As the operating arm of the ORGU foundation, INTEGRA Holding Ltd. pursues the
goals of the foundation while taking an active and farsighted approach to enhancing
the value of the INTEGRA Group.
We are very pleased at the INTEGRA Group's performance
during this fiscal year – the best ever in its recent history and less than
one year after the lowest point of a major global financial and economic crisis. The
INTEGRA Group is not alone, since many firms took advantage of the crisis to reorganize
and streamline their operations for the days ahead.
In spite of widespread record results, euphoric celebration is perhaps premature. As a
result of the globalization facilitated by modern information and communication technologies,
companies face diverse factors with hidden risks that are hard to influence.
Such globalization allows us to enter new regions and markets, with which we have no
natural affinity, and thereby achieve new growth, source new suppliers, and get new
technologies. The equivalent rise in opportunities is accompanied by risks possessing
their own characteristics, which cannot be directly influenced. Such a combination
makes it ever more imperative to continuously adapt the company to the given circumstances.
Company management thus faces increasing pressure, requiring it to
maintain a critical eye on long-term strategic planning during the reorganization. Any
shortage of vigilance or hesitation could quickly lead to critical situations or allow
opportunities to slip away.
Whereas worldwide networks are growing, local events like a volcanic eruption in
Iceland have been shown to have a global impact. The volcanic ash cloud that spread
across Europe paralyzed air traffic, leaving its mark across much of the globe. A variety
of firms thus had to temporarily shut down production, because the inability to use air
transport interrupted logistics operations and prevented suppliers from delivering critical
components. Luckily, this was a short-term event. The impact of natural catastrophes
is different, as in the case of the earthquake in Haiti, or the severe flooding in
Pakistan that inundated an area equal to the size of Switzerland, Austria, and Belgium
combined. Such events can completely reshape an entire region for a long time; even
today it is hard to predict when Pakistan and Haiti will fully recover from the aftermath
of these disasters. The international society and businesses are simply unable to cope
with such catastrophes. Insurance statistics released by major companies indicate that
the frequency of such events has been rising in recent years. Hence, it is simply a matter
of time before such events take on global economic importance.
In addition to factors beyond the control of humans, we also face political developments
that are equally tough to anticipate and/or control. Evidence of this was seen as
major distortions in the money and capital markets: the resulting drop in the Euro and
US Dollar and the ongoing strength of the Swiss Franc were anything other than
beneficial for the Swiss economy. Not only did our products become more expensive
in the target export countries, they also became more expensive than products from
our competitors based in the US or other parts of Europe. One cannot assume that this
is a relatively short-term phenomenon, because Europe and the US are not likely to be
interested in strengthening their currencies in the near term. A weak currency boosts a recovering economy and eases the ability to erode the crushing debt load through
inflation. Therefore, we should anticipate greater challenges down the road.
Thanks to the reorganization we undertook before the global financial and economic
crisis in preparation for the future, we achieved record results in FY2010. Our consolidated
operating revenues rose by 13% to CHF 137,0 million and EBIT shot up by 77%
to CHF 19,6 million. All our subsidiaries, except INTEGRA India, contributed towards
these results, with major performances delivered by the Aquametro and INTEGRA
Biosciences groups. These two firms boosted their operating revenues with above
average growth rates of 15% and 30% respectively, achieved almost entirely through
export growth. At the same time, although SIGNAL Ltd. is barely active abroad, it also
raised its operating revenue by 5%. The INTEGRA Biosciences Group managed to even
beat our high expectations – less than a year after merging with VIAFLO.
INTEGRA India was the only disappointment, since this subsidiary was unable to
sustain its past good performance and thus missed our ambitious targets. The rise in
operating revenues was below-average and we were forced to take quick action to
stave off operating losses. Despite the setback, we continue to be optimistic about
the potential for growth in this country. We closed the lengthy negotiations by
year-end or a majority stake in Schlafhorst Engineering India Ltd. This will provide us
significant strategic land and production reserves in this emerging region of business
opportunity.
I am confident that we are well-positioned for the future, but we will certainly have to
face new and unanticipated challenges that will arise in the coming years. We must
therefore constantly keep moving ahead. Our employees are the foundation of our
healthy growth and, hence, I would like to thank each one of you for the contributions
you made every day.
Adrian Oehler
CEO
INTEGRA Holding Ltd.
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