1 407 467

629 568

236 511

420 333

67 632

2 761 511

2019

Martin Schaufelberger

410 007

189 373

49 315

166 921

20 692

836 308

Other members

1 313 413

282 368

73 749

361 748

65 831

2 097 109

Total 4

1 723 420

471 741

123 064

528 669

86 523

2 933 417

1 The variable remuneration, which includes cash bonus and shares, is not paid out in the reporting period. It is accrued for and paid out in the following year

based on the decision of the Board of Directors.

2 The value of shares granted is calculated based on the share price at closing of the grant date. For 2018, it was March 19, 2019, and the share price was CHF

For 2019, it was February 26, 2020, and the share price was CHF 89.50.

99.00.

3 C ompany paid social security contribution incl. pension funds payments, AHV , IV , ALV , NBU , and KTG .

4 I n 2019, the total compensation increased due to an additional Group Management team member.

Subsequent Events For more information refer to page 93 at the end of the financial reporting about the COLTENE Group.

Financials COLTENE Holding AG

102

Proposed Appropriation of Disposable Profit and Dividend Distribution In CHF

2019

2018

29 733 384

21 130 591

4 878 548

8 906 117

Transfer to reserves for treasury stocks

302 016

– 3 03 324

Allocation to the legal reserves

– 3 5 132

34 878 816

29 733 384

Allocation of the profit of the year Net income carried forward from prior-year Profit of the year

Total amount at the disposal of the AGM Dividend distribution Balance to be carried forward

34 878 816

29 733 384

Distribution out of reserves from capital contributions Available reserves from capital contributions without foreign reference Available reserves from capital contributions with foreign reference Total available capital contribution reserves

49 983 127

67 907 239

101 876 508

151 859 635

169 783 747

– 1 7 924 112

– 1 7 926 740

Distribution to shareholders of CHF 3 .00 per share without treasury shares from capital contribution reserves without foreign reference Distribution to shareholders of CHF 3 .00 per share without treasury shares* from capital contribution reserves with foreign reference Available capital contribution reserves after distribution without foreign reference

49 983 127

with foreign reference

83 949 768

101 876 508

133 932 895

151 859 635

Total capital contribution reserves * Amount will be adapted according to the amount of treasury shares.

Financials COLTENE Holding AG

103

Report of the Statutory Auditor Report of the Statutory Auditor to the General Meeting of COLTENE Holding AG, Altstätten Report of the Statutory Auditor on the Financial Statements

As statutory auditor, we have audited the financial statements of COLTENE Holding AG, which comprise the income statement, balance sheet and notes (pages 98 to 103), for the year ended December 31, 2019. Board of Directors’ Responsibility The Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the finan cial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial state ments, whether due to fraud or error. In making those risk assessments, the auditor considers the internal con trol system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effective ness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the account ing policies used and the reasonableness of accounting estimates made, as well as evaluating the overall pres entation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appro priate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements for the year ended December 31, 2019, comply with Swiss law and the company’s articles of incorporation. Report on Key Audit Matters Based on the Circular 1/2015 of the Federal Audit Oversight Authority Key audit matters are those matters that, in our profes sional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibility section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the financial statements.

Financials COLTENE Holding AG

104

Valuation of Investments Area of Focus The valuation of investments in accordance with the provisions of the Swiss Code of Obligations is important to our statutory audit as it represents a significant judgment area. Investments as at balance sheet date represent 83.5 % of the total assets of COLTENE Holding AG. In performing the impairment testing for investments, the company used various assumptions in respect of future market and economic conditions, market share, revenue growth and margin development. Our Audit Response Our audit procedures included an assessment and test of the assumptions, methodology, the weighted aver age cost of capital and other data used by the company, for example by comparing them to external data, such as expected inflation rates, external market growth expectations and by analysing sensitivities in COLTENE’s valuation model. Furthermore, we included in our team a valuation specialist to assist us with these procedures. We specifically focused on the sensitivity by evaluating whether a reasonably possible change in assumptions could cause the carrying amount to exceed its recover able amount. We also assessed the historical accuracy of the Board of Management’s estimates. Our audit procedures did not lead to any reservations relating to the used assumptions, the methodology and the weighted average cost of capital and the other data used.

Report on other Legal Requirements We confirm that we meet the legal require ments on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our inde pendence. In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. We further confirm that the proposed appropriation of available earnings complies with Swiss law and the com pany’s articles of incorporation. We recommend that the financial statements submitted to you be approved.

Ernst & Young Ltd

Iwan Zimmermann Licensed audit expert (Auditor in charge)

Pirmin Hutter Licensed audit expert

St. Gallen, March 5, 2020

Financials COLTENE Holding AG

105

Important Addresses COLTENE Holding AG

Feldwiesenstrasse 20 9450 Altstätten Switzerland Phone +41 (0)71 757 5380 Telefax +41 (0)71 757 5301 www.coltene.com info@coltene.com Coltène/Whaledent Inc. 235 Ascot Parkway Cuyahoga Falls, Ohio 44223 USA

SciCan Ltd. 1440 Don Mills Road Toronto, Ontario Canada M3B 3P9 Phone +1 416 445 1600 Telefax +1 416 445 2727 Micro-Mega S.A. 12 rue du Tunnel 25000 Besançon France Phone +33 3 81 54 42 42 Telefax +33 3 81 54 42 30

Phone +1 330 916 8800 Telefax +1 330 916 7077 Coltène/Whaledent AG Feldwiesenstrasse 20 9450 Altstätten Switzerland Phone +41 (0)71 757 5300 Telefax +41 (0)71 757 5301 Coltène/Whaledent GmbH + Co. KG Raiffeisenstrasse 30 P. O. Box 1150 89122 Langenau Germany Phone +49 7345 805 0 Telefax +49 7345 805 201 Vigodent SA Indústria e Comércio Rua Pesqueira 26 Bonsucesso Rio de Janeiro CEP 21041-150 Brazil Phone +5521 3865-5600 Telefax +5521 2280-8411

Financials COLTENE Holding AG

106

Imprint © COLTENE Holding AG Concept IRF Reputation AG , Zurich Design TGG Hafen Senn Stieger, St. Gallen Typesetting Neidhart + Schön AG , Zurich Printing Eberl Print GmbH, Immenstadt Disclaimer The information made available in thisAnnual Report may include forward-looking statements that reflect intentions, beliefs or current expectations and projections of the COLTENE Group about future results of operations, financial conditions, liquidity, performance, and similar circumstances. Such statements are made on the basis of assumptions and expectations which may prove to be erroneous, although the COLTENE Group believes them to be reasonable at this time. The extract of the reporting section of the Annual Report 2019 in German is the governing text.