Munters Group Ab · OMXSTO:MTRS
Munters Group Ab — Q2 2022 Earnings Presentation
44 slides from Munters Group Ab's earnings presentation, 2022
Slide 1: Q2 2022 - Investor presentation
Munters Q2 2022 - Investor presentation Investor Relations
Slide 2: Agenda
Agenda Q2 highlights Airlech Data Center Technologies FoodTech Customer Cases @® Munters
Slide 3: World leader in energy-efficient climate solutions
World leader in energy-efficient climate solutions 2 @&:e Munters offers climate solutions where controlling indoor humidity, temperature and energy efficiency is mission-critical. Our solutions reduce customers’ climate and environmental impact through efficient resource consumption *Financial figu
Slide 4: Creating sustainable value
Creating sustainable value Munters’ overarching target is sustainable value creation - with clear goals we steer Growth 20 10 0 “10 8 2019 12022" Target: Annual organic growth of net sales of 5% * LTM end of June 2022 i ° Profitability 2017 2018 20 021 2022* Target: Adjusted EBITA margin of 14% Capi
Slide 5: Munters on a journey
Two business areas: AT and FT CEO and CFO recruited Strategic review of Data Centers and Mist Elimination Data Centers Europe closed Munters on a journe * AT & FT delivery on strategic review * New business area: DCT 2022 * Acquisition of EDPAC — data centers Europe Efficiency improvement initiative
Slide 6: Core technologies — dehumidification and evaporative cooling
6 Core technologies — dehumidification and evaporative cooling FoodTech offering Core Technologies Evaporative Rotors with desiccant cooling pads drying wheel Dehumidifiers Packaged air Chilled Water SyCool economizers CRAH Airlech offering Climate systems High-efficiency fans Controller Air inlets
Slide 7: Sustainability seamlessly integrated in Munters business strategy
Sustainability seamlessly integrated in Munters business strategy Scope 3 emissions included in GHG reporting Net zero emissions target from operations by 2030 EU taxonomy eligible business 35% * CDP reporting Magijor investments - ESG impact analysis (incl. internal carbon pricing) Sustainability f
Slide 8: Climate change is our most important megatrend
Climate change is our most important megatrend Munters purpose - For customer success and a healthier planet Climate change is driving and impacting our market, demand and strategic priorities. Munters is part of the solution for a more sustainable world. * Financial figures Dec 2021 Renewable elect
Slide 9: Agenda
Agenda Introduction aes Airlech Data Center Technologies FoodTech Customer Cases @® Munters
Slide 10: Climate change our most important value driver
Climate change our most important value driver Well positioned to take advantage of strong megatrends - digitalization, electrification and demand for sustainable solutions Price increases compensated for inflationary pressure — we continue to adjust prices Increasing investments to capture market o
Slide 11: Strong growth in a quarter marked by continued challenges
Strong growth in a quarter marked by continued challenges Strong order intake Increased focus to manage lead times Price increases compensated for inflation MSEK —— Order Intake 4000 3.000 2000 1.000 1 0 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Order intake, Q2 +51% : * DCT in Americas * Battery
Slide 12: PS/PP Al Paper
PS/PP Al Paper Steel Coating Cu Other • • • • • • • • •
Slide 13: Strong growth in a quarter marked by continued challenges
13 Strong growth in a quarter marked by continued challenges Mid-term targets Net sales growth Org. growth p.a. over a 5% business cycle Adjusted EBITA- : 1A% margin Capital structure* (Leverage: Net debt / adj. 1.5x-2.5x EBITDA) *LTM = Last Twelve Months Q2 2021 13% 14.2% n.a. Q2 2022 25% 10.4% YTD
Slide 14: Growth and net price increases offset by increased costs
Growth and net price increases offset by increased costs Adj. EBITA margin in Q2 affected by: Q2 * Volume growth in AT and DCT 2021 adj. EBITA % 14.2 . a * Net price increases offset by inflationary pressure Volume ++ Net pricing . Business & regional mix negative impact: — weak FT market in EMEA &
Slide 15: Increasing investments to capture market opportunities
15 Increasing investments to capture market opportunities Create a scalable business to capture growth and become more efficient and profitable
Slide 16: Inorganic strategies to boost overall growth
Inorganic strategies to boost overall growth “yy Executed in 2022 nn 3 rs) fe) 2 & n 2 = ie} loz) g o is) < < Cs) = @ Munters
Slide 17: Agenda
Agenda Introduction Q2 highlights Airlech Data Center Technologies FoodTech Customer Cases @® Munters
Slide 18: Global leader in air treatment for industry
Global leader in air treatment for industry Order intake, MSEK* 1,727 MSEK 2000 1500 1000 50 | | Q2 G3 G4 Qi Q2 Q3 Q4 QI @2 2020 2021 2022 fs) ° * Financial figures Q2 2022 MSEK 2000 1500 1000 500 8 ° Net sales, MSEK* 1,723 Q2 G3 Q4 QI G2 G3 G4 QI G2 2020 2021 2022 % 20 15 10 ‘Adjusted EBITDA margin
Slide 19: Very strong demand within Battery
Very strong demand within Battery Oy sss Sh ne % order intake = Market Customer segment Q2 2022 Outlook * — Comments Industrial 50% @ Demand expected to remain strong ... whereof Battery 25% A *** | Continued strong growth expected, driven by Americas and EMEA ... whereof Food processing 8% @ Demand
Slide 20: Mainly small local players
Mainly small local players mall Medium Large Extra Large BSEK) 2 BSEK) (2-10 BSEK) (>10 BSEK) Gy ccouse Bo sie Bs Sinara aes a “a AS ‘AM "”AM/AS/EU D innovent Novel Anre"Ticrowoes nycrgpenia SRYSOLUTIONS . hel 2 & AM AM AM AM ope om: az Ga D195 X NICHIAS Oo a AM/AS EU AS AS “AS ° 3 5 & Acnitietiveie
Slide 21: Q2 - Strong growth in transformative segments
21 Q2 - Strong growth in transformative segments * Order intake - up in all regions, Battery also Food, Components, CT and Services * Net sales increased in all regions — Services ~ 20% of AT net sales — price increases ~ 6% of net sales in Q2 * Adj. EBITA margin impacted by; + strong volume growth
Slide 22: Agenda
Agenda Introduction Q2 highlights Airlech Data Center Technologies FoodTech Customer Cases @® Munters 22
Slide 23: Balanced market approach — setting ourselves up for growth
Balanced market approach — setting ourselves up for growth Step- by-step growth Step 1 * Refocus on North American market * Strengthen market position - new product launches and broadening of customer base * Build a stable manufacturing base * Create solid recurring revenues . . Acquisition of Europ
Slide 24: Data Center Technologies
ta Center Technologies Regional distribution, " order intake* supplier of advanced climate cooling solutions Order intake, MSEK* 939 Net sales, MSEK* : - | Adjusted EBITDA margin* ® 303 | 5.9% MSEK MSEK % 2.000 20 mAmericas EMEA 300 =! 1.500 15 200 1.000 10 - | : | | | | | . Pee l ; ; @2 @3 Q4 QI Q@
Slide 25: Hyperscalers driving growth
Hyperscalers driving growth % order intake = Market Customer Segments Q2 2022 Outlook * Comments Ryeercclers 5% A a in cloud traffic and connectivity services continues to drive hyperscale Colocation 93% A Telco & enterprises 2% wn * Market outlook and comments are indicative and refer to the coming
Slide 26: Q2 - Strong growth in both Americas and EMEA
Q2 -Strong growth in both Americas and EMEA * Order intake increased - co-location customers in Americas * Net sales increased - EMEA and Americas — price increases ~2% of net sales in the quarter * Adj. EBITA margin; + volume growth in Americas and EMEA — increasing work related to component shorta
Slide 27: Agenda
Agenda Introduction Q2 highlights Airlech Data Center Technologies FoodTech Customer Cases @® Munters 27
Slide 28: FoodTech
7 . a : FoodTech reased sales, challenging market e i ee FoodTech is one of the world’s leading suppliers of high-quality, energy-efficient climate control systems for livestock farming and greenhouses, as well as software to control and optimize the entire food production value chain. Customer segm
Slide 29: FoodTech has a leading dual offering to our customers
29 Foodlech has a leading dual offering to our customers Products (examples) Typical customers AMINO Integrators software DIGITAL SOFTWARE SOLUTIONS ca TRIO Farmers / Dealers CONTROLLERS. controller & SENSORS. CLIMATE SOLUTIONS SATURN Farmers / Dealers EQUIPMENT fan FoodTech stands on two pillars, c
Slide 30: A market in transformation
I> 5% £0-1% A market in transformation a % order intake = Market Customer segment Q2 2022 Outlook * | Comments Climate solutions 87% Mixed market development with growth in Americas, slow down in EMEA and weak demand in APAC _.whereof Broiler 53% Continued strong demand in Americas, EMEA slower due
Slide 31: Selection of market players
Selection of market players 5 I@SKOV| 7) Big Dutchman EU/AS/AM EU/AS/AM > RRA & Big Herdsman 3 AS fe} 1S} o EI PLASSON fancom 2 EU/AS/AM EU <. Pexafan icureran) EU/AS/AM Ss 7 E 3 O EU/AS/AM Other ies TERMOTECNICA EU ' morors wg Multifan 2 Gauss DACS iii EU/AS/AM China EU/AS GigolA” AS Middle East DO
Slide 32: Increased sales, challenging market environment
Increased sales, challenging market environment * Order intake decreased - weak APAC and EMEA markets. Digital Solutions in Americas grew * Positive Broiler & Layer segments in Americas. Weak Chinese market. EMEA flat development — price increases ~10% of organic growth * Adj. EBITA margin; + Digita
Slide 33: Agenda
Agenda Introduction Q2 highlights Airlech Data Center Technologies FoodTech Customer Cases @® Munters 33
Slide 34: Our largest orders in the battery segment ever
Our largest orders in the battery segment ever * July 2022 - Order from large US car manufacturer — Total value ~MUSD 65 (including Munters climate control systems and field service work) — Deliveries Q2 2023 through Q3 2024 * Battery segment a prioritized growth area - this order validates our stro
Slide 35: https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
• • • • • • • • https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
Slide 36: Belgian air hub chooses Munters for fan optimization
Belgian air hub chooses Munters for fan optimization * Liége Airport in Belgium is the 7" biggest cargo airport in Europe and the 22"4 biggest in the world * Massive amount of energy is used for creating a comfortable indoor climate for passengers, shopkeepers and employees * Two extraction units we
Slide 37: Our largest orders ever for the delivery of SyCool Split
Our largest orders ever for the delivery of SyCool Split 37 * March 2022 - order received from leading data center colocation operator in US. — Total value approx. MUSD 115 (including SyCool Split and field service work) — Deliveries starting in Q4 2022 through Q1 2024 * August 2022 - order received
Slide 38: US Footprint Expansion
US Footprint Expansion * Brand new state of the art facility opening in Roanoke region, Virginia — 365,000 square feet (34,000 m2) of manufacturing, office and R&D testing facility — represents over a 50% manufacturing increase over current Virginia facility — access to larger labor pool — completed
Slide 39: MTech Systems secures important SaaS contract
MTech Systems secures important SaaS contract * MTech Systems, a company within FoodTech, secured an important contract to deliver it’s Software-as-a-Service (SaaS) solution with an order value of about MUSD 19 * FoodTech’s strategy is to connect the entire food production value chain with innovativ
Slide 40: New product launch of Saturn FIVE
New product launch of Saturn FIVE ... ... following Saturn ONE introduced two years ago * Saturn series - lasts longer, use less components and reduce running costs while ensuring a healthy environment for animals * Modular - fully flexible configuration to meet the needs of any farm * Sustainable -
Slide 41: Appendix
Appendix
Slide 42: Growth and investments to capture market opportunities
Growth and investments to capture market opportunities Change (%) @22022 | @22021 MSEK * Order intake - growth in DCT Americas and Battery and Service in AT Order backlog - continued to increase Net sales - driven by DCT and AT — Services 14% of total net sales — Price increases ~ 9% of the organic
Slide 43: Strong growth — increased operating working capital
Strong growth — increased operating working capital LTM flow developme — Cash flow from operating activities 1200 Cash flow for the period Apr-Mar JulJun Oct-Sep Jan-Dec Apr-Mar JulJun Oct-Sep Jan-Dec Apr-Mar Jul-Jun 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 Operating cash flow lower as: * l
Slide 44: Measures for strategy implementation on track
Measures for strategy implementation on track ~ * Strategy implementation measures Realized costs and expenses of * Strategy implementation Ss * Total costs and expenses about about MSEK 180 r ) mai to Pins we MSEK 200 Approx. 75% of savings realized onl b am ° Full year positive impact on Implement