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Munters Group — Interim / Quarterly Report 2009
Apr 23, 2009
2945_10-q_2009-04-23_b9bc70be-2ba7-47d4-8da4-123623ad0ed2.pdf
Interim / Quarterly Report
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Interim report January-March 2009
23 April 2009
First quarter
- □ Order intake amounted to SEK 1,724 M (1,586), - a decline 10% adjusted1
- □ Net sales amounted to SEK 1,703 M (1,545), - a decline 9% adjusted1
- □ EBIT before nonrecurring costs totaled SEK 39 M (129), corresponding to EBIT margin of 2.3% (8.3)
- □ Earnings deterioration was related primarily to a significant volume drop in HumiCool, cyclical downturn in the higher margin segments in Dehumidification and MCS, volume related underabsorption in factories as well as a strong earnings deterioration in MCS markets where a market exit is in progress
- □ Nonrecurring costs totaled SEK 33 M
- □ Net earnings after tax was a loss of SEK 22 M (profit: 58)
- □ Earnings per share amounted to a loss of SEK 0.29 (profit: 0.78)
| 2009 | 2008 | Change | Adjusted change1 |
|
|---|---|---|---|---|
| Order intake, SEK M | 1,724 | 1,586 | 9% | -10% |
| Net sales, SEK M | 1,703 | 1,545 | 10% | -9% |
| EBIT before nonrecurring costs, SEK M |
39 | 129 | -70% | |
| EBIT, SEK M | 6 | 108 | -94% | |
| EBIT margin, percent | 0.4 | 7.0 | -94% | |
| Net earnings, SEK M | -22 | 58 | -138% | |
| Earnings per share, SEK | -0.29 | 0.78 | -137% | |
1 Pro forma, adjusted for currency fluctuations, acquisitions and divestments.
Munters is a global leader in energy-efficient air-treatment solutions and restoration services based on expertise in humidity and climate control technologies. Customers are served in a wide range of segments, the most important being the insurance, food, pharma and electronics industries.
Manufacturing and sales are carried out through the Group's own companies in more than 30 countries. The Group has about 4 100 employees and net sales of about SEK 6.5 billion. The Munters share is listed on the OMX Nordic Exchange Stockholm, Mid Cap. For more information, see www.munters.com.
First quarter
Order intake
During the first quarter, order intake rose to SEK 1,724 M (1,586). Order intake, pro forma, adjusted for currency effects, acquisitions and divestments declined 10%.
Within the Dehumidification Division, demand declined in Europe. The commercial comfort segment in the Americas region reported strong growth. Order intake in HumiCool declined sharply, primarily within AgHort, HVAC and Mist Elimination.
The order backlog rose by 26% compared with the year-earlier period and totaled SEK 1,418 M (1,125) at the end of the quarter. Adjusted1 , a decline of 2%.
Net sales
Consolidated net sales increased to SEK 1,703 M (1,545). Adjusted1 , this was a decline of 9%. The weaker SEK compared with the year-earlier period had a positive impact of approximately 16% on net sales in Swedish currency.
Pro forma, adjusted for currency effects, acquisitions and divestments.
Earnings
EBIT amounted to SEK 6 M (108), corresponding to an operating margin of 0.4% (7.0).
A volume decrease of 30% in HumiCool, which drove low capacity utilization of factories, contributed to a sharp deterioration in profitability
Profitability was further effected by a cyclical downturn in the industrial segments of Dehumidification. MCS was negatively impacted by continued price pressure and increased competition along with a higher proportion of cash settlements in some European markets
The impact on earnings of the MCS markets where a market exit is in progress was SEK -12 M compared to the same period last year
Nonrecurring costs of SEK 33 M were charged during the quarter for the purpose of reducing costs and adapting production capacity. The previously reported discontinuation of MCS's presence in a specific market continues and will be completed during the second quarter.
Consolidated earnings after financial items amounted to a loss of SEK 16 M (profit: 91) for the first quarter. Net loss for the quarter totaled SEK 22 M (profit: 58). Earnings per share amounted to a loss of SEK 0.29 (profit: 0.78).
Year 2004 and later in accordance with IFRS.
Cash flow
Operating cash flow was a negative SEK 13 M (neg: 43). Cash flow from operating activities was strong in relation to the weak profitability due to the sharp reduction in accounts receivable.
Second-quarter prospects
Reduced demand continues to affect several factories. Restructuring measures have been initiated for the slowdown. Any further demand deterioration will trigger initiation of further actions
Investments
The Group's investments in tangible fixed assets during the period amounted to SEK 38 M (43), of which SEK 20 M (17) pertained to investments in MCS equipment. Depreciation and impairment amounted to SEK 46 M (43).
Financial position
The equity ratio increased by slightly more than 29% at the end of the period (28 at the start of the year). Interest-bearing assets totaled SEK 352 M (490 at the start of the year) and interestbearing provisions and liabilities amounted to SEK 1,775 M (1,880 at the start of the year). Net debt during the quarter rose by SEK 33 M to SEK 1,423 M as a result of exchange-rate fluctuations. The Group has unutilized loan facilities of SEK 653 M.
Munters' bank loans consist of syndicated credit facilities and individual bank loans granted to subsidiaries. The syndicated credit facilities amounted to SEK 2,000 M and extend to 2012.
Personnel
At the end of the period, the number of permanent employees was 4,066, a decrease of 66 since year-end as a result of previously announced personnel reductions.
Since last year HumiCool has reduced total staffing by 250 people or more than 20%. This includes temporary staffing which is used in many businesses to provide maximum flexibility. The reduction package of SEK 33 M which was an expense in Q1, when fully implemented, will result in a personnel reduction of approximately 190 people and yield annual savings of SEK 70 M.
1 Pro forma, adjusted for currency effects, acquisitions and divestments.
Divisional performance
Dehumidification Division
The Dehumidification Division is a function-based organization divided into three market areas: Americas, Europe and Asia & Pacific.
| First quarter | ||
|---|---|---|
| SEK M | 2009 | 2008 |
| Order intake | 596 | 487 |
| Change | 23% | |
| Adjusted change1 | -7% | |
| Net Sales | 588 | 433 |
| Change | 36% | |
| Adjusted change1 | 2% | |
| EBITA ex. one-time costs | 26 | 37 |
| Adjusted Margin | 4.4% | 8.5% |
| EBITA | 14 | 33 |
| EBITA Margin | 2.4% | 7.6% |
- □ Cyclically driven decline in higher margin industrial segments, while the less profitable comfort segments developed positively in the U.S.
- □ Impaired orders and invoicing in Europe
- □ Lower capacity utilization in Europe
- □ Restructuring costs of 12 MSEK was taken in the quarter
First quarter
The higher margin industrial segments saw a decline of about 15%, while the lower margin comfort segment sales increased approximately 60% including the recently acquired Toussaint Nyssenne. Toussaint Nyssennes operating margin remains low. The integration of Munters core technologies is ongoing in order to improve gross margins and increase market share. Orders and sales in region Europe fell by about 10%, which yielded lower capacity utilization. The Division's gross margin deteriorated markedly as a result of the change in sales mix and capacity utilization. A certain increase in warranty costs was noticed during the quarter. Overhead expenses were lower than the preceding year, as a result of ongoing cost review.
Restructuring costs of SEK 12 M were taken during the quarter to adapt to decreased demand. Restructuring activities primarily effected region Europe
1 Pro forma, adjusted for currency effects, acquisitions and divestments.
Second-quarter prospects
Net sales are expected to remain stable, with continued mixrelated gross margin deterioration. Order intake is expected to decline further. A reduction of costs will be made during the quarter as a result of ongoing restructuring activities.
HumiCool Division
The HumiCool Division is divided into three business areas: AgHort, Mist Elimination and HVAC (incl PreCooler).
| First quarter | ||||
|---|---|---|---|---|
| SEK M | 2009 | 2008 | ||
| Order intake | 413 | 436 | ||
| Change | -5% | |||
| Adjusted change1 | -22% | |||
| Net Sales | 389 | 451 | ||
| Change | -14% | |||
| Adjusted change1 | -29% | |||
| EBITA ex. one-time costs | 5 | 62 | ||
| Adjusted Margin | 1,3% | 13,7% | ||
| EBITA | -11 | 51 | ||
| EBITA Margin | -2,8% | 11,4% |
- □ Significant decline within the AgHort and Mist Elimination business areas
- □ Number of employees in the division reduced by 250 corresponding to slightly more than 20%
- □ Margins depressed as a result of surplus capacity in many plants
- □ Restructuring costs of SEK 16 M charged during the quarter
First quarter
Demand and sales declined sharply during the quarter in AgHort and Mist Elimination. The decline in AgHort was primarily due to customers' shortage of funds for financing, which is deemed to be due to the ongoing economic crisis.
Sales within Mist Elimination dropped by more than 50%. Mist Elimination's opening order backlog for the quarter experienced very long delivery times and, as in the fourth quarter, was negatively impacted by the new legislation pertaining to emission rights trading in the US.
Gross margin and with that the profitability within the HumiCool Division remained under pressure mainly due to strong volume reductions and further measures were implemented to reduce costs and staff. Since the year-earlier quarter, staffing in the division has reduced by 250 corresponding to slightly more than 20%. SEK 6 M was reserved for a number of customer losses within AgHort in the US.
During the quarter, restructuring costs of SEK 16 M were charged to continue the process of adapting costs to the prevailing demand.
Second-quarter prospects
The situation is difficult to assess. There are currently no solid indications of either a decline or a turnaround. Additional cost savings will be made to meet the trend.
Moisture Control Services (MCS) Division
The MCS Division has a country-based organization divided into three market areas: Northern Europe, Central Europe, and US & Asia.
| First quarter | ||||
|---|---|---|---|---|
| SEK M | 2009 | 2008 | ||
| Order intake | 722 | 672 | ||
| Change | 8% | |||
| Adjusted change1 | -3% | |||
| Net Sales | 736 | 669 | ||
| Change | 10% | |||
| Adjusted change1 | -1% | |||
| EBITA ex. one-time costs | 17 | 41 | ||
| Adjusted Margin | 2.3% | 6.1% | ||
| EBITA | 12 | 36 | ||
| EBITA Margin | 1.6% | 5.3% |
- □ Stable demand in several markets
- □ Gross margin declined due to mix shift and continued price pressure
- □ Gross margin deterioration continued in a number of countries, resulting in a change in Munters presence in several of these markets
- □ Strong cash flow during the period
- □ Two major framework agreements signed during the quarter
- □ Restructuring costs of SEK 5 M charged during the quarter
First quarter
The deterioration in operating results due to continued price pressure, mix shift and impaired performance of the market is ongoing. Price pressure continues and is worsening due to increased competitive pressure from entrepreneurs with excess capacity and increasing share of cash settlements. In the wake of this mix shift and a lower level of activity in the U.S. construction sector the volume of the highly profitable rental business is declining. In the market where MCS are exiting the business, earnings were affected with minus 12 MSEK compared to the same period last year.
The new business model, based on Field.Link (Mobile IT), centralized administration and scheduled visits yields
significantly streamlined activities. This work is ongoing and thus far has resulted in the closure of 17 depots in Europe
Sales in the Australian unit were negatively impacted by the ongoing adaptation to a higher margin segment. Two large framework agreements were signed with an insurance company in Australia during the quarter.
Cash flow for the quarter was strong, primarily due to the reduction in outstanding accounts receivables.
During the quarter, restructuring costs of SEK 5 M were charged with the aim of improving capacity utilization and increasing profitability.
Second-quarter prospects
Seasonally, the second quarter is usually the weakest within MCS. This is also expected to apply in 2009. The previously announced discontinuation of MSC's presence in a specific market continues and will be completed during the second quarter.
1 Pro forma, adjusted for currency effects, acquisitions and divestments.
SIGNIFICANT RISKS AND UNCERTAINTIES
Munters' exposure to risk can be divided primarily into two categories: operational risks and financial risks. Operational risks are those due to weather, dependence on key personnel and key customers, and geographically dispersed operations involving small operational units. Financial risks consist mainly of currency, interest and financing risks.
Demand for the company's products is affected by general economic trends. A weakening in the trend can result in lower sales, which will also reduce capacity utilization in manufacturing in the short term. The continuing trend in the global economy is an uncertainty factor for the earnings trend for 2009. Munters' acquisition frequency may result in integration-related risks. In addition, it is estimated that the financial risks, primarily interest-rate risks, currency risks and refinancing risks, have increased somewhat in the current and past year. A more detailed description of the Group's and Parent Company's other risk exposure and risk management activities is available in the "Risk management" section on pages 32-33 and note 3 of the Munters Annual Report for 2008, which is available at www.munters.com.
FORWARD-LOOKING STATEMENTS
Some statements in this report are forward-looking, and the actual outcomes may be materially different. In addition to the factors explicitly discussed, other factors could have a material impact on actual outcomes, such as general business conditions, fluctuations in exchange rates and interest rates, political risks, the impact of competing products and their pricing, product development, commercial and technological difficulties, interruptions in supply and major customer-related bad debts.
TRANSACTIONS WITH RELATED PARTIES
There are no significant contractual relationships or transactions between Munters and its related parties, apart from the remuneration of senior executives.
PARENT COMPANY
The Parent Company's earnings after financial items during the period amounted to a loss of SEK 2 M (profit: 36). There were no external net sales (in common with the year-earlier period). Cash and cash equivalents at the close of the period amounted to SEK 88 M (64) and net debt to SEK 1,492 M (1,111). Capital expenditure totaled SEK 1 M (2). The number of employees at the end of the period was 33 (28).
FUTURE INFORMATION DATES
July 22 Interim report, January – June October 28 Interim report, January – September February 9, 2010 Year-end report 2009 April 22, 2010 Interim report, January – March 2010
PRESS AND ANALYST CONFERENCE
Munters will hold a press conference for the media, analysts and investors on Thursday, April 23, at 08:30 a.m. at Operakällaren, Karl XII Square, Stockholm.
The presentation may also be monitored by telephone: +46-8- 5352 6458, code 5476669.
AUDITOR'S REVIEW REPORT
This interim report has not been reviewed by the company's auditors.
Kista, April 23, 2009
Lars Engström President and Chief Executive Officer
Munters discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on April 23, 2009 at 7:30 am (CET).
For further information, contact:
Lars Engström, Chief Executive Officer Tel: +46-8-626 63 03, [email protected]
Martin Lindqvist, Chief Financial Officer Tel: +46-8-626 63 06, [email protected]
Munters AB (publ)
Corp. Reg. No. 556041-0606 Box 1188, SE-164 26 Kista Sweden Tel: +46-8-626 63 00, Tfx +46-8-754 68 96 [email protected] This interim report, along with other information, is available on www.munters.com
| Amounts in SEK M | 2009 | 2008 | 2008/2009 | 2008 |
|---|---|---|---|---|
| Jan-Mar | Jan-Mar | Apr-Mar | Jan-Dec | |
| 3 months | 3 months | 12 months | 12 months | |
| Order intake | 1,724 | 1,586 | 6,653 | 6,515 |
| Statement of comprehensive income | ||||
| Net sales | 1,703 | 1,545 | 6,728 | 6,570 |
| Cost of goods sold | -1,317 | -1,131 | -5,040 | -4,854 |
| Gross earnings | 386 | 414 | 1,688 | 1,716 |
| Gross margin | 22.7% | 26.8% | 25.1% | 26.1% |
| Other operating income | 5 | 7 | 9 | 11 |
| Selling expenses | -205 | -167 | -802 | -764 |
| Administrative expenses | -156 | -123 | -546 | -513 |
| Research and development costs | -24 | -19 | -90 | -85 |
| Other operating expenses | 0 | -4 | 1 | -3 |
| EBIT - Earnings before interest and tax | 6 | 108 | 260 | 362 |
| EBIT margin | 0.4% | 7.0% | 3.9% | 5.5% |
| Financial income and expenses | -22 | -17 | -82 | -77 |
| Earnings after financial items | -16 | 91 | 178 | 285 |
| Taxes | -6 | -33 | -93 | -120 |
| Net earnings | -22 | 58 | 85 | 165 |
| Other comprehensive income | ||||
| Actuarial gains and losses on defined benefit pension plans | 0 | -2 | -42 | -44 |
| Cash flow hedges | 2 | -3 | 4 | -1 |
| Exchange differences on translating foreign operations | 53 | -59 | 249 | 137 |
| Income tax relating to components of other comprehensive income | -1 | 2 | 10 | 13 |
| Other comprehensive income for the period, net of tax | 54 | -62 | 221 | 105 |
| Total comprehensive income for the period | 32 | -4 | 306 | 270 |
| Net earnings | ||||
| Attributable to equity holders of the parent | -22 | 58 | 83 | 163 |
| Attributable to minority interest | 0 | 0 | 2 | 2 |
| -22 | 58 | 85 | 165 | |
| Total comprehensive income | ||||
| Attributable to equity holders of the parent | 32 | -4 | 304 | 268 |
| Attributable to minority interest | 0 | 0 | 2 | 2 |
| 32 | -4 | 306 | 270 | |
| Earnings per share | ||||
| Earnings per share, SEK | -0.29 | 0.78 | 1.14 | 2.21 |
| Earnings per share - after dilution, SEK | -0.29 | 0.78 | 1.14 | 2.21 |
| Amounts in SEK M | 2009 | 2008 | 2008/2009 | 2008 |
|---|---|---|---|---|
| Jan-Mar | Jan-Mar | Apr-Mar | Jan-Dec | |
| Segment information | 3 months | 3 months | 12 months | 12 months |
| Order intake by division | ||||
| Dehumidification Division | 596 | 487 | 2,242 | 2,133 |
| MCS Division | 722 | 672 | 2,820 | 2,770 |
| HumiCool Division | 413 | 436 | 1,621 | 1,644 |
| Eliminations | -7 | -9 | -30 | -32 |
| Order intake | 1,724 | 1,586 | 6,653 | 6,515 |
| Net sales by division | ||||
| Dehumidification Division | 588 | 433 | 2,206 | 2,051 |
| MCS Division | 736 | 669 | 2,876 | 2,809 |
| HumiCool Division | 389 | 451 | 1,681 | 1,743 |
| Eliminations | -10 | -8 | -35 | -33 |
| Net sales | 1,703 | 1,545 | 6,728 | 6,570 |
| Operating earnings by division | ||||
| Dehumidification Division | 14 | 33 | 182 | 201 |
| operating margin | 2.4% | 7.6% | 8.3% | 9.8% |
| MCS Division | 12 | 36 | 24 | 48 |
| operating margin | 1.6% | 5.3% | 0.8% | 1.7% |
| HumiCool Division | -11 | 51 | 93 | 155 |
| operating margin | -2.8% | 11.4% | 5.5% | 8.9% |
| Central, eliminations etc. | -6 | -10 | -29 | -33 |
| EBIT before amortizations, interest and tax | 9 | 110 | 270 | 371 |
| Amortizations on acquisition related intangible assets | -3 | -2 | -10 | -9 |
| EBIT - Earnings before interest and tax | 6 | 108 | 260 | 362 |
| Dehumidification | HumiCool | MCS | Eliminations | Total | |
|---|---|---|---|---|---|
| Earnings by segment | 2009 | 2009 | 2009 | 2009 | 2009 |
| Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | |
| 3 months | 3 months | 3 months | 3 months | 3 months | |
| External net sales | 579 | 388 | 736 | 1,703 | |
| Internal net sales | 9 | 1 | 0 | -10 | 0 |
| Net sales | 588 | 389 | 736 | -10 | 1,703 |
| Operating earnings | 14 | -11 | 12 | 2 | 17 |
| Amortization of surplus values | -2 | -1 | -3 | ||
| Undistributed costs | -8 | ||||
| EBIT - Earnings before interest and tax | 12 | -12 | 12 | 2 | 6 |
| Financial items, net | -22 | ||||
| Taxes | -6 | ||||
| Net earnings | -22 |
| Dehumidification | HumiCool | MCS | Eliminations | Total | |
|---|---|---|---|---|---|
| 2008 | 2008 | 2008 | 2008 | 2008 | |
| Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | Jan-Mar | |
| 3 months | 3 months | 3 months | 3 months | 3 months | |
| External net sales | 428 | 449 | 668 | 1,545 | |
| Internal net sales | 5 | 2 | 1 | -8 | 0 |
| Net sales | 433 | 451 | 669 | -8 | 1,545 |
| Operating earnings | 33 | 51 | 36 | 3 | 123 |
| Amortization of surplus values | -1 | -1 | -2 | ||
| Undistributed costs | -13 | ||||
| EBIT - Earnings before interest and tax | 32 | 50 | 36 | 3 | 108 |
| Financial items, net | -17 | ||||
| Taxes | -33 | ||||
| Net earnings | 58 |
| Amounts in SEK M | 2009 | 2008 | 2008 |
|---|---|---|---|
| 31 Mar | 31 Dec | 31 Mar | |
| Statement of financial position | |||
| Assets | |||
| Fixed assets | |||
| Tangible assets | |||
| Buildings and land | 218 | 209 | 164 |
| Plant and machinery | 151 | 149 | 134 |
| Equipment, tools, fixtures and fittings | 299 | 294 | 250 |
| Construction in progress | 20 | 12 | 29 |
| 688 | 664 | 577 | |
| Intangible assets | |||
| Patent, licenses, trademarks and similar rights | 143 | 142 | 103 |
| Goodwill | 1,006 | 978 | 773 |
| 1,149 | 1,120 | 876 | |
| Other fixed assets | |||
| Participation in associated companies | 2 | 2 | 2 |
| Other long-term receivables | 26 | 21 | 20 |
| Deferred tax assets | 154 | 126 | 85 |
| 182 | 149 | 107 | |
| 2,019 | 1,933 | 1,560 | |
| Current assets | |||
| Inventory etc. | 617 | 589 | 577 |
| Accounts receivable | 1,248 | 1,354 | 1,197 |
| Other receivables | 269 | 248 | 179 |
| Cash and cash equivalents | 352 | 490 | 242 |
| 2,486 | 2,681 | 2,195 | |
| Total assets | 4,505 | 4,614 | 3,755 |
| Equity and liabilities | |||
| Equity | 1,317 | 1,285 | 1,198 |
| Long-term liabilities | |||
| Interest-bearing liabilities | 1,580 | 1,653 | 1,155 |
| Provisions | 222 | 210 | 168 |
| Deferred tax liabilities | 95 | 87 | 70 |
| Other liabilities | 11 | 11 | 1 |
| 1,908 | 1,961 | 1,394 | |
| Current liabilities | |||
| Interest-bearing liabilities | 6 | 41 | 59 |
| Advances from customers | 85 | 107 | 86 |
| Accounts payable | 507 | 537 | 414 |
| Provisions | 78 | 68 | 64 |
| Other liabilities | 604 | 615 | 540 |
| 1,280 | 1,368 | 1,163 | |
| Total equity and liabilities | 4,505 | 4,614 | 3,755 |
| Total equity | ||||||
|---|---|---|---|---|---|---|
| Statement of changes in equity | Translation of | attributable to | ||||
| Share | foreign | Retained | equity holders of | Minority | ||
| capital | operations | earnings | the parent | interest Total equity | ||
| Balance at 1 January 2008 | 131 | -38 | 1,102 | 1,195 | 7 | 1,202 |
| Changes in equity for 2008 | ||||||
| Dividend | -185 | -185 | -2 | -187 | ||
| Total comprehensive income for the year | 137 | 131 | 268 | 2 | 270 | |
| Balance at 31 December 2008 | 131 | 99 | 1,048 | 1,278 | 7 | 1,285 |
| Changes in equity for 2009 | ||||||
| Total comprehensive income for the period | 53 | -21 | 32 | 0 | 32 | |
| Balance at 31 March 2009 | 131 | 152 | 1,027 | 1,310 | 7 | 1,317 |
Munters Interim report January-March 2009 9 (15)
| Amounts in SEK M | 2009 | 2008 | 2008/2009 | 2008 |
|---|---|---|---|---|
| Jan-Mar | Jan-Mar | Apr-Mar | Jan-Dec | |
| 3 months | 3 months | 12 months | 12 months | |
| Statement of cash flows | ||||
| Operating activities | ||||
| Earnings after financial items | -16 | 91 | 178 | 285 |
| Reversal of depreciation etc. | 46 | 43 | 170 | 167 |
| Other earnings not affecting cash flow | -4 | -4 | 16 | 16 |
| Taxes paid | -26 | -53 | -154 | -181 |
| Cash flow from operating activities | ||||
| before changes in working capital | 0 | 77 | 210 | 287 |
| Cash flow from changes in working capital | ||||
| Changes in inventory | -8 | -65 | 100 | 43 |
| Changes in accounts receivable | 150 | 52 | 225 | 127 |
| Changes in other receivables | -35 | -16 | -36 | -17 |
| Changes in accounts payable | -45 | -70 | -34 | -59 |
| Changes in other liabilities | -36 | 22 | -111 | -53 |
| Sum of changes in working capital | 26 | -77 | 144 | 41 |
| Cash flow from operating activities | 26 | 0 | 354 | 328 |
| Investing activities | ||||
| Acquisitions and divestments of businesses | -3 | 0 | -87 | -84 |
| Investments in intangible assets Investments in tangible assets |
-2 -38 |
-1 -43 |
-13 -140 |
-12 -145 |
| Sales of tangible assets | 0 | 1 | 4 | 5 |
| Change in other financial assets | 1 | - | 2 | 1 |
| Cash flow from investing activities | -42 | -43 | -234 | -235 |
| Financing activities | ||||
| Changes in loans | -130 | 16 | 130 | 276 |
| Dividend paid | - | - | -189 | -189 |
| Cash flow from financing activities | -130 | 16 | -59 | 87 |
| Cash flow for the period | -146 | -27 | 61 | 180 |
| Cash and cash equivalents at beginning of period | 490 | 276 | 242 | 276 |
| Exchange-differences in cash and cash equivalents | 8 | -7 | 49 | 34 |
| Cash and cash equivalents at end of period | 352 | 242 | 352 | 490 |
| Operating cash flow | -13 | -43 | 207 | 177 |
| Key figures | ||||
| More key figures are disclosed in the quarterly review | ||||
| Capital turnover rates, times (4 quarters) | - | - | 2.4 | 2.4 |
| Return on capital employed, % | 0.1 | 4.2 | 9.4 | 13.6 |
| Return on equity, % | -1.7 | 4.8 | 7.0 | 13.8 |
| Return on total capital, % (4 quarters) | - | - | 6.4 | 9.2 |
| Interest coverage ratio, times | 0.2 | 6.3 | 3.1 | 4.4 |
| Net debt structure | ||||
| Short-term interest-bearing liabilities | - | - | 6 | 41 |
| Long-term interest-bearing liabilities | - | - | 1,580 | 1,653 |
| Defined-benefit pension plans | - | - | 189 | 186 |
| Interest-bearing liabilities Net debt |
- - |
- - |
-352 1,423 |
-490 1,390 |
Quarterly overview - consolidated earnings, share data and cash flow
| Amounts in SEK M | 2009 | 2008 | 2007 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
| Order intake | 1,724 | 1,661 | 1,582 | 1,686 | 1,586 | 1,518 | 1,674 | 1,688 | 1,527 |
| Income statement | |||||||||
| Net sales | 1,703 | 1,881 | 1,597 | 1,548 | 1,545 | 1,737 | 1,597 | 1,524 | 1,404 |
| Operating expenses | -1,697 | -1,805 | -1,515 | -1,453 | -1,437 | -1,566 | -1,448 | -1,405 | -1,277 |
| EBIT | 6 | 76 | 82 | 95 | 108 | 171 | 149 | 119 | 127 |
| EBIT margin | 0.4% | 4.0% | 5.1% | 6.1% | 7.0% | 9.8% | 9.3% | 7.8% | 9.0% |
| Financial income and expense | -22 | -21 | -20 | -18 | -17 | -12 | -13 | -9 | -6 |
| Earnings after financial items | -16 | 55 | 62 | 77 | 91 | 159 | 136 | 110 | 121 |
| Taxes | -6 | -37 | -22 | -28 | -33 | -58 | -49 | -40 | -43 |
| Net earnings | -22 | 18 | 40 | 49 | 58 | 101 | 87 | 70 | 78 |
| Depreciations and amortizations | 46 | 47 | 39 | 38 | 43 | 41 | 40 | 38 | 37 |
| Share data1 | |||||||||
| Earnings per share, SEK | -0.29 | 0.24 | 0.53 | 0.66 | 0.78 | 1.34 | 1.16 | 0.95 | 1.04 |
| Earnings per share after dilution, SEK | -0.29 | 0.24 | 0.53 | 0.66 | 0.78 | 1.34 | 1.16 | 0.95 | 1.04 |
| Average number of shares outstanding, thousand | 73,933 73,933 73,933 73,933 73,933 73,898 73,887 73,863 73,791 | ||||||||
| No of shares outstanding at period-end, thousand | 73,933 73,933 73,933 73,933 73,933 73,933 73,933 73,933 73,933 | ||||||||
| Number of treasury shares, thousand | 1,067 | 1,067 | 1,067 | 1,067 | 1,067 | 1,067 | 1,067 | 1,067 | 1,067 |
| Equity per share, SEK | 17.72 | 17.28 | 15.99 | 14.48 | 16.11 | 16.16 | 14.51 | 14.36 | 22.13 |
| Equity per share after dilution, SEK | 17.72 | 17.28 | 15.99 | 14.48 | 16.11 | 16.16 | 14.51 | 14.36 | 22.13 |
| Stock price at period-end, SEK | 23.50 | 38.40 | 48.50 | 57.25 | 68.50 | 76.75 | 93.00 107.50 100.67 | ||
| Market cap at period-end, SEK M2 | 1,763 | 2,880 | 3,638 | 4,294 | 5,138 | 5,756 | 6,975 | 8,063 | 7,550 |
| Statement of cash flows | |||||||||
| From operating activities | 26 | 193 | 80 | 55 | 0 | 210 | 42 | 60 | 83 |
| From investing activities | -42 | -93 | -36 | -63 | -43 | -49 | -128 | -305 | -40 |
| From financing activities | -130 | 112 | -48 | 7 | 16 | -194 | 105 | 320 | -33 |
| Cash flow for the period | -146 | 212 | -4 | -1 | -27 | -33 | 19 | 75 | 10 |
| Operating cash flow | -13 | 158 | 49 | 13 | -43 | 161 | -25 | 8 | 45 |
1 Historical data for the share are adjusted for the share split, redemption and bonus issue performed in Q2 2007.
2 The market cap is calculated on total number of issued shares, including treasury shares.
Quarterly overview - Consolidated financial position and key figures
| Amount in SEK M | 2009 | 2008 | 2007 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
| Statement of financial position | |||||||||
| Assets | |||||||||
| Fixed assets | |||||||||
| Tangible assets | 688 | 664 | 619 | 592 | 577 | 600 | 581 | 575 | 550 |
| Intangible assets | 1,149 | 1,120 | 965 | 911 | 876 | 904 | 879 | 843 | 609 |
| Other fixed assets | 182 | 149 | 115 | 107 | 107 | 83 | 101 | 99 | 79 |
| 2,019 | 1,933 | 1,699 | 1,610 | 1,560 | 1,587 | 1,561 | 1,517 | 1,238 | |
| Current assets | |||||||||
| Inventory etc. | 617 | 589 | 668 | 622 | 577 | 536 | 614 | 581 | 498 |
| Accounts receivable | 1,248 | 1,354 | 1,174 | 1,182 | 1,197 | 1,292 | 1,172 | 1,096 | 1,077 |
| Other receivables | 269 | 248 | 231 | 192 | 179 | 171 | 182 | 162 | 181 |
| Cash and cash equivalents | 352 | 490 | 251 | 242 | 242 | 276 | 307 | 291 | 216 |
| 2,486 | 2,681 | 2,324 | 2,238 | 2,195 | 2,275 | 2,275 | 2,130 | 1,972 | |
| Total assets | 4,505 | 4,614 | 4,023 | 3,848 | 3,755 | 3,862 | 3,836 | 3,647 | 3,210 |
| Equity and liabilities | |||||||||
| Equity | 1,317 | 1,285 | 1,188 | 1,076 | 1,198 | 1,202 | 1,077 | 1,066 | 1,640 |
| Long-term liabilities | 328 | 308 | 245 | 240 | 239 | 215 | 234 | 222 | 215 |
| Interest-bearing liabilities | 1,586 | 1,694 | 1,418 | 1,392 | 1,214 | 1,200 | 1,401 | 1,282 | 268 |
| Accounts payable | 507 | 537 | 437 | 460 | 414 | 496 | 445 | 426 | 416 |
| Other current liabilities | 767 | 790 | 735 | 680 | 690 | 749 | 679 | 651 | 671 |
| Total equity and liabilities | 4,505 | 4,614 | 4,023 | 3,848 | 3,755 | 3,862 | 3,836 | 3,647 | 3,210 |
| Key figures | |||||||||
| Equity ratio, % | 29.2 | 27.8 | 29.5 | 28.0 | 31.8 | 31.1 | 28.1 | 29.2 | 51.1 |
| Net debt, SEK M | 1,423 | 1,390 | 1,311 | 1,292 | 1,119 | 1,068 | 1,245 | 1,138 | 209 |
| Net debt ratio, times | 1.08 | 1.08 | 1.10 | 1.20 | 0.93 | 0.89 | 1.16 | 1.07 | 0.13 |
| Interest coverage ratio, times | 0.2 | 3.1 | 3.6 | 5.5 | 6.3 | 8.9 | 8.9 | 11.1 | 22.2 |
| Investments in tangible assets, SEK M | 38 | 32 | 29 | 41 | 43 | 42 | 56 | 53 | 34 |
| Number of permanent employees at period-end | 4,066 | 4,132 | 4,044 | 4,083 | 4,099 | 4,043 | 3,982 | 3,915 | 3,669 |
Definitions of the financial key figures can be found on page 85 in the Annual Report 2008.
Financial overview Group - 5 years
| 2009 | 2008 | 2007 | 2006 | 2005 | |
|---|---|---|---|---|---|
| Q1 | Q1 | Q1 | Q1 | Q1 | |
| Sales and earnings | |||||
| Net sales, SEK M | 1,703 | 1,545 | 1,404 | 1,386 | 1,079 |
| EBIT, SEK M | 6 | 108 | 127 | 118 | 64 |
| EBIT margin, % | 0.4 | 7.0 | 9.0 | 8.5 | 5.9 |
| Net earnings, SEK M | -22 | 58 | 78 | 71 | 37 |
| Earnings per share, SEK | -0.29 | 0.78 | 1.04 | 0.96 | 0.50 |
| Business and financial ratios | |||||
| Return on equity, % | -1.7 | 4.8 | 4.9 | 4.9 | 3.1 |
| Return on capital employed, % | 0.1 | 4.2 | 6.1 | 6.0 | 3.8 |
Quarterly overview - Divisions
| Amounts in SEK M | 2009 | 2008 | 2007 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
| Order intake | |||||||||
| Dehumidification Division | 596 | 608 | 511 | 528 | 487 | 460 | 541 | 556 | 444 |
| MCS Division | 722 | 745 | 710 | 643 | 672 | 673 | 690 | 634 | 633 |
| HumiCool Division | 413 | 314 | 369 | 525 | 436 | 395 | 460 | 518 | 465 |
| Eliminations | -7 | -6 | -8 | -10 | -9 | -10 | -17 | -20 | -15 |
| Order intake | 1,724 | 1,661 | 1,582 | 1,686 | 1,586 | 1,518 | 1,674 | 1,688 | 1,527 |
| Net sales | |||||||||
| Dehumidification Division | 588 | 645 | 495 | 478 | 433 | 534 | 504 | 527 | 371 |
| MCS Division | 736 | 809 | 686 | 645 | 669 | 739 | 666 | 605 | 614 |
| HumiCool Division | 389 | 435 | 425 | 433 | 451 | 476 | 446 | 414 | 429 |
| Eliminations | -10 | -8 | -9 | -8 | -8 | -12 | -19 | -22 | -10 |
| Net sales | 1,703 | 1,881 | 1,597 | 1,548 | 1,545 | 1,737 | 1,597 | 1,524 | 1,404 |
| Operating earnings | |||||||||
| Dehumidification Division | 14 | 75 | 48 | 45 | 33 | 72 | 55 | 69 | 38 |
| operating margin | 2.4% | 11.7% | 9.6% | 9.5% | 7.6% | 13.5% | 11.0% | 13.1% | 10.2% |
| MCS Division | 12 | -9 | 7 | 14 | 36 | 39 | 42 | 10 | 38 |
| operating margin | 1.6% | -1.1% | 1.0% | 2.2% | 5.3% | 5.3% | 6.3% | 1.7% | 6.2% |
| HumiCool Division | -11 | 23 | 36 | 44 | 51 | 73 | 64 | 55 | 59 |
| operating margin | -2.8% | 5.5% | 8.5% | 10.2% | 11.4% | 15.3% | 14.3% | 13.3% | 13.8% |
| Group overheads, eliminations etc. | -9 | -13 | -9 | -8 | -12 | -13 | -12 | -15 | -8 |
| Earnings before interest and tax | 6 | 76 | 82 | 95 | 108 | 171 | 149 | 119 | 127 |
| EBIT margin | 0.4% | 4.0% | 5.1% | 6.1% | 7.0% | 9.8% | 9.3% | 7.8% | 9.0% |
| Operating capital | |||||||||
| Dehumidification Division - Assets | 883 | 855 | 703 | 675 | 649 | 672 | 654 | 665 | 562 |
| Dehumidification Division - Liabilities | -267 | -265 | -179 | -195 | -173 | -191 | -177 | -177 | -178 |
| MCS Division - Assets | 976 | 1,028 | 1,001 | 963 | 977 | 1,040 | 995 | 896 | 902 |
| MCS Division - Liabilities | -151 | -174 | -121 | -107 | -106 | -145 | -110 | -106 | -97 |
| HumiCool Division - Assets | 759 | 787 | 821 | 818 | 767 | 764 | 760 | 729 | 688 |
| HumiCool Division - Liabilities | -178 | -206 | -239 | -251 | -225 | -267 | -266 | -237 | -236 |
| Central, eliminations | 82 | 79 | 59 | 52 | 65 | 69 | 77 | 49 | 30 |
| Operating capital | 2,104 | 2,104 | 2,045 | 1,955 | 1,954 | 1,942 | 1,933 | 1,819 | 1,671 |
| Permanent employees | |||||||||
| Dehumidification Division | 1,293 | 1,301 | 1,173 | 1,196 | 1,184 | 1,180 | 1,151 | 1,126 | 913 |
| MCS Division | 1,959 | 1,944 | 1,942 | 1,952 | 1,938 | 1,918 | 1,903 | 1,916 | 1,906 |
| HumiCool Division | 795 | 866 | 908 | 914 | 959 | 924 | 911 | 855 | 832 |
| Central | 19 | 21 | 21 | 21 | 18 | 21 | 17 | 18 | 18 |
| Number of permanent employees | 4,066 | 4,132 | 4,044 | 4,083 | 4,099 | 4,043 | 3,982 | 3,915 | 3,669 |
Operating capital consists of accounts receivable (external and internal), inventory, accounts payable, advances from customers and fixed assets excluding goodwill.
| Amounts in SEK M | 2009 | 2008 | 2008/2009 | 2008 |
|---|---|---|---|---|
| Jan-Mar | Jan-Mar | Apr-Mar | Jan-Dec | |
| MUNTERS AB | 3 months | 3 months | 12 months | 12 months |
| Income statement | ||||
| Net sales | 13 | 12 | 52 | 51 |
| Cost of goods sold | - | - | - | - |
| Gross earnings | 13 | 12 | 52 | 51 |
| Other operating income | 0 | 1 | 1 | 2 |
| Selling expenses | 0 | 0 | 0 | 0 |
| Administrative expenses | -21 | -24 | -96 | -99 |
| Other operating expenses | 0 | 0 | 1 | 1 |
| EBIT - Earnings before interest and tax | -8 | -11 | -42 | -45 |
| Financial income and expenses | 6 | 47 | 229 | 270 |
| Earnings after financial items | -2 | 36 | 187 | 225 |
| Transfer to tax allocation reserve | - | - | -4 | -4 |
| Income taxes | 0 | 9 | 5 | 14 |
| Net earnings | -2 | 45 | 188 | 235 |
| 2009 | 2008 | 2008 | ||
| 31 Mar | 31 Dec | 31 Mar | ||
| Balance sheet | ||||
| Assets | ||||
| Fixed assets | ||||
| Tangible assets | ||||
| Equipment, tools, fixtures and fittings | 9 | 24 | 21 | |
| 9 | 24 | 21 | ||
| Intangible assets | ||||
| Patent, licenses and similar rights | 18 | 18 | 17 | |
| 18 | 18 | 17 | ||
| Financial assets | ||||
| Participations in subsidiaries | 800 | 791 | 690 | |
| Receivables from subsidiaries | 1,744 | 1,785 | 1,368 | |
| 2,544 | 2,576 | 2,058 | ||
| 2,571 | 2,618 | 2,096 | ||
| Current assets | ||||
| Receivables from subsidiaries | 31 | 36 | 93 | |
| Other receivables | 52 | 56 | 22 | |
| Cash and cash equivalents | 88 | 227 | 64 | |
| 171 | 319 | 179 | ||
| Total assets | 2,742 | 2,937 | 2,275 | |
| Equity and liabilities | ||||
| Equity | 1,004 | 1,006 | 957 | |
| Untaxed reserves | 19 | 19 | 15 | |
| Long-term liabilities | ||||
| Interest-bearing liabilities | 1,540 | 1,637 | 1,138 | |
| Provisions | 39 | 39 | 37 | |
| 1,579 | 1,676 | 1,175 | ||
| Current liabilities | ||||
| Liabilities to subsidiaries | 107 | 197 | 98 | |
| Accounts payable | 7 | 5 | 3 | |
| Other liabilities | 26 | 34 | 27 | |
| 140 | 236 | 128 | ||
| Total equity and liabilities | 2,742 | 2,937 | 2,275 |
Notes
Note 1: Accounting principles
The consolidated financial statements for the first quarter of 2009 have been prepared, as were the annual accounts for 2008, in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the Swedish Annual Accounts Act. The parent company has prepared its financial statements in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2.2, Accounting for legal entities.
This quarterly report has been prepared in accordance with IAS 34. In this document, the term "IFRS" includes the application of both IAS and IFRS, and the interpretations of these standards published by the IASB's Standards Interpretation Committee (SIC) and its International Financial Reporting Interpretations Committee (IFRIC).
The Group uses the same accounting principles as described in its 2008 Annual Report, with the following exceptions motivated by new or revised standards, interpretations and improvements adopted by the EU and that are to be applied as of January 1, 2009. This report deals only with the changes that have had an effect on the Group.
New or revised standards
IFRS 8: Operating Segments
This standard requires information concerning the Group's operating segments and replaces the requirement to define the Group's primary and secondary segments. Implementation of this standard has not had any effect on the Group's financial position. The implementation of IFRS 8 has not resulted in any segments other than those reported as primary under IAS 14 and that were reported in the 2008 Annual Report. Munters reports its three divisions Dehumidification, HumiCool and MCS as operating segments. Information about the segments is shown in the sections Segment information and Quarterly overview – Divisions, and in Note 2.
Amended IAS 1, Presentation of Financial Statements
The standard divides changes in shareholders' equity into changes due to transactions with owners and other changes. The presentation of changes in equity will only contain details relating to shareholder transactions. In addition, the standard introduces the concept of the "Statement of comprehensive income," which shows all revenue and costs, items previously reported under the statement of shareholders' equity and the statement of recognized income and expense, either as a separate presentation or as two integrated presentations. The Group has elected to present its statement of comprehensive income as a separate presentation.
Note 2: Operating segments
As of January 1, 2009, the Group has implemented IFRS 8 Operating Segments. This standard requires that information be reported based on the perspective of company management, which means it is presented in the way in which it is used in the company's internal reporting. Reportable segments are identified based on the internal reporting to the highest-ranking Chief Operating Decision Maker (CODM). Munters has identified its Group Management as its CODM. The Group is organized in divisions. Munters has identified the three divisions as reportable operating segments, which is the same as previously. The divisions are consolidated based on the same principles as is the Group as a whole. Transactions between the divisions are based on market terms. Central controlling and reporting concepts include: order intake, net sales, operating earnings and operating capital.
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.