Munters second quarter 2017
Continued strong growth in the quarter driven by Data Centers and Air Treatment but withsome growing pains

Creating the Perfect Climate in Customers’Mission Critical Applications

Munters facilitates approx. 45% of
lithium-ion battery production in theworld

Approx. 1/5 of all electricity cleaned
with Munters equipment

Food in approx. 1/7 of all meals
DC cooling consumes almost 1% ofgrown in installations where Munters global electricity
provides climate control

Munters Delivers
Energy Efficiency

2

Cost Efficiency

Productivity

Production
Reliability

Product Quality

Regulatory
ComplianceQ2 2017 – Highlights• Q2 order intake growth +32%

Q2SEKm2017

2016



Order backlog

2 449

2 025+21%

Order intake

2 234

1 688+32%Net sales

1 723

1 438+20%

Operating profit

143

150-4%

Adj. EBITA

190

194-3%

11,0%

13,5%

Net income

1111-1

Cash flow from operating
activities

86

1967

Adj. EBITA margin

3• Robust order intake growth in core end-markets:• Air Treatment sub-segments Industrial, Components and Commercial• Data Centers air economizer market• Continued strong Group net sales growth of +20% driven byData Centers and Air Treatment• Adj. EBITA of SEKm 190 (194) impacted by low factory utilization
in Data Centers and weak markets in AgHort and Mist
Elimination

Q2 2017 – Order intake and net sales bridge• Organic order intake growth of 25%• Organic net sales growth of 12%

Q2

 Jan-Jun

Q2 Jan-Jun

2017

2 234

3 888

2017

1 723

3 242

2016

1 688

3 305

2016

1 438

2 657

Change546 +32

583 +18

Change285 +20585 +22

Organic growth*

420 +25370 +11

Organic growth*

172 +12390 +15

Currency effects

88+5156+5

Currency effects73+5133+5Structural effects

38+257+2Structural effects

40+362+2Order intake, SEKm4* As of Q2 2017 new definition of organic growth where organic growth excludes currency effects.

Net sales, SEKm



Munters Business Areas

Air Treatment
5Data Centers

AgHortMist Elimination

Business Areas
Net sales per business area and LTM (SEKm)

ME
422
6%

AirT
3 52753%

AGH
1 787
27%
DC
962
14%

6

Adjusted EBITA per business area and LTM (SEKm)

ME496%
AirT
48457%

AGH
23027%
DC8010%Q2 2017 – Bridge order intake, SEKm
• Order intake growth +32% of which 25% organic driven by DataCenters and Air Treatment

2 5004012 0001 688

428-202 234114• Strong order intake in Air Treatment sub-segments Industrial,Commercial and Components

1 500
1 000
5000Q2
2016

7AirT• Two large Data Center orders during the quarter, SEKm 275 inthe US and SEKm 232 in Europe

DCAGH

MEElim.

Q22017

Q2 2017 – Bridge net sales, SEKm
• Net sales growth +20% of which 12% organic
1 800
1 600
1 400

1 43811111338121 703• Service net sales increased by 11% in the quarter

1 200
1 000
8006004002000Q22016

8• High growth in Data Center air economizer market and Air
Treatment sub-segments Industrial, Commercial andComponents

AirTDCAGHMEElim.

Q22017

Q2 2017 – Bridge Adjusted EBITA, SEKm
• Adjusted EBITA growth in Air Treatment• Adjusted EBITA impacted by low factory utilization in Data
Centers as well as from low volumes in AgHort and Mist
Elimination

250
200

194

6-1-9Q2
2016

AirTDCAGH-98190

MEOtherQ22017

150
100
5009

First six months 2017 – summary• Order intake increased by 18% of which 11% organically

SEKmOrder backlog
Order intake
Net sales
Operating profit (EBIT)
EBITA
Adjusted EBITA
Adjusted EBITA margin, %Net income
Cash flow from operating
activities

10Jan-Jun

LTM

Full year

2017

2016

Jul-Jun

2016

2 449
3 888
3 242
218
326
337
10-30

2 025
3 305
2 657
223
314
314
12-17

2 449
6 956
6 625
572

1 741
6 373
6 040
577

803
1272

781
1385

66

73

270

277

• Net sales increased by 22% of which 15% organically• Adjusted EBITA increased by 7% to SEKm 337 (314),
corresponding to an adjusted EBITA margin of 10.4% (11.8)

A perfect climate forimmunity

11Q2 2017 – Air Treatment• Strong order intake and net sales in Q2 with growth of 12% and14% respectively with key sub-segments Industrial, Commercialand Components all showing robust growth• High demand and orders in lithium-ion battery production, food,
pharmaceutical and supermarkets• Adjusted EBITA margin decreased by 1.0 percentage point,
mainly due to production inefficiencies in Mexico and lessfavorable project mix

12Q2Jan-JunSEKm

2017 2016  2017 2016

External order backlog

1 171 1 067

Order intake
1 037
Net sales
931
Operating profit (EBIT)
173
Adjusted EBITA
123
Adjusted EBITA margin, % 13,2923
820
114
117
14,2

10 1 171 1 067
12 1 987 1 698
14 1 724 1 491
52 267 173
5 213 178
12,4 11,9

A perfect climate forsocial media13

Q2 2017 - Data Centers• Order intake increased by 256% including a SEKm 275 order in
the US and a SEKm 232 order in Europe• Net sales increased by 131% with deliveries to digital customers in
the US and co-location customer in Europe• Weaker performance on margins and adjusted EBITA due to low
factory utilization in the US and Europe and continued investmentsin the business. The negative profit impact of the low utilization
during Q2 is estimated to SEKm 20-25• Due to lumpy nature and phasing of Data Center business, low
factory utilization in Q3 expected and earnings at the same level asin Q2. Q4 still expected to be a strong quarter
14Q2Jan-Jun

SEKm

2017 2016  2017 2016

External order backlog
Order intake
Net sales
Operating profit (EBIT)
Adjusted EBITA
Adjusted EBITA margin, %643 455 41558 157 256200
86 131-14 -13 -12-13 -12 -9-6,6 -14,1643
723
453
1819
4,2455477
176-6-5-2,8A perfect climate forbreakfast15

Q2 2017 - AgHort• Order intake and net sales increased by 8% supported bypositive currency effects and acquisitions of MTech Systems andEdataSEKm

2017 2016  2017 2016

• Demand impacted by lower investment levels in the industry,
mainly in the Poultry sub-segment. Strong demand in the Swine
sub-segment in China while the Broiler sub-segment showed
moderate growth in the US and Europe

External order backlog
Order intakeNet sales

490561502

375
52046331 4908 1 0318 905

375947824• Adjusted EBITA margins lower due to investments in the IoToffering and growth initiatives in China

Operating profit (EBIT)75

85-11100128

Adjusted EBITA
Adjusted EBITA margin, %78
15,68818,9-11

107
11,8

134
16,316

Q2Jan-JunA perfect climate forpower17

Q2 2017 - Mist Elimination• Order intake increased by 8% driven by structural effects• Net sales increased by 1% with structural effects of +6%. Growth
impacted by continued weak demand for replacement projects in
Coal FGD in the US• Lower adjusted EBITA and adjusted EBITA margin due to fewer
high margin FGD projects in mainly the US

18Q2Jan-JunSEKm2017 2016  2017 2016

External order backlog
Order intake
Net sales
Operating profit (EBIT)
Adjusted EBITA
Adjusted EBITA margin, %

145
111
107
887,9129
103
106
1718
16,4

138
1-55-52

145
212
200
1415
7,4

129
206
215
35
35
16,4

Q2 2017 – Cash flow
• Cash flow from operating activities increased to SEKm 86 (19)
• Decreased working capital of SEKm 23 (-87)• CapEx of SEKm -32 (-37) and in line with plan19

H1 2017 acquisitions• Mtech Systems: February 1, 2017
• AgHort software systems• Reinforces Munters´ capabilities in software and IoT• Purchase price of SEKm 222 (60% of shares with option
to purchase remaining 40%)
• Net sales of SEKm 140 (FY 2016)• Kevin Enterprises: April 1, 2017
• Mist Elimination• Establishes presence in India• Reinforces Munters´capabilities within the process industry• Purchase price of SEKm 76• Net sales of SEKm 65 (FY 2016)• Edata: May 30, 2017
• AgHort software systems• Software for food processing plants, primarily poultry• Net sales of SEKm 15 in 201620

Q2 2017 - Summary• Strong underlying order intake and net sales driven by highdemand in focus areas• Adjusted EBITA impacted by low factory utilization caused byproject phasing in Data Centers as well as lower volumes inAgHort and Mist Elimination• Due to the lumpy nature and phasing of the Data Center
business we foresee continued low factory utilization in Q3 andearnings at the same level as Q2. Q4 is still expected to be astrong quarter for Munters with large deliveries of won orders in
US and Europe• Munters addressed end-markets are expected to deliver resilient
growth over the coming years and we are well positioned21

Munters in short

22~3,500 employees

Sales in ~180 countries

19 plants
11 countries

Over 275 patents andpatent applications

Net sales SEKm 6,625
Adj. EBITA margin 12,1%

60+ years

23