January-March 2022:
- Order intake and net sales increased mainly driven by megatrends in digitalization and electrification in business area AirTech.
- The adjusted EBITA-margin was positively impacted by increased customer prices, offset by heightened supply chain constraints due to the war in Ukraine with increased energy, raw material prices and freight costs. Also, a weak Chinese swine market in FoodTech had a dampening effect.
- Leverage (net debt/adjusted EBITDA, LTM*) increased as net debt at end of March increased compared to December 2021. The increase was attributable to increased lending to finance the acquisition of EDPAC in January and inventory build-up as a consequence of volume growth.
- The war in Ukraine has led Munters to suspend all business activities with Russia. Total items affecting comparability (IACs) of MSEK -29 were identified in the first quarter related to the war. IACs of MSEK -18 were recorded as a provision in the quarter and MSEK -11 will be taken as incurred. The majority of the IACs are related to FoodTech and comprises inventory write-downs, a right-sizing severance provision and costs associated with the adaption of the strategy.
CEO comments:
Continued strong order intake driven by growing megatrends
Demand for our energy-efficient climate solutions remains high driven by the strong megatrends of digitalization and electrification. As a result, business area AirTech reported another quarter with record high order intake, including the largest order ever won for Munters. This order, comprising our customized climate control solutions to a leading data center colocation operator in the US, has a value of approximately MUSD 115. The Irish data center equipment manufacturer, EDPAC, which we acquired in January, contributed positively in the quarter. Services continued to show strong growth in line with our growth strategy for this area. Business area FoodTech also had strong growth, driven by good development in Americas, partly offset by continued weak demand in the swine segment in China. MTech Systems, a company within FoodTech, signed two larger contracts comprising its SaaS solution in the quarter, which will further strengthen our leading position in the digitalizing of the food production value chain.
No material effects from the war in Ukraine
The current tragic situation with the war in Ukraine and imposed sanctions on Russia has led Munters to suspend all business activities in Russia for the foreseeable future. Munters has had approximately 1.5% of net sales p.a. in Russia and no employees.
Price increases made in 2021 coming through and adjustment continues
As anticipated, parts of the price increases in 2021 had a positive effect in the quarter. As earlier communicated, most of the price increases done in 2021 will take effect during 2022 due to longer lead times. As a result of the war in Ukraine supply chain constraints were intensified. To reflect this, we continued to adjust our prices in the quarter intending to fully cover increased costs as well as balancing in- and outflow of goods to manage lead times. We expect supply chain challenges to remain as a consequence of the war in Ukraine and lingering effects from the pandemic.
Investments for growth
In the quarter we continued to invest in expanded and optimized production capacity, further enhancement of our leading, innovate offering as well as in increased digitalization of our ways of working. For example, we expanded our research and development competences to ensure a more energy efficient offering.
Focused investments will continue throughout the year, aiming at creating a stable platform needed in order to capture market opportunities and achieve profitable growth.
Finally, I would like to thank all employees for your dedicated and focused work in the challenging times the world is going through right now.
Klas Forsström, CEO and President
Information about webcast:
You are welcome to join a webcast or telephone conference today at 9:00am CEST, when President and CEO Klas Forsström, together with Group Vice President and CFO Annette Kumlien, will present the report.
Webcast: https://tv.streamfabriken.com/munters-q1-2022
Dial-in number for the telephone conference:
SE: +46856642707
UK: +443333009032
US: +16467224903
This interim report, presentation material and a link to the webcast 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.com
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 07.30am CEST on April 22, 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 3,500 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.
