Munters: Record Orders, a One-Quarter Slip, and a FoodTech Exit

Munters Group: Balancing Hypergrowth with Operational Friction

Munters' Q2 2026 earnings call was a study in contrasts. On one hand, the company logged an exceptional order intake — a 140% organic surge that lifted the book-to-bill ratio to a staggering 2.3x. On the other, it disclosed that supply chain bottlenecks had pushed its planned production ramp a quarter off schedule, forcing management to walk back near-term margin expectations even as it reaffirmed full‑year growth.

The tension between these two narratives — a demand supercycle versus an execution lag — dominated the call. CEO Klas Forsström was candid: “Now we are one quarter behind, we are not there.” — Klas Forsström, Chief Executive Officer (CEO) · 2026-07-17 That admission, tied to the company's own inflection point curve, set the tone for the entire discussion.

Record demand meets a constrained factory floor

The core challenge is the ramp‑up at the U.S. chiller facility. While the company has been meticulous in hiring and training, the supply chain has not kept pace. Fans, valves, and certain components are in short supply, forcing Munters to ship more from Europe at a time when tariffs are already biting. The CFO Katharina Fischer quantified the tariff drag at 3% of DCT margins, a direct result of importing finished goods from Italy while the U.S. bill of materials is still being localized.

Yet the order book tells a different story. Backlog is up 151% year‑on‑year, and the company is now filling orders for 2028. As Forsström put it, “The short answer, we are not expecting any delays in deliveries.” — Klas Forsström, Chief Executive Officer (CEO) · 2026-07-17 The mitigation plan — qualifying new suppliers, increasing stock levels, and shifting production across its wide product portfolio — is intended to keep customers satisfied. He reassured that customers are not worried, calling the delays “pretty much on par” with expectations.

The supply chain constraints are, in effect, a timing issue. A tight OWC (operating working capital) of 5.2% (well below the target range) actually reflects the deliberate build‑up of inventory to buffer against further disruptions. The company expects to work through the bottleneck by the end of H2, unlocking the full potential of its new factories.

The strategic pivot: sharper focus, bigger ambitions

Alongside the operational noise, Munters announced a potentially transformative step: exploring a divestment of FoodTech (rebranded Speria). This is a clear potential divestment move to sharpen the strategic focus on the two high‑growth businesses — Data Center Technology and AirTech. Forsström did not hide his enthusiasm:

We have been, and we are on a fantastic journey with Munters... The fascinating part is that seven years ago we were SEK 6 billion in turnover. I clearly see, even without FoodTech, that we in coming years will be SEK 20 billion and above.

FootTech, by contrast, is a “fantastic asset” that management believes deserves a new home to accelerate its own growth. The separation process is already underway, with Pia and her team refocusing after the announcement. While order intake was a bit shy in the quarter, the CEO expects to return to the 20‑30% growth trajectory soon.

From inflection to high‑teens: the margin bridge

The margin picture is a tale of two businesses. AirTech, benefiting from cost‑saving programs, is demonstrating steady improvement — a second consecutive quarter of SEK 2+ billion order intake has filled factories, but the CEO cautioned that the “new normal” is not this extraordinary pad volume. The path to the 13%+ AirTech margin requires a few more quarters of sustained order flow.

DCT, meanwhile, remains a margin puzzle. The planned product mix shift away from high‑margin SyCool to lower‑margin CRAHs is temporary, but the supply chain issue has delayed the inflection point by one quarter. Management maintains the high‑teens DCT margin ambition, but investors will focus on whether the 30% full‑year DCT sales growth target can be achieved given the Q2 shortfall. The company's own guidance implies a very strong Q4 — over SEK 3 billion in DCT sales — a feasibility that Forsström defends: “From a capacity standpoint, we have all capacity installed, we have all people installed, and we are working diligently with having all the supply in line.” — Klas Forsström, Chief Executive Officer (CEO) · 2026-07-17

This quarter captures Munters at a pivot. The record order intake confirms its strategic relevance in the AI‑driven data center buildout and the broader industrial cooling market. But the execution lag is a reminder that scaling capacity is as much about supply chain mastery as it is about demand. With a potential FoodTech divestment on the table, Munters is betting that focus will unlock the promised SEK 20 billion-plus revenue future. The market will await Q3 evidence that the inflection point is indeed behind.