Munters Rides Data Center Wave, But Profits Hit Temporary Turbulence

STOCKHOLM – January 29, 2026 – Munters Group AB today revealed a stark contrast in its 2025 performance, reporting a spectacular surge in demand driven by the booming data center industry while simultaneously grappling with weakened earnings and squeezed profit margins. The Stockholm-based climate solutions provider saw its fourth-quarter order intake skyrocket by an astounding 191%, yet net sales and profitability faltered, painting a complex picture of a company capitalizing on a massive market trend while navigating significant operational and economic headwinds.

In its year-end report, the company projected a return to form in the coming year, forecasting “historically high turnover for the full year 2026.” CEO Klas Forsström expressed confidence, stating, “With a strong order backlog and clear actions taken to improve profitability and resilience, we enter 2026 from a position of strength.” The market's reaction will hinge on whether investors believe the current profit challenges are truly temporary speed bumps on the road to explosive growth.

The Data Center Gold Rush

The driving force behind Munters' record-breaking order book is its Data Center Technologies (DCT) division. The segment, which provides critical cooling solutions, saw its own order intake increase by an incredible 416% in the fourth quarter. This demand is not an anomaly but a reflection of a seismic shift in the global digital economy.

The proliferation of artificial intelligence, cloud computing, and high-performance computing (HPC) has created an insatiable need for data centers, and these facilities generate immense heat. Advanced AI workloads, for instance, require cooling systems far more powerful and efficient than those used in traditional IT infrastructure. This has ignited a gold rush for specialized cooling solutions, a market projected to grow at a double-digit compound annual growth rate and potentially exceed $100 billion within the next decade.

Munters is positioning itself to capture a significant share of this expansion, securing several large orders for chillers and other cooling solutions for both colocation and hyperscale customers. The company’s acquisition of Geoclima has broadened its portfolio, which now spans both air and liquid cooling technologies—a critical advantage as the industry increasingly pivots toward liquid-based thermal management for high-density environments. However, Munters is not alone in this race. Competitors like Vertiv, Schneider Electric, and Johnson Controls are also making aggressive strategic moves, including acquisitions and partnerships with tech giants like NVIDIA, to solidify their positions in this lucrative and rapidly evolving market.

A Paradox of Profitability

Despite the unprecedented demand, Munters' bottom line told a different story. The adjusted EBITA margin declined in the fourth quarter and for the full year. This profitability paradox is rooted in a confluence of external pressures and internal transitional costs.

The company pointed to “temporary tariff headwinds” as a primary culprit, which it estimated impacted the DCT division's EBITA margin by approximately four percentage points in the fourth quarter. While the report did not specify the origin of these tariffs, such trade policies, often related to components and raw materials from regions like China, can significantly inflate manufacturing costs for globally integrated companies.

Compounding this issue were the costs associated with “transitioning to producing new products” within the DCT segment. As Munters ramps up production to meet the demand for its latest cooling technologies, it faces the typical challenges of scaling new manufacturing lines, including initial inefficiencies and dual-site costs. The company is actively expanding its capacity, with a new chiller production facility in the United States expected to be operational during the second quarter of 2026. CEO Klas Forsström noted that these issues are temporary, stating, “operational efficiency is expected to improve as our production volumes increase and our operational set-up matures.”

Strategic Overhaul in a Volatile Market

Beyond the intense focus on data centers, Munters is undertaking a broader strategic re-engineering across its other divisions to build a more resilient and focused business. The AirTech division, which serves a variety of industrial applications, has been hampered by a slowdown in the battery market and cautious investment sentiment in the United States. This led to lower factory utilization and pressured margins, with an estimated negative impact of two percentage points on AirTech's EBITA margin in the fourth quarter.

In response, Munters has implemented aggressive cost-adjustment programs. A plan initiated in late 2024 has already delivered over MSEK 100 in cost reductions in 2025, and further initiatives are expected to generate an additional MSEK 250-300 in savings by the end of 2026. While the company expects the battery sub-segment to remain subdued in the near term, it remains confident in a long-term recovery driven by global electrification trends.

Meanwhile, the FoodTech division has undergone a significant transformation with the completed divestment of its Equipment offering. This move marks a decisive pivot away from hardware sales toward a more scalable, high-margin digital model centered on controllers, software, and recurring revenues. By focusing on its digital platform, Munters aims to tap into the growing trend of digitalization in the food value chain, improving resource efficiency and productivity for its customers while building a more stable and predictable revenue stream for itself.

An Outlook Built on Backlog and Execution

Looking ahead to 2026, Munters' leadership is banking on its massive order backlog to fuel growth. The backlog grew by 53% in 2025, and the company's book-to-bill ratio stood at a healthy 1.6x, providing strong revenue visibility well into 2027 for its DCT division. This forms the foundation for the company's projection of historically high turnover for the full year.

The path to improved profitability is expected to materialize more clearly in the second half of 2026. By then, Munters anticipates that the temporary tariff effects will ease, production volumes from its new US facility will ramp up, and the full benefits of its cost-saving programs in AirTech will be realized. As a signal of its confidence in this outlook, the Board of Directors has proposed maintaining its dividend at 1.60 SEK per share.

The priorities for the year are clear: continue the rapid industrialization and growth in DCT, scale the new digital platform in FoodTech, and execute the operational improvements to restore margins in AirTech. With a robust strategic plan and a historic order book, Munters is now focused on the critical task of execution to convert today's exceptional demand into tomorrow's sustainable profit.