Munters interim report Jan-Mar 2021 - "Solid first quarter with improved market conditions"
January - March 2021:
- In general, market conditions improved. The major effect from the Covid-19 pandemic was increased costs from shortages in the supply chain that was managed well.
- Order intake increased +8%, currency adjusted strong growth of +20%, and net sales increased +3%, currency adjusted +14%. Growth was mainly driven by the battery and pharma sub-segments (part of the industrial segment) in business area AirTech and the swine segment in China in business area FoodTech. Also, Services had good growth.
- The adjusted EBITA-margin improved to 12.3% (8.3). The improvement was mainly driven by increased net sales, high utilization rates and continued low indirect costs.
- Leverage (net debt/adjusted EBITDA, LTM*) was at 1.9x, the same level at per end of December 2020. The positive effect from improved cash flow from operating activities was offset an increase in net debt.
- Net debt as of March 31 amounted to MSEK 2,208 compared to MSEK 2,116 at the end of December 2020. The increase in net debt in the quarter was mainly driven by a negative exchange rate effect on outstanding borrowings related to USD/SEK of MSEK -134.
- The implementation of the measures for sharpening of the customer offering and footprint optimization are progressing according to plan. In the first quarter, MSEK -24 was realized, whereof MSEK -12 from the original provision and another MSEK -12 of costs reported as incurred. All measures are on track to be implemented in 2021.
CEO comments:
Strong growth in industrial segment
The first quarter of 2021 showed strong growth. It was mainly driven by the battery and pharma sub-segment in the industrial segment. The Covid-19 pandemic continued to have an impact on our business, albeit in a mixed way. In some areas it led to increased demand at the same time as customers in other areas were delaying investments.
Improved profitability driven by high utilization rate and efficiency improvements
In the first quarter we achieved strong order intake and net sales, both reported and currency adjusted, despite a negative currency impact of more than ten per cent. Region APAC showed strong growth, Americas had good growth and EMEA was flat compared to 2020. The growth was driven mainly by the industrial segment in business area AirTech where both the battery and pharma sub-segment experienced strong growth. Data Centers US had improved order intake and strong net sales in the quarter, partly offset by a continued weak development in Mist Elimination. Business area FoodTech currency adjusted order intake and net sales increased. This was mainly driven by a continued strong increase in the swine segment in China. Services grew both order intake and net sales, with the strongest growth in the Americas and Asia. Overall, we achieved good growth in our prioritized market segments.
The adjusted EBITA-margin was strengthened in the first quarter because of a strong contribution from AirTech. The margin increased in AirTech because of increased net sales, high utilization rates and a continued focus on implementing efficiency improvements initiatives across the organization.
Footprint optimization, focus on innovation and a strategic review of FoodTech
The execution of our strategy continued. In the US we initiated a further optimization of our footprint with a move and expansion of a production site for the Data Centers operation. In Sweden our focus on innovation was strengthened as a new research and development lab was inaugurated.
The strategy was defined for business area FoodTech in the quarter. Going forward we aim at accelerate the implementation of the strategy in both the equipment and digital areas of the business.
Market conditions improved
Market conditions improved throughout the quarter, and we experienced continued strong demand in the industrial segment. The main effect from the Covid-19 pandemic came from shortages in the supply chain, which we managed in a good way. We expect that challenges in securing the supply chain will remain for the coming months and we will continue to monitor this development and pro-actively implement mitigating actions where possible.
Our performance is the result of the work done by our dedicated employees. I want to thank you for handling the daily operations so well and at the same time ensuring we implement our long-term strategy.
Klas Forsström, President and CEO
Information about the webcast:
On April 22, at 9:00 the President and CEO, Klas Forsström, together with the Group Vice President and CFO, Annette Kumlien will present the report in a live webcast simultaneously with a telephone conference.
Webcast:
https://tv.streamfabriken.com/munters-q1-2021
Dial-in number for the telephone conference:
SE: +46 8 56642693
UK: +44 3333009031
US: +1 8335268347
This interim report, presentation material and a link to the webcast will be available on https://www.munters.com/en/investor-relations/
Contact person:
Ann-Sofi Jönsson, Vice President, Investor Relations and Enterprise Risk Management
Phone: + 46 (0)730 251 005
Email: ann-sofi.jonsson@munters.com
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 07.30 CET on April 22, 2021.
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 3,500 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.
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