Q3”Continued strong order intake
while margin negatively impacted byremaining supply chain challenges”

July-September 2021

January-September 2021

■ Demand was strong in the quarter. Constraints in the supply chain
remained.

■ Strong demand in the period with impact of supply chain constraints
from the second quarter and forward.

■ Order intake increased by +20%, a currency adjusted increase of +21%,
and net sales increased +1%, currency adjusted +3%, mainly driven bystrong growth in business area AirTech within mainly the sub-segment
Battery and Data Centers.

■ Order intake increased by +14%, a currency adjusted increase of +21%
and net sales increased +2%, currency adjusted +10%, mainly driven
by strong growth in the Battery sub-segment in business area AirTech.

■ The adjusted EBITA-margin was 11.6% (14.8), negatively impacted by
the supply chain constraints, higher raw material prices and freight costs,
changed business mix, lower FoodTech volumes in China and the time
lag of the impact of our own price increases.
■ Leverage (net debt/adjusted EBITDA, LTM*) was 2.2x, slightly higher
than 1.9x at the end of June 2021, due to supply chain challenges.
■ Net debt as of September 30 amounted to MSEK 2,536 compared to
MSEK 2,209 at the end of June 2021.
■ During the quarter, AirTech successfully continued its strategy execution
with focus on core market segments which resulted in strong growth inprioritized areas. FoodTech has during the quarter continued to invest in
its digital journey with the aim to establish a connected offering
throughout the value chain. We continue to invest in innovation,competence and projects to increase capacity, efficiency improvements
and ways of working in order to enhance our offering and further
strengthen our market position.
Financial summary
Q3■ The adjusted EBITA-margin was 12.7% (12.8), negatively impacted
during the second and third quarters by the supply chain constraints,
higher raw material prices and freight costs as well as the time lag of
the impact of our own price increases. The AirTech margin was
positively impacted by increased net sales, high utilization rates andefficiency improvements while the FoodTech margin was negatively
impacted by lower volumes in China.
■ Leverage (net debt/adjusted EBITDA, LTM*) was 2.2x, higher than 1.9x
per end of December 2020 and lower than same period last year
(2.5x).
■ Net debt as of September 30 amounted to MSEK 2,536 compared to
MSEK 2,116 at the end of December 2020. In the second quarter a 5year re-financing was secured enabling execution of the long-term
strategy.

Jan-Sep

LTM*

MSEK

2021

2020 ∆%

2021

2020 ∆%

Order intake

2,295

1,919

20

6,407

5,638

Net sales

1,857

1,833

1

5,291

5,173

Operating profit (EBIT)

194

245 -21563

Adjusted EBITA

215

271 -21672

Adjusted EBITA margin, %

11.6

14.8

12.7

12.8

Full year

Oct-Sep

2020

14

8,019

7,249

2

7,133

7,015

457

23

813

707

661

2

917

906

12.9

12.9

Net income

138

163 -15

382

260

554

432

Earnings per share before dilution, SEK

0.75

0.89

2.09

1.41

3.02

2.35

Earnings per share after dilution, SEK

0.75

0.89

2.08

1.41

3.01

2.35

Average number of outstanding shares before dilution

47

182,758,253 181,292,993

182,221,307 181,595,988

181,916,112 181,545,456

Average number of outstanding shares after dilution
183,223,716 181,524,860
The KPI´s below includes discontinued operations **182,685,905 181,595,988

182,363,251 181,557,708

Net income

138

161

382

256

553

426

Earnings per share before dilution, SEK

0.75

0.87

2.09

1.39

3.01

2.32

Earnings per share after dilution, SEK

0.75

0.87

2.08

1.39

3.01

2.32

Cash flow from operating activities

-142

237

105

548

516

959

Net debt

2,536

2,694

2,536

2,694

2,536

2,116

2.2

2.5

2.2

1.9

Net debt/Adjusted EBITDA, LTM* Last twelve months** Discontinued operations is defined as the business connected to the Data Centers operations in Dison, Belgium, where the production ceased during fall 2019 but minor installation services reamained atcustomer sites during 2020. All income statement items in this report refers to Munters continuing operations, if not otherwise stated.

Third quarter, 2021»

CEO comments
Strong demand – supply chain constraints remain, impacting marginDuring the third quarter demand was strong, while the adjusted EBITA margin was still impacted by the supply
chain constraints and higher raw material prices as well as the time lag of the impact of our price increases, whichis in line with the communication in the second quarter report.

“Strong growth
in prioritizedmarket segments such asbattery and data
centers”

It is encouraging to see the particularly strong growth in prioritized market segments such as battery and data centers. This is key to us since our business wins in these segments ensure a robust market and technology position,and increase our potential aftermarket services sales. One of our most recent wins is the strategic turnkey project
to design and build a lithium battery laboratory in Scandinavia, which confirms Munters’ position as a leading supplier to manufacturers of lithium batteries. Another of our key strategic priorities is to grow the services businesswhere it is gratifying to see the accelerating development.
The constraints in the supply chain along with higher raw material prices and freight cost increases seen throughout the second quarter, continued to impact our business during the third quarter. The margin was also negatively
impacted by a changed business mix in AirTech with more larger projects and lower FoodTech volumes in China.
During the quarter, we have continued to implement price increases although, as communicated in the second
quarter report, most of our consecutive price increases implemented 2021 will come into effect next year due to theorder backlog and extended lead times. Because of these effects, the adjusted EBITA margin was weaker in thequarter. In the second quarter report, we anticipated the supply chain challenges to remain in the second half of2021 and we now expect these challenges to continue throughout the first half of 2022.
Continued focus on the execution of our strategy
Munters has strong, leading market positions and we work constantly to further strengthen our offering and to deliver on our strategy. The investments in new innovative solutions such as improved systems for the battery industry and data centers, and the Amino software for the poultry industry are key factors for our success in these segments. We also notice a growing interest in our more long-term technology solutions in areas such a carbon capture technology, next generation rotor media as well as AI driven software for the growing food industry. In addition, I’m pleased to see that we have successfully managed to reduce our number of product variations by 40%
over the past two years. This, in combination with continued investments in competence and ongoing projects toincrease capacity, efficiency improvements and ways of working in our operations, give us a solid foundation forsustained profitable growth.

Klas Forsström, President and CEO

We make our customers more sustainable
We see strong interest in Munters leading innovative and energy efficient climate solutions. Munters climate solutions are often mission-critical for our customers’ success and contribute to make their businesses more sustainable. This is a strong motivation for us in our daily work and I want to express my sincere thanks to all employees foryour dedicated work and contribution to our customers’ success.
Klas Forsström, President and CEO

Mid-term financial targets

Sustainability

Net sales growth: Annual growth in currency adjusted net salesof 5%, as of 2019, supplemented with selected add-on acquisitions. Performance Q3 2021: +3% (8)Progress in the third quarter 2021:

Adjusted EBITA-margin: An adjusted EBITA-margin of 14%.
Performance Q3 2021: 11.6% (14.8)
Capital structure: A ratio of net debt to adjusted EBITDA of
1.5x to 2.5x, and may temporarily exceed this level (e. g. as aresult of acquisitions). Performance Q3 2021: 2.2x (2.5x)
Dividend policy: Munters aim to pay an annual dividend
corresponding to 30-50% of its consolidated income after tax forthe period.
Dividend 2020: 30% (SEK 0.70 per share, totaling MSEK 127)
For full description of the dividend policy, see the Annual and Sustainability report
2020, page 8.

2People: Joined the UN Global Compact on Gender Equality initiative. New leadership program launched.
Environment: Sustainability training on Scope 1, Scope 2 andScope 3 CO2 emissions for top 50 managers. Additional initiative
launched to reduce CO2 emissions in factories.
Governance: Sustainability objectives and activities continuously integrated in strategy framework. Preparation for EU Taxonomy reporting in progress.

Please see the Munters Annual and Sustainability report 2020, pages 38-49, forfurther information on goals and outcome.

Third quarter, 2021

Financial performance
Q3
MSEK
Order intake
AirTechFoodTech
Other and eliminations

Net sales
AirTechFoodTech
Other and eliminations

Adjusted EBITA
AirTechFoodTech
Other and eliminations

Adjusted EBITA margin, %AirTechFoodTech

2021
2,295
1,802
502
-9
1,857
1,341
527
-11
215
174
61
-20
11.6
13.0
11.6

Jan-Sep
2020
1,919
1,354
575
-10
1,833
1,280
572
-18
271
198
95
-21
14.8
15.4
16.5

∆%
20
33
-13
-5
1
5
-8
-41
-21
-12
-35
-5

2021
6,407
4,781
1,657
-31
5,291
3,800
1,519
-28
672
560
180
-67
12.7
14.7
11.8

LTM Full year
2020
5,638
3,928
1,746
-37
5,173
3,614
1,595
-36
661
478
244
-62
12.8
13.2
15.3

∆% Oct-Sep
14
22
-5
-17
2
5
-5
-22
2
17
-26
9

8,019
5,953
2,107
-41
7,133
5,123
2,050
-40
917
771
245
-99
12.9
15.0
12.0

2020

Order intake Q3,

7,249
5,101
2,196
-48
7,015
4,937
2,126
-48
906
689
310
-94
12.9
14.0
14.6

currency adjusted change+21%
Net sales Q3,
currency adjusted change+3%Adj. EBITA-margin Q3

11.6%

ORDER INTAKE
July-September 2021
Order intake increased by +20%, a currency adjusted increase of +21%, mainly driven by strong growth in the Battery sub-segment within business area AirTech. The order backlog increased +32% to MSEK 3.525 (2,664), currency adjusted +34%.
Order intake in AirTech increased by +33%, a currency adjusted increase of +36%. The strong growth was mainly
driven by the Battery sub-segment with good development in both EMEA and APAC. In Data Centers we saw
strong demand from co-location operators in Americas. We also saw good growth in the Food sub-segment. The
Components segment showed significant growth, driven by strong demand in the market segments data centersand batteries through OEMs (Original Equipment Manufacturers). Mist Elimination grew slightly, driven by increased demand from the Power sub-segment, while other sub-segments remained weak. Services experienced
growth in all regions, with especially strong growth in APAC. The good development in Services is partly due to a
growing installed base and increased demand for upgrades of installed climate systems to more energy efficientsolutions.
FoodTech decreased by -13%, a currency adjusted decrease of -13%. Regions Americas and EMEA showed good
growth, offset by a decline in region APAC. Americas grew in the Dairy, Greenhouse and Swine sub-segments.
EMEA grew driven mainly by increased orders for controllers to the Broiler sub-segment in the US. Germany had
good growth mainly because of sales to CIS-countries (Commonwealth of Independent States). Demand in APAC
declined, negatively impacted by the weak swine market in China due to overcapacity and outbreak of the African
Swine Fever (ASF). The Korean and Japanese markets showed growth.

Quarterly order intake, 2021
(MSEK)
2,500

10,000

2,000

8,000

1,500

6,000

1,000

4,000

500

2,000

0

0
Q3

Q4

Q1

Q2

Quarter

Q3
LTM

Order intake per region Q3,2021 (MSEK)

January-September 2021
Order intake increased by +14%, a currency adjusted increase of +21%, mainly driven by strong growth in the Battery sub-segment in business area AirTech.
AirTech increased +22%, a currency adjusted increase of +31%. Excluding the non-core commercial business US,
exited in 2020, the increase was appr. +33% currency adjusted. Growth was mainly driven by the Battery sub-segment in APAC and EMEA, as well as Data Centers in the US and Food sub-segment. Components showed good
growth driven by strong demand in the market segment Batteries and Data Centers. Mist Elimination had flat orderintake, with growth within the Process sub-segment. Services grew driven by good development in APAC andAmericas.
FoodTech order intake decreased -5%, a currency adjusted increase of +1%. Region Americas experienced
growth in all segments, mainly driven by the Broiler, Layer and Dairy sub-segments in the US. EMEA grew driven
mainly by increased orders for controllers to the Broiler sub-segment in the US as well as good demand for Greenhouse solutions. In APAC order intake was weak, negatively impacted by the weak swine market in China due to
3

23%
44%

32%
Americas

EMEA

APAC

Third quarter, 2021

overcapacity and outbreak of the ASF and also on the back of the strong growth in the Swine segment in China inthe same period last year.

Quarterly net sales, 2021
(MSEK)
2,000

8,000

NET SALES

1,500

6,000

July-September 2021

1,000

4,000

Net sales increased +1%, a currency adjusted increase of +3%, driven mainly by an increase in the Battery subsegments and Services in business area AirTech. Services net sales amounted to 15% of total net sales.

500

2,000

AirTech increased +5%, a currency adjusted increase of +7%. Excluding net sales to the non-core commercial
business US, exited in 2020, currency adjusted net sales increased appr. +12%. Growth was driven mainly by theBattery sub-segment in APAC and Americas. The Pharma sub-segment showed good growth in the US. The Components segment had good growth driven mainly by the Battery and Data Center end customers. Both Data Centers US and Mist Elimination declined. Services grew overall, especially in Americas and APAC.
FoodTech decreased -8%, a currency adjusted decrease of -8%. Americas showed strong development in all subsegments. Sales declined in APAC negatively impacted by the weak swine market in China due to overcapacityand outbreak of the ASF and also on the back of the strong growth in the Swine segment in China in the same period last year. Region EMEA declined as a consequence of weaker sales to China. Excluding this effect EMEA wasin line with previous year.

0

0

Q3

Q4

Q1

Q2

Quarter

Q3
LTM

Net sales per region Q3,2021 (MSEK)

28%
41%

January-September 2021
Net sales increased +2%, a currency adjusted increase of +10%, driven by an increase in the Battery and Pharma
sub-segments and Services in business area AirTech. In addition, business area FoodTech had good growth in all
segments in the US. Services net sales amounted to 14% of total net sales.
AirTech increased +5%, a currency adjusted increase of +13%. Excluding net sales to the non-core commercial
business US, exited in 2020, currency adjusted net sales increased appr. +19%. Growth within the Battery subsegment in all regions, especially in APAC and Americas. In addition, the Pharma sub-segment grew in all regions,largely driven by Covid-19 relief efforts and production of test equipment in the US. Data Centers US declined andMist Elimination declined as the Power and Marine market continued to be weak. Services grew in region Americas
and APAC, whereas EMEA remained flat.
FoodTech decreased -5%, a currency adjusted increase with +1%, driven by good growth from all segments in
Americas both in the digital and equipment businesses, offset by a decline in APAC. Excluding sales to China, region EMEA grew slightly as the layer and greenhouse market experienced good demand mainly in Southern Europe.

4

31%

Americas

EMEA

APAC

Third quarter, 2021

RESULTS
Adjusted EBITA excludes Items Affecting Comparability, IAC, see pages 5-6 for disclosure of the IACs.

July-September 2021
The gross margin for the third quarter amounted to 30.3% (32.9), negatively impacted by the supply chain constraints, higher raw material prices and freight costs, changed business mix as well as the time lag of the impact of
our own price increases.
Adjusted EBITDA was MSEK 270 (326), corresponding to an adjusted EBITDA-margin of 14.6% (17.8). Depreciation amounted to MSEK -55 (-55), whereof depreciation of leased assets was MSEK -27 (-28).
Adjusted EBITA was MSEK 215 (271), corresponding to an adjusted EBITA-margin of 11.6% (14.8).
Adjusted EBITA for business area AirTech amounted to MSEK 174 (198), corresponding to an EBITA-margin of
13.0% (15.4). The margin decreased due to constraints in the supply chain, increased raw material prices andfreight costs as well as a changed business mix with more large projects.
Adjusted EBITA in business area FoodTech was MSEK 61 (95), corresponding to an adjusted EBITA-margin of
11.6% (16.5). The margin decreased due to constraints in the supply chain, increased raw material prices andfreight costs as well as lower volumes in China. The margin in the third quarter 2020 was strong as a consequenceof strong growth in the swine market in China.
Adjusted EBITA for Other amounted to MSEK -20 (-21). Other mainly includes costs for corporate staff functions.
Operating profit (EBIT) was MSEK 194 (245), corresponding to an operating margin of 10.4% (13.3). Amortization
and write-downs on intangible assets in the third quarter was MSEK -18 (-30), where MSEK -8 (-10) related toamortization of intangible assets from acquisitions.

January-September 2021
The gross margin for the first nine months was 32.7% (33.7), negatively impacted during the second and third
quarters by the supply chain constraints, higher raw material prices and freight costs as well as the time lag of the
impact of our own price increases.
Adjusted EBITDA was MSEK 831 (827), corresponding to an adjusted EBITDA-margin of 15.7% (16.0). Depreciation amounted to MSEK -159 (-165), whereof depreciation of leased assets was MSEK -79 (-84).
Adjusted EBITA amounted to MSEK 672 (661), corresponding to an adjusted EBITA-margin of 12.7% (12.8).
Adjusted EBITA for business area AirTech was MSEK 560 (478) corresponding to an adjusted EBITA-margin of
14.7% (13.2). The margin improved because of increased net sales, high utilization rates and efficiency improvements, partly offset by constraints in the supply chain, higher raw material prices, freight costs as well as the time
lag of our own price increases.
Adjusted EBITA in business area FoodTech amounted to MSEK 180 (244), corresponding to an adjusted EBITAmargin of 11.8% (15.3). The margin was negatively impacted by constraints in the supply chain, increased raw material prices and freight costs as well as lower volumes in China. The margin in 2020 was strong mainly because ofstrong growth in the swine market in China.
Adjusted EBITA for Other was MSEK -67 (-62). The increase in cost is related to strengthening of the corporate
staff functions.
Operating profit (EBIT) was MSEK 563 (457), corresponding to an operating margin of 10.6% (8.8). Amortization
and write-downs on intangible assets for the first nine months was MSEK -56 (-70), where MSEK -23 (-31) was
related to amortization of intangible assets from acquisitions.

ITEMS AFFECTING COMPARABILITY (IAC)
Items affecting comparability (IAC) on EBITA in the third quarter mainly related to activities for consultancy services connected with the strategy implementation within business area FoodTech of MSEK -4, with an aim to accelerate the digital journey and strengthen the equipment position. Business area AirTech incurred MSEK 1 in thethird quarter related to strategy implementation, which is a net of incurred consultancy services and depreciation
during the period and a release of an earlier provision for legal claims related to the exiting of the non-core commercial business in US back in 2020, no longer required.
Corona-related IACs had no impact in the third quarter on total level and other IACs of MSEK -1.

5

Quarterly gross margin, %
40%
35%
30%
25%
20%

Q3

Q4

Q1

Q2

Q3

Quarterly adjusted EBITDA
margin, %
20%

10%
0%
Q3

Q4

Q1

Q2

Q3

Quarterly adjusted EBITA
margin, %
20%

10%
0%
Q3

Q4

Q1

Q2

Q3

Quarterly EBIT margin, %
20%

10%
0%
Q3

Q4

Q1

Q2

Q3

Third quarter, 2021

IACs for the first nine months related to strategy implementation work within FoodTech of MSEK -79. The majorpart of the costs was recorded as provisions in the second quarter for severance, warranty claims, inventory etc.
Part of the costs related to consultancy services for the execution of the strategy implementation received during
the period. For business area AirTech the work with the strategy implementation launched last year has continued
and MSEK -21 has been recorded as IACs during the first nine months, mainly related to consultancy services forthe strategy implementation. Other incurred IACs of MSEK -4 related to strategy implementation.
In addition, Munters has had IACs of MSEK +52, mainly comprising a net of a final settlement in regard to a customer claim (Hunters New England Health District), of MSEK -9, and insurance compensation received linked tothe previous exchange of specific components at a customer site within the European Data Center business of
MSEK +61.
During the first nine months last year, Munters incurred IACs related to the implementation of a refined strategy of
MSEK -135, mainly within business area AirTech.
For further information, see the reconciliation of Munters alternative performance measures on page 22.

Q3
MSEK
Covid-19 related items
Implementation refined strategy
Other items affecting comparability
AirTechCovid-19 related items
Implementation refined strategy
Other items affecting comparability
FoodTech
Covid-19 related items
Implementation refined strategy
Other items affecting comparability
Other
Covid-19 related items
Implementation refined strategy
Other items affecting comparability
Total

2021
1
1
-1
1
-0
-4
-5
0
0
0
-3
-1
-3

Jan-Sep
2020
2
2
0
3
0
0
0
-0
-0
2
2
0
4

2021
1
-21
61
40
-1
-79
-1
-81
-4
-9
-12
-1
-104
52
-53

LTM
2020
6
-122
-6
-121
-0
-5
-5
1
-8
-7
6
-135
-6
-134

Oct-Sep
1
-8
73
67
-1
-79
6
-74
-6
-17
-23
1
-94
62
-31

2020
Full year
7
-109
7
-95
1
-6
6
1
1
-10
-8
-18
8
-124
5
-111

FINANCIAL ITEMS
Financial income and expenses for the third quarter amounted to MSEK -20 (-30). The financial expenses are positively impacted by a lower USD interest rate and lower interest-bearing debt compared to same quarter last year.
Interest expense on lease liabilities amounts to MSEK -4 (-4) in the third quarter. The average weighted interest
rate including fees per end of the quarter was 2.1% (3.0).
Financial income and expenses for the first nine months amounted to MSEK -70 (-110).

TAXES
Income taxes for the third quarter was MSEK -35 (-51). The effective tax rate in the third quarter was 20% (24).
Income taxes for the first nine months was MSEK -110 (-87). The effective tax rate for the first nine months was
22% (25).

Tax rate, 2021 %
40%

31%

24%
16%

20%

20%

19%

0%
Q3

6

Q4

Q1

Q2

Q3

Third quarter, 2021

EARNINGS PER SHARE
Net income, including the discontinued operation, attributable to Parent Company’s ordinary shareholders
amounted to MSEK 138 (159) for the third quarter. Earnings per share, before and after dilution, in the third quarter
2021 was SEK 0.75 (0.87). Earnings per share before dilution for the first nine months 2021 was SEK 2.09 (1.39).
Earnings per share after dilution for the first nine months 2021 was SEK 2.08 (1.39).
The average number of outstanding ordinary shares in the third quarter, for the purpose of calculating earnings per
share, was 182,758,253 before dilution and 183,223,716 after dilution.

EPS, 2021 SEK
1.5

1.0

0.87

0.92

0.87

0.75

0.45

0.5
0.0
Q3

Q4

Q1

Q2

Q3

FINANCIAL POSITION
Interest-bearing liabilities amounted to MSEK 2,693 (3,188). Cash and cash equivalents amounted to MSEK 440(790) as of September 30.
Munters refinanced the primary financing facilities during the second quarter of 2021 by establishing a new termloan of MUSD 165 and a Revolving Credit Facility (RCF) of MEUR 250, with final maturity date in June 2026. The
facilities are granted by a group of six banks and have no mandatory amortization requirement. The bank groupconsists of six banks; Svenska Handelsbanken AB (publ), BNP Paribas SA Bankfilial Sverige, Danske bank A/S,
Nordea Bank Abp filial Sverige, Skandinaviska Enskilda Banken AB (publ) och Swedbank AB (publ). The loan
agreement has one financial covenant, consolidated net debt in relation to adjusted EBITDA, with some adjustments made in accordance with the loan agreement. The accounting standard for leases, IFRS 16, does not affectthe covenant calculation according to the loan agreement definition and neither does the net pension liability.
Munters also has a backup facility of MSEK 750 maturing in 2023, which is secured by a guarantee from EKN (The
Swedish Export Credit Agency). The facility has the same financial covenant as primary financing facilities. Refinancing fees activated in the balance sheet related to the 2021 refinancing event amounts to MSEK 23, which willbe allocated to P&L over four years. For weighted interest cost see under Financial Items.
Net debt as of September 30 amounted to MSEK 2,536 compared to MSEK 2,209 at the end of June 2021. The
increase in the period relates to decreased cash flow from working capital as well as a negative FX-effect. For
more information about reconciliation of net debt and leverage see page 23.
The leverage ratio per end of September was 2.2x compared to 1.9x at the end of June 2021, increase mainly due
to lower cash balance from working capital and a higher gross debt due to FX rate.
At quarter end the term loan of MUSD 165 was fully drawn. Of the revolving credit facility an amount of MEUR 87(70) was utilized in EUR, SEK and USD. Available unutilized under the RCF MEUR 250 as of September 30
amounted to MEUR 163 (115) while the RCF MSEK 750 was entirely unutilized. Along with the main loan facility,
an amount of MSEK 12 (23) in local debt is outstanding in i.a. India.
Average capital employed for the last twelve months was MSEK 7,030 (7,557). Return on capital employed, including the discontinued operation, (ROCE) for last twelve months was 11.5% (7.3). Return on capital employed,
where EBIT plus financial income is adjusted for items affecting comparability (IAC) and average capital employedadjusted for goodwill, for the last twelve months was 28.6% (24.4).

CASH FLOW
Cash flow from operating activities was MSEK -142 (237) in the third quarter and MSEK 105 (548) for the first 9
months of 2021.
Changes in working capital had a negative impact on cash flow of MSEK -308 (-6) in the third quarter and a negative impact of MSEK -407 (22) for the first nine months. The negative effect on cash flow from working capital in thethird quarter mainly relates to less advances from customers, lower accounts payables and increased inventory.
For the first nine months the negative effect on cash flow from working capital mainly relates to increased inventory
levels but is also affected by increased accounts receivables and a decrease in advances from customers.
Total cash flow for the third quarter amounted to MSEK -244 (-28) and MSEK -548 (86) for the first nine months
2021. The total cash flow for the first nine months is affected by a payment of dividend to external shareholders in
May 2021 of MSEK -129, whereof MSEK -2 to an external minority to one of the subsidiaries, and a net amortization on external debt of MSEK -246.

7

Net Debt per quarter
2.5

2.2

3,000

1.9

1.9

1.9

Q4

Q1

Q2

2,000
1,000
0
Q3

Quarter

Q3
Leverage

ROCE %, 2021
15%

10%

7.3%

9.5%

11.3% 12.2% 11.5%

5%
0%
Q3

Q4

Q1

Q2

Q3

Third quarter, 2021

PARENT COMPANY AND OWNERSHIPThe parent company for the Group is Munters Group AB. Group supporting functions within Munters is accounted
for within Munters Group AB. The company holds shares in subsidiaries, internal receivables and liabilities, cash
and accounts payables. 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 0 (0).

EMPLOYEESThe number of permanent FTEs (Full Time Equivalents), at September 30, 2021 was 3,299 (3,202). The amount of
FTEs at September 30, 2021 in business area AirTech was 2,415 (2,281), in FoodTech 799 (850) and at Groupfunctions 85 (70). The number of permanent FTEs in FoodTech has been impacted by a re-classification of 70
FTEs to temporary employees.

OUTSTANDING SHARESTen largest shareholders

As of 30 Sep
Wallenberg Investments
ODINSwedish
Funds NationalFirst
Pension Fund
Swedbank
RoburNational
Funds
FourthSwedishPension Fund
Columbia Threadneedle
Handelsbanken Funds
C WorldWide AssetManagement
La Financière de l'Echiquier
Vanguard

Total (%)
27.2
9.0
8.4
7.6
5.3
3.7
3.3
2.7
2.2
1.8

As of September 30, 2021, Munters held 1,811,750 treasury shares of the total outstanding shares of 184,457,817.

DIVIDEND
During 2020 Munters established a solid base with increased profitability and a strengthened capital structure. The
leverage was at 1.9x at year-end, which is within the mid-term target range for net debt to adjusted EBITDA of
1.5x-2.5x. A dividend of SEK 0.70 (0.0) per share was paid in May 2021, in total MSEK 127. This represented 30
per cent of the net income 2020.

OTHER EVENTSContinued implementation of the strategy, taking the next steps in business area FoodTech – In May it wasannounced as part of the strategy implementation that business area FoodTech has completed a strategic review
outlining measures to strengthen its digital offering and climate solutions part of the business. Implementation has
started in the second quarter 2021. Costs are estimated to approximately MSEK 140, of which approximately
MSEK 110 are estimated to have a cash flow impact. In addition, there will be capex investments made amounting
to an estimated MSEK 20. The full-year positive impact on adjusted EBITA in 2023 is estimated to be approximately MSEK 70.
Launch of Munters DSS Pro: the next level of dehumidification – Munters announced in July the DSS Pro thatis an evolutionary leap forward from the market-leading DSS. Suitable for indoor or outdoor installation, the DSS
Pro is equipped with our new AirPro casing. This new enclosure offers significantly improved durability, reduced air
leakage, and lower energy consumption.
Munters signs strategic turnkey project to design and build Scandinavian lithium battery laboratory – In
September, Munters signed a strategic turnkey project to design and build a lithium battery laboratory in Scandinavia. This is yet another confirmation of Munters’ position as a leading supplier to manufacturers of lithium batteries.
The agreement entails that Munters will design and build a full-scale laboratory for lithium batteries in Scandinavia.
A key requirement for the client was Munters’ capabilities to design the facilities along with competences to secure
an efficient construction execution. This project will be delivered over the coming six months and the order value isestimated to MSEK 83.5.

EVENTS AFTER THE CLOSE OF THE PERIODNew Group Vice President HR and Sustainability – In October, it was announced that Grete Solvang Stoltz, currently Senior Vice President Human Resources and Sustainability at LKAB, will join the Munters’ management
team as Group Vice President HR and Sustainability. Grete Solvang Stoltz has extensive experience in running
global strategic programs with a focus on corporate culture as well as organizational and sustainable development.
She has previously held a number of highly qualified HR positions at LKAB and SCA.

8

Munters signs strategic turnkey project
to design and build Scandinavian lithium battery laboratory

Third quarter, 2021

AirTechBusiness area AirTech is a global leader in energy-efficient air treatment for industrial and commercial applications. We offer solutions formission-critical processes that require exact control of moisture and temperature, 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.

■ Order intake in AirTech increased mainly driven by the Battery sub-segment with good development in both EMEA and APAC. Strong demand in Data
Centers in Americas and good growth in the Food and Components sub-segments. Mist Elimination grew slightly and Services experienced growth in all
regions.
■ Net sales increased driven mainly by strong growth in the Battery sub-segment in APAC and Americas. The Pharma sub-segment showed good growthin the US. The Components segment had good growth driven mainly by the Battery and Data Center end customers. Both Data Centers US and Mist
Elimination declined. Services grew overall, especially in Americas and APAC.
■ The adjusted EBITA-margin decreased due to constraints in the supply chain, increased raw material prices and freight costs as well as a changed
business mix with more large projects.
Q3
MSEK
Order intake
GrowthNet sales
Growthof which organic growthof which currency effects

Operating profit (EBIT)
Adjusted EBITA
GrowthAdjusted EBITA margin, %

2021
1,802
33%
1,341
5%
7%
-2%
161
174
-12%
13.0

Jan-Sep
2020
1,354
15%
1,280
-1%

∆%
33

185
198
19%
15.4

-13
-12

5

2021
4,781
22%
3,800
5%
13%
-8%
578
560
17%
14.7

LTM Full year
2020 ∆% Oct-Sep
3,928
22
5,953
1%
13%
3,614
5
5,123
-4%
3%

2020
5,101
-3%
4,937
-4%

331
478
0%
13.2

565
689
4%
14.0

75
17

812
771
16%
15.0

FoodTechBusiness area FoodTech is one of the world’s leading suppliers of innovative, energy-efficient climate systems for livestock farming andgreenhouses, as well as software for controlling and optimizing the entire food production value chain. Our solutions increase productivity while
contributing to sustainable food production, where strict requirements are placed on quality, animal health and food safety.

■ Order intake in regions Americas and EMEA showed good growth, offset by a decline in region APAC. Americas grew in the Dairy, Greenhouse andSwine sub-segments. EMEA grew driven mainly by increased orders for controllers to the Broiler sub-segment in the US. Demand in APAC was
negatively impacted by the weak swine market in China.
■ Net sales decreased in the quarter. Americas showed strong development in all sub-segments. Sales declined in APAC on the back of ASF and astrong swine market in China last year. Region EMEA declined as a consequence of weaker sales to China. Sales to European markets were in linewith previous year.
■ Adjusted EBITA-margin declined due to constraints in the supply chain, increased raw material prices and freight costs as well as lower volumes in
China. The margin in the third quarter 2020 was strong as a consequence of strong growth in the swine market in China.
Q3
Jan-Sep
LTM Full year
MSEK
Order intake
GrowthNet sales
Growthof which organic growthof which currency effects

Operating profit (EBIT)
Adjusted EBITA
GrowthAdjusted EBITA margin, %

9

2021
502
-13%
527
-8%
-8%
-0%
46
61
-35%
11.6

2020
575
12%
572
7%

∆%
-13

90
95
11%
16.5

-49
-35

-8

2021
1,657
-5%
1,519
-5%
1%
-6%
72
180
-26%
11.8

2020 ∆% Oct-Sep
1,746
-5
2,107
9%
-6%
1,595
-5
2,050
2%
-1%

2020
2,196
5%
2,126
5%

224
244
13%
15.3

291
310
12%
14.6

-68
-26

138
245
-20%
12.0

Third quarter, 2021

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

Purpose■■■■■For customer success and a healthier planet

3,300 employees
30 countries with sales and manufacturing
17 production units
22% female leaders
Two business areas: AirTech and FoodTech

Curiosity and a drive to create pioneering
technologies are part of our DNA. Our climate
solutions are mission-critical to our customers’
success and contribute to a more sustainable
planet.

In 2020 AirTech generated 70% of the total net
sales of Munters and FoodTech 30%.

The strategy of Munters
Munters has a strong position in most of our markets. We see major opportunities to improve 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 our goals. Our overarching strategic priorities show whichareas we regard as important to our success. For each strategic priority we have clear action plans and ambitions what we want to achieve. Sustainability is apriority issue reflected in every strategic priority.
People - The employees at Munters are the hub of our business. Through collaboration and a passion for
creating sustainable solutions for our customers and partners, we contribute to our customers’ success and abetter world.
Customers - We closely cooperate our customers. We try not only to understand their needs today, but also in
the future. Our expertise is built through unique insight into our customers’ businesses and production
processes. Munters works every day to deliver value over and above our customers’ expectations.
Innovation - We at Munters work in a structured way to optimize innovation in the organization. We continuallymonitor technological developments in the market and work closely with our customers to understand theirneeds. We also work with other institutions that strengthen our competence and create value for customers. By
continuously questioning and improving how we work, we create sustainable solutions, technologies andbusiness models for the future.
Market - Munters is active around the world in a market driven by strong trends in sustainability and digitization. We focus resources on strengthening our position in areas where we can be a market leader. For
Munters, a market leader not only has a leading position but also higher profitable growth than others in the industry.
Excellence in everything we do - We strive for quality and efficiency in everything we do. We work with continuous improvements in every area. We prioritize
and focus on selected investments and areas of improvement. We follow up, learn, correct and improve.
Sustainability
Sustainability is one of the most important drivers for Munters’ strategy today and in the future. Everything we do has to be sustainable for all our stakeholders
and the environment. Our medium-term financial targets are important to create room for investments in the future. As we work toward these targets, we makevarious decisions and act in the best way to achieve our ambitions. These ambitions contain priorities on resource efficiency, responsible business practices andpeople & society. These three parts today constitute the framework for Munters’ sustainability agenda.

10Third quarter, 2021¨

11

Third quarter, 2021

Quarterly overview Group and Segments
Group
MSEK
Order backlog
Order intake
Net sales
Operating profit (EBIT)
Net income
Amortization and write-down
Items affecting comparability (IAC)
Adjusted EBITA
Adjusted EBITA margin, %2021

External order backlog
Order intake
External net sales
Transactions between segments
Operating profit (EBIT)
Amortization and write-down
Items affecting comparability (IAC)
Re-allocation of internal services
Adjusted EBITA
Adjusted EBITA margin, %

2019

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Q3

3,525
2,295
1,857
194
138
-18
-3
215
11.6

3,018
2,118
1,822
147
84
-21
-91
259
14.2

2,769
1,995
1,612
222
160
-17
41
198
12.3

2,253
1,611
1,841
250
172
-17
22
245
13.3

2,664
1,919
1,833
245
163
-30
4
271
14.8

2,660
1,870
1,773
103
39
-20
-138
260
14.7

2,808
1,849
1,566
110
57
-20
−
130
8.3

2,307
1,845
1,842
159
76
-29
-42
229
12.5

2,440
1,680
1,813
174
100
-32
-42
248
13.7

AirTech
MSEK

2020

2021

2020

Q2 Full year

Q1

Q4

Q3

Q2

Q1

Q4

Q3

2,837
1,802
1,338
3
161
-4
1
-10
174
13.0

2,318
1,495
1,264
1
185
-4
-15
−
205
16.2

2,129
1,483
1,193
2
231
-4
54
−
181
15.1

1,737
1,172
1,321
2
234
-4
26
0
211
15.9

2,025
1,354
1,270
9
185
-16
3
−
198
15.4

2,003
1,231
1,205
2
51
-5
-125
−
181
15.0

2,186
1,343
1,127
0
94
-5
−
−
100
8.8

1,780
1,361
1,378
4
159
-9
-19
1
186
13.4

1,886
1,179
1,286
1
151
-5
-11
−
167
12.9

2020

2,253
7,249
7,015
707
432
-87
-111
906
12.9

2020

Q2

2021

Q2 Full year
2,496
1,840
1,877
185
104
-41
-36
262
13.9

2019

Q3

FoodTech

2020

1,926
1,264
1,323
1
173
-13
-14
−
199
15.1

1,737
5,101
4,924
13
565
-30
-95
0
689
14.0

2019

2020

MSEK

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Q3

Q2 Full year

External order backlog
Order intake
External net sales
Transactions between segments
Operating profit (EBIT)
Amortization and write-down
Items affecting comparability (IAC)
Re-allocation of internal services
Adjusted EBITA
Adjusted EBITA margin, %

687
502
519
8
46
-6
-5
-4
61
11.6

700
636
558
9
-6
-10
-75
−
80
14.1

640
520
419
6
32
-6
-1
−
39
9.1

516
450
520
11
67
-5
6
0
66
12.3

640
575
563
9
90
-5
0
−
95
16.5

656
656
568
7
87
-5
-6
−
98
17.1

622
515
440
9
47
-5
−
−
52
11.5

526
491
464
5
55
-4
-3
−
61
13.0

554
513
527
7
75
-4
-6
−
85
15.9

570
582
554
8
74
-4
-8
−
85
15.2

Other and eliminations

2021

2020

516
2,196
2,091
35
291
-20
1
0
310
14.6

2019

2020

MSEK

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Q3

Q2 Full year

Order intake
Transactions between segments
Operating profit (EBIT)
Amortization and write-down
Items affecting comparability (IAC)
Re-allocation of internal services
Adjusted EBITA

-9
-11
-13
-7
0
14
-20

-14
-10
-33
-7
0
−
-26

-8
-8
-41
-7
-12
−
-21

-11
-12
-50
-8
-10
-0
-32

-10
-18
-31
-10
-0
−
-21

-17
-8
-36
-10
-7
−
-19

-10
-9
-32
-10
−
−
-22

-8
-9
-55
-16
-21
-1
-17

-13
-9
-52
-24
-24
−
-3

-7
-9
-62
-24
-14
−
-23

12

-48
-48
-149
-37
-18
-0
-94

Third quarter, 2021

Discontinued operation
2021

2020

2019

2020

MSEK

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4

Q3

Q2 Full year

External order backlog
Order intake
External net sales
Operating profit (EBIT)
Amortization and write-down
Items affecting comparability (IAC)
Adjusted EBITA

−
−
−
−
−
−
−

−
−
−
−
−
−
−

−
−
−
−
−
−
−

−
−
-0
-2
−
−
-2

−
-1
13
-3
−
−
-3

−
1
3
-1
−
−
-1

−
−
-0
0
−
−
0

2
4
9
-65
0
-45
-20

8
-3
38
-341
3
-325
-19

−
3
87
-20
-0
-3
-17

13

−
16
-6
-6

Third quarter, 2021

Condensed income statement
Q3

Jan-Sep

LTM

Full year

MSEK

2021

2020

2021

2020

Oct-Sep

2020

Net sales
Cost of goods sold
Gross profit

1,857-1,295562

1,833-1,231
603

5,291-3,5591,732

5,173-3,4301,743

7,133-4,794
2,338

7,015-4,6652,350

Selling expenses
Administrative costs
Research and development costs
Other operating income and expenses
Operating profit

-214
-129
-40
15
194

-193
-118
-54
7
245

-622
-405
-117
-25
563

-622
-394
-145
-125
457

-817
-550
-157
-1
813

-818
-538
-186
-101
707

Financial income and expenses
Profit/Loss after financial items

-20
174

-30
215

-70
492

-110
347

-116
697

-156
552

Tax
Net income for the period from continuing operations

-35
138

-51
163

-110
382

-87
260

-143
554

-120
432

-

-3

-

-4

-2

-6

Net income for the period

138

161

382

256

552

426

Attributable to Parent Company shareholders
Attributable to non-controlling interests

138
1

159
2

380
2

253
3

548
5

420
6

Net income from discontinued operations

Average number of outstanding shares before dilution*
Average number of outstanding shares after dilution*

182,758,253 181,292,993
183,223,716 181,524,860

182,221,307 181,595,988
182,685,905 181,595,988

181,916,112 181,545,456
182,363,251 181,557,708

Earnings per share for net income for the period from continuing
operations attributable to the ordinary equity holders of thecompany:
Earnings per share before dilution, SEK
Earnings per share after dilution, SEK

0.75
0.75

0.89
0.89

2.09
2.08

1.41
1.41

3.02
3.01

2.35
2.35

Earnings per share for net income for the period attributable tothe ordinary equity holders of the company:
Earnings per share before dilution, SEK
Earnings per share after dilution, SEK

0.75
0.75

0.87
0.87

2.09
2.08

1.39
1.39

3.01
3.01

2.32
2.32

Other comprehensive income
Other comprehensive income that may be reclassified to profit or loss
in subsequent periods:
Exchange-rate differences on translation of foreign operations
Other comprehensive income not to be reclassified to profit or loss insubsequent periods:
Actuarial gains and losses on defined-benefit pension obligations,
Income tax effect not to be reclassified to profit or loss
Other comprehensive income, net after tax

83

-77

182

-93

-50

-325

-21
-1
61

-15
4
-88

23
-10
195

-5
1
-96

21
-10
-39

-7
1
-331

Total comprehensive income for the period
Attributable to Parent Company shareholders
Attributable to non-controlling interests

199
198
1

72
72
0

577
576
1

159
157
2

513
509
4

95
91
4

*Excluding shares held in own custody.

14

Third quarter, 2021

Condensed balance sheet
MSEK

2021-09-30

2020-09-30

2020-12-31

NON-CURRENT ASSETS
Goodwill
Patents, licenses, brands, and similar rights
Buildings and land
Plant and machinery
Equipment, tools, fixtures and fittings
Construction in progress
Financial assets
Deferred tax assets
Total non-current assets

4,162
1,517
225
471
169
74
19
252
6,889

4,258
1,427
239
515
158
43
19
242
6,902

3,952
1,356
209
467
161
41
19
246
6,451

CURRENT ASSETS
Raw materials and consumables
Products in process
Finished products and goods for resale
Projects in progress
Advances to suppliers
Accounts receivable
Prepaid expenses and accrued income
Derivative instruments
Current tax assets
Other receivables
Cash and cash equivalents
Total current assets

506
164
304
11
15
1,087
437
-1
67
83
440
3,113

389
154
264
7
14
1,044
403
−
48
92
790
3,206

350
118
215
3
5
935
376
−
55
96
970
3,123

TOTAL ASSETS

10,002

10,107

9,574

ASSETS

15

Third quarter, 2021

Condensed balance sheet
MSEK

2021-09-30

2020-09-30

2020-12-31

Shareholders' equity

4,235

3,744

3,746

Non-controlling interests
Total equity

3
4,237

0
3,744

5
3,751

2,583
293
50
137
389
3,452

3,076
298
35
138
397
3,944

2,690
299
33
132
371
3,525

Interest-bearing liabilities
Advances from customers
Accounts payable
Accrued expenses and deferred income
Derivative instruments
Current tax liabilities
Other liabilities
Provisions for pensions and similar commitments
Other provisions
Total current liabilities

110
503
589
780
2
42
102
9
176
2,312

112
550
605
694
6
45
151
9
246
2,419

96
509
529
742
2
52
111
10
248
2,299

TOTAL EQUITY AND LIABILITIES

10,002

10,1079,574

2021-09-30

2020-09-30

2020-12-31

Opening balance
Total comprehensive income for the period
Exercised share options
New share issue
Change in non-controlling interest
Put/call option related to non controlling interests
Dividends paid
Repurchase of shares
Share option plan inc deferred tax
Other
Closing balance

3,751
577
40
−
-1
-3
-129
−
2
1
4,237

3,627
159
−
−
0
-3
−
-43
4
−
3,744

3,627
95
−
61
0
-4
−
-43
14
−
3,751

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

4,235
3

3,744
0

3,746
5

EQUITY AND LIABILITIESEQUITYNON-CURRENT LIABILITIESInterest-bearing liabilities
Provisions for pensions and similar commitments
Other provisions
Other liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIESCONDENSED STATEMENT OF CHANGES IN EQUITY
MSEK

16

Note

Third quarter, 2021

Condensed cash flow statement
Q3
MSEK

Jan-Sep

LTM

Full year

2021

2020

2021

2020

Oct-Sep

2020

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

194

242

563

453

811

701

86
9

85
27

228
12

236
31

301
2

308
20

-55
234

-37
317

-62
740

-15
704

-48
1,065

-1
1,029

Paid financial items

-18

-34

-88

-114

-126

-151

Taxes paid
Cash flow from operating activites beforechanges in working capital

-49

-41

-140

-65

-177

-102

166

243

511

525

763

776

Cash flow from changes in working capital

-308

-6

-407

22

-246

183

Cash flow from operating activities

-142

237

105

548

516

959

Business acquisitions
Sale of tangible fixed assets
Sale of intangible fixed assets
Investment in tangible assets
Investment in intangible assets
Cash flow from investing activities

1
-36
-45
-79

1
0
0
-24
-21
-43

2
-94
-147
-239

-6
0
0
-85
-60
-150

-3
15
2
-122
-191
-298

-9
14
2
-114
-103
-209

FINANCING ACTIVITIESNew share issue
Exercised share options
Loan raised
Amortization of loans
Repayment of lease liabilities
Repurchase of shares
Dividends paid
Cash flow from financing activities

8
10
-13
-27
0
-23

4
-156
-28
-43
-0
-223

40
2,298
-2,545
-78
-129
-413

326
-511
-83
-43
0
-311

61
40
2,301
-2,733
-106
-129
-565

61
329
-698
-112
-43
-463

Cash flow for the period

-244

-28

-548

86

-347

287

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

680
4
440

826
-8
790

970
18
440

722
-17
790

790
-3
440

722
-38
970

OPERATING ACTIVITIESINVESTING ACTIVITIESOperating profit in prior period includes the discontinued operation. Isolated cash flow from the discontinued operations is disclosed in a separate note, seepage 22.

17

Third quarter, 2021

Parent company
CONDENSED INCOME STATEMENT
Q3
MSEK

Jan-Sep

LTM

Full year

2021

2020

2021

2020

Oct-Sep

2020

Net sales
Gross profit/loss
Administrative costs
Other operating expenses
Profit/Loss before interest and tax (EBIT)

−
-0
-4
13
9

−
−
-3
1
-2

−
0
-8
11
3

−
−
-17
-3
-20

−
0
-14
9
-5

−
−
-22
-5
-27

Financial income and expenses
Profit/Loss after financial items

-0
8

-0
-2

0
2

0
-20

-0
-5

-0
-28

Group contributions
Profit/Loss before tax

−
8

−
-2

−
2

−
-20

23
18

23
-5

Tax
Net income for the period

3
11

−
-2

3
5

−
-20

5
22

2
-3

CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Q3
MSEK
Profit/Loss for the period
Other comprehensive income, net after tax
Comprehensive income for the period

18

Jan-Sep

LTM

Full year

2021

2020

2021

2020

Oct-Sep

2020

11
−
11

-2
−
-2

5
−
5

-20
−
-20

22
−
22

-3
−
-3

Third quarter, 2021

Parent company
CONDENSED BALANCE SHEET
MSEK

2021-09-30

2020-09-30

2020-12-31

4,096
7
4,103

4,096
0
4,096

4,099
4
4,104

0
1
1
29
0
31

−
0
0
47
0
48

−
0
1
27
62
90

4,133

4,144

4,194

2021-09-30

2020-09-30

2020-12-31

6
4,135
-56
5
4,090

6
4,074
26
-20
4,086

6
4,135
33
-3
4,171

NON-CURRENT LIABILITIESProvisions for pensions and similar commitments
Total non-current liabilities

2
2

1
1

1
1

CURRENT LIABILITIES
Accounts payable
Accrued expenses and deferred income
Liabilities to subsidiaries
Other liabilities
Other provisions
Total current liabilities

2
16
18
5
−
41

0
15
39
3
−
57

1
21
−
−
−
22

4,133

4,144

4,194

ASSETSNON-CURRENT ASSETS
Participations in subsidiaries
Other financial assets
Total non-current assets
CURRENT ASSETS
Other current receivables
Prepaid expenses and accrued income
Current tax assets
Receivables from subsidiaries
Cash and cash equivalents
Total current assets
TOTAL ASSETSMSEKEQUITY AND LIABILITIESEQUITY
Share capital
Share premium reserve
Profit brought forward
Income for the period
Total equity

TOTAL EQUITY AND LIABILITIES

19

Third quarter, 2021

Other disclosures
ACCOUNTING POLICIESThis 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 andthe Swedish Annual Accounts Act. The accounting principles appliedcorrespond to those presented in the Annual- and Sustainability report2020 (Note 1). As from the first quarter 2021, the cash flow statement
has been changed in regards to interest paid on leased liabilities (priorperiods restated). Previously the item "Repayment of leasing liabilities"
included paid interest. The correction has resulted in that “Cash flowfrom operating activities” has decreased and “Financing operations” areimproved compared with previous reporting, impacting third quarter lastyear with MSEK 4.

working according to an EHS Management Program. The purpose of the
EHS Program is to ensure regulatory compliance, actively prevent injuries, and reduce the impact that our business has on the environment.

RISKS AND UNCERTAINTIESThe 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 theGroup. A risk assessment is carried out on an annual basis and the purpose is to identify and address the most important risks.

DEFINITION OF KEY FINANCIAL
INDICATORS

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 offailure to comply with relevant regulations in the business ethics area,
e.g. anti-bribery rules.

The Group presents certain financial metrics in the Interim Report thatare not defined in accordance with IFRS. The Group is of the opinion
that these metrics provide valuable complementary information, in thatthey enable an evaluation of the Group’s performance. The financial
metrics are calculated in accordance with the definitions presented on
page 125 in the Annual and Sustainability Report 2020.

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

TRANSACTIONSWITH RELATED PARTIESAt the annual general meeting in May 2021 it was resolved in accordance with the Board’s proposal on the implementation of a performancebased long-term incentive program (“LTIP 2021” or the “Program”). Previous years long-term incentive programs have been share based,(stock options), however the LTIP 2021 is a cash based program vestingover a three-year period. The participants are expected to invest the net
payout in Munters shares until reaching a defined level of investment.
The Board of Directors nominates the CEO and Munters Group Management, and a total of 62 additional participants has been nominatedby the respective management member. Each group will have max opportunity based on the participant’s percentage of the current (2021)
gross annual base salary.

ENVIRONMENTAL IMPACT
AND ENVIRONMENTAL POLICY
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 iscommitted to constant vigilance regarding the environmental impact of
its operations. Munters is committed to complying with all laws and tocontinuously promoting improvements in all Environment, Health &Safety (EHS) aspects, wherever Munters conducts business. Muntersconstantly seeks opportunities to reduce risk and to create a safer,
healthier, more diverse and more environmentally friendly workplace forour employees, customers, communities, and the overall environment.
Munters’ manufacturing facilities all over the world are committed to20

During 2021 the Covid-19 pandemic continued to have an impact on ourbusiness, albeit in a mixed way. In some areas it led to increased demand at the same time as constraints in the supply chain during the second and third quarters caused longer lead times and sourcing related
production disturbances. Costs increased for raw material and freights.
We implemented consecutive price increases in 2021. These will comeinto effect over the coming quarters with the majority effect next year
due to extended lead times. In the second quarter report, we predicted
the supply chain challenges to remain in the second half of 2021 and we
now expect these challenges to continue throughout the first half of2022.
A more detailed description of the Group’s risks and how they are managed can be found in the Annual- and Sustainability report 2020 on
pages 50-55.

ALLOCATION OF NET SALES
The majority of customer contracts within Munters business segments
AirTech and FoodTech fulfill the requirements to recognize net sales ata point in time, however there are a number of customer contracts within
the segments that requires to recognize net sales over time, especiallyin AirTech segment Data Centers, which is reflected in the below matrix.
In addition to unit/equipment sales, Munters provides different kinds ofservices to customers such as installation, commissioning, startup andmaintenance. Net sales from services are recognized over time as these
services are performed. The services transferred over time in the matrix
below is not equivalent to the net sales from Services mentioned on thebusiness segment pages earlier in this interim report. This is due to thefact that part of the net sales within Services are recognized at a point in
time, such as spare parts. Net sales from the discontinued operation is
all recognized over time.

Third quarter, 2021

Q3 2021MSEK
Goods transferred at a point in time
Goods transferred over time
Services transferred over time
Total
whereof related to the discontinued operation
Total net sales from continuing operations

AirTech
905
317
116
1,338
−
1,338

Jan-Sep 2021

FoodTech
452
28
40
519
−
519

Total
1,357
344
155
1,857
−
1,857

AirTech
2,507
970
317
3,795
−
3,795

Q3 2020
SEKm
Goods transferred at a point in time
Goods transferred over time
Services transferred over time
Total
whereof related to the discontinued operation
Total net sales from continuing operations

AirTech
716
470
98
1,283
13
1,270

FoodTech
1,311
74
112
1,496
−
1,496

Total
3,818
1,044
429
5,291
−
5,291

Jan-Sep 2020

FoodTech
505
17
41
563
−
563

Total
1,221
486
139
1,846
13
1,833

AirTech
2,229
1,143
246
3,619
16
3,602

FoodTech
1,410
52
109
1,571
−
1,571

FoodTech
3,639
1,195
355
5,190
16
5,173

FAIR VALUE OF FINANCIAL
INSTRUMENTS
MSEK
Opening balance
Payments
Discounting
Exchange-rate differences
for the period
Closing balance

2021-09-30 2020-09-30 2020-12-31
121

142

142

−
3

-9
3

-9
4

9
132

-5
131

-16
121

The Group’s put/call acquisition option, recognized at fair value in thestatement of financial position, are measured according to IFRS 9 andare categorized in level 3 in the fair value hierarchy. The opening balance for the period relates to the put/call option from the acquisition of
MTech Systems in 2017, which is based on EBITDA for the 12 months
prior to execution and matures in January 2023. The change in the period relates to a discounting effect and currency translations on theput/call option.

The Group’s derivatives, recognized at fair value in the statement of financial position, are measured according to IFRS 9 and are categorizedin level 2 in the fair value hierarchy. The derivatives amounted to MSEK
-1 (0) in financial assets and to MSEK 2 (6) in financial liabilities.

Munters deems that the interest rate on interest-bearing liabilities are inline with market terms at September 30, 2021, and the fair value at theend of the reporting period therefore in all material aspects corresponds
to the carrying amount.

DISCONTINUED OPERATIONS

tions with the unions. The production ceased in 2019 but minor installation services remained at customer sites during 2020. The table below
shows the income statement for the discontinued operation as well as
the cash flow from operating activities.

On September 9, 2019 Munters decided to close its European Data
Center factory in Dison, Belgium, following the finalization of negotia-

21

Third quarter, 2021

Q3
MSEK

Jan-Sep

LTM

Full year

2021

2020

2021

2020

Oct-Sep

2020

Net sales
Cost of goods sold
Gross profit

−
−
−

13
-5
8

−
−
−

16
-9
7

-0
-1
-1

16
-11
6

Selling expenses
Administrative costs
Research and development costs
Other operating income and expenses
Operating profit

−
−
−
−
−

-9
-1
0
−
-3

−
−
−
−
−

-9
-1
0
−
-4

2
-1
0
-2
-2

-8
-2
0
-2
-6

Financial income and expenses

−

-0

−

-1

0

-0

Profit/Loss after financial items

−

-3

−

-4

-2

-6

Tax
Net income for the period from discontinued operations

−

−

−

−

0

0

−

-3

−

-4

-2

-6

Cash flow from operating activities

-1

-33

35

-35

-5

-75

RECONCILIATION OF ALTERNATIVEPERFORMANCE MEASURES

connected with a previous customer claim that was finally settled in February 2021, and received an insurance compensation linked to an exchange of specific components at a customer site within the European
Data Center business (where costs for the exchange amounted to
MSEK 116, reported during the third quarter of 2019). In addition to thisMunters had minor Covid-19 related expenses and government grantsthat were adjusted for comparability.

Below is a reconciliation of Munters adjusted performance measuresfrom items affecting comparability. In the third quarter of 2021, these
items mainly originated from the activities connected with the strategy
implementation within business area FoodTech, communicated througha press release in May, 2021, as well as from implementation activities
related to the refined strategy within AirTech communicated during lastyear.

During the third quarter as well as the first nine months last year
Munters mainly incurred IACs related to the implementation of the refined strategy within AirTech and Corona-related IACs.

For the first nine months, in addition to the above, Munters incurredcosts related to a legal case outside the ordinary business operation

The reconciliation below does not include the discontinued operation.

Q3
MSEK
Adjusted EBITDA
Amortizations and write-downs of tangible assets
Adjusted EBITA
Amortizations and write-downs of intangible assets
Adjusted operating profit (EBIT)
Restructuring activities
Gains/losses from sale of fixed assets
Legal cases outside the ordinary business operation
Proceeds insurance reimbursements from legal cases
Received government grants/government assistanceCorona related expenses
Earned refund of sales tax in Brazil
Other
Operating profit (EBIT)

22

Jan-Sep

Full year

2021-09-30

2020-09-30

2021-09-30

2020-09-30

LTM

Jan-Dec

270
-55
215
-18
198
-3
0
1
0
2
-1
0
-1
194

326
-55
271
-30
241
2
0
0
0
5
-3
0
0
245

831
-159
672
-52
620
-109
0
-8
61
3
-3
0
-1
563

827
-165
661
-70
591
-135
0
-6
0
15
-8
0
0
457

1,131
-215
917
-69
848
-98
6
-16
61
8
-8
13
-1
813

1,126
-221
906
-87
818
-124
6
-14
0
20
-12
13
0
707

Third quarter, 2021

RECONCILIATION OF NET DEBT
AND LEVERAGE
The reconciliation of net debt and leverage below includes the discontinued operation.

MSEK

2021-09-30

2020-09-30

2020-12-31

CURRENT ASSETS
Cash and cash equivalents

-440

-790

-970

NON-CURRENT LIABILITIESInterest-bearing liabilities, excluding leases
Interest-bearing lease liabilities
Provisions for pensions

2,313
270
273

2,799
277
281

2,440
250
285

CURRENT LIABILITIESInterest-bearing liabilities, excluding leases
Interest-bearing lease liabilities
Accrued expenses
Provisions for pensions

11
98
4
6

23
89
9
6

14
82
9
6

Total Net debt
Operating profit (EBIT)
Depreciations
Amortization and write-down
EBITDA
Items affecting comparability

2,536
811
-228
-73
1,112
-18

2,694
547
-219
-99
865
-219

2,116
701
-221
-87
1,010
-111

Adjusted EBITDA, LTM

1,129

1,085

1,121

2.2

2.5

1.9

Net debt/Adjusted EBITDA, LTM

23

Third quarter, 2021

This is a translation from the original review report in Swedish.

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, 2021 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

Rickard Andersson
Authorized Public Accountant

24

Third quarter, 2021

INFORMATION AND REPORTING DATESContact person:
Åse Lindskog, Interim Head of Investor Relations
Phone: +46 (0)730 244 872
Email: ase.lindskog@munters.com
You are welcome to join a webcast or telephone conference on October 22, at 9:00am CEST, when President and CEO Klas Forsström, together withGroup Vice President and CFO Annette Kumlien, will present the report.
Webcast:https://tv.streamfabriken.com/munters-Q3-2021
Dial-in number for the telephone conference:
SE: +46850558358
UK: +443333009034
US: +16467224904
This interim report, presentation material and a link to the webcast will be available on https://www.munters.com/en/investor-relations/____________________________________________________________________________________________________________________________
Financial calendar:
February 4, 2022: Full year report January-December 2021
The week that begins 28 February 2022: Posting of Annual Report 2021
April 22, 2022: Interim report January-March 2022
July 15, 2022: Interim report January-June 2022
October 21, 2022: Interim report January-September 2022
February 9, 2023: Full year report January-December 2022____________________________________________________________________________________________________________________________
This information is information that Munters Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07.30am CEST on October 22, 2021.
Munters Group AB, Corp. Reg. No. 556819-2321
About Munters Group
Munters is a global leader in energy efficient air treatment and climate solutions. Using innovative technologies, Munters creates the perfect climate forcustomers in a wide range of industries. Munters has been defining the future of air treatment since 1955. Today, around 3,300 employees carry out manufacturing and sales in more than 30 countries. Munters Group AB reported annual net sales of more than SEK 7 billion in 2020 and is listed on Nasdaq
Stockholm. For more information, please visit www.munters.com.
Every care has been taken in the translation of this interim report. In the event of discrepancies, the Swedish original will supersede the English
translation. The addition of the totals presented may result in minor rounding differences.

25