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Results reflect delayed market recovery
All amounts in EUR:
- Revenues for Q2 2013 totalled 178.4 million (m), a decrease of 4.3% compared to the second quarter of 2012 [186.5m].
- EBITDA was 19.0m or 10.6% of revenues [Q2 2012: 18.6m].
- Operating profit (EBIT) was 12.3m or 6.9% of revenues [Q2 2012: 12.2m].
- Net result for Q2 2013 was 5.2m [Q2 2012: 7m]. Earnings per share were 0.71 euro cents [Q2 2012: 0.96 euro cents].
- Cash flow is healthy and net interest bearing debt is 228.8m at the end of the quarter compared to 262.0m in Q2 2012.
- The order book is at 131.8m at the end of the quarter [Q2 2012: 182.6m] which is roughly 13% decrease compared to the end of last quarter [151.1m].
EBIT margin of 6.7% in the first half of 2013
- Revenues totalled 336.5 million for the first half of the year, a decrease of 9.4% compared to revenues for the same period the year before [1H 2012: 371.3 million].
- Operating profit (EBIT) was 22.6 million for the first half of the year, or 6.7% of revenues [1H 2012: 33.3 million].
- Net result was 10.9 million for the first half of the year [1H 2012: 20.1 million].
Marel’s performance in the first half of 2013 reflects challenging market conditions and delayed recovery in the largest markets. Revenues in the first half of the year decreased by 9.4% compared to the first half of 2012.
The order book is lower than at the end of Q2 2012, while being 6m higher than at year-end 2012 (125.4m). EBIT margin of 6.7% is below the long-term target of 10-12% (H1 2012: 9%). The pressure on EBIT is mainly a consequence of lower revenues while the Company remains geared up for increased sales.
The second quarter is in line with expectations with revenues of 178.4m and improved EBIT margin of 6.9%. Clear signs of market improvements are visible in the US while Europe continues to be weak.
The situation in emerging markets is mixed though market prospects remain favorable both mid and long term. A number of important orders were received such as from Australia, US, Canada, Mexico, Brazil, Turkey, Romania and UK.
Marel expects that market recovery will be realized in 2014 instead of in the second half of 2013 and full year revenues are expected to decline moderately.
Theo Hoen, CEO:
“We had a decent quarter considering challenging market conditions. With a growing installed base in recent years and extensive sales and service network, Marel’s revenues deriving from service and spare parts are constantly increasing.
“At the same time investments in large projects are delayed which is causing under-utilization and has influenced our gross profit.
“We will keep our focus on operational efficiency while maintaining a good level of investment in innovation and market development.
“While remaining optimistic about the prospects, we anticipate that market recovery will take longer time despite our earlier view. The underlying market growth is present with investment need building up. We are ready to capture increased demand when markets recover.”
Standalone equipment sales on track with larger projects delayed
Orders received amounted to 159.1m in the second quarter compared to 179.6 in Q2 2012. The slowdown in orders received resulted in a decrease of the order book compared to the last quarter.
The order book amounted to 131.8m at the end of the second quarter compared with 151.1m at the end of Q1 [Q2 2012: 182.6m].
The reason for a slower pace in new orders is the hesitation to invest, in particular in larger projects, whereas standalone equipment, and spare parts and service are on track. Lingering uncertainty in markets, especially in Europe, could prolong delay in investments.
Marel sees that demand for new equipment and update of existing technology keeps building up. Clear signs of improvement are visible in the US after three years of low investment level in the poultry processing industry.
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.