Q3 2023
Strong net sales growth andprofitability improvement
Net salesorganic growth

July-September– Order intake declined in business areas AirTech and Data Center Technologies (DCT), with a gooddevelopment in business area FoodTech.
– Net sales increased +28% organically, mainly driven by a very strong growth in DCT and the battery subsegment in AirTech. FoodTech had a strong development in the US, in both Climate and Digital solutions,
offset by a weak development in EMEA and APAC.

+28%– The adj. EBITA margin showed strong improvement mainly related to increased net sales in AirTech and
DCT, net price increases, as well as efficiency improvements in all business areas.
– Earnings per share increased by +47% driven by the strong net sales and improved profitability.

Adj. EBITA margin– Cash flow from operating activities improved both compared to Q3 last year and Q2 this year mainly
because of improved earnings and a reduction in operating working capital.

14.1%

Events after the close of the period– On 16 October the acquisition of the Indian manufacturer of air treatment solutions, ZECO was finalised.

Q3

Financial summary

Jan-Sep

MSEK
Order intake
Net sales
Growthof which organic growthof which acquisitions and divestmentsof which currency effects
Operating profit (EBIT)

2023
2,494
3,560
35%
28%
3%
4%
454

2022
6,354
2,644
42%
22%
3%
18%
271

Operating margin

12.8

10.3

Adjusted EBITA

503

293

14.1

11.1

264
1.42
1.42
554
13.7%
4,399
2.2

178
0.97
0.97
266
13.1%
3,654
3.0

Adjusted EBITA margin, %Net income
Earnings per share before dilution, SEK
Earnings per share after dilution, SEK
Cash flow from operating activities
OWC/Net Sales
Net debt
Net debt/Adjusted EBITDA, LTM

Interim report January-September 2023

∆%
-61
35

LTM

68

2023
8,465
10,271
39%
31%
2%
7%
1,211

11.8

8.5

72

1,371

766

13.3

10.4

734
4.00
4.00
396
13.7%
4,399
2.2

446
2.47
2.47
345
13.1%
3,654
3.0

48

2022
13,688
7,375
39%
21%
4%
14%
626

∆% Oct-Sep-38
11,60839
13,281
41%
94
1,466
79
65

Full-year
2022
16,83010,386
41%
23%
15%
4%
881

11.0

8.5

1,675

1,070

12.6

10.3

865
4.71
4.71
823
13.7%
4,399
2.2

577
3.18
3.17
772
12.7%
3,825
2.9

Operating working
capital/net sales

13.7%

1

CEO comments
Strong net sales growth and margin contributions from all business areas
As a summary of our achievements in the third quarter I would firstly like to highlight the strong net sales
growth, driven by very good execution on large orders in Data Center Technologies as well as a gooddevelopment in the battery sub-segment in AirTech. FoodTech had a very strong net sales development in
the US driven both by Climate and Digital solutions, whereas APAC and EMEA continued to be weak.
Secondly, I am happy to see that through good contributions from all business areas we reached ourfinancial target for adjusted EBITA-margin of 14% in the quarter. Thirdly, through great efforts throughout
the organization we generated strong operating cash flow reducing net debt to adjusted EBITDA to 2.2x.
We continued to expand our market presence through the acquisition of ZECO, an Indian manufacturer of
air treatment solutions. ZECO constitutes an important step in developing our dehumidification business inIndia and positions us to grow with market leading products and complete solution sales.
Stable long-term growth trends and good market activity
The underlying long-term growth drivers for our main markets are strong and we have seen continued goodmarket activity in the quarter. In the short-term customers are placing orders closer to delivery, ie lead times
are shortening, partly driven by the more unstable macroenvironment.
Market activity in Airtech’s end markets was good, but order intake lower than last year mainly as the orderintake did not comprise of any larger orders in the quarter compared to last year when we received a larger
order for a battery production facility of MUSD 65. In Asia, the development in China was weak mainly due
to a continued consolidation of the battery market.
Data Center Technologies continued to see a very strong demand in North Americas, however, did notreceive any large orders in the quarter. Last year in the same period two large orders were received with a
combined value of MUSD 239. They had a good development in Europe, for example with an order for the
product Oasis, that has enjoyed a good position in the US market since several years.
Order intake in FoodTech was positive with strong development in both Climate- and Digital solutions in the
US. The strong growth journey in Digital solutions is continuing and our SaaS business grew above 50 per
cent. A slight recovery of the markets in APAC and EMEA led to a stable order intake in these regions.
Focus on customer success through sustainable solutions
Our adjusted EBITA grew more than 70% and the EBITA-margin improved compared to the third quarterlast year in all business areas. The improvement is a result of the good volume increase, continued goodpricing management, our continuous improvement initiatives as well as well-executed projects that led tohigh utilization of our production.

Klas Forsström
President and CEO“We deliver strong net
sales, good margins anda reduction ofleverage. ”

Operating cash flow was positive in the quarter mainly because of reduced working capital levels fromsolutions being delivered to customers in Data Center Technologies.
AirTech announced the first implementation of a virtually moisture- and carbon-free process air system in a
production facility, in partnership with GreenCap solutions. The technology will improve the quality andlifetime of customers’ products, thereby making them more sustainable.
Our employees are the core of our business. In recent times with increasing geopolitical instability, we are
now focusing even more on safety first for all our employees. I want to thank all employees for their hard
work in making our journey a success.

Midterm financial targets

Sustainability targets*

Net sales growth:

Annual organic growth of net sales of 10%
Performance Q3 2023: 28% (22)

Renewable
electricity1:

80% by 2026 , eventually 100%,
Performance Q3 2023: 80% (71)

Adjusted EBITA
margin:An adjusted EBITA margin above 14%.
Performance Q3 2023: 14.1% (11.1)

TRIR2:

Eliminate accidents in production
Performance Q3 2023: 1.2 (1.6)

OWC/net sales:

Average (LTM) operating working capital in therange of 13-10 % of net sales.
Performance Q3 2023: 13.7% (13.1)

Women in
workforce:

30% by 2025
Performance Q3 2023: 24% (22)Dividend policy:

Munters aim to pay an annual dividend
corresponding to 30-50% of its consolidated
income after tax for the period.

Womenleaders:

30% by 2025
Performance Q3 2023: 21% (22)

For 2022 a dividend of SEK 0.95 (30% of income
after tax) was paid in the second quarter, totaling
MSEK 173.

Service share:

Service share 30% of net sales in the long term
Performance Q3 2023, LTM: 13.4% (15.2)

See Munters Annual and Sustainability report (ASR) 2022, pages 48-80, forfurther information on goals and outcome or at www.munters.com. For fulldescription of the dividend policy, see the ASR 2022, page 9 or at
www.munters.com.

Interim report January-September 2023

* Last 12 months
1

In production plants

Total Recordable Incident Rate (number of accidents where theemployee had to seek medical assistance multiplied by
200,000/number of hours worked)
22

Financial performance
Q3
MSEK
Order intake
AirTechDCT
FoodTech
Corporate & elim.
Net sales
AirTechDCT
FoodTech
Corporate & elim.
Adjusted EBITA
AirTechDCT
FoodTech
Corporate & elim.
Adjusted EBITA margin, %AirTechDCT
FoodTech

2023
2,494
1,463
404
651
-24
3,560
1,978
953
650
-21
503
305
160
80
-42
14.1
15.4
16.8
12.4

Quarterly order intake(MSEK)

Jan-Sep
2022
6,354
2,453
3,406
507
-11
2,644
1,684
378
594
-12
293
242
24
53
-26
11.1
14.4
6.4
8.8

∆%
-61
-40
-88
28
35
17
152
10
72
26
560
53
-

2023
8,465
4,875
1,764
1,878
-50
10,271
6,090
2,483
1,745
-48
1,371
974
375
162
-140
13.3
16.0
15.1
9.3

2022
13,688
5,757
6,216
1,759
-44
7,375
4,817
901
1,697
-40
766
684
48
124
-91
10.4
14.2
5.3
7.3

LTM Full-year∆% Oct-Sep-38
11,608
-15
7,517
-72
1,793
7
2,360
-62
39
13,281
26
8,103
176
2,983
3
2,259
-64
79
1,675
42
1,303
679
411
31
166
-205
12.6
16.1
13.8
7.4

2022
16,830
8,399
6,245
2,242
-56
10,386
6,830
1,401
2,211
-56
1,070
1,014
84
128
-156
10.3
14.8
6.0
5.8

Order intake
July-September 2023
Order intake amounted to MSEK 2,494 (6,354), (organic development of -64%, structural +1%, currency effects+2%), with good growth in FoodTech while the two other business areas experienced lower growth than lastyear. In the short-term customers are placing orders closer to delivery, partly driven by the more unstable
macroenvironment. In the long-term underlying growth drivers for our main markets remain strong.
Market activity in Airtech’s end markets was good, however order intake was lower than last year mainly as theorder intake did not comprise of any larger orders in the quarter compared to last year. DCT continued to see
strong demand in North Americas, however, did not receive any large orders in the quarter. Last year in the same
period two large orders were received with a combined value of MUSD 239. Order intake in FoodTech was
positive with strong development in both Climate- and Digital solutions in the US. A slight recovery of themarkets in APAC and EMEA led to a stable order intake in these regions.

8,000

20,0006,000

15,0004,000

10,000

2,000

5,000

0

0
Q3
21

Q1

Q3
22
Quarter

Q1

Q3
23
LTM

Order intake per Business Area
Q3, 2023 (MSEK)

0%
AirTech 58%

50%
DCT 16%

100%
FoodTech 25%

Order intake per region
Q3, 2023 (MSEK)

0%
Americas 52%

50%
EMEA 31%100%
APAC 17%

Quarterly net sales,(MSEK)
4,000

16,0003,000

12,000

2,000

8,000

1,000

4,000

For more information on the order intake, see the business area comments on pages 6, 7 and 8.

January-September 2023
Order intake during the first nine months of the year amounted to MSEK 8,465 (13,688), (organic development of-43%, structural +1%, currency effects +3%).
The order backlog at the end of the period amounted to MSEK 10,025 compared to MSEK 11,866 in the third
quarter 2022, corresponding to a -16% decrease. The majority of the backlog is attributable to large orders
received in DCT and AirTech during 2022 to be delivered throughout 2025.

00
Q3 Q4 Q1 Q2Q3 Q4 Q1 Q2Q321
22
23
QuarterLTM

Net sales
July-September 2023
Net sales grew to MSEK 3,560 (2,644) (organic growth +28%, structural +3%, currency effects +4%). Growth was
mainly driven by good execution on large orders in DCT as well as a good development in the battery subsegment in AirTech. Both Climate and Digital solutions within FoodTech showed strong development in the US,
whereas APAC and EMEA continued to be weak. Service net sales amounted to MSEK 479 (382) representing
13% (14) of total net sales with an organic growth of 7%.
For more information on the net sales, see the business area comments on pages 6, 7 and 8.

January-September 2023
Net sales grew to MSEK 10,271 (7,375) (organic growth +31%, structural +2%, currency effects +7%). Strong net
sales growth was reported in AirTech and DCT driven by high activity in projects deliveries, whereas FoodTech
showed flat development. Service net sales for the year amounted to MSEK 1,282 (1,056) representing 12% (14) oftotal net sales with an organic growth of 10%.

Net sales per Business Area
Q3, 2023 (MSEK)

0%
AirTech 55%

100%
FoodTech 18%

Net sales per region Q3, 2023 (MSEK)

0%
Americas 62%

Interim report January-September 2023

50%
DCT 27%50%
EMEA 22%100%
APAC 16%3

Results
Adjusted EBITDA and EBITA excludes Items Affecting Comparability, IAC, see page 18 for disclosure of the IACs.

July-September 2023
The gross margin amounted to 32.1% (29.3). The margin improved mainly as a result of strong net sales growthin AirTech and DCT, net price increases and positive effects from efficiency improvements.
Adjusted EBITDA amounted to MSEK 587 (359), corresponding to an adjusted EBITDA-margin of 16.5% (13.6).
Depreciation of tangible assets amounted to MSEK -84 (-66), whereof depreciation of leased assets was MSEK
-48 (-34).

Quarterly gross margin, %
35%
30%
25%
20%
15%
10%
5%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
22
21
23

Adjusted EBITA amounted to MSEK 503 (293), corresponding to an adjusted EBITA-margin of 14.1% (11.1). The
margin improved mainly because of net sales increases in AirTech and DCT as well as a high utilization rate ofproduction, efficiency improvement efforts in all business areas as well as contributions from net priceadjustments.

Quarterly adjusted EBITDA
margin, %Adjusted EBITA for Corporate amounted to MSEK -42 (-26). An expansion of the corporate functions is the main
driver of the increased cost level.

10%

Operating profit (EBIT) was MSEK 454 (271), corresponding to an operating margin of 12.8% (10.3). Amortization
and write-downs of intangible assets were MSEK -41 (-28), where MSEK -13 (-9) related to amortization of
intangible assets from acquisitions.

January-September 2023
The gross margin amounted to 31.5% (29.0).

20%
15%

5%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
22
21
23

Quarterly adjusted EBITA
margin, %20%

Adjusted EBITDA amounted to MSEK 1,610 (951), corresponding to an adjusted EBITDA-margin of 15.7% (12.9).
Depreciation of tangible assets amounted to MSEK -239 (-186), whereof depreciation of leased assets was MSEK-136 (-92).
Adjusted EBITA amounted to MSEK 1,371 (766), corresponding to an adjusted EBITA-margin of 13.3% (10.4). The
margin improved mainly because of net sales increases in AirTech and DCT, net price increase as well as
efficiency improvement efforts in all business areas.

15%
10%
5%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
22
23
21

Adjusted EBITA for Corporate amounted to MSEK -140 (-91).
Operating profit (EBIT) was MSEK 1,211 (626), corresponding to an operating margin of 11.8% (8.5). Amortization
and write-downs of intangible assets in the first nine months of the year were MSEK -113 (-75), where MSEK -38(-27) related to amortization of intangible assets from acquisitions.

Items affecting comparability (IAC)

Quarterly EBIT margin, %
20%
15%
10%
5%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23

Items affecting comparability totaled MSEK -7 (6) in the third quarter including restructuring activities of MSEK
0 (8). A reversal of restructuring costs of MSEK 3 was recorded in the period, explaining the low cost fromrestructuring activities in the quarter. Other IACs totaled MSEK -7 (-2) and relate to costs for M&A activities.
For the 9 months period IACs totaled MSEK -47 (-65) including restructuring activities of MSEK -12 (-36). Other
IACs of MSEK -35 (-29) were recorded in the period and comprise costs for M&A activities and costs related tothe announced strategic review of the equipment offering in FoodTech. In the same period last year Munters
incurred IACs related to the decision to close down business activities in Russia of MSEK -27.

Financial items

Tax rate LTM, %
30%
20%
10%
0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23

Financial income and expenses for the third quarter amounted to MSEK -93 (-41). Compared to the same period
last year interest expenses have increased due to higher interest rates in combination with increased
outstanding debt. Interest expense on lease liabilities amounts to MSEK -11 (-5) in the third quarter.
Financial income and expenses for the first nine months amounted to MSEK -232 (-78).

Taxes
Income taxes for the third quarter was MSEK -98 (-53). The effective tax rate in the third quarter was 27% (23).
Income taxes for the first nine months was MSEK -245 (-102). The effective tax rate for first nine months was
25% (19).
The low effective tax rate in the first nine months of 2022 was mainly driven by tax related to previous years anda revaluation effect on deferred taxes in Sweden.

Quarterly EPS, SEK
1.5
1.0
0.5
0.0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23

Earnings per share
Net income attributable to Parent Company’s ordinary shareholders amounted to MSEK 260 (176) in the third
quarter. Earnings per share, before dilution, was SEK 1.42 (0.97). Earnings per share, after dilution, was SEK 1.42
(0.97).
The average number of outstanding ordinary shares in the third quarter, for the purpose of calculating earnings
per share, was 182,371,664 before dilution and 182,405,896 after dilution.

Interim report January-September 2023

4

Financial position
Net debt as of September 30 amounted to MSEK 4,399 compared to 3,654 at the end of September 2022, 3,825
at the end of December 2022 and 4,833 at the end of June 2023. In the third quarter net debt was reduced
because of improved operating earnings as well as a reduction in operating working capital. Net debt in relation
to adjusted EBITDA was 2.2x compared to 2.7x at end of June 2023.

Net debt per quarter

6,000

3.5

Interest-bearing liabilities, including lease liabilities, increased by MSEK 1,190 compared to end of September
2022 and amounted to MSEK 5,345 (4,155). The increase is driven mainly by acquisitions financed through debt
executed during the recent year as well as increased operating working capital in the recent twelve months. In
the first nine months of 2023 Munters closed the acquisition of the Swedish manufacturer of components, Tobo
components, the French service business SIFT and the acquisition of a majority share in the Brazilian
manufacturer of controllers and complimentary accessories for the broiler and swine segments, InoBram. On the
16th of October, after the end of the Q3, it was announced that the acquisition of the Indian air handlingequipment company ZECO had been finalized.

5,000

3.0
2.5

4,000

2.0

3,000

1.5

2,000

1.0

1,000

0.5

0

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23

Quarter

The Group’s interest-bearing liabilities have an average maturity of 3.3 years.

Leverage

Average capital employed for the last twelve months was MSEK 10,733 (8,255). Return on capital employed(ROCE) for the last twelve months increased to 13.8% (9.9) because of improved operating earnings.
ROCE, %Cash flow
Cash flow from operating activities amounted to MSEK 554 (266) in the third quarter and MSEK 396 (345) for the
first nine months of 2023.

15%

Cash flow from changes in working capital had a positive impact of MSEK 110 (30) in the third quarter and anegative impact of MSEK -724 (-273) for the first nine months of 2023. The positive impact in the third quarter ismainly related to the positive contribution from DCT as their deliveries to customers increased. The negative
impact during the first nine months 2023 is mainly related to build-up of operating working capital in large
orders within battery in AirTech.

5%

10%

0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23

Total cash flow for the third quarter amounted to MSEK 458 (225) and MSEK 253 (-9) for the first nine months of2023. The total cash flow for the first nine months was impacted by acquisitions of MSEK -148, investments intangible and intangible assets of MSEK -455, payment of dividend to external shareholders in May 2023 of
MSEK -175 and net increased external borrowing of MSEK 742.

Parent company
The parent company for the Group is Munters Group AB. The parent company does not engage in sales of goods
and services to external customers. Cash and cash equivalents at the end of the period amounted to MSEK 3 (0).

Interim report January-September 2023

5

AirTech

Quarterly net sales - AirTech,(MSEK)

Business area AirTech is a global leader in energy-efficient air treatment for industrial and commercial
applications. We offer solutions for mission-critical processes that require exact control of moisture andtemperature, with a focus on energy-efficiency and sustainable climate systems. Our climate systems also
provide better indoor air quality and comfort, as well as increased production capacity.

Q3

Jan-Sep

MSEK
External order backlog
Order intake
GrowthNet sales
Growthof which organic growthof which acq. and div.
of which currency effects
Operating profit (EBIT)

2023
3,572
1,463
-40%
1,978
17%
12%
3%
3%
290

2022
4,219
2,453
63%
1,684
43%
25%
17%
247

Operating margin, %14.7

Amortization of intang. asset
Items affecting comparability
Re-allocation of int. services
Adjusted EBITA

-14
-1
305

Adjusted EBITA margin, %

15.4

14.4

∆%
-15
-40

LTM Full-year

2022
4,219
5,757
41%
4,817
47%
32%
14%
657

∆% Oct-Sep
-15
3,572
-15
7,517
0%
26
8,103
31%
41
1,245

2022
4,698
8,399
44%
6,830
46%
31%
0%
15%
976

14.7

15.2

13.6

15.4

14.3

-7
14
-2
242

-35
-13
974

-17
-8
-3
684

-46
-14
3
1,303

-29
-9
1,014

16.0

14.2

16.1

14.8

17

26

42

10,000
8,000

1,600

2023
3,572
4,875
-15%
6,090
26%
19%
2%
5%
926

17

2,400
2,000

July-September 2023
Order intake
Order intake decreased -45% organically, with negative development in all regions. No large orders werereceived in the quarter. Last year a large order for a battery production facility of MUSD 65 was received in
the third quarter, excluding this order Airtech’s order intake declined -17%.
• Within the Industrial segment the battery sub-segment had a weaker development, as customers in all
regions are ordering closer to delivery. In APAC the weaker development was mainly related to China
where the consolidation of the battery market continues. The market in EMEA and Americas was
weaker mainly as customers are placing orders closer to delivery, ie lead times are shortening, partly
driven by the more unstable macroenvironment.
• Clean Technologies (CT) declined mainly due to delays in customer decisions related to major
investments.
• Components showed good growth in all regions, mainly driven by strong growth in Americas where theacquisition of Hygromedia and Rotorsource in 2022 had good contribution. Service showed growth in
EMEA, offset by weaker markets in APAC and Americas.

Net sales

6,000

1,200

4,000

800

2,000

400
0

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23
Quarter
LTM

Quarterly adjusted EBITA
margin % - AirTech
20%

20%

15%

15%

10%

10%

5%

5%

0%

0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
23
21
22
Quarter
LTM

Order intake per region
Q3, 2023 - AirTech (MSEK)

0%
Americas 46%

50%
EMEA 30%

100%
APAC 24%

Net sales per region
Q3, 2023 - AirTech (MSEK)

Net sales increased +12% organically, showing positive development in all segments and especially thebattery sub-segment in Americas. Regions Americas and EMEA grew strongly, slightly offset by a weaker
development in APAC. Service accounted for 19% (23) of net sales with an organic increase of +8%.
• The Industrial segment showed growth in all regions, driven mainly by the battery subsegment in
Americas. EMEA also showed good growth in the battery sub-segment, whereas APAC had weaker
development. The pharmaceutical sub-segment in EMEA and the food sub-segment in Americas and
APAC also contributed to growth.
• Clean Technologies had a stable development in all regions.
• The Components segment showed good growth in Americas and a flat development in APAC and
EMEA. Service had good growth in EMEA, and flat development in the other regions.

0%Americas 48%

50%
EMEA 28%100%
APAC 24%

Adjusted EBITA
The adjusted EBITA margin improved mainly because of increased net sales.
• Efficiency improvements continued to have a positive impact on the margin.
• Contributions from net price increases strengthened the margin.

January-September 2023
• Order intake declined -21% organically. Components segment had good growth, offset by a weaker
development in the Industrial segment. The Service segment showed a stable development.
• Net sales increased +19% organically, mainly because of a strong development in the Industrial segment
in all regions. Components showed good growth in all regions and Service grew in Americas and EMEA
with a flat development in APAC. Service accounted for 19% (14) of net sales with an organic growth of+11%.
• The adjusted EBITA margin improved because of volume increase combined with positive contributions
from efficiency improvements and net price increases.

Interim report January-September 2023

6

Data Center Technologies

Quarterly net sales - DCT,(MSEK)

Business area Data Center Technologies (DCT) is a leading supplier of advanced climate cooling solutions usinga wide range of heat rejection technologies. Our solutions produce significant energy savings for data centerscompared with traditional cooling solutions. With a diversified product portfolio and extensive application
knowledge, we create sustainable climate solutions for data center operators worldwide. DCT has operations in
Virginia and Texas in the US, as well as in Ireland.

1,200

3,500

1,000

3,000
2,500

800

2,000

600

1,500

400

Q3

Jan-Sep

MSEK
External order backlog
Order intake
GrowthNet sales
Growthof which organic growthof which acq. and div.
of which currency effects
Operating profit (EBIT)

2023
5,453
404
-88%
953
152%
140%
13%
154

2022
6,739
3,406
1034%
378
134%
66%
32%
36%
19

Operating margin, %16.2

Amortization of intang. asset
Items affecting comparability
Adjusted EBITA-6
160

Adjusted EBITA margin, %

16.8

6.4

∆%
-19
-88

LTM Full-year

500

2023
5,453
1,764
-72%
2,483
176%
157%
18%
358

2022
6,739
6,216
801%
901
74%
11%
38%
25%
41

∆% Oct-Sep
-19
5,453
-72
1,793
-73%
176
2,983
175%
771
389

5.0

14.4

4.6

13.0

5.1

20%

20%

-5
0
24

-17
375

-15
8
48

-22
0
411

-20
8
84

15%

15%

15.1

5.3

13.8

6.0

10%

10%

5%

5%

152

716

560

679

2022
5,937
6,245
494%
1,401
100%
35%
35%
30%
71

1,000

200

July-September 2023
Order intake
Order intake decreased -89% organically, excluding the two large orders of MUSD 239 received in thethird quarter 2022 order intake decreased -49% organically.
• The lower order intake compared to last year is partly due to a changed ordering pattern amongcustomers, where orders last year were placed well ahead due to the supply chain constraints in themarket.
• The underlying demand is continued good with a strong long-term trend driven by continued
digitization and an increased focus on energy-efficient cooling solutions for data centers.
• Good development in Europe, for example with an order for the product Oasis.

Net sales
Net sales increased +140% organically, driven by good execution on large projects and increased
deliveries.
• Deliveries of the large orders announced during last year are proceeding according to plan.
• The production ramp-up in Europe of Munters products is progressing according to plan. Preparations
to introduce the SyCool split solution to the European market are ongoing.

0
Q3
21

Q1

Q3
22
Quarter

Q1

0
Q3
23
LTM

Quarterly adjusted EBITA margin % DCT

0%0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23
Quarter

LTM

Order intake per region Q3,2023 – DCT (MSEK)

0%
Americas 71%

50%
EMEA 28%100%
APAC 0%Net sales per region Q3,2023 - DCT (MSEK)

Adjusted EBITA
The adjusted EBITA margin improved significantly primarily because of strong volume growth, combinedwith a high utilization rate in production.
• Indirect costs in relation to net sales are expected to increase as investments in resources andcompetence are planned to accelerate over the coming quarters in order to capture growth
opportunities.

0%50%
Americas 95%
EMEA 4%100%
APAC 0%January-September 2023
• Order intake decreased -73% organically mainly because of customers having ordered solutions inadvance last year because of previous supply chain challenges.
• Net sales increased +157% organically, driven by high activity in large projects and a ramp-up of
production.
• The adjusted EBITA margin improved strongly because of volume increase, net price increases andefficiency improvements.

Interim report January-September 2023

7

FoodTech

Quarterly net sales - FoodTech,(MSEK)

Business area FoodTech is one of the world’s leading suppliers of innovative, energy-efficient climate systems
for livestock farming and greenhouses, as well as software for controlling and optimizing the entire foodproduction value chain. Our solutions increase productivity while contributing to sustainable food production,
where strict requirements are placed on quality, animal health and food safety. In July 2023 Munters announced
an initiation of a strategic review of FoodTech’s equipment business.

Q3
MSEK
External order backlog
Order intake
GrowthNet salesof which SaaS
SaaS ARR
Growthof which organic growthof which acq. and div.
of which currency effects
Operating profit (EBIT)

2023
999
651
28%
650
48
194
10%
1%
5%
3%
61

Jan-Sep
2022
908
507
1%
594
32
127
13%
-1%
13%
30

∆%
10
28
10
53
53

99

2023
999
1,878
7%
1,745
126
194
3%
-4%
2%
5%
86

LTM Full-year

2022
908
1,759
6%
1,697
86
127
12%
1%
11%
28

∆% Oct-Sep
10
999
7
2,360
4%
3
2,259
47
160
53
194
2%
210
63

2022
828
2,242
4%
2,211
119
133
9%
-2%
11%
5

Operating margin, %

9.3

5.1

4.9

1.6

2.8

0.2

Amortization of intang. asset
Items affecting comparability
Re-allocation of int. services
Adjusted EBITA

-19
-1
80

-15
-6
-1
53

-53
-24
162

-39
-57
-1
124

-73
-31
1
166

-59
-64
128

Adjusted EBITA margin, %

12.4

8.8

9.3

7.3

7.4

5.8

53

31

July-September 2023
Order intake
Order intake increased +22% organically, mainly driven by strong order intake in the US and a slightrecovery in EMEA and APAC.
•

Both Climate and Digital solutions showed strong growth in the Americas region. Climate solutions in
the US had a good development in the broiler and layer segments. Digital solutions continued toshow very strong growth in the US.
In region EMEA the underlying market was continued weak as a consequence of lower investment
levels. Positively, the layer segment showed good growth.
Region APAC showed stable development, with growth in both the broiler and layer segments. In
China the swine market showed continued weak development.

••

Net sales
Net sales increased +1% organically, mainly due to continued weak markets in APAC and EMEA.
•

Climate solutions in Americas showed strong growth, primarily in the broiler and layer segments.
Digital solutions in the US grew with increased software recurring revenues +53% to MSEK 48, with an
ARR (Annualized Recurring software Revenue) of MSEK 194.
Region EMEA declined due to the overall weak market demand in all segments except layer whichshowed good growth.
The APAC region declined, mainly due to a continued weak swine market in China whereas the layer
segment showed good growth.

•
•

700

2,500

600

2,000

500
400

1,500

300

1,000

200

500

100
0

0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23
Quarter
LTM

Quarterly adjusted EBITA margin %- FoodTech
14%

14%

12%

12%

10%

10%

8%

8%

6%

6%

4%

4%

2%

2%

0%

0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
23
21
22
Quarter

LTM

Order intake per region Q3, 2023 –FoodTech (MSEK)

0%
Americas 55%

50%
EMEA 33%

100%
APAC 12%Net sales per region Q3, 2023 FoodTech (MSEK)

0%
Americas 55%

50%
EMEA 31%100%
APAC 13%

Adjusted EBITA
The adjusted EBITA margin increased, mainly driven by positive effects from commercial excellence
initiatives, including net price increases.
••

Increased net sales combined with positive effects from operational excellence improvements led toan improved margin, with recent years actions to mitigate negative effects from lower net sales inboth EMEA and APAC providing a major positive contribution.
Positive effects from improved profitability in Digital solutions, despite continued high investments
for growth.

January-September 2023•••

Order intake was flat organically, with a good development in Americas, offset by weak markets in
APAC and EMEA.
Net sales declined -4% organically, mainly due to weak markets in APAC and EMEA, partly offset by agood development in Americas.
The adjusted EBITA margin improved significantly as a result of positive effects from net priceincreases and efficiency improvement initiatives.

Interim report January-September 2023

8

Corporate

Quarterly Corporate cost (MSEK)
2.0%

The Corporate function reported an adjusted EBITA of MSEK -42 (-26) in the third quarter. Corporate staff
functions as well as minority investments are accounted for within Corporate.
To further enhance Munters strategic journey Munters has started to make financial investments in start-ups
with the aim to support innovation for the group within digitalization, technology, and sustainability. In 2022,
five minority investments were made. In the third quarter 2023 Munters participated in the capital increase of
one of the investments.

60

1.5%

40

1.0%

20

0.5%

0

0.0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
21
22
23
Quarter% of Net sales, LTM

Interim report January-September 2023

9

Other information
Employees
The number of permanent FTEs (Full Time Equivalents), at September 30, 2023 was 4,370 (3,755). The amountof FTEs at September 30, 2023 in business area AirTech was 2,720 (2,536), in DCT 619 (341), in FoodTech 892(785) and at Group functions 139 (93).

Outstanding shares
As of September 30, 2023, Munters held 1,966,345 treasury shares of the total shares of 184,457,817. Thus, thenumber of outstanding shares as of the balance sheet date was 182,491,472.

Dividend
A dividend of SEK 0.95 (0.85) per share was paid in May 2023, in total MSEK 173 (154). This represented 30 per
cent of the net income 2022. During the second quarter a dividend of MSEK 2 (2) was paid to non-controllinginterests.

Other events during the quarter
Strategic review of FoodTech equipment offering – On 18th July Munters announced that a strategic review ofthe equipment offering in FoodTech has been initiated. The company has decided to accelerate the focus on
digital growth (software, IoT, sensors and controllers) and the strategic review includes exploring different
options and may result in partial divestments, although no such decisions have yet been made. Munters net
sales for 2022 amounted to approximately BSEK 10.4, of which the equipment sales within FoodTech accounted
for approximately 16%.
Agreement signed to acquire ZECO – In September 2023 it was announced
that an agreement had been signed to acquire ZECO, an Indian manufacturer of
air treatment solutions for an estimated enterprise value of MSEK 790. ZECO
will provide Munters with a strong platform to expand its dehumidification
offering in the Indian market. ZECO reported net sales of about MSEK 510 for
FY 2022/2023, ending on the 31st of March 2023. The reported EBITA-margin is accretive to the Munters Group.
The acquisition will be fully financed through existing credit facilities.

Ten largest shareholders
As of 30 Sep%

FAM AB

28.0

First Swedish National
Pension Fund

6.2

ODIN Funds

6.2

Swedbank Robur Fund

6.1

Fourth Swedish National
Pension Fund

5.1

Capital Group

3.3

Vanguard

2.1

Columbia Threadneedle

1.9

Schroders

1.8

Janus Henderson Investors

1.7

Source: Modular Finance AB

Nomination committee for the 2024 Annual General Meeting – In September Munters announced theNomination committee for the 2024 Annual General Meeting. It comprises the following members: Magnus
Fernström, FAM, Chairman of the Nomination Committee, Celia Grip, Swedbank Robur Funds, Mats Larsson,
First Swedish National pension fund, Philip Mesch, ODIN Fund Management.

Events after the close of the period
Acquisition of ZECO - On 16th October the acquisition of the Indian manufacturer of air treatment solutions,
ZECO was finalised.

Interim report January-September 2023

10

About Munters
Munters is a global leader in energy-efficient and sustainableclimate solutions. The solutions guarantee temperature andhumidity control, which is mission-critical for customers.
Munters offers solutions to many different industries wherecontrolling temperature and humidity is mission critical. Our
solutions reduce customers’ climate and environmental impact
through lower resource consumption, and in the processcontribute to cleaner air, higher efficiency and reduced carbon
emissions. Sustainability is an important part of Munters’
business strategy and value creation.

Short facts

Purpose– ~4,370 employees (FTEs)

For customer success and ahealthier planet– >30 countries with sales andmanufacturing– 19 production units– 21% women leaders– Three business areas: AirTech, Data
Center Technologies and FoodTech
In Q3, AirTech generated 55%, Data Center
Technologies 27% and FoodTech 18% of thetotal net sales of Munters

Curiosity and a drive tocreate pioneering
technologies are part of ourDNA. Our climate solutions
are mission-critical to ourcustomers’ success andcontribute to a moresustainable planet.

The strategy of Munters
Munters has a strong position in most of our markets. We see great opportunities toimprove and strengthen our market position and to achieve our mid-term financial targets
and deliver on our strategy. The key to success is how we respond in working toward ourgoals. Our overarching strategic priorities show which areas we regard as important to our
success. For each strategic priority we have clear action plans and ambitions what we wantto achieve. Sustainability is a priority issue reflected in every strategic priority.
People:Employees are the hub of our business and their safety and health is a priority.
Diversity and inclusion are important to us, since we are convinced that diversity
leads to stronger innovation. Through collaboration and a passion for creatingenergy-efficient solutions for our customers and partners, we contribute to ourcustomers’ success and a better world.

Customers:

We help our customers succeed by supplying high-quality climate solutions that make themmore sustainable. Our success is built on close, long-term relationships and a deep understanding of the customer’s business andfuture needs. Our strategy is to continue to build customer insight and utilize our broadbased expertise on applications, technology andcomponents to supply attractive solutions and services.

Innovation:

Curiosity and an ambition to create pioneering technologies are part of our DNA. We will stayat the forefront of the industry’s development and contribute to sustainable development through our energy- and resource-efficient
climate solutions. We continue to invest in our core technologies, solutions and digitization to optimize our product portfolio and ourinnovative production technology.

Markets:

Munters is active around the world and climate change, digitization and population growth are the key markets drivers. Our resources
are focused on strengthening our position in areas where we can be a market leader and growing the service business. With highquality, resource-efficient solutions and a conscious effort to re-duce our own climate impact, we contribute to sustainable
development.

Excellence ineverything we do:

Our aim is to increase efficiency and quality in everything we do and to reduce our climate impact. Munters’ operations all share
responsible business practices and high ethical standards with a respect for human rights, diversity, and health and safety in theworkplace

Interim report January-September 2023

11

Quarterly overview Group
Income Statement
2023
MSEK
Order backlog
Order intake
Net sales
Adjusted EBITDA
Depreciation tangible assets
Adjusted EBITA
Amortization intangible assets from acq.
Amortization other intangible assets
Items affecting comparability (IAC)
Operating profit (EBIT)
Financial income and expenses
Tax
Net income-attributable to Parent Comp. Shareholders

Q3
10,025
2,494
3,560
587
-84
503
-13
-29
-7
454
-93
-98
264
260

Q2
11,153
3,427
3,536
561
-82
479
-13
-25
-34
408
-66
-85
257
256

2021

2022
Q1
10,783
2,544
3,175
462
-73
389
-12
-22
-6
349
-73
-62
214
214

Q4
11,463
3,143
3,011
381
-78
304
-8
-30
-9
255
-64
-61
131
128

Q3
11,866
6,354
2,644
359
-66
293
-9
-19
6
271
-41
-53
178
176

Q1
38%
12.3
11.0
1.18
1.18
12.7
2.7

Q4
26%
10.1
8.5
0.70
0.70
12.7
2.9

Q3
22%
11.1
10.3
0.97
0.97
13.1
3.0

Q2
7,515
3,200
2,610
332
-60
272
-9
-15
-28
220
-14
-39
166
169

Q1
6,367
4,133
2,121
260
-59
201
-9
-14
-44
134
-23
-10
102
104

Q4
4,198
2,605
2,057
274
-56
217
-8
-10
-9
190
-14
-43
133
133

Q2
25%
10.4
8.4
0.93
0.93
13.3
2.9

Q1
16%
9.5
6.3
0.57
0.57
13.4
2.6

Q4
10%
10.6
9.2
0.73
0.73
13.1
2.2

Q3
3,525
2,295
1,857
270
-55
215
-8
-10
-4
194
-20
-35
138
138

Key performance indicators
2023
MSEK
Organic Growth, Net Sales
Adjusted EBITA margin, %Operating margin, %Earnings per share before dilution, SEK
Earnings per share before after, SEKOWC/Net Sales, %Net Debt/Adjusted EBITDA, LTM

Q3
28%
14.1
12.8
1.42
1.42
13.7
2.2

Q2
27%
13.5
11.5
1.40
1.40
13.2
2.7

2022

2021
Q3
3%
11.6
10.5
0.75
0.75
12.5
2.2

Net Debt
2023
MSEK
Cash and cash equivalents
Interest-bearing liabilities
Lease liabilities
Provisions for pensions
Accrued financial expenses
Net Debt

Interim report January-September 2023

Q3
-1,165
4,575
770
197
21
4,399

Q2
-710
4,518
801
209
15
4,833

2022
Q1
-618
3,772
781
217
24
4,175

Q4
-914
3,721
774
227
16
3,825

Q3
-698
3,424
731
187
10
3,654

2021
Q2
-459
3,101
367
226
6
3,241

Q1
-565
2,830
370
298
5
2,938

Q4
-674
2,374
376
308
5
2,389

Q3
-440
2,324
369
279
4
2,536

12

Condensed statement of comprehensive
incomeQ3

Jan-Sep

LTM

Full-year

MSEK

2023

2022

2023

2022

Oct-Sep2022

Net sales
Cost of goods sold
Gross profit
Selling expenses
Administrative costs
Research and development costs
Other operating income and expenses
Share of earnings in associates
Operating profit

3,560-2,418
1,142
-313
-278
-94
0
-3
454

2,644
-1,870
774
-271
-204
-58
30
271

10,271-7,040
3,230
-939
-805
-245
-26
-5
1,211

7,375
-5,237
2,138
-772
-566
-168
-7
626

13,281-9,172
4,110-1,246-1,040
-313
-38
-7
1,466

10,386-7,3683,017-1,079
-800
-236
-19
-2
881

Financial income and expenses
Profit/Loss after financial items

-93
362

-41
230

-232
979

-78
548

-296
1,171

-142
739

Tax
Net income for the period

-98
264

-53
178

-245
734

-102
446

-305
865

-162
577

Attributable to Parent Company shareholders
Attributable to non-controlling interests

260
4

176
2

730
5

449
-3

857
8

577
-0

182,371,664 181,795,436
182,405,896 182,049,874
1.42
0.97
1.42
0.97

182,194,023
182,225,460
4.00
4.00

181,671,444
181,862,239
2.47
2.47

182,143,744
182,174,003
4.71
4.71

181,752,465
181,932,090
3.18
3.17

Average number of outstanding shares before dilution
Average number of outstanding shares after dilution
Earnings per share before dilution, SEK
Earnings per share after dilution, SEK
Other comprehensive income

Items that may be reclassified subsequently to profit or loss:
Exchange-rate differences on translation of foreign operations

-87

289

151

643

-9

483

Actuarial gains/losses on defined-benefit pension obligations
Income tax effect not to be reclassified to profit or loss
Other comprehensive income, net after tax
Total comprehensive income for the period

12
-3
-78
186

44
-9
324
502

35
-7
178
912

131
-27
747
1,193

-5
1
-13
852

91
-18
555
1,132

Attributable to Parent Company shareholders
Attributable to non-controlling interests

182
3

500
2

908
4

1,197
-4

845
7

1,133
-1

Items that will not be reclassified to profit or loss:

Interim report January-September 2023

13

Condensed statement of financial position
MSEK

2023-09-30

2022-09-30

2022-12-31

NON-CURRENT ASSETS
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-Use assets
Participations in associated companies
Other financial assets
Deferred tax assets
Total non-current assets

5,694
2,207
972
729
30
86
382
10,098

5,172
2,041
781
713
38
53
298
9,096

5,359
2,027
825
751
34
83
298
9,376

CURRENT ASSETSInventory
Accounts receivable
Derivative instruments
Current tax assets
Other receivables
Prepaid expenses and accrued income
Cash and cash equivalents
Total current assets

1,965
2,486
2
89
131
1,069
1,165
6,907

1,765
1,899
−
89
126
785
698
5,362

1,956
2,235
2
93
159
684
914
6,042

TOTAL ASSETS

17,005

14,45915,419EQUITY
Shareholders' equity
Non-controlling interests
Total equity

5,976
1
5,978

5,413
3
5,416

5,303
3
5,307

NON-CURRENT LIABILITIESInterest-bearing liabilities
Lease liabilities
Provisions for pensions
Other provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities

4,568
594
197
66
378
443
6,246

3,386
610
187
66
174
459
4,882

3,721
640
227
65
223
442
5,318

CURRENT LIABILITIESInterest-bearing liabilities
Lease liabilities
Other provisions
Accounts payable
Derivative instruments
Current tax liabilities
Advances from customers
Other current liabilities
Accrued expenses and deferred income
Total current liabilities

7
176
165
1,156
11
108
1,725
97
1,335
4,781

37
121
159
932
3
48
1,428
163
1,270
4,160

−
135
150
1,288
−
55
1,715
257
1,194
4,794

17,005

14,45915,419ASSETSEQUITY AND LIABILITIESTOTAL EQUITY AND LIABILITIESCondensed statement of changes in equity
MSEK

2023-09-30

2022-09-30

2022-12-31

Opening balance
Total comprehensive income for the period
Exercised share options
Put/call option related to non controlling interests
Dividends paid
Share option plan incl. deferred tax
Other
Closing balance

5,307
912
14
-81
-175
1
−
5,978

4,363
1,193
15
−
-156
2
−
5,416

4,363
1,132
25
-58
-156
0
0
5,307

Total shareholders´ equity attributable to:
The parent company's shareholders
Non-controlling interests

5,976
1

5,413
3

5,303
3

Interim report January-September 2023

14

Condensed cash flow statement
Q3
MSEK

Jan-Sep

LTM

Full-year

2023

2022

2023

2022

Oct-Sep

2022

Operating profit
Reversal of non-cash items
Depreciation, amortization and impairments
Other profit/loss items not affecting liquidity
Change in provisions
Provisions

454

271

1,211

626

1,466

881

125
15

94
-6

352
15

260
-14

468
5

377
-24

3

-26

11

-20

7

-24

Cash flow before interest and tax
Paid financial items
Taxes paid
Cash flow from operating activites before changes in working
capital

598
-73
-81

334
-34
-64

1,588
-214
-254

852
-64
-171

1,946
-272
-316

1,210
-121
-233

444

235

1,120

617

1,359

856

Change in accounts receivable
Change in inventory
Change in accrued income
Change in accounts payable
Change in advances from customers

-119
161
60
-104
109

-94
-149
62
-22
204

-157
83
-278
-172
-173

-151
-454
-233
33
573

-641
-168
-281
192
230

-635
-706
-236
397
977

Cashflow from changes in operating working capital

106
4

1
30

-696
-28

-233
-40

-667
132

-203
119

OPERATING ACTIVITIES

Change in other working capital
Cash flow from changes in working capital

110

30

-724

-273

-535

-84

Cash flow from operating activities
INVESTING ACTIVITIESBusiness acquisitions
Investments in associated companies
Investments in participations and securities in other companies
Sale of intangible assets and property, plant and equipment
Investment in property, plant and equipment
Investment in intangible assets

554

266

396

345

823

772

1
-4
0
-65
-66

-34
-36
18
-44
-74

-148
-0
-3
-1
-214
-242

-302
-34
-39
19
-133
-223

-568
-1
-27
7
-303
-337

-721
-34
-62
27
-222
-317

Cash flow from investing activities
FINANCING ACTIVITIESExercised share options
Loan raised
Amortization of loans
Repayment of lease liabilities
Dividends paid
Other changes to financing activities
Cash flow from financing activities

-134

-169

-608

-710

-1,227-1,330

11
376
-308
-40
-1
38

10
267
-117
-32
128

14
1,454
-712
-117
-175
-0
465

15
1,052
-466
-88
-156
357

25
1,904
-749
-150
-175
-6
850

25
1,503
-504
-122
-156
-5
743

Cash flow for the period
Cash and cash equivalents at period start
Exchange-rate differences in cash and cash equivalents
Cash and cash equivalents at period end

458
713
-6
1,165

225
459
14
698

253
914
-2
1,165

-9
674
34
698

446
698
20
1,165

184
674
56
914

Interim report January-September 2023

15

Parent company
Condensed income statement
Q3
MSEK

Jan-Sep

LTM

Full-year

2023

2022

2023

2022

Oct-Sep2022

Net sales
Gross profit/loss
Administrative costs
Other operating income and expenses
Operating profit

−
0
-4
26
22

−
0
0
4
5

−
0
-11
29
18

−
0
-3
5
2

−
0
-15
32
18

−
−
-8
8
1

Financial income and expenses
Profit/Loss after financial items

-6
16

-2
3

-12
6

-3
-1

-14
4

-5
-4

Group contributions
Profit/Loss before tax

−
16

−
3

−
6

−
-1

7
10

7
3

Tax
Net income for the period

−
16

0
3

−
6

0
-1

1
11

1
4

3
−
3

6
−
6

-1
−
-1

11
−
11

4
−
4

Condensed statement of comprehensive income
Profit/Loss for the period
Other comprehensive income, net after tax
Comprehensive income for the period

16
−
16

Condensed balance sheet
MSEK

2023-09-30

2022-09-30

2022-12-31

4,098
4
4,103

4,097
4
4,101

4,098
4
4,103

−
1
27
3
31

1
1
18
0
20

1
1
14
0
15

4,134

4,122

4,118

6
4,136
-401
6
3,747

6
4,136
-257
-1
3,883

6
4,136
-246
4
3,899

4
4

3
3

3
3

1
29
348
4
383

2
12
217
5
236

1
16
192
6
215

4,134

4,122

4,118

ASSETSNON-CURRENT ASSETS
Participations in subsidiaries
Other financial assets
Total non-current assets
CURRENT ASSETS
Prepaid expenses and accrued income
Current tax assets
Receivables from subsidiaries
Cash and cash equivalents
Total current assets
TOTAL ASSETSEQUITY AND LIABILITIESEQUITY
Share capital
Share premium reserve
Profit brought forward
Income for the period
Total equity
NON-CURRENT LIABILITIESProvisions for pensions and similar commitments
Total non-current liabilities
CURRENT LIABILITIES
Accounts payable
Accrued expenses and deferred income
Liabilities to subsidiaries
Other liabilities
Total current liabilities
TOTAL EQUITY AND LIABILITIESInterim report January-September 2023

16

Other disclosures
Accounting policies

interruption, transportation, the liability of Board members and the CEOand employment practices liabilities.

This report has been prepared, with regards to the Group, in accordancewith IAS 34 Interim Financial Reporting, recommendation RFR 1 of theSwedish Financial Reporting Board and the Swedish Annual Accounts Act
and, with regards to the Parent Company, in accordance withrecommendation RFR 2 of the Swedish Financial Reporting Board and theSwedish Annual Accounts Act. The accounting principles appliedcorrespond to those presented in the Annual- and Sustainability report
2022 (Note 1).

In the beginning of October, 2023 Israel declared it was at war. Within thebusiness area FoodTech, Munters has manufacturing of controllers in Israel
located south of Tel Aviv with about 140 employees. Munters monitors thesituation in Israel closely in order to be able to quickly respond to any
disturbances. A more detailed description of the Group’s risks and how they
are managed can be found in the Annual- and Sustainability report 2022

Environmental impact andenvironmental policy

Transactions with related parties

Munters’ operations affect the external environment through air and water
emissions, the handling of chemicals and waste, transport of input goods
and finished products to and from Munters factories. Munters is committed
to constant vigilance regarding the environmental impact of its operations.
Munters is committed to complying with all laws and to continuously
promoting improvements in all Environment, Health & Safety (EHS)
aspects, wherever Munters conducts business. Munters constantly seeks
opportunities to reduce risk and to create a safer, healthier, more diverseand more environmentally friendly workplace for our employees,
customers, communities, and the overall environment. Munters’
manufacturing facilities all over the world are committed to working
according to an EHS Management Program. The purpose of the EHS
Program is to ensure regulatory compliance, actively prevent injuries, andreduce the impact that our business has on the environment.

Risks and uncertainties
The Group’s significant risks and uncertainties can be divided into four
categories; strategic, operational, financial and regulatory risks. In thesecategories, there are both risks due to political and macroeconomic trends
and specific risks directly linked to the business carried out by the Group. A
risk assessment is carried out on an annual basis and the purpose is to
identify and address the most important risks.
Munters’ products are used in complex customer processes. Quality andcontract obligations are critical and could result in claims for damages. The
Group depends to some extent on key customers and key personnel.
Considering that Munters is a company with geographically widespread
operations and many small organizational units, there is a risk of failure tocomply with relevant regulations in the business ethics area, e.g. antibribery rules.
Financial risks mainly consist of currency, interest and financing risks.
Munters works actively with insurance solutions, and group-wide
insurances are governed by central guidelines. This includes for example
coverage for general liability and product liability, property, business

Interim report January-September 2023

on pages 91-96.

There have been no significant transactions with related parties during theperiod.

Fair value of financial instruments
Financial assets measured at fair value through profit/loss relates tofinancial investments and derivatives. Financial investments amounted to
MSEK 65 (39) and net derivatives to MSEK -9 (-3) as of the balance sheet
date.
The Group’s put/call option, from the acquisition of MTech Systems in 2017,is recognized at fair value in the statement of financial position. The option
is measured according to IFRS 9 and is categorized in level 3 in the fairvalue hierarchy. The exercise period begins on January 1, 2025, and ending
on December 31, 2025. The fair value of the option amounts to MSEK 304
as of the balance sheet date.
In June, Munters closed the acquisition of a majority share in InoBram.
Munters has acquired 60% of the company but the agreement includes aput/call option for Munters to acquire the remaining 40% of the company
in 2027. The option was recognized at fair value as of the transaction date.
The fair value of the option amounts to MSEK 63 as of the balance sheet
date.
MSEK
Opening balance
Valuation put/call option
Remeasurements
Discounting
Exchange-rate differences
Closing balance2023-09-30
217
73
62
18
8

2022-09-30
137
−
−
−
32

2022-12-31
137
−
57
−
23

377

169

217

Munters deems that the interest rate on interest-bearing liabilities is in linewith market terms on September 30, 2023, and the fair value at the end of
the reporting period therefore in all material aspects corresponds to thecarrying amount.

17

Net Sales by business area and region
Net Sales by business area and region in Q3

AirTechMSEK
Americas
EMEA
APAC
Sales between regions
TOTAL

2023
979
619
472
-92
1,978

DCT
2022
727
499
576
-118
1,684

FoodTechGroup

Eliminations

2023
913
88
1
-49
953

2022
315
60
3
-1
378

2023
353
239
95
-36
650

2022
258
268
111
-43
594

DCT
2023
2,288
246
3
-54
2,483

2022
669
227
6
-2
901

FoodTech
2023
2022
897
724
705
798
249
303
-105
-127
1,745
1,697

2023
0
-13
-6
-2
-21

2022
0
-4
-5
-2
-12

2023
2,245
932
562
-180
3,560

2022
1,301
822
684
-163
2,644

Group
2023
5,884
2,895
2,074
-582
10,271

2022
3,374
2,574
1,948
-521
7,375

Net Sales by business area and region Jan-Sep
AirTech
2023
2022
2,700
1,985
1,970
1,562
1,835
1,656
-416
-387
6,090
4,817

MSEK
Americas
EMEA
APAC
Sales between regions
TOTAL

Eliminations
2023
2022
-1
-3
-26
-13
-13
-18
-7
-6
-48
-40

Reconciliation of alternative performance measures and items
affecting comparability
understanding of the financial performance when comparing the current
period to previous periods. Items included are for example, restructuring
activities, capital gains and losses from business divestments and M&A
related costs as well as costs for other events, such as the Covid-19
pandemic and war in Ukraine, having a significant impact on thecomparability.

The Group presents certain financial metrics in the Interim Report that are
not defined in accordance with IFRS. The Group is of the opinion that these
metrics provide valuable complementary information, in that they enable
an evaluation of the Group’s performance. The financial metrics arecalculated in accordance with the definitions presented in this interim
report. A reconciliation of Adjusted EBITDA and Adjusted EBITA is found in
the quarterly overview on page 12. Items affecting comparability are eventsor transactions with significant financial effects, which are relevant for theBelow is a break-down of items affecting comparability by period.

Q3
MSEK
Restructuring activities
Other items affecting comparability
Total

2023
0
-7
-7

Jan-Sep
2022
8
-2
6

2023
-12
-35
-47

LTM
2022
-36
-29
-65

Oct-Sep
-11
-45
-57

Full-year
2022
-35
-40
-75

Business combinations
agricultural industry and connects the entire food production value
chain.

Consolidated acquisitions in 2023

Company (Country)

Business
area

Month
acquiredTobo Component (SE)SIFT (FR)InoBram (BR)

AirTechAirTechFoodTech

May
June
June

Number of
employees Net sales
14
17
~150

MSEK 76
MEUR 3
MBRL 53

Share
(%)
100
100
60

The table shows number of full-time equivalent employees at theacquisition date. Revenue refers to estimated net sales in 2022.
In May, Munters acquired 100% of Tobo Component, a Swedish
manufacturer of humidification components. The company isheadquartered in Tobo and has been a contract manufacturer of pads,
cassettes, and modules for Munters for several years.
In June, 100% of SIFT, a French service company within climate control
and cold storage, active primarily in the northern France was acquired.
The acquisition strengthens the market share for Munters within Service
and builds a local service presence in strategic areas.
In June, the acquisition of a majority share in InoBram was finalized.
InoBram is a Brazilian manufacturer of controllers and complimentaryaccessories for the broiler and swine segments. With the help of
innovative software, sensors and connected solutions, farmers and foodproducers get the tools they need to improve animal health and increaseenergy efficiency in their operations.
Munters has acquired 60% of InoBram and has an option to acquire theremaining 40% of the company in 2027. The acquisition supports
Munters’ strategy to grow its digital solutions for the food andInterim report January-September 2023

The table below presents an overview of paid purchase considerations
and the fair value of acquired net assets for the business combinations in
2023. At the balance sheet date the purchase considerations and the fairvalue of acquired net assets are based on preliminary purchase priceallocations.

MSEK

Jan-Sep
2023

Purchase priceCash purchase consideration paid
Holdback & deferred considerations
Put/call option
Total purchase consideration
Fair value of acquired net assets

171
8
63
242
-87

Goodwill

157

Cash flow
Cash purchase consideration paid
Cash and cash equivalents in acquired companies
Change in the Group's cash and cash equivalents

171
23
148

The acquisition of the Indian air handling equipment company ZECO wasclosed on October 16th. For more information related to the acquisition,
see page 10.

18

THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL

Review report
Munters Group AB (publ.), corporate identity number 556819-2321

Introduction
We have reviewed the condensed interim report for Munters Group AB (publ.) as per September 30, 2023 and for the nine months period then ended. The
Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and theSwedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements
Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International
Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtainassurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, inaccordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the
Parent Company.
Stockholm
Ernst & Young AB

Andreas Troberg
Authorized Public Accountant

Interim report January-September 2023

19

Definition of key financial indicators
In this financial report, there are references to several performancemeasures. Some of the measures are defined in IFRS, others are alternative
performance measures and are not disclosed in accordance with applicablefinancial reporting frameworks or other legislations. The performancemeasures are used by the Group to assist both investors and management
in analyzing Munters’ business. Below the performance measures found in
this financial report are described and defined. The reason for the use of
the performance measure is also disclosed.

Organic growth
Change in net sales compared to the previous period, excluding
acquisitions and divestments and currency translation effects. The measureis used by Munters to monitor net sales growth driven by changes involume and price between different periods.

Order backlog
Received and confirmed sales orders not yet delivered and accounted foras net sales. Order Backlog is a useful measure to indicate the efficiency ofthe conversion of received and confirmed sales orders into net sales infuture periods. The measure is used by Munters to monitor businessperformance and customer demand and adjust operations if needed.

Order intake
Received and confirmed sales orders minus cancelled orders during thereporting period. The order intake is an indicator of future revenues and,
consequently, an important KPI for the management of Munters’ business.

Operating profit (EBIT)
Earnings before interest and tax. Munters believes that EBIT shows the
profit generated by the operating activities.

Adjusted EBITA
Operating profit, adjusted for amortizations, write-downs of intangible
assets and items affecting comparability. Munters believes that using
adjusted EBITA is helpful in analyzing our performance as it removes theimpact of items considered not to be of recurring character and therefore
do not reflect our core operating performance.

Capital employed
Capital employed is calculated as the total equity plus interest bearing
liabilities.

Return on capital employed (ROCE)
Average operating profit (EBIT) plus financial income, divided by theaverage capital employed, where capital employed is total equity plus
interest-bearing liabilities. The average capital employed is calculated
based on the last 12 months.

Cash and cash equivalents
Cash and bank balances plus investments in securities and the like withmaturity periods not exceeding three months. This is a measure thathighlights the short-term liquidity.

LTM
LTM (last twelve months) after any key indicator means that the KPI
corresponds to an accumulation of previous twelve month reported
numbers. The measure highlight trends in different KPIs, which is valuable
in order to gain a deeper understanding of the development of thebusiness.

Net debt
Net debt calculated as interest bearing liabilities, lease liabilities, provisions
for pension and accrued financial expenses, reduced by cash and cash
equivalents.

Number of employees
Number of employees is presented recalculated as full-time positions, if
not otherwise stated. Average number of employees for the year is
calculated as the sum of permanent employees at the end of each of thelast 13 months divided by 13.

Operating working capital
Includes accounts receivable, inventory, accrued income, accounts payable
and advances from customers.

Adjusted EBITA margin

Operating working capital/net sales

Adjusted EBITA as a percentage of net sales. Munters believes that
Adjusted EBITA margin is a useful measure for showing the Company’s
profit generated by the operating activities.

Average Operating Working Capital for the last twelve months as apercentage of Net sales for the same period.

Adjusted EBITDA
Operating profit adjusted for items affecting comparability anddepreciations, amortizations and write-downs of tangible and intangible
assets as well as Right-of-Use assets.

Adjusted EBITDA margin
Adjusted EBITDA as a percentage of net sales.

Items affecting comparability (IAC)
Items affecting comparability are events or transactions with significant
financial effects, which are relevant for the understanding of the financial
performance when comparing the current period to previous periods. Items
included are for example, restructuring activities, capital gains and losses
from business divestments and M&A related costs.

Interim report January-September 2023

Earnings per share
Net income divided by the weighted average number of outstanding
shares.

SaaS recurring revenue
Total recurring revenue from SaaS contracts (Software-as-a-Service)recognized in the period. The KPI is also presented annualized and named
SaaS ARR, which is calculated by multiplying SaaS Recurring Revenue inthe last quarter by four.

Equity/assets ratio
Equity (including non-controlling interests) divided by total assets.

Americas
Refers to North-, Central and South America.

20

Information andreporting dates
You are welcome to join a webcast or telephone conference on
October 24 at 9:00 AM CEST, when President and CEO Klas
Forsström together with the Group Vice President and CFO,
Katharina Fischer, will present the report.

Webcasthttps://ir.financialhearings.com/munters-q3-report-2023

Conference call
If you wish to participate via teleconference, please register on thelink below. After registration you will be provided phone numbers
and a conference ID to access the conference. You can ask questions
verbally via the teleconference.
https://conference.financialhearings.com/teleconference/?id=5009
867
This interim report, presentation material and a link to the webcast
will be available on https://www.munters.com/en/investorrelations/

Every care has been taken in the translation of this interim report. In
the event of discrepancies, the Swedish original will supersede theEnglish translation. The addition of the totals presented may resultin minor rounding differences.
This information is information that Munters Group AB is obliged tomake public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency ofthe contact person set out above, at 07.30 AM CEST on October 24,
2023.

Contact information:
Ann-Sofi Jönsson
Vice President, Investor Relations & Enterprise Risk Management
Phone: +46 (0)730 251 005
Email: ann-sofi.jonsson@munters.com
Line Dovärn
Director, Investor Relations
Phone: +46 (0)730 488 444
Email: line.dovarn@munters.com

Financial calendar:
Full year report January-December 2023

February 1, 2024

Release of Annual & Sustainability report2023

Week starting
February 19, 2024

Annual General Meeting

March 21, 2024

Munters Group AB, Corp. Reg. No. 556819-2321

Interim report January-September 2023

21