Munters Group AB: Overall record performance achieved for the year, while investing for the future

October-December 2024:

• Order intake decreased -23% (-29% organic) with strong growth in FoodTech offset by a negative organic development in AirTech and Data Center Technologies (DCT).
• Net sales grew +19% (+10% organic) through strong growth in DCT and FoodTech, whereas AirTech remained flat.   
• The adj. EBITA margin was stable, supported by strong net sales growth in DCT and FoodTech whereas AirTech was negatively impacted by increased uncertainty in the battery market, resulting in under-absorption as well as ongoing investments in our global footprint.  
• Cash flow from operating activities improved related to positive development of working capital. OWC/net sales improved to 10.2%, within our target range of 13-10%.
• Net debt in relation to adj. EBITDA increased to 2.3x mainly as a result of acquisitions financed through debt.
• Items affecting comparability (IAC) increased to MSEK    -117 (-49).  An IAC charge for restructuring activities of MSEK 66 was recorded in AirTech, reflecting various measures identified and implemented to mitigate the weaknesses in the battery sub-segment.
• Earnings per share, before and after dilution, was SEK 0.89 (0.30) in the fourth quarter.

January-December 2024:

• Order intake was flat +1% (-4% organic) driven by strong growth in FoodTech and stable development in AirTech. DCT declined due to a reduction in large orders.
• Net sales grew +11% (+5% organic) driven by strong growth in DCT and FoodTech, while AirTech showed flat development.
• The adj. EBITA margin improved due to strong net sales growth in DCT and FoodTech and a positive effect from product mix in AirTech as deliveries on major orders were finalized.
• Cash flow from operating activities improved during the year, related to increased operating earnings and positive development of working capital.
• Net debt in relation to adj. EBITDA increased slightly primarily driven by acquisitions financed through debt mitigated by strong operating cash flow.
• IAC increased to MSEK -240 (-96), mainly due to increased costs for restructuring activities and costs related to the strategic review in FoodTech, as well as M&A activities.
• Earnings per share, before and after dilution, was SEK 5.33 (4.30) for the full year.

Events after the close of the period

• In January 2025, the minority shareholders of MTech exercised the put option with a fair value of MSEK 1,142 per 31 December 2024. This transaction will result in Munters becoming the sole owner, 80% of the transaction price is expected to be paid in the first half of 2025 and the remaining 20% in the first half of 2026. 
• The Board of Directors proposes a dividend of 1.60 SEK (1.30) per share totaling a dividend of MSEK 292 (237) to be paid in two equal installments. This represents 30% (30%) of net income in 2024.

CEO comments

A year of progress: Strengthening the foundation for future growth

In 2024, we made significant achievements in strengthening our market position, and I sincerely thank all employees for their hard work and dedication. Our strategic focus in recent years - prioritizing growth, optimizing our footprint, and enhancing operational efficiency - have resulted in strong overall performance. Continued good demand and successful acquisitions led to an 11 percent increase in net sales for the year. Revenues reached a record high in 2024, marking our best-ever full-year performance with an adjusted EBITA margin of 15.1 percent.

Driven by higher profits and positive development of working capital, cash flow from operating activities improved. We continue to prioritize efforts to strengthen our financial resilience through enhanced cash flow management and reductions in working capital. Leverage increased slightly during the year, primarily driven by our active M&A strategy, including both acquisitions and minority investments. In AirTech, we acquired Airprotech, an Italian manufacturer of systems to abate volatile organic compounds. In DCT, we acquired Geoclima, an Italian manufacturer of air- and water-cooled chillers. In FoodTech, we made two controller related acquisitions: Automated Environments, a US-based company specializing in automated control systems for the layer industry, and Hotraco, a Dutch developer of control systems and sensors for the agricultural sector. The acquisitions in FoodTech highlight our strategic focus on growing the digital business through software, controllers, sensors and IoT in this business area going forward.

Mixed fourth quarter: Positive sales and stable margin despite weakened demand

Order intake was mixed in the fourth quarter. Overall order intake declined, except for FoodTech, which saw growth. DCTs order intake declined as the same quarter last year included large orders of approximately BSEK 2.2. However, the underlying demand for our cooling solutions within DCT remains strong across key markets, as evidenced by a 60 percent organic increase in small and medium-sized orders in the quarter. In AirTech order intake declined, mainly due to a continued weak battery sub-segment across all regions. All business areas contributed to the net sales growth of 19 percent, especially DCT and FoodTech. In FoodTech the SaaS revenue (ARR) in Digital solutions grew by 46 percent in the quarter. The adjusted EBITA-margin was at the same level as last year, supported by strong improvements in DCT and FoodTech. However, lower demand from the battery sub-segment resulted in under-absorption, adversely impacting AirTechs margin. This corresponded to a negative effect on AirTechs adjusted EBITA-margin of approximately -3 percent in the quarter.

We expect the weakness in the battery market to remain throughout 2025. In light of this, and the development in 2024, AirTech has identified and implemented various measures to strengthen the margin going forward. We anticipate that this will mitigate the weaknesses and strengthen AirTechs profitability from current levels during the second half of 2025. We will continue to monitor this situation closely, taking further measures if needed.

Investing to stay ahead of the curve

We continue to drive an ambitious growth agenda based on our firm belief in the long-term growth opportunities relating to megatrends such as electrification and digitalization. Looking ahead, we will continue to focus on strategic acquisitions to expand our technology and market reach while prioritizing investments in innovation and operational efficiency. With our strong market position and innovative solutions, we are confident in our ability to seize future growth opportunities. To support our growth journey, we are excited to expand operations with two new state-of-the-art factories in 2025 - one in Cork, Ireland for DCT and another in Amesbury, US for AirTech. These expansions will enhance our global reach, increase production capacity, improve workflows and better serve the growing needs of our customers worldwide while prioritizing energy efficiency and resource conservation. The Cork facility, which opened at the end of 2024, will ramp up production throughout 2025, while the Amesbury facility is set to open in the first half of the year. During the transition, both existing and new sites will operate in parallel at the beginning of 2025.

With a clear strategy, strategic investments, and a commitment to innovation, we are well-positioned to drive sustainable growth and create lasting value for our customers, partners, and stakeholders.

Klas Forsström, President & CEO

Information about the webcast and telephone conference

Welcome to join a webcast or telephone conference today, February 5, at 9:00 CET, when CEO Klas Forsström together with the CFO, Katharina Fischer, will present the report.

Webcast: https://ir.financialhearings.com/munters-q4-report-2024

Conference call: If you wish to participate via teleconference, please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference. https://conference.financialhearings.com/teleconference/?id=50050326

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

For more information:

Investors and analysts
Line Dovärn, Head of Investor Relations
E-mail: line.dovarn@munters.com, Phone: +46 (0)730 488 444

Media
Daniel Frykholm, VP External Relations & Internal Communications
E-mail: daniel.frykholm@munters.com, Phone: +46 (0)702 067 786

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 persons set out above, at 07.30 AM CET on February 5, 2025.

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 5,400 employees carry out manufacturing and sales in more than 30 countries. Munters Group AB reported annual net sales of more than SEK 15 billion in 2024 and is listed on Nasdaq Stockholm. For more information, please visit www.munters.com.