Earnings call transcript: Munters Q3 2025 sees strong growth, stock surges

Munters Group AB, a prominent player in the Building Products industry with a market capitalization of $2.99 billion, reported robust financial results for the third quarter of 2025, showcasing significant growth in both order intake and net sales. The company’s revenue grew 20.06% over the last twelve months, with diluted earnings per share of $0.47. The market reaction to the earnings call was notably positive, with Munters’ stock surging by 19.26%, closing at 154.2, reflecting investor confidence in the company’s performance and future prospects.

Key Takeaways

• Munters experienced a 56% increase in order intake and a 15% rise in net sales.
• The company achieved a 13.5% adjusted EBITDA margin.
• Stock price rose by 19.26% following the earnings call.
• Munters is expanding its offerings in data center cooling and food technology.

Company Performance

Munters demonstrated strong performance in Q3 2025, driven by substantial organic growth and strategic initiatives. The company reported a 56% increase in order intake and a 15% rise in net sales. Munters continues to expand its product offerings, particularly in the data center cooling and food technology sectors. This growth aligns with broader industry trends, where demand for efficient cooling solutions and innovative food technology is on the rise.

Financial Highlights

• Order intake: Increased by 56%
• Net sales: Increased by 15%
• Adjusted EBITDA margin: 13.5%
• Operating working capital: 8.3% of net sales

Market Reaction

Following the earnings call, Munters’ stock price experienced a significant increase of 19.26%, closing at 154.2. According to InvestingPro analysis, the stock is currently trading slightly above its Fair Value, with analysts maintaining a strong buy consensus (1.6 rating) and setting price targets between $14.32 and $21.22. This surge reflects strong investor confidence, though the stock trades at a relatively high P/E ratio of 34.86. Want deeper insights? InvestingPro offers comprehensive analysis with 6 additional ProTips and detailed valuation metrics.

Outlook & Guidance

Munters remains optimistic about its future prospects, with a focus on data center and food technology growth. The company’s financial health score of "GOOD" from InvestingPro supports this outlook, with last twelve months EBITDA reaching $224.52 million. The company is targeting an EBITDA margin of 13-16% and plans to continue investing in digital capabilities. Munters expects gradual improvement in its AdTech performance and is expanding its U.S. manufacturing capacity to meet growing demand. Access the complete Pro Research Report, available for 1,400+ top stocks, for comprehensive analysis of Munters’ growth strategy and market position.

Executive Commentary

CEO Klas Forsström highlighted the company’s strategic initiatives, stating, "We are creating a business with several legs to stand on in a world of continued tariffs, geopolitical tensions, and general unpredictability." He also emphasized Munters’ innovation capabilities, noting, "We have now the widest product offer when it comes to different cooling solutions there is."

Risks and Challenges

• Geopolitical tensions and tariffs could impact operations.
• The battery market remains subdued, affecting order intake.
• Increased net debt due to acquisitions and facility expansions.

Q&A

During the earnings call, analysts inquired about the impacts of tariffs on chiller production and the development of liquid cooling technology. Munters addressed its capacity expansion in data center technologies and explored the potential recovery of the battery market. These discussions provided insights into the company’s strategic focus and future growth areas.

Full transcript - Munters Group AB (MTRS) Q3 2025:

Line Dovärn, Head of Investor Relations, Munters: Good morning and welcome to Munters Q3 presentation for 2025. My name is Line Dovärn and I’m Head of Investor Relations, joined here by Klas Forsström, our CEO, and Katharina Fischer, our CFO. We will begin with a presentation of today’s results, and we will then kick off the Q&A session. If you do have questions from the webcast, you can post these questions throughout the presentation by using the chat function below, and we will address them at the end. Klas, let’s go.

Klas Forsström, CEO, Munters: Thank you, Line. And once again, good morning and very much welcome to this Q3 report. Let me start, as always, to give you some summarizing few words of the quarter that has passed. A very strong order intake and invoicing, complemented with robust profitability and operating working capital development that pleases me very much. Data Center Technologies and FoodTech are very well positioned for continued strong growth in the years to come. That thanks to the strategic decisions we made and the execution of those decisions. We see solid underlying demand drivers of both business areas: data center demand and the digitalization of the food supply chain, and our offer is very well fit to capture this growth. AdTech in general is meeting a continued tough battery market and a generally tight industrial investment climate in the U.S. and EMEA.

To offset these headwinds, we are resetting AdTech to be a better fit for the future. They will be well positioned to capture growth when the demand returns with modern factories, continuous sharper R&D, and a clearer commercial drive across several sectors. We at Munters are creating a business with several legs to stand on in a world of continued tariffs, geopolitical tensions, and general unpredictability. This makes us well equipped for continued growth and market share gains. Over to the quarter that has passed. Strong growth and solid profitability, that is what I think is the headline of the quarter. Drilling into the different components of this order intake, a 57% increase. If I deduct the currency, it is a 70% growth in comparable currency. AdTech showing growth, positive development in APAC and to some extent in the Americas when it comes to order.

Data Center Technologies increased, continued strong demand in the Americas, and as you later will see, also emerging improvements and market gains in Asia as well. FoodTech increased as well, solid demand in the Americas, EMEA. To order backlog, 2% smaller backlog, but compensated for currency, actually just 4% up. This has mainly been driven by Data Center Technologies and the orders we receive now. That brings us into 2026 and 2027, a pleasing book to bill of 1.1. Moving over then to net sales, 17% up, 9% currency, so that would end up in 20% in comparable currencies. AdTech, here it declined, lower sales across all regions. Data Center Technologies, continued increase, successful execution on the backlog, and also FoodTech increased and were driven mainly by controllers in this quarter. Very pleasing to see controllers, an area that we have allocated a lot more resources into.

Solid profitability, as I said, EBITDA margin of 13.5%, driven by DCT, the volume growth, production efficiency, still pleasing product mix, and continuous lean improvements. FoodTech, strong contribution, although impacted by continued investments and to some extent the product mix. As we all know, a software product has a higher margin than a controller, even if controllers are also on a good level. AdTech impacted by lower volumes, unfavorable product and regional mix, as well as uneven capacity utilization. This has been to some extent offset by cost and efficiency initiatives. In the quarter, we had currency headwinds and more specifically tariff impacts in DCT, and this I will come back to later on. A fair description of how the world looks like right now, variations in between regions and end markets. Americas represents close to 70% of our total order intake, EMEA about 20%, and APAC 12%.

If I divide it in between the different business areas, you can see that DCT, if I start with that, is continued to be dominated by the U.S. market, but very pleasing to see that we have started to make inroads into Asia already now. When it comes to EMEA or Europe, I will say it is not us, it is the European weaker market that is holding our growth in Europe back. AdTech then more even balanced, 44% in AdTech in Americas and about one third in EMEA and about one quarter, 25% in APAC then. FoodTech then very much American and EMEA focused then. Drilling down in Americas, AdTech, the market remains soft, pockets though of growth. DCT continued to rapidly expand, led by hyperscaler investments and a drive across the full sector, to some extent definitely AI driven. FoodTech, a growing market.

Yes, avian flu, bird flu is controlled, but a pickup will take, as always, after that type of outbreak, some time to recover. EMEA, a mixed market sentiment across the sectors, competitive price environment when it comes to AdTech. As I alluded to earlier, DCT, slower markets with signs of picking up, focusing on energy efficiency, and that is good for us because we have the most energy efficient solution there is in the data center market. FoodTech, positive market outlook, driven by increased regulation and push for better practices in this sector. APAC, signs of improvements in China, though continued high competition. Southeast Asia and India also showing growth as markets. Very pleasing to see that we are making inroads into Asia with Data Center. That is according to the plan, but it’s always good to see that you’re executing on the plan as well.

FoodTech, China is not the focused market, but still we are making inroads into China and Southeast Asia. Moving over to AdTech. All in all, a stable growth situation in a challenging environment. You’ve heard me say many times that I have predicted that the battery segment would be in between 10% to 20% in the coming quarters, and now we were at the low end of 10%, and I will come back with some outlooks on the battery and what is happening there later on. Beside that, about 50% of AdTech’s markets do have a slight positive outlook moving forward. You can see the blue arrows in about 50% of the total market of what we have today, that is slightly positive. The order backlog decreased.

Highlighting here, clean technology generated good growth in volatile organic compound area, and that has been supported by good executions of the acquisitions we have done. In other areas, as I said earlier, battery remained at the flat level in all regions, but not at the lower level. This is one of my favorite pictures, and you can have different views on this. If I take it on the long term, I would say that it’s a fairly flat, solid demand across the segments. If I go into a couple of other inroads here, one inroad that is you can see if you compare quarters to quarters, i.e. quarter three over the years, I see a small uptick in each and every quarter, and this is a currency adjusted graph.

If you see last year compared to this year, I will also say in general a slight uptick on the total of the year, so to speak. If I summarize this, battery still being in this 10% to 20%, clean technology continued to slowly increase, creating another leg to stand on, and the other industrial fairly stable, but a weaker investment climate in Americas, and that I think is something that you’ve heard from all industrial companies, that it’s a damped industrial economy in Americas at current. Moving over to sales, lower volumes and profitability. I’m not pleased with the profitability that we generated. It has been affected with some not strong enough execution on move of factories and how we have been able to work with our internal areas. I’m not worried about this.

I look upon this as a quarter or a quarter and a half delay on certain of that, but I’m not really pleased with this. The other side of the coin is that it is also a continued weak market as such. I would have anticipated that we would have seen somewhat of an uptick then. All of this is also leading into that we then, as I will talk about later, are increasing our traction on how to reset AdTech for the future. Also very important, something that makes me very proud, that is how do we drive investments then? Or I should say innovation. Innovation can be driven by that we only innovate internally. For me, innovation is more and more about collaboration, collaborative work. This can be done with academia, this can be done with companies, this can be done by co-investing in certain areas.

Here you see a couple of examples where we have, over the last couple of years, made minority investments in different companies to fuel our innovation. Some highlights, Suttercore, DCT, being very, very close to the ship and how to handle that. AgriWeb and PharmSy in FoodTech, when it comes to how to drive digitalization and software in different areas. Capsule, the latest addition, where we started to invest a little bit more than a year ago, and we have now invested even more. Now we talk about carbon capture and moving forward in clean technology. For me, this shows that we can co-innovate with others, not only inside our own house, so to speak. Coming back then to AdTech. We have come to the conclusion, and this is something that is needed to be done, that we need to reset AdTech.

That means that we will intensify our cost out and how we work with AdTech. The market demand is lower than expected, and I foresee that it will continue to be flattish, especially when it comes to batteries moving forward. We need to reset AdTech, position AdTech to the right level at current, but continue to keep it ready for a strong recovery when the market returns. What are we doing then here? We adjust on investments, we drive footprint optimizations, we are more selective on where should we then fuel certain investments. We are optimizing the workforce, we are balancing capacity while safeguarding core competencies. All in all, we expect here to have an impact of some 200 positions globally. We drive increased efficiency, and you may say, I mean, okay, you don’t have enough load in the factory, but you continue to drive efficiency.

Yes, that is the never-ending story you have to do, because when the market returns, you have an even more modern, even more efficient factory layout that can then have a very, very positive drop-through on the way down. We are on top of that also driving our commercial activities to reach out in wider sectors. All in all, this will generate a net cost saving of about SEK 250 million to SEK 300 million at the end of 2026. It will generate a restructuring charge of about SEK 150 million, the majority taken in Q4 this year and some of it taken in Q1 next year. This is on top of the previously announced cost savings that are delivering according to plan. It is about resetting and being fit for the future when it comes to AdTech. What about battery?

As you saw, today we announced a battery order, and I think this is really telling the story about the battery sector. First of all, there is a battery sector. It is not dead, but it’s a sector where decision processes are taking much longer time. I can take this as an example. This project that we then recently received, we have been discussing, working, talking about this for about a year. They put the thumb on the green button, so to speak, and they released it. I think that tells the story about the battery sector right now. We are working with three or four different projects of some hundred million sizes moving forward, but what is clear, what earlier took perhaps half a year to decide, in the current capital-squeezed market, especially in the automotive sector, that can take up to a year, sometimes even longer.

My other point here is that we have the best products in the marketplace. Here we talk about, I mean, you that are nerds into dehumidification then, you know, a minus 78 degrees Celsius. That means that we can extract humidity at a very, very low temperature, a high-performing type of product. All in all, this generated a $30 million US dollar order towards a US battery cell manufacturer, and the planned delivery is for mid and end of 2026. Moving over to another reality, I’m so pleased to see that our strategic initiatives, our execution of those, are delivering order intake where it should be. An order intake that generated a book to bill of close to 1.4 in the quarter, orders that we delivered into 2026, during 2026 and into 2027.

We received it across the full product portfolio, and I think this is something that is extremely important. We have widened our assortment, and even if I’m a little bit biased, I still say we have the widest, and in my book, the most competitive product offering in the cooling market of data centers. EMEA did grow, especially driven by CROS and service offer. APAC started to show good growth as well. All in all, when it comes to orders, I’m very pleased, and I’m also looking forward. I’m very optimistic for the underlying market. As always, you know, some quarters are very, very high in orders, and others could be lower. With that said, I’m continuously very optimistic moving forward. If we move over to the other side then, net sales increased, successful delivery on the backlog. Cycle, Sirius crossed the full assortment.

Something to highlight, this is the last quarter with Cycle, so that will generate some product mix changes moving forward. We generated an adjusted EBITDA margin that continued to be strong. We had some tariff headwinds of 2 percentage units in the quarter. Here I can say, I’m not happy to have this, but I’m not too disappointed either, because what we have, that is the most innovative and efficient chiller product in the market. At current, we cannot produce that in the US. We are building up capacity here, and I’m happy that we take and receive orders. These tariff headwinds, I’m willing to eat, and I know that also data center because we gain market share moving forward. All in all, we invest in strategic growth initiatives. We had a solid volume growth in the quarter, and also high production utilization.

A very strong quarter in all aspects in data center this quarter. Here you can see that we are filling up, and this is just examples of publicized orders and other orders of significant size and how they are delivered moving forward. In summary, you can say the majority of the orders we receive now, that is for 2026 and 2027. Now I have to balance here in between trying to explain this in as simple words as possible, and at the same time, when I return back to the Munters headquarter, also get good enough grades from my experts then, saying that I was not shortcutting this too much. If I try to balance that then, liquid cooling is about the full scheme. It is the large loop. Liquid cooling is about dissipation, capture, transfer, and release.

You can say in simple terms that this consists of two different loops. One loop is in the dissipation, that is close to the chip, very, very close to the heat source, that is one loop then. You have the larger loop, the loop where we are the market leader in, that is the capture, transfer, and release loop then. Let’s call one technology loop, and let’s call one facility rejection loop. The thing here is, we have all the products in the facility loop, and we have the products that create this plug and play in between. It is the connection in between, the CDUs and the LCDs that create this link. I think what we should remember is, when we talk about liquid cooling, it is two loops, and those loops are connected, and they work together. We have solutions to whatever is happening in the technology loop.

We can attach, and we can capture, reject, and transfer it out. On top of that, we are also collaborating with the key players in the dissipation area. I’m super excited about the different technologies that are here, and I’m super proud of what we have delivered when it comes to innovation and collaboration in this area. On the other side, what I’m also very, very happy about is, I think that we have started to be the trend finder. I think we have started to be the trendsetter. I think we have started to be the trend innovator. What do I mean with that then? Let me give you a couple of examples. We brought to the market CycleSplit, the first and very energy efficient type of non-water coolant solution. We brought new CDUs of never before seen efficiency to the market.

We decided that either we develop the best chillers in the market, or we acquire the company that provides the best chillers in the market. We decided to do the second. We acquired Euroclima. We spotted the trends on where they were going. We developed that, and we brought it to the market. I can tell you that customers are really saying that we are leading the innovation and technology game here. That brings me to another trend. A trend that is emerging. I call it modularity in a different way. You have heard me talk about modularity many times. We talk about components that can be used in different types of products, and that drives efficiency internally. When it comes to data center, it’s another type of modularity.

Look upon this as a little bit of Lego blocks that you put together as subsystems, and then you can build those subsystems. You can have one, two, or many together. This is a trend that will complement other trends. I can just tell you that we are also trendsetters, trend spotters, and working actively with the ones that are driving those trends in the market. I think we are ahead of the curve in this area as well. Super excited about this. If I go into another area, FoodTech. Here I think we have something that we can really be proud of. We have made a transition of FoodTech from a more classic, old equipment-driven company to be now a fully fledged digital and software company. Many, many companies are talking about this change. Here we have done this.

This is just in the beginning of what this can deliver. When it comes to order intake, it increased. Software is growing. Controllers, the new acquisitions and what we had inside our own house are generating good order intake. Synergies are worked in between the old controller companies and the new controller companies. The order backlog increased in a good way. When it comes to ARR, we are continuing to increase in between 20% to 40% quarter by quarter. We have decided to show this in US dollar to take away the currency effect because now we have definitely currency headwind. Here you can see more volume-driven type of increases and apples to apples. Super excited about this, and we are just in the beginning of this trend shift. What about artificial intelligence? Artificial intelligence is driving data center growth. Yes.

What can a company get out of artificial intelligence using it? Let me introduce two of our recently new employers. One, Calvin, that is driving internal efficiency, and one, Clarity, that is driving how to work with our customers. Calvin, that is how do we program in a better way? How do we automate? How are we doing code reviews? How are we becoming faster and more efficient in developing software? I’m amazed to see how much efficiency, how much innovation can be driven by this new employer of ours. Controllers, the other area, not software. Here we have Clarity. An agent that is a virtual assistant that is driving training for us, that is driving training for customers, that is generating customer support online, and so on. Look upon those.

Yes, it is perhaps not tens of thousands of customers, but for Munters and FoodTech, there is an increasingly large amount of the users that we have. 1,300 users have joined Munters Academy. We have more than close to 200 training videos. We received more than 3,000 inquiries that were answered by Clarity, and we support 20 languages with our new digital-driven agent and Clarity. Two examples of what we do with artificial intelligence to drive efficiency and customer satisfaction. With that, I hand it over to you, Katharina, and please take us through the numbers.

Katharina Fischer, CFO, Munters: Yes, thank you, Klas. I’m pleased to talk about the continued strong performance for the group. In the third quarter, organic growth contributed with 56% to order intake and 15% to net sales. This was complemented by non-organic growth of 14% and 11%, respectively. At the same time, we continued to experience negative currency effects of minus 13% and 9%. Worth highlighting is also the order backlog that, currency adjusted, developed well and then increased about 4% in the quarter. The adjusted EBITDA margin remains solid at 13.5%, although lower than prior year’s exceptionally high level. Here, Data Center Technologies and FoodTech continue to deliver very strong margins, really demonstrating operational discipline across the business. As you heard Klas say, the margin in AdTech declined, both compared to prior year and also slightly versus prior quarter.

This was due to lower volume, unfavorable product and regional mix, and also continued dual site costs for the transition into the new factory in Ainsbury, which has taken longer than anticipated and is expected to be fully operational by the end of the year. A key achievement in the quarter was the continued improvement in operating working capital. Here, we have reduced to now 8.3% of net sales, which is well below our target range of 13% to 10%. This is a clear result of very disciplined work across the organization. Our net debt increased, and this is mainly reflecting the acquisitions made through debt-financed acquisitions and also the higher lease liabilities due to the new facility in Ainsbury. Looking at the margin development, as mentioned, the margin remains solid at 13.5%, even though it was lower compared to the high, tough comparison last year.

The different factors then, volume, volume growth for Data Center Technologies and FoodTech had a positive impact on the margin, and for AdTech, it was a negative impact from volume, obviously. I’m pleased to see that we continue to drive positive net price increases, mainly in Data Center Technologies and FoodTech. We also saw negative mix impacts both for AdTech due to the higher mix from APAC and also product mix, regional mix from FoodTech. Also, as Klas has highlighted, we had negative impacts from tariffs in DCT with two percentage points, and this is something that we anticipate to remain until the U.S. production of U.S. chillers is up and running in the U.S. On the operational side, the underabsorption in AdTech weighed on the margin, although there was a positive offset from the high factory utilization in Data Center.

It is worth mentioning also that all business areas continue to drive very strong efficiency improvements. We also continue to invest in our strategic initiatives, as we have mentioned in prior quarters, and this has to do with building digital capabilities, system support, and further strengthening our footprint across the globe. Finally, the currency had a negative impact for this quarterly result. Turning to cash flow, if we look at the main cash flow movements, cash flow was strong for the first nine months, although slightly lower than prior year, and this was due to slightly lower operating earnings and also less favorable development in working capital. If we look at the individual business areas, Data Center continued to deliver very solid cash flow, supported by customer advances and strong profitability.

In AdTech, there was a negative cash flow due to the weakness in the battery market and also the continued underabsorption. If we look at cash flow from investments, you see that the main part there is that we earlier this year bought the remaining shares in the software company MTech and also the continued investments in the manufacturing footprint, mainly in Ainsbury. This slide is showing the continuing operations. If you look at the discontinuing operations, you will also see the SEK 1 billion that we received for the divestment of the FoodTech equipment business earlier this year. We, of course, continue to maintain a very strong focus on cash management, and I’m very pleased to see the positive effects of all the efforts that we have ongoing to increase operational efficiency and also the capital discipline across the group.

Looking at investments, we maintain a highly disciplined approach to the capital allocation. We focus our investments in the areas that generate the strongest long-term growth and also support profitable, sustainable growth. In the third quarter, the ratio CapEx to net sales was 3.9%, and if you look 12 months rolling, it was 6.7%. Although the quarterly level was a little bit lower in Q3, in the near term, we expect it to be somewhat elevated above the historical levels as we continue to invest in optimization and innovation and digital capabilities. An example of this, of course, in the coming quarters is the ongoing expansion of the Virginia site for a data center where we are setting up chiller production in the U.S. and also investing in a new test lab. These investments, of course, strengthen our technological capabilities and also the regional manufacturing footprint.

We are very well positioned to remain and be able to capture future growth in this area for Americas. Looking at leverage, the leverage ratio was 2.8, which is unchanged compared to the second quarter. If you compare to Q3 last year, it’s somewhat elevated, and this is due to the acquisitions made recently and also the increased liability for Ainsbury. In the coming quarters, I want to highlight that we will be paying some holdbacks relating to some acquisitions made recently, including Euroclima and MTech. We maintain our ambition to keep leverage within 1.5 and 2.5%. We are comfortable staying above this level temporarily since this is due to the strategic investments that are so important for us to really further develop our competitive position and support our long-term growth. I also want to mention that we, in the third quarter, issued our second green bond.

Now we have more access to the credit market, and we have been able to diversify our funding beyond traditional bank loans. Moving to service, expanding service is a key priority across all our business areas. In the quarter, we had an organic growth of 6% for service. Here we want to keep our systems running for our customers in a very efficient and sustainable way through the whole life cycle. For Munters, it creates a stable and recurring earnings base for us. That is also important. Service is defined as aftermarket service across the business areas, and also the software revenue for FoodTech. Components have also developed well in the quarter, and this is, as you know, sold mainly within AdTech. Here we have the dehumidification rotors and evaporative pads as growth drivers.

The group’s ambition for service and components is to be about one third of group net sales. In the quarter, we were at 24%, and also if you look 12 months rolling, it was 24%. If we look to the individual business areas, you can see that both AdTech and Data Center increased their service shares. AdTech is at 22% and Data Center Technologies at 5%. FoodTech here has 21%, which is a decline compared to last year, but that has to do with this year we have a higher mix of controller sales, and they don’t have as much service. Going forward, we will continue, of course, to build on our growing installed base and continue to invest in smarter and more connected and even more energy efficient products that create value for our customers and make our products even more reliable.

Looking at our sustainability initiatives here, we continue to make very meaningful progress. Circularity is something that is part of our daily operations. One example of this is the circularity program that we have been running with Combient Pure. This is about how we can increase circularity within AdTech with regards to their processes and products. It’s about designing for reuse, recycling, and doing it more efficiently. We have identified opportunities for even higher materiality circularity with 15%. There is also a possibility to further reduce scope three emission by developing our service offering more broadly. Just recently, we also announced a very interesting collaboration around innovation. The residues from our rotor production will be reused for plaster board manufacturing.

This is a really innovative initiative where we will turn waste into new material and really strengthen our regional circular value chain. I think these are two really good examples within circularity. This is a continued focus for the group. We will further expand this across the organization, and we will also deepen the supplier engagement further going forward. With that, I would like to thank you and hand it back to you, Klas.

Klas Forsström, CEO, Munters: Thank you very much, Katharina. Let me then start to summarize the quarter before we move into Q&As. How are we performing towards our overall financial targets? The numbers that are in the quarter, so currency adjusted growth 26%, adjusted EBITDA 13.5%, and operating working capital 8.3%. Operating working capital ahead or below in positive terms of the target, adjusted EBITDA a little bit shy of the set target, and adjusted currency growth ahead of the target. I think this is very much the pattern that we’ve had the last very often. We have two out of three then beating or be very close to it. All in all, we continue to progress towards those targets. If I summarize the quarter, strong performance driven by growth in key industries, predominantly then data center and FoodTech.

DCT maintaining a strong momentum, and I said it in the past, and I say it even stronger now, I am very confident for the future. We are delivering the right products to the right customers and expanding it to more than just one region. FoodTech advancing on the fully digital business, something that I think has not really brought full attention, with one exception. Our customers are very, very interested in this. AdTech navigating short-term challenges, building a long-term strength. As I said, resetting it to current circumstances, but then also be fit for the future with very efficient factories, continued strong innovation, and an even more focused sales force that’s spread out not only in certain categories, but across the different industrial segments. With that, let’s go over to Q&As.

Line Dovärn, Head of Investor Relations, Munters: Absolutely. Thank you, Klas and Katharina. We are now ready for a Q&A session. For those of you dialing into the telephone conference, as always, we ask you to limit yourself to two questions so that we can hear from as many of you as possible. Please go ahead from the telephone conference.

Conference Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Joan Sundmark from SEB. Please go ahead.

Yes, good morning and congrats on a very nice order intake in data centers. If we start with the margin there, you talk about tariffs impacting margins of some 2% in data centers. Do you sort of expect to get those 2% back once you have the new factory in the U.S. up and running, or will sort of a change mix offset that improvement once we are there?

Klas Forsström, CEO, Munters: Thank you for the question. If I divide it into two sides of this coin, as you have heard me say several times, yes, we will have a gradual change in the mix, and that will start to intensify next quarter. Later on, when we have moved up chiller production and moved it in to be closer to the market, the mix will start to change back again. The normal pattern is the more we produce, the better it will become, so to speak. That is the mix movement, so to speak, and that is according to what we have said for several quarters. When it comes to the tariffs, we look upon it like this. We have a fantastic product that we know we will start to produce in the U.S. first quarter next year. This product is very sought after.

When we sell it at current, we will send it over from Europe to the U.S. That’s the reason why we have the tariffs impact this quarter. I can say if we need to take some more tariffs, i.e., if we sell more, I’m happy to take that for a short time period because that generates market share. When we have the production up and running, the tariffs are gone. At the same time, they have also become much, much better in producing those chillers. You can say we balance it out over the long run.

Okay, thank you for that. Very clear. As you’re talking about more measures taken in AdTech, when you sort of look into 2026 and your ability to reach this 13% to 16% margin range, how confident would you say that you are to reach those levels having both cost measures in mind, but also combined with the current slightly lower demand situation overall?

Also a good question. The reason why we are driving those cost measures is, as I said in the beginning, it was a weaker market than we foresaw in the beginning of the year. At current, we say that the battery sector will continue to be subdued during the majority of 2026. With that, on and off, we may pick up orders, but it will continue to be in the range of 10% to 20% of the total order intake. That is one thing. We are resetting the organization to be handling that level. What we need to have in order to come up to the numbers that would please me, the 13% to 16%, of course, that is also more volumes. That is the reason why we are resetting now.

With modernization of the factories that we’ve done and continued efficiency, we will gradually start to move towards that target. As I said in earlier statements, I think that we now have a prolonged period of somewhat weaker margins. That’s the reason for the program.

Okay, very clear. Thank you so much. That’s all for me.

Line Dovärn, Head of Investor Relations, Munters: Thank you. We’ll take another question from the telephone conference.

Conference Operator: The next question comes from Adela Dashian from Jefferies. Please go ahead.

Good morning, Klas. It’s a bit difficult to limit myself to just two questions after today, but I’ll try my best. Firstly, on the book to bill in DCT, you did promise a ratio above one last quarter, and you did deliver that today. Congratulations to you and Stefan and the rest of the team. Should we expect some quarterly volatility going forward, or are you interpreting this as the new norm given the very strong market drivers that you’re seeing in the market?

Klas Forsström, CEO, Munters: Adela, thank you for the congrats, and thank you for the question. This is the silver bullet question, I think. My best way to phrase it is like this. I see a very strong market that continues for years. I see us having a very, very strong product offer. I see customers that sometimes are putting many orders, sometimes are waiting for a longer period. With all that said, I think that we have a strong market, a strong offer, and a great team. I’m optimistic for the future. If I would say a certain level, the only thing I can guarantee is that I would be wrong. I’m very positive moving forward. To predict what will come in orders in a quarter, I should buy me a lotto ticket at the same time then. I’m positive.

This quarter you were right.

I bought the ticket.

For my second question, I’m going to just try to push two into one and be a bit broader here. On the order book composition in DCT, I believe so far the majority of the orders have still been for the traditional air cooling. You do mention some CDU orders here, and I also noticed that the share of indoor units is increasing. Are you entering now a phase where liquid cooling solutions are starting to gain real traction? On the flip side, Cycoon is now diminishing as a share, but we did hear one of your bigger partners announce an integrated platform for waterless directed chip. Could this potentially reinstate the interest in refrigerant-based systems?

I tried to answer this expanded question with one answer as well. The first one, that is that we have now, in my book, the widest product offer when it comes to different cooling solutions there is. We have also, and here I’m biased, I know, but I say it anyhow, the most energy efficient and modern assortment. Our vitality index for the group is about 40%, i.e. of what we are selling, 40% has an age of less than five, and in Data Center, much higher than that. Yes, you’re right. We are shifting more and more to what we call then the liquid cooling universe. Here we have really targeted the right type of products. We have two different, call it, shifts when it comes to portfolio. One shift is towards the CROs that have a weaker profitability.

Then we have the CDUs, and we have the chillers that have a higher than the average of what we have done. We are shifting out the cycles that had the highest. To just complicate this, short term on the chillers, everything we sell into the U.S. at current, we have a tariff then, surcharge. That will, of course, disappear. If I shorten this up, we will have a headwind when it comes to mix on the quarters to come. That will then gradually turn around when tariffs and more and more productions of chillers, et cetera, are driving through efficiencies. A little bit tougher moving forward, and then it will ease up. That is what I predict.

Could you just expand a bit about the Cycoon and what the trends that you’re seeing in the quarter announcement?

Absolutely. Super excited. I think that we will have opportunities here. As always, when it comes to this cooling very close to the ship, I mean, the euro is still there. I’m optimistic for that. I don’t see that we will generate short term SEK billion orders on it. I’m definitely, call it, looking forward to see orders coming in in that area. Here we are unique.

Excellent. Thank you.

Line Dovärn, Head of Investor Relations, Munters: Great. Let’s take another question from the telephone conference.

Conference Operator: The next question comes from Karl Dagenberg from DNB Carnegie. Please go ahead.

Thank you very much. Good morning. Two questions from my side. First of all, on the backlog of SEK 6.6 billion in Data Center Technologies, I just wanted to hear, could you give any sort of quantification how much of that is for delivery in 2026? A related question to that as well is on invoicing capacity in Data Center Technologies. I think we had that discussion on the last quarter results again. That’s around, you know, I think you’ve been at around SEK 1.5 billion in the revenues in Data Center Technologies now for roughly three quarters. I just wanted to understand, given the capacity that you’re adding and so forth for 2026, 2027, what kind of quarterly run rate could you achieve given the capacity additions? Thank you.

Klas Forsström, CEO, Munters: If I generalize, you can say with current footprint in DCT, with one exception that I will come back to, we could definitely, if we add shifts, if we tighten the ship to some extent, we could easily deliver 30% more deliveries out of our factories. We have one exception, and that is now we are definitely, we cannot deliver much more when it comes to chillers short term from our European setup to the U.S. As soon as we have that up and running, we will have close to a doubled capacity of chillers also in the U.S. Of course, we don’t have to pay the tariffs on that, so to speak. We have plenty of room to grow, but in one area, we are short term a little bit squeezed. That is according to plan.

Yeah, very well. I’ll maybe take my follow-up on the same topic. I guess the chiller exposure came predominantly from the acquisition of Euroclima. Correct me if I’m wrong. Given that you, remembering when you bought that business, it was obviously quite an addition for the division. Given that it has a 2% impact now on the imports on the margins, it sounds like the growth has been very, very significant since you acquired the entity. Could you say anything, what’s the share now? If you look at your own portfolio, let’s say transformation away from Cycoon and so forth, what do you expect the mix to be, let’s say 2026, 2027, without giving any absolute forecast?

What I can say is, and now I don’t have that picture in front of me, but you see the graph there on one of the slides where we have the different components and how that is spread. There you can have some indications. If I’m a little bit more straightforward, I’m super pleased with acquisitions of Euroclima. I mean, it is the world’s best chiller, and we have a very strong sales force. In my book, we have achieved or we have over-delivered on what the chiller sales could generate here. According to the plan that we deliver on, we add this into the U.S. setup, and then we have an in the region in the market for the market. Suddenly, we also get rid of this volatility when it comes to tariffs. Here I just want to underscore, you can never be happy to pay tariffs.

If I have to choose in between having no chillers and paying tariffs, I’m happy to pay tariffs because we have the world’s best chiller in the market.

Line Dovärn, Head of Investor Relations, Munters: Good. Sorry, we need to break there. We are running out of time. Thank you very much for that. We do have more callers on the line, but we will reach out to you separately. We also have received some questions here. I will just finish off with one last question for you, Klas, that you can answer quickly if you can.

Klas Forsström, CEO, Munters: I will try.

Line Dovärn, Head of Investor Relations, Munters: What is Munters’ biggest challenges going forward, Q4 and further on, 2026 to 2030?

Klas Forsström, CEO, Munters: That was a broad-based question. I think that, and I don’t call this a challenge, that is we should continue to be on the toes when it comes to drive innovation, when it comes to be very, very close to the customers. We need to get best use of our decentralized setup. We have two skyrocketing divisions at current and one that has tougher. That is in the decentralized way. I mean, we handle the opportunities when we are skyrocketing and we handle the challenges when we have tougher. That is what I think we will continue to work with.

Line Dovärn, Head of Investor Relations, Munters: Great. Thank you very much. Thank you, Klas and Katharina, for presenting. Thank you, everyone, for listening in. We will, as I said, reach out to those of you that we did not have time to talk to. With that, thank you and wish you a nice weekend.

Klas Forsström, CEO, Munters: Thank you.

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