Munters: Munters : Annual & sustainability report 2024 print (28093 en annual sustainability report 2024 )

Contents Introduction This is Munters 2 Munters in society 3 Our value-chain 4 Year in brief 5 CEO & Chairman conversation 6 Targets for long-term growth 9 Focus areas for sustainable growth 10 Munters as an investment 11 Sustainability Content 61 General disclosures 62 EU taxonomy report 72 Climate change 84 Circularity and resource use 93 Own Workforce 97 Workers in the value chain 102 Business Conduct 105 Strategy Our strategic wheel 13 Megatrends 14 Strategy - Market 15 - Customers 17 - Innovation 19 - Excellence 21 - People 23 Financial information Contents, financial reports 111 Board of Directors' Report 112 Financial statements, Group 116 Financial statements, Parent Company 120 Notes 123 The Board's assurance 146 Auditor's report 147 Auditor's report on statutory 150 sustainability statement and corporate governance statement Five-year summary 151 Definitions 152 The audited annual report for Munters Group AB (publ), corporate registration number 556819-2321, refers to pages 110-146. The statutory sustainability report and the sustainability statement are presented on pages 3-4, 10, 13-24 and 61-109. This report is also Munters Communication on Progress (CoP) report in accordance with the Global Compact. Munters' Remuneration Report is available online at www.munters.com . Operations Our business areas 26 Dehumidification rotor and cooling 27 pads- Our fundament AirTech 28 Data Center Technologies 33 FoodTech 38 Other information Share and shareholders 154 Our history of innovations 156 Shareholder information 157 Every care has been taken in the translation of this annual and sustainability report. In the event of discrepancies, the Swedish original will supersede the English translation. The addition of the total amounts reported can lead to rounding differences. Corporate Governance Corporate governance in Munters Group 44 Corporate governance report 2024 45 Internal control 49 Board of directors 52 Group management 54 Risks and risk management 56 Contents Curiosity and a commitment to creating ground-breaking technologies have been an integral part of our DNA since our founding in 1955. A global leader in energy-efficient climate control Founded in 1955, Munters is a global leader in climate solutions. Through innovative technologies, we create and control the optimal climate for demanding industries. Regions, percent of net sales 2024 % 15,453 net sales 2024, MSEK >30 production sites ~ 5,400 employees 0 20 40 Americas, 59% EMEA, 28% APAC, 13% 60 80 100 This is Munters 2 How Munters creates value in society Munters works with customers in segments where the control of humidity, temperature, and energy efficiency is critical to operations. By offering innovative, efficient, and sustainable climate systems, we help customers secure their operations and production quality, reduce energy and water usage, and contribute to lower carbon emissions. Innovative and energy-efficient cooling solutions for data centers Stable and ultra-dry air for battery production Climate and hygiene control for the food industry Dehumidification for wind turbines and infrastructure Control systems for optimizing livestock, cultivation, and crop storage Leading supplier of rotors and other components Solutions in Clean Technologies for cleaner air Service offering for a wide range of customers Humidity control for the pharmaceutical industry Leaders in data-driven optimization of the global food production value chain AirTech Data Center Technologies FoodTech How Munters creates value in society 3 Our value-chain Munters provides smart, energy-efficient climate solutions and a digital, connected offering. We have integrated sustainability into every aspect of our business strategy and demonstrate our impact on the value chain from both an internal and external perspective. Innovation, R&D Through innovation and con-tinuous product development, we meet market demands for increasingly resource-efficient products with lower environmen-tal impact. Sales & application knowledge Our products and know-how enable us to offer tailored solutions that reduce costs and environmental impact. Sourcing We use materials and suppliers that meet our standards, promoting human rights and reducing environmental impact. Production Health and safety are our top priorities. We reduce emissions and improve efficiency with MPS. We also strive for greater diversity and inclusion. Distribution We reduce transportation and environmental impact through optimization and regionaliza-tion, strengthening the supply chain and increasing security within each region. Use & service Our services optimize perfor-mance and extend product lifespan, ensuring resource efficiency throughout the entire lifecycle. End-of-life Our products and services extend product lifespan. We are strengthening our focus on cir-cularity and working to enable responsible recycling. Learn more about how we work with our value chain on pages 67-68. Our value-chain 4 The year in brief In 2024, we strengthened our market position through growth, optimized presence, and efficiency gains. Strong demand and acquisitions drove record net sales, with an adjusted EBITA margin exceeding the target of over 14%. Higher earnings and improved working capital strengthened cash flow, which, in combination with our active M&A strategy, resulted in a low net impact on the debt ratio, reflecting financial stability and disciplined capital allocation. Order intake The organic order intake decreased by -4%, while structural growth contributed +6%. FoodTech showed strong growth, and AirTech remained stable. DCT declined due to fewer large orders; however, excluding previous large orders, DCT reached one of its highest levels ever, highlighting the long-term demand. Order intake MSEK Net sales MSEK 20,000 20,000 10,000 10,000 15,000 15,000 5,000 5,000 0 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Net sales Net sales increased by +11%, with organic growth of +5%. Growth was driven by DCT and FoodTech, while AirTech remained stable. Services and components accounted for 24% of total net sales, with Service growing organ-ically by +19% and reaching 17% of total net sales. 0 2020 2021 2022 2023 2024 Adjusted EBITA/ EBITA-margin MSEK % 2,500 25 Adjusted EBITA The adjusted EBITA margin increased com-pared to the previous year, primarily driven by strong net sales growth in DCT and FoodTech, as well as a favorable product mix in AirTech and DCT following the completion of major deliveries. All business areas also benefited from efficiency improvements through lean initiatives and other operational efficiency measures. Key figures MSEK if nothing else is specified Net sales Adjusted EBITA Order intake Adjusted EBITA margin, % Operating profit (EBIT) Operating margin, % Net income Earnings per share after dilution, SEK Net debt OWC/net sales TRIR Share renewable electricity*, % Service & Components of net sales, % Number of employees at year-end * Production sites 13,930 2021 2020 9,013 7,249 10,386 7,348 7,015 1,839 1,070 889 906 13.2 10.3 12.1 12.9 1,586 881 753 707 11.4 8.5 10.2 10.1 792 577 515 432 4.3 3.17 2.81 2.32 4,620 3,825 2,389 2,116 14.2 12.7 13.1 13.2 1.2 1.8 1.7 1.2 80% 72% 53% 50% 24% 26% 27% 23% 4,981 3,940 3,315 3,214 The year in brief 5 The past year has been shaped by economic uncertainty, geopolitical shifts, and the accelerating impact of AI across industries. Despite these factors, Munters has navigated the evolving landscape with agility, leveraging strategic invest-ments in technology, operational expansion, and innovation-driven growth combined with several strategic acquisitions. As CEO & President Klas Forsström and Chairman of the Board Magnus Nicolin reflect on 2024 and look ahead into 2025, they emphasize flexibility, customer focus, and continuous transformation as key drivers of long-term success. CEO & Chairman conversation Reflecting on the past year: How has the overall macro-economic climate impacted the industry? Magnus: The macroeconomic landscape continues to evolve in increasingly complex ways. Following the US election, we have witnessed an acceleration in global economic developments, further reinforcing our expec-tation that 2023 and 2024 would be turbulent years. Now, as these trends unfold, we see a significant impact on industries worldwide. The rapid advancements in AI are revolutionizing businesses, driving efficiencies, and enabling the delivery of new services at an unprece-dented pace. Meanwhile, geopolitical tensions, inflationary pressures, and supply chain dis-ruptions add layers of complexity to an already dynamic environment. For Munters, this means that we must enhance our ability to respond with speed and agility. The good news is that we have been highly strategic in preparing for this fast-moving world. Over the past year, we have proactively positioned ourselves to nav-igate these challenges by strengthening our operations, investing in cutting-edge technol-ogy, and ensuring that we remain ahead of the curve in responding to market needs. Klas: If there is one defining factor for success in today's business environment, it is adapt-ability. Companies that can stay close to their customers and pivot quickly in response to changing conditions will be the ones that thrive. At Munters, we have embraced this reality and worked hard to ensure that our operations are structured to be as flexible and responsive as possible. While the global economy presents numerous challenges, it also brings with it incredible opportunities. This past year has been a testament to our ability to drive progress even in uncertain conditions. Our people have been at the heart of everything we have achieved, demonstrating remarkable resilience and commitment. Their efforts have allowed us to expand our product portfolio, introduce new services, and contin-ued to innovate. One key metric that highlights our innovation capabilities is our Munters vitality index, which reached around 40%. This means that a signifi