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Marel Q2 2017 results

26 Jul 2017

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All amounts in EUR

Q2 2017 – Strong order intake, solid performance with delays in orders booked off

  • Revenue for Q2 2017 totaled 244.0m [Q2 2016: 264.2m].
  • EBITDA for Q2 2017 was 44.2m or 18.1% of revenue [Q2 2016: EBITDA 48.4m or 18.3% of revenue].
  • EBIT* for Q2 2017 was 35.9m or 14.7% of revenue [Q2 2016: EBIT* 39.7m or 15.0% of revenue].
  • Net result for Q2 2017 was 18.6m [Q2 2016: 22.1m]. Basic earnings per share were 2.62 euro cents in Q2 2017 [Q2 2016: 3.09 euro cents].
  • Cash flow from operating activities before interest and tax in Q2 2017 was 61.2m [Q2 2016: 43.7m]. Net debt/EBITDA was x2.15 at the end of Q2 2017.
  • The order book was at 418.9m at the end of Q2 2017 compared with 390.3m at the end of Q1 2017 [Q2 2016: 306.5m].

Market conditions are good and Marel’s competitive position is strong. In Q2, Marel secured order intake of 273 million. The order book was at 419 million compared with 307 million at the end of Q2 2016. In the beginning of Q3, Marel secured its largest order to date with a groundbreaking Greenfield project with Costco and Lincoln premium poultry in the U.S.

Revenue in Q2 2017 was 244 million with 14.7% EBIT*. Product mix and timing of deliveries of large orders resulted in orders booked off being lower in Q2 2017 than is expected going forward. Cash flow from operating activities was strong at 61.2 million in Q2 2017. Net debt/EBITDA was x2.15 at the end of the quarter. Net purchase of treasury shares amounted to EUR 14.6 million in Q2 2017. The Board of Directors of Marel has at its meeting on July 26, 2017 authorized management to purchase own shares for nominal value of 15 million to be used as payment for potential future acquisitions.

Revenue for the first half of 2017 was 496.5 million and is at same level as pro forma revenue for the first half of 2016. Order intake for the first half of 2017 was 565.9 million compared with pro forma 484.9 million for the first half of 2016. The order book was at 418.9 million compared with 307 million at the end of the first half of 2016.

Marel has agreed to acquire Sulmaq, a Brazilian meat primary processing equipment provider. The aim is to strengthen Marel’s position in Central and South America and ensure better access to a large and growing market for beef and pork. Sulmaq’s annual revenue is around 25 million. The acquisition is expected to close in the third quarter of 2017, subject to customary closing conditions. In the short term, the acquisition is not expected to have material impact on Marel’s financial results.

Arni Oddur Thordarson, CEO:

“In Q2, revenue was 244 million with close to 15% EBIT*. Due to product mix and timing of deliveries of large orders, revenue in Q2 2017 was at a lower level than we expect going forward. Revenue and operational profit for the first six months of the year were at a similar level as for the first half of 2016.

Marel’s competitive position is strong and market conditions are good, resulting in a 17% increase in order intake in the first half of the year compared with the same period last year. In the beginning of Q3, our great team secured our largest order to date with Costco and Lincoln Premium Poultry where Marel is delivering a highly automated state-of-the-art poultry plant in the U.S. Marel, in partnership with its customers, is transforming the way food is processed by enabling our customers to deliver affordable and high quality food in a sustainable way.

We are as well strengthening our position in South America with the acquisition of Sulmaq, which has been at the forefront of providing primary meat solutions in the region. Marel has had great success in the poultry and fish market in South America over the last two decades and is now gearing up for further growth in this 600 million people region ”.

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* Operating income adjusted for amortization of acquisition-related intangible assets (PPA).

Pro forma results include MPS numbers. Pro forma numbers are presented to provide better comparison.

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.