Munters Group AB: Exceptional demand - external headwinds currently affecting profitability

April – June Order intake increased +137%, driven by strong demand in Data Center Technologies (DCT) and AirTech, slightly offset by softer demand in FoodTech. Net sales increased +6%, driven by growth in AirTech and FoodTech, while DCT reported lower sales as the production ramp-up and supply chain constraints impacted throughput. The adjusted EBITA margin declined, primarily reflecting the planned ramp-up in DCT, together with changed product mix, supply chain constraints affecting throughput and tariff headwinds, as well as continued growth investments. AirTech margins, on the other hand, improved following higher volumes and cost-saving measures. Robust cash flow from operating activities, largely explained by advances from customers in DCT. OWC/net sales improved to 5.2%, below the target range of 13–10% Leverage of 3.2x (3.1x in Q1 2026), mainly due to decreased adjusted EBITDA. Earnings per share amounted to SEK 1.11 (0.97). The AGM in April resolved to pay a dividend of SEK 1.60 (1.60) per share totaling MSEK 292 (292) to be paid in two equal instalments. This represents 53% of net income from continuing operations. The first instalment of the dividend was paid out in May.

We delivered exceptionally strong order intake in the quarter, demonstrating the strength of our offering and the continued high level of activity in our key markets. However, profitability is currently affected by the planned ramp-up of chiller production in the US as well as external factors, including delays in component deliveries and continued tariff-related effects. These factors do not change our view of the underlying strength of the business or our long-term strategic direction. We maintain our business outlook, expecting improved profitability in the coming six months, supported by continued progress across the Group.

Demand remained strong across the Group. DCT once again delivered strong order intake, supported by several project awards during the quarter. As is typical in this business, the timing of such projects may vary between quarters, while the underlying level of customer activity remains strong. AirTech reported strong demand across several markets, supported by an exceptional increase in the Components segment as customers secured supply following temporary disruptions in industry capacity. FoodTech reported lower order intake in both controllers and software, mainly reflecting the timing of software projects and softer investment activity in selected end-markets this quarter, while the underlying growth drivers remain strong.

In AirTech, the initiatives launched over the past year to strengthen the business are progressing according to plan. As part of the plan, we are increasing flexibility and improving operational efficiency while maintaining investments that enhance our competitiveness and support long-term profitable growth. While demand in the battery sub-segment remains subdued, this has increasingly been offset by growth in Components and other industrial end-markets, resulting in a more balanced business mix.

In DCT, we continue to scale capacity to support future growth. Bringing the expanded Virginia facility into operation is an important milestone in strengthening DCT's manufacturing capacity and supporting our regional production strategy. The ramp-up is progressing according to plan and we now have the people, production capacity and industrial set-up in place to support future growth in Americas. As expected, production volumes are initially low, a normal part of establishing a new manufacturing footprint.

In FoodTech, we continue to invest in our digital offering, strengthening the platform and expanding our software capabilities to further strengthen our market position. Alongside the Virginia ramp-up, profitability in DCT has been negatively affected by changed product mix and current supply-chain constraint...