Munters
Q4 report 2023
Klas Forsström, President and CEO
Katharina Fischer, GVP and CFO
Ann-Sofi Jönsson & Line Dovärn, Investor Relations

Strengthened market position and strong results
Stable long-term growth trends
Order intake

Announced orders*

Strong net sales growthOrder backlog

MSEK

15 000

6 000

Robust improvement in profitability
Net sales

MSEK

MSEK

Adj. EBITA

Adj. EBITA margin
16%

600

6 000

5,651
11,33310 000

4 000

467
3,659

4 000

400

14%

12.8% 12%
10%

5 000

2 000

200

2 000

8%
6%

0

0

Q4 Q1
2021

Q2 Q3
2022

Q4

Q1

Q2 Q3
2023

Q4

Q4 Order intake, +82% (org)• driven by major orders in DCT• cont. shift in customer demand towards
smaller orders with shorter lead times
Q4: Order backlog, -16%
• mainly large orders in DCT & AT, to bedelivered throughout 2025

0

0

Q4 Q1
2021

Q2 Q3
2022

Q2 Q3
2023

Q4

Q4
2021

Q1

Q2

Q3
2022

Q4

Q1

Q2 Q3
2023

Q4

Adj. EBITA-margin, Q4 12.8%• mainly driven by DCT• increased net sales in DCT• FT all regions contribute to increase• AT flat• efficiency improvements in all businessareas

Book-to-bill Q4: 1.5• contributions from net price adjustments

FY: Net sales, +27% (org)Book-to-bill FY: 1.4

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

Q1

Q4: Net sales, +16% (org)FY: Order intake, -21% (org)

2

Q4

4%

FY: Adj. EBITA-margin, 13.2%

Americas main driver of growth
Regional share Q4
Order intake

Net sales

Order intake
18%

74%

Net sales

7%
25%

17%

59%

Americas - order intake(FY – OI:61%, NS: 57%)

EMEA - order intake(FY – OI: 23%, NS: 24%)

APAC- order intake(FY – OI: 15%, NS: 19%)

• AirTech – weaker development, orderpattern shift as orders placed closer todelivery time. Components good growth• AirTech – stable market, orders placed
closer to delivery time. Service good
growth.

• AirTech – weaker development, cont.
consolidation of the battery market in
China• DCT – active market, combination of large
orders and smaller orders received fromcolocators and hyperscalers• DCT – good development, several smallorders from colocators• FoodTech – slight recovery• FoodTech – slight growth in CS, primarily
swine & layer. DS stable development excl.
large order received last year1

3

Order intake

Net sales

All figures as reported, not currency adjusted.
OI: Order intake, NS: Net sales
CS - Climate solutions (equipment incl. controllers), DS – Digital solutions
1• FoodTech – recovery in all segments,
especially within broiler & controllers

In Q4 2022 a large Software-as-a-Service (SaaS) contract with one of North America’s largest poultry producers with a value of app. MSEK 46 was announced

Solid order backlog – large orders supportive into 2025
2022
MUSD 115
US colocator
SyCool Split solutions
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)
4

Order received
Expected delivery period

2023

2024

2025

AirTechStable long-term growth trends
Order Intake decreased -31% org.;>5%• excl. large order of MSEK 560 received in Q4 2022, decrease -8%org.
• Battery – weaker in all regions. APAC - cont. consolidation ofbattery market in China. EMEA & Americas - customers orderingcloser to delivery• Commercial –increased as a consequence of the Zeco integration• CT1- declined due to delays in customer investment decisions• Components – flat, weak battery market in China also affectedcomponent replacements. Good growth in Americas• Service – growth EMEA, offset by Americas & APAC

Order Backlog decreased

MSEK

4 000

3,250

2 000

1,922

Customer segment
Industrial~ 1-5 %

± 0 -1%% order intake Market
Q4 2023
Outlook *55%…whereof battery

10%…whereof food processing

7%…whereof commercial***19%…whereof other19%

Clean Technologies

5%Service & components

40%…whereof service

25%…whereof components**

15%

0
Q421

5

Q122

1 Clean Technologies

Q222

Q322
Order Intake

Q422
Q123
Order Backlog

Q223

Q323

neg

Q423

* Market outlook and comments are indicative and refer to the coming six months** Dehumidification rotors and humidification pads sold through OEM channels*** Increase related to the integration of Zeco

AirTech

Changed business mix affecting margin
Net Sales flat org. with growth mainly in
Americas;• Battery – strong growth Americas, weaker APAC & EMEA

Change (%)

Q4
2023

Q4
2022

Org.

Struct*

FX

FY
2023

FY
2023

-31

4

0

6,796

8,399

3,250

4,698

8,226

6,830

MSEK

• CT– stable APAC & EMEA, weaker Americas

Order intake

1,922

2,642

• Components – stable Americas & EMEA, weaker APAC

Order backlog

3,250

4,698

Net sales

2,136

2,013

Adj. EBITA

305

329

1,278

1,014

Adj. EBITA (%)

14.3

16.3

15.5

14.8

• Service – weak development, growth mainly APAC & EMEA

Adj. EBITA margin decreased;
Changed business mix, smaller share components & service+

cont. efficiency improvements, slightly offset by lower
production utilization rate in EMEA & APAC

5

1

2 500
16%

2 000

12%

MSEK

1 500

8%

1 000

4%

500
0

0%
Q421

Q122

Net sales* Acquisitions & divestments

6

Q222

Q322

Q422

Q123

LTM Adj. EBITA-margin

Q223

Q323

Q423

Adj. EBITA-margin

Adj. EBITA margin-

0

AirTechStable market activity in several segments
Order intake per segment

MSEK
3 000

2 500

•

Variations in large ordersi.e., batteries•

Other industrial & CT
steady development•

Service & components
stable and growing•

Secure future orders &ramp up production
capacity

2 000

1 500

1 000

500

0
Q1 20227

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

ServiceComponents

Food Processing

Commercial

CT

Battery

Announced orders*

Net Sales*Large orders announced through press releases

Q3 2023

Q4 2023

Other Industrial

New innovative dehumidification system inNorth America
Specially developed for low dew point (LPD)
applications such as battery producers• Ability to maintain dry rooms at continuous low
dew points• 40% smaller footprint vs. industry standard• Available for indoor and outdoor installation• Gas, steam or electric reactivation as standard• Combined pre- and post-heating and coolingcoils for compact design and minimized footprint• Standardized cost-effective design• Optimized purge cycle provides 30-45% energy
savings vs. industry standard purge

8

The outerframe for thedoor is 72”(1.82m)AirTechData Center Technologies

Significantly increased demand
Customersegment

Order Intake increased significantly;•

two large orders of appr. BSEK 2.2 received in thequarter•

several orders received from colocator & hyperscaler
customers•

good development in Europe, i.e. for Muntersevaporative air handlers

Hyperscaler

Order Backlog increased;•majority attributable to large orders to be delivered
throughout 2025
8 000

MSEK

~ 1-5 %

order intake
Q4 2023± 0 -1%neg

MarketOutlook *22%

Colocator

77%

Telco &
enterprise1%• Hyperscalers – increased activity both for own facilities &colocation leasing. AI driving significant growth, increased needfor server space & higher density cooling requirements

6 000
4 000

• Colocation – continued strong demand due to increased build
outs and investments, driven by increased leasing demand fromhyperscalers

2 000
0
Q421

Q122

Q222

Q322

Order Intake

9

>5%

Q422

Q123

Order Backlog

Q223

Q323

Q423

• Telco & enterprises - moving away from own facilities, market
growing but at a lower pace
* Market outlook and comments are indicative and refer to thecoming six months

Data Center Technologies

Good deliveries on large orders
Net Sales strong increase 81% org;
•
•

MSEK

Change (%)

Q4
2023

Q4
2022

Org.

Struct*

FX

FY
2023

FY
2022

n.m.

n.m.

n.m.

4,948

6,245

7,206

5,937

3,408

1,401

Good execution on large projects & increased
deliveries, proceeding according to plan

Order intake

3,184

30

Order backlog

7,206

5,937

production ramp-up in Europe ongoing, SyCool split
planned to be available for sale in 2024

Net sales

925

500

Adj. EBITA

144

36

519

84

Adj. EBITA (%)

15.6

7.1

15.2

6.0

Adj. EBITA margin significant increase;

81

-

4

+ strong volume growth+ high utilization rate in production
investments in competence and resources expected
to increase to capture growth

750
12%
500

8%

250

4%

0

0%
Q421

Q122

Q222

Net sales* Acquisitions & divestments

10

Q322

Q422

Q123

LTM Adj. EBITA-margin

Q223

Q323

Q423

Adj. EBITA-margin

Adj. EBITA margin

16%

MSEK

‒

1000

Data Center Technologies

First order won to pair our heat rejection
technology with liquid cooled servers•

Joint R&D development with large colocation
customer•An air cooled computer room air handler (CRAH)
can be exchanged with the LCE (liquid coolingevaporator) and paired with a SyCool condenser
to match the customers need to be able toaccommodate liquid cooled servers when required•

Instead of rejecting heat from the air in the data
center hall the water being used to cool theservers will be run through the LCE and theevaporator will reject heat in the LCE

11

Data Center Technologies

Hyperscaler order for MCW received
Munters Modular Chilled Wall (MCW)• DCT secured several orders for multiple American
hyperscale deployments of a chilled water fan arrays• This product consists of fans and chilled water coilsarranged into modular sections and connected tochilled water infrastructure to reject heat from thecustomers data hall.
• The arrangement optimizes the use of building spaceand provides flexibility for all types of density
deployments• Units to be delivered during 2025

12

FoodTech

Recovery in EMEA driving growth>5%

Order Intake increased +12% org.;•

CS – driven by recovery in EMEA. Americas slightincrease, slight recovery in APAC•

DS – stable excl. large order received last year•

FY - positive development in all regions, primarily
Americas

Order Backlog increased

Customer segment
Climate Solutions (incl.
Controllers)~ 1-5 %

neg

± 0 -1%% order intake Market
Q4 2023
Outlook *80%…whereof Broiler

41%…whereof Swine11%…whereof Layer

17%…whereof Greenhouse4%…whereof Dairy

5%…whereof Other

3%

Digital Solutions

20%

MSEK
1000
877
750
555
500
250
0
Q421

Q122

Q222

Q322

Order Intake

13

Q422

Q123

Q223

Order Backlog

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

Q323

Q423
* Market outlook and comments are indicative and refer to the coming six months

n/aFoodTech

All regions contribute to significant
margin improvement
Net Sales increased +16% org.;

MSEK

Change (%)

Q4
2023

Q4
2022

Org.

Struct*

FX

FY
2023

FY
2022

12

4

-1

2,433

2,242

877

828

2,363

2,211

•

contributions from all regions•

Order intake

555

483

CS – Americas strong, improvement in EMEA &stable APAC

Order backlog

877

828

Net sales

617

514

- of which SaaS

56

33

183

119

- SaaS ARR

226

133

226

133

Adj. EBITA

60

4

222

128

Adj. EBITA (%)

9.7

0.7

9.4

5.8

DS - SaaS ARR grew +69%•

FY - flat, primarily in Americas offset by weak
APAC & EMEA during first part of 2023

Adj. EBITA margin increased significantly;

600

MSEK

+ effects from operational excellence improvements‒ cont. high investments in DS

-1

16%

+ increased net sales and net price increases+ increased share of ARR in DS

6

12%

400

8%

200

4%

0

0%
Q421

Q122
Net sales* Acquisitions & divestments

14

Q222

Q322

Q422

Q123

LTM Adj. EBITA-margin

Q223

Q323

Q423

Adj. EBITA-margin

Adj. EBITA margin•

16

Strengthening the
FoodTech portfolio
HPAI (highly pathogen avian influenza)••

Airborne virus which severely impacts the poultry
industry, which can be transported > 20 km
A seasonal threat to individual poultry farms years
ago, but today widespread in all regions of theworld

Munters innovative AirProTec••

Air handling units, which filter the fresh air andprevents airborne pathogens from entering a farm
through the ventilation system
Developed to fit existing buildings without having
to make changes to construction

Sales to major global poultry breeder
•
•
•
15

We are working together with one of the world’s
largest broiler companies to find a solution for highlevel of ammonia concentration in their farms
In 2023 we delivered a first solution to thecustomer, combing biosecurity and heat recovery
More units to be delivered to the poultry breedingcompany in 2024

FoodTech
FoodTechFoodTech

Successful SaaS growth

Our ARR continues to grow significantly with amix of new customers and conversions to our
new software solution Amino

ARR* (mSEK)+69%

In Q1 2022 Munters (through MTech)announced an important SaaS contract with
one of the world’s largest food producers.
Value of the contact MUSD 19
Implementation proceeding as planned
together with the customer and will becompleted in 2024
Part of the contract was installed in sites
during 2023, remaining sites will be installed
during the year

133

145

Q4 2022

Q1 2023

166

Q2 2023

194

Q3 2023

Software ARR = Recurring Revenue in the quarter multiplied by four

16

*ARR = Annual Reoccurring Revenue

226

Q42023

Advancement towards oursustainability goals
End of December 2023
Scope
1&2

Health &SafetyRenewable electricity, factories

80% (72)

Energy efficiency, factories*

0.52 (0.62)

Recycling rate (LTM)

55% (52)

TRIR** (LTM)% of women in workforce

Diversity17

1.2 (1.8)

22%*** (21)% of women in salary-setting positions 21%*** (22)* Electricity in relation to production output,**Total Recordable Incident rate***The results for 2023 were negatively affected by acquisitions as well as adjustments due to the harmonizationof the definition of salary-setting manager during the year, in connection with the introduction of a global HCM system.

Goal
Net zeroemissionsby 2030

Zero
accidents

30%
women
leaders by2025

Financial highlights

Group

Closing the year with strong results• Net Sales increased;

Change (%)

Q4
2023

Q4
2022

Organic
growthStructural
growth*Currency
effects

FY
2023

FY
2022

Order intake

5,651

3,143

82

4

-7

14,116

16,830Order backlog

11,333

11,463

11,333

11,463

Net sales

3,659

3,011

13,93010,386

Operating profit(EBIT)

375

255

1,586

881

Adj. EBITA

467

304

1,839

1,070

Adj. EBITA-margin

12.8

10.1

13.2

10.3

Net income

58

131

792

577

 Mainly due to acquisitions and increased working
capital in the last 12 months, financed partly by debt

Cash flow fromoperating activities

670

427

1,066

772

• Closing 2023 with very strong net sales,
stable order backlog, improved
profitability & cash flow, as well as lower
leverage

OWC/net sales (%)1

14.2

12.7

14.2

12.7

Net debt

4,620

3,825

4,620

3,825

2.1

2.9

2.1

2.9

 Very strong growth in DCT• Adj. EBITA margin improved; net sales increase in DCT, efficiency improvement
efforts in all business areas• Improved cash flow;
 Stronger earnings & positive effects from changes inworking capital• Net debt increased;

MSEK

Net debt/Adj.
EBITDA2

16

47

4

7

1

-

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

19* Acquisitions & divestments

Adjusted EBITA-margin

Strong margin improvement in FoodTech & DCT
Group adj. EBITA margin impact
Q4 2022
adj. EBITA %10.1

Volume++Net pricing++

Operational excellence+

Strategic initiatives=

Q4 2023 adj. EBITA %

12.8

20

Main factors affecting adj. EBITA margin in Q4:• Strong volume increase driven mainly by DCT• Net pricing increases contributed to margin
improvement• Operational excellence improvement in all
business areas• Strategic initiatives for scalability in digitization
and automation continued

Cash flow

Cash flow from operating activities
improved in the quarter
Group Cash Flow YTD, MSEK billion

444
281

Cash flow from changes in WC

405

Q4 2023

Q4 2022

Change in accounts receivable

149

-484

Change in inventory

188

-252

Change in accrued income

11-3

Change in accounts payable

111

364

Change in advances from customers

-126

403

Change in other working capital

56

159

CF from changes in working capital

389

189

• Positive impact on cash flow from reduction ofworking capital in fourth quarter

21

PPE & Intangibles

Investments for growth

800

6%

MSEK

Investments in PPE and Intangibles tosupport growth

4%
3%

400

2%

• 2023:• Smaller investments aiming at upgrade,
digitalize and automize• 2024, main investments:• AirTech: Amesbury, new major plant in
Americas as well as upgrade ofmanufacturing facility in China• DCT: Expansion in Europe

2500

15%

Increased level of operating working capital

2000

14%

• Strong growth in Data Center Technologies

1500

13%

1000

12%

500

11%

200

1%
0%

0
Q4

Q1

Q2

2021

Q3

Q4

Q1

2022

PPE, R12M

Q2

Q3

Q4

2023

Intangibles, R12M%-net sales, R12M

MSEK

Operating working capital & Net Sales

10%

0

Q4
22

2021

Q1

Q2

Q3

2022

Q4

Q1

Operating working capital
OWC/net sales, R12M

Q2

Q3

2023

Q4

% of net sales• Battery sub-segment in AirTech with large
projects%-net sales

5%

600

Integration critical to create value
Integration - critical aspect of mergers, with three focus areas:•••

Value creation - delivering on acquisition business case
People and culture - creating a common culture and sense of belonging
Operational processes - establishing common processes and tools (how we work together)

Acquisitions

Facts

Net sales: MSEK 510
Employees: ~1,000

Valuecreation

2023

Net sales: MSEK 76
Employees: 14

Net sales: MEUR 3
Employees: 17

Net sales: MBRL 53
Employees: ~150
(Munters has acquired a 60%
share in InoBram)

Enabler:
Operational
processes

2022

Enabler:
People &Culture23

Net sales: MSEK 125
Employees: 30

Net sales: MEUR 17
Employees: ~150

Year 1
Execution of
integration plan

Year 2
Follow-up

Year 3
Follow-up

Leverage & net debt

Decreased leverage ratio
Development of leverage & net debt
2 000

3,0

1 000
2,5
0

MSEK

• Net debt increase due to:

2.1
2,0

-1 000-2 0001,5-3 0001,0-4 0000,5-5 000-6 0000,0Q4 2021

Q1 2022

Q2 2022

Q3 2022

Q2 2023

Q3 2023

Q4 2023

Cash & equivalents

Other

Lease liabilites

Interest bearing liabilities

Net debt / adj. EBITDAx, LTM

24

Q4 2022 Q1 2023

• Leverage ratio decreased mainly
driven by increased adj. EBITA.
 acquisitions financed partly by debt
during the last 4 quarters
 increased lease liabilities related to newfactories
 offset by increased cash flow fromoperating earnings

 Financial net more negative in
2023 due to higher interest
rates and increased debt

Summary

Financial targets

Progression towards our financial targets
Net sales growth*

OWC/net sales**Adj. EBITA margin
15%

40%

14,2%

15%
Financial target >14%

10%

10%
20%

16%
5%

5%
10%

Financial target 10%

0%

0%

0%
Q4
2021

Q1

Q2

Q3

Q4

Q1

2022

* Organic growth p.a. over a business cycle

26

Financial target range 13-10%

12,8%

30%

Q2

Q3
2023

Q4

Q4
2021

2022

2023

Q1
2021

Q2

Q3

Q4
2022

Q1

Q2

Q3

Q4

2023

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

Achievements in 2023 positions us for continued
successful journey

In recent years Identified the right
growth areas
27

Invested and achieved
profitable growth

Continue to invest for
future growth
opportunities

Questions & Answers
Q4 report 2023

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.