CAPITAL MARKETS DAY 2019 Towards Full Potential 1
Agenda – platform for today and the future CEO – Munters Towards Full Potential A strong company – but disappointing performance since IPO • Global player in niche markets • Full Potential Program to seize opportunities • Global Operations – Building a customer-oriented and scalable platform AirTech – Sustainable solutions for demanding industrial applications FoodTech – Sustainable solutions for demanding agricultural applications CFO – Delivering the numbers CEO wrap-up – Confident in our targets 2
Disappointing development since the IPO in 2017 Net Sales – solid growth over period EBITA – weak performance since 2017 Share price development below peers bSEK mSEK -8% +9% 8.000 900 7.122 801 800 7.000 6.604 +20% +59% 6.040 675 676 700 6.000 5.399 585 600 5.000 4.216 500 4.000 400 316 3.000 300 2.000 200 1.000 100 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Jul 2017 Jan 2018 Jul 2018 Jan 2019 Apr 2019 Munters OMX Sthlm 30 Industrial Goods 3
In Munters, I saw a company with a great proposition, and potential… AirTech FoodTech Size of core markets (CAGR): Size of core markets (CAGR): +5% +6-7% 2018 2021 2018 2021 #1 #1 #1 #1 Lithium Processing (food etc.) Broiler Layer #2 #2 #1 #1 Supermarkets Pharma Food chain SW Swine 4
...however a number of internal constraints hindered our performance Suboptimal prioritization of Suboptimal organizational structure resources and capital Dispersed product portfolio Insufficient customer focus Unclear performance culture Overly centralized structures 5
Executing the Full Potential Program our top-most priority PHASE 1: STABILITY PHASE 2: PROFITABILITY PHASE 3: GROWTH Secure stable and profitable Improve performance Accelerate growth in platform attractive segments and geographies 6
Agenda – platform for today and the future CEO – Munters Towards Full Potential A strong company – but disappointing performance since IPO • Global player in niche markets • Full Potential Program to seize opportunities • Global Operations – Building a customer-oriented and scalable platform AirTech – Sustainable solutions for demanding industrial applications FoodTech – Sustainable solutions for demanding agricultural applications CFO – Delivering the numbers CEO wrap-up – Confident in our targets 7
Sustainable climate solutions for demanding industrial and agricultural applications 8
Critical to customers’ Sustainable climate Sustainable Climate success solutions Solutions Our goal is to provide energy-efficient, safe and Munters’ customers operate in complex, reliable climate solutions where control of moisture demanding environments. We provide the right content and temperature in production are mission connected products and the solutions that are critical. critical to our customers’ success. Munters helps leading companies around the world We make sure that our customers’ industrial or maximize their opportunities while minimizing their agricultural applications are in line with global carbon emission footprint. production requirements while creating value and contributing to society at large. 9
We make a difference for the world “2 of every 3 stents used to relieve heart conditions are “Munters climate solutions “Munters’ climate solutions manufactured in stable contribute to more than 1 of 7 are behind half of the world’s environments enabled by meals around the world batteries for electric vehicles Munters technology 10
Munters' growth opportunity is fuelled by strong megatrends for sustainability Energy and Sustainable food Clean Air resource efficiency • Electricity consumption • Food traceability • Sulphur oxides pollution reduction elimination Munters • Hygienic processing solutions • Energy recovery • Volatile Organic Compound • Waste reduction promote pollution elimination • Animal health 5% market growth expected in core AirTech markets 6-7% market growth expected in core FoodTech markets 11
Agenda – platform for today and the future CEO – Munters Towards Full Potential A strong company – but disappointing performance since IPO • Global player in niche markets • Full Potential Program to seize opportunities • Global Operations – Building a customer-oriented and scalable platform AirTech – Sustainable solutions for demanding industrial applications FoodTech – Sustainable solutions for demanding agricultural applications CFO – Delivering the numbers CEO wrap-up – Confident in our targets 12
Full Potential Program in three phases – focus on the first PHASE 1: STABILITY PHASE 2: PROFITABILITY PHASE 3: GROWTH Secure stable and profitable Improve performance Accelerate growth in platform attractive segments and geographies 13
Phase 1: Secure a stable and profitable platform Strengthen leadership team STABILITY Simplify Munters structure into two decentralized Business Areas Secure stable and profitable Drive leaner structures and cash efficiency platform Drive Data Center performance uplift through focus towards US market 14
STABILITY – Secure stable and profitable platform New organization and leadership team in place • Klas Forsström appointed new President and CEO effective no later than mid-October 2019 – 20 years of senior management positions at Sandvik (including President of Sandvik Hard Materials and Sandvik Coromant.) – M.Sc. in Materials Physics and an MBA from Uppsala University Advanced management studies at INSEAD • New organization and management team in place – Two strong business areas – New group management (6 members vs. previously 13) 15
STABILITY – Secure stable and profitable platform 2 Business Areas – under 1 vision – with a shared operations platform CEO “Sustainable climate AirTech FoodTech solutions for demanding industrial and agricultural applications” Global Operations HR, Communications Finance, IT, IR and CSR and Strategy 16
STABILITY – Secure stable and profitable platform Governance and accountability strengthened in Business Areas Strengthened regional management teams Clarified strategic priorities and strengthened accountability More result-oriented and effective Business Area organizations Launched quarterly follow-up on Business Unit level (i.e. country organization) with senior management Strengthened team in key positions , e.g. new Sales VPs AirTech Americas and EMEA 17
STABILITY – Secure stable and profitable platform Full program target EBITA improvement of 210 mSEK run-rate 2019E Full Potential Program EBITA run-rate impact (mSEK) AirTech 95 FoodTech 40 1 Group Overhead 25 Total savings 160 Data Center (AirTech) 2 50 performance uplift 210 Total program 18
STABILITY – Secure stable and profitable platform Full impact expected in 2020 Program 2019 adj. EBITA impact 2020 adj. EBITA impact One-time costs Cash pay-back time – equals ongoing annual run-rate mSEK - 350 costs Approx. Total program impact mSEK +105 mSEK +210 (60% during H1 and 40% 2 years during H2 2019) Timing and ultimate cost of program may vary from current estimates based on final timetable and subject to information and consultation with the relevant employee representative bodies. 19
1 STABILITY – Secure stable and profitable platform Savings progressing according to plan Full Potential Program Savings 2019 end-of-year target = 160 mSEK • FTE reductions and other cost savings according to plan • One-time costs of 61 mSEK Run-rate savings according to plan (mSEK) Actuals Planned Feb End Dec Mar 20
2 STABILITY – Secure stable and profitable platform Data Center profit uplift progressing according to plan Europe Americas • Union consultations ongoing according to the so- • Order backlog in Americas is 139% higher than at the called “Renault process” regarding intended closure of end of Q1 last year Dison plant • Orders come for a wider range of customers and from a • Production in the Dison factory following schedule with wider range of solutions – which caters for more minor and manageable delays stability in the business • Production in the first quarter following schedule 21
STABILITY – Secure stable and profitable platform Strategic alternatives for ME and DC being evaluated Data Center Mist Elimination Underlying market 10-15% expected CAGR in years to Up to 10% expected CAGR in years to growth? come come Leading technological solution and one Leading technological solutions and the Competitiveness of of the leading players in economizer leader in FGD and Marine markets Munters business? solutions Munters being the ? ? A range of operational issues over the Business of limited scale and relatively “best” owner for the last years non-adjacent from rest of Munters business? We will only invest in businesses where we optimise our deployment of capital – to be determined if DC and ME fulfil that criteria 22
Full Potential Program – starting to look into future phases PHASE 1: STABILITY PHASE 2: PROFITABILITY PHASE 3: GROWTH Secure stable and profitable Improve performance Accelerate growth in platform attractive segments and geographies 23
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