Profitable growth and strong cash flow

January - March 2024

• Order intake increased +32 per cent (+29 organic), with strong growth in all three business areas. AirTech saw good demand, especially in the battery sub-segment in EMEA. Data Center Technologies (DCT) had a solid order intake in North America. FoodTech had a positive development, primarily in Americas and EMEA, slightly offset by APAC.

• Net sales increased +11 per cent (+7 organic), mainly driven by good deliveries on large orders in DCT. FoodTech had strong growth in Climate solutions in Americas and very strong growth in Digital solutions in the US. AirTech declined, but with growth in Americas, mainly in the battery sub-segment, offset by weaker development in APAC and EMEA.

• The adj. EBITA margin improved mainly driven by net sales and price increases in DCT and FoodTech as well as efficiency improvement efforts in all business areas.

• Earnings per share, before and after dilution, was SEK 1.19 (1.18) in the first quarter.

• Cash flow from operating activities improved mainly because of improved earnings and a reduction in operating working capital. The positive impact on working capital in the quarter was primarily driven by customer advances related to DCT in Americas.

• Leverage decreased for the third quarter in a row, from 2.1x at the end of December to 2.0x mainly because of increased operating earnings.

• The AGM in March resolved to pay a total dividend of 1.30 SEK (0.95), a total of MSEK 237 (173) to be paid in two equal instalments. This represented 30 per cent of net income in 2023. A first instalment of the dividend was paid out in March.

CEO comments:

High demand drives continued strong momentum

I'm pleased to report a very strong first quarter of 2024 for Munters. Demand for our innovative climate control solutions remains high, driven by powerful trends like digitalization and electrification. This momentum resulted in another quarter where we achieved significant order intake growth of 32 per cent, driven by robust demand in all business areas.

Within AirTech all segments showed stable order intake in the quarter, with positive development especially in the battery sub-segment in EMEA. In DCT order intake increased with very strong underlying demand for energy-efficient cooling solutions. Americas and EMEA were the main contributors to growth in Climate solutions within FoodTech, as well as Digital solutions growing the SaaS revenue (ARR) by 68 per cent in the quarter.

As a result of continued good underlying demand and a high pace in customer deliveries, net sales increased by 11 per cent. This was driven mainly by very strong growth in DCT and FoodTech.

Enhanced profitability and good cash flow resulting in improved leverage

Growth was accompanied by substantial improvement in adjusted EBITA margin, reaching our mid-term target of 14 per cent for the second time in a 12-month period, demonstrating the effectiveness of our strategic initiatives. This achievement stems from a powerful combination of initiatives to drive profitability at the same time as we are investing strategically to create a platform for long-term sustainable growth in all business areas.

DCT contributed with a significant margin improvement driven mainly by good customer deliveries on orders announced in previous years. Profitability levels in Digital solutions in FoodTech continued to positively affect the margin. I'm particularly pleased to see the continued recovery and strong development of Climate solutions in EMEA this quarter. After a period of challenges, it's encouraging to witness the strong profitability improvement. This positive momentum is a testament to the hard work and dedication of our team in FoodTech. The strategic review of FoodTech equipment is moving along according to plan. In AirTech the margin declined mainly due to lower volumes and increased investments in sustainability, operational efficiency and innovation.

Cash flow from operating activities was good in the quarter mainly related to an increase of operating earnings and a positive development of working capital. Leverage improved for the third quarter in a row.

Investing for a sustainable future

During the quarter we announced the acquisition of Airprotech within AirTech. Airprotech, an Italian manufacturer of Volatile Organic Compounds (VOC) abatement systems, adds a complementary set of technologies and expertise to our portfolio. This strategic move strengthens our position in the Clean Technologies market and opens up exciting new innovation opportunities. We're confident that the combined talent and resources positions us to meet the growing demand for abatement services, ie capture and destruction of hazardous compounds.

The strong growth in Data Center Technologies has led us to expand our production capacity in Ireland for the European offering. The new factory being built in Cork, Ireland expands our footprint, increases production capacity and positions us well to meet the growing need for innovative and sustainable cooling solutions.

We remain committed to investing in digitization and automation and as a result we recently launched AirC Connect, AirTechs new digital platform for remote climate control with features like real-time monitoring for both desktop and mobile devices. In addition, we are actively investing to accelerate our journey towards achieving net-zero emissions from our own operations. This commitment to sustainability aligns with our core values and the growing expectations of our stakeholders.

I want to express my sincere gratitude to all our dedicated employees. Your hard work and commitment were instrumental in achieving these impressive results. 

Klas Forsström, President & CEO

Information about the webcast:
Welcome to join a webcast or telephone conference today 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.

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-q1-report-2024

Conference call
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=50049059

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

Contact information:
Investors and analysts
Ann-Sofi Jönsson, Vice President, Investor Relations and Group Risk Management
E-mail: ann-sofi.jonsson@munters.com, Phone: +46 (0)730 251 005

Line Dovärn, Director, Investor Relations
E-mail: line.dovarn@munters.com, Phone: +46 (0)730 488 444

Media
Eva Carlsson, Director of External Communications
E-mail: eva.carlsson@munters.com, 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. The information was submitted for publication, through the agency of the contact persons set out above, at 07.30 AM CEST on April 23, 2024.

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 5,000 employees carry out manufacturing and sales in more than 30 countries. Munters Group AB reported annual net sales of more than SEK 14 billion in 2023 and is listed on Nasdaq Stockholm. For more information, please visit www.munters.com.