Munters (MTRS) Q2 2024 earnings summary

Executive summary

• Achieved all-time high profitability in Q2 2024, driven by strong growth in Data Center Technologies (DCT) and FoodTech (FT), with robust order intake and increased net sales year-over-year.

• Strategic portfolio advancements included the conclusion of the FoodTech equipment review (intention to divest) and several M&A activities, notably in data center and FoodTech segments.

• Order backlog reached record levels, supported by large orders in DCT and AirTech (AT), positioning for continued growth into 2025.

• Sustainability is fully integrated into strategy, with ongoing SBTi commitment and net zero targets.

• Cash flow from operating activities improved significantly, and leverage decreased for the fourth consecutive quarter.

Financial highlights

• Net sales increased by 7% year-over-year in Q2 2024, with organic growth of 2%.

• Adjusted EBITA margin reached a record 17.8% in Q2 2024, up from 13.5% in Q2 2023.

• Net income rose to MSEK 342 from MSEK 257 year-over-year.

• Cash flow from operating activities improved to MSEK 662, and net debt decreased to MSEK 4,447.

• Leverage ratio reduced to 1.8x net debt/adj. EBITDA, down from 2.7x a year ago.

Outlook and guidance

• Order backlog up 6% year-over-year, with large orders in DCT and AT to be delivered through 2025.

• Market outlook for the next six months remains positive, especially in DCT and FT, with continued strong demand from hyperscalers and colocation providers.

• Battery segment expected to remain weak short-term, but long-term growth drivers remain intact.

• Investments in digitization, R&D, and production facilities to continue, with CapEx peaking as new US and European sites are finalized.

• Service and components ambition to exceed one third of net sales long-term; Q2 at 25%.