July-September
- Record high order intake driven by business area Data Center Technologies (DCT) in Americas and the battery sub-segment in business area AirTech. Business area FoodTech grew in Americas, offset by weakened markets in EMEA and China.
- AirTech and DCT had strong organic net sales growth, whereas FoodTech had a flat development with weakened markets in China, offset by growth in US and EMEA.
- Price increases were offset mainly by business mix change in DCT, lower volumes for FoodTech in China and increased material and freight costs.
- Leverage increased mainly because of the increased IFRS 16 debt related to leases of new factories in Virginia, US, and the Czech Republic as well as a negative impact from exchange rates, mainly in SEK to USD. This was partly offset by a positive effect from increased operating earnings.
- Cash flow from operating activities was at a higher level as operating earnings increased and operating working capital was at a lower level.
January-September
- Order intake increased mainly driven by DCT and the battery sub-segment and Service in AirTech. FoodTech had good growth in Americas, offset by a weak development in EMEA and China.
- In the first quarter Munters suspended all business activities with Russia due to the war in Ukraine.
- AirTech and DCT had strong organic net sales growth, whereas FoodTech had a flat development with weakened market in China, offset by growth in US and EMEA.
- Net price increases were offset mainly by business mix change in DCT, lower volumes for FoodTech in China, costs due to component shortages, and operational challenges.
- Leverage increased mainly due to the acquisition of Edpac at the beginning of the year, an increase in IFRS 16 debt related to leases, a negative impact from exchange rates, working capital build-up as a consequence of the strong volume growth and the dividend payout.
CEO comments:
Record orders in the quarter confirm our strong position and offer
In the quarter, we signed our largest orders ever in both the data center and battery areas as well as several other large orders. This is clear proof that we both have a solid market position with a highly appealing offer and that we operate in markets with strong underlying growth. The increasing demand for our high-performance, energy efficient solutions for indoor climate control and cooling is driven by the market transformation resulting from electrification as well as increasing digitization.
As a result of these megatrends, our strong position as well as our price increases over the year sales increased 22 percent organically in the quarter, driven by business areas AirTech and DCT. The development in our third business area, FoodTech, was negatively impacted by weaker demand in China.
Continued stable margin despite increased investments for growth
The adjusted EBITA margin improved from the previous quarter. The margin was impacted by business mix change in mainly DCT compared to last year. In addition, profitability in FoodTech was affected by lower volumes in China. The EBITA margin was also in this quarter negatively impacted by certain shortage of components and consequently, longer lead times, especially noticeable in DCT. The inflationary pressure continues, and we adjust our prices to compensate for this. Operating working capital was also in this quarter on a high level as a consequence of strong order intake.
Increased capacity to meet growing demand
I’m very proud of the two new manufacturing plants we inaugurated in the quarter to meet the strong demand in the battery and data center markets. The new plant that targets the battery market is located in the Czech Republic and the one that serves data centers in the US. These new units add production capacity and increases manufacturing efficiency to secure deliveries of our leading climate solutions to European and American customers. FoodTech is continuing its strategic work to enhance its digital solutions and connect the entire food production value chain. In the quarter, a strategic partnership was initiated with US-based BarnTools where we will collaborate in developing unique IoT-solutions and sensors for farmers and food producers.
Clear strategy for value-creating growth
At Munters around the world, a fantastic job is done every day to improve, exceed customers' expectations and simultaneously deal with the challenges of inflation and component shortages. At the same time, we are carrying out a transformation of the group to become more efficient, more flexible, and even more innovative. The result is strong growth, a strengthened position and confidence that Munters will continue to create value for its investors, employees, and society.
Klas Forsström, President and CEO
Information about webcast
You are welcome to join a webcast or telephone conference today at 9:00 AM CEST, when President and CEO Klas Forsström, together with Group Vice President and CFO Annette Kumlien, will present the report.
Webcast
https://ir.financialhearings.com/munters-q3-2022
Conference call
Please, dial-in using one of the numbers below and the pin code:
SE: +46 8 505 163 86
UK: +44 20 319 848884
US: +1 412 317 6300
Pin code: 2556601#
Contact person:
Ann-Sofi Jönsson
Vice President, Investor Relations and Enterprise Risk Management
Phone: +46 (0)730 251 005
Email: ann-sofi.jonsson@munters.com
This interim report, presentation material and a link to the webcast will be available on https://www.munters.com/en/investor-relations/
This information is information that Munters Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 AM CEST on October 21, 2022.
About Munters Group
Munters is a global leader in energy-efficient air treatment and climate solutions. Using innovative technologies, Munters creates the perfect climate for customers in a wide range of industries. Munters has been defining the future of air treatment since 1955. Today, around 3,755 employees carry out manufacturing and sales in more than 30 countries. Munters Group AB reported annual net sales of more than SEK 7 billion in 2021 and is listed on Nasdaq Stockholm. For more information, please visit www.munters.com.
