Munters Group Ab · OMXSTO:MTRS
Munters Group Ab — Q3 2022 Earnings Presentation
50 slides from Munters Group Ab's earnings presentation, 2022
Slide 1: Q3 2022 Investor presentation
Munters Q3 2022 — Investor presentation Investor Relations
Slide 2: Agenda
Agenda Q3 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 Regional share Order intake Q3 Net sales Q3 Order intake Q3 Net sales Q3 oO Ge Munters offers climate solutions where controlling indoor humidity, temperature and energy efficiency is mission-critical. Our solutions reduce customers’ climate and env
Slide 4: Creating sustainable value
Creating sustainable value Munters’ overarching target is sustainable value creation - with clear goals we steer operations and set priorities that help us reach our overarching targets. 4 Growth Profitability Capital structure 6 4 30 12 3 20 10 8 2 0 4 1 10 0 017 2018 2019 20 1 2022" 2017 2018 2019
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
6 Core technologies — de Core Technologies Evaporative cooling pads Rotors with desiccant drying wheel humidification and evaporative cooling Airlech offering Dehumidifiers Swen eeee Packaged air economizers CRAH Climate systems FoodTech offering Air inlets High-efficiency fans Sensors and software
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 unters purpose - For customer success and a healthier planet eoctony emissions Scope 1&2 and Renewable electricity Recycling rate Energy efficiency* * cope 3*: 9 9 * Factory Scope 1&2 emissions 66% 52% 0.81 decreased 24% in H1 compared to (4, 2021:59% (
Slide 9: Agenda
Agenda Introduction Airlech Data Center Technologies FoodTech Customer Cases @® Munters
Slide 10: Record orders in quarter confirms our strong position and offer
Record orders in quarter confirms our strong position and offer Continued stable margin despite increased investments for growth Increased capacity to meet growing demand Clear strategy for value-creating growth Munters
Slide 11: Record order intake in the quarter
Record order intake in the quarter MSEK — Order Intake 8000 12000 10000 a 4 6000 8.000 4000 6000 4.000 2.000 2.000 Oo 0 @3 @4 QI @2 G3 a4 Ql @2 @3 @3 @4 Ql ™ 2020 2021 2022 2020 Order intake, @3 FX-adj. +145% (organic growth +139%): . * record high orders in DCT Americas and battery in AT * excludin
Slide 12: PS/PP Paper Al
• • PS/PP • Al Paper • Steel Coating • Cu • Other • •
Slide 13: Excellence in everything we do
13 Excellence in everything we do Operational excellence CE] R&D Sustainability Operating working Commercial excellence Bringing R&D and Focus on Life Cycle capital Pricing strategy, value innovation closer to the Analysis, Scope 1, 2 & 3 continuous work to selling and business model market emission
Slide 14: Record order intake in the quarter
Record order intake in the quarter * Order intake increased, strong growth in DCT Americas & battery AT. FT Americas grew, offset by weak EMEA & China * Order backlog cont. strong increase * Net sales increased, DCT Americas and battery & Components in AT. FT flat, weak market in China offset by EME
Slide 15: Stable margin despite increased investments for growth
Stable margin despite increased investments for growth Group adj. EBITA margin impact 2021 adj. EBITA % Q3 11.6 Volume Net pricing Supply chain Investments Operational challenges Business & regional mix ++ + 2022 adj. EBITA % Main factors affecting adj. EBITA margin in Q3: * Positive impact from vol
Slide 16: Inorganic strategies to boost overall growth
Inorganic strategies to boost overall growth oy Minority investments 2021-2022 3 minority investments Si 8% BARNTOOLS ©) )FarmSee nn 3 rs) fe) 2 & n 2 = ie} loz) g o is) < < Cs) = @ Munters *IP-ights- Intellectual property rights 16
Slide 17: Agenda
17 Agenda Introduction Q3 highlights AirTech Data Center Technologies FoodTech Customer Cases @® Munters
Slide 18: AirTech customer segments
Customer segments, Global leader in air treatment for industry retin; 2021"* 3% 2% Order intake, MSEK* Net sales, MSEK* Adjusted EBITDA margin* 2,453 1,684 14.4% MSEK MSEK % industry Services 2000 2000 20 mData Center lm Components 3 A\ 1500 1500 Regional distribution, +e ro00 1000 10 net sales 2021
Slide 19: Q3 - Very strong demand within Battery
Q3 - Very strong demand within Battery OF -155 ag % order intake = Market Customer segment Q3 2022 Outlook * — Comments Industrial 68% A Demand expected to remain strong ... whereof Battery 48% y Continued strong growth expected, driven by Americas and EMEA ... whereof Food processing 5% @ Solid dem
Slide 20: Selection of market players - mainly small local players
Selection of market layers - mainly small local players mall Medium Large Extra Large BSEK) 2 BSEK) (2-10 BSEK) (>10 BSEK) (couse asia Bs Sinara aes rorogpone: es AS AM AM/AS/EU x. D innovent Nove Ame’ Tic no1oces nycrgpenia SRYSOLUTIONS . 2 § AM AM AM AM ope om: az Ga Drs LX NICHIAS jl Oo a AM/AS E
Slide 21: Q3 - Strong growth in transformative segments
21 Q3 - Strong growth in transformative segments * Order intake increased in all regions, especially battery in Americas & Service * Net sales increased - growth in all regions, especially battery, Service & Components " Services 23% of AT net sales " price increases ~ 5% of AT net sales in Q3 * Adj
Slide 22: Agenda
Agenda Introduction Q3 highlights Airlech Data Center Technologies FoodTech Customer Cases 22 @® Munters
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
Order intake, MSEK* 3,406 1.000 | Q3 G4 Qi Q2 G3 G4 QI G2 G3 20 20 21 21 21 21 22 22 22 Net sales, MSEK* 378 MSEK 400 300 200 : lil Q3_Q4 QI @2 G3 Q4 QI G2 QZ 20 20 21 21 21 21 22 22 22 8 ° y - ta Center Technologies Regional distribution, 2 order intake* Adjusted EBITDA margin* 6.4% mAmericas mEMEA
Slide 25: Q3 - growth in all areas
Q3 —- growth in all areas % order intake = Market AI > 5% +0-1% PF ~15% BA reg Customer Segments Q3 2022 Outlook * Comments Hyperscalers 14% A Colocation 84% A Telco & enterprises 2% wv * Market outlook and comments are indicative and refer to the coming six months 25 Increase in cloud traffic and c
Slide 26: Selection of market players - Munters well positioned for growth
Selection of market players - Munters well positioned for growth * In general, an order in Data Center is a project with a lead time of 9-15 months consisting of several equipment deliveries * Munters well positioned in both North America and Europe Medium Large Extra Large (1-2 BSEK) (2-10 BSEK) (+
Slide 27: Q3 - record high order intake in Americas
Q3 - record high order intake in Americas * Record order intake driven by large orders in Americas of MUSD 239 * Net sales increased — strong growth by co-los in both Americas & EMEA " price increases ~3% of DCT net sales in Q3 * Adj. EBITA margin impacted by; + volume growth in both regions — impac
Slide 28: Agenda
Agenda Introduction Q highlights Airlech Data Center Technologies FoodTech Customer Cases 28 @® Munters
Slide 29: FoodTech: increased sales, challenging market
MSEK 700 600 50 38 40 3 301 38 20 fs) 10 8 ° y reased sales, challenging market Order intake, MSEK* 507 Q3 G4 QI Q2 G3 G4 QI Q2 G3 20 20 21 21 21 21 22 22 22 “Financial figures Q3 2022 MSEK 300 200 100 0 FoodTech is one of the world’s leading suppliers of high-quality, energy-efficient climate contr
Slide 30: FoodTech has a leading dual offering to our customers
30 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 31: Q3 - Americas driving growth
3 . sz I> 5% £0-1% Q3 - Americas driving growth Oo % order intake Market Customer segment Q3 2022 Outlook * Comments Climate solutions 90% Mixed market development = growth in Americas, slow down in EMEA and weak demand in APAC, especially China __whereof Broiler 50% Continued strong demand in Ameri
Slide 32: Selection of market players within Climate Solutions
Selection of market players within Climate Solutions @ scion | COME | YS, Multia Ges” pace . a 2 2 E 2 FU/AS/AM EU/AS/AM EU EU/AS/AM China FU/AS > ABA GigolA 2 E AxASCO aig asm tu jKvuL} s ie} EU/AS/AM AS 8 3 ates ala Coe surname © 8 AS AM 0 [= PLASSON Fancom” 7 ? @ 8 8 EU HSi uP V DouBLeL = & EU AM
Slide 33: Q3 - challenging market environment, stable margin
Q3 - challenging market environment, stable margin 33 Order intake organic decline - Americas grew Digital & Climate solutions. Weak markets in EMEA & China Net sales flat development — price increases compensated increased material & freight costs in all regions. Americas & EMEA grew, APAC declined
Slide 34: Agenda
Agenda Introduction Q3 highlights Airlech Data Center Technologies FoodTech Customer Cases @® Munters
Slide 35: Large orders in the battery segment confirm our strong offer
Large orders in the battery segment confirm our strong offer * 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 — Combining mo
Slide 36: https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
• • • • • • • • https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
Slide 37: 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 38: Record orders confirm our strong position and offer
Record orders confirm our strong position and offer DCT very strong backlog of BSEK 6.7, some large orders received: * March 2022 - order received from leading data center colocation operator in US. — Total value ~ MUSD 115 (incl. SyCool Split & field service work) — Deliveries starting in Q4 2022 t
Slide 39: Our largest orders ever for the delivery of SyCool Split
Our largest orders ever for the delivery of SyCool Split * Munters offers: — high energy efficiency — zero water consumption — reliability — scalability — ease of maintenance and service support — compatible with forms of liquid cooling * Energy efficient, thermosiphon-based dry cooling solutions fo
Slide 40: Strategic investments for growth in Digital Solutions
Strategic investments for growth in Digital Solutions N 7 -()- Munters invests in technology companies and start-ups with the aim to =» | accelerate innovation within digitalization, technology and sustainability 4 BARNTOOLS” O © Munters *loT= Internet of Things 40 **Al=Arificial Intelligence
Slide 41: MTech Systems secures important SaaS contract
MTech Systems secures important SaaS contract * MTech Systems, a company within FoodTech, to deliver it’s Software-as-a- Service (SaaS) solution with an order value of about MUSD 19 to a major US integrator * FoodTech’s strategy is to connect the entire food production value chain with innovative so
Slide 42: 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 43: Appendix
Appendix
Slide 44: Service mainly driven by AirTech today
Service mainly driven by Airlech today Ambition: Share of Service long-term to represent 30 percent of Group net sales F 9 Service as % of total Group net sales * AirTech — generates majority of Service net sales * DCT - minor Service sales, as ; 14% main part of business Green 13% arid . Field inst
Slide 45: Service
Service Munters Service Offering — with our customers all the way REVIEW & RENEW * Smooth transition to new product * Decommissioning RETROFIT & UPGRADE Controls Upgrade Rotor Replacement Rotor Energy Recoverv Fan Upgrade Remote Assist EC Cool 45 RETIRE & RETROFIT & UPGRADE START-UP & WARRANTY START
Slide 46: Service
Service Service ensures quality & efficiency throughout product lifetime Service split 2021 i = Start-up & Warranty = Sustain & Maintain = Retrofit & Upgrade = Review & Renew Spare parts major part of Retrofit & Upgrade Service development ILLUSTRATIVE — _ eee 2018 2019 2020 2021 Start-up & Warranty
Slide 47: Record order intake in the quarter
Record order intake in the quarter * Order intake increased, strong growth in DCT Americas & battery AT. FT Americas grew, offset by weak EMEA & China * Order backlog cont. strong increase * Net sales increased, DCT Americas and battery & Components in AT. FT flat, weak market in China offset by EME
Slide 48: Q3 - Operating working capital positive impact in Q3
Q3 - Operating working capital positive impact in Q3 — Cash flow from operating activities, Net debt / adj. EBITDAx, LTM 1200 Cash flow for the period flow developme 4 800 3 400 2 0 Mic-erm financial torgetrange 1.5x-2.5x -400 1 -800 10) JulJun Oct-Sep Jan-Dec Apr-Mar Jul-Jun OctSep Jan-Dec Apr-Mar
Slide 49: Measures for strategy implementation on track
Measures for strategy implementation on track G ~ * Strategy implementation measures Realized costs and expenses of about MSEK 180 ‘Approx. 75% of savings realized Implementation according to plan, finalization in 2023 Strategy implementation activities to continue, finalization in 2024 < (S) * Tota
Slide 50: Increasing investments to capture market opportunities
50 Increasing investments to capture market opportunities Create a scalable business to capture growth and become more efficient and profitable