Marel Q3 2012 results – slower growth with improving profit margins
All amounts in EUR
- Revenues for Q3 2012 totalled 164.3 million, a decrease of 2.8% compared to the third quarter of 2011 [169.1 million]. Revenues YTD are up by 10.6% compared with 9 months 2011.
- EBITDA was 20.5 million or 12.5% of revenues [Q3 2011: 25.8 million].
- Operating profit (EBIT) was 14.1 million or 8.6% of revenues in Q3 2012 [Q3 2011: 19.5 million].
- Net result for Q3 2012 was 8.4 million [Q3 2011: 10.5 million]. Basic earnings per share in Q3 were 1.15 euro cents [Q3 2011: 1.42 euro cents].
- Cash flow from operating activities was 13.7 million and net interest-bearing debt was 261.1 million at the end of the quarter.
- The order book amounted to 151 million at the end of the quarter compared to 196.81 million at the end of Q3 2011.
Revenues for the first nine months of 2012 show growth of 10.6% compared to same period last year. The operating profit (EBIT) YTD is 8.9% which is below the Company’s target (10-12%) for the full year.
Marel expects the revenues growth for the year 2012 to be around 5-6% with revised EBIT margin of around 9%.
Theo Hoen, CEO:
"The market in 2012 has been challenging with results in last two quarters below our target. Despite this I feel we are doing well. We have achieved strong growth this year with operating profits close to 9% and expect to meet our EBIT target of 10-12% soon again. We believe that demand is building up and we have many promising projects underway which we expect will turn into orders in the near future.
With our strong global sales and service network we are uniquely positioned to deliver our innovative products. The efforts of our people to create a market driven organization are showing results. Our fish segment is doing very well and the outlook for our meat segment is improving. All in all, we are well on track realizing our growth agenda and I´m optimistic for the coming years.”
Revenues are expected to reach 700 million in 2012
Revenues totalled 535.6 million for the 9-month period ending 30 September which is an increase of 10.6% compared to the previous year. Marel has grown rapidly in the last few years. The third quarter reflects a slower pace in the world’s economy resulting in uncertainty which has caused delays in investment.
Marel has emphasized fluctuations between quarters. For the moment the uncertain market conditions are reflected in the Company’s operations. However, the revenue split in third quarter is geographically well balanced with large projects coming in from Canada, Saudi Arabia and Russia.
As discussed further below under “Markets”, the near- and long-term outlook remains good with steady growth projected in the protein industry. Therefore, Marel maintains its goal for EUR 1 billion turnover in 2015.
Expected EBIT margin of around 9% for the full year 2012
- Operating profit (EBIT) was 47.4 million for the first nine months of the year, or 8.9% of revenues, compared to 51.5 million normalised2 for the same period of last year.
- The EBIT margin is expected to be around 9% for the full year.
Operating profit has improved since last quarter and is up to 8.6% from 6.5% in Q2 while falling below the Company’s target. The main reasons are similar as last quarter; there were some extra costs of realizing projects and the product mix was rather unfavorable due to market conditions. There was less demand for standalone equipment whereas larger projects have lower margins. However, larger projects create future demand for standard products and services.
Order book at acceptable level
Orders received during third quarter are at the lower end of what Marel has seen in recent past, amounting to 133 million. The timing of large orders received always impacts the level of the order book which now amounts to 151.4 million.
Marel’s customers are faced with difficult economic conditions coupled with higher feed prices, which has caused delays in investment decisions both in larger projects and standalone equipment as well as in spare parts and services.
Manufacturing load is at acceptable level. The company’s position in the market is strong and the near-to long-term outlook for orders received is positive as the protein industry is expected to grow steadily in the coming years.
1) This is a restated figure for Q3 2011 of EUR (7.3) million, in accordance with the Q2 presentation which disclosed that the order book was restated following the new set-up of the organization.
2) Taking into account the one-off cost related to pension funding amounting to 11.1 million.
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.