Annual Report 2006 - Munters

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Auditor’s reportTo the Annual General Meeting of Shareholders in Munters AB (publ)Corporate Registration Number 556041-0606We have examined the annual report, the consolidatedaccounts and accounting records, as well as the Board ofDirectors and the President’s management of Munters AB(publ) for the fiscal year 2006. The Company’s annual reportand consolidated accounts are included in the printed versionof this document on pages 1, 4–5, 8–31, and 38–65. The Boardof Directors and the President are responsible for the accountsand management of the company and for ensuring that theAnnual Accounts Act is applied in preparing the annualreport, as well as that the International Financial ReportingStandards, as adopted by the EU, and the Annual AccountsAct are applied in the preparation of the consolidatedaccounts. Our responsibility is to state an opinion on theannual report, consolidated accounts, and management of thecompany based on our audit.The audit was conducted in accordance with generallyaccepted auditing principles in Sweden. Those standardsrequire that we plan and perform the audit to obtain reasonableassurance that the annual report and consolidatedaccounts do not contain material misstatement. An auditincludes examining a selection of the supporting materials foramounts and other information in the accounting records.An audit also includes assessing the accounting principlesused and their application by the Board of Directors and thePresident, as well as judging the significant estimates madeby the Board of Directors and President when preparingthe annual report and evaluating the overall presentation ofinformation in the annual report and consolidated accounts.We examined significant decisions, actions, and conditionswithin the company in order to determine whether any liabilitytowards the company exists on the part of any director orthe President, and to determine whether they have otherwiseacted in contravention of the Swedish Companies Act, theSwedish Annual Accounts Act, or the company’s Articles ofIncorporation. We believe that our audit provides reasonablegrounds for the opinion stated below.The annual report and consolidated accounts were preparedin accordance with the Swedish Annual Accounts Act and thusprovide a true and fair picture of the company’s and the Group’sresults and financial position in accordance with generallyaccepted accounting standards in Sweden. The consolidatedaccounts have been prepared in accordance with the IFRSinternational accounting standards as adopted by the EU andthe Annual Accounts Act, and provide a true and fair picture ofthe consolidated earnings and position. The Board of Directors’report is consistent with the other parts of the annual report.We recommend that the Annual General Meeting adopt theincome statements and balance sheets of the Parent Companyand the Group, distribute earnings in the Parent Company asproposed in the Board of Directors’ report, and discharge thedirectors and the President from liability for the fiscal year.Stockholm, 7 March 2007Ernst & Young ABBjörn FernströmAuthorized Public Accountant66 M U N T E R S A N N U A L R E P O R T 2 0 0 6
GLOSSARYAbsolute humidityThe volume of water that air contains as generallymeasured in grams per kilogram of air.AbsorptionAccumulation of moisture, for example, by asubstance, which then changes chemically orphysically.AdsorptionAccumulation of moisture, for example, by asubstance, which does not change, eitherchemically or physically.AgHortAgriculture and Horticulture.CELdek®A product of specially impregnated cellulosefor evaporation and cooling of air.Cooling towerA facility for evaporative cooling of water.DehumidificationA division within Munters whose products arebased on dehumidification.DehumidifierEquipment for dehumidification of air.DesiCoolA technology for cooling air through acombination of dehumidification andevaporative cooling.Dew pointThe temperature to which air must be cooledfor the water vapor in the air to condense.Evaporative coolingCooling that occurs when a liquid, such aswater, evaporates.FGDFlue-gas desulfurization is a technologyapplied in coal-fired power plants to clean fluegases from sulfur emissions that cause socalledacid rain.GLASdek®A product of specially impregnated spun glassfor humidification and cooling of air.HumiCoolA division within Munters whose products arebased on evaporative cooling andhumidification.Leak detectionA search method which exploits changes inmoisture, temperature and sound waves thatleaks cause.Lithium chlorideA moisture absorbing substance that is usedin sorption rotors.MCS, Moisture Control ServicesA division within Munters focused on moisturetechnology services with an emphasis on therestoration of water and fire damages.Mist eliminatorA component for removing drops of liquidfrom a flow of gas.Mollier diagramA diagram that shows the correlation betweenabsolute humidity, relative humidity,temperature and energy.PowerPurgeNew patented technology to recover energyfrom the dehumidification process. Byreturning surplus heat from the dehumidificationrotor to the regenerated air andsimultaneously reducing the need for aftercooling of the process air, energy costs canbe reduced by up to 40%.RH, Relative HumidityExpresses the relationship between the watercontent of air at a given temperature and themaximum amount that the air can hold at thesame temperature.Silica GelA moisture-absorbing substance (silicondioxide) that is used in sorption rotors.Sorption rotorA rotor for dehumidification through sorption.The Humidity ExpertA concept for positioning Munters.VOCVolatile Organic Compounds.ZeolAn operation within Munters focused onadsorption of VOC from air with zeolites, asubstance that adsorbs VOC’s.DEFINITION OF FINANCIAL KEY FIGURESCapital employedTotal assets minus non-interest-bearingprovisions minus non-interest-bearing liabilities.Capital turnover rateNet sales divided by average capital employedcalculated on the opening and closingbalances for the last four quarters.Cash and cash equivalentsCash and bank balances plus currentinvestments with maturity periods notexceeding three months.Earnings per shareNet earnings divided by the weighted averagenumber of shares.EBIT marginEBIT divided by net sales.Equity per shareEquity (excluding minority interest) divided bythe number of shares outstanding on theclosing date.Equity ratioEquity (including minority) interest divided bytotal assets.Interest coverage ratioEarnings after financial items plus financialexpenses (excluding exchange-ratedifferences) divided by financial expenses(excluding exchange-rate differences).Net debtInterest-bearing liabilities plus defined-benefitcommitments to employees minus interestbearingassets minus cash and cashequivalents.Net debt/equity ratioNet debt divided by equity (including minorityinterests).Operating assetsIntangible assets excluding goodwill plustangible assets plus inventories etc. plusaccounts receivable.Operating capitalOperating assets minus operating liabilities.Operating cash flowCash flow from current operations andinvesting activities excluding acquisitions ofoperations and the sale of operatingsegments.Operating earningsOperating earnings corresponds to EBITexcluding goodwill impairments and surplusvalues depreciation.Operating liabilitiesAdvances from customers plus accountspayable.Operating marginOperating earnings divided by net sales.Operating working capitalInventories etc. plus accounts receivableminus advances from customers minusaccounts payable.P/E (price/earnings) ratioShare price on closing date divided byearnings per share.Return on capital employedEarnings after financial items plus financialexpenses (excluding exchange-ratedifferences) divided by average capitalemployed calculated on the opening andclosing balances the last four quarters.Return on operating capitalOperating earnings divided by the averageoperating capital using the past 12 months’opening and closing balances as a base.Return on equityNet earnings divided by average equitycalculated on the opening and closingbalances of the last four quarters. Minorityinterest is excluded from earnings as well asshareholders’ equity.M U N T E R S A N N U A L R E P O R T 2 0 0 6 67
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Annual Report 2006
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The year in briefOrder intake incre
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From everyday life to highsustainab
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Focus on product development and gr
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Munters develops a strategic plan f
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Carl Munters’ first sketch of a r
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PRODUCTS AND SERVICES CONTRIBUTING
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and a bonus program aimed at upper
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Many production processes require p
Page 19 and 20: “In many instances, Munters has t
Page 21 and 22: Facts - Dehumidification Division
Page 23 and 24: For insurance companies and constru
Page 25 and 26: “The development of framework agr
Page 27 and 28: Facts - Moisture Control Services (
Page 29 and 30: In Mist Elimination, we develop eff
Page 31 and 32: “The increasingly stringent envir
Page 33 and 34: Facts - HumiCool Division“ Our en
Page 35 and 36: Transaction exposureTransaction exp
Page 37 and 38: DividendFor the 2006 fi scal year,
Page 39 and 40: Work of the Board of DirectorsGener
Page 41 and 42: for implementing the guidelines to
Page 43 and 44: Pro forma 2GEOGRAPHIC REGIONS 2006
Page 45 and 46: 2006 2005 2004GEOGRAPHIC REGIONS Q4
Page 47 and 48: Income statementGroupParent Company
Page 49 and 50: Balance sheetGroupParent CompanyAmo
Page 51 and 52: Statement of the Group’s recognis
Page 53 and 54: Average rateYear-end rateCurrency C
Page 55 and 56: Borrowing costsBorrowing costs are
Page 57 and 58: NOTE 4 CONT.Dehumidification MCS Hu
Page 59 and 60: NOTE 9 Cont.GroupDeferred tax asset
Page 61 and 62: NOTE 15 PARTIciPATIONS IN ASSOCIATE
Page 63 and 64: NOTe 18 cont.Parent CompanySharecap
Page 65 and 66: NOTe 20 cont.Reported pension costs
Page 67 and 68: NOTE 27 REMUNERATION TO THE BOARD A
Page 69: Proposed distribution of earningsFu
Page 73 and 74: Group ManagementLARS ENGSTRÖMBorn
Page 75: = Production facilities, sales and
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Annual Report 2006 - Munters

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