Annual Report 2006

6
Mikron Group
Johann Niklaus Schneider-
Ammann, Chairman of the Board
of Directors
Report of the Board of Directors
Dear Shareholders The Mikron Group conducted its activities in the year under review with a
clear focus on the Production Equipment segment. The company can look back on a successful
business year in a healthy market environment. Orders and sales increased and the operating
result improved. Mikron can also report positive net earnings for 2006, after the previous year‘s
result was impacted by structural adjustments.
The progress made over the last few years shows that we are moving in the right direction.
Quality has always come before quantity. The Mikron Group will abide by this principle, because
giving quality top priority is the only way to ensure that the company pursues a healthy development
course.
To arrive at an initial assessment of the year under review, its most important features can be
summarized from the point of view of the three main stakeholders: customers, shareholders
and employees.
Customers In the competitive environment in which they operate, the Mikron Group‘s customers
find themselves faced with ever faster paced innovation and rising cost pressure. When
customers decide under these circumstances to make a substantial investment, they have to
be able to rely on a business partner who can come up with the desired production solution,
for new components or sub-assemblies for example, at a cost-effective price. For the customer,
cost-effective primarily means that unit production costs are kept to a minimum. In the longer
term, it also means establishing ties with a business partner who can guarantee that the latest
requirements will be incorporated into its future market offering.
At Mikron, an intensive dialogue with our business partners comes as part of the package.
Only by maintaining such a dialogue and exchanging experiences has the company been able
to successively develop its business in recent years and focus on consolidating its technology
leadership. Today, Mikron is recognized as a solution provider delivering to high quality
standards, a position it has to defend each and every day.
Shareholders Investors expect the capital they provide to appreciate reasonably in value
over time. The Mikron Group‘s recent history has been dominated by restructuring measures
that have burdened the company‘s management and impacted negatively on performance.
However, these steps were essential for Mikron‘s future development. A point has now been
reached from which the Group can move forward with a good market offering, a clear strategic
direction and transparent organizational structures. Current earnings power, however, still falls
short of expectations. Although operating profit (EBIT) has risen for the third successive year, the
Mikron Group management is making it one of its top priorities for the coming years.
Mikron‘s shareholder structure was and is characterized by the fact that a substantial amount
of capital is held by key investors. The relatively small free float left on the equity market can
be viewed in a number of different ways. Another issue is more important here. These circumstances
allowed the Mikron Group to do the right thing, and in view of the difficult situation