Annual Report 2011
Positive overall turnover
In the second year after the economic and financial crisis, MIWE succeeded in increasing its overall turnover again in the 2011 business year. Accordingly, the overall turnover increased by 4.3% to € 90.6 million compared with the previous year. As in 2010, this increase was export-driven once again, with exports accounting for 54% of external sales (47% in the previous year). Domestic growth came from the baking station sector.

In the export sector, it has proven essential to focus on markets with growth and development potential. This concentration, which was started in 2011 based on detailed country analyses and market studies, is starting to bear fruit. In the medium and long-term it will have an even stronger effect, both through higher turnover in the growth markets we identified and cost streamlining. The Asia-Pacific region also reported positive figures for the 2011 business year. The significant increase in incoming orders was due to the enhanced sales activities initiated from headquarters, combined with the reorganisation of our sales structure in Korea. After the natural disaster in March 2011, the Japanese market has remained pleasantly stable for MIWE. As forecast by our long-standing representative, all existing orders were purchased and the incoming orders for 2011 were at a good level and in accordance with the budget.

Speaking of markets with development potential, we must mention Kazakhstan in particular. In 2011, a major order was secured in the bakery processing plants sector (plant engineering) worth approx. € 1,465,000, including two MIWE thermo-rollomat thermal oil-heated continuous ovens. We believe that this development potential in Kazakhstan will be in company sizes with a production output of approx. 1 t/h in multi-shift operation in particular.

Once again, the Russian Federation, Austria, Poland were stable sales markets for MIWE in 2011, as were the Netherlands, where we are back on track after two weaker years. However, given the downturn in the economy's performance in the fourth quarter of 2011, it remains to be seen whether this positive trend stabilises in 2012.

Internationalisation
We have continued build on the development work begun in Canada in 2009 (year our subsidiary MIWE Canada Inc. was founded) and 2010. In Ben Garisto (joined MIWE on 1 January 2011), we managed to attract a salesman with experience in the capital goods sector to serve as managing director. With a particular focus on the rack oven and in-store oven sectors, the results in Canada far exceeded the forecast, with an overshoot of +75%. As a result, the Canadian MIWE subsidiary reports a profit for 2011.

The same applies for the MIWE subsidiaries in the USA, Russia, France and Switzerland. Only MIWE Italy, with its home country already in recession, was unable to reach the targets set for 2011, not reaching its forecast turnover and net income. The positive development (see also the 2010 Management Report) of establishing an office in Iran was stopped abruptly due to the political development there and the resulting complete withdrawal of banks from Iran. While orders from 2011 with a total order value of approx. € 1.5 million will still be processed, we have had to reduce our forecast for 2012 from approx € 2 million to 0.

MIWE energy division – Custom solution concepts
Before a specific recovery or integrated energy system, i.e. an individual solution concept optimally tailored for the company in question, can be proposed or developed, the expert consultants from the MIWE energy division deals with potential customers' most pressing questions.

These questions include the following: How does my company compare with the industry average in terms of energy consumption and CO2 balance? How can my bakehouse/production facility recover energy, and at which scale? Which consumers can be supplied with the energy recovered? In a nutshell: How worthwhile is an investment in an integrated energy system? The holistic MIWE energy concepts can answer all of these questions.

The customised MIWE solution concepts are based on energy-saving production technology, clever energy recovery, and, where appropriate, intelligently combined heat and power and alternative energies (renewable energy sources and alternative fuels).

In 2011, the MIWE energy division range of products was also supplemented with a full series of piping and control technology, in addition to the actual recovery systems eco:nova and eco:box. This greatly minimises the relatively complicated interface management with the installation units at the customer's premises.

The development activities in the absorption cooling technology area (waste heat given off from the oven systems is converted to cooling energy via an absorption process) benefited from increasing cooperation with strategic partners.

MIWE synchro – Optimising processes
High-performance products and services at market-friendly prices – this can only be achieved if we avoid all kinds of waste in our processes and our organisation at all levels. Adding value without wasting time, space, materials – i.e. all resources available – that is the key goal of MIWE synchro.

Its aim is to organise and coordinate all work steps optimally along the entire value chain (from consultation to customer orders and the operation phase). That is why it is called "synchro" – it requires perfect synchronisation of processes and sub-processes to reduce cycle times, and increase quality and flexibility. MIWE synchro is a continuous process which helps us focus on the things that are really important for company success.

MIWE Service - Service concepts
Ensuring maximum availability of the MIWE products throughout the entire use phase and, if necessary, after it (recycling, for example) is one of the main responsibilities of MIWE Service. Rapid availability (response time), smooth processing of all services including the supply of spare parts – that is how our customers measure our performance.

In order to meet these goals and deal with this challenge, vocational training and continuing professional development play an important role for MIWE Service. For example, in the 2011 business year all of the department's employees were qualified as service specialists. MIWE Mobile Service – Gone are the days of inconvenient paperwork and illegible assembly reports.

By November 2011, MIWE's technical field staff were gradually equipped with laptops with a direct Internet connection to our central SAP system. Assembly and service reports are written directly on-site in electronic forms after work is completed. The advantages of this system include a reduction in the risk of errors, faster cycle times and timely accounting. In addition to this, the MIWE specialist installers always have the most up to date information, as Mobile Service gives them access to the latest data.

Market/market-segment specific service concepts are becoming increasingly important. We have entered into a cooperation with a strong service provider in England, guaranteeing nationwide service for MIWE baking stations and in-store ovens. We have already implemented a similar concept successfully in Spain, and negotiations are underway with potential cooperation partners/service providers in France and Italy with the aim of starting the cooperation in 2012 after training and working in the partners.

Investments
In the 2011 business year, MIWE made investments financed exclusively from internal funds totalling k€ 1,437. In addition to replacement investments for the fleet totalling k€ 311, investments were made in particular in technical equipment and machines/operating resources, to a total of k€ 891, including the down payments already made in the previous year. With the additional installation of fire alarms in the manufacturing area, MIWE made investments both in the occupational safety of its employees and as a precaution to prevent operational downtime/production stoppages to a total of k€ 196.

In the 2011 reporting year, MIWE leased vehicles for the first time. That reduced the investment total in the fleet sector significantly compared with previous years. The company plans to compare/evaluate leasing with direct investments as an alternative in future, and use it where applicable.

Continuing professional development
In the 2011 reporting period, as in the previous years, specific advanced training and continuing professional development measures were offered at all levels in the company. In accordance with one of MIWE's guiding principles "Promoting employees – we invest in our employees", the entire top-level management team took part in and completed a leadership training course entitled "Strengthening the performance culture".

All 103 service employees (in-house and field staff) took part in a development programme for service specialists, enhancing their qualifications in service/customer orientation. Eight employees from the production department took part in a training course on "synchronised production systems". Many other employees successfully completed their personal continuing professional development and training courses with financial assistance from MIWE. Their qualifications include technical management, mechanical engineering technicians, electrical engineers, human resource experts, industrial foremen and business administrators. Two employees won the Master's award for their exceptional work.

In addition to this, a talent pool for junior executives was introduced in 2011. This is primarily intended to support deserving employees from within the company, i.e. to develop trainee managers.

MIWE positions itself as an attractive employer that sets high standards in employee selection and development!

Research & Development
R&D activities focused on redesigning the MIWE in-store ovens in accordance with lean production principles, focusing on synchronised, waste-free line production. A modular structure was developed consistently, for example in a joint project by R&D and Manufacturing. The use of identical parts plus a clear optimisation of final assembly of the products in a synchronised flow/line manufacturing result in savings on manufacturing costs and a significantly shorter cycle time, i.e. a competitive advantage based on shorter delivery times.

In summary, customers benefit from the new generation of in-store convection oven MIWE 2.0, as explained above, through shorter throughput/delivery times and the use of the second generation of the proven MIWE Touch Screen control unit (MIWE-TC). The IPS display used here offers the best viewing angles and most vibrant colours available on the market and is also based on a future-proof hardware and software platform, which also facilitates advanced applications, e.g. connection to the MIWE Remote Service system.
The most far-reaching improvement is a roughly 10% reduction in energy consumption.

As the electrically heated general purpose oven MIWE condo was switched to a synchronised flow/line production (this production line was commissioned in full on 1/4/2011), this MIWE product family benefited from the above-mentioned optimisations through reduced manufacturing costs and faster throughput/delivery times.

Fundamental research was performed in plant engineering primarily as part of final theses completed and supervised at MIWE. Among other things, they included flow optimisation on the heat exchanger of the MIWE roll-in and regulation of the baking atmosphere in the MIWE continuous ovens. For these industrial large-scale ovens, the MIWE air circulation turbulence device – activated optionally at different intensities via specific baking zones – has proven itself perfectly in practice, as demonstrated with significantly improved baking results for certain products such as e.g. tin products (bread for toasting). An automatic, hydraulic belt tensioner with a monitoring system adds increased operational reliability.

With the stand-alone MIWE thermo-static rounds out the product family of the thermal oil-heated MIWE trolley oven. This is a model variant with integrated thermal oil heating. The complex infrastructure otherwise required for thermal oil-heated ovens (pipelines, insulation, brackets), right up to a separate central heating boiler, is not necessary! This is particularly interesting, i.e. economical, for stand-alone installation of an oven system of this kind or when replacing old ovens with another heating type/heat transfer.

In the MIWE bakery cooling sector, integrated systems with intelligent control units reduce the power required by the refrigeration machines and optimise the investment and operating costs accordingly.

Across all divisions, a new organisation form was introduced for R&D, which accelerates the processing/throughput time of development projects in close cooperation with quality management. This product development process (PDP – a regulated, formalised procedure in which innovation ideas are discussed and evaluated at a management level. This is primarily to determine whether the respective innovation idea fits the strategic orientation of the company, how great the market opportunities are, the growth potential can be achieved with it, whether it differentiates MIWE from the competition and the difficulty involved in technical implementation or whether it is actually possible to implement it technically) includes the full project cycle from the idea to readiness for mass production and supports simultaneous product and process development.

Organisational matters and outlook
Effective from 1 January 2011, the divisions were reorganised as decided in 2010. The starting point for this was a clear and concentrated focus on the growth markets we identified (see also Point 3. Sales). The new MIWE organisational structure is based on two independent divisions, which each serve clearly defined target markets with dedicated products and services.

The BS division concentrates on the baking station market, i.e. on the situation in stores, irrespective of who actually operates the oven and regardless of whether they serve supply purposes or catering functions at the point of sales.

Expert consulting and top quality service is the mission of both divisions.

The BA division focuses on the baked goods producer market, irrespective of whether they work on a craft, batch or line basis. In these market segments, our customers expect increasingly holistic approaches and solutions, including oven systems, baking refrigeration, energy efficiency and transport/loading systems. Accordingly, since 1 January 2011, the MIWE energy and MIWE baking refrigeration divisions, previously autonomous, have been integrated in the new BA division. Of course, both divisions will remain together under the umbrella of the MIWE brand.

A decision was made by shareholder resolution to close MIWE-Bräunlingen GmbH at the Bräunlingen location, which has been a wholly owned subsidiary of MIWE since 2008. Its entire core range of products (focusing on automatic proofing systems and transport/conveyor technology) will be integrated in the MIWE plant engineering centre of expertise in Arnstein. The products/systems will in future be managed, developed and produced centrally from Arnstein. Optimisation of all production processes at MIWE's main location in Arnstein created the scope and requirements necessary for this. We believe that this transfer will give us a variety of synergy effects.