Backlog Visibility Trumps Near-Term Execution

Research evidence excerpt

Backlog Visibility Trumps Near-Term Execution

rials also extends PREV 5.75

tariff inefficiencies. As a result, 2026 becomes more execution-dependent, while the size of the

underlying revenue opportunity remains unchanged.

Chart 1 - Record backlog supports earnings

2027-28: visibility improves. We raise 2027E-28E EPS by 2% respectively, reflecting stronger visibility despite delayed margin inflection

15.5% 15.1% 15.8% 16.0%medium-term visibility following another quarter of exceptional DCT orders. Backlog has now 25,000 18.0%

13.2% 12.7% 12.3% 14.0% 12.2% 12.9% 12.1%

11.3%expanded to SEK 19.2bn, while disclosed delivery schedules increasingly point to 2027 as the 20,000 12.0%

10.3%

15,000

10.0%largest revenue harvest year and provide improving visibility into 2028. As supply constraints ease,

US sourcing improves and Virginia moves beyond its current ramp phase, DCT should become 10,000 8.0%6.0%

a progressively larger contributor to both growth and profitability. AirTech provides an additional 5,000 4.0%2.0%

earnings lever through ongoing cost-out initiatives and improving utilization. 0 2018 2019 2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 0.0%

. Net sales, SEKm Adj. EBITA margin, %

Valuation disconnect remains significant. The shares trade on 14x EV/EBIT 2027E, representing Source: Company data, Jefferies

a 28% discount to peers despite record backlog, improving medium-term earnings visibility and

Chart 2 - At 14x EV/EBIT ('27e), Munters trades

upgrades beyond 2026. The current valuation continues to reflect concerns around execution and at a steep discount to peers despite backlog-

conversion, while assigning limited value to the earnings embedded in the backlog or the recovery backed growth visibility

potential of DCT margins.