Annual Report 2006 (2.25 MB) Download annual ... - Dometic Group

Annual Summary1. 2005 in brief2. The CEO comments on 20054. RV and Marine Systems12. Special Refrigeration Systems16. Research and development22. Environment25. Employees26. History28. Group Management

2005 in brief 1Important events 2005◗ Another exciting year for Dometic. Net sales amounted to MSEK 7 322 (6 963).◗ Continued widening of an already strong product offering, especially within DometicMarine Systems, where the new product launches are aimed to make Dometic a totalsupplier, similarly as in RV Systems.◗ Continued rationalization of operations and concentration of production resources anddistribution to fewer locations within the Group.◗ Launch of an important project to create a common design language within the Groupas well as a more stringent framework for communicating the Dometic brand.◗ Dometic came under new ownership in April when EQT’s shares in Dometic were soldto funds advised by the European private equity company, BC Partners.Key figures 20052005 2004Net sales (MSEK) 7 322 6 963Average number of employees 4 201 4 367Production facilities 22 23743(10%)6 579(90%)Net sales perbusiness area2005, MSEKRV and Marine SystemsSpecial Refrigeration Systems2 995(41%)604(8%)3 723(51%)Net salesper region2005, MSEKAmericasEurope, Middle East and AfricaRest of the worldDometic is a customer driven, world-leading provider of innovativeleisure products for the caravan, motorhome and marine markets.Dometic offers a complete range of air conditioners, refrigerators,awnings, cookers, sanitation systems, lighting, windows, doorsand other equipment that makes leisure life more comfortable awayfrom home.Dometic also provides refrigerators for specific use in hotel rooms,offices, for transport and storage of medical products and for storingwine. Dometic’s products are sold in almost 100 countries and are producedmainly in Dometic’s own production facilities around the world.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

2 THE CEO comments on 2005THE CEO comments on 2005 32005 was yet another exciting yearfor Dometic. Sales developed well on allour main markets. In the US, there was amajor federal demand for mobile homesfor families affected by the devastationcaused by Hurricane Katrina in the southernUSA. The motorhome market in theUS decreased, however, mainly due tothe fuel shortage following Katrina. InEurope, RV sales remained strong andthe trend towards higher specifiedvehicles continued. Australia, our thirdlargest market, continued to show goodgrowth.During the year Dometic introduced a new mobileair conditioning unit for smaller pleasure boats.This means that Dometic offers “big boat comfort”also to smaller boats, an interesting developmentwith regard to the large number of smallerpleasure boats on the market.ing our facility in Heidenau, Germanyand relocating the production of BlastFreezers to Luxembourg. Our aim is to,at all times and from every perspective,be the most efficient company in ourmarkets.Our strategy is a clear growth strategy.On the basis of our already strong position,we will develop more products forthe RV industry and the marine sector,and any other areas where we can seethat our technologies, manufacturingprocesses, distribution and salesOur aim is to, at all times andfrom every perspective, be themost efficient company in ourmarkets.The marine market, that comprisesproducts for pleasure boats mainlylarger than 25 feet, developed strongly inboth North America and Europe. WeFuture RV generationsThe most exciting development is that youngerpeople, completely new to RV travel, are drawn tothe mobile leisure lifestyle. This is because RV lifeuniquely combines comfortable living with adventuresand new experiences.broadened our product offering duringthe year with, among other products,new air conditioning systems and sanitationsystems. Our goal is to developDometic Marine Systems into a totalsupplier of marine comfort products forlarge pleasure boats.Dometic's operations, like other companiesin manufacturing industries, havebeen negatively affected by high rawmaterial prices during the year. A majorcost reduction program to help offsetthe negative effects of the raw materialprice increases was therefore launchedduring the year.To be able to retain our competitiveedge, we must constantly rationaliseand become more efficient. During 2005for example, we concentrated the productionof medical refrigeration by clos-organisation have competitive advantages.We will always offer innovativeproducts with function and design thatexceed the end-users’ expectations.Our task is to develop and drive themarket and to make our customers’products attractive to even largergroups. During the year we launchedseveral products that sets life in an RVeven more apart from traditional campingand makes it more like life in a wellequippedhome.This strategy also includes complementingthe business with acquisitions. Insome cases, this has resulted in usacquiring companies with new customersto which we have been able tooffer the Group’s collective productrange. In other cases it has resulted inus adding products which we have beenable to offer to a global market throughour sales network. No major acquisitionswere made during 2005, but Dometicwill continue to grow through acquisitionswhile ensuring that our growingorganisation is continuously made moreefficient.The Dometic brand has for many yearsheld a strong position in the North AmericanRV market, a market in whichDometic is the leading supplier of comfortproducts and a market which hasalways used the Dometic brand. Outsidethis market and outside groups with aspecial interest in Dometic’s products,the brand is however less well-known.This is not surprising given that Dometicas an independent group is young anduntil very recently sold its productsunder the Electrolux brand of our formerparent group. During the year, workbegan to develop a powerful, consistentand distinctive profile for market communication.Dometic shall, in time,become a brand that is well knownworldwide.In connection with the brand activities,we have also adopted a completeapproach to the Group’s product design.Individual products sold under theDometic brand have always been welldesigned, but they have lacked commoncharacteristics as regards appearance,ergonomics and aesthetics. We willbegin to see the first products with thenew Dometic design already during2006.Finally, it is of course important to mentionthat we during the year came undernew ownership. In April, the Swedishprivate equity company EQT, which wasinvolved in the foundation of Dometic inconnection with the acquisition of thecompany from Electrolux, sold Dometicto funds managed by the European privateequity company, BC Partners. Ournew owners share our long-term strategyand will in every way contribute toensuring that we achieve our demandinggoals. For us at Dometic, it is incrediblyexciting to continue the journey that wehave started and I am convinced thatour passion – mobile leisure life – withour help will be shared by many morepeople in the future.Lars JohanssonPresident and CEOD O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

4 RV and Marine SystemsDometic’s products to the marine industry are mainlydeveloped for generously equipped pleasure boatsthat are larger than 25 feet. Dometic’s marine offeringincludes air conditioning-, sanitation- and kitchensystems. Several additional products from the morecomplete RV-range are being adapted for use in themarine environment.RV and Marine Systems 5Markets drivenby innovationRV and Marine Systems represents the core of Dometic’s operation. The products make adventurousmobile leisure life simple, convenient and enjoyable.Dometic RV and Marine Systems supplieshigh quality products to manufacturersof RVs (Recreation Vehicles) andlarge pleasure boats. Dometic’s task isto ensure that users of Dometic’s productsexperience the same level of comfortin their RV or pleasure boat as theydo at home.The products are very advanced. Theyare specially developed, often for smallspaces, and are designed to work formany years in exposed environments.The equipment must tolerate movement,even severe impacts and largetemperature fluctuations.Low weight and a compact format arealso very important. The refrigerator,with its unique absorption technology, isfor example specially designed to workwith various energy sources whilst alsobeing completely silent, an essentialfeature as they are installed in or nearsleeping areas.Dometic’s products for the RV industryinclude air-conditioning systems, refrigerators,cookers, ovens, microwaveovens, sinks, water purifiers, generators,central vacuum cleaners, toiletsystems, windows, roof lights, awnings,blinds, doors, lighting and ventilationsystems.Dometic’s products for the marineindustry have been developed for pleasureboats, primarily longer than 25 feet.Examples of products include air-condi-2005 in brief• Net sales for the business area amountedto SEK 6,579 (6,267).•RV sales in the US were unchanged duringthe first six months 2005 compared to2004. For the full year, the sale of recreationvehicles increased by 3.9 percent.The European RV-registration increasedby 2.5 percent during 2005.• Sales of air conditioners and sanitationsystems increased strongly.• Sales within RV and Marine Systems inEurope followed the expanding market. Inseveral European countries, Dometicestablished sales in the important aftersalesmarket.• A large number of products werelaunched during the year. Of particularinterest was a range of compressorpoweredrefrigerators for the marinemarket and new specially adapted doorsfor two of the major European motorhomemanufacturers. A new air-conditioningsystem for smaller pleasure boatsmeans that we now are able to offerlarge-boat comfort to owners of smallerboats.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

6 RV and Marine SystemsRV and Marine Systems 7Designed interior lighting increases the ambiencein any RV or pleasure boat. Customized lightingsystems comprise a range of spotlights for surfaceor recessed mounting along with a numberof different ceiling lights. 12-Volt Halogen lightsystems, 230-Volt lamps and LED-lights togetherwith high performance 230/12 V converters makefor smart lighting solutions on the move.tioners, toilets and cooking systems.Work is also under way to adapt additionalproducts from the RV range forthe marine market.A market that growswith the lifestyleRV and Marine Systems is developingwell. Dometic is active in a growingmarket not driven by general economicconditions but by a particularlifestyle gaining broadersupport in several new targetgroups. More and more peopleare discovering that the mobileleisure lifestyle offers two ofthe best sides to life: the comfortand security of home withThe differences between the active RV lifestyleand traditional camping are becoming increasinglyclear. All over the world, new groups are attractedto the perfect combination that the adventure outsideand the comfort inside provides.the excitement and adventure of beingaway.Dometic RV and Marine Systems offerscomfort products that make life in an RVor large pleasure boat even more enjoyable.A very important customer groupis households in the late middle ageswith sound finances who appreciate theexperiences that mobile leisure lifeoffers, but who do not want to surrenderthe comforts to which they havebecome accustomed. A phenomenonthroughout the economically developedworld is that these households haveincreasingly stronger finances and leadlonger active lives.The most exciting development is thatyounger people, who previously did notuse RVs, are being attracted to themobile leisure lifestyle. This is becausethe RV life in a unique way combinescomfortable living with adventure andexperiences. Twenty to thirty yearsago, households chose a motorhomeholiday because it was an economicway to spend a holiday. Today’s RVusers generally do not think alongthese lines. The trend is rather to spendan increasing proportion of a household’sdisposable income on leisureactivities.Innovation driving the marketsDometic drives its markets forward bycontinually making its products moretechnically advanced but also easier touse. An example of a product with hightechnical content is Dometic’s vacuumtoilets. The advantages over the oldgravity toilets are that the system iscompletely closed, water consumptionis minimal and the impact on the environmentis small. The latter advantageis important for a target group that valuesa close relationship with nature.Other examples of innovations for theRV industry are a ceramic cooker top,the first deliveries of “Ice through thedoor” refrigerators for the Americanmarket, a new generation central vacuumcleaners and the first deliveries ofTecTower, a refrigerator and oven in atasteful and smart built-in module. Duringthe year, the TecTower achieved anA segment within RV systems is products forprofessional vehicles such as rescue and servicevehicles. Dometic’s products include generators,travel power generators, inverters, refrigerationand air conditioning and operate both when thevehicle is in motion and when it’s parked. Therequirements on reliability are of coursesignificant.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

8 RV and Marine SystemsRV and Marine Systems 9D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

10 RV and Marine SystemsRV and Marine Systems 11great breakthrough in the European RVmarket.Technology and design importantdriving forcesIn Dometic’s markets, end users areattracted by quality and high level ofinnovation, making the products easyto use, thereby increasing comfort andhomeliness. As in a house or apartment,the impression of the kitchenand bathroom in an RV or pleasureboat plays an important role in the finalpurchasing decision. Dometic’s productshave therefore become a decisivecompetitive factor in the battle formore discerning and demanding customers.The potential for innovation is far fromexhausted. Dometic will over the nextfew years continue to launch productsthat set new standards for the level ofcomfort in RVs and pleasure boats.At the same time as the pace of technicalinnovation is being stepped up,Dometic has begun work to develop acommon design elements for theGroup’s products. Design has long beenone of Dometic’s competitive advantages,but there has been no commonelements linked to the Dometic brand.Design must reflect Dometic’s role as aninnovator and market leader and mustalso signal the company’s ambitions tomake the mobile leisure life even morepleasurable. The new design elementswill become visible during 2006 and willover time come to characterise all productswithin Dometic RV and Marine Systems.Mobile leisure for more peopleDometic’s task as a leading supplier isto help to promote mobile leisure life tomore markets and more countries.Today, mobile leisure life has a verystrong position in North America. InEurope and Australia, mobile leisure lifeis well established, but it remains to bemade as widely popular as in the US.New and very exciting markets for theRV lifestyle include Japan, where thereare many local manufacturers. It is clearAs a leading manufacturer of windows and rooflights for RVs, Dometic combines intelligent design and the finest materials in a weatherproof window system.With a great view, the adventure outside continues.A perfect interior climate makes life in an RV really comfortable, no matter what the weather outside may be. Dometic’s new air conditioning with new discretedesign provides improved cooling power while minimizing noise and vibrations. All Dometic’s air conditioners are free from freon.that sales of motorhomes, the moreexclusive segment of the market andthe basis for the American-type RVlifestyle, increase year on year also outsidethe US. Moreover, media has givena lot of attention to the differencesbetween a modern RV lifestyle and thetraditional camping lifestyle.As more countries are being drawn intothe global market economy, wealthincreases. What these new RV marketslack are roads and RV parks, but as theinfrastructure is developed, considerablepotential is created. Working withmanufacturers, Dometic’s task is toattract customers to the benefits of theRV lifestyle and to supply the productsthat can drive sales forward. Amongpotential new markets, Far East Asia isof particular interest. The production ofvehicles currently taking place in Chinais primarily intended for export, but inthe long term the growing Chinese middleclasses may give the RV lifestyle anenormous boost. The same applies tothe Indian market.A clear and strong brandThe Dometic brand was created whenElectrolux began to manufacture productsfor American RV manufacturers inthe 1950s.The brand is established and wellknown in the American RV market. Itstands for innovation and quality and isalmost synonymous with the developmentof comfort products for motorhomesand caravans. In other markets,most of the company’s products havehowever earlier been sold under theElectrolux brand.In the marine area, Dometic has inrecent years expanded strongly byacquiring companies. A valuable assetin these companies has been strongbrands that Dometic has continued touse. Examples of such brands areSeaLand, Marine Air, Crusair and Condaria.These brands are associated to alimited product range and are generallyclear to their customers.During 2005, work began to establish acommon profile for all communicationconcerning the Dometic brand and itssub brands. This naturally encompassesdesign issues, but foremost involvesdeveloping a profile and clear valuesbuilding the brand. The concepts of‘Adventure’ and ‘Comfort’, will clearlymark the communication. Our ambitionis that everyone, even those who do notuse Dometic’s products, in time will beaware of Dometic and the fact thatDometic passionately works to promotemobile leisure life, with all its experiences,to as many people as possible.The special absorptionrefrigeration technology can run onnumerous different energy sources and iscompletely silent and free from vibrations. Thedesign is both stylish and practical. Dometic’s RVrefrigerators hold surprisingly much, despite smallexterior measurements. Sizes range from 40 toover 400 liters. During the year, the TecTower, acombined refrigerator, freezer and oven was verysuccessful on the European market.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

12 Special Refrigeration SystemsSpecial Refrigeration Systems 13Unique productsfor new marketsSpecial Refrigeration Systems is Dometic’s other business area and comprises a series of products,all based on Dometic’s knowledge of special refrigeration solutions. Most of these productsuse Dometic’s unique absorption technology, a technology that unlike other refrigeration technologiesworks without any vibrations or intrusive noises.The most well-known Dometic productswithin this business area are the miniBarfor hotel rooms, compact refrigerators forCompact Living, wine-cellars for vibrationfreelong-term storage and a wide rangeof products for medical refrigeration.Hotel products increaseas the world shrinksDometic’s RV and marine businessesstrive to promote the advantages ofmobile leisure life around the world.However it is the mobility of people, thedesire to seek out new experiences, thatis Dometic’s vision. Dometic’s activitieswithin Special Refrigeration Systems fitwell in this context. Travel costs per kilometreare falling making the world eversmaller in practice. The world’s hotelindustry is recovering after the temporarydownturn during the beginning of thiscentury. The Olympic Games in Chinastimulates the hotel development in whatis potentially the world’s biggest hotelmarket. Established hotel markets arealso facing extensive modernisation aftera number of years of poor room occupancylevels and underinvestments.Dometic’s role is to develop and sellproducts that provide the world’s hotelguests with more comfort and security.MiniBar is a range of hotel room refrigeratorswhich, since Dometic’s launch in the1970s, has been so successful and2005 in brief• Net sales for the business area amountedto SEK 743 (696).• The hotel industry continued its recoveryand sales have developed well, particularlyin Western Europe. In Asia and NorthAmerica, the hotel industry’s recovery hashowever progressed more slowly.• Within Medical Refrigeration Systems,Dometic won a number of importantprestigious orders from global aid organisationsand the pharmaceutical industry.• A new rotation-moulded iceliner has beenlaunched. The iceliner is a compressorcooledbox for storing vaccines. Its supplementaryice-cooling in the form of rodsacts as a cooling buffer in the event of apower cut, maintain the cooling effect formany hours. A new generation miniBarwas launched and part of the miniBarproduction was concentrated to Hungaryfor efficiency and cost reasons.Since 1973, Dometic produces and sells theclassic and trendsetting miniBar, a product thathas been so successful and accepted that it hasgiven its name to an entire category of products.The miniBar is built on the completely silentabsorption technology and is available in numerousstyles and sizes. The product range includesboth advanced miniBars with automatic debitsystems as well as traditional ”honor bars”. TheRH 461 LDG holds 60 liters while the glass doorprovides an inviting presentation its contents.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5accepted that it has given its name to anentire category of products. Dometic’sminiBar continues to dominate its market.Pleasingly, it is not just the mostadvanced miniBars that are in demand asthe classic version also remains successful.During the year a new generationminiBar Classic was launched whilesome of the miniBar production wasD O M E T I C A N N U A L S U M M A R Y 2 0 0 5Travel becoming less expensive, has had a shrinkingeffect on the world, with more and more peopleseeking experiences outside the home as a consequence.The hotel industry is about to undergo significantmodernization following a number of yearswith lower occupancy rates and postponed investments.Apart from the miniBar, Dometic also offerssmaller safes that more and more often are standardequipment in modern hotel rooms.

14 Special Refrigeration SystemsSpecial Refrigeration Systems 15relocated to the factory in Hungary forefficiency and cost reasons. During 2005,competition continued to be strong andwork is under way both to further reducecosts and to develop new products.MiniBar is the in-step to the hotel industry,where Dometic has the quality andproduct range to attract the majorglobal hotel chains. Once established,Dometic offers more products, the mostprominent of these being small safeswhich increasingly are seen as standardequipment in hotel rooms. During thebility with regard to energy sources, isideal for vaccine storage, not least indeveloping countries where access toelectricity is unreliable or non-existent.Dometic also manufactures refrigeratorsand freezers for hospitals, laboratoriesand blood centres. These are compressor-driven,a cooling technology whichworks well in stationary cabinets andwhere extreme refrigeration, down tobelow minus 80°C, is needed.During 2005, Dometic won a major orderfrom UNICEF for refrigerators for vac-hotels, while compact refrigerators arebecoming more common within healthcareand in student housing. Similarly,the need for medical refrigeration isincreasing as healthcare throughout thewestern world expands, an effect of theolder generation's increased demandsto retain their quality of life for longer.One of the absorption technology'smain strengths is that it is completelyfree from vibrations. The technology istherefore used in a range of exclusivewine-cellars. Vibrations speeds on theThe interest for wine is increasing in most partsof the developed world. Increased knowledgeabout wine itself has lead to more and morehouseholds choosing to invest in advancedwine storage. This means that there is significantpotential in Dometics wine cellars that withthe absorption technology offer a completelyvibration free environment for wine storageyear, new products were launched withinthe ProSafes range.Dometic has supplier agreements with anumber of major global hotel chains andworks closely with these chains to continuallyensure a dialogue relating to theirrequirements and needs for function anddesign.cine storage. It is also worth noting thatDometic’s new sample transport boxsuited for medical samples, the MT4S,won a Swedish public sector procurementcontract for Region Skåne. Thesample transport box has been developedin close collaboration with LundUniversity Hospital and is based on rigidspecifications drawn up by the hospital.maturation process too quickly and thewine fails to develop a deeper character.Dometic’s wine-cellars are availablein a range of sizes and designs. Commonto them all is that the unique technologyon which they are based which appealsto a more exclusive segment than thetraditional white goods sector’s compressor-basedwine refrigerators.Exciting projectsin medical refrigerationMedical Refrigeration Systems includesboth portable boxes and stationaryrefrigerators for storing vaccines, blood,medicines and samples. Dometic’s technicalspeciality, the absorption refrigerationprinciple, with its reliability and flexi-Specialised refrigerationproducts with huge potentialHotel room products, medical refrigeration,compact refrigerators and winecellarsall have considerable futurepotential. The miniBar and compactrefrigerators are on the way to becomingstandard equipment, even in simplerOverall, Special Refrigeration Systems isthe smaller of the group’s two businessareas, but it is an area where there is considerabledevelopment opportunities andsignificant potential. Over the next fewyears, the business area will continue todevelop unique products for new applicationsand new markets.Dometic’s Medical Refrigeration comprises refrigerators and freezers that fulfillthe high requirements when storing temperature sensitive medical productsor medicines. The refrigerators are available in a range of sizes, with absorptionor compressor technology and are constructed for use in hospitals, laboratoriesor blood centers or for transports under extreme conditions.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

16 Research and developmentResearch and development 17Dometic’s customers appreciate high quality and new functionsthat make the products easier to use. That is why Dometicevery year invests significant resources to develop newproducts that fulfill customers’ requests for technicalheight, ergonomics and design. Dometic’s R&Dcommitment is clear testimony of the Group’saim to be the leading partner to the world’sRV and marine industry.Our aim is to continue to leadfuture developmentProduct development, design and production are important internal processes and an integral partof the Group’s operations. Dometic sets the standards for interior equipment in RVs and largepleasure boats and is responsible for creating much of the demand in the markets in which theproducts are sold. The aim is to continue to lead development.Research and developmentDometic works closely with manufacturers,retailers and end users. It isimportant to, at an early stage, be ableto capture signals from the ‘trendsetters’in the industry. Dometic's goal isto constantly be one step ahead, toidentify possible needs before customersand end-users do and createdemand through functional and attractivedesign.During 2005, the Group spent a total ofMSEK 128 (132) on research and development,equivalent to 2% (2%) of theGroup’s total net sales. Three-quartersof R&D investments related to newproducts and new applications, areaswhere Dometic has an opportunity tocreate new needs and thereby createdemand itself. Moreover, Dometic isconstantly creating added customervalue by continually improving andupgrading existing products with newfunctions and features. During 2005, aquarter of the R&D budget was investedin the further development of existingproducts.DesignDuring 2005 work began to establish acommon design style and profile for theGroup’s products. First in line areDometic’s products for the RV market.Colors, shapes, structures, buttons,displays, handles, will be designed toclearly state that ‘this is a Dometicproduct’.Dometic’s products will signal aestheticqualities that point out the direction ofthe industry, be distinctly ergonomic,with a functionality that exceeds expectations.The aim has long been toachieve the same level of comfort thatusers are accustomed to at home.More efficient production anddistributionDometic’s structure for productionand distribution shall ensure:• Very high product quality, primarilythrough utilising and retaining the specialistexpertise that has establishedDometic’s leading position in terms oftechnology and quality. Dometic’smajor production facilities are certifiedin accordance with the internationalquality standard ISO 9001.• Optimal proximity between productionand customers. Integrated solutions,flexibility and short lead-times arebecoming increasingly important andDometic’s aim is to continuously trimthe organisation.The continuous expansion of the Groupprovides excellent opportunities toexploit economies of scale for productionand procurement. Depending onthe type of product that is acquired, anassessment is made to whether theproduction in the acquired companymay be integrated into an existingfacility for production or distribution.The Group’s size and global reachD O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

18 Research and developmentResearch and development 19RV andSpecialCountry Location Main products Marine Systems Refrigeration SystemsSweden Motala Large absorption refrigerators • •Tidaholm Window components •Canada Ingelside, Ontario Sanitation porcelain •China Suzhou miniBars •Germany Siegen Medium-sized absorption refrigerators • •Krautheim Windows •Rooflights•Blinds/insect screens•Doors•Dillenburg Lighting systems •Rudersdorf Speciality products •Hungary Jászberény Small absorption refrigerators and portable boxes • •Italy Forli Air conditioning and generators for recreation vehicles •Milan Air conditioning systems for pleasure boats •Luxembourg Hosingen Medical refrigeration systems •Mexico Ciudad Juárez (2 factories) Compressor refrigerators •Slovakia Filakovo Cookers, ovens and sink units •South Africa Bronkhorstspruit Multi-Energy refrigerators • •Spain Girona Safes • •USA Pompano Beach, Florida Air conditioning systems for pleasure boats •La Grange, Indiana Awnings •Ontario, California Awnings •Big Prairie, Ohio Sanitation systems •Richmond, Virginia Air conditioning systems for pleasure boats •Components for awnings•Air conditioning systems for recreation vehicles•creates major opportunities for synergiesbetween different parts of theorganisation.The group has a goal of increasing theprocurement of components from lowcostcountries. Dometic is also continuouslyseeking to improve the efficiencyof its production processes. The productionof Blast Freezers, located inHeidenau in Germany, was relocated toDometic’s production facility in Luxembourg,where all other production ofmedical products has been concentrated.At the end of the year, logistics was rationalisedin Scandinavia. This was implementedwithin the framework of a majorreview of all logistics operations inEurope, a review which will continue in2006. The initiatives are examples ofDometic’s efforts to constantly improveAlso small details, such as this ventilation gratefor pleasure boat air conditioning, needs to bewell designed and suit the interior furnishings –be both stylish and functional.its competitiveness by streamlining productionand distribution and utilising theGroup’s own resources to the full.Service as a competitive factorAfter-sales service is a vital competitivefactor. End-users’ have significantdemands and requirements on not onlythe product quality itself, but also thatDometic is able to quickly rectify anyfaults or defects.Dometic has by far the best developedservice and spare parts organisation ofall the companies within the sector. ForDometic’s customers – manufacturersof RVs and pleasure boats – it is aninvaluable asset to know that Dometiccan provide service virtually anywhere,any time. This allows retailers to promisetheir customers a service level thatcan be delivered in reality.Service will become increasingly important,both because products arebecoming more advanced and moreintegrated into systems and becauseend-users will have even more exactingdemands on their suppliers in thefuture. Dometic is very well positionedin the industry to meet the quality andservice requirements of tomorrow.The aim of Dometic’s research and development is to determine possible needs before the customersdo and to create demand through improved functionality and attractive design. The potential for innovationis far from exhausted. Dometic will during the coming years continue to launch products thatincrease the comfort in an RV or pleasure boat even further.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

20 21D O M E T I C A N N U A L S U M M A R Y 2 0 0 5 D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

22 EnvironmentEnvironment 23A better environment to enjoyduring our leisure timeEnergyrequirement(kWh)40 00035 00030 00025 00020 00015 000Life cycle analysis for RVair conditioning unit B210010 0005 000We are continually striving to improve the environmental performance of our operations and productsand to prevent any harmful effects on the environment.0Production phase Usage phase End-of-life phaseEnergy requirement for each of the life cycle phases forusage 100 days/year in Germany/France. The environmentalimpact from production and end-of-life isneglectable compared to the usage phase.All of our operations and products mustcomply with the regulations and requirementslain down by authorities as wellas by customers. We are committed tothe efficient use of natural resourcesand to sustainable development. Thismeans striving towards the efficient useof materials and energy during design,production, purchase, logistics, use anddisposal of all our products.DOMETIC’S ENVIRONMENT POLICYlays down that the Group strives to:• Reduce the environmental impact ofour products and their production• Improve the environmental awarenessof our employees and business partnersNumberCertified accordingPlats of factories to ISO 140012005 2004 2005 2004Europe 12 13 7 4North America 8 8 0 0Rest of the world 2 2 0 0• Encourage and assist suppliers toimplement and maintain environmentalstandards as high as ours•Ensure that information concerningour environmental activities is easilyaccessible to employees, customers,authorities and other interested parties• Consider future environmental developmentsStrategyDometic’s local environmental work isbased on the central environmental programmeand is carried out within theframework of a Environmental ManagementSystem (EMS). All productionfacilities must have such a system,although the requirement is initially tomeet an internal minimum standard,Minimum Environmental Requirements(MER), comprising an environmental coordinator,the evaluation of environmentalrisks and the setting of measurableimprovement targets.The long term goal is for all factories touse the international standard ISO14001, and the work on this has alreadycommenced at the European factories.At the end of 2005, seven out our 12European factories were environmentallycertified in accordance with ISO 14001.This work is continuing during 2006 withthree further factories.Environmental organisationDometic’s environmental work is led bya central environmental manager who inturn is accountable to a environmentalmanagement group (the EnvironmentalBoard), which includes the Chief ExecutiveOfficer and representatives forproduct development, manufacturingand marketing. The environmental man-kWh10080604020Decrease in energy consumptionwhen comparing three generationsof miniCool (40 litres and 60 litres)0199460 litres40 litres19992005The energy consumption of the miniCool that waslaunched in 2005 has decreased with approximately40 percent compared to the miniCool launched in 1994.ager has a number of local environmentalco-ordinators, one at each productionfacility. There are also two regionalenvironmental co-ordinators who areresponsible for North America and Germanyrespectively. Dometic’s local environmentalwork is based on an environmentalprogramme that is evaluated,updated and approved by the EnvironmentalBoard. Where ISO 14001 hasbeen introduced, evaluations are carriedout by independent assessors with theresult being submitted to the environmentalmanager.The basis for the environmental programmeis national and internationallegislation, future legislation and notleast the Group’s own ambitions. Someexamples are the EU’s Directive concerningEnd-of-life Vehicles (ELV), theDirective on the Restriction of certainHazardous Substances (RoHS), theDirective on Waste Electrical and ElectronicEquipment (WEEE) and future legislationconcerning the registration,evaluation, authorisation and restrictionof chemicals (REACH).Key figures for a betterenvironmentSince a number of years, Dometic hascollected data concerning environmentalmatters from all the group’s productionfacilities. This data measures energyconsumption, raw material consumptionand waste, both as totals and per manufacturedunit. The aim is to reduce consumptionand waste per manufacturedunit year on year, which correspondswell with the Group’s aim of reducing itsimpact on the environment. Similarly,many products are consuming less andless energy generation after generation.This means that end-users can play theirpart in helping to improve the environment,enabling them to enjoy it withgood conscience.Results 2005Dometic is a young group which isexpanding, partly through companyacquisitions worldwide. Sustainableoperation in the long term is a priorityissue. The challenges are considerable,but then so are our ambitions.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

24 EnvironmentEmployees 25• The work to certify our factories continuedduring 2005. The factory inForli, Italy was certified in accordancewith ISO14001 in May 2005, and thefactories in Tidaholm, Sweden andRudersdorf, Germany were both certifiedin accordance with ISO14001 inDecember 2005.• Further lifecycle analyses (LCA) werecarried out for products for caravansand motorhomes; an air-conditioningunit, a generator and toilet systems.These analyses confirm that for energy-consumingproducts environmentaleffects during the usage phase of theproduct are dominant.• Environmental data sheets were preparedfor air conditioning, generatorsand a toilet system.• During the year, our manual for environmentallyfriendly product development,Environmental Design Guideline,was updated and supplemented.• Dometic has previously developed arecycling equipment for emptying thecooling system in absorption refrigerators.Such a plant has now been takeninto commercial operation and furtherplants are planned.• During the year our factories workedkWh/ton1 400Total energy consumptionto replace hazardousmaterials in products in accordancewith the EU’s RoHS Directive.Environmental goals for 2006• Our environmental policy will bereviewed and updated during 2006.This review is necessary, partly as aresult of the new factories that havebeen acquired and partly because ofnew regulation that have come intoforce.• The environmental section on Dometic’swebsite will be updated. A newenvironmental brochure will also beprinted. All sections will be madeavailable in more languages.• The collection of data for the Operation& Environment Report is continuing. Areport for each factory will be generatedfrom the data that is collected.• A further three factories are workingfor certification in accordance withISO14001. A number of factories willton/ton2.0Total fresh water consumptionalso start work inaccordance with theinternal system MER, MinimumEnvironmental Requirements.• An increasingly strong focus is beingplaced on recycling end-of-life productsin an environmentally friendlyway. During 2006, Dometic will carryout a study to develop an index thatindicates what proportion of productscan be recycled. This index canamong other things be used whendeveloping new products to facilitaterecycling.•As regards European environmentallegislation, Dometic keeps itselfabreast of the situation and the way inwhich environmental regulations couldaffect the company and its products.This applies for example to the currentDirective on Waste Electrical and ElectronicEquipment (WEEE) and theDirective on the Restriction of certainHazardous Substances (RoHS) andthe yet to be approved regulationsconcerning greenhouse gases and thenew chemical legislation REACH.ton/ton0.10Distribution of total wasteQuality requires experienceand competenceDometic’s employees are a central resource within the Group, a resource which must be nurturedand developed. The Group’s successes depend on the experience and skills of its employees.Dometic’s strategic goals are realisedthrough everyone’s right to a healthyworking environment, to good collaborationbetween colleagues and tostimulating professional development.The sales companies, regional officesand production facilities are responsiblefor the professional development ofemployees and for ensuring that fundamentalprinciples for collaborationbetween employees follow the group'spolicies.1 3801 3601 3401 3201.81.61.41.20.080.060.040.02Dometic’s successes are based onknowledge and experience among individualemployees and on the Group’semployees working in a common culture.All employees shall have theopportunity to achieve higher positionswithin the Group. Such opportunitiesare essential to be able to retain competentpeople and to supply the Groupwith competent managers.1 300200320042005Total energy consumption (kWh/ton)Dometics relative energy consumption per ton finalproducts, calculated for a selection of Dometicsmanufacturing plants, 2003–2005.1.0200320042005Total fresh water consumption (ton/ton)Dometic's relative fresh water consumption per ton finalproducts, calculated for a selection of Dometicsmanufacturing plants, 2003–2005.0.00200320042005Recycled waste per ton final productsWaste for landfill per ton final productsHazardous waste per ton final productsTotal waste per ton final productsDistribution of waste generation per ton final products,calculated for a selection of Dometics manufacturingplants, 2003–2005.Dometic’s management works closelywith the employees’ elected representatives.During 2005, discussionswere concluded concerning a groupunioncollaboration and an agreementwas signed in the beginning of 2006.The average number of employees duringthe year was 4,201 (4,367), of whom2,648 were men (63%) and 1,553 werewomen (37%). Geographically, employeeswere distributed with 3,007 in theregion Europe, Middle East and Africa,1,139 in the Americas and 55 in the restof the world.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

26 HistoryHistory 27Celebrating the 80th birthdayof the absorption refrigeratorIn 2005 it was 80 years since the industrial productionof the world’s first practical household refrigeratorbegan in Dometic’s factory in Motala. This Swedishinvention revolutionized handling of food and hasradically improved the health and quality of life inlarge parts of the world. Refrigerators are stillproduced according to original patents, in the samefactory in Motala where history once began.1922Baltzar von Platen and Carl Munters invent thefirst absorption refrigerator. A patent is granted onMarch 8, 1923.1925Electrolux acquires the von Platen-Munters patentand introduces the world's first absorption refrigeratorfor households. A patent is granted in theU.S. in 1926.1927Servel Inc., an Electrolux company in the UnitedStates, begins to manufacture refrigerators onlicense for the U.S. market.1930sRefrigerators begin to be regarded as standarditems in modern middle-class households. The“people’s refrigerator”, in various sizes andmodels, is a success and sales volumes set newrecords every year.1936The millionth absorption refrigerator is sold1950sRefrigerators are improved substantially andoperate with 30% less energy. Competition fromcompressor refrigeration technology gets tougher.The first refrigerator for caravans is introduced.1960sAbsorption refrigeration sees a renaissance dueto the substantial demand for refrigerators forcaravans. AB Electrolux establishes a subsidiaryin the U.S. – Dometic Sales Corporation. Thecompany markets refrigerators for caravans andother recreation equipment under the Dometicbrand.1970sThe product line for caravans and boats isexpanded. Piezo-electrical ignition is introducedon most refrigerator models.1973Acquisition of Siegen Metallwarenfabrik in Siegen,Germany, which entails a complementary model,especially in the German market.1980sVery strong demand for RV refrigerators followingthe first oil crisis. An electronic refrigerator thatautomatically selects the most appropriatemethod of operation is introduced as a worldinnovation.1985Acquisition of Duo-Therm Corporation, which producesair-conditioning and heating equipment forRVs. Origoverken, which produces cookers andovens for pleasure boats, is acquired in 1986.1988Acquisition of A&E Systems Inc., the largest U.S.manufacturer of awnings for recreation vehicles.1990sMedical refrigeration is developed from a conceptto a full-scale business. Development and expansionof operations involving generators for RVs.First water-purification system is developed2000Acquisition in Germany of Seitz, which manufactureswindows and doors for recreation vehicles.2001As of July 31, Electrolux sells most of its LeisureProducts product line to the venture-capital companyEQT. The Dometic Group is created.2002Dometic acquires Electrolux’s Leisure Productoperations in Germany and Slovakia as of January31. The Dometic Group thereby becomes acomplete legal group. Acquisition of SeaLand, theleading U.S. manufacturer of sanitation systemsfor the pleasure boat industry.2003Dometic’s product range expanded with lightingsystems and the acquisition of the U.S. company,Taylor Made Environmental, strengthens Dometic’sposition as a system supplier to the marine industry.2004Additional acquisition within medical refrigeration.2005Per June 3, the Dometic Group is acquired byfunds advised by the European private equitycompany, BC Partners.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

28 Group ManagementGroupManagementLars Johansson(born 1948)President andChief Executive Officer.Employed since 1972.Jan Lindstedt(born 1956)Chief Financial Officer.Employed since 2004.Rutger Wachtmeister(born 1954)Executive Vice President –Marketing and Sales.Employed since 1991.Anders Almqvist(born 1949)Executive Vice President ofTechnology and Production (CTO).Employed since 1979.Roger Maurer(born 1959)Group Business Control.Employed since 2000.John Waters(born 1946)Executive Vice President –North America.Employed since 1991.Joachim Kinscher(born 1957)Executive Vice President –Sales Europe.Employed since 1978.Reimund Spies(born 1951)Director, Group Mergers &Acquisitions.Employed since 1978.D O M E T I C A N N U A L S U M M A R Y 2 0 0 5

RV and Marine SystemsWater• Sales offices/branch offices• Production facilitiesRV EquipmentPortableRefrigeratorsHotel EquipmentDual EnergyRefrigeratorsMarine EquipmentPurifiersSpecial Refrigeration SystemsMedical RefrigerationEquipmentWine CellarsCommercial VehicleEquipmentCompactRefrigeratorsCruise EquipmentProductoverviewHEAD OFFICEDometic International ABTorggatan 8SE-171 54 SolnaSwedenSALES OFFICES/BRANCH OFFICESDometic Pty Ltd.P.O. Box 1140Clayton South,Vic 3169Australiadometic@dometic.com.auDometic GmbHBranch Office Belgium709 BergensesteenwegBC – Business Center«Zennevallei»B-1600 Sint-Pieters-LeeuwBelgiumsales@dometic.beDometic do Brasil Ltda.R. Luigi Galvani, 42 – cj. 9604575-020 Brooklin NovoSão Paulo – SPBrazilinfo@dometic.com.brDometic Corporation200.229 33rd Street NECargary, Alberta T2A 4Y6CanadaDometic Corporation866 Langs DriveCambridge, Ontario N3H 2N7CanadaDometic ABBranch Office DanmarkLundtoftegårdsvej 93 ADK-2800 - Kgs LyngbyDenmarkinfo@dometic.dkDometic ABBranch Office FinlandPakkalankuja 7 A 13FIN-01510 VantaaFinlandinfo@dometic.fiDometic S.N.CZ.A du Pré de la Dame JeanneB.P. 5F-60128 PlaillyFranceinfo@dometic.frDometic GmbHPostfach 101051D-570 10 SiegenGermanyinfo@dometic.deDometic Ltd99 Oakley RoadLutonBeds LU4 9GEGreat Britaininfo@dometic.co.ukDometic Marine UKUnit B8 Arena Business CentreHoly Rood ClosePooleDorset BH17 FLGreat BritainDometic Rt.Fémnyomó út 1H-5100 JászberényHungaryinfo@dometic.huDometic Pte Ltd, HK BranchSuite 901, 9th FloorMillenium Trade Center56 Kwai Cheong RoadKwai Chung, N.THong Konginfo@dometic.com.hkDometic ABBranch Office India512-513 Nav Nirman KendraFamous Studio Lane400011 MumbaiIndiaCondaria ´87 S.r.l.Dometic Marinevia Vesuvio 18I-20054 Nova Milanese (MI)ItalyDometic S.p.A.Strada Carignano 48 bisI-10024 Moncalieri (TO)ItalyDometic KKYasuda Shibaura Bldg #23-2-12 Kaigan, Minato-kuTokyo 108-0022JapanDometic S.à r.l.17 Op der HeiL-9809 HosingenLuxembourginfo@dometic.luDometic ABRegional Office Latin America & CaribbeanCalle Gladiolas 232 Col. La FloridaNaucalpanEstado de Mexico CP 53160MexicoDometic ABBranch Office NorwayRisløkkveien 2Box 77 ÖkernN-0508 OsloNorwayinfo@dometic.noDometic GmbHBranch Office Polandc/o ElectroluxUl. Kolejowa 5/7PL-01-217 WarszawaPolandDometic S.L.Branch Office PortugalRua Marquês de Subserra, 10P-1070-170 LisboaPortugalinfo@dometic.ptDometic Private LimitedSuite 10-02, 10th Floor10 Toh Guan Road #10-02TT International TradeparkSingaporedometic@dometic.com.sgCramer SR s.r.oTehelná 8SK-98601 FilakovoSlovakiacramer@cramer.skDometic (Pty) LtdP.O. Box 153820 1/2 Manganese StreetEkaindustria1020 BronkhorstspruitSouth Africainfo@dometic.co.zaDometic S.L.Camino de Pinares Llanos, 9Polígono Industrial Pinares LlanosE-28670 Villaviciosa de OdónMadridSpaininfo@dometic.esDometic ABTorggatan 8SE-171 54 SolnaSwedeninfo@dometic.seDometic ABDometic Marine-Nordic/ OrigoOlofsdalsvägen 15SE-302 41 HalmstadSwedeninfo@dometic.seDometic GmbHBranch Office NetherlandsP.O. Box 120NL-2400 AC Alphen A/D RijnThe Netherlandsverkoop@dometic.nlDometic ABRegional Office Middle East & North AfricaAl Hawai Tower, Sheikh Zayed RoadP.O. Box 74775DubaiUnited Arab Emiratesinfo@dometic.aeDometic CorporationP.O. Box 490Elkhart, IN 46515USADometic Corporation – Environmental Systems2000 North Andrews Avenue Ext.Pompano Beach, FL 33069USADometic Corporation – Environmental Systems8433 Erle RoadMechanicsville, VA 23116USADometic Sanitation Corporation13128 State Rt. 226P.O. Box 38Big Prairie, OH 44611USAFACTORIESNorceram Products Inc.Dometic Sanitation SystemsP.O. Box 370, Hwy 2Ingleside, Ontario, KOC 1MOCanadaDometic (Suzhou) Appliances Co. Ltd.888 Puzhuang Road, Wuzhong DistrictSuzhou 215105ChinaDometic GmbHPostfach 101051D-570 10 SiegenGermanyDometic Seitz GmbHAltkrautheimer Strasse 28D-74238 KrautheimGermanyDometic GmbHUmformtechnikWerkstrasse 32D-57234 WilnsdorfGermanyDometic Light Systems GmbHDillenburger Strasse 59D-356 85 DillenburgGermanyDometic Rt.Fémnyomó út 1H-5100 JászberényHungaryCondaria ´87 S.r.lvia Vesuvio 18I-20054 Nova Milanese (MI)ItalyDometic W.T.A. S.r.l.Via Virgilio 3I-47100 ForliItalyDometic S.à r.l.17 Op der HeiL-9809 HosingenLuxembourgDometic MX S de R L de C.V.Eje Vial Juan Gabriel No. 5155Col. Jarudo Norte.Cd. Juarez, Chic, Mexico, C.P. 32652MexicoDometic MX S de R L de C.V.Ave. Lopez Mateos No. 216Col. Partido Romero.Cd. Juarez, Chic, Mexico, C.P. 32030MexicoCramer SR s.r.oTehelná 8SK-98601 FilakovoSlovakiaDometic (Pty) LtdP.O. Box 153820 1/2 Manganese StreetEkaindustria1020 BronkhorstspruitSouth AfricaDometic S.Lc\. Güell, 40-Poligon Güell VellE-171 80 Vilablareix (Girona)SpainDometic ABMotalafabrikenSE-591 82 MotalaSwedenDometic Seitz ABBox 300SE-522 26 TidaholmSwedenDometic Corporation509 South Poplar StreetLa Grange, IN 46761USADometic Sanitation Corporation13128 State Rt 226P.O. Box 38Big Prairie, OH 44611USADometic Corporation – Environmental Systems2000 North Andrews Avenue Ext.Pompano Beach, FL 33069USADometic Corporation – Environmental Systems8433 Erle RoadMechanicsville, VA 23116USADometic Corporation1400 East Holt Blvd.Ontario CA 91761USA