Annual Report 2006 - Munters

Comments on the performance during the yearThe following comments refer to the performance of the Groupduring the year. Comments on the performance of the divisionsare provided on pages 12–29.Order intake and net salesDuring the year, the Group’s order intake rose 8 percent(adjusted for currencies and acquisition and divestment ofoperations, by 10 percent) to SEK 5,761 M (5,340). All divisionsreported highly favorable order growth during the year.The order backlog increased by 2 percent and was SEK 868 M(849) at year-end.Net sales during the year rose 11 percent (currencyadjusted,by 12 percent) to SEK 5,712 M (5,130). All divisionsreported good growth during the year.Gross earningsGross earnings increased by 12 percent (currency-adjusted 1 ,by 13 percent) to SEK 1,604 M (1,429). The gross marginincreased to 28.1 percent (27.9).Indirect costsSelling and administrative costs increased by 6 percent(currency-adjusted 1 , by 7 percent) to SEK 1,031 M (969),corresponding to 18.0 percent (19.0) of net sales. Research anddevelopment costs amounted to SEK 52 M (46), correspondingto 0.9 percent (0.9) of net sales. Development costs inconjunction with customer order projects and developmentcosts for the service concept for the MCS operations arereported as a cost in current operations.EBITEBIT rose 31 percent (currency-adjusted 1 , by 32 percent) toSEK 529 M (405). The EBIT margin rose to 9.3 percent (7.9).Capital expendituresThe Group’s investments during the year in tangible assetsamounted to SEK 153 M (126). The largest item, amountingto SEK 63 M (38), refers to investments in MCS equipment.Investments in intangible assets excluding goodwill amountedto SEK 6 M (2). Depreciation and impairments amounted toSEK 136 M (141).Financial itemsNet financial items decreased to an expense of SEK 15 M(expense: 14), mainly as a result of higher interest rates.Financial positionThe equity ratio at year-end amounted to 48 percent (49).Interest-bearing assets amounted to SEK 201 M (178) andinterest-bearing liabilities amounted to SEK 458 M (493).The net debt declined during the year by SEK 58 M to SEK257 M, including changes pertaining to revised accountingprinciples of pensions IAS 19. During the year, MuntersAB received SEK 3 M from the sale of treasury stock inconjunction with the maturity of the call option programand distributed SEK 135 M (98) to shareholders. The Group’sacquisition and divestment of operations during the yearreduced cash and cash equivalents by SEK 132 M. The Grouphas SEK 522 M (185) in unutilized credit facilities.TaxesThe tax expense for the year amounted to SEK 186 M (139),corresponding to an effective tax rate of 36 percent (36). Thisexceeds the tax rate of 28 percent in Sweden, due to the factthat a significant portion of the Group’s profits are generatedin subsidiaries in countries with higher tax rates and alsoowing to non-tax-deductible costs.Parent CompanyThe operations of Munters AB encompass Group-wide functionsand certain functions of the MCS Division. Earningsafter financial items during the year amounted to SEK 929 M(104). This includes SEK 963 M (126) in dividends receivedfrom subsidiaries. There were no net sales outside the Group.Interest-bearing assets at year-end amounted to SEK 22 M(7), while the net debt amounted to SEK 281 M (252). Investmentsin tangible fixed assets during the year amounted toSEK 11 M (5).1Adjusted for currencies and acquisition and divestment of operations.42 M U N T E R S A N N U A L R E P O R T 2 0 0 6