Munters Targets Adjusted ROCE Above 15% as Data Center Margins Fall

Munters Group announced on November 11, 2026 a medium-term target for adjusted return on capital employed above 15%, replacing its operating-working-capital goal while retaining sales-growth and profitability targets. The Capital Markets Day announcement followed the third quarter of 2026, when Data Center Technologies’ adjusted EBITA margin fell to 9.7% from 19.5% a year earlier, even as order intake surged.

The three-to-five-year framework retains average annual total net-sales growth above 14% and an adjusted EBITA margin above 14%. Although the margin level is unchanged, amortization of operating intangible assets will no longer be added back under the new definition, starting with fourth-quarter 2026 reporting. The new returns target replaces the previous goal for average last-twelve-month operating working capital of 13% to 10% of net sales.

New Returns Target Exceeds Recent Performance

Munters reported adjusted ROCE of 11.5% for the third quarter, defining it as last-twelve-month operating profit adjusted for items affecting comparability divided by average capital employed. The new target therefore sits above the company’s recent performance.

Its third-quarter report, published on October 23, 2026, put average capital employed at 11.98 billion Swedish kronor (SEK). The group’s adjusted EBITA margin was 12.2%, down from 13.5% a year earlier. Those margin figures use the earlier definition and are not a like-for-like baseline for the revised profitability target.

Data Center Expansion Weighs on Margins and Cash Flow

Data Center Technologies’ third-quarter order intake rose 127% to SEK 4.907 billion, while net sales increased 15% to SEK 1.789 billion. The contrast between order growth and profitability shows the operational demands of scaling production. Munters attributed the margin decline to lower efficiency during the Virginia production ramp-up, product mix, component shortages, tariffs, higher material costs and growth initiatives.

Group operating cash flow was negative SEK 216 million in the quarter, mainly because of inventory build-up within Data Center Technologies, partly offset by customer advances. Leverage rose to 3.4 times from 3.2 times at the end of June 2026, mainly reflecting the cash outflow and higher lease liabilities.

President and CEO Stefan Aspman said exceptional data-center growth is expected to contribute strongly to near-term sales and called sustained growth from that higher base ambitious but achievable. “The profitability target is set to be demanding to reach while leaving us room to keep investing,” he said, adding that the ROCE target captures both working-capital efficiency and capital invested in growth.

Munters’ accompanying strategic direction is to build on its precision-climate-control position and expand in selected parts of the applied HVAC market through its humidity, thermal and air-quality-control portfolio.

Turning data-center demand into efficient production and stronger cash generation is now the central execution test. The new framework measures that progress not only through sales and margins, but also through the returns generated on the capital required to support expansion.