Marel is a growth company. For the period 2017-2026 Marel has set a target of 12% average annual increase in revenues, through both organic growth and acquisitions. Our growth plan involves capitalizing on our strong innovation investment to drive expansion and market penetration. We will also focus on strategic partnerships and acquisitions to fill gaps in the value chain, and to augment our full-line product offering.
Marel is a leading global provider of advanced food processing equipment, systems, software and services.
Marel's strategic objective is to be a full-line provider across our four key business segments of Poultry, Meat and Fish, in addition to the newly added segment of Plant, Pet and Feed. Our focus is to put our advanced, automated systems and solutions to work at every step of the production process and to cover the relevant geographical areas in our industries. Strong organic growth and strategic acquisitions have helped make Marel a leader in its field.
Our product line includes standalone equipment, individual systems and full production lines, all controlled and integrated with Innova, our overarching software solution. This offers our customers process control, real-time traceability and monitoring of throughput and yield that is hard to replicate.
Seamless flow and integration between different applications result in higher overall efficiency and improved yield. Marel has thus become a one-stop shop for customers’ needs for equipment, software and service.
In line with our strategy, we have actively reinforced our value chain in recent years. Strong cash flow has made it possible to support organic growth actively through innovation, advancing our manufacturing facilities and updating our IT platform across geographies. It has also allowed Marel to undertake strategic acquisitions without issuing new shares without issuing new shares or taking out new loans for that purpose. We will continue to fill the remaining application gaps in our value chain through innovation, organic growth, strategic partnerships and acquisitions.
Investing for growth
Marel is fully committed to meeting its target of an approximately 12% average annual increase in revenues in the period 2017-2026 through a balanced mix of organic and acquired growth. By continuously investing in innovation and acquisitions, coupled with strategic partnerships and digitalization, we aim to stimulate and drive organic growth for the future.
The market for food processing solutions, software and services for Marel’s key markets is expected to grow by 4-6% in the long term. We believe the market growth will be at a level of 6-8% in the medium term, or 2021-2026, due to the catch-up effect from the past years and a tailwind in the market.
Population growth, urbanization and the growing income of the middle class are important global macro trends that continue to increase demand for more protein-rich products. Marel’s portfolio of solutions and services is uniquely positioned to address these worldwide trends that influence our customers—and their customers. The addressable market for Marel continues to grow, driven by several factors including: a continued focus on automation to tackle labor shortages and rising costs, the need for flexibility to adapt to changing consumer preferences with different products, and greater emphasis on sustainability where food safety, traceability and efficient resource utilization are top priorities.
We are committed to achieving our targeted average annual revenue growth of 5-7% through acquisitions in the period 2017-2026. Acquisitions support our strategic pillars and drive organic growth, enabling us to achieve better market reach and customer engagement and thus improve customer focus. As we strengthen our line offering and high-quality products, we are able to transfer the technology and expertise from one market segment to another. Moreover, with a shared vision and strategy, we enrich our people and culture.
We do not anticipate that acquired growth will be linear, but rather based on opportunities and economic fluctuations. To capture the full value of acquired companies, we have continued to professionalize our integration capabilities to tap into the strength of the combined organizations. This also helps us capture both untapped aftermarket potential as well as any cross-selling and upselling opportunities from the combined entity.
Through strategic partnerships, we are able to close application gaps in the value chain by combining forces with leaders in various fields. Successful strategic partnerships increase our competitive advantage, accelerate new developments and speed to market.
One example of a strategic partnership is our collaboration with TOMRA, a true technical leader in vision and grading technology. For the past two years, we have been working in partnership developing the Marel Spectra, a revolutionary solution that will enable our customers to deliver the highest-quality products free from foreign contaminants such as plastic and wood. Marel Spectra is a true game-changer in foreign material detection, giving processors ease of mind in their challenge of delivering contamination-free, safe and sustainable food. We are already testing the technology with selected customers and getting feedback on working optimization of the solution.
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