Agenda – platform for today and the future
CEO – Munters Towards Full Potential•

A strong company – but disappointing performance since IPO•

Global player in niche markets•

Full Potential Program to seize opportunities

Global Operations – Building a customer-oriented and scalable platform
AirTech – Sustainable solutions for demanding industrial applications
FoodTech – Sustainable solutions for demanding agricultural applications
CFO – Delivering the numbers
CEO wrap-up – Confident in our targets
1Attractive financial profile, but we have not met our financial targets
Strong Net Sales growthProfitability negatively impacted by DC

Consistent high cash generation

13%
8,000

800

CAGR = 13%

600
10%

10%

6,000

600

4,000

400

2,000

200

009%

9%

400

8%
2000-200

2014

2015

2016

2017

2018

Q1 2019
R122014Net Sales, mSEK

22015

2016

Adjusted EBITA, mSEK

2017

2018

Q1 2019
R12

Adjusted EBITA margin

2014

2015

2016

CF bef.ch. in WC, mSEK

•Strong Net Sales growth over period•High cash generation•

Lower profitability caused by DC lumpiness, production inefficiencies and customer mix

2017

2018

Q1 2019
R12

CF from WC, mSEKFinancial profile is better when excluding Data Centers – moderate
slower sales growth but firmer margin
Net Sales growth 2 p.p. lower without DCMargins 3 p.p. higher without DC (2018, Q1 2019)
14%
800

CAGR = 11%
6,000

600
4,000

2,00002014

2015

2016

2017

2018

Net Sales excl. DC, mSEK

•

312%

11%

Q1 2019
R12Label

12%12%Consistent high cash generation
600
400

9%

400

200

200002014

2015

2016

Adjusted EBITA excl. DC, mSEK

2017

2018

Q1 2019
R12-2002014

Adjusted EBITA margin excl. DC

Large projects in DC EMEA with poor profitability and poor NWC profile, impacting
overall Munters performance

2015

2016

CF bef.ch. in WC, mSEK

20172018

Q1 2019
R12CF from WC, mSEKServices is a high margin activity, with large potential to be captured
Service Net Sales 2014-2019
mSEK%

850

11,8800

11,6750

11,4
11,2700

11,0650

10,8600

10,6550

10,4500

10,2450

10,0400

9,83509,63009,49,22509,02008,81508,6Service NS / Group NS

1902R121901R121812R121811R121810R121809R121808R121807R121806R121805R121804R121803R121802R121801R121712R121711R121710R121709R121708R121707R121706R121705R121704R121703R121702R121701R121612R121611R121610R121609R121608R121607R121606R121605R121604R121603R121602R121601R121512R121511R121510R121509R121508R121507R121506R121505R121504R121503R121502R128,01501R1201412R128,21411R128,4501410R12100

Service Net Sales, mSEK4••High growth of 17%
CAGR between 20142018:•

Consistent growth•Resilient to Munters
lumpiness

Large potential still tobe captured in service
contract:•Large installed base•Still low penetration
rateFull potential program (FPP) - full impact expected in 2020
Program

Total program impact

2019 adj. EBITA impact 2020 adj. EBITA impact– equals ongoing
annual run-rate

mSEK +105mSEK +210

One-time costs

Cash pay-back timemSEK -350 costs

Approx.
2 years(60% during H1 and 40%
during H2 2019)

Timing and ultimate cost of program may vary from current estimates based on final timetable and subject to information and consultation with therelevant employee representative bodies.

5Key costs / structure and early encouraging signs from FPP
Full Potential Program brings OH down
39%
2,800

36%

35%

2%

62%

1,600

3%

1,20014%

037%
35%

3%

2,000

400

37%
3%

2,400

800

37%

13%

8%

12%

13%

8%

7%

15%

14%

2017

2018

8%

9%

13%
2014

•OH cost increases mainly driven
by Services, China and R&D•

FPP will generate Run-ratesavings of 160 mSEK

12%

13%

13%

2015

2016

Manufacturing OH costs, mSEK

Selling OH costs, mSEK

Admin OH costs, mSEK

R&D OH costs, mSEK

Q1 2019 R12OH costs / net sales (%)

Q1 2019 R12 (FPP)

Considerations to improve gross profit and EBITA
Gross margin flat since IPO

2500

33%34%

Adjusted EBITA down since IPO

35%
32%

32%

32%

10%

9%

600

9%

8%

1500
400
1000
2005002014

2015

2016

Gross profit, mSEK

7

Low performance mainly driven by DC,
but improvement potential across theGroup•

Different initiatives under implementationin order to improve gross margin andEBITA:

800
10%

20000•
13%

2017

2018

Gross margin

Q1 2019
R1202014

2015

2016

Adjusted EBITA, mSEK2017

2018

Q1 2019
R12Adjusted EBITA margin•Pricing initiatives•Capture of service potential•

Procurement and Cost Outprogrammes•

Operations stability•Scalability

Currency exposure largely naturally hedged
Currency Transaction exposure (2018)
3.0%
2.0%

1.0%
2.0%
2.0%

2.0%
3.0%

5,0%

1,0%
1,0%

1,0%
1,0%
1,0%

1.0%
3.0%

2.0%
2.0%

5,0%

7,0%
2.0%

12,0%

9,0%

28,0%

34,0%

38,0%

34,0%

Percentage of Revenue (%)

8

Currency Sensitivity Table

Percentage of Cost (%)

USD

CNY

SEKGBP

KRW

THB

EUR

DKKJPYBRL

AUD

SGD

Other`

Estimated effect on EBITSEK +10% compared withmSEK%

USD-54.0-11%CNY-27.6-6%

DKK-28.1-6%KRW-6.5-1%THB-5.0-1%AUD-4.9-1%SGD-1.50%

CAD-1.00%

TRY-2.30%

CZK

3.11%

ILS

6.81%

MXN

8.62%

EUR

28.16%

Other currencies-3.3-1%

Sum-87.7-18%• Good balance between sales andexpenses in the various currencies(natural hedges)• Minimal hedging of transaction
exposure applied• Currency exposures occur in USD,
EUR and CNY• Significant net exposures arehedged• Operating exposure in USD andEUR is mainly hedge throughGroup financing arrangements

Very strong cash flow dynamics
Increased focus on reducing NWC

High cash generation

16.1%

15.3%

1200

600

15.7%

15.2%

Munters is CapEx light, low CapEx levels in FPP
15.7%

13.7%

160

1000

400

140

800
200

80400

60
40200-2002014

2015

2016

2017

CF bef.ch. in WC, mSEK

912060002018

Q1 2019
R12

CF from WC, mSEK

0180202014

2015

2016

Operating WC, mSEK•

Growth in DC and China as increased NWC•FPP focus on reducing NWC

2017

2018

OWC / net sales

Q1 2019
R1202014

2015

2016

Depr, tangibles, mSEK

2017

2018

CapEx, tangibles, mSEKCapital structure allocations priorities
Current capital structure, mSEK
853

1 080
638
1 480

2 843

4 218

3 720

AssetsEquity and Liabilities

Goodwill
Other Intangible Assets
Tangile Assets
Operating Working Capital
EquityNet Debt
Other Working Capital Items

Facility`

US Term Loan

EUR multicurrency RCF

Commitment

250 000 000 USD

185 000 000 EUR

n.a.

19 MEUR (from 1st of April to 31st of Dec 2019)

3m US Libor

3m EURIBOR (floor at 0%)250230n.a.

35 % of applicable margin on RCF facility on unutilized
amountTemporary increase of commitment
Base rate
Current margin (bps)Commitment Fee (%)
Covenant – Net debt Leverage ratio
10Net Debt / LTM Adjusted EBITDA

Key priorities for Capital Allocation
1.

Achieve strong balance sheet –deleverage

2.

Organic growth and cash flow tofund investments in the business

3.

Reinstate dividend as FCF grows

4.

Disciplined and selective M&A

Financial targets
Growth5%“Munters’ objective is to achieve an annual organic revenue growth of 5%,supplemented by selective acquisitions”

EBITA
margin14%“Munters’ mid-term target is to have an adjusted EBITA margin of 14%”

Capitalstructure

1.5-2.5x“Munters’ target is to maintain a ratio of net debt to adjusted EBITDA of 1.52.5x, and may temporarily exceed this level e.g. as a result of acquisitions”

30-50%“Munters aims to pay an annual dividend corresponding to 30-50% of the net
profit for the period. The pay-out decision will be based on the Company’s
financial position, investment needs, acquisitions and liquidity position”Dividendpolicy

11Agenda – platform for today and the future
CEO – Munters Towards Full Potential•

A strong company – but disappointing performance since IPO•

Global player in niche markets•

Full Potential Program to seize opportunities

Global Operations – Building a customer-oriented and scalable platform
AirTech – Sustainable solutions for demanding industrial applications
FoodTech – Sustainable solutions for demanding agricultural applications
CFO – Delivering the numbers
CEO wrap-up – Confident in our targets
12

We are confident we can deliver on our financial targets•We operate in attractive markets driven by strong
sustainability oriented global trends•

We pursue leading positions in selected market segments•

13

We have a plan to turn around the company short-term with
the Full Potential Program – and a strategy for longterm profitable growth

Net Sales growth of 5%
Adjusted EBITA Margin of 14% mid-term
Net Debt/adjusted EBITDA ratio of 1.5-2.5
Dividends of 30-50% of Net Income

Questions & Answers

14