Annual Report 2006 - Munters

Munters develops a strategic plan for each business unit witha plan period of three years. The plans are revised annually. Anumber of strategic initiatives are established at the divisionlevel and specify the direction and focus for the business. Forthe upcoming three-year period, the three divisions will focuson the following areas:The Dehumidification Division will focus on continuedprofitable growth in commercial dehumidification operations,development of global product families based onmodular concepts and energy-efficient solutions, continuedgross margin improvements and growth in Asia.The MCS Division will focus on the growth opportunitiesthat consolidation within the insurance and damagerestoration industries will result in through national andregional contracts and professional Key Account Management,raising the profitability of its German operations,increased efficiency of operations through personneldevelopment and leadership, improved project managementand productivity, and global mobile IT solutions withautomated documentation.The HumiCool Division will focus on streamlining itscore operations, profitable growth through an expansion ofthe existing product offerings to achieve a higher share oftotal solutions, shared product development projects andstandardization of product programs and a global spread ofthe division’s product applications.Selected nichesMunters is a world leader in thermodynamics, an area inwhich technology can be applied in a large number of customerapplications. To prioritize among various niches, thefollowing criteria have been established:Energy-efficient or environmentally friendly solutions.Market potential exceeding SEK 500 M annually.Underlying growth.Relatively insensitive to economic cycles.Global customers.Opportunities for good margins.Low degree of tied-up capital.Potential for service operations.Market forces and trendsIncreased environmental awareness and the need for moreefficient energy utilization. Munters strives to provide customersthe opportunity to reduce their resource consumptionand impact on the environment. Compared with alternativesolutions, technology from Munters can result in lower energyconsumption and a reduction in wasted resources. Several ofthe Group’s products are used to reduce emissions of harmfulsubstances, such as sulfur dioxide and nitrogen oxide, whichcontribute to the greenhouse effect. Higher energy prices,combined with greater environmental awareness, increasedemand for environmentally friendly and energy-saving productsand production processes. Munters contributes to a betterenvironment, primarily through very energy-efficient climatecontrol solutions. Munters’ technology also helps to avoiddemolition and rebuilding by instead renovating and reusingdamaged materials.Demands for improved indoor air quality. Demandsfor energy savings are increasing. These are often achievedthrough tighter insulation and reduced ventilation. That mayin turn, however, result in problems with mold, moisture andallergies. Munters can reduce such problems in two differentways, through fixed installations that prevent problemsfrom occurring or through MCS services that can be quicklydeployed to handle affected environments.Higher demands for freshness and natural quality in foodproducts sector. Correct humidity prevents the growth ofbacteria and mold, reduces the risk of poisoning and extendsthe shelf life of food products. In addition, the products’freshness, taste and consistency are maintained. Munters hassolutions for all phases of the food industry, from productionand manufacturing to transport, storage and retail sales.Consolidation in the insurance industry. Water damageaccounts for a significant portion of insurance company costs.Using technology from Munters, construction material andinventory waste can be reduced. The Group is a technologyleader and its services are known for their high quality,broad geographic coverage and quick service, and are basedlargely on Munters’ dehumidifiers. With its broad geographiccoverage, Munters is an ideal partner for the increasinglylarge international insurance companies. The company offerslong-term national or regional cooperative agreements at fixedprice levels, solutions that customers in the insurance industryare increasingly seeking. Many insurance companies preferto work with just a few national or international suppliers.Munters is uniquely positioned to benefit from that trend. M U N T E R S A N N U A L R E P O R T 2 0 0 6