Munters : Q2 presentation 2024.pdf

Munters

Q2 report 2024

Klas Forsström, President and CEO Katharina Fischer, GVP and CFO

Ann-Sofi Jönsson & Line Dovärn, Investor Relations

Strong second quarter - well positioned for future growth

Robust order intake

Order intake	Announced orders*	Order backlog
MSEK								15 000
6 000								11,834
								10 000
4 000								3,536
2 000								5 000
0								0
Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
2022				2023				2024

Q2 Order intake, +3% (-2%org)

• AT - flat, mainly weaker battery in APAC
• DCT - flat, good level of smaller & mid- sized orders
• FT - good growth, driven by Americas &
  EMEA

Q2: Order backlog, +6%

• mainly large orders in DCT & AT, to be delivered throughout 2025

Increased net sales

MSEK			Net Sales
6 000
3,791

1. 000

1. 000
   0

Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
2022				2023				2024

Q2: Net sales, +7% (+2% org)

• AT - declined, primarily weaker battery sub-segment in APAC
• DCT - strong growth, successful execution on deliveries
• FT - grew strongly, primarily EMEA & Americas

Book-to-bill Q2: 0.93

All-time high profitability

MSEK		Adj. EBITA		Adj. EBITA margin
800								17.8	20%
								18%
600									16%
								673	14%
400									12%
									10%
200									8%
									6%
0									4%
Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
2022				2023				2024

Adj. EBITA-margin, Q2 17.8%

• strong volume growth in DCT & FT
• positive product mix and deliveries in AT
• strengthening effects from lean practices and other efficiency improvements

• accelerated investments in digitalizing, ways-of-working, our manufacturing footprint and innovation across all BA

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

Americas & EMEA main drivers of growth

Regional share Q2

Order intake	Net sales	Order intake	Net sales	Order intake	Net sales
		26%	26%	14%	12%
	60%
	62%

Americas - order intake

• AirTech- flat development, growth in Commercial & Components, offset by battery & Service
• DCT- strong underlying demand, hyperscalers rely on colocation providers to grow rapidly
• FoodTech- good growth in CS, primarily swine, dairy and layer segments. DS continued to show strong growth

EMEA - order intake

• AirTech- growth especially in the Industrial segment
• DCT- steady growth
• FoodTech- recovery in the market with strong growth in the broiler segment

APAC- order intake

• AirTech- weaker development, mainly due to the battery market in China
• FoodTech- continued slight recovery with good growth in the layer segment

All figures as reported, not currency adjusted.

3 OI: Order intake, NS: Net sales

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

Solid order backlog - large orders supportive into 2025

2022		2023		2024		2025		2026

MUSD 65

US car manufacturer

Climate control systems

MUSD 63

US colocator

Standard chilled water (CRAHs)

MUSD 176

US colocator

SyCool Split solutions

MUSD 54

Multinational car manufacturer 2 climate control system orders

MUSD 88

US colocator

Standard chilled water (CRAHs)

MUSD 137

US colocator

SyCool Split solutions

MUSD 65

US colocator

Standard chilled water (CRAHs)

Order received

Expected delivery period

4

Strong underlying long-term demand

Order Intake flat mainly due to weak battery market in APAC;

• Industrial (excl. battery) good development in EMEA & Americas, slightly offset by APAC
• Battery in Americas & APAC weak
• Commercial - Americas strong, slightly offset by APAC
• CT1- increased through acq. of Airprotech in EMEA
• Components - strong growth in Americas, EMEA good whereas APAC weaker, impacted by Chinese battery market
• Service - decreased primarily due to lower demand in Americas

Order Backlog decreased

MSEK

4 000

3,850

2 000

1,760

0

5

Q222

Q322

Q422

Q123

Q223

Q323

Q423

Q124

Q224

Order Intake

Order Backlog

1 Clean Technologies

AirTech

> 5 % ~ 1-5 % ± 0 -1% neg

	% order intake	Market
Customer segment	Q2 2024	Outlook *
Industrial	53%
…whereof battery	13%
…whereof food processing	8%
…whereof commercial	12%
…whereof other	19%
Clean Technologies	7%
Service & components	39%
…whereof service	22%
…whereof components**	17%

• Market outlook and comments are indicative and refer to the coming six months
• Dehumidification rotors and humidification pads sold through OEM channels

AirTech

Strengthened margin development

Net Sales decreased, primarily weaker battery sub-segmentin APAC;

• Industrial (excl. battery) - declined, weak Americas whereas growth in food in EMEA & APAC
• Battery - growth in Americas, offset by weak EMEA & APAC
• CT- growth driven by acq. of Airprotech in EMEA
• Components - growth in Americas & EMEA driven by increased sales of evaporative pads to the data center market
• Service - grew, driven by EMEA, other regions flat

Adj. EBITA margin increased;

• cont. efficiency improvements, slightly offset by lower production utilization rate in EMEA & APAC
• positive effect from product mix in Americas as deliveries on major orders were finalized

• increased investments in operational efficiency & innovation - foreseen to continue and increase

6

Change (%)

			Q2		Q2		Org.	Struct*	FX
			2024	2023
		MSEK
	Order intake		1,760	1,726		-5	7	0
	Order backlog	3,850	4,124
	Net sales		1,938	2,088		-13	6	0
	Adj. EBITA		341		346		-5	3	1
	Adj. EBITA (%)	17.6		16.6
	2 500								20%
	2 000								16%
	1 500								12%	EBITA margin
MSEK	1 000								8%
	500								4%	Adj.
	0								0%
	Q222	Q322	Q422	Q123	Q223	Q323	Q423	Q124	Q224

Net sales		LTM Adj. EBITA-margin	Adj. EBITA-margin

* Acquisitions & divestments

.

Solid development in several segments

MSEK	Order intake per segment

1. 000
   2 500

1. 000
   1 500

1. 000
   500
   0

Q2 2022

Q3

2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024

Q2 2024

Service

Components

Commercial

Other Industrial

CT

Battery

Announced orders*

Net Sales

7	*Large orders announced through press releases

AirTech

Development Q2 2022 - Q2 2024

• Battery - increased competition and cont. delays in greenfield investments, slow down in all regions
• CT- stable development
• Other industrial - steady development
• Commercial - increase in Q4 2023 due to acquisition of Zeco
• Components - impacted by lower replacements in Chinese battery market, good growth of evaporative pads to the DC market
• Service - solid development

Components - the foundation we build our business on

Desiccant wheel (rotor) removes moisture, as much as 99.9%

~40% of Component order intake

How we stay ahead:

• constantly working with energy efficiency & material investigation
• partnering to accelerate innovation
• examining waste streams to enhance circularity

Evaporative pads add moisture

• historically used in many industrial & agricultural processes
• increasingly popular in server halls & data centers - requires extensive cooling and humidity control

~60% of Component order intake

8

Nacelle & Hub - dehumidification placed inside, also used during storage & transportation

Tower - dehumidification placed inside at the bottom, mainly off-shorewind parks

Dehumidification crucial to maximize operational lifespan of a wind park

Dehumidification in wind farms important as high humidity can significantly impact efficiency:

• combats condensation and mold growth
• prevents corrosion
• reduces electrical malfunctions

• maximizes uptime

9

Underlying demand strong & increased order backlog

Order Intake flat;

• good level of smaller and mid-sized order, driven by the colocation market in Americas
• underlying demand remains strong

Order Backlog increased;

• majority attributable to large orders to be delivered throughout 2025

8 000

6903

MSEK

6 000

4 000

2 000

1060

0

Q222

Q322

Q422

Q123

Q223

Q323

Q423

Q124

Q224

Order Intake

Order Backlog

10

Data Center Technologies

	> 5 %	~ 1-5 %	± 0 -1%	neg
Customer	Order Intake		Market
segment	Q2 2024	Outlook *

Hyperscaler2%

Co-locator98%

Telco &	1%
enterprise

• Hyperscalers -need massive amounts of server space and rely on colocation providers to grow rapidly
• Colocation - continued strong demand due to increased build outs and investments, driven by increased leasing demand from hyperscalers
• Telco & enterprises - moving away from own facilities, market growth but lower pace

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