Strong growth and margin improvement in all business areas

April - June

• Order intake was flat organically, with good development in business areas FoodTech and Data Center Technologies (DCT), and a stable development in AirTech.

• Net sales increased +27% organically, mainly driven by a very strong growth in DCT and the battery sub-segment in AirTech. FoodTech had a strong development in Americas, in both Climate and Digital Solutions, that was offset by a weak development in EMEA and APAC.

• The strong improvement in the adj. EBITA margin was mainly related to increased net sales in DCT and AirTech, as well as efficiency improvements in all business areas. The significant margin improvement in DCT was driven mainly by the production ramp-up in the US.

• Earnings per share increased by +50% driven by the strong net sales and improved profitability.

• Cash flow from operating activities was negatively impacted by a build-up of operating working capital, mainly related to DCT where production continued to ramp-up for future deliveries in the quarter. Deliveries to customers are expected to increase throughout the second half year.

Events after the close of the period

• Munters announced that a strategic review of the equipment offering in FoodTech has been initiated. It includes exploring different options and may result in partial divestments, although no such decisions have yet been taken. 

CEO comments

A quarter with strong results and progress on the strategic journey
In the second quarter our strategic journey continued with strong net sales growth, improved margins in all business areas and very good operational excellence advances. We continuously evaluate the strategic direction as well as our offering as part of our journey to achieve long-term value creation. In the quarter, three acquisitions that strengthen our prioritized areas were closed, two in AirTech and one in Foodtech. We announced that a strategic review of the equipment offering in FoodTech has been initiated aiming at providing the best future opportunity both for the digital business as well as the for the equipment business, for the benefit of employees, customers, and shareholders.
We also continued to make very good progress on reducing our Scope 1 and 2 emissions towards our goal to have net zero emissions from our operations in 2030. Our efforts to help our customers reduce emissions are at the core of what we do every day. As a step to ensure we improve the energy-efficiency of our products we inaugurated a new lab in Kista, Sweden, focused on controls and modelling of the anticipated effect from our units in AirTech.

Major order received in Data Center Technologies
The second quarter showed good order intake in FoodTech and DCT, with a stable development in AirTech. DCT received a major order for chilled water air handlers from a US-based colocation data center company, highlighting our strong position as a trusted partner in the growing and transformative market of data center cooling.
For the remainder of the year, we expect a continued good market activity driven by digitization, electrification, and a strong focus on energy efficient solutions.

Operational excellence initiatives delivering result
Organic net sales increased strongly in AirTech and DCT, whereas FoodTech had a weaker development. Our service business continued to develop well, with an expanded service offering as well as an increased number of employees contributing to the growth.
Our adjusted EBITA grew 76% and the adjusted EBITA margin improved in all business areas. The increase was partly driven by higher net sales in DCT and AirTech. DCT continued to have an excellent development of the utilization rate in production. Also, all business areas experienced good results from operational excellence initiatives.    
Operating cash flow was weaker in the quarter, mainly as a consequence of built-up working capital related to major orders received in DCT in 2022 and this year. As the pace of deliveries for these orders increases throughout the second half of the year working capital will decrease.

Our employees are the greatest asset for our business success
I am proud of our teams around the world who constantly drive change and improvements in our offering, contributing to our customer’s success.
I would like to welcome all new employes to Munters and thank all employees for their hard work in making our journey a success.

Klas Forsström, President and CEO

Information about the webcast and the telephone conference:
Today the report will be presented in a webcast and telephone conference at 9:00 AM CEST, by President and CEO Klas Forsström. 

Webcast:
If you wish to participate via webcast please use the link below. Via the webcast you are able to ask written questions.
https://ir.financialhearings.com/munters-q2-2023

Telephone conference:
If you wish to participate via teleconference please register on the link 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=5003138

This interim report, presentation material and a link to the webcast will be available on https://www.munters.com/en/investor-relations/

For more information:
Investors and analysts
Ann-Sofi Jönsson, Vice President, Investor Relations & Enterprise Risk Management
E-mail: [email protected], Phone: +46 (0)730 251 005

Media
Eva Carlsson, Director External Communications
E-mail: [email protected], Phone: +46 (0)70 88 33 500

This information is information that Munters Group AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 AM CEST on July 18, 2023.

About Munters Group
Munters is a global leader in energy-efficient air treatment and climate solutions. Using innovative technologies, Munters creates the perfect climate for customers in a wide range of industries. Munters has been defining the future of air treatment since 1955. Today, around 4,000 employees carry out manufacturing and sales in more than 30 countries. Munters Group AB reported annual net sales of more than SEK 10 billion in 2022 and is listed on Nasdaq Stockholm. For more information, please visit www.munters.com.