Annual Report 2006 - Munters

Facts – Moisture Control Services (MCS) Division“ MCS continues to work on delivering results to improvecompetitiveness, capture market share and improvemargins. Our strategy from 2005 holds firm, with continuedsuccessive implementation of professional key accountmanagement, improved processes and work routines forincreased productivity and implementation of a mobile ITsolution. We are continuing our work to build a globaldivision based on a common strategy and leadership.”Johan Söderström, Division PresidentDevelopments during 2006Continued strong growth and increased marketshare.Division profitability still insufficient despiteimproved profitability in Europe.Firm acceptance measures and advances weremade during 2006 in regard to all strategicinitiatives with the goal of improving competitivenessand margins. The organization andleadership has been reinforced with the goal ofachieving increased stability and reducedweather dependence. Among its initiatives,MCS implemented a project manager trainingprogram in 2006, resulting in around 80 personnelreceiving certification.Restructuring program and development ofemployees completed in Germany, withimproved profitability by the end of the year.Global framework agreement reached with AXAand several national insurance companies,including Trygg-Hansa in Sweden. Increasedcustomer shares through development ofprofessional relationships with key accounts.The MCS Division accounts for approximately 46 percent ofMunters sales. Operating earnings amounted to SEK 159 M (153),with an operating margin of 6.1 percent (6.5). A lack of projectsrelated to natural disasters during 2006 affected comparisons withthe previous year by a net amount of approximately SEK 70 M. Theoperating margin, excluding jobs in conjunction with naturaldisasters, was slightly better in 2006, compared with 2005,despite earnings being negatively affected by launch costs for anexpansion project for basic operations in the US.That initiative is aimed at reducing the operation’s dependence onlarger, individual damages and to signifi cantly expand sales in theUS over the long term. The restructuring program that was started inGermany during 2005 intensifi ed during the year, with improvedearnings during the second half of the year as a result.Program launched to strengthen and expandbasic operations in the US.Key figures 20062006 2005 Growth, %Adjustedgrowth, % 1Order intake, SEK M 2,541 2,444 4 5Net sales, SEK M 2,618 2,335 12 13Operating earnings, SEK M 159 153 4 5Operating margin, % 6.1 6.5Return on operatingcapital, % 19.7 21.8Capital turnover rate 3.3 3.3No. of employees, 31 Dec. 1,845 1,706 8 No. of service depots 302 3001Preceding year restated at 2006 exchange rates. M U N T E R S A N N U A L R E P O R T 2 0 0 6