Annual report 2008 - Munters

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18 Dehumidification division Global partners In addition to increased focus on energy-efficient solutions, major customers within the food and pharmaceutical industries are increasingly seeking global partners to guarantee product standards and achieve efficiency in purchasing. Munters is one of the few global companies in the industry, with manufacturing, sales and service operations in North and South America, Europe and Asia in an otherwise fragmented market. Competitors primarily consist of regional players that are active in their local markets or in specific niches. Munters’ market share amounts to about 14 percent of an estimated total market for customers in the industrial segment of slightly more than SEK 9 billion. The Dehumidification division is also specialized in humidity and temperature control in commercial premises frequented by many persons, such as department stores, schools, restaurants and hospitals. These customer segments account for one third of the division’s sales. In department stores, for example, Munters’ systems create a comfortable indoor climate for customers and personnel, while the dry air prevents ice formation in the freezer cabinets for frozen food. A customer group showing strong growth is schools, where high humidity often gives rise to mold, which can result in students being affected by allergies. Operating rooms, swimming pools and ice rinks are other examples of demanding applications with substantial requirements with respect to humidity and climate control. The acquisition of Des Champs Technologies in 2007 strengthened Munters’ position as a leading supplier of energyefficient systems for climate control for commercial buildings and enabled market coverage to be improved strongly with respect to both climate zones and customer applications. Energy-efficient solutions The largest players in indoor climate control for commercial buildings are traditional air-conditioning companies, such as Trane and Carrier. These air-conditioning systems are primarily intended for cooling intake air and are less suitable for regulating the humidity level. This means that the indoor climate becomes humid, with the resulting risk for mold and bacteria growth. The traditional solutions available for controlling humidity in these premises require significantly more energy than Munters’ solutions. Munters is a small player in the market for commercial air conditioning. However, through a niche strategy that focuses on technical leadership and energy-efficient products for treatment of ventilation air, a strong market position has been achieved. Today, Munters is the leader in products that control both temperature and humidity. Munters’ market share in these commercial segments amounts to about 14 percent of an estimated total market of SEK 5 billion. Cleaning emissions A smaller portion of the division’s operations, approximately 3 percent of sales, manufactures what are called Zeol systems that remove solvents from emissions in conjunction with production processes. This is a small but very profitable niche market. The largest customer segment is the semiconductor industry, but auto paint shops are growing in importance. The largest individual customer is Intel. Both the semiconductor and the automotive segments are cyclical with respect to investments, which affects Munters earnings trend. Munters market share in this niche amounts to about 12 percent. Customer-oriented product development Much of the division’s development work is focused on further development of the product platforms that serve as the foundation of the Munters dehumidifier range. With these modular platforms as a base, cost-efficient products are developed that create economies of scale and permit customization according to the very varied requirements of the customer segments. One example is the Integrated Custom Airhandler (ICA), which is a platform consisting of large industrial systems that accounts for one third of sales to industrial customers in the US market. One example of products for the commercial customer segment is DesiCool, which is an environmentally friendly and energy-efficient air treatment system that recovers waste heat and converts heat to cooling in office premises and production facilities. The DryCool product family, which was further enhanced in conjunction with the acquisition of Des Champs, has proven to be very attractive in the segment for public and commercial premises. Both DesiCool and DryCool will be manufactured in the newly acquired Toussaint Nyssenne in Belgium and thus become more available for a broad European market. Munters supplies dehumidification equipment to NASA At Cape Canaveral Air Force Station in Florida in the US, a plant for assembly of tomorrow’s satellites is now under construction. High demands are being placed on all equipment to be used in the plant, particularly considering the high humidity that prevails in this coastal area of Florida. In intense competition, Munters won an order to deliver ten large customized dehumidification units to NASA. Each unit contains specially manufactured peripheral equipment which had undergone rigorous quality controls. The units were delivered as planned in the autumn of 2008.
Dehumidification division 19 Developments during 2008 The first products to combine Munters and Des Champs technologies were launched during the year. The acquisition of the Belgian company Toussaint Nyssenne, a manufacturer of high-quality air treatment systems, was completed during the fourth quarter. The acquisition strengthens Munters’ market position within the European market for customized air treatment systems for offices and public buildings. The greatest potential lies in creating greater availability in Europe for Munters’ Drycool technology, which is very successful in North America. The acquisition will also facilitate more rapid growth through synergies in product integration, technology and distribution. Toussaint Nyssenne’s products complement and also expand Munters’ product range in industrial applications. The acquisition contributed 122 employees and annual sales of about SEK 193 million. Non-recurring costs of SEK 13 million for quality problems due to a sub-supplier were charged against earnings in the second quarter. Stronger presence in China provides the foundation for growth during 2009. Strategy • Global product platforms to achieve cost savings • Expansion in Asia • Strengthened presence in the European market for commercial products • Increase energy efficiency of products • Increase focus on energy-efficient industrial air treatment with DryCool and DesiCool • Improve margins through global purchasing and relocation of production, as well as global adaptation of the product range • Acquisitions that leverage Munters’ leadership in energy efficiency and dehumidification. Focus 2009 During the preceding year, much effort was devoted to implementing efficiency-enhancing measures within the framework of the Munters Efficiency Program. In addition, considerable focus was devoted within the division to streamlining the product portfolio to comprise a smaller number of global product families that are designed according to a modular philosophy. Furthermore, development continues to combine Munters and Des Champs technologies in new products. A similar technical and organizational development has been initiated with the newly acquired Toussaint Nyssenne. The division intends to continue its expansion within commercial products, including DryCool and DesiCool, in the European market. During 2009, the division will continue to selectively strengthen its presence in the Asian market and in addition ensure that production in the new Chinese plant develops according to plan. A broad product portfolio is manufactured in China, and the plant constitutes a production center for Asia, while being developed into a global center for purchasing of low-cost components. Better air when school starts Most children probably dream at times of escaping school. Perhaps it snows so much that school will be cancelled and students can sleep in late. Or perhaps the air conditioning breaks down on a hot summer day and school ends early. At Jefferson Forest High School in Forest, Virginia in the US, however, the problems were much greater. Severe mold growth and poor indoor air quality forced officials to close the school and start the summer vacation three weeks early. What was a dream come true for many students proved to be a formidable challenge for school officials. In a short period of time, they had to get the building in shape for the autumn semester. The problems with poor air had existed for some time, and both students and employees had complained about breathing difficulties, headaches and allergy-related symptoms. When the roof needed to be replaced, several leaks were discovered that had resulted in mold and bacteria growth. The real villain, however, was poor air circulation, which was particularly evident when the children were in the school. Humidity levels of 70 to 90 percent could be measured, while the level should not exceed 60 percent to prevent mold formation. Energy-efficient heat exchanger IMEC Engineers, which was employed for the sanitation project, was able to conclude that the existing air-conditioning system was only cooling the air but could not remove the humidity. “We needed a supplier who could solve the humidity problem as quickly as possible,” says J. Todd Owen from IMEC. He contacted Munters, which installed three permanent Wringer aggregates. These units contain Des Champs’ unique and energy-efficient heat exchangers and can be adapted to any climate. The moist outdoor air is cooled and dehumidified before being led into the building again. “After the installation, several measurements have been performed, and we are very pleased with the results. The problem is solved, and we also finished in time for the start of school,” comments J. Todd Owen. Munters Annual Report 2008
Page 1 and 2: APpROVED INDoOR CLIMATE bY MUNTeRS
Page 3 and 4: Munters 2008 The year in brief •
Page 5 and 6: Group overview 1 Rubrik Energy-effi
Page 7 and 8: CEO’s statement 3 “Although the
Page 9: Strategic focus 5 Prioritized activ
Page 12 and 13: 8 Business focus Munters’ product
Page 14 and 15: 10 Business focus Core values - res
Page 16 and 17: 12 Personnel Entrepreneurial spirit
Page 18 and 19: 14 Dehumidification division
Page 20 and 21: 16 Dehumidification division Contin
Page 24 and 25: 20 HumiCool division
Page 26 and 27: 22 HumiCool division Dramatic marke
Page 28 and 29: 24 HumiCool division Mist Eliminati
Page 30 and 31: 26 Moisture Control Services (MCS)
Page 36 and 37: 32 Risks and risk management Risks
Page 38 and 39: 34 The share and shareholders The s
Page 40 and 41: 36 Corporate governance report Corp
Page 42 and 43: 38 Corporate governance report Inte
Page 44 and 45: 40 Board of Directors and Auditors
Page 46 and 47: 42 Board of Directors’ report Boa
Page 48 and 49: 44 Board of Directors’ report in
Page 50 and 51: 46 10-year review GROUP IFRS 1 Prio
Page 52 and 53: 48 12-quarter review GROUP 2008 200
Page 54 and 55: 50 Income statement - Group Amounts
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Page 58 and 59: 54 Statement of the Group’s recog
Page 60 and 61: 56 Financial statements - Parent Co
Page 62 and 63: 58 Notes companies after tax, with
Page 64 and 65: 60 Notes “Net sale value” refer
Page 66 and 67: 62 Notes Changes in the market valu
Page 68 and 69: 64 Notes 2007 Currency Proportion o
Page 70 and 71: 66 Notes Purchase price - cash purc
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68 Notes Divisions Dehumidification
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70 Notes NOTE 9 Financial income an
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72 Notes NOTE 13 Patents, licenses,
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74 Notes Categories of assets and l
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76 Notes The Munters Group finances
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78 Notes the insurance companies ha
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80 Notes Remuneration and other ben
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82 Proposed distribution of earning
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84 Management 6 4 1 3 5 2 1 Lars En
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Munters AB (publ) Isafjordsgatan 1,
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Annual report 2008 - Munters

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