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Marel Q1 2014 results

28 Apr 2014

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Refocusing for profitability improvement and growth

  • Revenue for Q1 2014 totaled 154.8m, [Q1 2013: 158m].
  • Adjusted EBITDA before refocusing cost was 11.6m or 7.5% of revenue. EBITDA was 8.1m or 5.2% of revenue, [Q1 2013: 16.9m].
  • Adjusted operating profit (EBIT) was 4.6m or 3% of revenue. EBIT was 1.0m or 0.7% of revenue, [Q1 2013: 10.3m].
  • Net loss was 1.9m compared with 5.7m net profit in Q1 2013. Earnings per share were negative by 0.25 euro cents, [Q1 2013: 0.78 euro cents].
  • Cash flow from operating activities before interest and tax was 19.4m, [Q1 2013: 17.2m]. Net interest bearing debt was 208.4m at the end of Q1 2014, [Q1 2013: 239.3m].
  • The order book was at 138.4m compared with 132.4m at the beginning of the year, [Q1 2013: 151.1m].

The market for large projects is still at a low level while sale of standard equipment increased between years. Operating profit in the Poultry segment was lower than usual caused by underutilization in manufacturing and projects taken on in a difficult market environment during 2013. Poultry is expected to show improved profitability in Q2 based on current order book.

The refocusing plan of becoming simpler, smarter and faster was launched in the beginning of the year and is proceeding according to plan. The plan’s objective is to serve customers’ needs more effectively and to reduce the annual cost base by 20-25 million. Annual cost savings that have already been achieved in Q1 amount to annual cost 3.6 million.

First quarter results are as well affected by various non-recurring items amounting to 2.4 million. Those items are not part of the formal refocusing plan and are therefore not reported as one-off items.

Arni Oddur Thordarson, CEO:

“Marel sales are 155 million in first quarter with an adjusted EBIT of 4.6 million that is below potential. Our refocusing plan, which was launched in beginning of the year is proceeding according to plan. During the first quarter we have achieved cost savings initiatives that lower our cost base by 3.6 million annually.

We are taking clear steps to optimize our manufacturing footprint and overall simplify the company structure. Marel is strategically and commercially strong but needs to better align execution with strategy in order to reach its full potential.

In the poultry industry we introduced the RoboBatcher and the SensorX SmartSort. At the same time we are excited about the FleXicut, which will revolutionize whitefish processing.

As stated in the beginning of the year, we believe that profitability will improve over the course of the year. Our most promising markets in the short term are the U.S. and South America. Expansion and modernization needs are building up there and Marel is well placed to capitalize on these opportunities. However, the sentiment in Europe is affected by current geopolitical tension. Despite market volatility in emerging economies during Q1, long-term outlook remains robust”
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Forward-looking statements
Statements in this press release that are not based on historical facts are forward-looking statements. Although such statements are based on management’s current estimates and expectations, forward-looking statements are inherently uncertain. We, therefore, caution the reader that there are a variety of factors that could cause business conditions and results to differ materially from what is contained in our forward-looking statements, and that we do not undertake to update any forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement.