===== SIDA 1 ===== Interim report January-September 2023 1 Strong net sales growth and profitability improvement July-September – Order intake declined in business areas AirTech and Data Center Technologies (DCT), with a good development in business area FoodTech. – Net sales increased +28% organically, mainly driven by a very strong growth in DCT and the battery sub- segment in AirTech. FoodTech had a strong development in the US, in both Climate and Digital solutions, offset by a weak development in EMEA and APAC. – The adj. EBITA margin showed strong improvement mainly related to increased net sales in AirTech and DCT, net price increases, as well as efficiency improvements in all business areas. – Earnings per share increased by +47% driven by the strong net sales and improved profitability. – Cash flow from operating activities improved both compared to Q3 last year and Q2 this year mainly because of improved earnings and a reduction in operating working capital. Events after the close of the period – On 16 October the acquisition of the Indian manufacturer of air treatment solutions, ZECO was finalised. Financial summary LTM Full-year MSEK 2023 2022 ∆% 2023 2022 ∆% Oct-Sep 2022 Order intake 2,494 6,354 -61 8,465 13,688 -38 11,608 16,830 Net sales 3,560 2,644 35 10,271 7,375 39 13,281 10,386 Growth 35% 42% 39% 39% 41% 41% of which organic growth 28% 22% 31% 21% - 23% of which acquisitions and divestments 3% 3% 2% 4% - 15% of which currency effects 4% 18% 7% 14% - 4% Operating profit (EBIT) 454 271 68 1,211 626 94 1,466 881 Operating margin 12.8 10.3 11.8 8.5 11.0 8.5 Adjusted EBITA 503 293 72 1,371 766 79 1,675 1,070 Adjusted EBITA margin, % 14.1 11.1 13.3 10.4 12.6 10.3 Net income 264 178 48 734 446 65 865 577 Earnings per share before dilution, SEK 1.42 0.97 4.00 2.47 4.71 3.18 Earnings per share after dilution, SEK 1.42 0.97 4.00 2.47 4.71 3.17 Cash flow from operating activities 554 266 396 345 823 772 OWC/Net Sales 13.7% 13.1% 13.7% 13.1% 13.7% 12.7% Net debt 4,399 3,654 4,399 3,654 4,399 3,825 Net debt/Adjusted EBITDA, LTM 2.2 3.0 2.2 3.0 2.2 2.9 Q3 Jan-Sep Q3 2023 Net sales organic growth +28% Adj. EBITA margin 14.1% Operating working capital/net sales 13.7% ===== SIDA 2 ===== Interim report January-September 2023 2 CEO comments Strong net sales growth and margin contributions from all business areas As a summary of our achievements in the third quarter I would firstly like to highlight the strong net sales growth, driven by very good execution on large orders in Data Center Technologies as well as a good development in the battery sub-segment in AirTech. FoodTech had a very strong net sales development in the US driven both by Climate and Digital solutions, whereas APAC and EMEA continued to be weak. Secondly, I am happy to see that through good contributions from all business areas we reached our financial target for adjusted EBITA-margin of 14% in the quarter. Thirdly, through great efforts throughout the organization we generated strong operating cash flow reducing net debt to adjusted EBITDA to 2.2x. We continued to expand our market presence through the acquisition of ZECO, an Indian manufacturer of air treatment solutions. ZECO constitutes an important step in developing our dehumidification business in India and positions us to grow with market leading products and complete solution sales. Stable long -term growth trends and good market activity The underlying long-term growth drivers for our main markets are strong and we have seen continued good market activity in the quarter. In the short-term customers are placing orders closer to delivery, ie lead times are shortening, partly driven by the more unstable macroenvironment. Market activity in Airtech’s end markets was good, but order intake lower than last year mainly as the order intake did not comprise of any larger orders in the quarter compared to last year when we received a larger order for a battery production facility of MUSD 65. In Asia , the development in China was weak mainly due to a continued consolidation of the battery market. Data Center Technologies continued to see a very strong demand in North Americas, however, did not receive any large orders in the quarter. Last year in the same period two large orders were received with a combined value of MUSD 239. They had a good development in Europe, for example with an order for the product Oasis, that has enjoyed a good position in the US market since several years. Order intake in FoodTech was positive with strong development in both Climate - and Digital solutions in the US. The strong growth journey in Digital solutions is continuing and our SaaS business grew above 50 per cent. A slight recovery of the markets in APAC and EMEA led to a stable order intake in these regions. Focus on customer success through sustainable solutions Our adjusted EBITA grew more than 70% and the EBITA-margin improved compared to the third quarter last year in all business areas. The improvement is a result of the good volume increase, continued good pricing management, our continuous improvement initiatives as well as well -executed projects that led to high utilization of our production. Operating cash flow was positive in the quarter mainly because of reduced working capital levels from solutions being delivered to customers in Data Center Technologies. AirTech announced the first implementation of a virtually moisture - and carbon-free process air system in a production facility, in partnership with GreenCap solutions. The technology will improve the quality and lifetime of customers’ products, thereby making them more sus tainable. Our employees are the core of our business. In recent times with increasing geopolitical instability, we are now focusing even more on safety first for all our employees. I want to thank all employees for their hard work in making our journey a success. Klas Forsström President and CEO “We deliver strong net sales, good margins and a reduction of leverage. ” Midterm financial targets Sustainability targets* Net sales growth: Annual organic growth of net sales of 10% Performance Q3 2023: 28% (22) Renewable electricity 1: 80% by 2026 , eventually 100%, Performance Q3 2023: 80% (71) Adjusted EBITA margin: An adjusted EBITA margin above 14%. Performance Q3 2023: 14.1% (11.1) TRIR2: Eliminate accidents in production Performance Q3 2023: 1.2 (1.6) OWC/net sales: Average (LTM) operating working capital in the range of 13-10 % of net sales. Performance Q3 2023: 13.7% (13.1) Women in workforce: 30% by 2025 Performance Q3 2023: 24% (22) Dividend policy: Munters aim to pay an annual dividend corresponding to 30-50% of its consolidated income after tax for the period. Women leaders: 30% by 2025 Performance Q3 2023: 21% (22) For 2022 a dividend of SEK 0.95 (30% of income after tax) was paid in the second quarter, totaling MSEK 173. Service share: Service share 30% of net sales in the long term Performance Q3 2023, LTM: 13.4% (15.2) See Munters Annual and Sustainability report (ASR) 2022, pages 48-80, for further information on goals and outcome or at www.munters.com. For full description of the dividend policy, see the ASR 2022, page 9 or at www.munters.com. * Last 12 months 1 In production plants 2 Total Recordable Incident Rate (number of accidents where the employee had to seek medical assistance multiplied by 200,000/number of hours worked) ===== SIDA 3 ===== Interim report January-September 2023 3 Financial performance Order intake July-September 2023 Order intake amounted to MSEK 2,494 (6,354), (organic development of -64%, structural +1%, currency effects +2%), with good growth in FoodTech while the two other business areas experienced lower growth than last year. In the short-term customers are placing orders closer to delivery, partly driven by the more unstable macroenvironment. In the long-term underlying growth drivers for our main markets remain strong. Market activity in Airtech’s end markets was good, however order intake was lower than last year mainly as the order intake did not comprise of any larger orders in the quarter compared to last year. DCT continued to see strong demand in North Americas, however, did not receive any large orders in the quarter. Last year in the same period two large orders were received with a combined value of MUSD 239. Order intake in FoodTech was positive with strong development in both Climate- and Digital solutions in the US. A slight recovery of the markets in APAC and EMEA led to a stable order intake in these regions. For more information on the order intake, see the business area comments on pages 6 , 7 and 8. January-September 2023 Order intake during the first nine months of the year amounted to MSEK 8,465 (13,688), (organic development of -43%, structural +1%, currency effects +3%). The order backlog at the end of the period amounted to MSEK 10,025 compared to MSEK 11,866 in the third quarter 2022, corresponding to a -16% decrease. The majority of the backlog is attributable to large orders received in DCT and AirTech during 2022 to be delivered throughout 2025. Net sales July-September 2023 Net sales grew to MSEK 3,560 (2,644) (organic growth +28%, structural +3%, currency effects +4%). Growth was mainly driven by good execution on large orders in DCT as well as a good development in the battery sub- segment in AirTech. Both Climate and Digital solutions within FoodTech showed strong development in the US, whereas APAC and EMEA continued to be weak. Service net sales amounted to MSEK 479 (382) representing 13% (14) of total net sales with an organic growth of 7%. For more information on the net sales, see the business area comments on pages 6, 7 and 8. January-September 2023 Net sales grew to MSEK 10,271 (7,375) (organic growth +31%, structural +2%, currency effects +7%). Strong net sales growth was reported in AirTech and DCT driven by high activity in projects deliveries, whereas FoodTech showed flat development. Service net sales for the year amounted to MSEK 1,282 (1,056) representing 12% (14) of total net sales with an organic growth of 10%. LTM Full-year MSEK 2023 2022 ∆% 2023 2022 ∆% Oct-Sep 2022 Order intake 2,494 6,354 -61 8,465 13,688 -38 11,608 16,830 AirTech 1,463 2,453 -40 4,875 5,757 -15 7,517 8,399 DCT 404 3,406 -88 1,764 6,216 -72 1,793 6,245 FoodTech 651 507 28 1,878 1,759 7 2,360 2,242 Corporate & elim. -24 -11 - -50 -44 - -62 -56 Net sales 3,560 2,644 35 10,271 7,375 39 13,281 10,386 AirTech 1,978 1,684 17 6,090 4,817 26 8,103 6,830 DCT 953 378 152 2,483 901 176 2,983 1,401 FoodTech 650 594 10 1,745 1,697 3 2,259 2,211 Corporate & elim. -21 -12 - -48 -40 - -64 -56 Adjusted EBITA 503 293 72 1,371 766 79 1,675 1,070 AirTech 305 242 26 974 684 42 1,303 1,014 DCT 160 24 560 375 48 679 411 84 FoodTech 80 53 53 162 124 31 166 128 Corporate & elim. -42 -26 - -140 -91 - -205 -156 Adjusted EBITA margin, % 14.1 11.1 13.3 10.4 12.6 10.3 AirTech 15.4 14.4 16.0 14.2 16.1 14.8 DCT 16.8 6.4 15.1 5.3 13.8 6.0 FoodTech 12.4 8.8 9.3 7.3 7.4 5.8 Q3 Jan-Sep Quarterly order intake (MSEK) Order intake per Business Area Q3, 2023 (MSEK) Order intake per region Q3, 2023 (MSEK) Quarterly net sales, (MSEK) Net sales per Business Area Q3, 2023 (MSEK) Net sales per region Q 3, 2023 (MSEK) 0 5,000 10,000 15,000 20,000 Q3 21 Q1 Q3 22 Q1 Q3 23 0 2,000 4,000 6,000 8,000 Quarter LTM 0% 50% 100% AirTech 58% DCT 16% FoodTech 25% 0% 50% 100% Americas 52% EMEA 31% APAC 17% 0 4,000 8,000 12,000 16,000 Q3 21 Q4 Q1 Q2Q3 22 Q4 Q1 Q2Q3 23 0 1,000 2,000 3,000 4,000 Quarter LTM 0% 50% 100% AirTech 55% DCT 27% FoodTech 18% 0% 50% 100% Americas 62% EMEA 22% APAC 16% ===== SIDA 4 ===== Interim report January-September 2023 4 Results Adjusted EBITDA and EBITA excludes Items Affecting Comparability, IAC, see page 18 for disclosure of the IACs. July-September 2023 The gross margin amounted to 32.1% (29.3). The margin improved mainly as a result of strong net sales growth in AirTech and DCT, net price increases and positive effects from efficiency improvements . Adjusted EBITDA amounted to MSEK 587 (359), corresponding to an adjusted EBITDA-margin of 16.5% (13.6). Depreciation of tangible assets amounted to MSEK -84 (-66), whereof depreciation of leased assets was MS EK -48 (-34). Adjusted EBITA amounted to MSEK 503 (293), corresponding to an adjusted EBITA-margin of 14.1% (11.1). The margin improved mainly because of net sales increase s in AirTech and DCT as well as a high utilization rate of production, efficiency improvement efforts in all business areas as well as contributions from net price adjustments. Adjusted EBITA for Corporate amounted to MSEK -42 (-26). An expansion of the corporate functions is the main driver of the increased cost level. Operating profit (EBIT) was MSEK 454 (271), corresponding to an operating margin of 12.8 % (10.3). Amortization and write-downs of intangible assets were MSEK -41 (-28), where MSEK -13 (-9) related to amortization of intangible assets from acquisitions. January-September 2023 The gross margin amounted to 31.5% (29.0). Adjusted EBITDA amounted to MSEK 1,610 (951), corresponding to an adjusted EBITDA-margin of 15.7% (12.9). Depreciation of tangible assets amounted to MSEK -239 (-186), whereof depreciation of leased assets was MSEK -136 (-92). Adjusted EBITA amounted to MSEK 1,371 (766), corresponding to an adjusted EBITA-margin of 13.3% (10.4). The margin improved mainly because of net sales increases in AirTech and DCT, net price increase as well as efficiency improvement efforts in all business areas. Adjusted EBITA for Corporate amounted to MSEK -140 (-91). Operating profit (EBIT) was MSEK 1,211 (626), corresponding to an operating margin of 11.8% (8.5). Amortization and write-downs of intangible assets in the first nine months of the year were MSEK -113 (-75), where MSEK -38 (-27) related to amortization of intangible assets from acquisitions. Items affecting comparability (IAC) Items affecting comparability totaled MSEK -7 (6 ) in the third quarter including restructuring activities of MSEK 0 (8). A reversal of restructuring costs of MSEK 3 was recorded in the period, explaining the low cost from restructuring activities in the quarter. Other IACs totaled M SEK -7 (-2) and relate to costs for M&A activities. For the 9 months period IACs totaled MSEK -47 (-65) including restructuring activities of MSEK -12 (-36). Other IACs of MSEK -35 (-29) were recorded in the period and comprise costs for M&A activities and costs related to the announced strategic review of the equipment offering in FoodTech. In the same period last year Munters incurred IACs related to the decision to close down business activities in Russia of MSEK -27. Financial items Financial income and expenses for the third quarter amounted to MSEK -93 (-41). Compared to the same period last year interest expenses have increased due to higher interest rates in combination with increased outstanding debt. Interest expense on lease liabilities amounts to MSEK -11 (-5) in the third quarter. Financial income and expenses for the first nine months amounted to MSEK - 232 (-78). Taxes Income taxes for the third quarter was MSEK -98 (-53). The effective tax rate in the third quarter was 27% (23). Income taxes for the first nine months was MSEK -245 (-102). The effective tax rate for first nine months was 25% (19). The low effective tax rate in the first nine months of 2022 was mainly driven by tax related to previous years and a revaluation effect on deferred taxes in Sweden. Earnings per share Net income attributable to Parent Company’s ordinary shareholders amounted to MSEK 260 (176) in the third quarter. Earnings per share, before dilution, was SEK 1. 42 (0.97). Earnings per share, after dilution, was SEK 1. 42 (0.97). The average number of outstanding ordinary shares in the third quarter, for the purpose of calculating earnings per share, was 182,371,664 before dilution and 182,405,896 after dilution. Quarterly gross margin, % Quarterly adjusted EBITDA margin, % Quarterly adjusted EBITA margin, % Quarterly EBIT margin, % Tax rate LTM, % Quarterly EPS , SEK Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% 20% 25% 30% 35% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% 20% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% 20% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% 20% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 10% 20% 30% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0.0 0.5 1.0 1.5 ===== SIDA 5 ===== Interim report January-September 2023 5 Financial position Net debt as of September 30 amounted to MSEK 4, 399 compared to 3,654 at the end of September 2022 , 3,825 at the end of December 2022 and 4,833 at the end of June 2023. In the third quarter net debt was reduced because of improved operating earnings as well as a reduction in operating working capital. Net debt in relation to adjusted EBITDA was 2.2x compared to 2.7x at end of June 2023. Interest-bearing liabilities, including lease liabilities, increased by MSEK 1,190 compared to end of September 2022 and amounted to MSEK 5,345 (4,155). The increase is driven mainly by acquisitions financed through debt executed during the recent year as well as increased operating working capital in the recent twelve months. In the first nine months of 2023 Munters closed the acquisition of the Swedish manufacturer of components, Tobo components, the French service business SIFT and the acquisition of a majority share in the Brazilian manufacturer of controllers and complimentary accessories for the broiler and swine segments, InoBram. On the 16th of October, after the end of the Q3, it was announced that the acquisition of the Indian air handling equipment company ZECO had been finalized. The Group’s interest-bearing liabilities have an average maturity of 3. 3 years. Average capital employed for the last twelve months was MSEK 10,733 (8,255). Return on capital employed (ROCE) for the last twelve months increased to 13 .8% (9.9) because of improved operating earnings. Cash flow Cash flow from operating activities amounted to MSEK 554 (266) in the third quarter and MSEK 396 (345) for the first nine months of 2023. Cash flow from changes in working capital had a positive impact of MSEK 110 (30) in the third quarter and a negative impact of MSEK -724 (-273) for the first nine months of 2023. The positive impact in the third quarter is mainly related to the positive contribution from DCT as their deliveries to customers increased. The negative impact during the first nine months 2023 is mainly related to build-up of operating working capital in large orders within battery in AirTech. Total cash flow for the third quarter amounted to MSEK 458 (225) and MSEK 253 (-9) for the first nine months of 2023. The total cash flow for the first nine months was impacted by acquisitions of MSEK -148, investments in tangible and intangible assets of MSEK -455, payment of dividend to external shareholders in May 2023 of MSEK -175 and net increased external borrowing of MSEK 742. Parent company The parent company for the Group is Munters Group AB. The parent company does not engage in sales of goods and services to external customers. Cash and cash equivalents at the end of the period amounted to MSEK 3 (0 ). Net debt per quarter ROCE, % - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0 1,000 2,000 3,000 4,000 5,000 6,000 Quarter Leverage Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% ===== SIDA 6 ===== Interim report January-September 2023 6 AirTech Business area AirTech is a global leader in energy -efficient air treatment for industrial and commercial applications. We offer solutions for mission-critical processes that require exact control of moisture and temperature, with a focus on energy-efficiency and sustainable climate systems. Our clim ate systems also provide better indoor air quality and comfort, as well as increased production capacity. July-September 2023 Order intake Order intake decreased -45% organically, with negative development in all regions. No large orders were received in the quarter. Last year a large order for a battery production facility of MUSD 65 was received in the third quarter, excluding this order Airtech’s order intake declined -17%. • Within the Industrial segment the battery sub-segment had a weaker development, as customers in all regions are ordering closer to delivery. In APAC the weaker development was mainly related to China where the consolidation of the battery market continues. The market in EMEA and Americas was weaker mainly as customers are placing orders closer to delivery, ie lead times are shortening, partly driven by the more unstable macroenvironment . • Clean Technologies (CT) declined mainly due to delays in customer decisions related to major investments. • Components showed good growth in all regions, mainly driven by strong growth in Americas where the acquisition of Hygromedia and Rotorsource in 2022 had good contribution. Service showed growth in EMEA, offset by weaker markets in APAC and Americas. Net sales Net sales increased +12% organically, showing positive development in all segments and especially the battery sub-segment in Americas. Regions Americas and EMEA grew strongly, slightly offset by a weaker development in APAC. Service accounted for 19% (23) of net sales with an organic increase of +8%. • The Industrial segment showed growth in all regions, driven mainly by the battery subsegment in Americas. EMEA also showed good growth in the battery sub-segment, whereas APAC had weaker development. The pharmaceutical sub-segment in EMEA and the food sub-segment in Americas and APAC also contributed to growth. • Clean Technologies had a stable development in all regions. • The Components segment showed good growth in Americas and a flat development in APAC and EMEA. Service had good growth in EMEA, and flat development in the other regions. Adjusted EBITA The adjusted EBITA margin improved mainly because of increased net sales . • Efficiency improvements continued to have a positive impact on the margin. • Contributions from net price increases strengthened the margin. January-September 2023 • Order intake declined -21% organically. Components segment had good growth, offset by a weaker development in the Industrial segment. The Service segment showed a stable development. • Net sales increased +19% organically, mainly because of a strong development in the Industrial segment in all regions. Components showed good growth in all regions and Service grew in Americas and EMEA with a flat development in APAC. Service accounted for 19% (14) of net sales with an organic growth of +11%. • The adjusted EBITA margin improved because of volume increase combined with positive contributions from efficiency improvements and net price increases. LTM Full-year MSEK 2023 2022 ∆% 2023 2022 ∆% Oct-Sep 2022 External order backlog 3,572 4,219 -15 3,572 4,219 -15 3,572 4,698 Order intake 1,463 2,453 -40 4,875 5,757 -15 7,517 8,399 Growth -40% 63% -15% 41% 0% 44% Net sales 1,978 1,684 17 6,090 4,817 26 8,103 6,830 Growth 17% 43% 26% 47% 31% 46% of which organic growth 12% 25% 19% 32% - 31% of which acq. and div. 3% - 2% - - 0% of which currency effects 3% 17% 5% 14% - 15% Operating profit (EBIT) 290 247 17 926 657 41 1,245 976 Operating margin, % 14.7 14.7 15.2 13.6 15.4 14.3 Amortization of intang. asset -14 -7 -35 -17 -46 -29 Items affecting comparability -1 14 -13 -8 -14 -9 Re-allocation of int. services - -2 - -3 3 - Adjusted EBITA 305 242 26 974 684 42 1,303 1,014 Adjusted EBITA margin, % 15.4 14.4 16.0 14.2 16.1 14.8 Q3 Jan-Sep Quarterly net sales - AirTech , (MSEK) Quarterly adjusted EBITA margin % - AirTech Order intake per region Q3, 2023 - AirTech (MSEK) Net sales per region Q3, 2023 - AirTech (MSEK) 0 2,000 4,000 6,000 8,000 10,000 Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0 400 800 1,200 1,600 2,000 2,400 Quarter LTM 0% 5% 10% 15% 20% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% 20% Quarter LTM 0% 50% 100% Americas 46% EMEA 30% APAC 24% 0% 50% 100% Americas 48% EMEA 28% APAC 24% ===== SIDA 7 ===== Interim report January-September 2023 7 Data Center Technologies Business area Data Center Technologies (DCT) is a leading supplier of advanced climate cooling solutions using a wide range of heat rejection technologies. Our solutions produce significant energy savings for data centers compared with traditional cooling solutions. With a diversified product portfolio and extensive application knowledge, we create sustainable climate solutions for data center operators worldwide. DCT has operations in Virginia and Texas in the US, as well as in Ireland. July-September 2023 Order intake Order intake decreased -89% organically, excluding the two large orders of MUSD 239 received in the third quarter 2022 order intake decreased -49% organically. • The lower order intake compared to last year is partly due to a changed ordering pattern among customers, where orders last year were placed well ahead due to the supply chain constraints in the market. • The underlying demand is continued good with a strong long -term trend driven by continued digitization and an increased focus on energy-efficient cooling solutions for data centers. • Good development in Europe, for example with an order for the product Oasis . Net sales Net sales increased +140% organically, driven by good execution on large projects and increased deliveries. • Deliveries of the large orders announced during last year are proceeding according to plan. • The production ramp-up in Europe of Munters products is progressing according to plan . Preparations to introduce the SyCool split solution to the European market are ongoing. Adjusted EBITA The adjusted EBITA margin improved significantly primarily because of strong volume growth, combined with a high utilization rate in production. • Indirect costs in relation to net sales are expected to increase as investments in resources and competence are planned to accelerate over the coming quarters in order to capture growth opportunities. January-September 2023 • Order intake decreased -73% organically mainly because of customers having ordered solutions in advance last year because of previous supply chain challenges. • Net sales increased +157% organically, driven by high activity in large projects and a ramp -up of production. • The adjusted EBITA margin improved strongly because of volume increase, net price increases and efficiency improvements. LTM Full-year MSEK 2023 2022 ∆% 2023 2022 ∆% Oct-Sep 2022 External order backlog 5,453 6,739 -19 5,453 6,739 -19 5,453 5,937 Order intake 404 3,406 -88 1,764 6,216 -72 1,793 6,245 Growth -88% 1034% -72% 801% -73% 494% Net sales 953 378 152 2,483 901 176 2,983 1,401 Growth 152% 134% 176% 74% 175% 100% of which organic growth 140% 66% 157% 11% - 35% of which acq. and div. - 32% - 38% - 35% of which currency effects 13% 36% 18% 25% - 30% Operating profit (EBIT) 154 19 716 358 41 771 389 71 Operating margin, % 16.2 5.0 14.4 4.6 13.0 5.1 Amortization of intang. asset -6 -5 -17 -15 -22 -20 Items affecting comparability - 0 - 8 0 8 Adjusted EBITA 160 24 560 375 48 679 411 84 Adjusted EBITA margin, % 16.8 6.4 15.1 5.3 13.8 6.0 Q3 Jan-Sep Quarterly net sales - DCT, (MSEK) Quarterly adjusted EBITA margin % - DCT Order intake per region Q 3, 2023 – DCT (MSEK) Net sales per region Q 3, 2023 - DCT (MSEK) 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Q3 21 Q1 Q3 22 Q1 Q3 23 0 200 400 600 800 1,000 1,200 Quarter LTM 0% 5% 10% 15% 20% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 5% 10% 15% 20% Quarter LTM 0% 50% 100% Americas 71% EMEA 28% APAC 0% 0% 50% 100% Americas 95% EMEA 4% APAC 0% ===== SIDA 8 ===== Interim report January-September 2023 8 FoodTech Business area FoodTech is one of the world’s leading suppliers of innovative, energy -efficient climate systems for livestock farming and greenhouses, as well as software for controlling and optimizing the entire food production value chain. Our solutions increase productivity while contributing to sustainable food production, where strict requirements are placed on quality, animal health and food safety. In July 2023 Munters announced an initiation of a strategic review of FoodTech’s equipment business. July-September 2023 Order intake Order intake increased +22% organically, mainly driven by strong order intake in the US and a slight recovery in EMEA and APAC. • Both Climate and Digital solutions showed strong growth in the Americas region. Climate solutions in the US had a good development in the broiler and layer segments. Digital solutions continued to show very strong growth in the US. • In region EMEA the underlying market was continued weak as a consequence of lower investment levels. Positively, the layer segment showed good growth . • Region APAC showed stable development, with growth in both the broiler and layer segments. In China the swine market showed continued weak development. Net sales Net sales increased +1% organically, mainly due to continued weak markets in APAC and EMEA. • Climate solutions in Americas showed strong growth, primarily in the broiler and layer segment s. Digital solutions in the US grew with increased software recurring revenues +53% to MSEK 48, with an ARR (Annualized Recurring software Revenue) of MSEK 194 . • Region EMEA declined due to the overall weak market demand in all segments except layer which showed good growth. • The APAC region declined, mainly due to a continued weak swine market in China whereas the layer segment showed good growth. Adjusted EBITA The adjusted EBITA margin increased, mainly driven by positive effects from commercial excellence initiatives, including net price increases. • Increased net sales combined with positive effects from operational excellence improvements led to an improved margin, with recent years actions to mitigate negative effects from lower net sales in both EMEA and APAC providing a major positive contribution. • Positive effects from improved profitability in Digital solutions, despite continued high investments for growth. January-September 2023 • Order intake was flat organically, with a good development in Americas, offset by weak markets in APAC and EMEA. • Net sales declined -4% organically, mainly due to weak markets in APAC and EMEA, partly offset by a good development in Americas. • The adjusted EBITA margin improved significantly as a result of positive effects from net price increases and efficiency improvement initiatives. LTM Full-year MSEK 2023 2022 ∆% 2023 2022 ∆% Oct-Sep 2022 External order backlog 999 908 10 999 908 10 999 828 Order intake 651 507 28 1,878 1,759 7 2,360 2,242 Growth 28% 1% 7% 6% 4% 4% Net sales 650 594 10 1,745 1,697 3 2,259 2,211 of which SaaS 48 32 53 126 86 47 160 119 SaaS ARR 194 127 53 194 127 53 194 133 Growth 10% 13% 3% 12% 2% 9% of which organic growth 1% -1% -4% 1% - -2% of which acq. and div. 5% - 2% - - - of which currency effects 3% 13% 5% 11% - 11% Operating profit (EBIT) 61 30 99 86 28 210 63 5 Operating margin, % 9.3 5.1 4.9 1.6 2.8 0.2 Amortization of intang. asset -19 -15 -53 -39 -73 -59 Items affecting comparability -1 -6 -24 -57 -31 -64 Re-allocation of int. services - -1 - -1 1 - Adjusted EBITA 80 53 53 162 124 31 166 128 Adjusted EBITA margin, % 12.4 8.8 9.3 7.3 7.4 5.8 Q3 Jan-Sep Quarterly net sales - FoodTech , (MSEK) Quarterly adjusted EBITA margin % - FoodTech Order intake per region Q3, 2023 – FoodTech (MSEK) Net sales per region Q 3, 2023 - FoodTech (MSEK) 0 500 1,000 1,500 2,000 2,500 Q3 21 Q4 Q1 Q2Q3 22 Q4 Q1 Q2Q3 23 0 100 200 300 400 500 600 700 Quarter LTM 0% 2% 4% 6% 8% 10% 12% 14% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0% 2% 4% 6% 8% 10% 12% 14% Quarter LTM 0% 50% 100% Americas 55% EMEA 33% APAC 12% 0% 50% 100% Americas 55% EMEA 31% APAC 13% ===== SIDA 9 ===== Interim report January-September 2023 9 Corporate The Corporate function reported an adjusted EBITA of MSEK -42 (-26) in the third quarter. Corporate staff functions as well as minority investments are accounted for within Corporate. To further enhance Munters strategic journey Munters has started to make financial investments in start -ups with the aim to support innovation for the group within digitalization, technology, and sustainability. In 2022, five minority investments were made. In the third quarter 2023 Munters participated in the capital increase of one of the investments. Quarterly Corporate cost (MSEK) 0.0% 0.5% 1.0% 1.5% 2.0% Q3 21 Q4 Q1 Q2 Q3 22 Q4 Q1 Q2 Q3 23 0 20 40 60 Quarter % of Net sales, LTM ===== SIDA 10 ===== Interim report January-September 2023 10 Other information Employees The number of permanent FTEs (Full Time Equivalents) , at September 30, 2023 was 4,370 (3,755). The amount of FTEs at September 30, 2023 in business area AirTech was 2,720 (2,536), in DCT 619 (341), in FoodTech 892 (785) and at Group functions 139 (93). Outstanding shares As of September 30, 2023, Munters held 1,966,345 treasury shares of the total shares of 184,457,817. Thus, the number of outstanding shares as of the balance sheet date was 182, 491,472. Dividend A dividend of SEK 0.95 (0.85) per share was paid in May 2023, in total MSEK 17 3 (154). This represented 30 per cent of the net income 2022. During the second quarter a dividend of MSEK 2 (2) was paid to non- controlling interests. Other events during the quarter Strategic review of FoodTech equipment offering – On 18th July Munters announced that a strategic review of the equipment offering in FoodTech has been initiated. The company has decided to accelerate the focus on digital growth (software, IoT, sensors and controllers) and the strategic review includes exploring different options and may result in partial divestments, although no such d ecisions have yet been made. Munters net sales for 2022 amounted to approximately BSEK 10.4, of which the equipment sales within FoodTech accounted for approximately 16%. Agreement signed to a cquire ZECO – In September 2023 it was announced that an agreement had been signed to acquire ZECO, an Indian manufacturer of air treatment solutions for an estimated enterprise value of MSEK 790. ZECO will provide Munters with a strong platform to expand its dehumidification offering in the Indian market. ZECO reported net sales of about MSEK 510 for FY 2022/2023, ending on the 31st of March 2023. The reported EBITA -margin is accretive to the Munters Group. The acquisition will be fully financed through existing credit facilities. Nomination committ ee for the 2024 Annual General Meeting – In September Munters announced the Nomination committee for the 2024 Annual General Meeting. It comprises the following members: Magnus Fernström, FAM, Chairman of the Nomination Committee, Celia Grip, Swedbank Robur Funds, Ma ts Larsson, First Swedish National pension fund, Philip Mesch, ODIN Fund Management. Events after the close of the period Acquisition of ZECO - On 16th October the acquisition of the Indian manufacturer of air treatment solutions, ZECO was finalised. Ten largest shareholders As of 30 Sep % FAM AB 28.0 First Swedish National Pension Fund 6.2 ODIN Funds 6.2 Swedbank Robur Fund 6.1 Fourth Swedish National Pension Fund 5.1 Capital Group 3.3 Vanguard 2.1 Columbia Threadneedle 1.9 Schroders 1.8 Janus Henderson Investors 1.7 Source: Modular Finance AB ===== SIDA 11 ===== Interim report January-September 2023 11 About Munters Munters is a global leader in energy-efficient and sustainable climate solutions. The solutions guarantee temperature and humidity control, which is mission-critical for customers. Munters offers solutions to many different industries where controlling temperature and humidity is mission critical. Our solutions reduce customers’ climate and environmental impact through lower resource consumption, and in the process contribute to cleaner air, higher efficiency and reduced carbon emissions. Sustainability is an important part of Munters’ business strategy and value creation. Short facts – ~4,370 employees (FTEs) – >30 countries with sales and manufacturing – 19 production units – 21% women leaders – Three business areas: AirTech, Data Center Technologies and FoodTech In Q3, AirTech generated 55%, Data Center Technologies 27% and FoodTech 18% of the total net sales of Munters Purpose For customer success and a healthier planet Curiosity and a drive to create pioneering technologies are part of our DNA. Our climate solutions are mission-critical to our customers’ success and contribute to a more sustainable planet. The strategy of Munters Munters has a strong position in most of our markets. We see great opportunities to improve and strengthen our market position and to achieve our mid-term financial targets and deliver on our strategy. The key to success is how we respond in working toward our goals. Our overarching strategic priorities show which areas we regard as important to our success. For each strategic priority we have clear action plans and ambitions what we want to achieve. Sustainability is a priority issue reflected in every strategic priority. People: Employees are the hub of our business and their safety and health is a priority. Diversity and inclusion are important to us, since we are convinced that diversity leads to stronger innovation. Through collaboration and a passion for creating energy-efficient solutions for our customers and partners, we contribute to our customers’ success and a better world. Customers : We help our customers succeed by supplying high-quality climate solutions that make them more sustainable. Our success is built on close, long -term relationships and a deep understanding of the customer’s b usiness and future needs. Our strategy is to continue to build customer insight and utilize our broadbased expertise on applications, tec hnology and components to supply attractive solutions and services. Innovation: Curiosity and an ambition to create pioneering technologies are part of our DNA. We will stay at the forefront of the industry’s development and contribute to sustainable development through our energy - and resource-efficient climate solutions. We continue to invest in our core technologies, solutions and digitization to optimize our product portfolio and our innovative production technology. Markets : Munters is active around the world and climate change, digitization and population growth are the key mar kets drivers. Our resources are focused on strengthening our position in areas where we can be a market leader and growing the service business. With hig h- quality, resource-efficient solutions and a conscious effort to re-duce our own climate impact, we contribute to sustainable development. Excellence in everything we do: Our aim is to increase efficiency and quality in everything we do and to reduce our climate impact. Munters’ operations all share responsible business practices and high ethical standard s with a respect for human rights, diversity, and health and safety in the workplace ===== SIDA 12 ===== Interim report January-September 2023 12 Quarterly overview Group Income Statement Key performance indicators Net Debt MSEK Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Order backlog 10,025 11,153 10,783 11,463 11,866 7,515 6,367 4,198 3,525 Order intake 2,494 3,427 2,544 3,143 6,354 3,200 4,133 2,605 2,295 Net sales 3,560 3,536 3,175 3,011 2,644 2,610 2,121 2,057 1,857 Adjusted EBITDA 587 561 462 381 359 332 260 274 270 Depreciation tangible assets -84 -82 -73 -78 -66 -60 -59 -56 -55 Adjusted EBITA 503 479 389 304 293 272 201 217 215 Amortization intangible assets from acq. -13 -13 -12 -8 -9 -9 -9 -8 -8 Amortization other intangible assets -29 -25 -22 -30 -19 -15 -14 -10 -10 Items affecting comparability (IAC) -7 -34 -6 -9 6 -28 -44 -9 -4 Operating profit (EBIT) 454 408 349 255 271 220 134 190 194 Financial income and expenses -93 -66 -73 -64 -41 -14 -23 -14 -20 Tax -98 -85 -62 -61 -53 -39 -10 -43 -35 Net income 264 257 214 131 178 166 102 133 138 -attributable to Parent Comp. Shareholders 260 256 214 128 176 169 104 133 138 202120222023 MSEK Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Organic Growth, Net Sales 28% 27% 38% 26% 22% 25% 16% 10% 3% Adjusted EBITA margin, % 14.1 13.5 1 2.3 10.1 11.1 10.4 9.5 10.6 11.6 Operating margin, % 12.8 11.5 11.0 8.5 10.3 8.4 6.3 9.2 10.5 Earnings per share before dilution, SEK 1.42 1.40 1.18 0.70 0.97 0.93 0.57 0.73 0.75 Earnings per share before after, SEK 1.42 1.40 1.18 0.70 0.97 0.93 0.57 0.73 0.75 OWC/Net Sales, % 13.7 13.2 12.7 12.7 13.1 13.3 13.4 13.1 12.5 Net Debt/Adjusted EBITDA, LTM 2.2 2.7 2.7 2.9 3.0 2.9 2.6 2.2 2.2 2023 2022 2021 MSEK Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Cash and cash equivalents -1,165 -710 -618 -914 -698 -459 -565 -674 -440 Interest-bearing liabilities 4,575 4,518 3,772 3, 721 3,424 3,101 2,830 2,374 2,324 Lease liabilities 770 801 781 774 731 367 370 376 369 Provisions for pensions 197 209 217 227 187 226 298 308 279 Accrued financial expenses 21 15 24 16 10 6 5 5 4 Net Debt 4,399 4,833 4,175 3,825 3,654 3,241 2,938 2,389 2,536 202120222023 ===== SIDA 13 ===== Interim report January-September 2023 13 Condensed statement of comprehensive income LTM Full-year MSEK 2023 2022 2023 2022 Oct-Sep 2022 Net sales 3,560 2,644 10,271 7,375 13,281 10,386 Cost of goods sold -2,418 -1,870 -7,040 -5,237 -9,172 -7,368 Gross profit 1,142 774 3,230 2,138 4,110 3,017 Selling expenses -313 -271 -939 -772 -1,246 -1,079 Administrative costs -278 -204 -805 -566 -1,040 -800 Research and development costs -94 -58 -245 -168 -313 -236 Other operating income and expenses 0 30 -26 -7 -38 -19 Share of earnings in associates -3 - -5 - -7 -2 Operating profit 454 271 1,211 626 1,466 881 Financial income and expenses -93 -41 -232 -78 -296 -142 Profit/Loss after financial items 362 230 979 548 1,171 739 Tax -98 -53 -245 -102 -305 -162 Net income for the period 264 178 734 446 865 577 Attributable to Parent Company shareholders 260 176 730 449 857 577 Attributable to non-controlling interests 4 2 5 -3 8 -0 Average number of outstanding shares before dilution 182,371,664 181,795,436 182,194,023 181,671,444 182,143,744 181,752,465 Average number of outstanding shares after dilution 182,405,896 182,049,874 182,225,460 181,862,239 182,174,003 181,932,090 Earnings per share before dilution, SEK 1.42 0.97 4.00 2.47 4.71 3.18 Earnings per share after dilution, SEK 1.42 0.97 4.00 2.47 4.71 3.17 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange-rate differences on translation of foreign operations -87 289 151 643 -9 483 Items that will not be reclassified to profit or loss: Actuarial gains/losses on defined-benefit pension obligations 12 44 35 131 -5 91 Income tax effect not to be reclassified to profit or loss -3 -9 -7 -27 1 -18 Other comprehensive income, net after tax -78 324 178 747 -13 555 Total comprehensive income for the period 186 502 912 1,193 852 1,132 Attributable to Parent Company shareholders 182 500 908 1,197 845 1,133 Attributable to non-controlling interests 3 2 4 -4 7 -1 Q3 Jan-Sep ===== SIDA 14 ===== Interim report January-September 2023 14 Condensed statement of financial position Condensed statement of changes in equity MSEK 2023-09-30 2022-09-30 2022-12-31 ASSETS NON-CURRENT ASSETS Goodwill 5,694 5,172 5,359 Other intangible assets 2,207 2,041 2,027 Property, plant and equipment 972 781 825 Right-of-Use assets 729 713 751 Participations in associated companies 30 38 34 Other financial assets 86 53 83 Deferred tax assets 382 298 298 Total non-current assets 10,098 9,096 9,376 CURRENT ASSETS Inventory 1,965 1,765 1,956 Accounts receivable 2,486 1,899 2,235 Derivative instruments 2 − 2 Current tax assets 89 89 93 Other receivables 131 126 159 Prepaid expenses and accrued income 1,069 785 684 Cash and cash equivalents 1,165 698 914 Total current assets 6,907 5,362 6,042 TOTAL ASSETS 17,005 14,459 15,419 EQUITY AND LIABILITIES EQUITY Shareholders' equity 5,976 5,413 5,303 Non-controlling interests 1 3 3 Total equity 5,978 5,416 5,307 NON-CURRENT LIABILITIES Interest-bearing liabilities 4,568 3,386 3,721 Lease liabilities 594 610 640 Provisions for pensions 197 187 227 Other provisions 66 66 65 Other non-current liabilities 378 174 223 Deferred tax liabilities 443 459 442 Total non-current liabilities 6,246 4,882 5,318 CURRENT LIABILITIES Interest-bearing liabilities 7 37 − Lease liabilities 176 121 135 Other provisions 165 159 150 Accounts payable 1,156 932 1,288 Derivative instruments 11 3 − Current tax liabilities 108 48 55 Advances from customers 1,725 1,428 1,715 Other current liabilities 97 163 257 Accrued expenses and deferred income 1,335 1,270 1,194 Total current liabilities 4,781 4,160 4,794 TOTAL EQUITY AND LIABILITIES 17,005 14,459 15,419 MSEK 2023-09-30 2022-09-30 2022-12-31 Opening balance 5,307 4,363 4,363 Total comprehensive income for the period 912 1,193 1,132 Exercised share options 14 15 25 Put/call option related to non controlling interests -81 − -58 Dividends paid -175 -156 -156 Share option plan incl. deferred tax 1 2 0 Other − − 0 Closing balance 5,978 5,416 5,307 Total shareholders´ equity attributable to : The parent company's shareholders 5,976 5,413 5,303 Non-controlling interests 1 3 3 ===== SIDA 15 ===== Interim report January-September 2023 15 Condensed cash flow statement LTM Full-year MSEK 2023 2022 2023 2022 Oct-Sep 2022 OPERATING ACTIVITIES Operating profit 454 271 1,211 626 1,466 881 Reversal of non-cash items Depreciation, amortization and impairments 125 94 352 260 468 377 Other profit/loss items not affecting liquidity 15 -6 15 -14 5 -24 Change in provisions Provisions 3 -26 11 -20 7 -24 Cash flow before interest and tax 598 334 1,588 852 1,946 1,210 Paid financial items -73 -34 -214 -64 -272 -121 Taxes paid -81 -64 -254 -171 -316 -233 Cash flow from operating activites before changes in working capital 444 235 1,120 617 1,359 856 Change in accounts receivable -119 -94 -157 -151 -641 -635 Change in inventory 161 -149 83 -454 -168 -706 Change in accrued income 60 62 -278 -233 -281 -236 Change in accounts payable -104 -22 -172 33 192 397 Change in advances from customers 109 204 -173 573 230 977 Cashflow from changes in operating working capital 106 1 -696 -233 -667 -203 Change in other working capital 4 30 -28 -40 132 119 Cash flow from changes in working capital 110 30 -724 -273 -535 -84 Cash flow from operating activities 554 266 396 345 823 772 INVESTING ACTIVITIES Business acquisitions 1 - -148 -302 -568 -721 Investments in associated companies - -34 -0 -34 -1 -34 Investments in participations and securities in other companies -4 -36 -3 -39 -27 -62 Sale of intangible assets and property, plant and equipment 0 18 -1 19 7 27 Investment in property, plant and equipment -65 -44 -214 -133 -303 -222 Investment in intangible assets -66 -74 -242 -223 -337 -317 Cash flow from investing activities -134 -169 -608 -710 -1,227 -1,330 FINANCING ACTIVITIES Exercised share options 11 10 14 15 25 25 Loan raised 376 267 1,454 1,052 1,904 1,503 Amortization of loans -308 -117 -712 -466 -749 -504 Repayment of lease liabilities -40 -32 -117 -88 -150 -122 Dividends paid - - -175 -156 -175 -156 Other changes to financing activities -1 - -0 - -6 -5 Cash flow from financing activities 38 128 465 357 850 743 Cash flow for the period 458 225 253 -9 446 184 Cash and cash equivalents at period start 713 459 914 674 698 674 Exchange-rate differences in cash and cash equivalents -6 14 -2 34 20 56 Cash and cash equivalents at period end 1,165 698 1,165 698 1,165 914 Q3 Jan-Sep ===== SIDA 16 ===== Interim report January-September 2023 16 Parent company Condensed income statement Condensed statement of comprehensive income Condensed balance sheet LTM Full-year MSEK 2023 2022 2023 2022 Oct-Sep 2022 Net sales − − − − − − Gross profit/loss 0 0 0 0 0 − Administrative costs -4 0 -11 -3 -15 -8 Other operating income and expenses 26 4 29 5 32 8 Operating profit 22 5 18 2 18 1 Financial income and expenses -6 -2 -12 -3 -14 -5 Profit/Loss after financial items 16 3 6 -1 4 -4 Group contributions − − − − 7 7 Profit/Loss before tax 16 3 6 -1 10 3 Tax − 0 − 0 1 1 Net income for the period 16 3 6 -1 11 4 Q3 Jan-Sep Profit/Loss for the period 16 3 6 -1 11 4 Other comprehensive income, net after tax − − − − − − Comprehensive income for the period 16 3 6 -1 11 4 MSEK 2023-09-30 2022-09-30 2022-12-31 ASSETS NON-CURRENT ASSETS Participations in subsidiaries 4,098 4,097 4,098 Other financial assets 4 4 4 Total non-current assets 4,103 4,101 4,103 CURRENT ASSETS Prepaid expenses and accrued income − 1 1 Current tax assets 1 1 1 Receivables from subsidiaries 27 18 14 Cash and cash equivalents 3 0 0 Total current assets 31 20 15 TOTAL ASSETS 4,134 4,122 4,118 EQUITY AND LIABILITIES EQUITY Share capital 6 6 6 Share premium reserve 4,136 4,136 4,136 Profit brought forward -401 -257 -246 Income for the period 6 -1 4 Total equity 3,747 3,883 3,899 NON-CURRENT LIABILITIES Provisions for pensions and similar commitments 4 3 3 Total non-current liabilities 4 3 3 CURRENT LIABILITIES Accounts payable 1 2 1 Accrued expenses and deferred income 29 12 16 Liabilities to subsidiaries 348 217 192 Other liabilities 4 5 6 Total current liabilities 383 236 215 TOTAL EQUITY AND LIABILITIES 4,134 4,122 4,118 ===== SIDA 17 ===== Interim report January-September 2023 17 Other disclosures Accounting policies This report has been prepared, with regards to the Group, in accordance with IAS 34 Interim Financial Reporting, recommendation RFR 1 of the Swedish Financial Reporting Board and the Swedish Annual Accounts Act and, with regards to the Parent Company, in accordance with recommendation RFR 2 of the Swedish Financial Reporting Board and the Swedish Annual Accounts Act. The accounting principles applied correspond to those presented in the Annual- and Sustainability report 2022 (Note 1). Environmental impact and environmental policy Munters’ operations affect the external environment through air and water emissions, the handling of chemicals and waste, transport of input goods and finished products to and from Munters factories. Munters is committed to constant vigilance regarding the environmental impact of its operations. Munters is committed to complying with all laws and to continuously promoting improvements in all Environment, Health & Safety (EHS) aspects, wherever Munters conducts business. Munters cons tantly seeks opportunities to reduce risk and to create a safer, healthier, more diverse and more environmentally friendly workplace for our employees, customers, communities, and the overall environment. Munters’ manufacturing facilities all over the world are committed to working according to an EHS Management Program. The purpose of the EHS Program is to ensure regulatory compliance, actively prevent injuries, and reduce the impact that our business has on the environment. Risks and uncertainties The Group’s significant risks and uncertainties can be divided into four categories; strategic, operational, financial and regulatory risks. In these categories, there are both risks due to political and macroeconomic trends and specific risks directly linked to the business carried out by the Group. A risk assessment is carried out on an annual basis and the purpose is to identify and address the most important risks. Munters’ products are used in complex customer processes. Quality and contract obligations are critical and could result in claims for damages. The Group depends to some extent on key customers and key personnel. Considering that Munters is a company with geographically widespread operations and many small organizational units, there is a ris k of failure to comply with relevant regulations in the business ethics area, e.g. anti- bribery rules. Financial risks mainly consist of currency, interest and financing risks. Munters works actively with insurance solutions, and group -wide insurances are governed by central guidelines. This includes for example coverage for general liability and product liability, property, business interruption, transportation, the liability of Board members and the CEO and employment practices liabilities. In the beginning of October, 2023 Israel declared it was at war. Within the business area FoodTech, Munters has manufacturing of controllers in Israel located south of Tel Aviv with about 140 employees. Munters monitors the situation in Israel closely in order to be able to quickly respond to any disturbances. A more detailed description of the Group’s risks and how they are managed can be found in the Annual- and Sustainability report 2022 on pages 91-96 . Transactions with related parties There have been no significant transactions with related parties during the period. Fair value of financial instruments Financial assets measured at fair value through profit/loss relates to financial investments and derivatives. Financial investments am ounted to MSEK 65 (39) and net derivatives to MSEK -9 (-3) as of the balance sheet date. The Group’s put/call option, from the acquisition of MTech Systems in 2017, is recognized at fair value in the statement of financial position. The option is measured according to IFRS 9 and is categorized in level 3 in the fair value hierarchy. The exercise period begins on January 1, 2025, and ending on December 31, 2025. The fair value of the option amounts to MSEK 304 as of the balance sheet date. In June, Munters closed the acquisition of a majority share in InoBram. Munters has acquired 60% of the company but the agreement includes a put/call option for Munters to acquire the remaining 40% of the company in 2027. The option was recognized at fair value as of the transaction date. The fair value of the option amounts to MSEK 63 as of the balance sheet date. Munters deems that the interest rate on interest-bearing liabilities is in line with market terms on September 30, 2023, and the fair value at the end of the reporting period therefore in all material aspects corresponds to the carrying amount. MSEK 2023-09-30 2022-09-30 2022-12-31 Opening balance 217 137 137 Valuation put/call option 73 − − Remeasurements 62 − 57 Discounting 18 − − Exchange-rate differences 8 32 23 Closing balance 377 169 217 ===== SIDA 18 ===== Interim report January-September 2023 18 Net Sales by business area and region Net Sales by business area and region in Q3 Net Sales by business area and region Jan-Sep Reconciliation of alternative performance measures and items affecting comparability The Group presents certain financial metrics in the Interim Report that are not defined in accordance with IFRS. The Group is of the opinion that these metrics provide valuable complementary information, in that they enable an evaluation of the Group’s performance. The financial metrics are calculated in accordance with the definitions presented in this interim report. A reconciliation of Adjusted EBITDA and Adjusted EBITA is found in the quarterly overview on page 12. Items affecting comparability are events or transactions with significant financial effects, which are relevant for the understanding of the financial performance when comparing the current period to previous periods. Items included are for example, rest ructuring activities, capital gains and losses from business divestments and M&A related costs as well as costs for other events, such as the Covid -19 pandemic and war in Ukraine, having a significant impact on the comparability. Below is a break-down of items affecting comparability by period. Business combinations Consolidated acquisitions in 2023 The table shows number of full-time equivalent employees at the acquisition date. Revenue refers to estimated net sales in 2022. In May, Munters acquired 100% of Tobo Component, a Swedish manufacturer of humidification components. The company is headquartered in Tobo and has been a contract manufacturer of pads, cassettes, and modules for Munters for several years. In June, 100% of SIFT, a French service company within climate control and cold storage, active primarily in the northern France was acquired. The acquisition strengthens the market share for Munters within Service and builds a local service presence in strategic areas. In June, the acquisition of a majority share in InoBram was finalized. InoBram is a Brazilian manufacturer of controllers and complimentary accessories for the broiler and swine segments. With the help of innovative software, sensors and connected solutions, farmers and food producers get the tools they need to improve animal health and increase energy efficiency in their operations. Munters has acquired 60% of InoBram and has an option to acquire the remaining 40% of the company in 2027. The acquisition supports Munters’ strategy to grow its digital solutions for the food and agricultural industry and connects the entire food production value chain. The table below presents an overview of paid purchase considerations and the fair value of acquired net assets for the business combinations in 2023. At the balance sheet date the purchase considerations and the fair value of acquired net assets are based on preliminary purchase price allocations. The acquisition of the Indian air handling equipment company ZECO was closed on October 16th. For more information related to the acquisition, see page 10. MSEK 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Americas 979 727 913 315 353 258 0 0 2,245 1,301 EMEA 619 499 88 60 239 268 -13 -4 932 822 APAC 472 576 1 3 95 111 -6 -5 562 684 Sales between regions -92 -118 -49 -1 -36 -43 -2 -2 -180 -163 TOTAL 1,978 1,684 953 378 650 594 -21 -12 3,560 2,644 AirTech DCT GroupFoodTech Eliminations MSEK 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Americas 2,700 1,985 2,288 669 897 724 -1 -3 5,884 3,374 EMEA 1,970 1,562 246 227 705 798 -26 -13 2,895 2,574 APAC 1,835 1,656 3 6 249 303 -13 -18 2,074 1,948 Sales between regions -416 -387 -54 -2 -105 -127 -7 -6 -582 -521 TOTAL 6,090 4,817 2,483 901 1,745 1,697 -48 -40 10,271 7,375 AirTech DCT FoodTech Eliminations Group LTM Full-year MSEK 2023 2022 2023 2022 Oct-Sep 2022 Restructuring activities 0 8 -12 -36 -11 -35 Other items affecting comparability -7 -2 -35 -29 -45 -40 Total -7 6 -47 -65 -57 -75 Q3 Jan-Sep Company (Country) Business area Month acquired Number of employees Net sales Share (%) Tobo Component (SE) AirTech M ay 14 MSEK 76 100 SIFT (FR) AirTech J une 17 MEUR 3 100 InoBram (BR) FoodTech J une ~150 MBRL 53 60 MSEK Jan-Sep 2023 Purchase price Cash purchase consideration paid 171 Holdback & deferred considerations 8 Put/call option 63 Total purchase consideration 242 Fair value of acquired net assets -87 Goodwill 157 Cash flow Cash purchase consideration paid 171 Cash and cash equivalents in acquired companies 23 Change in the Group's cash and cash equivalents 148 ===== SIDA 19 ===== Interim report January-September 2023 19 THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL Review report Munters Group AB (publ.), corporate identity number 556819 -2321 Introduction We have reviewed the condensed interim report for Munters Group AB (publ.) as per September 30, 2023 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this in terim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review. Scope of review We conducted our review in accordance with the International Standard on R eview Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible f or financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company. Stockholm Ernst & Young AB Andreas Troberg Authorized Public Accountant ===== SIDA 20 ===== Interim report January-September 2023 20 Definition of key financial indicators In this financial report, there are references to several performance measures. Some of the measures are defined in IFRS, others are alternative performance measures and are not disclosed in accordance with applicable financial reporting frameworks or other legislations. The performance measures are used by the Group to assist both investors and management in analyzing Munters’ business. Below the performance measures found in this financial report are described and defined. The reason for the use of the performance measure is also disclosed. Organic growth Change in net sales compared to the previous period, excluding acquisitions and divestments and currency translation effects. The measure is used by Munters to monitor net sales growth driven by changes in volume and price between different periods. Order backlog Received and confirmed sales orders not yet delivered and accounted for as net sales. Order Backlog is a useful measure to indicate the efficiency of the conversion of received and confirmed sales orders into net sales in future periods. The measure is used by Munters to monitor business performance and customer demand and adjust operations if needed. Order intake Received and confirmed sales orders minus cancelled orders during the reporting period. The order intake is an indicator of future revenues and, consequently, an important KPI for the management of Munters’ business. Operating profit (EBIT) Earnings before interest and tax. Munters believes that EBIT shows the profit generated by the operating activities. Adjusted EBITA Operating profit, adjusted for amortizations, write-downs of intangible assets and items affecting comparability. Munters believes that using adjusted EBITA is helpful in analyzing our performance as it removes the impact of items considered not to be of recurring character and therefore do not reflect our core operating performance. Adjusted EBITA margin Adjusted EBITA as a percentage of net sales. Munters believes that Adjusted EBITA margin is a useful measure for showing the Company’s profit generated by the operating activities. Adjusted EBITDA Operating profit adjusted for items affecting comparability and depreciations, amortizations and write-downs of tangible and intangible assets as well as Right-of-Use assets. Adjusted EBITDA margin Adjusted EBITDA as a percentage of net sales. Items affecting comparability (IAC) Items affecting comparability are events or transactions with significant financial effects, which are relevant for the understanding of the financial performance when comparing the current period to previou s periods. Items included are for example, restructuring activities, capital gains and losses from business divestments and M&A related costs. Capital employed Capital employed is calculated as the total equity plus interest bearing liabilities. Return on capital employed (ROCE) Average operating profit (EBIT) plus financial income, divided by the average capital employed, where capital employed is total equity plus interest-bearing liabilities. The average capital employed is calculated based on the last 12 months. Cash and cash equivalents Cash and bank balances plus investments in securities and the like with maturity periods not exceeding three months. This is a measure that highlights the short-term liquidity. LTM LTM (last twelve months) after any key indicator means that the KPI corresponds to an accumulation of previous twelve month reported numbers. The measure highlight trends in different KPIs, which is valuable in order to gain a deeper understanding of the development of the business. Net debt Net debt calculated as interest bearing liabilities, lease liabilities, provisions for pension and accrued financial expenses, reduced by cash and cash equivalents. Number of employees Number of employees is presented recalculated as full-time positions, if not otherwise stated. Average number of employees for the year is calculated as the sum of permanent employees at the end of each of the last 13 months divided by 13. Operating working capital Includes accounts receivable, inventory, accrued income, accounts payable and advances from customers. Operating working capital/net sales Average Operating Working Capital for the last twelve months as a percentage of Net sales for the same period. Earnings per share Net income divided by the weighted average number of outstanding shares. SaaS recurring revenue Total recurring revenue from SaaS contracts (Software -as-a-Service) recognized in the period. The KPI is also presented annualized and named SaaS ARR, which is calculated by multiplying SaaS Recurring Revenue in the last quarter by four. Equity/assets ratio Equity (including non-controlling interests) divided by total assets. Americas Refers to North-, Central and South America. ===== SIDA 21 ===== Interim report January-September 2023 21 Information and reporting dates You are welcome to join a webcast or telephone conference on October 24 at 9:00 AM CEST, when President and CEO Klas Forsström together with the Group Vice President and CFO, Katharina Fischer, will present the report. Webcast https://ir.financialhearings.com/munters-q3-report-2023 Conference call If you wish to participate via teleconference, please register on the link below. After registration you will be provided phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference. https://conference.financialhearings.com/teleconference/?id=5009 867 This interim report, presentation material and a link to the webcast will be available on https://www.munters.com/en/investor- relations/ Every care has been taken in the translation of this interim report. In the event of discrepancies, the Swedish original will supersede the English translation. The addition of the totals presented may result in minor rounding differences. This information is information that Munters Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 AM CEST on October 24, 2023. Munters Group AB, Corp. Reg. No. 556819 -2321 Contact information: Ann-Sofi Jönsson Vice President, Investor Relations & Enterprise Risk Management Phone: +46 (0)730 251 005 Email: ann-sofi.jonsson@munters.com Line Dovärn Director, Investor Relations Phone: +46 (0)730 488 444 Email: line.dovarn@munters.com Financial calendar: Full year report January-December 2023 February 1, 2024 Release of Annual & Sustainability report 2023 Week starting February 19, 2024 Annual General Meeting March 21, 2024