Slide 1: Munters Q2 report 2020
MUNTERS Q2 report 2020 Klas Forsström, President and CEO Annette Kumlien, GVP and CFO
Slide 2: Agenda
Agenda Highlights second quarter 2020 Implementation of strategy Second quarter 2020 results Summary 2
Slide 3: Highlights Q2 2020
Highlights Q2 2020 Robust performance Active mitigation of Covid-19 effects Strategy implementation Order intake Net sales MSEK MSEK +2% -6% 2000 2000 1500 1500 1000 1,840 1,870 1000 1,877 1,773 500 500 0 0 Q2 2019 Q2 2020 Q2 2019 Q2 2020 • Order intake increased organically by +1% • Some customer d
Slide 4: Lithium battery factory orders received – Q2
Lithium battery factory orders received – Q2 • Gigafactory for battery production in northern Sweden ‒ MSEK 60 order for climate solutions to the first phase ‒ Based on Munters DSS* system, ensures correct climate and humidity in 11 dry-rooms ‒ Munters chosen for technical knowledge and contribution
Slide 5: High order intake driven by strong performance in China
High order intake driven by strong performance in China Strong performance in China • Munters has during the last 5 years built up a strong local presence in the Chinese agricultural market • Strong brand built on deep application knowledge, high quality and excellent reliability • Chinese market is
Slide 6: Robust demand driven by Asia
Robust demand driven by Asia Americas Regional split Americas EMEA APAC • AirTech had a good development of Data Centers US and Share of total order intake 39% 37% 24% Services as well as in the sub-segment Pharma • FoodTech had a weak development, primarily driven by the Y/Y change in %* -8% -1% 28
Slide 7: Agenda
Agenda Highlights second quarter 2020 Implementation of strategy Second quarter 2020 results Summary 7
Slide 8: Focus in 2020 and beyond
Focus in 2020 and beyond Purpose: For customer success and a healthier planet Strategic priorities: Focus areas Customers Improve go-to-market models and pricing strategies Focus investments in R&D and product portfolio alignment Innovation and adjustment Markets Growing in prioritized markets and s
Slide 9: Next step in strategy implementation
Next step in strategy implementation Sharpening the customer offering and footprint optimization • Exit non-core part of the commercial business in the US • Expand Data Centers US manufacturing in AirTech in Texas • Consolidation of operations in the Netherlands • Other measures to ensure execution
Slide 10: Agenda
Agenda Highlights second quarter 2020 Implementation of strategy Second quarter 2020 results Summary 10
Slide 11: Q2 2020 vs. Mid-term targets and PY
Q2 2020 vs. Mid-term targets and PY Mid-term Q2 Q2 1 targets 2019 2020 Net sales growth 5% 4% -6% Org. growth p.a. over a business cycle 2 Adjusted EBITA-margin 14% 13.9% 14.7% 3 Capital structure (LTM*) 1.5x- 3.8x 2.7x (Leverage: Net debt / adj. EBITDA) 2.5x *LTM = Last Twelve Months 11
Slide 12: Group: Robust performance in a challenging market
1 Net sales growth Group: Robust performance in a challenging market Order intake Order backlog Net sales Quarterly net sales growth MSEK MSEK MSEK +2% +8% -6% 20% 2000 3000 2000 15% 2500 1500 1500 2000 10% 1000 1,840 1,870 1500 2,453 2,653 1000 1,877 1,773 5% 1000 500 500 0% 500 Q3 Q4 Q1 Q2 -5% 0 0
Slide 13: AirTech: Strong growth in Data Centers US
1 Net sales growth AirTech: Strong growth in Data Centers US Order intake Order backlog Net sales Quarterly net sales growth MSEK MSEK MSEK -3% 25% 1400 2500 -9% +6% 1400 20% 1200 2000 1200 15% 1000 1000 10% 800 1500 1,264 1,231 800 1,324 1,207 5% 600 1000 1,883 1,997 600 0% 400 400 500 -5% Q3 Q4 Q1
Slide 14: FoodTech: Strong growth in China
1 Net sales growth FoodTech: Strong growth in China Order intake Order backlog Net sales Quarterly net sales growth MSEK +13% MSEK MSEK +15% 700 700 700 +2% 6% 600 600 600 4% 500 500 500 2% 400 400 400 582 656 570 656 300 0% 300 300 563 575 -2% Q3 Q4 Q1 Q2 200 200 200 2019 2019 2020 2020 -4% 100 100
Slide 15: Improved adjusted EBITA Q2 2020
2 Adjusted EBITA-margin Improved adjusted EBITA Q2 2020 Adj. EBITA Adj. EBITA-margin AirTech FoodTech MSEK -1% MSEK MSEK 300 15.1% % 250 15.0% 16% 250 17.1% 20% 16 13.9% 14.7% 18% 250 14% 15.2% 14 200 200 16% 12% 200 12 14% 150 10% 150 12% 262 260 10 150 8% 10% 8 100 6% 100 8% 100 6 199 181 6% 4 4%
Slide 16: Execution of Strategy
2 Adjusted EBITA-margin Execution of Strategy Major impact from measures taken in AirTech Items Affecting Comparability (IACs)* Exit non-core part of commercial business • Exit non-core part of the commercial business in the US within MSEK business area AirTech 160 138 Expansion of manufacturing 140
Slide 17: Execution of strategy
2 Adjusted EBITA-margin Execution of strategy Measures implemented over next 18 months Total costs (IACs) Run-rate savings MSEK MSEK 200 30 150 70 30 100 158 50 106 52 0 Q2 2020 After Q2 2020 Total Total Cash Non-Cash Time Savings • Expected to be implemented within next 18 months • Estimated to abo
Slide 18: Cash flow development
3 Capital structure Cash flow development Cash flow development, LTM* Cash flow for the period, Q2 2020 MSEK Cash flow from operating activities MSEK Cash flow for the period 1,000 300 250 85 -56 800 82 -85 200 600 150 83 400 100 -284 200 50 102 0 0 -50 -200 -100 Operating Reversal Changes in Financ
Slide 19: Continued improved leverage in Q2
3 Capital structure Continued improved leverage in Q2 Cash conversion (OCF*/Adj. EBITA) Development of leverage 80% Net debt / EBITDAx 4,5 60% 4 3,5 40% 3 2,5 20% 2 0% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 June 2019 Sep. 2019 Dec. 2019 March 2020 June 2020 • Strong cash generation and cash
Slide 20: Agenda
Agenda Highlights second quarter 2020 Implementation of strategy Second quarter 2020 results Summary 20
Slide 21: Robust performance in a challenging business environment
Robust performance in a challenging business environment • Growth in order intake, adj. EBITA-margin improvement as well as lower leverage • Current healthy order backlog • Visibility of the effect of the Covid-19 outbreak limited • We are well positioned in a long-term growing market driven by clim
Slide 22: Questions & Answers
Questions & Answers @ Munters