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Munters Q2 2020.png

Munters January-June 2020 interim report – ”Next step in the strategy implementation”

heinä 17, 2020

April-June 2020

  • Order intake increased 2%, currency adjusted 1%.
  • Net sales declined by -6%, currency adjusted -6%, mainly due to a weak development in the industrial segment and in Mist Elimination within business area AirTech. This was partly offset by increasing net sales in business area FoodTech driven by a strong growth in China.
  • The adjusted EBITA-margin was stronger at 14.7% (13.9), mainly because of a higher margin in business area FoodTech.
  • Leverage (net debt/adj. EBITDA, LTM*) decreased to 2.7x from 3.1x end of March 2020.
  • Next step has been decided for implementation of the Munters strategy. The step is related to a sharpening of the customer offering and footprint optimization. The total cost for this step is estimated to MSEK 188. In Q2 MSEK 136 was booked as items affecting comparability (IACs). The remaining cost of MSEK 52 will be booked as incurred. Estimated savings of approximately MSEK 70 from these measures will reach full annual run-rate once the program is implemented.

January-June 2020

  • The outbreak of Covid-19 had a mixed impact on Munters in the first half-year. All production units, except for one minor unit, have been operational throughout the period with only minor disturbances.
  • Order intake decreased -2%, currency adjusted -3%.
  • Net sales declined -5% ,currency adjusted -6%, with lower net sales in both business area AirTech and FoodTech.
  • The adjusted EBITA-margin improved slightly to 11.7% (11.2) because of mitigating actions related to the Covid-19 outbreak and production efficiency improvements. This resulted in an improved gross margin and lower indirect costs.
  • Leverage (net debt/adj. EBITDA, LTM*) decreased to 2.7x from 2.9x at the end of December 2019. The decrease was mainly driven by a strong cash flow and a positive exchange rate effect on outstanding borrowings.

Events after period end

  • Munters has established a new Revolving Credit Facility (RCF) as a precautionary measure in the current challenging business environment. The purpose of the RCF is to serve as a back-up facility. It amounts to MSEK 750 and is secured by a guarantee from EKN, the Swedish Export Credit Agency. Five banks are participating in the syndicate for this RCF with a maturity in 2023.
  • On 16 July, 2020, the Board of Directors of Munters resolved pursuant to the authorisation granted by the annual general meeting held on 7 May 2020, to repurchase Munters shares on Nasdaq Stockholm. The purpose of the repurchase is to secure the delivery of shares to the participants of Munters’ long-term incentive programme which was resolved by the 2020 annual general meeting, and to cover costs related to the programme.


CEO comments

Robust performance in a challenging business environment

During the first six months the Covid-19 outbreak had a mixed impact on Munters. In the second quarter we have experienced that some customers delayed investments and also delays in deliveries. At the same time we have seen pockets of increased demand in industries such as pharma and data centers. Throughout the first six months, all our production units, except one minor unit, upheld production with only minor disturbances. We have continuously been implementing mitigating actions and adjusting our cost base and investments as well as our supply chain. So far we have not had any major disturbances.

Order intake increased organically by 1% in the second quarter, primarily because of an increase in Data Centers US within business area AirTech and a strong demand in the swine segment in China for business area FoodTech. Net sales decreased organically by -6% in the second quarter, mainly driven by lower net sales in the industrial segment in business area AirTech and a weak marine market for Mist Elimination. This was offset by a strong increase in the swine segment for business area FoodTech in China.

The adjusted EBITA-margin improved in the second quarter, driven by a very strong performance in business area FoodTech and a continuous focus by all parts of the organization to streamline indirect costs together with an active mitigation of the effects from the outbreak. We managed to lower our net debt to EBITDA to a leverage of 2.7x. We proactively re-negotiated the current financing during the second quarter, which created more headroom for strategic actions. Together with the additional RCF of MSEK 750 established at the beginning of July we have secured a solid financial position to support the implementation of the refined strategy in the current unstable business environment.

Next step for implementation of strategy has been decided

We continue the implementation of the strategy for Munters and now take a further step focused on sharpening the customer offering and footprint optimization measures. We have decided to exit the non-core part of the commercial business of business area AirTech in the US. We expand part of the Data Center US manufacturing in Texas because of their current strong order backlog. In the Netherlands we consolidate operations. In addition, other measures will be taken to ensure execution of the strategy.

The measures are expected to be implemented within the next 18 months and costs are estimated to MSEK 188, of which MSEK 159 will have cash flow impact. In Q2, MSEK 136, of which MSEK 107 will impact cash flow, have been booked as items affecting comparability (IACs). Additional MSEK 52, all cash items, will be booked as incurred going forward. Estimated savings of approximately MSEK 70 from these measures will reach full annual run-rate once the program is implemented.

Continued low visibility of market demand

We expect a continued challenging business environment with a limited visibility of the effect from the Covid-19 outbreak. We have managed the first six months 2020 in a good way and I I truly want to thank our employees for their dedication and hard work.

Klas Forsström, President and CEO


On 17 July, at 9:00 the President and CEO, Klas Forsström, together with the Group Vice President and CFO, Annette Kumlien will present the report in an audiocast with telephone conference.

More information:

Link to Audiocast: https://tv.streamfabriken.com/munters-q2-2020

Dial-in number for the telephone conference:

SE: +46850558358
UK: +443333009271
US: +18335268384

This interim report, presentation material and a link to the audiocast will be available on https://www.munters.com/en/investor-relations/

Contact person:

Ann-Sofi Jönsson, Head of Investor Relations and Enterprise Risk Management
Phone: + 46 (0)730 251 005
Email: ann-sofi.jonsson@munters.se


This information is information that Munters Group AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.00 CET on July 17, 2020.

Munters Group AB, Corp. Reg. No. 556819-2321

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