Munters (1K) | Buy | Preview Q2: Demand intact, margins delayed

Research evidence excerpt

Munters (1K) | Buy | Preview Q2: Demand intact, margins delayed

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believes an order intake level of around SEK2 billion is sufficient to support healthy factory utilisation

and profitability.

Although AirTech order intake has recovered, demand remains uneven across end markets.

Businesses linked to data centres, such as cooling pad production, are operating at high utilisation

levels and benefiting from strong demand. In contrast, factories serving weaker segments, such as

components for battery manufacturing facilities, continue to experience lower utilisation. This

imbalance results in uneven factory loading and lower productivity, which continues to weigh on

margins despite improving order trends. Management nevertheless targets a return to historical

double-digit margins during the second half of the year through higher volumes and ongoing cost-

saving initiatives.

About the plans to divest FoodTech

The potential divestment of FoodTech is primarily about capital allocation. Munters aims to

increase its focus on Data Center Technologies (DCT) and AirTech, where management sees the most

attractive long-term growth opportunities.

A sale of the entire FoodTech business would likely be significantly simpler than the previous

FoodTech Equipment divestment. The business is already organised through separate subsidiaries

outside Sweden, with its own facilities, R&D resources, and sales organisations, reducing carve-out

complexity.

The process is still at an early stage. Questions related to transaction structure, tax implications,

book values, and deal mechanics have not yet been finalised, but the strategic intention to reallocate

capital toward DCT and AirTech is clear.

FoodTech continues to perform steadily. Market conditions remain positive, with the controller's