Munters Group Ab · OMXSTO:MTRS
Munters Group Ab — Q4 2022 Earnings Presentation
50 slides from Munters Group Ab's earnings presentation, 2023
Slide 1: Q4 2022 Investor presentation
Munters Q4 2022 — Investor presentation Investor Relations
Slide 2: Agenda
Agenda Q4 & FY highlights Airlech ey DataCenter Technologies FoodTech Customer Cases @ Munters
Slide 3: Sales in numbers
Sales in number World leader in energy-efficient climate solutions es in numb Net sales per business >30 ; area Regional share Sales MSEK Netsoles Net soles 10,386 13% ~ 66% Number of production plants AT- AirTech DCT- Dae Cone Tohei 19 FT-FoodTech Net sales Largest customer segments by net sales Ad
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: 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 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 CDP rating Renewable electricity B 72% (2021: ¢) (2021: 53%) Allbright Total Recordable Even gender distribution in mgmt team placed us on the Greenstock Exchange List Incident rate (TRIR) 1.8 (2021: 1.7) Net sales aligned to the EU Taxonomy
Slide 8: Agenda
Agenda Introduction Q4 & FY highlights Airlech ey Data Center Technologies FoodTech Customer Cases @ Munters
Slide 9: 2022 — Delivering on strategy with record growth
2022 — Delivering on strategy with record growth Strong demand resulting in record order backlog and very strong organic growth Increased capacity to meet growing demand today and in coming years Continued investments in digitization and automation & growth by acquisitions
Slide 10: Q4 - A quarter with organic growth and strong underlying demand
Q4 - A quarter with organic growth and strong underlying demand MSEK 6000 4000 2000 Q4 Ql @2 Q3 Q4 QI Q2 G3 QA 2020 2021 2022 Order intake, Q4 FX-adj. +1% (organic growth -1%): * order intake up +20% FX-adj., excl. DCT cancellation of MSEK 465 Caused by a whole project being stopped or redirected an
Slide 11: PS/PP Al Paper
• • • PS/PP Al Paper • Steel • Coating Cu • • Other •
Slide 12: Munters focus areas
13 Munters focus areas Profitability ILLUSTRATIVE Direction of long-term positioning - 2023 and beyond FoodTech Digital Solutions Data Center Technologies Growth Stability Focus areas 2023 and beyond AirTech * Continued progression on profitable growth * Service & energy efficent solutions key drive
Slide 13: Increased investments in digitization and automation
Increased investments in digitization and automation Group adj. EBITA margin impact 2021 adj. EBITA % Q4 10.6 Volume Net pricing Operational challenges Supply chain Investments Business & regional mix ++ ++ 2022 adj. EBITA % 10.1 Main factors affecting adj. EBITA margin in Q4: * Positive impact from
Slide 14: Inorganic strategies to boost overall growth
16 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
Slide 15: Agenda
17 Agenda Introduction Q4 & FY highlights Airlech Data Center Technologies FoodTech Customer Cases ey @ Munters
Slide 16: Global leader in air treatment for industry
Global leader in air treatment for industry MSEK 2500 2000 1500 1000 50 Ss ° Order intake, MSEK* 8,399 Q4 QI Q2 G3 Q4 QI Q2 G3 a4 2020 2021 2022 * Financial figures FY 2022 MSEK 200 1501 1001 500 10 10 10 8 ° Net sales, MSEK* 6,830 Q4 QI Q2 G3 G4 Qi @2 G3 a4 2020 2021 2022 % 20 15 10 ‘Adjusted EBITD
Slide 17: Order intake strong in all customer segments
Order intake strong in all customer segments O55 19 Customer segme: Industrial ...whereof battery ... whereof food processing ...whereof other Components * * Clean Technologies Commercial Services % order intake FY 2022 59% Market Outlook * 37% 7% 15% 11% 6% 4% 20% * Market outlook and comments are
Slide 18: Selection of market 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 19: Strong growth in Battery & Services
Strong growth in Battery & Services Q4 comments: * Ol increased in all regions = Battery strong all regions, especially Americas (2 large + 32 8 orders, MUSD 54) Order intake 2,642 1,749 1 1 8,399 | 5,842 ® Services good growth, mainly Americas Order backlog 4,698 | 2,796 4,698 | 2,796 3 Net sales 2
Slide 20: 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 21: Agenda
Agenda Introduction Q4 & FY highlights a e Airlech Data Center Technologies FoodTech Customer Cases @ Munters 23
Slide 22: Data Center Technologies
ta Center Technologies Customer distribution, net sales* ‘ Order intake, MSEK* Net sales, MSEK* = Adjusted EBITDA margin* 6,245 1,401 6.0% ’ , WD) mHyperscalers MSEK % = Colo 500 20 ‘ls Telco & enterprises Leg 400 1s Regional distribution, 300 net sales* 10 200 5 100 ooolll = 0 5 Q4 QI Q2 QB Q4 Ql Q
Slide 23: 2022 strong demand in Colocation
° . AI > 5% +0-1% 2022 strong demand in Colocation oie % vn order intake Market Customer Segments FY 2022 utlook * Comments Hyperscalers - cloud suppliers with the critical Increase in cloud traffic and connectivity services continues to drive growth. GEMMEGMEIMEN EAS 5% => Hyperscalers are recalibr
Slide 24: 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 25: Strong net sales growth, driven by colocation in Americas
Strong net sales growth, driven by colocation in Americas Q4 comments: Q4 @4 Q k 9 2022 2021 Organic a * Ol increased +6% FX-adj., excl. cancellation of MSEK f MSEK 465* Order intake 30 361 131 9 31 6,245 | 1,051 * Excl. cancellations both Americas & EMEA grew Order backlog 5,937 703 5,937 | 703 ° N
Slide 26: Customer rescopes data center projects and design
Customer rescopes data center projects and design Order cancellation for DCT in Q4: SyCool Split 28 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 ma
Slide 27: Technology shift ongoing in the cooling market
29 Technology shift ongoing in the cooling market DataCenter Magazine says “Munters has a pivotal impact on the sustaina of the e' Source: DataCenter Magazine re industry at large Operators and colocation require critical cooling technology to become more efficient, competitive and sustainable. Impr
Slide 28: Agenda
Agenda Introduction Q4 & FY highlights a e Airlech Data Center Technologies FoodTech Customer Cases @ Munters 30
Slide 29: World leader in climate control systems
world leader in climate control syste duction ~.. FoodTech is one of the world’s leading suppliers of climate control systems for livestock farming and greenhouses, as well as software to control and optimize the entire food production value chain. Net sales, MSEK* Order intake, MSEK* 2,242 2,211 MS
Slide 30: FoodTech has a leading dual offering to our customers
32 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: Challenging market in Climate Solutions
33 Challenging market in Climate Solutions O15 Bm % order intake Market Customer segment FY 2022 look * Climate Solutions 77% _..whereof Broiler 46% A ... whereof Swine 13% SY ...whereof Layer 9% ...whereof Greenhouse 5% A whereof Dairy 4% Digital Solutions 23% ra * Market outlook and comments are i
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: Stable net sales in challenging markets
Stable net sales in challenging markets Q4 comments: * O! declined = EMEA & China continued weak markets = Americas grew: DS*up, CS** flat * NS declined * Price increases ~8% of FT net sales = Americas: DS growth, CS flat with growth in broiler & layer = EMEA declined due to the overall weak market
Slide 34: FoodTech on a challenging market
36 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 35: Agenda
Agenda Introduction Q4 & FY highlights a e Airlech Data Center Technologies FoodTech Customer Cases @ Munters 7
Slide 36: Good growth in the battery segment
Good growth in the battery segment Two large orders received in Q4 * @4- toa multinational automotive manufacturer * Total value ~ MUSD 54 (incl. systems developed specifically for battery segment & field service) * Deliveries: Q3 2023 - Q4 2024 Lithium-ion battery production optimal battery quality
Slide 37: https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
• • • • • • • • https://www.munters.com/en/campaigns/airt-campaigns/clean-technologies
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: 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 42. **AlsAificial Intelligence
Slide 40: 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 41: 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 42: Appendix
Appendix
Slide 43: 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 44: Munters Service Offering
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 45: 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 46: Strong organic net sales growth & underlying demand
Strong organic net sales growth & underlying demand Q4 comments: Change (%) * O| strong (+20% FX-adj. excl. DCT cancellation): CH Aer) || CH zierA) rowth = AT strong, 2 large battery orders . us een = DCT underlying good demand excl. cancelled orders Ouutertittels SKS 2(S05 i 2 " PSEA 2-018 " FT, Ch
Slide 47: Leverage
Leverage Strong focus on cash flow management OWC/net sales Cash flow development, LTM* Development of leverage x“ sek Cash flow forthe period Net debt / adi, EBITDAx, LTM 1s 1200 — Cash flow from operating 4 activities ce ano 19 fnoncoltorastconge19:10% _ 400 2 5 0 1 -400 8 a we +800 ° rae Parti Ha
Slide 48: Measures for strategy implementation on track
Measures for strategy implementation on track ~ * Strategy implementation measures Realized costs and expenses of about MSEK 180 Approx. 75% of savings realized Implementation according to plan, finalization in Q1 2023 All implementations initiated and will be closed during the year < (S) * Total co
Slide 49: Increasing investments to capture market opportunities
52 Increasing investments to capture market opportunities Commercial excellence Digitalization Innovation Manufacturing excellence Investing in people 2022 Increased corporate costs: + ERP project * Rollout of HCM system Create a scalable business to capture growth and become more efficient and prof
Slide 50: 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