Munters
Q2 report 2024
Klas Forsström, President and CEO
Katharina Fischer, GVP and CFO
Ann-Sofi Jönsson & Line Dovärn, Investor Relations

Strong second quarter – well positioned for future growth
Robust order intake
Order intake

Increased net sales

Announced orders*All–time high profitability

Order backlog

MSEK

15 00011,8346 000

Net Sales

MSEK

MSEK

Adj. EBITA

Adj. EBITA margin

800

17.8

6 000
600
10 000

4 000

3,536
5 000

2 000

18%
16%

673

3,791

4 000

20%

400

14%
12%
10%

2 000

200

0

0

8%
6%

0

0

Q2 Q3
2022

Q4

Q1

Q2 Q3
2023

Q4

Q1

Q2
2024

Q4

Q1

Q2 Q3
2023

Q4

Q1

Q2
2024

Q2 Q3
2022

Q4

Q1

Q2 Q3
2023

Q4

Q1

Q2 Order intake, +3% (-2% org)

Q2: Net sales, +7% (+2% org)

Adj. EBITA-margin, Q2 17.8%• AT - flat, mainly weaker battery in APAC

• AT – declined, primarily weaker battery
sub-segment in APAC

+ strong volume growth in DCT & FT

• DCT - flat, good level of smaller & midsized orders• FT - good growth, driven by Americas &EMEA
Q2: Order backlog, +6%• mainly large orders in DCT & AT, to bedelivered throughout 2025

2

Q2 Q3
2022

4%

• DCT – strong growth, successful execution
on deliveries• FT – grew strongly, primarily EMEA &AmericasBook-to-bill Q2: 0.93

AT = business area AirTech, DCT = Data Center Technologies, FT = FoodTech, BA = business areas*Large orders announced through press releases

Q2
2024

+ positive product mix and deliveries in AT+ strengthening effects from lean practices
and other efficiency improvements- accelerated investments in digitalizing,ways-of-working, our manufacturing
footprint and innovation across all BA

Americas & EMEA main drivers of growth
Regional share Q2
Order intake

Net sales

Order intake

Net sales

26%

60%

Net sales

14%

12%

62%

Americas - order intake

EMEA - order intake

APAC- order intake• AirTech – flat development, growth inCommercial & Components, offset bybattery & Service• AirTech – growth especially in the
Industrial segment• AirTech – weaker development, mainly
due to the battery market in China• DCT – strong underlying demand,
hyperscalers rely on colocation providers
to grow rapidly• DCT – steady growth• FoodTech – recovery in the market withstrong growth in the broiler segment• FoodTech – continued slight recovery
with good growth in the layer segment• FoodTech – good growth in CS, primarily
swine, dairy and layer segments. DS
continued to show strong growth326%

Order intake

All figures as reported, not currency adjusted.
OI: Order intake, NS: Net sales
CS - Climate solutions (equipment incl. controllers), DS – Digital solutions

Solid order backlog – large orders supportive into 2025
2022
MUSD 65
US car manufacturer
Climate control systems
MUSD 63
US colocatorStandard chilled water (CRAHs)
MUSD 176
US colocator
SyCool Split solutions
MUSD 54
Multinational car manufacturer
2 climate control system orders
MUSD 88
US colocatorStandard chilled water (CRAHs)
MUSD 137
US colocator
SyCool Split solutions
MUSD 65
US colocatorStandard chilled water (CRAHs)
Order received
Expected delivery period
4

2023

2024

2025

2026

AirTech

Strong underlying
long-term demand>5%

Order Intake flat mainly due to weak
battery market in APAC;

Customer segment• Industrial (excl. battery) good development in EMEA & Americas,
slightly offset by APAC

53%

…whereof battery

13%• Commercial – Americas strong, slightly offset by APAC

…whereof food processing

8%…whereof commercial

12%…whereof other19%• Components – strong growth in Americas, EMEA good whereas
APAC weaker, impacted by Chinese battery market• Service – decreased primarily due to lower demand in Americas

Order Backlog decreased
3,850

4 000

2 000

± 0 -1%

Clean Technologies

7%Service & components

39%…whereof service

22%…whereof components**

17%

1,760

0

5

Q222

Q322

1 Clean Technologies

Q422

Q123
Order Intake

Q223
Q323
Order Backlog

Q423

Q124

neg

% order intake Market
Q2 2024
Outlook *• Battery in Americas & APAC weak
• CT1- increased through acq. of Airprotech in EMEA

MSEK

Industrial~ 1-5 %Q224
* Market outlook and comments are indicative and refer to the coming six months** Dehumidification rotors and humidification pads sold through OEM channels

AirTechStrengthened margindevelopment
Q2
2023

Org.

Struct*FX

Order intake

1,760

1,726

-5

7

0

Order backlog

3,850

4,124

Net sales

1,938

2,088

-13

6

0

• CT– growth driven by acq. of Airprotech in EMEA

Adj. EBITA

341

346

-5

3

1

• Components – growth in Americas & EMEA driven by increased
sales of evaporative pads to the data center market

Adj. EBITA (%)

17.6

16.6

Net Sales decreased, primarily weaker
battery sub-segment in APAC;• Battery – growth in Americas, offset by weak EMEA & APAC

Adj. EBITA margin increased;++-

cont. efficiency improvements, slightly offset by lower
production utilization rate in EMEA & APAC
positive effect from product mix in Americas as deliveries on
major orders were finalized
increased investments in operational efficiency & innovation –foreseen to continue and increase

MSEK• Service – grew, driven by EMEA, other regions flat

2 500

20%

2 000

16%

1 500

12%

1 000

8%

500

4%

0

0%
Q222

Q322

Net sales* Acquisitions & divestments

.

Q422

Q123

Q223

Q323

LTM Adj. EBITA-margin

Q423

Q124

Q224

Adj. EBITA-margin

Adj. EBITA margin

MSEK• Industrial (excl. battery) – declined, weak Americas whereas
growth in food in EMEA & APAC

6Change (%)

Q2
2024

AirTech

Solid development in several segments
Development Q2 2022 - Q2 2024

Order intake per segment

MSEK
3 000

•

Battery - increased
competition and cont. delays ingreenfield investments, slow
down in all regions•

CT- stable development•

Other industrial – steadydevelopment•

Commercial – increase in Q42023 due to acquisition of Zeco•

Components - impacted bylower replacements in Chinese
battery market, good growthof evaporative pads to the DC
market•Service – solid development

2 500

2 000

1 500

1 000

500

0
Q2 20227

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

ServiceComponents

Commercial

Other Industrial

CT

Battery

Announced orders*

Net Sales*Large orders announced through press releases

Q2 2024Components – the foundation we build our business on

Desiccant wheel (rotor) removes
moisture, as much as 99.9%~40% of Component order intake
How we stay ahead:• constantly working with energy efficiency &material investigation• partnering to accelerate innovation• examining waste streams to enhance
circularity
8

Evaporative pads add moisture• historically used in many industrial &agricultural processes• increasingly popular in server halls & data
centers - requires extensive cooling andhumidity control~60% of Component order intake

Dehumidification crucial to maximize
operational lifespan of a wind park
Vestasoverview2018
is notjust Vestas
Dehumidification in–Vestas
wind farms
importantas highhumidity can significantly impact efficiency:

•
•
•
•

combats condensation and mold growth
prevents corrosion
reduces electrical malfunctions
Nacelle & Hub –maximizes uptime
dehumidification placed

inside, also used duringstorage & transportation

Tower – dehumidification
placed inside at thebottom, mainly off-shore
wind parks
9

Data Center Technologies

Underlying demand strong& increased order backlog>5%

Customersegment

Order Intake flat;•

good level of smaller and mid-sized order, driven by
the colocation market in Americas•

underlying demand remains strong

Order Backlog increased;•majority attributable to large orders to be delivered
throughout 2025

Hyperscaler~ 1-5 %

Order Intake
Q2 2024± 0 -1%neg

MarketOutlook *2%Co-locator98%

Telco &
enterprise

1%

8 000

MSEK

6903

• Hyperscalers –need massive amounts of server space and rely
on colocation providers to grow rapidly

6 000
4 000
2 000

1060

0
Q222

Q322

Q422

Q123

Order Intake

Q223

Q323

Order Backlog

Q423

Q124

Q224

• Colocation – continued strong demand due to increased build
outs and investments, driven by increased leasing demand fromhyperscalers• Telco & enterprises - moving away from own facilities, market
growth but lower pace10
* Market outlook and comments are indicative and refer to the coming six months

Data Center Technologies

Continued significant
profitability improvement
Q2
2023

Org.

Struct*

FX

-2

0

1

Net Sales strong growth;

Order intake

1,060

1,067

•

successful execution on deliveries of large orders

Order backlog

6,903

6,037

•

EMEA continues to show stable growth

Net sales

1,109

878

24

0

2

Adj. EBITA

243

133

80

0

3

Adj. EBITA (%)

21.9

15.2

Adj. EBITA margin significant improvement;+ strong volume growth+ positive product mix+ high capacity utilization‒

investments in new production site in Europe

MSEK+ good effect from lean practices

1 250

24%

1 000

20%
16%

750

12%
500

8%

250

4%

0

0%
Q222

Q322
Net sales* Acquisitions & divestments

11

Q422

Q123

Q223

Q323

LTM Adj. EBITA-margin

Q423

Q124

Q224

Adj. EBITA-margin

Adj. EBITA margin

MSEK

Change (%)

Q2
2024

Data Center Technologies

Broadening our offering for data
center cooling solutions
Acquisition of Italian Geoclima
•
•
•
•
•

Manufacturer of air- and water–cooled chillers - whichplays a critical role in the data center cooling market
today
Broadening cooling portfolio - enhancing our ability tooffer full cooling solutions
Expansion into new markets - several global sales
offices and production site in Italy
Net sales of ~MSEK 455 (MEUR 40.1) for FY 2023
Expected completion - second half of 2024

12
Geoclima’s ”Circlemiser” Chiller

Launch of Munters Coolant
Distribution Unit (CDU)
1st order for “single phase direct to chip cooling”•

developed through close collaboration with a customer andpartners•

equipment sold to facilitate heat rejection with either single or twophase direct to chip liquid cooling*

CDU units transfer heat from the server to a chiller,
where the heat is rejected•

this is done through a separate facility water loop

CDU units ensure efficient and reliable cooling:13•

distributes coolant, typically water, evenly throughout the entire
liquid cooling system•regulates the flow and temperature of the coolant•

required to manage higher IT densities from AI applications whileproviding increased energy efficiency*Single-phase liquid cooling stays liquid, while two-phase boils and condenses for even better heat transfer

Data Center Technologies

FoodTechConclusion reached in strategic review of
FoodTech equipment – increased focus on digital
FoodTech equipment

FoodTech Controllers,
Software, IoT & Sensors

In 2023, a strategic review of theEquipment business within FoodTech
was initiatedAmbition: become the global leader inconnecting and optimizing the supply chain
in the food and agriculture sector

Equipment sales within FoodTech
accounted for ~13% of Munters Groupnet sales in Q2 (LTM)
The conclusion of this review is ourintention to divest this business

Development of ARR* (MSEK)

+71%

133

145

166

Q4
2022

Q1
2023

Q2
2023

194

Q3
2023

226

244

284

Q4
2023

Q1
2024

Q2
2024

*ARR = Recurring Revenue in the quarter multiplied by four14

Continued expansion of our digital
portfolio
Acquisition of majority share in Automated Environments

15•

US-based company specializing in automated control systems for thelayer industry•

Expands FoodTech’s digital solutions portfolio, enhancing offerings
for food producers•

Positions us to provide advanced systems improving efficiency, animal
welfare, and sustainability in poultry operations•

Reported net sales of MSEK 102 (MUSD 9.8) for FY 2023•

Founded in the mid-1980s, based in Renville, Minnesota, USA, with 13
employees

FoodTechFoodTech

Increasing demand &order backlog>5%

Order Intake increased;

Customer segment•

CS – primarily driven by Americas & EMEA, offset
by weaker APAC

Climate Solutions (incl.
Controllers)•

DS – continued strong growth in Americas, mainly
broiler

Order Backlog increased~ 1-5 %

neg

± 0 -1%% order intake Market
Q2 2024 Outlook *90%…whereof Broiler

47%…whereof Swine12%…whereof Layer20%…whereof Greenhouse3%…whereof Dairy

4%…whereof Other

3%

Digital Solutions

10%

MSEK

1081

1000

741

750
500
250
0
Q222

Q322

Q422

Q123

Order Intake

16

Q223

Q323

Order Backlog

CS - Climate solutions (equipment incl. controllers), DS – Digital solutions

Q423

Q124

Q224
* Market outlook and comments are indicative and refer to the coming six months

n/aFoodTech

Strong margin increase &continued sales momentum
Q2
2023

Org.

Struct*FX

Order intake

741

646

9

6

0

Order backlog

1,081

992

CS – good growth in Americas & EMEA, offset byweaker APAC

Net sales

763

583

26

6

-1

DS – continued strong growth, mainly broiler
segment. SaaS ARR grew +71%

- of which SaaS

71

42

- SaaS ARR

284

166

Adj. EBITA

135

58

127

6

1

Adj. EBITA (%)

17.7

9.9

MSEK

•

Adj. EBITA margin increased significantly;+ strong net sales growth in both CS & DS
+ positive contributions from net price increases+ effects from operational excellence improvements

12%
MSEK

+ good profitability from DS driven by increased
software implementations and accelerating ARR

16%

600
400

8%

200

4%
0%

0
Q222

Q322
Net sales* Acquisitions & divestments

17

CS - Climate solutions (equipment incl. controllers), DS – Digital solutions

Q422

Q123

Q223

Q323

LTM Adj. EBITA-margin

Q423

Q124

Q224

Adj. EBITA-margin

Adj. EBITA margin

Net Sales grew strongly;•

Change (%)

Q2
2024

Launch of our most energy
efficient E-line fansE-line fans, engineered to deliver transformative cost
reductions & environmental benefits

18•

The motor runs on EC* technology•

Energy saving - up to 50% compared to similar fan with an AC motor*•

Precision ventilation - optimal efficiency by precisely adjusting speed
for optimal airflow for specific needs•

Connected maintenance - Bluetooth-enabled diagnostics for quick,proactive and easy troubleshooting•

Animal welfare - Lower speeds means less noise and dust, creating acalmer, healthier environment*EC = Electronically Communicated, where standard is AC = Alternating Current
e-line-br-en-202403.pdf (munters.com)

FoodTechService ambition in line withstrategic direction

Service & Components Q2 2024*% of net sales

8%

4%
25%

2%

11%

Service includes:• After-market service* in all business areas

AirTechservice• SaaS revenues in FoodTech

Components sales in AirTech

DCTservice

FoodTechserviceComponents

Total

Service & Components FY / LTM*
40%
19
30%

Munters ambition:
Service & Components>1/3 of Group net sales

Ambition: >1/3 of net sales

26%

20%

10%

0%
2019
19
*After-market service is defined as sales of spare parts, commissioning and installation, inspections
and audits, repairs and other billable service.

* of Group net sales,

2020

2021

2022

2023

Q2 LTM
2024

Advancement towards our strategic
sustainability targets
End June 2024 (2023)

E

Renewable electricity, factories

78%2

(81)

Electricity efficiency, factories 1

0.52(0.50)

Targets for
2030
Reduce CO2e emissions
Scope 1 & 2: Net zero
Scope 3: reduction in linewith the Paris agreement
1.5°C.

Gender Equity
S% of women in workforce

22%3

(23)

% of women leaders

22%3

(21)

30% women
leaders & inworkforce

Code of Conduct
G

20

Code of Conduct (CoC)

1 Electricity in relation to production output.

2 Excluding acquisitions of renewable electricity, factories, amounted to 80%.

3 Excluding acquisitions % of women in workforce amounted to 25% and women leaders to 23%

Munters has an Employee
CoC and Supplier CoC.
The Customer CoC isunder development.

Employee CoC 100%
Supplier CoC 100%
Customer CoC cont. improv.

Financial highlights

GroupIncreased profitability, strong cash flow &lower leverage
Q2
2023

Organic
growthStructural
growth*Currency
effects

Order intake

3,536

3,427

-2

5

0

Order backlog

11,834

11,153

Net sales

3,791

3,536

2

4

0

Operating profit(EBIT)

578

408

Adj. EBITA

673

479

37

3

1

Adj. EBITA-margin

17.8

13.5

Net income

342

257

Cash flow fromoperating activities

662

10

OWC/net sales (%)1

12.5

13.2

Net debt

4,447

4,833

Net debt/Adj.
EBITDA2

1.8

2.7• Net Sales increased; very strong growth in DCT & FT

• Adj. EBITA margin improved;
 increased strong net sales growth in DCT & FT,
positive effects from product mix and deliveries on
major orders finalized in AT operational excellence improvements• Improved cash flow;
 increase of operating earnings and positive
development of working capital• OWC/net sales: within our target range of 13-10%• Net debt decreased: increased cash flow from operating earnings
 even though accqusition of Airprotech finalized in thequarter
22

Change (%)

Q2
2024

MSEK

1 Average OWC (Operating Working Capital) last twelve months as % of net sales for the same period
2 Last twelve months* Acquisitions & divestments

Adjusted EBITA-margin

All-time high profitability – investments to capture
growth continue
Group adj. EBITA margin impact
Q2 2023
adj. EBITA %13.5

Volume+Product mix and net pricing+++

Operational excellence++

Strategic initiatives=

Q2 2024 adj. EBITA %

17.8

23

Main factors affecting adj. EBITA margin in Q2:• Strong volume increase driven by DCT & FT
• Product mix had a positive impact in AT & DCT
and net pricing increases contributed to margin
improvement mainly in FT• Positive effects from operational excellence andother efficiency improvements initiatives• Strategic initiatives for scalability in digitization
and automation continued

Cash flow

Improved cash-flow and strengthened
financial position
Cash flow from changes in WC

Group Cash Flow YTD, MSEK

388

-599

827

-391
225

24

Q2 2024

Q2 2023

Change in accounts receivable

52

-22

Change in inventory

-110

43

Change in accrued income

41

-295

Change in accounts payable-560

Change in advances from customers

124

-143

Change in other working capital70

37

CF from changes in working capital

172

-321

MSEK

200

PPE and intangibles investments in 2024:
0

investments aiming at strengthening competences,upgrades, digitalize & automize•

AirTech: Amesbury, new major plant in Americas•

DCT: Cork, new plant in Europe

Capital allocation priorities to drive growth
agenda – organic and M&A:
innovation and plan for CO2 reduction•

operational and commercial excellence•

M&A and minority investments•

dividends

Q3

Q4

Q1
CAPEX

Q2
2023

Q3

Q4

Q1

CAPEX % of net sales

800
600
400
200
0

Q2

2022

Q3

Q4

Q1

Intangibles, R12M

Q2

2023

Q3

Q4

PPE, R12M

Q1

Q2

2024

%-net sales, R12M

Operating working capital
15%

2000

14%

1500

13%

1000

12%

500

11%
10%

Q2

2022

Q3

Q4

Q1

Q2

Q3

Q4

Q1

2023
Operating working capital

OWC/net sales, R12M

Q2

2024

% of net sales

2500

0

25

6%
5%
4%
3%
2%
1%
0%

Q2
2024

CAPEX (R12M)

MSEK

•

Q2
2022

MSEK

•

7%
6%
5%
4%
3%
2%
1%
0%

%-net sales

400%-net sales

Investments supporting
next growth wave

CAPEX (quarterly)Delivery on M&A agenda to fuel growth
Structured process for M&A and integration with aligned workflows

Core /
consolidation

2023

2024

Acquisition, Tobo Component,
SwedenAcquisition, Geoclima,
Italy

Net sales: MSEK 76
Employees: 14

Net sales: MEUR 40.1
Employees: 165

Focus on value creating from day 1of integration:

Acquisition, ZECO, India

Acquisition, Airprotech,
Italy» Integration team

M&A categories in focus

Net sales: MSEK 510
Employees: ~1,000

Technology /DigitalMajority investment,
InoBram, Brazil
Net sales: MBRL 53
Employees: ~150

(Munters has acquired a 60% share in InoBram)

Services –String ofpearlsMajority investment,
Automated Environment,
US
Net sales: MSEK 102
Employees: 13» Synergy realization» People and culture» Operational processes

Example of synergy realization in Q2:

Net sales: MEUR 3
Employees: 17» Inobram contributed strongly to theimproved profitability in FoodTech throughsourcing synergies by being part of
Munters
Minority investment,
CAPSOL,
NorwayIn 2022, five minority investments were
made. In 2023, Munters participated inthree capital increases.

» Integration process focused on:

Minority investment,
Agriwebb,
Australia

Acquisition, SIFT, France

New growth
areas

26

Net sales: MSEK 330
Employees: 52

Decreased leverage ratio 4 quarters in a row

Leverage & net debt

Development of leverage & net debt
2.9

3.0

2.9

3,0
2.7

2.7

Leverage ratio decreased
•

1 000
2,5

2.2

-1 000

2,0

2.1
2.0

MSEK

1,8
1.8

1,0
-5 0000,5-7 0000,0Q2 2022

Q3 2022

Q4 2022 Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Cash & equivalents

Other

Lease liabilites

Interest bearing liabilities

Net debt / adj. EBITDAx, LTM

27

Net debt decreased:•

increased cash flow from operating
earnings•

acquisitions financed partly bydebt during the last 4 quarters acquisition of Airprotech finalized
in the quarter

1,5-3 000mainly driven by increased
operating earnings & lower net
debt

Summary

Financial targets

Progression towards our financial targets
Currency adj. growth*

OWC/net sales**Adj. EBITA margin
20%

40%

17.8%

12.5%

15%

15%

30%

Financial target range 13-10%
Financial target >14%

10%

10%

20%

5%
10%

Financial target >14%

7%

0%

0%

0%
Q2
2022

Q3

Q4

Q1

Q2
2023

Q3

Q4

Q1

Q2

Q2
2024

* Change in net sales compared to the previous period, adjusted for
currency translation effects

29

5%

2022

2023

2024

2022

Q3

Q4

Q1

Q2
2023

Q3

Q4

Q1

Q2
2024

**Average OWC (Operating Working Capital) last twelve months as% of net sales for the same period

Quarterly highlights

All-time highprofitability & strong
foundation for future
growthSolid underlying
market demand

Portfolio advancements;
Conclusion FoodTechequipment strategic
review
Growth through M&A

30
30

Updated strategic
sustainability targets
and SBTi commitment

Questions & Answers
Questions & Answers
Q2 report 2024

31

This presentation contains forward-looking statements that reflect Munters’current expectations on future events and Munters’ financial and operational
development. Although Munters believes that the expectations reflected insuch forward-looking statements are based on reasonable assumptions, noassurance can be given that such expectations prove to have been correct, as
forward-looking statements are subject to both known and unknown risks anduncertainties and a variety of factors that could cause actual results or
outcomes to differ materially from those expressed or implied by such forwardlooking statements. Such factors include, but are not limited to, changes in
economic, market, competitive and/or regulatory conditions. Forward-looking
statements speak only as of the date they were made and, other than as
required by applicable law, Munters undertakes no obligation to update any ofthem in light of new information arising or future events.