Munters Group Ab · OMXSTO:MTRS
Munters Group Ab — Q3 2021 Earnings Presentation
25 slides from Munters Group Ab's earnings presentation, Oct 22, 2021
Slide 1: Q3 report 2021
Munters Q3 report 2021 Klas Forsström, President and CEO Annette Kumlien, GVP and CFO
Slide 2: Agenda
Agenda Highlights Q3 2021 Implementation of strategy Q3 2021 financial highlights Summary 2
Slide 3: Strong order intake and lower margin in Q3
Strong order intake and lower margin in Q3 Strong demand, stable net sales with lower margin Supply chain challenges to continue Strategy implementation Order intake Net sales Adj. EBITA MSEK MSEK MSEK +20% +1% -21% 2500 2000 300 2000 250 1500 1500 200 1,919 2,295 1000 1,833 1,857 150 271 215 1000 1
Slide 4: Supply chain challenges and improved internal efficiencies
Supply chain challenges and improved Raw material price development since 2016 internal efficiencies • Supply chain constraints, higher raw material prices and freight cost increases seen throughout Q2 continued to impact our business during Q3 • Most of our consecutive price increases implemented 2
Slide 5: Order intake Q3 – Good development in EMEA and Americas
Order intake Q3 – Good development in EMEA and Americas Americas Regional split Americas EMEA APAC • AirTech - growth driven by Data Centers with strong demand from co- location operators Share of total order intake 44% 32% 23% • FoodTech – strong growth in Dairy, Greenhouse and Swine segments Y/Y c
Slide 6: Market trends during Q3 – AirTech
Market trends during Q3 – AirTech Customer segment % order intake CurrentMarketMarket comments Customer segment Q1-3 2021 trend Trends Comments Industrial 48% Battery segment strong growth; other segments solid development Continued rapid growth across all regions, with APAC in the lead …whereof Bat
Slide 7: Scandinavian lithium battery laboratory project
Scandinavian lithium battery laboratory project • Munters signs strategic turnkey project to design and build a full-scale laboratory for lithium batteries in Scandinavia • Lithium battery production requires a highly controlled environment with stable temperature and humidity • A controlled climate
Slide 8: Market trends during Q3 – FoodTech
Market trends during Q3 – FoodTech % order intake Market Customer segment Q1-3 2021 Trends Comments Broiler ~50% Stable demand in all markets Swine ~25% Weak development in China, improving in Americas Layer ~15% Good development in Americas Greenhouse ~5% Growth driven by increased demand Dairy ~5%
Slide 9: An affordable, easy-to-use and high-performing heat recovery solution
An affordable, easy-to-use and high-performing heat recovery solution Benefits of Munters Heat exchanger: • No filtration required - no costs and pressure losses due to preliminary filtration • Self-cleaning functionality • Easy access for service - no risk of contamination or hygienic issues • Up t
Slide 10: Agenda
Agenda Highlights Q3 2021 Implementation of strategy Q3 2021 financial highlights Summary 10
Slide 11: Strategic priorities
Strategic priorities Strategic priorities: Focus areas Customers Improve go-to-market models and pricing strategies Focus investments in R&D and product portfolio alignment Innovation and adjustment Markets Growing in prioritized markets and strengthen Services Excellence in Continuous improvements,
Slide 12: Delivery on our long-term strategy
Delivery on our long-term strategy AirTech: Growth in larger projects & prioritized markets FoodTech: Taking the next steps • Larger Battery and Data Center project wins further strengthen our market and technology position and also increase our • Digital solutions: accelerating growth in IoT and Sa
Slide 13: Continuous strong focus on sustainability
Continuous strong focus on sustainability People Environment Grete Solvang Stoltz Governance Progress during third quarter 2021 New Group Vice President HR and Sustainability Grete Solvang Stoltz, currently Senior Vice President Human Resources and Sustainability at LKAB, will join the Munters’ Peop
Slide 14: Agenda
Agenda Highlights Q3 2021 Implementation of strategy Q3 2021 financial highlights Summary 14
Slide 15: Update on financial targets
Update on financial targets Mid-term Q3 Q3 YTD YTD 1 targets 2020 2021 2020 2021 Net sales growth Org. growth p.a. over a 5% 8% 3% -2% 10% business cycle 2 Adjusted EBITA- 14% 14.8% 11.6% 12.8% 12.7% margin 3 Capital structure 1.5x- (LTM*) n.a. n.a. 2.7x 2.2x (Leverage: Net debt / adj. 2.5x EBITDA)
Slide 16: Group: Strong order intake - flat net sales
1 Net sales growth Group: Strong order intake - flat net sales Q3 Order intake Q3 Net sales YTD Order intake and Net sales YTD Order backlog MSEK MSEK MSEK MSEK +20% +1% +14% 2000 7000 +2% 4000 +32% 2000 6000 3500 1500 5000 3000 1500 4000 2500 1,919 2,295 1,833 1,857 1000 3000 5,638 6,407 5,173 5,29
Slide 17: AirTech: Strong growth driven by Battery and Data Centers
1 Net sales growth AirTech: Strong growth driven by Battery and Data Centers Q3 Order intake Q3 Net sales YTD Order intake and Net sales YTD Order backlog MSEK MSEK MSEK MSEK +22% +5% +33% +5% +40% 2000 1600 5000 3000 1400 4000 2500 1500 1200 1000 3000 2000 1000 800 3,928 4,781 3,614 3,800 2000 1500
Slide 18: FoodTech: Impacted by weak swine market in China
1 Net sales growth FoodTech: Impacted by weak swine market in China Q3 Order intake Q3 Net sales YTD Order intake and Net sales YTD Order backlog MSEK MSEK MSEK MSEK +7% -13% -5% 700 700 -8% 2000 700 -5% 600 600 600 1500 500 500 500 400 400 1000 1,746 1,657 400 572 1,595 1,519 687 300 575 502 300 52
Slide 19: Decreased EBITA-margin in Q3 and stable YTD
2 Adjusted EBITA-margin Decreased EBITA-margin in Q3 and stable YTD Group AirTech FoodTech MSEK +2% MSEK +17% MSEK -26% 800 20% 600 20% 300 20% 700 18% 15.4% 14.7% 18% 16.5% 15.3% 18% 14.8% 16% 500 16% 250 16% 600 12.8% 12.7% 13.0% 13.2% 14% 14% 14% 400 200 11.6% 11.8% 500 11.6% 12% 12% 12% 300 10%
Slide 20: Delivering on our strategic journey
Delivering on our strategic journey 2020 2021 2nd step in strategy implementation 3rd step in strategy implementation Status Q3 2021 July: Sharpening measures, mainly AirTech May: Accelerating the strategy implementation, FoodTech New strategy launched in 2020, FoodTech strategy presented May 2021 A
Slide 21: Cash flow impacted by supply chain challenges
3 Capital structure Cash flow impacted by supply chain challenges Cash flow development, LTM* Cash conversion LTM (OCF**/Adj. EBITA) MSEK Cash flow from operating activities 1200 120% Cash flow for the period 1000 100% 800 600 80% 400 60% 200 0 40% -200 20% -400 -600 0% Oct-Sep Jan-Dec Apr-Mar Jul-J
Slide 22: Leverage in line with mid-term financial target range
3 Capital structure Leverage in line with mid-term financial target range Development of leverage • The leverage ratio end of September was 2.2x - an increase from Net debt / adj. EBITDAx, LTM 1.9x end of June 2021 and year end 2020. The increase was 4 mainly due to as earlier described increased wo
Slide 23: Agenda
Agenda Highlights Q3 2021 Implementation of strategy Q3 2021 financial highlights Summary 23
Slide 24: Continued strong demand in Q3 in prioritized areas
Continued strong demand in Q3 in prioritized areas Strong demand Supply chain challenges to continue Strategy execution • Increase mainly driven by strong growth in • The supply chain constraints, higher raw Execution of long-term strategy continued: AirTech within mainly Battery and Data material p
Slide 25: Questions & Answers
Questions & Answers @ Munters