Annual Report 2006 - Munters

Carl Munters’ first sketch of a rotorInventor Carl Munters’ (1897–1989) skills in thermodynamics,specifically the interaction between air, water and energy, helpedlay the foundation for Munters operations in 1955. His original ideawas a cooling system based on evaporative cooling and dehumidification.His work resulted in the development of a dehumidificationrotor and a cooling pad – CELdek® – two innovations that havecontinued to be refined, resulting in a number of commercialsuccesses and forming the basis for current Munters operations.method. The benefits of dehumidification instead of demolitionand removal of damaged equipment and building materialslater became the industry standard.Incentive acquired Munters during the 1970s, expandingits operations internationally through a network of agents.During the 1980s, the agency business was acquired and MCSoperations were established in a number of countries whereMunters had previously been active – the modern Munterswas taking shape.Munters became a listed company in 1997 and itsoperational focus has shifted from components to productsand lately to complete systems and service solutions. Byincrementally expanding its offerings and through forwardintegration, Munters will acquire a larger portion of the valuechain within select niches, while simultaneously increasingmarket potential.New organizational structureUp until 2005, Munters was organized into three regions– Americas, Europe and Asia. Those regions were in turndivided into three product areas. Since mid-2005, the Grouphas been managed via three global product divisions – Dehumidification,MCS and HumiCool. That change was successfuland has resulted in higher gross margins and enableda more coordinated sales process to be achieved, aimed atinternational customers. In addition, the new organizationalstructure has contributed to a more concentrated productportfolio and stronger service offerings.Today, Munters is a world leader, holding a global marketshare of more than 50 percent in select niches. The companyhas operations in 30 countries and cooperates with strategicpartners for marketing, sales and service in several additionalcountries. Munters’ production strategy is to focus on manufacturingof key components and final assembly of productsand systems, quality control and distribution. With productionin 11 countries, Munters has a flexible, global productionstructure.Since becoming listed in 1997, the number of employeeshas grown from 1,871 to 3,552, while Munters has generatedaverage annual growth of more than 13 percent, resultingin an annual average return to shareholders, including dividends,of more than 21 percent.Trends that favor MuntersThe ongoing global structural transformation has resulted ingreater demand from companies for larger suppliers with aglobal presence. To ensure high product quality, productionenvironments must be identical, even if the production plantsare located in different climate zones.This trend will continue, benefiting Munters, which has astrong corporate brand and an organization to support its strategyto be global, customer-oriented and highly specialized.In addition, Munters is benefiting from the following fourgeneral trends:Increased environmental awareness and the need for moreefficient energy usage.Better indoor air quality requirements.Higher demands on freshness and natural quality in thefood processing sector.Consolidation in the insurance industry.Munters is responding to the above trends by continuallyreviewing and adapting its product and service offerings anddeveloping new, energy-saving and environmentally friendlysolutions, creating the conditions for sustainable, consistentand profitable growth, benefiting customers, shareholders andemployees as well as society at large.M U N T E R S A N N U A L R E P O R T 2 0 0 6