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Editorial

INTEGRA Holding Ltd. is an investment company. The ORGU foundation based in Sarnen in the Swiss Canton of Obwalden holds at least 80% of its stock capital. The primary charter of the foundation is to:

● Ensure the independence of INTEGRA Holding Ltd., and
● Reinvest profits into innovative companies.


Supervisory board of INTEGRA Holding Ltd. at INTEGRA Engineering India Ltd.

 

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.

 

The Annual Report 2010
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