Munters Group Ab · OMXSTO:MTRS
Munters Group Ab — Q1 2023 Earnings Presentation
47 slides from Munters Group Ab's earnings presentation, Apr 20, 2023
Slide 1: Munters Investor Presentation April 2023
we _™“ a Munters Investor Presentation April 2023
Slide 2: Agenda
Agenda Q1 highlights Airlech DataCenter Technologies FoodTech Customer Cases @ Munters
Slide 3: World leader in energy-efficient climate solutions
World leader in energy-efficient climate solutions Regional share Q1 Order intake Net sales Order intake Net sales Order intake Net sales i.) GO'GG Munters offers climate solutions where controlling indoor humidity, temperature and energy efficiency is mission-critical. Our solutions reduce customer
Slide 4: Core technologies
4 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 5: We deliver business critical solutions to a broad range of industries
We deliver business critical solutions to a broad range of industries Distribution Net sales Q1, 2023 Data Center AirTech .. and Greenhouses P 9 Technologies 63% 9 21% Constant humidity solutions for Climate & hygiene control for the Pharmaceutical industry the Food production industry Rotors and ot
Slide 6: 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 30 ° 12 20 8 10 8 “10 0 017 2018 2019 2020 2021 2017 2018 2019 021 2022 Target: Annual org
Slide 7: Our purpose - For customer success and a healthier planet
Our purpose - For customer success and a healthier planet As of Q1 2023" As of FY 2022 79% 14% 52% 0.62 (62) (16) (2021: 55) (2021: 0.89) Percentage women Allbright CDP rating 2023 leaders Even gender distribution in mgmt B 22% team placed us on the Greenstock (22) Exchange List (2022: c) Total Reco
Slide 8: Agenda
Agenda Introduction Airlech DataCenter Technologies FoodTech Customer Cases @ Munters
Slide 9: A quarter with strong, profitable growth
A quarter with strong, profitable growth MSEK —— Order Intake 6000 4000 2000 Ql Q2 @3 @4 QI Q@2 @3 @4 Qi 2021 2022 2023 Order intake, Q1 FX-adj. -43% (org. -44%): * underlying solid market activity * no larger orders received in the quarter * excl. major orders received in Q1 2022!, order intake dec
Slide 10: Climate change & digitalization are strong market drivers
Climate change & digitalization are strong market drivers Climate change Digitalization Population growth Higher production demands Current market situation * Geopolitical instability * Macroeconomic uncertainties + Inflationary pressure * Eased supply chain constraints Consequences and opportunitie
Slide 11: Climate change & digitalization are strong market drivers
Climate change & digitalization are strong market drivers 13 MSEK 7 000 6000 5 000 4000 3.000 2.000 1.000 (0) mam Remaining business Order intake Q1 2021 =Q22021 Q32021 @42021 mmm Service Ql 2022 Battery i | Q22022 32022 DCT - large orders Q4 2022 Net Sales Ql 2023 Strong growth in prioritized areas
Slide 12: Munters focus areas
14 Munters focus areas ILLUSTRATIVE Direction of positioning - 2023 and beyond Profitability FoodTech Digital Solutions Data Center Technologies Growth Growth Profitability Stability Focus areas 2023 and beyond AirTech * Continued progression on profitable growth * Service & energy efficent solution
Slide 13: Margin improvement in all business areas
Margin improvement in all business areas Group adj. EBITA margin impact 2022 adj. EBITA % Ql 9.5 Volume Net pricing Operational efficiency Supply chain Regional mix ++ ++ + Strategic investments 2023 adj. EBITA % 12.3 Main factors affecting adj. EBITA margin in Q1: Strong volume increase driven by D
Slide 14: Agenda
Agenda Introduction Q1 highlights DataCenter Technologies FoodTech Customer Cases @ Munters 16
Slide 15: Global leader in air treatment for industry
Global leader in air treatment for industry MSEK 2500 2000 1500 1000 50 Ss ° Order intake, MSEK* 8,508 Ql @2 G3 Q4 QI @2 @3 a4 QI 2021 2022 2023 Financial figures Q1 2023 1™ Net sales, MSEK* 7,442 1500 1000 500 | 0 Ql Q2 @3 G4 QI Q2 @3 a4 QI 2021 2022 2023 ° 0 ‘Adjusted EBITDA margin* 15.3% \ Ql @2
Slide 16: AirTech — Continued strong market outlook
Airlech — Continued strong market outlook % order intake = Market Customer segme: Q1 2023 Outlo Comments Industrial 50% A Overall strong outlook _.whereofbattery 23% A “ vo acne nulegee trend and investments in new battery ..whereof food processing 8% a Continued stable market outlook ... whereof ot
Slide 17: Selection of market players - mainly small local players
Selection of market layers - mainly small local players all Medium Large 1 BSEK) (1-2 BSEK) (2-10 BSEK) Extra Large gRer =@t EU EU EU EU AM —-AM/AS/EU ” x] D> ac ro] = = Ey Fo small business within « large company/conglomerate (>10 BSEK) Olen GQ) cooanse 3 ‘* AS AM nue 7G LD Nove Are Tea sours fisai
Slide 18: Strong profit and net sales growth
Strong profit and net sales growth * Ol +1% (FX-adj), stable development in all regions; = Components good growth all regions ™ Services growth in Americas & EMEA, slightly offset by APAC * NS +35% (FX-adj), strong growth in all regions; = Battery good growth in APAC & EMEA = Components good growth
Slide 19: Munters acquires Hygromedia and Rotor Source
Munters acquires Hygromedia and Rotor Source “With these acquisitions we strengthen our position as a leading supplier of desiccant dehumidification technology systems for numerous industrial processes “ * Hygromedia LLC - manufacturer of desiccant dehumidification media. Specializes in components,
Slide 20: Agenda
Agenda Introduction Q1 highlights Airlech Data Center Technologies FoodTech Customer Cases @ Munters 22
Slide 21: Data Center Technologies
ta Center Technologies ble cooling solutions that facilitate digitization ee el J f > i : 4 Order intake, MSEK* Net sales, MSEK* > Adjusted EBITDA margin* 4,668 1,834 8.7% v 1 ° mHyperscolers MSEK % = Colo ; 20 ‘ls Telco & enterprises 600 Leg 500 15 Regional distribution, “00 net sales 2.000 300 10
Slide 22: DCT — stable underlying market demand
24 DCT — stable underlying market demand 156 Bos Customer Segments Hyperscalers — cloud suppliers with the critical computer and network infrastructure necessary to build robust, scalable application environments Colocation - manage data centers where companies can rent out the facilities Telco & en
Slide 23: Selection of market players - Munters well positioned for growth
Selection of market players - Munters well positioned for growth An order in DCT is generally: * a project with a lead time of 9-15 months * consists of several equipment deliveries Small Medium Large Extra Large (<1 BSEK) (1-2 BSEK) (2-10 BSEK) (>10 BSEK) . 4 CAADN’) stentane & a GAD) rome 5 GE 5 2
Slide 24: Significant net sales & margin increase
Significant net sales & margin increase ° O| declined -86% (FX-adj) but underlying 26 long-term demand still strong; = Excl. large order of ~MUSD 115 received Q1 2022, decline of -67% (FX-adj) = Current market activity somewhat dampened due to orders placed in advance previous quarters NS increased
Slide 25: Agenda
Agenda Introduction Q1 highlights Airlech DataCenter Technologies FoodTech Customer Cases @ Munters 27
Slide 26: FoodTech
FoodTech A world leader in climate control systems for food production Greece, net sales 2022 Order intake, MSEK* Net sales, MSEK* Adjusted EBITDA-margin* 2,124 2,219 5.9% , , . () MSEK MSEK 700 20 mBroiler mSwine % mlayer Digital Solutions 600 300 1m Greenhouse Dairy 15 Other 500 400 200 Regional d
Slide 27: 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 28: FoodTech — US good demand
30 a >5% £0-1% FoodTech — US good demand are ae 9 order intake Market Customer segment Q1 2023 Outlook * Comments ' . 9 Mixed market development - growth in Americas, slow down in EMEA and Climate Solutions 88% : ‘ : weak demand in APAC, especially China __whereof Broiler 48% a Continued strong dema
Slide 29: 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 30: Actions taken to improve margin coming through
Actions taken to improve margin coming through 32 O! declined -23% (FX-adj); = Excl. large SaaS order of MUSD 19 in Q1 2022, order intake increased +4% (FX-adj) = Americas, both DS* & CS** stable development. CS mainly in the US broiler & layer segments * China & EMEA continued weak markets NS incre
Slide 31: FoodTech on a challenging market
33 FoodTech on a challenging market & DIGITAL SOLUTIONS € CONTROLLERS: & SENSORS: CLIMATE SOLUTIONS. EQUIPMENT *ARR = Annualized Recurring Revenues Americas: stable situation with pockets of growth for equipment, strong growth for DS EMEA: Weak market due to war in Ukraine & inflationary pressure AP
Slide 32: Agenda
Agenda Introduction Q1 highlights Airlech DataCenter Technologies FoodTech Customer Cases @ Munters
Slide 33: Good growth in the battery segment
Good growth in the battery segment Two large orders received in Q4 * Q4- toa multinational automotive manufacturer Lithium-ion battery production . * Total value ~ MUSD 54 (incl. systems developed apitinalllastiemsy cpl @ysetiomene specifically for battery segment & field service) achieved through m
Slide 34: https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
• • • • • • • • https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
Slide 35: Our highly energy-efficient SyCool Split uses zero water
Our highly energy-efficient SyCool Split uses zero water SyCool Split 38 Energy efficient, thermosiphon-based dry cooling solutions for data centers Minimizing environmental impact of data centers through free cooling without the use of water. Winner of Mission Critical magazine's 2021 Top Tier Prod
Slide 36: 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 37: Value chain perspective on our climate impact
Value chain perspective on our climate impact Munters is mapping and reporting 100% of Scope 1, 2 and part of Scope 3 Munters major emission impact is related to Scope 3 and use of our products * We are increasingly conducing of our products to get an assessment of the product's carbon footprint In
Slide 38: Our fans handle even the toughest conditions
Our fans handle even the toughest conditions * High temperatures can cause major problems for poultry farmers * Munters Saturn FIVE extraction fans, can mitigate extreme weather situation & stabilize production * Paolo Furegon, chicken farmer, Italy: — Capacity of 2 million chickens a year — Replace
Slide 39: MTech Systems secures important SaaS contract
MTech Systems secures important SaaS contract * MTech Systems, within FoodTech, deliver SaaS solution with order value of ~MUSD 19 to a major US integrator * MTech’s advanced information management tool consolidates numerous supply-chain operations, from farms to food production facilities * Contrib
Slide 40: Appendix
Appendix
Slide 41: Munters on a journey
Munters on a journe * AT & FT delivery on strategic review * New business area: DCT * Acquisition in all business areas * Updated financial targets Efficiency improvement initiatives continue * Secure end-to-end information/value chain efficiency across all Munters * Working capital focus * Increase
Slide 42: Strong service growth in 2022
Strong service growth in 2022 Ambition: Share of service long-term to represent 30 percent of Group net sales » Airlech — generates majority of Service net sales * DCT = minor Service sales, as main part of business Greenfield installations Service development % of net sales . . 15% a Not reported a
Slide 43: Munters Service Offering — with our customers all the way
Munters Service Offering — with our customers all the way - hale “© (ie <a y START-UP & WARRANTY REVIEW & RENEW * Installation Support/Assembly * Smooth transition to new Supervision roduct * Startup services & Guaranteed . 5 we y performance ecommissioning RETIRE & START-UP & * — Primacaire™ - Re W
Slide 44: Service
Service Service ensures quality & efficiency throughout product lifetime Service split 2021 Service development Life Cycle Value on Equipment ie ILLUSTRATIVE — _ ee 2018 = 2019» 2020S 2021 sf fe PF ge we s é é . é = Start-up & Warranty = Sustain & Maintain j Start-up & Warranty Sustain & Maintain *
Slide 45: Strong net sales and strong margins
Strong net sales and strong margins ° O| decreased -43% (FX-adj) as no larger 48 orders were received in the quarter; = Ol decreased -18% (FX-adj) excl. major orders received in Q1 2022! NS increased +40% (FX-adj); = Very strong growth in DCT & battery in AT * Services 13% of total net sales Adj. EB
Slide 46: Cash flow & net debt
Cash flow & vel Preparations for deliveries in large projeds led to increased OWC MSEK Cash flow for the period Net debt / adi. EBITDAx, LTM | 5 200 — Cash flow from operating 4 activities 800 4 400 2 0 5 1 -400 0 -800 0 ee AprMarlublun OetSep on-Dee AprMarJullun OetSep JanDee Apr-Mor peer an Onsen
Slide 47: Inorganic strategies to boost overall growth
51 Inorganic strategies to boost overall growth 2017-2022 Gearing for new growth chapter 3022) s mincalyinvesinenilex an * BarnTools, US (loT & sensor) Technology / Digital * FarmSee, Is (Al) * Qvantum, SE (Heat pumps) Core / Consolidation Services - String of pearls 2 3 3 2 & ” 2 5 D 2 fo] 8 4 < 8