Munters (MTRS) Q3 2024 earnings summary

Executive summary

• Strong Q3 performance with net sales up 6% year-over-year and adjusted EBITA margin reaching a record 16.2%, driven by Data Center Technologies (DCT) and FoodTech, while AirTech was impacted by weak battery market conditions.

• Order intake grew 21% year-over-year, with a 7% increase in backlog, mainly from large DCT orders.

• Strategic acquisitions (AirEx, Geoclima, Hotraco, AEI) completed or announced, enhancing digital, software, and regional capabilities.

• Cash flow from operating activities declined due to project completions and higher working capital needs.

• Announced divestment of non-intelligent equipment business, representing 13% of group sales, to focus on digital solutions.

Financial highlights

• Net sales reached MSEK 3,761, up 6% year-over-year; adjusted EBITA was MSEK 611, up 24%.

• Adjusted EBITA margin improved to 16.2% (from 14.1%); net income was MSEK 275 (up 4% year-over-year).

• Operating working capital/net sales at 11.3%, within the 10–13% target range.

• Net debt increased to MSEK 4,968, with leverage ratio at 1.9x adjusted EBITDA.

• Capital expenditure increased to 7.9% of net sales, reflecting investments in new production sites and digitalization.

Outlook and guidance

• Battery market expected to remain weak through 2025 due to global overcapacity and project delays, especially in China and the US, but long-term growth outlook remains positive.

• DCT segment anticipated to maintain strong growth, with a healthy backlog and new facilities in Ireland and the US supporting capacity expansion.

• FoodTech software ARR continues to grow rapidly, with further expansion expected post-Hotraco acquisition.

• No weakening seen in general industrial demand outside batteries; stable to slightly positive outlook for AirTech's non-battery segments.

• Midterm targets: annual currency-adjusted net sales growth above 14%, adjusted EBITA margin above 14%, OWC/net sales 10–13%.