Munters Group — Interim / Quarterly Report 2007

Aug 7, 2007

INTERIM REPORT JANUARY - JUNE 2007 August 7, 2007

SECOND QUARTER

• Order intake rose 7 percent to SEK 1,688 M (1,573), up 1 percent adjusted1 .
• ¾ Dehumidification continued its strong growth, with high demand for energy-efficient products for commercial premises.
• ¾ MCS was adversely affected by very dry weather conditions until the second half of June, when parts of Europe had heavy rain.
• ¾ HumiCool continued to develop favorably, but was affected by low demand for precoolers for gas turbines compared with the strong second quarter in 2006.
• Net sales increased by 5 percent to SEK 1,524 M (1,456), adjusted1 .
• Net earnings totaled SEK 70 M (79).
• ¾ Continued improvement of earnings and operating margin within Dehumidification and HumiCool, excluding the newly acquired Sial.
• ¾ Weakened earnings caused by dry weather and nonrecurring items of SEK 10 M within the MCS Division, and normal seasonal operating losses within Sial of SEK 10.5 M.
• ¾ Cost-reduction program initiated at MCS.
• Earnings per share amounted to SEK 0.95 (1.06).
• Agreement signed to acquire Danish-based Turbovent at the end of June strengthens HumiCool's position in climate control for the farming industry.

	2007	2006	Change	Adjusted
				change1
Order intake, SEK M	1,688	1,573	7%	1%
Net sales, SEK M	1,524	1,456	5%	5%
EBIT, SEK M	119	129	-7%	6%
EBIT margin, percent	7.8	8.8
Net earnings, SEK M	70	79	-11%
Earnings per share, SEK	0.95	1.06	-10%

1 Pro forma adjusted for currency fluctuations, acquisitions and disposals of businesses.

SIX-MONTH PERIOD

• Order intake rose 3 percent to SEK 3,215 M (3,088), adjusted1 .
• Net sales increased by 5 percent to SEK 2,928 M (2,841), adjusted1 .
• Net earnings totaled SEK 148 M (150).
• Earnings per share amounted to SEK 1.99 (2.02).

	2007	2006	Change	Adjusted change1
Order intake, SEK M	3,215	3,088	4%	3%
Net sales, SEK M	2,928	2,841	3%	5%
EBIT, SEK M	246	247	0%	8%
EBIT margin, percent	8.4	8.7
Net earnings, SEK M	148	150	-1%
Earnings per share, SEK	1.99	2.02	-1%

Munters is the world leader in humidity control, offering products and services for water and fire damage restoration, dehumidification, humidification and air cooling. Munters' business concept is to be a global service and application-driven niche company in air treatment, with a focus on environmentally friendly and energy-efficient solutions. Operations are organized in three divisions: Dehumidification, MCS (Moisture Control Services) and HumiCool. Manufacturing, sales and service operations are conducted through the Group's own companies, which have 3,900 permanent employees in 30 countries. The Munters share is listed on the Nordic Mid Cap list.

SECOND QUARTER

Order intake

During the second quarter, order intake rose 7 percent to SEK 1,688 M (1,573). Adjusted pro forma for currency effects, acquisitions and divestments, the increase was 1 percent. Dehumidification had an extremely strong order intake as a result of continued high demand for energy-efficient products for the cooling and dehumidification of commercial premises and the acquisition of Des Champs. However, order intake was relatively weak within MCS that was attributable to warm and weather in Europe, the US and Australia for a large part of the quarter, which had a negative effect on the water damage frequency. The heavy rains and flooding that have recently affected the UK and other areas of northern Europe will mainly impact order intake and sales during the second half of the year.

The order backlog rose by 27 percent compared with the preceding year and totaled SEK 1,306 M (1,028) at the end of the quarter.

Net sales

Consolidated net sales increased by 5 percent to SEK 1,524 M (1,456). Adjusted1 , the increase was 5 percent. The stronger krona compared with the preceding year had an adverse effect of 3 percent on net sales in Swedish kronor.

Earnings

EBIT for the Group amounted to SEK 119 M (129). Adjusted for currency and acquisitions, the increase was 6 percent. The operating margin amounted to 7.8 percent (8.8). Dehumidification and HumiCool, excluding the recently acquired Sial, noted continued improved earnings and margins, while MCS was negatively affected by lower net sales, increased costs for growth initiatives, and nonrecurring costs of approximately SEK 10 M related to operations in Italy and France. A cost-reduction program was initiated at MCS to increase profitability.

Sial, which was acquired by HumiCool in November 2006 and manufactures portable heaters, has as earlier communicated a strongly pronounced seasonal variation, with extremely weak net sales and earnings in the second quarter and normally extremely strong earnings in the fourth quarter, which had a negative effect on Group operating earnings during the quarter by SEK 10.5 M.

2004 and prior years in accordance with previous accounting principles

Consolidated earnings after financial items amounted to SEK 110 M (125). Net earnings for the quarter declined to SEK 70 M (79). Earnings per share amounted to SEK 0.95 (1.06), corresponding to a decrease of 10 percent.

Cash flow

Operating cash flow amounted to SEK 8 M (110). The decrease was caused by higher tax expenses, increased inventory, mainly driven by seasonal inventory accumulation in Sial and advance investments in dehumidifiers in MCS.

¹ Pro forma adjusted for currency effects, acquisitions and divestments.

INTERIM PERIOD

Order intake

During the period, the Group's order intake increased by 4 percent to SEK 3,215 M (3,088). Adjusted1 , the increase was 3 percent.

Net sales

The Group's net sales rose by 3 percent to SEK 2,928 M (2,841). Adjusted1 , the increase was 5 percent.

Earnings

EBIT for the Group declined by 0.3 percent to SEK 246 M (247). Adjusted for currency, acquisitions and disposals, the increase was 8 percent. The EBIT margin amounted to 8.4 percent (8.7).

Consolidated earnings after financial items amounted to SEK 231 M (238). Net earnings for the six-month period declined to SEK 148 M (150) after an effective tax rate of 36 percent (37). Earnings per share amounted to SEK 1.99 (2.02), corresponding to an increase of 1 percent.

Investments

The Group's investments in fixed assets during the period amounted to SEK 87 M (56), of which SEK 40 M (22) pertained to investments in MCS equipment. Depreciation and impairment amounted to SEK 75 M (76).

Financial position

At the end of the period, the equity/assets ratio amounted to 29 percent (48 at the start of the year). Interest-bearing assets amounted to SEK 291 M (201 at the beginning of the year) and interest-bearing provisions and liabilities to SEK 1,427 M (458 at the beginning of the year). During the year, net debt has risen by SEK 881 M to SEK 1,138 M, as the result of a redemption program of SEK 494 M, the acquisition of Des Champs for SEK 254 M and the ordinary dividend payment. The Group has unutilized loan facilities of SEK 931 M.

Personnel

At the end of the period, the number of permanent employees was 3,915 persons, an increase of 363 persons during the year. In the Dehumidification Division, the number of personnel increased by 226 persons, of which Des Champs, acquired in April, represents 196 persons, 71 in the MCS Division and 66 persons in the HumiCool Division.

¹ Pro forma adjusted for currency effects, acquisitions and divestment

DIVISIONAL PERFORMANCE

Dehumidification Division

The Dehumidification Division is divided into three business area, Industrial Dehumidification, Commercial Dehumidification and Zeol.

		2nd Quarter	Jan-Jun
SEK M	2007	2006	2007	2006
Order Intake	556	465	999	895
Change	20%		12%
Adjusted change	10%		10%
Net Sales	528	419	898	779
Change	26%		15%
Adjusted change	19%		15%
Operating Earnings	69	49	107	79
Operating Margin	13.1%	11.8%	11.9%	10.1%

Second quarter

The division's order intake remained string during the period, partly thanks to the acquisition of Des Champs, but also adjusted for acquisitions and currency. Industrial Dehumidification experienced a favorable trend, with continued solid market foundations. Commercial Dehumidification continued its highly rapid growth due to a high level of demand for energyefficient products for dehumidification and cooling. The order intake from WalMart was favorable and the anticipated decline in the new construction of business premises was offset by a program of exchange for older, less energyefficient units. The trend for other national customers was also very strong. Newly acquired Des Champs was very positively affected by the same market trends and secured a number of significant orders during the period. Order intake for Zeol, on the other hand, remained weak due to low demand from the semiconductor industry.

Net sales developed very strongly during the quarter, up 19 percent adjusted for currency and acquisitions. Only Zeol reported a weak trend.

Operating earnings also improved sharply, up 40 percent adjusted, driven by the strong growth and solid cost control.

Six-month period

The Division reported sharp improvement in its order intake, net sales and earnings in the first half of the year, despite high comparison figures from the first half of 2006. The Commercial business area especially reported a strong trend, aided by the successful acquisition of Des Champs. The Zeol business area, on the other hand, entered into a sharp cyclical decline during the period, due to weak demand from the semiconductor industry.

MCS Division

The MCS Division is divided into six market areas: the Nordic Region, Central Europe, the UK and Ireland, Southern and Western Europe, the Americas, and Asia.

SEK M	2nd Quarter		Jan-Jun
	2007	2006	2007	2006
Order intake	634	654	1,267	1,304
Change	-3%		-3%
Adjusted change1	-1%		0%
Net sales	605	635	1,219	1,295
Change	-5%		-6%
Adjusted change1	-3%		3%
Operating earnings	10	29	48	75
Operating margin	1.7%	4.6%	4.0%	5.8%

Second quarter

Order intake and net sales during the quarter declined somewhat compared with the extremely strong year-earlier period. Compared with the second quarter of 2005, however, order intake was 27 percent higher and MCS continued to gain market shares in Europe. The hot, dry weather in Europe, the US and Australia, which is highly unfavorable for MCS, continued during the quarter until the end of June, when severe rain and flooding in Northern and Western Europe – particularly in the UK – resulted in increased orders. This had a limited impact on the second quarter, but will generate a positive effect in the second half of the year.

Operating earnings and the operating margin were weak during the quarter, which, seasonally, is also usually the weakest quarter of the year. Apart from the lower sales driven by unfavorable weather, earnings were also impacted by approximately SEK 10 M in nonrecurring costs related to a reassessment of the recoverability of older accounts receivable in the French company and a management change in the Italian company. Moreover, cost investments in growth initiatives, primarily in the US, have not yet generated the anticipated return, partly due to intense competition in the American market in conjunction with low damage frequency. However, the trend of improvement in Germany continued, with positive earnings for the quarter.

An aggressive cost-reduction program was initiated during the quarter to improve the division's profitability. In addition, MCS' strategic initiatives will also be prioritized more intensively to enhance the efficiency of its business model and improving sales to key customers, such as major insurance companies.

Six-month period

The weak start to 2007 was driven by highly unfavorable weather and the limited success of growth initiatives. The long-term market consolidation trends identified previously remains unchanged, however, and the proportion of fixed framework agreements is rising steadily. MCS is well-positioned to benefit from these trends and further focus on adapting and enhancing the efficiency of the business model will give the division favorable conditions for improved profitability.

HumiCool Division

The HumiCool Division is divided into four business areas: AgHort, Mist Elimination, HVAC and PreCooler.

SEK M	2nd Quarter		Jan-Jun
	2007	2006	2007	2006
Order intake	518	462	983	912
Change	12%		8%
Adjusted change1	-4%		2%
Net sales	414	411	843	787
Change	1%		7%
Adjusted change1	4%		9%
Operating earnings	55	63	114	113
Operating margin	13.3%	15.2%	13.6%	14.4%

Second quarter

Order intake rose 12 percent in Swedish kronor during the quarter, driven by the seasonally high order intake for Sial. Adjusted for acquisitions and disposals and currency fluctuations, order intake was down 4 percent. The decline was driven by the smaller number of large projects for pre-coolers for gas turbines than in the strong year-earlier period. The weak order intake in AgHort in the US was also ongoing, but there were signs of improved market fundamentals. The other business areas were relatively strong. Preseason orders to Sial have not been as heavily impacted to date by the mild 2006/2007 winter as previously feared.

Net sales rose during the quarter by 4 percent adjusted for currency and acquisitions. Sales were adversely impacted by AgHort in the US and by a temporary delivery reduction in Mist Elimination.

Earnings remain strong, but were sharply impacted during the quarter by losses in Sial in conjunction with the annual low season for heaters. Excluding Sial, the operating margin improved during the quarter.

Six-month period

The trend of the operations remained stable compared with the high comparison figures from the first half of 2006. The underlying margin improvement also continued.

¹ Pro forma adjusted for currency effects, acquisitions and disposals.

Acquisition of Turbovent

An agreement for the acquisition of Danish company Turbovent was signed on June 28 and approved by the competition authority on July 12. With this acquisition, Munters Humi-Cool strengthens its position as a leading supplier of climate control equipment for the agricultural segment.

Turbovent mainly manufactures ventilation equipment for poultry, pig and cattle farms in Scandinavia, Germany and Eastern Europe. Turbovent is also a leader in air cleaning and odor removal solutions for the agricultural industry. The company employs about 45 people, and has rolling 12-month sales of DKK 69 M.

Munters has acquired 100 percent of the shares in Turbovent Agro A/S and Turbovent Environment A/S for DKK 65.5 M in cash. It is expected this will favorably impact Munters' earnings per share in 2007.

KEY RISKS AND UNCERTAINTY FAC-TORS

The risk exposure of Munters can be divided in two categories; operational risks such as weather dependent, dependence of key personnel and key customers, and geographically spread operations with small operational units; together with financial risks mainly currency-, interest- and financing risks.

FUTURE INFORMATION DATES

October 18 Interim report January–September

After a period of relative few acquisitions has the number of acquisitions increased which might lead to integrate risks. During the sixmonth period, the financial risks, which are primarily interest-rate risks and currency risks, are deemed to have increased due to higher external borrowing as a consequence of acqustions and redemption of treasury shares. A more detailed description of the Group's and the Parent Company's other risk exposure and risk management may be found in the "Risk management" section, pages 30-31, of the Munters Annual Report, which is available on www.munters.com.

TRANSACTIONS WITH RELATED PAR-TIES

There are no significant contractual relationships or transactions between Munters and its related parties.

PARENT COMPANY

The Parent Company's earnings after financial items amounted to SEK 144 M (115) for the sixmonth period. There were no external net sales (as was the case in the preceding year). Cash and cash equivalents at the close of the period amounted to SEK 80 M (20) and the net debt amounted to SEK 1,186 M (295). Investments amounted to SEK 8 M (5). The number of employees was 18 (21).

The Board of Directors and the CEO certify that the half-yearly financial report gives a fair review of the performance of the business, position and earnings of the Company and the Group, and describes the principal risks and uncertainties that the Company and the companies in the Group face.

Sollentuna, August 7, 2007

Berthold Lindqvist Anders Ilstam Bengt Kjell Chairman of the Board Member of the Board Member of the Board

Member of the Board Member of the Board Member of the Board

Eva-Lotta Kraft Pia Nordqvist Sören Mellstig

Sven Ohlsson Jan Svensson Kjell Wiberg Member of the Board Member of the Board Member of the Board

Lars Engström

President and CEO Member of the Board

Munters discloses the information provided herein pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 14.00 CET, on August 7, 2007.

For further information, please contact: Lars Engström, Chief Executive Officer, Tel: +46 8 626 63 03, lars.engstrom@munters.se Jonas Samuelson, Chief Financial Officer, Tel: +46 8 626 63 06, jonas.samuelson@munters.se

Munters AB (publ) Corp. Reg. No. 556041-0606 Box 430, SE-191 24 Sollentuna, Sweden Tel: +46 8 626 63 00, Fax +46 8 754 68 96 info@munters.se, www.munters.com

This six-month report, along with other information, is available on www.munters.com

Report on Review of Interim Financial Information

To the Board of Directors of Munters AB (publ)

Introduction

We have conducted a review of the financial interim report for Munters AB at June 30, 2007 and for the period January 1 to June 30, 2007. The Board of Directors and the President are responsible for the preparation and fair presentation of this interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review.

Focus and scope of review

We conducted our review in accordance with the International Standard on Review Engagements, SÖG 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other general review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing in Sweden RS and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying six-month financial information has not in all essential respects been prepared, as regards the consolidated information, in accordance with IAS 34 and the Annual Accounts Act, and as regards the Parent Company information, in accordance with the Annual Accounts Act.

Stockholm, August 7, 2007

Ernst & Young AB

Björn Fernström Authorized Public Accountant

Amounts in SEK M	2007	2006	2007	2006	2006/2007	2006
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
	3 months	3 months	6 months	6 months	12 months	12 months
Order intake	1,688	1,573	3,215	3,088	5,888	5,761
Income statement
Net sales	1,524	1,456	2,928	2,841	5,799	5,712
Cost of goods sold	-1,097	-1,048	-2,097	-2,066	-4,139	-4,108
Gross earnings	427	408	831	775	1,660	1,604
Gross margin	28.0%	28.0%	28.3%	27.3%	28.6%	28.1%
Other operating income	-	0	1	13	2	14
Selling expenses	-168	-157	-321	-304	-634	-617
Administrative expenses	-122	-107	-232	-210	-436	-414
Research and development costs	-18	-14	-33	-26	-59	-52
Other operating expenses	0	-1	0	-1	-5	-6
EBIT - Earnings before interest and tax	119	129	246	247	528	529
EBIT margin	7.8%	8.8%	8.4%	8.7%	9.1%	9.3%
Financial income and expenses	-9	-4	-15	-9	-21	-15
Earnings after financial income	110	125	231	238	507	514
Taxes	-40	-46	-83	-88	-181	-186
Net earnings	70	79	148	150	326	328
Attributable to equity holders of the parent	70	78	147	149	323	325
Attributable to minority interest	0	1	1	1	3	3
Earnings per share, SEK	0.95	1.06	1.99	2.02	4.37	4.40
Earnings per share - after dilution, SEK	0.95	1.06	1.99	2.02	4.37	4.40
Order intake by division
Dehumidification Division	556	465	999	895	1,797	1,693
MCS Division	634	654	1,267	1,304	2,504	2,541
HumiCool Division	518	462	983	912	1,656	1,585
Eliminations	-20	-8	-34	-23	-69	-58
Order intake	1,688	1,573	3,215	3,088	5,888	5,761
Net sales by division
Dehumidification Division	527	419	898	779	1,754	1,635
MCS Division	605	635	1,219	1,295	2,542	2,618
HumiCool Division	414	411	843	787	1,570	1,514
Eliminations	-22	-9	-32	-20	-67	-55
Net sales	1,524	1,456	2,928	2,841	5,799	5,712
Operating earnings by division
Dehumidification Division	69	49	107	79	222	194
operating margin	13.1%	11.8%	11.9%	10.1%	12.7%	11.9%
MCS Division	10	29	48	75	132	159
operating margin	1.7%	4.6%	4.0%	5.8%	5.2%	6.1%
HumiCool Division	55	62	114	113	214	213
operating margin	13.3%	15.2%	13.6%	14.4%	13.6%	14.1%
Central, goodwill impairments, eliminations etc.	-15	-11	-23	-20	-40	-37
EBIT	119	129	246	247	528	529

Amounts in SEK M	2007	2007	2006	2006
	30 Jun	31 Mar	31 Dec	30 Jun1
Balance sheet
Assets
Fixed assets
Tangible assets
Buildings and land	175	176	166	161
Plant and machinery	135	135	134	123
Equipment, tools, fixtures and fittings	254	232	228	207
Construction in progress	11	7	10	6
	575	550	538	497
Intangible assets
Patent, licenses, trademarks and similar rights	75	47	43	16
Goodwill	768	562	543	354
	843	609	586	370
Financial assets
Participation in associated companies	5	4	4	6
Other long-term receivables	16	15	14	16
Deferred tax assets	78	60	62	62
	99	79	80	84
	1,517	1,238	1,204	951
Current assets
Inventory etc.	581	498	458	464
Accounts receivable	1,096	1,077	1,132	1,040
Other receivables	162	181	149	161
Liquid funds	291	216	201	213
	2,130	1,972	1,940	1,878
Total assets	3,647	3,210	3,144	2,829
Equity and liabilities
Equity	1,066	1,640	1,506	1,367
Long-term liabilities
Interest-bearing liabilities	18	18	16	3
Provisions	174	180	170	163
Deferred tax liabilities	45	32	32	24
Other liabilities	3	3	2	3
	240	233	220	193
Short-term liabilities
Interest-bearing liabilities	1,264	250	299	320
Advances from customers	82	85	117	87
Accounts payable	426	416	435	344
Provisions	72	57	59	51
Other liabilities	497	529	508	467
	2,341	1,337	1,418	1,269
Total equity and liabilities	3,647	3,210	3,144	2,829

Consolidated statement of recognized income and expense

Income and expenses recognized in equity
Actuarial gains and losses related to pensions, including
special employer's contribution	0	0	3	-3
Cash flow hedges	-1	-1	5	3
Exchange differences on translation of foreign operations	64	47	-132	-84
Tax on items reported directly in equity	0	0	-3	-1
Total transactions reported in equity	63	46	-127	-85
Net earnings for the period	148	78	328	150
Total income and expenses recognized for the period	211	124	201	65
Attributable to:
Equity holders of the parent	211	123	198	64
Minority interest	1	1	3	1
	212	124	201	65

1 The period has been restated in accordance with new option in IAS 19 applied 2006.

Amounts in SEK	2007	2006	2007	2006	2006/2007	2006
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
	3 months	3 months	6 months	6 months	12 months	12 months
Cash flow statement
Current operations
Earnings after financial items	110	125	231	238	507	514
Reversal of depreciation etc.	38	30	75	76	135	136
Other earnings items not affecting cash flow	-1	21	-9	9	1	19
Taxes paid	-82	-52	-105	-74	-212	-181
Cash flow from current operations
before changes in working capital	65	124	192	249	431	488
Cash flow from changes in working capital
Changes in inventory	-54	-13	-82	-24	-36	22
Changes in accounts receivable	5	-10	91	50	46	5
Changes in other receivables	19	-10	-7	-32	6	-19
Changes in accounts payable	8	27	-48	5	-34	19
Changes in other liabilities	17	20	-3	-14	26	15
Sum of changes in working capital	-5	14	-49	-15	8	42
Cash flow from current operations	60	138	143	234	439	530
Investing activities
Acquisitions and disposals of businesses	-253	-	-255	26	-413	-132
Investments in intangible assets	0	-2	-5	-2	-9	-6
Investments in tangible assets	-53	-26	-87	-56	-184	-153
Sales of tangible assets	0	0	1	0	5	4
Changes in other financial assets	1	0	1	0	1	0
Cash flow from investing activities	-305	-28	-345	-32	-600	-287
Financing activities
Changes in loans	981	-7	936	-26	886	-76
Dividend paid	-166	-135	-166	-135	-166	-135
Redemption of shares	-494	-	-494	-	-494	-
Payment received for issued stock options Sale of treasury stock	- -1	2 -	- 11	2 -	0 14	2 3
Cash flow from investing activities	320	-140	287	-159	240	-206
Cash flow for the period	75	-30	85	43	79	37
Liquid funds at the beginning of the period	216	248	201	176	213	176
Exchange-differences in liquid funds	0	-5	5	-6	-1	-12
Liquid funds at end of the period	291	213	291	213	291	201
Operating cash flow	8	110	53	176	252	375
Key figures
More key figures are disclosed in the quarterly review
Capital turnover rate, times	-	-	2.8	3.0	2.8	3.0
Return on capital employed, %	-	-	26.1	27.3	26.1	28.0
Return on equity, %	-	-	23.0	22.8	23.0	22.5
Interest coverage ratio, times	11.1	27.2	11.1	26.1	18.8	25.0
Net debt structure
Short-term interest-bearing liabilities	-	-	1,264	320	1,264	298
Long-term interest-bearing liabilities	-	-	18	3	18	16
Defined benefit plans etc.	-	-	147	149	145	144
Interest-bearing assets Net debt	- -	- -	-291 1,138	-214 258	-291 1,136	-201 257

Amounts in SEK M		2007		2006				2005
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Order intake	1,688	1,527	1,311	1,362	1,573	1,515	1,440	1,422	1,294	1,184
Income statement
Net sales	1,524	1,404	1,462	1,408	1,456	1,386	1,543	1,317	1,192	1,079
Operating expenses		-1,405 -1,277	-1,319	-1,268	-1,327	-1,268	-1,388	-1,205	-1,118	-1,015
EBIT	119	127	143	140	129	118	155	112	74	64
EBIT margin	7.8%	9.0%	9.8%	9.9%	8.8%	8.5%	10.1%	8.5%	6.2%	5.9%
Financial income and expense	-9	-6	-3	-4	-4	-5	-2	-6	-2	-3
Earnings after financial items	110	121	140	136	125	113	153	106	72	61
Taxes	-40	-43	-48	-50	-46	-42	-49	-38	-29	-24
Net earnings	70	78	92	86	79	71	104	68	43	37
Depreciation and impairments	38	37	28	32	30	46	35	35	38	33
Share data1,3
Earnings per share, SEK	0.95	1.04	1.23	1.15	1.06	0.96	1.40	0.92	0.57	0.50
Earnings per share after dilution, SEK	0.95	1.04	1.23	1.15	1.06	0.96	1.40	0.92	0.57	0.50
Average no of shares outstanding, thousand			73,863 73,791 73,749 73,743 73,743 73,743 73,743 73,572 73,485 73,221
No of shares outstanding at period-end, thousand			73,933 73,933 73,785 73,746 73,743 73,743 73,743 73,743 73,743 73,713
No of treasury shares, thousand	1,067	1,067	1,215	1,254	1,257	1,257	1,257	1,257	1,257	1,287
Equity per share, SEK	14.36	22.13	20.33	19.66	18.48	20.04	19.42	18.28	17.45	17.06
Stock price at period-end, SEK	107.5	101	106	95	80	88	73	61	58	63
Market cap at period-end, SEK M2	8,063	7,550	7,925	7,100	6,013	6,613	5,475	4,575	4,325	4,750
Cash flow statement
From current operations	60	83	112	184	138	96	74	112	66	54
From investing operations	-305	-40	-210	-45	-28	-4	-37	-37	-70	-22
From financing operations	320	-33	3	-50	-140	-19	-22	-100	2	25
Cash flow for the period	75	10	-95	89	-30	73	15	-25	-2	57
Operating cash flow	8	45	61	138	110	66	37	75	37	32

Quarterly overview - Consolidated earnings, share data and cash flow

1 The periods Q4 2005 to Q3 2006 have been restated in accordance with new option in IAS 19 applied in 2006.

2 The market cap is calculated on total number of issued shares, including treasury shares.

3 Historical data for the share are adjusted for the share split, redemption and bonus issue performed in second quarter 2007.

Amounts in SEK M	2007			20061			20051
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Balance sheet
Assets
Fixed assets
Tangible assets	575	550	538	507	497	520	556	551	555	529
Intangible assets	843	609	586	370	370	379	382	380	383	369
Financial assets	99	79	80	83	84	85	98	81	78	72
		1,517 1,238	1,204	960	951	984	1,036	1,012	1,016	970
Current assets
Inventory etc.	581	498	458	472	464	471	469	442	431	369
Accounts receivable		1,096 1,077	1,132	994	1,040	1,066	1,140	953	923	898
Other receivables	162	181	149	151	161	150	125	141	144	146
Liquid funds	291	216	201	297	213	248	176	158	184	178
		2,130 1,972	1,940	1,914	1,878	1,935	1,910	1,694	1,682	1,591
Total assets		3,647 3,210	3,144	2,874	2,829	2,919	2,946	2,706	2,698	2,561
Equity and liabilities
Equity		1,066 1,640	1,506	1,454	1,367	1,483	1,437	1,350	1,291	1,261
Long-term liabilities	222	215	204	193	190	183	181	151	151	147
Interest-bearing liabilities	1,282	268	315	273	323	332	351	374	481	371
Accounts payable	426	416	435	320	344	328	355	263	282	280
Other short-term liabilities	651	671	684	634	605	593	622	568	493	502
Total equity and liabilities		3,647 3,210	3,144	2,874	2,829	2,919	2,946	2,706	2,698	2,561
Key figures
Equity ratio, %	29.2	51.1	47.9	50.6	48.3	50.8	48.8	50.0	47.9	49.2
Net debt, SEK M	1,138	209	257	127	258	229	315	318	397	296
Net debt ratio, times	1.07	0.13	0.17	0.09	0.19	0.15	0.22	0.23	0.31	0.23
Interest coverage ratio, times	11.1	22.2	21.1	28.3	27.2	24.9	33.6	27.7	12.3	12.3
Investments tangible assets, SEK M	53	34	53	44	26	30	37	37	31	21
Number of employees at period-end		3,915 3,669	3,552	3,449	3,400	3,365	3,245	3,180	3,122	3,128

1 The periods Q4 2005 to Q3 2006 have been restated in accordance with new option in IAS 19 applied in 2006.

Quarterly overview - Divisions

Amounts in SEK M	2007			2006			2005
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Order intake
Dehumidification Division	556	444	355	443	465	430	355	412	389	344
MCS Division	634	633	636	601	654	650	769	665	501	509
HumiCool Division	518	465	333	340	462	450	330	366	419	345
Eliminations	-20	-15	-13	-22	-8	-15	-14	-21	-15	-14
Order intake	1,688	1,527	1,311	1,362	1,573	1,515	1,440	1,422	1,294	1,184
Net sales
Dehumidification Division	527	371	432	423	419	360	431	404	354	325
MCS Division	605	614	686	638	635	660	775	562	504	494
HumiCool Division	414	429	361	367	411	376	347	374	352	269
Eliminations	-22	-10	-17	-20	-9	-10	-10	-23	-18	-9
Net sales	1,524	1,404	1,462	1,408	1,456	1,386	1,543	1,317	1,192	1,079
Operating earnings
Dehumidification Division	69	38	65	51	49	29	58	45	32	24
operating margin	13.1%	10.2%	15.0%	11.9%	11.8%	8.1%	13.5%	11.2%	9.1%	7.3%
MCS Division	10	38	45	39	29	46	74	32	14	31
operating margin	1.7%	6.2%	6.5%	6.1%	4.6%	7.0%	9.6%	5.8%	2.9%	6.4%
HumiCool Division	55	59	44	56	62	51	30	46	41	18
operating margin	13.3%	13.8%	12.2%	15.2%	15.2%	13.6%	8.7%	12.4%	11.8%	6.5%
Group overhead, eliminations etc.	-15	-8	-11	-6	-11	-8	-7	-11	-13	-9
Earnings before interest and tax	119	127	143	140	129	118	155	112	74	64
EBIT margin	7.8%	9.0%	9.8%	9.9%	8.8%	8.5%	10.1%	8.5%	6.2%	5.9%
Operating capital
Dehumidification Division	488	384	383	394	392	395	422	408	395	384
MCS Division	790	805	811	779	779	824	862	715	666	658
HumiCool Division	492	452	391	392	399	436	440	514	527	442
Central, eliminations	49	30	34	12	16	13	15	16	18	12
Operating capital	1,819	1,671	1,619	1,577	1,586	1,668	1,739	1,653	1,606	1,496
Permanent employees
Dehumidification Division	1,126	913	900	890	877	867	853	848	831	826
MCS Division	1,916	1,906	1,845	1,842	1,830	1,784	1,706	1,650	1,625	1,641
HumiCool Division	855	832	789	698	672	695	668	663	647	642
Central	18	18	18	19	21	19	18	19	19	19
Number of permanent employees	3,915	3,669	3,552	3,449	3,400	3,365	3,245	3,180	3,122	3,128

Amounts in SEK M	2007	2006	2007	2006	2006/2007	2006
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jul-Jun	Jan-Dec
MUNTERS AB	3 months	3 months	6 months	6 months	12 months	12 months
Income statement
Net sales	12	7	25	16	46	37
Cost of goods sold	-	-	-	-	-	-
Gross earnings	12	7	25	16	46	37
Other operating income	0	0	1	1	3	3
Selling expenses	0	0	0	0	0	0
Administrative expenses	-21	-15	-40	-30	-74	-64
Research and development costs	-	-	-	-	-	-
Other operating expenses	0	0	0	0	-1	-1
EBIT - Earnings before interest and tax	-9	-8	-14	-13	-26	-25
Financial income and expenses	125	116	158	128	984	954
Earnings after financial income	116	108	144	115	958	929
Income taxes	4	3	-3	3	2	8
Net earnings	120	111	141	118	960	937
	2007	2007	2006	2006
	30 Jun	31 Mar	31 Dec	30 Jun
Balance sheet
Assets
Fixed assets
Tangible assets
Equipment, tools, fixtures and fittings	19	15	15	9
	19	15	15	9
Intangible assets
Patent, licenses and similar rights	6	4	3	2
	6	4	3	2
Financial assets
Participation in subsidiaries	659	659	659	609
Receivables from subsidiaries	1,284	890	891	363
Deferred tax assets	-	-	-	5
	1,943	1,549	1,550	977
	1,968	1,568	1,568	988
Current assets
Receivables from subsidiaries	78	83	92	39
Other receivables	23	15	14	16
Liquid funds	80	5	22	20
	181	103	128	75
Total assets	2,149	1,671	1,696	1,063
Equity and liabilities
Equity	761	1,302	1,269	413
Long-term liabilities
Provisions	36	36	35	35
	36	36	35	35
Short-term liabilities
Interest-bearing liabilities	1,230	215	268	275
Liabilities to subsidiaries	44	44	109	261
Accounts payable	2	5	3	2
Other liabilities	76	69	12	77
	1,352	333	392	615
Total equity and liabilities	2,149	1,671	1,696	1,063

Notes

Note 1. Accounting principles

This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, which complies with the requirements stipulated in the Swedish Financial Accounting Standards Council's recommendation RR 31, Interim reporting for groups. The accounting principles applied in this interim report are those described in Note 2 of the Annual Report for 2006. Changes based on the application of the EU Transparency Directive were made in this interim report. The changes mainly involved increased disclosures regarding risks and uncertainty factors, as well as information about the Parent Company.

Note 2. Changes in equity

	2007	2007	2006	2006
	30 Jun	31 Mar	31 Dec	30 Jun
Equity at the beginning of the year	1,506	1,506	1,437	1,437
Total recognized income and expenses for the period	211	124	201	65
Change in minority interest	-2	-2	-2	-2
Sales of treasury shares	11	12	3	-
Payment received for issued stock options	-	-	2	2
Dividend	-166	-	-135	-135
Redemption of shares	-494	-	-	-
Equity at the end of the period	1,066	1,640	1,506	1,367

A dividend totaling SEK 166 M, corresponding to SEK 6.75 per share (before the share split) was implemented during the second quarter of 2007. The redemption of shares was implemented in the second quarter and involved the transfer of SEK 494 M to shareholders. The Board's proposal for the dividend and redemption of shares that was approved by the Annual General Meeting on April 24, 2007, can be read in its entirety on Munter's website.

Note 3. Acquisition of operations

Des Champs Technologies

On April 4, the American company Des Champs Technologies was acquired. Munters acquired 100 percent of the shares in Entrodyne Corporations, which is the holding company of Des Champs. The company is a technological leader in solutions for energy-efficient air treatment and manufactures mainly customer-adapted ventilation and air-conditioning systems for commercial buildings. The company has been consolidated as of April 2007. The acquired operations contributed SEK 68 M in revenue for the period from April 1, 2007 to June 30, 2007. If the acquisition had taken place on January 1, 2007, the company would have contributed SEK 119 M in revenue for the Group during the six-month period.

Information on acquired net assets and goodwill is as follows:

Purchase consideration

- purchase consideration paid in cash - expenses directly attributable to the acquisi	254
tion	4
Total acquisition value	258
Fair value of the acquired net assets	-45
Goodwill	213

Goodwill is attributable to anticipated future synergies in product integration, technology and distribution. Apart from the synergies, the company's expertise in heat-exchange technology and its future earnings potential are also components of the goodwill item.

The acquired company's net assets at the time of acquisition:	Reported values	Fair value, adjustment	Fair values
Tangible fixed assets	13	0	13
Intangible assets - brand	0	28	28
Non-interest-bearing receivables	85	0	85
Cash and cash equivalents	5	0	5
Interest-bearing liabilities	0	0	0
Interest-free liabilities (incl. deferred tax liability)	-75	-11	-86
Net identifiable assets and liabilities	28	17	45
Purchase consideration paid in cash and expenses directly attributable to the acquisition			258
Cash and cash equivalents in the acquired company			-5
Change in the Group's cash and cash equivalents at the time of the acquisition			253

The distribution of the acquisition value has not been definitively established.

Turbovent

On July 12, the German Competition Authority approved the acquisition of the companies Turbovent Agro A/S and Turbovent Environment A/S in Denmark. The companies will be consolidated as of July 1, 2007. Turbovent primarily manufactures ventilation equipment for the breeding of birds, pigs and cattle in Scandinavia, Germany and Eastern Europe. Turbovent is also at the leading edge in terms of air cleaning and odor removal solutions for the farming industry.

Information on acquired net assets and goodwill is as follows:

Purchase consideration

- purchase consideration paid in cash	81
Total acquisition value	81
Fair value of acquired net assets	-13
Goodwill and other surplus values	68

Goodwill and other surplus values are attributable to anticipated future synergies within product integration and technology.

The acquired companies' preliminary net assets at the time of acquisition:	Reported values
Tangible fixed assets	4
Noninterest-bearing receivables	31
Cash and cash equivalents	-2
Interest-bearing liabilities	-8
Interest-free liabilities	-12
Net identifiable assets and liabilities	13

Purchase consideration paid in cash and expenses directly attributable to the acquisition 81 Cash and cash equivalents in the acquired companies 2 Change in the Group's cash and cash equivalents at the time of the acquisition 83

The distribution of the acquisition value has not commenced.

Note 4. Interest-bearing liabilities in Munters AB

In the second quarter, Munters AB signed an agreement for a revolving credit facility agreement (multicurrency) with a syndicate of five banks. The credit amounts to SEK 2,000 M. In the second quarter, the credit was utilized for an acquisition of operations and for the redemption of treasury shares.

This document is a translation of the Swedish version. In the event of any discrepancies between this translation and the Swedish version, the Swedish version shall prevail.