MUNTERS INTERIM FOURTH QUARTER AND FULL YEAR 2016 RESULTS
Strong performance in the fourth quarter continuing the trend of profitable growth in 2016
October - December 2016
- Order intake totaled SEKm 1 491 (1 286), an increase of 16% (the same level organically). The order backlog increased by 29% to SEKm 1 741 (1 348).
- Net sales increased by 16% (the same level organically) to SEKm 1 823 (1 575).
- Operating profit increased by 114% and amounted to SEKm 228 (107).
- Adjusted EBITA increased by 95% to SEKm 274 (140), corresponding to an adjusted EBITA margin of 15% (9).
January - December 2016
- Order intake totaled SEKm 6 373 (5 420), an increase of 18% (14% organically).
- Net sales increased by 12% to SEKm 6 040 (5 399) and an organic growth of 8%.
- Operating profit increased by 50% and amounted to SEKm 577 (384).
- Adjusted EBITA increased by 43% to SEKm 781 (544), corresponding to an adjusted EBITA margin of 13% (10).
Events after period end
- On February 1st 2017 Munters completed the acquisition of the US based software company MTech Systems.
- Helen Fasth Gillstedt was appointed to the Board and will be Chairman of the Audit Committee.
- Munters and its owners are currently investigating different strategic alternatives to support further development and growth of the company, including the possibility of an initial public offering of the Company. No decision has been made and the market will be informed if and when any such decisions are made.
Comments from the CEO
ORGANIC GROWTH OF 16% IN THE FOURTH QUARTER WITH CONTINUED MARGIN IMPROVEMENTS
The fourth quarter was another strong quarter for Munters as was the full year 2016. Net sales increased 16% organically in the quarter driven in particular by the strength of the Data Center sub-segment in Europe and a strong performance in Asia across the business areas.
Munters benefits from the strong market demand in Data Center and Asia
The business area Air Treatment continued on its growth path delivering double-digit net sales growth in the quarter. In the Data Center cooling sub-segment we have seen especially strong demand with net sales growing by 122% in 2016, thanks to our innovative technology for significantly improved energy efficiency. Electronics, part of our Industrial sub-segment, saw good demand in the Lithium-ion battery market, particularly in Asia.
For our AgHort business area we continue to believe that the underlying growth drivers of more efficient and safe food production as well as increasing importance of animal welfare remain intact, highlighted by the growth in net sales of 25% for the year, even if we saw a slowdown in the organic net sales growth in the fourth quarter consistent with agricultural investment patterns.
Our business area Mist Elimination had a robust performance in the quarter with strong net sales growth, mainly driven by the Power sub-segment and supported by increasingly stricter environmental legislation.
Overall, we continued to see strong growth in China partly as a result of positive trends for the lithium-ion battery market and the flue-gas emission cleaning market. All business areas showed positive growth in China in the quarter, and for the full year order intake growth exceeded 50%.
It is also encouraging to see that our aftermarket Service business continued to perform well across all regions up 19% to SEKm 649 in 2016, a testament to the significant investments we have made into that business during the last three years.
Strong earnings growth from increased sales and operational excellence
Adjusted EBITA increased to SEKm 274 (140) in the fourth quarter corresponding to an adjusted EBITA margin of 15% (9).
For the full year 2016, adjusted EBITA increased by 43% to SEKm 781 (544) corresponding to an adjusted EBITA margin of 13% (10). The improvement was mainly achieved through increased volumes, a favorable product mix as well as improved operational efficiency in the value chain. During the year, we have made great achievements in further driving operational excellence in our production, procurement and sales processes. On top of this, our long-term investments in growth areas such as Services and Data Center cooling, has yielded good results. We have continued to invest heavily in our organization in 2016, bringing in 171 new employees, and making record high investments in our production facilities around the globe to further improve efficiency.
Platform for continued growth
Munters has a leading position in several attractive global end-markets including Lithium-ion battery, Data Center cooling, Power, Supermarkets, Food and Agriculture. All of Munters’ end-markets are expected to demonstrate resilient and positive growth, driven by population and GDP growth, increased food (and protein) consumption, industrialization, urbanization, and converging living standards globally. In addition, we have a solid emerging markets platform, including significant presence in China and India, which should further accelerate the growth during the coming years.
Munters has a strong track record of synergetic acquisitions and will continue to pursue M&A opportunities in a disciplined and systematic manner to support the delivery of our strategic vision to provide the perfect climate. Focus will be on targets which expands the portfolio of core technologies, provides new customer access and/or grow our presence in emerging markets. The recent acquisition of MTech Systems is in line with this strategy and illustrates how we continuously work to further differentiate our offering to competition and thereby drive long-term growth.
We are looking forward to the future of Munters with great confidence.
John Peter Leesi, CEO
For more information:
John Peter Leesi, CEO Munters Group
Phone: +46 8 626 63 60
Anna Beausang, Director Corporate Communications
Phone: +46 70 698 63 60
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, the largest being the food, pharmaceutical and data center sectors. 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 reports annual net sales in the region of SEK 6 billion and is owned by Nordic Capital Fund VII.