Annual Report 2011 (5.07 MB, PDF-File) - Oerlikon

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Shareholders’ letter
Dear Shareholders,
I am pleased to report on a very positive year for Oerlikon in
2011. The business is developing well, putting us in a strong
position to build for the future. The management team has
done an excellent job, and much progress has been made
across the company. We still have challenges ahead, but I am
confident we can meet them head-on and continue to deliver
further improvements in the coming year.
The company is focused on profitable sales growth based on
innovative technology underpinned in all areas by a culture of
Operational Excellence. We have streamlined our businesses,
moved decision-making closer to our key markets, and are
operating more efficiently in 2011.
The management team’s agenda of continuous improvement
through Operational Excellence, which is fully supported by
the Board, is key to our long-term success, and will take time
to fully embed across the company. In the uncertain macro-
economic and political environment we currently face it is important
that we stay the course with this agenda and continually
assess performance against our peers.
Overall, we are pleased with our progress relative to our peers,
particularly regarding profitability. Pleased, but not satisfied.
This sentiment drives restlessness in the management team to
question, to innovate, and to search for new ways to deliver for
our customers. In order to better serve customers and reflect
our market focus, we took a major decision to headquarter one
of our segments in Asia during the year. This decision was not
taken lightly. About half of the company’s revenues are now
generated in Asia and, although Group Headquarters remain in
Switzerland, our business is truly international. This trend to
Asia is likely to continue for some of our businesses, and we
must embrace it to remain competitive.
Our share price held up well in 2011, and although it does not
yet reflect the value we see in the company, it did significantly
outperform the equity markets in general.
The balance sheet now gives us a solid basis for managing the
company prudently through difficult economic conditions.
Financial strength, combined with a diversified business portfolio
across a range of geographies, will help the company to
withstand uncertainty through the different business cycles, and
within different markets.
To reflect this prudence, and reinforce a disciplined use of
cash, the Board has put in place a dividend policy. Up to 40 %
of net profit, subject to available funds, will be available for potential
distribution to shareholders. I am pleased to recommend
a dividend payment in respect of 2011 results of CHF 0.20 per
share to shareholders at the Annual General Meeting in April.
As the Board looks to the future, there are a few clear priorities.
We must be persistent in our technology development and our
pursuit of continual operational improvement. We must be efficient.
We must remain competitive, and close the gap to best-
in-class companies in each of our sectors. We must increase
our connection to key markets and stay in tune with customers’
changing needs. And we must stay focused on total shareholder
return.
It is clear that we are facing economic uncertainty in many interrelated
markets, not least of which is close to home in Europe.
The company is well placed to meet these challenges, and our
continued focus on innovation with Operational Excellence
puts us on course to navigate through these times.
On behalf of the Board, I would like to thank our shareholders,
our employees, customers and business partners for the commitment
and support you have invested in Oerlikon. We have
an exciting future ahead of us.
1 March 2012
Sincerely,
Tim Summers
Chairman of the Board of Directors