Annual Report 2006 - Munters

Step by step toward sustainable developmentStrategic focusMunters is a world leader in the field of humidity control. The company has established a strongposition in energy efficiency and environmentally friendly air treatment based on its strong keycompetencies within thermodynamics. Growth is primarily created by working closely with customerson new applications and an increasing proportion of complete systems and service solutions.Munters is focused on market segments where the Group can create a strong global position andgood profitability. By successively broadening and integrating the product and services portfolio,Munters is playing an increasing role in the value chain within selected niches, at the same time as itsmarket potential increases. The annual value of the potential market is estimated by Munters to beworth approximately SEK 60 billion.Business conceptMunters’ business concept is to be a global service and applications-orientedniche company for air treatment from a solidbase within dehumidification and humidification.Financial targetsSales growth of 10 percent per year over a period of severalyears.EBIT margin of 10 percent.Capital turnover rate of 3 times.Each division and business unit has individual targets forthese key figures that have been adapted to suit their specialconditions. Shareholder value is created through high growthcombined with strong margins and a high capital turnover rate.Dividend policyThe intent of the Board of Directors is to apply a dividendpolicy that results in the dividend level being adapted toMunters’ earnings level, financial position and other factorsdeemed relevant by the Board. In accordance with this, theBoard has decided that the annual dividend shall compriseapproximately half of the Group’s average net earnings measuredover a period of several years.Operative targetsStrengthen Munters’ position in environmentally friendlyand energy-efficient solutions for long-term sustainablegrowth.Products and services shall be based primarily on globalproduct platforms.Steadily improve gross margin.Strengthen presence in the Asian market.Open new application areas and expand offerings.Efficient utilization of resources, low employee turnoverand good career opportunities.StrategyThe Group’s strategy for achieving its goals can be summarizedas follows:Position operations in order to best capitalize on globalmarket trends.Regularly identify and utilize the advantages of the globalorganizational structure.Increase resources to develop product platforms that arebased on modules and flexibility.Expand offerings, forward integrate and implementcomplementary strategic acquisitions.Coordinate purchasing, manufacturing and product developmentglobally.Increase quality and productivity through the MuntersEfficiency Program.Expand manufacturing and sales resources in the Asianmarket.Shared and individual training programs that result incompetent and motivated employees.Develop integrated IT systems to increase the company’sefficiency through rapid transfer of information, efficientresource utilization and shorter lead times. M U N T E R S A N N U A L R E P O R T 2 0 0 6