Munters Group Ab · OMXSTO:MTRS
Munters Group Ab — Q2 2024 Earnings Presentation
60 slides from Munters Group Ab's earnings presentation, Jul 17, 2024
Slide 1: Munters – Investor Presentation
Munters – Investor Presentation June 2024 Investor Relations
Slide 2: Agenda
Agenda Introduction Quarterly highlights AirTech Data Center Technologies FoodTech Appendix
Slide 3: World leader in energy-efficient climate and production solutions
Countries with sales World leader in energy-efficient climate & production solutions Order Intake per >45 business area Sales MSEK* 23% 14,292 10% 67% Production plants AT- AirTech 25 DCT - Data Center Technologies FT- FoodTech Adj. EBITA margin* Net Sales per business area 13.6% 17% Regional share
Slide 4: We assist our customers in securing critical operations, production quality and sustainability
We assist our customers in securing critical operations, production quality and to become more sustainable AirTech DCT FoodTech State-of-the-art cooling Ultra dry air for battery Climate & hygiene control for Dehumidification for Indoor climate solutions for solutions for data centers production foo
Slide 5: Well-positioned to capitalize on strong megatrends
Well-positioned to capitalize on strong megatrends & be part off the solution for a more sustainable world Climate change & Urbanization and an Accelerating Globalization resource scarcity aging & growing digitization & use of challenges & market population AI dynamics Demand for Digitalization Secu
Slide 6: We aim to be a market leader in prioritized markets and segments
We aim to be a market leader in prioritized markets and in prioritized segments Unique Proven energy Large installed Leading position Global presence application efficient base & service knowledge products & offering solutions
Slide 7: Strengthen, develop and expand our core
Strengthen, develop and expand our core – dehumidification & evaporative cooling Components Service & End Market Components Rotors with Digital connectivity desiccant Units Systems drying wheel DCT AirTech Service Packaged air Chilled Water SyCool Celdek CRAH1 economizers Split FoodTech Service & Sa
Slide 8: Financial and Sustainability targets
Financial and Sustainability targets – aligning and setting a strategic goal agenda Mid-term financial targets Sustainability targets 2030 Average annual total Reduce CO2e Growth net sales growth >14% Scope 1 & 2: net zero, E Scope 3: aligned with over a business cycle Paris Agreement 1.5°C Adjusted
Slide 9: Impressive achievements in recent years
Impressive achievements in recent years Growth Profitability OWC/net sales development MSEK MSEK 20% 2 000 16% 17.2% 41% 45% 14% adj. EBITA-margin 13.2% 16 000 14% 13.7% 14.2% 34% 12.2% 12.1% 15% 13.1% 1 500 12% 12.7% 35% 12.9% 12 000 10% 25% 10.3% 13-10% average (LTM) OWC/net sales 10% 1 000 8% 8 0
Slide 10: Agenda
Agenda Introduction Quarterly highlights AirTech Data Center Technologies FoodTech Appendix
Slide 11: High demand and profitable growth
Q1 High demand and profitable growth Continued high demand… … drives stable net sales and... … enhanced profitability Order intake Announced orders* Order backlog MSEK Adj. EBITA Adj. EBITA margin Net Sales MSEK MSEK 15 000 600 16% 11 812 14.1 6 000 6 000 14% 10 000 3,538 400 12% 4 000 4 000 3 368 1
Slide 12: Solid order backlog – large orders supportive into 2025
Q1 Solid order backlog – large orders supportive into 2025 2022 2023 2024 2025 MUSD 115 US colocator SyCool Split solutions 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 m
Slide 13: Enhanced profitability, good cash flow & improved leverage
Q1 - Group Enhanced profitability, good cash flow & improved leverage Q1 Q1 Change (%) • Net Sales increased; 2024 2023 Organic growth Structural growth* Currency effects MSEK very strong growth in DCT Order intake 3,368 2,544 29 6 -2 strong growth in both segments in FT Order backlog 11,812 10,
Slide 14: Agenda
Agenda Introduction Quarterly highlights AirTech Data Center Technologies FoodTech Appendix
Slide 15: Global leader in air treatment for industry
AirTech Global leader in air treatment for industry Customer segments of order intake 16% 27% Order intake, MSEK* Net sales, MSEK* Adjusted EBITA margin* 19% 6% 7,366 8,199 15.3% 5% 9% 18% MSEK MSEK % Battery Food processing 20 Other Industrial Commercial 2500 Clean Technologies Service 2000 1,996 2
Slide 16: Solid development in several segments
AirTech Solid development in several segments MSEK Order intake per segment 3 000 2 500 • Variations in large orders i.e., batteries 2 000 • Other industrial good 1 500 growth • CT steady development 1 000 • Commercial increase 500 through Zeco acquisition 0 • Service & Components Q1 2022 Q2 2022 Q3
Slide 17: All segments - stable order intake trends
AirTech All segments - stable order intake trends >5% ~ 1-5 % ± 0 -1% neg % order intake Market Order Intake increased primarily EMEA Customer segment Q1 2024 Outlook * but also Americas, whereas APAC lower; Industrial 60% • Industrial- good growth especially in EMEA. Battery in EMEA very strong, wh
Slide 18: We operate in an attractive market with strong growth in multiple customer segments
We operate in an attractive market with strong growth in multiple customer segments AirTech Segment size and share, MSEK Segment outlook* Short-term (<6 m) Mid-to-long-term +52% Industrial 7,007 → Battery Food processing 4,598 Commercial Other industrial Clean Technologies → → Service & Components S
Slide 19: Q1 - Lower volumes & investments affecting margin
AirTech Q1 - Lower volumes & investments affecting margin Change (%) Order intake & backlog development Q1 Q1 2024 2023 Org. Struct* FX MSEK 4 000 Order intake 2,255 1,686 29 7 -3 Order backlog 3,688 4,341 MSEK 2 000 Net sales 1,996 2,023 -7 7 -2 0 Adj. EBITA 296 323 -12 6 -2 Q122 Q222 Q322 Q422 Q12
Slide 20: We offer a broad range of humidity, climate and air quality control solutions
We offer a broad range of high-performing humidity, climate and air quality control solutions Humidity Control Technologies Clean Technologies Dehumidification Humidification Air Quality & Pollution Control Systems Indirectly supported via Business Area Data Center Technologies Units Applicable to o
Slide 21: Selection of market players in dehumidification technologies
AirTech Selection of market players - mainly small local players Small Medium Large Extra Large (<1 BSEK) (1-2 BSEK) (2-10 BSEK) (>10 BSEK) AM AS AS AM AM/AS/EU AS Humidity Control Dehumidification AM/AS AM EU/AM AM Technologies AM EU AS AS AM AS AS AS AS EU Humidi- fication AS AM AS EU/AS EU/AS/AM
Slide 22: Preparing for the next growth wave by investing in our global footprint
We are preparing for the next growth wave by investing in our global footprint Amesbury Tobo & Hodonin • New greenfield factory to consolidate • New factory completed in Hodonin, Czech multiple sites into one and to support Republic to manufacture large systems battery demand in North America • Oppo
Slide 23: Clean Technologies – solutions for a healthier planet
AirTech Clean Technologies – solutions for a healthier planet Business Line Clean Technologies Decarbonization Emission Cleaning (Mitigation path) (Abatement path) Segment Power Process Electronics Tech- Mist elimination nologies VOC* abatement Mass transfer End customer Waste to Wind Steel, cement,
Slide 24: CleanTech has delivered into carbon capture projects worldwide
AirTech CleanTech has delivered into 26 carbon capture type of projects worldwide Norcem Brevik in Norway Ammonia plants in Nigeria World's first large scale CCS Supplied full internal system system in a cement plant in including solvent based CO2 Norway. Uses an amine based capture and ammonia scru
Slide 25: Agenda
Agenda Introduction Quarterly highlights AirTech Data Center Technologies FoodTech Appendix
Slide 26: Sustainable cooling solutions that facilitate digitization
Data Center Airech Technologies Sustainable cooling solutions that facilitate Customer distribution of order intake digitization 1% Order intake, MSEK* Net sales, MSEK* Adjusted EBITA margin* 4,998 3,712 16.7% 99% Hyperscalers Colo MSEK MSEK % 20 Telco & enterprises 1000 956 19.0 3000 800 16 Order i
Slide 27: Q1 - Increased demand & strengthened order backlog
Q1 - Increased demand & Data Center Technologies strengthened order backlog >5% ~ 1-5 % ± 0 -1% neg Customer Order Intake Market segment Q1 2024 Outlook * Order Intake increased; Hyperscaler 0% • mainly co-locator segment, Americas • underlying demand remains very strong Co-locator 99% Order Backlog
Slide 28: Q1 – Significant profitability increase
Data Center Technologies Q1 – Significant profitability increase Order intake & backlog development Change (%) Q1 Q1 2023 Org. Struct* FX 8 000 2024 MSEK 6 000 Order intake 343 293 17 0 0 4 000 MSEK Order backlog 7,003 5,564 Net sales 956 653 47 0 -1 2 000 Adj. EBITA 181 82 122 0 -1 0 Q122 Q222 Q322
Slide 29: Innovative solutions and our project model are key
Innovative solutions and our project model are key Based on a broad set of technology platforms, we tailor to optimize energy efficiency and reduce environmental impact for each unique project. Tailored, adaptable, sustainable. Components Products Complete Systems Services Sold to OEMs Typically sol
Slide 30: Selection of market players - Munters well positioned for growth
Data Center Technologies Selection of market players - Munters well positioned for growth An order in DCT generally consists of several equipment deliveries Small Medium Large Extra Large (<1 BSEK) (1-2 BSEK) (2-10 BSEK) (>10 BSEK) Technologies Data Center Several Several EU/AS/AM EU/AS/AM medium AM
Slide 31: Our global footprint – investing for growth
Our global footprint – investing for growth 31
Slide 32: Total market growth and our addressable market
Total market growth and our addressable market Cooling ~10-15% of total DC CAPEX – liquid cooling higher due to complexity 0% MARKET CAGR SPREAD >25% Other Electrical Cooling Infrastructure Liquid Cooling Premium Niche General Niche Construction IT Equipment Heat rejection Relative growth outlook Gr
Slide 33: The basic steps of cooling and heat rejection
The basic steps of cooling and heat rejection 1. DISSIPATION 2. CAPTURE 3. TRANSFER 4. RELEASE INSIDE THE (INSIDE SERVER THE SERVER) INSIDE THE DATA (INSIDE CENTER THE DC) THROUGH INFRASTRUCTURE OUTSIDE (OUTSIDE THE DC) Heat sinks, on-board fans or Heat is captured by air flow, Air, water or other r
Slide 34: SyCool Split - How to deal with increased power density
SyCool Split - How to deal with increased power density 4 1. Dissipation – taking heat from the chip to the air or the liquid 2. Capture – heat is captured by the 3 CRAH (air) or the CDU (liquid) 3. Transfer – heat energy is transported to the heat rejection 1 equipment 4. Release – heat is 2 reject
Slide 35: Agenda
Agenda Introduction Quarterly highlights AirTech Data Center Technologies FoodTech Appendix
Slide 36: A world leader in climate control systems for food production
FoodTech A world leader in climate control systems for food production Customer segments, net sales 4% 3% 7% 13% Order intake, MSEK* Net sales, MSEK* Adjusted EBITA-margin* 50% 2,638 2,447 10.9% 15% 8% 800 MSEK % 786 20 Broiler Swine 700 Layer Digital Solutions 600 596 Greenhouse Dairy 600 % Other 1
Slide 37: FoodTech - a leading dual offering
FoodTech FoodTech - a leading dual offering Products (examples) Typical customers AMINO Integrators software a dual TRIO Farmers / Dealers offering controller SATURN Farmers / Dealers fan FoodTech stands on two pillars, climate solutions and digital solutions 37
Slide 38: Strong demand and strengthened order backlog
Strong demand and FoodTech strengthened order backlog >5% ~ 1-5 % ± 0 -1% neg % order intake Market Customer segment Q1 2024 Outlook * Order Intake increased; Climate Solutions (incl. 87% • CS – primarily driven by Americas & Controllers) EMEA, slightly offset by APAC …whereof Broiler 50% • DS – str
Slide 39: Q1 - Enhanced profitability and net sales
FoodTech Q1 - Enhanced profitability and net sales Order intake & backlog development Change (%) Q1 Q1 2024 2023 Org. Struct* FX MSEK 1000 Order intake 786 581 32 5 -2 750 MSEK Order backlog 1,122 878 500 Net sales 596 512 10 8 -2 250 - of which SaaS 61 36 0 - SaaS ARR 244 145 Q122 Q222 Q322 Q422 Q1
Slide 40: FoodTech's digital business - added value
FoodTech – Digital Solutions FoodTech’s digital business - added value Supply chain management software Farm monitoring solutions for feed management IoT & Sensors Controllers, IoT & Sensors Software Sold direct to food producers and Sold direct to C-suite food via partners to farmers Sold to farmer
Slide 41: Footprint & global investments for the future
FoodTech Footprint & global investments for the future Climate solutions Digital Innovation and further Investments for efficiency improvements accelerated growth in operations New R&D Product and Develop innovation -ment Scale for growth Efficiency & productivity Existing Cont’d expansion New Cont’
Slide 42: Digital solutions - Significant SaaS growth
FoodTech – Digital Solutions Digital solutions - Significant SaaS growth ARR continued growth - new customers & Estimated conversions to our new software solution addressable market Amino for FoodTech SaaS solutions Also, high level of software implementations TOTAL ARR* (mSEK) ADDRESSABLE +68% MARK
Slide 43: FoodTech on a journey of accelerated growth
FoodTech – Digital Solutions FoodTech on a journey of accelerated growth 3. Establishing the data eco-system 1. Developing existing segments 2. Replicating into new segments & attracting technology leaders Continuous enhancements and penetration of Expansion to new segments, leveraging Establishment
Slide 44: Agenda
Agenda Update Introduction Quarterly highlights AirTech Data Center Technologies FoodTech Customer cases & M&A Appendix
Slide 45: Enhancing our Clean Technology portfolio
AirTech Enhancing our Clean Technology portfolio Acquisition of Airprotech • Italian manufacturer of Volatile Organic Compounds (VOC) abatement systems • Enhances air purification offering and addresses growing demand for abatement services in Europe • Positions us to offer complete systems and serv
Slide 46: Expanding DCT facilities in Ireland to meet the demand
Data Center Technologies Expanding DCT facilities in Ireland to meet the demand DCT Europe – Expansion • Expansion in Cork, Ireland with the establishment of new facilities with ~11,000m2 production and office space • Initially, around 100 employees will be able to produce the full DCT product range
Slide 47: Climate solutions – EMEA good recovery in all segments
FoodTech Climate solutions – EMEA good recovery in all segments Greenhouse order in EMEA • EMEA contractor, serving UAE end-users and farms • Solution offered CELdek evaporative pads & Air circulation fans and air extraction fans • Munters selected for the strong track record of customer satisfactio
Slide 48: Digital solutions – Significant SaaS growth
Digital solutions – Significant SaaS growth Key order in Americas strengthens cloud footprint in poultry • Large US turkey company, subsidiary of a major food corporation • Customer experienced challenges with data security, local installation and user friendliness of previous system • Upgraded to A
Slide 49: New innovative dehumidification system in North America
AirTech New innovative dehumidification system in North America Specially developed for low dew point (LPD) applications such as battery producers • Ability to maintain dry rooms at continuous low dew points • 40% smaller footprint vs. industry standard • Available for indoor and outdoor installatio
Slide 50: Appendix
Appendix 63
Slide 51: Munters strategic journey
Munters strategic journey Growth Profitability Stability Began journey to Reorganization to Efficiency Enhanced pricing Increased focus on New financial strengthen decentralize the improvements models prioritized customer targets set platform entire value chain across the entire and market value cha
Slide 52: M&A categories in focus
M&A Delivery on M&A agenda to fuel growth Structured process for M&A and integration with aligned workflows Examples: Core / consolidation M&A pipeline Acquisition of ZECO, build-up India 2023 Net sales: MSEK 510 Employees: ~1,000 M&A categories in focus Business value driven due Integration process
Slide 53: Investments supporting next growth wave
Capital allocation Investments supporting next growth wave 2019-2021 2022-2023 Stability and Growth » Capital allocation priorities to drive growth profitability agenda – organic and M&A: » Innovation and CO2 reduction » Operational excellence and commercial excellence » M&A and minority investments
Slide 54: Profitable growth and cash flow generation
Cash flow Profitable growth and cash flow generation Group Cash Flow YTD, MSEK Cash flow from changes in WC Q1 2024 Q1 2023 Change in accounts receivable -167 -19 Change in inventory -88 -120 215 -232 Change in accrued income 115 -43 338 Change in accounts payable -1 -128 Change in advances from cus
Slide 55: Solid financial platform important growth enabler
OWC & leverage Solid financial platform important growth enabler Business areas Group funding OWC/Net sales Net debt / adj. EBITDAx, LTM 20% 3,2 17.2% Long-term ambition 1.5x-2.5x 2,8 3.1 14.2% 2.9 15% 13.7% 13.1% 12.7% 2,4 2,0 2.2 Mid-term target: OWC/Net sales 13-10% 2.1 10% 1,6 1.8 1,2 5% 0,8 0,4
Slide 56: Service ambition updated to reflect strategic direction
Service ambition updated to reflect strategic direction Service & Software and Components 40% 15 000 Previous service ambition has been revised and extended to reflect Munters strategic focus 30% and business model: 10 000 Service: After market service, incl. 20% installations and Software (SaaS) 5
Slide 57: AirTech Service Offering
Service - AirTech AirTech Service Offering START-UP & WARRANTY REVIEW & RENEW • Installation Support/Assembly • Smooth transition to new Supervision product • Startup services & • Decommissioning Guaranteed performance • Primacaire • Training SUSTAIN & MAINTAIN • ServiceCaire RETROFIT & UPGRADE • Ro
Slide 58: Service Offering DCT
Service - DCT Service Offering DCT Installation & Commissioning • Ensure proper functionality of equipment • Includes commissioning, start- up, and training Upgrades & Rebuilds • Enhance energy efficiency and capacity • Offer retrofit solutions for operational equipment • Example: Fan upgrades Maint
Slide 59: Product Portfolio
Market players can be divided into four main categories HIGH Vertical Houses Full Solution Providers • Broad range of end-to-end solutions • Benefits from scale and several “entry points” • Trusted with larger share of wallet to the DC projects Product Portfolio • Require broad portfolio, world clas
Slide 60: Contact details Investor Relations
Contact details Investor Relations Ann-Sofi Jönsson Line Dovärn Vice President, Head of Investor Director Investor Relations Relations & Group Risk Management E-Mail: line.dovarn@munters.com E-mail: ann-sofi.jonsson@munters.com Phone: +46 73 048 84 44 Phone: +46 73 025 10 05 Please visit Investor Re