Munters is a Swedish company that specializes in developing, manufacturing, and selling equipment for controlling indoor climate, cooling data servers, and more. The company, founded by Carl Munters, has a rich history of innovation dating back to the early 1900s. Today, Munters employs 5,400 people, operates 27 factories, and has a presence in 45 countries.
In recent years, Munters has seen significant success with its new products designed to cool data servers and provide clean air in factories manufacturing lithium-ion batteries. These two sectors, data centers, and battery factories, are experiencing substantial investments, driving Munters’ growth.
The company’s main shareholder is the Wallenberg Foundation’s FAM, holding 28% of the shares, followed by Robur with 7.0% and other fund companies. The CEO, Klas Forsström, holds shares worth about 25 million SEK.
Munters divides its business into three areas: Airtech (52% of revenue), Data Center Technologies (30%), and FoodTech (18%). The revenue primarily comes from America (52%), with a recent expansion into Europe, EMEA (34%), and APAC (14%).
Focused on growth, Munters aims to achieve a operating margin above 14%. The company has seen a 18% annual growth rate over the past five years, with 14% being organic growth. The adjusted margin has been around 12.5% during this period.
In 2024, Munters set new growth targets as it entered a new growth phase, replacing the old 10% organic growth goal with a total growth target of 14% per year over a cycle, signaling increased acquisition growth.
Munters made several acquisitions in 2024, adding complementary products to its portfolio. The total growth for the year was 19%, with 5% being organic growth. The company also invested in expanding its production capacity, opening a new factory in Ireland and a new production unit in the USA.
However, this expansion has led to an increase in net debt to 5.3 billion SEK, excluding leasing. The company’s balance sheet was bolstered by the sale of its equipment division within the Foodtech segment to American Industrial Partners, although the valuation was lower than expected.
Despite these challenges, Munters remains optimistic about its future growth prospects, particularly in the digital products within the Foodtech segment. The company aims to increase the share of service and components in its revenue to one-third.
Following a report in early 2025, Munters saw a decline in its stock price due to lower-than-expected operating profit in the fourth quarter of 2024. The company faced challenges in its Air Technologies segment but remains positive about the data center market.
Looking ahead, analysts have revised their expectations for Munters, anticipating a missed operating margin target for 2025. The stock is currently valued at around 14.5x EV/Ebita for 2025, in line with industry averages.
In conclusion, Munters presents an investment opportunity with potential upside, although short-term challenges may impact the stock price. With a focus on growth and profitability, Munters is positioned to capitalize on emerging opportunities in its key market segments.