group - INTEGRA Holding AG

Adrian Oehler
President of the Governing Board
There seems to be a total lack of any sensible, long-term answers or concepts from politicians
to resolve current or future challenges. Instead, for quite a long time politics seems
to be shaped primarily by reactionary measures driven by the short-term interests of
political parties and their representatives. This naturally leaves us disadvantaged, unable
to get any political support to adapt our framework to global developments.
We too have not been fully spared from the effects of this financial and monetary crisis.
To maintain sales growth both Aquametro and INTEGRA Biosciences had to grant significant
discounts throughout 2011. Nevertheless, in view of the prevailing conditions, we
should be pleased with the overall bottom line. Our consolidated operating revenues fell
slightly over the prior year by about 0,8% to CHF 136,2 million. Since our strong currency
reduced the margins, the EBIT dropped in the face of rising labor costs by around 6%
to CHF 18,5 million.
In spite of such negative factors, the Aquametro Group was able to create more value by
expanding its market position in Asia, particularly in Korea, and stay on the prior year’s
path of success. Following its extraordinarily great performance in 2010, Signal Ltd. delivered
its second best performance ever in FY2011. Value creation did decline slightly as a
result of fewer highway and export projects. Although INTEGRA Biosciences grew, it
unfortunately fell just short of the high targets set for this year, because it was seriously
affected by the currency crisis. INTEGRA Real Estate Ltd. had to undergo significant reorganization.
Similarly, we took on the development of our Wil property and conducted an
analysis with four architects. This study highlighted realistic options for converting the
property.
New orders for the contract manufacturing division of the INTEGRA India Group
Company Ltd. did not manage to fully offset a collapse of its standard business of supplying
relays for the Indian Railways. Though profitability was boosted significantly
through cost controls and other measures, the business just failed to reach the
breakeven point. During the year, Schlafhorst Engineering India was renamed INTEGRA
Engineering India, and a major effort was made to reposition ourselves as an engineering
and manufacturing company. This required diverse investments to modernize the unit
and acquire new machinery. We initiated a merger of the two Indian firms for completion
in Q1 of 2012.
It is hard to foresee what other challenges we will face in the years ahead. These are
times of economic uncertainty, which demand that we continually adapt to grow and
retain, or rather, fortify our ability to innovate. The spotlight must be on the operating efficiency,
which means that we need to further optimize our operations – through well educated/trained
and motivated employees at all levels. Such employees are the foundation
of our accomplishments and, hence, I would like to thank each one of you for the daily
contributions you make towards our joint success.
Adrian Oehler
CEO INTEGRA Holding Ltd.
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